of the Biennial Meeting of the Scandinavian Society of Forest Economics

Forest holdings of sufficient size are one of the prerequisites for profitable forestry. This study will analyse the development in number of Finnish family forest holdings with affecting social, economic and political determinants. Firstly, a historical review is necessary. Secondly, a theoretical framework – based on economies of scale – with emphasis on progressive taxation effects is suggested. The major hypothesis to be tested in this study is that the major driver of parcelisation in Finland has taken place with respect to the population growth of the country. In Finland, the partitioning of land has been deregulated gradually in time, it was almost completely deregulated in 1895 and then fully in 1916. After that, political and economic factors have been important parcellation drivers. Firstly, land reforms were instituted in order to liberalise tenant farms in the 1920s. Second of all, came the WWII resettlement of the Finnish population during the 1940s and which extended into the 1950s. Finally, there were great structural developments in agriculture, migration and urbanisation since the 1960s. These three changes have each accounted for an increase of some 100,000 family forest holdings. The total number of independent and tenant holdings in Finland has been increasing for the last 250 years by an average of 8.6 % with an increase in population of 10%. The increase in the number of holdings has been greater than that of the population in times when partitioning restrictions have been deregulated significantly, land reforms have been topical or property taxation high