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Common Trends: Forest Ownership in Finland and the United States

Posted by Antti Kämäräinen on August 28, 2015

Because wood supply to forest products mills is governed primarily by the ownership objectives of forest owners, forest products companies have a vested interest in understanding who owns the forests in their procurement areas. This is as true in Finland as it is in the United States. A closer look at forest ownership and ownership trends in these two countries reveals additional similarities.

The primary similarity is that private forestry plays a key role in in both countries. In Finland, 80 percent of the domestic wood used by the forest industry comes from privately owned forests. In the United States, the number varies by region, but is roughly 55 percent.

Private Forests

Finland is home to 23 million hectares (49 million acres) of forestland. The forested area in the United States is roughly 15 times that size: 304 million hectares (751 million acres). In Finland, 53 percent of the forests are privately owned by 632,000 families or individuals. These owners control a total of 12 million hectares (26 million acres) of Finland’s forest. The average size of forest is 30 hectares (75 acres). In the United States, by contrast, 36 percent of the forests are privately owned by 4 million families or individuals. These owners control a total of 108 million hectares (269 million acres) of US forests. The average size of forest is similar to Finland’s at 26 hectares (66 acres).

In both countries, private landowners supply a disproportionate share of wood to industry. Fifty-three percent of the forests produce 80 percent of the supply in Finland, and 36 percent of the forests produce 55 percent of the supply in the United States.

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Finland       
United States

 

Private Forestland Owners

For private landowners, legacy is one of the primary ownership objectives. In both Finland and the United States, forestland is passed from one generation to the next through inheritance. As a result, the factor likely to have the greatest impact on the structure of forest ownership is the aging of this group of landowners. The average age of a forest owner in Finland is 63 years; in the United States, the average age is 60.

While most of these owners intend to pass their land on to relatives at some point, studies have shown that:

  • Older landowners are less likely to manage their forests for timber production.
  • Changes to land ownership and management are most likely to occur when land is passed from one generation to the next.

Another ownership trend that is occurring in both countries is that forest owners are more diverse group than they once were. A couple of decades ago, for instance, the typical forest owner in both countries was a male farmer with little formal education living in a rural area. Today, however, the forest ownership base is scattered; it includes rural, urban and suburban dwellers, with various education and income levels. As a result, it is no longer possible to define a typical forest owner. This change presents a challenge for forest owner education efforts.

Another trend occurring is the increase in absentee forest owners. In both countries, the rapid urbanization of forest owners has ramifications for timber production. In Finland, for instance, where rural forest owners are the most active sellers of timber, 25 percent of all forest owners live in cities. While a similar statistic is not available for the United States, 38 percent of forest owners no longer live on their holdings. And more and more, as land is passed down or sold, it is transferred to those who live in cities. What this urbanization will mean in the long run is a topic of much speculation, however.

Some potential implications of these trends include:European benchmark

  • Non-resident owners who are not dependent on income from their forests and who are not part of the local community are likely to have different ownership objectives than those who live on their holdings.
  • Different education levels and occupations will likely influence ownership objectives.
  • Though this is more likely to be true for owners of smaller forests, younger people and those who live in cities are more likely to value forest protection over timber production.

Studies in both countries indicate that forest owners who have multiple ownership objectives—both  monetary and amenity—not only manage their land more actively than owners with other objectives, they are also more likely to harvest timber at regular intervals. Education efforts emphasizing all the benefits of forest ownership—beauty and scenery, wildlife habitat, recreation, privacy, income from timber production and the ability to pass the forest on to future generations—will encourage landowners to manage their forests for timber production.

 

Topics: forest ownership

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