DROUGHT RISK: HAVE ECONOMIC BENEFITS FROM E. GLOBULUS PLANTATIONS IN SOUTH WEST AUSTRALIA BEEN OVERESTIMATED?

Tym Duncanson and Steven Schilizzi

No 125614, 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia from Australian Agricultural and Resource Economics Society

Abstract: The social and environmental benefits of establishing E. globulus plantations in south west Australia on previously cleared farmland are reviewed. Due to their sensitivity to drought, we study how this risk may affect the return on plantation investments. Productivity reductions of up to 40% in both rotations did not result in an internal rate of return lower than the threshold 10%. These results assume that growers could sell into the international market and receive export parity prices. If this case, large reductions in plantation productivity should not discourage investment and the reported social benefits should not be greatly affected.

Keywords: Crop Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 13
Date: 2001-01
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare01:125614

DOI: 10.22004/ag.econ.125614

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