New rules to regulate log traders have found support from Wood Processors and Manufacturers Association chairman Brian Stanley.

Stanley said wood processors could not get hold of local logs because of massive price distortions in the domestic log market, caused by overseas subsidies. Forestry Minister Shane Jones has introduced legislation to protect New Zealand mills.

"This legislation will help to ensure that log traders treat New Zealand wood processors and manufacturers fairly, enabling our local processors to add value to logs and provide local employment," Stanley said, adding that the association congratulated Jones for "leading the charge".

The Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill, which is now going through parliamentary processes, looks to set a test to ensure that people trading in logs or providing advice are "fit and proper".

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"As an industry that prides itself on, and is certified for, its ethical practices, we would expect the government to set a high bar for registration here," Stanley said.

"As a manufacturing sector feeling the full brunt of unfair industrial support measures overseas, the WPMA would expect the proposed Forestry Authority to enforce standards for sale and purchase agreements for domestic log transactions that reflect the real world price of logs and not prices artificially jacked up by subsidies.

"Government subsidies to the wood industry are alive and well overseas. Unless we level the playing field in the New Zealand log market we will see further loss of jobs in the regions, wood prices to the New Zealand public driven up, an ongoing disincentive to invest in our industry and the nation's hopes of a future zero-carbon economy based on the wood industry dashed.

"We are not calling on the government to match these subsidies – they are illegal under WTO law - but asking for regulations that remove the extreme market-skewing effect foreign subsides have here.

"Mr Jones is taking a step in the right direction, and we congratulate him."

The Forest Owners' Association, however, said the bill raised the spectre of an "unacceptable and pointless" bureaucratic cost to all parts of the forest industry.

"The government speakers seem to think that giving a certificate to someone who buys and sells logs is going to lead to more logs being processed in New Zealand and not exported," president Phil Taylor said.

He wondered if the government was going to target other primary industries to force more domestic processing.

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"Sometimes the raw material is the best thing — look at apples and kiwifruit," he said.

"Is the Government going to force the wool industry to process more than the current 5 per cent of the national clip in New Zealand carpet mills? We process 42 per cent of our wood harvest right here in New Zealand, more than eight times the ratio of the wool industry.

"The Government obviously has fantasies of employing more processors with no market to sell to. It's been fundamentally misinformed."