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State of Finland's Forests 2012: Criterion 6 Socio-economic functions

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Installation of wooden wall elements for a private single house.

Maintenance of the economic viability of forestry (B.8)

Economic viability is a basic requirement of sustainable forest management. Without an economically viable forest economy, there can be no ecologically or socially sustainable forest management, either. Unlike in many other European countries, in Finland wood of all forest products has by far the most important effect on the economic viability of forestry. Forest industry products account for almost 20% of Finland’s total exports.

The key factors affecting the economic viability of forestry are the market price of timber and sales volumes. Because most of the production of the Finnish forest industry is exported, the domestic market for roundwood is dependent on the international demand and prices for the exported products. The price of roundwood is also affected by the volume and price of imported roundwood.

Profitability can be improved by exploiting the current logging potential, by carrying out timely forest management works, by developing the methods available for forest management and improvements, by promoting competition in the forest-based services market, and by chaining forest management and logging sites. Forest advisory services aim to ensure that this is the case. Moreover, the recommendations for commercial forest management have been reviewed and rotation recommendations have been revised to improve economic viability.

The key objectives of Finland’s National Forest Programme 2015 include strengthening forest-based business and increasing the value of production, as well as improving the profitability of forestry. The selection of means is extensive, ranging from measures aiming at increasing the size of holdings to developing business skills of entrepreneurs.

The Strategic Programme for the Forest Sector (MSO 2011– 2015) supports the objectives of the NFP 2015 with, for example, its development measures for enhancing the competitiveness of domestic production in Finnish forestry and the forest products industry, and for enhancing the business opportunities and business expertise of the forest cluster.

Since the economic viability of forestry is vital to the maintenance of habitation, employment and entrepreneurship in rural areas, forestry is supported by several measures in regional policy. Entrepreneurial operations are encouraged by taxation and by granting start-up subsidies to new businesses. Regional activities in forestry and the wood sector are also supported through the structural funds of the European Union and by the Centre of Expertise Programme.

Forest owners can also improve profitability by performing management works on their own holdings. Increasing the use of wood for energy also help to improve profitability. The government can affect the economic viability of forestry with support and taxation measures. Under the Act on the Financing of Sustainable Forestry, private forest owners are eligible for public funding for silvicultural and forest improvement works. The funding is justified by the social benefits gained from supporting the least profitable long-term investments of private forestry and from joint projects of forest owners.

 

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  Updated: 21.03.2012 /MLier |  Photo: Erkki Oksanen, Metla, unless otherwise stated | Copyright Metla | Feedback