COST-BENEFIT ANALYSIS OF ESTABLISHMENT OF SCOTS PINE, AUSTRIAN PINE AND SPRUCE FOREST PLANTATIONS

The cost-benefit analysis, which contributes to finding best solutions and helps in making decision on acceptability of treatment, has been used as an instrument in the assessment of afforestation impact on the environment. It has been established that a cost-effective investment into Scots pine, Au...

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Published inEkonomika poljoprivrede (1979) Vol. 60; no. 3; pp. 609 - 622
Main Authors Ratknic, Mihailo, Braunovic, Sonja
Format Journal Article
LanguageEnglish
Published Belgrade Balkan Scientific Association of Agricultural Economists 01.01.2013
Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt
Edition928
SeriesEconomics of Agriculture 2/2013
UDC: UDC:658.155:630*2
Subjects
afforestation
Agriculture
Cost benefit analysis
cost-benefit analysis, discount rate, afforestation, cost-effectiveness, financial analysis, economic analysis
cost-effectiveness
Crop Production/Industries
discount rate
Discount rates
Economic analysis
Exploitation
Financial analysis
Forest products
Forestry
Interest rates
Plantations
Prices
Production Economics
Timber
Urban planning
Wood
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Summary:The cost-benefit analysis, which contributes to finding best solutions and helps in making decision on acceptability of treatment, has been used as an instrument in the assessment of afforestation impact on the environment. It has been established that a cost-effective investment into Scots pine, Austrian pine and Spruce afforestation is viable solely on the basis of wood production. Wood production, depending on tree species and soil quality, can bear even slightly higher interest rates in the areas of good soil quality in comparison to previous estimates, which mostly ranged around 3%. In the areas of poor soil quality, the interest rates can drop even below the 3% rate. At lower discount rates, the break-even point is extended in time, whereas at higher discount rates, it is shortened. The length of production cycle performs an important role in determining the cost- effectiveness of an investment, particularly from the aspect of the relation between the length of production cycle and production purposes (type and quality of wood assortments that are produced). Based on the analysis of non-quantifiable benefits and costs, it has been established that the benefits surpass the costs, therefore, afforestation projects can be acceptable. [PUBLICATION ABSTRACT]
Bibliography:Review Article
ISSN:0352-3462
2334-8453
DOI:10.22004/ag.econ.158259