fedgazette

Environmental sensitivity a threat to economic recovery

John I. Rajala

Published September 1, 1989  |  September 1989 issue

Much of rural America has only recently begun to really enjoy the fruits of the "Reagan recovery" that has now almost set a record for longevity in metropolitan America. Fortune is closely tied to the land and natural resources in rural America and it takes longer to re-energize that economy. And, now, just at a time when this sector is starting to have better economic times, a new threat to recovery, ominous environmental super-sensitivity, has been pricked.

As mines reopen, as pulp and paper mills modernize and expand, and as agricultural production picks up, environmental charges are coming hot and heavy. Although much of the controversy has centered in the Pacific Northwest—where timber cutting has been all but stopped due to court injunctions won by environmental groups alleging endangerment to a little-known creature called the spotted owl, and in the timber country of southeast Texas where a red-headed woodpecker supposedly doesn't like to have a tree cut within three miles of his nest—the intermountain and Upper Midwest areas are not immune.

As the once silenced sawmills of Montana and Idaho start up again and pick up steam, preservationist fear resumed and demands were made that a million more acres of good timber land be designated wilderness area.

Northwestern Wisconsin, an area just beginning to enjoy a market for its abundant stands of balsam and aspen with the opening of a new paper mill in Duluth, is the coming battleground of the environmental clique's new buzzword, "biodiversity," which means "don't clear-cut." (Clearcutting is the professional and long-prescribed method of best managing these species of trees.)

Northern Minnesota is an area whose economy has just recently begun to feel the favorable economic impact of $1.5 billion of private timber industry investment: new mills in International Falls, Cloquet, Duluth, Grand Rapids and Grand Marais; then add significant modernization projects in Deer River, Bigfork, Marcell, Orr, Bemidji and other places. But wait, all is not rosy. People down state fear for the trees and are demanding that paper should henceforth come from recycling old newspaper. And, after many months of negotiation between economic interests and environmental zealots about how to best protect wolves and scenic rivers, harvesting in northern Minnesota forests is now being jeopardized by a slick phrase called "below-cost timber sales," which is just a surrogate issue to "stop cutting on public agency administered timberlands."

Certainly, the courts will eventually sort out these controversies by legal interpretation, but the hype will create new issues, new surrogates of endangered this and that.

Of equal concern is the impact of the strict application of environmental regulations that the past 10 to 20 years of legislative mandate have created. It covers big things like dioxins and dumping in lakes and rivers. But even small projects like trying to beneficiate private land in a lumber yard can be stopped by the Minnesota Pollution Control Agency, the Environmental Protection Agency, the Department of Natural Resources, the Corps of Engineers and others--the cost to progress can be prohibitive.

Nobody, today, expects that the environment can be trashed just so we can have economic benefits—we've matured as a society well beyond that point, thankfully. The economic well-being of rural America rests, yes, on the wise use of our lands and natural resources. For certainly, if the land and physical features aren't well-managed, succeeding generations will suffer. But these resources are being managed better than ever before and in many cases, like our forests, are being dramatically improved while being used. On the other hand, if environmental protectionist efforts become a cloak for no- growth, turn-it-back-to-wilderness schemes, rural America is in for a tough time; its economy will sputter and its communities will die. It all seems so senseless. It isn't necessary to pit one against the other. America can have economic growth and a good environment. As users and consumers we must be responsible, and as citizens and critics we must be reasonable.

Rajala Companies, with four lumber mills in northern Minnesota and one in Ontario, Canada, employs 160 people and includes an export company. Exports, mainly to Japan and northern Europe, account for about 25 percent of Rajala Companies' annual business. The family-owned operation, with headquarters in Deer River, Minn., was founded in 1936 by John Rajala's grandfather. Rajala is a member of the Minneapolis Fed's Advisory Council on Small Business, Agriculture and Labor.

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