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Timberman sees land of Dixie as future 'wood basket' of the world

By Clayton JonesBusiness and financial writer of The Christian Science Monitor / May 11, 1981



If the South ever rises again, it may awaken to the sound of woodsmen yelling "timber" in a Southern accent ("tim-b-a-a-h-h"). The verdant Southern states could become the Middle East of timber in coming decades, William Haselton, chairman of St. Regis Paper Company, asserts.

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"The 21st century could witness a new ascendancy in the South, as that area assumes a position in the world timber market comparable to the place it held in the 18th-century cotton and tobacco industries," says Mr. Haselton, who also chairs the National Forest Products Association.

An unusual combination of extraordinary climate and soil conditions from Florida to Arkansas puts the South in a position of becoming the "wood basket" of the world, the St. Regis chief executive officer says.

Also, the rise of southern pine plywood for housing and other new know-how, such as how to convert heavily pitched pine into newsprint, have helped double the number of pulp and paper mills in the South over the past 25 years. Pulping capacity has quadrupled.

The mid-1980s will be a telling -- as well as a feeling --time for the South as many of the tree plantations begun after World War II become mature enough for cutting.

In the South, however, most commercial grade timberland is owned by private landowners. Nationwide, 58 percent of the timberland is held in private hands, with 18 percent controlled by government and 14 percent by the forest product industry.

St. Regis, which owns 2.5 million acres of Southern timber, has a philosophy of "Go South, grow trees, and export," according to Mr. Haselton. But it finds the "disassembly" of timberland among so many owners the major barrier to expanded harvests -- and to larger US wood exports.

"A forest products industry needs a secure land base," says Mark Lapping, forest expert at the University of Guelph in Ontario. "It is very difficult when you are dealing with 50,000 landowners."

Private owners of forest land rarely invest in timbergrowing practices such as site preparation or precommercial thinning. Few of them know what huge increases in productivity these kinds of practices will produce, Mr. Haselton says. May are just now aware of the value of their timber, or where to sell it.

The timber industry's greatest constraint, however, is tax twists that work against investment for long-term harvesting by individuals. The average forest landowner in the South is over 50 years old, for instance, and land will likely pass to heirs before harvest; the inheritors must pay estate taxes, and usually the land is broken up and sold.

To encourage tree farming, says Mr. Haselton, timberland should be treated as capital, able to receive investment tax credits. Also, landowners should be able to borrow on the future value of their timber with repayment when the timber is sold, backed up by disaster insurance.

"If properly cultivated, our Southern forest alone could fulfill America's needs and provide an abundant surplus for export," Haselton says.

One answer to dealing with piecemeal ownership is treefarm cooperatives, in which owners pool production and marketing. Some 165 timber cooperatives in the nation, however, have difficulty holding together, says James G. Byrne of the US Forest Service. Such "land assembly" is even more difficult during a boom in second homes and as inflationdistraught investors buy up bits and pieces of land.

Also, timber companies are skittish about working with co-ops. St. Regis, for instance, prefers a "fruitful partnership" with the thousands of private owners, rather than with a stronger bargaining body.

In the past three decades, the United States has grown 50 percent more wood than it harvested. "This nonproductivity posture explains why America harvests the same number of trees today as it did in 1900, even though its citizens consume 70 percent more lumber and eight times as much paper," Haselton says.

US demand for wood is expected to double by the end of the century, while world trade in forest products will likely double in the next 10 years, with Latin America the biggest new market.

Today, however, the US imports 63 percent of its newsprint and 28 percent of its lumber from Canada, the largest world timber exporter.

While the US ranks third behind the Soviet Union and Canada in forest acreage , its growing conditions give it the highest potential for productivity.

Haselton says American policies in recent years "have been not to harvest, but to hoard; not to replant timber, but to convert land to nontimber use."