Current issue: 54(2)
For non-industrial private forest (NIPF) owners land with its timber production is an example of a capital asset. Developments in the asset’s value and yield depend not only on forest management but also on other factors that the owner cannot control, for example timber prices and the production circumstances, such as soil and climate. One important basis for decision making related to management strategy and, in the short run, to cutting and silvicultural activities is economic analysis and accounting. The owner has to decide whether to invest more in his property (planting, cleaning, building of forest roads) or disinvest (sell timber or the holding). He has to find ways to increase revenue and cut costs.
However, generally accepted accounting practices for NIPF owners are lacking. Applying business economic accounting principles and forestry accounting traditions, we outline a proposal for a profit and loss accounting and balance sheet for NIPF holdings with a view towards increasing economic awareness among private owners. Key concepts are net profit of the enterprise and calculated profit of the property. Other profit measurements that are used are gross margin, forestry margin, operating margin and operating profit. Calculated profit is based on adjusted net profit. The main concern, however, is to consider the change in the holding’s market value caused by changes in stock volume, quality and price. The contents of the accounting framework development here are applied to three management strategies. The return on investment (ROI) of forestry is compared with other investment alternatives.
The purpose of this paper is to discuss the effect that the various measures by society have on bringing the level of the annual cut by private woodlot owners in line with the forestry policy goal of a long-term sustained yield of wood. The objectives and measures of forest policy in Sweden are described, as well as the central relations which explain the development in the logging policies of the private woodlot owners.
The goal of Swedish forestry policy has long been to safeguard a sustained yield of wood. This demand has successively been tightened, defined and detailed. The principle measure employed by the authorities to obtain the goal has been silvicultural legislation.
The author summarises that of all the means available of influencing the logging policy of private woodlot owners the most effective is silvicultural legislation. However, when viewed in an historical perspective, the legislation has not been able to significantly regulate the level of the annual cut. Nevertheless, at a time when there is a shortage of wood materials the legislation will undoubtedly exert a greater influence. Changes in forest taxation could prove to be an effective means in future of, for example, achieving an increase in the annual cut of private woodlot owners.