Passing family forests on to the next generation


Family forest owners make up a much larger portion of the forestry industry than many people realize. More than a third of forestland in the U.S. is owned by private families, which means that what goes for them goes a long way toward impacting the industry as a whole. More simply, family forests are integral to forestry.

We’ve written over the years (here and here, for example) about how the owners of these family forests are getting older, and that various efforts are in place to ensure the forests aren’t lost to development.

The public radio program Marketplace took up the issue this week with two stories (here and here), taking a look at a pilot program from the environmental group Pinchot Institute for Conservation that would allow family forest owners to sell carbon credits off their land in exchange for health insurance. Pinchot’s pilot is currently limited to two counties in Northwest Oregon.

“It’s very hard for a small property owner — even though they accumulate a lot of carbon — to access the carbon market,” said Woody Richen, who has inherited partial ownership of 450 acres of forest. “It’s a little bit like mutual funds, I guess, where a small investor needs the help of some kind of aggregator or some additional expertise.”

Historically, carbon markets have only been an option for large landowners with deep pockets that can afford the upfront costs.

“We are making a contribution. If others are getting paid to store carbon, why shouldn’t the little guy have an opportunity to do that too,” said Richen.

The carbon markets still have some downsides. They involve long-term land-use restrictions. And experts say the best rate on the current carbon market pays about four times less than selling trees for timber.

Part of the solution is more straightforward than pilot projects or carbon markets: it’s getting the forest owners’ children or grandchildren interested in taking over the land.

The future of the family forest is a topic of dinner conversation in many homes. According to the U.S. Department of Agriculture, about 40 percent of private forest owners in the US are 65 or older.

“That’s driving this huge transition in forest ownership,” said Ben Hayes, a research fellow with the Pinchot Institute for Conservation. “Particularly with families where the land has been in the family for multiple generations, they’re land-rich but cash-poor. So, if this is their most valuable asset, it creates challenges around estate planning and passing it on to the next generation.”

Marketplace profiled Scott Russell, a 69-year-old forest owner northwest of Portland who’s come up with novel ways to get his descendants engaged in the land.

(Russell) walks a fine-line in trying to get his sons interested in the family business.

“I don’t get so passionate about the tree farm that I turn it into an albatross for my kids,” said Russell.

So far, his sons are on board. But just in case, Russell is enlisting support from his grand kids by building small cabins around the property.

“The idea is, if the kids decide to sell, then the grand-kids are going to be, ‘Oh, we built that with grandpa, you can’t sell that piece,'” said Russell.

How’s that for leveraging an emotional investment to protect a physical asset?