Subsidies and efficiency in forestry co-operatives.
Private forestry in the Federal Republic of Germany mainly consists of small holdings. Out of 534,000 proprietors 97% own 0.01–10.0 ha. This category covers 45% (1.4 million ha) of private woodlands in total. During the last decades cooperation has increased so that now about 50% of the small woodland is managed by voluntary cooperatives. The main aim of the cooperatives is the improvement of management by trying to overcome the disadvantages arising from small size, unfavourable location and splitting up, as well as from insufficient accessibility and other structural difficulties.
An economic analysis of forestry cooperatives was conducted by using a combination of model calculations and field investigations of 20 forestry cooperatives which represented different types of cooperation in all regions of the country. The theoretical calculations showed the amplitude of efficiency improvement in small holdings by means of cooperation. It was shown that there were relatively poor results in the beginning and success could be achieved only in the long-term view by improving quality of stands. According to the analysis of the 20 cooperatives, the possible annual cutting rate was 4.1 m3/ha, but the actual cutting rate reached only 3.7 m3/ha. Aims of the cooperatives manly concerned coordination of production, mechanization, material acquisition and timber sales. The subsidization of forestry cooperatives proved, in general, to be insufficient. A discussion of different ways of subsidization showed that from the microeconomic point of view direct product subsidies of timber production may be more favourable than area-based grants.
Published in 1981