EstonianForestry and Tenure Reforms in a Nutshell

Aigar KallasChairman of the Management BoardVientiane, Lao PDRAugust 28th, 2012

2I will discuss

Background information on Estonia and its forests Property rights Timber industry Public forest administration Conclusions

3

Eesti on metsatööstuse osakaalult Euroopa Liidu riikide seas teisel kohal (Läti esimene, Soome kolmas), selgub Eurostati koostatud ülevaatest.

Sellega seoses viitab Eurostat oma raportis, et neis riikides on ka Euroopa Liidu keskmisest oluliselt rohkem metsa.

BNS, 02.09.2008

Eesti on üks suurima metsatööstuse osakaaluga riike EL-is

Forest area

Forest industr

y exports

Finland 76,5% 16,6%

Estonia 55,8% 18,4%

Latvia 49,3% 25,7%

European Union

42,2% <10%

© Eurostat 2008

Land reform impact on forest industry

4

Estonia’s total area 4,5 million ha

1,5 million ha belongs to the State

1,2 million ha managed by RMK

State is the largest land-owner in Estonia

5

0,8 million ha forest land

0,5 million ha commercial forest

1499 nature conservation areas

8000 km of forest roads

2000 km of nature trails

3 million cbm of harvest annually

turnover 137 million euro (2011)

profit 37 million euro (2011)

RMK – State Forest Management (and Nature Conservation) Enterprise

Forestry is shaped by the political history of the country

6

Period Status Forest area (%) Private forest (%)

... – 1918 Russian Province

25% 0%

1918 – 1940 Independent State

30% 10%

1940 – 1991 Soviet Republic 50% 0%

1991 – ... Independent State

55% 50%

Establishment of property rights

7

8Harvest volume 1988-2011 (million m3)

4,53,6

5,56,2

6,7

9,9

11,3

12,7 12,712,0

11,5

10,0

6,45,5 5,3 5,3

5,96,6

8,08,4

12,0?

0123456789

10111213

19

88

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

20

Source: Statistical Forest Inventory + expert opinion

9Private forest ownership structure

As a result of the Land Reform, private individuals possess 2/3 of the country’s territory; 50% of forest land is in private hands

The Land Reform was the single most important cause for increase in timber harvest levels

Approximately 25% of the private forests belong to industrial owners who represent ca 75% of the harvest volume

Majority of the industrial owners are of local origin, but also citizens of 67 other nations own land in Estonia

Forest industry development

10

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

3,00%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

Forest management

Forest industry

11Forest industry contribution to the national economy

The Land Reform boosted timber harvest, which in turn provided with a basis for forest industry development

The forest industry is owned 100% by private capital

Modernized timber industry is the single largest contributor to country’s foreign trade balance

Estonia is the 4th largest exporter of prefabricated wooden houses in Europe

12Forestry administration restructuring

The Soviet era all-in-one forestry administration has been split into a structure of institutions, where each has its own role:

- Ministry of Environment for policy and legislation formulation- Environmental Agency for granting land use permissions- Private Forest Center for advice to forest owners- RMK for management of public lands- Environmental Inspectorate for law enforcement

Forest growth for main tree species (million cbm)

13

Results of law enforcement

14

15Forest-rich Estonia

www.rmk.ee

Thank You!