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Chapter 6 : Physical forest accounts

Physical accounts for forests are described in three parts:

Examples are drawn mostly from the SEEA-2003 Handbook and the Eurostat pilot programme in forest accounting, notably Eurostat, 1999a, 1999b, 2002a, 2002b. Each section provides some discussion of countries’ experience in implementing the accounts.

In seeking to strike the balance described in the introduction between the technical information required to construct forest accounts and the focus on policy applications needed by forest managers and other forest stakeholders, the technical description is relatively brief. Practitioners can find a more detailed treatment of the technical aspects of constructing forest accounts in the numerous reports by Eurostat referred to in this chapter as well as SEEA-2003.

6.1 Physical asset accounts for wooded land and standing timber

6.1.1    Wooded land and standing timber

All asset accounts have three parts: opening stocks, changes during the accounting period and closing stocks. Changes during the period are divided into those that are due to economic activities and those that are due to natural or other causes. The components appropriate for forest accounts are demonstrated with examples from Finland.

The first two tables constitute forest balance accounts, the asset accounts for forestland and for standing timber in physical units (Tables 6.1 and 6.2). These tables report only the distinction by availability for wood supply; the full accounts are compiled on a more detailed basis for each category of forest, that is, by dominant species and age class of tree, naturalness of the forest, protection status, etc.

Table 6.1:        Forest asset accounts for wooded land, Finland, 1998 (1000 hectares)



Available for wood supply

Not available for wood supply


 Opening area




 Changes due to economic activities














 Other changes





Natural colonization





Natural regression









 Changes in classification








 Closing area




Source: Adapted from Eurostat 2002a, Table 10, p. 24

Changes in forestland fall into three categories:

 Changes due to economic activity: afforestation, the increase in wooded land area due to human activity and deforestation, the reduction in area due to human activity, such as forest clearing for agriculture, building, etc.

 Other changes: changes in area due to natural causes such as natural expansion or colonization or natural regression, or for reasons which cannot be determined

 Changes in classification: changes in classification within wooded land area, such as a reclassification of forestland from available for wood supply to not available for wood supply. Changes may also occur due to catastrophic events such as fires or storms. The former is an economic decision while the latter is classified as non-economic

Table 6.2:        Forest asset accounts: volume of standing timber, Finland, 1998 (million m3)



Available for wood supply

Not available for wood supply

Total on all forestland









 Opening stock








 Natural growth

















Harvested timber









      Saw logs



























Timber left in forest








 Other removals








 Other changes








 Changes in classification








 Closing stock








Source: Adapted from UN et al., 2003, Table 8.14, p. 349

There are five categories of change in stocks of standing timber:

In some countries, data do not distinguish fellings from removals , and it is assumed that all fellings are removed.

6.1.2    Data sources and country experience with asset accounts

Asset accounts for forestland and standing timber are perhaps the easiest component of forest accounts to construct—data are often readily available and there is long experience in measuring these resources for forest management. The major data source for physical accounts is the national forest inventory. These inventories are conducted over a cycle of several years; accounts for intervening years are generally estimated from forest growth models. Additional data may be obtained for cultivated forests from companies managing the forests, which usually have detailed information about species and age class of their stocks. Data for natural forests are often less readily available. Data for changes such as annual felling and removals are often obtained from annual forestry statistics.

Classifications of forests vary considerably among countries. The Eurostat attempted to find a single set of classifications for forests that all countries participating in its pilot programme could apply. One of the classifications was between cultivated and non-cultivated forests. The conceptual distinction in SNA and SEEA is that cultivated forests are under the direct control and management of an institution while natural forests are not. However, there is often a continuum of management from intensively managed to totally undisturbed forests, making the distinction somewhat arbitrary. Eurostat recommended dropping this characteristic from the classification of asset accounts, although individual countries continue to use it. This distinction is important in many developing countries and SEEA has recommended three categories - natural forests, semi-cultivated natural forests and cultivated forests.

Most other countries have included some distinction between cultivated forest plantations and uncultivated, natural forests. Data about species composition and age class are often available for forest plantations, but not for natural forests, especially in developing countries. Natural forests comprise a mix of tree species; often a more general classification is needed. For example, the forest accounts of the Philippines classify forests as dipterocarps (new growth and old growth) and pines.

6.1.3    Deforestation, depletion and forest degradation

Estimating the volume and cost of deforestation and forest degradation has been a major motivation for forest accounting, especially in developing countries. The loss of wooded land or standing timber is calculated as the difference between opening and closing stocks, but SEEA has a separate category, called depletion, which includes only those losses of wooded land or timber that are due to economic activity. Depletion of timber includes fellings that exceed net natural growth, but does not include loss of timber due to storms or fires. Depletion of forestland would refer to a permanent change in land use due to economic activity such as land use conversion for agriculture, while clearcutting without the intention of a permanent change in land use would not. If forestland is degraded to the point where it no longer meets the definition of forested land (tree cover falls below 10 percent), then the land is reclassified as other wooded land.

It would be useful to include in the asset accounts some indication of the health of the forests. Forest degradation may be indicated by many different attributes. In the forest accounts developed by Eurostat, defoliation was chosen as the measure of forest health. Accounts were constructed by all countries in the Eurostat pilot programme, from data collected both nationally and transnationally, as part of a European programme to monitor air pollution and its impacts. Table 6.3 shows an example of this account for forests in France. Forest health accounts usually include a reference year for comparison; in the example of France, a comparison between 1995 and 1999 is given. Table 6.3 illustrates accounts for two tree species, but the accounts may be disaggregated by dominant tree species in a given country. It may also be useful to distinguish additional classes of defoliation.

Table 6.3:        Forest health: defoliation by species in France


Defoliation % > 25%
(percent of trees)

Corresponding standing volume
of timber
(1000 m3)





















Source: Based on Eurostat 2002a, Table 26, p. 30.

Defoliation is only one aspect of forest health. The Montreal Process C&I include a much broader assessment of forest health, such as soil erosion, compaction or change in soil physical properties, accumulation of persistent toxic substances, loss of soil organic matter and/or changes in other soil chemical properties, and forest area subjected to levels of specific air pollutants (e.g. sulphates, nitrate, ozone) or ultraviolet B. Forest health is also evaluated in terms of abnormal infestation by pests, disease, exotic species and other factors affecting forest ecosystem health. The Montreal Process C&I also include the health of bodies of water in forests: deviation of stream flow and timing from historic range of variation, biodiversity of forest lakes and stream and biochemical health of lakes and streams.

In principle, forest accounts would include as many of these factors as data allow. Some of these factors could be included directly in forest accounts. Others require the construction of forest‑related accounts for land, water and pollution.

6.2 Physical accounts for forest goods and services

The components of forest flow accounts discussed here include timber, non-timber forest products, forest services to other commercial sectors and forest environmental protection services. The account for forest products distinguishes products for sale in formal markets, from household’s own use and other non-market uses. This characteristic is important for tracking the distribution of benefits from forests.

6.2.1    Timber, non-timber forest products and forest services

Table 6.4 shows accounts for the production of timber and non-timber forest products, and the industries that produce these products, in Sweden. Products are classified by CPC and industries by ISIC, the classifications used in SNA.

The first set of products is associated primarily with the forestry and logging industry, which are normally compiled in national accounts. The output of cultivated forests is measured as the natural growth of the forest. The output of uncultivated or natural forests is measured as the felling of timber. Forestry and logging-related services are excluded from the physical accounts for lack of appropriate physical measures. In principle, non-market harvest of timber for firewood, construction and other purposes is also included in national economic accounts, although in developing countries they are often omitted for lack of data.

Non-timber forest products include items such as wild foods that are considered agricultural products. Forest goods can be measured in tons, or in other physical units considered appropriate. Figures for timber, both net growth in cultivated forests and fellings from non-cultivated forests, are included in national economic accounts based on annual forest statistics. In many developing countries, however, the estimates of own-account felling of timber for fuel, construction and crafts may be missing or underestimated; often, it is the largest single non-market forest product harvested by households.

There is considerable controversy over the volume of timber and NTFP. In developed countries, like Sweden and other countries in the Eurostat pilot programme, information is gathered by statistical agencies about the household collection of products such as wild mushrooms and berries. In developing countries, reasonably accurate figures for NTFP may be obtained for activities that are regulated, like hunting, from official statistics. But most information about the use of non‑market timber as well as NTFP is often collected by household surveys, which are undertaken at wide intervals. Furthermore, the main purpose of household surveys is to obtain information about overall expenditure and income and the survey may not be well designed to capture forest use. In some countries, like Swaziland, this information has been collected under the forest resource assessment programme.

Table 6.4:        Output related to wooded land by product and industry in Sweden, 1998



Industries producing forest products

Type of output




Forestry and logging

Other industries


Market output

Output for own final use

Other non-market output

 Products of the forestry and logging industry (million m3)


Natural growth of forests









Raw wood









Other tree products: gum, cork, etc.*









Forestry and logging-related services**








 Non-timber forest products








Wild agricultural products: berries, mushrooms

(million kg)









Meat, skins, fur from wild game (thousand tons)









Livestock rearing

(reindeer feeding days, in millions)









Other forest products








 Forest services








 Recreational services in
 forests (number of visits in








*               Not available

**             Not measurable in physical units

***            The number of days could not be determined from the original survey data; it is estimated that most visits are for less than one day.

Source: Statistics Sweden, 2001, Tables 2.3 and 2.6, p. 49 and 5

Estimating the use of non-market forest products requires community surveys, which are expensive and usually not undertaken on a regular basis. Because of the expense of conducting extensive surveys, it is common to use the ‘benefits transfer’ approach, which entails applying estimates of values for NTFP and forest services obtained in one location to many other locations. Because wood and NTFP use may vary a great deal by region, estimates of national volumes are sensitive to the extent of the surveys and the assumptions made in applying survey results to the rest of the country.

Livestock grazing is an important component of the natural forests of some developing as well as some European countries. Livestock grazing has been included in the forest accounts of Sweden (Norman et al., 2001), Finland (Statistics Finland, 2000), Spain (Capparós et al., 2001), India (Haripriya, 2000, 2001), South Africa (Hassan, 2002) and Swaziland (Mbuli, 2003). Typically, the amount of grazing may be represented either as the number of days of grazing service for a standard livestock unit or the tons of fodder. The former is calculated as the product of the number of livestock and the number of days spent in forestland. This approach was used in India, South Africa and Swaziland. The latter is calculated as the product of the number of livestock, the number of days spent in forestland and the daily food requirements per animal. This approach was used in Sweden, Spain and Finland. Both calculations distinguish different types of livestock and may further distinguish livestock by age and sex.

Recreational services may be measured in terms of the total number of visitor days provided, a figure often easily obtained from official statistics in both developing and developed countries. Figures may also be compiled for the area of forestland used for tourism.



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