· Agriculture · " and Forestry:. Competition or. Coexistence? .

Price 5s. Od. net

OXFORD UNIVERSITY PRESS LONDON: GEOFFREY CUMBERLEGE

By H. H. WOOTEN Agricultural Research Service, U.S. Department of Agriculture1

UNITED STATES OF AMERICA

T HE task assigned to this article is to describe the parts played by agriculture and forestry in the national economy of the United

States, explaining whether they are competitive, supplementary or joint industries, and how they came to be so. This is followed by a brief account of significant changes which are in progress or in prospect, the measures proposed for effecting them and the results it is hoped to achieve. This is an assignment of considerable propor­tions, for agriculture and forestry are important in terms of vital products, income and employment. Some large regions of the country are chiefly agricultural, in others forestry is predominant, and in still others the two industries are so inter-related that it is difficult to describe and evaluate them. separately.

Much of the present commercial forest land, however, is not in direct competition with agriculture as it is located in mountainous, swampy or other areas better adapted to trees than cultivated crops. Likewise, much of the most productive cropland, especially the prairie and plains regions, are naturally better suited to farming and ranching than to forestry. Trial and error in use of land in the forested regions has restricted most margins of competition. This process is still in progress in fringe areas between farming and forestry in the south and east, and to a more limited extent in the west.

The land that comprises the continental United States is made up of many different kinds. z Depth and fertility of the soil, slope of the surface, elevation, vegetative cover, climate and value all vary widely, thus affecting the use made of the land. Changes in the demand for field crops and for timber which affect relative profitability have i'n­fluenced decisions on the use of land at different periods. Economic considerations should be emphasized as a major factor in the abandon-

' This paper is a personal contribution; it is not an official statement of the United States Department of Agriculture.

2 Roughly three-fifths of the total, or r,159 million acres, is in farms, and two-fifths, or 745 million acres, is not in farms. More than half the land not in farms, or 400 million acres, is used for grazing. But much of this large area is publicly owned and used jointly for other purposes, including forests, wild-game preserves, and watersheds to supply water for irrigation, power and other uses. For definitions of land in farms refer to: United States Bureau of the Census, I952. United States Census of Agriculture, z950, 2 vols. Washington, D.C.

170 AG RI CULTURE AND FORESTRY

ment of much cropland and its reversion to forest in the east, the con­version of grassland to cropland in the central states and west, and the clearing of forest land for cultivation in the Lower Mississippi Valley and in certain Coastal Plain areas.

Trends in requirements for crop and pasture lands

Theoretically, crops, pastures and forests compete for specific areas of land on the basis of comparative income. At times, this competi­tion may be significant, particularly on millions of acres in the south as between cultivated crops, high-grade pasture and use for timber. Even on the fertile prairie soils of the mid-west, pasture is profitable on considerable acreages of high-grade land. But ordinarily, from a broad national viewpoint, crops have first choice wherever they pay best, and pasture, or grazing uses, and forests are the residual claimants. 1

Crops and pasture are complementary uses, however, in that they contribute jointly to production of livestock and livestock products and are capable of more or less interchangeable use in the process. The area of land used for pasture in production of livestock products may be greatly reduced by using supplementary feed produced on arable land, or vice versa. Therefore, pasture requirements are somewhat less absolute than are those for arable uses.

With the growth of population, moderate shifts from pasture and forest to cropland are expected in the next three decades. If recent trends continue for the next twenty-five years, some 20 million acres of permanent grassland suitable for cultivation will probably be brought into the cropland-pasture rotation. In addition, possibly 10

million acres of fertile farm woodland and brushland will be cleared for cropland and rotation pasture, chiefly to improve the layout and add to the tillable acreages of existing farms in the farming-forested regions. At present, development of new crop and pasture land is encouraged somewhat by shifts of farmland to other uses. Areas occupied by cities, towns, parks, airports, reservoirs, highways and other special uses have increased greatly since 1910.2 Thus, competi­tion may again become keener among cultivated crops, pastures and

1 Johnson, V. Webster, and Barlowe, Raleigh, Land Problems and Policies, 1954. 422 pp. illus. McGraw Hill Book Co., pp. 196-228.

2 Wooten, H. H., lVlajor Uses of Land in the United States, U.S. Dept. Agr. Technical Bulletin 1082, 1953. 100 pp. illus.

• I

~ '

H. H. WOOTEN 171

forests for the lands needed to supply the increasing demands for agricultural and forest products. 1

Forest resources

Forest income. Forests are a basic resource. A huge quantity of forest products is needed for industrial and other uses. Together the forest-products industries are an important segment of the industrial economy. Each year they produce several billion dollars worth of lumber and other commodities. The forestry industry as a whole, including harvesting, manufacture and transportation of wooden products, is a permanent source of livelihood for several million people. In 1946, for example, it afforded work equivalent to 3·3 million full-time jobs with wages totalling $6·3 billion, and it contri­buted to the total national income an estimated $9·6 billion. 2

Farm woodlands are an important part of the farm economy in several regions. It was estimated that in 1947 the value of forest products obtained from farm woodlands (including both products sold and those for home use) was about $100 million, or 29 per cent. of the value of such products from all forest land. Ten states, all except one of which were in the south, each produced farm timber products valued at more than $25 million. Farm-forest products rank in the first ten among a total of more than fifty crops in the amount of in­come they produce.

Productive forests are needed for much besides their timber. Today, they are needed to help protect soils and watersheds, to guard against rapid run-off, erosion and damage to water supplies. It is in the public interest to build up and protect forests so that they can contribute more to the annual national income and to other needs, such as recreation and watershed protection. This in brief is the broad economic and social setting of forestry in this country.

Extent and ownership. The forest land areas in 1950 contained 606 ' million acres,3 exclusive of 14 million acres in parks and other areas

set apart for special uses. Of this area, some 457 million acres were classified as commercial forest and about 149 million as non-com­mercial. Ownership of commercial forests was as follows: National

1 Wooten, H. H., and Anderson, James R., Our Agricultural Land Resources, U.S. Dept. of Agriculture, Agricultural Research Service. Publication in press.

2 U.S. Forest Service, Forests and National Prosperity: A Reappraisal of the Forest Situation in the United States, U.S. Dept. Agr. Misc. Pub. 668, 1948. 99 pp. illus., pp. 1-2, 13-16; and Crafts, Edward C., and Deitz, Martha A., 'Forest Resources and the Nation's Economy', U.S. Dept. Agriculture Yearbook (Trees), 1949, pp. 721-30.

3 U.S. Forest Service, I9SO. Basic Forest Statistics. 15 pp. processed.

B 4776 M

172 AGRICULTURE AND FORESTRY

forests 73·5 million acres; other Federal 15·4; state, county and municipal 27·1; private farm 135·3; and private industrial and other 205·9 million acres. About 116 million acres of commercial forest were in public ownership and 341 million acres were privately owned. Large blocks of forest are found in parts of the three major divisions of the country, north, south and west.

Requirements for timber. It is estimated that some 40·5 billion board feet 1 of lumber were consumed in the United States in 1954. In the peak year of 1906, during a period of rapid agricultural and industrial expansion, consumption of lumber amounted to 45 billion board feet. In the last few decades, lumber has been displaced in part by other competitive materials, and further substitution in a number of uses is likely. Nevertheless, some increases in consumption may be expected, assuming continued population growth and increases in national mcome.

Consumption of pulpwood in 1954 is estimated at 28 million cords2-

about 2·7 per cent. higher than the previous peak year 1953. Produc­tion of veneer logs and other timber products, such as poles, piling, mine timbers and miscellaneous products also was at a high level in 1954. The trend upward is expected to continue.3

The general prospect for timber for the next two decades is one of high demand and tight supply. The extent to which new growth of timber can be brought into balance with consumption will depend on how well forest land is managed and how efficiently its products are used. There will be plenty of land for trees to grow on.

Only in the last fifty years has the United States begun to treat forests as renewable. Annual growth of timber is still less than half enough to meet current requirements and future demand on a sustained yield basis. Until quite recently the price structure re­flected the attitude that timber could be treated more as a product to be mined than as a crop. Standing timber was procurable at prices that did not allow for the cost of growing. Since 1940, however, the rise of timber prices has stimulated sustained yield production, and prices now appear to reflect the costs of protecting standing timber and timber growth. 4

1 12 board ft.=r cu. ft. 2 l cord=128 cu. ft. 3 U.S. Department of Agriculture, The Demand Price Situation for Forest Products,

r955, 1954· 31 pp. processed report, illus., for the Outlook Conference of the U.S. Dept. of Agriculture, Oct. 1954·

4 United States President's Materials Policy Commission, r952, Communication from the President of the United States transmitting the Report Resources for Freedom. U.S.

H. H. WOOTEN 173

Cropland and pasture resources

A fourth of the land in continental United States is cropland and a third is permanent pasture and grazing land. The remainder is covered with forest, or is in miscellaneous other uses. In round numbers, the present distribution of the cropland and pasture area of the country is as follows: cropland 478 million acres, including 394 million acres used primarily for crops, 15 million acres of wild hay, and 69 million acres used for pasture in rotation with other crops; with 630 million acres in permanent grassland pasture. The grassland pasture is exdusive of 320 million acres of woodland, pastured at certain seasons. 1

The cropland and pasture is distributed among 5·6 million farms and ranches of various types and sizes. An average of about 9·5 million workers, primarily farmers and ranchers, and members of their families, were employed in agriculture from 1945 to 1954. During this period, gross farm income averaged $33 billion per year. Deduction of production expenses left $19 billion as net income to farm operators from farming, or an average of $2,ooo per farm worker, and $16.95 per acre on the 1, 1 20 million acres of land used for cultivated crops, grassland pasture and farmsteads. The percentage of the national income attributed to agriculture averaged between 8 and 9 per cent. from 1945 to 1954.2 In 1946 the income attributable to timber re­sources was 5·4 per cent. of the national total. 3 In both cases the estimates are the values for elementary farm and forest products at the first stage of marketing and not after values added by processing or manufacture.

Requirements for agricultural products. In 1954 the volume of farm marketings and hoine consumption of agricultural products was about 50 per cent. more than the 1935-9 average. Civilian per caput food consumption in 1954 was 13 per cent. greater than in 1935-9. Much of the increase in demand for agricultural products can be attributed to the growth in population from 129 million persons in 1935-9 to 164 million in 1954. The projected population for 1975 ranges from

82nd Cong. 2nd Sess., House Doc. 527, vols. l and 5. Washington, D.C. U.S. Gov't Printing Office.

1 Wooten, H. H., Major Uses of Land in the United States. U.S. Dept. of Agriculture Tech. Bull. 1082, 1953· 100 pp. illus.

2 U.S. Dept. of Agriculture, 1953: Agricultural Statistics (777 pp.) pp. 546-7 and 565; and 1954: The Farm Income Situation Outlook Issue, I955, FIS-149-36 pp. pro­cessed.

3 Crafts, Edward C., and Deitz, Martha A., 'Forest Resources and the Nation's Economy', U.S. Dept. of Agriculture Yearbook (Trees), 1949, pp. 721-30.

174 AGRICULTURE AND FORESTRY

200 tO 220 million. l If this growth OCCurS, and the level Of COnSump­tiOn continues at the current level, agricultural requirements may rise another 40 per cent., thus indicating need for increasing the produc­tion of certain products likely to be in greater demand. This can be done by improvement of present croplands and pastures and by development of carefully selected acreages of land already in farms which are capable of continuous crop and pasture use.

Basic enterprise relationship between agriculture and forestry

Two land use situations. The diversity in types of land in different parts of the United States has meant variations in land management and land use practices. Management of cultivated cropland and improved pasture differs from that of unimproved range and forest land in such aspects as intensity of use and degree of investment. These uses on fertile prairie soil suitable to farming tend to restrict cropland and improved grazing land in the central states to a single primary use, that is, to agriculture, with possibly one or more limited supplemental uses. In other areas, unimproved grazing land, wood­land and brushland not well adapted to farming or to forestry because of deficient soil, or lack of water, often have one or more uses that are almost equal in value.

For example, in some areas in the south and west, which are poorly adapted to cultivation, forested land produces, in addition to timber, forage that is of considerable value to livestock growers. 2 On millions of acres of open pine forest land, and mixed areas of woodland and grassland, forage and timber are dual crops and their use must be efficiently co-ordinated if best results for both crops are to be achieved. 3 When properly managed, grazing can produce a significant supplemental income and reduce fire hazards. The income from cattle enables many woodland owners to carry their timber crops to an age most suitable for profitable marketing. Recreation, production of wild life and protection of watersheds also are important multiple uses of forest and grazing lands.

Agriculture and forestry-competitive. Agriculture and forestry are competitive generally in the northern, north central and the Pacific

1 U.S. Bureau of the Census, Illustrative Projections of the Population of the United States, By Age and Sex. r955 to r975, Series P-25, No. 78, 1953· 6 pp. processed.

2 Cassady, John T., and Shepherd, \V. 0., 'Grazing on Forested Lands', U.S. Dept. of Agriculture Yearbook (Grass), 1948, pp. 468-72, illus.; and ·woolfolk, E. J., Costello, D. L., and Allred, B. W., 'The Major Range Types', ibid., 1948, pp. 205-11, illus.

3 Connaughton, Chas. A., 'Grass and \Vater and Trees', U.S. Dept. of Agriculture Year­book (Grass), 1948, pp. 239-43, illus.

H. H. WOOTEN 175

north-west forests. 1 For example, in the northern forests and central hardwood forest regions, fertile and level forest land in farming com­munities adjacent to the prairie areas is subject to clearing because of the possible high annual crop production from such land when farmed

r efficiently. If not cleared for farming, the farm woodlots and small forest tracts are often cut over repeatedly for timber, and they are frequently overgrazed by livestock. In these regions the farmer or landowner must choose between use of his land for field crops or grassland pasture, or for forest exclusively. In the good cornland areas of the central states the choice has been use for agriculture, while in the less favourable soil and climatic areas in parts of the northern forest region the choice has been largely use for forest. Farming in the cutover region of the Lake states generally has not paid as well as farming elsewhere. Consequently much of the cutover land was not wanted by farmers. 2 With a greater population and a greater demand for agricultural products, more of the better situated of these lands probably would be used for farming.

In the hardwoods of the Corn Belt, grazing is incompatible with continuous forest management. Reproduction is destroyed, growth is reduced, and the producing power or quality of the site is seriously impaired. Furthermore, the forest grazing fails to maintain either the woodland pastures or the animals themselves. The data from three years of woodland grazing tests at the Pinney-Purdue Farm of Purdue University Agricultural Experiment Station supports these conclusions. 3

Agriculture and forestry-complementary. In contrast to the northern forests, in the southern coastal pine forests, western pine and pinyon­juniper forests and Pacific coast woodland-grassland areas, forestry and grazing are to a large degree complementary.4 In these areas not only are trees a crop which yields a good return from sale of forest

1 Marsh, R. E., and Gibbons, William H., 'Forest-Resource Conservation', U.S. Dept. of Agriculture Yearbook, 1940, pp. 458-88, illus.; and U.S. Dept. of Agriculture, 1948, Managing the Small Forest Farmers, Bulletin No. 1989, 61 pp. illus.

2 Titus, Harold, The Land Nobody Wanted, Michigan State Agricultural Experi­ment Station, Special Bull. 332, 1945. 43 pp. illus.; and Barlowe, Raleigh, Public Land Ownership in the Lake States, Michigan Agricultural Experiment Station, Bull. 351, 1948. 28 pp. illus.

3 Den Uy!, Daniel, and Day, Ralph K., Woodland Carrying Capacities and Grazing Injury Studies, Purdue University Agricultural Experiment Station Bulletin No. 391, 1934. 12 pp. illus.

4 Campbell, Robert S., 'Extension of the Range Front to the South', Journal of Forestry, 1951, 49 (11), pp. 787-89; and Wahlenberg, W. H., 'Pasturing Woodland in Relation to Southern Forestry', Journal of Forestry, 1937, 35 (6), pp. 550-6.

176 AGRICULTURE AND FORESTRY

products, but the forest land also supplies much valuable forage for cattle at certain seasons. Properly managed and co-ordinated with timber growing so as not to damage tree growth, range cattle or sheep raising is an important complementary enterprise. Supplementary farm feed or grassland pastures are necessary during part of the year in order to make the best use of the native forage.

Local laws and customs, however, affect the comparative positions of grazing and forestry. For example, forest landowners in many southern counties are faced with the problem of competition from range grazing, as the laws permit livestock to run at large on all un­fenced land. Owners can fence their land, but frequently the cost is excessive to timber growers, unless they have livestock to graze the land and bring in annual returns. In making decisions to fence, an important consideration is the type of timber, and whether cattle, sheep or hogs can graze the land without material damage. Hogs are competitive on long-leaf pine land because they destroy young pine trees, but in bottomland hardwoods they are complementary because they eat the nuts and acorns. In many areas of open forest, such as long-leaf pine, however, with proper management cattle grazing can complement forestry, but in bottomland hardwoods cattle tend to eliminate some of the best species.

Returns from trees v. cropland and pasture

Properly handled, a farm woodland is a valuable asset to its owner. Besides the saleable products it may produce, such as saw­logs, pulpwood, poles, piling, posts and cross-ties, it provides its owner with wood for fuel, fencing and buildings. This means a saving in the outlay of money for the upkeep of the place, as well as a tangible income such as may be derived from any other farm crop. The woods may also utilize and make productive parts of the farm not suitable for other crops, that is, the rough, steep, rocky and depleted lands. 1 In recent years, farmers' cash receipts from sales of forest products in six south-eastern states alone have totalled about $85 million annually. Development of local pulpwood markets in some areas has provided outlets for forest products from farm woodlots which were once considered too small for economical harvesting. 2

Returns from the Crossett Farm Forestry forties. In order to improve 1 Randall, Charles E., and Heisley, Marie F., Our Forests: What They Are and What

They Mean to Us, U.S. Dept. of Agriculture Misc. Pub. 162, 1944. 38 pp. illus. 2 Federal Reserve Bank of Atlanta, Bankers' Farm Bulletin, vol. 6, No. I. Jan. 1955.

H. H. WOOTEN 177

management practices on small forests in the south and to put the timber crop on an annual return basis, two 'farm forestry forties' were laid out on the Crossett Experimental Forest at Crossett, Arkansas, in 1937. One of these, known as the 'poor forty', was lightly stocked with pine and hardwood as are many other closely cutover farm woodland tracts in the southern states. The second tract, called the 'good forty', was well stocked, as are many unmanaged second­growth pine hardwood forests in the region. 1

Management consisted chiefly of fire protection and removal of low quality hardwoods to enable fast growing pines to occupy practically all the growing space on both forties. Inventories were made of timber stocking and growth and records were kept of costs of work and other expenses and of the returns from timber harvests.

At the prices that prevailed locally each year in which the harvesting was done, the fourteen annual timber harvests from the good forty from 1937 to 1951 produced a gross return of $161 per acre-$11.50 per acre per year-for timber cut and delivered at roadside assembly points. The gross returns from thirteen annual cuts made on the poor forty amounted to $90 per acre-$6.91 per acre per year.

If the logs and pulpwood from the good forty had been sold at the 1951-3 prices, the returns would have been $22 per acre, or approxi­mately two-thirds as much as the average cash receipts obtained in 1949 per acre of cropland and pasture in Ashley County-the county in which Crossett is located. On the poor forty, however, the returns from forestry at 1951-3 prices would have been $11.65 per acre-only a third.as great as those obtained on the average from the cropland and grassland pasture acreage. 2 The figures given are for comparative purposes. They indicate only in a very general way the returns from well-managed forests as contrasted with average farming. Un­fortunately, exactly comparable returns from alternative uses of similar lands for forestry and farming are not readily available.

Results of timber sales at three other experimental farm forests in the southern states for from five to ten years show that operators with fairly well-stocked pine and hardwood cutover lands, who apply good management, may expect average gross returns of $10 per acre from

1 Reynolds, R. R., Fifteen Years of Management on the Crossett Farm Forestry Forties, Southern Forest Experiment Station (U.S. Forest Service), Occasional Paper 130, 1953· 27 pp. processed.

2 Cash receipts from sale of farm products, exclusive of timber, for 1949 averaged $34.52 per acre of cropland and grassland pasture in Ashley County, Arkansas. U.S. Bureau of the Census, U.S. Census of Agriculture, 1952. z vols. Washington, D.C.

AGRICULTURE AND FORESTRY sales of timber and other products cut and delivered at roadside assembly points. This figure of $10 per acre is the combined return from forestry for the land and the operator's labour and other costs in producing and harvesting the timber products. 1 Somewhat com­parable returns have been received from second-growth woodlands in the northern states.

Cotton farms of the southern Piedmont, a region with soils of somewhat similar fertility to the areas in which two of the experi­mental forests are located, had average gross receipts per acre of cropland and grassland pasture to land and operators of $32.87 in 1947-<). Gross farm receipts in 1947-9 in the Mississippi River Delta, a region of the south where there is much fertile land, mechanized farming, and generally fair to good farm practices, were $76.89 per acre of cropland and grassland pasture. 2

Competitive clearing

In the east and south, much of the land that is used for farming has reverted to trees one or more times, and then has been recleared. It is estimated that, in the last two centuries, 150 million acres have been involved in this long-time rotation of forest, cultivated crops and pasture. Reclearing the land now is frequently less laborious and requires less time with use of power machinery than the original clearing, so that in the eastern states, even in the last three decades, much land has passed back and forth between cropland, pasture and woodland. Nevertheless, frequent reclaiming is an expensive and somewhat wasteful process. These shifts in use depend upon the need for land, the relative profitability of crops and pastures, and the vary­ing availability of other employment to farmers.

Conversions in use of land are continuous but the rate is now slower than formerly because ( 1) much of the poor cropland was retired before 1940 and (2) improvement and fertilization of existing crop­land and pasture is adding to production without great additions _in

1 Campbell, Robert A., Farm Woodland Management in the Southern Appalachians, Station Paper No. 41, 1954. South-eastern Forest Experiment Station; McCloy, T. A., Nlanaging Southern Piedmont Farm Woodlands Pays Dividends, 1952. South-eastern Forest Experiment Station; McGregor, Wm. H. Davis, Flatwoods Farm Woodland Improvement Pays, Circular 125, 1954. Florida State Agricult~ral Extension Service; and Longwood, T. R., Some Aspects of Managing Second-Growth Woodlands in Upper Nlichigan, Station Paper No. 29, 1953. Lake States Forest Experiment Station.

2 Goodsell, Wylie D., and others. Farm Costs and Returns, I953- Commercial Family Operated Farms, By Type and Location, U.S. Dept. of Agriculture Information Bull. 128, 1954. 44 pp. illus.

H. H. WOOTEN 179

acreages. Indications are that further large reversions of cropland to woodland cannot be expected in the eastern states. Instead, there will probably be some gains in the cropland and improved pasture area in the next two decades.

On many farms in the farming-forested regions, clearing good soil areas in brush or inferior timber trees can provide additional cropland to enlarge and improve layout of fields or needed pastureland and thus increase farm incomes. Such clearing of good land for field crops and pastures on going farms in developed communities in many cases is not in close competition with forestry from the viewpoint of com­parative returns.

On the other hand, settlement of new farms in a predominantly forest region frequently is competitive. First, the outlook is not bright for new settlement for a family that has little capital and which plans to clear land and get its main support from farming in an undeveloped

~ area. 1 Hard work and careful planning for several years would be necessary for success. The family could not expect to have many of the conveniences used in homes and on farms in the better agricultural areas. The outlook for forestry in much of the remaining cutover and predominantly forest regions is better than for farming, except for fertile land that is especially well adapted to farming near population centres.

For example, much of the Lake states cutover region, which com­prises the northern third of Michigan, Minnesota and Wisconsin, had been found to be poorly suited to agricultural use under present conditions. The pattern of farm development in this region is spotty. There are islands of productive farmland. In some instances, lands have been cleared or drained for cultivation and later abandoned. In other places, potentially productive lands still await clearing opera­tions. Only about a fifth of the land of the area is in farms and less than half of this is cropland. Almost 30 million acres are in public ownership, and about half of this is tax-reverted land. 2 Recent land and forest surveys in the Lake states classified three-fourths of the land in the northern cutover region as primarily suitable for forest use. 3

1 Johnson, Hugh A., Changes in Farming in the Lake States Cut-Over Region During the War, as Represented by Carlton County, Minnesota, U.S. Dept. of Agriculture. Processed report, 1946. 29 pp.

2 Barlowe, Raleigh, Administration of Tax-Reverted Lands in the Lake States, Michigan Agricultural Experiment Station Technical Bull. 225, 195r. 77 pp.

3 Lake States Forest Experiment Station, Forest Statistics for the Lake States, 1940. Processed; Titus, Harold, The Land Nobody Wanted: Mich. Agr. Exp. Sta. Spec. Bull.

180 AG RI CULTURE AND FORESTRY

In the Redwood-Douglas-Fir sub-region of northern California concern has been voiced by lumbermen, ranchers and others over the depletion of timber stands and the probable decline in the forest industry. 1 A study is underway in Humboldt County, Calif., under the auspices of the County Planning Committee, to evaluate the alternative uses of certain wild lands for timber growing, grazing and farming and the economic implications of such uses to the local economy. Soil surveys show that there are three general classes of land in the county: ( 1) Good forest land, generally not well suited to grazing or farming; ( 2) grassland not suitable for trees; and (3) border or fringe lands moderately adapted to forests or to grazing. In much of the Redwood-Douglas-Fir region there is little competition between timber growing and cultivated crop farming and grazing. Only in the border or fringe areas between heavy timber and semi­open grassland or converted areas can meaningful comparisons of alternative uses of land be made. 2

Impact of clearing and reversion on the timber supply

In the hardwood areas the effect of land clearing and reversion is not serious, as the supply of hardwood timber is relatively plentiful compared with the current demand. Land clearing in the softwood areas, however, has contributed to the current scarcity of the softwood saw-timber supply. Higher prices and better returns from softwood timber are encouraging the forestry enterprise and discouraging clear­ing in the pine regions of the south where much reafforestation occurs naturally when land that has been cleared is left untilled for a few years. Forests are being thus considered more and more as an alter­native land use of high priority in the south, and in other regions where soil and climate are favourable to rapid growth.

How ownership affects forest outlook

The character of ownership is a significant factor in the forest situation and the kind of action needed to keep it on a permanently

332, 1945; Wilson, A. D., Progress in Development of a Land and Timber Management Program in Northeastern Minnesota, Minn. Agr. Exp. Sta. Report, 1944.

1 Pine, W. D., Humboldt's Timber-A Present and Future Problem, California State Agricultural Extension Service, 1952.

2 For a discussion of the effective use of land see McDonald, Stephen L., 'Sustained Yield F~rest Management', American Journal of Economics and Sociology, vol. 13, No. 4, pp. 389-<)9, July 1954.

H. H. WOOTEN 181

productive basis. Private ownership, which accounts for 345 million acres, or 75 per cent. of all commercial forest land in the continental United States, necessarily is influenced by prospective cash returns within relatively short periods of years. Public ownership by Federal, state and local governments of the remaining 25 per cent. of com­mercial forest land largely has grown out of the need for good management of timber production, watersheds and other multiple uses. Often, direct cash returns from forest products are long deferred, or they are an unplanned result of tax delinquency.

Of the commercial forest land privately owned, 76 per cent. is in ownerships of 5,000 acres or less, with an average of 62 acres. Medium and large private forest holdings account for 24 per cent. of the acreage. Although the wide dispersal of ownership complicates good forestry practices, the evidence that private forestry pays where timber grows fast and markets are favourable is bringing improvement in forest management.

Availability of markets for forest products

Private forestry on small ownerships, like farming, has a major obstacle in some areas in that markets for a small volume of products :fluctuate and are inadequate. Owners of small tracts of woodland may not have the facilities or command the expert knowledge needed to obtain full market values for timber. This leads to exploitive practices on the part of both sellers and buyers of timber. Symptoms of timber scarcity and higher prices are now proving helpful in developing markets. Public education and extension foresters also are contributing to adoption of good forestry cutting and marketing practices. Whether the forest owner sells stumpage or converted products, he usually gains by looking over all likely markets and seeking expert advice before closing a deal. 1

Since 1945 substantial progress has been made in providing small­forest owners with technical assistance in woodland management. Public agencies furnish most of the assistance now available. This publicly sponsored forestry assistance is handled by state forestry departments and extension services in co-operation with the United States Department of Agriculture. It is intended for small forest owners who plan to do their own forestry work and it includes two closely related but distinet types of assistance: (I) Education in the

1 U.S. Department of Agriculture, Managing the Small Forest. Farmers' Bulletin No. 1989, 1948. 61 pp. illus.

182 AGRICULTURE AND FORESTRY

techniques of forest management and marketing; and (z) in-the-woods technical advice and service to individual forest owners. 1

Forest taxation policy

Forest taxation in the United States has passed through two stages of development. The first period, beginning in 1860, was marked by legislation which offered tax relief in the form of exemption, rebate or bounty, as an incentive to engage in timber culture. In general, these laws failed to stimulate timber culture to the extent desired. This fact, coupled with a growing interest in good forestry and its relation to taxation, led fifty years later to an era of legislation based on the yield-tax principle. 2

The principle of taxing the land annually and the timber only when it is cut has been advocated by many students of forest economics. At the end of 1951 fourteen states had timber yield-tax laws in effect. In Mississippi and New Hampshire the law provides for the exemp­tion of all growing timber from property tax and for payment of a yield tax on forest products harvested. The remaining states follow pro­cedures under which eligible lands may be classified under the law and become subject to its provisions. In most of these twelve states, classification is initiated only by the landowner. It is not compulsory.

Six states imposed taxes on severance of timber in 1950. Of these, three also had yield-tax laws. One of the three, Louisiana, exempted from the severance tax timber subject to the yield tax. The yield tax differs from the severance tax in that the yield tax takes the place of the property tax, while the severance tax is in the nature of an occupa­tional or privilege tax. The latter may be imposed in addition to the regular property tax and yield-tax payments.3

The report of the Forest Taxation Inquiry appraised the yield tax about as follows: The yield tax relieves the timber grower of tax payments in advance of income and thus it encourages sustained yield forest management, but it has serious drawbacks in administration from the viewpoint of both public officials and taxpayers.4

Measured in terms of acreage classified under the voluntary laws, 1 McArdle, R. E., 'The Small Woodland', U.S. Dept. of Agriculture Yearbook, r949,

pp. 173-6. 2 U.S. Forest Service, State Forest Tax Law Digest of r945, 79 pp. processed. 3 Marquis, Ralph vV., Forest Yield Taxes, U.S. Dept. of Agriculture Circ. 899, 1952.

so pp. 4 Fairchild, Fred R., and associates, Forest Taxation in the United States, U.S. Dept. of

Agric. Misc. Pub. 218, 1935.

I

H. H. WOOTEN

the record of the yield tax is not impressive. The total area of privately owned lands classified under the twelve optional state laws is just over 3 million acres. This is 2·6 per cent. of the total area of privately owned forest land in the twelve states. 1 The experience of the two states having mandatory laws since 1950 has not yet been sufficient for an appraisal of results. The fact that these laws have not been more widely used is an indication that many owners do not find the forest property tax too burdensome. The laws may act as a deterrent to excessive valuation by assessment officers.

The administration of the general property-tax laws and the amount assessed rather than the tax itself apparently were chiefly responsible for the problem of forest taxation from 1920 to 1935. Forest lands frequently were not assessed on an ability to pay basis but on the value that would be obtained by cutting the trees and selling the products. Over-assessment thus discouraged the maintenance of forest land on a permanent sustained-yield production ·basis, and contributed to tax delinquency and abandonment of cutover lands. In more recent years, where forest lands have been assessed at reasonable rates, the practice of good forestry has been encouraged, and there has been less difficulty in meeting taxes and in maintaining forest pro­perties in production. An examination of the tax situation today indicates that income and other sources of taxation have relieved the pressure for increased property taxes. Only in certain areas and in limited individual cases are property taxes a factor in liquidation, or an obstacle to good forestry practices.

Important factors in alternative uses of land

Physical factors affecting land use. The length of the growing season, the fertility of the soil, the slope and elevation and the extent of rainfall and the supply of water influence significantly the use and produc­tivity of land. An important relationship between forests, grass­land and water is that between land cover and water runoff. Improved vegetative cover is a recognized method of stabilizing stream flow, protecting water supplies and reducing damages from erosion, sedimentation and flooding. Grassland and forest cover may serve multiple purposes in reducing runoff and conserving moisture.

Soil, cover and land-capability surveys show that all land is not equally suitable for cultivated crops, pasture or forest. Directly

1 Shirley, Hardy L., 'Large Private Holdings in the North', U.S. Dept. of Agriculture Yearbook, r949, pp. 225-74.

AGRICULTURE AND FORESTRY

opposite results in farming may be obtained on nearby soils, one profit­able, the other unprofitable. The effects of clearing and grazing wood­land on water yields and erosion are significant among the factors that determine whether such use is competitive or complementary. For example, in the west it has been necessary to stop grazing in several specific areas to preserve water supplies and prevent excessive runoff and erosion.

Economic factors affecting land use. The acreage of land that is needed for production of food and other agricultural materials depends principally upon domestic demand, productivity of the land, livestock production per unit, and extent of exports and imports of farm pro­ducts. In studying these influences, it should be noted that not only has population increased substantially, but that in addition diets and certain other consumption items have changed in the last three decades. Because of these changes, shifts in acreages of certain crops are in progress. The total acreage of improved cropland and pasture probably will need to be increased gradually to care for the needs of the growing population for food and fibre, unless crop yields per acre and livestock production per unit are increased very substantially.

Great increases have occurred also in use of certain forest products, such as pulpwood for paper, cartons and fibre. Production of the needed timber and other wood products depends not only upon the areas devoted to this use, but also on the productivity and manage­ment of forest lands. Improved management of forest land as of cropland can bring substantial increases in yields per acre.

Where needed adjustment should be made and how the land re­sources may be best used to meet impending needs for agricultural and forest products are therefore of major importance. Present and future needs for cropland, grazing land and forests, the extent and location of areas available for the various uses, and possible changes in land use to meet these demands require careful investigation by public and private agencies before the changes actually become necessary.

How to compare the values of land for farming, grazing, forestry and watershed protection where costs and returns are spread over widely different periods of time and shared by different groups is a major problem in deciding between alternative uses of land. Returns from forestry often are long def erred, while those from farming and grazing may be received annually, or at most within a few years. The dis­count rate is an important element in the comparison between such long-time and short-time investments.

t

H. H. WOOTEN

The proper use of interest in calculations of costs and income from forestry is a much debated factor as it is for any other crop. Yet if money is invested in agriculture or in forestry, be it borrowed or owned, it is an obvious cost consideration, as are outlays for wages, taxes and rental or upkeep of equipment. The long-time nature and slow turnover in agriculture, given as reasons for government­sponsored credit, are exaggerated many times over in forestry where the enterprise must be carried a number of years before returns can be obtained. The risk in forest ownership and slow growth rates for certain species and areas have been reflected in the past by the cautious attitude of lenders on forest property as well as by other investors. With good management, however, including protection of trees from fire and pests, private forestry on suitable land is now classed by many people as a safe and certain investment yielding dependable income-justification for a moderate interest rate. 1

In all types of land conversions and investments, s4ch as shifts from forest to cropland or from cropland to forest, the available technical means, such as soil, slope, forest and land-capability surveys should be used to guide selection of the best land for improvement and to dis­courage improvement of uneconomic areas for crop production, or cultivation of areas which cause serious wastage of soil, water, forest and other resources. The rapid increase in births, the lower mortality in the last decade, and the approach of a larger population indicate that the problem of how to make productive use of our land resources is permanent, not transitory.

1 For discussions of costs and returns of forests see: U.S. Forest Service, A National t Plan for American Forestry, U.S. Senate Doc. No. 12, 1933· 73rd Cong., rst Sess., 2 vols.,

vol. r, pp. 893-903, and vol. 2, pp. 13 r9-28; and Marquis, RaJph W., Economics of Private • Forestry, 1939. 219 pp., pp. 24, 99 and 148-65.

Contents ef Volume /' · _ No. 1. THE PROBLEM OF SURPLUS AGRICUL­

TURAL P_OPULATlON. (October 1939) _

No.2. THE CHANGES OF EIGJ:ITYEARS IN AGRI­CULTURAL_ ECONOMICS; (October 1947)

-· No. 3. INTERNATIONAL WHEAT AGREEMENTS.

(September· 1949) · ·' , - '

No.4. THE CONSOLIDATION OF°FARMS IN six ' ' · COUNTRIES OF WESTERN EUROPE.

(May1952)

. _No. 5, LAND SETTLEMENT: THE MAKING_ OF -NEW FARMS: (September 1953)

- -

- No~ 6. ECONOMIC .b-SPE.CTS OF MECHANIZATION. ON MEDIUM-SIZED f ARMS. (June 1954)

•_'

Volt.fme II, No. r. REDISTRIBUTION OF FARM LAND IN SEVEN

COUNTRIES. (January r955)

.: .,

PRINTED IN

GREAT BRITAIN

AT THE

UNIVERSITY PRESS.

OXFORD

BY CHARLES BATEY

PRINTER

TO THE

UNIVERSITY