A financial analysis of rain forest silviculture in southwestern Sri Lanka

Abstract We examine the financial aspects of three silvicultural systems to encourage the sustainability of valuable hardwood species in mixed-dipterocarp forests of southwest Sri Lanka. We compare the net present value (NPV) of the current forest management approach (diameter limit harvests) with shelterwood harvests that promote light hardwood timber species. In this analysis, we also consider the potential of enrichment planting various precious timber (Diospyros quaesita — calamander), and non-timber forest product (NTFP) species (Caryota urens — fishtail palm; Elettaria cardamomum var. major — cardamom; Calamus zeylanicus — rattan) in conjunction with timber harvests. Two real (inflation adjusted) discount rates were used, 4 and 6%, respectively. Results show that when real discount rates are low (4%), and advance regeneration is present, NPV is highest for the one-cut shelterwood (US $9983 ha−1). At a high discount rate (6%), reflecting the current short-term concession system and unstable rights to harvest, and where no advance regeneration was present, the diameter limit system (US $7173 ha−1) was the optimum. On sites with advanced regeneration, the one-cut shelterwood system is clearly preferable. For all but rattan, shelterwood treatments provide higher NPVs for NTFPs than diameter limit cuttings primarily because of the higher light regimes and more growing space made available early in the rotation. The value for tea cultivation (US $26,000 ha−1) far exceeds the value of managing these lands for timber alone, explaining the dramatic expansion in tea plantations on private lands. However, our results suggest that managing these lands for a combination of timber and enrichment plantings of NTFPs (US $23,000 ha−1) can be comparable to tea plantations. By managing for NTFPs and timber, forest managers have new opportunities to solve the old problems of high-grading and land-use conversion.