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Government
Subsidies
Over a hundred years ago laws were enacted and subsidies granted that have contributed to the clearing of North American forests. Many of these subsidies still exist and continue to encourage the commercial cutting of timber within national forests. Unfortunately, much of this logging occurs in areas located high on mountain ridges which are too dry and cold for reforesting. The unsightly deforested ridges can be seen from miles away. In an effort to prevent further destruction of national forests, environmental organizations such as the Wilderness Society have campaigned for years to stop these subsidies. (Cairncross, 1991).

Timber Cutting Contracts in the Tongass National Forest, Alaska
Below is a description of the timber cutting contracts that the U.S. government made with KPC (the Ketchikan Pulp Company) and APC (the Alaska Pulp Corporation) and some of the consequences.

During the 1950's, the Forest Service signed 50-year contracts with two timber companies. In return for building and operating pulp mills, the companies were guaranteed long-term access to low-cost Tongass timber. The Ketchikan Pulp Company (KPC) built a pulp mill in Ketchikan, and the Alaska Lumber and Pulp Company (later known as Alaska Pulp Corporation or APC) built one in Sitka.

These long-term timber contracts have dominated management of the Tongass - enabling the contract holders to purchase 400 year-old hemlock, spruce, and cedar trees for the price of a cheeseburger and allowing about one-half million acres of prime Tongass timber to be clearcut. The ecological and economic legacy of the long-term contracts is evident: pollution, depleted resources, and ecological harm. Association of Forest Service Employees for Environmental Ethics. 1996. Tongass in transition: Blueprint for a Sustainable Future; the AFSEEE - Sponsored Alternative Plan for the Tongass National Forest in southeast Alaska. 102 pages.

"U.S. Taxpayers Subsidize Tongass Clearcutting and Road Building"
The original fifty-year contracts made it possible for the companies to purchase old-growth trees on the Tongass at bargain-basement prices - $2 (or less) per thousand board feet.

The Tongass Timber Reform Act of 1990 modified the contracts so that KPC and APC had to pay the same rates as other timber purchasers. However, a recent lawsuit by KPC negates this reform. The government must pay back almost all of the money that KPC paid (since 1991) above the rates of the original contracts.

Even when the contract holders were paying higher rates for timber, the Tongass timber program still lost enormous sums of money. A primary reason is that the American public has unwittingly traded Tongass old-growth forests for logging roads. An unusual government accounting system allows timber companies to bill the Forest Service for the costs of building logging roads. This system enables purchasers to offset much or even all of the costs of purchasing public timber.

KPC gets money back for every road it builds on the Tongass - even when the price of the timber is not high enough to cover the costs of the roads. Currently, thousands of miles of roads crisscross the Tongass - about three-quarters of a mile of road for every square mile of forest. Association of Forest Service Employees for Environmental Ethics. 1996. Tongass in transition: Blueprint for a Sustainable Future; the AFSEEE - Sponsored Alternative Plan for the Tongass National Forest in southeast Alaska. 102 pages.

Cost to Taxpayers
Factions of federal agencies appear to have differences of opinions.

Traditionally, the Forest Service's Logging Operation annual financial report has been accepted without challenge. This year, however, its claims of making a $59 million profit during the 1995 fiscal year have been directly attacked.

The president's Council of Economic Advisers admit that the Forest Service collected $616 million in timber receipts, but asserts that the service spent $234 million more than that on timber management and other associated costs.

Subsidizing the extraction of natural resources has been a method used to stimulate the economies and growth of particular areas. But conservationists have long maintained that the Forest Service's subsidies in the timber program have cost the federal taxpayers millions in lost revenues.

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