Cost-Benefit Analysis and Challenges of Implementing FSC Standards in Rubber Plantations in Southern Thailand

Abstract

This study examines the cost and benefit (i.e., income) of the Forest Stewardship Council (FSC) rubber plantations in Thailand. The study attempts to identify the challenges to the implementation of FSC standards in rubber plantations in the country. A total of 60 rubber farmers in two Southern provinces, namely, Songkhla and Rayong, were interviewed through a standardized questionnaire to gather primary data. The study found that small-, medium-and large-sized FSC rubber plantations were worth investing in. All sizes of rubber plantations had similar values of benefit cost ratio (BCR). It was also found that the values of the discount payback period (DPP) of the three forms of FSC rubber plantations were 9-12 years, while the large rubber plantations had the highest internal rate of return (IRR) (19.0%). It implies that the large-size plantations had the highest values. The rubber farmers in the study area reported that they are facing a number of problems and hardships in implementing FSC standards, lacking knowledge and understanding of FSC, especially for preparing documentation. Therefore, the Thai government should take proper policy initiatives to remove all the problems and barriers in implementing FSC standards for the sustainable rubber production in the country.

Effectiveness and Economic Viability of Forest Certification: A Systematic Review

“…In Asia, studies report positive cost-benefit ratios for FSC-certified plantation forests. For example, in Thailand, the production cost and return of FSC rubber (Hevea) plantations were similar for all sizes of rubber plantations, with the larger plantations having the highest rates of return [115]. In Vietnam, performance, economic and financial efficiencies for FSC-certified Acacia spp.…”

“…Studies that assessed changes within extended time frames (>5 years) were rare and based analysis on regeneration monitoring [81], changes in the forest canopy [84], above-ground biomass [52], or forest cover [82]. In the field of economic viability, analysis of the long-term economic effects of forest certification were scarce, indicating time frames of 5-6 years [119] and 9-12 years [115] to break even on the investment in forest certification. Nevertheless, several studies based on perceptions underlined the importance of time for generating economic benefits [114,129].…”

Development and validation of a scale to measure the benefits of Forest Stewardship Council (FSC) certification

“…2022). In general, companies take about eleven years to achieve a return on investment (Kongmanee et al . 2020).…”

“…In order for the principles and criteria to be internalized, investments are needed that take time to be returned, often making certification unfeasible for small companies (Frey et al 2022). In general, companies take about eleven years to achieve a return on investment (Kongmanee et al 2020). As highlighted by Scudder et al (2018), small companies can spend around US$ 750 thousand if they want to internalize FSC practices.…”

The Comparison of Household Economic Level from Conventional to Organic Rubber Farming farming to support Sustainable Development in Agriculture

“…The level of education also has an effect on farmers in carrying out their farming. Higher education can assist farmers in deciding if they farmer is confronted by various obstacles associated with farming activities [30]. Generally, the formal education level pursued by conventional and organic rubber farming farmers is still relatively low [31].…”