After spending most of the last three years in the doldrums, there are meaningful signs of growth in the forestry industry, both nationwide and in Georgia.  Continued economic recovery and increasing interest in biomass as a renewable energy source have the potential to drive meaningful forestry growth as long as state and federal governments institute supportive policies and tax structures.

“In forestry as in all agriculture, government actions can make or break the industry.  Knowing how to get involved and influence local, state and federal policy is critical to our industry,” said Jody Strickland, project manager for Timberland Acquisition and Divestiture at Weyerhaeuser.

Current state of forestry in Georgia
It’s hard to overestimate the importance of Georgia’s forest resources.  According to Strickland, forestry contributes $20 billion to the state economy, more than any other agricultural commodity.  Georgia has approximately 24 million acres of forest, which is more than any other state, and 93 percent of that is privately owned.  The forest industry in Georgia supports over 150,000 jobs.

With the severe downturn in the housing industry, and the economy as a whole, the past few years have been difficult for Georgia’s forest industry. Mills have closed, loggers have gone out of business and many foresters are out of work.

“Weyerhaeuser too has had to downsize during lean times.  But, we are in more of a growth mode now than we have been in several years,” Strickland said.

Driving the growth pro spects are feelings that the housing industry has hit bottom.  While conditions may improve only slowly, there is some confidence that the housing industry will not continue to decline.  In addition, growing interest in renewable energy sources including biomass is driving optimism in the forestry industry.  Biomass is commonly plant matter such as wood and waste that is used to produce power, heat or advanced biofuels such as biodiesel and ethanol.

Biomass offers opportunities for forest landowners, energy companies and companies like Weyerhaeuser.  Weyerhaeuser uses biomass to fuel its mills, sells excess power to utilities and is looking at ways to supply biomass to others.

“Biomass holds a lot of promise as a new market for the forest industry, but we need federal and state policies and tax structures to support its development,” Strickland explained.  “The climate/energy legislation pending in Congress is key to the future success and we should do what we can to ensure the forest community benefits as growers and manufacturers of renewable products.”

The need for smart public policy
According to Strickland, several recent and upcoming public policy actions have the potential to either encourage or inhibit growth in the forestry industry.  Examples include:

· Defining biomass in the 2012 farm bill.  A broad definition that includes most forest and agricultural land will encourage greater supply for development of a strong biomass market.

· Countering recent U.S. Environmental Protection Agency actions to treat carbon emissions from biomass the same as emissions from fossil fuels.  According to Strickland, “the EPA voted on this rule in May and it has the potential to place a significant burden on biomass users and producers, which would lead to a detrimental effect on rural jobs.  We’re encouraging people to contact their U.S. representative and voice the opinion that as a renewable energy source, biomass is essentially carbon-neutral and should not be treated the same as carbon emissions from fossil fuels.”

· Creating tax structures with incentives for landowners to keep their acreage in forest.  Current Use Value Assessment and the Forest Land Protection Act policies at the state level are positive developments that protect forestry acreage from commercial development.

However the federal estate tax now holds a significant disincentive to maintain forestry acreage.  With the loss of the step-up rule, the tax basis for inherited land now reverts to the price paid when the land was purchased. Combine this with the fact that unless legislative action is taken, the estate tax is scheduled to permanently return at a rate as high as 55 percent with only a $1 million exemption in 2011, and there is the potential for a very large problem.  “We’re concerned that many families will be forced to sell their land to pay the estate taxes, especially in Georgia where land is mostly privately owned,” Strickland said.

Learning to get involved in local, state and federal government
“Forestry has new and developing markets with significant growth potential, but we need positive policy actions to realize that potential,” Strickland said.

According to Strickland, the Georgia Agri-Leaders Forum is an excellent way to learn how to get involved in government. The Forum is a 501(c)(3) non-profit organization that conducts leadership-training programs for members of the agriculture, agribusiness, forestry and rural communities in Georgia.  A graduate and current board member of the Forum, Strickland believes graduates develop leadership capabilities as well as life skills, and attain a level of success that can be directly attributed to what they learn in class.

“I have made lifelong friends and invaluable contacts through the Forum,” Strickland said.  “No matter what issue I’m facing, I can look through the directory and find someone with experience or knowledge that I can call for advice.”

For more information on the Georgia Agri-Leaders Forum, visit www.galff.com.  Information on Weyerhaeuser is available at www.weyerhaueser.com.

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