What does stewardship What does stewardship mean?mean?

Especially in the context of BC Especially in the context of BC forestry?forestry?

Ralph WinterRalph Winter

ObjectivesObjectives

To raise the question…To raise the question… what does stewardship meanwhat does stewardship mean who gets to make the decisions who gets to make the decisions what values do we want to steward what values do we want to steward where do we express those values where do we express those values

What does stewardship What does stewardship meanmean

using and caring for the forest and passing it using and caring for the forest and passing it on to our children’s children undiminished in on to our children’s children undiminished in value(s)value(s)

does it mean any quantity or value of trees?does it mean any quantity or value of trees? higher or lower revenues from future rentershigher or lower revenues from future renters does it mean more or less options does it mean more or less options to achieve stewardship...do we just use to achieve stewardship...do we just use

stocking standards or does it include other stocking standards or does it include other standards?standards?

So your wife has inherited some So your wife has inherited some property with decadent old homes property with decadent old homes

and wants replace it with something and wants replace it with something newernewer

Or wants to sell and move the Or wants to sell and move the existing home, and build something existing home, and build something

newnew

Who gets to say what the new Who gets to say what the new house looks like?house looks like?

Does the new builder - Does the new builder - Basic Nothereforlong Basic Nothereforlong CompanyCompany

Does Does Bill InitfortheoverheadBill Initfortheoverhead and and Faithful Renovations Bank of CubaFaithful Renovations Bank of Cuba

or…..or…..

Does your wife get to say what Does your wife get to say what it should look like?it should look like?

Do you get to guide the development of the Do you get to guide the development of the new home new home

do you get to determine the specs or plans for do you get to determine the specs or plans for the the whole housewhole house

Does the accountant or bank Does the accountant or bank provideprovide

the right amount of money the right amount of money at the right time at the right time to fund the right contractors to fund the right contractors to work on from the right planto work on from the right plan to produce the desired home orto produce the desired home or to produce the desired renovations?to produce the desired renovations?

What happens if we start and the money What happens if we start and the money goes away?goes away?

This is what the This is what the Basic Basic NothereforlongNothereforlong Company will Company will

produce for youproduce for you

15 years later... 15 years later... BillBill Initfortheoverhead Initfortheoverhead approaches the approaches the Faithful Renovations Bank Faithful Renovations Bank

of Cubaof Cuba to make improvements to your to make improvements to your homehome

Do you think your wife would be Do you think your wife would be happy...happy...

...If this is what she really ...If this is what she really wantedwanted

Do you think she would be interested in Do you think she would be interested in having a say in the layout/color scheme having a say in the layout/color scheme

& & when & if we finish the 1st floorwhen & if we finish the 1st floor

To get what she wants ---you need To get what she wants ---you need a plana plan and and design standardsdesign standards for the for the whole housewhole house……

and not just plans for the 3 car garageand not just plans for the 3 car garage

How do we get a plan & How do we get a plan & standards created for forest standards created for forest

mgmt units in BC?mgmt units in BC?

We have taken a stab at it with the silviculture We have taken a stab at it with the silviculture strategies and the RMP processstrategies and the RMP process

have we got the right elements and have we got the right elements and standards?standards?

are we too vague…does anything go?are we too vague…does anything go? do we need to do more…as we move to one do we need to do more…as we move to one

plan approval or as licensees take on a greater plan approval or as licensees take on a greater rolerole

General PrinciplesGeneral Principles

The Silviculture Strategy - is consistent with The Silviculture Strategy - is consistent with the forest stewardship principles outlined in the forest stewardship principles outlined in key legislation (Forest Practices Code of British key legislation (Forest Practices Code of British Columbia Act, Ministry of Forests Act, etc). Columbia Act, Ministry of Forests Act, etc).

provide a balance of short-and long- term provide a balance of short-and long- term benefits.benefits.

provide a balance of social, economic and provide a balance of social, economic and environmental benefits.environmental benefits.

General PrinciplesGeneral Principles

provide for current & future financial interest provide for current & future financial interest of the crown.of the crown.

enhance forest health & the resistance of the enhance forest health & the resistance of the forest resource to damage by fire, pests, etc.forest resource to damage by fire, pests, etc.

activities should improve the productivity of activities should improve the productivity of the forest resources.the forest resources.

improve forest health, stand value, wildlife improve forest health, stand value, wildlife habitat, wood flow, and/or employment habitat, wood flow, and/or employment opportunities within provincial forestsopportunities within provincial forests

Provincial GuidelinesProvincial Guidelines

present a silviculture program consistent with present a silviculture program consistent with guidelines established in various policy guidelines established in various policy documents documents

protect the financial interest of crown byprotect the financial interest of crown by – creating a future timber resource of timber creating a future timber resource of timber

high value and low operating cost; high value and low operating cost; – ensuring that treatments are effective and ensuring that treatments are effective and

costs reasonable,costs reasonable,– ensuring that past investments in ensuring that past investments in

treatments are not lost; etctreatments are not lost; etc..

Provincial GuidelinesProvincial Guidelines

consistent with the de-facto higher-level plans, consistent with the de-facto higher-level plans, and existing operating agreements between and existing operating agreements between district and licensee.district and licensee.

enhance future harvesting opportunities; the enhance future harvesting opportunities; the flexibility of future uses; etc.flexibility of future uses; etc.

2.1 High Priority2.1 High Priority

Activities that contribute to maintaining current Activities that contribute to maintaining current harvest levels and to minimizing the anticipated harvest levels and to minimizing the anticipated interim shortfall in timber supply.interim shortfall in timber supply.

Protecting second-growth forests from insect Protecting second-growth forests from insect epidemics and disease.epidemics and disease.

Activities that positively contribute to a continuous Activities that positively contribute to a continuous supply of habitat for red-listed and blue-listed supply of habitat for red-listed and blue-listed species and regionally significant wildlife.species and regionally significant wildlife.

Complete required treatments to achieve obligations Complete required treatments to achieve obligations on backlog areas under silviculture prescriptions on backlog areas under silviculture prescriptions where the commencement date has been initiated.where the commencement date has been initiated.

2.1 High Priority2.1 High Priority

Conduct appropriate surveys or brushing Conduct appropriate surveys or brushing treatments to protect existing investments by treatments to protect existing investments by ensuring impeded areas remain ensuring impeded areas remain Satisfactorily Restocked Satisfactorily Restocked (SR) and achieve (SR) and achieve desired objectives and obligations.desired objectives and obligations.

On backlog areas - January 1, 1982 to On backlog areas - January 1, 1982 to September 30, 1987, conduct assessments September 30, 1987, conduct assessments and field surveys to establish baseline and field surveys to establish baseline information to determine status and rank, if information to determine status and rank, if appropriate, for developing bSPsappropriate, for developing bSPs

2.1 High Priority2.1 High Priority

Complete all site preparation & planting on good Complete all site preparation & planting on good & medium sites that are below minimum stocking & medium sites that are below minimum stocking

For backlog areas - pre - January 1, 1982, identify For backlog areas - pre - January 1, 1982, identify good & medium sites first, identify poor & low good & medium sites first, identify poor & low sites, and confirm that indicated site productivity sites, and confirm that indicated site productivity is correct.is correct.

Conduct assessments & surveys to establish Conduct assessments & surveys to establish baseline information to determine where to baseline information to determine where to develop bSPsdevelop bSPs

Complete site preparation & planting on good & Complete site preparation & planting on good & medium sitesmedium sites

2.2 Medium Priority2.2 Medium Priority

Stand tending to increase the merchantable Stand tending to increase the merchantable volume and/or value of long term timber volume and/or value of long term timber supply.supply.

Stand tending and pruning to enhance the Stand tending and pruning to enhance the seral stage distribution and structure of the seral stage distribution and structure of the forest.forest.

Forest health enhancement activities where Forest health enhancement activities where these offer greater returns on investment than these offer greater returns on investment than other incremental silviculture activities.other incremental silviculture activities.

2.3 Low Priority2.3 Low Priority

where the security of investment is where the security of investment is questionable because of land alienation, pests, questionable because of land alienation, pests, etc. etc.

high pest hazard areas unless a prescription high pest hazard areas unless a prescription shows that the incidence is acceptable based shows that the incidence is acceptable based on the results of a formal pest incidence on the results of a formal pest incidence survey (is there one?)survey (is there one?)

2.4 Other issues2.4 Other issues

Good sites have the highest priority for Good sites have the highest priority for pruningpruning

Medium sites have the highest priority for Medium sites have the highest priority for fertilizationfertilization

2.5 What future values2.5 What future values

what kind of property value do we want to leave what kind of property value do we want to leave for the grandchildrenfor the grandchildren– high or low (Oak Bay or Langford, Setchfield or Dunford)high or low (Oak Bay or Langford, Setchfield or Dunford)

What kind of growth rates in volume do we want What kind of growth rates in volume do we want to setto set– 1m3/ha/yr1m3/ha/yr– 4m3/ha/yr4m3/ha/yr

What kind of target revenue do we want the What kind of target revenue do we want the grandchildren to receive from future tenantsgrandchildren to receive from future tenants– 50 pennies/m350 pennies/m3– 30 dollars/m330 dollars/m3

Volume versus Value: Do we Volume versus Value: Do we take a loss in volume in take a loss in volume in

exchange for valueexchange for value

400,000

450,000

500,000

550,000

600,000

650,000

700,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Decades in Planning Horizon

Vo

lum

e (m

3/ye

ar)

Preferred Scenario (10)

Volume Strategy (8)

Do we do some incremental Do we do some incremental investments or not?investments or not?

0.00

0.50

1.00

1.50

2.00

2.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Decades in Planning Horizon

Cu

bic

Met

ers

per

Tre

e

SS Base Case

0.5 mill budget

What kind of value profile do we What kind of value profile do we want over time?want over time?

Product Grades - Preferred Option

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4 6 8 10 12 14 16 18 20

Decade

Perc

ent o

f Man

aged

Har

vest

Y Grade

X Grade

U Grade

J Grade

I Grade

H Grade

C,D,F Grade

What kind proportion of What kind proportion of premium logs do we want?premium logs do we want?

0%

20%

40%

60%

80%

100%

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Decade

Per

cent

of

Man

aged

Sta

nd V

olum

es

Large Logs (>50 cm)

Medium Logs (>30 cm and <50 cm)

Small Logs (<30 cm)

2.4 Other issues2.4 Other issues

What kind of diversified portfolio of species do What kind of diversified portfolio of species do we want to leave behindwe want to leave behind– all hemlock valued at $70/m3all hemlock valued at $70/m3– more cedar valued at $200/m3more cedar valued at $200/m3– more fir valued at $130/m3more fir valued at $130/m3

What kind of structures will What kind of structures will maximize valuemaximize value over short, mid and long term.over short, mid and long term.– If you just look at volume…hemlock will do just greatIf you just look at volume…hemlock will do just great

2.6 At what cost?2.6 At what cost?

What is the limit we want to spend to steward What is the limit we want to spend to steward the propertythe property– backlog cost capsbacklog cost caps– incremental cost capsincremental cost caps

How much do you want to spend How much do you want to spend on your grandchildren?on your grandchildren?

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Decades in Planning Horizon

To

tal M

anag

ed S

tan

d V

alu

e ($

/Yea

r)

9a $0 million/year budget

9b $0.5 million/year budget

9c $1.0 million/year budget

9d $2.5 million/year budget

How much do we discount the How much do we discount the future and live for today?future and live for today?

Should you invest in silviculture for the futureShould you invest in silviculture for the future It depends on the discount rate that we useIt depends on the discount rate that we use

– at 4% discount rates…don’t much in most of BCat 4% discount rates…don’t much in most of BC– at 2% significant areas treatedat 2% significant areas treated– at 1% most areas can be treatedat 1% most areas can be treated

This is a critical issue that we must work onThis is a critical issue that we must work on

Is your investment really worth Is your investment really worth it at 4% discount rate?it at 4% discount rate?

-10,000,000

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

0 0.5 1 2.5

Budget

NPV Profit - All Stands

NPV Profit - Managed Stands

SummarySummary

Do we want to get more specific on provincial Do we want to get more specific on provincial stewardship standardsstewardship standards

do we let a very small group of MOF and do we let a very small group of MOF and industry make them upindustry make them up

what values do we want to stewardwhat values do we want to steward where and how do we express those where and how do we express those

values?values?