The export of round logs from Papua New Guinea will be phased by 2010 and downstream processing phased in by logging companies.
The Newspaper, the National, reports the move could mean the loss of nearly US$150 million worth of revenue from exports annually.
The Forest Minister Belden Namah says a K30 per cubic meter royalty to landowners will be effective as of the end of this week.
The newspaper reports he stressed that downstream processing must take place in the forestry sector where logging of forests make way for viable agricultural projects such as oil palm.
Mr Namah said that logging projects must fund road and infrastructure projects and provide spin-off benefits for the forest communities and the country