The economical conditions for forest enterprises in Ukraine were changed from the attaining of the independence. In particularly forest enterprises became subjects of the market economy, got the proprietary rights for wood harvested and were allowed to sell it in external and home markets.
In the same time the budget financing of forest enterprises has been decreased continuously. Nevertheless the most economically viable enterprises, such as Teteriv, Fastiv, Konotop, Gorodnyanskiy, Sarnenskiy and Vovchanskiy state forest enterprises, have refused to use budget financing and decided to cover all forest management expenses (plantation, tending, protection against illegal cutting, fires, pests) due to wood sale. That is the proof of possible profitable and commercial forest management in main forest regions of Ukraine (Kolisnychenko, 2000).
Wood-processing sector has deteriorated for 10 latest years, because of privatization and actual bankruptcy of most large enterprises that consumed and processed wood. To date the small and medium private enterprises that are not capable of processing large volumes of small-sized wood harvested in tending are prevailed. Consequently, there is a decrease in solvent demand for round wood and primary products and a change in home market consumption. On the contrary the volume and economical profitability of timber and primary products (first of all sawn-wood) exported by state forest enterprises has increased.
During last years the using of total annual wood increment became quite lower, while volumes of the most quality timber harvesting are growing for export purposes. Decrease in harvested wood is registered while increase of the growing stock. Last decades in Ukraine the growing stock increased (twice for 40 years), whereas the annual allowed logging and volume of harvested wood has dropped. As a result, the exploitation of the increment and intensity of exploitation in Ukraine are lower then in most European countries (30-40%). Economic peculiarities of forest management also depended strictly on the variety of nature economic and forest resource conditions. The territory of Ukraine is represented by non-forest zones (the percentage of forest cover lower then 5%) and by important forest covered areas such as Forest Steppe area (15-17%), Polissya (25-35%) and Carpathians (around 70%) that require the development of a regional approach.
Ukraine has large potential to develop the harvesting of non-wood forest products (NWFP). This is proved by the availability of significant NWFP resources, historically established harvesting traditions, readiness of people for and its personal interest in taking part in such a job. The sociopolitical and economic changes taking place in recent years in Ukraine have substantially re-determined the role of non-wood forest products (NWFP) in society and economics and required the revision of attitude towards them. The lowering of living standard raised the significance of food NWFP as a component of daily diet particularly in rural regions. The advent and rise of private enterprises stimulated the increase in economic importance of non-wood products: (i) as a source of income for rural people; (ii) as a source of gaining profits in industrial, retail or consumer market sectors; (iii) as items of international trade.
At the moment, a series of unresolved problems impede the development of small and medium enterprise in the field of harvesting of non-wood raw materials. For the absence of marketing research and investigations of demand for particular products, its seasonal dynamics and trends in the development of the sector, the enterprises are poorly informed about alternative markets. There are no organizations (associations) joining producers in this economic sector, which could defend the interests of enterprises and oppose the control over the market established by large exporters. The lack of NWFP certification system aggravates financial terms of export. With the proper state regulation, but without immoderate wardship, this sector is very attractive for small and medium business.
To develop sustainable NWFP harvesting and marketing it is necessary (Zibtsev, 2001):
a) to provide the legislative support for Ukrainian industrial enterprises that use domestic raw materials, to form and advertise through trade agencies the positive image of Ukraine in this international trade sector;
b) to create the centralized system of licensing the special use and export of NWFP aimed at regulating the harvesting regions, volumes and kinds of gathered raw materials and taking into account the requirements for protection of the resources;
c) to work out approaches of NWFP certification to exercise the control of the harvesting volumes in regions;
d) to protect interests of local people, as for them NWFP comprise the irreplaceable part of basal ration and harvesting for sale is sometimes the only source of income;
Issues and policy development challenges relate to social and cultural aspects of sustainability. The change of economical conditions for forest enterprises and increasing the cost of forest products influenced social aspects of forest exploitation for the society in general and especially for those people who work in forest sector or consume forest products. A sharp deterioration of living standard registered in transitional period (decrease in living wage caused by inflation and inefficient economy, unsatisfactory social protection, high level of unemployment in agrarian sector) raised the role of forests as a source of fuel wood (especially in Carpathians and Polissya) and non-wood products, first of all foodstuff. At the same time the illegal exploitation of forest resources increased (illegal cutting, poaching etc.). In regions with extremely high unemployment level (60-70%), it reaches catastrophic levels. While the agrarian reformation was carried out on more then 60% of agricultural part of country and large agrarian enterprises (collective farms - kolkhosy) were destroyed, forest enterprises became more important because they employed villagers. Moreover, the development of wood processing will be also very important for both cities and countryside labor-market.
Under the urbanization and industrialization processes goes on the social and cultural role of forest is growing in society. It creates favorable conditions for recreation and health, improves ecological conditions. The positive factor is the intensification of discussions in mass media on the role of forests for the society. That means the growing public interest to the problems of forests and forest management. Nevertheless, the information distribution, especially in villages, is not high. Moreover, often forest information is manipulated to attain some political goals.