Should the federal government regulate timber producers? Can timber producers resolve their problems by self regulation? These questions are being debated widely by forest managers and environmental groups across the nation.

In Michigan the Ad Hoc Forest Practices Act Committee has met periodically since October of 1990, to discuss the issue of regulation. The question is what, if any, government control of timber harvesting is desirable to protect long term timber production and environmental values? While interested parties have opinions regarding what is most desirable, there has not yet been a scholarly analysis of the subject of government regulation versus self regulation of the timber industry.

The market for standing timber, i.e. stumpage, in Michigan has a few public sellers, a very few large private owners and producers, and many private non-industrial sellers, farmers and other private landowners. The asymmetries of information flows in this market, possible inefficiencies in transactions, and third party effects need to be studied before we can conclude whether or not some kind of regulation is needed.

This report discusses the Michigan timber market, surveys the literature on occupational licensing, and analyzes several existing models of timber harvester regulation.