Cost of Forest Insurance in the Economic Viability of Eucalyptus Plants

Abstract

The objective of this study is to carry out economic and risk assessment of eucalyptus plantations located in Minas Gerais, considering the influence of the cost of forest insurance, evidencing its impact on the project. The costs of implementation and driving come from eucalyptus plantations located in the Jequitinhonha Valley, Minas Gerais. The cost of forest insurance was obtained through a simulation of a quote from an insurer. For the economic evaluation, the Net Present Value (NPV), the Internal Rate of Return (IRR) and the Equivalent Periodic Benefit (EPB) were used. The risk sensitivity analysis was performed by the Monte Carlo method. The economic analysis was considered viable by all indicators used in all three situations. However, by the analysis of investment risk, we have a probability of 11.5% chance of NPV being below zero in situation 1, 18.5% in situation 2 and 25% in situation 3. The cost of Forest insurance increases the likelihood of negative value for economic indicators, as it increases the cost of the project, but it was input that less influenced the final value of the NPV. The government grant reduces the likelihood of investment risk as it lowers the cost of forest insurance.

Coffee Dryer With Dehydrated Air: A Technical and Economic Viability Analysis

“…Analysing scenarios with variation in productive systems can measure sufficient economic results for decision-making related to the study (Pereira et al, 2018;Oliveira et al, 2016;Araújo et al, 2018). In the research, the indicators corroborate the implementation of business strategies and the direction of coffee grower investments.…”

Forest Insurance for Natural Events: An Overview by Economists

“…The first articles in the database are [45] and [47]. However, the literature also covers other countries such as Spain [23], Italy [25], China [21,29,36], Sweden [44], Slovakia [8,46], Germany [16,33], Ghana [38], Brazil [24,40], Portugal [17], Honduras [42,43], Japan [50], France [19,22,30], Switzerland [35,53] and New Zealand [6]. At the continental level, 13 articles related to Europe, 4 to Asia, 9 to North America, 4 to South America, 1 to Oceania and 1 to Africa.…”