Loggers reject plan to increase fees, ban Purpleheart log exports

Mar 12, 2017 News

The Guyana Forestry Commission (GFC) is proposing a full export ban of logs, on a number of top species and increase in export fees to be paid.

Loggers are rejecting a proposed GFC policy to ban log exports of several species and increased export fees on a number of others.

However, despite meetings with GFC late last year, loggers yesterday insisted that they have rejected the proposals and will as early as tomorrow be issuing a public statement in rejection.
According to the Proposed National Log Export Policy (2016-2020) that is on the website of the GFC – the independent authority that overlooks the country’s forests, given the result of the export policy for the last two phases, the third one, if adopted, will use a combined approach of banning specific species of exports in log form, and instituting a progressively increasing rate of export commission, on specific species.
“This option would have the effect of limiting overexploitation of the premium species, while providing an opportunity to develop Guyana’s lesser used species. Valued overseas markets such as the EU and North America will continue to look for hardwood species which meet their needs in terms of strength and appearance. Therefore, today’s lesser used species are potentially future premium species,” the proposed documents say.
The seven Schedule A species on which GFC is proposing a full export ban are Purpleheart, Locust, Crabwood, Red Cedar, Washiba, Letterwood and Snakewood.
Also proposed is the raising of export commission to 22 percent on five species up to the end of 2018 and to 25 percent from 2019. These species include Wamara, Greenheart, Kabukalli, Shibadan and Bulletwood. It was reportedly at 17 percent.
Another schedule proposed seven species that will see export commission being hiked to 18 percent up to 2018 and another two percent by 2019, are Brown Silverballi, Tatabu, Mora, Wallaba, Tauroniro, Limonaballi and Simarupa.
According to the proposed policy, the idea is that the highest value species, like Purpleheart, are used predominantly in added value applications.
“The utilization of a mix of schemes with a ban and levy mechanism will allow for adequate transition time and would be available for the sector to move into added value forest production.”
GFC is contending that the proposed system is simple and cost effective, resulting in ease of implementation.
“The differentiated progressive scheme of export commission will act as a deterrent for log export and will thus encourage value adding in the forest sector. Movement towards value adding will result in increased employment for the local economy, especially in skilled jobs areas.”
GFC also believes that there will be little social dislocation (e.g. in employment) owing to the gradual and indirect nature of the proposed mechanism.
“Given the analysis presented above, the proposal is made for the following log export policy to be implemented for the period 2016-2020 with a provision for a midterm review to be conducted in December 2018.”
GFC said in the proposed documents that all species not listed in the schedules will attract a rate of two percent.
“Export commission will be computed on the free on the board (fob) value of logs and squares. The implementing mechanism under the above Policy will follow the similar system to which the GFC has in place for export commission. It is recommended that the outlined incentives regime outlined in the table in previous section also be considered.”
Last year, forestry production declined 30 percent, principally as a result of Barama Company Limited halting the production of logs and the UK’s restriction on greenheart logs originating from Guyana.