Costs needed for one acre gaharu plantation

Nowadays, gaharu trees are planted at a distance of 6 ft X 6 ft which is also the closest planting distance suggested. So, in order to show the costs needed for 1 acre of gaharu plantation, planting distance of 6 ft X 6ft will be assumed where 1,100 trees are expected to be planted in 1 acre plantation. So, costs included in this calculation are the costs of seedlings, transplantation, upkeep and maintenance, inoculation and harvesting. 

Local species gaharu trees are expected can reach to a diameter with at least 15 cm after been planted for 4 - 5 years. For China's species, its growth rate is higher thus it is expected can reach with at least 15 cm diameter when planted for 3 years. So, we will calculate the costs with five years as a round and the costs needed in every year. This calculation is based on China's species gaharu which can reach 15 cm diameter after planted for 3 years. Hence, gaharu trees inoculation is expected to happen on the 3rd year, after it reached to a diameter of 15 cm. For local species, inoculation is expected to be happening on 4th or 5th year. The only difference is the upkeep and maintenance that need to be prolonged for a year or two. 

So, costs per acre needed in five years. 

Description	2013	2014	2015	2016	2017
Type of costs	RM	RM	RM	RM	RM
Plantation site costs
I) Seedlings (RM 20.00/seedling)	22,000.00	-	-	-	-
II) Transplantation (RM 3.00/seedling)	-	3,300.00	-	-	-
III) Upkeep and maintenance (RM12.50/seedling/year)	13,750.00	13,750.00	13,750.00	13,750.00	-
Biotechnology costs
I) Inoculation (RM 250.00/tree)	-	-	275,000.00	-	-
II) Harvesting (RM 150.00/tree)	-	-	-	-	165,000.00
Total cost/annual	35,750.00	17,050.00	288,750.00	13,750.00	165,000.00

So, the total costs needed in five years for one acre gaharu plantation will be 

RM 520,300.00

As reported by Suharti et al. (2011), productivity of gaharu tree with a diameter between 15 cm to 25 cm will produce and average of 0.75 high quality gaharu and 4 kg low quality gaharu. However, we will only assume a gaharu tree can produce 1kg low quality gaharu with a selling price around RM 2,000/kg. So, the profit derived from this calculation is very prudent. So, sales can be obtained from one acre gaharu plantation will be:

Description	The total amount of gaharu can be obtained in one acre	Total sales
Gaharu wood chips (RM 2,000/kg)	880 kg/acre*	RM 1,760,000

*Only 80% of gaharu trees are expected to produce gaharu. 

So, the net profit from one acre gaharu plantation is: 
= RM 1,760,000.00 - RM 520,300.00
= RM 1,239,700.00

Thus, the total net profit can be obtained from one acre gaharu plantation is 

RM 1,239,700.00

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Email: hopebiotech.jong@gmail.com