Targets, policies and inputs in forestry

FAO SECRETARIAT

This article is the reprint of a chapter of Provisional Indicative World Plan for Agricultural Development, Volume 1. FAO, Rome, 1969. It was mainly compiled by A.J. Leslie, Forest Economics Branch, with the assistance of other members of the Forestry and Forest Industries Division.

Characteristics of the sector

In its most direct relationship with other sectors of agriculture it often appears that forestry, as a competitor for land, is regarded as an obstacle rather than as an aid to development. This is far too narrow a view and has led to costly mistakes. As far as agriculture overall is concerned, the complementarily of forestry, operating through its influence on microclimate and soil conservation and through the supply of materials needed for agricultural practice and development, can be of fundamental importance. These relationships extend beyond agriculture, and an existing forest resource can exert an even more direct influence on economic progress in the economy in general. It provides a readily mobilized basis for a range of low capital intensity industries which simultaneously earn and save foreign exchange, increase the availability of high standard constructional and other intermediate materials, and become growing points for further secondary and tertiary development.

At the same time a forest resource can be used to cushion the social stresses that are inevitably associated with economic and political change. Its exploitation and management provide opportunities for rural employment and industrial training over a wide range of skills and organizational levels. The provision of a continuous supply of low cost fuel and constructional materials from existing forests or specially established plantations can help to bridge the gap until rising living standards diffuse through to the bulk of the rural and urban population.

Then, with some forest types the complex of vegetation, fauna and topography provides a unique environment which can become an economic asset in itself if developed with a view to the tourist trade.

The work in IWP has so far concentrated on wood products. This does not constitute a judgement that they are necessarily the most important, although in most developing countries this is the case under present conditions. The main reason for concentrating on wood products is that they can contribute substantial and almost immediate cash flows and, through the supply and demand linkages, set in motion the mechanisms of capital accumulation, employment and demand multipliers through which economic progress operates. Until a certain minimum level of economic development has been reached, many of the nonwood services, valuable as they might ultimately be, often represent in developing countries a form of luxury consumption. This is not to deny that, in some developing countries, nonwood services, particularly those associated with wildlife management, may complement or even replace the wood products as the main medium through which forestry can contribute to development. Nor does it mean that protection forestry - forestry aimed primarily at soil conservation, stream flow regulation or the provision of shelterbelts-is something that must everywhere wait until a country can afford it. Indeed, in some countries further development may depend on a market improvement in protection forestry. But it does mean that, in developing countries in general, the forestry sector is likely to make its greatest impact when it is most needed if emphasis is placed on industrial values. At the same time, it should not be overlooked that at a later stage a change in priorities may be required. This may not involve, at the present stage, any more active investment than farsighted reservation and protection of some key areas.

The emphasis in IWP is naturally enough on the developing countries. But their forestry policies cannot be considered independently of developments in the more advanced economies, any more than forestry can be considered independently of the economy in general. The degree of interdependence obviously varies widely from country to country, from product to product and from sector to sector, but clearly what should or could be done in forestry and forest industries in developing countries must depend to some degree on what is likely to happen in the countries of Zones A and B.¹

(¹For purposes of IWP a grouping or classification was drawn up which distinguished three zones as shown below:)

In this chapter, therefore, the trends for the major forest product groups are discussed essentially in terms of the demand outlook in Zone C, as compared with the production outlook in Zone C and the prospective timber balance in Zones A plus B.

	Population 1962 (thousands)	Percent of world population
World	3159 978	100.0
Zone A. Developed market economies - including: North America, western and northern Europe, South Africa, Australia and New Zealand.	698 964	22.1
Zone B. Centrally planned economies - including: U.S.S.R., eastern Europe, China(Mainland), North Korea, North Viet-Nam and Cuba.	1066 833	33.8
Zone C. Developing countries	1394181	44.1

Methodological considerations

The methodology for establishing the demand objectives and then the production possibilities for tile forestry and forest products in Zone C follows very closely that developed for IWP generally. Deviations were made only where differences in the nature of the products from those of the agricultural sector made an alternative approach advisable.

In common with the other sectors in IWP, it has been assumed that the main variable affecting per caput consumption is income. There are, of course, other important variables, particularly substitution and price. But, with the assumption of constant relative prices and the incorporation, to some degree, of substitution in the income-consumption function, the emphasis can initially be placed on income.

The link between income and demand for wood and wood products is, however, an indirect one, as most wood products are producer rather than consumer goods.

The growth in demand for the processed wood products is therefore derived from the actual increase in the demand for final consumer goods such as housing, furniture and reading material, and will parallel this growth only in so far as wood products continue to be used in much the same proportion as at present in the construction, furniture, packaging, communications and other industries. Changes in technical standards, consumer preferences or in technology affecting these industries will be reflected in a greater or lesser rate of growth in the derived demand for the various forest products.

Regional totals for Zone C were built up by extrapolations from the countries studied in detail. The basic assumption for each region was that consumption and production in the countries which were not studied would grow at the same rate as in the countries which had been studied. This meant that in some regions studies had to be made of some additional countries to ensure adequate regional coverage.

Zones A and B were handled differently. This was because a series of timber trends studies already existed, covering most of the major countries or regions in the two zones; these provided much more detail than was available for most other commodities. The estimates in these earlier studies were modified and extrapolated as necessary in the light of improved and additional data or recent trends. A new set of base period statistics to correspond with those for Zone C was, however, constructed for each region in Zones A and B.

No single methodology therefore underlies the world balances. However, in the preparation of this chapter it has been possible to draw upon the findings of national, regional, global and product studies published in recent years to build up a fairly definitive world picture.

Production and consumption objectives in developing countries

The production objectives proposed for the regions of Zone C were developed from assessment of the capacity of the forest resources in relation to the demand. Objectives, including exports, in the light of the economic and technical constraints to be faced in raising production from the base period levels.

Because of the integrated nature of the sector, the production objectives had to be developed in two phases. The first phase had to take account of the physical capacity of the forest resources in terms of potential yield of the main categories of roundwood. The second phase was concerned with the capacity of the forest industries to manufacture and their ability to sell processed products. Various technical and economic considerations enter into the calculations in both of these phases. As far as the capacity of the forest resources is concerned, one particularly important problem is how far the utilization of the mixed tropical forests will move beyond the limited range of species marketed at present. A very substantial increase could be achieved cheaply and immediately by more intensive utilization of the existing forests. More complete utilization certainly depends on transport development and economics and on market acceptance, but both the forest services and the forest industries can take positive action to accelerate development in the desired direction.

Harvesting and transport considerations determine how much of the physically available resource represents, true production potential. The problems to be evaluated here arise from the capital and labour requirements of increasing the output of industrial roundwood under conditions in which labour and capital are technical substitutes over a wide range in felling, skidding and short-distance transport, but labour is to a lesser degree a technical substitute for capital in long-distance transport;.

In many cases the exploitation of existing forest resources will necessitate the construction of logging road systems, including access roads within the forest and one or several heavy duty, all-weather roads linking with the national transport system. The capital cost of this forest network may ultimately be absorbed by the returns from the harvesting operation as a whole, but a substantial initial investment is often required long before there is any cash flow from product sales. The value to economic development generally of this addition to the national communications system is often overlooked, but it can be very considerable, as has been demonstrated in west Africa and southeast Asia, for instance.

There are, however, limits to the magnitude of the infrastructural development which can be supported by the sector alone. It has been assumed, therefore, that some of the major reserves of tropical forests whose accessibility on a large scale will depend on the development of major trunk line communications, e.g., parts of central Africa and the Amazon, will be of relatively limited availability during the period under review. Production in the regions where this sort of development is needed on a large scale is likely, therefore, to be less easily expanded than in regions where accessibility can be improved essentially by small-scale extension of existing networks.

The capital limitations to the rate at which harvesting can be expanded to the level of the potential yield of the forests also include the capital costs of a substantial range of equipment. Again, a high proportion could ultimately be absorbed by the harvesting operation, but the level of initial investment needed, particularly when expansion is from a small base and virtually all of the equipment has to be imported, could set real limits to the production possibilities in some countries.

The second closely integrated phase is concerned with the extent to which the production coming from the forest resources will be processed domestically. In general, capital, labour and technology are rather less limiting than market prospects, in the low capital intensity processing industries such as sawmilling, veneer and possibly plywood. Given an adequate resource base, production could therefore be expected to expand in these industries as fast as or even faster than the rate of increase in domestic demand. In the moderately capital intensive industries, such as fibreboard and particle board, the question of economies of scale becomes more relevant in assessing production possibilities, and with the high capital intensive industries, such as pulp and paper manufacture, it can become the dominant constraint. In addition, the labour input in these industries comprises a much higher proportion of skilled technical and professional specialists. Hence, in the early part of the period, labour supply could be, if not a critical constraint, at least a factor contributing to a high cost structure.

These considerations affect the production possibilities in several ways. One of considerable significance is that the effect of scale of output on unit cost means that, if the price at which the commodities in question can be imported is-as it should be-a significant criterion, then the minimum economic size of a plant is fixed within fairly narrow limits. Although general levels of minimum economic size can be set, the actual level can vary with each particular case according to the interaction of such factors as the type of process, the cost of wood and other raw materials, the degree of vertical integration, and the nature of the markets for the output. Until or unless a market equivalent to the minimum economic size is available, the establishment of a processing industry is premature. This does not mean that the scale of operation must be such that average unit cost is equal to or less than world market prices (as the situation in some of the exporting countries of Zones A and B shows), nor that domestic production should wait until the domestic market would warrant the establishment of the industry. The market could, of course, be partly, substantially, or entirely an export one, but the higher the export component the more stringent the standards that production would have to meet. Provided the export component could meet world standards, however, the establishment of a capital intensive industry could still make sense, even if average unit costs were somewhat higher than long-run world market prices, because of the external economies and benefits associated with the existence of the industry. The critical question is, of course, how much higher ?

The development of the production objectives has therefore been largely a matter of judgement rather than the result of detailed examination of cost and supply schedules. When the current work along these lines is more advanced it will be possible to make better informed and more consistent estimates.

The relationship between the level, or changes in the level, of economic development and the consumption of forest products varies with each product. These differences in turn affect the production objectives. For this reason we turn now to a discussion of the consumption and production objectives for each of the main product groups.

Sawnwood

Sawnwood is technologically the - simplest of the processed wood products, and the one with the longest history of use. In the base period about two thirds of all the roundwood processed industrially was used by the sawnwood industry. Construction accounts for from one half to three fifths of the total sawnwood used, with furniture, packing, mining and railway sleepers accounting for most of the rest.

Generally speaking, as living standards rise above a fairly high level, sawnwood tends to be replaced by substitute materials (including other forms of wood), especially in applications where standard sizes or shapes are at a premium, as is the case in most mechanized operations. Thus, some of the high-income regions in Zone A show a decreasing consumption per caput.

In the developing countries, the competitive position of sawnwood is rather stronger. Particularly important in this respect is the cost-in-use advantage that sawnwood has, where capital and skills are scarce and labour costs are low.

It is estimated that, given the assumption underlying this study, world consumption of sawnwood will be 424 million cubic metres) by 1975 and 485 million by 1985-an increase by the latter year of almost 40 percent over consumption in 1962*.² As will be seen from Table 1, growth in consumption in the developed areas is likely to be lower than the global average. Even so, the rise expected - about 20 percent over 1962* by 1975 and about 32 percent; by 1985-in Zones A and B represent very substantial absolute increases in aggregate annual consumption.

(² The expression 19625 is used in the headings of many tables and also in the text. The asterisk indicates that 1962 means the average of 1961-63.)

TABLE 1. - SAWNWOOD: PRESENT AND PROJECTED WORLD CONSUMPTION AND PRODUCTION

	Consumption			Production
	1962	1975	1985	1962	1975	1985
CONIFEROUS	Million cubic metres
Zone A	155.3	185.6	201.1	150.4	1762	189.0
Zone B	103.8	118.3	130.6	109.8	132.1	151.6
Total A + B .	259.2	303.9	331.7	260.2	308.3	340.6
Zone C
Latin America	5.3	9.0	11.6	5.3	9.4	12.0
Africa	0.8	1.5	2.2	0.3	0.8	1.3
Near East	0.8	1.2	1.7	0.3	0.6	0.8
Asia	1.3	2.0	2.5	1.3	1.9	2.5
Total C	8.2	13.7	18.0	7.2	12.7	16.6
Total A + B + C	267.4	317.6	349.7	267.4	321.0	357.2
BROADLEAVED
Zone A	37.8	49.2	56.1	35.9	45.5	50.1
Zone B	23.7	29.3	34.3	23.7	29.5	34.6
Total A + B	61.5	78.5	90.4	59.6	75.0	84.7
Zone C
Latin America.	7.4	11.2	20.0	7.5	11.8	21.2
Africa	1.4	2.8	4.5	2.0	3.6	5.6
Near East	0.5	0.7	1.0	0.2	0.3	0.4
Asia	8.0	13.0	18.9	8.4	14.1	20.4
Total C	17.3	27.7	44. 4	18.1	29.8	47.6
Total A + B + C	78.8	106.2	134.8	77.4	104.8	132.3
CONIFEROUS AND BROADLEAVED
Zones A + B .	320.7	382.4	422.1	319.8	383.3	425.3
Zone C	25.5	41.4	62.4	25.3	42.5	64.2
World total	346.2	423.8	484. 5	345.1	425.8	489.5

In most developing areas by 1985 the overall annual use is expected to rise by some 145 percent. Over a third of the world's increased requirements of sawnwood will as a result originate in Zone C. This underlines the potential and the challenge facing the sawnwood industries in these countries.

Production and consumption are shown separately for coniferous and broadleaved sawnwood in Table 1. This brings out the point that the coniferous sawnwood industry is concentrated :in Zones A and B. but broadleaved sawnwood is much :more evenly distributed, with production in Zone C rising from 22 percent of the world total in 1962* to over one third by 1985.

It will be evident from the discussion of methodology that the global discrepancies between consumption and production at the target dates do not necessarily connote the development of significant imbalances. There are, however, some interesting implications in relation. to trade arising from the regional trends and these will be discussed later in the chapter.

Wood-based panels

The extraordinary upsurge in Zones A and B in the use of wood-based panels, particularly in recent years, complicates the appraisal of the further evolution of consumption.

Although recent trends indicate a slowing down in the rate of growth, consumption of the wood-base of panels as a group was growing at over 10 percent annually in the base period. For at least two reasons such a high rate of growth cannot be expected to continue indefinitely. In the first place, a substantial part of growth in consumption has arisen from the substitution of wood-based panels for other materials. With the bulk of the market gains from this source already made in Zone A, some slowing down of growth is inevitable. The second factor is that much of the impetus to growth since 1950 has come from one entirely new product -- particle board. An indefinite continuation of the past rate of growth could only be expected if a series of such new products were to enter the market in the future. There is little, if any, evidence of such a product appearing before 1975; but it cannot be entirely ruled out as a possibility, particularly by 1985. It must also he emphasized that the wood-based panel products compete with other nonwood materials such as asbestos sheet. The emergence of a new or improved product of the latter sort could limit future growth of the wood-based panels.

The estimates for 1975 and 1985, shown in Table 2, assume for the countries in Zone A an appreciable slowing down in growth in consumption of wood-based panels by the latter year. Nevertheless, as apparent income elasticities are still likely to be well above unity in most subregions in 1985, quite large increases in consumption and production can be expected. In the centrally planned economies of eastern Europe and the U.S.S.R. an even higher rate of increase than in the past is expected, as the planned replacement of sawn-wood by wood-based panels gains momentum.

In Zone C a number of different elements 'bear upon the likely growth in panel consumption. Because of the stronger competitive position enjoyed by sawnwood in countries where it is available cheaply, and where labour costs are low, wood-based panel products may not be adopted as rapidly and on as large a scale as in the high labour cost countries. But where sawnwood is not available cheaply or the supply is unreliable or unsatisfactory, panel products are likely to become important even at early stages of development, particularly because of their uniformity of quality and ease of working. Moreover, forest resources of too low a quality to provide sawnwood can often provide the raw material base for the local manufacture of fibreboard and particle board.

TABLE 2. - WOOD BASED PANELS: EVOLUTION OF CONSUMPTION AND PRODUCTION

	Consumption			Production
	1962	1975	1985	1962	1975	1985
PLYWOOD AND VENEER	Million cubic metres
Zone A	18.0	35.2	48.8	17.1	31.8	42.7
Zone B	2.7	6.2	11.5	2.6	6.8	12.5
Total A + B .	20.7	41.4	60.3	19.7	38.6	55.2
Zone C
Latin America	0.4	0.8	1.9	0.4	1.1	2.8
Africa	0.1	0.4	0.7	0.2	1.0	1.8
Near East	0.1	0.2	0.3	0.1	0.2	0.3
Asia	0.4	1.2	2.8	0.7	2.8	5.1
Total C	1.0	2.6	5.7	1.4	5.1	10.0
Total A + B + C	21.7	44.0	66.0	21.1	43.7	65.2
FIBREBOARD AND PARTICLE BOARD ¹	Million metric tons
Zone A	7.5	15.4	22.4	7.3	14.7	20.8
Zone B	1.6	9.1	12.5	1.8	9.7	13.9
Total A + B .	9.1	24.5	34.9	9.1	24.4	34.0
Zone C
Latin America .	0.2	0.9	3.0	0.2	1.1	3.1
Africa	-	0.1	0.2	-	0.1	0.2
Near East	-	0.1	0.2	-	-	0.1
Asia	0.1	0.5	1.4	0.5	1.4
Total C	0.3	1.6	4.8	0.2	1.7	4.8
Total A + B + C	9.4	26.1	39.7	9.3	26.1	38.8
ALL WOOD-BASED PANELS ¹
Zones A + B .	21.1	49.3	71.1	20.9	47.6	67.1
Zone C	0.9	3.2	8.2	1.0	4.8	10.8
Total A + B + C	22.0	52.5	79.3	21.9	52.4	77.9

¹ 1 cubic metre of plywood is assumed equal to 0.6 metric ton.

A rapid growth in consumption of wood-based panel products is consequently envisaged for many of the developing countries. But, as there have not generally been big markets for sawnwood in the Zone C countries, it is unlikely that the rate of growth will be as fast as that which occurred in the early stages in the developed countries, when expansion involved a substantial amount of replacement of sawnwood.

During the last few years there has been a rapid growth of plywood manufacturing capacity in the Zone a countries and a rapidly increasing export to the developed countries. The production objectives for Zone C indicate that this is expected to continue, with the zone's share of world production rising from around 5 percent in 1962* to 15 percent by 1985. For the other wood-based panels, production possibilities for the various regions within Zone C' generally imply that growing consumption will be matched by local production.

As with sawnwood, the discrepancies between production and consumption cannot be taken at this stage as necessarily indicating the development of significant global imbalances. The implications for trade arising from the regional imbalance will be taken up later in the chapter.

Pulp and paper

Manufacture of wood pulp and manufacture of paper and paperboard can be distinguished as separate processes, but they are so interrelated and normally physically integrated as to be considered a single industry. Paper and paperboard production absorbs the great bulk of all pulp products; in turn, wood pulp is the predominant raw material for paper products and the total consumption of wood pulp is to a great extent linked to paper production.

Present and projected future consumption of paper and paperboard are given in Table 3. In 1962*, Zone accounted for only 6 percent of world consumption. As demand elasticities are very much higher in low-income countries than in high-income countries, demand in Zone C is expected to grow at a fast rate. It is estimated therefore that Zone C will account for around 8 percent of world consumption by 1975, and for almost 10 percent by 1985.

Growth in the consumption of paper and paperboard is expected to be mainly determined, as in the past, by the rate of growth and level of income per caput.

Of the other factors, rising literacy could have a considerable effect on the future level of use of cultural papers (newsprint, writing and printing papers). Many of the developing countries are currently engaged upon or planning accelerated efforts to extend education to all or the greater part of their populations. It is therefore likely that, in countries where efforts are successful during the period covered by IWP, the growth in demand for cultural papers would be faster than might be anticipated on the basis only of income growth.

The future growth in use of industrial papers and paperboards rests largely upon the continued success of these materials in the packaging field. The evidence at present indicates that the paper and paperboard packaging industry will continue to adapt itself to the quickly changing conditions, presented by such factors as the growing competition from plastics, as successfully as it has done during the recent past.

TABLE 3.-PAPER AND PAPER PULP: PRESENT AND PROJECTED FUTURE CONSUMPTION AND PRODUCTION

	Consumption			Production
	1962	1975	1985	1962	1975	1985
PAPER AND PAPER BOARD	Million metric tons
Zone A	65.7	128.5	204.3	67.5	131.9	206.3
Zone B	9.1	20.6	41.1	9.0	20.3	40.0
Total A + B	74.8	149.1	245.4	76.5	152.2	246.3
of which:
newsprint	13.9	22.3	31.5
printing and writing	14.0	29.4	47.4
other	46.9	97.4	166.5
Zone C
Latin America .	2.7	6.8	13.0	1.8	5.0	11.2
Africa	0.3	0.7	1.6	0.1	0.4	1.1
Near East	0.4	1.1	2. 8	0. 1	0. 4	0. 9
Asia	1. 4	4.0	8.9	0.9	3.5	7.9
Total C	4.8	12.6	26.3	2.9	9.3	21.1
of which:
newsprint	1.0	3.0	6.3
printing and writing	1.2	3.0	6.5
other	2.6	6. 6	13.5
Total A + B + C	79.6	161.7	217.7	79.4	161.5	267.4
of which:
newsprint	14.9	25.3	37.8
printing and writing	15.2	32.4	53.9
other	49.5	104.0	180.0
PAPER PULP ¹
Zone A	56.7	111.3	179.5	57.4	113.7	183.5
Zone B	8.3	18.3	35.0	8.1	17.5	32.8
Total A + B	65.0	129.6	214.5	65.5	131.2	216.3
Zone C
Latin America	1.4.	4.0	9.4	1.1	3.6	8.0
Africa	-	0.3	1.1	0.1	0.4	1.0
Near East	0.1	0.3	0.8	-	0.2	0.4
Asia	0.8	3.1	7.2	0.9	2.9	7.0
Total C	2.3	7.7	18.5	2.1	7.1	16.4
Total A + B + C	67.3	137.3	233. 0	67.6	138.3	232.7

¹ Includes mechanical, chemical, semichemical and other fibre pulp; excludes dissolving pulp.

In the developing countries where use is still low, consumption of paper and paperboard for packaging could grow faster than would be expected on the basis of the expected growth :in income, because of the suitability of these materials for some of the foodstuffs and industrial products, such as cement, which loom large in the total output of goods in many of these countries. Under such conditions, adoption of paper or paperboard packaging by a, major industry can wholly alter the magnitude of the country's aggregate use.

The fibrous raw materials for paper making can be divided into three main categories: wood fibres, non-wood fibres, and waste paper. In 1952* approximately 77 percent of the fibrous raw materials used in the manufacture of paper and paperboard in the world was wood pulp, about 5 percent was pulp made from nonwood fibres, and about 18 percent was waste paper.

The pattern of wood fibre supplies available for, and utilized by-, the pulp and paper industry has been changing. Three of the most important developments have been the rapidly expanding use of wood residues, the significant rise in the use of broadleaved woods, and the rapid growth of pulp and paper production based on fast-growing plantation species. All have been dictated by the need to keep wood raw material costs in check. Although this cost item looms less large in the total costs of production than it does in the other primary wood-using industries, it is still generally the largest single item in the cost of manufacturing pulp.

The pulp and paper industry is the most technically complex and capital intensive of the forest industries. The larger part of the industry's production comes from large, highly organized and integrated production units. Capital and skill requirements are considerable; consequently only a limited number of countries have been able to support Large-scale operations which could effectively compete in 1; he world markets for mass grades of product. The world market for mass grade pulp products, in contrast with those for other forestry products, is characterized by a high degree of international integration. However, a very wide range of papers and paperboards is still produced predominantly for domestic markets, many of them in mills of only moderate size.

Industrial roundwood

This category covers all wood not processed before use and which is not used as fuelwood. Statistics on roundwood production and consumption for many countries are rather unreliable, since much of the production goes unrecorded. Furthermore, an important component of this group-pitprops-is frequently reported with pulpwood and it is often not possible to distinguish it separately. Despite these difficulties, the trends in consumption can be identified reasonably well from well-established trends in patterns of use.

Quantitatively, the most important use of roundwood is as a structural building material in. simple, traditional construction. With rising income it is progressively replaced as the principal building material by more durable and uniform materials, but its use persists in rural and farm building and for such uses as fencing. It therefore remains an important constituent of the wood-using economy as long as the rural sector remains large. During the early stages of development the shift to other materials is likely to be more than offset by the rise in population. As a large and growing part of the world's population will still be living in such traditional rural environments, by 1985 the additional roundwood requirements are likely to be appreciable.

Outside its use in construction, the principal use of roundwood is as mining supports (pitprops), mainly in coal mines. The recent trend in developed countries toward mechanized coal mining has brought about a sharp reduction in the use of hand-installed pitprops per ton of coal mined. In developing countries, on the other hand, expansion of coal mining might bring about an increase in the use of pitprops. However, on balance, the tendency is for the overall use of wood as pitprops to decline.

There is very little interregional trade in industrial roundwood. In aggregating regional and zonal totals, it can be assumed that production is equal to consumption.

The significant features of the trend in roundwood consumption and production can be summarized as follows:

1. In aggregate, world consumption of wood in the round is not growing.
2. The growth in consumption in Zone C will be offset by declining consumption in Zones A and B.
3. Even in parts of Zone C, consumption per caput will decline.

TABLE 4. - INDUSTRIAL ROUNDWOOD: PRESENT AND PROJECTED FUTURE CONSUMPTION AND PRODUCTION

	1962	1975	1985
	Million cubic metres
Zone A	50.0	36.0	24.0
Zone B.	95.0	89.0	84.0
Total A + B	145.0	124.0	108.0
Zone C
Latin America	7.7	10.4	12.4
Africa	8.9	11.9	15.3
Near East	5.7	8.0	11.0
Asia	8.5	16.1	21.3
Total C	30.8	46.4	60.0
Total A + B + C	176	170	168

Fuelwood

The statistics of fuelwood are also unreliable. As much of the production goes unrecorded, the data are necessarily based on estimates which, for many parts of the world, indicate no more than the broad orders of magnitude involved. Nevertheless these suffice to show that fuelwood still makes up at least half of all the wood used in the world today. In most of the Zone C countries between three quarters and nine tenths of all wood used is for fuel, but in the developed regions the proportion is only one quarter to one tenth.

TABLE 5. - FUELWOOD: PRESENT AND PROJECTED CONSUMPTION AND PRODUCTION

	1962	1975	1985
	Million cubic metres
Zone A	165	116	81
Zone B	218	202	186
Total A + B	383	318	267
Zone C
Latin America	203	193	176
Africa	177	217	259
Near East	24	28	32
Asia	230	280	330
Total C	634	718	797
Total A + B + C	1 017	1 036	1 064

The consumption objectives for all regions of Zone C, except Latin America, indicate rises in the consumption of fuelwood. In Zone A a substantial decline in consumption is expected, with a notable but smaller decline in Zone B. In summary, the huge expansion in rural populations in the developing countries will still sustain the world aggregate demand for fuelwood, despite declining total use in developed countries, and declining use per caput in developing countries.

Although some fuelwood is traded within Zone C, interregional trade is insignificant. As with industrial roundwood, at the level of aggregation in this chapter, production can be assumed to match consumption.

The per caput consumption of fuelwood tends to decline as living standards rise and more efficient fuels become available. Fuelwood normally is of low unit value, and cannot absorb the cost of transport over very long distances. Thus the aggregate figures cited above hide the fact that local shortages of wood for fuel already exist, and will likely continue, even though, on a global scale, the consumption levels lie well within the capacity of the world's forests.

These consumption targets will only be met, however, if special measures are taken, particularly in areas of chronic wood scarcity. With the advances that have taken place in plantation establishment and management, the technical required to provide fast-growing plantations specifically for fuelwood are relatively simple. Correct species selection combined with appropriate site preparation, and protection from animals, fire and premature felling can provide an adequate wood supply for fuel and constructional requirements, even in quite arid areas. As with most of' the problems of forestry in developing countries, the main obstacles to be overcome are institutional.

What do the figures mean ?

At this point it seems opportune to reflect upon the meaning of the figures that have been adduced.

For Zones A and B. the forecasts of consumption and production are essentially extrapolations or adaptations from existing studies, modified to take into account any trends which have become apparent in recent years. For Zone C, the consumption objectives are linked to the basic IWP assumptions covering population, income and growth, though more detailed know-ledge of the sector has permitted some degree of refinement in methodology. The production objectives for Zone C are, however, at this stage very provisional. They rest on an assessment of the physical capacity of forest resources, but allow for the effects of certain factors limiting supply, particularly likely developments in transport and infrastructure. III assessing the impact of these limiting factors, account has also been taken of':

(a) expected internal demand;
(b) in a very general way, export possibilities.

These provisional production objectives for Zone C are considered to be reasonable in the sense that they are capable of achievement, economically and technically. However, they are not necessarily consistent or adequate. They can be tested and adjusted for consistency and adequacy only after they have been. reviewed in the light of the global situation.

The fact that the proposed or indicated :levels of world production of the major categories of forest products are substantially in balance with consumption suggests that tile problems of adjustment may be quite minor. The two major discrepancies are in coniferous sawnwood, where production as projected would exceed consumption by 7.5 million cubic metres) by 1985, and paper, where production by 1985 as projected would fall short of consumption by 4.3 million cubic metres. These are substantial quantities in absolute terms. But they represent only about 2 percent of total production by that year. Production and consumption of both of these commodities is heavily concentrated in Zones A and B. and the projection of production by 1985 in these zones is hardly likely to be accurate to within ± 2 percent. But if the global imbalances may be glossed over, the regional and zonal imbalances do have some real significance in terms of trade prospects.

Trade prospects and implications for developing countries

Future trade prospects are among the most important of the findings that could be expected to emerge from a world study of possibilities in consumption and production. This is particularly so for developing countries for whom the future level of export earnings is an important factor in economic planning and development.

In certain respects it is easier to assess with confidence future trade prospects for forest products than trade prospects for annual or short rotation crops. One reason is that the demand trends are better attested. Another is that the supply of raw materials over the period of forecast covered in IWP must largely be limited to existing forest resources. Thus, current or future plans for the creation of new forest resources, whether as a basis for export industries or for import replacement, are unlikely to bring about major changes in the direction and level of world trade by 1985. Hence, current trends and knowledge provide a fairly firm basis for assessing trade prospects by 1975 and 1985.

One uncertainty stems from the fact that a given final demand in an importing country may be satisfied by trade in unprocessed, semiprocessed or fully processed form, depending in part on the location of processing facilities. The appraisal which follows rests on a number of assumptions. which are in fact judgements, of the extent to which trade will flow in processed form.

The export availabilities that resulted from the assessments of production possibilities in tile regional studies (extended to cover the whole of each region) are summarized in Table 6.

It is evident that the forests of Zone C have the capacity to support quite large relative and absolute increases in the annual volume of exports at least up to 1985.

The next point is to consider the likely size and pattern of the market for export of forest products to Zones A and B. Even by 1985 about 90 percent of the world's consumption of all processed forest products is still likely to be located in Zones A and B, where the bulk of the world's purchasing power is also concentrated.

Two subregions of Zone A - western Europe and Japan - are becoming areas with increasingly acute deficits in most categories of industrial wood. The pressure of rising demand on the capacity of their forest resources is such that, even under intensified and changing management, these deficits cannot but increase. As far as coniferous-based products are concerned, these deficits will largely be met by imports from the wood surplus countries of Zones A and B. The prospects for expanding exports of coniferous wood products from the countries of Zone C to Zones A and B will therefore depend on the extent to which they can maintain traditional markets and to which they can exploit such comparative advantages in production costs as they may develop.

TABLE 6. - ESTIMATED ANNUAL EXPORT AVAILABILITY FOR MAJOR FOREST PRODUCTS IN ZONE C IN 1975 AND 1985

	Logs	Sawn-wood	Veneer and plywood	Fibreboard and particle board	Pulp and pulp products
1962	Thousand cubic metres			Thousand metric tons
Africa	5 030	680	170		58
Asia	5 710	490	340	1	34
Latin America	350	1400	40	4	98
Near East	10	50	3
Total Zone C.	11 100	2 620	550	5	190
1975
Africa	5 200	1 040	670	20	280
Asia	21 500	2 300	2 000	20	40
Latin America	300	1750	330	50	300
Near East	-	-	-	-
Total zone C	27 000	5 090	3 000	90	620
1985
Africa	4 700	1 500	1 250	50	940
Asia	32 000	3 200	3 000	40	70
Latin America	300	1 880	910	160	990
Near East	-	-
Total Zone C.	37 000	6 580	5 160	250	2 000

For some developing countries these may be considerable. The very much higher growth rates of coniferous plantations in some tropical and subtropical locations offer scope for very great advantages in the costs of production of wood. Although this does not necessarily mean that the cost of production of end products will be lower, the advantage is so great that with plantations in countries or subregions advantageously located relative to the wood-deficit markets, and sited close to developed harbours, there are real possibilities of developing exports in processed (e.g., sawnwood, constructional plywood) or semiprocessed (e.g., wood chips, wood pulp) form. In global aggregates, the amounts that such trade may reach are likely to be quite minor, but for some countries in Africa and Latin America the local impact could be very high.

For tropical broadleaved woods and their products, the situation continues to develop very strongly in favour of exports from Zone C. Already, in the decade 1955-65, exports of broadleaved logs, sawnwood, plywood and veneers from Zone C countries rose in value from $240 million to $660 million. This category of products thus constitutes one of the few spectacular growing points in trade from the developing countries. The several factors underlying this trend will continue to prevail over the coming decades, and a further substantial expansion is foreseen. A matter of some importance for the developing countries, however, is the extent to which this trade, which presently takes place largely in unprocessed form, can be upgraded within the planned period. The production objectives established in this chapter imply the transformation of a modest but realistic part of this trade into processed products (sawnwood, plywood and veneer) within the next two decades. The implications for the Zone C countries can be seen more clearly if current trade and trade prospects are analysed in somewhat more detail, distinguishing those countries which are in-transit processors (i.e., importing logs and exporting sawnwood, plywood or veneers) rather than final consumers. This analysis is presented in Table 7. Here 1965 is selected as base year, since the available statistics for that year lend themselves more readily to this type of analysis..

In that year Zone C countries exported close on 19 million cubic metres of tropical broadleaved logs. Of these, 14.5 million cubic metres went to countries in Zones A and B. where they were subsequently processed and consumed. The remainder went to countries in both Zones A and C, where they were processed and subsequently exported (0.7 million cubic metres as sawnwood, and 0.9 million cubic metres as plywood and veneers).

By 1985, the importing countries of Zones A and B are expected to absorb 28 million cubic metres more (roundwood equivalent) of tropical wood than they did in 1965. However, only 11.5 million cubic metres of this addition will reach them in log form, the rest of the extra flow will be in the form of sawnwood (up by 5.2 million cubic metres) and plywood and veneers (up by 3.8 million cubic metres). This extra processed wood will come both from new processing facilities in the Zone C wood-rich countries, and from a further expansion of processing facilities in the Zone C in-transit processors. Thus, while the production objectives set in this chapter provide for a very substantial expansion of processing facilities within Zone C, it is also assumed that there will take place concurrently a sizable expansion of processing facilities, based on imported logs, in Zones A and B. It will be observed that the underlying assumption is that, of the additional trade flow over the period 1965 to 1985, around two fifths will be processed in the countries of final destination in Zones A and B. while three fifths will be processed in new facilities established within Zone C.

It was emphasized earlier that the production objectives set in this chapter are still provisional. Obviously, the establishment of processing facilities within Zone at the rate predicted will require considerable effort. At the same time, they would not, as Table 7 makes clear, exhaust the possibilities for upgrading the export trade in tropical broadleaved woods that will become available over the next decades. In other words, to the extent that Zone C countries succeed in reaching the target set for the first decade, there would be every incentive to raising the Zone C target for the establishment of processing facilities beyond the level predicated by IWP.

TABLE 7. - TRADE AND TRADE PROSPECTS IN TROPICAL BROADLEAVED WOODS

At the same time, it should be observed that the targets set in this chapter implicitly assume that, at least some further progress will be made in the near future in modifying tariff structures and trade policies in Zones A and B countries which presently discriminate against the import of tropical woods in processed form.

Two other aspects of this Table call for comment. For the year 1975, it would appear that export availabilities in the Zone C countries (38 million cubic metres) fall somewhat short of total import needs (43 million cubic metres) By 1985, this situation will apparently be reversed (59 against 54 million cubic metres) These apparent global imbalances are inherent in the necessarily provisional nature of the targets set at this stage of the study. Obviously, it will be necessary to review again closely the production possibilities in Zone C, and in particular those constraints presently limiting a rapid expansion of supplies, to see what actions, at the national and international level, are needed to bring forth the needed supplies. It is the vigour of the measures adopted within the next few years which will determine at what level the 1975 balance will eventually be struck. And it is the concrete progress achieved within the first decade of the plan period which will point to the realism or otherwise of the targets tentatively set for 1985.

Even so, and with all the qualifications which must be entered given the provisional character of the production perspectives adduced in this chapter, several things are crystal clear. There will be a rapidly expanding market in Zones A and B for tropical woods and their products over the plan period. Zone C countries have the resources available to meet this demand. There is every prospect of a growing proportion of this important trade flow taking place in processed form.

It should also be noted that export possibilities from the tropical forests are not limited to sawnwood, plywood, veneers and logs for these industries. Developments within the last year or two point to the possibility of exporting wood chips for pulping on a considerable scale. These developments are so recent that it is premature to hazard a guess at the rate at which this new category of trade will develop. Certain it is that a number of important long-term contracts for the export of wood chips have already been signed, and that many specialized vessels have already been built to accommodate this trade, -while others are on the stocks. Certain it is too that several major companies, North American and Japanese, are presently investigating the economic feasibility of developing wood-chip-for-export facilities in tropical Zone C countries. The installation of such facilities could in itself react favourably on the economic production of tropical logs for the mechanical wood-working industries, and eventually make possible the establishment of fully integrated forest industry complexes in the developing countries.

From the point of view of the potential contribution of forest products exports to economic development in Zone C, the prospects in value terms are as relevant as the prospects in volume terms are for forest policy. The conversions to value in Table 8 are estimates based on the export availabilities shown in Table 6, with a token amount added for the possible development of trade in wood chips.

TABLE 8. - ESTIMATED VALUE OF ZONE C EXPORTS OF FOREST PRODUCTS

The trends are clear enough, although the absolute levels may be subject to some amendment with further study. Exports of forest products should, relative to 1962*, add over $600 million annually to foreign exchange earnings of developing countries by 1975, and another $600 million annually by 1985. The rate of growth in value-around 5 1/2 percent annually between 1962* and 1985-is appreciably greater than the 4 1/2 percent average rate of growth in volume of forest products exports over the same period. This difference reflects the increasing extent to which processed products are expected to replace raw materials in trade. Of particular interest in this respect is the development of panel production (mainly plywood), which should make this category as important as logs as an export earner for developing countries by 1985.

While this buoyant market for exports of forest products from developing countries makes the sector one of very great potential for the economic development of Zone C, the highly aggregate nature of the analysis obscures the fact that this trade is presently limited, on the one hand, to a relatively few buying countries, mainly in western Europe and east Asia, and, on the other, to some of the forest surplus countries of Zone C, particularly in west Africa and southeast Asia. This pattern is not expected to change dramatically, although North America could, by 1985, provide a market of about the same size as western Europe for processed broadleaved woods, while several new exporters will appear in Zone C.

Several important policy issues arise from these trade prospects. Firstly, the steadily expanding market for tropical broadleaved woods in Zones A and B argues that those countries within Zone C which have significant areas of potentially valuable tropical broadleaved forests should lose no time in assessing those resources, in bringing them under management, and in starting to create the infrastructure which will bring them within economic reach of the market.

A second point that emerges is that expanding markets in Zones A and B for broadleaved sawnwood and plywood offer the possibility of expanding forest-based industrialization, in Zone C, relatively independently of domestic markets. Since the two groups of products are relatively labour intensive, the comparative advantage in producing them from tropical species would normally lie with the developing countries. From the point of view of economic efficiency in developed countries and of accelerating development in developing countries, every effort should be made to ensure that as much as possible of the expansion in sawmilling and plywood manufacturing based on tropical logs takes place in developing countries. The main technical provisos are, of course, that production in the developing countries is carried out to specifications that would meet the standards in developed country markets and at prices which reflect the theoretical advantage.

There is a third implication for many countries in Zone C, one which is perhaps not directly apparent from what has been said so far. It will be recalled that, in order to satisfy their rising domestic demand, many Zone C countries will need to supplement their existing forests by the creation of plantations, both coniferous and broadleaved. It has also been pointed out that many of the countries in Zone C are so favoured by soil and climate that they are capable of producing wood for industry, in the form of industrial plantations, at a fraction of the costs which industry in most of the established centres of Zones A and B are presently paying. This advantage is likely to endure, while the offsetting cost disadvantages which presently inhibit the geographical decentralization of industry (underdeveloped infrastructure, lack of skills, higher cost of capital and so on) will undoubtedly be eroded with the passage of time. But there is a further consideration, one which so far has been insufficiently stressed. The supply/demand trends within Zones A and B which have been delineated up to 1985, and which point clearly to rising deficits in certain subregions, will not end in 1985; they will persist in succeeding decades. In so far as plantation forests in favoured Zone C countries show themselves capable of supplying wood or wood products on competitive terms with the resource-rich countries of Zones A and B (most of which are destined to encounter rising wood costs), they can look forward to a growing share of the markets in the wood-deficit areas of Zones A and B. With this perspective, there is a clear case for the immediate creation, in suitable Zone C: countries, of industrial plantations tailored to meet this future demand. It is important that such plantations be suitably located and concentrated, that is to say, within economic reach of suitable potential mild sites and exporting points. Meanwhile, it should never be overlooked that the best springboard for entering the international market is a sound and economically viable domestic industry.

There are signs that the world's eventual need of a significant contribution from newly created forests in Zone C countries-of, in fact, the need for a progressive shift in the international division of labour in this industry in the later decades of this century-is becoming more widely understood, and that the reluctance of private and public financing sources to support such investment is gradually being overcome.

Finally, there is a fourth implication, again not directly revealed by the analysis, but flowing quite clearly from numerous associated studies. This too can be of considerable relevance for trade development. It is the important prospect which emerges for increased trade between the countries of Zone C'. Admittedly, with the world's purchasing power concentrated in Zones A and B. trade flows from Zone C to Zones A and B will continue to predominate. However, the uneven distribution of forests and population within and between regions of Zone C suggests :lines along which trade could logically be developed within Zone C. Obviously, trade between developing countries along resource-geographical lines is not as well developed as theoretical considerations might suggest that it could be. Novertheless, trade between developing countries in the Asia region has grown appreciably in recent years, though essentially in terms of log exports, with the resulting processed products going mainly to a few countries in Zone A. It is evident that the extent to which a major e mansion in trade of processed products between developing countries could occur is limited by inadequate and, at times, unsuitable infrastructure. But perhaps an equally strong restriction is imposed by the institutional and administrative arrangements which, formally and informally, link: trade with traditional spheres of political and commercial influence in the developed countries.

There are definite advantages to be gained from links that provide access to the complicated marketing, systems in specific developed countries, as long as trade conditions remain relatively stable. However, the stability of such arrangements can be a serious handicap to developing countries when they should be in a position to take advantage of the opportunities offered by dynamic and expanding prospects for exports of forest products.

Investment and manpower requirements in zone C

If the production objectives elaborated in this chapter are to be attained, a very sharp increase, as compared with past levels, in inputs to the forest and forest industries sector in Zone C' countries will be required. It is not proposed to discuss this question exhaustively. In this section we shall limit ourselves to giving some general indications of requirements of capital and of professional and technical skills, and to offering some comment on the employment opportunities that would be created were the production objectives reached.

These elements are selected for discussion because in this sector, as in most others, the availability of investment capital and of required professional and technical skills are key factors, crucial for the attainment of the production objectives. And here, perhaps, it is necessary already to interject a word of warning. Work on IWP has not yet proceeded to the stage where it can be said with certainty that the capital needs of this sector, when account is taken of the parallel needs of other sectors, can be met in full. Only when tile global review has further advanced and the iteration process been taken a stage further, will it be possible to form a judgement of the validity of the production objectives from the standpoint of the capital needed to attain them, and hence on whether or not some modification of the production objectives is required.

In principle, the same line of argument applies to the availability of professional and technical skills. But here a close analysis of the progress made within the last decade in the several regions of Zone C in expanding professional and technical cadres for this sector provides firm grounds for believing that this factor :need not necessarily become a bottleneck over the next two decades.

The principal capital inputs required in this sector will be for logging, road building, and transport equipment, and for fixed installations and equipment for the saw-milling, panel products, and pulp and paper industries. There are many situations in Zone C where existing plant is not being used to capacity, and where relatively small capital inputs, both in the forest and in industry, could bring about almost immediately appreciable increases in output.

In the long run, however, the gains that can be achieved by more efficient use of the existing capital stock are relatively limited. In most countries, the bulk of the increased output proposed will involve the opening of new forest areas and the establishment of more, and more up-to-date, processing plants in new locations. Measures for maintaining the supply of raw materials to the industries and for providing improved raw material bases for new industries will also necessitate considerable inputs of capital into the development of existing forests and of man-made forests. In addition, account must be taken of the investments involved in reforestation programmes, primarily for soil and environment protection needed in some countries, particularly in the Near East and African regions.

TABLE 9. - INVESTMENT REQUIREMENTS IN FORESTRY AND FOREST INDUSTRIES FOR EXPANSION OF PRODUCTION IN ZONE C

	Forestry and logging		Forest industries
	1962*-75	1975-85	1962*-75	1975-85
	Million U.S. dollars
Africa	480	480	550	800
Asia	600	650	1 500	2 800
Latin America	600	750	1 700	3 200
Near East	200	260	150	200
Total	1 880	2140	3 900	7 000

The marginal investment per unit of additional output, even of a given product, can vary widely according to the relative influence of many factors such as the size of the plant, its location, its degree of integration with other wood-using industries and the processes used. The capital investment required per hectare of forest or plantation can also vary within very wide limits with environmental conditions and the degree of ecological change that the measures involve.

The estimates of the capital input required to raise output to the levels proposed for Zone C, as given in Table 9, are therefore based on rather broad averages. They do, however, give a fairly good indication of the order of magnitude of the capital resources that would need to be channelled into the sector if the production objectives are to be met.

Of the investment requirements for forest industries, expansion of the pulp and paper industry will account for about three quarters of the additional capital inputs, sawmilling around 10 percent and the remainder spread more or less equally between plywood and other wood-based panels.

Assuming a steadily rising rate of investment, this would imply an annual rate of investment in the sector in the years immediately ahead of the order of $500 million, rising to about $1000 million annually toward the end of the plan period. In the present state of the engineering industries in Zone C, much of the equipment required would have to be imported from Zone A or Zone B countries. Thus it may be estimated that somewhere between one tenth and one fifth of the investment in forestry and logging, and about one third of the investment in forest industries, would require foreign exchange, i.e., an aggregate of around $4 000 million over the plan period. Evidently this is a very crude estimate. But the figure is a striking one. The reason for citing it is that it illuminates the real possibilities that exist, in the period ahead, for the establishment of facilities within Zone C to produce certain categories of the plant and equipment that will be needed to bring about the required expansion. Foreign exchange is more likely to prove a limiting factor on expansion than capital availability in general. Thus industries producing capital equipment for the forest and forest industries sector should be strong candidates for consideration within the framework of regional integration plans in Zone C, and also for existing manufacturers in Zones A and B who aim at decentralizing their production facilities in the interests of expanding their markets.

For the production objectives to be achieved, considerable increases in the quantity and quality of the manpower inputs will also be needed. Increasing the supply of professional and technical manpower calls for purpose planning, linked very closely with educational policies and programmes at all levels.

Estimates of the requirements of professional foresters and technicians have been made for Africa and Asia as covered by the regional studies and for the whole of Latin America.

In the African region, it is estimated that the present number of 300 professionals and 1860 technicians will need to be expanded to around 1800 professionals and 9 600 technicians by 1985 in order to manage the forestry and forest industries sector at the level of intensity implied by the production objectives. Latin America, including Central and South America and the Caribbean islands, is estimated to require about 6 500 professionals and 30 000 technicians in 1985, as against 1 500 professionals and 6 500 technicians in 1965. For Asia, the base period strength of 2 500 professionals and 5700 technicians will need to be raised to 5 700 and 28 800 respectively.

For Zone C as a whole, therefore, about four to five times the number of professionals and technicians currently employed in the sector will be needed by 1985, with the exception of Asia where it may be necessary only to double the number with professional training. This exception illustrates one of the most striking features of the current manpower situation: the very uneven distribution of trained manpower between and within regions. Thus, an increase of two to four times on the present staff may suffice in some countries while in others 20 to 40 times the present number will be needed.

So far as the professional level is concerned, these figures need not be daunting. In Zone C (excluding Mainland China) at the present time there are 36 professional forestry schools, with an annual outturn of about 450 forestry graduates. The capacity of most of these schools could be rapidly expanded at no great cost. It will be necessary to establish only a few new schools within the plan period. Currently, professional training facilities within Zone C are supplemented by overseas training. It is estimated that the professional forestry ranks in Zone C are being swelled annually by some 70 foresters returning from training overseas.

A much more important bottleneck is likely to be the dearth of forestry and forest industry technicians at the intermediate level. Indeed, the present imbalance in the structure of the forest services represents one of the greatest impediments to rapid progress. Only recently have many countries in Zone C come to recognize this gap, and plans are already under way for the establishment of many new ranger and technical schools. It is at this level that education and training efforts must be concentrated in the coming years. FAO has presently under preparation a comprehensive study which will show how the professional and technical manpower needs in the forestry sector can be met within the plan period.

It is more difficult to estimate, in terms of other levels of skill or in other professional and technical disciplines such as engineering or chemistry, the manpower that will be required to achieve the production objectives. World average employment to output ratios which have been calculated for the forest industries are not always directly applicable for estimating the manpower requirements of those industries in developing countries. The limited evidence so far analysed indicates that for the logging, sawnwood and plywood industries at least, the labour input could be substantially higher than in the highly mechanized mills of the developed countries. Thus, 3.5 to 4 million additional skilled and semiskilled workers would be required by 1985 in the primary wood-processing industries in Zone C. The corresponding expansion of activities in forestry would require additional workers in the unskilled, and semiskilled categories as well as professional and technical personnel with training other than in forestry.

The 4 million or so professional, technical, skilled and semiskilled workers are, however, only a partial measure of the employment effect. To the additional manpower directly required within the sector should be added the indirect employment effect of the expansion of the sector on wood-based secondary and tertiary industries such as furniture, paper converting, containers, and construction, and in service industries. From the limited evidence available it would appear that an employment) multiplier of 7 to 10 would not be inappropriate for estimating the indirect effect, since the possibilities, involve a large element of new industrial agglomerations rather than the expansion of existing ones. Thus the impact of the expansion of the sector as measured by additional employment opportunities created could be of the order of 30 to 40 :million. In addition, most of the industry creating this employment could be most efficiently located in what are presently rural areas. Achievement of the production objectives would thus make a major contribution to the solution of two of the most pressing social problems in developing countries lack of employment opportunities in the rural areas, and excessive concentration of industrial development in and around the present urban conglomeration.

Requirements for production growth in developing countries

It is not proposed to catalogue all the changes that would be required, at the local, national or international level, to stimulate the required development. Rather, attention will be concentrated on certain basic changes of attitude that must be induced if the full potential of this sector is to be realized. Sufficient experience has accumulated over the last two decades to demonstrate that institutional, structural, and even ideological, considerations currently represent greater obstacles to progress than economic and technical factors.

Fundamental, in many countries, is the continued lack of a coherent forest policy, widely understood and consistently applied. And even though this observation could truthfully apply to many countries outside Zone C, it is in the Zone C countries that the lack is having its most inhibiting effects. It is evident that a public opinion poll conducted among members of governments, politicians and senior civil servants would reveal a variety of attitudes toward the forestry sector. There are those who look upon the forest as an obstacle to agricultural expansion. There are those who regard the forest as a land bank, a reserve to be drawn upon as it becomes necessary to allay land hunger. There are those who see in the forest wealth a capital source whose liquidation can feed development in other sectors. There are those who are primarily conscious of the role the forest can play in soil stability, stream flow regimes, water quality, climatic amelioration and other environmental influences. And there are those who see in the forest the basis for industrialization. All these viewpoints have some validity, and elements of all or most will or should find expression in a coherent forest policy relevant to any given country. But the plain fact is that institutional and structural inadequacies at the present time lead to serious inconsistencies in government actions, inconsistencies that border on the schizophrenic. Inter-ministerial, interdepartmental, federal/ state and central /local conflicts arise, and inadequate machinery exists for reconciling them. Zone C is littered with examples of the disastrous consequences of, and the opportunities lost through, uncoordinated programmes. Timber with potential export value is wasted in land clearing projects; such land clearing schemes as do provide for timber salvage and utilization often allow inadequate time for loggers or for export, markets to absorb the increased supply of logs or for industries to amortize their investments; often land is cleared which is not suited to permanent agriculture, so that not only is the land destined to lie unproductive for long periods, but frustration and misery breed among the settlers; opportunities for harnessing or stabilizing shifting cultivation through combining it with plantation forestry are missed; forest plantation projects are mounted primarily to hang on to reserved lands. without adequate prior study of site suitability and eventual utilization. All these things have happened, many times over; and they continue to happen.

Moreover, they will continue to happen as long as two basic conditions are not fulfilled. The first is that there should be a coherent national forest policy which takes full account of all the goods and services which the forest is capable of rendering, a policy cast within the framework of overall national development;, a policy widely understood so that it can be consistently applied.

The second is that effective machinery should exist for coordinating the policies and actions of all agencies concerned with land use. The appropriate institutions and measures for achieving effectively coordinated land use and economic planning will vary widely from country to country. But until they have been created and activated, development priorities will continue to be frustrated. It has already been made clear in this chapter that in many countries a further alienation of land from forestry is both necessary and desirable. Elsewhere in this study evidence suggests that the technical revolution in agriculture in some countries will progressively release land apt for conversion to forestry. Every major change in land use should be conscious, planned and controlled.

It is perhaps a consequence of the two deficiencies which have just been discussed that forest services in many of the Zone C countries still lack a development orientation. Nearly all the countries in Zone C already have national or state forest services, and many of these have a long and proud tradition. But it must be observed that many of them are inherited from pre-independence times, and are often modelled on western Europe forest services which were designed to cope with problems very different from those which confront a nation endeavouring to mobilize the forestry sector for economic development. In most of the countries where forestry represents a considerable potential, drastic reorganization, combined with a marked strengthening of and new status for the forest service, is a precondition for achieving the objectives proposed for Zone C.

Strengthening does not mean simply numerical expansion; it means also qualitative change. If forestry is to become development oriented, foresters have to become development oriented. And the sad fact is that in the developing countries today even those professional foresters who feel keenly the development responsibility that lies upon them are only too well aware that the training they have received has not fitted them to discharge that responsibility. The traditional structure and philosophy of professional forestry education are changing too slowly for the times in which we live. Here a great responsibility lies on the professional forestry schools in Zone C, many of them recently established. With fewer built-in resistances on accumulated vested interests than in many older forestry schools, they have greater possibilities of modifying curricula and revising teaching methods so as to produce the type of forester that is needed. But the problem is not confined to that stage. Systems of continuing education and reeducation throughout the career stage urgently need to be developed. Training needs to be widened so that other categories of specialists, particularly in forest development economics, become as prominent and influential in determining policies as silviculturists have been in the past.

Only the flow of new men and new ideas can bring about the needed reorientation of forest and forest products research in the developing countries, ensuring that programmes are suitably directed toward the development function. It was perhaps inevitable, for historical reasons, that many research institutions in Zone C should have become pale imitations of their sister institutions in Zones A and B. But it has meant that their programmes have seldom received the rigorous review that would compel them to adapt their priorities to the most urgent and pressing problems confronting forestry development at the national level.

Conclusions

The main features of the world forestry situation as it is likely to be in 1975 and 1985 are fairly well defined. The dynamism which has characterized the demand for processed forest products over the past decade or so will continue. By 1985 world consumption of sawn-wood should have risen by about 45 percent over the base period level and of panel products and paper by over 250 percent. The share of world consumption of processed forest products represented by Zone C consumption will rise appreciably. However, the great bulk of the increase in world consumption will take place in Zones A and B. Supply problems which are already limiting production from domestic resources of broadleaved wood products in Zones A and B will become more severe. This trend will provide openings for many developing countries to increase substantially their foreign exchange earnings from exports of broad-leaved logs, wood chips, sawnwood and plywood, and to some degree of certain grades of pulp.

There are, therefore, very good prospects for many developing countries to develop large and widespread forest-based industrialization programmes to meet rapidly expanding domestic and export demands. World-wide international cooperation can help to find solutions to the problems. But institutional changes, coordination of development programmes within and between countries, and measures for improving the utilization of their existing resources can be put into effect only by the developing countries themselves.

The regional studies on which this chapter is based have clearly shown certain areas where a concentration of effort could yield worthwhile results: increased utilization of secondary species; accelerated resource appraisal; building up of domestic processing facilities; the harmonization of forest and forest industry development plans at the regional or subregional level.

But it is institutional and structural improvements, together with qualitative and quantitative improvements in manpower that represent the key to securing from the forest and forest industries sector the decisive contribution that the sector is capable of making to overall economic growth and rising welfare. Once these have been brought about, other elements will fall easily into place.

PHOTO: PUBLIC POWER CORPORATION, GREECE. The impressive Kremasta dam on the Acheloos river in western Greece is claimed to be the highest earthfill dam in Europe. Kremasta is Greece's largest hydroelectric development in operation with an installed capacity of 437 000 kilowatts. The reservoir forms one of the largest man-made lakes in Europe, covering more than 8000 hectares and holding 4 700 million cubic metres of water. This development is of prime importance to the UNDP/ FAO project now under way which is investigating the possibility of creating a forest industries complex in this area.

It is hoped that considerable investments will follow the completion of the project which supplements an earlier larger project. The FAO Project Manager is W.T. Pound (Canada). Here, one of the project's vehicles is see ascending an extraction road stacked with billets awaiting, transport.