Forest subsidy distribution in five European countries

• Published in: Forest policy and economics 2023-01, Vol.146, p.102882, Article 102882
• Main Authors: Haeler, Elena, Bolte, Andreas, Buchacher, Rafael, Hänninen, Harri, Jandl, Robert, Juutinen, Artti, Kuhlmey, Katharina, Kurttila, Mikko, Lidestav, Gun, Mäkipää, Raisa, Rosenkranz, Lydia, Triplat, Matevž, Vilhar, Urša, Westin, Kerstin, Schueler, Silvio
• Format: Article
• Language: English
• Subjects: Bioeconomy; Economics; European agricultural fund for rural development (EAFRD); Forest Science; Incentives; Multifunctional forests; Nationalekonomi; Policy; Skogsvetenskap; Small-scale forest owners
• ISSN: 1389-9341; 1872-7050; 1872-7050
• DOI: 10.1016/j.forpol.2022.102882

Forest subsidies are widely used to achieve policy objectives aimed at maintaining and supporting the provision of the various ecosystem services provided by forests. In the European Union, an important instrument is the European Agricultural Fund for Rural Development (EAFRD) within the EU's Common Agricultural Policy (CAP), but countries also have national subsidy systems. In both cases, individual countries determine which objectives they want to achieve with the subsidy schemes and which measures are supported. In this comparative study, we investigate which forest-related measures are subsidized across Europe and which forest owners, representing a very heterogeneous group, are involved in the activities of the subsidy systems. We collected data on subsidies paid out for forest-related measures from Austria, Finland, Germany, Slovenia and Sweden from the EAFRD funding period 2014–2020 for a comparison of the funded activities. Further, we analysed how subsidies were distributed among private forest owners with forest holdings of different sizes by performing G-tests to compare the observed with the expected subsidies received by forest owners in the different size categories. The results show that through the flexibility given by the CAP for countries to adjust their subsidy programmes to the specific national needs, EAFRD funds and equivalent national subsidies are indeed used for a wide range of activities instead of only a few following one common European goal. Reflecting the different needs and various forest functions, the subsidized activities range from the more ecology-oriented “investment to increase resistance and the ecological value of forests” to the more management-oriented “purchase of new machinery and new equipment for forestry operations”. In all five countries, small-scale forest owners with holdings smaller than 200 ha are the largest owner group and manage a large share of the forest area in private hands (from 47% in Austria to 97% in Slovenia). However, especially owners of the smallest holdings (< 20 ha) rarely use the funding scheme of the EAFRD framework and thus receive a disproportionately low share of subsidies. There might be several reasons for this. Small-scale forest owners are generally less involved regarding policy issues (including subsidy schemes) than owners of larger forest holdings and may not be aware of all funding opportunities. In addition, the considerable effort to apply, including project preparation, a