Forest tenant farms: A viable model?

In 1992, the Canadian Forest Service of Natural Resources Canada set up a network of 11 model forests across Canada. The objective of the network is to find innovative methods for involving all users in sustainable forest management. The Canadian Forest Service provides substantial administrative support, technical expertise and a financial contribution to the Canadian Model Forest Network. There are two model forests in Quebec: the Waswanipi Cree Model Forest and the Lower St. Lawrence Model Forest. In the fall of 1997, the Canadian Forest Service–Laurentian Forestry Centre (CFS–LFC) agreed to a Lower St. Lawrence Model Forest request to design and implement a project that would evaluate the socio-economic viability of forest tenant farming (see sidebar), a management model that the Model Forest has been testing since 1994. The highlights of the project are outlined below.

EVALUATION APPROACH

Carol Gagnon, tenant farmer.

For each of these criteria, a series of indicators were assessed, mainly by means of three surveys and one study. The first survey targeted active tenant farmers; the second, former tenant farmers; and the third, employees of tenant farmers. The study focussed on the costs of general supervision and technical support.

RESULTS OF THE THREE SURVEYS

The survey of active tenant farmers revealed that they were generally satisfied with their working conditions and the forest tenant farming operational framework. Most were also satisfied with the income generated by their tenant farms, and most foresaw an increase in their income over the next five years. Their tenant farmer status also gave them non-financial benefits. Many use the Model Forest lands for personal and family recreational activities, particularly hunting, fishing and hiking.

The active tenant farmers also said they had fulfilled their two most important initial expectations concerning tenant farming, which were to earn a decent living from the forest while working year-round, and to be their own boss. All of them want to continue being tenant farmers in the medium term (five years) and most want to continue in the long term (15 years).

Figures relative to active tenant farmers

André Hins - Tenant farmer at the Seigneurie Nicolas-Riou.

The survey of former tenant farmers revealed that most agreed with active tenant farmers about working conditions and the non-financial benefits of tenant farming. They also had had the same initial expectations. However, they were less satisfied than active tenant farmers with the operational framework, particularly in terms of outfitting and the technical support provided by the Model Forest.

Most former tenant farmers said their tenant farms had not been very profitable due to insufficient supplies of timber; they cite this lack of profitability as the main reason for ending their experiment.

	What is tenant farming ? Tenant farming is a land-lease model that originated in the Middle Ages. According to the adapted model developed and tested by the Lower St. Lawrence Model Forest, the management of a unit of land, known as a tenant farm, is assigned to an individual, known as a tenant farmer, who agrees to manage it on a sustainable basis and to share its income and harvest with the landowner. The tenant farmer is therefore an entrepreneur, who leases a unit of land in return for payment of stumpage fees on the wood harvested. Tenant farmers are eligible for subsidies under Quebec’s Financial Assistance Program for the Development of Private Woodlots because they are considered woodlot owners for the purposes of this program. The model is being tested in two areas (Lac-Métis and Nicolas-Riou Seigneuries) consisting of 47,600 hectares owned by Abitibi Consolidated Inc. In all, 25 tenant farms are in operation, each with an average area of 1,000 hectares and an average allowable cut of 1,600 solid cubic metres per year. There are 16 tenant farms in the Seigneurie du Lac-Métis and 9 in the Seigneurie Nicolas-Riou. Forest planning in each seigneurie is based on a multi-resource management plan prepared in cooperation with the promoters and partners of the Model Forest. The lands are divided into four allocation areas: a resource conservation area, an environmental resource protection area, a third area managed on the basis of site characteristics, and a forest management area with extensive recreational activities. In addition, although tenant farmers manage their tenant farms individually for timber production purposes, they collectively manage recreational, hunting and fishing activities through a tenant farmers’ outfitting operation in each seigneurie. The Model Forest also provides tenant farmers with general supervision and technical support. The technical support team acts as the delivery agent for the regional agency responsible for private woodlot development. Recreational activities at the Lower St. Lawrence Model Forest.

Shelterwood cutting.

Most employees of tenant farmers expressed satisfaction with their job. They particularly like the opportunity to work close to home, the relationship with their employer, the work safety level and training opportunities provided for them. Generally, they find their job more interesting than other forestry jobs available in their region. Most of them plan to continue working for tenant farmers in the next five years.

Figures relative to employees of tenant farmers

STUDY OF GENERAL SUPERVISION AND TECHNICAL SUPPORT COSTS

Case studies were used to compare the costs of general supervision and technical support of forest tenant farming with three other models used in Quebec to manage medium and large-scale forest lands, i.e., the forestry group venture, the Timber Supply and Forest Management Agreement (TSFMA) on Crown forests, and the management of large private forests by forestry companies.

The comparison revealed that the costs of general supervision of tenant farming were similar to those of large private forests and forestry group ventures, but higher than the costs of the TSFMA model.

The study focussed on the costs of technical support for silvicultural activities. The results (see following table) show that tenant farming costs are similar to those of forestry group ventures and, in the case of commercial silviculture, to those of large private forests. TSFMA technical support costs were clearly lower, i.e., 70% less than the costs related to tenant farming and forestry group ventures.

Annual costs of technical support for silviculture, in dollars per hectare of work

*Non-commercial silviculture refers to work, such as reforestation and pre-commercial
thinning, that does not involve the harvesting of merchantable timber.

Hauling operation at the Seigneurie Nicolas-Riou.

The overall general supervision and technical support costs of tenant farming are comparable to those of the forestry group venture. Both models have several characteristics in common, particularly in terms of the level of mechanization of harvest operations (manual felling and use of small forwarders), average size of cutting areas (between 1.4 and 2.3 hectares), and the operational and management support provided to woodlot owners and tenant farmers.

OTHER EVALUATION COMPONENTS

Sylvain Masse’s work also provides information on the socio-economic impact of forest tenant farming, its viability, and the potential for implementing the model elsewhere in Quebec and Canada.

Impact on the local and regional economy

In 1998, forest tenant farmers hired 63 employees, who worked an average of 12 weeks in forest tenant farming operations. Forest tenant farmers also hired 36 local and regional businesses to carry out work on forest tenant farms. In all, forest tenant farms generated about 1,900 weeks of work for forest tenant farmers, their employees and contractors.

Sign at the entrance of the Seigneurie Nicolas-Riou.

There were also economic benefits related to the processing of some 40,000 solid cubic metres of wood harvested each year by forest tenant farmers. Overall, more than 95% of the wood harvested on forest farms was processed in the Lower St. Lawrence region.

Another socio-economic impact of forest tenant farming was significant savings (almost $165,000 per year) in employment insurance benefits.

Forest tenant farms as viable businesses

Open house for partners.

The surveys of active and former tenant farmers made it possible to gather a variety of information on the viability of forest tenant farms. As mentioned above, forest tenant farmers were generally satisfied with the net income generated by their tenant farm, and most foresaw an increase in their income. Similarly, their intention to remain tenant farmers in the medium term and, for most of them, in the long term, is in itself an overall indicator of viability. Moreover, all of the former tenant farmers who were interviewed felt that most tenant farms would be viable businesses in the medium term.

However, the profitability of forest tenant farms raises some issues such as the management of non-timber activities. None of the tenant farmers whose initial expectations had included multi-resource management had yet fulfilled this goal. Similarly, the medium-term expectations of tenant farmers in terms of income derived from non-timber activities are now lower than they were at the beginning of the project. Given these circumstances, timber production will remain the main source of income for tenant farms in the medium term and, consequently, the income level of tenant farms will remain sensitive to timber market fluctuations.

Forest tenant farms throughout Quebec?

Thus far, many people have expressed an interest in becoming tenant farmers. During the initial recruitment campaign in 1994, the Model Forest received 346 applications from Quebec and other provinces for 27 available tenant farmer positions. In 1998, a call for applications limited to the Lower St. Lawrence region produced 105 applications for five positions.

A survey of 439 Lower St. Lawrence forestry workers1 conducted in late 1996 and early 1997 revealed that 9% of respondents wanted to become tenant farmers and that 21% were interested in becoming forest farmers. It should be noted that for most people interested in becoming forest farmers, tenant farming is a way of circumventing the prohibitive cost of acquiring enough land on which to make a year-round living.

In addition, all of the active and former tenant farmers who were interviewed thought that the forest tenant farm model could be implemented in places other than the Model Forest. Nearly all of them thought the model would be used elsewhere on public lands, particularly near municipalities. It should be mentioned that most forested areas in Quebec that are large enough to set up tenant farming communities are in the public domain. Respondents expressed a preference for lands located close to communities because of the advantages of working close to home and because, as residents of local communities, they felt an attachment to the surrounding area.

	Two model forests in Quebec Two of the 11 model forests in the Canadian network are located in Quebec, including Canada’s only Aboriginal Model Forest, the Waswanipi Cree Model Forest. The other is the Lower St. Lawrence Model Forest, the testing ground for both the forest tenant farming model and a management strategy for improving group management of private woodlot areas. Waswanipi Cree Model Forest (WCMF) Covering an area of 209,600 hectares of boreal forest in Northern Quebec, the Waswanipi Cree Model Forest is the most recent model forest in the network. Its guiding principle is to preserve and improve the forest on the traditional Cree lands of Eeyoy Istchee in order to generate benefits for Natives and all users. A management strategy will be drawn up based on an assessment of ancestral practices and on Cree knowledge and experience in order to help the Cree preserve their way of life. Lower St. Lawrence Model Forest The lands of the Lower St. Lawrence Model Forest consist of 113,000 hectares of mixed forest within rural municipalities of the Lower St. Lawrence region. They are divided into three separate sections, all of which are private lands: the Nicolas-Riou and Lac-Métis Seigneuries, owned by Abitibi Consolidated Inc. and where tenant farming is being tested, and the area served by Groupement forestier de l’Est du Lac Témiscouata [Eastern Lake Témiscouata forestry group venture]. Maple, balsam fir and yellow birch stands cover most of the area.

From this perspective, the forest tenant farming model offers several advantages. For example, the model helps meet the desirable objective of diversifying the types of land tenure on public lands in order to respond to the diversity of contexts associated with forest resources management. Another advantage of tenant farming is its flexibility of application. The model can take on various forms, depending on the context in which it is applied. Various options for implementing the model depend on the type of land tenure (public or private), the type rights granted to tenant farmers (timber resources, maple syrup production, wildlife, etc.), and the structure of the tenant farmer community (cooperative, etc.).

The forest tenant farming concept already exist and other projects are currently being developed. In the spring of 2000, Maibec Industries announced it was setting up a tenant farm in blocks of lots it owns in the counties of L’Islet, Montmagny and Bellechasse. This initiative includes timber and maple syrup production, an outfitting operation and an inn. Other projects are also being studied, particularly in the Abitibi-Témiscamingue region and outside Quebec.

CONCLUSION

The results for each of the four evaluation criteria outlined above may be summarized as follows:

1. Forest tenant farms are viable businesses whose main source of income in the medium term will remain timber production.
2. General supervision and technical support costs are similar to those of forestry group ventures.
3. Forest tenant farming generates tangible socio-economic benefits, primarily at the local and regional level.
4. The model has good potential for use elsewhere, particularly in Crown forests located near municipalities.

However, there are a number of challenges involved in testing and extending the model, particularly in terms of group management of non-timber activities and the sensitivity of tenant farm income to timber market fluctuations.

Based on these overall results, it may be concluded that forest tenant farming is socio-economically viable, as tested in the Lower St. Lawrence Model Forest. However, only the establishment of tenant farms in a variety of contexts will make it possible to determine the potential for extending the model.