Challenges to Enhancing the Contributions of Planted Forests To Sustainable Forest Management

By  Peter Kanowski
Forestry Program
School of Resources, Environment & Society
Australian National University
Canberra ACT 0200 Australia
peter.kanowski@anu.edu.au
http://sres.anu.edu.au

For delivery at: UNFF Intersessional Experts Meeting on the Role of Planted Forests in Sustainable Forest Management Conference, 24-28 March 2003, Wellington, New Zealand

Abstract

This paper focuses on plantation forests, broadly defined, as the dominant form of planted forests contributing to sustainable forest management. Plantation forestry in the 20th Century was focused on a range of challenges that characterise those of an industry in its establishment phase: silvicultural fundamentals, such as the species choice, domestication strategies, and stand management regimes; product and market fundamentals, such as characterising product traits and developing market position; and political and community credibility, primarily through contributions to economic development, social programs, and environmental restoration. There are instructive examples of both successes and failures against these criteria.

Plantation forestry in the 21st Century continues to face both these "traditional" challenges, in their evolved forms, and others emerging from environmental, economic, social and technological change. Principal amongst these are those challenges associated with:

  • business imperatives to shorten tree production cycles and minimise costs, with implications for site impacts, product characteristics, and the scope of management;
  • market competition and market opportunities arising from substitute products, technological change, environmental services, and consumer preferences;
  • the changing ownership structures of planted forests and the forest products industries, and associated implications for investment in growing, processing, and research and development;
  • opportunities and requirements to diversify planted forests into new landscapes, production systems, and markets, and to integrate tree growing more fully with farming enterprises;
  • the evolution from tree cropping to more sophisticated silviculture, yielding products well-suited to market needs at minimal economic and environmental cost;
  • enhancing the positive and minimising the adverse environmental impacts of planted forests, principally on biodiversity, catchment and landscape values;
  • social, and thus political, expectations of the anticipated benefits and acceptable costs of planted forests, within the broader context of sustainable forest management – including the contribution of planted forests to enhancing sustainable livelihoods for the world’s poor.

These forces define operating environments for plantation forestry which are no less challenging than those of the past century. A number of tensions underlie these challenges: those between the cost minimisation imperatives of commodity production and community expectations that a significant land use should deliver a diverse range of benefits; those between short- and longer-term returns on investment; and those between environmental and social benefits and costs. Resolving these tensions so that planted forests enhance, rather than diminish, sustainable forest management is the central challenge for its proponents in the next era of plantation forestry. Achieving this outcome will demand innovative, locally-adapted responses based on the sound investment, policy and management decisions which characterise the best planted forestry.

Definitions: planted forests and plantation forests, and sustainable forest management

The term "planted forests" encompasses all forms of trees planted, on a scale greater than "a few", for all sorts of purposes, in both rural and urban environments. The discussion in this paper will focus on "plantation forests", which I interpret broadly (sensu Evans 1997, Kanowski 1997) as trees established on a sufficient scale, and with income generation ranking sufficiently highly as one of the purposes, to have reasonable potential as a commercial crop. This definition includes various physical configurations and production systems, not just even-aged monoculture blocks grown for wood production, and therefore various forms of farm (agro-) and community forestry, but excludes urban forests and rural plantings without a commercial intent.

"Sustainable forest management" is interpreted, conventionally, as forest management which respects the environmental, economic and social dimensions of forest values, and the needs of future as well as current generations. It is generally applied to forests which are managed for production as well as for other values, and is assessed against a framework such as that identified by the Montreal Process or comparator initiatives (eg Wijewardana et al 1997).

Contexts: plantation forestry at the start of the 21st Century

Plantation forestry can be regarded as one of the successes of forestry in the 20th Century. The area of plantation forest increased from negligible to c. 190 million ha (FAO 2001) as foresters and forest products scientists succeeded in developing plantation growing and processing technologies for a modest number of species, principally for industrial wood production. Some forest-poor (at least in terms of industrial wood resources) countries became more forest-rich (eg South Africa, United Kingdom), others shifted industrial wood production substantially to plantation forests (eg Australia, New Zealand), and significant plantation-based industries emerged and became, for many industrial wood products, the preferred provider in both domestic and international markets. Investment in and ownership of industrial plantation forests shifted significantly to the private sector, albeit often with various forms of public assistance. Some plantation forests were established primarily to meet livelihood needs, principally for fuelwood (eg South Asian nations).

Plantation forests and forestry were not without their downsides – there were numerous examples of sub-optimal technical and business performance (including some failures), of displacement of other parties’ legitimate rights and interests, and of inappropriate land use with a variety of adverse consequences. Many plantation development and production regimes paid too little attention to other community and forest values (see, eg, discussion in Kanowski 1997). However, without discounting the importance of these problems, the overall outcome from a simple wood production perspective was positive, and is reflected in the increasing significance of plantation forests in most regions of the world at the start of the 21st Century.

The challenges for plantation forests for first part of the 21st Century are essentially those associated with consolidating and building from achievements of the past century, learning from its mistakes, and positioning the forms of planted forestry to better contribute to all dimensions of sustainable forest management. The framework used in this paper reflects the principal challenges I see planted forests facing: those associated with business and markets, with environments and the environment, and with institutions and communities. While these elements are interdependent to varying degrees, I first discuss each separately in terms of a series of premises and the principal associated challenges.

Challenges

1. The business and market arena

Premise 1: continuing globalisation and trade liberalisation will continue to internationalise markets for the products of planted forests, and continue to maintain cost pressures on plantation production.

As those involved in plantation forestry businesses are keenly aware, there are challenges in managing the costs of each component of the production system: growing, processing and marketing plantation products. These pressures will continue to favour economies of scale of operation, and will reward information and decision support systems which help optimise the value out-turn both of any particular forest stand and the landscape mosaic of stands constituting a particular plantation resource. The development of cost-effective information and decision support systems - which recognise the specific characteristics, interdependencies and trade-offs of particular plantation production systems - represent significant research and development and implementation challenges.

Achieving economies of scale as a strategy for cost minimisation will continue to be a focus for plantation managers. It will continue to be realised, to a point, by the consolidation of existing businesses. However, in many plantation regions, there is already only limited scope for further consolidation, and the plantation resource will only be expanded through engagement of various forms with outgrowers. As recent reviews illustrate (eg Desmond and Race 2000, Shepherd et al 1999), engaging with small-scale growers on mutually acceptable and advantageous terms will continue to be a significant challenge for plantation forestry businesses. The imperative of economies of scale is a significant challenge to the establishment of new plantation resources and the industries that might be based on them, in both developed and less developed worlds (eg Williams et al 2001).

Premise 2: investor expectations will continue to favour shorter production cycles, and mitigate against significant private sector investment in new plantation resources with longer production cycles, other than those cases where governments support such expansion with incentive mechanisms.

The principal challenges associated with investor expectations are balancing the overwhelming pressure for early returns on capital with the product characteristics and market opportunities associated with longer production cycles. Capital-intensive investments in both growing (eg genetic modification) and processing (eg wood engineering) technologies will continue to be the basis of reconciling this tension for large plantation enterprises. Technical challenges in the applications of biotechnologies for improved wood production remain significant; those associated with wood processing are not insignificant, but appear more tractable in the short term. This suggests a scenario in which solid wood products will increasingly be engineered, rather than grown, for purpose. It also suggests that trends for dis-integration of resource growing and processing businesses will continue, as each represents investment products which appeal to different portfolios.

Assuming, however, that not all solid wood uses are substitutable by engineered products (even if only in market, rather than technological, terms), the reluctance of private capital to invest in expanding traditional longer rotation plantation regimes for solid wood production will define opportunities for smaller-scale farm foresters. It may also prompt governments who see strategic imperatives in expanding the "traditional" plantation base, or developing new longer-rotation plantation resources, to continue the role that many played in the 20th Century, of supporting the initial stages of plantation development until commercial viability has been established sufficiently to attract private investment. 20th Century experience suggests that governments will be challenged to develop incentive mechanisms for plantation development which are closely matched to real needs, rather than rather cruder mechanisms capable of generating perverse outcomes. In some cases, the requisite incentives may have more to do with the establishment of market frameworks - such as the separation of land and tree titles, the development of secondary markets for standing plantations, or of markets for environmental services – than simple financial incentives per se.

Premise 3: environmental services markets will offer opportunities for some growers, and forest products markets will continue to need to be persuaded of the environmental credentials of wood.

The challenges associated with environmental services markets are both those associated with the definition and operation of the market itself, and those associated with individual entities’ capacity to engage with functional markets. The past decade has seen the emergence of various forms of markets for carbon, for water quantity and quality, and for biodiversity (eg Landell-Mills and Porras 2002). As the Kyoto and subsidiary national negotiations demonstrate, defining the terms of environmental services markets so that they have positive outcomes for sustainable forest management is seldom straightforward. These challenges include securing market acceptance of, and consumer choice in favour of, the environmental credentials of wood compared to those of substitute products.

Plantation growers’ capacity to engage with environmental services markets, when (or if) they are established, depends on a variety of factors, including – for example - the scale of their operation (for carbon) and their geographic position in a landscape (for water and biodiversity). It is apparent that these markets can work against, rather than for, appropriate plantation forestry if there is inadequate recognition of the potential benefits of plantation forests as well as recognition of their potential costs. The plantation forestry industry will need to continue to engage with development of relevant policy and markets, to ensure outcomes which favour sustainable forest management and environmentally friendly products.

2. Environments and the environment

Premise 4: the physical environments available for plantation forestry will become more, rather than less, challenging.

In the 20th Century, plantation forestry was able to secure access to a range of relatively favourable sites (even if they were not seen to be so at the time), often through direct conversion of natural vegetation. As establishment becomes restricted to previously-cleared sites, and competition for productive sites increases, opportunities for plantation forestry expansion and consolidation will shift to sites which are more challenging for tree growth, and/or to production systems in which tree growing must be integrated with other land uses. It may also prove challenging to retain established plantations on land for which alternative uses have assumed a higher value – for example, as a consequence of the development of new higher-value agricultural industries, or because of urban expansion.

Both these shifts present significant challenges to established plantation practice, and have catalysed the search for alternative species (including artificial hybrids) and markets, and the development of alternative production systems. The example of "oil mallee" eucalypts grown as alleys in Western Australian wheat farms, for a diversity of tree products and environmental services (Biggs 2002), illustrates many characteristics of these challenges – including the significant lead time, investment and scale of resource required to support the development of new plantation-based industries. In these inherently less productive environments, which are also often disadvantaged in terms of infrastructure, securing a range of markets for physical products and environmental services is likely to be necessary for successful plantation forestry (eg Williams et al 2001).

The development of plantation systems for these more marginal environments has the potential to enhance sustainable livelihoods for some of the rural poor, whose access to land is limited to such sites, in the terms and with the caveats discussed by Shepherd et al (1999).

Premise 5: plantation performance will be enhanced and sustained more through good plantation and environmental management systems than by frontier technologies.

All forest plantation species remain at an early stage of domestication, although a few (eg some Eucalyptus species and hybrids, Pinus radiata) are relatively advanced. Similarly, plantation management regimes for most sites and products are still largely empirical rather than, for example, based on information about physiological processes. In these circumstances, there are limited gains in plantation growing from implementation of frontier technologies (eg the more advanced applications of biotechnologies), which tend to be high-cost and high-risk. This is particularly so for genetic engineering, given levels of community concern about deployment of genetically modified organisms, and the relatively early stage of technologies for trees. There are probably greater gains likely from the application of new technologies to wood processing.

Research and development managers will continue to be challenged to make wise investments in alternative R&D pathways – as, for example, Griffin (1996) discussed for the case of biotechnologies. As in the 20th Century, the most significant performance gains – in both productivity and environmental terms – are likely to continue to result from clear-sighted, goal-oriented, integrated management applied systematically to the production system. This suggests priorities such as a continuing focus on definition and optimisation of value recovery as the objective of genetic improvement and silviculture; on the development of physiological process-based models for making silvicultural decisions; and on optimising supply chain management, as the bases for improving plantation performance.

Premise 6: maintaining and demonstrating the environmental sustainability of plantation forestry will continue to be challenging.

The evidence available at the end of the 20th Century suggested that well-managed plantation forests were environmentally sustainable, in terms of their impacts on soil and water resources (Evans 1997). Impacts on biodiversity are more varied, but can be benign or positive on a landscape scale where plantation design and management are integrated with those of other landscape elements (Lindenmayer et al 2002). However, our evidence for these assertions, on which much of the environmental credibility of plantation forestry rests, comes from only a modest number of studies, and the body of relevant information needs to be significantly enhanced as part of the routine practice of plantation forestry. Committing the necessary resources and implementing cost-effective systems for such monitoring is a significant challenge in a competitive business environment; it will be fostered by the demands of forest certification, and should be seen as part of the cost of doing business. Implementing a level global playing field in these terms remains challenging for governments, and is part of the role of certification.

The management of pests and diseases in environmentally-acceptable ways has been, and remains, a significant challenge to plantation forestry. The development of cost-effective, target specific, environmentally benign pest and disease management options is a precondition for the continued technical success and community acceptance of plantation forestry. Plantation forestry has been relatively free of significant pest and disease outbreaks over the past century; the increasing movement of people and goods, the diminishing genetic base of plantation forests, the opportunity for pest and disease population consolidation over larger areas of plantation forest, and increased interest in use of native species, are factors which suggest a less optimistic scenario for the century ahead, and emphasize both the need for and challenges in developing effective biosecurity strategies.

Enhancing the contributions of plantation forests to biodiversity and catchment values is a significant challenge with high political priority in many plantation regions. In the case of biodiversity, experience suggests that substantial gains are possible for some key elements of biodiversity at relatively marginal cost, other than to conventional thinking (eg Lindenmayer et al 2002); understanding and quantifying the impacts of plantations and other land uses on catchments remains a priority in many plantation regions (eg Vertessy 2002), and will be necessary if plantation forests are to expand in water-limited regions.

3. Institutional and community contexts

Premise 7: societies’ expectations of plantation forests will continue to grow.

For part of the 20th Century, at least, it was accepted that the contribution of plantation forests to societies was limited to the industrial resource base they established, and the consequent employment opportunities associated with growing and processing trees; the implicit assumption was that these benefits of plantation forests would outweigh both financial, and any environmental and social, costs. That implict expectation has been superseded by more explicit expectations that plantation forests will also contribute positively to other community values – for example, biodiversity conservation, landscape quality, or recreational opportunities. These expectations are characteristic of those embodied by the "multiple use" paradigm which has bedevilled public forest management (eg Kirkland 1989); they exist as much of corporate plantation growers as they do of those in the public sector, and delivering them in a competitive commercial environment is a significant challenge. However, the cost of not meeting reasonable community expectations will be a lack of community support for plantation forestry, which will ultimately limit plantation forestry business opportunities. In general, it appears that the more integrated plantation production is with existing land use systems and enterprises, the more likely it is to gain community acceptance (Kanowski 1997, Schirmer and Kanowski 2002).

In many plantation regions, notably those where the income generation opportunities of small-scale farmers are limited, there is also the increasing expectation that plantation forestry will offer opportunities for income diversification and enhancement for small-scale landowners. Engaging small-scale growers fully in plantation forestry has usually proven to be quite challenging, as small-scale prospective forest growers face many obstacles in addition to those faced by industrial-scale growers; these include operational (eg diseconomies of scale, access to labour and skills), market (eg limited access to capital, lack of market information, small volumes of product) and personal (eg more diverse objectives, cultural norms) constraints. Innovative attempts to address these constraints, particularly in forms which integrate tree growing with traditional agricultural production, demonstrate both exciting potential and the significant obstacles which limit the development of new industries on a commercial scale. Meeting this challenge typically requires a strong partnership role for both state and corporate entities, to foster participation of small-scale growers to a point where it can be self-sustaining (Garforth et al 2002, Schirmer and Kanowski 2002). Developing a policy framework which facilitates the involvement of small-scale growers in plantation forestry is likely to continue to be an important challenge for governments.

For communities whose use of plantation products is primarily directed a meeting livelihood needs, community expectations are inseparable from access and use rights; reconciling local livelihood and commercial imperatives remains challenging for governments and plantation enterprises (Garforth et al 2002, Shepherd et al 1999).

Premise 8: plantation forestry will need to demonstrate its claims to sustainability, and it will continue to be a challenge to turn those claims to advantage in the marketplace.

Forest certification, in its various guises but with third-party verification against widely-agreed standards as the common and defining feature, has emerged as the means by which the sustainability credentials of plantation forestry are established and defended. Interested parties will continue to challenge these credentials when they believe there is a case to answer, and plantation growers and those marketing plantation products will need to be able to respond in credible terms. Agreeing appropriate forest management standards (ie, what constitutes "sustainable forest management") amongst the diversity of interests in plantation forestry will continue to be a significant challenge for plantation growers.

Experience in all major markets suggests that wood products have not yet established themselves as the environmentally preferable alternative to non-renewable materials such as plastics and steel, nothwithstanding efforts such as those of the North American Wood Promotion Network (WPN 2003). Establishing this (assumed) environmental superiority is both a significant and a necessary challenge to maintain and develop market share for plantation products, and thus – ultimately – enhance sustainable forest management.

Premise 9: the most appropriate institutional arrangements to foster plantation forestry will continue to evolve.

The role of State institutions in plantation forestry has evolved significantly over the past century, and will continue to do so. Plantation forestry has become increasingly "privatised"; even where governments still retain ownership, their plantation forestry agencies are expected to perform on commercial terms. Thus, governments may continue to be involved in plantation forestry through public business enterprises, or they may have withdrawn to the roles of business and investment facilitator and partner, and of environmental and industry regulator. Although the forms of engagement may have changed, the roles governments play should remain (or become) focused and appropriately strong – in terms of the policy environment they create, to achieve policy goals and balance competing societal interests - and coordinated, to ensure efficient and non-perverse outcomes.

Governments will seldom be able to distance themselves from a role in resolving actual or potential conflicts over land use associated with plantation forestry. In many countries, the general policy pattern has been one of laissez-faire, market-driven land use until community responses are sufficiently strong to catalyse some form of planning control. Clearly, there is no inherent reason why market forces will, in the absence of an appropriate policy framework, necessarily direct investment to locations or forms of plantation forestry which are in the broader public as well as in narrow commercial interests. A more proactive approach to land use planning, which engages early with local communities and their interests, would be a much better model for plantation forestry, although it may be initially more complicated for governments and plantation businesses.

Governments and private sector interests will continue to be challenged to develop appropriate public-private partnerships to support plantation forestry: these are likely to include joint policy initiatives, the development of joint investment products which deliver a mix of public and private goods, joint ventures between large and small scale growers, and collaborative research and development programs. Plantation forestry businesses will be expected to behave as good corporate citizens in terms of these partnerships, and governments will need to both recognise and foster that role.

Applied research and development have been the platform for the success of plantation forestry in the 20th Century, but continuing R&D investment is challenged by changing ownership and investment structures in plantation growing and processing. Governments, plantation forestry businesses, and research providers will need to find new collaborative structures to continue the plantation forestry and forest products R&D investment necessary to sustain business and environmental performance in the 21st Century.

Conclusions

The business and market, environment and environmental, and community and institutional contexts for the next generation of plantation forestry will be different from, but no less challenging than, those which had to be addressed in the 20th Century. For example, plantation products will compete more with each other and with substitute materials than with the products of natural forests; environmental performance and the capacity to capitalise on it will become more central to business success; and communities’ expectations of plantation forests will increase with their significance as a land use. A number of tensions underlie these challenges.

A fundamental tension, which will challenge all parties with interests in plantation forestry, is that between the cost minimisation imperatives of commodity production and community expectations that a significant land use should deliver a diverse range of benefits. There is also an increasing tension between short- and longer-term returns on investment in plantation forestry as ownership structures and expectations change; at its most extreme, the imperative for short-term returns challenges the sustainability of many of the forms of plantation forestry that evolved in the 20th Century. The tension between environmental benefits and environmental costs of plantation forests and forest products, and their social benefits and costs, will continue to be a focus of legitimate concern. Expanding the scope of plantation forestry to support the livelihoods of smaller-scale growers, enhancing the other contributions of plantations to the sustainable livelihoods of rural communities, and building broad community support for plantation forestry are important arenas in which these tensions have variously to be addressed. Resolving these tensions so that plantation forestry enhances, rather than diminishes, sustainable forest management is the central challenge for its proponents in the next era of plantation forestry.

Acknowledgements

I thank Tony Bartlett, Mike Garforth, Ryde James and Glen Kile for helpful comments on an earlier draft of this paper; I also thank Jacki Schirmer, for joint work, and participants in two recent meetings (Prospects for Australian Forest Plantations 2002 and Changing ownership and management of State forest plantations) for contributions, which informed it. Errors, prejudices and the like remain my responsibility.

References

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