THE MISSISSIPPI LEGISLATURE

The Joint Committee on
Performance Evaluation and Expenditure Review

Report # 374

A Policy Framework for Evaluating Options for Further Encouraging Mississippi's Nonindustrial Private Owners of Forestland to Reforest

March 5, 1998

Introduction

Good stewardship of forestland in nonindustrial private ownership is important because this ownership category accounts for the majority of forestland in the United States (58%) and in Mississippi (72%) and supplies slightly over half of the nation's commercial timber. Over the past decade, forestland held by nonindustrial private owners has become increasingly important to the U. S. timber industry, as timber production from other traditional suppliers has declined significantly.

In response to a legislative request, PEER conducted this review of options for further encouraging nonindustrial private owners of forestland in Mississippi to reforest.

Overview

PEER found no convincing evidence that there is an urgent problem related to meeting any of the objectives for private nonindustrial forestland management which are specified in state law (e.g., insuring adequate habitat for wildlife, preserving and protecting the continuous growth of timber). Current research, based on the best data available, shows that current reforestation incentive programs are sufficient to generate a slight increase in Mississippi's pine and hardwood timber inventories by the year 2009.

If the general objective of new reforestation incentive programs is to increase significantly the state's timber inventory, it is possible that this objective could be accomplished by allowing free market pressures to drive reforestation efforts. However, professional foresters disagree as to the effectiveness of timber prices as an incentive for nonindustrial private forestland owners to invest the approximately $100 per acre needed to reforest using artificial regeneration. While the subject of debate among professional foresters, some believe that the long-term nature of investment in reforestation discourages many nonindustrial private forestland owners from choosing this option over options with more immediate tangible benefits&emdash;e.g., using proceeds from a timber sale to make a large non-timber-related purchase.

Regardless of whether the state creates an artificial incentive or depends on market forces to drive increases in reforestation, current ancillary resources (i.e., professional staff to assist with development of forest prescriptions, available seedlings, and vendors to plant the seedlings) may be inadequate in the short term (one to three years) to support large-scale increases in reforestation.

Options and Recommendations

Although current information available to PEER does not provide strong support for the existence of a broad public need for immediate action to increase current reforestation rates, some forestry stakeholders perceive an economic development opportunity associated with significantly increasing the supply of timber available for commercial use. PEER considers the following options to have potential for increasing reforestation rates.

Option 1:	Enforce provisions of the state's Forest Harvesting Law requiring reforesting following harvesting, but amend the law to ensure effective reforestation after pine, hardwood, and mixed timber harvests.
Option 2:	Expand the state's cost-share program by increasing program funding.
Option 3:	Establish a targeted state income tax credit program.
Option 4:	Attach pre-conditions to eligibility for reduced assessed land values on forestland property.
Option 5:	Establish a low-interest revolving loan fund.
Option 6:	Examine the feasibility of greater reliance on volunteers to staff educational programs.

PEER also recommends that the Forestry Commission consider the viability of options used by other states to enhance cooperation among individuals and entities involved in forestry issues.

PEER further recommends that before the state adopts any potentially costly options for encouraging nonindustrial private forestland owners to reforest, that the Forestry Commission provide adequate documentation of the objectives of and need for any new public program the commission proposes or supports. Prior to approving any new public program, the Legislature should require the Forestry Commission to determine relevant characteristics of nonindustrial private forestland owners, including a determination of which owners choose not to reforest and why, as well as which owners choose to reforest and why. The Forestry Commission also should analyze the cost-effectiveness of any option prior to requesting legislative approval. For purposes of accountability, program information provided to the Legislature should include:

• a clear, measurable, statement of specific objectives which the option is intended to address (this enables policymakers to measure whether the incentive is effective). For example, the broad objective of "increasing the number of harvestable trees in the state for purposes of economic development" could be refined to "increasing the state's x type of timber inventory by x% by x target date;"
• suggestions for periodic monitoring of the incentive in terms of its efficiency and effectiveness in accomplishing stated objective(s); and,
• particularly with respect to any of the incentive options which require the commitment of state public funds, a proposed prerequisite that program participants provide evidence of adherence to principles of sound forest stewardship in the use of said public funds, preferably through the professional development and implementation of a forest management plan, as attested to by professional foresters.

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If you have questions about PEER, send e-mail to director@peer.ms.gov.