Forested Landscapes in Perspective Prospects and Opportunities for Sustainable Management of America's Nonfederal Forests (1998) / Chapter Skim
Currently Skimming:
8 Investment Levels and Potential Opportunitites
8 Investment Levels and Potential Opportunitites
Pages 109-132
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From page 109... ...
1993~. Although the owners of industrial and nonindustrial private forests appear to invest to maximize profits, the investment and harvesting activities of nonindustrial-forest owners reflect the importance of nonmarket values (Newman and Wear 1993, Kuuluvainen et al.
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From page 110... ...
· Pursuing management activities associated with particular objectives, such as tree planting, timber-stand improvement, or wildlife habitat enhancement. · Subsidizing the forest in the form of cost-share programs, tax incentives, or technical-assistance programs.
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From page 111... ...
identify timber production as their primary reason for ownership, but those owners control 30 percent of all private forestland (Birch 1996~. Furthermore, management objectives for private forests are transitory and change with each new owner.
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From page 112... ...
Relying on others for timber. Although the industry owns over 71 million acres of forestland, a large percentage of its timber is supplied by other sources.
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From page 113... ...
Wood-based enterprises consider it is essential that uncertainties regarding the availability of timber be eliminated or reduced to acceptable levels. How that is accomplished varies from firm to firm, although strategies generally include feesimple ownership of forest property, supply agreements with owners of private forestland, and contracts (short and long term)
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From page 114... ...
These forests provide a wide variety of goods and services to tribal members and the general public. Significant concern about the status of and level of investment in Native American forests led to the National Indian Forest Resources Act, which directed the Secretary of the Interior to obtain an independent assessment of conditions affecting investments in Native American forests and their management (Indian Forest Management Assessment Team 1993~.
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From page 116... ...
By some estimates, over 60 million acres of urban land in the United States are forested; 75 percent of the nation's population live in such environs (Dwyer et al.
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From page 117... ...
The area of nonfederal forests increased from 1987 through 1992 by approximately 3 million acres (Table Am. However, that increase masks some important regional shifts, most notably declines in the Rocky Mountain region and a large (nearly 7 million acres)
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From page 118... ...
Nevertheless, a significant overall increase appears to have occurred in the wood volume of forest trees in recent decades and, thus, in the amount of capital invested in nonfederal forests. Nonindustrial Private Forests Nonindustrial private forestlands account for 32 percent of the nation's softwood inventory and 72 percent of the hardwood inventory (Table A-21~.
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From page 119... ...
Tree planting, for example, is a highly visible, fundamental investment in forestland. In 1995, private landowners planted approximately 1 million acres of trees, which amounted to 85 percent of all planting activity in the nation (Table Am.
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From page 120... ...
Tree planting on private forestland by the USDA Conservation Reserve Program peaked in the 1980s at over 3 million acres (Moulton et al.
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From page 121... ...
These special features of forests and forestry can make investments in them unattractive to private investors and call for ways to reduce risk, increase efficiency, and reduce cash-flow problems (McGaughey and Gregersen 1988~. Limitations on nonindustrial private forest landowners' access to capital markets are also a concern.
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From page 122... ...
The investments mandated under these programs are unpopular with many landowners and have been criticized for diverting funds from other investment opportunities. In general, however, the effect of public regulatory programs on nonfederal forests has been to increase tree planting, improve water quality, and protect wildlife habitats.
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From page 123... ...
and on nonindustrial private forests, the implications of reduced CRP planting are especially critical for that region and for those nonindustrial forest owners. Concern over future timber supplies is increasing because of the scarcity of timber resources in the South and the reluctance of nonindustrial private landowners to plant trees in response to higher stumpage prices (Alig et al.
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From page 124... ...
to have 47 million acres of nonindustrial private forest regenerated (USDA Forest Service 1989~. Similarly, the Stewardship Incentives Program in 1992 assisted 579 persons in developing stewardship incentive plans covering 89,541 acres at a federal cost share of $293,000 (Agricultural Stabilization and Conservation Service 1993~.
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From page 125... ...
Also enlightening is the rate of federal investment per acre in nonindustrial private timberland via USDA Forest Service state and private programs versus the agency investment in national forest timberland. The latter is approximately $30 per acre while the former is about $0.50 per acre.
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From page 126... ...
, lease arrangements for timber productions, and formation of cooperatives that pay annual fees to landowners in anticipation of access to timber. Improvements in the investment climate for nonfederal forests also implies changes in allowable tax deductions for reforestation and management costs, changes in the effective tax rate for capital gains, providing tax credits for industrial assistance to nonindustrial forest landowners, and providing favorable property tax laws for forestland.
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From page 127... ...
Especially innovative funding mechanisms for private financing of activities on private forestlands include Norway's Forest Trust Fund (Oistad et al.1992) and Oregon's Forest Resource Trust Fund (Box 8-3, Box 8-4~.
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From page 131... ...
This points to the following specific recommendations: . Major deterrents to private investments in forestry that affect investment by nonindustrial private landowners, especially lack of sufficient advance capital and low expected rates of return, should be eliminated.
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From page 132... ...
132 FORESTED LANDSCAPES IN PERSPECTIVE · Federalfiscal and technical assistance programs leading to investments in private nonfederal forests should be sufficiently large to affect the use and management of nonfederal forests. · Innovative public and private revenue sources for investments in nonfederalforests, including general obligation bonds and various forms of private trusts, should be established.
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