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Model of Community Forest Land Management Production and Financial Simulation of Super Teak, Solomon Teak and Sungkai Trees in Samboja Kutai Kartanegara East Kalimantan, Indonesia

Author

Listed:
  • Budi Setiawan
  • Abubakar M. Lahjie
  • Syahrir Yusuf
  • Yosep Ruslim

Abstract

The objective of the research were to determine the volume increments, to find out the optimum ages and maximum increment, to know which plant effort was more profitable than each types exploitations, to analyze the financial feasibility and to know the farmers' financial needs and the level of interest by sensitivity analysis. This research was conducted in community forest of Sungai Merdeka Village Km. 38 Samboja District, Kutai Kartanegara Sub District of East Kalimantan Province. The research data was taken based on a purpose sampling system in the research plots of each Model I to V covering an area of 0.25 ha. Model I consisted by super teak 15 years 10x2 m spacing combined with king grass with an interest rate of 5% resulted in an estimated 6.5-year Pay Back Period (PP); Net Present Value (NPV) Rp. 186,346,058, -; Net Benefit/Cost (B/C) Ratio 3.99; Internal Rate of Return (IRR) 28%; Equivalent Annual Annuity (EAA) Rp. 12,122,078 and effort scale of 3 ha. Model II consisted by super teak 15 years 10x10 m spacing with an interest rate of 5% produce an estimated 18.5-year PP; Rp. (15,890,541,-) NPV; Net (B/C) Ratio to 0.72; (IRR) to 3%; (EAA) to Rp. (1,033,703,-) and (41) ha effort scale. Model III consisted by Solomon Teak 13 years 10x10 m spacing with an interest rate of 5% produce an estimated 10.4 year (PP); (NPV) to Rp. 97,546,242, -; Net (B/C) Ratio to 2.38; (IRR) to 10%; (EAA) to Rp. 6,345,523,- and 7 ha effort scale. Model IV consisted by sungkai 13 years 2x4 m spacing combined with papaya by an interest rate of 5% produce an estimated 13.1 years (PP) value; (NPV) to Rp. 41,099,472, -; Net (B/C) Ratio to 1.83; (IRR) to 22.5%; (EAA) to Rp. 2,673,580, - and 16 ha effort scale. Model V consisted by Sungkai 13 years with an interest rate of 5% produced an estimated 18.1 year (PP); (NPV) to Rp. -13.141,863, -; Net (B/C) Ratio 0.73; (IRR) to 3.2%; (EAA) to Rp. -854,897, - and (49) ha effort scale. Its concluded that by 5% discount factor, Model I, Model III and Model IV were feasible because they have an IRR value higher than Minimum Acceptable Rate (MAR) 5% and Net B/C Ratio higher than 1. Model II and Model V were not feasible because they have an IRR value lower than MAR 5% and Net B/C Ratio lower than 1. The optimum production of all models was reached at the ages of 25 years. The highest MAI was achieved in Model IV of 7.34 m3 ha-1 year-1 and the total volume was 183.56 m3 ha-1 year-1, while the lowest MAI was achieved in Model II of 6.25 m3 ha-1 year-1 and the total volume was 33.10 m3 ha-1 year-1. Based on the analysis of effort scale resulted that Model I could be the best choice and most feasible than other because it had the lowest effort scale value, while Model V was the least feasible option to be cultivated because it has the highest scale of effort. Model I, Model III and IV shown the NPV positive value to Rp. 186,346,058, -; Rp.97,546,242, - and Rp.41,099,472, -, while Model II and Model IV shown the negative value of Rp.(15,590,541,-) and Rp.(13,141,863,-).

Suggested Citation

  • Budi Setiawan & Abubakar M. Lahjie & Syahrir Yusuf & Yosep Ruslim, 2022. "Model of Community Forest Land Management Production and Financial Simulation of Super Teak, Solomon Teak and Sungkai Trees in Samboja Kutai Kartanegara East Kalimantan, Indonesia," Energy and Environment Research, Canadian Center of Science and Education, vol. 9(2), pages 1-48, December.
  • Handle: RePEc:ibn:eerjnl:v:9:y:2022:i:2:p:48
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    References listed on IDEAS

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    1. Vanzetti, Nicolás & Broz, Diego & Corsano, Gabriela & Montagna, Jorge M., 2018. "An optimization approach for multiperiod production planning in a sawmill," Forest Policy and Economics, Elsevier, vol. 97(C), pages 1-8.
    2. Reed, James & van Vianen, Josh & Foli, Samson & Clendenning, Jessica & Yang, Kevin & MacDonald, Margaret & Petrokofsky, Gillian & Padoch, Christine & Sunderland, Terry, 2017. "Trees for life: The ecosystem service contribution of trees to food production and livelihoods in the tropics," Forest Policy and Economics, Elsevier, vol. 84(C), pages 62-71.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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