economics of agroforestry

Larry Caldwell larryc at
Tue Feb 11 01:53:43 EST 1997

In article <traverso-1002971635350001 at>,
traverso at (Clayton Chipper) wrote:

> we are in the process of setting up a major farm diversification and
> revegetation project in australia and we are keen to explore the economic
> opportunities available to help make this a worthwhile venture.
> ...has any one got some solid cost benefit analysis for timber production

You would probably have better luck asking your neighbors than an 
international discussion group.  Far too much depends on your local
conditions, then you have to project your local conditions ahead to
harvest time some year down the road.

It shouldn't be too hard to pencil out your own.  The costs will be:

money cost, land cost, payments and taxes
soil prep and clearing
weed and brush control
thinning and pruning
fire protection and loss
losses from disease, drought, predation
harvest expense
hauling expense
post-harvest cleanup and clearing

return on investment will be:

projected harvest quantities x projected harvest price, divided by the 
          number of years in the harvest cycle.
incidental harvest/commercial thinning
conservation - erosion/wind/water control

The first thing you need to know is if there is a market for your
trees in your area.  You can't afford to haul them halfway across the
continent to sell them.  Not all mills will buy all species, so be sure
to check your local market first.

Afforestation works best in diversified agriculture where the land is
best suited for tree production and of limited utility for annual crops.
If land is too steep to farm, and too steep to pasture, forestry is a
fine option.

In some cases, conservation can be important enough that it justifies the
project even before any return on harvest.  If you're going to plant wind
breaks, for instance, you may as well plant commercial species.  

How solid your cost/benefit analysis is depends on how good your crystal
ball is, and how lucky you are.  One fire could wipe out your entire 
harvest.  Farming is a gamble no matter what you do.

-- Larry

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