IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v100y2019icp188-197.html
   My bibliography  Save this article

Are portable sawmills a financially viable option for economic development in tropical forests?

Author

Listed:
  • Scudder, Micah G.
  • Herbohn, John
  • Baynes, Jack

Abstract

Community forest enterprises facilitated by non-governmental organizations (NGOs), using portable sawmills to produce rough-sawn lumber is one approach being pursued by tropical forest indigenous communities to improve their livelihoods. To investigate the profitability of portable sawmills operated by community forest enterprises, we developed a discounted cash flow model with a Monte Carlo risk analysis simulation. We populated this model using forest inventory data from six forest sites in Papua New Guinea, combined with cost and revenue data collected in country. We found that the application of this small-scale native forest management model has a high likelihood of producing a negative net present value (NPV). The cash outflows to produce the lumber are found to be consistently greater than the cash inflows from lumber sales, resulting in a probability of achieving a positive NPV of 0.04. If only the most valuable species are harvested the probability of achieving a positive NPV increased to 0.56. However, the communities would be at risk of overexploiting or high-grading their forests. We recommend that future community forestry projects utilizing portable sawmills explore value adding opportunities for rough-sawn lumber to overcome the high costs of portable sawmill operations and reduce the potential occurrence of forest high-grading.

Suggested Citation

  • Scudder, Micah G. & Herbohn, John & Baynes, Jack, 2019. "Are portable sawmills a financially viable option for economic development in tropical forests?," Forest Policy and Economics, Elsevier, vol. 100(C), pages 188-197.
    • Handle: RePEc:eee:forpol:v:100:y:2019:i:c:p:188-197
    DOI: 10.1016/j.forpol.2018.12.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934118304155
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2018.12.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Humphries, Shoana & Holmes, Thomas P. & Kainer, Karen & Koury, Carlos Gabriel Gonçalves & Cruz, Edson & de Miranda Rocha, Rosana, 2012. "Are community-based forest enterprises in the tropics financially viable? Case studies from the Brazilian Amazon," Ecological Economics, Elsevier, vol. 77(C), pages 62-73.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Frey, Gregory E. & Charnley, Susan & Makala, Jasper, 2021. "Economic viability of community-based forest management for certified timber production in southeastern Tanzania," World Development, Elsevier, vol. 144(C).
    2. Scudder, Micah G. & Baynes, Jack & Applegate, Grahame & Herbohn, John, 2019. "Addressing small-scale forestry informal markets through forest policy revision: A case study in Papua New Guinea," Land Use Policy, Elsevier, vol. 88(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Waldhoff, Philippe & Vidal, Edson, 2015. "Community loggers attempting to legalize traditional timber harvesting in the Brazilian Amazon: An endless path," Forest Policy and Economics, Elsevier, vol. 50(C), pages 311-318.
    2. Starfinger, Marcel, 2021. "Financing smallholder tree planting: Tree collateral & Thai ‘Tree Banks’ - Collateral 2.0?," Land Use Policy, Elsevier, vol. 111(C).
    3. Carvalho Ribeiro, Sónia M. & Soares Filho, Britaldo & Leles Costa, William & Bachi, Laura & Ribeiro de Oliveira, Amanda & Bilotta, Patricia & Saadi, Allaoua & Lopes, Elaine & O'Riordan, Tim & Lôbo Pen, 2018. "Can multifunctional livelihoods including recreational ecosystem services (RES) and non timber forest products (NTFP) maintain biodiverse forests in the Brazilian Amazon?," Ecosystem Services, Elsevier, vol. 31(PC), pages 517-526.
    4. Macqueen, Duncan & Bolin, Anna & Greijmans, Martin & Grouwels, Sophie & Humphries, Shoana, 2020. "Innovations towards prosperity emerging in locally controlled forest business models and prospects for scaling up," World Development, Elsevier, vol. 125(C).
    5. Clare, Stephen M. & Ruiz-Jaen, Maria C. & Hickey, Gordon M., 2019. "Assessing the potential of community-based forestry programs in Panama," Forest Policy and Economics, Elsevier, vol. 104(C), pages 81-92.
    6. Sanchez Badini, Olivia & Hajjar, Reem & Kozak, Robert, 2018. "Critical success factors for small and medium forest enterprises: A review," Forest Policy and Economics, Elsevier, vol. 94(C), pages 35-45.
    7. Viteri-Salazar, Oswaldo & Toledo, Lucía, 2020. "The expansion of the agricultural frontier in the northern Amazon region of Ecuador, 2000–2011: Process, causes, and impact," Land Use Policy, Elsevier, vol. 99(C).
    8. Frey, Gregory E. & Charnley, Susan & Makala, Jasper, 2021. "Economic viability of community-based forest management for certified timber production in southeastern Tanzania," World Development, Elsevier, vol. 144(C).
    9. Shrestha, Krishna K. & Paudel, Govinda & Ojha, Hemant & Paudel, Naya Sharma & Nuberg, Ian & Cedamon, Edwin, 2022. "Community entrepreneurship: Lessons from Nepal's Chaubas community forestry sawmill," Forest Policy and Economics, Elsevier, vol. 141(C).
    10. repec:ags:aaea22:335972 is not listed on IDEAS
    11. Shyamsundar, Priya & Ahlroth, Sofia & Kristjanson, Patricia & Onder, Stefanie, 2020. "Supporting pathways to prosperity in forest landscapes – A PRIME framework," World Development, Elsevier, vol. 125(C).
    12. Fortini, Lucas B. & Carter, Douglas R., 2014. "The economic viability of smallholder timber production under expanding açaí palm production in the Amazon Estuary," Journal of Forest Economics, Elsevier, vol. 20(3), pages 223-235.
    13. Ambrose-Oji, Bianca & Lawrence, Anna & Stewart, Amy, 2015. "Community based forest enterprises in Britain: Two organising typologies," Forest Policy and Economics, Elsevier, vol. 58(C), pages 65-74.
    14. Frey, Gregory E. & Cubbage, Frederick W. & Holmes, Thomas P. & Reyes-Retana, Graciela & Davis, Robert R. & Megevand, Carole & Rodríguez-Paredes, Diana & Kraus-Elsin, Yoanna & Hernández-Toro, Berenice , 2019. "Competitiveness, certification, and support of timber harvest by community forest enterprises in Mexico," Forest Policy and Economics, Elsevier, vol. 107(C), pages 1-1.
    15. Bocci, Corinne & Fortmann, Lea, 2023. "Community and industrial forest concessions: Are they effective at reducing forest loss and does FSC certification play a role?," World Development, Elsevier, vol. 170(C).
    16. Engbring, Gretchen & Hajjar, Reem, 2022. "Conflicts between core purposes: Trade-offs associated with organizational shifts in Mexican community forest enterprises," World Development, Elsevier, vol. 160(C).
    17. Hajjar, Reem & Newton, Peter & Ihalainen, Markus & Agrawal, Arun & Alix-Garcia, Jennifer & Castle, Sarah E. & Erbaugh, James T. & Gabay, Monica & Hughes, Karl & Mawutor, Samuel & Pacheco, Pablo & Scho, 2021. "Levers for alleviating poverty in forests," Forest Policy and Economics, Elsevier, vol. 132(C).
    18. Hintz, Kendisha Soekardjo & Kimengsi, Jude Ndzifon & Pretzsch, Jürgen, 2021. "How do smallholder forest farmers' organizations manage and commercialize wood products? – A global systematic review," Forest Policy and Economics, Elsevier, vol. 128(C).
    19. Humphries, Shoana & Holmes, Thomas & Andrade, Dárlison Fernandes Carvalho de & McGrath, David & Dantas, Jeremias Batista, 2020. "Searching for win-win forest outcomes: Learning-by-doing, financial viability, and income growth for a community-based forest management cooperative in the Brazilian Amazon," World Development, Elsevier, vol. 125(C).
    20. Aghane Antunes & Cynthia S. Simmons & Joao Paulo Veiga, 2021. "Non-Timber Forest Products and the Cosmetic Industry: An Econometric Assessment of Contributions to Income in the Brazilian Amazon," Land, MDPI, vol. 10(6), pages 1-16, June.
    21. Rodrigues, Maisa Isabela & de Souza, Álvaro Nogueira & Mazzei, Lucas & Silva, José Natalino Macedo & Joaquim, Maísa Santos & Pereira, Reginaldo Sérgio & Biali, Leonardo Job & Rodriguez, Daigard Ricard, 2022. "Financial variability of the second cutting of forest management in Tapajós National Forest, Brazil," Forest Policy and Economics, Elsevier, vol. 136(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:100:y:2019:i:c:p:188-197. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.