Forschungs- & Entwicklungsinformationsdienst der Gemeinschaft - CORDIS

Economy model

The research focused on producing a tool to help analyse the microeconomics of different management regimes of beech forests. The goal was to enable evaluation of the marketable and non-marketable costs and benefits. The fundamental economic state variables were data on silvicultural operations, wood prices and expected assortments.

Economic data were supplied from Denmark and Slovenia. Two types of theoretical sensitivity analyses were carried out using the model: Shifts in wood quality and the cost of leaving coarse woody debris (CWD). With regard to wood quality, the findings indicate that quality is a key variable to the profitability and can influence the stumpage price function dramatically. A change of 5 - 10 percent-point from lower quality to higher results in a stumpage price rise of 25-50 percent at the most. The large upside rise is due to a price premium on size and especially quality.

Deterioration has the same effect, but in the adverse direction. It can be explained by the relative frequency of the quality logs for large diameters. It is doubtful whether the quality will improve or deteriorate immediately after conversion from even-aged forestry to uneven-aged forestry and the impact will therefore most probably be a "sneaking effect" of the conversion. The immediate effects being saved regeneration cost and within short time a more even liquidity and improved flexibility.

With regard to the cost of leaving coarse woody debris, findings indicate that aiming for a quarter of the naturally present CWD (i.e. 25-30 cubic metres) would require around one cubic metre of new CWD per hectare per year, e.g. 10 cubic metres every ten years. In comparison with the results from employing a low-end wood quality scenario, this equals a loss in NPV of around 2,000 Euro, an annual cost of 40 Euro per hectare. This cost of leaving CDW is in the order of 5-10% of the total net present value.

Reported by

Forest and Landscape Denmark, The Royal Veterinary and Agricultural University
Rolighedsvej 23
2300 Copenhagen
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