Key industry groups confirmed the figures yesterday, saying that 15 to 25 per cent of the 60 to 80 contractors left in the State could be gone before Christmas.

According to the groups, second and third-generation contractors have mortgaged their houses and spent savings meant for their children to generate cash to keep operating.

Deputy Opposition Leader Jeremy Rockliff raised the issue in Parliament yesterday, describing the contractors' situation as equally as grim as that of North-West dairy farmers for whom a special rally was held last week.

Mr Rockliff urged Primary Industries Minister David Llewellyn to decide on amending Tasmanian legislation covering contract prices to bring it in line with more equitable Victorian legislation.

"He (Mr Llewellyn) has had the Victorian legislation to consider since August," Mr Rockliff said.

He also wants Tasmania to seek Federal Government funding for exit packages so that people can "exit the industry with dignity" if that is what they decide to do.

Tasmanian Forest Contractors Association chief executive officer Ferdie Kroon said the alternative was that the industry would be gutted, with contractors and their workers going to the wall.

Mr Kroon said that contractors had been paid increasingly low prices for more than a year.

The major companies that they supplied had suffered substantial cuts in prices paid for woodchips and the price drop had flowed on to contractors, Mr Kroon said.

Gunns is just about the only company taking woodchips for the once lucrative Japanese and Chinese markets.

Tasmanian Construction, Forestry, Mining and Energy Union spokesman Scott McLean said that the global financial crisis had hit Japan particularly hard and pushed China to pay unrealistic prices.

Mr Kroon said that contractors had been able to refinance rigs and loans with the banks at the start of the year to give them cash to get through the crisis, but that was no longer possible.

He said that the contractors left in the industry represented 1000 to 1500 harvest and haulage workers that they employed.

"We've probably already lost about 100 of them, based on last year's contracts already," Mr Kroon said.

Mr Rockliff wants Tasmania's Forest Contracts Code amended so that "all the power is not with the company", he said.