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Journal ArticleDOI

Benefit–cost Analysis of Vegetation Management Alternatives: An Ontario Case Study

01 Jan 2011-Forestry Chronicle (NRC Research Press)-Vol. 87, Iss: 02, pp 260-273

TL;DR: This is the publisher’s version of a work published in The Forestry Chronicle 87:2 (2011) the version on the publisher's website can be viewed at http://pubs.cif-ifc.org/doi/abs/10.5558/tfc2011-013.
Abstract: This is the publisher’s version of a work published in The Forestry Chronicle 87:2 (2011) The version on the publisher's website can be viewed at http://pubs.cif-ifc.org/doi/abs/10.5558/tfc2011-013

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Lakehead University
Knowledge Commons,http://knowledgecommons.lakeheadu.ca
Research and scholarly works Faculty of Natural Resources Management
2011
Benefit–cost analysis of vegetation
management alternatives: an Ontario
case study
Luckai, Nancy J
The Forestry Chronicle, 2011, 87(2): 260-273, http://dx.doi.org/10.5558/tfc2011-013
http://dx.doi.org/10.5558/tfc2011-013
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260
ma r s/av r il
2011, v o l . 87, N
o
2 — Th e For esTr y Ch r oNiCl e
Benefit–cost analysis of vegetation management alternatives:
An Ontario case study
by Krish Homagain
1,2
, Chander K. Shahi
1
, Nancy J. Luckai
1
, Mathew Leitch
1
and F. Wayne Bell
3
ABSTRACT
Vegetation management practices are an integral component of forest management. In this paper, we report results of
stand-level benefit–cost analyses of 12 vegetation management treatments applied at six study sites in northern Ontario.
Forest Vegetation Simulator (FVS
Ontario
) was used to project gross total and merchantable volumes to 70 years of age, and
BUCK-2 was used to optimize potential products. Net present value (NPV), benefit–cost ratio (BCR), and internal rate
of return (IRR) were calculated using 2009 constant dollars and variable real discount rates. Aerial herbicide treatments
produced the highest NPV, BCR, and IRR. Internal rates of return of 4.32%, 2.90%, 2.82% and 2.50% for aerial herbicide,
manual brush cutting, ground-applied herbicide, and brush cutting plus herbicide treatments, respectively, indicated that
all of the vegetation management alternatives evaluated are economically viable.
Key words: aerial herbicides, brush saw, forest economics, Forest Vegetation Simulator (FVS
Ontario
), ground herbicides,
internal rate of return, net present value
RÉSUMÉ
Les pratiques de contrôle de la gétation font partie intégrante de laménagement forestier. Dans cet article, nous
reportons des résultats obtenus par des analyses de coût-bénéfice effectuées au niveau du peuplement pour 12 traitements
de contrôle de la végétation appliqués sur six sites détudes du nord de lOntario. Le Forest Vegetation Simulator
(FVSOntario) a été utilisé pour projeter le volume total et le volume marchand à lâge de 70 ans et le BUCK-2 a été utilisé
pour optimiser les produits potentiellement obtenus. La valeur actuelle nette (VAN), le ratio coût-bénéfice (RCB) et le
taux de rentabili interne (TRI) ont été calculés en dollars constants de 2009 et selon des taux variables de profitabili
réelle. Lépandage aérien de phytocide anéré les VAN, RCB et TRI les plus importants. Les taux de rentabili interne de
4,32 %, 2,90 %, 2,82 % et de 2,50 % respectivement pour lépandage aérien, le broussaillage manuel, l’application
terrestre de phytocide et le débroussaillage manuel suivi de traitements de phytocide, ont démontré que toutes les
alternatives de contrôle de la végétation évales sont économiquement viables.
Mots clés : épandage aérien de phytocide, débroussailleuse, économie forestière, Forest Vegetation Simulator
(FVSOntario), épandage terrestre de phytocide, taux de rentabilité interne, valeur actuelle nette
1
Faculty of Natural Resources Management, Lakehead University, 955 Oliver Rd., Thunder Bay, Ontario P7B 5E1.
2
Corresponding author. E-mail: khomagai@lakeheadu.ca
3
Ontario Forest Research Institute, Ontario Ministry of Natural Resources, 1235 Queen Street East, Sault Ste. Marie, Ontario P6A 2E5.
Introduction
Ontarios forest sector is a key component of the provinces
economy (OMNDMF 2010). Most of Ontarios productive
forest is in the conifer-dominated boreal region where opti-
mization of growth rates of spruce (Picea) and pine (Pinus)
species is a key forest management objective, but these species
are often out-competed by hardwoods such as poplar (Popu-
lus spp.) (Hearnden et al. 1992). Maintaining overall forest
composition is a legal requirement under Ontarios Crown
Forest Sustainability Act, which states that “large, healthy,
diverse and productive Crown forests and their associated
ecological processes and biological diversity should be con-
served(Statutes of Ontario 1995). As a result, forest vegeta-
tion management practices are an integral component of for-
est management.
Forest vegetation management practices help to ensure
initial plantation
4
survival, accelerate growth of targeted
species, and achieve high yields in terms of per unit gross total
volume production (Wagner et al. 2006). Forest vegetation
management practices include several alternatives (Wien-
sczyk et al. 2011, this issue) and results from experimental
studies on growth rates and volume production are highly
variable among these alternative treatments (Comeau et al.
1999; Simard et al. 2001; Heineman et al. 2005; Bell et al.
2011a, this issue). The costs associated with the various treat-
ments also vary greatly (Bell et al. 1997, Dampier et al. 2006).
In a system where both yields and costs vary, an economic
analysis of the efficiency of a silvicultural intervention can
only be evaluated based on long-term stand-level growth
response data and cost information (McKenney et al. 1997).
In a review of the Canadian forest vegetation management
research and practice, Thompson and Pitt (2003) report 1256
scientific publications directly related to forest vegetation
management as of 2002, but only 18 (1.4%) of those include
components of economic analysis of forest vegetation man-
agement treatments, and even fewer are focused on the eco-
nomics associated with releasing boreal conifers. Therefore,
4
Plantation is a forest crop established artificially, either by sowing
or by planting (NRCan 1995)
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ma r Ch /apr il 2011, v ol . 87, No. 2 — Th e Fo r esTr y Ch r oNiCl e 261
there is a need for stand-level benefit–cost analyses (BCA)
that will help decision-makers choose the best alternatives for
forest vegetation management. BCA is a method of apprais-
ing and evaluating an investment decision that includes iden-
tification, valuation, and comparison of all costs and benefits
during the life of a project (Campbell and Brown 2003). BCA
provides the most comprehensive framework for evaluating
any economic investment, as it estimates values associated
with inputs and outputs for each activity (Nautiyal et al.
2001). Net present value (NPV), benefit–cost ratio (BCR) and
internal rate of return (IRR) are the most commonly used
measures for conducting benefit–cost analysis. NPV
expresses the difference between the discounted present value
of future benefits and the discounted present value of future
costs, whereas BCR is the ratio of discounted present value of
benefits to the discounted present value of costs. A positive
NPV or a BCR greater than one indicates that the activity
being evaluated is economically beneficial. We used both
NPV and BCR because for investment decisions related to
forestry activities, NPV gives the best comparison when silvi-
culture budgets are not limited and BCR gives the best com-
parison when silviculture budgets are limited (Willcocks et al.
1997). However, both NPV and BCR depend on the discount
rate used for the analysis. Therefore, the benefit–cost analysis
is supplemented by finding the IRR, which is the discount
rate when NPV is zero. An IRR greater than the existing mar-
ket interest rates in general indicates a relatively profitable
investment (Campbell and Brown 2003). Such analyses pro-
vide a management tool to evaluate and compare amongst
different release treatments, thereby building a competitive,
knowledge-based forest industry that is sustainable under
increasing global competition.
In this paper, which is one of a series of papers related to
forest vegetation management published in the March/April
2011 issue of The Forestry Chronicle (see Bell et al. 2011b, this
issue), we report the results of stand-level BCA of vegetation
management treatments applied at six sites in northern
Ontario. The specific objectives of the study were to: (i) calcu-
late costs associated with each vegetation management treat-
ment over almost two decades, (ii) estimate projected yield
and value of fibre (timber, pulpwood, and hog fuel) produc-
tion using a simulation and an optimization model, and (iii)
conduct BCA to compare the economic viability of the vege-
tation management treatments.
Methods
The simulations and benefit–cost analyses presented in this
paper are based on data from six Vegetation Management
Alternative Program (VMAP) studies. In brief, yields were
projected beyond the data to age 70 years using Forest Vege-
tation Simulator (FVS
Ontario
) (ESSA 2008). BUCK-2 opti-
mization software (Zakrzewski et al. 2010) was used to deter-
mine what forest products could be produced at 70 years
following treatments. Future benefits were calculated using
current Thunder Bay market prices for pulpwood and hog
fuel
1
, and lumber prices from Random Length price statistics
for 2009 (Random Lengths 2009). A range of real discount
rates (2% to 10%) was used to calculate net present value and
benefit–cost ratio for each vegetation management treat-
ment. In addition, the internal rate of return for each treat-
ment was estimated to compare changes in NPV over differ-
ent discount rates. Details of each stage of analysis are
provided below following descriptions of the studies from
which the data were obtained (for additional details about
study sites, see Bell et al. 2011a).
Study areas and vegetation management treatments
Data collected over 10 to 16 years from six research studies in
northern Ontario were used for the analysis (Table 1). All sites
were clearcut harvested, mechanically site prepared
Table 1. Vegetation management alternative program study areas, treatments, and experimental designs from which data were
obtained for the benefit-cost analysis (adapted from Bell et al. 2011a)
Study site Location Year planted Crop species Year released Release treatments
a
Exp. design (Exp. units)
Bending Lake 48°57
N 1988 jack pine 1992–93 ASg, BS, CON, CRg RCBD: 4 Blocks (16)
92°02
W
Espanola 46°48
N Block 1: 1989 jack pine 1993 ASg, BBt, BS, CON, RCBD: 3 Blocks (18)
82°11
W Others: 1991 CRg, MBg,
Fallingsnow 48°08
N 1987–90 white spruce 1993 ASg, ASt, BS, CON, RCBD: 3 Blocks (21)
89°49
W CRb, CRg, SIL
Leether Lake 50°36
N 1988 jack pine, 1993 ASg, BS, CON, CRg CRD: 3 Blocks (12)
91°45
W black spruce
Nipigon Corrigal 49°01
N 1988 black spruce 1990 BBt, BSg CON, CRg, RCBD: 3 Blocks (18)
88°10
W EZg, RHg
Nipigon Hele 48°59
N 1987 black spruce 1990 CON, CRg, RHg, SGh RCBD: 3 Blocks (12)
88°33W
a
Treatment descriptions: ASg – aerial application of Vision (glyphosate) from a Bell 206 helicopter; ASt – aerial application of Release (triclopyr) from a Bell 206 helicopter; BBt
– basal Bark application of Release (triclopyr) with backpack sprayer (Thin Line); BS – motor-manual brush saw cutting at 18 cm above ground without herbicide; BSg – brush
saw cutting with stump herbicide applicator attachment with Vision (glyphosate); CON – untreated control; CRb – continuous removal of vegetation by annual applications of
brush saws; CRg – continuous removal of vegetation by annual applications of Vision (glyphosate); EZg – EZ-Ject injection of Vision (glyphosate) into competing basal stem;
MBg – Backpack mist blower application of Vision (glyphosate); RHg – Reel and hose application of Vision (glyphosate); SGh – spot gun application of Velpar-L (hexazinone);
SIL – mechanical brush cutting at 33 cm above ground with Silvana Selective/Ford Versatile tractor
1
Hog fuel consists of mix of wood residues, shavings and off-cuts
that can be recovered during saw-log and pulp-log conversion.
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(1986–1988), and planted (1988–1991) with bareroot or con-
tainer stock of jack pine (Pinus banksiana Lamb.) (three sites),
black spruce (Picea mariana [Mill.] BSP) (two sites), or white
spruce (Picea glauca [Moench] Voss) (one site) at approxi-
mately 2 × 2 m spacing. In all, 12 vegetation management
(release) treatments
5
(plus untreated control) were applied to
97 experimental units (plots) varying from 2 ha to 12 ha,
using randomized complete block designs with single replica-
tions. One exception is the Leether Lake site, where treat-
ments were completely randomized in four replications. Each
site has three to four blocks and four to seven treatments, but
all treatments were not applied at all sites. The level of silvi-
culture implemented at all six sites would be classified as
“basicbased on the definitions provided by Bell et al. (2008).
Specific site and treatment descriptions are below.
The Bending Lake Project is located about 54 km north of
Atikokan, Ontario (Table 1). Jack pine is the crop species at
this site. The study includes four blocks and four treatments:
(i) aerial spray with glyphosate (ASg) in late August 1992,
(ii) brush saw (BS) between late June and early July 1993,
(iii) control (CON) with no release treatment, and (iv) con-
tinuous removal with ground applications of glyphosate
(CRg) in September 1993 and again in August 1994.
The Espanola Study is located approximately 90 km north-
west of Espanola, Ontario (Table 1). Jack pine is the crop
species at this site. The study includes three blocks and six treat-
ments: (i) aerial spray with glyphosate (ASg) in August 1993,
(ii) basal bark/triclopyr (BBt) in October 1993, (iii) brush saw
(BS) in October 1993, (iv) control (CON) with no release treat-
ment, (v) continuous removal with ground applications of
glyphosate (CRg) in June 1995 and again in June 1996, and (vi)
mist blower with glyphosate (MBg) in August 1993.
The Fallingsnow Ecosystem Project is located approxi-
mately 60 km southwest of Thunder Bay, Ontario (Table 1).
White spruce is the main crop species at this site. The study
includes three blocks and seven treatments: (i) aerial spray
with glyphosate (ASg) in mid-August 1993, (2) aerial spray
with triclopyr (ASt) in mid-August 1993, (iii) brush saw (BS)
in mid- to late October 1993, (iv) control (CON) with no
release treatment, (v) continuous removal with brush saws
(CRb) in 1994 through 1997, (vi) continuous removal with
ground applications of glyphosate (CRg) in 1994 through
1997, and (vii) Silvana Selective (SIL) brush cutting between
late October to early November 1993.
The Leether Lake Study is located about 56 km north of
Sioux Lookout, Ontario (Table 1). Jack pine is the crop species
at this site except in blocks treated with BS, where black
spruce was planted. The study includes four treatments repli-
cated three times: (i) aerial spray with glyphosate (ASg) in
August 1993, (ii) brush saw (BS) between early to mid-June
1994, (iii) control (CON) with no release treatment, and (iv)
continuous removal with ground applications of glyphosate
(CRg) in 1994 through 1996.
The Nipigon Hele Study is located in Hele Township,
about 19 km west of Nipigon, Ontario (Table 1). Black spruce
is the main crop species at this site. The study includes three
blocks and four treatments: (i) control (CON) with no release
treatments, (ii) continuous removal with ground applications
of glyphosate (CRg) from August 1990 through 1994; (iii) reel
and hose application of glyphosate (RHg) in August 1991; and
(iv) spot gun application of hexazinone (SGh) in October
1990. All treatments except continuous removal were applied
to a 1-m radius around each crop tree.
The Nipigon Corrigal Study is located in Corrigal Town-
ship, about 8 km east of Nipigon, Ontario (Table 1). Black
spruce is the main crop species at this site. The study includes
three blocks and six treatments: (i) basal bark application of
triclopyr (BBt) in October 1990, (ii) brush saw with
glyphosate (BSg) in September 1990, (iii) control (CON) with
no release treatment, (iv) continuous removal with ground
applied glyphosate (CRg) in August 1990 through 1994, (v)
EZ-Ject application of glyphosate (EZg) in November 1990,
and (vi) reel and hose application of glyphosate (RHg) in
August 1991. All treatments except continuous removal, EZ-
Ject, and basal bark were applied to a 1-m radius around each
crop tree.
Data collection
Crop tree plots of approximately 1200 m
2
(30 m × 40 m) were
established in each treatment plot, before applying the release
treatment. In each treatment plot, 20 crop trees (at approxi-
mately 10-m spacing) were selected for periodic remeasure-
ment. We used the 10
th
-year post-treatment crop tree meas-
urement data (height, diameter at breast height (DBH) and
stocking) presented in Bell et al. (2011a) and additional 16
th
-
year post-treatment data from the Fallingsnow Ecosystem
Project collected in 2009 summer for our analyses.
Simulation and optimization models
We used Forest Vegetation Simulator, FVS
Ontario
—a non-spa-
tial, individual-tree growth model (for details, see ESSA
2008)—to project expected crop tree volumes to an arbitrary
rotation age of 70 years. The model simulates changes in
diameter increment of individual trees using current size
(diameter and height) and calibrated values of previous
growth. A sub- model accumulates periodic increments over
successive time intervals (e.g., five or 10 years). For each site,
a common forest region (Ontario West), site quality (Site
quality II), crop species, and establishment year were used.
We simulated total volume assuming equal spacing between
existing trees and no additional silvicultural treatments. The
existing stand condition was defined using the 10
th
-year post-
treatment measurement data for all sites, except Fallingsnow,
for which 16
th
-year post-treatment data were used. Total tree
height, diameter at breast height, number of tree stems per
hectare (SPH), and stocking information were used as inputs
to the simulation model, combining the data from all blocks.
We projected SPH, gross total volume (GTV), gross mer-
chantable volume (GMV), basal area (BA), quadratic mean
diameter (QMD), and top height (TH) of each crop species
for each treatment combination.
BUCK-2 (Zakrzewski et al. 2010) was used to optimize the
possible product mix and estimate the future value of fibre
produced. Projected SPH and GTV, and mean diameter and
top height were used as inputs. In this optimization tool, the
desired size limits (length and minimum diameter) of round-
wood timber products and rankings of log categories (sawlogs,
veneer logs, and pulp wood) are user-defined. Though BUCK-
2 does not account for the price of the output lumber, its objec-
tive is to maximize the total monetary value of a sum of the
5
Vegetation management treatments are sometimes referred as
“release treatments”. These terms are interchangeably used
throughout this paper.
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ma r Ch /apr il 2011, v ol . 87, No. 2 — Th e Fo r esTr y Ch r oNiCl e 263
user-defined timber products at the tree level, where the proxy
for that value is a user-defined ranking of the product. In other
words, the optimum timber product mix is such that it maxi-
mizes volume proportion of the most profitable timber prod-
uct at the tree level. The constraints are user-defined timber
product sizes (constants): minimum top diameters and fixed
log lengths. We used 2.44 m (8 feet) minimum length and 30
cm minimum diameter for the first category of sawlog (Rank
I), 2.44 m (8 feet) minimum length and 20 cm minimum
diameter for the second category of sawlog (Rank II), 1.22 m
(4 feet) minimum length and 10 cm minimum diameter for
pulp logs (Rank III), and a kerf factor of 1.5 cm (assuming
wastage allowance for circular saw), as constraints to optimize
the proportion of wood products expected from the projected
Table 2. Treatment costs, projected gross total volume and merchantable volume of crop tree species at 70 years by study site
and treatment.
Study sites
Bending Leether Nipigon Nipigon
Metric Treatment
a
Lake Espanola Fallingsnow Lake Hele Corrigal Average
Costs ASg 202.0 240.0 190.0 210.0 ––210.5
(CAD$ ha
-1
)
b
ASt ––268.9 –––268.9
BBt 535.0 ––455.0 495.0
BS 550.0 600.0 500.0 550.0 ––550.3
BSg ––625.3 625.3
CON 0.0 0.0 0.0 0.0 0.0 0.0 0.0
CRb ––1750.0 –––1750.0
CRg 1124.8 1162.8 2011.8 1132.8 2248.9 2248.9 1655.0
EZg ––910.3 910.3
MBg 475.3 ––475.3
RHg ––426.6 395.0 410.8
SGh ––675.3 675.3
SIL ––650.3 ––650.3
GTV ASg 205 232 260 208 ––226.3
(m
3
ha
-1
)
c
ASt ––287 –––287.5
BBt 165 –––169 167.0
BS 167 172 248 169 ––189.0
BSg ––177 177.0
CON 182 181 204 179 131 153 171.6
CRb ––299 –––299.0
CRg 288 280 302 296 180 190 256.1
EZg ––170 170.3
MBg 251 ––250.7
RHg ––196 186 191.1
SGh ––169 168.7
SIL ––255 ––255.0
Merchantable volume ASg 173 (5) 186 (5) 208 (51) 185 (157) ––188 (54)
(m
3
ha
-1
)
c,d
BBt 132 (70) ––132 (147) 132 (108)
BS 159 (3) 138 (6) 199 (114) 142 (72) ––159 (49)
BSg ––138 (120) 138 (120)
CON 154 (60) 145 (109) 163 (172) 153 (252) 104 (60) 124 (100) 140 (126)
CRb ––260 (9) ––260 (9)
CRg 244 (2) 224 (2) 266 (1) 254 (73) 148 (2) 150 (16) 214 (16)
EZg ––138 (218) 138 (218)
MBg 201 (11) ––201 (11)
RHg ––155 (23) 147 (53) 151 (38)
SGh ––133 (91) 133 (91)
SIL ––204 (135) ––204 (135)
a
Treatment descriptions: ASg – aerial application of Vision (glyphosate) from a Bell 206 helicopter; ASt – aerial application of Release (triclopyr) from a Bell 206 helicopter; BBt
basal Bark application of Release (triclopyr) with backpack sprayer (Thin Line); BS – motor-manual brush saw cutting at 18 cm above ground without herbicide; BSg – brush saw
cutting with stump herbicide applicator attachment with Vision (glyphosate); CON – untreated control; CRb – continuous removal of vegetation by annual applications of brush
saws; CRg – continuous removal of vegetation by annual applications of Vision (glyphosate); EZg – EZ-Ject injection of Vision (glyphosate) into competing basal stem; MBg – Back-
pack mist blower application of Vision (glyphosate); RHg – Reel and hose application of Vision (glyphosate); SGh – spot gun application of Velpar-L (hexazinone); SIL – mechanical
brush cutting at 33 cm above ground with Silvana Selective/Ford Versatile tractor
b
Costs are based on non-crop stocking level and distance of the site from the nearest major centre and are calculated on a 500-ha plot basis.
c
Volumes were projected using FVS
Ontario
.
d
Values in parentheses are the non-crop (hardwoods – mainly poplar) merchantable volumes.
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Citations
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01 Jan 1985-

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Abstract: Highlights •� When a young stand grows and gets older, the work time needed to make pre-commercial thinning increases. The stands of Norway spruce (Picea abies (L.) Karst.), Scots pine (Pinus sylvestris L.) and hardwoods (Betula spp.) required an additional 8.2%, 5.2%, and 3.3% work-time per year, respectively. Abstract Labour models were developed to estimate the time required to Pre-Commercially Thin (PCT) with a clearing saw 4- to 20-year-old stands of the main commercial tree species in Finland. Labour (i.e., work-time consumption) was estimated from the density and stem diameter of the removal of 448 stands via an existing work productivity function. The removal based estimator attainedwasusedasthebasisforapriorimixedlinearregressionmodels. �Themainfindingwas � that when a young stand grows and gets older, the work time needed to make a PCT increases. The stands of Norway spruce (Picea abies (L.) Karst.), Scots pine (Pinus sylvestris L.) and hard- woods (Betula spp.) required an additional 8.2%, 5.2%, and 3.3% work-time per year, respectively. Site fertility also played a role in that the most fertile site (mesic OMT) had an estimated labour requirement 114% higher than that for dryish VT. We also note that, per unit area, small stands require less labour than large ones and soil preparation method had a minor effect on the labour estimate. The stands which had previously gone through PCT were separately analysed. In those stands,�theonlysignificantvaria bleconcerningthelabourestima tewasage. �Theapriorimodels � described here can help foresters to develop economic management programmes and issue quotes for forestry services.

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Cites background from "Benefit–cost Analysis of Vegetation..."

  • ...1997; Saksa and Miina 2010) and profitability of various release treatment techniques (Homagain et al. 2011a; Homagain et al. 2011b)....

    [...]

  • ...…Opio et al. (2009) presented a protocol to help determine the number of times a stand requires treatment and a few studies have compared cost efficiency (Bell et al. 1997; Saksa and Miina 2010) and profitability of various release treatment techniques (Homagain et al. 2011a; Homagain et al. 2011b)....

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Journal ArticleDOI
16 Aug 2013-Forestry Chronicle
TL;DR: The Green River precommercial thinning trials were established between 1959 and 1961 in naturally regenerating balsam fir-dominated stands an average of eight years after overstory removal, and both PCT and VM were observed to support positive landowner NPVs through discount rates in excess of 6%.
Abstract: The Green River precommercial thinning (PCT) trials were established between 1959 and 1961 in naturally regenerating balsam fir (Abies balsamea [L.] Mill.)-dominated stands an average of eight years after overstory removal. Following clearcut harvest of three of the study's six replicates in the fall of 2008, the rotation-length effects of PCT and vegetation management (VM; deciduous tree and brush suppression) on the forest value chain were integrated into a spreadsheet-based model that estimates the net present value (NPV) of these silvicultural treatments. Assuming costs and prices near recent values, both PCT and VM were observed to support positive landowner NPVs through discount rates in excess of 6%. At a discount rate of 4% and an age where sawlog production was maximized, PCT and VM offered similar NPV (>$550/ha). Landowners that can attract buyers willing to pay a premium for wood from thinned stands (equal to the sum of reduced operational overhead charges, harvesting and sawmilling costs and i...

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Journal ArticleDOI

13 citations


Cites background from "Benefit–cost Analysis of Vegetation..."

  • ...Even though herbicides are effective in EC (Homagain et al. 2011) and were previously in common use (Hytönen & Jylhä 2008; Homagain et al. 2011), consumer opposition and sustainable forest certification currently restrict their use in Finland (Suomen PEFC-standardi 2009; FSC standard for Finland…...

    [...]

  • ...Even though herbicides are effective in EC (Homagain et al. 2011) and were previously in common use (Hytönen & Jylhä 2008; Homagain et al....

    [...]

  • ...2011) and were previously in common use (Hytönen & Jylhä 2008; Homagain et al. 2011), consumer opposition and sustainable forest certification currently restrict their use in Finland (Suomen PEFC-standardi 2009; FSC standard for Finland 2009)....

    [...]


Journal ArticleDOI
Karri Uotila1, Timo Saksa1Institutions (1)
TL;DR: It is found that EC substantially reduced canopy competition and, consequently, the mean diameter of released spruce grew 21–32% faster depending on the site, and EC can reduce the cost of pre-commercial thinning because EC reduced the estimated time needed for subsequent management by 18–49%.
Abstract: Young Norway spruce stands (Picea abies [L.] Karst) are typically cleaned of non-crop species on one or several occasions during young stand stage. In order to objectively evaluate the perceived benefits of early cleaning (EC), we studied the effects of EC on three study sites 2–2.5 years after receiving the treatment. Experiments were established as a randomised complete block design with a total of 40 blocks. Although height growth and mortality were not significantly affected, we found that EC substantially reduced canopy competition and, consequently, the mean diameter of released spruce grew 21–32% faster depending on the site. Furthermore, non-crop trees that were cleared during EC had fewer sprouts in two of the three sites and the sprouts were substantially smaller than the corresponding non-crop trees on control in all sites. EC can reduce the cost of pre-commercial thinning because EC reduced the estimated time needed for subsequent management by 18–49%. Thus, EC offers forest owners and manager...

12 citations


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Book
01 Jan 1985-

257 citations


Journal ArticleDOI
01 Jan 2006-Forestry
Abstract: The management of competing vegetation has evolved with forest management over the past half century and is now an integral part of modern forestry practice in many parts of the world. Vegetation management, primarily using herbicides, has proven especially important in the establishment of high-yield forest plantations. There has been a substantial amount of research quantifying the wood yield gains from the management of competing vegetation over the past few decades. We reviewed results from 60 of the longest-term studies in North America (Canada and US), South Africa, South America (Brazil) and New Zealand/Australia. About three-quarters of the studies reported 30-500 per cent increases in wood volume from the most effective vegetation treatments. In North America, where the longest-term studies for a variety of tree species were between 10 and 35 years old (or from 20-100 per cent of rotation age), gains in wood volume ranged from 4-11 800 per cent in Pacific north-western forests, 14-5840 per cent in the south-eastern forests, and 49-5478 per cent in northern forests. In South Africa and South America (Brazil), several full-rotation (6-8 years) studies with eucalyptus indicate 29-122 per cent and 10-179 per cent increases in wood volume yield, respectively, from effective vegetation management. In New Zealand, time gains of 1 to 4 years from early vegetation control in radiata pine plantations translated into 7-27 per cent increases in wood volume yield over a 25- to 30-year rotation.

250 citations


Journal ArticleDOI
Dean G. Thompson1, Douglas G. Pitt1Institutions (1)
Abstract: Le present document passe en revue la recherche sur la gestion de la vegetation forestiere au Canada et les pratiques a cet egard depuis les annees 1990 jusqu'a ce jour. Les resultats de cet examen revelent une progression continue vers un programme plus integre et plus respectueux de l'environnement, axe, fort judicieusement sur les principales especes concurrentes et les especes du peuplement final. La collaboration accrue du monde universitaire, des gouvernements et de l'industrie s'est traduite par la parution de plus de 666 nouvelles publications scientifiques qui ont considerablement enrichi la base des connaissances actuelles. La mise au point au Canada du Chondrostereum purpureum comme premier bioherbicide et l'utilisation de semis gorges d'elements nutritifs afin d'accroitre le taux de reussite de l'etablissement sont considerees comme des grandes percees de la recherche. Parmi les tendances recentes en matiere de pratiques operationnelles figurent le recours a des methodes de gestion plus intensive dans les stations a indice de qualite plus eleve et l'adoption de methodes novatrices (p. ex., semis gorges d'elements nutritifs) et de techniques de pointe (p. ex., systeme de guidage electronique des applications aeriennes d'herbicide). Meme si les donnees sur le taux de croissance a long terme des semis et les analyses economiques mettant en evidence les effets positifs sur le plan couts-avantages font encore defaut, l'evolution incessante du programme ameliorera sans aucun doute l'approvisionnement durable en bois et reduira au minimum les repercussions sur le milieu forestier.

94 citations


Book
17 Jun 2005-
Abstract: List of Figures. List of Tables. About the Authors. Preface. Acknowledgments. Part I: The Foundation. Chapter 1 Introduction to Financial Management. 1.1 Financial Management and the Financial Manager. 1.2 Corporate Form of Business Organization. 1.3 The Goal of Financial Management. 1.4 Accounting Profit versus Economic Profit. 1.5 The Agency Relationship. 1.6 Organization of the Book. Chapter 2 Interpreting Financial Statements. 2.1 Basics of Annual Reports and Financial Statements. 2.2 Balance Sheet. 2.3 Income Statement. 2.4 Statement of Cash Flows. 2.5 Statement of Retained Earnings. 2.6 Common--size Statements. 2.7 Notes to Financial Statements. 2.8 Quality of Earnings. 2.9 Other Issues. Chapter 3 Interpreting Financial Ratios. 3.1 Financial Ratio Analysis. 3.2 Liquidity Ratios. 3.3 Debt Management Ratios. 3.4 Asset Management Ratios. 3.5 Profitability Ratios. 3.6 Market Value Ratios. 3.7 Uses of Financial Ratios. 3.8 Limitations of Financial Ratio Analysis. Chapter 4 The Time Value of Money. 4.1 Central Concepts in Finance. 4.2 Future Value of a Present Amount. 4.3 Present Value of a Future Amount. 4.4 Future Value of an Annuity. 4.5 Present Value of an Annuity. 4.6 Present Value of a Perpetuity. 4.7 Compounding Frequencies. 4.8 Nominal and Effective Interest Rates. 4.9 Solving for an Unknown Interest Rate. 4.10 Other Time Value Applications. Chapter 5 Valuation. 5.1 Valuation Fundamentals. 5.2 Bond Characteristics and Features. 5.3 Bond Valuation. 5.4 Bond Pricing Relationships. 5.5 Interest Rate Risk. 5.6 Bond Yields. 5.7 Bond Trading and Price Reporting. 5.8 Preferred Stock Features and Valuation. 5.9 Common Stock Characteristics and Features. 5.10 Common Stock Valuation. Part II: Working Capital Management Decisions. Chapter 6 Working Capital Management. 6.1 Introduction to Working Capital Management. 6.2 Approaches to Working Capital Management. 6.3 Operating and Cash Conversion Cycles. 6.4 Cash Management. 6.5 Accounts Receivable Management. 6.6 Inventory Management. Part III: Long--term Investment Decisions. Chapter 7 Capital Investments and Cash Flow Analysis. 7.1 Capital Investment Decisions. 7.2 Project Classifications. 7.3 Capital Budgeting Process. 7.4 Guidelines for Estimating Project Cash Flows. 7.5 Cash Flow Components. 7.6 Tax Effects of Selling Depreciable Assets. 7.7 Applying Cash Flow Analysis. 7.8 Capital Budgeting for the Multinational Corporation. Chapter 8 Capital Budgeting. 8.1 Project Classifications and Analysis. 8.2 Net Present Value. 8.3 Profitability Index. 8.4 Internal Rate of Return. 8.5 Modified Internal Rate of Return. 8.6 Payback Period. 8.7 Discounted Payback Period. 8.8 Summary of Capital Budgeting Techniques. 8.9 Mutually Exclusive Project Decisions. 8.10 Capital Rationing Decisions. 8.11 Capital Budgeting Techniques in Theory and Practice. Chapter 9 Risk Analysis. 9.1 Types of Risk in Capital Budgeting. 9.2 Assessing Single--Project Risk. 9.3 Assessing Market Risk. 9.4 Adjusting for Risk. 9.5 Risk Analysis in Multinational Corporations. 9.6 Risk Analysis in Theory and Practice. Part IV: Long--term Financing Decisions. Chapter 10 Raising Funds and Cost of Capital. 10.1 Financial Markets. 10.2 Investment Banks. 10.3 The Decision to Go Public. 10.4 Different Methods of Issuing New Securities. 10.5 Public Offer. 10.6 Private Placement. 10.7 Costs of Issuing New Securities. 10.8 Cost of Capital Concept. 10.9 Cost of Capital Components. 10.10 Weighted Average Cost of Capital. 10.11 Marginal Cost of Capital. Chapter 11 Capital Structure. 11.1 The Financing Mix. 11.2 Understanding Financial Risk. 11.3 Capital Structure and the Value of the Firm. 11.4 Modigliani--Miller Theorem with Corporate Taxes. 11.5 The Costs of Financial Distress. 11.6 Tradeoff Theory of Optimal Capital Structure. 11.7 Pecking Order Theory of Capital Structure. 11.8 Stakeholder Theory of Capital Structure. 11.9 Capital Structure in Practice. 11.10 Bankruptcy. Chapter 12 Dividend Policy. 12.1 Dividends and Dividend Policy. 12.2 The Dividend Puzzle. 12.3 Factors Influencing the Dividend Decision. 12.4 Dividend Policies. 12.5 Stock Repurchases. 12.6 Cash Dividends versus Stock Repurchases. 12.7 Dividend Reinvestment Plans. 12.8 Stock Dividends. 12.9 Stock Splits and Reverse Splits. Glossary. Index

94 citations


Journal ArticleDOI
Nelson Thiffault, Vincent Roy1Institutions (1)
Abstract: Vegetation management is crucial to meeting the objectives of forest plantations. Following public hearing processes, chemical herbicides were banned on Crown forest lands in Quebec (Canada) in 2001. Release now mainly relies on mechanical treatments. Our objectives are to review the historical context and the research conducted over the past 15 years that has led to the province’s current vegetation management strategy and to identify the major challenges of vegetation management being faced in Quebec in the context of intensive silviculture and ecosystem-based management. Research has led to an integrated management model without herbicides, adapted to the ecological characteristics of reforestation sites. The Quebec experience illustrates how, on most sites, vegetation management that is based on early reforestation, the use of tall planting stock and intensive mechanical release brings crop trees to the free-to-grow stage without the use of herbicides and without resulting in major effects on vegetation diversity. This vegetation management strategy is an asset in the implementation of ecosystem-based management. However, research demonstrates that mechanical release alone does not promote optimal crop-tree growth, due to rapid resprouting or suckering of competitors and competition from herbaceous species. Therefore, the current strategy poses important challenges in the management of plantations where the objective is to maximise wood production.

70 citations


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