Current issue: 56(2)
Under compilation: 56(3)
For non-industrial private forest (NIPF) owners land with its timber production is an example of a capital asset. Developments in the asset’s value and yield depend not only on forest management but also on other factors that the owner cannot control, for example timber prices and the production circumstances, such as soil and climate. One important basis for decision making related to management strategy and, in the short run, to cutting and silvicultural activities is economic analysis and accounting. The owner has to decide whether to invest more in his property (planting, cleaning, building of forest roads) or disinvest (sell timber or the holding). He has to find ways to increase revenue and cut costs.
However, generally accepted accounting practices for NIPF owners are lacking. Applying business economic accounting principles and forestry accounting traditions, we outline a proposal for a profit and loss accounting and balance sheet for NIPF holdings with a view towards increasing economic awareness among private owners. Key concepts are net profit of the enterprise and calculated profit of the property. Other profit measurements that are used are gross margin, forestry margin, operating margin and operating profit. Calculated profit is based on adjusted net profit. The main concern, however, is to consider the change in the holding’s market value caused by changes in stock volume, quality and price. The contents of the accounting framework development here are applied to three management strategies. The return on investment (ROI) of forestry is compared with other investment alternatives.
The aim of the study was to describe the total change of forest area in non-industrial private forest holdings in southeast Finland, 1986–1991. The average gross decrease of forest area was 1.7 hectares, whereas the average gross increase was 1.2 hectares. Consequently, the average size of holdings decreased from 32.5 to 32.0 hectares. The most important factors affecting the changes of forest area were the inheritance system, resulting in a decrease of 0.7 ha, and reclassification of forestry land, producing an increase of 0.4 ha per holding. The increase of small, under 10 ha holdings accounted for much of the structural change.
The PDF includes an abstract in English.
The attitudinal, behavioural and cognitive effects of four forestry extension and training courses were evaluated. The courses produced positive effects on the participants’ forestry knowledge. Further new forestry skills were adopted, and the courses had some positive behavioural effects. The attitudinal effects of the courses were mainly inconclusive. Differences between the evaluated courses were remarkable.
The PDF includes an abstract in Finnish.
In this paper, the author explains the characteristics of the Japanese forestry planning system and points out some of the problems found therein from the viewpoint of the management of privately-owned forests relating to the economic background and governmental policy.
The forestry planning system is a centralizes type of planning, the planning begins at the top and flows downward and outward the periphery. In order to make this planning system an effective instrument, the district forestry planning founded under the system must approach the problem of how to combine the resources of the forest with the district’s inhabitants and the forest owners; and further, the extent of the effective union of the district and the local timber manufacturing must be examined.
Non-industrial private landowners hold about two-thirds of the forest land in the southern United States. The types of public (state) and private (consulting and industrial) assistance offered to these owners is reviewed. In total, about 1,600 foresters in the South provide management assistance to non-industrial private forest owners. They assist at least 72,000 owners annually, including provision of management plans for about 10 million acres and supervision of over 4 million acres of leased lands.
Comprehensive state laws regulating the practice of forest management on private lands are in effect in seven of the United States. Established to protect a wide range of non-timber forest resources and to ensure reforestation after harvest, these laws may impose significant administrative costs on states and significant compliance costs on landowners and timber operators. Total state administration costs for 1984 are estimated at $10.1 and total private sector compliance costs are estimated at $120.5 million, for a total regulation cost of $130.6 million.
The resource protection effectiveness of state forest practice regulation is difficult to quantify. However, agreement is strong that regulation has led to significant improvements in forest resource conditions and has helped to increase reforestation.
In 1979, the Federal Research in the United States instituted a so-called ”tight money” policy which led to a decrease in the demand for stumpage. The decrease in demand brought about lower stumpage prices and, consequently, a waning interest in policies to stimulate NIPF production. The authors report on five recent studies on NIPF behaviour and raise concerns that increases in demand for housing may bring new pressure upon NIPF as a source of wood.
In order to understand the present forest policies for the small woodlot of Quebec, it is essential to understand the history of settlement of Quebec. Following this brief description, the author introduces the various forest policies (programs) which have been initiated in Quebec by various levels of governments in order to deal with the management of these lands.
To conduct an efficient forest policy, both a normative and a positive theory are necessary. In addition, however, the explicit intertemporal considerations in natural resource economics demand that it is made crystal clear which means are permanent and which are non-permanent. The permanent case is far from easy to solve.
That the theoretical problems have practical relevance is shown by Swedish experience. A practical course of action is to weight possible positive effects from a permanent subsidy against possible deleterious outcomes. It is also desirable to avoid jerkiness in forest policy, which is likely to create uncertainty about the permanence of permanent means.
Law may sometimes be more efficient in creating ”credibility” than economic incentives. Regeneration has been mandatory in Sweden since 1903, and nobody refrains from cutting because he believes that regeneration duty will be abolished in some near future.
The Finnish Government appointed a committee in 1955 to analyse the economic status of the population living from agriculture. The present paper contains Part II of the proceedings of this committee. It discusses the earnings of the agricultural population from forestry and occasional work.
Agricultural population was defined as all people living from holdings of at least 2 hectares of agricultural land. Forestry income includes, besides the value of stumpage sold, earnings from logging in connection with delivery contracts. Earnings from occasional work include wages for logging made to the account of someone else, as well as wages for agricultural work, floating, carpentry, road construction and maintenance work etc.
In 1951–1954, the farms in Finland received an average aggregate of 29 milliard Fmk for stumpage, 10 milliard Fmk of which consists of the value assigned to the timber consumed by the farms themselves. The average income from stumpage was 110,000 Fmk per farm. The earnings from logging in connection with delivery contracts amounted to 3.3 milliard Fmk, and the earnings from occasional work to 6.7 milliard Fmk. The income from stumpage together with the earnings from delivery loggings amounted to 123,000 Fmk per farm. Adding the earnings from occasional forest work, an aggregate forestry income of 150,000 Fmk per farm has been obtained, 70–75% of which accounts for stumpage price.
The occasional earnings from sources other than forestry were on average 12–13 milliard Fmk, or 45,000–50,000 Fmk per farm. The agricultural income of the farms was 60.4 milliard Fmk, or 230,000 Fmk per farm. Thus, the aggregate income of the farms was 110 milliard Fmk, or 420,000 Fmk per farm.
The financial surplus from forestry per farm for the farms included in the study in 1951–1954 was on average 21, and the income from forestry 18 times as high as in 1934–39. The income from stumpage at the end of the same period was 18, and the earnings from occasional work 27 times as high as at the beginning of the period.
The agricultural income has the greatest relative importance in Southern Finland and Eastern Bothnia. The income from stumpage, in turn, has the greatest relative significance in supporting agriculture in the inner part of Finland, while the occasional income plays its most vital role in northeast Finland.
The PDF includes a summary in English.
As the use and value of forests have increased, forests have been managed more as a business. Financial bookkeeping defines the production costs of wood, costs of forest management work, investments in forest improvement, taxes and administrative costs, income from the sales of forest products etc. Bookkeeping reports the annual costs and income in the forestry, but does not give information of the future profits or appropriate organization of the economy of forestry.
The author introduces a system that he calls “metsänhoitoteknillinen tarkkailu” (silvicultural monitoring), which would give economic information of the forestry, and could also replace a forest management plan in the private forests. The bookkeeping system will list in detail the volumes and areas of fellings and silvicultural measures in different years, and deduce the sustainability of the use of forests and future incomes in forestry.
The PDF includes a summary in German.
The forest management practices in Finland are closely related to the industrial history in the country. The selection cutting method used previously has now been gradually disappearing, and differences in the quality of forest management can still be observed between different owner groups. The national forest inventories indicate that farm woodlots show the poorest silvicultural state among the ownership categories. This study analyses social and economic causes responsible for variation in the silvicultural state of farm woodlots managed jointly with a cultivated land holding. The study is based on the data of third national forest inventory in Finland, and a factor analysis was calculated using the data.
Although the model developed explains more than a half of the total variance of the level of silviculture, only less than third of this is clearly explained by economic and social factors. The remaining two thirds are explained by the ’nature factor’, which includes both economic and site factors. This affects the effect of different kinds of forest policy measures. Of the variables in the model, the strongest influence in the level of silviculture have income, size of woodlot, size of land area under cultivation and distribution of forest types. The differences in the level of silviculture between different woodlots and different districts, may be explained by the theory of cumulative process. Regional differences in economic phenomena cannot be explained without taking into consideration the social value hierarchy in each region, which determines the range of variation of economic variables.
The PDF includes a summary in English.