I_ILIPPI_-_ INStiTUTE
FOR Dh"V]__
STUDT_"_
_,brkingPaper 84-03 POLICY ISSUES(3_CEP_ERCIALFOREST M__ by CerenillaA. Cruz and Marian Segura-delosAngeles
POLICY
ISSUES
ON COMMERCIAL
FOREST MANAGEMENT*
by
Cerenilla
A. Cruz
and
Marian
Segura-de
los Angeles**
INTRODUCTION The Philippines
expects
to permanently
maintain
some forty
six
per cent
(46%) of the country's
total
land area of thirty million
hectares
under permanent
cover
(Cortes,
this, approxlmatelysix or degraded vegetative
forest cover
forest million
lands need
(PREPF_
hectares
1979).
of inadequately
to be restored
with
To achieve stocked
appropriate
1930).
Paper presented during the seminar-workshop _Economic Policies for Forest Resources Management _' sponsored by the Philippine Institute for Development Studies on 17-18 February 1984_ at Club Solviento, Lagunap Philippines. _ Assistant Professor of Forest Resources Management, College of Forestry, University of thelPhilippines at Los Ba_os and, Research Fellow, Philippine Institute for Development Studies_ respectively째 The able research assistance of Lota Almira is gratefully acknowledged째
- 2-
Thusp forest focused
on:
system;
(b) the conduct
agro-forest
Philippine
focuses
forests
and renewal Speclfically,
forest management
welfare,
OF COMMERCIAL
The implementation aged, dipterocarp system
defective injured
(SLS).
and forest
priorities
residual cover.
of commercial
consideration
for research
The Natural
yield management
the removal such
point
and the tree plantatlons.
of the country
Here,
of
the forest
from the private
w-Ith simultaneous
of sustained
trees is prescribed
and healthy
of timber
forests
the management
the economics
FOREST MANAGEMENT:
forests
interested
it deals with
initially
it hlghllghts
after which
(c) the
farms, and
and other
surrounding
are discussed
logging
by government_ tree
have
of forest occupants.
and hence_
problems
of natural
implications
of societal
on issues
schemes
of the selective
tree plantations,
and (d) the management
_ommerclal
destruction
logging
enforcement
of reforestation
of industrial
This paper
ECONOMICS
and conservation
farms by forest concessionaires
indlviduals_
of view.
renewal
(a) the strict
encouragement
Policy
resource
are suggested.
Forests
for the uneven-
is through
the selective
of mature,
overmature
that an adequate
trees are left behind
number
and
of un-
for a future
crop
-3-
The immediate dlpterocarp cut which
goal of the SLS, accordingly,
forestunder
regulation
is comparable
It has three principal inventory,
and
of insuring
in volume phases:
(3) timber
and quality
of trees
inventory,
evaluation
which
is conducted
in avoiding
damages
mine the condition, The healthy
of whether
to marked
trees.
in the next given
ment
to improve
isdone
The licensees market
conditions
are, however, a volume hibited
of healthy
the number_
to maximize
growth
net returns
In the an
exercised
care
is done to deter-
residualtrees
that
from their
left.
the volume
The timber
and quality
stand
allowable
at the end of the prescribed
cutting
cycle
to
improve-
of the growing
fluctuates
cut째
Relogging
areas
is permitted
of the region
where
stock.
with
investments.
by the fact that they are only allowed
and the second cut on the logged-over
is located.
operations,
to cut a volume
that does not exceed their
concession
damages.
for predicting
cycle.
is a means
crop and seed
Also this phase
cutting
are encouraged
constrained
from logging
be the basis
be harvested
marking
or not the loggers
sizes and number
trees left will
Tree
logging
cut.
(2) residual
for the future
is done after
cyclic
to the old growth
improvement.
trees that shall be left and protected residual
to have a second
(i) tree marking,
stand
the needed number
in order
is to put the
They to cut
is proonly the
-4-
Economic
Efficiency
Economic the systemls (Rebuglo, within
studies
conducted
financially
1979).
on the SLS in the seventies
sound
Net return
1.70-2.56.
for depressed
of the SLS
in the two logging
per peso investment
A later recalculation
log markets
yielded
lower
studies
have the following
sidered
only one cyclic cut instead
sustained
yield concpts
shortcomings,
and,
set-ups
of a perpetual
(b) the third phase
to be
(1980) which
of 0.2-0째7
however:
only.
allowed Both
(a) the analysis series
that
analyzed
was calculated
by Cabanayan figures
indicate
con-
of cuts under
of timber stand
improve-
meat was excluded.
A more recent totality.
Three
study conducted
logging
for site differences consequently9
areas
which
revenue
by Cruz
in the country
influence
and costs째
yield
The main
beneflt-cost
ratio, which
appropriately
time period
and discounting
effects째
factors
considered
(1982) analyzed
in the study.
were
examined
and logging criterion
takes Figure
SLS in its to allow
conditions,
and
used was the
into account i illustrates
the long the specific
-6-
Initial
assumptions
made
include
the following:
(i)
The analysis period for the study areas is the length of their respective cutting cycles.
(2)
Future growth of the untreated stands will be the same as that during the observation period.
(3)
Expected mortality is 25 per cent.
(4)
Yield in treated stands (or stands receiving TSI) is 20 per cent higher than the untreated stands째
(5)
The cost incurred in practicing the selective logging system is the same as the cost of operation of the logging firms in the study areas,.
(6)
Costs and prices analysis period.
are constant
(7)
Rate of interest 18 per cent.
for the use of capital
(8)
Timber marklng_ logging and residual inventory of a given working unit or logging setting is done in the same year.
The volume
during
of the first
cut(flrst
areas was taken from the interview second
selection
cut was dete_ined
the data from the Continuous Appropriate
statistical
in the analysis
the analysis
Forest
within
the
cyclic
data but_the
is
cut) for the study volume
for the
by means
of projections
Inventory
(CFI) plots
and forest biometry
of the data.
period
procedures
using of FORI.
were used
-7-
To determine following
whether
conditions
the system
were
is economically
efficient,
set;
i.
The analysis period for each study area is its cutting cycle, that is 35, 40, and 30 years, for Areas I, II and III, respectively°
2o
Costs included in the analysis are those incurred in the aforementioned activities. The data obtained from the logging firms operating in the study areas were assumed to be reflections of the opportunity cost of the resources used in following the selective logging system° The logs produced by the system were valued at 2650 per cubic meter_ costs and log prices were based on 1980 levels°
3o
_
By practicing the selective logging system, the logger is allowed to cut the harvestable volume at the end of the cutting cycle. The harvestable [_velume is equevalent to the permissible cut°
Benefit-cost which
analysis
o_ the average,
computed
using
is 15 hectares
for a logging
in area°
the formula:
n B:/C
was conducted
,,
l t=o
B
n
C
t (i + |)t
t t-o
(i =
set-up,
The B/C ratio was
the
-8-
where: t; C t
B/C is benefit/cost is cost incurred
the length
logging
at year
of the cutting
The benefit set-up
ratlo_ B
cycle_
t_
I
and
t
heavily
the present
returns
comprise
value
net worth in Table
of 3.47,
from the first of benefits.
at year
rate_
is O, i, 2, 3째.., n
in all areas as presented
it is the revenue
received
is the discount
cost ratio and present
Areas i, 11 and iii have B/C ratio However,
is benefit
t
2.66,
cyclic
n
is
years.
for a 15-hectare i showed
that
2.37 respectively째 cut which
For all the areas,
at least 99 per cent of the values
influence such
of revenues.
- 9-
Table
i
BENEFIT/COST RATIO AND PRESENT NET WORTH FOR A 15-flECTARE LOGGING SET-UP, ALL AREAS
AREA
BENEFIT/COST RATIO
PRESENT NET WORTH (Pesos)
Area
I
3.47
Area
II
2.66
900,805
Area
III
2.37
1,147,102
Source:
Cruz
(1982).
21,178,536
- i0-
Economics
of TSI
TSI is a component such, should phase
in the selective
not be evaluated
in the system_
separately.
an exploration
why this is not performed
logging Since
system
this is a neglected
of .the economic
in most logged-over
and as
explanation
forest
of
areas was
conducted.
It was assumed
that TSI is a silvlcultural
logger may or may not perform.
Thus, the benefits
TSI is done are compared
to the benefits
performed
areas.
volume
in logged-over
of permissible
In arriving benefits
derived
of economic
first cyclic cut were sunk values not do TSI째
using
relative
arise
from the greater
discounted
the sarae rate of discount
efficiency.
excluded
Costs
stands. costs
of whether
and
used in the
and revenues
from the TSI analysis
to the question
it is not
cut from the treated
the incremental
that a
and costs when
and costs when
The benefits
cyclic
at the B/C ratios
were
determination
second
operation
since
one should
in the they are do or
- ii -
Theanalysis has the highest and Area
that among the three
B/C ratio (1o43).
III has 0째62.
explained benefits
showed
in the distant the magnitude
These
in the ratios
on the TSl.costs indicate
areas, Area
could be
and the incremental
that an increased
future ,, _ .:_/ may not prove of the cost of obtaining
I
II has a B/C ratio Of 0.44
The differences
by the differences due to TSIo
Area
study
harvest
to be desirable
it during
cut
considering
an earlier
point
in
time.
Sensitivity
Analyses
Since there was a need to explore uncertainty the measures
surrounding
the values
of economic
basic assu_ptlons
efficiency
in the study,
of the parameters as well
sensitivity
In each of the study areas, all possible were
evaluated:
annual
(a)
increment
40 per cent_
(c)
20 and 30per
(PAl) of diameter_ variations
rate
analysis
combinations
cent decrease (h)
stands;
from 18 to 24 per cent;
(f)
(d)
increase
derived
of the
was conducted. of the following
rates
second decrease
(e)
for
in the periodic
mortality
from _650 to _500 per cubic meter_
of
as violations
in the permissible
+ i0 per cent over the untreated product
the implications
cyclic
up to
in price
increase
in truck
of 30 and
of the
in interest
hauling
distance
-
12-
+ 25 Km. and + 50 Km. over the average firms that provide of + i0, +•20 phases
interest
ratio° while
in negligible
in price,
analyses
given
rate and haullng
the second
Likewise,
increased
other factors
All these•are
were
depicted
costs
cyclic
or longer
2.
in
But,
cut conditions
the untreated
affect
held constant
that variations
of cuts over untreated
(PAI,
stands),
cost_
the B/C ratios.
per cubic meter
in Table
in the different
in the B/C ratios.
cut-over
dlstance,
lower than _650
of the
variations •in the cost
showed
increase
changes
rate_ and the per cent
A price
(g)
distance
system.
rate and percentage
resulted
mortality
logging
of the sensitivity
PAI_ mortality
variations
and,
hauling
and + 30 per cent of the cost incurred
of the selective
Results
stands
the cost data_
truck
decreased
truck
the B/C
hauling
also lowered
distance,
profitability.
- 14 _
Implications
and Prelimlnary
The Cruz study showed feasbile
Conclusions
that the selective
for the areas examined,
were not achieved.
value
constituted
The factor which
of the net revenue
only a very
the revenues.
into the future, present
heavily
from the second
its value
cyclic
is much
the PNW in
cyclic
cyclic
of the present
when
cut.
The
cut
value
cut is made much
reduced
is
capacities
influenced
from the first
small portion
Since the second
system
even if full logging
the study areas was the net revenue present
logging
of all
further
reckoned
at the
time.
The insignificant cut has an important forest.
influence repercussion
If a licensee
the residual
conformed
stand could provide
of the net returns on the continuity with
horizon,
to net returns
that are received
for returns
in the distant
future
logical
than the cut
prescribed,
of a logger.
However,
more weight
in the present
would
and less cyclic
only from the first A first
from the.
system,
cuts.
(the one from the second
of the net returns
objective
logging
for the next harvest
be attached
be a very
of harvest
the selective
for a logger who has only a short planning
Thus, the maximization
from the second
cut).
cut would
cut that is heavier
that is, the case of overlogging,
would
reduce the
- 15 -
residual
stand that provides
the objective
Hence, feasible,
of sustained
although
phase
cost and revenue
date, and revenue to liquidate there were
much
logging
found
In this case,
from TSI are incurred: Therefore,
a rational
on harvestable
to be
to be economically
This was due mainly
cut all the commercial
no constraints
cut.
system was found
of TSI wasnot
later.
at the first
cyclic
from the forest may not be realized.
in the areas examined.
in time when
able
yield
the selective
the subsequent
attractive
for the second
to the difference
cost at an earlier logger would
volume
tend
in an area if
cut such as the annual
allow-
cut regulations. The length of the cutting
licensees
on some silvicultural
a 25-50 year cut before required
tenured
logger
cycle affects and management
is not allowed
the end of the first
silvicultural
at all be practiced
treatments
by a rational
concerned
with
and, with
some desirable
of the forest.
cutting
improvements
licensee
in quality
biological
of the
prescriptions.
to do the second
cycle
needing
thedecislons
of 25-30
Since cyclic
years,
the
a cost outlay may not unless
he is also
of the products
and environmental
forthcoming attrlbut_s
- 16 -
There
is a need,
rules and regulations variables yield, Also,
therefore, relevant
to be examined
diameter
continuity
cycle,
the study dealt
to areas with
similar
conditions
in the logged-over
not on a logging
forest
Related
studies Here,
appropriately,
charges
concessionaires. externalities
analyses
set-up basis.
be dealt with more as taxes_
similar
could be more
cut.
effects
of higher
results
may be
cut, stocking
growth and cost conditions,
conducted.
Butt
for awlder
should be done on a concession tenure
along with
effects
and
to be evaluated.
old growth
and the like, which
Moreover,
allowable
three areas,
areas, diameter
up to the range of sensitivity range of application,
in cut have
average
the growth
of TSI on growth
from the forest,
only with
study of the
Among
and the annual
of harvest
applicable
larger
are the effect
cuts or other prescriptions
Although
an in-depth
to the licensees.
closely
length of the cutting to ensure
to conduct
of scale
appropriately
and
and area regulations
could
other
such
considerations
are collected
from
(dis)economles
accounted
as well
as
for by researches
on
areas.
Issues and Research
An earlier alternative
Needs
study by the same author
management
schemes
for a given
advantage,
from the firm's viewpoint,
instead'of
maintaining
alternatives
which
a natural
are presented
(Cruz, 1977) which forest
area point
of establishing
stand. in Table
values
this.
into
out the
plantation
The net present 3 indicate
looked
forests for such
- 18 -
Another
alternative
seems evident
which
from the observed
rules is that of clearcuttlng 1982 Cruz study implied timber
perhaps_
implemented
the forests.
to SLS was found
that clearcuttlng
from the private
then that despite
opt for 'losing'
the system
of license),
protection
hort run when logged-over speculators_
of residual
licensees
to practice
public
viewpoints
need
because
space.
Thus, should
natural
forests
even It is, being
of loggers, as a long-
the business.
forests
which
of timber is
to be evaluated
more preference
becomes
worse
in the
loggers_
kalnglneros
and
consequences__
from both private span across
be attmched
to maintaining
reasons,
.........
of the unsecured
externalities
and posterity
the in__
detrlment@lec61oglcal
of forest
for ecological
to be
point.
forestry
are cancelled_ .... Encroachment
leads to even more
the
of punishment
a number
areas which may be done by illegal
Such alternatives
would
vantage
Another problem rel a_ed t0 the _erha_est .................................. adequate
If
for the firm not to practice
those who do not intend
term venture,
violation
or liquidating
(i.e., cancellation
particularly
of forestry
expect
profitable,
no wonder
widespread
and_ the adherence
then one might
appear much more
yet but which
a tendency
stand improvement
profitable,
has not been studied
studies
and time and
on
- 19-
•the corresponding Such researches of stumpage_
system should
(b)
generation,
of incentives
simultaneously
forest
(c)
should
taxation
the effects
be given high priority.
investigate;
for national
of international
(a)
the valuation
and local trade
revenue
concerns,
........
more
generally,
(d)
the system
for enforcing
and, .........
forest conservation
prescriptions.
AS very often •noted, has been inadequately considered
with
estimated
its proxy.
to be insignificant respect
the value
relative
to output
in site
underpriclng
of the resource
in wasteful
use of the input
Both Thus,
a recent
for Philippine
at piloting
Development
because
charges
while
application
(NRMC, 1980) its progress
value
(or stumpage)
and taxes are have
(Table 4) and,
conditions.
rents;
as well
exploitation
(Serna, 1974) has been quite
should
that
as a tendency
for
concessionaires).
of forest
the stumpage
the methodology
inflexible
this results
of even the inefficient
Corporation
tended
It should be noted
to excessive
(i.e., timber)
and destructive
attempt
Resources
particularly
leads
(i.e., proliferation
cause faster
Natural
if forest
timber
Such fees paid by concessionaires
to varia_es
overcrowding
of standing
resources.
appraisal
system
be given more
by the
support,
has long been investigated and positively slowo
endorsed
s
- 20 -
......._
..
......
k
" '--...... ,_
...... <
A related
domestic
problem
marketso,Prlce
the profits
from
differences
logging.
(e.g°, about individual quicker
is. the disposal
Along
firm's
gains it is no wonder
of logs for the foreign
in both markets
with
the influence
log export
quota)
then that recent ...
volumes
of logs being iliegally
exported,
,. study of the costs and benefits "Needless to...say;-the study - _.............. - .......... considerations,
such_as
• .••
•
•
•
on wood-based
affect
of uncertainty
and the lure of
reports -..
indicate
. .............
s_Indeed, a more
large
..._
intensive .............
of the log export ban is in order.
should
economic • ..
as impacts
naturally
......
or
take into account a wide • .... • .• • and administrative :
industries
....
-
-'.--......... ,........ ,..
range of
feasibllit)as .....
and the envir0_men_t.
•
well
- 21-
Table
CHARGES
Average Charged
4
AND FEES OF EXPORTED
Amount (_/m3)
TIMBER
Price of Exported Timber (_/m3)
Shares of Charges and Fees to Price
1965
1.85
94.0
2.0
1970
4.75
150.5
3,2
1975
14.45
216.7
6.7
1982
30.00
842.6
3.6
- 23-
are bound to be significant becomes
particularly
in the development
and should
important of a region
uniformly
examine
policy
conducted
in such a manner
when
also be evaluated.
the role of forest
is studied.
Here,
tools such as local
This
resources
case studies
taxatlon_
that some generallzability
need could
which
to be be done
â&#x20AC;˘n the fuÂŁureo
All these imply and costsassoclated on private
with
and social
on Intergenerational responsive
policy
PLANTATION
FORESTS
Thus,
the need
to identify
natural
concerns, equity need
forest
national
of benefits
schemes.
and local priorities more
fully
Effects and,
for more
formMlation.
forest management
few studies
have been
well
as their significance
were
done on the PICOP
ventures°
mangement
to evaluated
Plantation
the nature
the incidence
conducted
on their
on the social
tree farming
of pre-project
is relatively
feasibility
private
scale.
project_ studies
recent
more
in the country.
feasibility
The earliest recent
of proposed
as
studies
ones were
in
tree farming
- 24-
The PICOP Tree FarminKProject
The PICOP tree farming inputs well
and technical
knowhow
as the assurance
Since the project the company
of a ready market
minimal
_LindaJao'sstudy
is influenced
showed
additional
by the availability of loans
education
seemed
before
these levels were
otherwise; cited:
the gestation
period
The economic by Table 5 which cent
reached
meant
feasibility
was obtained
from both private
to management
and non-
participation
was used as collateral
education
faster
levels
as well
of
or income
participation
the following
and slower
constraints as impatience
were about
trees.
of the PICOP
project
from a more recent
tree farmers.
and public
on infrastructure.
(b) threshold
- higher
land and manpower
of growing
of the participating
sensitivity
evident
buyer.
own tree plantatlonj
(a) initial
from the DBP_
as
as the major
participants
land which
(e) for non-partlcipants,
lack of suitable
PICOP_s
results: of
PICOP
project
of
tree farmers
_nvestment
(1978) on PICOP
by those who availed
with
to augment
the following
and income
involved the provision
to the participating
was intended
incurred
participants
project
viewpoint,
practice,
is depicted
study
The figures
on 20 per
sh_
as well as depict
wage rate,
and yield
profitability the project's estimates.
Tab]e
• _-
PROFITABILITY 0_" PICOP TREE FARMING: SCENARIOSOF ASSUHPTIONSFOR.COST ANO.BENEFITS
Scenario
Si Iv| cultura! Practices
1 2 3 4 5 6 7 8 9a b IOa b I |a b 12a b 13a b i/_a b 15a b 16a b
Dal !y Wage " "Rate .........
prescribed; prescribed prescr i bed prescr{ bed actua I actual actua I actual prescri bed presc ri bed prescribed prescribed prescribed prescr | bed prescribed prescribed actua | actua] actual actua] actua I actual actuai actual
Source:
a/Figures
presented
Hyman (198I),
Boundary of Analy
Internal •Rate . of Return (_)a/
250 200 250 200 250 200 250 200 250 250 200 200 250 250 200 200 250 250 200 200 250 250 200 200
tree-fan t tee- fan tree-fan t tee- fa rl t ree- fan tree-fan t ree-fa n tree-fare society society society society society society society society society soc rety society soc |ety society society soc iety society
17.9 9.6 I. 3 10.0 31.2 21.6 12.4 0.2 | 7, 9 22,0 9.8 ]3.7 I0,8 14.7 I ,9 5.5 21.9 25.9 13.7 17.5 16.0 20.0 6.9 1] .0
_12.60 12.60 17.00 17°00 12.60 12.60 ! 7.00 17.00 12.60 12.60 12.60 12.60 17.00 ./.uv ! 7.00 i 2.60 12.60 12.60 12.60 | 7.00 17.00 | 7. O0 17.00 . . . .....
Note:
Y_eld (m_/ha)
,............. i
by Hyman were rounded up for
Tables
1 and 8.
.
.......... ,
simpl|c{ty.
i
i
- 26-
From the private when
wages
practices_ likewise lessons
nevertheless
silvicultural
the project
is important
(a) the need for financial of the original
size_
and
households
model
(c) the need
In addition,
on for a
the project
of the area could not
the participants,
experienced
actual
to be viable
some of the more
returns;
of tree loan
that the poorest
income class_
Related
(b) adoption
appears
concerns,
(1981) summarizes
to allow for earlier
re-evalutation
participate_
who were
increases
in their
mostly
from the
income.
Studies
As earlier unique
Hyman
under
about the PICOP venture:
was such
middle
the project
to societal
for harvesting;
agro-forestry
design
according
feasible째 learned
periodic
of view,
are lower than _lT/labor-day, viewed
assistance
point
discussed,
due to its pioneer
existing
tree plantation
tothe
the following
and processing
and processing in the area,
reforestation aspects: facilities
experience
nature,, its being
of land for its participants째 relevant
the PICOP
Thus, needs
may be considered
part
complex_
of an already and the availability
more complete of denuded
the establishment and, involvement
studies
areas
should
of infrastructure, of the poorer
which
are
include marketing
households
- 27-
With respect looked
to utilization,
a study by Meimban
into alternative.processlng
plantation
into firewood,
(dendro-energy)o discount
production, divergent
charcoal,
The benefit
rate were
of the products
cost
as follows;
the final decision
was to be processed
ratios obtained
ipil-lpll
ioi
at 12 per cent
production, Since
these
on how the ipil-lpil
would have
of a giant
for example,
or electriclty-generatlon
firewood
1o2 and dendro-energy,
(1982),
to rest on other
1.06; ratios
plantatin
criteria
charcoal are not very products
such as
local basic needs.
A related
concern
would
be the market
and utilization
stages.
Where
the industry
or monopolistic
pricing
the local communities because
tends
These
of the large scale of industry or even host
In the case of involvement the shifting the factors
cultivator, leading
(19B1) who
expect higher
returns
found
to be monopsonlstlc at least as far as
are bound
operations
of the poorer
studies
A preliminary
at the harvest
to be significant
relativeto
the size
region.
to the integration
developmentprocesso by Corpuz
more
tends
to be inequitable,
are concerned.
of the host province,
structures
need to be conducted of upland
attempt
residents
at this was
that a traditional
from his upland
households,
shifting
such as to ascertain into
the
conducted cultivator
farm than from establishing
could a tree
- 28-
farm of the PICOP influenced
by the effects
Industrial
As a result giving
to tree
been granted plantations
Tree
as leases.
material
requirements
are granted
i0 hectares,
which
incentives
(Annex Table
Table
6 shows
and which of wood
for a minimum
and tree crops_
of revenues
largely
and costs which
of discounting.
the majority
i00 hectares,
again
FarmingPKojects
farm projects
composed
made were
in the timing
of the various
at least
presented
The calculations
by the difference
was magnified
Current
type.
are planted
plants.
of I00 hectares
and are to be established
do not include
projects
hand,
for combined cover
cover
for the raw
Agro-forest
farms agriculture
a minimum
for tree crops.
under
tree
each of which
to tree crops
the new Social
is
area has
in 1981 industrial
of such leases
tree farms, on the other
the government
3), a considerable
that
processing
areas
which
area of
The figures Forestry
Program
focus on the uplan communities. A partial
llst of the approved
in Table 7 for discussion species
are included
longer gestation
purposes.
industrial
It may be noted
in some of the projects_
periods.
tree farm is presented that hardwood
these also involve
Table INDUSTRIAL TREE PLANTATION, TREE FARMAND AGRO-FORESTFARM LEASES IN 1981 ---
•
•
i
|l
,. .......
Industrial
'L
ii
Source:
116,894
105
11,110
19
12,220
Farm
j
i
BFD, Philippine
J
i
-
24
148 =ill
i
....
.Tree Plantation
TOTAL i
i
Area • (ha.)
_
Tree Farm
|
w±
.Number i
Agro-Forestry
i
•
i
Forestry
ii
I_0,22_ i
Statistics,
::
1981.
•
_:
=ll
Table
7
EXPECTEDFEASIBILITY OF INDUSTRIAL TREE FARM PROJECTPROPOSALSAPPROVEDAS OF 19_3
I TP _
Gestati_
l
I0
2
II 16 _ 6 5 II 21 13
] 4
7 8 9 I0
It
12
13
14
15 16. 17 18
(pu Ipwood) (s._t i,_er) (Ipl l-ipi I) Ca, falcataria) (Ip|l-ipl I pulpwood) (bagras pulpwood) (bagras sawt Imber) (ca r I bbe,.m pine puI pwood) (caribbean pine sawt Iml_ r) (bengue t pine s_tlmber)
19
5" I+I
(a.
National January
-
I RR (_.!...
1,7 over a I0 yr. pd. Z9.30
21.7£1
15+91
12.5_
+
6.8 over a 25 yr. pd, 16.7 over a 16 yr- pd.
-
14.5 -
+
_2 5.5 owr a 16 yr. pal.
+ -
+
fa-lc_taria)
(pUlpwood) (s_tin_er) (mab_3any)
B Ca, falcalaria) 16 (bag ras) ,8 (a. falcatarla) 5 • (Ipll-lpll) 8 (a. falcatarla) I_ (mahogany) rotation period will I_ every 30 yrs. for dlpterocaPp 5 (Ipi I-Ip_|) 16 Ccari bbear+ pine) 8-12 Cothers 12o28. (s_t imber) S (fucl_od) 8 Craw n_ter{als) 14 (Ipl I+ipi |) 5 (giant lpi I-tpl I) II
20-30
Source:
(nlahOg,+my)
8 5 8 12+16 S Ill
4 20-30 3
ROE (Z)
1.4
21
6
ROi (_,)
(¥rs)
,
25
5
Period
(lpi I-tpI 1) (f_hogany i narra) (bagras for banana proppin 9 poles) (m_hogany, .narra + logs)
Industrial 1984.
Tree Corporation
-
60.7 (simple
27.63 -
-
ROI)
_2.3
151 (sin_ole ROE)
-
32+82
IS.9 o_r a 30 yr. pd, 48 (simple ROt) 28.5 over a 10 Yr. pd,
and Bureau of
-.
18,49
Forest
Oevelopmmnt,
- 31-
No computation the projects list.
with
for the internal
the longer
The fact, however,
implies
the importance
of the hardwood
gestation
rates
of return
periods
are provided
that these projects
attached
IRR's
of
in this
have been approved
to establishing
type, even of lower
for most
plantation
forests
may be expected.
Issues The more man-made
forests
required;
While
afford 1979). Bureau agency.
are:
problems
The costs
participation
feasibility
decade,
important
doubts
involved
by the upland
of plantation
government
confronting
communities;
reforestation
on whether
(1977) proposed
Development
It was likewise
additional
forest
charges
the recent
establishment
(NITC), a subsidiary
financing
and, technical
work had accelerated
the cost of reforesting
Thus Monsalud of Forest
and corresponding
of
projects.
have been_expressed
to shoulder
the establishment
the government
degraded
lands
for reforestation
to be supplemented
suggested
in the last
(Sanvictores,
work
of the National
of the National
through
and licensees.
Industrial
Development
by the
by a _uasi-government
that funds he generated
on concessionaires
could
In fact,
Tree Corporations
Company
(NDC), is a
- 32-
step in this direction. interest
loans
NITC is currently
from foreign
out to industrial
tree farming
of the rates to be charged
A different problems been
lending
approach
by Revilla
institutions
projects
which
at very
annual
stipend
to the simultaneous and poverty
(1983a)
in a paper
trust fund from which
and subsequent
larger
reforestation/agro-forestation such fund is initially forestation
budgets
solution
sector
Indeed,
of concerned
the involvement
efforts
detail.
During
informal
agencies째
sector,
wariness
as a reason
for not proposing
system,
strategy.
The creation
cooperator
draws
upon completion
of a
The source
relative
(e.g., about _14,000
communities
sector needs with
to deal with renewal
the _,
per hectare
in 1983).
in the forest in more
some representatives
projects
of
posits
to what
to be studied
upland
an
~
The paper moreover
be entailed
conversations
the private
has
on the COSTEF
is suggested.
of upland
of the private
of the
to be the reforestatlon/agro
would
has been quoting
renewal
be lent
evaluation
in the uplands
a COSTEF
amounts
project
conceived
that lower costs per hectare private
could
low rates;
or cost-effeetivereforestation/agro-forestation of a reforestation
for low
is on-going.
of costly reforestation
suggested
negotiating
residents
far from
from
was cited
their concessions.
- 33 -
And,
in a particular
project
in Northern
conflict (Aguilar_ access
between 1983).
case, the establisPanent of a large Philippines
the project
Implementors
In this respect
to reforestation
in the uplands.
did not initially
ventures
result
tree farming , in serious
and the local populace
unchecked
inequitable,
may even result
differential
in increasedlnstability
- 34-
With
respect
to the technical
needs to be exercised forest
renewal
of the feasibility encroachment
per hectare_
Thus, Hymen made made
falcatarla
ecological
multi-specled,
uneven-aged
were made
have
predictions figures were
forest conditions,
on experimental
even in other
tended
plots
types of
to be optimistic.
out the downward
also needs
risk involved
stands
Table 8, for instance
yearly
adjustments
plantations.
concerns
in terms of the high
in actual
Indeed,
points
and
from 15 to 25 cubic meters
of plots
environments.
effects
plants
(1983) reveal
lower productivity
which
(1981) for example
Moreover, partlculary
n_ber
of future
been expressed.
35 to 50 per cent of yield
yield predictions
for alblzzia
generating
and Gregorio
Such
for
the consequent
cover have
to range
measurements
favorable
forest plantations,
forests.
plantations
from an adequate
under highly
forest
researchers.
the earlier
electricity
care
estimates
on over-estimates
farms and
by Revilla
or only around
by earlier
unlike
of wood-based
estimates
yield from leueaena
obtained
dendro-energy
issue, more
of yield
Apprehension
on the remaining
Recent
made
in the preparation
activities.
yield from ipil-ipll
feasibility
in the conversion
to uneven-aged,
shows
to be addressed, of
slngle-specied
the phosphorous
draining
effect
Table
8
INDICATORS FOR SOME ]OIVI,ROMI_t_,J_EFFECTS OF DIFFERENT UPLAND ECOSYSTEMS AT PUTING LUPA, MT. MAKILING
""
Secomia
(1)
Acidicty
(2)
O_g--Ic Matter Content (Per Cent) (a)
(3) (4) (5)
Plantatn
ee-Year
5.2
n.a.
6.1
6. a.
5.5
3.0
n.a.
2.4
n.a.
2.9
0-15 ca. depth
Net Gaiu in Phos,phorous (ks/ha./yr.) +52.6 Diversity of Insect Species
908
Kalusin
-56.8
-78'7
454
67
KainEin
..........
Forest
(ph)
Old
Nev
Forest
-45.9 n.a.
Grasslan_
+35.4 202
Per cent of Total Average Run-off due +to ra£nfed: (a) (b)
lIsht rainfall, unsaturated soil 9_i
11.5
9.7
ii.7
5.1
light rainfall+ saturated soll
8.6
i0.3
10.7
12.5
4.1
18.4
19.8
14.4
17•5
17.3
58.5
65.2
58.2
73.5
6.4
n.s.
(c)".heavy ralnfa11, unsaturated soil
(d) heavy rainfall, saturated soil 63.8. (6) 'Change _m Sedlmeat Load Due, to Pze--. c£p£taticm Intancity Chanses _ (Per cent)
Sources:
Upland
Hydroecology
Appendix Upland
Table
Hydroecology
Appendix
Table
12.3
21.3
Pzosr_ 1 and,
FiEuze
Prosram 9+ p.
(1977)+
30.
3&a.
(1978),
Tables
1,
2 & 6; pp.
20-24,
- 36-
of an ipil-ipil For comparison
plantation, purposes,
compared
the same table
uses and their environmental
GENERAL
plantation
problem
forests
of degradation logging
resident,
conducted
in the management
such
reforestation
Such tools,
that some monetary
irrigated
for example,
farm and using value
the tax
of forests
it through
of costs
the selective
contractor,
or upland
occupants. of forest practices evaluation
to attempts
the benefits
may include:
farm is benefited
land
and
the distribution
by concessionaire,
on the externalities
tools for sharing
forest
NEEDS
at reversing
of forest
latter would be pre-requisite economic
the other
of both natural
is that of determining
and management
Studies
AND RESEARCH
and, of attempts
system,
presents
forest.
effects.
ISSUES FOR DISCUSSION
A common
to that of the secondary
by a nearby
need
may be feasible.
at identifying
of conservation taxing
in the fees paid by timber
The
the specific measures.
a low-lander
uplander's
to pay the latter4or,
to be
whose
well-conserved
including
the environmental
concessionaires.
- 37 -
Attendant
to such studies
system of incentives
for conservation
Gregory •(1972) for instance, their effects regularly
is the_determlnation
discourages
and disincentives
outlines
on conservation,
e.g.,
conservation
of an appropriate
the various
to overcuttlng.
types of taxes
and
a real •property tax collected
while
a yleld
tax has a lesser
slmilar
effect.
Concomitant their•effects directly
studies would
on the wood
affected
investigate,
processing
by forest-based
for example,
the logged-over
be those
means
on the incidence
industry,
and the•local
activities.•
local
by allowing
owners
of concessions
and, who are therebylnterested
timber
exploitation,
In this respect
of the Revised
Forestry
Code's
studleson:
provision
per
"',i
cent
of
thelrsubscrlbed
the general • : ..
ions/res
public
and,
capital
residents
stock
to
:
to protect
in sustainable (a)the
effectivity _elling
I0
•
employees,
(b) the real propertytaxes
laborers
an
paid by concess-
.,
to
local governments
are.suggested.
,' .
' .
Related temporal
to
them to be part-
onthellcensees'
•
municipality
It may be worthwhile
of encouraging
areas fromencroac_ent,
of taxes,
to thetaxatlon
sense .-
forest-based
issue
that of determining
activities.
is a parallel
problem in the Inter,....
the appropriate
As may be gleaned
,.
dlscountrate
from the earlier
for
discussion,
- 3B -
positive
discounting
attractiveness _elatlve
of timber
profitability
minimizing
user's
political
problems
of forest
depicted were
and possibly,
a preliminary
rate,
work in general
has been noted
to be exercised
in outright
able adoption in mos_
developed
more
were
lowering
countries째
affect
(c)
the
i_xamlned.
of various
types
to maximize
practices.
in Philippine
forestry
not only labor displacing Moreover,
intensive째
of the interest
tree plantations_
and
and regulations,
conservation
et alo, 1981). to be labor
the
agricultural
to be done in order
of technology
which
of labor displacing
rules
intensity
the
due to
to be simultaneously
investigation
(Laarman
versus
factors which
fast changing
to encourage
also destructive
stands,
such as uncertainty
also needs
equipment
to encourage
Over natural
of the capital
use of some
capital,
(b) increasing
Moreover,
limits need
investigation
(a) reducing
of tree plantations
in the uplands,
based activities
employment
improvement,
cultivators째
tenure
Parallel
effects:
of plantations
time preference
and restrictive
Indeed,
stand
the attractiveness
crops for shifting forest
had the following
tree planting
reforestation
Thus, rate,
such may result
but
care needs
or cost of
in the unfavor-
technologies
now available
- 39 -
In general, as in an earller
the studies llterature
not pollcy-orlented. while deriving information is partly being
They
some policy
necessary
usually
they should important
at least
for certain
studies
would
provide
through
macro-level
focus on private
the advantages
investigate policy
important
researches.
pollcy
d_ecisions.
additional
and,
studies
variables
This
to the cases
activities),
merit in the
which
If so conducted,
information
are
analysis.
of case
crltlcal
1982)
enough
findings
of certain
as well
concerns
do not provide
comprehensive
effects
above
los Angeles,
of the studies'
Thus, while
(e.g., localized
in the review
(Segura-de
implications,
due to the specificity
their conduct
deemed
survey
for a more
investigated,
future,
included
to those
are such
gathered
Annex THE ANNUAL
For
areas
annual
allowable
Series
of
with cut
A
ALLOWABLE
CUT FORMLILA
approve d timber/forest, formula
is
management
(BFD Administrative
Order
1_71t):
V C
=
A+V
A
0
r
X f
2cc
where:
c
=
annual
V o
=
55_
(Vol.
=
of
+ 25_
(Vol.
+ Vol.
of
based Vr
allowable
cut
70 cms, of
forest Vo,
larger
trees,
inventory..
as
the residual
trees at the end of cycle
A
=
Total operable
f
=
recovery
factor
mlnatlon
of timber
efficiency) =
trees)
same formula
the cutting
cc
trees)
60 cm. dia.
80 cm.. and
on virgin
dia.
cutting
cycle.,
plan,
except
that
are used,
area (70_; pending utilization
deter-
No,
the 7l_,
Annex Table
1
AREA, AAC, PRODUCTIONAND EXPORTSOF TIHBER LICENSEES
Area
(Hi1.
ha.)
1960
1970
1980
1981
4.5
9.4
7.9
7.7
]5.5
16.8
14.9
AAC(Hil.cu._.)7.5 Log Production
(Hll.cu,m.)
6.3
11.O
6.3
5.4
to ACC
84._
71,O
37,8
36.1
3.4
8.6
0,7
0.7
Per cent of Exports to Production
53.9
78.3
11.2
13.1
Source:
Development,
Log Production Log Export
(Mil.cu.m.)
Bureau of Forest various years.
Forestry
Statistics,
An i-l_x Tab 1,e _ 4" LIST
OF INCENTIVES FOR IN,DUSTR_AL TREE: FARMS_ AGRO_FOREST AND TREE FARI'tS
(I)
trees
belong
to
(2)
first priority to iicensee till peri<:)dof avai_ment elapsed; then declared open
(3)
nominal
(4)
no rental first (5) years; 6th-1Oth year, annual rental of P.50/ha.; thereafter, annual recital of _l.O0/ha. if long denuded, after 25 years, first 5 years I_.50; thereafter P|.OO/ha,
(5)
forest charges
(6)
exempted
filing
fee
=
for:
(7) a11 expenses
lessee
right
to
sell has
l_oSO/ha.
25% of regular
forest charges
of NIR(',.
% tax in Title V of NIRC, al! forms of sa]es taxes, local municipal taxes, and rea] property taxes (PD _53) withho]di_g tax at source upon interest paid on borrowings_ =
ordinary and n_.cessary business capital expenditures
(8)
BOI pioneer
(9)
priority
in securing
(I0)
exempted
from PO
(11)
assurance
(12)
product
of
with
area
links
credit
assistance
1153 of
may be exf)orted
processing
p'lants
expenses
or
Annex
Table
_
PERMISSIBLE SECOND CYCLIC CUT FOR TREATED A!!D UNTREATED STANDS FOR ALL AREAS OF THE CRUZ STUDY
Area
Permissible Treated
Area
I
Area Area
Second Stands
Cyclic
Cut (cu.m/ha.)
Untreated
264.5
220.5
II
13.9.5
116.3
Ill
212.4
177,0
.,.,
Stands
o 1983a. "The COSTEF System: A Cost-Effective Reforestation/Agroforestation Strategy." SEARCA Professorial Chair Lecture in Forest Resources Management. UP at Los Ba_os, 22 June 1983. Revilla,
Adolfo
Timber 1983.
V. Jr.
Harvesting?"
1983b.
"DYNACAL
The Filipino
- For a More Realistic Forester,
August-September
Revilla, Adolfo. Vo Jr. and Myrna C. Gregorio. 1983. "Predicted Wood Yield for Leucaena Plantations in the Philippines." Policy Paper No. 10. Forestry Development Center (FDC), U.P. at Los Ba_os. Sanvictores, Jose G. 1979. "Afforestation Work and the International Agro-forestry Development Project in Surigao del Sur." 19 Proceedings of the Agro-forestry Symposium/Workshop, PCARR, Los BaSos, Laguna, 19-21 December 1979. Segura'de los Angeles, Marian 1982. "Research on Forest Policies ._ for Philippine Development Planning: A Survey." " Philippine Development Research, Philippine Institute for Development Studies. Serna,
Cirilo B. 1974. "A Technique for Determining the Value Timber Concession," Master's Thesis, Asian Institute of Managment, Makati.
of a
Tomboc, Carlos C. 1976. "Growth, Yield and Economic Rotation of Bagras Pulptimber in PICOP Plantations, _' Master's Thesis U.P. at Los BaRos. Upland
Hydroecology Program (UHP). Annual Reports, 1979. UPLB-DNR-NIA-Ford Ford Fo_mdation. .
Policy
Report,
1978.
1976-1977
UPLB-DNR-NIA-Ford
and
Foundation.