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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Nemer who wrote (4439)	8/27/2001 2:05:59 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 33421

Hi Nemer, Stumpage refers to the cost of the timber before it is removed from the forest tracts that are up for auction. It is the fee paid to the NFS here in the US or to the provincial governments in Canada, particularly B.C. The argument in favor of the imposition of the 19.3% tariff is that the B.C. government is illegally subsidizing the cost of timber for the likes of McMillan-Bloedel and their competitors. Not a heck of a lot different from what we used to do by having the Forest Service build the roads into the tracts to be harvested and charging this cost to the general fund at USDA instead of having this cost paid for by the lumber companies, who could thus bid a lower price for the right to harvest the forest. What's changed is that we've stripped 98% of the old growth in the Pacific Northwest, and the only large tracts of virgin growth are north of the border. Now, our lumber companies are forced to compete with a trivial resource base, against the last remaining stands of easily exploited virgin forests. Since there's no way for the U.S. suppliers to compete based on their resource base, they rely on the political system to attempt to protect their competitive position. -Ray