Mississippi forest landowners were surveyed to determine average discount rates or “hurdle rates”—the lowest rates of return they consider acceptable—for 3 nonforestry investments, and for 5, 15, and 25 yr forestry investments. The survey included 829 individuals who owned at least 20 ac of uncultivated land and had harvested timber during a recent 5 yr period; survey results are therefore oriented toward commercially active forest landowners. On average, the private nonindustrial forest landowners included in the survey expect timberland investments to earn higher rates of compound interest than relatively low-risk bank savings accounts and certificates of deposit. Relatively short-term (5 yr) timberland investments, however, have lower minimum rates of return than stocks, bonds, and mutual funds. With forestry investments, all else equal, Mississippi nonindustrial private forest landowners prefer shorter time periods—average hurdle rates in nominal terms before taxes were 8.0% for forestry investments lasting 5 yr, 11.3% for those lasting 15 yr, and 13.1% for those lasting 25 yr. Household income significantly influenced the lowest rate of return considered acceptable for 5 yr forestry investments—the rate was 9% for landowners with annual incomes above $50,000 and 7.4% for landowners with annual incomes below $50,000. On a hurdle rate basis, higher income private landowners in Mississippi generally find forestry investments lasting 15 yr to be competitive with stocks, bonds, and mutual funds. However, Mississippi landowners' 13.1% required rate of return for 25 yr forestry investments was higher than the rate considered acceptable for the other investments included in the survey. Reforestation tax incentives, cost-shares, and related public policies that reduce the front-end costs incurred by NIPF landowners tend to increase the projected rate of return for relatively long-term reforestation investments. South. J. Appl. For. 26(1):26–31.
The absence of available credit to finance reforestation investments among NIPF landowners has been one of the contributing reasons why landowners do not reforest after harvest. Financial assistance programs are therefore a solution to initiating reforestation investments. However, previous studies indicate many landowners are not actively participating in existing government assistance programs. This paper examines reforestation loans as an alternative financial assistance program. Landowner participation in a proposed reforestation loan program is modeled using logistic regression. Results indicate that landowner participation in the program is influenced by ownership size, socio-demographic characteristics, and availability of other forestry incentive and assistance programs.
Standing timber is exempt from property taxation. Forest land subject to the property tax is assessed on its fair and reasonable market value. This is determined by the local assessor from information entered on the tax return and other available information. ALASKA Alaska has no instructions for assessing forest properties.
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