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Economic appraisal of forest policy in Ghana Boateng, Peter Edward Kodwo 1968

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AN ECONOMIC APPRAISAL OF FOREST POLICY EM GHANA by P E T E R EDWARD KODWO BOAT ENG B. Sc. (For.) Edinburgh University, I960 A THESIS SUBMITTED IN PARTIAL F U L F I L M E N T OF T H E REQUIREMENTS FOR THE D E G R E E O F MASTER O F FORESTRY We accept this thesis as conforming ,to the required standard University of British Columbia September 1968 i n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u 1 f i l m e n t o f t h e r e q u i r e m e n t s f o r .an a d v a n c e d d e g r e e :at:.\the U n i v e r s i t y o f B r i t i s h Columbia', I a g r e e , t h a t ' t h e L i b r a r y , s h a l 1 make i t f r e e l y a v a i l a b 1e f o r , r e f e r e n c e and S t u d y . i f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s - • t h e s i s f o r - s c h o l a r l y p u r p o s e s may be g r a n t e d by. t h e Head o f my ... D e p a r t m e n t o r b y h.iis . r e p r e s e n t a t i Y e s , \ I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b ; i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d . w i t h o u t my w r i t t e n p e r m i s s i o n . Peter Edwarfl Kodwo feoateng D e p a r t m e n t o f H ° fl-fcr-S L tZ^j The- Un i v e r s i t y o f Br i t i s h C o l umb i a V a n c o u v e r . 8 , C a n a d a Da t- e Ze-fislr ' f o f f i ABSTRACT Part I covers the historical development of practices and policy in the forestry sector of the Ghana economy. The introduction of forestry into a country that had just settled down to agriculture reveals the struggle between commercial and subsistence agriculture on the one hand, and commercial forestry on the other. The appli-cation of a policy that does not take full cognizance of local land ownership externalities heightened the conflict between the two major forms of land use. The analysis in this thesis shows that land reforms are required if enough land is to be put under forestry, and if soil conservation practices are to be adopted by farmers. Foundations on which classical forestry is built and principles of perpetual forestry as advocated by FAO and Common-weath Forestry Conferences are examined and criticized. Economic forces are recognized as determinants of the permanence of forests. The importance of the agricultural sector in the develop-ment of the industrial sector of the country is stressed. The role of i i the Ghana Cocoa Marketing Board and the Ghana Timber Marketing Board is criticized. It is concluded that both boards should allow market forces to determine economic values for agricultural and forest products; and that farmers' earnings should be appropriated by them in the first instance to allow for a rise in agricultural earnings which alone can create effective demand locally for forest products. Part II covers current practices in the forestry sector. Conduct of research, problems of industrialization in the light of existing tariff walls raised by the rich markets of the developed countries as well as the problems associated with an underdeveloped, low income economy, are surveyed. It is shown that the economy requires to be pushed forward on all fronts: research; skills; capital formation and markets, if effective industrialization of the forestry sector is to be undertaken. While the concept of maximum sustained yield has been rejected, the thesis does not unconditionally accept the objective of maximizing net gains from forest lands. The thesis accepts that forest policy has to be subordinated to the national economic policy objective of maximizing the national product per capita. Integrating national development and forestry plans ensures that the welfare of the people of Ghana can be maximized. The 'taungya' system of agric-silviculture has been analyzed and criticized. In its place plantation forestry aimed at creating man-made blocks of forests of commercial value is recommended. Integrated utilization of forest raw materials has been noted as leading to the maximization of the contribution of the forestry sector to the national economy. To ensure supplies of raw. . material to local mills, a Log Export Control Committee has been suggested. Finally, the thesis criticizes the practice whereby forest policy formulation is undertaken by the Forestry Department alone. The urgency of economic development, and the need for subordinating forest policy to national economic policy as well as integrating the two policies, require that, in addition to the forest service, other bodies with interests in the forests should be represented. iv ACKNOWLEDGEMENTS For this accomplishment it is not difficult to envision the sources of help, tolerance and attention that made it possible. For his meticulous attention to detail which is also the sign of a great scientific mind, Dr. Wellwood has been the writer's advisor, support and model in his two years stay at the University of British Columbia. Dr. Wellwood's ever-available help contributed to the success of the thesis, and the writer's sincerest thanks go to him. The writer was exposed to North American forestry economics by hard working Dr. J . H . G. Smith. The writer gratefully acknowledges Dr. Smith's contribution to his knowledge of economic principles. Dr. D. Haley and Dr. C . W . Boyd contributed, in no small measure, to the writer's logical reasoning and recognition of what is important. These two young professors have been company which the writer was privileged to enjoy. Financial support for study at the University of British Columbia was secured from the Canadian External Aid as a Common-wealth Fellowship. The writer's thanks go to Canada for the use of the Scholarship and the people of British Columbia for making facilities at their University available to him. M r . A. Ofosu-Asiedu and M r . J . E . Osborn, both graduate students^ were approached for discussions and suggestions on the thesi M r . Ofosu-Asiedu kindly reviewed portions of the thesis. The writer thanks them for their help and advice. To Elizabeth, the writer's wife, go gratitude and sincere thanks for her patience and love during their stay in Canada. The Government and people of Ghana have assisted the writer in his endeavors. Specifically he thanks his colleagues Messrs. E . B. Asare,. K. Kese and S. O. K. Brimpong for their interest in the thesis. Finally, the writer acknowledges the kindness of the director of the Ghana Forest Products Research Institute, M r . F . Addo-Ashong in allowing him to utilize the Commonwealth Fellowship. vi T A B L E O F CONTENTS Page ABSTRACT i ACKNOWLEDGEMENTS iv T A B L E O F CONTENTS vi T A B L E S x ILLUSTRATIONS xi INTRODUCTION 1 PART I HISTORICAL D E V E L O P M E N T O F PRACTICES AND POLICY C H A P T E R ONE Evolution of Forestry under British Colonial Power 12 Forest Consciousness 12 Forest Policy 1910-1945 19 Forest Policy 1946-1956 23 C H A P T E R TWO Post-Colonial Forest Policy 27 Forest Policy 1957-1967 27 C H A P T E R T H R E E Evolution of the Concept of Permanent Forest Estate 34 vii Page C H A P T E R FOUR Development of Silvicultural Management and Research. 47 Silvicultural Management. 47 Research 51 C H A P T E R FIVE Growth or Stagnation: Reformulation of Problems 54 Problems arising out of the Current Forest Policy 55 Pattern of Land Use. 59 Exploitation of the Soil under Land Rotation 65 Individual and Social Time Preference and Conservation.. . . 70 Economic Objectives of Timber Production Forestry 77 PAR.T TWO CURRENT PRACTICES C H A P T E R SIX Influence of European Forestry 85 C H A P T E R S E V E N Forestry Industry Development and Marketing Boards 89 Ghana Cocoa Marketing Board in relation to land use 93 Fixing of Cocoa Prices, Develop-ment of the Economy and Domestic Consumption of Forest Products. 98 Timber Marketing Boards and Growth of Forest Industries. 102 Page C H A P T E R EIGHT Organization of Research 110 FAO Recommendations 113 Industry Associations and Research 114 University Research 116 C H A P T E R NINE Problems of Industrialization 119 Capital - Local and Foreign. . . 121 Maintenance and Repair of Industrial Equipment. 125 The Maintenance Management Problem 150 Possible Forest Industries for Ghana 133 Tariffs, Industrialization and Trade in Forest Products 137 C H A P T E R T E N Tropical Hardwood Forests and World Trade. 153 Major Productive Regions 154 Major Importing Regions 159 Trade Associations Influencing Markets PART T H R E E RECOMMENDATIONS FOR T H E F U T U R E C H A P T E R E L E V E N A Possible Land Use Policy for Ghana.. 165 C H A P T E R T W E L V E Policy for Forestry and Forest Industry Development 172 Forestry Development.. . 174 Forest Exploitation 176 Forest Regeneration 177 Man-Made Forests 178 Forest Industry Development 181 ix Page Reorganization of Existing Forest Industry Patterns. 185 Integration of Forestry and National Development Plans 191 C H A P T E R THIRTEEN Summary and Conclusions 194 BIBLIOGRAPHY 197 APPENDIX. 206 X T A B L E S T A B L E Page 1 V E G E T A T I O N ZONES O F GHANA. 3 2 EXPORTS O F COCOA F R O M GHANA/ E A R L Y YEARS 6 3 L O G EXPORTS F R O M GHANA,j E A R L Y YEARS 8 4 V A L U E O F EXPORTS F R O M GHANA, 1898 16 5 GHANA COCOA PRODUCTION,! PRODUCERS' PRICE, 1908-1963 96 6 WORLD PRICE FOR GHANA COCOA AND PRICE PAID TO PRODUCERS P E R TON, 1949-1966 100 7 NOMINAL AND E F F E C T I V E TARIFF RATES (%) A P P L I E D IN S E L E C T E D D E V E L O P E D COUNTRIES ON CERTAIN M A N U F A C T U R E D TIMBER PRODUCTS 150 8 P E R C E N T A G E V O L U M E O F O B E C H E (TRIPLO CHITON S C L E R O X Y L O N K. SCHUM) IN T O T A L EXPORTS,! GHANA 1948-63 157 9 WORLD UNIT VALUES O F FOREST PRODUCTS,: AND PROPORTION O F PRODUCTION ENTERING INTO INTERNATIONAL T R A D E , 1959/61 183 ILLUSTRATIONS FIGURE Page 1 INDIVIDUAL EXPLOITATION AND DEPLETION O F SOIL FERTILITY 66 2 FOREST GROWTH: T O T A L V O L U M E AS A FUNCTION OF STAND A G E 79 3 FOREST GROWTH: MEAN ANNUAL INCREMENT AND CURRENT ANNUAL INCREMENT AS A FUNCTION OF A G E 80 4 T H E E F F E C T OF A CROP F A I L U R E ON PRICE O F AGRICULTURAL PRODUCE ON WORLD M A R K E T 92. INTRODUCTION Ghana is in West Africa. It lies between latitudes 4° 45' and 11° 10' North, and longitudes 1° 12' East and 3° 15' West. It is bordered on the west, north and east by Ivory Coast, Upper Volta and Togo Republics, respectively. On the south it faces the Atlantic Ocean along a coast of about 334 miles. Ghana is 91, 843 square miles in area. There are eight administrative regions and a central government. According to the I960 census the population of Ghana for that year was 6.73 million. Between I960 and 1966 the increase in population was 17, 1 per cent (Government Statistician, 1967). This percentage increase works out to be 1.15 million. Therefore the estimated 1966 population was 7.88 million. The Ghanaian currency is the new cedi (N <J> ). One new cedi is equivalent to 98 cents (US). The gross national product based on I9 60, constant prices, was estimated at N<2 1, 110 million in 1966. At current market prices, however, the gross national 2 product in 1966 was NC5 1, 779 million. On per capita basis the gross national product, at current market prices in 1966, was N(2 226 (Government Statistician, 1967). Ln Table 1 are shown the vegetation zones of Ghana. About one third of the country belongs to the Tropical High Forest Zone, which is also known as the Closed Forest Zone. This zone is about 31,760 square miles in area. Within this zone three main forest subtypes are distinguishable according to their floristic composition. This composition is a function of the quantities and distribution of rainfall. The first of the forest subtypes consists of the Rain Forests in the south west of the country, with very high rainfall and relative humidity. The annual rainfall ranges between 70 and 120 inches. The Rain Forests are followed by a belt of Transition Forests. These are also followed by the moist Semi-."deciduous Forests (See Map). The Semi-.deciduous Forests constitute about 90 per cent of the Closed Forests. The annual rainfall is 50 to 70 inches, with two peaks in May - June and September - October. The Savanna Woodland Zone covers mainly the northern half of the country, principally the area known as the Northern and Upper Regions. Rainfall is less than 50 inches a year, and comes in a single season, from Apri l to November. 3 T A B L E I VEGETATION ZONES O F GHANA ZONES A R E A Sq. Miles A R E A of Zone as percentage of Area of Ghana Rain Forest Transition Forests Moist Semi-Jdeciduous Forests 2,905 3, 245 25, 610 Total Closed Forest Zone 31, 760 3. 16 3. 49 27*.:89 34. 54 Guinea Savanna Woodland 59, 095 Sudan Savanna Woodland 7 55 Coastal Thicket and Grassland 1,740 Strand and Mangroves 493 Total Savanna Woodland Zone 60,08 3 62. 20 .87 1.85 . 54 65. 46 Source: Quist-Arcton, 1961. 4 According to Quist-Arcton (1961), the Closed Forest Zone provides almost all the commercial timber, whereas the Savanna "Woodlands supply quantities of poles and fuelwood for local consump-tion. The economic history of Ghana is a classic example of the role of international trade in the creation of economic consciousness among peoples of so-called traditional societies. McPhee (1926) recognized three stages in the economic history of what used to be British West Africa from the time of European contact. The first stage covered the slave trade up to its abolition by law in 1807, although the trade lingered on until the middle of the nineteenth century. The second stage, the traders' period, ended with the scramble for African territory in the 1880's. The third stage was what McPhee called continental expansion. This final stage saw the creation of social overhead capital - railways, roads, harbours -to link the interior and the coast. These forms of communication opened up the West African regions and linked them with the outside world. In the first decade of the 20th century, the Gold Coast colony was created by Britain after her conquest of the peoples inhabiting that region. In 1957, the Gold Coast became Ghana when 5 political independence was won by the people. The name Gold Coast resulted from the availability of gold which was exported from the coast as far back as 1471 when Portuguese mariners first reached this region. It is estimated that from 1471 till the beginning of the 18th century U. S. $1.8 billion worth of gold was taken from the coast (McPhee, 1926). This trade in gold in exchange for rum, tobacco, fire arms, ammunition, metals, beads, hardware and cloth was superceded in time by the export of slaves for use on American plantations. With the abolition of the slave trade by means of legal enactment and a naval blockade, substitute export items were found in palm oil, palm kernels, cocoa and timber. Cultivation of the oil palm, cocoa and other exchange crops; the creation of mining enclaves; and the introduction of Ghanaian timbers to the world market, brought about the transition from a traditional economy to a monetized economy. The cocoa tree (Theobroma cacao L . ) was first planted in Ghana in 1879. It is an exotic plant native to Fernando Po, an island off the west coast of Africa. Its development and spread in Ghana was quick, and the first export of cocoa beans from Ghana was 80 lbs. in 1891 (see Table 2. ). In 1900, 540 tons were exported; in 1909, the figure was 20, 210 tons, and by 1930 Ghana was producing about 45 per cent of the world's supply of cocoa. The cocoa area was about 900, 000 6 T A B L E 2 EXPORTS O F COCOA F R O M GHANA, E A R L Y YEARS Y E A R QUANTITY  1891 80 lbs. 1900 540 tons 1909 20,210 " 1910 22,630 " 1920 124,770 " 1925 218,150 " 1929 238,490 " Source: Statistics and Intelligence Branch of the Empire Market-ing Board, London. May, 1930. 7 acres and carried about 180 million trees. The establishment of cocoa farming in the closed forest zone coincided with the intro-duction of Ghanaian timber species to the world market. Samples of 'mahogany' logs (Entandrophragma and Khaya spp.) were exported to Britain during 1888-90. Table 3 provides details of the growth of timber exports from Ghana. By 1900 Ghana's log exports had reached an annual volume of 600, 000 cu. ft. The above data serve to indicate the state of the economy during the transition which, in all aspects, was also an agricultural revolution. There was access to the markets of more mature economies. Natural resources were available in the form of timber, oil palm and its products, as well as minerals. The ability to take risk was demonstrated by the people cultivating a perennial crop like the cocoa tree which did not yield returns during, at least, the first decade and a half. Finally, capital loans were available from the United Kingdom. However, there was a major drawback to the whole process, and this was the problem of land tenure. According to McPhee (1926): "Land belonged to the community and was vested in the communal chief, who administered it and received in return political dues - taxes rather than rentals. Each person was entitled to sufficient land to maintain himself and his family, but he was not the proprietor of his holding, 8 T A B L E 3 Y E A R 1888 1889 1890 1891 1900 to 1907 LOG EXPORTS F R O M GHANA, E A R L Y YEARS V O L U M E (cu. ft.) 40 50 500 112,000 600,000 per year Source: Various Records of Gold Coast (Ghana) Forestry Department, 1920-24. 9 being only a tenant in perpetuity, so long as he obeyed the tribal rules. Since he was not proprietor, he could not legally alienate, but then neither could the communal chief, since he was not proprietor either. " In addition to this, land tenure problem there were also the problems inherent in the systems of agriculture - shifting cultivation and land rotation - as well as the promise of net cash returns through the cultivation of export crops. Agricultural activities, especially the spread of cocoa growing in the eastern region, caused a wholesale destruction of valuable trees. There was also denudation of timber in the gold mining areas as the mining companies exploited their concessions and used the timber in mining operations. The third assault on the forests was from those who exploited commercial timber for the fluctuating European market. Such commercial exploitation was not controlled by any laws or regulations and there was a great deal of waste in the process. This is the background to an economic appraisal of forest policy in Ghana. Cocoa, minerals and timber are still the major sources of Ghana's national income. Each is essential to the growth and development of the country, and an appraisal of forest policy cannot be in vacuo especially in an era of development planning. 10 Sargent (1965), at the Duke University Tropical Forestry Symposium, put it in a more effective way:, "Forest Policy must logically arise from National Policy and support it. Forest policy should not be developed in isolation by foresters for the use of foresters, but should reflect the action to be taken by foresters to meet the needs of developing agriculture and industry. " The thesis is divided into three parts covering the evolution of forest policy, current practices, and recommendations for the future. It tries to reformulate the forest policy of Ghana in the context of the general economic growth of the country. The thesis covers the fields of international trade and research in wood products, in addition to questions of land use. 11 PART I HISTORICAL D E V E L O P M E N T OF PRACTICES AND POLICY C H A P T E R ONE EVOLUTION O F FORESTRY UNDER BRITISH COLONIAL POWER Forest Consciousness It may seem that the introduction over-emphasizes the role of international trade in the development of economic consciousness of a people. This impression is not wholly correct. Economic behaviour existed among the people long before their exposure to the rest of the world. However, an analysis of the forestry evolution can be done in a model centred around foreign trade in wood products 13 The forests of Ghana, before foreign trade in wood, per-formed functions which were very different from their modern role. Like the Black Forest of Germany, the tropical high forests of Ghana served as sanctuaries for the communities in those years when the peoples of the different regions were at war. For example, the forests concealed the Ashantis from British attacks. The forests were a source of fuelwood, building materials, game and other sylvan produce, e. g. , fruits and herbs. Forested lands were also the source of minerals and major agricultural crops such as oil palm. . The acceptance of the small parcels of 'mahogany' exported to the United Kingdom changed the function of the forests as a resource. They ceased to be of use only as a sanctuary? they became an item of commerce. Thus Zimmermann's (1951) functional method of resource appraisal finds confirmation in the change in ends served by forest trees. Zimmermann has pointed out that the word 'resource' does not refer to a thing or a substance, but to the function which a thing or a substance may perform, or to an operation in which it may take part. He also pointed out the dynamic nature of a resource in its response to increased knowledge, improved technology, and changes in demand. According to that author; 14 "Resourceship stems from the purposeful intervention of natural, cultural, and human aspects primed and kept going by demand based on availability for use. " The colonial authorities, led by individuals who accepted conservation practices, decided to take steps to conserve forests which were being "threatened" by farmers, mining companies and loggers. McPhee (1926) mentioned that, in 1882-83, Administrator Moloney issued a warning against deforestation and emphasized the importance of conservation. His warning, which was published in a British newspaper, led to the enactment in Ghana of the Native Jurisdiction Ordinance (No. 5 of 1883). The ordinance provided that by-laws could be enacted "taking care of unoccupiedlland and con-serving forests. " No by-laws were enacted and the ordinance remained a dead letter. Such by-laws would have been made by the communal chiefs and not the colonial government because Britain accepted the fact that land belonged to the people and was not crown property. Haphazard exploitation of forests, soil fertility and agricultural products continued. Although the forest consciousness of the people had been aroused, the absence of any administrative and legal measures made it impossible to exercise control over exploitation. 15 L a Anyane (19o 1) has noted that, in 1898, timber was third in the order of value of total exports from Ghana, and second in the value of agricultural exports. Table 4 shows the state of exports from Ghana in 1898. The annual report of the Department of Agriculture for 1898 stated that ". . . this industry gives promise that as it becomes known it will be largely developed. " The timber industry must have been in the hands of only a few people, owing to ignorance among the forest people of the trade value of their woods. Ignorance was not the only factor accounting for the small scale of production. Transportation and accessibility were also problems. The development of the railways in the early part of the present century accelerated the exploitation of the forests. Officials of the botanical and agricultural departments were greatly concerned about the felling of "immature" trees, and they felt that "until a forestry department has been established in this colony, all logs with a diameter of less than 20 inches should be confiscated" (La Anyane, 1961). In 1907, a Timber Protection Ordinance was enacted. It prohibited the felling for export of immature trees of certain species below specified girths. The success of this ordinance was reflected in the protection of "cedars" and "mahoganies" from what was 16 T A B L E 4 V A L U E O F EXPORTS F R O M GHANA, 1898 COMMODITY V A L U E , U. S. $ Rubber 395, 565 Gold Dust 62,880 Timber 59, 283 Palm Oil 19,653 Cocoa 19,260 Palm Kernels 10, 323 Specie 9, 795 Kola Nuts 6, 243 Monkey Skins 2, 109 Copra 1, 707 Ivory 1, 557 Guinea Grain 522 Gum Copal 186 Source: So La-Anyane 1961. Sixty years of the timber industry. In Ghanaian Bulletin of Agricultural Econom-ics. Vol. 1. No. 3 p. 5. (Value originally in pounds Sterling). 1 7 considered as excessive exploitation. By 1910, there had been 42 cases out of which there were 23 convictions (La Anyane, 1961). In 1908, the colonial government secured from the Government of Southern Nigeria the loan of Mr . H . N. Thompson, the conservator of forests there, and a graduate of the Indian Forestry School, in order that they might have a report on the forestry conditions of Ghana. Thompson carried out his assignment with speed, and produced a report with a definite policy of conser-vation and afforestation. The first step by the government was to establish a Department of Forestry in 1909, headed by a conservator of forests. The first appointed was M r . N. C. McLeod, who was then Thompson's deputy in Southern Nigeria.. McLeod's attempts to start forestry on the lines of the standard forestry practices were frustrated by the opposition of the people to forest reservation. At the turn of this century, the British territories in West Africa were heavily forested, especially Nigeria and Ghana, and the question of forest conservation was bound up with the question of land tenure. Southern Nigeria became the West African home of con-servation policy. Deforestation had not gone so far in Southern Nigeria as it had in Ghana. In Nigeria regulations, such as they were, caused little opposition. Furthermore, the people of Southern 18 Nigeria acquiesced peacefully in the reservation of certain forest areas. But when the principle of forest conservation came to be applied to Ghana, the people, led by the Aborigines' Rights Pro -tection Society, opposed the first forest ordinance. Their plea was that all lands were privately owned, therefore forest reserves could only be declared after the compensation of the owners. They added that should forest reserves really be essential to the welfare of the country, they should be created by the people under the supervision of the government. Under these conditions no forest reserves could be created. The early foresters' duties were thus limited to inspection of forests, earmarking areas suitable for reservation against the time when authority would be given to designate such areas "Reserved Forest. " There were fears that loss of forests, through agri-cultural practices, including the use of fire, in clearing land, would mean the loss of knowledge of the forests. Thus a preliminary study of the flora led to the production of booklets such as "A List of Trees, Shrubs and Climbers of the Gold Coast, Ashanti and the Northern Territories, " in 1912 by Chipp, and "A List of the Herbaceous Plants and Under shrubs, " in 1914, also by Chipp. In addition to the inspection of forests the early foresters were responsible for detecting and prosecuting offenders under the Timber Protection Ordinance of 1907. Forest Policy 1910 - 1945 In 1910, a forestry bill was placed before the legislative council. The bill provided for the establishment, administration and management of forest reserves. The bill would enable the colonial secretary to grant concessions, leases and licences on behalf of the owners of the land, and to regulate the gathering of forest produce in a forest reserve, as well as the sale and export of such produce. The bill was withdrawn as a result of the opposition from the people who objected to compulsory control. Sir Conway Belfield, an official from the Federated Malay States, was sent out to Ghana to look into the problem of forest conservation. His report, which supported forest reservation, was not wholly acceptable to the people. In 1912, the West African Lands Committee was appointed to enquire into how far the land policy of Northern Nigeria (where the government was virtually the trustee of all the lands in the country on behalf of the people as a whole, and had a free hand in its treatment of them) could be applied to the remainder of West Africa. The committee held intermittent sittings in 1912 and 1914, and dissolved during the first world war without publishing a report. 20 The committee was revived in 1923 by the then governor of the Gold Coast, Sir Gordon Guggisberg. He proposed that the chiefs be given two years in which to create forest reserves, and two more years in which to enforce the reservation regulations as a test of the practicability of the system. Should the chiefs fail in carrying out the responsibility entrusted to them, he would be compelled, in the interests of the people, to bring in a forestry ordinance. Opposition to forest reservation came mainly from the people in the southern region of Ghana. The Ashanti region, which was conquered and annexed by Britain in 1900-1901, did not raise much opposition. Like the south, Ashanti had the forests threatened from three directions - shifting cultivation of food crops, 'permanent' cultivation of cocoa farms and mining concessions which carried with them the right of felling timber for use in mining operations. In the midst of these threats, three forest reserves had been created in Ashanti by 1925. The ultimatum given by Guggisberg produced some results, and the Forestry Department was able to select and demarcate some proposed forest reserves. The co-operation of the chiefs was essential because the colonial government's policy was one of indirect 21 rule. Indirect rule meant that the local authorities were to make by-laws which would give rise to forest reservation. Very little reservation was forthcoming by this means, so the government enforced the conditions of the forest ordinance which came into effect in 1927. The Forestry Department, which held the view that forest reservation was an essential requisite of its programme, set a target of 20 to 25 per cent of the forest zone, i . e. , about 6, 000 square miles, to be reserved. St. Clair-Thompson, writing in 1936 about the forest conditions in the Gold Coast stated: "Production, which was the key note of policy until 1923, was virtually neglected after that year in favour of protection; the main objective being the preservation of the forest to maintain the constant high atmospheric humidity necessary for the cocoa industry, to which the dry north-east wind or harmattan presents a constant threat. " In 1933, the United Kingdom Forest Products Research Laboratory organized a tour of West Africa for Major F . M . Oliphant. His visit to the country resulted in the realization that an exportable surplus should be available without imperilling the satisfaction of internal demands, provided that the area of reserves was substan-tially increased. The area of reserves was then 2, 240 square miles, and by 1937, this had been increased to 4,860 square miles. The 22 reserved area in 1939 was 5,832 square miles. During the second world war the Forestry Department was run by a caretaker staff, the majority of officers having been drafted into the army. The department organized the supply of forest products for use by the British and American armies. It stimulated production of lumber by pitsawyers, who, in 1944-45, produced one million cu. ft. of lumber for the department. Before 1939, the country depended on imported softwoods for its major lumber require-ments. After 1939, imports were quickly curtailed and soon ceased. The internal demands for lumber, augmented by the needs of the armies, increased rapidly so, apart from organizing pitsawing the depart-ment put together derelict sawmill machinery and started lumber production in Kumasi (Miller, 1948). Between August 1942 and when the mill was sold in February 1947, a total of 813, 277 cu. ft. of lumber was produced. Almost 50 per cent of this production was sold to the armed forces. According to Miller (1948), the mill gave the department experience in the utilization of 'weed' species, 37 different species having been sawn in the mill; it provided the department with knowledge of sawing practice, seasoning and properties of the species sawn. It also gave skills to African operators. 23 The relevance of the activities of the department, as well as the timber producing firms, during the war years lies in the fact that the experience during that time gave birth to the first formal forest policy in 1946. This policy is dealt with later in this chapter. Meanwhile, it is worth noting that the war brought a boom to the logging industry and made Ghana and the rest of West Africa a source of supply for hardwoods. In discussing the development of markets for forest products, Latham (I960) stated: ". . . it is very doubtful if the great expansion of West African timbers, which tend to displace U.S. hardwoods in western Europe, would have taken place or, at any rate, so quickly without the occurrence of the second world war and its consequent disturbances of markets and currencies. . . . large consuming markets found themselves suddenly cut off from sources of supply to which they had been accustomed for several generations. Without this stimulant it is by no means certain that markets would have been found or, at any rate, so speedily for such a number of West African species in a comparatively short space of time. " Forest Policy 1946 - 1956 In 1946, the Forestry Department presented its policy to the colonial government, and in 1948, formal approval was given by the government. The following clauses of the policy, relevant to this thesis, have been obtained from the Manual of Procedure of the 24 Forestry Department. "1. The creation of permanent forest resources by the reservation of suitably situated areas of forest or land desirable and suitable for afforestation of a total extent sufficient to supply the benefits in the form of the preser-vation of water supplies, maintenance of climatic conditions favourable to the growth of the principal agricultural crops and the minimization of erosion; and direct benefits in the form of a sustained adequate supply of forest produce to meet actual and potential local requirements and the demands of the export trade. 2. The management of permanent forest reserves by methods that will achieve maximum produc-tivity and value on the basis of a sustained yield. 3. The conduct of research into all branches of scientific forestry, with special early emphasis on ecology and silviculture, in order to achieve the aims of clause 2. 4. The progressive utilization, without replacement, of the remainder of the forest resources not permanently dedicated to forestry, controlled in such a way as to make its supplies last as long as possible compatible with market requirements, and particularly until the utilization of forest reserves can be accompanied by successful regeneration, whilst at the same time utilizing its supplies to the utmost prior to their destruc-tion by farming. 5. Co-operation in schemes for the prevention of soil erosion and in land usage plans. " Forestry Department Manual of Procedure, Vols. II and HI. 1.951.' 25 The above policy is hinged upon the acceptance of the eventual replacement of unreserved forests by farming. It attempts to resolve the conflict between forestry and other land-uses by aiming at as high a rate of exploitation as possible of these forests ahead of the farmers. The Forestry Department (19 52) noted that the high prices offered for cocoa in the immediate post-war years were an incentive for increased cocoa farming. Opening up of timber con-cessions by new roads also enabled the farmers to gain access to land, sometimes "even before timber salvage operations could be effected. " In 1949, the Trees and Timber Ordinance was passed. This replaced the Timber Protection Ordinance of 1907. Two regulations of economic importance were made under the new ordinance. Firstly, the control of cutting regulations of 1950 prescribed minimum felling girths for trees of all recognized timber species. Secondly, the control of transport and export of logs regulations of 1950 prohibited the transport of logs not of good merchantable quality, and the export of logs which had not been passed by an authorized forest officer in accordance with the regulations in force. These regu-lations gave rise to specifications of the minimum grade of logs for export, which were later expanded and clarified to constitute a form of rules for grading logs into those fit for export and those unfit for export. 26 The economic implications of these regulations will be considered in Part II of this thesis. Meanwhile the following remarks, which formed part of the Forestry Department's report (1957) covering the period 1951-1955, suggest the inappropriateness of these regulations: "Though, in general, contract specifications are not considered during the quinquennium, so great was the demand for obeche (wawa) logs from West Germany that many contracts were placed for logs of a quality that would not pass the minimum specifications and were unsaleable to mills in this country. The price offered naturally was lower, . . . but as a very large proportion of Gold Coast Wawa are defective in shape and suffer from borer damage, and it was still possible for operators to make a profit at these rates, special permission was given in the case of this species to export logs of a lower specification than the standard. . . . " Thus from 19 54, obeche for export was subject to grading into 'standard, 1 'above the general minimum specification, ' and 'subgrade. ' A l l other species had to be 'standard' or above. No general rules for lumber grading were drawn up, and the department expressed the view that lumber grading did not appear to be a pressing need. In the field of forest production, the policy was that regeneration in a forest reserve depended on the reserve's capacity to generate immediate funds for the operation. Each reserve was to pay for its development. C H A P T E R TWO POST-COLONIAL FOREST POLICY Forest Policy 1957 - 1967 In March 1957, Ghana became an independent country. In the same year an editorial in the Empire Forestry Review made the following comment on Ghana: "The Gold Coast Forestry Department has an excellent, roughly fifty-year, record of forest protection, so let us hope that none of the lessons which it has taught over the years will be overlooked or forgotten. It will be necessary to resist any temptation to cash in on their timber capital parti-cularly in times of financial stringency. It is sincerely to be hoped that this will be so and that a balanced pattern of land use will be retained. " 28 The inappropriateness of such 'advice' to the tasks that faced a young, newly independent and underdeveloped country needs no emphasis. The problems inherent in economic development and the proper role of so-called forest capital will be dealt with later in the thesis. Perhaps, because of attitudes such as that expressed in the above editorial, but more likely because of ignorance on the part of those who were not directly involved in the forestry sector, no change was made in the forest policy laid down in 1946. According to the Forestry Department (1968), "The Forest Policy remained unaltered and this has made it possible for the Forestry Division to proceed smoothly with development and administration of the forest resources. " Certain problems arising out of the pursuance of some clauses of the forest policy became recognized. The Forestry Department (1957) noted that concessionaires' surveys as well as departmental checks showed that unreserved forests might carry, at least, as great a stocking, and possibly greater stocking of valuable species of exploitable size than reserved forests. Policy and planning, therefore, were dominated by the realization that the unreserved forest land was passing to farming at a much greater rate than anticipated. 29 In 1959, the department got the government to pass the Protected Timber Lands Act. The act sought to control farming in non-reserved forest areas, by ensuring that valuable trees were exploited before the areas were transferred to agriculture. In effect the act sought to rationalize the management of unreserved forests. It has been the policy to convert some of the protected forests into permanent forest estates (FAO, 1962). Most of the protected timber lands are found in the western region of the country, and seven such areas are known to have been turned into permanent forest estates (Brimpong, 1968). The pressure from farming, mainly cocoa, on forests caused the department to encourage the removal of all trees that could be marketed prior to the advance of the farmers. The volume which an operator could extract was governed by the amount which he could evacuate by rail and through the export port of Takoradi. The apparent shortage of rail space has been suggested as prompting the government to establish a timber marketing corporation in 19 57. The corporation's objective was "to assist Ghanaian timber contractors who were at the time faced with the problems of rail space and impecuniosity" (La Anyane, 1961). The interest of the government in the marketing of forest products could not surprise most people since, in 1947, the colonial government had seen it 30 necessary to establish a statutory cocoa marketing board to handle the purchase and export of cocoa beans from farmers. The role of statutory marketing boards in the development of industries is assessed in chapter seven. It will suffice to state here that, in Apri l I960, the timber marketing corporation was replaced by a Ghana timber marketing board. This new board was given monopsony rights over the export of obeche logs. (Asare, 1965). In 1961,, the government's attempt to control trading through the marketing board disrupted exports of logs. The government did not succeed in its decision to channel all log exports through the board. In 1963, a new board was established by the government and it commenced its activities in June. This board was expected to "assist, by all means possible, in the development of the timber trade in Ghana" (Kese., 1964). It was empowered "to fix periodically the minimum price of all logs and sawn timber, open the trade to all producers and resident buyers who will be free to make their o.wn arrangements for the purchase, railment, export or sale of logs" (Kese, 1964). The board could purchase all species of logs not qualified for export and sell these to local sawmillers. The timber marketing board has been levying a charge of 5 per cent on the value of logs of all species exported. This charge was modified in 1967. It became 1 per cent in the case of the so-called secondary 31 species, and 3 per cent for prime species. Until 1960/61 there was no grading of logs except in the case of obeche where it was confined to standard, above the standard (or general minimum specification) and subgrade. A l l other species had to be standard or above. In 1961, the department was charged with the grading of logs of all species meant for export and, in addition to minimum specifications, grades A, B and C were drawn up. The economic implications of such physical quality classes divorced from economic standards will be dealt with in later sections. Financing of forest improvement works has been by means of revenue that accrued to each reserve after exploitation. . Through financial agreements signed with the various chiefs, the Forestry Department held back above 50 per cent of gross tree royalties to be used in reforestation and other forest improvement operations. Expenditure on forest protection and administration (i. e. , the recurrent expenditure of the Forestry Department) has always been borne by government. Foggie (1961) summed up the form of financing as follows: "Government would meet all costs for the administration and protection of all Forest Reserves and the cost of the regeneration and silvicultural improvements would be chargeable against the revenue derived by the landowners to an amount not less than one-third 32 and to special silvicultural fees paid by timber operators working in Forest Reserves. " In I960, a Forest Improvement Fund was created by the Ghanaian Government. Revenue from all reserves was to be paid into the fund. Cost of improvement works and land owner's entitlements were to be met out of the fund. The fund, in turn, was to be subsidized by an annual grant-in-aid from the government. An important aspect of the fund was that the department could finance all forms of forest improvement with the sole aim of achieving maximum productivity in each forest reserve (Foggie, 1961). . This means that the fund would be used to achieve maximum sustained yield in each reserve without regard to costs. In 1962, the Administration of Lands Act vested all land in the president of Ghana who held it in trust for the communities. This act, on paper at least, improved the land tenure situation since the Ghanaian government could undertake programmes of social benefit in circumstances where individuals and communities would find uneconomic. Having secured a so-called permanent forest estate and a forest improvement fund, all backed by a departmentally drawn-up forest policy, the forest service of Ghana would appear to be all set to pursue a policy of maximum sustained yield. The next 33 chapter examines the concept of permanent forest estate and attempts to trace the origins of the concept. C H A P T E R T H R E E EVOLUTION O F THE CONCEPT O F PERMANENT FOREST E S T A T E Since Britain had only a limited forest estate, British professional forestry really began in India, and the Indian Forest Service policies have been synonymous with British forest policy. The concept of permanent forest estate is found in most forest policies of countries of the British Commonwealth of nations. The origin of this concept is traceable to German forestry which greatly influenced forestry in India. Blanford (1949) has noted that the first declaration of policy was made for India in 1894. 35 Several of the colonies followed on the lines laid down for India. According to Blanford (1949), essential clauses of the 1894 policy for India were as follows: "The whole policy is based on the main object of the greatest good to the greatest number and, from the forestry point of view, this is attained by the following principles. i . First and foremost the preservation of the climatic and physical conditions of the country comes before everything else. i i . Preservation of a minimum amount of forest necessary for the general well being of the country is second only to (i) above. Provided the above two conditions are fulfilled, then: (a) Agriculture comes before forestry. (b) The satisfaction of the wants of the local population at no cost or at non-competitive rates, and, (c) After all the above conditions are satisfied, the realization of revenue to the greatest possible extent (compatible with the principle of sustained yield) is permitted. " The policy stated minimum requirements o f20to25per cent of India under forest. This was to be met by every province of India, and it was to be so distributed that the villager could obtain his needs for agriculture, timber and fuel within a reasonable distance of his home. 36 Built into this 1894 declaration are certain claims which are the basis of stability or permanency, e. g. , the so-called principle of preservation of the climatic and physical conditions of the country. Such claims and the inviolable nature of the whole policy preclude any analysis on economic grounds. -1 . .,-. The conservationist flavour to the basis of the 1894 Indian policy appears in the resolution on policy that was passed by the first Empire (now Commonwealth) Forestry Conference in 1920. This resolution at the first conference has been endorsed at each subsequent conference (Blanford, 1949; Robertson, 1957a; 1957b). The resolution embodied general principles of forest policy for the nations of the then Empire. The following are relevant parts of the resolution (Blanford, 1949): "In view of the great importance to the Empire as a whole, as well as to each of its component parts, of producing a sustained yield of all classes of timber, of encouraging the most economical utilization of timber, and other forest products, and of maintaining and improving climatic conditions in the interests of agriculture and water supply, each of the Governments of the Empire should lay down a definite forest policy to be administered by a properly constituted and adequate Forest Service. In order to attain continuity in the development of forest resources it is desirable that certain elements of stability be secured in the constitution of the forest policy. This may be done by the following measures: 37 (2) The reservation for the purpose of economic management and development of forest land under conditions which prevent the alienation of any land which is primarily suitable for forests except for reasons consistent with the maintenance of the forest policy as a whole. " The British Commonwealth is not now an economic unit in any meaningful sense, but at the turn of this century the Empire was such a unit, with foreign trade between the Empire and other countries subject to external tariffs. In the sphere of forestry, the Association of Empire Foresters, established by Royal Charter 194 in 1920, following a resolution of the Empire Forestry Conference, became a centre for, and provided a means of communication among all engaged in forestry (Blanford, 1949). Forestry conferences at five-yearly intervals, the most recent one being held in January 1968, virtually shaped the policies of the nations of the Commonwealth. For example, the following resolution of the third conference held in 1928 has been noted by Robertson (1957a): "Forest legislation may suitably provide for the protection of water supplies for human consumption, agriculture and other purposes; for the prevention of erosion; for the control of shifting cultivation, whether on private or public land, and for the better management of private forests. " 38 The influence of this resolution can be traced in the forest policy statement for Ghana. The notion of 20 to 25 per cent of the country being set aside as permanent forest estate, with the remaining forests being of no long-term interest to the country, was part of the policy formulated in 1946. Foggie (1959), in stating the reasons for reservation, which are also the reasons for the continued existence of forestry in Ghana, listed the following: i . To safeguard water supply in each forest district. i i . To assist the well-being of the forest and agricultural crops grown on the lands or vicinity thereof. i i i . To secure the supply of forest produce to the inhabitants of villages situated on the said lands or in the vicinity thereof. Earlier, in 1953, Foggie, who later became the chief conservator of forests, had stated that the creation of a forest reserve only determined that the area of land reserved should remain under forest and should be managed with this in view. According to Foggie (1953): "Although practically all the reserves in the closed forest zone are productive or potentially productive, their major role, for which they are selected, is for protection. They are forested lands covering the headwaters of rivers and their major tributaries, or on scarps and hills subject to erosion, or as barriers in the ecotone between the closed forest and the savannah woodland, or 39 as major shelter belts designed to reduce the dessicating e.ffect of the Harmattan on the cocoa-bearing areas, which it was necessary to retain for the good of the country as a whole, and whose extent would be sufficient to provide for the internal needs in forest products. " Foggie ( 1 9 5 9 ) noted that a 1935 report of the Forestry Department stated that the ideal to be aimed at in the closed forest zone was 25 per cent under reserved forest. "This is a figure commonly quoted as being required to ensure complete protection of water supplies, and a proper balance between agriculture and forestry. " The concept of permanent forest estates was given universal support by the FAO in 1951 (Leloup, 1957). The FAO set out principles of forest policy at the Third World Forestry Congress. Ln 1950, it published a book entitled World Forest Policy, Law and  Administration in which it expanded these principles and in 1951, at the sixth session of the FAO, the principles were approved. The statement setting out the principles was divided into two parts. It distinguished the "principles governing the formulation of a forest policy, " and the "principles governing the implementation of a forest policy. " Those principles governing policy formulation concerned land use, forest management, research, statistics and education. Each 40 country should determine and set aside areas to be dedicated to forests, since forests have a "permanent character and represent a renewable natural resource with permanent values indispensable to life. " (Leloup, 1957). Under these principles, the management of forests and of forest production should "seek to derive in perpet-uity for the greatest number of (the country's) people, the maximum benefits available from its forests" (Leloup, 1957). stated by the FAO to be based on forest laws giving effect to the policy, administration, and the training of personnel. Both the FAO and the Commonwealth Forestry Association (or perhaps the various conference resolutions) are in agreement as to what should be the basis or foundation of a forest policy. Both bodies also accept the idea that forest estates are permanent. However, these principles of policy are far from being indisputable. On principles, MacGregor (1962) had this to say: "Some of the principles guiding forest policy often tended to be vague and some of the effects on protection, conservation and reclamation had idealistic associations which tended to create favourable climates of public opinion. Some ideals, like those associated with "conservation, " were not to be accepted uncritically, and might be required to be backed up by quantitative estimates of costs and likely benefits if they were to be fully supported. " The principles governing policy implementation were o 41 Laurie (1957, 1962) has discussed the effects of forests in water catchment areas. He mentioned the confusion that existed in the literature on forests and water supplies. According to him there have been four Russian studies claiming higher water yields for forested than for cleared or pasture land. On the other hand, twenty-six studies from different parts of the world had opposite results. In Ghana, as far as it can be ascertained, there has been no research into the role of forests in water conservation, anti-erosion works, and the protection of agricultural crops. It has been taken for granted that forests give optimal results .as compared with other forms of land use. Therefore, the permanent forest estate concept should be part of forest policy. Dawkins (1958), while admitting that the precise influence of forest cover on water supplies and climate has not been established, has insisted that "revenue is not an object of the policy until the protective and productive functions of the forest are assured. " An analysis of forest influences in Ghana is incomplete without reference to agricultural crops, in particular the cocoa tree. The economy of Ghana has grown around this crop.. The export trade, for example, relies heavily on cocoa. During the past decade cocoa has contributed between 60 and 70 per cent of the value of all exports. 42 The assumed protective role of forests in the cultivation of cocoa, therefore, requires careful analysis. Urquhart (1961), formerly director of agriculture in Ghana, gave attention to this problem in his book on cocoa. The cocoa tree, in its wild state on the island of Fernando Po, belongs to the lower storey of the lowland forests. It thrives under conditions of warmth, shade and high humidity. Urquhart (1961) quoted Baker, a botanist, in the following description of the cocoa tree: "The origin of the tree as an understorey species in the forest is probably responsible, to some extent, for the traditional method of growing it under the shade of larger trees, but it is to be noted that in this respect the "natural" environment does not necessarily give the best conditions for high yields. In fact, the heavily shaded trees in the forest usually carry little fruit. Cocoa can survive in heavy shade that would kill many other species, but it can also survive ia considerable degree of exposure, although general experience is that unshaded cocoa may suffer severe setbacks. " Urquhart (1961) noted the slowness of the rate at which the cocoa tree was being developed by agriculturists from the status of a forest plait to that of a "highly specialized tree which can respond to intensive cultivation. " Barber (1927), in reporting to the Empire Marketing Board on tropical agricultural research in the British Empire, made the following remarks about cocoa in Ghana: 43 ". • . Cases have been met with by the writer where cacao plantations have been established in the full blast of the Atlantic gales, the outer rows of trees, it is true, being almost destroyed but forming a shelter belt within which normal growth was maintained. In the Gold Coast areas, protection does not appear to be so necessary as has been insisted on, and the local 'tornadoes' do not seem to be a limiting factor. Long periods of drought (of several months) can be successfully passed through, if only the soil is deep and well stored with moisture. " The views of foresters, agronomists and researchers are in conflict over forest influences in Ghana. No doubt cocoa needs nurse plants in the early stages of its life. In addition to the nurse plants, other forms of shelter may be required by cocoa. But the manipulation of these forms of protection is in the realm of agronomy, not forestry. The Ghanaian cocoa farmer uses for ground-cover cocoyam, maize, cassava and plantain. Where forest trees are made use of, there is need to adjust the forest stand to provide the desired degree of shading. It is known that the presence of certain trees can be harm-ful to cocoa. According to Urquhart (1961), the existence of trees which are incompatible with the well being of cocoa was mentioned at the 1957 Cocoa Conference, in London. M. Poncin, general manager of Lukolela Plantations in the Congo, noted that some members of the Sterculiaceae and Bombacaceae were suspected of being carriers 44 of the swollen shoot virus that attacks cocoa. Some of these harmful trees found in Ghana are Celtis mildbraedii Engl. , Pentaclethra macro  phylla Bth. , Piptadeniastrum africanum Hk. F . , and Strombosia  grandifolia Oliv. Cola brunelii Schott and Endl. , and Ceiba pentandra (L.) Gaertn. are known to be hosts for certain pests of cocoa. These excursions into areas of forest influences and agronomy point to the futility of basing forest policy foremost on non-marketable and difficult-to-measure benefits that may emanate from forests. It was on the basis of these so-called indirect benefits that forests were reserved in the high forest zone. The target was 25 per cent; to date about 18. 4 per cent of the zone is under reservation and controlled exploitation. The remaining area of timber-bearing land has been under varying forms of control and abuse. It has been established that between 250 and 300 square miles of such land are transformed into farms every year. The creation of a permanent forest estate to meet a target of 25 per cent or, as Taylor (1962) has suggested, 33 per cent (as stipulated in the 1952 Indian forest policy) is also questionable. Troup (1940) defined forest reservation as the setting aside of areas for permanent maintenance under forest. He believed that "nothing short of permanency of tenure will secure the necessary continuity of 45 management over long periods of time. " However, legal protection does not guarantee permanence. Economic and other dynamic factors as well as legal measures can create impermanence, destroying one resource and in the process creating a new one. For example, Asare (1965) pointed out that the lake resulting from the damming of the Volta river would submerge 140 square miles of ^permanent" forest reserves. Another 15 square miles of reserves would be used for resetting displaced people, and "more could follow, while the tracks for the power pylons of the Volta hydro-electric project have been hacked through several miles of reserved forest. " Continuity of management as desired by Troup is the same as continuous forest production. In addition, Troup might have been considering the application of silvicultural systems on the reserved land to achieve a sustained yield. However, continuous production or perpetual forestry should refer to the constantly necessary decisions of the entrepreneur to apportion the factors of production between the creation of income flowing at the present time and at distant periods in the future. This is the only guarantee of economic continuity. In a country undergoing economic, social and political changes in a rapid, unpredictable fashion, a rough division of land into forest reserves and agricultural land does not lead to a permanent settlement. Very often the productivity of agriculture is an unsettled 46 problem. The only acceptable basis appears to be the one that takes into consideration the economic potential of the land and the resources already present on the land. In Ghana the problem is made more complicated by the pattern of land ownership which has characteristics of common property resources. Perhaps the best solution at the moment is the one being pursued by the Forestry Department rather belatedly: the policy of protecting all forested lands and subjecting them to ordered exploitation. The policy of reserving lands as the permanent forest estate (although they are as impermanent as economic forces dictate), and leaving the rest of the forested land to the mercy of shifting cultivation and haphazard exploitation, has proved unsatis-factory. The wisdom in subscribing to the concept of permanent forest estate has, therefore, to be questioned. C H A P T E R FOUR D E V E L O P M E N T O F SILVICULTURAL MANAGEMENT AND RESEARCH Silvicultural Management The aarly foresters embarked on projects which confirmed the strong influence of Indian forestry practices on forest policy. In his statement to the 1920 British Empire Forestry Conference, McLeod (1920), who was head of the forest service of Ghana, stated, in respect of silviculture and management, that "in the future, all the usual methods will be employed. " What is more surprising is that as soon as the Forestry Department was created it indulged in various "usual 48 methods. " Thus plantations of exotics and local species were established and, in 1913, teak and Dalbergia sissoo plantations were started in Ashanti (Logan, 1946). These two exotic species are Indian trees. A silviculturist was appointed in 1927. He concentrated attention on the silvics of indigenous trees. Also, he could not prevent the expression of his interest in plantations. A fuelwood plantation was established near Kumasi, while "taungya" operations were started especially in the eastern region (in 1929), and in Ashanti and the Western regions (in 1932). Stebbing (1937), in his book The Forests of West Africa and the Sahara (19 37), published after his visit to West Africa, made the following notes about the Kumasi Fuel Reserve: "At present (1934) there is not a great demand for fuel from here (Kumasi Fuel Reserve) for Kumasi owing to the considerable amounts of material in the forests in the vicinity of the town. These amounts are at present added to by the fellings made by the labour force under the Medical Sanitation Department. . . . " The lack of theoretical economic research might have contributed to the initiation of projects which were obviously uneconomic. The post of silviculturist was abolished in 1936 and with it the idea of centralized research. Silvicultural research became 49 the direct concern of district forest officers. As a result, by 1945, a total of 1800 acres had been covered by the 'taungya' system of plantation. Enumeration of the growing stocks was begun in 1931. The sampling was based on one per cent strip enumeration of certain forest reserves in the eastern and central regions of the country. In 1946, a departmental 10-year development plan was drawn up (Forestry Department, 1952). The plan was an aggre-gation of forest district and regional plans with priorities for surveys of resources and the preparation of working plans for each forest reserve. Such a 10-year plan was an implementation of clause 2 of the 1946 forest policy, i . e. , the management of the permanent forest resources by methods that would achieve maximum productivity on the basis of a sustained yield. So-called planned management emerged after a separate working plans branch was set up. The department's preoccupation with the requirements of classical European forestry - sustained yield from permanent forest estates, management or working plans aimed at the regeneration of the forests - meant the neglect of a bigger fraction of the forests of the country. The working plans branch concerned itself with plans to create normal forests in forest 50 reserves while uncontrolled exploitation went on in unreserved areas because such areas, according to policy, were to be converted to agriculture. Foggie (1953) listed the following as the objects of management of the permanent forest estate. (The objects, of course, flowed from the policy): i) To maintain the forest in its protective role, ii) To regulate its exploitation on the basis of sustained yield. iii) To ensure its regeneration and, if possible, its conversion to a higher yielding forest containing a greater proportion of economic species. iv) To give a return to the owners provided the previous conditions are met. The above are currently the objectives of the management of every forest reserve in Ghana. They represent a policy aimed at the removal of all obstacles standing in the way of sustained yield and maximum productivity. The management objectives of the Forestry Department also demonstrate the need for economic re-appraisal of policies and practices. Bauer (1965) had the following to say about conservation policies in his lectures to the Commonwealth 51 Institute at Duke University in 1957: "The -widespread idea that there is something inherently desirable in keeping assets in a particular physical form is an extreme case of the more general idea that the rate of utilization of these assets should be governed by physical criteria instead of economic criteria designed to maximize the net returns over their life. Yet this idea widely influences conservation policy, both in the rate of utilization of publicly owned resources, and through official measures pres-cribing the rate of utilization of privately owned resources designed to encourage their maintenance in a particular physical form or to extend their life. " Research: The Forestry Department, from its inception, has been most interested in ecology, systematic botany, and the application of classical methods of silviculture and management. A limited degree of utilization research has been undertaken. Virtually no economics research, wood science and related wood technology investigations have been considered. The department's research policy has been in agreement with the 1946 forest policy. The policy has been to put early emphasis on ecology and silviculture, in order to achieve maximum sustained yield. 52 A very good herbarium has been put together in Kumasi; experiments into artificial and natural regeneration of high value species have been executed, with greater stress on natural regener-I ation. Girth increment sample plots have been maintained since 1947. The work on the herbarium and in areas of ecology and the silvics of trees culminated in Taylor's (I960) Synecology and Silvi- culture in Ghana. Operations with the semblance of utilization research were prompted by events in the 1920's (Logan, 1946). By 1927 it was noticeable that the quality of logs exported had declined and there was an over-abundance of poor quality logs. According to Logan, a: utilization officer was appointed in 1933. The officer was to work in close conjunction with the timber trade, which was mainly in the hands of small Ghanaian producers. The officer was to educate the producers in the production of better quality logs, as well as foster the use and marketing of other species beside mahogany. A set of departmental log grading rules was designed to be used voluntarily by producers. The war time put a great demand on the forests. Tria l shipments of various species were made to forest products laboratories in Britain. Soon after the war the following publications 53 were issued: Forestry Department (1949) produced Gold Coast  Timbers; Timber Development Association of Britain (1947) produced Timbers of West Africa; and the Forest Products Research Laboratory of United Kingdom (1956) issued Handbook of Hardwoods which covered various timber species of Ghana. Thus far did the Forestry Department cover in the area of research up to 1961/62 when the Ghana Academy of Sciences' Forest Products Research Institute took over forest research. C H A P T E R FIVE GROWTH OR STAGNATION: REFORMULATION O F PROBLEMS The first four chapters have brought together information covering the establishment of the Forestry Department, its struggles in securing recognition of the economic and other values of the forests, and its role in the creation of institutions to serve the forests from the extraction of forest products to their marketing. The practice of forestry in Ghana has been associated with obstacles which, according to many foresters, are found in tropical forested countries. In this thesis it will be suggested that the difficulties or obstacles have 55 actually been created as a result of the tropical foresters' insistence on pursuing a course of action which is economically unsound. Such a policy is what has been described in the first four chapters. In this chapter the basis of the policy will be restated, and an attempt will be made to reformulate as fully as possible the nature of the obstacles to an optimal policy for the forest zone of Ghana. Problems arising out of the current Forest Policy. The current policy ignores the economics of a common property resource which in this case is soil fertility. Without a careful analysis of the economic consequences of the pattern of land ownership in practice, the policymakers set out to secure 25 per cent of the land in the forest zone as a permanent forest estate. This area comes to about 6, 000 square miles, and at the time the reservation policy was being implemented, as Chipp (1923) has pointed out, 14, 000 square miles out of 31, 760 square miles of the forest zone were carrying "merchantable forests. " The decision to select 25 per cent of the area of the forest zone for the purpose of preserving water supplies, climatic conditions favourable to the growth of the principal agricultural crops, to minimize erosion, and to organize sustained yield forestry immediately gave the people the impression that the remaining area of the zone would be for uses other than forestry. This led to the greatest problem said to face the 56 forestry department; threat from farming and the destruction of timber during farming. The decision to base the reservation of 25 per cent of the forest on the "secondary benefits" that forests may or may not bestow on other plants and the environment led to the selection of some of the poorest areas of the zone as forest reserves. The location of the reserves did not optimize the returns from the use of any net-work of roads that might have been present. The location was not to benefit industrial forestry as such, it was to satisfy the requirements of agriculture and other forms of land use. It is doubtful if agri-culture benefited from the location decided upon. Those hilltops, scarps, headwaters and similar areas which were reserved, were, in many cases, far removed from the vicinity of agricultural activities. Studies of vegetation maps of the state of the forests in the 1960's reveal that agricultural activities got closer to the reserved forests in only recent years, and that the areas set aside as forest reserves were removed from population centres. In the circumstances, as the unreserved forests become exhausted and the reserved forests become the only source of timber supplies, cost of logging should climb steeply. This is because of the need to link the distantly located reserves to the existing roads and other means of trans-portation. . ' 57 Having chosen what might relatively be the worst sites, in order to satisfy the presumed requirements of agriculture, the Forestry Department then decided that it had no other alternative but to try possible silvicultural and management systems on these costly sites. As has been noted in earlier chapters, the objective was maximum sustained yield. The decision to have unreserved forests exploited at a rate dependent both on the demands of the market for timber,and the rate of expansion of farming, was an unfortunate one. Another policy requirement was that the rate of exploitation of these unreserved forests should be such that when it came to the turn of the reserved forests, their exploitation would be accompanied by successful regen-eration. Other aspects of the current forest policy cover the field of marketing, and bear remotely on the silvicultural systems chosen. As early as 1898, the authorities decided to prohibit the felling of "inmature" trees. When the Forestry Department was established laws and regulations were enforced, and now there are minimum girths which control the volume of timber upon which the annual prescribed yield is calculated for each forest reserve; there are minimum girths below which trees are protected against felling; and 58 there are prescribed penalties for breaking any of the regulations under the Trees and Timber (1949) Ordinance. There are also regulations which prohibit the export of logs not of good merchant-able quality, as prescribed by the Forestry Department. Hence there is compulsory grading of logs for export. Finally, the timber marketing board has powers to set minimum prices of all logs and sawn timber based on the grading rules of the Forestry Depart-ment. Two points result from the pursuance of the above policy. Firstly, the minimum felling girths are meant to protect immature trees, that will eventually form the mature crop. Without considering what is mature and what is immature, the fact still remains that minimum girths of 6 feet, 7 feet and 9 feet, depending on the species, can mean nothing other than the dependence on natural regeneration and heterogeneously mixed forests, at all costs. Secondly, the objectives sought in marketing can lead to no other result but the under-utilization of the forest resource, the continuation of the situation where there are always some amounts of the few species accepted on the world market, and the presence of still untouched volumes of the approximately 150 species which have not gained acceptance. It perpetuates the heterogeneity of the tropical forests. This heterogeneity of species has been described as a 59 problem by most tropical forestry experts, e. g. , FAO (1966a) Streyffert (1965), and Taylor (1962). In this thesis, it is considered that the artificial barriers such as those described above, as well as economic barriers such as the lack of capital and the low level of internal incomes are greater problems than the natural state of the forest resource. After all, the tropical forest is not the only forest of mixed species. In degree of heterogeneity it is higher than the temperate forest, but the latter is also mixed. Like the tropical forest, the temperate forest does not have all of the species of timber trees in current demand. In Ghana, one cannot begin to expect close utilization when artificial (i. e. , without economic bases) girth limits have been imposed on exploitation. Having stated the approach taken by the forestry authority, it is now appropriate to reformulate the economic problems under-lying any possible forest policy that may be chosen to guide and determine present and future decisions. Policy problems of interest to forestry in Ghana stem from land tenure, the system of agriculture, and the role of the State. Land tenure and general pattern of land use Timber extraction and forest regeneration, mining, 60 quarrying, and agriculture are the major forms of land use in Ghana. Timber extraction is of a significant areal extent compared to the other occupations outside the subsistence agricultural economy. Thus forestry and agriculture are the two major users of land. Chipp (1923) has pointed out that "the unit of land ownership in the country may be considered as the town or village community governed by a chief and elders, and the whole country, as consisting of a collection of such communities. " It has already been mentioned that McPhee (1926) pointed out factors of economic relevance in the common property nature of this type of land tenure. Communal land ownership is tantamount to the famous, "everybody's property is nobody's property. " It gave birth to shifting cultivation (or agriculture), as well as land rotation (as opposed to crop rotation). A great deal has been written about these forms of agriculture in the tropics and to consider the subject at length is unnecessary. Two short definitions will suffice. Wills (1962) defined land rotation as follows: ". . . the system whereby cultivation is carried on for a few years and then the land allowed to rest, perhaps fo r a considerable period, before the scrub or grass which grows up is again cleared and the land recultivated. In such areas, however, the farms or settlements for which cultivation takes place are fixed and the cultivation of the land is the dominant occupation. " 61 Shifting cultivation, on the other hand, is practised by a family or group of families occupying a temporary settlement. The land immediately surrounding the settlement is cleared and farmed for a few years, then abandoned, at which time the settlement is rebuilt in a new location. Wills (1962) believed that shifting cultivation is practised in only a few places in Ghana, and land rotation is the principal agricultural system in the country. Both forms of agriculture are widespread in the tropical world - Africa, Asia and Latin America - and, in most cases, certain features are common. Tondeur (1955) pointed out two aspects of economic interest. 1) The land earns no rental market value since it is never the private or exclusive property of any individual. 2) After the fertility is exhausted and the land evacuated, it is then returned to the joint ownership of the family, clan or community. There is, therefore, no incentive on the part of the individual to manage the soil with the aim of optimizing the rate of exploitation, in fact the fertility possessed by the soil is exploited under conditions of competition. Ln the circumstances, the only economic way of restoring fertility should be costless to the individual, that is, through 62 forest fallow. Foggie (1959) recognized the role of the forest in the system of agriculture when he stated: "Up to the present the Ghana closed forest and the savannah woodland have been the fertilizing agents on which agriculture has been based. Through-out the years they have gradually accumulated soil nutrients in the upper layers of the soil and on the forest floor. These, added to and made more readily available by clearing and burning of the debris, are sufficient to permit good growth and yields for agricultural crops for about three years. Thereafter with further cultivation, . yields rapidly decline owing to the loss of nutrients through harvesting and leaching and for continuous produc-tivity the land must either be manured or go back to fallow. " Foggie's three years of cropping must apply mainly to annual crops. Tree crops such as cocoa, kola, and rubber can be cultivated for decades. Nye and Stephens (1962) confirmed the decline in fertility under cropping. On the exhaustion of the soil, these authors stated that it is the lowering of the phosphate potential in the surface horizon of the soil which results in the lowering of fertility. Tondeur (1955) reported a decline in yield from work carried out at the Yangambi experimental station, headquarters of a chain of research centres in Africa directed by the Belgian Institute. Three 63 crops were involved in the experiment, rice, groundnut or peanut, and cassava. The rice yield fell from 2, 341 to 565 Kg. per hectare in three years; the groundnut yield fell from 1, 362 to 191 Kg. per hectare in five crop seasons; and the cassava yield dropped from 45 to 30 Kg. per hectare in three years. The above review covers roughly the research into farming methods; soils and the manner in which their fertility is depleted, and the soils themselves deteriorated; and methods of restoring productivity. There has been a general lack of economic and social research into soils as a resource and the form of land tenure that makes the soils a common property. It is apparent that ultimately the question is not the fertility cycle of tropical soils as such, but man's use of the soil resources for his own (economic) purposes. Both the forester and the farmer have interests in soil conservation which has been defined by Boulding (19 58) as ! "practices that increase the value of the land more, or decrease it less, than alternative 'non-conserving' practices. " Classical forestry teaches that the choice of species and silvicultural systems should lead to maximum soil productivity. No species should deplete the soil fertility let alone deteriorate the soil. A management regime which leads to clear felling and planting is said to cause the 64 loss of nutrients when trees on every acre are removed at once instead of being removed under the selection system. Foresters accuse agriculturists of practices which lead to loss of fertility and lowering of yield when annual or other periodic harvests are gathered. Al l such claims and accusations appear to ignore the problems inherent in the economics of soil conservation. The problems, according to Boulding (1958), concern the level at which it pays to conserve the soil and its fertility. Boulding stated further: "Conservation practices exhibit diminishing returns. It does not pay to try to conserve virgin soils or virgin forests at their pristine level of fertility. " There is every justification for man to exploit virgin soils and forests to more easily maintainable levels. The problem that faces Ghanaian foresters and agriculturists can be visualized as follows. There is an economy, dualistic in structure, with a large agricultural sector and a small industrial sector. The marginal productivity of labour in the subsistence sector is positive (because of the low population) but low. The opportunity cost of agricultural labour is very low because of"the near-absence of employment opportunities outside agriculture. It is also postulated that, at least in the short-run, there is an unlimited 65 supply of land for the use of every farmer. There is, of course, very limited capital in agriculture; matchetS. . and hoes are the commonest form of capital equipment. Given the above assumptions, which are not far from reality, and operating under the systems of shifting cultivation and land rotation, one would expect the pattern of fertility exploitation that follows in the next section. The land is common property, thus no rent accrues to a landlord; entry into new areas is " f r e e " provided the individual belongs to the particular community. Exploitation of the soil under land rotation In Figure 1 is shown an analysis of soil fertility exploitation under "free entry, " when no rent is collected, and cropping is done t i l l the soil is exhausted. The opportunity cost of farm labour is assumed to be zero. The individual farmer exploits the fertility of his allotted piece of land under conditions of diminishing yield over time. When the yield per acre gets too low the farming unit evacuates the particular piece of land which then is counted among the common pool of fallow land. The unit or individual enters a piece of virgin land or land with its fertility restored through forest fallow. The above pattern of exploitation and depletion is repeated. The assumption of diminishing yield over time with increasing cropping FIG. 1 INDIVIDUAL EXPLOITATION AND DEPLETION OF SOIL FERTILITY YIELD PER ACRE 67 is fair, as confirmed by Tondeur (19 55) and Nye et al. (1962). In these circumstances the farmer appropriates to himself the total benefit under the curve C X E . This total includes any economic rents that should accrue to the land but, since these are not collected under the present system of land tenure, the farmer is the recipient. Ciriacy-Wantrup (1938) has pointed out that land utilization should be governed by the principle of optimal intensity, that is, the optimum occurs at the point where the value of the marginal unit of cost factors put into the land is equal to the value of the marginal unit of output from the land. According to this author: "Optimum intensity thus defined takes account of the economic effects of any depletion of fertility traceable to the marginal increment in value of output. In other words, a decrease in the present worth of future income caused by the marginal output is to be regarded as a part of marginal cost. But optimum intensity does not always require the maintenance of fertility. Only if the value of the marginal output equals or exceeds the costs of obtaining the crop plus the costs of restoring the fertility lost in obtaining the crop does land conservation become an economic possibility. " There is a great amount of resistance to adjustment to the optimal level of exploitation when the land is communal property, when no economic rent is collected, and when there is ignorance about social costs of using a unit of land. 68 Under the Ghanaian system of land tenure and customary agriculture there is no incentive for the individual user of land to adopt a system which economically conserves fertility and leads to the maintenance of a level of physical productivity of the soil. Such a system would then stabilize rent over time. Instead the individual continues to exploit the land. Under this exploitive system, each year of cropping leads to the decline of the level of productivity that could be obtained, and the possible rents and other land values would also decline. Over time, population increases, the retention of land under perennial crops like cocoa, rubber, and, of course, reserved forests (i. e. , permanent forest estates), reduce the size of the fallow. Lands are taken up from the communal pool even when the fertility regained under fallow is very low, and net returns from farming become very low. This cycle will be repeated until such time that the farming soil resource is completely depleted. Around this time, pressure will invariably be brought to bear on the forested lands; the cycle i of exploitation, depletion, and bush fallow would be repeated ad  infinitum. So far the abstraction has covered roughly what obtained at the beginning of the twentieth century when forest consciousness was aroused in the people of Ghana. The abstraction also covers the dynamic phase of land-use as specific uses came to make almost 69 permanent claims on the land under communal ownership. One would be tempted to suggest that all these forms of land-use, if allowed to evoive by themselves, would come to a state of stable equilibrium with no one form of land-use being unstable and expansive. This suggested line of development is unacceptable because a stable equilibrium is not necessarily optimal, especially under a system of land tenure and ownership which allows economic rentals to be appropriated by individual farms instead of the community which is the real owner. Again, historical evidence confirms the fact that forms of land-use tend to crystallize, and once a piece of land has been put under a form of land-use, the tendency has been for this situation to remain unaltered. MacGregor (1962) has stated that the supply of land being fixed, the direction of changed land-use is often permanent. This permanence depends a great deal on the stage of development, and the economic performance, of the various forms of land-use. So far the analysis has not touched on action by society towards limiting the actions of individuals so as to bring about fertility conservation at levels which are economically justified. 70 Individual and Social Time Preference and Conservation It has been shown that communal land ownership possesses characteristics of a common property ownership. This means that exploiters of soil fertility value it at nothing in their calculations. Again, exploiters consider soil fertility as a free good although society as a whole considers it as a scarce good. These characteristics stem from the fact that the property is, within certain limits, free for all. That being so, shifting cultivation and land rotation are the logical forms of agricultural use of the land, since he who is fool-hardy enough not to exploit virgin fertility as soon as his present piece of land gets exhausted, will find that others have taken up such lands. There is no economic incentive for an exploiter to expend resources on restoring fertility to his land in these circumstances. Although his work on the economics of soil conservation is over 25 years old, Bunce (1942) adequately dealt with the problems surrounding the individual, society, and soil conservation. What follows relies heavily on Bunce. His model involved individual ownership of the land, and did not have to consider a situation in which ownership was communal. It can, however, be assumed that Bunce's analysis can throw some light on the course of action to be taken in the case of Ghanaian land tenure. He gave the following four reasons to explain when an individual would exploit resources 71 r a t h e r t h a n c o n s e r v e t h e m : 1) W h e n i t i s e c o n o m i c f o r h i m t o do s o . T h a t i s , e x p l o i t -a t i o n u n d e r t h e g i v e n c o s t - p r i c e s t r u c t u r e w i l l m a x i m i z e h i s r e t u r n s . 2) W h e n h e d o e s n o t b e a r a l l t h e c o s t s o f h i s a c t i o n s b u t c a n t r a n s f e r s o m e o f t h e s e t o s o c i e t y , o r o t h e r p e r s o n s i n t h e s o c i e t y , e. g. , f l o o d d a m a g e , e r o s i o n , a n d o t h e r s o i l c o s t s n o t b o r n e b y t h e o p e r a t o r m a y m a k e e x p l o i t -a t i o n e c o n o m i c w h e n i t m a y b e u n e c o n o m i c i f a l l c o s t s w e r e i n c l u d e d . 3) W h e n t h e i n d i v i d u a l i s m o t i v a t e d b y c u s t o m r a t h e r t h a n i n t e l l i g e n c e a n d e x p l o i t s r e s o u r c e s t o h i s o w n a n d s o c i e t y 1 s 1 o s s . ( T h i s i s e x e m p l i f i e d b y f a r m e r s c u l t i -v a t i n g l a n d s w h o s e y i e l d s h a v e f a l l e n b e l o w l e v e l s t h a t e n a b l e m a r g i n a l c o s t s o f o p e r a t i o n s t o b e m e t ) , a n d 4) W h e n t h e r e a r e f r i c t i o n s a n d i n f l e x i b i l i t i e s i n t h e c o s t a n d p r i c e s t r u c t u r e . A m o n g t h e f a c t o r s w h i c h c a u s e o r p e r m i t e x p l o i t a t i o n o f a r e s o u r c e t o c o n t i n u e l o n g a f t e r i t h a s b e c o m e e c o n o m i c t o c o n -s e r v e , B u n c e (1940) c o n s i d e r e d t h e f o l l o w i n g . F i r s t l y , i n s e c u r i t y o f t e n u r e : B u n c e p r e s c r i b e d a p e r m a n e n t s y s t e m o f l a n d o c c u p a t i o n . 72 In the case of Ghana it is a fact that tenancy cannot be as secure as the individual would like it to be but as long as the remaining lands are under common ownerhip, the individual would be better off by leaving his land for new, more fertile land. Secondly, Bunce considered ignorance or force of custom. His solution lay in "education and introduction of opposing social pressures. " The early foresters as well as those currently ad-ministering the forests of Ghana succeeded in creating a forest consciousness in the people. They succeeded in making farmers realize the economic importance of timber trees. Pressures were brought to bear on the farmers not to destroy forests, and forest laws and regulations creating forest reserves excluded certain areas from usage by agriculture. But these measures did not touch on the problems inherent in the form of land tenure. They did not stop depletion of soil fertility and the entry into unreserved forests by farmers. Thirdly, imperfections in the pricing system especially the capital market were considered by Bunce. He prescribed that social action would improve conditions. In Ghana, the existence of statutory marketing boards which handle the purchase and export of the main cash crops, interferes with the price system and has led 73 to a disproportional investment of resources in cocoa cultivation. "When it comes to the question of social intervention, it is necessary to define concepts of individual and social time preferences explicitly. Bunce (1940) has pointed out that time preference is posi-tive or negative, and it relates to individual evaluation of present utilities to future utilities. It is a subjective concept, incapable of measurement, except to say that it is greater or less than current interest rate. Social time preference, according to Bunce, refers to the net time preference of all the individuals of a society measured by the current rate of interest which equilibrates savings and borrowings. Scott (1955) looked at this concept of social time preference differently from Bunce. Scott set out to examine the theory that: "owners do not conserve resources sufficiently because they must accept the rate of discount on the future, or the marginal rate of time preference, implicit in the market rate on interest on loanable funds. This theory hinges on the hypothesis that there is a social rate by which the state (or society) . should discount future gains and losses; and the hypothesis that this social rate is lower than the market rate. " Scott, after "diligent research, and by generous interpretation of the writings of earlier economiste", combined the political theory of the social will (i. e. , the continuous existence of the state), and the economic theory of socialism to make a case for a social rate of interest. However, he felt that only the existence of producer ignorance 74 provided a satisfactory argument for public intervention. Drewnowski (1961) introduced a concept, state preference function, which is essentially the same as the social time preference referred to by Scott. According to Drewnowski: "In the national economy there exist, therefore, two systems of valuation; the multiple system of in-dividual preference functions and the single State preference function. " Drewnowski (1961) was writing about socialism. Pigou (1932), fearing the "irrational discounting" of individ-uals, wrote in support of the State as the protector of the interests of future generations, and a lower rate of discount. The acceptance or rejection of the concept of social or state preference function does not rule out the fact that the decisions of the government are often a reflection of the choice of some pressure group, or what Duerr (I960) described as "centres of influence. " The possibility of the so-called State time preference being a re-flection of the time preference of either the individuals in charge of the State authority or some centres of influence cannot be ruled out. Bunce has objected to the use of time preference concepts in relation to conservation. Among the major objections to using a difference in time preference between society and the individual 75 as a justification for social action are the following: 1) It establishes a universal cause of exploitation, and this obscures rather than reveals the real causes which may be very specific and far removed from a philoso-phical and moral generalization. As mentioned above, the real causes of the divergence between social and private interests may be insecurity of tenure, lack of capital, custom, or a population density that is too great to maintain the level of living without disinvestment. 2) Because the real causes of exploitation are obscured, public expenditures to control it maybe unrelated to them and result in wasteful and unnecessary controls that may conflict with other social ends. 3) Under most formulations of social time preference, no limits to public action can be established. A l l exploit-ation becomes antisocial, and the possibility of making any rational allocation is destroyed. The above are serious objections, and it means that a more acceptable basis for social intervention has to be formulated. Ln Ghana, there are conditions that prevent coincidence of private and social net returns from soil exploitation. First, there is 76 inequality of knowledge between the farmer and the specialized groups providing information for the organization representing society as a whole. Second, social costs and benefits are not considered by the farmer, and consequences of soil exploitation become transferred onto society. Third, the exchange economy is only now permeating the fabric of rural society in Ghana, therefore, there is a low price responsiveness. Finally, one condition under which private and social net returns coincide does not obtain in Ghana: that there must be fluidity in the possibility of altering the combination of factors of production so that adjustments in the proportions used may easily be attained in response to changes in prices, costs, and expectations. These adjustments refer to marginal ones. But in a developing country, adjustments tend to be massive since structural changes and the introduction of whole sectors into the economy are the essence of development. The problem of land tenure and the general pattern of land-use in Ghana can now be reformulated to hinge on the following es-sential factors: 1) The retention of communal ownership of land. This generates common property characteristics of the soil resource, calling for control by an outside agency. 77 2) The existence of the State and the vesting of ownership of communal lands in the State. 3) The dynamic and unsettled claims of forms of land-use on the land resource. The major forms of land-use are forestry, agriculture and mining; and 4) Under conditions of communal ownership, shifting culti-vation and land rotation, it has been noted that the ab-sence of an economic rental charged against users of land in order to obtain an economic allocation of re-sources and an economic intensity of use can lead to fertility depletion. Even the institution of secure and private tenure in the midst of communal la nds does not yield optimal results. Economic Objectives of Timber Production Forestry The solution of the basic problem of land tenure is a pre-requisite to orderly development of the forest resources of the country. Specifically, such a solution would put an end to the con-fusion over what is forest land and what is not. It would avoid adherence to the principle of "good" forestry which implies growing the maximum volume of merchantable wood on each and every acre of forest land. It would instead draw attention to Duerr,'s (1949) 78 definition of forest land: "The term forest land is intended to be interpreted in such a way that the question of the utilization of land may be regarded as a part of the economics of forestry where forestry is one of the possible altern-ative uses. " Scott (1955) pointed out that words like "maximum" qualify the objective of maximum volume growth to such an extent that any outcome could be called the "maximum" growth on what under the current circumstances is "commercial" forest land. Less pro-ductive lands might be called "uncommercial" or the output there might be said to be the "maximum" possible under the conditions then ruling. Even the concept of maximum physical growth is not nearly as clear as it often appears. Physical growth can be maximized in two dimensions (Waggener, 1966). First, growth can be maxi-mized on a particular site over the duration of the rotation. This is illustrated in Figure 2. The growth function in terms of cubic feet per acre illustrates that total cumulative growth increases with age up to a point, then declines. If Tp represents the total cumula-tive volume, then rotation age Ao would maximize total volume. This form of maximization is obviously not efficient. Second, growth can be maximized on the basis of the mean annual incre-ment (MAI) or average annual growth per acre. Figure 3 shows FIG. 2 FOREST GROWTH : TOTAL VOLUME AS A FUNCTION OF STAND AGE Cubic feet per acre J» MAXIMUM PHYSICAL YIELD AGE (years) FIG. 3 FOREST GROWTH : MEAN ANNUAL INCREMENT AND CURRENT ANNUAL INCREMENT AS FUNCTION OF AGE Cubic feet per acre per year AGE (years) 82 general economic wellbeing or human satisfaction. According to Duerr (1949): "The object is not necessarily to maximize the net return from forests, but to maximize the general net return. Neither is the objective for the community to receive the greatest possible net income from forests, but for it to receive the greatest total net income compatible with the welfare of other communities, the forest contributing as it may to this greatest total. " Duerr is here concerned about external diseconomies and economies which are of some importance in the development of underdeveloped countries. The existence of external diseconomies and economies has long been recognized by other economists besides Duerr. Some of these economists, e.g. Scitovsky (1954), Hirschman (1963) have recognized the links between industrialization and these concepts. The failure of some forest economists to give more attention to the external economies or diseconorriies generated in the forestry sector has led to their formulation of objective functions of narrow dimensions. Dorfman (I960) has noted that one danger arises when an objective function is devised for a part of an organization or a specific operation. Economies and ciiseconomies external to the department or the firm will be neglected. The tendency will be to make choices that seem optimal in the light of that function, but is not necessarily the optimum-83 optimorum for the whole organization. The need for integrated utilization of output from the forests of Ghana, for integrating forest production and wood-based industries and, finally, the need for interdependence of all sectors of the na-tional economy mean that any partial objective function for timber production forestry should be consistent with the overall goals of the nation. Consequently, other problems which policy reformula-tion has to consider concern industrialization, marketing and inter-national trade. The difficulty involved in evolving an optimal policy for the forestry sector of the economy has been well demonstrated by Part I of the thesis. • Part II surveys both the forestry sector and the rest of the economy. The justification for such a survey is found in the interdependence of major sectors of the economy. PART II CURRENT PRACTICES 8 5 C H A P T E R SIX I N F L U E N C E O F EUROPEAN FORESTRY Dumont (1966), in his FAO publication on African agricultural development, summarized the European influence in the following way: i "The first foresters in Africa, being of European origin, tried at the outset to introduce into tropical Africa, concepts that were valid for European forests and European economic conditions then prevalent, such as natural regeneration, which means letting nature take its course. "As this technique has succeeded with Dipterocarpaceae in south west Asia (Malaya and Malay Archipelago), English forestry experts tried to use it again in Ghana and Nigeria. The inevitably overpopulated world of the twenty-first century will no longer be able to rely on the natural forests which occupy vast areas but have an absurdly small output, especially in view of the very lengthy period of time necessary to achieve it. " 86 Dumont also called for a more rational utilization of the existing forest capital, followed by a sounder development of future forest resources. Dumont, a Frenchman, did not have any comment on French foresters in Africa. His attack on the early foresters can be justified in certain aspects, but on the whole it can only be con-sidered as unfortunate. The early foresters were working under the guidance of the 'conventional wisdom' of the late nineteenth century. They could not be expected to be conscious of the requirements of the twenty-first century. On the other hand, the application of un-adulterated principles of European forestry to the situation of Ghana and other tropical countries was unfortunate. The belief that forest management and silviculture should be subjected to as little deviation and modification as possible has taken hold of those currently executing forest policy. It is the practices and principles laid down by the pre-independence foresters which are still in effect. This is not to suggest that political independence for Ghana should mean new policies for forestry and other sectors of the economy. What is suggested is that current economic objectives are hardly reflected in the policy and practices of the forestry sector. This sector aims at achieving an equilibrium state in the form of a maximum sustained annual yield. It is argued that the achievement of a maximum sustained annual yield will be in harmony 87 with the national economic objectives of the people of Ghana. A l l forestry activities - silviculture, management and protection -have, therefore, been geared towards this objective. Problems of national economic development do not seem to plague the forestry sector which is bent on developing the forest resources in isolation. Such a state of affairs exists because foresters have not had their beliefs questioned. Forest management and silviculture are held to be the specialty of the forester, and this is absolutely correct. But what may not be proper is that forest policy should be drawn up by the forest service, based on unproven principles, and executed by the same forest service. This is also a reflection of the European foundations of Ghanaian forestry. The question of who formulates the national forest policy has not been satisfactorily resolved by authorities on forest policy. What is clear, in the case of Ghana, is that following the practice of the European foresters, it is the forest service which formulates, for 'rubber stamp' approval by the government, the forest policy of the country. Other economic and institutional units, whose effective and continued contribution to the wellbeing of the nation depends on the forest and the policies followed, have absolutely no say in the drawing up of the policy simply because they are not foresters. This does not imply that current European forestry is conducted 88 as described above. "European" here refers to the ideas and prin-ciples on which planned forestry in the classical sense was nurtured in the nineteenth and early twentieth centuries. It is these ideas and principles, some of which have long been discarded by European foresters, which are still the foundations of forest policy in Ghana. In most parts of the world it is the forest service that has been known to formulate forest policy for the national forests and, in many cases, for private forests also. There is no objection to this state of affairs in these other countries. There maybe a justifiable basis for the practice. In Ghana, on the other hand, this has proved to be unsatisfactory. Marketing, research, industrializa-tion and international trade patterns have been ignored by the policy-makers. The current state of these aspects of economic life in the country will be considered in the chapters following. 89 C H A P T E R S E V E N FOREST INDUSTRY D E V E L O P M E N T AND MARKETING BOARDS The role of statutory marketing boards in the marketing of agricultural products and the development of the economies of West Africaicountries is a well known phenomenon. The cocoa marketing boards of Ghana and Nigeria, and the groundnut marketing board of Nigeria^have be come permanent features of the two countries. The establishment of marketing boards in Ghana and, for that matter, in Nigeria also, was the result of an attempt to simplify and make more efficient, the chaotic and unorganized system of marketing that existed before the second world war. During the war, the colonial government set up the West African produce control board for other agricultural products, and the cocoa control board to facilitate the marketing of these products 90 during the period of crisis. After the war these boards were trans-formed into statutory boards with monopsonistic powers over ex-ports. Thus, in 1947, the then Gold Coast cocoa marketing board took over from the West African produce control board. Originally, marketing boards were established with price stability as an objective. The aim was to counteract the effect of the low elasticity of demand for agricultural raw materials on the world markets and the consequent fluctuations in prices that occur with overproduction. To avoid short term fluctuations in prices and incomes to the thousands of agricultural producers, the board sought to break the direct link between producer's prices and world market prices. Stabilization of prices, received by the producers over a period of years, was achieved by withholding part of sales proceeds from producers when prices were high, in order to pay them out when prices were low. On the surface, the system of statutory marketing boards appears to be a most desirable thing especially during the last decade when the prices of raw materials exported by underdeveloped countries have been falling. However, there are some economic questions that have to be considered. The first problem involves the concept of stability. Stabiliza-tion may refer to real incomes, money incomes or prices; and, in 91 every known case, stabilization of any one of these may destabilize the others. For example, if there is a drought in a certain year resulting in crop failure and a low yield of cocoa, stable prices will mean low incomes for the producers. At the same time in the inter-national market the price of cocoa, in a year of a heavy crop failure, responds to the supply situation by going up. Figure 4 illustrates this point. The distance AC shows the surplus withheld by the board. The area AOFtj refers to the planned income expected by farmers; AOEt£ is actually what the farmers obtain, and COED is what he would obtain in the absence of the marketing board. From the Figure it can be observed that AOFt^is greater than AOEt2,* COED is greater than AOEt£. It can therefore be deduced that fluctuations in prices do not cause or enhance fluctuations in producer incomes. In fact, when the market is left to function by itself, price fluctuations resulting from variations in supply serve to stabilize incomes of producers, and their removal through marketing board control would destabilize incomes. Further, it may be argued that when there is a general rise in prices and costs, the stabilization of money incomes and prices would result in a de stabilization and depression of the real incomes of farmers. For the optimal allocation of resources, prices and incomes serve to direct resources into and out of different lines of FIG. 4 THE EFFECT OF A CROP FAILURE ON PRICE OF AGRICULTURAL PRODUCE ON WORLD MARKET t 93 production, and in the presence of stabilization of prices, any de-sirable indicators of expansion or contraction are removed. In a situation involving thousands of farmers and their dependants, if a significant percentage of the commercial value of the crop is withheld from the farmers, such withholding should succeed in in-fluencing the volume and direction of effort the farmers put forward. In turn, this will tend to. discourage the maintenance and extension of capacity and the volume of output. Producers already engaged in the output of the crop, as well as potential producers, will tend to find it less attractive to invest in the particular crop compared to other crops and forms of economic activity. Statutory marketing boards, by instituting compulsory stabilization, prevent individuals from facing the risks involved in economic activities. Individuals are assumed to be incapable of setting aside portions of their incomes in times of prosperity. Ghana Cocoa Marketing Board in Relation to Land-Use The above analysis of the replacement of the price mechan-ism by compulsory stabilization of prices, logically leads to an ex-amination of the effect of this practice on land-use. It is true that the heavy accumulation of surpluses by the 94 board raises the level ot total savings (Higgins, 1959), yet the promise of a fixed price and ready market does lead to an over-production of cocoa, hence uneconomic investment in cocoa production under Ghanaian conditions. The production process in cocoa agronomy involves about fifteen years between the initial decision to plant and the first harvest. This means that cocoa producers would predict uncertain future prices and returns on the basis of present or recent past values, and make decisions based on these predictions. On the world market, prices are determined by the interaction of available supplies with the demand function. Successive adjustments in supply and demand amplify rather than diminish price fluctuations This being so, there would be a tendency for acreage, production and prices to vary cyclically. Under conditions where the price mechanism is allowed to function, new acreage planted in any one year would depend on the expected long-run profitability of growing cocoa, the age distribution of existing trees, the expected profitability of alternative economic enterprises, and the aggregate effects of other factors. Stern (1965), in dealing with the determinants of cocoa supply in West Africa, covered the period before the imposition of the cocoa marketing 95 board in 1947 as well as the period under the board's influence. His findings for Ghana for the years prior to the end of the second world war were indicative of a positive, though relatively low, short-run price elasticity of annual production: 0. 17 for 1919 to 1939; 0. 15 for 1919 to 1946. The short-run price change was not significant in the 1946-47 to 1963-64 period. Stern was unable to conclude that the absence of any significant response to price changes, in the post war years, was due to the controls of the marketing board. According to Stern (1965): "Whether this can be traced to the advent of the marketing board would be interesting to determine, for it is in this period that board-controlled producer prices were introduced, and, especially in the late 1950's a con-siderable amount of information and materials pro-vided for disease and pest control. " Stern suggested that the determination of whether and how marketing board policies entered the expectations and behaviour of producers with respect to costs and returns could be studied with the aid of expenditure data from the board's accounts. Data in Table 5 give an indication of the effects of the advent of the board. In 1945-46 the producer price was 25. 5 shillings and, in 1946-47, when the marketing board started to control the trade by fixing a price to be paid to producers, the price was pegged at 50. 5 shillings, which was almost twice the price paid the previous year and, in fact, the highest since 1919-20. In addition to the 96 T A B L E 5 GHANA COCOA PRODUCTION, PRODUCERS' PRICE 1908-1963 Production Price Paid to Year (1, 000 metric tons) Producers (shillings per cwt. ) 1908-09 20.4 40. 5 1910-11 40. 4 39.5 1914-15 66.9 33. 5 1920-21 118.2 20. 5 1924-25 214. 3 33. 0 1930-31 226. 6 15. 5 1934-35 280. 4 14. 0 1940-41 240.7 12. 5 1944-45 232. 6 20. 5 1945-46 212. 6 25. 5 1946-47 195. 2 50. 5 1947-48 211. 0 75. 5 1948-49 282. 7 121. 3 1949-50 251.8 84. 0 1954-55 238. 0 135. 0 1957-58 209.8 134. 2 1960-61 439.0 112. 0 1962-63 428.4 100. 6 Source: Stern, 1965. 97 incentive created by the high price, government set out to persuade the farmers to increase cocoa production. Promises of higher prices were made and were fulfilled - 7 5. 5 shillings per hundred-weight in 1947-48, 121. 3 shillings in 1948-49, 84. 0 shillings in 1949-50, 149. 0 shillings in 1951-52 - and expectations were therefore high. From 1947-48 till about 1957-58 there was a great farming pressure on unreserved forest land (including bush fallows). Cocoa cultivation, since its introduction in the 1880's, had spread slowly and, by 1930, only 1, 406 square miles had been planted. Between 19 30 and 1945 there was not much planting activity. A survey in 1955 showed that about 30 per cent of the closed forest zone was under cocoa, 1, 847 square miles out of this area bore cocoa trees of 0 to 8 years. The acreage planted during 1947-55 was therefore greater than that planted during 1880-1930. The increase in cocoa production resulted mainly from the increase in the acreage under cocoa. Under the system of communal ownership, or common property tenure, there was nothing to stop the expansion of cocoa production. Cocoa, being a perennial crop, became a means of acquiring permanent ownership over land. Cocoa trees have a life span of up to 60 years. The accelerated rate of cocoa growing con-tributed to the rapid diminution of the size of the forest areas of 98 the country. Fixing of Cocoa Prices, Development of the Economy and Domestic Consumption of Forest Products Like that of many other undeveloped countries, Ghana's economy is characterized by a relatively small industrial sector, hence limited employment opportunities outside of the agricultural sector. Agriculture, on the whole, yields a much lower per capita income than industry. This income also has been known to be more variable over time. The lower and more variable per capita income ought to lead to a flow of labour away from agriculture, bringing the earnings in each sector closer to equality. The poverty of the agricultural population, which forms the market for manufactured goods, is a very weak incentive to investors both indigenous and foreign. Raising agricultural income guarantees effective demand for the products of industry. Lewis (1953), in his report on the industrialization of the Gold Coast, stated: "In unenlightened circles agriculture and industry are often considered as alternative to each other. The truth is that industrialization for a home market can make little progress unless agriculture is progress-ing vigorously at the same time, to provide both the market for industry, and industry's labour supply. If agriculture is stagnant, industry cannot grow. " 99 Lewis (1966) added that "the possibility of higher individual earnings is the fuel of economic growth. " The establishment of the cocoa marketing board has meant reduced growth of individual earnings in agriculture. It has also meant reduced growth of internal markets for most processed goods, including forest products. Table 6 shows the prices per ton paid to the producers and those received on the world market by the board for the period 1949 to 1966. For example, in 1954 when the world price per ton of cocoa was U.S. $1,401, producers received U.S. $402; in 1965 the figures were U.S. $423 to U.S. $225,, respectively. If the aim of the board has been to smooth out intra-seasonal price fluctuations by paying the producers less than world prices when these were high, thus accumulating a surplus to be used to support the prices above world market level when they were low, then the evidence is that the price levels for producers have been too low. In one year in the 1950's, the board withheld U.S. $54 million from the farmers (Martin, 1958). Holding back so much money from farmers who had to purchase imported manufactured goods and local manufactured goods, sold at open-market prices, governed by general forces of supply and demand, meant that the terms of trade between agriculture and industry were not in agriculture's favour. The surpluses accumulated by the board have been a source of 100 •33ABLE 6 WORLD PRICE FOR GHANA COCOA AND PRICE PAID TO PRODUCERS P E R TON 1949 - 1966 Y E A R PRODUCER WORLD PRICE PRICE U. S. $ U.S. $ 1949 364 570 1950 242 624 19 51 393 855 1952 447 903 1953 393 861 1954 402 1401 1955 405 906 1956 447 663 19 57 448 741 1958 402 1056 1959 397 855 I960 336 67 5 19 61 336 531 1962 301 510 1963 301 624 19 64 301 57 3 1965 225 423 1966 252 588 Source: Ghana Economic Survey Reports 1959-19 66. Stern, 19 65. 1 0 1 funds for government projects of direct and indirect benefit to the farmers. Some of the projects are roads, hospitals, universities and secondary schools. Most of these projects have not been of benefit exclusively to the farmers. Although development economists are agreed on the de-sirability of taxing away agricultural surplus for the purpose of industrial investment, it is important that the effects of such a tax on the farmers and the introduction of new industries with the Ghanaian market in view, are also considered. Private saving and investment are curtailed. The extension of activities into transport and industrial enterprises is denied the cocoa farmer. Private consumption of the products of the industrial sector is also cur-tailed. Forest products industries are no exception to this, and increases in lumber and plywood production have been to meet in-creasing demands mainly in the world market. This chapter has so far dwelt on the cocoa industry and the marketing board; and the intention has been to assess the f:ole of the marketing board in the introduction of changes in the economic behaviour of the people of Ghana. Another reason is that the timber marketing board, which came into being ten years after the cocoa marketing board was originally meant to function like the cocoa board. 102 Timber Marketing Boards and Growth of Forest Industries The establishment and the functions of the timber marketing board have been dealt with under Forest Policy 1957-1967. Ln this section the economic implications of the board's activities will be considered. The board has been supported in its activities by the Forestry Department's timber inspectorate which grades all exportable logs into three grades. (The cocoa inspectorate of the ministry of agriculture also grades cocoa beans into three grades). The timber board sets minimum prices for the different grades for each species; these minimum prices are uniform throughout the country. The pricing policy thus ignores the costs incurred by-producers in different parts of the country. The buyers tend to quote prices as close to the minimum as possible, and loggers who are too far from the port of export are discouraged by the uniform prices. These prices also prevent the extraction of logs with higher costs of production. The grading of logs, which is compulsory for all export logs, has been instituted on bases which make no economic sense. The Forestry Department, which introduced grading, has given as one of the reasons the unsubstantiated statement that the market in the 103 United Kingdom and other developed countries is a 'high grade market' demanding the highest quality timber. Thus, less than minimum grade logs cannot be exported. Such measures indicate that the Forestry Department, which is only a technical department, but whose judgment is respected by the marketing board, does not accept world market valuations as being relevant for production and export decisions. The minimum standards are always higher than the lowest qualities acceptable on world markets. The prohibition of the export of inferior but commercially marketable logs has three possible results. First, it is likely to frustrate the export of substandard logs already produced. If such logs, after their extraction, are found upon grading to be sub-standard, they then become unfit for export although such logs are likely to attract a price on the world market. Second, the prohibition of export of inferior produce is likely to induce uneconomic expenditure of additional resources; and, finally, the prohibition may deflect production into less valuable activities. Frustration of export of output with a commercial value, but which falls short of the official minimum exportable quality, can be noted in the fact that whenever resources (time and effort) yield substandard output which cannot be marketed, there is an economic loss to the producer and the economy. 1 0 4 Producers may attempt to raise substandard logs to the minimum exportable level. For example, natural defects may be removed by sawing off portions of logs. "When producers are induced to devote additional resources in an attempt to raise the quality of their output merely because lower qualities may not be exported, the cost of additional resources must exceed the increase in the commercially realizable value of the output, and there is a net loss to the economy. When loggers are aware that substandard logs may not be sold and that the improvement of such logs requires additional resources they may be deterred from undertaking the extraction of the logs in question from the forest. Whenever producers transfer their resources to other activities because of the restrictions on exports, the value of their output in the other activities is less than the commercially realizable value obtainable from the production of the product in question. The Forestry Department tends to show obvious pride in the improvement of the quality of export logs. For example, in its report to the Commonwealth Forestry Conference in 1968, the Forestry Department (1968) stated that in recent years, despite competition from neighbouring countries, Ghana has been able to stay in the inter-105 national market and obtain "good prices because of the good quality-timber exported. " The tendency for some officials to confuse technical and economic efficiency is very great, especially in tropical forestry. It is this confusion which often leads to the institution of compulsory grading of agricultural products including timber. The prescription of minimum standards for export logs, and of different grades for minimum price differentials requires a system of compulsory inspection of produce to check whether the minimum standard is reached or to determine the particular grade of the log. The cost of such inspection and grading services is an additional disadvantage of the policies under consideration. This is not to mention the fact that the graders are not infallible. There is not the slightest suggestion, in all this, that grading of logs and other forest products may not be a useful marketing device in appropriate circumstances. Accurate and acceptable grading facilitates commer-cial communication and reduces marketing costs. Any system of grading and the consequential arbitration of contract should be voluntary in the market. Transactions in ungraded products or in products below standards of the lowest recognized grades should be allowed to take place if it suits the parties concerned. This has been amply demonstrated, as shown in chapter one, in the 106 case of so-called, subgrade obeche logs exported to West Germany. From the point of view of producers and the produce exported, the market recognition of grade specifications may be convenient, and they may voluntarily submit produce for inspection and grading. It has been often argued that compulsory grading protects overseas buyers against dishonest and irresponsible shippers. But it is known that most shippers are firms of substance and well known to the buyers. There are resident buyers in Takoradi who know the producers. Large corporate bodies such as African Plywood and Timber Ltd: , and Gliksten and Sons Ltd. , are aware of the value of goodwill in the export trade. In any case, if inferior log supplies are included (accidentally or otherwise) when they are not specified in the contract, the situation can be rectified between the two parties. If the exporter persists in sending inferior grade logs he stands to lose his prestige and the goodwill involved in the transaction. The good name of Ghanaian timber would not be involved in such a case, and the fears expressed about the good name of a country's produce have no justification. In the case of small firms, and especially individual loggers, there may be grounds for establishing safeguards. Such firms are often not represented overseas and consignments are shipped under a 107 letter of credit. The importer, if the logs on arrival should be found to be below contract specification in quantity and/or quality, has difficulty in obtaining redress because fche exporter has by then received most of the contract price. The importer, therefore, bears an additional risk and this may retard the development of the export trade. The solution obviously does not lie in the formulation of minimum standards and grades based only on technical efficiency, which have to be enforced compulsorily. The arbitrary exclusion of logs from international markets under present policies is undoubtedly one of the causes of the low utilization of the forests of Ghana and countries with similar regulations. This exclusion has done a great harm and can prevent the economic development of utilization standards in the woods. The economy of Ghana is underdeveloped and its intake of forest products, as well as other manufactured goods and raw materials, means that the contribution of forests to the growth of the economy depends on the accessibility of the products of the forests to both international and local markets. Any policies that reduce the size of the inter-national market cannot be beneficial to the nation. The timber marketing board's levy of 1 per cent and 3 per cent of the value of export logs appears to be an arbitrary charge 108 to the producers of logs. If the purpose is to discourage the export of unprocessed logs then it is a step in the right direction. If the money appropriated in this way is used for promotional purposes on behalf of log exporters then it can be stated that very little has been done in this regard. It is a fact that the 1 and 3 per cent charges go into central government -treasury. From the description of the powers and functions of the board it can be observed that the board does not play any role in the development of forest industries in Ghana. It is mostly concerned with the protection of the log export trade, although it is supposed to buy substandard logs for resale to local sawmills. The effective integration of forest industries which should be fostered in the country is virtually nobody's responsibility. The Ghana Timber Producers Association (1968) suggested the creation of a timber control commis-sion to replace the marketing board "which serves no useful purpose to the industry. 1 1 Such a commission would deal with the promotion of new industries, publicity and markets, and forest research. The number and siting of mills would be controlled. The commission would be responsible for publishing journals, reporting market surveys, current demands for species, and quantities and prices offered of all buying countries. The commission would be an attempt to bring to-gether the purely technical, so-called traditional aspects of forestry 109 which dominate the Forestry Department, and the industrial and manufacturing aspects. Thus an effective controlling body would be formed to manage the forestry sector of the economy. C H A P T E R EIGHT ORGANIZATION O F RESEARCH Before political independence in 1957, Ghana relied heavily on Britain for research. Forest products research laboratories in Britain handled virtually all aspects of research in the field of wood technology, while the Forestry Department in Ghana concentrated on research into the bases of silviculture, ecology and forest management. There was limited research into Ghanaian woods, and a certain amount of work was done on the mechanical and physical properties of most of the woods. I l l The West African Timber Borer Research Unit (WATBRU) is a good example of the kind of co-operation that can exist in forest research. The unit was established with the object of investigating the damage caused by ambrosia beetles. Timber trade interests in the United Kingdom and West Africa had been concerned about the losses caused by the beetles and, in 1935, the attention of the Fourth Imperial Entomological Conference was drawn to the growing impor-tance of infestation by these in relation to the utilization of lesser-known tropical hardwoods. In 1938, the Nigerian forest service requested a report on the beetles by United Kingdom Forest Products Research Laboratory. After the war, a series of experiments was planned and carried out in collaboration with the Ghanaian and other colonial forestry departments, to investigate the value of contact insectides for log protection, with particular reference to timbers suitable for plywood manufacture. Ln 1953, WATBRU was formed,. with head-quarters in Ghana, working on problems found in the British West African colonies (WATBRU Annual Reports, 1953-1962). WATBRU was part of the West African research organi-zation created by British Government. With the dissolution of the organization in October, 1962 the functions of WATBRU in Ghana were taken over by Ghana's National Research Council. At about the same time, the silvicultural research branch of the Forestry Department 112 was also transferred to the council. In 1963, WATBRU, which had become-the entomological research unit, and the silvicultural research unit were joined to become the Forest Products Research Unit of the Ghana Academy of Sciences (GAS). The Academy is a network of research institutes covering all major fields of learning and it handles all national or government-sponsored research. In February, 1964, the anatomical and physical and mechanical wood-testing laboratories of the utilization branch of the Forestry Department were also taken over by GAS. The nucleus of the Forest Products Research Institute (FPRI) was thus created from the following: silvicultural research unit, entomological research unit (formerly "WATBRU), and the anatomical, physical and mechanical wood-testing sections of the utilization research branch of the Forestry Department. Currently, research into forestry and forest products is being conducted by FPRI, and virtually no other body carries out research on a large scale in the country. The idea of a government sponsored body handling the research needs of the country has some justification. In much of the world, research in forestry and forest industries has government as the leader, although some contributions are made by private industry and univerisities. "What obtains in much of the world does not necessarily justify the organization in Ghana. It is rather the nature of the ownership of the forest resource which 113 justifies the leading role of the government, although this should not prevent private institutions from undertaking research. The major industries in private hands are the logging, lumber and plywood industries. Most of the firms in the logging industry are small in size and incapable of their own research. Except for one, or possibly two companies, none of the sawmillers and plywood producers carries out research. It is, therefore, clear that the FPRI will have to be expanded and structured so as to handle all aspects of forestry research - fundamental, applied and market. This is necessary if the natural resource aspects of economic development are to be effectively handled. During the period June, 1963 to June, 1965 the FAO, at the request of the Government of Ghana, had an expert in the person of Mr . N.S . Spesivtsev working on the possibility of establishing a forestry and forest products research institute. Spesivtsev's visit resulted in a 1966 report on the forestry and forest products research institute. FAO Recommendations The 1966 report on forest research had ten major recom-mendations. It accepted the existing organization and control of research under the Ghana Academy of Sciences. This is contrary to 114 what the Forestry Department appears to want. In its 1960-65 progress report to the Ninth Commonwealth Forestry Conference, the Forestry Department (1968) stated that the transfer of all forestry research to FPRI "is not very satisfactory since some research projects started by the Forestry Division have not been continued. " Perhaps FPRI had a good reason for discontinuing certain research projects. One important recommendation was that FPRI's research activities should be associated with the Ghana national development plans. Another was the need for appropriate collaboration of the institute with the Forestry Department, ministries of industry and agriculture, and other institutions concerned in the preparation of plans for activities in forestry and forest products research. Spesivtsev (I966) also recommended the initiation of forest economics research, the collection of existing results of research on Ghanaian woods and those on similar species in other countries in order to use the data for the formulation of the institute's programme of work. Finally, the desirability of international co-operation and assistance was recommended. Industry Associations and Research Co-operative societies and other timber producer 115 associations exist in Ghana. As far as it can be ascertained these societies may exist in name only, with members not benefiting from the societies to any significant extent. What is certain is that none of the industry groupings carries out its own research, and none gives financial support to the Forest Products Research Institute. A few British firms carry out very limited research in Ghana, since most, so«»called, expatriate firms rely on their facilities in Britain and other overseas countries. For example, African Timber and Plywood Ltd. obtains its research information from the laboratories in Sapele, Nigeria, as well as from Britain. The only reason why there is an apparent lack of interest in, and support for, research is that the majority of those engaged in forest industries are ignorant of the need for research and any long*, term benefits that may result from investment in research. Such ignorance on the part of industry should not be allowed to lead to the neglect of research, neither should it shift the whole cost of research, that will eventually be of benefit to industry, onto the shoulders of government. It may be worth noting that in Canada and U . S . A . expenditures on research by industry are deductible from taxable income, also any government expenditures on research are considered as a reward for taxes paid by industry. 116 Ln situations where funds are required for research, the one possibility of making industry contribute to research is to levy a charge per a certain volume of raw material or product. Such a flat levy on every producer is justifiable on the grounds that, in most forest products industries, any form of innovation, improvement, or discovery normally gets diffused through the industries very quickly* Making everybody contribute towards research in the industry is, therefore, an acceptable proposition, but the difficulty lies in estimating the amount of the contribution. The question of how far the Forest Products Research Institute should carry out research assumes some importance when it is realized that industry may not be able to proceed with research information to the stage of development of the product. The low level of finances, the small size of enterprises, and the inability of these enterprises to take risk should make the undertaking of research by FPRI on behalf of industry a very costly and risky affair. The cost of research, in the circumstances described, should be matched against reliably estimated benefits that are likely to result from the commer-cial application of the results of research. University Research There are three universities in Ghana but no formal 1 1 7 education is offered by them in the field of forestry. In the absence of a Faculty of Forestry it is hardly possible for forestry research projects to be designed and executed by the universities. The funda-mental research that an university normally organizes has a definite role to pi ay in the development of young countries such as Ghana. However, the creation of a Faculty of Forestry will have to be justified first, and after that any plans for research work can be drawn up. Until such a faculty is set up in the country, the Forest Products Research Institute will have to handle both fundamental and applied research. On the other hand, forest science can be introduced in the existing Faculty of Agriculture. The young Department of Forestry in the University of Ibadan, Nigeria, and the older College of Forestry in Liberia, are institutions with which FPRI can profitably be in liaison. Of the three universities in Ghana, the University of Science and Technology in Kumasi has the opportunity of research into wood properties for low-cost housing. Although its Faculties of Architecture and Engineering concern themselves with housing problems, more attention will have to be paid to wood as an indigenous material with possibilities for housing. Engineering courses put greater emphasis on steel and concrete in a country that imports virtually all 118 its steel and cement, and yet has a large stock of wood. It has often been said that the most striking cause of the prosperity of the developed world has been the improvement in science and technology over the past century and a half. This technology cannot be borrowed and applied without adaptation to Ghanaian conditions; scientific and technological research therefore deserves the highest priority. C H A P T E R NINE PROBLEMS O F INDUSTRIALIZATION Industry and industrialism have been the objectives of almost all the independent African nations, and this objective has invariably found expression in the development plans of these countries. With the advances in transportation and communications, the world has literally become a small place. Movements of peoples from developing countries to the developed, and vice versa; television; the existence of the United Nations Organization and its various specialized agencies; and the emergence of new nations have 120 all contributed to the fever of industrialization in the developing world. Most developmental economists are agreed on the need for the development and modernization of the agricultural sector of underdeveloped economies, but there is no agreement among such economists when the question is one of industrialization. As early as 1776, Adam Smith (1784) noted: "That system which represents the produce of land as the sole source of the revenue and wealth of every country has, so far as I know, never been adopted by any nation, . . . " Yet he did not advocate blind industrialization. Instead Smith (1784) considered the problem of capital accumulation, with agricultural surplus production being the main source. Local accumulation of capital for use in the development of agriculture and industry has been known to be a slow means of capital formation and of obtaining foreign currency for the importation of equipment. Smith did not mention the role of foreign aid, but when it comes to the question of capital, foreign aid has come to be accepted as a necessary supplement to locally generated capital. The next problem raised by Adam Smith concerned the existence or the creation of obstacles to trade. He considered that 121 such discriminatory measures even for the protection of "infant" industries were not costless, since they might tilt the balance in favour of some industries and lead to misallocation of funds. Tariffs, markets and exports thus form the second problem of industrialization. The third problem area covers the field of equipment and machinery importation, maintenance and repairs, skills and techno-logical development. The fourth problem worth considering concerns a few selected forest industries that could be set up in Ghana based on local raw materials. Capital-local and foreign The logging and sawmilling industries were mainly built on imported capital. The logging industry was financed on the basis of advances obtained from overseas buyers who had representatives along the west coast of Africa. Ghanaian mercla nts and farmers were also able to invest in the logging industry. Transport contractors, traders, and the employees of such entrepreneurs all contributed to the development of the logging industry. In some cases, Ghanaian foremen and clerks of foreign logging firms operating in Ghana were able to gain knowledge of the workings of a monetized economy, manage-ment of business, and business contacts from their association with 122 the firms. . The system of advances is still in effect, but since 1957 it has been supplemented by Government of Ghana loans which are granted to Ghanaian loggers for use in the timber industry. The loggers' reliance on short-term loans and advances has proved to be a great hindrance to the further growth of their indus try into the manufacturing phase. The loans and advances involve only small sums; they appear not to be much of an encouragement when one thinks in terms of an integrated logging and processing industry, and the effect of the loans has been to make the loggers incapable of long-term industrial investments. Quite a number of the recipients of such capital amounts have not been repaying the loans, and it is well known that some loans were used in putting up houses and the purchase of automobiles for non-industrial uses. Perhaps this is exaggerating the situation with regard to loans but there is definitely room for improvement in the administration of loans. The loans themselves are tied to the logging phase only, and there has not been any attempt to grant loans substantial enough to make investment in any sizeable mill feasible. These government loans happen to be the largest source of credit for the loggers. The banking system, in particular the national 123 investment bank, is now beginning to give consideration to appli-cations from individuals in the logging business. Until the banks come to accept business from the loggers every effort will have to be expended to realize maximum net benefits from the government loans. Among such long-run net benefits can be included the utilization of the forest raw material to a greater extent, and the integration of some panel products industries with the existing industry patterns. Like all other underdeveloped countries, Ghana has had access to foreign capital in one form or the other. The Forestry Department (1952) made the following statement about foreign capital imports during 1946-50: "The expansion of the sawmill industry, largely in the interests of exports, has been even striking. It has come almost entirely from outside capital investment, and the needs of the domestic market have played little part in the various decisions to build the bigger sawmills. The domestic market, however, has inevitably reaped considerable benefit in much-needed lumber, while the country has had the less direct advantages of industrial capital investment. Sawn timber exports in 1950 were fourteen times what they had been in 1945, and new sawmills were being built or had not reached full production. " The decision by overseas interests to erect modern mills in Ghana soon after the war was prompted by what Latham (I960) described as the "disturbances of markets and currencies. " Foreign capital 124 entering Ghana was used for the purchase of logs and the erection of sawmills mainly to serve captive markets in the United Kingdom and Western Europe. In the 1950's and in 1960/61 the veneer and plywood industry was also created with the aid of foreign capital. Currently, foreign capital is expected to play a major role in the introduction of pulp and paper manufacture, and also the setting up of other panel products mills. Foreign capital flow into the under-developed world has been falling in recent years. . It is generally accepted that in both the developed and underdeveloped countries capital is the scarcest resource in most sectors, and for the foreseeable future this is going to be the situation. There have been recent restraints applied on overseas industrial investments by the United States and the United Kingdom, two of the major sources of private industrial capital since the war. Foreign capital, if made available, can be of immense help in Ghana in her plans to develop her resources. It is, unfortunately, one thing to draw up development plans or what Lewis (1966); called 'plans of intention, ' and another thing to have the plans executed, using the resources expected to be made available. Technical assistance offered by the United Nations Organization 125 and/or member countries can be of direct help in the planning and organization of underdeveloped economies. Examples of such assistance are: aerial surveys of the forest resources of Kenya, parts of Nigeria and South America by Canada; and the preparation of feasibility reports by experts supplied by foreign governments. However, it is the execution phase which needs massive amounts of capital which has yet to be tackled. Clarke (1966) has pointed out that economic development of an underdeveloped country is not the prime objective of private foreign capital. He added: "One of the major misconceptions surrounding the operations of private firms in the poorer countries is the assumption that their prime purpose is to help the development of the economy. This is a by-product. Their main purpose in the short-run or the Mng-run is to make profits - no more, no less. " There is a definite conflict of interests - the foreign f i r m is seeking profits (and in some cases the f i r m has to provide some of the social services needed by the country, such as hospitals and roads), while the underdeveloped nation pursues the welfare of a needy nation. Maintenance and Repair of Industrial Equipment Here, the problems stem from the organizational 126 characteristics of the maintenance and repair function, and the selection of the function best suited to the needs of Ghana. For many of the arguments presented below, see the "Report of the group of Experts on maintenance and repair of industrial equipment in Developing Countries" submitted to the United Nations Industrial Development Organization (Industrial Development Organization, 1967). Scarcity of capital is a major obstacle to industrialization and, therefore, some importance has to be attached to industrial attitudes and the economic implications of the maintenance and repair function. This is especially so in countries like Ghana that embark on planned industrialization. Investment in equipment (usually imported) represents a considerably larger share of resources than is the case in industrially advanced countries, and such equipment is often operated at only a fraction of capacity where equipment down time is excessive. Most sawmills in Ghana run only one eight-hour shift a day instead of two as in most industrially advanced countries. Excepting a few cases, there is generally an attitude of indifference on the part of management - maintenance maybe considered an unnecessary burden since it does not yield immediate results. Lack of skilled labour, spare parts, and adequate facilities leads to comparative over-investment in equipment and high capital-output ratio in a country like Ghana that can i l l afford it. This leads 127 to a loss in national income, slower growth for the country, and excess capital investment. The African Timber and Plywood Company (ATP) in Ghana offer examples of the above situation. Brisbourne (1965), who was once the chief engineer and also the general manager of this company, which runs the largest sawmill and plyxnill in the country, had the following contribution to make at the symposium on the economic aspects of, and productivity in the sawmilling, industry, organized by FAO: "To establish its own mills (in Africa) substantial capital is required by the company; e. g., own power plants and engineering services. It has to tie up money in spare parts and reserves of consumable stores; it has to provide good housing and attractive conditions for expatriate staff to train and supervise operatives. Clearly any sawmill would have to be large and highly productive if profits were to be made. " De Gruiter (1963), a director of United Africa Company (Timber) Limited, (which is related to the firm noted above) presented a paper on the economic features of plywood manufacture in Africa at the International Consultation on plywood and other panels organized by F A O . He pointed out that the installation of machinery was more expensive in West Africa than in Europe. This was because more rigid specifications were necessary especially for the electrical parts, due to the humid climate and higher temperature. On maintenance, he stated that the cost has been estimated to be at least 100 per cent 128 higher than under similar conditions in Europe. Investment for machinery would probably be 30 per cent more than in Europe for the same requirements. Specialists attracted with higher salaries, provision for retirement funds, leave in Europe and other high-cost considerations together made management expenses at least 100 per cent higher than in Europe. Wellwood (1966), in his report to the Government of Nigeria on forest industries, recommended that sawmills be licensed to improve standards, and workers in both mills and forests should be trained in the care and use of tools. Problems stemming from ignorance and indifference are widespread in West Africa and most of the developing countries. The principal objectives of maintenance and repair policies in modern industry are therefore: 1) To ensure that all available machinery and equipment are being used for production. 2) To preserve the value of machinery, equipment and plant. 3) To protect the safety of all employees and 4) To accomplish the above objectives economically. 129 Characteristics of the maintenance and repair function in a developing country undergo important changes with the process of industrialization. In addition to the growing stock of machinery and equipment, requiring an even larger maintenance force,, increased use of specialized and precision types of equipment demands constant qualitative change. This is of particular interest when new processing technologies, albeit borrowed from developed countries, are intro-duced locally. For example, the production of engineered chips for particle board, and of pulp and paper will require qualitative changes in the knowhow engaged in maintenance and repair. The unfortunate thing is that there is not sufficient realization in both industry and government of the need for more effective recognition of maintenance and repair as a function. The life of trucks for hauling logs to mills and ports is known to be unnecessarily short because of neglect of maintenance. Tractors, trucks and other equipment, put out of service through sheer neglect, are often seen abandoned in forests, by road sides and at railway sidings. According to the Forestry Department (1968): "Old lorries generally are used for bush haulage and are literally run to death. " 130 In Ghana there are traditional blacksmiths and locksmiths. Industrially - oriented foundries are hardly known and, nuts and bolts have to be imported. Locally manufactured spares for industrial equipment, under present circumstances, raise • problems of quality in terms of engineering technology, quality control, and supply of raw materials of current specifications. It is often argued that the small national markets found in low-income countries make it impossible, or unprofitable, to produce replacement parts. There is also the problem associated with the lack of special materials for such parts. Such arguments cannot be reconciled with the common situation such as the stoppage of veneer production for six months when the lathe breaks down and a replacement has to be imported from Europe or North America. The six months involved cover the process of putting in an order for the replacement, obtaining exchange control facilities, obtaining import licences, and simply waiting for the replacement to arrive. On arrival at the port of entry, there are customs compli-cations, more paper work, in-country transit time and general lack of co-ordination to be faced. These delays and problems should strengthen the case for a local production of spares. The Maintenance Management Problem Maintenance problems are crucial within manufacturing organizations of all types. Modern productive enterprises in developed 131 countries everywhere share many common characteristics. There are generally about six levels of personnel in the organization's hierarchy. First is top management, made up of well educated, highly trained presidents and general managers. Top management is charged with the basic organizational plans and strategies. It is rarely concerned with the day to day activities of the organization. The second level is the top level staff - skilled laywers (usually taxation specialists), personnel specialists, market analysts, research and development scientists and economists. These assist top management in planning over-all strategies of the corporation. They too are rarely involved in day to day operations of the organization. At level three are the functions managers of marketing, plant, engineering, maintenance, finance and research and development. These manage actual operations of the corporation, and concern themselves with routine operations, frequently work directly with those actually performing work tasks, and are responsible for getting assigned jobs done. The fourth level is that of first level management; foramen actually supervising workers in various sectors of the work task. Fifth and sixth levels are for, respectively, skilled labour and a large group of unskilled and semi-skilled'labour. 132 The above pattern has evolved slowly in developed countries. It has endured because it has been found to work well in most industrial situations. "With the transfer of technology from developed to developing nations, the above organization becomes requisite. Although education has been given top priority in Ghana's development plans, trained managerial and technical manpower necessary to staff such an organization in the more capital-intensive forest industries does not exist. There is a lack of middle level personnel especially in maintenance operations, and in the absence of managers and Jfe technicians to plan and organize maintenance, there is wastage and abuse of equipment. There is also a shortage of craftsmen and technicians who actually do the work. In Ghana, and countries in similar conditions, top management is forced to do not only top management jobs, but also jobs of the non-existent subordinates. There are legal limitations placed on the number of foreign skilled technical personnel that can be employed locally; the reason given is that local workers and craftsmen should be given the chance to train. Such regulations, if not applied with caution, could lead to increases in costs and impede certain industry functions. The adjustment of a worker with a predominantly agricultural background, who has been living in isolation from the 133 industrial mechanism, to industrial life is often difficult. Disciplines imposed by industrialization may be lacking among workers and even the supervisors, and, therefore, middle and top management will have to be also interested in day to day activities. Finally, there is the problem of communications barrier among persons of different cultures, i . e. , local personnel and foreign specialists. There maybe differences of thought and action, with the local personnel having to adjust to the demands of life in an industrialized society and the foreigners to adjust also, all leading to increased effectiveness of their contribution to the industrialization process. Possible Forest Industries for Ghana Despite the burdens associated with industrialization, Ghana can boast of a sawmill industry which is the largest hardwood lumber producing industry in Africa. Production of plywood is in its second decade and, if capital and other essential resources can be made available to it, increased plywood production will be feasible, considering the old growth forests with which the country is endowed. Idle resources are available in the form of sawmill and plymill waste, parts of trees left in the woods, so-called secondary species, and the large volume of trees which are poisoned during what 134 has been called 'combined operation. ' Poisoning trees as a silvicultural measure to assist the growth of young stems of established species, is an idea which was borrowed from the Malayan Forest Service. In Ghana, the emphasis on regeneration of the accepted species at all costs (especially at the expense of research into, and development of, uses for the idle stock of trees) should be re-examined. There' is no lack of literature on forest industries and products. "Westoby (1962), FAO (1966a), and Noack (1964), among several writers, have mentioned the possibilities which are available for utilizing the tropical forests. FAO's Timber Trends and Prospects  for Africa (1965) mentioned particle board and fibreboard production as a possibility for Ghana. Pulp and paper production was considered possible in Ghana and Nigeria. Boateng's (1968) analysis of essential features of primary forest products industries of Ghana brought out the-fact that there was very little integration of forest products industries, and a great deal of mill and woods residue could be the basis of other forest products that are now being imported. Brax (1966), in his report to the Government of Ghana, on the possibility of establishing a pulp and paper industry, suggested important measures to be considered by the government. Among the measures he stressed the need for research into the fibre characteristics of the many timber species. 135 Like most countries in Asia, Latin America and Africa, Ghana's forest products imports have consisted of paper and paper-boards, and other board products - particle board and hardboards. The desire to set up pulp and paper industries in the developing countries has been given practical expression in some African countries. Tunisia, Sudan, Ethiopia, Nigeria, Tanzania, Ghana, Kenya, Gabon, Congo-Brazzaville, Uganda and Ivory Coast have been reported to be either considering putting up such an industry or already running one (Pulp and Paper International, 1967). Ghana is, therefore, not alone in the race for industrialization and development of forest resources. It is, however, important that factors of importance to effective industrialization be given due consideration before the desire to industrialize becomes translated into action. The decision to enter the pulp and paper industry is never to be taken lightly. This is an industry of very high investment -U.S. $ 20 to U.S. $ 30 thousand per worker. The dilemma which faces Nigeria at the moment, with a pulp and paper complex installed but no management and technical knowhow to run it, will have to serve as a warning to many other countries. The lower investment outlays that maybe involved in particle board and hardboard production do not preclude the necessity 136 for a thorough research and development of the production of these products before the commercialization stage. The role of industrial research into the production of those forest products that can serve as a healthy complement of the existing lumber and plywood industries cannot be overemphasized. The economically possible industries in addition to those already established can only be decided upon after a thorough investigation into all the technologically possible production methods. Such information which is basic to industrial decisions will be necessary if Brax' (1966) idea of a "general plan for the utilization and development of the forests and prospective forest industries" is to be realized. Since 1963, when the government's seven-year development plan came into being, several proposals for the establishment of a pulp and paper industry, fibreboard and particle board industries, and increased lumber and plywood capacities have been presented to the government. Many of the proposals were really a means whereby some equipment manufacturers and selling agents sought to sell equipment to the government which was then very much interested in entering the industrial field. Brax ( I 9 6 6 ) was critical of some of the feasibility reports that were submitted. After reviewing the reports, he concluded that "they all appear to have beeh based on superficial 1 3 7 surveys of possible raw material resources." Brax' report is an indispensable document when it comes to consideration of further forest industrialization. Tariffs, Industrialization and Trade in Forest Products The nineteenth century concept of free trade without internal tariffs and other trade restrictions, including quotas, on most or all goods traded between a country and all other nations is now hardly adhered to by any country. However, the existence of the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), the General Agreement on Tariffs and Trade (GATT) and, lately, the attempts through the Kennedy Round of Tariff negotiations and the United Nations Conference on Trade and Development (UNCTAD) to liberalize trade have all been operating to create conditions for international trade which differ from the nineteenth century setting. .".Gold, as the international standard, is slowly disappearing and is being replaced by pegged exchanges controlled by IMF, exchange controls, and, in the nearest future, by special drawing rights (SDR). Trade barriers in the form of import quotas, import licences, export rebates, exchange allocations, barter transactions, and government maropolies have been erected by almost all countries. What used to be Commonwealth Preferences have 138 virtually all disappeared, and, as far as countries which export agricultural raw materials are concerned, the margin of pre-ference is no more. For example, Ghana's non-Commonwealth West Africa competitors - Ivory Coast and Cameroun - which used to be faced with a high tariff wall in the United Kingdom, have, since January 1964, been exporting hardwood logs and lumber to the United Kingdom tariff-free. Since 1945, special trading areas have been developed, particularly in Europe. The Rome treaty of 1947 created the European Economic Community of West Germany, France, Italy, Belgium, Luxembourg and Holland (i. e. "The Six"). The marketing aspects of the Community are handled by the European Common Market. The Six agreed to remove tariffs and quota restrictions between themselves over a period of 12 to 15 years, and to build a common external tariff against non-members. By 1964, customs duties on industrial goods traded within the community had been reduced by 60 per cent. By January, 1967 the remaining 40 per cent should have been removed in three stages. A common ex-ternal tariff on industrial goods from non-members was to be fully applied with effect from January, 1966 (Petch, 1.966). The 'Six' also agreed to associate their former and current colonies with the community. Tariffs on goods entering the Common Market 139 from the Associated States were to be eliminated but these over-seas territories would be allowed powers to levy tariffs on their imports from the Market. These two concessions were for the sake of 'infant' industries which might be established in the under-developed countries concerned. The 'Six' would also provide de-velopment capital to their Associate States. Ghana has not made any attempt to become associated with the European Common Market. In the event that Ghana does not become an associate member, Ghana's competitive position among West African countries will be undermined. On the other hand, there is every reason for one to presume that association with the European Common Market will mean loss of economic independence, to some extent. When the government of Ghana comes to decide on this matter, consideration will have to be given to all aspects of the problem. For example, Ghana will have to consider the possible repercussions that will result from being an associate member. Some of these repercussions are changes in the relation between Ghana and the North American markets, and between Ghana and other African markets. The Kennedy Round of Tariff negotiations agreed in 1967 to cut tariffs by an estimated 33 to 35 per cent on world trade. No 140 practical steps to implement this have been taken by the major developed countries. It is unlikely that any action can be taken by the major nations whose balances of payments are currently in jeopardy. Another of the world's moves to liberalize trade and encourage industrialization by the underdeveloped nations is UNCTAD. The Conference was held in March, 1964 at Geneva. At the con-ference many of the underdeveloped nations sought for preferential treatment for their exports. The United States and other developed nations opposed such requests. This was in contrast to the 'Kennedy Round' which was based upon the principle of equality of trading opportunity or the most-favoured-nation treatment. In December, 1964 UNCTAD became a permanent United Nations body with Raul Prebisch as its Secretary-General. In 1968, the second UNCTAD was held in New Delhi. . UNCTAD II's objective, according to West Africa (1968) was as follows: "To study all international, commercial and financial questions of concern to developing countries, its broad aim being to change the world's economic system in favour of those countries. " The 1964 UNCTAD passed resolutions on primary com-modity prices, access for manufactured and semi-manufactured 141 exports of developing countries to rich countries' markets, amount and terms of aid, and the cost of invisible imports (especially-shipping freight and insurance}' to developing countries. The West  Africa (February, 1968), in an editorial, had the following remarks to make about the 1964 conference: "The first UNCTAD conference in Geneva in 1964 put on record, for those who needed this, that during the rest of this century and far beyond, the world's poorer countries would demand that the richer ones should make greater efforts to abolish world poverty, even at the cost of sacri- fice by their citizens. " (emphasis author's) There is no doubt that such an attitude does not solve the problems of the less developed world to the satisfaction of both the developed and the less developed nations. There is no legal or moral obligation on the developed world to 'abolish world poverty1. But this attitude prevails because it is given support by UN bodies, e.g. FAO, Trade and Development Boards, and Technical Ass is -tance Boards. For example, Prebisch, in his report to UNCTAD TJ noted the following (West Africa, February 1968): "The widening gap between the rich and poor nations is being accompanied by rising tensions in the poor countries. The gap can be bridged through a "global strategy of development. " Co-operation would be less immediately bene-ficial to the richer nations, but they too would benefit, through reduction of tensions in deve-loping nations - with the danger of violence these 142 present - and through the increase in world trade which development of the poorer coun-tries would bring. Industrial states should be ready to grant tariff concessions to develop-ing countries' exports without demanding recip-rocal benefits for their own exports, this is the so-called principle of non-reciprocity. " Prebisch appeared not to take the richer nations' views and problems into consideration. In his plan for global strategy of development, consisting of trade policy, international financial co-operation, and domestic developing policy, he gave the i m -pression that any developed country owed the less developed countries something. His plan requested, 1} better access to richer countries' markets; 2) more stable prices for primary products (to be achieved through commodity agreements and removal of import restrictions); 3) Tariff concessions for developing nations' exports of manufactured goods; 4) ;A change of emphasis in aid with more stress on multilateral "untied" aid; and 5) financial compensation for developing countries whose export earnings fall through declines in the prices of primary pro-ducts. . This is the so-called "supplementary finance. " The unreasonableness of the demands of both UNCTAD I 143 and II has been attacked by Hunter (1967), an expert in African affairs, London School of Economics. "The demand the poorer countries now make through UNCTAD is that richer nations, whose policies the poorer cannot control, should alter their pattern of trade and manufacture to suit the poorer. By so doing they increase their dependence and multiply their risks; they narrow their choices of technology; and they distort their pattern of specialization to an external demand which is beyond their control. Moreover it is a peculiarly exacting type of de-mand. Nothing characterizes the developed mar-ket more than the high rate of obsolescence of capital and the rate of change in demand - - - . This is the most difficult field for countries short of capital and skills to enter. " Hunter's remarks could be interpreted as suggesting to the under-developed countries that, if their intention is to be less poor, then they have to make much more sacrifices of current consumption and to work much harder towards such a goal. Governments of the more advanced nations have a responsibility towards their peoples, and for as long as nation-states exist, each country will have to depend less and less on other countries in its attempts at improving the lot of its people. What has been covered so far in this section serves as an adequate background for discussing the introduction of forest industries into Ghana. Markets for the products of any new in-dustries are likely to include both the local demand and the demand 144 in Western Europe, United States, Canada, Japan and Australasia. Ghana's forest industrialization policy can be considered as one that leads to increased processing of raw materials before export, on the basis of an economic integration of processing technologies. The nature of the forest raw material is such that higher levels of utilization call for increasing levels of integration if waste is to be avoided. This principle is generally accepted and its adoption by Ghana can be considered as being in her interest. Being aware of the barriers which exist on the internation-al market, some people might be tempted to implement measures that encourage the setting up of industries in Ghana at a high cost to the country. Brax (1966) had this in mind when he prescribed the following: "Certain measures, such as endeavours to reduce imports, may be necessary to render domestic production feasible even if the sales value of the product is higher than the price of imported mer-chandise. However, measures of this kind are only justified in cases of emergency and could not be defended once the economic conditions in the country are easier. In a country like Ghana, with forest resources in abundance, the establishment of a pulp and paper industry the economy of which is based on protective customs duties is entirely wrong. Therefore, if the establishment of an in-dustry of this kind is desired, feasibility should be calculated on the basis of duty-free import prices of paper. " 145 Both the erection of high tariffs to protect "infant in -dustries" and the support of exports through export rebates are a costly way of earning and conserving foreign currency. Viner (1952) had reservations about the "infant industry" argument for protection. Although, as B-rax pointed out, temporary protection can speed up the establishment and development of potentially profitable industries, the selection of industries to be protected may be arbitrary or even irrational. Further, Viner pointed out that once protection is granted on any grounds, it opens the door to promiscuous protection. Protection to a particular in -dustry is as likely to stifle or delay its generic progress toward economic independence as to stimulate it, since it provides those engaged in the industry a shelter against the normal consequences of inertia, inefficiency or restrictive monopoly. Protection may become permanent, instead of being removed either as the in-dustry has demonstrated in capacity to operate without support. Recognizing social costs involved in protection, . Viner (1952) further pointed out that the prospect of eventual ability of an industry to operate successfully without protection is not a sufficient claim for even temporary protection for, while the protection is being ex-tended, it entails costs for the nation as a whole, including other industries which have to operate without the benefit of special aid. 146 Viner preferred the provision of a definite subsidy during the early stages of an industry to the erection of tariff walls. Ln Ghana, the capital investment act has specific provisions to encourage the establishment of industries based on local and for-eign capital. Concessions such as tax holidays for a specific period; cheaper rates for electricity; duty-free importation of machinery, equipment, and raw materials; accelerated depreciation; and a status of "Made in Ghana", are among several "pioneer industry" incentives. It has earlier been mentioned in this chapter that the panel products (other than plywood) and pulp and paper industries are possible new industries worth considering, in the case of Ghana. These industries exhibit considerable economies of scale (Duerr I960, Westoby 1962). Ln Ghana, as in all low income countries, the small internal markets for the products of these industries, which have not yet been established in the country, have been pointed to as the stumbling block to industrialization. Although market surveys have not been conducted, the usual assumption of low effective mar-kets can be accepted as true. If Ghana is to avoid the experience of some Latin American and South-East Asian countries, then she must embark on an export drive in addition to manufacturing for the home market. According to Dumont (1966), Latin American and South-1 4 7 East Asian forest industries have been designed within the national framework for import substitution and, therefore, have resulted in mills which are too small, costs of production which are high, and markets which are small. A l l these prevent exports even to closest neighbours. The net. result, therefore, has been the supply of products which are too expensive and frequently of mediocre quality to domestic consumers. Any gains from economies of scale therefore depend on successful attempts at securing markets within and outside Ghana. However, the tariff barrier that exists in all the possible overseas markets can be a hindrance to further industrialization of the forestry sector, even in the interest of integrated utilization. Balassa (1965) carried out an evaluation of tariff protection in industrial countries. His objective was to obtain methods of mea-suring or defining the size of a tariff as an index of its restrictive effect. In a general equilibrium framework, the restrictive effect of a country's tariff can be indicated by the difference between the potential and actual trade, when the former refers to trade flows that would take place under ceteris paribus assumptions if the country in question eliminated all of its duties. Tariffs affect the pattern of production and consumption. 148 They generally reduce imports and exports under full employment conditions as changes in relative prices associated with the imposi-tion of tariffs lead to resource shifts from export industries to import-competing industries. Balassa paid more attention to i m -ports, so that the difference between potential and actual imports would be presumed to express the restrictive effects of duties. The decline in imports following the imposition of duties would be assoc-iated with a fall in the consumption and an increase in the domestic production of the protected commodities. This is the protective effect of the tariff. Balassa (1965) came up with two concepts, nominal and effective rates of tariff. The nominal rate continues to have relevance for the consumer's choice between domestic goods and imports. The effective rate of tariff, under an assumption of immobility inter-nationally of labour and capital, indicates the degree of protection of value added in the manufacturing process. It takes into account duties levied on material inputs. Thus the protectiveness of national tariffs cannot be indicated by comparing nominal rates of duties and averages of these duties weighted or unweighted. Balassa computed the nominal and effective rates of duties for thirty-six industries of five country-groups, United States, European Economic Community, United Kingdom, Sweden and Japan. 149 With the exception of a few industries, effective duties were higher than nominal rates. This is explained by the relatively low duties on raw materials as compared to semi-manufactured and finished goods, and by the absence of tariffs on non-material inputs that do not enter international trade. As was to be expected, newsprint carried a relatively low effective duty. In Table 7 nominal and effective tariff rates are shown as applied in the above countries on some timber products. Data for Sweden have been excluded be-cause Sweden is not considered one of the possible markets for Ghanaian forest products. The effective duties are sufficiently high especially for panel products, to have a distinct effect on the feasibility of establishing processing plants outside importing coun-tries. On the other hand, the removal of tariff barriers, as re -quested by UNCTAD, may largely benefit other industrially ad-vanced countries. It is these countries which can quickly, at little cost, expand their capacities to take advantage of the change in trade conditions. There is one all-important fact to be considered: Ghana's access to overseas' markets does not depend solely on the absence of protective tariffs. It depends mainly on her ability to reach the consumer. In the modern world of business, high-powered market-ing, promotion and advertisement are the rule, and Ghanaian manu-T A B L E •? NOMINAL AND E F F E C T I V E T A R I F F RATES (%) A P P L I E D IN S E L E C T E D  D E V E L O P E D COUNTRIES ON CERTAIN M A N U F A C T U R E D TIMBER P R O -DUCTS. European United United Japan Economic Kingdom States Community ,  1. Complete wooden packing ^* E . "NT ET "NT E . "NT ET cases, boxes, drums, crates and similar packing; i m -ported assembled, unassembled or partly assembled, other than those manufactured from veneer and plywood. 13. 0 23. 6 10. 0 14. 6 16. 66 35.0 15. 0 23.7 2. Builders' carpentry and joinery products (including prefabri-cated and sectional buildings, and assembled parquet floor-ing panels) other than shutter-ing for concrete. 14. 0 26. 1 free 16. 66 35. 0 15. 0 23. 7 3. Spools, bobbins 7. 0 10. 2 10. 0 14. 6 - - 15. 0 23.7 4. Other articles of wood 14.0 26.1 10. 0 14. 6 16. 6 35. 0 20. 0 35.0 5. Chairs and seats other than medical and surgical furni-ture. 17. 0 32.9 17.5 31. 6 25. 5 55. 3 20. 0 35.0 6. Other furniture and parts thereof 17. 0 32.9 20. 0 37. 3 25. 5 55. 3 20. 0 35. 0 N - Nominal Source: UNCTAD paper T D / B / C . s / A C . 2/4, based on Balassa's evaluation. E - Effective 1966. 151 facturers would have to establish costly links with the consumers, as well as compete with some of the world's forest products giants. It is, however, worth noting that some of these giants are willing to act as distributors, to increase their own share of the market. Currently, these are the challenging conditions that face countries like Ghana, in their attempts to industrialize for both local consumption and exports, particularly to the developed world with which trade in capital goods is attractive. In the sphere of economic groupings^, and trade areas, African countries have also been attempting various forms of as-sociation. In 1966, twelve West African countries, including Ghana, met and resolved to "promote, through economic co-operation, co-ordinated development of their economies, especially in industry^ agriculture, transport and communications, trade and payments, manpower and natural resources. " (Economic Commission of Africa 1966). The ultimate objective would be a common market. In prin-ciple, they agreed that a treaty should provide for a common agri-cultural policy, non-discimination in inter-state trade, co-ordination in education, training and research, common industrial projects and methods of common financing of them, as well as co-ordination of development programmes. 152 The twelve nations' forest development policy would likely be based on the use of the best quality veneer and sawlogs for ex-port; local manufacture of veneer, plywood and sawn wood; partial substitution of imported sawn wood for domestic consumption, to-gether with the expanded use of wood-based panels (Economic Commission of Africa, 1966). Unfortunately, such a policy would lead to the perpetuation of the present pattern of trade in tropical hardwoods. This pattern does not result in optimal exploitation of the forests of Ghana and should therefore be altered. In the next chapter the world trade in tropical hardwoods is discussed. C H A P T E R T E N TROPICAL HARDWOOD FORESTS AND WORLD T R A D E The hardwood forests of Ghana and other tropical coun-tries have been looked upon as a source of primary commodities in world trade. The term 'tropical hardwood forests' refers merely to the source or location of the forests and does not imply any form of advantage over temperate forests. Tropical forest products, like other tropical primary commodities, face the problem inherent in international trade between developed and underdeveloped nations. This problem is economic - entry into the forest products markets of the world, a market in which both tropical and temperate, coni-154 ferous and broadleaved, forest raw materials are offered for end- v uses which for some time have not been dependent on the source of the raw material. The genus and species of wood from any part of the world are of importance as far as identification is concerned, but the economic and technological value has been found to lie in the compet-itiveness of the wood in use, or what Westoby (1967) described to be the extent to which the wood can be classified as 'cheaper-for-the purpose'. Streyffert (1949) noted that there were over 12, 000 dif-ferent timber trees in the world. This shows the wide range of choice. However, economic availability wipes out thousands of these species. For example, the FAO (1966!b) listed over 220 different species that are used for plywood production all over the world. In this chapter the main concern will be with the nature and pattern of trade in hardwood forest products from the tropics, institutional and other hindrances to increased manufacturing before export, and efforts by various organizations. Major Productive Regions Underdeveloped countries are associated with tropical regions. Trade in forest products confirms this fact. For example, in 1964, exports of forest products from the underdeveloped to the developed countries totalled U.S. $540 million. Total exports of the underdeveloped world was U.S. $720 million, out of a world total of U.S. $7,378 million. The developing countries, therefore, exported less than 10 per cent of total forest products exports in 1964. World exports of forest products were just over 4 per cent of total value of world exports of all goods in 1964. Forest products accounted for only about 2 per cent of the value of total exports of the developing countries, while they accounted for more than 5 per cent in the devel-oped countries. Processed forest products accounted for less than 50 per cent of the total value of forest products exports from the developing world while they accounted for more than 90 per cent of the total value of developed countries' exports of this commodity group (FAO, 1966 c). Tropical hardwoods have gained acceptance in world trade through their decorative, machining and in-use properties. Countries in West Africa, Central America and continental South-East Asia have been the major exporters. The bulk of the trade in tropical hardwoods is made up of the lighter, softer woods with superior machining properties. Some of these woods are okoume (Aucoumea  Klaineana Pierre) from Gabon, obeche (Triplochiton scleroxylon K. Schum) from Ghana, Nigeria, Ivory Coast and Central African Republic, ramin (Gonystylus spp.) from Malaysia, and lauan 156 (Shorea spp.) from the Philippines, Indonesia, Malaysia and Cam-bodia. It was these woods that made up the greater part of recent growth in trade. Table 8 shows the growth of obeche's contribution to Ghana's log exports between 1948 and 1963. The data for lumber exports show a sudden fall in the percentage between 1953 and 1954. Foggie (1959) explained this as being the direct reaction to the re-moval of control on softwood timber imports in the United Kingdom. The removal of the controls led also to the rise of softwood imports in the United Kingdom. In earlier years when the post-war restrictions were in force in the United Kingdom, obeche was taken in large quantities in lumber form as a direct substitute for softwoods. Obeche is a soft, light, whitish wood, easily peeled, sawn and worked. Its value is as a substitute for softwood timber for packing cases, backings, cores in plywood and flush doors, where a light, easily machined and not too expensive wood is required. Its price is less than half that of mahogany. Obeche is now taken on the world market on its own merits in competition with other soft hardwoods and coniferous timbers (Foggie, 1959). In the export of tropical hardwoods the greater part of the recent growth in volume came from South-east Asia where the Diptero-carp forests are rich in the species in demand and there is good access 157 T A B L E 8 P E R C E N T A G E V O L U M E OF O B E C H E (TRIPLOCHITON S C L E R O X Y L O N K. SCHUM) IN T O T A L EXPORTS, GHANA 1948-63 Year Logs % Lumber % 1948 7. 1 4. 2 1949 28. 6 20. 0 1950 22. 7 33. 6 1951 25. 1 27. 5 1952 27. 3 25.9 1953 36.7 28. 5 1954 35. 2 13. 1 1955 53. 0 13.8 •1956 43. 0 11. 2 1957 61.4 13. 6 1963 59.9 16. 0 Source: A . Foggie and B. Piasecki 1962. Forestry Department Records, 1964. 158 over large areas to deep water transportation. West African forests, with their characteristic heterogeneity of species, supplied most of the rest of the growth in volume. Ln Ghana, for example, 6 of the 23 species currently on the export list accounted for more than 50 per cent of the volume of log exports in 1966. These 23 species are part of a possible 200 species. Taylor (1962) stated that in the Ivory Coast, which shares Ghana's western boundary, and which exports roughly the same species as Ghana, only 20 to 25 species are exploited out of about 200 species of big and middle-sized trees normally inven-toried in the forests. Of the possible 25 species, only 12 consistently appear as exports or are taken by local sawmills. Throughout the trade in tropical hardwoods there has been little expansion of the range of accepted species in recent times. In the past two decades only kokrodua (Afrormosia elata Harms.) has been introduced in quantity. Hopes of having any more species accepted in the world market for lumber and plywood production are now dwind-ling; therefore, policy should aim at the local markets for these pro-ducts, or the transformation of the lesser known species into board products. It would obviously not do to take the position that some day the lesser known timbers will become useful so they should be pre-served and not processed into new products. Owuisu-Afriyie (1959) had such a view on the forests in Ghana: 159 "Tropical forests are the highest form of de-veloped complex vegetation on earth, and their complex nature calls for a special study before they are destroyed by man. These forests contain future potential agricultural and forest crops, and it is not known what the inquiring scientific mind may yet find in them for the good of humanity. " The above statement is full of fear and contradictions. Owusu -Afriyie obviously saw into the future when he happened to know that the forests contain potential agricultural and forest crops. Over 60 years of exploitation in the Ivory Coast (Taylor, 1962) and about 70 years of exploitation in Ghana should reveal the utilization possibilities of the forests. Thus policy for thevutiliz-ation of the remainder of the forest species should not be difficult to formulate. In Ghana, the, so-called, secondary species consti-tute only 15 per cent of the yield (Forestry Department, 1968). This is a low figure. It may be referring to what is actually removed and not what is offered as yield. In any case, to hope that all the species offered as yield will be exploited and exported is unreasonable. The problem of unused species is not confined to the tropical world. It is the same throughout the forestry world. Major Importing Countries Trade in tropical hardwoods has some peculiarities. The pattern of log exports does not follow the general pattern of the world 160 trade in primary raw materials. The final demand points are in the United States, Europe and Japan. However, several countries, both developed and underdeveloped, are involved in the importation of logs, their processing into lumber and plywood, and their final consumption in the three above mentioned major areas. The concept of "in-transit producers" of forest products describes the pattern in which a country imports logs from a timber-rich country, processes the logs into some products, and exports these products into the high income countries of Europe and the United States. In-transit plywood producers include Japan, Taiwan, South Korea, Israel, Ryukyu Islands, New Guinea, Hong Kong and Lebanon. Japan is an unusual case. In recent times, Japan has literally been hunting for logs in almost every country or region including the Soviet Union, South-least Asia, Oceania, West Africa, British Columbia and the Pacific Northwest region of the United States. Lauan is the major tropical species imported in log form by Japan from the Philippines, Malaysia, Indonesia, Cambodia, Burma and Thailand. Japan's trade with Ghana is small (FAO, 1966c). The trade between the tropics and Europe resulted from trading, investment and other links, and barriers that exist between the two. The barriers are the tariffs that discourage export of pro-cessed products from the tropical countries. Because of proximity, 161 the log market for Western Europe is dominated by West African producers; the hardwood lumber market, on the other hand, is shared competitively by West Africa and Malaysia. Trade Associations Influencing Markets In the United Kingdom and Europe, the import of tropical forest products has always been influenced by trade associations. Two of these are: the Hardwood Section of the Timber Trades Feder-ation of the United Kingdom, and the Association Technique Inter-nationale des Bois Tropicaux (ATIBT) of France. The United Kingdom body is a member of ATIBT. The ATIBT undertook, with the help of European trading organizations, the preparation of a grading system which would cover the different qualities of logs being exported from the tropics and, at the same time, give a reasonable distribution of different grades. Rules for export of logs from West Africa originated largely from the import trade practices of the importing countries. The Ghana rules, undoubtedly, were based on the ATIBT system. This system has three main grades (I, II and III) and two intermediate grades (I/II, and II/III). Log lengths are a minimum of 12 feet, and a girth of 7 5 inches minimum for most species, and 50 inches for avodire (Turraeanthus africana Welw. ex C. DC). According to FAO (1966b): 162 "The introduction of any new grading system, either to obtain greater standardization or for other reasons, always meets a considerable amount of opposition from those anxious to retain existing practices. ATIBT rules should be regarded as an indication of the general requirements in grading in West African logs rather than a fully accepted system. " The Timber Traders Federation of the United Kingdom was formed during 1892-96, beginning with committees on foreign timber importers and foreign timber merchants (Latham, 1965). It publishes trade journals, and deals with insurance rates, bills of lading, contract forms, and charter parties. Its Foreign Importers' and Merchants' Section deals with trade in tropical hardwoods. Contract forms cover importers, agents and brokers during arbitration. Agents and brokers adhere to the principle of selling only to merchants and not to consumers. Merchants buy only through agents and brokers, and not direct from shippers. Logs, lumber, plywood and Common-wealth hardwood grading rules are formalized by the Section. Finally, mention should be made of the Timber Committee of Europe which works together with the Economic Commission for Europe. This Committee also seeks the welfare of those engaged in the timber industries of Europe. Protective tariff levels are set with the advice of the Committee, and the interests of European importers are indirectly secured. 163 The relatively stringent requirements for peeler and saw logs in a well defined and extensive supply pattern encourage 'creaming' of the tropical forests, and work against closer utilization. Marketing policies in exporting countries should, therefore, seek to break the artificial barriers which have been erected without economic considerations. PART n i RECOMMENDATIONS FOR T H E F U T U R E C H A P T E R E L E V E N A POSSIBLE LAND USE POLICY FOR GHANA Parts I and II of this thesis have demonstrated that land use for forestry and agriculture is far from being a settled question. So far the allocation of land between the two forms of land use has been greatly influenced by the common property characteristics of land tenure in the forest zone of the country. 166 The first two parts of the thesis have dealt with the economic consequences of this form of land ownership. The communal aspects of the land ownership problem were more pronounced during the early-commitment of land to annual and perennial crops for local and export markets. It has been found that both annual and perennial agricultural crop owners have tended to consolidate their hold on the pieces of land they and their families have been cultivating. Evidence of this consoli-dation is found in the increasing number of individuals who register the ownership of land with the Land Registry of Ghana. It can be stated that, as the economic returns and possibilities become apparent to people under communal ownership, the tendency has been for private ownership of land to become established. The above appears to suggest that private tenure of land is more favourable than communal ownership. It may also suggest that individual tenure may stimulate l o n g » t e r m development of the holding. This implies that the individual is more likely to obtain credit to develop the land that is his own than land over which he only has a permissive right of use. On the other hand, although the system of communal owner-ship may have its aspects of insecurity, there are certain other aspects which make for some security. Firstly, the sharing of land 167 among families is a civic obligation performed by the chief. Secondly, use of a particular piece of land tends to establish preferential claims. This latter aspect has been one of the bases for registering land. Ownership of land is at present a mixture of private and communal. It can safely be assumed that mixed ownership will continue to exist in Ghana. The forest reserves in the forest zone are virtually all communally owned. The settlement of the ownership problem does not automatically lead to optimal usage of land resources for agri-culture. Land rotation and extending acreages continue for as long as the pressure on land by population is low. Depletion of fertility continues. As acreages are increased, uncommitted land diminishes, and the length of time for which a piece of land can be allowed to lie fallow and recover fertility is reduced. It appears that ignorance of soil conservation through fertility maintenance prevents the achieve-ment of some form of stability in agriculture. In the absence of such stability, there can be no easing of farming pressure on forested land. In the presence of private and communal ownership of land, policy should aim at improved methods of agriculture (including the use of chemical fertilizers and crop rotation). The absence of an economic rental that has to be charged has been indicated as encouraging soil depletion. Agricultural research will have to be 168 undertaken so that the right level of soil fertility fore conomic conser-vation purposes can be established. With the establishment of the optimal level of soil fertility for agricultural productivity goes the estimation of economic rents for intramarginal lands. These rents can be used to pay for any fertilizers that may be distributed to farmers. In Chapter Five it was pointed out that in the presence of uncommitted fertile lands and, under communal ownership, shifting cultivation and soil depletion seem to be the logical patterns of agri-culture. Two possible ways of securing estimated rentals for use in fertility recovery are: first, the levying of such charges by the local government authorities or the central government, or those who may be charged with soil conservation; second, formation of farmers' co-operatives which will secure improvement of agriculture through blocking of farms. The co-operative set up can make loans available to members. It can supervise the administration of the loans to ensure that the funds provided are spent on improvements. The co-operative will tax away all rentals to be used as a source of funds for soil conservation and related uses. Farmers should be told about the economic consequences of soil depletion. They should also be told that fertility resulting from 169 forest fallow is not costless. It is when people in the agricultural sector are aware of the costs involved in soil depletion and amendment that the pressure on forested land can be reduced. Policies for agricultural development beyond the securing of land resources for both agriculture and forestry cannot be discussed in this thesis which is mainly on forest policy. Having accepted private and communal ownership of land, and having instituted economic rentals, there is the problem of funda-mental knowledge about land classification and a national forest inventory. The latter has both short-run and long-run purposes. In the short-run it enables the nation to know the extent, volume and location of its forest resources. In the long-run the forest inventory will be useful in the allocation of areas for forestry purposes, including benefits from forest influences and commercial forestry. In the area of forest influences, policy should seek to under-take research into possible claims by the Forestry Department in the current policy, in order that correct emphasis would be placed on the role of forestry. It will be recalled that doubts have been expressed on the role of forests on cocoa tree growth and fruiting. Policy for protective forestry will have to be based on research findings. 1 7 0 Policy objectives for exploiting forests and forest regener-ation will be discussed in Chapter twelve. This discussion on a possible land use policy has not covered mineral and inland fishery resources. These have been left out, not because of their unimportance, but because including them would involve analysis beyond the scope of this thesis. There is, however, the need for pointing out a few aspects about these other forms of land use. The exploitation of bauxite is opposed to the claims of continuous forestry, and there have been instances when even reserved forests have been salvaged in order that the land could be exploited for bauxite. The same can be said of manganese, diamonds, and, to some extent, surface mining of gold. Diamond winning has always meant an end to forestry over a piece of land which has proved to be diamond-rich. Attempts at rehabilitation have always failed, and it is unlikely that successful rehabilitation will be economically justifiable. In the final analysis, policy for such conflicting situations will have to be based on market forces, costs and prices. Interdependence among some forms of land use will have to be given due recognition in any policy decisions. This requires the co-operation of the various agencies and individuals directly concerned 171 with the various forms of land use. A policy of 'going it alone in order to beat other agencies to it' does not lead to optimal allocation of land resources. Neither does a policy of 'what we have, we hold. ' Ln the long-run that use with the highest economic net return secures the land C D ncerned. To avoid, even a temporary misallocation of resources, each agency should be certain that all other claimants to the land have been consulted. C H A P T E R T W E L V E POLICY FOR FORESTRY AND FOREST INDUSTRY , D E V E L O P M E N T The thesis has concerned itself, basically, with the positive contributions which the forests of Ghana can make to the growth of the national economy. It has become obvious that the 'intangible benefits' that forests are said to possess require to be investigated more extensively before such benefits can be evaluated. One thing is certain, that as early as 1888 timber exports began to contribute to the foreign exchange earnings of Ghana. Within Ghana itself the products of these 173 forests have found uses in construction (both residential and non-residential), furniture and vehicle-body manufacture, mining timbers, railway sleepers, and other industrial and rural uses. While Ghana must rely primarily on increased agricultural production, forests have been a major natural resource which can be a basis for profitable industrialization. Ghana has been a major producer of minerals - gold, bauxite, diamonds, manganese - but, on a value added basis, the wood based industries lead all other manufacturing industries. Statistics for 1959 onwards have shown the wood products sector to be in the lead. On a value added basis, the sector accounted for 40 per cent of all-industry contribution. Fifty per cent of industry wages and 38 per cent of industry sales were accounted for by the forest-based industries in 1959 (Government Statiscian, 1967). Further insights into the role of the commercial forests of Ghana can be obtained in an inter-industry analysis of input and output data of the Ghanaian economy. It is felt that a normal timber trends and prospects survey will not be sufficient for formu-lating a future role of forests in a growing economy. The foreign exchange earning capacity of the forests constitutes a role which is hard to forecast. This capacity can be altered depending on how far raw materials can be processed before 174 export. Contributions to balance of payments through the export of forest products are very important to the economy; in 1964, forest products formed 13 per cent by value of exports. This figure dropped to 11. 3 per cent in 1966 (Government Statistician, 1967). Forestry Development Ln Parts I and II of the thesis the objectives of maximum sus-tained yield and maximum productivity of the soil were critically analysed. The concept of a permanent forest estate was also analysed and criticized. It was suggested that the Forestry Department's policy of dividing the forest resources of the nation into "reserved" and "unreserved" categories should be dropped. In place of that the department should extend protection and control over forested lands of all types, both reserved and unreserved. This should secure the forest resource for use by the people. It would also ensure that the forests have other functions in addition to their protective possibili-ties upon which reservation was based in the past. In Chapter Five various criteria for managing a forest resource were noted. Physical criteria for optimizing the return from forest production have been criticized by some forest economists (e.g. Duerr, 1949; Haley 1966; Waggener, 1966; Nautiyal, 1967). Having critically looked at the current Ghanaian policy, which is 175 aimed at maximum physical productivity and value, on the basis of sustained yield, attention has to be turned to the alternatives that are worth considering, Duerr's (1949) three criteria were mentioned in Chapter Five. Haley (1966), in prescribing an objective for the Province of British Columbia, suggested the following: "To manage the forests of the Province in such a way that the benefit derived by the people of the Province, from the resource, is maximized. " Nautiyal (1967) suggested the following: "The goal of maximization of present worth of net benefits from forest land can be the alternative goal which the foresters may try to achieve. " Fedkiw (I960) chose the maximization of the net present worth of the firm. McKean (1958) has pointed out that a criterion which maxi-mizes gains or benefits without regard to cost or resource limitation is not optimal. Likewise, minimization of cost regardless of other consequences cannot be optimal. Both gains and costs must appear in the criterion. According to him, the appropriate criterion is one that maximizes the net between gains (benefits) and costs. However, from the national point of view, McKean (1958) noted that spillovers (or external economies and diseconomies) from actions of economic units have to be considered in order that social welfare can be maxi-mized. This is an important point especially when it is noted that 17 6 the objective of the national economic policy is to maximize the national product per capita of the population. In this thesis the objective of maximizing the present worth of the net benefits from forest land will be adopted. This objective will have to be subjected to the constraints that are the outcome of the objectives of national economic development. This qualification is necessary because economic facts are not purely economic, they are always in the context of nationalism. The constraints and objec-tives of the national development policy are aimed at the maximiza-tion of the national product per capita, hence forest policy objectives cannot be considered in isolation. In this connection, national ob-jectives of industrialization, foreign trade in processed rather than raw materials, and employment are worth mentioning. Forest Exploitation Parts I and II critically analysed the policy of minimum felling girths. This policy, as has been pointed out, is meant to con-serve forests. Forest conservation per se cannot be compatible with the aims of economic development. In essence, economic develop-ment aims at giving better employment to the existing services of labour and land (natural resources). To do this it often will be neces-sary to withdraw these factors from their present occupation. This can be done through the application of capital. 177 The marginal theory prescribes that the best time to cut down a tree is when the rate of net value growth is just equal to the sum of the rate of interest, or the rate of return on alternative in-vestments and the rent of the land. Therefore, felling girths that merely conserve the forests cannot be justified economically. As noted by Smith and Haley (1964) the cut from forests can be increased safely when economic rather than physical criteria are used. In the case of Ghana, the presence of old growth forests alone makes it imperative that no legal limitations be placed on felling girths. The removal of legal controls on felling girths also means that the objective of achieving forests of the structure of mixed species and ages has to be reviewed. Alternative methods of exploit-ation and hence regeneration have to be considered before an optimal policy can be adopted. Forest Regeneration In Chapter Four it was noted that the Forestry Department aims at regenerating most of the forests naturally. This has meant that selection forestry practices have to be adopted, and high minimum felling girths have to be enforced. These measures completely ignore the cost of holding stocks of trees that, in all probability, are putting on very little increment in volume or value. 178 The regeneration policy should consider all possible alter-natives of achieving regeneration at reasonable cost. This may en-tail entry into lands that have had their forests exploited on a clear-felling basis. It will also entail the rejection of certain lands, in-cluding even those which carry forests now, that would be uneconomic to rehabilitate. In short, the policy should recognize that forest regeneration or investment can only be undertaken under circumstances that maximize the economic returns from the operation. Man-made Forests The paucity of plantations of Ghana tends to raise objections in the minds of some foresters. However, from the national view-point, the further investment of resources in forest production in the midst of a large stock of old-growth, requires careful consideration. After all, forestry is one of several forms of activities into which the resources of the nation can be put. But, on the question of artificial or, so-called, man-made forests versus naturally regenerated forests, the decision should be based on the achievement of optimal returns from any expenditures that maybe incurred. According to Asare (1968), the total area of man-made forests in Ghana at the end of 1966 was about 20, 000 acres. These are forests to be exploited commercially for industrial purposes. There are other artificial forests which are for the protection of watersheds. These latter forests are not included 179 in the total. It has not been possible to obtain meaningful data on these man-made forests. The methods for raising these forests have proved to be unsatisfactory. The two major methods have been described as enrichment planting and 'taungya'. The 'taungya' will be discussed here because of the importance attached to it in tropical forestry. The 'taungya' is an agri-silvicultural system used in re-served forests. According to Kese (1964), the system is used "where there is a definite shortage of land for farming in adjacent unreserved areas. The object of the system (in Ghana) is to replace existing natural crop, after full exploitation, with a crop of a planted fast growing species which will mature in about 50 years. " 'Taungya' is thus the same as the "Shamba" system of afforestation that Spears (1962) referred to and is practised in Kenya. It involves supervised clearing of the land by the farmer, after com-mercial exploitation of the area. The farmer sows his seeds among a plantation of saplings of forest trees. Cropping by the farmer is allowed for three years on a piece of land, after which a new area is allotted to him. In 1869, agric-silvicultural plantations of teak were experimented with in Burma from where the name 'taungya' originated. According to Donis (1945): "From 1873 'taungya' became a standard, expanding and successful technique in many territories in semi-180 humid and dry types of tropical forests. The temporary use of forest land by agriculture is an argument for the extension of this practice as there is no financial charge for the establishment of the tree plantations. " According to the FAO (1962) 'taungya' perpetuates tradi-tional agriculture, and does not resolve the question of inefficient land use. From his experience, Kese (1964) noted: "That the success of 'taungya' plantations depends on the co-operation of the farmers, and the co-operation of the farmers has proved to be dependent on whether there is a definite shortage of land for farming out-side the forest reserves or not. " The 'taungya' area in Ghana is added to at an annual rate of 500 acres (Asare, 1965). According to Asare (1965) the total planted area consists of countless annual blocks of three to twenty-five acres scattered over the forest area. Rarely is there a con-tinuous planted area of forty acres or more. Asare (1965) summed up the 'taungya' system as follows: ". . . attention has been focussed on the currently assumed unproductive reserves i .e. the worst sites of the permanent forest estate. Some of the coupes . . . . have been sited on terrain where future extraction possibility cannot now be dreamed of, even given a large enough area of plantations. " From the above discussion, it is clear that a future policy 181 should rely less on 'taungya1. This is because the occurrence of land hunger, the location of the farming community, and the choice of area which should be as close to the settlement as possible, do not necessarily coincide with the most economic location of industrial plantations. Instead policy should seek to concentrate plantations in large blocks to minimize operational costs. Concentrating on a small number of fast growing species should be preferred to the use of slow growing luxury woods. These latter woods if concentrated upon, can only mean Ghanaian woods will be priced out of future markets. As far as choice of species is concerned,. both indigenous and exotic species should be studied. Research into spacing con-trol, stand density, yield and growth studies, and the costing of various silvical operations will have to be undertaken. Forest Industry Development Ghana, in the second half of the 20th century, when every developing country seeks higher per capita incomes, cannot afford the luxury of an over-capitalized forest; neither can she afford the economic waste that is created in the wake of exploitation and utilization of the forest. Zivnuska (19 67), in discussing resources and economic growth, pointed out that mere inventories and determination of areas are not enough. 182 "The problem of forest development must be recognized as one involving a fully inte-grated relationship between the resource and the resource-based industry within the total economic environment. The forest area and its timber must be developed and managed in balance with the industrial structure using the wood as its raw material. Such a balance must be conceived and planned over a long period of time, with shifts in the nature of the industrial structure being phased and matched to shifts in the nature of the raw material as the forests are moved through successive stages of exploitation and development. " For an underdeveloped country like Ghana, the 'total economic environment' referred to by Zivnuska (1967) includes, to a large extent, the world markets for Ghana's forest products. Forest products industries which exist now are, in fact, export industries and, although there are sawmills which cater for the home markets, the major firms in the sector are more export-oriented. However, any forest industry planning should have the economy of Ghana as the ultimate beneficiary, so that the forests can contribute their maximum to the development of the economy of Ghana. Maximizing the contribution of forests and forest industries to the growth of the economy of Ghana has been observed to be very difficult in view of the barriers to industrialization, and tariffs on processed goods. Table 9 demonstrates the gains that accrue to a nation that exports processed products. For example, the unit value 183 T A B L E 9 UNIT VALUES O F FOREST PRODUCTS,  AND PROPORTION O F PRODUCTION ENTERING  INTO INTERNATIONAL TRADE, 19 59/61 (All figures are approximate) Commodity Unit . Value US$per m. t. Raw Material index 1 / World trade as proportion of world pro-duction  Per cent Remarks Unprocessed round 2 wood -Fuelwood 10 100 0. 2 Poles 30 100 2 Pitprops 20 100) 6 Pulpwood 15 100) Hardwood logs 35 100 8 utility grades 10 quality grades 50 Coniferous logs 25 100 0.9 Processed wood 11 Sawn hardwood 75 195 6 utility grades 65 quality grades 110 Sawn softwood 65 215 13 Plywood 210 265 10 Particle board 115 140 9 Pulp and Pulp 16 Products Fibr eboard 90 140 19 Woodpulp 125 310 16 mechanical 65 165 7 chemical 130 330 20 Great variation in quality Proportion in world trade has been stimulated by sur-plus capacity Most production directly conver-ted to newsprint in integrated mills 183a T A B L E 9 (Cont'd) Unit Raw World trade Commodity Value Material as proportion US $ per index 1 / of world pro-m. t. duction Per cent Remarks Paper and paperboard 165 newsprint =35 fine paper paperboard 230 120 180 190 240 110 16 54 5) Usually tariff-free; imports subsidized in some countries High import tariffs in many countries 1 / Raw material index: Tons of raw material required to produce one ton of product x 100 This depends on processing wastage, moisture difference, and additives. Source: FAO, 1965. 184 of high grade hardwood logs exported was US $50 per metric ton in 1959/61. In the same period, the value for plywood was US $210 per ton. Integrating the production of plywood with that of lumber and, possibly, particle board, would mean the utilization of residue involved in log conversion and transformation. The net result would be an increase in the returns from forests and forest industries to the Ghanaian economy. Sources of raw materials for integrated utilization are many and varied. The old-growth forests, waste from sawmills and plymills, waste left in the woods, lowering of girth limits in order that smaller sizes can be exploited and utilized, secondary species, and, finally, the large volume of trees poisoned during improvement thinnings can yield such raw materials. Capital may be difficult to obtain. However, if policy should channel all loans to people in the forestry sector towards fulfilling the object of integrated utilization, then the forest products industries can be reorganized to the benefit of Ghana. The products of any new industries, such as, particle board, hardboard and, pulp and paper, may require some form of tariff protection. Here, policy should aim at directing economic resources 185 towards the low-protection group of industries. Of this group, the best industries are those which cost little to protect, are capable of producing exports and external benefits, and can provide employ-ment and profits. It is just not enough to aim at import replacement or, simply, local development. A forest industry development policy will have to be backed by thorough research into the above areas in raw materials, capital, trade and investment policies, as well as, processing and consump-tion technologies. Reorganization of Existing Forest Industry Patterns To ban log exports, either now or in the foreseeable future, will not be in the interest of Ghana. This does not mean that existing capacities or even planned capacities of the forest industries should be left unserviced. In principle local sawmills, plymills and any other mills should have a greater claim on the raw material from the forests of Ghana. At the moment, and since the beginning of commercial forestry in the country, no measures to ensure supplies of raw materials to local plants have been instituted. While the Government of Ghana holds the forests in trust for the people, and ensures the continuous production of timber trees, private organization of productive resources in the exploitation of the 186 forests has been the practice. The manufacture and marketing of forest products are also privately organized. The government grants rights to standing timber to individual loggers, sawmill and plymill owners, and for that matter anybody who proves that he has enough resources to operate a logging business. This is the extent of government control over the disposal of logs from the forests. Logging firms produce logs for both local industries and the export markets. Beyond ensuring that high quality logs are the only ones which find their way into world markets, the government does not control the disposal of logs. The majority of Ghanaian loggers ".Ho not own mills, and their primary markets are the log importing countries. Markets for logs that are processed locally are either secondary or incidental. As in other parts of the world, the markets for export logs fetch a slightly higher price than the internal markets for logs of identical qualities. Therefore, in the absence of controls, loggers would prefer not to sell to local mills. X t is of interest to note that, although export logs are graded by the Forestry Department, logs consumed in Ghana are not. This point is of some importance since it indicates the lack of a pricing policy, standardization and interest in the disposal of logs locally. Grading logs with both their quality and costs in view would 187 help generate an equitable pricing mechanism which would reflect the variation in log quality and production costs which, in turn, would encourage manufacturers to put logs to their highest use. Sawmill owners who have rights to standing timber and carry out logging themselves (backward integration), produce logs to feed their mills and for exports. Here, also, since export logs must satisfy minimum requirements, the cream of the logs get exported, even if it means that owners of other mills operate them under capacity. Plymills and sawmills producing under capacity in the midst of an active log export trade is not uncommon. For example, the 1966 Economic Survey report stated that 64 sawmills of various sizes operated below full capacity. This was not due to a poor demand for lumber. It was due to an insufficient supply of logs, yet 16.82 million cu. ft. of logs was exported (Government Statistician, 1967). Ln summary, then, four categories exist in the wood-based industries as far as log channelling is concerned. These categories are: 1) Logging firms whose business is not integrated with any processing facilities. These firms have the export market in view and have preference for the choicest logs. They occasionally supply local mills with logs. ii) Sawmill owners who have integrated milling and logging but who produce more than their mills' requirement and, therefore, export the cream of their log production. iii) Sawmill and plymill owners who have vertically and horizontally integrated logging, sawmilling and plymilling, but who still find it necessary to export the cream of their logs because of several possible reasons. Some of these reasons are, (a) such firms have financial linkages with an overseas processing firm, b) export prices are higher than prices offered locally, and c) such firms' storage facilities in Ghana are full. iv) Sawmill and plymill owners without rights to standing timber. These rely solely on others for log supply, and are most likely to operate under capacity. This disorganized pattern of exploitation and conversion does not lead to the desired development of integrated forest industries and higher utilization of forests. A logging industry which is not tied to local manufacturing is not in the social interest. Manufacturing industries which do not bring about optimum utilization of a natural resource are similarly not in the social interest. Individual loggers or "contractors" and mill owners have their place. But, the growth of the forest economy requires the imposition of controls if"Ghana is to benefit in the long run. To encourage full use of existing industrial capacities and new industries, a well organized internal log market, fully catering 189 for the requirements of established and planned capacities in the wood manufacturing industries, should be established. Although there has been no study of capital investment in the forest products industries of Ghana, it can be safely assumed that the logging industry is extensive. Logging capacity with reference to the milling industries is in excess of requirements. The uncontrolled growth of logging capacity (anyone with a few hundred dollars can acquire rights to timber and become a contractor) can affect the orderly development of the forest economy. A 'hurried scarcity' of logs of the top quality species can be forced on the local industries if the rate of growth of the logging industry and that of the local mills are not synchronized. In the absence of any controls, the logging phase can become over capitalized, and, in fact, it is likely that this has happened with over 600 contractors holding felling rights and possessing no mills. The setting up of a Log Export Control Committee may not be too late to save the forest-based industries. In the ideal situation all logs should be processed in Ghana before export but, in some years, such a policy can be inapplicable when there is a slump in the lumber and plywood markets. Export of logs may be permitted by the committee only after certain conditions have been fulfilled. If, say, 190 three mills certify that logs offered by another company are in excess of their needs, the export control committee would be informed. The committee would then publish the existence of such logs, speci-fying the grade and quality. If no manufacturing firms come forward, export of the logs would be permitted. Certificates declaring any logs surplus to requirements should come from owners of plants that can profitably process those logs. A policy of this sort should encourage loggers to set up their own mills instead of being forced to sell their logs to other mills. It would discourage firms with connections with overseas mills from exporting the cream of their logs, since excess logs produced by them would, first of all, have to be offered for sale locally. These latter firms would be encouraged to expand into plywood and other forest products. They would also be encouraged to produce more semi-manufactured items, e. g. , core veneer, for further manufacture by their parent organization in the United Kingdom or Europe. The above changes in policy would involve much problem solving. Some of these problems are: i) designing of "royalty" rates on volume basis instead of tree basis. 191 ii) training of a cadre of graders capable of grading both sawlogs and veneer logs, iii) organization of local log markets, and all the activities of the Log Export Control Committee. Integration of Fore stry and National Development Plans Two important points arise in the matter of integrating forestry and national development plans. The first has to do with the authority-responsible for the formulation of the forest policy of the country, the body charged with the execution of the policy, and the body-responsible for assessing its effectiveness. The second has to do with the submission by forest products firms of their investment plans and programmes, and the integration of these expansion and initial plans with the development plans and targets of the nation. The need for subordinating sectoral policies to the national economic development policy of a nation that is bent on achieving a significant level of growth in a short time, cannot be over emphasized. In the past, the absence of, as it were, an outside point of view on the problems of forestry in Ghana has led to the situations described in the early portion of the thesis. This absence also led to the blind adoption of so-called principles of forestry which were meant 192 principally to perpetuate forestry instead of increasing the contri-bution of forestry to the welfare of the society in which forestry is practised. The agricultural and industrial policies of Ghana are drawn up by the officials of the Ministries of Agriculture and Industries, as well as the universities and officers of the Planning Commission. These policies are then modified and accepted by the government which, after all, represents the people. These policies, therefore, fit into the political, economic and social needs of the nation. Forest policy, on the other hand, has not been known to have changed since 1949; it has never been questioned because the profession has always been able to point to the presence of certain principles embodied in the policy which enjoy universal support, including that of the F A O . To bring the forest policy in line with other resource policies, it is recommended that the officials of the Forestry Department, Planning Commission, Forest Products Research Institute, and industry should together review the existing policy. A new and up-to-date policy should then be drawn up for acceptance by government. The execution of the policy would be the responsibility of the Forestry Department, Forest Products Research Institute, and industry. The Planning Commission would be responsible for assessing the effective-1 9 3 ness of the policy. This will be completely different from the practice whereby the head of the Forestry Department draws up a forest policy that complies with the resolutions of Commonwealth Forestry Conferences and those of the F A O . This latter practice was not in harmony with, and could not fulfill, the requirements of the national development plans. Of course, there is no suggestion that professional conferences cannot contribute to effective national planning. The point is that the past performance of the Forestry Department does not demonstrate that the conferences helped to bring about a Ghanaian policy for the welfare of the people. C H A P T E R THIRTEEN SUMMARY AND CONCLUSIONS In Ghana, forestry and agriculture are the major forms of land use. They are also of considerable areal extent. Communal ownership of land has been one of the causes of the state of unsettled land use patterns. Political action in the form of land reforms, and economic remedies such as the formulation of levels of economic soil conservation, require to be embarked upon in order that a more acceptable pattern of land use can be evolved. The creation of statutory marketing boards for the export of cocoa, coffee and other agricultural crops, as well as the fixing of prices for agricultural crops far below market levels, have 19 5 contributed to the expansion of the cocoa industry. This expansion has been a threat to forests and forest lands. The formulation of, and adoption of, a forest policy were not based on scientific, economic or' even technical facts, and this has led to the appearance of problems which would not have arisen had the correct basis been used for the policy. A policy which meets the aspirations of a country that wants to develop is also fraught with problems that are the outcome of the underdeveloped nature of the country's economy. The utilization of forests, locally and for export markets, could be achieved with greater satisfaction if the problems that stand in the way of industriali-zation could be solved. Research into forestry and forest products should be concerned more with the economics of forestry and forest industries. This ensures a balanced approach to the problems of forestry and forest industry development. University engineering courses in Ghana should be oriented more towards indigenous materials, such as wood. Ghana has no significant cement and steel industries, and wood should be playing a major role in the construction industry. 196 Maximum Sustained Yield as a policy objective should be rejected. In place of that the policy should maximize the present worth of the net benefits from forest lands, subject to the constraints of the national econornic development plans and policies of Ghana. Finally, the paucity of useful data on forestry and forest industries has to be mentioned. Data have to be collected and organ-ized in such a way that they can be made use of. For effective planning it is suggested that both the Forestry Department and the Forest Products Research Institute should give more attention to the collection of bionomic, biometric and economic data. 197 BIBLIOGRAPHY Asare, E . B . , 1965. Some Economic Aspects of Forestry in Ghana. Paper prepared as part of Forest Officers' course held in 1964/65 at the Commonwealth Forestry Institute, Oxford. 55 pp. , 1968. 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