Private Forestry Ilatvia

Eriks ZAKIS, chairman of Board Forest Owners Association of Latvia ELO 18.06.2004. Brussels

PRIVATE FORESTRY IN LATVIA: CHALLENGES AND OPPORTUNITYES In Latvia, like in another countries of the former European Eastern block, post socialist conditions allow for more effective and profitable economic activities, while new means of production and consumption may create unfamiliar threats to the environmental and forest resources. Today it is very important dissipate the myths about private entrepreneurship, forest and/or land owners themselves, relationships between different stakeholders and actors in economical matters, role of sustainable development including use of the natural resources –agriculture land and forests, resource management methods and their impact on regional or global environment. Privatisation Latvia forests starting only on year 1920, soon after proclaiming the first independence of Latvia. At the time of beginning II World War approximately 0.68 million ha was privatised. After occupation of Latvia by Soviet Union in 1940 all forests was nationalized. Second proclaiming Latvia independence from Communism regime was in 1990. According to a 1992 law “On Land Reform in Rural Districts of the Republic of Latvia”, land of private ownership up to 21.06.1940 is going to be returned previous owners or their inheritors. In the time from 1992 - 1997 private forest owners receive back 1.38 million ha forestlands, because in “kolchozs” (collective farms) time 0.7 million ha was naturally regenerated forests on agriculture lands. The Latvian Government has decided not to privatise only approx. 1.5 million ha forests that belongs to the State before 1940. Over the past 50 years the total Latvia woodland has been increasing from 1.7 to 2.94 million ha. This figures tends to increase at the expense of abandoned and surplus farmlands put to forestry uses. Since 1990, the forest area has increased by 90 000 ha and according to figures 2003 – approximately 600 000 ha of agriculture lands are abandoned and this territory going to overgrow by trees and/or shrubs because of ideal growing for forests in Latvia soils condition. The territory of Latvia Republic is 64,4 thsd. km2, the number of population is about 2,3 million. More than 44% of the total area covered by forests (32 thsd km2). Today from Latvia forests: state owned forests are 42%; private owned forests 50%, others 8%. The average size is 8-9 ha for one forest possession. Forest owners are timber growers. The products forest owners sell : wood on stamp, round wood on the road side, sawn timber, non-wood products, recreational and hunting game services. The goals of managing and the scale of its usage different in every farm. Nevertheless, everybody who owns forest, thinks of profitability to have income from it. Comparing with agriculture forestry has a bigger potential to become if not the main then at least the most important part of private entrepreneurship in the countryside. Wood and other forest products are the capital the accumulation of which is increasing steadily and continuously. Owners may use this capital, for example, in the case when failed in agriculture. A clear business strategy of forest owners is to develop the wood trade by full responsibility and control of the wood chain from the forest to the industry gate or the buyers wood yard. A reliable wood measurement, quality management system and certification is a key elements of this chain. Forest management tendencies are influenced mainly by economic motives. In Latvia there are two scales of forest operations:

1. large scale forestry, managed by the Sate forest enterprise and/or biggest companies; 2. small scale forestry, managed by family forest owners. Several international conferences in the last years, emphasise the need for strategic partnership and stand behind the following conclusions for the EU accession countries: 1. the need for sustainability, growth and entrepreneurship; 2. the need for voluntary co-operation between private forest/land Owners; 3. the need for co-operation with all national Stakeholders; 4. the need for participation in the international processes; In Latvia today established good platform a) to rize co-operative awareness, b) for application a good forest management practice in private forests, c) to create the system that shows benefit from commercial activities and d) for base to provide the lobby and forest/land owners oriented public activities. The forest/land owners movement shared the values, visions, goals and strategies for sustainable forestry development based on free market oriented management. It is important to have conditions where the private forest ownership rights are respected. Results of private forest owners survey in Latvia (1997 – 2003) show: - significant changes in forest ownership in the nearest future are not expected, because only 2% of forest owners like to sell their forest possessions; - 70% of private forest owners live near their holdings (Family Forest Owners), 30% - live outside (Urban Forest Owners); - average age of forest owners - 51 year; - 67% of forest owners male, 33% forest owners female; - 39% of forest owners receive income from forest activities, but only 15% of forest owners income from forestry is important source; - private forest owners give highest grade for non-economic aspects of forest use. More forest owners asking for: possibilities for investments; reduce the requirements; receive compensations; understandable forest policy; freedom on actions; responsibility for results; knowledge and advises etc. Forest owners choice of information sources and extension methods is determined by: property characteristics, practical experience, size of holdings, sex, age, residence place, motivation. Top of forest future role from the forest owners point-of view (max 5 point): - heritage 4.1 points; - resource for wood 3,7 points; - nature protection 3,0 points; - resource for non-wood products and recreation 2,3 points; - resource for additional income and/or as investment capital 2,0 points. Economic role of forest property has influence by average of holdings: no economic gain distribution 33,7% average 4,6 ha income will be in future 33,7% 8,4 ha supplementary income 28,8% 11,0 ha main income 3,8% 23,1 ha Dominated activities in private forest sector and main influencing factors are: fuel wood collection (65%); harvesting (37%); thinning (25%); planting (19%); aforestation (5%). Urbanized forest owners and family forestry have different forest management tendencies and motivation. Forest and forest industry is a sector of vital importance to Latvian economy. A small-scale site adapted forestry will be main strategy in the family forestry. The economic use of substantial forest areas has thus been low. The need for thinning and other forest management measures is high. The forest owners of Latvia suffers from low stumpage and profitability because of lack of development. The nature values are on the other hand often very high.

In Latvia considerable areas of forest land have been untreated by regular forest management regimes. Abandoned farm land have furthermore been regenerated naturally by forest creating large areas of mainly broad leaved species. In Latvia there exist today - large areas of untreated and not managed forests; - large volume of dead wood; - high proportion of broad leaves species; - large areas of wet forest lands. The woodlands today are divided into: commercial forests 2.52 million ha (85%) and protected forests 0.42 million ha (15%). Successful managing of the forest requires knowledge and a lot of work. Not all of the forest owners live in the same area where the forests they posses are located. Not all of the private forest owners have an opportunity to obtain the forestry knowledge and skills. The main objectives in strengthening small-scale family forestry: - the development of Sustainable Forest Management that is beneficial both economically and ecologically; - the development of Forest Owners Associations that are strong both commercially and politically; - the development of Forest Management Planning system that is private forest owner oriented and in with accordance of the Pan-European (MCPFE) sustainable forest management Criteria, Indicators and Operational Guidelines. Economically and ecologically sustainable forestry can only be achieved if the market conditions will allow the forest owner to get his/her appropriate part of the value from wood products earned by the industry. Today the market in Latvia is dominated by contractors and middleman. Therefore in many cases the income received by owners is not sufficient for investing in silvi-culture of forest improvement. Even though, to have excellent possibilities of the natural forest regeneration today in Latvia, very soon encounter quality problems. Sustainable, long-lasting, well-organized and profitable forestry requires adequate infrastructure. Latvia needs lots of investment in this sphere. The prospective volume of annual cut will extend to 10-12 million m3. On a per species basis, the yield of timber is described as follows: pine and spruce account for about 55% and birch 19% of the volume, aspen, alder, ash and oak make the remainder. The annual cutting yield in private forests is not planned, in fact 7-8 million m3. In the state forest annual cutting amount is set by Parliament 3-4 million m3 every year. Factor sustainability last 10 years was 0,48. Reforestation after harvesting is required in Forestry Act. About 70% of cutting areas (from approx. 11,000 ha each year) is reforested artificially, the rest regenerates naturally. The total growing stock has increased from 176 million m3 in 1935 to 585 million m3 in 2003 (i.e. annually 4,8%). Current annual increment is estimated to be 16.5 million m3 (coniferous forests 9,6 mill. m3). Average stands in private forests 170 m3/ha, annual average increment in private forests, that mostly cover former agricultural lands, has reached 10-12 m3 per ha. At present conifers cover approximately 60%, fairly divided between Scotch pine and Norway spruce, and deciduous trees 40%, dominated by Birch (representing about 72% of the hardwood forests and 28% of all forests). Other wide spread species are White alder, Aspen and Black alder. Oak and Ash represented in small areas about 0,5% each. CO-OPERATION OF WOODLAND OWNERS IN LATVIA In all countries where land and forests are private property, even if it is small one, and the owners themselves can not guarantee the management on professionally sufficient level, they create associations or co-operatives.

Co-operative business strategy based on partnership, standing behind: - the need for sustainability, growth and entrepreneurship; - the need for co-operation between private forest owners and family forestry; - the need for co-operation with other stakeholders of forestry; - the need for participation in the international processes. For the development of sustainable management in Latvia in the nearest future is necessary: survey of active forest owners; create the data base; strengthen the research of forest; improving method for estimation of the optimal harvesting; developing small-scale forest planning; analyses potential demand for extension services; destroy “black- grey” business; support of improvement wood based economy; developed planning-accounting systems. In 1992, supported by Agriculture Advisory service of Latvia and practical help by Cooperation of Denmark Forest Owners Association advisors T. Hansen and K. Rae, GTZ project coordinator M. Faller (Germany) and VOCA experts L. Christian and E. Brainich (from USA), small group of the first Latvian private forest owners starting to select main activities and getting experience to establish forest owners organisation in Latvia. First organisation, established in 7 of May 1993, has the name “Forest Management Association”, because privatisation and restitution process of land and forests in Latvia, soon after collapse of the USSR, was starting only. At 1997 according to a Law “On Land Reform in Rural Districts of the Republic of Latvia” 1.4 million ha forest land, which was in the private ownership up to 1940, was returned to previous owners or their inheritors. From the 2001 till today the short historical name is “KS MAA” and full official name “Forest Owners Association of Latvia” (FOA of Latvia). KS MAA became national level organization for, first of all, protection interests of all Latvian woodland owners as well as small rural contractors and wood producers, and, secondly, to support and encourage business activities of their members. Due to the excellent co-operation between regional and national organizations, any member of each of participating organizations, as well as any member of the local organizations have free access to all services and activities in the national-wide association. The slogan of KS MAA “Instead of looking for privileges, look for partners in business” is still important. Bad understanding about co-operation models, methods, benefits from cooperation is common. From the 2004 KS MAA start to develop structure, based on two main pillars: 1. establishing and strengthening of the commercial/economical cooperatives; 2. creating and developing co-operation of the public/lobby unions. The legal structure of Forest Owners Association of Latvia – KS MAA is co-operation of organisations, both as public and as members, unite of specific Forest Management and services Co-operatives and the local Forest Owners Unions. KS MAA according to Latvian legislation is non-governmental, non-profit organisation, registreted in Latvian Enterprises Register in two registers: commercial enterprises Register and public union Register. Today KS MAA is the largest and strongest national-wide, both economical (commercial) and lobbying (public), forest owners organisation in Latvia, who represent needs and necessities around 155 000 family and urban forest/land owners for protecting and realizing their economical, ecological, social and cultural interests in Latvia and abroad. Forest Owners Association of Latvia - KS MAA needs to continue to be a very egoistic organisation, to secure that the organisation become strong. What is needed now is to “duplicate” our general concept, to involve as many persons as possible on grass root level. Business strategy and Sustainable development based on training, advise and networking in these fields will have continued high priority. We need to continue on long term training programme for the local and central associations staff persons, mangers, board members and

“next generations” to them. It is very important that the training programme reflects the private forestry strategies and development plans of co-operation. After the first of May 2004 representatives from KS MAA will sit around same tables in Bruxelles as all the others strong farmers and owners organisations in Europe. Sometimes this will be good and friendly Family,but we will be some kind of competitors because each forest owners organization should protect their forest/land owners and will fight for interest of them. The one to fight for Latvian forest owners is the Forest Owners Association of Latvia - KS MAA. Only when KS MAA has real muscles government or sister organisations in Europe will listen. KS MAA is represented in Latvian Forestry Advisory Board, National Forest Development Council, Hunting Development Council and Forest Sector Expert Council. KS MAA has cooperation with forest owner organisations in Sweden, Finland, Denmark, Norway, Germany, Lithuania, Estonia and take part in different international co-operation and technical assistance projects and promotion programs for private forestry development. KS MAA participate in ELO, CEPF, IFFA, PEFCC, NBF activities. Forest management Policy The main principles for forest resource management are set by the Latvian Parliament in the Forest Law (from 2000) and Forest Policy (from 1998) “the forest is a national resource that should be managed sustain and according environmentally sound principles”. Forest Owners Association of Latvia with local subsidiary units Business centres and collaboration organisations – local forest owners organisations is a good basis for development of Sustainable Forest Management. Pan-European Forest certification (PEFC) system was proposed to private forest owners as more clear, transparent, credible un cost effective. In connection with PEFCC Technical document main organisation responsible in each National State for the implementing forest certification is forest owners national organisation. KS MAA initiated “Helsinki process” on 1999, and supported financialy establishing National Governing Body – PEFC Latvia Council. KS MAA actively participated in working groups in the process of elaboration of PEFC Latvia National scheme. After endorsement of scheme at 2000 KS MAA was certified as Regional Umbrella organisation. Today association follows for managing of certified private forests in Latvia, from a cutting contract with the forest owner to agreement with producer. Certification of forest management and the Chainof-Custody has been developed and can be used as a major support in the efforts to combat illegal logging and unserious wood trade in Latvia, in particular, in the private forestry. Chainof-custody seems to be of the best tool to reduce the extend of “grey” timber market, because it lays also some liability on wood suppliers about fulfilment of principles of SFM. KS MAA – Regional Umbrella organisation was re-certified 4th of September 2003, and receive the Umbrella Forest management and Chain-of Custody multi-site certificate in connection with ISO 45012 (EA Guidelines on the application of EN 45012) Annex 3 – Multisite certification/registration. Local organisations are responsible for information, training and education, establishing system of every years questioning; realising forest management in connection with Green forest Management plan or Nature Conservation document, for agreements etc. Forest management planning (FMP) combined with a Nature Value Evaluation routine is the basic tool for planning and monitoring of the production and environmental values. In this plan each compartment described including goals for the proper balance between production and environment. FMP includes economical, ecological, social and cultural aspects and

information about values, environmental considerations, gives possibility for forest owner use this document as a good platform for extension and advisory purposes. Gender issues In the meeting Latvian and Sweden female forest owners representatives in Riga 13-14 November 2003 was highlighted the gender issues and propose to form the Female Forest Owners Network. Today it is established female forest owners group in frame of KS MAA, one woman elected in the Board of KS MAA, the Group is starting to plan special activities. Main topics of problems was analysed : - women in forestry in general - scientists, family forest owners, urban forest owners, governmental staff, workers, teachers and lecturers in the schools and professors in universities. The seminar ended with preparing of the action plan for the next years; proposing the member - woman for the Board of KS MAA; decision of establishing women union; publishing in mass media women problems; participation in the international processes. BRIEF HISTORY CO-OPERATION OF THE PRIVATE FOREST OWNERS IN LATVIA 1993 Funded“FOREST USERS (MANAGERS) ASSOCIATION”(FMA). 1995 Set up Daugavpils FMA LOCAL CHAPTER. 1996 Developing Aizpute and Madona FMA REPREZENTATIONS, formation of the Dobele, Aizkraukle and Kraslava FOREST OWNERS CO-OPERATIVES (FOC). 1997 Founded Gulbene FOREST OWNERS UNION (FOU) and formation of the Gulbene, Madona and Latgale FOREST OWNERS CO-OPERATIVES (FOC). 1998 Founded Ogre and Daugavpils FOREST OWNERS UNIONS (FOU), established Ogre FOREST OWNERS SAVING-BANK FMA become a member of the BALTIC and NORDIC FOREST OWNERS ORGANISATIONS FEDERATION – NBF. 1999 Founded “FOREST OWNERS ASSOCIATION” (FOA), established PAN-EUROPEAN FOREST CERTIFICATION LATVIAN COUNCIL (PEFC LC). 2000 FOA registered as an PEFC “umbrella” organisation for forest and chain-of-custody certification. FOA become a member of the EUROPEAN PRIVATE FOREST OWNERS ORGANISATIONS FEDERATION – CEPF. 2001 Accepted the name “FOREST OWNERS ASSOCIATON of LATVIA (shortly KS MAA)”. Established 5 regional KS MAA BUSINESS CENTRES. Signed support and partnership agreements with 31 local FOREST OWNERS PUBLIC ORGANISATIONS in LATVIA. 2002 Registered the first KS MAA enterprise “KS MAA LDC SIA”. KS MAA become a member of the INTERNATONAL FAMIL FORESRY ALLIANCE – IFFA. 2003 Established public organisation - umbrella “Forest Owners Association of Latvia “KS MAA” and started to create the Forest Owners local forest management Unions (LFOU) and cooperatives. 2004 Evaluate the plan to create 50 LFOU, reorganise KS MAA Co-operative society and establish national umbrella Forest Owners Association with two pillars: co-operative/economical branch and public/lobby branch.

STRUCTURE OF KS MAA MEMBERS OF ASSOCIATION

Annual General Assembly COUNCIL of REPRESENTATIVES President BOARD of DIRECTORS Chairman of Board ADMINISTRATION UNIT - CENTRAL OFFICE Directors of the Departments BUSINESS CENTRES Directors of Business Centres GROUP OF CO-OPERATIVES Chairman of Board GROUP OF UNIONS

Chairman of Board NUMBERS OF LOCAL ORGANISATIONS AND MEMBERS OF ASSOCIATIONS 1992 organisations members 12 (initiators) 1993 1 86 1994 1 224 1995 2 621 1996 5 920 1997 9 1400 1998 12 4000 1999 33 10000 2000 47 40000 2001 47 560 active 40000 passive 2002 40 720 active 2003 32 980 active 2004 (on 01.04) 34 1021 active Finances of KS MAA (incomes) Commission money from customers Provision money from buyers Payment for services Rent of equipment Membership fees Payment for training courses Selling of books and information materials

2-8% from timber-trade total turnover fixed sum according specific contract condition fixed sum accepted in the Board fixed sum accepted in the Board entrance fee Ls 5,annual membership fee Ls 5,minimum one share Ls 5,according specific calculation fixed price

KS MAA IS A MEMBER Internationally

1. NBF

from 1998

2. CEPF from 2000 3. IFFA from 2001 4. ELO from 2002 In Latvia 1. MKP from 1997 2. MNEP from 1998 3. PEFC Latvia from 1999 4. LKKES from 2001 4. MAF from 2002 5. MAP from 2002 6. LZF from 2002 -

Nordic-Baltic Forest Owners Organisation federation European Private Forest Owners Organisation federation International Family Forestry Alliance European Landowners Organisation ( observer) Forest Advisory Council of Ministry of Agriculture Forest Sector Experts Council of Ministry of Economy PEFC Council of Latvia Wood-quality Control Experts Union The Council of the Forest Development Foundation Hunting Games Development Council Latvian Farmers Federation

The general tasks for KS MAA is: to promote the profitability of the members forest possessions; i.e., provide commercial activities. to offer services to the members in forest management; i.e., provide service activities. to protect and represent the interests of the members; i.e., provide public activities. to guarantee and develop forestry education and consulting for the members; i.e., provide training activities.

KS MAA Development plan from the 01.01.2004 Local unions Co-operatives Planned 50 Not planned max/min Today 14 Today 5

Location 1-2 organisations in each of 26 Administrative Districts Politics/Lobby/training Contact persons in the association Chairman of the Board Managing Director Forestry Advisor

One national-wide organisation with 6 Business Centres Trade/service/production Contact persons in the co-operative Chairman of the Board Managing Director Training Director Marketing Manager

KS MAA tasks for the years 2004 - 2006 The general plan of the umbrella organisation include:

- to favour effectiveness of utilisation of private forests; - to promote the profitability of the members forest possessions; - to protect and represent the interests of the members; - to provide and develop forestry training for the members; - to offer services to the members in forest management. The specific tasks of Local unions include: establishing and registration as legal entity 50 organisations; create the office and purchase office equipment; purchase forest measurement tools; elaborate common forest management action plan; work out the computer programs. The specific tasks of Co-operatives include: to purchase and/or sell of round-wood, non-wood products, forest land as real estate; arranging of long-term forest management; preparation of forest areas for cutting and evaluating of forest areas; preparation of Green Forest Management Plans; performance of silvi-culture works; contracting contractors for harvesting of wood, transporting timber. PRESENT STATUS (from 01.01.2004) 1. Name of umbrella organisation: KS MAA – FOREST OWNERS ASSOCIATION of LATVIA Legal form: co-operative society Founded 7 May 1993 Number of members 1021 (physical and/or juridical persons- companies) Central office staff 5 persons Subsidiary units regional Business Centres 5 regions Departments in the central office 1. PRODUCTION and SERVICES dept. 2. TRAINING and CONSULTING dept. 3. PLANNING and ACCOUNTING dept. 4. DEVELOPMENT, RESEARCH and PROJECTS dept. Business profile - purchase of timber and round wood; - provide forest works, i.e. logging, transportation, harvesting, silvi-culture; - providing services in forestry for forest owners. Main office: RIGAS IELA 113, SALASPILS, LV 2169, LATVIA Phone: +371 790056, +371 949647, +371 7949654 Fax: +371 790056 E-mail: [email protected] Chairman of Board: ERIKS ZAKIS, ing. Forestry (language English, Russian, Latvian) Mob. Ph. + 371 9457189 E-mail [email protected] 2. Name of umbrella organisation: FOREST OWNERS ASSOCIATION of LATVIA “KS MAA” Legal form: public union Founded in 20 December 2003 Number of members 14 ( juridical persons – local organisations) Central office staff 5 persons Co-operation agreement local forest owners unions 14 organisations (01.05.2004.) The main action priorities promoting co-operation among forest owners;

introducing methods of sustainable forest management; promoting certification of forests and suppliers chain; promoting of education and providing consultations. Main office: RIGAS IELA 113, SALASPILS, LV 2169, LATVIA Phone: +371 790056, +371 949647, +371 7949654 Fax: +371 790056 E-mail: [email protected] Chairman of Board: ERIKS ZAKIS, ing. Forestry (language English, Russian, Latvian) Mob. Ph. + 371 9457189 E-mail [email protected] Development, Research, Project sector Director: SKAIDRITE ALBERTINA Dr. Biol. (language English, Russian, Latvian) Mob. + 371 9631263 E-mail [email protected]