Inquiry into VicForests' timber management

VicForests says it will fully cooperate with an inquiry into its practices and procedures after being accused by a Victorian MP of potentially putting the states timber mills in jeopardy.

Jeff Bourman, a state MP for the Shooters, Fishers and Farmers Party, has established a parliamentary inquiry into VicForests, who manage the state's timber supplies.

The soon-to be closed Heyfield Mill sits in Mr Bourman's electorate and he says its dire situation is a direct consequence of not being able to secure log supply from VicForests.

""The inquiry will look into how the management of our forest timber supplies has been permitted to get into such a dire state that it has put the sustainable Victorian timber industry at risk," he says in a statement on Thursday.

"We are seeing timber mills across the state either closed, or in the process of closure, due to lack of wood supply instead of seeing a booming and diverse rural industry."

The inquiry will explore how wood supply projections can fluctuate so rapidly from healthy ongoing supply to nothing, the party says.

VicForests acting CEO Nathan Trushell said the organisation welcomed the inquiry.

"VicForests is an open and transparent organisation and will cooperate with any inquiry into our forest management practices and procedures," he told AAP on Thursday night.

Mr Bourman added that the inquiry won't be a "witch hunt".

They simply want to uncover the truth for mill workers and their families "who are hurting".

The Gippsland-based Heyfield mill will close in September 2018 after VicForests cut its timber supply and its owners, Australian Sustainable Hardwoods (ASH), rejected a $4.7 million, three-year operational subsidy from the state government.

The company also rejected Victoria's offer of a three-year contract of one year's timber supply at 80,000 cubic metres and two years at 60,000 cubic metres.

A spokesman for Mr Bourman said the inquiry had been accepted on Wednesday night and was due to report on July 21.