Research article Leasing of Forest land on a Royalty Basis
Because of the long deferment of income, the leasing oj land for forestry on a royalty basis (share cropping) offers some advantages. This paper proposes as its basic principle that the economic rental be converted to a predetermined percentage of future stumpage value. A royalty formula is developed from a forestry model described by Ward et al. (1966). This royalty in turn depends on a broad land classification which recognizes six classes according to topography and vegetation. The methodology of the study defines the relative investment of the two parties and thereby fixes their respective interests in the crop. The formula is designed for tended radiata pine forests only, and assumes an average distance of 30 miles from forest to relevant sawn timber price point f.o.r. There is provision for review after 25 years. Royalty varies between 1% and 25% of stumpage value, depending on land category. (no keywords)
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