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2008 International Congress, August 26-29, 2008, Ghent, Belgium >
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http://purl.umn.edu/44178
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| Title: | Economic analysis of field afforestation and forest clearance for cultivation in Finland |
| Authors: | Hyytiainen, Kari
Leppanen, J.
Pahkasalo, T. |
| Keywords: | Common Agricultural Policy
energy grass
incentives
land use |
| Issue Date: | 2008 |
| Abstract: | Rational land use decisions of private
landowners are analysed in the framework of Common
Agricultural Policy and other public support schemes
effective in Finland in 2003. Net present values are
computed for a marginal hectare of a typical Finnish
farm. Three alternative land uses are considered:
traditional cultivation of oats (Avena sativa L.),
cultivation of reed canary grass (Phalaris Arundinacea
L.) for energy production, and production of Norway
spruce (Picea abies [L.] Karst.) timber. Both arable land
and forested land are considered as initial states.
Experimental data from 38 afforested stands and
distance-independent individual-tree stand growth
model are used for computing discounted net returns
from forestry. Statistics on market prices, average
yields, prices and costs are used for obtaining estimates
of land value under agricultural and energy production.
Cultivation of energy grass gives clearly the highest
economic outcome for arable land, but it has limited
demand only in the neighbourhood of thermal power
stations. Maintaining arable lands under traditional
food production gives higher land value than
afforestation. Without an option for agricultural use,
public support makes afforestation investments
profitable even for the least successfully established
forest stands. However, possibilities to sell or to rent out
retain arable lands under agricultural production, and
explain poor success of the latest afforestation
programme. Clearing additional forestland for
agricultural production turns rational if clearing of the
site is inexpensive, relative value growth of the existing
timber stock is low, and future prospects of agricultural
production are dependent on scale advantages. |
| URI: | http://purl.umn.edu/44178 |
| Institution/Association: | European Association of Agricultural Economists>2008 International Congress, August 26-29, 2008, Ghent, Belgium |
| Total Pages: | 7 |
| Collections: | 2008 International Congress, August 26-29, 2008, Ghent, Belgium
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