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In order to calculate an appropriate level of forest fees or levies for the forestry sector in Suriname, it is first necessary to calculate the economic rent from forest operations. Once the economic rent is determined, the government can then decide how much of this rent should be collected by the state. The economic rent from forest operations is equal to the standing value of roundwood taken from Surinam's forests and can be calculated as the surplus of revenues from the sale of the roundwood at the mill or harbour (in the case of exported roundwood) less harvesting, extraction and transportation costs. This cost calculation should also take into account other forest management costs and include an allowance for normal profit. This report describes a model that has been produced to help staff of the Suriname State Forest Service (Lands Bosbeheer or LBB) and Foundation for Forest Management and Production Control (Stichting voor Bosbeheer en Bostoezicht or SBB) calculate roundwood production costs (and, hence, economic rent) from the raw data that has been collected about forestry costs in Suriname (see: Whiteman, 1999).

The remainder of this report is in three sections. Section two discusses the methodology used to calculate the total roundwood production cost from the raw information about costs collected as part of this study. Section three works through one detailed example of how to use the roundwood production cost model, using, as an example, a "typical" or "representative" forest operation in Suriname. It then discusses the sensitivity of some of the results to changes in the assumptions and underlying variables used in the model. The final section of the report summarises the general findings of the study and makes recommendations about how this work should continue to be updated by LBB or SBB.


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