HUNGARIAN FORESTRY IN THE TRANSITION PERIOD

RUMPF János & GREDICS Szilard

BASIC FACTS AND FIGURES

Surface area and population statistics ¹

Hungary's total surface area is 93.03 km², of which 65.6% is under agricultural cultivation, 18.6% is covered by forest and the remaining 15.8% is urban or water. The population of the country stands at 10,246,000 persons, and population density is 110.1 persons per km². However, population is falling by 50,000 persons annually, equivalent to the population of a small town, despite the fact that Hungary has become an immigration target for citizens of Hungarian origin from neighbouring countries, as well as citizens from other countries.

Indicators of national economic development

Following political change in 1989, Hungary changed its economic system from a centrally-planned system to a market economy, and the transition process is still under way. Hungary is an industrial country with a developed agricultural sector. Per capita GDP is 537,000 forints (US$ 4,273).

Prior to 1989, under a system aimed at achieving full employment, the number of employed was five million, which has since fallen to four million. The number of registered unemployed is 500,000 (giving an official unemployment rate of 11%). The remaining 500,000 from the active population are either those not receiving unemployment benefits or those in the early retirement category. These latter have increased the number of retired persons in Hungary to 3.2 million, a disproportionate level for the country's economy.

The gross national debt is US$ 32 billion, and interest repayments represent a considerable, and practically irresolvable, problem for the national economy. The private sector accounts for over 70% of the economy, total exports amount to US$ 12.5 billion and imports US$ 15.1 billion. Of the 40 million people who visit Hungary, 21 million are tourists.

¹ Based on 1995 data.

ECONOMIC IMPORTANCE AND POTENTIAL OF FORESTRY AND THE WOOD INDUSTRY

According to reliable data, in the pre-1989 period, the net production of forestry and the wood industry contributed 3% to the national economy, rendering them incapable of competition with other sectors. However, in some areas, forestry and wood industry production and products are determinant and, given the non-material benefits of forestry and the value of forest assets, their importance is increasing at the level of production and services, and in terms of contribution to national assets.

FOREST ASSETS

Forest species and ownership distribution

The most important species in Hungary's pure and mixed stands demonstrate the following ownership breakdown and quantity:

Distribution of forests by main function and management groups

In evaluating forest assets, it is important to consider not only growing stock but also the forest as a living ecosystem that plays a vital role in saving and improving the human living environment. Within this context, forests fulfil three main functions: production (accounting for 80% of total forest area), protection (15%) and recreation (3%); other uses, such as for experimentation, account for the remaining 2%.

The importance of the protection and recreation functions is increasing, partly due to increasing demands from the surrounding society.

Some 99% of forests are managed under the clear-cut system (62% of seed and 36% of coppice origin), with increasing attention being paid to demand for close-to-nature management where applicable (not applicable in hybrid poplar stands).

Area, growing stock, increment and age structure of stands

The total area under forest management in Hungary is 1,719,699 hectares (of which 1,609,000 hectares are covered by forest, with the remaining almost 111,000 hectares clear-cut or undergoing reforestation. Distribution of forests by main geographical area is as follows: Transdanubia (49%), Great Plains (30%) and northern Hungary (21%).

Growing stock is 309 million m³ or 192 m³/hectare, while the annual increment is 11.4 million m³ or 7.1 m³/hectare. One-third of the total forested area was planted after 1954. The age proportion of stands is characterized by a high proportion of middle-aged stands, the result of major forest planting after World War II, and this helps explain why the total annual increment cannot be used during final and intermediate cutting.

The value of forest assets is as follows:

Under the Hungarian forest asset management development plan, a 40-year afforestation programme envisages the establishment of a further 800,000 hectares, leading to an increase in growing stock to 450 million m³ and an annual permitted cut of 14–15 million m³.

Ten years ago, the average rotation age was 57 years, but with an increase in the cutting age of native species, this has increased to 59 years. The rotation age of different species shows wide variation: hybrid poplars 15–30 years, acacia 30–40 years, beech 90–100 years, oak 90–120 years, conifers in the plains 40–50 years, and conifers on hills and in the western region 80–100 years.

Forest damage

Hungary's complex forest protection programme incorporates a 4-by-4 km forest health monitoring system grid, that is part of the ICP Forest Programme (International Cooperation Programme on Assessment and Monitoring of Air Pollution in Forests).

The health of Hungary's forests has witnessed a noticeable decline in the last two decades. According to Hungarian statistics, which are compatible with those for the rest of Europe, the proportion of healthy trees fell from 79% in 1988 to 42% in 1994. Defoliation struck mainly oak and acacia, while beech, hornbeam and other softwoods remained relatively healthy. The proportion of dead sample trees also increased from 2% to 3.1%.

Damage most often affects the crown (39.7%), but stem damage is also high (33.7%). In the latter case, it is important to note the damage attributable to human activities, one of the most-easily avoidable forms of damage, while damage to stumps and damage caused by wildlife cannot be ignored.

As a result of dry periods in recent years, the frequency of forest fires, unknown in the past, has increased causing considerable damage to Hungary's forests. This has led to the development of forest fire monitoring systems and the design of equipment capable of handling forest fires.

FORESTRY POLICY

Aims of forestry policy

In recent decades, negative impact on the natural environment, including an overall decline in the forested areas of the world, has led to an increase in the value of natural resources. As a result, developed countries have redesigned their forestry policies, giving higher priority to protection, human-environmental and social functions. The wood production function, which dominated in the past, has become subordinate to environmental considerations. The activities of social movements has led to the inclusion of environmental policy (comprising forestry policy) in the overall socio-political programmes of governments.

A similar process has occurred in Hungarian forestry policy, following the ratification of international treaties by the government, committing it to increased protection of natural resources, including forest resources.

Three basic principles underlie the goals of Hungarian forestry policy:

1. Sustainable forest management: this principle is in line with the principle of sustainable development declared at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro in 1992.

2. Close-to-nature forest management: this principle is closely related to sustainable forest management and this form of forest management should be carried out wherever feasible, starting with native forest ecosystems on forest soil. In planted forests, a close-to-nature stand structure should be developed wherever possible, taking into consideration site and economic-investment factors. Sustainable and close-to-nature forest management fulfils international commitments such as preservation of the diversity of the natural environment, maintenance of forest gene reserves, adaptation to undersirable long-term climatic change, and sustainable fulfilment of the social demands made on forests.

3. Plantation of new forests: increasing forest cover by new planting is an old Hungarian forestry policy principle, and aims to meet social and political goals. Major efforts in this direction reaped considerable results in the post-World War II period: forest cover increased from 12% to 18%. However, this level is barely half the average forest cover level throughout Europe (33–34%) and considerably lower than the desirable minimum for Hungary (25%).

Forestry and nature protection legislation

Changes in the principles of Hungarian forestry policy, together with changes in the national economic system, forced the design of a new forestry law. In addition, this law had to take into account changes in the ownership of Hungarian forests. The first change in forest legislation concerned modification of the Civil Code to allow forests to be bought and sold. Preliminary debate on the Forests and Forest Protection Law started in 1989, and terminated with passing of the law in mid-1996.

The basic features of the law in terms of forest policy are the following:

• the law considers long-term effects of forests on the environment and on the health of people as the primary beneficiaries of forests;
• by defining the economic and organizational demands necessary for the production of wood as a renewable resource, it creates conditions for the effectiveness of production;
• the requirements for proper forest management are regulated regardless of ownership structure;
• it defines the instruments for sustainable forest management, particularly the organization and functionality of the state administration system;
• to ensure proper forest management, it contains the obligation to hire specialized forestry personnel;
• it stipulates that after wood is felled in late thinning and final cuts, a contribution must be made to a special fund; this contribution currently ranges from 400 to 1,300 florints/m³, depending on species and area.

The main features of the law in terms of nature protection related to forestry are the following:

• limitations on activities in highly protected areas can be accepted by foresters;
• the desired convergence of cutting age with an age close to that of natural cutting imposes a considerable burden on forest management, particularly if restrictions concern final cuttings that represent the main source of income and involve about 20% of the total forest area. The absence of these cuttings (and therefore of regeneration) over years means a loss of billions of florints, weakening companies involved in forest management and negatively affecting other managed areas where more close-to-nature management is desirable. In stands close to the biological cutting age, natural regeneration is practically impossible, and the quality of wood from these cuttings is much lower than desirable. The negative effects of lower quality show up not only in lower income but also in wood processing;
• the law requires that silvicultural operations be carried using the close-to-nature method in protected forests;
• native species and natural methods must be used in regeneration operations;
• in protected areas, harvesting operations are permitted only in exceptional cases during the vegetation period. Clear-cutting is only permitted for non-native species and the maximum area cannot exceed three hectares; the final cut of natural regeneration cannot exceed five hectares;
• monocultures, full soil preparation and the burning of material on cuts should be avoided;
• loss of income due to restrictions can be compensated through refunds or state subsidies up to the level of demonstrable loss.

Forest ownership and organizational structure

As a result of political and economic change, and privatization, the ownership of forests today is as follows:

Most former cooperative ownership has been transformed into private ownership, and during the period of so-called 'ownership compensation' a considerable portion of state forests became private. The new forestry law envisages some form of common management system for most of the 300,000 new private owners. Forest owners' associations represent the optimal form of common management, and one which has a long tradition in Hungary.

Financing forest management

The 22 state-owned forest companies have designed their management plans according to the needs of the owner—the state. These companies pay dividends, fulfil their tax obligations, take advantage of subsidies and obtain loans under normal lending conditions. In the current period of transition, state forestry can finance itself. In 1995, all state forest companies showed a profit and their pre-tax results totalled 1.5 billion florints. Total production was valued at 30 billion florints out of a total forest production value of 45 billion florints.

Self-financing private companies receive state subsidies and allowances to enable them to run proper management systems that meet social needs. Subsidies can be used for purchasing and leasing machines, improvements, planting new forests, maintenance of afforestation, regeneration of non-commercial forests, changes to the structure of stands, creation of nurseries and building equipment for improving the recreational function of forests.

FOREST MANAGEMENT

Environmentally sound forest management, protection and silviculture

The basic principles of close-to-nature forest management in Hungary on an environmentally sound basis are in line with internationally accepted principles. Preference should be given to close-to-nature stands with a mixed structure and multiple canopy layers while avoiding clear-cuts. Determinant criteria for close-to-nature stands are nativeness, adequacy to the chosen site and capacity for natural regeneration.

The results of research in the established network of forest reserves help understand the processes under way in natural forests, and improve close-to-nature forest management. Stands destined for gene reserves can become sources of propagation of native species, and the increasing importance of mixed species edges of forest stands can help maintain biodiversity.

This approach is suitable for achieving desired results in forest protection and prevention of damage. When damage occurs, the use of chemicals should be avoided (or at most, selected chemicals may be used) and biological methods should be preferred.

The introduction of ‘gentle’ forest use and achieving an appropriate level of wildlife density also contributes to realization of the environmentally sound approach.

Harvesting (thinning and final cuts, technical equipment and costs)

Annual harvesting is slightly more than 6 million m³, compared to 8,0–8.6 million in the 1980s, and final cuts are lower than actual potential (only 64% of potential final cuts are effected).

Clear-cutting still accounts for the greatest proportion of forest harvesting (about 78%), and the remaining 22% includes coppice regeneration cutting, while regeneration from seeds accounts for only one-third of this percentage.

During sanitary cuts, 552,000 m³ of already dead or dying wood is cut, representing a level six times greater than the acceptable level. Sanitary cuts were carried out mainly in conifer stands (302,000 m³) and oak stands (201,000 m³). The relative importance of different tree species in harvesting is as follows:

Taking into account 20% loss, the gross level of use of forestry assortments stands at 4,480.000 m³, the composition of which is as follows:

Today, 70–80% of harvesting operations — formerly carried out by the forest enterprise's own machinery and workers — is carried out by external entrepreneurs, even in state-owned forests, as a result of privatization.

The mechanization of harvesting operations is strongly influenced by the changes referred to above and by the difficult economic situation. In place of the modern, large-scale, specialized machinery formerly used by forest companies, cheap equipment has become the norm (chainsaws, universal tractors with attachments, carriages, hand equipment, etc.), leading to a decrease in the level of mechanization. An estimated 60% of harvesting is carried out using the trunk method, and the remaining 40% using the assortment method.

As a result of the socio-economic changes in course, central control of technological development has disappeared, and use of forest company resources is dispersed. There is a need for principles regulating mechanization at both regional and national level. On the market side, this means purchasing smaller machinery with a more ‘gentle’ impact on forest stands and soil.

The construction of forest roads related to harvesting operations has decreased considerably. The overall length of surfaced forest roads is 3,000 km and the total length of unpaved roads 2,700 km. The density of opening up of forests is 9.5 m/hectare, including non-forestry roads built in forest areas. Road construction is subsidized by the state, including maintenance of forest railways because these operate at loss (their total length is approximately 150 km).

The cost of harvesting operations carried out by forest companies themselves is in the region of 1,100–2,000 florints/m³ (including transportation costs). The use of external contractors reduces prices by 30–40%.

Employment of forest entrepreneurs

The use of external entrepreneurs in place of forest enterprises' own workers and production systems had already started in the 1980s but became more important with the change in the political system. Their level of employment is especially high in harvesting (over 80%), and is also high in transportation (over 50%). Some forest estates and companies employ only external entrepreneurs for harvesting and transportation, and there is a tendency towards employing external entrepreneurs in biological activities related to the production process (soil preparation, afforestation, tending, nurseries, etc.).

However, despite the widespread use of external contractors, there is no automatic price-rise effect, and most of these contractors use up their entire incomes to survive and are unable to establish amortization funds. This represents a problem for the solution of future problems.

Initial problems with the quality and adequacy of forestry work are disappearing, even with the most recent entrepreneurs, but it is important to have forestry companies' own workers carry out the most complicated tasks if work quality is to be guaranteed. Low prices offered by external entrepreneurs normally mean that employees who would have otherwise offered high quality work provide low quality results.

For those external entrepreneurs unable to acquire large machinery, and with little capital, simple, effective and safe working systems have been designed that can be applied easily and deliver acceptable results at low cost. In place of former solutions based on large machines and high levels of personnel, new technologies are being developed on the basis of the spatial system, and these are being proposed to entrepreneurs.

WOOD MARKET

Wood resources

Of the 4.84 million m³ net volume harvested in Hungary, reliable species-assortment data only exist for a 3.437 million m3 cut by 19 state forest companies, although they show a reasonable average for assortment breakdown (see table below).

Veneer logs are only produced from beech (6.8%), poplar (2.0%) and oak (0.3%). Most of the country's 200,000 m³ imported roundwood is conifer sawlogs and hardwood veneer logs.

Unit prices for various assortments and species are as follows:

In 1995, wood prices increased by 37%, compared to a price increase of 18% in 1994.

Import/export trade in forestry assortments and wood products

The annual volume of imports is 4 million m³ in roundwood-equivalent, with sawlogs, lumber, cellulose and paper the major imports. Imports of hardwood lumber and a variety of veneer products are on the increase. Hungary's most important sources for wood imports are Russia, Austria, Slovakia, Sweden, Finland and Romania.

Annual wood exports stand at 4.3 million m³ in roundwood-equivalent, with paper wood, pulp wood, fuelwood, sawlogs, palettes, particle board, fibre board, parquet flooring, veneer and plywood the main exports. Sawlogs are derived from hybrid poplars, oak, beech, ash, alder and forest fruit trees. The main markets for assortments are Austria, Italy and Germany, and for wood products Austria, Germany, Italy, Great Britain and Sweden. The primary wood sector exports 28% of its products, while the export ratio of the furniture industry is 41%.

National wood balance

In the 1980s, the country's wood demand stood at around 9–10 million m³ in roundwood-equivalent, including cellulose and paper use. However, due to the economic situation and a decline in the use of wood for house construction, wood consumption has fallen considerable in recent years.

Conifers account for about 50% of the wood used and broadleaved for the other 50%. The import dependence ratio for conifers is 90% and for broadleaved 30%.

Of the 4.84 million m³ harvested domestically, 1.46 million m³ are exported. Given total imports of 3.98 million m³ and additional exports of 2.84 million m³ of primary wood products, domestic consumption is estimated at around 4.52 million m³.

FORESTRY AND FOREST INDUSTRIES STATISTICS IN HUNGARY IN 1997

Table 1: Forest Industry Products

Table 2: Timber trade

Table 3: Basic land, population and forest indicators

Table 4: Forest area —ownership, function and growing stock

Table 5: Indicators of natural conditions and types of tree

Table 6: Forest Area by stand type and ownership class

Figure 7: Felling and forestation

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