Economic value of skidtrack rehabilitation: a case study in Sabah, Malaysia

Abstract

Often soil rehabilitation research ends without considering if the increased timber production motivates the investments needed, with the result that the research is not practically applied. Therefore, in the context of Sabah Forest Industries Sdn Bhd plantation programme, this paper estimated the net present value (NPV) from a skid-track rehabilitation case study. Eight different management alternatives were considered, consisting of all combinations of (1) tracks rehabilitated or not rehabilitated, (2) areas outside tracks fertilized or not fertilized, and (3) tracks covering 10 or 30%. At 30% track cover without track rehabilitation or fertilization, the NPV outside tracks was negative at all relevant interest rates. Rehabilitation of tracks alone made this unprofitable plantation profitable to an interest rate of about 3.7%. Fertilization of areas outside tracks made the plantation profitable up to an interest rate of 16%, while additional track rehabilitation further increased this reference interest rate to 19%. At 10% track cover the increased benefits from tracks rehabilitation barely compensated for the costs. Fertilization of areas outside tracks, however, was now profitable to 20% interest rate. Most of the SFI concession area is within the studied growth range. Therefore, management should look into the need for rehabilitation, since all wood used for pulp production is going to be harvested from the plantations. This evaluation simplified the issue about soil degradation. In reality the values of goods and services from a system will consist of more values, e.g. risk reduction, recreational and different ecosystem values such as watershed protection and soil quality. One of the future challenges of resource management will be to develop assessment methods that can be used by policy-makers to apply such multi-dimensional value system.

Published in

RAP Publication
2003, volume: 2003, number: 14
Publisher: Food and Agriculture Organization of the United Nations, Regional Office for Asia and the Pacific Bangkok, Thailand

Conference

Bringing Back the Forests Policies and Practices for Degraded Lands and Forests

SLU Authors

• Ilstedt, Ulrik

  • Department of Forest Ecology, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Environmental Sciences and Nature Conservation

Publication identifier

• ISBN: 974-7946-43-2

Permanent link to this page (URI)

https://res.slu.se/id/publ/2579