European limber: 2000 and beyond

K. Prins

What lies ahead for European forest resources, forest industries and forest products trade to the year 2000 and beyond? That is the question this report attempts to answer, based on a major new study on European timber trends and prospects just published by the FAO European Forestry Commission and the Timber Committee of the UN Economic Commission for Europe (ECE).

Kit Prins is Economic Affairs Officer with the Joint ECE/FAO Agriculture and Timber Division (JEUR), Geneva, Switzerland, which directed preparation and coordination of the study on European timber trends and prospects

· With the growth of world trade and foreign ownership of industries, forests and their products are becoming increasingly affected by international developments. This means that forest decisions at the company, regional and national levels must take into account the international perspective, without which the consequences and costs of actions cannot be reasonably estimated.

With this need in mind, a study, European Timber Trends and Prospects to the Year 2000 and Beyond (ETTS IV), has just been published under the auspices of the FAO European Forestry Commission and the Timber Committee of the UN Economic Commission for Europe. The two-volume report contains a wealth of information, including projections by country of the future demand for forest products and forecasts by country of the area, growing stock, increment and removals of European forests. A detailed explanation of the projection methods employed enables users to judge the forecasts for themselves and even, in some cases, to modify certain elements to suit their particular needs.

The economic and social context The study begins with a discussion of economic and social developments that will influence the future of forests and their products. These developments are in turn predicated ups on the following basic assumptions:

· Population will continue to grow slowly for Europe as a whole, at an average rate of 0.5 percent a year. In most areas, population will stagnate or even decline after 2000, while that of southern Europe will continue to grow at over 1.0 percent a year. Turkey will have by far the largest population of any country in Europe by 2000.

· Economic growth will fall between the rapid expansion of the 1960s and early 1970s and the stagnation and slow growth of the late 1970s/early 1980s, with an increase of between 2.6 and 3.3 percent a year.

· Construction activity (the main determinant of the consumption of sawnwood and panels) has been slow in recent years. The study sets out two scenarios:

a) stability at the level of 1979-81 and

b) growth at half the rate of gross domestic product (GDP), although a number of conflicting factors make prediction highly uncertain.

· Agricultural productivity will continue to increase. Since most European countries are broadly self-sufficient in food, this will either lead to production of the same amount of food on less land or to the production of costly agricultural surpluses. In both cases there would be pressure to convert agricultural land to other uses, including forestry.

The outlook for the forest resource The current state of the European forest is summarized in Table 1. The Nordic countries account for about 30 percent of the European forest but have a far higher ratio of forests to people (3.4 ha/head as compared to a European average of 0.4 ha/head) and of forests to land area (53 percent of land is covered by forest in the Nordic countries, compared with 23 percent in the EEC [excluding Greece, Portugal and Spain] and a European average of 35 percent).

The European forest is expected to expand in area, growing stock, increment and removals, at least until the year 2020.

In preparing the forecasts, national circumstances and policies were taken into account, as were such factors affecting the level of removals in individual countries as competition between different forest uses (wood production, recreation, etc.); ownership structures, which may hinder the maximum mobilization of wood (such as a preponderance of small-scale owners for whom wood production may not have a high priority); fiscal conditions affecting forest management; and the difficulties most countries face in finding a market for small-sized wood from thinnings, a problem that can impede silvicultural activities.

The forecasts, made by national correspondents, predict an increase in removals between 1980 and 2000 of between 11 and 25 percent. The net increment (gross increment less natural mortality) is also expected to increase substantially during the same period. Even the growing stock is expected to increase until the year 2000, by 12 percent in the low removals scenario and 10 percent in the high.

The following trends are of particular interest:

· the westernmost countries of Europe, especially Ireland, the United Kingdom, France, Portugal and Spain foresee a far-above-average increase in their forest resources, as large new plantations, mostly of coniferous species, will mature;

· in a number of central European countries (e.g. Czechoslovakia and the Federal Republic of Germany), however, the forecasts are for stagnation or even decline;

· hardwood removals that had been decreasing since the 1950s have turned upwards again during recent years, in part as a result of the use of wood for fuel.

Damage to forests Considerable concern has been expressed about the widespread damage to forests, including that attributable to fire or to air pollution. Every year there are more than 30 000 forest fires in Europe, typically affecting a total area of about 500 000 ha. Information available in 1985 indicated that nearly 7 million ha showed visible tree damage attributable to air pollution. The great majority was "light damage", indicating that the forest was at risk, but 0.2 million ha were classified as dying or dead.

Table 1. The current status of European forests

Region	Forest and other wooded land	Forest and other wooded land	Forest as % of land area	Exploitable closed forest			Total removals1
				Area	Growing stock	Net annual increment
	(million ha)	(ha/head)		(million ha)	(million m3 overbark)		(million m3 underbark)
Nordic countries	59.9	3.4	53.3	48.3	4407	146	103
EEC2	34.5	0.1	22.9	27.8	3 565	128	82
Central Europe	4.9	0.4	40.2	4.0	1 109	25	19
Southern Europe3	66.6	0.5	37.0	27.1	2 582	93	60
Eastern Europe	28.0	0.3	28.9	25.8	4278	113	78
Europe	193.9	0.4	35.1	133.0	15 941	505	342

¹Recorded removals from 811 sources (not only exploitable closed forest).

²Excluding Greece. Portugal and Spain.

Table 2. Self-sufficiency in forest products in Europe, 1979-81¹

	Sawnwood	Wood-bassed panels	Wood pulp	Paper and paperboard
Nordic countries	212	161	141	405
EEC2	51	76	39	75
Central Europe	164	154	90	130
Southern Europe	97	114	100	92
Eastern Europe	101	98	80	93
Europe	91	94	88	103

¹Production as % of apparent consumption

²Excluding Greece, Portugal and Spain

Clearly, any unexpected change in the degree of damage would affect forecasts for the forest resource. The damage attributed to air pollution has caused most concern, but at present there is neither the statistical basis nor any other experience that could be used to prepare forecasts. As a result, a number of non-quantified scenarios are proposed concerning the interaction of forest damage, fellings, increment, growing stock and management decisions. Up to the mid-1980s, it was possible to compensate for any sanitation fellings by reductions in planned fellings, but if forest damage, and thus sanitation fellings, were to increase significantly, there could be a surplus of roundwood in the affected areas, with consequences for prices, trade patterns and industry structure.

Non-wood goods and services The forest provides many non-wood goods and services. There are, unfortunately, great methodological problems in quantifying some of them, rendering discussion of the outlook rather speculative. Nevertheless, it is clear that although wood is generally the most important benefit of the forest (according to the 1985 forest resource survey, more than 70 percent of European forests are managed primarily for wood production), for some forests non-timber benefits are of equal or greater importance. This applies particularly to protection and recreation functions (including hunting). Furthermore, there is every indication that because of certain socioeconomic developments (higher disposable income, more leisure time, etc.), the demand for some of these benefits may grow faster than the demand for wood. If so, foresters will face more complex problems of management and will have to work closely with other agencies to provide these goods and services.

The demand for forest products The fastest growth in consumption of forest products has been for woodbased panels, notably particle board (+ 8.7 percent a year between 1950 and 1980), followed by paper and paperboard (+5.3 percent) and sawnwood (+ 1.7 percent). For all products, the 1970s saw violent cyclical fluctuations and a slowdown in the periodic growth rates.

Recent trends in the consumption of various forest products reveal big differences in per caput consumption in different regions. Southern Europe shows the lowest or nearly lowest consumption figures for sawnwood, wood-based panels and paper. The highest per caput consumption figures in the Nordic countries are generally five to seven times higher than the lowest. The growth rate in per caput consumption for southern Europe is greater than in any other region, even though the region has the fastest growing population in Europe.

The European forest is expected to expand in area, growing stock, increment and removals, at least until the year 2020.

CABLE LOGGING IN A EUROPEAN FOREST more crop land may return to forest / FAO

For fuelwood consumption, the downward trend since the 1950s was reversed in the late 1970s. All statistics on fuelwood consumption are very uncertain, however, and it is likely that the real consumption is higher than recorded statistics show.

The study examines the distribution of the consumption of sawnwood and wood-based panels by end-use sectors. The main finding is that the use of wood per unit produced in the most important sector, construction, varies very widely from country to country. This situation carries both possibilities and threats. The market is sensitive to such factors as costs, convenience in use, durability, availability and, not least, variations in fashion. The state of knowledge about the situation in the different end-use sectors (notably the volume consumed and the factors affecting competition between products) is poor and needs to be improved. In several cases, there appear to be substantial possibilities for raising levels of consumption of sawnwood and panels.

The study also reviews the end uses for the different grades of paper and paperboard, and the main factors that will affect the outlook. An area of uncertainty concerns the effect of developments in 'electronic communications technology on the consumption of printing and writing papers. The consensus of experts is that paper consumption will not be significantly affected before the mid-1990s, although thereafter the outlook is more uncertain.

The main changes in raw material consumption between 1969-71 and 1979 81 for Europe as a whole were that consumption of logs grew more slowly (+10.6 percent) than that of pulpwood (+20.7 percent); that among pulpwood assortments, consumption of coniferous round pulpwood stagnated (falling in Nordic countries) while that of non-coniferous round pulpwood, and especially of residues and chips, grew strongly. The consumption of all papermaking fibres grew significantly over the decade (+30.4 percent); growth was much faster for waste paper (+58.7 percent) than for pulp (+20.3 percent).

Consumption projections Demand models play a central role in the study. Projections are based on the assumption that the model correctly mirrors historical correlations between the consumption of forest products and the explanatory variables; that the scenarios used for the development of the explanatory variables are reasonable; and that the correlations between consumption and the explanatory variables will remain unchanged in the future. The projections in the study also assume constant relative prices, in accordance with past trends but without strong upward or downward fluctuations.

On the basis of the models, data on fuelwood supplied by individual countries and estimates for the less important products, two demand scenarios were prepared by country for 1990 and 2000. These are shown in the Figure. The forecast rates of growth are mostly lower than in earlier studies, except for fuelwood, which is predicted to increase. Earlier studies expected a continued fall.

The supply of wood residues and waste paper is expected to continue to grow faster than that of other raw materials, so they will account for an increasing share of raw material consumption. These materials are usually cheaper than their direct competitors, and technical advances have widened the range of potential uses. This trend underlines the fact that forest industries are increasingly users of "low- and non-waste technology".

The study also examines the outlook for demand in the first quarter of the twenty-first century. Naturally, the uncertainty of any quantitative estimates for a period 40 years in the future is stressed, as well as the possibility of major changes in trends. "Base" scenarios are proposed that assume continuation of the per caput consumption levels of 2000, while "extreme" scenarios assume on the one hand a continued rise after 2000 to new record levels by 2025 and, on the other, a drop to the levels of the 1980s or below.

Europe: ETTS IV demand scenarios

The principal factors expected to affect consumption of forest products, before and after 2000, are population growth, macroeconomic growth and the level of residential building. Also important are such factors as the technical and economic competitivity of sawnwood and panels in the building sector; developments in electronic data processing and transmission, and their acceptance by society; the competitivity of paper and paperboard in the wrapping and packaging sector; the energy situation, especially the relative price and availability of different fuels; and changes in consumer habits. While many of these cannot be influenced by the forest and forest products sector, it should be stressed that the sector does have a strong influence over the technical and economic competitivity of its products.

European forest industries The study reviews the role of forest industries in European society, their structure, capacity and raw material consumption, and draws attention to the importance of their economic health. If this health can be maintained and improved, then these industries will be able to play a part in putting the European forests to the best possible use; if it is unsatisfactory, the physical potential of European forests will probably not be realized. A preliminary analysis indicates that these industries have not lost ground relative to other sectors. Labour productivity has improved steadily as forest industries have to some extent replaced labour input with capital input (see Table 3). The study also indicates that there are wide differences between countries and products in self-sufficiency and production capacity (see Table 4).

Scope of e study Geographical: Europe, excluding the USSR (the potential of other regions for exports is also covered) Products: wood in the rough, sawnwood, wood-based panels, wood-pulp, paper and paperboard, and energy wood Sectors: forestry, forest industries, international trade, consumption and prices of forest products Time period: historical data from 1913 to the early 1980s; detailed quantitative forecasts to 2000; (thereafter, detailed forecasts for forestry to 2020 with rough estimates for consumption of forest products)

Table 3. Value added and employment in forest industry¹ in western Europe and North America

	Western Europe2		North America
	1970	1980	1970	1980
Value added
Billion US$ 1970	17.1	17.7	23.4	31.4
Percent of all manufacturing	6.7	6.3	7.3	7.5
Employment3
Million people	3.1	3.0	1.7	1.9
Percent of all manufacturing	7.4	7.3	8.8	9.0

¹International Standard Industrial Classification of all Economic Activities (ISIC) 331 + 332 + 341.

²Except Luxembourg and Switzerland, for which no data were available.

³Includes data for Czechoslovakia, Hungary and Poland.

Table 4. Europe's place in world trade in forest products, 1980

	From
To	Total world	World division
		Europe	USSR	Canada 1(million m3 EQ)	USA	Other
World	474	167	36	119	63	90
Division
Europe	225	141	24	21	18	20
USA	84	1	-	79	-	4
Japan	71	1	7	9	24	30
Other	94	24	5	10	21	36

¹Million cubic meters equivalent wood in the rough.

In several cases, there appear to be substantial possibilities for raising levels of consumption of sawnwood and panels.

A PAPER IN ITALY paper consumption grew at more than 5 percent per year / F. PIERBATTISTA

Trade and supply from other regions After reviewing the place of Europe in world trade (see Table 5) and of trends in trade in the 1970s, the study examines the potential supplies from Europe's major traditional and potential new suppliers of forest products.

The USSR has the largest forest resource in the world, with millions of ha as yet untouched. However, removals have fallen since the mid-1970s as forest activities have moved east and north into Siberia, with resulting increased costs and other constraints such as climate, terrain, and limited labour resources. Furthermore, the forest sector has to compete with other sectors for limited investment resources. There is also a great potential for increased domestic consumption, especially for panels and paper. Thus, despite the large difference between allowable cut and removals, and the effort to use available resources more intensively, there is little prospect of any significant increase in exports from the Soviet Union in the foreseeable future unless unforeseen events necessitate a significant change in policy priorities.

Canada also has a very large, mostly coniferous, forest resource, but removals have almost reached the allowable annual cut. The coniferous resources in some areas of the country - in particular, old-growth timber - are already used intensively and probably could not sustain present harvest levels indefinitely. Measures proposed to raise production in the long term include improved protection against insects and fire; improved regeneration; more use of hardwoods that are at present considered economically inaccessible; increased use of lower-quality raw material; and improved raw material yields. Potential undoubtedly exists for expanding exports further, although there are many associated problems. A major public debate continues in Canada on the future of forestry, which makes the outlook difficult to foretell. However, it is clear that without the expansion of the raw material base, it would hardly be possible for Canada's exports of forest products to rise much beyond present levels, at least in the longer term and on a sustained basis.

Although international trade is relatively; less important for the United States, the size of the country's domestic market, the world's largest by far, means that developments there will affect world trade patterns. An official study, published in 1982, foresaw an increased demand for forest products, a higher domestic supply and higher net imports (despite increased exports). Doubts have since been raised about the forecast levels of demand and the resource potential, particularly in the southern states. At the same time, there has been an increase in the attention paid by government and industry to promoting exports. Studies are being carried out on many of these questions, but the outlook at present, both for United States imports and exports, must be considered uncertain, especially since it is strongly affected by the level of the currently vulnerable US dollar.

Country grouping Nordic countries: Finland, Iceland, Norway and Sweden EEC (9) Belgium, Denmark, France, Federal Republic of Germany, Ireland, Italy, Luxembourg, the Netherlands and United Kingdom Central Europe: Austria and Switzerland Southern Europe: Cyprus, Greece, Israel, Malta, Portugal, Spain, Turkey and Yugoslavia Eastern Europe: Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland and Romania. In order to facilitate comparison with E TTS III the EEC (9) used in the previous study has been retained, instead of the EEC (12) - the EEC (9) plus Greece, Portugal and Spain - which came into existence only on 1 January 1986. However, the data for the EEC (12) have been calculated and are reproduced in the annexes. Country data are also presented so that analysts may construct their own country groupings as they wish.

The natural tropical forest About 12 million m³ EQ (equivalent wood in the rough) of European imports (2.5 percent of the total supply) originate in the natural tropical hardwood forest which covered about 1 160 million ha in 1980 (closed forest only). Eight hundred and sixty million ha of this forest are productive, of which 38 million ha are managed, 154 million ha logged over and 668 million ha undisturbed. The proportion of logged-over forest is higher in many of the traditional tropical-hardwood exporting countries, including some countries that no longer export because of depletion of the resource. Deforestation of closed broad-leaved forest is estimated at 6.9 million ha (0.6 percent) per year. In the late 1970s, there were 11.5 million ha of tropical plantations, of which 7.1 million ha were industrial plantations; since then, more have been established. According to FAO/UNEP, recent trends in deforestation and the establishment of plantations are expected to continue in the near to medium-term future. In the medium to long term, if present trends continue, the total area of undisturbed, productive closed forests will drop to 540 million ha in 2000. However, the area of plantations is expected to increase more quickly than in the recent past with the implementation of programmes for reforestation and sustained management. The result of these developments would be the partial replacement of the natural tropical resource by plantation silviculture, with a smaller area but much greater productivity and producing, in most cases, a totally different type of wood. The supply potential of the natural tropical hardwood forest, however, exists well beyond the year 2000, although with the risk of further depletion of the resource. The determining factor seems to be the forest policies adopted by the producer countries. A shift to greater restriction on cutting and export than in the past could lead to severe imbalances between supply and demand for tropical hardwoods in the European region. (See article on p. 61 on the International Tropical Timber Organization - Ed.).

There are also new potential sources of supply. The source with the largest potential, as well as the greatest uncertainty, is the tropical and subtropical plantations, usually of fast-growing species, some oriented to export markets (e.g. softwood in the rough, pulp and sawnwood). Very high rates of increment may be achieved, but there are significant silvicultural, social and economic problems, although some recent success stories indicate that these can be overcome. If there is a strong demand for forest products on international markets, the likelihood that these problems can be solved will increase.

Two countries, Chile and New Zealand, have developed forest resources based largely on Monterey pine (Pinus radiata) and have set ambitious but apparently realistic goals for increasing exports of logs, sawnwood and pulp to world markets. Chile expects removals of 2540 million m³ in the year 2000 and New Zealand about 20 million m³.

The Japanese authorities expect a small income in imports by the mid-1990s, although the increase could be higher than forecast, as previous targets for increased domestic supply have not been met.

The study's assessment does not support the opinion that a worldwide shortage of forest products is imminent, since traditional and new exporters seem to have the potential to satisfy even a high import demand. However, a worldwide tension between supply and demand could arise if a strong call for imports were to materialize from developing countries.

In short, the world forest-products markets seem to have the potential of being quite flexible in the medium to long term and of adapting even to significantly changed situations. Whether this flexibility is realized in the future depends on many economic and institutional factors, including the speed with which signals of impending change are understood and acted upon.

Wood and energy Two chapters of the study are devoted to the outlook for wood and energy because of the fundamental changes in the sector that have taken place since the mid-1970s. Around 1978, under the influence of rising energy prices and increased interest in renewable sources of energy, fuelwood consumption, which had been declining since the 1950s, reversed its trend and started to rise again. However, recorded removals of fuelwood are only a part of the picture. For example, around 1980 the following volumes of wood were used for energy in Europe:

Fuelwood	72 million m3
Wood and bark residues of forest industries	40 million m3
Forest products after their original use	11 million m3
Estimated wood equivalent of pulping liquors burnt in chemical pulping	44 million m3
Total	167 million m3

A SPRUCE FOREST IN BAVARIA, FEDERAL REPUBLIC OF GERMANY air pollution remains a concern In many areas / R. PARDO

These figures imply that in Europe over 40 percent of the volume of wood and bark removed is used as a source of energy and that the provision of energy remains in terms of volume the single most important use of wood. Wood is mostly burnt in households (about 60 percent of the total) and in forest industries (under 30 percent), and accounts for about 2 percent of European energy consumption, but for a significantly higher share in a few countries (Turkey, Finland, Yugoslavia, Sweden and Portugal).

Future levels of consumption of wood for energy will be determined by a wide range of factors, including the overall supply/demand balance for energy, the organization of energy wood markets, the development of simple and reliable wood-burning equipment, harvesting costs and the results of research undertaken on new forms of wood-derived fuels (e.g. synthetic liquid or gaseous fuels) and on energy plantations. The general estimate is that the consumption of wood for energy will increase by 2-2.5 percent a year, almost exclusively in conventional uses (households, forest industries and medium-size consumers such as district heating units). Little increase is expected in the new forms of wood-derived fuels. The demand for energy wood is not expected to have significant adverse effects on the availability of wood raw material for forest industries, although there may be some price changes in low-quality pulpwood.

Consistency analysis In the study, a model has been designed to check the consistency of the forecasts at the level of individual countries. The basic principle of the model is that from forecasts for consumption, "derived removals" are calculated. These are the removals necessary to satisfy the forecast consumption after consideration of trade, yields, residue transfer and recycling of waste paper. The derived removals are then compared with national, independently prepared forecasts for removals. This approach is intended as a tool to analyse the interrelationship of the forecasts obtained elsewhere in the study.

The difference between derived and forecast removals for Europe as a whole is quite small for 1990 (a difference of about 6 million m³). It appears, therefore, that for the period around 1990, supply and demand may be roughly in balance without increased imports from other regions. However, if extra-European suppliers were able to increase their exports to Europe by successful marketing or competitive prices, there might even be some oversupply. In any case, fairly competitive market conditions could be expected.

For the period around 2000, a rather different situation can be deduced from the consistency analysis. Demand is expected to be between 39 and 60 million m³ higher than supply (forecast removals). However, this should not be interpreted as a forecast of a "shortage" of wood on international markets because a number of countries in eastern and southern Europe are unlikely to increase their imports significantly, notably because of currency restraints. Adjustments in these countries, which account for 9-16 million m³ of the negative difference, will probably not affect the international supply/demand balance. It will also probably be possible to improve raw material yields, particularly through an increasing share of "high-yield" pulps in the paper furnish. This might reduce the gap between supply and demand by about 10 million m³, assuming an average 5 percent improvement of yields.

Methodology 1. Demand for forest products Two econometric models were used, both employing time series cross-sectional analysis. Independent variables were: an activity indicator, relative prices of forest products and a time, variable, one model, the activity indicator is GDP, in the other (used only for sawnwood and panels) a composite index of activity in the main user sectors. 2. Forecasts for the forest resource Forecasts for the forest area, growing stock, increment, fellings and removals for the different types of forest land for 1990, 2000, 2010 and 2020 were provided by national correspondents who took into account the characteristics of national markets and forest policies. All forecasts were checked for internal consistency. 3. Consistency analysis In the final section, the demand projections for each country are compared with the removals forecasts, taking into account trade, raw material yields and recycling. Conclusions are drawn at the national and regional levels from this comparison.

There is little prospect of any significant increase in exports from the USSR in the foreseeable future.

These factors together could reduce the gap at the European level by 20-25 million m³. It does not appear realistic to propose a higher rate of residue transfer or wastepaper recycling, as the high assumptions for these seem to represent a maximum. The remaining gap, of 20-35 million m³, could be adjusted by one or more of the following: higher imports from outside Europe, lower consumption of forest products (including fuelwood) or higher European removals.

If the scenarios for consumption of forest products and for European removals presented earlier in the study are accepted, Europe's imports from other regions may be expected to increase by 20-35 million m³ over the 1979-81 level, or Europe's exports to other regions to decline by a similar figure, or a combination of these two developments. This would seem to indicate that potential exporters to Europe will be able to expand their exports by 20-25 million m³. The analysis above suggests that the raw material basis for such an increase in exports to Europe exists.

These conclusions are rather different from those in earlier timber-trends studies, which stressed the need to develop the European forest resource to avoid possible future supply problems. This change in the outlook is at least partly a result of the fact that decision-makers in the field of forestry have accepted the results of these earlier studies and have intensified forest management and the creation of new forests.

Conclusions

The study concludes by noting a number of areas where improved data and fuller analysis are needed and by identifying some major policy questions that arise out of the findings. For example, forecasts would be significantly more reliable if there were more information on the behaviour and objectives of small-scale forest owners; the situation and trends in forest damage; the structure and capacity of the sawmilling and wood-based industries; the factors affecting end-uses for sawnwood and panels; and the economic health of forest industries as a whole. It is also important to know more about trends in these sectors, such as construction and the new electronic media, which have a major impact on the demand for many forest products. Finally, it is essential to have more data on the outlook for the supplying and importing regions outside Europe, as well as global energy trends and their consequences for wood-derived energy. It will also be necessary to monitor trends on a continuing basis and to compare them with the outlook forecast by the ETTS IV study.

While the study emphasizes the uncertainty of projections for the twenty-first century and the unavoidable necessity of taking forestry decisions on the basis of incomplete information, it clearly identifies several major areas where policy decisions are essential. Forest management must respond to the increasing demands for non-wood goods and services from forests; the predicted changes in the supply/demand balance; the problems connected with the fragmentation of ownership and management of the forest and some forest industries (notably sawmilling); and changes in the agricultural sector. The sector must also decide whether there is a need to revitalize forest industries; improve the competitivity of forest products and diversify their outlets; revise wood energy policies; and improve the organization of the "wood chain" from tree to final product. Thoughtful, informed decisions in these areas will, to a large extent, determine the future of Europe's forest resources and of the forest and forest products sector as a whole.

To order the study, please write to ECE/FAO Joint Agriculture and Timber Division, Palais des Nations, CH-1211 Geneva 10 (Switzerland). The study is in two volumes and costs US$120 (UN Sales Number E.86.11.E.19).