Forest as a Source of Economic and Social Welfare

Risto Ihamuotila
Rector, University of Helsinki

The most famous 19th century Finnish author and father of the Finnish literary language, Aleksis Kivi, in his novel Seven Brothers describes a wise farmer who understands the meaning of forests: "For it was then that the master of Jukola, looking more to the advantage of his descendants than his own, accepted for his share forest ravaged by fire and for this was given seven times the area allotted to his neighbours. Now, however, all traces of fire had vanished from his holding, and dense forest covered the site." (Translated by Alex Matson (1952). Tammi Publishers. Helsinki).

The meaning of forests is self-evident to the Finns, and it is in the forest that Finns feel most at home. The ancient Finns populated this country by building isolated houses, each far from the other in the wilderness. The surrounding forests provided the building material and wood for heating, game and berries for food - everything that people needed in those days. Small fields were cleared by burning strips of forest, and after a few years of cultivating rye and turnips, the field was left to grow into woodland again. The cattle grazed in forest. Sometimes the frost would destroy the crop, but again the forest provided a means of relief: people made socalled bark bread (pettuleipä in Finnish) by adding ground phloem, the inner bark of pine trees, to the flour. Naturally, the forest gave rise to all kinds of beliefs in ancient times.
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The forests were inhabited by guardian spirits, which had to be worshipped and propitiated with sacrifices in order to ensure success in hunting. The ancient Finns also had to learn to move around in the forests all year round. The fact that the Finns can stay mobile in the forest and in the snow was not without significance in that Finland was able to defend during the Second World War and thus preserve her independence.

To a great extent, Finland owes its development into a modern welfare state to forestry and the forest industry. After all, we have more usable forest resources per capita than any country in Central or Southern Europe. As you can see from Table 1, Finland has four hectares of forest per inhabitant; this figure is approximately 15 times greater than the corresponding figure in the Central European countries. The annual increment of the Finnish forest is over 14 cubic metres per capita, whereas in Central Europe the corresponding ratio is only a tenth, or a twentieth of the Finnish level.

Table 1. Resources per capita in some European countries.

In Finland, records of the volume of forest resources and its annual changes have been kept for a long time. In fact, Finland was the first country in the world to conduct an inventory of the national forest resources. This inventory was headed by Academician Yrjö Ilvessalo in the early 1920's, and inventories have been conducted at regular intervals ever since. Thus we know that the drain, which for the most part is the result of harvesting, and the growth of the forest have in the long run balanced out fairly well, right up to the beginning of the 1980's. Since then, the difference between the allowable cut and the removals has grown significantly. Last year, when the Finnish forest industry was going through a phase of expansion and was producing at its maximum capacity, about a quarter of the annual timber growth was left unused.

Finland holds the world record in private forest ownership, over a fifth of all Finnish families being forest owners. The structure of nonindustrial, private forest ownership has changed dramatically during the last few decades. In the 1920's, practically all private forest owners were farmers. Twentyfive years ago one quarter of all forest holdings were socalled forest estates owned by other people than farmers; in 1990 forest estates made up 50 per cent of all forest holdings. However, on the average, forest estates are smaller than the holdings owned by farmers, who still owned 60 percent of the total forest area in 1990. The total number of forest holdings is clearly on the increase. Twentyfive years ago there were 350,000 forest holdings in Finland, in 1990 they numbered almost 440,000, and the estimate for 2010 is 480,000. This means two things: the share of forest estate ownership will rise to 70 per cent, and the average size of a forest holding will continue to diminish. This may raise some uncertainty in wood supply.

The impact of forestry and the forest industry on the development of the Finnish economy has

been crucial, although the forestry sector's share of the gross domestic product and its role as an employer have been on the decline. In 1950, forestry and the forest industry together accounted for about 20 per cent of the national product, but by 1970 the percentage had fallen to less than 15, and in 1990 it was less than 10. The forestry sector's share of the total labour force decreased from the 13 per cent of 1950 to a mere five per cent last year. Nevertheless, a clear indicator of the forestry sector's efficiency is that its contribution to the GDP exceeds its share of the total labour force (Table 2).

Table 2. The share of forest sector of GNP, employment and export revenue in Finland (%).

¹⁾ estimate

The above figures do not, however, tell the whole truth. In 1950, the forestry sector's share of the total income from exports was as much as three quarters. This income enabled Finland to rapidly rebuild the country after the war and to settle the immigrants from the lost territories; it also boosted the national economy into the normal course of development. In 1970 the forestry sector's share of the total income from exports was still as high as 55 per cent, but by 1994 it had fallen to 35 per cent. Forestry has clearly lost much of its relative importance, but at the same time, Finland is no longer dependent on one single sector of the economy. The repercussions of the forestry sector on other areas of the national economy are still very noticeable. We can speak about a particular forestry cluster.

Forestry has also played a crucial role in providing income and employment for farms. Almost all Finnish farms consist of both fields and forest. About thirty years ago one third of the net farm income was still obtained from forestry, but since then, the share of forestry has decreased. As a member of the European Union Finland has to adapt her agriculture to the European price level. That is why forestry on Finnish farms will resume its former importance.

Because of the slowness of incomeformation in the agricultural sector, the income from forestry has been used for investment in the farms. Also, the forests have always meant work for the agricultural population. Before the massive mechanization of the forestry industry, the majority of the labour force in forestry consisted of small farmers, who during the winter months sought extra income outside their own farms. For a long time, wood was the central source of energy on Finnish farms. Even though during recent decades oil and electricity have replaced wood, it could be used more because of the need for increasing thinnings. Today wood is a relatively rare source of energy, accounting for eight per cent of the total usage of wood in 1993. On the other hand, the share of wood of the total energy consumption in Finland was 14 per cent. There was a time, however, when energy from wood helped our country through difficult times - after the second World War in 1946, over 60 per cent of the total usage of wood went into the production of energy.

The forest is also a source of nonmaterial wellbeing. For a long time, the socalled everyman`s right has applied in Finnish forests. This right allows anyone to walk freely in the forests and pick berries and mushrooms. A growing number of forest owners regard this kind of social welfare as important, and even give it a higher priority than the incomes to be gained from the forest. Perhaps this applies more to those forest owners who live in the cities and may think of their forest as some kind of a personal park or sanctuary providing relief for the stresses of urban life.

At the same time as the nonmaterial values of the forests have gained momentum, the public debate on forests and forestry seems to be marked by populism and manipulative imagery. For example, it has been claimed that satellite pictures reveal the disappearance of proper forests from Finland. The inventories of the national forest resources prove exactly the opposite. Another common misconception is that Finland's forest resources would have been greater before the present industrial exploitation of the forests. However, photographs from the beginning of the century and even earlier, show that the forests around inhabited areas were thin, if not completely cleared by fellings or fire.

Such images, uncritically embraced by the media, have led to a situation where the various values ascribed to the forests are more controversial than ever. Felling, and especially clear cutting, has provoked protests, since the protesters want to see forests left in their natural state. Small fanatic groups have tried to stop fellings which they claim have taken place in primeval forests, by direct action. The owners of these forests, often small farmers, depend on the income from these fellings. Here we have a clear conflict between the financial interests of one group and the nonmaterial values fostered by another.

The economic and social welfare obtained from the forest may be increased through knowledge and research. Forest research in Finland has a long and successful history, and the standard of presentday research is very high. This I can say in all sincerity, although I am not an expert in forestry myself. We Finns have taken the decision to hold this conference of the International Union of Forest Research Organizations here in Finland as a manifestation of trust in and respect for Finnish forest research. The first attempts at academic teaching in forestry were made in the 1860's, but it was actually in 1907, with the transfer of forestry teaching to the University of Helsinki, that Finnish forestry teaching and research really got under way. The staterun Finnish Forest Research Institute was founded in 1918; the Institute with its more than 200 researchers is a wellestablished research unit. Today the University of Joensuu also has a Faculty of Forestry, and just recently, the European Forest Institute started its operations in the same town. There are also some private institutions devoted to forest research in Finland.

Because of the great importance of the forestry sector and the significance of Finnish knowhow in forestry, Finland could be characterized as a modern forestry state. In a modern forestry state the central aim - optimal wellbeing throughout the whole society - should be attained through the forestry sector. In this optimal wellbeing economic and social considerations are in perfect harmony. How could such an ideal state of affairs be achieved?

A modern forestry state should be clearly oriented towards the future, so that the forestry sector can be developed and steered towards yielding the greatest benefit. A modern forestry state should adopt a welldefined vision and strive towards achieving a sort of "ideal forestry sector". This requires a thorough investigation of future prospects and threats, and the creation of scenarios of probable and desirable developments. In Finland this kind of strategic planning and development has been launched for the national economy as a whole, but so far there has been little of such activity within the forestry sector. Furthermore, aspirations for the future cannot be realised unless political decisionmakers are committed to the objectives and measures required for creating an "ideal forestry sector". For this reason cooperation between researchers and decisionmakers is now more important than ever.

Predicting the future is much harder today than it was twenty or thirty years ago, when it was fairly safe to assume that the national economy would follow past developments. Today the following factors make future predictions difficult: events take place more unexpectedly and thus their predictability is low, changes in the fields of technology, economics and science take place at an increasing speed, the consequences of various events are much more farreaching than before and are harder to control. It is worth special mention that the size of the technosystem created by humankind in relation to the natural ecosystem has grown, and not without longterm effects on the environment.

As we can see, creating, or even envisaging, an "ideal forestry sector" is not easy. Anyway, in a modern forestry state, the most important goal is to preserve the vitality of the forests. By this we mean healthy forest resources with
a strong regeneration capacity. In the long run, this is the only way to maintain the industrial and economic exploitation of the forests, and, at the same time, to expand social wellbeing. What is needed is not only active research and efficient application of research results in forest biology, forest ecology and silviculture, but also political decisions on the preservation of forests. Decisionmakers must take prompt action so that the production of air pollutants and greenhouse gases can be reduced; research on environmentally sound production methods must be supported and investments in such methods must be encouraged. Unfortunately, small countries such as Finland can do very little on their own by way of protecting the environment: as we know, most of the air pollution fallout in Finland comes from a distance, and if anything, the increasing amount of greenhouse gases in the atmosphere is a global problem. A point worth mentioning is that in a recent opinion poll conducted here in Finland on forest issues, over 90 percent rated the vitality and health of the forests as the most important forest issue.

A crucial question on the way to increasing economic welfare is the future demand for forest products such as paper. How will the popularity of books and newspapers develop in relation to electronic media and its growing possibilities? The forestry sector must be prepared to face enormous challenges. New products must be developed all the time and R & D input must be raised from its current ratio to turnover. A way to increase economic welfare is also research in forest mensuration, forest engineering and forest economics, so that the sustained yield can be estimated and the timber harvested and transported for further processing using environmentally and economically sound methods.

In future, the importance of the social welfare and nonmaterial values of the forests will only continue to grow. Modern man should stop to think of the spiritual and intellectual values of life at the expense of materialistic values, if only because the earth's limited natural resources and the detrimental actions of the human race force us to do so. As far as the forests are concerned, such nonmaterial commodities as beautiful scenery and multiple use of the forests will rise in value. In the development of the forestry sector all this has to be taken into account. A modern forestry state must have a fair amount of untouched wilderness, and the methods of silviculture must be developed so that they favour the multiple use of forests. For example, clear cuttings must be limited in area, and the damage to the scenery must be kept to a minimum. In a modern forestry state the economic exploitation and the multiple use of forests are parallel activities, so that the forests are a source of both economic and social welfare at the same time. The latter also includes the biodiversity of forest nature and forest preservation. Success in this issue can only be based on facts produced by research.

Irrational ideas and misconceptions about forests and their use, propagated by certain groups, have a powerful effect on the general public, which has to be considered when planning the forestry policies of a modern forestry state. Of the utmost importance is that facts based on scientific research be made available to the public efficiently, be it in the schools, the media, or among political decisionmakers. I have been told that perhaps a kind of a "forest academy" could be organized for the political decisionmakers in the near future, so that for a couple weeks the officials and politicians would have the chance to listen to lectures on the present state and problems of the forestry sector and be shown the latest results of academic research. I think this is an excellent idea. To avoid conflict situations, it is essential to maintain a continuous exchange of opinions and information between the forestry sector and the environmentalists. Forestry experts and researchers also need to take the time to listen to the reasoning of the activists. Thus, two forces - the effective dissemination of objective information, and a close followup of the values and opinions among the general public - can be put to work towards achieving the optimal wellbeing from forestry. In ideal conditions, economic welfare can be maximized within the limits of sustainable forestry, while sufficient areas of untouched wilderness, landscaped commercial forests, and the opportunities offered by the recreational usage of forests together guarantee the social welfare obtained from the forests.

On the road to such a state of affairs, research and education play a crucial role. Research provides the information which is needed for planning future activities and is passed on to the following generations. This is why a modern forestry state has to make greater investments in research and education than Finland has been making. Political decisionmakers are under the erroneous impression that funding for research and education is like any other expenditure that can be cut to balance the state budget. This, of course, is not the case, for investment on research and education is always a profitable investment on the future.

Ladies and gentlemen, I wish this conference every success in its valuable work of exchanging the newest achievements of forest research from all over the world.

Risto Ihamuotila is the Rector (President) of the University of Helsinki, the largest university in Finland. Before his present position, he was Professor of Agricultural Policy, Dean of the Faculty of Agriculture and Forestry, and Vice Rector of the University of Helsinki.

Dr. Ihamuotila has been Chairman of the State Research Council of Agriculture and Forestry, the State Council of Higher Education and the Finnish Cultural Foundation. He also is a board member of several private companies and an active pactitioner of farm forestry.