Economics of Eucalyptus Plantations in Terai, Nepal

Eucalyptus camaldulensis (locally known as Masala) is a fast-growing exotic tree species extensively planted in Nepal for timber, poles, fuelwood, and oil. In the past, this species has been managed primarily for pole production under a nine-year rotation system. However, due to a decline in pole demand, many Eucalyptus stands now remain unharvested beyond their planned rotation age. This study analyzed the economic viability and growth performance of E. camaldulensis in the Sagarnath Forestry Development Project, encompassing 13,512 ha area in Sarlahi District, Madhesh Province, Nepal. Data were collected from the plantations site covering seven age gradation (6, 8, 10, 12, 14, 18, and 22 years) through forest inventory and supplemented by the project records. The results of benefit-cost analysis showed that the existing practice of pole production with a nine-year rotation period and three coppice cycles per stump is economically optimal with a benefit-cost ratio of 1.86 and an internal rate of return of 21%. There is a marked decline in stand productivity beyond 14 years resulting in low financial returns. Based on these findings, the study suggests to adopt a 14-year rotation period for timber production, aligning with the existing plantation forest management practices to enhance both biological and economic sustainability of E. camaldulensis plantations in Nepal.