In a move that is yet to be approved by the parliament, the Lithuanian government on Tuesday decided to streamline the management of state forests by merging the country's 42 forestry enterprises into a single state enterprise named Lietuvos Valstybiniai Miškai (Lithuanian State Forests, or LVM).
The last day of winter
© DELFI / Karolina Pansevič

Prime Minister Saulius Skvernelis said during the Cabinet's meeting that the proposed reform would ensure more efficient operations and more transparent public procurement and would help save budget funds.

"The enterprises are being depoliticized and made transparent. (They will) provide economic benefit to the state and ensure efficient forest resource management," he said.

Environment Minister Kęstutis Navickas said that the draft law would not pave the way for privatization of state forests or preferential treatment of large timber traders.

It is planned that the establishment of the single enterprise with 25 units will help save 10 million euros in the company's funds and up to 3 million euros in state budget money annually.

Critics say that the proposed reform is hasty and that it may lead to privatization of state forests. They say that once implemented, the reform will allow large wood processors to purchase forests at much lower prices and may ruin small businesses.

Some members of the Lithuanian Social Democratic Party, the Lithuanian Farmers and Greens Union's coalition partner, have criticized the reform, but the opposition Homeland Union–Lithuanian Christian Democrats have promised to back the government.

The government says that Lithuania must overhaul its forestry enterprises as part of efforts to join the Organization for Economic Cooperation and Development (OECD) in 2018.

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