Roger A. Sedjo - Global Perspective of Private Investments in Plantation Forestry

Investments in Forestry

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Can forestry compete with manufacturing and agriculture for scarce capital or is investment in forestry attractive only when non-economic considerations--for example, the social desirability of forestry investments--are taken into account? Addressing this question, the contributors to this book assess the market for forestry products in the short- and long-term future; examine the competition between agriculture, cities, and forestry for use of land; identify strategies that private, industrial, and public investors might adopt; and look at the effects of government policies on private investors.

Roger A. Sedjo is senior fellow and director of the Forest Economics and Policy program at Resources for the Future and author of The Comparative Economics of Plantation Forestry: A Global Assessment (1983).

Resources, Land Use, and Public Policy

edited by Roger A. Sedjo

First published 1985 by Westview Press, Inc.

Published 2018 by Routledge
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Copyright 1985 Taylor & Francis

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Library of Congress Cataloging in Publication Data
Main entry under title:
Investments in forestry.
Includes index.
1. Forests and forestry--Finance. 2. Forests and
forestry--Economic aspects. 3. Investments. 4. Forests
and forestry--United States--Finance. 5. Forests and
forestry--Economic aspects--United States. 6. Investments
--United States. 7. Forest policy--United States.
I. Sedjo, Roger A.
SD393.I58 1985 338.1'34'0973 84-22078

ISBN 13: 978-0-367-00830-7 (hbk)

Controversy has swirled around policy issues concerning U.S. forest land resources since the founding of the colonies. There is no controversy about the fact, of course, that timber as a source of wood products is an important resource in the American way of life. Approximately 5 percent of the nation's gross national product and employment rate is attributed to the wood product industry. Decisions made to invest in the growing, processing, and distribution of the products of this resource thus affect deeply the economic well-being of the nation.

Timber as an investment target Is especially interesting in light of two factors. One is the long time period required to create a new crop of timber from which to extract wood products. Another is the unique mixture of public and private ownership of forests and timber in the United States. The long time period required from planting to harvest (ranging from perhaps 20 to 120 years, depending upon product objectives and local growth rates) generates an uncommon amount of concern about the ability to predict prices and costs to a degree of precision adequate to support conventional investment decisionmaking. Public owners (or the public professional trustees for public forests) and private owners often have different criteria for investment in forests and timber, and the effects on these forests of applying these different criteria are also different. Further, the objectives of private users of public forests and timber tend to go unsatisfied, at least in the short term, because managerial and investment decisions of the public forest managers must be hedged with the objectives of other users of these same forests. It is, therefore, necessary to expect varying resource supply response nationwide to changes in investment incentives such as Interest rates.

Rationalizing this variability in investment objectives and response may be easier or more understandable as a result of the papers included in this monograph. These were presented at a national symposium on forestry investment opportunities held January 17 and 18, 1983, in Denver, Colorado. The symposium was cosponsored by Colorado State University and Resources for the Future with supplemental financial support from the Burlington Northern Foundation.

Jay M. Hughes
Dean, College of Forestry
and Natural Resources
Colorado State University

Numerous individuals and organizations cooperated in the symposium, "Investing in Forestry's Future," from which this volume is largely drawn. Keith Arnold played a critical role in bringing together the Forest Economies and Policy Program of Resources for the Future and the College of Forestry and Natural Resources of Colorado State University as joint sponsors of the symposium. In addition, Keith made a major input into the preparation of the symposium's program and through his direct participation in the symposium as a moderator. Also, both Resources for the Future and the College of Forestry and Natural Resources (CSU) deserve special thanks for their support of the symposium. Funding for the symposium was provided directly by the Burlington Northern Foundation and also by the U.S. Forest Service and the Weyerhaeuser Company Foundation through their support of the Forest Economics and Policy Program of RFF.