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Uncertainty in estimated values of forestry project: a case study of Ago-Owu Forest Reserve, Osun State
Abstract
This paper examines cost and benefits of a 21-year-old Teak Plantation with a view to determining the degree of uncertainty that surrounds every estimated value in forestry project. The study identifies key variables that are likely to have major impacts on forestry project.
Information were gathered through the use of primary and secondary data. The information obtained were analyzed using Net Present Value, Benefit-Cost Ratio, Economic Rate of Return and Sensitivity Analysis.
The results of this study indicate that the NPV and B/C ratio were sensitive to increase in discount factor. The values of estimates for a direct and taungya plantatiomn at Ago-Owu forest reserve were less sensitive to increase in costs of inputs (seeds, labour, land and capital).
It is recommended that since the values of estimates are highly sensitive to increase in discount factors, more effort should be channeled by the Government to reduce the level of uncertainty in future forestry projects through discount rate and genuine information on inventory of the plantation
[JEXT Vol.2(1) 2001: 16-23]
Information were gathered through the use of primary and secondary data. The information obtained were analyzed using Net Present Value, Benefit-Cost Ratio, Economic Rate of Return and Sensitivity Analysis.
The results of this study indicate that the NPV and B/C ratio were sensitive to increase in discount factor. The values of estimates for a direct and taungya plantatiomn at Ago-Owu forest reserve were less sensitive to increase in costs of inputs (seeds, labour, land and capital).
It is recommended that since the values of estimates are highly sensitive to increase in discount factors, more effort should be channeled by the Government to reduce the level of uncertainty in future forestry projects through discount rate and genuine information on inventory of the plantation
[JEXT Vol.2(1) 2001: 16-23]
