Barama’s exit hasn’t had big impact on timber industry, Singh says

-reports increase in log production

The relinquishment of the former forest concession held by Barama Company Limited (BCL) has not had a significant impact on the timber industry, which recorded an increase in log production last year, according to Commissioner of Forests James Singh.

Singh was speaking at a Guyana Forestry Commission (GFC) press conference on Monday, when he and board members and other senior staff provided an update on the agency’s performance last year.

“…We all thought that Barama not renewing the concession would be a significant impact but that did not turn out to be so. Because if you look at the production we have gotten this year and last year, we actually had more production,” Singh said.

According to the data that was provided, the GFC recorded a total production of 377,111 cubic meters, as compared to 353,495 cubic meters for the same period in 2016, which represents a 7% increase in total production level. As a result, there is a projected production of 400,000 cubic meters for this year.

However, the GFC recorded a total of US$14.6 million in revenue earned from exports last year, compared with US$16.2 million in 2016. The total export value was recorded at US$39.1 million in 2017, as compared with US$41.9 million in the previous year – a 6.7% decrease. The projected revenue for 2018 is earmarked at US$41.5 million.

Singh also went on to state that the impact on workers of BCL’s downsizing was also way less than they had expected.

“…I think it was 800 workers that would’ve been unemployed and some were absorbed in their [Barama] Land of Canaan operations and most of the other persons were absorbed by the other forestry operations as well as the mining sector,” Singh said, while adding that the Commission had expected to lose some $250 million “but that did not materialise” and that the impact of the company’s withdrawal was not as significant as they were expecting it to be.

With a recorded gain in production, the Commission highlighted and emphasised that the smaller concessionaires have been consistently producing more than the large concessionaires over the last decade.

It was stated that large concessions account for about 35% to 39% of all production, while the small concessions usually contribute between 5% and 10% of the large companies. The remaining production comes from the Amerindian villages.  While it was a positive year for the Commission, there were challenges. Singh said that some of the challenges they would’ve faced in the sector included a “depressed market” and poor access to interior roads.

“We have been advocating for value-added production and, thankfully, it has increased but not on the level we would want it to and it is straining the sector,” he said.

One of the big issues they face is not being able to acquire vehicles with duty-free concessions, Jocelyn Dow, Chairperson of the GFC Board, said. She added that they’ve had productive discussions with the Guyana Revenue Authority but the lack of vehicles often hinder their progress. “You can always have more personnel but we certainly need more vehicles, ATVs, 4x4s,” she said.

According to a Commission media brief, the total revenue for 2017 was approximately $1.1 billion compared to the budget of $1.34 billion.

It noted that the 2017 revenue budget was based on the assumption that the stumpage value system would have been implemented. However, the actual system that was applied in 2017 was the existing one of charging royalty and acreage fees and this was a significant reason for the shortfall, the Commission said.

The revenue budget is earmarked at $1.36 billion this year, with their total expenses being tagged at $1.36 billion.

“The Ministry of Natural Resources, the Board of Directors of the GFC and the Commission have worked together with the Ministry of Finance to implement a suite of measures that are directed at strengthening and improving the sector’s performance in 2018. These measures will be implemented in collaboration with the private sector and indigenous communities with whom there are continuous consultations,” the Commission added.

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