Determining subsidised forest stands to satisfy required annual wood yield with minimum governmental expense

- An analytical framework is proposed to determine subsidising policy for forestry.
- Subsidised forest stands are selected so that the governmental expense is minimised.
- Subsidy rates for all stands are also minimised under the optimal rotation ages.
- The framework helps in determining policy with simple optimisations.
- It provides efficient subsidised stand selection reflecting practical constraints.

There are regions where forestry is required for wood production but the profitability is so low that many forest stands cannot be managed without subsidisation. Hence, the policymakers should design an efficient subsidising system involving the selection of subsidised forest stands. In this paper, we present an analytical framework for the proposition through the construction of a normal forest (a forest state such that the age distribution of stands is uniform) that consists of only stands that need to be subsidised for regeneration. The normal forest is constructed so that it supplies the required annual wood yield with minimum governmental expense for the subsidy. The rotation age of the normal forest is set to an optimal rotation age based on the soil expectation value of the stands under the minimum subsidy rates. The normal forest can be derived without numerical integration when the dominant tree height distribution follows a generalised gamma distribution. We present an application of the framework for four tree species in the Nagano Prefecture, Japan. The result of the application shows that the framework enables us to select the subsidised stands for efficient governmental funding, implying the practical conditions of the stands and requirements of wood demands, by using optimisation functions in a commercial spreadsheet program.