Section 2: Supply of wood materials for housing

FAO FOREST INDUSTRIES AND TRADE DIVISION FORESTRY DEPARTMENT

IN PRESENTING a picture of the supply situation of wood for housing, this paper has two tasks. One is to assess the world's wood resource potential, and the share of this which may go to the housing sector. The second is to highlight the causes and conditions which help or hinder the availability of wood for housing.

A careful evaluation of the wood supply situation is essential if a sound basis for planning future action in the use of wood in building and construction is to be established. Obviously a prospective shortage would encourage housing designs which minimize the need for wood and employ it only in its most efficient forms. At the other extreme, if supplies are likely to be abundant measures to extend its utilization in housing would he stimulated.

The world wood supply situation may defy such neat generalizations, but to plan realistic programmes it is important to know at least toward which of these two extremes the prospects for the supply for housing lie.

The provision of adequate and cheap wood supplies could help to relieve the problems menacing urban planners, and the development of unused wood resources could help the growth of retarded regions. The location of industries and other activities could be more harmoniously spread if, through the use of wood, housing were improved and extended in the vast rural areas of the developing world. Alternatively, the increasing world population could suffer a further decline in overall housing standards if a corresponding increase in wood supply is not achieved by making better use of available forest resources. Immensely divergent wood supply situations certainly do exist, and while some countries use wood extensively others have to restrict its use to technically essential and economically justifiable purposes; yet both groups would make a sound use of resources for reaching housing targets, as well as contributing to world economic development, by aligning wood use to their comparative advantages.

A starting point is to estimate roughly the physical flow capacity of world forests and their production levels, but it is also necessary to know present and probable future utilization patterns, because wood use in housing cannot be considered in isolation.

A global exposition of supply is not meaningful unless placed in a regional perspective, because the distribution of resources is uneven, quantitatively as well as qualitatively. So are requirements, which are not always in harmony with resources in various regions. A spatial assessment is required to bring out any imbalances in regional supply and demand and the consequent impact on international trade, prices of wood and development of wood-processing industries in different areas. In turn. these factors have a bearing on the relationship between the interregional availability of wood and the scope for harnessing the potential to meet world housing needs.

The economic and institutional aspects of wood supply underlie both present and the likely future demand and supply, and the scope for its use for housing and other purposes. Wood supply and consumption trends are closely related to the long-term demographic-economic features of different countries, as well as their ruling costs of wood growing, production and distribution and their capacity to process and to create additional resources. Other important economic factors are availability of labour, skills, capital, foreign exchange and infastructure, the relative prices of various wood and competing and complementary nonwood materials, the location of resources, industries and demand centres, and the international trade pattern. All these need consideration in analysing the effective production and supply of wood for housing.

The analyses for this paper, which has no background papers, will be geared to assessing the volume of wood that could be available for housing in different parts of the world. Availability will be estimated from the extent of forest resources, their state of development and production capacity, and the economic feasibility for extending and intensifying their yield of wood suitable for housing, in relation to demand.

World wood resource potential and production

The world's natural forests are extensive, occupying nearly one third of the world's land area, but about 40 percent are unproductive because of low economic exploitation and lack of industrial infrastructure. Potentially productive forests in many parts of the world are difficult of access and often diverse in composition, and may include trees which are currently unused, especially in the tropics. Man-made forests are insignificant in extent, covering less than 1 percent of land area, but are important as sources of wood because of their high productivity and the fact that they can be created in suitable locations to meet calculated end-product needs.

Natural forests are usually slower growing and economically less productive than man-made forests, which are always amenable to intensive management, but the benefit to society of natural forests cannot be overestimated. They regulate stream flow and are a refuge for wildlife, and above all they contribute to the quality of the environment and are important for recreation.

This paper is concerned with wood production, and attention will be confined to those forests that are or could be potential sources of wood for housing. These represent a little more than half the world's total forest area of about 3 700 million hectares.

NATURAL FORESTS

At present, only part of the world's forest area is utilized, but an appraisal needs to consider all potentially productive forests. Table 1 summarizes world forest resources. It shows the enormous forest wealth of North and Latin America and the U.S.S.R. These three regions have the highest growing stock. Africa has about the same area of forest as North America, but little more than half its growing stock. Types vary from the naturally open savanna of degraded forests in Africa, Asia and the Pacific region to the virgin stocks in large North and Latin American and Russian forests.

TABLE 1. - WORLD FOREST RESOURCES¹

¹ Based on world forest inventory 1963, and subsequent studies. -² Covers unproductive and protection forests not available for wood production - ³ Estimated.

About one third of the world's stocked forest is coniferous, confined largely to temperate areas, with about 45 and 35 percent respectively in the U.S.S.R. and North America. Europe and the Pacific area account for 7 percent between them. Of the broad-leaved forests, about three quarters are in the tropics, mainly in Latin America, west and central Africa, and southeast Asia.

While coniferous forests represent less than one third of the world's forest area, they account for three quarters of industrial wood production. The occurrence of coniferous forests, by and large, coincides with areas where most wood is produced and consumed, both in aggregate as well as per caput, mainly for industrial uses. In fact, their proximity to the heavily populated and economically advanced regions has shaped the traditional pattern and nature of wood production. These areas include North America, the U.S.S.R., Europe and Japan. Across the north of these regions runs a wide belt of dense coniferous forest which covers the greater part of the land area.

Coniferous forests are relatively easy to harvest, handle and process and the larger part of the temperate forests are now in use to a greater or lesser degree, facilitated by extensive road, rail or waterway infrastructure, but they are by no means overexploited. They are better covered by management systems aimed at sustaining their production than in most other parts of the world. Their productive capacity has not yet been exhausted and they still hold areas of old growth, principally in the north and east of the U.S.S.R. and in the west of North America, which remain the great coniferous reserves of the world.

Outside the north temperate zone, broad-leaved tropical woods predominate, the greater part in tropical rain forests, but they have been very little used as they are concentrated in sparsely populated regions at an early stage of development, such as the Amazon basin, west central Africa and insular southeast Asia. The tropical rain forests contain a wide variety of species, often a hundred within a limited forest area, ranging from extremely hard, heavy and slow growing, to very soft, light and quick growing, some suitable for housing and many not. This diversity, combined with their inaccessibility, has hindered harvesting.

Apart from tropical moist deciduous forests containing valuable broad-leaved timbers such as teak, which are rather limited in extent except in Asia, most other tropical and subtropical forests are dry, open woodlands with very low volumes per hectare, as in the savanna areas. Most of their wood is in small sizes and only a few species are commercially useful for such purposes as large-scale housing. Yet their extent is too big to ignore for they could be improved if investment resources, skills and institutions were available. In Africa (outside west Africa) about three quarters of total forest area is of the sparse low-yielding type, and in Latin America and south Asia wide areas are savanna.

Apart from poor content, large parts of the world have little, if any, forest at all. This is so in most of northern Africa, west and south Asia, and China. These areas, with about one third of the world's population, are consequently severely restricted in wood production and consumption, and have a great need for man-made forests.

MAN-MADE FORESTS

The creation of man-made forests could alleviate wood shortage, yet most of the planting has been outside the areas with least resources. Only around 0.5 million of an estimated world total of 80 million hectares of man-made forests are in northern Africa and west Asia.

Table 2 records the reported extent of man-made forests, and also estimates of true extent. Of nearly 34 million hectares of reported total area, over 26 million are in North America, Europe, Oceania, Japan and southern Africa. Many of their plantations have gone into production, yielding, for instance, more than half the wood requirements in South Africa and New Zealand. However, it is estimated that unreported areas in the U.S.S.R. and China account for more than half of the true world total.

In tropical regions, man-made forests are mostly of recent origin, but conditions there are particularly favourable for fast growth; the mean annual increment of coniferous plantations ranges from 15 to 30 cubic metres per hectare, compared with only 2 to 5 cubic metres in temperate zones. The pattern for broad-leaved species is similar.

Many plantations are for pulpwood, but in developing countries they can be a major source of general purpose wood, as in Chile and Kenya. A feature of planting in the tropics has been a swing to conifers-especially pines-probably because of their utility for construction and joinery work as well as pulping.

Even if man-made forests contribute largely to pulpwood production, many of them are capable of being grown to longer rotations, quickly enough to produce cheap construction timber. In the tropics, with volume increments ten times those of unimproved natural forest, they are advantageous for augmenting supplies in timber deficient area. Even when used solely for pulpwood or fuelwood they can ease pressure on natural forests and enable these to supply more wood for housing.

TABLE 2.-THE WORLD'S MAN-MADE FORESTS

	Estimated area, 1965	Reported area 1965
		Total	Conifers	Non-conifers
	Million hectares
North America	10.65	10.65	9.82	0.83
Europe	10	7.34	4.97	2.37
U.S.S.R.	11	-	-	-
Japan	7	7.09	6.38	0.71
Oceania (developed)	0.80	0.76	0.72	0.04
Latin America	1.60	1.47	0.49	0.98
Africa	2.4	1.76	0.68	1.08
Asia	37	5.16	-	-
of which: Centrally planned economies	31	-	-	-
WORLD	80.4	34	(23)	(6)

WOOD PRODUCTION

About 1200 million cubic metres of industrial wood and 900 million cubic metres of fuelwood are removed annually in the world, according to statistical reports. There are also unrecorded removals, mostly for fuelwood, but for other purposes too, including housing, in Asia, Africa and Latin America (Table 3).

Nearly all the industrial wood removals originate in the temperate, predominantly conifer, forest regions of North America, Europe and the U.S.S.R., and more than four fifths are used within these regions. Coniferous wood accounts for 80 percent of these removals, but for only a little more than 30 percent in the developing countries.

In developed regions about 60 percent of industrial wood production is in sawlogs and veneer logs. This proportion reaches 65 percent in developing regions.

The trend of world wood production over the last two decades is shown in Table 4. In this period it has grown by 475 million cubic metres, or 28 percent. Of this increase, developed countries accounted for nearly 190 million cubic metres, and developing countries for nearly 290 million cubic metres. Fuelwood appears to account for two thirds of volume increase in developing regions, but in fact better statistical coverage is responsible for a considerable share of this figure. The apparently modest increase of total removals in developed regions is explained by a sizable decline in fuelwood production. Thus. increases in industrial wood removals have been much larger in developed than in developing regions, amounting to more than 300 million cubic metres, or nearly four fifths of total world increase.

TABLE 3. - INDUSTRIAL WOOD REMOVALS, 1968

¹Excluding centrally planned Asian countries.

TABLE 4. - WORLD WOOD REMOVALS - DISTRIBUTION AND CHANGES, 1950 52 AND 1967-69

The absolute increase in industrial roundwood production has been highest in the U.S.S.R. But, quantitatively, North America remains the leading region, contributing well over one third of world production. The U.S.S.R., Africa, Asia and the Pacific region show the largest proportional increases in industrial wood removals. Africa has more than doubled its figures, with Asia and the Pacific region following closely. In spite of greater rates of increase in developing countries, however, their share in industrial wood production continues to be modest.

Table 5 shows the changes between 1960-62 and 196769 in the industrial wood production pattern, which overall has grown at the rate of less than 2 percent per year. The rate has been higher in developing countries, averaging about 5 percent per year. But the bulk originates in developed countries which contributed 123 million cubic metres, or more than two thirds of total increase. Following existing trends, therefore, the world will continue to rely heavily on temperate forest resources for industrial wood.

The growth rate of pulpwood and other industrial wood is higher than that of sawlogs. Nevertheless, logs are by far the largest component (three fifths of the total) and, quantitatively, show the biggest increase -over 70 million cubic metres-during the last decade, with developing countries contributing significantly. In these countries, sawlog production has increased more than three times as much as pulpwood and other industrial wood production, while in developed countries the absolute increases for sawlogs and pulpwood have been about the same, while removals of pitprops have been declining.

The high growth rate for pulpwood in developed countries implies that a larger share of the removals is in smaller wood. This is particularly important where, as in Europe, much of any additional output has to come from the intensification of forest production. Also important in this sense has been the rising share of broad-leaved woods in areas of mixed forests. This is marked in Europe and Japan. In North America and the U.S.S.R. too, more broad-leaved pulpwood is being produced. In developing countries growth has not necessarily been the outcome of an intensification of utilization, but has been based largely on the export of quality tropical timbers in the form of large logs. This is particularly the case in western Africa and insular southeast Asia, where industrial production growth was high.

PRIMARY AND SECONDARY WOOD SPECIES

Many references are made in this paper to the so-called secondary species (which should properly be referred to as lesser known or lesser used species). In tropical forests, especially rain forest, there is great variety and many species are not considered merchantable so that only a small increment is utilized, even in relatively accessible forests. Obviously, if more species are harvested, supplies from existing tropical resources will increase, and an examination of possible causes of and solutions to problems may be useful.

A first cause may lie in their properties: density, natural durability (insect resistance), seasoning and wood-working properties. High silica content and interlocked grain are held against many woods but these difficulties are reduced through the use of suitable cutting tools. The higher average lignin contents in tropical species have militated against their use in pulping but utilization of temperate broad-leaved species has now expanded considerably through technological development and it seems that tropical species too, in appropriate mixtures, could be suitable for pulp products.

Several secondary species have been found commercially suitable after proper trial and testing, but are not widely accepted because of established consumer tastes. The classification of tropical woods into primary and other species has historical origins. Only species such as true mahogany, African mahogany, rosewood, teak and greenheart were sought after for export because of their durability, hardness, colour and figure of grain, and this exploitation pattern continues in the tropical forests. However, technological progress, combined with demand pressures and depletions, has widened the range. Species now increasingly used are lauan, meranti, seraya, okoume, obeche and utile, also in the manufacture of panel products. Lauan from the Philippines and southeast Asia comprises nearly 65 percent of broad-leaved wood imports into the United States, but in European markets new species are relatively less easy to introduce, for reputation commands a high premium and buyers need to be confident of both technical suitability and continuity of supply.

This is not to say that the occurrence of merchantable and nonmerchantable woods in tropical forests is a myth. But such a classification need not remain static, nor is it universally applicable.

Many secondary tropical species may contribute to housing wood supplies if adequate facilities for the requisite preservative treatment are developed. The outlook has become promising in parts of Malaysia, which has about 50 treatment plants. Less naturally durable hardwoods, such as chengal (Balanocarpus heimii), balau (Shorea), resak (vatica) are now used there, and more medium-weight hardwoods, such as keriun (Dipterocarpus) and kempas (Koompassia malacenis), are being used after treatment.

TABLE 5. - INDUSTRIAL WOOD REMOVALS PATTERN, 1960-2 AND 1967-69

Since species differ in their suitability for various housing uses, proper grading would greatly help their fuller utilization, as will the steady trend for increased domestic processing.

Some of the secondary species are classed as such because they occur preponderantly in small sizes unsuitable at present for the lumber and some wood panel industries. Here again, difficulties could be reduced if processing industries in the tropics could take advantage of new techniques better adapted to local conditions. Even in the form of lumber, laminated wood products of diverse species can be made to suit different requirements, but this involves proper stress grading and other developments in such fields as glueing. Thus, a wider use of the so-called secondary species is possible. Experimentation and innovation should develop new techniques and adapt those existing in developed countries. Much less attention has been paid in the developing countries to these aspects than to increasing the proportion of marketable species in the forest. In certain areas it may be more justifiable to create man-made forests of desired species and sizes rather than aim at the lengthy and often expensive process of natural regeneration of only the so-called primary species.

Wood-utilization pattern

The world wood-utilization pattern has undergone significant changes. Foremost is the large increase in the quantity of industrial wood consumed, which rose from about 800 million cubic metres in 1950 to about 1 200 million in 1968. Secondly, there has been a steady shift from unprocessed to processed products, and from solid to reconstituted products such as particle board and fibreboard. A related development is the widening utilization of broad-leaved species for sawnwood as well as reconstituted products. Thirdly, the shifts in wood-utilization pattern are more spectacular, and the additional consumption is more concentrated in economically advanced countries, which accounted for more than two thirds of world growth in consumption between 1960-62 and 1967-69.

The distinction between developed and developing countries is useful as much for a discussion of wood supply, consumption and processing as for general industrial and economic growth. The levels of income, industrial structure, and the rates of population growth (and often per caput income growth) are so contrasting that they go a long way toward explaining differences in intensity and changes in their wood-utilization patterns.

Broadly speaking, North America, Europe, the U.S.S.R., Japan, Australia, New Zealand, South Africa and Israel comprise the developed regions and countries. South Africa and Israel, although classified as industrialized countries, have for the purpose of this paper been included in their respective geographical regions. The rest of the world, including the countries of Latin America, Africa and Asia, is developing.

The developing countries hold about two thirds of the world population, but the bulk of the world's gross domestic product (GDP) originates in the developed countries, where the purchasing power is far greater with an average GDP per caput of about U.S.$1 500, compared with less than $150 in the developing countries. The classification adopted in this paper is as follows:

	Population (millions)	Percent of population
Developed countries	1 063.6	30
EC CL I1	(721.7)	(20)	North America, western Europe, Japan, Oceania
EC CL III	(341.9)	(10)	Eastern Europe, U.S.S.R.
Developing countries	2 504.0	70
EC CL II	(1 655.3)	(46)	Latin America, Africa, Asia
EC CL III	(848.7)	(24)	Asia (continental)
World	3 567.6	100

¹ EC CL I = developed market economy countries; EC CL II = developing countries; EC CL III = planned economy countries, developed and developing.

WOOD UTILIZATION AND HOUSING

Table 6 gives the 1968 world consumption pattern of sawnwood and wood-based panels. As a comparison, Table 7 gives the figures for wood used in housing in 1968.

Sawnwood remains, quantitatively, by far the most important form of wood use. At present, sawnwood in roundwood equivalents accounts for 88 percent of wood products used in the world, as against 9 percent for plywood (including veneer sheets) and 3 percent for the other wood-based panels, particle board and fibre-board. An analysis by regions, however, shows clearly the trends occurring under the influence of economic development, and in which increased efficiency of wood use and rising labour and other costs influence the utilization pattern.

In the developed regions sawnwood accounts for 87 percent of all processed wood use, plywood and veneers almost 10 percent, and the other wood-based panels 3 percent. But a further significant distinction can be made by separating U.S.S.R. figures, where sawnwood accounts for 96 percent of all processed wood use. This leaves a wood product utilization pattern for the developed market economy countries of 83 percent for sawnwood. and 17 percent for wood-based panels

As expected, the use of wood-based panels is highest in North America, where they account for 20 percent of total processed wood use; in Europe, mainly because of the fast development of particle board, they already account for 15 percent. In Japan, and developed Oceania, sawnwood is still relatively more important and represents 89 percent of wood utilization.

In the developing countries, low wages and a low level of industrialization have kept the use of wood-based panels low. At present they account for only 8 percent. Sawnwood accounts respectively for 88, 90 and 94 percent of all processed wood used in Africa, Latin America and Asia (including China). However, the weakness of consumption data does not allow meaningful conclusions to be drawn, except that utilization of the more highly processed forms of wood lags behind in these regions.

What is striking, however, is that 88 percent of all processed wood is consumed by the 30 percent of world population living in the developed regions, even though almost 60 percent of the world's growing stock is to be found in the developing regions. Admittedly, distribution of forest areas is very uneven, especially in the developing world. but it nevertheless remains that the wood-utilization pattern is mainly determined by the economic possibilities of getting the product from the forest and mill to the consumer.

Examining the use of wood for housing as given in Table 7 (in roundwood equivalents), it is interesting to note that the pattern follows closely the total wood-use pattern, at least for the developed regions where the respective total use percentages for sawnwood, plywood and other wood-based panels are 87, 9 and 4 percent.

TABLE 6. - SAWNWOOD AND WOOD-BASED PANELS: TOTAL CONSUMPTION, 1968

	Sawnwood	Plywood and veneers	Other wood-based panels	Total
	Million cubic metres real product measure
North America	108.3	17.4	7.2	132.9
Europe	84.1	6.2	12.6	102.9
U.S.S.R.	103.1	2.1	1.9	107.1
Japan	41.8	4.6	0.9	47.3
Oceania (developed)	5.6	0.2	0.5	6.3
TOTAL DEVELOPED REGIONS	342.9	30.5	23.1	396.5
Latin America.	13.4	0.8	0.5	14.7
Africa	4.2	0.3	0.2	4.7
Asia¹	28.0	0.9	0.7	29.6
TOTAL DEVELOPING REGIONS	45.6	2.0	1.4	49.0
TOTAL WORLD	388.5	32.5	24.5	445.5
	Million cubic metres roundwood equivalent
Developed regions.	598.8	67.1	23.1	680.0
Developing regions	86.6	44	2.8	93.8
TOTAL WORLD	676.4	71.5	25.9	773.8

¹Including China.

TABLE 7. - WOOD FOR HOUSING: PRODUCTION AND UTILIZATION, 1968

	Production	Consumption	Balance
	Million cubic metres (roundwood equivalent)
DEVELOPED COUNTRIES
Sawn softwood	204.5	202.2	+ 2.3
Sawn hardwood	46.1	48.2	- 2.1
Plywood and veneers	25.2	27.5	- 2.3
Other wood-based panels	11.0	11.0	-
TOTAL DEVELOPED COUNTRIES	286.8	288.9	- 2.1
DEVELOPING COUNTIES
Latin America
Sawn softwood	6.5	6.3	+ 0.2
Sawn hardwood	7.2	6.9	+ 0.3
Plywood and veneers	0.7	0.7	-
Other wood-based panels	0.2	0.2	-
TOTAL LATIN AMERICA	14.6	14.1	+ 0.5
Africa
Sawn softwood	1.4	2.3	- 0.9
Sawn hardwood	2.5	1.9	+ 0.6
Plywood and veneers	0.2	0.2	-
Other wood-based panels	0.1	0.1	-
TOTAL AFRICA.	4.2	4.5	- 0.3
Asia ¹
Sawn softwood	9.8	13.7	- 3.9
Sawn hardwood	17.5	13.2	+ 4 3
Plywood and veneers	1.8	0.7	+ 1.1
Other wood-based panels	0.3	0.3	-
TOTAL ASIA	29.4	27.9	+ 1.5
ALL DEVELOPING COUNTRIES
Sawn softwood.	17.7	22.3	- 4.6.
Sawn hardwood	27.2	22.0	+ 5.2
Plywood and veneers	2.7	1.6	+ 1.1
Other wood-based panels	0.6	0.6	-
TOTAL DEVELOPING COUNTRIES	48.2	46.5	+ 1.7
WORLD SUMMARY
Sawn softwood	222.2	224.5	-
Sawn hardwood.	335.0	70.2	-
Plywood and veneers	27.9	29.1	-
Other wood-based panels	11.6	11.6	-
TOTAL WORLD	335.0	335.4	-

¹Including China.

For the developing countries the proportion of sawnwood used for housing is 96 percent, as against 92 percent for total use of processed wood but, as stated before, this figure may not be fully significant.

Another conclusion which can be drawn from the comparison of Tables 6 and 7 is that of all sawnwood used 42 percent goes to housing in the developed part of the world, as against 52 percent in the developing world. The respective figures for plywood are 45 and 34 percent, those for wood-based panels 43 and 18 percent. At world level, this leads to the following figures: 44 percent for sawnwood, 44 percent for plywood and 41 percent for other wood-based panels. Generalizing even further: 44 percent of all processed wood in the world is at present used for housing, respectively 43 percent and 50 percent in the developed and the developing regions, and this represented in 1967-69 a total of 335 million cubic metres (in roundwood equivalents), of which 289 million cubic metres were used in the developed world, and 46 million cubic metres in the developing world.

This pattern of consumption is in line with the characteristics and availability of the different products. In general, sawnwood use per caput is related to GDP per caput, but its use declines as incomes rise. This is largely attributable to panel products and nonwood materials, which replace sawnwood because of technological and other advantages, including ease in handling, an important factor due to rising labour costs in the developed countries.

The demand for panel products is still expanding rapidly, and the advantages of their low-cost installation are of significance in industrially advanced countries in view of their low labour content in manufacture and usage. Even in some developing countries panel products can become popular for housing, because of the lack of readily available sawnwood and their more suitable properties such as homogeneity and pest resistance. Furthermore, particle board and fibreboard can be manufactured from low-grade wood, unsuitable or less suitable for sawnwood processing. For these reasons, thick panel products-particle board, blackboard and softwood plywood, in particular-will remain important competitors of sawnwood.

ROUNDWOOD

Roundwood is unprocessed wood, mainly used in rural housing, and for pitprops, poles and fencing. Unlike other industrial wood products, the share of developing countries in world consumption is high. With the bulk of population living in rural areas, this share is likely to continue growing for a long time, although at a slower rate.

The slow rate of increase in the use of wood in the round for housing is explained by the fact that with rising incomes it is progressively replaced as the principal building material by processed materials, and its use persists only in single, traditional constructions. For these purposes, poles will remain an important and widely used building material. The overall effect is that the growth in consumption in developing countries, difficult as it may be to assess in absolute terms, may still continue for a considerable time.

Economics of housing wood products supplies

A chain of activities is involved in providing wood products for housing, covering harvesting and logging, processing, marketing and distribution. This system involves forest owners and managers, loggers, transporters, sawmillers and other wood processors, financiers, traders and house builders. In market economy countries the business is conducted largely for profit. In the centrally planned economies the goal is to achieve such levels of production at different stages in the chain that end product targets are met but geared to minimize costs.

Cost minimization and profit maximization can be two sides of the same coin. The rationale for effecting wood supplies should not be dissimilar: maximizing human welfare through the use of available resources is tantamount to efficiency in wood production.

RENEWABILITY OF WOOD RESOURCES

Timber stands are a renewable natural resource which can be produced and used in perpetuity. With judicious management, therefore, unlike stocks of minerals and other nonrenewables, they need not be depleted through use.

Different units of wood raw material as a flow resource become available at different units of time, and offer little scope for substitution between time periods. That is, the flows not extracted in the past would not be available in the future. Neglect over very long periods of the world's virgin forests has not added to wood inventories, as there may be no net increment since old trees grow slowly, and gross increment is annulled through mortality and other losses as these forests reach their ecological equilibrium. Consequently. only by drawing upon these resources to meet housing and other needs can they be made productive. Forests in the Amazon zone and eastern U.S.S.R. are more akin to stock than to renewing resources. They can discharge flows only after they are set into production, but if they were to be mined like coal they could not play the characteristic role of a renewable resource.

At first it might appear that wood production should conform to the net growth increment under a sustained wood yield policy, but rigid, periodically sustained production is unsuitable in relation to ever-shifting demands and pressures on resources. The concept of sustained wood supplies is nevertheless useful as a starting point from which to develop circumspectly, keeping in mind the long-term trends of cost and demand. Establishing production at a level which perpetuates the physical balance is unhelpful if unrelated to human needs. The replenishment rate can be enhanced by planting fast-growing trees and replacing unproductive forests, rejuvenating old forests through cutting, and reducing wood losses. In other words, net growth can be much improved by full utilization of the resource potential.

Because of the time involved in renewing wood resources, however, the supply situation in the distant future appears fraught with uncertainty. But the prospects of renewability permit society to avoid scarcity and depletion.

PROCUREMENT COST AND PRICE RELATIONSHIPS

The use of wood for housing is not determined merely by resource potential. The cost, or effort, at which wood can be procured is a major factor. If wood is cheap more will be used. Therefore, an essential feature of the supply situation is the cost of production. There are two major elements in this-the cost of the raw material and the cost of its processing. Whether wood is cheap or not will depend on the ease with which it is harvested and transported to processing units, and the efficiency of processing and distribution.

Many of the world's forests potentially capable of supplying wood raw material for housing are not in use because of economic inaccessibility. They could be developed, but at a price. Whether the price is worthwhile depends on returns to investment in forest development vis-á-vis the other sectors of the economy, and this is a resource-allocation decision. Unused potentially productive forests have Do intrinsic value. They can only be used in combination with other production factors such as skilled labour and capital, which are scarce, and their use should be justified by the price of the commodities extracted.

Forests already in use are different. Investment has been made for their development. and the standing timber is capital which could be released for economic ends. Therefore standing timber in such forests has a value, and every cubic metre extracted must be evaluated in the standing form. Besides the price for standing timber, there are many more cost components which are shaped to a large extent by: the composition and constitution of the timber stands; the location of forests; the terrain, and lines of communication.

Forests composed of fewer species with similar characteristics and uniformly sized trees can be worked intensively. Larger volumes can be logged per unit area with the advantage of scale and scope for mechanization. Forests with only few of their numerous species merchantable entail more extensive working, making the cost higher and perhaps prohibitive.

The location of forests is an important factor because the bulkiness of the wood makes its transport over long distances uneconomic, except where this is warranted by the value of the species. Nearness to industrial centres not only cuts the cost of transportation, but also provides access to ready markets. Location also affects costs of transporting and housing labour, rations and implements.

Good lines of communication in and around a forest facilitate lower costs. In mountainous terrain, however, the density of forest roads may be lower because it is possible to roll and skid logs over snow or float them in water chutes. Skyline cranes and gravity cableways are also easy to operate in mountainous zones. In some tropical forests, costs are high because dense undergrowth has to be constantly kept back, and because of heavy rains and marshy conditions.

These factors are illustrated by the contrasting levels of worked wood supplies obtained from temperate coniferous and tropical broad-leaved forests. The former are far more economically accessible, which encourages intensive commercial production in spite of modest growing stock volumes or rates of growth. This means that the bigger contribution of temperate forests to the world wood supply comes from their fuller utilization thanks to lower production costs.

Economic accessibility, however, is relative, and changes with economic development. Rising forest product prices or decreased harvesting, transportation or utilization costs can make accessible forests which were previously out of reach. Conversely, falling prices or rising costs can reduce economic accessibility. The exodus of rural populations in many European countries has reduced forest labour, aggravating the pressure of rising wages on forest operations in most high-income countries, and consequently making economic accessibility largely dependent on improved productivity.

But there remain very large areas, even in temperate regions, where accessibility is first and foremost a question of providing a transportation network. In the U.S.S.R. heavy investments are now being made to open up immense forests in the north and east of the country, and large forest areas in the west and north of Canada are also likely to be brought into use by the development of communications.

In Africa, Asia and Latin America, the need to extend physical accessibility assumes greater importance. Failure to use the huge forests of Latin America is largely due to lack of access, but now permanent roads have been extended so that the situation is improving. In Africa there is a need, as forests become worked out, to extend the transportation network. Development of the rich forest resources of Gabon and Cameroon is likely to be facilitated by the large north-south highway. In southeast Asia over 1 million hectares have been made accessible during the last decade through improvements in transportation. Coupled with recent investments in logging and large-scale leasing of forests, these improved communications will enhance the supply of wood from these forests.

The cost of transport may comprise as much as 80 percent of the total costs of wood procurement. Another related feature is that forest operations are labour intensive, and in many parts of the world procurement costs are rising partly because labour productivity has not grown fast enough to offset rising wage rates, particularly in the developed countries where attention has already been devoted to labour-saving techniques. In the developing countries, however, the scope for cost reduction through increased productivity is still immense. But, socio-economically, forest working could advantageously remain labour-intensive, so that high entrepreneurial costs may be transmitted to consumers. The major avenue for cost reduction of wood raw material, therefore, is the alleviation of physical inaccessibility through the optimization of infrastructure.

Physical accessibility, however, is not the only factor involved in the extension of forest working. As prices rise, it becomes economical to tap resources not previously in demand. Recent trends in this direction are likely to continue in view of the expanding demand for wood forecast, and may gain momentum through the development of the tropical economies. Most forest-rich developing countries are increasingly recognizing the contribution that their wood resources could make to the accumulation of productive capital, earning of foreign exchange, diversification of the economy and employment of surplus rural manpower. This should provoke a faster development of tropical wood resources. Processing industries are also likely to receive a stimulus, the lack of which has been hampering the availability of processed wood products in the developing countries. The establishment and modernization of processing facilities will reduce the cost of wood end products, and of particular importance for housing are the sawmilling and panel products industries.

STRUCTURE AND ECONOMICS OF THE PROCESSING INDUSTRY

The sawmilling industry utilizes approximately two thirds of the wood raw material processed industrially, and it is developing slowly. Panel products industries are growing very fast, but are still small by comparison. Sawmilling produces a much lower value of product per cubic metre of raw material but has certain advantages which make its establishment easy at the earlier stages of development, especially in forest-rich areas. It employs less capital and foreign exchange compared with the other primary forest industries. It does not need much skill and can be competitive on a relatively small scale. Consequently, almost every country supports some measure of sawmilling activity, and sawnwood supplies should be easily available in areas with suitable raw material resources.

The wood supply aspect is a more important constraint in the provision of adequate sawnwood for housing than is the actual processing. This is because costs of sawlogs delivered to the mill can account for about two thirds of total production costs. Nevertheless, certain aspects of sawmilling need consideration for cost minimization. Foremost is the location of mills. This requires constant review to match changes in supply sources on the one hand, and centres of demand on the other, to keep in check the rise of transportation costs. In the U.S.S.R., for instance, there was a growing divergence between the concentration of sawmilling capacity in the west and south of the country, and of the remaining reserves of timber in the north and east, but this imbalance is being rectified through a very large capacity expansion in the north and east. Locational adjustments are fairly easy because of the usually low capital outlay. In many areas it is useful to introduce portable sawmills which can be shifted from one logging area to another. An alternative is hand-sawing, which accounts for about half the sawnwood production in some Asian and African countries, and economizes on the use of scarce resources while using large quantities of relatively abundant and cheap labour.

The size of sawmills is not such a decisive factor as in other wood processing industries. But in advanced countries with high labour costs, economies of scale assume importance, especially when larger mills can be integrated with industries using wood residues. However, many large mills may lose the advantage of economies of scale because of increased procurement costs.

Many mills are too small for mechanization and automation to be economical. Large mills using labor-saving equipment are practical in areas with high labour costs, but in the developing countries the competitive advantages of small well-distributed units dependent on high labour input are likely to continue. But when big and concentrated sawlog resources are to be tapped' especially for export, larger mills with mechanical handling equipment are advantageous even in labour-surplus economies.

Sawmilling costs are largely determined by the type of wood processed. Conifers provide a concentrated, homogeneous supply of uniform logs of small to medium size which can be mechanically handled and sawn to standard sizes. At the other extreme, virgin stands of tropical hardwoods produce a low area yield of commercial woods in large, unevenly sized logs, which must be individually handled and sawn. These differences markedly affect the cost structure in terms of both raw material and processing.

Pulping residues is a means of reducing processing costs, but this involves integration with capital-intensive pulping facilities. However, sawnwood costs could be reduced if conversion losses are minimized, and this is easier in wood-deficient developing regions where lower grades of sawnwood are also in demand.

Precise figures are not available, but the number of sawmills in the world is very large, and there is an extremely wide range in sawmill sizes. Wood-based panel industries also vary in size and structure, but not to the same extent. They are more capital intensive, and production standards are higher. They are concentrated in the developed countries' six of which (Canada, France, the Federal Republic of Germany, Japan, the United States and the U.S.S.R.) accounted for over two thirds of the world output of 46 million metric tons in 1969. An overall increase of 16 percent was expected between 1969 and 1971. Such vigorous growth contrasts with that of the sawmilling industry.

Of the three panel products, plywood represents slightly over half the total capacity. In Asia, including Japan. it accounts for 87 percent, but in Europe and Oceania only about a quarter. In these two regions, particle board and fibreboard respectively contribute the major shares. The three products combined are produced in the largest quantities in North America, which has about 40 percent of world production capacity. Europe's share is likely to move closer to that of North America. Asia is third and steadily improving. The combined share of the U.S.S.R., Latin America, Africa and Oceania is unlikely to change much from the present 12 percent. although expansion is likely, in the U.S.S.R. in particular.

The most important economic element in the plywood industry is again the cost of raw material. This is reflected in the larger share of coniferous wood. Over 85 percent in North America is softwood plywood, where processing plants have a capacity of 47 000 cubic metres per year. Even in Latin America more than half the production is softwood plywood, because the region's forests, although predominantly broad-leaved, are largely inaccessible.

In Africa, broad-leaved plywood and veneer manufacture is the mainstay, although conifer-based plants exist in some countries, such as Ethiopia and Morocco. In Asia, both softwood and hardwood plywood are manufactured. In Japan, a 40 percent increase in production capacity occurred between 1967 and 1969, raising it to 7 million cubic metres. In Europe, almost 98 percent of the 4 million cubic metres production is hardwood plywood, based on valuable temperate species such as oak and beech and an increasing quantity of imported tropical hardwoods.

Traditionally it is the most exacting of the wood-using industries in its wood requirements, but in recent years the range of species has widened and for many of the utility grade plywoods raw material requirements are less rigorous. Processing developments have also brought into use species available only in small diameters. These give a lower percentage yield and require more working hours per unit output, but the advantage lies in their low cost. However, the bulk of world production is still based on the few species-such as Douglas fir and hardwoods -that satisfy requirements for large size and high quality.

Large mills have come to depend increasingly on imported logs, and much of the expansion has been located near ports. Thus the plywood industry is heavily dependent upon and influenced by trade in raw materials and products. Excluding North America and the U.S.S.R., about a quarter of world plywood production was exported, and a large proportion is made from imported logs.

Small plywood mills are likely to continue in wood-rich, low-wage countries, but difficulties arise because of high glue costs, and a product of variable quality which does not meet export standards. The yield in plywood manufacture is fairly low, losses in conversion amounting to from 50 to 70 percent and, unless economic outlets can be found for residues, longer transportation distances for logs can rapidly increase production costs. Procurement problems are also growing in the tropical countries supplying veneer logs to the world market, and the costs of importing into Europe have been rising steeply.

Fibreboard and particle board industries have an outstanding advantage in the uniformity of quality that can be produced from low-grade materials including wood residues and small roundwood. Thus, their overall utilization of raw material is more efficient. Despite this, in many countries they face intensifying competition for raw materials from me pulp and paper industry, so that costs are rising. Attention has consequently been directed to limiting other costs, and economies of scale are an important factor here.

The fibreboard industry exhibits appreciably higher economies of scale and capital intensiveness than the particle board industry. Average fibreboard plant production capacities vary: 33 000 metric tons in Europe. 54 000 metric tons in North America, 22 000 metric tons in Latin America and 11600 metric tons in Asia (excluding Japan). The respective average capacities for particle board are lower by 40 percent or more in these regions. However, the trend is toward expansion per unit in both cases. Smaller mills, especially of particle board, are found in developing countries such as India, Ivory Coast, Somalia, Tanzania, Uganda and Zaire. They operate under tariff protection against foreign products. or are oriented to smaller domestic markets with limited competition for raw material and from nonwood panel products. Competitive pressures are therefore less than in countries which have much larger plants, or export-oriented industries as in Taiwan and me Republic of Korea.

MARKETING AND DISTRIBUTION

Wood for housing is generally grown a long way from population centres. Therefore, the two distinct features in its marketing are first to get raw material to me processing plants, and then to the ultimate consumer. The former involves collecting wood from wide areas of forest. This problem is immense in developing countries with tropical forests, where me infrastructure is often insufficient.

Once the raw materials have been sawn, or converted into panel products, the problem of distribution may be relatively simple, because wholesalers and retailers are in fairly close contact with consumers and can arrange supplies from stocks commensurable with demand.

Marketing as a mechanism of exchange and communication of information can have a significant impact on the availability of wood housing products. Apart from promoting their use in areas rich in wood resources, it could help to augment supplies in deficit areas. One function is to adjust wood flows through stockholding, so that supply and demand are equilibrated when a low demand period coincides with peak production. This is important because production from the forest is seasonal, involving problems of storage, inventory control, deterioration, location and turnover. All add to costs, particularly because lumber is bulky, and difficult to store for long periods without deterioration, especially in the tropics.

Another important aspect is the accuracy and speed with which marketing institutions translate consumer requirements, so that producers can reorient their production goals. Not only that, wood growers and processors need to classify and grade their products. In this respect, the location of sources in relation to markets is an important element in determining the suitability for housing of the species, forms, sizes and soundness of standing trees and logs. Logs and products of lower quality than usual for sawmilling are accepted from forests located near markets, and in urban centres in many developing countries even off-cuts and lesser known species are needed for housing Marketing organizations could thus increase effective supplies for domestic use and export higher grades. To achieve this, grading needs to be improved considerably, and prices realigned, to take advantage of consumer tastes and incomes at home and abroad.

Efficient grading would increase the uniformity of wood housing products for different uses. Although it would add to the cost, the consequent greater homogeneity of individual grades could assist in the fuller utilization of accessible resources. Through the price gradient, the use of high-quality material would be reduced where the lower quality product is satisfactory. The availability of a reliable flow of recognized uniform grades of quality is most important for the successful development of a rational use of wood and wood products.

These and other marketing aspects are relevant to the future prospects of wood use in housing. The popularity of substitute materials is due to the aggressive marketing techniques of the industries concerned. It is difficult for wood growers themselves to influence directly consumer demand but they are, nevertheless, involved and an answer may lie in the integration of growing, harvesting and processing into end-use products.

The flow of wood and wood products from the forest to the ultimate consumer, especially in traditional form and in international trade, has long been complicated by the many handlers involved, usually with separate interests-forest operators, sawmillers, exporters, agents, importers, retail merchants and builders, each taking a margin of profit, which together with the costs of successive transporting handling, storing, sorting, and sometimes further processing, as well as financing, all accumulate in the final price to the user.

Some outstanding efforts, however. have been made in recent years in Europe and North America to achieve overall economies by the integration of these different functions and the merging of interests, combined with new techniques such as packaging and container traffic and other improved handling methods; the use of bull: sea carriers and modern terminal facilities; and the speeding of flow to reduce stockholding costs.

An ultimate marketing and distribution structure has yet to emerge from these ventures, and no doubt varying systems to meet different needs will continue to operate, but it is important that the competitiveness of wood products in their various market sectors-especially housing-be maintained and improved by the timely introduction of better manufacturing, marketing and movement techniques. This calls for constant comparisons by the relevant organizations with the structures and conditions prevailing in the competing product industries in order to quickly identify any areas of disadvantage.

INTERNATIONAL TRADE

The dominant position of sawnwood in international trade in wood products, despite its relatively slow rate of expansion, is shown by the figures given in Table 8.

Increases in roundwood and, to a lesser extent, sawnwood unit values reflect rising demand and the higher costs of additional log supplies from less accessible resources, as well as increased labour costs. Improvement in the average quality of exports may also have contributed. Logging is labour intensive, and productivity increases in both logging and sawmilling have fallen behind wage increases. Other important reasons are the bulkiness of roundwood and sawnwood. longer transport distances for logs, and the largely interregional nature of their trade. Thus, the share of freight for industrial roundwood is the highest-an average of 30 percent of the c.i.f. value.

The value index for panels during the last decade has hardly kept pace with their quantitative index because prices have been under considerable pressure, especially since 1965. Board industries also have been able to keep cost rises relatively in check by increasing use of wood residues and improving overall efficiency much faster than the lumber industry. The largest increases in plywood and veneer exports have occurred in developing regions with cheap labour. Even so, these exporters have established industries with a consideration for scale economies, so that overall cost increases for panel product exports have not been felt in international trade. Additionally, as for pulp and paper, the burden of freight charges is low.

Table 9 depicts the principal international flows in 1960 and 1968 of wood products suitable for housing, indicating the magnitudes, trends and direction of trade. A point that does not emerge is that the developed market economy countries accounted for nearly three quarters of the total value (about U.S.$10000 million) of world trade in industrial roundwood, sawnwood and wood panels in 1968. The developing countries as a whole, however, had only a small trade deficit in 1969.

TABLE 8 - WORLD EXPORTS IN 1968, SHOWING INCREASE OVER 1960

	Ouantity	Increase over 1960	Value	Increase over 1960
	Million cubic metres (re)	Percent	Million U.S.$	Percent
Roundwood	70.9	99	1445	1 32
Sawnwood	92.2	34	2 251	40
Panels	16.7	174	930	133

TABLE 9. - PRINCIPAL TRADE FLOWS, 1960 AND 1968

In the centrally planned economies, total value of trade is much less, but nevertheless shows a surplus of about $500 million.

The table shows the spectacular expansion of coniferous log exports, from 4.2 million cubic metres in 1960 to 21.6 million in 1968, or 410 percent. In 1969, however. there was little increase. The absolute increase in broad-leaved log exports was from 13 million cubic metres in 1960 to 29 million in 1968, or 123 percent. Data for 1969 indicate a further increase of 5 million cubic metres, and further growth is expected.

Japan's position as a log importer is outstanding. Its trade in coniferous logs is 76 percent of the world total, nearly twice its share eight years ago. Intra-western European coniferous log trade represented only 6 percent of world trade in 1968, against 26 percent in 1960.

Southeast Asia dominates broad-leaved log exports with 20 million cubic metres, nearly 68 percent of the total. Of this, nearly 70 percent goes to Japan and neighbouring countries such as the Republic of Korea, Taiwan and Singapore. Western Europe (largely France, the Federal Republic of Germany, and Italy) is the main importer of Africa's 5.5 million cubic metres of broad-leaved logs, which come primarily from Gabon and Ivory Coast.

In 1968, 96 percent of coniferous sawnwood originated from the developed countries. Canada, the U.S.S.R. and Sweden together accounted for two thirds of the world total of 47 million cubic metres. Among the developing countries' only Brazil and Honduras are worthy of mention, exporting altogether 1.8 million cubic metres. Western Europe is the largest importer with the United Kingdom the most prominent at over 9 million cubic metres in 1968. Although still only about 2 million cubic metres, North American exports to Japan are nearly six times those in 1960.

The increase in trade in broad-leaved sawnwood from 1960 to 1968 was particularly marked in developing countries, whose share is approaching parity with developed countries. The developed market economy countries' share is over two and a half times that of the centrally planned economies, but the latter's rate of growth, with flows originating from eastern Europe, has been higher. East Asian trade to western Europe more than doubled between 1960 and 1968, and significantly increased to North America and Japan. with Malaysia and Singapore the principal exporters, accounting for over 1.71 million cubic metres.

The fastest developing sector is panel products. From a total value of $400 million in 1960, they reached $930 million in 1968. The developing countries ate contributing significantly and increasingly. The Far East (excluding Japan) stepped up exports of veneer and plywood from 855 000 cubic metres (26 percent) in 1965 to 1.71 million (36 percent) in 1968. The direction is essentially to the developed countries, yielding valuable foreign currency. even though the region's log imports rose to about 6 million cubic metres to help to bring its wood-based panel exports to their present rate.

Imports of wood-based panels continue to be heavily concentrated in Europe and North America. In 1968 Europe accounted for 42 percent of world veneer and plywood imports, 71 percent of fibreboard imports and over 95 percent of trade in particle board. North America's share of veneer and plywood imports was 48 percent in 1968, and of fibreboard 20 percent.

In 1968, world exports of all forest products, at $11 000 million, ranked close to other major exports such as iron and steel manufactures. Exports thus represented a quarter of the value of total forest production ($45 500 million). Trade in roundwood, sawnwood and panels was worth only $4 700 million. This relatively small proportion plays an important part in the supply of wood products used in housing, however, and it influences prices significantly in countries which are large exporters and, even more so, importers of lumber such as the United Kingdom. Moreover, exports of all three main wood housing products are growing.

Tariff structures, however, do not favour the importing of processed wood for housing. Few countries let in panel products without levying fairly high ad valorem tariffs. Yet the comparative advantage (notably of east and southeast Asian developing countries) in domestic processing of plywood and veneers is such that these countries are directing vastly increased supplies to traditional importers, as well as breaking into new markets in developed countries. This trade could become even more voluminous if tariffs in developed countries were liberalized. This would imply, however, that the growing log exports of tropical hardwoods would decline proportionately. Except for a few countries such as Japan and the United States, sawnwood importation does not usually suffer from tariff burdens and the growth of exports, especially of broad-leaved sawnwood, is likely to continue. In spite of the emerging manufacturing sectors in some developing countries, their exports to the developed countries will continue in the form of lumber. Large lumber companies and concessionaires are concentrated in the developed countries, where they have established more efficient secondary processing facilities.

The growing demand in developed countries for logs and sawnwood is helping the expansion of supplies from a variety of tropical provenances. Ghana and Nigeria, the forerunners in such exports, have considerably slowed production, partly due to increasing difficulty in and rising costs of producing the sought-after species and sizes. On the other hand, Ivory Coast, Gabon, Cameroon and the People's Republic of the Congo are building up their exports. The increasing demand for wood raw material in developed countries, however, spurred an unprecedented expansion in the exports of wood products, especially logs and wood-based panels, from southeast Asia, which has become the predominant supplying area from the developing world.

There is heavy intraregional trade in developed areas (for example' from Canada to the United States) but not among developing countries, except Far East and a few Latin American countries. This is understandable because wood-surplus developing countries export to earn hard currency from the developed countries.

Trade based on man-made forests is still small. But it will grow (though faster for nonhousing products such as pulp) as more plantations reach maturity. Also, manmade forests have reduced and will increasingly reduce imports of wood housing products in a number of countries. Mediterranean countries and west and south Asia have much to gain by adopting such a strategy.

Wood resource management and environment

Efficiency in the use of wood resources has to be related with political and institutional issues-modification of laws, responsibilities, ownership, and the processing industry.

Because of the renewability of a wood resource, commercial production need not destroy it. It may instead augment and improve it, but with unscientific exploitation exhaustion may follow, as has happened in the eastern coastal forests of Brazil. If a resource is unappropriated, as with large communal or public forest areas, especially in many developing countries, it may invite the early treatment meted out to the supposedly limitless forests in the United States. The integration of the various forest uses is necessary, including the prohibition of commercial timber production of areas set aside as wildlife reserves and for watershed protection.

There need be no conflict between meaningful conservation and economics. A rational evaluation is the product of three main analyses: what is technically possible, what is socially acceptable and what is economically gainful. Extra-market values are a major component in decisions regarding management of wood resources, and have become topical in the wider context given to conservation philosophy, that is, the quality of the environment.

Wood resource management and the environmental effects of utilization are manifest in outdoor recreational facilities, wildlife and wilderness areas, and in the land-scape, air and water. Of these effects, pollution is considered the most serious in industrialized countries. Yet production of wood need not contribute to pollution. Indeed, research shows that unutilized or underutilized forests generate more carbon dioxide than those intensively used. The latter, through the better health of wood stands and lower mortality and decay, exhibit greater photosynthetic vigour and produce relatively more oxygen. Also, most mechanical wood-processing industries do not discharge the pollutants for which large pulping facilities have been notorious. Even pulping processes are now being improved, through recycling and recovery techniques, so that their effluents can be minimized-of course at a price, as with many other chemical industries. Such measures can be practically implemented through fiscal and monetary policies and legislation.

The provision of such services from forest land as recreation facilities and clean water-for which demand is rising because of growing incomes, population and leisure-has to be reconciled with wood production goals. This may imply a reduction in areas available for wood production. However, this can be compensated for not only by multiple use, which may not always be practical, but also through the intensive utilization of the remaining vast, potentially productive forests, and through the creation of man-made forests in appropriate locations.

In general, competition for land use is felt differently in developing countries. It stems from the extension of land under agriculture and grazing. In Latin America it is estimated that 6 to 10 million hectares of forest land are cleared annually for agriculture. Over 100 million hectares of closed high forest in Africa south of the Sahara are estimated to have been lost through shifting cultivation. The latter is widespread throughout the tropics and leads to degradation of productive forests to savanna woodlands, if not controlled by systems (such as Taungya) which enable reversion of the cropped areas to forest after a few years of cultivation.

Forest losses occur also through the construction of highways and dams, and resettlement schemes, such as the Jungka Triangle scheme in Malaysia which aims at logging forest land and replanting to oil palm and rubber. Sometimes such losses are inescapable, but they could often be avoided if integrated land-use plans were applied. Such plans are wanting in most developing countries. A redeeming feature, however, is the recent use of high-yielding agricultural crops, notably in Asia. With a shift in emphasis from extensive farming, marginal areas may be released for plantations, and inroads on existing forest land halted. This would be similar to the reduction of land under agriculture in the developed countries through productivity increases.

WOOD LOSSES

A way to increase effective potential wood supplies is by reducing losses in the standing form, and during conversion. Besides losses caused by the encroachment, lopping, burning and browsing rampant in many developing countries, mortality losses from fire, storms, avalanches, and other natural causes such as disease and insect attack are also immense. Much waste arises from the death and decay of unused, overmature forest, where growth increment and losses are almost balanced. This will only be reduced when these forests are unlocked to release wood supplies and allow the introduction of protective measures.

It is difficult to estimate the amount of wood losses in the forest, especially where there is no inventory control, but it is accepted that in absolute terms the U.S.S.R. and North and Latin America have the highest losses, and Europe the lowest, respectively reflecting, among other causes, the occurrence of overmature stocks and the high intensity of forest working. In the United States, annual mortality losses amount to about 150 million cubic metres, or one third of net increment. Such losses are proportionately a little higher for sawn timber, nearly half of these being caused by insect attack and disease. Only about 7 percent is attributed to fire. Weather, and related causes such as storms and snow-slides account for about one third. All the timber killed is not lost. as significant proportions can often be salvaged, depending upon the area of damage, the distance and the speed with which men and material can be mobilized. More investment to provide access to valuable timber stands and preventive measures would reduce mortality losses, but full prevention or salvage is not usually economically justified or physically possible.

Prospects for housing wood supplies

A summary of the 1968 and possible 1985 world supply situations of wood for housing is set out in Table 10, which has been based on regional studies of trends and prospects in production and supply in the important forest-resource and wood-consuming countries.

PRESENT PRODUCTION

The estimation of present production of wood for housing is based on overall industrial wood production and its utilization pattern.

Broadly, the portion of wood used for housing in the developed regions is 25 to 65 percent for sawnwood and 30 to 60 percent for panel products. For the developing regions the percentages are respectively 25 to 45, 20 to 35 and 10 to 15 for sawnwood. plywood and other wood-based panels. The ranges are wider when subregions and individual countries are considered. For instance, among the developed regions, the proportion of sawnwood and wood-based panels used in housing in North America is relatively higher than in Europe. Such variations have been taken into account in computing subregional and regional data. Nevertheless, the above figures give a sense of proportion to the relative size of present industrial wood use in housing.

PRODUCTION POTENTIAL

The assessment of potential production is difficult because of possible changes in technology, deviations from planned or assumed levels of investment, and changes in political and international conditions. These can only be foreseen to a limited extent. Nevertheless, existing studies on available reserves and projections of planned future supply allow the wood resource potential for housing in different parts of the world to be calculated in broad terms.

Assumptions are that in the period there will be no major international political changes to influence prices significantly; that the world economy will continue to grow, but with disparities between developed and developing economies, so that the wood-use pattern will conform to the trends already outlined. This is reflected in a derived demand for raw materials for housing and other wood products as given in Table 10. It is also assumed that sawmilling facilities will not be a limiting factor for processing supplies; and that more domestic processing than before will take place in resource regions. Overall increases in output will be able to accommodate promotion of exports from these regions, for earning foreign exchange. This is linked with the assumption that demand for certain tropical timbers will continue to grow in most developed countries.

TABLE 10. - WORLD HOUSING WOOD REQUIREMENTS AND SUPPLY

	Calculated situation, 1967-69			Prospective situation, 1985
	Requirements	Supply	Balance	Requirements	Supply	Balance
	Million cubic metres (roundwood equivalent)
DEVELOPED REGIONS
North America.	107.1	114.6	+ 7.5	132	138	+ 6
Europe	49.2	41.0	- 8.2	60	49	- 11
U.S.S.R.	73.1	82.6	+ 9.5	84	93	+ 9
Japan	53.9	29.1	- 24.8	46	29	- 17
Oceania	5.6	6.3	+ 0.7	7	8	+ I
TOTAL DEVELOPED REGIONS	288.9	273.6	- 15.3	329	317	- 12
DEVELOPING REGIONS
Latin America	14.1	14.7	+ 0.6	23	24	+ 1
Central America.	3.3	3.0	- 0.3	5	4.5	- 0.5
Northern South America	2.0	2.2	+ 0.2	4	4	-
Brazil	5.9	7.0	+ 11	9	11	+ 2.0
Southern South America	2.9	2.5	0.4	5	4.5	- 0.5
Africa	4.5	5.8	+ 1.3	10	10	-
North	0.9	0.2	- 0.7	2.0	0.3	- 1.7
East	0.9	0.9	-	2.0	1.7	- 0.3
Southern	1.2	1.0	- 0.2	2.0	1.5	- 0.5
West	1.5	3.7	+ 2.2	4.0	6.5	+ 2.5
Asia	27.9	41.3	+ 13.4	44	56	+ 12
West	3.4	2.8	- 0.6	6	3.5	- 2.5
South	2.0	1.9	- 0.1	4	2.5	- 1.5
Southeast and east	10.5	24.6	+ 14.1	18	36	+ 18
Centrally planned economies	12.0	12.0	-	16	14	- 2.0
TOTAL DEVELOPING REGIONS	46.5	61.8	+ 15.3	77	90	+ 13
TOTAL WORLD	335.4	335.4	-	406	407	-

Achievement of the projected targets in various regions will depend on their overall economic climate, housing programmes and the growth of competing wood-based and other industries. These considerations have been brought to bear on the evaluation of likely supplies.

Among the developing regions, west, south and east Asia, Central America, and north, east and southern Africa are likely to improve slightly their present production. The quantities involved here are not very large, and the population pressure on wood resources is high. In some of these regions, production and processing capacities are relatively well established, and backlogs in housing programmer are either particularly heavy or there is a wood shortage. These regions are already making intensive use of productive forests, although with some exceptions such as Turkey, but there, too, plans are afoot to extend forest working. In southeast Asia and west Africa, future production should exceed present production in most cases, given the trends of intensity in forests already in use, and of extensions in exploitation of new forest areas. The smaller absolute increases in wood housing supplies in Brazil and northern South America, relative to their very high potential, are largely due to difficulties in opening up new forest areas due to inaccessibility.

About 400 million cubic metres in roundwood equivalent of housing raw material may become available by 1985, through the intensification of working of forests already in use, and the extension of working of relatively more accessible areas of unused forests. This will mean an increase of 65 million cubic metres over production in 1968. The bulk of the increase will accrue from the developed countries, mainly North America and the U.S.S.R. They are likely to account for two thirds of the total increase, despite the vast wood resource potential in many developing countries.

HOUSING WOOD REQUIREMENTS

It has been shown that industrial wood consumption as a whole is increasing, as is that of the wood products used in housing. The implication that markets for additional supplies are fairly certain seems tenable on the assumption that rising incomes and growing populations will more than compensate for any reductions in per caput consumption.

For the purpose of this paper, the forecasts for consumption of wood for housing are estimated under specified assumptions. The first is the need to construct an average of 10 houses per thousand persons every year in the developed countries norm suggested by UNCHBP. Some countries (including Sweden, Malaysia, Singapore and Japan) have recently been constructing at even higher rates, while many others are far behind. In 1965, about 7.1 dwellings were built per thousand inhabitants in Europe as a whole (about 10 in northern Europe and 5 in southern Europe). For developing regions, the base taken for 1985 varied from 5 to 6 per thousand, but within regions the variation widened to 4 to 7 per thousand. A higher figure was taken for China because of the importance given to housing in centrally planned economies. For developed countries the information available has enabled full coverage of practically all dwelling construction. However, a certain amount of roundwood is being used for the erection of secondary and sometimes temporary structures, and for surrounding fences and so on, for which records are incomplete. A considered assessment of this roundwood use is, therefore, not practicable and as no supply difficulties are likely to arise, this element has been excluded from the developed countries' requirements and supply calculation.

In developing countries, the lack of full statistics, especially for rural areas, has made it necessary to base calculations on construction in urbanized areas only, leaving out the traditional housing made primarily from material readily at hand in the rural areas and which does not enter into recorded production or consumption data. In developing countries, also, there is an unrecorded use of roundwood in general dwelling construction which, because of lack of data, must be excluded from the calculations.

These exclusions in the case of developing countries represent considerable volumes of wood material which appear to be readily available in many areas, although severe shortages do occur in northeastern Africa, and west and south Asia, and it would be interesting to have more information about them. Developing countries will need to bear in mind this important element in their consideration of wood requirements for housing.

Another important factor is the amount of wood used per dwelling. This can vary tremendously, but certain generalizations have been possible from estimates made for different parts of the world. The volume varies also according to the type of house.

Three working assumptions were used for developing countries for high, medium and low wood use per dwelling unit (Table 11). In general, these correspond to a lumber and panel wood consumption of 7.0, 2.5 and 0.8 cubic metres, or roundwood equivalents of 12.5, 4.5 and 1.5 cubic metres respectively. Their requirements for 1985 were accordingly computed on the basis of official population projection series, extended till 1985. While making similar assumptions regarding the population parameter, the approach adopted for developed countries has been adjusted to known trends and prospects, hence their requirements are shown at a single level.

For Europe, an average of 14.1 cubic metres round-wood equivalent was calculated for 1968, and it was assumed that by 1985 this would decrease to 12.5 cubic metres per dwelling. As to the number of new dwellings per thousand, the figure of 7.2 in 1968 is expected to reach 8.5 by 1985.

For North America, although there is an estimated increase in the consumption of wood-based panels per dwelling, lumber consumption is expected to decline, and the figure calculated for 1968 is 53.5 cubic metres roundwood equivalent for an annual construction rate of 9 new dwellings per thousand inhabitants. For 1985, assumptions were based on North American studies which indicate a use of 49 cubic metres per dwelling, with a construction rate of 10 per thousand, including mobile houses, alterations and repairs.

For the U.S.S.R., the figure calculated for 1968 was 33 cubic metres per dwelling. at 9.3 units per thousand. For 1985, a figure of 29 cubic metres per dwelling was arrived at, with a construction rate of 10 dwellings per thousand.

SOME IMPLICATIONS OF THE PROSPECTS FOR 1985

Assuming that by 1985 the norm put forward by the United Nations Housing Centre of the construction of 10 houses per thousand inhabitants could be achieved in all countries, and that for the developing countries the wood use for these houses would be equal to that of the lowest wood-using region of the developed world (12.5 cubic metres roudwood equivalent per house, as predicted for Europe in 1985), this would imply the supply of 820 million cubic metres roundwood equivalent of wood for housing, or more than double the level of supply envisaged in the prospective situation for 1985. The idealistic picture is not within the realm of realistic possibility. It ignores tremendous problems of purchasing power on the one hand and of supply, transport and construction techniques on the other. The present exercise draws a prospective picture for 1985 where, of a total world population of 5 000 million people, 2500 million will be living in conditions of serious wood scarcity. It is, unfortunately, necessary to look at the prospects for 1985 more realistically.

For those regions in the world considered at present as developed, the annual rate of residential construction is to increase from 8.6 in 1968 to 9.5 in 1985, per thousand inhabitants. This would mean a total number of 12 million dwellings built annually as against 9 million at present. With a decrease of 15 percent in wood used per house, from 31.7 to 27 cubic metres roundwood equivalent, the present annual requirements of 290 million cubic metres are expected to rise to 330 million cubic metres in 17 years. Of course, within the developed world these figures cover very wide variations in building rate, going from 8.5 per thousand in Europe to 11.5 in Japan, and a wood use ranging from 12.5 to 49 cubic metres roundwood equivalent per house in Europe and North America respectively. These figures of wood use per house, always given in roundwood equivalent, cover all wood used for construction, maintenance, alterations and additions. As to the different wood products covered, the proportion by region of sawnwood and each of the wood-based panels for 1968 can be found in Table 7.

For the developing world, although the prospective situation would mean an increase in annual dwelling Construction from 14 to 25 million, and in annual wood requirements from 46 to 77 million cubic metres roundwood equivalent, it would only mean an increase in the annual construction rate of urban type dwellings for the developing world (not including China) from barely 4 in 1968 to slightly over 5 per thousand inhabitants in 1985, or to only slightly more than half the construction rate in the developed regions. Moreover, these houses would be very much smaller than in developed countries, as can be seen from the average wood use per house, which would still be less than one sixth of the average in developed regions. This low figure for wood use per house needs, however, to be further qualified.

First, this calculated figure may be lower than the real one. It was obtained by dividing total wood use for housing by the assumed urban construction rate; however, an unrecorded, but nevertheless substantial amount of wood is also used in traditional type dwellings, so that the total wood used for housing might well be up to one third higher. Second, the figure does not include the roundwood still widely used in developing countries. Third, this average figure is depressed by the very low use of wood in certain areas such as south Asia, where wood supplies are extremely scarce compared with the requirements of a huge population estimated to account by 1985 for 40 percent of the population of the developing world (excluding China), and more than 20 percent of the world as a whole.

TABLE 11. - PRESENT (1968) AND PROSPECTIVE (1985) HOUSING WOOD REQUIREMENTS IN DEVELOPING REGIONS

	1968	1985
	Present requirements	Derived requirements with various assumed levels of wood use per house			Prospective requirements (posible target)
		High 12.5	Medium	Low 1.5
	Million cubic metres ®	Cubic metres/house			Million cubic metres ®
Latin America	14.1	36	13	4	23
Central America	3.3	11.3	4.1	1.4	5
Northern South America	2.0	5.0	1.8	0.6	4
Brazil	5.9	15.0	5.4	1.8	9
Southern South America	2.9	4.5	1.6	0.5	5
Africa	4.5	34	12	4	10
North	0.9	6.6	2.4	0.8	2
East	0.9	8.8	3.2	1.1	2
Southern	1.2	4.1	1.5	0.5	2
West	1.5	14.1	5.1	1.8	4
Asia	27.9	225	92	31	44
West	3.4	7.5	2.7	0.9	6
South	2.0	47.3	17	5.7	4
Southeast and cast	10.5	51.6	18.6	6.2	18
Centrally planned economies	12.0	149	54	18	16
DEVELOPING REGIONS	46.5	325	117	39	77

To illustrate how unsatisfactory the prospective 1985 target for developing countries really is, the implications of the different housing targets have been given, in Table 11, in terms of the three alternatives of low, medium and high wood-use levels. The high wood-use level is equal to the lowest level in developed countries. Next to these three alternative assumptions, requirements for the prospective 1985 situation are shown in what is considered a realistic target of wood use for each of the regions and subregions of the developing world.

It might be argued that the wood use for housing targets accepted as possible for 1985 is too low. It is recognized in this paper that it is low. However, taking into account the limited purchasing power in many developing countries, it is improbable that the supply forthcoming from any available resources could be significantly higher without substantially increased aid at international level to bring the housing situation more into line with requirements.

It is also necessary to consider the implications of Table 10 from the point of view of supply. On the basis of available studies, developed countries as a whole expect to increase their own supply of wood for housing by over 15 percent; in North America and Europe the expected increase is 20 percent, while Japan does not forecast increased removals of wood for housing.

However, the major deficit will remain in the developing countries, even if these are still expected to contribute by 1985 to the wood housing requirements of the developed regions by a total amount, in net trade terms, of 12 million cubic metres roundwood equivalent, as against 16 million in 1968. Total supply in the developing countries might increase by almost 50 percent over 1968. This would allow their present housing situation to improve considerably, but only to a level equal, in terms of wood components, to about one sixth that of the developed world. With the resource availability in mind, as shown in Table 1, it is not difficult to argue that a more intense exploitation of the world's wood resources could significantly improve the housing situation of the developing world. However, this picture becomes relevant only by analysing the supply-demand relationship on a regional, or even subregional basis. The regions with shortest supply are Japan, north and southern Africa, west and south Asia. Japan's economic development will, of course, allow it to import supplementary wood raw material. although there are divergent opinions about the magnitude of possible imports. Of the three developing regions with ample supply possibilities, only southeast Asia has reserves and a production potential capable of contributing substantially to its own requirements and to a further expansion of its exports. West Africa, on the other hand, with sizable but more limited resources, will have no difficulty in satisfying its own growing requirements and may even be able to increase its exports to Europe and, possibly, North America. Finally, supply from the enormous reserves of the Amazon may still not enter the international scene to an extent that can be termed significant.

In subregions with an intermediate supply situation, where countries could locally produce most immediate housing requirements, improvements in housing standards will depend basically on economic development and supply-oriented forest policy. Central America, the north and south of South America and to an extent east and even southern Africa are in this group, although there are significant variations within this group as well as within these subregions. Some interregional trade may take place, and imports may solve some local demand problems, but production will be mainly oriented toward satisfying local demand.

In the last group, the forest resource potential is far too low to satisfy demand. It includes north Africa, and west and south Asia where, in general, forest potential is nonexistent or extremely low. For the north African and west Asian countries with a medium or low population, oil revenues may permit them to import wood for housing. For the remaining countries, especially those of south Asia, wood for housing will remain painfully scarce for a population predicted to be over a thousand million in 1985, or over one fifth of world population. Wood for housing in China is also considered to be very deficient, but lack of information on the economic and policy situation makes it difficult to assess the future of that region, and its impact on the regional wood trade balance. Nevertheless, the mere existence in an area of scarce wood supply of another population group estimated at more than a thousand million by 1985, should influence any evaluation of the future wood balance in that part of the world.

Thus, the assumptions made in this paper predict that in 1985 more than 40 percent of world population will use barely 5 percent of the world's wood supply for housing.

Table 10 calls for two more comments: one concerning trade flows, and the other the different products.

To give a detailed description of prospective trade flows by 1985 is beyond the scope of this paper. It is necessary to clarify the meaning of the balance column in the table, and warn against misinterpretation. The data indicate only the total net trade balance of wood for housing, in roundwood equivalents, for the regions of the developed world, and for the regions and subregions of the developing world. In this context, a decrease of the net import balance of the developed countries from 15 to 12 million cubic metres roundwood equivalent from 1968 to 1985 does not imply a decrease in wood trade, but simply a less one-sided flow of wood and wood products. Indeed, the table shows Africa to DO longer have an export balance of wood for housing by 1985, but a detailed analysis by subregion shows an increased export of wood and wood products from west Africa, counterbalanced by imports into other regions, especially north Africa. Even more characteristic is the picture for Asia which, as a whole, may turn out to have a lower total export balance, assuming that west and south Asia and China become more significant importers; moreover, the evolution of the situation in Japan, somewhat different from that assumed, might again considerably influence the prospective 1985 situation for southeast Asia as a wood supplier.

A second important feature which does not emerge from Table 10 is the nature of the wood products for housing which will be produced, consumed and traded. It is accepted that the general trend will be toward the increasing use of more processed wood, and also that the exports will increasingly concern products of higher value, that not only bring a better revenue to the exporter but can also more economically cover the distance from producer to consumer. A full quantification of the relative proportion of different wood products used for housing, however, has not been attempted.

Two important reservations are drawn to the reader's attention in concluding this section on the implications of the prospective 1985 situation.

The outlook in Japan calls for special reference. It will be seen that this country is shown as requiring in 1985 about 15 percent less wood for housing than calculated for 1968, without any change in domestic supplies. Recent information available about prospects in Japan indicates a considerably lower use of wood material in housing, although there are differing views about the rate of decline. The figures used in this paper are a compromise between these divergent opinions. The possibility that actual developments may prove to be different from estimations has to be borne in mind, especially in view of the important trade considerations.

Also uncertain are the prospects assessed for China where, because of the huge population, any changes in trading pattern could have a major impact on regional flows of wood supply, resulting in a situation somewhat different from that envisaged in the present estimates.

CONCLUSIONS

The world wood potential is such that considerably increased supplies for housing purposes could be forthcoming. But many obstacles would have to be overcome to realize this potential. The present estimate for 1985 considers that around 400 million cubic metres will become available. This is not to say that larger supplies are not possible, but they would involve a greater tempo of forest working than seems likely from current operations and plans, especially in the wood-rich countries.

Chief among the obstacles are the difficulties involved in harvesting remotely located reserves and transport to demand centres. Such difficulties are greater in tropical forests: first, because they are less accessible, and beset with utilization problems principally due to greater diversity in composition; and, second, they are concentrated in developing countries which do not have the infrastructure or investment capacity for opening up and utilizing large forest areas, as in the Amazon basin. More international aid and foreign investment (now being received for forest development in some countries), intensively applied under sound forest policies, would lead to the fuller utilization of resources not properly exploited at present. An important element in this utilization would be the establishment of a settled place in world markets for the currently lesser known tropical species.

The difficulties of tapping further the temperate forest reserves, notably in Canada and the U.S.S.R., although considerable, are much less than in the tropics. Also. in the developed countries, as in parts of the United States and northern Europe, economic factors are more conducive to intensive forest working. This includes a greater reliance on man-made forests, especially in the developed countries of Oceania, and South Africa, Japan and the United Kingdom. In certain developing countries also, such as Chile and Kenya, man-made forests provide substantial supplies. There is similar scope and even greater need in many other developing countries, provided sufficient resources are made available for creating plantations in appropriate locations. However, even if steps in this direction are taken now, additional wood supplies suitable for housing will not accrue from them for some years.

The ease of application of panel products seems likely to continue to encourage their substitution for sawn timber and even nonwood materials in the higher income countries, apart from the added advantage of their recent relative price stability. In most developing countries, however, immediate wood needs for housing will no doubt continue to be for the simple sawn forte, which can be made more readily available from the further development of their forest potential.

The evolution of the supply situation of different forest products used in housing will naturally be influenced by their comparative price movements, both in relation to each other and to alternative nonwood materials. The impact of rising costs of log extraction and transport from less accessible areas, as well as increasing wage costs, is likely to be greater on sawn timber. with its conversion losses, than on particle board and fibreboard with their high utilization factor, thus giving the latter a progressive advantage.

Price levels and trends vary, sometimes widely, among different countries, and although in many the increase in timber prices has been slower than in general wholesale prices, in others this trend is reversed. In most countries prices for sawnwood have risen faster than those for cement, and if this trend continues demand for sawnwood may suffer. Panel products may do better in competition for the housing material market within the developed countries.

Regard for man's pressing environmental requirements from world forest areas need not be inconsistent with increased wood production for housing.

The implications of this review of world wood resources and prospects are that naturally wood-rich countries, as well as others whose income levels and trading situations enable them to meet any deficits by imports, should have ample supplies available for their foreseeable housing needs, more in the developed than in the developing countries. In such countries promotion of the use of wood in housing would be appropriate, and could include larger exports to wood-deficit countries. However, many wood-deficit countries with limited import possibilities, especially in the developing regions. will continue to be short of wood supplies for housing.

Appendix

Appendix Table 1 below gives the econometric background of the wood requirement data calculated for 1968 (1967-69 average) and estimated for 1985, on the basis of the main assumptions made in the last part of the paper. It is admitted that several of these assumptions, especially for the developing regions, are debatable, as they are based on the scanty information and indications available at the time of writing. However, the table is offered as a base for revising calculations as more information becomes available. New appraisals of timber trends and prospects will soon be available in North America and Japan, and these and other relevant information could be inserted here and in Table IQ The authors are well aware of the weaknesses in the data reproduced here.

TABLE 1. - WOOD REQIREMENTS FOR HOUSING ¹

¹ Excluding wood used in the round. Requirements of wood per house and total requirements are given in roundwood equivalents.

TABLE. 2 - CLASSIFICATION OF REGIONAL GROUPS BY ECONOMIC CLASSES AND POPULATION, 1968

Regional groups	Population, 1868	Remarks	Regional groups	Population 1968	Remarks
	Millions			Millions
DEVELOPED	1 063.6		Southern South America	55.5	Argentina, Bolivia, Chile, Paraguay, Peru, Uruguay
EC CL I	721.7		Africa	335.8
North America.	221.9		North	80.9
Western Europe	383.9	includes Yugoslavia	East	93 3	includes Burundi, Rwanda and Somalia
Japan	101.1		Southern	53.5	South Africa, Swaziland includes Angola, Zaire
Oceania	148	Australia and New Zealand	West	108 1
EC CL III	341.9		Asia	1051.7
Eastern Europe.	104.1		West	76.9	includes Near East, Afghanistan, Israel, Turkey
U.S.S.R.	237.8
DEVELOPING	2 504.0		South	671.4	Ceylon, India, Nepal, Pakistan includes southeast Asia, Pacific Islands
EC CL II	1 655.3		Southeast and east	303.4
Latin America	267.8
Central America.	87.2
Northern South America	36.9	Colombia, Ecuador, French Guiana, Guyana, Surinam, Venezuela	EC CL III	848.7
			Asia continental	848.7	China, Korea (Dem. People's Rep.), Mongolia, Viet-Nam (Dem. Rep. of)
Brazil	88.2
			TOTAL WORLD	3.567.6

NOTE:
EC CL I = Developed market economy countries
EC CL II = Developing countries
EC CL III = Planned economy countries (developed and developing)

Report of the consultation

1. This section assesses the world's forest resources by regions and subregions. It gives particulars of production trends in the different wood categories, and wood utilization patterns.

2. According to this analysis, more than half the world's forest resources are located in the developing regions, but most of the world's productive forests are in the industrially developed regions, nearly 90 percent being located in the U.S.S.R. and North America. Manmade forests are fractional but have local importance and offer possibilities for future relief to pressing wood needs in certain areas.

3. World wood production increased by about 25 percent between 1950-52 and 1967-69 to over 2000 million cubic metres annually, but this increased level still represented little more than one half of one percent of the world's estimated growing stock. The rate of increase in developing regions (nearly 45 percent over the period) has been much higher than in developed regions (15 percent), but nearly 85 percent of industrial wood in 196769 was still produced in developed regions.

4. A limiting factor on world production is the concentration in tropical areas on very few of the vast numbers of species available, even in reasonably accessible forests. Another is the inaccessibility of extensive existing resources in developing countries because of lack of transportation infrastructure.

5. The most striking feature of the utilization pattern is that the developed countries, with only 30 percent of world population, consume 88 percent of all wood processed for industrial purposes, and the rest of the world, though holding 60 percent of the growing stock, consumes only 12 percent. In fuelwood, however, developing countries appear to account for nearly 80 percent of world consumption estimates.

6. Only a relatively small proportion of industrial wood production enters into international trade, but this proportion is expanding and its place in housing supplies and its influence on prices in the larger exporting and importing countries are important.

7. Considerations of environmental conservation are tending to have an increasing bearing on policies for timber production but sound forest management, for commercial production, can justify augmented wood output.

8. World requirements and supplies of wood for housing have been estimated at about 335 million cubic metres 1968 and are expected to increase to over 400 million by 1985, with the bulk accruing in developed countries, mainly North America and the U.S.S.R. Developing countries are expected to have a relatively much faster rate of increase.

9. Developed countries should have little difficulty in securing supplies of wood to cover their forseeable requirements for housing purposes, although some, notably Japan and some countries in Europe, will be largely dependent on imports. It seems that among the developing regions, Brazil, west Africa and southeast and east Asia will have adequate supplies for their expected housing needs and still be able to maintain exports, while Central America, northern and southern South America, and east and southern Africa will be able to cover nearly the whole of their expected requirements, even if in some cases there is a dependence on imports. In north Africa, and west and south Asia, however, the potential supply is far below likely requirements, although some north African and west Asian countries should be in a position to obtain imports. In the other countries, especially China and those of south Asia, wood for housing is likely to remain painfully scarce, and the more than 40 percent of world population in this region will be able to use barely 5 percent of the world supply of wood for housing.

10. The Consultation felt that a general appraisal of the world situation of this kind was useful and should continue to be undertaken, the studies being updated as conditions change.

11. It was to be noted that the supply situation could substantially change through more intensive use of the raw material available, by harvesting a wider range of species, sizes and qualities and by more complete utilization of this material. There was, for instance, the long-standing problem of species now not readily accepted on the market. Major progress was already being made, not only in research on their properties, processing, preservation and utilization, but also in actually establishing a position for them in housing. Indeed it appeared that the time was ripe for a major breakthrough on this very vexing problem.

12. A most promising course of action was recognized to be the promotion of the so-called secondary species to serve the domestic housing needs of developing countries. Not only would this solve a local problem but it would also go a long way toward establishing the general acceptability of these woods. It would also leave available for export the higher valued species sought after for external markets.

13. In this context the Consultation stated that it was important that countries clearly identify and establish their forest production policies with respect to the growing, harvesting and processing of wood for internal and external markets.

14. More effective dissemination and application of already available information on research results and technical methodologies were needed to hasten developments. It was, however. important that transplanted technologies be properly adapted to the varying conditions of individual countries and, in this context, it was most important that a cadre of adequately educated and trained personnel be established.

15. In some countries plantations are an appropriate solution to the supply problem. Even in Brazil. with its extensive areas of tropical forests, plantations prove suitable for providing wood for housing requirements of extensive parts of the country. For some developing countries imports are necessary. For one importing area the possible role of prefabricated housing units was mentioned, while for another the need for better quality control of imported material was stressed.

16. The important role of price in the competition between wood and other housing materials was several times mentioned. High wood prices could limit its use in many instances. Accessibility problems increased costs, but might be solved through the development of transportation infrastructure. Pessimistic impressions of prospective shortages in wood supplies often contributed to high prices and unnecessarily prejudiced the use of this material.

17. Housing materials were often complementary as well as competing. For example, concrete, often a domestically available material, requires considerable quantities of wood for its applications. However, the pattern of re-use of formwork (or shuttering) differs between countries, and this evidently influences the amount of wood used for this purpose.

18. The changing world attitude toward social and environmental problems might have considerable impact on developments in the supply and demand for wood in housing On the one hand, demand for the recreation. al and protective functions of the forest might well restrict available supplies, particularly in the more highly developed regions. On the other hand, demand for wood in housing might be greatly increased by aggressive government policies in many developing countries, which are increasingly recognizing that acceptable housing must be given very high priority.

19. Such a development could lead to requirements for wood in housing considerably in excess of those presently foreseen for some developing regions. Supplies would have to be made available by one means or another.

20. The Consultation urged governments of those developing countries with ample forest resources, in the struggle to solve the serious and often critical problem of providing adequate housing for their peoples, to promote the fuller use of wood materials in housing, with a view to economic use of limited domestic funds or foreign exchange required for building materials.

21. Much of the tropical wood supply is represented by tree species not yet adequately known on timber markets and there is need for forest products research laboratories to undertake more research on the properties of these species and especially on their utilization in housing construction, although it is acknowledged that a vast amount of information already exists in this regard.

22. Even more important, however, is the need for the collation of the research results and their dissemination in a form which can be readily employed by potential users. In the interests of worldwide acceptance, international bodies such as FAO and IUFRO should cooperate closely with forest products research laboratories and promotional agencies in expediting these functions.

23. The Consultation urged the governments of developing countries to encourage, as appropriate, the use in domestic housing of lesser known species, including those requiring essential but simple and low-cost treatments in their production and application. Not only would this increase the availability of cheaper building products, but it would also assist in establishing the position of these woods on export markets. Another way to expand the local supply would be to make greater use of the utility grades of the more expensive export species.

24. The Consultation was of the view that governments should announce, whenever possible, detailed information on both their short and long-term housing programmes, in order that forest policies generally, as well as the harvesting and processing of wood products. might be planned to avoid shortages or surpluses in the demand-supply balance.

25. The Consultation requested international agencies, particularly UNCHBP and FAO, to collect, collate and disseminate regularly regional and world information on:

(a) housing needs, and the construction of houses, as well as on the use of wood for these purposes; and

(b) the supply potential of wood for these purposes, in the form of quantitative and qualitative appraisals of the trends in the harvesting, production and marketing of forest products.

For this purpose, governments were urged to maintain and improve data for periodic reappraisals of the supply and use of wood in housing. This might also require the filling of gaps in available information with respect to such aspects as the number and construction rates of traditional rural houses, as well as the use of building poles and of other local building materials in such structures.

26. The Consultation urged governments to curtail uncontrolled expansion of agriculture, especially tropical shifting cultivation, into forest areas. This is particularly important in planning future supplies of building materials in view of the changing situation of increasing wood requirements and the improving prospects for using species, sizes and qualities previously considered valueless.

27. The Consultation recommended that countries with inadequate forest resources establish, where conditions are suitable, plantations of quick-growing species suitable for building purposes.