Swedish Forest Owners’ Associations: Establishment and Development After the 1970s

Abstract

The context under which forest owners’ associations operate has changed dramatically since the first ones were established in the 1910s and 1920s. The purpose of this article is to describe the development of these associations after their establishment particularly since the financial crises at the end of 1970s. The diffusion and merger theories form a conceptual base. The annual reports of the associations are the main data source. The number of forest owners’ associations after 1,985 decreased dramatically and presently is only four. The consolidation can be explained by a wish to achieve increased efficiency through economies of scale and more influence on the wood market. After the financial crises at the end of the 1970s the number of members dropped sharply but has since then increased. Some associations have had significant financial problems. In the 1970s it became apparent that during economic downturns the relatively low proportion of equity made them vulnerable. Return on equity has, on average, during the 2000s been around 7–8 %. One problem for the associations is the risk that larger and more efficient organisations lead to increased “distance” between the associations and their members. Another problem is that the members cannot take advantage of the large value growth. Moreover, there is capital tied up in operations that do not really have any formal ownership.