Australian tree species selection in China

The Australian Centre for International Agricultural Research (ACIAR), through collaborative projects with the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia, and the Chinese Academy of Forestry (CAF), has been involved in tree species selection trials in southern China since 1984. The trials were aimed at identifying fast-growing species of Eucalyptus, Acacia and Casuarina. The Chinese have been planting Australian tree species for more than 100 years, but before the ACIAR project there had been little progress in determining which species and provenances would be best for the local climate and soils. This paper presents an assessment of the economic impact of research undertaken under two ACIAR-supported projects. Adoption of some new introductions has been much greater and sooner than previously anticipated. Using a 5% discount rate, base-case benefit estimates suggest the future stream of economic gains to China have a net present value of $A122.3 million in 1996 dollars. The internal rate of return is 35%, indicating the research was a particularly valuable investment. While some uncertainty inevitably remains with this estimate, enough time has passed to be confident about these results. The benefit estimates are large by most standards, particularly for forestry research, which is usually characterized by long lag periods between the research, adoption and harvesting phases. In this case research and adoption lags were short, productivity gains large and adoption levels high. The Chinese are currently planting more than 85 000 ha of the new introductions annually. In fact plantations of the new introductions are already being harvested. The ‘in-hand’ net present value of the projects to 1999 is A$3.8 million ($1996). This indicates that substantive net economic benefits from the research have begun to flow.