Private forest investment and long-run sustainable harvest volumes

Private timberlands in the United States have the biological potential to provide larger quantities of timber on a sustainable basis than they do today. Most opportunities for increasing growth and harvest lie on nonindustrial private lands in the South. Past studies, based on fixed scenarios of future prices, also suggest that many of these opportunities for intensified management can be undertaken with positive economic returns. Translation of these physical and apparent economic potentials into projections of future management and harvest requires a model of private timber management investment behavior. This study examines the dynamics of investment in private forest management according to a model of timber markets and timber supply in which intertemporal levels of private investment, harvest, and timber prices are all endogenous. The results of this model are used to examine the extent and types of possible future private management investments and how these will affect timber supply. In addition, the sensitivity of these projections to variations in key market and behavioral determinants is examined through simulation of alternative scenarios involving reduced public timber harvest and constraints on planting investment of nonindustrial private owners.The base case illustrates the substantial potential of timberlands for increased growth and harvest. This requires, however, investments in planting well beyond those observed in recent years. Given this, the area in planted forests would almost triple within the next 30 years. Expanded investment would allow immediate increases in timber harvest and sustained increases in timber inventory, with virtually no trend in softwood log prices. Projected increases in plantation area would concentrate timber production on fewer hectares, with more hectares managed passively. Naturally regenerated forests in the future would cover at least three-quarters of the private timberland area, with hardwoods continuing to dominate. Restricting nonindustrial private plantation investment to levels observed in the recent past markedly alters projections for softwoods, thus raising prices and reducing timber harvest relative to the base case across the full projection period. In contrast, reductions in public timber harvest alone result in increased prices and reduced total cut in the near term, but have limited impact on the outlook three-five decades hence, because private investment effectively compensates for public timber harvest reductions.     

Optimal forest stock and harvest with valuing non-timber benefits: a case of US coniferous forests

How much to cut and to remain, as well as when to cut is an important decision-making issue in forest management. Unlike forest age, forest stock and harvest levels are applicable to both plantations and natural forests. This paper investigates the optimal forest stock and harvest with the consideration of both timber and non-timber benefits. The impacts of the discount rate, silvicultural cost, marginal timber benefit, and marginal non-timber benefit on the optimal forest stock and harvest are also examined. The results indicate that forest stock should be thickened when non-timber benefits are valued in addition to timber. The optimal steady state stock increases with a decrease in the discount rate, or an increase in marginal non-timber benefit. However, the impacts of the discount rate, marginal timber benefit, and marginal non-timber benefit on the optimal steady state harvest are ambiguous. In addition, a decrease in the discount rate has the same effect on the optimal steady state stock and harvest as an increase in the ratio of marginal non-timber benefit to marginal timber benefit. These theoretical results are illustrated through an empirical example of the US coniferous forests.     

A proxy for investment in forest management

Figures on dollar amounts invested in non-industrial private forests are not easily available, but such information is necessary to quantify long-term timber supply elasticities. A method for finding a proxy variable for the number of dollars invested in the management of these forests, unique up to a linear transformation, is presented and tested. The method is based on ordinary forest inventories which are used to estimate actual current growth. The ratio of current growth to potential growth derived from site specific standard yield functions for a given management intensity level is shown to be a justifiable proxy for investment made in previous periods, provided certain assumptions are made. The validity of those assumptions is confirmed by empirically testing a cross-section of small forests in Norway.     

Tropical Forestry

An overview of the forestry sector in Costa Rica was undertaken to determine whether the existing management practices of timber resources hold the potential to meet the country's demands for timber in the immediate decades to come, and to identify changes that might be needed in the management of forested lands. To meet these goals, we examined the present status and potential future contribution of the two newest forest sectors: the management of natural forest and plantation forestry. Rcsults indicate that the present management of Costa Rica's timber resources does not hold the potential to meet the country's demands for timber for more than the next ten years without severe loss of its forests. Substantial progress is occurring, but at an insufficient rate. Moreover, despite the considerable headway made in conservation in recent years, the rate of deforestation remains high. A number of factors limit advancement in natural forest management and plantation forestry, both of which have the potential to deaccelerate deforestation. In natural forest management, constraints are the rate at which forests are being brought under management, lack of budgetary provisions for fiscal incentives to private owners who alone cannot be expected to bear the cost of benefits of natural forest management that are national or even global in their distribution, and the weak infrastructure, extension services and research support to meet management goals. In the case of plantation forestry, the capability of this sector to produce commercial timber is not known. Moreover, inadequate management and extension services together with the misuse of the incentive system by private owners is likely to limit the potential of plantations. Institutional constraints include outdated legal and bureaucratic framework, market interventions, absence of clear policy toward natural forest management and plantation forestry, poor investment in infrastructure, extension and research support, and inadequate interaction among various agencies responsible for the development of the forestry sector. Such institutional constraints have allowed the proliferation of disincentives against the development of a sustainable timber sector. If the Costa Rican government's objective is to encourage sustainable forestry, it must first clearly articulate the policy and then create the appropriate legal, economic and institutional framework for implementation of the policy. Costa Rica, with its enlightened public administration system, vast technical and scientific knowledge about its forest ecosystem and extensive assistance from international organizations, must succeed, otherwise prospects for sustainable forestry in thc less fortunate tropical countries would be bleak.     

Effect of land prices,transportation costs,and site productivity on timber investment returns for pine plantations in Colombia

The relative importance of land costs, site quality, and forest location are major concerns in forestry investments, but little research has been done to assess the impacts of these or other factors on financial returns. In response to this issue, the effects of land prices, wood transportation costs, site productivity, and discount rates on timber investment returns for pine plantations in the Andean Region in Colombia were estimated. For all the scenarios analyzed, the internal rate of return varied between 6.4 and 15.6%. High site quality with high growth rates were profitable in all scenarios at real discount rates ranging from 8 to 12%, but low site qualities seldom had positive net present values. Less expensive land and locations close to mills had better rates of return. More distant locations, poor quality sites, or areas with high land costs generally did not meet the discount hurdle rates. Site quality, which is the factor most easily manipulated by intensive forest management and improved technology, was substantially more important than land prices and transportation differences in determining timber investment returns.     

黑木相思与速生桉商品用材林培育的经济效益对比分析

以国家开发银行贷款建设200 hm²黑木相思与速生桉用材林培育为例,采用动态经济分析方法进行财务净现值、内部收益率等指标及投资不确定性分析,研究两者投资经营的经济效益。结果表明,计算期（13a）内,黑木相思和速生桉用材林的内部收益率、投资利润率和资本金利润率均高于行业基准收益率（8%）,项目可行。黑木相思的财务净现值、内部收益率高于速生桉,其经济效益好,盈利能力和抗风险能力强。     

英国林区道路发展及启示

研究国外林区道路发展有利于借鉴相关成功经验。文中简介了英国林业发展概况, 从林道功能演变及外部连通性、林区道路等级与林道网密度、林道网优化配置的影响因素和林道建设依据及关键技术指标方面概括了英国林区道路发展现状, 从投资主体与审批、资金主要来源、林道投资管理以及私有林与国有林等方面分析了林道建设的投资及融资机制, 从工程建设、项目质量、资金使用和环境评估方面总结了英国林道管理模式, 从私有林主和政府共同投资林道建设、严格制定林区道路建设标准、以环境影响评估指导林道建设和促进林区道路的多功能利用等方面探讨了英国林道发展的4点主要启示, 对于我国林区道路建设具有一定参考作用。     

澳大利亚林区道路发展及启示

澳大利亚森林资源丰富,林区道路建设历史悠久,密集而发达的林区道路及其现有林道改进方案保证了澳大利亚森林道路的良性有序发展,保障了森林和木材资源的可持续、综合和有效利用.文中概述了澳大利亚林区道路发展现状,包括林区道路“用者自付”原则下的多元化投融资机制,以及林区道路的管理体制和机制、建设规划及建设规范等;分析了中国林业...     

Public compensation for windstorm damage reduces incentives for risk management investments

Governments of some European countries compensate landowners for windstorm damage to forests. We analyze the impact of such programmes on non-industrial private forest owner decisions to purchase an insurance policy for windstorm coverage and other natural events and/or invest in risk-reducing forest management activities. We develop a theoretical model to predict demand for an insurance policy or risk-reducing forest management activity, and improve upon previous efforts by varying the damage losses proportional to timber stand value. We characterize the comparative static effects on risk management investments of variations in the price of insurance, landowner risk attitude, timber stand value, and presence or absence of public compensation. Then we discuss public policy implications and analyze some alternative approaches. We conclude that providing public financial assistance to non-industrial private forest owners after damage-causing events may reduce their incentive to purchase insurance or invest in protective forest management activities.     

A financial analysis of rain forest silviculture in southwestern Sri Lanka

We examine the financial aspects of three silvicultural systems to encourage the sustainability of valuable hardwood species in mixed-dipterocarp forests of southwest Sri Lanka. We compare the net present value (NPV) of the current forest management approach (diameter limit harvests) with shelterwood harvests that promote light hardwood timber species. In this analysis, we also consider the potential of enrichment planting various precious timber (Diospyros quaesita — calamander), and non-timber forest product (NTFP) species (Caryota urens — fishtail palm; Elettaria cardamomum var. major — cardamom; Calamus zeylanicus — rattan) in conjunction with timber harvests. Two real (inflation adjusted) discount rates were used, 4 and 6%, respectively. Results show that when real discount rates are low (4%), and advance regeneration is present, NPV is highest for the one-cut shelterwood (US $9983 ha⁻¹). At a high discount rate (6%), reflecting the current short-term concession system and unstable rights to harvest, and where no advance regeneration was present, the diameter limit system (US $7173 ha⁻¹) was the optimum. On sites with advanced regeneration, the one-cut shelterwood system is clearly preferable. For all but rattan, shelterwood treatments provide higher NPVs for NTFPs than diameter limit cuttings primarily because of the higher light regimes and more growing space made available early in the rotation. The value for tea cultivation (US $26,000 ha⁻¹) far exceeds the value of managing these lands for timber alone, explaining the dramatic expansion in tea plantations on private lands. However, our results suggest that managing these lands for a combination of timber and enrichment plantings of NTFPs (US $23,000 ha⁻¹) can be comparable to tea plantations. By managing for NTFPs and timber, forest managers have new opportunities to solve the old problems of high-grading and land-use conversion.     

Capacity for Timber Management in Small and Medium Forest Enterprises: A Case Study from the Peruvian Amazon

With the implementation of a new legal framework for more responsible forest management in Peru, private small-medium forest enterprises (SMFEs) have become the most important social actors engaged in commercial forestry in the Peruvian Amazon. Despite the role of SMFEs in contributing to employment and local economic growth, there is little information with respect to their economic performance and capacities. This is a hindrance to efforts aimed at better characterizing this important sector and its influence on the development and conservation of tropical forests. For this study, 29 private SMFEs were surveyed to inventory their capital assets in order to evaluate their capacities to carry out timber management. Results indicate that SMFEs vary greatly in terms of their produced and natural capital assets, and consequently in their forest management capabilities as well. While most SMFEs lack adequate capacity for sustainable forest management, those that had more valuable timber resources and physical infrastructure attained forest certification. SMFE capacities depend greatly on external mechanisms to ensure consistent technical and financial assistance.     

Forest owner is more than her goal: a qualitative typology of Lithuanian owners

In contrast to quantitative surveys up to date, this study employs in-depth interviews and qualitative analyses aiming to provide detailed contextualized portrayals of private forest owners (PFOs) in Lithuania, where forest ownership underwent crucial changes in the last two decades. We scrutinized narrations of 18 owners, focusing on the background and goals of forest possession, actually applied management practices and informants' future plans. Content analysis of the narrations revealed three classes of goals: ideational rationale, i.e. immaterial justification for owning and managing forest, financial goals referring to monetary benefits from selling forest products and own material use for household needs. Reported practices differ widely among PFOs, ranging from largely absent management to intensive silvicultural regimes. Syntheses of each informant's goals and practices enabled discerning four types of PFOs. Forest Businessmen typically own largest estates (>100 ha) and regard forest as an investment to get long-term financial benefits; they resort to forest management for timber and often intend to enlarge their possessions. Household Foresters primarily use timber for own needs, regularly applying selective tree cutting; such forestry results in frequent but small-scale management interventions. Passive Forest Lovers aspire for recreational or environmental values, being largely uninterested in timber harvesting. Ad Hoc Owners usually are small scale, have vague goals and rarely engage in forest management. The study concludes with discussing policy implications of the identified diversity of PFOs.     

In Search of Optimum Institutions for Forest Management

There is a variety of forest management institutions ranging from state management to community and private management. This article attempts to identify the conditions under which one institution outperforms the others in the efficiency of forest management based on a review of the literature, empirical evidence on the dominant forest management institutions, and theoretical arguments. In conclusion, we argue that the community management system performs best for nontimber forests, whereas a mixed management system, in which forest protection is carried out communally and tree management is carried out individually, is likely to work best for timber forests.     

Increasing rotation periods during a time of decreasing profitability of forestry — a paradox?

The profitability of forestry in Germany decreased during recent decades because of more or less constant prices for forest products, increasing input prices and limited success in rationalisation. However, the volume of growing stock increased significantly during this period since forest enterprises have chosen longer rotation periods. This is especially true for state owned and community owned forests but also at least partly for private forests. It is normally not an alternative for the owners of forest enterprises in Germany to sell the forests completely, but on a first glance increasing investments in standing timber during a time of decreasing profitability of forestry seems to be inconsistent with economic theory. On the one hand this observation could be explained as the result of non-timber values. However, this paper is focused on another approach, which is an expanded Faustmann model in line with soil rent theory and focused on timber production. Profitable rotations in the future have the effect of shortening the optimal rotation period because an investment in standing timber causes opportunity costs by delaying the establishment of the next generation of the forest. Unprofitable future rotations have the opposite effect, if the landowner is forced to reforest. In case investments in reforestations are not profitable decision-makers have good reasons not to cut the mature stands, in spite of the fact that the internal rates of return of investments in standing timber are low in comparison with investments on the financial market. Empirical data for the period 1954–1998 mostly from guidelines for forest valuation are used together with inflation corrected interest rates to show that optimal rotation length increased over time. Nevertheless we have to recognise that the observed rotation periods are distinctly longer than the calculated optimal rotation lengths. Other factors which may also explain the investments in forestry are discussed later.     

国外私有林现状及发展趋势

国外私有林历史悠久，私有林在提供林产品、林副产品、森林游憩等方面发挥了重要的作用，时至今日，私有林仍是国外林业建设与发展中的一支重要力量，各国政府对私有林十分重视，文中系统地概述了国外私有林的现状、组织形式、经营模式，分析了当前私有林存在的主要问题，预测了私有林的发展趋势。     

Landowner Willingness to Engage in Long-Term Timber Leases in West Virginia,USA

As global competition increases for wood-based products, the need for more efficient supply chains becomes increasingly important. In the forest products sector, these supply chains involve individuals and firms ranging from private forestland owners with standing timber to factories producing final finished products. Long-term timber leases are one mechanism that can be used to develop access to timber supplies for companies unable or unwilling to purchase land outright for growing timber. To investigate private forest owner opinions and attitudes regarding long-term timber leases, we conducted a survey of landowners from Wetzel county, West Virginia. No long-term leases were reported by respondents, but 24% claimed they would enter a lease under certain conditions. The most frequently listed concern related to long-term timber leases was for the “loss of control”. Results of this survey are discussed in the light of forest management efforts that might be used to improve the social, financial, and environmental benefits for private forest owners.     

Typology of non-industrial private forest owners in Tasmania

The heterogeneous nature of non-industrial private forest (NIPF) owners and the challenge this heterogeneity presents for effective policy and program design and delivery is widely recognised. Understanding the socio-economic and motivational differences between various types of landowners will better equip policymakers and forest extension professionals to design policies and programs that efficiently promote private sector timber production and forest conservation outcomes. The purpose of this study was to develop a survey-based empirical typology of Tasmanian NIPF owners based on their stated objectives of forest ownership and to relate owner type to a range of observable property and owner characteristics as well as to timber harvesting and forest management behaviour. Using principal component analysis (PCA) followed by means cluster analysis, four distinct groups are identified: income and investment owners, non-timber output owners, agriculturalists, and multi-objective owners. Members of these groups are found to differ significantly in terms of their personal and property characteristics, as well as their timber harvesting and management behaviour. For example, members of the non-timber output owners, who are motivated solely by objectives related to the production and protection of the non-timber outputs of forests, have similar proportions of timber on their property, but are less likely to have harvested timber from their property, than all other groups.     

Determinants of private forest management decisions: A study on West Virginia NIPF landowners

The availability of timber in the United States depends largely on forest management and investment decisions of nonindustrial private forest landowners since they hold the largest share of forest land in the nation. Since NIPF landowners are so diverse, there is a need to better understand the determinants of their decisions so that policies could be in place to motivate them. A survey was carried out in 2005 to the nonindustrial private forest landowners of West Virginia to examine the factors affecting their forest management decisions. The study looked at four categories of decisions related to forest management: timber harvest, silvicultural activities (i.e., tree planting, herbicide application, fertilization, thinning, grapevine control, and timber stand improvement), property management activities (i.e., road construction, road maintenance, surveying/boundary maintenance, and access control), and wildlife habitat management and recreation improvement activities. Four models were developed to examine factors affecting each category of forest management activity. The results showed that landowner, ownership, and management characteristics of NIPF landowners are associated with their forest management decisions. Specifically, age, education, profession, income, ownership size, period of forestland acquisition, distance of the forestland to the place of residence, whether the forestland was purchased or acquired through inheritance or as a gift, primary objective of forestland ownership, and presence of a written forest management plan were found to be significant determinants for at least one of the categories of forest management activities. The models explained 25%, 27%, 31%, and 24% of the variation in timber harvesting, silvicultural activities, property management activities, and wildlife habitat management and recreation improvement activities, respectively. Understanding the underlying factors influencing forest management decisions of this diverse group of forest landowners could form the basis for developing, modifying and targeting policy instruments to motivate NIPF landowners in forest management.     

Private native forest policies in New South Wales,Queensland, Victoria and Tasmania

Private native forests in Australia perform a dual production and conservation role, providing an important source of timber, and complementing formal conservation reserves. A comparison of policies for private native forests in New South Wales, Queensland, Victoria and Tasmania illustrates the scope for timber harvesting, the provision for environmental values, and initiatives for responsible and sustainable forest management. The sustainable management of Australia’s forests requires initiatives by both government and landowners to accommodate changes in community attitudes, new management strategies, integrated catchment management principles and both commercial and non-commercial opportunities for forest use. Of all of the Australian states, New South Wales has the most restrictive laws in terms of forest management and harvesting. Queensland and Victorian legislation have a more commercial focus, while Tasmania has a balance of both environmental and commercial objectives. The duty of care for private native forests is a responsibility that falls to the landholder, and while this should be enforced by legislation, the private provision of community benefits requires both recognition and reward. The presence or absence of incentives potentially determines the effectiveness of forest codes of practice.     

Analysis and modeling of timber storage accumulation after severe storm events in Germany

In this study, we explore the determinants of forest enterprises’ timber storage accumulation after severe storm events. The explanatory power of variables reflecting economic, institutional and tree species-related factors is tested via econometric analyses. Timber storage accumulation is assessed conducting a weighted multiple linear regression analysis. In addition, the moderating effect of timber price alterations on timber storage accumulation is tested employing timber price alterations as a moderator variable in a hierarchical regression analysis. The results show a linear positive relation between forest enterprises’ damaged and stored timber quantities. It was found that coniferous timber was stored to a greater extent than non-coniferous timber which can be explained by higher storm damage as well as better suitability for multiyear storage. State forestry stored the highest shares of damaged timber, followed by municipal and private forest enterprises, which can be explained as a countervailing measure. A further central finding of our study is that the timber price drops after storm events act as a moderator variable on the relation between damaged and stored timber quantities. Hence, empirical timber price reactions help to improve estimation accuracy regarding the shares of damaged timber which are stored. Derived from our results, we find timber storage accumulation to be a common practice by forest companies to mitigate revenue losses caused by extreme storm events. As coefficients vary strongly among the analyzed variables’ categories, we consider case-specific storage accumulation estimations to be crucial for improving the accuracy of national wood and timber accounting, but also for a full view on storm-related economic damage in the forest sector. In addition, it is likely that capturing the proportions of timber storage in forests will gain relevance in the future, since forest damage from natural disturbances is expected to increase as a consequence of climate change.