College of Natural Resources, UC Berkeley

The S.J. Hall Lecture in Industrial Forestry

European Forestry - A Global Perspective

John Campbell, O.B.E.

World Issues

In a speech in London in 1988 HRH The Prince of Wales said "There is a deep and growing public concern about the threats to our environment but do we really appreciate the serious and urgent challenge which we all face on a global scale, are our political leaders more influenced by the costs of action rather than the concealed costs of inaction? In many instances preventative action needs to be taken now before the inevitable cure would be too drastic to contemplate".

The United Nations Committee on the Environment has drawn attention to the environmental problems still facing mankind. In 1987 it published a list of the various disasters that have recently occurred. The leak from a pesticide factory in Bhopal, India, killed over 2,000 and blinded and injured over 200,000. The Chernobyl nuclear reactor explosion in the Soviet Union caused nuclear fallout across Europe, the long term effects of which have yet to be fully quantified. A warehouse fire in Switzerland caused agricultural chemical solvents and mercury to flow into the Rhine, killing millions of fish and affecting drinking water. Liquid gas tanks exploded in Mexico City killing 1,000 and making thousands homeless. There are regular environmental crises in Africa triggered by drought and flood in which possibly 1M people have died, yet despite this gloomy catalogue, little real progress has been made.

We were warned in 1974 by chemists here at the University of California, and it has since become clear, that chloro-fluoro carbons (CFCs) released into the air can damage the ozone layer. This layer is high in the atmosphere, between 25 and 50 kilometres above the earth, acting as a shield protecting us from certain frequencies of ultraviolet radiation from the sun that can cause skin cancer. CFCs thin the ozone layer so letting more ultra-violet rays through to the earth's surface. Measurements in 1987 indicated that an ozone hole had formed during the Southern Hemisphere's late Winter and early Spring, above the Antarctic, although the reason for ozone depletion in both Polar regions is still poorly understood. The Montreal Agreement in 1988 committed the EC and 20 other countries to reduce the use of CFCs by 50% by 1999, but is this enough?

It has been estimated that the burning of forests releases two gigatons of carbon dioxide per annum putting additional stress on the earth's atmosphere. The amount of Amazon forest burnt down is estimated to have doubled in the last two years, no less than 64,000 square miles went up in smoke (the Amazon forest covers over 3,000,000 square miles) equivalent to 100 volcanoes in eruption. Satellite photographs taken on 24th August 1987 registered over 8,000 separate fires exceeding one square kilometre in extent. Twelve days later on 5th September a dramatic 10% fall was recorded in the Antarctic ozone layer. Some experts say that massive tree planting may be necessary to remove the increasing carbon dioxide in the earth's atmosphere. In a report published by the US Department of Energy, Gregg Marland, a researcher at Oak Ridge National Laboratory, estimates that new forests covering 7 million square kilometres could absorb all the releases of carbon dioxide from the burning of fossil fuels. That would mean covering an area the size of the US, less Alaska.

A report by the World Resources Institute used grim language to warn of the damage that acid rain is inflicting on forests in Europe and the U.S.A. "A spectre is haunting Europe and North America, a spectre of widespread forest decline," it declared. "The mass mortality of trees observed across large areas of central and eastern Europe over the past 5 years seems to be accelerating." The main pollutants in acid rain are sulphur dioxide and nitrogen oxides, mainly coming from the combustion of fossil fuels in power stations, and from the exhaust fumes of cars. It is estimated that the number of cars in the world has risen from 38M to over 350M in the past 40 years. Lakes have lost their fish as acidity has increased. Acidity in the soil in some forest areas has increased 5-10 fold. In Germany researchers claim that over 50% of the country's trees have been damaged. In Europe, Britain is still a major contributor to air pollution, but it has recently agreed to cut emissions of sulphur dioxide from power stations and heavy industrial plants from 1980 levels by 60%.

One of NASA's top climate experts, Dr. James Hanson, told the US Congress he was 99% certain that the greenhouse effect was responsible for the drought in the mid-West in 1988. CO2 acts like the glass in a greenhouse letting the sun's rays through and trapping in the heat. Burning fossil fuels emits 5.4BN tonnes per year, increasing annually by 100M tonnes. Burning the forest is estimated to add a further 1.5BN tonnes of CO2 per year - the temperature over the last 100 years is said to have increased by 0.5°. If emission of CO2 into the atmosphere is continued unchecked, it is claimed that it might increase world temperatures by 1.5 to 4.5 degrees Celsius by the year 2030, raising sea level by 8-40 inches (20-100 cms.). A rise of 12 inches (30 cms.) would erode beaches along the US Gulf and the Atlantic coast, 36 inches (90 cms.) would flood one-sixth of Egypt's arable land, and make 8M people homeless, and 15M people in Bangladesh could be added to this list. Climate has changed frequently and in great leaps between cold and warm phases during the last 2.5M years. The transition between these 2 phases has sometimes occurred across a few centuries and sometimes merely over a few decades. During the last interglacial period the West Antarctic ice shield had, for example, disappeared and its melting water raised the sea level by 5-7 metres. On a global scale 80% of world population settled within 50 miles of the shore could be affected.

Politics and the Environment

Increasing public concern centers around the environmentalist who comes in many guises. In West Germany and Japan they stage pitched battles with the riot police to prevent the building of nuclear power stations. In the U.S.A. they picket the World Bank to protest about development aid that encourages the burning of tropical rain forests. On the high seas, "Greenpeace" ships roam like latter-day pirates engaging in skirmishes which they are bound to lose, but which will generate world wide publicity. In Britain however, environmentalists tend to be a gentler breed. We call them nature lovers. The cause is supported by the great and the good, the Royal Family, members of the House of Lords, all the way down to the country parson, and the retired. Love of nature is part of the Englishman's character, or so he likes to think. Our "Green lobbies" love grim statistics, "125,000 miles of British hedgerows have been uprooted", "95% of hay meadows have been lost", "80% of chalk downlands have disappeared", "50% of our marshes have been drained", "40% of our natural woodland has been replanted". Membership of those organisations involved in environmental issues now exceeds 3M, over 5% of the total population, which is greater than the membership of any single political party. The Royal Society for the Protection of Birds has recently celebrated its centenary with the aim of doubling its membership to over 1M. The British Labour Party had over 8M votes in the 1987 election but has a party membership of only 300,000.

The Central Electricity Generating Board, a State monopoly about to be privatised, the main polluter in producing sulphur dioxide from power stations, is helping to look after the little tern and the Adonis blue butterfly! Some of our large industrial companies now respond generously to fund environmental projects.

This will not counter the increased political influence of the "Greens" who regularly pass resolutions for "non-violent action" and "civil disobedience" to further their aims. In Britain, born as the Ecology Party in the early 70's, they changed their name to the "Green" Party in 1985 and they now have over 7,000 members. The international heroes of the European movement have been the West German "Greens" who made a spectacular breakthrough to win seats in the Bundestag for the first time in 1983. However, unlike their German counterparts who now have 44 seats in Bonn, the British party can only boast 60 seats on Parish Councils and 3 on District Councils, having put up 122 candidates in the last election, won no seats and received only 1.3% of the vote. The Italian "Greens" won 13 Parliamentary seats at their first attempt at a national election and now have 15 seats. There are well established "Green" parties with parliamentary representation in Sweden, 20 seats; Austria, 8 seats; Belgium, 17; Luxembourg, 4; Switzerland, 9 and Finland 4 seats. In the run-up to the Swedish General Election in August 1988, the Greens were for the first time given television time, opinion polls having regularly shown them topping the 4% threshold required. The Swedish General Election in September 1988 gave a comfortable victory to the Social Democrats, the party polled 43% of the total vote with 156 seats; the Greens arrived in the Swedish Parliament for the first time with 5.5% of the polls compared with 1.5% 3 years ago and 20 seats in Parliament, although they won less than had been expected. One of the reasons for the disparity is that the Continental parties have the benefit of proportional representation. However, in spite of their difficulties the British "Greens" do radiate an unquenchable optimism based on the belief that the tide of history is flowing their way.

A Green Consumer Week in 1988 marked the first efforts to mobilise the power of consumers to influence manufacturers and retailers to offer products that do not harm the environment or our health. It advised boycotting fish fingers containing Icelandic fish, avoiding mahogany toilet seats and the use of bat-friendly treatment fluids for wood preservation; a superstore chain has introduced a new environmentally-friendly logo. As people's values change with increasing affluence, is this a trend which retailers can afford to ignore? At the 1998 Conservative Party Conference there were 73 environment motions on the agenda, and the Prime Minister, The Rt. Hon. Margaret Thatcher, described the protection of the environment and the balance of nature as one of the great challenges of the late 20th century, and said that mankind may have unwittingly begun a massive experiment with the system of this planet itself.

In Spain and Portugal there is increasing resistance to the further planting of Eucalyptus, based on the introduction of non-native species and the effects of large scale monoculture on the environment. In Sweden, a country with 50% of its land area covered by trees, hundreds of plant species are said to be disappearing and may well be on the endangered list within a decade or so. Swedish environmentalists are equally alarmed at the loss of ancient forests which are now being felled at an increasing rate and also concerned about mixed broadleaved conifer forest which is being replaced by pure conifer species. For many people in Sweden the long term costs of intensive forestry in terms of irreparable harm to the environment now seem unacceptable. The problem is that Sweden, like several other countries in the natural coniferous belt of the northern hemisphere, depends heavily upon its exports of forest products to earn foreign currency. Public support for environmental organisations is increasing steadily; there are signs that governments and the large forestry companies are beginning to take them seriously and the concessions made to environmental movements are impressive.

The first signs of expression in Soviet public opinion are beginning to emerge. Public concern increased dramatically in the wake of the Chernobyl nuclear disaster. Environmentalist groups have been among the first to exploit new found freedom of expression to voice criticism about the appalling ecological damage caused by decades of rapid industrialisation and large scale construction projects. At the opening of the Communist Party Conference in 1988, Mr. Gorbachev spoke of the need to protect the environment and ensure rational use of natural resources. A delegate from Komi in the far north of Russia complained of ruthless felling of trees to meet timber demand, and suggested that forests faced extinction within the next 10-20 years. Some element of environmental protection may emerge by encouraging decentralisation of decision-making to local level.

The world conservation strategy, with its aim of maintaining essential ecological processes, preserving genetic diversity and ensuring sustainable utilisation of species and ecosystems, has had an accumulative effect on global issues. The incidence of 'acid rain', damaging forests and eliminating fish life from some takes and waterways, has been regarded by many scientists as the world's most serious problem requiring global cooperation and changes in industrialisation. It may well be overtaken by the threat of ozone depletion in the atmosphere. The use of pesticides, herbicides, and fungicides, is a further issue. Similarly, concern about toxic waste has been focused on the disposal of radioactive nuclear material. No day passes without some reference in the media to these very issues and general apprehension across the world is accelerating, reaching all countries.

It was impossible for anyone to be truly isolated from the effects of the unprecedented change resulting from uncertain oil prices and the world recession in the seventies. The management of change will therefore remain a major task facing individuals, organisations and Governments during the next decade. Changes in science, technology and attitudes towards conservation and the environment, will have an increasing political impact in the "Green Vote". In meeting this challenge we must face the inevitable reality of the growing interdependence of today's world. The public, mainly through the medium of television and radio, is now much more aware of these issues and governments, some begrudgingly, are being spurred into action. In an age of increasing education and instant communications the tide of public opinion will continue to flow in favour of environmental protection. We expect a great deal from those among the younger generation who will soon carry the major political responsibility. We hope that their insistence in saving this world for people will overcome bureaucratic regulations and constraints and political differences. Substantial progress in developing countries will be required if we are to make the change to a reasonably stable world sustaining seven to nine billion people in the next century (2025).

World Economics

In an address to the Royal Geographical Society on Third World Development a senior World Bank Executive stated: "world economics should be rethought in order to incorporate the concept of 'sustainable' long-term use of natural resources - using resources such as forests in a way that did not destroy them for future generations."

The global issues relating to the environment are greatly aggravated by the international debt crisis which squeezes Third World nations to intensify exploitation in their vain attempt to meet their repayment schedules. International cooperation is a precondition for effective action since rich countries will otherwise seek to impose restrictive policies on poor countries without throwing them any alternative lifeline, therefore alongside the crisis of the environment, runs the crisis of debt and under both there runs the crisis of democracy. Whether you are a politician, a businessman, a scientist, an economist, a trade unionist, or indeed a forester like myself, we must all share a common apprehension for the times in which we live. As consumers of the world's major forest resources on a massive scale all of us in the developed world inevitably bear the greater responsibility for the future of mankind.

The Future of the Tropical Rain Forests

Tropical Rain Forests are the world's richest biological system. They are a home for almost half the wild animals, plants, birds and insects known. 25-40% of all modern medicines are derived directly from plants from areas such as the tropical forests - a market in the US worth $10BN (£5.6BN) per annum. These forests are the home for at least 3-5M species. Costa Rica, a tiny country one-fifth the size of Great Britain, alone possesses 8,000 plant species compared with only 1,443 in Britain. More and more tropical moist forest species are emerging as economically valuable. Castanospermum and related species are found mainly in the tropics and show some promise in the hunt for a treatment to combat the AIDS virus. These species are also essential to the economic and social well being of rural people in developing tropical countries, yet they are being degraded and destroyed at an increasing and alarming rate. Properly used and managed, the tropical forests constitute a massive potential source of energy, a powerful tool in the fight to end hunger, a strong basis for generating economic wealth and social development, and a storehouse of genetic resources to meet future needs. World wide at least 40% of these forests have now been lost in the last 30 years. Of the world forest cover extending to more than 4,000M hectares or one-third of the earth's land surface, 58% is in the developing countries and is mostly tropical. Tropical rain forests in a closed forest condition have evolved over many thousands of years and now cover 900M hectares. Although 70 countries have these forests, over half the area is found in just three - Brazil 33%, Zaire 10%, and Indonesia 10%.

The UK Tropical Timber Trade claims that a reduction in the hardwood trade worldwide will do little to solve the problem of forest destruction and suggests that the basic problem is population increase and the insatiable demand for land for food production. In Indonesia where 80% of the extracted wood is fuelwood only 16% is processed from which 7M cu.m. of sawn timber is produced, only 2M cu.m. is exported out of a total harvest of 149M cu.m. Export earnings estimated at US$331M (£184M) are essential for the economic wellbeing of the country. Each year 7.5M hectares of closed forest and 3.8M hectares of open forest are cleared in the tropics, in total equivalent to clearing all of California's forest every eighteen months. Nearly half these forests are cleared to make way for shifting cultivation by landless farmers operating a system of slash and burn. More than half the population of the developing world, some 2,800M people, will either be short of fuelwood or will be caught in this destructive cycle of deforestation, fuelwood scarcity, poverty and malnutrition. Who is to blame? We are all to blame in one way or another. In industrial countries consumer demand for rain forest resources and inappropriate aid programmes compound the problems caused by entrenched poverty, unequal land distribution, corruption and rising populations in the tropics. The rain forests will only be saved if shifting cultivation can be contained by less destructive land use and agro-forestry systems and at least 10%, that is over 100M hectares, is protected in reserves. It has been suggested that the protection of the rain forests will cost $5.4BN (£3BN) over a 10-year period.

International cooperation, through the International Tropical Timber Agreement 1983, came into force on 1st April 1985. On the 29th July 1986 the International Tropical Timber Council (ITTC) decided to locate its headquarters in Yokahama and appointed Dr. Freezailah bin Che Yeom (Malaysia) the first Executive Director. The organisation became operational at its headquarters in January 1987. The main objective is to provide a forum for consultation and cooperation between tropical timber producing and consuming countries under programmes of sustainable utilisation of tropical forest products. The agreement also has the objective to work for the conservation of the tropical forests and their genetic resources and for the maintenance of the ecological balance in tropical forest regions. ITTO has 42 members, 18 of which are producers of tropical timber and together have 70% of closed tropical forest and account for 80% of tropical log production. The problem, well illustrated in the Tropical Forestry Action Plan prepared by FAO in cooperation with the World Resources Institute, World Bank and the United Nations Development Programme, is how to preserve this unique resource while meeting, so far as possible, expanding human demands. It is an unprecedented initiative to foster more regional utilisation through wise management and conservation. Less than 3 years after it was launched it is being used in over 50 tropical countries to develop national forestry policies and strategies and to identify priorities for action whilst in 1987 the donor community doubled the funds allocated to these efforts to over $1BN (£0.6BN).

Mr. Bob Hasan, Chairman of Indonesia's Wood Panel Association, has proposed that Indonesia should switch from raw material supply from natural forests to plantations. Indonesia is the world's largest supplier of tropical wood products and accounts for 80% of the world's plywood trade. The country's forests, which contain the world's richest stands of commercial timber, were estimated at 114M hectares in 1981 - 10% of the world's remaining rain forest. Only the Amazon Basin of Brazil is more extensive. The UN estimates that Indonesia is losing forests at the rate of 1M hectares per year, more than the UK has planted in the 40 years since the end of the Second World War. To help take the pressure off the natural forest, Indonesia's plantation programme targets new plantations of 4.4M hectares by the year 2000 at a cost of $4BN (£2.2BN).

However to date only 30,000 hectares have been established. Some might claim that to replace scarce valuable rain forest with fast growing species would be like selling your Rolls Royce to get 5 VWs! The UK Timber Trade Federation in September 1988 proposed a surcharge on tropical timber imported into Britain to raise $32M (£17.8M) a year to help save the rain forests in the producer countries. In 1987 tropical wood accounted for only $671M (£373M) of British imports; it is made up of sawn timber, plywood and veneers - that compares with non-tropical timbers that accounted for $2.5BN (£1.4BN) in 1987.

How do we compensate tropical countries prepared to take large areas of forest out of circulation, thus foregoing revenue and other benefits? How can we assist developing countries to meet their domestic fuelwood demand from sources other than rain forests? How can we finance the rapid expansion of compensatory plantations of fast-growing industrial and fuelwood species? Can we win the support of the world's financial centres - New York, London, Tokyo, etc. - to fund super-tree plantations? What alternatives exist for the expansion of the agricultural frontier when over 200M people live in the tropical rain forest areas and populations are expanding at 3% per annum? The Tropical Forestry Action Plan is praiseworthy; it is the centrepiece of a new coordinated approach to solving a crisis. It offers the opportunity to improve aid coordination and to stimulate institutional reforms and new initiatives for a concerted global effort. What is needed is widespread political commitment to strategies for re-afforestation and forest management, and here the role of the mass media in informing and influencing public opinion on matters of scientific and technological interest plays an important role. ITTO's current budget runs to about $US3M (£1.7M) of which $2M (£1.1M) comes from Japan, $1M (£0.5M) from Switzerland, $600,000 (£333,333) from the Netherlands and $11,000 (£6,111) from non-Governmental organisations. The USA contributed only $6,000 (£3,333) in 1987 and increased this to $53,000 (£29,444) in 1988, but this is still only half of what is considered a full funding commitment. In 1988 the World Wide Fund for Nature launched a campaign to raise $US4M (£2.2M) and match official funding to save the Korup forest in the Cameroons, Africa's oldest rain forest over 30M years old with over 400 tree species and exceeding the size of Greater London.

Forestry sector review missions have been completed for the Cameroons, the Dominican Republic, Ivory Coast, Ghana, Guinea and Peru, and in 1987 31 projects were submitted, 16 projects were approved and 12 are in various stages of implementation.

The Future of the Boreal Forest

The broad band of coniferous forest encircling the globe between about 45° and 70° north, stretching from Canada in the west through Scandinavia to Russia in the east, and covering 1,500,000M hectares is known as the Boreal Coniferous Forest. Although Sweden accounts for only about 1.5% of the total boreal forest zone it has a high level of forest per capita - 2.68 hectares - and therefore the controversy over forestry practices in Sweden is important in an international context. In many ways Sweden is ahead of other nations in its intensification of forest use, having had a much longer history of commercial forestry. What is happening in Sweden today could be a foretaste of what will happen to the boreal forest as a whole in the next century. The status of coniferous forests in the different countries of the boreal zone varies greatly and is a reflection of both their history and their geography. In Sweden the Government recognised the problem of deforestation at the end of the nineteenth century and introduced tough new laws obliging foresters to replace the trees they felled. State involvement is not confined to forest lands but also extends to the paper and pulp industries. In the 1970's the Swedish Government began a drastic programme of modernisation in these long-established industries which left them leaner and fitter to compete in the world market.

The situation is very different in Canada where large scale logging began only in the early nineteenth century and where the forests are far more extensive. Canada's forest products industry, having recently returned to profitability after an extended spell in the financial doldrums, is facing increasingly vigorous attacks from environmentalists. The main areas of concern include the findings of an independent enquiry that accuses the forest industry of poor forest management and high volumes of wastage. There is opposition by environmentalists to the construction of a logging road into British Columbia's Steen River Valley where Fletcher Challenge have been seeking to obtain access since the early 1970's. A Government report has also urged nine kraft pulp mills in the Province of Ontario to act quickly to cut their daily discharge of 33 tonnes of chlorinated chemical contaminants. Finally "Greenpeace", the environmental group, is reported to be stepping up pressure to eliminate dioxins from pulp mill effluents - "The levels of dioxin being found near pulp mills suggest a public health emergency in North America".

Canada is now reaching the sort of crisis point that the Swedes faced a century ago with the depletion of the most easily accessible regions. The Canadian approach to forestry has always been to abandon felled areas and trust in natural regeneration. This is a method that rarely works in the boreal zone unless regeneration is regarded as a very long term process. Only in the past decade or so has Canada begun to recognise the need to replant and manage its forest resource, and even now its efforts at silviculture are considered inadequate by many foresters. It is to be hoped that the 15% timber export tax introduced in 1987 will be reinvested in forest renewal. Because of the pressure on easily accessible forest areas, conservationists in Canada fear that they will eat into the rich natural habitats of the national parks.

The U.S. has a much smaller share of the boreal forest zone than Canada yet many of the issues being raised there are the same. Of the other Western Nations Finland has the best record of combining modern forestry with conservation, although it too has problems. The forest conditions in Finland are generally poor with 66% of its land area under forest and wood is now both scarce and expensive. Raw materials make up 70% of the cost of pulp produced in Finland compared with just 33% in Canada. The Finnish Government has responded to the challenge of making its forest pay by directing the paper industry towards much higher quality papers while the greater added value compensates for the high costs of raw materials. They have also made large investments in the U.K. wood processing industry based on an increasing domestic wood resource, in order to establish their long term markets.

The largest share of the boreal forest zone lies in the Soviet Union which has nearly 8M square kilometres of forest. The Russians have always felt that the forest is inexhaustible, their forestry practices reflect this view, 30% to 50% of the timber cut is wasted. Several regions that were heavily forested until recently are now denuded including Buryatia to the cast of Lake Baikal. The traditional Russian approach to forestry does not treat the timber as a renewable resource, forestry workers set up temporary bases and remove all the worthwhile timber and then move on, not expecting to return to the same area, so there is little concern for conservation. The State, committed to forestry, recognises the need for more careful exploitation of the forestry resource but there is at present a large gap between theory and practice. One outcome of Mikhail Gorbachev's "perestroika" may be to bring logging under greater control!

Some observers say that the current imbalance in wood and wood products' supply and demand in the Peoples' Republic of China will not only be crucial in the country's struggle for economic development but may also affect the pattern of trade in forest products throughout the world. It is now clear that reafforestation claims were confused and exaggerated and that overall survival in many large planting schemes was probably no higher than 10-20%. A recent article in the China Economic Daily foresees continuing imbalance of supply and demand to the year 2040, and well beyond that date, unless strict measures are adopted to curb felling and to protect newly planted areas. It indicates a decline in forest cover from 12.7% in 1978 to 12% in 1981 and a fall in reserves of standing timber of 850M cu.m. Within ten years or so two-thirds of all forestry regions in China will have no more production capacity. With an anticipated rise in per capita consumption of forest products from 0.056 cu.m. in 1958 to 0.34 cu.m. by 1990, there would appear to be an increasing reliance on wood imports.

The most obvious method of easing the pressure on the world's forests, in addition to more planting, would be a worldwide increase in the price of timber products coupled with a greater degree of forest land management on a macro-basis ensuring the protection of large and small island forest areas linked by managed corridors of uncut forest particularly following water courses. This practice may go some way towards bringing commercial forest management and conservation more closely together for the future of mankind.

Future World Demand for Wood

In 1983 world wood removals exceeded some 3,000M cu.m. for the first time. Fuelwood accounted for just over half of the total, with the remainder being industrial wood converted into lumber, plywood, paper and other products. The developing world consumes 75% of all fuelwood while the developed nations take 85% of all industrial wood removals although the vast majority of wood harvested from natural forests is consumed in the country of origin. Wood in the form of logs, lumber and other timber products is one of the most important primary commodities in international trade exceeding $100BN (£55.6BN) per annum (imports and exports), about 3% of total world trade. Only about $US8BN (£4.4BN) of this originates in developing countries. Their advantage lies in their ability to produce wood quickly and at about one-third of the cost of the industrial countries. However, true comparative advantage depends on the location in relation to the market. The EC and Japan will continue to be major deficit areas and may well be joined by China before the end of the century.

A number of authoritative forecasts including those provided by the U.N. Food & Agricultural Organisation (FAO) suggest that by the year 2000 wood demand would be either approaching or slightly exceeding the level of maximum sustainable removals and conclude that there will be considerable strains on supplies. Quality softwoods will be in short supply from natural forests and there will be a swing to hardwoods in the smallwood market. Tropical deforestation mainly resulting from shifting cultivation and rising industrial wood needs in the developed nations will limit the volume of more highly priced tropical hardwoods available to the world market. Environmental groups in Indonesia claim that every year there is a loss of about 1M hectares of forest. Leading importers, such as Western Europe and Japan, will be especially vulnerable to shortages and increased prices in these circumstances. A number of major uncertainties about future demand fog the crystal ball. When, if ever, will the paperless office arrive and cause a major structural change in the pattern of consumption of pulp and paper products? Will this be offset by the development of the chemical uses of wood? What effect will new developments in housing construction have on demand for solid wood products? How rapidly will the one billion citizens of the Peoples' Republic of China increase their appetite for industrial wood imports? What will happen to the level of Japanese imports which currently accounts for 16% of all forest product imports?

The FAO European Forestry Commission predicts that the consumption of timber products will increase at a rate of between 0.5% and 3% per annum to the year 2000 with the strongest growth in the paper and board sectors and with Europe remaining a large net importer. In a World Bank Forestry Study by Ewing and Chalk, published in May 1988, continued growth in the demand for forest products was forecast, particularly in the developing countries where major investments in new production capacity would be required. The demand for sawnwood has generally grown at less than the overall rate of economic growth in the past, but the demand for wood-based panels and paper has exceeded economic growth and this is expected to continue. Projections imply an average growth rate of 1% for sawnwood, 2.3% for wood based panels and 2.9% for paper and paper board. To build new capacity to provide this additional production is estimated to require an average annual investment of some US$15BN (8.3BN) of which about 90% will be for pulp and paper. The price of newsprint continued to rise in 1988 and is set to increase further on 1 March of this year to $800 (£445) a tonne. Consumption in the UK rose by about 7%, well above the average growth rate of 2.5%. Demand was strong in North America with the Olympic Games and the Presidential Election helping. Three newsprint mills are proposed in France each with Nordic involvement. It is for the experts to fit the answers to these questions into future demand scenarios for the different product groups and markets, but whatever the result it can be assumed that in spite of rising self-sufficiency in Britain and Europe we will still fall so far short of total demand that the changes in any of these areas will have little impact on the domestic production from existing forest areas and Britain in particular will remain a large market for exporters.

Prospects for World Wood Supplies

The prospects for future industrial wood supplies will be just as uncertain as those for demand. Assessing the extent of potentially extractable industrial wood supplies is fraught with difficulties, especially when it comes to quantifying such factors as forest decline, accessibility, location of forests relative to markets and transport routes, the steepness of mountain slopes, the quality of the wood resources contained in forests and the withdrawal of areas from production for reasons of wilderness and conservation. There will probably be no major new sources of wood supplies available from Northern hemisphere natural temperate forests in the foreseeable future. About 21% of the world's forest resource is coniferous, supplying about 70% of world industrial timber. The USSR has 57% of all closed conifer forests in the world and although theoretically it could sustain a considerable increase in removals, difficulties in extraction and lack of infrastructure and increasing internal demand make it unlikely that supplies from the distant forests of Siberia will substantially increase in the near future. The USA, with 10% of the world's closed forests, has had significant areas of publicly owned forests taken out of productive use and classified as wilderness areas and is increasingly dependent on timber supplies from the Southern forests. The same could possibly happen in Canada and other countries. There is, however, a prospect of new supplies coming on stream from the maturing fast-growing plantations that thrive in the warmer regions of the Southern hemisphere.

Intensive forest plantations, estimated to cover less than 100M hectares out of a total commercial forest area of 2,864M hectares, have been generally considered to have a major role in future world wood production because the constant high temperatures and uniform rainfall of the humid tropics provide excellent tree growing conditions. Growth rates for plantations can be ten times those of managed natural tropical moist forests and so the focus in recent decades has been on expanding the area of plantations rather than on introducing natural forest management in the humid tropics. It is argued that concentrating timber production in relatively small areas of plantations is economically more efficient and could help indirectly to reduce deforestation rates by reducing the access of farmers to previously uncleared natural forests. A study by Grainger in 1988, covering thirty countries, suggested that high grade hardwood plantations covered an area of 1.3M hectares in 1980 but even so accounted for less than one-fifth of the total area of tropical forest plantations. He claimed that production from these plantations would not be significant until 1996 when it would reach 3.5M cu.m. per annum, but even by the year 2001 it would still be less than 3% of the 1980 removals of tropical hardwoods from natural forests. These projections indicate that the hardwood plantations will supplement, but not replace, removals from natural tropical moist forests.

Man-made plantations could lead to a diversification of world wood supplies, involving countries like New Zealand, Chile, Brazil and South Africa which have invested heavily in plantations in the last few decades. The boom in Chile's forestry industry suggests that the sector will be one of the most important in the Chilean economy in the future. In 1987 forestry exports reached $530M (£294M), up from $370M (£206M) in 1986 and by the year 2000 could approach $1BN (£0.56BN). Chile's forestry industry will need between $3BN (£1.7BN) and $3.5BN (£1.9BN) in new investments by the end of the century just to process the timber expected to be cut by that date. About $1.7BN (£0.9BN) has already been committed, mostly to cellulose projects. The Chileans intend moving towards more value added exports such as furniture, packing cases and mouldings. Currently about 75,000 hectares are expected to be reafforested annually and the country should have 1.8M hectares planted by the year 2000. Chile also has 7.6M hectares of native forest which has been made available for exploitation. As much as 16% of the country's territory could produce timber. Chilean environmentalists have decried the destruction of the country's beautiful native forests. Chile has exported both pulpwood and woodchips to Scandinavian countries at low prices. However, it is still questionable whether fast-growing tropical plantations, more vulnerable to disease, will be able to provide wood of sufficient quality and quantity to satisfy the needs of the world market and whether the investment will be available in what some regard as politically high risk areas. A higher level of protection of forests against fire, pests and diseases and windthrow will be vital if removals are not to make a significant impact on long term world supplies. Any country which intends to create new forest resources needs to ensure that they will be competitive in the global market.

Time is not on our side. Industrial countries can no longer take the supplies of timber from the world's natural forests for granted. Developing nations can no longer regard their forests as a source of unlimited wealth that can be tapped at will to meet short-term cash needs without considerable risk to the ecological and social benefits which they also provide. I therefore want to say something that dwarfs party politics and matches the problems of nuclear disarmament and even hunger, and that is "tree planting". Each year throughout the world 12M hectares of forest are cleared for agriculture and fuelwood and only 1M hectares are being replanted. I want to see more tree planting across the world and I want to see forest management and not forest exploitation. We must therefore seek agreement with political leaders, the wood industry, and the environmentalists on tree planting. We all want more of it but there is little agreement on how it is to be achieved and how we can attract investment funds from the public and private sectors. I understand all of the feelings and anxieties involved but the fundamental question for us all wherever we live is how we can sustain both the industrial and environmental benefits which our forests provide for generations yet to come.

The European Community (EC)

The Community traces its origin to the Treaty of Paris signed on the 18th April 1951 to create a European Coal and Steel Community (ECSC). The experiment proved successful and Member States decided to deepen it and extend it to embrace their entire economies. On the 25th March 1957 they signed the two Treaties of Rome, setting up the European Community (EC) and the European Atomic Energy Community (EAEC). The objective of the Treaty of Rome now established over 30 years ago, was to create a single integrated European economy, but despite the removal of Customs duties between Member States by 1966, national markets have been fragmented. "The Single Act" signed in February 1986 and submitted to national parliaments for ratification, amends and complements these Treaties. It came into force on 1st January 1987 and spells out certain objectives for the Community: completion of the European internal market, and the creation by 1992 of a free trade area without frontiers, with the ultimate aim of moving towards economic and monetary union. At the Brussels Summit of 1985 the European Commission was instructed to draw up a detailed programme with a specific timetable for "The Single Market". The Commission Paper, published in 1985, identified 300 actions which would need to be taken. By early 1988 the Commission had tabled some two-thirds of the measures required and over 70 had been adopted by the Council and thus were Community law. By the end of 1988 nearly all the main proposals had been tabled. In order to facilitate the legislative programme, Governments agreed under the Single European Act to amend the voting provisions contained in the Treaty of Rome. It is the Council of Ministers, one for each Member State, which ultimately decides Community policy. Decisions could now be taken on a qualified majority basis on most single market issues. Under the system each Member State has a weighted number of votes depending on its size, and certain issues are exempt from qualified majority voting, such as VAT, where unanimity is still required. The Community now has 12 Member States and 321M citizens.

EC Structure

There are six different institutions serving three separate communities.

  1. The Commission - the Executive

    The Commission is composed of at least 1 citizen from each Member State, a Commissioner. At present it consists of 17 members appointed for 4 years. The new team of Commissioners with nine newcomers took up office on 1st January 1989. They are supported by 22 Directorates-General with the UK, France, West Germany and Italy having four each, Spain has two and the other member states one each. The Executive ensures that Community rules and procedures are observed and is expected both to propose measures and policies and also to oversee their implementation which makes the Commission unique among the world's bureaucracies. The Commission has an administrative staff, based mainly in Brussels, of approximately 11,000 officials divided between the 22 Directorates-General. One quarter of the Commission's personnel is employed on the linguistic work necessary to ensure coordination.

  2. The Council of Ministers - the Decision Maker

    The Council meets in Brussels and consists of Ministers from Member State Governments. Each Government acts as President of the Council for 6 months in rotation, participants in the meetings change according to the Agenda. Meetings of the European Council take place two or three times a year. They bring together Heads of Government and the President of the EC Commission.

  3. The European Parliament - Public Participation

    The first direct elections took place in June 1979 with members now elected every 5 years by universal suffrage. The European Parliament, housed in the Palace of Europe in Strasbourg, represents 321M citizens and has 518 members, 81 from each of the 4 most populous countries, 60 from Spain, 25 from the Netherlands, 24 from Belgium, 24 from Greece, 24 from Portugal, 16 from Denmark, 15 from Ireland and 6 from Luxembourg. Members form their own political groups within Parliament, there being 172 Socialists, 119 Christian Democrats, 63 European Democrats, etc. Its powers are fairly limited, although it has the power to dismiss the Commission by a two-thirds majority and is invited to give an opinion on Commission proposals, and reject the Budget. The 1988 Budget was 44BN Ecus ($50BN), equivalent to less than 3% of the total expenditure incurred by national governments. It is financed from the Community's own resources with an income from Customs Duties, agricultural levies on imports from the rest of the world, and an assessed Value Added Tax collected from Member States with a maximum of 1.4%. It is proposed that this should be enhanced this year by a levy on the assessed GNP of Member States.

    The legislative instruments of the Community have the force of law and apply directly to all Community citizens. These measures are called:

    "Regulations" when they apply directly;

    "Decisions" when they are binding only on the Member States to whom they are addressed;

    "Directives" which are binding as to their objectives, but are translated by the Member States into their own legislation: many derogations exist;

    "Recommendations" which are not binding.

    The ultimate goal is the creation in time of a genuine European Union and the target date for achieving the Single Market is 1992 by which time we shall all have an EC Passport and, in 1993, a Channel Tunnel!

  4. The Court of Justice - the Servant of Community Law

    The Court ensures that Community and National Laws are observed and passes judgement on the interpretation of Community law. The Commission decided in December 1984 that 40 producers, mainly in the USA, Canada, Sweden, Finland and Norway, were fixing prices. In September 1988 it ruled that the North American and Scandinavian pulp producers had rightly been imposed fines for cartel fixing in 1984. The Court confirmed that the Commission's policy of applying the EC competition rules in a coherent, non-discriminatory manner to restrictive practices, wherever initiated, that have an impact on competitive conditions and trade within the Community, would be supported.

  5. The Court of Auditors - the Watchdog

    Since 1977 it has carried out the external audit of the General Community Budget. The financial management of the Community's food mountain was sharply criticised in October 1988 by the Court of Auditors. It highlighted "inadequate controls and byzantine accounting procedures for keeping track of costs." The Court concluded that "it is technically impossible to arrive at any audit opinion". About 20-25% of the EC's farm budget is eaten up by administrative costs - 5BN Ecus ($4.4BN) in 1986.

  6. The Economic and Social Committee - the Representative Advisory Committee

    The Committee, whose members are appointed, represents a cross-section of interests in the economy as a whole covering employers, trade unionists, etc., and its function is to give an opinion on Commission proposals.

    The Parliamentary chamber and many committee rooms are lined with glass-fronted boxes in which the simultaneous interpreters sit to perform their magic. It is a very special skill that enables someone to listen to a speech in one language and to repeat it simultaneously in another. Not that they always get it right, a well-known phrase in one language can prove a problem in another. A British MEP described a Government promise of more money as "pie in the sky", French listeners were puzzled when this was translated literally as "tarte an ciel". Many parliamentary documents have to be translated into every other community language. This means an army of translators as well as interpreters is needed. To avoid confusion documents are colour coded, if it is a pretty mauve colour it is English! Co-ordination is therefore far from easy and there is every opportunity for misunderstandings!

The Single Market - 1992

The decision has been taken by EC leaders to create the single market by the end of 1992. The transition to a single market will involve a difficult adjustment process. Some job losses will be inevitable in the short term as industries are rationalised and restructured in the face of stiffer international competition. To exploit all the potential gains the Community must also have a strong competition policy and achieve agreement rapidly among its members on coordinated macro-economic policies designed to stimulate growth and demand. It is estimated in the Cecchini Study that completion of a "single market" could enlarge the EC's total gross domestic product by about 4.5% and increase employment by 1.75M over the medium term.

Simply removing market barriers is estimated to produce gains of 70BN Ecus ($62BN) or 2.5% of the gross domestic product of the seven largest EC countries. However, the challenge of implementing the 300 directives outlined in the EC's 1985 White Paper, with sufficient speed and conviction will require a huge degree of political compatibility which so far has not been apparent.

Mrs. Margaret Thatcher made a major speech for the opening ceremony of the 39th Academic Year of the College of Europe in Bruges in September 1988. She explained that British destiny is in Europe as part of the Community but that the Community was not an end in itself, not an institutional device to be constantly modified according to the dictates of some abstract dealing. She set out some guiding principles for the future. "Willing and active cooperation between independent Sovereign States is the best way to build a successful European Community. To try to suppress nationhood and concentrate the power at the centre of a European conglomerate would be highly damaging and would jeopardise the objectives we seek to achieve." "Central planning and detailed control don't work...personal endeavour and initiative do.... Europe should not be protectionist. The world economy requires us to continue the process of removing barriers to trade." However, Mr. Jacques Delors, the European Commission President forecast that 80% of decisions now taken nationally will have switched to the European level by the middle of the next decade. In the current war of words over whether Europe after 1992 will fall prey to protectionism or become a haven of free trade in an otherwise haughty world, Article 110 of the Treaty of Rome obliges the EC to contribute to the development of a liberal world trading system.

Addressing the British Wood Pulp Association in November, 1988, Sir John Hoskyns, Director General of the Institute of Directors, warned that "The 1992 programme, in its present form, has the making of a real disaster. The British are constantly urged to stop being so difficult and agree as quickly as possible to everything 'or the ship will sail without us'. But just suppose that, chastened by our own post-war follies, we are right and our Community partners are wrong. Should we still be rushing to catch the Titanic, for fear of being considered rude?"

The Problem of Agricultural Surpluses

Eighty-five percent of the global population's vegetable food demands are met by only 8 species of plants. There is over-production on a global basis with many trading nations facing the problem of food surpluses. The UK National Consumer Council report on the Common Agricultural Policy (CAP) stated that in Greece nearly 40% of the weekly house bill goes on food compared with an EC average of 18%. In the 1988 Community Budget the cost of CAP was 27BN Ecus ($24BN), What purpose does the agricultural industry of the EC serve? The stay-at-home man from Mars might guess that it exists to provide consumers with food of the highest possible quality at the lowest possible price. However, a Martian visiting Europe would be forced to conclude that it exists to produce food nobody wants at prices many cannot afford and then to dump the resulting surpluses on world markets to the discomfiture of the EC's friends and the pleasure of its enemies. The annual subsidy per farm to the largest 8% of EC farms is, according to the NCC's figures, 25,000 Ecus ($28,000), or 10 times as great as the subsidy per farm to the smallest 30% of the farms on whose behalf so many tears are shed.

The scale of adjustment facing the European Community by the reform of the Common Agricultural Policy which has absorbed two-thirds of the total Community budget, has become a major issue and even a threat to its very existence. From time to time since the early 1970's the CAP has produced surpluses. On several occasions temporary world shortages emerged and new or enlarged export outlets enabled stocks to be reduced. Sales during 1988 to the USSR were expected to reach 200,000 tonnes beef and 200,000 tonnes butter at low prices. The very success of a rapidly developing agricultural technology has spread around the world and the scope of further transforming traditional agricultural practices remains considerable. New developments will inevitably come on stream and further increase production on less land. As an example I will only deal with one product, that of cereals. The Community produced 160M tonnes of cereals from the 1985 crop, which, although good, was not a record crop. Closing "intervention stocks" were some 17M tonnes. Exports reached 26M tonnes and the whole cost of running the cereals regime was around 3.2BN Ecus ($2.8BN) in 1986. These figures have continued to increase; per hectare yield trends are upwards and growing at around 2% per annum. Some believe the arrival of hybrid wheats will give yields an upward boost but even without this the continuing adoption by more farmers, of techniques now used by the high performers will be enough to keep the trend rising for several years. The crunch question, concerns the scale of adjustment needed to contain stocks and expenditure. If yields continue to grow at 2% per annum then by the mid-1990's the cereals area would need to be cut by nearly 20%. Accepting that a wide range of possible adjustments could be required, a cut of 20% implies that around 1M hectares of land should be removed from cereal farming in Britain during the next decade.

The EC is reversing the trend of recent years in aiming to cut its planned 1989 Budget by more than 1BN Ecus ($0.9BN) because of a poor Russian harvest and rising world food prices. Of course farm subsidies are by no means confined to the U.K. nor is agricultural protection uniquely a way of life in the European Community. The levels of subsidies to food producers in Japan are notorious where they ban imports of rice from California and yet local rice sells at eight times the world price. Still more baffling are the subsidies paid to the United States with its huge natural advantages as a food producer. Economists claim that farmers are able to bid up the price of labour and capital and in particular to inflate the price of land. However, worldwide dismantling of farm subsidies can only be negotiated gradually through diplomatic machinery, but the inevitable result will be to take land out of farming with tree planting being a major alternative use of some of this land.

Forestry in the EC

In world terms Europe has a relatively small area of forest with 22% cover of closed forest and 1.2% of the world's forest. The forest area per capita is low, being approximately 0.17 hectares per head, compared with a US figure of 0.81 hectares.


Member State Population (million) Total land area (million ha) Percent land under forestry Timber production (million m3) Estimated percent self sufficiency in timber
United Kingdom 56.4 24.1 10 5.1 12
Belgium/Luxemburg 9.9 3.3 23 3.1 32
Denmark 5.1 4.2 11 2.7 40
France 54.7 54.3 28 39.0 81
West Germany 64.1 24.3 30 30.7 59
Greece 9.8 12.9 45 2.7 57
Ireland 3.5 6.9 6 1.3 56
Italy 56.8 30.1 27 9.4 28
Netherlands 14.4 3.4 10 1.1 11
Portugal 9.9 8.6 35 9.3 366
Spain 38.2 49.5 25 13.7 90
EEC 322.8 222.0 25 118.0 52

The forest area is 43M hectares with 58% being broadleaved species and the remaining 42% being coniferous. Out of a total population of 321M, 6M are woodland owners, many forests being small and fragmented; the industry employs over 3M people.

The proportion of private forestlands, averaging 58%, varies greatly throughout member countries with 27% and 21% respectively in Greece and Ireland and 72% and 65% in France and Germany. In Britain it is spread equally.

The EC imports approximately 50% of its needs for timber and wood products at considerable cost in foreign currency, estimated at 15-20M Ecus ($13-17M).

In the USA, where there are large areas of natural forest, the industry has traditionally been located close to the forest resource to minimise the wood supply cost. This gives it a cost advantage for products such as pulp and newsprint which the smaller, more fragmented industries in most European countries find difficult to match. It becomes necessary for them to add value and offer more local customer services to remain competitive in a world market. Recent experience in the UK has seen investment in the wood-using industries, with the latest technology operating in one of the world's largest markets for timber and wood products attracted by local wood supplies from coniferous plantations established over the last 50 years. Japan, one of the largest importing nations in the world, also has an industry based on added value and increasingly meets its needs from offshore investment.

The main obstacles to intra-EC trade are cultural, traditional and climatic. However national regulations and technical certification also create barriers. Harmonisation of timber codes and lesser transport distances may reduce overall costs and make the industry more competitive.

There is no common EC forestry policy as exists in agriculture, but the problems of agricultural surpluses have drawn attention to the need for forestry strategies relating to rural areas, and EC initiatives are directed towards creating new industrial opportunities and providing jobs in rural areas as well as gainfully employing land no longer needed for farming. It is recognised that rural depopulation by the decline in numbers of the 11M EC farmers who are over 55 years of age will result in the erosion of local communities. Recent proposals with regard to rural areas include creating a network of rural development agencies to implement regional strategy. How many farmers and how much land will come out of fanning in the next decade remain open questions.

The EC directive on environmental impact assessments introduced on 1st July 1988 provides that, for major projects, information about the environmental impact must be provided by the potential developer and taken into account. This applies to all initial afforestation schemes where this may lead to adverse ecological changes. It will be administered in Britain by the UK Forestry Commission as part of the Woodland Grant Scheme. The Community strategy and action programme in the Forestry Sector was proposed to Council in 1988 for implementation in 1989-1992.

Implications for Britain

After an exhaustive Government review of forestry in 1980-81 the case for forestry was accepted, based on reducing the high cost of net imports, exceeding US$1OBN (£5.6BN) p.a., 6.1% of Britain's import bill, the relatively low area of land under forest (less than 10%), the potential for tree growth in U.K. (being twice that for the natural conifer belt), and the provision of essential jobs in rural areas. Forestry already employs over 43,000 people directly with a further 500,000 in industries using imported timber and forest products. An expansion of forestry also provides the opportunity to develop a permanent wealth-creating industry competitive by world standards. The UK Forestry Act 1981 committed the Government to an expansion of Britain's forests and also enabled the Minister to sell state forestlands for the first time. A planting target of 30,000 hectares was set, which would be predominantly the responsibility of the private sector. With the encouragement of grants and fiscal incentives, since that time new planting has risen over 20% from 20,300 hectares to 24,700 hectares in 1987 and by 1988 the proportion planted by the private sector had risen from 43% to 79%.

More recently in attempting to reduce the huge costs of farm surpluses by taking land out of fanning the UK government has introduced a new Farm Woodland Scheme, with additional grant aid of up to US$300 (£167) per hectare per annum for 30 years and a further target of 36,000 hectares of farm woodlands to be planted over the next 3 years. The procedures which exist to secure grant support through the Forestry Commission require private foresters to pay due regard to environmental impact studies which require good forest design and sound forest management, particularly with regard to the landscape, wildlife conservation, protection of water resources, etc. Following the introduction of the 1981 Act the Forestry Commission was instructed to become largely self financing and has sought to raise US$175M (£100M) from forestland disposals by 1989. Something like US$170M (£90M) has been raised to date compared with a total value of US$2BN-US$3BN (£1.1BN-£1.7BN) and an estimated return of 3.1%. Raising this level of capital has not presented a problem but it has resulted in the privatisation of the Forestry Commission becoming a political issue, a debate which has been further encouraged by plans for privatisation of State-owned forests in New Zealand. This is not something that I fully support but I do see that there may be a once and for all opportunity for rationalisation of forestlands between the State and private sectors to create large efficient forests by world standards. The deer do not mind whether they are grazing in State forests or in private sector forests! If the private sector is to have the opportunity to attract large institutional funds or unitised funds into forest ownership it is only likely to happen in Britain if the financial yield appears competitive and government decides that a much higher level of rationalisation, involving something like 20% of total state forests, is acceptable.


England Wales Scotland Great Britain
--------------------------------- (thousand hectares) -----------------------------------
1980 0.9 1.0 0.8 0.6 14.1 7.0 15.8 8.6 24.4
1981 0.5 1.1 0.7 0.6 10.4 7.0 11.6 8.7 20.3
1982 0.6 0.9 0.3 1.0 10.1 10.7 11.0 12.6 23.6
1983 0.5 1.6 0.5 0.9 8.0 10.2 9.0 12.7 21.7
1984 0.4 1.5 0.3 1.1 7.7 14.3 8.4 16.9 25.3
1985 0.2 1.1 0.2 0.9 4.8 14.6 5.2 16.6 21.8
1986 0.2 1.1 0.1 0.8 4.0 17.5 4.3 19.4 23.7
1987 0.1 1.4 0.1 0.8 5.0 17.3 5.3 19.4 24.7

FC (Forestry Commission) PW (Private Sector)

Tax Reform - 1988

Around the world Governments of all persuasions are moving tax reform up the political agenda. Almost everyone accepts that the proper role of macro-economic policy is to keep downward pressure on inflation, and to maintain a stable framework in which the private sector can expand. Thatcher's Britain can now speak for the first time since the War from a position of strength and self-respect. It has given management back to managers. It has given the unions back to their members. It has left businesses and workers to accept the consequences of their own actions. It has taken Government out of areas where they had no right to be and it has made it possible for ordinary people to enjoy the benefits of ownership. Tax reform has been an important element in this progress, aimed at improving the performance of the economy, leaving people with more money in their pockets, reducing marginal taxes so that the extra £ of earnings is really worth having, giving people more choice and removing distortions in the economy. In implementing this strategy the British Chancellor in his Budget Statement of the 15th March 1988, reduced the basic rate of income tax to 25%, reduced Corporation Tax to 35% and removed some of the burden of capital taxation by progressively reducing capital taxes to a single flat rate of 40%. In doing so he accepted that forestry required special treatment and removed it completely from both Income Tax and Corporation Tax. In parallel, Government re-confirmed national planting targets of 33,000 hectares per annum of traditional forestry and in addition, 12,000 hectares of farm woodlands per annum, supporting the continued expansion of forestry, and announced a new Woodland Grant Scheme with considerably increased levels of grant aid. In just eight hectic days in March 1988, British private forestry was turned completely on its head.


Area approved for planting or regeneration (ha) Rate of Grant
Conifer* (£ per ha) Broadleaved (£ per ha)
0.25-0.9 1,005 (630) 1,575
1.0-2.9 880 (505) 1,375
3.0-9.9 795 (420) 1,175
10 and over 615 (240) 975

* The grant rates shown in brackets apply to plantings of pure conifer.

Timber production is now only one of a number of objectives. The planting of trees on better quality land will be encouraged. There is a desire to increase planting of broadleaves both pure and in mixture. An additional grant for planting on arable or improved grassland is designed to take land out of cropping. The increased grants for replanting existing forest areas will encourage uneven aged plantations of mixed species. The new grant scheme is aimed at strengthening the consultation procedures and there will be a strong emphasis on environmentally sensitive forestry and landscape impact.

Britain's Forest Resource and Supply of Industrial Roundwood

Most of Britain's remaining natural forest resources were essentially felled during the First World War which led to the establishment of the Forestry Commission as a result of the Forestry Act in 1919, since when the UK has followed an aggressive policy of afforestation. Today, Great Britain has a total productive woodland area of about 2.1M hectares of which 1.5M are comprised of coniferous plantations and the remainder is broadleaved forest. Virtually all forests in Britain are "man made" and can be classified as "intensively managed". The emergence of private forestry companies, including the Economic Forestry Group, commenced in the late 1950's providing a forestry establishment and management service to private investors, looking to take advantage of Government Grants and tax incentives to invest in forestry. Today private forests in Britain account for about 1.2M hectares, 57% of the total forest estate. The Forestry Commission has some 890,000 hectares or about 57% of the total coniferous forests in Britain.


England Wales Scotland GB
---------------------- (thousand hectares) ----------------------
Forestry Commission
198 127 522 847
42 6 4 52
240 133 526 899
Private Sector
198 49 396 643
422 56 74 552
620 105 470 1195
All Productive Woodland
396 176 918 1490
464 62 78 604
860 238 996 2094
Unproductive Woodland
90 10 71 171

The supply and end use of coniferous roundwood from British forests has been increasing steadily over the last couple of decades, increasing from a total roundwood cut of 2.8M cu.m. in 1977 to 5.0M cu.m. in 1988 and forecast to increase to 7.3M cu.m. by 1997. Two thirds of coniferous forests are productive, exceeding 20 years old.

Forecast Coniferous Roundwood Available to the Industry in Britain

The latest forecast prepared jointly by the Forestry Commission and the private woodland owners reflects anticipated available volumes as standing timber. Allowing for logging and mensuration losses, the Economic Forestry Group estimates that the volume of logs over the next twenty years available to the industry in Britain compared with the current forecast demand in 1987 is shown in the following Table.

The volume of coniferous roundwood forest to become available for industry will double in the next 15-20 years. Productive softwood forests extending to 1.2M hectares are predominantly spruce and pine located in Scotland (0.8M hectares), of which 66% is managed by the Forestry Commission. The types of ownership within the private sector vary from individuals and co-owners to institutions. The latter will continue to dominate the market for established plantations particularly in the upland areas where the higher financial yields are more likely. UK pension funds started investing in forestry in 1975 and there are now about forty funds directly involved and each year two or three new funds make their first investment. The total value of investment in forestry by pension funds in the U.K. has been approximately US$50M (pound28M) over the last 5 years and their forestry investment normally represents 1-2% of their total portfolio although, exceptionally, for certain funds it has been as high as 5%. With the largest area of coniferous plantations in the control of the State Forestry Commission, the bigger pension funds are unlikely to become committed in the UK unless there is a policy of selling off some of the larger productive State forests and the investment yields appear competitive.


Age in Years 10 10-20 21-30 31-40 41-50 51-60 Over 60
---------------------------------- (thousand hectares) ----------------------------------
Private 120 130 150 90 30 20 70
Forestry Commission 70 170 210 220 80 60 40
Total 190 300 360 310 110 80 110
Percentage 13 20 25 21 8 5 7


Forecast demand (1000m3ob)




Coniferous Roundwood - all species
Sawlogs 2740 2550 3045 3885 4875
Small Diameter Rdwd 2170 2305 2685 3130 3515
Total 4910 48355 5730 7015 8390

British Small Diameter Coniferous Roundwood-Based Industry

When discussing sawmilling, the pulping and reconstituted wood-based panel industries play an important role in the overall viability of the sawmills by providing markets for residues. The pulping and particle board industries reached a state in the late 1970's and early 1980's carrying high energy costs where they were uncompetitive with imported products and the softwood-based industries collapsed. Since 1982 the industry has undergone a major transformation and the British product valued at over US$1BN (£0.6BN) annually can now maintain a competitive edge by world standards. Our Swedish, Finnish, German and Austrian friends have played a major role in the establishment of these new industries. In the last five years major investments have been made, amounting to US$1000M (£556M) with a further US$700M (£389M) planned. Projects include:

  1. A new 200,000 tpa pulp and LWC paper mill at Irvine in Ayrshire to be built by the Kymenne Corporation of Finland, an investment of US$370M (£206M). The mill is scheduled for completion in 1989.

  2. United Paper Mills' new 200,000 tpa pulp and newsprint mill at Shelton in North Wales with a second newsprint machine planned to be installed by 1990.

  3. Expansion of particle board manufacture by Kronospan in Wales and at Egger in Hexham.

  4. A new OSB mill by Highland Forest Products near Inverness acquired in July 1988 by Noranda of Canada.

  5. Increased production of MDF and particle board by Caber-board at Cowie and Irvine.

  6. Expansion and modernisation of sawmilling at numerous sites. The above developments have now reached a point where the forecast available volumes of small diameter roundwood and sawmill residues in Britain will be almost fully utilised for the next ten years. A recent Forestry Commission Statement concluded - "there now appears to be adequate capacity installed and planned to absorb all the sawlogs and small roundwood coming forward to the turn of the century". Apart from recycling waste papers any further expansion will therefore result in the increased utilisation of broadleaved species. This has already started in the particle board industry. Thus the prospects for the sale of sawmill residues appear to be encouraging for the next decade. If further plans for expansion currently being rumoured go ahead, then there could be a deficit in coniferous roundwood requiring either roundwood imports or an increased usage of broadleaved roundwood in the industry of some 500,000 cu.m. over-bark per annum in the early 1990's.

Britain's Markets for Timber Products

The UK cost of importing timber and timber products rose by 20% in 1987 to $10BN (£5.6BN). In tonnage terms sawnwood saw the biggest increase from 4.8M tonnes in 1986 to 5.6M tonnes in 1987 imported at a cost of $2BN (£1.2BN). Imports of paper and board also rose sharply with the annual tonnage increasing by 0.6M tonnes to 6M tonnes in 1987 imported at a cost of $5.8BN (£3.2BN).

The volumes of softwood lumber arrivals into the U.K. rose by 9% in value in 1987 with Canada raising its market share from 21-26%. The planned increase in processor capacity over the next 20 years will not significantly alter Britain's position as a small producer in the European forest products markets. It will however allow British mills freedom to compete aggressively with the large Canadian and Scandinavian suppliers particularly where quality, customer service and technological innovation, together with distance to the market, can turn the balance to advantage. It is difficult to aggregate Britain's total consumption of the full range of processed forest products, but it is currently in excess of US$9BN (£5BN), excluding goods manufactured from forest products such as furniture. During most of the past decade Britain's overall consumption of forest products has been estimated as being equivalent of 38M cu.m. of wood of which only around 3.9M cu.m. - i.e. 10% - has come from domestic resources. The post 1984 expansion of the processing industry has resulted in domestic products pushing their share of total consumption up to 12.1%, valued at over US$700M (£389M) annually and the planned expansion in Britain's processing capacity in the period up to 2000 could result in a 16-18% market share being achieved. The overall picture indicates continued expansion in British demand to 2000 within the 4 main forest product segments.

  1. British consumption of paper and carton board is forecast to rise by 30-55%, although Britain starts from a low production base in paper using domestic wood pulp. The future rate of expansion will be in line with northern hemisphere trends.

  2. British consumption of domestic wood pulp including waste paper is set to rise by 60-100% over the period. Again this is starting from a low production base and going faster than for Europe as a whole.

  3. Britain's demand for panel products including plywood will grow by 70-90% over the period at a slightly slower rate than for western Europe with particleboard and especially OSB taking an increasing share of Britain's market. Currently domestic production is about 1M cu.m. meeting 39% of the market.

  4. British demand for sawnwood, both hardwood and softwood, will increase by 30-50% (FAO 1986). Additional growth above the 1.5M cu.m. tons of sawnwood currently consumed representing a major opportunity for domestic mills. In the sawnwood market it has been found that with good presentation, well sawn, and dried to specified moisture levels, the timber is readily sold in the construction market. Appendix 2 sets out the consumption and supply of sawntimber in the U.K. for the period from 1973-1986 and for consumption and supply forecasts for the early 2000's. Since 1973 British softwood sawn timber has doubled its share of the UK market from 8-16% in 1986. In spite of an increase in domestic production to 1.3M cu.m. in 1987, there was a slight fall in self sufficiency. By the early 2000's British softwoods are expected to provide 26% of the consumption of softwood sawntimber in the U.K. The penetration of British sawntimber into the market sector previously dominated by imported softwood, has been increasing in the last decade. Growth in the U.K. market for sawn softwood is expected to average 1% per annurn (Economic Forestry Group 1988). In 1982 British softwood supplied 120,000 cu.m. of sawntimber into the construction market sector. By 2002-2006 this is expected to have increased to nearly 900,000 cu.m. which will correspond to 26% of the forecast market for construction grade sawntimber. With the slow anticipated growth of the market it is not anticipated that the increasing available volumes of their sawn product will be absorbed in the other traditional sectors as other low cost producers in the EC will compete and satisfy the market. Sawmillers in the U.K. are gearing their production facilities to serving the construction industry and generally have found good acceptance of the product. In addition we now have added value products based on British softwoods appearing on the market such as mechanical stress-graded material, dressed profile siding and panel boards, extra long length structural battens, pressure treated fencing and structural material, dressed CLS lumber, etc. Because of the competitiveness of sawlog supply over at least the next 5 years, companies are looking seriously at opportunities for upgrading and adding value to their products by making mouldings, architraves, laminated products etc.

When considering the wood-based industry in Britain it is important to remember that these industries are located within one of the major markets of the world and in general do not depend on export markets and usually sell a significant proportion of their production within a reasonable proximity to the mill. This has been a key factor in the development of the current structure of the British sawmilling industry; although the total number of sawmills has been declining the industry is still dominated by small family mills.


Structure of British Sawmilling Industry in 1986
Capacity Log intake (m3ob/a) Number of mills
    500- 2,500
    2,500- 5,000
    5,000- 10,000
    + 10,000

In the last 10 years some rationalisation of the industry has started with the emergence of lead groups. With the forecast shortfall in the supply of sawlogs of 300,000 cu.m. over-bark per annum and the construction of further large-scale mills over the next few years, we anticipate an accelerated rationalisation of the UK sawmilling industry. The announcement in 1987 of the merger of A. & R. Brownlie Limited and Thomas Smith and Sons (Kirkoswald) Limited, two of the leading larger British family sawmilling groups, exemplifies this trend. This merger will give the group a combined log capacity approaching 600,000 cubic metres over-bark per annum distributed between mills in Scotland and Wales. This corresponds to about 25% of the British sawlog supply. The larger mills have expanded increasing capacities of individual mills to between 30,000 cubic metres over-bark per annum and 100,000 cubic metres over-bark per annum of log input. Features of the rationalisation taking place include not only size, but also the following:

  1. Improved product dimension tolerances and presentation which have been instrumental in increasing penetration of the construction market in competition with imported lumber.

  2. Increased product development catering for specialised markets on either a local basis or supplying specific dimensional requirements not readily met from the imported suppliers e.g. Glulam products.

  3. Increased customer services with prompt delivery developing strong customer loyalty.

  4. Increased utilisation of sawmilling lines designed specifically for given sawlog specifications and products, such as small log circular double slabbers and gang slashers (cant edges) for the production of mining timbers, pallet boards and fencing materials from lower volume logs.

  5. Kilning is relatively new in the industry with Brownlie and TSK again leading in this area. To quote from the Timber Trades Journal of December 1987, Michelle Rogers said "I recently spent 4 days travelling around Scotland. The vastness of the forest and the level of commitment and enthusiasm shown in the country sawmills makes it difficult to imagine British timber not continuing to be an increasing success story."


British forest products are set to increase their share of the rapidly growing home market over the next decade. Self-sufficiency in total forest products is set to rise from 12% to possibly 18% by the year 2000, in spite of a 30% rise in demand for paper and board over the same period. In 1989 Britain has 5 large integrated pulp and paper mills and 7 major panel board plants, most of them using the latest technology. They will be able to compete aggressively against importers in market sectors where quality, technological innovation and closeness to the market give an advantage. Competition for sawlogs is currently keen and will become more intense. This will result in further rationalisation in the sawmilling industry, similar to that which has already occurred in the small diameter roundwood based industries. It is expected that further large mills processing around 100,000 cubic metres over-bark per annum of sawlogs will be built, and that many of the current smaller, medium sized mills will be either absorbed or forced out of business. Some mills will look to added value products to remain viable. Several small family owned and operated mills, often linked with a small fencing contracting business, are expected to continue as they require only small volumes of logs, supply markets within a limited distance and the cost of the sawntimber is only one component in their true business as contractors. For a long time the importers and suppliers have tended not to regard the British softwood industry as a serious competitor in the U.K. market. The trade which in the past relied upon imports cannot now ignore the opportunity to prosper by participating in a growing industry within the EC. Since 80% of the sawntimber and timber products consumed in the U.K. goes into the construction industry the main aim will inevitably be to limit or eliminate unjustified technical barriers and restrictions on the use of timber. Research and technical training with the help of TRADA can reduce some of the inherited artificial barriers which militate against an increased use of a valuable renewable resource. The fact that even the EC cannot meet Britain's needs will not deter some of our European friends from trying to create trade barriers against imports from North America. The vision of a great internal European market grew out of admiration for the American version. A single language, a common currency and the powerful Federal Government are just three US advantages beyond the reach of 1992. A common forestry policy is unlikely, but a long slow process of harmonisation and standardisation has begun.

The future of the world's forests is not yet very high on the political agenda and forestry rarely achieves the same degree of status at government level as achieved by other more powerful interests. Forestry has an image problem and unless it can achieve a far broader base of support, Government policies and planting targets will be difficult to achieve even in Britain. Foresters generally have not been too successful in putting across their case to the public and much greater constructive use must be made of television and radio to show the importance of the forests which we create and manage. With the growing concern about environmental issues in recent years, foresters have frequently found themselves the target of the environmentalists' wrath. However forestry in Britain has succeeded in retaining Government support, in spite of a barrage of adverse publicity emanating from the battle between foresters and conservationists frequently in areas such as north of Scotland which have little relevance to the U.K. forest industry as a whole. However in 1988 this pressure brought together a grouping of enterprises, organisations and professional associations within the private sector to form the Forest Industry Committee of Great Britain (FICGB), to promote more informed understanding of the contribution and role of the forest industry in Great Britain and overseas. Its first publication "Beyond 2000" is a well researched and a highly authoritative reference book which I would recommend as essential reading for anyone associated with the forest industry in Great Britain. A strong united forest industry is a guarantee of continued support for the right reasons. It is a beacon of hope for the lonely forester harassed by sham conservationists. We may not find it easy for every link in the forestry chain to live together but the overall commitment of foresters is clear and the fact that we have held our place in Britain is a great tribute to both the FICGB and the Forestry Commission and must be the challenge facing the University of California at Berkeley as we move into the next decade. Could the world's top ten centres of forestry excellence form effective linkages to exert a collective influence on world opinion?

I am a forester, I am trained to look long term; it has not let me down whether it is a strategy for the Economic Forestry Group or for the forest industry. I leave you with a quotation from our Prime Minister The Rt. Hon. Margaret Thatcher from a speech made at the Conservative Party Conference.

"We are in the business of planting trees for our children and our grandchildren or we have no business to be in politics at all. We are not a one generation party, we do not intend to let Britain become a one generation society, let us not forget the lessons of history, the long term always starts today."


Campbell, J. (1980) "The World's Third Forest" Commonwealth Forestry Review Vol. 59 (4).

F.A.0. Forestry (1984) "World Forest Products Demand & Supply".

Wall, J.W.H. (1985) "The European Community & Forestry Policy", presented to the oxford University Forestry Department.

Office for Official Publications of the European Communities (1986) "The Institutions of the European Community".

E.E.C. Discussion Paper COM (85792) (1986) "Community Action in the Forestry Sector".

U.K. Forestry Commission "Slasher" Issue 329 (1987) Wood Supply Forecasts to 2002-2006.

Ministry of Agric. Fish. & Food (1987) Farm Woodland Scheme.

Easton, J. Economic Forestry Group (1987) "The British Sawmilling Scene" - unpublished.

Forest Industries Committee G.B. (1987) "Beyond 2000".

Campbell, I. Noranda Forest Sales (1988) "Softwood Lumber" - unpublished.

World Resources Institute (1999) "Tropical Forestry Action Plan".

Ewing, A. and Chalk, R. (1988) "The Forest Industries Sector" World Bank. Technical Paper No. 83.

Campbell, J. (1988) "British Forestry - an International Perspective", International Forestry Conference, Australian Bi-Centenary.

EC Discussion Paper (1988) "Community Strategy and Action Programme for the Forestry sector".

Forestry Commission (1988) "Evidence to the Agricultural Committee of the House of Commons".

Office for Official Publications of the European Communities (1988) "Programme of the Commission for 1988".

The Financial Times (1988) Various articles.

Appendices 1988 Evidence to Select Committee Land Use & Forestry, Forestry Commission.


Conversion rates: £ : $ 1.80
$ : Ecus 1.13

Appendix 1

1. Population (mill.) 56 3 320 120 240 275 28
2. Commercial Forest (mill ha.) 2.4 2.1 43 23 195 534 6.6
3. Forest Area (%)
Per Capita
4. Farm Land Area (%) 77 50 60 14 47 27 36
5. Private Forest (% of total forest) 57 21 58 68 73 47
6. Employment (thous.) 40 489 2000 106
7. Roundwood Consumption (mill. m3) 5.4 8 194 73 330 270 40
8. Roundwood Production (mill. m3) 5.6 9 115 32 347 290 18
9. Wood Products Trade Balance (USD mill) (5330) 304 (15900) (5590) (4825) 2080 21
10. Wood Products Imports
(US $ mill.)
(UK£ mill.)

Source: FAO 1986

Appendix 2

Part 1. U.K. Consumption of Softwood Sawntimber and Self-Sufficiency (1000m3)

Item 1977 1973 1983 1984 1985 1986

    England and Wales

832 969 1227 1178 1405 1336
Imports 9832 6328 7071 6678 6420 7000
Exports 36 30 24 21 20 20
Apparent Consumption 10628 7267 8274 7835 7805 8316
Level of Self-sufficiency % 7.83 13.33 14.83 15.04 18.00 16.07

Part 2. U.K. Consumption of Softwood Sawntimber by End Use Sector (1000m3)

End Use Sector --------------1982 --------------
Imported British Total
------Average 2002-2006 -----
Imported British Total 1982
Construction 4700 120 4820 5595 885 6480 10.9 36.3
Packaging 650 440 1090 535 640 1175 40.0 26.2
Fencing 400 340 820 350 680 1030 30.9 27.9
Sawn Mining Timbers 0 130 1230 0 115 115 11.0 4.7
Others 410 70 480 380 120 500 6.4 4.9
Total 6240 1100 7340 6860 2440 9300 100.0 100.0
British Supply % 15.0 26.2

Introducing: John Campbell, O.B.E.

A Forestry Graduate of the University College of North Wales, who became the first employee of the Economic Forestry Group when it was founded in 1959.

He has been Group Chief Executive since 1968 and Deputy Chairman since 1986.

He is a member of the European Community Forestry Advisory Committee; a Council Member of the Royal Forestry Society; a Council Member of the Institute of Directors and a Council Member of the Forest Industries Council of Great Britain; he has also served as a Council Member of the U.K. National Timber Growers Organisation and on the Forestry Advisory Council for the Universities of both Oxford and Aberdeen.

He received the O.B.E. for services to Forestry in 1987.

Acknowledgements I should like to acknowledge the valuable assistance given in the preparation of this paper by professional colleagues and in particular by Professor Hugh Miller of the University of Aberdeen; Dr. Jeffrey Burley, Director, Oxford Forestry Institute; Mr. Jeremy Wall, Administrator/Forestry Advisor to the EC Commissioner for Agriculture, Brussels, and to Jack Easton and Tony Willis of the Economic Forestry Group.

I also owe a debt of gratitude to my wife, May, for many weekends of neglect while the paper was put together.

Copyright In the interests of better understanding, reproduction and copying of this paper is welcomed and permitted without clearance, with the appropriate acknowledgements.

Summary The global environment and such risks as 'nuclear fallout', 'the Greenhouse effect', 'ozone depletion' and 'acid rain' are 'news' which can be instantly transmitted by television and radio around the world. Political leaders can no longer ignore its impact on the mounting concern about a world able to sustain seven billion people in the next century. In an age of increasing affluence, increasing education and instant communications the tide of public opinion will continue to flow in favour of environmental protection. The demands of an ever-growing population on the world's forests place at risk the industrial and environmental benefits which have been taken for granted by past generations. Greater replanting and more intensive forest management in both the tropical and boreal forests is a matter of some urgency requiring the attention of world leaders. Mrs. Margaret Thatcher, the British Prime Minister, has recently focused attention on global environmental issues - will she offer the leadership required to ensure effective coordination and action? The EC is one of the largest importing trading blocks in the world, particularly for timber and wood products. Will the Community achieve the Single Market by 1992 or will the benefits of a single language, a common currency and the powerful Federal Government, which are three US advantages, be beyond the reach of 1992? In 1988 the Commission launched proposals for a "Community Strategy and Action Plan for the Forestry Sector". With Britain by far the largest wood consumer the Community must increase its self-sufficiency and also offer support to developing nations, including relieving some of their debt problems, to ensure long-term wood supply programmes to meet future needs. The wood resource created in Britain by planting over the last 50 years has resulted in a complete transformation in the UK forest industry. During the last 5 years, with an investment approaching US$2BN (£1.1BN), a highly efficient wood processing industry, competitive by world standards has evolved, with the prospect of raising self-sufficiency overall from 12% to 18% and the likelihood of a further increase, with sawnwood products rising to 26%, by the year 2005. In 1988 for political and fiscal reform reasons, tax relief incentives were replaced by direct grant aid to encourage existing landowners to engage in environmentally sensitive multipurpose forestry. Britain has become a tax haven for some foreign investors, encouraged by substantial grant aid, for creating super tree plantations in a guaranteed timber market. Is this an example to other nations of what can be achieved by a consistent long term Government forestry policy? What lessons can be learned? Can the centres of forestry learning come together to ensure a sustained forest resource yield to meet future needs? It is highly desirable that the University of California, Berkeley form a world club of forestry excellence with corresponding institutes in Oxford, Paris, Hamburg and British Columbia to help halt forest destruction, and advise world leaders on the sustained management of the world's forest to meet the needs of a population of seven billion people in the next century.

Power Brokers: Is the Network Closed?

William N. Dennison

We are all familiar with the duties of stockbrokers. They are those who act as a "middle man" or an agent for another person or group. A broker is attributed with getting the job done.

In the political world we have individuals and groups who can rightly be defined as "power brokers." This may be an oldtimer who knows the right combination of business leaders and gossip in a small community. But often the "power broker" is a well-organized network of individuals who are ready and able to act or react to situations as needed. The power broker molds and sets decisions for policy and legislation in all levels of government. They come in all sizes, both sexes, and of differing political philosophies. Their methods and areas of persuasion are varied, but they are always activists. That word carries bad connotations to many. Activism, however, must be an important tool if we are to become power brokers.

No Power Broker's License

It has been a long time since the wood products industry could be considered an effective political power broker. This is important to you new foresters and those of us who have made forestry our career, because we have found that in many cases, the science of forestry has had to give way to the art of politics.

My goal is to encourage you to consider the attacks against our business community and capitalist economy as serious and threatening to our nation and to review my perception of how we have either lost or never gained our power broker's license. Finally, I will offer encouragement for solutions to our problem and steps which must be taken if we are to be a part of the power broker network and a guiding force which will set trends and implement goals that allow us to practice true forest management. This is mandatory if we are to minimize the uncertainty to those entrepreneurs who are willing to invest in our wood products capitalistic economic system.

The question again is, can the wood products industry leaders become power brokers? Or, is the network closed?

Information Minimal and Sporadic
The average American citizen does not understand economics or politics. Many who operate in business and, in fact, make the laissez-faire principles work effectively on a daily basis, do not fully comprehend those essential features of their own operations.

Certainly we recognize that consumers often do not perceive the connection between extraction of raw materials, manufacturing, transportation and the many commodities and amenities which contribute so significantly to their high standard of living.

We can forgive them for misunderstanding because our commitment toward dissemination of information has been minimal and sporadic. That is only part of our problem.

For the first 175 years of our nation, we sought individual freedom for all through a capitalistic economy. It has become obvious during the past 25 years that "planners" and power brokers with socialistic leanings have attempted to overrule individual rights in the form of government regulation. It has had important impacts on the efficiency of providing commodities to the public.

There is a relatively small but influential part of our population, including some journalists, newscasters, political leaders and assorted individuals who do know the importance of capitalism to our nation and systematically have chosen to stop business on every level through broadcast or print media, lobbying, appeals, and legislation.

In the early stages, these individuals called themselves "left-wingers", then later latched onto the term "liberal". Many of these people found their views more acceptable to the uninitiated under the label of "Environmentalists", with a capital E, whose philosophies are portrayed as wishing to protect the "environment". Through the years, their true goals have been the same, even though their names may change.

For years we underestimated the effectiveness and motives of these groups. More recently we watched their activities in awe, sometimes countering their actions in a token manner but fearful of taking a full offensive action on important issues such as the use of herbicides.

Time does not permit appropriate discussion of why Environmentalists have chosen their philosophies, but it can be concluded that their personal intent has been to solicit state intercession into the capitalistic economic structure to provide their form of "social justice." Please understand that I'm speaking of professional Environmentalists, those who have as their main goal stopping development activities on both public and private land. Unfortunately, at best these actions can only assist in lowering everyone to the same level of mediocrity. At worst, there is enough evidence to recognize that Environmentalists' motives are not just to protect the environment. They utilize the spotted owl and redwood trees to cause opposition to the harvesting of timber. They use the water beetle against the orchardists on the Sacramento River, who want to install rip-rap to keep the river from eroding their land, and they stop widening of Howe Avenue in Sacramento on the basis that to do so will prevent unacceptable noise pollution. "Environmentalists" have held up the development of hydro-electric and nuclear energy with various stalling tactics under the guise of "environmental protection". The move to stop mining of essential minerals in the Mojave Desert via the Desert Wilderness Bill is being led by Senator Cranston and his environmentalist supporters. Attempts to become energy independent through offshore drilling are being hindered by Environmentalists. On the heel of our California fire tragedies, these same individuals are starting to appeal the harvesting of the dead timber. Will the public accept this move to leave valuable resources rotting on the stump at the risk of jeopardizing adjacent green timber through insect infestation and future fire hazard? How can groups be accepted as protecting the environment when communities and family values are not considered?

People are not important to the Environmentalists I have described. The true hard-core leaders are promoting their own philosophies of ultra-liberalism, anti-business, excessive government, no-growthism and socialism. Ron Arnold has portrayed these facts vividly in his book: Ecology Wars.

Don't Fear - Act
It is not my suggestion that we suppress Environmentalists' ideas and strategies. However, we must understand their values. It is mandatory that we develop an effective countering force if we are to maintain our economic freedom, our standard of living, and the simple survival of an important manufacturing industry. Those who decide the fate of our communities and state, the power brokers of our nation, must be informed and impressed that there is a tremendous disagreement with those who would choose to misuse our natural resources through no use at the expense of the nation's well-being.

We should not fear the liberal, socialistic doctrines of Environmentalists as long as the true public can be fully informed about their values, intent and the impacts.

Public Opinion Is a Perception
John O. Wilson, Chief Economist, Bank of America, noted that more than anything, the stock market is a gauge of peoples' hunches and expectations. Driven by mass psychology, it doesn't reflect today's economic conditions as much as investors' feelings about where the economy is going. This is similar to public opinion of our industry, which is based more on perception than fact.

Public opinion often begins from a very few who are able to mold the media and influence the views of other power brokers. Many minority views have been marketed as public opinion, which then spread like wildfire to the misinformed masses.

It is fact that many will accept fashionable ideas from movie stars, noted columnists, and newscasters because they believe them to be factual and credible. Neither is necessarily true.

The public is quick to trust stardom as an indication of intellect, another assumption often proven in error.

Spectators Too Long
By the time we began taking professional Environmentalists seriously, they had already become power brokers, and a major influence on the political decisions of our nation. They have sought and won political offices and appointments in all levels of government. Their existence in the bowels of government assures that their philosophies continue even after administrations change.

Because of this, business people who provide commodities and services to our nation are finding that they are outsiders. The very groups who molded the foundation of our nation are fighting for survival and are currently unable to operate at their optimum efficiency.

Many of our business leaders would like to participate, but find it difficult after having been spectators for years to jump onto the political playing field without coaches, practice or a uniform. There is very little time for practice. Once we develop our coaches and play strategy, we believe the team will be recognizable without providing special uniforms.

We Learn Through History
It is always necessary to look back before moving forward. History helps us review our record as power brokers in training.

If we look at the wood products industry's history, we can be proud of the manner in which man and nature have interacted to provide not only a living, but a sense of well-being for many generations - and we still have plenty of trees.

As a third generation representative of the wood products industry, I can vouch for many of the reasons we should be proud. My grandfather was a railroad engineer for Swain Lumber Company and Diamond Match Company. My father held various jobs for Diamond Match Company and completed his career as a dozer operator for Meadow Valley Lumber Company. I have worked as a logger and a forest manager. It has been a great satisfaction to have gone back to areas which were logged without burdensome regulations 45 years ago to find that most areas have reforested and are thriving very well.

Certainly, even under the state of the art when I began my career in 1950, it could be shown that there were mistakes in judgment. There were some practices that warranted regulation of the timber industry. Often the immediate logging looked harsh, but given the end results many of the types and costs of regulation which have grown exponentially are not warranted. But, we let it happen.

The perception of our industry has been spread by Environmentalists based on an overplay of old mistakes. But, we let that perception persist. We have failed to tell the real story in the proper manner to the right people.

We need to admit errors. Some are inevitable as we work with so many variables of forest resource management, which is still a relatively young science. We also need to do the best forest management job possible within sound economic guidelines. In most cases, that is being accomplished. We cannot afford to permit any less.

Those working for the wood products industry can be proud of our history and heritage. We have played a key role in the development of our communities and our country. We continue to provide many commodities from a renewable resource that is important in providing our American Way of Life. We should not let false perception of the past taint that heritage.

Review of the past 20 years indicates very few political triumphs for the wood products industry. No clear battles have been won against Environmentalists. That, in itself, tends to tell us that we have been doing something wrong. It ought to make those who aspire to be leaders both embarrassed and angry.

We have lost wilderness bills and litigation, and let the appeals process bring our operations to a stop.

We have permitted Environmentalists to add unnecessary regulations that have astronomically increased operating costs and now find that those same people are trying to make the case that timber harvesting is not cost effective.

We can blame whomever we choose. The fault is ours.

The Good Old Days Are Gone
We have become lethargic in many cases. Too often I hear that logging or milling or forestry, in general, is "not fun, like it used to be." Such statements are generally followed by reminiscence of the "good old days." We need to face the fact that however we envisioned those days, they are gone and we are now experiencing tomorrow's "good old days."

We cannot afford to stay in or revert back to the days when we adhered to the internal networking and talked to ourselves because we liked the answers. Today is exciting. Tomorrow will be even better.

Where Have Our Leaders Gone?
Leadership comes and goes during every era. We are now in need of fresh new leaders to join those that are not deterred by old ways of doing business and are willing to set aside self-interest and work for the benefit of the total industry and the best interests of the public. Power brokers in training must come of age.

Cynicism is one of the factors which has disabled many of our leaders. It has caused some to give up on the basis that agencies have not and never will move quickly enough on important issues; that bureaucracy reigns and individual effort cannot make a difference. They suffer from alienation from the existing power brokers' network and need reorientation and motivation.

Cynicism can be a real enemy. It takes away the hope of the present - then the future. Finally, we lose the significance and foundation of our past. Cynicism makes us lose sight of our cause and our plan. There must always be a plan, a strategy, in place so that we can be prepared without the need to retrain and retool each time we meet a crisis.

It's all right to be a critic, if the aim is to make a difference and better answers can be prescribed. To the contrary, cynics do not believe change is possible and sit back and do nothing. It takes very little intelligence to stop progress. A great deal of work is required to look for better ways of doing business.

We can't overcome attitudes by merely saying "I won't be cynical." We must replace our negative ideas with something better. Cynicism is infectious, but so is enthusiasm and activism. The latter two are a lot more productive.

We Need Little Victories
Everyone likes a winner and we all like to win. It is a fact that industry's defeats at the hands of "Environmentalists" have taken a toll on our leadership. Worse yet, our past experiences at negotiations have ended in defeats. The 1983 California Wilderness Bill is a good example of how so-called compromises have not worked. Development in the "released" roadless areas which Congress intended to be utilized for multiple use has not occurred because Environmentalists have effectively appealed attempts for timber sales. They never intended to hold up their end of the bargain with Senator Wilson, which supposedly traded the release of some timberland and a stable land management base for 1.8 million acres of wilderness.

For too long the wood products industry has been without a common structure under which strategies can be developed and systematic plans implemented, through which "little victories" can help maintain enthusiasm and the will to win. It will be these "little victories" that will finally give us a truly winning team.

Fragmentation in the Ranks
Our history will show that we have had difficulty in obtaining and maintaining a common goal among industry leaders. Timber supply from both public and private timber lands is a common concern for all of our industry. Private property rights are slipping away and should also be a common concern. In fact, every citizen of the United States should be concerned about the erosion of private property rights. Yet, we still struggle to obtain a consensus for a strategy and unity because of internal differences in philosophies and needs.

In his book, Ecology Wars, Ron Arnold states: "I don't see that commitment in American industrial ranks, primarily because any industry is not a monolithic whole. Take the forest industry as an example: it is 'an industry' in name only. In fact, it is a rag tag assortment of more than 10,000 diverse and highly competitive business enterprises constrained by a myriad of governmental restrictions, not the least of which is a clutch of anti-trust laws. Further, regional jealousies, self-serving cliques, small operator alienation from large corporations' viewpoints, labor friction, non-activist leadership and lack of communications - all of these problems serve to shrivel the ringing phrase 'the forest industry' into a pale abstraction.

"The private sector's ability to think or act in unison is virtually takes a big sexy issue to get even a tiny fraction of American industry's leaders together, and the record shows that when the big issues die down, industry promptly goes back to public affairs sleep."

One of the greatest champions for the wood products industry, Senator Jim McClure (R-Idaho) wrote a 1 1/2-page letter to National Forest Products Association in July of this year. In part the Senator said: "On numerous occasions over the years, I have attempted to convince the forest products industry of the value of efforts to inform the media about their side of issues dealing with the management of public lands. The end result of a successful campaign would be to influence public opinion in support of their position.... Environmental organizations long ago made the long-term commitments necessary to halt development on public lands.... It is not that the industry does not know what to do and how to do it.... In order to be successful, such a program requires real commitments of time, effort and funding. The industry has not been willing to make such long-term commitments and stick to them."

I agree that there has not been an appropriate enthusiasm or commitment by industry leaders to beat the Environmentalists. The views of Senator McClure and Mr. Arnold are accurate. Our commitment of time and funding is too little. That needs immediate resolution.

We still spend too much time merely running the business and bickering among ourselves. That does not mean that there are not legitimate differences between small and large businesses or between those who are sellers versus those who are dependent upon buying timber to meet their resource needs. There are good reasons for disagreeing on many issues. That is what competition is all about. However, if we are going to survive regulation, appeals and litigation, we must enter into strong coalitions behind sound goals which are beneficial to everyone.

Uncertainty Has Deterred Long-Term Planning
Uncertainty is always an unnerving, but ever-present variable for business leaders. It has been a deterrent to long-term planning for many years. Beginning in 1980, however, the instability of lumber prices, mounting pressure on timber supply and the changes in industry structure may have seemed like even more reason to show timidity in long-term planning. In fact, however, those situations, combined with the forest planning process under the National Forest Management Act, was reason to get tougher. It was a necessity as we began to see politics supersede sound forest management practices.

It was not until the end of 1985 that the California wood products industry began sincere long-term planning which gave indication of wanting to be a part of the power broker network.

Becoming a Network
It is my belief that the wood products industry took a giant step forward toward the development of an effective networking structure that will lead toward true participation in political decisions when it initiated the Alliance for Environment and Resources (AER).

AER is a broad-based group of people who include teachers, realtors, loggers, county supervisors, foresters, bankers, business owners and more throughout California and southern Oregon who initially formed a coalition to review the forest plans. You know the National Forest Management Act requires each national forest to develop a plan which will establish all of the forest uses, including recreation, wildlife, water, grazing, mining and timber. The public has the opportunity to have their views considered as Forest Service develops their plans.

The Alliance for Environment and Resources has developed affiliates whose acronyms SHARE (Shasta Alliance for Resources and Environment), KARE (Klamath Alliance for Resources and Environment), WE CARE (West Coast Alliance for Resources and Environment) and others have provided credible information to communities and good alternatives to the Forest Service on the forest plans.

AER has also developed additional arms, such as its Execunet. This structure permits business leaders from the north state to meet with those in southern California to gain better understanding of mutual benefits to be derived from an economically strong wood products industry.

In a November 9, 1987 letter to WTA Chairman Glen Duysen, California State Senator Jim Nielsen offered some suggestions as to what the industry might do to expand on the base of community support that had manifested itself in the formation of SHARE, WE CARE, and other groups. Senator Nielsen said, "My first suggestion is that the industry consider a public relations campaign directed at southern California population based on the general theme of 'California Forest Products for California Homes'." We will utilize this and other suggestions from the Senator.

AER has also formalized better communications with the news media and legislators through its "Medianet" and "Legisnet." But, we can do better. We must strive to assure that every legislator recognizes the importance of having a "wood products agenda."

The AER structure exemplifies the definition of networking, since it is made up of people with a broad-based background but who have common goals. They have proven during the forest planning process that they are able to generate a single but very vocal and powerful message to the proper people in a timely manner. Those involved can vouch for the fact that networking is reminiscent of Peter Drucker's, "good idea which quickly degenerated into a lot of hard work." They would also be the first to tell you that they should have begun twenty years ago.

Life After a Crisis
Too often networking activity develops because of a crisis. That was the basis for implementation of the AER. It was recognized as the only structure that could properly carry the message to the public that the national forest plans deserved their full attention.

Coalitions built on an emergency basis often die along with the cause for which they were formed. This is not so with AER. Leaders in the wood products industry have joined the effort with full knowledge that from now on their approach to problems must be different. But they still have much work ahead of them.

Opportunities and Obligations
A key to communication networking and ultimate building of coalitions with individuals and organizations outside our industry is that there must be mutual benefits. It is human nature to ask, "What's in it for me?" If we have no answer, we should not expect help.

Since there are so many benefits to all citizens of our state from a strong wood products industry, there are great opportunities that have never been achieved.

With opportunity comes obligation. We must recognize two key obligations to those who respond to assist us in obtaining certain goals.

First, development of a communications network is not to be taken lightly. Once begun, there is an obligation to continue. Financial investments are high in a working structure such as AER, and the results are too important to permit degradation of the program. The structure may not be as active for short periods, but the maintenance of the networking and informal grooming of coalitions during the "off-season" is essential.

Second, if coalitions are developed to meet our specific needs, we must be prepared to reciprocate to assist others at a later date. To do otherwise will cause long-lasting damage to business relationships. You cannot get into or out of coalitions easily.

Effective Forest Politics Networking
Even though we practice networking in our everyday lives, it became evident that an effective forest politics network demands both formal structuring and training. That initial training was obtained for AER participants, but there is need for continued nurturing.

There are different levels of good networking. At its zenith, political networking becomes a complex business involving computer lists, personal contact names and addresses, voting records, target lists and use of high technology. However, there is a great deal that can be accomplished on a less technical level as the networking structure is being developed. The Alliance for Environment and Resources has found that much can be accomplished initially through Execunet, Legisnet and Medianet that is not complex, just persistently hard work.

Simple Message Mandatory
Once an issue is identified, there is a need to prepare a simple message that can be easily conveyed. It must be understandable, meet the mutual benefit of a broad-based group, and it must be stripped of technical jargon. One of our past communication errors has been the desire to educate masses overnight about the importance of volumes of board feet, jobs, dollars and technical terms or philosophies that are of little interest to most. Certainly such data are important to those directly employed in our industry, but not to the voting population south of the Tehachapi mountains. We must know our audience.

Knowing Our Audience
Facts do not change. However, the message must vary dependent upon our target audience. That message is so important that its development should not be solely left to the discretion of foresters. It is not unreasonable for companies and associations to either employ or contract the services of communications professionals. We can provide the facts; good communication people can guide us in the best way to tell our story.

Currently, AER is utilizing three main messages: Man can renew the forests faster than nature can; the environment is and will continue to be protected; and we must not waste our resources.

Those are messages which are accurate, simple and understandable.

Principles of Effective Coalitions
There are at least five principles that were utilized in developing the Alliance for Environment and Resources:

  1. The structure is coordinated by one person who has the benefit of both a budget and a steering committee. Loose-knit networks which depend entirely on volunteers cannot survive on the long term.

  2. The goals of the coalition were defined early and explicitly. Short-term objectives were set that built toward those goals and were used as little victories to build and sustain interest.

  3. Individuals were asked to put aside their organizational pride and personal ego, so that members' needs were of foremost interest.

  4. There was no place for "me-first" attitudes. A coalition should only be as visible publicly as its constituents desire. Constituents are given first rights to all credit for the coalition's successes. Some within AER would just as soon not be visible. That is okay too.

  5. Finally, coalitions should exist for action - not just to exchange information. Everyone must understand the action required. If the only desire is to disseminate information without end-result actions, we have not maximized the benefits of the coalitions which we have built through our networking structures.

The Alliance for Environment and Resources is action-oriented and able to move quickly, as witnessed in its participation in the northern California fire salvage and rehabilitation activities.

Work To Be Done
I am enthusiastic and excited about our future. We finally have the start of a network that can make a difference. As we work toward sophistication in the use of these tools to achieve our goals, I offer the following additional suggestions to my colleagues:

  1. Let us not be ashamed of our industry's past. Rather, we should display the important part that the wood products industry has had through historical societies and museums.

  2. Let us demonstrate on an everyday basis that we are professionals, we do have a "feel for the land", and that we are proud to be part of an industry that provides thousands of useful commodities for millions of consumers, as well as jobs and a sense of well-being for thousands of individuals and families. All of us are environmentalists too; we care very much about this planet! Industry representatives must address values as well as statistics and production facts. As noted by Ron Arnold, "Values have motivational power. Beliefs and attitudes do not." We must demonstrate vividly and even emotionally that we believe in our rural way of life, our professional judgment, and the importance of our industry to the public. The true public must be shown that our ingenuity and creativity of "land use without abuse" has mutual benefits for all.

  3. Businessmen can no longer just tend to their immediate business. Although technical and economic aspects of everyday production deserve first priority, owners and Chief Executive Officers must recognize their obligation to participate in social and political activities. Lee Iacocca is a good example of what can be accomplished through high visibility.

  4. We must develop a political awareness of the necessity to actively maintain a capitalistic economy and gain understanding of the important and positive impact which that economy has on our way of life.

  5. We must set aside, as much as practicable, differences which fragment our industry and prohibit us from speaking strongly with one voice. Past issues must be put behind us. New differences will occur. We must work diligently to resolve them and then put them behind us. We have too many common goals to conquer to let minor differences stand in our way. Let's utilize the key goals established in Centennial II that were so well explained by Hal Walt during last year's S.J. Hall Lectureship as a standard for our progress.

  6. We must recognize that the wood products industry structure has changed and will continue to change, at least for the next few years. Industry leaders of associations and coalitions must be flexible. We must continually question past activities to assure that we are still headed in the proper direction.

Can't Escape Responsibility
Abraham Lincoln is quoted as noting: "You can't escape the responsibility of tomorrow by avoiding it today. "

This leads me to the question I have posed: Can the wood products industry leaders find a spot within the power brokers network? You bet we can!!! But, we must assume our responsibility today. We must establish our own agenda and not be on the defensive because of crises which are developed by others. We must gain the support of others who share mutual benefits.

This agenda requires enthusiasm, commitment, and activism. All three are not options - they are responsibilities. We owe that responsibility to our profession, our employers, the consumer, and to the real public who depend upon us as professionals to supply them with the 100,000 different wood products that they collectively use in their daily lives.

I urge you students who will soon be entering the forestry profession to do so with enthusiasm and commitment. Be willing to dig for facts. Strive to set the record straight when others use false perceptions. Tonight, I invite all of you to join the art of networking and assist us in earning the right to be the power brokers necessary for us to practice what we were taught.

Introducing: William N. Dennison

William N. Dennison
William N. Dennison is a third-generation representative of the wood products industry. He was raised in logging communities of northern California and has worked continuously in the industry since he was 16 years of age.

Mr. Dennison graduated with a forestry major from the University of California, Berkeley, in 1959, with a membership in Xi Sigma Pi. He is California Registered Professional Forester No. 926.

Mr. Dennison's timber industry work experience includes surveyor, truck driver, chokersetter, catskinner, road construction foreman, private timberland manager and purchaser and administrator of federal timber sales. His early employers included Sacramento Box and Lumber Co., Mt. Whitney Lumber Co., and Diamond Match Co. It was with Diamond that he gained his forestry experience in the management of 175,000 acres of private land and the appraisal and purchase of federal timber sales.

In 1971 Mr. Dennison began working with Western Lumber Manufacturers, Inc., as Assistant Manager. Later his title was changed to Vice President, Timber Sale Services, which was more descriptive of his responsibility at the time. The organization's name was subsequently changed to Western Timber Association (WTA). In 1980 Mr. Dennison assumed the responsibilities of Executive Vice President of the association, the position he holds today under the title of President.

Mr. Dennison is a Director and Past President, Sierra Cascade Logging Conference; Past President, California Alumni Foresters; and Past President, Cal Forestry Club. He is currently Director, Pacific Logging Congress; Chairman, California Industry Contract Committee; and a Member of the Society of American Foresters' Community Stability Task Force.

He has authored and presented professional papers to a wide variety of audiences, and has, on many occasions, given testimony on behalf of the forest products industry to State legislators and committees of the U.S. Congress.