Abstract

The objective of the research were to determine the volume increments, to find out the optimum ages and maximum increment, to know which plant effort was more profitable than each types exploitations, to analyze the financial feasibility and to know the farmers' financial needs and the level of interest by sensitivity analysis. This research was conducted in community forest of Sungai Merdeka Village Km. 38 Samboja District, Kutai Kartanegara Sub District of East Kalimantan Province. The research data was taken based on a purpose sampling system in the research plots of each Model I to V covering an area of 0.25 ha. Model I consisted by super teak 15 years 10x2 m spacing combined with king grass with an interest rate of 5% resulted in an estimated 6.5-year Pay Back Period (PP); Net Present Value (NPV) Rp. 186,346,058, -; Net Benefit/Cost (B/C) Ratio 3.99; Internal Rate of Return (IRR) 28%; Equivalent Annual Annuity (EAA) Rp. 12,122,078 and effort scale of 3 ha. Model II consisted by super teak 15 years 10x10 m spacing with an interest rate of 5% produce an estimated 18.5-year PP; Rp. (15,890,541,-) NPV; Net (B/C) Ratio to 0.72; (IRR) to 3%; (EAA) to Rp. (1,033,703,-) and (41) ha effort scale. Model III consisted by Solomon Teak 13 years 10x10 m spacing with an interest rate of 5% produce an estimated 10.4 year (PP); (NPV) to Rp. 97,546,242, -; Net (B/C) Ratio to 2.38; (IRR) to 10%; (EAA) to Rp. 6,345,523,- and 7 ha effort scale. Model IV consisted by sungkai 13 years 2x4 m spacing combined with papaya by an interest rate of 5% produce an estimated 13.1 years (PP) value; (NPV) to Rp. 41,099,472, -; Net (B/C) Ratio to 1.83; (IRR) to 22.5%; (EAA) to Rp. 2,673,580, - and 16 ha effort scale. Model V consisted by Sungkai 13 years with an interest rate of 5% produced an estimated 18.1 year (PP); (NPV) to Rp. -13.141,863, -; Net (B/C) Ratio 0.73; (IRR) to 3.2%; (EAA) to Rp. -854,897, - and (49) ha effort scale. Its concluded that by 5% discount factor, Model I, Model III and Model IV were feasible because they have an IRR value higher than Minimum Acceptable Rate (MAR) 5% and Net B/C Ratio higher than 1. Model II and Model V were not feasible because they have an IRR value lower than MAR 5% and Net B/C Ratio lower than 1. The optimum production of all models was reached at the ages of 25 years. The highest MAI was achieved in Model IV of 7.34 m3 ha-1 year-1 and the total volume was 183.56 m3 ha-1 year-1, while the lowest MAI was achieved in Model II of 6.25 m3 ha-1 year-1 and the total volume was 33.10 m3 ha-1 year-1. Based on the analysis of effort scale resulted that Model I could be the best choice and most feasible than other because it had the lowest effort scale value, while Model V was the least feasible option to be cultivated because it has the highest scale of effort. Model I, Model III and IV shown the NPV positive value to Rp. 186,346,058, -; Rp.97,546,242, - and Rp.41,099,472, -, while Model II and Model IV shown the negative value of Rp.(15,590,541,-) and Rp.(13,141,863,-).

Highlights

  • Plantations are very important to support forests in the world, including natural resources, and government policies in climate change

  • The approach used in this study is to predict the wood production potential of a forest area for the supply of processing industries, as well as to calculate the estimated financial conditions described in the analysis of internal rate of return (IRR) and net present value (NPV) (Gardingen et al, 2003; Lahjie et al, 2018; Sandalayuk et al, 2019; Winarni, 2017)

  • The conclusions obtained from the resulted of the recapitulation of financial analysis that was cultivated in agroforestry and monoculture with a 5% discount factor, namely the exploitation of Model I, Model III and Model IV were feasible because they have an Internal Rate of Return (IRR) value higher than Minimum Acceptable Rate (MAR) 5% and Net B / C Ratio higher from 1

Read more

Summary

Introduction

Plantations are very important to support forests in the world, including natural resources, and government policies in climate change. The national forestry industry plays an important role in the economic and social fields This is because the volume of production has a significant impact on a forestry concession area (Vanzetti et al, 2018; Mulatu et al, 2016; Ruslim, 2011). Ethiopia has experienced long-term deforestation that has widespread consequences for all aspects of life and human economic activities, but the conventional financial system has not been able to analyze the value of economic sustainability in the development of a country's environment, especially in dealing with the problem of deforestation (Narita et al, 2018; Kupčák, 2012; Siregar et al, 2017) This analysis model can estiamate the potenstial expenditure that will be made in reducing all risks of future (Bernetti et al, 2011; Barkin et al, 2013; Mohammad et al, 2018; Ruslim, 2016). Teak which has many advantages as forestry plant has been well developed in various regions of Java, while the development in the East Kalimantan region carried out by the public and private sectors results in varied growth differences (Murtinah et al, 2015; Khasanah et al, 2015)

Objectives
Methods
Results
Conclusion

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.