Actuality

Why do we plant what we plant and what should we plant? The economic perspective of forestry decisions

Daniel Rodríguez Cebreiro
Financial Director of the Forestry Association of Galicia

Cristina Verde Figueiras

Much has been said (and criticized) about the decisions of the people who own and manage private Galician forests (individual private forest owners and private communal neighborhood forest owners) in terms of the tree species to plant. In the majority opinion of Galician society, the content of what is made public, it is considered that the people who own and manage forests only pursue the economic profitability of their forests, without taking into account other aspects of sustainable forest management.

But if you want to be fair when you have an opinion on the management of forest property, you should analyze the planning instruments with which these forests are managed, or question the managers about their concerns when dealing with the work to be carried out on their properties forestry. And those who do this prospective work will probably come to the conclusion that in the majority of cases, when drafting those management instruments or choosing the forestry model to be applied by the person managing the forest, it is not always the economic aspect what is most taken into account, but most of the owners are rather carried away by other subjective or emotional issues, without taking into account that, in order to achieve sustainable forest management, it is necessary that this is economically viable. It is on this aspect that this article will focus on.

The management of private forests

In the case of privately owned forests, the owners could be roughly grouped into three groups based on the management they carry out:

1. Those that only have a pure and hard economic criterion, a group that would include those that focus on the exclusive production of fast-growing species.
2. Those who have the same economic criteria, but who bet on the diversification of species.
3. Those who are driven by a more sentimental or environmental criterion, which an associate of the Forestry Association of Galicia defined as "romantic", which are those who prioritize aspects other than the purely economic and who have been, in general, those people who practice forestry of deciduous trees for the production of quality wood or forest fruits, mostly chestnuts.

The management of the private communal neighborhood forests

Although much has been improved in this aspect over the last few years, the truth is that many of the planning instruments used to manage private communal neighborhood forests still have planning that lacks an adequate analysis of their economic viability. Sometimes this is because the people who write those planning instruments do not take into account that the planning they are trying to develop may not contribute to creating a long-term economic sustainability of the forest. In these cases, and taking into account the instruments that are currently available to make these simulations, spreadsheets, it is a shame not to spend some time assessing whether the mass distribution proposed for a certain forest parcel guarantees its viability economic

On other occasions, it is the governing boards of the private communal neighborhood forest owners, or their assemblies, who seek to turn their neighborhood forest into an oasis of deciduous trees, without taking into account the economic cost of maintaining those plantations. In these cases, if you do not have species with shorter shifts (or another type of income) that help to finance the work in those masses of deciduous trees, there is a danger that the forest will end up in a state of certain abandonment, which is the most negative scenario in case of fire, since those masses not managed properly will feed the voraciousness of the flames.

The abandoned forests

An ever-increasing number of people who own or manage forests (mainly individual private forests, but also some private communal neighborhood forests) no longer see any more perspective than having their forest properties "uncultured", without doing any type of management. Depending on where these forests are located, sometimes this more deficient (or non-existent) management becomes a serious threat, both for the sustainably managed forests around them, and for the civil society that lives next to them. This abandonment is more painful for society in the event that those forests are located in areas where parcel concentration has been carried out, turning them into useless public investments worth millions.

When high productivity forests are not managed, as many of the Galician forests are, the lost opportunity is even more regrettable. If you ask those who practice it about the causes of this abandonment, they will surely cite reasons such as the lack of money to invest in the forest, the small size of the properties that make them unprofitable, the lack of buyers for the product obtained, the lack of time to attend to them, the discouragement produced by seeing how a fire destroys the work of years in a few hours, or the ignorance of the exact location of their properties...

But today, Galician society has tools that can stop that process, being able to reverse that trend in the case of professionalizing an activity, forestry, which usually, because it is a complementary activity to another main one, has never achieved a role protagonist for its holders.

The figure of forest groupings of joint management, in which their requirements have been made more flexible, so that a better adjustment is allowed to the reality of the promoters and to that of each territory, can be a way to put those abandoned forests into production, helping improve the well-being of the society that lives in its surroundings. This, together with lower taxation, should allow economic funds to reach forestry operations, giving these groups a financial muscle that will allow them to complete the forestry models that have been going on for decades.

How to order and manage a forest with economic sustainability criteria

Of course, not all decisions in life have to be made based on an economic analysis. If that had been the case, perhaps many people would not have had children, nor would they have bought a house or car, nor would they have gone on a trip or holiday, or even some would not have been members of the Galicia Forestry Association, for example, but it is also true that, especially in in the case of private property owners, the emotional benefits of working outdoors, watching trees grow, or harvesting fruit can imply well-being and satisfaction that are difficult to value economically.

Even so, in the case of forest management, especially in larger areas that do not have many resources or recurring income, ignoring the economic consequences of forestry decisions can lead to situations of abandonment. And it is for this reason that, with all the uncertainty that can be generated by long rounds of cutting forest species, certain criteria are proposed below that should be taken into account when trying to manage a forest:

• There are multiple factors that affect the expected profitability, not depending only on the productivity of the land where the mass is going to be installed. In many cases, the level of mechanization of the plot or the appropriate choice of species is more important.
• It is also not appropriate that decisions in the field of forest planning are adapted exclusively to subsidies, since it may lead to the fact that, what is entered via subsidy, may be lost in productivity and in higher operating costs.
• No one can guarantee us that today's subsidies will be in force when it comes to replanting again, so it is essential that future income allows us to repeat the applied forestry model, in addition to giving the deserved economic return to the person who develops that activity and who risks his capital.
• A high price for a certain type of wood today does not guarantee us that when we cut it we will get a similar price. It is advisable to escape from trends or one-time price increases, and focus more on the trends and the future prospects of the use of that wood, since a greater or lesser demand will have a very important impact on the price.
• The supply-demand relationship is what sets the price, so it is of no use if we have wood of great quality or with great growth, if the supply chain is not going to allow us to put that wood on the market. It is not advisable to get carried away by information that talks about the performance of one or another species in distant places, since it is not good to have a high percentage of the area occupied by species "not in demand" in the local market, which may end up forcing us to sell them as firewood, with prices significantly lower than expected.
• It must be taken into account that forestry does not have the flexibility that other activities in the primary sector have. A forester who makes a mistake will not realize it until several years later, and after making a significant part of the necessary investment. It is essential in the forestry activity to "get it right the first time".
• The use of natural regeneration, if it is vigorous, is the best possible option, since we will be using a plant already adapted to our land, the costs are usually lower and, what is even more important, it delays the moment of investments by having to do the first work three or four years after the cut, and not the following year.
• Species changes are very expensive if the previous species has good natural regeneration, and must be planned taking into account the impact this additional cost will have on the economic viability of the rest of the forest.
• The maintenance of tracks and their margins should not be seen as an expense, but an investment, because it will facilitate access to the forest to carry out its management; will reduce the costs of cutting and removing, and therefore we will receive a higher price for the sale of standing wood and, above all, because it is crucial in the event of a fire, since it allows access to the extinguishing equipment, giving them a better scenario safe place to develop their work.
• Continuous cuts in the bush do not guarantee that the bush will not burn. On the contrary, and above all in the forests with a lower level of mechanization, if there are no recurring resources, it can lead to the neglect of other crucial aspects for the defense of the forest in the future, once the funds are exhausted. There comes a certain age in the forest mass, which will depend on the species planted, when it will not be necessary to make new cuttings since the tree "self-manages" the surrounding biomass. Pretending to have a garden is a luxury that few forest managers can afford.
• The rates of return (profitability) of forest plantations are low as a result of the large number of years it is necessary to wait to recover the investment. For this reason, placing the masses with shorter cutting shifts in the most mechanized areas seems the most appropriate, so that those forestry models that will be repeated more often have the lowest possible costs.
• Continuing with the previous argument, protective stands (intended to provide environmental services) should be installed in the less mechanized areas of the forest, bearing in mind that, if diseases and fires allow, it will only be necessary to develop the forestry model once. This way we managed to leave the surface with lower exploitation costs for the species that will be cut repeatedly over time.

Although the application of the above criteria does not guarantee with total certainty that all objectives will be achieved, they will contribute to a progressive improvement of the financial health of the forest to guarantee its economic viability and, as a result, the ability to develop sustainable forest management.

And finally, we should not forget that nature is our ally in this entire feasibility plan because sooner or later, it will be the one that takes over the management, allowing us to walk around our forest observing how everything "is in balance” and how costs are being reduced.