Economic analysis of JakMahogany plantation in Mirigama

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ECONOMIC EVALUATION OF KOTAKANDA JAK/MAHOGANY
MIXED PLANTATION
R.P.D.S. Chandani, Department of Forest, Sri
Lanka G.D.P. Gunawardena, Department of
Forest Environmental science, University of Sri
Jayewardenepura, Sri Lanka
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Introduction

• Forest plantation is the best alternative for
  timber requirement of country.
• Protection production and research are main
  purposes in FP establishment.
• Mahogany Jak mixed forest plantation plays mainly
  production purpose.
• Both species are an exotics, which are
  naturalized later on .
• Mahogany is introduced by Dutch in later part of
  18th century, an avenue plant in Jaffna district.
• Forest department used this species for
  plantations mixed with Jak ,Teak,Mesua etc.
  (Degraded Natural forest specially in
  intermediate zone)

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State (FD WD) (79,942 ha)
Private Sector (more than 6,000ha)
Man Made Forest / Forest Plantation (1.4)
Mixed
Monoculture
Teak, Eucalyptus,
Jak/Mahogany, Pine, Mahogany Eucalyptus
mix Khaya Teak/khaya Neem/khaya,
Mahogany/khaya
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Working Circles by Divisions
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Distributions of jak mahogany plantation in Inter
median zone
Main planting species under supervision by F.D,
2008
FORDATA F.D
GIS unit F.D
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• This plantations provide many direct indirect
  benefits
• Direct benefits
• Timber (Jak and Mahogany),
• NTFPs (Fuel wood, Medicinal plants,
  Binding materials (Rottan Bata),Edible Fruits
  (Jak,Goraka), Green Leaves)
• Indirect benefits,
• Source for carbon storage ,
• Provide the habitat to fauna flora ,
• Responsible for microclimatic stabilization,
  
• Provide recreation purposes Scenic values,
• Reduce soil erosion,
• Increase rain water infiltration recharge
  ground water table.

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•  

Water project
plenty with Jak fruits
Ground vegetation
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• Main Objective
• Carry out a cost benefit analysis for Kotakanda
• Jak /Mahogany plantation.
• Other objectives.
• Estimate economic value of various products
  provided by the forest plantation.
• ( a) Estimate economic value of NTPFs the
  adjacent community. (Local marketer price)
  
• ( b) Estimate of economic value of timber
  benefits provided by the forest. (mainly
  mahogany timber using by
• CIF value)

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Methodology

• Collect primary and secondary data to estimate
  economic benefits for Jak /Mahogany plantation.
• Primary data
• Household survey on adjacent 4 GN Divisions
  local market to forest plantation. (Pohonoruwa,
  Handurumulla,Kaleliya Pallewela and Palmadagama)
  Using a structured questionnaire.
• Target group was 90 house holders. Sample was
  selected by random sample method.
• Gather expert opinions from
• F.D. (SDCF, DFO, RFOs, BFOs in Forest
  inventory management)
• STC other related parties( Divisional
  secretarial, Grama niladary, Custom officers )

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Study area
Pohonoruwa
Handurumulla
Palmadagama
Kaleliya/ Pallewelaa
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• Secondary data
• ? Collected secondary data from Forest
  Department, State Timber Cooperation relevant
  agencies and published importations.
• Yield table,
• Inventory manual,
• Mahogany management plans
• Custom Reports statistics
• Conversion factors
• Other published und unpublished
• eg. Research papers, Thesis, to
  relevant this study

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• Data analysis
• Collected primary data
• Converted quantity of NTFPs components to
  monetary values (Local market price).
• Improved financial values to economic values
  using conversion factors.
• Converted timber volume to monetary values using
  import parity price (CIF).
• Analyzed all collected costs and benefits in a
  CBA frame work using a 10 discount rate (NPV,IRR
  and BCR).
• Done sensitivity analysis (20 cost increased,
  20 benefit reduced and both condition apply
  together)

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• Costs
• Plantation establishment cost (Enrichment
  Planting cost)
• Maintains cost (Nursery practices, Vacancy
  Filling, Thinning, Creeper cutting)
• Over head cost (FD)
• NTFPs extraction cost (Adjacent community)
• Benefits
• Direct - Timber (Mahogany )
• - NTFPs (Fuel wood, Medicinal
  Plants, Green Leaves, Fodder,
  Binding material, Fruits)

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Result of data analysis
Total per ha annual costs and benefits from
NTFPs
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(No Transcript)
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Total timber benefits for one rotation
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Findings

• 9 GNDs are surrounding this Forest Plantation.
• (Henepola, Palewela/Kleliya, Handurumulla,
  Hapitigama,
• Pohonnoruwa, Lindara, Palmada Idiparape)
• More than 75 villages are extracts fuel wood
  from plantation.
• Other utilities- Jak fruits, fodder, medicinal
  plants, binding material, water.
• Local community use natural water by streams
  origin from forest (for bath, washing
  ,agriculture and specially drinking purposes).
• Main income depend on agriculture. 5 of house
  holders are Government Private sector
  occupations.
• 68 sumurdi beneficiaries. Relatively low
  income generators are there.
• 99 house holders are directly or indirectly
  depend on this forest plantation.

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• Annual direct net benefits

• The highest NTFPs utilizing GND is Palmadagama
  and
• Kalelliya Pallewela is lowest consume GND.
• Fuel wood is main consume NTFPs component.
• More than 90 adjacent community depending
  natural water resources for their daily needs
  from the forest plantation.

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Result of cost benefit analysis
Result of sensitivity analysis
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Conclusion

• Annual NTFPs benefits is Rs 5,341 per ha per
  family.56 of NTFPs provided from fuel wood and
  21 Binding materials.
• Annually Rs 518,633 conserve to country national
  income by 1ha Mahogany plantation.
• IRR(26) is grater than discount rate (10) in
  economic analysis.
• NPV is positive at different discount rates
  (5,15 20) BC ratio grater than 1.
• According to the present study can be shown
  Kotakanda mix forest plantation provides high
  economic efficiency.

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Discussion

• Issues of Methodology
• Obtained data may not be very accurate, due to
  several reasons absence of elder people in
  families and unwillingness to give real
  information.
• There may be seasonal variation of NTFPs. (survey
  was done in March 2008.)
• Increased accuracy of estimation adjacent 9 GNDs
  are included in that sample.
• Estimate NTFPs and timber benefits based on
  several assumptions.
• Estimate timber benefits used in CIF values.
• Estimate only direct benefits provided from the
  forest plantation.

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Recommendation

• Policy reorientation.
• Empower forest dependent to adjacent people.
• Improve harvesting, storage, transport,
  processing manufacturing methods to NTFPs
• Improve technologies of utilization of NTFPs.
• Implement domestication and cultivation.
• Focus to research and development further
  indirect benefits and total economic values.
• Promote mix Mahogany plantations in small scale
  on home garden and private land.
• Enhance private sector involvement to planting
  Jak/Mahogany mixed species.

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References

• 1.Ministry of Forest and Environment (MFE)
  (1995). Forestry sector Master Plan, Ministry of
  Forest and Environment ,Battaramulla, Sri Lanka.
• 2.Pitigala and Gunathileke. 2002. Sri Lanka
  Journal of agricultural Economic .Volume 4. Part
  I,Pp 121-135.
• 3.J.H.Sandom S. Thayaparan ,December 1995,A
  Revision of the Inter rim Management Plan for
  the mixed Mahogany forest of Sri Lanka.
• 4.Subasinghe G.L. 2000.Economic valuation of some
  function benefits of Sinharaja rainforest
  reserve M.Sc. thesis of Forestry Environmental
  management.
• 5.Pearce D.W.2001.Economic value of Forest
  ecosystem. Ecosystem Health Vol.7.No 4.
• 6.E.J.Vitala Journal of Forest Economics
  12(2006)131-144
• 7.Village development planning document of
  Mirigama division -2008
• 8.Abeygunawardena, P. and Wickramasinghe, W. A.
  R. (1992). An Economic Evaluation of Non Timber
  Products of Hantana forest in Sri Lanka. Economic
  Botany Pp 183-190.

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Thanks