tute materials such as steel, aluminum, and plastics 
would also be constrained. There would be related 
environmental benefits, particularly from reduced 
erosion and sedimentation from crop and grazing 
land converted to forest. Air and water pollution 
from mining, industrial processing, and power gen- 
eration associated with the use of wood substitutes 
would also be reduced. 
The analysis of economic opportunities to in- 
crease timber growth in the South assumed that 
stumpage prices would continue to rise. But even 
with constant stumpage prices, the opportunities 
are still large--amounting to over 3 billion Cubic feet 
of annual growth on timberland. So the opportuni- 
ties are largely risk free insofar as price changes are 
concerned--because prices are not likely to fall be- 
low recent levels in real terms. 
Potential for Conversion of Cropland to 
Timber 
Price expectations for most field crops and for 
red meat are quite different from those for timber. 
Given the outlook for increases in agricultural pro- 
ductivity throughout the world, it is projected that 
relative prices for these commodities will remain un- 
changed or perhaps even decline in the future. For- 
age supplies will increase, largely in the West, as 
Conservation Reserve contracts expire after 1995. 
Thus, constant or even declining relative prices, 
along with the crop surpluses that currently exist, 
indicate that there will be a shift away from the use 
of land for field crops and pasture. The Conserva- 
tion Reserve is now facilitating that shift. USDA has 
now accepted about 20 million acres for the long- 
term Reserve, mainly in the western grain States. 
The target is 40 to 45 million acres by 1990. 
The analyses in our study indicate that there are 
now about 8 million acres of cropland and pasture 
in the South where the owners could obtain higher 
rates of return if planted to pine. There are also an 
additional 11 million acres of highly erodible crop- 
land suitable for trees. Most of this cropland and 
pasture is open land and can be easily planted with 
machines. There are no site preparation or other 
related costs. As a result, the cost of establishing a 
pine plantation on cropland and pasture is much 
below that on harvested timberland--$62 per acre 
compared to $129 per acre. It is also below the $94 
per-acre cost of converting timberland stocked with 
low-quality trees to pine plantations. 
14 
Under the Conservation Reserve Program of 
the 1985 Farm Bill (Food Security Act of 1985), up 
to 3 million acres of the highly erodible land could 
be planted to pine in the South by 1990. To date, 
USDA has accepted about 2.2 million acres for the 
Conservation Reserve in the South (excluding Tex- 
as and Oklahoma). Half of that area, or about 1.1 
million acres, is to be planted to pine. 
How To Capture the Opportunities 
The opportunity for southern timber growth is 
there. The problem, of course, is how to capture the 
Opportunities. The basic infrastructure is in place. 
We have the transportation network, the trade and 
service industries, and a large and efficient forest 
industry. The necessary institutions are in place-- 
State forestry organizations, forestry consultants, 
and the USDA agencies of the Forest Service, Ex- 
tension Service, Soil Conservation Service, and the 
Agricultural Stabilization and Conservation Service. 
We also have the southern forest experiment 
stations and 15 southern universities providing pro- 
fessional forestry training and carrying out re- 
search. Southern financial institutions have estab- 
lished their interest in forest investments. Their 
portfolio of forest investments has been growing. 
State policy officials have deepened their aware- 
ness and interest in the role of forestry and forest 
industries in their economies. Some have lent their 
leadership to the Statewide forest resource plan- 
ning and development efforts of the State forestry 
agencies. 
We have what is needed--the economic oppor- 
tunities, the infrastructure, the institutions, and the 
awareness and interest to grow a fourth forest to 
assure the continued growth of the forest industries. 
The challenge is how to marshal and deploy these 
institutions and interests effectively. We need to fo- 
cus on concrete goals in terms of investments made 
on the ground, on how to integrate our efforts in 
each State to reach the landowners who could initi- 
ate the needed investment and management. This 
is a task that cannot be achieved by any one institu- 
tion alone. Integrating our efforts collectively, will 
greatly increase our overall effectiveness and pro- 
duce a synergism that can multiply our productivity 
in increasing forest growth. 
The investment needed to implement the eco- 
nomic opportunities on privately owned timberland 
is $6.2 billion. The minimum rate of return on these 
