8 Sep 2009, 11:31am
Economics Management
by admin

Two Forests Under The Big Sky: Tribal V. Federal Management

Alison Berry. 2009. Two Forests Under The Big Sky: Tribal V. Federal Management. Property and Environment Research Center Policy Series No. 45, 2009

Full text [here]

Selected excerpts:


Two forests: similar resources, different outcomes. In northwest Montana, the U.S. Forest Service and the Confederated Salish and Kootenai Tribes (CSKT) oversee adjacent forests rich in pine, larch, and Douglas-fir. Both forests are managed for multiple resources, including timber production, recreation, and habitat for fish and wildlife. Despite many similarities, their economic and environmental performances differ.

National forests in the United States are not the harvest machines they once were. At the peak in 1987, these forests yielded 13 billion board feet in timber. Today, they produce a small fraction of that output. The harvest in 2008 was 2 billion board feet (USDA Forest Service 2008a). Critics of the Forest Service’s timber sale program may argue that this is a positive change since the Forest Service lost $88 million annually from below-cost timber sales in the late 1990s (USDA Forest Service 2001a).

There was also evidence of bloated operating costs and poor stewardship of watersheds and wildlife habitat (O’ Toole 1988; Leal 1995; Fretwell 1999). While the Forest Service is staffed with trained professionals, cumbersome regulations, environmental appeals, and political meddling interfere with responsible forest management.

With the decline of timber harvests, federal forest management and funding has increasingly focused on wildfire suppression. In 1991, 13 percent of the Forest Service budget was dedicated to fire management; by 2008 that figure had risen to 45 percent (USDA Forest Service 2008b). Although the agency’s stated goal is to reduce the risk of wildfire, most fire spending is devoted to a handful of large conflagrations — not prevention or restoration to avoid costly emergencies (O’Toole 2002; Berry 2008). …


The evolution from federal control to tribal control of reservation forests offers an interesting comparison to national forests. Resources on Indian reservations were managed by the U.S. Bureau of Indian Affairs (BIA) for much of the last century. Although the BIA was put in charge ostensibly “to protect Indians and their resources from Indians” (Morishima 1997), it became clear that the agency did not always serve the best interests of the tribes. One study comparing tribal versus BIA management of forest resources on Indian reservations found that “as tribal control increases relative to BIA control, worker productivity rises, costs decline, and income improves. Even the price received for reservation logs increases” (Krepps 1992).

Recognizing BIA shortcomings, Congress allowed some tribes to take greater control of their resources and tribal programs, starting with the Indian Self Determination Act of 1976 (Public Law 93–638). Under this authority, the Confederated Salish and Kootenai Tribes have taken control of more than a hundred programs on the Flathead Reservation (CSKT 2004). This taste of sovereignty enabled the CSKT to see the benefits of local control. After lobbying Congress for further separation from the BIA, the Flathead Reservation became one of ten reservations to participate in the Self-Governance Demonstration Project initiated in 1988. Under this trial program, tribes were given authority, subject to any statutory requirements, to manage tribal property and assets. The demonstration project was successful and in 1994, Congress made the project permanent for tribes already in the program. In 1995, the CSKT Forestry Department compacted with the federal government to officially take the reins of all forestry decisions on the Flathead Reservation (CSKT 2004).


The Flathead Indian Reservation forest and the nearby Lolo National Forest have much in common. Bordering one another, the reservation and the national forest have similar soils and are subject to the same climatic factors—growing season, rainfall, and temperatures—that influence tree growth. Both forests are comprised of mixed softwoods; Douglas-fir is the primary species, followed by larch and pine. The forests provide a range of products and amenities including not only timber, but grazing, recreational opportunities, wilderness areas, and habitat for fish and wildlife such as grizzly bears and Canada lynx. In addition, both tribal and Forest Service managers must comply with environmental regulations like the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). …

Management on each forest draws on the expertise of a wide range of professionals. Nearly 300 people work for the Lolo National Forest—foresters as well as archeologists, hydrologists, engineers, and wildlife biologists (USDA Forest Service 2008d). The Flathead Reservation Forestry Department has 58 full-time staff and 38 seasonal employees, mostly in forest operations and fire management (CSKT 2000). Other tribal natural resource departments provide assistance in water management, fish and wildlife management, and environmental protection.

A comparable proportion of the total land area on each forest—64 and 59 percent—is managed for timber production (table 1). The forests also have similar volumes of standing timber per acre, potential productivity, and annual average net growth. Operationally, foresters carry out the same duties on each forest when it comes to managing timber. Managers design timber sales, prepare environmental assessments, solicit competitive bids for timber under a comparable auction process, and administer harvests. Like Forest Service managers, tribal managers oversee road construction and maintenance, timber stand improvements (e.g., pre-commercial thinning), and reforestation in harvested or burned areas. On both forests, managers must balance timber production with other forest uses through the preparation of multi-year forest plans.

Along with these common elements there are also differences to consider. First, the Lolo National Forest has more than four times the number of acres in timber production than the reservation (see table 1 on page 6). Thus the Lolo has a much larger resource base from which to generate timber revenue. …


Another difference between the two forests—a crucial one—is that they have different goals when it comes to generating income. The goals of the CSKT’s forest management plan include “strengthening tribal sovereignty and self sufficiency through good forest management, and providing perpetual economic benefits of labor, profit, and products to local communities” (CSKT 2000). The forests of the Flathead Reservation are a source of income that support forest management and other tribal operations. In contrast, the mission of the Forest Service is “to sustain the health, diversity, and productivity of the Nation’s forests and grasslands to meet the needs of present and future generations” (USDA Forest Service 2008e). The Forest Service is not required to generate income from timber sales or other forest products. Instead, national forests are managed to achieve “the combination [of land uses] that will best meet the needs of the American people… and not necessarily the combination of uses that will give the greatest dollar return or greatest unit output.”

Because the tribes depend on the forest for income, they have an incentive to promote the productivity of this resource, while keeping costs low. The Forest Service lacks such an incentive. Most Forest Service timber revenues are sent to the general treasury; national forest management is funded primarily by Congressional appropriations. Without a connection between budgets and revenues, there is little motivation to operate efficiently, or to ensure the continued productivity of the forest.


This difference impacts the bottom line. When comparing timber returns from 1998 to 2005, the tribes’ total timber revenues exceeded total timber sale costs by more than $16 million, while Lolo total timber revenues exceeded total timber sale costs by only $2.5 million. In other words, timber sales on the tribal forests averaged $2.04 in gross annual revenues for every dollar spent, whereas the Lolo averaged $1.11 in gross revenues for every dollar spent.8 (See table 3) This disparity in income was not due to lower harvests on the part of the Forest Service. In fact, the Lolo National Forest produced 57 percent more timber than the Flathead Reservation, but the tribes were still able to generate more income. …


Timber is just one output on each forest, as both are managed for multiple uses. …

In addition, each forest holds wilderness areas where no timber harvesting is allowed. Designated in 1979, the 91,778-acre Mission Mountains Tribal Wilderness area on the Flathead Reservation was the first wilderness area created by tribal authority. It provides important habitat for grizzly bears in the high elevations, which are closed to human use in the late summer to minimize disturbance to bears (CSKT 2005). The Lolo National Forest contains portions of four wilderness areas encompassing 145,734 acres (USDA Forest Service 1986, VI-12). On both forests, wilderness areas include the highest peaks as well as lower-elevation areas that could produce timber if harvesting were not prohibited by wilderness designation.

Both forests are also home to a diverse range of fish and wildlife, including grizzly bear, threatened northern grey wolf, and Canada lynx. The Tribal Wildlife Management Program has a “strong, proactive approach,” and they have had success reestablishing populations of the endangered Peregrine Falcon and Trumpeter Swan, once rare on the reservation (Becker and Lichtenberg 2009). Other projects are underway to re-introduce the northern leopard frog and the Columbian sharp-tailed grouse. The tribes balance timber goals for revenue production with non-timber outputs, such as fish and wildlife habitat.

On the Lolo, that balance has been elusive. Timber revenues are lower than on the tribal forest, and while some non-timber programs appear successful, others have not fared as well. For instance, monitoring reports indicate that the Lolo exceeds its goals for habitat improvement for fish, big game, and threatened and endangered species. But the national forest has fallen behind on silvicultural exams, reforestation, trail construction, noxious weed control, and fuels management (USDA Forest Service 2002a) — activities that are critical components of multiple use forest management.

Some problems stem from a rash of environmental litigation on the Lolo National Forest, which diverts time and resources from on-the-ground management (USDA Forest Service 2002b, 2002c). Between 1998 and 2005, nineteen cases were filed against the Lolo (USDA Forest Service 2007a). In 2007, more than 21 million board feet were held up in appeals and litigation (Backus 2007) — about the equivalent of an average year’s harvest for the forest since 2000 (USDA Forest Service 2008a).

In contrast, tribal forest management is rarely challenged in court, so managers are more able to address environmental concerns in a timely fashion (Skinner 2005–2006). As Jim Peterson, editor of Evergreen Magazine said, “The tribes do a lot of things I wish we were doing on our federal forest lands if we weren’t all knotted up in litigation” (quoted in Hagengruber 2004). Only one timber sale has been appealed on the Flathead Reservation.

In the 1980s, Friends of the Wild Swan brought suit against the Bureau of Indian Affairs. The case was dropped, however, when the court required Friends of the Wild Swan to post a bond to process the appeal. “If they lost the appeal, they would lose the bond” (Jim Durglo, quoted in Skinner 2005–2006).

On the Lolo, litigants are not required to post a bond to process an appeal. After 74,000 acres burned on the national forest in 2000, managers prepared a 35.2 million board foot post-fire salvage timber sale, which was halted when the Lolo lost an appeal in federal court. Timber sale planning on the Lolo after that lawsuit has been more conservative, in an effort to avoid a repeat situation (Devlin 2004). Timber harvest levels on the Lolo have dropped from an average of 45 million board feet per year in the 1990s to 20 million board feet per year since 2001 (USDA Forest Service 2008a).

Decreased timber harvests limit the ability to address ecological problems. For example, many forests in the Northern Rockies, including the Lolo, are overly dense due to past fire suppression practices that excluded the ecological role of fire (Fretwell 1999).

As a result, these forests are at higher risk of catastrophic wildfire and insect infestation. Recent fires and mountain pine beetle outbreaks on the Lolo are evidence of these problems — the Lolo area was the most heavily insect-infested area in Montana from 2002 to 2005 (USDA Forest Service 2002d, 2003, 2004, 2005). …

Without effective mitigation, the Lolo infestation has spread to neighboring tribal lands. The reservation experienced a 46 percent increase in mortality from 1989 to 1999 (Flathead Indian Reservation 1999, and a tribal report noted, “the increase in mortality may be related in part to lack of harvest on surrounding lands, which have induced significant levels of bark beetles on all four sides of the reservation” (Flathead Indian Reservation 1999. Indeed, Forest Service reports from 2001, 2004, and 2007 observed that beetle infestations on the Flathead Reservation were prominent on the borders with the Lolo National Forest (USDA Forest Service 2001b, 2004, 2007b).


The Forest Service may be harvesting far less timber than it once did, but the evidence from this comparison indicates that there is reason to doubt that the agency is running in an economically efficient or environmentally responsible manner. In comparison with the CSKTs, the Lolo National Forest harvested much more timber from 1998 to 2005, yet it made far less money. A primary reason for the Lolo’s weaker economic performance is that Forest Service managers have less incentive or ability to generate income compared to tribal managers.

Since the CSKT rely on timber revenues to support tribal operations, they have a vested interest in the continuing vitality of their natural resources. Tribal forest manager Jim Durglo comments, “Our forest is a vital part of everyday tribal life. Timber production, non-timber forest products, and grazing provide jobs and income for tribal members and enhance the economic life of surrounding communities” (Azure 2005). The tribes stand to benefit from responsible forest stewardship — or bear the burden of mismanagement.

In contrast, on the Lolo, there is little connection between performance and reward. Management decisions are often dictated by politics rather than local conditions. National forests receive funding from Congressional appropriations apparently regardless of timber revenues or ecological concerns. Revenues from forest operations are sent to the general treasury. The disconnect between budget inputs and revenues generated means there is scant incentive to operate efficiently, or to manage the forest for future productivity. Moreover, there is no direct constituency for cost-effective national forest management comparable to the tribal members on the reservation. …

Note: PERC — the Property and Environment Research Center — is the nation’s oldest and largest institute dedicated to improving environmental quality through markets and property rights. Research is at the heart of PERC’s work followed by outreach and education. Formed more than 25 years ago, PERC applies economic thinking to environmental problems. Located in Bozeman Montana, PERC pioneered the approach known as free market environmentalism (FME).

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