Problems and Development Prospects of the Forestry and Logging Industry

Abstract

The paper sheds a light onto institutional problems related to the effective Forest Code, which is still undergoing changes. There is a need to update and improve forest management that has to provide potential harvesters with information on composition and taxation rates of timber resources. It is emphasized that a lack of effective care for young forests and competent forest cultivation in Russia leads to degradation of the forest fund. Actual financing of forestry activities has dropped significantly leading to a sharp increase in social problems in forest villages and pushing their residents into “shadow” business.Small and medium-sized logging enterprises and sawmills have no profitable waste processing facilities. In addition to this, the applied mechanism of priority investment projects was reduced to allocating large rental areas without an auction procedure. This resulted in “squeezing” small and medium-sized entrepreneurs out of the forestry business.