An economic analysis of forest harvesting system in Peninsular Malaysia: cost of sustainable forest management

An economic analysis of alternative forest harvesting systems was carried out in Peninsular Malaysia to evaluate and compare existing and improve harvesting systems in term of their costs, efficiency and productivity. The results showed that distance and number of logs were significantly related to delay-free cycle time in felling in the improved system while in the existing system only diameter was significantly related to time. In skidding, distance and log volume were significant both in the improve and existing systems. Logging cost excluding cost of premium, royalty and cess under the improve system was RM 232.11 per m3 or 180% higher than the cost of logging under the existing system of RM82.74 per m3. The increase in costs in the improved system is mainly due to the higher cost of buffer zone , road construction and repair and enforcement.The conservation costs constituted about 82% of the total cost in the improved system and about 48% in the existing system. Under average conditions, it takes 0.24 h to fell a tree under the improved system compared to 0.40 h under ther existing system. This suggest that the improvement made under the improved system has increased the productivity of felling.In skidding, it takes about 0.11 h to travel one round trip under the improved system compared to 0.20 h (simulated) under the existing system.This suggest that the improvement in road construction in the improved system has increased productivity of skidding. Under average conditions, the cost of felling and skidding were lower under the improved system as compared to the existing system (simulated). Simulating the improved systems, the cost of skidding were lower as compared with the existing system. Cost of sustainable forest management was analysed conceptually through analytical frameworkof incremental cost and financial analysis of complying to SFM. It is expected that the reduction in damage to the residual stand after logging will contribute to the higher net future harvests of timber. It is expected that in the long run the SFM can be financially viable by incorporating the NTFP and environmental services other than timber revenue.