Forestry sector financial assistance in the Finnish economy

In the forestry sector, financial assistance from public funds is traditionally used in order to alleviate e.g. market imperfections. Still, transparency of the forestry sector assistance is needed for evaluation purposes. If possible, these methods should facilitate also comparisons between industries in the same country and analyses between countries. Input-output tables are normally used in economics for analysing various industry-interdependent effects but their use can be extended to assistance analyses. The effective rate of assistance (ERA) attempts to quantify the incidence of government aid by industries. ERA is defined as the net assistance to an industry expressed as a percentage of unassisted value added of that industry. In the net assistance, the ERA method includes internal financial assistance and tariffs (border assistance). In this study, the input-output tables with supplements of financial assistance are employed in the ERA calculations. The sectoral assistance is compared within the forestry sector and between sectors for year1995 in the Finnish economy. Instead of the original definition of ERA, we calculate the Output ERA(to), as the gross and net assistance for an industry of unassisted output value of that industry. In addition, gross and net assistances by industries are calculated to respective labour hours. The Output ERA(to) percentages represented in this paper are subject to e.g. underlying Leontief-technology assumptions.