Stumpage price determination and investment in Australian forests: Implications for plantations and small-scale producers

Abstract

This chapter addresses the issue of log pricing methodologies before and after major reforms in the Queensland timber industry in the early 1990s. It assesses the impact of industry structure on price determination at a State leve, focussing on supply and demand characteristics in the log market. It is concluded that the current bilateral monopoly arrangements deliver inefficient market outcomeswith profit shares dependent on market power,but support capital investment and size economies.Location, volume and transport factors disadvantage farm foresters leaving them as price-takers with less security of gaining guaranteed sales.