Economic accessibility of forest resources
Forest policy aims:
In the discussions related to new forest policy of Russia, the large differences between forest resources and economically accessible forests have been mentioned to be among the largest problems in forest management planning. It has been also pointed that the division of Russian forests into “ecological reserves” and “forests available for management” would make it easier to define goals for forest management, currently suffering especially the low profitability.
Due to profitability reasons, forest harvesting has concentrated of the to the forests close to railways, main roads and watercourses. As result, young forests and less valuable species dominate in the harvested areas close to transportation routes and mature forests in more remote areas. Unbalanced harvesting is among the reasons for the increased pressure to start harvesting of ecologically valuable forests but that are accessible. Russia is facing a risk for economic and ecological diversification of wood supply from young and immature stands close to transportation means and wood demand on mature forests in remote or ecologically sensitive areas.
For the organization of forest use that would be based on market conditions, the RF Government is working on a law of forest concessions. The concessions should be available in principle for economically accessible forest resources (i.e. commercial forests). All forest users, including foreigners, should observe the emphasize in the law: a pre-condition for forest use on the basis of the concessions should be the assessment of economically accessible resources.
Low stumpage value
In the past, under the centrally planned economy, the State had covered the transportation costs of timber – on average transported to a distance of 1800 km. The change to a market economy has made the remote forests (i.e. most of the forests in Siberia), economically inaccessible for the markets.
The current threats for the forest sector in Russia include a risk that the forest sector may not be able to increase the production without foreign investments. Russia would then be in the situation where raw material export would be among the few (if not only) viable options to increase the use of its vast forest resources. In the short run, if the forest industries are not quickly revitalised Russia may even need to import more forest products, especially paper and paper products than currently is the case.
One major consequence of the low competitiveness of the forest industries in Russia has been low ability to pay stumpage for wood. The average stumpage price paid by forest industries is only approximately USD 1 per cubic meter. The low price accompanied with many structural problems in forest administration has resulted in a continued decrease in the profitability of forestry. This, on the other hand, has resulted in decreasing investments in forest management, silviculture and forest protection. From the forest sector’s point of view, it is thus essential to increase the competitiveness of forest industries and identify economically accessible forests that are capable of generating forest revenue.
Model to estimate economic accessibility
The economically optimal distribution of wood harvesting – in terms of geographical location – can be analysed with an objective to minimise transportation costs. When combined with wood price information, transportation costs can be used as a proxy for economic accessibility of forests. For practical application, the level and location of wood demand has to be estimated also.
The forest resources accessibility, or positive stumpage (forest rent) (r) can be estimated with the formula1):
where,
P0= the price of processed wood product,
R1= normative profit of final product manufacturing,
C1= normative costs of production in product manufacturing,
m= consumption of wood per unit of the final product,
T= transportation costs for roundwood estimated according to actual tariffs,
C2(xi)= normative costs for harvesting, and
R2(xi)= normative profit in harvesting.
where,
S= normative costs for reforestation.
If forest rent (r) is more or equal to normative costs for reforestation (S), the forest resources in question can be considered economically accessible.
Economic rationale
The formula introduced has been tested in real life situation in Novgorod region, Northwest Russia. The first results justify the use of the model. The economic accessibility of forests can be estimated with available forest resource and cartographic information, and under current wood demand conditions.
In principle, the method for assessing the economic accessibility is simple and flexible. By changing any parameter in the formula, it is possible to study the respective changes in the economic accessibility of forest resources. For example, it is possible to study a (hypothetical) case in which a wood-processing mill was (re)located in the region and to analyze over which areas wood harvesting was economically feasible. Also, with given demand for wood, it would be possible to estimate which forests are economically inaccessible and thus economically more rational to classify as ecological reserves.
Assuming profit maximising behaviour from forest logging companies, the rational strategy would be to start the stocking-up from “the best” forests (with much higher forest rent) and continue towards “the worst” (with minimum forest rent value) forests. Provided that “the best” resources would be exploited first, the economic accessibility information allows development of various policy means to direct forest utilisation into certain areas. For example, if less valuable forests were to be utilised first, their use could be compensated to make them economically more feasible to harvest. On the other hand, areas with high forest rent may not become economically accessible without strict protective rules.
Anssi Niskanen
European Forest Institute, Joensuu
Anatoly Petrov
Institute for the Forest Specialists Education and Training, Moscow
Galina Filiouchkina
Forest Technical Academy, St. Petersburg
1)Petrov A. P., Mamaev B. M., Tepliakov V. K., Shetinski E. A. 1997. Public forest management. Moskva, VNIITSlesresurs. 304 p
Petrov A. P. 1989. Determination methods of stampage prise and forest resources cost estimation. In: Lesnoe hoziastvo, No. 8, p. 13-16 Top | Back | Home
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