Governor's Advisory Committee on Chip Mills

Corrected tape Transcription

GOVERNOR'S ADVISORY COMMITTEE ON CHIP MILLS

JUNE 6,1999
FARMINGTON, MISSOURI

Committee Members Present
Marvin Brown, Co-Chairman, State Forester, Department of Conservation
Steve Mahfood, Co-Chairman, Director, Department of Natural Resources
Emily Firebaugh, Forest landowner, Farmington
Jon Smith, Forest products representative, Mountain View
Sarah Tyree, Special Assistant, Department of Agriculture
Representative Bill Foster, Poplar Bluff
Jay Law, Conservation Federation/environmental, St. James
Senator Wayne Goode, St. Louis
David Bedan, Citizen environmental conservation group, Columbia
Earl Cannon, Deputy Director, Business Expansion and Attraction, Department of Economic Development

Marvin Brown announced that more members of the committee would be coming later. He explained that this committee has been meeting for some months with the task of preparing a set of recommendations to the governor about chip mills by the first of December. Meetings have been held in Jefferson City once a month hearing from a lot of different folks on a lot of different subjects. One of the things the committee felt was important was to get out in the field, that we see a chip mill, that we see some of the forestry practices taking place on the ground and just basically get a first-hand perspective on the things we are trying to deal with here. We are going to do that tomorrow and Tuesday. We've got a very full agenda, and if you've seen it you know we are going to be pretty busy.

We thought as long as we needed to be here this evening we would go ahead and have a meeting and invite folks as we do every meeting to provide any comments they would like on this subject.

I think what we would like to do is just open that up for individuals who would like to provide some comments this evening. We will hear from as many people as would like to say something, and then after that, before we close the meeting this evening, we will talk about how tomorrow and Tuesday are going to work in terms of logistics. Right now I will open up the floor for anyone who would like to provide some information.

MARK HADLEY - I run Hadley sawmill and mining. I have a one-man saw mill operation. I was putting together some figures for Mrs. Firebaugh and thought maybe I would give testimony tomorrow, but I will talk a little bit today.

I have been logging and saw milling for 18 years, and most of my income in the last 18 years has been from that industry. My main products are railroad ties, flooring lumber, and hardwoods. I also work with value-added products. I have my own kiln now and kiln dry lumber and sell to a couple of different cabinet makers.

I own 1,000 acres, and I manage about 1,200 acres. Of that land, I have actually harvested on 1,500 acres in the last 18 years. I haven't even been able harvest on whole property.

I started adding up the yields off that property in the last 18 years, and I harvested 5 million feet off that property in selected harvesting. I would say that I have almost as much timber as I had when I started, and if you put that in dollars in the last 18 years, add the value that has gone into Missouri economy just in the timber I have harvested, it's about $2 million into the state economy off of 1,500 acres and there are trees still coming back. It doesn't look barren at all, it's good timber.

If that ground had been clear cut it would have been taken out of production for 80 to 100 years. If you add up the money to the landowner and the money to the loggers that did the logging, and the money that the employees of the chip mill made, that's only $380,000 that went into the Missouri economy, and you've taken the land out of production for about 80 years.

MARVIN BROWN - Opened the floor for questions.

EMILY FIREBAUGH - Mark, what do you think your land is valued at now per acre?

MARK HADLEY - Its undeveloped land. It's about $300 an acre.

EMILY FIREBAUGH - And that's Iron County? You're over by Annapolis?

MARK HADLEY - It's closer to Lesterville. My timber is really considered pretty poor timber. It's not rich, bottom land soil. The timber comes back pretty slowly, and still I'm having this yield with selective harvesting.

EMILY FIREBAUGH - At $300 an acre, do you have it in any program like the Department of Conservation, Forest Cropland?

MARK HADLEY - I did for years, but that kind of started tying my hands with what I wanted to do with the property. It was better for me to manage it on my own.

EMILY FIREBAUGH - So you took it out of the forest croplands program and paid the penalty?

MARK HADLEY - That's correct. Well no - when it came up on the 25 years cycle I just didn't put it back in. It got to where they were behind with all the work they need to do, and I like to go out and find two or three trees here, or a dozen trees there and take them out if they need to come out. I can't wait to have someone come out and inspect the whole property before I cut one thing. It was too much to do for my type of small operation. I'm not going out there and cutting the whole 1,000 acres in 60 or 90 days. I try to do as little work as I possibly can to get the most amount of money out of what I do because I'm working by myself It's not the normal way to do it, but it's the best thing I found for myself.

EMILY FIREBAUGH - When you get your logs, who helps you?

MARK HADLEY - I do everything by myself I use a four-wheel drive farm tractor, which is a lot narrower than the big skidders. I've had skidders and I've had the big diesel rigs and a crew of men. I find that working by myself and doing it with smaller equipment is a better way for me to operate.

EMILY FIREBAUGH - What do you do with your logging rows then?

MARK HADLEY - Well, most of them are pretty small, and I don't leave much of an impression on the property because I work pretty slowly. Forty or 50 acres makes me a generous income over an entire year. I only cut about 40-50 acres every year.

EMILY FIREBAUGH - All right, now to swing it over to the chip mill industry. What would you do with the chip mill industry in relationship to culls - things that you would never use?

MARK HADLEY - That's an excellent place to market some of the waste that I generate.

EMILY FIREBAUGH - Have you tried doing that?

MARK HADLEY - No, I haven't. The way I operate, and the small operation that I have, I just don't generate enough to really justify doing something like that. Most of my culls go to the neighbors to make firewood out of I just don't generate a large amount like that. Most of the time, if the tree is really bad it's also a den tree, and I like to leave the den trees for the animals. If the trees are bad to begin with, I usually don't cut them unless they are dead or something. If there is a den in the tree, I don't cut it.

EMILY FIREBAUGH - So you are not in stewardship or TSI (timber saving improvement), or any program like that?

MARK HADLEY - No.

COMMITTEE MEMBER - How many of your neighbors and people that own forestland around you do you think are of the same mind you are?

MARK HADLEY - I found most of the time if people get around to selling timber they are interested in the most amounts of money they can get, and not really stewardship. It's kind of a constant battle. The 40 acres of timber I'm cutting right now, all the owner wanted was the most amount of money he could get off the property, and he wants to get rid of the property. Luckily I'm able to pay him enough. I'm actually leaving more trees than he thought were going to be left, and he's happy because I can pay more for the trees I get out. I'm leaving the genotype, the straight young trees - I'm leaving them to come in again in 20 years rather than taking them out.

COMMITTEE MEMBER - Do you have any suggestions on what might motivate people to manage we land such as you do?

MARK HADLEY - Well - that is a tough question. Of course, just giving out the information that there are alternative ways of making a continuous income off your property. But then you get into the problem of finding the loggers who are willing to do that too. They have got to be schooled, and they have to understand the better ways to log to keep the young timber, the prime, straight, tall young trees from being damaged. I realize they may cut that now and realize a $5.00 income. But if they leave it there for 20 years they realize a $35.00 or $40.00 income. That is hard to do, because all they're out for is to fill their truck as fast as they can, and everything that is there doesn't get cut. It's got to start almost with the logging industry and then that way it will carry over into the landowners.

COMMITTEE MEMBER - Doesn't the landowner ultimately decide what trees should be cut?

MARK HADLEY - They can give guidelines as to the sizes and things. Unless it is a piece of land I am managing for the long-term, usually the case is they just want to get as much money off it as they can - whatever you can cut. Sometimes they will say "I don't want any pine trees cut" and things like that. Normally, an independent landowner, when they realize that there is money in the timber, and if they need money, they are going to want everything cut they possibly can. Unless there is a logging operation there that says "look, if we only take out the tie timber now, in 15-20 years we can come back and the trees are worth three or four times as much as they are now, then we can take out tie timber again and you are going to realize more money." So the loggers have to take an active part in this stewardship. We really are offering a service to the landowner. What the landowner wants we can do, but we can also have an input.

COMMITTEE MEMBER - Are you familiar with the logger training program?

MARK HADLEY - Yes. I get things in the mail on it.

COMMITTEE MEMBER - Would you put education ahead of regulation of private land?

MARK HADLEY - Of course, I would rather educate than regulate private land ownership. I have seen the opposite. I was able to go to Switzerland last October, and I actually got to go to the national show force and talk at length with them about their stewardship practices. It was really fascinating, and it works very well. But there you have a case where it is total regulation, and as a landowner you have to do what the people in charge tell you. It is working, their forests are fabulous in Switzerland. I was just shocked. But that's like the opposite side of the fence, and I don't ever see where we should take the rights of the landowner away; we just need to tell them there is an alternate way to do things.

COMMITTEE MEMBER - Where did you learn the business and the harvesting techniques you are practicing? How did it all get started?

MARK HADLEY - The school of hard knocks I guess. I went to school to be a geologist, actually, at Rolla. I was peddling mineral specimens from the Vibernum trend after school, and someone came to my door and said: "boy, you've got some good timber and I would sure like to cut it." I got to thinking if they are going to make money at it I might as well do it. So I just got into the business and it took off from there. I learned things, I guess you would say by uncommon sense or common sense - things that just made sense that this is my land, and if I want to get the most out of it and I don't want to work very hard, and I want to get the most out of what I do, leave the young trees where you are doing all the extra work. If I cut a big tree, or a little tree, it takes the same amount of time. If I realize $50.00 out of the big tree and $10.00 out of the little tree, I don't want to cut the little tree. It's not so much what you learn, it's just that I'm Lazy!

COMMITTEE MEMBER - Did you take advantage of any of the training programs by the Department of Conservation?

MARK HADLEY - No, I did not.

EMILY FIREBAUGH - Do you know of any loggers in your area that have taken advantage of the training?

MARK HADLEY - No.

SARAH TYREE - How would you feel if there was a mandatory licensing for loggers and you would have to go to a class to learn basically to do what you are already doing?

MARK HADLEY - I think it would be a good thing as long as I could grandfather into it.

In Switzerland they have to go to college to operate a skidder and cut trees. It's unbelievable for us to think of that, but they can't get a job unless they have a college degree to learn how to do the forestry. But that's totally different. Everything is regulated over there, but they are used to it and we are not. I don't know how you are going to get all the loggers educated and do it the right way. Most of them are just interested in the paycheck, and they may show up the next week and they may not. That was my experience. You can't justify putting the money and the time into training someone when two weeks later they don't even show up for work.

MARVIN BROWN - Before I open up the floor to any more comments, we did have another committee member join us.

Mark Garnett, representing the timber industry, joined the group.

Mr. Brown opened the floor again for comments and requested that speakers use the microphone so everything could be recorded.

DALE LOVETT - I'm here on behalf of the Pulp and Paperworkers Resource Council. Our organization represents over 350,000 people in the wood products industry. We are people from the plant floor, union and non-union wood and paper workers.

I want to share a brief story with you today that helped to form the creation of the Pulp and Paperworkers Resource Council. It goes like this. "This evening officers were called to the scene of an apparent suicide. A 31-year-old male worker facing the prospects of unemployment sat down in his mobile home, put a 9 mm gun to his chest and pulled the trigger. He leaves behind a wife and three children. Officials say the mill where he worked is shutting down next week." You see, the Pulp and Paperworkers Resource Council was started out of desperation. Our industry was losing thousands of jobs in the Pacific Northwest because of the Endangered Species Act.

Scenes like this one I just described were happening far too often. Knowing there is power in numbers, a group of labor folks got together and formed a grass roots lobbying group called the Pulp and Paperworkers Resource Council. Our purpose statement reads: "to establish a grass roots coalition concerned with fiber supply, forest practices, the Endangered Species Act and our environment in a way that promotes knowledge and political activism so we may influence legislation that affects ourjobs. Our motto is seeking a balance, and that is truly what we have tried to do.

As a forest products worker I am able to make a living wage to support my family. The forest products industry not only provides living wage jobs for families like mine, but it also provides a strong economic base for local communities. For the last decade, forest product workers throughout the nation have been living through a crisis in the woods. In the early 1990's the Pacific Northwest became a battleground for federal land management policies. Now 75% of our national forests are off limits to timber harvesting. These restraints have closed over 300 mills in the Pacific Northwest causing 35,000 of my union brothers and sisters to lose theirjobs. That is why I am here today. Our industry continues to face restraints on supply, and while government officials restrict public lands, regulators are now turning their attention to private lands.

Chip mills have become a major issue focal point for the south. Like the spotted owl issue, chip mills are a surrogate for the real issue - timber harvesting. Chip mills are being used to attract public and political attention as well as sympathy for an agenda that will attempt to prevent the cutting of trees in another major timber region of the United States - the south. This week you will hear many different opinions as to how chip mills in Missouri should be handled. When this committee drafts its report on these comment periods and hearings, it is my hope that each of you will include in it the people and the affect the forest products industry has on the many workers, families and communities in Missouri. It is by no mistake that we as a nation have 30% more forests in America today than we did 70 years ago, and our population has more than doubled. This did not happen by shutting down the forests, it happened because we are the best stewards of the forests in the world. I thank you.

MARVIN BROWN - Would you want to take a few questions?

DALE LOVETT - I'll try.

COMMITTEE MEMBER - What is your name?

DALE LOVETT - My name is Dale Lovett. I'm not an expert on anything. I'm just the average guy that lives down the road and works in a mill. I have seen devastation throughout our industry because of over zealous regulations, and I wanted to be here today to comment. So please don't ask me specific questions because I'm not an expert on any of these issues.

EMILY FIREBAUGH - Dale, where do you live?

DALE LOVETT - I live in Paducah, Kentucky.

EMILY FIREBAUGH - So you work at Westvaco?

DALE LOVETT - Yes, I sure do. I have been at the mill 15 years in July. I have seen many, many people in the Pacific Northwest lose their jobs in pulp and paper mills and saw mills because of over zealous regulations.

EMILY FIRIEBAUGH - Westvaco has been in southern Missouri for at least 20 years, and you haven't seen any failure of products from Missouri to Westvaco coming through Westvaco to Paducah have you? Have you seen shutdown of any products being transferred?

DALE LOVETT - No, I haven't. I see the potential coming in the future. The Kentucky state legislature passed some legislation about one- and one-half years ago which begins to regulate the harvesting of trees - the small landowner versus the large landowner using sustainable forestry and best management practices. We are not against those kinds of things. As a matter of fact, we are proud of our industry and the efforts they are making through sustainable forestry issues and the AFandTA, and we are beginning to welcome third party verification. But no, we have not seen any shutdowns as yet.

EMILY FIREBAUGH - Dale, let's take this one step further into your lifestyle. If you are from Paducah Kentucky and there is somebody in your family, or you own 100-200-300 acres with some trees standing on it - or you have an uncle or cousin or somebody that does; do you know anybody that has timberland in those amounts that has sold that timberland, or the rights to cut on that timberland, to a chip mill and have had their land clear cut by a chip mill?

DALE LOVETT - First of all, nobody in my family is a large landowner at all. We all live in small areas. I'm not aware of anyone that has had any land clear cut in our area. I did visit the Tennessee Valley Authority land between the lake area this past Wednesday, and visited the site of the timber harvest there where they just did thinning of the area. I can't tell you where the logs or the pulpwood was left over - I can't tell you where they ended up.

EMILY FIRIEBAUGH - Mr. Lovett, if I were to tell you one of my major objectives might be in the future to keep chip mill companies from cutting on federal and state land so that I will get more per acre from cutting off of my private land so that I don't have to compete against the federal government, in a way I'm still going to help supply your industry, but I also want to help my industry. Would you have a problem with that attitude, that I'm keeping chip mills and loggers in general off of federal and state land?

DALE LOVETT - First of all, I think we have to continue to cut trees off of federal and state land. The forest is not a resource that you can abandon, and it will always be there. Disease, insects, forest fires, something will end up clear cutting part of that land. As far as limiting the harvest on public land, you are going to put more pressure on private property where they may very well be over harvested.

I know that scenario. I think it's 50% of all the softwood timber in this country is on federal or public lands. When you stop the harvesting of that timber, you put a tremendous amount of pressure on the private lands where they can be over cut for the sake of trying to earn a profit, I see your point, I just see it being a lot more complicated than that. Again, we can't just simply say we can't cut any trees off public land because, like I say, the forest is not a resource that you can abandon and it will always be there. If it burns up nobody got any value from it.

COMMITTEE MEMBER - Does your organization represent chip mills workers in Missouri?

DALE LOVETT - I guess we represent people working in a lumberyard, logs or something. We are trying to keep our resources available to provide jobs, if you want to put it that far. We are all hourly people. There is a condition of this organization. You have to be an hourly employee to be a part of us. We don't get any management folks in, they can't speak on our behalf

COMMITTEE MEMBER - I was curious as to how many members you have in Missouri?

DALE LOVETT - We don't have anybody here yet. Our organization is about five years old. In fact, because there are no paper mills in Missouri we haven't been over here heavily involved yet. We have been in for cluster rules, and we don't have a lot of dollars for organizing.

One of the concerns in Missouri is that the chip mills seem to export (chip mills?) out of the state, so all the value-added economic activity is somewhere else, some other state, or some other nation, actually. I guess where our local saw mills provide a lot of jobs, when you make a plea to support workers, I can't figure out how that is going to support Missouri workers. It sounds like it, but I would actually be sending the job somewhere else.

We have a provision statement about the export of our natural resources. We are not for that. We don't want to see our natural resources go overseas, out of this nation to competing nations for tariffs as high as 45% on our finished product entering their country. Yet they allow the importation of our natural resources, the log, wood chip form, at almost zero tariff. They see the light. "If we can get their natural resources, we'll put our people to work making a product and then we'll sell it back to them. Here at a duty free market."

EMILY FIREBAUGH - One of the reasons why I enjoy being on this committee is because when I put a bid out to have some of my standing timber cut my local loggers did not show up. The reason why is because of the chip mill industry supposedly was moving into the area with such an impact that my local loggers said: "I'm not going to compete, I'm out of business and grandfather told me he wasn't bringing his grandson in." So, you're not really concerned with the person that is out there logging and milling on the local level. You are not interested in the person who is cutting and making a living off of a stand; you're interested in just getting the logs to your employees so you'll be employed at that place. Do you have a statement in that with your organization?

DALE LOVETT - First of all, I do not represent Westvaco here today. I'm all for the person out there cutting the trees because he's got employees. He's got folks out there working in the woods with him. I am concerned about the sawmills having the fiber or the timber to provide the jobs there. There's a lot more jobs than just the pulp and paper mills out here, and I'm not just concerned with us getting our fair share of the fiber. I'm concerned about all of us as Americans having jobs. And, again, as you guys have said, you guys in Missouri are seeing the exporting of your natural resources here. That concerns me very much.

EMILY FIREBAUGH - Did we send as much to Kentucky and places like that as we do to Japan? It really doesn't make any difference. I'm following his train of thought that we are losing the value-added in the timber business from Missouri.

DALE LOVETT - I can't speak on behalf of the industry or employer s, but I certainly wish they would locate here. And there is competition out there for the fiber, I realize that. As a free nation we all have the right to start a business, whether it be saw mills, or pulp and paper mills, or places that make molding and doors.

As far as commerce goes, you know things in Kentucky are sold out of state also. Coal is a big thing in our state. We ship it out on rail and by barge to other places that want to make electricity. There is a lot of give and take in natural resources, and maybe I haven't addressed your question exactly like you wanted, but that's the best...

EMILY FIREBAUGH - It's really interesting that you have this council, and thank you. You have been a big asset.

DALE LOVETT - Thank you.

STEVE MAHFOOD - This may or may not put your mind at ease, but I think it's safe to say that the number one interest and highest priority of everyone on this committee is a sustainable timber industry. There is a fear, though, among a number of us that the chip mills may have a negative impact in the long run on the sustainable wood products.

DALE LOVETT - Just one comment. I hope that we do a better job than we did years ago. As I said, we've got 30% more forests in America today than we did 70 years ago. That's no accident. That's because we are doing a betterjob of taking care of the forests. That's because we have reforestation practices. We have put that into place. At the turn of the century it was just slash and cut and let's move out. We don't do that any more. Sometimes there's the perception that we do that, but the facts are that the forest products industry I'm going to say planted like 1.5 billion trees, I believe in 1996. That's a whole lot of trees going in the ground, and there are folks that are saying that's just tree farming. We know that the hardwoods regenerate themselves.

COMMITTEE MEMBER - We are very much aware that there are a lot of good practices. Hopefully, most people in the industry do these things.

DALE LOVETT - As I said, we try to see that the natural resources stay here to provide the value-added jobs. It's very important that we as Americans have good jobs that pay a living wage and have benefits where we can send our children to school so they will do better than we did. I share your concern. I don't want to see us rape the earth and walk off and leave it.

MARVIN BROWN - Before I open the floor for comments, we have had another committee member join us. Senator would you introduce yourself

Senator Doyle Childers arrived at the meeting - 29th Senate District.

DEVIN SCHERUBEL - I represent Hartwood on the regional level. Just to speak after the last speaker, I want to check the facts with my recollection. My recollection and understanding of the facts is that the highest rate and number of jobs lost in the Pacific Northwest were in the decade preceding the spotted owl case and can almost exclusively be attributed to mechanization and export of forest products in the Pacific Northwest.

Since the spotted owl case, the economy and the number of people employed statewide has increased in Oregon, not exclusively in the forest products industry, but overall. And that's because most of today's high dollar industries are not in forest products industries. Those, as we have just noted, have been exported, and what we have seen is high tech industries move to the area because they like the environment there.

It's also less important, but sort of an interesting piece of trivia, it's actually a misconception that the Endangered Species Act was involved in that. While the northern spotted owl is an endangered species, the lawsuit, which started the whole proceedings, was with the Clinton plan and Option 9. The compromise over old growth in the Pacific Northwest was brought under the viability requirements of the National Forest Management Act, not the Endangered Species Act.

We take some pretty strong stances for the forest, and I like to base them on facts, and not rhetoric, when possible.

So - what to do about chip mills in Missouri. Well, I can tell you about our membership. As I have already said, we are very much in favor of forest protection. We've made our name for ourselves primarily on working on public forests. It is interesting to note that no one has seen a decrease in volume coming to the chip mills surrounding Missouri in the last years because the volume on Mark Twain National Forest has dropped precipitously since we have encouraged the federal government to follow the laws that are already on the books for forest management, including the Endangered Species Act on the Mark Twain.

I know that our membership would like to see a similar phenomena on the 5% of Missouri's forest land that is managed by the state of Missouri. We would like to see response to this sort of increase in pressure and demand that is taking place from population, from chip mills, from the changing dynamics of the forest products industry nationally and internationally to focus on this part of the world. We know that is going to mean increased logging on private lands. We know that they are already after every bit of private land that there is. We don't see that limiting logging on public lands is going to increase the pressure anywhere. It may increase the price as was noted already.

Every acre is already targeted. If you do the economics on that sort of situation, if you decrease some of the supply you will increase the price, which we hope will lead to more sustainable management through the ability for people to hire foresters and create forest plans and do things that are in the best interest, both economically and environmentally.

While the demand is increasing on private lands, we know there are other values that forests provide: clean water, habitat, hunting, fishing, and recreation. We know that demand is also increasing as population increases, and the Ozarks become increasingly populated by people moving away from the city and for recreation in the Ozarks. We think that public lands are an appropriate place for those values to be met, so we would encourage the committee to consider a recommendation to set aside the 5% of Missouri's forests that are on state ownership for those other values.

What would we like to see on private lands? We would like to see sustainable communities and sustainable jobs that are based in a living forest. We believe that communities that have a long- term attachment to the land and can live in an area are the best stewards of an area. We think that forestry will play a part in that for the foreseeable future - probably for all time. We would like to see that done in a way that is sensitive to the land and sensitive to the workers.

I guess a friend of mine said it well: "It's not jobs versus the environment, it's communities versus corporations." That's what we are looking at in America today. It's not just chip mill corporations, it's Wal-Mart putting other small businesses out of business- it's a whole pattern of economics and small businesses versus major corporations, consolidations, elimination of jobs, mechanization. Those are the dangers to the American work force and to America's communities. At least that's the way our membership sees it. Our membership, by the way, is primarily forest owners throughout the eastern U.S.

What can we see to encourage that? Certainly we are in favor of educating loggers and educating landowners with whatever there is. I don't know, I think Mark might be a little modest. I think he deserves some money too. I think that we would like to encourage the committee to consider the ramifications of various tax policies on land management.

What are the ramifications of property tax structures, of inheritance tax structures? What is the appropriate role of a severance tax in providing monies for maintaining roads where there are heavy trucks and equipment? Those are the kinds of issues we would like to see this committee deal with as thoroughly as possible.

We have recently hired someone to work on this question, and we will be working with you over the upcoming months to address these questions.

I guess lastly a related question in my mind is: "What happens with subsidy monies?" I think it has come before this committee already, but there has been an economic development - grants that have supported chip mill development. In Missouri we would like to see maybe the committee recommend that a closer look be taken at how those monies are distributed, and that the type of values that Missouri's rural communities have be taken into account when disbursing those funds. What are the impacts on water quality? What are the impacts on the number of jobs in the community? What are the impacts on long-term sustainability of the natural resources, whether that's farmland, forestland, rivers, etc.? Perhaps we should be considering 280 billion tons of excess agricultural fiber nationwide. Maybe there should be some development nationwide. Maybe there should be some money put into developing some of that fiber into paper that can be used. We are talking a lot about some of our trees that will grow to be larger trees and provide many other values as being underutilized. Certainly rice straw, which is being burned in the air, is an underutilized resource that makes pretty good paper.

COMMITTEE MEMBER - Mr. Scherubel, I was interested if you feel there are some programs or laws in other states that you feel we should look at as possible models in Missouri. Any suggestions?

DEVIN SCHERUBEL - There are. I can't claim to have all of them. I know that there is an interesting program in Kentucky where (and this had to do with the question of economic development monies) there are some requirements for doing an analysis on the impacts of providing economic development - what that industry would do environmentally and socially. I think that is an interesting case. I know that there was quite a bit of work done in Tennessee. Not all of that has made it into actual legislation at this point in time. The folks with the Dogwood Alliance, the Tennessee Environmental Defense Council, the Audubon Society and others in Tennessee, have done some pretty thorough research into what sort of things could benefit forestry in an area which, in some ways, is similar to Missouri. I presume you are all aware that there is a similar process in North Carolina going on at this time, and that our regional organizations have had a foot in both Missouri and North Carolina. We hope to see lessons learned in one place benefit others. We can't afford to throw away information as little as we have.

EMILY FIREBAUGH - We had the report from the committee in Tennessee and they did not address the chip mill industry at all.

DEVIN SCHERUBEL - Yes - that was the legislative committee?

EMILY FIREBAUGH - They gave us a full afternoon of reports.

DEVIN SCHERUBEL - Not to burden the legislators on this committee, but legislation is a complex process that doesn't always see all the good thoughts that come before it end up in the final report.

There were things addressing chip mills, which those organizations brought, and we're hoping to see come into legislation. Another organization spawned a second bill and diluted the public interest in the first bill, the first bill didn't pass and the committee didn't end up addressing a lot of the issues. The folks in Tennessee are in the process of regrouping and hoping to bring that back at some point,

I don't think anyone can claim to have the answer to the question. This is a new time we are looking at, a new industry in our area which has already helped increase the cutting in our part of the country, back to near its historical record levels and is pulling to push it further.

EMILY FIRIEBAUGH - Where do you live?

DEVIN SCHERUBEL - I live in Columbia, Missouri.

EMILY FIREBAUGH - Do you have neighbors that have sold 200-300 acres to be clear cut by a chip mill company, or have you been out to discuss this with anybody on their land to see why they sold? Was it profit only? Was it I don't care what happens to the environment attitude? I know what you are trying to say, but have you talked to someone who has actually dealt with a chip mill company? We're trying to learn from that point of view also.

DEVIN SCHERUBEL - That's a good question. I don't hang out with a lot of clear cutters. It's just one of those social facts I guess.

SARAH TYREE - I appreciate all your participation and having people here - it's really good. But the majority of them are forest owners. Did you say that most of them would never have any logging done whatsoever on their land?

DEVIN SCHERUBEL - I wouldn't respond to the property rights organization. About half of our membership remain rural forest owners and it was started almost exclusively by rural forest owners. They were managing their land for a variety of reasons, as most people did. There are studies on it - non-industrial private forestry landowners I think it's called, and there are several studies that have been done. Our membership is similar to the results seen in those who largely bought their land for its scenic and lifestyle benefits. A good number of them had realized some profit from the land when they needed some profit and have found ways to harvest trees in what they feel to be a reasonably sustainable fashion. When we formed the organization, the biggest bad player that we were aware of was the federal government. That's why we chose as our first issue for reform on the national forest. These are people who mostly bought land as remotely as possible, which often meant in and around the national forests only to have the land next to them clear cut and their property values decreased and their waters be muddied and their wells go dry. It was a problem for them.

COMMITTEE MEMBER - How many members are there in the state of Missouri?

DEVIN SCHERUBEL - It's difficult to get an exact count because we are sort of an interesting organization. Individual members, I believe we have around 100 in the state of Missouri, and then there are organizational members which I believe there are 5 of them in Missouri. Each of those organizations then has memberships, and I'm not necessarily privy to all of that information. It's difficult to make an exact account.

EMILY FIREBAUGH - Do you have a web site.

DEVIN SCHERUBEL - We do www.Heartwood.org. If you want to look at information specific to Missouri, there is one of our member organizations in Missouri called Missouri Heartwood. You can use \MO to get to the Missouri Heartwood site.

Thank you.

HOWARD MILLER - I represent an organization of six: my wife, my three sons, and my daughters and myself.  I'm a retired minister and a retired schoolteacher.

Two things come up in my mind. One is the parable that I have kind of conjured up in my mind. I have two sons that live in Louisiana. These Louisiana crackers were people that caught alligators, and they made a living for themselves catching these alligators. One time there was a giant alligator - the biggest thing that you had ever heard of And they put out a big reward on that alligator. So these guys went out, and they always had their ropes and things, but they carried a ten-gauge shotgun just in case somebody got in an alligator's mouth and they had to do away with him. They had a big old flat boat. One night that alligator came swimming out there and he ran his head right under the boat. Boy we got him, we got him! They grabbed their ten gauge shot gun, shot the alligator and sank the boat and the family got what little reward they had.

To me this kind of reminds me of the chip mills. Getting that right now and let the rest of the generation's worry about something else.

Another kind of comes from my teaching. It seems that I read one time about a goose that laid golden eggs, one egg a day. Everybody was happy with that until they decided we're going to kill that goose and get all the eggsv one time. Well, any of you that know anything about gooseology knows that they don't make but one egg a day, and so they killed the golden goose. To me I think that would probably be my estimation of what chip mills are going to do to our timberland. It seems like ages ago at the age of 21 my younger brother and I cut 130 trees from Fredericktown until 2:00 in the afternoon and then we went fishing. And if the conservation folks will turn off for awhile, we caught enough fish to do all that week we were living out in the woods. It was an old truck rack with a tarpaulin over it, -.and we'd kill a squirrel once in a while. So we fried fish for two or three days. We got back into Fredericktown and everybody was excited. The world was supposed to come to an end on Thursday, and we didn't come home until Friday.

I still have a little over 100 acres of ground out on Buck Mountain Road, and it is in a tree farm. I don't know if I'll ever live to be old enough, it's been in there about 20 years, and I don't know if I've got five more years to get out of the tree farm or not, but there's been no marketable timber cut off of that tree farm. All of it but about three acres is in timberland. I do believe in conservation because I've seen people that have lived generation after generation after generation on wood products and tree farming. That's why I think it's important for you legislators and our people in power to at least regulate.

I know I had a brother-in-law that had a good fishpond. You know him, Earl Thomas, and the chip mills came in and they cut all the timber off above him and now his pond is full of a lot of muddy water. He can't catch very many catfish out of that pond or lake anymore.

EMILY FIREBAUGH - By the way, Mr. Miller's brother-in-law is one of our guest speakers tomorrow morning.

Mr. Miller, tying in with Mr. Scherubel, you mentioned one thing about the goose and the egg, and Mr. Scherubel did also, on inheritance tax. A lot of the small farms and small acres of timberland farms that are out there have had to be sold off to pay off inheritance tax. Do you think that would be of benefit if small landowners could save their farms and lands instead of selling them off for inheritance tax?

HOWARD MILLER - Yes, I think there should be some kind of tax break for people that keep tree farms as well as the ones that put their land in pasture and decide they're going to let it grow. It's a wonderful program.

EMILY FIREBAUGH - Did you know that the Department of Agriculture does not consider tree farmers as part of the agricultural strain of livelihood and crops?

HOWARD MILLER - I assumed that.

EMILY FIREBAUGH - For instance when we get a blow down we do not have an insurance program to buy into or benefits to get subsidized, etc. etc.

TONY GOODWATER - I spend a lot of my time in forests and streams and enjoy a lot of the opportunities for meditation, insight, as a lot of people I associate with do. One comment that came from a gentleman on the committee disturbed me a little bit. I feel an interest in the sustainable timber industry, but I don't think that should be our number one priority. I would hope that the ecological integrity of this great evolutionary marvel called the Ozarks is our number one priority. That the sustainable timber and industry would follow from that.

MARVIN BROWN - Asked if there were other people who would like to provide comments.

MARK HADLEY - There are a couple of points I would like to make that I missed when I spoke earlier. Clear cutting is a way to increase the yield off the property. In fact many fold. But the cost of proper management of a clear cut is something that most landowners just can't handle because in our forest environment the money that comes off of that harvest would have to be all put right back into the property in order to properly do a clear cut because it takes a lot of money to go back in and weed out the smaller brush and keep the trees you want to come up growing properly. It's impossible for the normal landowner to spend the money it takes to do a clear cut properly. That might be something the state can look into for healthy landowners to clear-cut.

I personally don't think that any land that has good geno-type, in other words the young, straight trees, there, it needs to be clear-cut. Because of the cost problem, with proper management you're better off leaving the good, young trees to come back.

The other point I want to make is that my experience with what I've seen with the chip mills, there may be a couple of gentlemen mad at me after this, but one of our biggest employers in this area in the timber industry is the pallet operation. What I see are the very trees that the pallet industry needs to produce their product are being turned into chips and being shipped off. I think that's a real issue here with what we are trying to decide. I think there is a place for chip mills. They can be part of a good marketing and a good management program. But fight now I see their operations are taking all of the perfect size logs for a pallet industry and chipping them up. I think that's going to really hurt us down the road.

EMILY FIREBAUGH - Mark, I have two questions to ask of you. First of all, have you found that there has been a price drop in ties because of a glut in the market at this time. I've heard that there is a $4.00 per tie drop because of a glut, and some mills down by Piedmont have said they aren't taking anymore.

MARK HADLEY - They are tightening up their specifications. My price hasn't dropped, and they are still buying everything I can cut as long as I can keep the quality.  It has a lot to do with the railroad industry, whether they are buying ties or not. If the railroad industry doesn't buy ties, then the treatment plants are only going to want the very best ties, and they are going to want to pay less for them because they have to sit on all that product until it opens up again. So that is like an investment for them. They try to keep things going by buying, even if they aren't selling, but they are going to want to make a little money on their money.

EMILY FIREBAUGH - You have not found that you can get rid of your culls or trash, or whatever you want to call it, any easier than ever before?

MARK HADLEY - Being able to sell that to the chip mills by the ton is a fantastic thing.

EMILY FIREBAUGH - And you're finding that the landowners are taking advantage of that and the chip mill is happy to receive it?

MARK HADLEY - Yes.

EMILY FIREBAUGH - That's good. Then, do you really think it's fair for the government to come back and subsidize the private landowner? For instance, if I sold my acreage to be clear cut, and then I come knock on the door of the government to ask for money to subsidize me...?

MARK HADLEY - When you put it that way, that makes it kind of.. We have to look at the overall picture. I don't think that people should clear cut anything with good, young trees there. But the problem is that's not what is happening. Landowners are wanting to get every dollar they can out of their ground. The only way to manage a clear cut is to put money back into it to manage it properly. Of course, that brings us to a whole batch of other things, and that is if you are clear-cutting and you are replanting, most of these people aren't putting in native species. They are putting in species from other areas, and that's bad for the whole environment, because if you have one kind of thing growing in a large area, and it's not what our animals are used to they don't know how to react to those different species.

You can say the government shouldn't be giving money to the landowners, but also we shouldn't be clear cutting and even managing properly because we are being harmful to the environment. Still, getting back to the whole point, that even on my poor ground, I'm better off selective harvesting than clear cutting. I see almost no scenarios where clear cutting is proper.

COMMITTEE MEMBER - Mark, in your mill pile, what's the smallest diameter log you can operate?

MARK HADLEY - My mill is quite unique in that I can cut most anything down to a 36" long log, down to very small. Of course, you start working with a low value product then. I can make slide wages cutting skrag blocks on my mill. I just don't do it because I would rather cut a railroad tie.

COMMITTEE MEMBER - Are there any skrag mills in your area? Do you see any impact by them? Does anybody want to explain what a skrag mill is?

MARK HADLEY - A skrag mill is a mill that runs on short logs - four foot logs. Any country boy with a pick-up truck and a chain saw can go out and cut these skrag blocks and haul them in.

COMMITTEE MEMBER - Does your outfit buy short logs like that?

MARK HADLEY - No.

COMMITTEE MEMBER - What is the shortest log you buy?

MARK HADLEY - Eight foot. Most of the time skrag mills, at least in this area, are not buying from large operations that cut thousands of acres a year. They are buying from the fellow who is trying to make a few extra dollars for his family. They really don't impact as much as a big, mechanized operation. In answer to your question, I really don't see the scrag mills affecting - and besides, that product is being made in the pallets right here in the state. So not only are the fellows making some money with their pick-up and chain saw, but also the value is being added to the product right here.

COMMITTEE MEMBER - I was just asking as they are concerned about the loss of smaller trees and skrag mills.

MARK HADLEY - Most of the fellows are going out and cleaning up after a logging operation. I would say nine out of ten go in after a logging operation, and they are cleaning up the waste. That's fantastic. In Switzerland I saw them doing that. They go in and process every bit of the tree down to four inches into lumber, and then the branches, six inch to smaller, were being put into pulp wood piles and then all the brush was piled into piles right there in the woods. They really take it right down to the nub.

COMMITTEE MEMBER - Do you think that's a good practice?

MARK HADLEY - Of course it's a good practice.

COMMITTEE MEMBER - Ecologically is that a good practice?

MARK HADLEY - There is argument both ways. I would say that it all has to do with how hard you want to work and how hard you manage your property. I personally leave most of my tops out there, and I probably ought to clean them up a little better and sell to the scrag mills, but I don't. I'm trying to run the whole thing by myself and something has to give.

COMMITTEE MEMBER - Do you produce about 130,000 feet a year?

MARK HADLEY - Somewhere around there. I produce about 1,000 feet of product a day, so 250 days of work, 250,000 feet.

COMMITTEE MEMBER - It could be 40 acres a year.

MARK HADLEY - It could be. I take a lot of time off. I probably work 200 days a year.

COMMITTEE MEMBER - Is that your sole source of income?

MARK HADLEY - No, I'm well diversified. In this day and age I think you need to be.

COMMITTEE MEMBER - Mark, you wouldn't, but if you would clear-cut your land would you put money back in it? Would you explain that a little bit more?

MARK HADLEY - Talking about proper management of a clear cut? I was speaking more loosely in saying that's what they ought to do, because I don't think the clear cuts are really the best thing to do. I'm just saying that in order to make a clear cut work, you have to spend a lot of money on it. A large corporation can afford to do that, but what's happening is the private landowners that are selling their timber to an outfit who is clear cutting, or cutting close, they're not going to spend the money back into the property to manage it properly. That's my argument for saying we should selective cut to begin with. Of course, if the state will pay money to have people manage in the long run, if it's done properly, you could see six or eight times the value in timber on that piece of property. Now you're talking about all sorts of regulations, and you're going to spend so much money having people go around to these cuts it's not worth it. Let's just properly manage and selectively harvest to begin with.

COMMITTEE MEMBER - In the fifteen years you have been cutting, have you put any money back into your operation?

MARK HADLEY - I've planted several thousand trees. I'm part of the tree farm association. I'm number 996.

COMMITTEE MEMBER - Do you do any TSI when you're cutting?

MARK HADLEY - To a certain degree. do a lot less than I probably should. But as long as those young trees are there, they are stronger than the diseased ones and I don't see too much trouble leaving some.

EMILY FIREBAUGH - Do you plant hardwoods or pine.

MARK HADLEY - I planted almost exclusively pine, and I planted some hardwoods and they all died. I just found out recently from one of our chip mill operations that they are sending the native pine species at the wrong time of year, and that's why I have had thousands die. The white pine I have had good luck with. But the yellow pine, which is what I would rather put in, I'm always planting in April and I just found out they have to be planted in the fall rather in the spring. That might be something real simple to change.

COMMITTEE MEMBER - You mentioned there are people putting in non-native species.

MARK HADLEY - Like the white pine, which I have done.

COMMITTEE MEMBER - Is there any other non-native tree?

MARK HADLEY - Well, I don't know if tule poplar is a non-native tree.

EMILY FIREBAUGH - Aren't the chip mills coming back with loblolly pine?

MARK HADLEY - They expressed to me they are concerned with planting native species.

EMILY FIREBAUGH - Is there anybody here with the hunting industry - wildlife, birds, deer, turkey?

COMMITTEE MEMBER - What do you mean?

EMILY FIREBAUGH - I mean there is an impact. If you clear cut 500 acres that wildlife has to go somewhere. I have someone who is coming from the hunting industry to speak tomorrow.

TOM KRUZEN - From Missouri Coalition for the Environment. I just want to relay to you what I did on my way over here. I was late because the water pump went out in our well. I did cross these beautiful, scenic rivers.

Yesterday, I sorely remembering how I dragged my canoe down to Jacks Fork picking up garbage with our stream team. It's choked with gravel. It's lower than normal, we need rain desperately. I did more walking in gravel than I did floating. We learn from people like Mr. Jacobs from USGS, that a lot of the original gravel we now find in our streams came from the turn of the century cut, when the first big insult happened.

I wended my way up 19, went by a virgin pine stand that Leo Drey owns and beautifully manages. For any of you who have never been there I would encourage you to see that. It's just a little reminder of what we had. Within ten miles, down A highway going toward Bunker, still in the Current River watershed, and the more immediate watershed of Sinking Creek, within a quarter mile of Sinking Creek, I wouldn't call it clear-cut, probably not in the traditional sense. There were trees left. We're talking slopes, and I don't know what percent of that slope, we're talking camel back humps in Shannon County, straight down those slopes almost to the bottom. Pretty unwise forestry if you ask me. They probably made a lot of money on those logs and trees there. They are beautiful. They were probably not logged because they couldn't get them years and years ago.

Through technology we can now do wonders. I saw four more clear cuts on my way through the lead belts, the various lead belts, the new and the old, and of various sizes, maybe 50 acres. This one on A Highway I am told is going to be, and I may be wrong in this, might be as large as 12 sections. I will be assembling some information on that for the committee for the next meeting. There are people that live nearby that I have contacted.

At any rate, it was pretty ugly. Sinking Creek, itself, reminds me again of water - the fact that the water is now below the gravel because of the lack of rainfall. These are places that flow into the Current River. People were swimming in what was left of the stream. I would ask you to remember that when we do our tour tomorrow and we see various sites. Some may not be hilly at all and might not be attacked by erosion, but I saw A Highway probably should never have been cut. I didn't have time to take pictures, I'll go back and do it.

Please consider the impacts of our elevation in the Ozarks and our thin soil because I grow plants, I know what type of soil I've got. I started with about four inches and built it up to about eight inches, but that's only on about a quarter acre. A lot of this land has less than an inch of topsoil, so consider that as well.

(inaudible)

TOM KRUZEN - I don't know, I'll find that out Wednesday after the tour.

COMMITTEE MEMBER - Are you well aware that Sinking Creek area is a losing watershed.

TOM KRUZEN - Yes, but the gravel is also choking the stream bed and was probably not there before the turn of the century, or at least not as much. There are considerable piles of it.

EMILY FIREBAUGH - Where do you live?

TOM KRUZEN - I live 503 feet from the Jack's Fork River. I moved here in 1981 because the water in Iowa where I was living was undrinkable and was filled with nitrates and would have killed my children. It was that polluted. Probably had atrazine in it as well, but we didn't test for atrazine. So I'm a refugee from the resource wars of Iowa. We were probably coming down here for clean air and clean water. We have had varying amounts of that over the years. We are well aware of the cars in our region and our zone, and the losing capabilities of our ground. Matter of fact, we just did some water testing last week with the Summersville school kids, and the teacher reported that a tree disappeared on her property 32 feet down a newly developed sink hole. So it's happening as we speak.

COMMITTEE MEMBER - It's been happening for thousands of years.

TOM KRUZEN - We can also accelerate things too by how we treat the land on the surface.

MARVIN BROWN - Asked if there were other comments.

TONY GOODWATER - I want to follow up just a little bit on Tom's concept about water, with an idea to ponder. I'm not a tree scientist, but it is my understanding that a mature oak tree has between 200 and 300 gallons of water in it. I think that's something to ponder this week as we look at different trees and forest management systems. Think about how that affects the process of desiccation and forestation and specification. Forestation and desiccation are intertwined, and I believe there is a complex interaction in trees and the weather. I think those trees have a lot of width when regulating our weather. This is something to ponder. I'm not a scientist, but just look with your own body as we are out in the field and try to perceive a sense of love for those trees. Maybe when we go back to our offices in Jefferson City that will affect how we think and what we do.

ED CROPP - I call myself an environmentalist, that may irritate some people. I tested high sulfur coal in high school. I became a forester by going to school and working in the industry for the last 22 years. First on the remarks I have heard tonight, the incident about let's go out there and cut all the big high trees and leave the younger trees to grow. Have you heard the story about the man who sold all his cattle that calved every year and kept the poor ones every year. You wouldn't think twice about doing that to your cattle. Don't think twice about doing it to timbers called high grade. It's the worst possible forestry practice you can do. I've had 22 years of experience, I personally plant one- and one-half million trees a year, and I've overseen the management and clear cutting of thousands and thousands of acres over the years.

Clear-cutting: Here's the way I feel about clear cutting. You call a forester out to your land and tell him you don't want to clear cut. Then go to a doctor and find out if you've got cancer and find out if he says "sorry, I don't believe in surgery, it's too radical, it's just not natural." You're taking away a valuable tool that may save the lives of your forests. This is to say surgery could save a lot of your cancer patients.

Your remarks about value-added products, I don't believe you are ever going to have to worry about a paper mill coming in and adding value by making paper in Missouri with your reaction to the chip mill industry. You make them feel a lot less welcome. The reason I can suggest this is that I'm not employed today, thanks to a layoff by my company. I was a member of the chip mill industry.

EMILY FIREBAUGH - Ed was associated with Canal Wood, and I have worked with Canal Wood on helping improve things through the area for the company.

Let me ask you this, with the loggers that you did use in Madison County in that area, were they going under the name of Tri-Lake Logging?

ED CROPP - That was an independent company. Tri-Lake was a landowner, but they used a separate independent logger to log it. All they did was bring the wood to us. That was our relationship with them. Speaking personally, I have seen better logging jobs. I have been involved in over 700 acres of clear cutting in this state so far, and I can stand here and tell you the only industry and the only people I heard was the wood and cull industry, and 95% of those trees were hollow. What are you going to grow back in 20 years are big, hollow trees? I don't feel any guilt about clear cutting that has gone on. If you're saying all clear cutting is bad, then I'm sorry but you're a radical too in my opinion. It's a necessary tool, it's not my first choice. There's a lot of truth in what he says. If you've got a good, viable stand of young timber, by all means, select market. We've done a lot of that. I did a lot of that with this company. Like I said, a lot of the ones we clear-cut absolutely made the right choice. 90% of those trees were hollow.

SARAH TYREE - You have planting experience, and you know how to go and do the right things, and that's what one desire would be. What would you think of saying that you would have to have a license to go out and log?

ED CROPP - Some states have that. Some states have licensed forestry tax which means you have to be a licensed forester to go out and write the prescription before the licensed loggers go out there. You can go to those extremes. There are already voluntary programs in place. Now, maybe because Missouri is a little young in this industry. When I left Texas and when I first graduated from school in 1978 about 75-80% of the wood was being cut all timber into 14 inches or something larger. When I left about 80% of the wood was being selectively, harvested, management forestry was involved and standards improved vastly. We had a voluntary program. Through insurance breaks and things like that we encouraged everybody to get licensed. That's what they are doing here with the logging force. I think you have to go further than that. I think you need to have a lot more active timber management from foresters on the ground. You can do it all sorts of ways that have been mentioned here tonight. You can have tax incentives, tax breaks, all sorts of programs that can help. There have been all sorts of proposals already made. I think there's a 6% severance tax on the board to push landowner education. But there's nothing wrong with a clear cut if that's the case. All I can tell somebody, be sure you get someone who knows what they are doing, knows that they've got in the way of wood, inventories it. All these things are just practical things. In other timber markets nobody thinks twice about saying "just give me a bid on that and I'll get back to you later." Forestry is being involved, loggers being licensed. I don't think we're ever going to get to the point in the country where all the loggers are agreed.

EMILY FIREBAUGH - I have 88 acres of land that has nothing on it. It was a grant place with a few skrags on it. I was led to believe that one of the advantages of chip mills coming into the state of Missouri was to get rid of our trash, our culls, scrags, whatever you want to call it. But that's what I was led to believe. I was anxious to work with a chip mill company. I worked with Mr. Cropp and some of the other foresters. Instead, I have 88 acres. I can't get anybody to come out and bid on it, I can't get anybody to handle it at all. It would really be better if it were clear-cut. I was advised by Canal Wood representatives that they didn't want to bother with it, that there wasn't enough value in that standing timber to even go in and clean it up for me.

ED CROPP - We had guidelines in at the time, which I, since the time I started with them, thought was artificially high. They would tell me we could only take X amount of tons per acre, I said that's funny, I used to cut a lot less than that. But they have since changed them. Your land is really hard to trek, you've got more rocks than wood.

EMILY FIREBAUGH - That's what I say. Although I did get $16,000 worth of cutting off of it without clear cutting it, but I would have let them clear cut it just to get rid of it and see what came back on its own. That's where I'm saying, in this industry coming into southeast Missouri and dealing with people like me who do sustainable, I thought they would be here for my benefit as getting rid of trash and getting rid of the culls.

COMMITTEE MEMBER - After you clear-cut, how tall do you think a tree would get in a fifty-year period? In Missouri you're dealing with site index from 30-55, or a 15 year period. I think I have seen higher ones, but we're talking in the Ozark area here. We're probably going to have to deal with 40-50 years for saw logs and you might get some pulpwood. In fact 50 years is when they get pulpwood off of something like that They could thin that off in 30 years.

If they invest the money they got when they clear-cut it and put it in the stock market they might get some returns on it. But how many people are going to do that? I'm looking at the next generation. I'm like Johnny Apple Seed, I plant some apple trees even though I probably will never live to eat them.

ED CROPP - I don't want them coming back here in 20 years and finding most of those are hollow. We're only going to get $5,000 dollars off that 100 acres.

Because if you do, it's the wrong thing because you didn't know it ahead and you thought boy that clear cutting is legal and you've got nothing but junk out there. That's what's going to be there for your grandchildren. I think anybody enters forestry - we think long term. We all tend to think of timber in the long run. When I was thinking about being a forester, they told me in my first class in school that by the time you find out your mistakes you're either dead or retired.

COMMITTEE MEMBER - Mr. chairman, I object to starting a debate among people in the audience. If they want to talk they can go outside and talk, but not here.

MARVIN BROWN - We are getting close to the time when we will have one or two more speakers.

EMILY FIREBAUGH - Also, Mr. Cropp with this Tri-Lake Company that has been coming into Madison County and cutting, the gentleman that did Valley of the Dolls called to resell that land after he had clear cut for Canal Wood

ED CROPP - No - he clear-cut and sold to Canal Wood. I don't want to get in trouble saying...

EMILY FIREBAUGH - This is the way he represented himself to me as a committee member and as a landowner in Madison County. But anyway, he said all we left standing were the hickories. I said why wouldn't you take the hickory. He said it's too hard to chip. And then I said, Mr. Smith, what do you do with 600 acres of land that has nothing but standing hickory. He said I don't know. When you say that the chip mill can give us an advantage in our area if we work with you, when you use another company such as Tri-Lake then that's not helping you or me in the industry.

ED CROPP - You won't hear me defending that at all.

COMMITTEE MEMBER - If someone clear-cuts, over this area, after a clear-cut what does the manager have to be, do? What are the sequence and the cost?

ED CROPP - You can do as little or nothing and let it grow up from sprout and stump vegetation, which, if you look at the U.S. Forest Service around Bixby, that area, they are doing a lot of that. You can spend some money for replant, and that's usually what I have been suggesting to people.

COMMITTEE MEMBER - With pine or oak?

ED CROPP - Usually pine, short leaf pine, and you want to try to get something that is as close to native as possible. A lot of people tell you herbicide needs spraying and you need to bum around those pine sites. I'm a firm believer that in a relative short number of years, three or four years, those pines will express a dominance over hardwood, and it won't be a problem. You'll have a mixed stand come in eventually. You wouldn't put it in intensive plantations.

MARVIN BROWN - We only have time for one more comment if someone from the audience cares to make it.

SCOTT BANBURY - I haven't enjoyed your company for awhile, and I look forward to the next couple of days being on a trek around thestate. I did want to make myself available for a little discussion of legislative news that happened in the county seat this year, and also Emily had some questions about wildlife that I may or may not be able to answer because I don't have a degree in ecology or biology, but I have done a lot of studies. As far as what happened in Tennessee, we found that we had incredible bipartisan support for legislation that would have caused our Department of Economic Development to look very closely at the sustainability of industries that are going to receive incentives of any form from the state, whether they are going to get some infrastructure development, community development block grants. Everybody seems to think this is a really good idea. Right now, it's being held up. We have a budget problem in the State of Tennessee. You may or may not know we don't have a state income tax act so people are worried about where the money is going to come from at this point in time to fund that, but we were very warmly received and it was an excellent opportunity actually to get legislators to look at the issues and this kind of sustainability. There was a little bit of a question on the part of our Department of Economic Development in terms of can you apply this type of scrutiny to one industry and not apply itto all industries that might be seeking economic incentives. That's something that might have to be flushed out in the long run, but a very good solution in Kentucky, as has been mentioned, has already done that.

One thing that I did want to address - I was just down to view the Canal chip mill facility today. I didn't see the preponderance of bud rotted or hollow logs that have been spoken about. I saw extremely large 10- 12-14 inch logs that were clear through in their base. But that happens to those trees, they get a rot or fungus that comes up through the root stem. I'm kind of disappointed that we're not going to visit that facility because I think it would be very obvious to people on this committee that the facility is chipping very good wood. I think that's what they want.

I was going to address it earlier on, we had a person talking about job losses in the Pacific Northwest and I thought that Devin from Heartwood did a good job of addressing that. I want to talk about what is happening in the Deep South, in states like Texas, Louisiana, Mississippi. The job losses are occurring with the export of manufacturing jobs to Mexico, to other countries where it is cheaper to set up manufacturing facilities as a result of the North American Free Trade Agreement.

Another source of job loss is occurring actually in the chip mills. I'm really surprised that someone from the paper workers union, representing the paper workers union, would speak in favor of chip mills. I don't know if he necessarily did speak in favor of chip mills because folks in Tennessee just got laid off from a corporation because they decided not to operate a wood yard on the pulp mill site this summer because they are going to get their chips from some remote chipping location. I think they would disagree with that.

The other thing that's happening is people are experiencing economic problems as industry wants to follow the markets, and there is a global market on wood fiber. When the global market for wood fiber is up and Japan has got a good economy going on and they want some wood fiber from us for making paper because everybody is buying there, and they want to be able to produce. Last year, actually a year and a half-ago now, there was big production going on. We were supporting a healthy economy from Asia, and the Asian economy collapsed. We ended up with a bunch of pulp mills that shut down temporarily. We had six weeks shut down of a lot of pulp mills across the south this summer as the company decided that the way to balance their books and not take a loss for the overproduction and getting too much inventory was to just lay everybody off for six months for retooling shutdown. And these were people that lived from paycheck to paycheck. This is not a sustainable way to run an industry, and it's not sustainable for the rural communities that are on the worst end of things. They are at the end where they are getting the least amount of money out of the whole process. They're at the beginning of the value-added process, and its boom/bust, and that's something I hope this committee will consider. It happened around here before, and I don't think our memories are so short that we forget how industries can come in, promise pie in the sky, and then seem to deliver for a little while, and walk away leaving folks with very little.

I can take questions now.

COMMITTEE MEMBER - I was interested in your comment about the incentives, what Tennessee has proposed, and Kentucky has done some things. I was interested in your views as to how you think maybe an agency like ours as far as economic development could best administer and police that aspect. Would we ask for an agreement of sustainability practices in the application for the incentive and then somehow monitor that has callback provisions.

SCOTT BANBURY - We're looking at right now anything that might develop over time. I think ideally you would want to have an economic development grant program that is looking at the most sustainable jobs over the long term. People brought up future generations. I don't think we're there right now. I don't think people are coming out of the universities in economic theory with all the tools needed to put those kinds of packages together. But it's the quick and easy stuff, just looking at your resource base, that you have right now and see that you're going to be able to sustain the projected needs of that industry. I think that what's really important with that is that we're working with real tight data. That's a big problem all across the countries that we don't have real tight data on our force. We have talked with numerous people working with the

Tennessee Valley, have some advanced map;~ing programs. They are a progressive agency. We could right now - satellite photos, the colors that are reflected off of vegetation that are picked up by satellite. We could be doing full inventories right now real time. We could know what the forest looked like this month if we wanted to, if we wanted to apply these technologies. We certainly paid enough money through our military budget toward all this allied technology we should be using it for something for our local communities. It's supposed to be a payoff.

As far as economic development sentiments go, I think there is a lot of work that needs to be done to look toward a sustainable future. Somebody brought up the rice straw situation. It is a reality that southeast Missouri in particular massive amounts of rice straw is burned off in the field area. They can't till it back in the soil, they've got to get ridof it. They bum it. EPA doesn't like th~- because it is causing pollution in the atmosphere., at least the green houz - effect. At the same time, economic incentives apply from those ;ounties where that ri~ ~traw burning is occurring and could very easily be used to develop a processing infrastructure where a pulp could be created and sent to Westvaco pulp mill if Missouri's not going to have a pulp mill. But at least some value can be added to a product that needs to have values added to it.

My assessment, looking at the literature on Missouri forests, is that you have a very well integrated forest product industry here already and that it probably doesn't need too much more help in utilizing its resources because there are a lot of other resources in the state that could be utilized.

COMMITTEE MEMBER - I don't know if you can answer this or not, but approximately 18 months or more ago three of the members of this committee visited one of the chip mill operations. We were told that they would basically be utilizing waste, utilizing tops from trees and that sort of product in their process. Later there was evidence presented to this committee that khey were not taking that type of waste at all and they had some fairly high standards on the quality, size, etc. of wood that pretty much reflected what you indicated you saw in another chip mill recently. Do you know what kind of end product they need in order to produce a marketable wood chip product at the other end?

SCOTT BANBURY - Only on an abstract level. I do know when the industry was first developing their actual mechanics of these operations, they conducted a lot of studies on what kind of logs produce the most acceptable chips. A pulp mill they want, the chips they want, the size, so that they'll know how many chemicals they have to add, what temperature they have to have everything set at to digest those Cnips. If they're too small then they devt:,op too quickly. If they're too big they don't. If they're too long they maybe get jammed in machinery. So they want very specific, consistent, quality product. Therefore, it's not really in their best interest to be processing a lot of rotten materials or slab wood, things that aren't going to give them the most acceptable chips. I flew around the state with my new video camera taking some picture. I would be happy to share that video with people if they are interested. It could be edited first. I think you will all see when you go around those chip mills in Mill Springs there are no waste woods there - it's all whole, long trees. That is what this experience is. Everywhere these facilities are operating, it's more economical for them, and they make more money....

COMMITTEE MEMBER - Is it more economical or is a lesser product usable?

SCOTT BANBURY - I think a lesser product could be usable. I think there would be more costs and care involved with it. I think like anything you can be an organic gardener and remove the pests that's bothering your garden by hand and you're not going to be able to clear as much profit as someone who was able to do it chemically.

COMMITTEE MEMBER - Do you know if anyone has put together any information as to what percentage of the timber harvested is actually going for chip mills and how far it is going for more traditional uses?

SCOTT BANBURY - I assume that the North Central Experiment Station would have the most recent data on it. They do produce an annual or every few years produce a report on the breakdown of where all the wood products harvested in Missouri are going. From my analysis, and from the last report they did, there is a very well integrated industry here, and there was very little wood being produced that was not already being utilized by the charcoal industry and some others out there that are looking at waste woods.

EMILY FIREBAUGH - With companies such as Tri-Lake coming in from the Memphis area and reprocessing and remarketing to the chip mills, there isn't any way, even though the governor has put the identity trace on it, by the time they shuffle it around you couldn't get an accurate count. I saw in the Post this morning that Willamette Industries is bringing that to a lawsuit on the identity of the wood arriving at the mill.

SCOTT BANBURY - One suggestion I heard recently, and I know that this has happened with other cargo that's carried in large vans, they have to have manifests on board that say exactly what their product is, where it came from and where it is going. That might be a partial solution to better tracking exactly where wood products are going in this state.

As far as I know in other states, like there is so many times with agricultural operations, there is some exemption right now that doesn't require them to have a piece of paper that says where it came from.

MARVIN BROWN - Thanked everyone for coming and talked about the schedule for the next couple of days.

Any questions about how we are operating?

EMILY FIREBAUGH - I have nine speakers lined up for in the morning and one gentleman has opted not to show. I have a letter he sent me that I will read. It's Mr. Chipman who just sold some land to a chip mill company. He was very positive.

LLONA WEISS - Tomorrow, for the memo that got sent out to the interested parties that are signed up for the tour - the lunch is scheduled for tomorrow and not Tuesday.

Tomorrow at noon we are going to be out in the woods and that's when the lunch is provided.

This evening we have a social from 6:00 p.m. tc 3:00 p.m. which is being hosted and sponsored by the local Chamber of Commerce. It is open to everyone. It's not meant to be dinner, just hors d'oeuvres and a cash bar.

There are expense forms for many members who get their expenses reimbursed.

CORRECTED

PUBLIC PORTION OF THE MEETING - JUNE 8,1999

MARVIN BROWN - The first thing I have to do is compliment everybody who was with us yesterday. We had a lot to see in a long day and it worked out.

All in all, it seemed like it was a pretty successful day. I know that you all are disappointed that we aren't hitting the trail again first thing this morning! Instead, we are going to spend the morning here inside. What we want to do is offer those of you who have been traveling with us, or maybe you just showed up today, and would like to make a brief comment or two to the committee. We will go ahead and do that the first halfhour of the morning. If you do want to make a comment to the committee we would like for you to come up front here because we are recording everything everyone says and, as usual, if you would identify who you are when you are making your comment I would appreciate.

TOM PETZOLDT - From East Prairie Lumber Company. We are in Frohna which is in Perry County. We are located about 80 miles north of the Canal chip mill facility. We are a family- owned and operated hardwood grade sawmill. We have been operating since 1943. My grandfather started it. We employ about 100 people including five degreed foresters and three logging crews.

I just want to give you a quick overview of what our status is in relationship to all of this to the committee.

First - the timber right around us is slightly different from timber here in the Ozarks in Central and South Central Missouri. So far, in timber sales and that sort of thing we have not competed directly too much with Canal because there is such a large volume of high quality big timber that they don't have enough pulp wood that we are also interested in. So, there has not been much competition right now between the two of us and if there has been, we have had no problem in obtaining these sales.

Also, for the last month or so we have taken some of our pulpwood and low-grade materials to the Canal facility from some of our logging sites. That has been working out okay because we don't focus on cutting low grade. It's just not economical for us to cut low grade, so this is a good outlet for us to take this to Canal.

They even brought us some grade logs in the past few weeks, poplar, cherry, red oak. That has worked out okay.

Right now we cannot take any hickory to their mill because they do not take hickory. Also, they don't take anything that is shorter than 16 ft. The way we are set up we cut everything from 8 ft. to 16 ft. so there is a lot of 8ft. to 14ft. they cannot take, and we have to find other outlets for it, like pallet mills and tie mills, which right now are not doing so hot.

Our biggest concern for the future with this whole issue, as the demand.for pulp wood and wood chips continues, they begin to cut smaller and smaller trees that could be future saw timber in 20- 40 years.

Right now nothing is happening, but as they demand and need more wood we are afraid they might begin to cut little trees that could grow to be big trees for us to use as saw timber. Therefore, it would be a threat for us and a shortage of raw material for us in the future for our sawmill. They may even begin to chip saw timber which, right now, is not feasible and would not be cost effective. Maybe in the future if they need chips they may begin to do that. So those are two big concerns we have for the future - nothing right now.

Also, one other thing that we have noticed with this whole issue is that when the Conservation Department came to our mill it came to us for years to ask for advice on how to start this whole thing. They gave a lot of stress that these places would accept our wood chips. We welcomed that - that we could get rid of our wood chips as that would be a good outlet for us. Well, the Canal facility doesn't take wood chips from us. I thirik Mill Springs take some - at least slabs I know.

Right now the market is terrible and a lot of mills around us have run into this too, so we have no outlet for our chips. Westvaco is still taking some. We have to go to St. Louis, Terre Haute to get rid of it, and other saw mills in our area are doing tne same thing.

I guess fight now everything is okay in relationship with us and the chip mills, but our biggest concern is with the future and how to decide to get the raw materials and what size timber they want to get so that we may continue to operate our saw mill for another 55 years.

COMMITTEE MEMBER - What volume of acreage do you use a year. What sort of acreage does your mill require?

TOM PETZOLDT - We demand about 12 million board feet of logs per year.

COMMITTEE MEMBER - As long as it's high quality logs you are in pretty good shape.

COMMITTEE MEMBER - Could you explain about the chips you like to see? Is it a different type of chip they want? Why can't they use it?

TOM PETZOLDT - I can't answer that totally. I think it's maybe the bark content or size, I'm not sure. They just can't the way they are set up right now. Why they don't take our particular chip I can't answer that.

COMMITTEE MEMBER - Your chips evolve from what part of your operation?

TOM PETZOLDT - When we bring the logs in, the log is circled and you have to square it up. The slabs that come off the sides, we have a chipper there, We chip all our excess.

COMMITTEE MEMBER - How do you think we can deal with this - do you have any thoughts regarding that or not?

TOM PETZOLDT - Well, there are certain things you can do like requiring diameter class cuts, which is a restriction on private property rights and that kind of thing. The biggest thing is educating landowners. The biggest problem we run into is people wanting to liquidate their forests. Whether or not they are around, a lot of people do it so they're not the only problem. Eight-to-ten years ago this wasn't even an issue. There was no problem with timber becoming big enough, and now we are having to worry with timber being cut too small. That's our biggest concern.

COMMITTEE MEMBER - You said one facility would take the slabs?

TOM PETZOLDT - I don't know, I know Mill Springs said something before. I don't know if they still do.

COMMITTEE MEMBER - So if you wanted to get rid of those, you could just not chip them and haul them in as slabs?

TOM PETZOLDT - Yes. It would be a very big change of operation. Plus it's 90 miles, curvy roads. Trucking it would be pretty tough.

MARVIN BROWN - Are there others who would like to make a comment?

TOM KRUZEN - Missouri Coalition for the Environment. I can't help but say I was impressed yesterday by everything I saw from Miss Emily's spot to Westvaco. What it was and how it hit me - I think the one thing I would like to impart to the committee is that we've heard a lot from the wood products industry and they have a vested interest in all of us. Also, we heard from citizens who retired here, to hunt here, citizens who fish, citizens who just like to see the beautiful trees.

I feel like sometimes that other column gets shoved down to the bottom in the log bin. I would ask you when you do consider all of this to consider all these other values on a parity with the wood products dollars. Because dollars are dollars. If a man can get $10 per acre because he is going to let somebody hunt, it spends the same way as if you liquidate the trees. There are other uses which I am sure you will hear about in the coming months.

The other thing is - I was impressed by the Vaderesque quality of the machine yesterday. The efficiency of it - I was expecting old Darth to come down in the clearing.

I would just remind you all that efficiency isn't God and that there are other values and other ways to do things than efficient. Sometimes technology tends to drive the process. Yes - you know - build it and they will come. Maybe build it and you will just mow down everything too. It was clear to me that that was a very efficient machine and no doubt could do it without risking life and limb to the operator. I would also point out to you that there was just one operator there, replacing several, and several chain saws and se 7al two-ton trucks, which is what I came into the Ozarks knowing, and the laborers ana their mules. They also leave impacts, but far fewer in some ways.

That's all I had to say, and I just wanted to thank everybody for a wonderful tour and keep up the good work hearing both sides, all sides. The old English, environner, means yoijr surroundings, and I think a lot of people here do care about their surroundings. We do live here and it's something we are all concerned about. We are all environmentalists whether we like it or not. Thank you.

COMMITTEE MEMBER - Will the people that hosted us yesterday be thanked formally by the committee?

MARVIN BROWN - If you would like to provide some recognition right now that never hurts anybody's feelings.

COMMITTEE MEMBER - I appreciate certainly what Emily did for us yesterday and also Westvaco, and especially Doug Gains. That cost Doug $ 1,000 yesterday just to keep his equipment there.

MARVIN BROWN - I thanked Emily many times. I know all the folks yesterday put a lot of time and effort into making sure we saw things that were valuable. Also Brian and Llona have been working hard this whole time.

LLONA WEISS - I'm going to be sending out letters in behalf of the committee to all those people.

MARVIN BROWN - It really has been super today, and we've got another day. I think we'll have some more good information and hosting today.

Are there any other comments from anyone?

HANK DORST - Just a couple of quick observations from yesterday. To emphasize a couple of points, I thought it was very interesting - I think it was Doug's talking in response to Mark's question - about will you be able to compete for saw logs in three or four years and what do you think. What he said was "I'm not sure." He mentioned after his fire how he did not go for the state of the art when he replaced his equipment thinking that may be a problem in the future. I thought that was a pretty telling comment. That, of course is one of the main concerns for those of us who are concerned about the future of the saw log - the high value and quality of the industry is the increased competition demand on the resource of a variety of sources that the chip mills are kind of taking over the top.

Another thing Doug said that I think is really important is that the biggest thing he was concerned about was speculators buying large tracts and stripping them. That was the biggest thing that he wanted people to take away from there.

One other thing just to reiterate - remember the neighbors at Funk Branch? There were a lot of people that came out who live in the area who wanted to be seen and heard, and wanted the committee members to know that they were concerned from a variety of perspectives. Finally, I would like to say that what the speaker from East Prairie just said bowled me over about Canal, and we'll hear more from Canal this morning.

He made the point that Canal is not taking chips from saw mills, and he also made the point that that was one of the early MDC explanations of how this new industry was going to fit into the existing industry picture - that it was going to take the residual chips off of saw mills. And they're not even taking them, which really bowled me over.

The other thing that was very impressive there is that they are only taking 16ft. logs. Willamette is taking 8ft. logs which enables the short, cruddy little trees that will never amount to anything, the junk that we want to get out of the stand. An 8ft. tree you're not going to see. A l6ft. tree you're talking about a taller tree. You're talking about those little 8ft. stems - they are not going to go to Canal's chip mill.

They're just taking the big trees, and that fits in with remarks we have just heard about how their log yard is stocked with bigger trees. Really, it sounds like they are taking small saw logs, large poles, typically cruddy trees that will go into pallets. They are more of a direct competitor for pallets right now.

Thanks.

MARVIN BROWN - Would anyone else like to make a comment? If not we will go ahead and move on to the rest of the program.