The projects of the new Forest Code at the moment are discussed in the Parliament of Ukraine. The changes in the administrative structures towards the division of management and economic functions in State forests are expected. The State Forest Inspection in the compound of Ministry of the Environment Conservation will be established in the nearest time. The functions of State management will be detached from State Forest Enterprises, which have economic activity. Regional enterprise associations also will be reformed to the regional management bodies (territorial representative bodies of Ukrainian State Committee of Forestry).
Currently an inadequate legislation and normative documentation in forestry is a main factor that hinders transition to sustainable forest use. Besides functioning of the legislation and regulations leave out of account and do not foster formulation of market mechanisms in forest sector. Generally, timber is priced according to demand and supply, i.e. market mechanisms. However numerous administrative control institutions have a great influence on state forest enterprises, hence the economic environment is being changed from market to market-regulating environment. Forest and nature protection legislation makes an emphasis on common national principles and approaches. Thereby it hardly ever considers regional peculiarities that vary a lot. The market transformation process, which started in Ukraine, resulted in:
- privatisation and creation of stock companies in wood processing industry;
- deterioration of forestry and forest industry co-operation;
- falling of an internal demand for forest products (as a result of production recession and deterioration of financial circumstances of traditional consumers of forest products;
- reduction of national forestry programmes state financing.
The changes mentioned above in their turn were the reasons of:
- orientation of forestry enterprises on foreign markets of forest products, but internal wood market slowly development as well;
- creation of wood processing sector in the State Forestry Committee enterprises;
- creation of a great number of small and medium private wood processing enterprises and intermediate organisations;
- first attempts of forest products realisation in commodity exchange;
- necessity of forest land belonging to collective farms and creation of specialised forest management enterprises.
Future challenges to ensure sustainable forest management