Site conditions have an impact on compensation payments for the loss of tree species in mixed forests

Selective browsing of saplings is an unavoidable consequence of high density of wild game and can lead to stand homogenization. To ameliorate the effects of economic risks associated with decrease in species diversification - for example, decreased flexibility in relation to the timber market or increased susceptibility to calamities - compensation payments can be helpful. The risk components in forest economics are now well described. However, even though soil and climate conditions are among the most important factors determining financial gain or loss from forest management, differences due to variations among forest sites are rarely considered in economic analyses. In order to consider the impact of site variation on the financial effects of game browsing, this study focused on financial results of forest stand models considered representative for average site conditions for each of the 15 growth regions in Bavaria, Germany. Using the Silva 2 growth model, the average growth of spruce (Picea abies (L.) Karst.) and beech (Fagus sylvatica L.) was simulated to consider return-risk ratios of mixed and homogenized stands - thus to compare target and deviating states. The investigation was divided into two parts: first, as many forest decisions are dependent on financial outcomes, the analysis of the financial impact of varying site conditions began by calculating the annuities. Second, it was important to see what influence site conditions might have on compensation payments. The results showed that fluctuations in spruce growth rates among 15 growth regions of Bavaria were much higher than those for beech. Because of the loss of beech, when calculating necessary risk compensation levels, the results were largely dependent on the variations in beech growth and the financial risk level of spruce - both due to differences in site quality.