The low productivity of the small private forest is due to:
(a)
fragmentation;
(b) the scanty technical and financial means at the disposal of the owners.
The best method of improving production is, therefore, that of merging completely - within a homogeneous area, naturally - all the forest lands belonging to smallholders, the interests of the owners being indissolubly bound by a permanent contract. With this fusion of interests, the forests can be managed as one large unit. When pooled and applied to this larger unit capable of giving a profitable return, the owners' financial resources will be more effective; even the owners' deficiency in technical knowledge can be remedied when there are means for calling in one or several professional foresters.
This solution has, in numerous cases, already been brought about simply by the changes and chances of historical evolution - an evolution responsible for the community forests found in many countries.
Whatever system of forest ownership be recognized by State laws in countries where backward populations are still living, it is probable that, in most cases, the indigenous people regard recognized stretches of forest as belonging to a local community, if not precisely its property, at least as an area where that community holds the exclusive rights to hunting, gathering fruits, shifting cultivation, and so on. Economically weak, these communities have retained the notion of the forest as common property where all may gain their livelihood.
In Europe, the splitting up of the great feudal estates led to a variety of forms of forest ownership. Although there was a decided tendency in many periods to share out forest property - as in the case of other goods and chattels - between members of a community, yet the community-owned forest has remained extant in numerous regions. It is difficult to draw any conclusions from their present distribution because their formation is due at least as much to political as to physical and economic circumstances. They do not figure largely in Nordic countries: 40,000 hectares in Norway, 1,260,000 hectares in Sweden, 16,000 hectares (out of a total of about 438,000 hectares of forest) in Denmark. They are, on the contrary, numerous in mountainous regions. There are 18,000 such forests in Spain, with a total area considerably more than 6 million hectares (here, again, this applies to montes, not necessarily genuine forest). In France, their total area is over 3 million hectares; in Italy about 1,300,000 hectares representing one-third of the total forested area; in Switzerland, the proportion is as high as 72.2 percent, of which 4.9 percent is owned by the cantons and 67.8 percent by lesser communities and corporations.
The predominance of community ownership in mountainous regions is perhaps due to the very feeling that, where living conditions are somewhat difficult and large financial resources lacking, this form of ownership is best calculated to ensure the benefits which the community has a right to expect from the forest:
(a)
against avalanches, erosion, falls of rock;
(b) shelter and sometimes additional pasture for cattle;
(c) supplies of wood for heating and the repair of buildings.
If shared out among the members of the community, these forests would be subject to the whims of individuals and would run the risk of destruction or impoverishment until they could no longer fulfil those indispensable functions.
Collective forest-ownership, rooted in the past, takes the most diverse forms. In its simplest form, ownership is vested in an administrative unit with a certain legal autonomy: e.g., a village, a rural parish, or a town. Regulations, sometimes nationally applicable, sometimes peculiar to a region or even to individual administrative units, lay down the rights of each inhabitant to the production, in money or kind, of the forest. In the same way, the authorities responsible for managing the forest are appointed according to local, regional, or national usages or regulations.
It often happens, however, that the property and the normally-constituted administrative unit do not exactly coincide. For instance a forest may be owned solely by the inhabitants of a hamlet which is part of a larger parish. It may belong to several parishes or again to several hamlets lying in different parishes. Once again, in these various cases, the responsibilities for management and the methods of sharing products are determined by regulations which are the fruits of the lengthy historical evolution of these communities. Generally speaking, however, the fact of being a permanent resident - or having been resident for a certain period - in such villages, parishes or towns, entitles an individual to his share in the benefits from the common property.
This form of collective ownership presents considerable advantages. It does not of course in itself guarantee that the forest will receive the best kind of management; but at least it creates in the group of collective owners an attitude of mind in favor of the conservation and good upkeep of the forest. This way of thinking is so healthily developed in some countries that local authorities can be permitted complete liberty in the management of their forests; they will themselves employ all the specialists they require, helped by efficiently-trained and adequate staffs. The State, or its higher administrative organs, does not have to interfere save in laying down the broad lines of national forest policy and the general executive regulations with which the collectivity naturally complies. But the State may further intervene, if necessary, by aiding financially a collectivity wishing to carry out large-scale works, for instance road-building or the planting of wasteland.
If, however, the State authorities consider it advisable to exercise a stricter control, this can easily be done, for the owner in this case is the collectivity, and State action can be justified in that the State is, in a sense, guardian to the collectivity, and must see to it that collective properties are managed not solely in the present interest of the population, but also with due consideration of the future.
There is a further advantage in this type of ownership: it is sufficiently flexible to solve a possible conflict of interests between local and more general requirements. There is no reason why the members of a forest owning collectivity should not receive their shares of the income in kind rather than in cash, and so long as a certain kind or quality of timber is needed by the members of the community, the forest can to a large extent be managed so as to satisfy those needs. If and when the need ceases, methods of management can be changed so that the forest, now serving wider requirements, can still yield to the community an income equal or superior to that which was formerly enjoyed.
The value attributed to this form of collective ownership is evidenced by the fact that several countries where it is rare or non-existent are encouraging its development. In Turkey, for instance, villages and towns in areas far removed from forests are obliged to plant at least five hectares. The State grants suitable public land free of charge for this purpose, or the plantations are established on lands already belonging to the collectivity. In 1951, more than 400 villages had already established new woodlands, and the number is still increasing. Village forests are a feature also in Cyprus: this policy is, indeed, general throughout territories administered on the British pattern.
In North America, the pattern of evolution, which elsewhere resulted in the establishment of forests owned by villages or administrative communities, has not occurred but there is a marked tendency here also to create town and rural community forests. Perhaps the establishment of school forests may be regarded as a step in the same direction, although the chief purpose of this is education and demonstration, clearly useful objectives.
A still more interesting development is to be noted in countries where there is no private ownership of forests as such. Here similar organizations have been set up which, if they do not amount to collective ownership at least imply collective use. In the Soviet Union, several million hectares of forest have been turned over to Kolkhozes, which manage them under the control of the central administration. This is tantamount to recognizing that the local populations near the forests have a right to some priority in the satisfaction of their needs. From these forests the Kolkhozes have to obtain the fuelwood and building timber for their own use. Where the Kolkhozes, because of their location, could not be afforded such advantages, the general policy of the U.S.S.R. is, we know, to develop artificial plantations, especially in the form of shelterbelts for protecting soils and crops from the erosive and drying action of wind.
Recent reports, it is true, suggest that the management of the forests allocated to Kolkhozes is not entirely satisfactory. This, however, does not seem to have affected the principle of the thing; but perhaps the central control will be tightened to ensure that the forests are properly managed both to the advantage of the Kolkhozes and to the country as a whole.
In other countries where the forests are entirely State owned, special measures customarily ensure that the rural populations in the vicinity of the forests can obtain adequate wood supplies by the institution de jure or de facto of commoners' rights, which provide a solution satisfactory to a greater or less degree according to the control maintained upon the exercise of such rights. In Thailand, for instance, where there are no private forests, the Forest Service places restrictions only on reserved species (those of commercial value) while anyone is free to cut the unreserved species.
Collective forest ownership which has evolved from history is not always vested in a civil administrative unit. There are the parallel cases of forests belonging to religious communities, numerous not only in Europe but also in some Moslem countries; although, in the latter case, it is a matter rather of perpetual rights of usufruct than genuine ownership. There are also some forests collectively owned by public charities, the management of which is more or less directly State-controlled.
On the other hand, there are cases in which the rights to collective ownership have assumed an entirely personal character. They no longer depend upon the individual's membership of any administrative collectivity: they are vested in his person and are passed on to his descendants. These forests might be called Corporation forests, which is the name applied to them in Switzerland where they occur fairly frequently.
In that country, such forests occupy 40,000 hectares, 12 percent of the total area of private forestland. In the Federal Republic of Germany, forests of a similar category cover 280,000 hectares or 4 percent of the total forested area, and in Austria 138,000 hectares or much the same proportion. These two figures include forests belonging to recently established companies. Forests of the same type are to be found in France and elsewhere in Europe.
The historical origin of this form of ownership is the free banding together of individuals into a corporation, obviously under the pressure of economic conditions. In Switzerland, at any rate, many of them are Alpine corporations, owning, besides forests, extensive acres of alpine pastures, and they were nearly always originally constituted for the purpose of managing these pastures in common. In the Schwyz canton, for instance, there are very large corporations of this kind, totalling several thousand members and holding several thousand hectares of grazing land. Some forests known as forêts de bourgeoisie originally belonged to the citizens of a town, but since the ownership rights were vested in their persons and not in the town, these forests too are now corporation forests.
Corporation forests are completely independent of modern administrative units, and their administration is governed by regulations laid down in times long past and which are generally very strict; the corporation's supreme tribunal is the assembly of members.
As in the case of any other forms of ownership, it does not necessarily follow that a corporation forest is by the nature of the title deeds, thereby well managed. On the other hand, especially if it has other property besides woodlands - for instance alpine pastures that yield a high income - the corporation usually has enough current revenue to assure good management of its forests and enough capital to invest in improving their productivity.
The same advantages can accrue to any society formed by forest owners for the management of their forests, each proprietor contributing to the Society his own property, so that the forests can be managed as a single undivided unit.
There appear to be no legal obstacles to the formation of such societies in any country where the private ownership of forest is sanctioned in law. Technically, there may be difficulties in assessing the comparative worth of the various forests contributed by members in order to credit each with his fair share of the society's capital because the potential productive capacity of the land must be taken into consideration, besides the present value of the existing standing timber. But this is not an insurmountable difficulty.
Society-owned or company-owned forests are to be found in many countries, and some are very extensive. Of the 400 or so private forests exceeding 20,000 hectares in the United States of America, most belong to societies. Commercial companies connected with the sawmill or pulp industries together own more than 20 million hectares of forest. In Finland, industrial societies hold more than 1,400,000 hectares, the units averaging 36,000 hectares. In Sweden, similar properties amount to 25 percent of the country's total forest area. Railroad companies are often among the biggest forest-owners, as in Brazil, where one company has planted eucalypts on a considerable scale to supply fuel for its locomotives, and some metal industries are doing the same, to assure a ready supply of wood for their blast furnaces. Similarly, pulp mills in Italy and Spain have planted, or are planting, trees on a large scale. Some purely commercial enterprises are buying up forests as securities and a profitable form of investment.
This tendency is of interest and value in that it reverses the trend towards the fragmentation of forest land. There is a danger of course that good land which, in the light of the country's economic conditions, might more advantageously be used for agriculture, may be planted to trees. But at least when the forests are owned by big industrial enterprises using the wood as raw material for pulp-mills, for example, the fact that enormous capital is invested in these industries which cannot be redeemed in a matter of a few years, itself affords a solid guarantee, if not an absolute one, that the forests will be well managed on a sustaine- yield basis. The big timber firms, owning forests in the United States and in northern Europe, employ large staffs of foresters. If the mills are equipped (as is usually the case with the bigger organizations), to process the whole outturn of the forest in the most economical way, then there is an integrated harmony in the business as a whole and between the mills and the forests which feed them. None of these advantages obtains, of course, where companies are under-capitalized and are seeking only a quick return or a profitable speculation. Even in the best examples of integrated forest industries, there is always a risk that control may be gained by a group of shareholders whose personal interests are at variance with the long-term sound running of the concern; and the forest will pay the price.
All the bodies dealt with in preceding paragraphs have this feature in common, that they are industrial or commercial organizations whose ultimate object does not lie in the management of the forest. For them forest management is incidental, even in the case of the big timber industries. It would be quite possible for them to draw their raw material from forests that did not belong to them, and this is what usually happens at least as far as a part of their supplies is concerned. In most cases, their constitution is greatly different from that of the societies we examined at the beginning of this section. They are not composed of forest owners who band together in order to facilitate the management of their forests and to get better financial returns from them; they comprise individuals with money capital who combine to create an industrial organization or a commercial enterprise, and who find it profitable - either as a means of obtaining raw material for the industry or as an investment for capital - to buy fairly extensive areas of forest.
Of interest are the attempts made in some countries to bring small investors into such societies. The principle of the joint-stock company is the encouragement of small investors to take part in a large-scale enterprise; when, however, such a company acquires a forest, the latter does not necessarily mean anything more to the shareholders than any other properties which may constitute the company's assets.
Such a scheme, launched in Chile, has an original feature in that the company consists in reality of two bodies: a forest-holding in common, and an agrosylvo-industrial body. One of these companies, for instance, provides in its statutes that any co-operator holding stock to the value of 50,000 pesos (payable in several annuities) becomes owner of an allotment (not individually distinguished, it is true) of a 20,000 hectare forest. The resulting registered capital of one milliard pesos will be used to create a huge integrated forest industry, supplied from the forest, and ambitious tourist facilities. Invested capital is remunerated in the form of life annuities, and the co-operators enjoy several advantages which make the proposition very attractive: it is even accompanied by shares in several national lotteries and by a life insurance which, in the event of the co-operator's death before completing the purchase of his holding, guarantees the payment of the balance.
Here, then, is an ingenious scheme which, without fragmenting the forest, yet contrives to make a number of people interested in its efficient utilization; it tends to develop their "forest conscience" and usefully promotes forest industries. Chilean law allows a society of this kind to take a co-operative form, which entitles it to considerable tax relief.
Although there is no legal impediment to voluntary grouping by small forest owners, the institution of collective ownership by private owners rarely comes about by itself, despite the acknowledged drawbacks of small holdings and the obvious advantages of mergers.
The reason lies essentially in the individualism of the private owner. When his forest is completely merged into the property of a collectivity, the small owner obviously loses his freedom to work his forest how and when he wants. To receive, as from community forests, the produce at regular intervals is only a partial recompense, for the forest no longer represents a reserve against "a rainy day," as it is so often regarded by the small owner. And the sale of his holding in co-operative society would deprive him for ever of any rights over the land.
So far as is known, there is no country at the present time where there is any legal obligation for small owners to form associations and integrate their forest properties into single management units. There are, however, several co-operatives in Germany which originated from special legislation of this nature introduced before the Empire.
This was the beginning of the Jahnschaften of Olpe (Hesse) which were constituted in pursuance of a decree by the Grand Duke of Hesse in 1810. Between that year and 1848, 5,000 hectares of forest shared by 2,000 owners were incorporated into 36 ownership co-operatives, involving complete mergers of the forest properties. In 1897, a special forestry ordinance directed that the coppice in the area should be converted to high forest under State supervision; this measure helped rekindle the interest of the co-operators in their common property. The Haubergsgenossenschaften of Siegen (Westerwald), with 226 associations grouping 30,125 hectares and 11,000 owners, is a similar example, which also involved the conversion of coppice to high forest.
A measure in the same spirit - also in Germany - was the 1854 forestry ordinance issued in the district of Wittgenstein (Rothaaregebirge), obliging the smallholders of fallow land in 55 villages to band together in co-operatives for the purpose of reforesting the area. These co-operatives, however, were less strictly controlled than those mentioned in the paragraph before and they had little success. Only three could be successfully organized, grouping a total of 430 hectares, and the relative failure was attributed to the large capital outlay needed for the replanting operations, and loss of interest by the owners when deprived of control of their own lands.
The formation, voluntarily or otherwise, of associations of this kind is unquestionably easier where the lands to be grouped carry fairly uniform cover initially of little value (like scrub coppice which it is intended to enrich with better timber species), or are bare and can be profitably reforested. There is at least no difficulty over assessing fairly the different values of the aggregated lands, and there is an obvious incentive: the hope of securing profit, by common effort, from lands which hitherto bring in practically nothing.
A present-day example can be given of private owners being required to group their forests into a single working unit. Provision for this is contained in the Mexican Forest Law, article 13 of which provides for the establishment of Unidades Industriales de Explotación Forestal. The formation of forest Unidades for supplying a forest industry with raw material is regarded as being in the public interest, and the grouping may apply to any system of ownership. A Unidad may therefore include private property as well as national forests, or forests belonging to ejidates as well as to the communities. The owner loses no property rights over his land or over the forest upon it. Neither need he form an association with the other owners whose lands are included in the same Unidad. His forest, however, is integrated into a general working plan for the whole Unidad, and under this scheme, all the timber felled is reserved for the industry that is to be served by the Unidad. Each forest owner is free to bargain on the prices to be paid by the industrial concern, but if agreement is not reached, the prices can be arbitrarily fixed by the administrative authorities. If the Unidad includes ejidal or community forests, the working plans must make allowances for furnishing the wood requirements of the local populations who are the actual collective owners of the forests.
The request for the creation of a Unidad must come from the promoters of the industrial company, and authorization is only granted upon the production of reliable guarantees. The scheme has to be declared in the public interest by a Presidential decree. The Company's request must be accompanied by a working plan for the Unidad, based upon a detailed inventory which is subsequently carefully checked. The various interests concerned may have to submit to a public enquiry attended by representatives of both the Ministry of Trade and the Ministry of Agriculture, and, when necessary, the Department for Rural Agricultural Services.
This system works effectively and has given good results. It creates close ties between industry and the forest areas supplying the raw material, and does away with the obstacles to efficient management raised by the fragmented forest. It is doubtful, however, whether the system could be readily applicable where individual forests are small and ownership is much split up (for the Mexican forests are not of this kind). It presents, too, a disadvantage in that it is sometimes difficult to establish fair prices where the purchaser has a monopoly of the produce and there is no competitive buying. There is also no outside stimulus on the industrial enterprise itself to keep its methods and utilization techniques up to date. These drawbacks can of course in part be obviated by stricter State supervision of the company in return for privileges granted.
Fairly recently, legislation was introduced in the United States providing for the integration of all or part of a national forest with forest areas owned by commercial enterprises with a view to guaranteeing industries adequate sustained supplies of raw material. In spite of being hedged round by very cautious procedures, these measures have often been severely criticized as smacking of favoritism in the matter of raw material supplies and the recruitment of manpower. Such criticism might equally be launched against the Unidades and in both cases could only be answered by unequivocal State control over the enterprises which stand to benefit from the system. The adoption of some such scheme as the Unidad seems to be the answer to developing forests which are difficult otherwise to open up, such as virgin tropical forests which are parcelled out among various owners, as is frequently the case in South America.
Leaving aside exceptional cases such as that of the Unidades, the "rugged individualism" of private forest owners is not always the only obstacle in the way of setting up the kind of societies which have been discussed in this chapter, i.e., societies whose capital consists essentially of the forest lands belonging to the members who surrender their properties with the object of sharing in the profits that the Society can derive from the working of a forest tract sufficiently large to be managed to good advantage.
Sometimes the obstacles are legal in character, and it would perhaps be a good thing for governments that are faced with the problem of forest-fragmentation to take another look at the legislation relating to the constitution of co-operative societies, so as to obviate any difficulties in the way of forest smallholders. Company acts are aimed, as a whole, at helping or limiting, regulating or controlling the setting-up of commercial or industrial companies or societies. The forest societies of the type considered here have not, primarily, a commercial purpose; the forests which constitute the major part of their capital would be able to produce revenue without the necessity for the formation of any society, the purpose of which is essentially managerial.
How inadequate current laws are for the purpose of encouraging such societies has been recently revealed in France, where the law has had to be amended. French forest owners wishing to join together could previously only have recourse to four types. The ordinary commercial or industrial company was clearly unsuitable, being subject to taxation which would be out of all proportion to the income to be expected, especially where the prime object of the association was afforestation. The co-operative society, exempt from heavy taxes, nevertheless, by definition, excluded the complete merging of the forest lands, for each cooperator remains in possession of his own land. Moreover, this type of society, intended essentially for farmers, did not lend itself to proportionate profit-sharing among the members over and above the amount of fixed interest payable to each member on his shares in the co-operative. Finally, a societé civile, thanks to recent legislation, is subject to hardly any taxes save those which would normally fall on each separate member of the company, and would be well suited to the purpose in view; but its constitution, calling for unanimous agreement among the parties (and hence requiring a precise determination of every owner - sometimes difficult in the case of split-up properties) often presents insurmountable difficulties. A fourth type of association, the syndicate, which can be formed with the unanimous agreement of owners, could only serve for carrying out specific operations - replanting, for example - but not for the management of forests already constituted or later to be constituted.
An ordinance was issued on 30 December 1954, modifying the terms of associations to fit the needs of forest owners and, in particular, to allow them to merge their several forest lands.
This ordinance provides for the formation of forest associations for the purpose of "establishing, improving, equipping, conserving or managing one or several forest tracts," and all operations pertaining thereto, save those which would not constitute" a normal extension of agrarian activity," i.e., strictly industrial or commercial activities. This form of association is similar to a société civile. The parties in association are exempt from conveyancing dues or taxes on the value of the properties which they contribute to the group; the value of such properties is not represented by negotiable shares but by holdings which cannot be transferred to a third party outside the association except by the consent of the majority of the members. Moreover, in two cases at least, the formation of a forest group does not necessitate the adhesion of all the interested parties. One is the case in which a forest, following property division or inheritance, is held in joint possession - a situation which, in French law, would entail the regrettable fragmentation of the forest if one owner wished to release himself from the joint ownership. The other owners will, in the future - if they represent two thirds of the membership - be able to organize a forest group to buy the rights in jointly-held properties from those co-proprietors wishing to withdraw. The other case is where the owners hold lands included in afforestation areas, which may be so rated by the Minister of Agriculture in pursuance of a 1942 Act, as they are areas where afforestation is considered as being in the public interest. The Act of 30 December 1954 gives further powers to the Minister; he can compel all or some of the owners of land in an afforestation area to form a syndicate - a forestry association - to carry out the afforestation and to manage the forests once they are constituted unless the owners decide to set up a forest group.
This example shows that the legal obstacles standing in the way of the formation of forestry associations, so to allow a complete merger of the members' lands, are not always solely fiscal. But whereas in most countries considerable tax reliefs (and other advantages) are granted to owners wishing to plant forests, taxation is often relatively onerous on existing forests; it is desirable that these conditions should not be aggravated if associations intended to facilitate good forest management are to be encouraged.
The fragmentation of forest property is a serious problem in some countries. But still more countries are affected by a related problem which is often less remarked on, because there are few statistics available. This is the fragmentation of forest industries.
Fragmentation is not a feature of modern industries like pulp manufacture which requires large capital investment. On the other hand, it is extremely common in the case of the sawmill industry which still takes most of "the timber cut in the forest. For instance, a multiplicity of small sawmills is characteristic of forest industries in all European countries.
In 1950, there were 39,000 sawmills registered in the United States, of which 38,000 had an annual production of less than 2,525 standards of sawnwood. The production of many sawmills is naturally much lower than this; in Europe, it is as low as a few standards only. There are reported to be 1,100 sawmills in Greece and, since the volume of timber extracted annually is about 250,000 cubic meters of roundwood, the sawmills can be reckoned to absorb a yearly average of only 250 cubic meters each of roundwood at the most.
In other countries the situation is little different, aggravated by the fact that, in many parts of the world, sawing is still largely done by hand. In Paraguay, for instance, there appear to be some 500 to 600 pitsaws in operation and only about ten mechanized sawmills. In Eastern Pakistan, the pitsaw is almost exclusively used for sawing timber. The output is naturally very low - considerably less than 0.02 standard per man per day. Even in countries where there is more modern equipment, the number of sawmills tends to be high. In the Philippines there are 400 sawmills for an annual output of 226,840 standards of sawnwood, i. e., an annual output per mill of 567 standards of sawnwood.
The owners of most of these sawmills extract from the forest at least a part of the timber they convert. but they also buy roundwood, either from small forest owners who extract logs themselves, or from small logging enterprises. The latter are therefore even more numerous than the sawmills. Many small sawmills, in addition to working their own timber, do job work for local people, so that only part of the sawnwood that they turn out appears on the market.
There is of course an easy explanation for the multiplicity of sawmills. Roundwood is difficult to transport in bulk, and hence the advantage of setting up small sawmills as near to the source of supply as possible and sufficient to cater for local needs for sawnwood. The development of communications and mechanized transport tends towards the elimination of at least the more uneconomic mills. Still, fragmentation of forest properties favors the continued existence of many small mills which are able to obtain adequate supplies even at the cost of strong competition. Moreover, the small sawmill is often a sideline for a woodland owner, who is also a farmer and works the sawmill during the off-season with the help of his family or a small number of workers.
The small sawmill has undoubted advantages. It is a useful asset to the life of a rural community, for it gives employment to several people and supplies local needs for building timber at the cheapest price. The mill may form the nucleus of local industry and when, as often happens, it combines a related activity like making furniture or agricultural implements, it can become a source of prosperity to the community. The development of such enterprises is, for instance, obviously desirable in isolated rural communities where there is seasonal unemployment among farm workers.
In general, however, a multiplicity of small sawmills is regrettable. The owners are usually short of capital and are unable to keep up-to-date with technical advances (assuming that they know anything about them) or to renew their equipment in time. The machinery is usually inefficient and out-of-date, and - what is often the most serious - causes much wastage. The use of obsolete machinery and lack of organization means ineffectual use of power and labor. Despite the possible savings on delivery costs of the rough timber, it also means that the resulting sawnwood is likely to be unduly expensive. This very fact suggests that better organized large mills will tend to oust the smaller ones, which in any case rarely work to full capacity. In the Philippines, for instance, the potential capacity of the sawmills is twice their actual output.
Those drawbacks which can be urged against the small sawmill apply also to small logging operators. These small operators tend to be inefficient because they lack the modern equipment needed, especially when it comes to felling and extracting timber from difficult or remote areas. It is questionable whether the safety of the workers is better or worse safeguarded than with the big operators; and an enquiry into the real wages and living conditions of the workers might also be useful. In all fairness though, it must be admitted that the small operators give employment to local workers who might otherwise be unemployed or would drift to the towns, to the loss of both agriculture and forestry. Secondly, small operators can perform a useful function in silvicultural operations. Small teams, more easily controlled than large ones, are also in a better position for handling small timber operations, so frequent in regions where forest property is much fragmented. They can undertake operations which give little return, like clearing young stands, a task which may, nevertheless, be important for the maintenance of a satisfactory forest output.
These advantages, however, do not on the whole compensate for the drawbacks.
The disadvantages inherent in the small sawmills or the small logging enterprises might be partly remedied by association or even by simple commercial agreements. For instance, waste might well be put to use (and this is done in some countries) by arranging for a pulp or board mill to collect the waste from the small sawmills. The owners of small sawmills might conceivably pool their available capital and - wholly or partly, with or without the help of the State or banks, - finance the setting up of a special plant to process the waste. The owners might also combine to carry out certain operations in common, that is, the extraction and transport of the rough timber for their sawmills. Such associations exist in some countries, as for instance for floating timber to delivery points, and both the small sawmills and the big industries participate in them.
There are possibilities in every country for this kind of association; but each particular instance must be individually examined to determine whether the existing forms of association and the law pertaining to them are conducive to the conditions to be fulfilled as well as to the industrial policies envisaged. If, for instance, it is desired to concentrate the sawmill industry, it is obviously useless to help keep the small sawmills in being by facilitating certain of their operations. If, on the contrary, small sawmills are considered to be of value, measures must be taken to remedy their defects. If the aim is to induce efficient utilization of sawmill waste, some help may need to be given in the form of loans, tax exemptions or subsidies, because the small owners could not normally stand the taxes which might be levied upon the formation of a new company for utilizing much waste, nor could they probably find the capital to organize collection of the waste. If the efficient utilization of waste is important to the economic life of a country, as where forest resources are strictly limited, State help in setting up an appropriate association should be amply justified.
A complete merger of the production resources of small sawmills on the model of the complete merger of small forest properties would be difficult to organize. It would, in fact, mean the liquidation of the small existing concerns and their substitution by a new enterprise which might retain little of the old equipment or machinery. But an association of owners of small sawmills would offer some worthwhile advantages for the carrying out of limited operations, such as felling, extraction and transport of raw material supplies, although this might mean a large financial outlay on machinery to be really efficient.
