Assessment of economic sustainability of the strip clear-cutting system in the Peruvian Amazon

Strip clear-cutting (or the Palcazú Forest Management System) is a natural forest management system where narrow strips are clear-cut with harvest cycles of every 40 years. We assessed the economic sustainability of this system by calculating net present values (NPVs) at the time of a second harvest in two strips clear-cut in 1989, in the Peruvian Amazon. NPVs were calculated under three growth models or scenarios: (1) realistic (all light environments), (2) optimistic (higher light as could be achieved under intensive forest management), and (3) growth potential (fastest growing individuals). For each scenario, we calculated the production and value of timber products (sawnwood, roundwood, and charcoal), and their cost of harvesting, processing and transport. For comparison purposes, these calculations were also done for a deferment-cut treatment, applied in 1989 to half of one of the two strips.The three growth models predicted a production of 1.88 to 22.43 m3/ha of sawnwood, 81 to 92 pieces/ha of roundwood, and 11 to 19 ton/ha of charcoal from clear-cut strips. The total value of these products ranged from $3112 to $10,511/ha, assuming that sawnwood was purchased at certified prices. The total cost of harvesting, processing, and transport of timber products ranged from $3020 to $6167/ha. Net earnings ranged from −$75/ha to +$4344/ha. The net present value (NPV) of the clear-cut strips with certified sawnwood ranged between −$54/ha and +$1271/ha at a 5% discount rate, and between −$73/ha and +$78/ha at a 15% discount rate, the most realistic rate for Peru. These values were much lower than +$131 to +$540, the range of NPV at 15% discount rate for the deferment-cut treatment with certified sawnwood. The strip clear-cutting system is not economically sustainable due to slow tree growth, low income from timber products, and high costs for this system. Cutting cycles longer than 40 years may be required to increase timber yields and make this system profitable.