Cost benefit analysis and sustained yield forestry in India
The basis of scientific forest management in India has been the principle of maximum physical sustained yield of timber and other highvalued products in the interest of posterity. This leads to long rotations, slow turnover of the crop, and slow conversion of existing forest into more productive crops. The needs of the local population have generally been given a lower priority. The community is thus often not in sympathy with the forest departments. This makes the job of protecting and managing the forests as envisaged more difficult. It would therefore be desirable to compare the relative merits of alternative management regimes: maximizing long-term flow of physical product as professed by foresters, maximizing economic efficiency as demanded by neo-classical economists, or maximizing net social value to the current generation, as suggested by modern welfare economists. One framework for such an analysis is afforded by social cost benefit analysis (SCBA). The Little-Mirrlees methodology of SCBA has been used for a study of the teak-bearing forests of North Kanara in Karnataka State, India. Generally, applying economic criteria hastens the liquidation of existing crops, and shortens the optimal rotations of future plantations. Teak plantation as an investment activity is seen to be highly sensitive to the discount rate chosen. This is ultimately a subjective parameter. Hence there is no objective case against long rotations. The social value of maintaining basic needs supplies may, under some conditions, compensate for the loss due to postponement of exploitation of the existing crop. This would support a slow pace of conversion. On the other hand, fuelwood plantations may be more valuable socially than commercial timber crops, thus favouring faster turnover of short rotation smallwood crops in place of timber crops on long rotations. There is thus no inherent social advantage to maximizing physical yield. In conclusion, it is suggested that forestry can serve the interests of posterity better by being more responsive to social needs. On the other hand, economists might make a better contribution to forest management by clearly pointing out the subjective elements in their 'objective' prescriptions.