Can Efficiency Gains in the Wood Processing Industry Conserve Forests in Developing Countries? The Case of Andhra Pradesh

Growing world demand for processed goods made from wood and a large supply of native timber in tropical regions combined with development incentives from national governments have driven rapid growth in the forest products industry in many developing countries. Contract farming schemes have emerged...

Full description

Saved in:
Bibliographic Details
Published in:Forest products journal 2020-12, Vol.70 (4), p.409-415
Main Authors: Schons, Stella Z, Gudimenda, Haripriya, Amacher, Gregory S, Cobourn, Kelly M, Wynne, Randolph H, Thomas, Valerie A
Format: Article
Language:English
Subjects:
Analysis
Consumption
Contract farming
Developing countries
Econometrics
Economic aspects
Economic incentives
Efficiency
Environmental aspects
Farmers
Forest conservation
Forest management
Forest products
Forest products industry
Forests
Forests and forestry
Harvest
Harvesting
Incentives
India
Industrial development
Industrial efficiency
LDCs
Processing industry
Production functions
Production management
Protection and preservation
Raw materials
Timber
Tropical environment
Tropical environments
Willingness to pay
Wood
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Growing world demand for processed goods made from wood and a large supply of native timber in tropical regions combined with development incentives from national governments have driven rapid growth in the forest products industry in many developing countries. Contract farming schemes have emerged as an important mechanism to ensure an adequate supply of raw timber for processing. These contracts also encourage secondary forest establishment, which is argued to reduce harvesting pressure on ecologically valuable native forests. We explore whether there exists a potential for efficiency gains within the forest products industry given the current installed capacity in the state of Andhra Pradesh, India. We estimate a stochastic production frontier function for this industry based on Annual Survey of Industries data from 2010 to 2013. We present evidence that there is space for efficiency gains and that the marginal value product of wood as a raw input is high enough to justify the engagement of companies and farmers in wood supply agreements as a means to reduce pressure on native forests.
ISSN:0015-7473
2376-9637
DOI:10.13073/FPJ-D-20-00021