Changing Roles: WUI Professional Development Program 1

Economies of scale make interface forest man-agement challenging. Many of the traditionaltechniques for vegetative management such asharvesting timber and pesticide application areexpensive and only become reasonable whentaking advantages of economies of scale afford-ed by large, contiguous acreages. The tendencyof industrial forestry, just like industrial agri-culture, is to grow larger, more mechanized,and more highly capitalized in order to takeadvantage of economies of scale. Unfortunatelythese practices do not work well in the rapidlyfragmenting interface forest where most forestlandowners live and own land.

Fragmented property ownership and diversemanagement objectives present additionalchallenges for vegetation management in theinterface. Many ecological systems cross prop-erty boundaries and require some coordinatedmanagement effort. Likewise, desired forestproducts such as water, wildlife, wildfire risk-reduction, and most amenities require manymore acres and resource conditions than aretypically available on small interface foresttracts. Thus, to achieve desired forest qualities,some form of cross-boundary management andcooperation may be necessary.

One means to motivate coordinated manage-ment among multiple owners or managers is toimplement the top-down approach of govern-ment-enforced regulation. An alternativemethod is to implement a bottom-up, voluntaryapproach of cooperation. In a review of strate-gies to implement ecosystem management inthe U.S., Sample (1994) concluded that volun-

tary, cooperative strategies were more likely tosucceed in mixed ownership, especially in theSouth, where property rights concerns are high.

Multiple property ownerships can make forest managementmore challenging, unless owners work together.

Expecting landowners to willingly and activelyengage in cooperative management practicesmay contradict the old adage that “good fencesmake good neighbors.” This might mean thereare potential obstacles to voluntary strategiesfor cooperative management on private lands.Or perhaps the old adage means that neighborsprefer clearly defined property boundaries andhence clearly defined responsibilities; if so,cooperation among neighbors need not erodethese boundaries nor obscure these responsi-bilities. Several studies of landowners suggestthat some forms of cooperation are acceptable(Bliss et al. 1997; Hull, Johnson, and Nespeca2000; Williams and Ellefson 1997). These andother studies show that cross-boundary coop-eration can take many forms, including

• informally sharing of information, equip-ment, labor;

Fact Sheet 2.10Forest Cooperatives

Written by Sarah F. Ashton, R. Bruce Hull, and Rien M. Visser, Virginia Polytechnic Institute and State University

Photoby:Larry

Korhnak

2 Managing Interface Forests

Fact Sheet 2.10

• coordinating of management acrossboundaries (e.g., prescribed fire, timberharvest, hiking trails);

• protecting privacy buffers and creatingscenic vistas;

• creating wildlife corridors for migrationand cover;

• meeting wildlife habitat needs (water onone property, cover on another, forage onanother);

• sharing access roads; and

• developing formal business arrangementsthat coordinate management, sales, andprofits.

Temptation, Time, and Trust

There are several factors that determinewhether or not a landowner is interested orable to participate in a cooperative. Thoseinterested in organizing a cooperative shouldemphasize the incentives that coop member-ship would provide. The informal coordinationof management activities and managementgoals requires temptation, time, and trust.

Forest landowners must be tempted to partici-pate. That is, they must be made aware that theycan realize more through coordination withneighbors than they can alone. Landownershighly value scenery, privacy, wildlife, andrelated forest products. Many of these qualitiescan be enhanced through cooperation. In addi-tion, management expenses can be reduced bycoordinating prescribed fire, mechanical oper-ations, or herbicide treatment across severalproperties.

Forest landowners must be assured that thetime it takes them to make and monitor thesearrangements is minimal, or at least worth thebenefits that result. Lengthy, drawn-out meet-ings showing little progress quickly loselandowner interest and participation.

Each forest landowner must have trust thatoperations will be conducted in a fashion thatrespects property rights, privacy, and goals.They must trust their neighbors, the profes-sional offering advice, and the operator work-ing in their forests. Demonstration projects,community leaders, and agency support mayhelp create trust in some but not all instances.

Natural resource professionals are critical to allthree conditions of coordinated land manage-ment: temptation, time, and trust. They can seethe bigger picture and help make landownersaware of the benefits of forming cooperatives.They can help organize a time-efficientprocess. And, they can establish credibility,networks, and demonstration projects thatbuild trust.

Types of Forest Cooperatives

Landowner associations

Many conservation developments have largecommon properties. In other areas, landownersare required to donate land and/or place deedrestrictions on a certain percentage of theirland. For example, someone may purchase 50acres and be allowed to build on 20 acres andkeep the other 30 acres undeveloped. Someconservation developments cluster the sitemodifications, keeping larger contiguous landsto be managed. These lands can provide ameni-ties and ecological and financial benefits to alllandowners.

“Virtual” or regional cooperatives

The traditional cooperative is composed oflandowners living adjacent or nearly adjacent toone another. However, a “virtual” cooperativecan have members living within a region thatcooperate in marketing, perhaps certification,and perhaps also land management. Despite thedistance between properties, this type of coop-erative makes it possible to create a detailedinventory of timber and nontimber products on

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Fact Sheet 2.10

member properties around a large region.Buyers looking for supplies (e.g., specialtyspecies, burls, pine straw) can contact thecooperative to see if the resource is owned byone or more landowners and, if so, place a bidon it. These cooperatives will rely heavily onnew advances in detailed inventories, informa-tion processing, and forest products marketingand processing.

Formal forest cooperatives

Formal forest cooperatives require consider-able resources to establish and are likely to suc-ceed only when special social and environmen-tal conditions are met. Nonetheless, when theseconditions exist, cooperative arrangementsprovide a powerful tool for managing interfaceforests. Successful cooperatives have a longtrack record in Europe, especially Scandinavia.They are not new to the United States but haveonly recently become a tool for forest manage-ment (Nadeau et al. 2002).

Forest cooperatives may enable proximatelandowners to join together to become incorpo-rated into a business. Each cooperative isunique. Each reflects the interests of its mem-bers, the conditions of its forest resource, themarket and processing opportunities for forestproducts, and the concerns and resources of itssurrounding community.

There are many ways for forest landowners tobuy into a cooperative. One way is for individu-als with common goals and interests to join bypurchasing a one-time membership. For exam-ple, members of Wisconsin’s Sustainable WoodsCooperative invest $100 for their stock plus $2per acre of forest. In purchasing this member-ship, the individual agrees to bring some por-tion of his or her forestland resources to a col-lective pool. Members may also contributeother resources such as knowledge, equipment,and marketing opportunities, but in almost allcases, forestland is required to become an

invested member of a forest landowner cooper-ative. Members share benefits and costs in pro-portion to their invested acreage.

Successful cooperatives have several key com-ponents. They usually begin with a steeringcommittee dedicated to developing a clear andconcise vision for the organization. The steer-ing committee provides a source of informationand guidance in the initial developmentalstages. Steering committees can search forinterested landowners using a mix of informa-tion sessions and surveys. A lack of initialinterest or resources will almost certainly hin-der a cooperative’s progress. At some point suc-cessful cooperatives will need to decidewhether or not to obtain legal status. Legal sta-tus allows a cooperative to formally and legallyconduct business as an entity. States differ inwhat they require for corporations to becomelegal business entities, but typically some for-mal contract of incorporation must be devel-oped, approved, and filed with state authoritiesbefore the cooperative engages in businesstransactions. In this way, forest cooperativesare little different from business corporations.Obtaining legal status may not be necessary if acooperative is interested only in providinginformal educational or volunteer serviceopportunities.

Cooperatives must also map out a businessplan. These plans typically include an executivesummary, a brief description of the organiza-tion and organizational structure, an analysis ofresources and finances, a market analysis, adiscussion of research and development, aswell as a marketing and sales plan. As the ideafor the cooperative firms up, potential mem-bers will need to be identified and signed up,finances will have to be secured, and a transferof power from the steering committee to aboard of directors will have to take place. Aboard of directors is different from a steeringcommittee. It is a formally elected body withdecision-making authority. It has the legalresponsibility of protecting the cooperative’s

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assets, representing the member’s interests,planning strategically, communicating with themembership, and managing personnel.

Successful cooperatives can have diverse mem-berships. Many types of landowners can join:landowners with 20 acres of land as well aslandowners with many hundreds of acres,landowners with little resource managementexperience as well as landowners with naturalresource degrees, landowners who are lookingfor alternatives to traditional methods of forestmanagement as well as landowners rooted intraditional management, and finally but cer-tainly not limited to, landowners with a lot oftime to invest as well as landowners with littletime. Most cooperatives allow landowners theoption of cashing out their investments at anytime. Members may vary in their contributions,but importantly, they all need to agree on thegeneral mission and vision of the particularorganization they choose to join. The prevailinggoal of most forest cooperatives in the UnitedStates is the promotion and practice of prof-itable and sustainable forest management.

Benefits of Forest Cooperatives

Forest owner cooperatives provide a wide rangeof benefits and services to individual members,some of which are outlined here.

• Trusted knowledge. Members shareknowledge and experience. Some mem-bers may be more knowledgeable thanothers. Cooperatives provide a credibleoption for landowners who want to man-age their forested land but lack familiaritywith, access to, or trust in the professionalforestry community.

• Increased property access. Right-of-ways are constructed (or already exist)through neighboring property allowing forbetter coordinated timber harvests andother management activities.

• Coordinated forest health. Managementactivities promoting forest health (e.g.prescribed fire, stand thinning, herbicideuse, insect control) are carried out amongproperties in the cooperative.

• Shared work activities. Members haveaccess to more reasonably priced equip-ment, whether through purchase or rental.With a variety of individual interests,members also have the flexibility of focus-ing their time and energy on particular co-op activities that interest them.

• Profit. Cooperatives make timber manage-ment feasible because aggregation of tim-ber resources increases economies ofscale for equipment and opens access tomarkets (Nadeau et al. 2002; Kittredge2003; Barten et al. 2001). While servicesare provided to all members of the coop-erative, the financial benefits gained areprimarily based on the amount of businesseach individual member chooses to dowith the cooperative.

• Value added. Some cooperatives providethe coordination of processing and mar-keting for wood and nontimber forestproducts (NTFP), value-added processing,and access to a growing specialized marketfor certified timber products (Groot2002).

• Community development. Cooperatives,by their very nature, encourage team work,fellowship, and trust among members andthe surrounding community. For example,members of the Cook County SustainableForestry Cooperative in Minnesota holdfun-filled, educational field days targetedto members as well as community resi-dents.

• Political clout. Numbers give cooperativespolitical visibility because they translate tovotes and donations. A representative of acooperative may get more access to politi-cal leaders and agency staffers.

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Fact Sheet 2.10

Custom wood flooring is a value added service that cooperativescan provide.

Forest owner cooperatives also provide a widerange of benefits and services to local commu-nities and their surrounding regions. Wood ornontimber forest products production can godirectly into the local economy in the form ofharvesting, processing, and marketing. As anexample, the first significant timber sale byVermont Family Forests, a cooperative formedin 1995, went to a local college for the construc-tion of a science building (Barten et al. 2001).Regions benefit ecologically through watershedprotection, air quality, and biodiversity andeconomically through a sustainable wood andnontimber forest product supply (Nadeau et al.2002; Kittredge 2003). Additionally, coopera-tives that actively manage their forests may beable to reduce fuels and protect communitiesfrom wildfire.

Costs and Reservations of ForestCooperatives

There are numerous challenges to the feasibilityand viability of forest cooperatives. Some of themore important issues concern the presence orabsence of an effective governance, member-ship and retention, start-up costs (e.g., certifi-cation costs and equipment), and marketing.

• Governance. At the very least, a forestcooperative needs a committed, knowl-edgeable board, capable of being clear andsuccinct about the vision, mission, anddirection of the organization in order torecruit and maintain members. Lack of

leadership and organization will raise ared flag for prospective members, dis-courage current members, or lead to thedissolution of an existing cooperative.

• Property rights. Cooperatives require thatlandowners allow others some amount ofaccess and influence over their land.Cooperative members might be requiredto forego private business opportunitiesregarding their invested forestland for thegood of the cooperative. Not all landown-ers are comfortable with these constraints.

• Start-up cost.This is perhaps one of themost important issues. Like any smallbusiness, it can be very expensive to start aforest cooperative. For example, if anorganization markets itself as certifiedsustainable, not only does it have to payfor the certification, but it must first pay aforester specializing in that particular cer-tification to write management plans foreach landowner in the cooperative.Equipment and expertise are also impor-tant. Furthermore, if the organizationdecides to engage in the value-addedprocess as a way of increasing profit, itincurs more costs in order to purchaseadditional equipment (e.g., kilns, planers,packaging, etc.).

• Marketing. Forest cooperatives must mar-ket their products and, perhaps even moreimportant, the process used to create theirproducts. Currently, certified sustainablewood is found in large hardware chains.Co-ops must find a way to sell the idea of“local,” certified sustainable wood even ifit costs a little more. If they cannot selltheir services and products, they are likelyto fail.

• Lack of time, trust, or temptation. Somecooperatives fail due to lack of landownerinterest. Management or commercialactivities become too time-consuming ordistrust may arise among the group,

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Fact Sheet 2.10

making landowners less enthusiasticabout being involved. There must beincentive for people to remain involved.

Funding

Although the 2002 Farm Bill acknowledged theimportance of cooperative and communityforestry, special funding to support forest coop-eratives failed to pass. Many cooperatives neverget off the ground because they cannot find ordo not take an adequate amount of time to findthe funding to support their early endeavors(Foster, 2002). There are small grants availablethrough state and federal government and pri-vate foundations; however, larger investmentsusually come after an organization has operatedsuccessfully for a period of time.

Examples of Forest Cooperatives

The Blue Ridge Forest LandownerCooperative

Conceptualized by Harry Groot, owner of a low-impact harvesting and millwork business, theBlue Ridge Forest Landowner Cooperative is inits very early stages of development. The coop-erative is actively pursuing Forest StewardshipCouncil (FSC) certification, working on a busi-ness plan focused primarily on value addition,and becoming legally incorporated. Thus far,funding has come from small grants (e.g.Southern States Cooperative, Inc., AppalachianForest Resource Center, etc.) and private dona-tions. Upon incorporation, the cooperativehopes to have roughly 36 members collectivelyholding between 8,000 and 10,000 acres. Formore information, contact: Next GenerationWoods, Inc., 540-639-3077 or Co-op@nextgenwoods.com.

Members of the Blue Ridge Forest Cooperative discuss coopera-tive management options.

The Forest Bank

A program initiated in 1995 by The NatureConservancy, the Forest Bank promotes eco-nomic productivity while ensuring the protec-tion of biodiversity and ecosystem health onprivate forestland. Landowners participating inthe program agree to waive development rightson some, if not all, of their forestland, and inreturn receive an annual dividend based ontheir participation. The collection of land isthen managed by the bank. This program, stillin its early stages, has a prototypical example insouthwestern Virginia. For more information,contact: The Forest Bank, 339 East Ave., Suite300, Rochester, NY 14604.

National Demonstration Program inCommunity Based Forestry

Initiated by the Ford Foundation with supportfrom the Community Strategies Group of theAspen Institute and others, this program pro-vides technical assistance, support, education,and market opportunities to minority privateforest landowners. Demonstration communi-ties exist in South Carolina, administeredthrough The Penn Center, and Mississippi andAlabama, administered through the MandingoLegacy Forestry Program.

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arryG

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Fact Sheet 2.10

Suggested Readings and Contacts

National Woodlands Association (NWA) - Somestate’s chapters, such as New York’s, havehelped organize co-ops. NWA recognizes 20 to30 landowners that are proximate to one anoth-er. NWA may recommend they get a similarforester or forestry advice so that they can get abetter deal on harvested timber. A knowledge-able and experienced negotiator can usually geta good deal. www.nationalforestry.net/nwoa/nwoa.asp

Community Forestry Resource Center (CFRC) -Developed by the Institute of Agriculture andTrade Policy, the CFRC is a program that worksto assist in the development and support of for-est landowner cooperation and FSC certifiedproducts and markets. www.forestrycenter.org

Cooperative Development Services (CDS) - Anorganization that has provided valuable guid-ance for most forest landowner cooperatives inthe United States, whether directly with con-sulting or indirectly through a landowner start-up guide called Balancing Ecology and Economics.The corporation is a private, nonprofit groupspecializing in professional business develop-ment and planning. www.cdsus.coop

Rural Business/Cooperative DevelopmentService–A service of the United StatesDepartment of Agriculture (USDA), the RuralBusiness/Cooperative Development Serviceprovides support and guidance for the develop-ment of cooperatives. The USDA has specialistsin most states distributing information andproviding technical assistance and access toresearch and funding opportunities for forestlandowner cooperation.www.rurdev.usda.gov/rbs

References

Barten, P. K.; D. Damery; P. Catanzaro; J. Fish;S. Campbell; A. Fabos; and L. Fish. 2001.“Massachusetts Family Forests Birth of aLandowner Cooperative.” Journal of Forestry 99(3): 23-30.

Bliss, J. C.; S. K. Nepal; R. T. Brooks Jr.; and M.D. Larsen. 1997. “In the Mainstream:Environmental Attitudes of Mid-South NIPFOwners.” Southern Journal of Applied Forestry21(1): 37-42.

Foster, B. 2002. “Forestry Co-Ops: LandownersJoin Together to Improve the Land.” Tree Farmer(September/October 2002): 6-11

Groot, H. H. 2002. “Forest LandownerCooperatives: Do They Have a Future inVirginia?” Virginia Forest Landowner Update16(1).

Hull, R. B.; J. E. Johnson; and M. Nespeca.2000. “Forest Landowner Attitudes TowardCross-Boundary Management.” In ForestFragmentation 2000 Conference. Ed. L. A.DeCoster, 145-153. Alexandria VA: SampsonGroup, Inc.

Kittredge, D. B. 2003. “Private ForestlandOwners in Sweden Large-Scale Cooperation inAction.” Journal of Forestry 101(3): 41-46.

Nadeau, E. G.; I. Nadeau; M. E. Myers; J. Padgham; P. Guillery; and K. Fernholz. 2002.Balancing Ecology and Economics: A Start-UpGuide for Forest Owner Cooperation, 2nd Edition.Madison WI: Cooperative DevelopmentServices.

Sample, V. A. 1994. “Building Partnerships forEcosystem Management on Mixed OwnershipLandscapes.” Journal of Forestry 92(8):41-44.

Williams, E. M. and P. V. Ellerfson. 1997.“Going into Partnership to Manage aLandscape.” Journal of Forestry 95(5): 29-33.