Articles containing the keyword 'kannattavuus'

The profitability of forestry in the context of recent economic developments in Finland suggest a more systematic analysis of the profit and the cost structure of small-scale forestry than is normally made today. The domestic and international pressure on farming emphasizes the development of rural areas by means of other business than agriculture, in practice this may mean forestry. Financing in terms of the new law concerning agriculture requires projects to be profitable. Thus, the profitability of different lines of production, including forestry, needs to be reported more carefully than is the practice today.

A network of forestry bookkeeping farms covering the whole Austria has existed for 20 years. The organization and the operation of the forestry bookkeeping and the cost accounting system is based on the scientific cooperation and exchange of information between the organizations in charge. The practical experience and recommendations based thereon might be useful for Finland, when implementing a country-wide network of forestry bookkeeping and cost accounting.

The PDF includes an abstract in English.

• Penttinen, E-mail: mp@mm.unknown

A method for calculation of the effect of practical fertilization for economic evaluation is presented and discussed. 55 Norway spruce (Picea abies (L.) H. Karst.) dominated stands on Oxalis-Myrtillus type sites were surveyed five to eight years after fertilization with nitrogen (90-170 kg/ha). The relationships between the fertilization effect and various stand characteristics were discussed. Fertilization increased the growth of the stands on an average by 2.2 m³/ha/year. In total the increase of tree growth during the research period was 17.5 m3/ha. This corresponds to a yield of 525–659 FIM/ha.

The PDF includes a summary in English.

• Westman, E-mail: cw@mm.unknown
• Leikola, E-mail: ml@mm.unknown
• Nummi, E-mail: tn@mm.unknown

A literature survey based on Nordic literature deals with the biology, use, harvesting and economy of birch (Betula sp.). According to the results, the easily quantified hard facts are against cultivation of birch: lower growth, poorer production of valuable assortments, lower price of pulp, higher planting costs, and higher harvesting and transport costs than for conifers. The soft facts, which may be true, are not easily measured or their importance evaluated: the possible improvement of soil, decreasing risk of insect and fungi attacks, shelter against frost etc. Due to the differences in the nature of the facts the discussion of cultivation of birch will probably continue.

The PDF includes a summary in English.

• Kärkkäinen, E-mail: mk@mm.unknown

In forestry, a classical method of evaluating the profitability of an outlay is to calculate the internal rate of return. If there are many outlays and returns over a period, analytical determination of the internal rate is difficult and requires simulation methods. However, if there is only one outlay and one return, the computation is easy. In this paper, some formulae were developed for practical purposes. The equations also show how the return changes as the ratio between the return and the outlay changes.

The PDF includes a summary in English.

• Kärkkäinen, E-mail: mk@mm.unknown

The aim of this study was to determine under what conditions and with what premises the growing of Betula pubescens Ehrh. is an economically competitive alternative to the growing of Scots pine (Pinus sylvestris L.) in drained peatlands. The basic material consisted of all drainage projects in Ostrobothnia in Western Finland in 1937–38 and 1957–59, according to the archives of the Central Board of Forestry Tapio, including such areas that were at least moderately fertile and had birch dominated young stands or no tree cover. A total of 202 sample plots were measured.

According to the results, the discounted timber yield of the thinned B. pubescens stands is about 10% greater than that of untreated stands. The removing of birch seedlings and the subsequent growing of fully stocked Scots pine is more profitable than growing B. pubescens stands only if the establishment and subsequent development of the pine stand involve no costs. If the site in question is a fertile open drained peatland, establishment of a pine stand is obviously a better financial proposition than a naturally regenerated birch stand. However, if there is already a fully stocked young birch stand on the site, it is more economical to let it grow using a shortish rotation time.

The PDF includes a summary in English.

• Keltikangas, E-mail: mk@mm.unknown
• Seppälä, E-mail: ks@mm.unknown

The study describes the relationships between a method developed by the author for the calculation of the profitability of forest drainage and the old biological method. The calculations were based on empirical data, and they aimed at finding out the effect of a variation in the profitability limit in the areas in hectares to be drained, and on the profitability of drainage. The study deals also with the profitability of present-day drainage activities. The results showed that the profitability coefficient (the ratio between the discounted increase in returns and the costs of drainage) averages 3.04 for the whole country. The corresponding value was 5.68 for Southern Finland, 3.19 for Central Finland and 1.67 for Northern Finland.

The PDF includes a summary in English.

• Heikurainen, E-mail: lh@mm.unknown

About one million hectares of forests are fertilized annually in Finland. The goal of the present study was to find out, by means of calculations, how the profitability of forest fertilization varies with variations in the stage of development of tree crops, the quality of the site and its geographical location. Calculations concerned bot fertilization of forests in mineral soil sites and in drained peatlands. The study is a part of a larger project concerning the order of profitability of different forest improvement measures in different conditions. The problems dealt with in this study were approached from the point of view of national economy.

On the basis of two empirical materials it is shown that there is a high correlation between the stand growth percentages before and after the fertilization. Applying the results to existing yield tables the authors calculate benefit/cost ratios showing the stage of development of the stand, the quality of the site and its geographical location. According to the results, fertilization is more profitable in sites of medium fertility than on poor sites. Profitability decreases rather fast from south to north and with decreasing timber prices. 

The PDF includes a summary in English.

• Keltikangas, E-mail: mk@mm.unknown
• Seppälä, E-mail: ks@mm.unknown

The study attempts to establish to what extent the present regional allocation of the forest improvement subsidies equalize the profitability of forest drainage in Finland. The benefit/cost ratio has been used to describe the regional variation of the profitability

The study revealed that the forest improvement subsidies granted in 1968, even the highest possible subsidies, did not equalize the profitability of forest drainage. According to the results, the northern regions are at a disadvantage compared to the southern parts of the country. To fully equalize the profitability of forest drainage the average subsidies granted in 1968 should have been raised in the second financing zone from 22 to 32%, in the third zone from 32 to 60%, and in the fourth, northernmost zone from 43 to 86%. The study also suggests that the boundary lines of the financing zones should run, at least in Central and Northern Finland, from southeast to northwest instead from east to west, as it is now.

The PDF includes a summary in English.

• Numminen, E-mail: jn@mm.unknown

The concept of the internal rate can be defined as the rate of interest, which if applied to expenditures incurred at different times, gives a compounded sum equal to revenues compounded at the same rate for the same time. This concept has long been used in forestry, particularly concerning the development of a stand, because in this case there is a time difference between many items of expenditure and revenue. Several terms have been used or the notions derived on this basis. The term internal rate of return has begun to appear only recently. This article explains different variations of the concept and its different names, together with some related concepts and terms.

The PDF includes a summary in English.

• Saari, E-mail: es@mm.unknown

Silva Fennica Issue 92 includes presentations held in 1956 in the 8th professional development courses, arranged for forest officers working in the Forest Service. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service.

This presentation addresses the prerequisites and planning of a settlement farm or supplementary land lot. The basic requirements are that the area has enough arable or cultivated land and a suitable place for the farm buildings, necessary forest land, and that the area is close to roads or that it is possible to build a road at a reasonable cost.

• Karisto, E-mail: uk@mm.unknown

Silva Fennica Issue 92 includes presentations held in 1956 in the 8th professional development courses, arranged for forest officers working in the Forest Service. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service.

This presentation discusses the conditions of forestry in the small resettlement farms in Finland. The silvicultural condition of small farm forests has been found to be worse on average than that of big holdings. A difficult economic situation often forces the owner into excessive fellings. The forest owner of a settlement farm should, therefore, be given possibilities to adequate living opportunities. Therefore, the new Resettlement Act aim at supporting a so-called forest principle, which is based on a view that it is not possible on a small farm to earn a living by agriculture only and some forests must be connected to it.

• Lilja, E-mail: vl@mm.unknown

Silva Fennica Issue 92 includes presentations held in 1956 in the 8th professional development courses, arranged for forest officers working in the Forest Service. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service.

The main part of arable land that could be cleared out into fields lies in Northern Finland, where climate conditions restricts agriculture. This presentation discusses conditions for profitable agriculture and settlement activities in the north.

• Väisänen, E-mail: pv@mm.unknown

The article is a review on state forests of Finland. The aim of the review is to describe the state and management of the state forests. Low revenue of the stat forests has been criticised, and misunderstandings have led to economic policy that has had negative impacts on state forestry.

The history of forest ownership of the state begins from 1400th century when Finland was part of Sweden. The article describes in detail the different stages in ownership of state forests and development of forest administration.

Forest Service was established in 1859. In 1949 it had two departments, a private forest department and a state forest department, and four local conservancies, Peräpohjola, Ostrobothnia, Western Finland and Eastern Finland. The forests were managed according to a business plan, which was based on a forest survey and a long term silvicultural working plan. The business plan gave a basis for annual working plans.

The state forests are mainly situated far from sites of forest industry and large human settlements. This affects demand and prices of wood. Especially demand of small diameter timber has been low. Floating is the main means of transport of the timber. The article describes in detail the forest resources of state forests, forest management practices and changes in state forestry. Suggestions to improve the profitability of state forestry are given. These include, for instance improving transport infrastructure and the productivity of forestry.

• Lihtonen, E-mail: vl@mm.unknown

The government of Finland appointed a committee to study which method of selling wood, sale at delivered price or stumpage sale, is more profitable method for wood sales from state forests.

According to the committee, in normal conditions, when supply and demand determine the price of timber and forest work wages are dependent on the supply and demand of labour, returns from the sale at delivered price has proved more favourable than stumpage sale. During the World War II the case was, however, the opposite. Sale at delivered price can have also other advantages. The state has by means of logging a hold in the labour market and can use loggings, for instance, to ward off unemployment. Also, loggings can be more easily used in rational silviculture. They keep the supervising staff of forest districts employed throughout the year and provide better professional training for the foresters. In addition, the number of buyers from state forests has increased. The stumpage sale may, however, be good method in certain conditions. The committee states that the State forestry officials are best able to decide on the most favourable method of selling.

The article includes an abstract in English.

• Valtion metsäkauppakomitea, E-mail: –

The article proposes a plan to improve the efficiency of forest management in the state forests in Finland. The forests are situated mostly in Northern Finland. In 1926 the state forests covered 39.5% of the total land-area of the country, 13,580,611 hectares in total. A proportion of 52.3% of the land was productive forest land, 21.4% forest land of poor growth and 24.8% waste land. Scots pine (Pinus sylvestris L.). predominated 56.9%, Norway spruce (Picea abies (L.) H. Karst.) 30.5% and Betula sp. 11.9% of the productive forest land. The fellings have mainly been selective fellings of sawn timber, because the demand for small timber was small. Due to this, there is lack of seedling and young stands. Metsähallitus (Forest Service) has been able to increase the sales of small timber by increasing delivery loggings over standing sales. The net profit of state forestry was 136 million marks in 1929.

Several factors have had negative impact on profitability of state forestry: Major part of the forests are situated in Northern Finland, they are of poorer quality than the private forests, and they are located unfavorable in terms of wood demand. The means to improve financial result of state forest include expanding transport network, such as railroads and floating channels. The yield of the forests can be substantially increased by draining peatlands, improving the effectivity of forest management and increasing the proportion of delivery loggings. Changing the silvicultural practices alone is estimated to increase the productivity of the forests by 50–100%. However, the costs of the peatland draining and silvicultural work are high, and direct profits can’t be expected until later.

The PDF includes a summary in English.

• Lakari, E-mail: ol@mm.unknown

The present study proposes to calculate the economic sequence of two of Finland’s three main tree species, Norway spruce (Picea abies (L.) H. Karst.) and silver birch (Betula pendula Roth) when planted on Oxalias-Myrtillus type sites where both species are equally suitable, on biological grounds. In addition, the accuracy and applicability of the present Finnish yield tables to an economic comparison is tested. Benefit/cost ratio was selected as criterion of profitableness. All future net incomes and costs were discounted into the planting time and added together. The ratio between the discounted net revenues and the discounted investment costs (later called profit ratio) was the criterion. There is no reliable method to forecast the future wood prices, therefore two price ratios, birch veneer timber to spruce pulpwood and birch cordwood to spruce pulpwood, were chosen as free variables. The economic sequence of the tree species was determined as the function of these variables.

The main conclusions are, first, that under the present price ratios spruce appears to be the better choice for the forest owner, and the most promising policy for changing the situation seems to decrease the production costs of plants in birch nurseries. Second, the present Finnish yield tables are not consistent or accurate enough to enable any sufficiently reliable economic comparisons of tree species in artificial regeneration. The possible error of difference between two rather uncertain estimates is big. More work is needed to construct a uniform system of yield tables covering all main tree species, all site types, all macro climate conditions and all types of regeneration.

The PDF includes a summary in English.

• Keltikangas, E-mail: mk@mm.unknown
• Tiililä, E-mail: pt@mm.unknown

Farm forestry in northern Ostrobothnia has met different kinds of obstacles that decrease its profitability, some national, some local. One of the later is partitioning of land. The purpose of this investigation was to survey the division of farm land in the coastal municipalities of northern Ostrobothnia in Finland, where the conditions are among the most unfavourable in the country in this respect. The material used in the investigation was collected in a previous study about the structure of the farms in the area. First part of the paper summarises the history of partitioning of land in Finland.

The results show that division of the woodlots of a farm are in the coastal municipalities of northern Ostrobothnia very disadvantageous for forestry. The average distance of a woodlot to the farmhouse is 8.3 km, but there is a great variation between the municipalities, and the distance varies from 30 to 1.9 km. The form of the lots, as the long ribbon-like woodlots in the municipality of Liminka, complicates often practical forestry. In addition, the number of separate woodlots is high, in average 9.2 per farm.

The great distance of the woodlots from the main farms hinders the use of forests and diminishes the financial result of forestry. Unfavourable form of the woodlots posts similar hindrances to harvesting of timber and forest management as the long distances and high number of separate plots. The problem is heightened by the abundance of peatlands in relation to productive forest lands in the area.

The PDF includes a summary in German.

• Alho, E-mail: pa@mm.unknown

The purpose of this theoretical study was to define the factors related to wood production that affect the financial result of private forestry in Finland on the viewpoint of alternative calculation. The paper introduces the main concepts, analyses the outturn factors and discusses feasibility of some calculation methods, and finally draws up a business plan for a forest holding based on the chosen method.

In forestry, the quantitative and sustainability objectives for yield, the difference between annual proceeds and costs, and the capital value of the costs affect which factors are included in the calculation of profitability of forestry. The base-line situation for the alternative calculations is defined by an inventory. The future proceeds and costs are valuated and procedural models are formulated for the most advantageous alternatives. The main goal in private forestry is profit.

The PDF includes a summary in German.

• Einola, E-mail: je@mm.unknown

It is impossible to survey the results and profitability of forestry a hundred years hence of measures taken today. Financial reports in forestry should be kept as separate as possible from stocktaking. Under sustained forest management it is the task of silviculture to supervise the care of growing stock. As long a sufficient money is being used for forest improvement, the situation can be considered satisfactory. To ascertain just what is sufficient, in the analysis of the costs of forestry the investigators should concentrate on establishing which costs are fixed and which are direct (marginal).

Short-time changes of capital can also best be considered by means of a cost analysis of silvicultural measures and other operations. On the other hand, classification of the cost must be correct if the operational statistics are to be of any value. The calculations become much easier if fixed costs do not need to be distributed per production unit. Therefore, there may be good reason to try out marginal costing in forest enterprises. The fixed costs are increasing steadily.

This paper aims at giving ideas in determining the profitability of a forest enterprise. A marginal costing balance sheet mainly illustrates the structure of an enterprise, which gives a general picture of its profitability. If profitability is to be expressed by comparing yield with capital, yield can be treated as interest and capitalized. None the less, this is certain to result in different capital values depending on whether we take the yield to represent 3, 4, or 5% of the capital. A marginal balance is no substitute for the long-term planning which will be needed in a forest enterprise.

The PDF includes a summary in Swedish.

• Runeberg, E-mail: lr@mm.unknown

One of the factors that influence if a peatland is suitable for draining is the time required until fellings bring income, even if it the discounting calculations has uncertainties. This article discusses the factors that affect the economic profitability of draining peatlands.

The profitability of draining increases the more the yield or increase of the yield exceeds the costs of draining. Estimation of the yield is in Finland based on the peatland type, which reflects production capacity of the site. In addition, the growing stock of the site can vary in peatlands within same peatland type. The density and size of ditches affects the draining costs. Thus, productivity based on a peatland type alone does not describe well enough the drainability of a peatland area.

In Finnish classification of site quality of the peatlands, the treeless bogs and rich fens have been given too high a class compared to well stocked spruce swamps and pine swamps. Also, the drainability of two spruce and pine swamps can differ markedly in economic point of view if the tree’s quality, volume and ability to recover differ. The article discusses different methods to assess profitability of draining that have been descibed in the previous studies. It is suggested that the classification of peatlands by their drainability should be more selective.

The PDF includes a summary in German.

• Keltikangas, E-mail: vk@mm.unknown

The investigation studied the conditions on which business economics of large-scale forestry, mainly in the state forests, operates. It gives an overview on the economic geography of the state forestry in Finland, including the location of forest industry units and purchase of raw materials in relation to the state forests. The calculations are based on the of the financial performance of the districts of Forest Service in Finland.

The state forests are situated mainly in Northern Finland. Only 6% of the forests were situated nearer that 10 km from the nearest railroad, floating channel or business center. The size of forest districts decreases from north to south and from east to west, which affects the intensity of felling and the economic result of the districts. On the account of the remote situation of the forests of the state the amount of timber felled has been considerably below the growth of the forests. 

During the period of 1924-1943 annual cut in state forests decreased in Northern Finland, stayed in the same level in the east and increased in the west. Proportion of large-sized timber of the sales decreased, while the sales of piled pine wood, mining timber and sulphate wood increased. The economic result of state forests was in average modest, reflecting the economic result in the northern districts were the most state forests are located. However, the financial results of the state forests were not less good than those of other forests under similar conditions of economic geography. Proximity to floating channels and especially railways increased the effectivity of fellings. Railways made it possible to harvest also small timber that is difficult to transport by floating, thus increasing the felling volume. Finally, means to improve profitability of state forests are discussed.

The PDF includes a summary in English.

• Lihtonen, E-mail: vl@mm.unknown

The article introduces methods that can be used to calculate economic profitability of draining of peatlands, and discusses their advantages and weaknesses. The time span from draining of a peatland and the future income is usually decades, which makes it difficult to assess profitability for the investment. For instance, income from future fellings depends on chosen rotation time, and price of timber that can fluctuate strongly.

When calculating the profitability, the drained area can be treated as a separate unit of account or as a part of the forest holding. In the first case, several methods can be used. First, yield in terms of value is a suitable method only if the peatland has no existing forest. Second, annual yield of a drained peatland and peatland in natural state can be compared. In this case yield can be defined in several ways. Third method uses value increment of the growing stock. Fourth method estimates value of increment for both the growing stock and land. Fifth method is based on present value of the future felling income, and sixth on actual value of the growing stock and yield in terms of value.

The PDF includes a summary in German.

• Saari, E-mail: es@mm.unknown

The economy of the forestry in private farms in Southern Finland was studied based on the statistics compiled by the Board of Agriculture, and published in the series Tutkimuksia Suomen maatalouden kannattavaisuudesta (Investigations into the profitability of agriculture in Finland). The results present income, expenditure, assets, gross return, net return of the forests in the farms in 1924‒1926. The annual net return of the smallest farms (<10 ha forest land) was 884 Finnish marks and in the largest (>100 ha forest land) 48,335 Finnish marks. The location of the farm influences greatly the net return. For instance, the transport costs of timber from the forest is higher in the larger farms. To utilize the advantages of management of a large forest area requires knowledge about forestry. In addition, the fellings were higher in the small farms during the period. The net return is greater in the private forests than in the state forests located in the same region. Agriculture gave the farms larger net return than the forestry.

The volume 34 of Acta Forestalia Fennica is a jubileum publication of professor Aimo Kaarlo Cajander. The PDF includes a summary in English.

• Saari, E-mail: es@mm.unknown

The income of forestry in the state lands was 136 million Finnish marks, expenditure 65 million Finnish marks and the result 71 million Finnish marks in 1920. Both the income and expenditure had steadily increased during the 1900s. The forests in state lands are poorer than the forests in the country in average, which affects the profitability of forestry. However, ways to improve the profitability could be found. These include better transport connections, especially floating in Northern Finland. The growth of the forest could be increased by forest improvement, for instance peatland draining. The local demand of wood could be improved by selling rights to harvest household wood.

• Cajander, E-mail: ac@mm.unknown

The aim of the study was to determine how timber truck transport business succeeds in the competition within its sector, and the effect it has on profitability structure of the sector. Furthermore, strategic groups were looked at in depth, as well as the competitive strategies of the most successful companies and groups of companies. The theoretical competitive strategy was operationalized.

A total of 53 timber truck transport entrepreneurs were interviewed. The average age of the entrepreneurs was 51 years. Of the businesses, 35% were partnership companies, 6% open companies, and 59% self-employed. The business owned an average 1.5 trucks, and at the time of interviewing their average age was four years. Nearly nine out of ten entrepreneurs had no schooling for the line of business, and four out of five had no short-term training. The attitude of the timber truckers toward their activities was more like that of self-employed persons than that of entrepreneurs. A total of 61.5% of them reporter that they carried on entrepreneurship simply to assure themselves a job.

The operational profitability of the sector has been good in the years 1984 to 1990, and the business profitability fairly good. The median equity ratio in the sector has remained at about 20% and the ratio of debts to turnover about 40%. The sector has been more profitable than forest machine contracting primarily due to the barriers to entry into the sector.

Cluster analysis, using Ward’s method, was used for seeking out strategic groups. The lengths of the customer relationships proved a significant barrier to mobility. The most successful business used the competitive strategy of cost weighted focussing. This was done through optimization of the capacity utilization rate and through choice of correct customers. The strategic position for successful business was judged to be good in the future. Success in the future will require above all activeness and innovation ability.

The PDF includes a summary in English.

• Mäkinen, E-mail: pm@mm.unknown

The aim of the study was to determine how the spacing of drains affects the economic results of forest drainage projects. On the basis of empirical material consisting of 411 sample plots, it is presented marginal cost curves showing how many meters more of drains it is needed to increase the value of stock, 35 years after the drainage, by a value equivalent of one cu.m of coniferous pulpwood. Results indicate that wider spacings ought to be used on poor sites, on sloping swamps, and in the north.

The PDF includes a summary in English.

• Keltikangas, E-mail: mk@mm.unknown