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Federal policy is also flawed because it ignores because it 

 ignores the contributions to timber output and employment that 

 can be made by Alaska's Native corporations. Through careful 

 land selections, the Native corporations now own some of the best 

 timber lands in southeast Alaska. Their share of the regional 

 timber harvest climbed from 13 percent in 1980 to 57 percent in 

 1988. However, Forest Service sales under the 50-year contracts 

 impede the ability of the Native corporations to successfully 

 market their pulp-grade logs. Up to 90 mmbf of pulp-grade 

 material is left on the ground on Native corporation lands or 

 sold to Canadian pulp companies each year because the pulp mills 

 have access to subsidized federal timber from the Tongass. 



Finally, the federal timber program places at risk a large 

 number of jobs in southeast Alaska that ultimately depend on the 

 preservation of the Tongass' forested area. This is particularly 

 true for jobs in the fishing and tourism sectors of the economy. 

 These sectors, which combined to provide more than twice as many 

 jobs in the timber industry, depend on natural resources that can 

 be sustained in perpetuity. The southeast Alaska timber 

 industry, on the other hand, is dependent on the one-time harvest 

 of high volume, old growth timber. 



Institutional Interests 



Federal timber policy in southeast Alaska grew out of a 

 well-intentioned effort to establish a stable employment base in 

 the region. Since the construction of the pulp mills, however, 

 the various demands placed on the Tongass National Forest has 

 changed radically. Current and projected market demand for the 

 region's timber products and timber industry employment have 

 fallen sharply. At the same time, demand has increased greatly 

 for wilderness, recreation, fisheries, wildlife, and protection 

 of the ecosystem. 



It is not difficult to imagine why two pulp companies resist 

 fundamental changes in federal timber policy. In building the 

 pulp mills, each firm made substantial commitments of capital and 

 management resources. Furthermore, current policy provides for 

 the effects of adverse market forces — e.g. lower product prices 

 and high infrastructure costs — to be passed on to taxpayers in 

 the form of reduced stumpage fees and increased government 

 spending. 



Managers of public agencies, including the Forest Service, 

 have an incentive to maximize annual budgets and staff positions 

 under their control. Before World War II, the timber industry 

 relied almost exclusively on private lands for its logs. Since 

 there was little industry demand for federal timber, the Forest 

 Service was more a custodian than an active manager of its lands. 

 But as private timber inventories declined and market demand for 

 federal timber increased following World War II, the Forest 



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