Economic Efficiency of Forest Tree Improvement Programs in the North Central Region

Abstract

An ex ante benefit-cost analysts was conducted of applied tree improvement programs in the North Central Region through the year 2030. The analysis covered 19 species used to produce timber, 4 species used for Christmas trees, and sugar maple used for sap production. Gross benefits of tree cmprovement were defined to be the drscounted increase in net value due to the higher productivity of improved stock when managed on identical rotations as unimproved stock, and costs were defined to be the present value of expenditures necessary to establish and operate seed orchards. The aggregate benefit-cost ratio for all species throughout the region was estimated to be 19.5 at 4%, with net benefits of $187 million. Of all net benefits, 90% stem from work with Chrtstmas trees, but the aggregate benefit-cost ratco for timber species is 2.8. Differences exist in the estimated efficiency of programs among states, but in general, states have focused their efforts on species with the greatest economic potential. Returns are greatest for species with short rotations and high product value that are planted in large numbers and that produce seed in large volume and reliably, characteristics which favor softwoods over hardwoods. Despite a professional and institutional climate that encourages long-term view points, forestry professionals have considerable difficulty expressing confidence in biological forecasts over even a few decades. This makes ex ante evaluation of forest tree improvement programs difficult, but the intuition of the scientists appears to have efficiency considerations built into it.