Friday, October 3, 2008
Timber and myths
The retail prices of products made out of wood fetch astronomical prices. Timber is fast proving to be an uneconomical for construction and concrete pylons and cross beams are the preferred alternatives. Aluminium door and window frames are now common in new home construction.
As a grower of wood, it is pure imagination to believe one can receive a fair price, and accordingly many people are being fooled into believing timber to be a better alternative to food production, due to rich rewards in the harvest.
Today, I sold a very large, mature, ready to harvest lunumidella tree for Rs4,000.(not even US$40) In the past the wood was primarily used for ceiling rafters but is now increasingly used for furniture and doors as a cheaper alternative to the very expensive woods like teak. The retail value of furniture made from the wood from this tree can easily exceed Rs200,000, with the hinges alone for a door costing more than the price paid for the tree.
It is a tree I have to harvest soon as this timber deteriorates, and I am not at present able to make use of it for the purposes I had in mind, due to the expense, I have no option but to sell. The purchaser will spend more to cut the tree down than he paid for it, then he will need to hire an elephant to pull the logs up the slope to an area to load on to a tractor trailer to take to a sawmill. He will therefore incur about Rs30,000 to get it to the mill before the substantial cost to have planks cut to the sizes he wants for his purposes.
What I want to illustrate here is the farmer’s valuable contribution, in growing the tree, so the economy and gross national product can increase by approx Rs150,000, when discounting the import element of items used in the value addition process. It is a salutary lesson for the reader to understand how the price of a piece of furniture is made up, and that without the grower, none of this economic activity can take place resulting in the final product.
I am not envious of the man who takes the rest of the risk, and puts up the money up front so he can make a good profit. That is capitalism at play. If I want to make full use of this I have to then take all the risks, and put up money from borrowings and either hope to sell the items after designing and making them, or use them myself. I was free to choose, and under my current circumstances made the correct choice. If I spent a week getting other offers I may get a further thousand or two but it is not worth the effort.