Assessment of Stumpage Payment Methods Used by State and County Timber Sale Programs in the United States

As a part of a timber sale, sellers generally specify when and how the buyer will pay for the timber. A mail questionnaire was used to evaluate how state agencies within the United States and county timber sale programs within the Lake States collect payment for stumpage sold through their timber sale programs. Of particular importance were the perceptions of timber sale program administrators about the advantages and disadvantages of the two most common stumpage payment methods: scale (also called pay-as-cut) and lump sum (also called sold-on-appraised-volume). Timber sale programs with relatively little timber sale activity have a tendency to use a single stumpage payment method, whereas programs with robust timber sale activity were more likely to use both methods. Program administrators perceive greater differences in the administrative and financial aspects of the two stumpage payment methods and few differences with respect to their ecological effects. Management and Policy Implications Timber sale program supervisors and field foresters have a responsibility to control transactional costs, to ensure that fair-market value is collected for the timber products when they are sold, and to avoid adverse impacts on the long-term sustainability of their forestlands from timber harvesting operations. Results from this research confirm that the choice of stumpage payment method will influence many of the presale, active-sale, and postsale activities and outcomes. Therefore, timber sale program supervisors and field foresters should recognize and incorporate the trade-offs associated with using the scale and lump sum stumpage payment methods into timber sale design and contracts. Because there are many factors that can vary from one timber sale to the next, policymakers should decide whether a single stumpage payment method best suits their agency or whether both methods, either individually on separate timber sales or blended together within a single timber sale, will provide maximum flexibility as contractual tools to accomplish their mission and objectives.