The ‘Forest rent theory’ as a complement to the ‘Land rent theory’ for the economic analyses of forest assets

Abstract

Economic analyses of forest assets are traditionally based on financial indicators – obtained with help of discounted cash flows. Noteworthy in this context is the Land rent theory – Lrt, also known as land expectation value. In opposition to the Lrt the Forest rent theory - Frt was developed. With this study it was aimed to present the Frt approach, complementarily to the Lrt, in the context of Pinus taeda plantation grown in southern Brazil. The presented Frt approach allows the evaluation of the forest asset by a different perspective, with emphasis on the capacity of the asset to generate wealth on a sustainable basis. It was concluded that the Frt is an interesting and complementarily approach to the Lrt. According to the Frt, regulated or close-to-regulation Pinus taeda plantations, aiming at maximizing the economic performance on a sustainable basis, should consider production cycles >30 years. The multiproduct management strategy presents twice as much economic outputs than the pulpwood one, regardless of the length of the production cycle (16-30 years). The use of Frt complementarily to the traditional cash flow analyses, reinforce the economic viability of multiproduct management strategies with production cycles longer than the ones commonly regarded.