| Abstract: |
| A study was carried to investigate the economic effect of timber value on rubber monoculture systems, particularly in traditional rubber production regions. Both existing secondary data and new primary data for questionnaire surveys (plantations and timber dealers) were compiled and analysed. The Faustmann concept of infinite rotations was used to maximise net present value (NPV).
From all rubber production systems, rubber monoculture is the most disadvantaged due to its sensitivity to change in latex price, high labour requirements and smaller farm size. Rubber monoculture is attractive during times of high latex and timber prices, particularly in traditional rubber production areas where price distortions are small. An optimal rotation for rubber plantations is calculated taking into account the revenue generated from latex and stumpage price. Expected stumpage price, obtained from a linear model, is combined with normal cash flows from a rubber plantation to estimate a rotation length that maximises the NPV for smallholdings.
The value of timber reduces optimal rotation from 26 to 21 years. Planted area, basal area nor latex price have a strong effect on the optimal rotation for smallholdings, harvesting age stays close to 21 years with small changes on NPV. The large revenue generated by timber seems to be the reason for the stable optimal rotation. The elasticity of the stumpage prices model indicates that basal area is twice more important than total planted area at the moment to estimate timber value. This is particularly important for smallholdings that would find difficult to increase planted area, but could increase basal area by using improved latex-timber clones. Improved latex-timber clones will have an important effect on smallholding welfare. Good silvicultural practice can also improve timber production.
Regions around strong rubber markets and with significant quantities of sawmills would be very attractive from an economic point of view. The planting subsidy, paid through the Office of Rubber Replanting Aid Fund (ORRAF) has a positive affect on NPV and reduces optimal rotation in some cases. However, its relative importance decreases as latex and timber prices increase. ORRAF needs to reassess the subsidy program taking rubber timber into account.
The MSc research (University of Helsinki, Finland) was a part of the project “Improving the productivity of rubber smallholdings through rubber agroforestry systems in Indonesia and Thailand”, financed by the Common Fund for Commodities (CFC) and coordinated by the World Agroforestry Centre (ICRAF). |
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