Chapter 12 Public Timber Supply under Multiple - Use Management

In many parts of the world, substantial shares of timber inventories are managed by government agencies. The objective of this chapter is to examine the potential influence of public timber production on market structure as well as on prices, harvest quantities, and economic welfare. National forest management in the United States is used as a tractable case study, but findings provide general insights into the potential market effects of interactions between public and private producers in timber markets. The United States has held a substantial portion of its forested lands in public ownership for more than 100 years. Currently the vast majority of public forests are managed by two different agencies, the USDA Forest Service and the Bureau of Land Management, with the largest share held by the Forest Service. The national forests (originally Forest Reserves) were controversial at their inception, and their management remains controversial today. While contemporary conflict has focused on various aspects of management and planning, the essence of the debate is discord regarding the ultimate ends for which public forests should be managed. In this regard, today’s debates over public forests are little different from debates at the turn of the 20th century between Gifford Pinchot, the first chief of the Forest Service, and John Muir, the founder of the U.S. wilderness movement (Frome 1962). The issues are less about how these forests are managed and more about whether they should be managed at all. Many of the debates regarding national forest management have revolved around economic issues, especially the harvesting of timber. The management of public forests in a market economy raises a number of interesting economic questions. Producing timber from public lands defines