Forestry, one of Montana's traditional industries faces rough times. With continued demands for environmental quality and rejection of the negative consequences of resource extraction, what is the future of our state's timber economy and the communities which rely upon it? Unfortunately for this industry, the future ain't what it was. Here are six reasons why.

(1) Human and natural capital gravitate towards most highly valued uses. The options forgone, what economists call opportunity costs, for seeking a career in woods is high. The forest products industry is second only to Alaskan commercial fishing in terms of worker mortality and injuries. The industry is highly volatile and employment fluctuates widely. Further, workers face long commutes on dangerous roads or remote living locations with little amenities.

(2) Commercial timber in the Rockies' high elevation national forests has a negative economic value, i.e., it costs the Forest Service more to manage a sale than it receives for the stumpage. During the 1970s and 1980s the Forest Service received less than 20 cents for each dollar spent on sale administration. These trees are worth more standing than as boards, especially in the region's roadless areas. These are generally high, fragile areas with submarginal timber. Most logging here was politically driven and the full costs of exploitation were ignored, discounted, and obscured.

(3) One rationale for creating the national forest system was to curb the waste of natural resources characteristic of nineteenth century private land development. Driving this effort was the specter of a national "timber famine". Today, national forests represent about 27 percent of the nation's forestlands, but provide less than 5 percent of its timber production. In essence, the nations' timber supply is in private hands.

From the late 1980s to the late 1990s, national forest timber harvest declined from 12 billion board feet to 3 billion. Loggers and small mills dependent on national forest timber supply bore the brunt of these reductions. While industry did not actively promote this policy, it was not in their interest to oppose it either. Reduced competition with the supply of timber from federal lands is, of course, an attractive prospect to timber owners.

"Trees like to grow where it's warm, wet, and low". The timber industry understands its long-term future depends on high-yielding, intensely managed plantations on private lands. It has moved operations and purchased lands in the South, where management focuses on the most productive sites. While private operators demand yields of at least 100 cubic feet/year/acre, the Forest Service is stuck with much poorer sites producing 20 cubic feet/year/acre. Hence, federal public land forestry entails far more disturbance (roads, etc.) per acre than private operations.

(4) Westerners have long relied upon the federal "landlord" for substantial economic benefits. The world's largest network of forest access roads (eight times the mileage of the U.S. interstate highway system) is testimony to these efforts. This development was politically driven. And when we include the environmental costs, as an honest accounting must, much of it was grossly irresponsible. Western politicians still speak as though extraction still drives the West's economy. But this is a persistent myth undermining our region's natural evolution from a commodity to a service and information-based economy.

(5) Federal public lands are political lands. National politicians are sensitive to self-interests and will act on political incentives. When decisions are made in the political arena, political considerations trump ecological, ethical, and economic factors. In the final analysis, the best organized special interests will influence the fate of the national forests.

(6) A community with an economy based upon a single factor (e.g., timber) is subject to external influences beyond easy control. International markets, national monetary policy, investment strategies of large corporations, and environmental regulations often matter much more than availability of timber.

Let's be clear: environmental protection alone will not assure everyone has a better future. Everywhere workers with lower levels of education experience problems transferring to expanding sectors of the new economy.

Resource-dependent communities, like others, seek economic progress. Their future will largely depend on how their entrepreneurs respond to changing opportunities and preferences. To succeed, they should focus on their capacity to attract and retain new economic activity. And environmental quality is a key resource which could be squandered by political opportunism.