Deforestation and Forest Land Use: A Comment

Hyde, Amacher, and Magrath (1996) imply that deforestation andtimber rents (logging revenue minus logging costs other thantimber fees) are not subjects that justify policymakers' attention,arguing that market responses limit the scope of deforestationand that rents are usually small. But they fail to recognizethat land markets will not develop efficiently, nor will efficientlevels of forestry investments occur, when policy distortionsand other factors obstruct the conversion of open-access foreststo private or communal ownership. For these reasons rates ofdeforestation can be far above optimal levels. Contrary to theauthors' claims, timber rents often (although not always) arelarge in developing countries. Moreover, the allocation of rentsbetween loggers and the government owners of public forestscan indeed affect the profitability of forestry (and thus deforestation),the intensity of timber harvesting, and national welfare.