Economic Zoning of Teak in Thailand

Abstract

The objective of this study was to establish the Economic Zoning of Teak Plantations in Thailand. The study adopted the economic cost benefit analysis as a tool in establishing the Economic Zoning of Teak Plantations. The economic cost benefit analysis used a 20-year period time frame, 3 percent real discount rate, and the cost benefit streams valued at a constant price (100=2019). The economic feasibility indicators adopted were the Net Present Value (NPV), Benefit Cost Ratio (BCR), and Internal Rate of Return (IRR).

Based on the differences in land potential for Teak, transportation costs, and land value (opportunity cost of land) of various provinces, the study found that provinces most suitable for commercial Teak plantations were Kanchanaburi, Uthai Thani, Phichit, Kamphaeng Phet, Petchabun, Phitsanulok, Sukhothai, Tak, Uttaradit, Phrae, Lampang, Lamphun, Nan, and Phayao. The economic NPV of Teak plantation in these provinces with estimated high value of Teak ranged between 209,744-302,880 baht/rai. These high value Teak plantation provinces should be considered while constructing the Economic Zones for Teak Plantations in Thailand. Establishing Economic Zones for Teak Plantations will enable the Thai government to appropriately provide the necessary infrastructure support for the investors, such as marketing network, certification system, transportation services, as well as legal facilities.