Financial Costs and Benefits of Reduced Impact Logging
in the Eastern Amazon

Analysis by :
Thomas P. Holmes, Geoffrey M. Blate, Johan C. Zweede, Rodrigo Pereira Jr., Paulo Barreto, Frederick Boltz and Roberto Bauch.

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Financial Cost-Benefit - English Version	:

Reduced Impact Logging in Tropical Forests

Logging in the tropics, as conventionally practiced, depletes timber stocks and causes severe ecological damage to residual forests. Reduced impact logging (RIL) systems are currently being developed in Brazil and other countries in response to concerns over the ecological and economic sustainability of harvesting natural tropical forest stands. RIL systems use an array of best harvesting techniques that reduce damage to residual forests, create fewer roads and skid trails, reduce soil disturbance and erosion, protect water quality, mitigate fire risk and potentially help maintain regeneration and protect biological diversity.

Little is known about the financial aspects of RIL, and existing evidence in Latin America is inconclusive. However, existing data suggest that RIL can be more profitable than conventional logging (CL) in some situations. Defining the set of conditions that favor the financial aspects of RIL is important because educating loggers of this fact will motivate them to alter their practices (loggers’ self-interest). This may protect ecological services in logged tropical forests while providing jobs and income for local economies. RIL systems are an integral part of forest certification initiatives and may provide a low-cost option for maintaining carbon sinks and forest conservation benefits. If sustainable forestry is to hold promise as an option, ecological impacts of timber harvesting need to be mitigated using economically competitive technology.

In addition to financial impacts, RIL systems can provide other industrial benefits. RIL procedures reduce the volume of timber wasted in harvesting operations, thereby increasing the volume of timber supplied from a fixed resource base. Pre-harvest inventories of standing timber provide a marketing advantage to landowners and mills which can establish forward contracts with buyers based on delivery of known volumes for specific species. Inventory control also helps eliminate low prices and degradation associated with products that sit in mill yards because buyers cannot be found. Careful tree felling and machine use increases worker safety which should result in lower insurance rates and a more secure workforce.

RIL techniques and guidelines are not fixed prescriptions, but adapt best harvesting techniques to existing biophysical and economic conditions. The FAO model codeof forest harvesting provides the basis for RIL system design and typically includes many or all of the following activities:
• pre-harvest inventory and mapping of trees
• pre-harvest planning of roads and skidtrails
• pre-harvest vine cutting
• directional felling
• cutting stumps low to the ground
• efficient utilization of felled trunks
• constructing roads and skid trails of optimum width
• winching of logs to planned skid trails
• constructing landings of optimal size
• minimizing ground disturbance and slash management.

Model Sites in the Brazilian Amazon

For the past several years, the Tropical Forest Foundation (TFF) and its Brazilian subsidiary Fundação Floresta Tropical (FFT) have developed and implemented operational RIL models at various locations throughout the Brazilian Amazon and trained forestry personnel in RIL methods. Between 1995 and 1997, FFT established several 100 ha harvesting blocks at Fazenda Cauaxi situated southwest of Paragominas in the state of Para. Most of the wood processed in Paragominas is marketed domestically and about 8% of the processed volume is exported. Access to domestic markets permits 40 - 50 tree species to be harvested in this location.

Reduced impact logging operations incur costs that are not incurred by CL operations. Between six to twelve months before harvesting, RIL crews inventory the harvest area and cut vines connected to potential harvest trees. Using the inventory, maps are generated, harvest trees are selected, skid trails are laid out and potentially valuable trees for the subsequent harvest are identified. In contrast, CL harvesting is not planned but proceeds using a “hit or miss” approach where the timber feller works with an assistant, a “tree hunter”, to help identify harvestable trees. Timber fellers in CL operations are typically paid on a piece rate that encourages rapid felling of trees, often of species and sizes or with defects that the mill will not accept. Felling in CL operations has little regard for impacts on the residual stand.

Skidding crews operate independently from felling crews and are not provided with precise information regarding location of felled trees. The search for logs results in an inefficient use of labor and machine time and causes significant damage to the residual stand, forest soils and skidding equipment.

The analysis presented here is a summary of a detailed technical report that provides a comparison of the costs and revenues of a typical, large-scale RIL system relative to a typical, large scale CL system in the Paragominas timbershed. The study focuses on the financial, operational, and technical aspects of RIL vs. CL systems. Although the study does not address biological or ecological questions directly, measurements were made of key parameters affecting future forest productivity. These parameters represent future benefits of using RIL systems.

What Was Learned

At Fazenda Cauaxi, the initial harvest averaged 25 m3 (4 to 6 trees) per hectare from the harvesting blocks. Pre- and post-harvest inventories showed that RIL activities were effective in reducing the amount of wood wasted in the forest and on the log deck relative to the CL operation (Figure 1). Wood wasted in the CL operation represented about 24% of the initial harvest volume, compared to only 8% in the RIL operation. More careful bucking of logs using RIL techniques increased recovered volume by about 1.1 m3 per hectare relative to CL techniques. In the RIL operations, better coordination between felling and skidding crews increased recovered volume by about 0.9 m3 per hectare. More careful tree selection by RIL crews (in terms of size, species and defect) resulted in a decrease of about 1.4 m3 per hectare in the volume of logs that were harvested but never utilized by the mill. Logging causes damage to the residual stand of trees. By cutting vines, directionally felling trees and planning the layout of roads and skid trails in RIL operations, damage to commercially valuable trees in the residual stand can be greatly reduced.

As shown in Figure 2, the RIL system reduced the rate at which trees in the residual stand were fatally damaged. For every 100 trees felled on the CL block, 38 trees (commercial or potentially commercial, greater than 35 cm dbh and with good form) were fatally damaged, compared to only 17 trees in the RIL block. Also, damaged future crop trees in the residual stand were recovering at nearly twice the rate on the RIL block than on the CL block. These results suggest that economic and ecological benefits provided by the residual stand will be greater on the RIL block.

Logging disturbs forest soils through the operation of heavy equipment. The amount of ground area disturbed on the CL block was nearly twice the ground area disturbed by RIL operations. Although part of this was due to the higher harvesting intensity on the CL block, the ground area disturbed per tree harvested was about 60% greater on the CL relative to the RIL block. Heavy equipment disturbed about 10% of the ground area in the CL block and about 5% of the ground area in the RIL block.

A comparison of the cost of typical, large scale RIL and CL operations in the Paragominas timbershed is shown in Figure 3. RIL planning and infrastructure activities increased “up-front” costs incurred before harvest by about 170% over CL operations. Felling and bucking costs were also larger for RIL activities because of the extra effort required for directional felling and increased product recovery. However, efficiency gains due to planning typical RIL operations were large. First, skidding and log deck productivity increased dramatically for the typical RIL operation and led to a 37% reduction in cost relative to the CL operation. Second, better recovery of potential merchantable volume on the typical RIL site reduced direct cost associated with waste by 78% and reduced stumpage cost by 16%. Overall, cost per cubic meter associated with a typical RIL system in this timbershed was estimated to be 12% less than the cost of a typical CL system.

The major conclusion of the analysis was that reduced impact logging can be financially more profitable than conventional logging. This implies that the economic self interest of loggers can help mitigate the loss of ecological services in some tropical forests subject to logging pressure.

Reduced impact logging techniques greatly decreased the damage to trees in the residual stand, the amount of ground area disturbed by machinery and the volume of wood residues left in the forest. Future economic and ecological benefits provided by logged forests will likely be greater where RIL techniques are used.

Finally, a word of caution is due. Tropical forests are heterogeneous and the markets for production inputs and outputs vary. The conclusions of this study do not necessarily apply to other timbersheds in the Amazon basin or elsewhere.

The current demand for formal training in RIL methods by both large landowners and the Brazilian Federal Environmental Institute (IBAMA) suggests that further research and operational testing are needed. These would evaluate how variations in forest type, input and output markets and size of logging operation affect optimal design and performance of RIL systems. The identification of suitable conditions are in the loggers’ self-interest, and can help mitigate the loss of ecological services in forests subject to logging pressure. This will help sustainable tropical forest management become a reality.

		Conventional Logging Harvesting is not planned but uses a “hit or miss” approach. Timber fellers have little regard for the residual stand, and their search for logs is inefficient.
		Reduced Impact Logging Techniques greatly decrease the damage to trees in the residual stand, the amount of ground area disturbed by machinery, and the volume of wood residues left in the forest.

Tropical Forest Foundation

The Tropical Forest Foundation (TFF) is a non-profit, educational organization dedicated to the conservation of tropical forests through sustainable forestry. TFF has become widely recognized for establishing demonstration models and training to show the advantages and teach the principles of sustainable forest management through the application of Reduced Impact Logging practices. The Foundation’s Board of Directors include leaders from industry, government, science, academia and conservation organizations. TFF currently has programs in Brazil, Guyana S.A., Indonesia and the Asia Pacific region.

For a complete copy of the report Financial Costs and Benefits of Reduced-Impact Logging in the Eastern Amazon, please contact:

or

Tropical Forest Foundation - Indonesia

Manggala Wanabakti, Block IV, 7th Floor, Wing B, Room 718
Jl. Jend. Gatot Subroto, Senayan, Jakarta 10270
I N D O N E S I A
Phone (62-21) 573-5589 Fax (62-21) 5790-2925
E-Mail: tff@cbn.net.id
www.tff-indonesia.org

The report can also be downloaded from the CIFOR (www.cifor.org) or the USDA Forest Service International Programs (www.fs.fed.us/global) websites.

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