The article defines the priorities, principles and main provisions of national forest policy of Ukraine towards European integration. The main objectives and structure of the mechanism of transformation of ecological and economic relations in the forest sector of Ukraine is grounded. The main tasks of transformation of ecological and economic relations in the forest sector should be decentralization of the management system, budget savings and sustainability, sustainable development and ecological security, development of public and private partnership, and welfare of local communities. It justifies priority directions of transformation, which include the system of distribution of powers between central, regional and local levels, the financing system and fiscal regulation in the forest sector, powers and subordination of the organs of ecological control, the organizational forms of companies and associations, the institutionalization of communal and private ownership of forests. Necessary organizational and economic framework for their implementation should ensure the economic mechanisms of transformation of the system of state management of economic processes, financial-credit and fiscal regulation, economic incentives of the deep environmentally friendly forest products, integration of businesses and innovative and investment development of the forest sector, the Institute of ownership of forest land, the property rights of forest users and local communities.
The structure of transformation mechanism of ecological and economic relations in the forest sector is developed. It will allow the use of modern economic methods (de-monopolization and transparent competition on the timber market; economic incentives for deep wood processing; the transition to the new organizational forms of integration of economic entities; the empowerment of local communities and their executive bodies) and the instruments (preferential loans; target financing of large-scale projects at the national level; environmental insurance; transfer pricing; export and import duties; the state order; the state guarantees and subsidies), and to form an effective organizational forms of business entities in the forest sector.
It is concluded that transformation processes should apply to all spheres of economic activities in the forest sector, especially in the following areas: increased powers of the management bodies of the forest sector at the regional and local levels; simplification of procedures for land allocation by local governments to provide additional reforestation; coordination between the organs of ecological control and forest management to strengthen the relationship between the real state of forestry and the system of rational use of forest resources; the introduction of modern forms of enterprise and associations of enterprises at different stages of the reproductive process.
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