Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland

Despite positive signals from increasing growing stock volumes and improved roundwood trade, first commercial thinnings (FCTs) tend to be a bottleneck in Finnish forest management and forestry. The reasons are many, but probably the most crucial would be the lack of simultaneous economic incentives for participating agents, i.e., private forest owners and forest machine contractors. This is due to poor stand characteristics in most FCT cases: low cutting removal with small average stem size. There are five predetermined management options: (1) Industrial wood thinning with only two timber assortments, pulpwood and saw logs, (2) Integrated procurement of industrial and energy wood, (3) Energy wood thinning solely consisting of delimbed stems, (4) Whole-tree energy wood thinning with an energy price of 3 € m−3 and (5) Whole-tree energy wood thinning with energy price of 8 € m−3, that were applied for six separate forest stands located in Northern Finland, and derived from a database representing stands with an urgent need for FCT. Then, a two-phase financial analysis consisting of stand-level optimization (private forest owners) and profitability assessment (contractor) was conducted in order to find out whether there would be simultaneous economic incentives for both participants of FCT. The stand-level optimization revealed the financially best management options for a private forest owner, and then, for a contractor, the profitability assessment exposed the profit (or loss) associated with the particular management option. In brief, our results demonstrated that conducting either an industrial wood thinning (1) or an integrated procurement (2) resulted in a positive economic incentive for both the private forest owner and the contractor in all six cases (stands). Further, applying energy wood thinning with delimbed stems (3) would even generate a financial loss for the contractor, given the roadside prices applied in this study

Risk Management Behavior of a Forest Owner to Address Growth Risk

We analyze risk management behavior (financial savings versus physical savings) of a private forest owner who values amenities in relation to uncertainty about timber growth. In a two-period model, we study the properties of optimal current and future harvesting and risk management decisions. We show that the forest owner chooses the tool with the highest rate of return unless both risk management instruments are perfect substitutes. We prove that future harvesting is greater under physical savings than under financial savings. Comparative static results on amenity preferences, incomes, forest stocks, timber prices, and opportunity costs are investigated.

Das Kloster Einsiedeln als Waldbesitzer im 16. und 17. Jahrhundert | The forest ownership of the monastery of Einsiedeln in the 16th and 17th centuries

The monastery of Einsiedeln is not only the biggest private forest owner in the region but in the whole of Switzerland. Many of the forests it holds today already belonged to the monastery in the Middle Ages. In keeping with the notion of property rights at the time the monastery did not, however, hold all rights of usufruct. The monastery's forests were exploited by the «Waldleute» (the inhabitants of Einsiedeln), sometimes as common pasture, but sometimes individually. In the 16th and 17th centuries and against the will of Canton Schwyz (under whose protectorate it lay) the monastery redeemed the rights of usufruct to ensure its own supply of wood and in order to participate in wood trading with the town of Zurich. Various examples show that the monastery often only redeemed the rights of wood yield while the grazing rights stayed with the seller – clearly an arrangement that was in the economic interests of both parties. With the advent of the modern property rights and the introduction of a «regulated forest management» such an arrangement came to be seen as a big problem. This is why, in the 19th century, the monastery redeemed all rights of usufruct of its forests.

The attitude of the Flemish private forest owner towards multiple use forestry and the new forest decree

The importance of private forest in the multiple use forestry in Flanders should not be underestimated. Generally speaking, the attitude of the private forest owner is far from negative. Practice has shown some positive achievements. The private forest owner is not only interested in wood production and investment, but he also takes a very keen interest in hunting, nature conservation and recreation. Forest legislation is a good means to increase the significance of multiple use forestry in private forests. In this respect, the recent Flemish Forest Decree makes a considerable contribution, on the one hand by imposing some obligations, such as a management plan, and on the other hand by promoting wood production as well as forest conservation, recreation and nature development in the forest.