Calculation of Economic Rotation Period for Even-Aged Stand in Croatia

Abstract

Background and purpose: Even-aged forests prevail in Croatia's forestry. Rotation period is based mostly on natural parameters. In practice, rotation period is given by Croatian Rulebook of forest management. Cutting age is determined based on inventory data and many other stand characteristics. Rotation period is a planned time and it always has to be unique for particular tree species, and cutting age is the age of a stand at the moment of the final cut. The aim of the paper is to compare rotation period based on economic parameters and rotation period determined by using forest inventory data. Material and methods: Owing to absence of long term stand calculation data, research object was taken from Forest Management Handbook (1995). Mean annual increment (MAI) and current annual increment (CAI) provided fundamental data for calculations. The research was conducted at one hectare Common Beech (Fagus sylvatica L.) stand. Assortment structure and value of timber was estimated by the present cutting value method calculated by using Croatian forests Ltd. Price list for the year 2008. Labor costs in forest exploitation were also taken into account. Results and conclusion: In order to achieve cost-effective management of common beech stands, it is necessary to adjust current optimal rotation period. Optimal rotation period should be based on management goals as the main factors. So far the most common criterion adopted in Croatian forestry has been the rotation of maximum sustained yield or maximum Mean annual increment. The presented results indicate that common forest management practice should be changed in order to achieve cost-effective management of beech stands in the future.

The effect of capitalization on financial return in periodic growth

“…Businesses should be sustainable. In businesses involved in growing multiannual plants, sustainability may refer to maintenance of growing stock, maintenance of growth, or maintenance of productive area (Kuusela, 1961; Posavec et al., 2012). Another view is that maintenance is not necessarily enough, there possibly should be a progression in the amount of growing stock, growth, or possibly productive area (Kuusela, 1961).…”

State-space approach to capital return in nonlinear growth processes

“…Businesses should be sustainable. In businesses involved in growing multiannual plants, sustainability may refer to maintenance of growing stock, maintenance of growth or maintenance of productive area (Kuusela, 1961;Posavec et al, 2012). A variety of decisions contributes to such measures, including rotation times, regeneration practices, eventual thinning schedules, etc.…”

“…Then, also the financial soundness of any management decision depends on the discounting interest rate (cf. Tait, 1987;Posavec et al, 2012;Abdallah and Lasserre, 2016). Even if the discounting interest rate may reflect a variety of factors, it generally reflects the cost of capital, either as a borrowing cost or as an opportunity cost of missed alternative investments.…”

An Estimation of the Rotation Age Using Autoregressive Price Model and Trunk Analysis Data: Results for Pinus Brutia Ten

“…On the other hand, rotation age refers to the age when stand must be harvested or clear-cut. The calculation of this period is necessary to achieve the economic and sustainability goals of the harvester (Posavec et al, 2011). The most commonly used criteria to maximize productivity of forest stands are: (1) maximum single-rotation physical yield (2) maximum singlerotation annual yield (3) maximum internal rate of return (4) maximum annual net revenues (5) maximum discounted net revenues from an infinite series of rotation (Newman, 1988).…”

“…Since 1957 optimal rotation age has been studied by various researchers using the models with different levels of complexity (Gaffney, 1957;Näslund, 1969;Anderson, 1976;Reed, 1986;Engindeniz, 2003;Petit and Montagnini, 2004;Posavec et al, 2011;Pourmajidian et al, 2013;Brazee and Dwivedi, 2015). Some of these studies have used Faustmann criterion (Zhang, 2001;Brazee and Dwivedi, 2015) and other studies have applied other criteria for calculating the optimal rotation age (Engindeniz, 2003;Petit and Montagnini, 2004 (Newman, 1988;Pearse, 1967).…”