PROFITABILITY OF THE MANAGEMENT OF DECIDUOUS FOREST STANDS IN LATVIA

References: 17th International Multidisciplinary Scientific GeoConference SGEM 2017, www.sgemviennagreen.org, SGEM2017 Vienna GREEN Conference Proceedings, ISBN 978-619-7408-27-0 / ISSN 1314-2704, 27 - 29 November, 2017, Vol. 17, Issue 33, 513-520 pp; DOI: 10.5593/sgem2017H/33/S14.064

ABSTRACT

The research aim is to identify a financial gain a forest owner can make from the management of a deciduous forest stand in Latvia provided that the stand is logged at the final (clear) felling age and the revenue is earned selling the wood as roundwood assortments and residue biomass or only as biomass (BM). The present research analysed the situation with forests owned by natural persons of the Republic of Latvia and identified the amounts of revenue a forest owner can earn growing deciduous – birch, black alder, grey alder and aspen – forest stands in various forest types. To identify the amount of revenue an owner can earn from a ha of deciduous forest stand, the calculations took into account the costs of reforestation and thinning per forest rotation period as well as the costs of logging and selling the roundwood and residue biomass produced. The potential revenues were calculated based on two scenarios: 1) the owner sells both roundwood assortments and the BM of tree branches; 2) the entire amount of wood is sold as BM. The profitability is calculated as the difference between revenue and cost, taking into account taxes and duties set in the Republic of Latvia. Such a calculation method was employed because of the high proportion of overgrown forest stands in Latvia, as the amount of high-quality liquid timber acquired from such stands is often smaller because part of the trees has various defects and decay that could considerably decrease the revenue. For these reasons, the owner could make a decision to sell the entire amount of timber from final felling as BM. The research has found that birch stands yield the highest revenue provided that the wood is sold as roundwood and residue BM, thereby earning, on average, 2900 EUR ha-1. In contrast, grey alder stands, depending on the prices on roundwood assortments and residue BM, generate the same amount of revenue in both scenarios.

Keywords: biomass, birch, aspen, black alder, grey alder, revenue