Notes
7.2 Who Owns the World’s Planted Forests?
In Chapter 2 the trend in ownership from public to private in the last 30 years was noted, and in FAO’s thematic study of planted forests this change was explored further. Chapter 4 reports data showing that for planted forests for pro- duction, public ownership fell from 70% to 50% in the last 15 years, but where the protective function was uppermost, the bulk remained in public ownership.
And, for both function types, there is an additional trend to increased small- holder ownership. However, the bigger questions remain: are these trends, based on limited data, representative of the whole planted forests estate and will they
continue into the future? Also, drawing on Neilson (2007a), evidence from cor- porate investment and private-sector funding is examined in detail.
InPolicy that Works for Forests and People, Mayers and Bass (2004) point out that companies that take the longer view in their investment decisions are moving towards planted forests because of practical, logistical and tenure advan- tages. Indeed, they go on to say that most of the world’s high-yielding forests are owned by corporations with access to the technologies that can support such production. But ownership isn’t simply about property rights to land and forest;
as noted later funds are becoming more mobile with investors’ time-horizons often very short by forestry standards. Also, as governments – in effect the public sector – divest themselves of physical assets and resources, the process is often in stages – outsourcing, transferring of rights and ultimately of ownership itself.
Garforth et al. (2005a), in examining this evolution, also introduce the special case of restitution, where previously owned assets that were seized by the state are returned or restored. They cite an estimated 3–4 million new private forest holdings, albeit owning only a few hectares each, across the ten accession coun- tries joining the EU in 2004. For Romania, Ioras and Abrudan (2006) report that some 2 million hectares have been legally claimed, but restitution is limited to 10 ha per individual, 20 ha per community individual, i.e. forests previously owned by towns and villages, and 30 ha for churches and schools. It underscores the trend of increased smallholder ownership as well as that of decreased owner- ship by the public sector.
The climate of decentralization suggests these trends will continue. There will always be a continuum of privatization models, but increasingly governments will confi ne their role to setting an enabling and regulatory framework through an array of fi scal, policy and legal instruments, rather than resource owners and managers. How much the distinction between production objectives for planted forests, which generate direct economic returns, and protection objectives dif- ferentiates future ownership is unclear. Traditionally the state is seen as custodian of land and landscape managed for the common good – national parks and reserves for protecting the environment and important ecosystems, and the pri- vate sector for commercial forestry activity, but this is not essential. Legal require- ments on the private sector to deliver such non-market benefi ts, through felling regulation, structured incentives, silvicultural guidelines and codes of practice, allow the state to deliver its duty as custodian without ownership, a route par- tially followed in the UK and wholly so in New Zealand.
The long-held view that state involvement in forestry, including planted for- ests, alongside the private sector, enabled the regulatory environment to be bet- ter informed through on-site experience of costs, returns, markets etc. remains true, but is not considered essential today. It does not apply in agriculture, and though the long timescales in forestry are a special case, there are other means to garner the information than being a participant. It also removes the contra- diction, or potential confl ict of interest, of government as regulator and as manager.
A more uncertain question concerns afforestation for carbon sequestration.
Will the small owner benefi t? Are massive carbon-offset plantings best managed by para-statal organizations or non-profi t bodies to ensure their permanence and
compliance? Or, with appropriate controls in place, will carbon accounting become another income stream for any planted forest regardless of ownership?
Planted forests appear increasingly to be the domain of the private sector, both the corporate on the one hand and the private smallholder on the other, with the state playing a diminishing role except for providing and policing the regulatory and enabling environment. Consequently supply of forest products will increasingly be in private hands, with the state retaining ownership only of areas of high conservation, heritage or recreational value. Even where the state has other reasons for retaining ownership of the land, e.g. political or on behalf indigenous peoples, rights are often assigned to the private sector to establish and manage planted forests.
Before considering the major funding and investment possibilities and con- sequences of this trend in ownership, further comment is made on the increase in smallholder ownership.
7.2.1 The issue of scale for the small owner
The proliferation of smallholder ownership can bring problems of access to market intelligence, poor technical knowledge and support, ineffi ciency in operations – or simply poorer management (Ioras and Abrudan, 2006), as well as increased bureaucracy for state administration (see Box 7.1; from Carle, 2007). Traditionally extension services, common-interest groups and coopera- tives have responded to such weaknesses. In principle, the issues are no different from smallholder farming, but longer rotations and the usually smaller returns from planting and growing trees limit what solutions work. While some success
Fig. 7.1. A signifi cant harvest for the owner of this 12 ha planted woodlot, but a more complex contribution to the overall wood supply market.
Box 7.1. Vulnerabilities of smallholder plantings
A signifi cant portion of planted forests (including forest plantations and the planted component of semi-natural forests) are owned by smallholders. Of the 272 million hectares of planted forests globally (excluding trees outside forests), smallholders (less than 100 ha, greater than 0.5 ha) own 26%, the corporate private sector 15% and governments 59% (FAO, 2006a). Moreover, of the 205 million hectares of planted forests managed for productive functions, small- holders own 32%, the corporate private sector 18% and governments 50%.
Smallholder planted forests are characterized by diverse sites, mechanisms, species, silvicultural practices, rotations and end uses tailored to suit smallhold- ers’ own livelihood needs and support sustainable land use. In developing coun- tries smallholder plantings can contribute positively to achieving food security and alleviating poverty. For these reasons governments and the corporate private sector can establish policies and incentives that encourage smallholders to invest in planted forests. However, many smallholders, particularly in developing coun- tries, face unique commercial, technical, policy, legal, regulatory and institutional vulnerabilities that need to be recognized and overcome. These may include:
Lack of clear enabling policies and procedures regarding land tenure, crop
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ownership and rights to manage, harvest, transport and market forest products.
Complex incentives and insuffi cient access to development funds to invest
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in planted forests, exacerbated by high interest rates and the stringent re- quirements for collateral against funds borrowed.
Weak technical knowledge and poor access to information on germplasm
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and reproductive materials, nursery practices, site preparation, planting, tending, silviculture, protection (against insects, diseases, other pests, fi re), harvesting and the measurement of volume and value of harvested forest products.
Weak commercial and business knowledge and weak bargaining power in
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contracts and agreements (harvesting, transport, sales).
Limited access to market information on products, specifi cations, market
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prices, harvesting and transporting contract rates and the implications for investment and management decision-making.
Fragmentation and isolation of small production units, and attendant prob-
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lems of basic communications and networking.
Insuffi cient resources of government technical and extension services
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to support smallholder investment in planted forests.
Disadvantages that management tools for sustainable forest management
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(e.g. codes of best practice, certifi cation) can represent for smallholder investment.
These vulnerabilities can increase risk and result in suboptimal technical and commercial performance of smallholder investments in planted forests – poor quality of planted forests and forest products, low yields, high contract prices, low market prices and inequitable sharing of benefi ts.
Smallholder associations, in addition to governments and NGOs, have an increasingly important role in representing their members in policy dialogue, providing technical support and extension and assisting marketing and busi- ness decision making to improve the smallholder returns on investment in planted forests.
has been had, e.g. in South Africa or non-industrial private forest in the USA, and in small island states such as the Solomon Islands, smallholder plantings can be a way of bridging a resource gap (Raymond and Wooff, 2006), the outlook for development of small planted forests as a critical component of the planted forest resource is not yet mature in market terms (Fig. 7.1) as well as the issues listed in Box 7.1. If failure to mature this sector is widespread, there is the risk, noted in Chapter 4, of wholesale switching out of tree-growing into another land use with the supply consequences this entails.
Of course, mobilizing many small-scale plantings has long been in the suite of national forest policy objectives. But these are often for non-market benefi ts, either centrally inspired such as China’s massive village-based/led planting cam- paigns for soil protection, or with incentives to deliver environmental benefi ts, such as the current England Forestry Strategy, rather than economic returns.