Open Collections

UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

A study of British Columbia's tree farm licence tenure and a discussion of its applicability in Kenya Spears, John Stephen 1962

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1962_A6 S6 S8.pdf [ 8.69MB ]
Metadata
JSON: 831-1.0075329.json
JSON-LD: 831-1.0075329-ld.json
RDF/XML (Pretty): 831-1.0075329-rdf.xml
RDF/JSON: 831-1.0075329-rdf.json
Turtle: 831-1.0075329-turtle.txt
N-Triples: 831-1.0075329-rdf-ntriples.txt
Original Record: 831-1.0075329-source.json
Full Text
831-1.0075329-fulltext.txt
Citation
831-1.0075329.ris

Full Text

A STUDY OF BRITISH COLUMBIA'S TREE FARM LICENCE TENURE AND A DISCUSSION OF ITS APPLICABILITY IN KENYA by JOHN STEPHEN SPEARS B.Sc.(For.) University of Wales, 1952 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER of FORESTRY in the Department of Forestry -We accepts this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA April 1962. 1 In presenting this thesis in p a r t i a l fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make i t freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It i s understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of pt*-g-*<*y  The University of British Columbia, Vancouver 8, Canada. Date 4 ° ^ ABSTRACT * • In Kenya, aa in British Columbia* a high percentage of the forest land is owned by the Crown. Since Government controls most of the raw material for the forest industry, i t s timber disposal policies will hare a considerable influence on the pattern of industrial develop-ment. ' The most suitable poliey will be that which allows the maximum degree of industrial efficiency to be achiered and at the some time, adequately protects the public interest in the forest resource. The main methods of timber disposal open to the Kenya Govern-ment are. (i) To dispose of a l l Crown timber by public auction. ( i i ) To grant leases of Crown timber to private enterprise concerns, Government retaining the responsibility for forest management. ( i i i ) To grant leases to private enterprise concerns and in addition, to delegate to these same concerns;, the res-ponsibility for forest management. Such a lease would be equivalent to British Columbia's Tree Farm Licence. (iv) To dispose of Crown timber by outright alienation, (v) To establish State manufacturing plants. It is not essential that the Government commit i t s e l f to any particular one of the above alternatives in practice, a combination of tiro or more may be desirable* This thesis is primarily concerned with the Tree Farm Licence method of timber disposal. The main objectives are: to study the progress of the Tree Farm Licence, to assess i t s advantages and dis-advantages and to discuss i t s applicability in Kenya. The main conclusions drawn are that the Tree Farm Licence has brought several important benefits to British Columbia and in particular, has encouraged the establishment of the large integrated forest industries yhich play an important part in supporting the Provincial economy. The introduction of a similar licence into Kenya would be desirable, but for political- reasons probably impracticable at present. ACKNOWLEDGEMENT This thesis was written between September 1961 and April 1962, when the writer was given leave of absence by the Kenya Forest Depart-ment, to spend ten months i n Canada, on a Commonwealth Scholarship* He is indebted to the Kenya Forest Department for this leave) also too the Canadian. Universities Foundation; for their financial assistance and for the interest they have shown in the project* He would like to express his appreciation to those staff members of the University of British Columbia* offic i a l s of the British Columbia Forest Service and representatives of Industrial and other organisations! who. assisted him to collect the information on which this thesis i s based* His particular thanks are due to Professor J . H. G. Smith, of the Faculty of Forestry, of the University of British Columbia, under whose super-vision the thesis was written and to Mr. A* Schutz of the British' Columbia Forest Service* \ TABLE OF CONTENTS Page Title page (i) Table of contents ( i i ) List of tables ( i i i ) Abstract (i*) Acknowledgement; (r) British Colombia1s Tree Farm Licence 1 The large integrated firm versus the smaller independent: operator . . 8 Principles governing the award of Tree Farm Licences . . . 12 Progress of the Tree Farm Licence , 18 The application of the Tree Farm Licence in Kenya * * . . . . . . . .03 Background information! . . . . . . . 95 The Sawmilling industry 109 Forest Management- • • • 123 Future timber disposal policies 130 Practical applications I44 Conclusion 156 Literature cited , .159 Bibliography •- I62: Appendix I Sample Tree Farm Licence contract 167 Appendix II Sample cutting permit, Appendix III Sample Timber Sale contract Appendix IV List of Tree Farm Licences issued up to 31st December 1961 1 r Appendix V Details of Tree Farm Licences awarded up to 31st December 1961. 1 LIST OF TABLES Page Table 1 Forest Land tenure position in British Columbia in 1044. 2' Table 2 Progress to 1960 of the sustained yield, program. 7 Table 3 Comparative statement of timber sold im tons of 50 cubic feet 1951-1960. 1(>3 1 BRITISH COLUMBIA'S TREE FARM LICENCE Introduction British Columbia's productive forest area covers approximately 118 million acres and approximately 54 per cent of the Provincial land area* Forest industry; provides a major proportion of the Provincial income} in 1960, the total value of forest production ($T38,360,000), represented approximately 40 per cent of the total net value of Provincial production. Approximately 93 per cent, of a l l the accessible mature forest land is owned by the Crown and forest poliey favours the retention of forest land under Crown ownership. The history of forest tenures in British Columbia is compli-cated, and to give a complete description of a l l the tenures used in the past would be beyond the scope of this thesis. A brief outline of each tenure is given in the British Columbia Forestry Handbook (University of British Columbia, Forest Club 1959). The significant feature of the various tenures awarded prior to 1944, was that they failed to make ade-quate provision for restocking of logged over lands. The system of temporary tenures* whereby timber lands reverted to the Crown when logged, encouraged operators to cut their mature timber and move on to other areas. 2 The approximate tenure position in 1944 i s shown in Table 1. TABLE 1. FOREST LAND TENURE POSITION IN BRITISH COLUMBIA IN 1944 (Sources Sloan 1957 vol. 1 page 37) Tenures Number of Contracts Area (Acres) Tenure Percentage Percentage of Total Productive Area Crown grants 1 5,175,500 57.1 6.90 Timber sales 3,721 978,000 10.8 1.31 Timber berths 205 424,671 4.7 0.67 Timber 1i cences 2,850 1,795,817 19.8 2.39 Pulp licences 252 155,778 1.7 0.21 Timber leases 152 197,939 2.2 0.26 Pulp leases 33 335,611 3.7 0.44 Totals 7,213 9,063,316 100.0 12.08 1Including Indian r< eserves* E. and N. land, small wood--lots. Of the tenures listed i n Table 1, Crown granted lands were out-right alienations; the remainder were temporary tenures of various lengths. The British Columbia Forest Serviee, like many others, has always been severely handicapped by a shortage of funds and staff and intensity of forest management, has often fallen short of what Foresters would normally consider as desirable. Early exploitation was virtually unregulated and failure of natural regeneration of the desirable com-mercial species, frequently resulted in invasion of logged over forest lands by commercially useless scrub. Methods of logging were wasteful 3. and, i t i s alleged, caused soil erosion and general site deterioration. The primary objectives of most forest operators were, to liquidate their forest holdings and to make as much profit as possible in the process} i n short, to "cut and get out". The appointment of the Sloan Commission In 1944, public concern over the situation described above, led the Provincial Government to appoint the Honourable Gordon MacGregor Sloan, Chief Justice of British Columbia, as sole commissioner of a Royal Commission which was to examine the position and make recommendations for future improvements. The Royal Commission's report; (Sloan 1945), made numerous recommendations, including the introduction of a form of tenure which would eneourage private companies and individuals, to manage their forest lands on a sustained/yield basis. A "perpetual forest management licence", was suggested as a suitable tenure for this purpose and, in 1947, the Forest Act was amended to allow for i t s introduction. *-In 1958, legislation amended the name to Tree Farm Licence and made the licence a 21-year lease. The term Tree Farm Licence is used throughout this thesis. The progress of the licence was discussed in a second Royal Commission Report* (Sloan 1957). Objectives of the Tree Farm Licence The main objective-' of the Tree Farm Licence, is to encourage 4 the practice of sustained yield forestry by companies and private indi-viduals) on both freehold land and land held under temporary tenures from the Crown. Sustained yield is desirable, in order to ensure that, forests f i l l provide a continuous and increasingly valuable asset, with long term benefits to the economy of the Province. Assured continuity of raw materials to industry, helps to ensure the construction, maintenance and uninterrupted operation, of expensive, integrated conversion plants and should result in a higher utilisation return and more effective competition in world markets. Stability in forest industry is desirable, in order to ensure maximum continuity in employment and the establishment of stable and prosperous communities. In addition, the system has partly transferred from the Forest Service to Industry, the responsibility for forest management of certain areas of Crown land, overriding control however, remaining with the Crown. Summary of conditions A f u l l description of the Tree Farm Licence contract is given in Appendix I. A summary of the main conditions is given below, as a background to the discussion which follows. ' Tree Farm Licences are awarded generally to maintain the manu-facturing plant owned and operated by a company in a specified locality, or, to encourage investment in a new plant. Industrial plants must be capable of ut i l i s i n g the allowable cut of the licence. The plant is appurtenant to the lease, one cannot be sold separately from the other. Some licences have also been awarded to applicants with no industrial plant. 5. Field surveying of the licence boundaries is the responsibility of the licensee* Management must be carried out within the general terms specified in the British Columbia Forest Act- (Revised Statutes of British Columbia* Chapter 153*, 1990)» and in accordance with the detailed pres-criptions of a working plan* prepared by the licensee, and approved by the British Columbia Forest Service* In order to ensure satisfactory technical management, the licensee is required to employ at least one Registered Forester* The licensee must include a l l his own suitably located forest lands in the licence, as well as any such lands acquired after the date of signing the licence. A l l the productive forest land in the area must be kept under suitable growing stock. This entails a r t i f i c i a l regeneration of those areas on which, natural regeneration f a i l s to appear within a specified period, whieh varies according to site 1quality. Within stated limits, the licensee must remove an approved annual cut from the area. Logging is controlled by the issue of cutting permits.. The cutting permit states the methods of logging to be used and the stumpage and royalty to be paid. A sample cutting permit i s included in Appendix II. Stumpage is calculated by the Forest Service, taking into consideration the management, protection and silvicultural costs incurred by the licensee. The actual method used, is discussed later. A rental, based on productive forest area, and a forest protection tax* based on annual eut, are also payable* The licensee is responsible for the costs of fighting a l l fires breaking out in the area, up to certain limits* In granting a licence, the Government reserves the right to withdraw land for various purposes* 6 such as railway and transmission lines* parks, etc. Mining, trapping, bunting and fishing interests are also protected. In the event of failure to comply with licence clauses* such as those relating to regeneration of cut over areas, the Government reserves the right to carry out the necessary operation at the licensee's expense. In the ease of insect, and disease epidemics) the British Columbia Government assumes half the financial l i a b i l i t y for control measures that are undertaken. Subject to the licensee accepting these obligations, the licence is granted for a period of 21- years and is renewable, i f the obligations have been observed during the licence period. The contract is subject to periodic review and can be cancelled i f the conditions have not been met. Public Working Circles In addition to Tree Farm Licences, the 1946 Royal Commission Report recommended the formation of Public Working Circles, areas of Crown forest land to be managed on a sustained yield basis by the Government Forest Service. The' main reasons for this decision were: to extend sustained yield management to areas of Crown forest land out-side Tree Farm Licences and, to establish areas of sustained yield forest from whieh smaller operators without Tree Farm Licences would be able to draw their log supplies. Timber from Public Working Circles i s sold by public auction under a Timber Sale contract, a sample of which is included in Appendix III. In recent years, established 7 operators have been given preference under a "licensee priority" system, to be discussed later. Tree Farms and Farm Wood-lot Licences These are two other forms of tenure which encourage owners of Crown granted lands to practise sustained yield forest management; In the case of Tree Farms, taxation concessions are made and for Farm Wood Lot Licences, the incentive is an allocation of adjacent Crown timber not exceeding 640 acres. Progress of the sustained yield program Table 2, gives an indication of the progress made in plaeing Crown forest lands under sustained yield management since 1944. TABLE 2. PROGRESS TO I960 OF THE SUSTAINED YIELD PROGRAM (Soureet B.C. Forest Service Annual Report for 1960 p.25). „ . .. , No. of Productive Allowable annual Type of unit or tenure / \ A /.. „ « \ J r units area (acres) cut (M.C.F.) Public Working Circles 72 40,257,302 464,620 Tree Farm Licences* operating and awarded 39 7,099,111 296,695 Tree Farms (excluding those > in tree farm lioences) , 24 506,922 22,095 Farm Wood-lots 49 11,062 311 Totals 184 47,874,997 783,721 -- 1 " f Appendices IV and V, give details of the Tree Farm Licences awarded up to December 31st, 1961. THE LARGE INTEGRATED FIRM, VERSUS THE SMALLER INDEPENDENT OPERATOR In British Colombia, there are two distinct industrial groups* the large integrated forest industries and the smaller independent or semi-independent loggers or sawmillers* In order to provide a back-ground to the discussion of Tree Farm Licences which follows, i t is intended to examine briefly, the relative positions of these two groups* At the end of 1960, the six largest integrated companies im British Columbia, controlled approximately 30 per cent of the total Provincial annual allowable cut, from those managed lands indicated in Table 2. The large integrated firms have several advantages over smaller operators* These aret (i) They usually have long term security over their-timber supplies, and therefore do not have to compete for these on the open market* ( i i ) Economies of scale help them to achieve lower production costs* ( i i i ) Integration enables them to make the most effective use of, waste residues. 9 (iv) They have greater opportunity to diversify their activities and are usually more stable than smaller firms. (v) They have several important marketing advantages. They are able to employ their own sales and marketing organisations and can more readily gain access to quality markets. Because of this they make fuller use of raw material. (vi) They have greater incentive for research and development. Because of these advantages, there has been a noticeable trend in North America towards concentration of forest land ownerships. Both the southern United States i n the 1930's, and the West Coast in the 1940*8, entered eras of extensive forest acquisition by large private firms. Disregarding the influence of tenures, the inference i s that, large industrial units eventually assert their economic superiority. The same trend has also been noticed i n certain branches of agriculture. Gibson (1956), compared the amalgamations which have taken place in British Columbia's forest industry, with similar concentrations of ownership i n the Saskatchewan farming industry between 1939 and 1951, during which period, approximately 40,000 small farms were concentrated into 8,500 large units. Because of the size of their investment and long term interest, the larger integrated companies have an important stake in forest manage-ment. They secure the greatest financial return from the forest resource 10 in terms of conversion value per unit of raw material and are socially desirable, in that they help to ensure community stability* The small independent operator i s , nevertheless* an important part of the forest industry* The existence of the truly independent market logger in British Columbia, has been due to an excess of timber over mill capacity* He has remained in business, partly because of d i f f i c u l t terrain. Good quality timber often occurs in small pockets and under such conditions) owner operated concerns can operate efficiently. An open log market i s dependent on a large forest area being within easy competitive reach of a concentration of industries. This situation has prevailed on the Coast because of the excellent network of waterways and low costs of log transportation. This explains why there has been no open log market i n the,Interior of the Province. It is generally agreed that, the number of truly independent loggers is declining. This i s because timber supplies are becoming limited and this has prompted savmillers and other consumers to acquire their timber before i t reaches the market in the form of logs. Much of the land formerly operated by market loggers i s now tied up in the form of leasehold tenures, which supply specific manufacturing plants. At the same time, logging methods have changed and efficient operation requires higher cap i t a l investment in equipment. Many of the small operators are unable to finance their own operations and have become tied, financially, to larger concerns from whom they borrow funds. It is said that the future of the independent market logger lies in con-tracting for the larger mills. 11 Industrially} the smaller operators are important as a group of sturdy independent business men, competing in the timber industry, or supplying an essential service to larger industrial units. In some situations, they can operate more efficiently than the larger companies and partly because of this, the present trend is for the latter to con-tract out a proportion of their logging operations rather than do the job themselves. By virtue of their number, and because public sympathy favours the small individual or company, rather than,the large corporation, they command considerable political influence. Their'interests are often short term and because of this they have sometimes earned the reputation of being poor forest managers. The comments made above, do not necessarily apply to a l l operators. There are many medium sized firms which manage their manufacturing plants and forests as v e i l , i f not better than, large integrated companies. The present trend is towards the amalgamation of smaller firms into larger units and forest management should benefit from this. PRINCIPLES GOVERNING THE AWARD OF TREE FARM LICENCES The basic principles governing the award of licences at present are* (i) The applicant must be able to provide from his own lands at least 25 per cent of the timber required to make up the licence area* Generally speaking, priority is given- to the major owner of private timber within an area* ( i i ) Existing industry is given preference where there is more than one applicant* First priority is given to the pulp and paper industries, because of their relative stability, size of the investment and the social and economic benefits they bring to the Province* ( i i i ) If several established operators cannot agree as to who should get the licence, the general policy is to turn the area into a Public Working Circle* When the earlier applications were under consideration, appli-cants who had mature volumes of their own, but not enough for a sustained yield operation, and who were willing to allocate enough private timber to satisfy the allowable eut of the licence on a sustained yield basis, on the condition that, they be allocated areas logged over or immature r'r:/. -a land, were given preference'over those who required mature ' ;:.r. 13. Under these circumstances, the Crown benefited from a revenue return from the mature timber, but the licensee took over the responsibility for management of the second crop. Tree Farm Licence Number 2 was an example of this arrangement. A number of earlier licences were also awarded on the " f i r s t come, f i r s t served" principle. The mechanics of the actual application are defined in the Forest Act (Revised Statutes of British Columbia, Chapter 153, I960). The main requirements ares (i) The application must be made in writing i n a form prescribed by the Minister and must contain a description of the lands desired. ( i i ) If the lands appear available for a Tree Farm Licence, the Minister instructs the applicant to publish in one issue of the British Columbia Gazette, and in specified newspapers, a notice of the application, together with a description of the lands applied for. ( i i i ) Not 1 ess than sixty days after publication of the notice of application, the Minister may place the lands applied for under reserve, to enable the applicant to prepare a working plan. (iv) No Tree Farm Licenee is issued, until the working plan has been approved. 14. The influence of existing privately owned forest land The amount of privately owned timber an applicant can con-tribute i s one of the f i r s t c r i t e r i a of his suitability for a licence. It is not essential that he own any timber, i f he intends to apply for a licence in an undeveloped area, where there are no established operators. Host of the privately owned timber in British Columbia lies in the Coast region, where, as can be seen from Appendix V, the proportion of private to Crown timber i s f a i r l y substantial in most of the licences issued. In the Interior, there is comparatively l i t t l e private timber and many of the licences issued there have no private timber at a l l . In the Coast region, existing ownerships often controlled access to remaining areas of Crown timber and the timber would probably have gone to them anyway. Much of this remaining timber was marginal, and would not have justified expenditure on costly alternative access roads. Definition of existing industry Except for pulp and paper industries no preference has been given to industries of a particular size; the term "established industry," included independent market loggers with no conversion plants. Since smaller operators do not bring the same economic and social benefits to the Province, as the larger integrated firms, several witnesses who gave evidence to the 1956 Royal Commission suggested that, licences should be awarded on the basis of size of investments 15 On principle, the conversion plant and not the logger should get the management ("Tree Farm") licence. And again on principle, the pulp mill and not the saw-mill should be awarded the licence, as i t gets the highest possible value for the end product per thousand feet of logs consumed. (Argument for Commission Counsel Vol. II, 82-2 ( i ) ) . P o l i t i c a l l y , i t would probably have been impossible to have excluded independent loggers from acquiring licences. The Chief Forester stated in 1956, that the Forest Service was disappointed at the number of applications for smaller licences* Of the 39 licences in existence at the end of_1961, only four have no con-version plant. The present Tree Farm Licences range from 4353 acres, with an allowable annual cut of 208,000 cubic feet, to 2,537,673 acres, with an annual allowable cut of 30,000*000 cubic feet. Where an application has included a conversion plant, the amount of timber granted, has depended on the potential capacity of the licensee's existing plant calculated on the basis of the last few years* performance. No set rule appears to have been observed but, in the "Argument for Commission Counsel," on which the second Royal Commission report was based, (Sections 81-2 and 84-1), i t was frequently suggested that, a figure of approximately 80 per cent of the licensee's present requirements was considered a reasonable allocation, since this encouraged the practice of good forestry. In three of the early con-tracts* the annual yield was restricted to a specified maximum volume* being the estimated consumption of a certain plant, rather than to the 16 sustained yield capacity of the land as approved by working plans* Since a basic requirement of Tree Farm Licences is that, the whole area be managed for an annual production, "adjusted to the sustained yield capacity'1 of the licence area* this earlier restriction has not been applied to any of the later licences issued* Once demarcated and approved, the Tree Farm Licence boundaries are fixed and the licensee is thereby assured that his conversion plant will secure any increase in timber volume, which may result from more intensive forest management* Appurtenance Subsection (24), of section 36, of the Forest Act provides t h a t t Where a Tree Farm Licence i s given for the maintenance of an existing or proposed mill or manufacturing plant, the Minister may make the licence appurtenant to the mill or manufacturing plant, and any such licence shall not be sold or transferred separately from the mill or H, plant during the continuance of the licence and any other tree farm farm licence shall not be transferable except on written consent of the Minister* i • , This clause has both economic and social implications* It is a measure of guarantee that a manufacturing plant will remain in an area even i f the ownership changes hands* Criticism of past awards The Provincial Government was criticized for i t s handlings of earlier licence applications* It was contended that, prior to 1956, there were no clearly defined regulations is 17. It was suggested that, certain licences vere awarded on the basis of inadequate inventory data thereby placing some companies in a more advantageous position than others. There was no clearly defined policy over the procedure for dealing with protests and in some cases they were discussed at public hearings, while in others they were not. The 1956 Royal Commission Report helped to clarify the situation and, as noted earlier in this section, the rules and principles governingt an award are now more clearly defined. If a large number of protests are received, public hearings may be held. There i s s t i l l a division of opinion in British Columbia, between those who maintain that, the present system of allocating licences, where each case is considered on i t s merits and the final choice rests with the Minister, is less satisfactory than a system of public auc-tioning, as has sometimes been used in Eastern Canada. As the principles governing the award are defined at present, there should, in theory, never be a case where the Government could be accused of favouritism. It need never have to make an actual choice between one applicant and another, i f i t adheres to i t s policy of creating Public Working Circles wherever controversy exists. Those who advocate a system based on auctioning of licences,; maintain that this i s the only fair method of allocation and, that i t protects the Government from possible criticism. Opponents of this system argue that i t could lead to speculation, and does not necessarily ensure that the best firm to do the job, actually gets the licence* PROGRESS OF THE TREE FIRM LICENCE Introduction! The Objective of the following sections is to discuss various questions which might be asked i f use of the Tree Farm Licence were under consideration i n other countries* The questions are: (1) Has the major objective of the licence* the encouragement of sustained yield forest management been achieved? (2) Have logged over lands been satisfactorily restocked? (3) Have adequate standards of forest protection been, maintained? (4) Have working plans been prepared as required and are these of a satisfactory standard? (5) Have licensees stayed vithim the allowable annual cut OE has there s t i l l been a tendency for them to "cut and get out"? (6) Have licensees carried out any research? (7) Have indirect forest benefits such as catchment protection ' been adversely affected? (8) Has private enterprise forest management of Tree Farm Licence lands been any better than that practised by the Government 19. on Public Working Circles? If so, what are the reasons for this? (9) Has forest development had any greater financial security than in the past? (10) Has the licence encouraged investment in manufacturing plants? Would such investment have taken place without such a lieence? (11) Has the l i cence helped to create, more stable communities? v(l2) Has vertical integration of forest and industrial manage-ment been of any benefit, i f so, how? (13) Have there been any major points of controversy between licensees and the Government. If so, what have they been? ((14) Has there been any opposition to the licence? If so, for what reasons? (15) How have Tree Farm Licences been administered and has the Forest Service found i t necessary to exert pressure on licensees in order to ensure that they comply with the conditions of the licence contract? {(16} Was the Tree Farm Licence introduced at the right time or should i t have been introduced earlier or later than 1947? 20. (17) What would have happened i f no tree farm licence had been introduced? (18) What are future trends likely to be? Will such licences be necessary or even desirable i n the future? i' /(19) Can the licence be recommended for use in other countries? A detailed examination of every Tree Farm Licence area in British Columbia would have taken longer than the period available for this study. The information collected is the result oft [ (i) A study of the annual reports on forest operations which Tree Farm Licensees are obliged to submit to the Forest Service. Permission was obtained to read the reports covering 21 out of a total of 39 licence areas. Of the remaining 18 licences, annual reports were not available for the three licences awarded in 1960. ( i i ) A study of the 1945 and 1957 Royal Commission reports on the Forest Resources of British Columbia, and of the evidence on which these reports were based. ( i i i ) A study of the submissions made by various companies and 1 other,i interested groups to the 1956 Royal Commission. (iv) Correspondence with the Chief Forester of the British Columbia Forest Service and several Tree Farm Licence . J-i •- i . . 1 , i , ,. companies. 21 (•) Discussions with Forest Service officials* and company representatives in the Vancouver, Kamloops and Nelson. i Forest Districts. Discussions were also held vith representatives of organisations which have opposed the Tree Farm Licence* (vi) Field trips to several Tree Farm Licence areas made in conjunction with both Forest Service and Company officials* In attempting to assess the progress of the Tree Farm Licence i t was necessary to take into consideration the fact that acceptable standards of forest management in British Columbia do not necessarily correspond with those of other countries* Economic circumstances do not permit the same intensity of utilisation and forest management as is practised for instance, in many European countries* It was also necessary to remember that, under the conditions of the British Columbia Forest Act, a l l operators en Crown forest land are required to observe certain standards of forest protection and to carry out specified operations such as slash burning. An attempt was made to assess whether or not, Tree Farm Licensees carry out such opera-tions any more thoroughly'than other operators and, to examine in particu-lar, those operations which Tree Farm Licensees are obliged to carry out in addition to the normal requirements of the Forest Act. (l) Encouragement of sustained yield forest management The area of forest land placed under Tree Farm Licence tenure 22. up to 31st December 1960 was 7,099,111 acres* This represented approximately 15 per cent of the total area of forest land under sus-tained yield management and contributed approximately 37 per cent of the total annual allowable cut* It can therefore be stated with: some certainty that the Tree Farm Licence has encouraged private companies and individuals ta> place their forest lands under sustained yield management* Before entering into a discussion of individual aspects of forest management, i t can be noted that the British Columbia Forest Service believes that, in. general) standards of forest management on Tree Farm Licence lands have improved since the licence was introduced: We consider that the award of Tree Farm Licences has resulted in a definite improvement in forest practice* (Personal correspondence, November 1958, Chief Forester, British Columbia Forest Service*) (2) Restocking of denuded lands Restocking of denuded lands is one of the obligations of the Tree Farm Licence contract* It is an obligation which i s not required of operators in Public Working Circles where the responsibility for restocking rests with the Reforestation Division of the British Columbia Forest Service. Under the terms of clauses 19 and 20 of the Tree Farm Licence 23. contracts (January 1961 edition), licensees are required to keep a l l potentially productive forest land under growing stock. Any areas above a certain site quality which were i n a denuded condition prior to the date of signing the licence* have to be reforested at a rate of not less than a thousand acres per annum* or ten per cent of the total area of such lands, whichever is the lesser* Any areas denuded after the date of signing the agreement (usually as a result of logging), must be restocked within 7 years of denudation, except for certain areas of defined lower site quality which must be restocked within 10 years. Each company, in i t s annual report on forest development in the Tree Farm Licence is required to submit a return indicating the areas restocked. These are spot checked by members of the British Columbia Forest Service to ensure that stocking is of the required standard. The "stocked quadrat" method is used. By this method, groups of four square plots (each 6.6 feet square or an equal area in a circle) are examined at l£ chain intervals en parallel lines run 10 chains apart. Each of these plots contain one-thousandth of an acre and is known as a milacre quadrat. Each quadrat is con-sidered to be stocked, i f i t contains one or more established seed-lings of a commercial species, provided no more than four consecutive groups are completely blank. "Established" means in condition to have a good chance of survival. If 31 per cent or more of the quad-rats are stocked, the condition of the area is defined as adequate stocking. If 30 per cent or less, the area i s not satisfactorily reforested. 24. Examination of Tree Farm Licence annual reports covering 21 licence areas* and discussion with Forest Service offic i a l s dis-closed that restocking requirements have been satisfied i n a l l but two cases* In one of these* commitments in a recently submitted working plan have been accepted as evidence of the company's intent to restock* In the other, a working plan i s due in 1962, and i t s acceptance will be dependent on inclusion of an adequate restocking programi. . 3 In British Columbia profuse natural regeneration normally appears after denudation* Smith, Ker and Csizmazia,' (1961) sug-gested that, in the Vancouver Forest District, 75 per cent of^ the land annually logged will restock naturally with commercial tree species* Nevertheless* the remaining 25 per cent, much of which will be sites of above average quality, will revert to brush or less desirable tree or shrub species unless reforested a r t i f i c i a l l y * Even on land that is restocked naturally, important values are lost each year because of incomplete or' delayed regeneration, increased predominance of species of lower commercial value and the difficulty and added expense of managing irregular natural stands* Because of this, a r t i f i c i a l restocking i s s t i l l necessary in many areas. The British Columbia Forest Service and Tree Farm Licence company annual reports give details of acreages of Tree Farm Licence lands a r t i f i c i a l l y restocked* Of a total of 18,185 aeres of pianta-25 tions established in the Province by a l l agencies in I960* for example* Industry planted more than 14*000 acres Tree Farm Licence lands* Forest Service of f i c i a l s in the Vancouver Forest District* (which contains 18 of the Tree Farm Licences awarded to date)* confirmed that restocking on Tree Farm Licence lands i s * in general* more assured than in Public Working Circles* 0(3) Forest protection Forest protection i n British Columbia is mainly concerned with fires* insects and disease* Of these* fires are the most obvious cause of timber loss* In the 10 year period 1951-1960* i t was estimated that 22*077 fires destroyed or damaged 598*899 thousand cubic feet of standing timber and that total damage to forests and other forms of property exceeded $20*000*000. (British Columbia Forest Service Annual Report for 1960* p. 117) Al l operators in British Columbia are required to observe standards of forest protection defined in Part XI of the British Columbia Forest Act* The most important obligations ares (i) To maintain adequate f i r e fighting equipment. ( i i ) To dispose of slash and dead standing trees (snags)* < Teft behind after logging operations. Disposal i s usually by burning* but the Minister may direct an alternative method i f he so desires. 26. ( i i i ) To observe forest closure periods during times of exceptional f i r e hazard. (iv) To be responsible for a fi r e fighting force equivalent to the company crews working in the area, and to fight any fi r e whieh may occur on the licence area. (v) To pay a Forest Protection Tax at the rate of 9 cents per thousand feet board measure or 5 cents per hundred cubic feet, of the approved annual productive capacity of the licenced lands. (The money thus collected by Government, i s credited to a fund whieh is used to finance part of the annual cost of fighting forest fires in the Province)• To attempt a complete survey of the methods of f i r e pro-tection employed by Tree Farm Licence companies, would have been beyond the scope of this thesis. The Forest Service acknowledges that Industry is in general observing the requirements of the Forest Act and this was also suggested in the 1957 Royal Commission Report. Industry as a whole i s manifesting a genuine desire to co-operate fully with the Forest Service in matters of fi r e protection. A number of the larger companies (which have the most to lose and the money to spend) have assumed obligations in that behalf in instances in excess of requirements imposed by the Forest Service, both in relation to, personnel and equipment. (Sloan 1957) , 27 Forest Service offi c i a l s confirmed that standards of f i r e protection on Tree Farm Licence lands have usually been more inten-sive than those practised by operators in Public Working Circles* The present trend towards more permanent operations on Public Working Circles may lead to improved fi r e protection* The protection plans submitted by licensees as part of the working plan requirement are carefully scrutinised by the Forest Service and suggestions made to ensure that they meet the minimum requirements for f i r e control planning* Protection from insect pests i s mentioned in section 28 of the Tree Farm Licence contract* This requires that, in the event of what is considered to be a controllable outbreak of inseet attack* the Government and licensee shall take such control measures as shall be mutually agreed upon* providing that, the cost of such control measures to the licensee at his own expense, shall not exceed one-half of the cost of such control measures incurred during that calendar year or, the total value of that year's allowable cut which-ever may prove to be the lesser* The provisions of this section have been put into practice on several occasions* On Tree Farm Licence number 6, for example, an outbreak of Black headed Budworm was successfully controlled by aerial spraying of insecticide and the costs were shared between the company and the Forest Service. 28. Research associated with forest protection is discussed in a later section. [(4)) Preparation of working plans An applicant for a Tree Farm Licence is required to submit a working plan for the proposed area. The plan must be submitted to the Chief Forester and a licence i s not awarded until the plan has been approved. The i n i t i a l plan is usually for a short period (3-5 years)* which allows the company time to gather data from which a revised and more complete plan can be prepared. Subsequent revisions occur at five or ten year intervals, depending on the amount of informa-tion available. During the course of the present study, several working plans were examined in detail. Some of these were of an exceptionally high standard whereas otherswere not as good. They showed no greater vari-ation than would probably be found in a random selection of working plans prepared by several different members of the same State Forest Service. A l l the plans examined were prepared by British Columbia Registered Foresters (defined later). Since no licence is awarded until the applicant's working plan has been approved, i t can be assumed that plans relating to licences already awarded have met with Forest Service requirements. It would be impracticable to draw a comparison between the 29 working plans prepared for Tree Farm Licences and those for Public Working Circles managed by the Forest Service. Shortage of staff i -and funds has had a limiting effect on Forest Service planning and in most cases? working plans for Public Working Circles do not exist. (5) Annual allowable cut • 1 _, .-' i _ I ' i The allowable cut for the licence area is determined before the licence is granted on the basis of an inventory carried out by the applicant at his expense. He is also responsible for calculating the proposed allowable cut for the area. This i s included in the working plan and has to be approved by the Forest Service. The formula for calculating the allowable cut may vary from one licence to another, depending on the condition of the growing stock. The most commonly used formula is Hanzlik's, which estimates the sustained yield capacity by dividing the volume of mature timber by the average rotation age selected and adding the mean annual increment at rotation age from established immature stands. Several area/Volume cheeks are required to arrive at a satisfactory allowable cut. This method is particularly suitable for even aged forests with a preponderance of over mature timber, which is the general situation in British Columbia. Revisions of the allowable cut at regular, (usually ten year) intervals are done as more inventory data becomes available. Areas whieh i t is intended to work over the next few years are progressively eruised to operational standard prior to cutting. 30. Under clause 37, of the licence, the actual cut in any one year must not be less than 50 per cent, or more than 150 per cent, of the approved allowable cut as established in the working plan* Over a five year period, the volume cut must»«Evaryo more or less than ten per eent from it he., allowable, cut. The permissible cut is indicated in a cutting permit for which the company applies* giving details of the proposed area to be cut and methods of cutting to be used. It includes a definition of what the Forest Service is prepared to accept as satisfactory standards of utilisation. It is a comparatively simple matter to ascertain whether companies have observed the above conditions, because the company's actual cut is recorded in its annual Tree Farm Licence report. Of the 21 companies examined, two cases of undercutting of the five year permissible cut and none of overcutting were recorded. Under clause 38(d), of the contract, a company may be refunded any fine i t has incurred due to under or overcutting provided that, its cut over a ten year period is vithin ten per cent of the original permissible cut for the- period.• Of the two companies which have incurred fines so far, one has been refunded i t s fine under the above provisions and i t i s anticipated that the other will also recover i t s money in due eourse. Discussion with Forest Service and Company officials dis-closed certain criticisms of the principles governing the calculation 31. of annual cut. It is maintained by company officials that the Forest Service could afford to increase the present allowable cut. The sub* jeet is discussed later when dealing with points of controversy* i(6]D Research The Tree Farm Lieenee contract contains no clauses which would compel a licensee to undertake research but'provision for research i s included in i t s working plan. Some of the companies have displayed a keen interest in research work, and others very l i t t l e . i-The amount of research work carried out has depended largely en the size of the company. In general, i t was suggested that the larger companies have been able to afford the most research and this was confirmed by examination of the Tree Farm Licence reports. A f u l l analysis of a l l the research operations was not possible* but the following l i s t of some of the projects undertaken indicates their scopes Growth studies involving the demarcation and maintenance of growth and yield plots Methods of site determination Thinning studies Methods of calculating volume tables Experimental planting (mainly species trials) Research in reforestation methods including aerial seeding and aerial spraying of weed species Pruning experiments 32. Seed improvement studies including the selection of seed trees and the establishment of seed orchards Studies connected with forest protection including fire weather research, experiments with fi r e fighting equipment, insect surveys and tests of insecticides Chemical and mechanical brush control Slash burning experiments Fertiliser experiments Drainage experiments Breakage and utilisation studies particularly those con-nected with the reduction of waste. It is probable that a l l aspects of the forest industry have benefited from the increased amount of research carried out since the Tree Farm Licence was introduced. • v {i7j) Indirect forest benefits Besides acting as a source of timber for industrial and other consumers, the forests of British Columbia like those of other countries are of considerable catchment and soil protection, importance. The Forest Service is fully aware of the need to ensure ade-quate protection of Crown forest lands and, in its administration of Tree Farm Licences takes indirect forest benefits into consideration. If i t i s accepted that the Forest Service*s assessment of what is re-33. quired to protect indirect forest benefits is sound, i t remains to ascertain whether or not in fact i t s policies in this respect are being observed. In practice* the Forest Service's attitude to indirect forest, benefits appears to be that, i f an adequate growing stock is maintained on a licence area* standards of exploitation are controlled through a cutting permit and an adequate system of forest protection is i n force* indirect forest benefits will not suffer. The general impression gained during this study was that* the requirements of the licence contracts including cutting permit clauses are in fact being observed* and that indirect forest benefits are not therefore being adversely affeeted. <'•.-«. (8) Government versus private company management It is generally acknowledged by the Forest Serivee* that standards of forest management on Public Working Circles managed by the Forest Service are not as good as those achieved by Tree Farm Licence companies: The Forest Service does not consider that forest management is* or could be* as good in public forests as in private management (tree farm) licences. (Correspondence* Chief Forester* British Columbia Forest Service* 1958) One of the obvious reasons for this* i s the Forest Service's shortage of funds and staff. Nevertheless* i t was the opinion of the Chief Forester at the time of the second Royal Commission hearings 34 that, even i f the Forest Service were to be granted unlimited funds, its management of Crown forest lands would s t i l l not be as good as that practised by Tree Farm Licensees* The main reasons advanced for this were. (i) The relative degree of control which the Forest Serviee can maintain over Tree Farm Licence and Public Working Circle operators* It is easier for the Forest Serviee to control a single operator on a Tree Farm Licence than a group of operators in a Public Working Circle* ( i i ) The Tree Farm Licensee has more to lose by neg-lecting forest management than smaller Public Working Circle operators and i s therefore often more co-operative* ( i i i ) Private companies would tend to give greater emphasis to the eeonomie and business aspects 7of forest management than the Forest Service and * • *• management would therefore be more efficient. The f i r s t two of these contentions appear reasonable. Many of the small operators i n Public Working Circles are s t i l l oper-ating on a liquidation basis and cannot be expected to be as concerned over what happens to the forest after they have finished cutting, as 35 . the owner of a large integrated industry who will depend on the same area for his future raw material* Nevertheless) the present trend towards more permanent operation on Public Working Circles should result in improved forest management* The third contention would be d i f f i c u l t to substantiate* During discussions with Forest Service and Company Foresters, reference was often made to the great variation in Forest Serviee and Company costs for apparently similar operations such as planting and road making, but a true comparison of these costs is d i f f i c u l t , because the work carried out has not been on the same area and because there is sometimes a difference of opinion over what constitutes a satisfactory job. In theory, there is no reason why a Government Forest Service should not do as good a job as a private company, but i t is unlikely that i t will compete where cost is an important consideration. The majority of Forest Services operate as trustees of the public interest and their activities cover a far wider field than the average private company. Indirect forest benefits such as soil and catchment area protection, are d i f f i c u l t to assess in terms of monetary value and because of this, Government Forest Services are often protected from: criticism of their operating costs. In practice, this has sometimes resulted in neglect of forest economics, there is a tendency for State Foresters to feel that, the importance of protection forestry outweighs that of trying to operate at a cheaper' cost. But this belief should 36. not release foresters from the duty of being efficient and i t i s reason-able to expect that, whatever operation is being undertaken, i t should be done i n as economical a manner as possible* Departure from this principle means waste of public funds* Commonly suggested explanations of State inefficiency are the prevalence of "red tape" restrictions, the security of the employee's position and lack of incentive* It is not possible to make a really accurate assessment of the effect of these factors on forest management* It is certainly true that the average Government service is far more tied up with restrictions than the average private company. The latter also' has a decided advantage when i t comes to the point of making rapid and often money saving decisions* During recent years, i t has become apparent that the interests of large private companies may coincide with the public interest and Governments have been more willing to delegate their forest management responsibilities* The importance of control or outright ownership by the state varies according to the role of the forest* It is obvious for instance, that a forest which owing to its special, situation and its protective importance is not able to provide regular revenue can be kept free from abuses and sufficiently protected only i f i t is owned by the state or is under the direct control of the state* : On the other hand, in essentially commercial forests this requirement is less exacting, es-pecially when the interest of the individual owner coincides with the general public interest and when this compatibility of interest can be achieved by means other than the acquisition or retention! of the forest by the State. (F.A.O. 1954) 37 There is no evidence that the public interest in British Columbia has suffered as a result of the introduction of the Tree Farm Licence; more likely i t has benefited by an increase in the efficiency of management on the forest lands under licence* (9); Financial security Forest development on Tree Farm Licence lands is financed by the companies themselves* but under an allowed forestry costs system* a proportion of their expenditure is refunded as a reduction! from stumpage in the following year* Prior to 1947* a l l forest 1 development on Crown forest lands vas carried out by the Forest Service* financed by an annual treasury allocation from general revenue* The di f f i c u l t i e s of operating under an annual treasury budget were dis-cussed in the 1956 Royal Commission Report (Sloan 1957). The problem is common to almost a l l State Forest Services long range planning is impossible without adequate financial security and Governments are seldom able to offer this* In British Columbia* Government has accepted the important principle of allowing forest development on Tree1 Farm Licenee lands to be financed directly from stumpage revenues and a more sustained rate of forest development should be possible* Huguet (1953)* mentioned the same argument when discussing a form of tenure similar to the Tree Farm Licence currently in use in Mexico: There would be advantages in establishing some similar system in countries where the o f f i c i a l Forest Service has not i t s e l f the 38. means of carrying oat intensive management* This would apply particularly to those coun-tries where, because of reluctance on the part of the government to grant funds or authorise recruitment* the forest services have a small budget or are understaffed. By the1 Unidad system, the woodworking in-dustries themselves must provide the techni-cal forest services which provided they are given sufficient freedom of aetion should be able to guarantee proper management of the forests. Freedom: from the,restrictions of treasury budgeting* will not automatically guarantee long term financial security for forestry* The money for forest development s t i l l has to be voted by the companies as part of their own annual budget, and in times of economic depression, money may not be available* Forest Service offi c i a l s with whom the i topic was discussed believed that, forestry development on Tree Farm Licence lands has been more intensive than the Forest Service would have been able to ensure on these same lands* i f they had continued to be operated under an annual Treasury budget. When discussing the attitude of individual companies to forestry investment* five main points were frequently mentioned} (i) The licence is a contract subject to frequent re-view* and companies are* in general, highly aware that failure to comply with its requirements could lead to i t s cancellation. ( i i ) Forestry as an investment has never been given much consideration. This is partly because of the tre-39 mentions surplus of eld growth timber in the Province* which cannot a l l be absorbed by current markets and because of the ease with which natural regeneration is obtained* It is generally agreed that(the amounts spent on forestry would be greater were there less old growth timber available. ( i i i ) The ability of companies to recover some of their expenditures by a reduction of stumpage, has an influence when a Board of Directors is being asked to finance forestry operations* (iv) The amount the Directors are prepared to vote i s often directly proportional to the ability of the Company Forester to "sell 1* forestry, when presenting his estimates* (v) The attitude of most companies towards forestry investments has improved very noticeably over the last decade* (lO) Capital investment in new industrial plants The Tree Farm Licence has been an important factor in attracting investment in new industrial plants* i . There is no question that tree farm licences have been the incentive for establishment of new in-dustry including three large pulp and paper mills and the expansion of output in other similar plants* (Correspondence, Chief Forester, British Columbia Forest Service, November 1958). 40. In 1956, i t was estimated that the total expenditure incurred in the establishment of nev pulp and paper plants since 1947, plus the esti-mated expenditure to which companies were actually then committed, exceeded $350,000,000 (Sloan 1957). Since a major objective of this paper i s to present a case for the long term tenure, i t would be pertinent to discuss whether or not, the investment in new pulp and paper plants in British Columbia would have been seeured without the introduction of the Tree Farm Licence. There are, in fact, numerous industrial plants in the Province, whieh rely en the open log market for their raw material supplies, but most of these are small, with low raw material requirements. There are no pulp and paper mills in this category. Between 1907, when the Government of British Columbia ter-minated alienations of land by long term timber licences, and 1947, r when the Tree Farm Licence was introduced, there was no way for a company without timber of i t s own, to acquire a sufficiently large reserve of timber from Crown lands to justify investment in a pulp . mill or a paper m i l l . During this period, the pulp and paper indus-tries of other Canadian provinces underwent a steady expansion, where-as those of British Columbia, remained frozen at the approximate level of 1907 potential production. When the Tree Farm Licence was in-troduced, rapid expansion of the industry took placet Following and in great measure consequent upon the 1947 legislation which freed the Crown; forests from being locked in by a 40 year "deep freeze" the pent up development of new pulp or paper plants in the Province and the overdue 41. expansion of existing f a c i l i t i e s when thus released have been phenomenal. , (Sloan 1957). It can therefore be stated with some certainty, that the Tree Farm Licence has had an important influence on capital investment. But i t i s important to note that, such investment would not have taken place, had the economic conditions of the period not favoured the rapid growth of the pulp and paper industry. It does not follow that long term tenures are the only satisfactory method of attracting industrial investment. In Quebec, for example, there exists the paradox of a large pulp and paper in-dustry, operating on Grown land held under annual leases. Invest-ment here has taken place because: (i) The areas of Crown forest land leased to companies are large enough to supply their raw material requirements. (In practice several have far more than they ean actually use at present). ( i i ) Once a eompany has a lease, i t is impossible for another firm to establish i t s e l f on the same land. ( i i i ) The annual lease i s automatically renewable. To date there has been no case of Government re-fusal to renew a lease and in practice, this would be extremely d i f f i c u l t , mainly because of the 42. vested interests companies hold in industrial plants and the social implications of putting a large number of people out of vork. The length of tenure necessary to attract investment, will vary according to local conditions and the size of the industry i t is hoped to establish. It is probable that there will always be a wide variation in opinion as to the most suitable length of tenure for an industry. In the summarised evidence of the 1956 Royal Commission (Sloan 1957), 18 pages of evidence were devoted to this one topic and the opinions of over 50 witnesses recorded. Their arguments were seldom identical and their suggestions ranged from annual leases as in Quebec, to outright alienation. More witnesses favoured long term leases than short. The main arguments advanced in favour of a long term tenure were* (i) It i s a good method of attracting capital investment. (Banks are prepared to accept the Tree Farm Licence as loan security.) ( i i ) It helps to ensure sustained industrial operation, and expansion and facilitates long term planning. ( i i i ) The profit motive i s the governing factor i n indus-try and the longer the lease, and less the restrictions, the greater the possibility of making a profit. Fee simple ownership would offer the greatest incentive of a l l . 43. (iv) Because i t is conducive to efficiency, a long term tenure helps to keep firms competitive in world markets. (v) The longer the lease, the greater the soeial security for the firm's employees* -.j Two basic principles agreed upon by several witnesses were that: (i) Where an industrial plant is made appurtenant to the lease* the latter should be at least long enough to allow amortisation of the plant's capital value* ( i i ) If management of a crop is part of the contract, a licence equivalent to a double rotation is desirable, in order to ensure reaping of the crop planted in the f i r s t rotation* In summary i t appears that, although investment can, and has taken place without long term tenures, i t is doubtful i f , in general* short term tenures would be as effective in securing large investments as would long* (11) Community stability The 1945 and 1957 Royal Commission reports* gave consider-able prominence to the importance of achieving community stability in 44 British Columbia and this was one of the stated objectives of the Tree Farm Licence* During the hearings of the second Royal Commission* witnesses confirmed that the licence has been an important factor in encouraging community stability in various parts of the Province, quoting Midway, Boundary, Slocan, Prince Rupert, Terrace, Duncan Bay and Crofton as specific examples* Typical comments on this subject were. In 1949, as soon as our employees found we were on a permanent basis they began to feel differently and began to acquire land and build houses* (Summary of evidence. 1956 Royal Commission Vol. IV 104 n.) and The benefits to the public of the Forest Management licence are the establishment of permanent industry* employees are-moving in and building houses which they never did before* (Summary of evidence. 1956 Royal Commission Vol. IV 104 m.) The relative degree of community stability which can be achieved on Public Working Circles and Tree Farm Licences was also compared. I agree that i f a l l the Prince George District were a public working circle* the total timber production and total payroll might be the same* But the licence brings about a social' aspect and possibility of building up communities not in-herent in the other system* (Summary of evidence. 1956 Royal Commission Vol. IV 104-4(i).) If i t is accepted that the present 21 year contracts will be automatically renewed except under very exceptional circumstances, i t 4 5 . could be stated with confidence that, the Tree Farm Licence will con-tinue to play an important part in encouraging community stability. (i2)i The advantages of vertical integration One of the important features of the Tree Farm Licence is that i t has permitted the vertical integration of forest and industrial plant management. The main advantages of vertical integration in the forest industry aret (i) It may encourage Industry to take a professional interest in forestry. By introducing the Tree Farm Licence* the British Columbia Government has secured the cooperation and interest, of company personnel and the forest industry has undoubtedly benefited from an importation of fresh ideas and men, into the business of forest management. ( i i ) Vertical integration could be expected to lead to a closer alignment of silvicultural techniques with industrial requirements. Where responsibility for forest and industrial plant management is d i v i -ded, confusion ever objectives of management can, and sometimes does arise. ( i i i ) Integration helps to reduce overheads. By sharing 46. common f a c i l i t i e s such as the administrative organisation, arrangements for handling labour, welfare problems, etc., unnecessary duplication! of effort is avoided. (iv) The combined forest enterprise i s usually able to make more efficient use of the varied s k i l l s in the labour force and to arrange steadier labour employment over the seasons. (Koroleff 1951) (v) Integration, may ensure more sustained forest development than would be possible i f a State Forest Service remained responsible for the management of a l l Crown forest lands, because of the financial implications of treasury budgeting previously discussed. Vertical integration, cannot be realised where forests and industrial plants are managed as separate entities. If Crown timber is the main raw material supply for an industry, i t can only be achieved by the nationalisation of manufacturing plants or by "denationalisation" of the industrial forests as in British Columbia. litany of the western countries have been reluctant to establish State owned manufacturing plants, or to denationalise State forests, and they have therefore been unable to realise the advantages of vertical integration: 47. There is however in most countries, a very strong prejudice against the state entering into competition with industrial producers and, for this reason, forest services are actively discouraged from establishing their own mills. And, unless this disability can be overcome, state forestry will always be debarred from reaping the advantages that can be secured from combining the production and utilisation sides of the industry. (Hiley 1930) v (13) Points of controversy A complete analysis of a l l the points of controversy which have arisen between licensees and the Forest Service would have been d i f f i c u l t . In the time available for this study, i t was not possible to analyse a l l the various correspondence f i l e s in the Forest Service offices. Much of the information contained i n these f i l e s i s regarded as confidential and, while many companies would probably have been willing to have allowed their correspondence f i l e s to be studied, i t would have been reasonable for others to have objected. Other sources of information, which give a good indication of the points of controversy are: The minutes of the Vancouver Forest District Tree Farm Forestry Committee meetings' (The' Tree Farm Forestry Committee i s a body of Forest Serviee and industrial representatives, which meets periodically to diseuss problems of mutual interest. The Committee was formed i n January 1959, and, up to the time of this study (January 1962), had held 11 meetings.) \ The British Columbia forestry and timber trade journals. 1 J 48 Submissions made by several companies to the 1956 Royal Commission. i -The 1966 Royal Commission reports (Sloan 1957). In addition, a considerable amount of information was gained by discussion vith company and Forest Service representatives. The most prominent points of controversy have been: (a) Working plans (b) Stumpage and forestry costs (c) Definition of acceptable standards of forest management, protection and utilisation. (d) The 30 per eent clause (e) The licence clauses relating to permissible annual cut. (a) Working plans The type of working plan and amount of detail i t should con-tain vere discussed i n some detail by the Tree Farm Forestry Committee during 1961. "; Companies argued that: (i) Detailed long term planning was a waste of time since the amount of money available for forestry would fluc-tuate from one year to the next according to the com-pany's annual profit. Short term plans were more practicable. 49. ( i i ) The amount of paper work involved in producing long terra plans consumed time that could be more profitably spent i n the field* ( i i i ) The Forest Service had been too rigid in i t s inter-pretation of the working plan requirement clauses* The Forest Service maintained thai: (i) Working plans were an essential part of forest management* ( i i ) Tree Farm Licence contractsrequired a certain minimum standard of planning and* without planning* i t would be impossible to assess whether the clauses of the lieence were being observed* The present position appears to be that* the majority of companies have accepted that working plans are essential and* as pre-viously observed* have submitted plans which conform with Forest Service requirements* The Forest Service appears to be flexible in i t s interpretation of working plan requirement and the impression gained* was that the subject is no longer a serious issue* (b) Stumpage and forestry costs Stumpage has frequently been a source of controversy between 50 Industry and the Forest Service. This discussion is mainly confined to problems which affect Tree Farm licensees. The problems are com-plex and in order to facilitate discussion i t is proposed to examine a few general principles f i r s t . Stumpage on Crown timber is usually paid for in one of two ways. The commonest of these* and that whieh applies to British Columbia and most other countries* is a payment made at the time of cutting based on the value (in the stump)* of the volume of wood re-moved. Methods of calculating this value vary. The method used in British Columbia* is to calculate stumpage as a residual value of the selling price of logs or finished lumber* after deducting costs of the "average" efficient operator and allowing a suitable margin for profit and risk. An alternative method of payment for stumpage* is on the basis of a lump sum bid. The bid may be the result of negotiation, or auction* depending on the circumstances of the sale. It has been argued that* lump sum sales possess several advantages over the method described aboves Provided the trees to be sold are marked and their volume carefully estimated* the lump sum transaction is much to be preferred. Subsequent laborious measurement is avoided* disputes over scale are es-caped* and the seller is able to side step the trouble-some problem of enforcing utilisation standards. Furthermore* lump sum transactions are socially de-sirable in that they foster voluntary close u t i l i -sation of the trees. (Duerr 1960* pp. 330) 51. An examination of the effect of the current tenures and taxes on forest management in Canada was made by Moore in 1957. He concluded that, almost a l l the present methods of timber disposal include the serious defect that the licensee has no assurance that he will benefit from any increase in yield which may result from his own investments. A solution suggested by Moore was that licensees should be required to pay for their timber on the basis of a ground rent, related to the normal productive capacity of the land, stated in terms of fixed volumes of wood. The rate to be paid would be cal-culated as a fixed proportion of the current selling price of primary forest products, the proportion to be established by bidding or nego-tiation at the time of signing the licence. Disposals of Crown timber would therefore be lump sum sales. A ground rent, based on the normal productive capacity of the area, would force a licensee to reconsider whether i t was profitable for him to retain his elaim to lands he was not operating. (This argument i s of more particular relevance to Eastern Canada than to British Columbia). Methods of timber disposal incorporating rentals were advocated in the 1957 New Brunswick Forest Development Commission Report, (Government of New Brunswick 1957) and by Wilkes (1954), when discussing the taxation of Crown forest lands in Ontario. Methods of stumpage assessment on Tree Farm Licence lands, have undergone certain modifications since the tenure was introduced. 52 On the earliest licences issued between 1947 and 1949, the licensee was required to pay, on a l l timber deemed to be merchantable at the time of signing the licence, f u l l stumpage as assessed by the Forest Service, using the method of appraisal in current use* On a l l other timber, not considered merchantable at the time of signing the licenee, and defined as timber of less than half rotation age, the licensee would be required to pay approximately 16 per cent of the appraised stumpage value at the time of cutting, the method of appraisal again to be that in current use by the Forest Service* The figure of 16 r" per cent was considered to be a fair return to the Crown, for that portion of the crop which would result from natural regeneration* It was based on the Oregon Forest Act of 1929, although the rate adopted for British Columbia was higher. In 1949, the Forest Act was amended to introduce raa alternative method of assessment, under which a licensee could claim as a reduction from his appraised stumpage, approved•forestry costs incurred in the management, protection and silvicultural treatment of the area* Neither of the methods of stumpage assessment described is a lump sum sale* In 1958, the 16 per cent method was withdrawn from the statutes*. Of the 39 licences issued up to December 31st, 1961, three were operating under the 16 per eent method and the remaining 36 were 53. on the forestry costs system. The main reason why more licensees have selected the forestry costs method of assessment appears to be because they prefer to recover some of their costs now, rather than gamble on the prospect of getting back 84 per cent of an unknown stumpage value in about 90 years time. It is significant that two of the licences which are assessed under the 16 per cent method* contain a high proportion of private land. Under the forestry costs system* no allowance is made for forestry costs incurred on lands formerly held under other tenure. If a licence has a very low proportion of Crown land* the amount re-coverable as forestry costs might be so small that the Company would not benefit very much* and in these circumstances, i t may prefer to remain on the 16 per cent method. In the case of the third licence operating under the 16 per cent method, the Crown land is a l l immature and the f i r s t cut i s not due from i t t i l l 1974. Very l i t t l e is being spent on the area and no advantage would be gained by electing the forestry costs method*. The o f f i c i a l reason quoted by the Chief Forester of the British Columbia Forest Service for the Government's decision to withdraw the 16 per cent option was, that this method of assessment was "not i n the public interest". In the absence of more precise information* i t 54. is necessary to make various theoretical assumptions of the reasons actually considered and the most obvious ones appear to bet (i) That most companies were not interested i n the method. ( i i ) That i t is easier from the administrative point of view i f a l l the licensees are on the same system* ( i i i ) Different methods of assessment could lead to future complications and allegations that some companies were paying less stumpage than others* (iv) Government may consider that i t s direct revenues will be greater under the forestry costs system* (v) Government can retain greater control over licensees by use of the forestry costs method of assessment, since this will automatically prevent licensees from acquiring any equity in the forest crops grown on Crown land* (vi) Under the 16 per cent method i t would be possible for a company to acquire a licence area,1 spend as l i t t l e on forestry as i t eould safely risk without arousing Government criticism and at the time of cutting, cash in to the extent of 84 per cent of the stumpage value of the crop* Companies which elected the 16 per cent method eould be expected to take a different viewt 55 The Forest Service interpretation of the protection clause of the contract puts an onerous responsibility on the licensee. The price of the timber under the second election of section 33 is not merely 16 per cent of the market price. By our expenditures between nov and the'time ve can cut the immature, we buy that crop and we consider we pay plenty for the doubtful privilege of cutting a crop 90 years from now at 16 per cent of an unknown price to be submitted to' us for our acceptance 90 years from now. Neither the forestry costs nor the 16 per cent method of stumpage assessment avoids the defects suggested by Moore. Under the forestry costs system, the licensee acquires no equity in crops except those grown on Crown-granted lands. His expenditures on forestry are mostly reimbursed and there is no incentive for him to practice in-tensive forestry i n the hope of an increased stumpage return at the end of the rotation. He is in the position of a manager of Crown forest land and any increase in stumpage value, vhich results from better management, will benefit the Crown, and not the company. Under the 16 per cent method, the licensee would acquire an equity in the crop and would be assured of a major share of any increase in stumpage F value resulting from his own investments. But be would not secure a l l of the increase in value. The Crown s t i l l considers that i t is entitled to 16 per cent of the value of the crop at the time of felling and, i f the company's investment has resulted in an increase in stump-age value, the Crown would benefit from the company's investment. The fundamental theory underlying Moore's arguments is that, economic incentive is likely to result in more intensive forest manage-56. ment than can be achieved by Government regulation. This is basically the reason why many of the witnesses who gave evidence to the 1956 Royal Commission* suggested that outright alienation would result in more intensive management of industrial forest lands than any form of lease. The same argument was expressed by several company representatives during the course of this study, reference being made to the Pacific North West states of the U.S.A.. where many industrial companies own forest lands outright and manage them extremely well* As previously noted* neither of the two methods of stumpage assessment in British Columbia is a lumpsum sale. It is argued that sales on a lump sum basiis, would foster closer utilisation of less desirable species, would reduce the amount of time and money spent in scaling and thereby result in lower production costs* It i s d i f f i c u l t to be certain that the introduction of a rental system of assessment would result in any better forest manage-ment in British Columbia. The main arguments advanced against the suggestion weret (i) Because of a surplus of old growth timber few com-panies in the past have considered forestry as an investment. ( i i ) The Crown will probably always consider that i t is entitled to that proportion of stumpage value re-presenting natural growth* This limits the financial 57. return vhich con be expected from a private forest investment on Crovn land. ( i i i ) A rental method of assessment vould not increase incentive to remove marginal timber. It is l e f t behind at present because i t cannot be marketed for a profit and an alteration i n method of stumpage assessment vould not significantly alter this fact. Rather than cut marginal timber^an operator can usually cut more profitable timber from his ovn lands^or purchase such timber from Public Working i . Circles. (iv) Unlike Eastern Canada, there is no problem of com-panies hanging on to more land than they actually need. (v) Government's direct revenues vould decrease. (vi) Licensees are compelled to practice a satisfactory standard of forest management by Government regu-lation and this has so far proved effective. (vii) The existing pattern of tenures is already compli-cated and any nev modifications vould complicate the situation even further., 58 In theory* economic incentive is a better method of ensuring good forest management than Government regulation. , The case for using a rental method of assessment would be sound i f Government could be certain that companies would find forestry a sufficiently attractive financial investment to justify intensive management. This would be more certain in countries where short rotation crops yielding a high financial profit are being grown and particularly where a r t i f i c i a l regeneration is necessary* In this case the licensee would be in a very similar positionto a farmer renting his land from the Crown* . The Crown would be entitled to a rental related to the value of the land* If the crop is produced entirely as a result of a private investment, the stumpage value should accrue to the company making the investment* Finally, mention should be made of other faetors which affect forestry investments* Taxation, the prevailing rate of interest and probability of inflation, a l l tend to overshadow the relationship between stumpage value and level of forest investment. Each of these would need to be carefully considered i f ac change in method of stumpage assessment were under consideration. The importance of the forest as a supply of future raw material should also not be overlooked* This is the factor which perhaps more than any other, influences the decision of a large private company to acquire"forest land. Another frequent point of controversy between Tree Farm Licensees and the Forest Service and one which isclosely related to the question of stumpage, is that of forestry costs. Under the 59, forestry costs system, a company can claim as a reduction from stump-age some of the costs incurred in management and protection of the licence area. Forestry costs are defined as, costs vhich vould not be incurred, i f the company vere not practising forestry on a long term basis. The amount of forestry costs, is determined from a return submitted by the'company as part of its annual Tree Farm Licence report. The total costs are related to the allovable annual cut for the follov-ing year and a deduction from stumpage is alloved of so many cents per unit volume of timber cut from the Crown forest land included in the licence. No allowance is made for expenditure on Crown granted lands included in the licence. Where minimum stumpage rates apply, only half the forestry costs are allowed. In discussions on forestry costs, companies have submitted that* (i) Limitation of recoverable forestry costs to those items which the Minister deems to be "just and proper charges,M has meant that licensees have sometimes not recovered a l l their forestry costs. Disputes have arisen over what constitute fair eharges and forestry costs have not always been allowed. The companies argue that because of this, they are incurring charges on Crown forest land, the benefit of which will be realised by the Crown in future stumpage values and not by the company. 60 ( i i ) In cases where minimum stumpages are applied* the company only gets back half i t s forestry costs. ( i i i ) The company does not get back the f u l l forestry costs relating to lands formerly held under other tenures and now included in the licence area* This i s because forestry costs are related only to the volume of timber cut from Crown lands i n the licence area* whereas the allowable cut is calculated on on the basis of a l l tenures within the licence* The companies are carrying the cost of forest,develop-ment on these other lands but will not benefit from the increased stumpage value when the lands revert to the Crown* (iv) That the use of minimum stumpage rates is a deterrent to the clearing of marginal and decadent stands and that there would be greater incentive to practise close utilisation i f minimum stumpages were abolished, or, the negative stumpage values of marginal stands were to be charged off against the positive stumpage in mixed stands* The main counter arguments by the Forest Service are that* (i) The Government can allow only those costs which are 61. incurred because the company is practising forestry on a long term basis. They cannot allow any costs which holders of other tenures have to incur, under the terms of the Forest Act, without giving Tree Farm licensees an unfair com-petitive advantage. ( i i ) The Forest Service's use of minimum stumpage rates is based on the propositions that, the public should not give i t s resources away for nothing and that i t should not sell for ridiculously low prices now, what can probably be sold for a much higher price later on. If f u l l forestry costs were deductable from minimum stumpage, cases would arise where appraisals would indicate a negative stumpage value and under these terms, the timber could not be sold. By allowing only half the forestry costs, the stumpage is given a positive value. Despite the protests of industry, timber i s - s t i l l removed at minimum stumpage rates. ( i i i ) Forestry costs are not allowed on the timber cut from lands formerly held under other tenures because, i t is contended that, the timber on these lands has an addi-tional value to the holder, over and above the current Royalty rates. Every owner of Crown stumpage should 62 contribute his proportionate share towards forestry development on a current cost basis, forestry costs are regarded as current operating costs, and not as an investment in-the next crop* It would be d i f f i c u l t to introduce the suggestion made by Industry in (iv) above, without introducing an element of discrimination between one operator and another. In some areas of the lower Coast for example, there is plenty of Douglas f i r (at present the most desirable commercial species), and in others none at a l l . Operators in forests containing no Douglas f i r , s t i l l have to pay minimum stumpage rates. To reduce the stumpage on Douglas f i r in mixed stands, in order to create a positive stumpage value for less marketable species, would have the same effect as changing the indicated f i r rate and selling the less desirable species at less than minimum rates. This vould give operators in mixed stands, an unfair advantage over those operating in stands containing no Douglas f i r . The Tree Farm Licence is a guarantee of long term security and v i l l provide '.companies ~ vith rav material at a cheaper price than they could obtain i t under any other tenure; they should therefore be prepared to pay 63. something for this privilege. (vi) Forestry costs are a minor part of the whole timber appraisal in relation to other items, but receive more attention than appears justified. They usually run between ten cents and 40 cents per hundred cubic feet whereas total costs are usually more i n the region of $20 per 100 cubic feet. " J 1 It i s not proposed to attempt a solution to the problem of forestry costs, (assuming a satisfactory one to both parties exists). The arguments have been reproduced in order to give some indication of the type of difficulty the Forest Service has encountered in its adminis-tration of Tree Farm Licences. It is doubtful i f a solution worked out for conditions i n British Columbia, would have much applicability else-where. It is pertinent to note that, in the 1956 Royal Commission report. Justice Sloan was of the personal opinion that, the forestry costs system contained certain weaknesses: It is my thought that there is a basic weakness in the principle of forestry allowances, reduction of dues on temporary tenures or any other form of sub-sidy or preferential treatment in connection with management licences other than the allocation of Crown timber at non-competitive prices to assure the future supply of industry. It should be recog-nised by the licensee that the public is assisting them to build up a valuable property by allocation of timber at a cost less than they could obtain i t 64. any other vay and payable only as and when i t is needed. This should in i t s e l f , as in the Eastern Provinces, justify reasonable" expenditure on forestry practices designed to improve and perpetuate the forest; otherwise i t is implied that the sustained yield forestry, even when applied to a forest with an , ( ample supply of mature timber, is not an economic investment. This cannot be admitted. (Sloan 1957) There appears to be general agreement in British Columbia that the forestry costs system isnot a particularly good one, even though Industry in general, prefers this method to the 16 per cent method. Expenditures on forestry costs previously discussed are not very large and they entail considerable work in inspection and compila-tion. They have also led to the mistaken impression that %ree Farm Licensees are getting their timber for lower rates than other operators on Crown land. (c) Definition of acceptable standards of forest management, protection and utilisation There have been a number of discussions over what companies and the Forest Service regard as acceptable standards of forest manage-ment, protection and utilisation. It is not intended to examine this subject in detail, beeause i t appears that in general, the Forest Service i s satisfied that the standards of forest management and pro-tection on Tree Farm Licence lands are sufficient to satisfy the licence requirements. The amount of pressure which the Forest Service can exert on Tree Farm Licensees must presumably be influenced by the stan-dards of management i t is able to apply to Public Working Circles. 65. The acceptable standards of utilisation are defined in the cutting permit, which specifies diameter limits for various species, methods of felling to be used and other obligations relating to logging operations. Some critics of the cutting permit clauses argued that, by imposing diameter limits and other restrictions,, the Forest Service has sometimes caused companies to operate at a loss. This did not appear to be a widely held view and the limits placed on cutting at present do not appear to be unreasonable. In 1956, i t was suggested by several witnesses giving evidence to the second Royal Commission that, the Forest Service should be more strict in its interpretation of acceptable utilisation standards. For instance, i t could require the licensee to install machinery to make use of small and salvage timber, or to integrate his operations within a certain time. The Chief Forester of the British Columbia Forest Service maintained that such clauses would be too rigid, pointing out the difficulty which might arise with a small Interior mill and no pulping plants nearby. It was his opinion that i t would be dangerous to put the control of manufacturing plants into the hands of the Government and that a firm vould either keep i t s e l f up to the mark or go out of business. Conversely, since the Government has already established the principle of cancelling the licence i f certain provisions are not observed, there would seem in theory, no reason why i t should not obligate the licensee by contract to keep his plant modern, warning him 66. that failure to observe the contract vould result in cancellation of the licence* (d) The 30 per cent clause Under clause 27 of the Tree Farm Licence contract, the licensee is obliged to: provide the opportunity for contractors, other than the licensee's ovn employees or shareholders vho ovn more than one per cent interest to harvest a volume equivalent to a minimum of thirty per cent of the allovable cut from Crovn lands not held under other tenure. (The percentage varies from one licence to another according to local circumstances) This elause vas included primarily to protect small loggers operating in an area subsequently to be issued as a Tree Farm Licence. It ensured that they vould be given the opportunity to stay in business and to some extent, met the criticism that the Tree Farm Licence vas a give-avay of the country's forest resources to larger companies* When f i r s t introduced, many licensees objected to the elause on the grounds that i t tied them to dealing vith contractors in areas vhere they vould prefer to carry out logging operations themselves* Contractors also voiced objections, maintaining that companies could., i f they so desired, manipulate their felling areas so as to exclude the small logger (e.g. by felling only on land formerly held under other tenure) or, so as to ensure that small loggers only obtained the vorst timber* It vas submitted that the Government vas forcing a contract on both parties vith "fixed terms." 67 The present position appears to be, that this particular elause of the licence is not a cause of serious controversy. In general, a satisfactory working relationship has been built up bet-ween the companies and the small independent contractors. In prac-tice, both parties often benefit from the arrangement. Several of the company offici a l s with whom the question was discussed, confirmed that the small logger can play a very useful part in the company's operations, since he i s more adapted to the problems of exploiting small inaccessible areas and is familiar vith local conditions. He ean often operate these areas at a cheaper cost than the company could vith i t s ovn men. Many of the small loggers admit that the expansion of the bigger companies has provided them vith more opportunity than before. (e) Permissible annual cut The licence clauses governing permissible allowable cut do not appear to have led to serious controversy but i t was suggested by several company representatives, that such restrictions ean have a serious effect on the efficiency of industry, by restricting their annual cut i n times of good markets and preventing them from making maximum use of their raw material. It was their opinion that there should be greater f l e x i b i l i t y in the interpretation of the clauses re-lating to allowable cut. Balancing of the cut over a ten year period, instead of five years, and a 20 per cent allowance either way, would be mere reasonable than the present five years and ten per cent. It 68. was their contention that accelerated cutting in times of economic prosperity is of benefit to the economy in general and that providing reforestation is carried but. of no long term disadvantage to the Province-. It was maintained that, even under a more liberal cutting policy, the available markets for timber would s t i l l not be large enough to lead to serious over cutting. The traditional arguments in favour of equal annual cuts are well known and will not be repeated here. Companies in general would, prefer a higher annual cut than is at present permitted. They maintain that a shorter rotation is possible than the period laid down by the Forest Service. A shorter rotation period would increase the annual cut as calculated by the Hanzlik method. It is also sometimes argued that companies should be allowed to include volumes of marginal timber and less desirable commercial species in their inventory cruise volumes since expanding markets and technological changes in the industry, will make i t possible to use such timber during the f i r s t rotation. The Forest Service has not so far accepted these arguments. The allowable cut is revisable at 10 year intervals and, i f standards of utilisation have changed appreciably during the period, a higher allowable cut would be permitted. 69 In summary i t can be noted that the point of controversy discussed have not seriously interfered with the administration or operation of Tree Farm Licences* The Tree Farm Forestry Committee has provided a useful form for discussions of forestry problems* ((14)} Opposition to the Tree Farm Licence The two main sources of opposition to the licence have been from independent operators who do not hold Tree Farm Licences and from groups such as the Ranching and Mining Industries which opposed the allocation of land for one particular form of use* The term independent operator* includes independent market loggers with no manufacturing plant* as well as sawmillers cutting Public Working Circle timber* Not a l l independent operators are in opposition to the licence* As previously noted many of them appreciate that the expansion of the bigger companies has provided them with more opportunity than before* The opinions of those who oppose the licence are represented by various associations such as the Independent Truck Loggers Associa-tion, Independent Loggers Association, Independent Timber Converters Co-operative Association and the Forest Development Association. During the course of this study, i t was possible to meet several re-presentatives of these associations* including one of the leading opponents of the Tree Farm Licence, Mr* J . Gordon Gibson, former M. L. A. 70. The independent operators' main arguments against the Tree Farm Lieenee ares (i) The only fair method of distributing Crown timber is by public auction* The Tree Farm Licensee i s protected from competition and has an unfair ad-vantage over those who buy their timber from Public Working Circles* ( i i ) The protection of larger industries from competition could lead to their ultimate stagnation and this would have an undesirable effect on the Provincial economy* ( i i i ) The distribution of forest resources among a few companies on a long term basis, may conflict with the interests of future generations and locks up the best forest land in the Province indefinitely* (iv) The Tree Farm Licence introduces an undesirable element of monopoly into the forest industry and could lead to a situation where a few large companies would be in a position to influence Government forest policy i n their favour* (v) The system encourages speculation in Crown timber and has provided many millions of dollars in tax 71 free capital gains for a few select individuals* It is undoubtedly true that public auctioning of Crown timber helps to ensure a fair deal to a l l purchasers* The principle of auc-tioning Crown timber has been applied in many countries* The main advantages are that the method relieves Government from the responsi-b i l i t y of deciding which of several competing forms should be allocated Crown timber* It is also argued that auctioning ensures Government the maximum financial return. A major disadvantage is that* in countries where Crown timber is the main source of raw material for industry, unless the Crown puts up large blocks of timber for sale* i t is d i f f i c u l t for a company to acquire sufficient timber to justify investment in a large and expensive manufacturing plant. This was the situation in British Columbia between 1907 and 1947. Gordon (1961) noted that in both Cyprus and Trinidad a policy of auctioning Crown timber in small lots has effectively retarded the establishment of efficient sawmills. Huber (F.A.O. 1953). observed the same thing in India* If the establishment of large integrated industries is considered to be in the public interest* i t would seem that the quicker they are established the better* and that by auctioning i t s timber i n small lots. Government may effectively retard their development* In British Columbia, The Tree Farm Licence has made i t pos-sible for firms to acquire sufficient timber to justify large scale 72. Industrial investment. It is unlikely that the pulp and paper industry in particular, vould have developed as rapidly as i t has done since 1947, had a l l Crovn timber continued to be disposed of by public auction. It is contended by opponents of the Tree Farm Licenee that, because the licensee i s protected from competition, he will pay less for his timber than independent operators vho have to bid for their timber on Public Working Circles. He is also able to bid on Public Working Circles and, because of the back log of cheap timber held under other tenure) is able to outbid the independent operator and thus put him out of business. Both those arguments vere discussed at some length in the 1956 Royal Commission report (pp. 182-192). The main counter arguments vere: (i) Protection from competition does mean in theory, that the independent operator vould tend to pay more for his timber, but in practice, this has not often been the case. Since the Tree Farm Licence vas introduced, the majority of Timber Sales on Public Working Circles have gone at the appraised upset values, i.e., at non-competitive prices. The reasons for this v i i ! be discussed later. ( i i ) Comparisons of the stumpage priees of Crovn timber sold from Tree Farm Licences and Public Working Circles, 73 do sometimes* show a difference in favour of the former, but such comparisons often overlook the amounts spent by the companies on forestry development* (as represented by the allowed forestry costs i n the stumpage appraisal). ( i i i ) It vould be impracticable to prevent Tree Farm Licensees from bidding for timber on Public Working Circles* because the Government deliber-ately refrained from avarding a licensee a l l the timber his conversion plant required* Until such time as intensive management has resulted in the raising of the allovable cut from the licence area* to a proportion sufficient to meet the requirements of the firm's plant, i t vould be unvise to prevent the Tree Farm Licensee from bidding for the extra timber he requires on Public Working Circles, since this, might force him into logging marginal timber at a loss* There is no evidence in British Columbia that the Tree Farm Licence has led to the stagnation of larger companies* The general opinion gained during discussions of the subject vith Forest Service and company representatives vas that, the chances of this happening are no more serious than in the forest industries of most other vestern countries* and that so far, individual firms have remained highly com-74 petitive within the fie l d of their manufacturing activities* The present trend towards larger manufacturing units may encourage monopolies and i t is d i f f i c u l t to see how* under a free enterprise system, this can be prevented, except by use of anti-monopoly legislation of the type used in the U.S.A. (Dealey 1958). When the Tree Farm Licence was f i r s t introduced, i t was known as the "perpetual management lieenee" and, i f the licensee accepted the obligations of the contract, i t was awarded in perpetuity. During the 1956 Boyal Commission hearings* i t was the opinion of many witnesses who opposed the licence that* i f such licences were to be awarded at a l l * they should not be perpetual* since this would tie the interest of future generations* A principle objection to perpetual tenure is based on the fact that the next generation should be able to review the contract and that we would be depriving our children of opportunity. (1956 Royal Commission, Summary of Evidence Vol. II* pp. 89-7.) Mainly because of the weight of opinion against the perpetual clause* the period of the licence was altered to 21 years and a l l Tree Farm Licences are now issued for this period. In practice* there would appear to be very l i t t l e difference between the perpetual and 21 year licences. There is certainly no desire on the part of the present Government to cancel the licences i after 21 years* and, providing the licence clauses are observed, i t seems that they will be automatically renewed. Whether the licence 75 period runs for 21, or an infinite number of years, i s considered by some industrial operators to be irrelevant, since the Government has i t within i t s power to cancel a licence at any time i t chooses to do so* The history of several of the major industries in Great Britain, the Suez Canal and the British Columbia Electric Company, are sufficient evidence of the ability of Governments to take over privately controlled interests i f they so desire* Opponents of the licence also state that, i t encourages speculation in Crown timber and that, i t has provided many millions of dollars in tax free gains to a few select individuals* There can be no doubt that a company*s shares appreciate very considerably i f i t acquires a licence* The licence is an assurance of long term operation and is also accepted by the banks as security for the raising of loan capital* The British Columbia Government was aware that speculation might occur when the licence was introduced and, with this- in mind, included clause 48 of the licence which states: This tree-farm licence shall not be sold or transferred by the licensee within 10 years immediately subsequent to the issuance of this licence nor shall the control of the licence be transferred in any manner whatsoever to any person or persons, firm or firms, corporation, or corporations without the written eonsent of the, Minister f i r s t having been obtained* Evidence given, during the 1956 Royal Commission hearings, failed to differentiate clearly, between capital appreciation of shares as part 76 of ordinary market improvement, and that due solely to the avard of Tree Farm Licences* but i t seems certain that a fair proportion was due to the latter. Opponents of the licence argued that, sinee Crown, forest land was changing hands* the public should get the benefit and not the licensee and that, in some cases* the profits from increased share value went outside the Province, (presumably to American share-holders) . Those who supported the licence argued that, the acquisition of a licence does not always result in enhanced share values. If money is made out of share transfers, these profits have very l i t t l e to do vith the overall benefit derived from having a stable and prosperous industry and the amount taken out by such shareholders, is insignificant* Several sections of the 1956 Royal Commission dealt with the conflict between Tree Farm Licensees and those interested in using the forests for some other purpose than the growing of timber. The main interests involved were* (i) Grazing ( i i ) Mining ( i i i ) Fishing (iv) Hunting (v) Trapping , (vi) Recreation. Crown forest lands are an important source of fodder for the ranching industry. Between 1951 and 1961, over 100,000 cattle were 77 grazing under permit on Crown forest lands every year, as well as numerous horses and sheep* Early opposition to the Tree Farm Licence arose from the wording of Section 33 (2) of the Forest Act: The Minister may enter into agreement described as a tree-farm licence with any person for the management of Crown lands specified in the agree-ment to the sole use of the licensee for the pur-pose of growing continually and perpetually successive crops of forest products* This section led to concern that, the interests of Tree * arm Licensees would take precedence over those of the ranching industry* The conflict between grazing and forestry in British Columbia is similar to that of many other countries. Much of the so called forest land* of the Interior* consists of open grasslands or parklands, which make excellent grazing pastures* There is no shortage of forest land for timber production in British Columbia and by permitting grazing, fuller use is made of the Province's land* Unfortunately, the areas suitable for grazing are sometimes-closely associated with those lands also suited to timber production and conflicts of interest have arisen* Ranchers have complained that, loggers and sawmill operators damage fences, allow cattle to escape from their range and cause their stock to lose condition* From the timber operator's point of view, the exis-tence of ranchers and stock in a forest area constitutes a threat to regeneration, a souree of damage to growing trees and an increased f i r e hazard* 78 Over recent years* the fears that grazing interests would be adversely affected by the Tree,Farm legislation have been largely dis-pelled* There has been no serious reduction of available grazing areas and the Interior Tree Farm Licensees continue to permit licensed grazing on their grasslands* The problems of grazing versus forestry remain and a solution will largely depend on the degree of mutual co-operation which can be built up between members of the two industries* In short, the Tree Farm Licence has not added any serious problem to those that were there before the tenure was introduced* The mining industry i n British Columbia is also an important one* ranking next to forestry as a source of production value from natural resources* Many of the mining claims are on Tree Farm Licence lands* In 1953* these totalled 382 claims covering an area of 19,700 acres* Conflicts between the mining and forest industries have arisen because: (i) Independent prospectors have in the past, been able to cut a certain amount of Crown timber free of charge* This concession is a form of encourage— i -ment to the prospector and enables him to establish his operations at cheaper eost* It has been as-serted by Tree Farm Licensees that this privilege has been abused, some prospectors having laid claim to more timber than they actually required* 79. ( i i ) Tree Farm Licensees have protested in cases vhere mining operations cut into their best quality timber stands. ( i i i ) The mining industry expressed similar concern to that of the ranching industry, over the wording of Section 33 (2) of the Forest Act. Mining versus forestry problems again affect a l l Crown timber lands and not only those under Tree Farm Lieence. The mining industry is concerned about the ereation of Public Working Circles as well as Tree Farm Licences. There is no easy solution to the problem and each case will presumably depend on whether the Government considers that mining, or forestry* is of greater importance to the national economy. Under clauses 9, 10, 12 and 16, of the contract, the Govern-ment has reserved the right to withdraw lands from the lieence for the purpose of placing them under a higher form of economic use i f this is deemed to be in the public interest! For the purposes of this section, (10), the develop-ment of mines and mineral claims may be deemed to be essential to the public interest. In practice, this clause has been applied in numerous cases both on Tree Farm Licence lands and on Public Working Circles. The imple-mentation of the legislation, has helped to restore the confidence of those who formerly opposed the Tree Farm Licence on the grounds that 80. timber production would be given priority* Opposition from groups interested in forest lands for bunting* trapping, fishing, recreation and hydroelectric power, has been for reasons similar to those analysed above* Over the past decade, opposition has decreased as i t has become apparent that the Tree Farm Licence does not automatically exclude other forms of land use* Tree Farm licence companies have, in some cases* gone out of their way to encourage wider public use of their lands, on the principles that exclusion of the public could only lead to political antagonism and that, publie familiarity with the objectives and methods of the forest industry should result in more effective forest protection* Some companies have established o f f i c i a l camping sites and many have erected sign boards explaining the company's activities* To summarise, i t appears that opposition to the Hree Farm' Licence has had two main effects: (i) It led in 1956, to a reappraisal of the principles governing the award of licences* ( i i ) It has prevented the award of Tree Farm Licences in any area where independent operators are already established, except where the latter are in f u l l agreement that a licence should be awarded* 81. It i s significant that similar political opposition to long term tenures has been encountered in the U.S.A.: ^ As you found out for Canada, small operation interests abetted by misdirected insistence of federal branches that claim that the greatest stumpage return i s obtained by auction bidding in small lots, have effectively prevented further development of the sustained yield unit whether federal or cooperative particularly the latter. (Meyer, W. H., Personal Correspondence, December 1961). (15) Administration of Tree Farm Licences The Forest Service has a staff of Tree Farm Licence Foresters in each of the five Forest Districts. They are assisted by a staff of Forest Rangers. In the Vancouver Forest District, supervision of the 18 licences in the District is the responsibility of a Tree Farm Lieenee Forester plus one assistant, (both graduate Foresters). They are based on the Forest Service District Headquarters office in Vancouver, and are assisted by 15 Rangers, each in charge of a specified area withim the District. The latter have numerous other duties i n addition to their Tree Farm Lieenee commitments, including supervision of logging on Public Working Circles, and general duties connected with Crown land forest development. Rangers spend much of their time in the fie l d and carry out regular inspections of Tree Farm Licence operations. The Tree Farm Licence Foresters, spend most of their time on administra-tive matters. Their main duties include: study of the working plans submitted by companies, study of the annual company reports on forest 82. development, the settling of any minor matters of policy relating to the licence clauses* and the supervision of licensee activities to ensure they comply vith the requirements of the contract.. In short, i t is their function to see that the public interest is adequately protected. The amount of time vhich Tree Farm Licence Foresters can spend in the f i e l d is unfortunately limited by the volume of adminis-trative vork. In the Vancouver Forest District, the aim of the present Forester and his assistant, is for one or the other of them, to v i s i t a l l current operating areas at least tvice a year. There are 24 of these at present (1962). When making such v i s i t s , they are usually accompanied..by the local Ranger, the Company Forester and sometimes by staff from other Divisions of the Forest Service such as Reforestation, Management and Working Plans Divisions. The District Tree Farm Licence Foresters are responsible to the Head of the Management Division of the Forest Service in Victoria, to vhom they submit annual reports on the activities of the licensees vithin their Districts. Under clause 45 of the contract, companies are obliged to employs One Forester, registered under the terras of Chapter 37 R.S.B.C., 1960, and amendments thereto, and as many additional Registered Foresters as may be deemed necessary by the Chief Forester. 83. The majority of Registered Foresters hold forestry degrees and have had a minimum of two years practical experience of local conditions. It is their responsibility to ensure that forest operations i n the licence area comply vith licence requirements. In practice, there is a sound working relationship betveen the Forest Service and company administrative staff and most of the administration problems vhich arise, are settled by local discussion. Disputes over vhich local agreement cannot be reached, are forvarded to the Forest Service offices in Victoria, for the Chief Forester's decision. If a company i s not prepared to accept this decision, i t may appeal to the Minister of Lands and Forests vhose decision on the matter i s f i n a l . It appears that the Forest Service is satisfied that in. general, standards of forest management on Tree Farm Licence lands come up to, and in many cases exceed, the requirements of the contract. It has not been neeessary for the Forest Service to exert undue pressure on Tree Farm Licence operators in order to achieve this situation. An indication of the' degree of co-operation being achieved vas obtained by reference to the number of occasions, on vhich companies have been penalised for failure to comply vith the licence clauses. In the Vancouver Forest District, betveen 1957 and 1960, seven cases of fining vere recorded. Four of these vere for cutting outside defined - cutting permit boundaries, one for damage to young regrovth during logging operations, one for the abandonment of felled and bucked material and one for failure to remove the specified allowable cut. 84 Whether i t would be advisable to increase the number of Forest Service supervisory staff is debatable. On the one hand, an increase in staff would mean more effective inspection of Crown lands and an increase in the interchange of ideas on forestry problems* On the other* there would be a risk that companies would resent an increase in Forest Service supervision of their activities* It would also be d i f f i c u l t to increase supervisory staff, on Tree Farm Licences while Public Working Circles remain understaffed* (xvi) Timing of the licence poliey and future trends Three of the questions listed earlier* can be conveniently discussed together. They are: (i) Was the Tree Farm Licence introduced at the right time? ( i i ) What would have happened i f no Tree Farm Licence had been introduced? ( i i i ) What is the future of the Tree Farm Licence likely to be? It is generally considered that* the timing of the licence introduction', was very appropriate* For many years* operators had vorked on a "cut and get out" basis and the licence made i t possible for them to plant for more permanent operation* The post World War II period in British Columbia* was one of rapid industrial expansion and favoured the pulp 85. and paper industry in particular. The Tree Farm Licence enabled com-panies to acquire a sufficient area of forest land to justify heavy capital investment* It could be suggested that* i f a similar licence had been introduced at an earlier date, forestry in British Columbia would be further ahead than i t is today, but i t i s d i f f i c u l t to be certain of this* Economic circumstances have been the main reason for the great expansion of Industry over the last 15 years and prior to 1989, conditions were less favourable to the establishment of lartge permanent industries* If no Tree Farm Licence had been introduced, i t is reasonable to assume that, the forest industry would not be in the same position as i t is today* The Government Forest Service has continued to be handicapped by a shortage of staff and funds and i t is unlikely that forest management, would be as intensive as at present, i f responsibility for a l l management had remained with the Forest Service* Looking to the future, much will depend on what happens in Public Working Circles, which have provided the main source of timber for operators vho do not hold Tree Farm Licences* When f i r s t created, there were less operators in Public Working Circles than there are today* Since 1947, there has been a rapid increase in the number of Timber Sale applications and many of the Public Working Circles are now fully committed. Established operators in a l l areas have naturally made every possible attempt to 86. consolidate their position. The Protective Association movement vhich originated in the Prince George District vas a deliberate move on the part of established operators to gain control of Public Working Circle timber and to deter outside competition. So far, i t has had a success-ful history. Macfarlane (1961) stated that Protective Associations controlled 19 per cent of the Provincial allovable cut i n I960. At the same time the Government, forced to recognise that existing operators already have a substantial capital investment in an area, and that over-bidding does not always ensure the best forest management or industrial stability, have helped existing operators to consolidate their position even further. In 1960, sealed tender bid legislation was introduced, which applies to any Public Working Cirele classified as an "emergency" area (which in practice,meansbeing overcut by a specified amount). This gives an opportunity for an established operator to match the highest bid made by any other operator on a parcel of timber which the established operator requires for further operation. A licensee priority" system was also introduced, which gives established operators in a l l Public Working Cirlces an assigned commitment related to the amount of timber cut over the three preceding years. In brief, the situation will soon be reached where, most of the accessible timber in British Columbia will be controlled by existing operators. Competition for raw material is gradually being reducedr and i t is becoming increasingly d i f f i c u l t for nev operators to get a footing i n the savmilling business. This partly explains vhy Public 87 Working Circle timber i s usually sold at the appraised upset price* At the same time* the fact that large areas of Crownu timber have been allocated to Tree Farm Licensees* has encouraged the latter to invest in expensive and efficient manufacturing machinery and helped them to reduce their production! costs* The smaller operator in British Columbia thus finds himself in a dilemma* In order to keep pace with the larger firms* he may need to expand the scale of his operations* To do this* he has to acquire more timber and the only alternatives are* to buy out an existing operator within his Public Working Circle or overbid him at an auction sale* There is thus a trend towards the amalgamation of smaller firms as is happening at present for instance in the Prince George District* Taking the'long term view* i t may be inevitable that control of most Crown timber will f a l l into the hands of larger operators* There will nevertheless always remain room for smaller operators, either acting in the capacity of contractors to the larger p firms, or as independent operators, in areas where topographic, or market conditions, given them a special local economic advantage* Integration, by such methods as the co-operative marketing of waste residues, will help such operators to remain competitive and i t is very much in the public interest that they should do so* i In a l l Public Working Circles, there has been a noticeable trend towards long term planning by individual operators* Because a l l 88 operators are required by the Forest Act* to observe certain- standards of u t i l i s a t i o n and protection* i t has been argued by some* that the Government should recognise that they are carrying out almost the same operations as Tree Farm Licensees and that an allowance for forestry costs should therefore be made i n their stumpage appraisals* I t i s suggested that this would create more incentive for such operators to practise good forestry. In the future* there may be increasing pressure on the Government from Public Working C i r c l e operators for the conversion of these areas into Tree Farm Licences. The arguments i n favour of this w i l l bet (i) In many Public Working Ci r c l e s most of the allow-able cut w i l l be controlled by a few large operators. ( i i ) Competition for raw material w i l l have been greatly reduced* i f not almost eliminated. There w i l l be l i t t l e point i n retaining a system of public auc-tioning aimed at securing Government a greater revenue return for i t s timber. ( i i i ) Even i f competition remains* i t w i l l be extremely d i f f i c u l t for a non-established operator to acquire timber i n a Public Working C i r c l e . The only way he w i l l be able to do t h i s , w i l l be either by pur-89. chasing a Timber Sale from an established operator or, by over-bidding an established operator. In the former case, i t i s unlikely that an established operator vould i n v i t e competition by s e l l i n g off a portion of his rav material. If he s e l l s out at a l l , i t v i l l probably be a sale of his vhole opera-t i o n inclusive of manufacturing plant. The possi-b i l i t y of a non-established operator over-bidding a v e i l established operator v i l l also be remote, i f established operators continue to protect themselves by the use of Protective Associations. (iv) One of the main objectives of Government forest policy i s s t a b i l i t y of forest industry and this v i l l be encouraged by allocation of rav material supplies to v e i l established industries, vhich v i l l remain competitive at the manufacturing l e v e l . If eventually, control of most Crovn timber f a l l s into the hands of larger operators, Public Working Circ l e s v i l l v i r t u a l l y be-come Tree Farm Licences i n vhich Government v i l l continue to carry the financial and administrative responsibility for forest management. From an operator's point of view, the conversion of a Public Working C i r c l e into a Tree Farm Licence, would give him com-plete security of raw material supplies. In exchange, he would have to accept the obligations of forest management. From Government's viewpoint, the conversion of a Public Working C i r c l e into a Tree Farm Licence, would mean an opportunity to delegate complete responsibility for forest management to private enterprise. Whether or not i t would be desirable for private enter-prise to take over the responsibility for almost a l l forest management in B r i t i s h Columbia, i s d i f f i c u l t to answer. In many countries, i t i s believed that a reasonable balance of State to privately managed forest land i s most i n the public interest. On the one hand, i t would certainly appear desirable for Government to retain at le a s t some stake i n forest management, i f only to ensure that Forest Service o f f i c i a l s responsible for the administration of Tree Farm Licences have some yardstick on which to base their judgement of the licensee's operations. Conversely, i t may well prove i n course of time that, economic necessity w i l l force a l l operators into managing their forest lands intensively, as for instance i s already the case on private company owned forest land i n the Southern United States, New Zealand, South A f r i c a and elsewhere. If this happens, i t may be unnecessary to reta i n a Government administrative staff to supervise the a c t i v i t i e s of Tree Farm Licensees and i t w i l l make l i t t l e difference whether forest lands are alienated outright to private enterprise, or retained under Crown ownership. (17) The use of the Tree Farm Licence i n other countries The Tree Farm Licence could be of particular significance i n those countries where: (i ) Much of the forest land i s owned by the Crown. ( i i ) Private enterprise industrial investment i s con-sidered desirable. ( i i i ) I t i s desired to attract capital to the forest industry. (iv) Economic and p o l i t i c a l conditions favour the establish-ment of large industrial units. Adequate markets vould be essential and p o l i t i c a l s t a b i l i t y very desirable. (v) Forest crops shov the prospect of a high financial return. (vi) The State Forest Service i s handicapped by a shortage of staff and funds. The difference between B r i t i s h Columbia and many other countries i s that, the old growth forest i s so valuable and regeneration so easy* that sustained y i e l d management i s an economic proposition. That, i n the f i r s t cut over v i r g i n forest, i s most exceptional. Therefore i t w i l l rarely be possible to introduce anything l i k e the Tree Farm Licence into natural forest during the f i r s t rotation. But the situa-t i o n may be very different at the end of the second rotation as a result of improvement of the forest at Government expense. I t w i l l also be of particular significance i n countries where a r t i f i c i a l l y established forest crops show the prospect of high financial returns. Kenya would be a typic a l example. Experience i n North America suggests that, wherever economic conditions favour the establishment of large industrial units, i t i s almost certain that, sooner or lat e r , much of the available raw material for an industry w i l l be controlled by large operators. An allocation of Crown timber to a large concern i s therefore merely f o r e s t a l l i n g the inevitable. I t also follows that, because of the size of invest-ment, economic necessity w i l l force such concerns to operate their forestry on a sustained y i e l d basis. The Tree Farm Licence may therefore be a logi c a l conclusion for the forest policy of any country where the conditions previously outlined apply. During the transition period Government's responsibility w i l l be, to devise a policy which offers s u f f i c i e n t inducement to attract large capital investment, leaves ample scope for the smaller operator and maintains an element of healthy competition i n the industry. B r i t i s h Columbia appears to be doing this very successfully. Tenures similar to the Tree Farm Licence have already been introduced into Mexico, the U.S.A., B r i t i s h Guiana, the P h i l l i p i n e s and Tasmania. THE APPLICATION OF THE TREE FARM LICENCE IN KENYA Introduction There are several obvious s i m i l a r i t i e s betveen B r i t i s h Columbia and Kenya. The most important ones are: ( i ) The majority of forest land i s ovned by the Crovn and forest p o l i c y favours the retention of forest land under Crovn owner-ship. ( i i ) Forest policy has encouraged private enterprise rather than State investment i n manufacturing plants. ( i i i ) Economic and p o l i t i c a l conditions favour the establishment of large manufacturing units. (iv) Management of Crovn forests by the Government Forest Service has been handicapped by shortage of staff and funds. There are also some very obvious differences and those vhich are most pertinent to t h i s thesis are; (i) Unlike B r i t i s h Columbia, Kenya has no serious problem of trying to bring privately controlled lands under sustained y i e l d management. ( i i ) Forestry i n Kenya i s a far less important industry than i n B r i t i s h Columbia. It i s based on a local rather than an export market. 94. Protection forestry is given greater emphasis in Kenya. Adequate protection of water supplies is of particular importance. The bulk of the planting in Kenya is of short rotation species which show promise of a quick financial return. A r t i f i c i a l rather than natural regeneration is the rule and plantation establishment requires a heavy i n i t i a l capital investment. There is no open log market in Kenya and there are no in-dependent loggers. Kenya's present Forest Policy was defined in Kenya Government White Paper Number 87 (1957). Two points in this policy of particular significance to this discussion are those in which the Government has undertaken tot (i) Foster the conception of a mutually interdependent forest industry and integrate to the best advantage of Kenya the production, harvesting and utilisation of forest produce, by ensuring close co-ordination between a l l interests concerned in these aspects of the industry and, whenever opportunity occurs, to encourage industrial processes consuming forest products. ( i i ) Increase the ability of local industries to u t i l i s e process or adapt forest products for economic consump-tion primarily by fostering an economic environment conducive to private enterprise on which development must chiefly depend. ( i i i ) (iv) BACKGROUND INFORMATION Geography Kenya lies on the East coast of Africa and is traversed by the equator. The country covers an area of approximately 225.000 square miles. Kenya's neighbours are Ethiopia to the North, the Sudan to the North West, Uganda to the West, Tanganyika to the South and Italian Somaliland and the Indian Ocean to the East. Almost two thirds of Kenya consists of low elevation lands with low rainfall which are classed as desert or semi-desert. lands in the South West of the country most of which l i e between 4,000 and 10,000 feet in altitude. The climate of these highlands is cool and temperate and rainfall is sufficient to support a wide variety of agricultural crops. There are four main communities in Kenya: Africans, Asians, Europeans and Arabs, distributed approximately as under:-The bulk of the populace lives in the higher elevation Africans 6,000,000 Asians 160,000 Europeans 60,000 Arabs 6,000 Total 6,226,000 96. The African population consists of 87 different tribes many of whom have their own language and social customs* The degree of development of these tribes varies very widely; some like the Kikuyu are relatively advanced, others like the Turkana s t i l l very backward. At the present time the rate of growth of the African population is estimated at l i per cent per annum, and at this rate i t will double i t s e l f in 46 years. The Asian population i s mainly commercial. The European population consists of settlers, (approximately 3,000 families), c i v i l servants and those engaged in commerce. Economic situation Kenya's economy depends on agricultural produce which accounts for over 70 per cent of total exports. Over the last decade the most important exports expressed as a percentage of total export value of production have beenj-Commodity Percentage Coffee 34.7 Tea 10.8 Extracts of Wattle bark 8.8 Sisal 7.6 Maize 6.5 Hides and skins 5.1 Sodium carbonate 5.0 Cotton 2.7 Oil seeds and nuts 1.2 Pyrethrum 1.1 97 Commodity Percentage Gold 0.5 Timber 0.2 Meal and vbeat flour 0.1 Other 15.7 Total 100 per cent Rapid economic expansion in Kenya after the Second World War. combined with similar expansion in those countries consuming Kenya's exports, led to an increase in export production from approximately $15 million in 1945 to a peak of $75 million in 1956* Since that date, there has been a gradual deterioration in trade under the influence of the recent political instabilities. Kenya's greatest economic handi-caps are her lack of mineral wealth and the long r a i l haul from areas of production to the Coast (over 400 miles), which has an adverse effect on the timber trade in particular. The relative significance of the timber industry to the general economy is small compared with British Columbia. Forestry provides less than 5 per cent of the national income compared with over 40 per cent in British Columbia. The Forests The approximate area of forests reserved under Crown owner-ship equals 6,000 square miles and these cover approximately 2.8 per cent of the total land area. There remain a further 800 square miles of forest as yet unprotected, of which 700 square miles l i e within the tribal reserve of the Masai tribe. For political reasons, no Govern-98. ment protection of these forests has been possible and they are rapidly being liquidated by uncontrolled f i r e and grazing. The forests vary widely in character depending on altitude and r a i n f a l l ; the most significant group is that classified by Wimbush, (Wimbush 1950), as "Mountain Conifer" which he described as the largest area of natural conifers in Africa. These forests contain two coni-ferous species,Podocarpus aracilior and Juniperus procera (East African Pencil Cedar), which have sustained the timber industry over the last f i f t y years. The forests also contain many secondary hardwoods some of which have been successfully marketed both locally and overseas. Brief History of the Forest Industry Early settlement White settlement in Kenya has a l l taken place since 1888. Prior to that date the East and Central parts of Africa were virtually unexplored and were occupied by African tribes whose only previous contact with the rest of the world had been through various Arab slave traders who from time to time had visited the interior of the country on slaving expeditions. In 1888, a Royal Charter was granted to the Imperial East Africa Company authorising i t to take over control of the area now known as Uganda and Kenya, with a view to developing the country and abolishing the slave trade. In 1895, control of this company was taken over by the British Government. In order to open up the interior of East Africa for economic development, the construe-99. tion of a railway was started from the coastal port of Mombasa in 1895 and this reached Kisumu, a small town on the shores of Lake Victoria* by 1901. During the construction of the railway i t was realised that much of the unoccupied land in the interior was suit-able for agricultural settlement and the British Government actively encouraged pioneer European farmers to take up land. By 1910 a considerable influx of settlers had taken place and small towns ap-peared throughout the interior. The capital of the country was established at Nairobi in 1908. As early development proceeded, a local Government was formed with various administrative and technical branches of vhich the Forest Department was one. The f i r s t task facing the Forest Department was the exploration, demarcation, and preservation of the forests against their further destruction by fire , grazing and cultivation. This work proceeded steadily from 1903 on-wards; by 1930, 4,000 square miles had been reserved as Government or local Government forests and as already mentioned, this figure had increased to 6,000 square miles by 1960. Early development of the sawmilling industry As agricultural development increased, demands for timber resulted in the construction of the f i r s t sawmills. Fitsawing had been commonly used on many farms to meet small local markets and s t i l l is used in isolated areas, but in general, pitsawing methods cannot cope with large markets and their use is strictly limited. 100. Logging of the indigenous forests during the early years was not as d i f f i c u l t as in British Columbia, mainly because of Kenya's easier terrain. Nevertheless, Kenya suffered the big disadvantage of poor timber transport routes. Waterways, railways and good motor roads were almost wholly lacking and logs had to be extracted on ox carts. The single railway line to the Coast charged high freight rates and has always been a limiting factor to the building up of an export trade. The Government, anxious to encourage the establishment of a sawmilling industry, awarded several long term licences to sawmilling firms. These licences allowed operators to remove timber from their concessions in clear felling coupes, or by controlled selective logging. The Grogan licence awarded in 1912, expired in 1958 and two others (Meru and Bonser), probably due to an oversight, had no expiry date at a l l . Royalties, (stumpage rates), were fixed at very low levels in order to encourage long term investment. Unfortunately these licences did not result in particularly efficient management and because of this and Government's inability to increase Royalties a certain prejudice developed against the awarding of further long term licences. By 1916, timber demands had increased sufficiently to justify the opening up of further areas and more licences were awarded, but most of these were for shorter periods. In 1916, total round log sales equalled 447,000 cubic feet, and by 1925 this had risen to 1,288,000 cubic feet. The Government took no part in extraction and its policy has always 101. been to encourage the timber industry to develop through the medium of licensed private enterprise operators, rather than by the establishment of State owned manufacturing plants. The two main timbers extracted were Podocerpus ^racilior and Juniperus procera. The former is a general purpose timber of medium weight and good working properties, the latter is a very durable soft-wood which has properties very similar to Western Red Cedar. Since no strict control of cutting vas applied to the various licences issued, and because local demands vere s t i l l f airly limited, i t vas not long before the savmillers began to explore the possibilities of exporting timber. The indigenous logs being cut vere large in size, (the best old growth trees exceeded 100 feet in height and 8-10 feet in diameter) and only the best specimens were being cut. In consequence, long clear lengths of good quality timber were available for export and by 1924, a limited export trade of approximately 200,000 cubic feet per annum had been built up vith the United Kingdom and other European countries. In recent years the quality of indigenous logs has declined. Betveen 1924 and 1930, European settlement increased rapidly and the demands for timber encouraged the establishment of many nev mills. In 1929, vhen the world vide slump vhich had affected the British Columbian timber industry reached Kenya, the mills found themselves in serious competition and in their ovn interests, banded together to form the East African Timber Co-operative Association, vhich allocated market 102. quotas to its members, and controlled timber prices. This association has had a successful history, standing the member mills in good stead during the lean pre-war years and placing them in an extremely strong position during the war when there was an enhanced timber market. Throughout the period 1929-1961, approximately 50 per cent of the saw-mills in the country have belonged to this association. Reforestation As exploitation of the indigenous forests proceeded. Forest Department policy became more concerned with the replanting of logged areas. Natural regeneration of the desirable coniferous species does not readily establish i t s e l f . The matrix of hardwoods in which the two important conifers grow, contains very few species of economic importance and in logged areas a vigorous undergrowth of commercially valueless scrub similar to the Salmonberry of British Columbia, rapidly invades the site i f not replanted. In very few areas do the two main coniferous species form more than 30 per cent of the crop and on an average basis for the whole country, the commercial timber yield from indigenous forests does not exceed 500 cubic feet per acre. With this background, the Forest Department concentrated on a r t i f i c i a l replanting using f i r s t of a l l , the two coniferous species Podocarpus and Juniperus and at a later stage, various introduced exotics. It was discovered that the growth rate of the indigenous species was infinitely slower than that of the exotic species; the average rotation 103. of Podocarpus would be approximately 80 years* whereas similar volumes of timber can be obtained from the most commonly used exotics i n 25 to 30 years. An important difference between the forests of Kenya and B r i t i s h Columbia i s that, those of the former occupy extremely f e r t i l e land. This?together with the excellent climatic conditions i n the High-lands} which have no winter and two growing seasons} make i t possible to use the fast growing Cypresses and Fines of Mexico and C a l i f o r n i a to extremely good advantage. Over the course of the la s t 50 years) i t has been found that} a rotation of 30 years for timber crops i s possible and that this w i l l produce a crop of trees with an average breast height diameter of 18" and a volume of approximately 6)000 cubic feet.per acre. The species most commonly planted have been Cupressus macrocarpa, Cupressus  lu s i t a n i c a , Pinus radiata, Pinus patula, and Pinus e l l i o t i i . Up to December 1961) approximately 150)000 acres of softwood plantations had been established. On the local market) exotie softwood timber i s gradually replacing indigenous coniferous timber. Table 3 gives de t a i l s of timber sales over the period) 1951-1960. TABLE 3. COMPARATIVE STATEMENT OF TIMBER SOLD IN TONS OF 50 CUBIC FEET TRUE. 1951-1960 Source: Kenya Forest Department Annual Report 1960 pp. 51. Total Year Podo Cedar Cypress Pines Others » ? * a l . Hardwoods Softwoods J r Softwoods and Hardwoods 165,713 179,465 156,649 182,448 184,498 168,990 147,478 146,191 138,347 151,809 1951 82,792 28,169 19,913 - 477 131,351 34,362 1952 78,126 45,860 20,388 - 251 144,625 34,840 1953 80,863 30,486 19,756 - 591 131,696 24,953 1954 93,559 37,172 27,524 - 866 159,121 23,327 1955 89,197 39,406 29,645 1,115 1,141 160,504 23,994 1956 81,634 31,180 32,260 1,450 40 146,564 22,426 1957 66,015 17,642 34,137 3,225 38 121,057 26,421 1958 66,727 22,959 28,732 1,557 247 120,222 25,969 1959 62,749 21,221 27,247 4,224 244 115,684 22,662 1960 66,423 21,859 31,146 2,664 6 122,098 29,711 104. The "ShambaM system One of the biggest factors in favour of a large planting program has been the very lov cost of plantation establishment. A "Shamba" system of afforestation is used, which entails the voluntary cultivation of forest land for agricultural crops by African families before the trees are actually planted. Prior to European settlement in Kenya, the natives practised a form of shifting cultivation which involved clearance of an area of forest land by cutting and burning, followed by the planting of crops such as maize and beans. Once the f e r t i l i t y of the site had been exhausted, families moved on to another area. The Forest Department was able to make use of this natural custom by offering areas of logged over land to native families for cultivation for a period of two to three years, after which trees were planted in the cleaned land. Under this system, weeding costs are virtually negligible and the trees benefit from the advantages of a clean site and the shade protection of a maize crop in the f i r s t year of establishment, a factor of importance in a tropical country where soil temperatures of unshaded land are very high. In addition to the establishment of timber plantations, an extensive planting program of fuel species was undertaken in order to meet both domestic and railway demands. Eucalyptus spp. were mainly used and by 1950, approximately 20,000 acres of plantations had been established. During recent years, fuel demands have fallen off very rapidly with the introduction of cheap electric power from the Owen Falls dam on Lake Victoria in Uganda, and since the decision of the Railways Administration to introduce diesel locomotives. Eucalypts have been suggested as a possible source of raw material for a pulp m i l l . Expansion of the timber trade. Local and export demands for timber have steadily increased since the 1920*s and reached a peak during the Second World War when heavy shipments of timber were made to the Middle East. Log sales in 1945 totalled 5,826,750 cubic feet. After a slight drop, log sales rose steadily again until 1955 when they totalled 9,224,900 cubic feet, since that date, the political situation has resulted in a steady decline of building activity, and sales have decreased. In sharp contrast to British Columbia, Kenya's timber trade has been built up around a local market which has been fair l y consis-tent in demand and not very selective in quality. The export trade has expanded very slowly. In 1960 exports totalled 330,294 cubic feet of sawn timber representing approximately 15 per cent of total production. Since 1945, the number of operating mills has increased from 41 to 67. These are mainly operating on revised licences dated from 1951, the majority of which were issued for 10 or 15 year periods. The period of each licence was determined on the basis of the remaining volume of merchantable timber in the various concession areas. As previously noted, there has been a marked trend towards the wider use of exotic softwood timber during recent years, as produce from 106. plantations has taken a steadily increasing share of the market. The majority of accessible old grovth indigenous forest areas hare now been worked over* and the expected yield from exotic plantations is more than sufficient to supply present demands. Future demands Estimates of future wood consumption have been made on several occasions since 1945. Reports by Hiley,(1950) Craib, (1956) and an unpublished Government Working Party Report on the Craib Report, are the basis for the Forest Department's present planting program which aims to produce approximately 300,000 acres of plantations by 1980. This will allow for a local consumption of timber and timber products of 36,000,000 cubic feet (9 million population x 4 cubic feet per head) plus a surplus of approximately 26,000,000 cubic feet per annum for export to Uganda and overseas. Plantations are being established in units of 10,000 acres, each with an expected sustained yield of 2,000,000 cubic feet of round logs per annum which, on the basis of South African experience, is the volume of timber required to support a mill of minimum economic size. Two of these units will reach maturity in the next five years. The aim is to plant up each unit as rapidly as possible, since South African experience has shown that small volumes of exotic softwood thinnings are d i f f i c u l t to market but, i f these can be produced in sufficient quantity and concentration, i t is possible to establish large manufac-107. taring plants designed especially to cope with this type of material* Other wood using industries There are as yet. no pulp or board mills in Kenya* and there is only one1small paper mill which uses waste paper as i t s raw material. A survey carried out by Dr. Julius Grant (1950), of the possibilities of establishing pulp and paper mills in Kenya, indicated that a small plant with an annual production of 15,000 tons of kraft pulp wrapping paper and general purpose printings and writings would be economically viable and would meet the internal demands of the East African territories. The estimated cost of such a plant would have been approximately $4,500,000 in 1956* Mainly because of the political instability of the last few years, no investment has taken place in this project. Kenya continues to rely on imported pulp and paper products, the annual value of which exceeds $7,500,000* Various unpublished surveys have been made of the possibilities of establishing plywood, hardboard and particle board plants in Kenya* These indicate that available raw material or internal de-mands for these products' are as yet, insufficient to justify the establish-ment of local manufacturing plants* The introduction of pulp and board plants would greatly help to improve the efficiency of the sawmilling industry* At present, approximately 50 per eent of the total intake of round timber to a l l mills is wasted and no economic use exists for this mill residue* In addition, there i s no market for the consider-able volume of small sized plantation thinnings which are at present 108. felled and often left to rot on the ground. This applies to most of the material between 6" and 8" in diameter and to a l l the material of less than 6" in diameter. THE SAWMILLING INDUSTRY The sawmills In I960, there were 67 sawmills in Kenya, of which 37 held concessions in Crown forest reserves and the remainder purchased their timber through public auctions of Crown timber or from private forest lands* The approximate total consumption of round logs from Crovn forest reserves in 1960, vas 9 million cubic feet* Consumption of logs from private lands is not recorded. A survey by the Forestry Section of the Food and Agricultural Organisation in Rome is due this year. This v i l l include figures of approximate log consumption from private lands. The sawmills are mainly small, only 6 consuming more than 250,000 cubic feet of logs per annum. The majority of mills outside forest reserves are small family concerns with an annual consumption of less than 40,000 cubic feet. The largest indigenous mill has an average annual intake of approximately 500,000 cubic feet of logs and the largest exotic mill consumes a similar quantity. A l l the mills are operating on a one shift per day basis. Logging methods Felling and bucking is done with hand saws. Axes are s t i l l used for small sized plantation material in some areas. Several firms have experimented with power saws but because labour is relatively un-110. skilled, i t has been found d i f f i c u l t to prevent breakages and to ensure adequate maintenance. A number of firms have purchased power saws but later reverted to hand felling and bucking methods. In indigenous forests, only merchantable species are removed and these are erratically distributed. Unlike British Columbia, there has been no need to ensure that adequate seed trees are left behind or to control slash burning. Areas logged over are being a r t i f i c i a l l y replanted with faster growing exotic species and under the "shamba" system previously mentioned, the commercially useless species left behind after logging are felled and burned by the families to whom the land is allocated for agricultural cultivation. Some of the residual material produces good charcoal and many cultivators sell this to local contractors. In softwood plantations, both thinnings and clear fellings are removed. The industry has in general, refused to accept any log of less than 6" top diameter on the grounds that such material cannot profitably be converted into lumber. There is only a very limited market for poles and in consequence, the f i r s t thinning is carried out by Forest Department personnel and either burned, or left to rot in plantations, depending largely on the availability of funds. Logs over 6" top diameter which are felled and bucked by mill labour, are usually skidded out by tractor or oxen. The larger mills are mainly using Caterpillar tractors. In the majority of present operating areas, there is an ade-quate dry weather road system established either by the Forest Department or by the mills themselves. Logging and trucking is possible for at least 9 months of the year in most areas and in some plantation areas* a l l the year round. Logs are transported by petrol, or diesel trucks and tractors and trailers. In the majority of cases, a relatively short haul is involved, (up to a maximum of 15 miles), but a few mills situated outside forest reserves have transported logs over distances of up to 100 miles, depending largely on the species and quality of log. No river transportation of logs is possible and none of the mills use log ponds. L i t t l e log sorting is done and most mills take the logs as they come. Sawmilling Sawmills are primitive by North American standards. Some mills are equipped with log l i f t i n g gantry and block tackle apparatus, but in many, the haulage of logs from yards and mounting of logs onto carriages, is done by manual labour. Many mills employ old "Lane" type circular saw breakdown machines. A few of the more modern mills are using band or gang saws. Most are steam powered, a few use diesel power and one has its own electric generating plant. Far more labour is employed than in more advanced countries mainly because labour is cheap. Plant layout is generally poor and in many mills there is a bottleneck between breakdown and resawing machinery. There are only a few planing mills and kiln seasoning is rare. 112. Sawmill licences As noted earlier* the present licences were originally granted to allow operators the right to remove a specified volume of timber re-lated to the remaining merchantable volume within an area. Some of the later licences issued have also given cutting rights in softwood plantations. A l i s t of the licences in existence in December 1960 is given below: Forest Reserve Sawmills Date of Expiry of Current Licence Mt. Elgon Suam 30.6.67. Mt. Elgon 30.6.67. Kakemega Rondo Timber Co. 31.12.62. Kakemega Sawmills 31.12.62. Nandi Bhangra Sawmills 31.12.62. Elgeyo Algao Sawmills 31.1.72. G. Gopal & Sons 31.12.62. Kaptagat Kaptagat Sawmills 31.12.77. Kipkabus Hans Raj 30.4.63. N. Tinderet Buret 31.5.62. Singhalo 31.3.62. Timsales Timboroa 1.7.72. Timsales Station 1.7.72. Highland Sawmills 31.3.62. Sikh Sawmills 31.3.62. 113. Forest Reserve S. Tinderet W. Mau E. Mau Mt. Londiani Bafaati Marmarnet and 01 Bolossat N. Kinangop S. Kinangop and Kikuyu Escarpment S.W. Mt. Kenya W. Mt. Kenya N. E. Mt. Kenya Sawmills Krishna Kibleso W. Mau Sawmills Mt. Blackett Sawmills Sokoro Sawmills Amalgamated Sawmills (Mariashoni) Njoro A. S.M. Ltd. Maji Mzuri Bonser African Sawmills Ltd. Fanara Marmarnet Kenya Pencil Slat Co. Holyoak Uitam Singh B. E.A. Sawmills Yacob Deen Keith Timbers Kenya Sawmills Nanyuki Sawmills Ontulili Sawmills Wason Timber Co. Date of Expiry of Current Licence 31.12.62. 30.12.62. 31.12.62. 31.12.63. 31.12.63. 30.6.72. 31.12.72. 31.12.77. 31.12.66. 31.12.62. 31.12.63. 31.12.72. 31.5.62. 31.12.63. 31.12.63 31.12.63. 31.12.62. 31.7.67. 31.12.67. 30.6.67. 30.6.67. 1.7.72. 114. Of a total of 37 licences. 21 expire in 1962 or 1963, 7 in 1966 or 1967, 7 in 1972, and 2 in 1977. These licences are essentially allocations of timber. In most cases, the object has been to give the operator security of tenure and to attract i n i t i a l capital investment. The licence specifies the volume of timber to be eut by species, methods of felling and extraction permitted and contains clauses to protect vater supplies and to safeguard against soil erosion. Timber is sealed in the forest at the time of felling, or in the mill yard, depending on the circumstances. Scaling is done by Forest Department Officers i who record merely the length, girth and defect in each log, the actual computation:of volumes being carried out by a centralized accounting office in Nairobi. For some species, an average defect has been worked out and agreed upon by both the Forest Department and the Industry and an automatic deduction for defect is made. In other eases, the average defect has to be estimated by the scaling officer and agreed upon by a mill representative. Royalty rates are calculated as an agreed per-centage of selling price of rough lumber and revised annually. Rates vary by species and for plantation softwoods* vith the size of log. The licence permits the operator to establish mill buildings and necessary housing on sites approved by the Forest Department, but on expiry of the licence* a l l such buildings plus mill equipment have to be removed from the area within a specified time. The licensee is permitted use of Forest Department roads and has to share maintenance costs. Any extra roads required for extraction purposes, have to be laid out vith 115. Forest Department approval and constructed at the licensee's expense* The licensee is obliged to provide labourers for f i r e fighting i f necessary* Subcontracting is not permitted without prior approval and various penalty clauses are also included* A deposit appropriate to the average monthly cut is also payable* The licences used in Kenya* differ basically from British Columbia's Tree Farm Licence i n that* the licensee is not required to assume any obligation for forest management* a l l of which i s carried out by the Government ForeBt Department* There is therefore no reimburse-ment for approved forestry costs* No allowance is made in Royalty rates for cost of road construction* mainly because a fa i r l y adequate network of Forest Department roads already exists* There is no assess-ment for stumpage Lrates. according to "logging chance"* mainly because operating conditions are fai r l y uniform* An allowance i s made however* in cases where a mill i s situated a considerable distance from railhead* a deduction from Royalty being permitted at a standard rate per mile* for hauls i n excess of a specified limit* Present condition of the sawmilling industry The Kenya sawmilling industry is in general, badly organised undercapitalised and inefficient* In a report on the industry written in 1959, by the Forest Department Utilisation Officer* 9 mills were classed as "Very Efficient", 16 as "Efficient" and the remainder as "Poor". The bulk of this report was regarded as confidential and the 116. material in i t cannot be reproduced but i t can be noted that* a l l aspects of the industry were considered* including productivity, size of capital investment, type of machinery, plant design, technical s k i l l of staff and marketing organisation* The main reasons for the present condition of the.industry are discussed in the following sections* Reliability of the local market and lack, of outside competition. A dependable local market and lack of outside competition en-couraged a certain complacency in the industry, particularly during the war years* The market has not been particular as to quality and there has been l i t t l e incentive to install better machinery or drying kilns* Lack of outside competition is partly the result of the long r a i l haul to the Coast, which has both aeted as a deterrent to the building up of an export trade and protected local mills from outside competition* Poor quality logs For many years the industry cut indigenous logs containing a high proportion of defect* Beeause mills have been mostly small and undercapitalised their equipment has often been unsuitable for dealing with this type of material* For a variety of reasons to be discussed later, the exotic softwood plantation logs now coming forward in increasing quantities also often contain a high proportion of defect* T 1 Shortage of capital Kenya is a relatively underdeveloped territory and capital im scarce. The small mills in the country have neither been able to generate sufficient capital from their own operations to justify in-vestment in expensive and more efficient machinery, nor to attract out-side local or foreign capital. It has also been alleged by Industry that, present Royalty rates are too high to enable mills to make a reasonable profit. Lack of an outlet for waste The absence of pulp, board and other residue consuming in-dustries has prevented mills from making the most effective use of raw material. As previously noted the percentage of defect and waste from both indigenous and exotic logs is high and a l l such material is presently burned or dumped. Insecurity of tenure Industry has complained that the present short term tenures hold out insufficient inducement to capital investment in new machinery, a criticism which is particularly valid at the present time, when 21 of the existing licences are due to expire in 1962 or 1963. Again this firm is not interested in capital expenditure until they have greater security of tenure. A lot of the third grade mill-run timber could be profitably converted into box shooks were the machinery available. (Annual Report of Elburgon Forest Division 1958.) Security of tenure and a more stable political situation, will probably be two of the most important factors affecting the industry's 118. future development: Thus whatever happens, the industry must seek capital from outside some time during the next 10 or 12 years. Investors are extremely sensitive and there are plenty of opportunities elsewhere. They will not put up large sums to be at risk over long periods unless they believe the Government will follow settled policies and that their opera-tions will not suffer undue interference* Mature consideration will have to be given to the induce-ments to be offered to, or the restraints to be imposed upon, operators in the various branches of the industry. The paramount problem Kenya has to solve is to secure the development in each branch of the industry of units of optimum economic size, adequately planned and equipped, each covering a portion of the field and sustained by long term agreements giving continuity of operation and supply of raw material. (Benson 1967) Lack of co-operation between Government and Industry In the past, there has been a tendency for the Forest Depart-ment to confine its interest to silvicultural matters and to pay too l i t t l e attention to the affairs of the sawmilling industry. It was believed that, i f the Government produced adequate supplies of raw material, an industry capable of consuming this raw material would automatically develop* This attitude is one commonly held by many British trained Foresters. The emphasis in most colonial territories has been on reservation of forests and their protection from burning, over grazing and cultivation. The industrial aspects of forestry have been given far less emphasis in British University training than for example, in North America. As a result, there is a general lack of understanding of the basic economic principles which govern the establish-119. ment of tbe manufacturing industries* An illustration of this vas given in an F.A.O. report by Huber, (F.A.O., 1953), vhen commenting on high mountain extraction problems in India* vhere current forest policies remain largely, as laid dovn by the former British forest administration. Some of the dif f i c u l t i e s being encountered, vere attributed to the preoccupation of Forest Department offic i a l s vith silvicultural and other management matters and their neglect of timber extraction problems. Timber vas being sold in small lots and'no incet^ive was given to operators to establish themselves on a more permanent basis. A somevhat similar situation prevails in Kenya, vhere a l l the present forestry o f f i c i a l s are British trained and vhere, in addition, the experience of the Grogan, Meru and Bonser concessions, has made forest o f f i c i a l s adopt a cautious attitude towards the granting of long term tenures* A result of this is that, the Forest Department is some-times accused of being insufficiently concerned about the industry's problems: The present policy does lead to a lack of liaison betveen the grower and the user each tending to remain in his own watertight compartment* The main need seems to be to integrate the two in a common policy, which of course may vary from time to time according to the needs of the moment. It would however be unreasonable to suggest that, the attitude of forestry officials has been a major cause of the sawmilling industry's present problems. Nor could British Universities be blamed 120 for placing emphasis on those subjects which have in fact, been of funda-mental importance during the early years of forest development in most colonial territories. The answers to some of Kenya's economic problems have only become apparent within the last decade and Kenya is fortunate in being able to draw on the experience of countries such as British Columbia and South Africa in formulating her future policies. Irregular supplies of raw material The sawmilling industry has made frequent representations to the Forest Department that continuity of raw material supplies is essential i f mills are to be operated efficiently. The criticism refers to planta-tion timber supplies: Recently certain thinning programs have been issued by the Forest Department which show wide variations in the volumes offered to exotic softwood mills from one year to the next. A program devised in such a manner has obviously been compiled without regard to the economic consequences of operating a mill spasmodically* It is absolutely essential that Foresters should appreciate that capital invested in a mill must be kept occupied every year* and preferably at an intense level of operation. Interest charges are not waived by bankers and investors simply because the thinning program has been compiled to give spasmodic operation* Only regular and in-tense operation of mills can give costs sufficiently low to enable Kenya to export in the face of com-petition from countries more advanced in the appli-cation of common sense business practices to the utilization of their timber resources* (Henson 1957) There are several reasons why this variation in thinning programs has occurred and some of them v i l l be discussed later. One reason has already been discussed, i.e., the tendency of forestry off i c i a l s to think in terms of silvicultural rather than industrial requirements. Efficient sawmills Despite the weaknesses of the industry previously discussed, there are several very efficient sawmills in Kenya. A number of saw-millers possess a sound technical knowledge of the local operating conditions and are anxious to create a more efficient industry. Some have been able to v i s i t sawmills in Sweden, South Africa, New Zealand and other countries, and some of the techniques observed, have been successfully incorporated into local mills. An exotic softwood mill in the North Tinderet forest reserve, was acknowledged by a group of visiting experts from the U.S.A. and Canada, as being of sound design and as modern as many similar sized mills in Eastern Canada, where coni-ferous logs of comparable size are being milled. Considerable thought has been given to the most suitable type of mill for dealing vith the quantity and quality of softvood material vhich will become available from plantations over the coming decade. Details of a proposed mill have been described by Keen (1961). The capital cost of such a mill vould exceed $600,000. Summary To summarize, the immediate objectives of the sawmilling in-122 dustry are: (i) To maintain* and expand local markets* in the face of the present political depression, and i f possible, to increase the export market* ( i i ) To attract investment capital. ( i i i ) To eliminate inefficient concerns and establish large and more efficient mills, with lower production costs* (iv) To find an outlet for waste material* (v) To secure the co-operation of Government over matters such as tenure policy and to encourage a wider under-standing among forestry/ o f f i c i a l s of the industry's basic requirements* FOREST MANAGEMENT Despite the emphasis i n i t s declared Forest Policy on Protection forestry, the Kenya Forest Department i s heavily committed to the more commercial business of softwood growing. The softwood program which i s proceeding at an annual planting rate i n excess of 12,000 acres, consumes over 75 per cent of the Department's average annual budget of approximately $1,500,000. The Department has encountered several d i f f i c u l t i e s i n carrying out this program . This section discusses these d i f f i c u l t i e s . Treasury control The Kenya Forest Department i s financed by an erratic annual treasury budget, and i t s freedom of action i s limited by numerous treasury regulations. Under these circumstances i t has sometimes been d i f f i c u l t to ensure e f f i c i e n t forest management. The impact of treasury control on forest management has been discussed i n some det a i l i n a directed study (Spears, 1962) and i t i s not therefore proposed to repeat this discussion. A brief summary of the more important points may be useful. The main problem has been that of persuading the Government to allow s u f f i c i e n t funds and staff to ensure sustained forest develop-ment. The situation has not improved between 1925 and 1962 and was summarised up to 1953, i n a statement by the Chief Conservator of 124. Forests i n the Forest Department's Annual Report for that year: Ever since the Department vas f i r s t constituted i t has struggled to cope eff e c t i v e l y v i t h a task far too great for i t s limited personnel* Very considerable expansion, after the var s t i l l did not make up the leeway due to the annually i n -creasing planting programme and to the snow-balling of plantation work which followed i n i t s wake* There is today an accumulated backlog of work of this kind to cope with which new measures must be sought. Partly as a result of inadequate finance and maintenance, many plantations are understocked, unpruned and under thinned. This has lowered the quality of softwood timber, decreased the Government's revenue return from plantations and made i t d i f f i c u l t to ensure a sustained supply of logs to sawmills. The effects of treasury budgeting on forest management were s u f f i c i e n t l y serious for a Committee to be set up i n 1951 under the chairmanship of W. E. Hiley i n order to investigate the problem. The main conclusion of this Committee was that an independent Forestry Commission should be created to handle forest development: The whole development of the colony's forest estate i s a large commercial undertaking and an appropriate organisation i s required to run i t . Money i s spent in order to produce revenue and although i n forestry, returns are long deferred and i t i s d i f f i c u l t to associate particular income v i t h particular expendi-ture, achievement should be d e f i n i t e l y related to costs. For this reason we consider that the ac-counts of the Department should be kept on a com-mercial basis. Further, the Department is engaged i n s e l l i n g i t s products and, as i n any commercial undertaking, i t must endeavour to s e l l them i n as 125. favourable a manner as possible* The present, system under which its revenues are merged in the general revenues of the colony* while the Department is dependent on an annual vote to cover i t s expenditure* is unsuited to the requirements of such an undertaking* (Government of Kenya 1950. pp. 14 ). The Committee recommended the formation of a Forestry Commis-sion* to be, organised as a self financing business concern* and* sub-ject to certain limitations* able to control i t s own.expenditure* It also recommended that the Commission be authorised to borrow money for the capital completion of the forest development program. The Government did not accept the recommendations of the Hiley Committee, mainly because i t was considered undesirable for one particular Department of Government to be placed in a position where i t would be able to control Government revenue. The decision vas probably influenced by the fact that forestry in Kenya has a relatively lov budget priority, i t s annual budget, as previously noted, representing less than 3 per cent of the average total annual Government expenditure. Since 1951", the Forest Department has continued to rely on an erratic treasury budget and forest management continues to be adversely affected. Other problems vhich originate from the treasury budgeting system, are those of ensuring complete utilisation of funds, the in-f l e x i b i l i t y of vote allocation, the general restrictions relating to handling of Government funds* stores, vehicles, machinery and equipment and the effect vhich the system has on the incentive and morale of fie l d 126. s t a f f . The problem of ensuring closer u t i l i s a t i o n of funds i s mainly the result of a centralised accounts branch and the distance of the majority of Forest Stations from the Head Accounts Office, which means delays of up to a month, i n accounts correspondence. Because every Forester i s personally responsible for any over expenditure, there i s a tendency for reserve balances to be held back at every Forest Station; the effect of this i s the Department has returned as much as 8 per cent of i t s already limited budget to general revenue at the end of a financial year. No authority i s granted to F i e l d i t a f f to transfer funds from one expenditure vote to another and on many occasions, work has been held up because of the time taken to obtain permission from Head o f f i c e to do t h i s . General treasury r e s t r i c t i o n s are also i n -f l e x i b l e and cause a considerable loss of time, excessive paper work and wasted e f f o r t . The combined effects of these d i f f i c u l t i e s are i n e f f i c i e n t forest management and loss of incentive and morale among F i e l d Staff. In many cases, an inevitable loss of output occurs. Many other countries apart from Kenya have experienced similar financial d i f f i c u l t i e s . The effect of treasury budgeting i n B r i t i s h Columbia was discussed by Sloan (1957). In general, there are three methods by which Governments have overcome the problems (i) By the establishment of Forestry Commissions, ( i i ) By the setting up of special Forest Funds ( i i i ) By delegation of responsibility for forest manage-ment to private enterprise, as has been done, for example, i n B r i t i s h Columbia* It has been already noted that forest development on Tree Farm Licence lands i s financed d i r e c t l y from stumpage revenues without them being paid into the Government's general revenue account* There i s therefore no r i s k that a proportion of such revenue w i l l be diverted to some purpose other than forestry. Continuity of staff In common with other Government Departments, the Forest Department has found i t d i f f i c u l t to maintain continuity of staff at i t s Forest Stations. The problem i s a result of frequent leave periods retirements, resignations and i n some cases, a deliberate policy of ensuring that Forest Of f i c e r s , as C i v i l Servants, do not become too familiar with the local community. The result of frequent staff changes i s that an o f f i c e r seldom becomes r e a l l y familiar with the problems of his own particular D i s t r i c t and forest management suffers accordingly. The problem i s one common to many countries and i s an almost unavoidable weakness of Government forest management. The p o l i t i c a l factor A more recent problem of Government forest management i n Kenya 128. has been the effect of the recent p o l i t i c a l disturbances and i n particular, the effect of the current p o l i t i c a l changes on staff recruitment policy. Up t i l l 1952, the majority of Foresters were either University or Forester School trained expatriates. Kenya had no local Foresters Training School and training was obtained i n either Great B r i t a i n or South A f r i c a . In recent years, p o l i t i c a l pressure has forced the Government into a policy of accepting a greater number of local personnel and many of these have had no forestry training at a l l . In 1960, out of a total Forester staff of over 70, less than 30 had attended a Forester's Training School. A Foresters Training School has now been opened and intensive efforts are being made to t r a i n as many local people as possible i n preparation for a possible change i n Government. In b r i e f , i t appears inevitable that forestry w i l l continue to suffer from a lack of experienced Foresters for several years to come. In course of time, there i s no reason to doubt that the situa-t i o n w i l l restore i t s e l f as local people acquire more experience. Summary Despite the d i f f i c u l t i e s previously described, the Kenya Forest Department has established a large acreage of plantations, plus an adequate road system and necessary staff housing and o f f i c e s . I t would be incorrect to suggest that the maintenance of a l l plantations has been neglected, that management i s always i n e f f i c i e n t and that the 129. morale of a l l Field staff is low. The objective of the preceding paragraphs has been to illustrate the difficulties of ensuring efficient management, when forestry development is tied by an annual treasury budget and f l e x i b i l i t y of management restricted'by numerous Govern-ment regulations. In practice, forest management in Kenya is probably as good as can be achieved under the prevailing system. The advantages of vertical integration of forest and industrial plant management vere mentioned when discussing the Tree Farm Licence. Under the prevailing system in Kenya these advantages cannot be realised. FUTURE TIMBER DISPOSAL POLICIES The Kenya Government, as owner of the main supplies of rav material for the forest industry, has five main alternatives open to i t t (i) To dispose' of a l l Crovn timber by public auction ( i i ) To avard licences to private enterprise concerns, Government retaining the responsibility for forest management* ( i i i ) To avard licences to private enterprise concerns i and, in addition, to delegate to these same con-cerns the responsibility for forest management. (iv) To dispose of Crovn timber by outright alienation* (v) To establish State manufacturing plants* It i s not essential that Government commit i t s e l f to any particular one of the above alternatives, in practice, a combination, of tvo or more may be desirable* In discussing these alternatives, i t should be recognised that, a sound timber disposal policy v i l l not automatically ensure a healthy and efficient sawmilling industry* The biggest problems the industry have to face are: those of surviving in the face of a depressed market, the attraction of local and foreign capital and the establishment of more efficient mills* Nevertheless, i t is important that Government's timber disposal policy should be that which i s most l i k e l y to encour-age the establishment of an e f f i c i e n t industry and that the principles on which this policy i s based should be clearly recognised. The main objective of this section i s to discuss these p r i n c i p l e s . Public Auctioning As noted e a r l i e r , the main advantage of disposing of Crown timber by public auction i s , that i t completely relieves Government of the responsibility of deciding which of several competing firms, should be allocated Government owned timber. I t i s also sometimes argued that because competition for raw material i s encouraged Govern-ment obtains a greater direct revenue. On the debit side, experience in other countries indicates that public auctioning of Crown timber, p a r t i c u l a r l y where small par-cels are concerned, may retard the establishment of large manufacturing plants. The experiences of Cyprus, Trinidad, India and B r i t i s h Columbia have been previous discussed. In Kenya, e f f i c i e n t conversion of the large quantities of softwood logs, which are becoming available as a result of the Govern-ment's softwood program, w i l l require the establishment of expensive and well equipped sawmills. A suitable m i l l designed by Keen (1961), entails capital outlay of approximately $600,000. I t i s unlikely that an investment of this size w i l l be secured unless some assurance i s given over raw material supplies and i t w i l l be d i f f i c u l t to offer 132. such an assurance under a system of public auctioning of short term sales. Experience i n the U.S.A., Canada and elsewhere suggests that, i n general, large manufacturing concerns possess substantial advantages over smaller operators and that the long terra trend i s for such firms to gain control of most of the available raw material. Even where attempts have been made to protect the smaller operator, as for instance by the establishment of Public Working Circles i n B r i t i s h Columbia, there i s a tendency for these small operators to band together i n an effort to r e s t r i c t outside competition and to amalgamate i n order to keep pace with larger firms. The problem which the Kenya Government has to face, i s that of defining a policy, which w i l l offer s u f f i c i e n t incentive to larger concerns to j u s t i f y heavy capital investment, leave ample scope for the smaller operator and ensure an element of healthy competition i n the industry. Unless i t i s decided to establish State sawmills, i t may be inevitable that, i n the long run, most of the raw material i n Kenya w i l l be controlled by a few large firms and competition for raw material greatly reduced. If this occurs i t may be necessary to ensure competition at the manufacturing level by use of anti-monopoly l e g i s l a t i o n . Public auctioning may be the best method of disposing of Crown timber which i s not allocated to large firms and par t i c u l a r l y for getting r i d of parcels of timber from small isolated forests such 133. as those on the Machakos h i l l s . Many such forests are situated i n f a i r l y heavily populated areas, which w i l l require a steady supply of timber. Here, the small e f f i c i e n t operator w i l l probably be able to remain i n business by virtue of his lower overheads and reduced trans-portation costs, although he may have to pay more for his raw material than the larger firms. As noted when discussing the future of smaller operators i n B r i t i s h Columbia, integration by such methods as the co-operative marketing of waste residues, w i l l help small operators to re-main competitive and i t i s very much i n the public interest that they should do so. Granting of leases to specific concerns, Government to retain the responsibility for forest management This has been the main method of timber disposal i n the past and i t is the basis of the future policy. tfe agree with Dr. Craib regarding the need to establish large mechanised m i l l s furnished with large and convenient blocks of plantation timber. As Dr. Craib states elsewhere, such m i l l s are much more economic. Their scale of operation permits the adoption of advanced logging, m i l l i n g and management techniques, which are quite beyond the capacity of small m i l l s a l l of which r e f l e c t reduced costs per unit of production. (Govern-ment of Kenya, Working Party Report on the Craib Report 1956) In a le t t e r to Kenya's two sawmilling Associations, dated August 1960, the Chief Conservator of Forests observeds 134. With greater dependence on the produce of the plantations, coupled with far greater concentration of production and improved road communications, i t i s apparent that fewer producing units w i l l be needed i n the future. The spreading of overhead charges over much larger volumes of production, w i l l also be the most effective way of restoring prosperity to the industry. An appreciable reduction i n production costs w i l l also be imperative i f Kenya timber i s to compete eff e c t i v e l y on world markets* The basis of the proposals which have been considered and approved by the Forest Advisory Committee, has therefore been that of the amalgamation of sawmilling firms* I t i s visualised that, for a start, the number of firms operating should be reduced by 50 per cent. The proposals made, were for amalgamation of firms on a geo-graphical basis and i t was suggested that, i f such amalgamations could be arranged, the Government would be prepared to offer firms up to a 20-year lease* The main advantages of this policy to Industry are the assurance of a supply of raw material at non competitive prices, security of tenure, and the chance to invest i n suitable machinery and equipment and to plan on a long term basis* The main advantages to Government are, that i t creates suitable conditions for the establishment of a well equipped, stable, and prosperous industry. This should result i n greater employ-ment, an expansion of Kenya's export trade and more effective use of the forest resource. Since a policy of allocation of timber to specific firms appears unavoidable, Government w i l l have to face the problem of de-ciding to whom such allocations shall be made. There are two a l t e r -!3o. natives: allocations by public auction or on merit. As noted when discussing the same problem i n B r i t i s h Columbia, a system of allocation by public auction protects Government from c r i t i c i s m , but may not ensure that the firm best equipped to do the job, actually gets the licence. Nevertheless, this principle has been used i n Eastern Canada and else-where, and may be worth consideration. Allocation on merit, has been the principle used to govern the award of Tree Farm Licences i n B r i t i s h Columbia, preference being given to established industry and p a r t i c u l a r l y to the pulp and paper industries, because of their a b i l i t y to contribute most to the economy. Regardless of the method of allocation, Government would probably be advised to define certain c r i t e r i a which a l l applicants should be required to f u l f i l before a licence i s awarded. For example, applicants could be required to establish a suitable manufacturing plant within a specified period. The plant should be capable of absorbing the present allowable cut from an area, provision for future expansion should be mentioned and i t should be made appurtenant to the lease. Applicants should also be required to submit evidence of their f i n a n c i a l resources, d e t a i l s of previous experience and a v a i l a b i l i t y of trained technical s t a f f . Because of the present p o l i t i c a l situation and depressed condition of the industry, i t may be that, there w i l l only be one applicant for an area. In this case, unless the applicant can meet those c r i t e r i a which Government would require of applicants i n more normal times, i t would probably be unwise to award a long term 136. lease* since this could result i n large areas of raw material being locked up by i n e f f i c i e n t operators. Where several applicants apply for the same area. Government could base i t s choice on an assessment of vhich applicant could most successfully meet the specified require-ments. Following the experience of B r i t i s h Columbia, i t may be i n the Government's interest to allow public hearings when such applica-tions are under discussion. If such a method of allocation i s un-desirable, a system of public auctioning may help to solve the problem. To summarise, the Government's present timber disposal policy appears fundamentally sound. The licences under consideration are similar i n principle to B r i t i s h Columbia's Tree Farm Licence i n that they offer Industry s u f f i c i e n t security of raw material to j u s t i f y heavy capital investment. Government's main problem may be that de-ciding to whom allocations of timber shall be made. A possible improve-ment on a straight 20 year lease, would be a 20 year lease renewable at say, 5 year intervals* In this way the licensee would always have at least 16 years security of tenure. The main limitations of the present policy are that i t leaves Government saddled with the financial and administrative res-p o n s i b i l i t y for forest management and that i t does not permit v e r t i c a l integration of forest and industrial management. Forest development w i l l continue to be affected by the limitations of Government manage-ment previously discussed. 137. Granting of leases to specific firms, Government to delegate the responsibility for forest management A lease of this type would be the equivalent of B r i t i s h Columbia's Tree Farm Licence and would be an extension beyond the Kenya Government's present timber disposal policy. The p o s s i b i l i t i e s of using such a lease have been discussed by members of both Government and Industry: Bearing i n mind what I have already written I do believe that there i s a very good case for the management licence system. It i s r e a l l y an extension of the Craib proposals and i s sound in conception by eliminating the d i f f i c u l t y of determining how the value of the raw material should be assessed and the expense involved i n doing so. Added to t h i s , an inde-pendent and c a p i t a l i s t i c enterprise of s u f f i c i e n t magnitude i s l i k e l y to be more e f f i c i e n t i n the economic handling of the plantations, unfettered as they would be by Government Departmental regu-lations, which involve so much paper work at the expense of actual f i e l d work and, of course, the uncertainty of treasury control. (Personal correspondence dated February 1960, from J . L. Riddoch, member of the Forestry Advisory Committee.) The p o s s i b i l i t i e s of introducing a Tree Farm Licence into Kenya in the immediate future, can probably be rejected. Under present p o l i t i c a l circumstances i t i s most unlikely that any firm would be interested i n such a proposition. Nevertheless, this should not rule out the p o s s i b i l i t y of introducing the Tree Farm Licence at some future date. Investment confidence has been restored i n many countries which have gone through similar periods of p o l i t i c a l i n s t a b i l i t y . 138. As noted e a r l i e r , there i s a difference between the circum-stances which prevailed i n B r i t i s h Columbia prior to the introduction of the Tree Farm Licence i n 1947 and those which prevail i n Kenya to-day. One of B r i t i s h Columbia's main problems was to ensure adequate management of those forest lands already alienated to private interests and over which, the Government had very l i t t l e control. The licence has encouraged operators to place such forest lands under sustained y i e l d management. There i s no similar problem i n Kenya. The Govern-ment s t i l l controls most of the forest land i n the country and the forest areas which w i l l form the basis of the future timber industry are already under intensive management, which, while carried on i n the face of financial and administrative d i f f i c u l t i e s , i s nevertheless suf-f i c i e n t to ensure a sustained y i e l d of timber and a high degree of forest protection. This particular advantage of the licence must therefore be eliminated from the discussion. It i s also necessary to eliminate those features of the Tree Farm Licence which are already covered by the Government's present timber disposal policy. The most important of these i s the assurance of an industry's raw material supplies, which permits adequate invest-ment and encourages e f f i c i e n t operation. The strongest argument i n favour of the Tree Farm Licence i s that i t would relieve Government from the financial and administra-t i v e responsibility for plantation management, of those forest lands 139. under licence. It seems inevitable that large areas of plantation timber must be allocated on long term leases to specific industrial firms. Experience elsewhere suggests that large industrial firms with a heavy capital investment are forced by economic necessity to plan their operations on a sustained y i e l d basis. Introduction of the Tree Farm Licence would enable Government to delegate r e s p o n s i b i l i t y for forest management to such firms, and at the same time adequately protect the public interest. Introduction of the Tree Farm Licence would free plantation management from the r e s t r i c t i o n s of treasury control* lead to a closer alignment of Industrial and Government interests, and encourage the importation of fresh ideas and private enterprise methods into the forest growing business. The main advantages to Industry of a Tree Farm Licence, would be those resulting from a complete integration of forest and industrial management, the longer term security which Government would be obliged to offer as an inducement to private investment i n plantations, and the long term assurance of raw material at a known price related to the production costs of the firm's own organisation, instead of those of a Government Department. The advantages to both parties would be a lowering of administrative overheads, more effective use of labour and lower production costs which should ensure more effective competition i n 140. world markets. The principles governing the award of Tree Farm Licences, could be substantially the same as those previously outlined for Government's present licences, with the additional requirement that an adequate working plan and proposals for forest management be i n -cluded i n the application. If the Government considers the advantages of the Tree Farm Licence s u f f i c i e n t to warrant i t s use at some future date, a statement of i t s intentions may help to attract foreign capital to the industry. I t would be desirable to experiment with such a licence on a small scale before making any such statement. Disposal of Crown timber by outright alienation There i s l i t t l e likelihood of Government agreeing to such a policy i n the immediate future. I t would also be imprudent to consider outright alienation, u n t i l a t r a d i t i o n of sound private enterprise forest management had been established. The main advantages of outright alienation to Industry, would be complete security of tenure (except from the p o s s i b i l i t y of expropriation), freedom from Government r e s t r i c t i o n s , greater f l e x i b i l i t y of operation and the maximum incentive for long term planning. The advantages to Govern-ment, would be complete r e l i e f from the financial responsibility for supervision of alienated lands. 141. State investment i n manufacturing plants While out of l i n e vith Government's present accepted forest policy, i t i s possible that State investment i n manufacturing plants may be necessary i f the p o l i t i c a l climate and low quality of planta-tio n produce continues to deter private enterprise investment: There thus remains i t seems to me, the p o s s i b i l i t y that the Kenya Government may be forced to take an interest i n the u t i l i s a t i o n of the plantations i n the same way as the Government of South A f r i c a was forced to do so - merely because no one else was w i l l i n g to take on conversion of the quantities becoming available. (Personal correspondence, June 1954, P. T. Henson, General Manager, Timsales.) Experience i n South A f r i c a i s of particular interest to Kenya. Plantations of similar species form the basis of the industry and the State has also a considerable investment i n plantations. The sawmilling industry i s composed of both State and private m i l l s . The main difference from Kenya i s , that South A f r i c a has a large area of privately owned plantations. The r e l a t i v e merits of State and private enterprise m i l l s i n South A f r i c a and reasons for South Africa's decision to establish State m i l l s , were discussed by O'Connor (1950) and Latham (1950). The main advantages to Government of establishing State saw-mi l l s i n Kenya, would be the immediate p o s s i b i l i t y of establishing large and more suitably equipped sawmills without having to wait u n t i l conditions favour private enterprise investment, elimination of the 142. problem of deciding to whom Crown timber should be allocated, the rea l i s a t i o n of the advantages of v e r t i c a l integration of forest and industrial management and the assurance of being able to prevent a private enterprise monopoly arising within the industry. The main problems of State manufacturing plants, would be the d i f f i c u l t i e s of operating under treasury r e s t r i c t i o n s and the general i n f l e x i b i l i t y of Government administration. The formation, as i n South A f r i c a , of U t i l i t y companies, on which the Government appoints the majority of the Board of Directors, could help to over-come these d i f f i c u l t i e s . A p o s s i b i l i t y which should not be overlooked, i s that of establishing State manufacturing plants to carry the industry through the present period of p o l i t i c a l i n s t a b i l i t y , followed by the de-nationalisation of such plants at some future date, i f private invest-ment confidence i s restored. Summary The Kenya Government i s i n the fortunate position of not being completely committed to any one particular method of timber dis-posal and of being able to draw on the experience of other countries such as B r i t i s h Columbia and South Afr i c a when formulating future p o l i c i e s . Each of the timber disposal methods previously discussed has i t s merits and as noted e a r l i e r , i t would probably be unwise for 143. the Government to adhere to only one system. A combination of several, i f not a l l , the alternatives discussed, may v e i l result i n the most healthy and competetive industry. The Tree Farm Licence offers several advantages which cannot be realised under the Government's present timber disposal policy and the introduction of such a licence would be very desirable. PRACTICAL APPLICATION Ouestions which the Kenya Government might ask i f the introduction of a Tree Farm Licence were under consideration would bes (1) How should the Government go about introducing such a licence? (2) What principles should govern licence awards? (3) How large an area should a licence cover? (4) Should licences be awarded to sawmills, to a pulp m i l l , or to both? (5) How long should i t be? (6) What would happen to the smaller operator? (7) Would there be any increase or decrease i n Govern-ment revenue? (8) Where would the necessary technical staff come from? (9) What clauses would the licence have to include? (10) Would the Government be able to retain effective control and to ensure adequate protection of the public interest? 145. 1) Timing of licence introduction As previously noted, the present p o l i t i c a l situation i n Kenya would probably prevent the immediate introduction of the Tree Farm Licence because i t i s unlikely that any private investor would be interested i n such a proposition. Nevertheless, i t may be possible to interest one or two of the larger firms i n co-operating i n a p i l o t project, particularly i f this could be arranged without committing private investment capital or altering the present licence period: If relieved partially or i n whole of the burden of royalty, parts of the Timber Industry are even now sound enough to embark on this type of development. (Personal Correspondence, R. Hoddinnott and J . Macbin 1959) A comparatively simple approach would be, for Government to contract out forest operations i n suitable licence areas to local sawmilling firms which have been allocated plantations on a long term lease. Both parties would thus gain experience on which future policies could be based and neither would be seriously affected i f the project f a i l e d . 2) Principles governing the award of Tree Farm Licences Principles governing the award of Tree Farm Licences in Kenya have already been discussed. To summarise, i t would be desirable to ensure that those firms to whom allocations were made, possessed ade-quate financial resources and technical a b i l i t y , by requiring a l l appli-cants to f u l f i l certain specified c r i t e r i a including the submission of 146. an adequate forest management plan. Preference would probably hare to be given to existing industry. If no satisfactory agreement could be reached between several concerns operating i n the same area* Govern-ment should base i t s decision either on an assessment of which appli-cant could most adequately satisfy the requirements of the licence or, i f a l l applicants can satisfy these requirements to the same degree, by use of the principle of public auction. If an award i s to be made on the basis of merit, public hearings may help to protect the Govern-mentfrom possible c r i t i c i s m . 3) Size of the licence area Kenya's plantations are under intensive management, the volume of existing plantations can be calculated f a i r l y accurately, closer u t i l i s a t i o n i s practised than in B r i t i s h Columbia and there i s less competition for raw material. I t i s therefore unlikely that the Kenya Government would run into those problems which have arisen i n B r i t i s h Columbia mainly because of a lack of adequate inventory data and re-quests by licensees for an increased annual allowable cut. The Craib recommendation of 1 0 , 0 0 0 acre units, was based on a conception of the area of plantations needed to support a m i l l of minimum economic size. This does not mean that a l l sawmill licences should be awarded on a 1 0 , 0 0 0 acre basis. A m i l l consuming 2 , 0 0 0 , 0 0 0 cubic feet of round logs per annum, i s s t i l l small by Swedish, or North American standards. I t may well prove that, i n the long run, a unit 147 of 20,000 acres or more w i l l be more economic. If units of this size do become desirable i n the future, they could s t i l l be established by an amalgamation of two existing firms and unless the award today, of 20,000 acres or more, means the difference between securing, or not securing a considerable overseas capital investment i n the industry, the Government would probably be advised to adhere to i t s present policy of 10,000 acre units. A certain increase i n allovable cut w i l l be possible, as u t i l i s a t i o n standards and forest management become more intensive* 4) The type of industry Allocation of licences to sawmill firms has been previously discussed. Whether a licence should be awarded to a pulp and paper m i l l w i l l depend on what size of industry i s under consideration. In brief, i f i t proves economically possible to establish a pulp m i l l using mainly mil] residues, i t should not be necessary for Government to a l l o -cate Crown timber to such a m i l l . If a proposed pulp m i l l requires more raw material than can be provided by available m i l l residues and par t i c u l a r l y i f security of raw material i s essential to attract invest-ment ca p i t a l , a licence should be granted. In practice, a pulp m i l l w i l l probably be integrated with one or more existing sawmills. Similar principles should be applied to the board industries. 148. 5) Period of the licence Based on experience i n B r i t i s h Columbia, i t vould not be advisable, or even necessary, to have a "perpetual" licence. The important thing from the licensee's point of viev, vould be to have suf f i c i e n t security of tenure to cover at least the amortisation period of his plant and, i f plantations were under consideration, a period long enough to ensure recovery of his capital investment. In practise, a 20 year licence as already under consideration for sawmills would prob-ably be suitable for both the sawmill and pulp and paper industries i f no plantation investment was involved. As previously suggested, a licence renewable at perhaps five year intervals, would probably be more desirable than a straight 20 year licence, mainly because the licensee would thereby always be assured of at least 16 years security of tenure. For a Tree Farm Licence, a period equivalent to at least two rotations would probably be desirable but, since i t i s impossible for anyone to forecast 20 years ahead, the Industry may be prepared to accept a shorter period than t h i s . The most important things are to ensure a more p o l i t i c a l l y stable climate than at present, i n order to encourage overseas investment and to leave ample room i n any licence granted for regular revision of licence clauses by mutual agreement. 6) The smaller operator The position of the smaller operator has already been discussed. 149. In b r i e f , i t was concluded that a gradual transition towards larger manufacturing units i s probably economically inevitable and many of Kenya's existing smaller operators w i l l probably be absorbed by larger firms or w i l l f a i l to survive. There w i l l nevertheless be a place for the small e f f i c i e n t operator, p a r t i c u l a r l y i n local situations where he has an assured market and substantial transportation advantages over the larger firms. It would probably be inadvisable to award Tree Farm Licences to such operators, mainly because small firms i n general, have a low capital investment and short term outlook. In B r i t i s h Columbia, the forest resources of the Province are so large, forest industry so important and Forest Service so hampered by lack of staff and funds that i t i s probably i n the public interest to encourage forest management by any firm which i s prepared to accept the re s p o n s i b i l i t y regardless of the size of the firm. Because small operators represent a large part i n the Industry i t would probably be p o l i t i c a l l y impossible to exclude them from acquiring Tree Farm Licences. These conditions do not prevail i n Kenya, where a f a i r l y intensive management i s already practised. There are fewer small operators, no open log markets and less competition for raw material. Unless Government were certain, that a delegation of responsibility for forest management to smaller operators would produce adequate forest management and protection, i t would be unwise to do t h i s . Experience i n most countries indicates that i n general, small operators have neither the financial resources nor the long range outlook necessary to ensure 150. adequate management. In countries where i t i s i n the public interest that small private properties be adequately manage, i t has usually been necessary to use both l e g i s l a t i o n and financial incentives i n order to achieve t h i s . 7) Financial implications Government's main concern would be over revenue. At present Forest Department expenditure greatly exceeds revenue and this situation may persist u n t i l beyond 1970, when the present capital investment i n plantations matures. Any private enterprise investment i n forest plantations w i l l reduce Government's own financial expenditure by the amount invested. Since Kenya i s short of development cap i t a l , a private investment would therefore be to the country's advantage. In the long run, providing that the Government recovers i t s financial outlay on the f i r s t rotation, any private enterprise invest-ment i n plantations w i l l relieve Government from the financial responsi-b i l i t y of establishing and maintaining the second crop. Whatever capital the Government would have invested i n this crop, w i l l be a v a i l -able for an alternative investment. Royalty could not be equitably charged on crops established entirely with private enterprise capital and Government's main, fi n a n c i a l return from Tree Farm Licence lands would come from indirect taxation and land rentals. In order to ensure an adequate return on i t s investment i n the f i r s t crop, Government would have to reserve the right to charge Royalty on the produce of these plantations, at similar rates to those i t would have charged had no licence been granted. A possible method of doing this would be for the licensee to take over the established plantations in an area at the time of signing the licence on the basis of an agreed evaluation. Payment on a lump sum basis would be d i f f i -cult, since, at a conservative estimate, the total value of plantations i n a 10,000 acre unit would exceed $600,000. Payment over a period of 20 or 30 years would probably be more practicable, i n which case, Govern-ment's evaluation would need to be increased by an appropriate interest rate. I t remains to assess whether the investment would be s u f f i c i e n t to attract private enterprise c a p i t a l . Previous estimates of the p r o f i t a b i l i t y of softwood plantations i n Kenya have given figures ranging from 5 per cent to 9 per cent (Forest Department Annual Report for 1948 6 per cent), (1951 Hiley Committee 8 per cent to 10 per cent), (Spears 1962 5 per cent to 6 per cent). The lower figure quoted for 1962, i s attributed partly to use of present day Royalty rates, which are based on poor quality timber resulting from early thinnings and low prices resulting from a depressed market. The 1950 Hiley Com-mittee estimated higher returns, based on the anticipated value of thinnings and f i n a l clear f e l l i n g s . South African experience was used as a basis for these estimates. In South A f r i c a large areas of 152. similar plantations have already been established by private enter-prise and these plantations are yielding attractive financial returns (Hiley 1959). The p r o f i t a b i l i t y of plantation forestry i n Kenya i s perhaps one of the most important factors i n favour of the Tree Farm Licence. 8) Technical staff P o l i t i c a l pressure for the replacement of trained expatriate technicians w i l l probably affect the Kenya C i v i l Service, to a greater degree than large commercial firms. I f the experiences of India, Ghana, Malaya and other former Colonial t e r r i t o r i e s are anything to go on, the trend has been for a rapid and almost complete replacement of expatriates in a l l C i v i l Service posts, but for the larger commercial firms, such as the tea companies i n India and cocoa growing firms i n West Africa, to retain their executive staff for a much longer period. From the Government's point of view, i t i s not i n the public interest for the operations of these large commercial organisations to be seriously interrupted, since this would mean a loss of trade and reduced local employment. This could be a substantial argument i n favour of the Tree Farm Licence. If the present Forestry Department staff are to be re-placed by l o c a l l y trained personnel at a rate determined more by p o l i t i c a l pressure than technical a b i l i t y , i t may be inevitable that forest manage-ment w i l l suffer. In the long run there i s no doubt that as experience is gained by local people of the problems of forest management, stan-dards w i l l return to normal. In the interim, the country would bene-f i t by the Tree Farm Licence, mainly because many of the present ex-patriate Forest Department staff would probably stay on i n Kenya, providing they were to be guaranteed p o l i t i c a l security and a reason-able job. Conversely, i t may be unwise to consider use of the Tree Farm Licence on a large scale u n t i l Government has had more experience of the licence and unless i t i s used on a large scale, r e l a t i v e l y few expatriates w i l l be retained. 9) Licence clauses To define possible licence clauses in d e t a i l , would require wider discussion than i s possible at present. I t i s not therefore proposed to define these, other than to suggest that B r i t i s h Columbia's licence would be a suitable model on which to base a Kenya licence. The clauses should reouire at least as adequate a standard of forest management as the Government could ensure tere i t to continue to manage forest lands i t s e l f . Clauses relating to exploitation could remain substantially the same as those covering existing licences. 10) Government control and protection of the public interest The most important question from Government's viewpoint, is whether i t would be able to retain effective control of the licence area. 154 . I t would be unwise to draw too many comparisons between B r i t i s h Columbia and Kenya, because operating conditions are very different, but i t may be relevant to observe, that i n no case examined during the course of this study, was there any suggestion that the B r i t i s h Columbia Government has l o s t control of the forest resource. The licence i s a contract, which, on most important issues, i s open ended i n favour of the Crown. The objective of a l l licensees has been to assure themselves a future supply of raw material and i n the interest of gaining that assurance, they have accepted the additional obligations of forest management. Having assumed these obligations, i t i s very much i n the company's interest to ensure sound management of the forest resource, since the efficiency of present day forest management w i l l r e f l e c t i n lower production costs i n the future. The result has been that i n general, the licence clauses have been observed. Forest management on Tree Farm Licence lands has benefited by the closer attention of professionally qualified Foresters, who are i n the fortunate position of being able to make a detailed study of local problems and to carry out their forest opera-tions with a far greater degree of f l e x i b i l i t y and assured continuity of finance than the mebers of the Government Forest Service. Except i n a few cases, the members of the Forest Service charged with the re s p o n s i b i l i t y of ensuring that the public interest i s adequately pro-tected, have not found i t necessary to bring pressure to bear i n order to ensure adequate forest management. The Kenya Government i s perhaps i n an even better position than the Government of B r i t i s h Columbia, because the forest crops which w i l l comprise the bulk of future raw material are rapid growing species which show the prospect of a good financial return. Unlike Canada* there i s no feeling that the forest resource i s inexhaustible and because a r t i f i c i a l rather than natural regeneration has to be used, there would be every incentive for licensees to replace logged over lands. Failure to do this would mean a future shortage of raw material. In practice Industry would be doing exactly the same job on Crown forest lands as the Government i s doing at present and there would appear to be l i t t l e r i s k that the public interest i n the forest resource would be adversely affected. CONCLUSION The main conclusions of this thesis are that the Tree Farm Licence has brought several important benefits to B r i t i s h Columbia and that a similar licence would be desirable i n Kenya. The bene-f i t s of the licence have been: (i) I t has encouraged Industrial operators to place their Forest lands under sustained y i e l d management, ( i i ) The Government has been relieved of the responsibility for forest management on Tree Farm Licence lands. Management of both private and Crown forest lands has greatly improved. Reforestation, protection and research i n particular, are better than before. ( i i i ) V e r t i c a l integration of forest and industrial manage-ment has brought fresh ideas and men into the forest management business. The advantages of private enter-prise management have been secured, without adversely affecting the public interest. The licence has encouraged industrial operators to study the forest more closely and w i l l give greater opportunity for the alignment of s i l v i c u l t u r a l techniques with industry's raw material requirements. 157. (iv) I t has resulted i n a more direct l i n k betveen forest revenue and expenditure on Tree Farm Licence lands. I t avoids the d i f f i c u l t i e s of financing forest development on erratic annual treasury allocations. (v) The licence has created suitable conditions for the establishment of large integrated forest industries and made an important contribution! to the Province's social and economic progress. (vi) I t has guaranteed long term security of rav material for industrial operators, thereby f a c i l i t a t i n g long term planning and steady expansion. I t has helped companies to improve their competi-tive position i n world markets. ( v i i ) I t has relieved industrial operators from the necessity of competing for their raw material and eliminated uncontrolled bidding on Tree Farm Licence lands. ( v i i i ) I t has resulted i n closer u t i l i s a t i o n of the forest resource. Security of tenure has encouraged the exploitation of undeveloped areas and there has been more incentive to take out marginal timber. 158. (ix) For the small contract operator, i t has opened up back areas of timber which would otherwise have been unavailable to him. Expansion of the bigger companies has created more opportunity for the independent logger. (x) S t a b i l i s a t i o n and perpetuation of industry have resulted i n greater community s t a b i l i t y . There has been more incentive for people to build houses and establish permanent communities. I t appears that a similar licence could be of considerable benefit i n Kenya. For p o l i t i c a l reasons the immediate introduction of a Tree Farm Licence would probably be impracticable but th i s should not rule out the p o s s i b i l i t y of introducing one i n the future. LITERATURE CITED Craib, I. 1956. A study of the program of afforestation by the State i n Kenya. Unpublished report for the Government of Kenya. 38 pp. Chief Forester, B r i t i s h Columbia Forest Service, 12 November 58. Personal correspondence. Dealey, D. S. 1958. Mergers i n the Forest Products Industries. Journal of Forestry, 56 (2): 99-103. Duerr, W. A. 1960. Fundamentals of Forestry Economics. McGraw H i l l Book Company Inc. New York, Toronto, London. 579 pp. Food and Agriculture Organisation. 1950. Forest Policy. Law and Administration. F.A.O., Rome. 211 pp. Food and Agriculture Organisation. 1953. Mountain Timber Extrac-tion. Unaslyva 9 ( l ) : 14-51. Gibson, J . Miles and L. R. Seheult. 1956. Report on the New Forms of Tenure i n the Management of B r i t i s h Columbia's Forest. Unpublished report for the Vancouver Foundation. 87 pp. Gordon, W. A. 1961. Land Tenure. Unasylva. 1_5 ( l ) : 6-9. Government of Kenya. 1950. An Economic Survey of Forestry i n Kenya and Recommendations regarding a Forest Commission. Government Printer, Nairobi, Kenya. 117 pp. Government of Kenya. 1957. White Paper Number 87. A Forest Policy for Kenya. Government Printer, Nairobi, Kenya. 12 pp. Government of Kenya. 1956. Working Party Report on the Craib Report. Unpublished report for the Forest Department. 12 pp. Grant, J . 1956. Prospects for pulp and paper manufacture i n Uganda and Kenya. Unpublished report for the Governments of Uganda and Kenya. 443 pp. 160. Henson, F. 1957. The future of the Timber Industry i n Kenya. Unpublished report prepared for the Kenya Timber Industry. 54 pp. Henson, F. 1958. The log requirements of the exotic softwood sawmilling industry i n Kenya. Unpublished report. 8 pp. Henson, F. General Manager Timsales Ltd. Nairobi, Kenya. 10 November 58. Personal correspondence. Hiley, tf. E. 1930. The Economics of Forestry. Clarendon Press. Oxford. 255 pp. Hiley, W. E. 1959. Conifers, South African methods of cu l t i v a t i o n . Faber and Faber. London. 123 pp. Hoddinnol s R. and J . Machin. Directors of Amalgamated Sawmills Limited, Njoro, Kenya. 12 October 58. Personal correspondence. Huguet, L. 1953. A System of Organised Forest Exploitation in. Mexico. Unasylva ]_ (2)s 52. Keen, I. 1961. A Sawmill for the Conversion of Two M i l l i o n Cubic Feet per Annum of Plantation Softwood Logs. Unpublished report for Timsales Sawmills Limited. 12 pp. Koroleff, A. 1951. S t a b i l i t y as a factor i n E f f i c i e n t Forest Manage-ment. Pulp and Paper Research Institute of Canada. 294 pp. Latham, B. 1950. Sawmilling Policy. Empire Forestry Review 29 (2): 101-103. MacFarlane, R. A. B. 1961. The Protective Association i n the Forest Industry of B r i t i s h Columbia (Confidential). Un-published thesis submitted for the B.S.F. Degree of the University of B r i t i s h Columbia. 113 pp. Meyer, W. H. Professor of Forestry, University of Yale. 12 November 1961. Personal correspondence. Moore, A. M, 1957. Forestry Tenures and Taxes i n Canada. Canadian Tax Foundation Tax Paper I I . Canadian Tax Foundation. Toronto. 315 pp. New Brunswick. 1957. Forest Development Commission. Report of the New Brunswick Forest Development Commission. Fredericton 154 pp. 161. O'Connor, A. J . 1950. Sawmilling Policy. Empire Forestry Review 29 (4): 364-365. Riddoch, J . L. 1958. Member of the Kenya Forest Advisory Com-mittee. Personal correspondence. Sloan, G. M. 1945. The Forest Resources of B r i t i s h Columbia. Report of the Commissioner. C. A. Bonfield, Kings Printer, V i c t o r i a . 195 pp. Sloan, G. M. 1957. The Forest Resources of B r i t i s h Columbia. Report of the Commissioner 1956. Two volumes. D. MacDiarmid, Oueens Printer, V i c t o r i a , 865 pp. Smith, J . H. G., Ker, J . W. and Csizmazia, J . 1961. Economics of Reforestation of Douglas F i r , Western Hemlock and Western Red Cedar i n the Vancouver Forest D i s t r i c t . Faculty of Forestry, Forestry B u l l e t i n Number 3. University of B r i t i s h Columbia, Vancouver. 144 pp. Spears, J . S. 1962. Financial Problems of State Forest Management in Kenya. Unpublished Directed Study. Written i n p a r t i a l fulfilment of the requirements for the Master of Forestry Degree of the University of B r i t i s h Columbia. 51 pp. University of B r i t i s h Columbia Forest Club. 1959. Forestry Hand-book for B r i t i s h Columbia. University of B r i t i s h Columbia. Faculty of Forestry, Forest Club. 800 pp. Wilkes, G. C. 1954. Taxation of the Forest Industries i n Ontario. University of Toronto Press. 173 pp. Wimbush, S. H. 1950. A Catalogue of Kenya Timbers. Government Printer. Nairobi, Kenya. 113 pp. BIBLIOGRAPHY Alaska Pine and Cellulose Company Ltd., 1956. Submission to the Royal Commission on Forestry, B r i t i s h Columbia. 47 pp. Bendickson, A. B. Bendickson Logging Ltd. 19 October 61. Personal correspondence. Besley, L. 1951. Taxation of Crown-granted Timberlands i n B r i t i s h Columbia. University of B r i t i s h Columbia, Faculty of Forestry B u l l e t i n Number 1. 86 pp. Brandstrom, A. J . F. 1957. Development of Industrial Forestry i n the P a c i f i c Northwest. University of Washington, Colonel Greeley Lectures, Number 1, 33 pp. Brasnett, N. V. 1953. Forestry in Kenya. Empire Forestry Review. 32 (2): 172. B r i t i s h Columbia Forest Service, Working Plans Division. 1955. Report to Royal Commission on Forests and Forestry. 61 pp. B r i t i s h Columbia Forest Service. 1958. Continuous Forest Inventory of B r i t i s h Columbia. I n i t i a l Phase, 1957. B.C.F.S. Surveys and Inventory Division, V i c t o r i a . Canadian Pulp and Paper Association, (Western D i v i s i o n ) . 1955. A brief to the Royal Commission on Forestry. 35 pp. Carey, D. M. 1961. Some recommendations for Tree Farm assessment in B r i t i s h Columbia. Forestry Chronicle. 37 ( l ) : 29-34. Celgar Limited. 1956. Submission to the Royal Commission on Forestry, B r i t i s h Columbia. 32 pp. Champion, H. G. 1952. Co-operation between State and Non-State organisations i n the promotion of forestry. University of B r i t i s h Columbia, Faculty of Forestry, H. R. MacMillan Lecture. 12. pp. Clawson, M. 1957. Economic size of forestry operations. Journal of Forestry, 55 (7): 521-526. Craigie, J . K. Evans Products Company Ltd. 17 October 61. Personal correspondence. 163. Crooked River Forest Protective Association. 1955. Brief to the Royal Commission on forestry. 20 pp. Crown Zellerbach Canada Ltd. 1955. A brief to the Royal Commission of Inquiry. Forest Resources of B r i t i s h Columbia. 60 pp. de Grace, L. A. Industrial Forestry Service Ltd. 7 November 61. Personal correspondence. Diebler, F. S. 1936. Principles of Economics. McGraw H i l l Book Company Inc. New York and London. 611 pp. Forest Policy Development Association. 1956. Submission to the Royal Commission on forestry, B r i t i s h Columbia. 25 pp. Gibson, J . G. 1961. Why B.C's. forest policy i s wrong! Canada Lumberman, 81 (5): 37-40. Gibson, J . Miles and L. R. Scheult. 1955. The Management of Forest Lands i n Eastern Canada. Brief submitted to the Royal Commission on forestry. 84 pp. Greeley, W. B. 1953. Forest Policy. McGraw H i l l Book Company Inc. New York, Toronto, London. 217 pp. Guthrie, J . A. and G. R. Armstrong. 1961. Western forest industry, an economic outlook. The John Hopins Press. Baltimore. 324 pp. Hague, C. J . Crown Zellerbach Canada Ltd. 17 October 61. Personal Correspondence. Hiley, W. E. Forestry i n Kenya. Empire Forestry Review, 32 (1): 63-64. Ker, J . W., Smith, J . H. G. and D. B. L i t t l e . 1960. Reforestation needs i n the Vancouver Forest D i s t r i c t . University of B r i t i s h Columbia, Faculty of Forestry Research Paper Number 36. 19 pp. Lawrence, J . C. 1957. Markets and Capital. A history of the Lumber Industry i n B r i t i s h Columbia. University of B r i t i s h Colombia. Unpublished M.A. thesis. 208 pp. Macleod, W. K. Salmon River Logging Company Ltd. 30 October 61. Personal correspondence. 164. Macfarlane, R. A. B* Forestal International Limited. 27 October 61. Personal correspondence* Macmillan and Bloedel Ltd. 1955. A Brief submitted to the Royal Commission on forestry, B r i t i s h Columbia. 82 pp. Macmullan, D. L. B r i t i s h Columbia Forest Products Ltd. 19 October 61. Personal correspondence. Marquis, R. W. 1939. The Economics of Private Forestry. McGraw H i l l Book Company, Inc. New York and London. 213 pp. Martin, C. S. 1950. Government and the Forest Economy. University of B r i t i s h Columbia, Faculty of Forestry. H.R. MacMillan lectureship. 9 pp. Moss, A. S. M. Simpson Ltd. 18 October 61. Personal correspondence. Newfoundland Provincial Government. 1955. Report of the Royal Commission on Forestry. The Queen's Printer, Newfoundland. 240 pp. Northern Interior Lumbermans Association. 1955. A brief to the Royal Commission on forestry. Orchard, C. D. 1959. Preposterous prognosis. The Forestry Chronicle. 35 (4): 275-281. Powell River Company Limited. 1956. Brief to the Royal Commission of Enquiry into the Forest Resources of B r i t i s h Columbia. 79 pp. Rasmussen, S. Tansis Company Limited. 18 October 61. Personal correspondence. Shorter, E. G. MacMillan and Bloedel and Powell River Ltd. 10 January 61. Personal correspondence. Smith, J . H. G. 1958. Better yields through : spacing. Journal of Forestry. 56 (7)j 492-97. Smith, J . H. G. and J . Walters. 1961. Prune large, immature Douglas F i r now. University of B r i t i s h Columbia, Faculty Forestry, Research Note, Number 30. 6 pp. S t i r l i n g , W. J . 23 November 61. Personal correspondence. 165. Streytfert, T. 1960. The Influence on S i l v i c u l t u r e of the price of primary forest products. Paper presented to the F i f t h World Forestry Congress. Seattle, Washington. 10 pp. Strother, J . G. Vernon Box and Pine Lumber Company Ltd. 10 October 1961. Personal correspondence. Swantje, H. Forestal International Ltd.. 23 October 61. Personal correspondence. Vaux, H. J . 1954. An economic view point on P a c i f i c Coast forest planting. University of B r i t i s h Columbia, Faculty of Forestry, H.R. MacMillan Lecture. 17 pp. Western Plywood (Cariboo) Ltd. 1955. A brief to the Royal Commission on Forestry. 23 pp. Yale School of Forestry. 1960. Financial management of large forest ownerships. University of Yale. School of Forestry. B u l l e t i n Number 66 . 124 pp. APPENDIX I SAMPLE TREE FARM LICENCE CONTRACT THIS AGREEMENT made in duplicate this day of in the year of Our Lord One Thousand Nine Hundred and BETWEENJ THE MINISTER OF LANDS AND FORESTS of the Province of British Columbia, who, with his successors in office, is hereinafter called "the Minister", of the one part, AND , a Corporation duly incorporated under the laws of the Province of British Columbia, and having its registered office in the City of , in the said Province, hereinafter called "the Licensee", of the other part. WHEREAS by Subsection (2) of Section 36 of the "Forest Act", being Chapter 153 of the Revised Statutes of British Columbia, I960 and subsequent amendments, i t is provided that the Minister may by agreement grant a tree farm licence to any person for the management of Crovn lands specified in the agreement, reserved to the sole use of the Licensee for the purpose of growing continuously successive crops of forest products to be harvested in approximately equal annual or periodic cuts equalling the sustained yield capacity of the lands in the area covered by the licence, or may enter into an agreement to be known as a tree farm lieence with the owner of other tenures to combine such other tenures and Crown forest lands into a single unit reserved by mutual consent and agreement to the sole use of the Licensee for the like purpose: - 2 -AND WHEREAS the conditions precedent to the issuance of this licence, as set forth in said Section 36, hare been complied with to the satisfaction of the Licensor: NOW THIS AGREEMENT WITNESSETH THAT pursuant to Section 36 of the "Forest Act" and in consideration of the payments, agreements and stipulations to be made and observed by and on the part of the Licensee as hereinafter mentioned, the Minister doth hereby grant unto the Licen-see the management of the Crown lands specified in Schedule "B" to this agreement, which lands are reserved to the sole use of the Licensee for the purpose of growing continuously successive crops of forest products to be harvested in approximately equal annual or periodic cuts equalling the sustained yield capacity of the lands described in this agreement. And in consideration of the premises, IT IS HEREBY AGREED AS FOLLOWS: 1. This tree farm licence may be referred to as the ". Tree Farm Licence" and is numbered ( ) on the Forest Service register of tree farm licences and on the o f f i c i a l atlas maps of the Department of Lands and Forests. 2 . This licence is given for the maintenance of the manu-facturing plant or plants owned and operated by the Licensee. Said plant or plants shall be capable of using the allowable cut from the licence area, and such plant or plants shall be maintained in operation in sufficient continuity to use the wood product of the licence annually. - 3 -Notwithstanding the provisions of this clause, the Minister may, for good and sufficient reasons, at his discretion, in writing, afford such relief from the provisions of this clause as he may see f i t . 3. The Lioensee shall manage the licence area in accordance with the provisions of the said Section 36 of the "Forest Act" and of regulations under the said Act for the regulation of tree farm licences, and in accordance with the management working plan applicable thereto, for the purpose of growing continuously successive crops of forest products to be harvested in approximately equal annual or periodic cuts equalling the sustained yield capacity of the licence area. 4. The term of this licence shall be 21 years from the date of this agreement, subject to the provisions of the "Forest Act", the regulations made thereunder and the provisions of this agreement, and compliance with the management working plan. This licence shall be renewable but subject to renegotiation of the terms and conditions of the contract according to the provisions of the "Forest Act" and the regulations in force at the time of the application for renewal. 5* The licence area includes a l l Crown lands not otherwise alienated at this date, as set forth in Schedule "B" hereto, together with a l l the lands owned or controlled by the Licensee, as set forth in Schedule "A" hereto, both of which are shown outlined in bold black line on the plan attached hereto, subject, however, to any increase, decrease, re-allocation or exchange of lands as provided by this agreement or by subsection (14) of Section 36 of the "Forest Act"; and in addition i t includes any and a l l lands that may be subsequently acquired by the Licensee and incorporated into said Schedule "A" pur-suant to Clause 7 hereof, provided also that any lands included in Schedule "A", the t i t l e or interest to which reverts to the Crown, or which the Licensee elects to revert to the Crown, shall be considered as being included in Schedule "B" from the time of such reversion. 6. The Licensee hereby declares that i t owns or controls the cutting rights on each parcel of the lands listed and described in Schedule "A" hereto. 7. The acquisition by the Licensee of forest lands, excepting only cutting rights offered by the Forest Service for competitive sale, subsequent to the issuance of this licence shall, pursuant to sub-section (9) of said Section 36, be reported to the Minister, and such forest lands shall be included forthwith in the licence area and be incorporated in Schedule "A" hereof to the extent required by said subsection (9). 8. For the purposes of subsection (8) of Section 36 of the "Forest Act", the watershed and drainage basins relating to this licence are defined as - 5 -9. The Minister may from time to time withdraw from the Crown lands included in the licence area such lands as are required for forest experimental purposes, parks* or for aesthetic purposes; but the lands eo withdrawn shall not exceed one per cent of the total area of lands in the licence area without the consent of the Licensee, and no land shall be withdrawn from areas being developed under the current cutting plan without the consent of the Licensee. Any such withdrawals shall be deducted from Schedule "B". 10. If at any time, or from time to time, part of the Crown lands within the tree farm licence area is found to be required for a higher economic use than raising forest crops, or for any use deemed to be essential to the public interest, said lands may be withdrawn from the licence area by the Minister, provided that i f by such withdrawal the productive capacity of the licence area i s diminished by more than one-half of one per cent of its total productive capacity, other lands, i f available, will be added to the licence area in substitution therefor. Any such withdrawals shall be deducted from Schedule "B", and any such additions shall be added to Schedule "B". For the purposes of this clause, the development of mines and mineral claims may be deemed to be essential to the public interest. 11. It is expressly understood that the Minister may at his discretion and at any time, either permanently or for a specified time, withdraw from this licence and from the licence area any Crown lands needed for rights-of-way under Part VI of the "Forest Act", or - 6 -for railway* highway, power transmission* or other right-of-way purposes, and such lands will he deducted from Schedule "B". 12. In the event of the withdrawal of any lands from the licence area pursuant to Clauses 9, 10, 11, and 14 hereof, the Minister may required the Licensee to remove from such lands within one hundred and twenty days thereafter a l l timber then cut thereon and a l l buildings, machinery, equipment, and other property placed by i t thereon and which is capable of removal. Compensation shall be paid to the Licensee in respect of improvements eapable of removal from the lands so withdrawn to the extent only of the cost of removal and damage incidental thereto; and compensation shall be paid to the Licensee in respect of improvements not capable of removal on the basis of cost less depreciation. Without limiting the generality of the foregoing, the term "improvements" means a l l buildings, structures, fixtures, and things erected upon or affixed to such lands and shall include machinery, boilers, tanks, pipes, dams, flumes, roads, railways, transmission lines* and other works used in connection with the business of the Licensee. Improvements shall also mean areas a r t i f i c i a l l y reforested by planting or seeding, compensation for which shall be the cost incurred in the act of reforesting. If the amount of compensation payable to the Licensee is not agreed upon, then such amount shall be appraised and awarded by a single arbitrator in case the Minister and Licensee agree upon one; otherwise by three arbitrators, one to be appointed by the Minister, one to be appointed by the Licensee, and the third to be appointed - 7 -by writing under the hands of the two appointed* such arbitration to be in accordance with the provisions of the "Arbitration Act" of the Province of British Columbia* In the event that both parties are unable to agree on a third arbitrator, the Chief Justice of the Supreme Court of British Columbia shall be requested to make an appointment. 13. If at any time, or from time to time, Bart of the lands included in Schedule "A" is found to be required for a higher economic use than raising forest crops, said lands may be withdrawn from the licence area at the request of the Licensee and on the consent of the Minister, and after such withdrawal such lands will be deducted from Schedule "A" and shall be disposed of by the Licensee for the purpose for which they were withdrawn. 14. Where the licence includes within the described boun-daries a belt of area of non-productive land surrounding or adjacent to the productive forest land of the licence, any or a l l of such non-productive land may be withdrawn from the licence at the pleasure of the Minister. 15. Other tenures included in this tree farm licence shall not be sold, transferred, or otherwise disposed of except as herein-before provided or except as provided in Section 36 of the "Forest Act". 16. This licence, insofar as Crovn lands in Schedule "B" are concerned, shall not be considered to limit the use of the lands at the discretion of the Minister for other purposes such as mining, - 8 -trapping, hunting, fishing, hydro-electric development, or any use that does not materially prejudice the rights granted to the Licensee to employ the use of the lands for the growing and harvesting of forest products under the terms of this licence* 17. It is understood and agreed between the parties hereto that any rights under this agreement in respect of Crown lands do not include any riparian or foreshore rights, and a l l such riparian and foreshore rights vested in the Crown in respect of the said Crown lands mentioned in this agreement shall remain in the same status as i f this agreement had not been entered into, and the Licensee shall have no rights or claims whatsoever in respect thereto by virtue of this agreement. 18. The Minister may direct the Licensee to have surveyed and defined on the ground, and at the Licensee's expense, any or a l l the boundaries of the licence area vhich he may deem necessary to have so surveyed and defined. In the event of failure of the Licensee to complete any such survey within time limits set by the Minister, the Minister may cause the survey to be made and the costs shall be charged to and be payable forthwith by the Licensee. 19. As a f i r s t essential to the primary object of sustained yield management of this licence, i t is agreed that a l l potentially productive forest land within the licence area shall be kept by the Licensee in growing stock as provided in Clause 20 hereof, and adequately - 9 -stocked in accordance with standards to be defined from time to time bj the Forest Service lands of a comparable site quality in British Columbia, 20, Any lands in the licence area denuded before the date of this agreement which are found to be stocked below the minimum stan-dards defined by the Forest Service as provided in Clause 19, above, shall be classified as to site quality and those determined by the Forest Service to be of a site quality index equal to or better than 80, unless in the opinion of the Minister they are occupied by an advanced growth of brush, or otherwise in such condition as to make planting operations economically impractical, shall be reforested by the Licensee by a r t i f i c i a l means with a merchantable species suitable to the locality at a rate per year of not less than one thousand acres, or ten per cent of the total acreage of such lands, whichever is the lesser, a l l to the satisfaction of the Licensor. The Licensee further agrees that lands of site quality index better than 110 denuded after the date of this agreement, and not found to be restocked satisfactorily five years after logging, will be a r t i f i c i a l l y regenerated by the Licensee before the end of the seventh year after logging; and that lands of site quality index between 80 and 110 not found to be restocked satisfactorily eight years after logging, will be a r t i f i c i a l l y regenerated by the Licensee before the end of the tenth year after logging, a l l to the satisfaction of the Minister. The Licensee may be directed by the Minister to take earlier action to regen-- 10 -erate lands in the areas specified above when in the opinion of the Chief Forester there is danger of brush encroachment on such areas. 21. On failure of the Licensee to comply vith the provisions of Clause 20, tbe Minister, his servants or agents, may enter on the lands in respect of which the Licensee is in default, and restock them, and the cost thereof shall be recoverable by the Crovn from the Licensee and may be taken in vhole or in part from the deposit referred to in Clause 35 hereof. 22. The operations covered by the licence shall be managed in accordance vith the currently approved management working plan, each of vhich in turn as approved for each successive period is hereby in-corporated into and made a part of this agreement. 23. Management working plans will be approved for such period as the Chief Forester may decide, and will be subject to revision as set forth in the said plans. 24. Revised management working plans shall be submitted for the approval of the Chief Forester not later than six months prior to the expiry of currently approved plans. 25. The object of each succeeding plan shall be to implement the primary object of the licence; i.e., sustained yield in equal annual or periodic cuts, and may embody any method of attaining that objective that in the opinion of the Chief Forester will prove economically feasible over a reasonable period of years, and that is not inconsistent - 11 -vith the spirit and intent of the Act and regulations. In preparing the management working plan, advantage shall be taken of a l l available data and experience. 26. Should i t appear at any time to either party hereto necessary or expedient in case of emergency to increase or decrease the rate of cutting contemplated by the cutting budget then in effect, or to alter the cutting plan then being observed, then, subject to the approval of the Chief Forester, emergency revision of the management working plan will be undertaken upon the request of either the Licensee or the Chief Forester. Without limiting the generalities of the preceding para-graph, cause for revision on account of emergency conditions will cover such things as fire damage of major proportions, serious windthrow, insect or disease attacks, serious damage to the Licensee's manufacturing plant, or other catastrophe of great moment, or should there occur a national emergency brought about by war, or an economic depression severe enough in the opinion of the Minister to justify revision of the manage-ment working plan. 27. In the process of harvesting the crop from the licence area, regardless of the tenure of the land from vhich i t is harvested, the Licensee shall provide the opportunity for contractors, other than the Licensee's ovn employees or shareholders who own more than one per cent interest to harvest a volume equivalent to a minimum of f i f t y per - 12 -cent of the allowable cot from Crown lands not held under other tenure but where the Minister is satisfied that such contract operation is not feasible, either by reason of lack of operators or for other good and sufficient reason, the Minister may relieve the Licensee in whole or in part from this responsibility. 28. In the event of the development on the licence area of injurious insects in numbers which in the opinion of the Minister will seriously reduce the current or future allowable annual harvest of wood, and which in the opinion of the Minister can be controlled, then the Licensee and Licensor shall take such control measures as may be mutually agreed upon, or the Licensee shall take such control measures as the Minister shall direct, provided that the cost of such control measures to the Licensee at its own expense in any one calendar year shall not exceed one—half the cost of such control measures incurred during that calendar year, or the total stumpage value of that year's allowable cut, whichever may prove to be the lesser. For the purposes of this clause, the stumpage value shall be the value appraised by the Forest Service. 29. In the event that mutual agreement cannot be reached between the parties hereto as to the sustained-yield cutting capacity or as to the sequence or methods of cutting to be employed at the time an emergency, or any other revision of the cutting plan or cutting budget is undertaken, the Licensor shall determine the permissible cut and the plan and methods of cutting. - 13 -30. The Licensee, in its logging operations on the licence area, shall at a l l times maintain at least as high a standard of u t i l i -zation as, in the Chief Forester's reasonable opinion, is being main-tained by well-conducted logging operations in the Forest District in which the Licensee's operation is located. 31. Cutting on the licence area shall be done only in accordance with the management working plan, and only after notice of intent has been given to the Chief Forester and a cutting permit has been issued. Such cutting permit shall be issued by the Chief Forester i f the proposed cutting is in keeping with the provisions of this licence and the management working plan. If the proposed cutting is to be on other tenures, the cutting permit will constitute the Minister's concurrence that the cutting is according to plan and specify such other details as he may deem necessary, such details, however, always to be in keeping with the provisions of the management working plan and this agreement. If cutting is on Crown lands not held under other tenures, the cutting permit w i l l , in addition, fix the stumpage in accordance with subsection (20), Section 36 of the "Forest Act". Any cutting not covered by a cutting permit will be deemed to be in trespass and the Licensee shall be assessed a sum by the Minister in respect thereof in an amount not in excess of the value of the logs or other product so cut or wasted or destroyed. 32. Timber marks shall be secured by the Licensee and marking carried out as required by Part IX of the "Forest Act". - 14 -33. A l l timber harvested on the licence area shall be scaled in cubic feet and otherwise in a l l respects in accordance vith the pro-visions of Part VIII of the "Forest Act". 34. Timber and vood cut from lands included in this licence, regardless of the tenure of the lands, shall be subject in a l l respects to the provisions of Part X of the "Forest Act" insofar as they relate to lands granted after the 12th day of March 1906. 35. The Licensee herevith deposits, pursuant to subsection (6) of Section 36 of the"Forest Act", the sum of Dollars ($ ), receipt of vhich is acknowledged and will supplement this deposit by the payment of ten cents on each one hundred cubic feet of wood harvested, but the sum total of deposits held at any one time by the Licensor under this clause shall not exceed Dollars (S ). In the event that the amount of the deposit becomes less than Dollars (S ), the Licensee will forthwith deposit sufficient money with the Minister to bring the total amount up to Dollars ($ ), and thereafter will supplement the deposit by the payment of ten cents on each one hundred cubic feet of wood harvested to bring the total amount up to Dollars ($ ). The said deposits shall be held for the purpose of ensuring compliance on the part of the terms of the "Forest Act", the regulations made thereunder, this agree-ment, the management working plan, and any permit issued pursuant to this agreement. - 15 -36. The Licensee agrees to pay stumpage on a l l merchantable wood cut, wasted, or removed by the Licensee or its agents on or from that part of the licence area described in Schedule "B" hereto, as pro-vided in this agreement, the "Forest Act" and the cutting permit. 37. Starting on the f i r s t day of January next following the date of this agreement, the wood harvested from the licence area in any one year shall not be less than f i f t y per cent and not more than one hundred and f i f t y per cent of the approved annual cut, and shall not vary more than ten per cent from the total approved cut over a period of five years. 38. Damages, recoverable in f u l l or in part from the deposit made by the Licensee under Clause 35 hereof, will be assessed by the Minister for failure to observe the provisions of Clause 37 of this agreement, as follows: (a) The f u l l stumpage value as appraised by the Forest Service on the quantity of timber by which the year's cut fa l l s below f i f t y per cent of the approved annual cut, and any stumpage paid on such excess under Clause 36 will be credited against such assessment. (b) Double the stumpage value as appraised by the Forest Service on the quantity of timber by which the year's cut is in excess of one hundred and f i f t y per cent of the approved annual cut, whether cut from Crown lands or from other tenures. (c) Should the total cut over five consecutive years vary more than ten per cent over the total of the five years' approved cut, - 16 -a sum per one hundred cubic feet double the stumpage as established for the f i f t h year of the period, will be assessed by the Minister on the amount cut over the ten per cent allowance, whether cut from Crown land or from other tenures. Should the total cut over five consecutive years vary more than ten per cent under the total of the five years' approved cut, a sum per one hundred cubic feet equal to the stumpage as established for the f i f t h year of the period, will be assessed by the Minister on the amount cut under the ten per cent allowance whether cut from Crown land or from other tenures. (d) Should the total cut over ten consecutive years, including the five-year period referred to in (c) above, vary less than ten per cent from the total of the ten-year cutting budget as approved in the working plan, the damage assessed in paragraph (c) above, i f any, will be refunded. (e) For the purposes of this paragraph, stumpage shall be appraised on the same basis and in the same manner as provided in Clause 31 hereof. (f) Any damages provided for in any cutting permit mentioned in Clause 31 may be deducted from the deposit mentioned in Clause 35, and thereupon the Licensee shall forthwith deposit with the Minister sufficient moneys to make the said deposit equal to the amount of deposit thus required. (g) In the event that the licence is cancelled by reason of any default or breach of the licence by the Licensee, then a l l - 17 -moneys on deposit with the Licensor under tbe terms of this agreement shall be payable to the Crown for damages* 39. For the purpose of carrying out the provisions of Clause 38 hereof, the Licensee may elect to start a new five-year period from any year in which the periodic cut for the preceding five-year period is within ten per cent of the accumulated approved annual cuts* 40. The aggregate acreage of the Crown lands not held under other tenure in the licence area for the purposes of rental under sub-section (19) of Section 36 of the "Forest Act", as of this date, shall be the total acreage as set forth in the current approved working plan. 41. For the purposes of Section 126, subsection (l) of the "Forest Act", Chapter 153 of the Statutes of British Columbia for 1960 and subsequent amendments, the approved annual productive capacity of the licence shall be such as may be determined in the current approved working plan, and forest protection tax shall be payable as provided by the said Section 126. 42. All camps or other living quarters established incident to the management of the licence area shall be of a standard at least as high as those that, in the Minister's reasonable opinion, are being maintained by comparable well conducted forest operations in the Forest District. 43* All roads* on lands within the boundaries of this licence, including the lands listed in Schedule "A", shall be held available for - 18 -public use in accordance with the terms of the "Industrial Transportation Act" and of the "Forest Act" relating thereto. 44. The Licensee shall provide, to the satisfaction of the Chief Forester reasonable office and living accommodation for a reason-able Forest Service inspection staff on the licence area or at any head-quarters* plant, or operation maintained by the Licensee* i f instructed by the Chief Forester in writing to do so. 45. The Licensee shall employ one Forester, registered under the terras of Chapter 37 R.S.B.C., 1960, and amendments thereto, and as many additional Registered Foresters as may be deemed necessary by the Chief Forester. The working plan and a l l revisions and amendments thereto shall be signed and sealed by the Registered Forester. 46. In the event of the bankruptcy or insolvency of the Licensee, the Minister may cancel the licence and any or a l l moneys on deposit may be declared by the Minister to be payable to the Crown for damages. 47. This agreement may be amended by the parties hereto by a memorandum in writing signed by the parties hereto. 48. This tree farm licence shall not be sold or transferred by the Licensee within ten years immediately subsequent to the issuance of this licene nor shall the control of the licence be transferred in any manner whatsoever to any person or persons, firm or firms, corpora-tion or corporations without the written consent of the Minister f i r s t having been obtained. - 19 -49. Any notice required to be given to tbe Licensee by the Minister or Chief Forester under this agreement, may be given by written notice sent by registered mail or delivered to the registered office of the Licensee in British Columbia, and shall be deemed to be so given on the day i t would be received by the Licensee in the ordinary course of post, or on the day i t vas so delivered* 50. (a) This licence may be terminated at any time by mutual consent of the parties hereto* (b) The Licensee may terminate this licence on tvo years' notice in writing given to the Minister subject as hereinafter provided. (c) In the event that the Licensee serves notice of termina-tion of this licence as provided in the next preceding sub-clause or i f the Minister terminates the licence such termination shall be sub-ject to the following conditions: (i) A l l moneys held as security deposit of whatsoever nature or kind or any part thereof may be declared by the Minister payable to the Crown for damages or otherwise and the Minister shall not be obliged to account in respect thereof. ( i i ) A l l tenures which have reverted to the Crown pur-suant to this contract shall not revest in the Licensee. ( i i i ) A ll improvements made on Crown lands included in Schedule "B" shall become and be the property of - 2 0 -the Crown and the Licensee shall have no claim or in any way be entitled to compensation therefor: Provided the Licensee may remove its own improve-ments which are capable of removal in such a manner as not to damage other improvements: Provided also such removal shall not in any vay affect the lien of the Crown on such fixtures as provided in the "Forest Act". (iv) A l l cutting permits issued pursuant to this agree-ment shall terminate on the termination of the agreement. (v) The Licensee shall forthwith pay a l l moneys owing on outstanding accounts for stumpage, royalty, taxes, and annual rental. (vi) A l l rights granted pursuant to any statute or regulations or under this agreement as ancillary there-to and a l l appurtenances shall be cancelled effective on the termination of this licence. 51. In the event that this licence is cancelled or terminated, existing other tenures owned or controlled by the Licensee included within the licence area shall in no way be encumbered by any commitments, agree-ments, understanding or in any other manner arising out of the execution of this licence. - 21 -52. In th i s licences "Act" means the "Forest Act", R.S.B.C. 1960, Chapter 153, and amendments thereto i n force from time to time during the currency of this agreement. "Approved", i f not otherwise defined i n the context, means approved by the Minister. "Denuded" or "denuded lands" means any forest lands i n the licence area from or on which substantially a l l mature timber has been cut, logged, or destroyed, and on which trees of young growth i n su f f i c i e n t numbers to produce a valuable crop according to the standards of the Forest Service have not yet been established. "Forest Service" means the Forest Service of the Depart-ment of Lands and Forests of B r i t i s h Columbia. "Higher economic use" means that use which i n the opinion of the Licensor w i l l contribute most to the good and welfare of the Province, including non-monetary uses. "Minister" means the Minister of Lands and Forests and his successors i n o f f i c e . "Other tenure" means any t i t l e , licence, lease, or berth whereby the Licensee has the right to cut timber on land included i n Schedule "A" hereto, or on land that subsequently may be acquired by the Licensee and added to the licence pursuant to Clause 7 hereof. - 22 -"Management working plan" means the management and working plan submitted by the Licensee with the application for this tree farm licence and approved prior to the execution of these presents and subsequent revised management working plans to be submitted by the applicant i n accordance with the terms of t h i s licence as herein appearing. 53. This licence shall enure to the benefit of and shall be binding upon, not only the parties hereto, but also the successors i n o f f i c e of the Minister and tbe successors and assigns of the Licensee, respectively. 54. This agreement i s subject to the provisions of the "Forest Act" and such amendments thereto as may be made from time to time. IN WITNESS WHEREOF the Licensor has executed these presents and the Licensee has hereunto affixed i t s corporate seal by the hands of i t s proper o f f i c e r s i n that behalf. SIGNED SEALED AND DELIVERED i n the presence oft Witness Minister of Lands and Forests THE COMMON SEAL OF THE LICENSEE was hereunto affixed i n the presence of: APPENDIX II SAMPLE CUTTING PERMIT PAOB 1 PROVINCE OF BRITISH COLUMBIA F O R E S T S E R V I C E DEPARTMENT OF LANDS AND FORESTS Tree-farm Licence No. Cutting Permit No. Under authority of section of Tree-farm Licence No , permission is hereby granted the ... during the period from to - to cut and remove under terms and conditions herein specified, together with all other Cutting Permits issued for Tree-farm Licence No.__ and applicable to such period, a volume of timber not exceeding the approved cutting budget for the licence area. 1. DESCRIPTION OF PERMIT AREA (Crown Lands and (or) Tenures Other than Crown Land) as shown out-lined on the attached sketch. 2. AREAS APPROVED FOR CUTTING F.S. 427 (1)—o PAGE 2 3. PAYMENTS (a) Timber from Crown lands:— The Permittee agrees to pay in addition to any other payment as provided in the Tree-farm Licence a stumpage price (inclusive of royalty) for the timber at the following rates immediately upon receipt of account:— (b) Timber from lands other than Crown lands:— Royalties, as provided in the " Forest Act " and amendments, for timber cut as authorized herein shall be payable to the Forest Service immediately upon receipt of account. 4. CONDITIONS Any and all cutting on and removal of timber under this Cutting Permit shall be carried out in strict conformity with the provisions of the " Forest Act " and regulations made thereunder and with the Working Plan, and in general conformity with the intent and purpose of the Tree-farm Licence in so far as sustained-yield and management practices are concerned. Without limiting the generality of the foregoing, the Permittee shall comply fully with the following conditions:— (a) Timber marks:— (i) No timber shall be removed from Crown lands within the Permit area until same has been conspicuously marked with the following registered mark(s):— (ii) No timber shall be removed from other tenures within the Permit area until same has been conspicuously marked with the proper marks applicable in accordance with the provisions of the " Forest Act." (b) All trees as hereinafter defined, and only such trees, shall be cut :— F.S. 427 (2)—o PAGE 3 (c) Stumps shall be cut as low as practical and not higher than. - inches on the side adjacent to the highest ground, and trees shall be utilized to as low a top diameter as practical and to a maximum diameter of inches, where merchantable. (d) (i) Slash resulting from the operations shall be disposed of as follows:— (ii) As far as practicable, all branches of the logging operation shall keep pace with one another, and in no instance shall slash-disposal be allowed to fall behind cutting, except with the written consent of the Forest Officer in charge. (e) All provisions of the Forest Act and regulations passed thereunder in connection with the preven-tion and suppression of forest fires shall be observed. (/) Other conditions.— (i) No deviation will be permitted from the conditions embodied in this cutting permit without the prior written approval of the Forest Officer in charge. (ii) Trees designated for cutting in Provision 4 (6) which are left uncut, any standing merchant-able trees that have been isolated or rendered economically inaccessible, timber not utilized to the top diameter specified, trees cut higher than the stated stump height, or any felled mer-chantable timber not removed from any portion of the cutting area shall be scaled, measured, or counted as hereinafter provided and will be assessed at twice the stumpage rate set forth in Provision 3 of this cutting permit. (iii) No damage will be done to reproduction or any tree designated to be left standing in areas not approved for clear cutting, burning, or scarifying. Any damage will be paid for as follows:— (iv) All timber cut under this cutting permit shall be scaled in accordance with the provisions of the Forest Act, amendments to same, regulations, and any instructions issued by the District Forester. The District Forester in charge may at any time designate in writing the place for scaling of any timber cut under this cutting permit. 427 (3) —1M-1161-5698 P A G E 3A Tree-farm Licence No Cutting Permit No. ,? Condition 4 (/) Effective Expires CONDITION 4 (/) OF CUTTING PERMIT During the periods between reappraisal or during the extension period the stumpage rates as established under Condition 3 (a) or Condition 6 of this Cutting Permit of any or all species quoted in Provision VII below will be adjusted up or down whenever the average market value of logs or (dressed lumber f.o.b. car) as determined by the Chief Forester (which determined value shall hereinafter be referred to as the Average Market Value) has departed by 15 per cent or more from the Average Market Value which formed the basis on which the last existing stumpage rate was established, provided: — I. The Basic Ratio shall be the relationship of the stumpage rate set or later established by reappraisal to the Average Market Value on which said stumpage was established. II. When the Average Market Value is greater than that quoted in Provision VII below or later estab-lished by reappraisal, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be five-fourths (V,) of the Basic Ratio times the new Average Market Value, provided such stumpage rate shall be rounded off to the nearest ten (10) cents III. When the Average Market Value is less than that quoted in Provision VII below or later established by reappraisal, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be three-quarters (•% ) of the Basic Ratio times the new Average Market Value, provided such stump-age rate shall be rounded off to the nearest ten (10) cents. IV. Notwithstanding the provisions of II and III above, when the Average Market Value has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, and at the same time is within the ran e^ of 10 per cent of the Average Market Value quoted in Provision VII below or later established by reappraisal, the new stumpage rate shall be the rate as set out in Condition 3 (a) of the permit or later established by reappraisal. A further adjustment will be made in accordance with II or III above when the Average Market Value has departed not less than 15 per cent from that quoted in Provision VII below. V. Notwithstanding any other condition set out herein, the new stumpage rate as a result of any adjust-ment shall not be less than the minimum used by the Forest Service for stumpage appraisals at the time of the adjustment. VI. Notwithstanding the provisions of II and III above, the increase or decrease in stumpage rate per C c f as a result of any adjustment made in accordance with these provisions shall not exceed 50 per cent of the change in the market value. VII. The Average Market Values which formed the basis on which the stumpage rates set out in Condi-tion 3 (a) were established are as follows.— Species Average M a r k e t Va lue Species Average M a r k e t V a l u e N . B . — T h e above Average M a r k e t Values w i l l be re-established by reappraisal as provided for by C o n d i -t ion 3 (a) or 6 of this Permit . VIII. All material scaled on and after the date specified in the notice of adjustment shall be paid for at the stumpage rates set out therein. IX. The District Forester shall determine the revised rates of stumpage and notify the permittee of such rates and effective date thereof. F S 427 (3A) — O PAGE 4 5. FAILURE TO COMPLY WITH PERMIT PROVISIONS Failure to comply with any of the Permit provisions shall subject this Permit to cancellation or suspen-sion by the Minister of Lands and Forests, whose decision will be final in the interpretation of any of the terms and conditions thereof. 6. EXPIRY This Permit shall expire on the.— day of_ _. 19 when all rights of cutting by the Permittee shall absolutely terminate; provided that the Chief Forester may, for good cause, extend the said term, which he may do for a period not exceeding one year, when the conditions and stumpage may be changed as the Chief Forester may decide. Date -Chief Forester. F S 427 (4)—o APPENDIX III SAMPLE TIMBER SALE CONTRACT Ii F.S.99 (1)— 0 PAGE 1 PROVINCE OF BRITISH COLUMBIA FOREST SERVICE DEPARTMENT OF LANDS AND FORESTS T I M B E R S A L E C O N T R A C T X Forest District THIS INDENTURE, made the day of __, A.D. 19 Between: Her Majesty the Queen (herein represented and acting by who is hereinafter called the " Licensor "), OF THE ONE PART, and who, together with executors, administrators, successors, and assigns, is hereinafter called the " Licensee," OF THE OTHER PART. WITNESSETH that, in consideration of the payments and stipulations to be made and observed by and on the part of the Licensee and of the Licensee's offer to purchase made under and subject to the provisions of Part III of the " Forest Act," the Licensor doth hereby grant unto the Licensee, subject to the provisions of the said Act, and for the term and subject to the reservations and conditions hereinafter provided, a licence to cut and remove all the dead timber, standing or down, and all the live timber designated for cutting by a Forest Officer, merchantable as hereinafter defined, upon an area which is agreed to comprise acres, more or less, situated and described hereunder, from the date hereof, for the term of years ensuing. Description of Timber Sale Area—1. As shown outlined upon the map hereto annexed :— E N M £ N F . S . 99 ( 2 ) — 0 PAGE 2 Payments—2. In consideration whereof the Licensee hereby covenants, promises, and agrees with the Licensor as follows: The Licensee shall pay to the said Licensor the several sums at the times and in the manner following, namely:— (a) A stumpage price (inclusive of royalty) for the timber at the following rates, payable immediately upon receipt of account:— (b) An annual rental, based on acres, at the rate of per acre, amounting to $ further payments to be made annually in advance on the day of in each year hereafter during the continuance of the licence hereby granted: Provided that such annual rental is to be reduced in each year by the omission from its computation of not less than six hundred and forty acres as provided in section 17, subsection (2) (b), of the " Forest Act." (c) All forest-protection dues as provided in the " Forest Act " and amendments, payable annually in advance on the day of in each year during the life of this contract. (d) The cost of cruising and advertising incident to this contract, being the sum of $ (e) The cost of scaling, payable immediately upon receipt of account. Conditions—3. And the Licensee further covenants, promises, and agrees to cut and remove said timber in strict accordance with the following conditions and with all regulations and provisions governing timber sales in the " Forest Act " and amendments:— (a) No timber will be removed from the sale area until it has been conspicuously marked with the following registered mark issued for this timber sale: / \ (b) Stumps will be cut so as to cause the least practicable waste, and will not be cut higher than the diameter of the tree at the point where it is cut, and in no case higher than inches on the side adjacent to the highest ground except in unusual cases in the discretion of the officer of the Forest Service in charge. All trees will be utilized to as low a diameter in the tops as practicable, so as to cause the least waste, and to the minimum diameter of inches when merchantable in the judgment of the officer of the Forest Service in charge. Log lengths will be varied so as to provide for the complete utilization of merchantable timber. * F . S . 9 9 ( 3 ) 0 PACE 3 (c.) Timber described as follows shall be considered merchantable under terms of this contract, and may be designated for cutting by the Forest Officer. (d) All trees, designated as hereinafter defined, shall be cut:— (e) No damage will be done to young growth or to trees left standing. So far as practicable, trees will be felled uphill, and no trees will be left lodged in the process of felling. If trees or young growth designated to be left standing are badly damaged during the process of logging, they will be paid for at the rate of $ per tree. $ per acre. (/) When operations are begun on any natural logging area the cutting on that area shall be fully completed to the satisfaction of the Forest Officer in charge before cutting may begin on other areas, unless such cutting is authorized in writing with the requirement that cutting shall be completed on the area left unfinished as soon as practicable. (g) As far as practicable, all branches of the logging operation shall keep pace with one another, and in no instance shall slash-disposal be allowed to fall behind cutting, except with the written consent of the Forest Officer in charge. ' (h) All timber cut under this contract shall be scaled in accordance with the provisions of the " Forest Ac t " and amendments and regulations, and in no case will any such timber be manu-factured or sold until it has been properly scaled as provided in the " Forest Act " and amend-ments and regulations. The District Forester in charge may at any time during the term of this contract, or any extension thereto, designate in writing the place for scaling of any timber cut under this contract: Provided, however, that where this contract authorizes the cutting of sawlogs, and sawlogs are cut, then such sawlogs shall be scaled according to the British Columbia Cubic Scale. (/) Trees designated for cutting in clause (d) which are left uncut, timber wasted in tops and stumps, trees left lodged in the process of felling, and any merchantable timber which is cut and not removed from any portion of the cutting area after logging on that portion of the cutting area is completed shall be scaled, measured, or counted as hereinbefore provided, and paid for as follows:— • F . S . 99 (2).—5M-461-1117 ( 2 ) PAOE 4 (/) Slash will be disposed of as follows (k) Provisions for fire-protection: As provided by Part XI of the " Forest Act." (/) Other clauses:— (m) The Licensor reserves the right to grant rights-of-way to other persons across, through, or over the sale area hereinbefore described, provided, however, the rights-of-way so granted shall not unnecessarily interfere with the Licensee's rights under this contract or with the Licensee's ' improvements on' the said sale area, or give any rights to use the Licensee's' improvements .without the consent of the said Licensee while this'contract is in effect. Provided that, upon expiration of the said term, all rights of the Licensee hereunder shall absolutely terminate, and any and all timber cut from and lying on the said lands shall become the absolute property of the Licensor: Provided that the Minister of Lands and Forests may for a good and sufficient reason extend this contact for atperiod in keeping with the term of this contract and the operating history to date, when the stumpage may be varied on the basis of reappraisal and stumpage adjustment currently in use by the. Forest Service at.the time the reappraisal or adjustment is made. PAGE 4A OTHER CLAUSES—Continued Notwithstanding the rates bid as set out in condition 2 (a), stumpage rates of any or all species quoted in provision (vii) below will be adjusted up or down whenever the average market value as determined by the Chief Forester (which determined value shall hereinafter be referred to as the "Average Market Value ") has departed by 15 per cent or more from the Average Market Value which formed the basis on which the existing stumpage rates were established, provided:— (i) The Basic Ratio shall be the relationship of the stumpage rate bid to the Average, Market Value quoted in provision (vii) below. (ii) When the Average Market Value is greater than that quoted in provision (vii) below, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be five-fourths (%) of the Basic Ratio times the new Average Market Value; provided such stumpage rate shall be rounded off to the nearest ten (10) cents. (iii) When the Average Market Value is less than that quoted in provision (vii) below, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be three-quarters (% ) of the Basic Ratio times the new Average Market Value; provided such stumpage rate shall be rounded off to the nearest ten (10) cents. (iv) Notwithstanding the provisions of any other clause, when the Average Market Value has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, and at the same time is within the range of 10 per cent of the Average Market Value quoted in provision (vii) below, the new stumpage rate shall be the original rate bid (as set out in condition 2 (a) of the contract). A further adjustment will be made in accordance with (ii) or (iii) above when the Average Market Value has departed not less than 15 per cent from that quoted in provision (vii) below. (v) Notwithstanding any other condition herein, except as provided in clause (iv), the new stumpage rate as a result of any adjustment shall not be less than the minimum used by the Forest Service for stumpage appraisals at the time of the adjustment. (vi) . The increase or decrease per C c.f. in stumpage rate as a result of any adjustment made in accordance with clause (ii) or (iii) above shall not exceed one-half of the increase or decrease per M b.m. in the Average Market Value. (vii) The Average Market Values which formed the basis on which the stumpage rates set out in condition 2 (a) were established are as follows:— Species Average Market Value ,Species Average Market Value (viii) All material scaled on and after the date specified in the notice of adjustment shall be paid for at the stumpage rates set out therein, (ix) The District Forester shall determine the revised rates of stumpage and notify the licensee of such rates and effective date thereof. F.S.231 (4A)—o * F . S . 99 ( 5 ) - 0 PACE 5 The Licensee agrees that the sum of $ which accompanied tender for timber covered by this contract, shall be held until the completion of the contract; and provided that the contract has been faithfully carried out to the satisfaction of the Licensor will be refunded; otherwise this amount will be subject to such deductions as the Licensor may find necessary in order to carry out the full intent and provisions of this contract; or otherwise will be applied for damages or other charges. Except as may otherwise be provided by any Statute or Order in Council that may from time to time be in force, all timber cut under this contract shall be used in this Province, or be manufactured in this Province into boards, laths, shingles, or other sawn lumber, to such an extent to be of use in the trades without further manu-facturing, except in the case of piles, telegraph and telephone poles, ties, and crib timber, which may be exported under an Order in Council. The Licensee covenants with the Licensor:— (a) That he will not assign or transfer the licence hereby granted or any interest therein without the written consent of the Licensor first had and obtained: {b) That in carrying out his operations under this licence he will in no way block, obstruct, or damage any road, trail, or other property, and any obstruction caused or damage done by him will be removed and repaired forthwith by the Licensee at his own expense. The decision of the Minister of Lands and Forests will be final in the interpretation of any of the terms and conditions of this contract. The Forest Officer in charge, by giving notice to that effect in writing to the Licensee, or to the person in charge of logging operations upon the area, may suspend any logging or milling operations conducted upon this area, should violation of any of the terms, covenants, provisos, or conditions of this contract have occurred; and such violation shall render this contract liable to cancellation by the Minister of Lands and Forests. Provided further that the interest, rights, and privileges of the Licensee in the said hereditaments, tene-ments, and premises shall be construed as subject always to all the provisions of the " Forest Act " and amendments thereof. The Licensor reserves the right to suspend or cancel this contract if the Licensee is, or becomes, bankrupt or insolvent, unless the Licensee's account with the Forest Service is paid up in full and continues in that condition. The Licensee agrees that any person or persons who conducts or is conducting operations on the licence area to the knowledge of or with the consent of the Licensee is and are the agents or servants of the Licensee. In witness whereof the parties hereto have hereunto set their hands and seals the day and year first above written. Signed, sealed, and delivered by the ) Licensor in the presence of— | S P Signed, sealed, and delivered by the 1 E Licensee in the presence of— ) C 0 I N M L e Y N, SEAL (Licensee or Purchaser.) NOTE.—If contracting party is a copartnership, the instrument must be signed and sealed by each member of the partnership. All written signatures must be made in ink. It contracting party is a corporation, the corporate seal must be affixed by the officials who are authorized to execute deeds on behalf of the corporation and be accompanied by the signature of these officials. APPENDIX IV LIST OF TREE FARM LICENCES AWARDED UP TO 31st DECEMBER 1961 31st December 1961. TREE FARM LICENCES AWARDED _ _ T „ Forest X T „ . Date of T.F.L. No. _. . . . Name of Licensee , , D i s t r i c t Avard 1 1 Fr. R. Columbia Cellulose Co. Ltd. 4. 5.48 2 V Elk F a l l s Co. Ltd. 24.1.49 3 N Passmore Lumber Company Ltd. 1. 2.50 4 V I. W. McDonagh 15. 5.50 5 Pr. G. Western Plywood (Cariboo) Ltd. 15. 5.50 6 V Rayonier Canada (B.C.) Limited 26.10.50 7 V Salmon River Logging Co. Ltd. 15.12.50 8 N Boundary Sawmills Ltd. 26. 1.51 9 K S. M. Simpson Ltd. 16. 8.51 10 V Timberland Development Co. Ltd. 7.11.51 11 N Olinger Lumber Co. Ltd. 14. 1.52 12 V Bendickson Logging Ltd. 25. 2.52 13 N Galloway Lumber Co. Ltd. 17. 6.52 »• " " " Extension 27.11.59 14 N Crestbrook Timbers Limited 23.12.53 15 K Oliver Sawmills Limited 22. 4.54 16 K Pondosa Pine Lumber Co. Ltd. 22. 4.54 17 V Evans Products Co. Ltd. 29. 7.54 18 K Clearwater Timber Products Ltd. 2.11.54 19 V Tahsis Company Ltd. 23.12.54 20 V MacMillan Bloedel & Powell River 24. 1.55 (Tafino Industries Ltd. Tree Farm Licences Awarded (Cont'd) 21 Y MacMillan Bloedel & Powell River 19. 3.555 (Alberni Industries Ltd. 22 V B.C. Forest Products Ltd. 18. 5.55 23 N Celgar Limited 20. 7.55 24 Pr. R. Rayonier Canada (B.C.) Limited 2. 5.58 25 V-Pr. R. Rayonier Canada (B.C.) Limited 21.5.58 26 V Corporation of the District of Mission. 22. 7.58 27 V Moore Whittington Lumber Co. Ltd. 20.10.58 28 Pr. G. Shelley Development Ltd. 1. 5.59 29 Pr. G. Eagle Lake Sawmills Ltd. 4. 5.59 30 Pr. G. Sinclair Spruce Lumber Co. Ltd. 30. 6.59 31 Pr. G. Upper Fraser Spruce Mills Ltd. 29. 6.59 32 K Vernon Box & Pine Lumber Co. Ltd. 29. 6.59 33 K Shusvap Timbers Ltd. 20. 7.59 34 Pr. G. Chureh Sawmill Ltd. 27. 8.59 35 K B.C. Interior Sawmills Ltd. 8. 9.59 36 V F & R Legging Co. Ltd. 23.12.59 37 V Canadian Forest Products Ltd. 28.12.60 38 V Empire Mills Limited 2. 6.61 39 V-Pr. R. MacMillan Bloedel & Powell River Ltd. 27.10.61 APPENDIX V DETAILS OF TREE FARM LICENCES AWARDED UP TO 31st DECEMBER 1961 TREE FARM LICENCES AWARDED December 31, 1961. Total Allowable Forest D i s t r i c t TFL Productive Area (Acres) Area Total Mature Volume (M C U.ft )Annual Cut No. Name Licensee Crown Private Total (Acres) Crown Private Total (M cu.ft.) 2 "Duncan Bay" Elk Falls Co. Ltd. 163,612 116,946 280,558 378,371 - 15,000 4 "Blind Channel" I.W. McDonagh 3,881 - 3,881 310,545 4,353 6,399 - 6,399 208 6 "Quatsino" Rayonier Canada B.C.Ltd. 196,092 114,453 432,274 983,512 461,939 1,445,451 25,800 7 "Salmon River" MacMillan, Bloedel and Powell River Ltd. 87,512 48,742 30,526 118,038 164,346 357,862 170,160 2,630 528,022 10,800 10 "Toba" Timberland Development Co. 545 49,287 491,874 153,357 155,987 1,900 12 "Hardwicke" Bendickson Logging Ltd. 17,572 2,801 640 20,373 67,380 23,207 33,1C9 7,862 40,971 1,330 17 "Knight Inlet" Evans Products Co. Ltd. 66,740 164,180 473,900 437,429 " 437,429 4,000 19 "Tahsis" Tahsis Company Ltd. 2 7 , 5 a 191,721 398,122 785,190 156,532 941,722 12,400 20 "Tofino" ) MacMillan, Bloedel and 233,044 144,452 377,496 426,123 1,182,095 619,567 1,801,662 20,548 21 "Alberni" ) Powell River Ind. Ltd. 280,574 271,454 552,028 634,250 1,563,494 1,795,880 3,359,374 37,220 22 "Macquinnn" B.C.Forest Products Ltd. 180,955 67,568 248,523 392,683 1,313,601 408,641 1,722,242 24,000 25 " Nairn" Rayonier Canada B.C.Ltd. 119,807 72,513 192,320 345,229 339,982 288,463 628,445 14,400* 26 "Mission Municipal" Corporation of the 17,063 D i s t r i c t of Mission 13,449 2,664 16,113 17,860 16,013 1,050 425 27 "Nitinat" Moore-Whittington Lumber 26,274 3,729 30,003 13,390 34,724 19,165 172,542 20,307 2,624 192,849 2,400 36 "C order o" F & R Logging Co. Ltd. 12,141 1,249 49,828 52,452 870 37 "Nimpkish" Canadian Forest Prod.Ltd. 124,207 104,499 228,706 457,895 574,961 551,909 1,126,870 20,400 38 "Squamish" Empire Mills Ltd. 79,964 565 . 80,529 313,658 382,369 2,605 384,974 4,150 39 "Haida" MacMillan, Bloedel and Powell River Ltd. 247,821 193,674 441,495 501,926 604,809 663.677 1.268,486 43.9L2* Vancouver Pr. Rupert 1 "Port Edward" 24 "Moresby" 25 "Naka" 39 "Haida" TOTAL Columbia Cellulise Co. Rayonier Canada B.C.Ltd. Rayonier Canada B.C.Ltd. MacMillan, Bloedel and Powell River Ltd. TOTAL 2,066,567 1,155,819 3,222,386 5,513,856 8,956,552 5,153,846 U, 110,398 239,763 721,036 112,718 80,207 11,924 21,219 26,294 732,960 133,937 106,501 1,961,399 2,564,370 297,228 497,345 796,033 173,946 54,260 97,259 91,200 2,618,630 594,604 265,146 22,000 7,500 - ** 332.890 157,049 489,939 513.731 1.146,195 523.115 1.669.310 - ** 1,246,851 216,486 1,463,337 3,568,391 4,381,856 765,834 5,147,690 29,500 J TREE FARM LICENCES AWARDED Total Allowable Foreet TFL Productive Area (Acres) Area Total Mature Volume (M cu.ft.) Annual Cut D i s t r i c t No Name Licensee Crown Private Total (Acres) Crown Private Total (M cu.ft.) Pr.George 5 "MacKenzie-Cariboo" Western Plywood (Cariboo) 81,215 195 81,410 83,960 106,597 163 106,760 2,500 28 "Shelley" Shelley Development Ltd. 71,635 9,633 81,268 89,538 90,018 10,039 100,057 2,800 29 "Eagle Lake" Eagle Lake Sawmills Ltd. 95,593 1,224 96,817 105,912 208,847 3,835 212,682 2,000 30 " S i n c l a i r " S i n c l a i r Spruce Lbr.Co.Ltd 71,083 - 71,083 84,373 112,199 - 112,199 1,073 31 "McGregor" Upper Fraser Spruce M i l l s 42,534 - 42,534 45,761 102,338 - 102,338 1,038 34 "Seebach" Church Sawmill Ltd. 42.071 - 42,071 53,858 98,630 = 98.630 822. TOTAL 404,131 11,052 415,163 463,402 718,629 14,037 732,666 9,195 • Kamloops 9 "Okanagan (West)" S.M. Simpson Ltd. 169,531 1,102 170,633 195,435 89,522 1,180 90,702 1,680 15 "Inkaneep" Oliver Sawmills Ltd. 90,540 160 90,700 119,600 38,874 - 38,874 800 36 "Monte Lake" Pondosa Pine Lumber Co. 122,169 - 122,169 128,756 46,505 - 46,505 1,000 18 "Clearwater" Clearwater Timber Prod. 161,047 - 161,047 184,405 123,453 - 123,453 2,500 32 "Bolean" Vernon Box & Pine Co.Ltd. 31,074 250 31,324 32,721 24,846 573 25,419 550 33 "Sicamous" Shuswap Timbers Ltd. 14,565 280 14,845 22,210 27,622 567 28,189 385 35 " Jamieson Creek" B.C. Inter l o r Sawmills Ltd. 97.236 - 97,236 100.964 46.584 = 46.584 1.170 TOTAL 686,162 1,792 687,954 784,091 397,406 2,320 399,726 8,085 ' Nelson 3 " L i t t l e Slocan" Passmore Lumber Co. Ltd. 100,085 - 100,085 196,625 52,879 - 52,879 2,000 8 "Boundary Creek" Boundary Sawmills Ltd. 89,530 - 89,530 111,010 59,620 - 59,620 1,260 11 "Carmi" Olinger Lumber Co. Ltd. 64,787 - 64,787 . 80,815 17,400 - 17,400 800 13 " B u l l River" Galloway Lumber Co Ltd. 38,856 • - 38,856 100,280 45,704 - 45,704 1,100 14 "Spilllmftcheen" Crestbrook Timbers Ltd. 67,925 3,790 71,715 308,294 54,622 7,011 61,633 1,500 23 "Arrow Lakes" Celgar Limited 827.271 36.490 863.761 2,537.673 1.108.560 341.715 1,450,275 30.000 s i > " TOTAL 1,188,454 40,280 1,228,734 3,334,69? 1,338,785 348,726 1,687,511 36,600 GRAND TOTAL 5,592,165 1,425,480 7,017,645 13,660,541 15,793,228 6,284,763 22,077,991 323,203 k This cut i s for entire area including Prince Rupert Blocks. kk Total allowable cut for Licence shown under Vancouver D i s t r i c t . PAGE 1 PROVINCE OF BRITISH COLUMBIA F O R E S T S E R V I C E DEPARTMENT OF LANDS AND FORESTS Tree-farm Licence No. Cutting Permit No. Under authority of section of Tree-farm Licence No , permission is hereby granted the during the period from.. to to cut and remove under terms and conditions herein specified, together with all other Cutting Permits issued for Tree-farm Licence No and applicable to such period, a volume of timber not exceeding the approved cutting budget for the licence area. 1. DESCRIPTION OF PERMIT AREA (Crown Lands and (or) Tenures Other than Crown Land) as shown out-lined on the attached sketch. 2. AREAS APPROVED FOR CUTTING F.S. 427 (1)—o P A G E 2 3. PAYMENTS (a) Timber from Crown lands:— The Permittee agrees to pay in addition to any other payment as provided in the Tree-farm Licence a stumpage price (inclusive of royalty) for the timber at the following rates immediately upon receipt of account:— (b) Timber from lands other than Crown lands:— Royalties, as provided in the " Forest Ac t " and amendments, for timber cut as authorized herein shall be payable to the Forest Service immediately upon receipt of account. 4. CONDITIONS Any and all cutting on and removal of timber under this Cutting Permit shall be carried out in strict conformity with the provisions of the " Forest Act " and regulations made thereunder and with the Working Plan, and in general conformity with the intent and purpose of the Tree-farm Licence in so far as sustained-yield and management practices are concerned. Without limiting the generality of the foregoing, the Permittee shall comply fully with the following conditions:— (a) Timber marks:— (i) No timber shall be removed from Crown lands within the Permit area until same has been conspicuously marked with the following registered mark(s):— (ii) No timber shall be removed from other tenures within the Permit area until same has been conspicuously marked with the proper marks applicable in accordance with the provisions of the " Forest Act." (b) All trees as hereinafter defined, and only such trees, shall be cut :— F.S. 427 (2)—o P A G E 3 (c) Stumps shall be cut as low as practical and not higher than inches on the side adjacent to the highest ground, and trees shall be utilized to as low a top diameter as practical and to a maximum diameter of inches, where merchantable. (d) (i) Slash resulting from the operations shall be disposed of as follows:— (ii) As far as practicable, all branches of the logging operation shall keep pace with one another, and in no instance shall slash-disposal be allowed to fall behind cutting, except with the written consent of the Forest Officer in charge. (e) All provisions of the Forest Act and regulations passed thereunder in connection with the preven-tion and suppression of forest fires shall be observed. (/) Other conditions:— (i) No deviation will be permitted from the conditions embodied in this cutting permit without the prior written approval of the Forest Officer in charge. (ii) Trees designated for cutting in Provision 4 (b) which are left uncut, any standing merchant-able trees that have been isolated or rendered economically inaccessible, timber not utilized to the top diameter specified, trees cut higher than the stated stump height, or any felled mer-chantable timber not removed from any portion of the cutting area shall be scaled, measured, or counted as hereinafter provided and will be assessed at twice the stumpage rate set forth in Provision 3 of this cutting permit. (iii) No damage will be done to reproduction or any tree designated to be left standing in areas not approved for clear cutting, burning, or scarifying. Any damage will be paid for as follows:— (iv) All timber cut under this cutting permit shall be scaled in accordance with the provisions of the Forest Act, amendments to same, regulations, and any instructions issued by the District Forester. The District Forester in charge may at any time designate in writing the place for scaling of any timber cut under this cutting permit. F.S 427 (3)—1M-1161-5698 P A G E 3A Tree-farm Licence N o . Cutting Permit N o . Condition 4 (/) Effective -Expires CONDITION 4 (/) OF CUTTING PERMIT During the periods between reappraisal or during the extension period the stumpage rates as established under Condition 3 (a) or Condition 6 of this Cutting Permit of any or all species quoted in Provision VII below will be adjusted up or down whenever the average market value of logs or (dressed lumber f.o.b. car) as determined by the Chief Forester (which determined value shall hereinafter be referred to as the Average Market Value) has departed by 15 per cent or more from the Average Market Value which formed the basis on which the last existing stumpage rate was established, provided:— I. The Basic Ratio shall be the relationship of the stumpage rate set or later established by reappraisal to the Average Market Value on which said stumpage was established. II. When the Average Market Value is greater than that quoted in Provision VII below or later estab-lished by reappraisal, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be five-fourths (%) ° f the Basic Ratio times the new Average Market Value, provided such stumpage rate shall be rounded off to the nearest ten (10) cents. III. When the Average Market Value is less than that quoted in Provision VII below Or later established by reappraisal, and at the same time has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, the new stumpage rate shall be three-quarters (%) of the Basic Ratio times the new Average Market Value, provided such stump-age rate shall be rounded off to the nearest ten (10) cents. IV. Notwithstanding the provisions of II and III above, when the Average Market Value has departed not less than 15 per cent from the Average Market Value which formed the basis on which the existing rates were established, and at the same time is within the range of 10 per cent of the Average Market Value quoted in Provision VII below or later established by reappraisal, the new stumpage rate shall be the rate as set out in Condition 3 (a) of the permit or later established by reappraisal. A further adjustment will be made in accordance with II or III above when the Average Market Value has departed not less than 15 per cent from that quoted in Provision VII below. V. Notwithstanding any other condition set out herein, the new stumpage rate as a result of any adjust-ment shall not be less than the minimum used by the Forest Service for stumpage appraisals at the time of the adjustment. VI. Notwithstanding the provisions of II and III above, the increase or decrease in stumpage rate per C c.f. as a result of any adjustment made in accordance with these provisions shall not exceed 50 per cent of the change in the market value. VII. The Average Market Values which formed the basis on which the stumpage rates set out in Condi-tion 3 (a) were established are as follows:— Species Average M a r k e t V a l u e Species Average M a r k e t V a l u e N . B . — T h e above Average M a r k e t Values w i l l be re-established by reappraisal as provided for by C o n d i -t ion 3 (a) o r 6 of this Permit . VIII. All material scaled on and after the date specified in the notice of adjustment shall be paid for at the stumpage rates set out therein. IX. The District Forester shall determine the revised rates of stumpage and notify the permittee of such rates and effective date thereof. F S . 427 (3A)—O PAGE 4 5. FAILURE TO COMPLY WITH PERMIT PROVISIONS Failure to comply with any of the Permit provisions shall subject this Permit to cancellation or suspen-sion by the Minister of Lands and Forests, whose decision will be final in the interpretation of any of the terms and conditions thereof. 6. EXPIRY This Permit shall expire on the day of __ ___ , 19 when all rights of cutting by the Permittee shall absolutely terminate; provided that the Chief Forester may, for good cause, extend the said term, which he may do for a period not exceeding one year, when the conditions and stumpage may be changed as the Chief Forester may decide. Date - —~ — Chief Forester. F.S. 427 (4)—o December 31, 1961. TREE. FARM LICENCES AWARDED Forest D i s t r i c t (Acres) Total Allowable TFL Productive Area Area Total Mature Volume (M cu.ft )Annual Cut No. Name Licensee Crown Private Total (Acres) Crown Private Total (M cu.ft.) 2 "Duncan Bay" Elk Falls Co.' Ltd. 163,612 116,946 280,558 378,371 _ 15,000 4 "Blind Channel" I.W. McDonagh 3,881 196,092 - 3,881 4,353 6,399 983,512 - 6,399 208 6 "Quatsino" Rayonier Canada B.C.Ltd. 114,453 310,545 432,274 461,939 1,445,451 25,800 7 "Salmon River" MacMillan, Bloedel and Powell River Ltd. 87,512 4-8,742 30,526 118,038 164,346 357,862 170,160 2,630 528,022 10,800 10 "Toba" Timberland Development Co. 545 49,287 491,874 153,357 155,987 1,900 12 "Hardwicke" Bendickson Logging Ltd. 17 9 572 2,801 640 20,373 67,380 23,207 33,1C9 7,862 40,971 1,330 17 "Knight Inlet" Evans Products Co. Ltd. 66,740 164,180 473,900 437,429 - 437,429 4,000 19 "Tahsis" Tahsis Company Ltd. 27,5a 191,721 377,496*-398,122 426,123 785,190 156,532 941,722 12,400 20,548 20 "Tofino" ) MacMillan, Bloedel and 233,044 144,452 1,182,095 1,563,494 619,^ 567 1,801,662 21 "Alberni") Powell River Ind. Ltd. 280,574 271,454 552,028 634,250 1,795,880 3,359,374 37,220 22 "Macquinna" B.C.Forest Products Ltd, 180,955 67,568 248,523 392,683 1,313,601 408,641 1,722,242 24,000 25 " Naka" Rayonier Canada B.C.Ltd. 119,807 72,513 192,320 345,229 339,982 288,463 628,445 14,40Q& 26 "Mission Municipal" Corporation of the Dist r i c t of Mission 13,449 2,664 16,113 17,860 16,013 1,050 17,063 425 27 "Nitinat" Moore-Whittington Lumber 26,274 3,729 30,003 34,724 19,165 172,542 20,307 192,849 2,400 36 "Cordero" F & R Logging Co. Ltd. 12,141 1,249 13,390 49,828 2,624 52,452 870 37 " Nimpkish" Canadian Forest Prod.Ltd. 124,207 104,499 228,706 457,895 574,961 551,909 1,126,870 20,400 38 "Squamish" Empire Mills Ltd. 79,964 565 80,529 313,658 382,369 2,605 384,974 4,150 39 "Ha ids" MacMillan, Bloedel and Powell River Ltd. 247,821 193,674 441,495 501,926 604,809 663,677 1,268,486 43,912fc Vancouver Pr. Rupert TOTAL 2,066,567 1,155,819 3,222,386 5,513,856 8,956,552 5,153,846 14,110,398 239,763 1 "Port Edward" 24 "Moresby" 25 "Naka" 39 "Haida" Columbia Cellulose Co. 721,036 Rayonier Canada B.C.Ltd. 112,718 Rayonier Canada B.C.Ltd. 80,207 MacMillan, Bloedel and Powell River Ltd. 332,890 11,924 732,960 1,961,399 2,564,370 21,219 133,937 297,228 497,345 26,294 106,501 796,033 173,946 54,260 2,618,630 22,000 97,259 594,604 7,500 91,200 265,146 - i 157,049 489,939 513,731 1,346,195 523.115 1,669,310 TOTAL 1,246,851 216,486 1,463,337 3,568,391 4,381,856 765,834 5,147,690 29,500 December 31, 1961. - 2 -TREE FARM LICENCES AWARDED Total Allowable Forest TFL Productive Area (Acres) Area Total Mature Volume (M cu.ft.) Annual Cut District No Name Licensee Crown Private Total (Acres) Crown Private Total (M cu.ft.) Pr.George 5 "MacKenzie-Cariboo" Western Plywood (Cariboo) 81,215 195 81,410 83,960 106,597 163 106,760 2,500 28 "Shelley41 Shelley Development Ltd. 71,635 9,633 81,268 89,538 90,018 10,039 100,057 2,800 29 "Eagle Lake" Eagle Lake Sawmills Ltd. 95,593 1,224 96,817 105,912 208,847 3,835 212,682 2,000 30 "Sinclair" Sinclair Spruce Lbr.Co.Ltd 71,083 - 71,083 84,373 112,199 - 112,199 1,073 31 "McGregor" Upper Fraser Spruce Mills 42,534 - 42,534 45,761 102,338 - 102,338 1,038 34 "Seebach" Church Sawmill Ltd.- 42,071 - 42,071 53,858'- 98,630 : 98,630 822 TOTAL 404,131 11,052 415,183 463,402 718,629 14,037 732,666 9,195 1 Kamloops 9 "Okanagan (West)" S.M. Simpson Ltd. 169,531 1,102 170,633 195,435 89,522 1,180 90,702 1,680 15 "Inkaneep" Oliver Sawmills Ltd. 90,540 160 90,700 119,600 38,874 - 38,874 800 16 "Monte Lake" Pondosa Pine Lumber Co. 122,169 - 122,169 128,756 46,505 - 46,505 1,000 18 "Clearwater" Clearwater Timber Prod. 161,047 - 161,047 184,405 123,453 - 123,453 2,500 32 "Bolean" Vernon Box & Pine Co.Ltd. 31,074 250 31,324 32,721 24,846 573 25,419 550 33 "Sicamous" Shuswap Timbers Ltd. 14,565 280 14,845 22,210 27,622 567 28,189 385 35 " Jamie son Creek" B.C.Interior Sawmills Ltd. 97,236 - 97,236 100,964 46,584 : 46,584 1.170 TOTAL 686,162 1,792 687,954 784,091 397,406 2,320 399,726 3,085" Nelson 3 "Little Slocan" Passmore Lumber Co. Ltd. 100,085 - 100,085 196,625 52,879 - 52,879 2,000 8 "Boundary Creek" Boundary Sawmills Ltd. 89,530 - 89,530 111,010 59,620 - 59,620 1,260 11 "Carmi" Olinger Lumber Co. Ltd. 64,787 - 64,737 ., 80,815 17,400 - 17,400 800 13 "Bull River" Galloway Lumber Co. Ltd. 38,856 • - 38,856 100,280 45,704 - 45,704 1,100 14 "Spillimacheen" Crestbrook Timbers Ltd. 67,925 3,790 71,715 308,294 54,622 7,011 61,633 1,500 23 "Arrow Lakes" Celgar Limited 827,271 36,490 863,761 2,537,673 1,108,560 341,715 1,450,275 30,000 TOTAL 1,188,454 40,280 1,228,734 3,334,697 1,338,785 348,726 1,687,511 36,600 " GRAND TOTAL 5,592,165 1,425,480 7,017,645 13,660,541 15,793,228 6,284,763 22,077,991 323,203 k This cut is for entire area including Prince Rupert Blocks. Mr Total allowable cut for Licence shown under Vancouver District. 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
http://iiif.library.ubc.ca/presentation/dsp.831.1-0075329/manifest

Comment

Related Items