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FROM CENTRALLY-PLANNED FOREST OPERATIONS TO MARKET-ORIENTED ENTERPRISES IN CROATIA

SEVER Stanislav & HORVAT Dubravko

Over the centuries, Croatian forestry has fallen under different forms of regime, ownership and management, ranging from the Ottoman empire to state control under the former Republic of Yugoslavia. Today it is on the road towards a market-oriented structure, having witnessed a number of major changes in the 20th century alone.

FROM WORLD WAR I TO TODAY

Following World War I, Croatia's forests were owned and run by a mixture of entities and individuals: the state (25.6%), private owners (24.3%), frontiersmen (18.7%), communities (13.6%), municipalities and villages (10.9%), institutions and societies (3.1%), banks and corporations (1.9%) and the church (1.8%). Following nationalization in 1922, frontier forests came under state control.

Many of the problems faced by Croatia's forests today have their origin in the post-World War II period under the former Republic of Yugoslavia. After decades of social ownership, frequent reorganization, a division of activities between silviculture and logging, and complex enterprises comprising both forest management and timber industries, forestry felt the negative effects of a centrally-planned economy. Croatian forests paid the price of, for example, an unconvertible currency, controlled information flows, high levels of inflation and high foreign debt — it is estimated that in this period, the permitted level of logging was exceeded by almost 50 million m3, with annual exports of timber standing at approximately 320 000 m3 (80% of the total wood exports of the former Republic Yugoslavia).

Since 1991, Croatia has had to face the decision of whether to follow past practices or restructure the forest economy and introduce market-oriented principles. Many key issues have still not been resolved:

Furthermore, compared to 1990, felling has fallen by about one-third, use of farm tractors with winches has dropped by 40% and skidders by about 30%, and 40% less trucks and trailers are being used to transport timber. During the war, about 3 000 chain saws were either destroyed or stolen, along with about 300 cars and mini-buses used to transport workers, 250 tractors, 200 cranes, 400 machines and other equipment, and 250 ultra-short wave radio sets and other equipment.

In 1991, the ‘Croatian Forests’ public enterprise was created, signaling the start of a new phase of forest management. ‘Croatian Forest’, which is responsible for 80% of the country's forests (see Figure 1 for breakdown of forest ownership in Croatia), has its headquarters in Zagreb, in addition to 16 forest administration units, 171 forest stations, 660 district rangers and 30 work units throughout the country.

Figure 1

Figure 1: Forest land in Croatia according to ownership (1991)

‘Croatian Forests’ is responsible for almost two million hectares of forest, in which growing stock stands at 278.3 million m3, annual increment at 8.1 million m3, annual felling at 4.9 million m3, annual reforestation at 3,300 hectares and annual afforestation at 2,900 hectares.

However, although bringing most of the country's forest area under one centralized organization has potential (for example, under one of the overall objectives of national forestry policy which is sustainable development, the annual felling rate is lower than the rate of annual increment - see Table 1), the share of forestry in Croatia's gross national product (GNP) is only 1.2% and that of the wood industry 2.5%, for a total of 3.7% of GNP. In terms of employment, forestry employs 10,000 workers and the wood industry about 30,000.

Table 1: Forest growing stock, annual increment and annual felling

OwnershipTotal growing stockAnnual incrementAnnual felling
' 000 m3' 000 m3%' 000 m3' 000 m3
State278,32485.88,1234,934
Private32,02811.71,352333
Other public7,9052.516887
Total324,257100.09,6435,354

The current annual volume of felling is about 5.4 million m3, and the breakdown of wood products is illustrated in Figure 2.

Figure 2

Figure 2: Production of wood products and waste

At present, contractors and services performed by private enterprises account for about 50% of all Croatian forest operations. Forest openings in Croatia vary from 20 m/ha in mountainous areas, to a few metres per hectare in other parts of the country - on average, a forest road net densities amounts to 6.8 m/ha.

NEW STRATEGY AND POLICY

A new forestry policy is needed for Croatia, based on a long tradition in the sector, but making use of modern technical and technological development combined with sound economic direction and a market-oriented approach. The country must establish its own system of homogenization, certification, attestation, licensing, accreditation of entities, equipment supply, contracting, services and so on. About 50% of activities today are carried out through contractors and services, although a number of different solutions are under consideration, such as full-time workers and use of equipment, full-time workers with their own equipment and cooperation with contractors.

Research is needed to provide answers to many questions related to environmental protection and other issues, such as:

The strategy of developing forestry techniques and technologies is the top of a pyramid, whose base is made up of forestry routines, tactics and operations (see Figure 3). The choice of technology is the starting point of a circle of demands related to new product strategies, a circle that includes technological, ecological and ergonomic demands, as well as demands for technicality, effective realization and maintenance, and care of sociological and cultural aspects.

Figure 3

Figure 3: Logging strategy pyramid

Garland (1996) uses a similar framework to describe the current state of logger education and training in U.S. harvesting, and this can be used to clarify the distinctions between accreditation, certification and licensing in Croatian logging operations.

A new forest policy will also mark the beginning of a stronger battle for the preservation of Croatia's natural resources, such as coastal forest and forest land. For example, forest fires represent a critical threat to coastal areas. In the first eight months of 1998 alone, almost 30,000 ha of forest land were lost through fire. Over the last decade, an average of 10,000 ha/year have been burned to the ground. A new form of organizing fire-fighting and introducing new equipment are necessary for reducing the number of hectares lost to fire. There are three forms of fire-fighting organization: (a) professional fire brigades and airborne fire-fighting fleets have been set up under the Ministry of the Interior and some bucket-equipped helicopters and airplanes under the Ministry of Defence (from 1993); (b) municipal fire-fighting units; and (c) industrial, sea or railway units (Jung, 1997). A World Bank loan will be used for a Croatian Coastal Reconstruction and Protection Project, which includes the purchase of fire-fighting equipment, afforestation of burned areas and improved efficiency in the fire-fighting sector.

The project will enhance the country's fire-fighting capability as well as fire prevention. In addition, the project will support the comprehensive forest fire management strategy developed by the government, which aims to (a) increase the resistance of forest stands to fire; (b) reduce the number of fires; (c) reduce the initial attack time and improve fire-fighting capacity; and (d) increase the efficiency of fire-fighting under high risk conditions. The proposed strategy includes a comprehensive package of prevention, pre-suppression and suppression activities.

Other issues related to forest production systems include the emerging economy, forest die-back, biodiversity, eco-balance and global physical changes.

Croatia has been able to form its own system of evaluating the most suitable strategy: educational progress, extension and training; forest engineering and technological advancements; international collaboration; increased use of forest bio-mass in generating energy; de-mining about 1,200 km of forest roads and about 2,400 km2 of forest land, etc. But the most difficult of all is to change the controlled way of thinking after half a century!

ENVIRONMENT AND FOREST SURROUNDINGS

The development and use of environmentally acceptable operating techniques and technologies must take forest surroundings into consideration. The government-environment-industry triangle has sometimes been referred to as the ‘forestry frustration and polarization triangle’ (Lambert & Whittenbury, 1996), since ten surrounding contextual factors make the situation even more complex. (see Figure 4).

Figure 4

Figure 4: The overall forest context - one aspect of strategy definition

Industrial, governmental and environmental interests must work together with a common approach to finding acceptable solutions, through engineering disciplines that are capable of organizing a systematic response to complex challenges.

There are two main factors inherent to development of forest operations: the first is continuous pressure to reduce wood procurement unit costs, the second is an increase in non-wood services. Since the 1960s, the primary research and development focus in forest operations has been on reducing harvesting costs through mechanization, replacing manual labour with machinery. Since 1985, most activities have focused on further improving profitability through better application of improved working methods and operational planning. Today's challenge is not only to further reduce harvesting unit costs, but also to integrate this with increasing demands for non-wood services. This is particularly important in silvicultural practices, where the interaction between technical applications and biological principles is inevitable.

CONCLUSIONS

Croatian forestry has chosen to follow the European model that establishes a fixed ratio between the equipment owned by forest managements and equipment owned by contractors, and 16 limited liability public companies have been created for timber transportation.

Reasonable strategies have to be found to help Croatian forests remain an irreplaceable element of the country's landscape, economy and culture, and for this reason research into the problems of transition must cover forestry practices in the widest sense of the term. Neither restructuring of non-forest work nor forest concessions offer the best long-term solution.

REFERENCES

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