An Economic Analysis of a Storage Policy After a Storm Occurrence in Forestry

Storm is among the main threats for European forestry generating huge economic damage. The decrease of the timber price due to the storm occurrence largely contributes to these economic impacts. Timber storage appears as the standard policy to implement in order to limit these negative impacts. Consequently, in this article, we propose a global economic assessment of a storage policy taking into account the impacts on producers, consumers, and the cost of public funds. For that purpose, we develop a tractable theoretical model which assesses welfare losses and gains incurred/earned from the storage by all agents of the society: forester (supply), consumers (downstream agents), and the public agent. The model is then simulated. Our results show that globally, the storage policy is always desirable except for the consumers in the case of storms associated with a low magnitude.