A year ago, forester Andy Wright let the insurance lapse on his softwood plantation in Denmark, Western Australia.
In February fires tore through local forests and destroyed his trees.
"It's probably a quarter of a million dollars of damage. Another plantation on the hill was ready to harvest and its value would be in the millions," Mr Wright said.
Despite the loss, he doesn't regret the decision to cancel his fire insurance.
"Premiums quadrupled on the back of the east coast bushfires a couple of summers ago," he said.
Knowing the excess he would have paid for a claim, and the salvage value of the timber, Mr Wright said insurance would not have been financially worthwhile.
"Even now, in our worst year, we'll probably break even from where we might have been had we got the insurance," he said.
David Wettenhall, another WA forester, said his premium quote rose "7.7 times" this year.
New insurance scheme could offer hope
David Geddes, who consults for foresters throughout Australia and is a former president of Australian Forest Growers, the industry body for Australian plantation foresters, said the number of insurance providers had fallen dramatically.
"Prior to this summer there were half a dozen [insurance] providers but, as far as I'm aware, there's only one insurer this year and their books filled up quite quickly," he said.
Mr Geddes said claims which followed the Black Summer bushfires in 2019-20 were among the largest insurers had ever seen, coinciding with blazes in North America and Europe.
He said a new insurance scheme was in the works to help small plantation growers next year.
"This summer has been particularly difficult but we expect there will be a scheme available for next summer," Mr Geddes said.
"I think [the lack of insurers] is a short-term issue."
PSC Insurance Group and the Insurance Council of Australia declined to be interviewed for this story.
'One-in-five chance' of harvest for growers
Nevertheless, Mr Wright saw no end in sight for the dramatic rise in premiums for forestry insurance.
Wood chip plantations like his weren't the only ones affected. Construction timber, carbon forestry and furniture-grade timber plantations all relied on the same insurance.
"It doesn't matter what you're growing the crop for," Mr Geddes said, "it's all covered by forestry insurance."
Professor of forest management and ecology at the Australian National University, David Lindenmayer, said logging in native forests made them more vulnerable to severe fires and the forestry industry should urgently refocus on planting more managed plantations.
"We're much better to source our timber from plantations, and we're much more likely to get a crop from plantations in a climate of increasing fire, than we are from native forests," Professor Lindenmayer said.
Insurance is only the latest obstacle faced by Australia's timber industry which is still reeling from the Black Summer bushfires.
Even if coverage is made available next year, Mr Wright said the premiums were unsustainable for many growers and a serious disincentive to investment in new plantations.
"It's a major problem for forestry in Australia and big companies are really scratching their heads over what to do," he said.
"If you're an investor and you want to put your hand in your pocket for a risky 30-year investment in the case of softwood, it's going to make you far more reticent."
Last financial year, the total value of Australian wood exports was $2.7 billion — 18 per cent less than the year before and $900 million less than 2017-18.
Tackling climate change part of solution
Dr Pep Canadell, chief research scientist in the CSIRO Climate Science Centre and executive director of the Global Carbon Project, said the area of Australian forest lost to fire had been growing by almost 50,000 hectares every year for three decades.
Professor Lindenmayer said there were ways to tackle the problem.
"Tackling climate change, letting native forests grow to be as old as possible — because that's where fire risks are lowest — and designing our plantations to reduce the risk of extensive areas being lost in a single fire [will help]," he said.
But in the meantime, foresters like Mr Wright need insurance to be affordable and available in order to continue planting.
If the number of new plantings continues to stagnate, Professor Lindenmayer said the availability of timber would be impacted in years to come.
"The plantation industry dominates the Australian landscape in terms of its financial value and the sawn timber we need for houses," he said.
