In the countries of CEE formerly under centrally planned economies, forest resources and forest industries were owned or controlled and managed by the State for more than four decades. With the political change, the countries also began examining the privatization possibilities in the forest sector. The question of restitution of forest resources to former owners and the compensation of demands (related to losses through expropriation in the late 1940s) with forest property was and remains a hot political issue. Most forest administrations, due to lack of political lobby, had to give in to political pressure and rapidly, substantial forest resources became privately owned, sometimes too fast to avoid predictable problems, such as the fragmentation of the forest resource in small private holdings.
Most CEE countries have set a policy imposing an upper limit to the privatization of forest resources. Substantial forest resources, it is felt, have to remain state property to secure the provision of social and environmental services of forest resources on a sustainable basis. They are also to be a shining example for private forest owners. Nevertheless, some countries in CEE do not have the economic resources to adequately finance state forestry. Therefore, state forest administrations are being reformed, introducing corporate structures and mechanisms to raise efficiency. In many countries, state forest enterprises are selling or privatizing their equipment for harvesting, transport, forest road construction and maintenance operations to former employees, who then work as contractors for the enterprise. A problem which frequently occurs is that these contractors usually are not able to carry out necessary modernization of their equipment due to the lack of capital. There is widespread neglect of safety rules, ergonomic/health related issues and adequate training of the work force. An overly profit-oriented structure could also lead to neglect of the social and environmental aspects of forestry and compromise sustainability.
The forest ownership pattern of the countries under review was limited, with the exception of Poland and Slovenia, to two forms of ownership - state-owned forest and forests owned by collective farms. After World War II, large-and medium-sized forest property (mainly > 25 ha) had been nationalized in Poland. Small private property (17% of all forests in Poland), however, continued to exist formally, even though the State took control of its management. In Slovenia, 20% of private forests (large estates) were nationalized after World War II, however, two-thirds of Slovenian forests were still privately owned during the socialist period. The private forest owners had to sell their timber to the State and had to eventually form cooperatives, which were incorporated into forest management enterprises in charge of managing all Slovenian forests. In the late 1980s, the system collapsed and farmers started to sell timber on their own. In the other countries, expropriated forests were transformed into state-owned forests, or were attached to collective farms together with nationalized, agricultural land.
With the radical political changes, privatization and restitution became the foremost important agenda items in the transition process. Agencies, institutions and even ministries were created to administer and manage the process. Policies, laws and implementation guidelines were formulated. Forestry professionals were cognisant of the risks of forest privatization without a protective framework (such as a forestry extension system) to ensure the sustainable management of private forest property. Some countries surveyed, started with the privatization to various degrees, seemingly without such a framework.
Slovenia is presently the country with the highest share of private forests (68%). The share of private forests in Poland and Slovenia is not the result of privatization, since these private forests already existed in the socialist period. In Romania, in 1946, 30% of the forest resources were privately owned and 46% of all forests belonged to the communities. At present a uniform area of 1 ha of forest is being returned to the former private forest owners, which accounts for around 6% of the total forest area in the country. In Armenia, agricultural land is being privatized, but no forest land. Some of the privatized agricultural land will be converted to forest land use in the future through forestation. Private farmers may benefit from extension for agroforestry and soil/water conservation. In Latvia, the restitution process is implemented in two stages - the land use right is transferred and then the full acknowledgment of land property rights follows. In 1991, the declared Lithuanian policy was to restrict the size of private forest estates to maximum 10 ha, which was later modified to maximum 25 ha and no limitations in size in the southeastern part of the country. Above examples show, that there is a wide variation in the method and extent of forest land privatization in the region.
As compared to the forest ownership pattern in 1995, the countries surveyed (with the exception of Armenia and Romania) wish to increase the share of private forest ownership in the future (see Table 5). The Czech Republic by 8%, Poland by about 6%, Latvia by almost 19%, Lithuania by 21%, Slovakia by 7% and Slovenia with already 68% by 12% to reach a total share of 80% of private forests. Croatia and Armenia are not in a position to give definitive indications on policy directions in relation to privatization of existing forest resources, however, for Armenia it is expected that a private forest sector will develop in future through the forestation of privatized agricultural land. Hungary plans to increase private forests to 39% from 16% in 1995 and 1% in 1985. According to the information provided by Romania, the present share of private forests (6%) should be decreased to only 5% in the future. At the same time, the forestation of low-productive agricultural land is encouraged, which contradicts the intended decrease of private forest property. Parliamentary elections held in Romania in 1996, brought a change in government, through which the ruling socialists were replaced by a liberal/conservative coalition. This might result in changes in the privatization and restitution policies (See Annexes 2, 3 and 4 for details on forest ownership patterns).
Table 4: Legal basis for privatization and restitution of forest resources in some CEE countries
|
Country |
Legal basis for privatization of forest resources |
|
Armenia |
1991 land Reform (no affect on forest property privatization so far) |
|
Czech Republic |
Land Law (1992) (Bartunek, 1993) |
|
Latvia |
Law on Land Reform in Rural Districts of the Republic of Latvia (21/11/1990) |
|
Law on Land Use and the System of Land Utilization (21/06/1991) |
|
|
Land on Privatization of Land in Rural Areas (12/05/1992) |
|
|
Law of Land-books of the Republic of Latvia (22/12/1937) |
|
|
Law on the State Land Service (15/12/1992) |
|
|
Law on Land Commissions (10/06/1990) |
|
|
Lithuania |
Law en the Land Reform (25/07/1991) |
|
Law on the Conditions of Citizen Rights to Real Estate Property Restitution (09/07/1991) |
|
|
Romania |
Law of the Land (18/1991) |
|
Slovakia |
Act on Regulation of Ownership Rights to Land and other Agricultural Assets - Land Regulation Act (Act no. 229/1991 Coll.) |
|
Act on Municipal Assets (Act no. 306/1992 Coll.) |
|
|
Act on Re-addressing Wrong-doings in Relation to Properties of Churches and Religious Societies (Act no. 282/1993 Coll.) |
|
|
Act on Measures to Regulate the Ownership Rights to Land (Act no. 181/1995) |
|
|
Slovak Government Resolution 10. October 1995 on the acceleration of the forest land restitution process and removal of obstacles related |
It is expected that private forest ownership will increase since a number of countries surveyed are already engaged in or plan to implement national afforestation programmes. Countries aim to reduce their low-productive agricultural areas, for which afforestation is a viable solution. In some countries, such as Latvia, abandoned agricultural land of collective farms or restituted, but not cultivated, agricultural land is turning into forest land through natural regeneration and regrowth.
For the countries in the study the projected figures for forest land to be privately held varies from 5% (Romania) to 80% (Slovenia) (See Tables 5 and 6). For the other countries providing data the average projected private forest ownership is 30%. For comparison, private forests amount to 71% of the forest area in France and 45% in the former Federal Republic of Germany (Grayson, 1993).
Graph 1: Percentage of forest land privately held by year
Graph 2: Percentage of forest land publicly held by year
Table 7 gives an estimate of private forest owners per forest property size class. In the eight countries for which some data were available (Croatia, Czech Republic, Hungary, Lithuania, Poland, Romania and Slovenia), the overwhelming majority (over 90%) of private forest owners have a property size under 5 ha. In Croatia, Poland and Romania, 100% of forest owners fall under that property size class. In Slovenia the figure is almost 90%, in the Czech Republic it is around 75%. The data for Lithuania is not sufficient to give a clear indication of the situation. Most likely there are also private properties in Lithuania which belong to the under 5 ha size category. Information is not available on whether the property of individual owners is contiguous or divided in parts at different locations. In Lithuania, the authorities are trying to consolidate and reduce the fragmented structure of individual private forest property. Consolidation through owners concentrating their properties in one geographical location by exchanging forest properties among each other is expected in most countries once the restitution process is completed.
Table 7: Estimate of private forest owners per forest property size classes in different CEE countries
|
Country |
Size classes in ha |
||||||
|
<5 |
6-10 |
11-25 |
26-50 |
51-100 |
>100 |
total |
|
|
Armenia* |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Croatia*** |
700 000 |
0 |
0 |
0 |
0 |
0 |
700 000 |
|
Czech Republic* |
110 300 |
18 900 |
11 600 |
2 900 |
1 100 |
400 |
145 200 |
|
Hungary**** |
356 000 |
30 000 |
10 000 |
3 300 |
500 |
200 |
400 000 |
|
Latvia* |
- |
- |
- |
- |
- |
- |
- |
|
Lithuania* |
- |
· 22 500 |
- |
- |
- |
- |
22 500 |
|
Poland* |
1 400 000 |
- |
- |
- |
- |
- |
1 400 000 |
|
Romania** |
500 000 |
- |
- |
- |
- |
- |
500 000 |
|
Slovakia* |
no data available |
||||||
|
Slovenia** |
221 500 |
18 000 |
7 750 |
@ 2 750 |
- |
- |
250 000 |
* data from 1995
** data from 1996
*** data from 1997
**** estimated 1997
@ no. of private forest owners with properties > 25 ha
· Calculated approximate number of owners with a calculated average property size of 6-7 ha
In most of the countries there are temporary restrictions for selling restituted land, especially to foreigners. However, it appears that there is an informal market for privatized forest land with illegal or unofficial trading. This development has reached such a magnitude in some countries that legal action against these tendencies could lead to the collapse of the entire restitution scheme and could result to instability of the transition process as a whole. Therefore, these unofficial transactions might be legalized, in some form, in the future. This and the legal real estate business, will lead to a certain consolidation of private forest property and to a reduction of the number of forest owners in relation to the same, present private forest area. An increase of the number of forest owners and fragmentation tendencies of private forest property could be the result of real inheritance systems in a given country, meaning that a 5 ha forest property could be divided among the five children of the deceased owner to equal parts in five 1 ha properties.
Table 8: Estimate of private forest area per forest property size classes in different CEE countries
|
Country |
Size classes in ha |
||||||
|
<5 |
6-10 |
11-25 |
26-50 |
51-100 |
>100 |
total |
|
|
Armenia* |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Croatia*** |
461 137 |
- |
- |
- |
- |
- |
461 137 |
|
Czech Republic* |
100 000 |
35 000 |
30 000 |
29 000 |
50 000 |
120 000 |
364 000 |
|
Hungary*** |
245 000 |
180 000 |
120 000 |
90 000 |
30 000 |
25 000 |
690 000 |
|
Latvia* |
- |
- |
no data available |
- |
- |
- |
520 200 |
|
Lithuania* |
- |
· 155 000 |
- |
- |
- |
- |
155 000 |
|
Poland* |
1 462 000 |
- |
- |
- |
- |
- |
1 462 000 |
|
Romania** |
350 000 |
- |
- |
- |
- |
- |
350 000 |
|
Slovakia* |
1 200 |
4 500 |
> |
328 000 |
< |
535 300 |
869 000 |
|
Slovenia** |
328 333 |
165 660 |
138 795 |
@ 113 426 |
- |
- |
746 214 |
* data from 1995
** data from 1996
*** data from 1997
@ Area of private forests in forest property size class > 25 ha
· Calculated average property size between 6-7 ha
Table 8 shows that in the countries which provided data, over 50 percent of private forests belongs to the property size class of less than 5 ha. In Croatia, Romania and Poland, 100% of the private forest area belongs to this size category. In Slovakia, 60% of total private forest area belongs to forest estates larger than 100 ha, in the Czech Republic it is more than 30%. This different pattern is connected to the restitution and privatization policies, in particular to the base year of restitution claims, which differs from country to country. Expropriation in the past, had often been conducted in phases, nationalizing first the large private estates and later the smaller properties. Through the above described ongoing, unofficial market and the legal real estate business, it is expected that a certain accumulation of forest property by individuals with capital is taking place, which will increase the number of owners and the forest area of the higher size categories.
For comparison, in France, 75% of the area in private ownership is in tracts larger than 4 ha. In the former Federal Republic of Germany, 58% of the private forest holdings are under 50 ha (2% under 1 ha) and 15% over 1000 ha. In Sweden 87% of forests that are privately owned are in holdings of 25 ha or more (Grayson, 1993).
As a rough but probably conservative estimate, in the countries covered by this report between 1985 and 1995, there are probably well over 1 000 000 new forest land owners. The amount of forest concerned is well over 2 000 000 ha, more than the total forest area of Hungary or Lithuania. The average private holding is well under 5 ha.
Overall the structure of private forest ownership in many places in the CEE does not appear favorable for sustainable and efficient forest management. Forest tracts divided in many small individual properties require the association of forest owners to form larger management units irrespective of individual property boundaries. However, there are psychological barriers with new forest owners, because association brings up memories of expropriation and forced collectivization.
