From the Aspen Institute's report on Community-based Forestry
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Forest communities have always managed forest resources for their own benefit. Early communities focused on maintaining adequate sources of food and healthy populations of the specific animals, herbs, and plants required to produce utensils, clothing, tools, and weapons necessary for survival. The need for forest products as building materials was local and minimal. Civilization however often demands more of its forests--primarily lumber products.
In our culture, the mechanism that communicates society's desire for wood products to those who have the timber is market prices. When society wants more lumber than is being produced, prices rise. Higher prices motivate investments in the production technology to harvest, process, and deliver higher volumes of forest products to where they need to go.
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Because the production of lumber products often requires investment capital for which investors want a return, the efficiency of forest management is often measured in discounted cash flows which can be used to calculate an expected return on the initial investment--not in inventory growth or biological diversity. As a result, forest management practices tend to focus on efficient economics rather than maximizing the productivity of biological growth rates. Ironically, this focus on the present value of future cash flows encourages forest managers to harvest timber prior to the period during which a mature stand produces its highest quality wood and its most volume of timber per acre on an annual basis.
Yet in recent years it has become clear that lumber isn't the only thing society is willing to pay for in rural forested landscapes. Over the past five to ten years, rapidly rising residential values challenged the production of dimensional softwood lumber products as the "highest and best use" of even the most productive timberland. As statewide populations increase and as urban populations increasingly alienated from nature seek residential properties in formerly remote forestlands, the price of productive forestland has risen substantially.
The recent and ongoing national and statewide crash in residential real estate values has slowed the turnover of residential properties on the North Coast. Yet the same market correction is forcing commodity softwood lumber prices to historic lows. The timber industry is well known for being a cyclical industry, but this cycle has been, and will continue to be, especially severe. At this point most analysts agree that the precipitous declines in housing prices and the associated credit crisis in financial markets is leading the country into a relatively severe recession. The disagreements at this point focus on just how long the recession will be. This much is clear: as we emerge from this period of overbuilding we will not be returning to the no-money-down, no-documentation, easy-money lending practices that characterized the recent real estate bubble. The housing market will eventually stabilize, and qualified buyers will once again buy homes, but we will not return to the kind of strong market demand witnessed from 2003 to 2007 for a number of years--if ever.
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These are forces with the potential to fragment the forested land base and reallocate North Coast forests to purposes other than timber production. In this economic climate, investors and landowners will face some tough decisions. Some investors may decide to focus on redwood properties and to sell Douglas-fir stands to patient developers. Some may be forced to sell property to compensate for losses on other investments. For some, payments on their existing debt may be too much to carry for two, three, or five years with limited income; others may face unexpected medical bills or estate taxes on family properties during an intergenerational transfer.
While understandable divestment decisions taken by individual ownerships can affect the quality of life and the viability of various land use options for their neighbors, a few sales of residential properties by landowners may not significantly impact the actively managed forested land base that supports local sawmills or environmental quality on a county-wide or regional basis. However, this down cycle in the industry and the economy as a whole promises to be particularly harsh. If a significant number of distressed landowners choose to sell property for development--whether based on financial need or on deliberate investment choices--the aggregate of these many individual decisions will impact the environmental integrity of resource lands, the scale and long term viability of North Coast mills, and ultimately, the character of the North Coast economy.
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But, there are additional benefits to investing in community based forest acquisitions.
No one expects the recession to last forever. For those who can wait three, five, or more years, standing timber won't spoil or degrade--it will just keep growing in volume, quality, and ultimately, when markets return, in value.
By focusing on managing timber stands to maximize biological productivity, carbon sequestration, and conservation values for the long term Community Forestry would actually increase the total volume of dimensional forest products provided to statewide and national markets by California forests, increase the number of jobs and amount of tax revenues generated in California by meeting our own demand for softwood lumber products and minimizing our dependence on imported wood products. As initial acquisition costs are paid down, Community Forestry offers not only the promise of an ongoing stream of raw materials for the forest products industry but also an appropriate source of funding for civic and environmental programs for future generations.
But the ability of community-based institutions to offer market prices to willing sellers, to manage for long-term biological productivity, and to maximize conservation values in working forests won't just happen by itself. Building the capacity and assembling the resources will require specific support, both from within the local community and from communities of interest that extend to the San Francisco Bay Area, Sacramento and beyond to effectively develop the potential of community forestry models.
One way or another, the next few years will be a critical transition for North Coast working forests. Community Forestry and the sustainability of working forests on the North Coast need your support and more importantly--your participation.
For more information:
PO Box 1580, Redway, CA 95560
707/923-7004
jrogers@newforestry.org
www.newforestry.org
John Rogers is a 35 year resident of Southern Humboldt whose involvement with forestry issues emerged through his role as a woodworker and sustainability advocate. A member of the founding Institute for Sustainable Forestry board in 1991 John's writing focuses on the economic nuts and bolts of walking the talk of long-term sustainable forest management. "Community-based Forestry" will be a regular feature in Forest & River News.