A benefit-cost approach to developing a methodology for reforesting critical lands in Java

As a result of population pressure, fuelwood shortages have occurred for at least 15 years in Java. The problem has caused natural forest degradation. The Ministry of Forestry has initiated a reforestation program to ameliorate the situation. Examining the economics of the program is the purpose of this report.

Based on benefit-cost ratios, economic contributions of the fuelwood component indicated that the reforestation program was economically unfeasible. However, by including benefits of soil erosion control the program was economically attractive on some sites.

A methodology was developed to prioritize which critical lands to reforest. This was done by identifying market price of fuelwood at the mininum yield that would justify a reforestation investment. The method indicated that, subject to budget availability, critical lands should be reforested in descending order of productive potential until the site of minimum required yield is reached.