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Stumpage is the price a private firm pays for the right to harvest timber from a given land base. It is paid to the current owner of the land. It is paid to the current owner of the land. Historically, the price was determined on a basis of the number of trees harvested, or "per stump".
The prices charged to harvest the timber (stumpage fee) are set administratively, rather than through the competitive marketplace, the norm in the United States. In the United States, softwood lumber lots are privately owned, and the owners form an effective political lobby .
These long-term contract holders pay a much lower stumpage fee for the Tongass timber, than standard businesses holding short-term timber contracts. [4] The logging mills have been able to make a profit from the Tongass timber, due to the subsidies provided by the federal government.
In the case of the forestry industry, this royalty is called "stumpage". Oil and natural gas. Severance taxes are set and collected at the state level. [3]
In forestry rotation analysis, economically optimum rotation can be defined as “that age of rotation when the harvest of stumpage will generate the maximum revenue or economic yield”. In an economically optimum forest rotation analysis, the decision regarding optimum rotation age is undertake by calculating the maximum net present value.
In 2003, an appropriations bill rider required that all timber sales in the Tongass must be positive sales, meaning no sales could be sold that undervalued the "stumpage" rate, or the value of the trees as established by the marketplace (2008 Appropriations Bill P.L. 110–161, H. Rept. 110–497, Sec. 411).