Timber Income Research Articles

Trade-offs between greenhouse gas mitigation and economic objectives with drained peatlands in Finnish landscapes

In Finland, the widespread drainage of boreal peatlands has led to increased forest productivity. The cost is a dramatic increase in soil greenhouse gas emissions. Empirical research of drained peatlands has found a correlation between greenhouse gas emissions and the ground water table. This suggests an opportunity to mitigate greenhouse gas emissions through forest management. We explore this opportunity at the landscape level through a simulation and optimization framework. We explore how forest management actions can impact the ground water table and the related greenhouse gas emissions. There are various economic and societal constraints for a set of forested peatland landscapes in Finland. First, we link forest simulations with hydrological and statistical models to predict CO2, CH4, and N2O emissions from the drained peatlands. We then present the range of landscape level solutions that prioritize between minimizing the net ecosystem greenhouse gas emissions, the economic timber value, and the even flow of timber income over time. Our results highlight the impact that integrating peatland soil greenhouse gas emissions will have on the planning process. This promotes the use of management options that benefit both biomass growth and reduced peatland soil greenhouse gas emissions.

Conservation by corruption: The hidden yet regulated economy in Nepal's community forest timber sector

Through the case of commercial timber production in Nepal's community forests, we uncover and explain how effective anti-corruption and harvest regulation have produced a kind of ‘allowed’ corruption that promotes forest conservation. An ethnographic study in four community forests and in-depth interviews of nearly 200 actors along the Sal (Shorea robusta) timber commodity chain showed that all actors participated in a highly organised form of collusive corruption. Anti-corruption officials call this practice “corruption without illegality” because it does not involve unauthorised harvest in community forests. Instead, it suppresses producer prices through legally required but rigged timber auctions that generate windfall profits, which sawmill owners share with upstream actors to ensure a steady supply of raw logs. Local-level timber brokers connect community forest user groups to sawmill owners. They also operate as stealth conveyers of unofficial payments to forestry officials and other upstream actors because they can camouflage such cash flows as transaction costs. Anti-corruption authorities enforce formal timber harvesting rules, which deters forestry officials from getting involved in overharvesting schemes. However, these same rules, plus some legal posturing, allow forestry officials to extract rents from legally harvested logs at minimum risk. This is hardly a coincidence because it enables the central administration to regulate difficult-to-control field-level forestry officials' behaviour without curtailing their access to informal incomes. Forest user groups lose out, but they could increase their timber income substantially by exercising their powers to decide whether or not to harvest timber. Elevating timber auction floor prices through state intervention is also feasible.

Analysis of Timber Marketing in Lokoja Metropolis, Kogi State, Nigeria

Inadequate marketing information about timber species, their sources, market structure and performance has greatly hampered the effectiveness of the business and has hindered investment in the forestry sector. The dearth of market information on market performance and activities have hindered investments in to forest industry and limited its capacity to contribute to economic growth and development of the country. This study therefore analysed timber marketing in Lokoja Metropolis, Kogi State, Nigeria. A semi-structured questionnaire was administered to collect relevant information. Purposive and systematic sampling were applied to determine the study sample which was drawn from three timber markets; Ganaja, Felele and Zango daji. Applying 30% sampling intensity except in markets where the traders were less than ten, 40 timber traders were systematically sampled and interviewed on timber marketing activities. The study identified seven (7) most marketed timber species namely: Daniellia oliveri, Gmelina arborea, Milicia excelsa, Ficus exasperata, Prosopis africana, Triplochiton scleroxylon and Khaya grandifoliola. The major source of timber was from the open forest (92.5%), while supply within the state (27.5%) accounted as the highest, followed by Abuja (20%). The Gini-correlation co-efficient analysis for the study was 0.1552, and this implies that the timber market is imperfectly competitive with the market structure tending towards monopoly. Timber income analysis per truck of the seven species revealed that Daniellia oliveri recorded the highest mean return of 517, 005.99 per month while Ficus exasperata had the least mean monthly gross margin of 35,336.56. The mean gross margin of Khaya grandifoliola, Milicia excels, Prosopis africana, Gmelina arborea and Triplochiton scleroxylon had the same mean returns of 466,270 per month. Low patronage, scarcity of demanded wood species, lack of supply of wood species and high tax were identified as the major challenges facing timber market in the study area. Provision of adequate market education, proper examination and checking of excess associations will improve market efficiency and performance. Therefore, investment into forest development should be encouraged to ensure sustainable supply of raw materials for an efficient market system.

Assessing the Benefits and Economic Feasibility of Stand Improvement for Central Hardwood Forests

Abstract Stand improvement (SI) has been widely accepted as an effective forest management tool. Yet most studies on its economic feasibility for nonindustrial private forest (NIPF) landowners are outdated and focus on the single stand level. The objective of this study was to conduct an economic assessment of SI’s effects and feasibility in hardwood stands for a case study in the White River Basin in Indiana. It is shown that SI could make these forests more productive and sustainable than the prevalent “hands-off” practice by enhancing the timber value of the residual stand (TV), generating regular timber income, and to some degree, reversing the decline in oak dominance. On average, a 25% increment in the TV could be achieved. Although costly for some NIPFs, once combined with voluntary financial incentive programs, SI could meet landowners’ demands for low-cost, high-return investment options. In particular, participation in the Environmental Quality Incentive Program could, on average, increase the net present value of timber income from thinning activities by nearly $1,600 per hectare over the course of 30 years. The spatial analysis revealed that there existed considerable spatial heterogeneity in SI benefits and impacts, suggesting that public incentive programs should be spatially targeted to achieve greater efficiency.

Contribution of Small-Scale Acacia Hybrid Timber Production and Commercialization for Livelihood Development in Central Vietnam

Forming a backbone of the wood supply in Vietnam, approximately 50% of plantation areas are managed by individual households. Of the planted species, the Acacia (Acacia auriculiformis A. Cunn. ex Benth. × Acacia mangium Willd) hybrid is one of the most preferred by timber growers. Yet, information on the potential of this timber species for rural livelihoods is lacking. Taking Nam Dong and Phu Loc districts in Thua Thien Hue province as case studies, this paper aimed to explore the (i) characteristics of small-scale Acacia hybrid timber producers; (ii) contribution of Acacia hybrid timber production and commercialization to rural livelihoods; and (iii) socio-economic and contextual factors which determine the income from Acacia hybrid timber. We applied a mixed-methods approach including review of secondary data, interviews of 26 key informants, eight focus group discussions, direct observations and a survey of 300 Acacia hybrid producer households selected through multistage and purposive sampling. Qualitative and quantitative data were analyzed using thematic, descriptive and inferential statistics, such as variance analysis, correlation analysis and Bayesian model average (BMA) analysis. The results demonstrated the diversity of socio-economic characteristics, resource access and management as well as determinants of timber income of small-scale timber producers between the cases. Accounting for 33–56% of total household income, Acacia hybrid timber plantations played a crucial role in the current livelihood system. Nevertheless, timber income was skewed toward the wealth status of timber producers and ranged between 327 USD/household and 3387 USD/household in Nam Dong and between 397 USD/household and 9460 USD/household in Phu Loc district. Despite the substantial contribution the income from Acacia hybrid plantations could make to local poverty reduction, it was the main contributor to the overall income inequality. While this income source reduced the Gini coefficient by 1% in Nam Dong, it increased the Gini coefficient by 18% in Phu Loc district. Our study can be of interest for further policy interventions focusing on sustainable reforestation and livelihood development in Vietnam.

Continuous timber harvest — Costly restriction or profitable solution?

In timber production, sustainability means maintaining resources by balancing timber harvest with timber growth. In forest management, sustainability also refers to a constant and steady flow of income. The aim of this study is to resolve the contradiction, whether a sustainable/continuous flow of timber income is a costly (income-reducing) restriction, or a comparatively profitable (income-increasing) solution. For that we relax the common assumption of a perfect capital market and consider differing borrowing and lending rates to incorporate the aspect of financial viability into forest management decisions.Based on an established forest production model, we construct a synchronized “normal” forest enterprise and confront it with an interest rate on a perfect capital market and transform the forest enterprise to be optimal under the Faustmann-Pressler-Ohlin rule (FPO-rule). We do this by strictly following the FPO-harvesting-pattern, which immediately yields a perpetual non-constant (intermittent) flow of timber income. Alternatively, we simulate a long-term continuous forest enterprise transition, which ultimately results in a new normal forest structure with constant timber income. In a second step, we re-run the forest enterprise transitions under varying borrowing and lending rates, that differ as a function of capital availability within an imperfect capital market model. In both approaches, we derive and compare the maximum annual payout of the two alternative transition paths for an infinite time-horizon.Our results show, that the normal forest enterprise structure no longer holds when the rotation age is adjusted to be optimal under the FPO-rule when capital markets are perfect. We highlight why the normal forest structure is often referred to as a costly restriction towards the question of the optimal harvesting age due to inefficient investment and financing costs. In an imperfect capital market, with differing borrowing and lending rates, creating a new normal forest stand structure appears to be economically favorable compared to a stand structure which yields non-constant income.While our analysis does not provide universally valid evidence for the optimality of a normal forest, we are able to show that a constant flow of income can be favorable compared to non-constant income when the assumption of a perfect capital market is relaxed.

Under the risk of destructive event, are there differences between timber income based and carbon sequestration based silviculture?

We consider the management of a mono-specific even-aged forest at the stand level. Optimal silviculture based on timber income and sequestered carbon income in an no risk case and a risky case are compared. In this study, using calculus of variations we discuss the validity of using a risk adjusted discount rate (a rate of natural risk added to the discount rate) or using a carbon adjusted discount rate (a rate of natural risk subtracted to the carbon discount rate) without risk to mimic the natural risk case in term of optimal thinnings. Except for very high risk rate values in the risky case, the optimal trajectory for carbon sequestration is very different from that obtained for the timber criterion. We show that without risk or with risk case but moderate risk rate, the optimal cutting age for sequestered carbon will be the senescence age. For higher risk rate the optimal cutting age for sequestered carbon may be more comparable to optimal timber cutting age.

Dynamics of heavy metal uptake and soil heavy metal stocks across a series of Masson pine plantations

To evaluate the roles of the plantations in cleaning soil heavy metals, the concentrations of copper (Cu), manganese (Mn), lead (Pb) and zinc (Zn) in both plant tissues and soils were therefore measured in the young (5a), half-mature (15a), near-mature (21a) and mature (27a) Masson pine (Pinus massoniana) plantations, and their stocks were further calculated. The concentrations of heavy metals varied with stand ages and tissues. The highest concentrations of Pb, Zn and Cu in pines were found in the half-mature plantation, while the highest value of Mn was found in the near-mature plantation. The concentrations and bioconcentration factors (BCFs) of Cu and Pb in pine tissues followed the order of root > need > branch > bark > trunk, and those of Mn and Zn followed the order of need > branch > bark > bark > root > trunk. Cu, Mn, Pb and Zn were stored mainly in the trunk, and the highest stocks of plants were found in the near-mature plantation. Although the concentrations and stocks of heavy metals in soils were not decreased with stand ages, the sustainable phytoextraction of Masson pine for heavy metals as affected by huge biomass and large planting area made Masson pine plantations play a positive role in cleaning soil heavy metals in non-point source pollution regions. Accordingly, it is highly recommended to log the near-mature Masson pine plantation to maximize the benefits of cleaning soil heavy metals and timber income.

Estimated effects of the Tax Cuts and Jobs Act of 2017 on private noncorporate forest landowners' timber income in the U.S. South

Financial effects of the Tax Cuts and Jobs Act of 2017 (TCJA) on private noncorporate timber growers vary due to the difference in timber holdings, level of non-timber income, and intensity of forest management. This commentary reports on a financial analysis, which suggests that landowners holding timber as investments as a group are moderately worse off due to the changes in itemized deductions brought by the TCJA. The distinction in the net benefits of timber holdings becomes more significant between forest investors (as a group) and material participants. This may become an incentive for some investors to consider converting to a business and intensifying their forest management to meet the material participation requirement. Some investors, on the other hand, may reduce forest management costs or divest their timberland due to deterioration in profitability. It also suggests that owning and managing timber becomes less beneficial in terms of tax savings for forest landowners with moderate and high non-timber income (except for high income, large holding scenario) under the new law than under the prior law.

Determinants of Non-Timber Forest Product Planting, Development, and Trading: Case Study in Central Vietnam

Non-timber forest products (NTFPs) play an active role in economic development, improving household livelihoods, raising the value of forestry production, and supporting sustainable forest management. This study involved a comprehensive assessment of the growth, development, and trade of NTFPs in Vietnam by combining logistic and tobit methods. Surveys were used to interview 400 households in three regions of Central Vietnam. Results showed that the planting, development, and trading of NTFPs are shaped by forestry production experience, the number of laborers, the percentage of wage earners, agricultural income, timber income, per capita income, the presence of bank deposits, the distance between forest and house, an understanding of forestry economic policies, and participation in technical training. Each factor had a different level of influence. Among the six NTFP groups, the groups generating yarn and medicines produced the highest income and had a strong impact on household reliance on NTFPs. This was followed by NTFPs used to generate food, oil, and plastic. The proportion of people with wages, and the income variable system, negatively impacted NTFP planting and income generation, which reduced household reliance on NTFPs. This means that there is a trade-off between NTFPs and other income generating activities. In the future, the government should develop specific plans, policies, and strategies for developing each type of NTFP suitable to each region’s natural conditions. The policies should include supporting people with low-interest bank loans; expanding the number of training courses to increase their understanding of forestry economic policies; and implementing cultivation techniques and forest care to improve the productivity, quality, and efficiency of NTFP products.

Understanding Tree-to-Tree Variations in Stone Pine (Pinus pinea L.) Cone Production Using Terrestrial Laser Scanner

Kernels found in stone pinecones are of great economic value, often surpassing timber income for most forest owners. Visually evaluating cone production on standing trees is challenging since the cones are located in the sun-exposed part of the crown, and covered by two vegetative shoots. Very few studies were carried out in evaluating how new remote sensing technologies such as terrestrial laser scanners (TLS) can be used in assessing cone production, or in trying to explain the tree-to-tree variability within a given stand. Using data from 129 trees in 26 plots located in the Spanish Northern Plateau, the gain observed by using TLS data when compared to traditional inventory data in predicting the presence, the number, and the average weight of the cones in an individual tree was evaluated. The models using TLS-derived metrics consistently showed better fit statistics, when compared to models using traditional inventory data pertaining to site and tree levels. Crown dimensions such as projected crown area and crown volume, crown density, and crown asymmetry were the key TLS-derived drivers in understanding the variability in inter-tree cone production. These results underline the importance of crown characteristics in assessing cone production in stone pine. Moreover, as cone production (number of cones and average weight) is higher in crowns with lower density, the use of crown pruning, abandoned over 30 years ago, might be the key to increasing production in combination with stand density management.

Optimal Continuous Cover Forest Management with a Lower Bound Constraint on Dead Wood

AbstractWe analyze economically optimal continuous cover forestry with dead wood as a biodiversity indicator. We study mixed-species stands consisting of Norway spruce (Picea abies [L.] Karst.), birch (Betula pendula Roth.), and other broadleaves (e.g., oak [Quercus sp.], maple [Acer sp.]). The analysis is based on an economic description of continuous cover forest management using an empirically estimated size-structured transition matrix model. We use size-specific decomposition rates for dead wood, with the lower limit on total dead wood volume varying between 0 and 40 m3 ha–1. The optimization problem is solved in its general dynamic form using gradient-based interior point methods. Increasing the dead wood volume requirement affects total stand density only slightly, but increases stand heterogeneity as other broadleaves are grown in higher numbers. In addition, increasing the dead wood requirement has only a minor effect on the total felled volume, but harvests shift from timber harvests to biodiversity fellings to maintain the required dead wood volume. In the optimal steady state with a high dead wood requirement, two harvesting cohorts emerge: one for timber harvests and the other for biodiversity fellings. Increasing the dead wood requirement decreases steady-state net timber income by up to 30 percent compared to the unconstrained solution.

Importance of Community Forestry Funds for Rural Development in Nepal

Nepal’s Community Forestry (CF) process has implied the devolution of powers to collect, retain, and redistribute forest revenue from community forests products. This study contributes to our knowledge about these important aspects of CF by presenting an analysis of the dynamic pattern of income and expenditure of 43 randomly selected Community Forestry User Groups (CFUGs) from Kaski, Nepal. Results show that CFUG three-year average annual income accounts NRs 216,225 (1 US$ = NRs.114) and is highly skewed towards a few wells off CFUGs; the high-and-low average annual income of one-third of CFUGs in the sample ranges from NRs. 33,116 to NRs 502,363. Timber income and user’s contribution constitute the most important sources of income, comprising 40% and 25% respectively. The rural development investments of CFUG income are also highly variable and are shaped by income size of CF, and the other socio-political factors such as the number of households, distance to market, infrastructure status, and contextual factors. Overall, 44% of the CFUG income is invested in community development and 37% in forest conservation. Investment in community development increases with rising income. Accordingly, results presented here provide insights to promote community forests to generate more income which, indeed, could be a vehicle for community development as it appears in the mid-hills of Nepal.

Family forest owners and federal taxes

Focus groups were conducted with family forest owners to investigate the effect of government tax policies on their decisions regarding their land. Two groups each were held in New Hampshire, South Carolina, Alabama, Wisconsin, and Washington, USA, one with owners enrolled in the state preferential property tax program for forested land and one with owners who were not so enrolled. Each focus group consisted of 8–10 owners and lasted approximately 2h. Overall, only two beneficial federal income tax provisions (treatment of timber income as a long-term capital gain and timber depletion deductions) and five federal estate tax provisions (the effective exemption for estates, the annual exclusion for gifts, use of a will, the step-up in basis for inherited assets, and the effective exemption for gifts) were brought up in over half of the groups. Groups composed of tax program enrollees tended to discuss federal income tax provisions more distinct times than those composed of tax program non-enrollees, and tended to be familiar with more federal estate tax provisions; otherwise, there was little difference between them. Misconceptions about tax provisions were common. As well, groups in every region noted the negative effects of tax uncertainty and that not all professionals are knowledgeable about federal taxes as they apply to family forest owners.

Passive Restoration of Atlantic Forest Following Pinus taeda Harvesting in Southern Brazil

AbstractThe understory of exotic tree plantations can have non‐negligible native species richness. Ecological restoration of these sites may include the harvest of trees, depending on the tradeoff between timber income and harvest impacts on biodiversity. This study aimed to investigate how a site can recover from harvest disturbance, by comparing the regeneration of woody species in the understory of two types of 37‐year‐old Pinus taeda plantation (P1 and P2, high and low relative density of pine seedlings in the understory, respectively), with stands that were similar to P2 but subjected to harvest and then abandoned for 15 years (R sites). Secondary forests (SF) were used as references. We sampled three different sites for each stand condition; soil chemical properties, estimations of litter mass, and canopy cover were measured. P1 had low species diversity, and P2 and R had 50 and 46% of SF richness, respectively. The R site contained few pine saplings and was floristically similar to P2; this indicated that 15 years was sufficient for the recovery of plant diversity to near pre‐harvesting levels. Soil fertility was highest in SF and lowest in P1. Thus old plantations of P. taeda with low relative density of pine juveniles can be cost‐effective starting points for restoration. Despite the destructive effects of pine harvest, recovery of native species can occur rapidly. In situations in which clearcutting of pine stands is not planned or possible, modest thinning of P. taeda adults and/or intensive thinning of juveniles could expedite restoration.

Red Oak in Southern New England and Big-Leaf Mahogany in the Yucatán Peninsula: Can Mixed-Species Forests Be Sustainably Managed for Single-Species Production?

Complex mixed-species forests are the focus of conservation efforts that seek to maintain native biodiversity. However, much of this forestland is privately owned and is managed for timber income as well as for conservation. Management of these high-diversity forests is particularly difficult when only one tree species produces the majority of high-value timber. We examined the past and current management of two regions which have those characteristics: Massachusetts, USA, with red oak (Quercus rubra L.) as the key timber species, and Quintana Roo, México, with big-leaf mahogany (Swietenia macrophylla King) as the most valuable species. These regions have different ecological characteristics, forest ownership types, landowner income, and importance of timber in total income, yet the silvicultural approach (low-intensity selective cutting) is surprisingly similar, and is generally failing to provide the conditions needed for regeneration and growth of key species. In both situations, the reluctance to harvest low-value species and interest in minimizing forest disturbance complicates management. Successful balance of timber harvest and forest conservation may be an important factor in preventing conversion of these lands to agriculture or residential development, but socioeconomic conditions (property tax policies and landowner affluence) play an important part in the outcome.

Integrating fire risk considerations in landscape-level forest planning

The low timber returns of Mediterranean forests, together with their high fire risk, has led to negligent forest management. Absence of management has in turn been blamed for increasing the risk of fire, thus forming a vicious circle of low profitability, little management and high risk of fire. Developing forest planning tools that maximize both economic objectives and fire resistance could help to revive the forest sector in the region and generate long-term fire prevention strategies. In the present study, we simultaneously maximized timber income and the overall fire resistance of the landscape to generate management plans for a typical forest landscape in the Pre-Pyrenees of Catalonia (North-East Spain). The risk of fire was integrated into the economic objective by incorporating potential fire losses in the expected net income. Landscape metrics describing fire resistance were also included in problem formulations. The results show that this approach greatly improves management efficiency in terms of economic profitability and fire resistance.

Incidence of forest income on reduction of inequality: Evidence from forest dependent households in milieu of joint forest management

This study suggests that there is a narrower scope to expand income inequality with the increase in forest source of income to total income relative to non-forest income irrespective of the type of forest fringe villages. The addition of forest income after joint forest management (JFM) reduces measured income inequality by about 12%, all else equal, in the JFM involved households. But no such perceptible decrease has been found for non-JFM households during this period. Categorically, forest income plays the dominant role in reducing measured income inequality for those households who are relatively asset poor and that also live below poverty line. The study also shows that the non-involvement in JFM programme by the non-JFM households might bring about a major environmental shirking, because illegal timber income constitutes the major part in total income for non-JFM households even after JFM scenario.

Vicious and Virtuous Cycles and the Role of External Non-government Actors in Community Forestry in Oaxaca and Michoacán, Mexico

Community forestry offers potential for socioeconomic benefits while maintaining ecosystem services. In Mexico, government and donor efforts to develop this sector focus on issues within forest communities. Often overlooked are effects of external non-government actors (NGOs and foresters) as links or barriers between communities and funding, capacity building, and technical support. To analyze the role of these actors, I analyze household survey and interview data from 11 communities with varying levels of vertical integration of forestry production in states with divergent records of community forestry, Oaxaca and Michoacán. Results suggest that strong community governance is necessary but not sufficient for vertical integration, and strong interactions with non-government actors are critical. These actors, operating within the existing framework of government regulations, have a range of incentives for engaging communities. Availability of these actors motivated by concern for community capacity instead of timber income may be a determinant of community forestry development.

Economic and Ecological Effects of Diameter Caps: A Markov Decision Model for Douglas-Fir/Western Hemlock Forests

Abstract We evaluated some of the effects of not harvesting trees of 41 cm (16 in.) dbh or larger with uneven-aged management of Douglas-fir/western hemlock forests. The opportunity cost of diameter caps was measured by the difference in maximum expected net present value (NPV) or equivalent annual timber income, with or without diameter caps. For the two policies, Markov decision models were used to determine the best decision rules and their effects on the NPV, the forest area with late-seral structure, and the forest area with northern spotted owl nesting habitat structure. The opportunity cost of diameter caps was computed for 64 initial stand states defined by basal area of small, medium, or large trees of shade-intolerant species (mostly Douglas-fir) or shade-tolerant species (mostly western hemlock). The opportunity cost fell in four distinct quartiles. The 16 stand states with high basal area in large shade-intolerant and large shade-tolerant trees had the highest opportunity cost ($798–$816 ha−1year−1 or 58–76%, expected over an infinite horizon), whereas the 16 stand states with low basal area in large shade-intolerant and large shade-tolerant trees had the lowest ($59–$89 ha−1year−1 or 11–13%). The diameter caps policy increased considerably the expected area of forest with late-seral structure, over an infinite time horizon, and the expected area with spotted owl nesting habitat structure, compared with their current levels in the study region.