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New Zealand Journal of Forestry (1974) 19(1): 46–56
©New Zealand Institute of Forestry

Research article
An economic evaluation of afforestation with Radiata Pine on Tawarau forest.

S. J. Macpherson

A full forest management schedule was drawn up for an afforestation project with radiata pine on Tawarau Forest, central North Island, then relevant costs and returns were applied. On the gross area of 5584 hectares, 4872 ha were taken as plantable. Site index was 33 m at 20 years. A short rotation of 25 years managed on a sawlog board regime to produce for the local domestic market of Hamilton was prescribed. Establishment was assumed to be completed in 15 years at 332 ha annual planting, with 100% stocking. Net wood yield per hectare at age 25 was put at 623 m1 — 497 m3 of saw-logs and 126 m3 of chipwood. The forest reaches a sustained yield by year 47 when total yield from a logging coupe of 199 ha is 0.99 million m3 of sawlogs and 0.24 million m3 of chip-wood. A staff of 14 and a work force of 43 was required. Buildings and accommodation were minimal, the work force being transported daily from town centres. Costs and returns were taken from a base year of 1968. The economic results derived were favourable. The internal rate of return was 9.8% including social items and 10.8% excluding social items. The present net worth at 7% discount interest rate was $46.31 including social items and $55.63 excluding social items. Results indicated that afforestation in the locality would be a profitable venture and could meet the 10% earning rate stipulated by the Treasury. Planting commenced in 1972 and this forest model will provide a valuable yardstick to assess the actual forest profitability.
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