Country report - UKRAINE

Trends in Forest Use and Conservation- Policy Options for Action

Sergiy Zibtsev¹, Vladimir Tarasenko^2
1National Agricultural University of Ukraine, Kyiv
²Ministry of Environment of Ukraine

Executive Summary

Ukraine has relatively limited area of forests and lacks its own forest resources. Forests cover 9.4 mln ha of lands. The total volume of timber comes to 1.74 billion m3. Timber presently is the forth important natural resource in Ukraine following oil, gas and coal.

Over the last decade, the development of democracy, open market economy and advanced society has achieved a great progress in Ukraine. Drastic changes in social and economical life exerted direct and indirect influence on forest sector, especially on condition of forests, biodiversity, and public attitude towards forests, production and consumption of wood products.

Most part of Ukrainian forests - sixty five percent - use for environmental and public purposes. While occupying less than 6% of the area of Europe, Ukraine holds approximately 35% of its biological diversity due to location at the junction of various natural zones and covering of the crossing of animals' and plants' migration paths. Ukraine contains four natural zones: broad leaves woodlands, forest-steppe, steppe, and Mediterranean Natural landscapes are represented on nearly 40% of the territory of Ukraine. The least transformed natural landscapes can be found mainly under forests. Near 44% of forests performs protective and conservative functions.

Since 1992, i.e. during the period of independence of Ukraine, the total area of the natural reserves doubled. Species diversity is conserved owing to the nature-reserve network that covers 4.5% of Ukrainian territory, and 57% of protected forest. The share of protected territories reaches 12.9% of the total forest area. Unfortunately efforts in biodiversity conservation are not efficient enough. The experts from the EEC summarised that approximately 9% of vascular plants and 38% of mammals in Ukraine were endangered.

In the middle of 1990s, wood industry of the country (wood sector, woodworking, as well as pulp-and-paper production) suffered severe economic decline related to ownership changes, loss of cheap timber imports and traditional market, increase of prices for energy resources, inflation rates, and lack of essential investments. Recently private land ownership, declared in the Land Code 2001, privatisation of many forest industrial enterprises and access to foreign markets intensified the economical development of forest sector. Starting 1997, woodworking has been eyeing upturn in production of major articles. Over the recent years, Ukraine turned from importer to exporter of wood and wood products and its woodworking sector is now one of the most attractive for investors. Though the general economical crisis broke industry in most Ukrainian sectors, including wood processing and paper production, it did not have much influence on the production of forest raw materials. That means more or less stable dynamics of wood harvesting for the last decade.

Despite positive changes, some principally important issues of forest policy, efficient economical and social cooperation in forest sector and at the interdisciplinary level remain unsolved. One of the most important problems is lack of clear declaratory national forest policy, which incorporates issues of national development and international forest conservation treaties. Transition to sustainable forest management and development requires an efficient mechanism for policy introduction and appropriate evaluation methods that have not been formulated yet.

Formulation of adequate goals and objectives of Ukrainian forest policy in conditions of transitional economy is another important precondition of successful transformation to SFM. At present the development of forest sector lacks balance. The emphasis is given to the economical development of state forest enterprises, which are less or more successfully adapted to market economy. To achieve more sustainability of social and ecological aspects it is necessary to improve legislation and institutional infrastructure of SFM, ratification of forest policy laws, development and implementation of the national forest policy.

1. Contribution of Forests

1.1. Forest Resources

In Ukraine the total area of forest cover constitutes 9.4 million ha. The low percentage of forest cover 15,6% motivates the priority of ecological and recreational forest function and their limited exploitation. The total growing stock comes up to 1.7 milliard cubic meters. An average increment varies in different regions from 5.0 m3 in the Carpathians to 2.5 m3 in the Steppe area.

The Ukrainian forests are characterized by no uniformity. The largest forest areas are located in the northern (Ukrainian Polissya) and western parts (Ukrainian Carpathians) where the percentage of forest cover ranges from 30 to 50%. To compare in southern and south-eastern steppe regions the percentage of forest cover does not exceed 5%. In age distribution the dominant are young (31%) and mid-aged (45%) stands. The approaching maturity forests constitute 11%, mature and over-mature also amount to 11%. Regional heterogeneity of forest require the development of a regional approach (Zibtsev et.al., 2000).

The main tree species is a Scots pine, European oak, Common beech, Norway spruce, European birch, Common alder, European ash, hornbeam and Silver fir. Coniferous forests (42% of the total forest cover) and especially Scots pine (33%) are predominant. As for hardwood the most important is oak and beech (32%).

The largest part of forests (99%) is state owned. Around 50 ministries and departments permanently exploit the state forests. The major forest user is the State Committee of Forestry (SFC) (68.3% of all forests), Ministry of Agricultural Policy (24,0%) and Ministry of Defence (2,2%). The most important producers of raw material are the state forest enterprises of SFC. During transition period the number of state forest enterprises has not almost changed, while the number of collective forest enterprises has reduced three times, and the number of private enterprises has reduced two times. Meanwhile the largest part of wood products (90%) is produced by state owned enterprises.

Ukraine has the large potential to develop the harvesting of NWFP (Zibtsev, 2001). This is proved by the availability of significant NWFP resources, historically established harvesting traditions, readiness of people for and its personal interest in taking part in such a job. The socio-political and economic changes taking place in recent years in Ukraine have substantially re-determined the role of non-wood forest products in society and economics and required the revision of attitude towards them. The lowering of living standard raised the significance of food NWFP as a component of daily diet particularly in rural regions. The advent and rise of private enterprises stimulated the increase in economic importance of non-wood products: (i) as a source of income for rural people; (ii) as a source of gaining profits in industrial, retail or consumer market sectors; (iii) as items of international trade.

At the moment, a series of unresolved problems impede the development of small and medium enterprise in the field of harvesting of non-wood raw materials. For the absence of marketing research and investigations of demand for particular products, its seasonal dynamics and trends in the development of the sector, the enterprises are poorly informed about alternative markets, There are no organizations (associations) joining producers in this economic sector which could defend the interests of enterprises and oppose the control over the market established by large exporters, The lack of NWFP certification system aggravates financial terms of export. With the proper state regulation, but without immoderate wardship, this sector is very attractive for small and medium business.

1.2. Forest management

In 2001 the volume of products produced on the enterprises of State Forestry Committee came to 824.3 mln. Ukrainian hryvnas. From the economical point of view input of forest sector is not substantial. The cost of forest products and services ranges 0.2-0.3% of the gross domestic product. Considering the low percentage of forest cover, the foreground task of forest management is forest conservation and regeneration. Thereby the main forest function is socio-economical.

Almost half of all forests perform only social and ecological functions (first group forests), thereby in 40% of these forests commercial felling is not allowed. During the second half of XX century the main indicators of forest management in Ukraine characterised by positive trend in forest cover and stand volume (table 1). The most systematic and complex forest management is fulfilled in forests exploited by the State Committee of Forestry of Ukraine (SFC), as it shown in table 2.

Table 1 - Dynamics of main indicators of forest resources in Ukraine during period 1960-2001 years

The total growing stock is estimated with 1.28 billion m3 has a mean annual growth of about 36.5 million m3 per year, of which in 2000 only about 11.4 million m3 were harvested. During the last decade the forest increment has exceeded the total harvesting volume by more than 200%. This is a result of the age of forest increase and accordingly timber volume on one hand and a decrease in final felling and thinning on the other hand. Forest management activities are currently focused on harvesting and regeneration of forests. Pre-commercial and commercial thinning in young and middle aged stands is reduced as a result of the absence of a market for pulpwood on national level.

Table 2 - Main indicators of forest management in the forests of State Forestry Committee of Ukraine

The main harvesting method is clear-cutting. Low promotion of forest systems oriented towards natural regeneration (gradual and selective felling) causes continuous increase of planted forests. At present, the share of plantations comes to 50% of all forests. It ranges from 15-20% in Carpathian regions to 80% in south-eastern part of Ukraine.

Sowing and planting of trees, which are the main reforestation methods, is annually performed at the territory of 35,000-40,000 ha. Every year forests are planted on territories clear-cut in previous years and on exhausted, eroded non-forest lands (about 20-30%), which fell out of agricultural use. To provide the demanded forest seeds and seedlings state forest enterprises (subjected to the State Committee of Forestry) have established 16,000 ha of seed plantations. Every year 100 nurseries and greenhouses cultivate about 300 million seedlings.

Large areas of pure pine plantations have low resistance to diseases, pests and are susceptible to fires. Therefore, great costs are spent to forest protection. The problem of forest fires is the most dangerous and pressing for forests of all types. In dry years forest fires reach critical levels. In Ukraine there annually recorded about 3,000 forest fires that damage more than 3,000 ha of forests.

Economical situation in forest sector has changed a lot for recent years. Amount of state forest enterprises, production and volumes of timber harvested during period 1990 - 2001 has not dropped essentially, how it takes place in other sector of industry due to effective vertical structure of organisation of forest management. As a result, volumes of timber harvested by state forest enterprise were quite stable (table 3).

Total volume of merchantable timber in 2001 with weak depression in 1997-1999 years, comes to level of 1990. In the beginning and middle of 90s, low demand for wood products in the domestic market made enterprises look for access to foreign markets, As a result the volume of exported timber increased from 3.3 million US dollars to 66.2 million US dollars in the period from 1994 to 2002 (fig. 1). Out of export profit forest enterprises purchased equipment for wood primary processing and drying, cutting tool, harvesting and tending machinery.

Fig. 1 - Export and import of wood products in Ukraine during 1996 - 2002 years

Table 3 - Main Indicators of forest management

Stabilization of economical conditions increased sale of timber produced by the state forest enterprises. For example in 2002 the turnover was 15.1%. Recently it is clear negative trends in ratio of harvesting and forest management: harvesting operations outweigh forest management activities such as planting, protection and conservation of forests (Yukhnovski, 2003). Harvested volumes rise while the quality of wood is remains low. The share of merchantable timber constitutes only 45-50%. In addition in forests where commercial final felling is performed the share of round wood does not exceed 57-58%.

In forest sector, hunting management takes an important place. There are about 480.000 hunters in Ukraine. The total hunting area, which equals to 47.7 million ha, is divided among hunting organizations. According to the statistical data, for the last decade the population of hoofed animals reduced 30%, of game-bird 20%.

1.3. Institutional aspects of forestry

The State Committee of Forestry is an authorized state body responsible for regeneration and protection of the national forest resources. Ministry of Environment Protection is the main organization that controls forest exploitation and its nature protective functions.

Institutional scheme of forestry in Ukraine have not been changed essentially during last decade. The State Committee of Forestry is a state-authorised organisation responsible for forest regeneration, productivity, protection and conservation, and forest management to satisfy public demand.

The main functions of the State Committee of Forestry are: implementation of the state forestry and hunting policy, protection, conservation and sustainable management of forests and game, development and implementation of national, international and regional forest and hunting programs.

Ukrainian forestry is organized under vertical management system: State Committee - state forestry enterprises administrations (in 21 regions), regional forestry administrations (in 3 regions), Committee of Forestry and Hunting Management of Autonomous Republic of Crimea. The State Forestry Committee system includes about 387 enterprises and organizations, among them 294 state forestry enterprises and specialized forest-hunting enterprises, 2 national protected parks and 6 nature reserves. In total in forest organisations subjected to the State Committee of Forestry the number of workers reaches 96,000 people.

1.4. Biodiversity conservation

Species diversity is conserved owing to the nature-reserve network, that constitutes 4.5% of the total Ukrainian territory, among which - 57% are forest covered territories. The share of protected territories reaches 12.9% of the total forest covered area. The fund of natural reserves of Ukraine includes (as of date 01.01.2003) 7,040 territories and objects totalling 2,715,400 hectares in area (National report, 2003). Since 1992, i.e. during the period of independence of Ukraine the total area of the natural reserves doubled (table 4).

In 2001, the State Programme of Forming of National Ecological Network in Ukraine for 2000-2015 was launched. The first stage of the Programme (2000-2005) stipulates for expansion of the surface area of national ecological network's specific elements, use of economic instruments to promote their creation on lands of all patterns of ownership, provision of relevant legislative base, conducting necessary research and making necessary arrangements. The Laws of Ukraine «On Wildlife Protection», «On Plant Kingdom Protection», «On the Red Book of Ukraine», and Statute of the Green Book of Ukraine occupy an important place among other legislative instruments, which are immediately aimed at preservation of biological and landscape diversity. A series of issues related to protection of natural habitats of animals and plants are regulated by the Land Code, Forest Code, Water Code, and Fossil Code, which were enacted during the period of independence of Ukraine.

Table 4 - Changing in amount and area of environmental protection objectives in Ukraine in the period 1992 - 2003, thousand hectares

Now Ukraine participates in implementation of a number of international legal documents in the sphere of biodiversity conservation (table 6). They include Convention on the Protection
of World Culture and Natural Heritage, Convention on Biodiversity, International Convention for the Protection of New Varieties of Plants, Convention on Wetlands, Convention on the Conservation of European Wildlife and Natural Habitats, Ukrainian government is signatory to resolutions adopted at Strasbourg (S2-S5), Helsinki (H1-H4), Lisbon (L1,2), and Vienna Ministerial Conferences, Development of new strategic plans for forest management in Ukraine requires a new national approach.

2. Main Issues

Since the year 1991, when Ukraine became an independent state, the Government has been working towards creation of favourable conditions for the market economy and democratic society. Most strata of society support this work. However, the modern conception of forest policy functions and contents is influenced by historical traditions of the Soviet Union policy. In fact, the forest legislation in many aspects was based on the Soviet Union laws. Lately intensive development of the main forest policy principles has taken places. Draft law on forest policy in Ukraine has already worked out but not adopted by the Parliament yet (Lakyda, Kravets, 2001, Siniakevich, 2000, Popkov et al, 2002).

Currently an inadequate legislation and normative documentation in forestry is a main factor that hinders transition to sustainable forest use. Besides functioning of the legislation and regulations leave out of account and do not foster formulation of market mechanisms in forest sector. Generally, timber is priced according to demand and supply, i.e. market mechanisms. However numerous administrative control institutions have a great influence on state forest enterprises, hence the economic environment is being changed from market to market-regulating environment. Forest and nature protection legislation makes an emphasis on common national principles and approaches. Thereby it hardly ever considers regional peculiarities that vary a lot.

Table 5 - Register of biosphere reserves, natural reserves, and national parks of Ukraine

N	Name	Year of foundation	Total area, ha	N	Name	Year of foundation	Total area, ha
Biosphere reserves				Natural reserves
1.	Askania Nova	1985	33307,6	1.	Crimea	1923	44T75.5
2.	Chornomorsky (Black Sea)	1985	89129,0	2.	Kanivsky	1923	2049,3
3.	Carpathians	1993	53630,0	3.	Ukrainskiy Steppe	1961	2768,4
4.	Danube	1998	46402.9	4.	Luhansky	1968	1575,5
National natural parks				5.	Polisskiy	1968	20104,0
1.	Carpathians	1980	50303,0	6.	Yaltinsky highland forest	1973	14523,0
2.	Shatskiy	1983	48977,0	7.	Martyn cape	1973	240,0
3.	Synevir	1989	40400,0	8.	Karadagskiy (Crimea)	1979	2855,2
4.	Azov-Syvasky	1993	52154,0	9.	Roztochia	1984	2084,5
5.	Vyzhnytsky	1995	7928,4	10	Medobory	1990	10516,7
6.	Podilsky Tovtry	1996	261316,0	11.	Dniprovsko Opilsky	1990	3766,2
7.	Sviatie Gory	1997	40589,0	12	Yelanetsky Steppe	1996	1675,7
8.	Yavorivsky	1998	7078,6	13.	Gorgany	1996	5344.2
9.	Skolivsky Beskydy	1999	35684,0	14.	Kazantypsky	1998	450,1
10	Desniansto Starogutsky	1999	16215,1	15.	Oputsky	1998	15923
11.	Uzhansky	1999	39159,3	16.	Rivnensky	1999	47046,8
12.	Hutsulschyna	2002	32271,0	17.	Cheremsky	2001	2975,7

The unequal value of different patterns for forest ownership exists in Ukraine. The state ownership for forest is prevailing. According to the new Land Code (2001) Ukrainian forest may be state (now above 95%), communal (now up to 4%) and private (now less then 0.1% - near 7 thousand ha). The best forests are exploited by enterprises of the State Committee of Forestry (66.1%). Forests belonging to former collective farms (so called agrarian forests) are far less productive and valuable, as they are located near villages and settlements, and have a worse control of forest management. The approaches to allow other patters of ownership, mechanisms of privatization, taxation, leasing, accounting and financing systems need development or improvement with the consideration of local economical and social conditions. An example of Carpathian Region, which is very much alike to Eastern European countries, shows that restitution is quite possible here, because of existing of information about former owners before Second World War and borders of their forests. On the other hand, historical development of eastern regions of Ukraine prevents the process of restitution, as former owners before 1917 year cannot be known.

Table 6 - International conventions and agreements with Ukrainian participation

Lately a great attention is paid to the improvement of forest management system through development of forest legal instruments e.g. Forest Code of Ukraine (Popkov et al, 2002, Storoguk, 2003), while the improvement of normative, technical and organizational, technological and staff instruments of forest policy, such as rules, codes, instructions for forest practice and so on is not enough (Poliakov M., Poliakov O., 2003).

2.1. Forest management

During last years total annual wood increment use became quite lower, while volumes of most quality timber harvesting are growing for export purposes. Decrease in harvested wood is registered while increase of the growing stock. In Ukraine for late decades the growing stock increases (twice for 40 years), whereas the annual allowed cut and volume of harvested wood has dropped (it was 13.5 mln, m3 in 1990 and 10.5 mln, m3 in 2001) (Koval, 2003). As a result, in Ukraine the level of exploitation of the increment and intensity of exploitation which not exceed 30-40% are lower then in most European countries. Economic peculiarities of forest management also depended strictly of variety of nature economic and forest resource conditions.

Along with the attaining independence in Ukraine were changed economical conditions for forest enterprises. In particularly forest enterprises became subjects of the market economy, got the proprietary right for wood harvested and were allowed to sell it in external and home markets. In the same time the budget financing of forest enterprises has been decreased continuously. Nevertheless most economically viable enterprises, such as Teteriv, Fastiv, Konotop, Gorodnyanskiy, Sarnenskiy and Vovchanskiy state forest enterprises, have fully refused to use budget financing and decided to cover all forest management costs (plantation, tending, protection against illegal cutting, fires, pests) at the their own return from wood sale. That is the proof of possible profitable and success commercial forest management in main forest regions of Ukraine (Kolisnychenko, 2000).

Though the general economical crisis broke industry in most Ukrainian sectors, including wood processing and paper production, it did not have much influence on the production of forest raw materials. That means more or less stable dynamics of wood harvesting for the last decade.

Now forest enterprises harvest 80-90% of an annual allowed cut, as they lack demand in the internal market. Furthermore, about 50% of forests are not available for wood supply. Both factors prevent intensive forest exploitation in Ukraine. Harvesting by all methods does not exceed 12 million m3, what is equal to 35% of an annual increment, In the next decade, ageing of mature forests may increase uneven age distribution as well as annual allowed cut.

A continuous reduction of state forest enterprises budgeting was another important reason in transitional period, In 2002 budgeting of forest enterprises was 14,9% of the planned, Therefore, low volume of investments prevents modernization of forest enterprises, For the last decade the investment decreased 1,8 times,

Reduction of budget and investment support intensified deterioration of forestry machinery and equipment. The machinery used for harvesting, extraction and silviculture is outdated and in many cases inefficient. Without investments in this area forests are further negatively affected by present, outmoded logging and transport technologies which lead to soil erosion and harvesting damages. An average mechanical life is about 25 years. Severance of well established economic ties of former Soviet Republics complicated purchase of new machinery as almost 80% of equipment was produced in Russia and CIS.

Carpathian Region is a good example how political and economical changes influence forest sector. In the region forest sector governed social and economical life. In Soviet times, most people (80-90%) were employed in forest management or forest industry. Till 1995 Carpathian forests had been managed by forest industrial complexes subjected to the Ministry of Forest and Wood Processing Industry, which was the largest wood and furniture industry in Ukraine. In 1995 after forest industrial complexes were privatized, almost all of them broke because of tight economical situation and noncompetitiveness. As a result, the rate of unemployment rose and so did the level of violations, illegal cutting and poaching. Hundreds of small forest enterprises, which were founded instead of large ones, have low profitability and often process illegally harvested wood. They are oriented towards the production of medium and high quality wood, so the small wood sale decreased. As a result tending of the prevalent young and mid-aged stands has become unprofitable and not sufficient. Thus the potential future quality of mature wood reduces. At this phase of development it is necessary to work out a new model for forest management that would combine economical, social and ecological goals.

2.2. Institutional arrangement

In Ukraine, the equal conditions for cooperation of all stakeholders in forest sector have not been created. The main actors in forest sector are the state administrative institution: the State Committee of Forestry and enterprises subjected to it. SFC combine functions of control, administration, legislation with management and commercial activities what is the main disadvantage of this system. The experience of some post-socialistic Eastern European countries proves that centralized control-administrative system of forest management is efficient at the transition period but it should be replaced when the market economy become stable (Antonenko, 2003). In accordance with decrees of President of Ukraine in January 2004 control function for forestry will be transmitted to specialised Forest Inspection of Ministry of Environment. Some other reformation in sphere of separation functions also will be provided.

2.3. Biodiversity conservation

Unfortunately biodiversity conservation is not efficient enough. There are about 356 endangered plants and 263 animal species that enter the Red Book of Ukraine, In addition 42 plant associations are registered in the Green Book of Ukraine, The experts from the EEC summarised that approximately 9% of vascular plants and 38% of mammals in Ukraine were endangered. A considerable ecological and social problem is considered to be the contamination of 3,5 million ha of forests as a result of Chernobyl Nuclear Power Plant catastrophe.

These are main issues to be considered while development and implementing forest policy in sphere of biodiversity (Lakyda, 2001, Popkov, 2002, Zibtsev, 1998): 1) the intensive development of Ukrainian industry in 50-80s had a great negative impact on the environment in important forest regions in the northern and central part of the country (pollution of atmosphere and soils, low level of subterranean waters, change of forest growing conditions, large-scale change in forest management caused by global climate change and radionuclide pollution by the catastrophe at Chernobyl Nuclear Power Plant); 2) high fragmentation of forests territories, large share of planted (45,6%) and coppice (18,7%) even-aged forest with a pure composition and simple form, characterized by low resistance to fires, windfalls and pests; 3) good balance between areas of forest reserves, national parks, other protected territories (above 10%) and exploitable forests.

The factors enumerated call for considering of existed ecological problems and requirements to biodiversity conservation in forest practice. The priority is to enlarge the share of environment friendly selective and shelterwood silviculture systems. Today above 90% of wood harvested by clear cutting methods, followed by artificial reforestation. The system of tending should also be improved. Most tending should not be carried out in mid-aged and approaching maturity but in young trees. Besides, obsolete caterpillar tractors damage forest soils and other forest ecosystem components. Therefore, a new harvesting technological policy should be oriented towards use of medium and small agricultural or special forestry tractors. One of the important problems to be solved is reorientation of reserves forest management, which is the main means to conserve biodiversity in forests. In addition, the attention ought to be paid at forest management and exploitation of forests contaminated by radionuclide and industrial waste.

2.4. Wood processing

The transitional period has worked significant changes to the structure and volume of wood processing and timber production. Till 90s small sawmills of state forest enterprises processed about 1,5 mln,m3 of small merchantable and low quality wood a year. They gave employment to the local population and satisfied their demand for joinery and other wood products. Unfortunately economical crisis damaged earlier established commercial contacts, staff was made redundant and enterprises that were regular consumers shut down.

For last five years, the structure of foreign timber trade has been subjected to serious changes. Now the total import and export of timber and other wood products such as paper and furniture does not exceed 4% of total foreign trade. Still lately the tendency is recorded to sudden increase of wood and timber export (2.5 times for 6 years). Alongside with export there is a quick rise of wood import. For instance in 2001 it was registered 50% higher than in the previous year.

In 2000 the harvested wood came to 5,2 mln,m3, the export of merchantable wood was 1,3 million m3 that was 25% of harvested. Though mean prices for Ukrainian unprocessed hardwood are 20-35% lower than prices in Europe. At this Europe imports about 50% of Ukrainian export roundwood.

The export of high-level processed timber tends to rise. However, prices for Ukrainian sawnwood are three times and for high-level processed timber 30-40% lower than for products made in Europe. Low prices for Ukrainian export products are explained by their low quality. Therefore, wood-processing industry needs modernization. These are the main reasons of slow forest industry development: low domestic demand, out-of-time payment, lack of working capitals and high rate of interest, low marketing and management level in enterprises and disbalance of foreign and domestic prices (2,5 times). Present economical conditions stimulate entrepreneurs to increase roundwood export and prevent development of wood processing and paper industry in Ukraine.

The share of wood and paper industry in the national production turnout at the moment is also low. It ranges 0.9-1.1%. As mentioned above last decade political and socio-economical changes caused shift in Ukrainian forest management. To begin with, they effected demand for timber products. In Ukrainian Socialist Republic, the annual demand for wood came to 36 million m3. Almost half was imported to Ukraine from other regions of USSR. In 1991 after Ukraine gained independence, the demand for wood reduced nearly three times because of economical instability and weak domestic market. The forest and wood based industry in Ukraine has characterised by the deepest crises during the last ten years (table 7).

Table 7 - Production volumes and capacity of wood-processing enterprises (Vichevich, Nikitchenko, 2001)

In mid 80s the performance of forest industry was relatively stable. But later change of ownership, loss of traditional markets, sharp and disproportional growth of operational costs, increased transport tariffs and high inflation deteriorated the situation in forest industry and other sectors. Wood-processing sector has deteriorated because of privatization and actual bankruptcy of most large enterprises that consumed and processed wood. To date the prevailing are small and medium private enterprises that are not capable of processing large volumes of small-sized wood harvested in tending, Consequently, there is a decrease in solvent demand for round wood and primary products and a change in home market consumption, On the contrary the volume and economical profitability of timber and primary products (first of all sawn-wood) exported by state forest enterprises has increased.

At present in wood processing and paper industry the share of forest management products expenses is only 4%. The main expenses of the mentioned industry are for trade, transport, fuel and power supply. Large wood processing enterprises oriented for production of value-added wood products with relatively long production cycles suffered most of all. The majority of large enterprises, such as plywood and board plants, pulp mills and furniture factories went bankrupt during first years of the restructuring. Many of them have considerably reduced their output or terminated production. With the shutdown and dismounting of the Kherson and Izmail Pulp and Paper Mills the production of bleached hard-wood pulp was terminated in Ukraine. As a result of this a national market for small dimension and low quality timber is practically not existent.

Other sectors consume even less forest products than forest and wood based industry. People mainly from rural regions consume about 5% of wood production. Lack of demand at the domestic market stipulate accumulates of unsold forest products, which annually volumes constitute 20% of total wood produced. Therefore, the economical collaboration of forest industry and other sectors that consume timber is not regulated or absent. Appropriate actions should be taken to improve investment condition for this sector of industry.

The import of pulp, paper, cardboard, books and newspapers are 200-250 millions US dollars higher than export of the same products. Thereby Ukraine has enough own raw materials (low quality and fuel wood constitute 40% of all harvested wood) to produce paper pulp. In fact, Ukraine mainly exports unprocessed and sawn wood and imports high-level processed timber. Last years export ratio of unprocessed and sawn wood came to 81-86% of the total timber export. For the same period, the general import ratio of particle and fibreboards has increased to 70% in 2001. Along with economical stabilization forest sector has improved, however domestic prices for timber remain lower than foreign till now.

2.5 Social and cultural aspects of forestry

The change of economical conditions for forest enterprises and increasing the cost of forest products influenced social aspects of forest exploitation for the society in general and especially for those people who work in forest sector or consume forest products. A sharp deterioration of living standard registered in transitional period (decrease in living wage caused by inflation and inefficient economy, unsatisfactory social protection, high level of unemployment in agrarian sector) raised the role of forests as a source of fuel wood (especially in Carpathians and Polissya) and non-wood products, first of all foodstuff. At the same time the illegal exploitation of forest resources increased (illegal cutting, poaching etc.). In regions with extremely high unemployment level (60-70%), it reaches catastrophic scales. While the agrarian reformation was carried out on more then 60% of agricultural part of country and large agrarian enterprises (collective farms - kolkhosy) were destroyed, forest enterprises became more important because they employed villagers. Moreover, the development of wood processing will be also very important for both cities and countryside labour-market.

Under the urbanization and industrialization processes goes on the social and cultural role of forest is growing in society. It creates favourable conditions for recreation and health, improves ecological conditions. The positive factor is intensification of discussion in mass media the role of forest for the society. That means growing of public interest to problems of forests and forest management. Nevertheless, the information distribution, especially in villages, is not high. Moreover, often forest information is manipulated to attain some political goals.

3. Policy Options

The present-day objectives and social requirements of forest policy are determined by historical and climate peculiarities of forest management in Ukraine. Problems of Ukrainian forest policy implementation arise of economical, ecological and social situation in forest sector, which should be taken into account.

Ukraine has joined the process to generate the common SFM ideas and principles oriented towards inexhaustible forest exploitation and regeneration of forest ecosystems biodiversity. In this context, the strategic objectives of the national forest policy are related to those enumerated in international agreements of sustainable development, sustainable use and protection of European forests. At the present development phase, national experts work towards formulation both short-term and perspective goals of forest policy, methods of formulation and implementation. Though there is some disagreement as to the details and understanding of forest policy aspects, the majority agrees to the fact, that efficient and adequate forest policy is an important precondition for transition to sustainable forest management (Bregnev, 1999, Koval, 2000, Siniakevich, 2000, Lakyda, 2002, Popkov, 2002). But most part of specialists agreed that underdevelopment of forest policy at the moment hinders the development of forestry at the national and regional levels.

The comparative analysis of the Ukrainian forest sector and common European context of sustainable forest sector development creates prerequisites for the formulation of common forest management objectives in Ukraine (Lakyda, Kravets, 2001, Lakyda, 2002, Popkov, 2002, Zibtsev, 2003). First of all, it is extensive regeneration of forest resources, including extending the forest covered territory to the optimal level by reforestation of exhausted and eroded agricultural lands, polluted and damaged areas. An important point is to raise the quality of forests what requires an implementation of environmentally sound forest operations.

In ecological sphere, the most important task is to conserve and regenerate forest biodiversity, to maintain the resistance and viability of forests, including wider involving of close-to-nature silviculture, to improve forest monitoring system, forest fire protection, and pest and disease control. Other goals of sustainable forest management also should be taken into consideration. It is necessary: (1) to introduce multi-functional forest resource use, including improvement regional based silviculture systems and to strengthen forest resistance against negative impacts; (2) to enhance landscapes protective role of forest, aesthetic functions of pre-urban and urban forests; (3) to foster green tourism; (4) to organize the dialogue to solve problems of forest exploitation; (5) to increase the economical efficiency of forestry, profitability of forest enterprises; (6) to develop state and legislative incentives of wood-processing industry development (that will increase the demand for wood of different quality and size).

The achievement of these goals is based on the principles of market economy and free competition, participation of all stakeholders, cross-sectoral co-ordination, and institutional arrangements. Also important are the equal conditions for development of all patterns of ownership; stability of round wood market; increase of local wood-processing, availability of information about forest resources, round wood harvested volumes, export and import of timber.

Important mechanism for enhancing the contribution of forests to the sustainable development and people's well-being in Ukraine is the State Programme "Forest of Ukraine 2002-2015", adopted by the Cabinet of Ministers' of Ukraine on 29 April, 2002 (resolution № 581). State Programme Forests of Ukraine determines main guidelines of national forest management development (table 8).

Table 8 - Main outputs of the State Programme "Forest of Ukraine" on a period 2002-2015 years

Implementation of the programme will increase forest cover by 0,5 million hectares, percentage of forest cover from 15,6% to 16,1% and total growing stock by 16,7%. Wood harvesting will increase by 15-20%. And at the same time it will improve biodiversity and environment at local, regional and global levels, reduce soil degradation and greenhouse gases concentration in the atmosphere and mitigate climate change. Besides, implementation of the Programme will contribute to UN Framework Convention on Climate Change and Convention on Biodiversity Conservation. 

To develop sustainable NWFP harvesting and marketing it is necessary: a) to provide the legislative support for Ukrainian industrial enterprises that use domestic raw materials, to form and advertise through trade agencies the positive image of Ukraine in this international trade sector; b) to create the centralized system of licensing the special use and export of NWFP aimed at regulating the harvesting regions, volumes and kinds of gathered raw materials and taking into account the requirements for protection of the resources; c) to work out approaches of NWFP certification to exercise the control of the harvesting volumes in regions; d) to protect interests of local people, as for them NWFP comprise the irreplaceable part of basal ration and harvesting for sale is sometimes the only source of income.

Forest certification development is an important step for development export for forest products. Now under the project WWF/WB initiated the process of establishment of a National Working Group (NWG) for the development of national standards for sustainable forest management and certification. Implement certification of timber and timber products helps to improve forest management and to facilitate market access for forest products.

In conclusions, it should be mentioned that forest policy in transition period is oriented towards creations of legal, organizational and economical conditions of SFM, strengthening the role of legislation and fostering of market economy development. Major issues and challenges for capacity development in support of policy development towards sustainable forest management and sustainable development are the diversification of forest ownership and wood-processing methods that function in forest sector of economy, dividing of control function of forest exploitation, function of management and usage of profits from forests and improvement of legislation for all forest relations at the national and regional levels to implement the objective of the national forest policy.

Literature

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Panel presentations