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Determination of Economic and Financial Rotation Lengths of Hybrid Poplar Plantations: The Case of Turkey



Sait Engindeniz
 
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ABSTRACT

The present study was carried out to determine the economic and financial rotation lengths for hybrid poplar plantations (Populusx Euramericana Guiner cv.I-214) in a selected area of Turkey. According to the results of this study, the economic and financial rotation lengths have been determined as 9 years and 11 years, respectively. The rotation lengths could be determined according to various factors. For example; many previous studies indicated that economic and financial rotation lengths in hybrid poplars depend on the site characteristics and planting spaces. Therefore, the most appropriate rotation length for hybrid poplar plantations should be determined by local studies.

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  How to cite this article:

Sait Engindeniz , 2003. Determination of Economic and Financial Rotation Lengths of Hybrid Poplar Plantations: The Case of Turkey. Pakistan Journal of Biological Sciences, 6: 325-330.

DOI: 10.3923/pjbs.2003.325.330

URL: https://scialert.net/abstract/?doi=pjbs.2003.325.330

Introduction

It is estimated that hybrid poplar cultivation is currently done in 160000 he area in Turkey (Saribas, 1993). For producer, the aim of hybrid poplar cultivation is to get maximum financial return. Therefore as it has been discussed in many studies before (Banoun, 1982; Birler, 1984; Chaturvedi, 1992; Fang et al., 1997; Streed, 1999; Nuss, 1999; Hua and Zhou, 2000), poplars should be cut at the end of the most appropriate rotation length.

In poplar cultivation, the cutting time after ripening of trees is called as rotation length. Many factors could influence rotation length, but selection of planting area, planting space, inputs used and market conditions are the most important factors (Birler, 1984). The selection of the planting area includes matching the site characteristics with the most appropriate clone.

If rotation length is determined according to maximum mean annual increment, it is referred to as economic rotation length. But, if rotation length is determined according to maximum annual economic or financial return, it is referred to as financial rotation length. Producers want to obtain maximum financial return. Therefore, the most appropriate rotation length for producers is the financial rotation length.

Hybrid poplars reach the cutting age between 10 and 12 years at the normal conditions (Nuss, 1999; Streed, 1999). But, according to rearing up and market conditions, cutting age could be taken to an earlier time or may be delayed for 3 or 4 years. Earlier or later cutting of poplars can create the negative effect on wood quality. Therefore, the most appropriate rotation length for poplars should be determined taking the local conditions into account. Generally, the most appropriate length should maximize the economic or financial return.

The objective of the study was determine the economic and financial rotation lengths of hybrid poplar plantations in a selected area from Izmir province in Turkey.

Materials and Methods

Kücük Menderes River Basin is situated in the western part of Turkey between 38° 15' N and 27° and 28° 30' E. The river basin is about 4000 km2 in area, and it is located in the mountainous catchment area in the southern part of Izmir province. The river basin is separated from the Gediz River Basin in the north and Büyük Menderes River Basin in the south by two mountain chains, which form its natural boundaries.

Kücük Menderes River Basin has a Mediterranean climatic tendency towards continental climate. According to the bioclimatic map, the climate is thermomediterranean (attenuated) in the inland part of the river basin and mesomediterranean (accentuated) near the coast (Boxem and Wielemaker, 1972). The average annual temperatures, those of the warmest (July) and the coldest month (January) are rather similar for the entire river basin. The annual precipitation is about 700 mm. and the average relative humidity is 60 %.

In the river basin, 65 % of the total area is used for agriculture. However, 15 % of the river basin is used for forestry being mainly pinus species on the mountainous part of the river basin and poplars on the lower parts of the river basin. The remaining 20 % of the river basin is wasteland and includes rocks, riverbeds, sanddunes and strongly salt-affected, mainly marshy areas.

According to pre-research in the river basin, 71 hybrid poplar plantations were determined to be between 1 and 12 years-old and these plantations are included in the scope of current study. The range of plantation size changes between 0.2 and 15 ha. The total plantation area is 119.9 ha and the average size was calculated as 1.7 hectares. All the poplar-trees are from the clone of Populusx Euramericana Guiner cv. I-214. This clone grows very fast and is widely cultivated in Turkey. Therefore, this clone was selected for this study.

The technical and economical data collected from producers were derived by the survey in the date of February 2001. The cultivation treatments and the cost of these were asked in the year 2000 and this is the latest year before the survey. By this way, the quantity of using inputs and the current price of them were also determined. And, it is asked when the cutting-time is and who the buyers of poplar are. In addition, the market of poplar-wood was examined and the purchase price of poplar-wood was determined by diameter. For this purpose, it was interviewed with the authorities of the purchaser companies.

Some data were derived by the biological measurements on the trees, too. For this purpose, firstly, randomly two poplar plantations in every age have been selected (all the plantation which is 1 and 2 years old was selected). After that, in every poplar plantation, tree in proportion 5% of total tree number have been determined with systematic random sampling and the measurements of diameter in heights of 1.30 m from place of these trees have been determined one by one by a measure. The measurements of diameter of total 647 trees had been made in this way. Measurements on trees have been verified on February 2001.

Total costs have been subtracted from the total gross income for the calculation of net income by years in surveyed poplar plantations. Wood quantity to be obtained from trees by ages and current wood prices in wood purchase market have been multiplied for getting the gross income by years.

Establishment and production costs were found by survey in the view of data from producers. Laborer and machine costs, material costs (sapling, fertilizer, pesticide etc.), interest of total costs and administrative costs have been considered as cost elements. Examined poplar plantations are tax-free and were not insured. For calculation of interest of total costs had been taken half of interest rate (55%), which was valid on working capital loan for a year of The Turkish Agricultural Bank. Administrative costs were estimated to be 3 % of total costs.

The inflation level of Turkey was 70 % at that time. It is needed to know current and real value of money and it is needed to know making analysis in which criteria. The more practical way in forestry investment during the project preparation, it is advised that real prices accept and use in the project (Kengen, 1997; Türker, 2000). In the economic analysis of this study, average total costs in year 2000 of poplar plantations have been calculated by age of trees. By this way, an average value was found for each years old of poplar plantations. So, the possible negative effects of inflation were removed in the analysis. All the poplar producers perform same cultivation treatments in the river basin. So, there is no big difference using inputs between the producers. Performed cultivation treatments by producers were ploughing (two times in a year), hoeing (for space and bottom), fertilization (generally farm-yard manure and ammonium nitrate), irrigation (between May and September), calcification (for stem of trees against insects) , insecticide application and pruning.

In this study, the econometric analysis was performed for determination of economic and financial rotation lengths of hybrid poplar plantations and exponential and curvilinear functions were also developed (Table 1).

Table 1: Distribution of poplar plantations according to age of trees

Results and Discussion

The planting space of trees in poplar plantations: Biomass wood production from fast growing tree plantations is becoming more wide spread in the world. In order to increase mass production in unit area, experiments are conducted to reduce planting space, to innovate growing techniques and to improve the genetic 1gain (Birler et al., 1996).

Planting space can impact yields in poplar plantations. That impact also varies over time. For example; while there is little impact of a 6 x 6 m2 spacing on a young plantations, that impact is much greater than the same age plantation if the spacing is 3 x 3 m2. Many previous studies have indicated that planting rotation length decreased against increasing wood quantity when planting spaces become closer in hybrid poplar plantations (Anderson and Zsuffa, 1980; Usta, 1985; Szendrodi, 1996).

The planting spaces of hybrid poplar plantations are varied in the river basin. However, it is difficult to find similar planting space for different ages of trees in hybrid poplar plantations. In this study, it had been determined that planting space mostly (66% of total plantation area) applied as 5 x 5 m2 (Table 2). The number of trees per hectare changes between 280 and 1110 in examined poplar plantations. The average number of tree per hectare was determined to be 442. This average value is taken into consideration for economic analysis in this study.

The measurement of diameter, height and volume of the trees at different ages: The stem of the trees included in the sample are measured at 1.30 m of height (Table 3). The measurement of heights for the poplar plantations hasn’t been carried out in this study. Instead, the following regression equation which shows the relation between diameter and height for the poplar plantations is used in order to measure the heights for different diameters (R2= 0.954683).

(1)

This equation has been taken from a study, done previously in the river basin to estimate the heights of the hybrid poplar plantation (PopulusxEuramericana Guiner cv. I-214) corresponding to the diameter sizes (Gökce, 1978). In this equation, (Y) is expressed as the height of trees (m) and (x) is diameter of the trees (cm). The average height measurements have been estimated substituting the diameter sizes, which had been determined by ages, in equation (1).

In determination of the volume measurements at different ages in poplars, 1.30 m height diameter measurements and the total heights of the trees are used. For this purpose, usually, case specific yield tables are prepared. However, as the real the heights hasn’t been measured in this study, it hasn’t been possible to establish the specific table of yield. For this reason, when determining the volumes by ages of the trees the diameters already measured and the corresponding heights were used, and the required yield tables were taken from the same study which way carried out in the river basin before (Gökce, 1978). As the trees under tree year old fall bellow the size elligible for usage, the volumes for these ages hasn’t been estimated.

Investigations show that diameter growth is affected by the planting spaces thus wider spaces produced larger diameters. No significant effect was observed between space and height growth. Stand volume is also affected by the planting space thus closer spaces produced greater amount of volume in unit area however wider spaces produced stems with larger diameter. Plantations with closer spaces produced greater amount of maximum mean annual increment per unit area.

The determination of economic rotation length: Relation between age and volume of trees in poplar plantations must be examined for determination of economic rotation length. Generally, there is a relation between age and volume of trees. But this relation can show changes with the effect of various factors. In this study, relation between age and volume of trees in poplar plantations was examined as econometric. For this purpose, many models such as linear (logarithmical and semi-logarithmical) and non-linear (cubic, quadratic and exponential) have been tried, but it had been determined that this relation can be expressed with an exponential function such as below. In this function, (Y) is expressed as volume (m3 per tree) and (x) is expressed as age of trees. The curve of this function can be drawn (Table 3).

When estimated values have been calculated using the above equation (2), the maximum mean annual increment that shows the economic rotation length has been found as being 9 years (Table 4). On the other hand, many previous studies indicate that economic rotation lengths in hybrid poplars can be vary between 7 to 12 years according to the planting spaces (Gökce, 1978; Chaturvedi, 1992; Birler et al., 1996; Nuss, 1999).

The obtained net income from poplar plantations by years: As a result of the pre-researches, it is stated that poplar trees are sold at the farmland as planted. During the sale buyer takes on the whole expenses such as cutting, transportation, etc. The price of the poplar-wood is stated in kilograms in the river basin.

Table 2: Distribution of Poplar Plantations According to the Planting Spaces

Table 3: Measures of diameter, height and volume of poplars

Table 4: Estimated volume measurements of poplars

For this reason, the volume (m3) values are converted into mass (kg) values to predict the wood quantity will be obtained by age of trees. In this stage the equation 1m3=1000 kg of poplar-wood is used (Saribas, 1993). There are three different prices by the diameter of the trees in the poplar buyers market in the river basin. These prices are; trees have diameter less then 30 cm sold at the price 20000 TL kg-1, trees have diameter between 30-40 cm sold 25000 TL kg-1 and trees have diameter more then 40 cm sold at the price 32000 TL kg-1.

When predicted wood quantity by the age of trees and poplar-wood prices in the river basin are taken into consideration, it is obvious that the gross income increases 36 times between the ages 3 and 12 (Table 5). According to the results of the research, important part of the establishment cost consists of labor and machinery costs (51.8%). On the other hand, the production costs of the poplar plantation decreases as the harvest age comes closer.

The costs of mentioned years were subtracted from the gross incomes of the poplar trees and net income according to the tree ages were calculated. According to the results, the annual and total net income also increases as the poplar age increases. Similar results were fixed in previous studies (Birler et al., 1989; Diner and Kocer, 1989, Chaturvedi, 1992, Nuss, 1999).

The determination of financial rotation length: For determining financial rotation length that is year given maximum average annual net income; firstly, relation between age of trees and obtained net income from poplar plantations must be examined. In this study, it had been determined that this relation can be expressed with a curvilinear function such as below. In this function, (Y) is expressed to as obtained net income from poplar plantation (000 TL/hectar) and (x) is expressed to as age of trees. The curve of this function can be drawn:

(2)

when estimated values have been calculated using the above equation (2), the maximum average net income that shows the financial rotation length has been found as being 11 years (Table 6). However, many previous studies indicate that financial rotation lengths in hybrid poplars can vary between 8 and 13 years according to the planting spaces (Gökce, 1978; Chaturvedi, 1992; Birler et al., 1996; Nuss, 1999).

In poplar cultivation, economic and financial rotation lengths are determined according to the purposes. If purpose is to determine the year providing maximum mean annual increment, economic rotation length should be measured. But, if purpose is to determine the year providing maximum financial return, financial rotation length should be measured. Rotation lengths could be determined according to various factors. Economic and financial rotation lengths in hybrid poplars can be changed according to site characteristics and planting spaces. Therefore, the most appropriate rotation length for hybrid poplar plantations should be determined by local studies.

Many previous studies indicate that economic and financial rotation lengths in hybrid poplars can vary between 7 and 13 years according to site characteristics and planting spaces (Gökce, 1978; Birler et al., 1989; Diner and Kocer, 1989; Chaturvedi, 1992, Nuss, 1999). In poplar plantations, economic and financial rotation lengths do not generally overlap.

Table 5: Obtained net income from poplar plantations according to years

Table 6: Estimated Net Income of Poplar Plantations According to Years

In the researched poplar plantations, the economic and financial rotation lengths had been found as 9 and 11 years, respectively. Although financial rotation length can change depending on poplar-wood prices and the rate of interest, economic rotation length doesn’t change unless there is a change in soil productivity and production conditions. Besides, economic rotation length is closely related with the planting space of poplar.

In recent years, due to stagnation in poplar-wood prices, poplar cultivation has lost its attractiveness. In the river basin, the majority of producers have told that the most convenient cutting age for hybrid poplar is 10 years. But, the majority has told that they cut their trees at the age of 7 or 8. The main reason for early cutting is low prices.

When the researched results were calculated, the cutting of hybrid poplar in the year of 4, 5, 6, 7, 8, 9, 10 instead of the 11th year have caused an income loss of 94, 83, 69, 53, 37, 22 and 9 %, respectively.

As a conclusion, it could be stated that hybrid poplar cultivation should be developed to meet 7poplar-wood demand in Turkey. However, the low poplar-wood prices are causing a decrease in the number of poplar-wood producers. Currently, poplar cultivation areas are irrigated land. In these areas, producers can produce two or three products in a year, instead of poplar. So, they can shift to the other product because of low prices. For this reason, poplar producers should be supported by subsidy policies. This is the only way, the poplar production will be increased and qualified.

Acknowledgement

This study was supported by the Research Fund of Ege University. Several poplar producers furnished information for this study. Appreciation is expressed to those producers, Prof Dr. Osman Gökce and other individuals who provided assistance.

REFERENCES
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