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Costs and benefits analysis of Aquilaria species on plantation for agarwood production in Malaysia


Citation

Mamat, Mohd Farid and Yacob, Mohd Rusli and Lim, Hin Fui and Radam, Alias (2010) Costs and benefits analysis of Aquilaria species on plantation for agarwood production in Malaysia. International Journal of Business and Social Science, 1 (2). pp. 162-174. ISSN 2219-1933; ESSN: 2219-6021

Abstract

The establishment of Aquilaria plantation for agarwood production has been regarded by the planters as a green ‘gold mine’ of the future. This study examines the costs and benefits of planting Aquilaria spp. for agarwood production. The analysis shows that whether planting Aquilaria spp. integration with banana (Musa spp.) or planting Aqualaria spp. as a single crop for agarwood production, both options are viable. An investment return for planting Aquilaria spp. integrated with banana (Musa spp.) on 1,000 hectares of land is higher with an internal rate of return (IRR) of 54.85% compared with 38.49% for a single crop Aquilaria plantation. The Net present value (NPV) of investment at a 10% discount for 1,000 hectares integrated planting is RM185.6 million (1 RM=USD0.32 in 2008) while the option involving single crop Aquilaria plantation for agarwood production is RM153.6 million.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Center for Promoting Ideas
Keywords: Cost benefits anaylsis; Net present value; Agarwood; Production; Malaysia; Aqualaria species
Depositing User: Nabilah Mustapa
Date Deposited: 14 Aug 2018 08:42
Last Modified: 14 Aug 2018 08:42
URI: http://psasir.upm.edu.my/id/eprint/13810
Statistic Details: View Download Statistic

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