Organizational and Economic Principles to Improve the System Regulation of the Wood Market

Yaroslav Koval and Anatoliy Karpuk
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Yaroslav Koval: Public Institution "Institute of Environmental Economics and Sustainable Development of the National Academy of Sciences of Ukraine", Kyiv
Anatoliy Karpuk: National University of Life and Environmental Sciences of Ukraine, Kyiv

Economics of Nature and the Environment, 2014, 84-89

Abstract: In this paper it is proved that the modern timber market in Ukraine should operate on the basis of the following principles: transparency of information on all participants and timber market functioning results; administrative independence of the bidding process organizer from suppliers or customers or public authorities that manage their assets; free market pricing; fairness of competition in the timber market; the necessity to introduce automated means of transactions of purchase and sale of timber; full responsibility of all participants of non-competitive action during the tenders; priority of the interests of the domestic wood processing enterprises; regulatory coordination; increase of control over the export of unprocessed wood. It is revealed that the current organization of the market of unprocessed wood leads to its artificial shortages, formation of high prices, lack of trading transparency, mainly defends the interests of loggers. It is worked out the block diagram of the organizational and economic mechanism of regulation of the timber market, which involves the formation of separate markets for the wood on the stump and the market of unprocessed wood and a set of measures of state regulation (through the Ministry of Economic Development and Trade of Ukraine) and market regulation (by activating the operation of basic market laws) to achieve the set goals based on the combined use of a special set of economic instruments within certain forms of market relations (auction, competition, exchange). It is proved that the separation of the wood on the stump market will facilitate the development of market relations in logging sector and allow the redistribution of the regulatory functions of the State Forest Agency to the Ministry of Economic Development and Trade, having eliminated the conflict of interest of subjects of market relations. In order to facilitate the expansion and transparency of the timber market for each group of subjects, it is defined the list of priorities aimed at active use of modern information technology and new management practices, standardization and certification in accordance with international standards, improvement of policies and increase of control over the circulation of wood.

Date: 2014
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