- The global financial crisis is the most widely discussed topic today. With respect to that what should be done on the regional and federal levels to mitigate the consequences of the crisis for timber industry?

- The situation in this branch is serious and we should solve arising problems quickly. For this purpose we are to form regional permanent commissions to ensure sustainable functioning of timber industry economy in Russia.

It is very important that the constituent entities should invest in road construction in forest areas, because business is not able to construct roads at the own expenses – the costs are very high and timber companies are in great straits.

In connection with decrease in demand for timber industry products on both world and domestic markets, the formation of regional and municipal orders for products of Russian enterprises is gaining special importance. The compensation from regional budgets of a part of the credit interest rate for accumulation of interseasonal timber resources may become a substantial aid for this industry as well.

The government can render real assistance under crisis conditions. For example, it can facilitate in cooperation with banks to provide timber industry with credits, as well as:

• to foresee the budgetary funding from the emergency fund to finance construction of forest roads, subsidization of a part of the credit interest rate, if those credits were taken to provide interseasonal timber resources;
• to reduce at most the terms of VAT refund for timber exporting enterprises;
• to allow timber enterprises exceptionally to pay their rental fee for forest exploitation against actually harvested volume in quantity;
• to foresee growth of tariffs on natural monopolies;
• to provide the VAT payment by installments in case of purchase of machinery and equipment having no domestically produced analogues;
• to introduce tax advantages for companies implementing priority investment projects.

Only the timely realization of the whole complex of the anti-crisis measures can ensure efficient results.

- What has been done by the administration of the Vologda region to support timber industry?

 - For the last five years enterprises of the timber industry complex have got substantial privileges in property and transport taxes, which allowed them to enlarge their current assets and develop. 

- How has the structure of woodworking sector changed in the region over recent years?

 - The strategy of timber industry development in the region is aimed at the development of the advanced timber processing, which in the end allowed reaching the following results: in 1996 38% of harvested timber was processed in the region, while in 2008 it made up 65%; in 1996 62% of harvested timber was exported from the region, in 2008 only 35% of round timber was taken away. It should be mentioned that the structure of timber export has experienced significant alterations.

All this evidently shows that advanced timber processing has been paid and is paid much attention to in the Vologda region. If we pay attention to the priority investment projects, realized in the region, the main trend here is advanced timber processing. It is planned to increase production of MDF and chipboards, fabricated wood block flooring, scale wood and plywood, pulp and paper products. 

 - What should be done on the governmental level (state and regional) to improve the situation in the field of forest road construction?

- First of all, classification of objects of timber infrastructure should be introduced into the normative legal base – main forest roads, which are permanently used, during the whole period of forest development. Such roads should be constructed at the expense of the government, incl. private sector participation. Temporary roads – feeders, spurs should be built at the expense of the forest user. It’s equally important:

• to work out technological parameters of forest roads, taking into account the use of modern heavy motor-vehicle trucks; 
• to define the category of main forest roads as roads of non-communal use;
• to work out the methods of co-financing and the size of federal grants for forest road engineering and construction.

Only this way we can pass from something in mind to something in kind, construct permanent forest roads, which are urgently important for the complete use of allowed annual cutting volume and effective development of forest resources.

Business Support Burea "Runa" www.runa.info

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