Plantation forestry and contract farming for pulp fibre production in North-East Thailand

EXECUTIVE SUMMARY

Pulp demand rising, fibre supply limited

1.   Projected demand for pulp and paper in Thailand in the coming 25 years is high, which renders rapid strengt­hening of country’s own pulp mill­ing capacity na­tionally well justified.  Remark­able increment in pulp supply can be met only with planted trees, through plantations and contract farming.  The exploitation of natural trop­ical forests has been banned in Thailand.

2.   The proposed pulp mill of the Forest Industry Orga­nization (FIO) has an output capacity of 100’000 ADT/a, with an annual demand of 470’000 green tons (or 264’400 m3/a) of Eucalyp­tus or other short-fibre wood.  The FIO’s plan­tation land resource in North-East Thailand is 20’161 ha (126’006 rai), out of which 9728 ha (60’803 rai) has already been planted with Euca­lyptus camal­du­lensis.  The additional area to be refor­ested is 10’432 ha (65’203 rai).

3.   Steady wood supply for the pulp mill is secured if an average growth of 13.1 m3/ha/a (3.7 tn/rai/a) is ac­hieved.  Currently the growth potential of the existing plantations (9728 ha) is at 11.4 m3/ha/a (3.2 tn/rai/a).

4.   The planted and plantable area in the North East (20’161 ha) is estimated to sustain an annual timber supply of 410’000 gtn/a.  The re­quired management mea­sures for this level are: i) re­forest the re­maining 10’432 ha with current practi­ces at spacing  3 x 3 m, apply 7 years rotation, ii) enrichment plant the older under­stocked planta­tions into the spacing of 2 x 4 m, apply 5 years rotation in agroforestry ap­proach (with forest villagers’ cassava every 5th year).

5.   The remaining wood demand, 60’000 gtn/a, is to be procured from contract farming, open markets, or from the FIO’s remote plantations.  The con­cept of contract farming has already been estab­lished in Thailand, a working example is applied with Phoenix Pulp & Paper Co., Ltd. in Khon Kaen.  Wood markets of plantation Eucalyptus  have opened up in the North-East; the wood pric­es are in the steady rise after the log­ging ban for natural forests.

Improved tree stock and production optimisation raise yields

6.   With the advanced tree and stand improvement, com­bined with production and management optimisation, a rise in the plantation productivity to the level of 14.1 m3/ha/a (sufficient supply from the FIO’s own plantations) is within reach.  This is justified by the following findings:

–  Ecological conditions in North-East Thailand favour Eucalyptus plantation forestry.  Rainfall is over 1100 mm/a, soils, in general, are good enough for eucalypts; they are soft, only a few rocky sites have been planted or reserved.  Saline soils are rare in the plantation sites of the North-East.

 –  Thai foresters have developed advanced planta­tion establishment techniques.  Complete plough­ing and mechanical weeding are nowadays commonly practised.  Consequently, the high survival rate and rapid early growth results.  This is especially the case in the youngest FIO plantations.

 –  Majority of the older plantations are under­stocked (2 x 8 m spacing).  Doubling the density will double the yield at currently practised short rotation (5 years).

 –  5 years’ rotation does apparently not maximize pulp fibre yield.  In Brazil, the rotation of 7 years is practised in comparable conditions but with much hig­her yield level.  In Ethiopian highlands, the biomass yield is maximized at 10-12 years rotation.  Future rai­sing of rotation time from 5 to about 10-12 years is likely to in­crease annual timber supply with 30-50 %.

 –  Miscellaneous, apparently poor Eucalyptus seed stock is used to raise seedlings.  A shift from unimproved seed stock to improved clonal stock has a potential multiplier effect of 2 (two) on the annual biomass yields.  Working examples are found in Aracruz Florestal pulpwood plantations in Brazil and in South African Eucalyptus for­est­ry.  The Thai foresters are capable to adopt these techniques; clonal forestry applications are already underway in the Kasetsart Universi­ty and in the Royal Forestry Department.

Ecological, social and economic impacts positive

7.   The environmental impact of plantation forestry and contract farming in North-East Thailand is positive.  It must not be expected that Eucalyp­tus plantings are substitutes for tropical rain­forests.  Eucalyptus must rather be regarded as an alternative tree crop in agri­cultural and agro­forestry systems suitable for impove­rished soils and degraded lands.

8.   The Thai forest research has shown locally that posi­tive ecological impacts of eucalypts over­weigh the negative impacts.  In the positive side is the reclama­tion of open wastelands for tree cover and binding soil from wind and water ero­sion.  Negative ecological impacts occur when reforesting fragile upper zones of watershed areas.  This problem is known in Thailand and is avoided with careful land management.  Agrofor­estry ap­plication of eucalypts combined with cassava or other crops are better studied in Thailand than anywhere else in the tropics.

9.   Reforesting open lands with any tree crop in­creases the woody biomass density and counter­balances the effect of natural forest destruc­tion on climate.  Plantation forests and con­tract tree farming are a national Thai attack on the global greenhouse effect.

10.  The alternative to Eucalyptus planting is the nitro­gen-fixing tree Acacia mangium.  It grows moderately well in areas where the rainfall exceeds 1400 mm/a.  Working examples for eco­logical­ly sustained, humid tropics Acacia man­gium for­estry, are found in Indonesia. In drier areas, A. mangium is expected to produce only half of the E. camaldu­lensis yields.

11.  Logging ban from natural forests on one hand, and the already existing Eucalyptus plantations and woodlots, on the other hand, have created an operating plantation wood market in the countryside of North-East Thailand.  Currently, Eucalyptus tim­ber is bought and sold as poles or to be pro­cessed for exported wood chips (mainly for Ja­pan).  Phoenix pulp mill is steadily increasing the plantation wood demand in the Khon Kaen area.  The Eucalyptus wood markets are becoming an essen­tial part of the agricultural and for­estry sec­tor in rural areas.  This has a positive effect on the economy of North-East Thailand in gen­eral and on the farmers liveli­hood espe­cially.  By adding a new crop into a selection of profit­able alternatives for crop­ping in impove­rished soils, the welfare in the rural areas is expec­ted to increase.  Higher wood demand will mean higher security to the wood producing farm­ers and also stea­dily rising prices.

11.  The forest village concept of the FIO is a model example of successful social forestry.  The cur­rent experience already shows that shifting cultivators can be settled in the forest areas by providing land for housing, home gardens and permanent cropping, and by providing permanent addi­tional income from plantation forest work.  The continued satisfaction of forest villagers is a guarantee for a more positive attitude towards forest planta­tions.

12.  The economic impact of the plantation forestry is positi­ve.  Provided improved stock is in use and management optimisation is applied, an in­ternal rate of return (IRR) of over 10 per can be ex­pected from the planta­tions.  Lower IRR from older, forest village combined plantations is also acceptable, as the social and agrofor­estry advantages justify shorter rotations and lower wood yield levels.

13.  To guarantee steady pulp fibre supply as early as possible for the proposed pulp mill, it is recommended that possibilities for international soft loans are sought for, to ensure funding for rapid tree improve­ment and reforestation activi­ties well in advance.

*****

Comment on 13 October  2020:

I was in January 1992 on a forestry trip to Thailand, to study the subject above. The full report (feasibility study) was completed on 28 January 1992.  The raw text can be found in the link

The text in the link is quite raw because digital reporting in 1992 was quite elementary. The figures and graphs for the report had to be annexed separately. The previous softwares handled the tables in a different manner than the present modern softwares. The text as such in the 2020 link, however, is quite comprehensive with the 1992 text.

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