HTML _ 95-1077 - Forest Service Timber Sale Practices and Procedures: Analysis of Alternative Systems
30-Oct-1995; Ross Gorte; 33 p.

Abstract: The Forest Service currently sells timber by (a) planning and preparing the sale, (b) offering the sale, usually at an oral auction, and (c) administering the timber harvest. Many of the concerns about the timber program have focused on harvest administration, because purchasers have incentives to minimize their costs and to remove only those logs whose value for products exceeds the price paid to the Forest Service. Some critics suggest that this, together with an alleged ¨timber bias¨ and other inappropriate incentives, has contributed to environmental damages (e.g., deteriorating forest health), poor fiscal performance (e.g., below-cost timber sales), and a lack of accountability (e.g., timber theft). Possible legislative changes to the timber sale system are being considered by various interest groups and Members of Congress. Harvest contracting has been proposed as an alternative to the current sale system that would alleviate many of these concerns. This approach would entail a two-step process: (a) a timber harvest contract to cut and remove the wood, and (b) log sales from the collected and sorted wood. Potential advantages include: better implementation of ecosystem management; opportunities to improve forest health without merchantable timber; elimination of below-cost timber sales; and reduction in timber theft. Disadvantages include: Government log market operations; possibly lower log values (Federal revenues); potentially less funding for sale planning and preparation and lower timber harvest levels; and conceivably less accountability because of the lack of adequate harvest contract performance measures. Alternatively, many suggestions for modifying parts of the current system have been proposed to redress some of the criticisms. Various proposals address fair market value and cost recovery (e.g., tree measurement sales; transaction evidence appraisal; sealed bidding; higher minimum prices); reforestation and timber stand improvement (e.g., restricting the K-V Fund; relaxing reforestation requirements; allowing wood removal in precommercial thinning; relaxing prescribed burning standards); road construction (e.g., public participation in road planning; prohibiting new roads; modifying purchaser road credits); and law enforcement (e.g., independent law enforcement organization; higher consciousness of the problem; stiffer penalties). Many of the proposals have the potential to reduce the environmental damages from timber harvesting and the associated road construction by altering incentives or reducing harvests, although such benefits are likely to be relatively modest. Fiscal results would probably improve, since higher prices, lower unit costs, and better revenue collection are often the purpose of the proposals. However, such changes (particularly higher prices and lower harvest levels)) could economically injure timber purchasers that depend on Federal timber, and thus indirectly hurt some local communities.

The U.S. Forest Service, within the U.S. Department of Agriculture, is the largest timberland owner and timber supplier in the United States. There are numerous, often long-standing, concerns about the timber sale practices and procedures -- that they contribute unnecessarily to environmental degradation, that they are fiscally inappropriate or irresponsible, and that they have permitted fraud and theft of Federal assets. Numerous alternatives to the current timber sale system have been described over the past two decades; (1) many of the ideas and conclusions from these efforts form the basis for the alternatives described in this report, and some are being considered by Members of Congress as possible legislative solutions to the perceived problems. This report first describes the current Forest Service timber sale system and the major concerns over the consequences of the sale system. It then reviews the option of a complete overhaul of the current approach that would separate the timber cutting and removal from the sale of the wood, and analyzes the consequences of this approach. The final section describes a large number of changes in the current system that could be implemented individually or in combination (although some possibilities may be mutually exclusive), and examines the results of these options. [read report]

Topics: Forests

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