TOWARDS SELECTION AND DEVELOPMENT OF ORGANIZATIONAL OPTIONS
Analysis of forest organizations shows a broad distinction between emphasis on political issues at regional/ national level vs. an emphasis on economic and forest management activities at local level. This general distinction is the first principle for a general structure of forest owner organizations. The purpose of organization therefore depends on the level on which an organization acts.
Some form of organization is necessary for effective co-operation on a larger scale. In all countries there are formal corporate organization types regardless of the ownership structure of the forest. In general, corporate organizations cover the major part of privately owned forest area. Nevertheless this does not exclude the possibility of additional informal arrangements or management by contract.
Nested units (i.e. multiple layer organization for larger systems) are necessary to make organizations robust3. Every surveyed country follows this principle for its major organization options. Due to the adaptation to the local economic sector, the actual number of units at each level may be reduced (e.g. at the national level in France and at the local level in Finland and Germany)
The experiences of the past few decades in Eastern and Central Europe have led to a mistrust of organization forms with obligatory membership, approach is perceived as closely related to collectivism. Options based on voluntary membership therefore dominate in Europe and are generally more attractive to new landowners. In case of the obligatory membership approaches (e.g. a Chamber) the benefits need to be very clear and membership fees as low as possible.
While it is not generally seen as appropriate to create co-operation units based on common property after the restitution of individual ownership, creation of community forests with owner shares according to area per member can in some cases be a feasible alternative.
In terms of institutional choice individuals consider potential costs more than potential benefits, e.g. immediate costs such as membership fees carry greater weight for future benefits. Forms of organizations with low costs for membership and/or fees based on provided services are therefore preferable. Immediate benefits of membership should also be clear.
Since new tasks or fields of activity often become necessary, it is important that the organizational form should be flexible to accommodate such changes. It is generally harder to create new organizational structures than to modify existing bodies.
External factors form the enabling environment for the formation and functioning of organizations. While socio-economic factors are relatively unchangeable, economic and especially political – administrative factors can sometimes be modified to form an enabling environment.
Political – administrative system factors
A precondition for the introduction or further development of forest owners’ organizations is the completion of any restitution process and clear normalization of private ownership rights on forests either through forest acts or other legal regulations. Also important is enabling legislation on the rights to organize and the rights of organizations. The definition of the general types of owners’ organizations possible together with an open list of tasks to be fulfilled can help to clarify the framework for institutional choice.
In addition to the formulation of the policies and legislative foundations, the active involvement of the state and especially of existing forest services is particularly important for the successful development of forest owners’. Examples from Northern and Central Europe show the importance of state support programs in the development of forest owner organizations especially in the initial phases after formation. These support programmes usually work on 3 levels:
i) Information support
This refers to the use of the administration's network to inform of the existence of organizations, their options, advantages and disadvantages. Also to education and training courses to improve the skills of prospective organization members and especially its key persons.
ii) Financial support.
Various models for financial support exist in European countries. Incentives are widely used as a tool to promote the formation and membership of owner organizations:
a) Indirect incentives: The approaches include tax reductions for the economic activities of the organizations or specific organizations and property tax reductions for members.
b) Direct incentives: Direct incentives are sometimes also provided in the form of cost sharing or total cost coverage for certain activities. These include establishment costs, cost sharing for staff or equipment or for infrastructure such as road construction. In some cases financial support is also offered for certain management activities.
iii) Organizational support
Besides education and training, in some cases the state forest service also offers technical support for newly established organizations. Administrative and technical functions may be taken up for a limited time for no or only marginal costs. In such cases, the final decision making for all issues always rests with the organization’s representatives.
State support to promote the creation and membership of owner organizations seems to be one of the most effective measures in the early stages, particularly where the benefits of co-operation are not clear.
Economic system factors
i) Wood market and timber industry
Wood demand, timber supply and processing are interdependent for small forest owner organizations. Supply of timber from small private owners through the marketing bodies of the owner organizations enables forest industry enterprises to purchase wood from small properties. In turn, wood demand from industry increases the pressure to form marketing bodies for small-scale private owners who individually have only small amounts of wood for sale. Globalization processes in the wood industry lead to pressure to form even larger wood marketing units.
ii) International cooperation
Existing forest owner organizations from Western and Northern Europe have already begun to support programmes for evolving co-operative structures in Eastern Europe. The experience of the supporting institutions can be very helpful in avoiding mistakes, particularly in the establishment of organizations. International co-operation also provides financial grants in some cases, since financial support for private forestry is very limited in Central/Eastern Europe.
Informal organizations (management by contract, informal arrangements) do not lead to the development of organizational bodies. The choice of informal organizational arrangements depends on the local situation and individual relations of two or a small number of persons, very often neighbors. Such informal arrangements are already common throughout Europe.
Where areas owned by individuals are very small (or would be small after restitution) it can be most appropriate to consider formation of community forests. Forest management of individual small units is complex and inefficient, and the options of community forest through creation of owner shares of a larger forest area can avoid such problems from the beginning.
From the organizational principles given above, institutions based on political representation are separate from those based on local/regional economic and information providing bodies.
National/State organizations
In several countries in transition to market economies, National Forest Owner Associations have been formed, mainly to represent proprietors interests during the restitution process. Membership of such organizations is voluntary. These organizations generally have few members and have no or only weak links to local or regional organizations. Such interest representation institutions on voluntary basis only work, as experiences from central and northern Europe in the agricultural and forest sector show, if they evolve in a bottom up process from local (economic) and regional organizations.
If political decision makers agree on the need for an interest representing organization, the Chamber system with obligatory membership is the most appropriate form. Through such a structure with sub units at provincial and regional level, the organization can also be helpful for the subsequent creation of voluntary local economically oriented institutions. Additional activities, especially in the area of grants and subsidies, can increase the attractiveness of that type of organization (despite obligatory membership).
Local/regional organizations
The forest owners’ association and related forms are the most widely adopted types of organization in Central Europe. These forms of organizations fulfil important organizational principles for co-operative bodies of private forest owners:
The possible subtypes can provide a progression in level of management: the interest associations, as the simplest forms, concentrate on locally diversified activities; the management association, as a more complex form, deals with joint forest management and even corporate forestry often with a change from individual property ownership to area share holders.
‘Associations’ are generally appropriate as a form of organization if 4:
Forms of higher level of co-operation than ‘interest associations’ are more suitable to the problems that users face when:
Economic co-operatives of private woodlot owners in general do not aim at the merger of the areas of ownership of members but at the joint use of technical equipment, and the implementation of specific management and marketing activities.
Co-operatives and corporations are very similar to forest associations though the procedures for establishment are more restricted. Minimum membership fees have to be charged for co-operatives. Co-operatives also often concentrate on specific tasks (marketing, support) rather than offering a wide range of services. The term 'co-operative' may also be misleading and be seen by new forest owners as collectivism.
The creation of corporations is even more regulated and can be created as a public body with obligatory membership. Such obligatory forms should only be used in exceptional cases, for example in critical regions where attention has to be given to forest protection and social benefits.
One characteristic of the new private forest owners of Eastern Europe is that the majority is non-farmers, and very often absentee landowners. For areas where this form of ownership is dominant, higher levels of co-operation are often appropriate, such as management associations with full management service packages.
One solution for sound forest management for non-farmers (absentee owners) could follow the example of "Agrarian communities" in Austria (Vorarlberg). The community forest there with common ownership of forest land evolved from the high percentage of non-farmers forest owners.
Community forests can be a realistic objective in the long run but are only generally achievable through a series of steps:
Organizational models from market economies also show some elements of models used in planned economies such as machine circles, wood marketing co-operatives or corporations or community forests. The main difference though, is that in market economies such forms are created voluntarily.
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3. Ostrom, E. (1990): Governing the Commons. The Evolution of Institutions for Collective Action. Cambridge University Press. New York. 4. Netting, R. McC. (1976): What Alpine Peasants have in Common: Observations on Communal Tenure in a Swiss Village. Human Ecology 4: 135-46 |
