Eriks ZAKIS, chairman of Board
Forest Owners Association of Latvia
ELO 18.06.2004. Brussels
PRIVATE FORESTRY IN LATVIA: CHALLENGES AND OPPORTUNITYES
In Latvia, like in another countries of the former European Eastern block, post socialist conditions allow for more effective and profitable economic activities, while new means of production and consumption may create unfamiliar threats to the environmental and forest resources. Today it is very important dissipate the myths about private entrepreneurship, forest and/or land owners themselves, relationships between different stakeholders and actors in economical matters, role of sustainable development including use of the natural resources –agriculture land and forests, resource management methods and their impact on regional or global environment.
Privatisation Latvia forests starting only on year 1920, soon after proclaiming the first independence of Latvia.
At the time of beginning II World War approximately 0.68 million ha was privatised. After occupation of Latvia by Soviet Union in 1940 all forests was nationalized. Second proclaiming Latvia independence from Communism regime was in 1990. According to a 1992 law “On Land Reform in Rural Districts of the Republic of Latvia”, land of private ownership up to 21.06.1940 is going to be returned previous owners or their inheritors.
In the time from 1992 - 1997 private forest owners receive back 1.38 million ha forestlands, because in “kolchozs” (collective farms) time 0.7 million ha was naturally regenerated forests on agriculture lands. The Latvian Government has decided not to privatise only approx. 1.5 million ha forests that belongs to the State before 1940. Over the past 50 years the total Latvia woodland has been increasing from 1.7 to 2.94 million ha. This figures tends to increase at the expense of abandoned and surplus farmlands put to forestry uses.
Since 1990, the forest area has increased by 90 000 ha and according to figures 2003 – approximately 600 000 ha of agriculture lands are abandoned and this territory going to over-grow by trees and/or shrubs because of ideal growing for forests in Latvia soils condition.
The territory of Latvia Republic is 64,4 thsd. km2, the number of population is about 2,3 million. More than 44% of the total area covered by forests (32 thsd km2). Today from Latvia forests: state owned forests are 42%; private owned forests 50%, others 8%. The average size is 8-9 ha for one forest possession.
Forest owners are timber growers. The products forest owners sell : wood on stamp, round wood on the road side, sawn timber, non-wood products, recreational and hunting game services. The goals of managing and the scale of its usage different in every farm. Nevertheless, everybody who owns forest, thinks of profitability to have income from it. Comparing with agriculture forestry has a bigger potential to become if not the main then at least the most important part of private entrepreneurship in the countryside. Wood and other forest products are the capital the accumulation of which is increasing steadily and continuously. Owners may use this capital, for example, in the case when failed in agriculture.
A clear business strategy of forest owners is to develop the wood trade by full responsibility and control of the wood chain from the forest to the industry gate or the buyers wood yard. A reliable wood measurement, quality management system and certification is a key elements of this chain.
Forest management tendencies are influenced mainly by economic motives. In Latvia there are two scales of forest operations:
1. large scale forestry, managed by the Sate forest enterprise and/or biggest companies;
2. small scale forestry, managed by family forest owners.
Several international conferences in the last years, emphasise the need for strategic partnership and stand behind the following conclusions for the EU accession countries:
1. the need for sustainability, growth and entrepreneurship;
2. the need for voluntary co-operation between private forest/land Owners;
3. the need for co-operation with all national Stakeholders;
4. the need for participation in the international processes;
In Latvia today established good platform a) to rize co-operative awareness, b) for application a good forest management practice in private forests, c) to create the system that shows benefit from commercial activities and d) for base to provide the lobby and forest/land owners oriented public activities. The forest/land owners movement shared the values, visions, goals and strategies for sustainable forestry development based on free market oriented management. It is important to have conditions where the private forest ownership rights are respected.
Results of private forest owners survey in Latvia (1997 – 2003) show:
- significant changes in forest ownership in the nearest future are not expected, because only 2% of forest owners like to sell their forest possessions;
- 70% of private forest owners live near their holdings (Family Forest Owners), 30% - live outside (Urban Forest Owners);
- average age of forest owners - 51 year;
- 67% of forest owners male, 33% forest owners female;
- 39% of forest owners receive income from forest activities, but only 15% of forest owners income from forestry is important source;
- private forest owners give highest grade for non-economic aspects of forest use.
More forest owners asking for: possibilities for investments; reduce the requirements; receive compensations; understandable forest policy; freedom on actions; responsibility for results; knowledge and advises etc. Forest owners choice of information sources and extension methods is determined by: property characteristics, practical experience, size of holdings, sex, age, residence place, motivation.
Top of forest future role from the forest owners point-of view (max 5 point):
- heritage 4.1 points;
- resource for wood 3,7 points;
- nature protection 3,0 points;
- resource for non-wood products and recreation 2,3 points;
- resource for additional income and/or as investment capital 2,0 points.
Economic role of forest property has influence by average of holdings:
no economic gain distribution 33,7% average 4,6 ha
income will be in future 33,7% 8,4 ha
supplementary income 28,8% 11,0 ha
main income 3,8% 23,1 ha
Dominated activities in private forest sector and main influencing factors are: fuel wood collection (65%); harvesting (37%); thinning (25%); planting (19%); aforestation (5%). Urbanized forest owners and family forestry have different forest management tendencies and motivation.
Forest and forest industry is a sector of vital importance to Latvian economy. A small-scale site adapted forestry will be main strategy in the family forestry. The economic use of substantial forest areas has thus been low. The need for thinning and other forest management measures is high. The forest owners of Latvia suffers from low stumpage and profitability because of lack of development. The nature values are on the other hand often very high.
In Latvia considerable areas of forest land have been untreated by regular forest management regimes. Abandoned farm land have furthermore been regenerated naturally by forest creating large areas of mainly broad leaved species. In Latvia there exist today
- large areas of untreated and not managed forests;
- large volume of dead wood;
- high proportion of broad leaves species;
- large areas of wet forest lands.
The woodlands today are divided into: commercial forests 2.52 million ha (85%) and protected forests 0.42 million ha (15%).
Successful managing of the forest requires knowledge and a lot of work. Not all of the forest owners live in the same area where the forests they posses are located. Not all of the private forest owners have an opportunity to obtain the forestry knowledge and skills. The main objectives in strengthening small-scale family forestry:
- the development of Sustainable Forest Management that is beneficial both economically and ecologically;
- the development of Forest Owners Associations that are strong both commercially and politically;
- the development of Forest Management Planning system that is private forest owner oriented and in with accordance of the Pan-European (MCPFE) sustainable forest management Criteria, Indicators and Operational Guidelines.
Economically and ecologically sustainable forestry can only be achieved if the market conditions will allow the forest owner to get his/her appropriate part of the value from wood products earned by the industry. Today the market in Latvia is dominated by contractors and middleman. Therefore in many cases the income received by owners is not sufficient for investing in silvi-culture of forest improvement. Even though, to have excellent possibilities of the natural forest regeneration today in Latvia, very soon encounter quality problems. Sustainable, long-lasting, well-organized and profitable forestry requires adequate infrastructure. Latvia needs lots of investment in this sphere.
The prospective volume of annual cut will extend to 10-12 million m3. On a per species basis, the yield of timber is described as follows: pine and spruce account for about 55% and birch 19% of the volume, aspen, alder, ash and oak make the remainder.
The annual cutting yield in private forests is not planned, in fact 7-8 million m3. In the state forest annual cutting amount is set by Parliament 3-4 million m3 every year. Factor sustainability last 10 years was 0,48. Reforestation after harvesting is required in Forestry Act. About 70% of cutting areas (from approx. 11,000 ha each year) is reforested artificially, the rest regenerates naturally.
The total growing stock has increased from 176 million m3 in 1935 to 585 million m3 in 2003 (i.e. annually 4,8%). Current annual increment is estimated to be 16.5 million m3 (coniferous forests 9,6 mill. m3). Average stands in private forests 170 m3/ha, annual average increment in private forests, that mostly cover former agricultural lands, has reached 10-12 m3 per ha. At present conifers cover approximately 60%, fairly divided between Scotch pine and Norway spruce, and deciduous trees 40%, dominated by Birch (representing about 72% of the hardwood forests and 28% of all forests). Other wide spread species are White alder, Aspen and Black alder. Oak and Ash represented in small areas about 0,5% each.
CO-OPERATION OF WOODLAND OWNERS IN LATVIA
In all countries where land and forests are private property, even if it is small one, and the owners themselves can not guarantee the management on professionally sufficient level, they create associations or co-operatives.
Co-operative business strategy based on partnership, standing behind:
- the need for sustainability, growth and entrepreneurship;
- the need for co-operation between private forest owners and family forestry;
- the need for co-operation with other stakeholders of forestry;
- the need for participation in the international processes.
For the development of sustainable management in Latvia in the nearest future is necessary: survey of active forest owners; create the data base; strengthen the research of forest; improving method for estimation of the optimal harvesting; developing small-scale forest planning; analyses potential demand for extension services; destroy “black- grey” business; support of improvement wood based economy; developed planning-accounting systems.
In 1992, supported by Agriculture Advisory service of Latvia and practical help by Co-operation of Denmark Forest Owners Association advisors T. Hansen and K. Rae, GTZ project coordinator M. Faller (Germany) and VOCA experts L. Christian and E. Brainich (from USA), small group of the first Latvian private forest owners starting to select main activities and getting experience to establish forest owners organisation in Latvia.
First organisation, established in 7 of May 1993, has the name “Forest Management Association”, because privatisation and restitution process of land and forests in Latvia, soon after collapse of the USSR, was starting only. At 1997 according to a Law “On Land Reform in Rural Districts of the Republic of Latvia” 1.4 million ha forest land, which was in the private ownership up to 1940, was returned to previous owners or their inheritors. From the 2001 till today the short historical name is “KS MAA” and full official name “Forest Owners Association of Latvia” (FOA of Latvia).
KS MAA became national level organization for, first of all, protection interests of all Latvian woodland owners as well as small rural contractors and wood producers, and, secondly, to support and encourage business activities of their members.
Due to the excellent co-operation between regional and national organizations, any member of each of participating organizations, as well as any member of the local organizations have free access to all services and activities in the national-wide association.
The slogan of KS MAA “Instead of looking for privileges, look for partners in business” is still important. Bad understanding about co-operation models, methods, benefits from co-operation is common.
From the 2004 KS MAA start to develop structure, based on two main pillars:
1. establishing and strengthening of the commercial/economical cooperatives;
2. creating and developing co-operation of the public/lobby unions.
The legal structure of Forest Owners Association of Latvia – KS MAA is co-operation of organisations, both as public and as members, unite of specific Forest Management and services Co-operatives and the local Forest Owners Unions. KS MAA according to Latvian legislation is non-governmental, non-profit organisation, registreted in Latvian Enterprises Register in two registers: commercial enterprises Register and public union Register.
Today KS MAA is the largest and strongest national-wide, both economical (commercial) and lobbying (public), forest owners organisation in Latvia, who represent needs and necessities around 155 000 family and urban forest/land owners for protecting and realizing their economical, ecological, social and cultural interests in Latvia and abroad.
Forest Owners Association of Latvia - KS MAA needs to continue to be a very egoistic organisation, to secure that the organisation become strong. What is needed now is to “duplicate” our general concept, to involve as many persons as possible on grass root level. Business strategy and Sustainable development based on training, advise and networking in these fields will have continued high priority. We need to continue on long term training programme for the local and central associations staff persons, mangers, board members and “next generations” to them. It is very important that the training programme reflects the private forestry strategies and development plans of co-operation.
After the first of May 2004 representatives from KS MAA will sit around same tables in Bruxelles as all the others strong farmers and owners organisations in Europe. Sometimes this will be good and friendly Family,but we will be some kind of competitors because each forest owners organization should protect their forest/land owners and will fight for interest of them. The one to fight for Latvian forest owners is the Forest Owners Association of Latvia - KS MAA. Only when KS MAA has real muscles government or sister organisations in Europe will listen.