Not only sale of wood: diversification of sources of revenues in selected european public forest enterprises

Abstract

Economic viability of forestry is one of the key pillars of sustainable forest management and a basis for maintaining forests and their multiple benefits for the society. It may be achieved by, inter alia, diversification of sources of income in forest management. The aim of the article is to analyse sources of revenues of state-owned forest enterprises (holdings) in selected European countries and ongoing changes in this respect in recent years. In the paper, we analyse the structure of revenues of state forest enterprises in Poland, Germany (with the examples of Bavaria and Lower Saxony) and Austria; however, particular attention is paid to the State Forests National Forest Holding in Poland, which is the largest state-owned forest holding in the European Union (EU) in terms of area of forests. The study is based on document content analysis methodology (desk research), including annual reports published by forest enterprises, statistical data and also legal regulations. The analysis shows that while revenues from the sale of wood are the main source of income of forest enterprises, some of them are seeking to diversify their sources of revenues. The Austrian Federal Forests can serve as an example of a good development strategy based on diversified sources of income. Also, the Lower Saxony State Forest company, which is approximately 60% dependent on the sale of wood, undertakes other activities, including real estate management, hunting and recreational services. Our study shows that both the State Forests National Forest Holding and the Bavarian State Forests Enterprise are based on timber harvest and sale to a large extent. We conclude that as regards the State Forests Holding in Poland, the possibility of expanding and diversifying commercial activities should become a subject of discussion among foresters, decision makers and politicians.