Finland is the most forested country in Europe, and more than one in 10 Finns own a forest. In other words, forestry is a very popular investment among their assets. Source: Timberbiz
Why do the Finns invest in forestry – three forest owners have provided their take and it includes economic security, generational continuity and nature values.
What kinds of investments are forests? The general answer was: stable. The price of forest land has risen steadily over the decades, and forests typically yield an interest income of about 3–5%, says Kati Kontinen, lecturer in forestry and member of the supervisory board of Metsäliitto Cooperative.
“Forest estates are in high demand. No more land is produced, which ensures that the value of the forest is maintained,” says Ms Kontinen.
Forest owner Reija Asikainen considers forests an easy investment for a person interested in spending time in nature. For Asikainen, who works as an environmental consultant, it has been more natural to invest in forests than in a buy-to-let apartment, for example.
“Timely clearing, early cleaning and thinning improve the growing stock and thus the value of the investment,” says Asikainen. “These forests aren’t managed for money”
So how do people join the diverse group of forest owners? As a rule, by inheriting family-owned forest.
“Discussions of what to do with a family’s forest assets should be started with the children or other heirs well in advance. There may not be much interest in a forest estate inherited without warning, but a timely discussion may arouse interest in a completely different way,” Ms Kontinen said.
Thinking in advance also helps with tax planning. There are many ways to inherit: a sale, gift, and gift-like transaction all have different tax consequences.
For Ms Kontinen, a planned transfer between generations meant that she and her two sisters decided to set up a real estate partnership, which now runs the estate. She had already bought her first forest estate when she was 18.
“Someone else might have bought a car, but I had a notion that investing in forests was safe.”
Eemeli Hasanen, 22, also has experience of planned generational transfer: he became the owner of his family’s forest estate four years ago. In his day job, he drives a tip truck, and he spends his weekends and holidays working in the forest.
According to Mr Hasanen, running a family farm and managing the forests is a vocation. When he was at school, he spent his evenings and weekends in the forest helping his grandfather.
“I already knew as a little boy, when I sat on Grandpa’s tractor, that this was where I came from, and this was where I’d stay,” Mr Hasanen said.
“These forests aren’t managed for money but to provide well-managed forests for future generations.”
Forests are associated with so many memories and emotional ties. Some of them date back to childhood, and others, through stories, even to the childhood of grandparents.
Kati Kontinen, Reija Asikainen and Eemeli Hasanen all visit the forest not only for work but also for pleasure. The forest is a gym, a break room and a berry cellar.
“Yes, I do go to the forest every day. Sometimes I go horseback riding, sometimes I do a bit of clearing,” Ms Kontinen explains.
Commercial and recreational uses of forests are not mutually exclusive. Raspberries often grow on seedling stands, and as the forest grows, blueberries and lingonberries appear. Older, moss-covered spruce forests are great for camping and picking mushrooms.
Reija Asikainen says that the desire to take care of forest regeneration and biodiversity is more important than profit. For example, this is done by increasing the number of deciduous tree and retention trees. Retention trees are trees that are allowed to grow and eventually decay in the forest, thus providing habitats for many species.
Approximately 25,000 species live in Finnish forests, and a fifth of them depend on decaying wood.
Wood trade statistics alone cannot measure the value of a commercial forest.
“We should stop and think about all the things that are made of wood and the products that can be replaced with wood – plastics and fossil fuels. This is also an important issue for many forest owners,” Ms Kontinen says.
