Increased Productivity in the Fourth Forest 



There is clearly the economic potential to grow a fourth 

 forest in the South that can sustain much larger timber 

 harvests. But only a limited part of this potential is likely 

 to be realized under the market system that effectively guides 

 the production of most goods and services. The problem 

 is the limited increases in timber supplies that come about 

 as prices rise. For example, the best available data show 

 that for each 10-percent increase in stumpage prices, there 

 is less than a 4-percent increase in supplies. 



There is clearly the economic potential to 

 grow a fourth forest in the South that can 

 sustain employment and income in the 

 forest industries, which are now such an 

 important part of the South's economic 

 base. But only a limited part of this 

 potential is likely to be realized unless action 

 is taken to expand the public and private 

 programs of protection, technical and 

 financial assistance, research, education, and 

 management that are effective in increasing 

 timber supplies. 



The limited response to price changes largely reflects the 

 characteristics of the private timber owners other than forest 

 industries. Various studies have shown that these owners 

 have widely diverse objectives and attitudes; limited 

 technical knowledge of the ways timber stands should be 

 marketed, harvested, regenerated, and managed; and 

 varying willingness and capacity to make investments in 

 management practices. Ownership tenures are typically 

 short, and most owners are in the older age groups. Thus, 

 for timber, where the time between investment and harvest 

 is long, there is the likelihood that direct benefits such as 

 income from timber sales will not accrue to many current 

 owners. 



In the past, society has taken action to increase timber 

 supplies by supplementing market forces, although the 

 limited response of supplies to price changes has not been 

 explicitly recognized as the reason in any of the forestry 

 legislation, and in only a very limited way, in the forestry 

 literature. Nearly all forestry legislation — the public 

 programs of protection, technical and financial assistance, 

 research, education, and public ownership — and many 

 forest industry programs are in fact societal adjustments 

 designed to supplement the market system and increase 

 timber supplies. 



By any standard, these actions have worked. They have 

 resulted in the regeneration of the second and then the third 

 forests. This, in turn, made possible the development and 

 growth of the forest industries that now constitute such an 

 important part of the South's economic base. The programs 

 are also efficient — the benefits exceed the cost — and they 

 are effective in increasing the income of forest owners. If 

 future employment and income in the forest industries is 

 to be sustained, action must be taken to expand both public 

 and private programs that are effective in increasing timber 

 supplies. This can be done in a variety of ways, but it must 

 be done if the forests in the South are to continue to have 

 the important place in the economy they have today. 



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