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
- 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
- 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.
20002 Tel. (202) 543-4110, Fax (202)543-5975, [email protected],
http://www.nationalcenter/inter.net. For more information about Talking Points
on the Economy: Environment #19 contact Bob Adams at 202/543-4110 or
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