Go to ...

The Newspapers

Gathering and spreading news from various Russian Newspapers

The Newspapers on Google+The Newspapers on LinkedInRSS Feed

Thursday, March 15, 2018

Putin: the Forest industry in critical condition

Putin said about the terrible condition of the forest industry and demanded layoffs

April 11, 2013, 22:46

Text: Olga Samofalova


President Putin sharply criticized the leadership of the Agency for the contribution of forestry to the economy of the country for ten years, fell to 1.6% of GDP. He effectively accused officials in providing false information, I pointed out the facts of theft and asked to make personnel decisions. The expert said the reasons for the critical state of the industry.

At a state Council meeting held in the capital of Buryatia, Russian President Vladimir Putin within a few hours understood the problems existing in the forestry sector.

According to Putin, the forest industry is in a critical condition.

The contribution of forestry to the economy over ten years fell by 7% to 1.6% of GDP, foreign currency earnings from exports of forest industry decreased by 6%, the tax revenues flowing into the budget for this activity by 32%, Putin said.

According to him, with all this deforestation increased by 60%, and in 2012, the loss from illegal logging amounted to 10 billion rubles. In 2012, the year to administrative responsibility for illegal logging attracted only 7 million people. The President demanded to “establish a system of accurate monitoring and define tougher measures of punishment for those who savagely destroys the forest”.

As in other sectors of the economy, forestry is not without corruption, the cause of which were, according to Putin, “short-sighted financial, personnel and management decisions”. All of this leads to deterioration in the environmental safety to reduce the forest area available for logging, he said.

Separately, the President stopped at auctions, through which a fifth of the forest now leased for wood harvesting and processing. “They would win, first of all, the structures close to the government and their intermediaries. People living near forests often can’t get it for their own needs and at an affordable price, you have to beg the local authorities, to stoop, to run for various offices, to pay. This, of course, simply a manifestation of tyranny,” Putin said, noting that tenants do not always fulfill their obligations.

A similar situation exists in the field of timber marketing. According to Putin, the timber sell wood to intermediaries at 2 thousand and 5 thousand rubles. So why such intermediaries with such a large margin, why not work directly asks the President.

In this issue the head of state have personally seen, talking to two entrepreneurs from Transbaikalia, who complained that the can not achieve participation in tenders for the supply of wood directly to Rosatom in the region. In response to Putin directly at a meeting called entrepreneurs to his presidential seat and gave them the phone numbers of the head of Rosatom Sergey Kiriyenko to address all the issues.

The President urged the government to promote the investment attractiveness of the timber complex, noting that it is planned to invest over 400 billion rubles in 118 projects that have received priority status. He added that “now only implemented 26 projects, the rest – on paper or in the stage of low start”.

Putin also criticized the situation with the forest fires, the inventory. One of the reasons is the reduction in the number of people employed in the industry of specialists, including firefighters, the number of which in comparison with 2005 has decreased by 4.6 times.

Also went to the departments of the economic block in a long discussion on several issues, in particular on the introduction of the mechanism of partial refund of VAT for the export of wood.

The Governor of the Amur region Oleg Kozhemyako told that the gaps in the forestry law allow for easy display of illegal processing abroad. Companies evade taxes and customs duties. And when export VAT refund is more than the payments in budgets of all levels. In particular, in the Amur region is one of the companies paid the taxes on 5 million roubles, the VAT refund was 129 million rubles, said Kozhemyako.

The formula for the VAT refund is being developed, but the MAYOR and the Finance Ministry can not come to a consensus on this issue. Addressing the representatives of the Ministry of Finance and Ministry of economic development, Putin said that “you can not always discuss and to make decisions.” He demanded an end to the “torpedoing” of the initiatives previously agreed with the regions and make appropriate decision immediately, and not to February 2014, as previously proposed.

Putin especially not like that the Agency did not provide accurate information, neither about the number nor about the quality of forest resources – such information is available only for 19% of the forest areas. But almost 70% of Russian territory is forest.

“The Federal forestry Agency and the number of subjects give deliberately misleading information, and law enforcement agencies are inefficient, and sometimes do nothing”, – quoted Putin RIA “Novosti”. “Obviously, the officials who are responsible for the development of the forest sector can not cope with their tasks. I think the government need to take appropriate personnel decisions, and it must be done as soon as possible”, – he added.

The head of the Federal forestry Agency Viktor Maslyakov did not comment on the statement by the President, and the assistant to the President Yuri Trutnev promised that personnel decisions will follow soon, because “the responsibility for the condition of Affairs in the industry shall be the head of the authorised Federal body, which is the FFA”.

System or an isolated case

With regard to illegal logging, such a large amount of illegal processing of timber does not exist de facto, as if to cut down huge areas of forest, it can not go unnoticed, said General Director of Scientific-research and analytical Centre of forest economy and nature management, Nikolai Petrunin.

Regarding the availability of intermediaries to overstate the value of forests, in his opinion, it is rather isolated cases and not a systemic phenomenon in the industry.

The forest service is accused of providing biased information, but it is actually not so easy to do, protects the Agency Petrunin. “For 30 years, the forest can burn to get sick to change,” he says. The lack of reliable information about qualitative and quantitative indicators of the forest resource is also a consequence of the fact that forest management has ceased to be funded by the state, he adds.

However, in terms of creating a single Department that manages the forestry of the country, Petrunin supports this idea. “The forest complex is now operated in fact 12 ministries and agencies, which are unable to carry out system management. In the RSFSR there were two main ministries. In 20-ies of the last century the revenues of the forest industry reached one-third of total revenues. They provided the funding for culture, science and education, plus one third of the requirements of the Ministry of defence,” – said the expert.

Causes of decline

With regard to the situation in the industry, the harvesting of the forest really falls. In 2012, it was harvested only 192,1 million cubic meters of wood, which is 7.2% below the 2007 level. At the same time Russia has huge forest resources: area of forest land Fund of the country of nearly 1.2 billion hectares, timber reserves of around 84 billion cubic meters.

There are many reasons, says Nikolai Petrunin. The first is the underdeveloped forest infrastructure. Today, Russia has the lowest length of forest roads per 1 thousand ha of forest Fund lands – 1.2 km, whereas in Finland this figure is at 40 km, in USA – 10 km, in Norway, is 9 km away.

“Due to the lack of forest roads over 194,5 million cubic meters of healthy forests cannot be mastered at all”, says Petrunin. “According to expert estimates it is necessary to invest in the construction of forest roads about 10 billion rubles. But the government is not ready to do it. Without appropriate safeguards are not ready to do it and the business” – adds the expert of the forestry sector. With each kilometer of road allows you to explore 1000 ha of forest and ensure that timber harvesting in the amount of up to 2 thousand cubic meters, adds Petrunin.

“The lack of transportation infrastructure led to the fact that many years have used forest resources in a cost-effective and accessible areas. This has significantly depleted the forest,” he adds.

The second reason is the lack of government funding forest management activities. According to him, over the last 20 years the dynamics of forest management activities on forest lands have decreased almost five times from 45 million hectares in 2006 to 10 million hectares in recent years. As a result, now only 19.2% of the area of the forest Fund the forest inventory conducted in the last 10 years. And 64.9% of forest areas were arranged from 20 years or more.

Another reason is the imperfection of the Institute of forestry leases, he said. Forest law is the main principle of forest exploitation. Today 36705 enterprises concluded contracts of lease of forest areas to timber harvesting. “The imperfection of the institution of lease forests, however, as the entire system of gender relations in Russia is that the participants of placing orders there is no requirement of specialization, professional experience, availability of production facilities and workforce. In the end, a lease can receive an unprepared company”, says Petrunin.

All this leads to inefficient use of the leased plots of the forest Fund and forest enterprise the real business begin to experience problems with the provision of forest resources. “There is a practice when large projects of the timber industry provided the raw material less than 50%,” – said the interlocutor of the newspaper VIEW.

In addition, according to him, access use of forest resources through lease agreements due to the large number of administrative procedures unnecessarily increases the timing of the start of use of the site. “Practice shows that the timing of such administrative action reach 2 years”, says Petrunin.

“Does not allow to increase the volumes of forest use and obsolete, of moral and physical deterioration of the material and technical base of many forestry enterprises and the lack of a sound credit system reasonable not possible to attract borrowed funds to its renovation, modernization and reconstruction,” the expert adds.

“Reduce the interest in the use of forests laying on the forest legislation of the tenants obligations under the execution of complex of works on protection, protection and reproduction of forests. Thus at the expense of their own funds,” says Petrunin.

Increase profitability of the forest sector is also impeded by serious personnel problem. For example, 35% of employees are approaching retirement age, and about 34% of workers in the industry do not have special education. Forestry in the year requires not less than 15 thousand qualified professionals of all levels. But they are not.


Related posts:
The world Bank announced the forecasts for Russia's GDP and the lifting of sanctions
Cottage — the only sensible choice
Sechin commented on the searches in the office of "Bashneft"
Bloomberg: richest Russians became Alexey Mordashov


More Stories From Economy