35 



created some sort of new hiatus. That interrupts the revenue flows 

 and cranks costs up consistently. So in forest after forest that ap- 

 pears to have this problem, you will find that to be the case. 



As a general matter, we would offer some suggestions if the real 

 interest here is in improving the cash return to the Forest Service. 

 The first would be to restore the entire revenue stream by requir- 

 ing the Forest Service to sell the allowable sale quantity each year. 

 That alone will generate substantial new revenues which will 

 swamp, at today's prices, any sort of cost deficit. 



The second would be to streamline the planning and the analysis 

 process that is required of the Forest Service now. It is difficult for 

 any private manager to see the Forest Service as behaving in any- 

 thing but "analysis paralysis." Forest Service costs used to be three 

 to four times that of State agencies that are managing adjacent 

 lands. They are certainly 5 to 10 times that of private companies 

 that are managing timber lands. All of this is additional invest- 

 ments in additional analyses of additional things. In the forest 

 management business, there is always going to be uncertainty, and 

 there will always be other things that could be analyzed; but some- 

 where, somebody needs to evaluate the value of those investments. 



Then, the third was mentioned earlier today, which is to bring 

 about some sort of meaningful reform to the appeals and litigation 

 process so we can break this continuous loop of proposing projects, 

 fighting appeals, fighting litigation, and going back to the drawing 

 board and doing it over again. There has to be finality in order to 

 bring about financial efficiency. 



That said, I will close my remarks by offering our pledge to work 

 with this committee and with this administration if there is a seri- 

 ous interest here in trying to evaluate this issue in the context of 

 how to make this fit with what is intended to be rational forest 

 management for our public lands over the next 10 years. 



We have little choice, with 20,000-plus jobs at stake of our people 

 and our businesses, to actively oppose the financial reductions of 

 the $46 million cuts that are proposed by the Clinton administra- 

 tion and will do so and continue to do so. It is difficult for me to 

 understand how Mr. Lyons anticipates achieving those objectives 

 without bringing about the types of program cutbacks that have 

 been talked about here today, but we will work to try to find that. 



We certainly would also pledge our support for working on ways 

 to improve the efficiency of the Forest Service as they discharge 

 their responsibility, and would be happy to engage in that discus- 

 sion as well. 



With that, I appreciate the opportunity to testify and would be 

 happy to engage in any questions you might have. 



[The prepared statement of Mr. Riley follows.] 



Prepared Statement of James S. Riley, Executive Vice President, 

 Intermountain Forest Industry Association, Coeur d'Alene, Idaho 



I'm James S. Riley, executive vice president of the Intermountain Forest Industry 

 Association (IFIA) located in Coeur d'Alene, Idaho. IFIA is an association of forest 

 products manufacturers in Colorado, Idaho, Montana, South Dakota, Utah, and Wy- 

 oming. All of our members are dependent, in whole or in part, on the national 

 forest in these States for their raw material supply. Also, I am representing the 

 American Forest and Paper Association (AFPA) which is the national trade associa- 

 tion of the forest, pulp, paper, paperboard, and wood products industry. AFPA is 



