This paper is based on FAO's Forestry Paper 17 (Economic Analysis of Forestry Projects, or EAFP), produced by the authors back in 1979. The original document was published during a time when there was great enthusiasm in the international development community concerning the progress being made in social cost-benefit analysis. Interest in this subject has continued. Some excellent, practical publications have summarized and organized thinking over the past decade in the area of economic analysis of projects in general (cf. the World Bank's 1991 publication, The Economics of Project Analysis: A Practitioner's Guide, by William Ward and Barry Deren). We also have attempted to reflect the changes in thinking that have taken place over the past ten years in the specific area of economic assessment of forestry project impacts; and we have attempted to bring in those ideas which can practically be applied under field conditions (as distinct from longer term research conditions).
Thus, what appears in the following pages is a blend of academically ideal and time-worn, field tested approaches. The material presented thus is adaptable to practice in the field. The specific applications will have to reflect the various social, economic and political objectives found in different countries and should be used in an assessment framework that is consistent with institutional objectives and practice.
The Guidelines are written for government and nongovernmental development agency planners and related professionals in the forestry sector. Ideally, the readers are familiar with forestry projects of various types, have had at least an elementary exposure to economics, and understand the realities of planning in their own national contexts. A secondary audience is students in universities and professional courses and workshops who want to develop skills in economic assessment methodology as applied to forestry.
The present paper focuses mainly on public sector assessment needs and processes and brings in private individual and corporate assessment needs only as needed in the context of public sector planning.
The economic assessment process and procedures described in these guidelines already are being applied in a number of countries; and there are country level assessment guidelines for forestry already in existence. One might thus ask: “Why another set of guidelines?” There are several answers. First, while the process may be in use in the forestry sectors of many countries, there is no overall, systematic description of the process that is readily available for use at the level of expertise and breadth aimed at here. Second, a clear specification of procedure is essential to justify decisions based on economic criteria for controversial forestry projects. These guidelines hopefully help to provide such a clear specification. Third, in many countries the economic assessment process is only partially put into practice. The present guidelines provide a systematic framework for putting the whole process into practice. Fourth, systematic presentation of the economic assessment process as applied to forestry can be valuable for those who do not presently understand and apply it.
