Impacts of the European Economic Area Agreement on the structure and concentration of roundwood sales in Norway

In 1997 the European Free Trade Agreement (EFTA) Surveillance Authority (ESA) ruled that negotiation practices of the Norwegian forest owners’ associations violated obligations under the European Economic Area (EEA) Agreement. This article analyzes the effects the ESA ruling has had on concentration in the Norwegian roundwood market. The analysis detects no evidence of increased competition in the market. In fact, there are indications to the contrary: forest owners’ associations have increased their market share and in most regions concentration has increased significantly. However, development of a few larger independent firms that could challenge the forest owners’ associations as brokers of roundwood may prevent monopolizing of the Norwegian market. Eventually the market could even become more efficient.     

Family forest owner preferences for biomass harvesting in Massachusetts

U.S. forests, including family-owned forests, are a potential source of biomass for renewable energy. Family forest owners constitute a significant portion of the overall forestland in the U.S., yet little is known about family forest owners' preferences for supplying wood-based biomass. The goal of this study is to understand how Massachusetts family forest owners feel about harvesting residual woody biomass from their property. The study estimates the probability that Massachusetts landowners will harvest biomass as part of a timber harvest using data from a survey of 932 Massachusetts family forest owners. Logistic regression results suggest that the likelihood of harvesting for biomass is quite low, and that the supply of participation in biomass harvesting is inelastic with respect to price. These low probabilities may be due to the method used to account for preference uncertainty, as well as the unique nature of Massachusetts forests, forest markets, and landowner attitudes in comparison to other states (e.g., Minnesota). The study suggests that it would be more effective to target renewable energy policy toward different regions and/or markets rather than develop a uniform national policy.     

Family Forest Owners’ Commitment to Service Providers and the Effect of Association Membership on Loyalty

Long-term relationships with family forest owners willing to sell roundwood are important for the Nordic forest industry. Research has shown that customer loyalty is mediated by a sense of commitment to the service provider. At least two forms of commitment have been distinguished: affective commitment in the sense of liking the provider, and calculative commitment in the sense of being dependent on the provider. In Sweden, more than one-third of family forest owners are members of a forest owners’ association with the primary objective of supporting its members’ profitability. The associations buy one-third of the owners’ roundwood. This study examined the role of different forms of commitment in the process of becoming loyal timber suppliers, and the moderating role of membership. A questionnaire was sent to forest owners who notified the authorities of a final harvesting operation involving timber procurement by an organization. The results show that both forms of commitment significantly affected loyalty and the forms were correlated. Members of forest owners’ associations who sold their timber to the association expressed higher affective commitment and loyalty than other forest owners, indicating that a sense of member involvement is important for timber procurement by the associations.     

Impact of Changes in the Sociological Characteristics of Small-Scale Forest Owners on Timber Harvesting Behavior in Quebec,Canada

Owing to the economic, social and environmental impacts associated with timber harvesting by small-scale forest owners, a number of studies have characterized their profiles, motivations and activities at a given time. However, little research has focused on how timber production has been affected by changes in the prevalence of types of forest owners over time. A 2012 telephone survey of Quebec (Canada) small-scale forest owners reveals relationships between level of harvesting and socio-demographic factors, and an evolution of these factors by examining the results of surveys conducted in 1973 and 1985. Within the same population, property size, distance between owners’ forest and homes, possession of a forest management plan, gender, education level, the length of ownership are correlated with how likely respondents were to harvest timber on their forest. Furthermore, comparison with results from previous surveys of the same population show an increase in the prevalence of characteristics associated with owners who place less importance on timber harvesting in their management decisions. Overall, since the initial survey of forest owners conducted in 1973, the size of forest holdings in Quebec has decreased, respondents’ education level has improved and the proportion of forests owned by women have increased. However, these changes are occurring at a relatively slow rate, giving government authorities time to implement policies to encourage harvesting among the new generation of forest owners.     

Modeling Forest Owner Harvesting Behaviour and Future Intentions in Tasmania

Our ability to design public policies that effectively promote the efficient use of privately owned forest resources is underpinned by an understanding of the way in which forest production and investment decisions are made, and of how forest owners respond to changes in social, economic, and institutional conditions. A model of non-industrial private forest owners (NIPF) past harvesting behaviour and future harvesting intentions using a logit approach is presented. A Tobit model, which investigates harvesting intensity, is also developed. The responses to a survey of 386 NIPF owners in Tasmania are used to construct the data set consisting of socio-economic characteristics of NIPF owners, their forest ownership objectives, and property characteristics. The current study is innovative in that the role of NIPF owner objectives and attitudes is assessed in three econometric models exploring past harvesting behaviour, harvesting intensity, and future harvesting intentions. A series of observations can be made from comparing the results of the three models. For example, higher pulp prices are unlikely to affect NIPF owners harvesting intentions but are likely to increase harvesting intensity. The financial characteristics of the NIPF owner contribute most to predicting future harvesting intentions, with financial security being a disincentive to future harvesting. Landowner objectives and attitudes are important in explaining past harvesting activities and future intentions but do not significantly affect harvesting intensity. Furthermore, there are significant differences between different types of landowners in terms of the incentives that are likely to make them change their mind about participating in native forest harvesting.     

Economic,environmental and social impact of alternative forest management in Baden-Württemberg (Germany) and Västerbotten (Sweden)

The forest sector is important for the German Federal State of Baden-Württemberg (BW) and the Västerbotten (VB) County in Sweden. Their forestry wood chains (FWCs) are of similar magnitude and supply forest industries. This study provides a regional comparison of the performance of FWCs from roundwood harvesting, including hauling, to mill gate concerning the factors that impact sustainability and assess different sustainability indicators for alternative supply chains, in particular fully mechanized chains in comparison to motor-manual operations. The harvest volumes are similar but operational conditions differ. Analysis of sustainability indicators demonstrated that the total costs for roundwood to industry are similar. Higher harvesting costs in BW are compensated for by lower transport costs to the mills. Employment per unit is higher in BW because of the high share of labour in felling. Due to smaller machinery and shorter transport distances in BW, energy use and greenhouse gas emissions per unit are lower than in VB. Areas for improvement are the technologies for logging in BW and the logistics of timber transport in VB.     

Effects of forest taxation and amenity preferences on nonindustrial private forest owners

The effects of profit and land value tax on harvesting decisions of nonindustrial private forest owners are investigated. We use a model of a utility-maximizing forest owner with amenity preferences for timber, which extends the basic two-period harvesting model to include both thinning and clear-cutting harvests. It is demonstrated that with no amenity preference, the profit and land value taxes are neutral to clear-cutting and thinning decisions. Under small to medium amenity preferences, the profit tax decreases the optimal clear-cutting volumes. However, the effect on thinning may be positive or negative, depending on the amenity preference level. The total effect of the profit tax on the short-run timber supply is negative. The effects of the land value tax contrast with those of the profit tax. Also, a tax regime with a lowered profit tax rate combined with a land value tax is analysed. It is shown to be able to bring Pareto-improvement to a regime that uses a higher profit tax but no land value tax.     

Erratum to: Effects of forest taxation and amenity preferences on nonindustrial private forest owners

The effects of profit and land value tax on harvesting decisions of nonindustrial private forest owners are investigated. We use a model of a utility-maximizing forest owner with amenity preferences for timber, which extends the basic two-period harvesting model to include both thinning and clear-cutting harvests. It is demonstrated that with no amenity preference, the profit and land value taxes are neutral to clear-cutting and thinning decisions. Under small to medium amenity preferences, the profit tax decreases the optimal clear-cutting volumes. However, the effect on thinning may be positive or negative, depending on the amenity preference level. The total effect of the profit tax on the short-run timber supply is negative. The effects of the land value tax contrast with those of the profit tax. Also, a tax regime with a lowered profit tax rate combined with a land value tax is analysed. It is shown to be able to bring Pareto-improvement to a regime that uses a higher profit tax but no land value tax.     

Cost structure of and competition for forest-based biomass

Abstract

Biomass has become a popular alternative to satisfy expanding energy demand and as a substitute for fossil fuels and phased-out nuclear energy in Europe. The European Union White Paper stipulates that the utilization of biomass shall increase to 1566 TWh by 2010. However it is often overlooked that the forest resources are already, to a large extent, used by the forest industries. When promoting biomass for energy generation the consequences for the forest industries also need to be considered. Sweden is an excellent case study, as there are vast quantities of forest resources, nuclear power is starting to be phased out, there are restrictions on expanding hydropower and the political desire exists to “set an example” with respect to carbon dioxide emissions. This paper attempts to estimate and analyse the supply of two types of forest resource, namely, roundwood and harvesting residues derived from final harvesting and commercial thinnings. Two separate supply curves are estimated: one for roundwood and one for harvesting residues. The cost structure is based on an economic-engineering approach where the separate cost components are constructed from the lowest cost element into aggregates for labour, capital, materials and overhead costs for each forest resource. The results indicate an unutilized economic supply of 12 TWh of harvesting residues in Sweden. However, after these 12 TWh have been recovered it becomes more profitable to use roundwood for energy purposes than to continue extracting further amounts of harvesting residues.     

Supply consequences of subsidizing thinning activities in Sweden

This paper is an attempt to measure the supply consequences of the thinning subsidy which was in operation during the cutting season 1979/80. The econometric analyses are based on a questionnaire to a sample of 2500 private non‐industrial forest owners, which was produced by the official Swedish investigation SOU 1981:81. The analyses show that it is questionable whether the subsidy did affect the total cut. The estimates of the supply increase range from an average of zero to 122 m³/owner. As a by‐product we obtain estimates of the price elasticity of the private non‐industrial forest owners supply curve. These estimates range from 0.63 to 1.69.     

Financial considerations of policy options to enhance biomass utilization for reducing wildfire hazards

The Harvest Cost–Revenue Estimator, a financial model, was used to examine the cost sensitivity of forest biomass harvesting scenarios to targeted policies designed to stimulate wildfire hazardous fuel reduction projects. The policies selected represent actual policies enacted by federal and state governments to provide incentive to biomass utilization and are aimed at addressing particular challenges in the production lifecycle of trees to final product. Policies were modeled to compare financial impacts on a per-acre project basis for three scenarios of harvest intensity in southwestern ponderosa pine stands classified as being at high risk of wildfire. This allowed for identification of key cost nodes and how particular policies might better allocate limited resources. Effects of limiting the size of trees harvested and access to biomass markets were also modeled. This analysis showed that the co-location of processing facilities that results in shorter distances traveled is the single most important strategy for reducing costs for all three scenarios modeled. Per acre subsidies and certified product premiums were the next highest ranked in providing economic incentive, followed by production tax credits and cost-share programs. Fuel surcharge waivers and transport tax credits provided the least gains.     

Costs for thinning and final felling operations in Sweden, 2000–2017

ABSTRACT

Wood supply is one of the most significant cost items for most forest industries, and costs of forest operations and sale prices of wood is vital information for forest owners. Cost trends between 2000 and 2017 in Swedish forestry is analysed, separately for final felling and thinning, and subdivided into ordinary and salvage operations. Data on costs for operations totalling 821 million m³ harvested roundwood were analysed, both as actual costs and after adjustment for the consumer price index. Adjusted costs for ordinary harvesting operations declined between 2000 and 2007, increased during 2008 and 2009 and have since been relatively constant. Costs of salvage logging operations performed as thinning were 21% higher than ordinary thinning, and when performed as final felling costs were 64% higher than in ordinary final felling. The relative logging cost trends in Sweden and Finland were similar during the period, and there are similarities with the US. However, while logging costs in Sweden and Finland increased in 2008 and 2009, they declined in the US and did not reach the same relative level as in Sweden until 2013. Results can be used for benchmarking logging costs between regions or larger buyers of logging services.     

中美私有林补贴制度比较研究

首先对私有林及私有林补贴的概念进行了界定; 进而从造林成本补贴、生态效益补偿、税收优惠政策及信贷优惠政策4个方面对中美有关私有林补贴的政策进行比较分析; 最后, 对我国私有林补贴的发展提出若干建议。     

Potential impacts of carbon taxes on carbon flux in western Oregon private forests

This study considers a carbon tax system as a policy tool for encouraging carbon sequestration through modification of management in existing forests and examines its welfare impacts and costs of the carbon sequestered. The simulated carbon tax leads to reduced harvest and increased carbon stock in the standing trees and understory biomass. Changes in the level of silvicultural investments vary by owner, depending on the nature of their initial inventory. In general investment under the tax is concentrated in regimes that establish faster growing plantations. Average rotation age increases, varying in extent across ownerships and site qualities. The carbon tax reduces both consumer and producer surpluses in regional timber markets. Producers are compensated by the carbon subsidies, except at low carbon tax levels. Not all rates of carbon tax will attract interest from private owners if participation is voluntary. Estimates of the marginal cost of sequestering carbon in western Oregon private forests are shown to be within the range of costs for projects considering afforestation alone in some eastern regions of the United States.     

Comparison of Agriculture and Forestry Fiscal Subsidy Policies in China

Great importance has been attached to the “Agriculture-Rural-Farmer” issue by the Communist Party of China (CPC) Central Committee and the State Council of China. In recent years, a series of agricultural supporting subsidy policies, such as direct subsidies to grain, seed, material, and machinery purchases have been enforced, and these policies have greatly promoted the agricultural production and the incremental income of farmers. However, from the perspective of increasing the farmers’ income, although the subsidy coverage is expanding from fields to hilly areas where the farmers have made major contributions to the supply of wood and ecological security, the farmers have a low income without enough aid from the forestry fiscal subsidy policy. Foresters cannot enjoy the same policy support as farmers, because the level of forestry fiscal subsidies is obviously lower than the level of agricultural subsidies. Therefore, based on investigation, this article suggests giving more support to forest workers in terms of the promotion and optimization of forestation, forest tending, seeds and insurance subsidies, and further expanding the forestry subsidies’ category and scope and improving its standards.     

Perceived risk sources and strategies to cope with risk among forest owners with and without off-property work in eastern Norway

Abstract

This paper presents empirical insight into part-time and full-time property owners’ perceptions of risk and risk management strategies. In addition, the relationships between forest owners with varying degree of off-property work and property and forest owner characteristics, risk perceptions, risk management strategies and harvesting behaviour are examined. The data originate from a questionnaire responded to by forest owners in eastern Norway which were merged with 9 years of logging data. Timber price variability and institutional risks were perceived as primary sources of risk. Use of advisers from the forest owners’ association, buying personal insurance and off-property work were perceived as the most important ways to handle risk. The results show that off-property work affects to a lesser degree what forest owners perceived as important risk sources, but that risk perceptions affect to a stronger degree the ways in which risk was dealt with. The chosen risk management strategies influenced the forest owner's harvesting behaviour to some extent, but more research on the issue is needed to clarify the relationship. There was a positive relationship between owners with off-property activities and their performance as timber suppliers. Several measures, such as improved rural education, revision of some of the arrangements that regulate property mergers and support measures for increased on-property diversification may increase annual timber harvesting and reduce variability in harvesting level.     

Technical efficiency in timber production and effects of other income sources

In Norway, as in many other European countries, income from forestry has become marginal to owners’ household economies and most employment of forest-owner households is now undertaken off the property. Also, many forest owners have focused increasingly on other revenue-earning activities on their properties, such as providing recreational services. It is a challenge in all kinds of production to find the optimal way of converting inputs into outputs, i.e., to be technically efficient. Extent of financial dependency on income from forestry differs between part-time and full-time forest owners. Since the two groups have different livelihood strategies, it is plausible that full-time forest owners have more professional forest management practices. Data for a cross-section of 3,249 active (i.e., harvesting) forest owners were extracted from the 2004 Sample Survey of Agriculture and Forestry representing the year 2003. A stochastic production frontier analysis was applied to evaluate forest management efficiency impacts of important factors including property and owner characteristics, outfield-related and agricultural activities, off-property income and geographical location in central or remote areas. It was found that many forest owners are technically inefficient, and there exist opportunities for improved performance. Off-property income was found to have an estimated negative impact on technical efficiency, the inefficiency arising (weakly) with increasing share of household incomes from outfield activities, and properties in urban centred areas are less efficient than those in remote areas. One policy implication of the study is that a potentially substantial efficiency increase might be achieved from allowing small inefficient woodlots to merge into larger units of forestry production. Also, providing support for forest management plans may improve efficiency.     

A Survey of Forestry Extension Clientele in South Carolina,USA

The U.S. South contains nearly one-third of the nation’s forests and 40% of its productive timberland. This makes the southern U.S. an important part of the wood supply chain. In South Carolina, family forests cover 55% of the 13 million acres of forestland, and contribute significantly to the annual timber harvest volume. However, not all family forest owners are engaged in forest management activities. To better understand the needs and behaviors of family forest owners that are actively engaged in forest management an online survey was developed and sent to family forest owners that actively seek the help of extension agents. Results of a latent-class analysis of survey responses showed that there are three distinct groups of family forest owners that engage with extension agents: hands-on timber managers, hands-off timber managers, and multiple-use land managers. These groups differ in their utilization of help from a consulting forester and their ways of selecting timber harvesting contractors for forest management activities. Eighty-eight percent of respondents reported that their major goal of a thinning was to maximize future revenues. When asked about the expected outcome of a cleat-cut, 69% expected all trees to be removed, whereas the rest expected outcomes similar to selection, seed-tree, or commercial clear-cuts. Overall, this survey provides initial information to better focus outreach and extension efforts, but also highlights how family forest owners engage in their timber harvest.     

Access cost functions for approximating roundwood supply in northern Sweden

In this article, an engineering approach is used to derive the access cost function for roundwood in northern Sweden. This approach can make use of detailed biological, technological and economic information and can give insights that cannot be gained with statistical methods. The engineering approach gives a reliable estimate of the whole cost function, so it avoids the difficulties of the statistical approaches in discriminating between different functional forms. The computations are based on data from the Swedish Forest Survey. Cost distributions are derived both at the roadside and at the mill and also with and without subsidies to forestry. Some applications to forest policy problems are mentioned. The elasticity of the cost curve near the current price level is the same as previously reported price elasticities.     

Variations in the Social Networks of Forest Owners: The Effect of Management Activity,Resource Professionals,and Ownership Size

Social networks play an important role in the communication of information among forest owners and how owners process that information in making land management decisions. This article examines variations in the social network characteristics of family forest owners using survey data and interviews with 42 owners in south-central Indiana. We examine how network structure and content vary by harvesting activity, information sources, ownership attributes, sociodemographic characteristics, and location. Quantitative measures of network size and diversity, along with a qualitative understanding of network content and function are discussed and compared for active and passive forest managers. We find that active managers (people who had a recent timber harvest) had at least twice as many social ties related to forest management compared to passive managers, particularly after accounting for parcel ownership size, forest area, and total landholding size. Learning and service were the main functions of these networks, with learning being the most frequently cited reason for talking to others regardless of the management profile of forest owners. The study contributes to a growing interest in mixed-methods approaches to network studies and research on social networks in private forestry.