Dear Editor,
On the subject of value added by the timber industry, this is a great ‘catch cow’ phrase and, to the ill-informed policy makers, it puts them at risk of further destroying the private sector timber industry by hindering the export of logs with the imposition of unrealistic levies (20%) on imagined prices.
Of all our extractive industries why is it that it is being suggested that only timber should be penalized into doing (uneconomic) value added? What about bauxite? For years we have heard of Guyana making aluminium. This would give us a basic metal on which many products could be based. Gold and diamonds: There are many small jewellers, but how many of international fame? Oil: This we are told won’t even touch Guyana’s land mass; it will be out of the bowels of the sea, into a ship and away. Value added?
Timber has had many attempts at value added. The National Service organization when active, imported several items of valued-added machinery, including a toothpick making machine. What happened? The experts’ opinion is that only large companies are needed to develop the Guyana timber industry. How many large firms have lasted over forty years? The biggest, it is believed, was British Guiana Timbers, owned and controlled by the Colonial Development Corporation, which lasted about 25 to 30 years. Then there was Demerara Timbers at Mabura Hill. This company, government owned, had every advantage, including a two million US dollar access road. This company which had a pristine forest concession has changed hands about four or five times in about 30 years. Barama has lasted 25 years more or less, and has a difficult future.
The whole industry, both big and small companies, is suffering severe cash flow problems, Yet the Guyana Forestry Commission (GFC) solution to the problems facing the industry is to threaten some producers because of “low levels of production for the period January-September 2016”.
What is not realized by the GFC is how producer’s production is effected by the late issuance of the State Forest Allocation (SFA) package. In one known instance, this package was not approved and was not given until the end of April; so if your production is down for the first nine months this does not take into consideration that 44% of production time has been lost because of the bureaucratic requirement of the GFC.
Another delay to production time is the way the tag system is implemented. It is advised that no more tags are issued until the last tag is used. This necessitates a trip to Georgetown. There is no work for the forest crew so they take ‘time off’. When tags are received, it is then necessary to reassemble the crew, so perhaps as much as a week’s production time can be lost, thanks to GFC not issuing tags in sufficient volume, or before the last tag of the previous issue is utilized.
These are simple things to rectify if the mindset of the Commission can be changed. Perhaps, some day, the Board will take an interest in the GFC. Perhaps the Forestry Commission may be replaced and a Forestry Department established. The Forest Department was more au fait with the industry than the GFC, which seems to believe its duty is to control the investor’s investment while failing to facilitate the industry.
For example, there is the export log policy recommendation. Once royalty has been paid the log is the property of the concessionaire; it is her/his log, the owner has invested money to extract the log, it is the owner’s log. If policy inhibits the rights of the owner to sell her/his product, then policy must buy the product at world market prices.
In better days, the GFC reports having a surplus of cash in the vicinity of $1.6 billion. This money is alleged to have been spent through another agency on a hotel, and projects unrelated to forestry. It was not spent to encourage production by introducing a revolving fund, or finding markets. In fact all responsibility for finding export markets was repealed on January 22, 2009.
In 1994 a forest economist advised the GFC who employed him that if the industry faced unrealistic charges, it could not survive. Unfortunately, his work was ignored; as a result, Guyana now faces this reality.
Yours faithfully,
Louis John Patrick Willems
