Reforestation delay tolerance under the Forestry Incentives Program
Abstract
The USDA Forest Service Forestry Incentives Program provides private forest landowners with cost-share assistance to encourage reforestation. With an excess of applications over available program funds, many participating landowners have to delay reforestation until funds are available. During delays, costs accrue to landowners and future harvest revenues are postponed. Sixty-three percent of the applicants sampled in South Carolina encountered delays, although the average delay was only 1 year and less than 9% waited more than 2 years. Delays became more common and longer as site preparation costs increased. To assess a landowner's tolerance of these delays, an investment model was developed. This model compared a base situation, in which a landowner chose not to wait for assistance, with decisions to delay reforestation in order to receive assistance. Delay tolerance ranged from 1 year to more than 10 years, depending on site quality, reforestation cost, and discount rate. None of the sampled applicants were found to have incurred a net loss due to delays, based on actual site conditions and delays. Similar results can be expected in other regions and with other forms of landowner assistance that reduce the initial costs of stand establishment.