I've heard that too, that wood chips rob nitrogen from the soil as they break down/rot. Woodchip can cause nitrogen shortage for new plants, so mix a nitrogen-rich organic fertiliser in the mulch to counteract this (grass clippings or nettles) I tend to use them just on my paths... the bits are a bit sharp anyway to have on the soil, when you're hand-weeding.

Here's a useful guide to mulches: http://www.gardenorganic.org.uk/scho...ingMulches.pdf

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