signals. The message is clear, however: we cannot 
rely solely on market incentives to maintain timber 
supplies in the South. 
What Can We Do About It? 
The first thing that comes to mind here is, will 
the problem fix itself? Perhaps it seems absurd to 
ask that question, but we must if we are to realize 
that change is needed now. The past has molded 
the behavior patterns that will form the future. | see 
nothing happening now to suggest that the past 
patterns of nonindustrial private landowner invest- 
ment in timberland have suddenly changed. | see 
nothing to indicate that softwood inventories on 
nonindustrial private lands are building. | do see a 
recent past where owners have felt increasing pres- 
sure to harvest, where the public programs that 
worked effectively in the past are being weakened, 
and where the economic climate for long-term capi- 
tal investments has been exiled. No, the problem will 
not fix itself; we must do the fixing. 
We must make it a regional priority and a priority 
in each State to sustain and enhance the productiv- 
ity of our forests. The first step is to work vigorously 
to improve the economic climate for forest manage- 
ment investments where markets are weak. AIl- 
though we cannot expect landowners to respond 
fully to better market expectations, the effectiveness 
of many programs to boost forest management is 
enhanced greatly by strong markets for timber and 
other forest outputs. This means that we must take 
all possible steps to enhance markets where they 
are weak now. Attracting industry to areas with un- 
derutilized timber supplies is essential. States must 
recognize the multiple benefits of enhancing em- 
ployment and income in these often less developed 
counties. We should work to attract smaller wood- 
using firms, encourage the use of biomass for fuel, 
and help to develop more effective timber supply 
networks. We must also assure that the competitive- 
ness of the region is not fettered by a regulatory 
overburden that does little to contribute to long-term 
productivity. 
It is clear that even these steps are not enough 
to assure adequate timber supplies for the future. 
Specially targeted public programs are needed for 
nonindustrial private forest lands. We _ should 
strengthen the programs that have worked well in 
the past and do our best to develop new, innovative 
methods. The benefits of public programs to en- 
hance forest productivity are known, and landown- 
ers are not the only gainers. We all gain economic 
and environmental benefits in the process. 
Financial Incentives 
For many landowners, little capital is available to 
increase investments in forest management. For too 
long, we have expected landowners, some barely 
able to keep financially solvent, to make high-cost 
investments to keep their timberland productive. It is 
constantly surprising to me that we ask why 
landowners do not manage their timber better. 
Many simply do not have the extra money it takes to 
keep timberland producing near its potential. Oth- 
ers do not have the time to wait until a profit is 
earned. The Forestry Incentives Program, Agricul- 
tural Conservation Program, Conservation Reserve, 
and State cost-share programs, among others, 
have been demonstrated effective. In some cases, 
they might be targeted or administered more 
effectively, but they work to get trees in the ground. 
For most goods and services in our economy, 
increases in price always have the effect of expand- 
ing production. Producers are willing to produce 
more if the market is willing to pay more. This eco- 
nomic rule holds for practically all goods, except 
forests. Given the real price increases that have 
been sustained for pine timber generally across the 
South, economists would normally expect landown- 
ers to plant and grow more timber. However, almost 
the opposite is true. Landowners are clearly willing 
to cut more when stumpage prices rise but not nec- 
essarily to put the land back into production. The 
current base of timberland owners do not ade- 
quately respond to price. 
We must broaden the investment base and ex- 
pand the sources of capital flowing into forest man- 
agement. There is no question in my mind that it is 
exceptionally difficult to motivate landowners to in- 
vest more in forestry when they do not have the 
money. We must find more effective ways to draw 
additional capital into forest management and pro- 
duction. The private syndicates have been doing 
some of this, but Federal tax reform has muddied 
their water. 
Technical Assistance 
It is incumbent on each of us in every sector-- 
Federal, State, private industry, and forestry 
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