DRAFT: Communities and Private Forests 7/11/2003
DRAFT/DRAFT/DRAFT
Communities and Private Forests
Issue Paper for the Communities Committee of the Seventh American Forests Congress
Private forestland provides many important public benefits to neighboring communities. These benefits range from social values like recreational access in areas where land is traditionally available to all for hiking and hunting, to ecosystem services like water retention and filtration that are particularly critical during times of drought. In addition to these non-market values, many communities host a value-added wood products industry built on a sustained local supply of quality timber.
For a host of reasons, these community benefits from private forestlands are in jeopardy throughout the U.S. We must ensure the future of these imperiled public values by enhancing the benefits of and reducing the obstacles to far-sighted private forest management. We must further encourage public agencies like the USDA Forest Service and state forestry organizations to promote stewardship of important landscape-level social, economic, and environmental values provided by privately-owned forests. Watershed health, open space, and wildlife habitat are examples of public benefits that can be protected only by coordination among many individual landowners. Private owners who provide these benefits receive little or no financial return for their efforts. Because important public values are at stake, and because effective public lands management depends upon healthy private lands, public agencies must provide leadership and financial support to encourage voluntary, cooperative efforts among private landowners.
This document: 1) outlines some of the public benefits provided by private lands that may be in jeopardy, and 2) suggests alternative approaches to protecting public values while respecting private landowner rights.
Overview of the problem:
The public benefits historically provided by privately-owned forests grow ever more valuable over time, while changes in ownership patterns and land conversion place these values in ever greater peril. Because of regional differences in population density and ownership, concerns about privately owned forests are particularly critical in the eastern U.S. Nationally, about 54% of forestland was in non-industrial private forest (NIPF) ownership in 1997, while the NIPF percentage is much higher over most of the eastern U.S. For example, in the latest Forest Inventory and Analysis inventory conducted by the USDA Forest Service, NIPF forestland percentages were: Indiana, West Virginia and Maryland 83%, Alabama 78%, Vermont 75%, Pennsylvania 74%, South Carolina 72% (Forest Inventory and Analysis, East-wide Database).
Just as regions differ in the degree of risk, so do forest types. Over 94% of the remaining redwood forests, for instance, are in private ownership (Best and Wayburn, 2001). We focus here on some of the major concerns about the future of private forests: future timber supply, changes in large ownerships, conversion, and fragmentation.
Future Timber Supply: In some regions, current harvest levels on private lands are higher than the forest can sustain in the long run. A recent Timber Supply Outlook Study for Maine concluded that under current management, the state’s forests are capable of sustaining only 86% of current harvest levels. “Over the past decade, annual timber harvest in Maine has increased from about 325,000 acres in 1989 to about 532,000 acres in 1999”. If current trends continue, forest inventory will decline over the next hundred years (Maine Forest Service, 1998).
Source: Maine Forest Service, Timber Product Output Study, 1998
One general measure of timber sustainability is the ratio of growth to removals. Nationwide, the ratio of growth to removals was 1.42 in 1996. The growth:removals ratio for all species declined, however, from 1976 to 1991. The increase from 1991 to 1996 reflects primarily lower timber harvest on National Forests.
Source: USDA Forest Service, 2000 RPA
Particular landowners, species and regions deserve special attention. Private forestland is traditionally categorized by forest industry land and non-industrial private forest land. Though growth still exceeds harvest on NIPF lands, the ratio has been declining since the mid-1970s. And the forest industry tends to cut more heavily than other ownership groups. “Removals continue to exceed growth on the forest industry ownership” (USDA Forest Service, 2000 RPA, 2001).
Specific regions are generally consistent with the national pattern. Maine’s large industrial landowners are cutting more heavily than small landowners. The growth to harvest ratio for larger ownerships (over 100,000 acres) in that state is projected at .82, while the ratio for all other landowners is predicted to average .91 (Maine Forest Service, 1998). In the north central region (Minnesota, Wisconsin, Michigan, Iowa, Illinois, Indiana and Missouri) though overall growth of growing stock was twice removals over the latest inventory period, growth and removals were nearly equal on forest industry lands (Shifley, 2002).
In 1996, softwood removals in the South exceeded growth (USDA Forest Service, 2000 RPA, 2001). Though projections show a recovery of softwood growth and inventory in the South, increasing future growth depends upon conversion of natural forest and agricultural lands to plantations. “The area of pine plantations in the South is forecast to increase by more than 60 percent between 1995 and 2040 to 54 million acres. These pine plantations are forecast to be managed for short rotation timber production” (Wear and Greis, 2001). When natural forests are converted to intensive single-species plantations, wildlife, recreational, and other values of interest to the public may well suffer. On the other hand, plantations on former agricultural lands may improve recreation and watershed values, and higher returns from this type of forest management might forestall subdivision and conversion to nonforest use.
Softwood Growing Stock Growth and Removals
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DRAFT: Communities and Private Forests 7/11/2003
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Source: USDA Forest Service, Forest Facts and Historical Trends, 2001.
For southern hardwoods, increasing future harvest is less likely to be offset by increased growth. “Mississippi and South Carolina show hardwood inventories declining for nearly the entire forecast period [to 2040], indicating that removals exceed net growth from the late 1990s forward. Georgia, Texas, and North Carolina have hardwood inventories peaking between 2007 and 2018, and then begin to decline. The remaining States are forecast to accumulate volume until sometime between 2021 and 2031, at which point removals begin to exceed net growth and hardwood inventories begin to decline” (Wear and Greis, 2001).
Source: USDA Forest Service, Southern Forest Resource Assessment, 2001.
As shifting priorities reduce timber flow from public lands, wood products companies turn to private lands (and, in some regions, imports) for their raw materials. In northwestern Pennsylvania, for example, harvest on the Allegheny National Forest dropped from 28 million board feet 1997 to about 9 million board feet in 1999. During this time, mills in northwestern Pennsylvania increased purchases from local non-industrial private forests by 14.6 million board feet and from industrial forests by nearly 10 million board feet (Strauss, et al, 2001). Because forest owners receive little or no financial reward for providing public benefits, increased harvest pressure intensifies threats to those nonmarket values that are not compatible with intensive timber cutting.
Source: USDA Forest Service, Forest Facts and Historical Trends, 2001.
Shifting Large Ownerships and Insecurity: Many large wood products firms are divesting their timberland, to improve cash flow and flexibility in the marketplace. During the 1990s an estimated 28% of industrial forestland (an area four times the size of Massachusetts) changed hands, and in Maine 18% of the entire area of the state changed hands in two years (Best and Wayburn, 2001). Fifteen million acres of land owned by traditional forest products companies has changed hands in the last four years, and “another 12 million to 15 million acres will transfer out of industry ownership in the next decade, according to the Pinchot Institute for Conservation, a Washington think-tank. That's a substantial chunk of the 68 million acres of timberland currently owned by forest products companies, according to the U.S. Forest Service” (Weber, 2002).
In Maine, “an unprecedented amount of forestland changed ownership during the last ten years. Industrial land-owners have been the primary sellers of large parcels of forest land, while institutional investors have emerged as the principal buyers of forest land. Ownership of forestland by industrial owners fell from 46% in 1993 to 30% in 1999.
Dividing private forest ownership into forest industry ownership and all other private ownerships, however, is missing an important trend. Institutional timberland investors outside the forest products industry now own 15% (2.5 million acres) of commercial forest land in Maine (Maine Forest Service, 2001). New kinds of timberland ownership (typically Timber Investment Management Organizations –TIMOs – and Real Estate Investment Trusts – REITs) leave communities wondering about their future.
Source: Maine Forest Service, 2001
A similar pattern is also unfolding in the South (the thirteen southeastern states included in USDA Forest Service Southern Region). “Ownership distribution is dynamic. For example, the area of timberland owned by the forest industry declined by about 1 million acres between the 1980s and 1990s. However, this decline was more than offset by a 4.1 million acre increase in ownership by other corporations”. Currently, forest industry owns about 22% of timberland in the Southern region, other corporations 12%, and farmers and other individuals 66% (Wear and Greis, 2001).
Forest Conversion and Degradation: When it comes time to cash out their investments, typically within seven to fifteen years, TIMOs and REITs may sell lakefront and other valuable parcels for development. Several wood products companies have also added real estate development divisions to maximize returns from land sales. “Wachovia's James Webb said such sales are considered. "When it comes time to sell, we're going to sell at the highest value. Near cities, yes, there's higher-value use that we'll try to capture," he said (Weber, 2000). The Pacific Forest Trust estimates that in recent land exchanges, 5 to 15 percent of the land was sold for real estate development rather than continued timber production or conservation reserves (Best and Wayburn, 2001).
A recent Plum Creek sub-divison of 89 lakefront lots surrounding First Roach Pond provides a dramatic example of how rapidly the landscape can be transformed. "I've never seen anything like this," said Luke Muzzy of Century 21 Real Estate in Greenville, which has the exclusive contract to sell the subdivision. "No one, not even Plum Creek envisioned this success," he said. The 21 south shore lots listed at $65,000 to $70,000 and six of the seven north shore lots listed at $125,000 sold without advertising. Two of the new owners have already filed applications with LURC [Land Use Regulation Commission for unorganized towns in Maine] for building permits."
For the nation as a whole, over 11 million acres of forestland were lost to real estate development between 1982 and 1997. The net gain in forest acreage was due only to reversion of agricultural land to forest. And the pace is accelerating. In the last five years of this period, annual acres developed were 70% greater than during the first decade (Natural Resources Inventory, 2000).
In the Chesapeake Bay watershed, it is predicted that by 2020 an area of forest 2/3 the size of the state of Delaware will be developed (Forest Fragmentation in the Chesapeake Bay Watershed, 1998). For the Southern region, models predict that 12 million of the region’s 214 million forest acres will be lost to development between 1992 and 2020, with another 19 million lost between 2020 and 2040 (Wear and Greis, 2001). Nevada, Massachusetts, and New Jersey each lost more than 10% of its total forested acres to development from 1982 to 1997 (Best and Wayburn, 2001). In California, the Forest Service expects 20 percent of NIPF land to be lost to development in the next fifty years (Best and Wayburn, 2001). In each of these regions, urban revitalization might help preserve forests by reducing the movement of urban residents to the exurban fringe.
Short of actual forest conversion, liquidation cutting is sometimes associated with changes in land ownership. This type of cutting removes all merchantable material, with no silvicultural objective and no concern for future stocking. This type of cutting has been of concern to the state of Maine. According to a recent report, “3% to 12% of all timber harvests can be characterized as liquidation harvests, the equivalent of 16,000 to 64,000 acres each year. (In comparison, approximately 5,400 acres of forest land were converted to non forest uses in 1999.) Liquidation harvesting is occurring on small and medium sized ownerships, where forestland sold to non-industrial landowners during the breakup of larger industrial ownerships has been liquidated by contractors” (Maine Forest Service, 2001).
Fragmentation and Turnover: Even when subdivided parcels remain forested, low economic returns and increasing real estate taxes in many cases offer little incentive to invest in the long-term improvements that are critical to good forest management. Owners of small acreages rarely view their woodlands as a long-term business investment. Timber may serve as an emergency fund, neglected until a need for ready cash triggers an unplanned sale. Inheritors of land, especially if there is split ownership, may not have the same commitment to woodland stewardship as the previous generation. Inheritors may liquidate timber or subdivide land in order to pay estate taxes. In many regions, woodlot owners as a group are aging; land sales to finance retirement or estate dispersal may well increase the rate of forest conversion. At the same time, high prices for select species and grades leave uneducated landowners prey to unethical cutting practices, from gross underpayment to timber trespass to high grading.
Both rapid turnover and small parcel size present obstacles to forest stewardship. As number of owners increases, and as those owners hold their parcels for shorter periods, it becomes ever more difficult to manage for ecosystem-wide values like critical wildlife habitat and to educate every new landowner about forest stewardship. As of 1994, more than 40% of private forestland owners had acquired their property since 1978 (Best and Wayburn, 2001). Nation-wide there are about 2,500 new forest landowners a week. Turnover will likely accelerate as existing landowners age and the next generation is less committed to forest stewardship or finds itself overburdened with estate taxes. As of 1994, 27% of NIPF owners were at least 65 years old, and another 22% were over 55.
Average NIPF parcel size nationwide in 1994 was 20 acres, and is predicted to fall to 16.7 acres by 2010 (Best and Wayburn, 2001). A parcel size of 100 acres might be considered minimal for practical timber management. Between 1978 and 1994, nearly 2 million acres of forestland per year were broken up into parcels of less than 100 acres (Best and Wayburn, 2001). Percentage of parcels less than 100 acres increased from 1978 to 1994, with the largest increase in the 10-49 acre size, large enough for a rural house lot but too small for practical timber management (USDA Forest Service, 2000 RPA, 2001). By 2010, 95% of forest ownerships and 38% of private forestlands will likely consist of parcels smaller than 100 acres (Forest Fragmentation in the Chesapeake Bay Watershed, 1998).