"An Industrial Forester's Opinion of What Needs To Be Researched"
Russ McKinley, Timberlands Manager, Boise Cascade, Medford, OR

Capital

Competing for capital is between industries, not competitors within industries. Successful acquisition of capital to deploy intensive forestry requires the following:

• Knowledge of costs.
• An organization capable of large-scale deployment.
• Ability to project growth and value end products with credibility.
• In the end, it is discounted revenues minus discounted costs.

Companies that create value through intensive forestry do so by working the forest, not amassing the best research. Research has value when acres are treated.

The inherent variation in the growth response to climate and treatment is large and difficult to quantify with certainty. The result of this is the following:

• No one can provide the "definitive" answer.
• Computers allow multiple opinions to be analyzed.
• Variation frustrates lenders of capital.
• Researchers want lots of data before making conclusions. Researcher incentives
are capital for research and their personal credibility. Researchers do not get a bonus if results of treatments are better than anticipated, but do receive criticism if results are disappointing. Researchers are human and are motivated like you and I, by the incentives we receive. Researchers go where the money is.
• When it comes to silviculture and predicting growth and yield, we feel that coops
are the least cost approach but are difficult to manage.

Regulatory

Unless we have a regulatory climate that allows us to deploy intensive silviculture, the research has little value. The landowners, managers, regulators, and the general public or customers have distinctly different incentives and therefore view information differently. This is not one story, but four different stories.

Owners: How can I get a return on my investment?

Managers: How can I convince the owners to support my budget data, demonstrations, outside opinion, and put this in a logical convincing analysis?
How can I be sure what I propose will work?

Regulators: How can I get hurt or be sued if I permit a particular activity?
How do we ensure treatments are properly applied if permits are not required?

Customers and General Public: How do I benefit?
If I support this, will opinions from others be positive? Am I hurting something? (i.e. environment)
Who should I believe? I have lots of options. If I have doubts, I will buy somewhere else.
My time is valuable. My money is limited, so it has to work. It has to be fun, and
service counts.

America is strong and competitive because activities are legal unless specifically restricted by law, rules or custom. The legislative process sorts out what is to be outlawed or restricted. Research follows what the special interest groups hypothesize as potentially being a problem.

Forest Management Certification

Special interest groups have successfully created suspicion in the minds of owners and customers. Landowners and customers want credible third party opinions to counteract criticism.

Third party audits have been a part of American business for decades. When audit concerns are common to many landowners, Research Cooperatives make sense. Examples include:

• Bio-diversity
• Landscape Assessments
• Treatment Safety
• Best practices
• Growth and Yield

All this costs real money. Time will tell if it has value to the owners and customers. Companies in the end must meet consumer needs. Customers have the money and companies want it.

Research needs to be focused toward one of the four groups, meet their needs, and be done jointly for credibility and cost effectiveness. SFI is proactive and Regulatory is defensive.
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[Updated: April 4, 2002]