Forest land base
Uses of the forest
Forest resource conditions & productivity
Economics of management
Politics of management
From the extensive studies the Asian Pacific Region reviewed in this study, many factors can be identified that shape and influence the supply of forest products. Many of these factors have been incorporated into the various projection methods used to formulate future outlook estimates for the region. While no attempt is made to list these factors in detail, a general pattern can be identified as to the critical elements for supply estimation.
The most critical factor of course influencing forest output and supply is the estimation of the appropriate land base which is and will be available to support forestry activities. While there are common definitions of forest lands which are widely recognized, different databases have been utilized in various studies which frequently differ as to the appropriate underlying land base.
Forests can exist by definition or policy but not be available in fact for current or future forest use. Legal definitions of forest, for example, often include various types of 'unallocated' lands which do not support forest growth. In-holdings of agriculture and human settlement, horticultural crops, pasture, and other non-forest uses can distort the apparent forest resource base.
Changes in land use into the future are also critical to determination of forest products supply. Lands may be removed from the forest base either by conscious decision or unintentionally. Encroachment of forests and deforestation rates are a highly visible form of land use change. Success in afforestation or reforestation also changes the land base. Development of forest plantations likewise influences the assumed base.
Changes in the intended use of forests also impacts the supply of forest outputs, particularly the supply of wood harvest and products. While forestry is wildly viewed as 'timber production', other competing uses are increasingly imposing constraints on the availability of land base for timber. Reservation of forest lands for conservation and wildlife, watershed, recreation and aesthetics, biodiversity and environmental values, and other potentially competing uses may drastically reduce or prohibit commercial exploitation - even under sustainable management constraints.
Determination of the amount of forest for commercial forest production use is critical to the determination of sustainable yields (noted below). Projections of sustainable supply envisions a relatively static or 'permanent' timber estate, capable of continuous cyclic production of harvests. Where the land base in anticipated to diminish over time, sustained yield must necessarily decline where all other factors are constant. A smaller forest estate means, all else equal, less production.
Where mutually exclusive uses are practiced, the forest land base for commercial timber management is either increased or decreased in response to these decisions. However, a equally probably situation is were multiple use management is practiced, with timber supply being only one of several uses of forests, whereby all uses are constrained to some degree below single use potentials. Timber yields may be reduced in favor of improved wildlife habitat, watershed conditions, or protection of biodiversity. These management decisions regarding tradeoffs between uses, and knowledge of the quantitative impact on yields is central to multiple use management. Modified management regimes do not yield fixed proportions of outputs in most instances; rather the relative importance of different mixes of output is a management choice.
Where the forest land base for production is relatively well identified (current and future), the status of the present resources in terms of actual vs. potential yields, together with assumptions regarding intensive management to increase productivity over time is fundamental to supply estimation. Degraded or under-stocked forests represent a lowering of current potential and by virtue of lower growing stock, reduce growth and future potential. Future rates of degradation and/or stand improvement impact estimates of yields.
Investment rates for forest management can dramatically shape supply over time. Forest output is in fact subject to considerable variation with respect to management decisions which impact growth rates, volumes, and quality. As forestry in the Asia Pacific Region continues to move from natural forest exploitation based on accumulated forest stocks, towards managed forests, the composition of the forest can also change with respect to species mix, diameters, quality, and harvest age. Each of these becomes a critical variable in estimating supply. Various management regimes require added levels of investment, which require assumptions about both cost and future returns.
Attempts to implement sustainable forest management and use lead to the application of various stand models or modeling approaches to harvest levels. Where a country or region is presently in a period of transition from natural forest wealth towards managed forests, there is a great potential for imbalances in age classes with either large excesses in inventory on some forests, to large deficits in some age classes. A sustainable harvest model implicitly adopts a 'rotation' of forests where various stands can be partly or entirely harvested at predictable intervals, then reverting to periods of growth while adjacent or other forest provides the harvest on a continuing basis. Ideal stand distributions seldom exist. Policies regarding the use of 'excess inventory' to either support present harvest or to ration inventory to meet age class deficiencies in the future are critical to the determination of both current and future yields. Lower volumes per hectare under intensively managed forest conditions, with considerable investment, will of necessity draw down existing timber stocks as the transition to management continues. Comparisons of current harvest to future growth will be distorted by the large accumulated volumes. Assumptions of strict "non-declining" or even flow forms of sustainable management require large volumes of current inventory to be withheld from harvest presently in favor of balancing future harvests Assumptions regarding harvest flow conditions and constraints are fundamental to harvest models.
Estimation of timber supply is frequently seen as a physical or biological yield estimation problem given the information about available forest lands, stocking conditions, growth rates, etc. However, future timber supply needs to be recognized as both biological and economic. As noted above, investments are required in order to change forest management regimes. While intensive management may yield more timber, and perhaps sooner, questions regarding the feasibility of that investment in terms of incremental returns dictate careful specification of the underlying economic assumptions. This also implies that information regarding future markets and prices for both roundwood and forest products be integrated into the supply analysis. In many cases, this linkage is not explicit in supply forecasts. Supply response to future economic conditions and prices can significantly alter supply flow conditions. Supply quantities at 2010, for example, will be as much determined by responses to anticipated prices and returns from forest management as by simple biological productions.
Interdependency in supply decisions between countries and regions is increasing recognized, and essentially communicated through price and cost signals. Prices are seldom 'national' in today's environment. Supply decisions in other countries and regions, interacting in common markets through trade, impact the expectations and realities of each supply source. Uncertainty is necessarily large, given the future nature of the expectations and the imperfections in shared information systems. Probable competitor behavior becomes an essential element of local supply planning.
Economics also influences the levels of utilization and recovery from the 'timber supply'. This starts with the selection of 'commercial species' in a mixed forest stand, the extent of recovery from timber harvested, the efficiency and recovery from harvest to mill (or port), and the conversion of received wood into marketable product. Wastage and damage, 'non-commercial' species left behind or damaged in residual stands, and other forms of sub-marginal utilization of total volumes of a forest impact the actual recovered and utilized 'supply'. Definitions of 'commercial' in terms of length, diameters, quality, species, and value change constantly over time. Projections of these conditions and limits is largely a question of economics.
Forestry is only part technology and biology and part economics. National strategies for development, concerns for particular regions or sectors of the population, questions of self-sufficiency, and other political considerations represent a policy layer over timber supply estimation that is most frequently difficult if impossible to quantify. Decisions regarding land use, levels of public investment and budgets for forestry, guidelines for determination of harvests, etc. are seldom 'rational' economic decisions in a strict sense. Questions of the equity or distributional consequences of forest use may frequently outweigh economic efficiency in management and use.