We spotted the stand of the Silviculture Contractors' Association (MDVA) this spring at the “Forest Days” event in Tērvete, where we also arranged to meet for a short conversation.

We are still “young and green”, for the time being without much publicity and without a recognisable public face. If I can put it that way, we represent, or work in, forests aged between 1 and 20 years — we plant, we tend, we thin young stands, we mow grass, we protect and so on.

For now there are seven entrepreneurs in the association. By the next round of talks with “Latvijas valsts meži”, planned for November, I hope there will be three times as many of us, because each member has been tasked with bringing in two more. I am not one of the biggest operators, but it seemed to me the right initiative to put our cards together, to join forces in order to get things sorted.

Silvicultural work goes on throughout Latvia.

At present we represent a large part of Latvia, if we are talking in territorial terms – Lubāna, Valmiera, Ogre, Rīga, Saldus, Stende. Our association came about through the coming together of businesses that work and cooperate with, and serve, “Latvijas valsts meži” (LVM). As is well known, “Latvijas valsts meži” manages half of our country's forests. The situation with silvicultural work could be summed up briefly – every new year is different. There have been years when the situation with the procurement of silvicultural work was thoroughly unsuccessful, there have been better years, but, running into problems that affect almost all service providers, we began to talk, concluding that we needed to join forces and discuss both the form of cooperation with LVM and wider matters. The driving force behind all this was the feeling that our business interests were in some way under threat, that something was not happening quite fairly, or was happening in ways we did not understand. We talked about joining together for almost a year, and it did not come easily, until the larger contractors (the larger operators) realised – we do have to throw our lot in together and come to an agreement.

For example, when talking to LVM, until now we each travelled there separately, and it happened that we were not heard; we hope that an association, as a larger body, will be heard. The other thing that matters – our employees. At the peak of work intensity (which is usually at the turn of summer and autumn – in August, September), when forest tending, protection work and interest in young stand tending are all going on at once, we need as much human resource as possible, that is, hands to do the work. A great many of the people employed in this work have troubles or difficulties of one kind or another; for instance, they have accounts frozen or monitored by bailiffs, debts, addictions. But – these people exist, they work in the forest, and we need them.

Are we talking about frozen personal accounts or company accounts?

Personal ones. This issue surfaces in public discussion from time to time, with various figures mentioned, estimating that around 40 000 people or more in Latvia are employed illegally. Some of them may be abroad, some are certainly in the forest, and some are certainly in our sector. That is how it is. People with addictions are certainly irregularly employed and employable, because addictions “bring with them” a considerably more casual attitude towards paying maintenance or other financial obligations. The situation is not simple, but, I will stress it again, such people exist and we cannot ignore them.

What might the solution be? In our view, it would be necessary to broaden the concept of the seasonal agricultural worker and the application of that tax (which we would see as a tax on those employed in agriculture (and forestry as well) or those irregularly employed in agriculture), setting it at the level of the microenterprise tax – 25%. For example, a person with addictions who works for two weeks and disappears for two could be employed under such an arrangement, provided that bailiffs are not drawn into the process. The men who have until now been working illegally would move into the legal zone. In the association we have said that this would be one of our goals, because such people have been employed illegally for many years now and, slowly perhaps, but they ought at least to be brought into the grey zone.

Pulling it all together, the two main tasks of our association at present would be – to work with forest owners and forest managers, explaining our view of forest management and so on. It should be mentioned that matters of economising would certainly also be up for discussion, because, as is known, the austerity process will affect “Latvijas valsts meži” too. We can already see some changes; we shall have to see what follows, and that is what worries us. If we may draw a figurative comparison between the life of a tree and the life of a person, it looks as though we are now starting to economise at the expense of the nursery-school children – we can tend less often, we can protect less, and some things we will not protect at all. What then? Will the forest animals take that into account and do less damage? As is known, the prime minister is talking about economising and, consequently, about more money flowing into the state budget, and if savings have to be made in the forests, that will certainly affect us too.

Of course, our work does not make up the largest item of LVM's expenditure (that might be around 30 million), but we sense that protection work – coating leaders, spraying – is dwindling, since it looks like something you can save on.

What are the problems with the cooperation you mentioned?

Seen from the point of view of “Latvijas valsts meži”, the company wants to diversify its service providers, “acquiring” through the tender a larger number of businesses that carry out these services. The reality on the ground is somewhat different – Latvia has capable managers and organisers of work who can both organise and deliver excellently. Since there are set limits on how large a volume of work can be awarded to a single bidder, there are operators who take up risk diversification by setting up companies for a wife, a brother, a close associate and so on; that is how groups of companies arise, which LVM and the Competition Council in turn want to exclude from taking part in the tender.

There was a year when this situation was approached very seriously, but... in my view it ought to be acknowledged as a fact that a company with, so to speak, well-developed muscles is able to get the work done better than a very small operator. That is what we try to explain — that an inexperienced person in the forest should first be trained, “broken in”, and only then sent out to work alone... Something in this situation has changed: an absolute newcomer is no longer given 700 ha, but, say, 200–300 hectares.

What I want to say by this is that the diversification is often artificial, so that in practice the work is quite often done by a single operator who coordinates three or four related companies. If the work gets done and “everything is fine”, why are such artificial restrictions needed? What do they achieve? In our view, the limits should be raised if an operator is coping successfully with the volume in question. Being an entrepreneur myself, I know perfectly well that there are times when I would be ready to be a subcontractor if negotiations were more flexible; a rigid procurement, a rigid contract based on the procurement conditions, where no additional payment can be obtained for non-standard work and non-standard conditions, creates serious problems for the small operator, whereas the large one can usually balance the situation out somehow.

Are non-standard situations not covered in the contracts?

Very little and very rarely.

A wet summer, as we know, has greatly affected farmers; foresters too are complaining about the wet, and not only that.

I would agree, there is nothing to be cheerful about – the grass grows like mad, machinery gets bogged down, little can be done, conditions in the forests are genuinely hard, while contracts are fixed and nothing can be revised. The people actually doing the work use the expression – a hungry year.

A state of emergency has been declared in agriculture. Does that not affect the situation and the work in the forest in any way?

I will repeat myself: this year is not a typical one. We have not yet given any thought to whether something might be achieved or changed by making use of the state of emergency, and nor would I say that anything catastrophic has happened, because the work is going on, only much more slowly.

Recently, two years ago, there was a very dry summer; there was less work, it went smoothly, and you could earn quite well. That would be what you might call a balance.

How many companies are engaged in forestry work in forests of the age you mention (1–20 years)?

In connection with the tender announced by “Latvijas valsts meži” we see more than 200 companies; at the time the association was founded we estimated that some 1500 people might be employed in our sector. That is a very rough calculation. Understandably, we are closely connected with the logging contractors, the so-called undergrowth men who work with harvesters. If their volume of work falls, the undergrowth clearers apply for jobs with us. We felt that this year.

Have employment and tax matters been discussed with representatives of the Ministry of Agriculture?

I have already mentioned that we are a new association and that we work in waves, more or less – some issue comes to the fore, we deal with it, the next one comes along, we take that on, and so forth. With the Ministry of Agriculture we want to address the question of irregular employment that I mentioned. I would add (and it is a pleasure to say so) that quite a few of the issues that seemed to need raising even before we founded the association have already been sorted out. As they say, when we came together we concluded: “Look, this matter mattered to somebody else too!”

The third question would be about putting our sector in order, or cleaning itself up. In our view, that could be by way of PEFC certification. The first talks with specialists in this field have already taken place, and we concluded that our own readiness is not yet quite what it should be.

In inviting members into our ranks, I have also had a fair few refusals.

“Will you join us?” “I will see how you get on. For the time being there is not much point.”

Of course, one can look at things that way too, but in my view working together and defending common interests has to be learned; we can each stay in our own company and compete perfectly well, but there are also shared interests. Clearly, we are to some extent trailing behind others working in the forest sector, since many associations and societies have been operating successfully for quite some time. At the moment we are trying to fit into the wider group and we shall try to defend our interests.