iDRY Vacuum Kilns

Sponsors:

Cost share vs Incentive payments

Started by woodtroll, January 03, 2012, 02:27:33 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

woodtroll

Recently we have had discussion on what is better a cost share program or an incentive program.
A cost share pays a percentage up to a maximum amount.
An incentive pays a fixed amount.

For example: A landowner has 20 acres of thinning or TSI to do. The cost share can pay 50% up to a max pay out of 75$/ acre. So the landowner may have to pay $75 / acre out of pocket. No matter what the landowner has to pay out at least 50%.

Or

A landowner has 20 acres of thinning or TSI to do. The incentive rate is $150 an acre. If it cost more the landowner pays. It would not matter if the practice costs less, they would get paid $150 an acre.

Remember the practice and rates do not really matter in the example. If the practice is beneficial to the forest, and the rates reasonable.

I would like to hear forester and landowner opinions.

WDH

In your example, as a landowner, I would take the incentive.
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

chevytaHOE5674

I too would take the incentive program as a landowner in your example. As long as the treatment cost less than or equal to your fixed incentive rate then there is Zero cost to the landowner.


woodtroll

I know this seems like a no brainer, but I have been told that landowners need to demonstrate "buy in".

I as a forester would like to get any good forestry work done.
Do any foresters have any thoughts on this?

WDH

Jeremy,

My experience has been that non-industrial private landowners are reluctant to spend cash money on forestry treatments that do not result in immediate income to offset the expense.  The big industrial forestry companies, however, do invest large sums to do competition control, fertilization, TSI, etc. 

I invest in forestry treatments, but as a forester and a landowner, I realize that I am not typical.  The two selling points would be improving wildlife habitat, which is very important to many landowners, and improved timber returns.  The wildlife thing is not really an economic driver, but improved timber returns are.

In educating landowners and getting buy-in, you might consider addressing the economic benefits of various treatments because these numbers are not anything that the typical landowner has ever seen and they do not intuitively know the relationships.

Many landowners are also farmers, and farmers understand yield and treating crops for maximum production.  Even so, a lot cannot see the forest for the trees.
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

woodtroll

Yes I agree.
That is what I used to deal with from a contractor point of view. if I could get a landowner to do tsi I could get the job. That would pay for the low cost management plan.
Now, that is not what drives me to getting landowners to perform work on their places. A healthy forest is my only desire.
The economics of our local forest is so poor the that it takes some very long sight to pour personnel money into thinning. And not just thinning that was just an example. Forest health, Pine beetle control work and fuel reduction work are all major players.

I recently got into a discussion with my higher ups, they wanted owner buy in and did not under stand why an incentive program would be better. I blew the discussion and honestly, it got a little heated.
So, I am taking a step back and trying to see the pros of cost share.
And am coming up lacking.
My next discussion on the subject will be handled better, I might not change the higher ups position but it will not turn into a collage type argument.

SwampDonkey

We do cost share here in NB, but the government contribution is 80%. The rates are high enough for thinning that a landowner rarely pays any contribution. Planting the owner usually only has to contribute about $100/acre for the whole job: trees, site prep, planting. Usually with the various subsidy you can juggle the numbers to keep the payout low. Plus if the landowner does any of the process he gets paid like any contractor would.

Our base rate for PCT has been $1000/ha (400/acre), the DNR staff take 20% for admin, marketing boards take about 10-12% (but allowed 20%) for admin and contractor or landowner get the balance, whom ever does the work. The owner contribution is 20%, but rarely is that collected. I've never seen more than $25/acre collected from landowners for PCT. When they tried upping the contribution no one was interested in silviculture. The participation fell to the bottom. Most people haven't got that kind of disposable income and we have 40,000 + woodlot owners. If  it wasn't for the silviculture contractors doing the leg work and making contacts than just about none would be done.

I realize your figures are just fictitious for conversation.
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Thank You Sponsors!