Economics of Reforestation

The large sums being spent annually on reforestation by provincial governments as well as the rationalization of budget planning warrant a re-evaluation of reforestation projects using economic criteria. This paper examines the direct and indirect returns from a stand of white spruce of site class I in two ways: that of present value and that of internal rate of return on the investment. The return is poor for the individual but it could increase considerably with participation by the State. Indirect benefits are sufficient to justify reforestation by the State. The allocation of reforestation costs among the various beneficiaries (the individual, federal, provincial and municipal governments) should be made in direct proportion to the benefits received. The State has a great responsibility in reforestation because of the long production period of the forests.