Socio-Economic Evaluation of the Potential for Australian Tree Species in the Philippines

Crop Production/Industries,

International Accounting Standard (IAS) 41: What are the implications for reporting forest assets?

This paper investigates the implications of International Accounting Standard 41 (IAS 41) for European Union (EU) entities reporting on material holdings of forest assets. To all intents and purposes, Australia has been a test for IAS 41 because of the close similarities between IAS 41 and the relevant Australian regulation on forestry that has been operational for the last four years. The Australian reporting experience is used to identify potential implications for EU reporting entities. Evidence suggests that constituents’ key concerns with IAS 41 relate to the measurement1 of biological assets at fair value and the inclusion in income of unrealised gains or losses from measuring these assets at fair value. These concerns are borne out by the Australian experiences. Evidence is presented that suggests that compliance with IAS 41 will allow statement preparers a choice of methods to determine the fair value of timber assets. Additionally, it seem likely that the recognition of unrealised gains and losses from timber assets from changes in fair value and the harvest of agricultural produce will markedly affect income statements, introducing greater volatility into reported income. The impact has been greater for government departments. The median timber gain expressed as a percentage of net profit ranged from 44.5% to 79.9% in individual years. An unresolved issue has been identified – do such accounting procedures reflect the nature of investment in forestry

Growth Modelling Components of the AFFFM

When developing the AFFFM, a conscious decision was made at an early stage to populate the model with as much data as possible. By doing so it was felt that the model would be more useful to a wider range of users. A module was developed which contains information about potential growth rates, harvest ages and log prices for a number of suitable timber species for the Atherton Tableland, the Darling Downs and the New England Tableland regions of eastern Australia. Data on the potential growth rate, harvest age and product mixtures for tree species suitable for plantations on the New England Tablelands and Darling Downs were generated using the Plantgro program. Users of the model from these areas can choose to load the appropriate values for the various species by specifying the location and soil type of the planned plantation. Data on the potential growth rate, harvest age and timber price for 31 species of cabinet timbers in Far North Queensland were also included. These data were obtained from a previous survey of forestry experts undertaken by Herbohn et al. (1999). This chapter outlines the process through which growth data used in the AFFFM were collected

Establishing a Reforestation Baseline in Community Forestry in Leyte

This paper discusses the collection of information to establish a reforestation baseline in community forestry in Leyte, Philippines. The paper outlines how baseline information about current nursery practices, including an assessment of seedling availability and quality and current levels of tree planting, will be used to assess the testing of intervention measures designed to overcome impediments identified as part of an ongoing research project.

Nature and objectives of the ACIAR Seedling Enhancement Project and overview of the workshop program

This paper introduces ACIAR project ASEM/2006/091 Enhancing Tree Seedling Supply via Economic and Policy Changes in the Philippines Nursery Sector – also referred to as the ACIAR Seedling Enhancement Project. It provides an overview of the project and an outline of the role of the End of Project Workshop and Workshop Proceedings

Using Financial Analysis Techniques in Forestry Research

Previous modules introduced the principles and methods of Discounted Cash Flow (DCF) and Cost Benefit Analysis (CBA) in relation to forestry projects. The current module extends the discussion of DCF to include its use in financial analyses. The purpose of CBA is to determine whether investment projects (used in the widest sense) are worthwhile from a social perspective, taking into account all costs and benefits including positive and negative externalities. In contrast, the focal point of financial analysis is assessing the impact of the project of the wealth of the individual or firm considering the project. In this module, concepts and methods of financial analysis (FA) will be introduced, and then applied to a case study of financial evaluation of a forestry project

Data Collection Methods in Forestry Socio-Economic Research

Data collection is an important component of the research process, yielding facts, figures and views which are subsequently analysed and manipulated in various ways. This module outlines some useful data collection techniques for socio-economic data - including surveys of individuals in a target population, data collection from groups, and scenario development - with reference to the appraisal of forestry projects. The coverage is not exhaustive, but focuses on some of the techniques that have frequent application in the area of forestry and resource management research

Designing, Developing and Testing Financial Models for Non-industrial Private Forestry

This paper describes experiences in the development and testing of three distinct financial models to support farm forestry decisions involving non-traditional tree species in northern Australia and in the Philippines. A variety of options were examined with respect to model design, yield prediction, computing platform, forestry performance criteria and other features. Two of the models focus on the forestry enterprise in isolation, while the third evaluates forestry within the context of the overall farm business. It is found that choice of model design depends on the particular type of application intended and availability of financial data for this application. Some complementarities were gained in replicating features when progressing from one model to the next. Model construction and testing were challenging tasks requiring considerable funds and for two of the models proceeding over a number of years. Validation involved the gradual gaining of confidence in a model as it progressed through various versions. For the more complex models, greater effort in development of the user interface was found to be warranted. The models have proved more suitable for use by extension agents than individual landholders. Even with major resource inputs into model development, a number of desirable additional features can be identified.

Financial Analysis of Smallholder Forestry in Leyte: Past Findings and Present Information Needs

The objective of this research is to develop financial models for a number of exotic and indigenous tree species in Leyte, and hence to predict financial performance for these species, in the context of smallholder forestry on registered tree farms. A further objective is to estimate the net increase in financial returns which can be obtained from improved silviculture

Potential Economic Impact of Improving Returns to Smallholder Tree-Farmers In Leyte: A Cost Benefit Analysis of ACIAR Project ASEM/2003/052

This paper presents the results of a cost benefit analysis of the likely impact of ASEM/2003/052 Improving financial returns to smallholder tree farmers in the Philippines. Three main categories of project benefits are identified which coincide with short, medium and long term outcomes, namely: (1) improved returns to existing tree farmers from increased volume and quality of merchantable timber combined with higher stumpage prices flowing from improved market access; calculated to have a net present value of AU$2.4million, (2) improved returns to existing tree farmers from subsequent rotations of tree farms from increased volume and quality of merchantable timber from better management and prices, calculated to have a net present value of AU$3.9million, and (3) expansion of the area of tree farms planted due to the higher returns available, and attributable to, project outputs