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Forest plantation management strategies for economic development of Uganda Moyini, Yakobo Z. G. 1978

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FOREST PLANTATION MANAGEMENT STRATEGIES FOR ECONOMIC DEVELOPMENT OF UGANDA by YAKOBO Z.G. MOYINI B.Sc. F o r e s t r y ( H o n s . ) , M a k e r e r e U n i v e r s i t y , 1973 M.F.S., W a s h i n g t o n S t a t e U n i v e r s i t y , 1974 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE. REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN THE FACULTY OF GRADUATE STUDIES (THE FACULTY OF FORESTRY) We a c c e p t t h i s t h e s i s a s c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA (c) Yakobo Z.G. Moyini In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h Co lumb ia , I ag ree that the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s tudy . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y purposes may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . It i s u n d e r s t o o d that c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i thout my w r i t t e n p e r m i s s i o n . Department o f FORESTRY  The U n i v e r s i t y o f B r i t i s h Co lumbia 2075 W e s b r o o k P l a c e V a n c o u v e r , C a n a d a V6T 1W5 Date AUGUST 9, 1978. ABSTRACT S u p e r v i s o r : P r o f e s s o r J..H.G. Smith The pace o f economic development i n Uganda has been slow. N a t i o n a l output has not i n c r e a s e d f a s t enough. There has been evidence of a long-term de-t e r i o r a t i o n i n the terms of trade, elements of export i n s t a b i l i t y and a s e r i o u s s t r e s s i n the balance of payments. Employment and r u r a l development have been l e s s than s a t i s f a c t o r y . A p o s s i b l e s t r a t e g y f o r a l l e v i a t i n g these problems i n v o l v e s a more r a t i o n a l u t i l i z a t i o n of n a t u r a l r e s o u r c e s , of which the f o r e s t r y s e c t o r i s one. A review of the p a s t performance of the f o r e s t r y s e c t o r i n d i c a t e d t h a t i t s c o n t r i b u t i o n to the Gross Domestic Product was minimal, 2.1%. Furthermore, em-ployment i n f o r e s t management was s m a l l and u n s t a b l e and imports of f o r e s t products have i n c r e a s e d f a s t e r than e x p o r t s . On the o t h e r hand, f o r e s t i n d u s t r i e s were l a b o u r - i n t e n s i v e , ranking second to the t e x t i l e i n d u s t r y and c o n t r i b u t i n g 10% of the t o t a l employment i n manu-f a c t u r i n g . The l a c k of a sound f o r e s t p o l i c y and a q u a n t i f i a b l e p r o d u c t i o n g o a l was i d e n t i f i e d as a p o s s i b l e cause of the - i i i -poor performance. Forestry was relegated to the p o s i t i o n of a handmaid to agriculture and the size of the national forest estate was limited to a minimum of 8% of the t o t a l land area of the country. If the forestry sector i s to contribute sub-s t a n t i a l l y to economic development, i t must be well planned. To achieve t h i s the i d e n t i f i c a t i o n of optimum product-oriented management models for forest lands i s necessary. By the year 2000 A.D. maximum consumption requirements 3 i n m i l l i o n M were estimated to be 46.85 for fuelwood and charcoal, 2.89 for poles and posts, 1.0 3 for sawnwood and sleepers and 0.15 for wood-based panels; and 0.25 m i l l i o n metric tons for paper and paperboard. Based on roundwood supply projections at current l e v e l s of management and timber prices, the forest resource of Uganda w i l l be unable to meet the anticipated demand by the year 2000. Increased u t i l i z a t i o n of the lesser-known species i n the t r o p i c a l high forests i s a feasible medium-term strategy for avoiding timber s c a r c i t y . In addition, preliminary studies indicate that species such as Cyanometra alexandrii (CH. Wright) o f f e r r e a l promise i n the export sector and should, therefore, be processed. However, for a much more sustained production with attendant improvements i n q u a l i t y and y i e l d per hectare, a greater e f f o r t towards forest plantations i s advocated. Five product-oriented softwood (Pinus patula Schl. Cham and P. caribaea Morelet var. hondurensis) management models were forumulated and tested for e f f i c i e n c y . Two of - i v -the models had close spacing (2200 stems/ha) with a l i g h t (IA) and a heavy (IB) thinning. Model IC had intermediate spacing (1800 stems/ha) with two heavy thinnings; ID with wide spacing (900 stems/ha) and a heavy thinning; and IE, the current management regime, has a wide/intermediate spacing (1370 stems/ha) with three thinnings. The "VYTL" simulation model developed at the Commonwealth Forestry Inst i t u t e (Oxford) was used to produce y i e l d tables for the management models. The models appropriate for Eucalyptus  grandis (Hill) Maiden had already been adequately analysed elsewhere. In terms of e f f i c i e n c y , model IC had the highest mean 3 annual increment (29.4 M /ha/year at age 20) and ID attained a mean dbh of 20 cm e a r l i e s t , at age 11. Using the Faustmann formula and assuming a constant timber price (models IA, IB and IC) and a size-responsive revenue function (models ID and IE), the optimum rotations i n years were 17 for IA, 19 for IB, 22 for IC, 27 for ID and 29 for IE. Substantial economies i n the use of land can be achieved by adopting the appropriate management strategies. Model IA was best suited for pulpwood production and IE for veneer and saw logs. For an integrated pulpwood/veneer and saw log pro-duction, model IA was most suited i f greater emphasis was on pulpwood and IC i f the emphasis was on veneer and saw logs. Based on the revenue assumptions for the determination of rotation length, model IE had the largest amount of present net worth (U.shs 3374/ha at 6% discount rate) and ID, the highest i n t e r n a l rate of return (10.50 percent). When either -v-the amount of i n i t i a l c a p i t a l outlay, or t o t a l cost com-pounded to rotation age required to produce a unit volume of wood was used to measure cost-effectiveness, model IE was the most e f f i c i e n t . Taking into account a l l these e f f i c i e n c y rankings, model IE was selected as the optimum product-oriented management strategy for veneer and saw log production, IA for pulpwood and IC f o r an integrated pulpwood/veneer and saw log pro-duction . Having i d e n t i f i e d the optimum management strategies, t h e i r implications for economic development i n terms of foreign exchange earnings, investment requirements, em-ployment and r u r a l development were assessed. The greatest opportunities for foreign exchange earnings were i n import-and product-substitution. The economic values of substitu-t i o n l o c a l l y produced softwood sawnwood for prime grade hard-woods on the domestic market and for imports of softwood 3 sawnwood were estimated to be U.shs 1400 and 727 per M respectively. Direct or seedling c r e d i t schemes f o r eucalypt woodlot farms were recommended and w i l l require a maximum investment of U.shs 1461 m i l l i o n and employ 183 thousand persons per annum. For softwood plantations, a maximum investment of U.shs 213 m i l l i o n and employing 62,000 persons annually w i l l be needed. Due to the existence of an a r t i f i c i a l surplus of land, a two-pronged strategy of forest area expansion and intensive management was considered optimal for Uganda. I t was - v i -estimated that through adoption of the optimum intensive management models, the size of the national forest estate should be increased from the current 8% to about 17% of the t o t a l land area of the country to avoid future timber s c a r c i t y . To lessen the d i s p a r i t i e s i n the standard of l i v i n g among regions, i n d u s t r i a l plantations should be located i n economically depressed areas. A land a v a i l a b i l i t y index, expressed as a function of regional rate of land u t i l i z a t i o n , carrying capacity, actual population density and r e a l per capita income was used to determine pote n t i a l s i t e s for establishing plantations. Those d i s t r i c t s with land a v a i l a b i l i t y indices below the national average were con-sidered economically depressed. They were Madi, West N i l e , Acholi (East and West), Lango, Mubende and Bunyoro, i n a decreasing order of severity. The l a s t four o f f e r greatest promise for plantation forestry. F i n a l l y , the management strategies i d e n t i f i e d i n t h i s study should provide the main basis for sound s o c i a l cost-benefit analyses of forestry projects. I t i s hoped the projects w i l l subsequently be adopted i n the next develop-ment plan of Uganda. - v i i -TABLE OF CONTENTS page ABSTRACT i i TABLE OF CONTENTS v i i LIST OF TABLES x LIST OF ILLUSTRATIONS xv LIST OF APPENDICES x v i i GLOSSARY x v i i i ACKNOWLEDGEMENTS x v i DEDICATION xxi 1.0 0 INTRODUCTION 1 1.10 Background Information 1 1.20 Problem D e f i n i t i o n '. ... 2 1.30 Objectives of the Study 8 1.31 Primary Objectives 8 1.32 Sub-objectives 8 1.40 Methodology ... 9 2.00 A REVIEW OF DEVELOPMENT TRENDS IN UGANDA.. 11 2.10 The Overall Economy ... 11 2.20 The Forestry Sector 24 2.3 0 Summary 34 3.00 FORECAST OF FUTURE CONSUMPTION OF FOREST PRODUCTS 37 3.10 Introduction ... 37 3.20 Forecasting Techniques 41 3.21 Methodologies 41 3.22 Estimation of Future „r„ Values of Independent Variables 44 3.3 0 Future Consumption of Forest Products 4 9 3.31 Fuelwood and Charcoal 4 9 3.32 Poles and Posts 57 3.33 Sawnwood and Sleepers 62 3.34 Wood-Based Panels 69 3.35 Paper and Paperboard 75 3.40 Summary 85 - v i i i -4.00 THE FOREST RESOURCE 88 4.10 Land Use i n Uganda 88 4.20 Size of the Forest Estate ... 96 4.30 The Growing Stock and Roundwood Supply t 121 4.40 Summary 133 CHAPTER NOTES • 139 5.00 INTENSIVE MANAGEMENT IN FOREST PLANTA-TIONS 140 5.10 J u s t i f i c a t i o n for Intensive Management 140 5.20 Intensive Management and Forestry 151 521 Intensive Management Defined 151 522 Intensive Management i n Plantation Forestry ... . 5.221 Introduction 5.222 Stand Establishment Phase 5.22 3 Stand Development P h c l S G • • • • • « • 5.224 Other Cultural Treat-ments 5.30 Formulation of Intensive Management Models 199 163 163 165 174 190 CHAPTER NOTES...:'- 204 6.00 DETERMINATION OF OPTIMUM ROTATION LENGTH (S) 206 6.10 Introduction 206 6.20 Factors A f f e c t i n g Rotation Length 209 6.21 Forest Ownership 219 6.22 Interest (Discount) rate ... 213 6.23 Land, Labour and Capital ... 219 6.24 Risk and Uncertainty 228 6.30 Rotation C r i t e r i a 2 31 6.40 Results and Choice of C r i t e r i o n (Criteria) 239 6.50 Summary 247 CHAPTER NOTES 249 -:±X-P a ? e 7.00 THE OPTIMUM MANAGEMENT MODEL 251 7.10 Volume and Financial Yields 251 7.20 Socio-economic Considerations ... 272 7.21 Foreign Exchange Earning A b i l i t y 272 7.22 Financial Requirement for Afforestation Programmes ... 280 7.2 3 Employment and Rural De-velopment 289 7.30 Summary 29 7 8.00 SUMMARY AND RECOMMENDATIONS 301 8.10 Summary 301 8.20 Recommendations 308 9.00 LITERATURE CITES 313 10.00 APPENDICES 330 LIST OF TABLES page TABLE 1. The Gross Domestic Product (GDP) of Uganda for the period 1957 to 1974 at 1966 prices 12 2. Economic Indicators: GDP growth rates (%), based upon previous year (Uganda) ... ... 13 3. Performance of the manufacturing sector i n Uganda (1966-74) 15 4. Uganda's balance of v i s i b l e trade for the period 1950-74 18 5. Measures of export i n s t a b i l i t y for Uganda (1950-1974) ... 21 6. Total reported employment i n Uganda 1966-74 ... 25 7. Paid employment i n Uganda: targets and actual performance ... 26 8. Contribution of forestry to the Gross Domestic Product (GDP) of Uganda 2 8 9. Ratio of exports to imports for trade i n forest products i n Uganda (1961-74) ... 30 10. Percent change i n labour force of the Uganda Forest Department ... 31 11. Employment and other economic data on forest industry i n Uganda 32 12. Revenue/Expenditure relations of the Uganda Forest Department ... 35 - x i -TABLE page 13. The population of Uganda projected to the year 2000 46 14. Uganda's GDP (at 1966 prices) projected to the year 2000 ... 48 15a. Production and consumption of fuelwood and charcoal i n Uganda 52 15b. Projection of future consumption of fuelwood and charcoal i n Uganda to the year 2000 56 16. Production, trade and consumption of poles and posts i n Uganda 61 17. Projection of future consumption of poles and posts i n Uganda to the year 2000 6 3 18. Production and consumption of and s e l f -s u f f i c i e n c y i n sawnwood for Kenya, Tanzania and Uganda (1961-74) 65 19. Sawnwood consumption by end use categories i n East A f r i c a ... 67 20. Projection of future consumption of sawnwood and sleepers i n Uganda to the year 2000 70 21. Production, consumption and s e l f - s u f f i c i e n c y i n wood-based panels for Kenya, Tanzania and Uganda (1961-74) 74 22. Projection of future consumption of wood-based panels i n Uganda to the year 2000 76 23. Per capita consumption of paper and paperboard i n selected countries 80 24. Production and consumption of and s e l f - s u f f i c i e n c y i n paper and paperboard for Kenya, Tanzania and Uganda (1961-74) 83 25. Projection of future consumption of paper and paperboard i n Uganda to the year 2000 84 26. Land use i n Uganda (1972) 91 - x i i -TABLE 27. Percentage of land within d i s t r i c t s i n Uganda attributed to various land use commitments (1971 92 28. The r e l a t i v e d i s t r i b u t i o n of ecological zones i n Uganda by d i s t r i c t groups 95 29. The progress of forest reservation i n Uganda (1932-71/72) ... 100 30. Comparative s t a t i s t i c s of forest land area in selected African countries i n 1970 105 31. Growth trends i n the size of forest estate roundwood production, population and a g r i -c u l t u r a l productivity index i n percent (1956= 100) 108 32. Forest area of Uganda i n 1971.... I l l 33. Summary of present d i s t r i b u t i o n of forests, plantations and savannah types within forestry reserves i n Uganda 112 34. Size d i s t r i b u t i o n of forestry reserves i n Uganda 114 35. An evaluation of the productivity of lands within forestry reserves i n Uganda 117 36. Summary of estimated available productive lands within savannah reserves i n Uganda ... 118 37. Summary of areas of t r o p i c a l high forests (THF) and plantation forests of Uganda 120 38. Area of softwood plantations d i s t r i b u t e d by species and age (in ha) 128 39. Available supply of roundwood for Uganda to the year 2000 134 40. Potential roundwood supply and demand to the year 2000 144 41. Veneer and saw log consumption and supply trends (Uganda) 145 42. Cost-effectiveness for P. patula Schl. Chem in Uganda ..." 16 8 - x i i i -TABLE 43. Variation of average i n t e r n a l rate of return with establishment costs for a softwood plantation on a medium s i t e i n Uganda ... ... 169 44. Influence of p r o b a b i l i t y of plantation success on the expected net worth of a Pinus patula stand on poor/medium s i t e at age 20 172 45. The influence of market, capacity and wood resource a v a i l a b i l i t y on the role of thinning... 182 46. NPK use 1975/76 in African countries consuming at l e a s t 2000 tons per annum (excluding Rhodesia and South Africa) 194 47. A summary table for the intensive management models 203 48. Progress i n planting softwoods i n Uganda 212 49. Cost estimates for the fi v e intensive manage-ment models 233 50. B i o l o g i c a l and technical rotations... ... .... 24 3 51. Land expectation (Se) values without premium for size 245 52. Land expectation (Se) values with premium for s i z e ... 246 53. D i s t r i b u t i o n of trees by diameter classes at rotation age for the fi v e intensive manage-ment models ... 252 54. Harvestable volumes at rotation age 260 55. Economies i n land u t i l i z a t i o n based on volume production 261 56. Ranking of alternatives ... 263 57. A summary of costs and returns data for i n -tensive management models IA, IB, ID and IE assuming a constant (IA,IB and IC) and a size-responsive (ID and IE) revenue 265 r x i v -TABLE page 58. Present net worth and i n t e r n a l rate of return for models IA, IB, IC, ID, and IE assuming a constant (IA, IB and IC) and size-responsive (ID and IE) revenue functions ... 266 59. A summary of costs and returns data for i n -tensive management models IA, IB, IC, ID and IE (assuming models IA, IB, IC, ID and IE (assuming a price per M3 of U.shs 17.50 for pulpwood and U.shs 35.00 for veneer and saw logs) 26 8 60. Present net worth and int e r n a l rate of return for models IA, IB, IC, ID and IE assuming a price per M 3 of U.shs 17.50 for pulpwood and U.shs 35 .00 for veneer and saw logs 269 61. Cost of producing a cubic metre of roundwood at rotation age ... 271 62. Economic values of l o c a l l y grown timber (sawlog production schedule for softwood and t r o p i c a l hardwoods) 277 63. Volume, area and f i n a n c i a l requirements for woodlot farms c r e d i t schemes i n Uganda 2 84 64. Volume, area needed and f i n a n c i a l commitment for softwood plantation programme ... 287 65. An estimate of annual labour requirement for eucalypt woodlot farms 290 66. Estimates of annual labour requirements i n a normal forest 29 2 67. Annual labour requirement for softwood af f o r e s t a t i o n 293 68. Determination of land a v a i l a b i l i t y indices for affo r e s t a t i o n 298 -xv-LIST OF ILLUSTRATIONS Figure page 1 Net and gross barter and income terms of trade for Uganda, 1951-74 ... ... ... ... ... '20 2 World paperboard production growth rates (using 1962 as base year) ... ... ... ... '78 3 Progress i n gazetting government forest estate i n Uganda ••• ••• ••* ••• ••• 101 4 Growth trends i n size of forest estate, roundwood production, population and t o t a l a g r i c u l t u r a l productivity index ... ... ... ... ... 109 5 Location of the major THF and softwood plantation areas and e x i s t i n g wood processing f a c i l i t i e s . . . 123 6 Areas i d e n t i f i e d suitable for growing eucalypts, .' • pines and cypress i n Uganda ... ... ... 129 7 I n d u s t r i a l roundwood supply for Uganda by f o r e s t categories to the year 2000 ... ... ... 135 8 The influence of intensive management on the production goal for timber ... ... ... ... 142 9 Relationship between marginal costs of wood production under area expansion and i n t e n s i f i -cation of management ... ... ... ... 1-5-4 10 Variation of output/input with technologies and techniques . - ... ... ... ... 158 11 Factor i n t e n s i t y and technical e f f i c i e n c y . . . 1.6.0 12 A schematic diagram of management operation i n forest plantations of the tropics (generalized). 164 13 Determination of optimum spacing ... ... ... 14 Variation of royalty rate with stand dbh ... 179 15 V a r i a t i o n of mean annual increment (MAI) with stand -ocvi-LIST OF ILLUSTRATIONS continued  Figure 16 Variation of mean stand DBH with age ... 17 Vari a t i o n of t o t a l volume produced with s t c i n d cicj'G 18 Dominant height and stand age relationships for the intensive management models 19 Relationship between volume (overbark) produc ed and stand age ... , . . . 20 Relationships between volume (to 10 cm top diameter) produced and stand age ... 21 Relationship between volume (to 2 0 cm top diameter) produced and stand age ... •-xy i i -LIST OF APPENDICES page Appendix I The population d i s t r i b u t i o n of Uganda 3 30 II Uganda Forest Department ad-ministrative boundaries as at 1968 331 III Growth c h a r a c t e r i s t i c s of the forestry reserve estates between 1964 and 1971 332 IV Variable y i e l d tables for i n -tensive management models IA, IB, IC, ID and IE 333 V Target costs for the establishment of softwood plantations 338 VI Stand tables by diameter classes and age for intensive management models IA, IB, IC, ID and IE ... 339 - x v i i i -G L O S S A R Y A number of abbreviations commonly used i n t h i s study are as follows: IM - intensive management; CU - cl o s e r - u t i l i z a t i o n ; THFs - t r o p i c a l high forests; GDP - Gross Domestic Product; LDC - Less Developed Country; , MDC - More Developed Country CPE - Centrally Planned Economies; GNP - Gross National Product; NMP - Net •: Material Product-i : Can $ = U.shs 8.142 -xix-ACKN0WLED6EMENTS I wish to r e g i s t e r my special thanks to Professor J.H.G. Smith who was my major professor and thesis supervisor. I am grateful for his d i r e c t i o n and guidance. Special thanks also go to members of my thesis and examination committees Drs. D. Haley, V.S. Pendakur, J.V. Thirgood, R.W. Wellwood, S.P. Ho and D.L. C o t t e l l . In t h i s regard, thanks go to Drs. J.V. Thirgood and P.L. C o t t e l l for e d i t o r i a l assistance; and Drs. D. Haley and V.S. Pendakur who apart from helping c l a r i f y some concepts, provided valuable c r i t i c i s m s . Special thanks go to The Canadian International Development Agency (CIDA) i n co-operation with the Uganda Government for the f i n a n c i a l support that made th i s study possible. The following organizations assisted at the various phases of the thesis with i n -formation and data: The Faculty of Forestry, The Uni-v e r s i t y of B r i t i s h Columbia; The Commonwealth Forestry I n s t i t u t e ; Makerere University; and the Uganda Forest , Department. I would l i k e to extend my thanks to my fellow student colleagues e s p e c i a l l y , Alphonso Casasempere, Stephen Omule, Clement Kahuki, Peter Kofoed and Rodney Beaumont for the l i v e l y discussions we had i n the course - x x -of writing the thesis. Mrs Carmen de S i l v a typed the various drafts of the thesis and I am grateful to her. F i n a l l y , I would l i k e to thank the Canadians, who wish to remain anonymous, for having made my stay i n Vancouver worthwhile; and my family who despite my long absence gave me much needed encouragement and support. -xx i -DEDICATION F i r s t l y , t h i s thesis i s dedicated to my lat e s i s t e r Jefula Acia who had the foresight to send me to school and u n s e l f i s h l y denied herself comfort for her v i s i o n . Secondly, the thesis i s dedicated to those early foresters i n Uganda who, with minimum i n -formation available, l a i d the foundation for fo r -estry with posterity i n mind and to the future sons and daughters of Uganda who s h a l l s t r i v e to uphold and develop the noble ideals of the forestry pioneers so that forests of Uganda s h a l l continue giving service to mankind i n perpetuity. -1-CHAPTER ONE 1.00 INTRODUCTION 1.10 Background Information Uganda i s a small land-locked country situated i n the central region of East A f r i c a . I t has an area of 236 thousand square kilometers. By 1969 (the l a t e s t census) the country had a population of 9.5 m i l l i o n . Based on the 1969 census, population density ranged 2 from 10 to 170 persons per Km , giving a national average of 49. The uneven d i s t r i b u t i o n i s a r e f l e c t i o n of the variations i n the share of "habitable" land and economic and s o c i a l development. A high natural rate of increase, net migration and in t e r n a l movement from one part to another characterize the population. (See population d i s t r i b u t i o n i n Appendix I ) . Approximately 20 percent of the t o t a l area of Uganda i s lake surface. Other aspects of r e l i e f are the mountains, r i v e r s and an i n t e r i o r plateau that con-t i t u t e s the major landscape element i n the country. S o i l s range from medium to highly productive, with some patches exhibiting low productivity (FAO, 1975) . Temperatures vary between a mean minimum and maximum of 16 and 30°C, respectively. Apart from -2-limited areas i n the northeast, annual r a i n f a l l exceeds 750 mm, and averages 1000 to 1250 mm over much of the country, reaching a maximum of 2000 mm i n the wettest region. The vegetation includes high a l t i t u d e moorland and heath, high and medium a l t i t u d e forests and various forms of savanna. The d i v i s i o n of Uganda into p o l i t i c a l and admin-i s t r a t i v e units (provinces and d i s t r i c t s ) has been con-stantly changing over the years. From an i n i t i a l number of 4 provinces there are now ten. This i n s t a b i l i t y of d i s t r i c t and p r o v i n c i a l boundaries has made c o l l e c t i o n of data i n great d e t a i l d i f f i c u l t . A second cause of incompleteness of data was the d r a s t i c change i n owner-ship of economic assets that took place i n 1972. Docu-mentation of this occurrence and i t s current status i s s t i l l incomplete. Therefore, some data presented i n t h i s study may be several years old. However, i t i s strongly believed that the major trends for the p r i n c i p a l economic a c t i v i t i e s have remained the same. 1.20 Problem D e f i n i t i o n Like most countries i n the tropics, Uganda belongs to a group known as "Third World", "Developing" or "Less Developed" (LDC) countries, whose common c h a r a c t e r i s t i c i s poverty (Ahuwalia, 1974; World Bank, 19 75a), or more generally, underdevelopment (Meir, 19 76). In these countries' a g r i c u l t u r a l productivity and per capita i n -comes are low (Hagen, 1952). There exists rampant open - 3 -and disguised unemployment (Lewis, 1954 ; Nurkse, 1957 ; S t i g l i t z , 1 9 6 9 ; Myint, 1 9 7 4 ) . F i n a l l y , there i s very l i t t l e research and development being carried out, and yet, as a form of investment i n LDCs, these a c t i v i t i e s have a rate of return "so high as to warrant a much larger e f f o r t " (Eckaus 1 9 6 6 ) . The lack of increased research and development a c t i v i t i e s and the high rate of population increase accentuate the unemployment problem, since the r a p i d i t y with which labour i s ab-sorbed into employment depends upon i n t e n s i t y of inno-vation and i t s labour-using bias (Fei and Ranis, 1 9 6 3 ) . In the pre-colonial era, most of the production i n Uganda was geared to the control and adaptation of nature to man's conscious, or f e l t needs. The c o l o n i a l era was the period of major al t e r a t i o n s i n the dynamics of the old society. I t included the introduction of western technology, c o l o n i a l capitalism and integration of the c o l o n i a l economy into the world economic system (Zwanenberg and King, 1 9 7 5 ) . The country adopted the export-led model of economic development with the p r i n c i p a l exports being a g r i c u l t u r a l produce. The country i s s t i l l a primary producer where peasant farmers produce both cash and subsistence crops (Myint, 1 9 7 4 ) . These crops comprise about 78 percent of t o t a l export with coffee alone accounting for -4-50 percent, and cotton, tea and other a g r i c u l t u r a l products contributing 20, 5 and 3 percent, respectively. In t o t a l , the a g r i c u l t u r a l sector generated 40 percent of the GDP (FAO, 1975). Unfortunately, the development strategy based on exports of a few a g r i c u l t u r a l products, sold i n a concentrated market, has resulted i n Uganda experiencing serious foreign exchange a v a i l a b i l i t y constraints and a worsening of the balance of payments s i t u a t i o n . "Uganda's economy i s polarised with exports consisting of raw a g r i c u l t u r a l products of low e l a s t i c i t y of demand and imports of manu-factured consumer goods of high values. Con-sequently, Uganda's capacity to increase her export earnings has not been able to match the increasing cost of imports. In e a r l i e r years Uganda enjoyed a comfortable balance of payments but i n f l a t i o n i n the ind u s t r a l i z e d nations (the source of imports) and unprecedented increased domestic demand for manufactured goods, has escalated the import b i l l and Uganda has now started to face serious balance of payments stresses". (FAO, 1975). F i n a l l y , although income inequality i n Uganda has been moderate (Ahluwalia, 19 74), the government has emphasized the importance of r u r a l development and creation of employment opportunities. These views were expressed i n the following statements: "The immediate goals i n the promotion of economic and s o c i a l j u s t i c e are:-( i i ) to bring about a s i g n i f i c a n t r i s e i n the l e v e l of material welfare i n r u r a l areas, thus reducing the d i s p a r i t y between the standard of l i v i n g i n the towns and that i n r u r a l areas. The d i s p a r i t y i s perhaps the most inequitable feature of income d i s t r i b u t i o n i n Uganda at the moment, and i t s redress i s therefore the most urgent task i n the promotion of economic and s o c i a l j u s t i c e . The r u r a l sector which harbours the bulk of the country's population also provides the main source of growth for the rest of the country. And yet the l e v e l of economic and s o c i a l welfare i n r u r a l areas continues to lag far behind that enjoyed i n -5-urban areas. This anomalous s i t u a t i o n must be corrected, not only because of i t s inherent i n -equity but also i n order to stem the massive d r i f t of the population to urban areas where they cannot a l l be absorbed into f r u i t f u l employment (The Third 5-Year Development Plan of Uganda, 1971/72 - 75/76); and creating employment opportunities. "The provision of opportunities for f u l l employment to a l l c i t i z e n s who seek i t - the elimination of involuntary unemployment - i s one of the ultimate development goals of the country Our knowledge of the present state of unemployment i n Uganda i s very incomplete. I t i s , however, quite evident that there are many individuals i n urban areas who do not have a permanent job, and that, i n the r u r a l areas, the extent of "underemployment" i s attaining alarming proportions. The eradication of involuntary unemployment requires not only f u l l employment of a l l persons currently unemployed, but also the continual absorption into gainful and ful l - t i m e employment of a l l additions to the country's labour force. The magnitude of the task i s such that the objective can only be meaningfully viewed as a long-term one". (The Third 5-Year Development Plan of Uganda 1971/72 - 74/76). To a l l e v i a t e some of the above problems, i t has been suggested that the country should s t r i v e for a more r a t i o n a l u t i l i z a t i o n of i t s natural resources. But, as suggested by UN (1970), t h i s can only be achieved when other factors such as a v a i l a b i l i t y of c a p i t a l , s k i l l e d labour force, e f f i c i e n t management, r e a l i s t i c development planning and well conceived economic p o l i c i e s are taken care of. Furthermore, according to Ahmad (1960), "The development and r a t i o n a l u t i l i z a t i o n of natural resources i n the present low-income countries of the world i s c l o s e l y t i e d to the process of economic development, which i s becoming serious p o l i t i c a l business i n these countries. Though there exists no established -6-relationship between natural resources and economic growth, i t i s increasingly re-cognized that the p o t e n t i a l welfare of a people s i g n i f i c a n t l y depends on a wise use of t h e i r fixed and renewable natural resources. Many reasons, both economic and p o l i t i c a l , support the need and desire for a r a t i o n a l u t i l i z a t i o n of resources". An emphasis on natural resource u t i l i z a t i o n for economic development of Uganda i s in cognizance of the fact, that, since the economy i s based primarily on a g r i c u l t u r e , fishing, hunting, forestry arid mining, natural resources are the staple inputs to the economic system. This study i s primarily concerned with the forestry sector. Apart from the role of forests i n conserving the environment, i t has been suggested that the forestry sector through timber production has the p o t e n t i a l to increase national output (Riihinen, 19631 Adeyoju, 1975) , earn foreign currency (Riihinen, 1969; FAO, 1970; Chatterjee, 1976) and contribute to employment and r u r a l development (Kromm, 1972; Seth, 1973; Singh, 1973; R e i l l y , 1974; King, 1975a; F i e l d and Convery, 1976). However, for a given country the actual contribution of the forestry sector to economic development w i l l depend primarily on the existence or establishment of the forest resource, and a sound forest p o l i c y . In Uganda there are two sources of wood supply, natural and man-made forests. The natural ( t r o p i c a l high) forests have low y i e l d s of merchantable wood, an - 7 -admixture of species whose wood properties are imperfectly understood, c h a r a c t e r i s t i c a l l y long rotations and complex ecological systems that complicate management; and are limited to ce r t a i n parts of the country. Based on the economically f e a s i b l e y i e l d that could be obtained from the t r o p i c a l high forests, Dawkins (1958) concluded that: " I t i s therefore evident that annual acre y i e l d s of saw-timber exceeding sixt y cubic feet (ca. 4 m3/ha) are u n l i k e l y to be achieved extensively by the THF (t r o p i c a l high forests) even under the best of management. If greater y i e l d s are desired, we must f i n d or introduce species with smaller crowns and greater tolerance of crowding". : According to FAO (19 6 7a), the most important c h a r a c t e r i s t i c s of forests for "economic" wood production are: 1. S u i t a b i l i t y of the wood produced for the end-purposes proposed. 2. Homogeneity of material. 3. Large volumes per unit area, allowing intensive working and short logging hauls. 4. A c c e s s i b i l i t y i n r e l a t i o n to markets. If continuing production over more than a single rotation i s intended, additional desirable c h a r a c t e r i s t i c s are: 5. S t a b i l i t y i n land-usage po l i c y , e.g., through the creation of state-owned.forest reserves, or by the leg a l dedication of private land to forestry. 6. The existence of a growing stock with a potential for rapid increment i n terms of merchantable volume per unit area. - 8 -These c r i t e r i a further discourage exclusive re-liance on t r o p i c a l high forests as a source of wood supply i n continuity, but encourage establishment of forest plantations. In addition, although Uganda i s situated i n the t r o p i c s , the main vegetation type i s not forests but savanna woodland/grassland. The potential of these s i t e s for wood production can only come from plantation forestry, since savanna woodlands are sparsely stocked, low y i e l d i n g and most often have suffered from over-cutting (FAO, 19 74) . Furthermore, the population i n the savanna region i s poor and can hardly a f f o r d the additional cost of transporting wood to the region. Therefore, because of the reasons stated above, forest plantations have a great p o t e n t i a l i n Uganda and w i l l be discussed i n further d e t a i l i n t h i s study. 1.30 Objectives of the Study 1.31 Primary Objective To investigate methods to increase the economic and s o c i a l contribution of the forestry sector to the economy of Uganda. 1.32 Sub-objecfives a) To recommend e f f i c i e n t management regimes for a v a r i e t y of plantation-based i n d u s t r i a l forest developments, and b) To recommend where plantation de-velopment should occur. - 9 -1.40 Methodology To evaluate the p o s s i b i l i t i e s of achieving the objectives stated above, the following procedure w i l l be followed. In Chapter Two, a b r i e f review of the past trends of economic development i n general and that pertaining to the forestry sector w i l l be pre-sented. Chapter Three i s concerned with estimation of future consumption of the main forest products groups. The methodology w i l l involve time-series analysis of past consumption trends. The forecasts w i l l represent possible levels of future domestic consumption. Domestic consumption of, and opportunities for exports of wood products require i n part that a forest resource e x i s t s or i s developed. Therefore, i n Chapter Four, a discussion on the extent of the forest estate and i t s expected y i e l d of roundwood based on current management practices w i l l be undertaken. A forecast of roundwood production w i l l constitute the domestic supply. To j u s t i f y i n t e n s i f i c a t i o n of forest management i t i s necessary to show that the projections of demand for timber exceed those of the supply. Chapter Five deals with j u s t i f i c a t i o n for and discussion on the concept of intensive management. In the same Chapter, - 1 0 -p r o d u c t - o r i e n t e d • i n t e n s i v e m a n a g e m e n t m o d e l s w i l l b e f o r m u l a t e d . T h e f i n a n c i a l c o n s e q u e n c e s o f f o r e s t o p e r a t i o n s a r e t o a l a r g e e x t e n t g o v e r n e d b y t h e r o t a t i o n l e n g t h a d o p t e d . T h e p r e s e n t r o t a t i o n l e n g t h o f 20 y e a r s f o r s o f t w o o d p l a n t a t i o n s w a s a r r i v e d a t u s i n g t h e c u r r e n t l e v e l s o f m a n a g e m e n t . T h e s e a r e e x p e c t e d t o c h a n g e f o r t h e i n t e n s i v e m a n a g e m e n t m o d e l s . T h e r e f o r e C h a p t e r S i x w i l l d e a l w i t h a n a n a l y s i s o f t h e f a c t o r s i n f l u e n c i n g a n d s e l e c t i o n o f t h e c r i t e r i o n f o r d e t e r -m i n i n g o p t i m u m r o t a t i o n l e n g t h . C h a p t e r S e v e n w i l l i n v o l v e a n a n a l y s i s o f t h e v o l u m e a n d f i n a n c i a l y i e l d s o f t h e i n t e n s i v e m a n a g e -m e n t m o d e l s , a n d t h i s w i l l b e c o m p a r e d w i t h t h e c u r r e n t p r a c t i c e . T h e a b i l i t y o f t h e s e m o d e l s t o s u p p l y t i m b e r o f g i v e n q u a l i t y r e q u i r e m e n t s a n d f u l f i l t h e o b j e c t i v e s o f s o c i o - e c o n o m i c d e v e l o p m e n t c o n s t i t u t e t h e l a s t p a r t o f t h i s C h a p t e r . C o n c l u s i o n s a n d r e c o m m e n d a t i o n s w i l l b e p r e s e n t e d i n C h a p t e r E i g h t . I t i s h o p e d t h a t , t h i s s t u d y w i l l c o n t r i b u t e t o t h e a d o p t i o n o f o p t i m a l p r o d u c t - o r i e n t e d m a n a g e m e n t p r a c t i c e s f o r f o r e s t p l a n t a t i o n s i n U g a n d a a n d t h a t f o r e s t p l a n t a t i o n s w i l l c o n t r i b u t e s u s s t a n -t i a l l y t o t h e e c o n o m i c d e v e l o p m e n t o f t h e c o u n t r y . -11-CHAPTER TWO 2.00 A REVIEW OF DEVELOPMENT TRENDS IN UGANDA 2.10 The Overall Economy Economic development may be defined as follows: "the process whereby the r e a l per capita income of a country increases over a long  period of time - subject to the s t i p u l a t i o n s that the number below an "absolute poverty l i n e " does not increase, and that the d i s t r i -bution of income does not become more unequal" (Meir, 19 76) .- .. To achieve economic development, governments i n Uganda have consistently intervened i n the a l l o c a t i o n of scarce re-sources, f i r s t as entrepreneurs and second because of grave imperfections i n the market place. This has been achieved through preparation of medium-term development plans. On the other hand, studies for several A f r i c a n countries have shown that i f not well formulated these plans could themselves become "constraints" (Shen, 1975). Development plans i n Uganda date as far back as 19 36. But according to Vente (1970), "true" plans as understood i n today's sense began i n 1962. There have been some gains through the mechanism of planning for development. However, evidence shows the performance of the economy has been below optimum. In terms of national output (Gross Domestic Product GDP) , the '60s did record high growth rates (especially from 1963 to 1966). However, o v e r a l l achievements i n growth rates were not spectacular (Table 1). For example, (Table 2) - 1 2 -TABLE 1 The Gross Domestic Product (GDP) of Uganda for the Period 1957 to 1974 at 1966 Prices. YEAR GROSS DOMESTIC PRODUCT ANNUAL GROWTH RATE TOTAL1 PER CAPITA2 TOTAL PER.CAPITA (million US $) . ($) (• 1957 335 47. .72 1958 342 47. .50 +2. .08 - 0 . .46 1959 351 47. .49 +2. .63 -0 . .02 1960 337 44. .46 - 3 . .99 - 0 . .06 1961 398 51. .22 +18 . .10 +15. .20 1962 364 45. .61 - 8 . .54 - 1 0 . .95 1963 402 49. .14 +10. .44 + 7. .74 1964 491 58 . .52 +22. .14 +19. .09 1965 632 73. .49 +28. .72 +25. .58 1966 857 97. .28 + 35. . 60 + 32. .37 19 67 881 97, .46 +2. .80 + 0, .19 1968 904 97. .52 +2, .61 +0. .06 1969 995 101. .74 +10. .07 +4 . . 33 1970 1019 101, .39 + 2, .41 - 0 . .35 1971 1049 104, .38 +2. .94 +2. .94 1972 1077 104, .26 + 2, .67 - 0 , .11 1973 1098 103, .39 +1. .95 - 0 . .83 1974 1041 95, .33 - 5 , .19 - 7 . .80 Source: 1 2 - FAO (1975) population derived from USDA (19 76) . -13-T a b l e \2 Economic I n d i c a t o r s : GDP Growth R a t e s (%), Based Upon P r e v i o u s Year (Uganda) CATEGORY A. MONETARY ECONOMY 19 71 1972 1973 1974 Ave r a g i 1. A g r i c u l t u r e -8. 9 9.1 5.3 -11.6 1.6 2. C o t t o n g r o w i n g , c o f f e e c u r i n g , t e a and s u g a r m a n u f a c t u r e -12. 4 -4.0 -3.2 -18 . 5 -24.2 3. F o r e s t r y , f i s h i n g and h u n t i n g 13. 6 7.6 3.0 2.0 13.0 4 . M i n i n g and q u a r r y i n g -6 . 7 -9.9 -28.0 -4.2 -37.'8 5. M a n u f a c t u r e o f f o o d p r o d u c t s •r7 . 0 18.9 -9 . 5 -8.8 -1.8 6 . M i s c e l l a n e o u s manu-f a c t u r i n g 5. 4 0.0 -5.8 2.9 -3.5 7. E l e c t r i c i t y 8 . 7 0.0 0. 0 -2.0 -3.0 8. C o n s t r u c t i o n 2 . 2 -18 .1 -13 . 0 16.4 -17.0 9. Commerce 2. 7 -1.0 .-12.2 -2.4 -23.2 10. T r a n s p o r t and communi-c a t i o n s 17. 0 0.3 -10.2 6.4 -1.9 11. Government 26. 6 10.7 1.1 5.8 18.5 12. M i s c e l l a n e o u s s e r v i c e s 4 . 4 6.1 -8.4 -7.6 -10.1 13. Rents 17. 7 -11.8 -8 . 3 -8.7 -11.4 A v e r a g e Monetary Economy 2. 2 1.0 -3.1 -3.8 -4.9 B. NON--MONETARY ECONOMY 1. A g r i c u l t u r e 2. 5 6.7 2.3 1.9 11.2 2. F o r e s t r y , f i s h i n g and h u n t i n g '4. 5 3.8 .3.1 3.6 10.8 3 . C o n s t r u c t i o n 6. 6 0.0 0.0 3.0 6.3 4 . Owner-occupied d w e l l i n g s 4 . 1 2.8 1.5 2.6 7.1 A v e r a g e Non-Monetary Economy 2. 9 6.0 2.2 2.1 10. 7 Av e r a g e Growth o f GDP 2 . 4 3.2 -1.5 -1.9 -0.2 S o u r c e : FAO (1975) shows that i n the Third Plan period, the monetary sector recorded a negative growth rate compared to a target of posi t i v e 5.6 percent. During the period 1966 to 1 9 7 0 , t o t a l manufacturing grew at a rate of 5.8 percent compared to a target rate of 1 0 . 0 percent, and tthe achievement worsened during the Third Plan (Table 3 ). The desirable composition of the GDP was not achieved e i t h e r . Some of the factors that contributed to the sub-optimal performance were the country's share of the global i n f l a t i o n a r y trends, lack of s k i l l and managerial competence and changes i n ownership of business enterprises. The theory of international trade as an"engine" of economic development has been extensively debated and written about, both i n favour (Haberler, 1 9 5 8 ; Cairncross, 1962 ; Meir, 1976 ; Myint, 1974) and against (Myrdal, 1 9 5 6 ; Prebisch,1 9 6 4 ) . The c r i t i c s of foreign trade as a primum mobile i n the economic development of LDCs have put forward-, three main arguments. F i r s t l y , the development of the export sector by foreign c a p i t a l has created "dual economies" i n which production has been export-biased and the r e s u l t i n g pattern of resource u t i l i z a t i o n has subsequently deterred development. Secondly, trade has impeded development through the international demonstration of higher consumption standards i n MDCs, the "demonstration e f f e c t " . F i n a l l y , international market forces have transferred income from poor to r i c h nations through the deterioration i n the TABLE 3 Performance of the Manufacturing Sector i n Uganda (1966-1974) Crop processing* Manufacture of goods Miscellaneous manufact-uring TOTAL manu-facturing Annual •Averaqe Rate(1966-70) l1966 19.67 1968 1969 1970 Growth Plan 1971 1972 1973 1974. Annual Growth Rate ( -million shillings-) . ( S E ^ - ^ E ^ ) ( - — M l l i o n shillings-) ( - ^ u a l % , 96 95 9.4 113 113 +4. 2 +5. 6 99 95 92 75 -8.8 49 48 56 65 66 +7. 8 +10. 8 57 63 57 52 -3.0 359 378 393 426 452 +5. 9 +12 . 6 482 482 454 467 -1.0 504 521 543 604 631 +5. 8 +10. 0 638 640 603 594 -2.4 I I * covers coffee-curing, cotton ginning, and sugar refining. SOURCE: (1) Third Five-Year Development Plan of Uganda (covers period 1966-70 and growth rates). (2) FAO (1975) for 1971 to 1974 -16-"terms of trade" of LDCs. Advocates of international trade as an "engine" of economic development maintain that international trade may be advantageous through i t s d i r e c t (foreign exchange earning) and i n d i r e c t (dynamic) benefits. According to Haberler (1958), the l a t t e r include: provision of materials, a means and vehicle for transmission of tech-n i c a l know-how, s k i l l s and managerial talents; a vehicle for international movement of c a p i t a l , e s p e c i a l l y from MDCs to LDCs; and i t i s the best anti-monopoly p o l i c y . Furthermore, i t i s argued, there i s nothing necessarily regrettable about dependence on foreign trade. Although foreign trade may help transform a subsistence economy into a monetary one, i t does not, and cannot, by i t s e l f do more than t h i s , because other important factors should be optimized (Cairncross, 1962) to increase the "carry over" e f f e c t s of proceeds from trade (Myint, 1974) . Due to Uganda's heavy reliance on exports to obtain foreign currency needed for imports, the country cannot i n the foreseeable future do without international trade. On the other hand, arguments can be advanced against such an "over-dependency" when the nature of the export com-modities i s considered (Laumer, 1970) . The development of a dual economy as a r e s u l t of foreign c a p i t a l inflow into Uganda has been of minor import-ance. European settlement and subsequent development of a plantation economy f a i l e d p r i n c i p a l l y through the collapse -17-of coffee prices i n 1920-22 (IBRD, 1962) . According to Helleiner (1966) , there i s evidence to show that export earnings from peasant-produced primary products are unstable. Where exports represent a large part of the national output as i n Uganda, -evaluation of the performance of the export sector with respect to s i g n i f i c a n t fluctuations has important implications. A given LDC 1s import capacity for c a p i t a l goods and equipment, essential for the development process, i s determined p r i n c i p a l l y by export earnings. Unpredictable changes i n export earnings may introduce uncertainties into investment programmes and,therefore, retard economic growth. Government tax revenues are governed to a large extent by exports. Increases i n income induced by upward changes i n export proceeds, may increase: i n f l a t i o n a r y tendencies by r a i s i n g demand for both domestically produced and imported consumer goods, the supply of which tends to be price i n e l a s t i c i n the short run (Love, 1975). F i n a l l y , since export;:crops are grown by peasant farmers, lower cash incomes may cause severe hardships and/or a s h i f t i n t h e i r production function, favouring food crops i n high demand on the domestic market. The exact reaction w i l l depend on alternatives available, and the degree of risk-aversion practiced by1;the peasant producers (Brainard and Cooper, 1970) . Table 4 shows that Uganda's balance of v i s i b l e trade has been po s i t i v e over the period 1952 to 1974. However, - 1 8 -TABLE 4 Uganda's B a l a n c e o f V i s i b l e T rade F o r t h e ' P e r i o d 1950-74* Y e a r E x p o r t s (E) Imports(M) B a l a n c e o f Trade ( Growth Rate M i l l i o n Growth Rate U.S. D o l l a r s ) (%) (%) 1950 80 . 0 43.0 + 37.8 1951 132-.9 + 66 . 12 61.9 ' + 43.95 + 71.0 1952 133.6 + '0. 53 68 . 0 + 9.8 5 + 65.6 1953 94.2 - 29 . 49 71. 8 + 5.59 + 22.4 1954 114 . 8 + 21. 87 70 .6 - 1.67 + 19.7 1955 118 .4 + 3.. .14 95.1 + 34 . 70 + 23.3 1956 116 .2 - 1. 86 78 . 7 - 17.25 + 37.5 1957 131.2 + 12 . 91 80.8 + 2 .67 + 50.4 1958 129.9 - 0. 99 75.6 - 6.44 + 54.3 1959 121.0 - 6 . 85 71. 5 - 5.42 + 49.5 1960 120.1 - 0. 74 72.8 + 1. 82 + 47.3 1961 115. 5 - 3. 83 74 . 3 2.06 + 41. 2 1962 114.7 - 0. 69 73.4 - 1.21 + 41.3 1963 152 .6 + 33. 04 86.5 + •17. 85 + 66.1 1964 186 .1 + 21. 95 91.7 + 6 . 01 + 94.4 1965 179.1 - 3. 76 114 . 4 + 24.75 + 64.7 1966 187.9 + 4 . 91 120 .1 + 4 .98 + 67.8 1967 183.5 - 2 . 34 115.6 - 3.75 + 67.9 1968 185. 8 + 1. 25 122.6 + 6 .06 + 63.2 1969 197. 7 + 6 . 40 127. 3 + 3.83 + 70.4 1970 248.1 + 25. 49 121.1 + 4 .87 +127.0 1971 235 .2 - 5. 20 190.7 + 57.47 + 44.5 1972 260.5 + 10 . 76 113. 8 - 40 . 33 +146 .7 1973 299.9 + 15. 12 . 97.6 - 14 . 24 +202.3 1974 315.3 + .5. •14 132.0 + 35. 25 +183.3 (a) = a l l v i s i b l e b a l a n c e o f t r a d e f i g u r e s p o s i t i v e u n l e s s o t h e r w i s e i n d i c a t e d . * e x c l u d e s t r a d e w i t h Kenya and T a n z a n i a SOURCE: U n i t e d N a t i o n s (1976) Yearbook o f I n t e r n a t i o n a l T r ade. -19-the f a c t that the country i s facing serious balance of payments problems (FAO, 1975), suggests heavy expenditure on i n v i s i b l e imports: and those imports from Kenya and Tanzania which were excluded from the data i n Table 4. As a measure of Uganda's capacity to import, the "income terms of trade", which i s a combination of net and gross barter terms of trade; was calculated. Figure 1 shows that up to 1960, the country had a favourable capacity to import and thereafter experienced a declining trend with short-term fluetuations. Table 5 shows a measure of i n s t a b i l i t y of export earnings for t o t a l export, i n d i v i d u a l and combined major cash crops, and t o t a l cash crops including forest products. I n s t a b i l i t y i n t h i s case i s measured as the deviation of export value i n a given year from a 5-year moving average and expressed as a percentage of the higher of the two values. The mean of the deviations of t o t a l export earnings for Uganda was about 6 percent with a maximum and minimum of 20.7 and 0.1 percent, respectively. In d u a l i s t i c or p l u r a l i s t i c economies, c h a r a c t e r i s t i c of most LDCs, employment and r u r a l development are i n t e r -related. Employment of the r u s t i c population i s an i n t e g r a l part of r u r a l development. Most countries i n eastern A f r i c a have drawn comprehensive plans to encourage employment and/or r u r a l development. According to FAO (1975), 80 percent of the population i n Uganda derive th e i r l i v e l i h o o d s from agr i c u l t u r e . Ten F i g u r e 1. Net and G r o s s B a r t e r and Income Terms of Trade f o r Uganda, 1951-1974 . Source o f d a t a : UN I n t e r n a t i o n a l Trade Yearbook (1976) -21-TABLE 5 Measures o f E x p o r t I n s t a b i l i t y f o r Uganda (1950-1974) TOTAL EXPORTS Y e a r Volume (A) . 5-Year M o v i n g A v e r a g e (B) D e v i a t i o n 3 ( m i l l i o n US •$ ) % 1950 80.0 1951 132.9 1952 133.6 111.1 16.8 1953 94.2 118 . 8 20.7 1954 114 .8 115.4 0.5 1955 118.4 115 . 0 2.9 1956 116.2 122.1 4 . 8 1957 131.2 123. 3 6.0 1958 129.9 123.7 4 . 8 1959 121.0 123. 5 2 . 0 1960 120.1 120.2 0.1 1961 115 . 5 • 124.8 7.5 1962 114 . 7 137.8 16 . 8 1963 152.6 149 .6 2.0 1964 186 .1 164.1 11.8 1965 179.1 177.8 0 . 7 1966 187.9 184 . 5 1.8 1967 183.5 186 . 8 1.8 1968 185.8 200.6 7.4 1969 197.7 210.1 5.9 1970 248 .1 225. 5 9.1 1971 235.2 248.3 5.3 1972 260 .5 271.8 4 . 2 19 73 299.9 1974 315.3 a - d e v i a t i o n worked as p e r c e n t o f t h e h i g h e r d f t h e two v a l u e s . S o u r c e : 1. UN Yearbook o f I n t e r n a t i o n a l T r a d e . -22-TABLE 5 c o n t i n u e d . . . . - • 7y — • COFFEE COTTON TEA % Devia- ' % Devia-A ' • B • t i o n A B t i o n A B % Deviat 1952 247 599 6 1953 231 336 7 1954 270 293 7.9 418 413 1.2 19 14 . 2 25. 3 1955 403 330 18.1 328 364 9 . 9 21 17. 4 17.1 1956 314 367 14.4 386 ' 369 4.4 18 20. 0 10.0 1957 432 388 10.2 350 347 0.9 22 21. 0 4.5 1958 417 375 10.1 363 341 6.1 20 22. 6 11. 5 1959 374 369 1.3 309 331 6.6 24 24 . 8 3.2 196 0 340 363 6.3 298 294 1.3 29 28. 4 2.1 1961 280 388 27.8 334 279 16.5 29 32. 6 11. 0 1962 404 455 11.2 166 280 . 40.7 40 36. 6 8 . 5 1963 544 509 6.4 287 2 88 0.3 41 40. 4 1.5 1964 708 592 16.4 317 282 11.0 44 47. 2 6.8 1965 608 650 6.5 335 310 7.5 48 53. 2 9.8 1966 696 684 1.7 307 312 1.6 . 63 59 . 8 5.1 1967 692 698 0.9 303 298 1.7 70 69. 6 0.6 1968 715 779 8.2 296 302 2 . 0 74 79 . 0 6.3 1969 780 837 6.8 251 311 19 . 3 93 85. 4 8.2 1970 1014 927 8.9 351 324 7.7 95 96 . 6 1.7 1971 982 1033 4.9 352 332 5.7 9 5 103. 6 8.3 1972 1128 1204 6 . 3 368 336 8 . 7 126 107. 0 15.1 1973 1262 1287 1.9 336 308 8.3 109 112 . 2 2.9 1974 1635 273 110 1975 1427 213 121 A - e x p o r t volume i n a g i v e n y e a r B - a 5-year p l a n moving a v e r a g e SOURCE:: 2) IMF (19 77) 3) FAO ( 1 9 7 5 ) . F o r e s t P r o d u c t s Y e a r Book, 1974. -23-TABLE 5 c o n t i n u e d , . . . Y e a r C o f f e e , C o t t o n 9 and Tea" C r o p s + F o r e s t P r o d u c t s A B % D e v i a t i o n A B % D e v i a t i o n 1952 852 1953 574 1954 707 721 1.9 1955 752 711 5.5 1956 718 756 5.0 1957 804 756 6 . 0 1958 800 739 7.6 1959 707 724 2 . 3 • 1960 667 685 2.6 1961 643 700 8.1 649 1962 610 772 21. 0 614 1963 872 837 4.0 875 841 379 1964 1069 922 13.8 1073 925 13.8 1965 991 1013 2.2 995 1017 2.2 1966 1066 1055 1.0 1070 1060 0.9 1967 1065 1066 0.1 1070 1072 0.2 1968 1085 1160 6.5 1091 1167 6.5 1969 ' 1124 1232 8.8 1132 1239 8.6 1970 1460 1344 7.9 1470 1350 8.2 1971 1428 1468 2 . 7 1432 1474 2 . 8 1972 1622 1647 1.5 1626 1652 1.6 1973 ' 1707 1707 0.0 1710 1974 2018 2021 1975 1761 A - e x p o r t volume i n a . g i v e n y e a r B - a 5-year moving a v e r a g e -24-percent earned t h e i r l i v i n g p a r t l y in. aagriculture .:and p a r t l y i n wage employment and/or r u r a l trade. Due to the aversity of school leavers to agricult u r e , and the high f r u r a l and urban wage d i f f e r e n t i a l , those between the ages 16 to 34 constitute over 50 percent of t o t a l rural-urban migration. This,therefore, deprives the r u r a l sector of the most active and productive portion of the population. The 1969 population census estimated the active labour force at 2.5 to 3.5 m i l l i o n . From Table 6, the number of those g a i n f u l l y employed increased from 246,029 i n 1966 to 354,688 i n 1974. However, the rate of increase i n wage employment slowed down and reached a l e v e l below the target anticipated i n the Third Plan. The number engaged in paid employment constituted 3 percent of the t o t a l population or 12 percent of active population, emphasizing the dominant role of the primary sector (FAO, 1975) . Sectoral composition of employment for the Third: Plan i s not avai l a b l e . Based on performance i n the Second Plan, Table 7 shows the great v a r i a t i o n i n achievement of employment objectives by sectors. The growth rates of employment i n agriculture, forestry, f i s h i n g , hunting and manufacturing sectors were substantially below target. 2.20 The Forestry Sector Since forests constitute a basic natural resource that can be mobilized for accelerated economic development i n an LDC (Enabor, 1976), they assume a special s i g n i f i c a n c e . The importance of natural resources as a vehicle of economic Year TABLE .6 T o t a l Reported Employment In Uganda 1966-74 S E C T O R Private Public Number-Total 1966 154285 91,774 246,029 1970 183537 128,815 312,352 1971 190508 134,759 324,759 1972 180662 149,105 329,767 1973 164328 183,975 348,303 1974 163679 191,009 354,688 ANNUAL RATE OF GROWTH Private Public Total (-5.00 1.33 3.80 -5.17 -9.04 -0.39 0.34 11.63 4.61 10.65 5.62 1.83 0.17 5.89 3.97 1.54 5.62 1.83 AVERAGE WAGE. RATES Amount Increase (U shs) 3620 4258 . 4259 4410 4424 4421 (%) 6.3 7.5 0.0 3.65 0.3 -0.1 i U l I SOURCE: FAO (19 75). TABLE 7 Paid Employment i n Uganda: Target and Actual Performance: Plan target Percentage for increased of target Actual level ^ 1 Actual increase/1 employments in fir s t 4 years of the Agric. Forestry,-fish-ing & hunting Mining & Quarrying Manufacturing . Construction Commerce Transport & Communi-cations Government Admin-istrations /4 Services 1966 52.9 6.4 42.7 29.2 14.2 9.8 35.7 55.1 1970 54.9 7.9 54.0 47.7 14.3 12.6 45.1 75.9 1966-70 •1000 "jobs-2.0 1.5 11.3 18.5 0.1 2.8 9.4 20.8/5 1966-71 23 1 19 12 5 10 12/6 Plan. Q, *5 9 150 59 154 2 93 94 173 TOTAL 246.0 312.4 66.4 85 78 1. Official data 2. Adjusted second Plan data 3. Including crop processing 4. Excludes government education and health services, which are covered in the "Services" sector. 5. Coverage excludes domestic servants 6. Coverage includes domestic servants SOURCE: Third Five-Year Dev. Plan of Uganda (1971/72-75/76); p. 84. -27-development i s equalled only by the complexities of t h e i r manipulation (Ahmad, 1960). However, the p r i n c i p a l c r i t e r i o n for a natural resource i s i t s "potential u s a b i l i t y " . Resources which are now only potential but could be exploited i f c e r t a i n conditions were met, constitute developable resources. In addition to other factors considered below, the importance of forestry to the economy of Uganda may be expressed i n terms of i t s contribution to GDP. This does not i n any way minimize the major role forestry plays i n conservation and protection of the environment. If the value of t h i s l a t t e r role was quantified and added to the rest, i t could contradict the current conservative estimates of the sector. Based on data available, forestry's t o t a l contribution (including both the monetary and subsistence sectors based on 1966 prices) to the GDP of Uganda i n 1970 was 2.1 percent and had not varied much during the previous f i v e years. A larger portion of t h i s contribution was i n the subsistence sector (Table 8) . From 1966 to 1970, the value of t h i s contribution increased from 128.5 to 157.4 m i l l i o n s h i l l i n g s , representing an average annual compound growth rate of 4.1 percent, well i n excess of the natural rate of increase of the population. These values are under-estimates even for the quantifiable aspects of the sector's contribution. F i r s t l y , the forest provides the raw material for charcoal production which i s the basic household fuel i n urban areas and i t i s TABLE 8 : Contribution of Forestry to the Gross Domestic Product •''(GPD) - of Uganda. Year 1965 Monetary Sector Subsistence Sector 4.1 124.4 1966 1967 1968 1969 -million s h i l l i n g s at 1966 prices-3.8 133.0 3.8 136.9 Total 128.5 136.8 140.7 Total GDP 5,787.0 6,119.0 6,296.0 % of GDP 2.1 2.2 2.2 5.0 142.1 147.1 6.459.0 2.2 5.4 146 .1 151.5 7,105.0 2.1 1970 5.8 151.6 157.4 7,326.0 2.1 i ''co I Source: Lockwood Consultants Ltd. (1971). estimated that 5 m i l l i o n s h i l l i n g s are spent annually i n the purchase of t h i s f u e l . Unfortunately>this was not recorded i n Uganda's national accounts for the monetary sector (Lockwood Consultants Ltd., 1971). Secondly, other i n d i r e c t benefits such as external economies (in t e r - s e c t o r a l linkages) were ignored. The volume of Uganda's imports of forest products has greatly expanded since 1961, while exports declined. A r a t i o of exports to imports greater than one, was achieved i n 1961,and the preceding years. By 1974, the value of exports compared to imports was almost n e g l i g i b l e . See Table 9;. The greatest contribution to the import b i l l was paper and paperboard. The volume of exports of sawnwood was far i n excess of imports. This i s not sur-p r i s i n g since the early foresters emphasized sawnwood production,,; and did l i t t l e evaluation of the consequences of increased consumption for other forest products. Table 10 shows not only a very small number of persons employed i n forest management but that the number fluctuated a great deal. Therefore, i t can safely be concluded that forestry i n Uganda does provide r u r a l employment but at a very i n s i g n i f i c a n t and unstable l e v e l . Forest industries employed over 10 percent of the labour force engaged i n manufacturing ( Table ' 11 .) . More labour was employed per unit of gross output i n the forest industries sector compared to the average for a l l manufacturing. The forest industries are thus labour— -30-TABLE 9 . Ratio: . of Exports to Imports for Trade i n Forest Products i n Uganda (1961-74) Year Exports Imports Exports/Imports (%) ( IQOO of U.S. d o l l a r s ) 1961 789 678 116 62 513 719 71 63 415 808 51 64 510 983 52 65 500 1582 32 66 575 1948 30 67 760 2691 28 68 848 5233 16 69 1065 6196 17 1970 1342 3556 38 71 575 5209 11 72 568 2651 21 73 413 3149 13 74 380 7058 5 Source: FAO (19 75) Yearbook of Forest Products 1974. -31-TAJ3LE 10 Percent Changes i n Labour Force of the Uganda Forest Department Year Labour Force Percent Change (number) (.%.)'. 1946 2268 — 47 2729 +20.3 48 2764 + 1.3 49 (2764) 0.0 1950 2703 - 2.2 51 2762 + 2.2 52 2136 -22.7 53 3163 +48.1 54 3449 + 9.0 55 3384 - 1.9 56 3399 + 0.4 57 3254 - 4.3 58 4023 +23.6 59/60 3386 -15.8 1960/61 2832 -16.4 61/62 2813 - 7.0 62/63 2328 -17.2 6 3/6 4 2341 + 6.0 ( ) an estimate Source: Uganda Forest Department Annual Reports 1946-68. -32-TABLE 11 Employment and Other Economic Data on Forest Industry In Uganda Employment (Number) % of manufacturing Gross output (million s h i l l i n g ) % of manufacturing Value added i n factor prices ( m i l l i o n s h i l l i n g ) 26.89 % of manufacturing Gross Capital formation (million s h i l l i n g ) % of manufacturing Per Man-year employed 1. Gross output ( s h i l l i n g s ) Forest industry a l l manufacturing 2. Value added ( s h i l l i n g s ) Forest industry a l l manufacturing 3. Gross c a p i t a l formation (million s h i l l i n g ) Forest industry a l l manufacturing 196 9 1971 5137 5092 11.35 10.75 70.6 96.7 3.28 3.89 32.88 6 .05 6.27 4.13 0.51 3.95 0.65 13743 19881 47613 52547 52 35 6457 9819 11073 804 100 2312 1670 Source: United Nations (1974) . -33-intensive. -This conforms to the observation made by Lockwood Consultants Ltd. (1971) that "forest based industries are labour- intensive and are second only to the t e x t i l e industry". It also agrees with the si t u a t i o n i n Nigeria where forest industries ranked f i r s t i n i n d u s t r i a l employment i n 1963 (Adeyoju, 1975). Based on the current labour-intensive forest industry, encouragement of expansions i n i t does .have the scope to create more jobs. This w i l l , however, depend on the extent to which the industry i s made ca p i t a l - i n t e n s i v e i n future. Pulp and paper m i l l s are highly c a p i t a l inten-sive while,on the average, sawmills are the l e a s t . Obviously, production cannot be lim i t e d to labour intensive in-dustries. "There are linkages among industries, and one labour-intensive industry may require connected a c t i v i t i e s that are not quite so labour— intensive. One has to take the picture as a whole"(Corea, 1977) . In other words an even highly sophisticated c a p i t a l - i n t e n s i v e industry can have labour-intensive side e f f e c t s . Maximizing the employment prospects of the forestry sector requires i d e n t i f y i n g the appropriate production mix. A f a i r amount of success has been achieved i n t r a i n i n g and recruitment. Currently, there exists a professional schooloof forestry at Makerere University and a technical f o r e s t r y ; college (Nyabyeya Forest College). A l l d i s t r i c t s forest o f f i c e r s are profession^ials.. A s t r i k i n g feature i s that the size of the administrative structure i s not related -34-to the amount of work to be done, but rather i s de-termined by p o l i t i c a l and administrative boundaries. Therefore, so long as the number of d i s t r i c t s keeps changing, so w i l l the size of the administrative s t a f f . Consequently t h i s makes administration extremely ex-pensive as i s shown by the revenue/expenditure analysis i n Table 12. It may be argued that although expenditure exceeded revenue i n the majority of years, the revenue side only represents royalty paid for timber, poles and fuelwood. Other benefits of forestry do not show i n annual revenue/ expenditure statements. Associated with forestry are s o i l protection, watershed, aesthetic and recreational values. 2.30 Summary The pace of economic development i n Uganda has been below target. Growth rate of the gross domestic product has been unspectacular. There i s evidence of a long-term deterioration i n the terms of trade, elements of export i n s t a b i l i t y and a serious stress i n the balance of pay-ments. Employment and r u r a l development have been less than s a t i s f a c t o r y . The past performance of the forestry sector i n -dicated that i t s d i r e c t contribution to GDP was minimal. The sector had a low export/import r a t i o . Employment i n forest management was small and unstable. On the other -35-TABLE 12 R e v e n u e / E x p e n d i t u r e r e l a t i o n s o f t h e Uganda F o r e s t Department Y e a r Revenue ( U.shs.-E x p e n d i t u r e ) Revenue/Expei 1930 19131 16399 117 31 10667 18236 58 32 9342 16296 57 33 10467 16461 64 34 12489 17089 73 35 15078 19386 78 36 21619 20548 105 37 22821 19822 115 38 23066 21516 107 39 20509 23707 87 1940 16889 23259 73 41 25380 21954 116 42 37033 23147 160 43 51144 28281 181 44 56431 30746 184 45 62918 35308 178 46 57463 39041 147 47 44887 55664 81 48 45233 87665 52 49 50659 90373 56 1950 62351 95916 65 51 59678 121893 49 52 69840 131666 53 53 90469 139698 65 54 91459 160545 57 55/56 96283 226041 43 56/57 87913 228214 39 57/58 109576 231640 47 58/59 101324 241855 .42 59/60 105285 232532 45 1960/61 92413 232384 40 61/62 74626 244592 31 6 2/6 3 86934 260940 33 63/64 78658 273789 29 64/65 95982 325297. 30 65/66 159491 • 278850 57 66/67 174512 343228 51 67/68 200703 449681* 45 S o u r c e : Uganda F o r e s t Department, A n n u a l ' R e p o r t s (1930-1968). * an e s t i m a t e - 3 6 -h a n d , f o r e s t i n d u s t r i e s w e r e l a b o u r - i n t e n s i v e , r a n k i n g s e c o n d t o t h e t e x t i l e i n d u s t r y a n d c o n t r i b u t e d 10% o f t h e t o t a l e m p l o y m e n t i n m a n u f a c t u r i n g . T h e r e f o r e , t o c o n t r i b u t e s u b s t a n t i a l l y t o e c o n o m i c d e v e l o p m e n t i n U g a n d a , t h e f o r e s t r y s e c t o r s h o u l d be w e l l p l a n n e d . A p r e r e q u i s i t e i s t h e i d e n t i f i c a t i o n o f a p p r o p r i a t e p r o d u c t - o r i e n t e d i n t e n s i v e management m o d e l s . CHAPTER THREE 3.00 FORECAST OF FUTURE CONSUMPTION OF FOREST PRODUCTS 3.10 Introduction If Uganda were an open economy, i t should produce as much of a given commodity as i t s comparative cost advantage over others would allow, u n t i l the cost of a v a i l a b i l i t y of resources increases to a point where th i s advantage i s eliminated. In such a case, determination of the future l e v e l of consumption of forest products w i l l be of minor importance for establishing a production goal. The theory of comparative advantage i n international trade i s far from perfect and i n this chapter, the economic rationale for forecasting, and the actual forecasts of consumption of forest products i n Uganda w i l l be assessed. A key step i n any forecasting i s the selection of the "forecast period" which refers to the length of time between making a forecast and observing the true value. This period i s often a r b i t r a r i l y divided into short, medium, or long range (McKillop, 1971). To forecast how much of any commodity w i l l be required i n the future, one should i d e a l l y estimate the future supply and demand conditions for that commodity. The i n t e r s e c t i o n of these gives a forecast of actual consumption. A forecast based on a s t a t i s t i c a l r e lationship between past consumption and c e r t a i n predetermined variables gives p o t e n t i a l con-sumption. In t h i s study, past consumption, the basis for -38-estimating potential consumption, w i l l be taken to mean "apparent consumption" such that: C = P + I - E where C = apparent consumption P = production I = imports E = exports To use the relat i o n s h i p expressed above for estimating past lev e l s of consumption i n Uganda implies, that,changes i n stocks of producers and consumer agencies are excluded. Therefore, the actual past consumption l e v e l . , and even more so, forecasts into the future, should be treated with even greater caution. Despite the restrictions' discussed above, i t i s true that globally, a v i r t u a l l y i n s a t i a b l e demand for a peek at the future-- a l b e i t clouded by uncertainty -- has given r i s e to a host of longer run economic appraisals (Daly, 1963). One attitude toward long-term forecasts i s that everything about them i s so hypothetical, they cannot have any real usefulness. At the other extreme, i t i s believed, pro-jections and t h e i r use i n economic programming have put economic p o l i c y and business .management on a more s c i e n t i f i c basis. Substituting hunches by a s c i e n t i f i c a l l y determined optimum program should make for better management of in d i v i d u a l enterprises, and for a better operation of the economy as a whole (Colm, 1958) . Actually, there i s truth - i f -i n both these viewpoints, but perhaps what i s more important, i s to r e a l i z e that an economic forecast is hot an "unconditional prophecy" (Enabor, 19 71). The importance of planning as a prerequisite to formulating p o l i c i e s for economic development i n LDCs was emphasized i n Chapter Two. Change and economic growth bring economic opportunities but they also bring r i s k and uncertainties p a r t i c u l a r l y i n a society which i s character-ized by low purchasing power for v i t a l commodities. I t i s the task of planning to minimize r i s k while taking advantage of opportunities (Adeyoju, 1971). For example, development plans of Uganda have stressed the need for a high growth rate i n GDP. As noted by Nweke (1977) for Nigeria, t h i s would involve expanded investments i n education, agriculture and other key sectors. I f such investment i s sustained, i t w i l l r e s u l t i n modernization with important consequences for wood consumption. The role of forecasting potential consumption of forest products i s to e s t a b l i s h these consequences. A l t e r n a t i v e l y , we may look at forecasts as foundations for forest p o l i c y . Any attempt to formulate national forest p o l i c y would be open to severe c r i t i c i s m i f i t f a i l e d to consider the country's present and future needs for wood (Gregory, 1966). Estimation of future requirements are valuable to producers of any material, and e s p e c i a l l y im-portant to the forester who, a f t e r taking steps to i n i t i a t e production, generally has to wait many years before the - 4 0 -product i s marketed. The estimates of future timber needs thus constitute a v i t a l item i n the formulation- -of forest p o l i c y as a whole (Hanson, 1959). According to Hummel and Grayson (1962), formulation of production goals should be a " l o g i c a l f i r s t step" i n planning the development of a nation's forest resources; and one main consideration i n a r r i v i n g at a production goal i s to e s t a b l i s h the probable trend i n demand. Grainger (1961} page 44) stated, "The forester i s intimately concerned with d i s t a n t l y f u t u r i s t i c markets to a far greater degree than any other business or pro-fessional man; moreover, of a l l commercial crops his i s the most r i g i d and the l e a s t responsive to the economic law of supply and demand. To try and define the trend of future forest products i s admittedly a d i f f i c u l t and speculative exercise, yet i n the absence of some such systematic assessment any changes i n the forest estate w i l l be lar g e l y fortuitous and probably t o t a l l y unrelated to national needs. A c r i t i c a l analysis of consumption trends as a basis for a considered forecast of future requirements i s therefore one of the forester's basic tools of management". Looking at i t i n yet another way, forecasts have important implications for society's welfare i n terms of producer/ consumer surplus. For example, i n regions where forestry has no comparative advantage, economists have to reconcile the differences between productivity and st r a t e g i c and s i m i l a r aspects i n determining the proportion of the national product to be allocated to forestry. Once the production function has been i d e n t i f i e d , ' for example that,, -41-of wood requirements, th goal thus expressed must be measured. The s t a r t i n g points then are trends i n the markets-for forest products. In the early '60s FAO pioneered wood consumption studies i n Uganda, Kenya and Tanganyika (now Tan-zania mainland). These investigations had as one of the i r objectives, development of an estimate of future wood needs, so -that the countries concerned might avoid a needless s a c r i f i c e of valuable forest resources that might better be turned to immediate economic gain and i n d u s t r i a l development (Gregory, 1966). In t h i s study the main objective of forecasting future consumption of wood products i n Uganda i s to assess the implications of projected economic and demographic trends on the forestry sector. Balanced against potential roundwood supply from ex i s t i n g forests (which w i l l be determined i n Chapter Four) the forecasts obtained below w i l l to some extent determine the need for an expansion of plantation pro-grammes, i n t e n s i f i c a t i o n of management and the minimum levels of resources (land, labour, capital) to be allocated to the forestry sector. 3.20 Forecasting Techniques 3.21 Methodologies Techniques for forecasting range from very complex econometric techniques to extrapolations. The choice of technique depends on, among other things, the costs involved. For example, extrapolations may be creditable -42-i f i t i s desirable that forecast costs be kept down, based on an i m p l i c i t or e x p l i c i t cost-benefit assessment. F i n a l l y , depending on the quality of data used, a planner may make a single value "point forecast 1' 1, or '"probability forecast 1' i f a larger degree of uncertainty e x i s t s (McKillop, 1971) . The econometric approach involves b u i l d i n g a regression model which seeks to explain the dependent variable being studied i n terms of independent variables whose levels can be controlled or predicted more r e a d i l y . Hummel and Grayson (1962) indicated that the future demand for wood products i s l i k e l y to a l t e r with changes i n (1) per. capita income,(2) population, (3) consumption pattern^which i n turn depends on the technology of use and consumer taste, and (4) technology of the wood using industries which would a f f e c t the demand for wood i n the unprocessed form. Whatever the variables chosen for carrying out a forecast, i t would be desirable i f they ; were re a d i l y available and representative of s o c i a l and economic development, have an acceptable degree of i n t e r -national comparability, and have been or can be projected into the future on some objective basis. In ; ae study by FAO (1976a) of the timber trends and prospects for Europe for the period 1950-2000, three a l t e r n a t i v e approaches to forecasting were suggested: One .may carry out a time-series approach, a market-oriented approach or combinations of both. Two indicators were used i n the time series study: population and GDP (>GNP or NMP). . A market-oriented approach has three requirements. F i r s t l y , estimates are needed for various end-use of forest products and analysis of t h e i r economic, tech-n i c a l and s o c i a l factors which have determined h i s t o r i -c a l trends, and secondly, judgement i n forecasting how these trends w i l l be extrapolated i n the future. F i n a l l y , i t requires sound knowledge of markets for forest products based on r e l i a b l e and comprehensive s t a t i s t i c s . In the absence of the detailed data re-quired by the market-oriented approach, a time series analysis w i l l be c a r r i e d out for Uganda with some judgements on markets and end-uses as a refinement of the forecast. A v a i l a b i l i t y of data permitting, a more elaborate simulation model has been proposed by Nweke (19 77) . Although the model was o r i g i n a l l y intended for Nigeria, i t i s suitable for most LDCs with s i m i l a r wood consumption patterns. Uganda i s one of those countries where the model could.be applicable. Other models pro-posed are those of Buongiorno (1977) and Gregory (1966). Although the forecasts i n t h i s study w i l l indicate the consequences of projections at the macroeconomic l e v e l (GDP and population), they w i l l be s u f f i c i e n t l y d i s -aggregated (into fuelwood and charcoal, poles and posts, sawnwood and sleepers, woodbased panels and paper and paperboard) to allow for estimation of roundwood re-quirements by end-uses. The ultimate aim of t h i s thesis - 4 4 -i s to i d e n t i f y optimum product-oriented intensive management models and these disaggregations define the product groups adequately. In forecasting p o t e n t i a l consumption of the f i v e product groups, GDP and population have the greatest influence. For a l l products a function of the form below, with appropriate lagging for i n i t i a l consumption l e v e l , was adopted for fuelwood and charcoal and poles and posts, C. = f. (P,G,E.) 3 3 3 where 3 Cj = consumption of product j ('000 m ); P = population ('000 people; and G = gross domestic product (million Uganda s h i l l i n g s at 1966 p r i c e s ) . and E. = error term 3 Potential consumption of sawnwood and sleepers, wood-based panels and paper and paperboard was forecast using the function, where C . = per 1000 capita consumption of ^ product j ; and Y = per 1000 capita gross domestic product i n year t based on 1966 pri c e s . 3.22 Estimation of Future Values of Independent Variables This forecast i s intended to cover the period up to the year 2000, with 1971 as the base year, chosen for convenience of analysis. To the extent that r e s u l t s of - 4 5 -the forecast may suggest changes i n capacity of the forest estate and forest industries, i t i s a long-run model. From descriptions i n the sections above, two parameters (population and GDP) were selected as representative of economic, s o c i a l , p o l i t i c a l and ecological environment of Uganda. Because the forecast i s make for potential consumption, the price re-lationship between wood and wood products on the one hand and th e i r substitutes on the other were assumed constant. Un-certainty i n the future values of the independent and dependent variables w i l l be accounted for through s e n s i t i v i t y analysis. In the case of the forest products (dependent var i a b l e s ) , low, medium and high estimates w i l l be made. Results of the 196 9 census showed the population of Uganda was 9.504 m i l l i o n . The government projection of popu-l a t i o n growth to the year 2000 was reported on by FAO (19 75) . The f i r s t projection based on a constant natural rate of i n -crease i s not l i k e l y to materialize i n view of the expanding health services and the increasing awareness of the benefits of these services by the people. The second projection assumes an increasing natural rate of increase while the t h i r d assumes a declining rate. Ideally, besides growth trends, data on population should include rural-urban proportions, age group structure, employment structure and intra-country and net migration. In t h i s study only the growth trends w i l l be considered. I t i s believed the lack of d e t a i l i n the available data on forest products does not warrant considera-tion of other population parameters. Based on the government forecast, population data for t h i s forecast are shown i n Table 13. -46-TABLE 13 The P o p u l a t i o n o f Uganda P r o j e c t e d t o t h e Y e a r 2000 YEAR C o n s t a n t NRI 0 N *1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 S o u r c e : 9 .504 9.808 10.122 10.446 10.780 11.125 11.481 11.848 12.227 12.618 13.022 13.439 13. 869 14 .313 14.771 15.244 15.732 16 .235 16.754 17.290 17.843 18.414 19.003 19.611 20.239 20.887 21.555 22.245 22 .957 23.692 24 .450 25.232 I n c r e a s i n g NRI - m i l l i o n p e o p l e -9 . 504 9 .837 10 .181 10.537 10.906 11.288 11.683 12.092 12.515 12.953 13.406 13.875 14-.402 14 .949 15 .517 16.107 16 .719 17.354 18.013 18.697 19 .407 30 .144 20.950 21.788 22.660 23.566 24.509 25.489 26 .509 27.569 28.672 29.819 I n c r e a s e and D e c l i n i n g NRI _ } 9.504 9 . 827 10.161 10.506 10.863 11.232 11.614 12.009 12.417 12.839 13 .276 13.727 14 .070 14 .422 14 .783 15 .153 15 .532 15 .920 16 .318 16 .726 17 .144 17 .573 17.837 18.105 18 . 377 18.653 18.933 19.217 19.505 19 . 798 20.095 20.396 NRI = N a t u r a l r a t e o f i n c r e a s e P r o j e c t i o n based on t h e 1969 c e n s u s d a t a o f 9.504 m i l l i o n (*) p e o p l e ; and growth r a t e s b a s e d on government p r o j e c t i o n s as r e p o r t e d by FAO ( 1 9 7 5 ) . The GDP of Uganda expressed at 1966 prices and i t s growth trends were discussed i n Chapter Two. The medium compound annual rate of growth i s assumed at 7 percent, and low and high estimates of 4 and 10 percent, respectively. Based on a GDP value of 7492 m i l l i o n Uganda s h i l l i n g s i n 1971, projections were made to the year 2000 and shown i n Table 14. I t i s further assumed, that though possible i n the short-run, a zero rate of growth i n GDP i s u n l i k e l y i n the long-run. For purposes of greater accuracy, the national per capita GDP should be obtained by summing the weighted (using regional, d i s t r i c t or p r o v i n c i a l proportions of t o t a l population) GDP values. This way account w i l l be taken of d i s p a r i t i e s i n per capita GDP on., a regional scale, and thus ; eliminate some of the error associated with omitting the e f f e c t of d i s t r i b u t i o n of income. In addition to t h i s flaw, i t i s important to r e a l i z e that key factors that influence GDP include population and employment trends, labour and c a p i t a l productivity (factor intensity) ; and application of science and technology (research arid development). The operation of market forces i s determined by i n f l a t i o n a r y pressure. For example c o n f l i c t s arise between consumption of more goods by the public and private sectors leading to c o n f l i c t s with production p o s s i b i l i t i e s which are governed by the a v a i l a b i l i t y of inputs (labour and c a p i t a l ) . This then would induce government to use p o l i c i e s - 4 8 -TABLE 14. . - Uganda's GDP (at 1 9 6 6 p r i c e s ) p r o j e c t e d to the'year 2 0 0 0 YEAR GROSS DOMESTIC PRODUCT P e s s i m i s t i c ( 4 % ) Probable ( 7 % ) O p t i m i s t i c : . ( 1 0 % ) (  s h i l l i n g s 1 9 7 1 7 4 9 2 7 4 9 2 7 4 9 2 1 9 7 2 7 7 9 2 8 0 1 6 8 2 4 1 1 9 7 3 8 1 0 4 8 5 7 7 9 0 6 5 1 9 7 4 8 4 2 8 9 1 7 7 9 9 7 2 1 9 7 5 8 7 6 5 9 8 1 9 1 0 9 6 9 1 9 7 6 9 1 1 6 1 0 5 0 6 1 2 0 6 6 1 9 7 7 9 4 8 1 1 1 2 4 1 1 3 2 7 3 1 9 7 8 9 8 6 0 1 2 0 2 8 1 4 6 0 0 1 9 7 9 1 0 2 5 4 1 2 8 7 0 1 6 0 6 0 1 9 8 0 1 0 6 6 4 1 3 7 7 1 1 7 6 6 6 1 9 8 1 1 1 0 9 1 1 4 7 3 5 1 9 4 3 3 1 9 8 2 1 1 5 3 5 1 5 7 7 6 2 1 3 7 6 1 9 8 3 1 1 9 9 6 1 6 8 8 0 2 3 5 1 4 1 9 8 4 1 2 4 7 6 1 8 0 6 2 2 5 8 6 5 1 9 8 5 1 2 9 7 5 1 9 3 2 6 2 8 4 5 2 1 9 8 6 1 3 4 9 4 2 0 6 7 9 3 1 2 9 7 1 9 8 7 1 4 0 3 4 2 2 1 2 7 3 4 4 2 7 1 9 8 8 " 1 4 5 9 5 2 3 6 7 6 3 7 8 7 0 1 9 8 9 1 5 1 7 9 2 5 3 3 3 4 1 6 5 7 1 9 9 0 1 5 7 8 6 2 7 1 0 6 4 5 8 2 3 1 9 9 1 1 6 4 1 7 2 9 0 0 3 5 0 4 0 5 1 9 9 2 1 7 0 7 4 3 1 0 3 3 5 5 4 4 6 1 9 9 3 1 7 7 5 7 3 3 2 0 5 6 0 9 9 1 1 9 9 4 1 8 4 6 7 3 5 5 2 9 6 7 0 9 0 1 9 9 5 1 9 2 0 6 3 8 0 1 6 7 3 7 9 9 1 9 9 6 1 9 9 7 4 4 0 6 7 7 8 1 1 7 9 1 9 9 7 2 0 7 7 3 4 3 5 2 4 8 9 2 9 7 1 9 9 8 2 1 6 0 4 4 6 5 7 1 9 8 2 2 7 1 9 9 9 2 2 4 6 8 4 9 8 3 1 1 0 8 0 5 0 2 0 0 0 2 3 3 6 7 5 3 3 1 9 1 1 8 8 5 5 Source: . 1., .'The'GDP-value of U.shs. 7 4 9 2 m i l l i o n from FAO ( 1 9 7 5 ) . 2 . Percentages i n parenthesis r e f er to assumptions of annual r a t e s of growth of GDP. -49-such as: wage and p r i c e c o n t r o l s , r e o r i e n t i n g household savings towards f i n a n c i n g of p r o d u c t i v e investment o r r e d u c t i o n i n p u b l i c spending. The e s s e n t i a l t h i n g i s to make whatever method i s used more e f f e c t i v e ; otherwise, growth i n GDP w i l l be curbed by a n t i - i n f l a t i o n a r y measures (FAO, 1976a) . The ex t e n t to which t h i s w i l l a f f e c t the a n t i c i p a t e d growth r a t e s o f GDP i n Uganda w i l l depend on government f i s c a l and monetary p o l i c i e s . A f o r e c a s t of a minimum 4 pe r c e n t growth r a t e i n the long-run assumes t h a t methods used w i l l be e f f e c t i v e . 3.30 FUTURE CONSUMPTION OF FOREST PRODUCTS 3.31 Fuelwood and C h a r c o a l In g e n e r a l , i t i s t r u e t h a t LCDs r e l y upon renewable sources of energy, but MCDs have been the world's major consumer of f i n i t e f u e l r e s o u r c e s . Even i n MDCs, there i s a c u r r e n t concern over a n t i c i p a t e d s c a r c i t y of f o s s i l f u e l s and thus a r e o r i e n t a t i o n of thought towards renew-abl e resources (wood included) f o r f u t u r e supply. I t i s g e n e r a l l y r e c o g n i z e d t h a t a country should have b e t t e r c o n t r o l over i t s f u e l and power r e s o u r c e s , s i n c e u l t i -mately, a h a l t to economic development c o u l d r e s u l t from l a c k of r e a d i l y a v a i l a b l e sources of energy. T h i s i s not to suggest t h a t energy, once a v a i l a b l e , w i l l a u t o m a t i c a l l y l e a d to development, but t h a t the g l o b a l p r o d u c t i o n processes are i n t r i c a t e l y l i n k e d with energy. I f p a r t of the f u e l supply w i t h i n a country i s founded on renew-able r e s o u r c e s , there w i l l be l e s s danger of economic growth -50-being c u r t a i l e d by a sudden r i s e i n the price of imported f u e l or the depletion of an indigenous resource (Earl, 1975) . Few materials found on earth can be used for as many and varied purposes as wood. I t i s a s o l i d f u e l that competes with peat, coal, coke, and l i q u i d and gas fu e l s . Whether i t i s a question of exploiting the source of energy represented by fuelwood or of helping i t r e t a i n i t s place i n competition with the other fuels or to employ i t economically and at the same time conserve the forests, the problem i n the f i n a l analysis i s the same, namely, to use the heating power of wood to the utmost (FAO, 1958) . It i s believed over 90 percent of t o t a l roundwood removals i n most LDCs i s i n the form of fuelwood and charcoal (Earl, 1975). In Uganda the only accurate estimate of fuelwood production i s that from State Forests. I t i s extremely d i f f i c u l t to determine with any degree of accuracy, the removal of fuelwood from savanna woodlands. Although FAO data on fuelwood and charcoal consumption are available, they are only useful for i n d i c a t i n g global trends i n the use of forest energy and of l i t t l e use for i n d i v i d u a l country studies. O r i g i n a l l y , i n s i g n i f i c a n t quantities of wood charcoal were u t i l i z e d by r u r a l blacksmiths i n Uganda. The commercial production of charcoal was i n i t i a t e d by the Forest Department i n the mid-sixties. Two reasons existed for t h i s : (1) charcoal burning as a "'cleaning 0' operation i n enrichment planting programmes of the forests of south west Mengo (Buganda), and (2) as a s o c i a l service (wood provided at nominal price) from woodlands cleared for a f f o r e s t a t i o n with exotic tree species. With the development and adoption of portable steel and Missouri k i l n s , the Forest Department became increasingly involved i n the commercial production of charcoal. According to Lockwood Consultants Ltd. (1973), "Charcoal production on a s i z a b l e , organized basis i s a f a i r l y recent development i n Uganda, where i t s growth has been prompted by various Forest Department e f f o r t s ". There i s no s i g n i f i c a n t external trade i n fuelwood and charcoal. Apart from small quantities of i n d u s t r i a l charcoal imported from Kenya, Uganda has been mainly s e l f - s u f f i c i e n t , with production accounting for over 99 percent of consumption (v .Table 15a). It has been argued that as a country develops, with increasing r e a l per capita income and urbanization (an indicator of the degree of "modernization" of the economy), the income e l a s t i c i t y of demand for fuelwood and charcoal becomes negative. L e s l i e (19 71) suggested that fuelwood consumption may be expressed as a function of income. Therefore, one may assume that so long as r e a l per capita income increases and i s r e d i s t r i b u t e d i n a s o c i a l l y optimal manner, the per capita consumption of. fuelWood-.' w i l l decline. However, there are reasons to believe that the di s p o s i t i o n of fuelwodd . as a source of energy i s not sol e l y governed by per capita income alone, but also by s o c i a l customs and t r a d i t i o n and the extent to which alternative sources of energy are readi l y a v a i l a b l e . TABLE 15a Production and Consumption of Fuel-wood and  Charcoal i n Uganda , , CONSUMPTION Year PRODUCTION -.CONSUMPTION PRODUCTION ( t 0 0 0 M J j ,— %  1961 9912 9918 9 9 . 9 1962 10500 10503 1 0 0 . 0 1963 10800 10801 1 0 0 . 0 1964 11050 11063 9 9 . 0 1965 11300 11406 99 .1 1966 11600 11691 9 9 . 2 1967 11900 12025 99 .0 1968 12200 12285 9 9 . 3 1969 12500 12580 99 .4 1970 12900 12970 9 9 . 5 1971 13200 13246 9 9 . 7 1972 13600 13640 9 9 . 7 1973 13600 13614 9 9 . 9 1974 13600 13605 1 0 0 . 0 Source: 1 FAO Yearbook of Forest Products (1972 and 1 9 7 5 ) . The above, factors influence the consumption of charcoal too and, i n addition, three others are worth considering. F i r s t , the mineral potentials of most LDCs including Uganda are not yet f u l l y known. I f iron i s discovered, charcoal may be used during the smelting process i n the absence of cheap and e a s i l y available c o a l . B r a z i l es-tablished eucalypt plantations to support i t s iron and ste e l industry; and i n Uganda, the cement industry has created an additional requirement for charcoal. Second, i n pursuit of rapid economic development, LDCs are ex-panding t h e i r i n d u s t r i a l base. Some of these industries such as the s a l t drying project i n Uganda (construction of s a l t plant i n progress) and agro-industries (tobacco, tea a n d sugar refinery) a l l require charcoal i n the p r i -mary processing phase, i f cheaper alternatives are not available. F i n a l l y , one may safely assume that consumption of charcoal i n MDCs w i l l increase, although perhaps i n -s i g n i f i c a n t l y on a per capita basis. Such trends could e a s i l y be brought about by the concern for a clean environ-ment (charcoal as a p u r i f i e r of a i r and water) and energy conservation. For example, A f r i c a exported (mostly to Europe) 100,000 tonnes of charcoal i n 1969 compared to 800 in 1954. This represents a 1150 percent increase i n 15 years, and an average annual increment of 6133 tonnes for the period (FAO, 1970b). Several studies of projections of future consumption of fuelwood and charcoal have been car r i e d out for other regions of the world. According to E a r l (19 75), to be - 5 4 -t e c h n i c a l l y correct, demand (and supply) forecasts should be expressed i n price-quantity relationships e i t h e r as demand schedules, demand curves, or demand functions. The forecasts should include considerations for probable future t o t a l energy consumption of a region, the predicted price of alternative fuels, and the l i k e l y demand for forest fuel at a price high enough to j u s t i f y making an investment. Since i n LDCs, the relat i o n s h i p between population growth rate and growth i n fuel-wood consumption i s almost l i n e a r for purposes of broad-term forecasts, there i s no need for the above technical correctness. Nweke (19 77) forecast the consumption of fuelwood would grow at 1.3 percent per annum for the period 1 9 7 5 - 9 0 for Nigeria. Enabor (1971) on the other hand based his projections for Nigeria on the assumption that per capita annual consumption would be somewhere between 0 .8 3 and 3 0.65 m . In a forecast for fuelwood consumption i n Kenya, FAO (19 70a) observed that given the massive dependence of the r u r a l population•on wood as the p r i n c i p a l f u e l , i t would appear that there w i l l continue to be a rapidly increasing demand for fuelwood. The study assumed the per capita consumption would remain unchanged u n t i l 19 80 and (because of substitutes entering the market) decline at a rate of 1% between 1980 and 2 0 0 0 . In a forecast of future demand for fuelwood i n Tanzania, Openshaw (1971) included a use factor for the degree of urbanization (because of the wide difference between per capita cash income i n urban - 5 5 -and r u r a l areas). He estimated a mean income e l a s t i c i t y of demand fo r fuelwood of 10. For Uganda, a f t e r several t r i a l s of various functions, the better ones were: (1) C t = 915 .245 + 1.0786 Pfc + 0.1159 G ; 2 R = 0.9947; SE = 85.57 (2) i o g c t = 0 .969 + 0.868 log P + 0.052 log G ; u R2 = 0.9948-; SE = 0.007 (3) c t = - 443 .685 + 1.3 P ; r 2 = 0.9885. ; SE = 119.2 (4) log C t = - 0.2251 + 1.049 log P 2 r = 0.9885 ; SE = 0.0112 where C t = consumption i n '000 cubic metres (Source: Table 15) P t = population ('000 of people) (Source: Table 13) Gt = gross domestic product (m i l l i o n Uganda s h i l l i n g s ) (Source: Table 14). subscript t refers to year. Equation (1) was chosen for subsequent forecasting and the results shown i n Table 15b. From Equation (2), a 0.05 percent change i n GDP was associated with a 1.00 percent change i n consumption, giving an income e l a s t i c i t y of consumption of fuel-"\vOod of 20, double that for Tanzania. At l e a s t up to the year 2000, there i s no need for consumption of charcoal and fuelwood to decline. I f anything, the demand for charcoal i n i n d u s t r i a l and house-, hold uses w i l l increase. The projections of Lockwood Consultants Ltd. (1973) indicated a 14 m i l l i o n m3 consumption l e v e l f o r fuelwood and charcoal by the year 2000. My forecast indicates t h i s value i s less than a l t e r n a t i v e A, the lower bound of the forecast. Differences could have -56-TABLE 15ti Projection of Future Consumption of Fuelwood and Charcoal i n Uganda to the Year 2 000 Year A L T E R N A T I V E S A* B* C* ( -000 m3 ) 1971 12743 12765 12765 1975 14458 14655 14788 1980 16957 17477 17928 1985 19172 21188 22246 1990 21699 25784 27953 1995 23562 31757 35904 2000 25623 39258 46853 * In th i s Chapter these alternatives A ( L O W ) / B(Medium ) and C( High ), represent the following A - 4% growth rate of GDP, and a f i r s t increasing and then declining population growth rate - (low) B - 7% growth rate of GDP, and an increasing population growth rate. (medium) C - 10% growth rate of GDP, and assumption of population as in (B)(high) Source: Tables 13, 14 and 15«-and expressed as a function i n Equation (1) above. -57-arisen from assumptions about population and GDP growth rates. 3.32 Poles and Posts Most of the problem associated with raw material a v a i l a b i l i t y and lack of accurate data on consumption of posts and poles are similar to that of fuelwood and charcoal. A greater proportion of roundwood removals for building and fence posts takes place outside state forests, i n the r u r a l areas. However, unlike fuelwood and charcoal, product q u a l i t y for poles and posts (in terms of si z e , shape and d u r a b i l i t y ) i s very s p e c i f i c . O r i g i n a l l y , t r o p i c a l high forests, r i p a r i a n forests and f a i r l y well stocked savanna woodlands were the main sources of building poles for the r u r a l people. With increases i n population and the practice of s h i f t i n g c u l t i v a t i o n and w i l d f i r e s , suitable raw material i s being depleted. Savanna woodlands now constitute the major source of building poles. The Uganda Forest Department r e a l i z e d t h i s trend and i n addition to i t s own e f f o r t s , i s encouraging farmers to e s t a b l i s h t h e i r own pole plantations ( f u e l -wood included). The p r i n c i p a l species are Eucalyptus  Acacia and Cassia. Apart from building poles, a f a i r amount of departmental e f f o r t was devoted to producing telegraphic and transmission poles. Most recently, the demand for fencing posts has evolved and i s expected to increase i n the l i g h t of current government p o l i c y of -58-"Double Production" i n agriculture, with a greater emphasis given to c a t t l e ranching. Building requirements for poles are the r e s u l t of t r a d i t i o n a l ways of constructing grass-thatched mud huts that are square, rectangular or round. The frame-work of the walls and the roof trusses a l l consist of poles. In regions such as Uganda where termites abound, one of the desired c h a r a c t e r i s t i c s of building poles i s thei r d u r a b i l i t y . In a study conducted by the Forest Department i n 1947, i t was found that most of the fast growing exotic softwoods and hardwoods were non-durable and were c l a s s i f i e d as "perishable" to "very perishable" (for example Gmelina and some eucalypts). A remedial action, e s p e c i a l l y for fence posts and transmission poles, i s to treat them with preservatives. Plumptre (1964) showed that the "sap displacement" method using the chemical "Celcure" was one-third cheaper than either the simple brush application of creosote on the poles, or any of the pressure tank methods. Another increasing use of poles i s i n the building industry as scaffolding i n the. construction of concrete houses. Up to 194 8, Uganda's requirements for transmission poles were met through imports, mostly from South A f r i c a . Towards the completion of the Owen F a l l s Dam, possible substitution of l o c a l l y grown eucalypt poles for imports -59-was evaluated. The r e s u l t s were affirmative, but q u a l i t y r e s t r i c t i o n s placed on the poles were extreme and required s l i g h t l y d i f f e r e n t s i l v i c u l t u r a l t r e a t -ments . As mentioned previously, the absolute quantity of poles and posts consumed i n Uganda i s d i f f i c u l t to determine accurately, since most of the consumption takes place i n the r u r a l areas and i s unrecorded (an estimate i s shown i n Table 16). According to Enabor (1971), future consumption of poles i n Nigeria w i l l depend on the a v a i l a b i l i t y and. the degree to which wood can hold i t s place against competing substitutes, e s p e c i a l l y concrete and s t e e l . Nierkerk (1974) e s t i -mated a compound annual rate of growth i n consumption of poles equal to 4.0 percent and assumed th i s trend would continue for South A f r i c a . In Kenya, consumption trends were assumed to be s i m i l a r to fuelwood and char-coal. A dominant factor contributing to increases i n future consumption of poles may be expansion of the generation and d i s t r i b u t i o n of power, together with further extension of telephone services. On the other hand, i f the poles i n use were treated with pre-servatives o r i g i n a l l y , annual replacements should be le s s . Consumption of poles and posts i n Uganda i s ex-pected to increase. Suitable functions for use i n pro-jecting future consumption of poles and posts based on -60-consumption data i n Table 16, population data i n Table 13 and gross domestic product data i n Table 14, were 1) Ct= 102.86 + 0.07325 P + 0.0051 Gfc ; R2 = 0.9889 ; SE = 7.949 2) log C = -1.5 + 0.877 log P. + 0.022 log G ; R2 = 0.9905; SE = 0.009 3) c t = 43.2559 + 0.083 Pfc : r 2 = 0.9859; SE = 8.423 4) log C t = 11.9978 + 0.9522 log P t ; r 2 = 0.0886; SE = 0.009 V C, = consumption poles and-posts t i n '000 M 3 Terms as expressed above for fuelwood and charcoal. -61-TABLE 16 Production, trade and consumption Aof poles and posts i n Uganda* Year Production and Consumption 1961 665 1962 700 1963 720 1964 735 1965 755 1966 775 1967 795 1968 815 1969 835 1970 855 1971 884 1972 913 1973 905** 1974 905 * data refers to "Other I n d u s t r i a l Roundwood" which i n the case of Uganda, i s a f a i r approximation for pro-duction, trade and consumption of poles and posts. ** an . estimate Source: FAO Yearbook of Forest Products 1962-72 and 1963-74 1 - there was some trade (imports and exports) but the quantities traded were very small, therefore, omitted from the data source. 2 - the s e l f - s u f f i c i e n c y index 3 (= consumption/ production x 100%) i n th i s case i s 100%. Equation (1) was selected as the basis for projection of future consumption values. Equation (2) shows a 0 .8 8 percent change i n population or a 0 .2 percent change i n GDP i s associated with a 1.0 percent change i n consumption. The projected values were higher compared to estimates by Lockwood Consultants Ltd (1973) and are shown i n Table 1 7 . 3.33 Sawnwood and Sleepers Sawnwood i s technologically the simplest of the processed wood products and the one with the longest history of use. I t i s true to say that i n the formulation of forest p o l i c y , the major i n d u s t r i a l product considered in Uganda was sawnwood to meet m i l i t a r y requirements during the Second World War. Sawnwood was o r i g i n a l l y produced from t r o p i c a l hardwood species, and now, some i s from softwood (pines and cypress) plantation crops. By the end of t h i s century, u t i l i z a t i o n of the l a t t e r group of raw material i s expected to increase very s i g n i f i c a n t l y . There exists a number of problems associated with production and u t i l i z a t i o n of sawnwood. The production problems include, the kind of raw material available and i t s procurement and m i l l i n g . The number of sawmills i n Uganda increased from 24 i n 1946 to 40 i n 1 9 5 4 , and then decreased to 37 by 1 9 7 3 . Their locations are i n most cases raw-material-oriented. Besides location, another important factor i s the size of sawmills.', According to Brown and Bethell ( 1 9 5 8 ) , -63-TABLE 1? P r o j e c t i o n of Future Consumption of P o l e s and Posts i n Uganda to the Year 2000 Year A L LOW E R N A MEDIUM '000 m~ I V E HIGH 1971 1975 1980 1985 1990 1995 2000 885 998 1163 1306 1470 1587 1716 887 1009 1189 1426 1716 2091 2558 887 1014 1209 1472 1811 2273 2891 Source: Tables 13, 14 and 16 and expressed as a f u n c t i o n i n equation (1) above. -64-"There i s probably no other industry that has a greater spread i n f i n a n c i a l investment between the largest and smallest manufacturing units producing e s s e n t i a l l y the same f i n a l product". The sizes of sawmills i n Uganda range from less than 500 3 to over 9000 m annual capacity. Table IB shows production and consumption trends for sawnwood i n East A f r i c a . Uganda's production increased 3 from 4 0 to 86 thousand m between 1961 and 19 74 giving an average compound annual rate of growth of 6.0 percent. On the other hand consumption increased at a faster rate of 7.0 percent. Except for the period 1967 to 1971, production was i n excess of domestic consumption and the surplus exported. However, i t i s worth mentioning that the above s t a t i s t i c s r e f e r to recorded production and consumption. Evidence suggests tha-t most of the sawnwood produced by handsawyers and consumed i n the r u r a l areas escaped' record. If included i t could e a s i l y show a con-sumption l e v e l over 50 percent higher (FAO, 1970) . In Uganda, the major end-use for sawnwood i s the construction and building industry. Lockwood Consultants Ltd. (1971) estimated that about 70 percent of sawnwood usage i n 1969 was accounted for by the construction industry. Other applications were furniture (12%) , mining timbers (11%) railway sleepers (4%), and miscellaneous manufacturing (3%). These proportions are s t i l l applicable. Since seven tenths TABLE 1 8 / . P r o d u c t i o n and Consumption o f , and S e l f - s u f f i c i e n c y i n Sawnwood f o r Kenya, T a n z a n i a and Ugandav (1961-74 i ;) Kenya T a n z a n i a Uganda E a s t A f r i c a Year P. C (...'COM3.. 13 .) % P (... C * 00M3...) 6 % P (... C '00M 3.. .) % P (...' C 00M 3...) 0 1 1961. 50 4 3 1.16,3 101 90 112.2 40 34 1.17.6 191 167 114.4 1962 51 43 118.6 J03 97 106.2 28 26 107.7 182 166 109. 6 1963 60 50 1.20.0 105 97 108.2 35 33 106. 1 200 180 111. 1 1964 68 55 123.6 107 94 113.8 40 38 105.3 215 187 115.0 1965 82 63 130.2 109 96 .113.5 51 50 102.0 242 209 115.8 1966 71 58 .1.22.4 112 100 112.0 56 56 3.00.0 239 214 111.7 1967 87 75 116.0 117 110 106.4 66 68 97.1 270 2.53 106.7 1968 95 82 115.9 139 137 101.5 63 66 95.5 297 285 .104.2 1969 95 77 123.4 149 137 108.8 59 66 89.4 303 280 108.2 1970 83 66 125.8 161 149 108.1 65 68 95.6 309 283 109.2 1971 83 77 107.8 175 184 95.1 85 90 94.4 343 351 97.7 1972 85 78 109.0 191 190 100.5 75 73 •102.7 351 341 102.9 1973 104 95 109.5 191 187 102.1 32 28 114.3 327 310 105.5 1974 92 80 115.0 191 191 100.0 86 83 103.6 369 354 104.2 Source: FAO, Forest Products Yearbook (1972 and 1974). P = p r o d u c t i o n , C = c o n s u m p t i o n , a n d 6 = s e l f - s u f f i c i e n c y c o e f f i c i e n t , P/C. -66-or more sawnwood i s u t i l i z e d i n construction and building a c t i v i t y , an important variable that w i l l i n -fluence the consumption of sawnwood i s the r a t i o of r u r a l to urban population as shown i n Table 19. The volume of construction wood used i n the r u r a l sector i s low mainly because of preponderance of use of roundwood i n building (FAO, 1967b). The problems that may be encountered i n trying to improve sawnwood consumption i n r u r a l areas include, (1) the unfavourable prices of sawnwood, (2) d i f f i c u l t i e s of transportation to remote areas, and (3) low purchasing power of consumers (Enabor, 19 76) . Use of sawnwood i s intimately associated with the building industry. Although i t was o r i g i n a l l y thought other forms of construction a c t i v i t y used less sawnwood than r e s i d e n t i a l housing, t h i s may not be e n t i r e l y true. Use of sawnwood i n concrete formwork (shuttering) for erecting public buildings and bridges i s substantial. Whereas i n some other parts of the world, use of sawnwood i s intensive i n family dwellings, t h i s i s not so i n Uganda. Wooden houses have not been popular, despite increasing i n t e r e s t i n t h i s type of houses to provide cheap housing for the low and middle income groups (Paterson, 1971). Possible factors that may influence future con-sumption of sawnwood i n buildings include: t r a d i t i o n , a v a i l a b i l i t y of suitable timbers for building, general ignorance of builders about the range of building timbers available, lack of innovation or appropriate s k i l l s -67-TABLE 19. Sawnwood Consumption By End Use C a t e g o r i e s i n E a s t A f r i c a a) Sawnwood Usage i n Kenya, Tanzania and Uganda, .1959-60 Kenya Tanzania Uganda E a s t A f r i c a ( '000 M 3 ) P u b l i c S e c t o r 22.9 13.3 18.4 54.6 Commerce & I n d u s t r y 21.6 12.4 17.6 51.6 R u r a l A f r i c a n Households 27.5 55.4 45.6 128.5 Urban Households! 26.1 2J> 7.8 36.4 T o t a l : 98.1 83.6 89.4 271.1 1. I n c l u d e s housing i n 3,600 n o n - A f r i c a n r u r a l h o l d i n g s i n Kenya. F o r Uganda, housing i n s m a l l towns, other than the f i v e main towns, i s grouped w i t h r u r a l A f r i c a n households. b) D i s t r i b u t i o n of Sawnwood Usage i n Kenya, Tanzania and Uganda, 1950-60 Kenya Tanzania Uganda E a s t A f r i c a C o n s t r u c t i o n R u r a l Urban 18.4 41.0 38.7 19.2 24.9 28.5 82.0 88.7 T o t a l : . ' 59.4 57.9 53.4 170.7 F u r n i t u r e R u r a l Urban 9.0 15.6 17.6 5.4 20.8 9.0 46.5 30.0 T o t a l : 24.6 22.1 29.8 76.5 c) P e r C a n i t a Sawnwood Usage i n Kenya, Tanzania and Uganda, 1959-60 R u r a l Households Kenya _ Uganda Tanzania ( .M per 1,000 people ) S t r u c t u r a l & S h u t t e r i n g 0.4 1.7 0.4 J o i n e r y 2.4 4.7 2.3 F u r n i t u r e & Other Uses 1_;_5 3A. 2^5 T o t a l : l±3 9^5 5.2 Urban Households S t r u c t u r a l & S h u t t e r i n g 13.6 29.8 18.0 J o i n e r y 5.8 9.7 F u r n i t u r e & Other Uses 8 .A 9_J3 5.7 T o t a l : 27.8 48.3 23.7 Source: FAO (1967). Timber Trends and P r o s p e c t s i n A f r i c a , pp. 50-51. - 6 8 -i n the building industry, influence of psychology, and a v a i l a b i l i t y and increasing consumption of substitute materials, e s p e c i a l l y s t e e l , cement, asbestos, glass and p l a s t i c s (Enabor, 1972). Construction i s a major contributor to GDP. Therefore, forecast of 4, 7 and 10 percent growth rates i n GDP i m p l i c i t l y indicate increased building and other construction a c t i v i t y and, therefore, sawnwood consumption. The actual, amount of sawnwood consumed per construction unit, which i t s e l f i s a r e s u l t of technological innovation, i s d i f f i c u l t to forecast^ but i t w i l l have a great influence on quantity of sawnwood consumed. However, i t i s assumed here that the r e l a t i o n s h i p established between past sawnwood consumption and GDP w i l l p r e v a i l . Overall expansion of economic a c t i v i t y w i l l stimulate trade and d i s t r i b u t i o n and sale of goods and, therefore, enlarge the packaging sector. This i s of p a r t i c u l a r significance for an LDC l i k e Uganda whose development process i s to some extent governed by exports. The amount of sawnwood consumed w i l l depend on the products to be d i s t r i b u t e d or traded and competition of sawnwood with other substitute materials. But i t i s safe to assume the demand for packaging material w i l l increase and so w i l l consumption of sawnwood by t h i s sector. The furniture industry i s the second largest consumer of sawnwood af t e r construction. The l e v e l of a c t i v i t y i n the furniture industry i s related to that of building a c t i v i t y and i n addition, the rate of replacement of worn-out furn i t u r e . A possible trend that may take place i n Uganda would be the manufacture of furniture (especially table tops) u t i l i z i n g particleboard covered with prime grade veneers. I f t h i s occurs, the amount of sawnwood per furniture unit may.decline. However, the t o t a l con-sumption of sawnwood by the furniture industry may act u a l l y increase due to expansion i n demand. As a basis for forecasting future consumption leve l s of sawnwood, several relationships"were i d e n t i f i e d using data from Tables 13, 14 and 19; and are shown below. (1) log C t = 2.34546 + 1.375 log C t_ 3 -1.446 Yt_3 + 0.957 log Y ; = R2 = 0.232 ; SE = 0.349. (2) Cfc = 9.328 + 1.483 C t_ 3 - 7.85 log Y t_ 3 +5.84 log Y ; R2 = 0.307 ; SE,= i . 6 8 3 . (3) C t = 0.8675 + 0.008676 Y ; P 2 = 0,943 ; SE = 0.406 where 3 C t= consumption per thousand capita i n m Y-t= Gross domestic product per thousand capita i n '000 Uganda s h i l l i n g s t = year. Equation (3) was chosen for the forecast and the results obtained presented i n Table 20. 3.34 Wood-Based Panels In t h i s study, wood-based panels r e f e r to veneers, plywood, particleboard and fibreboard, and are i n -70-Projection of Future Consumption of Sawnwood and Sleepers , i n TABLE 20. Uganda to-the Year 20 00 Year A L T E R N A T I V E S LOW MEDIUM HIGH ( -000 m3 ) 1971 65 65 65 1975 76 85 95 1980 93 119 153 1985 113 168 247 1990 137 235 398 1995 167 330 640 2000 203 463 1031 Source: Tables 13, 14 and 19 expressed i n Equation (3) above. -71-agreement with the d e f i n i t i o n given by the International Consultation on Plywood and Other Wood Based Products of the Food and Agriculture Organization of the United Nations. There i s no Ugandan production of the various categories of fibreboard. Therefore production of plywood and particleboard w i l l be described below. Plywood production i n Uganda began i n 1959 and remained a single plant - single owner operation u n t i l 1976., Currently, there i s a plan to e s t a b l i s h a veneer plant. Two ownerships ( f i r s t Sikh Sawmills, and now The Wood Industries-Corporation) have-been responsible for processing. A monopoly market structure s i g n i f i e s loss of e f f i c i e n c y through reductions i n consumer and producer surpluses. Production of plywood was i n i t i a t e d not as a r e s u l t of general domestic consumer demand, nor "war-induced" l i k e sawnwood; the decisive impetus came from the great increase i n tea output i n East A f r i c a . Prefabricated tea chests which only need to be assembled by the tea f a c t o r i e s are the chief item i n the production programme of the plywood industry (Oursin, 1970) . Although a monopolist producer, the Wood Industries Corporation i s w i l l i n g to expand output but has a problem of s c a r c i t y of peeler logs. The firm does not act as a true monopolist therefore, because of i n s t i t u t i o n a l l y controlled p r i c e s . Physical s c a r c i t y of peeler logs i s a r e s u l t of the high standards required by tea producers concerning weight and t a i n t of tea chests which l i m i t the -72-number of suitable species for peeling. In addition to physical and economic a v a i l a b i l i t y of wood raw material, chemical raw materials are also c r u c i a l l y important. Where the l a t t e r are imported, as in Uganda, t h e i r influence on production operations through fluctuations i n quantities available outweighs that induced by wood s c a r c i t y . These chemicals are mainly resins and wax sol i d s and i n addition to the plywood industry, they also a f f e c t particleboard production. Since the o i l c r i s i s , the price - of the chemicals ( s o l i d wax) has been increasing-rapidly. According to Dube (1977) the r e a l price index of phenol formaldehyde rose from 9 8.8 (1971=100) i n 1973 to 168.7 i n 1975, giving an annual rate of increase s l i g h t l y higher than 30 percent. This could have a considerable e f f e c t on the production economics of particleboard where percentage usage of chemicals per unit of output i s high. Particleboard on the other hand, i s less demanding on raw material q u a l i t y and i n the absence of wood can u t i l i z e other sources of fibrous material. While other wood-based industries place great importance on log size and shape and f i b r e properties, these are unimportant i n particleboard manufacturing. Of importance, are wood density and pH, ease of chipping and moisture content (Tustin, 1968). Production of hardwood particleboard i n Uganda began i n 1964,, as a means of u t i l i z i n g sawmill waste. By 1970, production i n t h i s m i l l approximated -7 3-2 157,170 m , about one-third the m i l l ' s capacity (Lockwood Consultants Ltd., 1971). I t i s obvious from the above description that production of wood-based panels i n Uganda i s very recent. This i s equally true on the global scene, r e l a t i v e to sawnwood at l e a s t . The development of world production has shown substantial growth for a l l products, with a much higher growth rate for particleboard •and a de-c l i n i n g share of fibreboard production (FAO, 1976b) . Table 21 shows production of wood-based panels i n Uganda increased from 3,000 to 9;000 • M3 between 1961 , and 1974, giving an average compound annual rate of growth of 8.8 percent. On the other hand, consumption increased 3 from 3,000-. to 11,00 0 M~ for the same period, 3 reaching a peak of 17,000 m i n 1971. Most of the imports of wood-based panels consist of fibreboard used as in s u l a t i o n material i n roof c e i l i n g s of r e s i d e n t i a l b u i l d -ings . Consumption of wood-based panels i s p o s i t i v e l y correlated with per capita income. FAO (1976b) reported an apparent income e l a s t i c i t y of consumption of over 2 for North America and Japan, 2.5 for Europe and 4 or 5 for LDCs. Apart from the absolute l e v e l of income, consumption also varies with income growth within countries. Countries i n the same income group have similar income e l a s t i c i t i e s and beyond a c e r t a i n l e v e l of income, saturation occurs. LDCs, Uganda included, are s t i l l far from such saturation rel a t i o n s h i p s . TABLE 21. Production, Consumption and S e l f - s u f f i c i e n c y i n Wood-based Panels for Kenya, Tanzania and Uganda , (1961-74) Kenya Tanzania Uganda East A f r i c a Year P C ' 3 P ; C 6 F C 3 P C 3 (...'DOOM3) 7, (... 'OOOM3) % (-.. 'OOOM3) % (... OOOM3) % 1961 4 1 3 3 100.0 3 8 37.5 .1962 ,S 1 2 50.0 5 5 100.0 6 11 54.5 1963 6 2 2 50.0 3 4 75.0 5 11 45.5 1964 6 3 4 75.0 3 4 75.0 6 14 42.9 1965 6 3 8 37.5 3 8 37.5 6 22 27.3 196G 8 5 9 55.6 3 7 42.9 .8 24 33.3 1967 7 4 10 40.0 5 9 55.6 9 26 . 34.6 1968 .10 4 12 33.3 5 9 55.6 9 31 29.0 1969 2 10 20.0 4 8 50.0 <i 9 88.9 •14. 27 51.9 1970 2 11 18. 2 5 11 45.5 8 10 80.0 15 32 46.9 1971 2 13 23. 1 7 17 41.2 7 17 41.2 17 47 36.2 1972 4 . 11 36.4 10 10 100.0 3 8 100.0 22 29 75.9 1973 5 7 71.4 12 14- . 85.7 3 11 72.7 25 32 78.1 1974 10 7 142.8 12 15 80.0 9 11 81.8 3.1 33 93.9 P = Production, C •= Consumption, 0 = S e l f - s u f f i c i e n c y C o e f f i c i e n t = P_ C Source: FAO. Yearbook of Forest Products (1972 and 1974) -^ 75-Factors that govern future consumption of wood-based panels i n Uganda include (1) substitution of sawnwood i n construction and packaging a c t i v i t y ; (2) price at which woodrbase'.d panels w i l l be available to other consumers instead of the tea producers; (3) innovations i n the furniture industry; and (4) substitution of plywood by paper and other containers i n the tea exports sector. Since the domestic markets for plywood and other wood-based panels are s t i l l i n t h e i r developmental stage and yet, already, there i s evidence of s c a r c i t y , i t would be reasonable to assume an increase i n consumption for the future. A forecast of future consumption of wood-based panels was obtained by t r y i n g several functions based on data from Tables 13, 14 and 21. Some of these are presented below (1) log C = - 4.967 + 0.590 log G 3 - 0.539, log Y _^ + 1.298 log Y ; r2 = 0.552 ; SE = o-2*1 (2) C t = - 3.551 + 0.540 C t_ 3 - 0.284 log Yfc_3 + 0.903 Y ; r 2 = 0.367; SE = o. 2?G (3) C = 0.11855 + 0.0012 Y ; r 2 = 0.687 ; SE = 0.121 Variables as for sawnwood above. Equation (3) was chosen for forecasting future consumption, and the results shown i n Table 22. 3.35 Paper and Paperboard Between 1962 and 19 73, world production of paper and board increased by an average annual compound rate of 5.6 -76-Projection of Future Consumption of Wood-Based Panels in Uganda TABLE • 22 to the Year 2000. Year A L T E R N A 1" T I. VI E S : LOW MEDIUM HIGH ( __ .Q00 m3 ) 1971 9 9 9 1975 11 12 13 1980 13 17 22 1985 16 24 35 1990 19 33 56 1995 23 46 90 2000 29 65 145 Source: Tables 13, 14 and 21 expressed as a function i n Equation (3) above. percent, while that of the MDCs had a growth rate of 5.4 percent and LDCs and CPEs 8.5 and 5.6, respectively. Yearly changes i n production capacity using 1962 as base year i s shown i n Figure 2. In East A f r i c a , except for Kenya that started manufacture of paper i n the early '60s, production has been f a i r l y recent. Even then u n t i l 19 70 when pulp production began i n Kenya, a l l the pulp required for paper and board manufacture was imported. Uganda has three plants making writing and p r i n t i n g papers, tissue paper and packaging bags. The dependence of these plants on imports for raw materials has made them vulnerable to government import r e s t r i c t i o n s . The i r r e g u l a r production pattern has been one of the factors favouring the e s t a b l i s h -ment of a. pulpmill ' i n the country. Wood, bagasse and papyrus are possible sources of raw material. In the absence of other raw materials, the apparent consumption of wood pulp i s d i r e c t l y related to the consumption of paper and paperboard. Based on the general economics of paper production, factors that influence the t o t a l quantity of wood pulp consumed i n paper manufacture include: (1) types of paper consumed by the region: (2) fibrous material other than wood pulp, used i n the manufacture of paper and paperboard; (3) proportion of wood pulp consumed i n sectors other than paper and paperboard manufacture; and (4) volume of imports and exports of both wood pulp, paper and board (Guthrie, 1972). «2 S3 64 65 6S 6? £3 £9 70 71 72 73 2._ Korld Japarboard production growth rates .(using 1SS2 as bass year) S o u r c e : FAO Yearbook o f F o r e s t P r o d u c t s . 19 74 . -79-According to FAO (1960), a log-normal r e l a t i o n s h i p e x i s t s between per capita consumption of paper and paper-board and per capita income. Therefore consumption i s dependent upon two demand s h i f t i n g variables; population and income. But per capita income does not explain a l l the v a r i a t i o n i n consumption. A t h i r d variable i s a "time trend" factor. For example, consumption may be influenced by the fact that a country i s i n an adjustment process from say depression or i n f l a t i o n . Under "time trend" there also e x i s t some secular factors. These may be either long-term change i n price of paper r e l a t i v e to those of other commodities; or emergence of new applications of paper, a technological factor. Therefore, apart from population and income, consumption i s also influenced by a variety of s o c i a l , economic and c u l t u r a l considerations. In LDCs, consumption of' paper and'.paperboard i s very low ( - -Table 23 ) . Although these countries have the largest share of the world's population, generally„their per capita incomes and l i t e r a c y rates are low. The • - . greatest bulk of paper and paperboard consumption occurs in the i n d u s t r i a l sector, where i t i s used as packaging and bagging material for food items, cement and other commodities. Although low i n absolute terms, consumption i n the region i s increasing very rapidly, as a consequence of the log-normal relationship discussed above. For example, Osara (1963) noted, - 8 0 -TABLE 2 3 Per Capita Consumption of Paper and Paperboard i n Selected Countries (1959-70) Country Per Capita Consumption 1956 1960 . 1969 1970 A. More Developed Countries (MDCs) kg/person* ) Canada 127 127 168 181 United States ' 196 196 262 252 Finland 60 71 105 114 Sweden 95 120 186 191 United Kingdom 82 107 128 129 Au s t r a l i a 71 80 118 119 B. Less Developed Countries (LDCs) Ghana 2 3 3 4 Ivory Coast - - 6 8 Kenya - 4 4 Tanzania - 1 1 2 Uganda 1 1 1 2 Nigeria - 1 1 1 Chile 11 10 20 33 B r a z i l 9 10 13 14 India 1 1 2 2 Malaysia - 7 14 24 Source: Williams and Haas (1971) * o r i g i n a l data were i n lb. per capita, and t h i s has been converted to Kg/person using conversion factor 2.2 lbs = 1 Kg) and rounded to the nearest whole number. -81-"consumption of paper and paperboard has grown and w i l l continue, to grow - very rapidly, i n many countries (LDCs) faster than the growth of GNP (gross national product)". Chief among the economic factors that influence consumption of paper and paperboard, and often make i t d i s t o r t the expected log-normal relat i o n s h i p , i s lack of adequate foreign exchange funds for imports. Therefore, apparent consumption i n these countries i s not what the true s i t u a t i o n should have been. According to Ohlin (1963), "when paper shortage i s c i t e d as an obstacle to educational and c u l t u r a l development, reference i s often made to the s c a r c i t y of foreign exchange. When an e f f e c t i v e demand for paper i s suppressed by import r e s t r i c t i o n s or currency controls, that s c a r c i t y i s of course an operational bottleneck paper i s i n underdeveloped regions an expensive commodity more expensive than i n Europe i n absolute terms, and many more times so i n terms of l o c a l incomes", '"" . Apart from the s c a r c i t y of foreign exchange for imports and inadequacy of production capacities, there i s a "secondary use" factor, induced to some extent by the f i r s t two. Implicit i n the "secondary use" factor i s the fac t that paper and paperboards produced or imported, a f t e r -their primaryxor i n i t i a l use, go into another c i r c u l a t i o n without further modification. Paper i s used for wrapping, food items i n the l o c a l markets. I f indeed t h i s represents ^82-an e f f e c t i v e demand, then the conventional method of ca l c u l a t i n g apparent consumption would lead to an under-estimation of actual consumption. Forecasts based on past consumption trends would also be under-estimated. Fin a l l y , t h e heterogeneity of population influences consumption of paper and paperboard. For example i n Eastern A f r i c a , Kenya exhibits a much higher per capita consumption than Uganda or Tanzania, when the three countries are e s s e n t i a l l y at the same l e v e l of economic development. Part of t h i s d i s p a r i t y may be explained by the larger Europear community l i v i n g i n Kenya, who have higher per capita incomes and consumption patterns s i m i l a r to that i n Europe. The trend of consumption i n East A f r i c a i s shown i n Table 24. Although increases i n paper consumption have been i n the i n d u s t r i a l sector (cement and sugar packaging), i t i s hoped that increased economic growth (shown by assumptions i n growth rate of GDP) and l i t e r a c y should lead to contin-ued expansion i n the use of newsprint, p r i n t i n g and writ-ing papers, and other papers and board. Future consump-tio n of paper and paperboard was estimated based on data from Tables 13, 14 and 24. Using equation (3) below, the r e s u l t of the forecasts i s shown i n Table 25. Com-pared to the projections by Lockwood Consultants Ltd. (1971) , t h e i r estimate was higher than low but lower TABLE 24. Production and Consumption1 of and Self-sufficiency i n Paper and Paperboard for Kenya, Tanzania and Uganda (1961-74) Kenya Tanzania Uganda East A f r i c a Year P- C P c 8 P C 6 P C (5 (• .'000MT. . ) % (• '0OOMT. (• .'OOOMT. . ) % (• .'500MT. .) % 1961 1 21 4.8 0 2 0.0 0 2 0.0 1 25 4.0 1962 3 24 12.5 0 3 0.0 0 2 0.0 3 29 10.3 1963 2 28 7.1 0 3 0.0 0 2 0.0 2 33 6.1 1964 3 30 10.0 0 4 0.0 0 2 Q.O 3 36 8.3 1965 3 38 7.9 0 5 0.0 0 4 0.0 3 47 6.4 1966 3 42 7.1 0 6 0.0 0 5 0.0 3 53 5.7 1967 3 46 6.5 0 6 0.0 0 7 0.0 3 59 5.1 1968 3 43 7.0 0 7 0.0 0 10 0.0 3 60 5.0 1969 3 53 5.7 0 8 0.0 0 12 0.0 3 73 4.1 1970 2 56 3.6 0 12 0.0 1 11 9.1 3 79 3.8 1971 4 69 5.8 0 11 0.0 1 15 6.7 5 95 5.3 1972 4 58 6.9 0 16 0.0 2 10 20.0 6 84 7.1 1973 5 60 6.7 0 18 0.0 1 6 16.7 5 84 6.0 1974 5 84 6.0 0 19 0.0 1 10 10.0 6 113 5.3 MT = metric tons P .= Production, C = Consumption, and 6 = Self-sufficiency ratio 1 SOURCE: FAO Forest Products Yearbook (1972 and 1974). - 8 4 -TABLE 25 •': P r o j e c t i o n of Future Consumption of Paper and Paperboard i n Uganda •to the . Year 2000 Year A L T E R N A T I V E S LOW MEDIUM HIGH (— ' 000 m e t r i c tons ) 1971 16 16 16 1975 19 21 23 1980 23 29 38 1985 28 41 60 1990 34 58 97 1995 41 81 157 2000 50 113 253 Source: Tables 1 3 , i n Equation 14 and 21 expressed as a (3) above. f u n c t i o n -85-(1) log C^= -17.909-0.222 log Ct_3+ 0.786 log Yt^3+ 1.933 log Yfc; R 2 = 0.781 ; SE = 0.297 (2) Ct= -0.848-0.443 Ct_3+ 0.916 log Y^ 3+ 0.807 log Yfc; R2= 0.656: SE = 0.450 (3) C = -0.537+0.002 Y. ; r 2= 0.834; SE = 0.181 t t (4) Ct= -9.111+1.534 log Y •; r 2= 0.560 ; SE = 0.647 Terms as explained for sawnwood and sleepers and wood-based panels. than "Medium" and much lower than. "High".- Once again, this could "have been due to use of low rates of population increase and/or GDP. 3.40 Summary Population, GDP and t h e i r transformation (per capita GDP) were the independent variables used i n the analysis. A l i n e a r regression analysis was used to es t a b l i s h re-lationships between these variables and the dependent variables (past consumption trends for the main forest product groups). These functions were then used to e s t i -mate future wood consumption trends. Low, medium and high leve l s of consumption were estimated for each product to the year 2000. A low estimate (A) assumed a 4 percent growth rate of GDP, and an increasing then declining popu-l a t i o n growth rate. The assumption i n the medium estimate (B) was a 7 percent growth rate i n GDP and an increasing population growth rate. F i n a l l y , the high value (C) -86-assumed the same population growth rate as i n (B) but with a GDP growth rate of 10 percent. This ranging allowed elimination of some of the "accuracy" argument posed by c r i t i c s of forecasting. The results of the forecasts indicated minimum and maximum values of 26 and 47, 1.7 and 2.9 m i l l i o n cubic metres for fuelwood and charcoal and poles and posts, respectively, by the year 2000. For the s o l i d 3 i n d u s t r i a l wood products, the values i n thousand m were 203 and 1031 for sawnwood and sleepers and 29 and 14 5 for wood-based panels. Consumption requirements for paper and paperboard products w i l l be 50 to 253 thousand metric tons. The implications of these e s t i -mates for forest management w i l l be assessed i n Chapter Five, when consumption requirements (expressed i n round-wood equivalents) w i l l be compared with p o t e n t i a l supply (Chapter Four) based on the current size of the forest estate. Ideally, an attempt to predict the actual amounts of wood products consumed i n future periods would have to specify the forces influencing both supply and demand, as well as price adjustments required to bring them i n balance. This study presupposes prices of wood products w i l l maintain t h e i r present position r e l a t i v e to other prices and p a r t i c u l a r l y to prices of close substitutes. - 8 7 -Therefore, these forecasts i l l u s t r a t e possible supply/ demand imbalances and related future price movements; that i s , a warning device against economic s c a r c i t y of wood products. - 8 8 -CHAPTER FOUR 4.00 THE FOREST RESOURCE 4.10 Land Use i n Uganda The exercise of a l l o c a t i n g resources to production processes has as i t s objective, the attainment of economic e f f i c i e n c y (Libby, 1976). At the public l e v e l , t h i s often involves some trade-offs between e f f i c i e n c y and equity. Apart from U t o p i a n situations which cease to be problems i n the economic sense, the a l l o c a t i o n of land to competing uses i n such a way that welfare i s maximized i s a con-cern to a l l economists and resource managers. Otherwise, according to Eggeling (1947), "In the i d e a l State, where population i s of such dimensions and d i s t r i b u t i o n that a l l users of land have t h e i r optimum requirements ( i . e . neither more nor less than they need), a l l catchments, broken ground and marginal s i t e s would carry protection forests, and there would be an i d e a l quantity of production forests, both natural and a r t i f i c i a l , on better class s i t e s i n strategic positions. The forest estate i n such Utopia might exceed 25-30 percent of the t o t a l area of the country". Uganda i s far from such Utopia, i t s population d i s t r i b u t i o n generally follows a s o i l f e r t i l i t y - ample r a i n f a l l index with major economic a c t i v i t i e s concentrated i n these regions. Therefore, a l l o c a t i o n of land to various land use categories i n general and forestry i n p a r t i c u l a r , i s an important decision. -89-I t has been emphasized that i n LDCs, governments int e r f e r e with the market mechanism to a s i g n i f i c a n t degree. But even i n MDCs, i t i s recognized that while the market mechanism alone often causes individuals to follow the best course for t h e i r immediate i n t e r e s t s , i n the case of land i t i s r a r e l y found to lead to a c o l l e c t i v e optimum in the long-run. The contributing factors are the absolute l i m i t to the supply of land, excessive speculation i n an imperfect market- and the frequency of interactions and neighbourhood e f f e c t s (OECD, 19 76) . Land speculation i s governed by the owner-ship of land and since i n Uganda i t i s public, t h i s e f f e c t i s of n e g l i g i b l e importance. Agriculture i s the dominant land use ' a t . present. With increased economic a c t i v i t y other land use commitments w i l l increase t h e i r demand on the resource. One of these i s the forestry sector, since at absolute low l e v e l s of per capita real income, the income e l a s t i c i t y of demand for most wood products i s greater than one. Therefore, i n the long-run, as per capita r e a l income r i s e s , so w i l l the demand for forest products. This would , therefore,induce economic s c a r c i t y of roundwood i n the future unless compensating increases i n roundwood supply at low cost can be maintained or i n i t i a t e d . Moreover, increased concern for erosion-control and watershed protection w i l l r e s u l t i n more tracts of land committed to forestry. I t i s being increasingly argued that, on - 9 0 -a g r i c u l t u r a l l y marginal lands,, forestry could indeed compete favourably with crop production or grazing a c t i v i t i e s . F i n a l l y , just as i n agriculture, government f i n a n c i a l aid for afforestation or reforestation projects may strengthen the claim of forestry for a g r i c u l t u r a l land. Therefore, the surplus arable land i n Table 26 and the low l e v e l of u t i l i z a t i o n of available land as shown i n Table 27, are only temporary and represent an " a r t i f i c i a l surplus" induced by imperfections of p o l i c y or i t s implementation. Only six d i s t r i c t s had land use commitments : accounting for over 50 percent of the t o t a l land area a v a i l a b l e . These d i s t r i c t s are mainly those i n which a g r i c u l t u r a l holdings constitute over 4 0 percent t o t a l use, except i n Bunyoro where the percentage i s considerably less (12 percent) but belongs to t h i s group - as-':, a r e s u l t of a more d i v e r s i f i e d and balanced a l l o c a t i o n of land among land use commitments. In Bunyoro, Toro and West Buganda, forestry i s the dominant land use. On the other hand i n Karamoja, Game Reserves constitute the dominant land use commitment (25.1 percent). The demand factors,discussed above, w i l l act i n such a way as to decrease the size of surplus land depending on ecological s u i t a b i l i t y for various uses. Despite the a v a i l a b i l i t y of t h i s surplus land, regional land use c o n f l i c t s do e x i s t , and i t i s assumed, w i l l do so on the national scene i n the near future. The more obvious types of c o n f l i c t s that can be envisaged as l i k e l y to a r i s e TABLE 26 Land Use In Uganda (19 72) Total Area T o t a l Total Area Arable A l l other Land (Sq. Km ) Area Under Area Area Under Area Under National Under DISTRICT* of District Land Area Under Water Cultivated Unculti- permanent Forest & Game (sq.km.) (sq.km.) (sq.km.) vated Swamps Reserves eserves East Buganda 23,438.83 13,132.68 9,324.09 3,493.61 9,565.69 983.06 1,006.42 _ West Buganda 6,559,84 4,783.41 1,211.41 1,744.81 2,975.79 565.02 386.25 -Fubends 10,309.71 9,819.70 2.42 2,049.14 1,710.36 487.59 757.35 -Masaka 21,300.04 9,852.42 10,685.61 2,327.41 7,013.99 762.01 797.00 -Busoga 19,195.42 8,832.94 8,586.66 4,709.43 3,928.87 775.82 330.08 -Bukedi 4,553.09 3,899.50 101.21 2,520.15 1,404.35 552.38 52.05 -Bugisu 2,545.80 2,503.58 - 1,142.40 683.00 . 42.22 527.55 -Sebei 1,738.31 1,739.31 - 319.51 865.19 - 671.67 -Teso 12,920.77 10,982.89 1,055.47 8,259.90 1,898.00 882.41 133.72 -North Karamoja 13,207.82 13,207.82 - 192.10 1,043.13 - 2,133.36 6,552.00 South Karamoja 14,013.54 13,986.96 0.21 141.72 16,118.00 26.37 1,0 4.43 Lango 13,739.64 ' 12,037.98 916.43 4,518.71 7,169.49 1,785.66 212.33 -West Acholi 16,135.85 16,132.12 0.31 1,814.32 10,653.14 3.42 742.30 1,989.00 "West Acholi 11,717.12 11,543.18 73.29 2,112.70 14,000.26 100.65 310.32 West Nile 10,720.86 10,376.66 95.45 2,357.34 6,720.96 248.75 705.38 182.00 Madi 5,006.05 4,668.33 72.63 1,367.14 1,977.06 265.09 344.99 -Ankole 16,235.40 15,430.72 440.72 3,428.40 10,562.00 363.96 973.22 1,450.00 Bunyoro 19,536.48 16,229.59 2,982.85 1,705.36 10,295.94 324.04 1,670.45 2,431.00 Kigezi 5,241.37 4,898.54 207.08 2,434.15 2,519.45 135.75 585.90 655.00 Toro .13,903.58 12,928.40 571.92 1,776.31 8,020.50 403 26 2,361.00 2,361.00 UGANDA 241,020.52 196,985.73 36,327.76 48,914.60 128,545.07 7,707.46 15,250.31 15,620.00 Area Under Mount- Urban ains Centres Area Under Ranches 297.00 590.00 110.00 35.00 1,004.00 2, 36.00 67.00 238.00 79 .00 7.00 12.00 272 .00 82.00 7.00 15.00 8.00 251 .00 5.00 480 .00 5.00 190 .00 14.00 555 .00 8.00 2.00 4 .00 12.00 264 .00 5.00 471 .00 5.00 14.00 506.00 2,566.00 i M I * Boundaries are according to 1969 demarcations Source: FAO (1975) -92-TABLE 2 7 P e r c e n t a g e o f t h e Land W i t h i n D i s t r i c t s i n Uganda A t t r i b u t e d t o V a r i o u s Land Use Commitments (1971) National Game Forestry A g r i . Ranches & infrastructure Park Reserve Reserve Holdings Estates I n s t r u c t i o n Total WESTERN PROVINCE A n k o l e 4, .7 6. .1 6, .3 18, .8 5, .2 2. .0 43 Bunyoro 14 . 8 5 , . 8 15, .2 12, .1 3, .6 5. .0 57 K i g e z i 7, .1 6. .2 11, .8 42 .0 0 , .1 5. .0 72 Toro 6 , .5 9 . 0 18, .6 11, .0 0. .9 2. .0 48 BUGANDA PROVINCE Masaka - - — - - — 7, .9 24. .7 4. .0 5. .0 42 E a s t Buganda - - - - — - - 6. .1 23, .6 6 , .8 5 , .0 42 West Buganda - - — — — 12, .4 11, .7 5. .1 5. . 0 34 Mubende — - - — - - - - — - - - - - - - - - -EASTERN PROVINCE B u g i s u S e b e i — — -- — 12, 15, .4 .8 44, .4 0. .1 5. .0 78 B u k e d i - - — - - — 1, .3 74. .2 0 . 1 5. .0 81 Busoga - - — — — 4 . 5 56. .6 1. .7 5. .0 68 Teso — — — - - 1. .2 55. .2 2. .1 5. .0 64 NORTHERN PROVINCE A c h o l i 6 . 5 1. ,0 3 . 7 9 . 1 0. ,2 2. .0 22 Lango — - - — - - 1. .7 23. .3 2. .1 2. .0 29 Madi - - - - - - - - 7 , .7 10 . 5 0. .1 2. .0 20 West N i l e — - - 1. .5 6 . ,4 9. .3 0. .04 2 . ,0 19 KARAMOJA PROVINCE 5. .4 25. 1 13 . .5 0. .1 — - - 2 . , 0 47 S o u r c e : Lockwood C o n s u l t a n t s L t d . (19 7 1 ) . i n Uganda, include the competition between areas set aside for w i l d l i f e protection and the increasing amount of grazing land which i s required for Uganda's expanding c a t t l e population''". Another potential c o n f l i c t which might arise i f an o v e r a l l national shortage of farmland developed i n the future, concerns the i n c l u s i o n of con-siderable areas of "best a g r i c u l t u r a l land" within the 2 boundaries of the national parks . No views\were expressed on c o n f l i c t s between agriculture and forestry although, t h i s does not negate the existence of the potential for such a c o n f l i c t . Besides competition, forestry and agriculture may co-exist or complement each other. These r e l a t i o n -ships have not been studied s u f f i c i e n t l y to allow any concrete judgements. Integration of forestry with a g r i -culture, known as the shamba system, i s practised to a li m i t e d extent i n Sebei d i s t r i c t (Kriek, 1967b). Elsewhere, i t has often been stated that, i n pursuing solutions to the planning and integration of forestry and agriculture, regional land c a p a b i l i t y surveys are necessary (Ellefson, 1974; Adeyoju, 1975). However, Cunningham (197 3) believed these may be of li m i t e d value since i t i s the resources available to a p a r t i c u l a r farm unit which are of relevance. Ideally, i n evaluating land use alternatives there should be a clear d e f i n i t i o n of landowner's goals, objectives and p o l i c i e s so as to match use c a p a b i l i t i e s to demand. T o o often, judgements have been made on h i s t o r i c a l evidence rather than on future p o s s i b i l i t i e s where technological innovation, s t r u c t u r a l change, product demand, and.other factors are taken into account. In other words, one should simultaneously determine the size of t o t a l production, product prices, and d i s t r i b u t i o n among regions and size classes (Strand, 1969) . According to Petrin (quoted i n Strand (1969) and Adeyoju 1975), economic rent should be plotted against use capacity of the land, and arranging these i n a decreasing order, the use best suited at a given technological l e v e l chosen. Ferguson (1974) and Dargavel and Ferguson (1975) emphasized the u t i l i z a t i o n of economic p r i n c i p l e s , e s p e c i a l l y the c r i t e r i o n of "net s o c i a l benefit", i n guiding land use decision makers to choose the use best suited to a given t r a c t of land. However, they agree that the ultimate choice i s a p o l i t i c a l one. In Uganda, a physical'.land c a p a b i l i t y study was undertaken and resulted i n the establishment of f i v e zones,' based on c l i m a t i c conditions and the nutrient status of the s o i l (Table 28). To the extent that t h i s zoning was primarily for agriculture, i t does not mean for example that zone 3 i s less productive compared to zone 1 for forestry. Productivity i n forestry i s determined by the species grown, demand for its wood and s i t e . ' Elsewhere, marginal a g r i c u l t u r a l land has been proven to be economically productive (Jeffe 1976; MacDonald, 1976);or "supra-marginal" (MacGreggor, 19.6 2) for forestry. -.95-TABLE 28. The Relative D i s t r i b u t i o n of Ecological Zones In Uganda by D i s t r i c t Groups Region Busoga Bukedi East Buganda West Buganda Sebei Teso Bugisu Toro Mubende Bunyoro Masaka Ankole Kigezi West Nile Madi Acholi Lango North Karamoja South Karamoja E C 0 L 0 G I C A !• ZONES 1 2 14 58 2 8 0 3 4 (%) 30 15 43 12 18 13 55 14 3 34 51 12 8 30 39 23 3 10 51 36 57 38 5 0 0 0 0 42 58 Total 100 100 100 100 100 100 100 100 Zones 1 and 2 considered best for a g r i c u l t u r a l use Zone 3 - marginal a g r i c u l t u r a l land Zones4 and 5 suitable for livestock grazing but not crop c u l t i v a t i o n . Source: Uganda Ministry of Planning and Economic Development (1972). The factors that influence land use decisions include: (a) cost-benefit r a t i o s of the d i f f e r e n t land uses; (b) economic location of the crops and supply of and demand for the competing products;(c) d i f f e r e n t time pattern scales, labour requirements; (d) p o s s i b i l i t y of using the products for i n d u s t r i a l i z a t i o n ; (e) comparative advantage i n international trade of producing the various products; and (f) t h e i r possible contribution to the balance of payments (King, 1965) . In Uganda, the l a s t f i v e factors c o l l e c t i v e l y express government's p o l i c y to d i v e r s i f y and modernize the economy. These factors should a l l be investigated and i n addition, continually revised i n view of t h e i r dynamic nature. A useful a n a l y t i c a l procedure for land use planning i s that outlined by Ferguson (1974) which involves i n a step wise manner: estimating the resource inventory ; d e f i n i t i o n of supply al t e r n a t i v e s , development of an input-output model, estimation of aggregate demand, and f i n a l l y , analysis of the optimum a l l o c a t i o n of resources. However, such analyses require adequate information on future needs, and the a v a i l a b i l i t y of resources and the time needed to make decisions now to meet the present demands placed on the land (Taylor, 1975) . These requirements represent obvious constraints i n evaluating land use a l t e r n a t i v e s i n Uganda. 4.20 Size of the Forest Estate The a l l o c a t i o n of land to various uses, land use c o n f l i c t s and a r a t i o n a l economic approach to evaluating land use alternatives were outlined above. I t was only recently that zoning based on physical c r i t e r i a was under-taken i n Uganda. Therefore, whatever land use pattern has developed, did so on an evolutionary basis. I t was i n d i r e c t l y governed by the response of the peasants to economic opportunities and aided by government p o l i c i e s . This statement i s only true for the a g r i c u l t u r a l sector. Forests are p u b l i c l y owned. Their geographical d i s t r i -bution and extent must, therefore, have been c e n t r a l l y determined. Was i t based on physical or economic c r i t e r i a or a combination of both? A considerable debate has existed over how much forest area a country or region needs. To a large extent, i t should be determined by the o v e r a l l economic de-velopment strategy and subsequent formulation of an appropriate land use p o l i c y for a given country. A p r i o r i , there i s no need for any country to have any forest estate at a l l i f i t can i n the long-run, import the goods and services obtainable from forests cheaper than i t s own production. In practice, although i t may be feasible to import a l l or most wood products, a minimum area of protective forests might prove necessary. I f there i s an e x p l i c i t or i m p l i c i t advantage i n a region having i t s own forest estate from which the goods and services demanded by society are produced, then economics suggests that, as much land should be allocated to forestry as i s economically feasible and e f f i c i e n t . Production -98-protection and recreational goals derived from socio-economic factors that generate both domestic and ex-ternal demand for these goods and services should de-termine the size of the forest estate (Adeyoju, 1975). More e x p l i c i t l y , Clawson (1975) observed that i n the United States the size of the forest area should be determined by forest p o l i c y , a v a i l a b i l i t y of funds for management, tradeoffs between i n t e n s i f i c a t i o n of management and expansion of the forest estate, species planted ( i f desirable) and t h e i r uses, and persons bearing the costs and those to whom benefits accrue. These broad guidelines can be applied to other areas too. Table 29 and Figure 3 i l l u s t r a t e the progress made i n creating a forest estate for Uganda. From these i t can be seen that the area declared as national forest reserves fluctuated considerably. This appears to contradict the d e f i n i t i o n of "forest reservation", which according to Troup (1940), i s the setting aside of areas of permanent maintenance over forest. In r e a l i t y , though reserved as permanent forest land, additions to and excisions from the estate do take place i n l i g h t of changing s o c i a l , p o l i t i c a l 3 and economic conditions . The Minister responsible for forestry can amend boundaries. In Uganda, p o l i t i c a l factors seem to have been a major cause of re-ductions i n the size of the forest estate. For instance, the dramatic decrease i n 1953 was due to the d i v i s i o n of -99-the forest estate into Central and Local Government. administrative units. Under the l a t t e r ownership, several adjustments to the forest area was made, and more land degazetted. Afte r independence i n 1962, the strengthened p o l i t i c a l power of the Local Governments and Kingdoms coupled with t h e i r increased autonomy, caused a further reduction between 1962 and 1966. The size of the forest estate increased a f t e r creation of a republican status for Uganda, with forest resource management r e s p o n s i b i l i t i e s transferred to a single Uganda Forest Department (Appendix I I ) . However, i t s size has since then never exceeded the peak of 1950. The strategy the c o l o n i a l forest o f f i c e r s used i n reserving forest land was that of maximum reservation before considerable pressure from r a p i d l y increasing 4 population made i t d i f f i c u l t . This trend i s i l l u s t r a t e d i n the rapid progress made i n "forest reservation" between 1936 and 1950 (see Figure 3). The greatest i n h i -b i t o r of reservation of forest land a f t e r 1950 was the policy 5 of establishing a minimum area under forests . For the policy of minimum area to be successful, the land must be suitable for the purpose for which i t i s reserved. This was not the case i n Uganda. True, the protection forests were reserved where needed, but there was no r a t i o n a l analysis of how much land would be committed to production forestry. Generally, "planned land use i n any area would -100-TABLE 29 • The Progress of Forest Reservation i n Uganda (1932-1971/72) YEAR AREA KM GAZETTED DURING THE YEAR TOTAL GAZETTED AREA AT END OF THE YEAR ('00 ha) Crown Native Forests Forest Reserves 1932 3615 3615 33 46 — 3661 34 — — 3661 35 — — 3661 36 — — 3661 37 1590 — 5251 38 2591 — 7842 39 1308 72 9222 1940 3149 223 12594 41 973 36 13603 42 1851 172 15626 43 13 389 16038 44 92 3 16123 45 3 — 16126 46 648 18 16792 47 61 51 16904 48 271 202 17377 49 49 54 17480 1950 30 108 17624 51 — — 17457 52 — — 17175 53 — — 15795 54 — — 15762 55 — — 16330 56 — — 16000 57 — — . 16507 58 — — 16507 59/60 — — 15867 1960/61 — — 15867 61/62 — — 15941 62/63 — — 14886 63/64 — — 14886 64/65 — — 14451 65/66 — — 14472 66/67 — — 14469 67/68 — — 15867 68/69 — — N.A. 69/70 — — N.A. 1970/71 — — 16158 71/72 — — N.A. N.A. - Not-available -Source: Uganda Forest Department Annual Reports (1930- 71) . Figure 3 Progress i n Gazetting Government Forest Estate in Uganda -102-need to take cognizance of short and long-term r e-quirements and of the stage of economic development" (MacGreggor, 1962). This was not the case i n Uganda. Product requirements and the c a p a b i l i t y of the forests i n meeting these were never adequately defined. There was no consideration of the co-existence or complemen-tary relationship between forestry and other land-using resources. Nor was there an evaluation of the f i n a n c i a l consequences of i n t e n s i f y i n g management to obtain the maximum possible y i e l d from the target area. Because of t h i s , the p o l i c y of maintaining minimum area was not only a f a i l u r e , but seriously constrained the p o s s i b i l i t y of a greater role forestry could have played i n the economic development of Uganda. According to Uchendu (1967), neither the economist who provides insights into the problems of development nor the c i v i l servants who suggest the po l i c y guidelines, or the p o l i t i c i a n s who make the f i n a l p o l i c y decisions, are agreed on the best strategy for developing backward economies. This i s because there i s no single best strategy. The deep seated yearning for a monolithic approach and general law v a l i d for a l l climates and a l l times i s obsolete. For instance, Uganda's forest estate i s estimated at 8 percent of t o t a l area', and there have been opinions expressed to increase t h i s to 10 percent. -103-This estimate was probably based on a general B r i t i s h Empire approach rather than socio-economic factors pertaining to Uganda i n p a r t i c u l a r . Establishing the desired percentage of t o t a l area under forests i s mis-leading because i t depends on the type of vegetation included and gives no i n d i c a t i o n of value and producti-v i t y of the land (Troup, 1940); at best a r b i t r a r y , baseless and u n r e a l i s t i c (Mabogunze e t a l . , 1969), and i t ignores the absolute size of that area, and the popu-l a t i o n the area i s to support. Therefore, Enabor (19 76) suggested an index of per capita forest area as being more desirable. Table 30 shows the two indices of a v a i l a b i l i t y of forest land. For example, whereas the proportion of forest areas i n Nigeria, Ghana, Ivory Coast and Dahomey a l l exceed 30 percent, on a per capita basis Nigeria's forest lands are not substantially d i f f e r e n t from those of Kenya and Uganda. To make these relationships more meaningful, a greater number of factors w i l l have to be considered (such as s p a t i a l d i s t r i b u t i o n , age classes, rate of growth and purchasing power of the population) than the two indices above. In any case, they both have i m p l i c i t assumptions about physical s e l f - s u f f i c i e n c y i n goods and services derived from forests, a potential source of economic i n e f f i -ciency. A minimum area was advocated for forestry because the sector was made subservient to a g r i c u l t u r e . In t h i s case, forestry was more a government service provided to farmers than an economically viable land use commitment capable of competing with a g r i c u l t u r e . The rationale for this kind of action i s what Kromm (1972) had i n mind when he referred to forestry as a " r e s i -dual land use" i n the United States, providing benefits from s o i l which might otherwise be unproductive. Kromm argued that forestry i s often the best land use strategy available for regional development where phy-s i c a l , economic and s o c i a l conditions preclude the es-tablishment of more p r o f i t a b l e a c t i v i t i e s such as pro-ductive a g r i c u l t u r e . His type of reasoning i s what must have prevailed i n the minds of the early foresters i n Uganda. But i t i s erroneous because i t ignores most economic considerations and i s reinforced by the t r a d i -t i o n a l deep-seated fear held by most foresters that forestry cannot compete with agriculture economically (King, 1965) . Furthermore, unless one can demonstrate for a given country or region under the same conditions, a "non-space, non-residual land using a c t i v i t y " can do better than forestry, Kromm's contentions are fa l s e (Gregerson, 1973); and so are those of the early fores-ters of Uganda. F i n a l l y , terms l i k e "productive" or "unproductive" are meaningless i n physical terms when considering land use a l t e r n a t i v e s . For example, pro-duction functions of a g r i c u l t u r a l crops and trees are r . i o - 5 -TABLE 30' Comparative S t a t i s t i c s of Forest Land Area i n Selected A f r i c a n Countries i n 1970 COUNTRY Forests as % of Total Area Forest Land Per Capita (%) (ha/person) Uganda^ a 8 0 . 2 Nigeria 34 0.5 Ghana 52 1.5 Ivory Coast 38 2.6 Gabon 75 41.7 Kenya 4 0.2 Zaire 57 7.7 Cameroon 52 4.3 Dahomey 38 1.6 Angola 58 13.4 Tanzania 38 2.7 /a not included i n o r i g i n a l data (Source: Lockwood Consultants Ltd. y (1971). /b not included i n o r i g i n a l data (Source: Forest Products Yearbook 1969/70). Source: Enabor (19 76). -106-d i f f e r e n t . Therefore, productivity can only be related to gross or net value product (MacGreggor, 1960) and problems associated with i t s measurements for purposes of land use comparison have been discussed, by King (1965) . A h i s t o r i c a l trend of planning for development i n Uganda was sketched out i n Chapter Two, i n which, i t was shown that before the '60s there was no " r e a l " plan. Therefore, since the 8-10 percent forest land c r i t e r i o n was fixed before the "planning era", there i s now need to re-evaluate t h i s aspect of forest p o l i c y . I t i s i n -teresting to note that the time "desirable" proportion of forest area was established, most of the production forests were t r o p i c a l high forests (THF). But i t i s apparent that the r e a l i z a t i o n of the forestry p o t e n t i a l of a region based on THFs i s seriously handicapped by the heterogeneous nature of these forests, the low volume of marketable trees per unit area, technical d i f f i c u l t i e s i n m i l l i n g or processing a wide range of hardwoods for lumber and particleboard, costly processes for pulp and paper manufacture from mixed t r o p i c a l hardwoods and the lack of information on the properties of many species (Nelson, 1973) . Therefore, with incomplete information on the capacity of the reserved forests to provide goods and services desired by society, the size of the forest estate i n Uganda was based mainly on "guesstimates". Even i f assessment was based on physical c r i t e r i a alone, -107-these also were poorly understood. In the statement of "minimum area", there was once a desire to declare 8 percent of the area of each d i s t r i c t forest land, so as to make i t s e l f - s u f f i c i e n t . However, s e l f - s u f f i c i e n c y f i r s t at the national, then at the d i s t r i c t l e v e l ignores s p e c i a l i z a t i o n based on s u i t a b i l i t y of the land for al t e r n a t i v e uses. I t also ignores differences i n productivity of the lands so set aside. F i n a l l y , growth trends in'the size of the forest estate, roundwood production, population and agriculture i n Uganda (based on an index of 100 for the year 1956) are shown i n Table 31 and Figure 4. Between 1930 and 1970, roundwood production index increased from 117 to 343 giving a compound annual growth rate of 2.7 percent and i s s t i l l showing an upward trend. The size of the forest estate increased from an index of 23 i n 1932 to 100 i n 1943, giving a compound annual growth rate of 14.3 percent. However, between 1943 and 1970, there was l i t t l e change i n the size of the forest estate, being between 90 and 110. Between 1956 and 1970, the index of round-wood production increased from 100 to 343 and that of agriculture from 100 to 177, giving annual compound growth rates of 9.2 and 4.2, respectively. To the ex-tent that the size of the forest estate was more or less constant, this rapid increase i n roundwood production TABLE 31 - 108 -Growth Trends>-in: the Size of F o r e s t Estate, Roundwood P r o d u c t i o n , P o p u l a t i o n and A g r i c u l t u r a l P r o d u c t i v i t y Index i n percent (19^6 - 100) In Uganda. Y e a r F o r e s t E s t a t e /a Roundwood' /b P o p u l a t i o n T o t a l A g r i c u l t u r a l P r o d u c t i v i t y I n d e x / d 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959.5 1960.5 1961.5 1962.5 1963.5 1964. 1965. 1966. 1967. 1968. 1969 , 1970, 1971 1972 1973 1974 1975 117 123 23 104 23 101 23 99 23 117 23 141 33 160 49 187 58 185 79 105 85 147 98 152 100 194 101 206 101 206 105 195 106 148 109 133 109 138 110 142 109 160 107 148 99 147 99 124 102 127 100 100 103 98 103 -99 — 99 158 100 158 93 143 93 148 90 107 90 199 90 187 99 225 _ 289 296 101 343 85 60 64 76 86 100 103 105 108 111 114 116 119 122 126 129 132 135 139 143 147 151 155 159 164 100 103 108 108 123 114 134 137 145 155 158 153 173 179 177 173 174 159 149 144 Source: a/and b/ Uganda's f o r e s t Dept. Annual Reports (1930-) c - USDA(1976) and data f o r 1930 to 1955 i n t r a p o l a t e d from 19 56 data at. -2.5% compound growth r a t e d - USDA (1976) . Forest estate Roundwood production Total agricultural productivity index Population 63 64 &3 7® fg '3?-j SS S ^ 42 4« 44 a ^ SS 2« FIGURE 4. Growth Trends in Size of Forest Estate, Roundwood production, Population and Total Agricultural Productivity Index Source: Table 31 -110-could have been due to i n t e n s i f i c a t i o n i n management (producing and harvesting more wood per unit area). The size of the forest estate by forest cate-gories i s shown i n Table 32. The productive areas are the t r o p i c a l high forests and plantations, 746 518 ha (or 46% of the t o t a l forest estate). This confirms that the p o l i c y of "reserving" protective forests i n preference to enlarging the area under productive forests was adhered to. The t r o p i c a l high forests were o r i g i n a l l y extensively managed, or given "custodial management". Areas referred to as "other vegetations" are valuable mainly for t h e i r s o i l s and watershed values and frequently occur beyond timber l i n e s exceeding 2000 meters above sea l e v e l . Therefore, t h i s area i s above the timberline and i t s pote n t i a l for wood production limited (the scrub bamboo areas). I t occupies 5 percent of the forest estate. Western and Buganda provinces have the greatest concentration of t r o p i c a l high forests (Table 33). The Eastern Province has considerably, less while Northern Province almost none. The d i s t r i c t s Teso, Lango, West Nile and Karamoja (two d i s t r i c t s ) have no closed forest land recorded. The areas under forest plantation vary l i t t l e at the p r o v i n c i a l but substantially at the d i s t r i c t l e v e l s . Madi and Karamoja have very l i t t l e plantation. The -111-TABLE '32 Forest area of Uganda i n 19 71 Forest Type Area (in hectares) 1. Tropical High Forests 724 ,470 2. Plantations Softwoods 9 252 Eucalpts 9 849 Other hard-woods 2429 Total Plantation Area 221,048 3. Savanna Woodland 781,722 4. Other Vegetations (mainly montane neaths, bamboo and wet grasslands) 87,514 TOTAL FOREST ESTATE: 1,615,754 Source: Lockwood Consultants Ltd. (1971). TABLE 33 SUMMARY OF PRESENT DISTRIBUTION OF FORESTS, LANDS WHICH HAVE CLOSED FOREST PLANTATIONS AND SAVANNAH TYPES WITHIN FORESTRY RESERVES IN UGANDA AND/OR PLANTATION STOCK Closed Forest Hectares Plantation Pruned area Subtotal LANDS WHICH HAVE SAVANNAH, WOODLAND &  OTHER TYPES (i•e•Grasslands,Moorlands Savannah & Other ) Woodlands Hectares Types Subtotal Hectares % Hectares Hectares Hectares % Total Area Under Forestry Reserves Hectares WESTERN PROVINCE ANKOLE 87377 1377 88754 91 1176 7099 8275 9 97029 BUNJORO 108122 420 108542 58 53792 23769 77561 42 186103 KIGEZI 37052 2579 39631 68 16230 2680 18910 32 58541 TORO 213649 2013 215662 94 8519 4998 13517 6 229179 TOTAL 446200 6389 452589 79 79717 38546 118263 •21 570852 BUGANDA PROVINCE MASAKA 39207 191 39398 51 38224 38224 49 77622 EAST MENGO 57024 1571 58595 51 55787 518 56305 49 114900 WEST MENGO 27040 2622 29662 78 8542 8542 22 38204 MUBENDE 45473 228 45701 53 39964 39964 47 85665 TOTAL 168744 4612 173356 55 142517 518 143035 45 316391 EASTERN PROVINCE BUGISU 31205 789 31994 61 20761 20761 39 52755 SEBEI 60398 492 60890 91 855 5422 6277 9 67167 BUKEDI 2233 632 2865 55 2354 2354 45 5219 BUSCGA 3256 3169 6425 16 16849 16599 33448 84 39873 TESO 782 782 6 12540 194 12734 94 13516 TOTAL 97092 5864 102956 58 30244 45330 75574 42 178530 NORTHERN PROVINCE ACHOLI 11140 986 12126 12 89978 3120 93098 88 105224 LANGO 1084 1084 5 19072. 19072 95 20156 MADI 1294 12 1306 4 33097 33097 96 34403 VEST NILE 3000 3000 4 65418 65418 96 68418 TOTAL 12434 5082 17516 8 207565 3120 210685 92 228201 KARAMOJA 101 101 321679 321679 100 321780 TOTAL UGANDA 724470 22048 746518 46 781722 87514 869236 54 1615754 * This included reserves i n process of gazetting Source: Lockwood Consultants Ltd. (1971). -113-l i t t l e that does e x i s t i s mostly i n experimental p l o t s . D i s t r i c t s with largest plantation areas are Busoga and West Nile with 3169 and 3000 ha, respectively. West Buganda, Kigezi and Toro d i s t r i c t s have over 2000 ha each, while Ankole, East Buganda and Lango have just over 1,000 ha. A l l other d i s t r i c t s have less than 1000 ha, with Bunyoro, Seibei, Mubende and Masaka having less than 500 ha. The potential timber stock area comprises 46 percent (746,518 ha) of the country's forest land while savanna woodlands, the p r i n c i p a l source of supply for poles and fuelwood, constitute 48 percent. The l a t t e r have potential for charcoal production as well as being reserve capacity for plantation expansion. Another s i g n i f i c a n t feature of forest lands i s the d i s t r i b u t i o n with respect to t h e i r size and number by d i s t r i c t s . Twenty percent of the forest estate i s over 5000 ha i n siz e , twenty two percent between 5000 and 500 ha and f i f t y . e i g h t percent between 500 and 10 ha. Buganda Province has the largest number of forest land units i n t o t a l , while Karamoja dominates i n those of the larger size category. These results are re-presented i n Table 34. The s p a t i a l d i s t r i b u t i o n and size of forest estate units have special s i g n i f i c a n c e for economic e f f i c i e n c y (with respect to the cost of a v a i l a b i l i t y and economies of scale) . Although progress i n establishment of Uganda's TABLE 34 SIZE DISTRIBUTION OF FORESTRY RESERVES IN UGANDA PROVINCE AND over 1000 ha 500 ha 100 ha LESS THAN TOTAL NO. OF DISTRICT 5000 ha to 1000 ha to 500 ha to 100 ha to 10 ha 10 ha RESERVES ( Number ) WESTERN PROVINCE ANKOLE 4 2 0 1 6 3 16 BUNJORO 4 12 5 18 7 1 47 KIGEZI 2 3 0 6 4 2 17 TORO 7 9 3 6 5 7 37 TOTAL 17 26 8 31 22 13 117 BUGANDA PROVINCE MASAKA 5 8 4 25 22 4 68 EAST MENGO 6 13 7 31 15 1 73 WEST MENGO 1 7 8 35 11 1 63 MUBENDE 8 8 6 13 3 0 38 ; TOTAL 20 36 25 ' 104 51 6 242 EASTERN PROVINCE BUGISU 1 0 2 0 7 0 10 SEBEI 1 0 0 0 0 2 3 BUKEDI 0 1 1 5 10 2 17 BUSOGA 3 4 6 12 20 4 49 TESO - 0---- 2 - -- • 3- ••• • -19 17 - - o 41 TOTAL 5 7 11 36 54 6 120 NORTHERN PROVINCE ACHOLI 7 11 3 8 4 19 51 IANGO 1 3 0 35 26 22 88 MADI 3 • 0 2 2 2 2 11 WEST NILE 1 7 9 17 21 7 62 KARAMOJA 12 4 2 0 1 0 19 TOTAL UGANDA . 65 94 61 233 180 75 710 PERCENTAGE 9 13 9 33 25 11 100 Source: Lockwood Consultants Ltd. (1971) -115-f'orest estate was depicted i n Figure 3, a much more detailed analysis of growth by i n d i v i d u a l estate units i s shown i n Appendix I I I . The o v e r a l l size of a l l forest estate units increased by 25 percent during the period 1964 to 196 8. Since then, there has been very l i t t l e increase, an additional 3357 ha. The rapid growth i n the size of the forest estate was c o n t r i -buted mostly by Buganda Province which alone achieved an 8 3 percent increase . For the rest of the provinces, growth was slow and i n some cases actual declines occurred. Between 196 8 and 19 71, excisions from the national forest estate occurred, 978 and 418 ha i n West Mengo and Lango d i s t r i c t s , respectively. Minor declines i n the growth trend of the forest estate occurred i n Ankole, Busoga and Karamoja d i s t r i c t s . The data presented above are inadequate for estimating the productive potential of the forest re-serves i n question. Productivity of a s i t e i s a re-f l e c t i o n of species grown, s o i l and c l i m a t i c conditions and management^. -116-Productivity classes given i n Table 35 are only relevant for the current l e v e l of management. Furthermore, these classes should be broadly interpreted. This i s so because, f i r s t l y , classes were based on s o i l types or groups, whereby Lockwood Consultants Ltd. (19 71) assumed physical s u i t a b i l i t y of s o i l s for agriculture could be applied to tree growth. Secondly, the s o i l type maps were of a re-connaisance nature and as such not sensitive enough to provide more d e t a i l . However, from the data available, 29 percent of the forest estate i s of high to medium productive c a p a b i l i t y i n terms of supporting tree growth. About 35 percent is- of low productivity. Therefore, be-sides land with high, medium and low productivity, 36 percent of the forest estate has l i t t l e or no productive c a p a b i l i t y for a f f o r e s t a t i o n . The main l i m i t a t i o n s associated with unsuitable lands are rocky, shallow s o i l t r a c t s and the wet depressional areas. F i f t y one percent (827,297 ha) of the forest estate consists of savanna woodland. Of t h i s , 454,500 ha i s considered of high, medium and low productivity c l a s s . However, when the l i m i t a t i o n s of climate are included, net productive area i s reduced to 276,050 ha or 34 percent. An estimation of the available productive land within savanna reserves suitable for plantation establishment and/ or expansion i s shown in Table 36. The largest con-centration of t h i s reserve capacity i s found i n Mubende d i s t r i c t , while Kigezi, Toro, Bugisu, Sebei and Karamoja d i s t r i c t s , have none. An Evaluation of the Productivity of Lands Within Forestry Reserves in Uganda PROVINCE AND TOTAL AREA I a n d s S ^ ^ f a nSvf a ^ p r o - . . M S ^ ^ J i t t l e _ DISTRICTS OF FORESTRY Productivity capacity ductivity Opacity o r ™ P^uctavxty capacity RESERVES CLASS 1 CLASS 2 TOTAL AREA CLASS 3 CLASS 6 HECTARES HECTARES % HECTARES % CLASS 1 & 2 HECTARES % ..HECTARES % WESTERN PROVINCE ' Ankole 97029 11912 12 13785 14 25697 69844 72 1488 2 Dunyoro 186103 35184 19 5995 3 41179 142347 76 2577 1 Kigezi 58541 779 1 1381 2 2160 56381 97 Toro 229179 64034 28 6456 _3 70490 96390 42 62299 27 TOTAL 570852 111909 20 27617 _5 139526 308581 54 122745 21 BUGANDA PROVINCE Masaka 77622 466 1 27064 35 27530 13318 36 36774 48 East Mango 111900 57273 50 21394 19 78667 . 15492 13 20741 18 West Mengo 38204 19632 51 5427 14 25059 5834 15 7311 20 Lubende 85665 8113 10 20117 23 28230 37911 44 19524 23 TOTAL 316391 85484 27 74002 23 159486 72555 23 84350 27 EASTERN PROVINCE Bugisu 52755 680 1 41798 79 42478 21 0 10256 20 Sebei 67167 8 0 40296 60 40304 0 26863 40 Bukedi 5219 0 2781 53 2781 1788 34 650 13 Busoga 39873 12578 32 17836 45 30414 5664 13 3795 10 Teso 13516 • 0 2026 15 ' 2026 10867 80 623 5 TOTAL 178530 13266 _7 104737 59 118003 18340 10 42187 24 NORTHERN PROVINCE Acholi 105224 0 5774 5 5774 20718 20 78732 75 Lango 20156 829 4 8778 44 9607 8102 40 2447 12 Madi 34403 0 20 0 20 792 2 33591 98 West Nile 68418 5052 7 2952 5 8004 3563 5 56851 83 TOTAL 228201 5881 3 17524 8 23405 33175 15 171621 74 KARAMOJA PROVINCE 321780 0 36634 10 36634 125397 10 159749 80 TOTAL UGANDA 1615754 216540 13 260514 16 487054 558048 35 580652 36 Source: Lockwood Consultants Ltd. (19 71). -118-TABLE 36 Summary of Estimated Available Productive ' Lands Within Savannah Reserves i n Uganda Area Of Plantations Hectares (ha) Productive Land From Savannah Reserve Assessment (ha) Estimated Available Productive Land Within Savannah Reserves For Plantation Expansion (ha) WESTERN PROVINCE Ankole 1377 Bunyoro 420 Kigezi 2579 Toro 2013 14,300 33,600 130 12,900 33,180 Total 6389 BUGANDA PROVINCE Masaka 191 East Mengo 1571 West Mengo 2622 Mubende 228 Total 4612 EASTERN PROVINCE Bugisu 789 Sebei 492 Bukedi 6 32 Busoga 3169 Teso 782 Total 5864 NORTHERN PROVINCE Acholi 986 Lango 1084 Madi 12 West Nile 3000 Total 5082 KARAHOJA PROVINCE 101 TOTAL UGANDA 22048 48,030 29,330 48,820 7,160 51,960 137,270 720 4,560 32,370 12,890 50,540 26,490 17,700 810 11,560 56,560 297,400 46,080 29,140 47,250 4,540 51,74 0 132,670 3,930 29,200 12,100 45,230 25,500 16,620 790 8,560 51,470 276,050 S o u r c e : Lockwood C o n s u l t a n t s L t d . ( 1 9 7 1 ) . - 1 1 9 -Another important feature of the forest resource i s i t s composition by forest types', Table 3 7 shows the d i s t r i b u t i o n of t r o p i c a l high forests (THFs) by u t i l i z a t i o n classes and plantation types. I t i s evident that great regional d i s p a r i t y e x i s t s . Western Province appears the most well endowed with both THF and forest plantation resources, whereas plantation forestry i s more dominant i n the forest estate of the Northern Province. The remaining provinces show a mixed picture. I t would seem ?therefore, that the encouragement of forestry a c t i v i t i e s to enhance increases i n r e a l per capita income and d i v e r s i f y the r u r a l economy should be designed in such a way as not to accentuate regional economic di s p a r i t y . The c h a r a c t e r i s t i c s of the forest with respect to i t s growing stock and the kind of industries i t can support, influence the degree to which the resource may contribute to regional and national economic development. In addition, other factors (including climate and so i l s ) may constrain optimization of a possible economic con-t r i b u t i o n . The discussion on the location and d i s t r i b u t i o n of the forest area and i t s productive potential and the c h a r a c t e r i s t i c s of actual and p o t e n t i a l growing stock, i s an indicator of the possible response that may be obtained by expanding forestry a c t i v i t i e s . I f i t i s desired to increase the size of the forest estate, a rough index for determining the location of future forest plantations i n Uganda w i l l be indicated i n Chapter Seven. TABLE 37 SUMMARY OF AREAS OF TROPICAL HIGH FORESTS (THF) AND PLANTATION FORESTS OF UGANDA WESTERN PROVINCE Ankole Bunyoro Kigezi Toro Utilization Status Categories 1 2 3 4 ( Total THF Eucalyptus Fuel and Pole Plantations Softwood .Plantations Hardwood Plantations Productive Total Firelings Plantation 13126 27182 46891 - 178 87,377 82618 25504 - - 5341 113,463 388 31323a - - 31,711 66481 800 22715 22356 101297 213,649 29 175 237 176 1036 269 2203 1743 51 2 125 94 1377 450 2574 2013 BUGANDA PROVINCE Masaka East Buganda West Buganda Mubende EASTERN PROVINCE Bugisu Sebei Bukedi Busoga Teso NORTHERN PROVINCE Acholi Lango Madi West Nile KARAMOJA PROVINCE South North TOTAL UGANDA (ha) (%) U t i l i z a t i o n st, 39207 84064 45473 663 10000 11216 11140 1294 71957 3256 39,207 84,064 45,473 93,836 3256 11,140 1294 180 87 1939 53 1120 2711 683 387 626 12 1102 101 711 68 165 649 132 99 255 228 1684 773 615 122 326 344 230 10 214 191 1571 2622 228 1891 3169 782 986 1084 12 3000 101 331,632 63,874 124579 25612 178773 724470 9879 9247 2429 496 22051 46 9 17 3 25 100 45 42 11 2 100 -us categories 1 - 5 are based on economic a c c e s s i b i l i t y with c l a s s e s 1 to 3 being c u r r e n t l y e x p l o i t e d Source: Lockwood Consultants Ltd (1971) . - 1 2 1 -4.30 Species Composition, the Growing Stock and  Roundwood Supply The t r o p i c a l forest areas are composed of an admixture of species (about 500), but only a few of them are of any commercial importance. Species whose timbers are high q u a l i t y and^therefore^commonly used for furniture include: Chlorophora excelsa Benth. and Hook f., Eritandrophragma spp. Khaya spp. (such as Khaya arithotheca C. DC), Plea spp., Fagaropsis  ahgolensis Greenway, A l b i z i a c o r i a r i a Welw., Lovoa spp., Hoioptelea grand!s Mildbr. These species are c h a r a c t e r i s t i c a l l y slow growing. The main species used for general purpose plywood are: A n t i a r i s t o x i c a r i a , Rumph ex (Pers.) Lesch, Canarium schweinfurthii Engl., Pycnanthus angolensis (Welw.) E x c e l l . and C e l t i s spp. In addition, P o l y s i c i a s fulva (Hiern) Hams and Funtumia spp. are considered poten-t i a l l y good plywood species. However, the l a s t two species together with Maesopsis eminii Engl. are currently used i n large quantities for match making. C o l l e c t i v e l y , t h i s group of species are fas t growing l i g h t demanders that get eliminated when a t r o p i c a l high forest reaches a climax state. Cynometra ale x a n d r i i C H . Wright (an a t t r a c t i v e and heavy wood with a high resistance to wear), P a r i n a r i  excelsa Sabine (currently the main source of mining timber), Erythrophleum guineense G. Don and Holoptelea -122-grandis Mildbr. are the most important species s u i t -able for f l o o r i n g . F i n a l l y , a very wide range of species i s used to provide timber for construction and joinery. Individual t r o p i c a l high forests d i f f e r with respect to the amount of stocking by the species above. For example, C. alexandrii i s a climax species i n Bugoma, Maramagambo, Semliki and Budongo forests; whereas Par i n a r i excelsa forms the dominant species i n Kibale-Itwara, Kalinzu and Kasyoha-Kitomi forests (see Figure 5 for location of these f o r e s t s ) . There are plantations of both coniferous and non-coniferous species. The main ones are: (1) pines (P. patula Schl. Cham., P. caribaea Morelet var. hondurensis, P. oocarpa and P. radiata D. Don): (2) cypress (Cupressus  l u s i t a n i c a M i l l . ) ; (3) eucalypts (Eucalyptus grandis (Hill) Maiden, E. t e r e t i c o r n i s Dehnh and E. robusta Smith); and (4) indigenous hardwood species (Maesopsis  eminii Engl.). The choice of these species was based on species and provenance t r i a l s (Kriek, 1976a and b; 1968a, b, c, d and e). To determine the amount of timber available i n the THFs, an enumeration i s normally c a r r i e d out at a sampling i n t e n s i t y of 1% by area. The data are recorded for i n d i v i -dual or groups of species depending on t h e i r d e s i r a b i l i t y and marketing c h a r a c t e r i s t i c s (Dawkins, 1958). A major enumeration of the THFs of Uganda was carried out in /the early T»5prtl, H*CH FOREST RESERVES ICO MWC* WCCD »RCCESS'N5 FACILITIES A r.^..— i / . . . J X-Tt • tfc?lcr.l Ri.H Jercat # SavnU 1» D fjyve-d Hill WOOD 3. fcillmu 3.000 ** t . 3,003 ** 8. SIV.h 1,800 * I. Tridents 1C.500 ** 5,500 * £00 * 4,000 * 10. K.-.^ Jn<Il 710 * 11. 157 • 13. Enst African 8,000 *• 1,500 • t^ r.knta l,3M ** ;,*eo * Sikh 5.3:0 * Sikh rij'vcsd Hill If. 500 *• 1.350 * j.:cd » r.ico * • Pred^ ctle:! 196? - 1970 ** Proli-e-.ic:) 19 0 - 1971 (in cvtle Mi) EXISTING AND NCRflC SOFTWOOD PLANTATIONS AN3 SOFTWOOD SA'.VMILUS ( «r S / / 'c /I ) 1 / / • J 'C t.\^ '—3 — ) Mad: Trr«t. UE - 1973 * : . J. "^•-.iS'Ti." r«re«:. »C 5.ICC *r* - 1973 + j. RtiiftTj Htm, MS r - 1*73 * v.-*-T\.-K'.zrzl Tart*:. A.*: : « . « * - 1573 • •?. Mitle-rr-in *c;t»-. MS K . t t S >f1 - 1?73 • 10. ZcVa TaresE, AAC 900 t? 1973 - 2000 11. L«*f^ore 7or»r!.(:«. AAC 7,POO Jf1 - 1991 :2. Tirej;. AAC 1971 - 19?3 13. '-ent yengo Tqreits, MC.ll.^ro I»73 - I9«3 9.00A r \**L - 3^00 li. y«btr« Ter-a:, AAC 15.7'-0 1?7] - 1953 9,000 K 1994 - 2P10 13. Zl|cn rereads, fl,5AC ^ 3 1973 1*. JCinstill Tcrtnt, AAC 2,'"0 M3 1S73 - 1^87 17. Busoga PuMlc Lwds, AAC - 6,100 M 1. Xafiiga Plantation y.st-jr.a S3v^lll3 (1.3C0 yj JT.TV, 1970-71) 2. KuKo Plan'.ntlcfv 3. Bu£ar.b.i -P.vr'^ o riaatatlco 4. Klbale Flantntlcn 5. Hvcn(;e Croup Plantations KyrJiete S.^Tills (l.:-00 H3 s-vn. 1970-71) - SCO >a. - iOO V.a. - 1,203 h«. 9. C?lt. Civil Fl*r*.a-.l 10. Ka>:>'.rp P!f.r'.it!ca rO CO I AAC - A.-.r.ual Allwable Cut FIGURE 5. L o c a t i o n of the major THFs and softwood p l a n t a t i o n areas and e x i s t i n g wood p r o c e s s i n g f a c i l i t i e s . Source. Lcckwood C o n s u l t a n t s L t d . (1973). -124-f i f t i e s (1951-55) and more recently by Lockwood Consultants Ltd. (1971). There i s no r e l i a b l e information about t o t a l increment i n the THFs. An average diameter increment for an i n d i v i d u a l tree has been estimated at ca. 1.0 cm per year over a ten year period. In mature (climax) unexploited forest, net increment for a stand i s approximately zero; whereas, i n a forest that has been exploited and refined, stand increment i s about 2.1 to 3 4.2 M /ha/annum of marketable timber. I f a harvested area i s enriched by planting, a mean annual increment 3 of 7 M /ha/annum i s f e a s i b l e . The volume of timber i n THFs recorded by the Uganda Forest Department does not re f e r to the t o t a l . volume of the growing stock. Rather, t h i s volume i s the r e l i a b l e minimum estimate of exploitable volume above a diameter l i m i t , usually 50 to 60 cm. The timbers are normally divided into two groups, those which are com-pulsory to cut and those for which cutting i s optional. The main c r i t e r i o n for c l a s s i f y i n g a species "compulsory" i s i t s market value. To meet the aims of management for the conversion of the THFs of Uganda into a uniform system and put timber production on a sustained y i e l d basis, the volume of wood cut annually i s l i m i t e d . The l i m i t i s related to the annual volume of compulsory species that can be harvested, while other species can be cut without any -125-l i m i t i n volume, but are l i m i t e d to the area where the compulsory species w i l l be cut i n a given year. Where s u f f i c i e n t data have been c o l l e c t e d about the growth c h a r a c t e r i s t i c s , annual increment and ex-pected y i e l d for a l l the main species i n Uganda's forest plantations, accurate data on growing stock and timber supply can be worked out. The main study on the growth and y i e l d of softwoods was c a r r i e d out by Kingston (1973) and more s p e c i f i c a l l y , Karani (1976a) for P. patula and Karani (1976b) for C. l u s i t a n i c a . A much more comprehensive y i e l d simulation model de-veloped by Adlard and Alder (1975) at the Commonwealth Forestry In s t i t u t e (Oxford) i s now available for the main softwood species grown i n Eastern A f r i c a (Kenya, Malawi, Tanzania and Uganda). Unfortunately, since plantations of P. caribaea are s t i l l at the juvenile stage, t h i s species was not included i n the above model. However, from research elsewhere, Lamb (1973) observed that there are many large areas from the Equator to 30° south or north where P. caribaea can produce a mean 3 annual increment of 17.5 to 21 M per hectare underbark up to the age of 15 years at l e a s t . This compares very well with the mean annual increment for P. patula which 3 varies from 9.9 to 21 M /ha (Wormald, 1975). The growth c h a r a c t e r i s t i c s and expected y i e l d for E. grandis and Maesopsis eminii have been reported by Kingston (1972) and Kingston (1974), respectively. The range of mean annual increment values for M. eminii 3 were 3 to 20 M /ha depending on the s i t e and age of the stand. E. grandis has shown a range of mean 3 annual increment values of 50-90 M /ha/annum. The supply schedule of roundwood i s d i f f i c u l t to assess for a country l i k e Uganda where there i s a lack of adequate inventory and a well developed market. A price increase for roundwood would mean bringing more marginal land into production. The additional volumes produced are l i k e l y to cost more. On the other hand, i n t e n s i f i c a t i o n of management through such means as cheaper s i l v i c u l t u r a l and logging operations and en-hanced y i e l d s through genetic improvement and f e r t i l i -sation, would make wood more available at reduced cost. Over-cutting i s another complication to establishment of a supply schedule. I t would i n i t i a l l y r e s u l t i n cheaper wood, but thereafter become more expensive. The cost of growing timber includes not only that of resources used on the land for various operations i n stand establishment and growth, but also i n t e r e s t charged on the c a p i t a l . This rate of i n t e r e s t i s dependent on ownership. The area of softwood plantations d i s t r i b u t e d by species and age i s shown i n Table 38. Currently, P. patula P. caribaea and E. grandis are the main plantation species being encouraged due to t h e i r favourable growth cha r a c t e i s t i c s on the present and potential s i t e s (see Figure 6). P. oocarpa grows well on s i t e s suitable for -127-P. caribaea and may i n future prove to be a valuable substitute. Apart from the s u i t a b i l i t y of these species to grow well on the s i t e s indicated above, another important factor i s their a b i l i t y to produce wood f i t for the products demanded by society. According to Plumptre (1975) , P. patula i s not suited for use as transmission poles but i t i s for fence posts. - 1 2 8 -TABLE 38 AREA OF SOFTWOOD PLANTATIONS IN ^ UGANDA DISTRIBUTED.-BY. SPECIES AND AGE ( f c h a ) TABLE A IX Age i n P i n u s P i n u s P i n u s Other C u p r e s s u e T o t a l T o t a l 1971 P a t u l a R a d i a t a C a r i b a e a P i n e s spp. P i n e s Softwood 1 125 6 304 2 366 - 394 3 321 8 281 4 196 15 177 5 186 31 64 6 297 24 83 7 263 25 75 8 201 36 46 9 293 64 25 10 248 48 30 11 191 24 — 12 197 36 — 13 151 45 — 14 112 24 — 15 73 3 — 16 113 45 — 17 43 27 2 18 22 8 — 19 51 7 — 20 13 8 — 21 -- — — 22 — — — 23 — — — 24 2 — — 25 — — — 26 — — — 27 — — — 28 — — — 29 — 1 — 97 294 536 830 34 415 794 1209 18 283 628 911 8 172 396 568 26 221 307 528 27 150 431 581 18 199 381 580 6 139 289 423 17 136 399 535 20 45 346 391 3 77 218 295 51 233 284 7 56 203 259 6 33 142 175 2 35 78 113 8 60 166 226 15 26 87 113 9 54 39 93 8 173 66 239 3 152 24 176 128 — 128 85 — 85 52 — 52 1 76 3 79 20 — 20 TOTAL 3468 485 1481 333 3134 5767 8901 Source: Lockwood C o n s u l t a n t s L t d . ( 1 9 7 1 ) . FIGURE 6: A r e a s I d e n t i f i e d S u i t a b l e f o r Growing E u c a l y p t s , p i n e s and c y p r e s s i n Uganda . _ p i m j j p c t t [ c Sou r e e : K i n g s t o n (197*a) - 1 3 0 -Due to the contrast of colour between early and late wood, the wood i s appropriate for panel-ling and decorative purposes. In addition, the wood i s good for particleboard manufacture , ' gives a board of good strength, and i t does" not retard the setting of cement appreciably and can, therefore, be used s a t i s f a c t o r i l y for making wood-wool., cement slabs and boards. P. patula i s already being pulped i n Kenya and the pulp i s good for making most grades of paper. F i n a l l y , i f the outer and inner woods are separated during sawing, the inner can be used for non-stru c t u r a l applications and the outer for s t r u c t u r a l purposes, joinery, l i g h t furniture and even l i g h t duty f l o o r i n g . The juvenile core can be used for purposes such as l i g h t box and.crate manufacture, panelling, weather boarding, shingles and cheap joinery ' where the strength i s adequate for the purpose. Because the wood i s easy to treat with preservatives, i t can be made durable and suitable for external use. P. caribaea has not been extensively used i n Uganda since most of the plantations are at t h e i r juvenile stage. However, according to Lamb (1973), research elsewhere i n -dicates that pulp from t h i s species i s suitable for many purposes including k r a f t pulp for the manufacture of packaging papers and boards. The production of mechanical pulp w i l l require e f f e c t i v e control of blue-s t a i n . A high q u a l i t y particleboard has been prepared from thinnings of plantations i n F i j i . From these r e s u l t s , -131-Lamb (1973) concluded the following: "With correct selection of seed sources and of s i t e s , and with appropriate s i l v i c u l t u r a l management, plantation grown P. caribaea should provide material suitable for the manufacture of packaging papers and boards, for fibreboards and chipboards, for joinery and for constructional timbers". Eucalyptus grandis i n Uganda has been used predominantly for the supply of fuelwood, building and transmission poles and fence posts. Plumptre (1965) studied the pot e n t i a l for sawing plantation grown E. saligna (this species was i n fact E. grandis and t h e amendment-has since then been made). His conclusion was that i t was possible to obtain good q u a l i t y sawnwood from t h i s eucalypt. The wood i s decorative and once seasoned properly has good working properties. The main problem occurs during seasoning when defects are p a r t i c u l a r l y high i n the older, denser wood. Therefore, Plumptre advocated the use of young fast grown trees with logs over 30 cm diameter. E., grandis may also be used for the manufacture' of pulp (Lockwood Consultants Ltd., 1971). In t h i s section, the estimate given represents the physical supply pot e n t i a l modified by minimum diameter and cost considerations. Ideally such a forecast should begin -132-with inventory of the forest resources (woodland area, volume and increment.) and take into account such factors as a c c e s s i b i l i t y , demand for forest land for other uses' and areas of non-forest land which might be made available for a f f o r e s t a t i o n . From the discussions i n the previous section, there are f i v e sources of roundwood supply i n Uganda: t r o p i c a l high forests, uncontrolled hardwoods outside the forest estate, softwood plantations, poles and fuelwood plantations and savanna woodlands. Tropical high forests are divided into f i v e categories based on economic a c c e s s i b i l i t y classes (Lockwood Consultants, Ltd., 1971) . Currently categories 1 and 2 are under systematic management and e x p l o i t a t i o n . Category 3 i s p o t e n t i a l l y developable, while categories 4 and 5 have been considered uneconomic based on current u t i l i z a t i o n standards and the demand for i n d u s t r i a l roundwood. Due to lack of knowledge of market-a b i l i t y of lesser—known species, the forecast' of roundwood supply from t r o p i c a l high forests has a great deal of uncertainty associated with i t . However, assuming technological progress i n the future, the estimate may be regarded a lower bound. Hardwood i n d u s t r i a l roundwood removals outside the forest estate are even more d i f f i c u l t to estimate. This resource i s presently u t i l i z e d by pitsawyers and unlicenced small sawmills to s a t i s f y the big, mainly unrecorded r u r a l market. No estimate w i l l be made for roundwood supply from t h i s source. -133-At the moment, softwood plantations contribute a small portion of the roundwood requirements of the wood industry (mainly sawmilling). However, by the year 2000, a forecast by Lockwood Consultants Ltd. (1971) indicated i t w i l l r i s e to over 80 percent. True/ the potent i a l supply from softwood plantations i s easy to calculate i n greater d e t a i l and accuracy,; however, these calc u l a t i o n s w i l l depend on assumptions made with regard to management i n t e n s i t y and y i e l d s associated with s i t e q u a l i t y of the various plantations for d i f f e r e n t species. Roundwood from p u b l i c l y owned plantations i s easy to estimate. With no public control over management and harvesting of p r i v a t e l y established plantations, i t i s not possible to accurately estimate roundwood supply from the private .sector. F i n a l l y , savanna woodlands constitute the main source of poles and fuelwood supply for the r u r a l population. These woodlands are poorly inventoried,.; and an estimate of roundwood supply from them should be regarded only as a rough in d i c a t o r . Therefore, based on the sources of roundwood mentioned above.t> and taking into consideration lack of adequate inventory and economic a c c e s s i b i l i t y factors, Lockwood Consultants Ltd., (1971)/,: forecast p o t e n t i a l roundwood supply to the year 2000, as shown i n Table 39 and Figure,7. 4.40 Summary Uganda i s not an ideal(or Utopian) state where population i s of such dimensions and d i s t r i b u t i o n that a l l TABLE 39 A v a i l a b l e Supply of Roundwood f o r Uganda to the Year Year 1970 1975 1980 1985 1990 1995 2000 THF* Cat.l M 3 150,000 213,500 201,400 119,300 119,300 104,800 104,800 THF* Cat.2-3 M3 60,000 60,000 60,000 60,000 Softwood Plantations M3 10,000 85,000 110,000 148,000 200,000 315,000 760,000 These voluttes are for nerchantable wood only, 50 on. diameter and over. It i s estimated that the volume of wood under 3 the 50 cm. diameter runs at about 200 M per hectare. This volume i s indicated in Column 11 of this table.. Total, THF & Softwood ^3 160,000 298,000 311,400 327,000 379,000 479,800 924,800 Poles and Fuel Plantations of Forestry Dept. M3_ 40,000 211,000 218,000 218,000 211,000 218,000 211,000 Private Fuel and Poles Bush** Plantations Fuel Stock M3 20,000 145,000 145,000 145,000 145,000 145,000 145,000 M3 120,000 16,000 16,000 11,000 11,000 11,000 1,000 2000 *** Area Cut Residual Total Fuel Annually Volume From THF r^ w***™ (200 «3/H*-> The Bush Fuel Stock i s an estimate of the volume of wood on a few selected areas of savannah woodland designated for fuel supply. The quantity of wood on the savannah wood-lands over the whole country is unknown. 180,000 372,000 379,000 374,000 367,000 374,000 357,000 5,000 5,000 5,000 4,000 4,000 4,000 4,000 1,000,000 1,000,000 800,000 800,000 800,000 800,000 This volume i s an estimate only,' includes a l l species under 50 cm. diameter, stems and branch wood and can be used for charcoal production. Source: Irx;kwood Consultants Ltd. (1971) . i U) -135--1'36-users of land have t h e i r optimum requirements, neither more nor less than they need. Land being an ess e n t i a l non-renewable resource for mankind, and i n fac t the " l i f e blood" of the peasants i n the country, i t s a l l o c a t i o n to various use categories should be c a r r i e d out i n such a way as to maximize s o c i a l welfare. This requires the i d e n t i f i c a t i o n of a s o c i a l wel-fare function. Unfortunately, there i s no unique de-f i n i t i o n of such a function that can be maximized to achieve the "best" for everyone. Agriculture i s the dominant land use at the moment. However, with increased economic a c t i v i t y other land use commitments w i l l also increase t h e i r demand for more land. Therefore, the surplus land and the low l e v e l of u t i l i z a t i o n of c u l t i v a b l e land, are at best temporary and constitute an " a r t i f i c i a l surplus". Considerable debate has persisted over how much forest land a country needs or should have. The answer does not l i e i n an a r b i t r a r y size, nor i s an index of per capita f orest land an adequate measure. These approaches are tainted with s e l f - s u f f i c i e n c y considerations, which may i n fact lead to economic i n e f f i c i e n c y . T h eoretically there i s no need for a country to have any forest estate at a l l , i f i t can i n the long-run import the goods and services obtainable from forests cheaper than i t s own production. In practice, a minimum forest area could be •=-13 7.-set aside. On the other hand, i f there i s an e x p l i c i t or im-p l i c i t advantage i n a region having i t s own productive forests, then the laws of economics suggest that as much land should be allocated to forestry as i s economically feas i b l e and e f f i c i e n t . Most land a l l o c a t i o n practices l i e between these two extremes, and are influenced by the degree of i n t e n s i f i c a t i o n of management. From discussions i n Chapter Two and the one i n t h i s chapter, the 8 percent minimum area for Uganda's forest estate, seems inadequate. There i s a need to increase t h i s area, but by how much w i l l depend on the management strategy adopted' and i n any case w i l l vary over time. An attempt at the assessment of the size of the extra area needed w i l l be c a r r i e d out i n subsequent parts of the thesis. The supply schedule for roundwood i s d i f f i c u l t to work out, e s p e c i a l l y i n a country l i k e Uganda where there i s lack of adequate inventory and a f a i r l y stable demand pattern. The cost of growing timber depends on the cost of resources used on the land for various operations i n stand establishment and growth plus i n t e r e s t charged on c a p i t a l . However, the appropriate rate of i n t e r e s t for Uganda i s unknown (this issue w i l l be discussed further i n Chapter 6 ) . F i n a l l y , supplies of wood from sources outside Uganda (import content) are unknown. A l l these factors are sources of uncertainty for a true estimate of the supply schedule. Therefore, the data presented i n t h i s - 1 3 8 -chapter referred to the physical supply. I t seems obvious that supply w i l l depend very much on softwood plantations which e x i s t now or could be established i n future. -139-CHAPTER NOTES 1. In response to the Government's "Double P r o d u c t i o n S t r a t e g y " . FAO (1975) . 2. Statement from M i n i s t r y of P l a n n i n g and Economic Development, N a t i o n a l Overview Phase I (Unpublished). 3. Although the c u r r e n t terminology i s " f o r e s t r e s e r v e s " , t h i s may have a c o n n o t a t i o n of " p r e s e r v a t i o n " and, t h e r e f o r e , the term ' f o r e s t e s t a t e ' i s used here. 4. Troup (1940) s t a t e d : "During the e a r l i e r years o f i t s e x i s t e n c e a f o r e s t department should c o n c e n t r a t e i t s e n e r g i e s on f o r e s t r e s e r v a t i o n to the utmost ex t e n t p o s s i b l e " (p. 125) "Wherever p o s s i b l e , t h e r e f o r e , r e s e r v a t i o n should proceed i n advance o f any immediate pressure on the l a n d " (p. 127). 5. "Because o f Uganda's dependence on a g r i c u l t u r e , (the) r a p i d development (of the c o u n t r y ) , and the c o n t i n u i n g i n c r e a s e o f i t s p o p u l a t i o n , i t i s necessary to l i m i t the s i z e of the f o r e s t e s t a t e to the minimum area which w i l l achieve the primary aims o f management". (Emphasis mine). Uganda For. Dept. Annual Report (1949). 6. T h i s i n c r e a s e was due to i n c l u s i o n of the p r e v i o u s 'Local Government F o r e s t Reserves' o f Buganda Kingdom i n t o ' C e n t r a l Government F o r e s t Reserves', a f t e r Uganda became a Republic i n 1967. T h e r e f o r e , i t does not r e p r e s e n t an e f f e c t i v e i n c r e a s e i n timber supply a t the n a t i o n a l l e v e l , but merely a change i n ownership. 7. P r o d u c t i v i t y here r e f e r s to wood output o n l y . -14 0-CHAPTER FIVE 5.00 INTENSIVE MANAGEMENT IN FOREST PLANTATIONS 5.10 J u s t i f i c a t i o n for Intensive Management In Part I (Chapters One to Four) of t h i s thesis, i t was shown that the economy of Uganda needs d i -v e r s i f i c a t i o n and an expansion of the export sector. Forest Products have t r a d i t i o n a l l y been regarded as strategic resources, and thus the need for s e l f - s u f f i -ciency. A st r a t e g i c resource i s a national asset that has great pot e n t i a l influence on the economic health of the nation over time (Flora, 1973). In addition, i t i s believed, since the country does possess a com-parative advantage i n exports of prime grade mahoganies within eastern A f r i c a (Lockwood Consultants Ltd., 1971) and together with the other countries i n t h i s region can grow exotic forest species at competitive world prices (Osara, 1963), the forestry sector should be used as a means of export expansion. Therefore, a two-pronged (domestic and export) strategy i s advocated. Unfortunately, before the mid-1960's there was greater reliance on the THFs to supply both the domestic and export requirements and the forest plantations -141-established were regarded as "compensatory". Future timber requirements are governed by complex economic, p o l i t i c a l and s o c i a l factors. Generally, a country needs adequate supplies of timber to s a t i s f y long-run public economic in t e r e s t . In a competitive economy, determination of the optimal quantity of timber should i d e a l l y be based on long-run supply and demand considera-tions . Assuming a fixed forest land area, the supply curve should be quite e l a s t i c with respect to changes i n cost at the lower l e v e l s of annual y i e l d and become increasing-l y i n e l a s t i c as management i s extended to poorer s i t e s (see Figure 8). Using the supply function (SS), an e s t i -mate of the output l e v e l required to avoid needless long-run timber shortages may then be made. This should correspond to the output l e v e l (Q q) at which costs for the most expensive units of wood produced w i l l just be covered by the expected market price of the output. Any quantity in excess of Q q w i l l require spending more to produce some units than the public i s w i l l i n g to pay fo r . On the other hand, i f less i s produced than Q , prices would be un-necessarily higher than the costs of producing the most expensive units. To i d e n t i f y output l e v e l Q , an estimate of the long-run demand schedule (DD) should be made. This involves e s s e n t i a l l y a forecast of future stumpage rates (Vaux, 1973). Average a n n u a l Growth And H a r v e s t (M 3) FIGURE, 8.. The I n f l u e n c e o f I n t e n s i v e Management on t h e P r o d u c t i o n G o a l f o r T i m ber - i 43-In Uganda, due to an imperfect timber market, projections carried out were those of demand and supply, assuming prices did not r i s e r e l a t i v e to other commo-d i t i e s . Table 4 0 shows that aggregate consumption of forest products could, by the year 2 000, increase from 3 about 13.9 m i l l i o n m i n 1971 to a medium value of 43 3 m i l l i o n m , with low and high estimates of 28 and 54 m i l l i o n cubic metres, respectively ( a l l i n roundwood equivalent). However, a greater proportion of t h i s w i l l be used as fuelwood and charcoal whose actual supply function i s d i f f i c u l t to assess and currently unknown. Deducing from past trends, Uganda has been almost s e l f -s u f f i c i e n t i n t h i s product category. However, an i n -creasing s c a r c i t y i s anticipated i n the future. The attitude of the Uganda Forest Department i s that: "...shortages of poles and fuelwood can be anticipated far enough i n advance to permit supplies to me maintained by the planting of f a s t growing species such as Eucalyptus (eucalypts), which can be i n f u l l production for f u e l within four to eight years. These programmes would be supported by the Depart-ment 's extension service and could be organized on the basis of a l o c a l co-operative or v i l l a g e community". (Lockwood Consultants Ltd., 1973). Excluding fuelwood and charcoal and poles and posts, Table 41 ("without CU") indicates that based on consump-tion forecast alternatives A, B and C, by year 2000, only al t e r n a t i v e A's requirement can be f u l f i l l e d . If the assumptions i n either B or C do occur, there w i l l be -144-TABLE 4 0 P o t e n t i a l Roundwood S u p p l y and Demand ~ t o t h e Y e a r 200 0 A g g r e g a t e P o t e n t i a l Consumption (Demand) H i g h 1970 1971 1975 1980 1985 1990 1995 2000 (• Low 13,868 15,739 18,464 20,896 23,675 25,764 28,090 Medium - 1 00 OM3 13,892 15,978 19,106 23,234 28,368 35, 064 43,523 -) 13,892 16,151 19 ,704 24,629 31,230 40,538 53,549 A v a i l a b l e S u p p l y o f Roundwood ' 000 m 3 340 1670 1691 1501 1546 1654 2082 (1) 1. e x c l u d e s s u p p l y o f f u e l w o o d and c h a r c o a l f r o m t h e r u r a l a r e a s o u t s i d e t h e n a t i o n a l f o r e s t l a n d ; and r e s i d u a l volume fr o m THFs. (from T a b l e 39, C h a p t e r 4) -INS-TABLE 41 Veneer and Saw log Consumption and S u p p l y T r e n d s (Uganda) POTENTIAL CONSUMPTION SUPPLY  * W i t h o u t cu-1- W i t h c u 2 ( ^ -'000 m ) 1970 - 160 1971 240 240 240 1975 283 314 349 398 798 1980 344 440 567 312 812 1985 418 620 911 327 727 1990 506 868 1466 379 779 1995 615 1216 2361 480 880 2000 751 1707 3805 ' 925 1325 1 - roundwood from THF and s o f t w o o d p l a n t a t i o n s o n l y ( f r o m Lockwood C o n s u l t a n t s L t d . , 1971), w i t h o u t c l o s e u t i l i z a t i o n 2 - i n c l u d e s 50% o f r e s i d u a l volume from THF b e l i e v e d s u i t a b l e f o r p e e l i n g and s a w i n g . * A, B, C r e f e r t o p r o j e c t i o n a l t e r n a t i v e s as e x p l a i n e d i n C h a p t e r Three where A = low B = medium C = h i g h -146- . an increasing timber s c a r c i t y . The country's com?* parative cost advantage i n timber exports w i l l be eroded away and domestic consumers w i l l have to pay higher prices. From the discussion above, we can deduce that a higher and more e f f i c i e n t l e v e l of management i s ess e n t i a l i n Uganda's forestry. Policy-makers need sound guidelines for i d e n t i f y i n g opportunities and re-l a t i n g these to alte r n a t i v e courses of action so as to o f f s e t massive misallocation of scarce resources. A higher and more e f f i c i e n t l e v e l of management''" i n f o r -estry usually implies closer u t i l i z a t i o n (CU), inten-sive management (IM), or combinations of both. If carri e d out well, these practices should r e s u l t i n savings to consumers and national income (the gross secondary benefit to society and less reduction i n i n -come from decreased output of laternative raw materials). McKillop (1974) noted that for intensive management programs i n the United States, substantial gains i n net benefits were possible even at higher i n t e r e s t rates. Other benefits would include impacts on p r o f i t s and em-ployment i n forest industries. Therefore, such a poten-t i a l would be of benefit i n a l l e v i a t i n g r u r a l povertry. Of s i g n i f i c a n t importance i s the dual attack on the balance of payments problem by permitting timber exports at competitive prices and reduction i n imports. -147-C l o s e r u t i l i z a t i o n may refer to t o t a l u t i l i z a t i o n of the complete tree, stand or forest currently being harvested. The technical f e a s i b i l i t y to harvest may ex i s t but t h i s i n i t s e l f does not j u s t i f y economic o p e r a b i l i t y . The decision of what to harvest should be governed by a c r i t e r i o n of harvesting a l l timber from a given stand which i s economic to log and process through available conversion f a c i l i t i e s or i s saleable at a p r o f i t . If the development of harvesting has been r a t i o n a l (harvesting cheapest units f i r s t ) , closer u t i l i z a t i o n w i l l i n most instances increase the proportion of lower qu a l i t y raw material, often at a higher than average cost per unit. This means s h i f t i n g the entire, or part, of the long-run supply curve upwards and to the l e f t , thus reducing the consumers surplus. For Canadian forestry, Reed and Associates Ltd. (1977) argued that, wood produced under CU w i l l have no special q u a l i t i e s which w i l l command premium prices. On the contrary, i t w i l l generally be below the qu a l i t y of wood currently harvested and for the most part the cost w i l l be the same or higher. Under these circumstances any important move to CU i s un l i k e l y to occur unless i n -dustry cannot obtain adequate wood at a cost below that for CU; and/or an increase i n demand for f i n i s h e d pro-ducts r e s u l t s i n higher prices which w i l l compensate for higher raw material costs. F i n a l l y , they concluded as follows: - 1 4 8 -"Simply because a resource exists and now appears to be under-utilized i s not a s u f f i c i e n t reason for modifying present i n d u s t r i a l f a c i l i t i e s or developing new capacity. A wood resource has no p o s i t i v e economic significance i f extraction and con-version costs as well as market demand prevent the r e s u l t i n g products from being sold at a p r o f i t " . Standards of u t i l i z a t i o n vary between and even within regions depending on such factors as: harvesting conditions, transportation costs and the nature of a v a i l -able markets . In addition, the forests themselves vary with respect to harvestable volume per unit area, species composition, timber size, t e r r a i n and distance to markets. These conditions influence the delivered price of wood. In Uganda, due to the incomplete u t i l i z a t i o n of THF's, CU i s a r e a l economic proposition. Lack of technical knowledge concerning the wood properties of most THF species suggests that generalizations l i k e the one of Reed and Associates Ltd. about Canadian forests, cannot be made for Uganda. As an example, Funtumia e l a s t i c a Stapf. (the wild rubber tree) was once considered a "weed" but has now become a desirable peeler species used by the match industry. Considering that a greater proportion of the growing stock i n THFs belongs to the "lesser-known species" group, i t s increased u t i l i z a t i o n should boost the volume harvest-able per u n i t area and thus reduce the average cost of ... •; - •! -149-harvesting. Some of these species may not fetch premium prices, but others c e r t a i n l y w i l l . Ironwood (Cyamometra alexandrii) a climax species i n most THF i n Uganda and an excellent species for f l o o r i n g sawn-wood, i s currently being poisoned with arboricides to encourage regeneration of mahoganies. A case for pre-mium can be presented for t h i s species. Lockwood Con-sultants Ltd. (1973) suggested that the Uganda Forest Department, "...must undertake manufacturing and marketing studies to determine the f e a s i b i l i t y of using Cyamometra alex-a n d r i i for the manufacture of parquet f l o o r i n g . Preliminary market contacts indicate that t h i s species could f i n d a ready market i n North America for both i n d u s t r i a l and domestic f l o o r i n g " . There e x i s t also some THF tracts that Lockwood Consultants Ltd. (1973) placed under u t i l i z a t i o n cate-gory 3. These are areas with very d i f f i c u l t a c c e ssi-b i l i t y and therefore e x p l o i t a t i o n i s possible only i n the distant future. Though some of the forests are known to contain premium species, the cost of extraction was p r o h i b i t i v e i n 1971 when the f i r s t phase of the study was undertaken. I t i s believed t h i s source of timber w i l l become available from 1985 onwards. In addition to volume from u t i l i z a t i o n of lesser-known species, t h i s source of timber i s estimated to add 30 thousand cubic meters annually to the quantity of round-wood supplied. According to Plumptre (1977), previous -150-to 1970, i n most THFs, the i n t e n s i t y of u t i l i z a t i o n 3 was ca_. 30-35 m /ha. By 1977, the harvest had increased 3 to Ca. 44-73 m /ha or an increment of 46 to 109 per-cent. Therefore, assuming 50% of the 1971 residual volume from THFs (Lockwood Consultants Ltd., 1971) i s round-wood suitable for s o l i d wood products, the supply s i t u -ation i n Table 41 changes to that shown under "with CU". In t h i s case, up to 1990, supply exceeds po t e n t i a l con-sumption under alternatives A and B. A s u f f i c i e n t supply exists up to the year 2000 for alternative A, and up to 19 85 for alternative C. Therefore, i t can be safely concluded that, i n Uganda, i t i s possible to increase the volume of roundwood harvested through the closer u t i l i -zation of the THFs. Furthermore, i t i s reasonable to assume that research and development e f f o r t s i n t h i s (2) d i r e c t i o n could earn high rates of return . However, for a much more sustained production with attendant improvements i n q u a l i t y and quantity of future wood supply for forest industry, closer u t i l i z a t i o n i s inadequate. After a short-term increase i n harvestable volumes through closer u t i l i z a t i o n i s exhausted, t h i s strategy w i l l not be able to ensure, as far into the future as possible, that supply w i l l be available at costs which w i l l maintain low domestic prices and -151-international comparative cost advantage. Therefore, intensive management, through the use of s i l v i c u l t u r a l treatments i s advocated for the long-term needs of the forest industry and the economy of Uganda as a whole. I t may be practiced both i n THFs or fo r e s t plantations. The rest of th i s chapter w i l l emphasize the l a t t e r . This i s not to de-emphasize the role of THFs. In fact, Uganda's current and potential forest products exports are based on this resource. Rather, i t i s an acknowledge-ment of the fact that further development of THFs beyond CU could very well prove to be co s t l y and i s c e r t a i n l y d i f f i c u l t . 5.20 Intensive Management and Forestry 5.21 Intensive Management Defined Intensive forest management i s that management option which combines a large quantity of variable inputs (treatments with the fixed input land) so as to raise  over time the average net y i e l d from a given area above that of nature. Intensive forest management has given r i s e to such terms as "High Y i e l d Forestry" (Weyerhaeuser, 1974) blending people, c a p i t a l , technology and the land and f o r e s t resource into a business plan. Intensive forest resources management involves substantial inputs of knowledge, labour and c a p i t a l to improve on the natural c a p a b i l i t y of land to produce forest crops (Smith, 1970). According to Dawson (1975), intensive management i s concerned with a number of treatments applied to the same stand, not just one or two practices as i s the case i n timber stand improvements. Curtis et a_l. (1973) argued that trees are plants, and the means that can be used to increase production are b a s i c a l l y s i m i l a r to other crops and,therefore, intensive culture i s r e a l l y agronomic forestry. Bevege (1976) linked i n -tensive forest management with the a g r i c u l t u r a l green revolution. Intensive management has been mostly a response to a timber resource a v a i l a b i l i t y constraint i n the face of increasing demand for forest products. In most LDCs (and notably North A f r i c a and Asia), with respect to agr i c u l t u r e , the trend has been to s h i f t from area expansion to expansion through i n t e n s i f i e d land u t i l i z a t i o n . This has been brought about by changes i n the r e l a t i v e costs of those alternatives for i n -creasing a g r i c u l t u r a l output. The growth i n y i e l d per hectare has been a r e s u l t of increased cropping i n t e n s i t y and the simultaneous development of high y i e l d i n g crop v a r i e t i e s - the concept of the green revolution. Intensive management i n forestry i s likened to the green revolution. I t also demands a technological package. No single method of increasing y i e l d s can be successful without integration of other major factors. -153-For examole without a "marriage" or proper balance of s i t e preparation, f e r t i l i z a t i o n and gen e t i c a l l y improved trees, e f f o r t s are l i k e l y to f a l l f ar below expectations or may indeed be doomed to f a i l u r e (Zobel, 1974) . The r a t i o n a l evolution of the need for i n t e n s i f i c a t i o n of management i n foresty (adapted from Hayami et a l . .,1976) i s sketched i n Figure 9. Besides i t s chronological importance, the diagram i s useful i n understanding opportunities for increasing the t o t a l f o r e s t estate v i s - a - v i s i n t e n s i f i c a t i o n of management. As demand for wood products increases due to a r i s e i n per capita national income, harvests from THFs and forest plantations are pushed increasingly onto marginal s i t e s . Consequently, the marginal cost of roundwood out-put (AA), r i s e s r e l a t i v e to output through intensive management ( I I ) . Eventually, the economy reaches a stage wh^n intensive management becomes a cheaper means of procuring wood compared to area expansion. With abundance of suitable land, AA remains horizontal and b e l o w H , indicating a r e l a t i v e advantage of area expansion over i n t e n s i f i c a t i o n of management. As unused land resources are exhausted and the c u l t i v a t i o n fronbier moves from superior to i n f e r i o r s i t e s , AA r i s e s and crosses II at P (the "Crossover p o i n t " ) . H Time AA - trend of marginal cost under area expansion using current level of management AA1 - trend of marginal cost under area expansion using current level of management plus X-efficiency II - trend of marginal cost under intensive mangemerit I'I 1- trend of marginal cost under a higher intensive management compared to II. FIGURE 9/. Relationship Between Marginal Costs of Wood Production Under Area Expansion and Intensification of Management -155-Beyond t h i s stage, i n t e n s i f i c a t i o n i s more p r o f i t a b l e com-pared to area expansion. A higher degree of intensive manage-ment I'I' reduces the time period when crossover i s reached (at P'). A l t e r n a t i v e l y , through the mechanism of what Leibenstein (1976) c a l l e d X-efficiency, d i s t i n c t from a l l o -cative e f f i c i e n c y , and involving such things as management re-organization, motivation of workers and changes i n layout, large increases i n productivity are possible. This would tend to depress the AA curve to AA' and postpone occurrence of the crossover point u n t i l P" i s reached. The actual time when crossover point i s reached w i l l depend on magnitudes of the compensating influences of X-efficiency and higher i n t e n s i t y of management. In addition, i n some regions of the world, there has been established a long standing t r a d i t i o n of "carrying" some proportion of unprofitable s i t e s i n a t o t a l a f f o r e s t a t i o n scheme. For example i n South A u s t r a l i a , the proportion of unprofitable land that should be included, i s defined as "the maximum such proportion — which does not re-duce the average s i t e q u a l i t y for the region below that which i s p r o f i t a b l e at given cost/royalty relationships" (Woods,1976). Viewed i n a global context and for some regions with-i n a country, the supply of land for agro-forestry i s be-coming highly i n e l a s t i c and i n over-populated countries, fixed. Since f l e x i b i l i t y i n substituting labour and/or c a p i t a l for land i s limited, land augmenting technical pro-gress at a s u f f i c i e n t l y high rate may be the only means of -156-avoiding long-run economic stagnation. Furthermore, diminishing returns i n the agro-forestry sectors w i l l manifest themselves i n those industries which use, (3) d i r e c t l y or i n d i r e c t l y , inputs from these sectors Not withstanding, competition for land also exists between agriculture and forestry. In Uganda, a dual strategy of area expansion and intensive management i s needed for both agriculture and forestry. For forestry, area expansion i s possible be-cause an a r t i f i c i a l surplus of land exists although at the same time, a statutory, and i n my opinion non-eco-nomic l i m i t (8 percent of t o t a l land area) has been im-posed on the extent of the forest estate. Intensive management i n forest plantations i s f i r s t and foremost a r e s u l t of the sequence of s i l v i c u l t u r a l operations involved i n r a i s i n g plantations. Seedlings of exotics have to be raised i n nurseries, planted, weeded, thinned and pruned to obtain " s a t i s f a c t o r y " wood output. Secondly, since through intensive management one obtains greater increments i n output compared to proportionate increases i n input, the unit cost of wood produced i s lowered. Therefore, an increased consumers' and pro-ducer (s) ' surplus i s achieved; and i n addition, there are greater opportunities for the export sector. In the foregoing discussions, i t has been shown that a higher and more e f f i c i e n t l e v e l of management, esp e c i a l l y through intensive management, leads to increases i n consumers and producer(s)' surpluses and/or savings i n national income. The l a t t e r , through the Key-nesian m u l t i p l i e r e f f e c t , leads to even greater b e n e f i c i a l (savings) e f f e c t s . As indicated previously, there i s great s i m i l a r i t y between intensive management and the green re-volution with respect to b i o l o g i c a l technology. P r i n c i p l e s of economics have shown that technological innovation w i l l induce inequality e f f e c t s generated f i r s t by the nature of the technology i t s e l f and through the s p e c i f i c economic and s o c i a l system within which i t operates. The d e f i n i t i o n adopted for intensive management includes the l e v e l of technology as a factor. However, i t i s important to dist i n g u i s h , even i f somewhat a r b i t r a r i l y , between technology and techniques. Factor substitution for a given output denotes changes i n techniques; whereas s h i f t s from one isoquant to another r e f l e c t changes i n output and indicate changes i n technology. Defined i n a rather s i m p l i f i e d way, techniques are any bundle of inputs which w i l l y i e l d a given l e v e l of output, while technology refers to a pool of techniques currently available ( B e l l , 1972). Output l e v e l s at various input mixes for three hypothetical technologies are shown i n Figure 10. For example, i n plantation forestry, technology T l may refer to c u l t u r a l treatments only, while T2 involves -159-c u l t u r a l treatments and tree breeding. Within TI, i ' points A,B, and C represent d i f f e r e n t techniques (such as s i t e preparation, i n i t i a l spacing and thinning, each when other operations are held constant). A l t e r n a t i v e l y , these points may represent extensive, intensive and very intensive management l e v e l s . To evaluate the e f f i c i e n c y implications of resource (4) u t i l i z a t i o n , the t r a d i t i o n a l , though inapporpriate two-factor model i s used as depicted i n Figure 11. In the case of plantation forestry i n LDCs, inputs are divided 1 2 into two parts: X represents labour input; while X stands for a l l other inputs, e s p e c i a l l y land and c a p i t a l . For a given l e v e l of output y Q production may be accomplished using either of the two technologies (Tl and T2) as shown i n Figure 11. C l e a r l y T l i s superior to T2 at thi s l e v e l of output, since for any given technique i t requires less of both factors. This superiority i s also sensitive to economies of scale, and i t i s possible T2 may i n fact prove much more superior' at higher quantities of input mix (beyond; F) . Such a sit u a t i o n can occur i f T2 exhibits increasing and T l diminishing or constant returns to scale (Bell,1972) . For an i n d i v i d u a l tree, response w i l l be the same for techniques B or B' (Fig. 10) . At the plantation or woodlot owner l e v e l , reduction i n cost per unit of output o F i g u r e 11 X . F a c t o r F a c t o r I n t e n s i t y and T e c h n i c a l E f f i c i e n c y -161-becomes important and a r a t i o n a l choice would be technique B of technology T l . For the national economy as a whole, when cheaper inputs are used (technique B), we get a larger flow of goods and services between sectors of the economy. Changes in the structure of such flows w i l l r e s u l t . This w i l l also a f f e c t the pattern and i n -tensity of factor use. A public p o l i c y may choose those options that employ most labour at least cost of c a p i t a l and land. Again the choice w i l l be for technology T l and technique B. The above relationships are useful for a r r i v i n g at technical e f f i c i e n c y . A s i t u a t i o n i s t e c h n i c a l l y e f f i c i e n t i f i t i s impossible to move to an alternative such that the change y i e l d s something for nothing (Sen, 197 5). Assuming an iso-cost l i n e LL at labour wage rate W, obtaining output Y q using technique B of technology T l , would require an i n -2 1 . . . put mix of X q and X q . An mstxtutxonally determined wage rate higher than W, and u n r e a l i s t i c a l l y low prices charged 2 to X factors (iso-cost l i n e L^ Lj.) w i l l a l t e r the input mix by reducing the amount of labour and increasing that 1 2 of c a p i t a l and/or land to produce Y q output ( X ^ and X ^ ) . I t i s important to r e a l i z e that i n i n t e n s i f i c a t i o n of forest management, i f one of the subsidiary objectives i s provision of "gainful" employment, u n r e a l i s t i c and i n -s t i t u t i o n a l l y determined input prices, may i n f a c t work to upset i t . Another frequently'discussed issue related to employment po l i c y i s the choice between more output but less employment and less output but more employ-ment. The f i r s t one - i s te c h n i c a l l y i n e f f i c i e n t , but i t may not be rejected because of superior s o c i a l goals. I f more people are hired, we increase e f f e c t i v e demand. In LDCs, supply w i l l not adjust e a s i l y as i n a Keynesian employment s i t u a t i o n since i n these econo-mies, output i s r e s t r i c t e d by resources and organi-zation rather than e f f e c t i v e demand. Therefore, the extra e f f e c t i v e demand i s often met through r e a l l o c a -tion of e x i s t i n g output. Inflationary readjustments, with considerable economic and p o l i t i c a l consequences, often r e s u l t i n g i n reduction i n employment elsewhere, are used to achieve such r e a l l o c a t i o n (Sen, 1975) . This argument should not be taken to mean downgrading employment opportunities. I t i s recognized that em-ployment i s an important instrument for: enhancing income d i s t r i b u t i o n i n the absence of bribes and corruption. Rather, the reason for the above argument i s to empha-size a careful approach to the employment problem with conscious knowledge of the trade-offs involved. To achieve optimum development, we need to know technical e f f i c i e n c y r e l a t i o n s , but more important we should be concerned with economic e f f i c i e n c y and equity considera-tions. Expansions of forestry a c t i v i t i e s and th e i r -163-i m p l i c a t i o n s f o r employment should be seen i n the o v e r a l l n a t i o n a l c o n t e x t . I t is,however, d e s i r a b l e to encourage a b s o r p t i o n of l a b o u r i n i n t e n s i v e manage-ment p r a c t i c e s . 5.22 I n t e n s i v e Management i n P l a n t a t i o n F o r e s t r y 5.22 I n t r o d u c t i o n The f o r e c a s t of p o t e n t i a l consumption o f wood p r o -ducts i n Uganda i n d i c a t e d t h a t THFs alone are not s u f f i -c i e n t to supply f u t u r e requirements without i n d u c i n g r i s i n g p r i c e s or government subsidy to consumers. F o r e s t p l a n t a t i o n s o f e x o t i c and indigenous s p e c i e s w i l l a t a minimum, c o n t r i b u t e over 80 p e r c e n t o f the country's i n d u s t r i a l roundwood requirements (Lockwood C o n s u l t a n t s L t d . , 1971) . Roundwood f o r fuelwood, c h a r c o a l , p o l e s and p o s t s w i l l a l s o i n c r e a s i n g l y come from p l a n t a t i o n s i n the f u t u r e . Uganda i s not alone i n t h i s , there i s a g l o b a l t r e n d towards p l a n t a t i o n f o r e s t r y i n a v a r i e t y o f environmental and socio-economic c o n d i t i o n s . Thus there a l r e a d y e x i s t s a growing body of experience r e g a r d i n g problems en-countered. A summary of the major o p e r a t i o n s i n p l a n t a -t i o n f o r e s t r y i s shown i n F i g u r e 12. In d i s c u s s i n g o p p o r t u n i t i e s and d i f f i c u l t i e s encountered i n p l a n t a t i o n f o r e s t r y , the s i l v i c u l t u r a l o p e r a t i o n s w i l l be d i v i d e d i n t o two s e c t i o n s : stages 1 to 6 ( e x c l u d i n g i n i t i a l e s -pacement) comprise the stand e s t a b l i s h m e n t phase, w h i l e KEY: 0 - D e c i s i o n t o e s t a b l i s h p l a n t a t i o n s 1 - C h o i c e o f s p e c i e s and s i t e e v a l u a t i o n 2 - N u r s e r y 3 - I n i t i a l l a n d c l e a r i n g k - G r o u n d p r e p a r a t i o n 5 - P l a n t i n g ( i n i t i a l e s p a c e m e n t , p i t t i n g , b e a t ! n g - u p o r b l a n k i n g ) 6 - W e e d i n g ( 1 s t , 2 n d , 3 r d ) 7 - C u l t u r a l t r e a t m e n t s ( T h i n n i n g , P r u n i n g ) 8 - F i n a l H a r v e s t . F i g u r e 1 2 . A SCHEMATIC DIAGRAM OF MANAGEMENT OPERATIONS IN FOREST PLANTATIONS OF THE TROP ICS ( G E N E R A L I Z E D ) . -165-stage 7 ( i n i t i a l espacement included) denotes c u l t u r a l treatments or stand development. Timber production, s t a r t i n g from the establishment phase i s a response to a long-term forecast of demand. Invariably, t h i s production involves at the present time, the diversion into forestry of resources that might and often could, be used i n other forms of pro-duction (Leslie, 1971). I t i s assumed at t h i s stage, therefore, that appropriate management p o l i c y has been defined. Ideally, such a program should s t a r t with a plantation plan that should lead to a c t i v i t y and socio-economic analysis. I t i s imperative that a thorough assembly of environmental, economic, s o c i a l and p o l i t i c a l data i s carr i e d out. This approach w i l l ensure among other things that the e f f e c t of employment on the popu-l a t i o n affected during both the establishment and stand development phase i s analyzed. But perhaps of even greater importance i s the need to recognize that the lands to be afforested and t h e i r r e l a t i o n to population d i s t r i b u t i o n , may be determined in the p o l i t i c a l arena. 5.222 Stand Establishment Phase This phase of plantation f o r e s t r y covers a l l the processes by which a s u f f i c i e n t number of young trees are -166-introduced to the s i t e to create a f u l l stocking of the area, up to that stage at which the crowns of the i n d i -vidual trees coalesce to form a closed canopy (FAO, 1973) . Once the decision to a f f o r e s t i s made at the p o l i c y making l e v e l , i t i s assumed that future s o c i a l benefits exceed the costs. I f the net s o c i a l benefit i s large enough, i t may j u s t i f y expansion of a c t i v i t i e s e s p e c i a l l y i n low y i e l d i n g s i t e s that are situated i n economically depressed regions. Following the decision to a f f o r e s t , the forest resource manager's duty then i s to see how i t can be c a r r i e d out e f f i c i e n t l y . In other words, the manager then i s concerned more with how to make the most e f f e c t i v e use of resources a v a i l a b l e , that i s , the alternative that maximizes net return to the l i m i t i n g factor of production (Teeguarden, 1969) . Because timber production i s the primary goal, i t should be achieved at least cost. In other words, during a f f o r e -station programs the most c o s t - e f f e c t i v e operations are required ( M i l l s , 1976) so as to j u s t i f y forestry's case for more land, d e l i v e r the goods from timber at lowest cost to consumers i n the domestic market and maintain a comparative cost advantage at the international l e v e l . The "cost-price" index (Lundgren, 1973) can be used to answer a relevant stand establishment question. What w i l l i t cost to produce a unit of output, given future price and expected volume (value) yield? -167-Since the future price of wood i s an exogenous variable, beyond the control of the forest resource manager, whereas volume y i e l d i s predictable, cost-effectiveness may be measured using volume y i e l d per unit of i n i t i a l c a p i t a l outlay at a given rotation length. Based on volume y i e l d data of P. patula Schl. Cham i n Uganda (Kingston, 1970), results of c o s t - e f f e c t -iveness for f i v e l e v e l s of establishment costs are shown in Table 42. The results indicate decreasing e f f e c t i v e -ness with increase i n costs for each s i t e index; and an increasing effectiveness from poor to better s i t e s for a given cost. Ignoring intermediate treatments for a moment, an increasing cost of establishment reduces the average rate of return. For example, Table 4 3 shows doubling costs from P to R resulted i n a 6.5 3 percent reduction in the average rate of return at a given royalty rate and a s p e c i f i c s i t e index. I f maximum average rate of return was used as a c r i t e r i o n for determining optimum rotation length, increasing the cost of stand establishment w i l l tend to lengthen the rotation. This could reduce timber supply sub s t a n t i a l l y . While the cost of plantation establishment i n -fluences e f f i c i e n c y (cost-effectiveness) and timber supply by prolonging rotation lengths, the cost i s a function of -168-TABLE 4-2 Cost - Effectiveness for P. Patula .Schl. Cham i n Uganda Vol. Y i e l d / I n i t i a l Outlay at age 2 0 Est. Cost Level Site I n d e x (shs/ha) Low 3 . ^ ™ Hi<?h ( .mv/shilling ; 750 .22 .59 .97 1375 .12 .32 .50 1625 .10 .27 .45 ;2000 .09 .24 .41 .08 .22 .36 -) Y i e l d at Year.} 20 rotation High , = 724 .2 m3 Medium = 438.9 m3 Low = 16 2.8 m3 Source: Kingston (1970) -169-TABLE 4 3 V a r i a t i o n o f Average I n t e r n a l Rate o f R e t u r n With E s t a b l i s h m e n t C o s t s f o r a Softwood P l a n t a t i o n on a Medium s i t e i n Uganda STAND AGE (Years) LEVEL OF ESTABLISHMENT COSTS (•shs/ha) P Q R S T ( Aver a g e I n t e r n a l R ate o f R e t u r n / 8 11.60 3.47 1. 32 0 .03 -1 . 28 9 13.34 5.96 4 .01 2.83 1. 64 10 13.92 7.22 5.45 4 . 37 3. 28 12 14.10* 8.48 6 .98 6 . 07 5. 15 14 13.58 8 .77* 7.48 6 .69 5. 89 15 13.22 8.74 7.53 6.80 6. 06 16 12.90 8.70 7.57* 6.89* 6 . 19 17 12.51 8 .57 7.51 6.86 6 . 20* 18 12 .15 8.43 7.43 6 .82 6 . 20 20 11.47 8 .15 7.25 6.70 6. 14 22 10.84 7.82 7.01 6 . 51 6 . 00 24 10.25 7. 50 6.76 6 . 30 5. 84 25 9.99 7. 35 6.64 6.20 5 . 76 26 9.73 7.20 6.52 6.10 5. 67 28 9.23 6.89 6.26 5.87 5 . 47 30 8.78 6.61 . 6.02 5.66 5 . ,29 S o u r c e : Y i e l d , d a t a from K i n g s t o n (1970) E s t a b l i s h m e n t C o s t s (s:hs/ha): P = 750, Q = 1375 R = 1625, S = 1800, T = 2000. * - d e n o t e s y e a r o f maximum a v e r a g e r a t e o f r e t u r n • -170-the p r o b a b i l i t y of plantation success. The planting stage of stand establishment i s often followed by blank-ing ("beating up") spots caused by plant f a i l u r e . This operation i s inherently cost l y . The Uganda Forest Department considers planting successful i f s u r v i v a l , uniformly d i s t r i b u t e d , i s equal to or greater than 75 percent. To incorporate t h i s r i s k and uncertainty as-pect of the establishment phase, Teeguarden (1969) suggested the c r i t e r i o n of "Expected net worth of plant-ing" . Assuming.the opportunity cost of natural re-generation i s zero, i t may be expressed as: where ENW = (R x PS ) - I -(F x PF ) P P ENW = the expected net worth of planting R = discounted gross revenue PS = p r o b a b i l i t y of plantation success with ^ planting I = i n i t i a l investment cost F = f a i l u r e (beating-up) cost and PF = p r o b a b i l i t y of plantation f a i l u r e with ^ planting.' Higher stand establishment costs do not always re-s u l t i n greater plantation success. They could ari s e due to i n e f f i c i e n c i e s i n management such as poor labour force organization and materials scheduling, or other exogen-ous variables such as f a i l u r e of adequate moisture -171-build-up at time of planting. However, where sur v i v a l i s low, increase i n establishment costs should r e s u l t i n higher survival rate. At absolutely low l e v e l s of plantation success, negative ENW values are obtained. As the p r o b a b i l i t y of planting success increases, so does ENW. The p r o b a b i l i t y of plantation survival at which ENW i s zero should, t h e o r e t i c a l l y , determine the "minimum l e v e l of success acceptable". This i s the l e v e l at which beating up i s neither a loss nor an economic proposition. These relationships are shown i n Table 44. At the assumed leve l s of beating-up costs, the minimum acceptable l e v e l of success i s somewhere between 70 and 80 percent for P. patula Schl. Cham grown on poor to medium s i t e with gross revenues discounted at 6 percent. Holding other factors constant, a lower discount rate, a more productive s i t e and reduced beat-ing-up costs, w i l l a l l lower the acceptable percentage of s u r v i v a l . The stand establishment phase i s the set of operations in:plantation forestry with a myriad of alternative techniques' ava i l a b l e . The cost-effectiveness criterion discussed earlier i s ideal for ranking them. This<criterion i s independent of such uncertainty: factors as wood p r i c e s and i n t e r e s t (discount) ' rates: (Teeguarden, 1969). For example in Uganda, -172-TABLE 4 4 Influence of Pr o b a b i l i t y of Plantation Success on the Expected Net Worth of a Pinus Patula Stand i n Uganda grown on Poor/Medium Site at Age 20. * R a PS R x PS . F b PF F x PF I a ENW P - P P P shs/ha o. "5 (shs/ha) (shs/ha) (%) (shs/ha) (shs/ha) (shs-/ha) 914 0 0 1300 100 1300 500 -1800 914 10 91 1000 90 900 500 -1309 914 20 183 900 80 720 500 -1037 914 30 274 850 70 595 500 - 821 914 40 366 800 60 480 500 - 614 914 50 457 750 50 375 500 - 418 914 60 548 600 40 240 500 - 192 914 70 640 500 30 150 500 - 10 914 80 731 300 20 60 500 + 171 914 90 823 200 10 20 500 + . 303 914 100 914 100 0 0 500 + 414 /a - from Kingston (1970) /b - estimates ENW - expected net worth R - discounted gross revenue I.- i n i t i a l investment (establishment) F - discounted f a i l u r e cost * - the ENW here i s ac t u a l l y not net of a l l costs. Intermediate costs have been omitted. -173-Kingston (1972) estimated that chemical weeding i n eucalypt plantations was cheaper than manual. On the other hand, clean-ploughing during s i t e preparation i s much more costly compared to line-ploughing or spot-hoeing , and yet , offers much better s u r v i v a l . Clean-ploughing combined with taungya (shamba system,: or a g r i - s i l v i c u l t u r e ) reduces the cost of stand establishment, by eliminating most of the weeding operations. Except for extreme cases, high costs alone are not absolute indicators of poor f i n a n c i a l returns any more than low costs ensure high returns. The interaction of a com-posite of cost-effectiveness factors determines the eventual return. A measure of favourable • programme ..com-"" ponents i s the percentage of the regional acreage on moderate to large t r a c t s , on favourable s i t e s and established at low to medium costs ( M i l l s , 1976). A need exists for i d e n t i f i c a t i o n of the lowest standards on the c r u c i a l cost-effectiveness i n d i c a t o r s . According to Haley (1969) , s i t e index i s one of the main determinants of prospective f i n a n c i a l returns from reforestation while brush conditions play a major r o l e i n determining s i t e preparation costs. The ideal s i t e i s one in which the macro- and micro-climatic conditions and the s o i l depth, texture and f e r t i l i t y , combine to produce optimum conditions for early growth (FAO, 1973). Most aff o r e s t a t i o n e f f o r t i s being made in overcoming the l i m i t a t i o n s of the sub-norm af f o r e s t a t i o n s i t e because there -174-i s hardly an id e a l one. Site q u a l i t y (the a b i l i t y of the s i t e to produce timber), has a profound influence on timber y i e l d and therefore cost-effectiveness as shown i n Table 42. In .the United States, Anderson and Guttenberg (1971) reported a difference of 2 percent i n the rate of return between good and medium s i t e s , while Herrick and Morse (1968) reported 6.8 percent rate of return for upland hardwoods. 5.223 Stand Development Phase The establishment phase i s superseded by the second or "management phase", characterized by a series of t r e a t -ments ultimately designed to encourage optimum y i e l d u n t i l harvest time i s reached (FAO, 1973). This i s the stand development phase and includes thinning (plus spacing) and pruning. The main emphasis i n the stand establishment phase i s to carry out management r e s p o n s i b i l i t i e s as e f f i c i e n t l y as possible, guided by cost effectiveness c r i t e r i o n with due consideration given to trade-offs between e f f i c i e n c y and equity. On the other hand, decisions i n the stand development phase involve the question: does i t pay? The objective for carrying out these treatments i s to increase both the q u a l i t y and quantity of product desired. In other words, decisions to es t a b l i s h and develop stands i n planta-tions , "... must ultimately be based on a comparison of the benefits expected with the cost l i k e l y to be incurred, i n establishing the type of -175-forests i n the most suitable location for producing the sort and quantity of forest products and services expected to be saleable in the future". (Leslie, 1971). Thinning and i n i t i a l spacing go hand-in-hand and are s i l v i c u l t u r a l measures which could be applied to increase p r o f i t a b i l i t y and/or qua l i t y of a stand ( V i l l i e r s de, 1970). H i s t o r i c a l l y , spacings commonly used i n planta-t i o n forestry were derived from a concept of management more concerned with the inherent q u a l i t i e s of wood than with i t s economic production (Johnston et a_l. , 1967) and to a lesser extent s t i l l , on technical requirements in logging. In a summary of global spacing practices, Evert (1973). concluded that ^ economic reasons seem to have been the most important ones for determining the closest- or lower l i m i t of spacing, and the timber q u a l i t y , the widest spacing or upper l i m i t . The economic reasons i n t h i s case seem to be those i n timber production, because together with timber qua l i t y factors, they determine the ultimate value of wood products. In a discussion on the h i s t o r i c a l relevance of i n i t i a l spacings adopted^ Wardle (1967) pointed out that the common 2.7 x 2.7 meters espacement for softwood plantations i n East A f r i c a was predominantly influenced by South African practices. It was adopted with the object of producing sawlogs with an average diameter of 46 cm as quickly as possible. Wide i n i t i a l spacing has since then been main-tained i n South A f r i c a to keep the cost of labour .'require-ment* for planting stock down in the face of a heavy annual -1*7.6-planting programme. I t i s further advanced that the argu-ments for close spacing on the basis of early branch suppres-' sion and weed control, and greater opportunity for selection of desired residual stems are baseless. F i r s t , the advantages i n early branch and week control are o f f s e t by the cost i n -curred i n carrying out early non-commercial thinning. Second, although the need to leave the "best" stems for the f i n a l crop i s obvious, there i s no j u s t i f i c a t i o n i n s t a r t i n g with so many stems. The i n i t i a l spacing of 2.7 x 2.7 m i n softwood plant-ations was adopted for sawlog production. E a r l i e r discussion i n t h i s thesis showed that apart from sawlogs, veneer logs, pulpwood, poles and posts, are other products whose future de-mand w i l l increase. A uniform spacing strategy may not be optimal for a l l product categories. Furthermore,.on a per hectare basis, a wide i n i t i a l spacing i s a production strategy aimed at minimizing labour input and by keeping planting stock down, i t results i n a reduction i n the proportion of cost of c a p i t a l content i n the establishment phase. Creation of r u r a l employment opportunities i s one of the s o c i a l goals Uganda i s committed to, and the above strategy i s , therefore, i n c o n f l i c t unless more hectares are planted. Reduction'in the cost of the c a p i t a l content of e s t a b l i s h -ment phase could be achieved by other means, such as making operations as manual as i s possible. I f a market for i n t e r -mediate products exists or i s developable (which should be from forecasts of demand for other roundwood types), then a sound -177-strategy which may also be s o c i a l l y desirable, i s close i n i t i a l spacing with multiple thinnings. With constant returns to scale in planting, although wider spacing r e s u l t s in less labour employed per hectare, a greater land area i s planted for a fixed budget or a given roundwood require-ment. In t h i s case, there i s no c o n f l i c t i n labour require-ments. If increased spacing distance r e s u l t s i n increasing returns to scale i n planting, increases i n area planted may not be large enough to o f f s e t decreased labour input. However, even on a per hectare basis, situations where wide spacing i s j u s t i f i a b l e may be integration of plantation forestry with grazing or the practice of the taungya system required to l a s t say 5 years on a given t r a c t of land before farmers move to another. These p o s s i b i l i t i e s e x i s t and are desirable because in addition to the forestry sector, other alternatives for l i v e l i h o o d are generated on the same t r a c t of land. The f i n a n c i a l r e s u l t s of timber production are i n -fluenced by the spacing adopted. The costs of operations in the establishment phase, f i r e protection, pruning and the hidden cost of waiting for the crop to get established are determined to some extent by spacing. The discounted revenue r e a l i z a b l e i s dependent upon the volume and timing of production and upon price which i n turn depends on quality. The factors of qual i t y influenced by spacing include s i z e - c l a s s d i s t r i b u t i o n , taper, knot-diameter, straightness, and volume and d i s t r i b u t i o n of juvenile wood. - 1 7 8 -Therefore, to determine the spacing with the highest returns, one would need to know the response of the crop to spacing and reactions of the market to qu a l i t y fore-casts. In practice, t h i s i s d i f f i c u l t considering changes in wood processing technology and consumer taste. Assuming a p r i c e - s i z e gradient and premiums for quality e x i s t and are l i k e l y to continue, i t becomes easy to estimate the optimum spacing. Figure 13 shows that where a p r i c e - s i z e gradient e x i s t s , discounted revenue DR(A) w i l l f i r s t r i s e and thereafter f a l l gradually because the compensating influence of size i s more than o f f s e t by reduction in volume production due to increased spacing. Without a p r i c e - s i z e gradient, discounted revenue DR(B) remains con-stant for a range of spacings and thereafter f a l l s r a p i d l y , with the decline in volume production. On the other hand, since discounted expenditure (DE) depends more on cost of planting, i t f a l l s much more slowly as planting distance i s increased. The optimum spacing occurs where the rate of decrease i n DE equals the rate of increase (decrease) of discounted revenue. Where a p r i c e - s i z e gradient e x i s t s , t h i s spacing i s represented by S , and without, i t i s S . F i n a l l y , i n i t i a l spacing depends on the growth c h a r a c t e r i s t i c s of species planted. For example, i f the management objective i s production of a short rotation biomass crop, close spacing i s desirable. In t h i s category of species and e s p e c i a l l y relevant to Uganda, are the eucalypts. Unless c l o s e l y planted, by the time f i n a n c i a l -179-DR(A) - discounted revenue with - price gradient DR(B) - discounted revenue at constant price for'timber regardless of size DE - discounted cost - optimum spacing when price-size gradient exists S - optimum spacing with no price-size gradient DR(A) DE DR(B) B A FIGURE 13 Determination o f Optimum Spacing Source: adapted from Grayson e t a l . (1967) -180-and/or technical maturity occurs, the f u l l p o t e n t i a l of the s i t e may not have been f u l l y u t i l i z e d . Of course i f l e f t beyond the optimum rotation age, i t i s possible that through higher mortality i n the dense stands, a widely spaced eucalypt crop may catch up with or even exceed the y i e l d i n the dense stand. Thinning i s the inte n t i o n a l removal of part of a (5) tree crop . It i s normally carried out afte r the establishment phase and for that reason, pre-commercial thinning during the l a s t weeding i s best considered under that phase. The emphasis in t h i s discussion w i l l be on commercial thinning. Where the market for these intermediate harvests e x i s t s , labour i s abundant and there are no s i g n i f i c a n t technological or b i o l o g i c a l problems, commercial thinning i s a r a t i o n a l proposition (Brown, 1976). Forest plantations are i n most cases started so as to make important c o n t r i -butions to national goals. They are i n fact often es-tablished i n r e l a t i o n to anticipated future economic de-velopment. Therefore, t h i s "market-industry-plantation system" can have three states depending on whether the dominant constraint on further expansion i s the market, wood resource or i n d u s t r i a l capacity (Darvagel, 1976). We s h a l l refer to these as macro constraints. Fortunately, each of these fti'ay be manipulated >- by management. Other constraints less amenable to manipulation, are the micro (b i o l o g i c a l and technological) constraints related to the -181-wood resource and industry. Depending on which of the macro constraints are operative, t h e i r influence on the role of thinning i s shown in Table 45. When capacity and resources are l i m i t i n g , substantial premiums for good qua l i t y exist and wood prices are high. A double strategy of capacity expansion and thinning is' recommended. When a v a i l a b i l i t y of markets i s the constraint, prices of wood products w i l l be depressed and industry may, therefore, be less w i l l i n g to pay the additional cost for wood from thinning opera-tions and w i l l press for cheaper wood from c l e a r f e l l i n g . There i s a large consumer surplus and reduced producer surplus. If capacity i s the constraint, management must fi n d ways to a l t e r the wood input to increase m i l l through-put. F i n a l l y , where a resource constraint e x i s t s , manage-ment has several opportunities for expanding the system. For example, thinning enables early y i e l d s to be obtained while retaining e x i s t i n g stands i n production. Thinning i n t e n s i t y can be used to control the timing and quantity of y i e l d s a v a i l a b l e . I t may therefore be concluded that, "... the ro l e of thinning i n development forestry w i l l vary according to the combination of the p l a n t a t i o n - i n d u s t r i a l system by market, capacity or resource constraints. It i s clear that a l t e r -native thinning regimes can have im-portant e f f e c t s on even national objectives and that the selection of the correct r o l e of thinnings i s an important and complex task" Darvagel (1976). TABLE 45 The Influence of Market, Capacity and Wood Resource A v a i l a b i l i t y on the Role of Thinning State of the System Effects on the Role of Thinning Markets 1. LIMITING Capacity Adequate Resources Adequate Wood prices low. D i f f i c u l t to s e l l higher cost thinnings. 2 f Adequate LIMITING Adequate Substantial premiums for good q u a l i t y and sizes. D i f f i c u l t to s e l l small material which may be thinned to waste. Thinning from above considered 3. Limiting or Adequate 4. a Adequate Limiting or Adequate Adequate SURPLUS LIMITING Wood prices low. thinnings at a l l , Wood prices high, to expansion. D i f f i c u l t to s e l l Thinning es s e n t i a l Adequate LIMITING LIMITING Wood prices high. Thinning and capacity expansion e s s e n t i a l . /a Source: Darvagel (1976). /b believed to be the sit u a t i o n i n Uganda because although surplus land exists and there i s at present a f a i r l y low l e v e l of u t i l i z a t i o n in'the t r o p i c a l high f o r e s t , these w i l l help a l l e v i a t e the resource constraint problem in the future co i -18 3-The forecast of future wood requirements' in Uganda shows that potential consumption exceeds supply. There i s need for forest managers to produce more veneer and saw logs, pulpwood, poles and posts. The d i v e r s i t y of roundwood q u a l i t y and sizes i n t h i s mix i s enormous. One option i s to e s t a b l i s h plantations to produce s p e c i f i c products. A l t e r n a t i v e l y , a given plantation should be managed so as to y i e l d multiple products. The land-saving advantages of t h i s l a t t e r approach and i t s possible role in lowering unit costs for wood growing and harvesting make i t seem more a t t r a c t i v e . A forest i n d u s t r i a l concern may have i t s own woodland as a hedge against uncertainty i n supply, and carry out thinnings to feed i t s processing plants with l i t t l e concern for the d i r e c t costs of harvesting. Otherwise, thinning should be c a r r i e d out only i f the returns exceed the costs. From the above discussions on resource constraints, i t would appear that thinnings are desirable and should be encouraged, and o f f e r an immediate solution to capacity expansion and enhancement of resource a v a i l a b i l i t y . Even i f thinning i s desirable from a purely resource constraint -viewpoint, the type and sequence of thinning operations are influenced by the micro constraints of biology and technology. Shepherd (1976) c l a s s i f i e d bio-l o g i c a l constraints into three groups: inherent factors of the species, including growth pattern, tolerance, stem form and rooting habit; the problem of s u s c e p t i b i l i t y -184-to disease and insect attack; and s i t e factors including such diverse aspects as climate (including wind), s o i l moisture regime, s o i l physical and chemical factors (here i t i s the genotype-environment int e r a c t i o n which con-s t i t u t e s the b i o l o g i c a l constraint)• Most plantation species chosen on the basis of t h e i r fast growth rates are intolerant ( l i g h t demanding). This i s just as true for P. radiata D. Don (Shepherd, 1976) as i t i s for P. patula Schl. Sham (Karani, 197 6a) and Cupressus l u s i t a n i c a Mill,. (Karani, 1976b) . For these softwoods,canopy closure in the stand occurs around the ages of 6-8 years and mutual competition between trees i s severe at 10-14 years. This r e s u l t s i n trees having highly variable diameter siz e s . As competition within the stand increases, so does i t s s u s c e p t i b i l i t y to insect and disease attack. For example, Diplodia pinea dieback and deaths associated with Sirex n o c t i l i s F., have been associated with crowded stands of P. radiata D. Don. Thinning used to reduce overcrowding in a stand w i l l r e s u l t i n lowered incidence of these attacks. On the other hand, thinning practices often encourage the frequency of disease in the remaining crop (Heather, 1976) because the cutover stumps and damaged remaining trees become susceptible to fungal i n f e c t i o n . In Uganda, several defects have been found i n l i v i n g Cupressus l u s i t a n i c a M i l l , and to some extent, i n P. patula Schl. Cham. These included heart-rot, termite damage, -ias-. combinations of these two and healed ; drought-crack. None of these are e a s i l y detectable by any external symptoms. According to Brown (19 66) , the f i r s t three of the above defects probably originated from some forms of bark-lesions. Therefore he concluded as follows: "This emphasizes the importance of keeping any kind of stem damage to an absolute minimum, whether i t be caused by r a t s , by delayed or bad pruning, or by f e l l i n g and extraction damage during thinning." Thinning practices are also influenced by s i t e con-d i t i o n s . In p a r t i c u l a r , moisture a v a i l a b i l i t y i s a chief determinant of pine growth p o t e n t i a l . But i t i s also i n i t s e l f dependent upon the depth and moisture holding capacity of the s o i l which l i m i t s moisture storage, and by the stand which exhausts i t . Therefore, i t i s absolutely es s e n t i a l that a stand should not exceed the p o t e n t i a l of a s i t e to supply moisture. If not, malformation or ultimate death of the tree crop ensues (Butcher and Havel, 1976). Pines and eucalypts are generally deep-rooted and therefore more tolerant to moisture stress. Because of t h i s rooting habit, the damage of windthrow i n heavily thinned stands i s lessened. However, in.extremely f e r t i l e and high r a i n f a l l areas of Uganda, C. l u s i t a n i c a grows.. - .-with, ;. c h a r a c t e r i s t i c a l l y shallow root system and i s susceptible to windthrow (Kaumi, 1976). Technological constraints to thinning r e l a t e to size and quality of material, and higher units of inputs (labour - 1 8 6 -and capital) per unit volume of wood produced. The answers l i e i n technological innovations i n forest i n -dustries to f a c i l i t a t e small log and/or lower qu a l i t y processing and choice of appropriate technique(s) i n the harvesting process. Some of these innovations already e x i s t and Uganda could benefit a l o t by adopting them. For example, use of retractable chucks i n plywood m i l l s has reduced the diameter of the core stud considerably, such that some late thinnings or what were predominantly saw logs may now be peeled. In the sawmilling industry, side and end-jointing are innovations that have contributed to increased u t i l i z a t i o n of small logs. The Kraft pulping process through i t s reduced demand on wood q u a l i t i e s for pulp, has made possible the u t i l i z a t i o n of small logs. Techniques used for harvesting thinnings the world over, have evolved along .orthodox l i n e s , none of which are i n -digeneous to Uganda. They began with horses and farm t r a c t -ors proceeding to tractors with t r a i l e r s , crawler tractors and rubber-tyred skidders (Grayburn, 19 76) . These develop-ments have been i n response to changing r e l a t i v e prices of inputs. Other less obvious costs are, the costs plus i n -terest on roads and landings required, and the loss of pro-duction from these areas for the rest of the r o t a t i o n . Thinnings are labour intensive and where the average wage rates are high, regions have opted for less (and much more mechanized) or none. The " s i l v i c u l t u r a l -18 7-revolution" in New Zealand i s towards wider spacing, heavy early thinning to waste and no commercial thinning. In Uganda, wage rates are r e l a t i v e l y low and therefore techniques should be reasonably labour-intensive. Chain saw or two-man crosscut saws for f e l l i n g , bucking and use of axes for limbing are recommended. The pine and cypress plantations are currently located on h i l l slopes, some unsuitable to t r a c t o r use. On the other hand, the newly established P. caribaea Morelet var. hondurensis planta-tions are located i n areas with r e l a t i v e l y f l a t t e r r a i n . and^,therefore^offer p o s s i b i l i t i e s for mechanization i f i t can be j u s t i f i e d . It i s worth emphasizing that the economic evaluation of thinning i s complex and includes!.the in t e r a c t i o n of tree-stand, u t i l i z a t i o n , linked economic (6) and l o c a l management factors (Fenton, 1976) However, of paramount importance i s the purpose for which thinning i s being c a r r i e d out, which in turn i s a r e f l e c t i o n of management goals. Therefore, ownership of the forest resource i s important. As was discussed i n Chapter 4, there are at the moment, few woodlot owners in the country, although one of the long-term strategies of Uganda Forest Department i s to encourage individuals to es t a b l i s h forest plantations. If the objective of such plantations i s the supply of roundwood against increasing sc a r c i t y of fuelwood, charcoal, building poles and posts, then thinning decisions w i l l be j u s t i f i e d by product s p e c i f i c a t i o n s . On the other hand, i f in future individuals -188-decide to es t a b l i s h and manage plantations with the sole purpose of s e l l i n g logs to conversion plants, thinning assumes a special r o l e . The woodlot farmer i s not d i r e c t l y interested i n factors a f f e c t i n g returns to wood industries. His interest will be in maximizing returns to his investment. For : example, i f a p r i c e - s i z e gradient e x i s t s , the owner w i l l thin to increase the proportion of larger dimension trees. But i n f a c t the optimum path assuming an outlet for small diameter material might well be to manage plantations for a comparatively large production of small material at young age, thus generating some cash and then change and go for volume i n large sizes. F i n a l l y , forest industries may i n future get involved i n wood production. As shown i n Aus-t r a l i a (McConchie, 1976), t h e i r decision w i l l be more complex than that of the woodlot farmer and w i l l include strategy, p o l i c y and objectives, anticipated wood demand -supply s i t u a t i o n , f i n a n c i a l considerations and government incentives. Pruning i s another s i l v i c u l t u r a l operation included under stand development. I t may be defined as the re-moval of l i v e , dying or dead branches from the standing tree. The primary aim i s to produce wood free from dead or l i v e knots outside the pruning core. Once again, a p e r t i -nent question i s : does the value of increased q u a l i t y of wood j u s t i f y t h i s operation? There are two divergent schools of thought from forest l i t e r a t u r e . One group believes pruning should .not be undertaken because of the expense -189-incurred, changing end-use requirements,and loss of increment. The second group advocates pruning on the grounds of better quali t y , appearance, strength and economic return. The i n d i r e c t benefits conferred by pruning upon management include easy access into young plantations and reduction i n f i r e hazard. Even for pulpwood, avoidance of knots i s b e n e f i c i a l because of i t s d u l l i n g e f f e c t on chipper knives and the longer period required i n chemical digestion. Taking these benefits as given, does improved qual i t y d i r e c t l y pay the costs incurred? Ignoring the e f f e c t s on conversion and sawing costs, i t i s necessary that the compounded cost of pruning i s o f f s e t by the extra returns anticipated from the sale of knot-free timber, or one containing l i v e as opposed to dead knots. To show i f such r e l a t i o n s h i p holds, there i s a need to determine the desirable knotty - and pruning - cores (Banks and Prevost, 1976). In addition, the e f f e c t of l i v e pruning on increment, the timing of the pruning operation and a derivation of pruning schedules should be ca r r i e d out, i f indeed t h i s operation i s " p r o f i t a b l e " . In the case of Uganda, there i s at present no clear p r i c e - s i z e gradient nor premiums for clear knot-free wood. Therefore, i t i s d i f f i c u l t to j u s t i f y pruning operations. The secondary benefits j u s t i f y butt-log pruning. However, in view of prospects for exports of wood products and supply of peeler logs for the tea-chest and match industries, -190- ' the current p o l i c y on pruning needs serious recon-sideration . 5.2 24 Other Cultural Treatments Under t h i s heading, two prominent operations, f e r t i l i -zation and tree (breeding) improvement w i l l be discussed. The i n i t i a l zeal with which foresters undertook a f f o r e s t a -t i o n programs i s being weakened by reports of decline in productivity during the second and subsequent rotations (Evans, 1976). Secondly, there i s a growing tendency to produce wood of suitable q u a l i t y and ..desirable growth ch a r a c t e r i s t i c s for s p e c i f i c uses. These:-two considerations i l l u s t r a t e the potential significance of f e r t i l i z a t i o n and tree improvement i n forest plantations. Again there i s no need to commit resources to these operations i f they cannot be j u s t i f i e d economically. With regard to f e r t i l i z a t i o n , because i t i s needed i n the a g r i c u l t u r a l sector, i t s worth must be weighed against the true s o c i a l cost of f e r t i l i z a t i o n . Inorganic f e r t i l i z e r s diverted from a g r i c u l t u r a l use to forestry incur an opportunity cost. In some regions of the world such as South A f r i c a , self-sufficiency in wood products i s a national p o l i c y . But because there i s lack of suitable land for a f f o r e s t a t i o n , f e r t i l i z a t i o n has become a sound proposition for increasing y i e l d s per unit area (Schultz, 1976). On the other hand, Hagenstein (1977) suggested that based on the experience of the Japanese and Germans, American foresters have re-cognized the promise of s u b s t a n t i a l l y increasing timber -191-y i e l d s by f e r t i l i z i n g . This i n t e r e s t was turned into practice because of r e l a t i v e l y cheap inputs. But since 1973, the enthusiasm has dropped somewhat, due to the greatly i n f l a t e d chemical f e r t i l i z e r prices. Technically, f e r t i l i z a t i o n of tree crops i s f e a s i b l e and has-. • been shown to be a p r o f i t a b l e f i n a n c i a l under-taking i n Eucalyptus grandis (Hill) Maiden stands (Penne-father and MacGillivray, 1971; Schultz, 197 6) although that of pines i s sometimes unpredictable (Schultz, 1976). The major unresolved technical problem i s ~.\. the "technique of f e r t i l i z e r application" which refers to the proper com-bination of placement and time of application (Woods, 1976) and should be chosen on the basis of optimum quantities and the kinds of f e r t i l i z e r required on the main s o i l types (Pennefather and MacGillivray, 1976) . Karani (1976c) reported r e s u l t s for f i e l d f e r t i l i z e r t r i a l s i n three s o f t -wood areas in Uganda. At Lendu forest plantation, the object of applying f e r t i l i z e r s was to give the best young trees a good s t a r t which would l a t e r make markings for thinnings easier. The r e s u l t s for P. patula Schl. Cham were inconclusive. A second f e r t i l i z e r t r i a l had as i t s objective, the improvement of growth of P. caribaea Morelet var hondurensis' planted on the impoverished sandy s o i l s around Lake V i c t o r i a and on heavily leached red s o i l s . Apart from NPK, the micronutrients boron and manganese were also added. The results indicated that P. caribaea Morelet var hondurensis responded well, with the leaves -192-changing from yellowish-green to dark-green; and an accelerated height growth. The objective of the t h i r d f e r t i l i z e r t r i a l was to improve on the poor survival of i P. caribaea Morelet var hondurensis, P. Kesiya Royle and P. oocarpa Schiede at Alungamosimosii The soils' i n t h i s region are poor i n phosphorus. Therefore, single phosphate and NPK were applied and,in addition, the resu l t s from f e r t i l i z e r a pplication were compared with that of clean weeding. The re s u l t s showed the influence of clean weeding on survival was superior to that of either the single phosphate or NPK applications. Based on these findings, Karani (1976c) concluded as follows: "The use of inorganic f e r t i l i z e r s i n forestry i n Uganda has so far been con-fined to r a i s i n g of planting stock in nurseries. The rates of growth of exotic conifer plantations i n the f i e l d (have) been quite good and i t has not been thought necessary or economic to apply f e r t i l i z e r s . F i e l d f e r t i l i z e r t r i a l s have been c a r r i e d out on some of the s i t e s growing Pinus species. With exception of lake shore a l l u v i a l sands and Sesse Island's leached red s o i l s , response by pines to f e r t i l i z e r s has been poor. ...The successful a f f o r e s t a t i o n of Jubiya sandy and Towa red s o i l s requires the use (of) f e r t i l i z e r s e s p e c i a l l y magnesium and potassium to obtain economic growth rates." F i n a l l y , f e r t i l i z e r t r i a l s were car r i e d out i n plantations of E. grandis ( H i l l ) Maiden in West Nile d i s t r i c t with the objective of getting q u a l i t a t i v e information on the e f f e c t of inorganic f e r t i l i z e r s , -193-including trace elements, on dieback, survival and growth of the species. The r e s u l t s indicated that dieback of E. grandis ( H i l l ) Maiden was not caused by nutrient deficiency or lack of minor elements l i k e zinc and boron. The species and provenances used were unsuitable to the climate of the region (Karani, 1975). These r e s u l t s are i n themselves inconclusive and l i k e most f e r t i l i z e r experiments, l i a b l e to wide margins of error. Furthermore, possible y i e l d decreases i n the second and subsequent rotations might make f e r t i l i z e r a pplication i n the f i e l d a r e a l proposition. F i n a l l y , v a r i e t i e s of species produced as a r e s u l t of intensive tree breeding programmes may.be f e r t i l i z e r responsive i n addition to possessing the desirable t r a i t s they were bred for i n i t i a l l y . The f e a s i b i l i t y of applying inorganic f e r t i l i z e r s i n forest plantations i s governed by i t s a v a i l a b i l i t y i n terms of price and a l t e r n a t i v e uses. The demand of the a g r i c u l t u r a l sector for NPK f e r t i l i z e r s i s on the increase due to technological developments in crop husbandry. In the past, chemical f e r t i l i z e r s have been available to farmers i n both MDCs and LDCs at progressively lower r e a l p r i c e s . The long-run decline i n r e a l f e r t i l i z e r prices was checked i n the early '70s, and now there i s general agreement that t h i s long-run decline that persisted from the mid-1920's to the end of the 1960's i s u n l i k e l y to reappear (Ruttan, 1975). Table 46 shows that consumption -19.4-TABLE 4 6; NPK use 1975/76 i n A f r i c a n Countries Consuming at Least 2000 metric, tons per annum (Excluding Rhodesia and South A f r i c a ) . Country Production Consumption ( — metric tons- 501,192 Egypt 227,540 Morocco 134,700 163,000 Algeri a 125,500 162,400 Sudan 0 95,100 Zambia 5,600 78,000 Nigeria 1,000 52,300 Tunisia 145,024 48,697 Kenya 0 44,413 Senegal 28,700 43,600 Ivory Coast 11,113 42,800 Libya 0 35,900 Ethiopia 0 33,069 Tanzania 17,559 29,670 Ghana 0 27,700 Mauritius 3,900 24,142 Cameroon 0 12,200 Malawi 0 11,120 Reunion 0 9,400 Swaziland 0 9,400 Chad 0 9,100 Madagascar 0 5,947 Mozambique 3,700 5,700 Uganda 4,000 5,200 Sierra Leone 0 5,100 Zaire 0 5,100 Angola 0 4,100 Somalia 0 3,000 Benin 0 2,970 Botswana 0 2,400 Congo 227,140 2,300 Togo 0 2,291 L i b e r i a 0 2,200 Guinea 0 2,000 TOTAL 895,476 1,1.481,511 Source: Ceres. 1977 Vol. 10(4). -195-of NPK i n A f r i c a exceeded domestic production and increasing amounts of foreign exchange w i l l continue to be spent on i t . Evidence i n support of t h i s i s the b i o l o g i c a l breakthrough i n production of high y i e l d i n g and yet f e r t i l i z e r - r e s p o n s i v e varieties of rice, maize and wheat. Therefore, i n the immediate future, f e r t i l i z a t i o n of forest plantations i n most LDCs appears i n f e a s i b l e because of basic human need of food before f i b r e , even i f f e r t i l i z e r application in forestry has been shown to be p r o f i t a b l e . The picture i n the long-run i s elusive but i s believed to be a function of other technological innovations i n the agro-forestry industry. The only possible way of f e r t i l i z i n g forest crops in the short-run i s through use of organic and b i o l o g i c a l sources of plant n u t r i t i o n . This may also become the optimal solution in the long-run. The technology has already been proven i n forestry. According to Hanson (1977), nitrogen supply i n pine stands may be augmented by seeding legumes that f i x nitrogen and increase nutrient c y c l i n g . For example i n New Zealand, Lupinus arboreus has been shown to f i x 160 kg/ha/year of nitrogen with 21 kg/ha/year of t h i s being added to mineral s o i l i f e a - ^ ' year period. And i n the United States, 4 6 kg/ha/year were added to a pine eco-system by several legumes and 341 kg/ha was added by hairy indigo in slash pine over a 5-year period. Since t h i s quantity over the above length of time i s approximately equal to the nitrogen in the biomass of a 16-year old l o b l o l l y pine P. taeda plantation, use of legumes appears to be a promising way to supplement the s o i l nitrogen u t i l i z e d for tree growth. The prospects of organic or b i o l o g i c a l f e r t i l i z a t i o n seem encouraging (Carr, per. comm.) . It i s for t h i s kind of achievement that Ruttan (197 5) observed, "A most serious question which the con-ference (of Asian Productivity Organization) did not attempt to address i s that of alternative sources of plant n u t r i t i o n . The recent high price of f e r t i l i z e r has served again to d i r e c t attention of research s c i e n t i s t s and administrators to the potential for organic and b i o l o g i c a l sources of plant n u t r i t i o n . " The potential for organic and b i o l o g i c a l f e r t i l i z a t i o n i n forestry exists i n Uganda. For example, ai\ integrated forestry-grazing system using legumes for f e r t i l i z e r i s fe a s i b l e . Secondly, taungya, a g r i - s i l v i c u l t u r e or Shamba system with farmers growing legumes such as beans, i s another p o s s i b i l i t y . Both these conditions require wide spacing as discussed above. Tree improvement i s the second treatment operation and i t involves the use of better trees to increase y i e l d of wood from forest land. One aspect of i t i s the genetic improvement of trees, which i s a c h a r a c t e r i s t i c a l l y long-term operation that i s at the same time r e l a t i v e l y i r r e v e r s i b l e . Genetic improvement looks at: adaptability, -197-resistance to pests, growth rates, tree form and quality and wood q u a l i t i e s (Zobel, 1974). The tree species grown by forest managers have had natural s e l e c t i o n operate on them for thousands5 of years. Unfortunately, t h e i r adaptation to survival has been s i t e s p e c i f i c whereas plantation forestry based on exotic species involves use of unfamiliar s i t e s . Therefore, survival considerations i n tree improvement programs are absolutely e s s e n t i a l . The a b i l i t y of a tree to survive on a given s i t e i s d e f i n i t e l y a minimum requirement from the point of view of the forest manager (Thor, 1975) . Volume, wood s p e c i f i c gravity; and disease resistance are the next most important t r a i t s to manipulate i n a genetics program ( V i l l i e r s de, 1970; Zobel, 1974). Tree improvement programs aimed at producing better qua l i t y logs have been a breakthrough (Gladstone, 1975; Banks and Van Vuuren, 1976; Barnes and Mullin, 1976). Breeding for reduced e n d - s p l i t t i n g i n E. grandis ( H i l l ) Maiden i s currently being ca r r i e d out in South A f r i c a . Increasing the adaptation of P. patula Schl. Cham to low a l t i t u d e s i s another. The advantages of breeding disease r e s i s t a n t trees as opposed to chemical control are obvious in an environmentally conscious world of today (Falkenhagen, 1976). In East A f r i c a , a major breeding program has been production of P. radiata D. Don v a r i e t i e s r e s i s t a n t to Dothistroma- p i n i . Once again, the "does i t pay?" question i s a - 1 9 8-c r i t i c a l one for tree improvement work since i t involves large investments and . . . the- returns far into the future ( P o r t e r f i e l d , 1975). Evidence fromVthe United-States indicates t h i s i s f i n a n c i a l l y and economically f e a s i b l e with a 17 to 21 percent rate of return a r e a l p o s s i b i l i t y (Zobel, 1974). In addition, tree improvement programmes enable shorter rotation length and thus are land-saving. Therefore, r a t i o n a l plantation management should include an intensive genetic improvement programme (Gladstone, 1975). On the other hand, increasing i n t e n s i t y i n genetic programmes requires greater amounts of investment. The optimum i n t e n s i t y i s ; t h e r e f o r e , one where net benefits are largest. Although tree improvement of f e r s great promise, i t s impact on the forest plantations of Uganda w i l l not be f e l t in the immediate future. The reasons are that, plantations of the exotic species are s t i l l r e l a t i v e l y young,and i n addition, there are no trained tree breeders or forest g e n e t i c i s t s . E. grandis (Hill) Maiden i s the p r i n c i p a l eucalypt species grown i n Uganda, however, due to i t s lack of resistance to drought, i t does not grow well in the d r i e r regions of the country. The immediate solution has been to substitute the slower growing E. t e r e t i c o r n i s Smith (of Zanzibar or Australian strains) for the former. Another solution l i e s in hybridization, a feature common among eucalypts. According to Karani (1971), i n planta-tions of E. grandis ( H i l l ) Maiden- i n Uganda, one often -19 9-comes across trees which look l i k e E. t e r e t i c o r n i s Smith-. These are hybrids of the two species which occur in stands regenerated from seed c o l l e c t e d where the two species were growing together. Hybrids of E. grand!s (Hi l l ) Maiden with either E. camaldulensis Dehnh or E. t e r e t i c o r n i s Smith are expected to be much more drought-r e s i s t a n t than E. grandis (H i l l ) Maiden and more productive than either of the two species. Therefore, Karani (1971) concluded as follows: "As a long term p o l i c y , breeding of hybrids, which are r e s i s t a n t to severe: conditions of the north (region of Uganda::) , and which can produce an economic crop of poles and fuelwood w i l l be undertaken. Hybrids w i l l be produced naturally by planting the species in question together i n mixtures, the progeny of which w i l l be tested to determine whether any desirable hybrids have been effected." 5.30 Formulation of Intensive Management Models At the beginning of t h i s Chapter, i t was shown that pote n t i a l supply from the current forest estate w i l l not be adequate i n meeting the l e v e l s of future consumption ex-pected to p r e v a i l . Close u t i l i z a t i o n , i f adopted, w i l l increase quantity of timber available i n the short - or medium - term. However, a long-term strategy w i l l be to expand plantation forestry a c t i v i t i e s through area expansion and/or intensive management. A question then a r i s e s , to produce timber for what? Over 90 percent of roundwood consumption i n Uganda i s i n the form of fuelwood and charcoal. With the indige--200-nous sources becoming scarce, plantations need to be es-tablished to augment t h i s supply. With respect to t h i s product category, raw material a v a i l a b i l i t y i s a function of the existence of a wood resource and i t s economic access and s u i t a b i l i t y of the species for burning. Several factors govern the burning a b i l i t y (expressed i n terms of i t s heat-ing power) of fuelwood: composition of wood with respect to combustible substances, water and ash content; the structure (especially number and size of pores) of wood; and the tech-nique of burning. No special log quality (stem form and straightness) i s required for fuelwood and charcoal. An optimum diameter (close to small diameter) e x i s t s . This i s to avoid costs i n -volved i n s p l i t t i n g large stems. Apart from a r e l a t i v e l y small diameter, poles and posts require straight stems with minimum taper. An additional requirement i s the ease with which the wood can be treated as cheaply as possible and yet be e f f e c t i v e against insect and fungal attacks. From the technical requirements of these two product categories, close spacing i s advocated i n both eucalypt and softwood plantations. Those products requiring large spacing to produce large-sized logs are sawnwood, veneer and plywood. Common problems encountered i n sawing logs from softwood plantations are induced by the inherent genetic character-i s t i c s that are qu a l i t y reducing, f a s t growth of the species planted and s i l v i c u l t u r a l treatments applied to the stands. These problems are also encountered i n peeling or s l i c i n g for veneer production. Pulp, fibrebQard and particleboard production are less demanding on raw material requirements. They may be manufactured from small-sized logs or waste from sawmill and plywood m i l l s . Therefore, they o f f e r the greatest f l e x i b i l i t y i n stand management. It was suggested i n the l a s t section of Chapter 4 that, currently, two pine species o f f e r the greatest opportunities for plantation forestry (P. patula Schl. Cham and P. caribaea Mo-relet var hondurensis) . Based on the discussions in the e a r l i e r part of th i s Chapter (part 5.22) , f i v e intensive management models (IA, IB, IC, ID and I E ) ; w i l l be.formulated f o r the management of the pine species. The rationale for t h e i r selection and the sequence of s i l v i c u l t u r a l operations for each model are shown i n Table 47. The y i e l d tables for the f i v e models are presented i n AppendixlV. Although, these tables refer to P. patula Schl. Cham.only, the limited research i n Uganda on P. caribaea Morelet var hondurensis (with respect to y i e l d c h a r a c t e r i s t i c s ) has indicated that^on areas of simi l a r s i t e index the y i e l d i n terms of volume overbark i s approximately the same for the two species (Kingston, 1970) . The remaining two management models in Table 47 are for E. grandis (H i l l ) Maiden. These models were proposed by Kingston (1972a and b) and the appropriate rotation -202-- i length and y i e l d s were presented i n the second repo The socio-economic implications of eucalypt planta-tions w i l l be the only aspect treated further, here a f t e r (in Chapter 7). •-•able 47: A survmary t a b l e f o r the proposed i n t e n s i v e management models INITIAL STOCKING W E E D I N G P R U N I N G Models Succestec No. or stems per hectare Espace-nent (M) 1st 2nd 3rd 4th 5th 1st to M 2nd to M 3rd 4th to to M M THINNING PRESCRIPTONS PRODUCT DESIRED I. SOFTWOODS (P. p a t u l a S c h l . Cham and P. caribaea Morelet var hondurensis) XA 2200 2.1x2.1 Yes yes No No No Yes No No no Single l i g h t t h i n n i n g at age 10 l e a v i n g a r e s i d u a l stock of ca. 1700 stems oer hectare. Pulpwood, pol e s , posts, fuelwood and c h a r c o a l . 2200 2.1x2.1 Yes Yes Yes No No Yes Yes Yes No One heavy t h i n n i n g at stand Pulpwood, pol e s , age 12, leaving a r e s i d u a l posts, fuexwooa, stocking of ca. 720 stems per c h a r c o a l , and hectare. some veneer and saw lo g s . IC 1800 2.4x2.4 Yes Yes Yes Yes No Yes Yes Yes No Two thinnings a t stand ages 12 and 20 years, l e a v i n g r e s i d u a l stocks of ca. 1000' and 500 stems per hectare, r e s p e c t i v e l y . S i m i l a r prodt as i n -13 but producing r.cr veneer arid ss logs-i O ID 900 3.3x3.3 Yes Yes Yes Yes Yes Yes Yes Yes Yes One heavy t h i n n i n g at'stand Veneer and saw age 20 years l e a v i n g a r e s i d u a l l o g s , stocking of ca. 330 stems per hectare. 1370 2.7x2.7 fes Yes Yes Yes No Yes Yes No No Three thinnings at ages 8,;f5 The c u r r e n t and 22 years, leaving r e s i d u a l s i i v i c u l t u r a l stocks of ca. 990, 570 ana 300 p r a c t i c e . Used stems per hectare, r e s p e c t i v e l y , here as a c o n t r c L HARDWOODS (Eucalyptus grandis ( H i l l ) Maiden) II? 308 6 1.8x1.8 Yes Yes Thinning during coppice crops. Fulpwocd,build-ing, p o l e s , posts, fuelwood and ch a r c o a l . 1800 2.4x2.4 Yes Yes Thinning during coppice crops B u i l d i n g ana tra n s m i s s i o n poles ar.d fence posts. • —2(T4-CHAPTER NOTES 1. By a higher and more e f f i c i e n t l e v e l of management i s meant that: as wood requirements continue to increase, e f f o r t s to augment future supplies of timber w i l l need to be concentrated i n those areas and on those opportunities which promise the greatest returns from the resources which w i l l be available. 2. According to Plumptre (1972), the u t i l i z a t i o n of the indigenous high forest i n t r o p i c a l areas (THFs) poses a number of p a r t i c u l a r l y intractable problems peculiar to the type of forest and l e v e l of i n d u s t r i a l development of the countries i n which i t i s found. Tropical forest i s very r i c h i n the variety of both i t s fauna and f l o r a ; the large number of tree species and consequent concentrations of any one species mean that, either small quantities of a li m i t e d number of species are used leaving the rest u n u t i l i z e d , or a very large number of d i f f e r e n t species with widely d i f f e r e n t properties has to be put on the market. Another deterrent to f u l l e r u t i l i z a t i o n i s the l e v e l of development of the countries i n which the majority of t r o p i c a l forest occurs, where in t e r n a l demand for timber i s low and communications are poor. But as development has proceeded i n LDCs, t h i s s i t u a t i o n may not be true anymore. In Uganda the position i s now very d i f f e r e n t since the natural forest alone i s barely able to produce s u f f i c i e n t timber, on a sustained y i e l d basis, to supply the timber needs of the country and timber consumption i s r i s i n g at about 7% per annum. "Conclusions from the (his) study indicate that i n Ugandan conditions i t should be possible to double the volume of timber taken per hectare without reducing the p r o f i t a b i l i t y of sawmilling below an acceptable l e v e l " . 3. A possible escape route may be through international trade. -205-Inappropriate i s used here to emphasize that forestry uses the three primary factors of production ( c a p i t a l , land and labour) d i r e c t l y . Therefore i t may not be possible to define i n t e n s i t y of factor usage accurately. One method of production i s labour intensive r e l a t i v e to another only i f , for a l l sets of r e l a t i v e p rices, i t has a higher r a t i o both of labour to c a p i t a l and of labour to land. However, i n Uganda, where an ' a r t i f i c i a l 1 surplus land exists due to i n e f f i c i e n t production and/or lack of economic incentives i n the agro-forestry sectors, c a p i t a l and labour are much more s i g n i f i c a n t and there-fore j u s t i f i e s use of the two-factor model. Grayson et a i . (1967) d i f f e r e n t i a t e d between type of  thinning - which refers to a description of the type trees removed i n a thinning compared with those l e f t standing; thinning weight - the volume removed i n a p a r t i c u l a r thinning; thinning i n t e n s i t y - the volume in one or more thinnings divided by the number of years between the time of the f i r s t thinning and end of the l a s t thinning cycle pages 526-527. Tree-stand data should include malformation percentage, mortality rates, stand volume and piece-size projections, changes i n timber q u a l i t y and hydrological and ground cover e f f e c t s . The relevant u t i l i z a t i o n data include p r i c e - s i z e gradient. Linked economic data should include d i f f e r e n t i a l haul rates, returns to scale of u t i l i z a t i o n plants and economic m u l t i p l i e r e f f e c t s through time. F i n a l l y , l o c a l influences which may become dominant include: b i o l o g i c a l , climatic and topographic considerations The opportunity costs of thinning should include: reduction in f i n a l crop increment rate; postponement of cash flows from greater volumes of c l e a r f e l l i n g s ; and postponement of linked u t i l i z a t i o n benefits. I t i s also important that prices of inputs and outputs should be expressed i n terms of s o c i a l costs and returns, i f forests are p u b l i c l y owned. Site index refers to the dominant height of a stand i n metres at age 15. In publications p r i o r to 1972, an age reference of 20 years was used. This d e f i n i t i o n refers to softwoods only. For eucalypts, an age reference of 10 years i s used. -206-CHAPTER SIX 6.00 DETERMINATION OF OPTIMUM ROTATION LENGTH(S)  6.10 Introduction In evenaged forest management, a rotation, may be defined as the planned number of years between the formation or generation of a crop and i t s f i n a l f e l l i n g (Meyer et a l . , 1952; Sinden, 1964). Therefore, rotation represents a regulatory factor i n the management of evenaged forests (Flora, 1977). Whereas s i l v i c u l t u r a l and natural constraints determine the possible upper l i m i t of rotation, technical considerations regarding processing determine the lower. Within t h i s upper-lower range, a number of factors, mostly economic, determine the actual rotation adopted. Depending upon the prevalence of, or the preferences given to some factors, rotations may be l a b e l l e d " f i n a n c i a l , physical, s i l v i c u l t u r a l , or technical" (Sinden, 1964). However, i n t h i s thesis, the main concern i s the economics of growing trees to merchantable ( u t i l i z a b l e ) size and the time i t takes to 'do i t . The time period w i l l vary between species and for a single species. Among other things, i t i s influenced by s i t e q u a l i t y , grade of thinning, treatments other than thinning and size to which trees are to be grown (Hiley, 1967). With a keen i n t e r e s t in intensive forest management and an emphasis on plantation -207-forestry, management i s faced with alternative courses of action. There i s need, therefore, to use economic c r i t e r i a for evaluation of these alternatives so as to choose the "best" (Massie, 1972) . The investment period i s deter-mined by the r o t a t i o n . In the context of national forest p o l i c y , the u l t i -mate importance of r o t a t i o n ' i s i t s influence on roundwood supply projections. For example, using an index of 1.0 for cumulative softwood y i e l d on a 30 year rotation, King-ston (1970) showed that when rotations of 25 and 20 years were used, t h e i r yields were 1.33 and 1.52, respectively. In plantation forestry, as opposed to THFs, so long as r e l i a b l e y i e l d data are a v a i l a b l e , determination of wood supply i s r e l a t i v e l y easy. A "major exercise i s to f i n d out the optimum rotation" (Pakkanen, 1973). But even i n this case, although easier, some management options (such as sawlog production as opposed to pulpwood) may somewhat complicate determination of rotation. Secondly, the rotation adopted w i l l influence the p r o f i t a b i l i t y of f o r e s t operations. This influence i s of great significance to private wood growers, whose invest-ments i n plantation forestry have to pay. I f a longer rotation means greater returns to investment, then woodlot farmers w i l l adopt i t . Whereas national round-wood supply may be the greatest concern for public • -208-forestry, private owners are governed by the p r i n c i p l e of maximization of p r o f i t . A national forest agency may advocate shorter rotations because these may lead to increased harvests (Johnson et al., 1977) . A l t e r n a t i v e l y , the national forest service may adhere to suggestions of "conventional wisdom" that maximum harvests are achieved when rotation equals the time of greatest mean annual growth (Flora, 1977). Increased harvest may lead to reduction i n wood prices (Fight and Youngday, 1977). Depending on how much such an increase i s , i t could lead to reductions i n producer(s) surplus, there-by becoming unfavourable to wood growers unless duly sub-si d i z e d by government. •Although an important t o o l , the problem of choice of the optimum or at l e a s t appropriate rotation length has occupied the minds of forest economists for over a century. -Unfortunately,- they have f a i l e d to agree on the correct method to use for computing i t (Haley, 1966 ; Pearse, 1967) . Incorrect solutions to the rotation problem could be costly (Smith and Haley, 1964). The importance of choosing an optimum rotation length may be summed up as follows: "No other factor affects the outcome of forest management operations to the extent as the length of rotations. For a given i n t e n s i t y of management i t determines the optimal l e v e l of growing stock which must be permanently maintained for sustained output, the l e v e l of annual cut by area as well as volume and value thereof, the rate of Mean Annual Increment (MAI), the l e v e l of annual investment i n reforestation, and the rate of f i n a n c i a l return from the -209-investment i n land, growing stock and other management related a c t i v i t i e s . Rotation i s thus an important tool i n the hands of foresters for regulating the annual flow of timber, revenue, annual i n -vestment i n reforestation and the rate of return from t h i s investment". (Rustagi, 1975). This chapter w i l l attempt to i d e n t i f y the factors influencing determination of rotation length i n plantation forestry i n Uganda. An appropriate c r i t e r i o n w i l l be selected and the optimum rotation lengths for each of the models formulated i n the l a s t Chapter assessed. 6.20 Factors A f f e c t i n g Rotation Length 6.21 Forest Ownership In several regions of the world, ownership of forest land can be divided into three broad categories: private woodlot owner, large i n d u s t r i a l company and public ownership (Kirkland, 1976) ^ . Each ownership class has a d i f f e r e n t set of objectives. For example, that of the woodlot owner may be to obtain the greatest return on his investment i n the form of revenue, or fuelwood yielded at-.rotation time. The objectives of the large company w i l l , on the other hand, conform with the broad processing, marketing and p r o f i t aims of the company. About 9^ 7: percent of the t o t a l forest estate and almost a l l sources of industrialroundwood supply i n Uganda are p u b l i c l y owned. -2id-Such ownership pre-supposes a wider range. of management objectives, some economic and others outright s o c i a l or p o l i t i c a l . The emphasis should i d e a l l y be > society's wel-fare. Therefore, i n addition to cash flow ( p r o f i t a b i l i t y ) analysis, other objectives include economic e f f i c i e n c y (s o c i a l cost/benefit analysis) , d i s t r i b u t i o n a l (equity) considerations and other intangible, i n d i r e c t and induced 2 eff e c t s . Due to complexity of management objectives, a number of problems are experienced i n t h i s type of ownership. A major theme of the Sixth World Forestry Congress held i n 19 66 was the need to put forestry's case at the national l e v e l . In p a r t i c u l a r , foresters i n a number of countries including Uganda have found themselves faced with the problem of i n -adequate funding. These foresters believe the problem has been pr e c i p i t a t e d by lack of adequate understanding of the importance of forestry to national economies. On the other hand, most Treasury Departments are not too enthusiastic about committing funds to departments l i k e forestry whose revenues are far too small compared to t h e i r requirements. Foresters argue, without quantitative support, that the ben-e f i t s from forestry far exceed the d i r e c t revenues put i n government c o f f e r s . The importance of regular funding for aff o r e s t a t i o n and plantation management i s that forecasts of roundwood supply are often based on anticipated planting rates. Over-and under-planting r e f l e c t d i f f e r e n t l y on s o c i a l welfare with respect to economic a v a i l a b i l i t y of wood. Furthermore, i r r e g u l a r planting programmes complicate forest regulation. For example, i n t h e i r estimate of roundwood supply i n Uganda, Lockwood Consultants Ltd., (1973) cautioned, " the softwood composition of projected supply i s based on the following: (1) there w i l l be replanting on exi s t i n g plantations a f t e r they have been cut; (2) . the NORAD Planting Scheme w i l l be ca r r i e d out on schedule". FAO (19 75) showed that during both the second and t h i r d Development Plans of Uganda, softwood a f f o r e s t a t i o n targets were never achieved (Table 4.8). Furthermore, the s i l v i c u l t u r a l programme i n THFs suffered an even worse setback. The main reason was "a shortage of funds to implement the programme'1. It was for reasons such as the above that the f e a s i b i l i t y of adopting B r i t i s h Columbia's Tree Farm Licence system for softwood plantations i n Uganda was assessed (Moyini, 1976) and a s i m i l a r study for Kenya had been car r i e d out by Spears (1962). The main advantages of such a system to industry w i l l be: 1) complete integration of i n d u s t r i a l and forest management; 2) long-term security to private investment i n plantations 3) long-term assurance of raw material at known pri c e ; and 4) price i s related to the production costs of the firm's own organization. -212-TABLE 4 8 Progress In P l a n t i n g Softwoods 1  i n Uganda (1966-76) PLAN I I PERIOD PLAN I I I PERIOD Year (-1966/67 Target ha 600 A c t u a l 538 Year (-1971/72 Target ha-2000 A c t u a l 1292 1967/68 600 763 1972/73 2000 1503 1967/69 600 653 1973/74 2000 2427 1969/70 2000 603 1974/75 2000 1473* 1970/71 2000 831 1975/76 2000 1500* T o t a l 5,800 3,388 10,000 7,195 * estimates Source: FAO (197 5) -213-I t i s doubtful whether individuals could i n i t i a t e lease agreements with the Uganda Forest Department i n the near future, because they lack technical and managerial s k i l l s . The immediate opportunity for individuals may be i n r a i s i n g eucalypt plantations for fuelwood, charcoal, poles, posts and even pulpwood. Their production period i s short and management i s simpler, compared to that for softwoods. D i s t i n c t i o n between the various ownerships i s e s s e n t i a l because among other things, they have d i f f e r e n t (1) time preferences (discount rates); (2) d i f f e r e n t meanings attached to costs and benefits; (3) d i f f e r e n t responses to r i s k and uncertainty; and (4) t h e i r a b i l i t y to procure production inputs also d i f f e r s . 6.22 Interest (Discount) Rate The fact that forestry investments have very long gestation periods i s known to every forester. But then i t i s t h i s very long period that makes the rate of i n t e r e s t used i n discounting or annualizing a c a p i t a l i z e d value become very pertinent and often c r i t i c a l (Hiley, 1956; Markus, 1967; Rustagi, 1977).' More than any other factor, the discount rate can a l t e r the outcome of an assessment completely ( H e l l i w e l l , 1974). Any long project can be made to appear highly p r o f i t a b l e by merely using a low rate for purposes of discounting (Rustagi, 1977). A high discount rate over-emphasizes the short-run and i s therefore "myopic" (Pigou, 1932). There has been a p r o l i f e r a t i o n of l i t e r a t u r e i n econo-mics and forest economics on the optimum discount rate that -214-should be used i n forest investments. Unfortunately, no concensus has been reached. Several factors operate i n determining the rate and i t should, therefore, be re-gio n - s p e c i f i c . Based on past l i t e r a t u r e , a rationale for choosing some rates for investments i n forestry i n Uganda w i l l be discussed. One of the main factors i s ownership of the forest enterprise, since the most e f f i c i e n t rate i s one that r e f l e c t s the decision maker's objectives (Haley, 1969). Several economists have argued that public p o l i c y aims at s o c i a l welfare and incorporates i n various mixes, s o c i a l , economic (Manning, 19 77a) and p o l i t i c a l goals. The p o l i c y d i f f e r s from the private individual's pre-dominantly economic, profit-maximization goal. Because of these two reasons, a lower discount rate should be used for public projects. H i r s c h l e i f e r et a l . (1961) suggested that the government should act to drive i n t e r e s t rates down to equate them with the s o c i a l rate. In thi s way, a l l investment decisions whether public or private w i l l be taken on the same basis. However, this act involves essen-t i a l l y a monetary and f i s c a l p o l i c y that i s c h a r a c t e r i s t i -c a l l y short-term i n nature. I t may, therefore, not be appropriate for determining a long-run normative discount rate for forestry investment ( K r u t i l l a and Fisher, 19 75). Libby (1976)asserted that i n public investment, decisions are based on a r t i f i c a l l y selected s o c i a l rate of discount that i s -215-c h a r a c t e r i s t i c a l l y lower than the market rate. Even projects with low annual returns on investment become acceptable i n such a case and the bulk of investment pro-jects shifted to the future. Baumol (196 9) suggested the existence of an opportunity cost of resources t i e d up i n public projects where lower discount rates than that of the market e x i s t . I t i s equal to the difference i n return over that achievable i n private"investments. To maintain e f f i -ciency of investment, 'public projects should have greater anticipated returns than private'. According to K r u t i l l a and Fisher (1975), a general concensus appears to have been reached among economists that a uniform discount rate (3) should be applied to a l l investments, private or public . This w i l l avoid r e a l l o c a t i o n of resources from higher to (4) lower y i e l d alternatives . However, there i s less agree-ment on the question of what should determine t h i s rate, much less it's' riumericali value. A possible solution i s to use the market rate of in t e r e s t and carry out s e n s i t i v i t y analysis using lower and higher rates. Among foresters i n general, there i s f i r s t the d i s -agreement on whether forest investments should be d i s -counted at a l l . Secondly, even among the forest economists who advocate i t , there i s disagreement on what constitutes the appropriate discount rate. Most however, suggest a lower rate for investments i n public forestry. The choice of appropriate discount rate for national -216-forests i s much more d i f f i c u l t compared to that of the private owners. A forest may present one group of u t i l i t i e s to the i n d i v i d u a l owner, but a d i f f e r e n t group to the community at large (Gron, 1947) . S p e c i f i c a l l y , the costs of p u b l i c l y owned forests have to be weighed against government spending i n other sectors such as communications, education, unemployment assistance and defence. A private firm a f t e r adjusting for such factors as r i s k and uncertainty can use the rate at which i t borrows as the appropriate one. However, government borrowing from the public should not be treated t h i s way. National forest authorities draw on the national revenue as a whole and much of t h i s i s derived from taxes on which no i n t e r e s t i s paid. Money obtained through taxation of firms and i n d i v i d u a l s has an opportunity cost. Though i t i s possible to calculate t h i s cost as a rate, i t w i l l vary with assumptions made about the nature and d i s t r i b u t i o n of the tax burden among d i f f e r e n t classes of taxpayers (Gane, 1967). There are those foresters who dismiss the notion of a discount rate outright and emphasize the s o c i a l importance of forestry and thereby downplay f i n a n c i a l consider-ations. Others believe that the discount rate should be keyed or equal to the physical growth rate of some normal1' forest . Manning (1977a) argued that t h i s would be equivalent to regarding forestry as an end i n i t s e l f . The argument that, i f the owner of a forest i s to pay a rate of i n t e r e s t of "p" percent on his cash c r e d i t with the bank, he cannot (should not) tolerate stands where the annual rate of volume increment -217-.5 '• i s less than "p", 'is a f a l l a c y . Aarestrup (1969) suggested that a r e a l net rate of return in forestry should be the same as i n other enterprises. The rate of return considered f a i r or 'normal' for a forest should be equal to the nominal rate of i n t e r e s t less i n f l a t i o n rate and plus or minus average r e l a t i v e r i s e (or f a l l ) i n price of timber. Following t h i s procedure, he i d e n t i f i e d a 3 to 4 percent r e a l i n t e r e s t rate for'Danish forestry.. H e l l i w e l l (1974) advocated a discount rate based..on natural hazards and technological changes. There i v.wi 11 usually be some element of r i s k involved, and i t i s suggested here that i t should be t h i s r i s k (and t h i s alone) which i s expressed i n the i n t e r e s t rate adopted:. Uncertainty about future values should be assessed separately from the physical r i s k s involved i n growing timber. F i n a l l y , he asserted that, although forestry y i e l d s other benefits i n addition to timber, even i f these were quantifiable, 'they often seem to be of r e l a t i v e l y minor importance". The German forester Pressler, used 3.5, 4.0 and 4.5 percent discount rates for State, large and small private forest holdings, respectively (Markus, 1967). In B r i t i s h Columbian forestry i t i s suggested that i n t e r e s t rates range from 5,.percent (Smith, 1976) to 8 to 10 percent (McKillop, 1976). Teeguarden (19.76) regarded the lower value conservative, and the upper l i m i t only correct i f funds are raised through sale of bonds to private investors instead of taxing income of consumers. -218-It would appear from an examination of the above l i t e r a t u r e that 10 percent was the maximum rate reported and zero the lowest. However, most of the l i t e r a t u r e has been drawn from MDCs with well developed market economies^ . . In LDCs, there i s a problem of f i r s t deciding the discount rate (social or private) to use. Secondly, no well developed market economy exists and therefore the private rate may not be a true (correct) one. I t was p a r t l y because of t h i s that Westoby (1962) advocated less stringent f i n a n c i a l c r i t e r i a 7 in the evaluation of investment projects i n LDCs . For example i n Pakistan, C h i l d and Hiromitsu (1975) reported that the cost of borrowing i s an administered price 'and may or may not be related to the rate of return on c a p i t a l ' . They argued that, of even more importance, c r e d i t i s rationed and loans not made in order of the highest s o c i a l p r i o r i t y . There were cases of firms that obtained substantial loan funds and at the same time benefited from a 'concessional i n t e r e s t rate'. At the same time, other firms paid higher rates for loans of lesser amounts. On the other hand, the smallest firms could obtain no c r e d i t at any i n t e r e s t rate. In some LDCs, loans to small farmers are made at rates below the market i n t e r e s t rates. Scobie and Franklin (1977) observed that 'in eight Latin American countries, the average nominal market i n t e r e s t rates were 54 percent while i n s t i -t u t i o n a l loan rates to agriculture were 11 percent'. Such an i n t e r e s t subsidy generates greater demand, and with an i n -e l a s t i c supply of c a p i t a l , pressure w i l l mount to equalize -219-the commercial and i n s t i t u t i o n a l rates. This pressure mani-fests i t s e l f i n the form of non-price rationing devices such as- nepotism, r a c i a l and r e l i g i o u s discrimination and bureau-c r a t i c procedures which ultimately raise the transaction costs of acquiring the subsidized loan. These developments w i l l tend to make the farmers averse to borrowing. Myint (1974) stated that the main source from which the peasants could borrow were and s t i l l are the 'non-institutional' lenders such as the v i l l a g e moneylender, the landlojrd or shopkeeper. In a report by the International Monetary Fund (IMF, Staff Papers November 1957), i t was observed that i n A f r i c a these n o n - i n s t i t u t i o n a l lending rates are very high,averaging 24 to 36 percent. Therefore, for most LDCs, the average maximum-market in t e r e s t rate reported .is 54 percent. A disequilibrium exists i n the money market;* and often i s procured at i n -s t i t u t i o n a l (subsidized) rates that may be as low as zero. Within t h i s upper and lower range, the appropriate discount rate for forestry a c t i v i t i e s i n Uganda/; and the reasons for choosing i t , "Will be discussed- in-a l a t e r part of t h i s Chapter. 6.23" Land, Labour and Capital The r e a l resources of any country are land, labour and c a p i t a l . These resources are economic because of t h e i r general scarcity;; and thus constrain the maximization of net benefits ( p r o f i t or s o c i a l welfare function) . ..... -220-In only very few and s t r i c t l y under-populated regions of LDCs, can land be regarded a free resource from a socio-economic point of view. Even i n some of these cases, the land tenure system combined with t r a d i t i o n a l ways of (8) valueing land, often give i t an u n r e a l i s t i c value Furthermore, being a major factor of production i n forestry, land has alternative uses and therefore opportunity costs. Based on the national population density, Uganda i s f a i r l y under-populated. Therefore, there i s available land for expansion of the forest estate. On a regional basis, there are those d i s t r i c t s (Kigezi, Bugisu, West Mengo and Masaka) that are t r u l y over-populated. Land i n these cases i s a scarce resource, and increases i n forest a c t i v i t i e s will-occur mainly-by i n t e n s i f i c a t i o n of management. The sparsely populated wooded savanna areas represent opportunities for expansion of the f o r e s t area. Fortunately, these opportunities occur i n what may be termed "economically depressed regions", because i n terms of a g r i c u l t u r a l potential they comprise the marginal ec o l o g i c a l zones 3 and 4. Ac q u i s i t i o n of land for plantation fo r e s t r y i s l i k e l y to be easy since there i s land available, and i n addition a l l land has been p u b l i c l y owned since the Land Ownership Decree of 1975. However, the permanency of t h i s decree i s unknown. The Forest Department should u t i l i z e t h i s -221-opportunity to acquire more land for forestry within the framework of economic s u i t a b i l i t y . Based on land use study, 9 the opportunity cost (or transfer earnings) of land intended for forestry should be calculated. There might arise a need to make a tradeoff between land use decisions based on s t r i c t l y economic c r i t e r i a and the dictates of superior s o c i a l goals or p o l i t i c a l expediency. Unskilled labour i n most LCDs i s not scarce and should therefore not be regarded an economic resource. Two reasons often make unski l l e d labour scarcer than i t r e a l l y i s . F i r s t l y , the establishment of "minimum wages" i n most of these countries makes wages i n the modern sector higher than would normally be required to a t t r a c t labour. Consequently, un s k i l l e d labour becomes scarce and t h i s exaggerates the r e a l cost of i t s use. Secondly, the s c a r c i t y of labour i s further increased because production requires the r i g h t mix between s k i l l e d (managerial or supervisory) and u n s k i l l e d labour. Since s k i l l e d labour i s scarce, i t also tends to make the supply of the u n s k i l l e d i n e l a s t i c . In Chapter Two, the need for and the trend .of employment in Uganda was discussed. Only three percent of the t o t a l population or 12 percent of the active population was i n gainfu l employment. There exists surplus labour e s p e c i a l l y i n the r u r a l areas. The p o l i c y of the government i s that, whereas provision of opportunities for f u l l employment to a l l c i t i z e n s who seek i t and the elimination of involuntary -222-unemployment i s one of the ultimate goals of de-velopment, i t s eventual achievement i s only a long-term one. In a l l LDCs, c a p i t a l i s f e l t to be p a r t i c u l a r l y scarce (Meir, 19 76). By c a p i t a l i s meant a l l man-made factors of production or the produced means of production (Le s l i e , 1971). From t h i s d e f i n i t i o n , forest plantations represent c a p i t a l and>therefore, i t may not be too erroneous to count the land on which trees are being grown as c a p i t a l . A maxi-mization of returns to c a p i t a l may then represent a good approximation to the s c a r c i t y of factors of production. The price of c a p i t a l i s given by the i n t e r e s t rate, as discussed e a r l i e r . Although operations i n the forest plantations of Uganda are r e l a t i v e l y labour-intensive, t h e i r c a p i t a l content remains c r u c i a l and a constraining factor. Sources of funding may be domestic or foreign. The role of c a p i t a l i n the over-a l l economic development of the country w i l l depend on: the minimum rate of investment; the p r a c t i c a l maximum rate of investment; and/or the highest rate of investment consistent with absorptive capacity"*"^. Uganda's p r a c t i c a l l e v e l of investment (fixed c a p i t a l formation) i n s o c i a l services i s governed by government's f i n a n c i a l p osition and the problem of financing recurring costs which follow. On the other hand, investment in- productive c a p i t a l formation i s l i m i t e d by the size of the domestic market and slow growth of export markets. Increaes, of fixed investment of 8.4 and 6.5 -22 3-percent per annum i n the modern and subsistence sectors/^ are con-sidered achievable. But then the amount of such investment that i s e f f i c i e n t and p h y s i c a l l y possible w i l l be governed by the extent of natural resources, taxes, the labour supply, the l e v e l of labour, technical and managerial s k i l l s , en-trepreneurial capacity, e f f i c i e n c y of public administration,,, and the extent of technology-mindedness of the population (Meir, 1976). These factors determine absorptive capacity. As an LDC, Uganda's domestic money markets may be separated into organized and unorganized ones. The organized money market i s that of the f i n a n c i a l i n s t i t u t i o n s very si m i l a r to that i n MDCs. However, the largest money market i s the unorganized one. Suppliers of c r e d i t i n the un-organized money market consist of a few f i n a n c i a l " i n s t i t u t i o n s such as co-operatives, government sponsored a g r i c u l t u r a l banks, professional moneylenders, large traders, shopkeepers, r e l a t i v e s and friends. The i n t e r e s t rates range from low (such as by Co-operatives and Uganda Development Bank) to the'very high and exhorbitant rates charged by moneylenders. A c h a r a c t e r i s t i c average rate between 24 and 36 percent i s considered normal for most LDCs. This source of funding i s not suitable for financing forestry projects unless c a r r i e d out through Co-operatives or the Uganda Development Bank at subsidized i n t e r e s t rates. Subsidies and c r e d i t f a c i l i t i e s s i m i l a r to that granted to a g r i c u l t u r a l farmers could be made available to those who want to e s t a b l i s h woodlot farms. Its success w i l l depend on the e f f i c i e n c y with which such -224-c r e d i t s can be administered considering that demand for funds far exceeds the supply. Domestic sources of finance for forest plantation establishment are mostly through the Government. A desirable growth rate of domestic savings for Uganda i s estimated to be over 6 percent per annum, and t h i s i s the major source of investment funds. Government expenditure may be separated into development (non-recurrent) and re-current expenditures. Sources of finance for forest plant-ations appropriately f a l l under development expenditure. In Uganda, the two major constraints to t h i s type of ex-penditure are (1) the a v a i l a b i l i t y of non-inflationary f i n a n c i a l sources; and (2) the administrative and managerial capacity for designing and inplementing projects. The a v a i l a b i l i t y of funds for forestry w i l l depend on the position the sector occupies on the p r i o r i t i e s l i s t within the "bank"-1-'-of projects. With an i l l - d e f i n e d forest p o l i c y i t i s under-standable, that up to now forestry has occupied a low p r i o r i t y . To ensure funding, remedial action should be taken to develop an improved p o l i c y . If the importance of forestry development i s well under-stood, domestic sources of funding w i l l be obtained by borrowing on medium and long-term bases from the public through issue of bonds by the Bank of Uganda. So long as government recurrent revenue grows fast enough to finance a l l recurrent expenditure, the surplus can also be channelled into development expenditure. Should revenue become a s i g n i f i c a n t source of i n v e s t i b l e finance, t h i s w i l l have an important bearing on tax structure and taxation p o l i c i e s . Over 90 percent of t o t a l Government revenue accrues from t h i s source. F i n a l l y , there i s external funding. There has been a p r o l i f e r a t i o n of l i t e r a t u r e on the advantages and d i s -advantages of external aid, grants and foreign investment. However, what i s ultimately true i s that i n LDCs/ domestic supplies of investment funds are generally severely l i m i t e d . Therefore, use must be made of external finance (Haley and Smith, 1976). But i n so doing, a number of pertinent questions need to be answered. "Does the receipt of aid sap enterprise and s e l f - r e l i a n c e , fostering instead a s p i r i t of dependence? Does i t favour the towns and the r i c h as against the countryside:' and the poor? Does i t encourage an unreasonable expansion of the bureaucracy? Does i t lead to ways of doing things which are inappro-priate for the country and impossible to sustain? Are waste and corruption i t s usual concomitants?" (Wood; i n Morton, 1975). Government p o l i c y towards external borrowing and external grants i s that these should be assessed on the basis of l i k e l y p o l i c i e s of major lenders to Uganda. It i s recognized that there i s a danger of r e l y i n g too much on external finance both for p o l i t i c a l and economic reasons. Furthermore, the t o t a l supply of investment finance to Uganda has been stagnant f o r -226-several years and i n addition, there i s no certainty about the amounts, terms'; or timing of such finance. There are d i f f i c u l t i e s associated with u t i l i z a t i o n of external finance. These funds are usually l i m i t e d to- p a r t i c u l a r projects which s a t i s f y the c r i t e r i a set by the lender,, and include a re-12 quired proportion of import content and generally necessitate a matching contribution (l o c a l costs) by government. The Government of Uganda welcomes o f f i c i a l external finance so long as i t i s offered for p r i o r i t y projects and sectors on terms and conditions which the government finds satisfactory, and i n the s p i r i t of true partnership. Apart from government-to-government aid, a number of international or regional agencies provide possible sources of investment,finance. These include the World. Bank and i t s s i s t e r companies IDA and IFC, A f r i c a n Development Bank, Arab Bank for Economic Development i n A f r i c a (ABEDA) and the Arab Development Fund (ADF). For example, ABEDA gives loans of an average duration of 2 5 years at i n t e r e s t rates between 2 and 6 percent for p a r t i c u l a r projects, while ADF gives loans at zero i n t e r e s t for 40 years (Ceres, 1976). Long-term loans at low i n t e r e s t rates should be p a r t i c u l a r l y suitable for forest plantations. However, unless i t can be proved that an i n t e r e s t - f r e e loan cannot be better used i n another sector than forestry, i t ultimately c a r r i e s with i t -22 7-an opportunity cost. What t h i s means then i s ; that^a thorough s o c i a l cost-benefit analysis should be prepared before going to the international money market to borrow funds for a given project. In fact the lack of well planned projects i s what ADF o f f i c i a l s give as a reason for not havinq advanced substantial funds to A f r i c a n countries. Since i n Uganda a great emphasis has been placed on the role of public corporations i n economic development, th e i r sources of investment funds are. worth mentioning. These corporations (including Uganda Development Corporation Uganda E l e c t r i c i t y Board, Uganda Cement Corporation, Wood Industries Corporation, National Insurance Corporation, Uganda Commercial Bank) finance t h e i r investments from a variety of sources. Some money i s generated i n t e r n a l l y . Secondly, government i s often the sole major shareholder and creditor of some magnitude-; and advances funds to these Corporations. F i n a l l y , the Corporations may borrow eithe r d i r e c t l y on the l o c a l organized money market or from external sources. The same rules apply to the Corporations as to government, but i n addition, the l a t t e r may act as a guarantor. These Corporations being companies governed by the c r i t e r i o n that each should operate on a commercial basis and earn a reasonable rate of return on t o t a l c a p i t a l employed , . have'... an opportunity to go' into manage-ment contracts or joint-ventures with external private finan -228-Such ventures with relevant multinational corporations are conceivable. Therefore, i n summary, sources of finance for woodlot farms could be raised from the Uganda Development Bank or s p e c i a l l y i n s t i t u t e d government c r e d i t schemes similar to those for a g r i c u l t u r e . A l t e r n a t i v e l y , fuelwood, poles and posts plantations could be established by the Uganda Forest Department with funds from the government development ex-penditure budget. Financing of i n d u s t r i a l plantations should i d e a l l y be undertaken by government, public corpora-tions, external agencies, or combinations of these. Uganda should try as much as possible to secure external sources of finance for r u r a l development-oriented projects l i k e a f f o r e s -t a t i o n . Current thinking of international or regional agencies l i k e the World Bank, ADF, ABEDA and FAO supports t h i s . However, a well forumlated project i s a prerequisite. 6.2 4 Risk and Uncertainty If the future outcome of any management a c t i v i t y were known for sure, then we would be dealing with certainty. But t h i s i s hardly the case i n forest management, where "un-certainty i s an inherent factor" (Thompson, 1966) . Some authors e x p l i c i t l y (Dasgupta et a l . , 1972; Weston and Bringham, 1974) or i m p l i c i t l y combine "uncertainty" and f ,risk f t under one heading and discuss them c o l l e c t i v e l y . Decision making i n -volving r i s k occurs where future outcomes are a function of -22 9-established s t a t i s t i c a l p r o b a b i l i t i e s . A solution i s un-c e r t a i n where the p r o b a b i l i t y of occurence cannot be es-tablished i n a quantitative manner. Uncertainty influences rotation with respect to assumptions made about revenues and costs. In evaluating any project, there i s bound to be some uncertainty about the future stream of benefits and costs including changes i n tastes, discoveries of new sources of supply, and technolo-g i c a l innovations (Mishan, 1976) . Acting over time, these factors may lower or r a i s e the price(s) of outputs or inputs. In most t r a d i t i o n a l forest economics analysis of the rotation problem, i t i s assumed that timber products output by quantity and q u a l i t y and the prices of these outputs,are known. Secondly, i t i s assumed that costs (or input prices) are known at the time an investment i s made and that these w i l l remain constant over time. The t h i r d assumption i s that technology of processing w i l l not change i n the future or w i l l change according to an assumed trend. Fourthly, i t i s assumed that the discount rate applicable to the investment i s known. F i n a l l y , a perfect knowledge about wood output i s assumed. None of these assumptions i s e n t i r e l y correct. Flora (1964) suggested that i f certain assumptions are indeed plausible and i f decisions are between forest investments whose returns are about equally distant i n time, then un-certainty can be ignored. Current practices of dealing with uncertainty include: -230-cut-off period, an a r b i t r a r y addition of a premium to the otherwise appropriate rate of discount, downward r e v i s i o n of future output prices and upward adjustment of expected future input prices, and introduction of a "subjective p r o b a b i l i t y " (Mishan, 1976) often involving a s e n s i t i v i t y analysis of upper and lower estimates. A central argument adopted i n t h i s thesis with respect to uncertainty is, that^since uncertainties a f f e c t i n g input and output prices, technology of processing and consumer tastes seem about equal for the f i v e softwood models, a "best guess" of outcomes i s appropriate (Flora, 1964). I t i s recognized that those uncertainties associated with natural (wind, f i r e susceptibility)}, and b i o l o g i c a l (insect and disease) hazards w i l l vary somewhat among the management models proposed i n Chapter Five. These might, therefore, influence product output i n s l i g h t l y d i f f e r e n t magnitudes. However, with intensive management of forest plantations, the d i s p a r i t i e s i n uncertain-t i e s w i l l be reduced and : 'may- \ be ignored. If required, t h i s type of uncertainty can be taken care of by determining rotation length for a range of s i t e indices. Since we are primarily concerned with i d e n t i f i c a t i o n of the optimal product-oriented management model(s), i t w i l l not be necessary to carry out t h i s exercise. An average s i t e index i s used throughout. Two assumptions of output prices are considered i n t h i s analysis. The f i r s t i s where royalty rates w i l l be constant regardless of tree size (,U.shs 17.50 per cubic metre). Where-as t h i s p r i c i n g may be suitable for products such as fuelwood -231-and pulpwood, i t i s not appropriate for veneer and sawlogs. Values r e a l i z a b l e for these products should be. more sensitive to s i z e . In addition, c u l t u r a l practices such as pruning are carried out with the purpose of improving qu a l i t y of the product desired. Therefore, to take into account these factors of consumer taste, a p r i c e - s i z e gradient and a premium for q u a l i t y should be used. With no data available for premium, the v a r i a t i o n of royalty rate with mean stand diameter at breast height (dbh) was taken as an approximation. Royalty rates based on these two assumptions are shown i n Figure 14. An average range of stand establishment and management costs for the current s i l v i c u l t u r a l practices i n softwood plantations i s shown i n Appendix V . Based on these data, estimates of management costs for models IA, IB, IC, ID and IE are shown i n Table 49. 6.30 Rotation C r i t e r i a Having discussed the importance of, and some factors a f f e c t i n g rotation length, i t i s recognized that, the objective of carrying out forest operations i s maximization of some return. I t may be measured i n terms of physical volume output, p r o f i t or s o c i a l welfare. Therefore, the choice of an appropriate c r i t e r i o n for determining the optimum rotation length i s very e s s e n t i a l . In forestry l i t e r a t u r e , these models include: the age of culmination of mean annual increment, -2-32-03 F i g . 1,4. Variation of Royalty Rate with Stand DBH Source: Grut (1977) Glearfell Thinning TABLE 4 9 / Cost Estimates f o r the Fiv e Intensive Management Models* Operation Year M 0: D "E L S (JA " U s / h a - 1 - 0 - — : ™ ) I n i t i a l land c l e a n i n g . -2 100 100 100 . 100 100 Ground p r e p a r a t i o n -1 125 125 125 125 125 Nursery -2 241 241 197 99 150 P l a n t i n g 0 141 141 116 58 88 Weeding 1st 1 75 75 75 75 75 2nd 2 75 75 75 75 75 3rd 3 - 50 50 50 ' 50 4 t h 4 - - 25 25 25 5th 5 - - - 10 -Pruning 1st 6 88 88 88 88 88 2nd 8 - 88 88 88 88 3rd 11 - 100 100 100 -4th 14 - - - 125 -Annual maintenance c o s t s A d m i n i s t r a t i o n Annual 60 60 60 60 60 P r o t e c t i o n Annual 40 40 40 40 40 * based on cost f i g u r e s by Kingston (1970) and a l s o reported i n Lockwood Consultants L t d . (1971) and shown i n Appendix VI -2 34-maximum volume production, zero-interest f i n a n c i a l models and net present values. Of course some b i o l o g i c a l ( s i l v i c u l t u r a l ) c r i t e r i a e x i s t which primarily relate to the vigour of growth, re-production and ecological longevity. Whereas these c r i t e r i a may be important in.natural forests, they are less so i n plantations where the elements are so managed as to produce a healthy stand. Seed procurement i s a c t i v e l y managed and often involves establishment of seed orchards and a well developed tree improvement program. Scarce resources are u t i l i z e d i n the management of plantations and unless they are intended for protective as opposed to productive purposes, ec o l o g i c a l longevity becomes inappropriate as a measure of returns to resources used. A rotation of maximum volume production of a s p e c i f i e d product or group of products i s what Meyer et a_l. (1952) referred to as "technical r o t a t i o n " . Where forest management i s project-^oriented, an i n t e g r a l part of a "permanent" enterprise such as a sawmill or pulpmill, the most important consideration may be maximum production of the desired pro-duct even i f cost of production exceeds that at some lower l e v e l . Even i f a region or nation can import wood cheaper than produce i t , an unfavourable trade balance or the need to provide f u l l - t i m e or some employment may j u s t i f y domestic production. Such a strategy of treating wood as a t u s t r a t e g i c resource" i s easier to implement i n p u b l i c l y owned forests. Private forest owners however, may be encouraged to carry on for e s t r y a c t i v i t i e s through establishment of import duties, -235-l o c a l subsidies . or forest regulation. The zero-interest models include maximum gross revenue, maximum average gross revenue, and maximum annual net revenue (forest r e n t). The models e x p l i c i t l y ignore i n t e r e s t on c a p i t a l and the opportunity cost of the other inputs. Secondly, timber growing costs are also ignored except for f o r e s t rent. Assuming the absence of a p r i c e - s i z e gradient and where technical considerations are less demanding on tree siz e , the c r i t e r i o n of maximum gross revenue w i l l give the same rotation length as the technical rotation and maximum volume production c r i t e r i a . This could be the case i n pulpwood production. Using the same assumptions, the maximum average gross revenue c r i t e r i o n w i l l give a rotation length equal to that of the culmination of the mean annual increment (MAI). The '"maximum gross revenue"' and ''maximum average gross revenue"' c r i t e r i a dismiss i n t e r e s t and plantation management costs; and yet^both these items have a com-pensating e f f e c t on rotation length. These c r i t e r i a give c h a r a c t e r i s t i c a l l y long rotations (Gaffney, 1960). F i n a l l y , the t h i r d zero-interest c r i t e r i o n i s the "forest rent'* c r i t e r i o n . Forest rent = -'•2 3 6 -where Rfc = revenue at stand age t years C = regeneration cost Under t h i s c r i t e r i o n , optimum rotation length corresponds to that stand age where average annual net income per unit area i s maximum. The c r i t e r i o n considers costs such as those for planting and c u l t u r a l treatments. However, i t ignores the opportunity cost of c a p i t a l . The decision to charge i n t e r e s t on c a p i t a l depends on the objectives of the forest owner. However, as discussed e a r l i e r , at leas t some nominal i n t e r e s t should be charged to r e f l e c t s c a r c i t y of c a p i t a l . By ignoring opportunity cost of c a p i t a l and including regeneration costs i n our calculations, we in<ifact cumulatively lengthen the rot a t i o n . Therefore, t h i s c r i t e r i o n gives r i s e to c h a r a c t e r i s t i c a l l y long rotations and prefers small annual volume increments i n favour of f l e x i b i l i t y i n manoeuvring c a p i t a l among natural hazards and consumer preference opportunities. T r a d i t i o n a l microeconomic theory of p r o f i t maximi-zation i n a single period defines an optimum output l e v e l as one at which marginal revenue i s equal to marginal cost. In forestry we deal with many' periods and the present net worth c r i t e r i a are used. A discount rate i s e s s e n t i a l for -237-these models, and i s used to bring cost and revenue items occurring at d i f f e r e n t times to a common point. The problems associated with determining the actual discount rate used were discussed above. The optimum rotation -length occurs where a stand's anticipated future value growth w i l l not increase a firm's net present worth. A present "net worth model that determines ..rotation -length for a' single l i f e span instead of considering an i n f i n i t e stream of costs and revenues. : i s ^  ascribed to f o r e s t economist Duerr (1960). According to t h i s model, optimum rotation length occurs where the marginal value growth equals the appropriate external (interest) rate R t PNW = — - ~ C U+p)t where PNW = present net worth P = discount rate and and C as defined above. I t i s obvious from the above formulation that the cost of regeneration has no influence on rotation length, although i t does reduce the present net worth. Although the c r i t e r i o n considers the opportunity cost of c a p i t a l i n deciding rotation length, i t ignores the costs of inputs other than the growing stock. -238-For example, the opportunity cost of land i s omitted i n t h i s c r i t e r i o n . Haley (1966) noted that although the opportunity cost of land i s often i n s i g n i f i c a n t , i t should not be ignored because i t can become very important under certain conditions. Furthermore, i t i s not the size of t h i s cost per se but other factors associated with i t which are important and include: u t i l i z a t i o n standards, stocking, value of stand (whether constant or increasing value) per cubic metre . Therefore, instead of Duerr's present net worth c r i t e r i o n a more general one i s advocated. The general present net worth c r i t e r i o n treats both growing stock and land as variable inputs. In t h i s thesis, since the value of land i s unknown, a v a r i a t i o n of the above model, maximizing the rent accruing to land was used where land (soil) expectation value S e was determined as follows: t n r - i m +-• R - C (1+p) + E T± U+p) - I Cy (1+p) "3 s = p>l 1^1 E e [ (1+P) t - 1] . P where S e = s o i l (land) expectation value at stand age t year C = cost of establishment E = annual maintenance and administration costs T-}; = value of thinnings at stand age i - , where i=l,2,3,-.'. C. = cost of intermediate operations at stand age 3 "j", where.j = 1,2, ...,m t = rotation age p = discount rate expressed as a decimal f r a c t i o n R^ = revenue from harvest i n year t. -239-6.40 R e s u l t s and Choice Of C r i t e r i o n ( C r i t e r i a ) There are two main reasons f o r c a r r y i n g out a f f o r e s t a t i o n p r o j e c t s . F i r s t , wood may be regarded a s t r a t e g i c r e s o u r c e and t h e r e f o r e the need f o r s e l f - s u f f i c i e n c y . In t h i s case, whereas the c o s t of p r o d u c t i o n of wood may be c o n s i d e r e d , i t c o u l d nonetheless be overlooked i n the - l i g h t of the o v e r a l l p o l i c y o b j e c t i v e . A more a p p r o p r i a t e c r i t e r i o n i n t h i s case would be maximum p r o d u c t i o n of wood per u n i t area,? and ; c o i n c i d e s w i t h the age a t which MAI c u l m i n a t e s . Based on y i e l d t a b l e r e s u l t s of the f i v e i n t e n s i v e management models formulated i n Chapter 5 and shown i n AppendixiV 3 maximum MAI v a l u e s i n m /ha/year o b t a i n e d were 28.4 f o r IA, 27.0 f o r IB, 29.4 f o r IC, 22.6 f o r ID and 25.9 f o r IE. Except f o r models IC and ID when s i n g l e year maximum values o c c u r r e d , the o t h e r models showed a range o f stand ages a t which MAI remained maximum. Models IC and ID both showed r o t a t i o n lengths of 20 y e a r s . The r e s t had ranges of 18 to 21 years f o r IA, 19 to 21 years f o r IB and 20 to 21 years f o r I E . These r e l a t i o n s h i p s are shown i n F i g u r e 15. I f Uganda i s going to e s t a b l i s h softwood p l a n t a t i o n s to produce the maximum amount of wood i r r e s p e c t i v e of product 3 d e s i r e d , then model IC which produces on average 29.4 m /ha/year a t age 20 years should be adopted. However, s e l f - s u f f i c i e n c y presupposes p r o d u c t i o n of wood f o r s p e c i f i c purposes. For example, Uganda being a l a n d l o c k e d country, i t may be d e s i r a b l e to achieve s e l f - s u f f i c i e n c y i n bulky products l i k e -240-I 1 I 1 1 1 T 1 1 6.0 .I2.fi IB.O 20.0 24.0 2B.0 32.0 36.0 -10.0 STRND P G E I Y R S ) F i g . 15 V a r i a t i o n of Mean Annual Increment (MAI.) With Stand Age Source: Appendix. IV -241-fuelwood, building poles, posts and pulpwood. Separating these products categories from veneer and saw logs by a 20cm technical mean stand dbh c r i t e r i o n , the e a r l i e s t age at which stands reach sizes suitable for veneer and saw log production are 17 years for IA, 11 for ID and 13 for IE. Models IB and IC each a t t a i n the marginal size at age 14. Dbh development with stand age i s shown i n Figure 16. If the desire i s to produce veneer logs from trees of mean stand dbh of 30 cm, models IA, IB and IC atta i n i t at stand age greater than 35 years. Models ID and IE do so at stand age 26 to 22 years, respectively. Therefore, for the c r i t e r i o n of a mean stand dbh of 2 0 cm, there i s no c o n f l i c t between i t and that of culmination of MAI. However, when a c r i t e r i o n of larger size dimension (30 cm dbh) i s adopted, a tradeoff has to be made between maximum volume production and product desired. A summary of these r e s u l t s i s shown i n Table 50. F i r s t l y , the c r i t e r i a of culmination of MAI and technical rotation ignore the opportunity cost of c a p i t a l and land which are major factors of production i n plantation fo r e s t r y . I t has been suggested that i n order to expand af f o r e s t a t i o n a c t i v i t i e s , external sources of finance should be sought. Considerations involving repayment of these loans and s c a r c i t y of factors of production require that an economic approach should be used to determine the age when stands should be f e l l e d . Secondly, zero i n t e r e s t models do not e x p l i c i t l y take into Management Models 1 1 1 1 1 1 r r 1 1 .0 4.0 8.0 12.0 16.n 20.0 24.0 20.0 32.U 3G.0 40.0 STBND flGE(YRS) FIGURE 16 .. •. •,. • Vari a t i o n of Mean Stand DBH With Age Source: AppendixIV, TABLE 5 0 B i o l o g i c a l and Technical Rotation for Five Softwood Management Models MANAGEMENT MODEL ROTATION LENGTH (YEARS) Culmination of MAI 2 0 cm-Mean Stand 30 . DBH cm Mean Stand DBH -Value (Years) (Years) (Years) m 3/ha/year IA 28.4 18 to 21 17 >35 IB 27.0 19 to 21 14 >35 IC 29.4 20 14 >35 ID 22.6 20 11 26 IE 25.9 20 to 21 13 22 Source: Appendix IV' -244--account the o p p o r t u n i t y c o s t o f l a n d and c a p i t a l . F or the purposes of t h i s t h e s i s , t h e x s o i l (land) e x p e c t a t i o n value c r i t e r i o n o f Faustmann was used to d e r i v e the optimum ages a t which stands should be f e l l e d f o r the f i v e management models. Two assumptions, co n s t a n t and s i z e - r e s p o n s i v e r o y a l t y r a t e s were used. With 6 per c e n t d i s c o u n t r a t e regarded f a i r l y r e p r e s e n t a t i v e and d e f i n i t e l y an upper l i m i t f o r the true s o c i a l d i s c o u n t r a t e i n Uganda, optimum r o t a t i o n l engths ( i n years) o f 17 f o r IA, 19 f o r IB, 22 f o r IC, 19 f o r ID and 23 f o r IE were obta i n e d , assuming a constant p r i c e o f wood r e g a r d l e s s o f t r e e s i z e (Table 51). However, when the p r i c e o f wood was allowed to vary with mean stand dbh, r e c o g n i z i n g premiums f o r s i z e , d i f f e r e n t r o t a t i o n l engths were o b t a i n e d . A l l of them were lengthened r e s u l t i n g i n 2 6 years f o r models IA and IB. Other r o t a t i o n lengths were 30 f o r IC, 27 f o r ID and 29 f o r IE. T h i s r e s u l t e d i n i n c r e a s e of r o t a t i o n by 9 years f o r model IA and 6 years f o r IE, with the r e s t of the models w i t h i n t h i s range (see Table 52). From the two t a b l e s above, changes i n optimum r o t a t i o n l e n g t h were much l e s s s e n s i t i v e a t low and high d i s c o u n t r a t e s . Between these two extremes, changes i n r o t a t i o n l e n g t h were s e n s i t i v e ^ to the d i s c o u n t r a t e used and i t i s .mainly t h i s range t h a t most f o r e s t economists have emphasized. Using Model IA as an example, based on data i n Table 49 (with p r i c e - s i z e g r a d i e n t ) , optimum r o t a t i o n TABLE 51 Land E x p e c t a t i o n V a l u e s ( W i t h o u t Premium F o r S i z e ; . M O D E L S Dis-Rate Q, O IA X Y IB X Y IC X Y ID X Y IE X Y 2 9021 28 9086 31 18929* >35 6092 32 25089* >35 4 2969 21 3031 23 6516 26 1645 24 • 8733 27 6 1302 17 1300 19 3020 22 437 19 4232 23 8 556 14 498 17 1422 21 -88 16 2119 23 10 137 14 41 12 493 21 -337 13 1125 16 12 -124 11 -194 10 -83 21 -490 13 535 16 14 -307 11 -350 10 -388 10 -592 12 121 16 16 -440 9 -472 9 -498 10 -645 10 -174 16 18 -528 9 -559 9 -585 10 -684 10 -386 16 20 -601 9 -630 9 -650 9 -708 6 -539 16 X = maximum PNW (U.sh/ha) S o u r c e : T a b l e 49 ( f o r c o s t v a l u e s ) . A p p e n d i x IV Y = optimum r o t a t i o n acre (years) ( f o r v o l u i . i e y i e l d ) and a c o n s t a n t p r i c e * = value'at age 35. " ° f U.shs 17.50 p e r m 3 . TABLE 5-2-Land Expectation;.(Se) Values With Price-Size Gradient MANAGEMENT ' MODELS Discount Rate IA • Value A Q. B IB A B IC A B ID A B IE A . B 2 10198 33 9623 34 19788* >35 10062* >35 37866* >35 A 4 4407 33 4058 34 9711 33 4867 32 18574 35 ,3 6 1911 26 1752 26 4745 30 2192 27 9845 29 8 744 21 557 19 2325 25 911 19 5492 25 ) • io 104 17 -84 19 1057 24 326 18 3106 23 ".- 12 -268 17 -444 17 254 22 -95 18 1620 23 14 -524 14 -647 12 -254 22 -364 15 669 23 16 -667 14 -747 12 -659 21 -520 15 178 17 18 -773 14 -823 12 -761 14 -630 15 -134 16 20 -850 12 -880 12 -834 12 -704 13 -351 16 A = maximum PNW at a given discount rate "-(;U• shs/ha) * = 1 does not represent the maximum PNW which l i e s beyond stand age of 35 years B = stand age at which maximum PNW occurs (years). Source: Table 4 9 (for cost values) , Appendix IV ;>(for volume y i e l d and mean stand dbh values) Figure 15 (for v a r i a t i o n of unit price of wood with mean stand dbh) -24 7-length did not change when the discount rate was increased from 2 to 4 percent (remaining at 33 years), or 14 to 18 percent (remaining at 14 years). Kingston (1970) obtained an optimum rotation length of 24 years. He suggested that "as the (land expectation) value f a l l s slowly up to about 30 years there i s a r e l a t i v e l y long period for manipulation of rotation and p a r t i c u l a r l y so with poorer s i t e s " . His results conform to that of model IE, the current management regime when royalty rate i s constant regardless of tree si z e . However, by maintaining a rotation length of 24 years for the other models, opportunity costs are incurred equal to the difference between Se values at 24 years and the optimum rotation age worked. Looked at i n another way, any model that had a higher Se value at i t s rotation age than model IE at age 23 generated an opportunity benefit. When premium was allowed for size, a l l rotation length values increased and no opportunity cost but benefits were generated. 6.50 Summary In conclusion, the b i o l o g i c a l and technical c r i t e r i a were inappropriate for the o v e r a l l national forests, although they may be suitable for private woodlot farms. Therefore, these c r i t e r i a w i l l be abandoned i n favour of the s o i l , (land) Expectation c r i t e r i o n because i t i s f l e x i b l e with respect to changes i n assumptions. But f i r s t , i t must be emphasized that the 6% discount rate chosen s a t i s f i e s the possible rates at which external finance can be obtained as discussed e a r l i e r . Secondly, i t i s believed that, t h i s discount rate - 2 4 8 -represents the upper l i m i t to the appropriate s o c i a l discount rate. Using the s o i l expectation c r i t e r i o n , there were two assumptions of royalty rates, with or without a p r i c e -size gradient. The next question was, which royalty rate should be used i n choosing the optimum rotation length? Both were suggested. Models IA and IB with close spacing and very l i g h t i n i t i a l thinning should be evaluated with no p r i c e - s i z e gradient. On the other hand, models ID and IE were s p e c i a l l y designed to y i e l d veneer and sawlogs and therefore the optimum rotations for these were evaluated using a size-responsive royalty rate. F i n a l l y , model IC was designed to y i e l d primarily short rotation products although some veneer and sawlog production was f e a s i b l e . Since the l a t t e r product category was e s s e n t i a l l y a by-product, the rotation for model IC was based on a non-size-responsive royalty rate. Based on the above arguments, the optimum rotation lengths adopted (in years) were 17 and IA, 19 for IB, 22 for IC, 2 7 for ID and 29 for IE. The volume y i e l d s and economic consequences of adopting these intensive management models are discussed i n the next Chapter. CHAPTER NOTES Other ownerships frequently encountered i n forest l i t e r a t u r e include: communal; church; co-operative; and l o c a l government ownerships. These are e s s e n t i a l l y variations of the three broad categories mentioned. In other words, stumpages/royalties are for example one of the c r i t e r i a i n making sales of plantation wood or investing i n planting by the state. Other c r i t e r i a would include: ' f u l l employment of otherwise i d l e resources, environmental e f f e c t s , stimulation of related forest i n -dustries, added demands on Government-financed services, f l e x i b i l i t y i n meeting market change, development of new export markets, net earnings or savings of foreign exchange, f i n a n c i a l soundness and p r o f i t a b i l i t y ' . (Kirkland, 1976). With possible adjustment for treatment of r i s k . K r u t i l l a and Fisher (1975) have observed that using lower discount rate i s l i k e l y to discriminate against-a resource development project rather than i n favour of i t , i f environmental opportunity costs (the foregone benefits from use of the s i t e i n i t s natural condition) i s also d i s -counted at a lower rate. Because, according to Aaestrup (1969): a) rate of i n t e r e s t to be paid to bank i s a nominal rate of i n t e r e s t the r e a l magnitude of which depends on f l u c t u -ations i n the value of money, whereas volume increment (percent) i s independent of the value of money - a r e a l rate of i n t e r e s t . Therefore, i t i s incorrect to compare the two, b) volume increment may r e s u l t i n higher average price, and i n addition the prices of timber may be slowly r i s i n g or f a l l i n g compared with the process of other staple commodities.and' c) i t i s not to be expected that a l l the assets i n the forest should y i e l d a rate of i n t e r e s t of the same magnitude as the one which the forest owner has to pay for the most expensive part of his working c a p i t a l . -250-6. For a p e r f e c t l y competitive economy, the optimum discount rate i s given by the i n t e r s e c t i o n of the supply (savings) and demand (investment) schedules. At t h i s point, the marginal productivity of c a p i t a l equals the marginal time rate ( K r u t i l l a and Fisher, 1975). 7. The "price system i n an underdeveloped economy i s often not ' s i g n i f i c a n t 1 , that i s , i s not such as to ensure either a technical or economic optimum, since i t does not r e f l e c t the r e l a t i v e s c a r c i t y of goods and factors; nor a , f o r t i o r i does i t r e f l e c t the scale of p r i o r i t y established 'in a development policy"'(Westoby, ,1962). 8 . Land i n LDCs i s to a large extent valued for psychological, political and r e l i g i o u s reasons rather than for i t s productivity. 9 . Price for the services of land i s termed ' c e i l i n g rent' and i t arises because of the imperfectly e l a s t i c supply of land. This rent has two components. F i r s t there i s 'transfer earning' which represent a payment necessary to keep a resource from s h i f t i n g to another use. Secondly, there i s the payment over that above the amount needed to keep the resource'in i t s present use,('economic rent'). The l a s t part of the rent i s made up of two items too. That part due to s c a r c i t y of land of a given q u a l i t y ('scarcity rent'); and a part due to the heterogeneity of the land ( d i f f e r e n t i a l rent = heterogeneity rent). 10. Absorptive capacity covers a l l the ways in which the a b i l i t y to plan and execute development projects, to change the structure of the economy, and to r e a l l o c a t e resources i s circumscribed by the lack of c r u c i a l factors, by national problems, or by unsuitable organization (Meir, 1976). 11 The 'Bank' consists of projects which the Government (of Uganda) feels i t has s u f f i c i e n t managerial capacity to design, implement and follow-up, and for which rudimentary cost/benefit analyses indicated that such expenditure would be j u s t i f i e d (3rd 5-year Dev. Plan of Uganda). 12. For example Holtham and Hazlewood (1975) reported that B r i t i s h aid to Kenya for general development though often i n t e r e s t free had 4 2 to 75 percent import content. -251-CHAPTER SEVEN 7.00 THE OPTIMUM MANAGEMENT MODEL Using the optimum rotation lengths for the f i v e intensive management models, the physical (number and dimension of trees and volume) and f i n a n c i a l y i e l d s w i l l be assessed i n t h i s section to select the optimum product-oriented management models for softwood plantations. The export potential of softwood products, the investments re-quired for an expanded plantation programme and the i m p l i -cations of such a programme for employment and r u r a l de-velopment w i l l be discussed i n Part 7.20. A discussion on a c r i t e r i o n for choosing potential s i t e s for plantations and the e f f e c t of demand projections and adoption of optimum management models on the size of the national forest estate constitute the l a s t part of t h i s Chapter. 7.10 Volume and f i n a n c i a l y i e l d s Where a p r i c e - s i z e gradient was considered i n determination of optimum rotation length, i t was based on the dbh of the mean stand tree. However, there was no consideration for the d i s t r i b u t i o n of trees around t h i s mean. Stand uniformity i s an important factor i n both harvesting and wood processing. Table 5 3 shows the d i s t r i -bution of trees at rotation age by dbh classes. The data were extracted from Appendix VI . Mean stand dbh ranged from 20.5 cm for Model IA to 34.6 cm for IE. Based on the -252-TABLE 53 D i s t r i b u t i o n of Trees By Diameter Classes At Rotation Age for the Five Intensive Manage-ment Models. DBH CLASS INTENSIVE MANAGEMENT MODELS (cm) IA IB IC ID IE / _ of trees/na 12.5 0 0 0 0 0 17.5 726 132 0 49 0 22.5 449 388 302 49 0 27.5 127 143 128 85 38 32.5 15 51 62 66 158 37 .5 0 6 10 54 67 42.5 0 0 1 15 26 47.5 0 0 0 8 8 52.5 0 0 0 0 0 62.5 0 0 0 0 0 67.5 0 0 0 0 * T o t a l Number at Rotation Age ' 1317 720 503 329 299 Mode dbh (cm) 17.5 22.5 22.5 27.5 32.5 Mean dbh (cm) 20.5 23 . 9 25.6 30 . 6 34 . 6 Source: Appendix VII -25 3-mean and the model stand dbh, IB has the g r e a t e s t degree of stand u n i f o r m i t y while IC and ID had the l e a s t . With a maximum d i f f e r e n c e of 3.1 cm between the mean stand dbh o f the f i v e management models, p r e f e r e n c e s based I.on:production f o r s i z e and' u n i f o r m i t y are minor. F i g u r e 17 shows t h a t except f o r models ID and IE, there was l i t t l e v a r i a t i o n i n t o t a l volume of wood produced. Because o f the d e f i n i t i o n g i v e n to "average s i t e " (meaning t h a t s i t e where a t the age o f 15 y e a r s , the dominant h e i g h t o f a stand i s 20 metres), F i g u r e 18 shows the same dominant height/age r e l a t i o n s h i p f o r a l l models. F i g u r e .19 shows the r e l a t i o n s h i p between volume overbark and stand age, i l l u s t r a t i n g the e f f e c t o f t h i n n i n g ( s ) on s t a n d i n g crop. S i m i l a r r e l a t i o n s are expressed i n F i g u r e 20. which shows v a r i a t i o n of volume produced to 10 cm top diameter w i t h stand age. In these f i g u r e s so f a r , volume p r o d u c t i o n was l e a s t i n ID, f o l l o w e d by IE. However when volume pro-duced to 20 cm top diameter was c o n s i d e r e d , model IC showed l e a s t volume. T h i s r e l a t i o n s h i p i s shown i n F i g u r e 21. - 2 5 4 -Source: Appendix Management Model ~ Z o • fl.O 1?.H 1(5.0 « K 0 ~?4X.' 2?.<> 3 2 . 0 rrs.o FIGURE 18 Dominant Heioht and Stand Age Relationships for the Intensive Management Models Source: Appendix IV - 2 5 6 -O i n -<rJ. ex ro 3 > Manaaement Model e IA FIGURE 19 R e l a t i o n s h i p Between T o t a l Stand Volume (Overbark) and Stand Age Source: Appendix IV - 2 5 7 -Management Model FIGURE 2Q R e l a t i o n s h i p s Between Stand Volume (to 10" cm top diameter) and Stand Age. Source : Appendix ".IV - 2 5 8 -Source: Appendix IV -259-Table 54 shows volume y i e l d s by product classes at optimum rotation age for the f i v e management models. For pulpwood production, ranking based on size - of product produced per year i s IA>IC>IB>IE>ID. When veneer and saw log production i s considered, the ranking changes to IE>ID>IC>IB>IA. This agrees with the rationale given for determination of optimum rotation length. However, based on the above rankings, i f i t i s required to produce wood for an integrated forest industry, models IC, IB and IE are most suited. If the c r i t i c a l resource constraint of the integrated industry i s pulpwood, then model IC should be adopted. On the other hand, i f the major bottleneck i s veneer and saw log production, IE i s suited best. However, the above rankings are based on the annual harvests once a normal plantation forest has been formed. These models have varying rotation lengths and therefore, t o t a l forest area required for production of pulpwood and/or veneer and saw log production w i l l ultimately de-pend on the capacity of the forest industry i n question. Table 55 shows four cases, involving d i f f e r e n t capacities -of pulpmill, veneer m i l l and sawmill. Based on annual cutover area on a medium s i t e required to support a 100,000 MT annual capacity pulpmill, 1006 ha are needed i n case of model IA and 2022 ha for model ID. On the other hand a 3 20,000 M (roundwood equivalent) annual capacity sawmill w i l l require annual cutover areas of 51 and 211 ha of TABLE 54 Harvestable volumes at Rotation Age IA (17 years) Pulpwood + V- + Sawloas IB (19 years) Pulpwood + V- + Sawlogs IC (22 years) Pulpwood + V- tSawloqs ID (27 years) Pulpwood + V - + Sawloas IE (29 years) Pulpwood + V- + Sawlogs i- - 3 Underbark \ ewxuuit: ——— 11.1 0.3 Thinning 43.9 3.0 65.5 11.0 122.0 75.9 72.0 65.8 Tot a l Thinning 8.1 0.2 100.8 6.3 165.9 78.9 73.4 124.3 148.6 77.1' C l e a r f e l l 290.1 94.7 180.5 137.2 129.1 151.4 75.0 223.8 52.2 312.8 Thinnings + C l e a r f e l l ^ B . 2 94.9 281.3 143.5 295 230.3 148.4 248.1 200.8 389.9 Annual c u t i n a normal f o r e s t 393.1 424.8 525.3 496.5 5£ 0.7 Pulpwood + = a l l logs with small end diameter (s.e.d.) < 20 cm. V- + Sawlogs = a l l logs (s.e.d.) > 20 cm. N.B. The year r e f e r r e d to above correspond to the optimum r o t a t i o n length. Source: derived from the VYTL simulation model of Adlard and Alder (1975). Economies TABLE 5 5 i n Land U t i l i z a t i o n Based on Volume P r o d u c t i o n MANAGEMENT MODEL ANNUAL CUTOVER AREA AND TOTAL SIZE OF NORMAL FOREST Case I Case I I Case I I I Case IV A n n u a l T o t a l A n n u a l T o t a l A n n u a l T o t a l A n n a u l T o t a l Model IA 1006 17102* 211 3587 1217 20689* 2084 35428 Model IB 1066 20254 139 2641 1205 22895 1578 29982 M o d e l IC 1017 22374 87 1914 1107 24354 1159 25498* Model ID 2022 54594 57 1539 2079 56133 1442 38934 M o d e l I E 1494 43326 . 51 1479 1545 44805 1132 32828 T o t a l - t o t a l a r e a f o r a n o r m a l f o r e s t p l a n t a t i o n o f a l l age s e r i e s t o r o t a t i o n l e n g t h f o r an a v e r a g e s i t e . 3 Case I - 100,000 m e t r i c t o n (MT) a n n u a l c a p a c i t y p u l p m i l l ( a t 3 m o f roundwood p e r MT p u l p ) Case I I - 20,000 m 3 (roundwood) - v e n e e r - a n d s a w l o g . Case I I I - Case I + Case I I ( g r e a t e r emphasis on p u l p m i l l ) . Case IV - 50,000 MT p u l p m i l l c a p a c i t y + 150,000 m 3 veneer and saw l o g s . * - most e f f i c i e n t w i t h r e s p e c t t o l a n d i n p u t . S o u r c e : b a s e d on volume y i e l d i n T a b l e 5 4. -262-forests under models IE and IA, respectively. Therefore, i f land i s a scarce resource, there are great savings of area associated with land u t i l i z a t i o n when the appropriate model i s used. These relationships are e s s e n t i a l l y a r e f l e c t i o n of pro-duct-oriented volume production of Table 54. Based on the annual cutover area and correcting for ro-tation length, t o t a l area required f o r normal fo r e s t i s as shown i n Table 55. Rankings of the models based upon t o t a l area required to support forest industries under the four as-sumptions are' shown i n Table 56. Assuming there i s s c a r c i t y of land suitable for a f f o r e s t a t i o n , the optimum management model to be used i n t h i s case would be one that uses l e a s t land for a given quantity of roundwood production. Such an optimum and at the same time most f l e x i b l e management model, the one that has the l e a s t t o t a l of the four rankings i s chosen. This way, a model f a i r l y suited to production of pulp-wood, veneer and saw logs i s chosen. Models IB and IC are the most optimum and ID the least. These rankings assume that a great premium exists for size i n veneer and saw log production which prevents a l l logs above 20 cm small end diameter from being pulped. Secondly, the rankings also assume a marginal log size of 20 cm (s.e.d.) for sawnwood and veneer production. F i n a l l y , for a given product, use of any other model but the optimum, incurs at the minimum, an/ opportunity cost from the extra land required. For example, i f the opportunity cost of land were U. shs 2.0 0 per hectare, and model IE was used for production of pulpwood (Case I) instead of model IA, an opportunity cost of 12448.00 i s incurred. Likewise, -263-TABLE 56: Ranking of A l t e r n a t i v e s IM'Model Case I Case I I Case I I I Case IV Sum" IA 1 5 1 4 11 IB 2 4 2 2 10 -IC 3 3 3 1 10 ID 5 2 5 5 17 IE 4 1 4 .3 12 * - Rankings are based on a s c a l e of 1 to 5, wi t h 1 r e p r e s e n t i n g the management model r e q u i r i n g the l e a s t l a n d area and 5 the most. Source: Table 55 -264-selecting Model IA for veneer and saw log produciton (Case II) instead of the current management practice (Model IE), an opportunity cost of U.shs 4216 i s incurred. In conclusion, i t i s esse n t i a l to select the optimum product-oriented management model. The current management (IE) model i s the best suited for veneer and saw log pro-duction, while Model IA i s the one for pulpwood. For equal quantities of pulpwood and veneer and saw log required by an integrated forest industry, Model IC should be favoured. Production of the r i g h t dimensions and qu a l i t y of round-wood for a given product i s e s s e n t i a l . But equally important are the economic factors governing t h i s production and i t s subsequent u t i l i z a t i o n . In th i s thesis, economic considera-tions w i l l be emphasized with respect to production and foreign exchange earning. The f i n a n c i a l consequences of producing a given round-wood qua l i t y may be expressed by the net earnings (appropriate-l y discounted) and/or in t e r n a l rate of return. The f i r s t as-sumption i s that wood produced under management models IA, IB and IC w i l l fetch royalty at a constant rate of U.shs 17.50 per 3 M , and that of ID and IE have a p r i c e - s i z e responsive royalty rate. This assumption i s the same as the ones used i n deter-mination of optimum rotation length. The annual cost and re-turn data are shown i n Table 57, and the present net worth values at various discount rates and the in t e r n a l rate of re-turn are shown i n Table 58. Based on a 6 percent discount rate, present net worth values i n U.shs/ha were 2075 for IA, TABLE 57 A Summary o f C o s t and R e t u r n Data . f o r I n t e n s i v e Management Models I A , IB , I C ,ID and I E (Assuming: .. C o n s t a n t ( I A , I B and IC) and a S i z e - R e s p o n s i v e (ID and IE) Revenue F u n c t i o n s MODEL I A MODEL IB MODEL IC MODEL ID MODEL IE P e r i o d A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l (Year s ) C o s t R e t u r n C o s t R e t u r n C o s t R e t u r n C o s t R e u t r n C o s t R e t u r n i -TT c V i c / V m 0 707 0 707 0 638 0 482 0 563 0 1 175 0 175 0 175 0 175 0 175 0 2 175 0 175 0 175 0 175 0 175 0 3 100 0 150 0 150 0 150 0 150 0 4 100 0 100 0 125 0 125 0 100 0 5 100 0 100 0 110 0 110 0 100 0 6 188 0 188 0 188 0 188 0 188 20 7 100 0 100 0 100 0 100 0 100 0 8 100 0 100 0 188 0 188 0 188 0 9 100 . 0 100 0 100 0 100 0 100 0 10 100 180 100 0 100 0 100 0 100 0 i to 11 100 0 200 0 200 0 200 0 100 0 (71 12 100 0 100 2331 100 1036 100 0 100 0 1 13 100 0 100 0 100' 0 100 0 100 0 14 100 0 100 0 100 0 225 0 100 0 15 100 0 100 0 100 0 100 0 100 704 16 100 0 100 0 100 0 100 0 100 0 17 100 8622 100 0 100 0 100 0 100 0 18 0 0 100 0 100 0 100 0 100 0 19 0 0 100 7030 100 0 100 0 100 0 20 0 0 0 0 100 4100 100 2638 100 0 21 0 0 0 0 100 0 100 0 100 0 22 0 0 0 0 100 6095 100 0 100 3367 23 0 0 0 • 0 0 0 100 0 100 0 24 0 0 0 0 0 0 100 0 100 0 25 0 0 0 0 . 0 0 100 0 100 0 26 0 0 0 0 0 0 100 0 100 0 27 0 0 0 0 0 0 100 13967 100 0 28 0 0 0 0 0 0 0 0 100 0 29 0 0 0 0 0 0 0 0 100 20400 S o u r c e : F i g u r e 14 and App e n d i x V f o r t h e revenu e s and T a b l e 49 f o r c o s t s . -266-TABLE 58 Present Net Worth and Internal Rate of Return for  Models IA, IB, IC, ID and IE Assuming - Constant  (IA, IB and IC) and Size-Responsive (ID, and IE) Revenue Functions. Management Models Discount Rates (%) Present Net Worth (U. Shs/ha) Model IA Model IB Model IC Model ID Model IE 2.00 13158 4 .00 4766 6.00 2075 8 .00 807 10.00 105 *10.44 1 2.00 12346 4 .00 4510 6.00 1983 8 .00 784 10.00 113 *10.44 1 2.00 12728 4.00 4363 6 .00 1715 8.00 494 *9. 37 1 2.00 20843 4.00 7225 6.00 3008 8.00 1126 10.00 159 *10.50 1 2.00 24809 4.00 8366 6.00 3374 8.00 1206 10.00 126 *10.37 1 return calculated using the bise c t i o n method (computer program developed by Chappelle, 1969) Source: Table 57. -267-1983 for IB, 1715 for IC, 3008 for ID and 3374 for IE. The i n t e r n a l rates of return r e a l i z a b l e were 10.4 4 percent each for models IA and IB, and 9.37 for IC, 10.50 for ID and 10.37 for IE. A second assumption i s based on technical s u i t a b i l i t y of logs for pulpwood and veneer and saw log production. In t h i s case i t i s hoped that a l l roundwood produced can be e a s i l y channelled into the appropriate use. A royalty rate of U. shs 17.50 per 3 M was charged for a l l roundwood designated pulpwood. An average rate of U.shs 35.00 was charged for veneer and saw logs. Once again using a 6 percent discount rate, PNW values i n U.shs./ha were 1917 for IA, 2181 for IB, 2447 for IC, 1764 for ID and 2091 for IE. The corresponding i n t e r n a l rates of return were 10.12, 10.62, 10.31, 9.12 and 9.6 2 percent. These are shown in Tables 59 and 60. One of the main emphases of t h i s thesis was the need for e f f i c i e n c y i n forest plantation management. A major c r i t e r i o n of e f f i c i e n c y i s the i d e n t i f i c a t i o n of the cheapest possible method of producing timber. TABLE 59 A Summary o f C o s t and Return... D a t a f o r I n t e n s i v e Management Mo d e l s I A , I B , I C , ID and I E (Assuming a P r i c e p e r M^ o f U. s h s . 17.50 f o r Pulpwood and U. s h s . 35.00 f o r V e n e e r and  Saw Logs) . MODEL I A MODEL I B MODEL IC MODEL ID MODEL I E P e r i o d A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l A n n u a l ( Y e a r s ) C o s t R e t u r n C o s t R e t u r n C o s t R e t u r n C o s t R e t u r n C o s t R e t u r n ( U. shs/ha ) 0 1 2 3 4 5 6 7 o 1UU u 1UU u 1 8 » u u ^ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2 7 28 29 707 0 707 0 638 0 482 0 563 0 175 0 175 0 175 0 175 0 175 0 175 0 175 0 175 0 175 0 175 0 100 0 150 0 150 0 150 0 150 . 0 100 0 100 0 125 0 125 0 100 0 100 0 100 0 110 0 110 0 100 0 188 0 188 0 188 0 188 0 188 0 100 0 100 0 100 0 100 0 ' 100 0 00 0 00 0 188 0 188 0 188 205 100 0 100 0 100 0 100 0 100 0 100 149 ioo 0 100 0 100 0 100 0 100 0 200 0 200 0 200 0 100 0 100 0 100 1985 100 873 100 0 100 0 100 0 100 0 100 0 100 0 100 0 100 0 100 0 100 0 225 0 100 0 100 0 100 0 100 0 100 0 100 1531 100 0 100 0 100 0 100 0 100 0 100 8392 100 0 100 0 100 0 100 0 0 0 100 0 100 0 100 0 100 0 0 0 100 7961 100 0 100 0 100 0 0 0 0 0 100 4792 100 5636 100 0 0 0 0 0 100 0 100 ' 0 100 0 0 0 0 0 100 7558 100 0 100 3563 0 0 0 0 0 0 100 0 100 0 0 0 0 0 0 0 100 0 100 0 0 0 0 0 0 . 0 100 0 100 0 0 0 0 0 0 0 100 0 100 0 0 0 0 0 0 0 100 9146 100 0 0 0 0 0 0 0 0 0 100 0 0 0 0 0 0 0 0 0 100 11862 03 Source: F i g u r e 14 and T a b l e 54 f o r revenu e s and T a b l e 4 9 f o r c o s t s . -2:69-TABLE 60 Present Net Worth and Internal Rate of Return for Models IA, IB, IC, ID and IE Assuming a Price per M3 of U.shs 17.50 for Pulpwood and UVshs 35.00 for Veneer and Saw Logs. Management Models Discount Rates Present Net Worth (%) (U.shs/ha) Model IA 2.00 12526 4.00 4491 6.00 1917 8.00 705 10.00 35 *10.12 1 Model IB 2.00 13466 4.00 4926 6.00 2181 8.00 883 10.00 162 *10.62 1 Model IC 2.00 16236 4.00 5762 6.00 2447 8.00 919 10.00 98 *10.31 1 Model ID 2.00 14204 4.00 4715 6.00 1764 8 .00 443 *9.12 1 Model IE 2.00 16082 4.00 5387 6.00 ' 2091 8.00 629 *9.62 1 Approximate i n t e r n a l rates of return calculated using the bisection method (computer program developed by Chappelle, 1969) Source: Table 59. -270-Therefore, an e f f i c i e n c y index measured i n terms of U.shs required to produce one cubic metre of roundwood was worked out and the results shown i n Table 61. Considering the i n i t i a l c a p i t a l outlay only (costs up to the time of planting), model IE was the most e f f i c i e n t , followed by ID. When a l l costs were compounded at 6% i n t e r e s t rate up to rotation age and summed up, the most e f f i c i e n t model again was IE. However, i n th i s case, model IC was the second most e f f i c i e n t , followed by ID. In conclusion, therefore, when product s p e c i f i c a t i o n s are ignored, the current plantation management practice (IE) i s the most e f f i c i e n t . However, i t has been shown e a r l i e r that when rotation length was the e f f i c i e n c y c r i t e r i o n , model IA was the most e f f i c i e n t . I f consideration i s for the shortest time i t takes to grow trees with a mean stand diameter of 20 cm, model ID achieves i t much e a r l i e r . F i n a l l y , where s p e c i f i c products are concerned, model IA i s the most suited for pulpwood production, IE for veneer and saw logs and IC for an integrated forest industry. TABLE 61. Cost of Producing a Cubic Metre of Roundwood at Rotation Age. C O S T (U.Shs/ha) EFFICIENCY (U.Shs/M3 of INDEX roundwood prod aced IM Models Rotation (Years) I n i t i a l Only /a Outlay Cumulative Cost at Rotation Age @ 6% i n t . r a t e /b Volume at Rotation /c (MVha) I n i t i a l Outlay Only Cumulativ Tot. Cost o IA 17 707 1954 393.1 1.78 4.97 IB 19 707 2117 424.8 1. 67 4.98 IC 22 638 2219 525.3 1.22 4.22 ID 27 482 2235 496 .5 0.97 - 4.50 1 NJ ~ J IE 29 563 2219 590.7 0.95 3 .76 I Source: /a -/b -Table 59 Table 49 -2 72-7.20 Socio-Economic C o n s i d e r a t i o n s I t has been emphasized i n P a r t I of the t h e s i s t h a t the main problems a f f e c t i n g the r a t e and p a t t e r n of economic develop-ment i n Uganda are inadequacy of c a p i t a l r e s o u r c e s f o r investment and l a c k of employment o p p o r t u n i t i e s f o r the s u r p l u s labour i n the r u r a l and i n f o r m a l urban s e c t o r s . An a c c e l e r a t e d ( p r a c t i c a l maximum) r a t e of investment, e s p e c i a l l y w i t h g r e a t e r emphasis towards r u r a l development and labour a b s o r p t i o n , i s regarded as"a p r e r e q u i s i t e . As.. an LDC, most of the c a p i t a l requirements f o r Uganda's economic development are imported. To be able to import, the country needs adequate f o r e i g n exchange. Under the heading socio-economic c o n s i d e r a t i o n s , three main items w i l l be c o n s i d e r e d : f o r e i g n exchange earning c a p a c i t y of softwood p l a n t a t i o n s ; investment requirements f o r an expanded a f f o r e s t a t i o n programme; and employment and r u r a l development. 7.21 F o r e i g n Exchange E a r n i n g A b i l i t y The e v a l u a t i o n of f o r e i g n exchange e a r n i n g c a p a c i t y of Uganda i s essential because i t i s scarce and, therefore.;a constraint to economic : development. F o r e i g n exchange s c a r c i t y s i g n i f i e s t h a t the demand f o r f o r e i g n goods and s e r v i c e s i s g r e a t e r than the supply of f o r e i g n currency needed t o pay f o r them; g r e a t e r , t h a t i s , than the e a r n i n g s from exports of goods and s e r v i c e s p l u s any net f o r e i g n loans or g i f t s a v a i l a b l e ( L i t t l e and M i r r l e e s , 197 4). The examination o f f o r e i g n exchange earning p o t e n t i a l by the f o r e s t p l a n t a t i o n s e c t o r i n Uganda, i s i n essence, d e t e r m i n a t i o n o f i t s export p o t e n t i a l . In r e p o r t s by Lockwood C o n s u l t a n t s L t d . (1973), U n i t e d Nations Economic Commission f o r A f r i c a (1970) and Uganda's 3rd 5-year Development P l a n (1972), the need to e n l a r g e and d i v e r s i f y the -273-range of export commodities and number of countries served, has been adequately amplified. World trade i n forest products increased by nearly f i v e f o l d between 1962 and 1974 (Stone and Dickerhoof, 1977) . As to whether Uganda's softwood products or for that matter any country's products can be exported w i l l depend on the price l e v e l f o r economic production i n the exporting country, price in the importing country, transportation costs to markets, and t a r i f f s or other trade r e s t r i c t i o n s (Manning, 1977b). A l l these factors combined, determine to a large degree a country's comparative advantage. I t usually i s t h i s advantage that i s the dr i v i n g force i n world trade and arises from manufacturing economies of scale conditioned by t a r i f f s , quotas and transportation costs, and the fact that a region may be the only source of a given raw material resource (Holland, 1977) . Foreign exchange earnings by the forestry sector may be implemented i n a number of ways. F i r s t l y , savings i n foreign exchange may be achieved through import-substitution. Since Uganda's net imports i n sawnwood are exclusively softwoods, afforestation with pines and cypress should enable l o c a l pro-cessing of these woods and thereby release foreign exchange for importation of other consumer and c a p i t a l goods. Secondly, increased a f f o r e s t a t i o n at low cost increases the quantity of wood that can be marketed at competitive prices having s a t i s f i e d domestic demand. This i s the case of export expansion. The t r a d i t i o n a l wood products exports of Uganda have been t r o p i c a l hardwood sawnwood and plywood. If softwood products can be exported, i t will signify diversification of export commodities. -274-Thirdly, foreign exchange may be earned through product-substitution. Wood products consumers i n Uganda have used products from t r o p i c a l hardwood species for a long time and have therefore acquired f a m i l i a r i t y with these species. Consumer taste at time of abundance has not changed, and i t i s not unusual to see mahogany sawnwood used for roof trusses. Consequently, wood species that could otherwise fetch premium values on the international market are sold at low prices on the domestic market. Softwood sawnwood, well treated with preservatives, could be substituted for these uses and the higher valued hardwood products exported. F i n a l l y , foreign exchange may be earned through export of any roundwood (logs) which cannot be used or processed more e f f e c t i v e l y i n Uganda. The above four alternative ways of generating foreign exchange from softwood plantations are at best p o t e n t i a l . So, what i s the r e a l i t y ? To answer t h i s question, the economic value (shadow price) of standing wood for various products should be worked out. This has been car r i e d out below for softwood saw log production. There are no manu-facturing f a c i l i t i e s for either softwood plywood or pulp. Foreign exchange earnings from pulp and plywood production may be through import-substitution. However, the strategy of import-substitution should not be followed too zealously and become a goal of s e l f - s u f f i c i e n c y . The strategy should be based on economic rationale, and evidence that i t w i l l -275-not adversely a f f e c t both export competitiveness and consumer welfare through increasing the domestic price l e v e l . According to Lockwood Consultants Ltd. (1973), Uganda faces three inherent d i f f i c u l t i e s i n increasing exports of wood products: 1) may parts of the world can grow trees and, therefore^an intensive competition e x i s t s ; 2) most countries look at th e i r forest based i n -dustries i n a pre-emptive way and thus pursue p o l i c i e s of s e l f - s u f f i c i e n c y ; and 3) wood i s an expensive product to transport and proximity of suppliers to pot e n t i a l markets i s of c r u c i a l s i g n i f i c a n c e . Because Uganda i s a landlocked country with over 1000 km to the coast, log export may not be f e a s i b l e . On the other hand, veneer and saw logs, and pulpwood, could be sold to neighbouring countries i f t h e i r manufacturing f a c i l i t i e s e x i s t with capacity i n excess of domestic roundwood supply. Unfortunately, Kenya and Tanzania, l i k e Uganda, inherited the B r i t i s h Empire forest p o l i c y of s e l f - s u f f i c i e n c y . They are continually matching domestic supply to roundwood de-mand. If anything, t h e i r problem i s often lack, rather than excess of wood processing capacity (IDB, 1975) . Un-less as Stone and Dickerhoof (1977) stated for the United States, international shipping times and costs become smaller, and world demand for wood and wood products i n -creases dramatically, softwood log export from Uganda i s not f e a s i b l e . -276-Uganda produces and i s a net importer of softwood sawnwood. Table 6 2 shows the economic value of l o c a l l y grown timber (saw log production) and a comparison of exports of softwood and hardwood sawnwood. "Domestic Sales" i l l u s t r a t e s the f e a s i b i l i t y of import-substitution for softwood sawnwood. Using the d i r e c t costs and o f f i c i a l exchange rate (alternative A), i t i s cheaper to import softwood sawnwood than to rel y on domestic pro-duction. The negative economic value s i g n i f i e s resources are being misallocated i n achieving a p o l i c y of s e l f -s u f f i c i e n c y . On the other hand with r e s t r i c t i o n s of im-ports (protection of l o c a l industry), the welfare of con-sumers has been adversely affected through a higher p r i c e . I t i s no wonder that i n the Third Five Year Development Plan, i t was recognized that, "the general l e v e l of e f f e c t i v e protection afforded to domestic manufacturing production i s high, and Uganda has become a r e l a t i v e l y high cost producer of a variety of goods". However, i t i s also true that the o f f i c i a l exchange rate often over-values a currency and does not indicate the true cost of foreign exchange (Dasgupta et a l . , (1972) . Therefore, a foreign exchange factor was determined for sawnwood (2.82) and used to calculate i t s true import cost (alternative B). Under th i s assumption, the economic value of standing timber was estimated at U.shs 72 7 per 3 m , and j u s t i f i e d import-substitution. Considering "Export Sales" based on domestic prices, the economic value -277-TABLE 6 2 Economic Values of Locally Grown Timber (Sawlog Production Schedule for Softwood and Tropical Hardwood) ^ Domestic Sales Softwood ( Hardwood (5 -U.shs/m~ Sawnwood price 2nd grade/ex. N. America (f.o.b.) 490 Sea f r e i g h t to Mombasa 210 Port handling and r a i l transport to Kampala 150 For Kampala (direct) (A) 850 True cost of imports ( 2) (B) 2397 Ex m i l l Uganda "(3) 1605 Less stumpage element 35 1570 Handling and truck transport to Kampala 100 For Kampala 1670 Difference (economic value of l o c a l l y grown standing timber) (A) -820 (B) +727 II. Export Sales F.0.B.(F.O.R.) Kampala price, 1st grade unadjusted(3) (A) Adjusted for true cost of foreign exchange(4) (B) Less logging and m i l l i n g costs Less trucking and handling 2462 490 500 100 2 0 0 0 5 0 0 1 0 0 (6) Difference (economic value of standing wood) (A) (B) 1862 -110 1400 continued. - 2 7 8 -TABLE 62 - cont'd E x p l a n a t i o n s : 1. Based on s i m i l a r estimates f o r a f f o r e s t a t i o n scheme i n Kenya (World Bank, 197 4). 2. Dasgupta et a l . (197 2) suggested t h a t the shadow p r i c e f a c t o r of f o r e i g n exchange (P F) f o r a s i n g l e commodity i s giv e n by the r a t i o of domestic c l e a r i n g p r i c e (Pr_>) over i t s import p r i c e (Pj) c a l c u l a t e d a t the o f f i c i a l c u r r e n c y exchange r a t e . That i s , p P F = =2- ( p F used = 1605/(70x8.142) = 2.82) I 3. Wood I n d u s t r i e s C o r p o r a t i o n p r i c e l i s t 1st June, 1976. F 4. In t h i s adjustment, the P f a c t o r i s not used because to be able to export, the maximum p r i c e chargeable should be equal to t h a t of the world p r i c e . 5. Prime grade f u r n i t u r e timber (mahogany, i r o k o and elgon o l i v e ) . 6. D e l i v e r e d p r i c e of i r o k o i n N a i r o b i i n 1974/75 was K.shs 2516.03 per c u b i c metre (1 K.shs = 1 U.shs a t o f f i c i a l exchange r a t e ) . of standing wood i s U.shs 1862 per m (alternative A). But the domestic price i s higher than the international market one and i s therefore unrealizable. When the i n -ternational price i s used under alt e r n a t i v e B, i t be-comes uneconomic to export softwood lumber, because a 3 loss of U.shs 110 per m i s incurred. These are rough estimates but the data indicate that at best, exports of sawn softwood may be only marginal. Import-substitution, on the other hand, i s j u s t i f i a b l e i f the domestic cost of foreign exchange i s taken into account. I t can be seen from Table 62 that an economic ad-vantage would be achieved i f prime grade furniture timber were exported and softwood sawnwood used domestically. The 3 economic value of exporting 1 m of prime grade furniture timber i s U.shs 1400. Therefore, foreign exchange earn-ings through import - and product - substitution are the most feasible alternatives for plantation forestry. Product-substitution i s of special i n t e r e s t because within East A f r i c a , Uganda possesses a comparative advantage since i t has the only major source of mahoganies and iroko. Furthermore, these species have been exported for a long time to B r i t a i n and earned an assured market i n Europe. F i n a l l y , the country i s a small exporter by world standards and w i l l therefore remain a price-taker. -280-V.22 Financial Requirement for Afforestation Programmes U n t i l now, t h i s thesis has been concerned with what plantation forestry can contribute to the economic de-velopment of Uganda. The l a s t section dealt with i t s potential to earn foreign exchange. In addition, forest a c t i v i t i e s i f started, could contribute to the d i v e r s i -f i c a t i o n of r u r a l a c t i v i t i e s . The role of plantation forestry i n providing fuelwood and building poles has bee discussed. The appropriate management models to use were developed by Kingston (1972) . There e x i s t at present plantations of eucalypts and softwoods but more plantations should be established. A pertinent question i s , how much more and what are the i n -vestment (financial) implications. I t has been discussed e a r l i e r that b a s i c a l l y there are two main money markets, the organized and the unorganized. Whereas the un-organized money market i s suitable for funding woodlot farms, i n d u s t r i a l plantations should be financed i n the organized money market. I t has been shown that i n developing countries with abundant forests, the cheapest and most p r a c t i c a l supplie of energy are often provided by fuelwood and charcoal (Earl, 1975). LDCs need not have abundant forests to en-courage u t i l i z a t i o n of fuelwood and charcoal. The escala ting costs of f o s s i l energy sources make wood energy ad-vantageous, and i t has high s o c i a l benefits. Associated -281-with d i r e c t benefits ( p r o f i t a b i l i t y ) , there e x i s t i n -d i r e c t benefits (employment and savings i n foreign ex-change) and dynamic or induced benefits such as the encouragement of s e l f - r e l i a n c e and creation of vigorous r u r a l environment. The increasing s c a r c i t y of fuelwood, charcoal and building poles from the t r a d i t i o n a l (forest and savanna woodland) sources presupposes that the pro-cess of bureaucracy and national budgeting ignores the urgency of the problem. The Uganda Forest Department's view i s that, i f and when needed, eucalypt plantations w i l l be established to supply the above mentioned pro-ducts. That forest extension services w i l l be kept available for those farmers who want to es t a b l i s h woodlot farms, perhaps i s too optimistic a view to hold. There i s no guarantee for a sustained funding nor the a v a i l a b i -l i t y of extension personnel. What i s required i s a fund set aside for the express purpose of estab l i s h i n g woodlot farms. This fund may be given to farmers at zero or subsidized i n t e r e s t rates i n the form of credits s i m i l a r to the a g r i c u l t u r a l c r e d i t schemes. A l t e r n a t i v e l y , rather than finance the whole plantation management costs, the Forest Department may raise eucalypt seedlings i n suitably located nurseries and issue these to " w i l l i n g " farmers, perhaps encouraged by some additional planting grants. Unfortunately, the volume of wood removed for f u e l -wood, charcoal, poles and posts i s not accurately known. -282-Based on projections of future consumption i n Chapter Four, the f i n a n c i a l implications of subsidies to woodlot farmers has been estimated and i s shown i n Table 63. The assumptions used were: (1) wood requirements for the above products i n year 2000 under the three (A,B, and C) economic growth rates; (2) since the proportion of wood for these products to be produced from plantations i s un-known, f i v e cases (I,II,111,IV, and V) of 100, 70, 50, 30 and 10 percent i n that order were assumed; (3) a 6 year 3 3 rotatxon length producing 200 m s o l i d wood per m ; (4) a t o t a l of U.shs 1000 per ha for establishment and management of plantations under the d i r e c t c r e d i t scheme; (5) a sum of U.shs 300 per ha for production and d i s t r i -bution of seedlings; and (6) 10 percent allowance on the t o t a l cost of d i r e c t and seedling c r e d i t for administra-tion costs. The results show that i f by the year 2000 a l l fuelwood, charcoal, poles and posts have to come from 3 plantations ( I ) , between 27 and 50 m i l l i o n m of roundwood equivalent would have to be produced annually. These i n turn w i l l require 820 thousand and 1.5 m i l l i o n hectares, respectively. However, i f plantations are to produce only 10 percent of the t o t a l roundwood required (V) 2.7 or 5.0 3 m i l l i o n m should be produced, involving 82 or 149 thousand hectares for the lower and upper estimates, respectively. The roundwood volumes to be produced and the areas i n -volved under the various projection alternatives when 70, -283-50 and 3 0 percent proportions are considered, l i e be-tween these extremes. A l l t h i s i s shown i n Table 63(a) and (b). Assuming a normal eucalypt forest managed on a 6 year rotation, f i n a n c i a l requirements for the two c r e d i t schemes are calculated as shown below TC = (1.0 + p) (V/N . L . C) where TC = t o t a l cost V = projected roundwood consumption i n year 2000 (M3 s o l i d value) N = y i e l d at rotation length L = rotation length (years) C = cost of seedling production or plantation management/ha p = percent allowance for administrative costs. The r e s u l t s i n Table 63(c) show that under d i r e c t c r e d i t scheme, a maximum investment of U.shs 1641 m i l l i o n for projection a l t e r n t a t i v e C under assumption I, and a minimum of U.shs 90 m i l l i o n (alternative A and assumption V) w i l l be required. Likewise, c r e d i t schemes involving issue of seedlings w i l l require maximum and minimum i n -vestment funds of U.shs 493 and 28 m i l l i o n , respectively (Table 63(d)) . The above r e s u l t s show that massive f i n a n c i a l i n -vestment w i l l be required to a l l e v i a t e s c a r c i t y of f u e l -wood, charcoal poles and posts. These estimates cover a f a i r l y wide range so that even the case of increasing costs of establishment with scale of operation should Volume, Area and -284-TABLE 6;3 Fi n a n c i a l Requirements Schemes i n Uganda. for Farm Woodlot,' Credit PROJECTION ALTERNATIVES A S S U M P T I O N S I II III IV V (a) Roundwood requirement by the year 2000 for fuelwood, charcoal, poles and posts. ( IQOO m3  Low (A) 27339 19137 13670 8201 2734 Medium (B) 41816 29271 20908 12545 4182 High (C) 49744 34821 24872 14923 4974 (b) Total normal forest area requirements by the year 2000 ( IQOO ha ) Low (A) 8 2 0 5 7 4 410 246 82 Medium (B) 1254 878 627 376 125 High (C) 1492 1045 746 448 149 (c) Estimates of f i n a n c i a l commitment required under d i r e c t c r e d i t scheme. ( m i l l i o n U.shs ) Low (A) 902 631 451 271 90 Medium (B) 1379 966 690 414 138 High (C) 1641 1150 821 493 164 (d) Estimates of f i n a n c i a l commitments required under seedling c r e d i t scheme ( m i l l i o n U.shs ) Low (A) 271 189 135 81 28 Medium (B) 414 289 207 124 42 High (C) 493 345 246 147 50 As explained in the preceding text (page 274) -285-f a l l within i t - The Government may decide to r a i s e these funds from domestic resources and/or seek foreign f i n a n c i a l assistance. Furthermore, i f d i r e c t c r e d i t i s preferred, a special i n s t i t u t i o n might be established to administer i t . F i n a l l y , i t i s better to plant more than le s s , since any surplus roundwood may f i n d a market with forest industry, or stimulate forest i n d u s t r i a l development. Well planned, such c r e d i t schemes may t r u l y invigorate r u r a l a c t i v i t y . A second investment analysis concerns what has been referred to as i n d u s t r i a l (commercial) plantation forestry. This involves the production of pulpwood, veneer and saw logs from softwood plantations. As i t s name implies, sources of funding for t h i s aspect of plantation forestry should be sought i n the organized money market, borrowing at f u l l commercial rate. E a r l i e r i t was shown that model IA was best suited for production of pulpwood, IE for veneer and saw log pro-duction, and IC for an integrated forest industry re-quiring both pulpwood and veneer and saw logs. These models w i l l be considered in t h i s section of the analy-s i s , and discussions pertaining to investment c r i t e r i a , ownership and money markets carried out i n Chapter Six are assumed applicable here. Therefore, the task i s to compute aggregate f i n a n c i a l requirements for expansion of softwood plantation forestry. I t i s worth not ing that these estimates w i l l be the absolute minimum sa t i s f y i n g domestic consumption requirements. This i s -286-not an economic "cop-out" s i n c e i t has been shown t h a t l o c a l l y grown softwood i s indeed a very economic pro-p o s i t i o n c o n t r i b u t i n g to f o r e i g n exchange earnings through import - and product - s u b s t i t u t i o n . Table 64 shows the volume, area and f i n a n c i a l r e -quirements f o r veneer and saw l o g p r o d u c t i o n . Methodo-logy of a r r i v i n g : a t the area and f i n a n c i a l requirements e q u i v a l e n t s are e x p l a i n e d i n f o o t n o t e s to Table 64. I f f o r e s t i n d u s t r y i s not i n t e g r a t e d , maximum area r e -q u i r e d f o r veneer and saw l o g p r o d u c t i o n i s 215,000 ha. ("WITHOUT CU + PRODUCT - SUBSTITUTION" and a l t e r n a t i v e C ) . The maximum area f o r pulpwood i s 51,000 ha, wh i l e t h a t of an i n t e g r a t e d pulpwood/veneer and saw l o g regime i s 278,000 ha. The maximum f i n a n c i a l commitments i n m i l l i o n U.shs w i l l be 145 f o r veneer and saw l o g s , 43 f o r pulpwood and 213 f o r i n t e g r a t e d . I t i s worth n o t i n g t h a t when maximum area and investment f i n a n c e v a l u e s f o r veneer and saw l o g s and pulpwood were combined the t o t a l s were l e s s than the i n t e g r a t e d p r o d u c t i o n schedule. 3 T h i s i s becasue i t takes more area to produce 1 m of veneer and saw log s u s i n g model IC than IE. F i n a l l y , whatever the source o f funding or ownership of the p l a n t a t i o n s , based on the i n t e r n a l r a t e of r e t u r n c a l c u -l a t i o n s above, these f i n a n c e s should be a c q u i r e d a t a r e a l r a t e of i n t e r e s t equal to or l e s s than 10 per-cent, u n l e s s of course, r o y a l t y i s r e v i s e d upwards. TABLE 64 Volume, Area Needed and F i n a n c i a l Ccanmitxnent f o r Softwood Pl a n t a t i o n Programme ALTERNATIVES VENEER AND SAWLOG REQUIREMENT by year 2000 (Chapt. 4) PULPWOOD (CON-VERTING from Data i n Chapt. Two (2) INTEGRATED Pulpwood + Veneer -Sawlog under product s u b s t i t u t i o n (4) Without CU (1) With CU (1) Without CU + Pro-duct s u b s t i t u t i o n (3) Consumption R e q u i r e m e n t s Volume) ( + 174 - 782 -2880 '000 M Roundwood e q u i v a l e n t + 175 + 191 175 _ 382 - 860 395 -2480 -2909 886 175 1256 3795 i to 00 I I I . A r e a R e q u i r e m e n t s MODEL IE [5) Model IA (6) Model IC (7) 000 h a 58 213 28 183 64 215 10 23 51 13 82 278 I I I . I n v e s t m e n t F i n a n c e (8) •'000 U.shs 39208 143988 1982? 12370? 43264 145340 8480 19504 43248 9958 62812 212948 c o n t i n u e d -2 8 8-TABLE 6 4; - continued 1) - - + Ve sign indicates surplus while -ve sign shows additional volume to be produced at the minimum. Applies to veneer - a n d saw log' schedule only. When CU + product-substitution i s combined with pulpwood under integrated, volume of veneer and saw log.to be produced under alternative A i s assumed zero. 2) - values of paper and paperboard projected i n Chapter .'Four were converted to roundwood equivalent using a conversion factor of 1 MT = 3.5 m3 roundwood. 3) - obtained by adding to values i n 'WITHOUT CU' and extra 10 percent since by year 2000 softwoods - w i l l contribute about 83 percent of t o t a l i n d u s t r i a l roundwood. (Source: Table 41). 4) - obtained by adding 'WITHOUT CU + PRODUCT-SUBSTITUTION' p u l p w 0 O d ) o d 5) - based on conversion rate worked out i n section 7..10 Table 52., where 20,000 m veneer and saw. log capacity required a normal forest of area 1479 ha 3 6) - a conversion rate of 17102 ha for a 300,000 m pulpwood production - - 3 7) - for model IC, Table 54.shows 1 ha produces 295 m pulpwood and 230.3 m3 veneer - sawlogs. Therefore the major constraint i s the l a t t e r and. i s subsequently used for alternatives B, and C. Because no extra production of veneer ;rand saw' logs i s required, area i s based on pulpwood produced. 8) - f i n a n c i a l requirements worked out as cost of stand establishment + 20% operating costs. This-gives the following r e s u l t s U.shs 848, 766 and 676 per hectare for models IA, IC and IE Respectively. 9) Projections of alternative economic growth rates are as follows A - low B - medium C - high -289-7.23 Employment and Rural Development Employment and r u r a l development are c l o s e l y linked in a cause-effect r e l a t i o n s h i p . In Uganda, l i k e most LDCs, employment i s treated as a superior s o c i a l goal. The surplus labour i n the country i s composed of those in r u r a l (majority) and urban informal sectors. I t i s with r u r a l surplus labour that employment opportunities i n a f f o r e s t a t i o n programs are concerned. The attitude «of the Uganda Government i s that provision of opportunities for f u l l employment to a l l c i t i z e n s who seek i t , i s an ultimate development goal of the country. However, the Government concedes that the attainment of such a goal can at best be regarded a long-term one. Apart from pro-viding an i n d i v i d u a l a source of pride that he i s a pro-ductive member of society, employment i s considered a good indicator of d i s t r i b u t i o n of income. Under a d i r e c t c r e d i t scheme for woodlot farms, Table 6 5 shows that i t i s possible to annually employ a maximum and minimum number of 183 and 10 thousand people, respectively. Most of the labour i n t h i s case w i l l be family labour. Therefore under t h i s scheme a l l e v i a t i o n of some of the disguised unemployment (redundant labour) prevalent under the extended family system i s induced. The labour employed excludes those involved i n the actual administration of the c r e d i t scheme, most of whom would be s k i l l e d personnel. On the other hand, i f the seedling -290-TABLE 65 An Estimate of M J Annual Labour Requirement for Eucalypt Woodlot Farms PROJECTION ALTERNATIVES A S S U M P T I O N S I II III IV V a) Annual labour requirements under d i r e c t c r e d i t scheme (177 mandays/ha2 ( I Q O O persons ) A 101 71 50 30 10 B 154 108 77 46 15 C 183 128 92 55 18 2) b) Annual labour requirement under seedling c r e d i t scheme (49 mandays/ha) ( '000 persons ) A 28 20 14 8 3 B 43 30 21 13 4 C 51 36 25 15 5 Source: 1) - annual areas derived from data i n Table 63 (normal f o r e s t area * rotation length) 2) - mandays obtained from E a r l (19 75) -291-c r e d i t scheme i s used, a maximum and minimum of 51 and 3 thousand people w i l l be d i r e c t l y employed annually by the Forest Department at wage rates higher than that of the r u r a l sector. Estimates of per ha annual mandays requirements for the f i v e intensive management models for softwood pro-duction are shown i n Table 66. Since models IA, IC and IE are considered the best thus far, t h e i r labour re-quirements for producing the various q u a l i t i e s of round-wood are shown i n Table 67. Veneer and saw log production (model IE) w i l l annually provide a minimum and maximum of 5,000 and 38,000 jobs; likewise pulpwood production (IA) w i l l provide 2,000 and 10,000 jobs. The integrated pulpwood/veneer and saw log production o f f e r s the most jobs, exceeding the combined maxima of both IA and IE, employing a maximum of 6 2 thousand people annually. Immediately, there i s a c o n f l i c t between e f f i c i e n c y i n "desired roundwood" production and maximization of em-ployment. The same quantities of veneer and saw logs and pulpwood produced using model IC can be carried out using less land and c a p i t a l i f produced separately with models IE and IA. However,, with a strong national goal of employment, i t i s possible model IC may be favoured. If so the t o t a l maximum and minimum labour requirements for both the eucalypt woodlots and softwood plantations -292-TABLE 66 Estimates of Annual Labour Requirements i n a Normal Forest Wood Produc tion ^  ^  IA Ik' -I'C IE ( — -mandays per ha Site preparation 40 40 40 40 40 Ground preparation 18 18 18 18 18 Nursery 64 64 53 26 40 Planting 14 14 14 14 14 Weeding 14 21 28 35 28 Pruning , Thinning 12 63 63 84 42 8 8 16 8 24 Protection 1 1 1 1 1 Total wood production (a) i7'i" •229 233 226 207 (2) Harvesting Thinning 17 214 490 395 451 C l e a r f e l l 616 508 449 478 584 Total harvesting (b) 633 722 939 873 1035 Grand Total mandays > (a) + (b.) 804 951 1172 1 099 1242 Source: 1) - based on estimates by World Bank (197 4) 2) - based on fact that cost of harvesting ranges from 14.81 to 72.74 U.shs/ha, with a possible average of U.shs 26.00/ha (Aluma, 1974). Assuming that on the average, harvesting cost has a 40 percent labour content, and at a wage rate of U.shs 6/5 0 per manday 1.6 mandays w i l l be required to harvest 1 m^  of roundwood. This i s regarded r e a l i s t i c for c l e a r f e l l i n g . Cost of removals of thinnings i s higher and 2 mandays/m3 i s used. Fenton and Brown (1963) estimated labour productivity i n thinning at age 27 as 30 cubic feet 3) - for marking thinnings 4) - assuming 20 working days/month or 24 0 working days/year. TABLE 6.7,' Annual Labour Requirements f o r Softwood A f f o r e s t a t i o n Programmes, PRODUCTION STRATEGY PROJECTION ALTERNATIVES Low Medium High IQOO man/years-Veneer-and Sawlog (Model IE) 1) Without CU 2) With CU 3) Without CU + Product-s u b s t i t u t i o n 10 5 11 38 33 38 Pulpwood (Model IA) I n t e g r a t e d (Model IC) 2 3 5 18 10 62 Source: Tables 64 and 66 -294-w i l l be 245 or 13, and 113 or 9 thousand persons per annum under d i r e c t or seedling c r e d i t schemes, respectively. This compares well with the 355 thousand national em-ployment data for 19 74. By the d e f i n i t i o n given i n the introduction to t h i s thesis, r u r a l development cuts across a l l sectors, and should i d e a l l y flow from national and regional development plans. Rural development often involves considerable amount of p o l i t i c a l decision-making since i t encompasses s o c i a l and economic considerations. Unfortunately, the information base available to LDCs for implementing a goal of r u r a l development i s poor and inadequate. The importance of a p o l i c y of r u r a l development i s manifested i n the en-couragement of r u r a l a c t i v i t i e s and elimination or re-duction of i n d i v i d u a l and therefore regional inequality. Uganda i s a medium inequality country. Even so, i n terms of national goals, the elimination of inequality i s considered the true meaning of economic and s o c i a l j u s t i c e . One of the main worries i n Uganda i s the ever-widening gap between the modern (urban) and t r a d i t i o n a l (rural) sectors. But even i f t h i s gap i s narrowed, there e x i s t within the r u r a l sector i t s e l f regional d i s p a r i t i e s . Economic prosperity varies within d i s t r i c t s with much less than 50 percent of the d i s t r i c t s having per capita r u r a l incomes above the national average. Elimination of re-gional ( d i s t r i c t ) d i s p a r i t i e s i s e s s e n t i a l for maintaining -295-national cohesion, peace and s t a b i l i t y . However, re-gional development problems such as concentration of natural resources, of markets and of external economies, and widely d i f f e r i n g transport costs a l l reinforce these d i s p a r i t i e s . Therefore, i n each region, the strategy should be to seek a mix of economic a c t i v i t i e s more or less conforming to the natural and other attributes of the area. Ugandan Governments have t r a d i t i o n a l l y ex-tended some f i n a n c i a l assistance to the needier areas over and above the l o c a l government vote. The significance of a f f o r e s t a t i o n projects f o r r u r a l development i s that, located i n r u r a l areas and f a i r l y labour-intensive, forest plantations w i l l con-tribute to employment and stimulation of r u r a l a c t i v i t i e s . Increased a c t i v i t i e s and greater employment opportunities, acting i n a cause-and-effect manner, reinforce themselves making a greater impact on r u r a l development. Forest plantations have very l i t t l e backward linkage i n Uganda apart from use of labour and^therefore^the contribution to employment may be taken as the major impact. Therefore, location of the plantations i s a c r u c i a l decision because of i t s possible role i n a l l e v i a t i n g regional d i s p a r i t y . Technically, forests should be located where the r i g h t species can grow optimally. Provenance-trials for exotic plantation species have indicated areas within -296-Uganda where they can grow well. The decision as to whether, these s i t e s should a c t u a l l y be planted goes beyond technical considerations. Economic e f f i c i e n c y dictates that plantations should be established i n areas where the highest net s o c i a l benefit i s obtained. Equity considerations suggest location of plantations i n economically depressed regions. Ideally, the f i n a l s i t i n g of a plantation should be a tradeoff between technical, economic e f f i c i e n c y and equity considerations. In t h i s thesis, i t i s recognized that Uganda has t r a d i t i o n a l l y favoured agriculture over forestry i n major land a l l o c a t i o n s . I t i s for t h i s reason that lands under ecological zones 1 and 2 are considered a g r i c u l t u r a l land. Therefore, forestry's l i k e l v opportunities are i n ecological zones 3 and 4. A simple and p r a c t i c a l way of determining location of plantations with an emphasis on r u r a l development i s proposed below and based on land a v a i l a b i l i t y (LAI) indices. LAI.= (x 2/x 1) . (x 3/x 4) . x 5 where for a region ( d i s t r i c t ). LAI = land a v a i l a b i l i t y index x^ = t o t a l land area = land already i n use or committed x^ = population density i n a given year (1969) x^ = "ultimate" population density based on r u r a l carrying capacity x = ratio, of regional per capita inccme to the, national ^ average. -297-Any region with LAI values well below the national average i s considered economically-depressed, and technical considerations permitting, forest plantations should be established there. Based on the above formulation potential areas where plantations should be encouraged to enhance r u r a l development are: Madi, Acholi (East and West), West N i l e , Lango, Mubende, Bunyoro and Toro (see Table 68). The two Acholi d i s t r i c t s because of t h e i r r e l a t i v e l y large size o f f e r perhaps the greatest promise for an extensive plantation programme. 7.30 Summary In terms of t o t a l volume production, Model IA i s best. However, with an objective of producing the largest trees i n the shortest time possible, Model ID i s most suited. Production of product-oriented roundwood i n -dicated that Model IA i s suited to pulpwood production, IE for veneer and saw logs and IC an integrated pulpwood/ veneer and saw log production strategy. The differences in IROR earned by the d i f f e r e n t models at d i f f e r e n t roundwood price assumptions are small and a l l between 9 and 12 percent. Foreign exchange earning c a p a b i l i t y i s an important c r i t e r i o n i n establishing i n d u s t r i a l plantations. -298-TABLE 6.8 Determination of.Land A v a i l a b i l i t y I n d i c e s f o r A f f o r e s t a t i o n i n Uganda F A C T 0 R DISTRICT Land (1) x 2 / x 1 P o p u l a t i o n x 3 / x 4 (2) Income Income R a t i o X r (2) LAI A n k o l e .43 .52 1, .27 0 .284' Bunyoro .57 .18 1. .24 0, .127 K i g e z i . 72 .89 0, .65 0 .417 Toro .48 , .39 0. .89 0, .167 Masaka .42 .42 1. .42 0 , .250 E a s t Buganda .42 .44 2. .26 0, .418 West Buganda ( .42)* .60 2, .65 0, .668 Mubende .34 .26 1, .25 0. .110 B u g i s u .78 1.02 1. .51 1, .201 S e b e i ( .78) .34 0. , 95 0. .252 B u k e d i .81 .87 0. .62 0. .437 Busoga .68 .56 1. .42 0. .541 Teso .64 .46 0. .77 0. .227 A c h o l i (East & West) .22 .16 0. ,67 0. ,024 Lango .29 .32 0. ,68 0. .063 Madi .20 .17 0. 64 0. ,022 West N i l e .19 .43 0. 70 0. ,057 Karamoja ( N o r t h & South) .47 .48 0. 84 0. .190 UGANDA .43 .40 1. ,00 0. 172 Source: 1 - Lockwood C o n s u l t a n t s L t d . (1971) 2 - M i n i s t r y o f P l a n n i n g and Ec o n . Development (1973) A r e a s below n a t i o n a l i n d e x M a d i , A c h o l i ( E a s t & W e s t ) , West N i l e , Lango, Mubende, B u y o r o , Toro X^ and X 2 - T o t a l l a n d a r e a and l a n d t h a t i s a l r e a d y c o m m i t t e d o r i n use r e s p e c t i v e l y X^ and X^ - P o p u l a t i o n d e n s i t y and u l t i m a t e c a r r y i n g c a p a c i t y X^ - R e g i o n a l p e r c a p i t a r u r a l income as a r a t i o o f n a t i o n a l a v e r a g e . * - F i g u r e s i n p a r e n t h e s i s a r e d e r i v e d from t h e a v e r a g e o f Two d i s t r i c t s -299-Possible sources of foreign exchange earnings include import - and product-substitution, log exports and promotion of processed wood. For a l l models, the greatest promise for foreign exchange earnings i s i n import -and product - substitution. A maximum investment of U.shs 1641 and 493 m i l l i o n w i l l be required under d i r e c t and seedling c r e d i t schemes i f a l l fuelwood, charcoal, poles and posts were produced from eucalypt plantations, assuming the economy grows at a rate under alternative C. This w i l l employ a maximum of 183 or 51 thousand persons annually under the d i r e c t and seedling c r e d i t schemes, respectively. For i n d u s t r i a l plantations i f Model IC (integrated) i s used for production of pulpwood and veneer - and saw logs, a maximum investment of m i l l i o n U.shs 213 i s required. I t w i l l be able to o f f e r jobs for 62 thousand persons per year. I f veneer and saw logs are produced under Model IE, investment requirement w i l l be m i l l i o n U.shs 145, and number of jobs, 38 thousand. F i n a l l y , pulpwood produced using Model IA requires m i l l i o n U.shs 4 3 and an annual job rate of 10 thousand. Location of the additional plantations should preferably be i n econo-mically depressed regions. In Chapter Four, i t was argued that, the decision to l i m i t the size of the national forest area to 8-10 percent was at best a "guesstimate". I t has been shown i n -300-t h i s Chapter (part 7.22) that i f model IE i s used to produce the additional veneer and saw logs and IA the pulpwood, required by the year 2000, extra plantation areas of 215000 ha and 51000 ha, respectively, w i l l be needed. This gives a t o t a l of 266000 ha. An integrated pulpwood/veneer and saw log production using model IC could require 278000 ha. Furthermore, i f by the year 2000 a l l fuelwood, charcoal, poles and posts were pro-duced from eucalypt plantations, a maximum additional area of 1.5 m i l l i o n ha w i l l be needed. These data suggest an increase i n the area of forest plantations of 1.766 to 1.778 m i l l i o n ha, depending on whether softwoods are raised using model IE and IA or IC, respectively. The size of the forest estate at the moment i s 1.616 m i l l i o n ha or 8% of the t o t a l land area. Together with the additional area needed, an optimum size of the forest estate by the year 2000 w i l l there-fore, be 3.382 to 3.394 m i l l i o n ha or ca. 16.75% of the t o t a l land area. -301-CHAPTER EIGHT 8.00 SUMMARY AND .RECOMMENDATIONS 8.10 Summary The pace of economic development i n Uganda has been slow. National output has not increased fas t enough. There has been evidence of a long-term deterioration i n the terms of trade, elements of export i n s t a b i l i t y and a serious stress i n the balance of payments. Employment and r u r a l development have been less than s a t i s f a c t o r y . Demonstration and analysis of opportunities for the forestry sector to a l l e v i a t e these problems was the main"emphasis of this'study. A review of the past performance of the forestry sector indicated that i t s contribution to the gross domestic product has been minimal. Furthermore, employment i n forest management was small and unstable and imports of forest products increased faster than exports. On the other hand, forest industries were labour-intensive, ranking second to the t e x t i l e industry and contributing 10% of the t o t a l employment i n manufacturing. Currently, the forests occupy 8% of the t o t a l land area of Uganda and there are suggestions to rai s e t h i s to 10%. A major portion of the forest area i s made up of t r o p i c a l high forests and savanna woodland. There are approximately 22000 ha of forest plantations. The three main species being planted are Pinus patula Schl. Cham, P. caribaea Morelet var hondurensis and Eucalyptus grandis (Hill) Maiden. -302-Analysis i n t h i s study indicated that, by the year 2000 A.D., minimum and maximum consumption requirements i n 3 thousands of M or MT (for paper and paperboard) were 26,000 and 47,000 for fuelwood and charcoal, 1,700 and 2,9 00 for poles and posts, 20 3 and 1,0 31 for sawnwood and sleepers, 29 and 145 for wood-based panels, and 50 and 253 for paper and paperboard. Based on roundwood supply projections at current l e v e l s of management, the t r o p i c a l high forests w i l l be unable to meet the anticipated demand by the year 2000, without inducing economic s c a r c i t y . An increased u t i l i -zation of the "lesser-known" species i n the t r o p i c a l high forests i s a fea s i b l e medium-term strategy for avoiding timber s c a r c i t y . For example, preliminary studies have indicated that species such as Cyanometra alexandrii C.H. Wright o f f e r r e a l promise i n the export sector and should be processed. On the other hand, for a much more sustained pro-duction with attendant improvements i n q u a l i t y and y i e l d per hectare, a greater e f f o r t towards forest plantations i s advocated. Because there i s an a r t i f i c i a l surplus of land, a two-pronged strategy of forest area expansion and intensive management i s considered optimal for Uganda. The most promising intensive management operations i n the stand establishment phase (species selection, s i t e preparation and planting) are geared toward maximizing cost-effectiveness. -303-On the other hand, operations i n the stand.,development phase ( i n i t i a l spacing, weeding and maintenance, thinning and pruning) are aimed at increasing physical or value y i e l d per unit area. F e r t i l i z a t i o n and tree improvement of Uganda's forest plantations are at best long-term propositions. Seven product-oriented intensive management models were formulated to produce roundwood suitable for the products desired. The f i r s t f i v e models (IA, IB, IC, ID and IE) were for softwoods. Models IIF and IIG were designed for eucalypt plantations. The f i r s t assumption of the study was that, for an expanded plantation forestry programme to contribute sub-s t a n t i a l l y to economic development, techniques should be e f f i c i e n t . E f f i c i e n c y indices tested i n the study were: the rotation length; volume yie l d s and economies = "in land u t i l i z a t i o n ; net present value and i n t e r n a l rate of return; and cost-effectiveness. The f i r s t e f f i c i e n c y index examined was the rotation length, and three c r i t e r i a (strategic, technical and f i n a n c i a l ) were evaluated. If wood were considered a strategic raw material i n the economy of Uganda, rotation would correspond to the age of maximum mean annual increment. In t h i s case, model IC would have been the preferred management option, 3 because i t had the highest mean annual increment (29.4 M / ha/year) occuring at age 20 years. However, the c r i t e r i o n of maximum mean annual increment ignores technical considerations relatedlcto the size and q u a l i t y of timber produced. For -304-example, for a marginal tree size of 20 cm dbh for veneer and saw log production, model ID attains i t f i r s t , at 11 years. When the marginal tree size i s increased to 30 !cm dbh, model IE i s the most e f f i c i e n t , attaining the size at age 22 years. Models IA and IB a t t a i n the 30 cm dbh size at stand ages exceeding 35 years. Therefore, for a 20 cm dbh, model ID was the most e f f i c i e n t , while, IE was the best for a 30 cm dbh marginal tree s i z e . However, the stra t e g i c and technical c r i t e r i a both ignore the opportunity cost of c a p i t a l and premiums asso-ciated with s i z e . Therefore, the f i n a n c i a l c r i t e r i o n (Faustmann formula) was used to determine the appropriate rotations for the f i v e softwood models. The optimum rotations (in years) were 17 for IA, 19 for IB, 22 for IC, 27 for ID and 29 for IE. In t h i s case, model IA was the most e f f i c i e n t . However, unfortunately, technical re-quirements make t h i s model suitable for production of pulpwood, fuelwood, poles and posts only. These rotations, through the assumptions of revenue functions i m p l i c i t l y include technical considerations. The second e f f i c i e n c y c r i t e r i o n was the volume yielded at rotation age and i t s implications for savings i n land requirements. Although, currently, a land surplus e x i s t s , t h i s i s only true on a national scale. In some regions of Uganda (Buganda, Kigezi and Bugisu), there i s already a serious s c a r c i t y of land. Furthermore, economies i n land u t i l i z a t i o n also manifest themselves i n savings i n the -305-cost of harvesting by reducing the hauling distance. Based on a given quantity of roundwood required to support a pulpmill, veneer and sawmill, or an integrated plant, model IA required the least land area for pulpwood production alone, and for an integration of a pulpmill and a sawmill with greater emphasis on the pulpmill. For veneer and saw log production, model IE was best. Where an integrated plant had a larger requirement for veneer and saw logs compared to pulpwood, model IC was most suited. Therefore, with respect to . • economies i n land u t i l i z a t i o n , model IA was suited for pulpwood production, IE for veneer and saw log and IC for an integrated pulpwood and veneer and saw log production. The t h i r d e f f i c i e n c y index was the amount of net present value and f i n a n c i a l y i e l d (internal rate of return) earned at rotation length. Based on the rotations adopted, the i n t e r n a l rates of return earned (in percent) were 10.44 each for models IA and. IB, 9.37 for IC, 10.50 for ID and 10.37 for IE. The corresponding net present values (in U. Shs/ha) at 6%' were 2075 for IA, 1983 for IB, 1715 for IC, 3008 for ID and 3374 for IE. When f i n a n c i a l y i e l d was considered, ID was the most e f f i c i e n t , while, IE was superior with respect to net present worth. On the other hand, when a l l logs with small end diameter less 3 than 20cm are sold at U. Shs 17.50 per M and those larger 3 at U. Shs 35.00 per M , the present net worth values obtained (in U. Shs. ha) were 1917 for IA, 2181 for IB, 2447 for IC, 1764 for ID and 2091 for IE. The corresponding i n t e r n a l rates of return (in percent) were 10.12 for IA, 10.62 for IB, 10.31 -306-for IC, 9.12 for ID and 9.62 for IE. Model IC had the largest amount of net present value, while, with respect to f i n a n c i a l y i e l d , model IB was the most e f f i c i e n t . F i n a l l y , the fourth e f f i c i e n c y index referred to cost-effectiveness considerations. The i n i t i a l c a p i t a l outlay, or the t o t a l cost at rotation age compounded at 6% i n t e r e s t 3 rate required to produce 1 M of roundwood at rotation age, are two indices of cost-effectiveness. In t h i s study, model IE, the current management regime, was the most e f f i c i e n t , requiring the least amount of i n i t i a l outlay or t o t a l cost 3 to produce 1 M of roundwood at rotation age. Having considered these e f f i c i e n c y rankings, model IE, the current management practice, was selected as the optimum for veneer and saw log production; IA for pulpwood; and IC for an integrated pulpwood/veneer and saw log production. The second part of the investigations i n t h i s thesis was concerned with socio-economic implications of adopting the optimum product-oriented models to enhance development. The factors considered were the export p o t e n t i a l , investment requirements, employment and r u r a l development. Possible sources of foreign exchange earnings were i d e n t i f i e d as: import - and product-substitution, log exports and promotion of exports of softwood products. For Uganda, domestic production of softwood products to substitute for the current imports; and the increased substitution on the domestic market, of softwood sawnwood for those of the prime -307-grade THF species which could then be released for exports, o f f e r the most promise. The d i r e c t economic value of pro-duct substitution for sawnwood was estimated at U.shs 14 00 per M . When the shadow price of foreign exchange was con-sidered, the economic value of substituting domestically pro-duced softwood sawnwood for imports was estimated at U.shs 3 727 per M . The same calculations could not be car r i e d out for softwood plywood, particleboard, fibreboard and pulp because there i s no domestic production at the moment. For the production of eucalypt fuelwood, poles and posts, the maximum investment required by the year 2000, should be U.shs 1641 and 49 3 m i l l i o n under d i r e c t and seed-l i n g c r e d i t schemes, respectively, assuming that- GDP' ' w i l l grow at 10% per annum and population w i l l be constantly increasing. The number employed under the d i r e c t and seed-l i n g c r e d i t schemes w i l l then be 183 or 51 thousand persons per annum, respectively. Assuming consumption requirement leve l s for the year 2000, i f Model IC i s used to produce both pulpwood and veneer and saw logs, maximum investment needed would be U.shs 213 m i l l i o n . This would o f f e r employment opportunity for 62 thousand persons annually. I f Model IE i s used to produce only veneer and saw log portion of the consumption re-quirements by the year 2000, th i s would need a maximum i n -vestment of U.shs 145 m i l l i o n . Annual employment w i l l be 38 thousand persons. F i n a l l y , using Model IA for producing the pulpwood component of the domestic production goal, by the -308-year 2000, an investment of U.shs 43 m i l l i o n would be required. The employment opportunity offered would be 10 thousand persons per annum. The combined investment requirements for models IA and IE equalled U.shs 183 m i l l i o n compared to U.shs 213 m i l l i o n for the integrated production strategy i n model IC. Likewise, the combined employment opportunities added to 4 8,000, compared to 62,000 persons per annum. The choice of Model IC com-pared to a combination of IA and IE would depend on the p r i o r i t y attached to provision of employment and s c a r c i t y of investment funds. To s a t i s f y the anticipated demand, the size of the national forest estate should be increased from the present 8% to 17% of the t o t a l land area. To maximize the contribution of plantation forestry to r u r a l development, additional plantations should be located i n "economically depressed" regions. An index of land a v a i l a b i l i t y that defined these regions was proposed. The areas i d e n t i f i e d as economically depressed were Madi, Acholi (East and West), West Ni l e , Lango, Mubende and Bunyoro. Considering other factors that could a f f e c t pro-duction e f f i c i e n c y , Acholi (East and West) Lango, Mubende and Bunyoro were considered most suitable for expansion of af f o r e s t a t i o n a c t i v i t i e s . 8.20 Recommendations The following recommendations are based on the pro-blems encountered during the a n a l y t i c a l phase of the study and from the results obtained. -309-A major problem throughout was the paucity of data. There i s an urgent need to increase and refine the data base so as to make i t much more r e l i a b l e and e a s i l y accessible. The true contribution of forestry to the economy of Uganda has never been determined. There are some statements, but most are highly subjective. Therefore," the d i r e c t , i n d i r e c t and induced contribution of forestry to GDP, employment and r u r a l development, foreign exchange earnings and conservation(soils and watershed) should be assessed. The data necessary for forecasting future wood requirements depend on the purposes for which such a forecast i s made. Aggregate requirements were emphasized and the variables used considered adequate. However, there i s a need to make a si m i l a r , but detailed, market-oriented forecast. This would i d e n t i f y forest products consumption by end-use or consumer categories. In addition, i t w i l l help to e s t a b l i s h the relationships between a given product and s p e c i f i c factors influencing i t s consumption. With these relationships, a true price/quantity demand . relationship can then be s p e c i f i e d , instead of r e l y i n g on consumption requirements. -310-D. A much more detailed land c l a s s i f i c a t i o n system should be developed. Apart from physical s u i t a b i l i t y , economic and s o c i a l factors should be included. E. The size of the forest estate i n Uganda was based on the c r i t e r i o n of "minimum area" , because, forestry was regarded a handmaid to agriculture. A need exists now to reassess the relevancy of t h i s c r i t e r i o n . In the thesis, I have c a l l e d the c r i t e r i o n inappropriate. Uganda should determine the optimum size of the forest estate. My approximate estimate i s ca. 17% of t o t a l land area. F. Having assessed the o r i g i n a l supply and demand functions, the influence of intensive management on these and national income and employment should be determined. This thesis has shown the conse-quences of intensive management during the es-tablishment and development phases of a stand. G. A l l evidence suggests that Uganda forestry should take the advantage of finances offered by development-oriented agencies l i k e the World Bank, the Arab Bank for Economic Development i n A f r i c a A f rican Development Bank and the Arab Development Fund. However, these finances should be accepted only i f a forestry project i s well formulated. -311-H. Based on physical land c l a s s i f i c a t i o n , production e f f i c i e n c y and regional development considerations, future forest plantations should be concentrated i n A c holi, Lango, Mubende and Bunyoro as high p r i o r i t y regions. These regions and Madi and West Nil e are economically depressed. However, the l a t t e r two are r e l a t i v e l y inaccessible when costs of growing, processing and d e l i v e r i n g the wood to the consumers are taken into account. I. Ultimately, any conclusive decision to invest i n plantation forestry should be backed by a thorough s o c i a l cost/benefit analysis that shows the stand, forest, regional and national costs and benefits of carrying out the a c t i v i t y i n Uganda. The models formulated and analyzed i n t h i s thesis should o f f e r a foundation for such analysis. J. A l l the recommendations above, even i f implemented may not achieve the optimum contribution of forestry to economic development. A pre-requisite i s a sound forest p o l i c y , and i t s formulation should be treated as a p r i o r i t y . -312-Beginning from the 1930s, t r o p i c a l high forests have been the major source of timber supply i n Uganda. These forests w i l l continue to play such a role i n the immediate future through increased u t i l i z a t i o n of lesser-known species. However, t h e i r importance for a long-term timber supply i s limited by s i z e , extent and the slow growth of the valuable species. This thesis has analysed management strategies for enhancing contributions of plantation forestry to the economic development of Uganda. If the optimum regimes which have been i d e n t i f i e d are followed, substantial benefits can r e s u l t for a l l Ugandans. These benefits include increased timber a v a i l a b i l i t y , opportunities for export, greater employment and enhanced s o c i a l values. Although the analysis could be improved by use of better data and perhaps more refined approaches, the general conclusions should be applied promptly and f u l l y within the framework of the o v e r a l l national development plan. -313-9.0)0- • LITERATURE CITED Aerestrup, J . 1969. 'Average rate of i n t e r e s t i n sustained y i e l d forestry based on h i s t o r i c a l Danish material", Forestry 4.2(1): 83-92 Adeyoju, S.K. 1971. "Policy on development of timber resources and on forest products u t i l i z a t i o n ' . The Nigerian Journal of Forestry, 1 (1) : 43-52. Adeyoju, S.K. 1975. Forestry and the Nigerian economy. Ibadan University Press, Ibadan. 308p. Adlard, P.G. and D. Alder 1975. Report on a y i e l d model for Pinus  patula, P. radiata, and Cypress i n Kenya, Uganda, Tanzania and  Malawi. 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A p p e n d i x 1 -330-P o p u l a t i o n D i s t r i b u t i o n rr>?l_'LA"riON D'.YIidl'.UTION Appendix II , - 3 3 1 -GROWTH CHARACTERISTICS OF THE FORESTRY RESERVE ESTATES OF UGANDA BETWEEN 1964 and 1971 Increase or Decrease 1964 1968 1964 - 1968 1971 HECTARES HECTARES HECTARES % HECTARES Increase or Decrease 1968 - 1971 WESTERN PROVINCE Ankole 94530 97039 + 2509 97029 - 10 Bunyoro 88622 185830 + 97208 186103 + 273 Kige z i 53660 57723 + 4063 58541 + 818 Toro 198213 227348 + 29135 229779 + 2431 TOTAL 435025 567940 + 132915 30 571452 + 3512 BUGANDA PROVINCE Masaka East Mengo West Mengo Mubende 39117 126009 7324 77594 114649 38622 85646 + 38477 + 27262 + 78322 77622 114900 38204 85665 + + 28 251 418 19 TOTAL 172450 316511 144061 83 316391 120 EASTERN PROVINCE Bugisu 53250 52683 - 567 52755 + 72 Sebei 68334 67167 - 1167 67167 -Bukedi 565 5219 + 4654 5219 -Busoga 16817 39925 + 23108 39873 - 52 Teso 17503 13483 - 4020 13515 + 33 TOTAL 156469 178477 + 22008 14 178530 + 53 NORTHERN PROVINCE Acholi 80756 105216 + 24460 105224 + 8 Lango 10723 21134 + 10411 105224 - 1978 Madi 33719 34403 + 684 34403 -West N i l e 64211 67524 + 3313 68418 + 894 TOTAL 189409 228277 + 38868 20 228201 - 76 Karamoja 337870 321792 - 16078 -5 321780 - 12 Total Uganda 1291223 1612997 + 321774 25 1616354 + 3357 , _ ' - ~ - - - 3 * -PKOGRAM VYTL - VAR I A8l E YIELD TABLES - HUN ON U-22-.77 AT 13:04143 - PAGE 5 ^ > — : _____ : -Br PINUS PATULA—CLOSE SPACING WITH NO THINNING MODEL IA £• YIELD TABLE FUR P,PATULA IN UGANDA PLANTED AT 2200, STEMS/HA SITE INDEX 20,0 GRUWING STOCK AFTER THINNING RtMQVALS * AGt YRS 9 10 -rt-12 15 14 IS 16 -rr-i« 19 -20-21 22 24 25 26 27 28 -2^-30 31 -3-2-33 34 HDUM N/hA NET B A SO.M/H D (B A ) CH VOB CU.M/H TOT V CU.M/H CAI V CU.M/H 8,8 10,2 11.6 13.0 11.3 16,7 17,9 19,0 20.0 21.0 1949, 1949, 1949, 1909, 1700, l b S l . -17.6 21,1 2<M 30.3 MAI V CU.M/H MEHCH,VULUMtS 20C-M 10CM CU.M/H CU,M/H N/HA D(BA) "CM' NET B A VOB 10,7 11.7 12^9 13.9 15.i - ^ r j i i"5-f9-1595, 1522, 14o0, 1405, 13*8, 35,5 37.4 39,1 a o , 7 "2,1 16,a 17,7 18,5 19,9 87,5 116,0 153,9 192,7 218.il -2S»-rr-293.7 328,8 -36 3,3 39 7,0 429,9 90,2 118.8 156,7 193,5 231,8 -2*9-5-0-308,9 344,0 379,7 413,7 446,3 21.9 1317, 22.8 23.7 24.5 25,2 26.0 1280, 124 7 , 1218 .-•• 1191, I 168. 43.5 44.7 45,8 «o,8 4 7.7 48.6 -20T&-21.1 21.6 22.1 22,6 23.0 -*6+ T 8 -492,7 522.6 551 ,6 579,4 t>06,4 26.7 1146-, 49.5 H-r« 6^2v2-27.3 27,9 26 ,5 29.1 29,6 30,1 30.6 31.0 31.4 31,8 32.2 0.0 1127, 1 109, 1093, 1 0 78. 1064, •" t 0 5 1, 1040, 1029. 1019, 1010, 1002, &T-50,3 51,0 51,7 52,3 52,9 23,6 24.2 24.5 24,9 25.2 65 7 ,1 681,1 7 0 4,1 726,2 74 7 ,4 -4-7-6V7-510,4 540,0 568,5 596,3 622,7 -64-8-J-5-673,7 696,0 720,6 742,5 763,5 -5*7^ ? 5 T 5 76 7,7 54.1 54,6 55,1 55,6 56.0 0.0 25.7 26,0 26 i 2 26,5 26,7 -VTO-787 ,4 806,1 •824,1 841,5 658,2 — Q r e --^-8-3T6-802,6 821.5 839,2 856,2 672,5 — © T O -0,0 15,0 31,6 28,6 17,0 50,9 37.9 .19,6 78.5 36,8 21.5 108,7' 36,3 23,2 • 133,1 -?4-r5 H>-5-,-5-197,4 229,1 ~i L. rt a 3 9 , 9 3 5 , 0 3 5 , 8 3 4 , 0 3 2 , 5 - ^ T 4 -31.7 29,6 28,6 27.7 26,4 25,2 24,2 22.6 22,0 21,0 - 2 0 - r t -19,0 18,9 17.7 17,0 16,4 —Ortf-- ..--25,7 26,5 27,1 2/,6 27,9 -2*~,-2-28,4 26,4 26,4 .26,4 28,3 -2-8-1^ -28,1 27,9 27.7 27,5 27,3 27,0 c c 7 « 4 260,5 291,3 321,4 -JS-thrT-379,1 406,6 433,2 456,9 483,7 507.4-530«4 552,5 573,7 594,1 613,6 26,8 26,5 26,2 25,9 25,7 0.0 -6-3-2T4-650,5 667 ,8 684,4 700,4 715,8 0 . 0 -,0,0 0,1 0,8 3,0 7,1 2i|0 31.4 45,0 60,4 76,7 —9-4-rT-114,1 133,2 154,5 175,6 INC. I D» SQ.M/H CU.M/H 196,5 -2+6- u -239,3 262,4 264,9 306,9 326,3 369,0 389, 1 4 08 , 6 427 ,2 445,0 — 6-j-e-84, 14,8 1,0 .10,3 I u> I 56.5 0 74.1 -*-F0H FUR TH£ R D gT AIL S 0 F EACH T HINNIN G>S E E f l ELOW PROGRAM VY TL VARIABLE YIELD TABLES RUN ON U-22-77 AT 13;04«43 PAGt 18 PINUS PATULA—CLOSE SPACING WITH HEAVY THINNING MODEL IB YIELD TABLE FUR P,PATULA IN UGANDA PLANTED AT 2200, STEMS/HA SITE INDEX 20,0 GROWING STOCK AFTER THINNING REMOVALS * AGE YHb HDUM rt. N/HA NET 8A D(BA) SO.M/H CM 6 7 « 9 10 8,8 10.2 11.6 13,0 14.3 - r r -13 lb 16 -rt-m --20-21 22 1 3 I J 16.7 17. 9 19,0 20.0 21,0 -2-tx9-22,8 23.7 -24,5-25,2 26,0 19«9, 1949, 1949, 1909, 1 784 , -ltj»i , 720, 720, 720. 72