Cost minimization through the use of taungya system in pulpwood plantation establishment

The costs and benefits of the use of three labour alternatives: direct permanent, direct casual and taungya labour in Gmelina arborea pulpwood plantation establishment in Nigeria were investigated. Results show that cost per hectare is lowest with taungya labour and highest with permanent labour with savings in cost of as much as 30% and 47% by taungya labour over casual and permanent labour respectively. The net present value per hectare of investment is highest when taungya labour is used and lowest and negative with permanent labour. Also, the internal rate of return of investment is highest with taungya labour and lowest with permanent labour. The net present values and internal rates of return for Gmelina plantations calculated for the three pulp and paper mills in Nigeria show the same trend in favour of taungya labour.