multipurpose tree species research for small farms: strategies ... - part

For environmental protection, and to
produce sustainable levels of fuelwood for the
lime and ceramic industries, it is important that
fuelwood plantations be established to reduce
the rate of forest exploitation. The study of the
economic feasibility of such plantations
provides important information for decision
makers at all levels, ranging from individual
farmers to policy makers,
The overall objective of the study is to
determine the economic feasibility of alternative
methods of fuelwood production and marketing
for the lime and ceramic industries in
Ratchaburi Province. The specific objectives
are:
- to assess present and future patterns of
consumption and supply of fuelwood in
the lime and pottery industries;
- to determine the economic feasibility of
Eucalyptus fuelwood production; and
- to develop specific recommendations
for future research and development
strategies for Eucalyptus fuelwood
production.
Data Collection
The study began with a survey of fuelwood
consumption by interviewing all lime and
pottery factory owners. Systematic sampling
was employed in the interviews with fuelwood
entrepreneurs, fuelwood cutters and woodlot
owners. The data collected included the
following:
- primary data on type and volume of
fuelwood utilized by lime and pottery
producers;
- data on fuelwood marketing in
Ratchaburi Province, such as sources of
fuelwood for cutting, labor employment
system, transportation distance, pricing
system and price determinants;
- data on costs of Eucalyptus plantation
establishment from privately-owned and
state-owned plantations in Ratchaburi
Province and the Banpong Regional
Forestry Office;
- yield of 3-year old Eucalyptus
plantations under lx, 2x2, 2x4 and 4x4m
spacing from the Ratchaburi Species
65
Trial Station and yield of the 5-year old
plantation with 4x4m spacing at the Khao
gin Plantation of the Banpong Regional
Forestry Office; and
- secondary data from studies undertaken
by various agencies to be used in the
cost/benefit analysis of fuelwood and
lime production.
Data Analysis
Three criteria were employed in this study to
determine economic feasibility -- benefit-cost
ratio (B/C ratio), net present worth (NPW) and
internal rate of return (IRR).
A benefit-cost ratio is the total present worth
of the expected benefits divided by the total
present worth of the expected costs. Only
projects or technologies with a ratio greater
than 1 are economically justified in terms of
resouice use.
Net present worth (sometimes referred to as
net present value) is the difference between the
present worth of expected benefits less the
present worth of the expected costs. All
technologies resulting in a positive net present
worth are economically justified in terms of
resource use.
Internal rate of return is defined as the rate of
discount that makes the present worthi of the
expected benefits equal to the present worth of
the expected costs. Only investments having
an IRR higher than the existing market interest
rate are resource efficient (MacCormac 1985).
The preferred alternative is that which yields
the largest B/C ratio, the largest NPW or the
largest IRR.
Results and Discussion
Fuelwood Consumption
Of 32 lime factories in Ratchaburi, 29
factories used fuelwood while only three
factories used both fuelwood and coal. The
volume of fuelwood consumed by the lime
factories was calculated from the fuelwood used
at each firing, multiplied by the number of
firings peryear. Data were collected from 21
factories. The average number of firings per
kiln was 20 per year. The total volume of large
fuelwood sonsumed by the 21 factories was
121,400 m /yr. Calculating ftelwood demand on
that basis, the lime factories in Ratchaburi