Effect of costs incurred on the development of non-productive forest functions on the economic situation in forest districts in the Regional Directorate of the State Forests in Krakow

The State Forests provide financial support, mainly from funds obtained in the sale of raw timber, for activities undertaken to increase the potential of the social and ecological forest functions. The study aimed to categorize and analyse costs incurred by forest districts in the Regional Directorate of the State Forests in Krakow (RDSF Krakow) in the years of 2005-2009 on the development of selected non-productive forest functions, particularly nature- and forest-related education, recreation forest management and nature protection. The effect of costs falling within the above mentioned categories on the financial situation of the forest districts was also assessed. Empirical data were obtained from financial statements, reports of the Information System of the State Forests, as well as interviews and a questionnaire survey answered by the Forest Service. Direct additional costs were acquired from the accounting records. Indirect and alternative costs were deduced i.a. from results of the questionnaire survey and calculations of the raw timber volume left in forests. In the studied period, the incurred costs and potentially lost profits associated with the development of non-productive forest functions systematically increased in forest districts and attained over 18.8 min PLN. In the costs structure, the lowest share was observed for direct additional costs (tab. 1). Indirect costs, which were recorded, however not assigned to specific account items, covered 31%. The greatest share of expenses was noted for alternative costs. In the considered period, most forest districts of RDSF Krakow showed a negative financial result (tab. 2). The adverse financial situation in the forest districts was worsened by additional and alternative costs of development of non-productive forest functions. Important financial consequences for forest economy resulted mainly from implementation of nature protection tasks (additional and alternative costs of nature protection accounted for 79% of expenses incurred on fulfilling non-productive forest functions). Additional costs of the development of non-productive forest functions covered 1.6% of total expenses. Value of unharvested timber amounted to 1.9% of income from sale of raw timber. There is a need to emphasize activities undertaken by the State Forests within the development of non-productive forest functions as well as to adjust the cost accounting system in order to facilitate calculations of indirect costs and potentially lost profits.