Estimation of cost-effectiveness of poplar wood pro­duction in Ravni Srem by applying the net present value method

Abstract

The commercial cost-effectiveness of poplar cultivation was analyzed based on the indicator for the assessment of agriculture and forestry projects-net present value (NPV). The analysis was made for the plantations of poplar clone I-214 in the area of Ravni Srem, under different rotations and on different soil types. The aim of the research was to assess the cost-effectiveness of the invested financials in wood production in poplar plantations, based on the analysis of costs and receipts in different periods of plantation age, using the net present value method. Under the calculation discount rate of 12%, the project for the production cycle of 24-42 years was not cost-effective from the economic aspect. Investment under calculation discount rate 4% was financially justified in all the study cases. The discount rate of 6% can be accepted by shorter production cycles in the younger stands (to the age of 28 years) on better sites (alluvial semigley). In the case of susceptibility analysis for NPV, it can be concluded that the NPV amounts for 13 study compartments within the analyzed scope of receipts and costs have a negative sign. This leads to a conclusion that the project is more susceptible to the changes in costs than to the changes in receipts in the concrete case at the discount rate of 12%.