Smallholder production and markets Smallholder production and markets of bolaina blanca (of bolaina blanca (Guazuma crinitaGuazuma crinita) )

in Ucayali, Peruin Ucayali, Peru

Jonathan P. Cornelius, L. Julio Ugarte-GuerraJonathan P. Cornelius, L. Julio Ugarte-Guerra

World Agroforestry Centre (ICRAF)World Agroforestry Centre (ICRAF))

Presented at Smallholder Timber Workshop, ICRAF, Presented at Smallholder Timber Workshop, ICRAF, Nairobi, Kenya, December 2004Nairobi, Kenya, December 2004

The Ucayali Region, Peru

Pucallpa

What is bolaina?What is bolaina?

Bolaina supply chain in PucallpaBolaina supply chain in Pucallpa

Sawmill / wood merchant

Smallholders’ secondary forest,

fallow

Industry in Pucallpa (lolly-

sticks, fruit packaging,

matches, etc

Private consumers in

Pucallpa

Middlemen (extrctn, freight)

180 stems ha-1

$90 ($0.50 stem-1)

5-6 logs stem-1 $405 ($0.45 log-1)

8 pieces sawntimber log-1 (2.5mx10cmx1.7cm)

$2,160 ($0.3 piece-1)

Source: CIFOR/CATIE, 1998

…….now available in Lima.now available in Lima

• Door frames, 3 pieces, Peruvian S/. 39.90 (USD 12.00)

Bolaina plantationsBolaina plantations

• Fast growth (on the right site) (Hdom=13.7m, 24 months)• FONDEBOSQUE is projecting large-scale production and

sale of bolaina seedlings in 2005• Incipient planting by wealthier farmers• Unrealistic projections in some quarters

• A standing tree of bolaina sells for around $0.50

• From a standing tree, around 40 pieces can be sawn

• Finished sawnwood sells for around $50/m3

(about 200 pieces)• 40 pieces are worth around $10

• Is plantation production of bolaina a viable option Is plantation production of bolaina a viable option for smallholder farmers?for smallholder farmers?

• If so, how?If so, how?

Financial analysesFinancial analyses

• 4 scenarios• Costs and revenues estimated from published and

unpublished sources1

• 400 final crop trees

1 CIFOR / CATIE, 1998. Curso - taller sobre metodologías de investigación en bosques secundarios.González, L.A. 2003. Evaluación técnico-económica de plantaciones de bolaina blanca en zonas inundables del Rio Aguaytía. B.Sc. Thesis, UNALM, Lima.Ugarte-Guerra, L.J. Unpublished data

Option 1Option 1

• Block plantation at 3m x 3m

• Weeding in first two years

• Thinning after three years, to final crop density of 400 trees ha-1

• Standing sale at 6 years of age

NDR@10%:-$646 ha-$646 ha-1-1

Percentage contributions of sources of costs and revenues to sum of absolute values of discounted costs and revenues (@10%) in a bolaina blanca

plantation harvested at 6 years age (standing sale)

Hole digging5%

Planting4%

Planting stock34%

Weeding34%

Thinning6%

Pruning5%

Timber income12%Cash income

at sale of $182

Food for thought for potential bolaina Food for thought for potential bolaina planters…planters…

• A bolaina seedling costs around $0.30

• A six year old standing tree sells for around $0.50

Bolaina supply chain in PucallpaBolaina supply chain in Pucallpa

Sawmill / wood merchant

Smallholders’ secondary forest,

fallow

Industry in Pucallpa (lolly-

sticks, fruit packaging,

matches, etc

Private consumers in

Pucallpa

Middlemen (extrctn, frght)

180 stems ha-1

$90 ($0.50 stem-1)

5-6 logs stem-1 $405 ($0.45 log-1)

8 pieces sawntimber log-1 (2.5mx10cmx1.7cm)

$2,200 ($0.3 piece-1)

Option 2Option 2

• Farmer fells, crosscuts trees himself

• Pays for transport of 2.5m logs to river port

• Average of five 2.5m logs tree-1

• Logs sold at $0.30 (<20cm) or $0.45 (>20cm)

NDR@10%:-$686 ha-$686 ha-1-1

0 1 2 3 4 5 6 7Slas h, fe ll and burn Ma rk ing, p lanting ho les (39.00)$ -$ -$ -$ -$ -$ -$ (39.00)$ Dis tribution and p lanting (30.00)$ -$ -$ -$ -$ -$ -$ (30.00)$ P lant purc has e (296.27)$ -$ -$ -$ -$ -$ -$ (296.27)$ Res pac ing -$ -$ -$ -$ -$ -$ -$ -$ Clean ing -$ (108.00)$ (108.00)$ -$ -$ -$ -$ (187.44)$ Spot c leaning -$ (60.00)$ (60.00)$ -$ -$ -$ -$ (104.13)$ thinning c os t -$ -$ -$ (71.10)$ -$ -$ -$ (53.42)$ P runing -$ -$ -$ (19.15)$ (19.15)$ (19.15)$ (19.15)$ (50.18)$ F e lling and c ros s c utting -$ -$ -$ -$ -$ -$ (305.99)$ (172.72)$ Trans port to roads ide -$ -$ -$ -$ -$ -$ -$ -$ Trans port to po rt -$ -$ -$ -$ -$ -$ (333.33)$ (188.16)$ Trans port to s awmill -$ -$ -$ -$ -$ -$ -$ -$ Trans port to indus tria l p lant -$ -$ -$ -$ -$ -$ -$ -$ Sa le o f troz as -$ -$ -$ -$ -$ -$ -$ -$ Cos t s awing s e rv ic e -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ Stand ing s a le -$ -$ -$ -$ -$ -$ -$ -$ Sa le tro z as roads ide -$ -$ -$ -$ -$ -$ -$ -$ Sa le tro z as port -$ -$ -$ -$ -$ -$ 769.70$ 434.47$ Sa le tro z as p lant -$ -$ -$ -$ -$ -$ -$ -$ Sa le s awnwood -$ -$ -$ -$ -$ -$ -$ -$

-$

TOTAL S (365.27)$ (168.00)$ (168.00)$ (90.25)$ (19.15)$ (19.15)$ 111.22$ (686.84)$

Inte rna l rate of re turn #NUM! Ne t pres ent Value @ 5% (703.38)$ (338.12)$ Ne t pres ent v a lue @ 10% (686.84)$ (321.57)$ Ne t pres ent v a lue @ 15% (670.12)$ (304.85)$ Ne t pres ent v a lue @ 0% (718.61)$ (353.34)$

Ho le d igg ing 39.00$ 1,121.31$ P lanting 30.00$ P lanting s toc k 296.27$ Weeding 291.57$ Th inn ing 53.42$ P runing 50.18$ F e lling and c ros s c utting 172.72$ Trans port to po rt 188.16$ Inc ome 434.47$ (686.84)$ -$

Yea r

Percentage contributions of sources of costs and revenues to sum of absolute values of discounted costs and revenues (@10%) in a bolaina blanca

plantation harvested at 6 years age (sale of 2.5m logs, in port)

Hole digging3%

Planting2%

Planting stock19%

Weeding19%

Thinning3%

Pruning3%

Felling and crosscutting11%

Transport to port12%

Income28%

Cash income at sale of

$770

Option 3Option 3

• Farmer pays for sawmill service, producing average of 8.6 unfinished pieces (2.5m x 10cm x 1.7cm) per log

• Pays for transport to Pucallpa

• Sells pieces at $0.15 each

Percentage contributions of sources of costs and revenues to sum of absolute values of discounted costs and revenues (@10%) in a bolaina blanca

plantation harvested at 6 years age (sale of rough sawnwood)

Hole digging1%

Planting1%

Planting stock10%

Weeding10%

Thinning2%

Pruning2%

Felling and crosscutting6%

Transport to sawmill6%

Sawing service13%Transport boards to

Pucallpa2%

Income47%

NDR @ 10%:-$113.52 ha-$113.52 ha-1-1,,IRR 6.4%IRR 6.4%

Cash income at sale of

$2600

Option 4Option 4

• Lengthen rotation to 9 years

• Average of 7 logs tree-1, and 12.9pieces log-1

Percentage contributions of sources of costs and revenues to sum of absolute values of discounted costs and revenues (@10%) in a bolaina blanca

plantation harvested at 9 years age (sale of rough sawnwood)

Income54%

Hole digging1%

Planting stock7%

Planting1%

Weeding7%

Thinning1%

Felling and crosscutting6%

Pruning2%

Transport to sawmill5%

Sawing service14%

Transport boards to Pucallpa

2%

NDR @ 10%:$385 ha$385 ha-1-1,,IRR=15.8%IRR=15.8%

Cash income at sale of

$5500

Added value - easier said than doneAdded value - easier said than done

Needs:Needs:• Stronger organization• Equitable alliances with

industry

ThanksThanks