Efficiency gains of cooperation between properties under varying target levels of old forest area coverage

Published Date
Forest Policy and Economics
March 2006, Vol.8(2):135–148, doi:10.1016/j.forpol.2004.06.003

Author 

Hans Fredrik Hoen ^,

Tron Eid

Petter Økseter

Department of Ecology and Natural Resource Management, Agricultural University of Norway, P.O. Box 5003, NO-1432 Ås, Norway

Received 29 October 2003. Revised 26 April 2004. Accepted 1 June 2004. Available online 12 October 2004. 

Abstract

The Norwegian forest ownership structure, with many small properties and forest conditions with large heterogeneity in production potential and accessibility, points towards considerations beyond the property boundaries in order to satisfy environmentally oriented treatment requirements. The aim of this paper is to analyse how cooperation between properties may provide efficiency gains when certain long-range target levels of old forest area coverage were applied. A case study with 48 individual properties, where long-range timber production was optimised under different levels of cooperation, is presented.

The case study showed that cooperation, in addition to be a necessity to reach feasible solutions with respect to the applied long-range target levels of old forest area coverage, also produced gains in terms of increased net present value (NPV). The case study also pointed out some results likely to be of general validity; the feasibility of certain environmentally oriented requirements normally increases, and the potential loss in net present value related to the constraints decreases, when the size of the area under management increases. The gains of cooperation in terms of increased net present value were, in general, small. The forest conditions have a bearing impact on the results, i.e., another sample of properties would give different levels of potential gains in net present value and in proportion of total area being subject to feasible solutions with respect to old forest area coverage.

Keywords

Cooperation between properties

Efficiency gain

Net present value

Old forest coverage

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