Europe's timber problem

Commodity reports

It is now twelve months since FAO published a special, issue of UNASYLVA devoted to the Marianske Lazne Timber Conference of 1947 and to European forestry and timber problems.

The following article sums up in general form the developments in the timber situation since that time. It was prepared by the Research and Planning Division of the United Nations Economic Commission for Europe, in co-operation with the staff of FAO's European Forestry Working Group.

AMONG the factors delaying economic reconstruction in postwar Europe, the timber shortage is still one of the most important. Inadequate supply of timber is limiting the execution of building programs to meet the huge deficit in housing caused by war devastation and by the discontinuing of new construction during the war. Besides the human and social problems directly involved, this also means that industrial productivity is kept down. In many cases industrial investments are dependent on the possibilities of furnishing adequate workers' dwellings. Apart from construction, which is by far the most important use of timber, an adequate supply of pitprops and railway sleepers is essential to the development of coal production and to the reconstruction of the transport system. In both cases the dependence is mutual: just as coal production and railway transport depend on the supply of timber, the timber output is adversely affected by the shortage of coal and coke, which means that manpower has to be diverted to the cutting of fuelwood, while in some important cases timber production is being held up because of a shortage of transport facilities.

Unlike the shortages of some other important commodities such as coal and steel, the European timber shortage is likely to make itself felt over a rather long range of years to come.

An attempt is made in this article to give a survey of the more important facts and tendencies determining the present and future timber situation in Europe, and of the activities undertaken by FAO and the Economic Commission for Europe towards solving some of the short- and long-term timber problems through international co-operation.

Shifts in the production and trade pattern

In Table 1 a broad comparison is made between Europe's prewar and postwar production and trade in timber.

In prewar years net imports of softwood lumber to Europe (including the U.S.S.R.) amounted to only a few percent of total consumption. Since, at the same time, there was a net export of pulp from Europe representing a somewhat greater amount of roundwood, it could be said that Europe's wood requirements were more than met by its own resources.

The main feature of the postwar situation is that the output of timber in Europe (outside the U.S.S.R.) has fallen appreciably while net imports from the U.S.S.R. and non-European sources taken together have been reduced to about 30 percent of the prewar amounts. The decrease in home production is apparent chiefly in the exporting countries, while some of the countries dependent on imports show a marked increase.

The decline in total availabilities for Europe as a whole, at a time when demand for timber is steeply rising, has, moreover, been accompanied by a complete change in the trade pattern. Above all, exports from the U.S.S.R. (which before the war accounted for almost one-third of the total exports of European countries have virtually stopped, and exports from other eastern European countries have been greatly reduced. Also, the northern timber-exporting countries, which were not - or only to a lesser degree - devastated by the war, have reserved a larger share of a smaller output for home consumption.

The result of this steep decline in exports has been a very uneven distribution of available supplies of timber between the exporting and importing countries. The last column in Table 1 shows that the reduction in total timber availabilities against prewar supplies was about 30 percent for Europe (outside the U.S.S.R.). The importing countries, however, in some cases got only 60 percent of their prewar supply, while timber consumption in some exporting countries was well above the prewar level. This does not mean, however, that even in these latter countries, the postwar supply of timber has been adequate to meet essential needs. Among the exporting countries are some which, before the war, had an abnormally low consumption of timber and which now have abnormally high requirements owing to war devastation.

These few facts should suffice to show that Europe's timber shortage is of such dimensions that the problem must be attacked simultaneously from all sides. On the supply side there is the problem of stimulating output in the forests, of ensuring that full use is made of the roundwood which could go into timber production, and finally the problem of filling a part of the gap by increased supplies from overseas. On the demand side there is, first of all, the problem of economies in the conversion and use of timber, and, secondly, of furthering a more fair and economical distribution of the available supplies among the European countries.

The possibilities of increased supplies

Europe's Forest Resources

For many years before the war the yield from European forests appeared to be declining. This was particularly true of Poland, Czechoslovakia, Yugoslavia, Rumania, and the Baltic republics.

The war greatly accelerated this deterioration, partly by the direct devastation of forests, sawmills, and factories for wood conversion, and - much more important - through heavy overcutting. The most serious damage of this nature seems to have occurred in Poland, under the German occupation. In Germany itself annual cuts are estimated to have been about 150 percent of annual growth since 1935. Among the important surplus areas, only the northern countries managed to get through the war without serious damage to their forest capital.¹

¹ For more detailed information, see Forestry and Forest Products, World Situation 1937-46, and "Forest Resources of the World," UNASYLVA, Vol. II, No. 4.

In view of this drain on Europe's forest resources, it is out of the question to fill completely the present shortfall in Europe's timber supply by increased fellings in areas already under exploitation. On the contrary, timber output will have to be reduced in the near future if further serious damage to the standing resources is to be avoided. In view of the present extreme timber shortage, some overcutting may still be deemed permissible, and international agreements about such extra production have been made. It is, however, clear that emergency measures should be strictly limited in time and should be made good by reduced felling at a later stage, by planting, and by the introduction of more efficient silvicultural practices in existing forests.

The only way, then, to meet Europe's needs from nearby sources might appear to be the opening up of still unexploited forests. But the forests of most European countries are already under some system of forest management, and the European forests of the U.S.S.R. are being worked to capacity and maybe beyond to meet the huge postwar reconstruction program in the Soviet Union. The vast areas of untouched forest in the U.S.S.R. lie mostly in Asia and their development would be a major operation involving shifts in population and heavy capital investment, including large-scale construction of new ports, roads, and railways. Increased amounts of timber from these sources could scarcely be expected to reach the market under three to five years from the beginning of such an undertaking.. However, it does seem quite clear that the attainment of a balanced timber economy for Europe as a whole depends upon the Soviet Union reentering the western timber market on the prewar scale.

Obstacles to Production

Manpower. So far the prospective European output of timber has been discussed from the standpoint of the limits set by available forest resources, and by the necessity of avoiding further deterioration of these resources. There have been other serious obstacles to maximum production of timber since the war.

The main difficulties have been in the fields of manpower, logging and transport equipment, and sawmill rehabilitation. Furthermore, the amount of wood available in the form of timber has been restricted by the fuel shortage and by the competition of the pulp industry.

TABLE 1. - OUTPUT, TRADE, AND CONSUMPTION OF SAWN SOFTWOOD*

(1,000 standards)

	1937			1947			Consumption 1947 as a percentage of 1937
	Output	Net imports or exports (-)	Available for consumption	Output	Net imports or exports (-)	Available for consumption
British Isles	79	2,446	2,525	78	1,440	1,518	60
Western Europe1	586	933	1,519	785	574	1,359	90
Germany2	1,084	731	1,815	1,132	-616	516	...
Central and Southern European countries (importing)3	381	620	1,001	533	206	739	75
Norway	358	- 51	307	275	- 50	225	75
Sweden	1,557	- 820	737	1,200	-409	791	105
Finland	1,330	-1,045	285	710	-474	236	85
Central and Southern European countries (exporting)4	2,935	-1,377	1,558	1,937	-319	1,618	105
Total Europe exuding U.S.S.R.	8,310	1,437	9,747	6,650	352	7,002	70
U.S.S.R	7,250	-1,362	5,888	56,000	5 -30	55,970	...
Total Europe	15,560	75	15,635	12,650	322	12,972	...

¹ Belgium, Luxembourg, Netherlands, France, Denmark.
² Three Western Zones only.
³ Switzerland, Hungary, Italy, Grece, Turkey.
⁴ Yugoslavia, Rumania, Bulgaria, Poland, Czechoslovakia, Austria, Portugal.
⁵ Estimate.
* Data for trade include the sawn lumber equivalent of sawlogs.

SOURCE: FAO/ECE Timber Statistics 1946-47, revised by FAO.

Especially in the northern countries, the shortage of manpower has been the most important limiting factor in timber production since the war. It is not surprising that, under conditions of a general labor shortage, the scarcity is most acute in occupations which require heavy physical labor and often a dull life in remote forests. In some countries (for instance, Austria and Finland), lack of consumer goods has also hindered the recruitment of forest workers, who require a diet of high caloric value and strong and warm clothing. In other countries, for instance Czechoslovakia, the displacement of population after the war has contributed to the shortage of manpower for lumbering. The seasonal variations in forest work also add to manpower difficulties at a time like the present, when steady employment in other trades can easily be obtained. The concentration of silvicultural work and forest-tending in the off-season between felling operations may help somewhat toward securing steady employment during the whole year for a large number of skilled forest workers.

The general shortage of manpower has, as is well known, led to important shifts in relative wages in favor of the heavier and more unpleasant occupations. There has been a general rise in wage levels for forestry relative to town occupations. It seems, however, that even considerable wage increases are not very effective in easing the manpower shortage in the less attractive industries, at least as far as the recruitment of young workers is concerned. The analogy between the manpower problem in the Scandinavian forests and in the British coal-mining industry is obvious. In Norway, for instance, there is an acute shortage of manpower in the forests, though wages in forestry have risen threefold compared with the prewar level, while industrial wages have only doubled.

Equipment. The shortage of equipment is closely bound up with that of manpower. The introduction of technical innnovations, both in felling and transport in the forests (for instance, the substitution of mechanical saws- for handsaws and the use of tractors, cableways, and suitable sledges) would ease the manpower shortage, both by raising the productivity of labor and by making lumbering a less arduous and therefore more attractive occupation.

There are also great possibilities for technical improvement in the sawmills, by which both labor and raw materials could be saved. It has, for instance, been estimated that in some countries the use of thinner saw blades could raise timber production of individual mills by as much as 10 percent. Even in more technically advanced countries such as Sweden, the introduction of new mechanical equipment (for instance, in the drying process and for transport) has made possible very considerable economies in labor. The general shortage of manpower and the rise in wages should, of course, serve as a stimulus to the adoption of new methods.

Quite apart from the need for technical improvement, there is a great need, in most producing countries, for ordinary logging and sawmill equipment, owing to wartime destruction or lack of maintenance. It may be that in the U.S.S.R. the provision of equipment would prove an important factor in the raising of production. In the Anglo-Soviet trade agreement concluded in December 1947, substantial exports of timber equipment to the U.S.S.R. were arranged; Sweden has also contracted to sell such equipment to the Soviet Union. In the Paris report of the CEEC countries their import requirements for logging (including transport) and sawmill equipment were estimated at $80 million for the years 1948-51, of which $57 million was to come from the United States. As the result of price rises in the more urgently needed goods, the purchase of timber equipment has had to be given decreasing priority, and American deliveries are unlikely to be of any great magnitude.

However, the whole problem of modernizing and mechanizing forest industries is getting increasing attention both in Europe and in America. There is a great need for international co-operation in this field, both in overcoming foreign exchange difficulties, which hinder some countries from importing modern equipment (thereby increasing their export availabilities of timber), and in spreading knowledge about experiments being made with new technical methods. The FAO/ECE European Timber Committee has as one of its foremost tasks to assist producing countries in procuring equipment whereby production and export of timber can be increased.

Transport

The need for new equipment is especially acute in the field of transport. Railway track and lorries have been destroyed or worn out, and in some countries there is a severe lack of horses and fodder. There are therefore, many instances of felled timber being left in the woods on account of the lack of transport. These difficulties have been aggravated by the fact that in some countries the overcutting under German occupation was most serious in the more accessible stands, near rivers and other good transport routes. To extend intensive exploitation to the remoter forest areas of central and southeastern Europe, which might be profitable at the present high prices of timber would require increased supplies of transport equipment, sometimes of a specialized kind.

Competition with Other Wood Products

Apart from the limitation set by the quantities it is possible to cut and transport, there is also, at the next stage of production, the problem of competitive uses for wood.

In prewar years fuelwood accounted for some 42 percent of total cut in Europe (excluding the U.S.S.R:). The shortage of coal and petrol during and after the war has necessitated an increase in the production of fuelwood, up to about 50 percent of the total cut. This has been a serious check to timber production because it absorbed manpower and transport facilities.

As mentioned below, action has been taken by ECE to divert extra amounts of coke to countries which can then reduce the cutting of fuelwood and so increase timber exports, and on the whole there is reason to expect that the production of fuelwood will gradually return to a more normal level as Europe's coal supplies increase.

The same cannot be said of pulp, the other main use of wood competing with lumber. For some decades there has been a steady rise in the production of pulp, because of increasing consumption of paper (especially for packing) and - in later years - the development of rayon and other synthetic materials derived from pulp. It has been estimated that before the war pulpwood accounted for some 15 percent of the total cut in Europe (excluding the U.S.S.R.).

Table 2 shows production, exports, and consumption of pulp and paper for the three Scandinavian countries, which before the war accounted for 60 percent of pulp production in Europe outside the Soviet Union. It is seen that the relative reduction in the output of sawn goods and of pulp compared with the prewar situation is about the same, that exports in both cases have declined more than production, so that relatively larger quantities have been available for consumption in the home market, and, finally, that exports of pulp have undergone a far greater reduction than exports of paper.

In Table 3 an attempt has been made to assess production and trade in pulp and paper for Europe as a whole. According to these figures, total production of pulp in 1947 was down to 57 percent of the corresponding amount in 1937, and total exports of pulp and paper from European countries had declined slightly more. It is further seen that as far as intra-European trade is concerned, the reduction of exports of pulp and pulp manufactures is about the same. This is because the tendency in pulp-producing countries to export paper rather than pulp is balanced by the curtailment of paper exports from countries dependent on import of pulp. As regards exports to overseas countries, on the other hand, the shift towards exporting the commodities in a more advanced stage of manufacture is very marked, pulp exports having declined to 49 percent of prewar against 64 percent for paper.

TABLE 2. - PRODUCTION, EXPORTS, AND CONSUMPTION OF LUMBER, PULP, AND PAPER

Norway, Sweden, and Finland

	1937	1947	1947 as percentage of 1937
Sawn Softwood (million standards, including box-boards)
1. Production	3.2	2.2	69
2. Exports	1.9	0.9	47
3. Apparent home consumption (1 - 2)	1.3	1.3	100
Pulp, paper and paper board (million tons)
4. Production of pulp	6.8	4.9	72
5. Exports of pulp	4.7	2.8	60
6. Exports of paper and paper board	1.6	1.4	88
7. Total exports of pulp and pulp products (5 + 6) (ton for ton)	6.3	4.2	67
8. Apparent home consumption (4 - 7)	0.5	0.7	140

SOURCE: Research and Planning Division, Economic Commission for Europe

Total consumption of paper and paperboard is estimated to have been 5.4 million tons in 1947, or about 60 percent of 1937 consumption. This figure includes estimates for German production and trade. If Germany is left out of account, it appears (see Table 4) that consumption of paper in 1947 was about 70 percent of prewar. For the same area (Europe excluding the U.S.S.R. and Germany) the consumption of sawn softwood was about 80 percent of prewar. Just as in the case of timber, the postwar level of paper consumption shows rather striking differences from country to country. While the northern producing countries in 1947 consumed much more paper than before the war, the countries dependent on import of pulp and paper have in most cases reduced consumption drastically. This applies above all to the United Kingdom, normally by far the greatest paper-consuming country in Europe.

There is no easy method for determining how far the actual allocation of wood resources between timber and pulp is rational from the standpoint of European reconstruction. It is, however, evident that there are strong incentives for both manufacturers and the authorities in producing countries to favor the allocation of wood resources to pulpmills rather than to sawmills. Though the rise in prices compared with prewar is very nearly the same for timber, pulp, and paper,² the fact that pulpmills represent comparatively more fixed capital than sawmills make it advantageous to allocate raw material to them rather than the sawmills, since some capacity must in any case lie idle under declining forest output. Still more important perhaps is the fact that both pulp and paper are in great demand in hard-currency countries.

² With the important exception of newsprint, the price of which has risen considerably more than for pulp and other products.

TABLE 3. - WOOD PULP AND PULP PRODUCTS Europe (excluding U.S.S.R.)

TABLE 4. - CONSUMPTION OF SAWN GOODS AND PULP PRODUCTS

	Sawn softwood			Paper and paper boards
	1937	1947	1947 as a percentage of 1937	1937	1947	1947 as a percentage of 1937
	(1,000 standards)			(1,000 metric tons)
United Kingdom	2,440	1,490	61	3,100	1,280	41
Continental Europe excluding Germany and U.S.S.R.)	5,400	5,100	94	4,110	3,680	90
TOTALS AND AVERAGES	7,840	6,590	84	7,210	4,960	69

SOURCE: Research and Planning Division, Economic Commission for Europe.

Although there has been in recent months a decline in the prices obtained for European pulp in America, it still seems probable that there will be a tendency toward increasing export of pulp and paper in this direction. This is being achieved, partly by curtailment of paper consumption in the producing countries themselves (Sweden is an example of this), partly perhaps also by a decrease in exports to other European countries. In so far, however, as increased pulp and paper exports to America is an alternative to increased timber distribution within Europe, it may well be questioned whether this method of increasing Europe's dollar resources is desirable, in view of the over-all shortage of timber for construction work.

Timber Imports from non-European Sources

There is little or no prospect of the gap in Europe's timber supply being filled by increased imports from the Western Hemisphere. Both in the United States and in Canada, home demand for forest products is at record levels because of construction requirements, backed by a high level of national income and a rising consumption of paper. Furthermore, it is being increasingly emphasized that the heavy and uncontrolled overcutting which has taken place in the United States over many years will make it imperative to reduce annual fellings below prewar levels. This would make the United States more dependent on the Canadian forests, from which Europe's greatest timber importer, the United Kingdom, has heretofore purchased a major part of its supplies.

Even if they were possible, however, increased imports from North America would be a heavy liability on the strained dollar resources of European countries and are not likely to be sought.

Apart from North America, the only possibility of increased imports of timber to Europe would seem to be expanded output from softwood forests in Brazil. This, however, again involves vast problems of equipment, transport, and organization and can at best be achieved over a long period of years.

Real needs and "effective demand" for timber

In June 1948 the FAO/ECE European Timber Committee estimated the effective demand for sawn softwood of importing European countries to be about three million standards. This figure represents what the importing countries, in view of their currency position, considered the maximum amount they would be able to buy in 1948 and is not very much above the prospective availabilities from the exporting countries.

This effective demand is only 57 percent of actual imports in 1937, but even this comparison understates the present timber shortage since real needs, above all for construction, which normally accounts for about 60 percent of total timber consumption, have vastly increased because of postwar reconstruction and population movements.

It is not possible to make a quantitative estimate of the potential demand represented by total " real needs. " For even if timber were abundant, other factors (notably lack of manpower in the building industry) would set strict limits to the reconstruction of Europe's housing. But some figures on postwar building programs and building needs might give an idea of the order of magnitude of the problem.

The Housing subcommittee of the ECE has made an attempt to assess the needs and programs in the field of house construction for those European countries for which detailed data were available. This investigation covers 14 countries, which represent about 45 percent of total European population. Among the countries not included in the calculations are the U.S.S.R., Germany, and other countries known to have undergone vast destruction during the war. The figures given below cannot, therefore, be regarded as representative of the situation for Europe as a whole.

For this sample of 14 countries, the prewar production of houses, the planned production for 1948, and annual production necessary to overcome the present housing shortage are set out as follows:

	Volume of construction 14 European countries (1,000 dwelling units)
Prewar, annually	600
Planned for 1948	660
"Necessary Program" 1948-52, annually	1,600-1,700
"Desirable Program" 1948-52, annually	3,700

The "necessary program" indicates the number of dwelling units which would have to be produced yearly for five years in order to replace completely dwelling facilities destroyed or damaged during the war and to re-establish the prewar level of housing as expressed by the number of dwelling units per 1,000 inhabitants.

Even this program which, as appears from the figures, is ambitious compared with the planned production for 1948, would not allow for any improvement in housing standards. If also, within the same five years, overcrowding were to be relieved and insanitary and unsafe buildings were to be replaced, the yearly volume of production would have to be about 3.7 million dwelling units, or not less than six times the prewar production.

International co-operation in the field of timber

Among the United Nations specialized agencies, questions of production, trade, and consumption of forest products were assigned to FAO in its charter of establishment. A comprehensive study of the world situation in forestry and forest products, prepared by the staff of the Forestry and Forest Products Division of FAO, was laid before the Annual Conference held in Copenhagen in September 1946.

One of the important results of Copenhagen, as far as timber is concerned, was the recommendation to call a conference to discuss problems relating to Europe's timber situation. Accordingly, at the joint invitation of FAO and the Czechoslovak Government, a timber conference was held at Marianske Lazne, Czechoslovakia, in April-May 1947. This conference, which was attended by representatives of 27 nations of Europe and America, defined and analyzed the short-term and long-term European timber problems.³ Especially, the conference pointed out the importance of raising forest output and achieving economy in the use of timber in all countries.

³ Report of the International Timber Conference. Published by FAO, Washington, 1947.

The conference further called the attention of other international organizations to the urgency of the world timber shortage and recommended that the newly established Economic Commission for Europe, with the technical assistance of FAO, should pay special attention to:

a. increasing available timber supplies and decreasing waste of wood;

b. aiding in reducing economic difficulties which in certain countries stand in the way of increased production, by assisting them in obtaining necessary economic help; and

c. the satisfactory distribution of available timber supplies.

Following upon these recommendations, the Economic Commission for Europe at its second session in July 1947 created a special Committee for Timber, serviced by a secretariat provided by FAO.

Since its establishment, the European Timber Committee has held sessions in October 1947, in January 1948, and a third session in the summer of 1948, which concluded with a meeting in September. The meetings have been attended by representatives from most European countries (with the important exception of the U.S.S.R.), from the United States and Canada, and from the non-European countries adjacent to the Mediterranean which, so far as forest economy is concerned, can be regarded as part of Europe. In the following paragraphs, the activities of the European Timber Committee are described in some detail.

Efforts to Raise Production and Export Availabilities

A basic and continuous task of this committe is to assess the export availabilities and import requirements of softwood lumber. For this purpose, extensive statistical work is carried out by the staff of FAO's European Forestry Working Group.

The balance sheet arrived at, showing export availabilities and requirements, form the main basis for the Committee's discussions on action to be taken in order to meet the deficit.

Table 5 shows the forecast for 1948, the tentative estimates for 1949 made by the Committee in the summer of 1948, and the actual trade figures for 1937 and 1947. It can be seen that imports in 1947 amounted to less than half the prewar imports. For 1948 no very great increase in timber trade can be foreseen, while for 1949 a distinct decline is anticipated, owing to a reduction in supplies from Germany, reduced Scandinavian exports, and the diverting of European Recovery Program credits from timber to more urgent purchases.

TABLE 5. - IMPORTS AND EXPORTS OF SAWN SOFTWOOD¹

(1,000 standards)

Importing European Countries	Actual imports		Import requirements 1948		Import requirements 1949
	1937	1947	Essential needs	Effective demand2	Essential needs	Effective demand2
United Kingdom	2,366	1,419	1,650	1,140	1,700	1,200
Ireland	so	21	57	40	60	50
France	190	154	250	145	275	200
Belgium	190	115	295	210	250	210
Netherlands	374	214	325	260	325	300
Denmark	171	112	350	150	250	200
Switzerland	41	54	66	66	66	66
Hungary	192	58	130	125	150	150
Italy	312	74	355	257	425	145
Greece	70	20	133	110	130	80
Germany	731	...	...	...	...	...
Other countries3	589	53	642	541	697	586
TOTAL	5,306	2,294	4,253	3,044	4,328	3,187
Exporting Countries	Actual exports		Export prospects2 1948		Export prospects2 1949
	1937	1947	Normal	Maximum	Normal	Maximum
Norway	51	8	36	36	36	36
Sweden	820	409	530	530	375	450
Finland	1,045	474	515	515	350	420
Poland	334		48	60	...	...
Czechoslovakia	176	128	65	80	25	...
Austria	317	31	64	68	64	90
Yugoslavia	197	58	65	80	60	160
Rumania	353	...	6 (110)	(110)	(110)	(110)
Germany4	...	616	365	365	255	260
Other sources	...	44	10	50	10	50
TOTAL for Europe excluding U.S.S.R.	3,293	1,768	1,808	1,894	1,285	1,576
U.S.S.R.	1,362	...	(100)	(150)	(100)	(250)
Canada	508	648	400	450	550	550
U.S.A.	110	225	200	250	250	250
TOTAL5	5,273	2,641	2,508	2,744	2,185	2,626

SOURCE: FAO/ECE Timber Committee, Economic Commission for Europe

... Not available.

¹ Including boxboards and timber equivalent of sawlogs.

² As expected by the Timber Committee in June 1948

³ Including non-European Mediterranean countries, and smaller amounts of imports to South Africa, Australia, and New Zealand from Europe.

⁴ Three western zones only

⁵ The difference between total imports and total exports in the gears 1937 and 1947 are due to various statistical deficiencies.

⁶ Figures in parentheses are estimates.

Requirements for 1948 and 1949 are given in two columns, of which the first ("essential needs") shows the quantities which would be purchased if the necessary means of payment were available while the second ("effective demand") shows the quantities which countries anticipate being able to purchase under the circumstances likely to prevail at the time. The effective demand thus defined amounts to 3.0 million standards in 1948 and about 3 2 million standards in 1949, against prewar imports of 5.3 million standards, or, leaving out of account prewar German imports, 4.6 million standards.

The export prospects for 1948 and 1949 are also given in two columns, "normal" and "maximum." The difference between the figures in these two sets of columns is accounted for partly by more optimistic estimates of exports from the U.S.S.R. and the Western Hemisphere, but mainly by increased supplies which could come from some European producing countries, providing they obtained certain equipment and other requirements.

It has already been pointed out that, though the forest resources of Europe (outside the U.S.S.R.) do not by any means make possible a production of lumber sufficient to cover needs, there still are important possibilities for a rapid rise in output in certain countries where lumber production in postwar years has been hampered by special difficulties, such as lack of equipment and fuel.

It has therefore been one of the most important tasks of the European Timber Committee to assess such requirements for equipment and other goods needed to expand domestic timber production, which would make additional quantities available for export or reduce import requirements. At the first meeting of the committee, in October 1947, several countries presented lists of special requirements. A working party screened these lists so that only requirements which were directly connected with an increase in the production of softwood timber in the very near future were considered.

As the result of negotiations among ECE, FAO, the International Bank for Reconstruction and Development, five timber-exporting countries of eastern Europe, and six timber-importing countries of western Europe, agreement in principle has been reached on a plan to grant credit facilities for the purchase of this equipment against additional exports of wood. Details remain to be worked out with individual countries but broadly the Bank would extend credits of $6 to $8 million to timber exporters and simultaneously the importing countries would provide equipment to the value of about $8 million. In return, the Eastern countries would undertake the delivery in two years of timber products valued at nearly $330 million, of which $120 million would be additional exports, over and above the quantities which would otherwise be exported. The Bank's loans would be repayable from the proceeds of these timber deliveries.

As regards Sweden, the main possibility of increasing timber output in the short run lies in increased supplies of mineral fuel, whereby manpower could be diverted from the production of fuelwood to that of timber. Accordingly, the Coal Committee of the ECE, acting upon the recommendation of the Timber Committee, has agreed upon an extra allocation of fuel and Sweden has made considerable extra amounts of sawn softwood and pitprops available for export.

These activities of the European Timber Committee have envisaged an increase in timber availabilities in the very near future. The problems of development of new forest industries so as to alleviate the longer-term timber shortage is being explored by FAO's European Forestry and Forest Products Commission. Any danger of overlapping between the activities of this Commission and the FAO/ECE Timber Committee is prevented by the fact that the two bodies have the same chairman and are being serviced by the same secretariat.

Pitwood

So far the available amount of pitprops during the postwar years has been just sufficient to keep pace with the rise in coal production. Even during 1947 some replenishment of the dangerously small stocks in importing countries could take place.

During the coming years, however, a serious shortage of pitprops may develop. Coal production and, consequently, requirements for pitprops in Europe (outside the U.S.S.R.) are expected to increase by 20 percent from 1948 to 1951. Estimates of pitwood availabilities made by the Coal Division of ECE, of which a summary is given in Table 6, indicate that even if the costly imports of Canadian pitwood to the United Kingdom are assumed to continue, and under the assumption that exports of pitwood from the U.S.S.R. will rise appreciably, total availabilities may fail to rise pari passu with increased requirements, unless measures to raise production are taken in good time.

The production of pitprops is hampered, above all, by the strong demand for alternative uses as fuel or pulpwood. Especially in Germany, the acute shortage of house-fuel has limited the production of pitwood, but also in other countries, mainly Sweden and Finland, large quantities of wood have been burned which could have been used as pitprops.

It need not be stressed that the production of pitprops ought to have high priority in programs of timber production and exports. In fact, it is a flagrant example of maladjustment that wood suitable as pitprops should be burned while at the same time coal mines are faced with a shortage of mining timber. It has already been mentioned that action has been taken by the European Timber Committee in co-operation with the Coal Committee, to direct extra amounts of coke to Sweden against the promise of greater export of pitprops and other timber products.

Currency Problems and Buying Limits

The balance sheet drawn up, by the European Timber Committee in July 1948 (see Table 5) shows an effective import demand in 1948 of about 3 million standards compared with prospective export availabilities ranging from 2.5 to 2.7 million standards. The narrowing of the gap between effective demand⁴ and available supplies is in some ways an encouraging development. On the other hand, the amount which importing countries declared themselves able to buy was only about half the volume of prewar imports, in spite of drastically increased needs. High prices and currency difficulties have caused this curtailment in effective demand and the European Timber Committee has studied the depressive tendencies with close attention. Ways and means have been discussed of easing the purchasing power difficulties of importing countries, so raising effective demand and contributing to a restoration of more normal conditions in the international timber market.

⁴ Effective demand as exercised by import licensing authorities. It does not, of course, mean that there is not a ready sale for timber on the importing countries' internal markets, though in some countries the internal demand for timber has also of late been limited by reductions of housing programs, etc. Italy provides an example of how a very great reduction of timber consumption can go hand in hand with an even greater reduction of demand. Though timber consumption in 1947 was only about half the prewar figure, the market conditions for timber in the spring of 1948 were described in these terms by an economic periodical: "At present the timber market is characterized by a well-defined excess of supply over demand. There has indeed been a considerable falling off in timber consumption owing to the slowing down of the rate of building reconstruction during the last few months and of the general slowing down of economic activities throughout the country...." (Banco di Roma, Review of the Economic Condition in Italy, May 1948. p. 189).

TABLE 6. - PROSPECTIVE PITWOOD BALANCE FOR EUROPE (EXCLUDING U.S.S.R.)
1948-1951

	1948	1949	1950	1951
	million metric tons	million metric tons	million metric tons	million metric tons
1. Coal production	492	526	564	592
	million m3	million m3	million m3	million m3
2. Pitwood requirements	14.8	15.0	16.0	16.9
PRODUCTION OF PITWOOD
3. Coal-producing countries	10.3	9.5	10.0	10.4
4. Other European countries1	2.4	2.6	2.5	2.5
IMPORTS OF PITWOOD
5. From U.S.S.R	0.9	1.3	1.7	1.8
6. From Canada	0.8	0.8	0.8	0.8
7. Total estimated availabilities (3 + 4 + 5 + 6)	14.4	14.2	115.0	15.5
8. Deficit (2 - 7)	0.4	0.8	1.0	1.4

SOURCE: Coal Committee, Economic Commission for Europe.

¹ Including French Zone of Germany.

On the other hand, the committee has had to envisage the danger that a rise in demand during 1948 might lead to competitive bidding-up of timber prices and might prevent some importing countries from getting a fair share of available timber supplies. As a preventive measure against such a development, the importing countries at the committee's meetings in January and June 1948 agreed to regard the announced effective demand, as buying limits for each country's timber purchases for delivery during 1948.

Economies in Timber Production and Consumption

The extreme scarcity of timber has, as is well known, compelled many countries to adopt severe measures in order to achieve economy in its use, mainly through compulsory regulations and standard specification for timber used in construction work. In some countries intensive technical research work in this field has also been carried out.

Considering Europe as a whole, the knowledge and application of technical innovations has spread rather slowly. This is especially true of the building trades, which are carried on by a very great number of independent enterprises and where national traditions play a great role. It would seem, therefore, that here is scope for international co-operation with a view to speeding up the application of modern methods. The same applies to the introduction of new methods in forest work, sawmilling, and - not least - to the derivation of substitute materials from wood waste.

These problems were discussed at the FAO Timber Conference at Marianske Lazne, and the International Forestry Center (C.I.S.), now absorbed by FAO, has made an intensive study of "technical means to reduce Europe's timber deficit. " Within the framework of ECE, these problems are being attacked jointly by the Timber Committee and the Subcommittee for Housing. Specialists from various countries in the field of wood technology and house construction have been collecting data about technical measures to achieve economies in timber consumption and production and about practices existing in that respect in various countries. These data should form the basis for recommendations and the offering of assistance to governments by FAO and ECE.