Lecture xiii
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LECTURE XIII. FORESTRY ECONOMICS AND MANAGEMENT. Introduction. If forestry is to contribute its full share to a more abundant life for the world’s increasing populations, foresters must become familiar with the economic and political forces that determine much of our way of life.

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Lecture xiii





  • If forestry is to contribute its full share to a more abundant life for the world’s increasing populations, foresters must become familiar with the economic and political forces that determine much of our way of life.

  • Forests are economic resources because they can be used to produce goods and services that people want to consume.



  • A forest can be used in more than one way hence the need for choices to be made

    • Timber may be harvested and alternatively used for making paper or fuel.

    • It might be kept standing to support recreation or aesthetic values

    • It might be saved for industrial use for future generations.

  • Thus a forest can generate two or more kinds of benefit simultaneously or sequentially e.g. industrial timber, recreation, livestock forage.



  • Forests are used in combination with some labour and other inputs, to help produce consumer products e.g.housing, paper and outdoor recreation.

    • This makes them valuable economic resources.

  • The more value in final goods and services that can be generated from a tract of forest, the more valuable the forest itself.

Forestry economics

Forestry Economics

  • Forest economics deals with those economic problems involved in owning, buying, selling taxing and managing forest land, whether it is used for producing water, wildlife, wood or other products

  • It is also concerned with:

    • The economic problems of growing, protecting, harvesting and marketing the products of that land

    • Examining the interplay of forces that determine the product or group of products a particular forest should produce.

Forestry economics1

Forestry Economics

  • The justification of forest economics as a specialization distinct from the general field of economics lies primarily in the detailed knowledge that the peculiarities of forestry require the general economist to acquire.

  • The approach to and use of economic concepts and principles in forestry must always be tempered by the biological nature of the resource itself and by the time span involved.

Forestry economics perspectives

Forestry Economics Perspectives

  • Choices to be made include:

    • How a forest will be managed

    • What goods and services will be produced

    • How much will be invested in enhancing growth.

  • Decision-making in forestry as in all businesses, involves making a choice from possible alternative actions.

  • Forestry economics deals with choices on how forests are managed and used as well as how factors of production (labour and capital) are used in forest production.

Role of forestry in the economy

Role of Forestry in the Economy

  • The aim of forest development is to intervene vigorously in the forest sector in an appropriate manner in order to maximize its contribution to the common goals of comprehensive development planning in Kenya.

  • These goals include:

    • Employment creation.

    • Improved management of human and financial resources.

    • Regional balance.

    • Expansion of agricultural and industrial production.

    • Conservation and management of natural resources.

    • Improved public welfare.

Role of forestry in the economy1

Role of Forestry in the Economy

  • The contribution of the forest sector to the common goals of national development is to satisfy the demand for forest products and environmental benefits in the local, national and international economies.

  • The contribution is made up of use and non-use values.

  • The use values include:

    • The net value of income that is earned from the consumption of wood products and ecotourism.

    • The value of soil and water conservation by the forests to the agricultural productivity and of the sequestration of carbon in mitigating global climate change.

Role of forestry in the economy2

Role of Forestry in the Economy

  • The option value of forest biodiversity that provides opportunities to utilize the growing stock at some stage in the future e.g. in the production of medicine and improvement of agricultural productivity.

  • The non-use values are the value to society of its satisfaction that forests are an inherent part of the environment, and the bequest value that the community collectively places upon its desire to preserve the inherent characteristics of the forests for the future generations.

Forest policy

Forest Policy

  • The purpose of any Forest Policy is to guide the sustainable management of the forest resources

  • The Policy defines forests ecosystems including their plant and animal biodiversity and ecological processes and functions.

  • It covers natural as well as plantation forests and includes forested land that has been deforested or degraded.

Forest policy1

Forest Policy

  • It addresses forests located on both public and private lands, and therefore encompasses State Lands, protected areas, Forest Reserves and lands that are in private ownership.

  • Such a policy should address forests on both public and private lands

Forest management objectives

Forest Management Objectives

  • Until recently, foresters were often concerned in managing forests for the sustained yield of only timber or woody products.

  • Sustainable management of forests was based on the principle of harvesting the wood at an average annual rate that is no greater than that at which the forest in question can grow.

Forest management objectives1

Forest Management Objectives

  • It is now realized that if sustainable forest management is concerned with the production of wood alone, then the other goods and services that can be obtained as well as the wider social issues that may be involved are neglected.

  • Management for sustainable wood production did in fact frequently meet these wider needs in the short term but this was coincidental.

Forest management objectives2

Forest Management Objectives

  • Since such practices were not included in the stated objectives, management was not done in a sustainable manner.

  • Wood production was sometimes in conflict with these wider functions of the forest, particularly where it competed with the needs of those whose traditional livelihood depended on the forest.

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