Finnish Forest Research Institute  Metla

Press release 06.06.2006

Combining information and public subsidy provides best results in enhancing timber stand improvements

A combination of public subsidy and information seems to be a functional way to enhance forest owners’ investment in timber stand improvements. By providing information about the silvicultural needs and possibilities for public subsidy, information-based means such as personal assistance encourage forest owners to engage in improvement work. However, direct public subsidy has been the ultimate “helping hand” that has increased the actual area of precommercial thinnings and restoration thinnings in Finland.

This study carried out at Metla focused especially on the effects of public subsidy and personal assistance on Finnish family forest owners’ stand improvements, including precommercial thinnings, cleaning of seedling stands, and restoration thinnings of juvenile stands. Since the public funding available for forest management is not likely to increase, it is important that the available funds are allocated appropriately.

The results showed that personal assistance, by increasing the knowledge of available subsidies, expectedly increased the probability of using public subsidy. The information-based means (personal assistance and forest planning) also increased the forest owners’ probability to engage in stand improvement, and personal assistance also had a quantitative effect on stand improvements made. However, direct public subsidy had the most marked quantitative effect, clearly adding to the area of stand improvements completed. Thus, the economic incentive seems to be the ultimate “helping hand” that ensures that the work gets completed and that actually increases overall work efforts.

Emphasis placed by the owner on economic values encouraged the use of public subsidy and, therefore, indirectly also improvements in young stands. Emphasis on recreational values increased both the probability and extent of stand improvements made. Thus, objectives of wood production and recreational use support each other as regards the management of young timber stands.

Of the studied policy means, public subsidy - an economic incentive - had clearly the biggest quantitative effect on stand improvements. At the same time, however, forestry extension organizations have an important role in spreading information about available public subsidies, and personal assistance affected the stand improvements both directly and indirectly. Since the effects of personal assistance and public subsidy are closely connected, the solution may not be an either-or choice between the two policy means. Rather, the best way to enhance improvements in young stands can be a complementary combination of information-based means and direct public subsidy.

Publication: Ville Ovaskainen, Harri Hänninen, Jarmo Mikkola, and Emmi Lehtonen. 2006. Cost-sharing and private timber stand improvements: A two-step estimation approach. Forest Science 52(1): 44–54.

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