The moratorium on timber exports is a legislator’s mistake. It didn’t help domestic manufacturers since the woodworking industry is stagnating, and didn’t solve ecological problems – forests are still massively cut down. The only result of imposing the moratorium is a rapid growth of corruption among officials, who “control” the forest – at customs, in the environmental inspectorate… And above all – Ukraine as a full member of the World Trade Organization doesn’t fulfill the requirements under the agreement with the WTO and the European Union.
Domestic market is full
There is a low demand for timber products on the domestic market. Warehouses are filled with finished timber. Moreover, a number of wood workers have financial problems and are not even able to pay state forest enterprises for delivered timber products.
For example, only 68% of non-processed timber were sold at public auctions last year. 47% – at specialized auctions.
In total, 4.3 from 7.3 million cubic meters of wood for sale in 2015 were actually sold and that is 60% of the planned amount.
Besides, 3 million cubic meters of wood were not in demand. This confirms the stagnation of the domestic market and demonstrates the failure of domestic enterprises to deal with such production volumes.
Forests “made to order”
The moratorium on timber exports had virtually no effect on the problem of clear-cutting of forests. Now it is a sanitary procedure made “to order” of wood workers, who increase shadow export market volumes despite the ban. It is impossible to ignore this fact – social networks contain many photos of trains loaded with timber (and not only with pine) that go abroad as well as photos of forest cutting, which volumes are at the level of environmental disaster.
The outdated legal framework allows to “legalize” such forest cutting and avoid liability for that – forest pathologists approve massive clear-cutting of “sick” forests. This process is corrupt and virtually uncontrolled.
The problem came to a head, what solution is there?
The abolition of the moratorium on timber exports is an advantageous option both in economic and political terms. The state will also benefit receiving additional billion hryvnas annually and incomes of forestry enterprises will be increased at least by three billion hryvnas.
However, in order to prevent a negative effect of the abolition of ban on timber exports on domestic wood workers, it is needed to implement a number of compensation options, namely to introduce the practice of selling all non-processed wood through auctions and abandon direct agreements. In addition, Ukrainian wood workers should get preferences. It is also necessary to introduce a single state system of electronic timber management that will show the origin of cut timber in all stages of management from production to selling to a consumer.
The Better Regulation Delivery Office (BRDO) sent its proposals on this subject to the Ministry of Economic Development and Trade and now hopes that proposed initiatives will be taken into account and the Parliament will consider the issue of abolition of the moratorium on timber exports in the near future.
Original publication: AgroPolit.com