The implications of various silvicultural funding arrangements for privately managed public forest land in Canada

Abstract

When devising policies for financing private silvicultural operations on public forest land, government agencies should consider carefully the benefits and costs of alternative arrangements and how they arc likely to affect tenure holders' behavior. Three general methods of achieving silvicultural objectives arc discussed — the creation of incentives for private voluntary expenditures, reimbursement by governments of expenditures on approved or required silvicultural operations, and required silvicultural operations at the tenure holder's expense. Private firms will only invest voluntarily in silviculture on public lands if they have adequate security of tenure and hold sufficient equity in the timber values resulting from their activities. If firms' silvicultural costs arc reimbursed, their behavior will depend on the extent of reimbursement and whether they have a financial interest in the outcomes of their reimbursed activities. Generally, reimbursement of expenditures must be supported by minimum performance standards and costly monitoring and enforcement procedures. If silvicultural operations are required at the tenure holder's expense, firms will only undertake silviculture to avoid penalties and have a strong incentive to achieve required standards at minimum cost. More stringent monitoring and enforcement procedures may be necessary than if costs arc reimbursed. The impact of policy alternatives is illustrated by means of a survey of silvicultural expenditures on two forest tenure types in British Columbia.