Development of organizational and institutional mechanism of forestry production on the basis of market economy

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Development of organizational and institutional mechanism of forestry production on the basis of market economy

Drebot O.I., Yaremko O.P., Bodnar V.N., Institute of Agroecology and Environmental Management of NAAS

Introduction

The development of forestry management is determined by a set of environmental, economic, organizational, social, social and international factors, which are based on the regulatory framework of the concept and development strategy.

Organizational and institutional mechanism is an important basis for the implementation of a balanced system of forestry production. With this in mind, one of the main aspects is the analysis of the effectiveness of decision-making and their application in forestry practice. The effectiveness of the organizational and institutional mechanism for ensuring the management of forestry can be defined as a productive characteristic of action, which indicates the ability to solve certain organizational, legal and socio-legal problems of forestry. However, today the theoretical basis on which the recommendations for practical action are based needs some transformation. First of all, there is a need to define and interpret the organizational and institutional mechanism to ensure the management of forestry production, as well as to justify the stages, criteria and principles of formation.

The main problematic aspects that currently exist in forestry, on the basis of a market economy and the disclosure of formal norms and rules in institutional support are the tax burden and the improvement of regulations. They suspend the clarification of problems related to the rational use of forest resources, are in the trajectory of the institutional field and need to improve and implement the state forest policy. The main purpose of institutionalization in the forest sector is to establish certain restrictions that structure economic, environmental, and social interactions. After all, they are an important element of any market economy for preservation, renewal and change at the regional, state and administrative levels.

It is worth noting that domestic reformers have not fully understood how ambiguous the market is, which structurally encompasses a variety of institutions and institutions, from the legal framework to determine certain aspects of behavior that are partly due to moral and ethical behavior of economic relations. After all, the formation of the institutional aspect of the forest industry on the basis of a market economy in our country was carried out in an artificial form. The most optimal is that the participants of economic or market relations form effective rules that would be enshrined in regulations.

Tasks related to forest management, in particular resourcesaving, environmentally friendly and rational forest use, should include aspects of the development of the external institutional environment in which they operate, as well as the balance of national, regional and local interests, harmonization and synchronization of natural, forest, material and social benefits.

Presenting main material

Forestry is a production function implemented by the entity that uses the forest. Today it is the State Agency of Forest Resources of Ukraine, which is subordinated to the Ministry of Environmental Protection and Natural Resources of Ukraine, as well as regional departments of forestry and hunting, which are subordinated to the state forestry (Fig. 1). Important in forestry reform, defined by this action plan, is the distribution of state functions in the field of forestry: policymaking functions, control and economic functions will be performed by different authorities; creation on the basis of the existing state forestry enterprises of a single state forestry structure, using the experience of Poland, Latvia and other countries with the successful operation of state forestry enterprises. This is the first step towards improving the system of organizational and economic relations with the participation of state enterprises, in particular, in the field of forestry with the use of institutes and institutions.

The interaction of institutions and institutions creates an institutional environment in the context of horizontal and vertical links, which in their production activities are guided by national interests.

The institutional environment includes: national - the President of Ukraine, the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine; coordination - Ministry of Environmental Protection and Natural Resources of Ukraine, etc .; sectoral - ministries and departments responsible for the activities of certain sectors of the economy: the State Agency of Forest Resources of Ukraine, the Ministry of Environmental Protection and Natural Resources of Ukraine; territorial - regional, local authorities; special functional institutions, which in their production activities are governed by national interests (Fig. 1).

Fig. 1.1. Structural and institutional scheme of interaction between government andforestry management [1, p. 184].

In this context, further institutional transformations, which directly affect all stages of interaction between state institutions and civil society institutions, intensify private initiative in the management of forestry production, as well as ensure the balance of accumulated capital. The formation of mechanisms for the management of forestry production in modern research can be proposed by two main approaches - organizational, economic and institutional.

Organizational and economic approach involves the development of state target programs with a list of priority areas of forest resources and the environment, improving the tax burden on production and sale of forest products, the negative impact on the environment, and economic assessment of natural resource potential of forest ecosystems.

The institutional approach to the essence of the institution is interpreted through the prism of organized institutions, which include norms, customs, traditions, laws, constitution. Thus, the set of these institutions and form the institutions.

Forestry is an organization that is an institution that implements a number of institutions: production, employment, services to citizens. Institutions in cooperation with the organization form an institutional organization - the institute and an organized institution - a body that performs the relevant functions in the field of forest relations regulation and forest resources management.

Existing approaches to institutional transformations in the national economy as a component of forestry management require the development of institutional support in the context of a market economy, stability of forest production, as well as the introduction of new innovative technologies.

The formation of a socially oriented market economy, based on balanced nature management, which requires the formation of institutional support for forestry production and is based on a successful combination of formal and informal institutions, will directly or indirectly ensure the involvement of forest products in trade, regulate their redistribution and distribution. It should be noted that the lack of proper compliance with the rules of institutional support in the context of forestry production of a market economy is actually due to the amount of benefits that business structures receive from the sale of forest products.

We consider it appropriate to propose a model for the development of forestry management, which will be based on the following measures:

S transformation of the institution of private property, which should include elements of national property, as well as be aimed at using the tax burden in the interests of society;

S control over the use of forest resources and increase the level of financial support, control over the violation of illegal logging;

S development of national forest certification using foreign experience;

S introduction of target farms for the production of forest products and intensive afforestation and reforestation;

S improvement of the information component;

S intensive forestry and forest management;

S maximum withdrawal of income from harvested forest resources, recreational forest use;

S improving the production of wood materials;

S balanced use of forest resources;

S improvement of the regulatory framework.

In general, we can say that the institutional model of forestry production is a specific action of the state represented by authorized bodies, different in subject and content regulated by current legislation of the subject's influence on the object through the redistribution of income and expenditure , their goods and services using tools and methods of state organizational and legal regulation, which include: tax and budget system (fiscal); price regulation; monetary regulation; foreign economic regulation (customs duties, licenses, quotas).

The development of forest management is determined by a combination of environmental, economic, legal, organizational and social, as well as international, which are based on the regulatory framework, concepts, development strategies, as well as natural and climatic conditions associated with the cultivation and care of forest plantations, production of forestry products, its processing, sale and maintenance of forestry production. In view of this, state support for certain sectors of Ukraine's economy, including forestry, is provided through public finances.

The above gave grounds to assert that at the present stage of development of the economic system of forestry management it has proved incapable, ineffective to overcome the crisis, contradictions in it and reach a new, competitive level of development. Therefore, only under two management approaches (organizational-economic and institutional), based on the processes of decentralization of power, can achieve positive, constructive transformations in forestry production, thereby improving the macroeconomic environment of the country, solve current problems of balanced economic growth of the forest sector, as well as to form an effective strategy for economic development of forestry production (Fig. 2).

Undoubtedly, at the center of the organizational and institutional mechanism of forest production management are not only forest ecosystems, but also the person, the forester, who serves it as an intermediary.

The management system of forest production should take into account aspects of the impact on human actions at the subconscious level, which are not subject to control and are not specified in the regulations. This determines the ideas of institutionalization in society, which try to transform into economic laws in the non-economic plane. In this context, the formation of competitive forestry production is now a topical and controversial issue among scientific research. The main component is the transformation in the economy, technologies, institutions, which to some extent should reflect the productive forestry activities. Due to certain details of traditions and rules, forestry entities are more oriented towards informal rules, underestimating the role of formal rules. The activities of forestry entities are hidden in informal institutions due to distrust of the authorities.

The necessary pattern of formation and improvement of forestry production is the introduction of theoretical and methodological framework in accordance with the organizational and institutional mechanism that will strengthen the norms, rules, traditions, according to which there should be a promising triodevelopment of ecological, economic and social forestry. transparency, development of investment and innovation forest policy, balanced production activities for management and reforming the transformation of forestry production on the basis of a market economy.

Fig. 2. Conceptual scheme of organizational and institutional mechanism of forestry production management

After all, the development of society is accompanied by increasing man-made pressure on the environment and increasing the priority given to the environmental factor. The natural environment implements the system-forming function in economic relations, because, on the one hand, it contains irreplaceable primary resources of production, on the other hand, it limits its development. Balanced development of forestry production in the process of market transformation of the economy is influenced by a combination of both positive and negative processes that have different speeds and different directions [2].

Since the proclamation of Ukraine's state independence in 1991, the state economy has developed a significantly different system of public administration in all sectors of agriculture, agriculture and forestry, industry and transport, and so on. Compared with the system of centralized management of the national economy of the Soviet era, the identification of land use and the legal establishment of its intended purpose is becoming leading. The main difference, of course, is the identification of business entities, their personal responsibility for the consequences of management, achieving positive financial and economic consequences of land use, self-sufficiency and profitability of management.

It should be noted that according to the Constitution of Ukraine, in areas where natural resources act as productive forces, in particular, the Earth as the "main national wealth" is declared "the object of property of the Ukrainian people." "On behalf of the Ukrainian people, the rights of the owner are exercised by state authorities and local governments within the limits set by this Constitution" (Article 13) [3]. For the practice of forestry in Ukraine, the constitutional norm on the property rights of the Ukrainian people is indicated, which has become a constant engine for the search for forest use (forest fund) as a "special use of forest resources" that is not typical of a market economy. Very little information has been preserved from historical sources on the organizational and institutional support for the management of forestry production in Ukrainian forestry. The beginnings of his time were laid in the middle of the XVIII century. There is a large list of legal acts that regulate forestry and now need changes and improvements.

In this context, today the forest is the only and indispensable source of wood, which is used mainly for the manufacture of means of production, including labor and consumer goods. Despite the fact that there are many substitutes for wood - plastics, synthetics, metals, but its value is not decreasing, but, conversely, increasing, the scope is expanding. Wood is a building material, fuel, paper, clothing, footwear, medicines, furniture, food, fodder yeast, technical alcohol, etc. More than 25 thousand items of industrial products and consumer goods are now made of wood and their number increases every year [5].

The stages related to the regulation of the use and protection of forest lands, and the Forest Code reflects the specifics of the regulation of these relations, are shown in Fig. 3.

Fig. 3. Stages of legal regulation and use of forest lands Source: formed by the authors on the basis of [4; 5; 6].

In accordance with Part 1 of Art. 5 of the Forest Code of Ukraine, forestry lands consist of forest and non-forest lands. In case of change of purpose of forest land plots, there is an obligation to compensate for losses of forestry production. At the same time, a simplified procedure for the transfer of forest land to non-forest land for purposes related to forest management (obviously, the law assumes that the preparation of a new land management project is not required) [6]. When transferring to non-forest lands, the issue of felling and use of wood is resolved. An obligation may be imposed to preserve and care for forest plantations even in the case of transfer of forest lands to non-forest lands (Part 2 of Article 58 of the Forest Code of Ukraine) (Fig. 3).

Forest ecosystems are an important strategic natural resource of our country and the main source of wood, food and medicinal raw materials, as well as other biological products, many of which are still insufficiently studied. There are economic, water protection, climatological, aesthetic and sanitary, ecological significance of forests. First, wood is a universal material, without which no economic activity can do. Secondly, forests increase the annual rainfall by 10-15% compared to forest-free areas, and forest plantations, by fixing the soil with roots, stop erosion processes. Third, forests meet people's need for recreation, clean air. On average, 1 ha of stands in Ukraine annually consumes 5 tons of carbon dioxide and emits 4 tons of oxygen [7].

Regarding forestry production, it is a specific branch of the market economy and has certain aspects, in particular the diversity of forest products, the need for production areas and so on. Forestry production includes the following types: woodworking, pulp and paper industry. It should be noted that forestry is one of the leading sectors in the economy as a whole, producing and supplying raw materials to various production structures.

Among the main problems of forestry development today is the lack of funds to upgrade the equipment of woodworking enterprises, the creation of new facilities for the production of innovative and competitive products [8; 9]. One of the ways to solve such a difficult situation, in our opinion, is the introduction of stimulating phases in the form of a pyramid, which is aimed at economic, environmental, social and legal goals and will achieve high efficiency and quality of any management activity. It will consist in improving the legal support of forestry activities, namely the legal regulation of the behavior of subjects and objects of management, which is carried out through organizational and legal support, able to promote the purposefulness of forestry activities to meet public needs and interests.

As defined by the Basic Law of Ukraine, natural resources located within the territory of Ukraine (which include forest resources) are objects of property rights of the Ukrainian people. On behalf of the Ukrainian people, the rights of the owner are exercised by state authorities and local governments within the limits set by the Constitution of Ukraine (Article 13 of the Constitution of Ukraine) [3]. To implement these constitutional provisions, the Cabinet of Ministers of Ukraine has developed a number of concepts, including:

The concept of reforming and development of forestry (2006), which provided for the introduction into the organization of forestry on the basis of sustainable development, increasing the efficiency of the forest sector in the state economy. The purpose of the Concept is to solve such tasks as: improvement of the regulatory framework in the field of forestry and its harmonization with the international principles of sustainable development and forest management; development of indicators of effective forest management; increasing the restoration and forest cover of the territory, increasing the resource and ecological potential of forests; conservation of biological diversity of forest ecosystems; increasing the resilience of forest ecosystems; efficient use of forest resources in market relations; improvement of the financial and economic mechanism; promoting the solution of socioeconomic problems of territorial communities.

The State Program "Forests of Ukraine" for 2002-2015 is a program that defines the main directions of ensuring the balanced development of forestry, aimed at strengthening the environmental, social and economic functions of forests in terms of reforming agricultural enterprises, as well as the adoption of new land legislation.

State target program "Forests of Ukraine" for 2010-2015, the task of which was forest planning, restoration of forest management, forest statistics, forest science and education, project work.

Personnel and moral degradation should be overcome. We need a new economic policy, the ideology of creation [10; 11; 12].

Today it is impossible to say that in the forestry of Ukraine there is a sufficiently rational system of state forest management as the main product of forestry production, as the industry annually remains subsidized from the state budget. In addition, cases of economic abuse are often formed within it, which excites society and slows down the process of transition from centralized public administration to market-based management. During the formation of the organizational and institutional mechanism of forest production management it is necessary to take into account the external environment, economic and legal aspects, principles of formation (Fig. 4) of the system, which includes target, legal, management, information, planning and forecasting, controlling, development and production process. and sales of forestry products.

Consider the organizational and institutional management system of forestry production in more detail:

• the target system provides for the formation of the task for forestry production on the basis of balanced development taking into account natural and economic conditions;

• the legal system establishes not only restrictions on the operational use of forest facilities, but also the obligation of authorized state bodies for their state accounting, protection and preservation;

• control system is a link, element or set of elements of the forest production management system that affects the managed subsystem or its elements in the context of forestry;

• information system is a process of monitoring, analysis of performance indicators, planning at all levels of government - the main purpose of ensuring effective forest enterprises [13];

• forecasting system is the achievement of the optimal ratio of centralization and decentralization of forest management and forestry production; determining the feasibility of transferring part of the forest fund lands to communal, collective or individual ownership, taking into account the resource and environmental significance of the forest fund, as well as the peculiarities of the socio-economic and environmental situation in Ukraine; organizational and legal restructuring of the forest fund in order to gradually overcome the shortcomings of the existing distribution of forests [14];

Fig. 4. Organizational and institutional management system of forestry production

• controlling system - data acquisition, processing and transformation into information for management and decision-making, is non-standard, is designed to identify trends and patterns of phenomena and processes in the enterprise, helps to develop measures that ensure its viability. Thus, controlling is based on the system of cost rationing, determining the relationship between sales, costs and profits, the amount of time spent on production [15].

The interaction of systems and components are closely intertwined in the context of forestry production, in particular, at the management level:

• organizational component is aimed at a fuller consideration of forest-ecological, ecological-economic and socio-ecological parameters of forestry at all stages of organization and production;

• the legal component is aimed at forming the regulatory framework for forestry regulation, which is one of the most important circumstances for improving the financial and legal mechanism of state support of forestry in Ukraine in general and its component - forestry production [16];

• motivational component - increasing the efficiency and quality of logistics operations in the field of forestry and timber industry;

• financial and economic component consists of the impact of internal (negative) factors on the state of forest resources, the effectiveness of forestry and timber production involves determining the main types of damage from: death of undergrowth of valuable species in forestry; leaving liquid wood and cuttings; clearing of the estimated felling; changes in breed and age structure of plantations; reduction of efficiency of silvicultural production due to untimely care of silvicultural crops, etc. [17].

With the transition of the national economy to market relations, the mechanisms of the market economy began to differ significantly from the mechanisms of centralized national government. In forestry, organizational and legal principles of financial and economic relations should also be formed, which should correspond to the new political and economic course of the state, in particular such principles as: 1) organizational and institutional support of forest management - improvement of institutional support; combination of market mechanisms with state regulation; improving the tax system of forest use; transformation of organizational structure management of balanced forestry development; 2) continuous existence of forest cover - supported by a sample of individual trees or their biogroups; 3) conservation of biotic diversity - based on the constant maintenance of forests as ecosystems; 4) systematic - contributes to the balance of interests of the subjects in relation to innovative production processes; 5) complexity - determines the optimization of production of all types of forest resources. All the principles are reduced to a balanced use of nature in forestry production and full use of natural productivity of forest lands, taking into account their forest vegetation conditions for growing forest trees that correspond to them (Fig. 5).

Effective application of the principles of state forest management in the system of domestic financial and economic relations implies achieving coherence, purposefulness, reliable connection between the subsystems of the system of balanced forest management in general, public economic management and public management of forestry sectors in particular.

Thus, compliance with the above principles in the formation of the regulatory framework for forestry regulation is one of the most important circumstances for improving the financial and legal mechanism of state support for forestry in Ukraine in general and its component - forestry production. The implementation of such scientifically sound principles in the future will make it possible to revive the forest industry as a powerful direction in the economic system of Ukraine and rebuild it according to advanced foreign standards. This, in turn, will ensure not only the development of forestry production as an industry, but also the restoration of the social component of the village as a whole - employment of the rural population, creation of modern, dignified social infrastructure in the countryside and preservation and development of the Ukrainian people.

Fig. 5. Principles of organizational and institutional support for forest management

Conclusions

Based on the results of our research, we can state that forestry is a unique sector of the economy in terms of importance and types of products, which is subject to its laws. At the same time, the specific features of the studied industry leave a significant imprint on the conduct of forestry production, which makes it unprofitable for private enterprises. Therefore, the proclamation of three forms of ownership was hasty and economically unreasonable. We are convinced of the expediency of maintaining the existing state-owned enterprises under the conditions of revision of forest policy - at the centralized level and the implementation of measures to improve the efficiency of forestry production at the decentralized level. After all, the prospects for our future research are to develop an economic strategy for the development of forestry production.

government forestry management

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