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Use and cost of Best Management Practices (BMPs) and BMP-related Sustainable Forestry Initiative guidelines to Arkansas timber producers.

Abstract

A mail survey was conducted to determine the cost and frequency of use for Best Management Practices (BMPs) and BMP-related Sustainable Forestry Initiative (SFI) guidelines on logging sites across the state by Arkansas timber producers. Respondents were asked to report figures based on their records and estimates, including annual tons of wood produced from 1999 through 2001 and cost estimates for BMPs and BMP-related SFI practices used on their job sites. Practices most frequently utilized by timber producers included planning roads and skid trails, "no tree tops in stream channel," and creating waterbars. The results of this study indicate the cost for implementing BMPs and BMP-related SFI practices was over $12 million in 2001 for Arkansas timber producers.

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Best Management Practices (BMPs) and the Sustainable Forestry Initiative (SFI) are two standards that have a profound effect on logging practices across the southern United States. BMPs were developed in response to the Federal Water Pollution Control Act Amendment of 1972 and the Water Quality Act of 1987 to help minimize sediment disruption and maintain stream bank integrity during silvicultural activities. Federal legislation of the Water Quality Act gives individual states the discretion of making BMPs regulatory or nonregulatory, but all states must adopt policies to protect water resources. In those states, such as Arkansas, where BMPs are nonregulatory, operators agree to comply with state BMP guidelines and states must conduct audits to monitor operator compliance with these guidelines. The Arkansas Forestry Commission audits compliance with state BMP guidelines in Arkansas (AFC 2002).

The SFI program is a set of principles and guidelines for sustainable forestry (AF & PA 2002). Developed to improve industrial forestry practices, participants in this voluntary program agree to adhere to certain principles, as well as state and federal laws, which protect the environment; SFI participants are regularly checked for compliance by the Sustainable Forestry Board. The SFI requires participants to adhere to certain principles, in addition to state BMP regulations, to ensure sustainable forestry practices are observed. Implementation of the measures suggested by BMP and SFI guidelines serves as a positive externality for society, while adding to the cost of producing wood products from forests. Timber producers and landowners are primarily responsible for planning and installing BMP and SFI practices, thus they bear a large portion of the cost for clean water and sustainable forestry. Several studies have investigated the costs associated with implementing BMP practices (Ellefson and Miles 1985, Lickwar et al. 1992, Hawks et al. 1993, Aust et al. 1996, Shaffer et al. 1998). Both field validation studies and use of topographic maps to determine needed erosion control structures have been utilized to help determine the costs associated with BMPs.

Past studies have used surveys to determine the effects BMP and BMP-related SFI practices have on timber producers (Shaffer et al. 1998). This information can provide an estimate of the financial effects imposed on timber producers and help determine who is paying the cost for sustainable forestry and clean water. In 1998, the Arkansas Timber Producers Association (ATPA) designed and distributed a survey to select members to gauge the impact SFI had on Arkansas logging firms. The results of this small survey (n = 19) indicated a need to more thoroughly measure the inputs of the logging industry toward clean water and sustainable forestry in Arkansas.

Methods

To better determine the impacts of BMP/SFI implementation on Arkansas timber producers, a new survey was developed. It used portions of the 1998 survey and added new questions regarding details of BMP and SFI impacts on the logging industry in Arkansas. The final survey had 20 questions that dealt with a variety of topics from general firm characteristics to the estimated costs of performing certain BMP and BMP-related SFI practices. The survey focused on calendar year 2001 activities and costs.

The survey included questions regarding the general characteristics of logging firms (number of employees, location, number of field crews, annual tonnage production, and equipment). Based on listed equipment information, fair market prices were used to determine the firm's capital investment. Respondents were also asked about additional equipment purchased or additional incurred costs in 2001 due to BMP/SFI compliance.

In two closed-ended questions, producers were given a list of 12 BMP and BMP-related SFI practices typically used in Arkansas during silvicultural activities. These practices and their abbreviations are listed in Table 1. For the first question in the series, respondents were asked to indicate the frequency (no jobs, some jobs, most jobs, or all jobs) each practice was used by their firm in 2001. In the second question, respondents were asked to indicate the additional requirements that public agencies, companies, and private landowners expect from their firm as a result of BMPs and/or SFI. An open-ended question followed, asking respondents to indicate their cost in dollars or hours spent on a typical logging job for each of the 12 activities. The last open-ended question of the survey asked respondents to identify their three most costly BMP and BMP-related SFI practices.

The ATPA endorsed the study in an introductory letter mailed along with the survey to 276 ATPA members who were listed as logging firm owners by the association's roster. Surveys were mailed in the fall of 2002 to supervisors of these logging firms, with a follow-up postcard mailed several weeks later. To ensure response bias was not present in the data, nonrespondents were contacted and asked to complete their survey.

Survey responses were coded and entered into a spreadsheet for analysis. Data were described using frequencies, mean, and median values for individual questions. To further analyze the data, respondents were broken into three categories based on their total annual production in 2001. The categories were as follows: small producers (small logging firms) who harvested 50,000 tons or less in 2001, moderate producers (medium-sized logging firms) who harvested between 50,001 and 100,000 tons in 2001, and large producers (large logging firms) who harvested over 100,000 tons in 2001. Responses of producers in the three production classes were compared.

Results

Of the 276 surveys sent to Arkansas logging firms, 2 surveys were deemed undeliverable, reducing the eligible number of surveys to 274. A 20 percent response rate was obtained from the original survey (n = 54). Eleven nonrespondents returned their survey after they were called, increasing the response rate to 24 percent (n = 65). The response rate was comparable to other studies on logging firms (Greene et al. 1988, Shaffer et al. 1998, Greene et al. 2001, Keefer et al. 2002), which received response rates ranging from 20 to 39 percent. Nonrespondents were not found to be different from respondents, thus the data were combined.

Arkansas logging firms are diverse and difficult to quantify. Firms range in size from large mechanized operations with over four crews operating simultaneously, to small firms who only have one crew working at any given time. The exact number of logging firms in Arkansas is difficult to determine, making it hard to assess how representative the survey results are to the total population of Arkansas logging firms. The state of Arkansas reports 3,155 people employed in "logging" during 2002, with another 282 involved in "timber tract operations" (AESD 2002). Using these figures as an estimate of the logging firm population, our respondents represent 17 percent of logging firms in Arkansas. Arkansas state severance tax records for 2001 were used to determine the contribution of respondents to Arkansas annual timber production. These records indicate Arkansas total production for both pine and hardwood in 2001 was over 23 million tons. When compared to the total production for surveyed logging firms in 2001 of over 4 million tons, our respondents represented 21 percent of the 2001 annual production in Arkansas.

Landowners and location

Table 2 describes mean, median, and range of production in 1999 to 2001 for all respondents and production figures for small, moderate, and large producers in 2001. The majority of timber producers surveyed (78%) harvested over half of their annual production in 2001 from the southwest region of Arkansas (Fig. 1). Eight percent of respondents harvested over half of their annual production in the mountainous Ozark region of the state, while 8 percent harvested from the Ouachita region, and 6 percent harvested from the Delta region. Although most producers (52%) harvested over half of their timber from flatland or hilly terrain (typical terrain of the Coastal Plain), respondents reported harvesting timber from various terrains in Arkansas. Four percent of respondents reported harvesting more than half of their timber in mountainous areas, while 9 percent harvested this amount from bottomland areas. Thirty-six percent of respondents harvested equal amounts of timber from several different terrain types. In 2001, 50 percent of respondents harvested over half of their annual production from forest products companies, while 48 percent of respondents harvested the majority of their timber from private nonindustrial landowners and the remaining 2 percent harvested from public forestland. These figures are similar to the average annual removals for the state, where 52 percent of all removals during the period from 1988 to 1995 were from private landownerships, 40 percent were from forest industry land, and the remaining 8 percent of removals were from public lands (London 1997).

Production

The number of logging jobs (harvesting activity conducted on an individual tract of land) completed by respondents in 2001 varied by production class, with large producers completing a median of 35 jobs, moderate producers completing 18.5 jobs, and small producers completing 6 jobs in 2001 (Table 3). With 75 percent of large producers working more than one job at a time, the increased production rates of large producers in 2001 was not surprising. Only 25 percent of small producers and 53 percent of moderate producers worked more than one job at a time in 2001.

Eighty-one percent of producers reported 15 or fewer full-time employees in 2001. The number of workers employed during 2001 by producers varied depending upon production, with an overall full-time employee average of 11.2 per firm, slightly more than Greene et al. (2001) reported for Georgia. The number of full-time employees increased with increased production, with small, moderate, and large producers averaging 5.9, 11.1, and 19.2 employees, respectively (Table 3). Around 26 percent of all operations listed part-time employees.

Equipment

Small producers averaged 10.8 pieces of equipment, moderate producers averaged 15.6 pieces of equipment, and large producers averaged 18.8 pieces of equipment. Ten respondents did not list any equipment. Timber producers were heavily invested in their equipment, with mean equipment values for small, moderate, and large producers at $410,776, $567,907, and $794,319, respectively. Utilizing production data and capital investment, firms averaged $8.87 of capital investment per ton of annual production. As suspected, small producers had the highest investment per ton produced at $12.74 per ton, while moderate producers invested $8.75 per ton, and large producers only invested $3.80 per ton. Small producers were the most efficient users of labor, averaging 0.44 employee hours per ton, while moderate producers averaged 0.35 employee hours per ton, and large producers averaged 0.17 employee hours per ton.

Only 2 percent of respondents listed equipment for chipping operations while 72 percent of respondents owned a feller-buncher. Typically, the newest equipment was highly mechanized, such as delimbers or processors. The oldest equipment owned by producers were items used infrequently, such as dozers or motor graders. Small producers were least likely to have a dozer (39%) or grader (0%), while moderate producers were more likely to have a dozer (63%) and/or a motor grader (21%). Large producers were the most likely to have dozers and motor graders, with 83 percent of producers having a dozer and 25 percent a motor grader.

Application of BMPs often requires specialized equipment to implement some practices correctly; 35 percent of the respondents bought additional equipment in 2001, such as grass seeders, dozers, flotation tires, and culverts, in order to comply with BMP and BMP-related SFI guidelines; while 35 percent did not buy any additional equipment, and 20 percent indicated additional wear on their equipment (dozers and skidders) to complete waterbars, wing ditches, and brush cutting. The remaining responses to this question were diverse comments regarding equipment and practices. Compared to results from the 1998 survey, fewer respondents in 2001 purchased additional equipment to comply with BMP and BMP-related SFI guidelines. The decrease in equipment purchases between 1998 and 2001 is attributed to the length of time dozers and other specialized equipment are retained by a producer. Relatively few respondents (12%) indicated they had leased equipment in 2001. Typically, leased equipment included feller-bunchers, loaders, semitractors, and dozers.

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Implementation of practices

Depending upon terrain, landowners, and weather, producers may be required to implement various BMP and BMP-related SFI practices on a site. By far, the most commonly used practice on all jobs was "no tree tops in stream channel," with 81 percent of small producers, 94 percent of moderate producers, and 64 percent of large producers implementing this practice on all jobs (Figs. 2 and 3). Planning harvest roads and skid trails was the second most common practice with 44 percent of respondents implementing this practice on all jobs. The third most common practice used by 42 percent of respondents on all jobs was waterbars. The least used practices were water crossings, such as temporary bridges, hard fords, or culverts, and seeding grasses. This was understandable since all sites do not have streams that would require the use of such practices. Moderate producers were the least likely to utilize seeding on a site, with 65 percent of respondents never implementing this activity (Fig. 3).

Depending upon landowner preferences, timber producers may be required to perform certain BMP practices to protect water quality (Fig. 4). The most required practices by all landowners were "no tree tops in stream channel" and repair of rutting/road resurfacing. Forest products companies and public agencies required producers to complete more practices on their lands than private landowners. The latest BMP Implementation Survey completed in Arkansas showed public lands as having the highest implementation rates (96% for federal lands and 92% for state lands) (Eagle and Hameister 2002). With only 2 percent of respondents harvesting over half of their timber production in 2001 from public lands, the number of BMP and BMP-related SFI practices required by public lands is under-represented, indicating that BMP implementation rates are probably higher for public lands than this study reveals.

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Forest products companies required more BMP and SFI practices than private landowners in all areas. Practices which were required most by private landowners were repair of rutting and "no tree tops in stream channel." These were two activities that can be easily observed by landowners. Failure of landowners to require producers to repair rutting on their roads can lead to future road repair costs to the landowner, since landowners often cannot use a deeply rutted road.

Costs of practices

Respondents were asked to estimate the cost, in dollars or hours spent, for implementing BMP practices on a typical logging job in 2001. Median costs were computed for all respondents, as well as for small, moderate, and large producers. For a typical logging job, the median number of hours dedicated to just one BMP/SFI practice ranged from 2 to 10 hours, with costs ranging from $50 to $1,500 per job (Figs. 5 and 6), indicating a large amount of variability in the data. It should be noted that these cost estimates were self-reported by logging firms. Variation in costs may be attributed to an array of characteristics such as site characteristics. For example, more mountainous sites require more BMPs than flatter sites, thus increasing costs for producers who harvest primarily in mountainous areas. The most expensive practice to implement was temporary bridges, which had a median cost of $1,000 per job and took a median of 10 hours to complete. Large producers and moderate producers shared the highest estimated cost for this practice at $1,000 per job, and the highest labor cost of 10 hours. Brush/slash cutting was listed as the second most expensive and labor intensive practice by all producers with an overall median cost of $975 per job and taking a median of 10 hours to complete. Although expensive and labor intensive for all producers, small producers had the highest median cost for this practice at $1,500 per job, while large producers had the highest median hours required at 12.5 hours, indicating that perhaps equipment usage makes this practice more expensive for small producers who typically have fewer pieces of equipment and personnel to dedicate to such activities.

Using median costs and hours of labor needed to implement the four most used practices (planning, stabilization, waterbars, and "no tree tops in stream channel"), small producers spent $1,187/job and 13.5 hours, moderate producers spent $2,700/job and 17 hours, and large producers spent $1,562/job and 23 hours implementing these practices on an average logging job.

To help understand the most expensive practices incurred during logging activities, respondents were asked in three separate questions what were the most costly, second most costly, and third most costly BMP/SFI practices implemented on job sites in 2001. Answers to these questions were diverse, with several respondents listing more than one activity for each question (Table 4). Waterbars were listed as the most expensive and second most expensive practices implemented on a typical job site by respondents. The third most expensive practice was repair of rutting on sites and waterbars.

Employee training

SFI encourages field staff and contractors to attend training sessions on water quality laws and state BMPs. There are costs associated with these training sessions. In 2001, respondents lost a total of 196 days or an average of 1.7 percent of their annual work days to BMP/SFI training. Small producers lost a mean of 3 days, moderate producers lost 5.9 days, and large producers lost 4.9 days to training in 2001 (Table 5). Large producers had more employees (5.8) attending each training session. Small producers only averaged 2.3 employees per training day while moderate producers averaged 4.5 employees per training day. Training employees about BMP/SFI guidelines may have both positive and negative impacts on a firm. To compensate for the number of work days lost due to training, some firms have begun to require workers to attend training on weekends to mitigate production losses. Firms also noted in the 1998 survey that employees who received training had a better grasp of what was expected from them in the woods, making them more reliable employees.

Producers lost additional work days due to BMP/SFI compliance. On excessively wet days, some producers were forced to leave the job site in search of drier harvesting grounds to prevent site damage or spent time that could have been used for harvesting on stabilizing erosion-prone areas. Seventy-three percent of respondents who answered this question indicated they had lost production days due to BMP/SFI compliance, while 27 percent had lost no days to compliance. On average, producers lost 16.5 days in 2001 due to compliance with BMP and BMP-related SFI guidelines. This is a 29 percent increase from the 1998 survey, where producers lost an average of 12.8 days. In 2001, respondents lost a total of 741 days of production and 173,761 tons (median of 2,750 tons per producer) due to adherence to BMP/SFI practices. These tonnage losses represent an average 6.6 percent decrease in annual production due to adherence to BMP and BMP-related guidelines. Using an average of $15.49 per ton for the difference between stumpage and delivery prices in Arkansas during 2001 for all products (Timber Mart-South 2001), the 2001 loss in production equals a loss of $2.69 million for all respondents. Assuming our sample is representative of all logging firms in the state, this comes to a total loss of over $12 million in 2001.

Conclusions

Timber producers are working to implement measures to maintain water quality during silvicultural activities and ensure that sustainable forestry practices are implemented. Although increased mechanization is suggested by SFI to minimize waste and ensure efficient utilization of trees harvested, most logging firms surveyed had not increased mechanization levels within the past year. This is not surprising since most producers were located in the southern timber-producing region of the state where mechanized operations have been the standard for more than 10 years.

Production has been impacted by the use of BMP and SFI practices. Average tonnage lost due to BMP/SFI compliance has increased by over 200 tons or 3.5 percent since 1998. This demonstrates that logging firms are footing an increasing portion of the bill for sustaining and improving the environment through implementation of BMP and BMP-related SFI practices during harvesting operations. More money may be lost by landowners through lower stumpage prices for their timber as well as the inability of landowners to harvest some trees within streamside management zones.

Arkansas timber producers expend a large amount of resources implementing practices that protect water quality during harvesting activities. Currently, with nonregulatory BMP guidelines in place, the overall implementation rate for BMPs in Arkansas is 83 percent (Eagle and Hameister 2002). A timber producer in Arkansas loses an average of 16.5 days per year by adhering to BMP-related guidelines, which costs him over 6 percent of his annual production. Implementing guidelines to make harvesting practices more environmentally friendly and ensure sustainability of our forests for society comes at a cost to timber producers. How many of these costs are passed on to landowners (through lower stumpage prices) and to consumers (through higher delivered wood prices) is unknown. Society and landowners may incur opportunity costs of decreased production that directly affect landowners and reduces timber supply, which can raise prices for consumer wood products. Further research is needed to determine the effects BMP practices have on all of these factors.

Although the primary concern of this study was a cost analysis of BMP-related guideline implementation, it must be noted that there are many benefits associated with these programs. Developed to maintain environmental integrity during silvicultural activities, these guidelines provide the public with peace of mind while allowing extraction of timber resources for consumer uses. The SFI program, in particular, has helped the general public develop a more positive perception of timber producers. Although the cost of implementing such environmental protection practices can be expensive for timber producers and landowners in the short run, the benefits of instituting such programs to maintain environmental integrity may indeed surpass the costs in the long run.

Literature cited

Arkansas Employment Security Division (AESD). 2002. Covered employment and earnings, State of Arkansas, 2002. AESD, Little Rock, AR. www.accessarkansas.org/esd/ Accessed, July 15, 2003.

Arkansas Forestry Commission (AFC). 2002. Arkansas Best Management Practices for water quality protection. March 16, 2002. AFC, Little Rock, AR. 41 pp.

American Forest and Paper Association (AF & PA). 2002. Sustainable Forestry Initiative (SFI) Program, 2002-2004 Edition. AF & PA, Washington, DC. 44 pp.

Aust, W., R. Shaffer, and J. Burger. 1996. Benefits and costs of best management practices in Virginia. Southern J. of Applied Forestry 20(1):23-29.

Eagle, D. and A. Hameister. 2002. Arkansas Forestry Commission third BMP implementation monitoring report, survey period: 2000-2001. Arkansas Forestry Commission, Little Rock, AR. 18 pp.

Ellefson, P. and P. Miles. 1985. Protecting water quality in the Midwest: Impact on timber harvesting costs. Northern J. of Applied Forestry 2(6):57-61.

Greene, W., F. Cubbage, and J. McNeel. 1988. Characteristics of independent loggers in Georgia. Forest Prod. J. 38(7/8):51-56.

_________, B. Jackson, and J. Culpepper. 2001. Georgia's logging businesses, 1987 to 1997. Forest Prod. J. 51(1):25-28.

Hawks, L., F. Cubbage, H. Haney, Jr., R. Shaffer, and D. Newman. 1993. Forest water quality protection. J. of Forestry 91(5):48-54.

Keefer, M., J. Finley, A. Luloff, and M. McDill. 2002. Characteristics of independent loggers in Georgia. J. of Forestry 100(6):8-15.

Lickwar, P., C. Hickman, and F. Cubbage. 1992. Costs of protecting water quality during harvesting on private forestlands in the Southeast. Southern J. of Applied Forestry 16(1):13-20.

London, J.D. 1997. Forest statistics for Arkansas Counties--1995. Resource Bull. SRS-17: USDA Forest Serv., Southern Res. Sta., Asheville, NC. 86 pp.

Shaffer, R., H. Haney, Jr., E. Worrell, and W. Aust. 1998. Forestry BMP implementation costs for Virginia. Forest Prod. J. 48(9):27-29.

Timber Mart-South. 2001. 2001 Yearly summary. Timber Mart-South, Warnell School of Forest Resources, Univ. of Georgia-Athens, Athens, GA.

Rebecca A. Montgomery

Matthew H. Pelkki*

Sayeed R. Mehmood

The authors are, respectively, Program Technician, Associate Professor, and Assistant Professor, School of Forest Resources, Univ. of Arkansas-Monticello, Monticello, AR (montgomeryr@uamont.edu; pelkki@uamont.edu; mehmood@uamont.edu). This paper was received for publication in November 2003. Article No. 9800.

*Forest Products Society Member.
Table 1. -- BMP and BMP-related SFI practices respondents were asked to
evaluate in the survey and their corresponding abbreviations.

Practice Abbreviation

Brush/slash cutting Cutting
Culverts Culverts
Hard fords Fords
No tree tops in stream channel Tree tops
Repair of rutting/road resurfacing Rutting
Revegetation (grass seeding) Seeding
Road/harvest planning Planning
Rolling/broad-based dips Dips
Site stabilization/erosion control Stabilize
Temporary bridges Bridges
Waterbars W. bars
Wing ditches/water turnouts Turnouts

Table 2. -- Reported annual production for Arkansas timber producers,
1999 to 2001.

Producer type Mean Median Range n
 (tons)

All producers 1999 90,947 51,000 392,000 43
 2000 91,445 51,741 492,500 45
 2001 99,482 60,000 592,400 49
Small producers 2001 29,728 31,750 42,400 18
Moderate producers 2001 67,158 63,000 48,275 19
Large producers 2001 255,293 223,241 492,767 12

Ozark 8%
Delta 6%
Southwest 78%
Ouachita 8%

Figure 1. -- Regions of Arkansas where respondents harvested over half
of their annual production, 2001.

Note: Table made from pie chart.

Table 3. -- Production characteristics for timber producer classes,
2001.

 Mean
 Median no. of Mean
 no. of full-time no. of Mean fair
Timber completed workers pieces of market
producer jobs employed equipment value of
class in 2001 in 2001 owned equipment
 ($)

All 15.0 11.2 (1.7) (a) 14.4 (1.4) 543,664 (58,136)
 respondents
Small 6.0 5.9 (1.0) 10.8 (1.6) 410,776 (60,100)
Moderate 18.5 11.1 (3.6) 15.6 (2.1) 567,907 (45,953)
Large 35.0 19.2 (4.0) 18.8 (4.7) 794,320 (243,742)

(a) Values in parentheses are standard errors.

Table 4. -- Most, second most, and third most expensive practices
implemented on job sites by respondents, 2001.

 Most Second most Third most
Practice expensive expensive expensive
 (%)

Repair of rutting 7 27 21
Waterbars 25 30 21
Wet weather shutdowns 18 0 3
Culverts 4 10 10
Site stabilization 0 10 0
Brush cutting 18 7 7
No tree tops in stream channel 0 7 14
Seeding 4 3 14
Training 7 3 3

Table 5. -- Summary statistics for production losses attributed to BMP
and BMP-related SFI practices, 2001.

 Small Moderate Large
 producers producers producers

Average days lost to 3 5.9 4.9
 training (days)
Average number of employees 2.3 4.5 5.8
 at each training day
Average days lost due to 17.8 21.3 13.6
 compliance (days)
Average tons lost due to 1,162 5,267 8,669
 compliance (tons)
Average percent loss in 5.4 8.2 4.0
 annual production (%)

 All Sum loss for all
 producers respondents

Average days lost to 4.4 196
 training (days)
Average number of employees 4.9 --
 at each training day
Average days lost due to 16.5 741
 compliance (days)
Average tons lost due to 4,344 173,761
 compliance (tons)
Average percent loss in 6.6 --
 annual production (%)
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Author:Montgomery, Rebecca A.; Pelkki, Matthew H.; Mehmood, Sayeed R.
Publication:Forest Products Journal
Geographic Code:1USA
Date:Sep 1, 2005
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