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Economics of Forest Resources

Course developers

Course abstract

In the study course must to learn the importance of forest resources and economy in the production of products. In the course must to learn the theory, what ir forest as a capital value. In forest valuation, it is necessary to economically analyze the return of investment now and in the future (it is important evaluate the followwing factors – time, profit, inflation, risk etc.). In the course must to learn the applicable regulations, i.e. taxes and the assessment of the costs of forestry activities, such as the costs of forestry, logging, construction of forest infrastructure and transportation of resources from the forest to the processing place. In the study course must to learn the most important methods of determining the value of forest and non-wood resources.

Learning outcomes and their assessment

Acwuired knowledge about the economic evulation of forest and non-timber resources, the forest as a capital value and its return of invesment in the forest (now and in the future), as well about the important factors in the forestry – time, profit, inflation and risks and different forest evalution methods.
Skills – the students is able to formulate and determinē the valua of the forest, to make a economic calculations after theory – discussion in classes, practical work and problem solving, questins in the tests and exam.
Competence – the student`s ability to evaluate the forest valua determination methods and distinguish them, to analyze the most important influencing factors in the development of forestry – practical work (calcuations), a report on the influencing factors in the forestry, questions in tests and exam.

Course Content(Calendar)

1.Forest economics and its diferences (1h).
2.Forest aconomic resources and their use (1h).
3.Forest products and their users (1h).
4. Relationship of forest economy with micro and macro economy (1h).
5. Time factor in forest economy (1h). Practical works (2h).
6. Wood supply and demand (1h).
7. Forest as capital value (1h). Practical works (2h).
8. Economic substantiation of forest land use (1h).
9. Investment analysis in forestry (1h).
10.The role of inflation and risk factor in forest economy (1h). Practical works (2h).
11.Forest value determination methods (1h). Practical works (2h).
12.Forest non-timber resource evaluation methods (1h).
13.The role of taxes and management conditions in the forest economy. (1h). Practical works (2h).
14. Multifactor decision making on forest use (1h).
15.Forestry and regional development (1h).
16.Summary and evaluation (1h). Practical work (presentation of reports) (4h).

Requirements for awarding credit points

All practical work must be completed. A report must be submitted and presented. Must have a written test and exams (calculations).

Description of the organization and tasks of students’ independent work

In practical work students must learn the following topics:
• determination of capital value (8h);
• determination and calculation of net present value for forest stands, i.e. plantation stands (8h);
• calculation of return on investment at different composting / discount rates (4h);
• determination and calculation of time and profit factor (8h);
• determination and calculation of the inflation factor (4h);
• determination and calculation of risk factor (4h);
• application and assessment of the applicable tax rate (8h).

Criteria for Evaluating Learning Outcomes

As a result of evaluation, it is important that the student's attendance is over 70% of all lectures.
In the study course, students' knowledge assessment takes in 3 parts, i.e. during the semester there are:
• complete a theoretical test on the topics taught in the course, where oral or written answers are successful, if at least 40% of the questions are answered correctly;
• prepare a report in accordance with the MF methodological regulations in the development of the final thesis and defend it in the form of a presentation;
• a work (exam) must be written where the written calculations are successful if at least 40% of all tasks have been solved correctly.
The final grade consists of a weighted average grade (on a 10-point scale) – from a visit (10%), a tests (20%), a report (40%) and an exam (30%).

Compulsory reading

• Iesalnieks J. Meža ekonomikas pamati. Rīga: SIA “ET CETERA”, 2002. 92 lpp.
• Grīnfelds A. Meža darbu izmaksas: mācību līdzeklis. Jelgava: LLU, 2004. 31 lpp.
• Klemperer W. D. Forest resource economics and finance. New York etc.: McGraw-Hill, Inc., 1996. 551 p.
• Gregory G. R., Resource economics for foresters. New York etc.: John Wiley &Sons, Inc., 1987. 477 p.

Further reading

• Dreimanis A. Mežsaimniecības pamati. Jelgava: LLU Meža fakultāte, 2016. 219 lpp.
• Kopšanas ciršu rokasgrāmata. Rīga: A/s “Latvijas valsts meži”, 2008. 108 lpp.
• Meža enciklopēdija. Autoru kolektīvs J. Broka vadībā. Rīga : Zelta Grauds.

Periodicals and other sources

• Žurnāls “Baltijas Koks”. ISSN 1407-6667
• Laikraksts “Meža Avīze”. ISSN 1407-6187

Notes

The study course is included in the 4th semester (full-time studies) and 6th semester (part-time studies) of the Forestry Faculty professional higher education bachelor study program “Forest Engineer” and in the 5th semester (full-time studies) of the Forestry Faculty academic education bachelor study program “Forest Science”