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A systematic approach to distributing public investment to increase timber supplies in British Columbia Gasson, Robert 1980

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A SYSTEMATIC APPROACH TO DISTRIBUTING PUBLIC INVESTMENT TO INCREASE TIMBER SUPPLIES IN BRITISH COLUMBIA B.S.F., The University of B r i t i s h Columbia, 1976 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF THE FACULTY OF FORESTRY We accept t h i s thesis as conforming to the required standard.. ' THE UNIVERSITY OF BRITISH COLUMBIA July, 1980 (6) Robert Gasson, 1980 by ROBERT GASSON MASTER OF FORESTRY i n In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an a d v a n c e d d e g r e e at t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . It i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f The U n i v e r s i t y o f B r i t i s h C o l u m b i a 2075 Wesbrook Place Vancouver, Canada V6T 1W5 7.1. fo i i . ABSTRACT Supervisor: Professor J.H.G. Smith Within the recently introduced timber supply p o l i c y i n B r i t i s h Columbia there i s an emphasis on at le a s t maintaining short-term harvest rates. This imposes constraints on the type of investments that need to be undertaken. A system has been devised that w i l l i d e n t i f y and characterize the contribution of proposed investments to public timber supply goals. A stand can be harvested without f i n a n c i a l l o s s only when the mill-gate value of the stand volume exceeds, or ju s t balances, the costs of extraction and d e l i v e r y to the m i l l . The stumpage appraisal system of the Forest Service can be. used to estimate. minimum average stem volumes f or o p e r a b i l i t y over a wide range of stand and a c c e s s i b i l i t y conditions. Strategic timber supply analysis can provide a time-frame within which the benefits of investment i n s i l v i c u l t u r e must be r e a l i z e d to ensure continuity of supply. This time-frame, i n combination with the o p e r a b i l i t y -a c c e s s i b i l i t y r e l a t i o n s h i p s , i s used to erect zones for investment within the forest estate. Within any zone, at a given radius from the m i l l , a l l stands w i l l have s i m i l a r c h a r a c t e r i s t i c s f o r o p e r a b i l i t y . Stands u n l i k e l y to reach these c h a r a c t e r i s t i c s within the time-frame are candidates f o r investment. Among candidate stands there w i l l be a great v a r i a b i l i t y i n the prospective e f f i c i e n c y of investment. An investment e f f i c i e n c y r a t i o , based on phys i c a l units of production, i s provided to characterize p o t e n t i a l investments. Rules for i t s use as a c r i t e r i o n within the f i e l d of public forest management have been developed. With t h i s c r i t e r i o n annual a c t i v i t y budgets can be assembled and operational plans i n s t i t u t e d . i i i . The proposed system i s offered as a replacement f o r the e x i s t i n g process by which stand treatment guidelines are drawn up and investments undertaken by the p r o v i n c i a l Forest Service. It provides an e x p l i c i t l i n k between timber supply p o l i c y and s i l v i c u l t u r a l planning currently lacking. I t s consistent use w i l l lead to a more r a t i o n a l d i s t r i b u t i o n of resources within the framework of supply planning. I t i s expected that the system w i l l eventually be superseded by improvements i n the data base used i n s t r a t e g i c supply planning. iv. TABLE OF CONTENTS ABSTRACT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES ACKNOWLEDGEMENTS 1.0 INTRODUCTION 1.1 The Proposal 1.2 The Scope of the Proposed System 1.3 Objectives of the System 2.0 THE POTENTIAL FOR GOAL CONFLICTS 3.0 THE INVESTMENT DISTRIBUTION SYSTEM 3.1 Stand Attributes and System Benefits 12. 3.2 Flow of the Proposed System 13. 3.3 An Important Caveat 14. 4.0 HARVEST COST ZONE ANALYSIS 17. 4.1 Adjusting the Margin for the Effects of Utilization Policy 18. 4.2 Establishing Zone Boundaries 21. 4.2.1 The Logging Productivity Classification System 21. 4.2.2 Adapting the System to Provide Zone Boundaries 22. 4.2.3 Transforming the Cost-Size Relationship 24. 4.3 Using the Harvest Cost Zones 36. 5.0 DETERMINING INVESTMENT ELIGIBILITY STANDARDS 40. 5.1 Using Zonal Goals to Predetermine E l i g i b i l i t y 42. PAGE i i . iv. v i . v i i . v i i i . 1. 6. 6. 7. 9. 11. V. PAGE 6.0 ASSESSING INVENTORIED OPPORTUNITIES 47. 6.1 Measuring Stand "Worth" 49. 6.1.1 Stand Component View of Stand Value 51. 6.1.2 Total Present Worth of a Stand 53. 6.2 Marginal Effects of Investment 54. 6.2.1 System Benefits , 54. 6.2.2 Stand-Level Benefits 56. 6.2.3 Determining the Time-Frame 57. 6.2.4 Net Physical Benefit 58. 6.3 Cost Per Unit of Net Physical Benefit 59. 6.4 Assessing Inventoried Opportunities 60. 6.5 An Extension to Components: Species Preference 64. 6.6 An Extension to the CNPB: Other Resources 67. 1 6.6.1 Extended Benefits 67. 6.6.2 Extended Costs 68. 6.6.3 Selecting Preferred Alternatives 68. 6.6.4 An Example Showing the Influence of Other Resources on a Decision 68. 7.0 ASSEMBLING THE ANNUAL ACTIVITY BUDGET 72. 7.1 Ranking Opportunities by Merchantable Volume CNPB 73. 7.1.1 Identifying the Most Suitable Product for a Stand 74. 7.1.2 Ranking Dedicated Stands 77. 8.0 SUMMARY AND DISCUSSION 81. 8.1 Using the System 83. REFERENCES CITED 85. APPENDIX 88. v i . LIST OF TABLES PAGE TABLE I: LOGGING PRODUCTIVITY CLASSIFICATION BY TOTAL INDEX 31. TABLE I I : INDIVIDUAL FACTOR INDEXES FOR PERMANENT SITE FEATURES 34. TABLE I I I : PRESENT WORTH OF MAI (SYSTEM BENEFIT) FOR A STAND HARVESTABLE IN THE 3rd THROUGH. 8th DECADES FROM PRESENT .51. TABLE IV: SAWTIMBER COSTS PER UNIT OF NET PHYSICAL BENEFIT FOR FOUR HYPOTHETICAL TREATMENTS 62. TABLE V: REGRETS FOR SAWTIMBER ALTERNATIVES AT THE ADJUSTED HARVEST WINDOW LIMITS 64. TABLE VI: BASIC DATA FOR DETERMINING RELATIVE SPECIES WORTH FOR THE LODGEPOLE PINE - DOUGLAS-FIR EXAMPLE 66. TABLE VII: MAN-HOURS OF EMPLOYMENT AND MACHINE-HOURS NEEDED FOR FOUR SAWTIMBER ALTERNATIVES 69. TABLE VIII: EXTENDED CNPBs FOR SAWTIMBER ALTERNATIVES 69. TABLE IX: REGRETS FOR THE ALTERNATIVES WITH EXTENDED CNPBs 70. TABLE X: COMPARISON OF TREATMENTS 2 AND 3 IN A FIXED BUDGET 71. TABLE XI: PRESENT WORTHS OF HARVEST VOLUMES AND COSTS OF TREATMENT FOR THE MOST EFFICIENT SAWTIMBER AND MERCHANTABLE VOLUME TREATMENTS 76. y i i . LIST OF FIGURES PAGE FIGURE 1: SCHEMATIC FLOW DIAGRAM FOR THE PROPOSED SYSTEM 15. FIGURE 2: RELATIONSHIP BETWEEN MINIMUM DBE's FOR A STAND AT A SINGLE POINT IN TIME 19. FIGURE 3 : SUCCESSIVE OBSERVATIONS OF THE RELATIONSHIP BETWEEN MINIMUM DBH's FOR A STAND 20. FIGURE 4: RELATIONSHIP BETWEEN LOGGING COSTS AND MERCHANTABLE AVERAGE PIECE-SIZE FOR RECOMMENDED LOGGING SYSTEMS" 23. FIGURE 5: HYPOTHETICAL VALUE GRADIENT OF LODGEPOLE PINE STEMS 27. FIGURE 6: RELATIONSHIP BETWEEN MILLGATE VALUE AND MERCHANTABLE STAND AVERAGE STEM VOLUME 29. FIGURE 7: SCHEMATIC REPRESENTATION OF THE RELATIONSHIP BETWEEN OPERABILITY, ACCESSIBILITY AND AVERAGE PIECE-SIZE FOR LODGEPOLE PINE IN THE INTERIOR OF BRITISH COLUMBIA 30. FIGURE 8: INDICATED COSTS OF HARVESTING FOR RECOMMENDED SYSTEMS FOR STANDS AT MINIMUM OPERABILITY 32. FIGURE 9: GRAPHICAL DETERMINATION OF HARVEST COST ZONAL BOUNDARIES 35. FIGURE 10: COST ZONE AVERAGE ACCESSIBILITY - STEM VOLUME RELATIONSHIPS 38. FIGURE 11: HYPOTHETICAL BEHAVIOUR OF THE MINIMUM AGE OF HARVESTED STANDS 41. FIGURE 12: RELATIONSHIP BETWEEN AVERAGE STEM VOLUME AND AVERAGE STAND DBH FOR LODGEPOLE PINE 44. FIGURE 13: ILLUSTRATION OF THE ADDITION OF THE COMPONENTS OF WORTH OF SOCIAL INVESTMENTS 48. FIGURE 14: PLOT OF THE CNPBs FOR SAWTIMBER ALTERNATIVES 63. FIGURE 15: PLOT OF EXTENDED CNPBs FOR SAWTIMBER ALTERNATIVES 70. FIGURE 16: ILLUSTRATIVE RESPONSE TO MOST EFFICIENT SAWTIMBER, MERCHANTABLE VOLUME TREATMENTS FOR A HYPOTHETICAL STAND 75. v i i i . ACKNOWLEDGEMENT S During the gestation period for t h i s thesis Lauchlan Glen and Henry Benskin helped to i d e n t i f y the approach to take by providing sounding-boards for discussion. My research committee has been most h e l p f u l and supportive during the process of t r a n s l a t i n g the i n i t i a l concept into a thesi s . F i n a n c i a l support has come from the Un i v e r s i t y of B r i t i s h Columbia and from the Association of B r i t i s h Columbia Professional Foresters. The f i n a l year of research was funded through a Graduate Research and Engineering Technology award with the Research Branch of the p r o v i n c i a l M i n i s t r y of Forests as the cooperating agency. 1. 1.0 INTRODUCTION The forest industry i s acknowledged to be an important component of the economy of many provinces i n Canada. F a i r l y recently, fears that the industry may lose i t s i n t e r n a t i o n a l competitiveness because of poor or inadequate forest management practices have been a r t i c u l a t e d . These have ari s e n from a growing perception of the p o t e n t i a l f or interruptions i n the long-term supply of public timber. Reed (1978), i n h i s survey of forest management i n Canada, found the p o t e n t i a l f o r , at l e a s t , l o c a l supply problems i n s i x of the ten provinces. Of the s i x , B r i t i s h Columbia, Ontario and Quebec are making e f f o r t s to resolve these problems as part of a fresh approach to the management of t h e i r f orest estates. The r e s o l u t i o n of supply problems may lay within the context of the contribution of the p r o v i n c i a l forest estate to p r o v i n c i a l or regional economic development goals. Thus the question switches from "can the present l e v e l of supply be maintained?", to "what l e v e l of supply should the province, or region, maintain i n pursuit of i t s larger goals?" The degree of commitment of society's resources implied by a given l e v e l of supply must also be considered. Both- B r i t i s h Columbia and Quebec (Lussier, 1976) have begun to develop methods to determine desirable p r o v i n c i a l harvest l e v e l s . By contemplating programs of investment i n intensive f o r e s t r y , the provinces are stepping outside t h e i r t r a d i t i o n a l i n t e r p r e t a t i o n of steward-ship of natural resources. In the process they must face up to questions about the desirable d i s t r i b u t i o n of resources. The s c i e n t i f i c d i s c i p l i n e of forest economics has developed to deal with these questions. Within the context of the s o c i a l requirements of f o r e s t p o l i c y , economic planning of 2. investment programs w i l l lead to a better d i s t r i b u t i o n of resources than i s possible without reference to economic p r i n c i p l e s or with any other planning system. This thesis presents an approach to the d i s t r i b u t i o n of investment resources d i f f e r e n t from that of t r a d i t i o n a l economic analysis of f o r e s t management p r a c t i c e s . P a r t l y t h i s i s because of the desire to give greater prominence to the wider s o c i a l context of intensive management, but also to r e f l e c t bureaucratic constraints on forest management planning within B r i t i s h Columbia. In B r i t i s h Columbia the M i n i s t r y of Forests i s charged with the management of the public forest estate. It has recently adopted as i t s goal (the r e a l i z a t i o n of) "the maximum contribution of a v a i l a b l e forest and range resources, now and i n the future, toward the s o c i a l and economic well being of B r i t i s h Columbians" (Ministry of Forests, 1980). Within t h i s goal the s p e c i f i c objectives of natural resource management i n B r i t i s h Columbia have been a r t i c u l a t e d by the Premier (Province of B.C., 1978a) and interpreted by the M i n i s t r y as the need to: (a) increase employment opportunities, (b) increase r e a l incomes, (c) ensure s t a b i l i t y of employment and incomes i n both the long and short term, and (d) achieve a greater degree of regional balance i n p r o v i n c i a l economic development (Ministry of Forests, 1980). The Forest Service, as the sole agency of the M i n i s t r y , i s responsible for developing programs to further progress toward the objectives of resource p o l i c y . To t h i s end i t has recently introduced a system to i d e n t i f y the need f o r , and to plan the implementation of, programs of investment i n 3 . intensive management. The system consists of two planning l e v e l s which are not yet f u l l y integrated. The f i r s t l e v e l i s used to prepare a series of forest p o l i c y options ( l e v e l s of commitment to intensive management) from which the l e g i s l a t u r e i s to select the option appropriate f o r the province (Province of B.C., 1978). The second consists of a regional analysis of the demands on, and po t e n t i a l s of, i n d i v i d u a l management units (Ministry of Forests, 1978). The i n t e g r a t i v e f a c t o r at both l e v e l s i s the rate of harvest that the p r o v i n c i a l f o r e s t estate can sustain. There i s nothing i n t h i s system that precludes economic an a l y s i s . Indeed both planning l e v e l s begin with consideration of the demand for for e s t products and the p o t e n t i a l contribution of B r i t i s h Columbia to that demand. However, the Forest Service has not used the t r a d i t i o n a l economic d e f i n i t i o n s of supply and demand i n i t s projections. Instead, i t has based i t s analyses on phys i c a l supply and i n d u s t r i a l capacity. In t h i s i t i s r e f l e c t i n g i t s t r a d i t i o n a l o r i e n t a t i o n , developed over a long period i n the province, during which no e x p l i c i t f o r est p o l i c y d i r e c t i o n s have been provided f o r the fo r e s t estate. To an extent, the p r o v i n c i a l resource management objectives themselves provide one reason why the Forest Service has adopted phy s i c a l y i e l d as a basis f o r planning. B r i t i s h Columbia contains a large and heterogeneous f o r e s t estate i n which the d i s t r i b u t i o n of p o t e n t i a l opportunities f o r investment i s e s s e n t i a l l y haphazard with respect to p o l i t i c a l d i v i s i o n s i n the province. The requirement that investment programs recognize the need for a greater degree of regional balance can influence the i n t e r p r e t a t i o n of the other resource management objectives. For example, i f investment programs were selected i n a way which would maximize the present worth of the return to the intensive management budget, the Vancouver Resource Region, 4. w i t h i t s high s i t e s and v a l u a b l e s p e c i e s , could probably absorb the t o t a l p r o v i n c i a l commitment. Obviously t h i s would lead to a concentration of the b e n e f i t s of the investment program i n one r e g i o n at the expense of the others. The end r e s u l t of the planning process w i l l be a s e r i e s of management u n i t timber supply goals. Each goal w i l l c o n s i s t of a schedule of permitted harvest r a t e s . The planning h o r i z o n contains two phases; a short-term, w i t h i n which harvest r a t e s are to be held constant, and a long-term, w i t h i n which harvest r a t e s are to be allowed to f l u c t u a t e . The short-term c o n s i s t s of a p e r i o d of 20 years from the s t a r t of the supply plan w i t h plans to be reviewed at 5 year i n t e r v a l s ( M i n i s t r y of F o r e s t s , 1978b). Short-term supply goals are not allowed to be set at l e v e l s which w i l l prevent the f o r e s t e s t ate from p r o v i d i n g a long-run s u s t a i n a b l e y i e l d at a l e v e l a s s o c i a t e d w i t h mandatory management p r a c t i c e s . I t i s an underlying assumption of t h i s t h e s i s that there i s a strong i n t e r e s t i n maintaining h i s t o r i c harvest r a t e s i n the short-term where there i s an e x i s t i n g f o r e s t i n d u s t r y . This i s an extension of the concern f o r greater balance i n r e g i o n a l development. However, h i s t o r i c harvest r a t e s were developed under a d e f i n i t i o n of the f o r e s t e s t a t e which d i d not give adequate r e c o g n i t i o n to environmental concerns or to changes i n the f o r e s t inventory brought about by the a c t i v i t i e s of man and nature. I t i s ^ p o s s i b l e , t h e r e f o r e , that these r a t e s would lead to the development of a f o r e s t s t r u c t u r e that would be unable to support the required long-run s u s t a i n a b l e y i e l d . These r a t e s would e i t h e r have to be reduced or investment programs i n support of short-term harvest r a t e s would have to be undertaken. One p o t e n t i a l component of any such investment program i s that group of management a c t i v i t i e s that can be r e f e r r e d to as stand-tending. That i s , 5. any s i l v i c u l t u r a l technique applied to a timber stand following e s t a b l i s h -ment and p r i o r to regeneration cutting. Many of these techniques involve adjusting stand density. Characterization of these a c t i v i t i e s f o r a n a l y t i c a l purposes requires recognition of the e f f e c t s of stand density on the development of timber stands. The Forest Service i s only j u s t beginning to c o l l e c t information which w i l l enable i t to estimate the e f f e c t s of stand density on y i e l d . In addition, there are no standards f o r density within the manual of operations f o r the S i l v i c u l t u r a l Branch of the Forest Service. The p o t e n t i a l contribution of programs of stand-tending to timber supply goals can therefore only be guessed at. In the absence of a s i l v i c u l t u r a l inventory the best that can be done through the timber supply planning process i s to i d e n t i f y classes of stand-tending a c t i v i t i e s that can best contribute to supply goals on the basis of t h e i r production of merchantable volume. The assumptions made i n the planning phases about the extent of stands a v a i l a b l e f o r these p r a c t i c e s may require that f i n a n c i a l l y poor r i s k investments be undertaken. In addition, i f i t i s the short-term harvest rates which have to be supported by investment, there may be a need for programs to be begun immediately. Under these circumstances i t i s necessary to provide a means to control investment programs that i s congruent with current Forest Service p r a c t i c e s . It i s to be hoped that, given time, the Forest Service w i l l develop a more economic approach to forest management. In the meantime the introduction of basic economic p r i n c i p l e s of c o s t - e f f i c i e n c y , as proposed i n t h i s t h e s i s , should improve the q u a l i t y of investment decision-making within the Forest Service. 6 . 1.1 The Proposal A systematic approach to planning investments i n s i l v i c u l t u r e i n the p r o v i n c i a l forest estate i s required i f regional development goals are to be reached, or even approached, through intensive management. The timber supply planning system of the Forest Service provides a statement of regional resource p o l i c y i n the case where short-term harvest rates are l i m i t e d to below those required to maintain e x i s t i n g industry. A system i s described that can t r a n s l a t e timber supply goals into annual management unit investment programs under these conditions. I t has been designed to focus attention on the generation of a l t e r n a t i v e s . f o r investment. As far as possible e x i s t i n g sources of information and established administrative techniques have been incorporated into the system. The system proposes, as a guiding p r i n c i p l e , that investment must be c o s t - e f f i c i e n t with respect to the objectives of management, however these have been derived. An index of c o s t - e f f i c i e n c y has been derived for investments which have t h e i r e f f e c t s measured i n terms of purely p h y s i c a l production. This index can be used to choose among investment a l t e r n a t i v e s with common production goals. Genuine economic analysis would require that goals be formulated by reference to economic p r i n c i p l e s . The system takes management goals as given and attempts to introduce economic p r i n c i p l e s into programs undertaken to achieve them. 1.2 The Scope of the Proposed System There are both short- and. long-term objectives i m p l i c i t i n the timber supply goal-setting system. The supply planning system used by the Forest Service i d e n t i f i e s the maximum constant 20 year rate of harvest that a 7. management unit can support (Ministry of Forests, 1978). The a l t e r n a t i v e programs presented to the l e g i s l a t u r e invoke a r i s i n g , a f a l l i n g , and a constant long-term supply scenario (Ministry of Forests, 1980). Investments may be undertaken to contribute to either short- or long-term goals, or to both. Short-term supply goals are accessible to s i l v i c u l t u r a l i n v est-ment by the transfer of benefits through the forest acting as a supply system. The d e f i n i t i o n and magnitude of systemic benefits are a function not only of the structure of the fo r e s t i t s e l f , but also of the management environment. The proposed system u t i l i z e s a measure of the p o t e n t i a l contribution of an investment to short-term supply goals. I t also contains sub-systems o r i g i n a l l y designed to operate i n the e x i s t i n g public management environ-ment. For these reasons i t s scope i s l i m i t e d to investments undertaken, at l e a s t i n part, to contribute to short-term supply goals, I t i s p a r t i c u l a r l y suited for use i n those areas f o r which the Forest Service has r e s p o n s i b i l i t y for the operational planning of intensive management. This r e s p o n s i b i l i t y i s l a r g e l y concentrated i n the more than 32 m i l l i o n hectares of forest land i n public management units i n the i n t e r i o r of the province (Ministry of Forests, 1978a). This area contributed more than 45% of the p r o v i n c i a l harvest y e i l d i n 1977 and 1978. 1.3 Objectives of the System The grand objective i s to integrate s t r a t e g i c and operational planning. There are two sub-objectives: (1) To i d e n t i f y the forest estate i n which investment should be made, and (2) To allow f o r i n i t i a t i v e i n planning and innovation i n p r e s c r i p t i o n . 8. Strategic plans are subject to review as more information becomes av a i l a b l e , as trends i n u t i l i z a t i o n or consumption change, and as the perceived goals of society change. Investment decisions based on s t r a t e g i c analysis r e f l e c t the current expectations and goals of society. Once made, an investment i s "sunk" and may be made obsolete by changing circum-stances. However, when a new decision has to be made the change i n circumstances can influence the choices. A system provides a route by which changes can be incorporated into the decision-making process. Thus, i f a supply goal changes part way through an investment program the re s t of the program can be selected on the basis of the changed goal. The i n e f f i c i e n c y of investment associated with t h i s approach can be reduced i f changes can be anticipated. At present timber supply analysis uses f o r e s t inventory information which, i s not based on map g r i d coordinates. The basis f o r analysis i s the f o r e s t timber type which groups a l l areas within a management unit with s i m i l a r species composition, age c l a s s , and s i t e c l a s s . The basis for investment i s the timber stand with l o c a t i o n , as well as growth, a t t r i b u t e s . Location can influence both the costs and the benefits of investment. The Forest Service has a t r a d i t i o n of highly c e n t r a l i z e d d e c i s i o n -making which may have discouraged innovation. A d i v e r s i t y of approaches to the sol u t i o n of a problem may reduce the r i s k of f a i l u r e . People who are allowed to use i n i t i a t i v e may tend to take more i n t e r e s t i n the job. Centralized control can be exercized through regulating a decision system rather than by regulating the decisions themselves. The d i s t r i b u t i o n system recommended here may promote i n i t i a t i v e and encourage d i v e r s i t y while maintaining control. 9, 2 . 0 THE POTENTIAL FOR GOAL CONFLICTS Under B r i t i s h Columbia's f o r e s t management p o l i c y the rate at which the e x i s t i n g merchantable volume inventory i s u t i l i z e d i s linked to the future a b i l i t y of the f o r e s t to provide i n d u s t r i a l wood. This linkage i s possible because the imposition of an administration on a f o r e s t provides a timber supply system. The capacity of the system i s r e l a t e d both to the b i o l o g i c a l nature of the f o r e s t and to administrative provisions. In t h i s t hesis i t i s assumed that the emphasis i s on providing current harvests; that i s , investment in.the future growth of the forest i s under-5 taken to permit desirable short-term harvest rates. Under these conditions the worth of investments includes both short- and long-term components. The short-term component of an investment i s i t s a b i l i t y to contribute to the current harvest rate. This contribution i s r e l a t e d to the annual cut e f f e c t experienced when combining land units with complementary age c l a s s structures. However, since the benefit may a r i s e from a t t r i b u t e s other than age class structure they w i l l be referred to as system benefits. System benefits are associated with the production of merchantable volume as prescribed by Forest Service regulations. The long-term component of investment worth i s obtained when the stand i s harvested. It i s r e l a t e d to the value of the harvest. Stand value i s determined by the i n t e r a c t i o n of a great many factors amongst which average stem volume i s of importance. The stand conditions necessary to maximize system benefits are not n e c e s s a r i l y those that maximize the long-term, or stand, benefit. The timber supply planning framework i s l i k e l y to impose a time-frame for the r e a l i z a t i o n -of stand benefits which, w i l l not permit stands to be grown at d e n s i t i e s within the normal range. It i s proposed that the p o t e n t i a l benefits of an investment be viewed as having two dimensions, value and volume, which describe them completely. 1 1 , 3.0 THE INVESTMENT DISTRIBUTION SYSTEM Management of the public forest estate i s shared between the Forest Service, a public agency with goals set by p o l i c y , and entrepeneurs, whose goals include profit-maximization. In order to meet p o l i c y goals expressed i n terms of short-term harvest rates, the Forest Service must mobilize the resources of p r i v a t e industry. It seeks to do t h i s by o f f e r i n g incentives for intensive management a c t i v i t i e s . From industry's viewpoint investment i n intensive management i s e s s e n t i a l l y the same as other kinds of investment. It i s the magnitude of the stand benefits that characterize them i n investment analysis. It i s proposed that both system and stand benefits are v a l i d expressions of the worth of investments and that i t i s i n society's i n t e r e s t to consider both when public funds are to be invested. The need for an a n a l y t i c a l system to control public investment a r i s e s because of a d i f f e r e n c e i n o r i e n t a t i o n between public f o r e s t management and normal i n d u s t r i a l p r a c t i c e . Industry may acknowledge an o b l i g a t i o n to society assumed through the use of commonly-owned resources. Because of i t s profit-maximization o r i e n t a t i o n i t may incorporate that o b l i g a t i o n into i t s decisions by modifying q u a l i f y i n g rates of return on investment. However, t h i s procedure does not e x p l i c i t l y consider the system benefits of investment. Where the Forest Service has the sole r e s p o n s i b i l i t y for planning i t must develop means to select among a l t e r n a t i v e programs of management. I n s t i t u t i o n a l f a c t ors l i m i t the choice of approach to t h i s problem. The Forest Service has not, t r a d i t i o n a l l y , used profit-maximizing c r i t e r i a i n i t s management decisions. Under these conditions i t i s possible to manage 12. stands for t h e i r contribution to the supply system under conditions not a t t r a c t i v e to private industry. The proposed investment d i s t r i b u t i o n system serves t h i s function. I t d i r e c t s investment to those stands and treatments which can contribute to forest-system benefits most e f f i c i e n t l y . It operates by considering the a t t r i b u t e s of a stand that influence the magnitude of the transferable y i e l d benefits within the e x i s t i n g system. 3.1 Stand A t t r i b u t e s and System Benefits Pr e d i c t i n g the way i n which investment i n i n d i v i d u a l stands w i l l influence short-term harvest rates requires knowledge of the "engineering" of the timber supply system. Total supply i s r e a l i z e d by harvesting i n d i v i d u a l stands and i s the aggregation of a l l the stands harvested within a si n g l e period. The c h a r a c t e r i s t i c s of i n d i v i d u a l stands are "submerged" i n the aggregation process and the harvest stream i s characterized by average a t t r i b u t e s . In timber supply planning, system parameters can be set through s t r a t e g i c a n a lysis. S i l v i c u l t u r a l investment planning i s concerned with the implications of these s p e c i f i c a t i o n s f o r the type of stand which i s to re s u l t from management. The system benefits of stand management are the extent to which the stand moves toward a goal which r e f l e c t s the needs of the timber supply plan. Supply plan needs are expressed by the timing and extent of the d e f i c i t s which are to be avoided by investment. The d e f i c i t s may be of t o t a l y i e l d or of s p e c i f i c products, or of both. Investment i n an i n d i v i d u a l stand i s intended to ensure that the stand i s a v a i l a b l e during the period of d e f i c i t and provides the s p e c i f i c products required. An investment program i s needed to coordinate the treatment of i n d i v i d u a l stands. What determines the s u i t a b i l i t y of a stand f o r investment? Consider 13. the question only from the fo r e s t system viewpoint. The stand must be able to be harvested during a s p e c i f i e d time period. The e a r l i e s t that a stand should be cut i s when the value generated from i t j u s t covers the costs of harvesting, transportation and processing the wood from i t . Stand value i s re l a t e d to stand merchantable volume, average stem s i z e , and the d i s t r i b u t i o n of stem s i z e . Harvesting costs are rela t e d to the lo c a t i o n of the stand, the nature of the s i t e occupied by the stand, average stem s i z e and d i s t r i b u t i o n , and the other fa c t o r s . The s i t e q u a l i t y , stand density, development h i s t o r y and genetic p o t e n t i a l of the stand i n part determine, i t s rate of growth acid the d i s t r i b u t i o n of that growth among the stems i n the stand. A stand i s a candidate for investment i f i t has the p o t e n t i a l , which would not otherwise be expressed, of growing to harvestable condition within the time required. 3.2 Flow of the Proposed System How can candidate stands be i d e n t i f i e d ? The f o r e s t estate can be zoned to r e f l e c t expected harvesting costs. Within any zone^the stand conditions needed to permit harvesting are r e l a t i v e l y constant. These conditions provide the target f o r the stands within a zone. Stand types not l i k e l y to meet these targets have p o t e n t i a l f o r investment. Not a l l of the p o t e n t i a l opportunities may need to be taken up. If the budget fo r investment i s l i m i t e d , not a l l opportunities w i l l be able to be funded i n a si n g l e budget period. Under these conditions i t i s desirable to discriminate among opportunities. I t i s proposed that c o s t - e f f i c i e n c y be used to express preference. The proposed investment d i s t r i b u t i o n system provides methods to determine harvest cost zones and c o s t - e f f i c i e n c y . I t also suggests a method of assembling an annual investment program from information provided 14. by an incomplete inventory of opportunities. I t integrates the time-frame and product goals from supply analysis with the methods used to determine stand treatment guidelines. Figure 1 i s a schematic diagram of the flow of the system. The items that are starred involve procedures that have been developed to r e f l e c t current p r a c t i c e s within the Forest Service. These w i l l be described i n subsequent sections. Information and analysis at the t a i l of an arrow contribute to decisions made at the head of the arrow. Harvest cost zone analysis i s independent of timber supply an a l y s i s . A l l subsequent steps i n the system use eit h e r the time-frame or the product goals, or both, derived through timber supply a n a l y s i s . 3.3 An Important Caveat The proposed system has been devised to a s s i s t decision-making within the context of public timber supply management. I t s design r e f l e c t s the current practices of the Forest Service i n i t s operational mode. I t has been proposed i n an attempt to provide a bridge between the t r a d i t i o n a l o r i e n t a t i o n of the operative d i v i s i o n i n the Forest Service, the S i l v i c u l t u r a l Branch, and the more "business-like" approach evident i n new p o l i c y d i r e c t i o n s . It i s needed because there i s an urgency to invest i n supply not f e l t under other circumstances. For convenience, investments made s p e c i f i c a l l y f o r timber supply ends w i l l be r e f e r r e d to as " s o c i a l investments". They are assumed to contribute to the furtherance of s o c i a l p o l i c y . By contrast the f o r e s t also provides opportunities to invest i n the normal business sense. Because of the long lags between investment and return these investments are characterized by a higher degree of r i s k than many other opportunities. Since normal business practices are the context f o r t h i s type of investment they constitute venture opportunities. 15. FIGURE 1 SCHEMATIC FLOW DIAGRAM FOR T H E PROPOSED S Y S T E M Items marked ° ore developed In this thesis STRATEGIC ANALYSIS H A R V E S T - C O S T Z O N E A N A L Y S I S " Timber ^Supply Goals Product. Goals Time-frame 0 ^21 Typical Growth Expectations Boundary Accessibility/Operability Specifications ftelationrfiip^^ Eligibility fo Potential Treatments "Costs, of Treatments Effects of Treatments _ k Assessment "'of each Inventoried ^ K ^ " OpporfunitV 0 dthcpter 6 ) Managed Stand Growth Expectations Selection of the most Efficient Alternative for eoch Product Goa l 0 Annual silviculture! Budget - ^ A s s e m b l y of fhe Annual :Activfty Budget OPERATIONAL PLANNING Unfunded Oppcrtunitfes 16. In the long run the whole structure and he a l t h of the f o r e s t industry i n B r i t i s h Columbia may depend on s k i l f u l l e x p l o i t a t i o n of venture opportunities. The decision aids provided f o r both types of investment are l i k e l y to appear quite s i m i l a r . Indeed, the aids developed for current management within the Forest Service are organized around factors s i m i l a r to those l i k e l y to appear i n guidelines developed for s o c i a l and venture investment. The most recent Forest Service guidelines developed for stand treatment are appended for reference. I t . i s important to r e a l i z e that the content of such decision-aids r e f l e c t s the purposes for which they are developed. Therefore the s p e c i f i c a t i o n s that are derived through a p p l i c a t i o n of the proposed investment d i s t r i b u t i o n system are quite s p e c i f i c to s o c i a l investments as defined previously. S o c i a l investments can only e x i s t i n fo r e s t management units where short-term supply i s l i m i t e d to l e s s than that required by regional supply p o l i c y . I t i s proposed that investment i n these units has an absolute p r i o r i t y over venture opportunities because budget appropriations f or s i l v i c u l t u r e are made with reference to short-term supply rates. 17. 4.0 HARVEST COST ZONE ANALYSIS Logs have value because they are used i n subsequent productive processes. Timber stands have value because they are the source of logs. The unit of log production i n the stand i s the i n d i v i d u a l stem. The dimensions and properties of a stem determine the nature of the logs that can be manufactured from i t . I t i s proposed that, volume f o r volume, the r e l a t i v e value of a log i s determined by i t s small-end diameter (s.e.d.). A log of small s.e.d. i s presumed to be l e s s valuable than one of larger s.e.d. This i s a s i m p l i f i c a t i o n made possible by the nature of s o c i a l investments. They are l i k e l y to be undertaken within time constraints which preclude the adjustment of stand growth rates to r e f l e c t wood q u a l i t i e s that influence value. The value of an i n d i v i d u a l stem, and of a timber stand, are simply the aggregate value of the logs derived from them. Larger stems produce a greater volume i n a log s i z e c l a s s and larger logs than do smaller stems. A stand which contains larger stems w i l l provide more and larger logs than a stand with smaller stems. Extraction of timber to the roadside i s , i n most cases, a batch process. Individual pieces have to be handled. Larger pieces are, on the whole, cheaper to handle than smaller pieces. The "piece" may change during e x t r a c t i o n from a tree length, to a log length. The cost of extract-ing a l l the timber from a stand i s r e l a t e d to the average s i z e piece the stand provides. The marginally economic stem siz e i s that at which the value of the stem i s balanced by the cost of extracting i t . As a stem increases i n s i z e i t s value and value per unit volume tend to r i s e , while the costs of 18. extraction tend to f a l l . A marginal stand i s one within which aggregate stem value balances aggregate extraction costs. It i s proposed that marginal analysis be applied to the stem of average s i z e within the stand. It i s assumed that the d i s t r i b u t i o n of stem sizes i s c o n s i s t e n t l y related to average stem dbh or average merchantable stem volume. This i s an approximation, known not to be correct i n d e t a i l , but acceptable for present purposes. In t h i s case average stand value and average extraction costs are used to characterize a stand. A stand must be grown to at l e a s t the average dbh, or average piece s i z e , associated with the marginal stand before i t can be harvested. 4.1 Adjusting the Margin for the E f f e c t s of U t i l i z a t i o n P o l i c y Total stand value and the costs of extraction are not d i s t r i b u t e d uniformly over the range of stem dbh represented i n a stand. In general the larges t diameter stems w i l l have the highest per unit values, and the highest per stem values, and the lowest per unit extraction costs. Conversely, the smallest stems w i l l have the lowest per unit values and the highest per u n i t extraction costs. If the value and costs of each dbh cl a s s i n a stand are accumulated, a d i s t r i b u t i o n l i k e that shown i n Figure 2 r e s u l t s . Three points i n the dbh d i s t r i b u t i o n are of i n t e r e s t . The Forest Service, as part of i t s u t i l i z a t i o n p o l i c y , defines merchantable volume i n terms of the stems larger than an administratively defined dbh. If harvesting proceeds by extracting the larges t stems f i r s t and then progresses down the dbh d i s t r i b u t i o n a profit-maximizing minimum dbh and a break-even dbh can be i d e n t i f i e d . The former represents the point at which the costs of extracting the next sized stem f i r s t exceeds the value of that stem. The l a t t e r occurs when the accumulated costs of extraction 1 9 . FIGURE 2 Relationship between Minimum dbh's for a Stand at a Single Point in Time KEY - Symbol rninmum M-maximum Varvest progress ^ dbh-c lass midpoint (of last class harvested) B ' Minimum dbh Administrative _ Break-even ,Profit-maximising D Stand overage dbh f i r s t exceed the accumulated value of the harvest. The r e l a t i o n s h i p shown i n Figure 2 represents that of an immature stand. In economic terms, only the small proportion of the stand i n stems larger than the minimum profit-maximizing dbh i s a t t r a c t i v e . A larger proportion of the stand, that i n stems larger than the break-even dbh, could be extracted without i n c u r r i n g a loss but rather more than h a l f the t o t a l number of stems would have to be l e f t . At present the Forest Service w i l l not permit a stand to be harvested unless a l l the administratively defined merchantable volume i s removed. This has implications f o r the timing of the e a r l i e s t possible harvest f o r a stand. Consider the r e l a t i o n s h i p between minimum dbh's as a stand range. 20. Figure 3 i l l u s t r a t e s three successive observations of a stand. The F IGURE 3 Successive Observations of the Relatbnship between Minimum dbh's for o Stand Harvest proceeds from right to left in each perbd Mae p D Dap max min, max min dbh-class midpoint (of last class harvested in each period! 2 3 see FIGURE 2 for the KEY to the minimum dbh symbols max r e l a t i o n s h i p i n period 1 i s the same as that shown i n Figure 2. By period '2 much more of the stand i s extractable and a l l stems larger than the stand average dbh are economically a t t r a c t i v e . However, the stand would not be permitted to be harvested since not a l l the merchantable volume could be removed. I t i s only i n period 3, when the break-even and merchantable minimum dbh's coincide that the stand could be harvested without incurring a monetary l o s s . This then i s the e a r l i e s t that t h i s stand could be 21. harvested. In subsequent discussion and analysis minimum harvest ages and corresponding stand averages have always been predicated on the current administratively defined minimum merchantable dbh. There i s , therefore, the p o s s i b i l i t y of e a r l i e r harvests i f harvest rules should change. This would require a major change i n the expression of u t i l i z a t i o n p o l i c y on the part of the Forest Service. Such a change i s tantamount to changing the nature of pu b l i c f o r e s t management and would lead to a r e d e f i n i t i o n of the forest supply system. The method to determine the break-even dbh i n the e x i s t i n g management context w i l l be described i n subsequent sections. 4.2 Es t a b l i s h i n g Zone Boundaries A zone contains a l l s i t e s within a management unit that have s i m i l a r harvest costs. A system developed by the Valuation Branch of the Forest Service for stumpage appraisals contains a very u s e f u l analysis of the fac t o r s a f f e c t i n g costs. This system can be used, by changing i t s i n t e r -pretation, to i d e n t i f y and integrate the factors of the physical environ-ment which contribute to t o t a l harvesting costs. I t i s proposed to define zone boundaries i n terms of these integrated e f f e c t s . The basic approach i s known as the Logging P r o d u c t i v i t y C l a s s i f i c a t i o n System (B.C.F.S., 1978). 4.2.1 The Logging P r o d u c t i v i t y C l a s s i f i c a t i o n System This system i s used to assess the costs of harvesting a stand of timber at the time i t i s to be sold. The severity of i n d i v i d u a l cost f a c t o r s i s indexed by reference to standards. The factor indexes are then summed and the t o t a l used to place the stand i n a logging p r o d u c t i v i t y class (LPC). A standardized logging system i s selected on the basis of the LPC and the magnitude of some of the factor indexes. 22. A logging system can be viewed as a s e r i e s of tree and log handling phases. Each- phase i s characterized by a s p e c i f i c choice of machinery or method from the a v a i l a b l e a l t e r n a t i v e s . The logging p r o d u c t i v i t y c l a s s i f i c a t i o n system provides an estimate of the p r o d u c t i v i t y of a recommended method. Pro d u c t i v i t y i s assumed to be strongly r e l a t e d to average piece s i z e . A family of logging p r o d u c t i v i t y curves, with average piece s i z e as the ordinate, i s drawn. The differences between the curves represent the e f f e c t of the logging p r o d u c t i v i t y classes. Once the recommended system and probable phase p r o d u c t i v i t y have been determined the costs of harvesting can be calculated. The Forest Service provides a schedule of costs f o r r e n t a l equipment CB.C.F.S., 1979), for use i n appraisals. This method can be used to evaluate harvesting costs over a wide range of environmental conditions. I t i s the use of consistent indexes which makes t h i s system so useful for s i l v i c u l t u r a l planning. An index of, e.g., 15 w i l l have the same e f f e c t on p r o d u c t i v i t y for a l l cost f a c t o r s . The indexes are under review and subject to r e f i n e -ment but are useable i n t h e i r current form. 4.2.2 Adapting the System to Provide Zone Boundaries In stumpage ap p r a i s a l , stand conditions are taken as found. In s i l v i -c u l t u r a l investment planning the stand conditions required under given cost conditions are of i n t e r e s t . The logging p r o d u c t i v i t y system i d e n t i f i e s average piece s i z e as the stand q u a l i t y that determines p r o d u c t i v i t y , and hence cost. Average piece s i z e can be r e l a t e d to other stand d e s c r i p t i v e v a r i a b l e s that can be manipulated by stand tending. The f i r s t step i s to evaluate logging costs over the range of logging p r o d u c t i v i t y classes l i k e l y to be encountered i n an i n d i v i d u a l management u n i t . This i s accomplished by working through, the logging p r o d u c t i v i t y c l a s s i f i c a t i o n 23: system. The r e s u l t of t h i s step i s presented i n Figure 4 f o r the range of LPC's l i k e l y to be encountered i n lodgepole pine stands i n i n t e r i o r management u n i t s . The Forest Service uses two sets of LPC's; one each, for slopes l e s s than or equal to 25% and greater than 25%. Slope a f f e c t s the degree to which, c e r t a i n logging phases can be mechanized. Note that logging costs are more s e n s i t i v e to the average piece s i z e of the harvest than to the s e v e r i t y of the cost factors r e f l e c t e d i n the s i t e ' s LPC. Note also that the range of costs i s considerable. FIGURE Ar Relationship Between Logging Costs ond Merchantable Average Piece Size for Recommended Logging Systems ( 1979 equipment costs, B.CFS. stumpoge appraisal system) slopes £ 2 5 % slopes >25% 2 4 6 6 l:0 12 W 1-6 1% 20 2 4 -fe 6 l;0 12 1-4 1-6 f-SvSO MERCHANTABLE STAND AVERAGE STEM VOLUME (m 3) 24. Species does not a f f e c t the r e l a t i o n s i n Figure 4 except insofar as i t r e f l e c t s the range of environmental conditions l i k e l y to be encountered, or the logging systems l i k e l y to be employed. Lodgepole pine i s a species t y p i c a l of the i n t e r i o r of B r i t i s h Columbia where moderate slopes and gentle r e l i e f characterize the environment by comparison with the coast region. The Forest Service recognizes a t o t a l of ten logging p r o d u c t i v i t y classes for slopes >25%; only seven are shown i n Figure 4. It i s assumed that the general shape of the r e l a t i o n s h i p between cost and average piece s i z e i s the same f o r the three most c o s t l y classes. The cost i n t e r v a l between classes i s not constant. Some cost factors have r e l a t i v e l y l i t t l e e f f e c t on p r o d u c t i v i t y i n i s o l a t i o n , but i n combination with c e r t a i n l e v e l s of another factor.; t h e i r e f f e c t i s s i g n i f i c a n t . The index sum of the two f a c t o r s i n such a case i s enough to push the s i t e into a higher p r o d u c t i v i t y c l a s s . The next step i s to transform the c o s t - s i z e r e l a t i o n s h i p s into a form us e f u l for s i t e c l a s s i f i c a t i o n . The objective i s to i d e n t i f y features of the environment that determine the cost-class a forested s i t e w i l l occupy. Some of these features w i l l be i d e n t i f i a b l e from study of a e r i a l photo-graphs and topographic maps. The cost-zone boundaries can therefore be superimposed on the forest environment i n a form s u i t a b l e for planning. A study of harvesting opportunities i n B r i t i s h Columbia has used a s i m i l a r approach but with derived slope and t e r r a i n classes (Hedin, 1978). 4.2.3 Transforming the Cost-Size Relationship It i s necessary to separate environmental e f f e c t s from the e f f e c t of average piece s i z e . The f a c t o r s used f o r c l a s s i f i c a t i o n should be permanent features of a forested s i t e which w i l l not be affected by management. This i s accomplished by evaluating the costs of harvesting at a s p e c i f i c stand .25. condition. I t i s proposed that the smallest average piece s i z e f o r o p e r a b i l i t y be used. At t h i s point the t o t a l value of the stand equals the t o t a l cost of harvesting i t . A s l i g h t l y larger average piece s i z e w i l l .provide a p o s i t i v e net stand value, a s l i g h t l y smaller one a negative stand value. In B r i t i s h Columbia the value of public timber i s i t s conversion return, a r e s i d u a l from the value of the products manufactured from the stand. The value of the manufactured products constitutes a pool from which the costs of manufacturing, transportation, and harvesting are drawn (Province of B.C., 1974). I t i s possible to determine the value of logs at the m i l l - g a t e . There i s an equivalent m i l l - g a t e stand value; the aggregate value of the log assortment from a stand. Unlike logging costs, there are value premiums that express species preferences. Each species or species group that provides products d i f f e r e n t i a t e d by p r i c e must be treated separately. M i l l - g a t e stand value can be determined by applying the log value-size gradient to the log d i s t r i b u t i o n s of stands. From m i l l - g a t e stand value the costs of harvesting and transportation must be removed to determine conversion return. Conversion return f o r a stand at the point at which i t i s f i r s t operable i s zero; therefore, at t h i s point, the combined costs of harvesting and transportation j u s t balance the m i l l - g a t e stand value. As costs of harvesting r i s e , the pool of value a v a i l a b l e to cover transportation costs decreases. For a given stand value a more remote stand must be cheaper to log than l e s s remote stands i f i t i s to be operable. A l l cost f a c t o r s , apart from average piece s i z e , contribute to the a c c e s s i b i l i t y of a stand. This c l a s s i f i c a t i o n follows that of F r i e s and Hagner (1970).. •26. The procedure to define cost-zone boundaries can be best illustrated by example. The relationships presented here for lodgepole pine are from a study by Gasson (1979). They are highly generalized i n nature and should not be used without modification. The value gradient for lodgepole pine stems shown in Figure 5 was derived by considering the products li k e l y to be manufactured from representative m i l l types described by Aune and Lefebvre (1975). Grade recovery information was obtained from Dobie (1978). Product yields were converted to the volume of logs from which they came through, the use of standard conversion factors (JDobie and Wright, 1975). The distribution of log volume by log small end diameter was interpreted from taper tables in Lee (1966). These tables contain both height and dbh classifications. Stem value was obtained by aggregating the value of the logs a stem contained. For a given stem volume tall e r stems are more valuable than shorter stems because lumber recovery is.better in stems of lower taper. The band of unit values in Figure 5 reflects this relationship. 3 3 Beyond a stem volume of approximately 0.4m the value of each m of wood remains f a i r l y constant at a 1978 value of $145. Stems of this size and larger can provide a l l the products normally sawn in the interior of British. Columbia. Stem total value increases because larger stems provide a larger volume of each product. The product output of smaller stems is dominated by studs and 2 x 4's. The very rapid increase in marginal value i s associated with increasing product diversity. The net effect i s to make total stem value directly proportional to stem volume over the range of volumes considered. Assigning a value to a stand requires that the distribution of stem volume within the stand be known. Considering the rather gross nature of 27. FIGURE 5 Hypothetical Value Gradient of Lodgepole Pine Stems bosed on 1978 lumber ond chip prices 3 300 I9T> 280 |40 260 130 240 120 220 110 200 100 180 90 (60 80 E 140 TO I2oro 6 0| S 100 50 o *> > •= o 80 > 40 I— 69 3 3 0 40 20 20 10 mcceasng stem height 0-2 0-4 0-6 0-8 10 1-2 1-4 - 1-6 1-8 2-0 2-2 Merchantable Stem Volume ( toa lOcmtop) m 3 28. the stem value estimates, e f f o r t s to obtain t h i s information are not j u s t i f i e d . Assume that the values, i n Figure 5 are those of the merchant-able stems. The value of a stand i s then the number of merchantable stems m u l t i p l i e d by the t o t a l value of the average stem. To obtain the stand m i l l - g a t e value the costs of m i l l i n g the products must be subtracted from the stand value. Information about the marginal e f f e c t of log s i z e on m i l l i n g costs i s , at best, sketchy i n B r i t i s h Columbia. Costs appropriate to the mill-system used i n manufacturing the products should be used. I t i s possible to substitute cost expectations developed on a regional basis, i f necessary. M i l l i n g costs may be considered to be either f i x e d or v a r i a b l e with respect to log s i z e . In general, they are considered to be e f f e c t i v e l y f i x e d because a m i l l cannot control the si z e d i s t r i b u t i o n of the input stream. Aune (1979) has provided an average cost for a modern m i l l of the type that can handle the range of log sizes i n Figure 5. The curve l a b e l l e d Aune( 1979) i n Figure 6 shows the e f f e c t of removing t h i s f i x e d charge from the average stand value. The r e s i d u a l value i s the m i l l - g a t e average stand value. The other curve Gasson( 1979) i s that of m i l l - g a t e values assuming va r i a b l e m i l l i n g costs. The m i l l i n g charge i s inversely proportional to log small-end c r o s s - s e c t i o n a l area. The two m i l l i n g charges are scaled to be equal at a log top-end diameter of 23 cm. The assumption of v a r i a b l e m i l l i n g costs i s j u s t i f i e d because some element of c o n t r o l of log population i s implied i n stand tending. The m i l l - g a t e values under t h i s assumption have been used i n subsequent analysis. The stand values shown i n Figure 5 are f o r the stand volume on board a truck on the roadside. Those of Figure 6 are f o r the stand volume at the m i l l - g a t e . The d i f f e r e n c e between them i s the amount that i s a v a i l a b l e 2 9 . to cover transportation costs at the e a r l i e s t point of o p e r a h i l i t y . Assuming average truck volumes and transportation speeds the cost per 3 kilometer per m of wood can be calculated. The maximum distance of a stand from the mi l l - g a t e i s that at which the cost of trucking equals the stand r e s i d u a l value. A schematic representation of the r e l a t i o n s h i p between maximum trucking distance and average stem volume for lodgepole pine i s shown i n Figure 7. A l l the curves f o r the logging p r o d u c t i v i t y classes on slopes ^25% are shown. For slopes >25% only the lowest and highest are shown. Representative curves f o r logging p r o d u c t i v i t y classes (LPC) close to the lowest and highest are shown to emphasize the changes i n the shape of the curves with changing LPC. Figure 7 i s the f u l l expression of the r e l a t i o n s h i p between o p e r a b i l i t y , a c c e s s i b i l i t y and average piece s i z e . For any logging p r o d u c t i v i t y c l a s s , a stand w i l l be operable with a given average piece s i z e only within the radius indicated by the point on the corresponding curve. As a c c e s s i b i l i t y decreases (trucking distance increases), larger average stem si z e s are needed to make stands of a given logging p r o d u c t i v i t y c l a s s operable. Although each curve i s shown as a narrow l i n e the r e l a t i o n s h i p s are rather broad generalizations. It i s proposed that, rather than using the f u l l logging p r o d u c t i v i t y c l a s s i f i c a t i o n , zones be based on two harvest cost classes on slopes 6 25% and on three classes f o r slopes 3 >25%. If the actual cost per m of delivered wood i s plotted on the maximum trucking distance f o r o p e r a b i l i t y , r e l a t i o n s h i p s l i k e those shown i n Figure 8 are obtained. The class boundary harvest costs are chosen to divide the expected range of costs into two, or three, bands. These boundaries should be drawn for each management u n i t ; they define r e l a t i v e , not absolutej cost boundaries. The cost-factor conditions associated with each logging p r o d u c t i v i t y c l a s s are indicated by the sum of the fa c t o r indexes. These sums are shown i n Table I. The factors that contribute to the t o t a l include those TABLE I .TION BY 53.1- 65.1- 80.1- ^ 65.0 80.0 95.0 95.1 VII VIII IX X that are not permanent features of the s i t e . The most s i g n i f i c a n t s i t e -r e l a t e d factors are: LOGGING PRODUCTIVITY CLASSIFICA TOTAL INDEX TOTAT INDEX < U ' 1 ~ 2 1 ' 1 ~ 2 9 , 1 _ 3 7 - 1 _ 4 5 - 1 _ RANGE 13.0 21.0 29.0 37.0 45.0 53.0 LPC I II I I I IV V VI FIGURE . ?> lndicofed Costs of Harvesting for Recommended Systems for Slands of Minimum Operability 33, (1) The i n t e r a c t i o n of slope and t e r r a i n ; (2) The number and s i z e of obstacles such as boulders, stumps and windthrow; (3) The i n t e r a c t i o n between s o i l moisture, depth and type, and (4) The amount of exposed rock. It i s proposed that the current values of the indexes of the other factors cannot be rel a t e d to future conditions. Their contribution may therefore be ignored. The indexes for the i n d i v i d u a l f a c t o r s to be considered are reproduced from the Forest Service standards i n Table I I . The axes i n Figure 8 can be transformed to put the logging p r o d u c t i v i t y cl a s s on the y-axis. Since the LPC's are defined i n terms of ranges of t o t a l index the y-axis can be shown as index t o t a l s . These axes are shown i n Figure 9. Consider the low harvesting cost c l a s s i n Figure 8, slopes •^25%. At a distance of 128 km from the mil l - g a t e the maximum logging 3 pr o d u c t i v i t y c l a s s that can be harvested f o r $9.00/m i s I I I . The maximum index for c l a s s I I I stands i s 29 (Table I ) . An index of 29 thus represents a harvest cost boundary at a distance of 128 km. At any distance from the m i l l , stands of logging p r o d u c t i v i t y c l a s s IV l i e i n the high harvest-cost c l a s s . The minimum index for t h i s class i s 29.1. Therefore at any distance up to approximately 130 km from the m i l l -gate an index of 29 represents the low-cost boundary. At a distance of about 160 km no stands can be harvested for less than $9.00; t h i s then i s the maximum radius of the low harvest cost zone. Between about 130 km and 160 km logging p r o d u c t i v i t y c l a s s II costs r i s e above $9.00. This c l a s s i s not shown i n Figure 8 f o r the sake of c l a r i t y . The maximum index for LPC II i s 21. From Figure 9 i t can be seen that at a distance of 150 km an index of 21 costs $9.00 to harvest. 34. TABLE II INDIVIDUAL FACTOR INDEXES FOR PERMANENT SITE FEATURES (Adapted from Forest Service Standards (B.C.F.S., 1978)) (a) The Interaction of Slope and Terrain Slope % Terrain Class Mid-Class Value 10 20 30 40 50 60 Factor Index Loading 70 80 90 >95 Even 1 0 1 3 6 11 17 23 31 39 48 R o l l i n g 3 1 3 5 9 14 20 27 35 44 52 Gu l l i e d 6 3 5 8 13 19 26 33 40 49 57 Broken 9 6 8 13 18 25 32 40 48 58 67 (b) Surface Roughness Number of Obstacles/plot 4.5 1 2 3 4 5 6 7 >7 Height (m) Factor Index Loading .25 - .50 0 0 1 2 3 5 7 9 11 .50 - 1.0 1 1 2 3 5 7 9 11 13 >1.0 1 2 3 5 7 9 11 13 13 (c) The Interaction of S o i l Moisture, Depth and Type Moisture Depth (m) Type A l l Dry Moist ,2 .3 .4 .5 .6 .1 .2 Wet .3 .4 ,5 .6 .1 .2 Swampy .3 .4 .5 .6 Factor Index Loading Organic 1 0 1 1 2 2 3 1 1 3 7 12 18 2 4 7 12 18 25 Clay 0 0 0 0 0 0 0 1 1 3 5 8 12 1 4 7 12 18 25 S i l t 0 1 1 1 1 1 1 1 2 4 7 11 16 2 4 7 12 18 25 Loam 0 1 1 1 1 1 1 1 2 4 7 11 16 2 4 7 12 18 25 Sand 3 1 1 1 1 1 1 1 1 2 3 5 8 1 2 3 7 12 18 Gravel 1 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 3 3 4 Cobble 5 1 1 2 2 2 2 1 1 1 2 2 2 1 2 3 3 3 3 (d) Exposed Rock Exposure Code Mid Point Values 4.5 >3.5 Factor Index Loading 10 FIGURE 9 Graphical Determination of Harvest Cost Zonal Boundaries (a) slopes ^.25% (b) slopes 7 2 5 % high horvest cost zone low harvest cost zone 100 9 0 8 0 7 0 6 0 5 0 x LU Q z 4 0 30 3 2 0 10 ~ZQ~ i f d 6 Q " 8 0 IOb~ 120 140 160 160 2 0 0 Distance from the Millgafe ( K m ) high harvest cost zone low harvest cost zone moderate harvest cost zone 0 2 0 4 0 60 8 0 100 120 140 160 180 2 0 0 2 2 0 Distance from the Millgate ( K m ) The boundary mapped on the axes of Figure 9 shows the maximum fac t o r index that can be harvested for a f i x e d cost. These are the descriptions of the harvest-cost zone boundaries. There i s a t o t a l index associated with a physical s i t e d e s c r i p t i o n . For example, a s i t e with 17% slope and r o l l i n g t e r r a i n , 6 obstacles/plot 1.2 m high, a wet organic s o i l 0.5 metres deep, and a rock exposure code of 3 (from Table II) would have a t o t a l index of 31. However, a t o t a l index i s not e x c l u s i v e l y associated with a stand d e s c r i p t i o n . For example, a s i t e with 60% slope and r o l l i n g t e r r a i n , 3 obstacles/plot 1.5 m high, a wet clay s o i l 0.3 m deep, and a rock exposure code of 3, also has a t o t a l index of 31. Rather than attempt to specify maximum factor indexes (and the corresponding factor condition) for c l a s s i f i c a t i o n , the zoning should be applied at a stand l e v e l . 4.3 Using the Harvest Cost Zones Consider the o p e r a b i l i t y , a c c e s s i b i l i t y and average piece s i z e r e l a t i o n s h i p f o r slopes *25% i l l u s t r a t e d i n Figure 7. For a s i t e of logging p r o d u c t i v i t y c l a s s I at a distance of 120 km from the m i l l to be operable, the average stem volume of the timber on i t has to be at l e a s t 3 0.6 m . At the same distance a s i t e of LPC IV has a corresponding minimum 3 3 average stem volume of 0.86 m . It costs about $8.00/m to log the stand i n 3 the former case and about $11.00/m i n the l a t t e r (from Figure 8). For, s i t e s of equal q u a l i t y and stands of the same species, the stand of LPC I w i l l require l e s s time to reach a condition of o p e r a b i l i t y . Once a s i t e has been c l a s s i f i e d the o p e r a b i l i t y / a c c e s s i b i l i t y r e l a t i o n s h i p can be used to determine the average piece s i z e the stand on i t w i l l have to reach before i t becomes operable. If the stand i s not l i k e l y to reach that goal within the time-frame required a stand treatment may be contemplated. I t i s proposed to use harvest-cost zonal r e l a t i o n -37. ships of t h i s nature to provide minimum growth goals to use i n the s o c i a l investment decision-making process. Using the f u l l logging p r o d u c t i v i t y system to provide growth goals would imply a much higher r e s o l u t i o n i n the basic data than i s i n f a c t a v a i l a b l e . The harvest-cost zonal a c c e s s i b i l i t y - p i e c e s i z e r e l a t i o n s h i p i s obtained by simply averaging the i n d i v i d u a l r e l a t i o n s h i p s of Figure 7 over each LPC i n the cost zone. For example, f or the low cost zone on slopes ^25%, at a radius of 50 km from the mi l l - g a t e LPC's I,. I I , and III contribute to the average (Figure 8). From Figure 7 the minimum average 3 2 3 piece sizes f o r o p e r a b i l i t y are 0.52 m , 0.55 m , and 0.61 m re s p e c t i v e l y . 3 The low cost zone average f o r stands at 50 km radius i s thus 0.56 m . At 155 km radius only LPC I contributes to the zone average with an average 3 stem volume of 0.68 m . By proceeding across the whole range of Figure 7 the f u l l zonal average r e l a t i o n s h i p s can be evaluated. The zone averages for slopes ~25% are shown i n Figure 10. These are not general r e l a t i o n -ships since the boundary between high and low costs i s s p e c i f i c to a management u n i t . They are, however, t y p i c a l of the type of r e l a t i o n s h i p to be found. These r e l a t i o n s h i p s ought to influence stand p r e s c r i p t i o n s . Consider stands A and B i n Figure 10 at a radius of 120 km from the m i l l - g a t e . On average, stand B w i l l have to have at le a s t an average stem volume of 3 0.98 m when i t i s logged, while f o r stand A the corresponding stem volume 3 i s 0.75 m . If both stands are to be harvested i n the same period the rate of growth of stand B w i l l have to be greater than that of stand A. If stand growth i s to be manipulated through a l t e r i n g stand density the r e s i d u a l stand i s not l i k e l y to be the same i n both cases. It i s proposed that under timber supply management, r o t a t i o n lengths are pre-determined by the supply 38. FIGURE 10 Cost Zone Average Access}bility-Stem Volume Relationship (for slopes ^ 2 5 % ) stands on o curve hove, approximately equal logging costs at the break-even point E a £ o g1 15 14 1 0 i , 5 1 3 H 10 0 9 § 0 6 0 7 > 0-6 <X 0-5 / high harvest cost zone low. harvest cost zone 0 20 40 60 80 100 120 140 .160 180 Distance from the MiDgate (Km) p l a n . There i s a common time-frame f o r a l t e r n a t i v e s o c i a l i n v e s t m e n t s w i t h a common s u p p l y g o a l . Under t h e s e c o n d i t i o n s the z o n a l a c c e s s i b i l i t y / stem-volume r e l a t i o n s h i p s p r o v i d e growth s t a n d a r d s t h a t can be used i n d e c i s i o n - m a k i n g . The cost-rzone d e f i n i t i o n s can be used t o c l a s s i f y f o r e s t s i t e s i n p r e p a r a t i o n f o r an i n v e s t m e n t program. I n t h i s mode t h e f o r e s t e s t a t e i s zoned to r e f l e c t the minimum growth g o a l s . F o r example, between 100 and 120 km from the m i l l - g a t e f o r e s t s i t e s w i t h s l o p e s ^25% w i l l have as m i n i i 3 growth g o a l s 0.73 m average p i e c e s i z e i f i n the low c o s t - z o n e , and 0.89 m i f i n the h i g h c o s t - z o n e . Z o n i n g s h o u l d s t a r t by examining s i t e c o n d i t i o n s c l o s e t o the m i l l - g a t e and pr o c e e d by working out to more remote l o c a t i o n s . 39. Preliminary c l a s s i f i c a t i o n i s accomplished by reconnaissance surveys of the harvest cost factors of Table I I . The end r e s u l t should be a map of a management unit showing the l o c a t i o n and extent of areas with approximately homogeneous minimum requirements f o r o p e r a b i l i t y . The map should be prepared as an overlay for forest-type maps. There w i l l be overlays f o r each species within the unit that has markedly d i f f e r e n t manufacturing or marketing c h a r a c t e r i s t i c s . The zone boundaries do not have to be mapped at high r e s o l u t i o n since no investment w i l l be undertaken without more extensive ground survey. The zones are established to a s s i s t i n s i l v i c u l t u r a l decision-making; i f map areas can be excluded from the p o s s i b i l i t y of investment because of the age and nature of the timber, or because of p o l i c y , they need not be zoned. The zones themselves are designed as a temporary c l a s s i f i c a t i o n which should be replaced within a f i v e or ten year period. I f they are to be used f o r a longer period the boundary s p e c i f i c a t i o n s and zonal r e l a t i o n -ships w i l l have to be revised p e r i o d i c a l l y . If future expectations of m i l l i n g and harvesting practices and of r e a l product values are inc o r -porated into the zone analysis the basis f o r decision-making w i l l be improved, and the need for frequent r e v i s i o n reduced. 5.0 DETERMINING INVESTMENT ELIGIBILITY STANDARDS 40, In the course of timber supply analysis the e f f e c t of a l e v e l of harvest on the performance of a v a r i e t y of forest-growth v a r i a b l e s i s developed. One computer simulation model provides many v a r i a b l e s including growing stock, average and minimum age at harvest, and fo r e s t increment as a percent of growing stock ( H a l l , 1979). This model has been used to develop a basis for evaluating the e l i g i b i l i t y of an apparent opportunity f o r s o c i a l investment. The motivation f o r s o c i a l investment i s to permit a higher short-term harvest rate than would otherwise be possible. A short-term harvest rate influences future, longer term, rates through i t s e f f e c t on the structure of the forest estate. This e f f e c t i s made evident through the performance of the forest v a r i a b l e s to which management values are attached. The need f o r s o c i a l investment a r i s e s when, at some point i n the planning horizon, the t o t a l supply of av a i l a b l e timber i s i n s u f f i c i e n t to meet the needs of the harvest. In t h i s context the a v a i l a b i l i t y of timber i s determined by regulation. In B r i t i s h Columbia regulation i s by age class and i t i s the performance of the harvest age v a r i a b l e that provides i n f o r -mation useful i n investment planning. It i s assumed that age clas s constraints w i l l be relaxed at the time when stands that have been subject to investment are l i k e l y to be harvested. This i s equivalent to applying one supply system i n the process of running down the inventory of older age classes and then switching to another. As harvesting progresses i n a unit the average age of the stands i n the harvest changes. At harvest rates close to the maximum sustainable the average age w i l l approach, over the long run, the minimum permitted. At 41. rates above the maximum, at some point i n the planning horizon, volume must be removed from age classes that are now closed to harvest. The period during which t h i s happens may be l i m i t e d i f the age structure of the forest permits recovery. If the minimum age of harvested stands i s followed during a computer simulation of the e f f e c t of the required harvest rate on a fo r e s t unit a trace l i k e that i n Figure 11 can be obtained. During the period T l to T2 years from present, supply i s l i m i t e d by the harvest age constraint since at l e a s t part of the annual harvest must be.drawn from i n a c c e s s i b l e stands. F I G U R E II Hypothetical Behaviour of the Minimum Age of Harvested Stands in a timber supply area for which a harvest rate is to be minimum permissible present Time (years) Because stands that r e s u l t from investment are not subject to a minimum age constraint the needed harvest volume can be drawn from them. However, any stand i s subject to some constraints on the timing of harvest. The most basic are economic const r a i n t s of the nature discussed i n Chapter 4. The e a r l i e s t that a stand can be harvested, i f u t i l i z a t i o n p o l i c y i s maintained, 42. i s when the average stem volume reaches the zonal average. Thus, i n the unit from which Figure 11 i s derived the goal for s o c i a l investment i s to provide y i e l d i n stands with zonal c h a r a c t e r i s t i c s i n the period T l to T2 years from the present. E l i g i b i l i t y standards are applied to stands i n the inventory phase. They i d e n t i f y the cl a s s of stands that can be manipulated to a harvest-able condition within the required time-frame. They serve the same function as, and w i l l resemble, the treatment guidelines currently used by the Forest Service and shown i n the Appendix. They d i f f e r , however, by being t a i l o r e d to a s p e c i f i c management unit and objective. The types of treatment considered and t h e i r l e v e l s of a p p l i c a t i o n w i l l be strongly influenced by the nature of the time-frame within which the benefits of investment must be r e a l i z e d . These w i l l best be determined by computer simulation of the processes of stand development. If such models are not a v a i l a b l e the process of obtaining an informed consensus on the probable outcome of s p e c i f i e d practices must be employed. The wider the base for consensus the better. 5.1 Using Zonal Goals to Predetermine E l i g i b i l i t y An inventory of a v a i l a b l e investment opportunities i s needed i n the planning of an investment program. Such inventories are not generally a v a i l a b l e for the public forest estate. In t h i s case inventory information must be acquired as investment progresses. It i s necessary to have some preliminary inventory to permit the program to get underway. In f o r e s t r y , investment opportunities are l i k e l y to be characterized by many factors that influence the prospects of success. Much, of t h i s information may only be a v a i l a b l e through expensive and time-consuming ground surveys. I t may be possible to keep survey costs low by operating 43. at a low l e v e l of r e s o l u t i o n through low inventory i n t e n s i t i e s . An a l t e r n a t i v e approach i s to r e s t r i c t ground surveys to areas where the expectation of f i n d i n g suitable opportunities i s high. This can be accomplished with the help of zone boundaries superimposed on f o r e s t -type maps. A stand i s s u i t a b l e f o r s o c i a l investment i f , through stand tending, i t can contribute to short-term supply goals. It does so by being a v a i l a b l e f or harvest during the time-frame imposed by supply analysis. Stands that meet zonal goals but are younger than the minimum harvestable age are not s t r i c t l y a v a i l a b l e for harvest. This i s a rather grey area of p o l i c y ; i t seems i l l o g i c a l to permit harvest of stands which have received investment but not of other stands i n the same condition. The d e f i n i t i o n of a v a i l a b i l i t y i s fundamental to the operation of a f o r e s t supply system. U n t i l t h i s issue i s resolved i t i s proposed to regard stands that reach zonal standards as a v a i l a b l e , whatever t h e i r o r i g i n . Therefore, stand types that w i l l reach zonal standards i n the time—frame required without stand tending are not able to contribute to short-term supply goals and are not s u i t a b l e candidates for s o c i a l investment. The areas i n which they occur may be eliminated p r i o r to inventory. Stands that cannot be made operable within the required time-frame may also be eliminated from consideration. However, since i t i s possible to "force" i n d i v i d u a l stem growth i d e n t i f i c a t i o n of these types i s more complex. Forcing, i n t h i s context, means reducing stand density to a point where t o t a l volume production may be reduced. Even outside a supply context, f o r c i n g may be j u s t i f i e d i f economic gains accrue. Lee (1966), for example, demonstrated that i n lodgepole pine, wide plantation espacements provided the best value recovery at harvest. In the supply context apparent forcing i s l i k e l y to occur when the lead time f o r the time-frame i s short. Smith (.1973) has demonstrated that f o r e s t i n v e n t o r y data may be •manipulated to show the e f f e c t s of density on stand growth. His r e s u l t s can be i n t e r p r e t e d to provide rough estimates of the a b i l i t y of a species to contribute, to supply goals. Gas sou (1979a) has i n d i c a t e d some approaches to i n t e r p r e t i n g lodgepole. pine data f o r t h i s purpose. An a l t e r n a t i v e approach i s ' to seek an informed consensus. I t i s e a s i e r to s t r u c t u r e the d i s c u s s i o n around average stand dbh r a t h e r than average stem volume. The que s t i o n to be r e s o l v e d i s how q u i c k l y a stand can be expected to reach a given dbh? The r e l a t i o n s h i p between average stand volume and average dbh, of stems ^17.5 cm dbh, f o r lodgepole pine i s shown i n Figure 12. This r e l a t i o n s h i p was der i v e d f o r t h i s study by an a l y z i n g 584 stand summaries from inventorv r e p o r t s . F I G U R E 12. Re l a t i on sh i p b e t w e e n A v e r a g e S t em V o l u m e ond Average S t and d b h f o r L o d g e p o l e P i n e Source.- B.C.FS. inventory stand summaries to 6 c E 3 "o > £ t— co 8. •a 22-5 2 7 5 3?.-.'3 Average Stand dbh (cm) y= -37323* 04123X« 33;3«7 R2=0-S8847 doss utilization.standards fop dib iO cm stump height 30cm <ii! stems *>l8cm dbh r -i> 42 3 45. Approximately 89% of the v a r i a t i o n i n average stem volume can be accounted for by v a r i a t i o n s i n average stand dbh. The formula expression was derived through regression analysis of the basic data. For example, a stand i n a low cost zone 100 km from the mi l l - g a t e 3 has a zonal goal (from Figure 10) of 0.70 m . The minimum average stand dbh that has to be achieved during the required time-frame i s 29.5 cm. Inter e s t i n g l y , at the same radius, but i n a high, cost zone, the goal average stand dbh i s only 3 cm higher at 32.5 cm. This diffe r e n c e may be s i g n i f i c a n t under some circumstances and not s i g n i f i c a n t under others. In the high cost zone at 150 km from the m i l l - g a t e the minimum stand average dbh required has r i s e n to almost 37.5 cm. This i s a r e l a t i v e l y high goal compared with the normal range of lodgepole pine dbh. Such a dbh may not be attainable by stands on poor s i t e s or only a f t e r a period of competition-free growth on medium s i t e s . Reasoning i n t h i s way the areas i n which i n e l i g i b l e stand types are situated can be eliminated. It should be recognized that stands that are i n e l i g i b l e f o r s o c i a l investment may represent venture opportunities. I t i s l i k e l y that stands rejected because they w i l l be harvestable when required w i l l be of more in t e r e s t than other rejected stands. A l l investment has implications f o r timber supply but the main focus of ventures i s the opportunity to earn a return on investment. Stand values are therefore of i n t e r e s t . Stands that cannot, even with treatment, be expected to reach o p e r a b i l i t y within a moderate time-frame are not l i k e l y to provide as good as a return as those which could be harvested e a r l i e r i f necessary. Therefore, three inventory zones should be mapped; one containing the areas where s o c i a l investments are l i k e l y to occur, one containing areas rejected because they do not need s o c i a l investment but may provide venture opportunities, and one for a l l other rejected areas. The type of guideline represented by the Appendix could be applied within the second zone. The t h i r d zone would contain areas with low timber -management p o t e n t i a l . 47. 6.0 ASSESSING INVENTORIED OPPORTUNITIES Inventory i s assumed to be an ongoing function. At any time i t w i l l have made a v a i l a b l e a l i s t of forested s i t e s that could, given s u i t a b l e treatment, be made to provide harvestable y i e l d during the time-frame required. Not a l l s i t e s o f f e r equally good opportunities for investment» however. Any investment may provide benefits at both the system and stand l e v e l s . In s o c i a l investment the focus i s on short-run system benefits but the other benefits are an i n t e g r a l part of an investment and also characterize i t . Some opportunities for s o c i a l investment may provide rather low system but high stand l e v e l benefits while others may o f f e r the reverse. I t i s proposed that the "worth" of a s o c i a l investment i s rel a t e d to the t o t a l benefit i t can provide. Assume that the t o t a l worth of investments A and B i n Figure 13, and of any investments with system and stand l e v e l benefits on the l i n e j o i n i n g them, i s 7 units. S i m i l a r l y , investments C, D, and any with system and stand l e v e l benefits on the l i n e between them, have t o t a l worths of 9 un i t s . By d e f i n i t i o n the l a t t e r investments would be more s a t i s f a c t o r y than the former. It might seem that investments closer to A on l i n e AB, or to C on l i n e CD, should be more s a t i s f a c t o r y than those closer to B, or D, since they provide a higher system benefit. However, a l l investment opportunities w i l l have been i d e n t i f i e d through a process which expresses the require-ments for system benefits. The stand l e v e l benefits considered here are provided by investment that would be undertaken for the system benefits alone. flGURE l!> Illustration of th© Addition of the Components of Worth of Social Investments Investment I t may be necessary to express preferences between a l t e r n a t i v e investment opportunities at two l e v e l s . The f i r s t a r i s e s i n the process of s e l e c t i n g a treatment or l e v e l of treatment, for an i n d i v i d u a l forested s i t e . The second a r i s e s i n the preparation of an annual a c t i v i t y budget when more investment opportunities are a v a i l a b l e than can be under-taken. In both cases the f i r s t step i s to characterize the a l t e r n a t i v e s i n common terms that w i l l allow them to be compared. In other words, the t o t a l "worth" of a s o c i a l investment opportunity must be assessed. In t h i s context an investment opportunity i s provided by the a b i l i t y to p r a c t i s e a s i l v i c u l t u r a l technique on a forest s i t e or timber stand. There has been a phy s i c a l y i e l d o r i e n t a t i o n associated with public timber management i n B r i t i s h Columbia that has influenced decision-making 49. within the Forest Service. It has contributed to a f a i l u r e to develop systems to handle economic analyses. The tendency has been to assign a nominal value to wood f i b r e whatever i t s source. Thus, for instance, a cubic metre of wood from 12 cm dbh stems would have the same value as the same volume from 40 cm dbh stems. In recognition of t h i s bias a s p e c i a l d e f i n i t i o n of the worth of s o c i a l investments has been developed f o r t h i s study. I t i s the phys i c a l y i e l d analogue of present net worth. 6.1 Measuring Stand "Worth" The contribution of a stand to the long-run sustainable l e v e l of harvest f o r a management unit i s rel a t e d to i t s mean annual increment (m.a.i.) of merchantable y i e l d at the age of harvest. Thus, f o r example, i f a l l the stands within a unit are harvested at, or close to, the age at which m.a.i. culminates the long-run sustainable y i e l d of the unit w i l l be maximized. If investments are made i n order to permit early harvest of stands, as i s the case for s o c i a l investments, the mean annual increment at harvest of the treated stand i s not l i k e l y to be the same as that of the stand i f not treated. This change has implications for the supply plan f o r the manage-ment uni t . I t i s proposed to use the present "worth" of the m.a.i. of merchantable volume at harvest as the contribution of a stand to supply system be n e f i t s . Mean annual increment can be viewed as a serie s of annual volumes that can be harvested from e x i s t i n g stocks. From the perspective of the present the volumes harvestable i n the near future are more a t t r a c t i v e than those a v a i l a b l e l a t e r . Society's preference f o r the d i s t r i b u t i o n of benefits i n time i s expressed through the discount rate. There has been considerable debate on the correct i n t e r -50. pretation of t h i s preference. A task force of the P r o v i n c i a l government has suggested a rate of 10% (Province of B.C., 1978). This apparently includes an allowance for continuing i n f l a t i o n . A more appropriate rate f o r the kind of analysis presented here i s the r e a l rate of return on municipal and government bonds over the long-term. This rate i s between 2% and 4%. A r a t e of 4% has been used i n the examples i n t h i s t h e s i s . The accounting formula f o r the present worth of a s e r i e s of constant benefits a v a i l a b l e at yearly i n t e r v a l s i s : PW = V ( l - ( 1 + i ) ~ n ) / i where V = the annual benefit i = the i n t e r e s t rate as a decimal n = the number of years during which the benefit i s received. For the present worth of m.a.i. V i s the m.a.i. at harvest i n 3 m /ha/yr and n i s the number of years between the present and harvest. Table I I I shows the present worth of m.a.i. (or system benefit) of a stand that could be harvested i n any decade from the 3rd through 8th from the present. At the same time as.a stand i s contributing to the supply system i t i s accumulating volume that w i l l be a v a i l a b l e at harvest. As before, society has a preference for early b e n e f i t s that i s expressed through the discount rate. I t i s the present worth of the harvest volume which contributes to stand l e v e l b e n e f i t s . To s a t i s f y the p h y s i c a l y i e l d o r i e n t a t i o n of the Forest Service i t i s proposed to evaluate harvest "worth" i n p h y s i c a l y i e l d terms. To t h i s end the concept of stand components defined by stem dbh has been developed. 51. 30 40 50 60 70 80 50 150 215 265 310 350 1.67 3.75 4.30 4.42 4.43 4.38 28.88 74.22 92.37 100.0 110.75 104.75 TABLE III PRESENT WORTH OF MAI (SYSTEM BENEFIT) FOR A STAND HARVESTABLE IN THE 3rd THROUGH 8th DECADES FROM PRESENT Years from Present 3 Volume at Harvest (m /ha) 3 MAI at Harvest (m /ha/yr) 3 Present Worth of MAI (m /ha) or System Benefit 6.1.1 Stand Component View of Stand Value The value of a stem i s derived from i t s a b i l i t y to be manufactured into products for which there i s a demand. Consumer preferences f o r c e r t a i n types of products are expressed through premiums i n the p r i c e paid f o r them. The p r i c e structure f or sawn products i s very complex with many types and grades of product i d e n t i f i e d . In the process of deriving stand values for the harvest cost-zone analysis (Chapter 4.0) average values fo r lodgepole pine sawn products were examined for the year 1978. There was a strong r e l a t i o n s h i p between board width and unit value over the range examined. It i s assumed that there i s a s i m i l a r r e l a t i o n s h i p f or products m i l l e d from other species. The maximum width- boa'rd a stem can provide i s determined by the small end diameter in s i d e bark at the top of the f i r s t log length. For a given species t h i s i s related to stem dbh and taper. On average a stem of larger dbh w i l l provide a greater volume of larger logs than w i l l a stem of smaller dbh. The value per unit volume of wood from a log of larger small end diameter i s greater than that from a smaller log because (.1) there i s greater opportunity to manufacture a d i v e r s i t y of products and 52. thus e x p l o i t markets f o r e x p l i c i t products, and (2) i t costs l e s s to manufacture the same volume of wood from larger than from smaller pieces. The net e f f e c t i s to concentrate stand values on only part of the stand volume. It i s common to d i s t i n g u i s h between stands managed to produce s p e c i f i c products. For example, the Forest Service guidelines i n the Appendix r e f e r to sawtimber stands. I t i s l i k e l y that, given the r i g h t economic conditions, almost any stem could be sawn through improvements i n technology. Reference to sawtimber management i s therefore rather empty without further q u a l i f i c a t i o n of s i z e and q u a l i t y s p e c i f i c a t i o n . I t i s assumed that veneer volume w i l l always be more valuable than sawtimber volume which i n turn w i l l always be more valuable than volume that can only be chipped or pulped. This seems reasonable since, as the Forest Service guidelines i n the Appendix point out, i t i s always possible to pulp sawtimber, or, i f necessary, to saw veneer q u a l i t y logs. I t i s also assumed that there i s a log small-end diameter below which- i t i s not economic to manufacture veneer or lumber. These minimum sizes are determined by the state of technology employed by industry. It i s proposed that, f a i l i n g a s p e c i f i c analysis of trends i n the manufacturing industry, current p r a c t i c e s can be used to guide s i l v i c u l t u r a l planning. There i s a minimum stem dbh that can provide at l e a s t one veneer or sawtimber s i z e log. In a stand only those stems above t h i s minimum w i l l be able to contribute veneer or sawtimber volume. I t i s proposed to r e f e r to these stems as the veneer or sawtimber stand component. Other stand components, defined i n analogous ways, may be recognized. There i s , f o r example, an implied operable stand component. This provides the value which- permits the stems that are economically sub-merchantable but 53. administratively merchantable to be harvested. The volume i n stems larger than the u t i l i z a t i o n minimum dbh may also be considered as a merchantable stand component. I d e n t i f i c a t i o n of the minimum dbh for a component i s an expression of supply p o l i c y . Timber supply analysis can reveal the p o t e n t i a l f or s h o r t f a l l s i n supply of, not only merchantable y i e l d , but also s p e c i f i c log products. The assumption made i n the analysis about the development of i n d u s t r i a l capacity should be c a r r i e d into s i l v i c u l t u r a l planning. A stand-level p o l i c y such as the production of saw-timber volume can be interpreted i n the context of s o c i a l investment. At harvest a stand contains stems d i s t r i b u t e d around the stand average dbh. To be operable the stand must have an average dbh at l e a s t that of the zonal goal. Management can influence the d i s t r i b u t i o n of dbh to provide more or l e s s volume i n a s p e c i f i c stand component. Treatments are characterized by the degree to which they influence the s p e c i f i c component y i e l d . 6.1.2 Total Present Worth of a Stand The present worth of harvest y i e l d i s the volume of a s p e c i f i e d stand component discounted to the present. Intermediate y i e l d s are treated i n the same way. The accounting formula for the present worth of a benefit to be received n years i n the future i s : PW = Vn/(1 + i ) n where Vn = the s i z e of the benefit obtained i n year n and i = the discount rate (4%). Thus, i f the stand i n Table I I I were to be harvested i n year 80 the present 80 3 worth of merchantable y i e l d at harvest would be 350/1.04 = 15.18m /ha. The t o t a l present worth of the stand i s simply the sum of the present worths of m.a.i. and harvest volume. For the stand i n Table I I I at 80 years. 54. 3 t h i s would be 104.75 + 15.18 = 119.93 m /ha. Thus the expression for * «. i ^ • Vn . v ( l - (1 + i ) " n ) . t o t a l worth i s + — '- '- • (1 + i ) n i 6.2 Marginal E f f e c t s of Investment The e f f e c t of investment i n a stand i s to cause a change i n the development of the stand. It i s the c h a r a c t e r i s t i c s of the induced change which are subject to c o n t r o l through treatment design. The worth of an investment i s the degree to which the change i t induces s a t i s f i e s the objectives of management. In the case of s o c i a l investment changes are made i n both the system and stand-level worths of a stand by treatments required by objectives r e l a t e d p r i m a r i l y to the supply system. It i s proposed to characterize investments by the change they induce i n both l e v e l s of worth of a stand. 6.2.1 System Benefits In p r i n c i p l e these are simply the change i n present worth of mean annual increment over the l i f e of the investment. However, for a stand which has not been subject to investment, the contribution to system supply i s not the increment of the stand i t s e l f . The Production Forecast Method of the Forest Services r e l i e s on standard Forest Inventory y i e l d data. These data are currently organized into species composition, region an<l s i t e c l a s s groupings from which y i e l d curves are derived. The contribution of an i n d i v i d u a l stand to system increment i s a c t u a l l y the increment of the corresponding y i e l d curve. These y i e l d curves, known as Volume over Age Curves (VAC) were developed f o r y i e l d control purposes under d i f f e r e n t circumstances than now e x i s t and w i l l gradually be replaced. 55. U n t i l a new growth forecasting method i s i n operation they w i l l remain i n the timber supply analysis process. To obtain the change i n system contribution induced by investment the present worth of mean annual increment of the treated stand must be made net of the present worth expected from the stand had i t not been treated. This l a t t e r value i s the present worth of the mean annual increments of the appropriate VAC. Appropriate here means the VAC that would have been applied to project the growth of the stand i f no investment had been i n i t i a t e d . The mean annual increment of the stand a f t e r treatment must be supplied from management tables, computer simulation or consensus of informed opinion. The implication of introducing the VAC i s to impute a standard f o r the ef f e c t of investment. VAC's are l o c a l empirical y i e l d curves which express the growth of regional average stands. The stands e l i g i b l e for s o c i a l investment are l i k e l y to exhibit below average growth. Investment may improve stand growth which may s t i l l f a l l short of the average. The net present worth of mean annual increment, i n such a case, would be negative. Such investments are, however, s t i l l d e sirable. Therefore no i n t e r p r e t a t i o n of the sign of a present net worth e x i s t s beyond i t s normal algebraic meaning, e.g., a present net worth of -3 i s higher than one of -5 hut lower than one of 3. The expression f o r the present net worth of mean annual increment benefit of investment i s : 56. PNW = PWm - PW_ T u where T indicates the m.a.i. r e s u l t i n g from treatment and C indicates the m.a.i. at harvest f o r the stand i f no treatment i s applied; 6.2.2 Stand-Level Benefits The expected y i e l d at harvest of a stand i s not considered a system v a r i a b l e . The present worth of the harvest from a stand subject to invest-ment i s made net of the present worth of the harvest from the same stand i f not treated. In t h i s case only the volume of a s p e c i f i e d stand component i s considered. For example, the sawtimber benefit of investment i s the differe n c e i n net worths of sawtimber volume from the treated and non-treated stand. A stand may contribute to a s p e c i f i c product supply goal only i f i t can produce volume i n the appropriate stand component within the time-frame set by supply a n a l y s i s . This i s because the ro t a t i o n of the stand i s pr i m a r i l y r e l a t e d to the need for merchantable y i e l d . The presence of a time-frame within which benefits w i l l be r e a l i z e d suggests a method f o r determining the e l i g i b i l i t y of an investment opportunity f o r a s p e c i f i c product supply goal. If the stand type being considered f o r investment cannot be expected under any conditions to provide a s i g n i f i c a n t product benefit i n the time-frame required i t i s not necessary to modify treatments to encourage product component growth. There i s assumed to be a trade-off between merchantable volume production and component stand growth. The trade-off w i l l be most severe when a minimum component dbh i s f a r from the minimum u t i l i z a t i o n dbh. An 57. exploratory examination of fo r e s t inventory sample data f o r lodgepole pine was conducted for t h i s study. I t indicates that maximum production of volume i n stems ^7.1" (17.4 cm) and i n stems ^11.1" (21.2 cm) dbh i s found i n stands with- far fewer stems/ha than stands i n which there i s maximum production of volume i n stems ^5.1" (12.8 cm) dbh- at almost any age up to 120 years. This indicates that volume production i s directed into r e s t r i c t e d dbh ranges i n response to stand density. I t i s the volume i n stems ^12.5 cm dbh which i s considered merchantable. I t i s necessary, therefore, to adjust stand tending p r e s c r i p t i o n s when a stand i s e l i g i b l e f o r a product supply goal. For any stand that i s e l i g i b l e f o r a product supply goal there are always at le a s t two treatment a l t e r n a t i v e s . One w i l l seek to maximize system benefits with the product component production considered as a constraint while the other w i l l take the reverse view. A stand may he e l i g i b l e f o r the production of more than one product component. For each the evaluation procedure i s the same, 6.2.3 Determining the Time-Frame The period during which, harvest volume must be drawn from "closed" age classes provides the general time-frame for harvest. This can be obtained by evaluating the minimum age of harvested stands when the administratively determined age constraint i s removed i n a timber supply a n a l y s i s . Stands may become operable part-way through the general time-frame. There i s , therefore, a "window" within the time-frame during which a stand w i l l he able to contribute to short-term supply goals. This window can be defined i n terms of years from present and translated into stand ages when 5 8 . needed. As before, the minimum condition for harvest corresponds to the zonal average stem volume or average dbh.. If a stand reaches this condition after the beginning of the time-frame, the years from present to the period in which operability i s reached represent one side of the window. Otherwise this side of the window is determined by the earliest period in which, volume would have to be removed from a "closed" age class. The upper side of the harvest window is always the end of the period indicated by supply analysis. The harvest window for a stand that is treated i s not necessarily the same as that for the same stand i f not treated. Since stand-level benefits are only realized at harvest the number of years over which the harvest component volume i s to be discounted w i l l not be the same in both cases. Equally, system benefits cease when a stand is harvested; the period of contribution to system benefits may also be different for the treated and untreated stand. By the same token different treatments with common stand-level goals may have harvest windows of different lengths. In general i t is not possible to estimate when within the time-frame a specific stand w i l l be harvested. This i s a limitation imposed by the resolution of the data used in Production Forecasting. It is proposed that, from the supply planning viewpoint, i t i s an advantage to have f l e x i b i l i t y in scheduling the harvest of stands. Therefore, the benefit of investment over the harvest window for an opportunity i s of interest. It i s proposed to characterize opportunities by the benefits of investment at both, the upper and lower limits to the harvest window only. 6.2.4 Net Physical Benefit The total net present worth of system and stand-level benefits of investment for a single opportunity, evaluated to the upper and lower limits 59. of the harvest windows, constitute the value of the investment f o r planning purposes. For ease of reference each-of the two t o t a l net present worths w i l l be ref e r r e d to as the Net Physical Benefit (NPB) of investment, NPB's are c l a s s i f i e d by the product component of the stand-level benefit. Since a single stand may provide more than one product opportunity the corresponding NPB's should be distinguished by subscripts. Every opportunity w i l l have at least two NPB's for each p o t e n t i a l product, one at each, end of the harvest window. These should be distinguished by super-s c r i p t s . Thus, f or example, a stand which could be treated to produce either merchantable y i e l d only or to produce sawtimber would have at le a s t four NPB's which would be noted as NPBm, NPBUm, NPB1, and NPBU . If several s s d i f f e r e n t treatments could be used to produce sawtimber the NPB's would be prefixed to indic a t e to which treatment they belong. 6.3 Cost Per Unit of Net Physical Benefit The objective of planning the d i s t r i b u t i o n of investment i s to maximize the benefit obtained by that investment. Generally, planners face a fixed budget for investment. In the case of s o c i a l investments t h i s budget i s l i k e l y to be determined on the basis of supply a n a l y s i s . Under these circumstances the goal of planning i s to provide f o r the maximum contribution to the predicted supply s h o r t f a l l given the av a i l a b l e budget. This implies that the e f f i c i e n c y of investment i s a concern. This t o p i c i s the general area of cost-benefit analysis. I n i t i a l l y applied to engineering systems i n a m i l i t a r y context (English, 1968) i t has been applied to public investment i n f o r e s t r y on a wide scale. A r a t i o n a l e f o r a cost-benefit analysis has been developed by Massie (1972) and used by the Forest Service i n stand-level guidelines f o r intensive management (Brett and Benskin, 1978). In t h i s r a t i o n a l e the 60. marginal value increase attributable to investment can be exhausted by the cost of investment. That i s , public investments in intensive management should be self-financing but need not provide a return over and above that level. This rationale has been adopted in the proposed distribution system. Its expression has had to be seriously curtailed because stand value is not expli c i t l y considered. An expression of cost-efficiency for social investments i s the ratio of the costs of investment to the NPB which i t realizes. This ratio, the cost per unit of net physical benefit (.CNPB), ,is a variable of considerable u t i l i t y in deciding among investment alternatives. Since part of any NPB contains system benefits, system costs must be included in the ratio. System costs arise from activities which benefit more than one investment opportunity. For example, in aerial f e r t i l i z a t i o n the costs of the a i r -strip and access roads would be shared amongst a l l stands that are fe r t i l i z e d . It i s the CNPB which characterizes an investment opportunity. There i s a CNPB for each NPB associated with a stand. An extended example of the use of the CNPB as a decision variable has been prepared (Gasson, 1979b). 6.4 Assessing Inventoried Opportunities In practice the s i l v i c u l t u r a l i s t w i l l examine an area located by inventory and prescribe potential treatments for the area. His prescrip-tions w i l l be guided by the proximity of the supply time-frame, by the zonal stand goals, and by the physical attributes of the site and of the stand on i t . In this respect the proposed investment distribution system provides guidelines that have the same function as those in the Appendix. The efficiency of each proposed treatment w i l l then be assessed by calculation of a l l the appropriate costs per unit of net physical benefit. At this 61. stage choices between treatments with the same product supply goals can be made. The general p r i n c i p l e i s to choose the a l t e r n a t i v e with the lowest CNPB. A low CNPB implies a r e l a t i v e l y high c o s t - e f f i c i e n c y within a common product goal. However, the behaviour of the CNPB's across the time-frame must be considered. Treatments that provide early benefits may not be as a t t r a c t i v e i f the stand i s permitted to develop f o r a longer period. The exact r o t a t i o n of a stand within the l i m i t s set by i t s harvest window i s assumed to be unknown and unknowable. This sets the problem of making decisions that involve the r o t a t i o n length i n the realm of uncertainty. The s c i e n t i f i c d i s c i p l i n e of decision theory has developed i n response to the need to recognize the e f f e c t of chance processes on the consequences of decisions. There are three environments under which decisions are made;: cert a i n t y , r i s k , and uncertainty. For a discussion of the basis f o r decision-making under these environments see, for example, Smith- (1967). The approaches to decision-making under uncertainty u s e f u l f o r f o r e s t management have been summarized by Fight and B e l l (1977). I t i s proposed that, of the procedures they discuss, the minimax decision rules are most appropriate i n the context of s o c i a l investment. The minimax procedure requires that decisions be made on the basis of t h e i r l i k e l y outcomes under the worst conditions. The actual procedure proposed i n the minimax regret c r i t e r i o n . This seeks to reduce the p o t e n t i a l los s of benefit i f the r o t a t i o n length does not permit harvest when the benefit i s at i t s maximum within the harvest window. It i s proposed to use only the CNPB's at the lower and upper l i m i t s of the harvest window of an investment i n the procedure. Table IV contains the CNPB's f o r four 62. hypothetical a l t e r n a t i v e s which, w i l l be used to i l l u s t r a t e the procedure. TABLE IV SAWTIMBER COSTS PER UNIT OF NET PHYSICAL BENEFIT FOR FOUR HYPOTHETICAL TREATMENTS Treatment 1 2 3 4 l V \ ^ Z T r T * 6 0 9 0 5 5 90 65 90 65 90 ot 1, u l i m i t s CNPBs $/m3 7.50 13.25 1.25 12.50 6.25 3.75 5.00 6.25 The f i r s t step i s to plot the appropriate CNPB's on a time axis to provide an overview of the s i t u a t i o n . Note that the lower l i m i t of the harvest window i s not the same f o r a l l a l t e r n a t i v e s . There are 10 years i n which a l t e r n a t i v e 2 and 5 years i n which a l t e r n a t i v e 1 could contribute to supply goals but the other could not. It i s proposed that t h i s period not influence the decision between a l t e r n a t i v e s . The " e f f e c t i v e " harvest window i s thus from year 65 to year 90. If the period within which a s i n g l e a l t e r n a t i v e i s the sole opportunity to contribute to supply goal exceeds 20% of the t o t a l harvest window of that a l t e r n a t i v e i t i s proposed that i t be preferred. The c i r c l e d points i n Figure 14 represent the CNPBs i n Table IV. The s o l i d l i n e s j o i n i n g p a i r s of points are for c l a r i t y and do not represent the behaviour of the CNPBs over time. Under no r o t a t i o n length within the adjusted harvest window w i l l treatment 1 be the most e f f i c i e n t . It i s dominated by the other treatments and may be rejected. Treatment 2 i s the most favourable between year 65 and year 66, treatment 3 between years 73 and 90 and treatment 4 between years 67 and 72. The next step i s to prepare a table of "regrets". The regret for a treatment i s the differ e n c e between i t s CNPBs at one of the harvest 63. FIGURE 14- Plot of the C N P B s for the Sawtimber Alternatives Efficiency oi Investment of Four Potential Treatments of a Hypothetical Stand. 5 5 6 0 6 5 70 7 5 Years from present window l i m i t s and the lowest CNPBs at the same l i m i t offered by one of the a l t e r n a t i v e s . For t h i s example the minimum CNPBs at the lower l i m i t 3 i s that of treatment 2 at $4.50/m , and at the upper l i m i t i t i s that of 3 treatment 3 at $3.75/m . The regret table i s shown i n Table V. For t h i s example a s t r a i g h t l i n e extrapolation has been used to f i n d the CNPBs for treatment 2 at 65 years from the present. In pra c t i c e CNPBs w i l l not vary l i n e a r l y with time. When for t h i s a n a l y s i s , harvest windows have to be adjusted the CNPB concerned must be r e c a l c u l a t e d . The $1.75 regret, for example, of treatment 3 at 65 years from present i s simply interpreted. It i s the amount by which the CNPB i s increased by f a i l i n g to choose the most e f f i c i e n t treatment i f the benefits are r e a l i z e d i n year 65. The minimax c r i t e r i o n c a l l s for the s e l e c t i o n of the treatment which provides the minimum regret from amongst the maximum regrets. The maximum values are $8.75 for treatment 2 at 90 years, $1.75 64. TABLE V . REGRETS FOR SAWTIMBER ALTERNATIVES AT THE ADJUSTED HARVEST WINDOW LIMITS Treatment 2 3 4 IZZLV 65 90 65 90 65 90 Regret 0 8.75 1.75 0 0.5 2.5 for treatment 3 at 65 years and $2.50 for treatment 4 at 90 years. The preferred treatment would be 3. Once the most e f f i c i e n t treatments for the products for which the stand i s e l i g i b l e have been determined the assessment phase i s complete. The next phase i s the assembly of the annual a c t i v i t y budget. For t h i s a record of the d e t a i l s of the stand, of the most e f f i c i e n t treatments, and of the relevant CNPB values needs to be made. It i s suggested that a standard assessment form be developed. The form should be compatible with other stand assessment and s i l v i c u l t u r a l inventory documents and with any information handling systems i n use. 6.5 An Extension to Components: Species Preference The opportunity often a r i s e s , i n stand tending work, to increase the proportion of a preferred species i n a stand at harvest. Expressing t h i s preference i s equivalent to pre-empting supply management goals. Consider a stand containing an overstory of lodgepole pine and an understory of Douglass-fir that i s e l i g i b l e f o r j u v e n i l e spacing. There i s often i to 1 metre d i f f e r e n c e i n height between the s t o r i e s i n these types of stands because of the rapid j u v e n i l e growth of lodgepole pine. Presently, Douglas-f i r i s more highly valued than the pine and there i s a tendency to 65. s a c r i f i c e the growth, advantage of the pine i n the spacing operation. This, of course, puts the stand onto a Douglas - r f i r , rather than a pine growth curve. If species was a strong element i n supply strategy there would be an e f f o r t to sustain y i e l d by species working c i r c l e s . Because t h i s i s not the case, from the s o c i a l investment viewpoint, the species of the y i e l d delivered i n the required time-frame i s not important. However, i n the same way that product components represent stand values, species contributes to stand-level b e n e f i t s . In t h i s sense species i s the same sort of factor i n analysis as the minimum component dbh. If either species i n a stand could form a f u l l y stocked r e s i d u a l stand and both can contribute harvest y i e l d within the time-frame then the choice between the " a l t e r n a t i v e treatments" can be based on the expected r e l a t i v e p r i c e of both. The procedure i s to determine the r e l a t i v e per unit p r i c e that would make the cost to present net worth r a t i o of both a l t e r n a t i v e s equal. The r a t i o of pr i c e s sets a lower bound against which p r i c e expectations can he judged. Consider the lodgepole pine - Douglas-fir example. The relevant data are shown i n Table VI. Without considering species except as a treatment l a b e l , the pine a l t e r n a t i v e dominates the f i r . At the lower 3 l i m i t (1) of the harvest window the CNPBs of the pine a l t e r n a t i v e i s $10/m , 3 and of the f i r i s $14/m . To convert these to r a t i o s of present net worth i t would be necessary to multiply the denominators by the unit value of wood at the time of harvest. Let $P, $D be these values f o r lodgepole pine, Douglas-fir r e s p e c t i v e l y . Then f or the a l t e r n a t i v e s to be of equal e f f i c i e n c y i n the production of stand values. 66. TABLE VI -BASIC DATA FOR DETERMINING RELATIVE SPECIES WORTH FOR THE LODGEPOLE PINE - DOUGLAS-FIR EXAMPLE Treatment Lodgepole Pine Douglas-Fir Limit of l u l u Harvest Windows NPBs m3 25 16.7 21.4 16.7 Cost $ 250 300 Pi: .NPBs * P = Df NPBs • * - D Cp Cd where PI NPBs, Df NPBs are the NPBs for pine, f i r a l t e r n a t i v e s r e s p e c t i v e l y P, D are as prices as described Cp, Cd are the treatment costs f o r pine, f i r r e s p e c t i v e l y from which D = Cd x PI NPBs P Cp x Df NPBs sub s t i t u t i n g the lowest l i m i t harvest window values D = 300 x 25 = . , P 250 x 21.4 S i m i l a r l y the r a t i o of D/P at the upper l i m i t to the harvest window i s 1.2 The i n t e r p r e t a t i o n of these r a t i o s i s straight-forward. At the lower l i m i t to the harvest window the value of Douglas^fir must be more than 1.4 times that of lodgepole pine to make the f i r a l t e r n a t i v e more c o s t - e f f i c i e n t than the pine. By the time the harvest window closes the minimum r a t i o i s 1.2. The analyst must ask himself whether i t i s l i k e l y that premiums for species w i l l be at t h i s l e v e l at that point i n the future? Is i t • l i k e l y that current premiums w i l l continue unchanged, or increase, i n the future ? 67. 6.6 An Extension to the CNPB: Other Resources The economic objectives of resource management i n B r i t i s h Columbia include increasing employment opportunities.(Province of B.C., 1978a). Intensive management programs provide employment opportunities i n s i l v i -c ulture and stand tending. If the p o t e n t i a l for creating short-term employment i s part of the j u s t i f i c a t i o n f o r undertaking s o c i a l investments, the benefits of investment should include the employment created. Other resources i n addition to investment funds may l i m i t the s i z e of a program i n a budget period. For example, there may only be a c e r t a i n number of hours i n a season that s p e c i a l machinery may be a v a i l a b l e to a management uni t . Maximizing e f f i c i e n c y i n the use of a resource i s equivalent to husbanding i t . The need to husband a resource should influence decisions about investments that employ i t . In p r i n c i p l e , the CNPB indexes e f f i c i e n c y i n the use of one resource, d o l l a r s , f o r the production of another, wood y i e l d . Employment and l i m i t i n g resources can be included i n the CNPB by modifying the d e f i n i t i o n s of p h y s i c a l benefit and cost. The r e s u l t , an extended CNPB r a t i o , can be used to aid i n the choice between a l t e r n a t i v e investment opportunities. 6.6.1 Extended Benefits I t i s proposed that the short-term employment benefit of an investment opportunity i s the t o t a l number of man-hours/ha needed to accomplish the task. The contribution of supervisory, "non-productive" workers should be pro-rated. The extended investment NPB i s the product of the y i e l d NPB and the 3 short-term employment ben e f i t s . The units are m - man-hours/ha. Note that these are not commensurate with NPB's calculated without reference to 68, employment benefits. 6.6.2 Extended Costs The limiting resource should be identified. For example, the avail-a b i l i t y of a mechanical crusher may be limiting in an investment program that includes many opportunities for juvenile spacing in lodgepole pine. The consumption of the limiting resource by an investment should be measured in appropriate units. For example, i f the total availability of the mechanical crusher i s expressed in operating hours per year, i t s use in individual investments i s in hours per hectare. The total extended cost of investment is the product of investment cost and consumption of the limiting resource. 6.6.3 Selecting Preferred Alternatives As with the CNPB ratio, the lower the extended CNPB the more efficient is an opportunity in the production of combined benefits, and in the use of combined resources. Therefore, when considering the treatment alter-natives for an individual stand, the extended CNPB's are treated in exactly the same way as before. It is li k e l y that different treatments w i l l be preferred i f other resources are allowed to influence the choices than i f only yield and dollar costs are considered. 6.6.4 An Example Showing the Influence of Other Resources  on a Decision Consider the four investment alternatives for which the sawtimber CNPB are shown in Table IV. Recall that the preferred treatment i s 3 on the basis of i t s CNPBs regret at year 65. Assume that employment benefits are part of the justification for investment and that a machine needed for a l l alternatives i s in limited supply. The man-hours needed and the machine hours used for each-alternative are shown in Table VII. The; extended CNPBs are found by multiplying the CNPBs of Table IV by the ratio of limiting 6.9. TABLE VII MAN-HOURS OF EMPLOYMENT AND MACHINE-HOURS NEEDED FOR FOUR SAWTIMBER ALTERNATIVES Treatment 1 Employment Man-Hours/ha 5 Limi t i n g Machine hours/ha 2 Resource resources to employment. The extended CNPBs are shown i n Table VIII and have been plotted on a time axis i n Figure 15. As before, treatment 1 i s dominated by the other a l t e r n a t i v e s and can be rejected. The minimum TABLE VIII: EXTENDED CNPBs FOR SAWTIMBER ALTERNATIVES Treatment 1 2 3 4 55 90 65 90 65 90 0.23 2.34 2.50 1.50 2.14 2.68 3 extended CNPB at the lower l i m i t i s that of treatment 2 at $0.90-hrs./m -3 man-hrs., and at the upper l i m i t i s that of treatment 3 at $1.50/hrs/m -man hrs. The regrets f o r the three non-dominated a l t e r n a t i v e s are shown i n Table IX. The maximum regrets are 0.85 at 90 years f or treatment 2, 1.60 at 65 years f o r treatment 3 and 1.25 at 65 years for treatment 4. The preferred treatment would thus be 2. 2 3 4 8 10 7 1.5 4 3 Years from present , n n n JC T I i • • ^  oU yu of P,u l i m i t s Extended CNPBs J , U U D , J U 70. FIGURE 16" Plot- of Extended CNPBs for the Sowtimber Alternatives Efficiency of Investment of Four Potentigl Treatments of o Hypothetical Stand with Consderetion of Resou-ce Use and Employment Created lower limit to harvest window 55 60 65 .70 75 90 65 9.0 Years from preset TABLE IX REGRETS FOR THE ALTERNATIVES WITH EXTENDED CNPBs Treatment .2 3 4 Years from present 65 90 65 90 65 90 Regret 0 0.85 1.60 0 1.24 1.18 Consider a f i x e d budget of $100,000 and 1100 hours of machine use. Assume that the stand f o r which treatments 2 and 3 are investment a l t e r -n a t i v e s i s 500 hectares i n extent and represents the only opportunity f o r investment. Assume the costs of treatment are $250 and $350/ha f o r t r e a t -ments 2 and 3 r e s p e c t i v e l y . Table X shows the t o t a l resource use of, and b e n e f i t s from, employing one of the a l t e r n a t i v e s . A greater area can be t r e a t e d and more employment created by favouring treatment 2. 71. TABLE X COMPARISON OF TREATMENTS 2 AND 3 IN A FIXED BUDGET Treatment Machine Treated Y i e l d Benefits m @ 65 yrs. @ 90 yrs. Total Man Hours Tot a l Machine Hours 2 400 22,222 8,000 3,200 600 3 275 15,400 25,667 2,750 1,100 * l i m i t e d by machine a v a i l a b i l i t y : Budget i s exhausted by an area of 286 ha. It i s not possible to say which treatment w i l l provide the greatest contribution to system benefits since the s i t u a t i o n changes through the 3 harvest window. The average contribution of treatment 2 i s 15,111 m and 3 3 that of treatment 3 i s 20,533 m . The difference, 5,422 m , can be viewed as the " p r i c e " of creating the a d d i t i o n a l 450 man-hours of employment. The marginal y i e l d cost of creating employment i s minimized by choosing between a l t e r n a t i v e s on the basis of the extended CNPB. 72. 7.0 ASSEMBLING THE ANNUAL ACTIVITY BUDGET The approach- to operational planning proposed here has been suggested by the assumed budgeting method for intensive management within the M i n i s t r y of Forests. P r o v i n c i a l budget appropriations are made on the basis of s t r a t e g i c analyses of the need and p o t e n t i a l s f o r intensive management on a regional basis. I t i s assumed that these appropriations w i l l a c t u a l l y be d i s t r i b u t e d to the regions. The intensive management budget f o r a region i s therefore " f i x e d " from the point of view of implementing opportunities inventoried under the proposed investment d i s t r i b u t i o n system. It i s further assumed that the annual regional budget i s l o s t i f not used i n the same budget period as i t i s appropriated. The goal of planning s o c i a l investments i s to maximize the benefit obtained from the annual regional budget. It i s assumed that the lack of an inventory of management opportunities i s a serious obstacle to an e f f i c i e n t d i s t r i b u t i o n of the a v a i l a b l e budget. The objective of the a c t i v i t y budget assembly phase i s to i d e n t i f y the program of assessed opportunities which approaches one of maximum benefit. In p r i n c i p l e the most e f f i c i e n t program that can be assembled from the inventory at any time i s that which contains the number of most e f f i c i e n t opportunities that exhausts the a v a i l a b l e budget. This can be obtained by ranking the opportunities by th e i r r e l a t i v e e f f i c i e n c i e s . If the inventory of opportunities i s small compared with, the need for i n v e s t -ment the absolute e f f i c i e n c y of the r e s u l t i n g program may not be high. It i s f o r t h i s reason that the generation of a l t e r n a t i v e s i s to be encouraged. The inventory and assessment phases of the investment d i s t r i b u t i o n system are ongoing a c t i v i t i e s . They w i l l provide a l i s t of opportunities ,73. which increases i n length over a period of time. Once i n each budget period, s u f f i c i e n t l y ahead of the beginning of the f i e l d season to permit operational planning, the investments to be funded must be chosen. To t h i s end a l l the opportunities a v a i l a b l e at t h i s time must be ranked by t h e i r r e l a t i v e e f f i c i e n c i e s . In the proposed investment d i s t r i b u t i o n system the c r i t e r i o n of e f f i c i e n c y i s the cost per unit of net phys i c a l benefit. The CNPB. r a t i o s used to choose between stand treatments f o r a s p e c i f i c product goal are not su i t a b l e f o r t h i s purpose. The primary objective of s o c i a l investment i s to permit the short-term rate of harvest required by timber supply p o l i c y . E f f i c i e n c y of investment with respect to t h i s objective i s indexed by merchantable volume CNPB r a t i o s only. The rank of an opportunity within the annual a c t i v i t y budget must therefore be determined on t h i s basis. The budget should be selected so that production of other stand components i s maximized within the investment program when possible. 7.1 Ranking Opportunities by Merchantable Volume CNPB The CNPB r a t i o used to select a stand treatment may be extended by considering other resources. These other resources may include employment i n the denominator and l i m i t i n g resources i n the numerator of the r a t i o . If employment i s used i n t h i s way i t i s an expression of p o l i c y i n the same way as volume benefits are. A l l opportunities should, therefore, have been discussed on the basis of an employment extended net ph y s i c a l benefit. It i s u n l i k e l y that the same resources l i m i t the scope of a l l t r e a t -ments. Not a l l opportunities w i l l , therefore, have been assessed on the basis of extended investment costs. There i s no p o l i c y to use l i m i t i n g resources, only that, i f used, they be husbanded. The consumption of 74. l i m i t i n g resources should therefore not appear i n the merchantable volume CNPB r a t i o used to rank an opportunity. The most e f f i c i e n t treatment for a product goal i s associated with a merchantable volume growth curve, as well as with the product component growth curve. There i s , therefore, a CNPB of merchantable volume corresponding to the most e f f i c i e n t CNPB of product volume. R e c a l l that net physical benefit of volume i s the sum of the system and stand-level benefits. The system benefits of a product opportunity and i t s corresponding merchantable volume production are the same. The stand-l e v e l benefit of the l a t t e r i s the d i f f e r e n c e i n merchantable volume discounted from the l i m i t s of the harvest window between the stand when treated and when not treated. If a stand i s e l i g i b l e to contribute sawtimber or veneer supply i t i s also e l i g i b l e to contribute to the supply of merchantable volume. I t i s assumed that the most e f f i c i e n t treatments for each product would be d i f f e r e n t from each other. There are therefore at l e a s t two CNPB of merchantable volume r a t i o s f o r each stand which i s e l i g i b l e f o r other product goals. It i s necessary to dedicate a stand to only one product before assigning i t s rank f o r the budget. 7.1.1 Identifying the Most Suitable Product for a Stand It i s proposed that the r e l a t i v e values of product and merchantable volumes be used to guide stand dedication. The procedure i s best i l l u s t r a t e d by example. Figure 16 shows the volume growth curves corresponding to the most e f f i c i e n t sawtimber and merchantable volume treatments for a hypothetical stand. Both treatments provide volume i n 76. FIGURE lb Illustrative Response to Most Efficient Sawtimber, Merchantable Volume Treatm-ents for a Hypothetical Stand 350 .300 ^ 2 5 0 o E " 2 0 0 <u I 5 150 25 1 0 0 5 0 0 N.B. maximising sawtimber volume in the time-frame requires sacrificing merchantable volume 10 20 30 •W 50 60 70 Years from present KEY: T R E A T M E N T Sawtimbw SYMBOL S GROWTH C U R V E S SawtimberComponent SYMBOL ^ s 80 90 100 ||0 120 •Tim e-freme for y i e l d benefits Timing of lha earliest operabifity Merchantable Volume M Merch. \*l. Component m T - T 0 the sawtimber component. The present worths of the harvest volumes and costs of treatment are shown i n Table X I . The present worth of merchant-able volume can be resolved i n t o merchantable and sawtimber components. For the cost e f f i c i e n c y of the two treatments f o r d o l l a r b e n e f i t s to be equal (sBS x Vs) + ((sBm-sBs) x Vm) = (mBs xVs) + ((mBm-mBs) x Vm) Cs Cm where sBs = sawtimber treatment present worth of sawtimber volume 3 Vs = value of sawtimber $/m sBm = sawtimber treatment present worth, of merchantable volume 76. Vm = value of merchantable volume $/m Cs = cost of sawtimber treatment mBs, Vs, mBm, Vm, Cm are the equivalent values f o r the merchantable volume treatment. This r e l a t i o n s h i p can be solved f o r the r a t i o Vs/Vm. In the example the r a t i o i s 13 and 11.25 at the lower and upper l i m i t s of the harvest window respectively. TABLE XI PRESENT WORTHS OF HARVEST VOLUMES AND COSTS OF TREATMENT FOR THE MOST EFFICIENT SAWTIMBER AND MERCHANTABLE VOLUME TREATMENTS Treatment Sawtimber Merchantable Volume Present Worth of Harvest Volume (m /ha) Sawtimber Merchantable Lower 7.39 4.77 Limit of Harvest Window Upper Lower Upper 8.35 10.92 9.23 5.57 13.88 10.70 Costs of Treatment $/ha 350 250 The i n t e r p r e t a t i o n of the r a t i o s i s that the value of wood i n stems larger than the minimum stand component dbh must be between 11 and 13 times greater than that i n stems l e s s than the minimum. I t i s proposed that a stand be dedicated to the production of the highest value product for which the cost e f f i c i e n c y of d o l l a r benefits i s not l i k e l y to be less than that of the most e f f i c i e n t merchantable volume treatment. If the r e l a t i v e value; of a product necessary for equal cost e f f i c i e n c i e s i s much higher than can be expected the stand i s not suited to the production of that product. The actual values of the components of present worth of merchantable volume w i l l depend on the average c h a r a c t e r i s t i c s of the stems i n each component. Some guidance about future r e l a t i v e values can be obtained by considering present r e l a t i v e values. Information of t h i s type can be derived from the Harvest-Cost Zone Analysis (Chapter 4.0). Assume that the example given i n t h i s section i s f o r lodgepole pine and that the minimum sawtimber component dbh i s 21 cm. Assume that the minimum stand dbh at harvest i s 25 cm. The d i s t r i b u t i o n of stem numbers by dbh cl a s s for an average stand dbh has been tabulated for dense, natural stands of lodgepole pine i n Alberta (Johnstone, 1976). At an average stand dbh of 25 cm the average diameter of stems larger than 21 cm i s l i k e l y to be approximately 32 cm, while that of stems les s than 21 cm but larger than 12 cm i s l i k e l y to be about 18 cm. From Figure 13 the average stem 3 3 volumes f o r these components would be 0.9 m and 0.15 m r e s p e c t i v e l y . 3 From Figure 5 the per unit value of the larger stems i s $143/m and of 3 the smaller i s $105/m . The current r e l a t i v e value of the sawtimber component i s thus 1.36. I t i s not l i k e l y that i n 70 to 90 years the r e l a t i v e value w i l l have r i s e n to that required to favour the sawtimber treatment i n the example. 7.1.2 Ranking Dedicated Stands Once stands have been dedicated to a product they can be represented by a si n g l e product investment opportunity. The opportunity i s characterized by the CNPB of merchantable volume, extended by the employment created, i f necessary, at the lower and upper l i m i t s of the harvest l i m i t s . The c h a r a c t e r i s t i c CNPB r a t i o s of a l l opportunities are commensurable. However, the opportunities cannot yet be ranked. F i r s t l y , the harvest 78. windows of the opportunities are not l i k e l y to a l l be coincident with the beginning of the time-frame for y i e l d b e n e f i t s . Coverage of the whole period of the time-frame i s assumed to be a system benefit, but t h i s does not imply automatic preference to opportunities that are operable early i n the period. Secondly, there are two CNPB r a t i o s f o r every opportunity which would provide inconsistent ranks i f used separately. I t i s proposed that the a v a i l a b l e opportunities be segregated by the decade i n which y i e l d benefits are f i r s t a v a i l a b l e . Thus, f o r example one group would contain a l l opportunities i n which the stand becomes operable either before the beginning of, or up to 10 years, into the time-frame. The next group would contain these opportunities that are f i r s t operable from 11 to 20 years into the time-frame, and so on. Within any group, ranks are based on the minimax regrets, assuming a l l opportunities s t a r t and end at the same points. As before, a l l dominated opportunities must f i r s t be eliminated. In t h i s case there w i l l be subgroups of dominated opportunities. Within a subgroup none of the opportunities w i l l be dominated. Starting with, the subgroups with the lowest generalized CNPBm r a t i o s , the f i r s t rank i s assigned to the opportunity with the minimax regret. The second rank i s assigned to the second smallest maximum regret, and so on to the end of the f i r s t subgroup. Ranking continues i n subsequent subgroups u n t i l a l l the opportunities have been ranked within a decadal group. It i s proposed to characterize each, subgroup by the average CNPB of the opportunities within the subgroup. This r a t i o i s then used to assign a rank to the subgroup as a whole. The f i r s t rank i s assigned to the sub-group with-the lowest average CNPBm of a l l subgroups f o r a l l decades. The 79, second rank i s assigned to the subgroup with second lowest average CNPB and so on. When the annual investment budget i s to be d i s t r i b u t e d , the opportunities i n the f i r s t ranked subgroup are selected f o r funding f i r s t . The funds are d i s t r i b u t e d i n subgroup rank order. I f t h i s does not exhaust the investment funds the second ranked subgroup i s selected. Funds are d i s t r i b u t e d i n subgroup rank order, and so on u n t i l the funds are exhausted. Operational planning f or the selected opportunities can then begin. Stands o f f e r i n g opportunities which are not taken up i n t h i s budget period are l e f t on the books but must re-enter the system at the opportunity assessment phase. The opportunities a stand o f f e r s should be re-evaluated whenever s i l v i c u l t u r a l techniques, y i e l d estimates, or supply goals change. As stands age the treatments f o r which they are suit a b l e change, and the degree to which they w i l l respond to a treatment also changes. Opportunities cannot therefore be held i n d e f i n i t e l y . As inventory continues, opportunities w i l l be displaced and the stands that provide them w i l l no longer be suitable f o r treatment. Among the selected opportunities w i l l be those that use a l i m i t i n g resource. A check must be made that t o t a l consumption of a s p e c i f i c l i m i t i n g resource does not exceed the av a i l a b l e supply. Care must be taken to observe the o r i g i n a l circumstances under which the resource i s l i m i t i n g . For example, i f the resource i s d i s t r i b u t e d to a management unit then the opportunities within the unit that use the resource must be checked even though the Regional budget i s not developed on t h i s basis. If t o t a l consumption i s greater than can be supported, enough opportunities must be dropped to balance consumption and supply. The opportunities with the highest CNPBm r a t i o s should.be dropped f i r s t . Compensating oppor-80. tunities should be selected from the next ranked opportunities in the last subgroup funded or from the next ranked subgroup. 81, 8.0 SUMMARY AND DISCUSSION It i s proposed that public p o l i c y requires a supply o r i e n t a t i o n f o r the management of the public forest estate. This o r i e n t a t i o n has to be expressed within the administrative environment that governs f o r e s t management. Several environments e x i s t within B r i t i s h Columbia to r e f l e c t the degree to which industry accepts management r e s p o n s i b i l i t y . The Forest Service i s the sole agency responsible f o r s i l v i c u l t u r a l investment, or intensive management, over a s i g n i f i c a n t portion of the t o t a l estate. Under a supply o r i e n t a t i o n , investments are undertaken to support supply goals. In the management environment provided by the Forest Service alone these goals may be interpreted i n terms of the ph y s i c a l supply of wood f i b r e . In t h i s environment the economics of f o r e s t investment are not c e n t r a l to decision-making i n the planning and execution of investment programs. And yet, d i s t r i b u t i n g investment among the ava i l a b l e opportunities i s e s s e n t i a l l y an economic problem. There i s l i k e l y to be a t r a n s i t i o n period during which the Forest Service w i l l s h i f t i t s philosophy from phy s i c a l to economic wood supply. It i s proposed that there i s a cla s s of investments, here c a l l e d s o c i a l investments, which- must be undertaken before t h i s t r a n s i t i o n i s complete. The urgency for s o c i a l investment springs from the short-term component of timber supply p o l i c y . The scope of these investments i s quite l i m i t e d and i s defined by s t r a t e g i c timber supply analysis. The nature of t h i s analysis prevents i d e n t i f i c a t i o n of the opportunities within the forest  estate that must be exploited by s o c i a l investment. It does, however, 82. provide information which, can be used to characterize the type of opportunities that can contribute to short—term supply goals. Interpretation of the information from s t r a t e g i c analysis i n a form useful f o r s i l v i c u l t u r a l planning requires a system to integrate inventory, p r e s c r i p t i o n and programme planning. The function of the system i s to ensure the passage of objectives required by public p o l i c y through the planning chain to the type of stand treatments implemented. The objective of planning investment, i n t h i s context, i s to obtain the maximum benefit from the investment. The benefits of s o c i a l investment need not be l i m i t e d to t h e i r e f f e c t on short-term harvest rates. Longer term goals include those that would j u s t i f y investments from an entrepreneurial viewpoint but which are d i f f i c u l t to express within the Forest Service environment. There i s l i k e l y to be c o n f l i c t between the short- and long-term goals of s o c i a l investment. Since neither, alone, represents the public i n t e r e s t trade-o f f s among them are desirable. A s i l v i c u l t u r a l d i s t r i b u t i o n system has been proposed that i n t e r p r e t s basic economic r e l a t i o n s h i p s from a p h y s i c a l y i e l d o r i e n t a t i o n . It uses information from the timber supply analyses of the Forest Service to provide a time-frame within which the benefits of investment must be r e a l i z e d . I t provides a d e s c r i p t i o n of the f o r e s t estate which defines areas i n which s u i t a b l e investment opportunities are l i k e l y to be found. It provides a means to choose among a l t e r n a t i v e treatments f o r a suitable stand. F i n a l l y , i t provides a method to assemble an annual a c t i v i t y budget which, contains those opportunities that can best contribute to short-term supply p o l i c y . This method has been designed to maximize, as f a r as possible, the entrepreneurial benefits of investment. 83. The system can be used at many l e v e l s of p r e c i s i o n determined by the qu a l i t y of the information i t uses. The p r e c i s i o n required depends on the degree to which stand p r e s c r i p t i o n s can d i s t i n g u i s h among stand growth goals. As a system the proposal o f f e r s a means to incorporate changes i n the management environment into the decision-making process. The general approach i s to adjust the r e l a t i o n s h i p expressed by curves i n the preparation of inventory zones. I t would be better, however, to use the long-term trends to estimate future values f o r these r e l a t i o n s h i p s . 8.1 Using the System Intensive management i s a cooperative venture between industry and government. Even i n that part of the forest estate for which the Forest Service i s responsible f o r operational planning the act i v e cooperation of industry i s sought. The system can provide a means of communication between government and industry i n t h i s s i t u a t i o n . I t i s proposed that the system be implemented at the Resource Region l e v e l . That i s , i t i s the Regional intensive management budget which i s to he d i s t r i b u t e d through the system. Harvest cost zone analysis would also be accomplished with Regional input. Mapping of zones and the inventory of opportunities should, however, be Forest D i s t r i c t responsib-i l i t i e s . This i s to make best use of l o c a l knowledge. Assessment should be c a r r i e d out by the person who made the p r e s c r i p t i o n s . Control i s exercised i n the system by providing growth estimates and regional economic information. It i s proposed that s u f f i c i e n t control can be exercised by t h i s means to allow a great deal of freedom i n the inventory, p r e s c r i p t i o n and assessment phases of the system. Once the 84. rules for es t a b l i s h i n g zonal boundaries have been formulated these phases could be contracted out to industry. That i s , industry w i l l be able to determine, for i t s e l f , which opportunities are l i k e l y to be most suit a b l e for investment. It i s proposed that the documentation for a proposed investment, whatever i t s source, should contain a l l the information needed to determine i t s rank i n the budget d i s t r i b u t i o n phase. If the opportunity i s selected f o r funding, t h i s document w i l l become the contract for the operation. In p a r t i c u l a r , since the growth estimates w i l l already have been approved, the cost of investment used to c a l c u l a t e the CNPBs w i l l be the costs allowed, with the usual tolerance. The approach inherent i n the proposed system d i f f e r s from that currently taken by the Forest Service. At the moment the r e l a t i o n s h i p between s i l v i c u l t u r e and timber management does not receive the e x p l i c i t a t t ention i t should. E x i s t i n g guidelines f o r investment do not contain as much economic input as i s required f o r r a t i o n a l d i s t r i b u t i o n of resources. The new system provides a means to a l i g n timber management and s i l v i c u l t u r a l planning while r a t i o n a l i z i n g the way i n which resources are d i s t r i b u t e d . Regional development of the cost-zone boundaries should be undertaken as soon as possible to f a c i l i t a t e t e s t i n g and implementation of the new system. When i n use the system w i l l improve the q u a l i t y of investment decisions needed to increase both short- and long-term wood supplies i n B r i t i s h . Columbia. 85 . REFERENCES CITED Aune, J.E. 1979. Private correspondence. At the time Mr. Aune was on the staff of Forintek Corp. (formerly the Western Forest Products Laboratory, Environment Canada). Aune, J.E., and E.L. Lefebvre 1975. Small-log Sawmill Systems in Western Canada. Western Forest Products Laboratory, Environment Canada, Information Report VP-X-141. 59 pp. B.C.F.S. 1978. Logging Productivity Index Tables Metric Draft, November 10, 1978. Obtained from Valuation Branch, B.C. Forest Service, Victoria. B.C.F.S. 1979. Equipment rental rates for use in stumpage appraisal were published in 1979 in the Journal of Logging Management, January 1979. pp. 1786-7 under the t i t l e "Forest Service Sets Own Equipment Rates". Benskin, Henry. 1980. Address to a fourth year class in the Faculty of Forestry, U.B.C. (Mr. Benskin is associated with the preparation of resource programs for the Ministry of Forests, Victoria). Brett, Paul and Henry Benskin 1978. Guidelines for Cost-effective Intensive Forest Management in British Columbia. Reprinted from Pulp and Paper Canada, September 1978. 6 pp. Dobie, James 1978. Small-log Sawmill Yields in the B.C. Interior. Western Forest Products Laboratory, Environment Canada. Information Report VP-X-167. 10 pp. Dobie, James and D.M. Wright 1975. Conversion Factors for the Forest  Products Industry in Western Canada. Western Forest Products Laboratory, Environment Canada. Information Report VP-X-97 revised. 92 pp. English, J. Morley (Ed.) 1968. Cost-Effectiveness: The Economic Evaluation  of Engineered Systems. John Wiley and Sons Inc. 301 pp. Fight, Roger D. and Enoch F. Bell 1977. Dealing with Uncertainty - A Conceptual Approach for Timber Management Planning. U.S.D.A. Forest Service General Technical Report PNW-59. 18 pp. Fries, J. and S. Hagner 1970. Proceedings Silvicultural Decision Models. American Pulpwood Association, New York. 96 pp. Gasson, R. 1979. The Effect of Average Stand Diameter at Breast Height on  Conversion Returns for Lodgepole Pine in Interior B.C. Directed Study in Forest Policy in the Faculty of Forestry, U.B.C. 50 pp. 86. Gasson, R. 1979a. Relative Basal Area Classification iri Lodgepole Pine - A Partial Interpretation. Directed Study in Forest Management in the Faculty of Forestry, U.B.C. 45 pp. + appendices. Gasson, R. 1979b. A Forestry Investment Criterion to Aid in Tactical Decision-Making. Directed Study in Forest Economics in the Faculty of Forestry, U.B.C. 110 pp. Hall, T. 1979. Wood Supply and Forest Productivity Model WOSFOP. The card deck and documentation for this computer model were provided by Dr. Hall and adapted for U.B.C. computing f a c i l i t i e s by staff in the Faculty of Forestry. Hedin, I.B. 1978. Timber and Slope Characteristics Influencing Future Harvesting in British Columbia. Forest Engineering Research Institute of Canada Technical Report TR-21. 30 pp. + appendices. Johnstone, W.D. 1976. Variable Density Yield Tables for Natural Stands of Lodgepole Pine in Alberta. Canadian Forestry Service, Forestry Technical Report 20. 110 pp. (.The diameter distributions are in Table 7, p. 20). Lee, Y. 1966. Economics of Lodgepole Pine - Past, Present and Future in  British Columbia and Alberta. Directed Study in Forestry 581, Faculty of Forestry, U.B.C. Lussier, L.-J. 1976. The Forest Management Plan Operation in Quebec. Pulp and Paper Canada 77 (7). pp. 45-51. Massie, Michael R.C. 1972. The Forestry Fund: A Practical Method of  Evaluating Forestry Investment Alternatives. Canadian Forestry Service Forestry Economics Research Institute Information Report E-X-18. 13 pp. Ministry of Forests 1978. Yield Regulation Within Timber Supply Areas, July 1978. A White Paper for discussion purposes. Information Branch, Ministry of Forests, Victoria. 10 pp. Ministry of Forests 1978a. Annual Report, 1977. 63 pp. Ministry of Forests 1978b. Forest Planning Handbook, Planning Divison, September 1978. 110 pp. Ministry of Forests 1980. Five-Year Forest and Range Resources Program presented to the Provincial legislature March 1980. 31 pp. Ministry of Forests 1980a. Forest and Range Resource Analysis Report presented to the Provincial legislature March 1980. 27 pp. Province of B.C. 1977. Guidelines for Benefit Cost Analysis. Environment and Land Use Secretariat. 139 pp. + appendices. 87. Province of B.C. 1978. M i n i s t r y of Forests Act, B i l l 12 of 3rd Session, 31st Parliament, 1977. 5 pp. Sections 8 and 9 of the Act are concerned with l e g i s l a t i v e approval of resource analyses and programmes. Section 5 expresses the purposes and functions of the Mini s t r y . Province of B.C. 1978a. Towards an Economic Strategy f o r Canada Background  Papers Natural Resource Management and P r o v i n c i a l Economic Development presented at the 18th Annual Premiers' Conference New Brunswick by the Rt. Hon. W.R. Bennett. 16 pp. Reed, F.L.C. & Associates Ltd. 1978. Forest Management i n Canada. Volume 1. Forest Management I n s t i t u t e Information Report FMR-X-102. 155 pp. Smith, J.H.G. (Ed.) 1967. Chance and Change: Proceedings A Seminar on Decision Theory March 19, 1967, Un i v e r s i t y of B r i t i s h Columbia. 75 pp. Smith, J.H.G. 1973. F e a s i b i l i t y of Preparing Variable Density Y i e l d Tables. U n i v e r s i t y of B r i t i s h Columbia, Faculty of Forestry. 87 pp. 8 8 . APPENDIX FOREST SERVICE GUIDELINES ; . FOR INTENSIVE SILVICULTURE i F o r i n t e r n a l use by S i l v i c u l t u r e B r a n c h , B r i t i s h C o l u m b i a F o r e s t S e r v j ce CONTENTS Page Background 1 . Introduction 1 Definition of Treatments . . 3 Coast -Stand Tending Priorities by Treatment 8 Criteria for Setting Priorities within Treatments ' 9 Southern Interior » • Stand Tending Priorities by Treatment 16 Criteria for Setting Priorities within Treatments ^ Northern Interior - . ' * . Stand Tending Priorities by Treatment 20 Criteria for Setting Priorities within Treatments 21 Protection Guidelines 26 Guidelines for Licensees 35 BACKGROUND 90. S i l v i c u l t u r e s t a f f from the s ix Forest Regions and Headquarters met i n V i c t o r i a on January 31 and February 1, 1979 to develop a set of f i r s t approximation guidel ines fo r estab l i sh ing stand tending projects conducted under the intensive forestry program. For the purpose of guidel ine devel-opment, the province was divided into three broad regions: ( i ) Coast, being a l l of the Vancouver Forest Region and the coastal port ion of the Prince Rupert Forest Region; ( i i ) Southern I n t e r i o r , being a l l o f the Nelson and Kamloops Forest Regions and the Inter ior D o u g l a s - f i r zone of the Cariboo Forest Region; ( i i i ) Northern I n t e r i o r , comprising the Prince • George Forest Region, the i n t e r i o r port ion of the Prince Rupert Forest Region and the r e s t of the Cariboo Forest Region. Af ter review of the f i r s t approximation gu ide l ines , representat ives from each of these three regions met again with Headquarters s t a f f on May 14-15, 1979 to standardize guideline format as much as reasonably possible and to further review the included mater ia l . INTRODUCTION An analys is o f market demands done for Planning Branch suggests markets could absorb an annual production of 35 m i l l i o n cunits from B.C . by the year 2000. This leve l o f production could not be sustained without a major inten-s ive forest management program. Projected demand, i n conjunct ion with the establ ished pattern of manufacture in the f o r e s t indust ry , suggests that we should aim pur intensive forestry program to pr imar i ly produce sawlogs since pulpwood w i l l always be avai lable as a by-product of lumber product ion. A rational intensive management program can not be developed until the provincial timber supply analysis has been completed, defining the wood supply situation by TSA and identifying needs, opportunities and alternatives for en-hancing that wood supply. At present we must develop regional programs based mainly on best estimates and a fa i r amount of intuit ion. For these reasons, we should beware of large-scale ad hoc projects until we know with some cer-tainty where our efforts are needed and what particular act iv i t ies should be emphasized. A comprehensive, carefully considered program is currently needed to gain experience and cost data across a range of forest types for many stand tending act iv i t ies . This will provide us with a sol id footing on which to build when the timber supply analysis has more closely defined the major program needed. Given our current state of growth and yield knowledge we do not have the basis for c r i t i ca l cost-benefit evaluations of many types of treatments. Al l we can reasonably hope to do is to be as cost-effectiv£ as possible in carrying out stand tending projects. These guidelines are intended to help in establishing pr ior i t ies for treatments and in setting l imits , both on stand or area selection and on costs. The guidelines are s t r i c t ly interim in nature and substantial evolu-tion or modification is to be expected. Although we have developed guidelines for planting and juvenile spacing densities, we have not thought through the entire sequence of stand develop-ment to the end point of f inal harvest. Although the desired final stands at • • -3 -^ 9 2 . rotation, target stands, can be expected to vary somewhat by species and according to local wood production objectives, a l l . f i n a l stands can with certainty be expected to contain far fewer stems than years earlier at time of juvenile spacing. If we intend to capitalize on the early fast growth rates stimulated by juvenile spacing, possibly also accompanied by f e r t i l i -zation, and really shorten rotations substantially, then some additional reduction in stand density will be necessary between the time of juvenile spacing and final harvest. 'Where markets for small wood exist, and where other factors such as access and topography are favourable, commercial thinning will be possible. Where there are no small wood markets, or where access and topography are l imiting, we will have to waste-thin managed stands or face up to the pros-pect of stagnation, lengthened rotations and the wasting of earlier invest-ments in stand tending projects.. ' DEFINITION AND PURPOSE OF TREATMENTS 1. Juvenile Spacing: the reduction in number of stems per hectare to con-trol stocking, to prevent stagnation, to increase tree quality and thus end-product quality and value, to increase growth rates and provide for later interim harvests of useable wood, to reduce f inal harvest and milling costs and to reduce rotation length. Pre-commercial thinning and thinning-to-waste (waste thinning) are other terms included in this category. A project is currently classed as juvenile spacing when the majority of cut trees are not merchantable. Methods used for spacing may be: (i) manual, using a wide range of tools including powersaws; ( i i ) manual, applying chemicals to individual -4 -93. trees; ( i i i ) mechanized crushing or slashing; and (iv) combinations of these methods. 2. Brushing and Weeding: the elimination or reduction of competition from brush and weeds to recently planted seedlings or natural regeneration to enhance survival and provide better nutrient, moisture and l ight conditions for early stages of growth. Brushing and weeding projects apply particularly to young stands which are in danger of being substantially lost to brush and weeds. -Methods used include manual techniques using hand tools or chemicals and aerial spraying. 3. Conifer Release: to release established coniferous trees overtopped by shrubs or other undesirable trees. These projects are mainly for promoting growth, rather than survival, of overtopped conifers. . ". * Methods used include manual and chemical techniques, separately and in combination. 4. Seed Tree Control: to reduce or prevent the seeding of undesirable trees. Methods used involve treatment of individual trees either by powersaw, girdling or chemical application. : 5. Sanitation Spacing: to improve the growth and health of young stands by removing overtopping pole-sized, or larger defective stems (usually remaining after selective logging) and by controlling the density, species composition and disease level of advanced growth or new regeneration through spacing. Methods used are similar to those for juvenile spacing. -5-94. Several situations.come under this category. However, although undoubtedly a sanitat ion spacing measure by d e f i n i t i o n , mist letoe control warrants d i s -t i n c t i o n as a separate category. The fo l lowing treatments should be considered as belonging within san i ta t ion spacing. (a) Residual f a l l i n g , where trees l e f t unwanted a f t e r logging are f e l l e d because of poor form, poor genetic qual i ty and minor disease i n f e c t i o n . I f , however, prevention of mist letoe spread is the major aim then check-off mist le-toe control as the appropriate treatment category. (b) Decadent stem f a l l i n g in cedar-hemlock stands where no addit ional t reat -ment other than the spacing of advanced regeneration is required. I f the . f e l l i n g is followed by broadcast burning or other s i t e preparation measure, then use a r e h a b i l i t a t i o n l a b e l , rather than s a n i t a t i o n , for the treatment. (c) Quality s lashing of I .U. spruce-balsam. This is a loca l term used in the north Kamloops region. (d) Dry-belt Douglas- f i r san i ta t ion . I f the treatment involves f a l l i n g pole-s ize or larger res iduals and understory spac ing, use the sani tat ion l a b e l . If the area has already undergone salvage or normal logging and no large residuals remain, assign the project to j u v e n i l e spacing instead. 6. Mistletoe Contro l : to reduce or el iminate the spread o f mist letoe , which causes volume and q u a l i t y losses in con i fe rs , by e l iminat ing infected t rees . In current logging s i t u a t i o n s , mistletoe control should be regarded as a basic, forestry func t ion , not as stand tending, and a l l infected trees should be f e l l e d during logging operations. There a re , .however, substant ia l backlog areas where young stands have been or are being infected with mist letoe due to infected trees having been l e f t standing a f t e r logging. 95. 7. Rehabi l i ta t ion: to convert productive land occupied by undesirable stands or brush back to a condition appropriate for es tab l i sh ing desired conifer species. Rehabi l i tat ion projects d i f f e r from basic s i t e prepar-ation i n that they normally include a combination of treatments (such as salvage logging, knockdown, bunching or windrowing s l a s h , burning and planting) while s i t e preparation i s usua/Ily a s ing le treatment, immediately after logging, that i s necessary fo r basic crop re-establ ishment. Stump removal treatments to reduce or el iminate root- rot i n f e c t i o n centres are classed under r e h a b i l i t a t i o n . . 8. Commercial Thinning: to gain an interim harvest of merchantable trees,* and f e l l any residual non-merchantable stems, in an immature stand so as to leave a pre-determined number of high-dual i ty trees per hectare in order that volume and, more e s p e c i a l l y , value production w i l l be increased when the remaining stand i s eventually harvested. Commercial thinnings should, by d e f i n i t i o n , y i e l d a p o s i t i v e return over operating c o s t s . There may be pressure i n some areas to carry out thinnings with y i e l d i n stands that are submarginal commercially. Such part ia l subs id izat ion w i l l require a very c lear d e f i n i t i o n of expected benefits to j u s t i f y the investment. 9 . F e r t i l i z a t i o n : to promote a rapid accelerat ion i n growth on s i tes d e f i -c ient in one or more s o i l nutr ient elements, p a r t i c u l a r l y n i trogen in the P a c i f i c Northwest. Response to f e r t i l i z e r is usual ly fa r greater when i t i s applied i n conjunction with thinning rather than when used alone - a synergist ic e f f e c t i s often obtained. The use of f e r t i l i z e r may be p a r t i c -u la r ly advantageous to obtain a rapid and increased response in thinned -7 -stands that have been under a heavy degree of competition and where l i v e ' crown mass in i n s u f f i c i e n t to provide a response without some extra stimu-l a t i o n . 10. Pruning: to improve the market value of the f i n a l wood product by removal of the lower branches of crop trees, producing c l e a r , knotfree wood. This pract ice should be l imited to young stand on good s i tes where trees are of such a size that the knotty core w i l l be minimized to about 10 to 15 cm. -8-97. COAST Stand Tending P r i o r i t i e s by Treatment (a) High P r i o r i t y There are two broad p r i o r i t y categories, high and low, but within each of these categories there i s no implied p r i o r i t y re lated to the order of treatment l i s t i n g . (i) Juveni le spacing ( i i ) Brushing and weeding ( i i i ) Conifer release * ( iv) F e r t i l i z a t i o n (v) Commercial thinning (v i ) Rehabi l i tat ion (b) Low P r i o r i t y (i) Mist letoe control ( i i ) Seed tree control In most cases, the best opportunit ies for return on money spent l i e with the high p r i o r i t y treatments. Individual P.S.'Y.U. *s, T . S . A . ' s , or Ranger D i s t r i c t s w i l l have d i f f e r i n g p r i o r i t i e s depending on species pre-sent, age c lasses , access, loca l timber supply and other fo res t uses. Local managers w i l l have to se lec t projects according to loca l opportunit ies but the d i s t inc t ions between high and low p r i o r i t y treatments fo r each region must be borne in mind when developing a program - that i s , the p r i o r i t y guidel ines are there to be used. 9 8 . With time, as objectives become more c lear and more l o c a l l y spec i f i c and suitable inventory and growth and y i e l d data become ava i lab le , p r i o r i t i e s and stand select ion c r i t e r i a may be.modified. C r i te r ia for Sett ing P r i o r i t i e s within Treatment Categories When comparing a l ternat ive stands for most treatment categories, they are given p r i o r i t y rat ing numbers by factor . These numbers should be tota l led and the stand with the highest tota l is assigned f i r s t p r i o r i t y and so on, for the remaining candidate stands. Other factors may be used subject ively to decide between two otherwise equal stands. These factors need indiv idual considerat ion, they cannot eas i ly be broken down into p r i o r i t y categories. They are loca t ion , tota l s ize of area, s ize of blocks for contracts, commuting time, distance to manufacturing plant, protec-tion aspects, and disease (root-rot and mist letoe) . 1. Juvenile Spacing (a) Stand se lect ion Candidate stands should be evaluated for preferred species select ion according to the Tree Species Selection Guide or equivalent . I f more than one acceptable species is present, preference should be given to the more •£, valuable species. c- Factor P r i o r i t y Rati 1 4 ig , High 3 —^ Low 2 1 0(No) 852 (yrs) Site Index v ('50 y r s , metres) Stand Density/ha topography • Access w 10-15 36+ 2501-7500 2WD, Immediate 16-20 32-35 1501-2500 Under 20% 4WD, Immediate 21-25 ' 27-31 Over 7500 20-40% 4WD, Needs repair 26-30 21-26 751-1500 Over 40% Walk, under 1 km 31+ Under 21 Under 750 . Walk, over 1 km -10-99. (b) Selection of method for juveni le spacing ( i ) Density. Up to 15,000 stems/ha - manual, using power saw, shears, c i r c u l a r saw, p u l l i n g , chemical. - machine, affected by tree size", t e r r a i n , ground cover, a l r i g h t i f there i s no dominance expressed. Over 15,000 stems/ha - machine, choice o f machine affected by factors as above. Over 30,000 stems/ha - consider a l ternat ive program such as crush, burn and replant. ( i i ) Tree s i z e . Over 5 cm - power saw, hack and squ i r t , machine Under 5 cm - p u l l , shears, g i rd le , c i r c u l a r (brush) saw. ( i i i ) Topography. Machine - maximum slope approximately 20%. * Manual - maximum slope approximately 40%. ( i v ) Ground cover. Machines are l imi ted by s lope, tree s i z e , obstacles such as stumps, rocks and w i n d f a l l , (v) Protect ion . A protect ion plan is mandajtory__i_ ' ( v i ) Stand s t ructure . I f more than one story i s present then some other i treatment i s usually required. 2. Brushing and Weeding Factor P r i o r i t y R 3 at ing, High 2 ^ Low 1 % Brush closure Seedling qual i ty Stocking 80-100% Healthy Uniform 50-80% Questionable Patchy Under 50% Poor Scattered -11- 1 0 0 . Access, s i t e index and topography are rated as fo r juven i le spacing. Candidate plantations or s ingle species natural stands should be ranked according to the Tree Species Selection Guide or equivalent . Mixed natural stands should be ranked according to the major species pre-sent. If more than one acceptable species is present, preference should be given to the more valuable species. Several other aspects should be noted. A stocking survey i s required before treatment approval w i l l be given. A l l brushed-in stands that are adequately stocked (750-1000 stems/ha) should be t reated . Where stc-cking * f a l l s short of these l e v e l s , weeding projects w i l l only be considered where f i l l - p l a n t i n g in unstocked patches follows as soon as poss ib le . Mechanical s i t e preparation should be considered where f i l l - p l a n t i n g i s required in unstocked brushy patches. Chemical, manual and mechanical methods may be used. Chemical t r e a t -ments should be used where possible for cost -e f fect iveness . Forest managers must be prepared to t reat areas more than once i f necessary. 3. Conifer Release Candidate stands should be ranked for preferred species according to the Tree Species Select ion Guide or equivalent. P r i o r i t y Rating, High —> Low 1 Factor 3 I 2 % Canopy closure Understory qual i ty Stocking Topography Years to se l f - re lease 80-100% 50-80% Healthy Questionable Under 50% Poor Uniform Patchy Under 20% 20-40% Over 10 5-10 Scattered Over 40% Under 5 101. A stocking survey is required before treatment approval wi l l be given. Candidate stands should have a minimum stocking level of 750 stems per hectare. In areas of Sitka spruce weevil i n f e s t a t i o n , when t reat ing stands of S itka spruce, 50% overstory cover should be l e f t a f ter treatment to prevent weevil i n fes ta t ion . Chemical,'manual and mechanical methods may be used with chemical often being most c o s t - e f f e c t i v e . Conifer release projects may be combined with other stand tending a c t i v i t i e s in some cases, such as juveni le spacing. I t i s a lso an accep-table follow-up treatment to underplanting. 4. F e r t i l i z a t i on Factor P r i o r i t y Ranking, High 4 I 3 -> Low 2 1 and type -i l Nutrients 11 Moisture pl icat ion Method ?'rication Period Commercial thinning Juveni le spacing Poor (B) Rapidly (2) and well (3) drained Hel icopter (1200+ kg payload) Mid September to snow f a l l . J Juveni le spacing (under 20 y r s ) Medium (C) Moderately well (4) drained Fixed-wing a i r c r a f t Spring a f t e r snow melt, before growing season. Unspaced, open-grown stands 25-50 years, 500-1000 stems/ha Rich (D) Imperfectly (5) and poorly (6) drained Manual Wet snow up to 15 cm over unfrozen ground slopes under 30*. The bracketed l e t t e r s and numbers associated with s o i l nutr ient and moisture factors are from the Tree Species Se lect ion Guide. S o i l s with nutr ient levels of very poor (A) and very r i ch (E) should be rejected. S o i l s with moisture leve ls of excessively (0) , very rap id ly (1) and very poorly (7) drained should be rejected. 102. F e r t i l i z e r appl icat ions should not be made during summer because of urea v o l a t i l i z a t i o n or on snow deeper than 15 cm, espec ia l ly on steep slopes or over frozen ground because of losses in run-of f . Because of the l imi ted knowledge on response-to f e r t i l i z a t i o n , t r e a t -ments should be directed to Douglas-fir-and S i tka spruce forest types. Appl icat ions should be made as soon as possible a f t e r commercial thinning or juveni le spacing. When considering candidate stands, he ! i copter .o r a i r c r a f t fe r ry time between stands and landing s i tes must be weighed in r e l a t i o n to the cost of app l i cat ion . Long fer ry distances rapidly reduce the economic acces-s i b i l i t y of stands. . Unt i l further research data suggests otherwise, nitrogen f e r t i l i z e r as urea (46-0-0) should be used at the appl icat ion rate of 200 kg nitrogen per hectare. Monitoring for uniformity of app l i ca t ion should be carr ied out. ••* To s impl i fy f l y i n g patterns and improve uniformity of app l i ca t ion , areas to be treated should be l a i d out in rectangular or square blocks i f poss ib le . F e r t i l i z e r appl icat ions should be repeated at 5 to 7 year interva ls i f maximum growth rates are to be sustained. Because of the far more rapid breakdown of thinning slash a f te r f e r t i l i z a t i o n , th is treatment substant ia l ly accelerates the reduction of f i r e hazard. 103. 5. Commercial Thinning Commercial thinning w i l l be evaluated on an indiv idual project bas is . In the Vancouver Forest Region, f i r s t p r i o r i t y w i l l be given to Douglas-f i r types, second p r i o r i t y to hemlock types. No commercial thinning operation w i l l be considered unless the end resu l t i s s i l v i c u l t u r a l l y benef ic ia l to the stand, providing for high volume and value y i e l d s at rotat ion . The minimum economic standard for commercial thinning i s that there should be an average of 100 m /ha of merchantable wood ava i lab le for extraction over a thinning area. There i s no a r b i t r a r y upper l i m i t on volume that can be extracted. As long as 200 to 250 well-formed dominant Douglas-f ir can be selected to remain per hectare, or 250 to 300 s i m i l a r hemlock, any surplus merchantable volume may be removed. The important point is to ensure that volume and value expectations are rea l i zed by leaving the appropriate target number of trees f o r r o t a t i o n . Operations should be timed to exclude most of the growing season to avoid excessive and unnecessary bark damage to leave t rees . In general , operations can take place in hemlock stands from mid-September to mid-Apri l and in Douglas-fir stands from mid-August to m i d - A p r i l , although loca l d iscret ion should be used. Stumps of cut trees should be treated immedi-ate ly with an acceptable fungic idal agent to prevent in fec t ion by root - rot spores (Fomes annosus). 6. Rehabi l i tat ion Rehabi l i tat ion treatments w i l l require ind iv idua l project j u s t i f i -1 0 4 . cat ion . Projects w i l l be considered in alder and non-commercial brush on good and medium s i t e s only due to r e l a t i v e l y high treatment cos ts . Both chemical and mechanical treatment methods are acceptable, although g i rd l ing w i l l not normally be considered. Treatments must be c lose ly co-ordinated with sowing requests to ensure the provision of proper stock types. Forest managers should be prepared to follow up r e h a b i l i t a t i o n projects with a brushing program to ensure seedling surv iva l and growth. In Phellinus w e i r i i areas, special treatment w i l l be necessary for control of the root - rot when establ ish ing new stands. Where a susceptible species is to be re-estab l i shed , the :stumps o f suscept ib le species in the previous stand must be removed. 7. Mistletoe control This treatment w i l l be considered and j u s t i f i e d on an ind iv idua l pro-j e c t basis in residual backlog areas. Treatment w i l l be mechanical and should be carr ied out only in areas where hemlock is the preferred species 8. Seed tree control This treatment a lso .wil l be considered on an ind iv idual project basis and only where such control i s c l e a r l y b e n e f i c i a l . A lder i s the only spec to be treated, e i ther by chemical or manual techniques. -16- 105. SOUTHERN INTERIOR Stand Tending P r i o r i t i e s by Treatment There are two broad p r i o r i t y categories, high and low, but within each of these categories there i s no implied p r i o r i t y re lated to the order of treatment l i s t i n g . y ( i i ) ' Rehabi l i tat ion - c h i e f l y in decadent hemlock stands. ( i i i ) - Sanitat ion spacing - o l d . I . U . timber sale areas, ( iv) Brushing and weeding - plantations in wet-belt areas, subject to rapid and heavy brush growth, (v) Mist letoe cont ro l , (b) Low P r i o r i t y ( i ) Conifer release - e . g . plantation with deciduous overstory. I ( i i ) Seed tree control - to' reduce the spread of unwanted deciduous t rees . ( i i i ) Commercial th inning, ( iv) F e r t i l i z a t i o n - to be undertaken only as t r i a l s , not operat ional ly , j (v) Pruning. • In most cases, the best opportunit ies for return on money spent l i e with the high p r i o r i t y treatments. Individual P . S . Y . U . ' s , T . S . A . ' s or Ranger D i s t r i c t s w i l l have d i f f e r i n g p r i o r i t i e s depending on species present, age c lasses , access, loca l timber supply and other forest uses. Local managers w i l l have to se lec t projects according to loca l opportunit ies -17-106. but the d i s t inc t ions between high and low p r i o r i t y treatments for each region must be borne in mind when developing a program - that i s , the p r i o r i t y guidel ines are there to be used. With time, as objectives become more c lear and more l o c a l l y s p e c i f i c and suitable inventory and growth and y i e l d data become a v a i l a b l e , p r i o r -i t i e s and stand se lect ion c r i t e r i a may be modified. C r i t e r i a for Sett ing P r i o r i t i e s within Treatment Categories Having separated treatments into high and low p r i o r i t y groups, i t i s expected that few, i f any, projects in the low p r i o r i t y category w i l l " be carr ied out in the ear ly years of the intensive forest ry program. Any that may be selected because of unique local conditions should be c r i t i -c a l l y examined and j u s t i f i e d on an individual project bas i s . For high p r i o r i t y treatments, guidelines have been developed to a s s i s t in ranking candidate stands or areas so that funds ava i lab le might be spent to best advantage. Key factors in stand se lec t ion have been l i s t e d , with r e l a t i v e p r i o r i t i e s assigned to graduations within the factors . When comparing a l ternat ive stands for most treatment categories they are given p r i o r i t y rat ing numbers by factor . These numbers should be to ta l led and the stand with the highest total i s assigned f i r s t p r i o r i t y and so on, for the remaining candidate stands. Other factors may be used subject ively to decide between two otherwise equal stands. These factors need indiv idual cons iderat ion, they cannot eas i ly be broken down into p r i o r i t y categor ies . They are l o c a t i o n , tota l s i z e of area , s i z e of blocks fo r contracts , commuting time, distance to manufacturing p lant , protection aspects, and disease (root-rot and mist letoe) . -18-107. 1. Juvenile spacing ( P I , F, S and L types) -Factor i 3 3 r i o r i t y Rating, High 2 » Low 1 Percent l i v e crown Age, (years)-Stand density/ha S i te Class Access Size of area Dominance Damaging agents Ground cover 70% + 10-20 6.000-8j000 Good ' Immediate Over 50 ha None expressed None-1ight Bare-1ight 50%-70% 20-30 8,000-12,000 Medium Minor repairs 20-50 ha S l ight ly expressed Moderate Moderate 40-50% 30-40 12,000-15,000 Poor New access needed 10-20 ha Def in i te ly expressed Severe Heavy t 2. Rehabil itat ion of Decadent Stands Factor P r i o r i t y Rc 3 i t ing , High -2 > Low 1 Non-merchantable volume Site Class Access Size of area Planting stock avai lable Ease of machine movement Ni l Good Immediate Over 100 ha Yes Good Light Medium Minor repairs 50-100 ha Maybe Medium Medium Poor New access needed Less than 50 ha No Poor 3. Sanitation Spacing Factor P r i o r i t y Rating, Hie 3 h > [ 2 -OW 1 Site Class Access Size of area Overstory Young stand - as for Juvenile Spacing Good Immediate Over 50 ha Heavy defect ive tree stocking Medium Minor repairs 20-50 ha Moderate DTS Poor New access needed Under 20 ha Light DTS Whatever the species composition, this treatment applies where two stand components are found: ( i ) a vigorous young crop in need of spacing; ( i i ) defective residuals from previous logging. 1 0 8 . 4. Brushing and Weeding Factor P r i o r i t y fi 3 .atinq, High - — 2 * Low 1 Percent brush closure Seedling qual i ty Seedling leader growth Stocking Access 80-100% Good Under 10 cm Uniform Immediate 50-80% Fair 10-25 cm Patchy Minor repairs Under 50% Poor Over 25 cm Scattered New access needed 5. Mistletoe Control This treatment cannot be separated into p r i o r i t y categories as read i l y as other treatments. Appropriate act ion w i l l depend on: ( i ) s i l v i c u l t u r a l character i s t i cs of host species , e . g . can f i r e be a useful treatment as in l a r c h , ponderosa pine or old-growth Douglas-f i r ( i i ) s i t e , tree growth on high s i t e s can outs t r ip the growth of the paras i te; ( i i i ) degree of in festat ion on overstory and on regeneration; ( iv) s ize of the stand and extent' of i n f e s t a t i o n . -20-NORTHERN INTERIOR 109. Stand Tending P r i o r i t i e s by Treatment There are two broad p r i o r i t y categories, high and low, but within each of these categories there i s no implied p r i o r i t y re lated to the order of treatment l i s t i n g . (a) High P r i o n t y -Y ( i ( i i Juvenile spacing - emphasis should be on lodgepole pine, Douglas V f i r and spruce. Sanitat ion spacing - spruce and balsam types in o ld IU logging areas, mostly on good s i t e , ( i i i ) Brushing and weeding - spruce p lantat ions, ( iv) Rehabi l i tat ion - spruce, balsam, lodgepole pine and wet-belt cedar/hemlock types. - -(b) Low P r i o r i t y . ( i ) Conifer release - deciduous types with substant ia l spruce and Douglas-f i r components, ( i i ) F e r t i l i z a t i o n - low operational p r i o r i t y , high research p r i o r i t y . ( i i i ) Commercial thinning - wet belt Douglas- f i r , operational t r i a l s , ( iv) Seed tree control - to reduce the spread of undesirable d e c i -duous species, (vj Pruning, (v i ) Mist letoe control - lodgepole pine. ; In most cases, the best opportunit ies for return on money spent l i e with the high p r i o r i t y treatments. Individual P . S . Y . U . ' s , T . S . A . ' s , or Ranger D i s t r i c t s w i l l have d i f f e r i n g p r i o r i t i e s depending on species pVesent, age c l a s s e s / a c c e s s , loca l timber supply and other forest uses. Local managers w i l l have to se lect projects according to loca l opportunit ies but the d i s t inc t ions between high and low p r i o r i t y treatments f o r each region must be borne in mind when developing a program - that i s , the p r i o r i t y guidel ines are there to be used. With time, as object ives become more clear and more l o c a l l y s p e c i f i c and su i table . inventory and growth and y i e l d data become a v a i l a b l e , p r i o r -i t i e s and stand se lect ion c r i t e r i a may be modif ied. C r i t e r i a for Sett ing P r i o r i t i e s within Treatment Categories The table fol lowing i s an amalgamation of a l l the factors to be con-sidered f o r every treatment category. When using i t to determine r e l a t i v e p r i o r i t i e s between stands in the same category, e . g . juven i le spacing, use only those factors that are relevant and disregard those that are i r r e l -evant. When comparing a l ternat ive stands, they are given p r i o r i t y rat ing numbers by fac tor . These numbers should be t o t a l l e d and the stand with the highest tota l given f i r s t p r i o r i t y , and so on for the r e s t of the candidate stands. Unrated factors below the table may be used subject ive ly to decide between two otherwise equal stands. -22-.A 111. Factor P r io r i ty 3 Rating, High 2 •> Low 1 Density PI 10-15,000 3,000-10,000 15,000-20,000 A l l others - 7,500-15,000 2,000 f 2,000-7,500 'Stocking Homogeneous Patchy Scattered Si te Good Medium Poor Age * 10-15 15-25 25-30 Crop Quality ** Good Fair Poor Access Immediate Minor repairs New Access Needed Distance *** Under 50 km 50-100 km 100 km + Machine T r a f f i c a b i l i t y / F lat to easy Moderate slopes Steep slopes Topography r o l l i n g 0%-2Q% 20%-40% Over 40% Slash P r o f i l e L ight slash Medium s lash Heavy s lash Size of Area Over 100 ha 50-100 ha 25-50 ha 5B L ive Crown Over 70% 55-70% 40-55% Preferred Species Ratio Over 50% 20-50% Under 20% {restr icted to San. Spacing) • Deciduous Canopy Closure 80-100% 50-80% Under 50% (res t r i c ted to B&W, Con. Rel .) Age c r i t e r i a w i l l be higher for species suppressed i n the understory Crop qual i ty includes vigour, defective stems, presence o f damaging agents (disease, insects , w i l d l i f e ) Distance includes both commuting distance for project crews and distance to manufacturing centre for harvested products; I f these distances are d i f fe rent , i . e . the crews base and the mi l l are i n d i f fe rent towns, i < ! then use this factor twice - for each separate distance included. Some other factors need indiv idual considerat ion, they cannot eas i l y be broken down into p r i o r i t y categories. These include loca t ion , s ize of blocks f o r contracts as opposed to total treatable area, commuting time and pro-tect ion aspects. These factors can be used to decide between two or more apparently equal stands. For example, with locat ion , distances may be equal but one stand may be at low e levat ion, another high or roads to one stand may be good, to another very rough. -23-J u s t i f i c a t i o n for treatment 1 1 2 " 1• Juveni le Spacing Lodgepole Pine Types: - this species exhibits the worst overstocking problem; - responds very rapid ly in growth, p a r t i c u l a r l y in ear ly years (up to age 30), to- juveni le spacing; - i t i s the second major commercial species in the northern i n t e r i o r ; many extensive stands e x i s t that are access ib le and in close proximity to manufacturing centres; - s i tes occupied by th is type have high potent ia l fo r easy treatment and future mechanized logging. Dry Be l t F i r : - grows as a suppressed overstocked understory; - te r ra in conducive to easy, inexpensive access and mechanized logging; - located c lose to manufacturing centres; - high wood Value - preferred species; - requires spacing for eventual understory regeneration to perpetuate the stand; - capable of good response upon re lease. Spruce Types: - u t i l i z i n g an establ ished crop of a preferred species; - ear ly plantat ions may be overstocked by natural regeneration occurring amongst planted trees; - responds to treatment over wide age range; 2. Sanitat ion Spacing Spruce - Balsam and Balsam - Spruce Types: - extensive areas of o ld I . U . logging v i r t u a l l y a l l on good s i tes with remaining stems 113. exhib i t ing a poor rate and qua l i t y o f wood production; - spruce i s a preferred commercial species; - considerable volumes already e x i s t that can be e f f e c t i v e l y enhanced through crop tree se lect ion and density cont ro l ; - readi ly accessible and close to u t i l i z a t i o n centres; - responds to treatment over wide age range. 3. Brushing and Weeding Spruce Plantations: - many productive s i t e s display severe brush competit ion; - need to protect i n i t i a l investmentof p lant ing; - r e l a t i v e l y access ib le . 4. Rehabi l i tat ion ' • Spruce, Balsam, Lodgepole pine, Wet-Belt Types (Cedar, Hemlock): - extensive areas supporting l i t t l e or no merchantable volumes are occupying s i tes with some of the highest growth p o t e n t i a l ; . - n o alternate treatments possible both b i o l o g i c a l l y as wel l as c o s t - e f f e c t i v e l y . 5. Conifer Release Deciduous Types with Spruce and Douglas-f i r : - considerable areas of spruce and Douglas-f i r under deciduous species; - ex ist ing volumes have potential to be increased; - cos t -e f fec t ive aer ia l appl icat ion of herbic ides i s poss ib le ; i. - species are preferred commercial spec ies ; - lower p r i o r i t y due to locat ion and lack o f expert ise for operational work. 6. Mistletoe Control Lodgepole pine: - most severe in festat ions are on poor and low s i t e s , hence lowfer p r i o r i t y ; 114. - marginal gains .expected in wood volume and q u a l i t y ; - control should be a contractual or basic forest management funct ion; - control d i f f i c u l t to maintain within pro ject boundaries due to surrounding i n f e s t a t i o n s . 7. F e r t i l i z a t i o n Lodgepole pine, Douglas-f i r , Spruce: - i n s u f f i c i e n t quant i t ies of spaced stand media avai lab le to operat ional ly f e r t i l i z e ; ' - due to shortj^ growing season, ^ lessft^ response to f e r t i -l i z e r expected than on the Coast; - no data ex is ts on nutrient requirements for the area. •«8. Commercial Thinning, Pruning, Seed Tree Control : These remaining treatments are grouped at a low p r i o r i t y rat ing and w i l l be considered only in the future on an operational t r i a l bas is . Such treatments require further c o l l e c t i o n of expertise and data before being promoted on a wide-scale bas is . However, th is i s not to pre-suppose that these treatment types are to be completely ignored. As intens ive fo res t ' management practices broaden, proposals w i l l be welcomed and given favourable considerat ion. - 2 6 -115. PROTECTION GUIDELINES Protection considerations are inherent in the planning and carry ing out of stand tending projects , espec ia l ly those, such as juven i le spacing, that may produce a substantial amount of s lash. Projects resu l t ing in such s lash production should have an individual protect ion plan. The a b i l i t y to protect investments in stand tending must be of con-cern in select ing areas for treatment. Par t i cu lar attent ion should be paid to the f i r e climate of each candidate area. Some general p r i n c i p l e s can be readi ly appl ied, with loca l modif ication to s u i t condit ions , that w i l l reduce f i r e hazard and r i sk without incurr ing major costs . Where loca l protection measures are required of a contractor that w i l l put the basic contract price over the maximum l e v e l , the protect ion cost w i l l have to be j u s t i f i e d to the Regional Manager. Spacing Slash as a F i re Hazard The amount of s lash fuel produced by juveni le spacing with power saws and the duration of increased f i r e hazard depends on a number of f a c t o r s . Species differences can be quite pronounced. Some examples fo l low: Douglas-f i r - produces an extremely hazardous thinning s lash which reta ins extremely flammable cured fo l i age on the branches for one or two f i r e sea-sons, depending on time of year of spacing. Also f i r has a branching habit which res i s t s compaction from winter snow, tending to keep an elevated fuel bed for longer than some other species. Fine twigs remain on the s lash for longer than most other species , resu l t ing in less reduction in f i r e hazard a f te r needle drop than in other spec ies . 116. F i r stands of average Dbh greater than 10 cm and stand height greater than 10 m can be expected to produce a thinning slash of extreme'f i re hazard unti l needle drop occurs, which should happen a f t e r one winter in spring spacing or two winters in f a l l spacing. I f more than 2000 stems per»hectare are "cut in these la rger s i ze stands, fuel beds w i l l be deep and continuous, f i r e spread rates and i n t e n s i t i e s such that f i r e s w i l l be uncontrol lable while in s lash . Hazard would be rated high in such f i r stands during the second and th i rd year , once needle drop has occurred. Fine fuels and medium s lash begins to break down s i g n i f i c a n t l y during the fourth and f i f t h years , and hazard could be considered moderate. During the s ixth year , s lash break-down should have proceeded to the point where the hazard w i l l have been abated. Smaller s ized f i r stands of less than 7 cm average Dbh and* less than 7 m in height produce l i g h t s lash loadings. Such s lash,presents a shallow fuel bed, generally with d i scont inu i t ies in slash coverage. Hazard would be rated high in such stands unt i l needle drop. By the second year hazard should have dropped to moderate, and should be e f f e c t -i ve ly abated a f te r three years . Western red cedar- i s perhaps the next most hazardous species fo r spacing s lash . Its fo l i age remains on the branches for a year longer than f i r and even when detached from the branches, the fo l iage tends to form highly flammable suspended fuel mats up o f f the ground where they dry quickly and carry f i r e rap id ly . -28-A s i g n i f i c a n t cedar component (20% of the basal area or more) would a d d 1 1 7 ' one hazard class to the descr ipt ions for f i r . • lodgepole pine - forms an extreme hazard slash when large s ize stands are spaced (tree s ize greater than 10 cm Dbh and 10 m he ight) , and as with cedar, the lodgepole retains fo l iage for-two to three years . However, the branching habit of lodgepole is such that the fuel complexes se t t le very rapidly after the f i r s t winter snow, speeding up s lash decomposition. Slash from large s ize trees w i l l remain an extreme hazard unt i l needle  drop occurs. By the th i rd year such fue ls would be rated h igh, moderate i n the fourth year and abated after^f ive years. ~* Smaller lodgepole stands ( less than 7 .cm Dbh and 7 m high) w i l l form shallow but continuous fuel beds i f more than 10,000 stems per hectare are cut . Such s lash i s an extreme hazard unti l needle drop but should become moderate by the th i rd year and abated after four years . I f s lash breakdown is hindered by elevation of the slash bed doe "to old remnant dead and down f u e l s , as w i l l be the case on many lodgepole spacing opera-t i o n s , hazard abatement w i l l be somewhat slower and snow w i l l be less e f -f e c t i v e in quickly compacting the fuel bed. Smaller lodgepole stands where density i s such that less than 5000 sph are cut should resu l t in discontinuous s lash which should s a t i s f a c t o r i l y abate a f t e r 3 years. Western hemlock - loses i t s fo l i age so quickly (after one winter or one f i r e season whichever comes f i r s t ) that i t is not usual ly a major spacing s lash problem. Fine hemlock twigs drop quick ly , usual ly a f te r two years 118. and checking of bark, branch and bolewood also occurs within two years so that hemlock spacing slash should be only a moderate hazard during the second year and abated af ter three years . Western larch - needle f a l l i s rap id , f ine twig detachment and d is in tegra-t ion into small fragments occurs a f t e r one or at the most two winters so that la rch is one of the lowest hazard-producing species . As with hemlock, l a rch s lash should be a moderate hazard by the second year and abated a f ter three years . In mixtures with f i r , larch tends to break up the fuel cont inui ty and genera l ly reduce the hazard rat ing produced by pure f i r . F e r t i l i z a t i o n - should general ly improve the speed and degree of hazard abatement, both from the point of view of increasing rate of crown closure a f t e r spacing and in terms of i t s causing increased vegetation growth in the area of the slash bed, thereby creat ing a more favourable micro-climate fo r s lash deter iorat ion and ass i s t ing in creation of s lash fuel d i s c o n t i n u i t i e s . D i rect ional Fa l l ing A general spec i f i ca t ion in juven i le spacing operations should be con-s iderat ion of d i rect ional f a l l i n g , p a r t i c u l a r l y in such species as f i r and lodgepole where longer needle retent ion adds more time to the extreme hazard per iod. Direct ional f a l l i n g i s espec ia l l y e f fec t ive in gett ing the maximum possib le benefits from snow compaction of the fuel bed to speed up slash decomposition. Even where a substant ia l dead and down fuel bed exists oh the area pr ior to spacing, d i rec t iona l f a l l i n g w i l l minimize s lash height, maximize rate of s lash deter iorat ion and make traversing the area by w i l d -l i f e and domestic stock much eas ie r . Trampling of spacing s lash by w i l d l i f e and c a t t l e is a very e f f e c t i v e aid in speeding up natural reduction o f 1 1 9 , hazard without resort ing to other expensive mechanical means. Block Layout Considerations Block Size Restr ict ions on block s ize may be necessary in areas of high l ightn ing r i s k so as to avoid very large areas of continuous high or extreme hazard f u e l s . Treatment blocks should not exceed 100 ha without adequate separ-at ion of blocks by adjacent areas of untreated stands or abated slash in areas of high l ightning f i r e occurrence: If larger stands are being treated, then 50 ha would be a better maximum block s ize for high l ightn ing zones. Staggering of Blocks Area layout should take into account the duration of high hazard d i s -cussed under species, to ensure that adequate time for, natural hazard abate-ment i s allowed before an adjacent block is treated. . Such staggering of blocks to avoid large continuous areas of high and extreme hazard fuels should be done wherever s i g n i f i c a n t man-caused or l ightn ing f i r e r i sk e x i s t s . Topographic breaks and fuel type changes, e . g . deciduous stands, swamps etc . should be u t i l i z e d for the i r protection value as fuel breaks i n block layout. Buffer s t r ips Leave s t r ips as buffers along public roads and publ ic use areas such as recreation s i tes are very important prevention measures which can be taken with l i t t l e cost . -31-Several approaches to buffer s t r ips as fuel breaks are poss ib le . 1 2 iThey can be simply untreated s t r ips of the stand being spaced. They can be spaced but with the s lash pul led out and disposed of , usual ly by roadside burning in the safe season. They can be s t r ips spaced with the slash pul led back into the spaced area and p i led or windrowed. They can be c l e a r -cut s t r i p s l e f t to natural vegetation growth patterns or with low hazard vegetation seeded or planted or with semi-permanent f i r e retardant applied along the roadside. Of these many opt ions, probably the best buffer s t r i p along publ ic t rave l led roads through juveni le spacing areas i s an untreated s t r i p of the stand being spaced. The width of this s t r i p must be adequate to modify* the microclimate beneath the stand so as to lower the ease of i g n i -t i o n , rate of spread and d i f f i c u l t y of control opposed to the treated area. In some types, such buffer s t r ips may need no treatment at a l l or perhaps pruning of dead branches from tree boles to a height of 2.5 m to remove vert i ca l fuel cont inu i ty . Keeping unspaced buffers w i l l tend to hinder vegetation growth under the stand, e l iminat ing as much f i r e - c a r r y i n g fuel as possible . A closed canopy buffer s t r i p of unspaced young timber should be of s u f f i c i e n t width to s u i t the man-caused r i sk pattern along the roads through the area, and the detection and i n i t i a l attack response time and c a p a b i l i t y . The buffer s t r i p should give lead time on any f i r e occurr ing along roads before i t spreads into spacing slash f u e l . This makes guidel ines on necessary widths d i f f i c u l t to prescribe because each development area w i l l have d i f fe rent protection c a p a b i l i t y . Minimum e f f e c t i v e widths are eas ier to de f ine . A 5 m s t r i p i s c l e a r l y not much more than a cosmetic feature -32-121. to screen spacing slash from public view. Such a s t r i p does not provide e f fec t i ve shade for maintaining a cooler moisture micro-cl imate than in the s lash . A minimum buffer width for any s i g n i f i c a n t protect ion benef it < is 15 m where slope is less than 35% and 30 m for steeper s lopes. No f a l l i n g of trees into buffer s t r ips can be to le ra ted . An exception could be made for small s i ze stands ( less than 7 m height) where the best compromise in a buffer s t r i p may be a lO.m s t r i p spaced and the s lash pulled out to the road and disposed o f . Slash disposal i s pre-ferable to slash being pul led into the spaced block and p i led or windrowed. This practice creates Targe fuel concentrations and impedes access by cattl'e and w i l d l i f e which have a benef ic ia l e f fect on fuel hazard reduction through t h e i r trampling action during grazing .and browsing. This is another case of interre lat ionships being considered between s i l v i c u l t u r a l goa ls , pro-tect ion of the investment, cost of the treatment and impact on other resources. Other F i re Protection Measures Publ ic Information: on-s i te signs explaining the stand tending treatment, cautioning about f i r e hazard and advising that specia l campfire and access r e s t r i c t i o n s may be appl ied . Campfire r e s t r i c t i o n s , access r e s t r i c t i o n s : in stand tending areas where a long period of high and extreme f i r e danger combines with high publ ic use or travel and/or high l ightn ing f i r e r i s k , then special r e s t r i c t i o n formulae for campfire bans, publ ic travel and use and i n d u s t r i a l operation r e s t r i c t i o n s may have to be developed. 122. Such r e s t r i c t i o n formulae should be based on weather and fuel f lammabil ity factors related to ease of i g n i t i o n , rate of spread, a n d - d i f f i c u l t y of control of f i r e s s tar t ing in or spreading into slash fuels typica l of the bulk of juveni le spacing being carr ied out in the area. Special r a t -ings are needed for large areas of spacing slash because, not only does th i s fuel represent more hazardous conditions than accounted for by normal F i re Danger Rating c lasses , but spacing s lash , tending to be continuous and un-compacted during the years up to needle drop, even resul ts in guidel ines for c learcut logging slash under-estimating the ease of i g n i -t ion and Rate of Spread. Detection A stand tending development area w i l l probably need more f ixed-po int and mobile patrol detect ion and possible adjustments in a e r i a l patrol routes and scheduling. Such detection measures must be taken to minimize f i r e : reporting time pr imar i ly to keep man-caused f i r e s out of spacing s lash • where they w i l l qu ick ly become uncontrol lable and also to ensure the quick-est possible attack on l ightn ing st r ikes in these most highly flammable and rapid-drying fuels that occur in the province. I n i t i a l Attack The need for rapid i n i t i a l attack capab i l i ty fo r extensive areas of red needle spacing s lash i s evidenced by the potent ia l spread rates of such f u e l s . Spacing in la rger stands creates a red-needle s lash which w i l l spread at a rate of 25 m/min where the I n i t i a l Spread Index of the Canadian F i r e Weather Index is 15 or higher. Such burning condi t ions , which occur f o r s i g n i f i c a n t portions of the f i r e season in most of our areas except the -34-123. coast and, to the lesser extent, the interior wet belt, produce fires of such tremendous free burning growth potential (135 ha after 1 hour) that the importance of immediate detection, reporting and quick initial attack capability is obvious. ' Fuel Management Considerations in" Juvenile Spacing Contracts Lopping to a particular height specification is diff icult to admini-ster and in many spacing operations in larger stands and in stands having a significant dead and down fuel loading, lopping may be too expensive and • -will not achieve significant protection benefits. Directional falling can be more effective at no additional cost and should be considered in most conditions due to its benefits both in speeding up hazard abatement and easing access by both animals and later by men and either thinning or harvesting equipment. • . ' On "blocks where high old stumps are prevalent, providing high points for jack-potting of fuels, in addition to directional fall ing, avoidance of falling trees over such stumps should be specified as a protection measure. Creation of a mosaic of treatments in an extensive even-aged stand resulting from an old burn can have beneficial protection advantages as well as silvicultural age class distribution advantage. Clearcutting or machine clearing blocks or strips through or across juvenile spacing devel-opments, burning the clearcuts i f necessary and planting a new stand can have important advantages in breaking up the fuel mosaic into different hazard classes as well as different age classes. -35-1 2 4 . ' GUIDELINES FOR LICENSEES Stand tending projects will be carried out by licensees under credit to stumpage procedures. Licensees thereby become contractors to the Crown and subject to appropriate regulations and constraints. Inherent in this are the following considerations. 1) The licensee will submit a plan for his proposed act iv i t ies to the Regional Manager for approval for budget and technical purposes. 2) The cost of the proposed projects may hot exceed the expected revenue from that licensee. 3) Guidelines for Forest Service projects will apply to licensees. This applies particularly to costs which should be clearly indicated in pro-posals. 4.) Licensee projects will be subject to Forest Service inspection. 5) The licensee must use the same final reporting forms for a l l projects as are used by the Forest Service. 6) Monitoring by the Forest Service should be mainly concerned with technical aspects of the work. The financial statements wil l be subject to audit. 7) The licensees' projects should be tied in with their own working plans so that treatments will be sequential with their over-all operations. Stand tending projects are not necessarily a basic right or responsi-b i l i t y for licensees. Proposed projects must be compatible with needs identi-f ied by the timber supply analysis program. Any licensees1, basic s i lv iculture program must be completely up to date and up to required standards before any stand tending projects will be considered for approval under the intensive forestry program. 

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