A cash flow model to compare coppice and genetically improved seedling options for Eucalyptus globulus pulpwood plantations

Coppice can provide a cheap alternative to replanting in the second rotation in Eucalyptus globulus Labill. plantations. However, replanting with genetically improved stock may provide a more profitable alternative. A discounted cash flow model was used to compare the profitablity of coppice and seedling crops in second rotation E. globulus pulpwood plantations, using incremental net present value (NPV). Using the model presented in this paper as a framework it is possible to say that a gain of 20% over the original seedling crop in dry matter production from second rotation seedlings through genetic improvement and provenance selection would result in equivalent NPV for second rotation seedling and coppice crops. Sensitivity analysis showed that incremental NPV is strongly affected by the level of genetic gain available (and therefore the genetic quality of the first rotation stock relative to the available genetically improved stock), and the productivity of coppice relative to the first rotation crop. Any reduction in the basic density of coppice reduces the level of genetic gain required to make replanting with improved seedlings economically justifiable. # 2004 Elsevier B.V. All rights reserved.