Forest plantation owners' willingness to pay for hybrid nursery stock: The case of Acacia hybrids in Central Vietnam

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Highlights

  • Genetically improved nursery stock is crucial in improving the quality of forest products.

  • Vietnamese forest plantation owners are willing to pay a premium for echnologically-improved Acacia hybrid nursery stock.

  • Education and income had a significant influence on the forest plantation owners' WTP.

  • Thua Thien–Hue Province recorded the highest WTP for the Acacia nursery stock.

Abstract

The increasing demand for forest resources in Vietnam has increased the need for investment in research and development in the forestry industry. Recent research has investigated the viability of introducing hybrid nursery stock to forestry plantations in Vietnam as a strategy to meet the increased demand for forest products. The study reported in this paper measured forest plantation owners' willingness to pay (WTP) for technologically-improved Acacia hybrid nursery stock in Vietnam using a double-bounded dichotomous choice contingent valuation method. The study was based on 188 face-to-face surveys with forest plantation owners in three provinces in Central Vietnam. The results indicate a WTP value of VND855 (US$0.037) in standard estimation and VND794 (US$0.034) in certainty-adjusted estimation per Acacia hybrid nursery stock. These figures, respectively, represent a 70% and 58% higher WTP value for Acacia hybrid nursery stock than the base price used in the research (VND500). Among the factors analysed, the forest plantation owners' total income, level of education, income from forestry, experience and amount of time spent each year on forestry activities had a positive impact on the WTP for Acacia hybrid nursery stock. These findings can guide the formation of governments to enhance the development of technologies in Vietnam's forestry industry.

Introduction

Forest plantations play a critical role in the supply chain of the forestry industry, with plantations supplying about 30% of the global demand for round wood (Barua et al., 2014; Hung et al., 2016). The increasing demand for forest products has led to an expansion of forest plantations. In order to ensure financial benefits, forest plantation owners have to integrate production with well-managed supply chains and obtain the required certifications for timber. The attainment of these requirements is highly reliant on the adoption of high-quality nursery stock in their forest plantations. In the forestry industry, the assessment of nursery stock quality is based on the physical, physiological and genetic attributes of the stock that in turn affect the growth performance of the trees (Maraseni et al., 2017a). There is strong research evidence that the use of genetically-improved nursery stock can bring about significant positive impacts on both the size and quality of forestry products (Nambiar and Harwood, 2014; Harwood et al., 2015; Nirsatmanto et al., 2015; Sedjo, 2006). However, research and development on genetic improvements in forestry production is very expensive (Harwood, 2011) and substantial time is required to deliver an improved product due to long rotation periods (Dong et al., 2014). Forest plantation owners need to wait for at least four years to begin to gain income from plantations (Thulstrup, 2014). The management practices adopted by nurseries also influence the growth performance; for example, the container types or the mineral nutrient status of the nursery stock, can significantly influence the growth performance of the trees (Oliet et al., 2005; Close et al., 2010).

Vietnam has a booming forestry industry. In 2017, it ranked as the second in Asia (after China) and the sixth in the world for wood product exports, and the country earned around US$8 billion by exporting wooden furniture (IUCN, 2018). More than a quarter of the total forest area in Vietnam is planted forests, covering over 3.5Mha. It is expected that the land area will have increased to 4.15Mha by 2020. Acacias are ranked as the most important forestry plantation tree in Vietnam (Harwood, 2011) with 500,000 ha of Acacia hybrid plantations in existence in 2015 (Dinh Kha et al., 2012). Although Acacia hybrids are planted in short rotation, their potential productivity is high: they are faster growing, less susceptible to diseases and more adaptable to poor quality soil compared to other species (Kim et al., 2008, Kim et al., 2011; Hung et al., 2016). Moreover, the ability of Acacias to fix nitrogen improves soil quality and this enhances the long-term sustainability of plantations. Therefore, especially in Asia, and including Vietnam, Acacias are preferred over Eucalyptus, Styrax tonkinensis or other forestry plants (Kim et al., 2011). The wood of the Acacia hybrid is used for diverse purposes, from woodchip exported to pulp mills, to furniture (Bon and Harwood, 2016).

The forestry industry of Vietnam is supported by a number of government policies and programs, such as the distribution of forestland to local households, and support mechanisms to improve the productivity and quality of plantations. Among these supports, nursery stock projects and genetic improvement programs are highly regarded investment projects (Maraseni et al., 2017b). The viability of these projects relies on the premiums that the forest plantation owners are willing to pay for technologically-improved nursery stock. There are few studies investigating forest plantation owners' willingness to pay (WTP) for improved products. Therefore, the aim of the study reported in this paper was to estimate the WTP for high-technology Acacia hybrid nursery stock among forest plantation owners in Central Vietnam, and then to investigate the factors that influence the WTP. Thereby, we aimed to fill the current knowledge gap and provide valuable information for nurseries, the Vietnamese government and other stakeholders based on the WTP for Acacia hybrid nursery in Central Vietnam. In the study, the WTP value was estimated by applying the double-bounded dichotomous choice contingent valuation method (DBDC CVM) as it is considered to be more statistically efficient than the single-bounded dichotomous choice contingent valuation method (Kanninen, 1993). The DBDC technique was also preferred over the multiple-bounded question format primarily to avoid minimum efficiency gains in the third round or more, to avoid causing greater biases, and to minimise associated costs and time.

Section snippets

Literature review

The research employing contingent valuation method (CVM) within the forestry context is mainly twofold, with one strand focusing on public forestry and the other strand focusing on commercial forestry. The CVM outcomes of the studies in the two strands are distinct from each other. Since its first application in 1963, the CVM has been widely applied in research on public forestry, including forest conservation and management (Kilgore et al., 2008; Tilahun et al., 2011; Amiri et al., 2015;

Theoretical model

The WTP estimation is a widely applied method in valuing non-marketable goods and services such as environmental services. The present study aimed to explain how much the forest plantation owners in Vietnam were willing to pay for technologically-improved Acacia nursery stock. The study used an approach based on the standard theoretical model of the dichotomous choice question framework. The WTP is a latent variable, where an individual i is willing to pay for the provision of a good or a

Results and discussion

The characteristics of the sample used in the analysis are presented in Table 2. In Vietnam, males are more involved with the forestry industry than females; according to the list obtained from the Forestry Association, 73% of the registered forest plantation owners were males. Consistent with that, male respondents represented more than three-quarters of the sample in each of the three provinces. On average, the majority of the respondents were over 40 years of age (62.2%), had finished their

Conclusion

It is argued in the literature that, given the low price, forest plantation projects in developing countries have used low-quality nursery stock and this has led to the poor growth performance of those forest plantations (Takoutsing et al., 2014). This pattern is well evident in Vietnam where there is a shortage of high-quality wood. Over 80% of the current round wood supplied from planted forests in Vietnam is small-sized and low-quality, resulting in low financial benefits to forest

Declaration of Competing Interest

None.

Acknowledgement

This study was conducted while the first author was a Master of Agribusiness student at the University of Queensland, Australia. The authors would like to acknowledge the financial support received from the School of Agriculture and Food Sciences, The University of Queensland. We thank the two anonymous reviewers for their constructive comments.

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