Simulated financial returns and selected environmental impacts from four alternative silvicultural...

ELSEVIER Forest Ecology and Management 89 (1996) 43-57

Pores;~;ology

Management

Simulated financial returns and selected environmental impacts from four alternative silvicultural prescriptions applied in the

neotropics: a case study of the Chimanes Forest, Bolivia

Andrew F. Howard a, Richard E. Rice b, R.E. Gullison ’ a Faculty of Forestry, Uniuersity of British Columbia, Vancouver, B.C., Canada

b Conservation International, Washington, DC, USA ’ Renewuble Resources Assessment Group, Centre of Environmental Technology, Imperial College of Science, Technology and Medicine, 8

Prince’s Gardens. London SW7 INA, UK

Accepted 19 June 1996

Abstract

The objective of this study was to compare the financial returns and selected environmental impacts from four alternative silvicultural prescriptions when applied to a sample area in the Chimanes Forest of Bolivia. Timber growth and yield and residual tree damage were estimated by simulating application of the prescriptions over a 50 year planning horizon using a diameter class model. Financial returns from the four prescriptions were estimated using discounted casMow analysis. The annual net cashflows were computed as the product of the yields of each of three classes of timber and the corresponding weighted average net tree value for the class computed from production cost and product price data taken from the literature. In the Chimanes Forest, silvicultural prescriptions based on highly selective cutting of single species are substantially more profitable than prescriptions involving cutting across a broad range of species given current relative prices among commercial species and prevailing interest rates. All prescriptions were shown to be highly profitable yielding a rate of return in excess of the average real rate of return from commercial activities in Bolivia over the past 8 years. Impact on woody vegetation including both damage and commercial removals was shown to be highest for the prescription involving the most intensive management. Road construction and total area disturbed were highest for the two prescriptions based on highly selective cutting. Independent of the prescription chosen, forest practices must be monitored and controlled by some organization independent of the concessionaires to prevent degradation of production forests.

Keywords: Mahogany; Discounted cashflow analysis

1. Introduction

The international development community and many conservation organizations have proposed a more dedicated commitment to the principles of forest management as a means of combating defor- estation, maintaining environmental quality, and conserving biodiversity. Governments of more devel-

oped countries involved in the design and implementation of assistance projects are hopeful that by practicing more intensive, sustainable forest management, the forest sectors of less developed countries can grow in size and play an important role in the sustainable economic development of these countries. They also recognize the environmental benefits that accrue from maintenance of forest cover over

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44 A.F. Howurd et ui. /Forest Ecology and Management 89 (1996) 43- 87

large areas, including forests allocated to timber to the resulting timber yields. Next the results from production. Conservationists, on the other hand, view the analyses of timber yields and sustainirbiljty, and more intensive forest management as a means for environmental impacts are discussed followed by a conserving forests by preventing their conversion to presentation of the results on the financial returns agricultural use and for reducing pressure on parks from application of the four prescriptions. Finally. and ecological reserves. conclusions and recommendations are offered.

The degree of difficulty associated with success- ful implementation of alternatives to current logging practices depends on the impact their adoption will have on the profitability of businesses which depend on timber. The success of alternative management practices in conserving biodiversity and maintaining the environmental benefits from forested areas depends on the physical impacts of their application on vegetation, soils, and fauna, and the spatial distribution of the effects. If alternative management methods are more profitable, timber concessionaires can be expected to adopt the required practices freely and, proponents argue, will actively protect forest lands allocated to them. Conversely, if alternative practices lead to lower profitability, particularly in the short term, timber concessionaires can be expected to resist efforts to promote change and a strong and dedicated commitment to enforcement of the principles and practice of the proposed options will be required. If proposed alternatives lead to unacceptable levels and/or distribution of negative environmental impacts, particularly if they are worse than those associated with current practices, either additional options must be developed or means of reducing the impact of current methods should be devised.

2. Methods

2.1, Inventory data

Inventory data were obtained from an ongoing study of the effects of timber harvesting intensity on plant and animal diversity in the Chimanes Forest by the third author of this paper. The data consisted of eight transects spaced 1 km apart that were divided into 1 km sections. Every other section had five 20 X 500 m plots located randomly off the base trail in which detailed measurements were taken on all mahogany (Swietenia macrophylla), Spanish cedar (Cedrela odorata) and palo maria (Calophyllum brasiliense) with diameter at breast height (Dbh) 2 2.5 cm. The data collected included species, Dbh, and height to the first branch which was assumed to represent merchantable height. In addition, 42 sub- plots each measuring 20 X 20 m were located randomly within the large plots in which the same measurements were taken on all woody vegetation 2Dbh 10 cm.

The objective of this study was to compare the financial returns and selected environmental impacts from four alternative silvicultural prescriptions when applied to a sample area in the Chimanes Forest of Bolivia. Two of the prescriptions were designed as different variations of current practices; one in which loggers return to previously cut stands every 5 years and the other in which they wait 10 years. The other two involve harvesting higher volumes per hectare (more species) over a smaller total area, and include retention of seed trees of the more valuable species often recommended as an alternative to current practices. The paper is organized as follows. First the data and methods used in the study are presented, including the design and computer simulation of the four prescriptions and the financial analyses applied

The inventory data were divided into three mer: chantability classes based on the relative value and demand for various species so that timber yields for each class could be accounted for separately. The first class consisted of three species, mahogany, Spanish cedar, and palo maria. The second class consisted of 15 species, and the third class consisted of all remaining species in the inventory, some 78 additional species. Class 1 and 2 species are listed in Table 1.

The inventory data were processed by merchantability class as needed to provide equations used in the diameter class growth model developed by Howard and Valerio (1992) for designing and simulating the application of the silvicultural prescriptions. Equations to estimate the number of trees per hectare by diameter class were fitted to the data for each of the three merchantability cIasses using

A.F. Howard et al./ Forest Ecology und Munagement 89 (1996) 43-57 45

Table 1

Species in Merchantability Classes 1 and 2

Genus Species Author Common name

Class I

Calophyllum Swietenia Cedrela

Class 2 Spondias

Cordia Licaniu

Terminalia Terminalia

Sloanea

brasiliense macrophyiia

odorata

mombin ulliodora

britteniana umnzonica

oblonga guianensis

Camb. King

L.

L.

(R and P) Oken. Fritsch

(J. Gmelin) Exe11

(Ruiz Lopez and Pavon) Steudel (Aubl.) Benth.

Palo maria

Mara Cedro

Cedlillo

SIXpC

Verdolago Verdolago amarillo

Urucusillo

Huru Hyeronima

Inga Swartiia

Ficus Poulsenia

Pseudolmedia Calycophyllum Lueheu

crepituns

ulchorneoides ingoides

jorori killipi

armata laeuis

spruceanum cymulosa

L.

Allem (Rich.) Willd

Harms Standley

(Miq.) Standl.

Hook, f.

spr. ex Benth.

Ocho6

Urichinia

Pacay cola de mono Jorori Bibosi

Corocho Nui

Guayavochi

deliocourt’s negative exponential functional form (deLiocourt, 1898) as quoted by Meyer (1952). For Class 1 species, two equations were fitted, one for small trees and one for large trees as a plot of the data showed two discontinuous linear groupings. An equation to estimate the average volume per tree by diameter class was taken from a recent study on harvesting production (JICA, 1989):

[l] log( V) = 2.053341og(Dbh) + 0.83 153 log(MH) - 4.21206

where V is tree volume (m3), Dbh is diameter at breast height (cm), and MH is merchantable height cm).

2.2. Silvicultural prescriptions, timber yields, and site disturbance

Four silvicultural prescriptions were developed for the study and then simulated using the diameter class growth model (see Howard and Valerio, 1992 for details on the model). The first two prescriptions represent different variations of current cutting practices in the Chimanes Forest which generally in- volves removal of all commercial stems of individual species or small groups of species sequentially in

order of relative value. The prescriptions differ in the length of the cutting cycle, or how long concessionaires wait to re-enter previously cut stands for the second and subsequent cuttings. In practice, the cutting cycle can be expected to vary based on changes in values among species and the timber supply and demand situation of companies with cutting rights. In Prescriptions 1 and 2 cutting was designed to generate a yield of 2.5 m3 ha-’ for all entries.

In Prescription 1, the cutting cycle was set at 5 years which means ten entries were made over the planning horizon of 50 years used throughout the study. In Prescription 2 the cutting cycle was fixed at 10 years, giving five entries in each stand over the planning horizon. In the first two prescriptions, all merchantable mahogany was taken in the first cutting. In the second cutting all Spanish cedar and palo maria and a sufficient volume of unspecified Class 2 species were harvested to give a yield of 2.5 m3 ha. For the remaining cuttings (3-10 for Prescription 1, and 3-5 in Prescription 2) removals continued in Class 2 species only, at a level of volume taken per unit area approximately equal to the first two entries. Ingrowth (regeneration) into the four smallest diameter classes (2.5 cm classes were used in the simula-

46 A.F. Howard et al. /Forest Ecology and Management 89 (1996) 43-57

tion model beginning at 2.5 cm Dbh) during each growth period was assumed to be equal to the original stocking. Cuttings for both Prescription 1 and 2 are extremely light, and were assumed to approxi- mate natural gap formation from windthrow which does not lead to abundant regeneration as demon- strated by the current inventory. For Class 1 timber, ingrowth for the first seven size classes was assumed to be 50% of the original stocking because of the elimination of essentially all seed sources in the first two cuttings.

In the third and fourth prescriptions cutting was distributed over a wider range of species with two goals. First, maintenance of seed sources for all species (especially mahogany) in an attempt to promote regeneration, and second, to increase the per- hectare yields to permit concentration of production on a smaller area. The higher cutting intensity for these two options compared to Prescriptions I and 2 also creates larger openings which theoretically promote establishment and growth of mahogany and Spanish cedar. Prescriptions 3 and 4 were developed with the help of the growth model. For Prescription 3 the goal was to obtain a constant yield of 6.0 m’ ha-’ per entry and to delay cutting in Class 3 timber for as long as possible because markets for these species do not exist at this time in Bolivia and, therefore, any cuttings of member species would be non-commercial. Cuttings generally followed the pattern used in recent, computer-based studies of prescriptions for natural tropical forests (Howard and Valerio, 1992, Howard, 1993, Howard and Valerio, 1996). Mature timber ( > 60 cm Dbh) is removed in three entries during a conversion phase followed by a maintenance phase when individual tree selection is applied in a way that ‘maintains’ or does not deplete the growing stock. The maintenance phase cuttings were designed to generate a sustainable yield of 1.0 m3 ha-’ at each entry from Class 2 species which required a cutting cycle of 10 years. Cuttings in Class 3 timber became necessary in the third entry (beginning in Year 21) in order to meet the 6.0 m3 ha-’ requirement. Diameter limit cutting was applied to Class 3 timber in Entries 3-5 using 70, 60, and 5.5 cm respectively for the three entries. Ingrowth (regeneration) into the four smallest diameter classes over the growth period following each cutting was varied for the three classes of timber

based on the assumption that the cuttings would successfully favor regeneration of the more desirable species as explained above. Ingrowth was assumed to be five times, twice, and 60% of the original stocking in the first four diameter classes for Timber Classes I. 2. and 3 respectively. It is important to note that there is no empirical evidence to support these assumptions, and that regeneration of mahogany in the Chimanes Forest apparently requires much larger scale disturbances (Gullison et al., 19951.

For Prescription 4, cuttings were made in all three species groups beginning with the initial entry (harvesting Class 3 timber was not delayed) which resulted in heavier removals per unit area compared to Prescription 3. The prescription was divided into a conversion phase and a maintenance phase as with Prescription 3. The length of the cutting cycle was changed until a sustained yield of timber was obtained during the maintenance phase for the stand az a whole. The resulting cutting cycle was 10 years. No attempt was made to insure a constant per hectare yield among the cuttings except during the maintenance phase (Cuttings 4 and 51. Ingrowth into the four smallest diameter classes over the growth cycle following each cutting was varied for the three ctasses of timber based on the assumption that the cuttings would successfully favor regeneration of the more desirable species, again through retention of seed sources and creation of larger openings. Ingrowth was assumed to be ten times, twice, and 60% of the original stocking for Timber Classes I, 2; and 3 respectively. This is slightly more optimistic than Prescription 3 with respect to establishment of Class 1 species because the openings were assumed to he bigger due to higher intensity cutting, thus more advantageous for mahogany and Spanish cedar.

Timber growth and yield over the SO year planning horizon was estimated by simulating application of all four prescriptions using the diameter class model. Mortality was held constant at 2.0% annuaily for all diameter classes, cuttings and prescriptions. Yields were accounted for separately for each of the merchantability classes. Timber yields were used in the financial analysis in combination with production cost and product price data to generated the periodic cashflows for the four prescriptions.

Three measures of site disturbance associated with application of the four prescriptions were calculated:

A.F. Howard et &./Forest Ecology and Management 89 (1996) 43-57 47

total area of production forest required to meet a fixed annual demand, total removals or overall impact on woody vegetation, and total length of primary haul roads. The overall impact on woody vegetation was computed using predictions from the diameter class model of per unit volume damage to residual trees, cutting levels, the volume felled to waste (Prescription 4 only) and the total area harvested. The amount of new primary access road required in the first cutting cycle was also estimated for the four prescriptions based on the total area harvested and measurements of road densities from a recent study in the Chimanes Forest (Gullison and Hardner, 1993). Data on main hauls roads only were used rather than haul roads and skid roads combined as truck roads are what provide access to previously undeveloped forest by potential colonists and, therefore, this was considered a better measure of risk to colonization.

2.3. Production costs, and gross and net tree values

Estimates of production costs (fixed and variable) for both domestic and export lumber were taken from Rice and Howard (1995) and included all phases of logging, lumber manufacture, transportation and sale, as well as taxes and other obligations to local and federal governments. Variable costs reported by these authors were inflated by 15% (roughly 4.8% year-’ 1 to estimate current (1995) costs (the data from Rice and Howard, 1995 were for 1992). In a recent study of logging in Bolivia completed in 1995, labor costs increased by only about 19% over 3 years when converted to $US, and fuel costs had actually declined in nominal terms, again in $US. Fixed costs were used directly as these arise primar- ily from depreciation which, in the short-term, is not affected by inflation. Weighted average production costs (domestic and export) were computed for each species assuming 80% of the production of Class 1 species is exported and 100% of Class 2 and 3 species is sold domestically. These figures compare favorably with statistics published by the CNF (1993) on export and domestic production for Class 1 and 2 species. At the present time, there are no markets for Class 3 species.

Lumber price data for mahogany and Spanish cedar were obtained from a newsletter published by

the International Tropical Timber Organization (ITTO, 1995). Export prices were not available for palo maria so they were estimated assuming a markup over domestic prices of approximately 78%, equivalent to the premium calculated for Spanish cedar. Prices for 14 species with domestic markets, some of which were present in the inventory, were obtained by telephone survey and site visits of 14 retail lumber outlets in Santa Cruz. Gross values per cubic meter of tree were computed as follows. First, a weighted average price for lumber sold domestically was computed for each species for which prices were obtained for both ‘long’ (7 feet and longer) and ‘short’ lumber, assuming 75% production of longer pieces and 25% shorts. Next a retail markup of 25% was subtracted to estimate the wholesale prices re- ceived by sawmills in or near the Chimanes Forest. These figures were then converted to $US per thou- sand board feet (Mbf) using a conversion rate of 4.79 bolivianos per $US. Export prices were quoted in $US per Mbf and therefore could be used directly. The weighted average gross value per cubic meter of roundwood (domestic and export) was computed for each species using the same assumptions of export versus domestic production applied for computing production costs. Gross value per cubic meter of roundwood was computed assuming 225 board feet per cubic meter of log for all species.

Tree net values were computed as simply the difference between gross values and weighted average production costs. Net value represents the sum of normal profits earned by the concessionaire plus any economic surplus or resource rent not captured by stumpage payments, expressed per cubic meter of tree. In this sense tree net value is a measure of tree or stumpage value from the perspective of a typical or average concessionaire.

For the first two prescriptions, net values of mahogany were applied directly to yields from the first entry as harvesting was limited to this single species for the first cutting. A weighted average price was calculated for the other Class 1 species taken in the second cutting (Spanish cedar and palo maria) based on the relative proportions of the two species in the original inventory. For Prescriptions 3 and 4, a single weighted price was applied to Class 1 timber calculated using the relative proportions by volume for the three species shown in the inventory as the weights.

48 A.F. Howard et al./ Forest Ecology and Management 89 (1996) 43-57

For Class 2 species cut in both prescriptions, net tree the corresponding weighted average net tree value values were averaged for the five species which have for either the species or species group. Net values a positive net value at current prices and applied to were held constant for the planning horizon which is all timber yields from Class 2 throughout the plan- equivalent to assuming nominal prices and produc- ning horizon. Class 3 timber harvested in Prescrip- tion costs inflate at the same rate when real discount tion 4 was assumed to be felled to waste at a cost of rates are used. Net cashflows were discounted using $5.00 m3, the standard contract rate for locating, a range of real rates of interest which bracket the marking, and felling trees (Rice and Howard, 19951, average rate over the period 1988-93 of approxi- for the first two cuttings (20 years). In Year 21 a mately 17.5% (Banco Central de Bolivia, 1994). The small volume of Class 3 timber is harvested in two prescriptions were compared on the basis of Prescription 3 in order to keep per hectare yields their respective total and per hectare net present constant. To reflect the likely emergence of markets values (NPV). Per hectare values were calculated by for a wider variety of species in the future, the net dividing the total NPV by the total area required to value for Class 3 species at this time was set equal to supply the hypothetical mill assuming the use of a the net value of Class 2 species. In Prescription 4, particular prescription (supply areas varied substan- the net value for Class 3 timber in Years 21-30 was tially among the four prescriptions). Total NPV rep- computed as the weighted average of Class 2 net resents the perspective of the concessionaire in that values and -5.00 m3 (the cost for felling to waste) the goal is to maximize return on investment from a assuming 30% of the total cut was merchantable and vertically integrated operation involving both grow- 70% had to be felled to waste. Beginning in Year 31 ing trees and manufacturing lumber subject to limits the net value of Class 3 species was set equal to the on annual production at the mill. As such it repre- net value of Class 2 species for all timber cut in this sents a volume-based approach. Per hectare NPV class for all prescriptions. Prescriptions 3 and 4 compares the relative profitability of the prescrip- require the harvest of Class 2 species for all cuttings tions from the perspective of the forest only, that is. including the first, so it was necessary to assume that subject to limitations on the area of land dedicated to markets for these species could be found immedi- timber production. In this sense it is an area-based ately. This may be optimistic and if so would over- approach. The sensitivity of the NPV of Prescrip- state the profitability of these two prescriptions tions 3 and 4 to changes in felling and skidding fixed slightly. and variable costs was also explored.

2.4. Financial returns 3. Results and discussion

Financial returns from the four prescriptions were estimated using discounted cashflow analysis and a 50 year plming horizon. The annual net cashflows were computed as simply the product of the yields of each class of timber for the appropriate cutting and

3.1. Inventory data

The equations fitted to the three species groups for predicting the number of trees by diameter class

Table 2 Diameter distribution equations for four classes of commercial timber

Timber class Constant Coefficient for Dbh Sample size Adjusted rz Standard error

Class I Trees < 17.5 cm Dbh 0.838 - 0.0537 7 0.968 0.0525 Trees > 17.5 cm Dbh -0.105 -0.0124 23 0.752 0.30 I Class 2 1.551 -0.0218 16 0.859 0.233 Class 3 2.466 - 0.0419 12 0.89 0.302

Tbe coefficients shown predict the log of the number of trees per hectare for the specified Dbh (class). All equations are significant at less than the 1% level.

A.F. Howard et al./ Forest Ecology and Management 89 (1996) 43-57 49

are given in Table 2. The coefficients shown predict the log of the number of trees per hectare for the specified Dbh (class). Goodness of fit statistics indicate that all of the models are significant at less than the 1% level, and that a high proportion of the variance in the data is explained by the models. The precision of the models increases with increasing timber class number (decrease in relative value) owing to the fact that the frequency of occurrence in the inventory also increases with increasing timber class.

3.2. Sustainability: timber yields and residual growing stock

The results from the simulation of Prescription 1 are shown in Table 3. Initial conditions shown for each treatment except for the first are for the stand after 5 years of growth following the previous cutting including ingrowth, upgrowth, and mortality. For this prescription, results are shown after every two entries (10 years) to make them consistent with the presentation of the findings from the other three prescriptions. The summary statistics for the beginning stocking of the stand (prior to the first cutting) are comparable with levels reported for low quality sites elsewhere in the tropics (Howard and Valerio, 1996).

A constant yield of 2.5 m3 ha-’ per cutting is obtained from application of Prescription 1 by design. In the first entry the entire volume comes from cutting mahogany; however, beginning in Cutting 2 (results not shown), there remains no commercial growing stock of mahogany. In the second entry which begins in Year 6, roughly 50% of the volume (1.24 m3 ha) is taken from Class 2 species. After the second cutting the commercial volume of all Class 1 species is fully depleted. In all subsequent entries the entire volume comes from merchantability Class 2 with the exception of the final cutting where a small volume of Class 3 trees must be harvested to generate the required volume.

Changes in total growing stock over the planning horizon as measured by basal area and commercial volume show a steady decline for this prescription despite the extremely low volumes per hectare taken in each entry. Growing stock after ten cycles represents 79%, 68%, and 63% of the original inventory for number of trees, basal area, and volume per

Table 3 Summary statistics for simulation of Prescription 1

Class 1 Class 2 Class 3 Totals

Cutting I, Years I- 5 Beginning inventory Trees ha- ’ 8 Basal area cm* ha- ‘) 0.84 Volume cm3 ha- ‘) 3.96

Harvest (m3 ha- ‘1 2.49

Damage (m3 ha- ‘) 0.04 Cutting 3, Years I1 - I5 Beginning inventory Trees ha- ’ 4 Basal area (m* ha- ‘) 0.12 Volume cm3 ha- ‘) 0.19

Harvest (m’ ha- ‘) 0.00 Damage (m3 ha- ‘1 0.01 Cutting 5, Years 21- 25

Beginning inventory Trees ha- ’ 4 Basal area cm* ha- ‘1 0.13 Volume (m3 ha- ‘) 0.22

Harvest (m3 ha- ‘> 0.00 Damage (m3 ha- ‘) 0.01 Cutting 7. Years 31-3.5 Beginning inventory Trees ha- ’ 4 Basalarea(m’ha-‘) 0.14 Volume cm3 ha- ‘) 0.27

Harvest (m’ha- ‘1 0.00 Damage (m3 ha- ‘) 0.02 Cutting 9. Years 41- 45

Beginning inventory Trees ha- ’ 4 Basal area cm* ha- ‘1 0.15 Volume cm3 ha- ‘1 0.32

Harvest (m3 ha- ‘1 0.00 Damage (m3 ha- ‘) 0.02 Ending inuentory, Years Sl- 55 Trees ha- ’ 4 Basal area cm2 ha- ‘) 0.13 Volume cm3 ha- ‘1 0.36

87 260 355 6.59 9.48 16.91

23.75 19.15 46.85 0.00 0.00 2.49 0.78 0.93 1.75

71 236 311 5.80 9.17 15.09

21.96 20.68 42.82 2.50 0.00 2.50 0.65 1.00 1.66

59 227 290 4.40 9.15 13.68

16.50 22.42 37.54 2.5 1 0.00 2.51 0.47 1.06 1.54

51 227 282 3.16 9.38 12.67

11.09 24.52 35.88 2.50 0.00 2.50 0.32 1.10 1.44

45 230 280 2.10 9.70 11.95 6.16 26.20 32.68 2.50 0.00 2.50 0.18 1.13 1.33

42 235 281 1.20 10.07 11.43 1.63 27.44 29.43

hectare respectively. The pattern across species groups varies somewhat. Class 1 and 2 species show declines in all three measures throughout the ten periods. The commercial growing stock of both groups is fully depleted by the end of the planning horizon, and the number of trees per hectare is roughly 50% of original stocking. Clearly cutting at these levels in these two merchantability classes is not sustainable. Class 3 species also show a decline in the number of trees per hectare, but both basal

50 A.F. Howard et ok/ Forest Ecology and Mamgemenr 89 (1996) 43-57

area and commercial volume increase slightly. Har- vesting in this prescription is limited almost entirely to Class 1 and 2 species, so it is not surprising to see commercial growing stock remain constant or build slightly for Class 3 timbers. The planning horizon would need to be lengthened to determine if continued cutting at the level prescribed (2.5 m3 ha- ’ every 5 years) in Class 3 species was sustainable. Unless these species have significantly faster growth rates, it is unlikely that this prescription is sustainable at the stand-level given the evidence from Class 1 and 2 trees.

The results from simulation of Prescription 2 are shown in Table 4. As with Prescription 1, timber yields were constant over the planning horizon at 2.5 m3 ha- ’ per cutting by design. Also as with Pre- scription 1, in the first entry the entire volume comes from cutting mahogany; however, beginning in Cut- ting 2, there remains no commercial growing stock of mahogany. In the second entry, the combined volume of Spanish cedar and palo maria was insuffi- cient to produce a similar yield, so roughly 6% of trees 2 40 cm Dbh of Class 2 species were cut to make up the difference. In Cuttings 3, 4, and 5, 13.5%, 15.5%, and 18.5% of the total commercial volume 2 40 cm Dbh of Class 2 trees were cut respectively which generated roughly 2.5 m3 ha-’ yield at each entry (every 10 years). No cutting of Class 3 species was required with this prescription.

Changes in stocking levels among the three species groups varied dramatically in Prescription 2. After two cuttings the commercial inventory of all remaining Class 1 timber was fully depleted. After five entries the commercial volume and total basal area remained low and did not change appreciable between the fourth and fifth entries suggesting little chance for recovery. Stocking of Class 2 timber remained relatively constant after the first cutting indicating that damage from logging and natural mortality equaled net growth of surviving residual trees. Stocks declined with the onset of cutting in this class. Stocking of Class 3 timber increased over the planning horizon as growth, particularly of merchantable sized trees, was reflected in higher volumes. Overall stocking after the final growth period was similar to the original stocking for the stand, although species composition shifted favoring Class 3 trees. The number of trees, basal area, and com-


Class 1 Cks 2 Class 3 Totals

Cufting I, Years I - IO

Beginning inventory Trees ha- ’ 8

Basal area (m’ ha-~ ‘) 0.84 Volume (m” ha.- ’ ) 3.96

Harvest (m3 ha-- ’ ) 2.49 Damage cm3 ha- ‘) 0.04 Cuffing 2, Yeur.~ 11-20 Beginning inventory

Trees ha- ’ :,

Basal area (m* ha ’ ) 0.37 Volume cm3 ha- ’ 1 1.41

Harvest (mJ ha- ‘1 1.26 Damage (m3/ha) 0.01 Curring 3. Yews 2/- 30 Beginning inventory

Trees ha- ’ 3 Basalarea(m’haL’f 0.13

Volume (m3 ha- ‘) 0.20 Harvest cm3 ha ‘) 0.00 Damage cm3 ha- ‘) 0.01

Cutting 4, Yews 31-40 Beginning inventory

Trees ha-- ’ 4

Basal area (m* ha- ’ ) 0.14 Volume (m 3 ha - ’ ) 0.25

Harvest cm3 ha- ’ ) 0.00 Damage (m3 ha- ‘) 0.02 Cutting 5, Years 4 I - 50 Beginning inventory

Trees ha-. ’ 4 Basal area(m’ha- ‘1 0.16 Volume cm- ha-. ‘) 0.32

Harvest (m3/ha) 0.00 Damage cm3 ha- ‘) 0.02 Ending humtory, Yews 51 - 60

Trees ha- ’ 4 Basal area (m’ ha ’ ) 0.17

87 260 355

6.59 9.48 16.9i 23.75 19.i5 46.85

0.00 0.00 2.49 0.78 0.93 1.75

75 247 327 6.25 9.66 16.28

23.73 21.55 46.69 1.22 0.00 2.49

0.70 i .03 I .75

66 241 311 5.56 9.90 15.60

21.58 23.89 45.67 2.52 0.00 2.52 0.59 1.12 1.73

59 240 303 4.74 IO.24 15.13

18.36 26.36 44.97 2.5 1 0.00 2.5 1 0.49 ! 20 1.71

5.5 242 301 4.02 10.63 14.80

15.30 28.73 44.35 2.5 1 0.00 2.5 1 0.40 I .26 1.68

51 3.38

245 300

Il.10 14.65 31.18 43.92 Volume (m’ha ‘) 0.39 12.35

mercial volume per hectare of the ending inventory represent 85%, 82%, and 94% of the initial values respectively. The slight decline in the number of trees per hectare was probably due to an underesti- mation of regeneration. The relative stability of the diameter distribution is not surprising given the low intensity of cutting.

Timber yields from Prescription 3 were constaM at approximately 6.0 m3 ha- ’ per cutting by de&n (see Table 5). The proportion of the per hectare cut

A.F. Howard et al./Forest Ecology and Management 89 (1996) 43-57 51



Cutting I, Years 1- IO

Beginning inventory Trees ha- ’ 8 Basal area (m2 ha- ‘) 0.84 Volume cm3 ha- ‘) 3.96

Harvest (m’ha- ‘) 1.42 Damage cm3 ha- ‘) 0.06 Cutting 2, Years 11-20

Beginning inventory Trees ha- ’ 29 Basal area cm2 ha- ‘1 0.85 Volume (m3 ha- ‘1 2.35

Harvest cm3 ha- ‘) 1.08 Damage cm3 ha- ‘1 0.04 Cutting 3. Years 21-30

Beginning inventory Trees ha- ’ 33 Basal area cm* ha- ‘) 0.78 Volume (m’ ha- ‘1 1.22

Harvest (m3 ha- ‘1 0.88 Damage (m3 ha- ‘) 0.03

Cutting 4, Years 31-40 Beginning inventory Trees ha- ’ 35 Basal area cm2 ha- ‘1 0.77 Volume (m3 ha- ‘) 0.38

Harvest cm3 ha- ‘1 0.00 Damage (m3 ha- ‘1 0.03 Cutting 5, Years 41-50 Beginning inventory Trees ha- ’ 38 Basal area (m2 ha- ‘) 0.93 Volume cm3 ha- ‘) 0.56

Harvest (m3 ha- ‘1 0.00 damage cm3 ha- ‘1 0.04 Ending inventory. Years 51-60

Trees ha- ’ 39 Basal area cm2 ha- ‘1 1.09 Volume (m3 ha- ‘) 1.13

87 260 355 6.59 9.48 16.91

23.75 19.15 46.85 4.57 0.00 5.99 1.03 1.20 2.29

84 248 362 5.55 9.75 16.15

19.59 21.74 43.68 4.91 0.00 6.00 0.93 1.37 2.35

83 245 361 4.62 10.13 15.53

15.38 24.60 41.20 3.39 1.82 6.09 0.83 1.55 2.41

84 244 364 4.06 10.29 15.12

12.73 25.92 39.03 1.05 4.99 6.04 0.79 1.59 2.41

86 245 369 4.01 9.94 14.89

12.23 24.33 37.11 1.05 4.92 5.97 0.74 1.56 2.34

88 3.99

11.52

245 373 9.66 14.74

22.78 35.43

in Class 1 species declined from 23% to 14% over the first three cuttings. In the final two entries no cutting was done in this merchantability class. Yields in Class 2 species increased between the first and second entries, but declined between the second and third cuttings. In the final two treatments, the harvest from Class 2 was constant at about 1.0 m3 ha-‘. Cutting in Class 3 timber was required in order to meet the 6.0 m3 ha-’ requirement beginning with the third entry. Removals increased between the third

and fourth cutting for this merchantability class, but remained constant for the final two entries in which they represent more than 82% of the total.

Changes in residual growing stock were minor with this prescription when view from the perspective of the stand as a whole. After five cuttings and growth periods, the total number of trees per hectare increased to about 105% of the original level while basal area and volume per unit area declined to roughly 87% and 76% of the initial values, respectively. The pattern across species groups is dramatically different owing to the assumptions made re- garding the relative levels of regeneration among the groups. Class 1 stocking increased with respect to both the number of trees and the basal area per hectare. Commercial volume declined by more than 70%. In the last three growth periods, all measures of stocking for this merchantability class increased steadily. Stocking of Class 2 species showed a somewhat different pattern. The number of trees per hectare was essentially constant over the planning horizon, whereas basal area and commercial volume declined by 40% and 5 1%. The bulk of these reduc- tions were in the first three cutting and growth cycles, and in the last two periods basal area and commercial volume appear to have stabilized indicating a sustainable level of cutting. Growing stock in Class 3 species show still another pattern. The number of trees per hectare declined slightly over the five cycles, whereas basal area and commercial volume increased. This is due mostly to the delay in cutting of this merchantability class until the third entry. Once cutting begins, both basal area and commercial volume decline between entries, although at a very slow pace. A longer planning horizon would be needed to assess whether the levels of removals shown are sustainable for this merchantability class.

In Prescription 4, removals per hectare in the first three cuttings produced roughly 12-15 m3 ha- ’ total volume and approximately 6-8 m3 ha-’ of commercial timber or 2.4-3.2 times the commercial yield from the first two prescriptions (see Table 6). Com- mercial yields are limited to Class 1 and 2 species only for the first two entries, while in the third cutting 1.82 m3 (30% of the volume cut from this class) of Class 3 timber is assumed to be commercial. Class 2 timber constituted about 85% of the commercial yield in the first two entries. Volume

52 A.F. Howard et al. / Forest Ecology and Management 89 (1996) 43-57

taken from all classes declined slightly with cutting number. Yields from Class 3 species represented 45-50% of the total cut. Total yields from the final two cuttings were about 50% of the timber produced from the final treatment in the conversion phase (first two cuttings) and are comparable to the appar- ent sustained yield obtained with Prescription 3. Yields from Class 2 were 40% or less than those

Table 6 Summary statistics for simulation of prescription 4


Cutting 1, Years I - 10 Begin&g inventory

Trees ha- ’ 8 87

Basal area (m* ha- ‘) 0.84 6.59 Volume (m3 ha- ‘) 3.% 23.75

Harvest (m3 ha- ‘) 1.42 6.67

Damage (m3 ha- ‘) 0.25 2.67

Cutting 2. Years 1 I - 20 Beginning inventory

Trees ha- ’ 56 78

Basal area (m* ha- ‘1 1.19 4.86 Volume (m3 ha- ’ ) 2.24 16.71

Harvest (m3 ha- ‘1 I a6 5.72

Damage (m3 ha- ‘) 0.16 2.06

Cutting 3, Years 21-30 Beginning inventory

Trees ha- ’ 66 78 Basal area (m* ha- ‘) 1.34 3.67

Volume (m’ ha- ‘) 1.07 I 1.32 Harvest (m3 ha- ‘) 0.80 5.14

Damage cm3 ha- ‘) 0.06 1.45

Cutting 4, Years 31-40 Beginning inventory

Trees ha- ’ 72 77

Basal area (m* ha- ‘) 1.58 2.77

Volume (m3 ha- ‘) 0.34 6.75 Harvest (m3 ha- ‘) 0.00 2.09

Damage (m3 ha- ‘1 0.04 0.58

Cutting 5, Years 41- 50 Beginning inventory

Trees ha- ’ 79 85

Basal area (m* ha- ‘) 2.07 2.84

Volume (m3 ha- ‘) 1.63 5.67

Harvest (m3 ha- ‘) 0.00 2.18 Damage (m’ha- ‘) 0.20 0.40 Ending inventory, Years 51- 60

Trees ha- ’ 84 91

Basal area Cm2 ha- ‘) 2.55 2.93

Volume (m3 ha- ‘) 3.47 4.60

260 355

9.48 16.91 19.15 46.85 6.82 a 14.91

2.18 5.10

21.5 349 8.08 14.13

15.15 34.10

6.41 a 13.19 1.80 4.03

180 324 6.92 11.93

12.61 25.00 6.18 b 12.12 I .59 3.10

157 306 5.84 10.19

10.72 17.80

4.07 c 6.16 0.88 1.50

159 323 5.84 10.75

11.66 18.96 3.85 ’ 6.03 0.92 I .52

161 335 5.89 11.37

12.08 20.15

about 42% of the area (ha) needed for the first two prescriptions. This means either twice the number of concessions could be let, or considerably more forested land would be available for allocation to other uses such as parks or other protected areas. For the purposes of illustration, both possibilities were considered in this study in comparisons of financial returns and environmental impacts.

a 100% felled to waste; b 30% commercial, 70% felled to waste; The overall impact on woody vegetation is sum- ’ 100% commercial. marized in Table 7 for the four prescriptions. The

generated in the conversion phase, whereas production in Class 3 timber was 65% or less than the per hectare values from the first three entries.

Changes in stocking levels among the three species groups followed essentially the same pattern decreas- ing during the first 30 years as the mature timber was liquidated. Class 1 species begin to recover during the second growth period indicated by the increase in number of trees and basal area between Cuttings 2 and 3. This increase is due entirely to the assumption of a ten-fold increase in natural regeneration for this class applied in this prescription for which there is no empirical support. Stocks of ah classes of timber begin to build after the fourth cutting and continue through the final growth period. This pattern indicates that the level of cutting applied in the final two treatments can be sustained in perpe- tuity. Ending stocking levels for the stand as a whole are roughly 94% of the original number of trees, 67% the initial basal area, and 43% the original volume. These figures are comparable to those reported from simulation of essentially the same prescription in forests of Costa Rica (Howard, 1993).

3.3. Selected environmental impacts

The concession size (ha) required for application 8400

of Prescription 2 was - ( i

x IO= 33600 where 2.5

annual production = 8400 m3, yield = 2.5 m3, and cutting cycle = 10 years. To explore the impact of more frequent entries on financial returns and site disturbance the same size concession (ha) was assumed for Prescription 1. Both Prescriptions 3 and 4 require a substantially smaller area (ha) where annual production = 8400 m3, yield = 6.0 m3, and cut-

8400 ting cycle = 10 years:

i ) - X IO= 14000. or

6

A.F. Howard et al./Forest Ecology and Management 89 (1996) 43-57 53

values shown for Prescription 1 include damage caused from both cuttings that fall within the time period shown in Column 1. Prescription 1 has by far the greatest impact on woody vegetation, almost twice as much as any other option. Prescription 4 is the next most destructive, although only about 12% more than Prescription 2 which in turn is about 18% more damaging than Prescription 3. Based on this comparison, the impacts caused by Prescriptions 3 and 4 are concentrated on a much smaller area than the damage caused by Prescriptions 1 and 2 (14000 ha versus 33600 ha).

If the annual volume harvested in Prescription 1 is reduced by one half to make it equal with the volume removed in the other three prescriptions (8400 m3) this would also mean only one half as much productive forest is required (16800 ha). Un- der this assumption, total removals from harvest and damage in Prescription 1 are also cut in half which changes its rank from first to third with respect to damage to woody vegetation. This scenario would still lead to essentially complete eradication of Class 1 and 2 species as originally modeled, however, in this case on only one half the area. If the area of forest committed to production with Prescriptions 3 and 4 are set equal to that computed for Prescription 2 (33600 ha) the total impact on woody vegetation increases to 1437 137 m3 and 1909474 m3 respectively and the rankings change to second and first most damaging. Annual production increases to 20 160 m3 for both prescriptions under this assumption. In summary, for both a given annual production and a given area total area of productive forest, Prescription 4 causes the greatest impact to woody

Table 7

Impact on woody vegetation from four silvicultural prescriptions (m3)

vegetation. For a given level of annual production, the least amount of damage is caused by Prescription 3, and for a given total area of productive forest damage is least with Prescription 2.

Gullison and Hardner (1993) reported 4.993 km of primary haul road was required to access a 602 ha cutting unit in the Chimanes Forest, or 0.008294 kmha-‘. Assuming similar development requirements, Prescriptions 1 and 2 would need 280 km of new road to access primary forest over the first 5 and 10 years respectively. Future entries would presum- ably use the same roads. Prescription 3 would require a total of 116 km over the same period which is only about 40% of what is needed for Prescrip- tions 1 and 2. Prescription 4 has road construction requirements that are similar to Prescription 3, however, building would be spread over a longer time as fewer hectares are required in the first three entries compared to Prescription 3 because of the higher volume taken per hectare.

If the total area of production forest were equalized across prescriptions at the level assumed for Prescriptions 1 and 2 (33600 ha1 280 km of road would be required for all four options. If the annual harvest were halved for Prescription 1, only 140 km of road would be needed compared to 280 km for Prescription 2 and 116 km for both 3 and 4.

The results from the estimates of environmental impact of the four prescriptions can be summarized as follows. Prescription 1 has both extensive and intensive impacts, Prescription 2 has extensive but relatively low intensity impacts, and Prescriptions 3 and 4 have concentrated (non-extensive), but intensive impacts. Prescriptions 3 and 4 in all probability

Years Prescription

1 2 3 4

Damage Total removals a Damage Total removals Damage Total removals Damage Felled to waste Total removals

I-10 116592 284592 58800 142800 32070 116070 52933 70833 207765

11-20 109536 277536 58800 142800 32857 116857 49914 79495 213409

21-30 102144 270144 58128 142128 47437 131437 33563 47168 164730

3 l-40 95 088 263088 57120 141120 33533 117533 20514 0 104514 41-50 88368 256368 56112 140112 32910 116910 21195 0 105195

Totals 5 11728 135 1728 288960 708960 178807 598807 178119 197495 795614

a Total removals is the sum of the volume harvested and damaged. For Prescription 4 it also includes the volume felled to waste.

54 A.F. Howard et al./ Forest Ecology and Manugement 89 (1996) 43-57

have significant impacts within the productive forest area on both plant and animal communities; Prescrip- tion 4 substantially more so than Prescription 3. However, assuming a fixed level of annual production, with both 3 and 4, an area nearly equal to the production forest could be left untouched in which both flora and fauna communities are preserved in- tact. Prescription 1 as originally modeled would also have significant impacts on both plant and animal communities, in this case spread over an area almost twice the size of Options 3 and 4.

3.4. Production costs, and gross and net tree values

Weighted average production costs and tree values for the seventeen species for which price data were obtained are shown in Table 8. Fixed annual costs for a typical sawmill in the Chimanes area with an annual demand for 8400 m3 year-’ were estimated at $280 140 or $33.35 me3 (Rice and Howard, 1995) which included road construction and maintenance and all fixed costs for logging and sawmilling operations. Variable production costs differ by species according to the proportion of production which is exported. Transportation costs and handling charges are higher for lumber that is exported. Gross values vary widely by species. Due to added trans-

portation costs and lack of local demand for lumber from the Chimanes Forest, the gross values derived from data collected in Santa Cruz (one of the largest, and fastest growing cities in Bolivia) can be considered optimistic. A doubling of equipment requirements was assumed under Prescription 1 in which annual demand was assumed to be twice that of the other prescriptions. Based on this assumption both fixed and variable production costs expressed per unit volume of production remain constant

Weighted average net tree values for the three classes of timber and the five cuttings are shown in Table 9. Weights used in the calculations for Class i prices for the first three cuttings in Prescriptions 3 and 4 and the second entry of Options 1 and 2 are based on the relative proportion of the various species present. Annual net cashflows were computed as the product of the yields of commercial timber by cutting and timber class shown in Tables 3-6 and the corresponding values for net tree value given in Table 9. Small differences exist due to rounding errors.

3.5. Financial returns

Total and per hectare net present values for the four prescriptions are shown in Tables 10 and 11 for

Table 8 Production costs and tree values for 17 commercial species in Bolivia ($/m3)

Species Gross value Variable costs Contribution to margin

Swietenia macrophylla 362.78 123.3 1 239.47 Cedreka sp. 254.48 117.74 136.75 Calophyllum hrasiliense 161.54 I 13.88 47.66 Astronium macrocarpon 156.70 86.04 70.66

Taralea oppositifolia 138.57 86.04 52.53 Pterogyne sp. 134.34 86.04 48.30 Hymenaea courbaril 131.52 86.04 45.48

Tabebuia impetiginosa 129.65 86.04 43.60 Terminalia amazonia 119.12 86.04 33.08 Tarara amarilla 118.47 86.04 32.42

Aspidosperma australe 114.61 86.04 28.57 Aspidvsperma macrocarpon 112.73 86.04 26.69 Peltogyne sp. 110.86 86.04 24.8 1 Tarara colorada 110.86 86.04 24.81 Anadenanthera sp. 95.82 86.04 9.78

Cariniana estrellensis 82.67 86.04 - 3.37 Hura crepitans 48.85 86.04 -- 37.19

’ Assumes annual production of 8400 m3 and total annual fixed costs of $280 140.

Fixed costs a Net value

33.35 206.12 33.35 103.40 33.35 14..11 33.35 37.3 I

33.35 i9.18 33.35 14.95 33.35 12.13

33.35 10.25 33.35 0.27 33.35 - 0.93

33.35 --. 4.78 33.35 - 5.66 33.35 - us4 33.35 I 8.54 33.35 -- 23.57

33.35 -‘36.72 33.35 --. 70.54

A.F. Howard et al./ Forest Ecology and Management 89 (1996) 43-57 55

Table 9 Weighted average net tree values ($/m?

Treatment/class Prescription

1 2 3 4

Cutting I Class 1 206.12 206.12 144.12 144.12

Class 2 NA NA 18.76 18.76

Class 3 NA NA NA -5.00

Curring 2 Class 1 29.63 29.63 29.63 144.12

Class 2 18.76 18.76 18.76 18.76

Class 3 NA NA NA - 5.00

curting 3 Class 1 NA NA NA 144.12

Class 2 18.76 18.76 18.76 18.76

Class 3 NA NA 18.76 2.00

Cutting 4

Class 1 NA NA NA NA

Class 2 18.76 18.76 18.76 18.76 Class 3 NA NA 18.76 18.76

Cuiting 5 Class 1 NA NA NA NA

Class 2 18.76 18.76 18.76 18.76

Class 3 NA NA 18.76 18.76

Cuttings 6 - 10 Class 1 NA NA NA NA

Class 2 18.76 NA NA NA

Class 3 18.76 NA NA NA

a range of discount rates. Per hectare values were rounded to the nearest dollar. The total NPV for Prescription 1 is about 1.5, 5.0, and 7.0 times as high as Prescriptions 2, 3, and 4 respectively, depending on the discount rate used. Prescription 2 is roughly 3.5 and 4.5 times as profitable as Prescriptions 3 and 4 respectively, and Prescription 3 is consistently 1.3 times more profitable than Prescription 4. If the annual production and total productive forest area are reduced by half for Prescription 1 to equalize it

Table 10 Net present values for four silvicultural prescriptions ($)

Discount rate (%I Prescription a

1 2 3 4

25 9806714 6267463 1600757 1215346 20 11099754 7417470 1979688 1508314 15 12804114 9005826 2584743 1980766

10 15273812 11342851 3685231 2854513

a Prescription 1 is based on 16800 m3 annual cut, while Prescrip-

tions 2-4 are based on 8400 m3 annual cut.

Table 11

Net present values for four silvicultural prescriptions ($/ha)

Discount rate (o/o) Prescription *

1 2 3 4

25 288 184 114 87 20 326 218 141 108 15 377 265 185 141

10 449 334 263 204

a Prescriptions 1 and 2 are based on 33 600 ha, while Prescriptions

2-4 are based on 14000 ha.

with respect to volume, the NPV also drops by 50%. While this drops the rank of this alternative from first to second, it is still substantially higher than either Prescription 3 or 4. The higher NPVs from Prescriptions 1 and 2 accrue largely from the first 5-10 years of cutting when only mahogany is taken. In contrast, a substantial proportion of the timber harvested in the first 10 years with Prescriptions 3 and 4 is Spanish cedar, palo maria, and other, lower-valued species. Annual non-discounted net cashflows for the first 5 years are 8.5 times as high for Prescription 1 compared with Prescription 3 ($3 462 8 17 versus $407 232). Over the next 15 years, net cashflows are actually greater for Prescription 3; however, because of the high discount rates which prevail in Bolivia, their effect is negligible on NPV.

Currently, concessionaires in the Chimanes Forest are essentially free to cut as they wish since govem- ment forest authorities exercise little or no control over logging activities. Given a fixed annual production level equal to mill capacity, concessionaires maximize returns by harvesting and processing only the most valuable species (currently only mahogany). In the continued absence of control concessionaires can, therefore, be expected to dictate harvesting practices based on maximizing annual returns for the sawmill. This will mean cutting and manufacturing the most valuable timber each year up to the annual capacity of the mill which in the long term will result in the application of either Prescription 1 or 2. Whether Option 1 or 2 is an accurate depiction of the long-term results depends on the size of the concession, spatial distribution of species, and the annual capacity of the mill. Under no circumstances can either Prescription 3 or 4 compete financially with current practices when compared on a volume basis.

56 A.F. Howard et al./ Forest Ecology and Management 89 (1996) 43-57

The four prescriptions were equalized with respect to area by computing per hectare NPVs. When compared on this basis Prescriptions 3 and 4 compete more favorably with current cutting practices, however, the current approach still enjoys a substantial advantage in profitability. These results indicate that even if the same area of forest as is needed for current practices to supply a fixed annual volume was allocated to timber production and either Pre- scription 3 or 4 was applied, still neither alternative can compete financially. In other words, viewed from a mill or forest perspective, current cutting practices are financially superior to commonly recommended alternatives by a wide margin. Prescrip- tions 3 and 4 were shown to be highly profitable yielding a rate of return in excess of the average real rate of return from commercial activities in Bolivia in recent years, but they cannot compete with the enormous profits earned through current, highly selective cutting methods. These findings explain the behavior of concessionaires in the Chimanes Forest.

To test the sensitivity of our findings to potential cost savings associated with more intensive management (Prescriptions 3 and 41, felling and skidding costs were reduced by 30% (total decrease of $5.04 mw3) which impli es a 30% increase in the production rate of both phases. This resulted in an increase in the NPVs for these two prescriptions of about 14%. The total and per hectare NPVs for both Pre- scriptions 1 and 2 are still substantially higher than either Prescription 3 or 4. Increases in felling productivity would accrue only from shorter walking distances (time) between trees due to the higher density of trees cut in each entry which normally represents only a small portion of the total work cycle. In- creases in skidding productivity could result from shorter skidding distances and larger load sizes. Given loads are typically made up of only one or perhaps two logs, the latter is highly unlikely. As- suming uniform spatial distribution of timber, shorter skidding distances would result only if roads were spaced closer due to a higher per hectare cut (economically optimal spacing of haul roads is related to the square root of the inverse of the volume cut per hectare). Shorter skidding distances only affect the travel empty and loaded components of skidding which together could represent as much as 50% of the total work cycle. Therefore, a 50% reduction in

average skidding distance (roughly the square root of the inverse of the ratio of the volume cut per hectare between the Prescriptions 1 and 4 in Cutting 1) would result in a 25% decrease in turn time and a similar decrease in costs. For both phases, a 30% reduction in costs can be considered at the high end of possible improvements.

4. Conclusions

In the Chimanes Forest, current cutting practices are substantially more profitable on both a fixed volume and fixed area basis than the two alternatives examined here designed to promote regeneration of mahogany and increase per hectare yields, given current relative prices among commercial species and prevailing interest rates. These findings are consistent with the observation that concessionaires, in the absence of control, currently practice highly selective cutting of a single, high-valued species (mahogany) and reinvest in additional capacity which leads to more rapid depletion of timber resources. For them to do otherwise would be economically irrational given the lack of controls and countervail- ing incentives. Alternative silvicultural prescriptions based on utilization of more species and concentration of cutting on a smaller area applied to the Chimanes Forest are highly profitable compared to other commercial investments in Bolivia. However, their voluntary adoption on the part of concessionaires is extremely unlikely in the face of much greater profits possible from current. practices. Be- cause alternative methods lead to lower profits, a strong, dedicated commitment to their implementation will be required to effect any change in the status quo. Such dedication has been lacking to date in the Chimanes Forest and throughout Bolivia.

Under some conditions, the alternative prescriptions modeled here cause less environmental impact than current logging practices. With the options investigated here, cutting required to supply a fixed demand can be concentrated on a much smaller area which means fewer roads, and less overall damage to residual trees. The reduced amount of road may help control colonization, although encroachment of this nature has yet to pose a serious threat in the Chi- manes Forest.

A.F. Howard et al./ Forest Ecology and Manugement 89 (1996) 43-57 51

Current logging practices are not sustainable when viewed from either the perspective of the stand as a whole or the stocking levels of individual species. Only when the forest is allowed sufficient time to recover (10 years in this study) does highly selective cutting produce sustainable yields at the stand level. Under no circumstances does current logging practice lead to sustainable production of all species. In the absence of monitoring and control, loggers are free to enter previously cut stands at any time to harvest other species, and undoubtedly will if greater profits can be earned as shown here, or if the stocks of the most valuable species are depleted. Current cutting practices also expose significantly more forest area to the threat of colonization per unit time than the alternatives investigated here because much more road must be built to access timber to meet a fixed annual demand.

Whether timber is harvested sequentially according to the relative value of species or all cuttings are made across a broad range of species, forest practices must be monitored and controlled by some organization, either governmental or from the private sector, or perhaps a combination of the two. Forests are at risk of severe environmental damage and degradation of their capacity for producing commercial timber in the absence of mechanisms for regula- tion. While the debate over the preferred silvicultural system and appropriate prescriptions will continue, forest-level planning of allowable cutting rates must take place assuming the most likely prescription, and the derived quotas must be enforced. The key to success in sustainable development at this spatial scale is matching the size and productivity of the productive forest land base allocated to a given manufacturing facility to its annual demand for timber and insuring compliance with annual quotas. In other words, economics alone cannot be allowed to

dictate forest practices, economics only indicates to what extent governments or independent parties must mediate between competing interests.

References

Banco Central de Bolivia, 1994. Boletin estadistico No. 283, La Paz, Bolivia.

CNF, 1993. Estadisticas de aprovechamiento, exportation y com- ercializacion national de productos forestales. Camara Na- cional Forestal, Santa Cruz, Bolivia, 15 1 pp.

deliccoutt, F., 1898. De’lam. Gullison, R.E., and Hardner, J.J. 1993. The effects of road design

and harvest intensity on forest damage caused by selective logging: empirical results and a simulation model from the Boque Chimanes, Bolivia. For. Ecol. Manage., 15: 1- 14.

Gullison, R.E., Vriesendorp, C. and Lobo, A., 1995. Large-scale forest disturbance caused by episodic flooding and alluvial deposition promotes the regeneration of Swierenia macrophylla, King in the Bolivian Amazon. Unpublished manuscript, Department of Ecology and Environal Biology, Princeton University, NJ, 47 pp.

Howard, A.F. and Valerio, J., 1992. A diameter class growth model for assessing the sustainability of silvicultural prescriptions in natural tropical forests. Common. For. Rev., 71(3/4): 171-177.

Howard, A.F., 1993. A comparison of three silvicultural prescriptions for natural tropical forests using computer simulation. Common. For. Rev., 72(2): 122- 125.

Howard, A.F. and Valerio, J., 1996. Financial returns from sustainable forest management and selected agricultural land-use options in Costa Rica. For. Ecol. Manage., 81: 35-49.

International Tropical Timber Organization, 1995. Market news service, Report No. 43, 21 June 1995, Geneva.

JICA, 1989. The forest resources management study in ITUR- RALDE La Paz. Japan International Cooperation Agency, Internal Document, La Paz, Bolivia.

Meyer, H.A. 1952. Structure, growth, and drain in balanced uneven-aged forests. J. For., 50: 85-92.

Rice R.E., and Howard, A.F., 1995. Profitability in the forest sector of Bolivia: a case study of the Chimanes Forest. Faculty of Forestry, University of British Columbia, Vancouver. (Un- published)

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