In the early nonindustrial private forest (family forest) research literature, size of forest holding was identified as a critical variable impacting the propensity of family forest owners to invest in and manage small forest properties. This literature discusses relationships between size of forest holding and variables like forest owners' financial and asset positions, forest management objectives, use of a forest management plan and professional forestry advice, and use of forestry cost-share funding. Since then, the literature has expanded and now relates to the major problem of forest parcelization. We reviewed this literature for historical themes, technical considerations, and continuing ownership problems, emphasizing the current circumstances of forest parcelization and its historical roots in the size of forest holding problem. Many of the sociological, economic, financial, and technical relationships identified earlier as foundations of the size of forest holding problem are shown to be also fundamental to the parcelization problem in forestry. We suggest that today's parcelization issues are partially a continuation of the size of forest holding problem and that earlier research may be relevant to parcelization problems. We provide a detailed literature review that relates parcelization to the size of forest holding problem.
Beginning in the late 1970’s forest industry timberland gained the eye of financial investors. Diamond International and Crown Zellerbach were early firms that were purchased for the “break-up value” of their timberland. Timberland was perceived as undervalued by investors and made forest industry firms attractive takeover targets. This started a process where forest industry divested of its timberland. Some firms formed separate entities for its timberland base. Acquisitions and mergers became popular in the industry. Some forest industry companies converted to real estate investment trusts, for tax and defensive reasons. Large institutional investors became interested in timberland as means to diversify their portfolios and increase financial performance. Timber management investment organizations developed to manage and procure timberland for these institutional investors. Today little of the forest industry timberland remains with vertically-integrated forest products companies. South Carolina’s forest industry timberland decreased by about 800,000 ha since 1993 (or nearly 90%). This has implications for the state’s timber supply. Forest industry timberlands were some of the most productive and intensively managed forests in the state. We address how forest management might change on this timberland and how long-term timber supply might be impacted in the state
Family forest owners (FFOs) control a majority of private forestland in the United States and have widely diverse ownership and management objectives. Many FFOs manage their holdings for timber production and, thus, are concerned with issues such as reforestation incentives and tax treatment of timber revenues. Their actual knowledge of the tax aspects of timber management varies, with some owners even unaware of the federal income tax provisions that apply to timber. This research used econometric techniques to establish socioeconomic predictors of FFO awareness and use of federal income tax provisions. Socioeconomic factors (such as size of forest holding, ownership objective, education, age, and income) were evaluated in terms of association with awareness and use of income tax provisions. Data were obtained from a survey of 1350 South Carolina FFOs (472 useable responses). A two-step sample selection methodology revealed that membership in a landowner organization and size of forest holding positively influence landowner awareness of the seven tax provisions, while ownership objective and level of education exhibited varying degrees of influence. Overall, the findings suggest that size of forest holding is the key determinant that influences landowner use of the provisions. These tax incentives are one of the foundations of federal policies encouraging active forest management by FFOs and the effectiveness of the various incentives has crucial implications for forest policy analysis.
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