Iranian Journal of Wood and Paper Industries

Iranian Journal of Wood and Paper Industries

Determining the optimal cycle of poplar cultivation under uncertainty conditions and considering the opportunity cost of agricultural land

Document Type : Research Paper

Authors
Seyed Mojtaba Mojaverian 1
Foad Eshghie 2
Kamal ataie Solout 2
Mahsa Taslimi 2
Maria Shahnoshi 2
1 Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University
2 Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Iran
10.22034/ijwp.2025.2049061.1692
Abstract
Problem definition and objectives: Despite the use of alternative materials to offset the demand for fuel from wood and the widespread use of virtual pages instead of paper, the demand for wood is still increasing. Wood cultivation is one way to preserve forests. Obviously, the necessary condition for extending and reducing the pressure on the forest by this solution is that wood cultivation is cost-effective from the point of view of producers. Spruce is a common wood cultivation option in northern Iran. The most important issue in timber farm management is determining the most economical time to cut trees. The purpose of this study was to evaluate the optimal utilization of Populus deltoids in comparison to other competing land uses.
Methodology: Unlike other competing crops, wood cultivation is not cancelable every year, and unlike horticulture, its main income is not obtained annually. These two properties of wood cultivation have caused in its economic model, risk and discount rate variables are very important role in decision making. Owing to the uncertainty of tree growth, the results of model estimation for different colonies and three growth data in minimum, maximum, and average were used to estimate fuzzy regression. To predict the wood price, we used the price decomposition (trend, cyclical, and random components) methodology. The opportunity cost of land use was considered to be equal to the average net profit of one hectare of high-yielding rice fields. Three scenarios were examined to determine the best time for tree cutting: a) when the prices of both wood and opportunity cost do not grow, b) when price growth occurs at the same rate in both, and c) when the growth of opportunity cost will be more than wood price.
Results: In the first scenario, the best age for tree cutting in one-turn poplar cultivation was 7 years, and that in continuous poplar cultivation was 6 years. In this scenario, poplar cultivation is an economic activity, even for high-quality land with an annual rent of 100 million tomans. In the second scenario, except for the Inferior lands (low quality), whose annual rent is less than 15 million Tomans per hectare, in other lands, the optimal cutting age is 7 years, both for one turn and permanent cultivation. In the third scenario, the results were subjected to sensitivity analysis of the critical conditions. The results of this scenario show that the limitation of the development of poplar cultivation (the margin of development) increases with an increase in the discount rate. For every 1% increase in the opportunity cost to wood price ratio, the edge of development is decreased by 0.67% at a discount rate of 20%, but at a discount rate of 40%, this reduction is approximately 0.74%.
Conclusion: This study showed that even at a high discount factor, farmers rush to cut their trees. Prehab, this behavior is caused by an environment of high risk and uncertainty in the decision-making space. Usually, the growth in prices accelerates the cutting of trees. Therefore, a high inflation rate is expected to negatively affect poplar cultivation. In addition, although three discount rates and nominal growth of income (timber price) and cost (lost opportunity cost) are effective in the management of wood farming, in all scenarios, the increase in the discount rate is more effective than the increase in the relative rates of price growth on the limitation of poplar cultivation development. This difference in effectiveness was greater at higher discount rates. Based on these results, it seems that financial support is more effective than price support in the development of poplar cultivation.
Keywords
Faustman Model
Interest Rate
Rent
Land Rrent
Optimal Rotation Age

Subjects

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Iranian Journal of Wood and Paper Industries
Volume 16, Issue 2
Summer 2025
Pages 165-187