Forests of Russia: economic boon or resource curse

It will be no secret to anyone that the Russian timber industry is characterized by a rather low level of deep wood processing. Almost every Russian, answering a question about the problems of our timber industry, will give out a phrase learned by heart that in Russia they prefer to export unprocessed wood, without bothering to create and develop enterprises whose activities involve the mechanical processing of wood raw materials.

However, this is not entirely true, for example, in 2021, the head of the Ministry of Industry and Trade of the Russian Federation stated that over the past ten years, the volume of exports of commercial roundwood (the most unprocessed format of raw materials) from the country has decreased from 49 million cubic meters to 16 million cubic meters, that is decreased three times. In addition, from January 1, 2022, a de facto ban on the export of unprocessed roundwood was introduced in the country, with the exception of two checkpoints Lytta (Finland) and Hasan (DPRK).

According to Deputy Head of the Ministry of Industry and Trade Viktor Yevtukhov, this measure should allow saving up to six million cubic meters of softwood in the country, which will be processed on the domestic market, resulting in an increase in the added value of exported products. Unfortunately, the events of 2022 do not allow us to fully evaluate the first results of changes in the forest industry; due to sanctions pressure, timber export has become quite problematic even without a ban.

It is also worth paying attention to the fact that on February 11, 2021, the “Strategy for the Development of the Forest Complex of the Russian Federation until 2030” was adopted, which defines the most significant problems of domestic forestry, suggests ways to solve existing vulnerabilities in the industry. Prime Minister of the Russian Federation Mikhail Mishustin stressed that the new Strategy consolidates the transition to the intensive model of forestry management that the country needs so much. The document deals with the problems associated with the use, protection, protection and reproduction of forests, the improvement of forest supervision, technical modernization of timber industry enterprises, decriminalization and digitalization of the industry itself. But, as expected, many experts and representatives of the timber industry were dissatisfied with the work of the Government of the Russian Federation on this issue, saying that the new Strategy largely does not correspond to existing realities, the conceptual apparatus presented in the document needs to be revised.

As mentioned above, the sanctions hit the Russian timber industry quite hard. So, on July 10, 2022, states unfriendly to our country introduced a ban on the import of mineral fertilizers and timber from the Russian Federation. In addition, an embargo was imposed on the export to Russia of various high-tech products used in timber processing enterprises. Similar policy of our partners has led the Russian authorities to search for ways out of the current situation, which consists in revising the priorities in the development of the country's forestry, transforming logistics export routes and focusing on the domestic market.

In 2022, within the framework of the International Forum "Russian Forest Industry: Harvesting, Processing, Production", held at the end of March in Moscow, experts from the Analytical Center under the Government of the Russian Federation once again briefly went through the list of traditional and painfully hackneyed problems characteristic of the domestic timber industry. complex. It was told about the inefficiency of forest management, about the work of companies in economic unattractive areas, the low density of forest roads and transport routes, the opacity of the market and the rather low profitability of the industry. Now this list has been supplemented by the problem of the attempts of the West to isolate Russia economically. Expert Andrey Peshkov stressed that it is necessary to start developing a new economic policy for the timber industry, which should be aimed at creating new relations between producers and consumers of products.

After a thorough discussion, taking into account the current economic and political situation, the participants of the event identified the main measures to support the timber industry. So, it is suggested:

- lower the threshold for entry into the markets of states that are not unfriendly, such a decision, simply speaking, means Russia's reorientation towards the Asian consumer;

- completely abandon or reduce duties on equipment, components, and spare parts that have no analogues in the Russian Federation, coming from other countries, which will allow companies to offset the losses received against the backdrop of sanctions;

– provide priority access to the railway infrastructure for companies in the industry in order to redirect high value-added products from existing export markets to new ones;

– introduce a moratorium on the termination of forest lease agreements, which will allow companies time to solve more significant financial problems;

- to create and develop engineering centers on the basis of higher educational institutions to stimulate forestry engineering, which will subsequently lead to a decrease in import dependence and to overcome the technological gap.

At present, the situation in the industry is in many respects a turning point. A new challenge has been added to the problems that have been accumulating for a long time, consisting in sanctions pressure on our country. In such conditions, industry representatives must rebuild logistics and cope with financial difficulties as soon as possible in order to maintain their position in the market. The state should not stand aside either; by its actions, it should take into account both the interests of business representatives and the development of the country's timber industry as a whole.
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  1. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) April 22 2023 12: 37
    Again good wishes.
    Are there really figures and photos of trains with "deeply processed products" going to China? Or not?
    Here I drove it into the search - one round timber in the photo ...
    1. Viktor Anufriev Offline Viktor Anufriev
      Viktor Anufriev (Victor) April 22 2023 13: 22
      And somewhere in the article it is stated that echelons with "deep processing products" are sent to China on an ongoing basis?
      1. Sergey Latyshev Offline Sergey Latyshev
        Sergey Latyshev (Serge) April 22 2023 22: 59
        So I didn't say so. And you indirectly confirmed.
        In the good wishes of the Kremlin - processing. In real life, round. Alas. Money doesn't smell
        1. Viktor Anufriev Offline Viktor Anufriev
          Viktor Anufriev (Victor) 2 May 2023 16: 59
          Personally, I don’t have such data, so I think it’s wrong to assert this or that.
    2. Nelton Offline Nelton
      Nelton (Oleg) April 22 2023 18: 17
      Processed products - plywood, chipboard, paper, pellets - were willingly taken to the EU.
      Of the 11-12 billion dollars of exports, round timber accounted for only 1 billion, the rest was products.
      Accordingly, timber processing plants were located mainly in the European part of the Russian Federation.
      Now for their products to find new markets - that is another task.
      Well, it has always been difficult for China to push through products, and now it can completely twist its arms as it wants.
  2. Pafnuty Pakhomovich (Pafnuty Pakhomovich) April 22 2023 14: 21
    Fresh tradition and hard to believe.
  3. Artificial Intelligence (artificial intelligence) April 22 2023 15: 00
    it is necessary to approve a law according to which the inhabitants of Russia have the right to receive a certain amount of wood for personal property free of charge. so that later he can make some kind of furniture to order, build a house in the village, etc.

    and it would be nice to create a national occupation - to plant trees by the millions. then give even more good wood to such people who will participate. than rich so happy! )
  4. Vox Populi Offline Vox Populi
    Vox Populi (vox populi) April 22 2023 16: 36
    The problem is systemic, it includes political, legal and economic aspects of the organization of the national economy (the mass of the so-called black lumberjacks operating due to rampant corruption; the same Forest Code of 2006, which made a significant contribution to the degradation of the industry; senseless Strategies and " road maps" instead of strategic planning, etc.).
  5. Pro100 Offline Pro100
    Pro100 (Vladimir Babaev) April 22 2023 22: 29
    Under the sanctions, export sales of raw materials, wood, metal, fertilizers, wheat have decreased and it would seem that part of these products should go to the domestic market and, as it were, lead to lower prices, but for some reason nothing like this happens (neither timber, nor metal, neither gasoline, nor flour, nor gold fell in price), although prices fell for foreign importers. The wonders of the market economy...
    1. hellman anton Offline hellman anton
      hellman anton (hellman anton) April 23 2023 06: 06
      You forget one thing, for the sake of Western partners (respected), some will do anything and sell anything. As it was before, we were proud that we sell gas to Europe several times cheaper than the market value ..
      As one song says "I'm not for sale, but for money - YES"

      Well, if resources were sold and this money went into the economy, lowering the cost of living for ordinary citizens. But they do not go into the economy, judging by the situation and the budget deficit
    2. Rusa Offline Rusa
      Rusa April 28 2023 18: 50
      The wonders of the market economy...

      Rather, the miracles of the state of the Russian Federation, which is responsible for everything that happens in the country.
  6. prior Offline prior
    prior (Vlad) April 23 2023 09: 37
    In Russia, the ideology of getting rich quick has flourished.
    The main value was money and only money.
    Getting rich quick involves nothing more than a simple sale.
    Any processing involves costs. It only produces what is even more expensive to buy than to produce.
    Costs and getting rich quick are incompatible.
    Until this ideology changes, nothing will change in the state.
    All calls will go into "beep", into words, into calls.
    For example. The price of gasoline is five times higher than the cost price. The state and the oligarchs are satisfied with this.
    So why would they change anything?
    So it is with the forest, all wishes for processing "will go to the forest."
  7. unc-2 Offline unc-2
    unc-2 (Nikolai Malyugin) April 25 2023 06: 35
    Seven nannies have a child without an eye. We have every minister of all trades out of boredom. He can lead sports, then the furniture industry ... And the forest is on fire, even in the European part of our country. Science has gone to the backyard. In the Russian Academy of Sciences, people who work on a whim filled their place. I noticed in Belarus the forest does not burn. The fact that unaccounted forest is leaving for China is no secret to anyone. Small-town conspiracies do their dirty work. State projects are one thing, local people are another. Everyone wants to earn not just money, but big money.