Forestry and Agriculture Policy Issues John Sessions

Feeding the World

Overview Governments set the rules Policies affecting supply and demand for forest products Linkages to agricultural policy Conditions that make sustainable forestry possible

Governments Set the Rules Governments largely determine how forests should be used on public and private lands National, state, provincial policies Public ownership (>80%)

Govt Policies affect Supply and Demand for Timber Products Supply side - Policies affecting forest revenue such as access to markets (roads, railroads) - Taxes and subsidies - Barriers to trade (import and export policies) - Property rights, land tenure, predictability - Timber concession management - Illegal Logging (law enforcement, corruption)

Corruption Can Influence Policies “Use of public office for private gain” 124 of the 177 countries on Transparency International’s 2012 Corruption Perception Index (CPI) are considered to have “serious corruption”

Govt Policies affect Supply and Demand for Timber Products Policies affecting demand for forest products - Level of economic activity - Import restrictions, tariffs - Interest rates, loan conditions - Regulation, subsidies for wood and substitutes - Energy pricing policies toward fuelwood substitutes - Exchange rates

The Forest/Agriculture Interface Population growth, rising incomes - World food production has been increasing faster than world population but access and price are issues Barriers to Trade -- Many govts have agricultural subsidies (food security, cultural history, rural employment, foreign exchange earnings, corruption) USA >$50/ac, European Union >$280/ac, Japan >$400/ac, Brazil ??? Land Title - Development (land clearing) as a means to obtain title Relative cost of capital, tax policies

Major Causes of Land Change by Region Latin America: Large scale conversion from forest to permanent agriculture, cash crops, pastureland Asia: Migration to new areas for shifting cultivation (resettlement), conversion of shifting cultivation into permanent cultivation, agribusiness Africa: Direct conversion of forest into small scale agriculture although this could be changing with international investments from Asia

Rising Incomes Meat Demand Up 2% Per Year Rising Incomes Meat Demand Up 2% Per Year Most countries consume most of what they produce (some exceptions) Global trade is about 10% of production Will require more land and/or more feed

Clearing SubTropical Forest for Agriculture – NW Argentina

Necessary Conditions for Sustainable Forestry Long Term Investments Make Forestry Unique! Tenure claims on trees, land, and other forest resources are secure Returns for forest outputs are competitive with alternative land uses Authorities do not have conflicts of interest

Basic infrastructure is adequate Society is able to maintain law and order in forested regions Forest management rests on a sound scientific and technical basis Society is able to identify and weight competing social and economic interests in forestry

Missing From Many Countries Secure tenure Dependable law enforcement Incorruptible governments Basic infrastructure Open and competitive markets Policy predictability