Issues and Answers

Below Cost Timber Sales on National Forests

The economic realities of managing our national forests are more complex than they appear. On one hand, figures show that some national forest timber sales don t make a profit. Opponents of such sales argue --incorrectly-- that they amount to a subsidy for timber purchasers and should be stopped. On the other hand, a cost-benefit analysis reveals an entirely different story.

While an overwhelming majority of timber harvested in national forests comes from profit-making programs, the circumstances surrounding other non-timber activities have a substantial impact on the profitability of many forests as a whole.

Appeals of sales

Thousands of administrative appeals against timber sales nationwide have been filed by special-interest groups over the past few years, costing the U.S. Forest Service (Forest Service) and taxpayers tens of millions of dollars. The effect is a delay of harvests and an increase in costs, creating “below-cost” forests where they did not exist before. The Chief of the Forest Service estimated that in 1990 alone, these appeals cost taxpayers $150 million.

Enhance non-timber resources

Congress and the American public have decreed that national forests be managed for multiple values, including enhancement of wildlife, soil and water, as well as recreation and various aesthetic concerns. The cost of these enhancements can reduce the profitability of timber sales to below-cost status.

Forest health and salvage

Prolonged drought, disease, and suppression of fire have allowed dead and dying forests to build to epidemic levels in the western United States, especially in places like the Sierra Nevada. The results have included the increase of dangerous and catastrophic fires. In order to assure the future health and safety of the forest environment, many of the dead trees and other materials must be salvaged promptly. Often these salvage operations are more costly to operate and bring less of a return to the taxpayer and the timber industry.

Long-term investments in forest production

Scientific forest management means regular planting, protecting and thinning of forests. These costly programs may provide little or no timber in the short term, but they will enhance the growth of a healthy, productive forest for later use.

Non-commercial sales

On many national forests, the Forest Service conducts no commercial timber sale program, but sells fire wood as a public service. Examples of these forests include the Los Padres, Cleveland and Angeles National Forests in California. Firewood sales do not provide enough revenue to cover sale preparation costs.

Sale program critics are judging profitability on a short-term cash basis only. Yet the national forest timber sale program provides much more than cash receipts. Environmental and social factors benefit as well.

New Forest Service strategies directed at ecosystem management require more costly and time- consuming forestry techniques. With far less usageof clear cutting, for example, costs are already increasing dramatically. Currently, dozens of separate laws must be considered when preparing a sale, and the list of regulations continue to become more lengthy and complex.

The human significance of the timber sale program are perhaps the most misunderstood and under- estimated. Besides the intrinsic values prudent forest management provides by enhancing the forest environment for people to enjoy, the economic and cultural benefits are great. Communities located within national forest areas receive 25% of the revenues generated by the timber sales as a way to off-set the loss of private property tax dollars. These revenues --nearly $50 million in California in 1993-- are designated for local schools and roads. Jobs from national forest timber sales number in the tens of thousands. Billions of dollars in payroll and taxes paid by employees and businesses circulate into the economy. The end result is the product --renewable, recyclable wood and paper-- used by every American each and every day.

In conclusion, the price of a timber sale is based on fair market value and in no way is a form of subsidy to the purchaser. The real issue is cost and efficiency, and whether or not a “high cost” timber program or individual sale has merit.

There are compelling environmental and economic reasons to ensure that federal timber sales that may not achieve short-term profits survive. Eliminating these sales in the mistaken belief that this would reduce federal spending or improve the environment would not serve the best public interest, particularly now that the Forest Service is undertaking new, more costly ecosystem management objectives.

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