Talking Points on the Environment #19

The Myth of Subsidized Timber Sales

Each year, the U.S. Forest Service loses money on timber sales programs in at least fifty national forests. Environmentalists have been quick to claim that these losses occur because these programs amount to little more than corporate welfare. The facts suggest otherwise:

Claim: The U.S. Forest Service subsidizes the timber industry, selling timber to the industry at bargain-basement prices.
Fact: The U.S. Forest Service -- like private, county and state timber owners -- sells most of its timber to the highest bidder in competitive auctions. The market place, not the Forest Service, that sets the price.

Claim: The failure of the Forest Service to make money on forests in rugged, high-altitude areas with arid or harsh climates demonstrates that these forests are unsuitable for logging and such logging should be stopped.
Fact: The Forest Service loses money on most of the ten national forests in Montana where the terrain is rugged and the climate is arid. But on nearby state forests, the state makes money selling its timber. Over the 1988-1992 period, the state generated $13 million in income while the Forest Service lost nearly $42 million selling timber.

Claim: The Forest Service loses money on its timber sales because it does not charge enough for timber.
Fact: Bureaucratic inefficiency is one reason why the Forest Service fails to make a profit on timber sales. Unlike many state and private timber operations, the Forest Service is under no obligation to turn a profit on timber sales and thus has little incentive to keep costs low. For example, from 1990-1993, the St. Louis County Minnesota Land Department spent just $12.61 to produce a thousand board feet of timber while Forest Service spent $34.12 to produce that same amount from Superior National Forest. The Forest Service's administration costs were 30% higher and its preparation costs were nearly double those of St. Louis County.

Claim: Planning and regulatory procedures carried out by the Forest Service ensure the agency is among the best in protecting the environment from logging impacts.
Fact: Ironically, despite its high forest planning and environmental study costs, the agency failed to out-perform state and local foresters in protecting watersheds from logging impacts. In field performance audits conducted by independent teams of experts, both the state of Montana and St. Louis County, Minnesota scored higher than the Forest Service in carrying out procedures that mitigate logging impacts.

Information from "Turning a Profit on Public Forests," by Donald Leal, Political Economy Research Center (Bozeman, Montana)

Issue Date: December 7, 1995.

Talking Points on the Economy: Environment #19, published by The National Center for Public Policy Research, 501 Capitol Ct NE, Washington, D.C. 20001 Tel. (202) 507-6398, Fax (301) 498-1301, [email protected], http://www.nationalcenter/ For more information about Talking Points on the Economy: Environment #19 contact Bob Adams at (202) 507-6398 or [email protected]

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