Forest reform leads to the decline of small communities in Bukovina

Forest reform leads to the decline of small communities in Bukovina shutterstock
Maria Semenova

Woodworking assets are going bankrupt, and budget revenues have fallen threefold

In the Chernivtsi region, instead of stimulating the development of the mountainous areas' economy and strengthening local budgets, forest reform has led to a crisis in the industry and losses in communities. Authorities at various levels are shifting responsibility onto each other, but this does not change the situation—people remain unemployed, and settlements become subsidized.

This is discussed in an article published by BukInfo.

How to find those responsible?

A recent meeting between the heads of communities in the Vyzhnytskyi district and the head of the Chernivtsi Regional State Administration, Ruslan Osypenko, only confirmed the severity of the problem. According to the publication's team, the region's forestry sector is under the jurisdiction of the agro-industrial development administration and the regional development department. However, the head of the Regional State Administration stated that he was not competent in forestry issues, and the departments told the media that they had no influence on forestry, which is completely controlled by the capital.

Mass layoffs instead of prosperity

The reality in the region’s forestry sector is in stark contrast to the statements of Vasyl Honchar, head of the Podilsk Forest Office. As BukInfo writes, in promotional materials for the reform, the official assured future prosperity for forestry and the development of woodworking without job cuts.

One of the promises was to keep the woodworking plant in Serhiy working, which was an important employer for the community. However, reality is different – the asset is not operational, workers have faced mass layoffs, and the community alone lost 5 million UAH in personal income tax revenue.

Budgets are running dry

For the Putyla settlement community, the forestry sector was the main contributor to the budget. Now, according to BukInfo, of the 170 enterprises, mostly woodworking, only 10 remain. The biggest taxpayer now is the hospital, and 16% of the community’s budget comes from subsidies.

The reform also hit the Seliatyn rural community. Over 70% of its territory is covered with forests, where several powerful forestry enterprises once operated. However, after being “absorbed” by State Enterprise “Forests of Ukraine”, the Cheremosh National Park now pays more taxes than the assets engaged in logging.

Overall, before the reform, the forestry sector contributed 35% to the budgets of Vyzhnytsia district communities. Now, its share is around 10%.

Side effect of the reform

Forestry enterprises of the community ended up under the control of “Forests of Ukraine” with all financial and material assets.

When timber began to be sold through centralized exchanges, its price soared several times. As a result, woodworking assets located near logging sites cannot work with it – it is too expensive. As a result, a number of enterprises went bankrupt.

An additional “bonus” for “Forests of Ukraine” is preferential land tax rates, which further decrease community resources.

“This has led to the concentration of super-profits in the capital office of the newly-established forestry monopoly, and on the other hand – to the draining of production units on the ground and an increase in illegal logging, including the skillful 'under-the-table' use of digitalization tools in the sector,” the publication writes.

Ecopolitic reported that even before the reform, corruption in Ukraine's forestry sector was large-scale and systemic. After the reform, the situation did not change – in our weekly digests of environmental crimes, illegal logging, involving officials from forestry enterprises, continues to occupy a prominent place.

According to the State Bureau of Investigation, crimes committed by forestry sector officials in just 2025 caused the state losses amounting to 546 million UAH.

Yurii Bolokhovets, General Director of SE "Forests of Ukraine", himself featured in a case concerning illegal enrichment in 2025. However, he still remains at the helm of the forestry monopoly.

Related
Digest of environmental crimes: poaching worth millions and tree felling
Digest of environmental crimes: poaching worth millions and tree felling

Meanwhile, environmental prosecutors are returning the lands of national parks and reserves to the state piece by piece

Carpathian mega-resort denied forest land division, but logging is already under way
Carpathian mega-resort denied forest land division, but logging is already under way

The council was not even shown an environmental impact assessment, and local residents complain that their wells and outbuildings ended up on land to be handed over to the investor

In the EU, €3.4 billion in ETS revenue will be channelled towards decarbonisation projects
In the EU, €3.4 billion in ETS revenue will be channelled towards decarbonisation projects

According to preliminary estimates, their implementation over the first ten years will reduce emissions by approximately 290 million tonnes

The Ministry of Economy should step up its efforts with the EU to delay the CBAM — EBA
The Ministry of Economy should step up its efforts with the EU to delay the CBAM — EBA

The business community is calling for closer dialogue to ensure that Ukrainian exporters are not required to pay a carbon ‘levy’ during the war, and that these funds are subsequently channelled towards the actual decarbonisation of industry