One of Minnesota’s largest forest conservation programs recently was scrutinized by the Office of the State Legislative Auditor, which determined, in essence, that the program has admirable goals but less-than-admirable execution.
Unless you own forest acreage, you may not know of the Sustainable Forest Incentive program, which affects nearly one million acres of privately owned forest land in the state. Intended to encourage landowners to make a long-term commitment to forest management, the program provides them with an annual “incentive payment” of $7 per acre. Between 2003 and 2013, the state made $44 million in incentive payments.
So what do we, the people, get for our money? The auditors found this was a tough question to answer, because the incentive payment is not linked to the program’s purpose. What we are supposed to get is forest land managed to sustain benefits such as timber production, recreational use and wildlife habitat, as well as an assurance the land will not be developed or converted to other uses.
On large, industrial properties, which represent about half of the land enrolled in the program, we also get an assurance of public access for recreational activities, including hunting. The auditors found that although landowners with over 1,920 acres (3 square miles) enrolled in the program are required to provide public access; they don’t receive any additional payment for doing so. Nor are landowners with less than 1,920 offered a premium payment for allowing public access.
The auditors found the state hasn’t done a very good job of making sure we get what we pay for. Landowners are required to have a forest management plan written by a DNR-approved forester in order to participate in the program. But compliance with the management plan or with the program’s ground rules is largely self-reported. The auditors found some landowners developed their land and continued to receive incentive payments. Penalties for noncompliance are limited and seldom used.
Since it is difficult, perhaps impossible, to determine it the Sustainable Forest Incentive program is effectively sustaining our forest resources, the Legislative Auditor’s primary recommendation to the Legislature can be summed up as: Fix the program, or scrap it and start over. Either way, the Legislature must find ways to link the program’s goals of encouraging sustainable forest management with the payment for doing so.
While you might argue with some validity that this program is no more than a subsidy to the landed gentry, government incentives to protect private forests have a long history in Minnesota. Beginning in 1927, with the auxiliary forest law, followed by the tree growth tax law in 1957 and the Sustainable Forest Incentive Act in 2003, Minnesota has offered tax reductions or incentive payments to forest landowners.
The State Auditor notes, without passing judgment, that the auxiliary forest law and tree growth tax law had low levels of participation. One could argue that aside from industrial landowners, the same is true for the sustainable forest incentive program. Minnesota has over 7 million acres of private forest land with less than 1 million acres enrolled in the program. It also begs the question: Is forest management any different on the lands not enrolled in the program?
Regardless the answer, the ongoing threats to our wealth of forest land are real. For more than a century, Minnesota has relied upon its forests as a source of wood fiber. The timber industry is the economic cornerstone of many northern communities. Forest-based recreational activities like hunting and snowmobiling are enjoyed by residents and visitors alike. Both industry and recreation require large tracts of undeveloped forest land.
In the past decade, we’ve seen substantial changes occur within our privately owned forests. Some industrial owners have subdivided and sold their holdings, because it no longer makes financial sense for them to own and manage “working” forest. At least one company began leasing the hunting rights to its property, much to the dismay of deer hunters who had enjoyed public access to those lands for generations. The real estate boom of the early 2000s led to a land rush as friends and families bought lands for hunting camps.
While none of the above changes are necessarily “bad’ for the forest, they represent a departure from a relatively stable past where industrial ownership was managed for timber production and public use for activities like hunting was allowed. The changes bring uncertainty to wood supplies and public access formerly taken for granted. Adding to the uncertainty is the present downturn in the state’s timber industry which has closed mills across the north and reduced the demand for wood. If that isn’t enough, add in the potential changes to trees and wildlife that may occur as the climate warms.
About the only thing that remains certain is Minnesota has about 17 million acres of forest, of which 44 percent is private. While no one can look into a crystal ball and predict the future, we can reasonably assume the demand for forest products eventually will improve as the industry adapts to changing or emerging markets. Recreational activity may increase, too. Abiding by the principles of sustainable forestry allows us to meet that demand and protect our forests, too.
The challenge facing lawmakers is to find a way to reward property owners for practicing sustainable forest management based upon measurable outcomes. Not only must they develop a system that is fair and equitable for participating landowners, but they will have to prove to taxpayers that doing so leads to better forest management. Right now, taxpayers are making a significant investment in the sustainable forestry incentive payments with little tangible return.
