CHAINSAW MILLING IN GHANA: CONTExT, DRIVERS ... - Fornis.net

Chapter 3. Timber production and tradeFigure 1. Comparison of operators’ sources of financing for their operationsself-financedcase study 1case study 2businessnetworkloans0 10 20 30 4050 60 70 80Source: case study 1, Obiri and Damnyag 2009a (n = 119);case study 2, Adam et al. 2007a (n = 76); multiple responses observed in both cases3.6.2 Production costsProduction costs for chainsaw operations include labour, variable costs and transactioncosts. Variable costs include the repair and maintenance of chainsaws,accessories, petrol and engine oil and miscellaneous items. Transaction costs involvepayments for trees to farmers, forestry officials, bribes to law enforcement agencies(task forces, police), payments at community checkpoints, compensation to farmersfor crop destruction and alcoholic drinks for chiefs. Reported costs varied from studyto study (Table 16).Table 16. Production costs and net revenue, two case studies*GHC/operationcase study 1 case study 2% ofproductioncostGHC/operationGHC/m 3% of productioncostlabour 98 25 625 192.71 44variable cost565 174.21 40**299transaction cost 75 215 66.29 15total cost 397 1,405 433.21gross revenue 485 1,621 499.81profit 88 22 216 66.60 15Source: case study 1 (Adam et al. 2007a); n = 35; case study 2 (Damnyag and Obiri 2009b); n = 89*scope of operation (volume of trees) is not clear; **variable cost computed as part of transaction costGenerally, labour costs involved payments to chainsaw operators, carriers/porters,spotters and loading boys. Damnyag and Obiri (2009) reported that the various costcomponents did not vary much across the eight districts they studied (case 2).Labour costs in the two studies varied substantially, however, ranging between 2527