The Slovenian system of management of private forests has been increasingly showing its deficiencies vis-à-vis its European counterparts. Considering the large number of forest owners with small and fragmented forest holdings, unfulfilled felling potential and forest cultivation plans, many accidents at work in private forests, etc., it would be sensible to use the experience of Austria, where the efficiency of management of private forests has been significantly enhanced by promoting of business consolidation of forest owners and supporting rural development measures. These measures should be incorporated in the new national forest development programme and pave their way to the Slovenian rural development plan for the period 2007- 2013. This applies particularly to projects in mountain areas, where limited natural resources make the generation of income from agriculture more difficult than in flatland areas. The development of business consolidation of forest owners and stronger integration of forestry into rural development calls for a clear division of competences between the public forestry service operating within the Slovenian Forest Service and the forestry service run by the Slovenian Chamber of Agriculture and Forestry, and for the provision of conditions for their operation.