Project description - Forest Policy, Politics and Forest Programmes in Russia
Project leader: Prof. Olli Saastamoinen, University of Joensuu, P.O.Box 111, 8010 Joensuu, Finland, tel. +358-(0)13-251 3626, olli.saastamoinen(at)joensuu.fi
1. Background and description of the proposed research
In any country, forest policy plays a decisive role when the practical changes required to develop forestry are planned and implemented. Ideally, forest policy means a clear and coherent formulation of policy aims, an efficient mix of policy means to achieve the goals and the appropriate institutional structures able to conduct and implement policy. As also forest policy is "path dependent", the ideal only shows the direction where to go.
Although Russia commands huge forest resources having not only great national but also global importance, forest policy in the modern sense is a relatively new concept in the country. It emerged into professional use during the transition period of economy in the 1990s. The concept was not used during the Soviet time, although implicitly the policy existed. Its contents was largely to fulfil the timber supply targets of the industry, as given in the 5-year and annual plans.
The state has kept its dominant position in forestry during the transition period. Forests are in state (federal) ownership and are managed by state organisations. Privatisation and other forms of forest ownership have been discussed and suggested from time to time but since heated debate in the nineties it has not been a real public issue until now.
In this context it is worth to recognise the complexity of issues related to privatisation. One can make an initial hypothesis, that although legally the federal ownership of forests does exist, in reality in many areas the "privatisation" of the benefits of forests has occurred. In some cases it has even meant that the costs and obligations of the owner have been left to the state. An actual topic related and to be studied here are the large-scale forest concessions and distribution of benefits and obligations between private and public sector.
Even taking the above into account, prevailing federal ownership, in principle, could give good possibilities to formulate and implement proper national forest policy, but this is not yet the case even if much effort and debate has been put in the development of forest legislation.
The first new law during transition period called "Principles of Forest Legislation" was created in 1993 when the political power balance favoured the subjects of federation. Federal management of forests was strengthened in the Forest Code of 1997, which also restored the position of professional forest management. Presently several revisions of basic forest legislation are being prepared.
Everywhere forest policy is being formulated in the cross-swell of other sector policies such as industrial, financial and environmental. In Russia, the choppy sea of formulating forest and forest industry policies has been even more restless due to political traditions and the interplay of politics and strong economic interests.
The economic interests rise from the vast scale of Russian forest resources and the continuing struggle of the new oligarchies for the ownership or command of natural resources and industries exploiting the resources. The unstable politics related to forestry has also been demonstrated in numerous organisational changes. A related reason for policy instability has been the dispute between the Federation and the subjects of Federation (republics, regions) concerning the control of forest resources, also visible in legislation.
The problems the evolving forest policy in Russia should respond are numerous and complicated.
The fundamental challenge is financial. In 2002, federal forest income was about 120 mill. USD while the expenses of state forest administration and management were almost four times higher, 453 mill. USD.
The financing situation is further complicated by the fact, that even the present levels of expenses (by and large covering wages and salaries of forest administration) of forestry are not preventing the worsening of silvicultural situation. The main problem is an ever increasing share of less-valuable deciduous forests, mainly due to the reliance of natural regeneration and lack of tending of seedling stands.
A reason for the situation can be found in rent agreements. First, most of them are rented at minimum price, and secondly, the short rent period works as a disincentive to forest regeneration, fire protection and investments in road construction.
The low price of standing timber has been a topic discussed widely in recent years in Russia, in particular there has been comparisons with stumpage fee levels in neighbouring countries. As reasons for low stumpage fees have been mentioned the fact, that there are other ways state is collecting money from forest production, such as value added and profit taxes, custom fees, licence fees, even fines. Also high logging costs and the role of middlemen has been referred. However, few empirical studies has been carried out.
Other important forest policy problems include, briefly listed, for example the following: Forest legislation contains substantial inconsistencies with other parts of Russia's legal framework. The allocation of rights for forest utilisation is not transparent and the estimates of the amount of illegally cut timber vary between 20 - 50 %. The existing taxation system does not encourage normal business operations or new investments, and tax recovery is poor. The difficult social situation of the forest settlements requires attention. The magnitude of timber export vs. wood requirements of domestic forest industries The acts regulating forest utilisation often take little account of regional and local circumstances.
An important vehicle to implement forest policy in many countries is the national forest programme. Also in Russia, the national (federal) forestry programmes provide general development plans in their respective areas.
The most important "umbrella" programme is "Forests", the latest of which is a part of the federal target programme on "Ecology and natural resources 2002 - 2010. The new programme sets up quantitative targets for major silvicultural, forest improvement and forest protection operations. The costs of the operations are calculated and financial needs are estimated. A new feature is the preparation of sub-programmes by the subjects of Federation.
2. Objectives
Russia's forest policy presently can be understood as a composition of forest legislation, several target programmes and strategy documents and some aspects of international agreements. The documents do not yet represent any logical and comprehensive contents for forest policy. Indeed, the lack of and need for more consistent - yet sensitive to the large differences in forest conditions by regions - forest policy has been recognised since late nineties until very recently. V.N. Petrov even suggests, that there should be a federal law concerning forest policy in Russia.
The main objective of this study is to increase understanding about the rationale and contents of ongoing processes to formulate more solid Russian forest policy to respond the economic, social and environmental problems forestry is facing.
The study investigates the development of forest policy framework, including analysis of goals and means, forest legislation, national and regional forest programs and institutional changes, taking into account the involvement of politics - the strong economic and political interests.
Specific attention will be devoted to the issues which will influence the long term orientation and development of Russian forestry. Four entities are regarded here to be most relevant: 1) the argumentation concerning forest ownership including the mixed management approaches (like forest leasing and concessions), 2) financing of forestry and silviculture (closely related to timber pricing), 3) the division of governance between federal and regional levels (subjects of federation, to what extent regional initiatives and conditions will be taken care) and 4) the institutional-organisational structure of forest sector (largely making the involvement of the public sector operational).
Based on the general objective the project will work together with other sub-projects to give particular attention to policies relevant to forest management and wood procurement, timber pricing, wood export and trade of forest products.
3. Main methods and data
Both institutional, logical-analytical and comparative policy analysis methods will be employed to explore the different aspects of forest policy formulation, the processes involved as well as the political cross-swell the Russian forest policy is going through. Concerning comparative policy analysis, the most relevant reference countries are Canada, Sweden and Finland. These are also the countries, forest policies of which Russia has been most interested in.
Besides public sources and statistics the empirical data will include the research data obtained through partners, interviews of forest scientists and experts in Russia as well as high-level decision makers. Federal and regional forest programmes are important source as these provide mid-term outlooks to the future. Concerning the forest politics, besides interviews, an analysis of forest related discussion in relevant magazines will be done.
4. Timetable
From 1.3.2004 to 31.12.2007.
5. National and international cooperation
Russian partners: 1) Professor Anatoly P. Petrov, Director of the Russian Institute of Continuous Education in Forestry, and his team: docent Filyushkina G.N. (senior researcher), docent Vukolova I.A. (senior researcher) and ass. Lyutikova N.S. (junior researcher).
The team will in particular contribute to the following tasks: (i)To evaluate and assess the actual economic, ecological and social relations between federal and regional authorities and private business in the North-West Forest sector, (ii) to study the prerequisites and conditions for effective concession agreements, to analyse the financial and economic feasibility for different stakeholders, and to analyse their scale and territorial allocation in North-West of Russia
2) Professor Vladimir N. Petrov, Head of Department of Economics and Administration of Forest Use and Regeneration, St. Petersburg Forest Technical Academy.
Professor Petrov will contribute in particular 1) to the comparative analysis of forest ownership forms in North West Russia and related legislative development and 2) to the issues related to financing of forestry and related policy development. Prof. Petrov will be assisted by a senior/junior researcher.
Both professors A.P. Petrov and V.N. Petrov will contribute to the political analysis of forest policy as well to the problems related to institutional-organisational development in forest sector.
Based on well established contacts with the Forest Engineering Faculty of Petrozavosk Sate University and Karelian Science Centre there is continuous follow-up and interaction with the forestry, social and economic researchers in the Republic of Karelia.
Other international: The forest policy research network compiled during Cost Action E 19 "National forest programmes in a European context" will be utilized. Besides consortium organisations, cooperation will occur with European Forest Institute.
National: The follow-up of the studies in the field of economic, political and social sciences concerning Russia done in Finland, and in other countries, is of utmost importance.
6. Expected results and their publication and utilisation
Results: Improved understanding of the contents and processes of Russian forest policy making, in particular in the issues influencing long term development.
Publication: In international, Russian and domestic refereed and professional journals. Symposium proceedings.
Utilisation: The analytical and comparative approach will provide a useful reflecting surface for Russian forest policy scientists and policymakers to evaluate policy reforms and revisions. Forestry and forest sector cooperation between Russia, Finland and EU requires improved understanding of the development in Russian forest policy and related policy sectors.