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Timber Development Opportunities in the Republic of Vietnam

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Timber Development Opportunities in the Republic of Vietnam FDD FIELD REPORT 46 JUNE 1974 TIMBER DEVELOPMENT OPPORTUNITIES IN THE REPUBLIC OF VIETNAM International Development Center ° Economic Research Service U.S. Department of Agriculture cooperating with U.S. Agency for International Development and the Vietnam Ministry of Agriculture and Land Development ABSTRACT The forest land of South Vietnam has suffered from centuries of neglect and abuse. While this still continues, a substantial area of commercial-size timber remains, mostly hardwoods. If this timber is carefully managed and supplemented by extensive regeneration of de­ forested land, timber products can make a major contribution to Vietnam's economy. To accomplish this will require large, intensive, and consis­ tent forestry and timber development efforts. Keywords: Vietnam, Southeast Asia, timber, resource development, forestry, policy, industrial development, developing countries, exports. L Note: All values in this report are expressed in U.S. dollars. TIMBER DEVELOPMENT OPPORTUNITIES IN THE REPUBLIC OF VIETNAM by: S. Blair Hutchison (Study Leader) U.S. Forest Service David R.Schumann 7-r U.S. Forest Service .V L,, and Harold R. Evans 0 Timber Industry Consultant William S. Hoofnagle Export Studies Coordinator USDA Economic Research Service PREFACE This is the second of two reports dealing with the timber industry opportunities in South Vietnam. The first, Export Opportuni­ ties for Vietnam Timber Products In Japan, Korea, Taiwan and Singapore (FDD Field Report 42, February 1974), discusses the timber market out­ look in the Far East. The following discussion examines the timber re­ source situation in South Vietnam, development opportunities problems involved, and policies and programs required to take full advantage of the timber industry potential. These studies, along with similar studies of fisheries and agriculture, are being conducted by the Economic Research Service of the U.S. Department of Agriculture (USDA) for the Vietnam Mission of the U.S. Agency for International Development (USAID),which is financing the projects. The primary purpose of the studies is to ex­ plore export opportunities available to Vietnam; however, attention has also been paid to broader development opportunities *and problems. These analyses have been under the supervision and leadership of USDA/USAID advisor Shelby A. Robert. Information and counsel have been received from many sources. We are particularly grateful to the assistance given by Shelby A. Robert as well as that received from six foresters from the U.S. Forest Service stationed in South Vietnam: Jack B. Shumate, Walter Pierce, Carl W. Swanson, John H. Murray, Jr., Mervin E. Stevens, Stuart H. Slayton, and Roy C. Gandy. ii CONTENTS Summary ............................................................ V Introduction ....................................................... 1 Background ......................................................... 2 Future Timber Needs ............................. ................... 6 Domestic Demand .................... 6 Export Opportunities ......................................... 9 South Vietnam's Timber Supply Outlook With Present Controls and Practices ................................... 11 South Vietnam's Timber Supply Outlook With Intensified Timber Management and Utilization .................... 12 Growth Possibilities ......................................... 12 Utilization Requirements ..................................... 14 Physically Obtainable Yields in the Next Few Decades ........................................... 15 The Income Potential ......................................... 16 The Bold Assumptions ......................................... 17 The Feasibilities .................................................. 19 Industrial Feasibility ....................................... 19 Forestry Feasibility ......................................... 27 Institutional Feasibility.................................... 28 Secondary Industry ................................................. 29 A Development Program .............................................. 30 Goals ........................................................ 30 Land Use Planning ............................................ 30 A Development Strategy ....................................... 31 Obtaining Strong Supervision ................................. 31 Developing Technical Capability .............................. 32 Foreign Assistance ....... .................................... 32 Immediate Steps ............................................... 33 Appendix A--Projecfions of Timber Stand and Timber Product Output in South Vietnam Under Two Assumptions of Timber Management and Utilization ....................................... 35 Appendix B--Projected Value of Timber Product Output in South Vietnam ................................................... 43 Appendix C--Species of Trees in South Vietnam and Their Uses........44 Appendix D--A Proposal For Evaluating South Vietnam's Forest Resources for Utilization ................................. 90 Appendix E--The Investment Opportunity in Several South Vietnam Timber Development Options ....................................... 95 iii SUMMARY Forest land is the most extensive of the Republic of Vietnam's land resources. Between 13 and 14 million hectares of the total land area of 17 million hectares can be classified as forest in that it bears or once bore trees and has not been converted to permanent culti­ vation or settlement. Allowing for the expanded needs of agriculture and other land uses it seems likely that at least 9 million hectares in South Vietnam wil in the long run,be best suited for timber growing. In a productivity sense, the forest is presently a diminishing and deteriorating resource. Centuries of shifting agricultvure, fires, destructive cutting and, in recent decades, warfare have ta'.en a heavy toll of timber and timber growth. Millions of hectares that once bore mature stands of merchantable and potentially merchantable timber now are covered with scrub vegetation. There still remains in the hinterlands, however, a sizable area of productive forest--apparently totaling about 6.4 million hectares. This forest can contribute substantially to the develop­ ment of South Vietnam if it is properly used and managed. If, in addition, the timber productivity of the rest of the land best suited for timber growing is restored, the total contribution of the forest can be remarkably high. The annual output of timber products in South Vietnam is presently worth about $100 million. It could be raised to $1 billion or more by the end of the century. For a country trying to develop an economic foothold, this is a very important. opportunity. At this stage, however, a $1 billion output of forest products has to be regarded as but a theoretica. possibility because of the almost total lack of forestry and the limited constructive industrial development up until now. In pondering the decision as to what priority should be given to forestry and timber industry development on a national scale several realities are of exceptional importance. The population of South Vietnam is likely to double the present 20 million people by the end of the present century, creating a great additional burden on economic development. Barring the discovery of great new mineral wealth, the forest land is the principal nonagricultural resource upon which economic growth can be based. Because the torest land is widely dis­ persed, it offers a unique opportunity to strengthen South Vietnam's rural economy and attract more people away from the cities to the country where the quality of life can be greater and energy require­ ments less. Although the forestry potential is excitingly large, there is a question as to how much of that opportunity can be captured under the circumstances surrounding South Vietnam today. It requires establish­ ing a control over the forest (nonexistent at present) and the institution v of highly disciplined timber management. It requires forebearance in the use of the existing sawtinber to spread it over the next several decades, along with a large tree planting program to more quickly harness the enormous production potential of the forest. Timber industry expansion must be carefully designed if it is to do the most good. What it boils down to is that, although South Vietnam can make some big economic gains by developing the forest resource, the task will not be easy. An aggressive, continuing, and consistent public effort will be required. Six issues should have top priority at this time: 1. An official policy decision is needed soon, specifying the reliance that will be put on timber development in South Vietnam's effort to gain economic muscle. Without such a goal it will be impossible to have a consistent and efficient program of development. 2. Land-use commitments must be made soon to minimize misuse, destruction, and wasted effort. Land classification based on soil and hydrologic characteristics, community needs, and other factors is necessary to definitely establish which areas are to be used for timber growing and which for other purposes. 3. The most capable brains available should be assigned the task of outlining a long-range strategy, in all of its ramifications, for protecting and managing the forest and guiding industrial development. The quality of such blue­ prints fcr future action will be a crucial factor in the success of any national effort. 4. The governmental structure for forestry and timber
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