Unit-1

Forest management and background

1.1 Forest management objectives

1.2 Forest management alternatives and analysis
1.3 Decision-making principles and models
1.4 Different forest management strategies in Nepal
1.5 Role of forests in economic development
1.5.1 Contribution in national economy
1.5.2 Role in local economy
Agriculture
Rural enterprises
1.5.3 Role of forest in livelihood
1.6 Forests, society and environment
1.6.1 Social benefits
1.6.2 Environmental benefits of forests

Unit-2
Concept and principle of sustainable forest management

2.1 Concept and principles of sustainable forest management

2.1.1 Concept, definition and principle of sustainable forest management
2.1.2 Criteria and indicators of sustainable forest management
2.1.3 Various forest certification schemes
2.2 Concept and practices of sustained yield
2.2.1 Concept, definition of sustained yield
2.2.2 Prerequisities for sustained yield
2.2.3 Limitations in Nepal‟s conditions
2.2.4 Yield types
2.2.5 Management steps for sustained yield

Unit-3
Forest valuation methods

3.1 Common valuation techniques

3.2 Time value of money only (review)
3.2.1 Interest rate
3.2.2 Discount rate
3.2.3 Inflation adjustment
3.3 Decision-making criteria
3.3.1 Present net worth
3.3.2 Benefit cost ratio
3.3.3 Land expectation value
3.3.4 Internal rate of return
Economic rate return
Financial rate or return
3.4 Risk and uncertainty evaluation
3.4.1 Risk management
3.4.2 Decision-making with uncertainty

Unit-4
Rotation

4.1 Concept and types of rotation

4.1.1 Concepts definitions
4.1.2 Types of rotations
4.1.3 Choice and length of rotation
4.2 Rotation determinations methods
4.2.1 Biological criteria
4.2.2 Financial/economic criteria
4.2.3 Social/environmental criteria

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 Unit-5
Forest regulations

5.1 Concepts and approaches

5.1.1 The normal forest concepts
5.1.2 Yield tables and yield regulations
5.2 Regulating plantation forest
5.2.1 Concepts
5.2.2 Applications
5.3 Regulating Natural forests
5.3.1 Concepts
5.3.2 Approaches
5.4 Allowable cut methods
5.4.1 Area control
5.4.2 Volume control
5.4.3 Combined area and volume control

Unit-6
Forest Policy

6.1 Policy formulation process

6.2 Local
6.3 National

Unit-7
Forests resources management plan

7.1 Forest resources management plan

7.1.1 Concept, definitions, objectives and limitations of forest management plan
7.1.2 Components of forest management plan
7.1.3 Forest management unit
7.2 Preparation of forest management plan
7.2.1 Data collection
Biophysical
Socio-economical
7.2.2 Maps and sketches
7.2.3 General format
7.2.4 Contents
7.2.5 Write up of management plan
7.2.6 Methods updating

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 Unit-1
Forest management and background

1.1 Forest management objectives

1.2 Forest management alternatives and analysis
1.3 Decision-making principles and models
1.4 Different forest management strategies in Nepal
1.5 Role of forests in economic development
1.5.1 Contribution in national economy
1.5.2 Role in local economy
Agriculture
Rural enterprises
1.5.3 Role of forest in livelihood
1.6 Forests, society and environment
1.6.1 Social benefits
1.6.2 Environmental benefits of forests

Definition

Forest management:

1. Forest Management is defined as the practical application of the scientific, technical and economic
principles of forestry.
2. Forest management is that branch of forestry whose function is the organization of a forest property
for management and maintenance, by ordering in time and places the various operations necessary for
the conservation, protection and improvement of the forest on the one hand, and the controlled
harvesting of the forest on the other.

1.1 Forest Management Objectives:

1. Primary objectives of good management are provision of the maximum benefit to the greatest number
of people for all time.
2. Forest may be managed primarily for productive purpose, for direct material benefits, or protective
purpose for, indirect benefits. It is depended upon the primary and secondary objectives of the owners.

General objectives of Forest Management:

1. Maintaining and as far as possible, raising the productive capacity of the soil and of the forest stands
consistent with the maximum site potential.
2. Promoting the protective effect of the forest against soil erosion, avalanches floods and protection of
the physical factors, such as natural scenery, local flora and fauna (bio-diversity)
3. Execution of silvicultural operations and regulation of felling in such a way so as to bring the forest to
a condition of as near normality as possible; in simple words, attainment of a normal forest is one of
the principle objectives.
4. Satisfaction of rights of the holder in respect of timber, firewood, grazing, etc. in particular and to meet
the basic requirement of the local population in general.
5. Providing the maximum possible volume of valuable timber for constructional and industrial proposes,
and other forest produces for meeting the market demands and securing the highest possible financial
results.

Specific Objective of Forest Management;

Special objects may be laid down for different regions/locations, with different site factors and forest types,
more suited for specific purpose. Some examples are given below:

1. Badly eroded areas and steep hill slopes may be constituted into a protection management, where the
special object will be protection, afforestation, soil and water conservation; satisfaction of only the
minimum social needs of the local population, ignoring consideration for market supplies and financial
returns.
2. In the watershed of municipal water supplies, irrigation and hydroelectric generation dams. The
special objectives being the maintenance of an undisturbed protective vegetative cover, all other forms
of use must be subordinated to it.
3. In the forest areas of natural scenic beauty, woodlands near urban habitation, recreation often being
the dominant object, timber feelings, grazing and even hunting will have to be entirely stopped. Such
forests serve as „magnificent playground for tired mankind seeking peace and spiritual strength‟.
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 4. Mixed miscellaneous open forests, heavily grazed and felled in the past, with low proportion of
valuable timber and industrially important species are clear felled and converted into plantation of
desired species-pure or simple compatible mixture. Such areas have extensively been constituted into
plantation of timber industrial in the inner terai and terai region with a view to meet increasing
demand for industrial raw material for pulp, match and plywood industries, e.g. Sargarnath
plantation.

Objective of forest management in context of Nepal;

1. Stabilize the supply of timber, fuel wood, fodder and other forestry products necessary for general
people in their day to day lives.
2. Increase the productivity of forest products to ensure the supply of raw materials to forest based
industries, which contribute to the national economy.
3. Increase income from employment opportunities in the forestry sector for underprivileged families.
4. Develop national parks, wildlife reserves and protected areas in order to preserve biological diversity to
maintain ecological processes and ecosystems and create recreational areas.
5. Help maintain land fertility through the conservation of soil and other watershed resources.
6. Adopt proper land use practices.

1.2 Forest Management alternatives and analysis;

1. There is seldom a single objective of forest management.

2. Owners usually have multiple objectives and they often conflict with each other.
3. Then, the owner must give up some or all of one objective to obtain the other. For example:
maximizing the forests present net worth and maintaining a continuous wood flow may conflict.
4. The owner can smooth out wood flow by cutting some stands before or after the age at which their
present net worth is maximum
5. But doing this causes the total present net worth to be less than the absolute maximum.
6. Some objectives may be mutually exclusive, for e.g. producing timber and maintaining wilderness on
the same land.
7. Actual management objectives, whether stated or unstated, are a mixture of several management
objectives. There is one correct mixture. This depends on the owner‟s objectives and the relative
importance placed on them.
8. The alternatives of forest management may be viewed as the many actions that a forest owner may
take to achieve his/her objectives.
9. These are the actions that can be taken in the field that will cause production of one or another, or
some mix, of forest products.
10. The actions an owner takes can include cutting, reforestation and construction.
11. Cutting the forest, or not cutting it, is one of the primary tools for accomplishing management
objectives.
12. Cutting can manipulate the forest to obtain desired forest products at the desired point in time.
13. Different kinds of cutting such as clear cutting or shelter wood cutting have different effects on the
residual stand and hence on the products.
14. Both the timing and type of cut are management alternatives that must be decided on.
15. Reforestation practices are a second major set of alternatives that must be chosen to obtain
management objectives.
16. Choices must be made between natural and artificial reforestation, the kind of site preparation if any,
and the species to be regenerated.
17. Reforestation practices affect density and species and hence forest production possibilities.
18. Construction is a third major set of alternatives that must be chosen.
19. There are many kind of construction and each can affect the amount of an objective obtained. For e.g.
road placement nor only affect timber harvest but also affects access for recreation and hunting,
aesthetic values and soil fertility.
20. Forest management alternatives are also defined by the physical production possibilities of the forest.
21. The physical production possibilities are determined by the basic biology of the forest being
management etc.
22. There are various analytical techniques for choosing between alternatives. Some techniques are
general and not unique to forestry whereas some techniques have been developed to answer particular
forestry problems.
23. Discounting and present net worth are general techniques applied to forestry problems whereas land
expectation value is special cases of discounting developed for forestry problems.
24. The simple method of discounting is calculating present value of investment.
Discounting,

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 𝑉𝑛
𝑉0 =
(1 + 𝑖)𝑛

Where,

𝑉0 = The present value

𝑉𝑛 = the future value in n year
i = interest rate
n = the years in which the payment occurs

The present net worth criterion is one of the widely used and accepted investment criteria recognizing
the time value of money.
The PNW is the algebraic sum of the discounted costs and revenues at a specified interest rate.

𝑛 1.0
𝑃𝑁𝑊 = 𝑡=𝑜 𝑅𝑡 − 𝐶𝑡
(1.0+𝑖)𝑡

Where,
𝑃𝑁𝑊 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡𝑛𝑒𝑤𝑜𝑟𝑡𝑕
𝑅𝑡 = 𝑡𝑕𝑒𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑜𝑟𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝐶𝑡 = 𝑡𝑕𝑒𝑐𝑜𝑠𝑡𝑜𝑟𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝑡 = 𝑡𝑕𝑒𝑦𝑒𝑎𝑟𝑖𝑛𝑤𝑕𝑖𝑐𝑕𝑡𝑕𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑜𝑐𝑐𝑢𝑟𝑠
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒

Analysis:

An investment is acceptable if the PNW is positive and is not acceptable if it is negative.

Land Expectation Value;

Land expectation value is nothing more than a special case of PNW that has certain restrictive assumptions
made on it. These are:

 Land value is zero

 The land has no residual stand
 The land will be forested in perpetuity
 The cash flows from the forest will be the same in perpetuity.

(1.0+𝑖)𝑛
Land expectation value, 𝑉𝑒 = 𝑉0 ×
(1.0+𝑖)𝑛 −1.0
Where,
𝑉𝑒 = 𝑡𝑕𝑒𝑙𝑎𝑛𝑑𝑒𝑥𝑝𝑒𝑐𝑡𝑎𝑡𝑖𝑜𝑛𝑣𝑎𝑙𝑢𝑒
𝑉0 = 𝑡𝑕𝑒 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒𝑜𝑓𝑎𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑎𝑙𝑝𝑒𝑟𝑖𝑜𝑑𝑖𝑐𝑎𝑛𝑛𝑢𝑖𝑡𝑦𝑡𝑕𝑎𝑡𝑤𝑖𝑙𝑙𝑏𝑒𝑒𝑣𝑒𝑟𝑦𝑛𝑦𝑒𝑎𝑟
𝑛 = 𝑡𝑕𝑒𝑛𝑢𝑚𝑏𝑒𝑟𝑜𝑓𝑦𝑒𝑎𝑟𝑠𝑏𝑒𝑡𝑤𝑒𝑒𝑛𝑎𝑛𝑛𝑢𝑖𝑡𝑦𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒
Analysis:

1. Invest if land expectation value is greater that market value.

2. Analytical techniques provide guidelines for choosing between courses of action. They tell us what will
happen if all assumptions and projections used in the analysis are fulfilled.
3. Analytical results must be considered guidelines and not irrevocable answer because projections of
variable (such as yield) contain errors and not always met and the analytical models are seldom
perfect.

1.3 Decision making principles and models:

1. Forest management objectives and alternatives together form a decision making model.
2. Decisions making models may have several variants, some may be more complicated whereas some as
less complicated.
3. The following diagram represents a general decision making model adapted in forest management.

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 Decision maker

Objectives

Alternatives

Constraints

Decision

Choose alternatives Do nothing More data

Exit to Exit to not

Implementation Implementation

Figure: A rudimentary decision making model

1. Decision Maker:

 A decision maker is at the top and is ultimately responsible for deciding which alternative is chosen.
 A decision maker decides on the basis of available data and their analysis, consultation with staff
members.

2. Objectives:

 In this step, objectives are identified and conflicting objectives resolved.

 Sometimes decision making process often focuses on problems and causes their resolution.
 Ideally, decision maker has one or more objectives identified and provide information for listing
alternatives.

3. Alternatives:

 Alternatives are the different courses of action that managers may take to reach their objectives.
 In the idealized system the decision makers lists the alternatives courses of action they must take to
reach their objectives.
 Each alternative may partially or fully achieves the objectives.

4. Constraints:

 These are barriers or constraints to reaching objectives.

 They are what must be given up to reach the objectives or what prevent one from reaching the
objectives.
 Both physical and economic constraints can be identified.
 Physical constraints may exist in the forest production process that do not allow reaching some
objectives e.g. site quality may determine how much timber can be grown in an area.
 Economic constraint such as limited availability of fund determines investment in forestry program or
non-forestry program.
 The forest managers must choose those alternatives to reach the desired objective within these
constraints.

5. Decision:

 Once the objective is identified, alternatives are listed along with constraints on each alternative.
 Analysis can be made at this point and one of the three decisions can be made:
1. Choose an alternative
2. Do nothing
3. Go back and obtain more data for further analysis

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  Choosing and alternative from among those listed means that a course of action has been defined. The
next step is to implement the alternative.
 To do nothing, is to let things continue as they are
 Finally more information can be sought; it can be done at any of the preceding level. Objectives can be
reformulated, new alternatives set or more data about existing alternatives obtained and additional
information on constraints can be found.
 Seeking more data brings us back to the model at these levels until an exit point is reached either a
„no‟ or „alternative‟ decision.

1.4 Different forest management strategies in Nepal:

a. Strategies for production and utilization:
1. Reduction of consumption
2. Increase production
3. Effective harvesting and distribution
4. Improve pasture and livestock management

b. Conservation of ecosystems and genetic resources:

1. Legal and institutional arrangement

2. Public education and extension

C. Social sustainability

1. After decentralization policy by entering user for protection, management and use
2. Provide livelihood to poor and landless people in forestry activities

d. Policy implementation:

1. Direct human resources to priority areas.

2. Improve policy, legal and institutional framework
3. Training to sufficient, motivated and competent manpower
4. Prioritize development program and determine observance of the priorities.
5. Advocate people‟s participation and of NGO‟s

Forest Management Scenario in Nepal:

1. Forest management in Nepal has gone through three phases, namely privatization, nationalization and
populism respectively
2. During the Rana period, there was plenty of forest and they had not felt anything about the forest.
Forest was like the private property of Ranas. They could give any part of forest to which they like. At
that time, forest was exploited for supplying the railway sleeper to India and/or creating extra land
revenue.
3. After the democracy in 1951, various legislative measures were enforced to ensure clear ownership
over the forest. The private Forest Nationalization Act, 1957 (2013) was a very controversial step in the
history of Forest management in Nepal. Huge tracts of forest under communal management and
private control were brought under state property. After nationalization, local communities throughout
the country reacted negatively believing that their traditional rights of access and use had been
curtailed.
4. After experiencing the bitter hardship from the nationalization Act, the government introduced another
act, viz. The Forest Act, 1961 which was more focused on the forest administration
5. Inclusion of different forest management regimes like Panchyat Forest, Panchyat Protected Forest
Private Forest and Religious forest were the major component of this act.
6. At the time de jure manager was only government. People were considered as destroyer of the forest.
7. This system had not succeeded to conserve the forest.
8. By the mid 1970‟s the government realized that local people had to be involved in the management of
forest and started the community forest management system.
9. Matser plan for forestry sector (1988) has emphasized the community forestry as first priority.
10. To implement the master plan, the government has promulgated Forest Act, 1993 and Forest
regulation, 1995 which were become the milestone in sustainable forest management through people‟s
participation.
11. This legislation opens the door to implement community forestry nationwide.
12. Community forestry becomes more popular in mid hills of Nepal than other forest management
system.

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 13. Unfortunately, Forest management in terai has always lacked accountability and transparency, often
sparking controversy.
14. Encouraged by the successful experiment of community forestry program in hills, government has
started community forestry program in Terai also, but this was not success like hills.
15. Government has now initiated new concept of forest management named Collaborative Forest
Management (CFM) in Terai according of Forest policy 2000 by involving all stakeholder including local
users, local government i.e. VDC and DDC, NGO‟s (DoF, 2003)

Current Forest Management Strategies in Nepal:

1. Based on ownership, Nepal has two category of forest; private and national forest.
2. Private forests are nominal in number, and are being sole managed by private sector.
3. National Forest is managed either by government itself or with people‟s participation.
4. Government of Nepal has managing its forest through Ministry of Forest and Soil Conservation with
definite policy, vision and objective.
5. Some areas are managed as protected areas where as most of the areas are being managed in the
purpose of producing multiple forest products.
6. Production forests are managed by Department of forest through District Forest Office and Range
offices.
7. Similarly, protected areas are being managed by Department of National parks and Wildlife
Conservation through national parks, Wildlife reserves and conservation areas.
8. Nepal has adopted community based forest management strategies under the following category:

a. Community forest
b. Collaborative forest
c. Leasehold forest
d. Buffer zone forest
e. Religious forest

1.5 Role of forest in economics development:

1.5.1 Contribution in national economy:

1. In developing countries, forest resources are important to the quality of life and survival of large
number of rural poor (World Bank, 2001)
2. In Nepal, rural subsistence economy depends to a significant extent on primary products from
agriculture and forest.
3. Subsistence farming is based on a farm-cattle-forest relationship (Mahat, 987)
4. Forestry sector‟s contribution to the national income has reduced from 14.6% in 1956-61 to 3.6% in
1975-80
5. This has further decreased to 2.8% in FY 2006/007 (CBS,1987)
6. There are two eminent reasons for the dwindling contribution of forestry sector in national income;
growth in non-agriculture sector and inefficient forest management.
7. In Nepal, forestry sectors contribution to the GDP has been estimated as sub-sector of agriculture due
to which difficulties has been faced to differentiate the forestry sectors contribution to the GDP from
agriculture sector.
8. By the end of tenth plan, agriculture together with forestry sector has 34.9% contribution to the GDP
of Nepal (GoN, 2007) and 32.1% in FY 2007/008 (MoF, 2008)
9. It has been estimated that forestry sector has a contribution of 4.4% to the total GDP of Nepal during
the period of 1990 to 2000 (FAO,2004)
10. Forest products such as small poles and timber are used to make farm instruments and tools, while
leaves and twigs are used as a compost making materials.
11. Majority of the people use forest products for cooking, heating and feeding livestock.
12. More than 75% of the energy needs come from the forestry sector and particularly in the mid-hills ,
94% fo rural households rely on fuelwood as their primary fuel for cooking and heating (Edmonds,
2002)
1.5.2 Role in local economy:
a. Agriculture

1. Forest fodder satisfies about 37% of total fodder needs of livestock in Nepal.
2. Most of the cattle eat 2.25kg of dry matter/Day/100kg body weight.
3. About 42% of the total TDA (Total Digestible Nutrients) requirement is estimated to be met from the
forestry sector (New ERA 1992)
4. Total fodder requirement: 6.08 million ton/year
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 5. The annual per capita fuel wood consumption in the hills is about 708 kg whereas it is 689 kg in the
Terai.

b. Rural enterprises:

1. Provides raw materials to forest based enterprises such as Kutch and Kattha, resin tapping, paper,
plywood etc.

1.5.3 Role of forest in livelihood

1. A livelihood comprises people, their capabilities and their means of living, including food, income and
assets. Tangible assets are resources and stores, and intangible assets are claims and access.
2. A livelihood is environmentally sustainable when it maintains or enhances the local and global assets
in which livelihood depend and has net beneficial effects on other livelihoods.
3. A livelihood is socially sustainable which can cope with and recover from stress and shocks, and
provide for future generations.
4. Today, it is understood that forest underpins a wide ranges of goods and services for human well-
being:
a. Storage and purification of drinking water
b. Mitigation of natural disasters such as droughts and floods
c. Storage of carbon and regulation of climate
d. Provision of food, rainfall and a vast array of goods for medicinal, cultural and spiritual
purposes.
5. It is estimated that 60 million indigenous people are almost wholly dependent on forests while 350
million people depend on forest for a high degree for subsistence and income (World Bank 2004)
6. The poor rely on forest goods and ecosystem services for a range of basic needs: food, shelter, clothing
and heating.

What is the role of forest?

1. Support current consumption

a. Subsistence consumption, cash income, agricultural inputs, inputs to industries, input to
capital formation
b. Provide safety nets
c. fill gaps in response to risks
d. Safety nets in response to post shocks
2. Pathway out of poverty:
a. Poverty prevention vs, poverty reduction
b. Poverty traps (low value added)
c. Low potential for economy-wide impact of industries

1.6 Forest, Society and environment

1.6.1 Social benefits of forests:

1. Contribution to overall economy

2. Creation of employment opportunities
3. poverty reduction
4. Fuel wood
5. Industrial timber and lumber
6. Pulp and paper
7. Medicines
8. Mineral extraction and recreation
1.6.2 Environmental benefits of forest:

1. Protection of sites and landscapes

2. Spiritual and recreation value
3. Food webs and energy flow
4. Water regulation
5. Local and regional climate
6. Numerous habitats and niches
7. Purify water and air
8. Chemical cycling
9. Reduce soil erosion

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 10. Store atmospheric carbon
11. Provide wildlife habitats

Forest goods and services

Provisioning Services Cultural Services:

1. Food, Fibre and fuel 1. Spiritual and religious values

2. Genetic resource 2. Knowledge system
3. Biochemical‟s 3. Education and inspiration
4. Fresh water 4. Recreation and aesthetic value
Regulating Services Supporting Services:

1. Invasion resistance 1. Primary production

2. Hervivory 2. Provision of habitat
3. Pollination 3. Nutrient cycling
4. Seed dispersal 4. Soil formation and retention
5. Climate regulation 5. Production of atmospheric oxygen
6. Pest regulation 6. Water cycling
7. Disease regulation
8. Natural hazard protection
9. Water purification

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 Unit-2
Concept and Principle of Sustainable forest Management

2.1 Concept and principles of sustainable forest management

2.1.1 Concept, definition and principle of sustainable forest management
2.1.2 Criteria and indicators of sustainable forest management
2.1.3 Various forest certification schemes
2.2 Concept and practices of sustained yield
2.2.1 Concept, definition of sustained yield
2.2.2 Prerequisites for sustained yield
2.2.3 Limitations in Nepal‟s conditions
2.2.4 Yield types
2.2.5 Management steps for sustained yield

Sustainable development:

1. The word sustainable development was first used in World Conservation Strategy report in 1980
2. The primary concern of sustainable development is that planning should work with the resources of a
region.
3. The concept was made operational only in 1987 by Our Common Future.
4. Sustainable development is defined as „meeting the basic needs of the present without compromising
the ability of the future generations to meet their own need.

Principle of sustainable development:

1. Living with the environment limit

2. Ensuring a strong healthy environment
3. Meeting the diverse need of all people in existing and future communities
4. Achieving a sustainable economy
5. Using sound scientific responsibility
6. Promoting good governance

2.1 Concept and principle of sustainable forest management:

1. Sustainable development concept was elaborated by the World Commission on Environment and
Development in 1987, and endorsed by the United Nations Conference on Environment and
Development (UNCED) in June 1992.
2. Since then, it has become the most important issue in the development aspirations of the 1990s.
3. Sustainable forest management has been described as forestry‟s contribution to sustainable
development.
4. This is development, which is economically viable, environmentally sound and socially beneficial and
which balances present and future needs.
5. Sustainable forest management is considered as one of the most important contributions which the
forestry sector can make to the sustainable development objectives of any nation, particularly those
richly endorsed with forest (FAO, 2000)
6. Sustainable development became a common theme as concerns grew over the burgeoning world
population and increasingly polluted environment
7. Accordingly, it drew attention to protect and conserve the global environment and emphasized a shift
in attitudes from pure utilization towards ecological orientation (FAO, 2000)

2.1.1 Concept, definition and principles of sustainable forest management:

Definition of sustainable forest management:

1. Sustainable forest management is the process of managing forest to achieve one or more clearly
specified objectives of management in relation to the production of a continuous flow of desired forest
products and services without undue reduction of its inherent values and future productivity and
without undue undesirable effects on the physical and social environment (ITTO, 19998 in ITTO 2005)

Ministerial Conference on the protection of forests in Europe (MCPFE), 1993 defines sustainable forest
management as the:

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 11
 2. Stewardship and use of forest and forest lands in such a way, and at a rate, that maintains their
productivity, regenerations capacity, vitality and their potential to fulfill now and in the future,
relevant ecological, economic, and social functions, at local, national, and global levels, and that does
not cause damages to other ecosystems.

Concept of sustainable forest management:

1. Forest plays critical roles in accounting for most of the terrestrial plant biomass and in regulating
global temperature by sequestering carbon.
2. As a public good, they contribute to stable, fertile landscapes for human settlement, provide numerous
timber and non-timber resources and are places of recreation.
3. For indigenous peoples they are often places of important spiritual significance
4. However, the natural forests of Asia remain in a state of crisis, threatened by a complex array of forces
that undermine their ability to fulfill vital ecological and social functions.
5. The concept of sustainable forest management is introduced as a broad conceptual instrument to
assess solutions to forest loss and degradation
6. Sustainable forest management is considered as one of the most important contributions, which the
forestry sector can make to the sustainable development objectives of any nation, particularly those
richly endowed with forest.
7. In forestry, sustainability involves the continued existence and use of forests to meet human physical,
economic, and social needs, the desire to preserve the health of forest ecosystems in perpetuity, and
the ethical choice of preserving options for future generations while meeting the needs of the present.
Determining what is sustainable is a difficult task. A framework of criteria and indicators of forest
sustainability can be used to foster discussions on the meaning of sustainability for a particular time
and place.
8. Sustainable forest management aims to ensure that the goods and services derived from the forest
meet present-day needs while at the same time securing their continued availability and contribution
to long-term development.
9. In its broadest sense, forest management encompasses the administrative, legal, technical, economics,
social and environmental aspects of the conservation and use of forests.
10. It implies various degrees of deliberate human intervention, ranging from actions aimed at
safeguarding and maintaining the forest ecosystem and its functions, to favoring specific socially or
economically valuable species or groups of series for the improved production of goods and services.
11. Many of the world‟s forest and woodlands, however, especially in the tropics and subtropics, are still
not managed in accordance with the Forest Principles adopted at the United Nations Conference on
Environment and Development (UNCED, 1992).
12. Many developing countrieshave inadequate funding and human resources for the preparation,
implementation and monitoring of forest management plans, and lack mechanisms to ensure the
participation and involvement of all stakeholders in forest planning and development.
13. Where forest management plans exist, they are frequently limited to ensuring sustained production of
wood, without due concern for non-wood products and services or social and environmental values.
14. In addition, many countries lack appropriate forest legislation, regulation and incentives to promote
sustainable forest management practices.
15. Urgent attention is needed to address the cause of forest loss and degradation. In order to examine
instruments that tackle these causes, a conceptual anchor is needed to describe what might be
considered an ideal state of forest management.
16. The ideal state provides a frame of reference to gauge improvements in forest management.
“Sustainable forest Management” (SFM) is used for this purpose.
17. Since the 1990s, SFM has been at the forefront of international deliberations on forestry issues and is
now widely embraces by inter-governmental, regional, national and sub-national conservation and
development institutions.
18. At the Second Expert Meeting on Harmonizing Forest-Related Definitions for Use by Various
Stakeholders organized by the FAO and IPCC in 2002, several definitions of SFM were presented.
19. Of these, the definition developed by the Ministerial Conference on the Protection of Forest in Europe
(MCPFE) best captures the multiple functions of forests.
20. The MCPFE definition, though not formulated specifically with Asian forest in mind, does embrace the
variety of critical forest functions in the region.
21. SFM has been conceptual basis of an international movement develop criteria and indicators toassess
the state of forests and their management, in which a number of Asian countries participate.
22. Because of the variety of forest types in Asia described earlier, it is not possible to present a region-
wide specific set of criteria for assessing forestry practice. S\However, the concept of SFM can be used
loosely to assess new policies and instruments of forest management and is employed for this purpose.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 12
 Economically viable

Socially beneficial Economically

Sound

Sustainable
management

12. Sustainable development became a common theme as concerns grew over the burgeoning world
population and increasingly polluted environment.
13. Accordingly, it drew attention to protect and conserve the global environment and emphasized a shift
in attitudes from pure utilization towards ecological orientation (FAO, 2000s as cited by Shreastha and
Sharma, 2004)
14. Traditional sustained yield, a concept which was brought by a German forester-Georg Hartig in 1795,
focused mainly on the production of commodities, but has proven inadequate to meet the
requirements of the present day society for various products and services and other non-material
benefits and this concept was broadened in 1970s and consequently revised with a new concept of
sustainable forest management.
15. The traditional and modern concepts of sustainable forest management are presented below (Adopted
form Shrestha and Sharma, 2004)

Conceptual Model of Sustainable Forest management:

Conservation

Sustainable forest
Management
Regeneration Utilization

Fig: 1 Traditional Concept of Sustainable Forest Management

Ecological Well-being

Sustainable forest
Management
Social well-being Economic well -being

Fig: 2Modern Approach of sustainable forest management

Principle of sustainable forest management:

Principle:

A fundamental truth or law as the basis of reasoning or action, Principles in the context of sustainable forest
management are seen as providing the primary framework for managing forests in a sustainable fashion
(Mendoza et. al 1999)

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It is difficult to explicitly define what sustainable forest management is. However, several recent international
meetings have suggested that the following seven thematic elements are key components:

1. Extent of forest resources

2. Biological diversity
3. Forest health and vitality
4. Productive functions of forest resources;
5. Protective functions of forest resources;
6. Socio-economic functions;
7. Legal, policy and institutional framework.

2.1.2 Criteria and indicators of sustainable forest management

Criteria:

Criteria define the essential against which sustainability is assessed, with due consideration paid to the
productive, protective and social roles of forests and forest ecosystems. Each criterion relates to a key element
of sustainability, and may be described by one or more indicators.

Seven criterion are identified as essential elements of sustainable forest management

1. Criterion 1: Enabling conditions for sustainable forest management: is concerned with the general
legal, economic and institutional framework without which actions included under the other criterion
will not succeed.
2. Criterion 2 and 3: on Forest Resource Security and Forest Ecosystem health and Condition:
respectively, are concerned with the quantity, security and quality of forest resources.
3. The remaining four criterion deal with various goods and services provided by the forest, including
Flow of Forest Produce, Biological Diversity, Soil and Water and Economic, Social, and Cultural
Aspects
4. The order of presentation of the criteria represents a logical sequence but does not indicate priority or
relative importance.
5. The seven ITTO criteria are shown schematically

Criterion 1
Enabling conditions for sustainable forest
management

Criterion 2 Criterion 7
Forest Resources Economic, Social,
Security Sustainable Management
And Cultural Aspects
of Natural Tropical
Forests
Criterion 3
Forest Ecosystem Criterion 6
Health and Condition Soil and Water

Criterion 4 Criterion 5
Flow of Forest Biological
Procedure Diversity
Indicators:

 Indicators are parameters which can be measured and correspond to a particular criterion.
 They measure and help monitor the status and changes of forests in quantitative, qualitative and
descriptive terms that reflect forest values as seen by those who defined each criterion.
 The indicators presented here have been carefully identified and formulated so that a change in any
one of them would give information that is both necessary and significant in assessing progress
towards sustainable forest management.
 They have also been defined so that they are clear, practical and easy to monitor, and based as far as
possible on available research knowledge and statistics.
 It should, therefore, be possible for countries to provide information on many of them, although only a
few countries will immediately be able to provide information on them all.
 Countries face a considerable load in reporting to different international organizations. This load can
be eased by ensuring that the nature of the data required is as similar as possible. Indicators have,

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 14
 therefore, been chosen so as to be compatible with those being requested for FAO‟s Forest Resources
Assessment (FRA-2000).
 Wherever possible, quantitative indicators have been suggested but, in some instances, this is not
possible or would prove too expensive. Where this is the case, qualitative or descriptive indicators are
provided.
 It is important, if the indicators are to give and accurate picture of trends, those comparable methods
should be used between one time of assessment and the next; and that there should be a means of
estimating the degree of accuracy of any data presented.
 Over time, lessons will be learnt about the collection of certain data. Ideally, all countries should use
the same methods of measurements and assessment, but this is unlikely to be for some time.
Countries should, therefore, give a description of the methods used and an estimate of the accuracy of
their figures and any difficulties encountered in their collection.

Criteria and Indicators developed by ITTO (2005)

S.N. Criteria Indicators

1 Enabling conditions for 1. Policy, legal and governance framework
sustainable forest 2. Economic framework
management 3. Institutional framework
4. Planning framework
2 Extent and conditions of 1. Extent (area) and percentage of total land under comprehensive
forests land use plan
2. Extent (area) of forests committed to production and protection
3. Extent (area) and percentage of total land area under each
forest type
4. Percentage of PFE with boundaries physically demarcated.
5. Changes in forest area
6. Forest condition
3 Forest ecosystem health 1. Extent and nature of forest encroachment, degradation and
disturbance caused by human and the control procedures
applied.
2. Extent and nature of forest degradation and disturbance due to
natural causes and the control procedures applied
4 Forest Production 1. Resource assessment
2. Planning and control procedures
3. Silvilcultural and harvesting guidelines
5 Biological diversity 1. Ecosystem diversity
2. Species diversity
3. Genetic diversity
4. Procedures for biodiversity conservation in production forests
6 Soil and water protection 1. Extent of protection
2. Protective functions in production forests
7 Economics, social and 1. Socio economic aspects
cultural aspects 2. Cultural aspects
3. Community and indigenous people‟s rights and participation.

Criteria and Indicators developed by Canadian Council of Forest Ministries (2000)

S.N. Criteria Indicators

1 Conservation of biological diversity 1. Ecosystem diversity
2. Species diversity
3. Genetic diversity
2 Ecosystems conditions and 1. Disturbance and stress
productivity 2. Ecosystems resilience
3. Extent biomass
3 Soil and water conservation 1. Physical environmental factors
2. Policy and protection forest factors
4 Global ecological cycles 1. Global carbon budget
2. Forest land conservation
3. Carbon dioxide conservation
4. Policy factors
5. Hydrological cycles
5 Multiple benefits 1. Productive capacity
2. Competitiveness

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 3. Contribution to economy
4. Non timber values
6 Society‟s responsibility 1. Aboriginal and treaty rights
2. Participation by aboriginal communities
3. Sustainability of forest communities
4. Fair and effective decision making
5. Informed decision making

Criteria and Indicators developed by Indian Institute of Forest management, Bhopal

S.N. Criteria Indicators

1 Increase in the extent of 1. Area and type of forest cover under natural and manmade
forest cover and tree cover forests
2. Encroachment in forest area
3. Forest area diverted for non-forestry purposes
4. Trees outside forest
2 Maintenance, conservation 1. Number of plant species
and enhancement of 2. Number of animal species
biodiversity 3. Ecosystems area (by forest types)
3 Maintenance and 1. Status of natural regeneration
enhancement of ecosystem 2. Incidence of pests
function and vitality 3. Incidence of grazing
4. Incidence of weeds
5. Incidence of drought, floods and other natural calamities
4 Conservation and 1. Area under watershed treatment
maintenance of soil and 2. Duration of stream flow
water resources 3. Quality of water
4. Ground water level
5 Maintenance and 1. Growing stock
enhancement of forest 2. Status of plantation
resources productivity 3. Technologies for increasing productivity
6 Optimization of forest 1. Extraction and consumption of wood.
resource utilization 2. Extraction and consumption of fuel wood
3. Extraction and consumption of non-wood products
4. Utilization of forest environmental services
7 Maintenance and 1. Sacred groves
enhancement of social, 2. No of trees species traditionally/religiously protected
cultural and spiritual 3. Participation ofusers in joint forest management meetings
benefits
8 Adequacy of policy, legal and 1. Offences related to forests
institutional framework 2. No of JFM committee and forest area with them
3. Financial transparency
4. Allocation of funds for forest protection
5. Capacity building

2.1.3 Various forest certification schemes:

 1985-1990; growing concern over the state of the world‟s forests, and the sustainability of extraction of
timber and other products.
 So the sustainable forest management concept emerged.
 To promote the sustainable forest management identifying the well managed forest, registration and
certification procedures were started.
 So the public is led to believe that products labeled with the logo of sustainable managed forest are
from the environmentally appropriate, socially beneficial and economically viable sources.
 There are questions related to sustainable forest management (SFM) such as, how can the local people
manage forest in a sustainable way?
 To answer these questions, NGO‟s involved in conservation such as, Green Peace, Worldwide Fund for
Nature, Friends of the Earth, etc thought to establish a mechanism to encourage sustainable forest
management and discourage unsustainable harvesting.
 Forest Certification is the process by which the performances of on-the-ground forestry operation are
assessed against a predetermined set of standards. It is a mechanism for forest monitoring, tracing
and labeling timber, wood and pulp products and non-timber forests products where the quality of
management from environmental, social and economic perspectives is judged against a series of
agreed standers. Forest certification is intended to improve forest management via market based
initiatives.
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  Forest certification intends to decrease negative impacts of forest management. This is achieved by
implementing agreed code of practice known as standards. Implementation of these codes is verified
by an independent or third party institution.
 If forests are sustainably managed, a certificate of responsible forest management is given to the forest
managers. Forest manager can put the logo to identify the product coming from certified forest.
Consumers identify such products from the stamp used in the product.
 Forest certification refers to two separate process viz. forest management unit certification (FMU) and
chain of custody certification (COC). Forest management certification is a process which verifies that
an area of forest/plantations from where the wood, fiber and other non-timber forest products is
extracted in managed to a defined standard.
 COC certification is a process of tracking forests products from the certified forest to the point of sale
to ensure that product originated from a certified forest.

Forest Certified Systems

There are many forest certification systems in the world

International/regional systems:

1. Forests Stewardship Council FSC

2. Program for the Endorsement of the Forest certification (PEFC)

National systems:

1. European schemes linked to PEFC

2. Canadian Standards Association
3. Sustainable Forestry Initiative/American tree Farm system
4. Australian Forestry Standards (AFS)
5. Finish Forest Certification Scheme (FFCS)
6. Developing countries: brazil (CERFLOR), Malaysia (MTCC)

Forest Stewardship Council:

 FSC is the dominant system globally. This is an internationally nonprofit, non-government

organization based in Germany, established in 1993 by more than 150 founder members of
environmental and human rights groups, timber produce and manufactures and wood products
buyer, after results of international concerns about tropical deforestation (FSC 2007).
 FSC promotes environmentally appropriate, socially beneficial and economically viable management of
the world‟s forest.
 For the process of certification, it has developed 10 principle and 56 criteria. FSC has two types of
certification.
 Forest managers or owners who want to prove that their forest operation are socially beneficial and
managed or owners who want to prove that their forest operation are socially beneficial and managed
in an environmentally appropriate and economically viable manner can apply for forest management
certification.
 FAC chain of custody certification is for companies that manufactures process or trade in timber or
non-timber forest products and want to demonstrate to their customers that they use responsibly
produced raw materials.
 FSC chain of custody helps companies to strengthen their sourcing policies and comply with public or
private procurements policies where FSC is the preferred option.

FSC Principles:

1. Compliance with laws and FSC Principle: Forest management must abide by all applicable laws of the
country in which they occur.
2. Tenure and Use Rights and Responsibilities: Rights to the land are clearly defined and clearly
established.
3. Indigenous People‟s Rights: Indigenous people‟s rights to own, use and manage their lands are
recognized and respected.
4. Community Relations and Worker‟s Rights: maintain and /or enhance the long-term social and
economic wellbeing of forest workers and local communities.
5. Benefits from the forest: Encourage the efficient use of the forests‟ resources and services to ensure
economic viability, and environmental and social benefits.
6. Environmental Impact: Conserve biological diversity, water resources, soils, and unique and fragile
ecosystems and landscapes, maintaining the ecological functions and integrity of the forest.
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 7. Management plan: A plan written, implemented, and kept up to date, including statements of long-
term objectives.
8. Monitoring and Assessment: Monitoring is conducted to assess the condition of the forest, yields of
forest product chain of custody, management activities, and their social and environmental impacts.
9. Maintenance of High Conservation Value Forests: Management activities enhance the attributes of
high conservation value forests.
10. Plantations: Plantations should complement the management of reduce pressure on, and promote the
restoration and conservation of natural forest.

The Elements of Forest Certification:

Accreditation body monitors and evaluates the work of certification bodies to guarantee their independence
and capacity to perform a transparent and technically consistent evaluation.

Accreditor e.g.
FSC
Forest Certifiers
Feedback: Corrective Action
Requests (CAR)

C & I based
standards
Evaluate chain of
Custody procedures

Market Chain of Custody Forest Management

Program for the Endorsement of Forest Certification Scheme (PEFC):

 PEFC is in Luxemburg formed in June, 1999 as a pan European Initiatives with representative scheme
from eleven countries.
 With the rapid development in its working area globally, its acronym was changed in 2003 from Pan
European Forest Certification to Program for the Endorsement of Forest Certification Scheme.
 PEFC is an independent, non-profit, non-governmental organization, which provides a framework for
the development and assessment of independent third party certification of environmentally
appropriate, socially beneficial and economically viable management of forests.
 It is playing a global platform for continents, which are part of PEFC council, PEFC provides a logo for
wood based products, allowing to customers and public to make a positive choice for sustainability
forest management and it claims to deliver sustainability, credibility, accountability and adaptability.

2.2 Concept and practice of sustained yield:

2.2.1 Concept, definition of sustained yield:

Sustained yield is defined and /or expressed yield:

1. The material that a forest can yield annually or periodically in perpetuity.

2. As applied to policy, method or plan of management (sustain yields management), it implies
continuous production with the aim of achieving at the earliest practical time at the highest practical
level an appropriate balance between net growth and harvest by annual or somewhat longer periods
(BCFT)
3. The regular, continuous supply of the desired produced to the full capacity of the forest. (Osmastan)
4. The yield of timber or other forests product from a forest which is managed in such away as to permit
the removal of approximately equal volume or quality of timber or other forest produce annually or
periodically in perpetuity.
5. Sustained yield may be annul or periodic depending on where a complete series of age gradations or
age mixed together is maintained or only an in complete series.
6. Periodic yield is also considered as sustained, provided the period is short.
7. Sustained yield is essential where large areas, especially state owned, are concerned; this ensures
continuous yield and safeguards against extinction of forest property, which is the trust with the
present generation-we have a right of use only but not to lead to its destruction.

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 8. In case of private property, it is not practicable to maintain of complete series of age gradations such
cases the cropped is worked for intermittent yield, which is defined as: the material or cash return
obtained from time to time form a forest not organized for continuous production. (Glossary).

Concept and Principle of Sustained Yield:

1. Yield signifies the flow of forest products, measured in terms of either volume or value units, harvested
from a forest at a particular time. The yield from the forest includes all the forest products, the
tangible and the intangible, including protective, amenity, and timber and non-timber products.
2. Concept of sustainable yield had been evolved from the basic from the consideration that the unborn
generation may derive from the forest at least as much of the benefits as the present generation.
Sustained yield ensures stability and continuous supply of raw materials to the industries and to meet
social and domestic needs of the people.
3. The principle of SY is that forest should be exploited such that annual or periodic felling does not
exceed annual or periodic growth.
4. It is an accepted norm in forest management and forms the core of organized forestry. At the end of
18th century and beginning of the 19th century, the necessity of sustained yield (SY) was propounded
in Europe for ensuring regular supply of timber and fire wood.
5. Germany is the pioneer country of the sustained yield.
6. Considering forestry from the economic point of view, investment in forestry should yield continuous
return in terms of definite class of produce and in greatest possible quantity within a reasonable time
and to the financial advantage.
7. The simplest method for achieving this objective of sustained yield is to maintain complete succession
of equal areas of crops of all ages from one year old up to the age of maturity that is complete series of
age gradations.
8. For example; say we have 10 hectares of land and 10 years old trees. Hence equal area will be
available for felling at maturity (10 years); this is one form of crop necessary for sustained yield
management and for maintaining it perpetuity.
9. Such forest provides a conceptual picture of theoretical normal forest. The idea of the normal forest is
a logical corollary to the principle of sustained yield in perpetuity.

2.2.2 Pre-Requisites for sustained yield:

1. To get sustained yield, forest should be “integrated”, it should be healthy, energetic, and of all ages
mixed together in proper proportion or in one word it should be Normal.
2. Only normal forest is able to produce equal production of its material in each year or periods. The
simplest methods of achieving these objectives of sustain annual yield is to maintain a completer
succession of age from year one to the age of maturity, having an equal of equi-productive area. Great
effort is necessary to bring the forest in normality. Te\he following requirement must be fulfilled for
sustained yield management.
3. There should be a normal forest having all requirement parameters as;
4. A completer series of age gradations- in case of plantation forest, there should be complete series of
age gradations up to rotation age. Any gap of age will interrupted the sustained yield.
5. All periodic block (PB) should occupy equal or equi-productive area-this is the case for regular shelter
wood system. All PB should be of equal or equi-productive areas otherwise there would be variable
amount of yield from different periodic blocks instead of sustained one.
6. All age classes present in balanced proportion-in irregular selection forest, there should be well
mixtures lf all age classes of also that in balanced proportion to ensure the equal amount of volume
production in each year at the time of harvesting. Although there will be no specific area harvesting,
the yield in sustained manner by clear selection of rotation aged trees distributed over the whole forest
area.
7. Sustained yield principle is applicable only to production forests.

2.2.3 Limitations in Nepal conditions:

Sustained yield could not be achieved due to its following limitations:

1. Not possible to apply SY principle in the first rotation because density and quality of crop are generally
variable due to past management or mal-distribution of age classes and their composition in mixture
and generally comprised of old growth as well as degraded site condition.
2. Virgin forest with a large proportion of deteriorating trees cannot be suitably worked under SY
principle.
3. Forest under afforestation programmed provides various yields until after the end of first rotation.
4. Lack of technical man power
5. Inflexible to market conditions.

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 6. In hill forests, due to variable demand, different interest groups, lively hood concepts, geographical
location, microclimatic conditions, multiple use concepts etc, it is very difficult to achieve.

2.2.4 Yield types:

Yield: The volume or number of stems that can be removed annually or periodically, of the area over which
felling may pass annually or periodically, consistentwith the attainment of objects of management. Yield can
be either final yield or intermediate yield.

1. Final yield
2. Intermediate yield
3. Normal Yield
4. Sustained yield
5. Total yield

1. Final Yield: All the material that counts against the prescribed yield and which is derived from the main
felling in a regular forest. It is the sum of the man crop and the subsidiary crop figures for the given crop age.

2. Intermediate Yield: All materials from thinning or operations preceding the main felling in a regular forest,
or its cash equivalent.

3. Normal Yield: The yield from a normal forest.

4. Sustained Yield: The material that a forest can yield annually (or periodically) in perpetuity.
5. Total yield: The standing volume of a crop plus the total volume removed in thinning since it's established
as a more or less even aged stand; or the sum of the final and intermediate yields.

2.2.5 Management steps for sustained yield;

Different forest types required different types of treatments to acquire sustainable outputs such as:

1. In clear felling system: cut equal volume of material from equal area annually.
2. In uniform shelter wood system: all the periodic blocks occupy equal or equi-productive area.
3. In irregular selection forest: all age classes are present therein and balanced proportion.
4. In higher rotation, age class may be formed like: 10-20, 20-30, 30-40, 40-50, etc.
5. It is considered that for maintaining sustainable yield “variable yield today to ensure sustained yield
tomorrow”. Continuity of harvest, indefinitely, without impairment of productivity of soil is the core
method to obtain sustainable forest management.

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 Unit-3
Forest valuation methods

3.1 Common valuation techniques

3.2 Time value of money only (review)
3.2.1 Interest rate
3.2.2 Discount rate
3.2.3 Inflation adjustment
3.3 Decision-making criteria
3.3.1 Present net worth
3.3.2 Benefit cost ratio
3.3.3 Land expectation value
3.3.4 Internal rate of return
Economic rate return
Financial rate or return
3.4 Risk and uncertainty evaluation
3.4.1 Risk management
3.4.2 Decision-making with uncertainty

Introduction of Valuation:

 Valuation is paling a value on something

 Forest valuation is the placing of a value on forest production. This may include valuing the resources
consumed in that production.
 Economics value is one of many possible ways to define and measure value.
 Although other types of value are often important, economic values are useful to consider when
making economic choices-choice that involve tradeoffs in allocating resources.
 Traditionally economics has been concerned with direct use values focused on quantifying and
analyzing goods and services that produce tangible benefits.
 Economists however, have broadened their scope in recognition of the growing appreciation for the
indirect use, non-use, existence, bequest and option values of ecosystems and have developed
techniques to extent monetary valuations to ecosystems services
 Measures of economics valuation are based on what people want-their preferences. Thus, the theory of
economic valuation is based on individual preferences and choices.
 The concept of economic value is now a well-established and useful framework for identifying various
values associated with forests.
 The total economic value is in turn made up of its direct use values, indirect use values and option
values. Nonuse values include bequest value and existence values (IUCN, 1998)

 Thus, use value is defined as the value derived from the actual use of a good or service, such as
hunting, fishing, bird watching, or hiking.
 Use values may also include indirect uses. For example, forest provides direct use values to the people
who visit the area.
 Other people might enjoy watching a television show about the area and its wildlife, thus receiving
indirect use values.
 People may also receive indirect use values from an input that helps to produce something else that
people use directly.
 For example, forests supply water to the downstream users, who use water for drinking or irrigation
purpose.

 Option value is the value that people place on \having the option to enjoy something in the future,
although they may not currently use it. Thus, it is a type of use value.
 For example, a person may hope to visit the forest area sometimes in the future, and thus would be
willing to pay something to preserve the area in order to maintain that option.
 On the similar way, forest resources may be underutilized today but may have a high future values in
terms of scientific, educational, commercial and other economic uses.
 Environmental regulatory functions of the forest ecosystem may become increasingly important over
time as economic activities develop and spread in the region (Bann, 1997)

 Similarly, bequest value is the value that people place on knowing that future generations will have
the option to enjoy something.
 Thus, bequest value is measured by people‟s willingness to pay to preserve environment for future
generations.
 For example, a person may be willing to pay to protect the forest area to that future generations will
have the opportunity to enjoy it.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 21
  Bequest values may be particularly high the local populations currently using or inhibiting a forest in
that they would like to pass on to their heirs and future generations their life and culture that has co-
evolved in conjunction with the forest.

 Non-use values, also referred to as “Passive use” values, are values that are not associated with actual
use, or even the option to use a good or service, Existence value is the non-use value that people place
on simply knowing that something exits, even if they will never see it or use it.
 For example, a person might be willing to pay to protect the forest wilderness area, even though he or
she never expects of even wants to go there, but simply because he or she values the fact that it exists.
 Existence value is derived from the pure pleasure in something‟s existence, unrelated to whether the
person concerned will ever be able to benefit directly or indirectly form it.
 Existence values are difficult to measures as they involve subjective valuations by individuals
unrelated to either their own or others use, whether current or future. However, several economics
studies have shown the existence value of forests to constitute a significant percentage of total
economic value (Bann, 1997)

Total economic values of forests

Use value Nonuse value

Bequest value Existence value

Direct use value Indirect use value Option Value
Recreation Use and nonuse Biodiversity
Ecosystem services Future information
Sustainable value for legacy Ritual or spiritual value
Climate stabilization Future uses
harvesting Culture Heritage
Wildlife Flood control
Community values
harvesting Ground water recharge
Landscapes
Fodder Carbon Sequestration
Grazing Habitat
Agriculture Nutrient retention
Gene harvesting Natural disaster
Education prevention
Watershed protection
Research
Natural services

1. Economic valuation can be defined as the attempt to assign quantitative values to the goods an
services provided by forest.
2. Valuation is only one element in the effort to improve the management of forest ecosystems and their
services.
3. Economic valuation may help inform management decisions, but only if decision-makers are aware of
the overall objectives and limitations of valuation.
4. The main objective of valuation of ecosystem services is to generally indicate the overall economic
efficiency of the various competing uses of functions of a particular forest ecosystem. That is, the
underlying assumption is ecosystem resources should be allocated of those uses that yield an overall
net gain to society, as measured through valuation in terms of the economics benefit of each use
adjusted by its costs (Kumar & Kumar, 2008)

3.1 Common Valuation Techniques:

1. Forest Produce a great varieties of goods and services for people. Forests have value to people and
contribute to meeting human needs in a number of ways.
2. Contribution of forest occurs through:
 Direct use of forest
 Indirect use of forest
 The mere existence of the forests or of options for its future direct or indirect use.
3. The value of forest to human being:
 Vary from individual to individual and from group to group
 They can change rapidly over time as individual situation and perception change.
4. In valuation there are two critical points
 There are no absolute economic values other than in the perception of individual.
 These perceptions tend to be dynamic, changing as circumstances change.

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Forest Valuation Techniques:
1. Using direct market prices for goods and services

 It involves direct observation of market exchanges (or uses available records of part market
exchange) to determine the value in exchange of particular goods or services.
 It assumes that the value of the goods and services exchange in a market is at least equal to
the market exchange rate, although they may be higher.
2. Using indirect market price techniques:

a. Residual or derived price

b. Surrogate prices
c. Opportunity costs
d. Hedonic method
e. Travel cost method

a. Residual or Derived Price Method:

 This method estimates the value of particular goods or services from the price of goods or services
established later in the production-distribution process. For e.g., the value of forest products at the
farm gate may be estimated by subtracting the cost of transporting the products from the farm to a
market where products or exchange values are known.
 It assumes that the value of the good or service at the farm gate is at least equal to the residual value
left after subtracting further production, transportation and distribution costs from market prices.

b. Surrogate Prices Method:

This method estimate the value of a particular goods or services from the known values on prices of substitute
or comparable conditions for e.g., the economic value of gathered fuel wood could, in principal, be estimated as
equivalent to the cost of the quantity of a alternative purchased fuel, such as kerosene which would provide
the same cooking or space heat.

c. Opportunity Costs Methods:

 This method estimates the value of opportunities foregone to provide a particular good or service.
 It assumes that the value is a test equal to the value of the best alternative forgone to obtain the
desired good or service. For e.g. if dung is used as fuel, the opportunity cost could be the decrease in
crop yields forgone by using the dung for fuel instead of as a means of condition soils.

d. Hedonic Price Methods:

 This method estimates values from known values of other goods and services that are technically
related to the good or services to be valued.
 It assumes that the value of a good and service can be estimated from a technical relationship. For e.g.
Housing values may decline the closer one get to a loud noise such as airport.

e. Travel cost:

1. This method recognizes that some good and services the consumer may have to incur subtratical cost
(in time or money), to obtain the particular good or service.
2. For e.g., a recreation experiences may involve considerable travel expenses; and gathering free fire
wood may require a considerable amount of time.
3. It assumes that the value to the consumer is at least equal to the travel costs the consumer is willing
to incur to obtain the desired good or services.
4. Travel cost method (TCM) is one of the oldest approaches to environmental valuation, proposed in a
letter from Harolad Hotelling to the US Forest Service in the 1930s, first used by Wood and Trice 1958,
and popularized by Clawson and Knetsch 1966 (Hanley, et, al, 2004).
5. This method involves using travel costs as a proxy for the price of visiting outdoor recreational sites.
6. A statistical relationship between observed visits and the cost of visiting is derived and used as a
surrogate demand curve from which consumer‟s surplus per visit day can be measured (by integrating
under this curve) (Hanley. et al. 2004).
7. This method is based on the assumption that consumers value the experience of aparticular forest site
at no less that the cost of getting there, including all direct transport costs as well as the opportunity
cost of time spent travelling to the site (i. e. foregone earning).

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 8. This survey based method has been used extensively, especially in richer countries, to estimate
environmental benefits at recreational sites (including wildlife reserves, special trekking areas and
beaches).
9. TCM has recently been applied in several developing countries, particularly where higher income and
rapidly developing markets have been associated with growing demand for amenities such as scenic
views and recreational areas. (EEP, 2003)

3. Using non-market price techniques:

Contingent valuation:

 This method is used to estimate the consumer‟s willingness to pay for a specified good or service or to
accept compensation for receiving an undesired good or services.
 In practice, it is usually desired from the resources of potential consumers to a hypothetical exchange
situation.
 This method assumes that the consumers expressed willingness to pay in hypothetical situation is a
measure of the value to the consumer in an actual situation.

3.2 Time Value of Money:

 Time is money, particularly when one is growing trees or investing money, because both grow with
time.
 A forest stand will grow with time and with proper management, add increment each year for many
years.
 Funds in a saving account will draw interest and funds invested in capital should also be earning their
interest.
 Invested funds earn interest and this interest and this interest can then be invested to earn its own
interest.
 The amount of money originally invested is called the principal amount, and the amount of money to
which it will grow when the interest is added is called the future value.
 The term payment indicates either a revenue (money received) or a cost (money paid)
 A dollar invested today will be worth more in the future because it earns interest.
 It follows that a dollar received in the future is worth less than a dollar received today because it
cannot be invested and earn interest.
 The future payment is worth less because an opportunity cost of the interest payments forgone has
been incurred.
 Time value of money is concept to understand the value of cash flows occurred at different point in
time.
 If we are given the alternatives whether to accept Rs. 100 today or one year from now, then we
certainly accept Rs. 100 today. It is because there is time value to money.
 Every sum of money received earlier has reinvestment opportunity.
 Money received at present is preferred even if we do not have reinvestment opportunity because money
that we receive in future has less purchasing power that the money that we have at present due to the
inflation.
 What happens if there is no inflation still, money received at present is preferred, and it is because
most of us have a fundamental behavior to prefer current consumption to future consumption. Thus:
a. The reinvestment opportunity or earning power of the money.
b. The inflation
c. An individual‟s preference for current consumption to future consumption is the reasons for
the time value of money.

Reasons for time value of money:

1. Uncertainly-if an individual‟s is not certain about future cash receipt, he prefers receiving cash now.
2. Subjective preference-most people have subjective preference for present.
3. Investment opportunities-most individuals prefer present receipt to future receipt because of available
investment opportunities.
4. Inflation-the purchasing capacity of money may go down in the future due to the inflation.

Importance of time value of money:

1. To make investment decision: long term assets/capital budgeting decision-Net present value.
2. To calculate rate of return-comparing return = Risk free rate + Risk premium.
3. To calculate cost of capital: Comparing future return with cost of capital.
4. To maintain risk return trade off.

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 5. To make financing decisions: Helpful for financial managers.

3.2.1 Interest rate:

 Interest is the return to the owner of capital.

 It is the return that the owner of the man-made assets receives for investing his money in those assets
interest can also the viewed as the cost of the capital for the person who is using it.
 Interest is the market price of money.

Components of the interest rate:

 The simultaneous solution of the supply and demand functions for money sets the interest rate.
 The interest rate is the price of money.
 The interest rate is the base price of money that is then modified for other qualitative component.
 Risk is the first major component that modifies the interest rate. It is the amount of certainly assigned
to an alternatives outcome. An investment whose return is difficult to predict or is unknown is risky
investment. There categories-certainly, risky, uncertainly.
 Greater an investment‟s risk, the higher the interest rate.
 Liquidity is important for several reasons.
 A liquid investment allows termination of the investment if the predicted outcomes seem
incorrect. It reduces risk.
 It allows changing to an investment with a higher return of one should become available in the
future.
 The less liquid the investment, the lager the interest rate.
 Time preference, a third component, is the degree to which an individual or organization desire
current rather than future consumption.
 Individuals usually have shorter time preferences, organization longer and society the longest.
 Shorter the time preference, the higher the interest rate and the longer the time preference, the lower
the interest rate.
 Transaction costs are the resources consumed in making loans or exchanging money.
 Larger the loan, the smaller the interest rate because transaction costs are fixed.
 The inflation rate expected also affects the interest rate. Prices including the price of money rise each
year during inflationary times.
 Higher the expected inflation rate, the higher an interest rate the investor desires.
3.2.2 Discount Rate:

Discounting is the process of finding the present value of an amount of cash at some future date, and
along with compounding cash forms the basis of time value of money calculations.

𝑉𝑜 = 𝑉𝑛 /(1.0 + 𝑖)𝑛

Where,

𝑉𝑛 = 𝐹𝑢𝑡𝑢𝑟𝑒𝑣𝑎𝑙𝑢𝑒𝑜𝑓𝑎𝑠𝑖𝑛𝑔𝑙𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑖𝑛𝑦𝑒𝑎𝑟𝑛
𝑉𝑜 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡𝑣𝑎𝑙𝑢𝑒𝑜𝑓𝑠𝑖𝑛𝑙𝑔𝑒𝑝𝑎𝑦𝑒𝑚𝑛𝑡
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒
𝑛 = 𝑡𝑕𝑒𝑦𝑒𝑎𝑟𝑖𝑛𝑤𝑕𝑖𝑐𝑕𝑡𝑕𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑜𝑐𝑐𝑢𝑟𝑠

The discounted value of a cash flow is determined by reducing its value by the appropriate discount
rate for each unit of time between the times when the cash flow is to be valued to the time of the cash
flow. Most often the discount rate is expressed as an annual rate.

3.3.3 Inflation adjustment:

 Inflation is important in investment analysis because the dollar provides the investment returns are
different from those that paid for the investment. They are not comparable because, during inflation,
dollars received in later years will not by as much or dollar received today.
 Inflation effects become more serious the greater the inflation rate, for e.g. in 5 years a dollar is worth
$0.86 at 3% inflation but only $0.54 at 13% inflation.
 The seriousness of inflation effect is increased in forestry investments because they take many years to
complete.
 Inflation is a continuous long-term increase in the general level of overall price level increase. It is not
sufficient for just the price of food, or houschgior clothing to increase.
 The average of all prices must increase. The price increase must also cause a net increase.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 25
  Increase general prices followed by decreased general prices would not be considered an inflationary
period. The general price level at the end of the period must be higher than at the beginning.
 The time period needed to consider a period as inflationary is not strictly defined but is usually
understood to be several years.

Measuring Price Changes:

 Price changes are measured by price indices.

 The price index is simply the ratio of the price in a time period to the price in a base time period.

Algebraically,

𝑃𝑙𝑛 = 𝑃𝑛 /𝑃𝑜 × 100

Where,
𝑃𝑙𝑛 = 𝑡𝑕𝑒𝑝𝑟𝑖𝑐𝑒𝑖𝑛𝑑𝑒𝑥𝑖𝑛𝑦𝑒𝑎𝑟𝑛
𝑃𝑛 = 𝑡𝑕𝑒𝑝𝑟𝑖𝑐𝑒𝑖𝑛𝑦𝑒𝑎𝑟𝑛
𝑃𝑜 = 𝑡𝑕𝑒𝑝𝑟𝑖𝑐𝑒𝑖𝑛𝑦𝑒𝑎𝑟𝑧𝑒𝑟𝑜, 𝑡𝑕𝑒𝑏𝑎𝑠𝑒𝑦𝑒𝑎𝑟

Example:
The price of sal log/cft in 1960 was Rs. 95
In 1975, the price rose to NRs 295
The 1975 price index is

295
𝑃𝑙75 = ∗ 100 = 310.53
95

 The price increase shown by the index is interpreted as the percentage increase i.e. 310.53% in the
above example between 1960 and 1975
 This is the percentage increase over the entire time period and not the annual compound increase.
 The annual compound increase is
15
310.53 − 1.0 = 0.07847 = 7.84%
 Price indices measuring inflation must reflect prices in the whole economy; this is accomplished by
devising a market basket of individual goods, services, and or commodities that are priced every time
period.
 The market basket defines every time period that the index measures, the three major price indices are
the Gross National Product (GNP) deflator, the Consumer‟s Price index (CPI) and the Products Price
Index(PPI)

Correcting PNW for inflation:

 There are several ways in which cash flows can be corrected for inflation.
 Cash flows are originally stated in year zero or constant dollars, inflated to current dollars in the year
they occur, and are then discounted back to present value using the market interest rate.

3.3 Decision Making Criteria:

3.3.1 Present net worth:

 The present net worth criterion is one of two widely used and accepted investment criteria recognizing
the time value of money.
 The PNW is the algebraic sum of the discounted costs and revenues at a specified interest rate.

In formula form:
𝑛
1.0
𝑃𝑁𝑊 = (𝑅𝑡 − 𝐶𝑡 )
(1.0 + 𝑖)𝑡
𝑡=0
Where,
𝑃𝑁𝑊 = 𝑡𝑕𝑒𝑝𝑟𝑒𝑠𝑒𝑛𝑡𝑛𝑒𝑡𝑤𝑜𝑟𝑡𝑕
𝑅𝑡 = 𝑡𝑕𝑒𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑠𝑜𝑟𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝐶𝑡 = 𝑡𝑕𝑒𝑐𝑜𝑠𝑡𝑠𝑜𝑟𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝑡 = 𝑡𝑕𝑒𝑦𝑒𝑎𝑟𝑖𝑛𝑤𝑕𝑖𝑐𝑕𝑡𝑕𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑜𝑐𝑐𝑢𝑟𝑠.
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒, 𝑢𝑠𝑢𝑎𝑙𝑙𝑦𝑡𝑕𝑒𝑎𝑙𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑣𝑒𝑟𝑎𝑡𝑒𝑜𝑓𝑟𝑒𝑡𝑢𝑟𝑛𝑜𝑟𝑡𝑕𝑒𝑐𝑜𝑠𝑡𝑜𝑓𝑐𝑎𝑝𝑖𝑡𝑎𝑙

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  The PNW is interested as the present value of the investments gain or loss at the specified interest
rate.
 An investment is acceptable if the PNW is positive and is not acceptable if it is negative. This is so
because the investment is earning more than the alternative rate of return when PNW is positive.
 The investment earns less than the alternative rate of return when PNW is negative. It is better to
invest in your alternatives with a negative PNW because you will earn more money.
 Another way of looking at PNW is that all costs are charged interest from the time they are incurred
until the end of the investment and all revenues earn interest from the time they are received until the
end of the investment.
 The algebraic sum of the costs and revenues, with interest is then discounted to year zero. This is the
PNW.

Advantage:

1. Net present value method evaluating the investment proposal recognizes the time value of money.
2. It considers all cash flows over the entire life of the project.
3. It is consistence with the objective of maximizing the wealth of the firm that leads to the welfare of the
owners of the firm.

Disadvantage:

1. It is difficult to use.
2. It uses cost of capital as discount rate. But cost of capital is quite difficult concepts understand and
measure in practice.
3. It may not give satisfactory answer when the projects being compared involve different amount of cash
outlay.
4. It may mislead when dealing with alternative projects or limited funds under the condition of unequal
lives.
5. This method emphasis the comparison of NPV and disregards the initial investment involves. Thus,
this method may not give dependable results.

3.3.2 Benefit Cost Ratio:

 It is the ratio of the present value of net cash benefit to the present value of net cash outlay.
 It is calculated by dividing the present value of future cash inflow after tax by present value of cash
outlay.
 Benefit Cost Ratio= PV of future cash inflows after tax/PV of initial cash outlay.

Accept or Reject rule

 Accept the project with BC ratio greater than 1.

 Reject the project if the BC ratio is less than one.

3.3. Land expectation value:

 Land expectation value is another decision criterion also known as faustm and formula, land rent, soil
expectation value.
 Land expectation value is nothing more than a special case of PNW that has certain restructure
assumptions made about it.

These are:

1. Land value is zero

2. The land has no residual stand.
3. The land will be forested in perpetuity.
4. The cash flows from the forest will be the same in perpetuity
1.0
𝐿𝑒 = 𝑉𝑜 × (1.0 + 𝑖)𝑛 × − 1.0
1.0 + 𝑖 𝑛
Where,

𝐿𝑒 = 𝑡𝑕𝑒𝑙𝑎𝑑𝑛𝑒𝑥𝑝𝑒𝑐𝑡𝑎𝑡𝑖𝑜𝑛𝑣𝑎𝑙𝑢𝑒
𝑉0 = 𝑡𝑕𝑒𝑝𝑟𝑒𝑠𝑒𝑛𝑡𝑣𝑎𝑙𝑢𝑒𝑜𝑓𝑎𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑎𝑙𝑝𝑒𝑟𝑖𝑜𝑑𝑖𝑐𝑎𝑛𝑛𝑢𝑖𝑡𝑦𝑡𝑕𝑎𝑡𝑤𝑖𝑙𝑙𝑏𝑒𝑟𝑒𝑐𝑒𝑖𝑣𝑒𝑑𝑒𝑣𝑒𝑟𝑦𝑛𝑦𝑒𝑎𝑟𝑠
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 27
The land expectation value is accepted if it is greater than market price and rejected if it is less than market
price.

3.3.4 Internal Rate of Return (IRR):

 IRR is the rate of return that an investment projects earns.

 It is that rate which gives the projects NPW zero. It is the rate when applied to discount the future
cash inflow makes the PV equal to the initial cash outlay, i.e. zero NPV.
 It is used when the cost of the project and annual cash inflows are given or known but unknown rate
of earnings is to be determined.
 It is a discount rate that makes the PV of future cash inflows of the project equal to the cost of project.
 IRR has been defined as the maximum rate of interest that could be paid for the capital employed over
the life of an investment without loss on the project.
 The method considered net cash flow not the net income.
 IRR is found out by Trial and Error method and by interpolating between tried rates.
 IRR is the interest rate that equalizes the present value of the costs and revenues.
 It is the value of „i‟ that cause the following equation to be true.
𝑛 𝑛
1.0 1.0
𝑅𝑡 = 𝐶𝑡
(1.0 + 𝑖)𝑡 (1.0 + 𝑖)𝑡
𝑡=𝑜 𝑡=𝑜

Where,
𝐼𝑅𝑅 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑙𝑟𝑎𝑡𝑒𝑜𝑓𝑟𝑒𝑡𝑢𝑟𝑛

𝑅𝑡 = 𝑡𝑕𝑒𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑠𝑜𝑟𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝐶𝑡 = 𝑡𝑕𝑒𝑐𝑜𝑠𝑡𝑠𝑜𝑟𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝑡 = 𝑡𝑕𝑒𝑦𝑒𝑎𝑟𝑖𝑛𝑤𝑕𝑖𝑐𝑕𝑡𝑕𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑜𝑐𝑐𝑢𝑟𝑠.
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒𝑤𝑕𝑒𝑛𝑡𝑕𝑒𝑒𝑞𝑢𝑎𝑡𝑖𝑜𝑛𝑖𝑠𝑡𝑟𝑢𝑒𝑎𝑛𝑑𝑖𝑠𝑡𝑕𝑒𝐼𝑅𝑅

Accept Reject and Ranking of the investment project:

1. Accept the investment if the IRR is greater or higher than cost of capital.
2. Reject the project with lower IRR than require rate of return
3. Rank the projects from higher to lower IRR.
Demerits:

1. It involves tedious calculation base on trial an error method.

2. It gives multiple rates if the cash flows are non-conventional (investment in last year) and create
confusion.
3. It is generally difficult to understand and use in practice due to complicated computational problems.
4. Projects selected base on higher IRR may not be profitable one.
5. Single discount rate ignores the varying future interest rate.

3.4 Risk and uncertainly evaluation:

1. There are three different conditions under which decisions are made. These are certainly risk and
uncertainly.
2. Certainly exists if there is only one outcome for each alternative. The outcomes for each alternative are
known; thus choosing the alternative automatically defines the outcome.
3. Risk exists of a probability distribution can be attached to the different states of nature and hence to
the different outcome.
4. The state of nature cannot be predicted for each occurrence but the number of times each state of
nature will occur if the decision is made frequently can be predicted.
5. The probability distributions can come from different sources. They may be based on historical
evidence and records or they may be obtained subjectively by asking experts for their opinion about
the likelihood of states of nature occurring.
6. Uncertainly exits if there is no information about the probability distributions of the states of nature.
This means that not even a subjective estimate of the probabilities can be made by experts.
7. Many people believe that uncertainly does not exist under this strict definition. These people believe
that subjective probability distributions can be assigned if the analyst knows enough about the system
to identify alternatives and states of nature and to predict outcomes for them. They feel it is highly
unlikely that all this information is known but that at a minimum, subjective probabilities are not.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 28
Table: Decision matrix

Alternatives States of nature

𝑆1 𝑆2 𝑆3
𝐴1 011 012 013
𝐴2 021 022 023
𝑅3 031 032 033

3.4.1 Risk Management:

1. Risk can be defined and the chance that the actual return can be other than expected return.
2. Risk refers to the variability in the returns from an investment. Higher variability implies higher risk.

Attitudes towards risk:

 Risk and return are two important considerations for investment. All investors prefer higher return to
lower return and lower risk to higher risk.
 Based on investor‟s attitudes towards risk, there are three types of investors.

1. Risk averters: investor prefers the investment with less risk to one with more risk, assuming both
investment offer same expected return. Risk aversion is the attitude of rational investors. A risk avert
expects to earn higher rates of return on investment of higher risk and lower rates on lower risk
investments.
2. Risk neutral-who do not require changes in their required rate of return for the changes in risk.
3. Risk seekers-who could reduce their required rate of return for increased risk.

Decision Making:

1. The Riskiness of an investment is the amount of certainly with which the return on that investment,
including recouping the initial investment can be predicted.
2. Riskiness is defined as the variability of the returns from a proposed investment.
3. It is measured by either the variance, or the standard deviation of a probability distribution of the
distribution of the returns on that investment.

The Variance of an assets return from historical sample return can be calculated:

2
n 

  r jt  r j

 2j  t 1 
n 1
Where,
 2j =Variance of asset j
n= the number of observations (periods) in the sample
rjt = the return on the asset j in period i

rj = the expected return on the asset j
By Standard deviation

 j   2
j

2
n
 
  r jt  E ( r j ) 
t 1  

n 1
4. The distribution may be either empirically or subjectively determined. Some evaluation techniques use
simulation based on very limited subjective data.
5. The distribution of expected returns for four investments are shown in figure below:

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 29
 Investment A Investment C

Probability Investment B Investment D

Probability

0 5 10 0 4 5 10
PNW PNW
Thousands rupees Thousands rupees

6. These are normal distributions

7. The investment return is measured on the X axis by present net worth. The high points of the
distribution are the mean and provide the best estimate (the point estimate) of the investments‟ return.
8. The Y-axis measures the probability that the indicated investment return will occur.
9. The point estimates for investments (A and B) are both Rs. 5000. The investor would be indifferent
between these two investments if risk were not considered.
10. The distribution show that investment A is far less risky than investment B. Investment A will never be
less than about Rs.4000 nor more than about Rs.6000, while there is a chance that investment B will
return 0 rupees.
11. Ordinary, the investor is assumed be a risk averter and would choose investment A rather than
investment B.
12. The investor who was not a risk averter that is, was a gambler of the choose investment B because of
the chance of receiving a return as high as Rs. 10,000.
13. The return for investments C and D are different. The point estimate for investment C is Rs. 4000
while for D is is Rs. 5000.
14. Investment D would be chosen if risk were ignored. The distribution shows that investment C with
lower return is less risky than investment D with the higher return. The decision is ambiguous
because the higher return is for the riskier investment.
15. The standard deviation or variance for each distribution could be calculated and used as quantitative
guidelines of each investments riskiness; however they do not provide a final decision.
16. The choice between these investments depends on how much risk the individual investor is willing to
take.
17. The distribution or their means and standard deviations can be estimated either empirically or
subjectively.
18. Empirical estimation is based on actual observations of past investments. Studies can be made and
means and variance calculated. However there must be many investments with similar to those on
which the calculations were based.
19. Subjective estimate by the managerial personal families with the proposed investment may be possible
ifa normal distribution of returns can be assumed. A best estimate of cash flow is obtained and used
as the distribution mean.
20. Variability can be estimated by obtaining judgmental estimates of the likelihood of the cash flow being
more or less than the mean.

3.4.2 Decision making with uncertainly:

 Decision models for decision making with uncertainly usually require developing a decision or pay off
matrix.

Alternatives States of nature

𝑆1 𝑆2 𝑆3
𝐴1 12 8 2
𝐴2 7 5 5
𝑅3 0 10 15

 In the above table, if alternatives 1 are chosen a less of 12 units will occur for state of nature S, a loss
of 8 units for S2 and a loss of 2 units for S3.
 The mimimax criterion, also called the maximum criterion, takes a pessimistic view of life and seeks to
avoid the most objectionable circumstances. The criterion is called minimax because it minimizes the

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 30
 chance of the maximum loss. The criterion is to choose the worst possible outcome under each
alternative and to choose the least objectionable alternatives from among these.
 The worst possible outcomes in the decision matrix are; S1 for A1 (loss=12); S2 for A2 (loss= 7); and
S3 for A3 (loss=15). The criterion instructs you to choose A2 because this is where the possible loss is
minimized.
 The minimum criterion also called the maximax criterion, takes and optimistic view of life and seeks to
obtain the highest payoff from those available.
 The criterion is called minimum because it minimizes the minimum payoff.
 It implicitly assumes only the best possible outcomes will occurs and picks the best among them.
 The criterion is to choose the best possible outcomes for each alternatives and then to choose the
alternatives with the best among these.
 The best outcomes in the decision matrix (above table) are S3 for A1 (loss = 2); S2 and S3 for A2
(loss=5) and S1 for A3 (loss=0). The criterion instructs to pick A3 (loss=0).
 The criterion instructs to pick A3 because this has the least loss that is the highest payoff.
 The minimax regret criterion incorporates the idea of opportunities cost into the decision making
process.
 The decision matrix is recalculated to show the amount of „regret” that would occur in each state of
nature if the wrong alternative were chosen.
 The alternative with the minimum loss in each state of nature is chosen as the most desirable and
subtracted from all other outcomes for the state of nature. The resulting decision matrix decision
matrix is then minimaxed.
 In the above table, if S1 prevailed, the best alternative is A3 because that has the least loss.
 This loss value is then subtracted from all other outcomes in S1 to show the amount of regret.

Table: Decision matrix for minimax region criterion:

Alternatives States of nature

𝑆1 𝑆2 𝑆3
𝐴1 12-0 = 12* 8-5=3 2-2=0
𝐴2 7-0=7* 5-5=0 5-2=3
𝑅3 0-0=0 10-5=5 15-2=13*
Note * maximum amount of regret for each alternate

 The rationale is that the decision maker would have no regret if he chooses A3 and S1 prevailed
because that is the best he could do.
 The difference between A3 and the other alternatives is the amount of regret incurred if one of these
alternatives are chosen instead of A3
 The procedure is repeated for the other state of nature, S2 and S3.
 The maximum amount of regret for each alternative is identified in the matrix by asterisks.
 A2 is chosen as the course of action because it has minimum amount of regret.
 The principle of insufficient reason states that you should assign equal weight to each state of nature
and choose the alternatives with the highest payoff if you know absolutely nothing about the
probabilities of occurrences.
 The criterion require taking the mean payoff for each alternative, which in the first table is A1 =
7.3333, A2 = 5.667; and A3 = 8.333.
 A2 is chosen because it has the highest payoff (least loss). This criterion is very close to placing a
subjective probability distribution on the state of nature.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 31
 Unit-4
Rotation
4.1 Concept and types of rotation
4.1.1 Concepts definitions
4.1.2 Types of rotations
4.1.3 Choice and length of rotation
4.2 Rotation determinations methods
4.2.1 Biological criteria
4.2.2 Financial/economic criteria
4.2.3 Social/environmental criteria

4.1 Concept and types of rotation:

1. Agricultural crops are sown, they ripen and are harvested once or twice a year, at the same time; their
period of maturity is easily determined
2. Forest Crop:
 The main forest product (timber) takes a long time to mature.
 Maturity of the tree is generally estimated by the age, size and growth vigor
 Beyond age/size, quality of timber starts falling off.
 Maturity of timber depends on natural condition of growth and economics condition.

4.1.1 Concepts Definitions

Definition:

1. The period which a forest crop takes between its formation and final felling is known as rotation or
production period.
2. Rotation or production period is the interval of time between the formation of a young crop by
seedling, planting or other means and its final harvesting (Osmaston).
3. Rotation is the period which elapses between the formation of a wood and the time when it is finally
cut over (Jerram)

Concept of rotation in regular crops:

1. The term rotation is correctly applicable to regular crop only.
2. In clear-felling system and plantation, rotation is definite period of interval between the year of
formation and final felling.
3. In regular forest in general, entire crops of trees of a sizeable are felled at a time (regeneration period
in regular shelter wood system) when ready for felling.
4. There is more or less, a clear production period which can be planned in advance to give timber, which
satisfies the objects of management
5. In shelter wood system, rotation is fixed for the whole working circle as a unit, as the average length of
time between the establishment of crops and their harvesting.
Some limitations:

1. Rate of growth will vary with site variation, even for the same species.
2. It involves sacrifice of immature trees/crops, as some will not have reached exploitable size.
3. Accident, such as fire, disease, and wind-throw may happen, necessitating felling earlier than
planned.
4. To obtain desired profits, stand will have to be felled finally at various times depending on their rate of
growth.

Concept rotation in irregular forest:

In uneven aged (irregular) selection forest, trees are selected individually on their merit for felling depending
on:
 Qualities of size vigor and suitability for markets
 Adjustment of proportion of different sizes.
 Silvicultural principles, e.g. removals of inferior stems in favor of better ones.
 Such a system clearly has greater flexibility, and enables forester to adopt feelings to suit different
rates of growth caused by variation in site or species.
 Moreover, forest is a perpetual entity and never suffers complete clearance of trees on any part of the
area, except periodical thinning. Therefore
 Size being the criterion for felling, age is known, and
 There being no final harvesting, there is no rotation as defined above
Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 32
  However, one could say that its rotation period is equal to that of the average age of the exploitable
size trees removed, the exploitable age, at which they attain the size required to fulfill the objects of
management.
 Maturity in selection forests is related to size, and exploitable size is fixed for removal of individual
trees.
 Size should be used as a standard for exploitability, and not age.
4.12 Types of Rotations
 Rotation is an important factor in the regulation of yield and proper management of the forest as a
whole.
 It depends mainly on the objects of management.

Types;
1. Physical Rotation
2. Silvicultural Rotation
3. Technical Rotation
4. Rotation of maximum volume production
5. Rotation of highest income/revenue
6. Financial Rotation

1. Physical Rotation;

a. It is the rotation, which coincide with the natural lease of life of a species on given site.
b. The natural life span of trees varies greatly with species and site factors. This rotation is applicable
only in case of protection and amenity forest, park lands and roadside avenues.
c. It is very variable, fairly long and also indefinite.
d. It is also interpreted as the rotation in which the age up to which the trees remain, sound, or produce
viable seed in high forest and in coppice crops can put forth reliable coppice shoots.
e. This rotation is not of any relevance to economic forestry.
2. Silvilcultural Rotation:

a. It is the rotation through which a species retains satisfactory vigor of growth and reproduction on a
given site.
b. In can neither be lower than the age at which trees start producing fertile seed in sufficient quantity,
nor beyond the age when they stop doing so.
c. It is not only long but has very wide of limits.
d. It is useful in forest managed primarily for aesthetic and recreational purpose, where large old trees
with accompanying regeneration provide scenic beauty.
e. It is similar to physical rotation.

3. Technical Rotation;

a. It is rotation under which a species yields the maximum material of a specified size or suitability for
economic conversions of for special use.
b. It aims at producing the maximum material of specific dimension/quality for specific purpose, such as
railway slippers, saw logs etc.
c. Since trees in a crop may yield different assortments of material, and the trees may attain given size at
different times, it provides no pint for fixing the rotation.
4. Rotation of maximum volume production:

a. It is the rotation that yields the maximum annual quantity of material i.e. the age at which the mean
annual increment (MAI) culminates.
b. MAI refer to the stand but not that of individual trees. The length of the rotation will coincide with the
year when the average or volume increment per unit area reaches the maximum i.e. the age indicated
by the point of intersection of CAI and MAI.
c. This rotation is particularly suitable for adoption where the total quantity of woody material is
important and not the size specifications, e.g. firewood, raw material for paper industries.
d. If rotation is r, final yield Yr and volumes of thinning at various ages Va, Vb, Vc etc, then the age at
which

𝑌𝑟 + 𝑣
𝑀𝐴𝐼 =
𝑟

Is the maximum, is the rotation maximum of volume production

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 33
 CAI
MAI

Rotation age
5. Rotation of highest income/revenue:

1. It is the rotation which yields the highest average annual gross or net income irrespective of the capital
values of the forests.
2. It is calculated without interest and irrespective of the time when the items of income or expenditure
occurs.

𝑖𝑛𝑐𝑜𝑚𝑒 𝑌𝑟 + 𝑇𝑟 − 𝐶 − 𝑒
𝑀𝑒𝑎𝑛𝑎𝑛𝑛𝑢𝑎𝑙𝑛𝑒𝑡 𝑎𝑟𝑒𝑎 =
𝑢𝑛𝑖𝑡 𝑅

Where, Yr = value of final felling (final yield) per unit area

Tr = Value of thinning during rotation period R, per unit area
r= rotation (year)
C= Cost of formation of stand, per unit area.
e = annual cost of annual administration/maintenance, per unit area
r = rotation (year)
3. The rotation, at which the net revenue as calculated is maximum, is the rotation of highest
revenue/income.
4. This rotation is important from the overall national point of view.

6. Financial rotation:

1. It is rotation which yields the highest net return on the invested capital
2. It differs from the rotation of highest net income in that all items of revenue and expenditure are
calculated with compound interest at an assumed rate, usually the rate at which the gov. is able to
borrow money.
3. It is the rotation which gives the highest discounted profit, usually at its commencement.
4. Is the rotation which is most profitable
5. It is rotation which gives the net return on capital value.

4.1.3 Choice and length of rotation:

For considering the choice of most suitable rotation under different social, silvilcultural and economic
conditions, the above mentioned types may be subdivided into three main groups, which satisfy three broad
objectives.

1. Rotations controlling the supply of certain service i.e. the silvilcultural and physical rotations.
2. Rotation controlling the output of material forest products in form or quality i.e. the technical and
maximum volume production rotations.
3. Rotation controlling the financial returns, i.e. the rotation of maximum gross or net income and
financial rotation.

Before making a choice of suitable rotation, the forester has to carefully consider the
following:

 Objectives of management
 Silvilcultural requirements of the species
 Productivity of site
 The market demand and/or rational requirements
 Socio-economic policy of the state/labor conditions employment‟s etc
 Financial and economic aspects
Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 34
Length of Rotation:

The length of rotation depends on:

1. Rate of growth: species, fertility, thinning

2. Silvilcultural characteristics of the species: life span, seed production age etc.
3. Response of the soil: exposure, biotic influence etc.
4. Economic considerations: cost, price, time
5. Social condition: Socioeconomic, employment, policy

Why Rotation is Important?

1. It is a part of planning and hence ease in management

2. It fixes the time of harvest for specific purposes
3. It guides to provide maximum benefits from a limited resources
4. regulation of yield
5. It fixes the size/quality of trees for specific purposes.

4.2 Rotation determination methods

4.2.1 Biological Criteria: Insects, fire, mean Annual increment

4.2.2 Financial/economic criteria: Money yield table, forest rent, land expectations value, present net worth,
internal rate of return, financial maturity

4.2.3 Social/environmental; weather, labor available, user‟s need

4.2.2 Financial/economic criteria:

1. Mean Annual increment (MAI)

2. Money Yield Table
3. Forest rent
4. Land Expectation Value
5. Present Net Worth
6. Financial Maturity

1. Mean Annual Increment (MAI):

The MAI is the total volume per acre divided by the age of the stand at that time
𝐴
𝑀𝐴𝐼 = 𝐴
𝐴
Where,

MAI = Mean Annual Increment

A = the stand age
Y = yield or volume of wood that will be harvested at age A
 The MAI criteria do not directly consider the value of the products produced.
 It does not take into account direct production cost.

2. Money Yield Table:

 Different prices over time are often assumed for the money yield table.
 Money yield table is used to maximize total revenue in a single rotation, but not over time.
 Neither production cost nor the time value of money is taken into account

3. Forest Rent:

It is the average net income per year and is calculated by subtracting cost per acre by revenue per acre,
divided by age.
𝑇𝑅𝐴−𝑇𝐶𝐴
𝐹𝑅𝐴 =
𝐴

Where,

A = Age of the stand

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 35
FR = Forest rent in year A
TR = Total Revenue from harvesting the stand age A, the money yield table
TC = Total cost of growing the stand to age A.

4. Land Expectation value:

Land expectation value is nothing more than a special case of PNW that has certain restrictive assumptions
made on it. These are:

 Land value is zero

 The land has no residual stand
 The land will be forested in perpetuity
 The cash flows from the forest will be the same in perpetuity

(1.0+𝑖)𝑛
Land expectation value, 𝑉𝑒 = 𝑉0 ×
(1.0+𝑖)𝑛 −1.0
Where,
𝑉𝑒 = 𝑡𝑕𝑒𝑙𝑎𝑛𝑑𝑒𝑥𝑝𝑒𝑐𝑡𝑎𝑡𝑖𝑜𝑛𝑣𝑎𝑙𝑢𝑒
𝑉0 = 𝑡𝑕𝑒𝑝𝑟𝑒𝑠𝑒𝑛𝑡𝑣𝑎𝑙𝑢𝑒𝑜𝑓𝑎𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑎𝑙𝑝𝑒𝑟𝑖𝑜𝑑𝑖𝑐𝑎𝑛𝑛𝑢𝑖𝑡𝑦𝑡𝑕𝑎𝑡𝑤𝑖𝑙𝑙𝑏𝑒𝑒𝑣𝑒𝑟𝑦𝑛𝑦𝑒𝑎𝑟
𝑛 = 𝑡𝑕𝑒𝑛𝑢𝑚𝑏𝑒𝑟𝑜𝑓𝑦𝑒𝑎𝑟𝑠𝑏𝑒𝑡𝑤𝑒𝑒𝑛𝑎𝑛𝑛𝑢𝑖𝑡𝑦𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒

 The criteria consider all costs and revenue except land cost.
 If maximum Le is found at year 20 which is indicated as the rotation age
 Time value of money is considered, which is important in determining rotation age.
 Le has shorter rotation than MAI criterion.
5. Present Net Worth:

The difference between the PNW and the Le criterion is that land and its subsequent sale are included in PNW
and the analysis is made for a single rotation.

1. It considers all future costs & revenue as well as time value of money.
2. PNW is perhaps the most widely accepted single criterion for management, and hence recommended
single criterion for rotation determinations.
𝑛
1.0
𝑃𝑁𝑊 = 𝑅𝑡 − 𝐶𝑡
(1.0 + 𝑖)𝑡
𝑡=𝑜

Where,
𝑃𝑁𝑊 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡𝑛𝑒𝑤𝑜𝑟𝑡𝑕
𝑅𝑡 = 𝑡𝑕𝑒𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑜𝑟𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝐶𝑡 = 𝑡𝑕𝑒𝑐𝑜𝑠𝑡𝑜𝑟𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑖𝑛𝑦𝑒𝑎𝑟𝑡
𝑡 = 𝑡𝑕𝑒𝑦𝑒𝑎𝑟𝑖𝑛𝑤𝑕𝑖𝑐𝑕𝑡𝑕𝑒𝑐𝑎𝑠𝑕𝑓𝑙𝑜𝑤𝑠𝑜𝑐𝑐𝑢𝑟𝑠
𝑖 = 𝑡𝑕𝑒𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑟𝑎𝑡𝑒

6. Financial Maturity

 A timber tree or individual tree is financially mature when the increase in selling value in the periods
between cuts is equal to the alternative rate of return (ARR)
 These calculations are done prior to each time a stand or tree might be cut and cover the period until
the next time a cut might occurs.
 It offer by the authors as a field guide

Percent ARR

Value of growth

Time

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 36
Rotation and Conversion Period:

1. The term conversion is defined as “a change from one silvilcultural system or one (set of) species to
another”
2. Conversions period is “the period during which a change from one silvilcultural system to another is
effected and/or from one species to another”.
3. Rotation and conversion period are basically two entirely different terms.
4. Conversions period is indicated where a change in silvicultural system is contemplated, or where a
forest is brought under scientific management for the first time, and no rotation can be calculated or
applied straight away for various reasons.
5. While it is necessary to fix a rotation in case of regular forests, it is not so with conversion period, the
latter is fixed where it is considered necessary to minimize sacrifice.
6. Conversion period is fixed only when a change has to be made from one system to another whereas
rotations are a must for the scientific management of any forest.
7. Conversion period is usually less than rotation, may be sometimes even more than rotation, but when
equal, it is not distinguished. The greater the difference between the conversion period and rotation,
greater is the sacrifice and more difficult it is to bring the forest on to the contemplated rotation at the
end of conversion period.
8. Conversion period is usually kept less than rotation when it is desirable to remove the mature crop
earlier than the rotation period due to:
a. Crop not likely to survive the full rotation period
b. Crop has suffered from some injury.
c. Crop is very openly or irregularly stocked
d. Crop is putting on small increment
e. Advance growth is already present on the ground and, therefore time required for replacement
of mature crop by new one can be shortened.
9. Conversion period is a very important considerations, when conversion period is short, the conversion
proceed with a fast pace or speed; on the other hand, if it is long, the conversion is slow. The following
considerations affect the decision about the length of conversion period.
a. Sacrifice of immature crop
b. Proportion of the over mature growing stock with negative increment.
c. Gap between the age of first converted crop and the exploitable age at the end of conversion
period.

Purpose of Conversion:

1. Change in crop composition

a. increasing yield of the existing forests

b. to meet the sharply increasing demand of industrial materials
 paper industry
 Packing case industry
 Cigarette industry

2. Change in silvilcultural system:

a. Change in mode of regeneration

b. Change in the character of the crop without change in mode of regeneration
c. Advantage of particular system
d. Failure of an existing system
e. Advances in silvilcultural knowledge and perfection of regeneration technique
f. Development of communications and increase in demand.

Some examples of Conversion in Nepal:

1. Conversion of coppice forest to high forest (Sal) in Shankar Nagar, Butwal by Department of Forest
Research and Survey.
2. Conversion of natural forest to plantation forest (degraded sal forest) in Sagarnath by Sagarnath
Forest Development Project.

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 Unit-5
Forest Regulation:
5.1 Concepts and approaches
5.1.1 The normal forest concepts
5.1.2 Yield tables and yield regulations
5.2 Regulating plantation forest
5.2.1 Concepts
5.2.2 Applications
5.3 Regulating Natural forests
5.3.1 Concepts
5.3.2 Approaches
5.4 Allowable cut methods
5.4.1 Area control
5.4.2 Volume control
5.4.3 Combined area and volume control

Forest Regulation:
General Concept:

The aim of yield regulation is to determine the crop yield and the prescribed means of realizing it. It embodies
two functions- firstly, yield determination or the calculation of the amount of material which may be removed
from a forest annually or periodically and secondly, prescribing the means of realizing it i.e. how and from
where in the forest the calculated quantity is to be removed.

The two functions of yield regulation should be so applied that the highest possible benefits could be realized
without the forest being overexploited and thus endangering future yields. The aim of regulating the yield is
three fold:

1. To cut each crop or tree at maturity, and to secure the maximum yield of the required produce,
2. To cut about the same amount of material each year or at periodic intervals,
3. To limit the area to be cut annually to that which can be regenerated.

Introduction:

1. Forest regulation determines the what, where, and when of timber harvesting on the managed forest
2. The regulation decisions indicate what species and how much of them should be cut.
3. The heart of any forest regulation plan is to indicate the time period, most commonly the 5-year period
in which the timber should be cut.
4. Forest regulation decisions are far-reaching and ubiquitous; they determine both the timber and non-
timber products obtained from the forest.
5. A regulated forest is one that yields an annual or periodic crop of about equal volume, size and quality.
6. Forest regulation consists of manipulating forest lands and growing stock to best achieve the forest
owner‟s yield objectives.
7. The necessary condition for a regulated forest is the periodic yield, not the quantity or degree of site
utilization.
8. Regulating a forest is often a main forest management objective. The regulated forest is desired to
obtain a sustained yield of forest crops.
9. However, depending on the current forest condition, sustained yield may not occur for many years.
10. Regulation of a forest may cause opportunity costs in other management objectives, such as even
current wood floe, maximizing PNW, of maintaining scenic vistas.
11. Thus, forest regulation consists of maintaining forest lands and growing stock to best achieve the
forest owner‟s yield objectives.

5.1 Concepts and approaches:

5.1.1 The normal forest concept:

 A normal forest is an ideal state of forest condition, which serves as standard for comparison of an
actual forest estate, so that the deficiencies of the later are brought out for purposes of sustained yield
management.
 On the given site, and for a given object of management, is a forest which has an ideal growing stock,
an ideal distribution of age-classes of the component crop and is putting on an ideal increment.

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  From such a forest, annual or periodic yields equal to the increment can be realized indefinitely,
without endangering future yield and without detriment to the site of perfection, serving the purpose of
good scientific management.
 “A forest which, for a given site and given objects of management, is ideally constituted as regards
growing stocks, age class distribution and increment, and from which the annual or periodic removal
of produce equal to the increment can be continued indefinitely without endangering future yields. A
forest which by reason of normalcy in these respects serve as a standard of comparison for sustained
yield management “(Glossary of Technical Terms)

Normality Concept not absolute: related to treatment and rotation:

 As a result of growth of trees, harvesting and other unforeseen influences, the condition of forest
changes.
 Even if normality ideal condition is achieved in a forest, it is seldom possible to preserve it for a long
time.
 There is no absolute normality, remaining unaltered everywhere in the forest, and for all time, but only
a relative one which corresponding best to the circumstances for the time being.
 The Normal forest is purely an artificial conception developed to meet the needs of forest management.
 No virgin forest is normal. The nearest approach to theoretical normality is made in plantation, which
are entirely artificial.
 There is no such thing as absolute normality is related to both rotation, and the system of
management.
 What are normal increment, normal age classes and normal growing stock for a forest on a sixty-year
rotation is obviously not normal for a hundred –year rotation.
 Similarly, the data for normality may vary for a coppice forest; an even aged high forest and a selection
forest, although the species, the site and the rotation may be the same in all classes.
 The normal forest is created not by nature, but by progressive scientific treatment. It is a
mathematical abstraction, on which all methods of yield regulation are based.
 The normal forest and its management can be demonstrated by assuming a 25 hectare forest on a 25
year rotation with 25 stands, each 1 year older than the next. The site is equal on all stands.
 Each stand is cut on January 1 of its 25th year and instantaneously regenerated.
 In figure1, stand A1 is one year old in 1975, 2 years old in 1976, 3 years old in 1977 and 25 years old
in 1999.
 The sequence starts in 1975. A normal age class distribution exists because there are 25 stands, each
varying in age by an equal internal, the oldest being equal to the rotation age. Their productivity is
equal because the site and stocking are equal on each stand.
 On January 1, 1976 stand E5 is cut, because it has reached rotation age, and is instanteouly
regenerated to normal stocking.

1975 1976

1 2 3 4 5 1 2 3 4 5
A 1 2 3 4 5 A 2 3 4 5 6
B 6 7 8 9 10 B 7 8 9 10 11
C 11 12 13 14 15 C 12 13 14 15 16
D 16 17 18 19 20 D 17 18 19 20 21
E 21 22 23 14 15 E 22 23 24 25 1

1977 1978

1 2 3 4 5 1 2 3 4 5
A 3 4 5 6 7 A 25 1 2 3 4
B 8 9 10 11 12 B 5 6 7 8 9
C 13 14 15 16 17 C 10 11 12 13 14
D 18 19 20 21 22 D 15 16 17 18 19
E 23 24 25 1 2 E 20 21 22 23 24

Figure 1: Map of normal forest over time, Number in cells stand age.

 This harvesting sequence continues in perpetuity. The oldest stand is cut each year and regenerated.
The flow of wood from the forest is constant and equal because each stand is the same or equally
productive.

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  A normal forest and a regulated forest are not the same thing. The difference is that all normal forests
are regulated but not all regulated forests are normal.
 A normal forest is a maximum concept (maximum increment) and deals with an even aged forest.
 A regulated forest may be even or uneven aged and need not produce maximum increment. Thus a
normal forest is special case of a regulated forest.

Normality in regular/even aged forests:

 The clear felling system, in which all age gradations from one year to rotation age are present, each
occupying equi-productive areas, in which the rotation age coupe is felled and regenerated every year,
offers the simplest example of a conventional normal forest, capable of giving annual sustained yield.
 It is not at all necessary, though desirable, that each age-gradation be in one compact area, it may be
scattered among other age gradations throughout the forest, provided the total area is correct.
 Except when the rotations are very short, as in coppice system and/or plantations of some fast
growing species, it is seldom practical to distinguish between age differences of only one year,
especially where regeneration is mainly natural. In such cases, five, ten of even more age gradations
may be grouped together to form an age class.
 Shorter the regeneration period, narrower will be the age class range and more even aged the stand;
conversely. Longer the regeneration period, wider will be the age class range and less even aged the
stand.

Normality in irregular/uneven aged forests:

 The number of trees in each size class can ascertain normality of an uneven-aged selection forest; it
must have a normal series of size-gradations of the normal even-aged.
 In addition, it must have the normal volume and normal increment, as well as the amount of
irregularity per unit area that is deemed to be most satisfactory.
 About irregular selection forests, some people even think there can be no normal selection forest; this
of course is incorrect. It is true that it is easy to visualize a normal forest of pure, even aged, density
stocked stand, each age occupying separate areas arranged in a sequence.

5.1.2 Yield tables and yield regulations:

(Growth and yield: Growth is the amount of increase over a given period of time and yield is the total
amount actually harvested at a given time. In other words, yield is the summation of annual
increments and growth is the rate of change in the yield function. The underlying principle for growth
determination is that the future growth is predicted from the past growth of the same or similar stand)

1. Yield table is a tabular statement which summarizes on per unit area basis all the essential data
relating to the development of a fully stocked and regularly thinned even aged crop at periodic
intervals covering the greater part of its useful life.
2. It differs from the volume table in the sense that while the volume tables gives the volume of an
average tree by diameter and/or height classes, yield tables gives different parameters of a crop such
as number of trees crop height, crop diameter, crop basal area, volume of standing crop, volume
removed in thinning, MAI, CAI etc. It gives all the quantitative information regarding development of a
crop.
3. Yield table is not applicable to uneven aged forest because in its present form it has been compiled
from even aged pure crops and therefore applicable to them alone.
4. Yield tables have not been prepared so far for un even aged crops because of the difficulties involved
and the main difficulty is that there is no one representative average age.
5. Some tables have been prepared for such crops but they show the ratio of increment (current of mean
annual) to help in deciding the policy of management
6. Yield table gives the expected growth of forest stands or its portion based upon growth measured or
inferred from the study of other stands.
7. This also denotes growth prediction tables based upon age and site for fully stocked, even aged stand.
8. Yield tables are in the form of growth charts, tables or formulas,

Example of Yield table format:

Age Very poor site Poor site Fair Site Good Site
Top DBH V/ha Top DBH V/ha Top DBH V/ha Top DBH V/ha
Ht BA MAI Ht BA MAI Ht BA MAI Ht BA MAI

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Kinds of yield tables:

Yield tables are further classified on the basis of the grades of thinning and whether the outturn is expressed
in volume or value.

A. On the basis of the number of grades of thinning used:

1. Single yield table: It is a yield table in which parameters have been given only for one grade of thinning
which is usually c grade.
2. Multiple yield tables: These are yield tables in which data are given for different grades of thinning.

B. On the basis of volume/value given:

1. Volume yield table: It is a yield table which expresses outturn in terms of volumes.
2. Money yield tables: It is a yield table constructed from volume yield table in which outturn is
expressed in terms of money instead of volume.

C. On the basis of applicability:

1. Normal Yield Table:

 A normal yield table is based on two independent variables, age and site (species constant),
and applies to fully stocked (or normal) stands.
 It depicts relationships between volume/unit area together with other stand parameters and
the independent variables.

2. Empirical Yield Table:

 In contrast to normal yield tables, Empirical yield tables are based on average rather than
fully stocked stands.
 The resulting yield tables describe stand characteristics for the average stand density
encountered during the collection of field data.

Normal and empirical yield tables essentially have the same limitations, namely:

1. The difficulty of locating fully stocked stands or representatives average stocked stands from which to
collect the basic data.
2. Stocking may not have always been „fully stocked” or “average”.
3. The problem of selecting correction factors to apply to stands of density other than normal or average.
3. Variable Density yield able:

 The limitations listed above for normal and empirical yield tables led to the development of
techniques for compiling tables with three independent variables, stand density being included as
the third variables: hence the term variable density yield tables.
 Basal area/area, mean diameter or other stand density indices are used to define the density
classes.
 Such yield tables are particularly useful for abnormal stands e.g. abnormal due to early
establishment problems, insect and fungal attack, drought, fire, fluctuating demands for produce,
etc.

Application and use of yield table:

1. Determination of site quality or fractional site quality.

2. Estimation of total yield or growing stock.
a. Estimation of total yield or growing stock.
b. Estimation of total yield or growing stock at some future age of a stand
3. Determination of increment of stand.
4. Determination of rotation
5. Preparation of stock map by site qualities.
6. As a guide to silvilcultural thinning
a. Number of stems corresponding to a given age
b. Number of trees corresponding to a given crop diameter.

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Yield Regulation:

 A term generally applied to the determination of the yield and the prescribed means of realizing it.
 It means the fixing in advance, usually for a short period-the working plan period-the amount of
timber or other produce which may be removed from the forest, annually or periodically.

Yield Regulation involved two functions:

1. Calculation/determination of amount of yield and prescribing the means of achieving it.

2. Construction of a cutting (felling) plan.

“Correct regulation of yield is one of the main functions of sound forest management”

The object of regulating yield, in short is:

1. To cut each crop or tree at maturity

2. To obtain maximum yield of the desired produce
3. To cut, approximately, the same quantity of material annually or periodically and
4. To limit the area to be felled to that which can be regenerated.

The yield is usually regulated for the period of the working plan.

5.2 Regulating Plantation Forest (even aged forest):

5.2.1 Concepts:

 Even aged forests are those forests which are composed of even aged woods.
 The term even aged used in this definition is applied to a stand consisting of trees of approximately the
same age.
 Differences up to 25% of the rotation age may be allowed in cases where a stand is not harvested for
hundred years or more
 Even aged forests and their management predominate in forestry for two good reasons.
 First, the most important commercial tree species are generally intolerant and hence are found and
best managed in even aged stands.
 Second, economies of scale make it less expensive to reproduce and harvest even aged stands.
 Even aged management is keyed to the periodic birth and death of stands as determined by rotation
age.
 While rotation age is surely the dominant decision, many others are needed to characterize the
structure, quality, and growth of stands on each unit of area.

Decision needed in even aged management (Davis and Johnson, 1987):

1. Rotation Length
2. Commercial thinning
3. Species for regeneration
4. Site preparation and regeneration method
5. Other cultural treatment.

1. Rotation Length: The interval between one regeneration harvest and next regeneration harvest. The stand
age at final harvest and the rotation interval between harvests are the same if new trees are successfully
established the same year as the existing stand is harvested. If the establishment is delayed, age of harvest is
less than the rotation and if advanced regeneration is considered as final crop for next rotation then age of
final harvest is more than rotation age.
a. The regulatory rotation age is the number of years between final harvest cuts. This is the number of
years that would be used in cash flow analysis.
b. The cutting rotation age is the age of the timber stand when it is cut.
c. Cutting rotation age may be less than (in clear cut system where land is left fallow for 1 or more
years before stand establishment), equal to (new stand established immediately) or greater than
(reproduction is established prior to harvest, shelter wood system) the regulatory rotation age.

2. Commercial thinning: The number and timing of entries and the amount and kind of trees removed at
each intermediate entry prior to regeneration harvest.
3. Species for regeneration: Species and genetic stock selected to regenerate each stand type in the forest.
4. Site preparation and regeneration method: The combination of pre and post harvest treatments
scheduled to establish the desired species and control early growth.
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5. Other cultural treatment: Pre-commercial thinning, release and fertilization.

In a simplest case, a regulated even aged forest is composed of single species in a uniform site giving equal
growth under same management intensity with each age class forming one stand type.

5.2.2 Application:

Strategies for even aged forest regulation:

 Given the existing forest and a conception of the fully regulated forest that we would like to achieve,
classical timber management scheduling addressed the questions of how many area and much volume
to cut
 Over the years of forest management history, several methods for determining cut were developed.
 Most of these methods fall into one of following two categories.

1. Area Control
2. Volume Control

1. Area Control:

 The principle of area control is very simple: harvest and regenerate the same number of area each year
or period that would be harvested in a fully regulated forest.
 The resultant volume harvested is defined by the timber on the area scheduled for cutting each year.
 The unmodified area control method is best suited if productivity and stocking are the same in all
areas of forest
 However, site and stocking rate in a forest are seldom equal and unmodified area control can cause
large fluctuation in annual volume harvested.
 A hypothetical 7000 ha Teak forest, with age distribution is as shown in table1, is used as an example.
 Assume that rotation of that forest is 70 years; one hundred hectares would be desired in each age
from 1 to 70 years.

Table 1: Age-distribution for hypothetical teak forest:

Age-class Ha Age class Ha
1-10 750 41-50 1250
11-20 250 51-60 0
21-30 250 61-70 1250
31-40 750 71+ 2500
7000

 The regulation objective is to rearrange these age classes to obtain a normal or near normal age
distribution by manipulating the cutting schedule. A comparison between the actual and desired
age class distribution can be made by noting that seven age classes are desired; therefore 1000 ha
(7000/7 age classes) are desired in each age class.
 Years to cut = sum of ha to be cut (41-50 to 71 + age classes)/ha to be cut every year =
(2500+1250+1250)/100 = 5000/100 = 50 years.
 Thus, it would take 50 years to cut all ha from those in oldest stand back down to those currently
in the 41-50 age class.
 Calculating the age distribution of uncut stands is uncomplicated. The current age distribution
can be thought of as occurring at time period zero (t = 0) and age distribution 50 years in the
future at t = 50 will be examined.
 Table shows the age distribution after 50 years of harvest.

Age distribution calculations at t = 50

Age class at t = 0 Age class at t = 50 Area in ha

1-10 51-60 750
11-20 61-70 250
21-30 71-80 250
31-40 81-90 750
41-50 1-10 1000
11-20 250
51-60 0 0
61-70 11-20 750
21-30 500

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 70+ 21-30 500
31-41 1000
41-50 1000

 After a full rotation, the forest is completely regulated, with an equal number of areas in each age
class. Following are some advantages and disadvantages of area control method.

Advantage:

1. It is easy and simple to apply

2. Leads to absolute regularity of age gradations

Disadvantages
1. It is very rigid; every change of rotation will necessitate re-division of the coupes
2. Prescribe felling without considerations of the crop condition

Limitations:

1. In unmanaged forests, it is not possible to lay out equi-productive coupes.

2. In mixed natural forests, regulations by area is only a crude method

2. Volume Control Method:

 Volume control is a method of determining the annual cut or harvest by specifying the volume of wood
to be cut each year.
 There are much formula, Von Mantel‟s formula, Austrian formula etc.
 Volume control calculations usually require knowing total growing stock volume and better suited for
uneven aged forest management. It does not specify the location where the given volume of wood to be
harvested.

1. Method Based on current growing stock and potential growth

2. Method based on growing stock only
3. Method based on growing stock and its increment.

1. Method Based on Current Growing Stock and Potential Growth:

 One elementary approach to volume control requires only an inventory of the existing forest and the
potential growth of the managed forest of the future.
 Growth is assumed to be proportional to its inventory in the same ration that growth is proportion to
inventory in the regulated forest.

Hundeshagen’s Formula:

 In general, forest stands are assumed to have normal or full stocking, which is seldom in practice, and
therefore yield tables estimates must be adjusted for under stocked forest.
 Hundeshagen‟s formula is simply a proportion in which the yield is assumed to have a straight line
relationship with growing stock.

𝑌𝑎 𝑌𝑟
=
𝐺𝑎 𝐺𝑟

Where,

𝑌𝑎 = 𝐴𝑐𝑡𝑢𝑎𝑙𝑦𝑖𝑒𝑙𝑑
𝐺𝑎 = 𝐴𝑐𝑡𝑢𝑎𝑙𝑔𝑟𝑜𝑤𝑖𝑛𝑔𝑠𝑡𝑜𝑐𝑘
𝑌𝑟 = 𝑌𝑖𝑒𝑙𝑑𝑖𝑛𝑓𝑢𝑙𝑙𝑦𝑠𝑡𝑜𝑐𝑘𝑒𝑑𝑓𝑜𝑟𝑒𝑠𝑡𝑎𝑡𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒
𝐺𝑟 = 𝐺𝑟𝑜𝑤𝑖𝑛𝑔𝑠𝑡𝑜𝑐𝑘𝑖𝑛𝑓𝑢𝑙𝑙𝑦𝑠𝑡𝑜𝑐𝑘𝑒𝑑𝑓𝑜𝑟𝑒𝑠𝑡𝑎𝑡𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒

2. Method Based on growing Stock only:

a. Von Mantle’s Formula:

Von Mantle‟s formula is sometimes called as triangle formula because of its derivation and which is an
extension of Hundeshagen‟s formula and eliminates the need of yield table. Basic assumption for this

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 formula is that, in a regulated forest, growing stock increases in a straight line with age. The existence of
rotation age as a variable implies that the formula be used only on even aged stands. Growing stock can
then be expressed as a right angle triangle. The formula is,

𝑅𝑌𝑟
𝐺𝑟 =
2

Where,

𝐺𝑟 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑔𝑟𝑜𝑤𝑖𝑛𝑔𝑠𝑡𝑜𝑐𝑘𝑎𝑡𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒𝑅 = 𝑅𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒𝑎𝑛𝑑𝑌𝑟 = 𝑌𝑖𝑒𝑙𝑑𝑎𝑡𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒.

3. Method based on growing Stock and Its Increment:

Current growing stock is rarely sufficient to establish an adequate volume control without considering
current increment; the two measures have often been combined for yield regulation.

b. Austrian Formula:

This formula combines increment with a means of adjusting the volume of the growing stock either
upward or downward. The formula in general terms is,

𝐺𝑎 − 𝐺𝑟
𝐴𝑛𝑛𝑢𝑎𝑙𝐶𝑢𝑡 = 1 +
𝑎

Where,
𝐼 = 𝑎𝑛𝑛𝑢𝑎𝑙𝑖𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡
𝐺𝑎 =Present growing stock
𝐺𝑟 = 𝑑𝑒𝑠𝑖𝑟𝑒𝑑𝑔𝑟𝑜𝑤𝑖𝑛𝑔𝑠𝑡𝑜𝑐𝑘
𝑎= = 𝑎𝑑𝑗𝑢𝑠𝑡𝑒𝑑𝑝𝑒𝑟𝑖𝑜𝑑𝑖𝑛𝑦𝑒𝑎𝑟𝑠, 𝑤𝑕𝑖𝑐𝑕𝑚𝑎𝑦𝑏𝑒𝑎𝑓𝑢𝑙𝑙𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛

c. Hanzlik Formula:

This formula was originally developed to meet a common problem in the even aged Douglas-fir stands of
the Pacific Northwest: initiating management in unregulated forests that had contain mostly old growth.
The formula is,

𝑉𝑚
𝐴𝑛𝑛𝑢𝑎𝑙𝑐𝑢𝑡 =
𝑅

Where,
𝑉𝑚 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑚𝑒𝑟𝑐𝑕𝑎𝑛𝑡𝑎𝑏𝑙𝑒𝑡𝑖𝑚𝑏𝑒𝑟𝑎𝑏𝑜𝑣𝑒𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑔𝑒
𝑅 = 𝑅𝑜𝑡𝑎𝑡𝑖𝑜𝑛𝑎𝑑𝑜𝑝𝑡𝑒𝑑𝑓𝑜𝑟𝑓𝑢𝑡𝑢𝑟𝑒𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑦𝑒𝑎𝑟𝑠
𝐼 = 𝐹𝑜𝑟𝑒𝑠𝑡𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡

Some Terminology:

Working Circle: A forest area (forming the whole/part of a working plan area) organized with a particular
objective and subject to one and some silvilculture system and same set of working plan preparations.

Felling Series: A forest area forming the whole/part of working circle to:

1. Distribute felling and regeneration and suit local conditions.

2. To maintain/create normal distribution of age classes. (when working circle is undivided, it is Felling
series)

Coupe: In clear felling systems, a felling series divided into a number of annual specified manners;
A planned separation of felling in successive years (4/5 years)
(To avoid felling for danger of fire, insect attack in successive coupes)
Even Aged Forest Regulation under Different Silvilcultural Systems:

1. Silvilcultural system is a method of silvilcultural procedure worked out in accordance with accepted
sets of silvilcultural principles by which crops constituting mature forests are harvested, regenerated,
tended and replaced by new crops of distinctive forms (Khanna, 2004)
2. Two silvilcultural systems (i.e. clear felling system and shelter wood system) in high forest system
produces even aged forest condition, so yield regulation under these two systems are dealt here.

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A Yield Regulation in Clear felling system:

1. Clear felling system is that silvilcultural system in which equal or equi-productive areas of mature
crop are successively clear felled and regenerated and the crop obtained is regular/even aged in which
age gradations are determined by area.
2. Yield regulation can be obtained by two methods under clear felling system.

1. Annual Coupe by gross Area:

 This is the oldest and simplest form of regulating yield from a forest and was first applied in France in
the 14th century. Initially it was applied to coppice crops worked on short rotation up to 20 years.
 Here in this system, the area of forest or the felling series (Say A ha) is divided into a number of
annual coupes equal to the number of years in the rotation (R). Area of one coupe to be felled in every
is A/R ha.
 This method of yield regulation will ensure equal sustained yield in the second and subsequent
rotation (if there are no unforeseen accidents), though it may not in the first. Annual coupes, so
formed, which are equal in ground are, are known equi-extensive coupes.

Applications:

1. It was first applied to coppice crop worked on short rotation, up to 20 years, subsequently, with the
indtroduction of coppice with standard system; this method was applied to coppice with reserves. This
method is now equally applicable to high forest worked on clear felling and artificial regenerations as
in Nilambur (Kerala) teak planation.
2. In India, this method is widely adopted in plantations particularly those coppiced for fuel wood.
3. This method regulates the final yield i.e. felling in areas to be finally felled at rotation age and
regenerated. It doesn‟t take into account intermediate yield from cleaning, and thinning in the younger
crops.
4. This method is widely used in areas where there is profuse regeneration.

2 Annual Coupes by Reduced Area:

1. Since the density and site quality may vary from coupe to coupe, reduction factors should be applied
for equalizing annual yield and areas allotted to each coupe, made equi-productive rather than equi-
extensive.
2. This method gives better result than above method and also a modification to implement in different
site qualities.

B. Yield Regulations in Regular Shelter wood system:

Regular shelter wood system is that system in which the mature crops are removed in series of operation and
the resulting is even aged in which age classes are recognized by area.

1. Yield Based on Area Allotments by Periods

 This is similar to regulation by fixed area but is less rigid.

 It differs in that the felling area is not permanently fixed on the ground, in the order of felling, but
instead compartments of sub-compartments are allotted to various periods or rotation.
 Rotation is divided into a number of convenient periods (depending on regeneration period, 10-30
years)
 Area allotted to various periods is known as period blocks (PBs). All PBs are of equal or equi-
productive areas.
 This method is also known as „Periodic Block Method”, Allotment to PBs may be permanent (Fixed
PBs), Revocable, Single or Floating.

a. Permanent Allotment Method:

The method consists of permanent allocation areas in all the PBs. This arrangement of PBs is possible in forest
where regeneration presents, no difficulty and accidents do not upset the time schedule.
𝐴
𝐴𝑟𝑒𝑎𝑜𝑓𝑃𝑒𝑟𝑖𝑜𝑑𝑖𝑐𝐵𝑙𝑜𝑐𝑘 = ×P
𝑅

Where,
𝐴 = 𝐴𝑟𝑒𝑎𝑜𝑓𝑓𝑒𝑙𝑙𝑖𝑛𝑔𝑠𝑒𝑟𝑖𝑒𝑠
𝑅 = 𝑅𝑜𝑡𝑎𝑡𝑖𝑜𝑛
𝑃 = 𝑅𝑒𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑃𝑒𝑟𝑖𝑜𝑑

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The area may be Gross area where crop and growth condition are uniform in regular forest or reduced area, for
quality. In this method, annual coupes, we have periodic coupes and annual yield is fixed by volume.

b. Revocable Allotment Method:

 In this method rotation is divided into periods (suitable reservation period) and the felling series into
corresponding PBs.
 The compartments are allotted according to their average ages, and f necessary, adjustments are made
to equalize the area of various PBs.
 Only the regeneration block (PB1) is of immediate importance and it is definitely allotted whereas the
other PBs may be realloted at each revision, if necessary according to the crop condition at that time.
 The chief feature of this method is that the allotted at each revision, if necessary according to the crop
condition at that time.
 The chief feature of this method is that the allotment of PBs, made in one period, may be changed in
the next.
 It is more realistic and flexible. For this reason, periodic blocks may not necessarily be self-contained.
They many sometimes be scattered.

C. Single allotment Method:

 In this method, the area is allotted to the current regeneration block only.
 In this case, the period, as also the area of single PB, is still fixed.
 The only gain in elasticity lies in the fact that the remaining PBs are not allotted.
 This method is only a step to the method of Floating PB, in which neither the area of the PB nor the
period is fixed in advance.

d. Floating Periodic Block (FBP) Method:

 This method consists of the allotment of areas ripe for regeneration and exploitation to one PB.
 There is no pre-determined limit as to the size of the PB as formed, nor to the length of the period.
 All wood which are over matured, mature or nearly so, and are ready for regeneration of in which
regeneration has already appeared, may be included in the FPB.
 In an even aged forest, which is normal or nearly normal, the extent of wood requiring inclusion in the
FPB will be of correct proportion corresponding to the regeneration time required.
 In abnormal forest, a very large proportion may require to be included in the FPB because of the
presence of large extent of over mature woods, and the presence of advance growth over a large part of
the forest. In such circumstances, the area of FPB is limited on grounds of practical convenience.
 The gradual evolution of FPB system from the fixed PB system ma y be summed up as follows:
1. Fixed, self-contained PBs with permanent boundaries.
2. Fixed, scattered, PBs with permanent boundaries.
3. PBs, scattered or self contained, with boundaries subjected to revision at intervals –Revocable
Allotment Method.
4. Single PB, scattered or self-contained, with fixed period.
5. Floating PB, passing gradually, over the whole forest.
 Each step aimed at greater freedom and elasticity in selection of areas for regeneration according to
silvilculture requirements, without sacrificing the basic principles of Forest management.
 The FPB method is also called as Quartier Bleu method. For calculating the annual yield, Duchaufour
devised a method particularly applicable to the Quartier Bleu Method of regeneration. He applied the
following formula;

Period of exploitation/Rotation = area of Cpts in FPB/Area of F.S.

Alternatively,
P/R = FPB/FS
P = R×FPB/FS

Advantage of the FPB method:

1. This method closely relates felling to the silvilcultural requirements of each crop. Only those crop
which are in need of regeneration or in which regenerations felling have those been started, are
put in FPB.
2. No artificial period, in the sense of the time limit for completion of regeneration, is laid down in
any area. The period found by calculation is for regulating the annual yield, and has no bearing on
the intensity or frequency of felling in any particular crops; these will depend entirely on the
progress of regeneration.

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 Disadvantage:

1. It works satisfactorily only in those forest which have a more or less normal distribution of age
class.
2. It is not suitable for irregular forest.

5.3 Regulating natural forest (uneven aged forest):

Uneven- aged forest:

 An un even aged stand is a stand where there are considerable difference in the age of the trees
present and where three or more age classes are represented (Society of American Foresters, 1958
cited in Leschner, 194)
 There are three kinds of uneven aged forests. The first is the “true” all –aged forest, where all ages and
all sizes of trees are found intermixed in the same stand. This is the classical concept of an uneven-
aged stand and is seldom found on the ground.
 The second kind of uneven-aged forest is one composed of small and irregular groups of more or less
even-aged trees. This is the most commonly found situation on the ground.
 The last kind of forest is a mosaic of readily distinguishable even-aged stands spread throughout the
forest. All ages and sizes are present but the individual stands are predominantly one age and one size
(Davis, 1966 cited in Leschner, 1984)

Cutting cycle and reverse growing stock:

 A cutting cycle is the planned interval between major felling operations in the same stand, and reserve
growing stock is the growing stock in the forest that is reserved (uncut) to produce the growth for
future cuts.
 The concept of cutting cycle and reserve growing stock is presented in the following figure;

Fig: The cutting cycle for a single stand:

 In fig, point „b‟ is the volume just before harvest, point „a‟ is the volume just after harvest, distance‟s‟ is
the amount of harvest, distance „d‟ is the amount of reserve growing stock and distance „e‟ is the
cutting cycle.

Regulating the Uneven-aged Forest:

Concept of regulation of uneven-aged forest means thoughts and ideas how to regulate or manage properly the
uneven-aged forests, and practice means implementation of such important thoughts and ideas to manage the
uneven-aged forest in a systematic and scientific way and on perpetual basis. Many attempts were made in the
past to manage such forests or to regulate the forest, some of which could be successful for long-term basis.

Decision needed while regulating uneven-aged forest (Davis and Johnson, 1986):

1. Cutting cycle: number of years between harvest entries on each acre.

2. Reserve growing stock level: residual volume or basal area per acre of the stand immediately after
harvest.
3. Stand structure: Number if trees per acre by species and diameter that make up the reserve growing
stock.
4. Sustainability procedures: constraints established on harvesting and regeneration to ensure
maintenance of the stand structure and thus perpetuation of the harvest over all future cutting cycles.
5. Other cultural treatment-release and fertilization.
6. Species for regeneration: Species and genetic stock selected for each stand type in the forest.
7. Site preparation and regeneration method: Combination if pre and post harvest treatments scheduled
to established the desired species and control their early growth.
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Strategies for uneven-aged forest regulation:

1. Given the existing forest and a conception of the fully regulated forest that we would like to achieve,
classical timber management scheduling addressed the questions of how many hectares and how
much volume to cut. Over the years of history forest, a great many methods of for determining the cut
were developed in various parts of world.
2. The yield can, broadly be prescribed in three ways: by area, by volume and both bay area and volume
combined. In case of yield by area, the entire area, irrespective of the growing stock, forms the basis of
calculation. In case of yield by volume, the volume of growing stock, the increment or both volume of
growing stock and its increment, may form the basis.
3. There are basically two models for regulating uneven-aged forest of which are follows:

1. Conceptual Model for regulating uneven-aged forest:

1. The conceptual regulation model is a forest divided into a series of stands that are regularly harvested
on the cutting cycle. The stands all provide and equal volume for harvest and thus may vary in size
depending on site productivity. There are as many stands as there are years in the cutting cycle, in the
simplest case, so that there may be several stands, each harvested in the same year, but the sum of
the volume harvested from all stands in each year is the same.
2. This model can be shown graphically as a series of overlapping cutting cycles. One cutting cycle for
each stand occurs each year and there is a continuous flow of wood (fig2)

Fig 2: Cutting cycle for regulated uneven-aged forest

3. Maps of uneven-aged forests might look like those in figure: 3 on a 5-years cutting cycle. Map „a‟
shows five single stands, each of which is cut once every y years. Stands 3, 4 and 5 are lower on the
slope, border of stream and are more productive. Therefore, they occupy a smaller area than stands 1
and 2, which are meat the ridge top and have lower productivity. Map „b‟ is a stylized view of multiple
stands. Each cell represents 1 stand and there are 25 stands on the forests. Each is the same size, if
we assume there is equal productivity and 5 are cut every year. The numbers in the cell indicate in
which of the 5 years the harvest occurs.

4. The hectares harvested annually are simple calculated if equal site productivity and constant reserve
growing stock are assumed.
5. Annual hectares harvested = total ha. In forest/years in cutting cycle.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 49
Limitations of Conceptual Model:

This conceptual model leaves four key questions about the regulated forest unanswered. These are:
1. How much reserve growing stock should be carried?
2. What should the diameter distribution on the stand be?
3. What should the species composition of the stand be?
4. What should be the cutting cycle length be?

A. Volume of reserve growing stock:

1. The amount of growth is highly, but not solely, dependent on the reserve growing stock volume. This is
demonstrated by the simple equations.
2. Growth = growing stock × growth percent
3. The growth percent is also a function of growing stock volume because, after a point, the denser the
stand, the slower the growth. Thus beyond a certain point, the larger growing stock, the smaller the
growth percent. In any event, there is no widely used simple formula to estimate the proper level for
uneven-aged stands.
B. Diameter Distribution:

1. A basic premise of uneven-aged management is that the stand contains trees of all, or many, age
classes and sizes.
2. The relationship would be a straight line from a purely optimal view. However, many younger trees
(those usually with the smaller diameters) do not survive as result of either mortality or cutting.
3. Thus, many smaller trees are needed in order to obtain larger ones in the future. These results in the
famous J-shaped curve associated with Meyer (1953).
4. The J-shaped curve is based on the work of a French forester named De Liocourt.
5. He believed that the desirable diameter distribution in the stand could be described by the
relationship:

𝑋𝑡𝑑 = 𝑞𝑋𝑡𝑑 − 1

Where,

X = the number of trees in diameter class„d‟ during time period„t‟ and q = a constant;
0<q<1

6. This relationship simply states that in any time period, the number of trees in a diameter class is some
constant proportion of the number of trees in the next smaller diameter class. It will result in the J-
shaped curve when plotted on the pair of axes.

a
Number of trees

DBH

Figure: 4 Diameter distributions in uneven-aged stand; a) desired and b) actual

In fact, Hann and Bare (1979) and others cited in their work suggested that the J-shaped distribution should
be questioned and that some other distribution might be better for a given set of management objectives.

C. Species Composition:

1. The basic question in species composition is balancing the species that will reproduces and grow well
on the site those that are desirable for reaching the management objectives.
2. The site limitations help define a set of species from which individual species can be chosen to fulfill
management objectives.

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 3. Species desirability can be affected by such things as marketability, the owner‟s aesthetic values, and
production of food and shelter for wildlife. However, once again, there is no simple formula or
procedure to determine the most desirable species composition.

D. Cutting cycle length:

1. There are also many factors affecting the cutting cycle length. The final choice is a balance of these
factors, as weighted by management objectives.
2. Some of the more important factors are species composition, financial needs and site.
3. The silvilcultural characteristics of the particular species planted affect the length of the cutting cycle
in several ways.
4. Fast growing species can have a shorter cycle and slow growing species a longer cycle.
5. The cutting cycle length affects the tree species and the diameter distribution.
6. In general, shorter cutting cycles allow better biological control because diseased or infested trees can
be cut more often.

2. An optimizing Model for regulating uneven-aged forest:

 Adams and Ek (1975) developed this model that answers the most of the preceding major questions in
a quantitative manner for individual stands in an uneven-aged forest.
 The model is based on individual tree stand growth and yield models.
 Individuals tree growth and yield models start with a known stand structure, often a map of trees in a
stand, and „grow‟ the trees from one diameter class to another until the individual trees are cut or
removed by mortality.
 Yield is estimated by „stopping‟ the model at the desired time period and adding up the volume in the
trees still present.
 Growth is the difference between yields in two time periods. This model is also used to solve the
transition problem between unregulated and regulated stands.
 The Admas-EK model uses and individual tree model, the solution of the program produces a starting
diameter distribution, stated as the number of trees in each diameter class, which maximizes
harvestable growth.
 Harvestable growth may be defined as either timber volume or timber value. Thus, the major question
of optional diameter distribution is answered.
 The constraints in stocking level can be iteratively solved for several different stocking levels.
 The amount of the harvestable growth can then be noted for each of these different stocking levels and
the highest level chosen.
 The maximum harvestable growth calculated a function of different stocking level, defines the stocking
level.
 The optimal stocking level is the one with the largest harvestable growth. Thus, the major question of
optimal stocking level is answered.
 The determination of an optimal cutting cycle length is slightly more complex but follows the sale basic
scheme.
 The growth model can „grow; the stand year by year until the desired growth period, which is equal to
the cutting cycles, is reached.
 However, the model can be stopped at any one of the intermediate years, for example years 1, 2, 3 and
4 for a 5-year growth period, and the growth yield estimated in that year. This is done for all the years
equal to and less than the number of years in the cutting cycle.
 The calculations are iterated for the different stocking levels. in each of the years. This results in a set
of growths for different length cutting cycles and, within each of these cutting cycle lengths, a growth
figure for each of the different stocking levels.
 The maximum growth between each cycle length is selected, thus defining both the optional stocking
levels and cycle length.
 This model is used to solve the transition problem between unregulated and regulated stands.

Hann and bare (1975) reviewed and suggest that five „problem areas‟ exist that keep such models from being
fully operational. These problem areas are:

1. Better computer and algorithm capacities

2. Interfacing stand simulators and nonlinear programs
3. Better uneven-aged growth and yield simulators.
4. Determining optional species mix. and
5. Scheduling cuts forest wide rather than in just a single stand.

Limitations:

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 1. The major question of species composition is still left unanswered.
2. Time consuming during data composition
3. The possibility of an infeasible solution may exist.

The following formulae are mainly used for regulating uneven aged forests

a. Yield based on growing stock only:

1. Von Mantel‟s Formula and its Modification:

𝑉𝑜 𝑉𝑟
𝑌= +
𝑅 1/2 × 𝑅
Where,
𝑌 = 𝑌𝑖𝑒𝑙𝑑
1
𝑉𝑜 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑔𝑟𝑜𝑤𝑖𝑛𝑔𝑠𝑡𝑜𝑐𝑘 > 7 × 𝑔𝑖𝑟𝑡𝑕
2𝑓𝑡
𝑉𝑟 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑟𝑒𝑚𝑎𝑖𝑛𝑑𝑒𝑟𝑜𝑓𝑡𝑕𝑒𝑒𝑛𝑢𝑚𝑒𝑟𝑎𝑡𝑒𝑑𝑠𝑡𝑜𝑐𝑘𝑎𝑛𝑑
𝑅 = 𝑅𝑜𝑡𝑎𝑡𝑖𝑜𝑛

2. French Method of 1883

𝑉𝑜 𝑉𝑜 𝑡1
𝑌= 𝑟 + + 1/𝑛(𝑉𝑚 × 𝑡2 )
2
3
Where,
𝑌 = 𝐴𝑛𝑛𝑢𝑎𝑙𝑦𝑖𝑒𝑙𝑑
𝑉𝑜 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑜𝑙𝑑𝑐𝑙𝑎𝑠𝑠
𝑉𝑚 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑚𝑒𝑑𝑖𝑢𝑚𝑐𝑙𝑎𝑠𝑠
𝑡1 = 𝐼𝑛𝑐𝑟𝑒𝑎𝑚𝑒𝑛𝑡𝑝𝑒𝑟𝑢𝑛𝑖𝑡𝑝𝑒𝑟𝑎𝑛𝑛𝑢𝑚𝑜𝑓𝑜𝑙𝑑𝑐𝑙𝑎𝑠𝑠.
𝑡2 = 𝐼𝑛𝑐𝑟𝑒𝑎𝑚𝑒𝑛𝑡𝑝𝑒𝑟𝑢𝑛𝑖𝑡𝑝𝑒𝑟𝑎𝑛𝑛𝑢𝑚𝑜𝑓𝑚𝑒𝑑𝑖𝑢𝑚𝑐𝑙𝑎𝑠𝑠
𝑛 = 𝑎𝑓𝑎𝑐𝑡𝑜𝑟𝑣𝑎𝑟𝑦𝑖𝑛𝑔𝑎𝑐𝑐𝑜𝑟𝑑𝑖𝑛𝑔𝑡𝑜𝑐𝑖𝑟𝑐𝑢𝑚𝑠𝑡𝑎𝑛𝑐𝑒𝑠𝑎𝑛𝑑
𝑟 = 𝑟𝑜𝑡𝑎𝑡𝑖𝑜𝑛

 The method is elastic, all removal count towards yield.

 It can be adopted in irregular shelter wood system

b. Yield based on increment only:

1. Increment method: It is based on the premise that the yield must be co-related with the increment
throughout the life of the crop.

𝑉 + 𝑎 − 𝑉𝑛
𝑦=
𝑛
Where,

𝑦 = 𝑎𝑛𝑛𝑢𝑎𝑙𝑦𝑖𝑒𝑙𝑑
𝑉 = 𝑝𝑟𝑒𝑠𝑒𝑛𝑡𝑣𝑜𝑙𝑢𝑚𝑒
𝑉𝑛 = 𝑉𝑜𝑙𝑢𝑚𝑒′𝑛′ 𝑦𝑒𝑎𝑟𝑠𝑎𝑔𝑜
𝑎 = 𝑣𝑜𝑙𝑢𝑚𝑒𝑟𝑒𝑚𝑜𝑣𝑒𝑑𝑑𝑢𝑟𝑖𝑛𝑔𝑡𝑕𝑒𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠′𝑛′ 𝑦𝑒𝑎𝑟𝑠

This method is applicable to irregular forests of small extent where the entire growing stock can be measured
frequently, say every fifth or tenth year, and crop condition examined correctly.

2. The Swiss Method: According to this method, only the annual increment is to be removed from the oldest
diameter classes as the yield:

𝑌+𝑍
𝐴𝑛𝑛𝑢𝑎𝑙𝑦𝑖𝑒𝑙𝑑 =
𝐶. 𝐶
𝑌+𝑍
𝑐. 𝑐 =
𝑋𝑖 + 𝑌𝑖 + 𝑍𝑖
Where,

𝑋 = 𝑣𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑡𝑕𝑒𝑑𝑖𝑎𝑚𝑒𝑡𝑒𝑟𝑐𝑙𝑎𝑠𝑠𝑒𝑠𝑏𝑒𝑙𝑜𝑤𝑡𝑕𝑒𝑓𝑖𝑥𝑒𝑑𝑑𝑖𝑎𝑚𝑡𝑒𝑟𝑙𝑖𝑚𝑖𝑡
𝑌 = 𝑉𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑡𝑕𝑒𝑑𝑖𝑎𝑚𝑡𝑒𝑟𝑐𝑙𝑎𝑠𝑠𝑒𝑠𝑎𝑏𝑜𝑣𝑒𝑡𝑕𝑒𝑑𝑖𝑎𝑚𝑒𝑡𝑒𝑟𝑙𝑖𝑚𝑖𝑡𝑎𝑛𝑑𝑢𝑝𝑡𝑜𝑡𝑕𝑒𝑙𝑖𝑚𝑖𝑡𝑤𝑕𝑖𝑐𝑕
𝑡𝑕𝑒𝐶𝐴𝐼𝑖𝑠𝑐𝑜𝑛𝑠𝑖𝑑𝑒𝑟𝑒𝑑𝑠𝑎𝑡𝑖𝑠𝑓𝑎𝑐𝑜𝑟𝑦

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𝑍 = 𝑣𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑡𝑕𝑒𝑑𝑖𝑎𝑚𝑒𝑡𝑒𝑟𝑐𝑙𝑎𝑠𝑠𝑒𝑠𝑎𝑏𝑜𝑣𝑒𝑡𝑕𝑒𝑠𝑎𝑡𝑖𝑠𝑓𝑎𝑐𝑡𝑜𝑟𝑦𝑑𝑖𝑎𝑚𝑡𝑒𝑟𝑙𝑖𝑚𝑖𝑡 𝑖. 𝑒. 𝑠𝑢𝑟𝑝𝑙𝑢𝑠𝐺. 𝑆.
𝑖 = 𝑡𝑕𝑒𝐶𝐴𝐼𝑜𝑓𝑣𝑎𝑟𝑖𝑜𝑢𝑠𝑑𝑖𝑎𝑚𝑡𝑒𝑟𝑐𝑙𝑎𝑠𝑠𝑒𝑠
𝑐. 𝑐. = 𝑡𝑕𝑒𝑝𝑒𝑟𝑖𝑜𝑑𝑑𝑢𝑟𝑖𝑛𝑕𝑤𝑕𝑖𝑐𝑕𝑡𝑒𝑕𝑣𝑜𝑙𝑢𝑚𝑒𝑜𝑓𝑡𝑕𝑒𝑜𝑙𝑑𝑒𝑠𝑡𝑐𝑙𝑎𝑠𝑠𝑒𝑠𝑠𝑕𝑜𝑢𝑙𝑑𝑏𝑒𝑟𝑒𝑚𝑜𝑣𝑒𝑑, 𝑜𝑟𝑐𝑢𝑡𝑡𝑖𝑛𝑔𝑐𝑦𝑐𝑙𝑒.

For the application of this method, essential requirements are:

1. Stand and volume table

2. Measurements of the growing stock and increment at short intervals of 5 to 10 years, in the same
manner.
3. Exact determination of the c.a.i.
4. The composition of the diameter classes should be as near normal as possible.
5. Any increase or decrease in the growing stock at each revision must be offset by increasing or
decreasing the yield for the next period.

This method is applicable to selection forests of comparatively small extent where frequent measurements are
possible.
3. Biolley’s Check Method:

Ya 
V2  N   V1  P 
n
Where,
Ya = annual yield; V2 = present G.S. volume; V1 = G.S. volume „n‟ years ago; N = volume of trees cut; and P =
volume of recruitment in „n‟ years.

c) Yield based on Growing Stock and Increment:

1. Hufnagl’s Diameter Class Method:

 n4   n  n4   n  n3   n  n2 
Ya    V4    3  V3    2  V2    1  V1 
 a 4  a3   a 4  a3   a3  a 2   a 2  a1 
Where,

Ya= annual yield

n1, n2, n3 and n4 are the number of trees in the lowest to the highest dia. classes (in ascending order);
a1, a2, a3 and a4 are the mean ages of trees in each dia. class;
and V1, V2, V3 and V4 are the volumes of average trees in each dia. Class (these may be found from volume
tables or otherwise).

5.4 Allowable cut methods:

 The allowable cut is the amount of timber considered available for cutting during a specified time
period, usually one year.
 It is the amount of timber the forest manager would like to have cut and thus is a target or guideline
that the manager attempts to reach.
 However, there are many external reasons why the allowable cut is not reached in a particular year.
1. Fluctuations in forest products market.
2. Cyclical weather conditions can affect annual cuts for several consecutive years. Extremely
wet cycles and dry cycles can affect the timber harvest.
3. Wood labor availability
 Allowable cut are generally developed for large geographical area and for long time periods.
 Allowable cut is a larger area concept when calculated for working circles.

5.4.1 Area Control:

1. Area control requires cutting equal areas or equiproductive areas annually or periodically
2. For example, a 6000 ha forest on a 60-year rotation would have 100ha annual cut
3. Annual allowable cut = 6000/60 = 100ha/yr.
4. Volume of annual allowable cut is estimated by looking up yield in the appropriate table and
multiplying by the number of hectares.
5. suppose, yield at 60-years is 45 cum/ha
6. Thus, annual allowable volume = 100ha*45 = 4500cum.
7. Thus, annual allowable cut (at 5-year) = 100ha*5 years
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 8. Allowable volume cut = 4500*5 years = 22,500cum.
9. Allowable cut estimation becomes more complex if the ha in the forest have a different productivity
levels. This requires cutting of equal productivity rather than equal area.
10. Suppose, forest was a pure, natural unthinned stand of Shisam on a 30-years rotation. Site indices
(SI) were unequal and distributed as shown below

SI Ha (Ai) Cu.m./Ha(Yi) Total yield (YiAi) Eq. ha

5 100 19.9 1990 1.389
4 250 23.4 5850 1.182
3 375 32.3 10275 1.009
2 225 39.5 7267 0.856
1 75 2963 0.700
1025 28345

Unmodified area control requires cutting 34.17 ha (1025/30 = total area/rotation) each year.
 however, this would result in unequal volumes each year
 For example, cutting in S15 results in about 680cu.m. annual ct (34.17*19.9)
Whereas cutting in S11 results in about 1350cu.m. Annual cut (34.17*39.5)
 The allowable cut can be modified for equal productivity by using mean yield and calculating
equivalent ha
 mean yield per/ha

(𝑌𝑖 × 𝐴𝑖)
𝑌=
𝐴𝑖
Where,

𝑌𝑖 = 𝑦𝑖𝑒𝑙𝑑𝑝𝑒𝑟𝑕𝑎𝑖𝑛𝑖𝑡𝑕𝑠𝑖𝑡𝑒𝑐𝑙𝑎𝑠
𝐴𝑖 = 𝑛𝑜. 𝑜𝑓𝑕𝑎𝑖𝑛𝑖𝑡𝑕𝑠𝑖𝑡𝑒𝑐𝑙𝑎𝑠

28345
𝑌= = 27.65
1025
27.65 𝑌
𝐸𝐴𝑖 𝑆15 = = = 1.389 𝑕𝑎
19.90 𝑌𝑖
27.65 𝑌
𝐸𝐴𝑖 𝑆11 = = = 0.70 𝑕𝑎
39.50 𝑌𝑖
𝐴𝑛𝑛𝑢𝑎𝑙 𝑐𝑢𝑡 𝑓𝑜𝑟 𝑆15 = 34.17 ∗ 1.389 = 47.46𝑕𝑎
𝐴𝑛𝑛𝑢𝑎𝑙 𝑐𝑢𝑡 𝑓𝑜𝑟 𝑆11 = 34.17 ∗ 0.70 = 23.93𝑕𝑎

In terms of volume cut, results will be the same

 𝑆15 = 47.46𝑕𝑎 ∗ 19.90 = 944.45𝑐𝑢. 𝑚.
 𝑆11 = 23.93 ∗ 39.50 = 945.24𝑐𝑢. 𝑚.
 𝑀𝑒𝑎𝑛 = 34.17 ∗ 27.65 = 944.80𝑐𝑢. 𝑚.

Advantage:
1. It is simple (uncomplicated)
2. The area on the ground to be harvested is readily identified, “Harvest the oldest stand first”.
3. It can readily produce a regulated forest.
4. It seems particularly well suited to even aged management, which is the most prevalent form of forest
management
5. It is widely applicable
Disadvantage:

1. Unmodified area control can cause large fluctuations in the volume harvested.
2. Area control must be combined with some type of volume control when applied to uneven aged stands
5.4.2 Volume control:

 Volume control require cutting equal volumes annually or periodically

 The allowable cut is determined by one of several formula and this volume is then cut each year,

Volume control by following formulas:

1. Hundeshagen‟s formula

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 2. Von Mantel‟s formula
3. Meyer‟ Amortization formula
4. Austrian Formula
5. Hanzlik formula
1. Hundeshagen’s formula
 Hundeshagen‟s formula is used to estimate allowable cut in the same manner in which it was used to
estimate yield.
 The ration Yr/Gr is formed from a yield table or yield function that is applicable to the forest in
question.
 The value for Yr is read directly from the yield table and the value for Gr may be estimated by
summation formula.
 The procedure for determining annual allowable cut is to estimate the total growing stock on the forest
or stand in question and then to simply multiply that estimate by the ratio.

Yr
Ya  Ga
Gr
Where,

Ya = actual yield, or in this case, allowable cut

Ga= actual growing stock
Yr = yield in a fully stocked forest
Gr = growing stock in a fully stocked forest

2. Von Mantel’s formula

2(Ga )
Ya 
Where, R
Ya= actual yield or in this case, allowable cut
Ga = actual growing stock
R= rotation age
(Both these formulas do not consider growth)

3. Meyer’ Amortization formula

(1  im ) n  1
Vn  V0 (1  i ) n  a
im
Where,
Vn= growing stock volume at future time n
V0= growing stock volume today (time zero)
It= compound growth percent on entire stand, including ingrowth
Im= compound growth percent on the cut portion of the stand
a= annual cut
n= number of years in the estimate period

1. Basically it says future volume (Vn) is equal to current volume (V0) less the cut
2. Allowable annual cut can be estimated by solving the above equation.
(im )
a  (V0 (1  i ) n  Vn ) 
(1.0  Im) n  1
4. Austrian Formula

(Simplified version of Meyer‟s formula)

Ga  Gr
Annual .Cut  I 
a
Where,
Ga = present growing stock
I= annual increment
Gr = Desired growing stock
a= adjustment period (cutting cycle)

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5. Hanzlik formula

Developed for old growth in the Douglas fir region

Vm
Annual .Cut  I
R
Where,
Vm= Volume of over mature timber
R= rotation age
I= annual growth averaged over rotation

5.4.3 Combined area and volume control

 A combination of area and volume control, with perhaps a bit more emphasis on area control is often
found in practice.
 Here the combined procedure in the light of even aged management is discussed, although it is equally
applicable to uneven aged management.
 The first step is obtaining inventory data. A series of cover type maps are used often developed from an
overlay on aerial photos.
 Information recorded about each stand varies by organizational needs but certainly would include
species or species association, age class and level of stocking. Estimates of volume or yield might also
be included.
 Estimated site quality and silvicultural condition and treatment needs are also included.
 In the second step, individual stands are arrayed in descending order with those to be cut first at the
top.
 The rotation age is estimated to define the age classes for data collection.
 First in the array may be over mature stands, and those with an over mature over story needing
release, this is followed by under stocked mature stands, fully stocked mature stands. Finally, the
immature stands may be simply aggregated because they will be cut for many years.
 The array is rearranged in an age class distribution, stand by stand as in even aged regulation.
 Variables to identify the stand such as its size in hectares, volume, and probable yield are kept readily
accessible when making the array.
 In the third step, some preliminary cut estimates are made. Unmodified area control might be used as
the first approximation because it will always lead to a fully regulated forest. The first array in step 2
might be used to determine sequence of cut. A proportionate hectare is made. Concurrently some type
of volume control estimate using the formula is made.
 This might be modified by other socio-economic factors as well.
 As a fourth step, an iterative adjustment process is followed.
Eg. Forest contains- 120000 hectares
60 year rotation
Under unmodified are control annual cut= 120000/60 ha
= 2000 ha
It may also have been determined that the annual cut is 5m3/ha or 10000 m3, as the result of volume
control calculations or in light of the procurement departments assessment of open market wood
availability.

 Fifth, the cut from the first 2000 ha of stands arrayed in step 2 is added to see how close it comes to
5m3/ha (10000m3). It would probably be less than the desired volume because of the over story and
understockd stands. Therefore, some of the mature, well stocked stand might be harvested to increase
the cut. The procurement department might also be asked to reassess their estimates or if they could
open a new procurement area to help alleviate the undercut.
 PNWs may also be calculated for each of the alternatives.
 An acceptable solution may be found on the first iteration. Conversely, several additional iterations
may be required to find an acceptable compromise between the biological and financial requirements.
 The end result will be a cutting budget, which is a plan, specifying which stands will be cut, when they
will be cut, and how they will be cut.
 The cutting budget ties down the planned action to specific hectares on the ground; which of many
stands to be cut and when.
 The cutting budget is a guideline and is followed flexibly.
 The cutting budget will also explicitly or implicitly indicate how the stand is to be cut. Eg. Clear cut or
selection cut.
 The time period covered by the cutting budget is arbitrary, but is usually in 3 to 5 years increments.
 Changing technology and merchantability standards will change the yields from the stands.

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 Unit-6
Forest Policy
6.1 Policy formulation process
6.2 Local
6.3 National

National Forest Polices:

1. The development of national forest polices generally centers on needs and requirements for the
implementation of sustainable management
2. Nepal has recognized the need for sustainable forest management, and for forests to contribute to
national development and the benefit of local communities.
3. Topical concerns in forest policy development include deforestation and forest degradation, illegal
lobbing, plantation development, devolution and decentralization of forest management, and
conservation
4. Nepal has incorporated its forest policy with national five year plan. The major forestry priorities
include managing and utilizing forest resources in a sustainable manner to ensure a balance between
the environment and socio-economic development. In keeping with an overall goal of poverty
reduction, the plan encompasses the expanses of community and especially, lease hold forestry to
generate employment for the poor and disadvantaged, increasing private sector involvement in forest
management, and the adoption of improved land use practices.
5. The policy specifies that forest and other wooded land cover should be maintained at 40% of national
land area.
6. Nepal has released a revised forestry sector policy in 2000, which emphasizes management of forest of
the Terai, Inner terai and Siwalik region of the country. The policy provides more specific guidelines on
the general tenor of the five year plan, with short, medium and long term objectives.

National Forestry Plan-1976:

1. The national Forestry Plan-1976 was the official document that recognized past mistakes and
emphasized the need to correct them. It admitted that the protection, maintenance and development of
forests scattered all over the country was neither possible nor even practicable through government
efforts alone. The report, thus, called for involving the citizens of Nepal in all aspects of forest
protection, production and proper utilization, and also for recognizing the forest as inalienable
property of society.
2. The plan for the first time, categorized forests according to ownership and level of possible
participation, into five types- government forest, panchyat forest, private forest, leasehold forest and
religious forest. it also empahaized for the scientific management of forest for the best benefit of its
people and the government recognizing the involvement of people in forest management.

Master Plan for Forestry Sector, 1989:

The Master Plan for the Forestry Sector (MPFS, 1989), prepared between 1986 and 1988 and approved
in 1989 provides a 21-year policy and planning framework for the forestry sector. The long term
objectives of the Master Plan for forestry sector include the following:

 To meet the people‟s basic needs for forest products on a sustained basic.
 To conserve ecosystems and genetics resources
 To protect land against degradation and other effects of ecological imbalance
 To contribute to local and national economic growth

The Master Plan for the Forestry Sector guide‟s forestry development within the comprehensive
framework of six primary and six supportive programs to achieve its objectives

Primary Forestry Development Programs of MPFS:

1. Community and private forestry

2. National and leasehold forestry
3. Wood-based industries
4. Medicinal and aromatic plans
5. Soil conservation and watershed management
6. Conservation of ecosystem and genetic resource.

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Supportive Forestry Development Programs of MPFS:

1. Policy and legal reforms

2. Institutional reforms
3. Human resource development
4. Research and extension
5. Forest resources information system and management planning
6. Monitoring and evaluation

The main feature of the Master Plan is an integrated and program-oriented approach. The idea to employ a
program approach to support these six primary program and six supportive programs was a turning point
in Nepal‟s history of forestry sector policy.

Forestry Sector Legislation:

1. Forestry legislation used to be formulated to resolve past problems related to protection rather than to
meet present and future needs for better management and increased production.
2. As a result, legislation, which included several major acts and their associated rules, was not in
accordance with the spirit of the new forestry sector policy, which was arrived at through the master
planning process.
3. This discrepancy was participatory noticeable in the case f community forestry. Policy is now very
oriented towards „people‟s participation in contrast to previous legislation such as the Forest Act of
1961, which originally aimed to prevent (the villagers) from entering forests.

Other early forestry laws are identified below:

1. The Forest Protection Special Act of 1968 and the Forest Products (Sale and Distribution) Rules of
1971 strictly regulated people‟s rights to forest products.
2. The Panchyat Forest Rules and the Panchayat Protected Rules of 1978 allowed communities to
manage barren or degraded lands for forest production. These rules needed improvement before they
could effectively promote community forestry in the spirit decentralization.
3. The Leasehold Forest Rules of 1978 allowed only barren or much degraded areas to be leased. In
practice, this policy encouraged the cutting of trees so that a lease for the area could be applied for.
4. The private Forest Rules of 1984 entitled owners of private forests to a free supply of planting
materials and to technical assistance from the District Forest Offices provided their forest was duly
registered.
5. The national Parks and Wildlife Conservation Act of 1973 defines a national parks and provides for
three other kinds of reserves: strict natural reserves for scientific studies only, wildlife reserves (in
effect similar to national parks), and hunting reserves. Government of Nepal may, “if it so deems
necessary.” declare any area to be a part of a park or reserve, and may take over the ownership of any
area so declared. This act and the rules made under it aim to protect wildlife and control hunting, but
they have not been successfully enforced. Thus, in 1994 and additional provision for the
establishment of conservation areas and buffer zones was made.
6. The National Parks and Wildlife Act was amended so that the revenues of a national park would be
shared with the local communities located within the buffer zone surrounding that park.
7. The Soil and Watershed Conservation Act of 1982 allows HMGN to declare any area as a protected
watershed.
8. The land (Survey and Measurement) Act of 1963 indirectly hinders forestry development because
forestland is defined as government land. In fact, its provisions encourage people to cut down trees so
that the piece of land on which they stand can be unambiguously claimed as private.
9. The Pastureland Nationalization Act of 1974, which is applied selectively, vests the ownership of all
pasture lands in HMGN. Local village and district communities are required to “protect and improve”
pasture lands and “must not use the land for any other purpose”.
10. Among the public utilities laws that affect forestry include the Public Roads Act of 1974, which deals
with the acquisition of land for the protection of roads; the Irrigation; Electricity and Water Resources
Act of 1967; the Electricity Rules of 1969; and the Canal Management Rules of 1974.

The preceding policies are now being implemented under the Forest Act of 1993 and the Forest Rules
of 1995. The act and its regulation are a result of past experiences which demonstration that people‟s
participation is necessary for the management of forests. The act and rules, however, does require
periodic revision as the implementation of forestry resource management proceeds. The Forest Act of
1993 and the Forest Rules of 1995 aim to develop the forestry sector through decentralization and the
participation of individuals and groups.

Forest Management (B. Sc. 3rd year 2nd half) Compiled by: Shambhu Kumar Mishra Page 58
Forestry Sector Policy, 2000

The Forestry Sector Policy, 2000 is an updated version of the Forestry Master Plan Policy and subsequent
amendments to that document. It should inspire the revision of the documents of the Master Plan for the
Forestry Sector as well. The policy of 2000 contains development imperatives, outlines, strategies, and
programmes, and summarizes the investment required to develop the forestry sector. The policy will be
instrumental in helping the government to prepare plans and programs, to formulate legislation and to develop
a mechanism that the forester‟s co-operation with donor agencies. Ins um, issuance of this policy will ensure
that the forestry sector palsy‟s a vital role in the overall progress and well-being of Nepal and her people.

Objectives of forestry sector policy, 2000

Long-term objectives:

1. To meet the people‟s basic needs for fuel wood, timber, fodder, and other forestry products on a
sustained basic
2. To contribute to food production through effective interaction between forestry and farming practices.
3. To protect land from degradation by soil erosion, floods, landslides, desertification, and other
ecological disturbances.
4. To both conserve and use in a sustainable way biological diversity and genetic resources for the
maintenance of prevailing ecosystems.
5. To contribute to the growth of local and national economics and thereby to improve the quality of life
of the people by managing land and forest resources, developing forest-based industries, and by
creating opportunities for income generation and employment.

Medium-term objectives:

1. To promote people‟s participation in land and forestry resources development, management, and
conservation
2. To improve the legal framework needed to enhance the contribution of individuals, communities, and
other organizations to land and forestry resources development, management, and conservation.
3. To improve and strengthen the organizational framework and the institutions of the forestry sector so
that they can better perform their missions.

Short-term objectives:

1. To provide increases opportunities to the people for forestry resource management under the
community, private and leasehold forestry programs as well as the biodiversity conservation program
provided for in the new forestry legislation.
2. To manage the natural forests of the terai and Inner Terai more effectively in order to contribute
towards the socio-economic development of the country.
3. To contribute to strengthen institutions and legislation, including the development of clear operational
guidelines for those entrusted with administering forestry sector legislation in line with the program
approach in the forestry sector.

Table 1: Policies and legislation

Year Policy/Legislation Effect of Policy/Legislation

1925 Establishment of Ban Jaanch Adda First formal policy and administration
1946- 1. Allocation of national forest to 1. Conversion of forest land to agriculture land
1950 the Rana family members as
„Birta land‟
2. Clearance of the Terai forest 2. Revenue generation
along the border with India for
the purpose of settlement; and 3.1 Protection of forest land
3. Indigenous management 3.2 Fulfillment of basic needs for fuel wood, fodder and
system (group efforts) and construction wood
traditional froest management
(Talukdar) practices in the
hills
1957 Private Forest Nationalization Act Indiscriminate cutting of forests
conversion of Private forest into farm land in Terai

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1961 Forest Act forest categorization
forestry officials empowered
1967 Forest Protection Act, special provision judicial power to forestry officials,
law enforcement power reinforced
1973 National park and wildlife declare any area to be a part of PAs
conservation act protect wildlife and control hunting
1974 National Parks and Wildlife Categorization of Protected areas
Conservation Act Management of Protected Area
1976 National Forestry Policy recognition of people‟s participation in forest management
concept of village Panchayat forest
1977 Amendment in Forest Act provision of Panchayat Forest and Panchayat Protected
Forest
1978 PF and PPF Rules handing over of National Forest to village Panchayat (elected
village body)
1982 Decentralization Act Authority to District and Village Panchyat
Promotion of User‟s Committee concept
1982 Soil and watershed conservation act declare any area as a protected watershed

1984 Private Forestry Rules Promotion of private forestry

1987 Revision of PF and PPF Rules provision of User‟s committees for forest management
1989 Master Plan for the Forestry Sector incorporated the concept of CFUG
priority given to community forestry
1993 Forest Act Users as managers of forests
CFUG empowered for forest management
1993 Nepal Environment and policy action Polices related to environmental sectors developed
Plan
1995 Forest Rules process of community forestry detailed
Forestry staff‟s role changed from custodial to facilitation
1999 Revision of Forest Act, 1993 control mechanism brought for violation of operational plan
provision for spending 25% in forestry activities
2000 Forest Policy 2000 degraded and scattered forest areas in Terai & Inner Terai
can be managed as community forests, CFM in Terai region
CFUGs in Terai to give 40 % of their income from the sale of
surplus timber to the government for program
implementation (Until July 2003, CFUGs pay 40 % of their
income to the government, which was reduced to 15 % from
only two species through the financial bill enacted in July
2004).
2002 Revised Forest Policy Management of degraded and open forest areas in the Terai
and Inner-Terai regions
2002 Leasehold Forestry Policy Provision of basis for the handing over of national forests to
the private sector in the form of leasehold forests.
2002 Nepal Biodiversity Strategy Strategies developed to conserve Nepal‟s Biodiversity
2003 National Wetland Policy Categorization of wetlands for better management
2004 Herbs and NTFP Development Policy Provisions for conservation, management and utilization of
NTFPs

The preceding policies are now being implemented under the Forest Act of 1993 and the Forest Rules of 1995.
The act and its regulation are a result of past experiences which demonstrated that people's participation is
necessary for the management of forests. The act and rules, however, does require periodic revision as the
implementation of forestry resource management proceeds. The Forest Act of 1993 and the Forest Rules of
1995 aim to develop the forestry sector through decentralization and the participation of individuals and
groups.

6.1 Policy formulation process

6.1.1 Local:

1. District forest office identifies the need for formulation of local level policy.

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 2. Under the respective District assemble, Natural resource management Committee exists where DFO is
the Member Secretary. As per the request of DistrictForet Office or identifying the need by itself, a
policy drafting committee is formed by Natural Resource Management Committee.
3. The drafting committee organizes stakeholder‟s consultation meetings/workshop inviting concerned
organization, line agencies and experts
4. The drafting committee prepares the draft policy
5. The draft is submitted to Natural Resource management Committee; the committee reviews the draft
and presents it is the District assembly.
6. The District Assemble may approve the policy as it is or ask for revision or may review itself.
7. The approved policy is implemented by district forest office/district development committee office.
8. The local policy should not contradict with the national policy.

6.1.2 National:

1. Constitutional regulations providing TOR to MFSC

2. The formation of a technical committee by the departments or ministry to draft a forest policy.
3. Inter-agency workshops to review the draft policy prepared by the technical committee.
4. Depending on the magnitude of policy, a multi-stakeholder national workshop to review the draft
policy.
5. Preparation of the final draft by the technical committee. The policy so prepared should not contradict
with the international policy/conventions signed by Nepal Government.
6. Submission of the final draft to the Ministry of Forest and soil Conservation/Department of Forest.
7. Soliciting the views of other ministries or agencies on inter-sectoral linkages.
8. A final document to be submitted to the cabinet for approval. The cabinet may ask for revision or
approve as it is.
9. Promulgation of the policy by the cabinet.
(Act – Parliament
Regulation, strategy, policy, guideline – cabinet
Guideline, working procedure – Ministry)

Existing Policy Framework:

1. NFP (1976) and MFPS (1988-2010) provided conservation orientation and a human face to forestry.
2. Legitimized by the “ Forest Act, 1993” and “Forest Rules 1995”
3. Revised National Forest Policy, 2000.

Challenges:

1. Both successes and gaps

2. Successes in CF and PAS
3. Ever increased threats of deforestation and degradation
 Encroachment and conversion
 Illegal extraction and smuggling
 Poaching
 Forest fire
 Uncontrolled grazing
4. Commitment to maintain 40% forest
5. Challenges and issues on:
 Inclusive policy making
 Technical capacities
 Gender and social inclusion Choices of forest governances modalities
 Numerous local, national and international initiatives.

Opportunities:

1. Various forest management modalities (community based)

2. Varied stakeholders
3. Multi-Stakeholder process from community to policy levels.
4. PAS Integrated watershed management models
5. Landscape approach to forest and biodiversity conservation
6. Valuable forest resources
7. Community organizations Green enterprises: employment and income
8. Payment of environmental services
9. REDD

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Need of Policy Revision

1. Facing challenges and opportunities within and outside the sector

2. Witnessing substantial political, economic and social transformations
3. Worldwide trend on decentralization
4. Political system been replaced twice
5. A number of new polices and priorities embodied in the periodic plans
6. Significant changes in social composition, population pattern, infrastructure development, attitudes,
aspirations and needs.

Current and emerging issues, trends and critical problems:

1. Forest and Biodiversity loss

2. Invasive and exotic species
3. Redefinition of rights, roles and responsibilities
4. Competing forest uses
5. Law enforcement
6. Policy formulation
7. Trees outside forests
8. lack of awareness and national commitment
9. Institutional status quo
10. Public-private partnership
11. Environmental emergencies.

Trend in Forest Polices and Legislation in Nepal:

The evolutionary trend of forest policy and legislation in Nepal is dealt in separate heading of policy and
legislation. The trends in forest police and legislation in Nepal are as follows:

A. Forest Policy;

The major forest-related polices of Nepal are as follows:

NEPAP proposed following polices for forest and rangeland
1. National Forestry Plan, 1976
management:
2. Periodic Plans
1. Improve forest management by implementing the findings of the
MPFS,
a. First five-year plan 2. Encourage community participation in forest management,
b. The fifth - five year plan (1975-1980) 3. Improve rangeland management,
c. The sixth – five year Plan (1980-1985) 4. Encourage greater private sector involvement in managing
national forests,
d. The seventh – five year Plan (1985-1990) 5. Raise awareness of the importance of forest conservation,
e. The eight –five year Plan (1992-1996) 6. Minimize adverse environment impacts of forest related projects
f. The ninth-five year Plan (1197-2002) and
g. The Tenth-five year Plan (2002-2007) 7. Promote research and development of alternative energy sources to
h. Three year interim plan (2007-2009) reduce dependence on biomass sources.

3. Master Plan for forestry Sector, 1989

4. National Conservation Strategy (NCS), 1988
5. Nepal Environmental Policy and Action Plan (NEPAP), 1993
6. Agriculture Perspective Plan (APP), 1995
7. Revised Forestry Sector Policy, 2000

B. Legislation:

1. The Interim Constitution of Nepal, 2007

2. Private Forests Nationalization Act, 1957 (2013)
3. Forest Act, 1961
4. The Forest Protection Special Act, 1967
5. Forest Products Sales and Distribution Rules, 1971
6. Panchayat Forest and Panchayat Protected Forest Rules, 1978
7. Forest Act, 1993
8. Forest Regulation, 1995
9. Local Self Governance Act (LSGA), 1998

C. Recent Policy Changes:

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According to the local and nation needs, changing situation of the country and international communities,
Government of Nepal has formulated policies to suit the needs of people. Some of the remarkable policies
formulated by the government after year 2000 are as follows:
1. Revised Forest Policy, 2000
2. Leasehold Forestry Policy, 2002
3. Nepal Biodiversity Strategy, 2002
4. National Wetland Policy, 2003
5. Herbs and NTPDevelopment Policy, 2004
6. Terai Arc Landscpe Strategy 2004-2014
7. Sacred Himalayan Landscape Strategy, 2006-2016
8. Gender and Social Inclusion Strategy in the Forestry Sector, 2004-2019

D. Institutional Arrangement:

The following institutions are involved in macro-policy making and programming in forestry sector of Nepal:

1. Parliamentary Committee on Natural Resource: oversees the actions of the government in initiating
measures for the conservation of the natural resources in the country,
2. Environmental Protection Council chaired by the Prime Minister provides guidance regarding
formulation as well as implementation of environmental policies.
3. National Development Council chaired by the Prime Minister gives directives to the NPC on various
development issues.
4. National Planning Commission prepares periodic development plan for the country and guides and
sectoral policy through its Agriculture and Forestry Division; and
5. Ministry of Forests and Soil Conservation is responsible for formulating and implantation policies,
plans and programmes related to forest resources.

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 Unit-7
Forest Resource management Plan

7.1 Forest resources management plan

7.1.1 Concept, definitions, objectives and limitations of forest management plan
7.1.2 Components of forest management plan
7.1.3 Forest management unit
7.2 Preparation of forest management plan
7.2.1 Data collection
Biophysical
Socio-economical
7.2.2 Maps and sketches
7.2.3 General format
7.2.4 Contents
7.2.5 Write up of management plan
7.2.6 Methods updating

7.1 Forest resource management plan:

7.1.1 Concept, definitions, objectives and limitations for forest management plan

Definition:

1. A working/management plan is a written scheme of management aiming at continuity of policy and

action and controlling the treatment of a forest. It is an instrument of forest management.
2. A working plan document is a means of enforcing systematic, obligatory and mandatory regulations
for continuous management of a given forest property. It is not confined to silvicultural and
management aspects of the forest only, but it also covers other activities such as general
administration, grazing and watershed management, permanent improvement, preservation of
environment, forest production, soil and water conservation, wildlife and recreation etc. It is complete
plan for the next working plan period
3. A management plan is usually a written statement of how the landowner hopes to manipulate the
forest to obtain objectives (Leuschner 1984)

Objectives:

The objectives of any forest management plan differ widely according to the nature of the forests and the local
conditions. However some of the common objectives may include:

1. Creation of an ideal condition of the forest which meets the aims of the owner (in case of private forest)
or maximum benefit to the greatest number of people for all times (public forest)
2. Allow marshalling of the capital, men and materials needed to implement the plans at the right place
and time.
3. Provide continuity for the management
4. Critical continuity for the problems
5. Standard for the comparison.

Goals:

The goals of forest management plan can be identified as ecological or socio economic in nature (USDA, 2004).
However they may differ according to the place and time.

Ecological goals:

1. Mitigate the impacts of forestry practices on biological diversity, wildlife, water quality and quantity,
forest soil and hydrological cycles.
2. Maintain and acceptable range of native commercial tree species and their genetic diversity on the
forest area.
3. Reduce the risk of significant loss of productive forest from insect and disease.
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 4. Maintain and enhance site productivity
5. Protect sensitive sites.
6. Manage the forest on sound scientific principles.
7. Maintain or increase the forest productive land base.

Socio-economic goals:

1. Reduce significant loss of forest product from fire, disease/insect and illegal harvesting.
2. Actively participate in forest policy decision making
3. Contribute to the economic stability of local community and the country.

Guiding principles of forest management plan:

1. The plan should be based on sustainable forests management.

2. Open and consultative process in detail planning.
3. Should be based on sound scientific forest management principles
4. Adaptive and multiple uses.
5. Landscape level management.

Limitations of Management Plan:

1. Caused by change: Changes in internal, external and physical factors make plan outdated.
2. Accuracy: Sometimes variables are simply immeasurable, funds & time constrain
3. Organizational inflexibilitities: Organization for which plan is made may be inflexible.
4. Other organizational inflexibilities: Polices, financial limitations
5. External inflexibilities: political climate, labor availability, rate of technology change and unforeseen
market conditions.
6. Planning: require a good deal of skilled labor. Time and money.

Forest Management Plan in Nepal:

 During the last sixty years, the experiences of forest management in Nepal have gone through several
phases.
 The initial phase can be considered as management of forest near the villagers by local people to meet
households‟ needs for fuel wood, construction timber, fodder and other forest products.
 The people could generally obtain enough forest products for their needs. In 1951 and the years that
immediately followed major political, social and economic changes were affected.
 One move was the nationalization of the forest in 1957. After nationalization, it was not possible for
the government to protect and manage the forest of the kingdom, because Nepal was lack of
infrastructures such as communication system, technical systems, and technical expertise or in other
related resources.
 The national Forestry Plan (NFP) of 1976 marks the beginning of the scientific practice for the
management of forest in terai and the hills.
 the reflects that there was growing awareness of the dreadful state of the forest, and restoration of the
critical forestry situation and laid down as objectives for forest management, the restoration of the
balance of nature, economic mobilization, development of technology and promotion of public
cooperation.
 The NFP 1975 recommended for the preparation of forest working/management plan (FWP) for each
divisional forest office.
 FWPs were formulated for a few division of the Terai and Dang forest division in Siwaliks. However,
except for the implementation of the timber stand improvement and other cultural operations, the
management plan was generally not enforced.
 The NFP 1976, although was a maidan effort for the scientific management of forest, but it was only
partly implemented and could not fulfill the objectives specified in the plans.
 In 1984, after decentralization, all the district offices were directed to prepare District Forest Schemes
(DFS). Consequently all the forest offices in 1988 formulated DFS for the five fiscal years.
 Several working schemes of various districts were approved were approved by HMG. Similarly specific
action plans for siraha, Saptari and Udaipur districts were approved and brought into implementation.
 Still due to lack of resources, organizational problem, physiographic situation of the country, the plan
specified in the forest working schemes could not be implemented effectively.
 Now the government has adopted new planning method (i.e. Operational Forest Management Plan
especially for 19 Terai districts) to increase production of the forestry products in a sustainable,
economic and ecologically balanced way through the development and implementation of participatory
and technical approaches.

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Types of management plan in Nepal:

In Nepal, there are several types of management plan in forestry sector:

1. Master Plan for Forestry Sector

2. District Forest management Plan
3. Operational Forest Management Plan
4. Operational Plan for Community Forestry User group
5. Management Plan for National Park
6. Buffer Zone Community Forestry Operational Plan
7. Working Plan of Community Development Plan
8. Leasehold Forest Management Plan
9. Religious Forest Management Plan
10. Protected Forest Management Plan

7.1.2 Components of forest management plan:

It is impossible to describe a uniquely correct management plan format; however it is possible to identify
components found in many management plans.

1. Management objectives and polices

2. Forest description
 Forest organization and subdivision
 Forest inventory data
 Growth and yield functions
 Maps
 Subdivisions and compartments
 Roads
 Cover types
 Narrative description
 Physiographic
 Soils
 Cover types
3. Economic expectations
 Demand
 Timber products
 Recreations
 Hunting and fishing
 Water
 Other
 Supply
 Labor
 Capital
 Materials
4. Other external factors
 Legal restrictions
 Public policy
5. Analysis and synthesis
 Silvicultural analysis
 Regulation analysis
 Cutting budget
 Multiple use analysis and plan
6. Protection
 Fire
 Disease
 Insect

7.1.3 Forest management unit:

1. There are different views regarding the unit of forest management; whether the unit should be a single
forest or a group of forests which can be worked together.
2. In Europe a single forest is a working unit.
3. In India, groups of forest under one working circle form the unit of forest managements.
4. In Nepal, a group of forests under one district form the management unit.

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7.2 Preparation of forest management plan:

7.2.1 Data collection:

Both biophysical and socio-economic data should be collected.

Biophysical data includes:

1. Growing stock
2. Area statistics
3. Forest types and composition
4. Compartment information
5. Site class distribution
6. Regeneration status
7. Climate
8. Wildlife
9. Non-timber forest products

Socio-economic data includes:

1. Demographic and socio-economic situation

2. Demand of forest products
3. Participation and involvement of local people
4. Possible socio-economic impacts

7.2.2 Maps and sketches:

1. Management maps: 1:50000 scale. Show new working circles, felling series, P.B. and other details of
management.
2. Stock maps: 1:15000 scale. shoe distribution of forest types, main forest species, non-forest areas,
blanks
3. Regeneration survey maps: 1:4000-5000 scales. Used for regeneration
4. Working plan map: 1:50000 scale (1:6000-30000). show physiographic features, territorial boundaries,
blocks, compartments, roads
5. Enumerations map: 1:50000 scales show location of plots, strips, topographic units and
compartments.
7.2.3 General format:

1. Background
2. Objectives
3. Methodology
4. General description
4.1 Location and boundaries
4.2 Land use
4.3 Topography
4.4 Geology and soil
4.5 Drainage
4.6 Climate
4.7 Historical background of forest management
4.8 Illegal felling
4.9 Forest encroachment
4.10 Non-timber forest products
4.11 Wildlife
4.12 Soil and wildlife conservation
4.13 Institutional framework and infrastructure
5. Socio-economic concerns
5.1 Demographic and socio-economic situation
5.2 Demand of forest products
5.3 Participation and involvement of local people
5.4 Possible socio-economic impacts
5.5 Mitigation measures
6. Present status of the forests
6.1 Area statistics
6.2 Forest types and composition
6.3 Compartment information

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 6.4
Site class distribution
6.5
Development class distribution
6.6
Regeneration status
6.7
Growing stock by development classes
6.8
Working circles
6.8.1 Production forest
6.8.2 Potential community/leasehold forest
6.8.3 Protection forest
7. Management strategy
8. Management
8.1 Background
8.1.1 Growth of sal
8.1.2 Rotation age
8.1.3 Conversion period
8.1.4 Existing regeneration
8.2 Treatment prescriptions/harvesting operations
8.2.1 Production forest, tree-wise management
8.2.2 Production forest, stand-wise management
8.2.3 Allowable cut assessment
8.3 Treatment prescriptions: silvicultural operations
8.4 Preliminary prescriptions
8.4.1 Potential community/leasehold forests
8.4.2 Protection forests
8.4.3 Minor forests products
8.4.4 Soil and water conservation
8.4.5 Wildlife conservation
9. Marketing and supply aspects
10. Investment and physical support
11. Implementation, updating and monitoring
12. Environmental impact assessment

7.2.4 Contents:
7.2.5 Write up of management plan:

For the purpose of managing government managed forest, the Department of forest must prepare a forest
operational plan for one or more districts according to topography and natural boundaries mentioning:

1. All areas covered by forest shrubs, bushes and grass as well as uncultivated areas
2. Location of forest boundary
3. A forest map prepared in such a way as to clearly show the details of land use and species of the trees.
4. Population and diversity of population and particular rotating to the use of forest products
5. particular relating o forest products
6. programs and techniques of developing and protecting forest
7. Annual particulars relating to all collection, use and sale of forest products.
8. Forest products needed by local people.
9. Estimates of annual revenues from forest products during the entire period of the operational plan.
10. Particular of manpower and expenses needed to implement the plan
11. Programs relating to soil conservation, tourism development, conservation of environment and
historical heritages
12. Other particulars deemed appropriate for the management forest.
13. All such operation plan has been approved before the commencement of these rules shall deem to
have been prepared these rules.
14. The director must monitor, and evaluate the implementation of the operational plan of the government
managed forest within these areas and submit a report to the ministry. He must also send off the
report to the department for the information.

Preparation of Management Plan (An example from Jhapa district)

1. Preliminary land allocation: To identify forests suitable for Govt. production forests, potential
community/leasehold forests and protection forests District level forest inventory data, forest maps,
aerial photographs and topographic maps used as a supportive material.

2. Photo-interpretations: Aerial photo of scale 1:25000 used for photo interpretation. Interpretation
works for the provisional delineation for forest compartments on aerial photographs were carried out
based on criteria such as natural boundaries (agricultural land rivers, aspect. slope, ridges, roads and
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 accessibility), working circle, development class, production status, species composition, stand
density, canopy cover, soil type, management objectives and harvesting viewpoints.

3. Forest resources inventory: Forest inventory done based on compartment wise systematic sampling. In
each compartment, plots distributed systematically to cover entire compartment.

4. Socio-economic survey: Available secondary data gathered from central as well field offices and all
primary data collected from field. PRA/RRA tools used.

5. Preparation of forest management maps: Based on latest topographic map (19860, a digitized forest
map (scale 1:120000) of the district prepared. Forest areas, grasslands, shrub lands were directly
digitized from the aerial photographs (1:25000) and all exiting community forests, community
plantation areas roughly digitized from the district map (1:125000). An operational forest management
map (1:25000) of the district showing areas (forest compartments, sub-compartments) also prepared.

7.2.6 Methods of updating

1. The management plan has to be revised one the purposed time expires.
2. During the revision, the basic information regarding the area may not have to be updated since there
won‟t be many changes in that.
3. The socio economic data has to be updated.
4. The future management activities should also be updated with the changing context of the forest.
5. For updating the plan, a technical term is formed, open discussion made with all the stakeholders and
changes are made according to the line with existing forest policy of the country.

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