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Family Forestry in Finland Forest producers ’ Americas meeting in Mexico 19.9.2014

Family Forestry in Finland Forest producers ’ Americas meeting in Mexico 19.9.2014 Janne Näräkkä Forestry Adviser Central Union of Agricultural Producers and Forest Owners (MTK). Content of the presentation. What is MTK? Family Forestry in Finland

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Family Forestry in Finland Forest producers ’ Americas meeting in Mexico 19.9.2014

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  1. Family Forestry in Finland Forest producers’ Americas meeting in Mexico 19.9.2014 Janne Näräkkä Forestry Adviser Central Union of Agricultural Producers and Forest Owners (MTK)

  2. Content of the presentation What is MTK? Family Forestry in Finland Forest Owners’ organisation in Finland

  3. MTK Organisation RURAL ENTREPRENEURS FOREST OWNERS FARMERS 154,000 members Local Farmers Associations (371) Forest management associations (FMA) (89) REGIONAL FARMERS UNIONS (14) PROAGRIA ADVISORYCENTRES FUR BREEDERS´ ASSOCIATION REGIONAL FOREST OWNERS’ UNIONS (7) THE OFFICE OF THE CENTRAL UNION OF AGRICULTURAL PRODUCERS AND FOREST OWNERS Maaseudun Tulevaisuus (Newspaper)

  4. MTK - the Central Union of Agricultural Producers and Forest Owners • It… • was founded in 1917 under Russian rule • supervises the interests of farmers, forest owners and rural entrepreneurs at national, EU and global level; • represents its members and related industries that use renewable natural resources in a sustainable way; and • has 154,000 members.

  5. Finland • We are 5.4 million • some 30 % of us live in rural areas • Our GDP is • EUR 193 billion • EUR 33,500 per capita (EU = EUR 24,400) • share of agriculture and forestry and related • industries ~10% • Share of agriculture and forest 26 % of industrial production

  6. Land Use in Finland Total land area 30 million ha (forest 20 million ha) The area of Finnish forests is about the same size as Great Britain

  7. Who owns our forests? Private families own 62% Pensioners 20% Farmers Wage & salary earners 20% 16% Entrepreneurs Other private 4% 2% Others Forest Industry 5% 9% State 24% - 345,000 private forest holdings – 632,000 forest owners – 1,3 million people connected to family forestry (25 % of the population) - Average size 30 hectares, half of the holdings under 10 hectares

  8. Sources: National Board of Taxes, Finnish Forest Research Institute and TTS

  9. Family Forestry is characterised by • Multiobjectivity → family forestry incorporates multiple values and functions • Over-generational thinking → the needs of future generations are constantly borne in mind and the forest holding is handed down to the next generation in a further improved condition • Various benefits and services provided to the society → e.g. Everyman's Right - the forests and waters are free for everyone to visit and enjoy

  10. Family forest owners’ priorities MTK promotes sustainable family forestry in accordance with the following principles: • Landowners’ constitutional rights are respected • Forest owners have the right and the opportunity to manage and use their forests in compliance with their objectives • Forestry is economically profitable • Forests are managed in compliance with the principles of sustainable forestry • All forest owners regardless of the size and location of forest has to have access to advisory and management services

  11. Law protects land owners’ rights • Protection of property is secured in Finnish Constitution which secures also private land ownership • Protection of property: nobody can be forbidden to use his/her own property in a normal way • In case private ownership and land use are to be restricted it requires enacting a law • This often follows order of procedure required for the enactment of constitutional legislation - simple majority in the parliament and 2/3 majority in the following parliament is required •  Secured and stable ownership rights are pre-condition for all investments and sustainable management of natural resources

  12. Forest management • Wood production and protection of biodiversity combined • Only domestic species used  spruce, pine and birch account for 97 % of growing stock • Small-scale forestry – average management unit ~1,5 hectares • Long rotation period (60 – 120 years) • Normally 2-3 thinnings and final felling  forest management methods will diversify in the future • => 80 – 90 % of the forest management activities in private forests are carried out by FMAs (= forest owners’ associations)

  13. Finnish forest sector is the backbone of Finnish economy • Forest sector has always played a key role in Finnish economy • GDP share of the forest-based sector 6-7% • Employs 77 000 people • Finnish forest-based sector is heavily export-oriented – over 90% of paper and paperboard is exported and over 60% of sawn wood • 25% of net export revenues comes from forest industry • Forest sector is extremely important in rural areas -> in many areas 15-20% of regional GDP comes from forest sector • Gross stumpage earnings (private forest owners) ca. 1.5 billion € annually – this means ca. 3.600 € / forest holding • Annual variation of stumpage earnings between 1 and 2 billion €

  14. Forest owners’ organisation in Finland

  15. Background of Finnish forest owner organisation • Slash and burn –agriculture and emerging forest industry led to deforestation • In 1886 first Forest Act to prohibit destruction of forests • Deforestation and lack of negotiation power towards forest industry reasons to organise forest owners • First forest management association in 1906 • In 1906 GDP/capita ~ 200 € (2013: 33 500 €) • Eero Järnefelt, Under the Yoke, 1893 http://commons.wikimedia.org/wiki/File:Raatajat_rahanalaiset.JPG

  16. Organization of Private Forest Owners Members of Forest Management Associations 345 000 Forest Holdings, • Protection of forest owners’ interests at all levels: • local • regional • national & • international which have 632 000 Forest Owners Forest Management Service provider to FO Associations 89 Regional Forest Owners’ Unions Political supervision 7 Central Union of Agricultural Producers and Forest Owners Political supervision (MTK)

  17. Central Union of Agricultural Producers and Forest Owners (MTK) • A national central organisation of private forest owners, ~ 100 workers • to influence forest policy legislation • to guide the activities of the Regional Forest Owners' Unions, to protect the interests of the Forest Management Associations • to look after the private forest owners' interests in timber trade • Strategic management of FO organisation • MTK has no position to oblige FO Unions or FMAs – all co-operation is based on voluntariness • 30 % of operating costs is covered by membership fees, 70 % by capital income

  18. Regional Forest Owners’ Unions • Regional central organs for local Forest Management Associations, ~30 workers • to promote private forestry and to protect private forest owners' interests • to guide and develop the activities of the Forest Management Associations and co-operation between forest owners • The Unions are mainly financed by Forest Management Associations’s membership fees. • MTK and Forest Owners’ Unions are not granted any state subsidies • Organisation reform going on  Forest Owner’s Unions will disappear

  19. Forest Management Associations • Voluntarily founded, administrated and funded by forest owners • Advice to forest owners seen critical FMA law regulates the functions and financing of FMAs • Currently 89 associations covering the whole country and every municipality  fusions decrease the amount of FMAs • Employ 1000 officials and 620 permanent forest workers • Employ also high number of contractors and entrepreneurs • Forest owners’ service organisation on local level to support all forest owners in all matters relatad to forests: • forest management services (planning, harvesting, regeneration, thinning, ditching etc.) • timber sales services • training and advisory services • practical organiser of PEFC group certification

  20. Forest Management Associations – a key player in Finnish forestry • 80% of the forest management activities in private forests are carried out by FMAs • 70% of preliminary planning of timber sales, 45% of timber sales through power of attorney • Mandatory forest management fee for holdings over 4 hectares  ca. 25 – 30 million €/year for FMA advisory services = ca. 12% of FMA’s total annual turnover • Average 30 hectare forest holding in Southern Finland pays around 100 €/year • Acitivities financed by forest management fee and business activities have to be separated • New FMA law (in force 2015) will be based on voluntariness and level playing field for all service providers

  21. Finnish forestry has reached the goals of forest policy Forest owner Organisation has played a central role In the future new and more diverse services are needed!

  22. Success factors and challenges • Success factors: • Importance of forests to Finnish national economy • Clear ownership rights – every m2 of land has an owner • People’s connection to forests through family ownership and Everyman’s Right • Stable political framework supporting forestry and related industries • Consensus among forest sector’s actors • Challenges: • Changing forest ownership  peoples’ connection to forest is weakening • Diversified objectives of forest owners  diverified services needed • Changing FMA law  how to keep forest owners as members in FMAs • Wood supply to industry • Competitiveness of Finnish forest industry

  23. Thank you for your attention

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