Economic assessment of poplar cultivation under interest rate effects in a risky environment | ||
| تحقیقات جنگل و صنوبر ایران | ||
| Article 4, Volume 33, Issue 2 - Serial Number 100, October 2025, Pages 132-148 PDF (1.11 M) | ||
| Document Type: Research article | ||
| DOI: 10.22092/ijfpr.2024.367613.2183 | ||
| Authors | ||
| Seyed Mojtaba Mojaverian* 1; Foad Eshghi2; Kamal Ataie Solout2; Mahsa Taslimi3; Maria Shahnouri4 | ||
| 1Prof., Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran | ||
| 2Assistant Prof., Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran | ||
| 3Ph.D. of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran | ||
| 4Ph.D. Student of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran | ||
| Abstract | ||
| Background and purpose: Although there is extensive research on economic evaluation, fewer studies focus on determining the optimal cutting age and efficiency of wood cultivation under uncertainty in tree growth periods and wood market conditions. This research aims to evaluate the economic viability of poplar wood cultivation under different risk scenarios. Methodology: The data were obtained from Mohammadi Limaei et al. (2013), which involved research conducted over ten years on Populus deltoides W.Bartram ex Marshall in seven plantations. The Faustmann model was applied, and the tree growth function was estimated using fuzzy regression across pessimistic, average, and optimistic scenarios. The cubic function form was selected for its close resemblance to biological growth and interpretability. Determining the most economical harvest time involved solving the Faustmann maximization problem under two management modes: one-time cultivation, which ignores the opportunity cost of subsequent cycles, and permanent cultivation, which accounts for opportunity costs after each harvest cycle. This study focused on optimizing wood cultivation over one rotation period. The net present value (NPV) criterion was used to select suitable species and determine optimal harvesting age, as it accounts for net profit over time more effectively than alternative criteria. Wood price forecasts were derived by decomposing price components into trend, cyclical, and irregular factors. Results: Fuzzy regression estimates of poplar volume at different ages showed maximum volumes in the pessimistic, average, and optimistic scenarios as 129.3 m³/ha at 12 years, 197 m³/ha at 16 years, and 329.8 m³/ha at 20 years, respectively. Projected wood prices per cubic meter in 2045 under these scenarios were 82.7, 102, and 121 million Rials. At an 18% discount rate, the present values of per hectare poplar cultivation were 887 million Rials (year 9) under pessimistic conditions, 1,349 million Rials (year 9) under average conditions, and 2,194 million Rials (year 10) under optimistic conditions. Increasing the interest rate to approximately 50% (inflation level) reduced the optimal cutting age to five years across all scenarios. Conclusion: Rising discount rates reduce both the optimal cutting age and the discounted expected return. For example, at a 14% discount rate in the average scenario, the optimal cutting age is 11 years with a discounted yield of 2,019 million Rials per hectare; at 50%, the cutting age falls to five years with an expected discounted yield of 180 million Rials per hectare. Given the discrepancy between the investor’s goal of maximizing income and society’s goal of maximizing wood production, and the critical influence of interest rates on this gap, it is strongly recommended to offer low-interest loan facilities to industry investors. | ||
| Keywords | ||
| Faustmann model; fuzzy regression; interest rate; optimal cut-off age | ||
| References | ||
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