Forestry 101 for New Investors, Part 3.

“And there is more complexity to come in Part 3, when we finally get down to plantations versus natural forests as investments. Genetics, regeneration, insects, disease and fire will all appear in our forest investment future.” That is where we left it at the end of part 2. So brace yourself for complexity and uncertainty. Forests contain plenty of both. We will talk about the genetic makeup of trees, and the classic threats to forests: insects, disease and fire separately, but they all interact, they all leave a historical signature in any group of trees, and they are all complicated subjects in themselves. Indeed, the central notion necessary to invest in forests is that they have more components per unit area than a space ship, and the pieces are all connected.

Often when I talk with people who are new to forestry and the workings of forest, I find their main concern is potential destruction of the forest by fire, insects and disease. These are very real threats. In dry areas, or seasons, fires started by lightning or people are constant threats to a forest’s existence. Most of the time, plantations of trees are established so that, among other things, they are easier to protect from fire than natural forests. This is because they include roads, fire breaks and have firefighting capability nearby. These same attributes mean insect and disease outbreaks are easier to combat. But where plantations are of non-native species they may be at special risk from local diseases and insects. As the biological contents of the world are increasingly shuffled around by human activity, the threat of new bugs and diseases to existing forests, planted or natural, increases. All that having been said, losses of planted forests to these agents is relatively small, way less than 1 percent per year on a world scale. Extensive, remote natural forests in remote areas are another matter. In the western United States and Canada, losses to fire and the others have been large and increasing for the last few years. Some blame this partly on human-caused climate change that makes some areas warmer and drier in the summer.

So what is an investor to do? First, make sure that the people who manage the plantations and forests you invest in have thought long and hard about these influences, and that they take proactive measures to prevent them from destroying the investment. That having been done, look for relatively wet places (for example the Pacific Northwest, of North America, west of the mountains) and species with good track records of insect and disease resistance (for example, Douglas-fir and associated species).

The genetic make-up of individual trees and forests determines how they respond to their environment, including fire, insects and disease. Over the last 50 years or so a lot of time and effort has been put into “tree breeding”, attempts to produce genetically better trees. These improved trees grow faster, and may be more resistant to insects and disease. In North America, the chief species worked on in this way have been Southern pines, Douglas-fir, and poplars, but many more species have had some level of attention. The main thing here is that these improved trees are grown from seed or vegetative tissue of their parents in nurseries and then planted in the field, so that they only appear in plantations of one kind or another. So if you want to benefit as an investor from this vast effort, you will need to invest in plantations. However, the future of all forests is determined to some considerable degree by their genetic makeup. Thus, if in natural forests only the best trees are cut and poorest left, the genetic makeup of the forest can be impaired. So how forests are managed can be a form of genetic improvement, or at least “genetic maintenance”. Ask the managers of your investment forest whether they practice “high grading”, particularly in the mixed forests of the Eastern united states and watch their reaction.

On September 15, 2007 the National Commission for Science and Sustainable Forestry (NCSSF) released "Conserving Biodiversity Through Sustainable Forestry: A Guide to Applying NCSSF Research" to highlight the practical significance for practitioners and managers of the research the organization has sponsored on biodiversity and sustainable forestry. The fully illustrated Guidebook offers practical tools to apply science in the field and is accessible for anyone interested in forests and the practices associated with forest management. The goal of this publication is to help improve forest management by making forestry and biodiversity science easier to understand and illustrating on-the-ground applications. This is about the most accessible source for a fuller story that you will find. Go to www.ncssf.org to get a copy.