Citation
Rehabilitation of degraded tropical forests in India's Western Ghats: silvicultural and socio-economic implications of multiple species plantations

Material Information

Title:
Rehabilitation of degraded tropical forests in India's Western Ghats: silvicultural and socio-economic implications of multiple species plantations
Creator:
Flickinger, Donald Ian, 1956-
Publication Date:
Language:
English
Physical Description:
svi, 199 leaves : ill. ; 29 cm.

Subjects

Subjects / Keywords:
Brahmins ( jstor )
Forest communities ( jstor )
Forest products ( jstor )
Forest resources ( jstor )
Forestry research ( jstor )
Forests ( jstor )
Seedlings ( jstor )
Species ( jstor )
State forests ( jstor )
Understory ( jstor )
Dissertations, Academic -- Geography -- UF ( lcsh )
Forests and forestry -- India ( lcsh )
Geography thesis, Ph.D ( lcsh )
Genre:
bibliography ( marcgt )
non-fiction ( marcgt )

Notes

Thesis:
Thesis (Ph.D.)--University of Florida, 1997.
Bibliography:
Includes bibliographical references (leaves 190-198).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by Donald Ian Flickinger.

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
028627359 ( ALEPH )
39526512 ( OCLC )

Downloads

This item has the following downloads:


Full Text













REHABILITATION OF DEGRADED TROPICAL FORESTS
IN INDIA'S WESTERN GHATS:
SILVICULTURAL AND SOCIO-ECONOMIC IMPLICATIONS
OF MULTIPLE SPECIES PLANTATIONS


















By


DONALD IAN FLICKINGER


A THESIS PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY



UNIVERSITY OF FLORIDA

1997




REHABILITATION OF DEGRADED TROPICAL FORESTS
IN INDIA'S WESTERN GHATS:
SILVICULTURAL AND SOCIO-ECONOMIC IMPLICATIONS
OF MULTIPLE SPECIES PLANTATIONS
By
DONALD IAN FLICKINGER
A THESIS PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
1997


Copyright 1997
by
Donald Ian Flickinger


With the base of ignorance, reaction arises; with the base
of reaction, consciousness arises; with the base of
consciousness, mind and body arise; with the base of mind and
body, the six senses arise; with the base of the six senses,
contact arises; with the base of contact, sensation arises; with
the base of sensation, craving and aversion arise; with the base
of craving and aversion, attachment arises; with the base of
attachment, the process of becoming arises; with the base of the
process of becoming, birth arises; with the base of birth, aging
and death arise, together with sorrow, lamentation, physical and
mental sufferings and tribulations. Thus arises the entire mass
of suffering.
With the complete eradication and cessation of ignorance,
reaction ceases; with the cessation of reaction, consciousness
ceases; with the cessation of consciousness, mind and body cease;
with the cessation of mind and body, the six senses cease; with
the cessation of the six senses, contact ceases; with the
cessation of contact, sensation ceases; with the cessation of
sensation, craving and aversion cease; with the cessation of
craving and aversion, attachment ceases; with the cessation of
attachment, the process of becoming ceases; with the cessation of
the process of becoming, birth ceases; with the cessation of
birth, aging and death cease, together with sorrow, lamentation,
physical and mental sufferings and tribulations. Thus this entire
mass of suffering ceases.
- Paticca-samuppada Sutta, Samyutta Nikaya, XII (I). 1.


ACKNOWLEDGMENTS
I wish to thank Volunteers in Asia, Inc., Stanford,
California, for posting me in Southeast Asia as an appropriate
technology volunteer, spurring my interest in community resource
work. My professional association with Yayasan Dian Desa
Foundation staff in Yogyakarta, Indonesia, and British Oxfam,
Oxford, England, exposed me to technical and administrative
approaches that encourage greater choice and self-sufficiency in
local communities.
The desire to improve my skills as a community worker
brought me back to the United States to pursue graduate
education. At the University of Florida Nigel Smith, Jack Putz,
Abe Goldman, Cesar Caviedes, Marc McLean, Seth Bigelow, and my
graduate peers in the Department of Geography have all assisted
and encouraged me to finish this work.
The kind support of the Fulbright Foundation in India,
Karnataka Forest Department's Y. N. Yelappa Reddy, and my friends
C. Saibaba, Vimla, Pandurang Hegde, Mumta Hegde, Malti Hegde, and
Satish Hegde made my field research in India both possible and
personally rewarding.
My wife, Jennifer Silveira, marked the path to completion of
this work by her own example.
IV


The practice of Vipasana Meditation as taught by S. N.
Goenka has strengthened my sense of humility, acceptance, and
goodwill toward others.
Finally, the memory of my mother, Jane Slusser Flickinger,
and her life-long application of those adages pretty is as pretty
does, and if you can't say anything nice don't say anything at
all strengthens my efforts to pass these pearls on to my sons,
Parker and Whitney.
v


TABLE OF CONTENTS
Page
ACKNOWLEDGMENTS iv
LIST OF TABLES ix
LIST OF FIGURES xii
INTRODUCTION 1
Forest Rehabilitation and the Needs of Forest-Dependent
Communities: A Dual Research Agenda 3
The Research Area 7
Multiple Species Plantations (MSPs) 10
Gender and Caste-based Analysis of Forest Resource Use 13
Village Study Area 15
FOREST REHABILITATION VIA MULTIPLE SPECIES PLANTATIONS
(MSPs):THE SILVICULTURAL STUDY 17
Tree Seedlings and the Forest Understory 17
Silvicultural Study Focus 21
SILVICULTURAL STUDY: SITE SELECTION AND IMPLEMENTATION 26
Research Area Selection 26
Research Site Selection 28
Silvicultural Experiment Design 32
Plant Selection and Imposition of Experimental Treatments ... 35
Plot Maintenance 39
Plant Harvesting, Processing and Measurement 40
Calibration Estimates Requiring Destructive Measurements ....41
SILVICULTURAL STUDY RESULTS AND DISCUSSION 45
INTRODUCTION 45
Seedling Growth Rates During Monsoon versus Dry Seasons 45
Experimental Plant Damage and Measurement Problems 46
Shoot and Root Collar Relative Growth Rate (RGR) Results ....48
Discussion: Ecological Potential of MSPs 56
Local Misgivings about MSPs: Reduced Biodiversity and
Forest Reservation 59
FOREST RESOURCES IN PENINSULAR INDIA:STATE APPROPRIATION AND
LOCAL EXCLUSION 62
The Historical Context 63
British Colonial Administration of Indian Forest
Resources 65
Ecology and Aesthetics of Forests: Colonial
Perceptions 70
vi


71
Local Resistance to Capitalization of Forests .
Management of Indian forests in the early 20th
Century 72
Post-Colonial Management of Forest Resources 74
Capitalization of Indian Forest Resources: An Analytical
Framework 77
Forest Policy and Management in Northwestern Karnataka
State 80
Pushing Back the Forest Frontier: Forest Encroachment
in Sirsi Taluk 84
Conclusion 86
THE COMMUNITY FOREST RESOURCE STUDY: THE BASELINE SURVEY 88
Introduction 88
The Forest Resource Use Study: A Two-Tiered Approach 8 9
Hypotheses of Caste, Gender, and Age to be Tested by the
Surveys 90
The Baseline Survey 91
Creation and Administration of the Baseline Survey 91
Caste Groups 94
Hamlets 96
Gender 96
Age 97
Marital Status 98
Literacy 98
Land Ownership, Employment, and Land Encroachment 100
House and Roof Type 105
Income 105
Livestock Ownership 106
Collection of Non-Timber Forest Products 107
Table 6-11continued 110
Fuelwood 112
Leaves 113
Fruits 116
Mushrooms 117
Date Palm 118
Disappearing Forest Products 118
Local Perceptions of Multiple Species Plantations
(MSPs) 120
Perceived Need for Local Forests 122
Locally Popular Tree Species 123
Suggested Future Reforestation Methodologies 125
THE COMMUNITY FOREST RESOURCE STUDY: THE FOREST RESOURCE USE
SURVEY 128
Introduction 128
Forest Products Use Survey Data Collection 129
Forest Products Use Survey Data Analysis Tools and
Procedures 131
Similarity Matrices 132
Hierarchical Clustering 133
Multidimensional Scaling 134
Consensus Analysis 135
Forest Products Use Survey Results 138
vii


Plant Identification 138
Priority Use of Plants 146
Plant Versatility (Number of plant uses) 151
Plant Usefulness 157
Plant Abundance 163
Discussion of Survey Results 165
TOWARDS PARTICIPATORY MANAGEMENT OF FOREST RESOURCES 168
Introduction 168
Participatory Research in Forest Planning and Management ...168
Using Spatial Information to Catalyze Local Participation ..171
Community-Based Natural Resource Management: An Applied
Scenario 172
APPENDIX A BASELINE SURVEY OF 122 HOUSEHOLDS, TEREKANAHALLI
VILLAGE, NORTH KANARA DISTRICT, KARNATAKA, INDIA 175
APPENDIX B PLANT SPECIES INCLUDED IN A MINOR FOREST
VEGETATION USE SURVEY, NORTH KANARA DISTRICT, KARNATAKA,
INDIA 177
APPENDIX C MINOR FOREST PRODUCT USE PREFERENCE SURVEY,
TEREKANAHALLI VILLAGE, NORTH KANARA, KARNATAKA, INDIA 179
APPENDIX D LOCAL USES OF PLANT SPECIES, TEREKANAHALLI
VILLAGE, NORTH KANARA, KARNATAKA, INDIA 180
LIST OF REFERENCES 190
BIOGRAPHICAL SKETCH 199
viii


LIST OF TABLES
Table page
Table 1-1 Native hardwood species often incorporated into
Multiple Species Plantations (MSPs) 11
Table 3-1 Sirsi Forest Division plantations: number of
plantations planted from 1987-1991 29
Table 3-2 Local names of 1988-91 research plots located
within each of 4 research blocks 30
Table 3-3 Number of treatments assigned to experimental
units in 1988 MSP plots 33
Table 3-4 Number of treatments assigned to experimental
units in 1989 and 1990 MSP plots 33
Table 3-5 Regressions used to estimate 1990 Lagerstroemia
lanceolata and Terminalia tomentosa seedling shoot dry
weights at the start of the experiment 43
Table 4-1 Percentage of annual seedling shoot growth
occurring during monsoon versus dry season, n=174 46
Table 4-2 Comparative growth of 16 seedlings grown with and
without matrix trees in multiple species plantations 57
Table 6-2 Age distribution, by 10-year intervals, of
baseline survey informants 98
Table 6-3 Distribution of households in which all females
are literate, by caste 99
Table 6-4 Distribution of households in which all females
or all males are illiterate, by caste 100
Table 6-5 Land ownership and forest use rights by caste
family 101
Table 6-6 Distribution of employment by caste 102
Table 6-7 Distribution of unskilled laborers, by caste and
gender 103
Table 6-8 Distribution of Gaonthana use and land
encroachment, by caste 104
ix


Table 6-9 Distribution of annual household income in Indian
Rupees, by caste 106
Table 6-10 Distribution of average number of 4 types of
livestock, by caste family 107
Table 6-11 Priority forest products, month(s) collected,
forest type where collected, and number of times
mentioned, by caste 109
Table 6-12 Numbers and percentage of female and male
informants that collect priority forest products 112
Table 6-13 Fuelwood collection by gender and caste 112
Table 6-14 Average annual fuelwood collection in kilograms
and cartloads, by caste household 113
Table 6-15 Collection of green leaf fodder, by caste and
gender 114
Table 6-16 Average annual green leaf collection in
kilograms, for the 2 major leaf-collecting castes 115
Table 6-17 Dry leaf collection by caste and gender 115
Table 6-18 Average annual dry leaf collection in kilograms,
for the 2 major leaf-collecting castes 116
Table 6-19 Collection of 6 popular species of fruit, by
caste 116
Table 6-20 Mushroom Collection, by caste 117
Table 6-21 Date palm collection, by caste 118
Table 6-22 Increasingly scarce forest products 119
Table 6-23 Reasons cited why 10 forest products are
becoming locally scarce, by caste 120
Table 6-24 Local opinions about MSPs 121
Table 6-25 Local opinions about MSPs versus minor forests .... 122
Table 6-26 Perceptions about the utility of local forests .... 123
Table 6-27 Tree species most requested for inclusion in
future reforestation programs, and their use 124
Table 6-28 Local recommendations for siting of future
reforestation programs, by caste 125
x


Table 6-29 Local recommendations for implementation
strategy of future reforestation programs, by caste 126
Table 7-1 Consensus analysis of informant identification of
65 plants, by caste 143
Table 7-2 Knowledge coefficient of informants in
identifying 65 local plants with respect to caste,
gender, and age class 146
Table 7-3 Informants' knowledge coefficients of the
priority use of recognized plants, by caste and gender 150
Table 7-4 Consensus analysis of informant knowledge of
plant versatility, by caste 153
Table 7-5 Informants' knowledge coefficients of versatility
of recognized plants by caste, gender, and age 154
Table 7-6 Knowledge coefficients of versatility of
recognized plants, by caste, for Havik Brahmins 157
Table 7-7 Consensus analysis of perceived usefulness of
recognized plants, by caste 160
Table 7-8 Knowledge coefficients of perceived usefulness of
recognized plants, by caste and gender 161
Table 7-9 Rankings and usefulness scores of the most useful
survey plants, according to survey informants 162
Table 7-10 Knowledge coefficients of perceived local
abundance of recognized plant species by caste, gender,
and age 164
Table 7-1 Plant species included in a survey of local
vegetation resources obtained from minor forests of North
Kanara District, Karnataka, India 177
xi


LIST OF FIGURES
Figure page
Figure 1-1 Uttara Kanada (North Kanara) District,
Karnataka, India 8
Figure 1-2 Forest types and forest conversion, Uttara
Kanada District, Karnataka, India 9
Figure 3-1 Location of research blocks and Uttara Kanada
cities 31
Figure 3-2 Silviculture experiment design: blocks, whole
plots, and split plots 33
Figure 3-3 Comparison of control and combined soil
trenching-canopy guying treatments applied in 1991 to
one, two, and three year old plantations 36
Figure 3-4 Destructive seedling harvest plan used to
estimate shoot biomass of 1, 2, and 3 year-old seedlings
at the start of the 1991-92 study 42
Figure 4-1 Shoot extension comparison of Terminalia
tomentosa and Lagerstroemia lanceolata 1, 2, and 3
years after outplanting into MSPs 49
Figure 4-2 Root collar area growth comparison of Terminalia
tomentosa and Lagerstroemia lanceolata 1, 2, and 3
years after outplanting into MSPs 49
Figure 4-3 Shoot dry weight increment comparison of
Terminalia tomentosa and Lagerstroemia lanceolata 1, 2,
and 3 years after outplanting into MSPs 50
Figure 4-4 Shoot extension of Lagerstroemia lanceolata 1,
2, and 3 years after outplanting into MSPs, Trench & Guy
(T + G) vs Control (Ctrl) 51
Figure 4-5 Shoot extension of Terminalia tomentosa 1, 2,
and 3 years after outplanting into MSPs, Trench & Guy (T
+ G) vs Control (Ctrl) 51
Figure 4-6 Root collar area growth of Terminalia tomentosa
- 1, 2, and 3 years after outplanting into MSPs, Trench &
Guy (T + G) vs Control (Ctrl) 52
xii


Figure 4-7 Root collar area growth of Lagerstroemia
lanceolata 1, 2, and 3 years after outplanting into
MSPs, Trench S Guy (T + G) vs Control (Ctrl) 53
Figure 4-8 Shoot dry weight increment of Terminalia
tomentosa 1, 2, and 3 years after outplanting into
MSPs, Trench S Guy (T + G) vs Control (Ctrl) 53
Figure 4-9 Shoot dry weight increment of Lagerstroemia
lanceolata 1, 2, and 3 years after outplanting into
MSPs, Trench & Guy (T + G) vs Control (Ctrl) 54
Figure 4-10 Shoot extension of Lagerstroemia lanceolata 3
years after outplanting, trench and guy vs trench vs guy
vs control vs NPK treatments 55
Figure 4-11 Root collar area growth of Lagerstroemia
lanceolata 3 years after outplanting, trench and guy vs
trench vs guy vs control vs NPK treatments 55
Figure 4-12 Shoot dry weight increment of Lagerstroemia
lanceolata 3 years after outplanting, trench and guy vs
trench vs guy vs control vs NPK treatments 56
Figure 7-1 A similarity matrix of plant identification, by
gender, for Havik Brahmin informants 133
Figure 7-2 Plant identification, by caste, using
multidimensional scaling 139
Figure 7-3 Plant identification, by gender, using
multidimensional scaling 140
Figure 7-4 Plant identification, by ten-year age classes,
using multidimensional scaling 141
Figure 7-5 Plant identification by caste, gender, and age
classes using hierarchical clustering 142
Figure 7-6 Priority use of recognized plants, by caste,
using multidimensional scaling 147
Figure 7-7 Priority use of recognized plants, by gender,
using multidimensional scaling 149
Figure 7-8 Plant versatility, or number of uses tallied for
recognized plants, by caste, using multidimensional
scaling 151
Figure 7-9 Plant versatility, or number of uses tallied for
recognized plants, by gender, using multidimensional
scaling 152
xiii


Figure 7-10 Plant versatility, or number of uses tallied
for recognized plants, by gender, for Havik Brahmins,
using multidimensional scaling 155
Figure 7-11 Number of uses tallied for recognized plants,
by gender, for Havik Brahmins, using hierarchical
clustering 156
Figure 7-12 Perceived usefulness of recognized plants, by
caste, using multidimensional scaling 158
Figure 7-13 Perceived usefulness of recognized plants, by
gender, using multidimensional scaling 159
xiv


Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
REHABILITATION OF DEGRADED TROPICAL FORESTS
IN INDIA'S WESTERN GHATS:
SILVICULTURAL AND SOCIO-ECONOMIC IMPLICATIONS
OF MULTIPLE SPECIES PLANTATIONS
By
Donald Ian Flickinger
December, 1997
Chairman: Nigel J. H. Smith
Major Department: Geography
This research examines the role of multiple species
plantations (MSPs) in rehabilitation of Indian tropical moist
deciduous forests, as evaluated by both silvicultural and
community resource use criteria.
The silvicultural study investigates the effects of tree
species and duration of exposure to understory conditions on
shoot growth rates of underplanted tree seedlings. An initial
survey conducted in 1990 evaluated shoot height and basal area
growth rates of native hardwood seedlings after one, two, and
three years of exposure understory conditions in MSPs. Local
foresters' opinions about the shade/understory tolerance of many
native tree species was also solicited. Using the information, I
selected one understory-tolerant and one understory-intolerant
species for experimental study. Seedlings of these two species
xv


were experimentally released after one, two, and three years of
growth beneath MSPs, and their growth rates measured during one
year after release. Growth rates of unreleased control seedlings
were also measured over the same one year period. In a second
experiment I compared the relative effects of aboveground and
belowground competition on shoot growth rates of the understory-
tolerant species. The relative effect of soil fertility on
seedling shoot growth was also assessed.
The effect of state-managed MSP programs on gender, caste,
and age-based use of forest resources forms the forest resource
use component of this research. Historical development,
ownership, and use of India's timber and non-timber resources in
northwestern Karnataka State are first described. Contemporary
attitudes towards and use of non-timber forest resources in minor
forests before and after their conversion to MSPs are then
disaggregated by gender, caste, and age. Differential effects of
modern state reforestation programs on local resource user groups
of interest are derived from two community surveys. Gender and
caste-based non-timber resource use priorities that have been
neglected in previous state reforestation programs are
identified. Joint state forest department-local community
negociations centered on collection, presentation, and analysis
of spatial data are introduced as a strategy to catalyze and
guide future forest resource use decision making.
xvi


CHAPTER 1
INTRODUCTION
This work was stimulated by the notion that degraded
tropical forest systems can and should be rehabilitated according
to ecological principles, without imposing economic hardship on
forest-dependent people in the process. While instances of
promising tropical reforestation efforts are frequently cited
(e.g., Food and Agricultural Organization of the United Nations
1989, Agarwal and Narain 1989, Cernea 1985, Murray 1983, Nesmith
1991, Poffenberger 1990), until recently few programs have
emphasized the role of local forest dwellers in program
conception, implementation, or enjoyment of the benefits they
produce (Ayuwat 1993, Dhar et al. 1990, Malhorta and Poffenburger
1989, Noronha and Spears 1985, Pathan et al. 1990, Singh 1987).
How then can reforestation programs in the tropics be
ecologically sound while meeting the needs of local people? This
two-part question guides the study that follows.
To address both parts of this question field research site
selection had to be limited to areas where forest rehabilitation
efforts were already underway, and in proximity to rural forest-
dependent communities. A two-year search led to the selection of
a reforestation site in India's Western Ghats where the
application of a dual ecology/community welfare research agenda
was deemed feasible. The area is Karnataka State's Uttara Kanada
(North Kanara) District, where a multiple species plantation
1


2
(MSP) reforestation program is underway. A decade of Karnataka
Forest Department (KFD) refinement of MSP techniques over
thousands of hectares in North Kanara District was already
producing both silvicultural and ecological impacts when this
research began in mid-1991.
Two separate but linked sets of research questions were
formulated to address the ecological and community welfare
impacts of forest rehabilitation using MSP silviculture. The
initial focus of this work was to document and test the degree to
which MSPs facilitate recovery of North Kanara's tropical moist
deciduous forests. The complementary focus centered on two
surveys about local perceptions of forest resources and the
effect of MSP silviculture on forest-dependent communities in
North Kanara.
This research concludes by identifying several ecological
merits of MSPs, while documenting that MSPs are often disliked,
or at least misunderstood, by local forest dwellers. Local
perceptions are shown to vary according to survey informants'
caste, gender, and sometimes age. Conclusions drawn from the
social surveys provide a framework for understanding differences
in local perceptions about forest resources, how they are
utilized, and local recommendations for forest rehabilitation.
The remainder of this introductory chapter describes my
silvicultural and social survey research agendas, how they are
related, and the questions that have guided both inquiries. It
also describes the research area, the MSP silvicultural system,


3
and Terkanahalli Village where forest resource-use survey data
were collected.
Chapters 2 through 4 describe the relevance and specific
aims of the silvicultural study, study design and implementation,
and study results and associated ecological impacts of MSPs,
respectively.
Chapter 5 reviews the historical conflict between the Indian
state and local communities over forest resources. Chapters 6
and 7 describe the development of two community forest resource-
use surveys, their implementation, and presentation and
discussion of survey responses.
Chapter 8 presents a spatial approach to participatory
decision-making about future forest resource use. Joint forest
department/local community workshops emphasizing the collection,
presentation, and analysis of spatial data are introduced as a
strategy to catalyze and guide collaborative forest resource
management. The ideas for this approach evolved from my
collaboration with both foresters and local people in carrying
out this dual research agenda.
Forest Rehabilitation and the Needs of Forest-Dependent
Communities: A Dual Research Agenda
The ecological importance of Indian forests, their
protection and rehabilitation, and the undesirable consequences
of their disappearance (Bentley et al. 1987) are well-understood
by those who live near the remaining tropical forests of
peninsular India (Nair 1984). During the 1980s, concern over the


4
effects of deforestation of India's watersheds spurred
international financing of social forestry programs to reforest
45 million hectares (ha) of degraded Indian uplands. Total
recommended outlays to protect India's tropical forest resources
amounted to US$ 1.2 billion for 1987-91, or 23 percent of
investments recommended to save tropical forests worldwide (World
Resources Institute 1985). The primary operational response of
Indian state governments to shrinking forest areas has been the
conversion of degraded forest lands into plantations. By 1990,
India boasted 18,900,000 ha of plantations: a figure that
continued to increase by 1,441,000 ha annually during the early
1990s (World Resources Institute 1994). This represents the
largest commitment to plantation silviculture in the tropics.
Reforestation efforts notwithstanding, annual rates of
deforestation in India increased steadily during the 1980s:
339,000 ha/year for the decade versus 147,000 ha/year for the
period 1981-85 (World Resources Institute 1994). Menon (1986)
calculated that deforestation rates in the Trichur region of the
southern Western Ghats accelerated by 50% between the years 1960
and 1984, compared to 23% for the years from 1930 to 1960. This
loss has amounted to a cumulative contraction of Trichur's forest
area from 392 km^ in 1930 to 130 km^ in 1984.
Concern about Western Ghats deforestation spawned a
Karnataka Forestry Department (KFD) initiative in 1982 to
rehabilitate deforested sites in an ecologically sound and
socially beneficial way (Shyam Sunder et al. 1986). Local
foresters call these replanted areas "miscellaneous plantations",


5
but I have named them multiple species plantations (MSPs) because
the technique comprises simultaneous outplanting of numerous
native hardwood tree species with faster-growing, nitrogen
fixing, naturalized tree species on degraded sites. These sites
are usually located within KFD jurisdictional zones called minor
forests: areas where local people have historical non-timber
usufruct rights (see Chapter 5 for the history of minor forest
designation and utilization). Recurrent, income-generating
thinnings of the fast-growing overstory species begin in the
seventh year after outplanting. These thinnings progressively
remove MSP canopy trees, releasing companion saplings from a
shaded understory environment.
Both state foresters and local people have a stake in the
successful rehabilitation of degraded forests by using MSP
silviculture. Foresters hope to quickly establish several
valuable hardwood tree species on non-productive state forest
lands, while generating income from commercial thinnings. Local
people are the designated beneficiaries of fuelwood, branches,
and mulch resulting from plantation thinning operations (Shyam
Sunder et al. 1986). If workable, this sharing of benefits will
promote the popularity and future success of MSP programs among
Karnataka's foresters and villagers alike.
Have MSPs performed as intended since their inception,
providing expected benefits to both villagers and foresters? Do
MSPs produce undesirable outcomes? And, if so, can MSP
silviculture be improved to enhance benefits to both of these
groups, and to the Indian environment? These questions guide


6
both the silvicultural and community forest resource-use portions
of this study.
The study's silvicultural component focuses on the effects
of species and duration of understory exposure (i.e., how long
native hardwood seedlings have been growing beneath a canopy of
faster-growing trees) on understory seedlings' shoot growth rates
before and after canopy removal. Relative growth rate data,
interviews, and personal field observations are used to
distinguish the growth characteristics and temporal differences
in understory tolerance of two native hardwood species. One
species is characterized as tolerant of understory conditions,
while the other is less-tolerant (Kadambi 1956). Study results
point to management guidelines that maximize seedlings' growth
rates after outplanting in MSPs.
The effects of state-managed MSP programs on caste, gender,
and, in some cases, age-based use of forests guide the forest
resource-use survey component of this research. Historical
development, ownership, and use of India's timber and non-timber
resources describe the setting in which two surveys were made.
Current local knowledge and perceptions of non-timber resources
are then analyzed by caste, gender, and age in both surveys one
of 122 and the other of 37 rural informants. These surveys
highlight how knowledge of forest resources and perceptions about
MSPs vary according to these three variables. The surveys pay
special attention to perceptions about unrehabilitated minor
forests. Minor forests have been historically available to local
people for utilization of non-timber resources. Today they are


7
uniformly degraded, making them prime candidate sites for
government MSP reforestation programs.
The Research Area
The research area is within the Sirsi Forest Division, a
management unit in the Kanara Forest Circle of the Karnataka
Forest Department (KFD), Uttara Kanada District, India (see
2
Figure 1-1). This Forest Circle contains 8,800 km of state-
managed reserved forest (14-15 0 N, 75 E), with elevations
ranging from 450-900 m above sea level. The seven month monsoon
brings 1700-2100 mm of precipitation, mostly between June and
September. Mean annual temperature is 27 C, mean temperature of
the coldest month is 24.5 C, and the mean minimum daily
temperature of the coldest month is 19 C (Pascal 1988). The
"Dharwad System" is the name given to the ancient, metalliferous
metamorphic rock that underlies the research area. It is rich in
iron, manganese, and in some locations in copper, lead, and gold.
This matrix rock is derived from "ancient sediments -
conglomerates, more or less ferruginous quartzites, greywackes,
schists and limestone" (Pascal 1988: 5). A heterogeneous mixture
of gneiss and different kinds of intrusive granites also dot the
Karnataka Plateau.
Area soils have been classified as eutric nitosols (FAO
World Soils Map 1988), or alfisols (Sanchez 1976), and are often
paleustalfs, due to their deep argillic horizons and the
influence of pronounced wet and dry season moisture fluctuations.


Figure 1-1. Uttara Kanada (North Kanara) District, Karnataka, India


Uttara Kanada District, India
Forest Types and Forest Conversion
Forest/Landuse Type

dosed_forest

open forest

degraded_forest

farmland/plantotions
Kra
0
20 40
Figure 1-2. Forest types and forest conversion, Uttara Kanada District, Karnataka, India
Source: Karnataka Forest Department, Maps Division, Aranya Bhavan, Bangalore


10
The largest urban center in the Sirsi Forest Division is
Sirsi Town. Sirsi and its surroundings had about 40,000
inhabitants in 1981: a figure that grew to 80,000 by 1992 (Sirsi
Tax Collector's Office, pers. com.). Sirsi had a population
2
density of 100-200 persons per km in the mid-1980s (Pascal
1988). Numerous villages dot the countryside outside of Sirsi,
each bordered by state reserved forest lands. Terkanahalli
Village, where the forest resource use surveys were carried out,
is located six km east of Sirsi along Banvasi Road. By Indian
standards, Sirsi's environs are not densely populated, helping to
explain why three-fourths of this hilly region is still forested
(see Figure 1-2).
Multiple Species Plantations (MSPs)
In 1982, Karnataka State Forester A. N. Yellappa Reddy
led KFD foresters in adopting MSP silviculture as a promising
strategy to rehabilitate degraded forests in northwestern
Karnataka. Degraded minor forests are prime candidates for MSP
silviculture, because they demonstrate limited ability to
naturally regenerate themselves under present use regimes. After
being bounded by cattle-exclusion trenches and receiving
transplantation holes with downslope water collection pits, these
areas are planted with nursery-grown seedlings of Acacia
auriculiformis, Casuarina equisetifolia, or a mixture of these
naturalized species. Inter-seedling spacing has varied over the
years from one to three meters (10,000 to 1089 stems/ha),
according to local site conditions and management objectives.


11
Both species are known for their rapid initial growth, fuel wood
quality, wide range of soil pH tolerance, drought-hardiness, and
their ability to fix nitrogen (Davidson et al. 1989, Midgley and
Vivekanandan 1986). What distinguishes MSP silviculture is the
simultaneous planting of native tropical hardwood species (see
Table 1-1) with one or both of these nitrogen-fixing species,
hence the term multiple species plantations.
Table 1-1. Native hardwood species often incorporated into
Multiple Species Plantations (MSPs)
Species Name
Family
Local Name
Spondias pinnata
Anacardiaceae
umba'da, hog plum
Wrightia tinctoria
Apocynaceae
hale, dhantappala
Stereospermum xylocarpum
Bignoniaceae
kharisingha, pannimuringa
Bombax ceiba
Bombacaceae
kapok, semul
Cordia McCloudii
Boraginaceae
hadanga
Anogeissus latifolia
Combretaceae
dindal, njama
Terminalia arjuna
Combretaceae
hole matti, kulamaruthu
Terminalia balerica
Combretaceae
tare', thaanni, myrobalan
Terminalia paniculata
Combretaceae
kindal, pullamaruthu
Terminalia tomentosa
Combretaceae
mutti, karimaruthu,
Albizia procera
Fabaceae
siris, jalavaka
Dalbergia latifolia
Fabaceae
sisum, veeti, rosewood
Emblica officinalis
Fabaceae
nelli, myrobalam
Ougenia dalbergioides
Fabaceae
karimut'tul
Pterocarpus marsupium
Fabaceae
honne', venga, bijasal


12
Table 1-1continued
Species Name
Family
Local Name
Xylia xylocarpa
Fabaceae
jamba, irul
Lagerstroemia flosreginae
Lythraceae
holedasal, jarul
Lagerstroemia lanceolata
Lythraceae
nundi, venteak
Syzygium cumuni
Myrtaceae
neral, neralu
Adina cordifolia
Rubiaceae
heddi, haldu
Mi tragyna parviflora
Rubiaceae
kalum, nirkadambu
Sapindus emarginata
Sapindaceae
antualah, ritha, soapnut
Grewia tiliafolia
Tiliaceae
dardussal, dhaman
Gmelina arbrea
Verbenaceae
shivani, gamari
Tectona grandis
Verbenaceae
sagowanni, thekku
Vitex ultisima
Verbenaceae
bharanugi, myla, milla
Presumably, the faster-growing Acacia and Casuarina seedlings
create a protective understory environment for hardwood seedling
establishment and growth, while themselves becoming a source of
fuelwood and poles. Commercial thinning of Acacia and Casuarina
begins approximately seven years after outplanting. Each
successive thinning provides enhanced growing space, releasing
hardwood species in the plantation understories. The
silvicultural prescription calls for removal of all Acacia and
Casuarina by about the fifteenth year. Due to the initial
crowding, the residual mixed stand contains hardwood saplings and
poles with straight boles. This MSP approach is favored over
planting of native hardwoods alone on exposed mineral soil, since


13
the absence of Acacia and/or Casuarina has often resulted in
mortality or slowed stem growth of seedlings. Unsuccessful state
forest plantations seen by the author at Thirthalli, Karnataka
clearly make this point.
Analysis of Sirsi Forest Division office records indicates
that from 1984-1992 over 12,000 ha of degraded forests received
MSP treatment in the Division. Eighty percent of these MSPs
occur on a portion of the Division's 45,000 ha classified as
minor forest lands. The remaining MSPs are located within
degraded parts of reserve forests. This planting effort covers
30 percent of the total area of previously degraded forests in
the Division. Approximately 12,000 ha of degraded forests remain
targeted for MSPs. Another 12,000 ha are not sufficiently
degraded to warrant MSP treatment at present. Three thousand
hectares of degraded forest will not receive MSPs, at the request
of local forest dwellers. Explanations for this local attitude
towards MSPs will be considered in Chapters 6 through 8 the
forest resource use portion of this study.
Gender and Caste-based Analysis of Forest Resource Use
In their analysis of environmentally sound and participatory
development, Agarwal and Narain (1989) redefine rural Indian
poverty not as a shortage of cash, but as a shortage of biomass
resources to meet basic survival needs. These authors document
absolute reductions in biomass productivity over India's non-
agricultural lands, contributing to increased poverty among rural
people.


14
Rural women, being the primary managers and processers of
biomass resources for subsistence, are often the most immediate
victims of deforestation in and around Indian villages (VIKSAT
1990). Women often have the greatest practical knowledge of
local biomass resources (Rocheleau 1988, Molnar and Schreiber
1989, FAO 1989), yet are seldom consulted about reforestation
projects intended to benefit their families (FAO 1983, Hoskins
1983, Rocheleau 1988, Spring 1988, Williams 1985, Nesmith 1991,
Shiva 1988). To become socially-oriented, forestry programs must
therefore expand their focus beyond productivity issues to
include program impacts on local users of forest resources,
particularly women. Women may be excluded from joining forestry
programs due to gender-based biases of extension methods (Spring
1988), or because socio-economic constraints make their
participation difficult (Hoskins 1983). Such barriers to women's
participation must be recognized and consciously addressed if
programs are to accommodate all local people.
As with gender, people may be differentially affected by
forestry programs on the basis of caste or ethnicity. Caste-
based response to MSPs is variable, and is predicated on inter
caste differences in forest resource knowledge and use. Gadgil
(1989) describes these caste-based differences in the region of
this study, where he found that nine endogamous caste groups have
diversified and partitioned their use of forest resources. He
cites the following examples: Chamagars make mats and brooms from
Phoenix palms; Badigars and Holeswars make baskets and rope from
Dendrocalamus strictis bamboo; Gudigars use sandalwood and other


15
tree species in woodcarving; Achari use different tree species
than Gudigars to make tool handles; Holeya make fishing tackle
using Hemidesmus indicas; and Maratha and Jadamalli make brooms
from Lantana camara. Forestry program impacts within particular
caste groups are also expected to differ with respect to gender.
In some situations a person's age may shape his/her knowledge and
opinions about forest resources and their rehabilitation.
This study employs two survey instruments to distinguish
differences in local knowledge and use of minor forests, both
before and after they are converted to MSPs. The surveys also
encourage informants to recommend ways to address their needs
when they are adversely affected by MSPs. Together the two
surveys attempted to
1) Identify caste and gender-based differences in local
community knowledge and use of non-timber forest
resources;
2) Identify groups of interest that benefit the most from
MSP programs, those groups that benefit the least, and
those that remain unaffected;
3) Determine whether MSPs provide enhanced benefits to
local gender and caste-based groups when compared to
unrehabilitated minor forest lands;
4) Explore how MSP silviculture and management can be
altered to benefit critically affected gender and caste
groups, those whose subsistence derives from access to
and use of forest resources.
Village Study Area
The multi-caste village of Terkanahalli was selected for
study of local forest resource use practices. Terkanahalli lies
six km east of Sirsi Town on the Banvasi Road. The Sirsi Taluk


16
Revenue Department maintains birth, death, and land deed records
dating from 1825 of the original inhabitants of Terkanahalli
Village. A temple there, consecrated to Virabhadra, resembles
the architectural style of Belur and Halibid Temples, ca. 1100.
This indicates ancient settlement of the site.
The village proper is divided into eight residential
groupings, or hamlets, the largest being Terkanahalli Gram.
Fourteen caste groups reside in Terkanahalli, making it a mixed-
caste village. In 1992, 140 families lived in all of the hamlets,
122 of which were included in the forest products use survey. The
average local landholding was approximately 1.0 1.2 ha. More
than 50 percent of all families were landless, and therefore
normally worked as agricultural laborers for land-owning families
or the KFD. Some landless people also worked in nearby Sirsi.
The largest landholding in the area was a joint family holding of
15 acres. The owners were absentee residents of Sirsi Town.
MSPs are found throughout Terkanahalli, the oldest having
been planted in 1987. Villagers are therefore familiar with this
silvicultural innovation of the KFD. While local opinions vary
concerning the specific impacts of MSPs on village life, there is
consensus that MSPs are speeding the depletion of valuable non
timber forest resources. Reduced biodiversity and
tenure/usufruct explanations for this loss clearly emerge from
the community forest resource use study. Remedies to this
problem are suggested by survey informants, and these form the
basis for a participatory forest resource management model
presented in the concluding chapter of this dissertation.


CHAPTER 2
FOREST REHABILITATION VIA MULTIPLE SPECIES PLANTATIONS (MSPs):THE
SILVICULTURAL STUDY
In this chapter I describe the relevance of Karnataka's MSPs
to growth studies of tree seedlings in a forest understory
environment. Both theoretical and practical aspects of seedling
shoot growth beneath a forest canopy are reviewed, emphasizing
effects of extended exposure to understory conditions. This
leads to the specific focus of this study: the effect of
different periods of exposure to understory conditions on shoot
growth rates of two tropical tree species. How varying periods
of understory exposure might affect seedling shoot growth after
release from understory conditions is also discussed. Finally, I
present a series of research questions that relate duration of
understory exposure, species type, and experimental release from
understory conditions to seedling shoot growth rates over a 12
month research period.
Tree Seedlings and the Forest Understory
The forest understory environment presents both
opportunities and challenges to young tree seedlings. Short
lived opportunistic light-demanders, longer-lived light-demanders
(Schulz 1960), and some primary forest species cannot germinate
or survive in an understory environment. Many primary forest
17


18
species do, however, benefit from canopy shade during their
establishment phase (Bazzaz 1980) Large vapor pressure
deficits, desiccating winds, extreme temperatures, and radiation
loads are reduced beneath the forest canopy. Understory
conditions allow shade-tolerant seedlings to establish root
systems that can support further growth of photosynthetic stem
tissue. Once established, however, seedling growth rates in the
understory inevitably slow as a result of competition from
neighboring trees (Marquis 1981, Shukla and Ramakrishnan 1984)
and herbaceous vegetation (Krajicek 1975). Canopy thinning
studies have yielded a doubling in stem growth rates of seedlings
and saplings two to three years after release treatments (Erdmann
and Peterson 1972), but may also have the inverse effect of
depressing height growth (Erdmann et al. 1975) in favor of
diameter growth depending on the amount of canopy removal.
Removal of canopy trees may also result in seedling stress
or even mortality if exposure occurs too abruptly or if seedlings
are insufficiently established. This shock effect is often
because the ratio of root absorbing surface to transpiring
surface (fine root:leaf surface ratio) suitable for shaded
conditions does not increase quickly enough to replace shoot
transpiration losses (Kramer and Koslowshi 1979) after release.
A seedling water deficit develops, causing stomatal closure and a
decrease in carbon fixation; the reduced capacity for
transpirational cooling can also result in heat stress and death.
Shelterwood and related silvicultural systems are based on
the incremental removal of canopy trees to attenuate


19
environmental stresses on seedlings that occur with instantaneous
release. Support for this silvicultural approach comes from
Marquis (1982), who found that Allegheny hardwood seedlings
originating under shelterwood canopies survived overstory removal
better than seedlings from natural closed stands. He also
recommended that seedlings in natural stands should be at least
three years old and 10 to 15 cm tall to survive after release by
clearcutting. Seedling age on shelterwood sites, in contrast,
had no effect seedlings survival after canopy removal.
With some notable exceptions, such as Betula alleghaniensis
in the Great Lakes region and Tsuga heterophylla in the Cascade
Range of North America (Eyre and Zillgitt 1953), sustained
exposure to understory conditions is usually disadvantageous to
tree seedlings. Suppressed seedlings suffer increased pest
attack and/or fungal decay as they lose vigor (Erdmann 1979).
They may also be overtopped by more shade-tolerant species. In
Michigan, Acer saccharum (sugar maple) outgrew B. alleghaniensis
(yellow birch) after 23 years of suppression (Eyre and Zillgitt
1953). Enhanced growth of understory seedlings in response to
release diminishes with age (Marquis 1982). Even though 16-65
year old birch still responded to release (Erdmann and Peterson
1972), trees less than 16 years old had faster growth rates after
release.
Residual effects of prolonged exposure to understory
conditions have silvicultural implications. In particular,
silviculturists need to know how well understory tree seedlings
recover and grow after release from varying periods of growth


20
suppression. Forest economists explore this question in
practical terms when evaluating precommercial thinning
operations:
if precommercially released trees consistently grow
larger in average diameter at breast height (DBH) than
nonreleased trees, does this diameter increase at an
early age result in the released trees maturing at a
significantly earlier age than nonreleased trees? If
true, this could result in shorter rotations, and with
shorter rotations, economic evaluations may become
more favorable to applying crop-tree release
treatment. (Smith and Lamson 1983:3)
If the effect of duration of suppression on seedling shoot growth
rates is known, silviculturists can define appropriate species-
based rules for seedling release treatments. This, in turn,
would hasten the re-establishment of native hardwood forests on
degraded sites which is the long-term objective of Karnataka
foresters in establishing MSPs on minor forest sites.
MSPs offer unique opportunities to investigate the effects
of species and duration of understory exposure on shoot growth
rates of understory seedlings in tropical forests. Several
silvicultural attributes of MSPs make this possible:
1) size-graded seedlings representing more than 20 native
species and two naturized nitrogen-fixing species were
used to reforest two percent of state forestlands in
the research area each year from 1982-1991, totaling 20
million seedlings over 12,000 ha;
2) understory seedlings comprise several known age
classes, and were growing beneath MSP canopies for
known periods of time;
3) overstory stand conditions are as uniform as plantation
silviculture permits (i.e. similar overstory species,
grown at similar planting densities, on similar soils,


21
in the same climatic region), to minimize extraneous
variation;
4) canopy tree spacing and size in one, two, and three
year old plantations permitted manipulation of canopy
openness via canopy tree with ropes;
5) soil conditions and tree spacing permitted 0.60 m deep
trenching of at least 3.2 m2 of ground surface
surrounding target seedlings;
6) plantation stands are normally well-protected by the
local forestry department from theft, arson, and damage
from cattle.
Previous studies have been designed to assess the relative
effects of root versus shoot competition on woody plant growth
using partitioned release experiments (e.g., Christy 1986, Horn
1985, Putz 1992, Putz and Canham 1992, Shainsky and Radosevich
1986, Strothman 1967, Wilson 1988, Zeide 1980). I know of no
studies that have addressed the effects of duration of exposure
to competition on subsequent growth rates of released woody
perennial species (but see Shukla and Ramakrishnan 1984) .
Silvicultural Study Focus
This study assesses how shoot relative growth rates (Shipley
1989) of two species of tropical seedlings change during
increasing periods of exposure to understory conditions, and
after experimental release from them. Release treatments include
soil trenching (T), canopy guying (G), and trenching and guying
(T + G) combined. The following questions served to guide this
study, and define hypotheses for investigation.
1) Do increasing periods of exposure to understory
conditions slow growth rates of the two understory
seedling species of interest?


22
2) Do growth rates of a reputedly suppression/shade-
tolerant species stabilize, while growth rates of a
reputedly less shade-tolerant species continue to slow
with increasing periods of continuous understory
exposure?
3) What is the effect of one, two, and three years of
continuous understory exposure on within species and
between species seedling growth rates in the first year
after release from understory conditions?
4) Does belowground competition inhibit growth rates of
understory seedlings more than aboveground competition
when understory exposure time is held constant?
Question 1) can be addressed by within-species comparisons
of seedling shoot growth rates for control treatments in plots of
increasing age address. As more numerous, faster-growing,
nitrogen-fixing trees progressively occupy growing space above
ground and below ground in MSPs, shoot growth rates of understory
seedlings are expected to slow, regardless of species. When tree
canopies begin to overlap and root systems intermingle,
competition for shared space, light, nutrients, and moisture
inevitably begins. Slowed shoot growth of understory seedlings,
when it does occurs, can serve as a marker of the intensification
of resource competition. The search for this horizon of
competition can begin in the youngest MSPs those that are one,
two, and three years old. Four year old canopy trees are too
large to receive experimental treatments. This study was
therefore limited to one, two, and three year old MSPs.
Branches of adjacent seedlings planted at 3 m spacings
remained completely separated during the first year of MSP
establishment. I assumed that intermingling of root systems was


23
also limited during this first year. During the second and third
years, however, MSP canopies can reach heights of six to seven m
and close. Trenching similarly revealed that by the second year,
lateral roots of neighboring seedlings intermingle. If, however,
understory seedling shoot growth fails to slow during MSPs'
second or third year, it may be that growth is merely reallocated
- such as to greater shoot extension at the expense of diameter
growth. Comparison of shoot height and root collar stem diameter
growth data provided information about allocation of growth in
understory seedlings.
Conversely, fast-growing overstory trees may create
beneficial growing conditions for young understory seedlings.
Increased litter accumulation, nitrogen fixation, and retention
of soil moisture provide explanations for such ameliorated
conditions. Many local foresters maintain that MSPs enhance
survival and early growth of understory seedlings. My
observations at several area plantations lacking fast-growing
matrix species supported their claim. Sustained or enhanced
shoot growth of understory seedlings in this experiment would
further substantiate the early beneficial effects of MSPs.
Question 2) can be addressed by between-species comparisons
of seedling shoot growth rates for control treatments in plots of
increasing age. Shoot growth responses are expected to be
species-specific as MSPs age as mediated by a species'
tolerance of understory conditions. For example, shoot growth
rates of a reputedly understory/shade-intolerant species should
slow as MSP overstory trees mature, while growth of more shade-


24
tolerant species should vary less or stabilize. Due to its
limited time horizon, this study is unable to measure any
slowdown in shoot growth of the understory-intolerant species
occurring beyond a MSP's third year.
Question 3 can be addressed by within-species and between-
species comparisons of seedling shoot growth rates for trench and
guy (T+G) release treatments in stands of increasing age. In the
first year after experimental release from one, two, and three
years in the MSP understory, each species is expected to achieve
enhanced shoot growth over that of controls for that species for
the same year. Within-species shoot growth is also expected to
increase uniformly after release, regardless of understory
exposure time. Recovery capacity of young seedlings,
particularly understory-tolerant species, should not be altered
by understory exposure that varies by only one to three years.
Even the less understory-tolerant species should recover
uniformly from these small differences in understory exposure
time. Most seedlings sustain understory exposures much longer
than three years in natural forests, and still respond to growth
opportunities provided by the death of overstory trees (Hartshorn
1982). Shoot growth of the less-tolerant species should,
however, respond more favorably to release treatment than does
the more tolerant species, due to the former's adaptive
preference for open, unimpeded growing space.
Question 4) can be addressed by comparison of growth
responses to factorial treatments (i.e., control, trench, guy,
trench and guy) and one further contrast (NPK fertilization) -


25
the extent to which aboveground and/or belowground factors
inhibit understory seedling shoot growth in MSPs. This factorial
experiment was imposed only on the more understory/shade-tolerant
species in the oldest (three years) MSPs, assuming that similar
results could then be expected for less-tolerant species.
The research area's pronounced wet and dry monsoon climate
produces a marked growing season from June to December, followed
by a droughty semi-deciduous/dormant season from January to May.
Seedlings in forest nurseries grow quickly during the hot, dry
months only because irrigation is provided. Year-round canopy
openness from nine to 37 percent and abundant sunflecks beneath
the oldest MSPs studied lead to the prediction that soil moisture
limits understory seedling shoot growth rather than sunlight.
Enhanced evapo-transpiration caused by canopy guying (G) should
therefore limit seedling shoot growth, not soil trenching (T).
Nearly all MSPs are located on paleustalf soils (FAO World
Soils Map 1988) having litter layers that thicken to 3-7 cm by a
plantation's third year. Organic matter in the top 10 cm of 12
MSP soils varied from 2.0 to 7.3 percent by soil weight, and
averaged 3.1 percent (Walkley-Black dichromate methodology, IFAS
Analytical Research Laboratory, University of Florida). All
macro and micro-nutrients were found to be in sufficient supply
for plant growth. The NPK treatment is therefore not expected to
increase the shoot growth of understory seedlings.


CHAPTER 3
SILVICULTURAL STUDY: SITE SELECTION AND IMPLEMENTATION
In this chapter I describe the silvicultural study.
Formulation and implementation of my research plan evolved from a
1990 tour of northwestern Karnataka's Sirsi Forest Division.
Experimental species and research sites selected for execution of
the plan are discussed. I then describe the process of
experimental plant selection, imposition of experimental
treatments, plot maintenance during the 1991-92 research year,
and final plant harvest and processing procedures. Finally, I
describe calibration harvests that were used to estimate initial
shoot dry weights of experimental plants that were not
destructively harvested until the end of the year-long
experiment.
Research Area Selection
I visited 12 Multiple Species Plantation (MSP) plots during
a January 1990 tour of the Sirsi Forest Division. Increases in
shoot height and root collar basal area were easily distinguished
among native tree seedlings that had been growing one, two, or
three years within MSPs. These observations were discussed with
local foresters, and their opinions about the relative shade or
understory tolerance of many native tree species were noted.
There was agreement that all species achieve maximum growth when
26


27
growing in forest gaps or openings, but that some species
tolerate shade better than others. The most frequently planted
species were classified as either "shade tolerant" or "shade
intolerant". Shade-tolerant species included Lagerstroemia
lanceolata (nundi), Terminalia paniculata, and Dalbergia
latifolia. Terminalia tomentosa (mutti) and Pterocarpus
marsupium were considered more shade-intolerant species.
Proposed experimental treatments of tree seedlings in MSP
understories were tested using canopy guying and soil trenching
techniques. Guying involved pulling back and securing all canopy
trees that overtopped a target tree. This procedure was tested
in a three-year old MSP and found to be feasible. To test
proposed soil trenching techniques, two-year old L. lanceolata
and T. tomentosa seedlings were transplanted into 60 X 60 X 60 cm
pits in the Kalve Nursery of Sirsi Forest Division. The sides of
these pits were lined with 30 guage plastic sheeting (Biradar
Plastics, Malmaddi, Dharwad 580 007 India). Excavation of these
trenches 17 months later was done to assess possible confounding
effects of plastic root barriers on seedling root growth in
planned experimental trenching treatments. All five T. tomentosa
and five L. lanceolata seedlings survived this soil trenching
pre-test. Both species more than tripled in stem height,
indicating that changes in shoot growth would be distinguishable
after a 12 month study. Excavation of roots indicated that
lateral roots of four seedlings had extended to the plastic
barriers and were growing along them. The distance between
plastic barriers and seedling bases was therefore increased to


28
one m, in experimental trenching treatments. Excavation also
showed that the 30 guage plastic used as root barriers around the
seedlings had partially deteriorated after 17 months under
ground. I therefore chose to use thicker, 60 guage plastic
sheeting in all trenching treatments.
Trenching and guying preliminary studies convinced me that
these treatments could be successfully imposed on one, two, and
three year-old MSP plots available in the Sirsi Forest Division.
There was insufficient time during this initial visit to select
specific tree species or MSP plots for the field study.
Research Site Selection
In early May 1991, Sirsi Forest Division officers provided
information about all plantation plots within their five
jurisdictional forest ranges. These plots ranged in size from
five to 90 ha, with an average area of 25 ha. It soon became
clear that plots planted prior to 1987 could not be considered
for this study. From 1982 to 1986 MSP silviculture had evolved
by trial and error, and was not consistent in its application.
Plots were few and scattered, while the types of species used and
their planting densities were not uniform. Karnataka Forest
Department Officers S.S. Hegde and S.D. Sumshekar tallied all 315
forest division plantation plots planted from 1987 through 1991.
Numbers of new plots planted each year from 1987-1991 appear in
Table 3-1.


29
Table 3-1. Sirsi Forest Division plantations: number of
plantations planted from 1987-1991
YEAR PLANTED
1987
1988
1989
1990
1991
PLOTS PLANTED
72
40
73
80
50
Two hundred three of these stands were located in minor forest
areas, 106 stands were in reserve forests, and six stands were in
forests where local spice garden owners have historical tree
lopping privileges so-called soppina betta forests. Two
hundred seventy-nine of these stands are true MSPs, while 36
stands were planted with either Bambusa spp. (bamboo), Santalam
album (sandalwood), Acacia auriculiformis (acacia), Casuarina
equisetifolia (Australian pine), or a limited number of native
species.
All 279 MSP stands were considered for their suitability as
experimental plots. Most were undesirable for the purposes of
this research due to one or more of the following: individual
stands were isolated from other MSPs; seedling density was too
low, or seedling mortality was too great; locally abundant
species of seedings were not commonly found in other MSPs;
faster-growing canopy species were uncommon or irregularly
spaced; residual trees with spreading canopies were too abundant;
micro-climatic irregularities of slope, aspect, or soil rendered
plots atypical; or, tree seedlings were sometimes damaged by
excessive cattle and/or human disturbance.
From a candidate list of five geographical areas or blocks,
four were chosen Siddupur, Hunsekopp, Aksal, and Heggekopp (see
Figure 3-1). Hunsekopp and Aksal blocks are west and north of


30
Sirsi Town, respectively. Siddapur and Heggekopp blocks are both
south of Siddapur Town. The fifth, Hulekal block contained too
many large residual trees for inclusion and was rejected. The
four acceptable blocks had similar seedling spacing in intra
block plots (two or three meters), and contained a chronologic
suite of MSP plots planted during 1988, 1989, and 1990 (see Table
3-2). The youngest (i.e., most recently planted) series of plots
(1988-90) was chosen for study in an attempt to track the onset
of slowed shoot growth from the earliest possible moment,
seedling outplanting from nurseries.
Table 3-2. Local names of 1988-91 research plots located within
each of four research blocks
Date Planted
SIDDAPUR
HUNSEKOPP
AKSAL
HEGGEKOPP
1988
MUGDUR
HUNSEKOPP
PUTANMANE
MUSWALLI
1989
PADWANBAIL
HUNSEKOPP
AKSAL
HEGGEKOPP
1990
NAGARBAWI
YECHADI
ANDALLI
HEGGEKOPP
Area reconnaissance also indicated that no other three-year
interval provided more than three suitable plots (i.e. one
experimental block) for study. Trees in plots older than three
years were often too large to easily permit the canopy guying and
soil trenching treatments employed in this study.


Figure 3-1. Location of research blocks and Uttara Kanada cities
Source: Karnataka Forest Department, Maps Division, Aranya Bhavan, Bangalore


32
Each of the age-specific plots contained numerous
individuals of L. lanceolata and T. tomentosa. These two native
species were chosen for detailed study because the former is
known locally to be relatively shade tolerant, while the latter
is considered shade intolerant, and because an abundance of
outplantings of these two species was found in all experimental
blocks and plots. Working with two species of varying
shade/understory tolerance allows for a range of potential
seedling shoot growth response to a developing plantation
environment.
Silvicultural Experiment Design
This study was designed to investigate the impact of MSP
plantation age and associated temporal effects of plantation
development on shoot growth rates of understory seedlings. The
experimental design appears in Figure 3-2. Each of the four
geographical blocks contained at least one plot that had received
MSP treatment in each of the following years: 1988, 1989, and
1990. The numbers and kinds of experimental treatments assigned
to experimental seedlings in 1988 plots, and in both 1989 and
1990 plots is shown in Tables 3-3 and 3-4 respectively.


33
INTERVAL for suppression tolerant species only
(whole plots) TREATMENTS
(split plots)
Figure 3-2. Silviculture experiment design: blocks, whole plots,
and split plots
Table 3-3. Number of treatments assigned to experimental units in
1988 MSP plots, by species
CONTROL
TRENCH
GUY
TRENCH & GUY
FERTILIZATION
Lagerstroemia lanceolata
4
4
4
4
4
Terminalia tomentosa
4
0
0
4
0
Table 3-4. Number of treatments assigned to experimental units
in 1989 and 1990 MSP
plots, by
species
CONTROL
TRENCH & GUY
Lagerstroemia lanceolata
4
4
Terminalia tomentosa
4
4


34
Only L. lanceolata received all four factorial treatments and the
fertilization contrast and only in the oldest, 1988 MSP plots
(see Table 3-3). These oldest plots under study offered the
greatest potential for detection of slowed seedling shoot growth
resulting from resource competition, given that physical crowding
above and below ground increases as plantations mature. For this
reason I decided to impose all treatment levels on the 1988
plots, and to do this for the reputedly more shade/understory-
tolerant species, L. lanceolata. If slowed growth could be
detected for the more tolerant species, then L. lanceolata's
response to crowding should apply to other, less-tolerant
species. The reputedly less-tolerant T. tomentosa received only
the combined soil trenching-canopy guying and control treatments
in the 1988 plots.
The canopy guying by soil trenching factorial design
explores the contribution of both aboveground and belowground
factors to changes in seedling shoot growth for the year after
imposition of treatments. The fertilization treatment tests
whether soil macro-nutrients or soil moisture is more limiting to
seedling shoot growth in MSPs during the year after experimental
treatment. The combined canopy guying and soil trenching
treatment (see Figure 3-3) mimics a release event that seedlings
normally experience as a result of plantation thinning
operations. Seedling shoot growth was monitored during the year
following experimental release.
In the 1989 and 1990 plots, both L. lanceolata and T.
tomentosa received only the combined soil trenching-canopy guying


35
and the control treatments, due to the time and expense of
imposing these treatments. The five weeks available to initiate
the experiment prior to the early June arrival of the monsoon
were also too short to establish all 12 experimental plots.
Plots in Aksal and Heggekopp blocks had to be established during
the monsoon rains of June and July. Soil trenching operations
became more arduous under wet soil conditions. Ultimately, the
experimental design was replicated over all four blocks,
comprising 60 experimental seedlings per block for a total of
240 experimental units.
Plant Selection and Imposition of Experimental Treatments
Selection of individual experimental plants and
implementation of treatments began in early May of 1991. I
initially walked through the 1988, 1989, and 1990 plots in each
of the four blocks to assess spatial uniformity of outplanted I.
lanceolata and T. tomentosa seedlings. Some plots contained
uniform distributions of X. lanceolata and T. tomentosa
throughout, while others had few or none of these two species
within their boundaries. Areas having sufficient X. lanceolata
and T. tomentosa seedlings were entered and a random compass
bearing was followed for a random distance between 15 and 20 m.
Making a right-angle turn at this point, I began to scan in front
and three m on either side of my path for X. lanceolata and T.
tomentosa seedlings.


36
Figure 3-3. Comparison of control and combined soil trenching-
canopy guying treatments applied in 1991 to one, two, and three
year old plantations
Each candidate seedling encountered was inspected for signs of
damage, disease, multiple stems, or the presence of vegetation
within one m of its base. Individuals having none of these
deficiencies were flagged for later measurement and treatment.
When coming within 20 m of a plot edge, I made a second right-
angle turn and walked six to seven meters before making a third
right-angle turn, and then continued the seedling scanning
procedure.
After I marked a sufficient number of candidate seedlings in
a particular plot, I measured the height and root collar diameter
of each seedling. When necessary, soil was cleared from around
the base of a seedling to permit two root collar diameter


37
measurements using calipers, the second measurement being at a
right angle to the first. Length of the primary stem was
recorded from the root collar to the apical bud. The species of
the seedling and its general condition were recorded. Each
individual was then marked using a labeled laundry tag tied to a
length of string, and attached to the main stem just above the
point of diameter measurement. A second labeled tag was attached
to each individual midway along its stem to insure future
identification. Each individual's location was marked on a
detailed plot map. Canopy openness was estimated using a
hemispherical densiometer (Lemmon 1956), averaging measurements
made above each seedling's main stem at 1.2 m above ground, while
facing in each of the four cardinal directions. Soil temperature
was measured 5 cm and 15 cm below the surface during midday heat,
using an analog soil thermometer.
Experimental treatments were then assigned at random to the
marked seedlings in each plot using a random number table. The
canopy had not yet closed in the most recently planted 1990
plots, and little or no guying of matrix Acacia and/or Casuarina
crowns was therefore required until six months later, after the
monsoon. Smaller plantation trees could usually be held under
tension while being guyed to neighboring tree limbs or stems.
Canopy openness in 1989 plots varied from 50 percent to 90
percent, and could easily be increased from 85 percent to 90
percent openness by guying. Guying became progressively more
difficult as plot age increased. Three year old Acacia and
Casuarina trees in 1988 plantations often had basal diameters of


38
13 cm or more, and heights of six to seven m. Here canopy
openness ranged from 9 to 37 percent, and could be increased with
guying to only 45 percent to 50 percent openness. To bend these
larger individuals down for guying required climbing more than
half way up them, allowing one's body weight to slowly bow tree
stems downwards. On more than a dozen occasions the snapping of
tree crowns under my own body weight caused falls of three to
four meters. Wearing a motorcycle helmet increased my
confidence, and perhaps protection, when crowns snapped. Guyed
treatments were checked and retied during each of the five
maintenance visits made to every plot during the one year
experiment. Reguying usually increased canopy openness a further
15 percent by the time the experiment was concluded.
Soil trenching was the most difficult aspect of initiating
the silvicultural study. Each perimeter trench was hand-dug 50-
60 cm deep, 25 cm wide, 7.2 m in circumference, and positioned
1.0 1.1 m away from the stem of the experimental seedling, at
its center. Under optimal conditions, four such pits could be
dug, lined with 60 guage black plastic sheeting (three year
durability guarantee from Biradar Plastics, Malmaddi, Dharwad 580
007 India), and back-filled during a full day of digging. One
hundred twelve pits were dug in this study, taking more than a
month for myself and two assistants to complete. While digging I
noted that most rooting activity occurred in the upper 35 cm of
the soil profile, including most large lateral roots. Roots
smaller than 0.5 cm diameter were sometimes observed to extend
below a depth of 60 cm, but even these were uncommon. For this


39
reason I concluded that soil trenching would be an effective
experimental method to reduce belowground competition for
experimental plants, although it did not prevent competition
deeper in the soil profile. Some target seedling roots were
necassarily cut during trenching in the oldest, 1988 plots, but
damage was minimal to target seedling roots in 1989 and 1990
plots.
NPK fertilizer was added twice to selected 1988 L.
lanceolata seedlings first in June and then again in October of
1991. One hundred grams of Jai Kisaan's "Sampurna" 19:19:19 NPK
particle mix (NO3 19%, P2O5 19%, K2O 19%, Zuari Agrochemicals,
Ltd., Goa, India), were poured into three 30 cm deep, 2 cm wide
soil auger holes, drilled at a distance of 40 cm from each
experimental seedling stem. This NPK treatment was a planned
contrast with the trenching treatment, also imposed on 1988 L.
lanceolata seedlings.
Plot Maintenance
I visited all experimental plants five times during the
research year to perform plot maintenance and to measure seedling
growth. Maintenance duties included: canopy re-guying
operations; clearing plant bases to permit remeasurement of root
collar diameters; and, relabeling individuals that had become
difficult to identify.
The half-way mark of the research year was December 1991 -
the end of the rainy season. I took advantage of this natural
break in season to record shoot height and root collar diameter


40
growth of all experimental seedlings. These data allow
comparison of understory seedling shoot growth for the wet (June-
December) and dry (January-May) portions of the 1991-92 research
year. I expect that most seedling shoot growth would occur
during the wet monsoon, and that dry season conditions result in
slow or even negative growth, due to elevated evapotranspiration
and associated stem shrinkage.
Plant Harvesting, Processing and Measurement
Destructive harvest of all experimental plants occurred from
May 25 June 20, 1992. The 1992 monsoon arrived on June 7 and
slowed harvest of Aksal and Heggekopp blocks. I recorded shoot
height, root collar diameter, and shoot condition for each
surviving experimental plant. I also measured canopy openness,
and soil temperatures 5 cm and 15 cm below the surface.
To estimate shoot biomass, seedlings were clipped at the
point of root collar measurement, cut into 25-30 cm lengths,
sealed in marked envelopes, and transported to my house for
further processing. There shoot fresh weights were recorded
using a DW 2000 g No. 015 IPA electronic top loading balance (IPA
Services, Peenya Industrial Estate, Bangalore 560 058 India),
prior to drying at 70 C (Pearcy 1989) in a 'Biochem' hot air
oven (Universal Biochemicals, Sathya Sayee Nagar, Madurai 625
003, India) from two to six days until dry weights stabilized.
Drying time was a function of shoot diameter, thicker individuals
requiring longer to dry to a constant weight.


41
Finally, 10 individuals each of L. lanceolata and T.
tomentosa were ashed, and the ash weighed to determine average
ash content of each species.
Calibration Estimates Requiring Destructive Measurements
Calibration data both species were obtained in the following
manner. Non-destructive measurements (i.e., shoot height and
root collar basal area) of all experimental plants at the May-
June 1991 start of the study was complemented by destructive
measurement of 23 randomly-selected seedlings outplanted into
MSPs a year earlier, in June 1990. From these 11 L. lanceolata
and 12 T. tomentosa individuals shoot dry weight estimates were
calculated for 1990 L. lanceolata and T. tomentosa experimental
seedlings using root collar basal area regressions. These 23
seedlings were used because my 1990 experimental seedlings could
not be destructively measured at the study's outset. When the
study concluded in June 1992, destructive measurements of all
1990 experimental seedlings provided shoot dryweight estimates
for experimental seedlings that had already been outplanted for
two years when the study began in June 1991 (i.e. my 1989
experimental seedlings). Similarly, destructive measurements of
all 1989 experimental seedlings provided shoot dry weight
estimates for experimental seedlings that had been outplanted
three years prior to the start of the study (i.e. my 1988
experimental seedlings) (see Figure 3-4).


42
Study begins, 1991
Study ends, 1992
Harvest growth data used to
estimate starting biomass of
next older seedling cohort
23 non-study 1990 seedlings
used to estimate starting
biomass of 1990 seedlings
Planted
i
Planted
Age 1
Planted
Age 1
Age 2
I I I
1988 1989 1990
I
ftgj i
Agd 2 A'
Age 3 A'
1991
Harvest
Age 2
Age 3
Age 4
1992
Figure 3-4. Destructive seedling harvest plan used to estimate
shoot biomass of one, two, and three year-old seedlings at the
start of the 1991-92 study
This strategy of using growth data of younger seedlings collected
at the end of the experiment, to estimate initial dry weights of
the next older cohort of seedlings at the start of the experiment
accomplished two objectives. It insured that calibration
measurements were derived from seedlings found growing within the
study's experimental blocks, where site conditions were most
nearly similar to those of other experimental seedlings. It also
minimized the destructive impact of this study on seedling
regeneration within the research area.
Table 3-5 contains the calibration equations used to
estimate shoot dry weights at the June 1991 start of the
experiment for all three seedling age cohorts. Root collar basal
area was found to provide better estimates of shoot dry weight
than shoot height, and was therefore used in deriving the
equations in Table 3-5.


43
Table 3-5. Seedling root collar basal area (cm2) regressions
used to estimate Lagerstroemia lanceolata and Terminalia
tomentosa shoot dry weights (g) at the start of the experiment
1990
1989
1988
L.
y = -10.727 + .325(x)
y = -2.118 + .207(x)
y = -219.64 + .791(x)
lanceolata
R2 = .934
R2 .743
R2 .970
se 2.02, n = 12
se = 4.94, n = 32
se = 26.85, n = 28
T.
y = -11.070 + .419(x)
y = -9.692 + .199(x)
y = -50.574 + .335(x)
tomentosa
R2 .955
R2 = .768
R2 .811
se = 4.49, n = 11
se = 4.21, n = 28
se = 9.27, n = 28
y = shoot dry weight estimate
x = root collar basal area
se = standard error of slope coefficients
n = sample size
Shoot dry weight calibration estimates for June 1991, when
the yearlong study began, were used to calculate shoot relative
growth rates (RGRs) as described by Evans (1972) and Hunt (1978):
loge H2 loge Hi
RGR (grams gram"1 interval"1) =
T2 Ti
where,
Hi = shoot height (cm), root collar basal area (mm2) or
oven-dried shoot biomass (g) at the beginning of the
experimental interval
H2 = shoot height (cm), root collar basal area (mm2), or
oven-dried shoot biomass (g) at the end of the
experimental interval
t2 Ti = experimental measurement interval.


44
RGR, an index of efficiency of plants as producers of new
material (Hunt 1978), permits comparisons of growth for plants of
unequal size. Here it is equivalent to the slope of the natural
logarithm of shoot growth (H) plotted against time (T). This
study compares these RGRs with respect to species, treatment, and
MSP age. RGR comparisons of shoot dry weights were made for the
12 month study period. Shoot height and root collar basal area
RGRs were compared over wet (June-December) and dry (January-May)
season periods, and did not require destructive sampling or
calibration. Testing for differences in RGRs of seedling shoot
height, root collar basal area, and seedling shoot dry weight
were done using PC SAS, Version 3.0 (1994) and the SAS General
Linear Models Procedure (Littell et al. 1994). These results are
presented with other experimental results in Chapter 4.


CHAPTER 4
SILVICULTURAL STUDY RESULTS AND DISCUSSION
INTRODUCTION
This chapter presents results of the shoot growth rate study
conducted on seedlings of native trees growing within Multiple
Species Plantation (MSP) plots. Ancillary information collected
for shoot growth seasonality, damage to experimental plants, and
abiotic conditions beneath MSPs are also presented and discussed.
The chapter concludes by summarizing the potential role of MSPs
in rehabilitation of degraded tropical forests. MSPs represent a
workable ecological response to forest degradation, yet they may
also contribute to the impoverishment of local, forest-dependent
communities. Both reduced biodiversity and tenure/usufruct
explanations for local grievances about MSPs are presented as an
introduction to the second portion of this research the
community forest resource use study.
Seedling Growth Rates During Monsoon versus Dry Seasons
Measurement of changes in shoot extension and root collar
area growth, as well as estimates of shoot dry weight increment
were calculated for both the wet monsoon (June-December) and dry
(January-May) seasons. Comparison of these three growth
parameters for the two periods illustrates that nearly all shoot
growth occurred during the wet monsoon (see Table 4-1).
45


46
Table 4-1. Percentage of annual seedling shoot growth occurring
during monsoon versus dry season, n=174
Season
Shoot
Extension
Root Collar
Area Growth
Shoot Dry Weight Increment
(based on calibration
estimates)
Monsoon
96 percent
100 percent
100 percent
(Jun-Dec)
Dry
4 percent
net negative
net negative growth
(Jan-May)
growth
Dry season conditions resulted in negative root collar area
growth and negative shoot dry weight increment estimates in 73
percent and 60 percent of all experimental plants, respectively.
This result is apparently due to cross-sectional stem shrinkage
caused by excess evapotranspiration. June-December monsoon plant
growth data are, therefore, more meaningful in comparing shoot
growth rates during the one-year research study. Because of the
January-May stem shrinkage, all plant growth results presented
below are derived from the seven month monsoon growth period.
Experimental Plant Damage and Measurement Problems
Seventy of 244 (32 percent) experimental trees were damaged
or died during the one year research period, while 174 trees (68
percent) were not damaged. Fifty-three of the damaged trees were
browsed by domestic animals, 10 were hacked by villagers while
collecting fodder, 5 were uprooted by porcupines, and two died of


47
unknown causes. Tree damage events were recorded when observed,
and all affected trees were thereafter excluded from further
shoot growth calculations. Fifty-two of the 70 (74 percent)
damaged trees were located in the Aksal and Heggekopp blocks.
These two blocks were physically closer to hamlets than the
Siddapur and Hunsekopp blocks, accounting for more frequent tree
damage.
Aksal and Heggekopp blocks also yielded eight of nine net
negative shoot dry weight treatment means for all blocks during
the study. Eight of 24 (33 percent) shoot dry weight treatment
means within these two blocks were net negative. I was unable to
establish Aksal and Heggekopp blocks before the 1991 monsoon
arrived, thus measuring shoots after they had already begun to
expand with monsoon water. Aksal and Heggekopp blocks were
subsequently harvested for final measurement just before the
monsoon returned in 1992, when stems were shrunken to their
maximum extent. This timing inconsistency in shoot measurements
in Aksal and Heggekopp blocks accounts for the net negative
growth recorded there. Beginning and year-end shoot weight
increment data collected from Aksal and Heggekopp blocks are,
therefore, not comparable to Siddapur and Hunsekopp block growth
data, which were properly recorded before the monsoon arrived in
both 1991 and 1992. Because of this temporal/seasonal disparity
in the collection of growth data, frequent net negative shoot dry
weight increment estimates, and greater incidence of tree damage,
all shoot dry weight increment estimates derived from Aksal and


48
Heggekopp blocks was excluded from shoot dry weight RGR
estimates.
Shoot and Root Collar Relative Growth Rate (RGR) Results
Shoot extension in response to increasing periods of
understory exposure was species mediated (see Figure 4-1).
Lagerstroemia lanceolata shoots grew faster than T. tomentosa
shoots during the first two years of understory exposure, but
then slowed dramatically during year three (F = 16.0, p < 0.0002,
n = 77). Though the more understory tolerant species, L.
lanceolata's faster shoot growth was ultimately curtailed by the
closing canopy in three year old MSPs. Terminalia tomentosa
shoot growth was slower, but sustained during the experiment (see
Figure 4-1). Terminalia tomentosa seedlings demonstrate that
even more understory intolerant species are capable of sustaining
themselves beneath a forest canopy when young.
Root collar area growth rates of both of T. tomentosa and L.
lanceolata progressively decreased with increasing exposure to
understory conditions (F = 53.5, p < 0.0001, n = 77; see Figure
4-2). Species-based differences in root collar growth rates were
not significant.


49
Shoot extension of Terminalia
tomentosa and Lagerstroemia
lanceolata -1,2, and 3 years after
outplanting, controls
year 1 year 2 year 3
Figure 4-1. Shoot extension comparison of Terminalia tomentosa
and Lagerstroemia lanceolata one, two, and three years after
outplanting into MSPs
Root collar area growth of
Terminalia tomentosa and
Lagerstroemia lanceolata -1, 2,
and 3 years after outplanting,
controls
Figure 4-2. Root collar area growth comparison of Terminalia
tomentosa and Lagerstroemia lanceolata one, two, and three
years after outplanting into MSPs


50
Shoot dry weight increments for both tree species apparently
increases with increasing exposure to understory conditions, but
this was due to block year interaction (F = 9.13, p < 0.0003, n
= 77), rather than the effect of number of years of understory
exposure (see Figure 4-3).
Shoot dry weight increment of
Term inalia tomentosa and
Lagerstroemia lanceolata-1, 2, and
3 years after outplanting, controls
year 1 year 2 year 3
Figure 4-3. Shoot dry weight increment comparison of Terminalia
tomentosa and Lagerstroemia lanceolata one, two, and three
years after outplanting into MSPs
The next six graphs represent the effects of one, two, and
three years of continuous understory exposure on experimental
plants' shoot growth rates in the first year after release from
understory conditions. Figure 4-4 indicates that experimental
release of L. lanceolata produced significant post-release shoot
extension after one and three years of understory exposure (F =
5.3, p < 0.025, n = 74). The effect of release after two years
of understory exposure is inconclusive.


51
Shoot extension of Lagerstroemia
lanceolata-1, 2, and 3 years after
outplanting, trench & guy (T+G) vs
control (Ctrl)
year 1 year 2 year 3
Figure 4-4. Shoot extension of Lagerstroemia lanceolata one,
two, and three years after outplanting into MSPs, Trench & Guy (T
+ G) vs Control (Ctrl)
Shoot extension of Terminalia
tomentosa -1, 2, and 3 years after
outplanting, trench & guy (T+G) vs
control (Ctrl)
year 1 year 2 year 3
Figure 4-5. Shoot extension of Terminalia tomentosa one, two,
and three years after outplanting into MSPs, Trench & Guy (T + G)
vs Control (Ctrl)


52
Experimental release of T. tomentosa trees from understory
conditions produced uniform post-release shoot growth rates (see
Figure 4-5).
Root collar growth rates also increased for T. tomentosa
seedlings after they were relaesed from two and three years of
understory exposure (F = 3.4, p < 0.068, n = 77; see Figure 4-6),
when compared to controls. These increases occurred within the
context of slowing root collar area growth rates for both release
and control treatments. Release therefore mitigated a general
slowing of shoot growth among all T. tomentosa trees. Figure 4-7
demonstrates a more pronounced mitigation of slowing root collar
area growth for released L. lanceolata trees, regardless of
understory exposure time (F = 7.6, p < 0.008, n = 74).
Root collar area growth of
Terminalia tomentosa-1, 2, and 3
years after outplantlng, trench &
guy (T+G) vs control (Ctrl)
year 1 year 2 year 3
Figure 4-6. Root collar area growth of Terminalia tomentosa -
one, two, and three years after outplanting into MSPs, Trench £
Guy (T + G) vs Control (Ctrl)


53
Root collar area growth of
Lagerstroemia lanceolata-1, 2, and
3 years after outplanting, trench &
guy (T+G) vs control (Ctrl)
year 1 year 2 year 3
Figure 4-7. Root collar area growth of Lagerstroemia lanceolata
- one, two, and three years after outplanting into MSPs, Trench &
Guy (T + G) vs Control (Ctrl)
Shoot dry weight Increment of
Term inalia tomentosa-1, 2, and 3
years after outplanting, trench &
guy (T+G) vs control (Ctrl)
year 1 year 2 year 3
Figure 4-8. Shoot dry weight increment of Terminala tomentosa -
one, two, and three years after outplanting into MSPs, Trench &
Guy (T + G) vs Control (Ctrl)
Post-release increments of shoot dry weights were not
significant, when compared to controls, for either T. tomentosa


54
(see Figure 4-8) or L. lanceolata (see Figure 4-9), regardless of
prior duration of understory exposure. Figures 4-8 and 4-9
suggest, however, that post-release shoot weight increments did
not decrease with increasing exposure to understory conditions.
Shoot dry weight increment of
Lagerstroemia lanceolata-1, 2, and
3 years after outplanting, trench &
guy (T+G) vs control (Ctrl)
year 1 year 2 year 3
Figure 4-9. Shoot dry weight increment of Lagerstroemia
lanceolata one, two, and three years after outplanting into
MSPs, Trench & Guy (T + G) vs Control (Ctrl)
The final three graphs compare the growth inhibition effects
of belowground and aboveground competition on L. lanceolata
plants' shoot growth rates after three years of understory
exposure. They also compare trench (T) to fertilization (NPK)
treatments to identify whether soil moisture or soil nutrients
more limit shoot growth rates. Figure 4-10 shows that while all
four imposed treatments resulted in increased shoot extension
relative to controls, differences between the applied treatments
were not significant statistically (F = 2.2, p < 0.102, n = 31).
Similar, non-significant results were obtained for root collar


55
area (see Figure 4-11) and shoot dry weight increment (see Figure
4-12) when comparing the four non-control treatments.
Shoot extension of Lagerstroemia
lanceolata- 3 years after
outplanting, trench & guy (T+G) vs
(T) vs (G) vs control (Ctrl) vs NPK
Figure 4-10. Shoot extension of Lagerstroemia lanceolata three
years after outplanting, trench and guy vs trench vs guy vs
control vs NPK treatments)
Root collar area growth of
Lagerstroemia lanceolata- 3 years
after outplanting, trench & guy
(T+G) vs (T) vs (G) vs control (Ctrl) vs
Figure 4-11. Root collar area growth of Lagerstroemia lanceolata
- three years after outplanting, trench and guy vs trench vs guy
vs control vs NPK treatments


56
Shoot dry weight increment of
Lagerstroemia lanceolata- 3 years
after outplanting, trench & guy
(T+G) vs (T) vs (G) vs control (Ctrl) vs
Figure 4-12. Shoot dry weight increment of Lagerstroemia
lanceolata three years after outplanting, trench and guy vs
trench vs guy vs control vs NPK treatments
Discussion: Ecological Potential of MSPs
The MSP understory environment promotes shoot growth of
understory seedlings during their first two years after
outplanting. This growth occurred almost entirely during the
June-December wet season. In contrast, shoots often contracted
in cross-sectional area and dry weight during the January-May dry
season.
Abiotic changes beneath MSPs that extend understory
seedlings' effective growing season further into the dry season
would improve their growth performance. Lower soil temperatures,
enhanced and prolonged retention of soil moisture, increased
accumulation of leaf litter, and reduced insolation may all
improve the MSP understory for seedling growth. For example,
noon temperatures 15 cm below the soil surface in May were cooler
beneath a three year-old MSP than beneath a neighboring


57
plantation with open-grown seedlings of the same age (29.5 C vs
35.3 C). Repeated dry season measurements of these abiotic
factors could could test for potential increases in the effective
growing season provided by the MSP environment.
Table 4-2. Comparative shoot and root collar growth of 16 trees,
grown with and without matrix trees in multiple species
plantations (MSPs), n=16
Species
Trees Grown
Trees Grown
With Matrix
Without Matrix
Trees
Trees
Terminalia tomentosa
26.2
31.8
shoot extension (cm/yr)
Lagerstroemis lanceolata
124.5
56.8
shoot extension (cm/yr)
both species (cm/yr)
80.8
44.3
Terminalia tomentosa
2.1
9.1
root collar area (mm2/yr)
Lagerstroemis lanceolata
10.1
9.0
root collar area (mm2/yr)
both species (mm2/yr)
4.8
9.1
The growth form of understory seedlings also improves with
the presence of fast-growing, nitrogen-fixing matrix species in
MSPs, relative to open-grown seedlings. Table 4-2 compares mean
shoot and root collar basal area growth for eight seedlings (four
L. lanceolata and four T. tomentosa) growing in the absence of
matrix trees, versus equal numbers of seedlings growing beneath


58
matrix trees. These seedlings were all located in the 1989 plot
of the Siddapur block. Shade-tolerant L. lanceolata grew more in
shoot height under matrix trees than it did in the open. L.
lanceolata's root collar area growth was similar, whether growing
under matrix trees or not. Less tolerant T. tomentosa' s shoot
growth was similar, whether shaded or not. Terminalia tomentosa
did grow more in root collar cross-sectional area in the open.
However, growth form of both species became branched and bent
when growing in the open which is silviculturally undesirable.
I also witnessed the beneficial effects of MSP matrix trees
on seedling growth in a Tirtahalli plantation. One-half of a
stand of three-year old mixed seedlings that had not grown
satisfactorially was replanted with three m spacings of Acacia
auriculiformis and Casuarina equisetifolia, along with a new
cohort of native seedlings. When visiting this plot three years
later, both older and younger native seedlings in the portion of
the stand receiving supplemental planting consistently displayed
greater stem and root collar growth than older seedlings that had
received no replanting.
These observations indicate that matrix plantation trees do
not adversely affect the early growth of companion understory
seedlings. Over the longer term, matrix species should not
interfere with understory seedling growth if they are
commercially thinned early and repeatedly. Prescribed bi-annual
thinnings of matrix species should culminate in complete
overstory removal after approximately 14 years. Karnataka
foresters should nevertheless exercise care in the selection of


59
matrix species to preclude the introduction and/or spread of
invasive and exotic species. Fast-growing native species with
suitable growth characteristics should be selected, tested, and
used as MSP matrix species whenever possible.
Finally, the MSP environment also appears to facilitate
natural recruitment and succession, when compared to plantations
without matrix species. This phenomenon is indicated by the
early appearance of unplanted species, like Syzygium
cumini/Eugenia jambolanum (guava), Cinnamomum zeylanticum
(cinnamon), Ixora grandiflora, Calicopteris floribunda, Piper
nigrum (wild black pepper), Bulbophyllum spp. orchids and other
epiphytes in plantations near Tirtahalli.
Local Misgivings about MSPs: Reduced Biodiversity and Forest
Reservation
Villagers living within the Sirsi Forest Division freely
express their displeasure with MSPs particularly the conversion
of minor forest areas to MSPs, as described in Chapter 1. They
object that minor forests, degraded though they often are, still
produce a wide variety of subsistence products for local people.
A forest product use survey conducted by the author in 1992
demonstrated the active use of 67 plant species for 63 different
purposes, including: foods, medicines, fodder, building
materials, tools, household implements, soaps, cosmetics,
sporting activities, and prayer offerings (see Appendix D), to
name a few. These 67 species are not a complete representation


60
of minor forest plant diversity, but they reflect the multiple-
use value of minor forests to local people.
Conversion of minor forests to MSPs precipitates ecological
changes that reduce their utility to local communities. Site
preparation for MSP establishment often kills extant plants
immediately, while the plantation trees outcompete many remaining
multiple-use species for soil resources, growing space, and
light. In the short term, species diversity is reduced by the
establishment of MSPs on minor forest sites even in plantations
consisting of 20 or more planted species. As MSPs mature,
natural recruitment of native species becomes more evident.
Enhanced recruitment ultimately allows site biodiversity to
surpasses that of degraded minor forests. However, this recouped
diversity may favor commercial timber species over plants having
local-use attributes. Twenty or more years and several thinning
operations may be required before minor forest sites occupied by
MSPs again provide the multiple-use subsistence benefits estimed
by local forest dwellers. This is too long for most forest-
dependent people to wait.
In the interim, conversion of minor forests to MSPs will
cause further reductions in forest areas where local harvest of
non-timber products is still permitted by Karnataka State forest
laws. Limitation of public access to forests and the non-timber
forest products they provide is a process that has long-standing
historical precedent. The following socio-economic study begins
by documenting the progressive reservation of Indian forest
resources by state authority. Reservation of both forest areas


61
and specific forest products by Indian forest law has spread and
intensified over the past 150 years. In this context, MSPs can
be viewed as the most recent manifestation of legalized state
appropriation of forest resources from local purview.


CHAPTER 5
FOREST RESOURCES IN PENINSULAR INDIA:STATE APPROPRIATION AND
LOCAL EXCLUSION
The historical record, both before and after Indian
independence, documents the progressive exclusion of local people
from forests as a consequence of state appropriation of land.
This appropriation gained momentum as the Indian state
capitalized the wealth of its forests creating demand for its
forest products in markets across South Asia and around the
world. Contemporary popular attitudes about forest management,
and multiple species plantation (MSP) silviculture in particular,
issue from historical conflict between state forest bureaucracies
and forest-dependent communities in peninsular India. Recent
rehabilitation of degraded forest areas using MSPs has served to
extend local access restrictions to minor forests, areas where
local people exercise non-timber use privileges in the absence of
such plantations. Therefore, MSPs are viewed locally as a recent
form of a centuries-old process of exclusion from forests.
This chapter refers to historical use of Indian forest
resources as the base from which progressive state appropriation
and capitalization of forests evolved. I adopt a conceptual
framework to describe the step-by-step capitalization of Indian
forest resources. I then present historical information about
forest conservation, silviculture, and recent forest encroachment
by villagers in the Sirsi Forest Division my research area in
62


63
northwestern Karnataka. Finally, I introduce forest resource use
surveys as investigative tools to 1) document local knowledge and
use of forest resources; and 2) to describe impacts of MSPs on a
local forest-dependent community.
The Historical Context
Prior to the consolidation of British rule in peninsular
India, what are now state-owned forests were controlled by
ethnically homogeneous groups, either agrarian communities or
hunter-gatherer societies (Gadgil 1989). By 1700 agrarian groups
had already deforested the coastal plains and much of the
interior plateau region of southern Indian for agricultural use
(Richards 1985). Indigenous regional rulers, such as the 18th
century's Haider Ali, also removed premium woods from the Western
Ghats forests of Kanara District to build ships along the Malabar
Coast (Bombay Gazetteer 1883). Such princes were often
acknowledged to exercise formal authority over forests (Ashton
1988, Bentley et al. 1987). Local groups nevertheless enjoyed de
facto use rights to non-agricultural lands in their vicinity
(Gadgil 1989). Evergreen forest tracts, or kans, were important
sources of food, fuel, and fiber for local subsistence. They
also provided the organic matter necessary to produce
agricultural crops on local wood-ash or kumri swidden plots, and
leaf mulch to fertilize intensively managed spice gardens. Over
time some evergreen kans in North Kanara have been designated as
sacred groves, indicating a local reverence for them.


64
Because human survival depended largely on the sustained
productivity of neighboring forests, local incentive to protect
these assets was strong. In the Himalayan foothills region, Guha
(1989) describes an intimate and reverential attitude of local
people towards the hill forests that have historically provided
their life support and protection from slope erosion. Likewise
in peninsular India, clan and community-based institutions arose
to manage local forests for posterity and to control non-local
access to local forests (Gadgil and Guha 1992). The operation
and power of local institutions became legitimized as a
consequence of their ability to impose penalties for unsanctioned
use of local forest resources. This was often possible because
forested regions were isolated from political and economic
centers of power on the Indian plains, leaving local forest
communities both politically and ecologically independent
(Richards and McAlpin 1983).
Local communities did protect and maintain forest resources,
as witnessed by early British accounts of the condition of
India's peninsular forests, including the Western Ghats region
(Cleghorn 1861, Duff 1826,). Even vast natural stands of teak
are reported to have been in excellent condition in the Haliyal
area of Kanara District (Bombay Gazetteer 1883) when the Indian
Forest Act of 1878 became law. This legislation formally
inaugurated a period of conflict over Indian forest resources
that continues to the present. The period is characterized by
intensified exploitation of forests to meet state goals and


65
interests, and the progressive exclusion of local people from
their forest life-support system.
British Colonial Administration of Indian Forest Resources
The British colonial administration in India displayed a
marked indifference to Indian forest resources during the 18th
century. Nascent European demand for exotic spices, gums, oils,
and tropical timber prompted some commercial felling of Indian
forests, though on a limited scale (Bombay Gazetteer 1883).
Early written records concerning Indian forests, fishing, and
grazing resources are insignificant when compared to colonial
preoccupation with agrarian resources and property relations
concerning ownership and cultivation of arable land (Grove 1990,
Richards and Tucker 1988). Subsidies and inducements encouraged
cultivators to clear lands along India's forest frontier.
Forests were viewed more as impediments to the expansion of
cultivation and its associated revenue potential. Along the
Malabar Coast in southwestern India, no forests were turned into
protected reserves until 1806 (Guha and Gadgil 1989).
In 1816 the first Conservator of Forests was appointed in
India to sanction the East India Company's teak (Tectona grandis)
extraction monopoly (FAO Forestry Paper 55 1985) Exploitation
of abundant natural teak stands began in Malabar and Travancore
to supply timber for construction of British navy ships, since
imperial forests in North America had been surrendered as a
result of the American Revolution. More forests were felled to
plant coffee, tea, cardamom, and other export crops after the


66
East India Company transferred India's administration to the
British Crown in 1858. Establishment of the first
scientifically-managed government plantations began from 1865-
1870 (Agarwala 1985).
Construction of India's first railways in the late 19th
century initiated significant, large-scale exploitation of South
Asian forests. From 1870 to 1910 railway networks expanded
seven-fold, from 7,678 to 51,658 kilometers (Guha and Gadgil
1989). The larger network required numerous railway ties, that
soon became a locally scarce commodity. In 1864, according to
the wishes of the Governor-general, Lord Dalhousie, India's first
forest department was established to meet an annual demand of
1,000,000 ties for the railway companies. Experienced German
foresters, of whom Inspector-General of Forests Dietrich Brandis
(Richards and McAlpin 1983) was the most prominent, were hired by
the British to place government forests under a rational form of
European silviculture.
The Indian Forestry Act of 1865 sanctioned the establishment
of government forest reserves, and extended the state monopoly of
teak to other commercially important species, including rosewood
(Dalbergia latifolia), sandalwood (Santalum album) and ebony
(Dlospyros ebenum) (FAO 1985). This legislation also claimed
government authority to set forest use rules and to impose
penalties for use infractions. While local access to forests for
grazing, fuelwood collection, and timber felling was still
permitted in practice, such use could henceforth be regulated by


67
government decree. This established a legal structure to
sanction subsequent state demarcation and reservation of forests.
The Indian Forest Act of 1878 consolidated absolute
government authority over utilization and management of newly
designated reserved forests (Grove 1990). By 1882, 34 square
miles (4.9 %) of forests had been reserved in the Sirsi Forest
Sub-Division, out of a total of 700 square miles. In Kanara
District as a whole, 684 (19 %) of 3,549 square miles of forests
had been reserved (Bombay Gazetteer 1883) The 1878 laws also
established so-called protected forests, areas that would become
reserved forests after demarcation and preparation of
silvicultural prescriptions.
Understanding that future production of timber could not be
guaranteed if customary local forest use rights continued, the
government also placed restrictions on local use of protected
forests under the 1878 act. Nineteen species of trees and four
forest products became reserved solely to the government. These
species were: Tectona granis, Santalum album, Dalbergia
lat folia, Diosporos ebenum, Pterocarpus marsupium, Calophyllum
elatum, Artocarpus integrifolia, A. hirsuta, Vitex altissima,
Ougenia dalbergioides, Lagerstroemia microcarpa, Gmelina arbrea,
Terminalia tomentosa, T. chebula, Xylia dolabriformis, Thespesia
populnea, Acacia catechu, A. concinna, and Bassia latifolia. The
four reserved products were: fruits of Terminalia chebula
(hirda), fruits of Acacia concinna (shigikai), flowers of Bassia
latifolia (ippe huva), and latex from Acacia catechu (kath).


68
These products, such as hirda fruits, could only be gathered by
locals under forest department contract.
The colonial government also redefined previous customary
forest use rights granted to local people as use "privileges" in
protected forests. The chief privileges still permitted were: 1)
clearing patches of forest for wood-ash or swidden tillage; 2)
lopping leaves for green manuring of spice and betelnut palm
gardens garden owners were restricted to lopping only in
designated soppina betta/betta forests tracts that were no more
than eight times the area of their garden holdings; 3) growing
pepper in some evergreen kan forests; 4) free grazing in
designated forest tracts; and 5) free or cheap wood fuel and
bamboo collection (Bombay Gazetteer 1883). The sale or barter of
protected forest products was strictly prohibited. The penalty
for doing so was often the loss of all collection privileges.
Village forests were designated close to villages, to be
administered by village councils (Village Forest Panchayats) for
multiple use by local people. Local use of reserved species and
products was also illegal in these village forests.
The Indian Forest Act of 1878 formally initiated the process
of supplanting village-based customary forest use agreements by
centralized government. Physically limiting local access to
forests, and progressively converting local forest resources into
commercial commodities for distant markets were pivotal elements
in this transfer of authority (Gadgil and Guha 1992). Before
1878, forests had been exploited in a non-intensive manner.
Trade and commercialization of forest-derived surpluses had been


69
limited to commodities like wild pepper and cardamom, medicinal
plants, sandalwood, ivory, and a few timber species. Agrarian
communities on India's plains had little interest in Kanara's
forests for other than a small number of such products, and
extraction of these did not have a serious impact on the
ecological function of Kanara's forests. After 1878, forests
were considered to be sources of revenue from timber production.
Silvicultural strategies to maximize timber revenues led to
changes in forest species composition that favored conifers over
mixed oak hardwood/conifer forests in northern India, and pure
stands of teak over mixed evergreen hardwood forests in
peninsular India (Guha 1989) .
The 1878 laws also initiated the ecological separation of
forests from agricultural activities (Guha and Gadgil 1989).
Once reserved, forests could no longer legally provide inputs to
maintain soil fertility in neighboring fields and gardens. The
threat of falling agricultural yields prompted the Forest Policy
Resolution of 1894 (Haeuber 1993), which stressed the need to
clear forests for local agricultural extension. A tightening
vice of accelerated forest conversion on the one hand and
continued forest reservation on the other squeezed local forest
use into shrinking forest tracts of inferior quality.
Finally, the 1894 laws modified forest classification into
more nearly its present form. Reserved forests were
distinguished as either Protective or National Forests, village
and less productive forests were renamed Minor Forests, and
grazing areas became Pasture Lands (Haeuber 1993). Betta Forest


70
zones and their classification were maintained. Formal
prescription of bettas as lopping forests would be delayed,
however, until the 1924 Forest Act. The 1924 Act would also set
limits on local usufruct privileges in Minor Forests.
Ecology and Aesthetics of Forests: Colonial Perceptions
While acquiring a global reach over natural resources for
the purposes of trade, some Europeans also asserted control over
their territories based on ecological considerations. A small
number of 19th century colonial forest conservationists promoted
forest reservation in dozens of colonial territories (Grove
1990), including India, to redress environmental degradation.
This group popularized a theory linking deforestation to
undesirable rainfall and climatic changes (Grove 1990). A
minority of British officials warned that the unchecked expansion
of agricultural lands would, through a process called
desiccation, cause the loss of valuable timber resources, mass
deforestation, and environmental cataclysms throughout India
(Richards 1985). Informed scientific authorities of colonial
island territories reported the destruction of soil and water
resources when forested uplands were converted from forests to
agricultural lands.
Another perception that spurred some British to espouse a
forest reservation agenda had an aesthetic or Edenic slant (Grove
1990). A paradisal image of pristine tropical lands was strongly
imprinted on European minds. With time and travel these views
were transformed into fascination for collection and
classification of tropical flora, or game hunting of tropical


71
wildlife. The boundaries of many ecological reserves were,
therefore, defined by colonial states to set aside regions of
diverse flora and fauna for the enjoyment and recreation of
Europeans.
Local Resistance to Capitalization of Forests
Finding their entry to local forests barred by legal
injunction in the 19th century, local communities petitioned
governments for compensation. In the years prior to 1878, many
such protests were diffused by flexible and well-informed forest
officials, who acknowledged many sustainable local forest use
practices and recognized protest over their proscription as
legitimate. Cleghorn (1861) acknowledged that local tribes were,
in fact, less destructive of forests than invading plains
cultivators, and investors in plantations. But petition and
protest often went unrewarded, and were entirely ignored after
the passage of the Indian Forest Act of 1878.
Finding petition unsuccessful, law-breaking in the form of
illegal wood gathering, grazing, tree felling, and smuggling of
state forest resources became common. Arson of state commercial
forests also served to convey indigenous displeasure at being
barred from ancestral forest lands. However, locals were careful
to destroy only single-species stands that symbolized the
interests of capital, and not the mixed species stands that
embodied multiple-use attributes from a subsistence perspective
(Guha and Gadgil 1989).
In an advanced stage of resistance, alliances between
traditional elites and peasants emerged when British denial of


72
customary forest use rights became intolerable across Indian
classes and castes(Grove 1990). From the crown's perspective,
control of forests then became tantamount to control of political
dissent, since organized forms of resistance appeared to openly
flaunt British authority. Forest conservancy was intensified,
and forcible suppression was sometimes used to quell these
organized insurrections. The threat of locally-caused
destruction of forests was often used as a pretext for enhanced
political suppression of Indians.
Whether intended to sustain the colony's resource endowment,
to provide short-term profit and pleasure, or to maintain
political power, colonial reservation of forests led to a state
monopoly of India's forests.
Management of Indian forests in the early 20th Century
Extension of colonial authority over forests was sanctioned
by the Indian Forest Act of 1927. This act reiterated the forest
management framework of 1878, while also allowing the government
to assume control of many forests that it did not already own
(Haeuber 1993). It also enumerated situations in which forest
department officials could arrest without a warrant those accused
of forest resource theft.
Administration of forests was placed under federated
provincial auspices in the Government of India Act of 1935, a
decade prior to Indian independence. Henceforth, forest
administration would be directed by state governments, with
central government involvement limited to forestry policy,
education, and research. This historical delegation of authority


73
explains wide variations in the programs, methods, and
effectiveness of forest administration to be found among the
states of modern India. Contemporary discussions about Indian
forestry or forest administration must, therefore, be prefaced by
clear reference to a particular state or territory. Such
differences among states not withstanding, rates of forest
conversion increased throughout India after independence.
Growing population, impoverishment of the environment, and global
economic forces joined together to insure the conversion of all
but India's most remote and inaccessible natural forests.
A final reformulation of forest policy in British India came
in a 1944 statement issued by the inspector-general of Indian
forests. It represented a last effort to reconcile the
conflicting management priorities of state forestry officials and
Indian nationalists. The former perceived stricter control of
local forest access and use as essential to successful timber
production in state reserves and protected forests. The latter
called for formal recognition of the dependence of India's rural
poor on forest resources for their survival. The 1944 statement
gave the needs of agricultural production priority over
production forestry, and local subsistence priority over the
generation of state revenue (Haeuber 1993). However, this
compromise had little impact on the day-to-day management
activities of state foresters. Enforcement of forest protection
laws went unchanged.


74
Post-Colonial Management of Forest Resources
After independence the newly formed Central Board of
Forestry formulated the 1952 Government of India Resolution. It
recommended that forest lands occupy one-third of all Indian
territory, and that 60 percent of hill regions and 20 percent of
the plains should remain forested. Actual percentages continued
to decline below these recommendations, however, as few funds
were earmarked for reforestation. The growing commercial
emphasis on production forestry to promote national self-reliance
became the new nation's priority. Previous rights of indigenous,
tribal forest-dwellers to collect fuelwood, timber, and fodder in
reserved forests were progressively revoked (Haeuber 1993), while
the ability of state governments to reserve forest lands grew
apace. Indeed, expansion of reserved state forests accelerated
after independence. In 1992 the modern Sirsi Forest Division
contained approximately 70,000 ha of reserved forest 41 percent
of all forests. Fifty thousand ha of minor forest, and 50,000 ha
of betta forest comprised the remaining divisional forests (1992
interview with divisional forestry officer).
With the integration of princely states into the Indian
Union in the early 1950s, royal hunting preserves of forests,
woodlands, and grasslands also came under the purview of
empowered state departments of forestry. Local communities that
had previously relied on such lands to provide a variety of
household, farming, fodder, and dietary requirements found that
their use of state-managed forests had become entirely regulated.


75
Any of their remaining use privileges were now formally described
as "concessions".
The Indian National Commission on Agriculture (NCA) forest
management recommendations of the early 1970s gave top priority
to industrialization of the Indian forestry sector as the vehicle
to boost timber exports and foster import substitution. The NCA
blamed declines in forest commercial productivity on local forest
encroachment and illegal removal of forest products. Their
recommendations emphasized conscription of all unclassified
forests into reserved forests as soon as possible, in order that
local forest use concessions be terminated "as far as possible in
the manner provided in the forest law." (Government of India,
Report of the National Commission on Agriculture, Part IX,4:8)
To compensate local people for their loss of these forest use
concessions, forest department distribution depots were
established to sell forest products to them at cost. Today, many
villagers remain embittered by having to purchase from government
depots what they formerly gathered in local forests at no charge.
The NCA also recommended reclassification of forests to
conform with an industrial production orientation. Uplands,
steep slopes, and riparian zones were consolidated as protection
forests. Production forests were of three types: low-value mixed
quality forests targeted for complete felling and replanting;
valuable forests that could still be economically improved by
conversion planting; and inaccessible forests that would be
exploited after forest roads reached them. The most deforested
tracts were reclassified as social forests. These included


76
degraded minor forests, wastelands, village commons, and road and
rail right-of-ways (Viksat 1990, Haeuber 1993). Local community
use of non-reserved products obtained from social forests was
offered in compensation for lost local access to newly-classified
protection and production forests.
State governments failed to invest in replanting or other
rehabilitation schemes in social forests, favoring investment in
production forests instead. Policy makers interpreted social
forests to be commercially expendable tracts to which local use
pressure could be redirected in lieu of more valuable production
forests (Shiva 1988).
Forest management legislation initiatives in the 1980s
heightened debate over the future of Indian forests.
Jurisdictional conflict between state and federal agencies over
control of forests was touched off by the Forest Conservation Act
of 1980. This amounted to a legislative last stand at the
federal level to prohibit clearance or conversion of forests to
other land uses without parliamentary approval (Government of
India Report of the National Commission on Agriculture, Part IX).
State governments balked at this interference from the central
government. However, state forestry departments were quick to
seize upon this legislation as an opportunity to strengthen state
control of forest lands particularly in the area of law
enforcement. The 1980 Act strengthened the severity of fines and
punishments for illegal activities in state forests. It granted
forest officers the right to arrest offenders without a warrant
for tampering with boundaries, setting fires, gathering reserved


77
products, and cultivating forest lands (Haeuber 1993) Local
forest use concessions in all forest types were further
restricted. The act also called for the initiation of forest
rehabilitation in degraded forests and other wastelands
throughout the country. Soon thereafter, the proposed Indian
Forest Act of 1981 recommended authorizing state governments to
reclassify any lands they wished to as "forests" (whether
forested or not), in order to enhance public control over both
tree and non-tree derived forest resources (Kulkarni 1983).
Since 1981, the dispute over disposition of India's forests
has continued between state and federal authorities on the one
hand, and state forest departments and forest dwellers on the
other. Government officials blame villagers for their
indiscriminate use and destruction of forests, while the latter
blame government-sponsored industrial forestry operations for
conversion of India's remaining natural forests. Recent warnings
about the environmental consequences of Indian deforestation
(Shiva 1990) and its possible mitigation do not seem to have made
a serious impact on those wielding political influence. Public
media battles continue over control of India's residual forest
wealth, rather than over its maintenance and reproduction.
Capitalization of Indian Forest Resources: An Analytical
Framework
The historical capitalization of Indian forest resources
described above is summarized by Nadkarni's (1989) analytical
framework of forest conversion and capitalization. Nadkarni


78
(1989) outlines three historical stages of forest use and
conversion: the pre-commercial-cum-pre-capitalist stage; the
initial commercial stage; and the highly commercialized stage.
In the first stage, nature's forest bounty is an abundant and
free gift for one's personal use not intended for commercial
sale. Forests are an important source of many subsistence
products for household use. Unsophisticated technology precludes
regional-scale conversion of forests for subsistence purposes.
Destruction of forests sometimes does occur, however, because the
resource is not considered scarce. The use of fire as an
effective tool in preparing land for short-term agriculture is an
example of such destruction.
British officials generally considered the customary burning
of forest tracts in Indian swidden agriculture, or jhunting, as a
primitive and uneconomic landuse practice to be discouraged
(Grove 1990) Yet j hunting had been practiced for generations in
an apparently sustainable manner by agrarian societies over large
tracts of the interior Indian Plain (Ramakrishnan 1980) Only a
small percentage of land was under cultivation at any one time,
while fallow areas were rested to naturally recoup their
fertility for future cultivation. Large expanses of forest cover
were always maintained within traditional jhuming systems.
In the second or initial commercial stage, a perception of
resource scarcity arises as external market forces begin to
assert control over forest resources, at the expense of local
forest-based communities. Emphasis on intensified production of
a few commercially viable timber species and products


79
necessitates the exclusion of local people from forests. Once
this occurs, traditional common property stewardship arrangements
begin to break down (Bromley 1991) Local princes, small
merchants and savkars (merchant moneylenders) employ formerly
autonomous members of local communities to extract high value
forest products in exchange for wages (Richards and McAlpin
1990). Agarwal and Narain (1989) describe this as the
progressive alienation of local communities from their forests.
Bromley and Cernea (1989:35) describe this transformation as
follows:
Common property is in essence 'private' property
for the group and in that sense it is a group decision
regarding who shall be excluded. But when options for
gainful and promising exclusion of excess population
have been destroyed by surrounding political,
cultural, or economic events, then those engaged in
the joint use of a resource are left with no option
but to eat into their capital.
In the third, highly commercialized stage, forest resources
become the raw materials of external, forest-based industries.
Large, mechanized, and centralized factors of industrial
production subjugate regional merchant capital. Local access to
forests is further diminished as commercial forestry promotes
controlled conversion of native forests (Bee 1990) and
regeneration of managed plantations. An open access free-for-all
of intensified degradation occurs in the few natural forests to
which local access remains less restricted (e.g. village or minor
forests) The impoverishment of local communities proceeds as


80
these scarce forest resources are destroyed by those who most
depend upon them for subsistence (Richards 1985, Kaur 1991).
As state control of forests expands, forest-dwelling
communities find a bureaucracy of state forest officials
positioned between themselves and the now restricted forests. To
obtain access to state lands, peasants must find favor with
department officials or with neighbors powerful enough to
influence forest department staff (Blaikie and Brookfield 1986).
If either of these strategies fails, individuals are often forced
to survive by ignoring forest access laws to extract their basic
material needs from public forests. Given this situation, in
which forests are under attack from all quarters, Nadkarni
maintains that management of forest resources must finally enter
a fourth, enlightened stage of systematic and rational
management. This stage emphasizes conservation and regeneration
of forest resources for both local subsistence and regional
commercial needs (FAO 1985, Agarwala 1985). A model for
enlightened, joint forest planning and management between state
foresters and local people will be presented in the final chapter
of this study.
Forest Policy and Management in Northwestern Karnataka State
In the 1935 Government of India Act, promulgation of
constitutional laws regarding natural resources remained a
federal prerogative, while practical management of forests fell
to state departments of forestry. The Karnataka Forest
Department's (KFD), descending directly from colonial precedent,


81
was inaugurated with the establishment of Karnataka 1956. Due to
the relative wealth of forest resources in Karnataka, state
foresters assumed conservancy of this natural legacy in as
serious a manner as did their colonial predecessors.
Karnataka's forests are among India's most diverse in
biological terms, but for legal purposes they comprise three
primary types: reserved forests, protected forests, and minor or
village forests. In reserved forests only limited single tree
felling occurs, and this is done exclusively by state foresters.
From 1985 until 1991 an even more restrictive policy of only dead
and down tree removal was adopted by an environmentally-minded
chief conservator of forests. In contrast, protected forests
include both natural and manipulated stands under commercial
silvicultural treatment. An increasing number of protected
forests have been converted into plantations as their mature
trees are harvested. The state's most degraded stands have been
classified as minor or village forests. These have been
designated for local harvest of non-timber products in specified
quantities.
A fourth class of forests is found only in the upper Ghats
of Yellapur, Sirsi, and Siddapur Taluks (sub-districts)
Soppina betta forests. These forests were first designated as
so-called lopping forests in the late 19th century, providing
green manure/mulch usufruct privileges to those who owned betel
nut (Areca catechu) gardens. Eight to nine acres of soppina
betta lopping forest were traditionally allocated for every one
acre of spice garden owned by landed cultivators. Spice garden


82
owners with betta privileges have historically had no formal role
in betta forest management decisions made by the state.
Private tree felling is prohibited in all forests, with the
exception of betta forests, where authorization to remove single
trees for subsistence purposes has been occasionally granted to
spice garden owners since 1977. The highly degraded condition of
minor forests, however, attests to the historical inability of
state foresters to enforce felling regulations. Conversely, the
will to enforce felling regulations is often lacking, as local
forest officials sometimes receive payment to look the other way
when felling occurs.
Like the British before them, Karnataka's foresters follow
prescriptions to enhance the biomass productivity of selected
timber species, often in uniform plantations (Agarwala 1985). In
this market-oriented silviculture, local people receive jobs as
forest department personnel or daily wage laborers often the
only form of seasonal employment locally available. Forest
managers take silvicultural control of forest ecosystems as
quickly as technology and finances permit. Economic goals drive
all stages of such production forestry.
From the 1960s to mid-1980s several unrelated events began
to discourage Karnataka foresters from continued planting of
single species plantations. The invasiveness of exotic
understory plants, particularly Eupatorium sp., massive insect
defoliation of teak plantations, and mismatching of plantation
species to inappropriate sites made the maintenance costs of many


83
marginal stands greater than the expected economic returns. A
reassessment of silviculture practices began.
Forest policy initiatives of the 1980s began to stress
rehabilitation of India's degraded forests and wastelands. This
new policy climate presented Karnataka foresters with an
opportunity to assert silvicultural control over state forest
lands that had been previously neglected particularly minor
forests. By 1982 the first of what would become annual plantings
of multiple species plantations (MSPs) began. Replanting of
degraded forests, especially minor forests, to MSPs gained
momentum during the 1980s. The silvicultural component of this
study was conducted in MSPs planted on minor forest lands in
1988, 1989, and 1990.
Prevailing opinion of foresters about MSPs centered on the
need to rehabilitate impoverished forest lands forests that had
been damaged through irresponsible overuse by local people.
Though this opinion was often justified, foresters failed to
acknowledge two characteristics of minor forests and MSPs that
were abundantly clear to local people: 1) though degraded, minor
forests still provided local people with many products necessary
for their welfare; and 2) MSP establishment effectively excluded
local people from forests where they had previously enjoyed
access to collect non-timber products.


Full Text

PAGE 1

5(+$%,/,7$7,21 2) '(*5$'(' 7523,&$/ )25(676 ,1 ,1',$n6 :(67(51 *+$76 6,/9,&8/785$/ $1' 62&,2(&2120,& ,03/,&$7,216 2) 08/7,3/( 63(&,(6 3/$17$7,216 %\ '21$/' ,$1 )/,&.,1*(5 $ 7+(6,6 35(6(17(' 72 7+( *5$'8$7( 6&+22/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,1 3$57,$/ )8/),//0(17 2) 7+( 5(48,5(0(176 )25 7+( '(*5(( 2) '2&725 2) 3+,/2623+< 81,9(56,7< 2) )/25,'$

PAGE 2

&RS\ULJKW E\ 'RQDOG ,DQ )OLFNLQJHU

PAGE 3

:LWK WKH EDVH RI LJQRUDQFH UHDFWLRQ DULVHV ZLWK WKH EDVH RI UHDFWLRQ FRQVFLRXVQHVV DULVHV ZLWK WKH EDVH RI FRQVFLRXVQHVV PLQG DQG ERG\ DULVH ZLWK WKH EDVH RI PLQG DQG ERG\ WKH VL[ VHQVHV DULVH ZLWK WKH EDVH RI WKH VL[ VHQVHV FRQWDFW DULVHV ZLWK WKH EDVH RI FRQWDFW VHQVDWLRQ DULVHV ZLWK WKH EDVH RI VHQVDWLRQ FUDYLQJ DQG DYHUVLRQ DULVH ZLWK WKH EDVH RI FUDYLQJ DQG DYHUVLRQ DWWDFKPHQW DULVHV ZLWK WKH EDVH RI DWWDFKPHQW WKH SURFHVV RI EHFRPLQJ DULVHV ZLWK WKH EDVH RI WKH SURFHVV RI EHFRPLQJ ELUWK DULVHV ZLWK WKH EDVH RI ELUWK DJLQJ DQG GHDWK DULVH WRJHWKHU ZLWK VRUURZ ODPHQWDWLRQ SK\VLFDO DQG PHQWDO VXIIHULQJV DQG WULEXODWLRQV 7KXV DULVHV WKH HQWLUH PDVV RI VXIIHULQJ :LWK WKH FRPSOHWH HUDGLFDWLRQ DQG FHVVDWLRQ RI LJQRUDQFH UHDFWLRQ FHDVHV ZLWK WKH FHVVDWLRQ RI UHDFWLRQ FRQVFLRXVQHVV FHDVHV ZLWK WKH FHVVDWLRQ RI FRQVFLRXVQHVV PLQG DQG ERG\ FHDVH ZLWK WKH FHVVDWLRQ RI PLQG DQG ERG\ WKH VL[ VHQVHV FHDVH ZLWK WKH FHVVDWLRQ RI WKH VL[ VHQVHV FRQWDFW FHDVHV ZLWK WKH FHVVDWLRQ RI FRQWDFW VHQVDWLRQ FHDVHV ZLWK WKH FHVVDWLRQ RI VHQVDWLRQ FUDYLQJ DQG DYHUVLRQ FHDVH ZLWK WKH FHVVDWLRQ RI FUDYLQJ DQG DYHUVLRQ DWWDFKPHQW FHDVHV ZLWK WKH FHVVDWLRQ RI DWWDFKPHQW WKH SURFHVV RI EHFRPLQJ FHDVHV ZLWK WKH FHVVDWLRQ RI WKH SURFHVV RI EHFRPLQJ ELUWK FHDVHV ZLWK WKH FHVVDWLRQ RI ELUWK DJLQJ DQG GHDWK FHDVH WRJHWKHU ZLWK VRUURZ ODPHQWDWLRQ SK\VLFDO DQG PHQWDO VXIIHULQJV DQG WULEXODWLRQV 7KXV WKLV HQWLUH PDVV RI VXIIHULQJ FHDVHV 3DWLFFDVDPXSSDGD 6XWWD 6DP\XWWD 1LND\D ;,, ,f

PAGE 4

$&.12:/('*0(176 ZLVK WR WKDQN 9ROXQWHHUV LQ $VLD ,QF 6WDQIRUG &DOLIRUQLD IRU SRVWLQJ PH LQ 6RXWKHDVW $VLD DV DQ DSSURSULDWH WHFKQRORJ\ YROXQWHHU VSXUULQJ P\ LQWHUHVW LQ FRPPXQLW\ UHVRXUFH ZRUN 0\ SURIHVVLRQDO DVVRFLDWLRQ ZLWK
PAGE 5

7KH SUDFWLFH RI 9LSDVDQD 0HGLWDWLRQ DV WDXJKW E\ 6 1 *RHQND KDV VWUHQJWKHQHG P\ VHQVH RI KXPLOLW\ DFFHSWDQFH DQG JRRGZLOO WRZDUG RWKHUV )LQDOO\ WKH PHPRU\ RI P\ PRWKHU -DQH 6OXVVHU )OLFNLQJHU DQG KHU OLIHORQJ DSSOLFDWLRQ RI WKRVH DGDJHV SUHWW\ LV DV SUHWW\ GRHV DQG LI \RX FDQnW VD\ DQ\WKLQJ QLFH GRQnW VD\ DQ\WKLQJ DW DOO VWUHQJWKHQV P\ HIIRUWV WR SDVV WKHVH SHDUOV RQ WR P\ VRQV 3DUNHU DQG :KLWQH\ Y

PAGE 6

7$%/( 2) &217(176 3DJH $&.12:/('*0(176 LY /,67 2) 7$%/(6 L[ /,67 2) ),*85(6 [LL ,1752'8&7,21 )RUHVW 5HKDELOLWDWLRQ DQG WKH 1HHGV RI )RUHVW'HSHQGHQW &RPPXQLWLHV $ 'XDO 5HVHDUFK $JHQGD 7KH 5HVHDUFK $UHD 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf *HQGHU DQG &DVWHEDVHG $QDO\VLV RI )RUHVW 5HVRXUFH 8VH 9LOODJH 6WXG\ $UHD )25(67 5(+$%,/,7$7,21 9,$ 08/7,3/( 63(&,(6 3/$17$7,216 063Vf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f 5HVXOWV 'LVFXVVLRQ (FRORJLFDO 3RWHQWLDO RI 063V /RFDO 0LVJLYLQJV DERXW 063V 5HGXFHG %LRGLYHUVLW\ DQG )RUHVW 5HVHUYDWLRQ )25(67 5(6285&(6 ,1 3(1,168/$5 ,1',$67$7( $335235,$7,21 $1' /2&$/ (;&/86,21 7KH +LVWRULFDO &RQWH[W %ULWLVK &RORQLDO $GPLQLVWUDWLRQ RI ,QGLDQ )RUHVW 5HVRXUFHV (FRORJ\ DQG $HVWKHWLFV RI )RUHVWV &RORQLDO 3HUFHSWLRQV YL

PAGE 7

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f§FRQWLQXHG )XHOZRRG /HDYHV )UXLWV 0XVKURRPV 'DWH 3DOP 'LVDSSHDULQJ )RUHVW 3URGXFWV /RFDO 3HUFHSWLRQV RI 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf 3HUFHLYHG 1HHG IRU /RFDO )RUHVWV /RFDOO\ 3RSXODU 7UHH 6SHFLHV 6XJJHVWHG )XWXUH 5HIRUHVWDWLRQ 0HWKRGRORJLHV 7+( &20081,7< )25(67 5(6285&( 678'< 7+( )25(67 5(6285&( 86( 6859(< ,QWURGXFWLRQ )RUHVW 3URGXFWV 8VH 6XUYH\ 'DWD &ROOHFWLRQ )RUHVW 3URGXFWV 8VH 6XUYH\ 'DWD $QDO\VLV 7RROV DQG 3URFHGXUHV 6LPLODULW\ 0DWULFHV +LHUDUFKLFDO &OXVWHULQJ 0XOWLGLPHQVLRQDO 6FDOLQJ &RQVHQVXV $QDO\VLV )RUHVW 3URGXFWV 8VH 6XUYH\ 5HVXOWV YLL

PAGE 8

3ODQW ,GHQWLILFDWLRQ 3ULRULW\ 8VH RI 3ODQWV 3ODQW 9HUVDWLOLW\ 1XPEHU RI SODQW XVHVf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

PAGE 9

/,67 2) 7$%/(6 7DEOH SDJH 7DEOH 1DWLYH KDUGZRRG VSHFLHV RIWHQ LQFRUSRUDWHG LQWR 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf 7DEOH 6LUVL )RUHVW 'LYLVLRQ SODQWDWLRQV QXPEHU RI SODQWDWLRQV SODQWHG IURP 7DEOH /RFDO QDPHV RI UHVHDUFK SORWV ORFDWHG ZLWKLQ HDFK RI UHVHDUFK EORFNV 7DEOH 1XPEHU RI WUHDWPHQWV DVVLJQHG WR H[SHULPHQWDO XQLWV LQ 063 SORWV 7DEOH 1XPEHU RI WUHDWPHQWV DVVLJQHG WR H[SHULPHQWDO XQLWV LQ DQG 063 SORWV 7DEOH 5HJUHVVLRQV XVHG WR HVWLPDWH /DJHUVWURHPLD ODQFHRODWD DQG 7HUPLQDOLD WRPHQWRVD VHHGOLQJ VKRRW GU\ ZHLJKWV DW WKH VWDUW RI WKH H[SHULPHQW 7DEOH 3HUFHQWDJH RI DQQXDO VHHGOLQJ VKRRW JURZWK RFFXUULQJ GXULQJ PRQVRRQ YHUVXV GU\ VHDVRQ Q 7DEOH &RPSDUDWLYH JURZWK RI VHHGOLQJV JURZQ ZLWK DQG ZLWKRXW PDWUL[ WUHHV LQ PXOWLSOH VSHFLHV SODQWDWLRQV 7DEOH $JH GLVWULEXWLRQ E\ \HDU LQWHUYDOV RI EDVHOLQH VXUYH\ LQIRUPDQWV 7DEOH 'LVWULEXWLRQ RI KRXVHKROGV LQ ZKLFK DOO IHPDOHV DUH OLWHUDWH E\ FDVWH 7DEOH 'LVWULEXWLRQ RI KRXVHKROGV LQ ZKLFK DOO IHPDOHV RU DOO PDOHV DUH LOOLWHUDWH E\ FDVWH 7DEOH /DQG RZQHUVKLS DQG IRUHVW XVH ULJKWV E\ FDVWH IDPLO\ 7DEOH 'LVWULEXWLRQ RI HPSOR\PHQW E\ FDVWH 7DEOH 'LVWULEXWLRQ RI XQVNLOOHG ODERUHUV E\ FDVWH DQG JHQGHU 7DEOH 'LVWULEXWLRQ RI *DRQWKDQD XVH DQG ODQG HQFURDFKPHQW E\ FDVWH L[

PAGE 10

7DEOH 'LVWULEXWLRQ RI DQQXDO KRXVHKROG LQFRPH LQ ,QGLDQ 5XSHHV E\ FDVWH 7DEOH 'LVWULEXWLRQ RI DYHUDJH QXPEHU RI W\SHV RI OLYHVWRFN E\ FDVWH IDPLO\ 7DEOH 3ULRULW\ IRUHVW SURGXFWV PRQWKVf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

PAGE 11

7DEOH /RFDO UHFRPPHQGDWLRQV IRU LPSOHPHQWDWLRQ VWUDWHJ\ RI IXWXUH UHIRUHVWDWLRQ SURJUDPV E\ FDVWH 7DEOH &RQVHQVXV DQDO\VLV RI LQIRUPDQW LGHQWLILFDWLRQ RI SODQWV E\ FDVWH 7DEOH .QRZOHGJH FRHIILFLHQW RI LQIRUPDQWV LQ LGHQWLI\LQJ ORFDO SODQWV ZLWK UHVSHFW WR FDVWH JHQGHU DQG DJH FODVV 7DEOH ,QIRUPDQWVn NQRZOHGJH FRHIILFLHQWV RI WKH SULRULW\ XVH RI UHFRJQL]HG SODQWV E\ FDVWH DQG JHQGHU 7DEOH &RQVHQVXV DQDO\VLV RI LQIRUPDQW NQRZOHGJH RI SODQW YHUVDWLOLW\ E\ FDVWH 7DEOH ,QIRUPDQWVn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

PAGE 12

/,67 2) ),*85(6 )LJXUH SDJH )LJXUH 8WWDUD .DQDGD 1RUWK .DQDUDf 'LVWULFW .DUQDWDND ,QGLD )LJXUH )RUHVW W\SHV DQG IRUHVW FRQYHUVLRQ 8WWDUD .DQDGD 'LVWULFW .DUQDWDND ,QGLD )LJXUH /RFDWLRQ RI UHVHDUFK EORFNV DQG 8WWDUD .DQDGD FLWLHV )LJXUH 6LOYLFXOWXUH H[SHULPHQW GHVLJQ EORFNV ZKROH SORWV DQG VSOLW SORWV )LJXUH &RPSDULVRQ RI FRQWURO DQG FRPELQHG VRLO WUHQFKLQJFDQRS\ JX\LQJ WUHDWPHQWV DSSOLHG LQ WR RQH WZR DQG WKUHH \HDU ROG SODQWDWLRQV )LJXUH 'HVWUXFWLYH VHHGOLQJ KDUYHVW SODQ XVHG WR HVWLPDWH VKRRW ELRPDVV RI DQG \HDUROG VHHGOLQJV DW WKH VWDUW RI WKH VWXG\ )LJXUH 6KRRW H[WHQVLRQ FRPSDULVRQ RI 7HUPLQDOLD WRPHQWRVD DQG /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V )LJXUH 5RRW FROODU DUHD JURZWK FRPSDULVRQ RI 7HUPLQDOLD WRPHQWRVD DQG /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW FRPSDULVRQ RI 7HUPLQDOLD WRPHQWRVD DQG /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V )LJXUH 6KRRW H[WHQVLRQ RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf )LJXUH 6KRRW H[WHQVLRQ RI 7HUPLQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf )LJXUH 5RRW FROODU DUHD JURZWK RI 7HUPLQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf [LL

PAGE 13

)LJXUH 5RRW FROODU DUHD JURZWK RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK 6 *X\ 7 *f YV &RQWURO &WUOf )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW RI 7HUPLQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK 6 *X\ 7 *f YV &RQWURO &WUOf )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf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

PAGE 14

)LJXUH 3ODQW YHUVDWLOLW\ RU QXPEHU RI XVHV WDOOLHG IRU UHFRJQL]HG SODQWV E\ JHQGHU IRU +DYLN %UDKPLQV XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ )LJXUH 1XPEHU RI XVHV WDOOLHG IRU UHFRJQL]HG SODQWV E\ JHQGHU IRU +DYLN %UDKPLQV XVLQJ KLHUDUFKLFDO FOXVWHULQJ )LJXUH 3HUFHLYHG XVHIXOQHVV RI UHFRJQL]HG SODQWV E\ FDVWH XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ )LJXUH 3HUFHLYHG XVHIXOQHVV RI UHFRJQL]HG SODQWV E\ JHQGHU XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ [LY

PAGE 15

$EVWUDFW RI 'LVVHUWDWLRQ 3UHVHQWHG WR WKH *UDGXDWH 6FKRRO RI WKH 8QLYHUVLW\ RI )ORULGD LQ 3DUWLDO )XOILOOPHQW RI WKH 5HTXLUHPHQWV IRU WKH 'HJUHH RI 'RFWRU RI 3KLORVRSK\ 5(+$%,/,7$7,21 2) '(*5$'(' 7523,&$/ )25(676 ,1 ,1',$n6 :(67(51 *+$76 6,/9,&8/785$/ $1' 62&,2(&2120,& ,03/,&$7,216 2) 08/7,3/( 63(&,(6 3/$17$7,216 %\ 'RQDOG ,DQ )OLFNLQJHU 'HFHPEHU &KDLUPDQ 1LJHO + 6PLWK 0DMRU 'HSDUWPHQW *HRJUDSK\ 7KLV UHVHDUFK H[DPLQHV WKH UROH RI PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf LQ UHKDELOLWDWLRQ RI ,QGLDQ WURSLFDO PRLVW GHFLGXRXV IRUHVWV DV HYDOXDWHG E\ ERWK VLOYLFXOWXUDO DQG FRPPXQLW\ UHVRXUFH XVH FULWHULD 7KH VLOYLFXOWXUDO VWXG\ LQYHVWLJDWHV WKH HIIHFWV RI WUHH VSHFLHV DQG GXUDWLRQ RI H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV RQ VKRRW JURZWK UDWHV RI XQGHUSODQWHG WUHH VHHGOLQJV $Q LQLWLDO VXUYH\ FRQGXFWHG LQ HYDOXDWHG VKRRW KHLJKW DQG EDVDO DUHD JURZWK UDWHV RI QDWLYH KDUGZRRG VHHGOLQJV DIWHU RQH WZR DQG WKUHH \HDUV RI H[SRVXUH XQGHUVWRU\ FRQGLWLRQV LQ 063V /RFDO IRUHVWHUVn RSLQLRQV DERXW WKH VKDGHXQGHUVWRU\ WROHUDQFH RI PDQ\ QDWLYH WUHH VSHFLHV ZDV DOVR VROLFLWHG 8VLQJ WKH LQIRUPDWLRQ VHOHFWHG RQH XQGHUVWRU\WROHUDQW DQG RQH XQGHUVWRU\LQWROHUDQW VSHFLHV IRU H[SHULPHQWDO VWXG\ 6HHGOLQJV RI WKHVH WZR VSHFLHV [Y

PAGE 16

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n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

PAGE 17

&+$37(5 ,1752'8&7,21 7KLV ZRUN ZDV VWLPXODWHG E\ WKH QRWLRQ WKDW GHJUDGHG WURSLFDO IRUHVW V\VWHPV FDQ DQG VKRXOG EH UHKDELOLWDWHG DFFRUGLQJ WR HFRORJLFDO SULQFLSOHV ZLWKRXW LPSRVLQJ HFRQRPLF KDUGVKLS RQ IRUHVWGHSHQGHQW SHRSOH LQ WKH SURFHVV :KLOH LQVWDQFHV RI SURPLVLQJ WURSLFDO UHIRUHVWDWLRQ HIIRUWV DUH IUHTXHQWO\ FLWHG HJ )RRG DQG $JULFXOWXUDO 2UJDQL]DWLRQ RI WKH 8QLWHG 1DWLRQV $JDUZDO DQG 1DUDLQ &HUQHD 0XUUD\ 1HVPLWK 3RIIHQEHUJHU f XQWLO UHFHQWO\ IHZ SURJUDPV KDYH HPSKDVL]HG WKH UROH RI ORFDO IRUHVW GZHOOHUV LQ SURJUDP FRQFHSWLRQ LPSOHPHQWDWLRQ RU HQMR\PHQW RI WKH EHQHILWV WKH\ SURGXFH $\XZDW 'KDU HW DO 0DOKRUWD DQG 3RIIHQEXUJHU 1RURQKD DQG 6SHDUV 3DWKDQ HW DO 6LQJK f +RZ WKHQ FDQ UHIRUHVWDWLRQ SURJUDPV LQ WKH WURSLFV EH HFRORJLFDOO\ VRXQG ZKLOH PHHWLQJ WKH QHHGV RI ORFDO SHRSOH" 7KLV WZRSDUW TXHVWLRQ JXLGHV WKH VWXG\ WKDW IROORZV 7R DGGUHVV ERWK SDUWV RI WKLV TXHVWLRQ ILHOG UHVHDUFK VLWH VHOHFWLRQ KDG WR EH OLPLWHG WR DUHDV ZKHUH IRUHVW UHKDELOLWDWLRQ HIIRUWV ZHUH DOUHDG\ XQGHUZD\ DQG LQ SUR[LPLW\ WR UXUDO IRUHVW GHSHQGHQW FRPPXQLWLHV $ WZR\HDU VHDUFK OHG WR WKH VHOHFWLRQ RI D UHIRUHVWDWLRQ VLWH LQ ,QGLDnV :HVWHUQ *KDWV ZKHUH WKH DSSOLFDWLRQ RI D GXDO HFRORJ\FRPPXQLW\ ZHOIDUH UHVHDUFK DJHQGD ZDV GHHPHG IHDVLEOH 7KH DUHD LV .DUQDWDND 6WDWHnV 8WWDUD .DQDGD 1RUWK .DQDUDf 'LVWULFW ZKHUH D PXOWLSOH VSHFLHV SODQWDWLRQ

PAGE 18

063f UHIRUHVWDWLRQ SURJUDP LV XQGHUZD\ $ GHFDGH RI .DUQDWDND )RUHVW 'HSDUWPHQW .)'f UHILQHPHQW RI 063 WHFKQLTXHV RYHU WKRXVDQGV RI KHFWDUHV LQ 1RUWK .DQDUD 'LVWULFW ZDV DOUHDG\ SURGXFLQJ ERWK VLOYLFXOWXUDO DQG HFRORJLFDO LPSDFWV ZKHQ WKLV UHVHDUFK EHJDQ LQ PLG 7ZR VHSDUDWH EXW OLQNHG VHWV RI UHVHDUFK TXHVWLRQV ZHUH IRUPXODWHG WR DGGUHVV WKH HFRORJLFDO DQG FRPPXQLW\ ZHOIDUH LPSDFWV RI IRUHVW UHKDELOLWDWLRQ XVLQJ 063 VLOYLFXOWXUH 7KH LQLWLDO IRFXV RI WKLV ZRUN ZDV WR GRFXPHQW DQG WHVW WKH GHJUHH WR ZKLFK 063V IDFLOLWDWH UHFRYHU\ RI 1RUWK .DQDUDnV WURSLFDO PRLVW GHFLGXRXV IRUHVWV 7KH FRPSOHPHQWDU\ IRFXV FHQWHUHG RQ WZR VXUYH\V DERXW ORFDO SHUFHSWLRQV RI IRUHVW UHVRXUFHV DQG WKH HIIHFW RI 063 VLOYLFXOWXUH RQ IRUHVWGHSHQGHQW FRPPXQLWLHV LQ 1RUWK .DQDUD 7KLV UHVHDUFK FRQFOXGHV E\ LGHQWLI\LQJ VHYHUDO HFRORJLFDO PHULWV RI 063V ZKLOH GRFXPHQWLQJ WKDW 063V DUH RIWHQ GLVOLNHG RU DW OHDVW PLVXQGHUVWRRG E\ ORFDO IRUHVW GZHOOHUV /RFDO SHUFHSWLRQV DUH VKRZQ WR YDU\ DFFRUGLQJ WR VXUYH\ LQIRUPDQWVn FDVWH JHQGHU DQG VRPHWLPHV DJH &RQFOXVLRQV GUDZQ IURP WKH VRFLDO VXUYH\V SURYLGH D IUDPHZRUN IRU XQGHUVWDQGLQJ GLIIHUHQFHV LQ ORFDO SHUFHSWLRQV DERXW IRUHVW UHVRXUFHV KRZ WKH\ DUH XWLOL]HG DQG ORFDO UHFRPPHQGDWLRQV IRU IRUHVW UHKDELOLWDWLRQ 7KH UHPDLQGHU RI WKLV LQWURGXFWRU\ FKDSWHU GHVFULEHV P\ VLOYLFXOWXUDO DQG VRFLDO VXUYH\ UHVHDUFK DJHQGDV KRZ WKH\ DUH UHODWHG DQG WKH TXHVWLRQV WKDW KDYH JXLGHG ERWK LQTXLULHV ,W DOVR GHVFULEHV WKH UHVHDUFK DUHD WKH 063 VLOYLFXOWXUDO V\VWHP

PAGE 19

DQG 7HUNDQDKDOOL 9LOODJH ZKHUH IRUHVW UHVRXUFHXVH VXUYH\ GDWD ZHUH FROOHFWHG &KDSWHUV WKURXJK GHVFULEH WKH UHOHYDQFH DQG VSHFLILF DLPV RI WKH VLOYLFXOWXUDO VWXG\ VWXG\ GHVLJQ DQG LPSOHPHQWDWLRQ DQG VWXG\ UHVXOWV DQG DVVRFLDWHG HFRORJLFDO LPSDFWV RI 063V UHVSHFWLYHO\ &KDSWHU UHYLHZV WKH KLVWRULFDO FRQIOLFW EHWZHHQ WKH ,QGLDQ VWDWH DQG ORFDO FRPPXQLWLHV RYHU IRUHVW UHVRXUFHV &KDSWHUV DQG GHVFULEH WKH GHYHORSPHQW RI WZR FRPPXQLW\ IRUHVW UHVRXUFH XVH VXUYH\V WKHLU LPSOHPHQWDWLRQ DQG SUHVHQWDWLRQ DQG GLVFXVVLRQ RI VXUYH\ UHVSRQVHV &KDSWHU SUHVHQWV D VSDWLDO DSSURDFK WR SDUWLFLSDWRU\ GHFLVLRQPDNLQJ DERXW IXWXUH IRUHVW UHVRXUFH XVH -RLQW IRUHVW GHSDUWPHQWORFDO FRPPXQLW\ ZRUNVKRSV HPSKDVL]LQJ WKH FROOHFWLRQ SUHVHQWDWLRQ DQG DQDO\VLV RI VSDWLDO GDWD DUH LQWURGXFHG DV D VWUDWHJ\ WR FDWDO\]H DQG JXLGH FROODERUDWLYH IRUHVW UHVRXUFH PDQDJHPHQW 7KH LGHDV IRU WKLV DSSURDFK HYROYHG IURP P\ FROODERUDWLRQ ZLWK ERWK IRUHVWHUV DQG ORFDO SHRSOH LQ FDUU\LQJ RXW WKLV GXDO UHVHDUFK DJHQGD )RUHVW 5HKDELOLWDWLRQ DQG WKH 1HHGV RI )RUHVW'HSHQGHQW &RPPXQLWLHV $ 'XDO 5HVHDUFK $JHQGD 7KH HFRORJLFDO LPSRUWDQFH RI ,QGLDQ IRUHVWV WKHLU SURWHFWLRQ DQG UHKDELOLWDWLRQ DQG WKH XQGHVLUDEOH FRQVHTXHQFHV RI WKHLU GLVDSSHDUDQFH %HQWOH\ HW DO f DUH ZHOOXQGHUVWRRG E\ WKRVH ZKR OLYH QHDU WKH UHPDLQLQJ WURSLFDO IRUHVWV RI SHQLQVXODU ,QGLD 1DLU f 'XULQJ WKH V FRQFHUQ RYHU WKH

PAGE 20

HIIHFWV RI GHIRUHVWDWLRQ RI ,QGLDnV ZDWHUVKHGV VSXUUHG LQWHUQDWLRQDO ILQDQFLQJ RI VRFLDO IRUHVWU\ SURJUDPV WR UHIRUHVW PLOOLRQ KHFWDUHV KDf RI GHJUDGHG ,QGLDQ XSODQGV 7RWDO UHFRPPHQGHG RXWOD\V WR SURWHFW ,QGLDnV WURSLFDO IRUHVW UHVRXUFHV DPRXQWHG WR 86 ELOOLRQ IRU RU SHUFHQW RI LQYHVWPHQWV UHFRPPHQGHG WR VDYH WURSLFDO IRUHVWV ZRUOGZLGH :RUOG 5HVRXUFHV ,QVWLWXWH f 7KH SULPDU\ RSHUDWLRQDO UHVSRQVH RI ,QGLDQ VWDWH JRYHUQPHQWV WR VKULQNLQJ IRUHVW DUHDV KDV EHHQ WKH FRQYHUVLRQ RI GHJUDGHG IRUHVW ODQGV LQWR SODQWDWLRQV %\ ,QGLD ERDVWHG KD RI SODQWDWLRQV D ILJXUH WKDW FRQWLQXHG WR LQFUHDVH E\ KD DQQXDOO\ GXULQJ WKH HDUO\ V :RUOG 5HVRXUFHV ,QVWLWXWH f 7KLV UHSUHVHQWV WKH ODUJHVW FRPPLWPHQW WR SODQWDWLRQ VLOYLFXOWXUH LQ WKH WURSLFV 5HIRUHVWDWLRQ HIIRUWV QRWZLWKVWDQGLQJ DQQXDO UDWHV RI GHIRUHVWDWLRQ LQ ,QGLD LQFUHDVHG VWHDGLO\ GXULQJ WKH V KD\HDU IRU WKH GHFDGH YHUVXV KD\HDU IRU WKH SHULRG :RUOG 5HVRXUFHV ,QVWLWXWH f 0HQRQ f FDOFXODWHG WKDW GHIRUHVWDWLRQ UDWHV LQ WKH 7ULFKXU UHJLRQ RI WKH VRXWKHUQ :HVWHUQ *KDWV DFFHOHUDWHG E\ b EHWZHHQ WKH \HDUV DQG FRPSDUHG WR b IRU WKH \HDUV IURP WR 7KLV ORVV KDV DPRXQWHG WR D FXPXODWLYH FRQWUDFWLRQ RI 7ULFKXUnV IRUHVW DUHD IURP NPA LQ WR NPA LQ &RQFHUQ DERXW :HVWHUQ *KDWV GHIRUHVWDWLRQ VSDZQHG D .DUQDWDND )RUHVWU\ 'HSDUWPHQW .)'f LQLWLDWLYH LQ WR UHKDELOLWDWH GHIRUHVWHG VLWHV LQ DQ HFRORJLFDOO\ VRXQG DQG VRFLDOO\ EHQHILFLDO ZD\ 6K\DP 6XQGHU HW DO f /RFDO IRUHVWHUV FDOO WKHVH UHSODQWHG DUHDV PLVFHOODQHRXV SODQWDWLRQV

PAGE 21

EXW KDYH QDPHG WKHP PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf EHFDXVH WKH WHFKQLTXH FRPSULVHV VLPXOWDQHRXV RXWSODQWLQJ RI QXPHURXV QDWLYH KDUGZRRG WUHH VSHFLHV ZLWK IDVWHUJURZLQJ QLWURJHQn IL[LQJ QDWXUDOL]HG WUHH VSHFLHV RQ GHJUDGHG VLWHV 7KHVH VLWHV DUH XVXDOO\ ORFDWHG ZLWKLQ .)' MXULVGLFWLRQDO ]RQHV FDOOHG PLQRU IRUHVWV DUHDV ZKHUH ORFDO SHRSOH KDYH KLVWRULFDO QRQWLPEHU XVXIUXFW ULJKWV VHH &KDSWHU IRU WKH KLVWRU\ RI PLQRU IRUHVW GHVLJQDWLRQ DQG XWLOL]DWLRQf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f ,I ZRUNDEOH WKLV VKDULQJ RI EHQHILWV ZLOO SURPRWH WKH SRSXODULW\ DQG IXWXUH VXFFHVV RI 063 SURJUDPV DPRQJ .DUQDWDNDnV IRUHVWHUV DQG YLOODJHUV DOLNH +DYH 063V SHUIRUPHG DV LQWHQGHG VLQFH WKHLU LQFHSWLRQ SURYLGLQJ H[SHFWHG EHQHILWV WR ERWK YLOODJHUV DQG IRUHVWHUV" 'R 063V SURGXFH XQGHVLUDEOH RXWFRPHV" $QG LI VR FDQ 063 VLOYLFXOWXUH EH LPSURYHG WR HQKDQFH EHQHILWV WR ERWK RI WKHVH JURXSV DQG WR WKH ,QGLDQ HQYLURQPHQW" 7KHVH TXHVWLRQV JXLGH

PAGE 22

ERWK WKH VLOYLFXOWXUDO DQG FRPPXQLW\ IRUHVW UHVRXUFHXVH SRUWLRQV RI WKLV VWXG\ 7KH VWXG\nV VLOYLFXOWXUDO FRPSRQHQW IRFXVHV RQ WKH HIIHFWV RI VSHFLHV DQG GXUDWLRQ RI XQGHUVWRU\ H[SRVXUH LH KRZ ORQJ QDWLYH KDUGZRRG VHHGOLQJV KDYH EHHQ JURZLQJ EHQHDWK D FDQRS\ RI IDVWHUJURZLQJ WUHHVf RQ XQGHUVWRU\ VHHGOLQJVn VKRRW JURZWK UDWHV EHIRUH DQG DIWHU FDQRS\ UHPRYDO 5HODWLYH JURZWK UDWH GDWD LQWHUYLHZV DQG SHUVRQDO ILHOG REVHUYDWLRQV DUH XVHG WR GLVWLQJXLVK WKH JURZWK FKDUDFWHULVWLFV DQG WHPSRUDO GLIIHUHQFHV LQ XQGHUVWRU\ WROHUDQFH RI WZR QDWLYH KDUGZRRG VSHFLHV 2QH VSHFLHV LV FKDUDFWHUL]HG DV WROHUDQW RI XQGHUVWRU\ FRQGLWLRQV ZKLOH WKH RWKHU LV OHVVWROHUDQW .DGDPEL f 6WXG\ UHVXOWV SRLQW WR PDQDJHPHQW JXLGHOLQHV WKDW PD[LPL]H VHHGOLQJVn JURZWK UDWHV DIWHU RXWSODQWLQJ LQ 063V 7KH HIIHFWV RI VWDWHPDQDJHG 063 SURJUDPV RQ FDVWH JHQGHU DQG LQ VRPH FDVHV DJHEDVHG XVH RI IRUHVWV JXLGH WKH IRUHVW UHVRXUFHXVH VXUYH\ FRPSRQHQW RI WKLV UHVHDUFK +LVWRULFDO GHYHORSPHQW RZQHUVKLS DQG XVH RI ,QGLDnV WLPEHU DQG QRQWLPEHU UHVRXUFHV GHVFULEH WKH VHWWLQJ LQ ZKLFK WZR VXUYH\V ZHUH PDGH &XUUHQW ORFDO NQRZOHGJH DQG SHUFHSWLRQV RI QRQWLPEHU UHVRXUFHV DUH WKHQ DQDO\]HG E\ FDVWH JHQGHU DQG DJH LQ ERWK VXUYH\V RQH RI DQG WKH RWKHU RI UXUDO LQIRUPDQWV 7KHVH VXUYH\V KLJKOLJKW KRZ NQRZOHGJH RI IRUHVW UHVRXUFHV DQG SHUFHSWLRQV DERXW 063V YDU\ DFFRUGLQJ WR WKHVH WKUHH YDULDEOHV 7KH VXUYH\V SD\ VSHFLDO DWWHQWLRQ WR SHUFHSWLRQV DERXW XQUHKDELOLWDWHG PLQRU IRUHVWV 0LQRU IRUHVWV KDYH EHHQ KLVWRULFDOO\ DYDLODEOH WR ORFDO SHRSOH IRU XWLOL]DWLRQ RI QRQWLPEHU UHVRXUFHV 7RGD\ WKH\ DUH

PAGE 23

XQLIRUPO\ GHJUDGHG PDNLQJ WKHP SULPH FDQGLGDWH VLWHV IRU JRYHUQPHQW 063 UHIRUHVWDWLRQ SURJUDPV 7KH 5HVHDUFK $UHD 7KH UHVHDUFK DUHD LV ZLWKLQ WKH 6LUVL )RUHVW 'LYLVLRQ D PDQDJHPHQW XQLW LQ WKH .DQDUD )RUHVW &LUFOH RI WKH .DUQDWDND )RUHVW 'HSDUWPHQW .)'f 8WWDUD .DQDGD 'LVWULFW ,QGLD VHH )LJXUH f 7KLV )RUHVW &LUFOH FRQWDLQV NP RI VWDWH PDQDJHG UHVHUYHG IRUHVW 1 r (f ZLWK HOHYDWLRQV UDQJLQJ IURP P DERYH VHD OHYHO 7KH VHYHQ PRQWK PRQVRRQ EULQJV PP RI SUHFLSLWDWLRQ PRVWO\ EHWZHHQ -XQH DQG 6HSWHPEHU 0HDQ DQQXDO WHPSHUDWXUH LV r& PHDQ WHPSHUDWXUH RI WKH FROGHVW PRQWK LV r& DQG WKH PHDQ PLQLPXP GDLO\ WHPSHUDWXUH RI WKH FROGHVW PRQWK LV r& 3DVFDO f 7KH 'KDUZDG 6\VWHP LV WKH QDPH JLYHQ WR WKH DQFLHQW PHWDOOLIHURXV PHWDPRUSKLF URFN WKDW XQGHUOLHV WKH UHVHDUFK DUHD ,W LV ULFK LQ LURQ PDQJDQHVH DQG LQ VRPH ORFDWLRQV LQ FRSSHU OHDG DQG JROG 7KLV PDWUL[ URFN LV GHULYHG IURP DQFLHQW VHGLPHQWV FRQJORPHUDWHV PRUH RU OHVV IHUUXJLQRXV TXDUW]LWHV JUH\ZDFNHV VFKLVWV DQG OLPHVWRQH 3DVFDO f $ KHWHURJHQHRXV PL[WXUH RI JQHLVV DQG GLIIHUHQW NLQGV RI LQWUXVLYH JUDQLWHV DOVR GRW WKH .DUQDWDND 3ODWHDX $UHD VRLOV KDYH EHHQ FODVVLILHG DV HXWULF QLWRVROV )$2 :RUOG 6RLOV 0DS f RU DOILVROV 6DQFKH] f DQG DUH RIWHQ SDOHXVWDOIV GXH WR WKHLU GHHS DUJLOOLF KRUL]RQV DQG WKH LQIOXHQFH RI SURQRXQFHG ZHW DQG GU\ VHDVRQ PRLVWXUH IOXFWXDWLRQV

PAGE 24

)LJXUH 8WWDUD .DQDGD 1RUWK .DQDUDf 'LVWULFW .DUQDWDND ,QGLD

PAGE 25

8WWDUD .DQDGD 'LVWULFW ,QGLD )RUHVW 7\SHV DQG )RUHVW &RQYHUVLRQ )RUHVW/DQGXVH 7\SH ‘ GRVHGBIRUHVW ‘ RSHQ IRUHVW ‘ GHJUDGHGBIRUHVW ‘ IDUPODQGSODQWRWLRQV .UD )LJXUH )RUHVW W\SHV DQG IRUHVW FRQYHUVLRQ 8WWDUD .DQDGD 'LVWULFW .DUQDWDND ,QGLD 6RXUFH .DUQDWDND )RUHVW 'HSDUWPHQW 0DSV 'LYLVLRQ $UDQ\D %KDYDQ %DQJDORUH

PAGE 26

7KH ODUJHVW XUEDQ FHQWHU LQ WKH 6LUVL )RUHVW 'LYLVLRQ LV 6LUVL 7RZQ 6LUVL DQG LWV VXUURXQGLQJV KDG DERXW LQKDELWDQWV LQ D ILJXUH WKDW JUHZ WR E\ 6LUVL 7D[ &ROOHFWRUnV 2IILFH SHUV FRPf 6LUVL KDG D SRSXODWLRQ GHQVLW\ RI SHUVRQV SHU NP LQ WKH PLGV 3DVFDO f 1XPHURXV YLOODJHV GRW WKH FRXQWU\VLGH RXWVLGH RI 6LUVL HDFK ERUGHUHG E\ VWDWH UHVHUYHG IRUHVW ODQGV 7HUNDQDKDOOL 9LOODJH ZKHUH WKH IRUHVW UHVRXUFH XVH VXUYH\V ZHUH FDUULHG RXW LV ORFDWHG VL[ NP HDVW RI 6LUVL DORQJ %DQYDVL 5RDG %\ ,QGLDQ VWDQGDUGV 6LUVLnV HQYLURQV DUH QRW GHQVHO\ SRSXODWHG KHOSLQJ WR H[SODLQ ZK\ WKUHHIRXUWKV RI WKLV KLOO\ UHJLRQ LV VWLOO IRUHVWHG VHH )LJXUH f 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf ,Q .DUQDWDND 6WDWH )RUHVWHU $ 1
PAGE 27

%RWK VSHFLHV DUH NQRZQ IRU WKHLU UDSLG LQLWLDO JURZWK IXHO ZRRG TXDOLW\ ZLGH UDQJH RI VRLO S+ WROHUDQFH GURXJKWKDUGLQHVV DQG WKHLU DELOLW\ WR IL[ QLWURJHQ 'DYLGVRQ HW DO 0LGJOH\ DQG 9LYHNDQDQGDQ f :KDW GLVWLQJXLVKHV 063 VLOYLFXOWXUH LV WKH VLPXOWDQHRXV SODQWLQJ RI QDWLYH WURSLFDO KDUGZRRG VSHFLHV VHH 7DEOH f ZLWK RQH RU ERWK RI WKHVH QLWURJHQIL[LQJ VSHFLHV KHQFH WKH WHUP PXOWLSOH VSHFLHV SODQWDWLRQV 7DEOH 1DWLYH KDUGZRRG VSHFLHV RIWHQ LQFRUSRUDWHG LQWR 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf 6SHFLHV 1DPH )DPLO\ /RFDO 1DPH 6SRQGLDV SLQQDWD $QDFDUGLDFHDH XPEDnGD KRJ SOXP :ULJKWLD WLQFWRULD $SRF\QDFHDH KDOH GKDQWDSSDOD 6WHUHRVSHUPXP [\ORFDUSXP %LJQRQLDFHDH NKDULVLQJKD SDQQLPXULQJD %RPED[ FHLED %RPEDFDFHDH NDSRN VHPXO &RUGLD 0F&ORXGLL %RUDJLQDFHDH KDGDQJD $QRJHLVVXV ODWLIROLD &RPEUHWDFHDH GLQGDO QMDPD 7HUPLQDOLD DUMXQD &RPEUHWDFHDH KROH PDWWL NXODPDUXWKX 7HUPLQDOLD EDOHULFD &RPEUHWDFHDH WDUHn WKDDQQL P\UREDODQ 7HUPLQDOLD SDQLFXODWD &RPEUHWDFHDH NLQGDO SXOODPDUXWKX 7HUPLQDOLD WRPHQWRVD &RPEUHWDFHDH PXWWL NDULPDUXWKX $OEL]LD SURFHUD )DEDFHDH VLULV MDODYDND 'DOEHUJLD ODWLIROLD )DEDFHDH VLVXP YHHWL URVHZRRG (PEOLFD RIILFLQDOLV )DEDFHDH QHOOL P\UREDODP 2XJHQLD GDOEHUJLRLGHV )DEDFHDH NDULPXWnWXO 3WHURFDUSXV PDUVXSLXP )DEDFHDH KRQQHn YHQJD ELMDVDO

PAGE 28

7DEOH f§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

PAGE 29

WKH DEVHQFH RI $FDFLD DQGRU &DVXDULQD KDV RIWHQ UHVXOWHG LQ PRUWDOLW\ RU VORZHG VWHP JURZWK RI VHHGOLQJV 8QVXFFHVVIXO VWDWH IRUHVW SODQWDWLRQV VHHQ E\ WKH DXWKRU DW 7KLUWKDOOL .DUQDWDND FOHDUO\ PDNH WKLV SRLQW $QDO\VLV RI 6LUVL )RUHVW 'LYLVLRQ RIILFH UHFRUGV LQGLFDWHV WKDW IURP RYHU KD RI GHJUDGHG IRUHVWV UHFHLYHG 063 WUHDWPHQW LQ WKH 'LYLVLRQ (LJKW\ SHUFHQW RI WKHVH 063V RFFXU RQ D SRUWLRQ RI WKH 'LYLVLRQn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f UHGHILQH UXUDO ,QGLDQ SRYHUW\ QRW DV D VKRUWDJH RI FDVK EXW DV D VKRUWDJH RI ELRPDVV UHVRXUFHV WR PHHW EDVLF VXUYLYDO QHHGV 7KHVH DXWKRUV GRFXPHQW DEVROXWH UHGXFWLRQV LQ ELRPDVV SURGXFWLYLW\ RYHU ,QGLDnV QRQ DJULFXOWXUDO ODQGV FRQWULEXWLQJ WR LQFUHDVHG SRYHUW\ DPRQJ UXUDO SHRSOH

PAGE 30

5XUDO ZRPHQ EHLQJ WKH SULPDU\ PDQDJHUV DQG SURFHVVHUV RI ELRPDVV UHVRXUFHV IRU VXEVLVWHQFH DUH RIWHQ WKH PRVW LPPHGLDWH YLFWLPV RI GHIRUHVWDWLRQ LQ DQG DURXQG ,QGLDQ YLOODJHV 9,.6$7 f :RPHQ RIWHQ KDYH WKH JUHDWHVW SUDFWLFDO NQRZOHGJH RI ORFDO ELRPDVV UHVRXUFHV 5RFKHOHDX 0ROQDU DQG 6FKUHLEHU )$2 f \HW DUH VHOGRP FRQVXOWHG DERXW UHIRUHVWDWLRQ SURMHFWV LQWHQGHG WR EHQHILW WKHLU IDPLOLHV )$2 +RVNLQV 5RFKHOHDX 6SULQJ :LOOLDPV 1HVPLWK 6KLYD f 7R EHFRPH VRFLDOO\RULHQWHG IRUHVWU\ SURJUDPV PXVW WKHUHIRUH H[SDQG WKHLU IRFXV EH\RQG SURGXFWLYLW\ LVVXHV WR LQFOXGH SURJUDP LPSDFWV RQ ORFDO XVHUV RI IRUHVW UHVRXUFHV SDUWLFXODUO\ ZRPHQ :RPHQ PD\ EH H[FOXGHG IURP MRLQLQJ IRUHVWU\ SURJUDPV GXH WR JHQGHUEDVHG ELDVHV RI H[WHQVLRQ PHWKRGV 6SULQJ f RU EHFDXVH VRFLRHFRQRPLF FRQVWUDLQWV PDNH WKHLU SDUWLFLSDWLRQ GLIILFXOW +RVNLQV f 6XFK EDUULHUV WR ZRPHQnV SDUWLFLSDWLRQ PXVW EH UHFRJQL]HG DQG FRQVFLRXVO\ DGGUHVVHG LI SURJUDPV DUH WR DFFRPPRGDWH DOO ORFDO SHRSOH $V ZLWK JHQGHU SHRSOH PD\ EH GLIIHUHQWLDOO\ DIIHFWHG E\ IRUHVWU\ SURJUDPV RQ WKH EDVLV RI FDVWH RU HWKQLFLW\ &DVWH EDVHG UHVSRQVH WR 063V LV YDULDEOH DQG LV SUHGLFDWHG RQ LQWHUn FDVWH GLIIHUHQFHV LQ IRUHVW UHVRXUFH NQRZOHGJH DQG XVH *DGJLO f GHVFULEHV WKHVH FDVWHEDVHG GLIIHUHQFHV LQ WKH UHJLRQ RI WKLV VWXG\ ZKHUH KH IRXQG WKDW QLQH HQGRJDPRXV FDVWH JURXSV KDYH GLYHUVLILHG DQG SDUWLWLRQHG WKHLU XVH RI IRUHVW UHVRXUFHV +H FLWHV WKH IROORZLQJ H[DPSOHV &KDPDJDUV PDNH PDWV DQG EURRPV IURP 3KRHQL[ SDOPV %DGLJDUV DQG +ROHVZDUV PDNH EDVNHWV DQG URSH IURP 'HQGURFDODPXV VWULFWLV EDPERR *XGLJDUV XVH VDQGDOZRRG DQG RWKHU

PAGE 31

WUHH VSHFLHV LQ ZRRGFDUYLQJ $FKDUL XVH GLIIHUHQW WUHH VSHFLHV WKDQ *XGLJDUV WR PDNH WRRO KDQGOHV +ROH\D PDNH ILVKLQJ WDFNOH XVLQJ +HPLGHVPXV LQGLFDV DQG 0DUDWKD DQG -DGDPDOOL PDNH EURRPV IURP /DQWDQD FDPDUD )RUHVWU\ SURJUDP LPSDFWV ZLWKLQ SDUWLFXODU FDVWH JURXSV DUH DOVR H[SHFWHG WR GLIIHU ZLWK UHVSHFW WR JHQGHU ,Q VRPH VLWXDWLRQV D SHUVRQnV DJH PD\ VKDSH KLVKHU NQRZOHGJH DQG RSLQLRQV DERXW IRUHVW UHVRXUFHV DQG WKHLU UHKDELOLWDWLRQ 7KLV VWXG\ HPSOR\V WZR VXUYH\ LQVWUXPHQWV WR GLVWLQJXLVK GLIIHUHQFHV LQ ORFDO NQRZOHGJH DQG XVH RI PLQRU IRUHVWV ERWK EHIRUH DQG DIWHU WKH\ DUH FRQYHUWHG WR 063V 7KH VXUYH\V DOVR HQFRXUDJH LQIRUPDQWV WR UHFRPPHQG ZD\V WR DGGUHVV WKHLU QHHGV ZKHQ WKH\ DUH DGYHUVHO\ DIIHFWHG E\ 063V 7RJHWKHU WKH WZR VXUYH\V DWWHPSWHG WR f ,GHQWLI\ FDVWH DQG JHQGHUEDVHG GLIIHUHQFHV LQ ORFDO FRPPXQLW\ NQRZOHGJH DQG XVH RI QRQWLPEHU IRUHVW UHVRXUFHV f ,GHQWLI\ JURXSV RI LQWHUHVW WKDW EHQHILW WKH PRVW IURP 063 SURJUDPV WKRVH JURXSV WKDW EHQHILW WKH OHDVW DQG WKRVH WKDW UHPDLQ XQDIIHFWHG f 'HWHUPLQH ZKHWKHU 063V SURYLGH HQKDQFHG EHQHILWV WR ORFDO JHQGHU DQG FDVWHEDVHG JURXSV ZKHQ FRPSDUHG WR XQUHKDELOLWDWHG PLQRU IRUHVW ODQGV f ([SORUH KRZ 063 VLOYLFXOWXUH DQG PDQDJHPHQW FDQ EH DOWHUHG WR EHQHILW FULWLFDOO\ DIIHFWHG JHQGHU DQG FDVWH JURXSV WKRVH ZKRVH VXEVLVWHQFH GHULYHV IURP DFFHVV WR DQG XVH RI IRUHVW UHVRXUFHV 9LOODJH 6WXG\ $UHD 7KH PXOWLFDVWH YLOODJH RI 7HUNDQDKDOOL ZDV VHOHFWHG IRU VWXG\ RI ORFDO IRUHVW UHVRXUFH XVH SUDFWLFHV 7HUNDQDKDOOL OLHV VL[ NP HDVW RI 6LUVL 7RZQ RQ WKH %DQYDVL 5RDG 7KH 6LUVL 7DOXN

PAGE 32

5HYHQXH 'HSDUWPHQW PDLQWDLQV ELUWK GHDWK DQG ODQG GHHG UHFRUGV GDWLQJ IURP RI WKH RULJLQDO LQKDELWDQWV RI 7HUNDQDKDOOL 9LOODJH $ WHPSOH WKHUH FRQVHFUDWHG WR 9LUDEKDGUD UHVHPEOHV WKH DUFKLWHFWXUDO VW\OH RI %HOXU DQG +DOLELG 7HPSOHV FD 7KLV LQGLFDWHV DQFLHQW VHWWOHPHQW RI WKH VLWH 7KH YLOODJH SURSHU LV GLYLGHG LQWR HLJKW UHVLGHQWLDO JURXSLQJV RU KDPOHWV WKH ODUJHVW EHLQJ 7HUNDQDKDOOL *UDP )RXUWHHQ FDVWH JURXSV UHVLGH LQ 7HUNDQDKDOOL PDNLQJ LW D PL[HG FDVWH YLOODJH ,Q IDPLOLHV OLYHG LQ DOO RI WKH KDPOHWV RI ZKLFK ZHUH LQFOXGHG LQ WKH IRUHVW SURGXFWV XVH VXUYH\ 7KH DYHUDJH ORFDO ODQGKROGLQJ ZDV DSSUR[LPDWHO\ KD 0RUH WKDQ SHUFHQW RI DOO IDPLOLHV ZHUH ODQGOHVV DQG WKHUHIRUH QRUPDOO\ ZRUNHG DV DJULFXOWXUDO ODERUHUV IRU ODQGRZQLQJ IDPLOLHV RU WKH .)' 6RPH ODQGOHVV SHRSOH DOVR ZRUNHG LQ QHDUE\ 6LUVL 7KH ODUJHVW ODQGKROGLQJ LQ WKH DUHD ZDV D MRLQW IDPLO\ KROGLQJ RI DFUHV 7KH RZQHUV ZHUH DEVHQWHH UHVLGHQWV RI 6LUVL 7RZQ 063V DUH IRXQG WKURXJKRXW 7HUNDQDKDOOL WKH ROGHVW KDYLQJ EHHQ SODQWHG LQ 9LOODJHUV DUH WKHUHIRUH IDPLOLDU ZLWK WKLV VLOYLFXOWXUDO LQQRYDWLRQ RI WKH .)' :KLOH ORFDO RSLQLRQV YDU\ FRQFHUQLQJ WKH VSHFLILF LPSDFWV RI 063V RQ YLOODJH OLIH WKHUH LV FRQVHQVXV WKDW 063V DUH VSHHGLQJ WKH GHSOHWLRQ RI YDOXDEOH QRQn WLPEHU IRUHVW UHVRXUFHV 5HGXFHG ELRGLYHUVLW\ DQG WHQXUHXVXIUXFW H[SODQDWLRQV IRU WKLV ORVV FOHDUO\ HPHUJH IURP WKH FRPPXQLW\ IRUHVW UHVRXUFH XVH VWXG\ 5HPHGLHV WR WKLV SUREOHP DUH VXJJHVWHG E\ VXUYH\ LQIRUPDQWV DQG WKHVH IRUP WKH EDVLV IRU D SDUWLFLSDWRU\ IRUHVW UHVRXUFH PDQDJHPHQW PRGHO SUHVHQWHG LQ WKH FRQFOXGLQJ FKDSWHU RI WKLV GLVVHUWDWLRQ

PAGE 33

&+$37(5 )25(67 5(+$%,/,7$7,21 9,$ 08/7,3/( 63(&,(6 3/$17$7,216 063Vf7+( 6,/9,&8/785$/ 678'< ,Q WKLV FKDSWHU GHVFULEH WKH UHOHYDQFH RI .DUQDWDNDn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n OLYHG RSSRUWXQLVWLF OLJKWGHPDQGHUV ORQJHUOLYHG OLJKWGHPDQGHUV 6FKXO] f DQG VRPH SULPDU\ IRUHVW VSHFLHV FDQQRW JHUPLQDWH RU VXUYLYH LQ DQ XQGHUVWRU\ HQYLURQPHQW 0DQ\ SULPDU\ IRUHVW

PAGE 34

VSHFLHV GR KRZHYHU EHQHILW IURP FDQRS\ VKDGH GXULQJ WKHLU HVWDEOLVKPHQW SKDVH %D]]D] f /DUJH YDSRU SUHVVXUH GHILFLWV GHVLFFDWLQJ ZLQGV H[WUHPH WHPSHUDWXUHV DQG UDGLDWLRQ ORDGV DUH UHGXFHG EHQHDWK WKH IRUHVW FDQRS\ 8QGHUVWRU\ FRQGLWLRQV DOORZ VKDGHWROHUDQW VHHGOLQJV WR HVWDEOLVK URRW V\VWHPV WKDW FDQ VXSSRUW IXUWKHU JURZWK RI SKRWRV\QWKHWLF VWHP WLVVXH 2QFH HVWDEOLVKHG KRZHYHU VHHGOLQJ JURZWK UDWHV LQ WKH XQGHUVWRU\ LQHYLWDEO\ VORZ DV D UHVXOW RI FRPSHWLWLRQ IURP QHLJKERULQJ WUHHV 0DUTXLV 6KXNOD DQG 5DPDNULVKQDQ f DQG KHUEDFHRXV YHJHWDWLRQ .UDMLFHN f &DQRS\ WKLQQLQJ VWXGLHV KDYH \LHOGHG D GRXEOLQJ LQ VWHP JURZWK UDWHV RI VHHGOLQJV DQG VDSOLQJV WZR WR WKUHH \HDUV DIWHU UHOHDVH WUHDWPHQWV (UGPDQQ DQG 3HWHUVRQ f EXW PD\ DOVR KDYH WKH LQYHUVH HIIHFW RI GHSUHVVLQJ KHLJKW JURZWK (UGPDQQ HW DO f LQ IDYRU RI GLDPHWHU JURZWK GHSHQGLQJ RQ WKH DPRXQW RI FDQRS\ UHPRYDO 5HPRYDO RI FDQRS\ WUHHV PD\ DOVR UHVXOW LQ VHHGOLQJ VWUHVV RU HYHQ PRUWDOLW\ LI H[SRVXUH RFFXUV WRR DEUXSWO\ RU LI VHHGOLQJV DUH LQVXIILFLHQWO\ HVWDEOLVKHG 7KLV VKRFN HIIHFW LV RIWHQ EHFDXVH WKH UDWLR RI URRW DEVRUELQJ VXUIDFH WR WUDQVSLULQJ VXUIDFH ILQH URRWOHDI VXUIDFH UDWLRf VXLWDEOH IRU VKDGHG FRQGLWLRQV GRHV QRW LQFUHDVH TXLFNO\ HQRXJK WR UHSODFH VKRRW WUDQVSLUDWLRQ ORVVHV .UDPHU DQG .RVORZVKL f DIWHU UHOHDVH $ VHHGOLQJ ZDWHU GHILFLW GHYHORSV FDXVLQJ VWRPDWDO FORVXUH DQG D GHFUHDVH LQ FDUERQ IL[DWLRQ WKH UHGXFHG FDSDFLW\ IRU WUDQVSLUDWLRQDO FRROLQJ FDQ DOVR UHVXOW LQ KHDW VWUHVV DQG GHDWK 6KHOWHUZRRG DQG UHODWHG VLOYLFXOWXUDO V\VWHPV DUH EDVHG RQ WKH LQFUHPHQWDO UHPRYDO RI FDQRS\ WUHHV WR DWWHQXDWH

PAGE 35

HQYLURQPHQWDO VWUHVVHV RQ VHHGOLQJV WKDW RFFXU ZLWK LQVWDQWDQHRXV UHOHDVH 6XSSRUW IRU WKLV VLOYLFXOWXUDO DSSURDFK FRPHV IURP 0DUTXLV f ZKR IRXQG WKDW $OOHJKHQ\ KDUGZRRG VHHGOLQJV RULJLQDWLQJ XQGHU VKHOWHUZRRG FDQRSLHV VXUYLYHG RYHUVWRU\ UHPRYDO EHWWHU WKDQ VHHGOLQJV IURP QDWXUDO FORVHG VWDQGV +H DOVR UHFRPPHQGHG WKDW VHHGOLQJV LQ QDWXUDO VWDQGV VKRXOG EH DW OHDVW WKUHH \HDUV ROG DQG WR FP WDOO WR VXUYLYH DIWHU UHOHDVH E\ FOHDUFXWWLQJ 6HHGOLQJ DJH RQ VKHOWHUZRRG VLWHV LQ FRQWUDVW KDG QR HIIHFW VHHGOLQJV VXUYLYDO DIWHU FDQRS\ UHPRYDO :LWK VRPH QRWDEOH H[FHSWLRQV VXFK DV %HWXOD DOOHJKDQLHQVLV LQ WKH *UHDW /DNHV UHJLRQ DQG 7VXJD KHWHURSK\OOD LQ WKH &DVFDGH 5DQJH RI 1RUWK $PHULFD (\UH DQG =LOOJLWW f VXVWDLQHG H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV LV XVXDOO\ GLVDGYDQWDJHRXV WR WUHH VHHGOLQJV 6XSSUHVVHG VHHGOLQJV VXIIHU LQFUHDVHG SHVW DWWDFN DQGRU IXQJDO GHFD\ DV WKH\ ORVH YLJRU (UGPDQQ f 7KH\ PD\ DOVR EH RYHUWRSSHG E\ PRUH VKDGHWROHUDQW VSHFLHV ,Q 0LFKLJDQ $FHU VDFFKDUXP VXJDU PDSOHf RXWJUHZ % DOOHJKDQLHQVLV \HOORZ ELUFKf DIWHU \HDUV RI VXSSUHVVLRQ (\UH DQG =LOOJLWW f (QKDQFHG JURZWK RI XQGHUVWRU\ VHHGOLQJV LQ UHVSRQVH WR UHOHDVH GLPLQLVKHV ZLWK DJH 0DUTXLV f (YHQ WKRXJK \HDU ROG ELUFK VWLOO UHVSRQGHG WR UHOHDVH (UGPDQQ DQG 3HWHUVRQ f WUHHV OHVV WKDQ \HDUV ROG KDG IDVWHU JURZWK UDWHV DIWHU UHOHDVH 5HVLGXDO HIIHFWV RI SURORQJHG H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV KDYH VLOYLFXOWXUDO LPSOLFDWLRQV ,Q SDUWLFXODU VLOYLFXOWXULVWV QHHG WR NQRZ KRZ ZHOO XQGHUVWRU\ WUHH VHHGOLQJV UHFRYHU DQG JURZ DIWHU UHOHDVH IURP YDU\LQJ SHULRGV RI JURZWK

PAGE 36

VXSSUHVVLRQ )RUHVW HFRQRPLVWV H[SORUH WKLV TXHVWLRQ LQ SUDFWLFDO WHUPV ZKHQ HYDOXDWLQJ SUHFRPPHUFLDO WKLQQLQJ RSHUDWLRQV LI SUHFRPPHUFLDOO\ UHOHDVHG WUHHV FRQVLVWHQWO\ JURZ ODUJHU LQ DYHUDJH GLDPHWHU DW EUHDVW KHLJKW '%+f WKDQ QRQUHOHDVHG WUHHV GRHV WKLV GLDPHWHU LQFUHDVH DW DQ HDUO\ DJH UHVXOW LQ WKH UHOHDVHG WUHHV PDWXULQJ DW D VLJQLILFDQWO\ HDUOLHU DJH WKDQ QRQUHOHDVHG WUHHV" ,I WUXH WKLV FRXOG UHVXOW LQ VKRUWHU URWDWLRQV DQG ZLWK VKRUWHU URWDWLRQV HFRQRPLF HYDOXDWLRQV PD\ EHFRPH PRUH IDYRUDEOH WR DSSO\LQJ FURSWUHH UHOHDVH WUHDWPHQW 6PLWK DQG /DPVRQ f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f VL]HJUDGHG VHHGOLQJV UHSUHVHQWLQJ PRUH WKDQ QDWLYH VSHFLHV DQG WZR QDWXUL]HG QLWURJHQIL[LQJ VSHFLHV ZHUH XVHG WR UHIRUHVW WZR SHUFHQW RI VWDWH IRUHVWODQGV LQ WKH UHVHDUFK DUHD HDFK \HDU IURP WRWDOLQJ PLOOLRQ VHHGOLQJV RYHU KD f XQGHUVWRU\ VHHGOLQJV FRPSULVH VHYHUDO NQRZQ DJH FODVVHV DQG ZHUH JURZLQJ EHQHDWK 063 FDQRSLHV IRU NQRZQ SHULRGV RI WLPH f RYHUVWRU\ VWDQG FRQGLWLRQV DUH DV XQLIRUP DV SODQWDWLRQ VLOYLFXOWXUH SHUPLWV LH VLPLODU RYHUVWRU\ VSHFLHV JURZQ DW VLPLODU SODQWLQJ GHQVLWLHV RQ VLPLODU VRLOV

PAGE 37

LQ WKH VDPH FOLPDWLF UHJLRQf WR PLQLPL]H H[WUDQHRXV YDULDWLRQ f FDQRS\ WUHH VSDFLQJ DQG VL]H LQ RQH WZR DQG WKUHH \HDU ROG SODQWDWLRQV SHUPLWWHG PDQLSXODWLRQ RI FDQRS\ RSHQQHVV YLD FDQRS\ WUHH ZLWK URSHV f VRLO FRQGLWLRQV DQG WUHH VSDFLQJ SHUPLWWHG P GHHS WUHQFKLQJ RI DW OHDVW P RI JURXQG VXUIDFH VXUURXQGLQJ WDUJHW VHHGOLQJV f SODQWDWLRQ VWDQGV DUH QRUPDOO\ ZHOOSURWHFWHG E\ WKH ORFDO IRUHVWU\ GHSDUWPHQW IURP WKHIW DUVRQ DQG GDPDJH IURP FDWWOH 3UHYLRXV VWXGLHV KDYH EHHQ GHVLJQHG WR DVVHVV WKH UHODWLYH HIIHFWV RI URRW YHUVXV VKRRW FRPSHWLWLRQ RQ ZRRG\ SODQW JURZWK XVLQJ SDUWLWLRQHG UHOHDVH H[SHULPHQWV HJ &KULVW\ +RUQ 3XW] 3XW] DQG &DQKDP 6KDLQVN\ DQG 5DGRVHYLFK 6WURWKPDQ :LOVRQ =HLGH f NQRZ RI QR VWXGLHV WKDW KDYH DGGUHVVHG WKH HIIHFWV RI GXUDWLRQ RI H[SRVXUH WR FRPSHWLWLRQ RQ VXEVHTXHQW JURZWK UDWHV RI UHOHDVHG ZRRG\ SHUHQQLDO VSHFLHV EXW VHH 6KXNOD DQG 5DPDNULVKQDQ f 6LOYLFXOWXUDO 6WXG\ )RFXV 7KLV VWXG\ DVVHVVHV KRZ VKRRW UHODWLYH JURZWK UDWHV 6KLSOH\ f RI WZR VSHFLHV RI WURSLFDO VHHGOLQJV FKDQJH GXULQJ LQFUHDVLQJ SHULRGV RI H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV DQG DIWHU H[SHULPHQWDO UHOHDVH IURP WKHP 5HOHDVH WUHDWPHQWV LQFOXGH VRLO WUHQFKLQJ 7f FDQRS\ JX\LQJ *f DQG WUHQFKLQJ DQG JX\LQJ 7 *f FRPELQHG 7KH IROORZLQJ TXHVWLRQV VHUYHG WR JXLGH WKLV VWXG\ DQG GHILQH K\SRWKHVHV IRU LQYHVWLJDWLRQ f 'R LQFUHDVLQJ SHULRGV RI H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV VORZ JURZWK UDWHV RI WKH WZR XQGHUVWRU\ VHHGOLQJ VSHFLHV RI LQWHUHVW"

PAGE 38

f 'R JURZWK UDWHV RI D UHSXWHGO\ VXSSUHVVLRQVKDGH WROHUDQW VSHFLHV VWDELOL]H ZKLOH JURZWK UDWHV RI D UHSXWHGO\ OHVV VKDGHWROHUDQW VSHFLHV FRQWLQXH WR VORZ ZLWK LQFUHDVLQJ SHULRGV RI FRQWLQXRXV XQGHUVWRU\ H[SRVXUH" f :KDW LV WKH HIIHFW RI RQH WZR DQG WKUHH \HDUV RI FRQWLQXRXV XQGHUVWRU\ H[SRVXUH RQ ZLWKLQ VSHFLHV DQG EHWZHHQ VSHFLHV VHHGOLQJ JURZWK UDWHV LQ WKH ILUVW \HDU DIWHU UHOHDVH IURP XQGHUVWRU\ FRQGLWLRQV" f 'RHV EHORZJURXQG FRPSHWLWLRQ LQKLELW JURZWK UDWHV RI XQGHUVWRU\ VHHGOLQJV PRUH WKDQ DERYHJURXQG FRPSHWLWLRQ ZKHQ XQGHUVWRU\ H[SRVXUH WLPH LV KHOG FRQVWDQW" 4XHVWLRQ f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

PAGE 39

DOVR OLPLWHG GXULQJ WKLV ILUVW \HDU 'XULQJ WKH VHFRQG DQG WKLUG \HDUV KRZHYHU 063 FDQRSLHV FDQ UHDFK KHLJKWV RI VL[ WR VHYHQ P DQG FORVH 7UHQFKLQJ VLPLODUO\ UHYHDOHG WKDW E\ WKH VHFRQG \HDU ODWHUDO URRWV RI QHLJKERULQJ VHHGOLQJV LQWHUPLQJOH ,I KRZHYHU XQGHUVWRU\ VHHGOLQJ VKRRW JURZWK IDLOV WR VORZ GXULQJ 063Vn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f FDQ EH DGGUHVVHG E\ EHWZHHQVSHFLHV FRPSDULVRQV RI VHHGOLQJ VKRRW JURZWK UDWHV IRU FRQWURO WUHDWPHQWV LQ SORWV RI LQFUHDVLQJ DJH 6KRRW JURZWK UHVSRQVHV DUH H[SHFWHG WR EH VSHFLHVVSHFLILF DV 063V DJH DV PHGLDWHG E\ D VSHFLHVn WROHUDQFH RI XQGHUVWRU\ FRQGLWLRQV )RU H[DPSOH VKRRW JURZWK UDWHV RI D UHSXWHGO\ XQGHUVWRU\VKDGHLQWROHUDQW VSHFLHV VKRXOG VORZ DV 063 RYHUVWRU\ WUHHV PDWXUH ZKLOH JURZWK RI PRUH VKDGH

PAGE 40

WROHUDQW VSHFLHV VKRXOG YDU\ OHVV RU VWDELOL]H 'XH WR LWV OLPLWHG WLPH KRUL]RQ WKLV VWXG\ LV XQDEOH WR PHDVXUH DQ\ VORZGRZQ LQ VKRRW JURZWK RI WKH XQGHUVWRU\LQWROHUDQW VSHFLHV RFFXUULQJ EH\RQG D 063nV WKLUG \HDU 4XHVWLRQ FDQ EH DGGUHVVHG E\ ZLWKLQVSHFLHV DQG EHWZHHQ VSHFLHV FRPSDULVRQV RI VHHGOLQJ VKRRW JURZWK UDWHV IRU WUHQFK DQG JX\ 7*f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f 6KRRW JURZWK RI WKH OHVVWROHUDQW VSHFLHV VKRXOG KRZHYHU UHVSRQG PRUH IDYRUDEO\ WR UHOHDVH WUHDWPHQW WKDQ GRHV WKH PRUH WROHUDQW VSHFLHV GXH WR WKH IRUPHUnV DGDSWLYH SUHIHUHQFH IRU RSHQ XQLPSHGHG JURZLQJ VSDFH 4XHVWLRQ f FDQ EH DGGUHVVHG E\ FRPSDULVRQ RI JURZWK UHVSRQVHV WR IDFWRULDO WUHDWPHQWV LH FRQWURO WUHQFK JX\ WUHQFK DQG JX\f DQG RQH IXUWKHU FRQWUDVW 13. IHUWLOL]DWLRQf

PAGE 41

WKH H[WHQW WR ZKLFK DERYHJURXQG DQGRU EHORZJURXQG IDFWRUV LQKLELW XQGHUVWRU\ VHHGOLQJ VKRRW JURZWK LQ 063V 7KLV IDFWRULDO H[SHULPHQW ZDV LPSRVHG RQO\ RQ WKH PRUH XQGHUVWRU\VKDGHWROHUDQW VSHFLHV LQ WKH ROGHVW WKUHH \HDUVf 063V DVVXPLQJ WKDW VLPLODU UHVXOWV FRXOG WKHQ EH H[SHFWHG IRU OHVVWROHUDQW VSHFLHV 7KH UHVHDUFK DUHDnV SURQRXQFHG ZHW DQG GU\ PRQVRRQ FOLPDWH SURGXFHV D PDUNHG JURZLQJ VHDVRQ IURP -XQH WR 'HFHPEHU IROORZHG E\ D GURXJKW\ VHPLGHFLGXRXVGRUPDQW VHDVRQ IURP -DQXDU\ WR 0D\ 6HHGOLQJV LQ IRUHVW QXUVHULHV JURZ TXLFNO\ GXULQJ WKH KRW GU\ PRQWKV RQO\ EHFDXVH LUULJDWLRQ LV SURYLGHG
PAGE 42

&+$37(5 6,/9,&8/785$/ 678'< 6,7( 6(/(&7,21 $1' ,03/(0(17$7,21 ,Q WKLV FKDSWHU GHVFULEH WKH VLOYLFXOWXUDO VWXG\ )RUPXODWLRQ DQG LPSOHPHQWDWLRQ RI P\ UHVHDUFK SODQ HYROYHG IURP D WRXU RI QRUWKZHVWHUQ .DUQDWDNDn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f SORWV GXULQJ D -DQXDU\ WRXU RI WKH 6LUVL )RUHVW 'LYLVLRQ ,QFUHDVHV LQ VKRRW KHLJKW DQG URRW FROODU EDVDO DUHD ZHUH HDVLO\ GLVWLQJXLVKHG DPRQJ QDWLYH WUHH VHHGOLQJV WKDW KDG EHHQ JURZLQJ RQH WZR RU WKUHH \HDUV ZLWKLQ 063V 7KHVH REVHUYDWLRQV ZHUH GLVFXVVHG ZLWK ORFDO IRUHVWHUV DQG WKHLU RSLQLRQV DERXW WKH UHODWLYH VKDGH RU XQGHUVWRU\ WROHUDQFH RI PDQ\ QDWLYH WUHH VSHFLHV ZHUH QRWHG 7KHUH ZDV DJUHHPHQW WKDW DOO VSHFLHV DFKLHYH PD[LPXP JURZWK ZKHQ

PAGE 43

JURZLQJ LQ IRUHVW JDSV RU RSHQLQJV EXW WKDW VRPH VSHFLHV WROHUDWH VKDGH EHWWHU WKDQ RWKHUV 7KH PRVW IUHTXHQWO\ SODQWHG VSHFLHV ZHUH FODVVLILHG DV HLWKHU VKDGH WROHUDQW RU VKDGH LQWROHUDQW 6KDGHWROHUDQW VSHFLHV LQFOXGHG /DJHUVWURHPLD ODQFHRODWD QXQGLf 7HUPLQDOLD SDQLFXODWD DQG 'DOEHUJLD ODWLIROLD 7HUPLQDOLD WRPHQWRVD PXWWLf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f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

PAGE 44

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

PAGE 45

7DEOH 6LUVL )RUHVW 'LYLVLRQ SODQWDWLRQV QXPEHU RI SODQWDWLRQV SODQWHG IURP <($5 3/$17(' 3/276 3/$17(' 7ZR KXQGUHG WKUHH RI WKHVH VWDQGV ZHUH ORFDWHG LQ PLQRU IRUHVW DUHDV VWDQGV ZHUH LQ UHVHUYH IRUHVWV DQG VL[ VWDQGV ZHUH LQ IRUHVWV ZKHUH ORFDO VSLFH JDUGHQ RZQHUV KDYH KLVWRULFDO WUHH ORSSLQJ SULYLOHJHV VRFDOOHG VRSSLQD EHWWD IRUHVWV 7ZR KXQGUHG VHYHQW\QLQH RI WKHVH VWDQGV DUH WUXH 063V ZKLOH VWDQGV ZHUH SODQWHG ZLWK HLWKHU %DPEXVD VSS EDPERRf 6DQWDODP DOEXP VDQGDOZRRGf $FDFLD DXULFXOLIRUPLV DFDFLDf &DVXDULQD HTXLVHWLIROLD $XVWUDOLDQ SLQHf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f +XQVHNRSS DQG $NVDO EORFNV DUH ZHVW DQG QRUWK RI

PAGE 46

6LUVL 7RZQ UHVSHFWLYHO\ 6LGGDSXU DQG +HJJHNRSS EORFNV DUH ERWK VRXWK RI 6LGGDSXU 7RZQ 7KH ILIWK +XOHNDO EORFN FRQWDLQHG WRR PDQ\ ODUJH UHVLGXDO WUHHV IRU LQFOXVLRQ DQG ZDV UHMHFWHG 7KH IRXU DFFHSWDEOH EORFNV KDG VLPLODU VHHGOLQJ VSDFLQJ LQ LQWUDn EORFN SORWV WZR RU WKUHH PHWHUVf DQG FRQWDLQHG D FKURQRORJLF VXLWH RI 063 SORWV SODQWHG GXULQJ DQG VHH 7DEOH f 7KH \RXQJHVW LH PRVW UHFHQWO\ SODQWHGf VHULHV RI SORWV f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f IRU VWXG\ 7UHHV LQ SORWV ROGHU WKDQ WKUHH \HDUV ZHUH RIWHQ WRR ODUJH WR HDVLO\ SHUPLW WKH FDQRS\ JX\LQJ DQG VRLO WUHQFKLQJ WUHDWPHQWV HPSOR\HG LQ WKLV VWXG\

PAGE 47

)LJXUH /RFDWLRQ RI UHVHDUFK EORFNV DQG 8WWDUD .DQDGD FLWLHV 6RXUFH .DUQDWDND )RUHVW 'HSDUWPHQW 0DSV 'LYLVLRQ $UDQ\D %KDYDQ %DQJDORUH

PAGE 48

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

PAGE 49

,17(59$/ IRU VXSSUHVVLRQ WROHUDQW VSHFLHV RQO\ ZKROH SORWVf 75($70(176 VSOLW SORWVf )LJXUH 6LOYLFXOWXUH H[SHULPHQW GHVLJQ EORFNV ZKROH SORWV DQG VSOLW SORWV 7DEOH 1XPEHU RI WUHDWPHQWV DVVLJQHG WR H[SHULPHQWDO XQLWV LQ 063 SORWV E\ VSHFLHV &21752/ 75(1&+ *8< 75(1&+ t *8< )(57,/,=$7,21 /DJHUVWURHPLD ODQFHRODWD 7HUPLQDOLD WRPHQWRVD 7DEOH 1XPEHU RI WUHDWPHQWV DVVLJQHG WR H[SHULPHQWDO XQLWV LQ DQG 063 SORWV E\ VSHFLHV &21752/ 75(1&+ t *8< /DJHUVWURHPLD ODQFHRODWD 7HUPLQDOLD WRPHQWRVD

PAGE 50

2QO\ / ODQFHRODWD UHFHLYHG DOO IRXU IDFWRULDO WUHDWPHQWV DQG WKH IHUWLOL]DWLRQ FRQWUDVW DQG RQO\ LQ WKH ROGHVW 063 SORWV VHH 7DEOH f 7KHVH ROGHVW SORWV XQGHU VWXG\ RIIHUHG WKH JUHDWHVW SRWHQWLDO IRU GHWHFWLRQ RI VORZHG VHHGOLQJ VKRRW JURZWK UHVXOWLQJ IURP UHVRXUFH FRPSHWLWLRQ JLYHQ WKDW SK\VLFDO FURZGLQJ DERYH DQG EHORZ JURXQG LQFUHDVHV DV SODQWDWLRQV PDWXUH )RU WKLV UHDVRQ GHFLGHG WR LPSRVH DOO WUHDWPHQW OHYHOV RQ WKH SORWV DQG WR GR WKLV IRU WKH UHSXWHGO\ PRUH VKDGHXQGHUVWRU\ WROHUDQW VSHFLHV / ODQFHRODWD ,I VORZHG JURZWK FRXOG EH GHWHFWHG IRU WKH PRUH WROHUDQW VSHFLHV WKHQ / ODQFHRODWDn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f PLPLFV D UHOHDVH HYHQW WKDW VHHGOLQJV QRUPDOO\ H[SHULHQFH DV D UHVXOW RI SODQWDWLRQ WKLQQLQJ RSHUDWLRQV 6HHGOLQJ VKRRW JURZWK ZDV PRQLWRUHG GXULQJ WKH \HDU IROORZLQJ H[SHULPHQWDO UHOHDVH ,Q WKH DQG SORWV ERWK / ODQFHRODWD DQG 7 WRPHQWRVD UHFHLYHG RQO\ WKH FRPELQHG VRLO WUHQFKLQJFDQRS\ JX\LQJ

PAGE 51

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

PAGE 52

)LJXUH &RPSDULVRQ RI FRQWURO DQG FRPELQHG VRLO WUHQFKLQJ FDQRS\ JX\LQJ WUHDWPHQWV DSSOLHG LQ WR RQH WZR DQG WKUHH \HDU ROG SODQWDWLRQV (DFK FDQGLGDWH VHHGOLQJ HQFRXQWHUHG ZDV LQVSHFWHG IRU VLJQV RI GDPDJH GLVHDVH PXOWLSOH VWHPV RU WKH SUHVHQFH RI YHJHWDWLRQ ZLWKLQ RQH P RI LWV EDVH ,QGLYLGXDOV KDYLQJ QRQH RI WKHVH GHILFLHQFLHV ZHUH IODJJHG IRU ODWHU PHDVXUHPHQW DQG WUHDWPHQW :KHQ FRPLQJ ZLWKLQ P RI D SORW HGJH PDGH D VHFRQG ULJKW DQJOH WXUQ DQG ZDONHG VL[ WR VHYHQ PHWHUV EHIRUH PDNLQJ D WKLUG ULJKWDQJOH WXUQ DQG WKHQ FRQWLQXHG WKH VHHGOLQJ VFDQQLQJ SURFHGXUH $IWHU PDUNHG D VXIILFLHQW QXPEHU RI FDQGLGDWH VHHGOLQJV LQ D SDUWLFXODU SORW PHDVXUHG WKH KHLJKW DQG URRW FROODU GLDPHWHU RI HDFK VHHGOLQJ :KHQ QHFHVVDU\ VRLO ZDV FOHDUHG IURP DURXQG WKH EDVH RI D VHHGOLQJ WR SHUPLW WZR URRW FROODU GLDPHWHU

PAGE 53

PHDVXUHPHQWV XVLQJ FDOLSHUV WKH VHFRQG PHDVXUHPHQW EHLQJ DW D ULJKW DQJOH WR WKH ILUVW /HQJWK RI WKH SULPDU\ VWHP ZDV UHFRUGHG IURP WKH URRW FROODU WR WKH DSLFDO EXG 7KH VSHFLHV RI WKH VHHGOLQJ DQG LWV JHQHUDO FRQGLWLRQ ZHUH UHFRUGHG (DFK LQGLYLGXDO ZDV WKHQ PDUNHG XVLQJ D ODEHOHG ODXQGU\ WDJ WLHG WR D OHQJWK RI VWULQJ DQG DWWDFKHG WR WKH PDLQ VWHP MXVW DERYH WKH SRLQW RI GLDPHWHU PHDVXUHPHQW $ VHFRQG ODEHOHG WDJ ZDV DWWDFKHG WR HDFK LQGLYLGXDO PLGZD\ DORQJ LWV VWHP WR LQVXUH IXWXUH LGHQWLILFDWLRQ (DFK LQGLYLGXDOnV ORFDWLRQ ZDV PDUNHG RQ D GHWDLOHG SORW PDS &DQRS\ RSHQQHVV ZDV HVWLPDWHG XVLQJ D KHPLVSKHULFDO GHQVLRPHWHU /HPPRQ f DYHUDJLQJ PHDVXUHPHQWV PDGH DERYH HDFK VHHGOLQJn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

PAGE 54

FP RU PRUH DQG KHLJKWV RI VL[ WR VHYHQ P +HUH FDQRS\ RSHQQHVV UDQJHG IURP WR SHUFHQW DQG FRXOG EH LQFUHDVHG ZLWK JX\LQJ WR RQO\ SHUFHQW WR SHUFHQW RSHQQHVV 7R EHQG WKHVH ODUJHU LQGLYLGXDOV GRZQ IRU JX\LQJ UHTXLUHG FOLPELQJ PRUH WKDQ KDOI ZD\ XS WKHP DOORZLQJ RQHn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f DQG EDFNILOOHG GXULQJ D IXOO GD\ RI GLJJLQJ 2QH KXQGUHG WZHOYH SLWV ZHUH GXJ LQ WKLV VWXG\ WDNLQJ PRUH WKDQ D PRQWK IRU P\VHOI DQG WZR DVVLVWDQWV WR FRPSOHWH :KLOH GLJJLQJ QRWHG WKDW PRVW URRWLQJ DFWLYLW\ RFFXUUHG LQ WKH XSSHU FP RI WKH VRLO SURILOH LQFOXGLQJ PRVW ODUJH ODWHUDO URRWV 5RRWV VPDOOHU WKDQ FP GLDPHWHU ZHUH VRPHWLPHV REVHUYHG WR H[WHQG EHORZ D GHSWK RI FP EXW HYHQ WKHVH ZHUH XQFRPPRQ )RU WKLV

PAGE 55

UHDVRQ FRQFOXGHG WKDW VRLO WUHQFKLQJ ZRXOG EH DQ HIIHFWLYH H[SHULPHQWDO PHWKRG WR UHGXFH EHORZJURXQG FRPSHWLWLRQ IRU H[SHULPHQWDO SODQWV DOWKRXJK LW GLG QRW SUHYHQW FRPSHWLWLRQ GHHSHU LQ WKH VRLO SURILOH 6RPH WDUJHW VHHGOLQJ URRWV ZHUH QHFDVVDULO\ FXW GXULQJ WUHQFKLQJ LQ WKH ROGHVW SORWV EXW GDPDJH ZDV PLQLPDO WR WDUJHW VHHGOLQJ URRWV LQ DQG SORWV 13. IHUWLOL]HU ZDV DGGHG WZLFH WR VHOHFWHG / ODQFHRODWD VHHGOLQJV ILUVW LQ -XQH DQG WKHQ DJDLQ LQ 2FWREHU RI 2QH KXQGUHG JUDPV RI -DL .LVDDQnV 6DPSXUQD 13. SDUWLFOH PL[ 12 b 32 b .2 b =XDUL $JURFKHPLFDOV /WG *RD ,QGLDf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

PAGE 56

JURZWK RI DOO H[SHULPHQWDO VHHGOLQJV 7KHVH GDWD DOORZ FRPSDULVRQ RI XQGHUVWRU\ VHHGOLQJ VKRRW JURZWK IRU WKH ZHW -XQH 'HFHPEHUf DQG GU\ -DQXDU\0D\f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f SULRU WR GU\LQJ DW r & 3HDUF\ f LQ D n%LRFKHPn KRW DLU RYHQ 8QLYHUVDO %LRFKHPLFDOV 6DWK\D 6D\HH 1DJDU 0DGXUDL ,QGLDf IURP WZR WR VL[ GD\V XQWLO GU\ ZHLJKWV VWDELOL]HG 'U\LQJ WLPH ZDV D IXQFWLRQ RI VKRRW GLDPHWHU WKLFNHU LQGLYLGXDOV UHTXLULQJ ORQJHU WR GU\ WR D FRQVWDQW ZHLJKW

PAGE 57

)LQDOO\ LQGLYLGXDOV HDFK RI / ODQFHRODWD DQG 7 WRPHQWRVD ZHUH DVKHG DQG WKH DVK ZHLJKHG WR GHWHUPLQH DYHUDJH DVK FRQWHQW RI HDFK VSHFLHV &DOLEUDWLRQ (VWLPDWHV 5HTXLULQJ 'HVWUXFWLYH 0HDVXUHPHQWV &DOLEUDWLRQ GDWD ERWK VSHFLHV ZHUH REWDLQHG LQ WKH IROORZLQJ PDQQHU 1RQGHVWUXFWLYH PHDVXUHPHQWV LH VKRRW KHLJKW DQG URRW FROODU EDVDO DUHDf RI DOO H[SHULPHQWDO SODQWV DW WKH 0D\ -XQH VWDUW RI WKH VWXG\ ZDV FRPSOHPHQWHG E\ GHVWUXFWLYH PHDVXUHPHQW RI UDQGRPO\VHOHFWHG VHHGOLQJV RXWSODQWHG LQWR 063V D \HDU HDUOLHU LQ -XQH )URP WKHVH / ODQFHRODWD DQG 7 WRPHQWRVD LQGLYLGXDOV VKRRW GU\ ZHLJKW HVWLPDWHV ZHUH FDOFXODWHG IRU / ODQFHRODWD DQG 7 WRPHQWRVD H[SHULPHQWDO VHHGOLQJV XVLQJ URRW FROODU EDVDO DUHD UHJUHVVLRQV 7KHVH VHHGOLQJV ZHUH XVHG EHFDXVH P\ H[SHULPHQWDO VHHGOLQJV FRXOG QRW EH GHVWUXFWLYHO\ PHDVXUHG DW WKH VWXG\nV RXWVHW :KHQ WKH VWXG\ FRQFOXGHG LQ -XQH GHVWUXFWLYH PHDVXUHPHQWV RI DOO H[SHULPHQWDO VHHGOLQJV SURYLGHG VKRRW GU\ZHLJKW HVWLPDWHV IRU H[SHULPHQWDO VHHGOLQJV WKDW KDG DOUHDG\ EHHQ RXWSODQWHG IRU WZR \HDUV ZKHQ WKH VWXG\ EHJDQ LQ -XQH LH P\ H[SHULPHQWDO VHHGOLQJVf 6LPLODUO\ GHVWUXFWLYH PHDVXUHPHQWV RI DOO H[SHULPHQWDO VHHGOLQJV SURYLGHG VKRRW GU\ ZHLJKW HVWLPDWHV IRU H[SHULPHQWDO VHHGOLQJV WKDW KDG EHHQ RXWSODQWHG WKUHH \HDUV SULRU WR WKH VWDUW RI WKH VWXG\ LH P\ H[SHULPHQWDO VHHGOLQJVf VHH )LJXUH f

PAGE 58

6WXG\ EHJLQV 6WXG\ HQGV +DUYHVW JURZWK GDWD XVHG WR HVWLPDWH VWDUWLQJ ELRPDVV RI QH[W ROGHU VHHGOLQJ FRKRUW QRQVWXG\ VHHGOLQJV XVHG WR HVWLPDWH VWDUWLQJ ELRPDVV RI VHHGOLQJV 3ODQWHG L 3ODQWHG $JH 3ODQWHG $JH $JH , ,f§ IWJM L $JG $n $JH $n +DUYHVW $JH $JH $JH )LJXUH 'HVWUXFWLYH VHHGOLQJ KDUYHVW SODQ XVHG WR HVWLPDWH VKRRW ELRPDVV RI RQH WZR DQG WKUHH \HDUROG VHHGOLQJV DW WKH VWDUW RI WKH VWXG\ 7KLV VWUDWHJ\ RI XVLQJ JURZWK GDWD RI \RXQJHU VHHGOLQJV FROOHFWHG DW WKH HQG RI WKH H[SHULPHQW WR HVWLPDWH LQLWLDO GU\ ZHLJKWV RI WKH QH[W ROGHU FRKRUW RI VHHGOLQJV DW WKH VWDUW RI WKH H[SHULPHQW DFFRPSOLVKHG WZR REMHFWLYHV ,W LQVXUHG WKDW FDOLEUDWLRQ PHDVXUHPHQWV ZHUH GHULYHG IURP VHHGOLQJV IRXQG JURZLQJ ZLWKLQ WKH VWXG\nV H[SHULPHQWDO EORFNV ZKHUH VLWH FRQGLWLRQV ZHUH PRVW QHDUO\ VLPLODU WR WKRVH RI RWKHU H[SHULPHQWDO VHHGOLQJV ,W DOVR PLQLPL]HG WKH GHVWUXFWLYH LPSDFW RI WKLV VWXG\ RQ VHHGOLQJ UHJHQHUDWLRQ ZLWKLQ WKH UHVHDUFK DUHD 7DEOH FRQWDLQV WKH FDOLEUDWLRQ HTXDWLRQV XVHG WR HVWLPDWH VKRRW GU\ ZHLJKWV DW WKH -XQH VWDUW RI WKH H[SHULPHQW IRU DOO WKUHH VHHGOLQJ DJH FRKRUWV 5RRW FROODU EDVDO DUHD ZDV IRXQG WR SURYLGH EHWWHU HVWLPDWHV RI VKRRW GU\ ZHLJKW WKDQ VKRRW KHLJKW DQG ZDV WKHUHIRUH XVHG LQ GHULYLQJ WKH HTXDWLRQV LQ 7DEOH

PAGE 59

7DEOH 6HHGOLQJ URRW FROODU EDVDO DUHD FPf UHJUHVVLRQV XVHG WR HVWLPDWH /DJHUVWURHPLD ODQFHRODWD DQG 7HUPLQDOLD WRPHQWRVD VKRRW GU\ ZHLJKWV Jf DW WKH VWDUW RI WKH H[SHULPHQW / \ [f \ [f \ [f ODQFHRODWD 5 5 5 VH Q VH Q VH Q 7 \ [f \ [f \ [f WRPHQWRVD 5 5 5 VH Q VH Q VH Q \ VKRRW GU\ ZHLJKW HVWLPDWH [ URRW FROODU EDVDO DUHD VH VWDQGDUG HUURU RI VORSH FRHIILFLHQWV Q VDPSOH VL]H 6KRRW GU\ ZHLJKW FDOLEUDWLRQ HVWLPDWHV IRU -XQH ZKHQ WKH \HDUORQJ VWXG\ EHJDQ ZHUH XVHG WR FDOFXODWH VKRRW UHODWLYH JURZWK UDWHV 5*5Vf DV GHVFULEHG E\ (YDQV f DQG +XQW f ORJH + ORJH +L 5*5 JUDPV JUDP LQWHUYDOf 7 7L ZKHUH +L VKRRW KHLJKW FPf URRW FROODU EDVDO DUHD PPf RU RYHQGULHG VKRRW ELRPDVV Jf DW WKH EHJLQQLQJ RI WKH H[SHULPHQWDO LQWHUYDO + VKRRW KHLJKW FPf URRW FROODU EDVDO DUHD PPf RU RYHQGULHG VKRRW ELRPDVV Jf DW WKH HQG RI WKH H[SHULPHQWDO LQWHUYDO W f 7L H[SHULPHQWDO PHDVXUHPHQW LQWHUYDO

PAGE 60

5*5 DQ LQGH[ RI HIILFLHQF\ RI SODQWV DV SURGXFHUV RI QHZ PDWHULDO +XQW f SHUPLWV FRPSDULVRQV RI JURZWK IRU SODQWV RI XQHTXDO VL]H +HUH LW LV HTXLYDOHQW WR WKH VORSH RI WKH QDWXUDO ORJDULWKP RI VKRRW JURZWK +f SORWWHG DJDLQVW WLPH 7f 7KLV VWXG\ FRPSDUHV WKHVH 5*5V ZLWK UHVSHFW WR VSHFLHV WUHDWPHQW DQG 063 DJH 5*5 FRPSDULVRQV RI VKRRW GU\ ZHLJKWV ZHUH PDGH IRU WKH PRQWK VWXG\ SHULRG 6KRRW KHLJKW DQG URRW FROODU EDVDO DUHD 5*5V ZHUH FRPSDUHG RYHU ZHW -XQH'HFHPEHUf DQG GU\ -DQXDU\0D\f VHDVRQ SHULRGV DQG GLG QRW UHTXLUH GHVWUXFWLYH VDPSOLQJ RU FDOLEUDWLRQ 7HVWLQJ IRU GLIIHUHQFHV LQ 5*5V RI VHHGOLQJ VKRRW KHLJKW URRW FROODU EDVDO DUHD DQG VHHGOLQJ VKRRW GU\ ZHLJKW ZHUH GRQH XVLQJ 3& 6$6 9HUVLRQ f DQG WKH 6$6 *HQHUDO /LQHDU 0RGHOV 3URFHGXUH /LWWHOO HW DO f 7KHVH UHVXOWV DUH SUHVHQWHG ZLWK RWKHU H[SHULPHQWDO UHVXOWV LQ &KDSWHU

PAGE 61

&+$37(5 6,/9,&8/785$/ 678'< 5(68/76 $1' ',6&866,21 ,1752'8&7,21 7KLV FKDSWHU SUHVHQWV UHVXOWV RI WKH VKRRW JURZWK UDWH VWXG\ FRQGXFWHG RQ VHHGOLQJV RI QDWLYH WUHHV JURZLQJ ZLWKLQ 0XOWLSOH 6SHFLHV 3ODQWDWLRQ 063f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f DQG GU\ -DQXDU\0D\f VHDVRQV &RPSDULVRQ RI WKHVH WKUHH JURZWK SDUDPHWHUV IRU WKH WZR SHULRGV LOOXVWUDWHV WKDW QHDUO\ DOO VKRRW JURZWK RFFXUUHG GXULQJ WKH ZHW PRQVRRQ VHH 7DEOH f

PAGE 62

7DEOH 3HUFHQWDJH RI DQQXDO VHHGOLQJ VKRRW JURZWK RFFXUULQJ GXULQJ PRQVRRQ YHUVXV GU\ VHDVRQ Q 6HDVRQ 6KRRW ([WHQVLRQ 5RRW &ROODU $UHD *URZWK 6KRRW 'U\ :HLJKW ,QFUHPHQW EDVHG RQ FDOLEUDWLRQ HVWLPDWHVf 0RQVRRQ SHUFHQW SHUFHQW SHUFHQW -XQ'HFf 'U\ SHUFHQW QHW QHJDWLYH QHW QHJDWLYH JURZWK -DQ0D\f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f H[SHULPHQWDO WUHHV ZHUH GDPDJHG RU GLHG GXULQJ WKH RQH \HDU UHVHDUFK SHULRG ZKLOH WUHHV SHUFHQWf ZHUH QRW GDPDJHG )LIW\WKUHH RI WKH GDPDJHG WUHHV ZHUH EURZVHG E\ GRPHVWLF DQLPDOV ZHUH KDFNHG E\ YLOODJHUV ZKLOH FROOHFWLQJ IRGGHU ZHUH XSURRWHG E\ SRUFXSLQHV DQG WZR GLHG RI

PAGE 63

XQNQRZQ FDXVHV 7UHH GDPDJH HYHQWV ZHUH UHFRUGHG ZKHQ REVHUYHG DQG DOO DIIHFWHG WUHHV ZHUH WKHUHDIWHU H[FOXGHG IURP IXUWKHU VKRRW JURZWK FDOFXODWLRQV )LIW\WZR RI WKH SHUFHQWf GDPDJHG WUHHV ZHUH ORFDWHG LQ WKH $NVDO DQG +HJJHNRSS EORFNV 7KHVH WZR EORFNV ZHUH SK\VLFDOO\ FORVHU WR KDPOHWV WKDQ WKH 6LGGDSXU DQG +XQVHNRSS EORFNV DFFRXQWLQJ IRU PRUH IUHTXHQW WUHH GDPDJH $NVDO DQG +HJJHNRSS EORFNV DOVR \LHOGHG HLJKW RI QLQH QHW QHJDWLYH VKRRW GU\ ZHLJKW WUHDWPHQW PHDQV IRU DOO EORFNV GXULQJ WKH VWXG\ (LJKW RI SHUFHQWf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

PAGE 64

+HJJHNRSS EORFNV ZDV H[FOXGHG IURP VKRRW GU\ ZHLJKW 5*5 HVWLPDWHV 6KRRW DQG 5RRW &ROODU 5HODWLYH *URZWK 5DWH 5*5f 5HVXOWV 6KRRW H[WHQVLRQ LQ UHVSRQVH WR LQFUHDVLQJ SHULRGV RI XQGHUVWRU\ H[SRVXUH ZDV VSHFLHV PHGLDWHG VHH )LJXUH f /DJHUVWURHPLD ODQFHRODWD VKRRWV JUHZ IDVWHU WKDQ 7 WRPHQWRVD VKRRWV GXULQJ WKH ILUVW WZR \HDUV RI XQGHUVWRU\ H[SRVXUH EXW WKHQ VORZHG GUDPDWLFDOO\ GXULQJ \HDU WKUHH ) S Q f 7KRXJK WKH PRUH XQGHUVWRU\ WROHUDQW VSHFLHV / ODQFHRODWDnV IDVWHU VKRRW JURZWK ZDV XOWLPDWHO\ FXUWDLOHG E\ WKH FORVLQJ FDQRS\ LQ WKUHH \HDU ROG 063V 7HUPLQDOLD WRPHQWRVD VKRRW JURZWK ZDV VORZHU EXW VXVWDLQHG GXULQJ WKH H[SHULPHQW VHH )LJXUH f 7HUPLQDOLD WRPHQWRVD VHHGOLQJV GHPRQVWUDWH WKDW HYHQ PRUH XQGHUVWRU\ LQWROHUDQW VSHFLHV DUH FDSDEOH RI VXVWDLQLQJ WKHPVHOYHV EHQHDWK D IRUHVW FDQRS\ ZKHQ \RXQJ 5RRW FROODU DUHD JURZWK UDWHV RI ERWK RI 7 WRPHQWRVD DQG / ODQFHRODWD SURJUHVVLYHO\ GHFUHDVHG ZLWK LQFUHDVLQJ H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV ) S Q VHH )LJXUH f 6SHFLHVEDVHG GLIIHUHQFHV LQ URRW FROODU JURZWK UDWHV ZHUH QRW VLJQLILFDQW

PAGE 65

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

PAGE 66

6KRRW GU\ ZHLJKW LQFUHPHQWV IRU ERWK WUHH VSHFLHV DSSDUHQWO\ LQFUHDVHV ZLWK LQFUHDVLQJ H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV EXW WKLV ZDV GXH WR EORFN r \HDU LQWHUDFWLRQ ) S Q f UDWKHU WKDQ WKH HIIHFW RI QXPEHU RI \HDUV RI XQGHUVWRU\ H[SRVXUH VHH )LJXUH f 6KRRW GU\ ZHLJKW LQFUHPHQW RI 7HUP LQDOLD WRPHQWRVD DQG /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ FRQWUROV \HDU \HDU \HDU )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW FRPSDULVRQ RI 7HUPLQDOLD WRPHQWRVD DQG /DJHUVWURHPLD ODQFHRODWD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7KH QH[W VL[ JUDSKV UHSUHVHQW WKH HIIHFWV RI RQH WZR DQG WKUHH \HDUV RI FRQWLQXRXV XQGHUVWRU\ H[SRVXUH RQ H[SHULPHQWDO SODQWVn VKRRW JURZWK UDWHV LQ WKH ILUVW \HDU DIWHU UHOHDVH IURP XQGHUVWRU\ FRQGLWLRQV )LJXUH LQGLFDWHV WKDW H[SHULPHQWDO UHOHDVH RI / ODQFHRODWD SURGXFHG VLJQLILFDQW SRVWUHOHDVH VKRRW H[WHQVLRQ DIWHU RQH DQG WKUHH \HDUV RI XQGHUVWRU\ H[SRVXUH ) S Q f 7KH HIIHFW RI UHOHDVH DIWHU WZR \HDUV RI XQGHUVWRU\ H[SRVXUH LV LQFRQFOXVLYH

PAGE 67

6KRRW H[WHQVLRQ RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 6KRRW H[WHQVLRQ RI /DJHUVWURHPLD ODQFHRODWD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf 6KRRW H[WHQVLRQ RI 7HUPLQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 6KRRW H[WHQVLRQ RI 7HUPLQDOLD WRPHQWRVD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf

PAGE 68

([SHULPHQWDO UHOHDVH RI 7 WRPHQWRVD WUHHV IURP XQGHUVWRU\ FRQGLWLRQV SURGXFHG XQLIRUP SRVWUHOHDVH VKRRW JURZWK UDWHV VHH )LJXUH f 5RRW FROODU JURZWK UDWHV DOVR LQFUHDVHG IRU 7 WRPHQWRVD VHHGOLQJV DIWHU WKH\ ZHUH UHODHVHG IURP WZR DQG WKUHH \HDUV RI XQGHUVWRU\ H[SRVXUH ) S Q VHH )LJXUH f ZKHQ FRPSDUHG WR FRQWUROV 7KHVH LQFUHDVHV RFFXUUHG ZLWKLQ WKH FRQWH[W RI VORZLQJ URRW FROODU DUHD JURZWK UDWHV IRU ERWK UHOHDVH DQG FRQWURO WUHDWPHQWV 5HOHDVH WKHUHIRUH PLWLJDWHG D JHQHUDO VORZLQJ RI VKRRW JURZWK DPRQJ DOO 7 WRPHQWRVD WUHHV )LJXUH GHPRQVWUDWHV D PRUH SURQRXQFHG PLWLJDWLRQ RI VORZLQJ URRW FROODU DUHD JURZWK IRU UHOHDVHG / ODQFHRODWD WUHHV UHJDUGOHVV RI XQGHUVWRU\ H[SRVXUH WLPH ) S Q f 5RRW FROODU DUHD JURZWK RI 7HUPLQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWOQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 5RRW FROODU DUHD JURZWK RI 7HUPLQDOLD WRPHQWRVD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK e *X\ 7 *f YV &RQWURO &WUOf

PAGE 69

5RRW FROODU DUHD JURZWK RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 5RRW FROODU DUHD JURZWK RI /DJHUVWURHPLD ODQFHRODWD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf 6KRRW GU\ ZHLJKW ,QFUHPHQW RI 7HUP LQDOLD WRPHQWRVD DQG \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW RI 7HUPLQDOD WRPHQWRVD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf 3RVWUHOHDVH LQFUHPHQWV RI VKRRW GU\ ZHLJKWV ZHUH QRW VLJQLILFDQW ZKHQ FRPSDUHG WR FRQWUROV IRU HLWKHU 7 WRPHQWRVD

PAGE 70

VHH )LJXUH f RU / ODQFHRODWD VHH )LJXUH f UHJDUGOHVV RI SULRU GXUDWLRQ RI XQGHUVWRU\ H[SRVXUH )LJXUHV DQG VXJJHVW KRZHYHU WKDW SRVWUHOHDVH VKRRW ZHLJKW LQFUHPHQWV GLG QRW GHFUHDVH ZLWK LQFUHDVLQJ H[SRVXUH WR XQGHUVWRU\ FRQGLWLRQV 6KRRW GU\ ZHLJKW LQFUHPHQW RI /DJHUVWURHPLD ODQFHRODWD DQG \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV FRQWURO &WUOf \HDU \HDU \HDU )LJXUH 6KRRW GU\ ZHLJKW LQFUHPHQW RI /DJHUVWURHPLD ODQFHRODWD RQH WZR DQG WKUHH \HDUV DIWHU RXWSODQWLQJ LQWR 063V 7UHQFK t *X\ 7 *f YV &RQWURO &WUOf 7KH ILQDO WKUHH JUDSKV FRPSDUH WKH JURZWK LQKLELWLRQ HIIHFWV RI EHORZJURXQG DQG DERYHJURXQG FRPSHWLWLRQ RQ / ODQFHRODWD SODQWVn VKRRW JURZWK UDWHV DIWHU WKUHH \HDUV RI XQGHUVWRU\ H[SRVXUH 7KH\ DOVR FRPSDUH WUHQFK 7f WR IHUWLOL]DWLRQ 13.f WUHDWPHQWV WR LGHQWLI\ ZKHWKHU VRLO PRLVWXUH RU VRLO QXWULHQWV PRUH OLPLW VKRRW JURZWK UDWHV )LJXUH VKRZV WKDW ZKLOH DOO IRXU LPSRVHG WUHDWPHQWV UHVXOWHG LQ LQFUHDVHG VKRRW H[WHQVLRQ UHODWLYH WR FRQWUROV GLIIHUHQFHV EHWZHHQ WKH DSSOLHG WUHDWPHQWV ZHUH QRW VLJQLILFDQW VWDWLVWLFDOO\ ) S Q f 6LPLODU QRQVLJQLILFDQW UHVXOWV ZHUH REWDLQHG IRU URRW FROODU

PAGE 71

DUHD VHH )LJXUH f DQG VKRRW GU\ ZHLJKW LQFUHPHQW VHH )LJXUH f ZKHQ FRPSDULQJ WKH IRXU QRQFRQWURO WUHDWPHQWV 6KRRW H[WHQVLRQ RI /DJHUVWURHPLD ODQFHRODWD \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV 7f YV *f YV FRQWURO &WUOf YV 13. )LJXUH 6KRRW H[WHQVLRQ RI /DJHUVWURHPLD ODQFHRODWD WKUHH \HDUV DIWHU RXWSODQWLQJ WUHQFK DQG JX\ YV WUHQFK YV JX\ YV FRQWURO YV 13. WUHDWPHQWVf 5RRW FROODU DUHD JURZWK RI /DJHUVWURHPLD ODQFHRODWD \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV 7f YV *f YV FRQWURO &WUOf YV )LJXUH 5RRW FROODU DUHD JURZWK RI /DJHUVWURHPLD ODQFHRODWD WKUHH \HDUV DIWHU RXWSODQWLQJ WUHQFK DQG JX\ YV WUHQFK YV JX\ YV FRQWURO YV 13. WUHDWPHQWV

PAGE 72

6KRRW GU\ ZHLJKW LQFUHPHQW RI /DJHUVWURHPLD ODQFHRODWD \HDUV DIWHU RXWSODQWLQJ WUHQFK t JX\ 7*f YV 7f YV *f YV FRQWURO &WUOf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n HIIHFWLYH JURZLQJ VHDVRQ IXUWKHU LQWR WKH GU\ VHDVRQ ZRXOG LPSURYH WKHLU JURZWK SHUIRUPDQFH /RZHU VRLO WHPSHUDWXUHV HQKDQFHG DQG SURORQJHG UHWHQWLRQ RI VRLO PRLVWXUH LQFUHDVHG DFFXPXODWLRQ RI OHDI OLWWHU DQG UHGXFHG LQVRODWLRQ PD\ DOO LPSURYH WKH 063 XQGHUVWRU\ IRU VHHGOLQJ JURZWK )RU H[DPSOH QRRQ WHPSHUDWXUHV FP EHORZ WKH VRLO VXUIDFH LQ 0D\ ZHUH FRROHU EHQHDWK D WKUHH \HDUROG 063 WKDQ EHQHDWK D QHLJKERULQJ

PAGE 73

SODQWDWLRQ ZLWK RSHQJURZQ VHHGOLQJV RI WKH VDPH DJH r & YV r &f 5HSHDWHG GU\ VHDVRQ PHDVXUHPHQWV RI WKHVH DELRWLF IDFWRUV FRXOG FRXOG WHVW IRU SRWHQWLDO LQFUHDVHV LQ WKH HIIHFWLYH JURZLQJ VHDVRQ SURYLGHG E\ WKH 063 HQYLURQPHQW 7DEOH &RPSDUDWLYH VKRRW DQG URRW FROODU JURZWK RI WUHHV JURZQ ZLWK DQG ZLWKRXW PDWUL[ WUHHV LQ PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf Q 6SHFLHV 7UHHV *URZQ 7UHHV *URZQ :LWK 0DWUL[ :LWKRXW 0DWUL[ 7UHHV 7UHHV 7HUPLQDOLD WRPHQWRVD VKRRW H[WHQVLRQ FP\Uf /DJHUVWURHPLV ODQFHRODWD VKRRW H[WHQVLRQ FP\Uf ERWK VSHFLHV FP\Uf 7HUPLQDOLD WRPHQWRVD URRW FROODU DUHD PP\Uf /DJHUVWURHPLV ODQFHRODWD URRW FROODU DUHD PP\Uf ERWK VSHFLHV PP\Uf 7KH JURZWK IRUP RI XQGHUVWRU\ VHHGOLQJV DOVR LPSURYHV ZLWK WKH SUHVHQFH RI IDVWJURZLQJ QLWURJHQIL[LQJ PDWUL[ VSHFLHV LQ 063V UHODWLYH WR RSHQJURZQ VHHGOLQJV 7DEOH FRPSDUHV PHDQ VKRRW DQG URRW FROODU EDVDO DUHD JURZWK IRU HLJKW VHHGOLQJV IRXU / ODQFHRODWD DQG IRXU 7 WRPHQWRVDf JURZLQJ LQ WKH DEVHQFH RI PDWUL[ WUHHV YHUVXV HTXDO QXPEHUV RI VHHGOLQJV JURZLQJ EHQHDWK

PAGE 74

PDWUL[ WUHHV 7KHVH VHHGOLQJV ZHUH DOO ORFDWHG LQ WKH SORW RI WKH 6LGGDSXU EORFN 6KDGHWROHUDQW / ODQFHRODWD JUHZ PRUH LQ VKRRW KHLJKW XQGHU PDWUL[ WUHHV WKDQ LW GLG LQ WKH RSHQ / ODQFHRODWDnV URRW FROODU DUHD JURZWK ZDV VLPLODU ZKHWKHU JURZLQJ XQGHU PDWUL[ WUHHV RU QRW /HVV WROHUDQW 7 WRPHQWRVDn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

PAGE 75

PDWUL[ VSHFLHV WR SUHFOXGH WKH LQWURGXFWLRQ DQGRU VSUHDG RI LQYDVLYH DQG H[RWLF VSHFLHV )DVWJURZLQJ QDWLYH VSHFLHV ZLWK VXLWDEOH JURZWK FKDUDFWHULVWLFV VKRXOG EH VHOHFWHG WHVWHG DQG XVHG DV 063 PDWUL[ VSHFLHV ZKHQHYHU SRVVLEOH )LQDOO\ WKH 063 HQYLURQPHQW DOVR DSSHDUV WR IDFLOLWDWH QDWXUDO UHFUXLWPHQW DQG VXFFHVVLRQ ZKHQ FRPSDUHG WR SODQWDWLRQV ZLWKRXW PDWUL[ VSHFLHV 7KLV SKHQRPHQRQ LV LQGLFDWHG E\ WKH HDUO\ DSSHDUDQFH RI XQSODQWHG VSHFLHV OLNH 6\]\JLXP FXPLQL(XJHQLD MDPERODQXP JXDYDf &LQQDPRPXP ]H\ODQWLFXP FLQQDPRQf ,[RUD JUDQGLIORUD &DOLFRSWHULV IORULEXQGD 3LSHU QLJUXP ZLOG EODFN SHSSHUf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f WR QDPH D IHZ 7KHVH VSHFLHV DUH QRW D FRPSOHWH UHSUHVHQWDWLRQ

PAGE 76

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

PAGE 77

DQG VSHFLILF IRUHVW SURGXFWV E\ ,QGLDQ IRUHVW ODZ KDV VSUHDG DQG LQWHQVLILHG RYHU WKH SDVW \HDUV ,Q WKLV FRQWH[W 063V FDQ EH YLHZHG DV WKH PRVW UHFHQW PDQLIHVWDWLRQ RI OHJDOL]HG VWDWH DSSURSULDWLRQ RI IRUHVW UHVRXUFHV IURP ORFDO SXUYLHZ

PAGE 78

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f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

PAGE 79

QRUWKZHVWHUQ .DUQDWDND )LQDOO\ LQWURGXFH IRUHVW UHVRXUFH XVH VXUYH\V DV LQYHVWLJDWLYH WRROV WR f GRFXPHQW ORFDO NQRZOHGJH DQG XVH RI IRUHVW UHVRXUFHV DQG f WR GHVFULEH LPSDFWV RI 063V RQ D ORFDO IRUHVWGHSHQGHQW FRPPXQLW\ 7KH +LVWRULFDO &RQWH[W 3ULRU WR WKH FRQVROLGDWLRQ RI %ULWLVK UXOH LQ SHQLQVXODU ,QGLD ZKDW DUH QRZ VWDWHRZQHG IRUHVWV ZHUH FRQWUROOHG E\ HWKQLFDOO\ KRPRJHQHRXV JURXSV HLWKHU DJUDULDQ FRPPXQLWLHV RU KXQWHUJDWKHUHU VRFLHWLHV *DGJLO f %\ DJUDULDQ JURXSV KDG DOUHDG\ GHIRUHVWHG WKH FRDVWDO SODLQV DQG PXFK RI WKH LQWHULRU SODWHDX UHJLRQ RI VRXWKHUQ ,QGLDQ IRU DJULFXOWXUDO XVH 5LFKDUGV f ,QGLJHQRXV UHJLRQDO UXOHUV VXFK DV WKH WK FHQWXU\nV +DLGHU $OL DOVR UHPRYHG SUHPLXP ZRRGV IURP WKH :HVWHUQ *KDWV IRUHVWV RI .DQDUD 'LVWULFW WR EXLOG VKLSV DORQJ WKH 0DODEDU &RDVW %RPED\ *D]HWWHHU f 6XFK SULQFHV ZHUH RIWHQ DFNQRZOHGJHG WR H[HUFLVH IRUPDO DXWKRULW\ RYHU IRUHVWV $VKWRQ %HQWOH\ HW DO f /RFDO JURXSV QHYHUWKHOHVV HQMR\HG GH IDFWR XVH ULJKWV WR QRQDJULFXOWXUDO ODQGV LQ WKHLU YLFLQLW\ *DGJLO f (YHUJUHHQ IRUHVW WUDFWV RU NDQV ZHUH LPSRUWDQW VRXUFHV RI IRRG IXHO DQG ILEHU IRU ORFDO VXEVLVWHQFH 7KH\ DOVR SURYLGHG WKH RUJDQLF PDWWHU QHFHVVDU\ WR SURGXFH DJULFXOWXUDO FURSV RQ ORFDO ZRRGDVK RU NXPUL VZLGGHQ SORWV DQG OHDI PXOFK WR IHUWLOL]H LQWHQVLYHO\ PDQDJHG VSLFH JDUGHQV 2YHU WLPH VRPH HYHUJUHHQ NDQV LQ 1RUWK .DQDUD KDYH EHHQ GHVLJQDWHG DV VDFUHG JURYHV LQGLFDWLQJ D ORFDO UHYHUHQFH IRU WKHP

PAGE 80

%HFDXVH KXPDQ VXUYLYDO GHSHQGHG ODUJHO\ RQ WKH VXVWDLQHG SURGXFWLYLW\ RI QHLJKERULQJ IRUHVWV ORFDO LQFHQWLYH WR SURWHFW WKHVH DVVHWV ZDV VWURQJ ,Q WKH +LPDOD\DQ IRRWKLOOV UHJLRQ *XKD f GHVFULEHV DQ LQWLPDWH DQG UHYHUHQWLDO DWWLWXGH RI ORFDO SHRSOH WRZDUGV WKH KLOO IRUHVWV WKDW KDYH KLVWRULFDOO\ SURYLGHG WKHLU OLIH VXSSRUW DQG SURWHFWLRQ IURP VORSH HURVLRQ /LNHZLVH LQ SHQLQVXODU ,QGLD FODQ DQG FRPPXQLW\EDVHG LQVWLWXWLRQV DURVH WR PDQDJH ORFDO IRUHVWV IRU SRVWHULW\ DQG WR FRQWURO QRQORFDO DFFHVV WR ORFDO IRUHVWV *DGJLO DQG *XKD f 7KH RSHUDWLRQ DQG SRZHU RI ORFDO LQVWLWXWLRQV EHFDPH OHJLWLPL]HG DV D FRQVHTXHQFH RI WKHLU DELOLW\ WR LPSRVH SHQDOWLHV IRU XQVDQFWLRQHG XVH RI ORFDO IRUHVW UHVRXUFHV 7KLV ZDV RIWHQ SRVVLEOH EHFDXVH IRUHVWHG UHJLRQV ZHUH LVRODWHG IURP SROLWLFDO DQG HFRQRPLF FHQWHUV RI SRZHU RQ WKH ,QGLDQ SODLQV OHDYLQJ ORFDO IRUHVW FRPPXQLWLHV ERWK SROLWLFDOO\ DQG HFRORJLFDOO\ LQGHSHQGHQW 5LFKDUGV DQG 0F$OSLQ f /RFDO FRPPXQLWLHV GLG SURWHFW DQG PDLQWDLQ IRUHVW UHVRXUFHV DV ZLWQHVVHG E\ HDUO\ %ULWLVK DFFRXQWV RI WKH FRQGLWLRQ RI ,QGLDnV SHQLQVXODU IRUHVWV LQFOXGLQJ WKH :HVWHUQ *KDWV UHJLRQ &OHJKRUQ 'XII f (YHQ YDVW QDWXUDO VWDQGV RI WHDN DUH UHSRUWHG WR KDYH EHHQ LQ H[FHOOHQW FRQGLWLRQ LQ WKH +DOL\DO DUHD RI .DQDUD 'LVWULFW %RPED\ *D]HWWHHU f ZKHQ WKH ,QGLDQ )RUHVW $FW RI EHFDPH ODZ 7KLV OHJLVODWLRQ IRUPDOO\ LQDXJXUDWHG D SHULRG RI FRQIOLFW RYHU ,QGLDQ IRUHVW UHVRXUFHV WKDW FRQWLQXHV WR WKH SUHVHQW 7KH SHULRG LV FKDUDFWHUL]HG E\ LQWHQVLILHG H[SORLWDWLRQ RI IRUHVWV WR PHHW VWDWH JRDOV DQG

PAGE 81

LQWHUHVWV DQG WKH SURJUHVVLYH H[FOXVLRQ RI ORFDO SHRSOH IURP WKHLU IRUHVW OLIHVXSSRUW V\VWHP %ULWLVK &RORQLDO $GPLQLVWUDWLRQ RI ,QGLDQ )RUHVW 5HVRXUFHV 7KH %ULWLVK FRORQLDO DGPLQLVWUDWLRQ LQ ,QGLD GLVSOD\HG D PDUNHG LQGLIIHUHQFH WR ,QGLDQ IRUHVW UHVRXUFHV GXULQJ WKH WK FHQWXU\ 1DVFHQW (XURSHDQ GHPDQG IRU H[RWLF VSLFHV JXPV RLOV DQG WURSLFDO WLPEHU SURPSWHG VRPH FRPPHUFLDO IHOOLQJ RI ,QGLDQ IRUHVWV WKRXJK RQ D OLPLWHG VFDOH %RPED\ *D]HWWHHU f (DUO\ ZULWWHQ UHFRUGV FRQFHUQLQJ ,QGLDQ IRUHVWV ILVKLQJ DQG JUD]LQJ UHVRXUFHV DUH LQVLJQLILFDQW ZKHQ FRPSDUHG WR FRORQLDO SUHRFFXSDWLRQ ZLWK DJUDULDQ UHVRXUFHV DQG SURSHUW\ UHODWLRQV FRQFHUQLQJ RZQHUVKLS DQG FXOWLYDWLRQ RI DUDEOH ODQG *URYH 5LFKDUGV DQG 7XFNHU f 6XEVLGLHV DQG LQGXFHPHQWV HQFRXUDJHG FXOWLYDWRUV WR FOHDU ODQGV DORQJ ,QGLDnV IRUHVW IURQWLHU )RUHVWV ZHUH YLHZHG PRUH DV LPSHGLPHQWV WR WKH H[SDQVLRQ RI FXOWLYDWLRQ DQG LWV DVVRFLDWHG UHYHQXH SRWHQWLDO $ORQJ WKH 0DODEDU &RDVW LQ VRXWKZHVWHUQ ,QGLD QR IRUHVWV ZHUH WXUQHG LQWR SURWHFWHG UHVHUYHV XQWLO *XKD DQG *DGJLO f ,Q WKH ILUVW &RQVHUYDWRU RI )RUHVWV ZDV DSSRLQWHG LQ ,QGLD WR VDQFWLRQ WKH (DVW ,QGLD &RPSDQ\nV WHDN 7HFWRQD JUDQGLVf H[WUDFWLRQ PRQRSRO\ )$2 )RUHVWU\ 3DSHU f ([SORLWDWLRQ RI DEXQGDQW QDWXUDO WHDN VWDQGV EHJDQ LQ 0DODEDU DQG 7UDYDQFRUH WR VXSSO\ WLPEHU IRU FRQVWUXFWLRQ RI %ULWLVK QDY\ VKLSV VLQFH LPSHULDO IRUHVWV LQ 1RUWK $PHULFD KDG EHHQ VXUUHQGHUHG DV D UHVXOW RI WKH $PHULFDQ 5HYROXWLRQ 0RUH IRUHVWV ZHUH IHOOHG WR SODQW FRIIHH WHD FDUGDPRP DQG RWKHU H[SRUW FURSV DIWHU WKH

PAGE 82

(DVW ,QGLD &RPSDQ\ WUDQVIHUUHG ,QGLDnV DGPLQLVWUDWLRQ WR WKH %ULWLVK &URZQ LQ (VWDEOLVKPHQW RI WKH ILUVW VFLHQWLILFDOO\PDQDJHG JRYHUQPHQW SODQWDWLRQV EHJDQ IURP $JDUZDOD f &RQVWUXFWLRQ RI ,QGLDnV ILUVW UDLOZD\V LQ WKH ODWH WK FHQWXU\ LQLWLDWHG VLJQLILFDQW ODUJHVFDOH H[SORLWDWLRQ RI 6RXWK $VLDQ IRUHVWV )URP WR UDLOZD\ QHWZRUNV H[SDQGHG VHYHQIROG IURP WR NLORPHWHUV *XKD DQG *DGJLO f 7KH ODUJHU QHWZRUN UHTXLUHG QXPHURXV UDLOZD\ WLHV WKDW VRRQ EHFDPH D ORFDOO\ VFDUFH FRPPRGLW\ ,Q DFFRUGLQJ WR WKH ZLVKHV RI WKH *RYHUQRUJHQHUDO /RUG 'DOKRXVLH ,QGLDnV ILUVW IRUHVW GHSDUWPHQW ZDV HVWDEOLVKHG WR PHHW DQ DQQXDO GHPDQG RI WLHV IRU WKH UDLOZD\ FRPSDQLHV ([SHULHQFHG *HUPDQ IRUHVWHUV RI ZKRP ,QVSHFWRU*HQHUDO RI )RUHVWV 'LHWULFK %UDQGLV 5LFKDUGV DQG 0F$OSLQ f ZDV WKH PRVW SURPLQHQW ZHUH KLUHG E\ WKH %ULWLVK WR SODFH JRYHUQPHQW IRUHVWV XQGHU D UDWLRQDO IRUP RI (XURSHDQ VLOYLFXOWXUH 7KH ,QGLDQ )RUHVWU\ $FW RI VDQFWLRQHG WKH HVWDEOLVKPHQW RI JRYHUQPHQW IRUHVW UHVHUYHV DQG H[WHQGHG WKH VWDWH PRQRSRO\ RI WHDN WR RWKHU FRPPHUFLDOO\ LPSRUWDQW VSHFLHV LQFOXGLQJ URVHZRRG 'DOEHUJLD ODWLIROLDf VDQGDOZRRG 6DQWDOXP DOEXPf DQG HERQ\ 'ORVS\URV HEHQXPf )$2 f 7KLV OHJLVODWLRQ DOVR FODLPHG JRYHUQPHQW DXWKRULW\ WR VHW IRUHVW XVH UXOHV DQG WR LPSRVH SHQDOWLHV IRU XVH LQIUDFWLRQV :KLOH ORFDO DFFHVV WR IRUHVWV IRU JUD]LQJ IXHOZRRG FROOHFWLRQ DQG WLPEHU IHOOLQJ ZDV VWLOO SHUPLWWHG LQ SUDFWLFH VXFK XVH FRXOG KHQFHIRUWK EH UHJXODWHG E\

PAGE 83

JRYHUQPHQW GHFUHH 7KLV HVWDEOLVKHG D OHJDO VWUXFWXUH WR VDQFWLRQ VXEVHTXHQW VWDWH GHPDUFDWLRQ DQG UHVHUYDWLRQ RI IRUHVWV 7KH ,QGLDQ )RUHVW $FW RI FRQVROLGDWHG DEVROXWH JRYHUQPHQW DXWKRULW\ RYHU XWLOL]DWLRQ DQG PDQDJHPHQW RI QHZO\ GHVLJQDWHG UHVHUYHG IRUHVWV *URYH f %\ VTXDUH PLOHV bf RI IRUHVWV KDG EHHQ UHVHUYHG LQ WKH 6LUVL )RUHVW 6XE'LYLVLRQ RXW RI D WRWDO RI VTXDUH PLOHV ,Q .DQDUD 'LVWULFW DV D ZKROH bf RI VTXDUH PLOHV RI IRUHVWV KDG EHHQ UHVHUYHG %RPED\ *D]HWWHHU f 7KH ODZV DOVR HVWDEOLVKHG VRFDOOHG SURWHFWHG IRUHVWV DUHDV WKDW ZRXOG EHFRPH UHVHUYHG IRUHVWV DIWHU GHPDUFDWLRQ DQG SUHSDUDWLRQ RI VLOYLFXOWXUDO SUHVFULSWLRQV 8QGHUVWDQGLQJ WKDW IXWXUH SURGXFWLRQ RI WLPEHU FRXOG QRW EH JXDUDQWHHG LI FXVWRPDU\ ORFDO IRUHVW XVH ULJKWV FRQWLQXHG WKH JRYHUQPHQW DOVR SODFHG UHVWULFWLRQV RQ ORFDO XVH RI SURWHFWHG IRUHVWV XQGHU WKH DFW 1LQHWHHQ VSHFLHV RI WUHHV DQG IRXU IRUHVW SURGXFWV EHFDPH UHVHUYHG VROHO\ WR WKH JRYHUQPHQW 7KHVH VSHFLHV ZHUH 7HFWRQD JUDQ£LV 6DQWDOXP DOEXP 'DOEHUJLD ODW IROLD 'LRVSRURV HEHQXP 3WHURFDUSXV PDUVXSLXP &DORSK\OOXP HODWXP $UWRFDUSXV LQWHJULIROLD $ KLUVXWD 9LWH[ DOWLVVLPD 2XJHQLD GDOEHUJLRLGHV /DJHUVWURHPLD PLFURFDUSD *PHOLQD DUEUHD 7HUPLQDOLD WRPHQWRVD 7 FKHEXOD ;\OLD GRODEULIRUPLV 7KHVSHVLD SRSXOQHD $FDFLD FDWHFKX $ FRQFLQQD DQG %DVVLD ODWLIROLD 7KH IRXU UHVHUYHG SURGXFWV ZHUH IUXLWV RI 7HUPLQDOLD FKHEXOD KLUGDf IUXLWV RI $FDFLD FRQFLQQD VKLJLNDLf IORZHUV RI %DVVLD ODWLIROLD LSSH KXYDf DQG ODWH[ IURP $FDFLD FDWHFKX NDWKf

PAGE 84

7KHVH SURGXFWV VXFK DV KLUGD IUXLWV FRXOG RQO\ EH JDWKHUHG E\ ORFDOV XQGHU IRUHVW GHSDUWPHQW FRQWUDFW 7KH FRORQLDO JRYHUQPHQW DOVR UHGHILQHG SUHYLRXV FXVWRPDU\ IRUHVW XVH ULJKWV JUDQWHG WR ORFDO SHRSOH DV XVH SULYLOHJHV LQ SURWHFWHG IRUHVWV 7KH FKLHI SULYLOHJHV VWLOO SHUPLWWHG ZHUH f FOHDULQJ SDWFKHV RI IRUHVW IRU ZRRGDVK RU VZLGGHQ WLOODJH f ORSSLQJ OHDYHV IRU JUHHQ PDQXULQJ RI VSLFH DQG EHWHOQXW SDOP JDUGHQV JDUGHQ RZQHUV ZHUH UHVWULFWHG WR ORSSLQJ RQO\ LQ GHVLJQDWHG VRSSLQD EHWWDEHWWD IRUHVWV WUDFWV WKDW ZHUH QR PRUH WKDQ HLJKW WLPHV WKH DUHD RI WKHLU JDUGHQ KROGLQJV f JURZLQJ SHSSHU LQ VRPH HYHUJUHHQ NDQ IRUHVWV f IUHH JUD]LQJ LQ GHVLJQDWHG IRUHVW WUDFWV DQG f IUHH RU FKHDS ZRRG IXHO DQG EDPERR FROOHFWLRQ %RPED\ *D]HWWHHU f 7KH VDOH RU EDUWHU RI SURWHFWHG IRUHVW SURGXFWV ZDV VWULFWO\ SURKLELWHG 7KH SHQDOW\ IRU GRLQJ VR ZDV RIWHQ WKH ORVV RI DOO FROOHFWLRQ SULYLOHJHV 9LOODJH IRUHVWV ZHUH GHVLJQDWHG FORVH WR YLOODJHV WR EH DGPLQLVWHUHG E\ YLOODJH FRXQFLOV 9LOODJH )RUHVW 3DQFKD\DWVf IRU PXOWLSOH XVH E\ ORFDO SHRSOH /RFDO XVH RI UHVHUYHG VSHFLHV DQG SURGXFWV ZDV DOVR LOOHJDO LQ WKHVH YLOODJH IRUHVWV 7KH ,QGLDQ )RUHVW $FW RI IRUPDOO\ LQLWLDWHG WKH SURFHVV RI VXSSODQWLQJ YLOODJHEDVHG FXVWRPDU\ IRUHVW XVH DJUHHPHQWV E\ FHQWUDOL]HG JRYHUQPHQW 3K\VLFDOO\ OLPLWLQJ ORFDO DFFHVV WR IRUHVWV DQG SURJUHVVLYHO\ FRQYHUWLQJ ORFDO IRUHVW UHVRXUFHV LQWR FRPPHUFLDO FRPPRGLWLHV IRU GLVWDQW PDUNHWV ZHUH SLYRWDO HOHPHQWV LQ WKLV WUDQVIHU RI DXWKRULW\ *DGJLO DQG *XKD f %HIRUH IRUHVWV KDG EHHQ H[SORLWHG LQ D QRQLQWHQVLYH PDQQHU 7UDGH DQG FRPPHUFLDOL]DWLRQ RI IRUHVWGHULYHG VXUSOXVHV KDG EHHQ

PAGE 85

OLPLWHG WR FRPPRGLWLHV OLNH ZLOG SHSSHU DQG FDUGDPRP PHGLFLQDO SODQWV VDQGDOZRRG LYRU\ DQG D IHZ WLPEHU VSHFLHV $JUDULDQ FRPPXQLWLHV RQ ,QGLDnV SODLQV KDG OLWWOH LQWHUHVW LQ .DQDUDnV IRUHVWV IRU RWKHU WKDQ D VPDOO QXPEHU RI VXFK SURGXFWV DQG H[WUDFWLRQ RI WKHVH GLG QRW KDYH D VHULRXV LPSDFW RQ WKH HFRORJLFDO IXQFWLRQ RI .DQDUDnV IRUHVWV $IWHU IRUHVWV ZHUH FRQVLGHUHG WR EH VRXUFHV RI UHYHQXH IURP WLPEHU SURGXFWLRQ 6LOYLFXOWXUDO VWUDWHJLHV WR PD[LPL]H WLPEHU UHYHQXHV OHG WR FKDQJHV LQ IRUHVW VSHFLHV FRPSRVLWLRQ WKDW IDYRUHG FRQLIHUV RYHU PL[HG RDN KDUGZRRGFRQLIHU IRUHVWV LQ QRUWKHUQ ,QGLD DQG SXUH VWDQGV RI WHDN RYHU PL[HG HYHUJUHHQ KDUGZRRG IRUHVWV LQ SHQLQVXODU ,QGLD *XKD f 7KH ODZV DOVR LQLWLDWHG WKH HFRORJLFDO VHSDUDWLRQ RI IRUHVWV IURP DJULFXOWXUDO DFWLYLWLHV *XKD DQG *DGJLO f 2QFH UHVHUYHG IRUHVWV FRXOG QR ORQJHU OHJDOO\ SURYLGH LQSXWV WR PDLQWDLQ VRLO IHUWLOLW\ LQ QHLJKERULQJ ILHOGV DQG JDUGHQV 7KH WKUHDW RI IDOOLQJ DJULFXOWXUDO \LHOGV SURPSWHG WKH )RUHVW 3ROLF\ 5HVROXWLRQ RI +DHXEHU f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f %HWWD )RUHVW

PAGE 86

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f LQFOXGLQJ ,QGLD WR UHGUHVV HQYLURQPHQWDO GHJUDGDWLRQ 7KLV JURXS SRSXODUL]HG D WKHRU\ OLQNLQJ GHIRUHVWDWLRQ WR XQGHVLUDEOH UDLQIDOO DQG FOLPDWLF FKDQJHV *URYH f $ PLQRULW\ RI %ULWLVK RIILFLDOV ZDUQHG WKDW WKH XQFKHFNHG H[SDQVLRQ RI DJULFXOWXUDO ODQGV ZRXOG WKURXJK D SURFHVV FDOOHG GHVLFFDWLRQ FDXVH WKH ORVV RI YDOXDEOH WLPEHU UHVRXUFHV PDVV GHIRUHVWDWLRQ DQG HQYLURQPHQWDO FDWDFO\VPV WKURXJKRXW ,QGLD 5LFKDUGV f ,QIRUPHG VFLHQWLILF DXWKRULWLHV RI FRORQLDO LVODQG WHUULWRULHV UHSRUWHG WKH GHVWUXFWLRQ RI VRLO DQG ZDWHU UHVRXUFHV ZKHQ IRUHVWHG XSODQGV ZHUH FRQYHUWHG IURP IRUHVWV WR DJULFXOWXUDO ODQGV $QRWKHU SHUFHSWLRQ WKDW VSXUUHG VRPH %ULWLVK WR HVSRXVH D IRUHVW UHVHUYDWLRQ DJHQGD KDG DQ DHVWKHWLF RU (GHQLF VODQW *URYH f $ SDUDGLVDO LPDJH RI SULVWLQH WURSLFDO ODQGV ZDV VWURQJO\ LPSULQWHG RQ (XURSHDQ PLQGV :LWK WLPH DQG WUDYHO WKHVH YLHZV ZHUH WUDQVIRUPHG LQWR IDVFLQDWLRQ IRU FROOHFWLRQ DQG FODVVLILFDWLRQ RI WURSLFDO IORUD RU JDPH KXQWLQJ RI WURSLFDO

PAGE 87

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f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f ,Q DQ DGYDQFHG VWDJH RI UHVLVWDQFH DOOLDQFHV EHWZHHQ WUDGLWLRQDO HOLWHV DQG SHDVDQWV HPHUJHG ZKHQ %ULWLVK GHQLDO RI

PAGE 88

FXVWRPDU\ IRUHVW XVH ULJKWV EHFDPH LQWROHUDEOH DFURVV ,QGLDQ FODVVHV DQG FDVWHV*URYH f )URP WKH FURZQnV SHUVSHFWLYH FRQWURO RI IRUHVWV WKHQ EHFDPH WDQWDPRXQW WR FRQWURO RI SROLWLFDO GLVVHQW VLQFH RUJDQL]HG IRUPV RI UHVLVWDQFH DSSHDUHG WR RSHQO\ IODXQW %ULWLVK DXWKRULW\ )RUHVW FRQVHUYDQF\ ZDV LQWHQVLILHG DQG IRUFLEOH VXSSUHVVLRQ ZDV VRPHWLPHV XVHG WR TXHOO WKHVH RUJDQL]HG LQVXUUHFWLRQV 7KH WKUHDW RI ORFDOO\FDXVHG GHVWUXFWLRQ RI IRUHVWV ZDV RIWHQ XVHG DV D SUHWH[W IRU HQKDQFHG SROLWLFDO VXSSUHVVLRQ RI ,QGLDQV :KHWKHU LQWHQGHG WR VXVWDLQ WKH FRORQ\nV UHVRXUFH HQGRZPHQW WR SURYLGH VKRUWWHUP SURILW DQG SOHDVXUH RU WR PDLQWDLQ SROLWLFDO SRZHU FRORQLDO UHVHUYDWLRQ RI IRUHVWV OHG WR D VWDWH PRQRSRO\ RI ,QGLDnV IRUHVWV 0DQDJHPHQW RI ,QGLDQ IRUHVWV LQ WKH HDUO\ WK &HQWXU\ ([WHQVLRQ RI FRORQLDO DXWKRULW\ RYHU IRUHVWV ZDV VDQFWLRQHG E\ WKH ,QGLDQ )RUHVW $FW RI 7KLV DFW UHLWHUDWHG WKH IRUHVW PDQDJHPHQW IUDPHZRUN RI ZKLOH DOVR DOORZLQJ WKH JRYHUQPHQW WR DVVXPH FRQWURO RI PDQ\ IRUHVWV WKDW LW GLG QRW DOUHDG\ RZQ +DHXEHU f ,W DOVR HQXPHUDWHG VLWXDWLRQV LQ ZKLFK IRUHVW GHSDUWPHQW RIILFLDOV FRXOG DUUHVW ZLWKRXW D ZDUUDQW WKRVH DFFXVHG RI IRUHVW UHVRXUFH WKHIW $GPLQLVWUDWLRQ RI IRUHVWV ZDV SODFHG XQGHU IHGHUDWHG SURYLQFLDO DXVSLFHV LQ WKH *RYHUQPHQW RI ,QGLD $FW RI D GHFDGH SULRU WR ,QGLDQ LQGHSHQGHQFH +HQFHIRUWK IRUHVW DGPLQLVWUDWLRQ ZRXOG EH GLUHFWHG E\ VWDWH JRYHUQPHQWV ZLWK FHQWUDO JRYHUQPHQW LQYROYHPHQW OLPLWHG WR IRUHVWU\ SROLF\ HGXFDWLRQ DQG UHVHDUFK 7KLV KLVWRULFDO GHOHJDWLRQ RI DXWKRULW\

PAGE 89

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n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nV UXUDO SRRU RQ IRUHVW UHVRXUFHV IRU WKHLU VXUYLYDO 7KH VWDWHPHQW JDYH WKH QHHGV RI DJULFXOWXUDO SURGXFWLRQ SULRULW\ RYHU SURGXFWLRQ IRUHVWU\ DQG ORFDO VXEVLVWHQFH SULRULW\ RYHU WKH JHQHUDWLRQ RI VWDWH UHYHQXH +DHXEHU f +RZHYHU WKLV FRPSURPLVH KDG OLWWOH LPSDFW RQ WKH GD\WRGD\ PDQDJHPHQW DFWLYLWLHV RI VWDWH IRUHVWHUV (QIRUFHPHQW RI IRUHVW SURWHFWLRQ ODZV ZHQW XQFKDQJHG

PAGE 90

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nV SULRULW\ 3UHYLRXV ULJKWV RI LQGLJHQRXV WULEDO IRUHVWGZHOOHUV WR FROOHFW IXHOZRRG WLPEHU DQG IRGGHU LQ UHVHUYHG IRUHVWV ZHUH SURJUHVVLYHO\ UHYRNHG +DHXEHU f ZKLOH WKH DELOLW\ RI VWDWH JRYHUQPHQWV WR UHVHUYH IRUHVW ODQGV JUHZ DSDFH ,QGHHG H[SDQVLRQ RI UHVHUYHG VWDWH IRUHVWV DFFHOHUDWHG DIWHU LQGHSHQGHQFH ,Q WKH PRGHUQ 6LUVL )RUHVW 'LYLVLRQ FRQWDLQHG DSSUR[LPDWHO\ KD RI UHVHUYHG IRUHVW SHUFHQW RI DOO IRUHVWV )LIW\ WKRXVDQG KD RI PLQRU IRUHVW DQG KD RI EHWWD IRUHVW FRPSULVHG WKH UHPDLQLQJ GLYLVLRQDO IRUHVWV LQWHUYLHZ ZLWK GLYLVLRQDO IRUHVWU\ RIILFHUf :LWK WKH LQWHJUDWLRQ RI SULQFHO\ VWDWHV LQWR WKH ,QGLDQ 8QLRQ LQ WKH HDUO\ V UR\DO KXQWLQJ SUHVHUYHV RI IRUHVWV ZRRGODQGV DQG JUDVVODQGV DOVR FDPH XQGHU WKH SXUYLHZ RI HPSRZHUHG VWDWH GHSDUWPHQWV RI IRUHVWU\ /RFDO FRPPXQLWLHV WKDW KDG SUHYLRXVO\ UHOLHG RQ VXFK ODQGV WR SURYLGH D YDULHW\ RI KRXVHKROG IDUPLQJ IRGGHU DQG GLHWDU\ UHTXLUHPHQWV IRXQG WKDW WKHLU XVH RI VWDWHPDQDJHG IRUHVWV KDG EHFRPH HQWLUHO\ UHJXODWHG

PAGE 91

$Q\ RI WKHLU UHPDLQLQJ XVH SULYLOHJHV ZHUH QRZ IRUPDOO\ GHVFULEHG DV FRQFHVVLRQV 7KH ,QGLDQ 1DWLRQDO &RPPLVVLRQ RQ $JULFXOWXUH 1&$f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f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

PAGE 92

GHJUDGHG PLQRU IRUHVWV ZDVWHODQGV YLOODJH FRPPRQV DQG URDG DQG UDLO ULJKWRIZD\V 9LNVDW +DHXEHU f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f )RUHVW PDQDJHPHQW OHJLVODWLRQ LQLWLDWLYHV LQ WKH V KHLJKWHQHG GHEDWH RYHU WKH IXWXUH RI ,QGLDQ IRUHVWV -XULVGLFWLRQDO FRQIOLFW EHWZHHQ VWDWH DQG IHGHUDO DJHQFLHV RYHU FRQWURO RI IRUHVWV ZDV WRXFKHG RII E\ WKH )RUHVW &RQVHUYDWLRQ $FW RI 7KLV DPRXQWHG WR D OHJLVODWLYH ODVW VWDQG DW WKH IHGHUDO OHYHO WR SURKLELW FOHDUDQFH RU FRQYHUVLRQ RI IRUHVWV WR RWKHU ODQG XVHV ZLWKRXW SDUOLDPHQWDU\ DSSURYDO *RYHUQPHQW RI ,QGLD 5HSRUW RI WKH 1DWLRQDO &RPPLVVLRQ RQ $JULFXOWXUH 3DUW ,;f 6WDWH JRYHUQPHQWV EDONHG DW WKLV LQWHUIHUHQFH IURP WKH FHQWUDO JRYHUQPHQW +RZHYHU VWDWH IRUHVWU\ GHSDUWPHQWV ZHUH TXLFN WR VHL]H XSRQ WKLV OHJLVODWLRQ DV DQ RSSRUWXQLW\ WR VWUHQJWKHQ VWDWH FRQWURO RI IRUHVW ODQGV SDUWLFXODUO\ LQ WKH DUHD RI ODZ HQIRUFHPHQW 7KH $FW VWUHQJWKHQHG WKH VHYHULW\ RI ILQHV DQG SXQLVKPHQWV IRU LOOHJDO DFWLYLWLHV LQ VWDWH IRUHVWV ,W JUDQWHG IRUHVW RIILFHUV WKH ULJKW WR DUUHVW RIIHQGHUV ZLWKRXW D ZDUUDQW IRU WDPSHULQJ ZLWK ERXQGDULHV VHWWLQJ ILUHV JDWKHULQJ UHVHUYHG

PAGE 93

SURGXFWV DQG FXOWLYDWLQJ IRUHVW ODQGV +DHXEHU f /RFDO IRUHVW XVH FRQFHVVLRQV LQ DOO IRUHVW W\SHV ZHUH IXUWKHU UHVWULFWHG 7KH DFW DOVR FDOOHG IRU WKH LQLWLDWLRQ RI IRUHVW UHKDELOLWDWLRQ LQ GHJUDGHG IRUHVWV DQG RWKHU ZDVWHODQGV WKURXJKRXW WKH FRXQWU\ 6RRQ WKHUHDIWHU WKH SURSRVHG ,QGLDQ )RUHVW $FW RI UHFRPPHQGHG DXWKRUL]LQJ VWDWH JRYHUQPHQWV WR UHFODVVLI\ DQ\ ODQGV WKH\ ZLVKHG WR DV IRUHVWV ZKHWKHU IRUHVWHG RU QRWf LQ RUGHU WR HQKDQFH SXEOLF FRQWURO RYHU ERWK WUHH DQG QRQWUHH GHULYHG IRUHVW UHVRXUFHV .XONDUQL f 6LQFH WKH GLVSXWH RYHU GLVSRVLWLRQ RI ,QGLDnV IRUHVWV KDV FRQWLQXHG EHWZHHQ VWDWH DQG IHGHUDO DXWKRULWLHV RQ WKH RQH KDQG DQG VWDWH IRUHVW GHSDUWPHQWV DQG IRUHVW GZHOOHUV RQ WKH RWKHU *RYHUQPHQW RIILFLDOV EODPH YLOODJHUV IRU WKHLU LQGLVFULPLQDWH XVH DQG GHVWUXFWLRQ RI IRUHVWV ZKLOH WKH ODWWHU EODPH JRYHUQPHQWVSRQVRUHG LQGXVWULDO IRUHVWU\ RSHUDWLRQV IRU FRQYHUVLRQ RI ,QGLDnV UHPDLQLQJ QDWXUDO IRUHVWV 5HFHQW ZDUQLQJV DERXW WKH HQYLURQPHQWDO FRQVHTXHQFHV RI ,QGLDQ GHIRUHVWDWLRQ 6KLYD f DQG LWV SRVVLEOH PLWLJDWLRQ GR QRW VHHP WR KDYH PDGH D VHULRXV LPSDFW RQ WKRVH ZLHOGLQJ SROLWLFDO LQIOXHQFH 3XEOLF PHGLD EDWWOHV FRQWLQXH RYHU FRQWURO RI ,QGLDnV UHVLGXDO IRUHVW ZHDOWK UDWKHU WKDQ RYHU LWV PDLQWHQDQFH DQG UHSURGXFWLRQ &DSLWDOL]DWLRQ RI ,QGLDQ )RUHVW 5HVRXUFHV $Q $QDO\WLFDO )UDPHZRUN 7KH KLVWRULFDO FDSLWDOL]DWLRQ RI ,QGLDQ IRUHVW UHVRXUFHV GHVFULEHG DERYH LV VXPPDUL]HG E\ 1DGNDUQLnV f DQDO\WLFDO IUDPHZRUN RI IRUHVW FRQYHUVLRQ DQG FDSLWDOL]DWLRQ 1DGNDUQL

PAGE 94

f RXWOLQHV WKUHH KLVWRULFDO VWDJHV RI IRUHVW XVH DQG FRQYHUVLRQ WKH SUHFRPPHUFLDOFXPSUHFDSLWDOLVW VWDJH WKH LQLWLDO FRPPHUFLDO VWDJH DQG WKH KLJKO\ FRPPHUFLDOL]HG VWDJH ,Q WKH ILUVW VWDJH QDWXUHnV IRUHVW ERXQW\ LV DQ DEXQGDQW DQG IUHH JLIW IRU RQHn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f
PAGE 95

QHFHVVLWDWHV WKH H[FOXVLRQ RI ORFDO SHRSOH IURP IRUHVWV 2QFH WKLV RFFXUV WUDGLWLRQDO FRPPRQ SURSHUW\ VWHZDUGVKLS DUUDQJHPHQWV EHJLQ WR EUHDN GRZQ %URPOH\ f /RFDO SULQFHV VPDOO PHUFKDQWV DQG VDYNDUV PHUFKDQW PRQH\OHQGHUVf HPSOR\ IRUPHUO\ DXWRQRPRXV PHPEHUV RI ORFDO FRPPXQLWLHV WR H[WUDFW KLJK YDOXH IRUHVW SURGXFWV LQ H[FKDQJH IRU ZDJHV 5LFKDUGV DQG 0F$OSLQ f $JDUZDO DQG 1DUDLQ f GHVFULEH WKLV DV WKH SURJUHVVLYH DOLHQDWLRQ RI ORFDO FRPPXQLWLHV IURP WKHLU IRUHVWV %URPOH\ DQG &HUQHD f GHVFULEH WKLV WUDQVIRUPDWLRQ DV IROORZV &RPPRQ SURSHUW\ LV LQ HVVHQFH nSULYDWHn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f DQG UHJHQHUDWLRQ RI PDQDJHG SODQWDWLRQV $Q RSHQ DFFHVV IUHHIRUDOO RI LQWHQVLILHG GHJUDGDWLRQ RFFXUV LQ WKH IHZ QDWXUDO IRUHVWV WR ZKLFK ORFDO DFFHVV UHPDLQV OHVV UHVWULFWHG HJ YLOODJH RU PLQRU IRUHVWVf 7KH LPSRYHULVKPHQW RI ORFDO FRPPXQLWLHV SURFHHGV DV

PAGE 96

WKHVH VFDUFH IRUHVW UHVRXUFHV DUH GHVWUR\HG E\ WKRVH ZKR PRVW GHSHQG XSRQ WKHP IRU VXEVLVWHQFH 5LFKDUGV .DXU f $V VWDWH FRQWURO RI IRUHVWV H[SDQGV IRUHVWGZHOOLQJ FRPPXQLWLHV ILQG D EXUHDXFUDF\ RI VWDWH IRUHVW RIILFLDOV SRVLWLRQHG EHWZHHQ WKHPVHOYHV DQG WKH QRZ UHVWULFWHG IRUHVWV 7R REWDLQ DFFHVV WR VWDWH ODQGV SHDVDQWV PXVW ILQG IDYRU ZLWK GHSDUWPHQW RIILFLDOV RU ZLWK QHLJKERUV SRZHUIXO HQRXJK WR LQIOXHQFH IRUHVW GHSDUWPHQW VWDII %ODLNLH DQG %URRNILHOG f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f $ PRGHO IRU HQOLJKWHQHG MRLQW IRUHVW SODQQLQJ DQG PDQDJHPHQW EHWZHHQ VWDWH IRUHVWHUV DQG ORFDO SHRSOH ZLOO EH SUHVHQWHG LQ WKH ILQDO FKDSWHU RI WKLV VWXG\ )RUHVW 3ROLF\ DQG 0DQDJHPHQW LQ 1RUWKZHVWHUQ .DUQDWDND 6WDWH ,Q WKH *RYHUQPHQW RI ,QGLD $FW SURPXOJDWLRQ RI FRQVWLWXWLRQDO ODZV UHJDUGLQJ QDWXUDO UHVRXUFHV UHPDLQHG D IHGHUDO SUHURJDWLYH ZKLOH SUDFWLFDO PDQDJHPHQW RI IRUHVWV IHOO WR VWDWH GHSDUWPHQWV RI IRUHVWU\ 7KH .DUQDWDND )RUHVW 'HSDUWPHQWnV .)'f GHVFHQGLQJ GLUHFWO\ IURP FRORQLDO SUHFHGHQW

PAGE 97

ZDV LQDXJXUDWHG ZLWK WKH HVWDEOLVKPHQW RI .DUQDWDND 'XH WR WKH UHODWLYH ZHDOWK RI IRUHVW UHVRXUFHV LQ .DUQDWDND VWDWH IRUHVWHUV DVVXPHG FRQVHUYDQF\ RI WKLV QDWXUDO OHJDF\ LQ DV VHULRXV D PDQQHU DV GLG WKHLU FRORQLDO SUHGHFHVVRUV .DUQDWDNDnV IRUHVWV DUH DPRQJ ,QGLDnV PRVW GLYHUVH LQ ELRORJLFDO WHUPV EXW IRU OHJDO SXUSRVHV WKH\ FRPSULVH WKUHH SULPDU\ W\SHV UHVHUYHG IRUHVWV SURWHFWHG IRUHVWV DQG PLQRU RU YLOODJH IRUHVWV ,Q UHVHUYHG IRUHVWV RQO\ OLPLWHG VLQJOH WUHH IHOOLQJ RFFXUV DQG WKLV LV GRQH H[FOXVLYHO\ E\ VWDWH IRUHVWHUV )URP XQWLO DQ HYHQ PRUH UHVWULFWLYH SROLF\ RI RQO\ GHDG DQG GRZQ WUHH UHPRYDO ZDV DGRSWHG E\ DQ HQYLURQPHQWDOO\PLQGHG FKLHI FRQVHUYDWRU RI IRUHVWV ,Q FRQWUDVW SURWHFWHG IRUHVWV LQFOXGH ERWK QDWXUDO DQG PDQLSXODWHG VWDQGV XQGHU FRPPHUFLDO VLOYLFXOWXUDO WUHDWPHQW $Q LQFUHDVLQJ QXPEHU RI SURWHFWHG IRUHVWV KDYH EHHQ FRQYHUWHG LQWR SODQWDWLRQV DV WKHLU PDWXUH WUHHV DUH KDUYHVWHG 7KH VWDWHnV PRVW GHJUDGHG VWDQGV KDYH EHHQ FODVVLILHG DV PLQRU RU YLOODJH IRUHVWV 7KHVH KDYH EHHQ GHVLJQDWHG IRU ORFDO KDUYHVW RI QRQWLPEHU SURGXFWV LQ VSHFLILHG TXDQWLWLHV $ IRXUWK FODVV RI IRUHVWV LV IRXQG RQO\ LQ WKH XSSHU *KDWV RI
PAGE 98

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nV IRUHVWHUV IROORZ SUHVFULSWLRQV WR HQKDQFH WKH ELRPDVV SURGXFWLYLW\ RI VHOHFWHG WLPEHU VSHFLHV RIWHQ LQ XQLIRUP SODQWDWLRQV $JDUZDOD f ,Q WKLV PDUNHWRULHQWHG VLOYLFXOWXUH ORFDO SHRSOH UHFHLYH MREV DV IRUHVW GHSDUWPHQW SHUVRQQHO RU GDLO\ ZDJH ODERUHUV RIWHQ WKH RQO\ IRUP RI VHDVRQDO HPSOR\PHQW ORFDOO\ DYDLODEOH )RUHVW PDQDJHUV WDNH VLOYLFXOWXUDO FRQWURO RI IRUHVW HFRV\VWHPV DV TXLFNO\ DV WHFKQRORJ\ DQG ILQDQFHV SHUPLW (FRQRPLF JRDOV GULYH DOO VWDJHV RI VXFK SURGXFWLRQ IRUHVWU\ )URP WKH V WR PLGV VHYHUDO XQUHODWHG HYHQWV EHJDQ WR GLVFRXUDJH .DUQDWDND IRUHVWHUV IURP FRQWLQXHG SODQWLQJ RI VLQJOH VSHFLHV SODQWDWLRQV 7KH LQYDVLYHQHVV RI H[RWLF XQGHUVWRU\ SODQWV SDUWLFXODUO\ (XSDWRULXP VS PDVVLYH LQVHFW GHIROLDWLRQ RI WHDN SODQWDWLRQV DQG PLVPDWFKLQJ RI SODQWDWLRQ VSHFLHV WR LQDSSURSULDWH VLWHV PDGH WKH PDLQWHQDQFH FRVWV RI PDQ\

PAGE 99

PDUJLQDO VWDQGV JUHDWHU WKDQ WKH H[SHFWHG HFRQRPLF UHWXUQV $ UHDVVHVVPHQW RI VLOYLFXOWXUH SUDFWLFHV EHJDQ )RUHVW SROLF\ LQLWLDWLYHV RI WKH V EHJDQ WR VWUHVV UHKDELOLWDWLRQ RI ,QGLDnV GHJUDGHG IRUHVWV DQG ZDVWHODQGV 7KLV QHZ SROLF\ FOLPDWH SUHVHQWHG .DUQDWDND IRUHVWHUV ZLWK DQ RSSRUWXQLW\ WR DVVHUW VLOYLFXOWXUDO FRQWURO RYHU VWDWH IRUHVW ODQGV WKDW KDG EHHQ SUHYLRXVO\ QHJOHFWHG SDUWLFXODUO\ PLQRU IRUHVWV %\ WKH ILUVW RI ZKDW ZRXOG EHFRPH DQQXDO SODQWLQJV RI PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf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f WKRXJK GHJUDGHG PLQRU IRUHVWV VWLOO SURYLGHG ORFDO SHRSOH ZLWK PDQ\ SURGXFWV QHFHVVDU\ IRU WKHLU ZHOIDUH DQG f 063 HVWDEOLVKPHQW HIIHFWLYHO\ H[FOXGHG ORFDO SHRSOH IURP IRUHVWV ZKHUH WKH\ KDG SUHYLRXVO\ HQMR\HG DFFHVV WR FROOHFW QRQWLPEHU SURGXFWV

PAGE 100

3XVKLQJ %DFN WKH )RUHVW )URQWLHU )RUHVW (QFURDFKPHQW LQ 6LUVL 7DOXN $QRWKHU SURFHVV WKDW GLPLQLVKHV SXEOLF DFFHVV WR IRUHVW UHVRXUFHV LQ .DUQDWDND 6WDWH LV IRUHVW HQFURDFKPHQW ,Q 6LUVL 7DOXN IRU H[DPSOH IRUHVW IHOOLQJ DQG H[SDQVLRQ RI YLOODJH ODQG KDV EHHQ RFFXUULQJ FRQWLQXRXVO\ IRU DW OHDVW \HDUV %RPED\ *D]HWWHHU f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

PAGE 101

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nV 5HFRUGV 6LUVL 7DOXNf $OO UHJXODUL]DWLRQ RI HQFURDFKHG IRUHVW ODQGV HQGHG LQ ZKHQ WKH )RUHVW &RQVHUYDWLRQ $FW EHFDPH ODZ 6LQFH HQFURDFKPHQW RQWR VWDWH IRUHVW ODQG KDV UHPDLQHG D FRPPRQ SUDFWLFH LQ 7HUNDQDKDOOL 9LOODJH DV LV WKH FDVH WKURXJKRXW WKH 6LUVL 7DOXN 7D[ UHFRUGV IRU WZR YLOODJHV LQGLFDWH WKDW SHUFHQW RI ODQG RZQHUV KDYH LQ VRPH PDQQHU HQFURDFKHG RQ IRUHVW ODQG $YHUDJH VL]H RI HQFURDFKHG SDUFHOV YDULHV IURP WR KD /DQGOHVV SHRSOH DOVR HQFURDFK RQ IRUHVW ODQG 7KLV LV QRUPDOO\ GRQH LQ RUGHU WR EXLOG KRPHV 7KH VL]H RI WKHVH SDUFHOV DYHUDJHV WR KD 7D[ &ROOHFWRUnV 5HFRUGV 6LUVL 7DOXNf 9LOODJHUV ZKR KDYH QRW HQFURDFKHG RQ IRUHVW ODQG GR QRW OLYH DGMDFHQW WR IRUHVW ODQG 6RPH RI WKHVH SHRSOH KDYH KRZHYHU HQFURDFKHG RQ IRUHVW ODQG HOVHZKHUH 7KH LOOHJDOLW\ RI IRUHVW HQFURDFKPHQW LV D FRQVHTXHQFH RI ,QGLDnV )RUHVW &RQVHUYDWLRQ $FW RI ZKLFK VWLSXODWHV WKDW QR IRUHVW ODQG VKDOO EH XVHG IRU DQ\ RWKHU SXUSRVH WKDQ IRUHVW SURGXFWLRQ H[FHSW E\ FRQVHQW RI WKH IHGHUDO JRYHUQPHQW 6LQFH

PAGE 102

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f VLOYLFXOWXUH LV GHVFULEHG DV WKH PRVW UHFHQW HIIRUW E\ .DUQDWDND IRUHVWU\ RIILFLDOV WR UHGXFH ORFDO DFFHVV WR WKH IHZ IRUHVWV ZKHUH YLOODJHUV PD\ VWLOO FROOHFW QRQWLPEHU SURGXFWV &RQYHUVHO\ 063V PD\ UHSUHVHQW D VLQFHUH VWDWH HIIRUW WR LPSURYH WKH SURGXFWLYLW\ RI GHJUDGHG PLQRU IRUHVWV VLPXOWDQHRXVO\ LPSURYLQJ WKH ZHOIDUH RI ORFDO IRUHVWGHSHQGHQW FRPPXQLWLHV &RPPXQLW\RULHQWHG VWUDWHJLHV KDYH EHHQ

PAGE 103

VXFFHVVIXOO\ XQGHUWDNHQ WR UHIRUHVW GHJUDGHG SXEOLF IRUHVWODQGV LQ :HVW %HQJDO 0DOKRWUD DQG 3RIIHQEHUJHU f DQG WR HVWDEOLVK FRPPXQLW\ EXIIHU ]RQHV DURXQG ZLOGOLIH UHVHUYHV LQ *XMDUDW *URHQIHOGW HW DO f ,Q WKH .DUQDWDND )RUHVW\ 'HSDUWPHQW .)'f DGRSWHG D MRLQW IRUHVW SODQQLQJ DQG PDQDJHPHQW SURJUDP IRU VHYHUDO .DUQDWDND GLVWULFWV 7KHVH LQLWLDWLYHV VXJJHVW WKDW ,QGLDQ VWDWH IRUHVWU\ EXUHDXFUDFLHV DUH EHJLQQLQJ FRRSHUDWLYH PDQDJHPHQW RI SXEOLF IRUHVWODQGV WR HQKDQFH WKH ZHOIDUH RI ERWK ORFDO FRPPXQLWLHV DQG IRUHVWV &DQ WKH UHFHQW .)' LQLWLDWLYH UHKDELOLWDWH IRUHVWV ZKLOH DW WKH VDPH WLPH EHQHILWLQJ IRUHVWGHSHQGHQW FRPPXQLWLHV" 7R DGGUHVV WKLV TXHVWLRQ HPSOR\HG WZR IRUHVW UHVRXUFH XVH VXUYH\V DV LQYHVWLJDWLYH WRROV WR f GRFXPHQW ORFDO NQRZOHGJH DQG XVH RI IRUHVW UHVRXUFHV DQG f GHVFULEH LPSDFWV RI 063V RQ D ORFDO IRUHVW FRPPXQLW\ ZLWK UHVSHFW WR JHQGHU FDVWH DQG DJH 7KH VXUYH\V ZHUH DOVR VWUXFWXUHG WR H[SORUH VRPH SROLF\ DQG PDQDJHPHQW RSWLRQV WKDW FRXOG IDFLOLWDWH FRPSURPLVH DQG FRRSHUDWLRQ EHWZHHQ VWDWH IRUHVWU\ DXWKRULWLHV DQG SULYDWH XVHUV RI WKH IRUHVW 7KH ILQDO WKUHH FKDSWHUV RI WKLV UHVHDUFK SUHVHQW WKHVH VXUYH\V WKHLU UHVXOWV DQG WKH SDWKZD\V WR FRPSURPLVH WKDW WKH\ VXJJHVW

PAGE 104

&+$37(5 7+( &20081,7< )25(67 5(6285&( 678'< 7+( %$6(/,1( 6859(< ,QWURGXFWLRQ 7KLV FKDSWHU GHVFULEHV WKH WHVWLQJ DGPLQLVWUDWLRQ DQG DQDO\VLV RI D IRUHVW UHVRXUFH XVH EDVHOLQH VXUYH\ GHYHORSHG WR DGGUHVV WKH IROORZLQJ TXHVWLRQV f :KR DUH WKH ORFDO IRUHVWGZHOOLQJ SHRSOH LQ WKH VXUYH\ DUHD DQG KRZ GR WKH\ XVH ORFDO IRUHVW UHVRXUFHV" f 'R .DUQDWDND )RUHVW 'HSDUWPHQWnV .)'f PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf SURYLGH HQKDQFHG EHQHILWV WR WKHVH ORFDO SHRSOH ZKHQ FRPSDUHG WR WKH EHQHILWV WKH\ SUHYLRXVO\ HQMR\HG IURP WKH IRUHVWV 063V KDYH UHSODFHG" f ,I EHQHILWV IURP 063V GR DFFUXH EXW DUH XQHYHQO\ GLVWULEXWHG ZLWKLQ IRUHVW FRPPXQLWLHV ZKDW JURXSV DUH DIIHFWHG DQG LQ ZKDW ZD\V" f +RZ PLJKW 063 PDQDJHPHQW EH LPSURYHG WR SURGXFH WKRVH IRUHVW SURGXFWV PRVW QHHGHG E\ JURXSV GHSHQGHQW RQ IRUHVWV IRU WKHLU VXEVLVWHQFH" 7KH EDVHOLQH RU JHQHUDO VXUYH\ DGRSWV FDVWH DIILOLDWLRQ JHQGHU DQG DJH DV LQGHSHQGHQW YDULDEOHV WR GLVWLQJXLVK LQWUDn FRPPXQLW\ GLIIHUHQFHV LQ LQIRUPDQW NQRZOHGJH RI IRUHVW SODQWV DQG SURGXFWV GHULYHG IURP WKHP 5HSRUWHG XVHV RI IRUHVW UHVRXUFHV LQ PLQRU IRUHVWV DQG PLQRU IRUHVWV DOUHDG\ FRQYHUWHG WR 063V DUH FRPSDUHG IRU DOO LQWUDFRPPXQLW\ JURXSV 7KLV WHVWV ZKHWKHU WKH SUHVHQFH RU DEVHQFH RI 063V KDV DQ\ HIIHFW RQ IRUHVWGHSHQGHQW

PAGE 105

FRPPXQLWLHV /RFDO EHWWD IRUHVW XVH LQIRUPDWLRQ LV DOVR SURYLGHG IRU WKRVH +DYLN %UDKPLQV ZKR KDYH XVXIUXFW SULYLOHJHV LQ WKHP 7KH EDVHOLQH VXUYH\ DOVR VROLFLWV LQIRUPDQWVn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

PAGE 106

WR JDWKHU DQG DQDO\]H VXFK EDVHOLQH GDWD LQFOXGLQJ WKH VHPL VWUXFWXUHG VXUYH\ IRUPDW XVHG LQ WKLV VWXG\ ,I PRUH VSHFLILF LQIRUPDWLRQ LV VRXJKW KRZHYHU D VHFRQG DQG PRUH GHWDLOHG VXUYH\ VHH &KDSWHU f LQVWUXPHQW EHFRPHV QHFHVVDU\ 7KH IRUHVW UHVRXUFH XVH VXUYH\ IRFXVHV RQ LQIRUPDQWVn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f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

PAGE 107

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f )RUPDO YLOODJHV *UDP 3DQFKD\DWf RIWHQ HQFRPSDVV VHYHUDO FDVWHVSHFLILF KDPOHWV PDNLQJ LQWUDYLOODJH FDVWHEDVHG GLIIHUHQFHV SURIRXQG

PAGE 108

7HUNDQDKDOOL LV ZLWKLQ WKH ILHOG MXULVGLFWLRQ RI 0U & 6DLEDED DQ RIILFHU DW WKH 'LVWULFW &RPPLVVLRQHUn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nV WUDLQLQJ FROOHJH LQ 6LUVL %RWK OLYHG RQ D ZRUNLQJ IDUP DQG ZHUH DGDSWHG WR D UXUDO OLIHVW\OH $ VHPLVWUXFWXUHG VXUYH\ RI TXHVWLRQV ZDV IRUPXODWHG IRU XVH LQ WKH VWXG\nV EDVHOLQH SKDVH (PSOR\HHV RI ERWK JRYHUQPHQW DJHQFLHV DQG QRQJRYHUQPHQW GHYHORSPHQW RUJDQL]DWLRQV JXLGHG PH LQ IRUPXODWLQJ VSHFLILF TXHVWLRQV WKDW ZRXOG QRW EH SHUFHLYHG DV LQWUXVLYH 7KH VXUYH\ VROLFLWHG LQIRUPDWLRQ DERXW LQIRUPDQWVn KRXVHKROGV WKHLU IRUHVW UHVRXUFH FROOHFWLRQ DQG XVH DFWLYLWLHV DQG WKHLU RSLQLRQV DERXW JRYHUQPHQW 063V DQG KRZ WKH\ FRXOG EH LPSURYHG WR EHWWHU PHHW ORFDO IRUHVW XVH UHTXLUHPHQWV 7R WHVW WKH EDVHOLQH VXUYH\ P\ WZR DVVLVWDQWV ILUVW DGPLQLVWHUHG LW WR P\ QHLJKERUV LQ 6LUVL 7RZQ $V D UHVXOW RI WKH WHVW WKH VXUYH\ IRUPDW DQG ODQJXDJH ZHUH FKDQJHG ZKHQ FRQIXVLQJ RU LQDSSURSULDWH DQG WKH VXUYH\nV RYHUDOO OHQJWK ZDV VKRUWHQHG WKHQ DFFRPSDQLHG P\ DVVLVWDQWV WR 7HUNDQDKDOOL WR

PAGE 109

REVHUYH WKHP ZKLOH WZR PRUH VXUYH\ WULDOV ZHUH GRQH ZLWK YLOODJHUV VLWWLQJ DW D EXV VWRS RQ %DQYDVL 5RDG $IWHU WKH DVVLVWDQWV KDG YLUWXDOO\ PHPRUL]HG WKH VXUYH\ IRUPDW DQG GLYLGHG DGPLQLVWUDWLRQ DQG UHFRUGLQJ WDVNV DPRQJ WKHPVHOYHV WKH\ HQWHUHG 7HUNDQDKDOOL WR GR WZR ILQDO WULDOV LQ KRXVHKROGV E\ WKHPVHOYHV +DYLQJ FRPSOHWHG WKHVH ILQDO WULDOV WKH\ FDPH WR 6LUVL WR UHYLHZ ZKDW KDG RFFXUUHG ZLWK PH 7KH YHUDFLW\ RI WULDO UHVSRQVHV FRQFHUQLQJ IDPLO\ PHPEHUVKLS ODQG RZQHUVKLS LQFRPH FDWHJRU\ DQG OLYHVWRFN KROGLQJV ZDV DOVR FKHFNHG DJDLQVW WKH 'LVWULFW &RPPLVVLRQHUnV UHFRUGV E\ 0U 6DLEDED 5HVSRQVHV DJUHHG ZLWK ORFDO WD[ UHFRUGV $ ILQDO UHYLVHG VXUYH\ IRUPDW ZDV DGRSWHG E\ PH DQG P\ DVVLVWDQWV DQG SKRWRFRSLHG IRU LQWHUYLHZ DQG UHFRUGLQJ SXUSRVHV VHH $SSHQGL[ $f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

PAGE 110

&DVWH *URXSV 7ZHOYH GLVWLQFW FDVWH JURXSV SDUWLFLSDWHG LQ WKH 7HUNDQDKDOOL 9LOODJH EDVHOLQH VXUYH\ +DYLN %UDKPLQ 7KLV LV WKH PDMRULW\ ODQGKROGLQJ JURXS 1LQHW\ILYH SHUFHQW RI DOO +DYLN LQIRUPDQWV RZQ WKHLU RZQ ODQGV 7KH ODUJHVW JURXS RI 'UDYLG RU VRXWKHUQ %UDKPLQV LQ .DQDUD +DYLNV SUREDEO\ PLJUDWHG IURP QRUWKHUQ ,QGLD E\ VHD DW WKH HQG RI WKH WK FHQWXU\ %RPED\ *D]HWWHU f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f WKLV JURXS RI JROGVPLWKV KDV WDNHQ WKH KRQRULILF 6KHW DIWHU VXUQDPHV )LYH RI WKH 6RQDUV LQWHUYLHZHG RZQ WKHLU DJULFXOWXUDO ODQGV $ ULVLQJ FODVV HFRQRPLFDOO\ 6RQDUV FODLP EUDKPLQLFDO RULJLQV 2WKHU %UDKPLQV KRZHYHU SHUFHLYH WKHP WR EH RI LQWHUPHGLDWH VWDWXV 1DPDGKDUL 1DLN 0LJUDWLQJ LQWR WKH :HVWHUQ *KDWV IURP WKH 0DODEDU &RDVW WKLV JURXS KDV DJULFXOWXUDO URRWV )LIW\ SHUFHQW RI WKRVH VXUYH\HG RZQ WKHLU RZQ ODQG ZKLOH RQHWKLUG ZRUN DV DJULFXOWXUDO ODERUHUV $ IHZ KDYH ORFDO EXVLQHVV LQWHUHVWV )RUPHUO\ ZHDN HFRQRPLFDOO\ DQG SROLWLFDOO\ 1DPDGKDUL 1DLNV DUH DQ HPHUJLQJ IRUFH LQ .DQDUD SROLWLFDO DIIDLUV %DGDJL $ XELTXLWRXV ORFDO JURXS RI FDUSHQWHUV EODFNVPLWKV DQG PDQXIDFWXUHUV RI DJULFXOWXUDO WRROV WZR RI ILYH %DGDJLV LQWHUYLHZHG RZQ WKHLU DJULFXOWXUDO ODQGV %DGDJLV KROG DQ LQWHUPHGLDWH SRVLWLRQ ERWK HFRQRPLFDOO\ DQG VRFLDOO\

PAGE 111

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nV LQWHULRU EXW ODUJH HQFODYHV RI 9RNNDOLJD *RZGDV DUH IRXQG LQ FRDVWDO 1RUWK .DQDUD :KLOH IHZ RZQ ODQG ILYH RI WKH VHYHQ LQWHUYLHZHG OHDVH FXOWLYDEOH ODQGV 1RW WR EH FRQIXVHG ZLWK SDVWRUDO JRZGDV LQ RWKHU UHJLRQV WKLV JURXS LV HFRQRPLFDOO\ ZHDN KDV ORZ VWDWXV DQG LV XQUHSUHVHQWHG SROLWLFDOO\ 0RJHU 3ULPDULO\ ILVKHUV RULJLQDWLQJ IURP FRDVWDO DUHDV 0RJHUV ZRUN DV DJULFXOWXUDO ODERUHUV IRU RWKHUV 0RJHUV DUH FRQVLGHUHG DQ XQGHUSULYLOHJHG FRPPXQLW\ D VFKHGXOHG FDVWH DQG DUH WKH IRFXV RI FHQWUDO DQG

PAGE 112

VWDWH JRYHUQPHQW DIILUPLWLYH DFWLRQ SURJUDPV 7KLV JURXS KDV WKH ORZHVW VRFLDO VWDWXV +DPOHWV 7HUNDQDKDOOL 9LOODJH FRPSULVHV KDPOHWV ,QIRUPDQWV IURP HDFK KDPOHW ZHUH LQFOXGHG LQ WKH EDVHOLQH VXUYH\ 3DUWLFXODU FDVWH JURXSV SUHGRPLQDWH LQ VSHFLILF KDPOHWV SK\VLFDOO\ VHSDUDWLQJ WKHPVHOYHV IURP RWKHU JURXSV /RFDO PLQRULW\ FDVWHV DOVR NHHS WR WKHPVHOYHV VSDWLDOO\ EXW VRPHWLPHV VKDUH KDPOHWV ZLWK RWKHU PLQRULWLHV ,QWHJUDWLRQ RI PLQRULWLHV LV PRVW IUHTXHQW ERUGHULQJ %DQYDVL 5RDG DOORZLQJ ODQGOHVV JURXSV FRQYHQLHQW DFFHVV WR HPSOR\PHQW DQG PDUNHW RSSRUWXQLWLHV EH\RQG WKH YLOODJH 6RPH EXW QRW DOO JURXSV OLYLQJ LQ KDPOHWV FORVH WR %DQYDVL 5RDG FROOHFW QR IRUHVW SURGXFWV DW DOO ,Q VXFK FDVHV IRUHVW SURGXFWV DUH SXUFKDVHG IURP RWKHU FDVWH JURXSV WKDW FROOHFW VXUSOXVHV $SDUW IURP WKLV URDGVLGHLQWHULRU GLVWLQFWLRQ WKH HIIHFW RI KDPOHWV RQ ORFDO IRUHVW XVH ZDV QRW DSSDUHQW *HQGHU (LJKW\ILYH IHPDOHV DQG PDOHV ZHUH LQWHUYLHZHG )HPDOHV ZHUH LQWHQWLRQDOO\ RYHUVDPSOHG LQ 7HUNDQDKDOOL VLQFH WKHUH WKH\ DUH PRVW FRPPRQO\ LQYROYHG LQ WKH FROOHFWLRQ RI D YDULHW\ IRUHVW SURGXFWV IRU SHUVRQDO DQG KRXVHKROG XVH 7DEOH VKRZV WKH GLVWULEXWLRQ RI LQGLYLGXDO VXUYH\ LQIRUPDQWV E\ JHQGHU DQG FDVWH

PAGE 113

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

PAGE 114

7DEOH $JH GLVWULEXWLRQ E\ \HDU LQWHUYDOV RI EDVHOLQH VXUYH\ LQIRUPDQWV $JH ,QWHUYDO )HPDOHV 0DOHV 7HHQV L 7ZHQWLHV 7KLUWLHV )RUWLHV )LIWLHV 6L[WLHV 6HYHQWLHV (LJKWLHV 1LQHWLHV 0DULWDO 6WDWXV 2QO\ HLJKW LQIRUPDQWV ZHUH XQPDUULHG WKUHH IHPDOHV XQGHU \HDUV ROG D \HDUROG IHPDOH WKUHH PDOHV XQGHU \HDUV ROG DQG D \HDUROG PDOH ,Q WKLV UHJLRQ DV LQ PXFK RI UXUDO ,QGLD IHPDOHV QRUPDOO\ PDUU\ EHIRUH WKH DJH RI DQG PDOHV LQ WKHLU HDUO\ V 9,.6$7 f /LWHUDF\ /RFDO XVDJH RI WKH WHUP OLWHUDF\ H[WHQGV WR WKRVH ZKR DUH RQO\ DEOH WR ZULWH WKHLU RZQ VLJQDWXUH LUUHVSHFWLYH RI HGXFDWLRQDO EDFNJURXQG %HFDXVH RI WKLV LQWHUSUHWDWLRQ UHSRUWHG OLWHUDF\ DSSHDUV JUHDWHU WKDQ IXQFWLRQDO OLWHUDF\ WKH DELOLW\ WR UHDG DQG ZULWH DW D MXQLRU KLJK VFKRRO OHYHO &DVWH GLVWULEXWLRQ RI KRXVHKROGV LQ ZKLFK DOO IHPDOH PHPEHUV DUH

PAGE 115

OLWHUDWH LQ SUHVHQWHG LQ 7DEOH 1HDUO\ WRWDO OLWHUDF\ KDV EHHQ DFKLHYHG DPRQJ 7HUNDQDKDOOL ZRPHQ LQ EUDKPLQLFDO /LQJD\DW +DYLN %UDKPLQ DQG 6RQDU6KHWf KRXVHKROGV (FRQRPLFDOO\ SURJUHVVLYH 1DPDGKDUL 1DLN DQG 0XVOLP KRXVHKROGV GLVSOD\ LQWHUPHGLDWH OHYHOV RI WRWDO IHPDOH OLWHUDF\ ZKLOH WRWDO KRXVHKROG IHPDOH OLWHUDF\ LV ORZ DPRQJ DOO RWKHU FDVWHV 7DEOH 'LVWULEXWLRQ RI KRXVHKROGV LQ ZKLFK DOO IHPDOHV DUH OLWHUDWH E\ FDVWH &DVWH +RXVHKROGV LQ :KLFK $OO )HPDOHV DUH /LWHUDWH Q +DYLN %UDKPLQ RI SHUFHQWf /LQJD\DW RI SHUFHQWf 6RQDU6KHW RI SHUFHQWf 1DPDGKDUL 1DLN RI SHUFHQWf %DGDJL RI SHUFHQWf 0XVOLP RI SHUFHQWf 3RRMDUL 1DLN RI r SHUFHQWf .RGL\D RI r SHUFHQWf 3DWJDU RI r SHUFHQWf 0DUDWKD RI SHUFHQWf 9RNNDOLJD *RZGD RI SHUFHQWf 0RJHU RI r SHUFHQWf r5HSUHVHQWV DOO KRXVHKROGV LQ WKH VXUYH\ DUHD 7DEOH OLVWV KRXVHKROGV LQ ZKLFK DOO IHPDOHV RU DOO PDOHV DUH LOOLWHUDWH E\ FDVWH $OO EUDKPLQLFDO KRXVHKROGV VXUYH\HG DUH

PAGE 116

WR VRPH H[WHQW OLWHUDWH $OO RWKHU FDVWH KRXVHKROGV VXUYH\HG UHSRUWHG WRWDO IHPDOH LOOLWHUDF\ PRUH RIWHQ WKDQ WRWDO PDOH LOOLWHUDF\ 7DEOH 'LVWULEXWLRQ RI KRXVHKROGV LQ ZKLFK DOO IHPDOHV RU DOO PDOHV DUH LOOLWHUDWH E\ FDVWH &DVWH )HPDOHV 0DOHV KRXVHKROGV VDPSOHG +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q r .RGL\D Q r 3DWJDU Q Or 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q r 7RWDOV A5HSUHVHQWV DOO KRXVHKROGV LQ WKH VXUYH\ DUHD /DQG 2ZQHUVKLS (PSOR\PHQW DQG /DQG (QFURDFKPHQW 2ZQHUVKLS RI $UHFD QXWVSLFH JDUGHQV KDV EHHQ WKH KLVWRULFDO SUHURJDWLYH RI +DYLN %UDKPLQV LQ .DQDUD 'LVWULFW /RSSLQJ ULJKWV LQ EHWWD IRUHVWV DUH D VWDWHVDQFWLRQHG SULYLOHJH DVVRFLDWHG ZLWK

PAGE 117

VSLFH JDUGHQ RZQHUVKLS ,QFUHDVLQJ UHJLRQDO DQG LQWHUQDWLRQDO GHPDQG IRU $UHFD QXW FRQWLQXHV WR ERRVW SURILWV IURP WKHVH JDUGHQV ,Q 7HUNDQDKDOOL DQG WKURXJKRXW .DQDUD ODQGV WKDW ZHUH IRUPHUO\ FRQVLGHUHG XQVXLWDEOH IRU $UHFD FXOWXUH DUH QRZ EHLQJ FRQYHUWHG WR JDUGHQV ZKHUHYHU SRVVLEOH 1DPDGKDUL 1DLN 6RQDU6KHW DQG 0XVOLP JURXSV DUH QRZ WDNLQJ XS $UHFD FXOWXUH 7DEOH /DQG RZQHUVKLS DQG IRUHVW XVH ULJKWV E\ FDVWH IDPLO\ &DVWH Q 2ZQ 3DGG\ ULFH ILHOGVf 2ZQ $UHFDQXW VSLFH JDUGHQVf +DYH %HWWD )RUHVW 8VH 5LJKWV +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q 7RWDOV 3DGG\ RZQHUVKLS LV D DQRWKHU VLJQ RI HFRQRPLF ZHO IDUH DQG LV EHFRPLQJ PRUH FRPPRQ DPRQJ QRQEUDKPLQLFDO FDVWH JURXSV 7DEOH

PAGE 118

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

PAGE 119

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f SHUFHQWf

PAGE 120

2QO\ ILYH RI SHUFHQWf EUDKPLQLFDO IHPDOH LQIRUPDQWV ZHUH XQVNLOOHG ODERUHUV ,Q FRQWUDVW RI SHUFHQWf RI DOO QRQEUDKPLQLFDO ZRPHQ LQIRUPDQWV ZHUH XQVNLOOHG ODERUHUV 7DEOH LQGLFDWHV WKH GLVWULEXWLRQ RI XQVNLOOHG ODERUHUV E\ FDVWH DQG JHQGHU 7DEOH 'LVWULEXWLRQ RI *DRQWKDQD XVH DQG ODQG HQFURDFKPHQW E\ FDVWH &DVWH Q +RXVH /RFDWHG RQ *DRQWKDQD /DQG +RXVH /RFDWHG RQ (QFURDFKHG /DQG $JULFXOWXUDO (QFURDFKPHQW RI )RUHVW /DQGV +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q 7RWDOV SHUFHQWf SHUFHQWf SHUFHQWf 9LOODJH ODQG JDRQWKDQD LV PHQWLRQHG LQ %ULWLVK ODQG VHWWOHPHQW UHFRUGV E\ WKH HDUO\ WK FHQWXU\ %RPED\ *D]HWWHHU

PAGE 121

f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f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

PAGE 122

7DEOH 'LVWULEXWLRQ RI DQQXDO KRXVHKROG LQFRPH LQ ,QGLDQ 5XSHHV E\ FDVWH &DVWH Q + %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1 1DLN Q %DGDJL Q 0XVOLP Q OO 3 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9 *RZGD Q 0RJHU Q 7RWDOV 7DEOH SUHVHQWV WKH GLVWULEXWLRQ RI WKHVH KRXVHKROG LQFRPH LQWHUYDOV E\ FDVWH $QQXDO LQFRPH JUHDWHU WKDQ ,QGLDQ 5XSHHV LV DOPRVW HQWLUHO\ UHVWULFWHG WR EUDKPLQLFDO DQG 0DQDGKDUL 1DLN FDVWHV 2QH 86 GROODU HTXDOOHG ,QGLDQ 5XSHHV LQ PLG /LYHVWRFN 2ZQHUVKLS 'RPHVWLF DQLPDOV LQFOXGH EXIIDORHV R[HQ FRZV DQG JRDWV 7DEOH SUHVHQWV WKH DYHUDJH QXPEHU RI OLYHVWRFN RZQHG SHU FDVWH KRXVHKROG IRU HDFK RI WKHVH GRPHVWLFDWHV

PAGE 123

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

PAGE 124

OHDYHV IRGGHUf GU\ OHDYHV JDUGHQ PXOFKf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f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f D WLPH RI VFDUFLW\ EXW ZKHQ KRXVHKROG ODERU UHVRXUFHV DUH DEXQGDQW 0LQRU IRUHVWV ZHUH FLWHG DV WKH PRVW LPSRUWDQW SURGXFW FROOHFWLRQ DUHDV E\ DOO FDVWHV H[FHSW +DYLN %UDKPLQV ZKR KDYH DFFHVV WR EHWWD IRUHVWV DQG .RGL\DV ZKR OLYH DGMDFHQW WR D UHVHUYHG IRUHVW

PAGE 125

7DEOH 3ULRULW\ IRUHVW SURGXFWV PRQWKVf FROOHFWHG IRUHVW W\SH ZKHUH FROOHFWHG DQG QXPEHU RI WLPHV PHQWLRQHG E\ FDVWH &DVWH 3ULRULW\ ,WHPV 0RQWKVf :KHUH &ROOHFWHG WLPHV PHQWLRQHGf &ROOHFWHG WLPHV PHQWLRQHGf + %UDKPLQ )XHOZRRG f 0D\ %HWWD )RUHVWV f Q 'U\ /HDYHV f -DQ0D\ 0LQRU )RUHVWV f *UHHQ /HDYHV f -XO$XJ t 1R &ROOHFWLRQ f )UXLWV f )HE0D\ /LQJD\DW Q )XHOZRRG f 0D\ 0LQRU )RUHVWV f *UHHQ /HDYHV f -XQ$XJ 6RQDU6KHW Q )XHOZRRG f $SU0D\ 0LQRU )RUHVWV f 0XVKURRPV f $XJ *UHHQ /HDYHV f -XO$XJ %DPERR 6KRRWV f -XQ-XO )LEHU f 0D\ )UXLWV f 0D\ 1 1DLN Q )XHOZRRG f 0DU0D\ 0LQRU )RUHVWV f )LEHU f 0D\ 5HVHUYH )RUHVWV f 'U\ /HDYHV f $SU0D\ t %HWWD )RUHVWV f *UHHQ /HDYHV f -XO6HSW 0XVKURRPV f -XO$XJ )UXLWV f $SU0D\ %DPERR 6KRRWV f 0D\-XQ

PAGE 126

7DEOH f§FRQWLQXHG &DVWH 3ULRULW\ ,WHPV 0RQWKVf :KHUH &ROOHFWHG WLPHV PHQWLRQHGf &ROOHFWHG WLPHV PHQWLRQHGf %DGDJL Q )XHOZRRG f 0D\ 5HVHUYH )RUHVWV f )UXLWV f 'HF0D\ t 0LQRU )RUHVWV f 0XVKURRPV f -XQ$XJ )LEHU f $OO
PAGE 127

,OO 7DEOH f§FRQWLQXHG &DVWH 3ULRULW\ ,WHPV 0RQWK Vf :KHUH &ROOHFWHG WLPHV PHQWLRQHGf &ROOHFWHG WLPHV PHQWLRQHGf 0DUDWKD Q )XHOZRRG f 0D\ 0LQRU )RUHVWV f *UHHQ /HDYHV f -XQ6HSW 'U\ /HDYHV f )HE0D\ )UXLWV f 'HF0D\ %DPERR 6KRRWV f -XQ )LEHU f $OO
PAGE 128

7DEOH 1XPEHUV DQG SHUFHQWDJH RI IHPDOH DQG PDOH LQIRUPDQWV WKDW FROOHFW SULRULW\ IRUHVW SURGXFWV 3ULRULW\ )RUHVW 3URGXFWV )HPDOH &ROOHFWRUV Q 0DOH &ROOHFWRUV Q )XHOZRRG SHUFHQWf SHUFHQWf *UHHQ /HDYHV SHUFHQWf SHUFHQWf 'U\ /HDYHV SHUFHQWf SHUFHQWf )UXLWV SHUFHQWf SHUFHQWf 0XVKURRPV SHUFHQWf SHUFHQWf )LEHU SHUFHQWf SHUFHQWf %DPERR 6KRRWV SHUFHQWf SHUFHQWf )XHOZRRG 0DOHV DQG IHPDOHV RI DOO FDVWHV VKDUH LQ IXHOZRRG FROOHFWLRQ VHH 7DEOH f ZLWK WKH H[FHSWLRQ RI 0XVOLP ZRPHQ 7HQ IHPDOH LQIRUPDQWV GLG VWDWH WKDW LW LV XVXDOO\ ZRPHQ ZKR JR WR WKH IRUHVW WR FROOHFW ILUHZRRG )XHOZRRG FROOHFWLRQ RFFXUV SDUWLFXODUO\ GXULQJ $SULO DQG 0D\ WKH ILQDO PRQWKV RI WKH GU\ VHDVRQ 7DEOH )XHOZRRG FROOHFWLRQ E\ JHQGHU DQG FDVWH &DVWH *URXSLQJ )HPDOH &ROOHFWRUV 0DOH &ROOHFWRUV 0XVOLP RI SHUFHQWf RI SHUFHQWf $OO 2WKHU &DVWH *URXSV RI SHUFHQWf RI SHUFHQWf $QQXDO IXHOZRRG FROOHFWLRQ IRU LQGLYLGXDO KRXVHKROGV ZDV UHSRUWHG LQ FDUWORDG HTXLYDOHQWV FDUWORDG HTXDOOLQJ NJ $YHUDJH

PAGE 129

DQQXDO IXHOZRRG FROOHFWLRQ SHU KRXVHKROG E\ FDVWH JURXS LV VKRZQ LQ 7DEOH 7ZHQW\RQH RI +DYLN %UDKPLQ KRXVHKROGV XVH ELRJDV JHQHUDWHG IURP GRPHVWLF DQLPDO ZDVWH WR VXSSOHPHQW WKHLU IXHOZRRG XVH UHTXLUHPHQWV 7DEOH $YHUDJH DQQXDO IXHOZRRG FROOHFWLRQ LQ NLORJUDPV DQG FDUWORDGV E\ FDVWH KRXVHKROG &DVWH +RXVHKROG .LORJUDPV SHU )DPLO\ +DYLN %UDKPLQ Q FDUW ORDGVf /LQJD\DW Q FDUW ORDGVf 6KHW Q FDUW ORDGVf 1DPDGKDUL 1DLN Q FDUW ORDGVf %DGDJL Q FDUW ORDGVf 0XVOLP Q OO FDUW ORDGf 3RRMDUL 1DLN Q FDUW ORDGVf .RGL\D Q FDUW ORDGVf 3DWJDU Q O FDUW ORDGVf 0DUDWKD Q FDUW ORDGVf 9RNNDOLJD *RZGD Q FDUW ORDGVf 0RJHU Q FDUW ORDGVf /HDYHV *UHHQ OHDYHV DUH ORSSHG IURP ZRRG\ SHUHQQLDOV IRU IRGGHU DQG DUH DOVR ORSSHG IURP EHWWD IRUHVW WUHHV DQG GULHG EHIRUH FROOHFWLRQ DV PXOFK 7KH PRVW SRSXODU IRGGHUSURGXFLQJ WUHHV VSHFLHV LQ 7HUNDQDKDOOL DUH 'LOOHQLD SHQWDJ\QD *UHZLD WLOLDHIROLD )LFXV *ORPHUDWD 3WHURFDUSXV PDUVXSLXP DQG 3RWKRV

PAGE 130

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f SHUFHQWf 6KHW I P 1DPDGKDUL 1DLN I P SHUFHQWf SHUFHQWf 0XVOLP I P 3RRMDUL 1DLN I P O 0DUDWKD I P 9RNNDOLJD *RZGD I SHUFHQWf QRQH LQWHUYLHZHG 0RJHU P QRQH LQWHUYLHZHG $QQXDO JUHHQ OHDI FROOHFWLRQ IRU LQGLYLGXDO KRXVHKROGV ZDV UHSRUWHG LQ KHDGORDG HTXLYDOHQWV KHDGORDG HTXDOOLQJ NJ 7DEOH VKRZV DYHUDJH DQQXDO JUHHQ OHDI FROOHFWLRQ SHU KRXVHKROG IRU WKH WZR PDMRU OHDI FROOHFWLQJ FDVWH JURXSV +DYLN %UDKPLQ DQG 1DPDGKDUL 1DLN

PAGE 131

7DEOH $YHUDJH DQQXDO JUHHQ OHDI FROOHFWLRQ LQ NLORJUDPV IRU WKH WZR PDMRU OHDIFROOHFWLQJ FDVWHV &DVWH +RXVHKROG .LORJUDPV+RXVHKROG +DYLN %UDKPLQ Q KHDGORDGVf 1DPDGKDUL 1DLN Q KHDGORDGVf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f SHUFHQWf 1DPDGKDUL 1DLN I P SHUFHQWf SHUFHQWf 0XVOLP I P 3RRMDUL 1DLN I P O .RGL\D I P QRQH LQWHUYLHZHG 0DUDWKD I P 9RNNDOLJD *RZGD I P SHUFHQWf QRQH LQWHUYLHZHG 0RJHU I P QRQH LQWHUYLHZHG

PAGE 132

$QQXDO GU\ OHDI FROOHFWLRQ IRU LQGLYLGXDO KRXVHKROGV ZDV UHSRUWHG LQ KHDGORDG HTXLYDOHQWV KHDGORDG HTXDOOLQJ NJ VHH 7DEOH f IRU WKH WZR PDMRU OHDI FROOHFWLQJ FDVWH JURXSV 7DEOH $YHUDJH DQQXDO GU\ OHDI FROOHFWLRQ LQ NLORJUDPV IRU WKH WZR PDMRU OHDIFROOHFWLQJ FDVWHV &DVWH +RXVHKROG .LORJUDPV+RXVHKROG +DYLN %UDKPLQ Q KHDGORDGVf 1DPDGKDUL 1DLN Q KHDGORDGVf )UXLWV 7DEOH LQGLFDWHV WKH QXPEHU RI WLPHV LQIRUPDQWV IURP GLIIHUHQW FDVWHV PHQWLRQHG XQVROLFLWHG WKDW WKH\ FROOHFW VL[ 7DEOH &ROOHFWLRQ RI VL[ SRSXODU VSHFLHV RI IUXLW E\ FDVWH WLPHV PHQWLRQHGf &DVWH 0DQJR -DFN :DWDHNDL $FDFLD 6RDSQXW 0DQJRVWHHQ +DYLN %UDKPLQ Q 6RQDU6KHW Q 1DPGKDUL 1DLN Q %DGDJL Q .RGL\D Q 3RRMDUL 1DLN Q 9 *RZGD Q 0DUDWKD Q 7RWDO

PAGE 133

VSHFLHV RI IUXLW PDQJR 0DQJIHUD LQGLFDf MDFN $UWRFDUSXV LQWHJULIROLDf ZDWDHNDL $UWRFDUSXV ODFXFKDf $FDFLD $FDFLD FRFFLQDf VRDSQXW 6DSLQGXV HPHUJLQDWDf DQG PDQJRVWHHQ *DUFLQLD LQGLFDf 7KHVH DUH VRPH RI WKH PRVW SRSXODU ORFDO IRUHVW IUXLWV 7KH\ DUH VHDVRQDOO\ FROOHFWHG E\ PHQ DQG ZRPHQ LQIRUPDQWV IURP HLJKW FDVWH JURXSV 0XVKURRPV 7ZR JURXSV RI HGLEOH IXQML DUH FROOHFWHG ORFDOO\ GDUN DQG OLJKW EXWWRQ PXVKURRPV %RWK IUXLW GXULQJ PRQVRRQ UDLQV DQG DUH SULPDULO\ FROOHFWHG E\ 1DPDGKDUL 1DLN DQG SRRUHU FDVWH ZRPHQ VHH 7DEOH f 9RNNDOLJD *RZGD ZRPHQ UHSRUWHG WKDW WKH\ HDFK FROOHFW DSSUR[LPDWHO\ NJ RI PXVKURRPV HDFK UDLQ\ VHDVRQ 7KRXJK QR LQIRUPDQWV VXSSOHPHQW WKHLU LQFRPH IURP PXVKURRP VDOHV WKHUH LV D PDUNHW IRU WKHP LQ 6LUVL 7RZQ (QWUHSUHQHXUV KDYH EHJXQ FRPPHUFLDO FXOWLYDWLRQ RI QRQZLOG PXVKURRPV LQ .DQDUD 'LVWULFW 7DEOH 0XVKURRP &ROOHFWLRQ E\ FDVWH WLPHV PHQWLRQHGf &DVWH 7LPHV 0HQWLRQHG 1DPDGKDUL 1DLN %DGDJL 9RNNDOLJD *RZGD 3RRMDUL 1DLN 6RQDU6KHW

PAGE 134

'DWH 3DOP %HVLGHV FRQVXPLQJ 3KRHQL[ VLOYHVWULV IUXLWV SRRU FDVWH JURXSV XVH GDWH SDOP ILEHU WR ZHDYH nFKDSHn PDWV DQG WR PDNH ZKLVN EURRPV 7DEOH LQGLFDWHV WKRVH FDVWH JURXSV WKDW PHQWLRQHG WKH\ FROOHFW GDWH SDOP SURGXFWV 7DEOH 'DWH SDOP SURGXFW FROOHFWLRQ E\ FDVWH WLPHV PHQWLRQHGf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f $UWRFDUSXV ODFXFKD WLPHVf $FDFLD FRFFLQD WLPHVf DQG 6DSLQGXV LQGLFD VHYHQ WLPHVf IURP VXUURXQGLQJ IRUHVWV 3RRUHU FDVWH JURXSV XQLIRUPO\ PHQWLRQHG DOO RI WKH SURGXFWV OLVWHG LQ 7DEOH

PAGE 135

7DEOH ,QFUHDVLQJO\ VFDUFH IRUHVW SURGXFWV WLPHV PHQWLRQHGf )RUHVW 3URGXFW 7LPHV 0HQWLRQHG $UWRFDUSXV ODFXFKD :LOG +RQH\ $FDFLD FRFFLQQD *DUFLQLD LQGLFD 6DSLQGXV LQGLFD &RQVWUXFWLRQ 7LPEHU %DPERR 0XVKURRPV $UWRFDUSXV LQWHJULIROLD 0DQJLIHUD LQGLFD :KHQ DVNHG ZK\ WKHVH GHVLUHG SURGXFWV KDYH EHFRPH VFDUFH RU H[WLQFW LQ ORFDO IRUHVWV LOOHJDO ORSSLQJ DQG IHOOLQJ RI WUHHV ZDV SURPLQHQWO\ FLWHG RI WLPHVf 7DEOH VXPPDUL]HV ORFDO EHOLHIV DERXW ZK\ WKHVH SURGXFWV KDYH EHFRPH VFDUFH $ nQRW DSSOLFDEOHn UHVSRQVH ZDV JLYHQ IRU LQIRUPDQWV ZKR GR QRW WKHPVHOYHV FROOHFW WKHVH IRUHVW SURGXFWV

PAGE 136

7DEOH 5HDVRQV FLWHG ZK\ IRUHVW SURGXFWV DUH EHFRPLQJ ORFDOO\ VFDUFH E\ FDVWH WLPHV PHQWLRQHGf &DVWH 6FDUFH )HOOLQJ ([WLQFW )HOOLQJ /DFN RI 9LJLOHQFH RI )RUHVW *XDUGV 6RLO WRR 'U\ 1RW $SSOLFDEOH +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q 7RWDOV Q /RFDO 3HUFHSWLRQV RI 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf 2QO\ QLQH RI LQIRUPDQWV LQGLFDWHG WKDW 063V DUH RI DQ\ EHQHILW WR WKH ORFDO FRPPXQLW\ 2I WKHVH QLQH ILYH 1DPDGKDUL 1DLN ZRPHQ DQG D 3RRMDUL 1DLN ZRPDQ DUH VHDVRQDOO\ HPSOR\HG LQ IRUHVW GHSDUWPHQW WUHH QXUVHULHV 7ZR LQIRUPDQWV VSUHDG &DVXDULQD DQG $FDFLD OHDYHV IURP SODQWDWLRQV RQ WKHLU JDUGHQV WR LQWHQWLRQDOO\ VXSSUHVV ZHHG JURZWK 2QH LQIRUPDQW IHOW WKDW 063V GHFUHDVHG ORFDO WLPEHU WKHIW VLQFH QR KDUYHVWDEOH WLPEHU FDQ EH

PAGE 137

IRXQG LQ \RXQJ SODQWDWLRQV )LIW\HLJKW RI SHUFHQWf LQIRUPDQWV UHSRUWHG WKDW WR GDWH WKH\ SHUFHLYH QR GLVDGYDQWDJHV DVVRFLDWHG ZLWK 063V 6L[W\IRXU SHUFHQWf LQIRUPDQWV UHSRUWHG IRXU SULPDU\ GLVDGYDQWDJHV RI 063V WR ORFDO FRPPXQLWLHV 7ZR LQIRUPDQWV IHOW WKDW RQO\ WKH VWDWH JRYHUQPHQW EHQHILWV IURP H[SDQVLRQ RI 063V 5HSRUWHG RSLQLRQV DERXW 063V ZHUH XQLIRUPO\ GLVWULEXWHG DFURVV DOO QRQ0XVOLP FDVWHV DQG JHQGHU OLQHV DQG DUH OLVWHG LQ 7DEOH 7DEOH /RFDO RSLQLRQV DERXW 063V WLPHV PHQWLRQHGf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

PAGE 138

SULYDWH IRUHVWHG PDONLf ODQGV /RVW PHGLFLQDO UHVRXUFHV ZHUH UHSRUWHG H[FOXVLYHO\ E\ +DYLN %UDKPLQV 2WKHU QHJDWLYH FRPSDULVRQV RI 063V WR PLQRU IRUHVWV ZHUH XQLIRUPO\ GLVWULEXWHG DFURVV FDVWH DQG JHQGHU DQG DUH VKRZQ LQ 7DEOH 7DEOH /RFDO RSLQLRQV DERXW 063V YHUVXV PLQRU IRUHVWV WLPHV PHQWLRQHGf 2SLQLRQ DERXW 063V YHUVXV 0LQRU )RUHVWV 7LPHV 0HQWLRQHG 1R ,PSDFW (LWKHU 3RVLWLYH RU 1HJDWLYH /RVV RI )RGGHU 5HVRXUFHV /HDYHV t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

PAGE 139

7DEOH 3HUFHSWLRQV DERXW WKH XWLOLW\ RI ORFDO IRUHVWV WLPHV PHQWLRQHGf 3HUFHSWLRQV $ERXW WKH 8WLOLW\ RI /RFDO )RUHVWV 7LPHV 0HQWLRQHG ,QFUHDVH 6RLO PRLVWXUH t ([WHQG *URZLQJ 6HDVRQ ,PSURYH /RFDO $JULFXOWXUDO 3URGXFWLYLW\ $WWHQXDWH &OLPDWLF ([WUHPHV t 3ROOXWLRQ 3URYLGH 8QVSHFLILHG 0XOWLSOH 8VH %HQHILWV 6RXUFH RI )XHOZRRG 6RXUFH RI /HDYHV IRU )RGGHU t *UHHQ 0DQXUH 6RXUFH RI /XPEHU IRU 7RRO 0DNLQJ 6RXUFH RI 0HGLFLQDO 5HVRXUFHV /RFDOO\ 3RSXODU 7UHH 6SHFLHV :KHQ DVNHG DERXW SUHIHUUHG W\SHV RI WUHHV WR EH LQFOXGHG LQ IXWXUH UHIRUHVWDWLRQ SURJUDPV QDWLYH PXOWLSOHXVH VSHFLHV ZHUH PHQWLRQHG PRVW RIWHQ WLPHVf IROORZHG E\ QDWLYH WLPEHU VSHFLHV WLPHVf DQG QDWLYH IUXLW WUHHV WKUHH WLPHVf 6SHFLILF WUHH VSHFLHV WKDW LQIRUPDQWV PRVW IUHTXHQWO\ UHTXHVWHG IRU LQFOXVLRQ LQ IXWXUH UHIRUHVWDWLRQ SURJUDPV DUH OLVWHG LQ 7DEOH DORQJ ZLWK WKHLU SULPDU\ XVHVf (LJKW RU PRUH RI WKHVH VSHFLHV DUH DOUHDG\ DPRQJ WKRVH URXWLQHO\ SODQWHG LQ 063V +RZHYHU LQIRUPDQWV IHOW WKDW WKH JURZWK RI QDWLYH WUHH VSHFLHV ZDV GLVFRXUDJHG LQ 063V )LYH LQGLYLGXDOV IHOW WKDW QDWLYH VSHFLHV VKRXOG DFFRXQW IRU IXOO\ WZRWKLUGV RI DOO WUHH SODQWLQJV LQ 063V &DVXDULQD DQG $FDFLD WUHHV SUHVHQWO\ FRPSULVH SHUFHQW RI DOO SODQWLQJV LQ 063V

PAGE 140

7DEOH 7UHH VSHFLHV PRVW UHTXHVWHG IRU LQFOXVLRQ LQ IXWXUH UHIRUHVWDWLRQ SURJUDPV DQG WKHLU XVH 7UHH 6SHFLHV 7LPHV 5HTXHVWHG 3ULPDU\ 8VHVVf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f ZDV PHQWLRQHG WLPHV 7KHVH VXJJHVWLRQV ZHUH QRW

PAGE 141

FDVWH RU JHQGHU VSHFLILF +RZHYHU VL[ 0XVOLPV DQG IRXU 9RNNDOLJD *RZGDV VXSSRUWHG H[SDQVLRQ RI 063V ZLWKRXW FKDQJHV WR LQFUHDVH IXHOZRRG VXSSOLHV 6XJJHVWHG )XWXUH 5HIRUHVWDWLRQ 0HWKRGRORJLHV 7KH EDVHOLQH VXUYH\ FRQFOXGHG E\ VROLFLWLQJ LQIRUPDQW RSLQLRQ DERXW VLWLQJ RI IXWXUH UHIRUHVWDWLRQ SURJUDPV VHH 7DEOH 7DEOH /RFDO UHFRPPHQGDWLRQV IRU VLWLQJ RI IXWXUH UHIRUHVWDWLRQ SURJUDPV WLPHV PHQWLRQHGf E\ FDVWH &DVWH 3ULYDWH )RUHVW 9LOODJH %HWWD 1RW /DQG 'HSW /DQG /DQG /DQG 6SHFLILHG +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q 7RWDOV Q

PAGE 142

f DQG UHFRPPHQGHG LPSOHPHQWDWLRQ VWUDWHJLHV VHH 7DEOH f (LJKW\IRXU RI LQIRUPDQWV IHOW WKDW UHIRUHVWDWLRQ SURJUDPV VKRXOG FRQWLQXH WR EH LPSOHPHQWHG RQ IRUHVW GHSDUWPHQW ODQGV 7DEOH LQGLFDWHV WKDW RI LQIRUPDQWV GHVLUHG D FRQWLQXDWLRQ RI IRUHVW GHSDUWPHQWVSRQVRUHG WUHH SODQWLQJ SURJUDPV +RZHYHU RI WKHVH LQIRUPDQWV LQGHSHQGHQWO\ VXJJHVWHG WKDW MRLQW IRUHVW SODQWLQJ DQG PDQDJHPHQW DJUHHPHQWV EH DGRSWHG KHQFHIRUWK 7DEOH /RFDO UHFRPPHQGDWLRQV IRU LPSOHPHQWDWLRQ VWUDWHJ\ RI IXWXUH UHIRUHVWDWLRQ SURJUDPV WLPHV PHQWLRQHGf E\ FDVWH &DVWH 3ULYDWH *RYHUQPHQW 9LOODJH 1*2 1RW 6SRQVRUHG &RRSHUDWLRQ 6SHFLILHG +DYLN %UDKPLQ Q /LQJD\DW Q 6RQDU6KHW Q 1DPDGKDUL 1DLN Q %DGDJL Q 0XVOLP Q OO 3RRMDUL 1DLN Q .RGL\D Q 3DWJDU Q O 0DUDWKD Q 9RNNDOLJD *RZGD Q 0RJHU Q 7RWDOV Q

PAGE 143

-RLQW PDQDJHPHQW DUUDQJHPHQWV DV GHILQHG E\ LQIRUPDQWV LPSO\ ORFDO UHVSRQVLELOLW\ IRU SURWHFWLRQ RI UHSODQWHG IRUHVWV LQ H[FKDQJH IRU OLPLWHG WHQXUH RYHU QRQWLPEHU UHVRXUFHV 2XWULJKW OHDVLQJ RI IRUHVW WUDFWV WR LQGLYLGXDOV DQG IDPLOLHV ZDV PHQWLRQHG ILYH WLPHV 5HIRUHVWDWLRQ WKURXJK SULYDWH LQLWLDWLYH ZDV PHQWLRQHG E\ HLJKW LQGLYLGXDOV DOO RI ZKRP RZQ IRUHVW ODQG PDONL EHQDf 1RQJRYHUQPHQW RUJDQL]DWLRQ 1*2f VSRQVRUVKLS RI UHIRUHVWDWLRQ SURJUDPV KDV QHYHU RFFXUUHG LQ 7HUNDQDKDOOL DQG ZDV UDUHO\ VXJJHVWHG 7KLUW\QLQH RI WKRVH LQWHUYLHZHG IHOW WKDW LQGHSHQGHQW YLOODJH FRRSHUDWLYH UHIRUHVWDWLRQ VFKHPHV VKRXOG EH LQLWLDWHG 7ZHOYH +DYLN %UDKPLQ ZRPHQ VXJJHVWHG WKDW YLOODJH ZRPHQnV VRFLHWLHV 0DKLOD 0DQGDOVf ZHUH FDSDEOH RI FDUU\LQJ RXW FRRSHUDWLYH WUHH SODQWLQJ SURJUDPV

PAGE 144

&+$37(5 7+( &20081,7< )25(67 5(6285&( 678'< 7+( )25(67 5(6285&( 86( 6859(< ,QWURGXFWLRQ :KHQ WKH EDVHOLQH VXUYH\ ZDV FRPSOHWHG D PRUH GHWDLOHG IRUHVW UHVRXUFH XVH VXUYH\ ZDV DGPLQLVWHUHG 7KH ODWWHU VXUYH\ IRFXVHV RQ LQIRUPDQWVn NQRZOHGJH RI IRUHVW SODQWV DQG WKHLU RSLQLRQV DERXW WKH SODQWV WKH\ UHFRJQL]H ,I SURSHUO\ FRQVWUXFWHG D GHWDLOHG VXUYH\ PD\ UHYHDO LQIRUPDQW XVH RI ERWK H[LVWLQJ IRUHVW DUHDV DQG WKH 0XOWLSOH 6SHFLHV 3ODQWDWLRQV 063Vf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f SURJUDPV RQ ZRPHQnV DQG PHQnV UHSRUWHG XVH RI IRUHVW UHVRXUFHV DPRQJ +DYLN %UDKPLQV DV ZHOO DV OHVV SRSXORXV FDVWHV LQ WKH IRUHVW SURGXFWV XVH VXUYH\ )LQDOO\ WKH VXUYH\ H[SORUHV GLIIHUHQFHV LQ NQRZOHGJH

PAGE 145

DQG UHSRUWHG XVH RI IRUHVW UHVRXUFHV EDVHG RQ LQIRUPDQW DJH FODVVHV RI \HDU LQWHUYDOV )RUHVW 3URGXFWV 8VH 6XUYH\ 'DWD &ROOHFWLRQ :KLOH FRQGXFWLQJ VLOYLFXOWXUDO UHVHDUFK FROOHFWHG SODQW VSHFLPHQV FRPPRQO\ DVVRFLDWHG ZLWK PLQRU IRUHVW HQYLURQPHQWV )RUHVW GHSDUWPHQW ILHOG RIILFHUV DQG ORFDO SHRSOH KHOSHG LQ SODQW LGHQWLILFDWLRQ 7KH FROOHFWLRQ LQFOXGHG VSHFLHV VHH $SSHQGL[ %f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f ZKHWKHU WKH\ LQGHHG UHFRJQL]HG D SDUWLFXODU SODQW VSHFLHV f WKH H[WHQW RI WKHLU SHUVRQDO NQRZOHGJH DERXW WKH XWLOLW\ RI HDFK VSHFLHV DQG

PAGE 146

f WKH NLQG RI IRUHVW RU IRUHVW W\SH IURP ZKLFK HDFK IDPLOLDU SODQW VSHFLHV FRXOG EH REWDLQHG DOO REMHFWV RI P\ LQYHVWLJDWLRQ $IWHU UHFRUGLQJ DQ LQIRUPDQWnV JHQGHU FDVWH DJH DQG KDPOHW RI UHVLGHQFH ILHOG DVVLVWDQWV DVNHG HDFK LQIRUPDQW WR VRUW WKH SODQW SKRWRJUDSKV LQWR SLOHV VL[ GLIIHUHQW WLPHV IROORZLQJ WKH VXUYH\ TXHVWLRQQDLUH IRUPDW VHH $SSHQGL[ &f 7KLV SURFHGXUH LV NQRZQ DV SLOH VRUWLQJ %RUJDWWL f ,Q WKLV VXUYH\ LQIRUPDQW VRUWLQJ ZDV RIWHQ JXLGHG E\ WKH XVH RI SUHn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f ,QIRUPDQWV DVVLJQHG LGHQWLILHG SODQW VSHFLHV WR RQH RI ILYH FDWHJRULHV DFFRUGLQJ WR WKHLU SHUFHLYHG XVHIXOQHVV 7KLV SLOH VRUW SURYLGHV D UHODWLYH PHDVXUH RI LQIRUPDQW SHUFHSWLRQ DERXW WKH XWLOLW\ RI HDFK LGHQWLILHG SODQW VSHFLHV ,QIRUPDQWV DVVLJQHG LGHQWLILHG SODQW VSHFLHV WR RQH RI ILYH FDWHJRULHV DFFRUGLQJ WR KRZ UDUH WKH\ ZHUH SHUFHLYHG WR EH 7KLV SLOH VRUW SURYLGHV D UHODWLYH PHDVXUH RI LQIRUPDQW SHUFHSWLRQ RI KRZ RIWHQ HDFK LGHQWLILHG SODQW VSHFLHV LV HQFRXQWHUHG ORFDOO\ ,QIRUPDQWV VHOHFWHG WKRVH SODQW VSHFLHV WKDW WKH\ KDG RFFDVLRQ WR FROOHFW LQ PLQRU IRUHVW DUHDV 7KLV SLOH VRUW SURYLGHV D UHODWLYH PHDVXUH RI WKH SHUFHLYHG

PAGE 147

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n FDVWH DIILOLDWLRQ JHQGHU DQG DJH 8QWLO WKH DGYHQW RI LQH[SHQVLYH DQG XVHUIULHQGO\ DSSOLFDWLRQV OLNH $QWKURSDF %RUJDWWL f DQDO\VLV RI ODUJH ILHOG VXUYH\ GDWD VHWV ZDV D GLIILFXOW WDVN 7KHVH GDWD DQDO\VLV WRROV DUH

PAGE 148

SDUWLFXODUO\ KHOSIXO WR WKRVH ZKR UHO\ RQ VXUYH\V DV D SULPDU\ PHDQV RI FROOHFWLQJ LQIRUPDWLRQ DERXW SHRSOH WKHLU DWWLWXGHV DQG WKHLU HQYLURQPHQW 7KH\ SURYLGH DQDO\WLFDO SRZHU LQ GHWHFWLQJ SDWWHUQV RI NQRZOHGJH DQG EHKDYLRU ZLWKLQ D VDPSOHG SRSXODWLRQ 6LPLODULW\ 0DWULFHV ,I DQ LQYHVWLJDWRU ZLVKHV WR HYDOXDWH ZKHWKHU LQGLYLGXDOV RU JURXSV RI LQIRUPDQWV KDYH VLPLODU DWWLWXGHV DFURVV D GRPDLQ RI LWHPV HJ IRUHVW SODQW UHVRXUFHVf VKH PXVW ILUVW FRPSLOH LQIRUPDQWE\VXUYH\ LWHP UHVSRQVH GDWD PDWULFHV URZV RI GDWD FRQWDLQLQJ LQIRUPDQWVn MXGJPHQWV DERXW HDFK LWHP LQ WKH GRPDLQ RI LQWHUHVW %HUQDUG f 7KHVH PDWULFHV DUH QRUPDOO\ UHFWDQJXODU EHLQJ VTXDUH ZKHQ WKH QXPEHU RI LQIRUPDQWV H[DFWO\ PDWFKHV WKH QXPEHU RI LWHPV LQ WKH VXUYH\ &HOO YDOXHV RI GDWD PDWULFHV DUH WKHQ FRPSDUHG WR JHQHUDWH V\PPHWULF LQIRUPDQWE\n LQIRUPDQW VLPLODULW\ PDWULFHV 0DWKHPDWLFDO FRHIILFLHQWV LQ WKH FHOOV RI VRFDOOHG DJJUHJDWH VLPLODULW\ RU DJJUHJDWH SUR[LPLW\ PDWULFHV QXPHULFDOO\ LQGLFDWH KRZ VLPLODU RU GLVVLPLODU RQH LQIRUPDQWnV UHVSRQVH SURILOH LV WR HDFK RI WKH RWKHU LQIRUPDQWnV UHVSRQVH SURILOHV )LJXUH LV D VLPLODULW\ PDWUL[ RI VL[ IHPDOH DQG VL[ PDOH +DYLN %UDKPLQVn LGHQWLILFDWLRQ SURILOHV RI PLQRU IRUHVW SODQWV $ GLDJRQDO OLQH RI YDOXHV FURVVHV DQ DJJUHJDWH VLPLODULW\ PDWUL[ IURP WKH WRS OHIW FRUQHU WR WKH ERWWRP ULJKW FRUQHU RI WKH PDWUL[ 7KLV GLDJRQDO LQFOXGHV FHOOV LQ ZKLFK HDFK UHVSRQVH SURILOH LV FRPSDUHG ZLWK LWVHOI

PAGE 149

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f SURGXFHV FOXVWHU GLDJUDPV WKDW DUH DJJORPHUDWLYH LH WKH\ EHJLQ ZLWK PDQ\ VPDOO FOXVWHUV DQG JUDGXDOO\ PHUJH WKHVH LQWR IHZHU DQG IHZHU ELJJHU FOXVWHUV -RKQVRQnV KLHUDUFKLFDO FOXVWHULQJ %RUJDWWL f LV WKH PRVW FRPPRQ FOXVWHULQJ SURFHGXUH DQG LV XVHG LQ $QWKURSDF +& FDQ EH EDVHG RQ VHYHUDO DOJRULWKPV WKH PRVW FRPPRQ EHLQJ f WKH PLQLPXP PHWKRG ZKLFK DJJORPHUDWHV FOXVWHUV DFFRUGLQJ WR WKH

PAGE 150

JUHDWHVW VLPLODULW\ EHWZHHQ DQ\ LWHP LQ RQH FOXVWHU DQG DQ\ LWHP LQ DQRWKHU FOXVWHU DQG f WKH PD[LPXP PHWKRG ZKLFK DJJORPHUDWHV DFFRUGLQJ WR WKH OHDVW VLPLODULW\ EHWZHHQ DQ\ LWHP LQ RQH FOXVWHU DQG DQ\ LWHP LQ DQRWKHU FOXVWHU 7KHVH PHWKRGV SURGXFH VLPLODU KLHUDUFKLHV RI FOXVWHUV ZKHQ GDWD SRVVHVV D FOXVWHUHG VWUXFWXUH 7KH PHWKRGV SURGXFH YDU\LQJ KLHUDUFKLHV DV GDWD EHFRPH OHVV VWUXFWXUHG RU QRQFOXVWHUHG 0XOWLGLPHQVLRQDO 6FDOLQJ 0XOWLGLPHQVLRQDO VFDOLQJ 0'6f LV DQRWKHU DQDO\WLFDO PHWKRG WKDW SURGXFHV D YLVXDO UHSUHVHQWDWLRQ RI VLPLODULWLHV DPRQJ LWHPV LQ D GRPDLQ 0'6 PDWKHPDWLFDOO\ VTXHH]HV LWHPV LQWR D OHDVW VWUHVV RSWLPDO FRQILJXUDWLRQ ZLWKLQ WZRGLPHQVLRQDO FRRUGLQDWH VSDFH ,W GRHV WKLV E\ FDOFXODWLQJ (XFOLGHDQ GLVWDQFHV DPRQJ DOO SDLUV RI LWHPV WKDW KDYH EHHQ DVVLJQHG DUELWUDU\ FRRUGLQDWHV LQ QGLPHQVLRQDO VSDFH 7KH GHULYHG HVWLPDWLRQ PDWUL[ RI VLPLODULWLHV LV WKHQ FRPSDUHG WR WKH RULJLQDO LQSXW DJJUHJDWH SUR[LPLW\ GDWD %RUJDWWL f 7KH JUHDWHU WKH FRUUHVSRQGHQFH EHWZHHQ WKHVH WZR PDWULFHV WKH OHVV WKH VWUHVV IXQFWLRQ 7KH PRUH FRPSOH[ WKH UHODWLRQVKLS EHWZHHQ LWHPV LQ D GRPDLQ EHFRPHV WKH PRUH SRRUO\ 0'6 UHSUHVHQWV WKLV UHODWLRQVKLS LQ WZR GLPHQVLRQV DQG WKH JUHDWHU WKH VWUHVV IXQFWLRQ 6WUHVV YDOXHV RI OHVV WKDQ DUH FRQVLGHUHG DFFHSWDEOH LQ VRFLDO VFLHQFH UHVHDUFK %RUJDWWL ff ,Q RWKHU ZRUGV LQIRUPDQWV PD\ WHQG WR WKLQN DERXW KRZ LWHPV LQ D GRPDLQ DUH UHODWHG RU KRZ VLPLODU WKH\ DUH DFFRUGLQJ WR PRUH WKDQ RQH FULWHULRQ 7KLV VLWXDWLRQ SURGXFHV XQXVXDOO\ ODUJH GLVFUHSDQFLHV LQ KRZ LQIRUPDQWV SRVLWLRQ

PAGE 151

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nV UHVSRQVH SURILOH LV FRPSDUHG WR WKDW RI WKH WHDFKHUnV UHVSRQVH SURILOH RQ WKH VDPH H[DPLQDWLRQ %\ FRPSXWLQJ WKH SURSRUWLRQ RI VWXGHQW MXGJHPHQWV WKDW PDWFK WKH WHDFKHUnV D PHDVXUH RI WKDW VWXGHQWnV FRPSHWHQFH RU NQRZOHGJH FRHIILFLHQW FDQ EH GHULYHG 7R IRUPXODWH WKH SUREDELOLW\ RI WZR LQGLYLGXDO VWXGHQWV JLYLQJ WKH VDPH DQVZHU WR VSHFLILF TXHVWLRQV IRXU SRWHQWLDO RXWFRPHV PXVW EH FRQVLGHUHG

PAGE 152

6WXGHQW $ DQG 6WXGHQW % ERWK NQRZ WKH FRUUHFW DQVZHUVf 6WXGHQW $ NQRZV WKH FRUUHFW DQVZHU ZKLOH 6WXGHQW % JXHVVHV FRUUHFWO\ 6WXGHQW % NQRZV WKH FRUUHFW DQVZHU ZKLOH 6WXGHQW $ JXHVVHV FRUUHFWO\ 1HLWKHU VWXGHQW NQRZV WKH FRUUHFW DQVZHU EXW ERWK JXHVV WKH VDPH DQVZHU UHJDUGOHVV RI ZKHWKHU LW LV FRUUHFW RU LQFRUUHFW :KHQ WKHVH IRXU SUREDELOLWLHV DUH VXPPHG WKH SUREDELOLW\ WKDW 6WXGHQWV $ DQG % JLYH WKH VDPH DQVZHU P$%f LV G$G% G$G%f/ G%OG$f/ G$fOG%f/ LQ ZKLFK G$ S6WXGHQW $ NQRZVf G% S6WXGHQW % NQRZVf G$f S6WXGHQW $ GRHV QRW NQRZf G%f S6WXGHQW % GRHV QRW NQRZf / QXPEHU RI DOWHUQDWLYH FKRLFHV / SD VWXGHQW JXHVVHV FRUUHFWO\f 7KLV H[SUHVVLRQ FDQ EH VLPSOLILHG WR EHFRPH P$% G$G%Of/ 7KXV DJUHHPHQW EHWZHHQ 6WXGHQW $ DQG 6WXGHQW % LV WKH SURGXFW RI WKHLU UHVSHFWLYH FRPSHWHQFLHV %RUJDWWL f 7KUHH DVVXPSWLRQV PXVW EH PHW IRU WKLV PRGHO WR EH UREXVW f WKHUH PXVW EH RQO\ RQH WUXO\ FRUUHFW DQVZHU SHUWDLQLQJ WR HDFK LWHP LQ D GRPDLQ f WKHUH LV LQGHSHQGHQFH DPRQJ WKH MXGJHPHQWV HDFK VWXGHQW PDNHV DERXW LWHPV LQ D GRPDLQ DQG

PAGE 153

f WKHUH LV KRPRJHQHLW\ RU UDQGRP VHOHFWLRQf RI WKH LWHPV LQ WKH GRPDLQ WKDW DUH VHOHFWHG IRU VWXGHQWV WR MXGJH 7KH XWLOLW\ RI WKH FRQVHQVXV PRGHO LV LWV SUHGLFWLYH SRZHU DERXW WKH FRUUHFW DQVZHUV WR DQ H[DPLQDWLRQ RU D IRUHVW SURGXFWV VXUYH\ HYHQ ZKHQ WKHUH LV QR WHDFKHUnV DQVZHU NH\ DYDLODEOH IRU UHIHUHQFH %\ DQDO\]LQJ VWXGHQWVWXGHQW H[DPLQDWLRQ UHVSRQVH VLPLODULWLHV RU LQIRUPDQWLQIRUPDQW VXUYH\ UHVSRQVH VLPLODULWLHVf ERWK WKH OHYHO RI HDFK LQIRUPDQWn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f YDULDELOLW\ LQ LQIRUPDQW UHVSRQVH LV GXH WR GLIIHUHQFHV LQ DPRXQW RI NQRZOHGJH QRW GXH WR GLIIHUHQFHV LQ FXOWXUDO UHDOLW\ LH DOO LQIRUPDQWV DUH PHPEHUV RI WKH VDPH FRPSUHKHQVLYH FXOWXUHf f LQIRUPDQWV UHVSRQG WR VXUYH\ TXHVWLRQV LQGHSHQGHQWO\ RI RWKHU LQIRUPDQWV DQG GR QRW JLYH V\VWHPDWLF UHVSRQVHV LH VXFK DV DOZD\V DQVZHULQJ \HVf DQG f DOO LWHPV WR EH MXGJHG E\ LQIRUPDQWV DUH GUDZQ IURP WKH VDPH FRJQLWLYH GRPDLQ DQG QRW PL[HG ZLWK LWHPV IURP DQ\ RWKHU GRPDLQV

PAGE 154

$V D ILQDO WHVW IRU VLJQLILFDQW FRQWUDVWV LQ LQIRUPDQW UHVSRQVH SURILOHV FRUUHODWLRQ DQDO\VLV ZDV SHUIRUPHG RQ DOO NQRZOHGJH FRHIILFLHQWV SURGXFHG E\ FRQVHQVXV DQDO\VLV XVLQJ 6366 IRU :LQGRZV YHUVLRQ f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f D \HDU ROG ZRPDQ RQH 3RRMDUL 1DLN 3Rf D \HDU ROG ZRPDQ RQH .RGL\D .Rf D \HDU ROG PDQ DQG RQH 6RQDU6KHW 6Rf D \HDU ROG ZRPDQ )LJXUHV DQG VKRZ WKH VDPH SODQW LGHQWLILFDWLRQ UHVSRQVH SURILOHV ZLWK UHVSHFW WR JHQGHU DQG DJH FODVV UHVSHFWLYHO\

PAGE 155

)LJXUH 3ODQW LGHQWLILFDWLRQ E\ FDVWH XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ )LJXUH LQGLFDWHV LQWHUQDO VLPLODULW\ DPRQJ PDOHV DQG IHPDOHV LQ SODQW LGHQWLILFDWLRQ ZLWK WKH H[FHSWLRQ RI WKH IRXU LQIRUPDQWV PHQWLRQHG DERYH 3ODQW LGHQWLILFDWLRQ UHVSRQVH SURILOHV DOVR DSSHDU VLPLODU DFURVV WHQ\HDU DJH FODVVHV DQG 1$DJH XQNQRZQf LQ )LJXUH ,Q 6XPPDU\ 0'6 DQDO\VHV LQGLFDWH JHQHUDO VLPLODULW\ DPRQJ LQIRUPDQWV LQ WKHLU DELOLW\ WR LGHQWLI\ SODQW VSHFLHV IURP SKRWRJUDSKV

PAGE 156

)LJXUH 3ODQW LGHQWLILFDWLRQ E\ JHQGHU XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 157

'LP n n 1 $00$6060L#9L0W$Lƒ$$ƒ0:$:$:$$ƒ00$ƒ6$000$000$000:$0L:L$$0:$W$0$00$ƒ0 'LP 6WUHVV LQ GLPHQVLRQV LV RWWHU LWHURWLRQV )LJXUH 3ODQW LGHQWLILFDWLRQ E\ WHQ\HDU DJH FODVVHV XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ +LHUDUFKLFDO VFDOLQJ RI SODQW LGHQWLILFDWLRQ UHVSRQVH SURILOHV LV VKRZQ LQ )LJXUH ,Q DOO KLHUDUFKLFDO VFDOLQJ ILJXUHV VLQJOH OHWWHUV UHSUHVHQW FDVWHV DV IROORZV K +DYLN %UDKPLQf Q 1DPDGKDUL 1DLNf V 6RQDUf E %DGDJLf 0 0XVOLPf 3 3RRMDUL 1DLNf N .RGL\Df S 3DWJDUf P 0DUDWKDf DQG J 9RNNDOLJD *RZGDf ) LQGLFDWHV IHPDOH ZKLOH 0 LQGLFDWHV PDOH DQG WKH QXPEHUV WKURXJK DUH PDWFKHG WR WKHLU UHVSHFWLYH \HDU DJH FODVVHV

PAGE 158

Q3VNKPSE0EEKVPKT30TNQSQKKKVKNKPKKKKP0 &$67( )))00))))))0)))))))))))))()))0000)000 *(1'(5 1 $*( ;;; ;;; ;;; ;;; ;;;;; ;;; ;;;;;;; ;;; ;;;;;;;;; ;;;; ;;;;;;;;;; ;;;;;;;;;;;;;;; ;;; ;;;;;;;;;;;;;;;; ;;; ;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;; ;;; ;;;;;;;;;;;;;;;;;;;;;;;; ;;; ;;;;;;;;;;;;;;;;;;;;;;;;; ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ ;;; [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ )LJXUH 3ODQW LGHQWLILFDWLRQ E\ FDVWH JHQGHU DQG DJH FODVVHV XVLQJ KLHUDUFKLFDO FOXVWHULQJ )RXU RI VL[ +DYLN %UDKPLQ Kf ZRPHQ VLPLODUO\ LGHQWLILHG ORFDO SODQWV DW WKH OHYHO RU JUHDWHU )RXU RI VL[ +DYLN %UDKPLQ PHQ VLPLODUO\ LGHQWLILHG WKHVH SODQWV DW WKH OHYHO

PAGE 159

RU JUHDWHU 7KLV VXJJHVWV JUHDWHU LQWHUQDO DJUHHPHQW DPRQJ +DYLN %UDKPLQ ZRPHQ DERXW SODQW LGHQWLILFDWLRQ WKDQ DPRQJ +DYLN %UDKPLQ PHQ 7KHUH DUH QR RWKHU QRWDEOH FOXVWHUV ZLWK UHVSHFW WR FDVWH $JH FODVVHV DUH QRW VHSDUDWHO\ FOXVWHUHG DQG WKHUHIRUH GR QRW VHUYH WR GLVWLQJXLVK GLIIHUHQFHV LQ SODQW LGHQWLILFDWLRQ DPRQJ LQIRUPDQWV 7DEOH &RQVHQVXV DQDO\VLV RI LQIRUPDQW LGHQWLILFDWLRQ RI SODQWV E\ FDVWH &216(1686 $1$/<6,6 3VHXGR5HOLDELOLW\ (,*(19$/8(6 )$&725 9$/8( 3(5&(17 &80 b 5$7,2
PAGE 160

DW OHDVW WZR YDU\LQJ SHUFHSWLRQV RI WUXWK DERXW WKH GRPDLQ RI LQWHUHVW 7KH DVVXPSWLRQ RI RQH FXOWXUH LV DOVR QRW VXSSRUWHG ZKHQ FRPSDULQJ SODQW LGHQWLILFDWLRQ NQRZOHGJH IRU ZRPHQ LQIRUPDQWV RQO\ ,Q FRQWUDVW D UDWLR RI WR ZRXOG SURYLGH VWURQJ VXSSRUW IRU WKH DVVXPSWLRQ WKDW LQIRUPDQWV VKDUH WKH VDPH FRPSUHKHQVLYH FXOWXUH LH LQIRUPDQWV GR QRW RULJLQDWH IURP GLIIHUHQW VXEFXOWXUHV %RUJDWWL f 7R VHHN H[SODQDWLRQV IRU GLIIHUHQFHV LQ LQIRUPDQW SODQW LGHQWLILFDWLRQ NQRZOHGJH FRQVHQVXV DQDO\VLV DOVR FRPSDUHV LQIRUPDQW ; VXUYH\ UHVSRQVH GDWD PDWULFHV WR LGHQWLI\ WKH FXOWXUDOO\ FRUUHFW LGHQWLILFDWLRQ RI HDFK SODQW ,W WKHQ UHIHUV WR WKLV FXOWXUDOO\ GHILQHG DQVZHU NH\ LQ HVWLPDWLQJ HDFK LQIRUPDQWnV NQRZOHGJH FRHIILFLHQW IRU SODQW LGHQWLILFDWLRQ ,QIRUPDQW NQRZOHGJH FRHIILFLHQW GDWD IRU ZKLFK KLJKHU GHFLPDO YDOXHV UHSUHVHQW JUHDWHU UHODWLYH NQRZOHGJH LQGLFDWH WKDW FDVWH JHQGHU DQG DJH JURXSV DOO SRVVHVV D UDQJH RI SODQW LGHQWLILFDWLRQ NQRZOHGJH LQWHUQDOO\ VHH 7DEOH f 6LPLODUO\ FRUUHODWLRQ DQDO\VLV RI WKHVH NQRZOHGJH FRHIILFLHQWV ZLWK UHVSHFW WR FDVWH JHQGHU DQG DJH SURGXFHG QR VLJQLILFDQW UHVXOWV 6HYHUDO FDVWHV FRQWDLQ VNLOOHG ILHOG ERWDQLVWV )RU H[DPSOH WKUHH KLJKVFRULQJ PDOH LQIRUPDQWV DQG f ZHUH DOO IRXQG WR EH D\XUYHGLF KHUEDOLVWV &RPSDULVRQ RI 7DEOH DQG )LJXUH GRHV VXJJHVW WKDW .RGL\D 9RNNDOLJD *RZGD DQG PRVW +DYLN %UDKPLQ ZRPHQ LQIRUPDQWV DUH ERWK VLPLODU DQG FRPSHWHQW LQ SODQW LGHQWLILFDWLRQ 7KH WZR .RGL\D ZRPHQ VLPLODUO\ LGHQWLILHG WKH SODQWV DW WKH OHYHO DQG KDG NQRZOHGJH FRHIILFLHQWV RI RU KLJKHU 7KH WZR 9RNNDOLJD

PAGE 161

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

PAGE 162

7DEOH .QRZOHGJH FRHIILFLHQW RI LQIRUPDQWV LQ LGHQWLI\LQJ ORFDO SODQWV ZLWK UHVSHFW WR FDVWH JHQGHU DQG DJH FODVV ,QIRUPDQW  &DVWH *HQGHU $JH .QRZOHGJH &RHIILFLHQW L %D ) %D ) %D ) *R ) *R ) +% ) +% ) +% ) +% ) +% ) +% ) .R ) .R ) 0D ) 0D ) 0X ) 0X ) 11 ) 11 ) 11 ) 3D ) 3D ) 3R ) 3R ) 6R ) 6R ) 6R ) +% a0 +% 0 +% aa0 +% 0 +% 0 +% 0 1$ .R 0 0D 0 0R 0 0X 0 $YHUDJH 6WG 'HY 3ULRULW\ 8VH RI 3ODQWV 0XOWLGLPHQVLRQDO VFDOLQJ KLHUDUFKLFDO FOXVWHULQJ DQG FRQVHQVXV DQDO\VLV DUH QH[W XVHG WR FRPSDUH LQIRUPDQW UHVSRQVH

PAGE 163

SURILOHV IRU WKH SULRULW\ XVH RI UHFRJQL]HG SODQWV EDVHG RQ FDVWH JHQGHU DQG DJH FODVV )LJXUH 3ULRULW\ XVH RI UHFRJQL]HG SODQWV E\ FDVWH XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 164

)LJXUH LQGLFDWHV JUHDWHU VLPLODULW\ DPRQJ +DYLN %UDKPLQ +%f SODQW XVH UHVSRQVH SURILOHV WKDQ ZKHQ FRPSDUHG ZLWK RWKHU FDVWH JURXSV )LJXUH VLPLODUO\ VKRZV D GLVWLQFW FRQWUDVW EHWZHHQ PDOH DQG IHPDOH LQIRUPDQWV ZLWK UHVSHFW WR SULRULW\ XVH RI UHFRJQL]HG SODQWV 0DOHV WHQGHG WR UHSRUW DJULFXOWXUDOO\ RULHQWHG XVHV RI SODQWV IRGGHU PXOFK DQG IRRG )HPDOHV WHQGHG WR UHSRUW KRXVHKROG DQG PHGLFLQDO SODQW XVHV VHH $SSHQGL[ 'f PHGLFLQHV WRQLFV FOHDQVHUV ILEHU DQG WRROV KHOSLQJ WR DFFRXQW IRU WKLV FRQWUDVW 7KHVH FRQWUDVWV DUH VXSSRUWHG E\ FRUUHODWLRQ DQDO\VLV RI WKH SULRULW\ XVH NQRZOHGJH FRHIILFLHQW GDWD VKRZQ LQ 7DEOH +DYLN %UDKPLQV UHSRUWHG GLIIHUHQW SULRULW\ XVHV RI UHFRJQL]HG SODQWV WKDQ GLG WKH RWKHU FDVWHV U S Q 6LPLODUO\ FDVWHV KDYLQJ ORZHU VRFLDO VWDQGLQJ 9RNNDOLJD *RZGD .RGL\D 0DUDWKD 0RJHU 3RRMDUL 1DLN DQG 3DWJDUf MRLQWO\ UHSRUWHG GLIIHUHQW SULRULW\ XVHV WKDQ GLG WKH KLJKHU VWDWXV FDVWHV U S Q )LQDOO\ ZRPHQ UHSRUWHG GLIIHUHQW SULRULW\ XVHV RI UHFRJQL]HG SODQWV WKDQ GLG PHQ U S Q $JH FODVV GLG QRW SURGXFH UHFRJQL]DEOH GLVWLQFWLRQV LQ SULRULW\ XVH RI SODQWV UHVSRQVH SURILOHV

PAGE 165

'LP 0DPDPPDPDPDPDPDPDPD£00$0DPPPDPP£0PDPDPD0£DPPPDP£$0DP£DPPD£ n n 0 0 ) ) 0 8 ) ) ) 000 ) $ ) ) ))) ) ) ) )) ) ) ) ) ) $ 'LP 6WUHVV cQ GLPHQVLRQV LV )LJXUH 3ULRULW\ XVH RI UHFRJQL]HG SODQWV E\ JHQGHU XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 166

7DEOH ,QIRUPDQWVn NQRZOHGJH FRHIILFLHQWV RI WKH SULRULW\ XVH RI UHFRJQL]HG SODQWV E\ FDVWH DQG JHQGHU &DVWH *HQGHU .QRZOHGJH &RHIILFLHQW %D ) %D ) %D ) *R ) *R ) +% ) +% ) +% ) +% ) +% ) +% ) .R ) .R ) 0D ) 0D ) 0X ) 0X ) 11 ) 11 ) 11 ) 3D ) 3D ) 3R ) 3R ) 6R ) 6R ) 6R ) +% 0 +% 0 +% LP +% 0 +% 0 +% 0 .R 0 0D 0 0R 0 0X 0 $YHUDJH 6WG 'HY

PAGE 167

3ODQW 9HUVDWLOLW\ 1XPEHU RI SODQW XVHVf 7KH SHUFHLYHG YHUVDWLOLW\ QXPEHU RI XVHV WDOOLHGf RI UHFRJQL]HG SODQWV LV DQDO\]HG QH[W 7KH KHWHURJHQHRXV FOXVWHU LQ WKH ORZHU OHIW SRUWLRQ RI )LJXUH VXJJHVWV GLIIHUHQFHV EHWZHHQ +DYLN %UDKPLQV DQG DOO RWKHU FDVWHV LQ WDOO\LQJ WKH QXPEHU RI XVHV IRU HDFK UHFRJQL]HG SODQW VSHFLHV 'LP QR f D $ f f .R 3R +% 3D %D 3R 11 3D 0X *R *R 11 0R 0R6R +%.R +% +% 0R 0R 0X +% +% 6R 0X %D 6R +%% +% +% +% 11 $ +% DD££D£DDDDDD$$££D£D£D£DDD£D££DD£DD£D£££DDD£D££DD£££DDD££$DD£££DD£D£D£££D£DDD££D££DD£££DDDDD 6WUHVV LQ GLPHQVLRQV LV 'LP )LJXUH 3ODQW YHUVDWLOLW\ RU QXPEHU RI XVHV WDOOLHG IRU UHFRJQL]HG SODQWV E\ FDVWH XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 168

,QIRUPDQWV SRVLWLRQHG EH\RQG WKH FOXVWHU LQFOXGH WKUHH RI WKH RXWOLHUV QRWHG HDUOLHU RQH 1DPDGKDUL 1DLN 11f D \HDU ROG ZRPDQ RQH 3RRMDUL 1DLN 3Rf D \HDU ROG ZRPDQ RQH .RGL\D .Rf D \HDU ROG PDQ SOXV RQH +DYLN %UDKPLQ +%f D \HDU ROG PDQ DQG D GLIIHUHQW 6RQDU 6Rf D UDWKHU WKDQ D \HDU ROG ZRPDQ )LJXUH 3ODQW YHUVDWLOLW\ RU QXPEHU RI XVHV WDOOLHG IRU UHFRJQL]HG SODQWV E\ JHQGHU XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 169

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

PAGE 170

7DEOH ,QIRUPDQWVn NQRZOHGJH FRHIILFLHQWV RI YHUVDWLOLW\ RI UHFRJQL]HG SODQWV E\ FDVWH JHQGHU DQG DJH &DVWH *HQGHU $JH .QRZOHGJH &RHIILFLHQW %D ) %D ) %D ) *R ) *R ) +% ) +% ) +% ) +% ) +% ) +% ) .R ) .R ) 0D ) 0D ) 0X ) 0X ) 11 ) 11 ) 11 ) 3D ) 3D ) 3R ) 3R ) 6R ) 6R ) 6R ) +% 0 +% 0 +% 0 +% 0 +% 0 +% 0 1$ .R 0 0D 0 0R _0 0X 0 $YHUDJH 6WG 'HY +DYLN %UDKPLQV UHSRUWHG IHZHU XVHV RI UHFRJQL]HG SODQWV WKDQ GLG WKH RWKHU FDVWHV U S Q &DVWHV KDYLQJ ORZHU VRFLDO VWDQGLQJ 9RNNDOLJD *RZGD .RGL\D 0DUDWKD 0RJHU

PAGE 171

3RRMDUL 1DLN DQG 3DWJDUf MRLQWO\ UHSRUWHG PRUH XVHV RI SODQWV WKDQ GLG WKH KLJKHU VWDWXV FDVWHV U S Q :RPHQ LQIRUPDQWV UHSRUWHG PRUH XVHV RI UHFRJQL]HG SODQWV WKDQ GLG WKH PHQ U S Q )LJXUH LQGLFDWHV WKDW IRU +DYLN %UDKPLQV RQO\ IHPDOHVn SODQW YHUVDWLOLW\ UHVSRQVH SURILOHV DUH PRUH WLJKWO\ FOXVWHUHG DQG WKHUHIRUH PRUH VLPLODU WKDQ WKRVH RI PDOHV )LJXUH 3ODQW YHUVDWLOLW\ RU QXPEHU RI XVHV WDOOLHG IRU UHFRJQL]HG SODQWV E\ JHQGHU IRU +DYLN %UDKPLQV XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 172

+LHUDUFKLFDO FOXVWHULQJ DQDO\VLV LQ )LJXUH IXUWKHU VXSSRUWV WKH QRWLRQ RI LQWHUQDO VLPLODULW\ DPRQJ +DYLN %UDKPLQ IHPDOH UHVSRQVH SURILOHV IRU SODQW YHUVDWLOLW\ RU JUHDWHUf ZKHQ FRPSDUHG WR +DYLN %UDKPLQ PDOHV RU JUHDWHUf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

PAGE 173

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f LQ WZR GLPHQVLRQV LV WRR JUHDW WR ZDUUDQW FRQILGHQFH 0XOWLGLPHQVLRQDO VFDOLQJ RI SODQW XVHIXOQHVV LQ WKUHH GLPHQVLRQV DPSOLILHV WKHVH GLIIHUHQFHV ZKLOH RQO\ PRGHUDWHO\ UHGXFLQJ VWUHVV f $QDORJRXV GLIIHUHQFHV EHWZHHQ PDOHV DQG IHPDOHV DUH REWDLQHG ZKHQ FRPSDULQJ SHUFHLYHG SODQW XVHIXOQHVV SURILOHV E\ JHQGHU VHH )LJXUH f WKRXJK VWUHVV YDOXHV UHPDLQ WKH VDPH $JH FODVV GLG QRW SURGXFH UHFRJQL]DEOH GLVWLQFWLRQV LQ

PAGE 174

SHUFHLYHG SODQW XVHIXOQHVV UHVSRQVH SURILOHV 0XOWLGLPHQVLRQDO VFDOLQJ UHVXOWV RI SODQW XVHIXOQHVV UHVSRQVH GDWD DUH E\ WKHPVHOYHV LQFRQFOXVLYH 'LP £DPDDDP£D£0PDDDD££0£DDD£0D£DDDPDD£DDDD£DD£DDPDDDDDDDDP $ f %R .R $ 3R %R $ +% 3D 3R%D ‘ 6R .R .R 0R 11 *R 6R 1103R r +% 0X *R 0X $ +% +% 0D+% 0X ++%+% +% +% +% 0R 11 6R f +% $ DD£DDDD££D£D£DD£D£DD£DD£$D£DD£DDDDD£DDDDDD£D£DDD£DDD£DDDDD£D$£D£ 'LP 6WUHVV LQ GLPHQVLRQV LV )LJXUH 3HUFHLYHG XVHIXOQHVV RI UHFRJQL]HG SODQWV E\ FDVWH XVLQJ PXOWLGLPHQVLRQDO VFDOLQJ

PAGE 175

'LP E 3 0U ) ) 3 ) )f§ )) ) ) )) ) L 0 ) )0 ) ) 0 ) 0 ) 0 0f§ ) ) )0 ) ) 0 0f§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

PAGE 176

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b 5$7,2

PAGE 177

7DEOH .QRZOHGJH FRHIILFLHQWV RI SHUFHLYHG XVHIXOQHVV RI UHFRJQL]HG SODQWV E\ FDVWH DQG JHQGHU &DVWH *HQGHU .QRZOHGJH &RHIILFLHQW %D ) %D ) %D ) *R ) *R ) +% ) +% ) +% ) +% ) +% ) +% ) .R ) .R ) 0D ) 0D ) 0X ) 0X ) 11 ) 11 ) 11 ) 3D ) 3D ) 3R ) 3R ) 6R ) 6R ) 6R ) +% 0 +% 0 +% 0 +% 0 +% 0 +% 0 .R 0 0D 0 0R 0 0X 0 $YHUDJH 6WG 'HY

PAGE 178

5HFRJQL]HG SODQWV UHFHLYLQJ WKH KLJKHVW LQIRUPDQW XVHIXOQHVV VFRUHV DQG WKHLU FRQVHTXHQW UDQNLQJV DUH SUHVHQWHG LQ 7DEOH 7DEOH 5DQNLQJV DQG XVHIXOQHVV VFRUHV ORZHU VFRUH LQGLFDWHV JUHDWHU XVHIXOQHVVf RI WKH PRVW XVHIXO VXUYH\ SODQWV DFFRUGLQJ WR VXUYH\ LQIRUPDQWV 3ODQW QDPH 5DQNLQJ 6FRUH %DPEXVD DUXQGLQDFHDH 5HW]f :LOOG L (PEOLFD RIILFLDQDOLV *DHUWQHU *DUFLQLD LQGLFD 7KRXDUVf &KRLV\ 6\]\JLXP FXPLQL /f 6NHHOV $UWRFDUSXV LQWHJULIROLXV / I 3KHRQL[ VLOYHVWULV /f 5R[E 3KRHQL[ DFDXOLVf 'LOOHQLD SHQWDJ\QD &DU\RWD XUHQV / &DUH\D DUEUHD 5R[E 0\WULJ\QH SDUYLIORUD +RODUUKHQD DQWLG\VHQWHULFD 5R[E H[ )OHPLQJf &LQQDPRPXP ]H\ODQLFXP %OXPH 7HUPLQDOLD FHEXOD *DHUWQHUf 5HW] +HPLGHVPXV LQGLFXV /f 6FKXOW &DO\FRSWHULV IORULEXQGD 5R[E 6DSLQGXV HPDUJLQDWD / $SRURVD OLQGOH\DQQD $QDFDUGLXP RFFLGHQWDOH / $QDPLUWD SDQLFXODWD &ROHEU $UWRFDUSXV ODFXFKD 'XUDQWD SOXPHULD $OEL]LD $PDUD %LRYLQ 6HPHFDUSXV DQDFDUGLXP / I 5DQGLD GXPHWRUXP /DPN $HUXD ODQDWD -XVV &DULVVD FDUDQGDV / %XFKDQDQLD ODWLIROLD 5R[E 2QO\ RI WKHVH PRVW XVHIXO SODQW VSHFLHV DUH UHSRUWHG WR EH ORFDOO\ DEXQGDQW +RODUUKHQD DQWLG\VHQWHULFD &DO\FRSWHULV

PAGE 179

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
PAGE 180

7DEOH .QRZOHGJH FRHIILFLHQWV RI SHUFHLYHG ORFDO DEXQGDQFH RI UHFRJQL]HG SODQW VSHFLHV E\ FDVWH JHQGHU DQG DJH &DVWH *HQGHU $JH &ODVV .QRZOHGJH &RHIILFLHQW %D ) %D ) %D ) *R ) *R ) +% ) +% ) +% ) +% ) +% ) +% ) .R ) .R ) 0D ) 0D ) 0X ) 0X ) 11 ) 11 ) 11 ) 3D ) L 3D ) 3R ) 3R ) 6R ) 6R ) 6R ) +% 0 +% 0 +% 0 +% 0 +% 0 +% 0 1$ .R 0 0D 0 0R 0 0X 0 $YHUDJH 6WG 'HY

PAGE 181

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

PAGE 182

SURGXFWV IRU VXEVLVWHQFH 7KH +DYLN %UDKPLQ PHQ LQWHUYLHZHG NQHZ OHVV DERXW WKH PXOWLSOH XVHV RI UHFRJQL]HG SODQWV WKDQ RWKHU LQIRUPDQWV ,QIRUPDQWV IURP WKH VL[ ORZHU VWDWXV FDVWHV NQHZ PRUH DERXW WKH PXOWLSOH XVHV RI UHFRJQL]HG SODQWV WKDQ LQIRUPDQWV IURP WKH VL[ KLJKHU VWDWXV FDVWHV 7KDW LQIRUPDQWV IURP KLJKHU VWDWXV FDVWHV RZQ PRUH VSLFH JDUGHQV DQGRU OLYHVWRFN KHOSV H[SODLQ ZK\ WKHLU SHUFHSWLRQV DERXW SODQW XVHV LV PRUH OLPLWHG DQG VSHFLILF ,QIRUPDQWV OHVV WKDQ \HDUV RI DJH DJUHHG DPRQJ WKHPVHOYHV DQG ZHUH PRUH NQRZOHGJHDEOH DERXW WKH ORFDO DEXQGDQFH RI UHFRJQL]HG SODQWV WKDQ ZHUH ROGHU LQIRUPDQWV 7KH IDFW WKDW SHUFHQW RI LQIRUPDQWV ZHUH OHVV WKDQ \HDUV ROG PD\ KDYH ZHLJKWHG FROOHFWLYH NQRZOHGJH DERXW SODQW DEXQGDQFH LQ WKH GLUHFWLRQ RI WKHVH LQIRUPDQWV ,Q DOO RWKHU PHDVXUHV RI SODQW NQRZOHGJH DQG XVH DJH FODVV DIILOLDWLRQ GLG QRW GLVWLQJXLVK GLIIHUHQFHV DPRQJ LQIRUPDQWV 7HUNDQDKDOOL YLOODJHUV DSSDUHQWO\ OHDUQ DERXW WKH GLVWULEXWLRQ RI ORFDO IRUHVW SODQWV IURP DQ HDUO\ DJH 1RQH RI WKH LQIRUPDQWV IHOW WKDW PXOWLSOH VSHFLHV SODQWDWLRQV 063Vf DUH DQ LPSURYHPHQW RYHU WKH PLQRU IRUHVWV WKH\ UHSODFH
PAGE 183

JDWKHULQJ $OO LQIRUPDQWV SODFHG WKH JUHDWHVW HPSKDVLV RQ PLQRU IRUHVWV DV VRXUFHV RI ZRRG IXHO H[FHSW IHPDOH 0XVOLP LQIRUPDQWV ZKR EX\ ZRRG IXHO IURP WKH ORFDO IRUHVW GHSDUWPHQW GHSRW ,QIRUPDQWV DOVR ZLVKHG WR UHWDLQ DFFHVV WR PLQRU IRUHVWVn IXHO ZRRG UHVRXUFHV LQ WKH IXWXUH 6SLFH JDUGHQ RZQHUV RULJLQDWLQJ H[FOXVLYHO\ IURP WKH IRXU PRVW DIIOXHQW FDVWHV HVWHHPHG PLQRU IRUHVWV SULPDULO\ DV PXOFK UHSRVLWRULHV 2QO\ +DYLN %UDKPLQV DQG RQH 1DPDGKDUL 1DLN WKDW KDYH DFFHVV WR EHWWD IRUHVWV IRU PXOFK FROOHFWLRQ GR QRW UHO\ RQ PLQRU IRUHVWV IRU PXOFK %UDKPLQLFDO LQIRUPDQWV RI PRGHVW PHDQV OLNH 6RQDU DQG /LQJD\DW KRZHYHU UHSRUWHG FROOHFWLQJ D YDULHW\ RI IUXLWV ILEHU DQG IXQJL IURP PLQRU IRUHVWV

PAGE 184

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

PAGE 185

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f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
PAGE 186

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f \LHOGV WR WKH XVH ZLVKHV RI DQRWKHU HJ ZRRG IXHO JDWKHUHUVf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

PAGE 187

8VLQJ 6SDWLDO ,QIRUPDWLRQ WR &DWDO\]H /RFDO 3DUWLFLSDWLRQ ,Q ,QGLD FRQYHUVLRQ RI IRUHVW ODQGV RU FKDQJHV LQ WKHLU RZQHUVKLS DUH SURKLELWHG E\ WKH ,QGLDQ FRQVWLWXWLRQ H[FHSW IRU RFFDVLRQDO UHJXODUL]DWLRQ RI IRUHVW HQFURDFKPHQW PHQWLRQHG HDUOLHU 7KHUHIRUH LI FKDQJHV LQ DFFHVV WR IRUHVWV DUH WR RFFXU DWWHQWLRQ PXVW IRFXV RQ OLPLWHG WUDQVIHUV RI IRUHVW UHVRXUFH WHQXUH WR ORFDO SHRSOH 7R GR WKLV SURSHUO\ UHTXLUHV GHWDLOHG NQRZOHGJH RI ZKHUH VSHFLILF UHVRXUFHV DUH ZKR LV XVLQJ WKHP DQG WKH LQWHQVLW\ RI XVH SUHVVXUH RQ WKHP 0LQRU IRUHVWV UHSUHVHQW WKH DUHQD RI JUHDWHVW SRWHQWLDO IRU DOORFDWLRQ DQG ORFDO VKDULQJ RI UHVRXUFH WHQXUH VLQFH WKLV LV ZKHUH RYHUODS LQ XVH DJHQGDV LV PRVW SURQRXQFHG ERWK EHWZHHQ IRUHVWHUV DQG YLOODJHUV DQG EHWZHHQ YLOODJHUV WKHPVHOYHV 0LQRU IRUHVWV DOVR KDYH WKH JUHDWHVW SRWHQWLDO WR LQFUHDVH \LHOGV RI IRUHVW SURGXFWV VLQFH WKHLU \LHOG SRWHQWLDO LV WKH PRVW XQGHUXWLOL]HG RI DOO IRUHVW W\SHV LQ .DUQDWDND $W WKH KDPOHW OHYHO IRUHVW XVH SULRULWLHV RI GLIIHUHQW FDVWH JHQGHU RU RWKHU VRFLRHFRQRPLF JURXSV FDQ EH JDWKHUHG DQG SUHVHQWHG VSDWLDOO\ DW OLWWOH H[SHQVH $ IDFLOLWDWRUJXLGHG ZRUNVKRS LQYROYLQJ HYHU\ IDPLO\ LQ RSHQ GLVFXVVLRQ DQG SODQQLQJ DERXW WKH IXWXUH GHYHORSPHQW DQG XVH RI ORFDO IRUHVW UHVRXUFHV ZRXOG EH DQ HIILFLHQW PHDQV WR FROOHFW SUHVHQW DQG DQDO\]H VXFK LQIRUPDWLRQ 8VH RI *HRJUDSKLF ,QIRUPDWLRQ 6\VWHP *,6f WHFKQLTXHV ZKHWKHU YLD KDQGGUDZQ DFHWDWH PDSV GLJLWDO GDWD EDVHV RU ERWK ZRXOG EH WKH KHDUW RI WKH IRUHVW PDQDJHPHQW ZRUNVKRS SURFHVV 6XFK VSDWLDO GDWD FRXOG EH FDVH VSHFLILF DQG HDVLO\ XSGDWHG WR NHHS LPSURYLQJ LWV DFFXUDF\ DQG XWLOLW\ 0RVW

PAGE 188

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f ,Q FRPPXQLW\EDVHG ZRUNVKRS H[HUFLVHV ORFDO UHVRXUFH PDSV JHQHUDWHG IURP ,'5,6, FRXOG EH XVHG DV FHQWHUSLHFHV IRU MRLQW QDWXUDO UHVRXUFH PDQDJHPHQW SODQQLQJ DPRQJ DOO ZRUNVKRS

PAGE 189

SDUWLFLSDQWV $OO DFWRUV ZKR KDYH DQ LPSDFW RQ ORFDO UHVRXUFHV LQFOXGLQJ ORFDO SHRSOH DQG JRYHUQPHQW GHSDUWPHQW VWDII ZRXOG EHFRPH FRQWULEXWRUV WR WKH FUHDWLRQ RI PDS RYHUOD\V RI VSDWLDO LQIRUPDWLRQ DERXW D FRPPXQLW\n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

PAGE 190

FUHDWH WKHLU FDQGLGDWH VLWH RYHUOD\V LQ SDUWLFLSDQW LQWHUHVW JURXSV DQG WKHQ SUHVHQW WKHLU VHOHFWLRQV WR WKH HQWLUH ZRUNVKRS LQ VSDWLDO IRUP 7KLV ZRXOG VSXU GHEDWH RYHU D VLOYLFXOWXUDO SUHVFULSWLRQ IRU ORFDO IRUHVWV LQ VSDFH DQG LQ WLPH :KHWKHU UHVXOWLQJ PDQDJHPHQW GHFLVLRQV ZRXOG EH JRRG RU EDG GHSHQG HQWLUHO\ XSRQ WKH DLPV DQG SHUVSHFWLYHV RI WKRVH ZKR PDQDJH RU LQ VRPH ZD\ GHSHQG RQ IRUHVW UHVRXUFHV 9DOH f ,I WKH ZLVKHV RI DOO ZRUNVKRS SDUWLFLSDQWV DUH DGHTXDWHO\ DGGUHVVHG WKHQ MRLQW GHFLVLRQV FRXOG EH GHVFULEHG DV JRRG GHFLVLRQV

PAGE 191

$33(1',; $ %$6(/,1( 6859(< 2) +286(+2/'6 7(5(.$1$+$//, 9,//$*( 1257+ .$1$5$ ',675,&7 .$51$7$.$ ,1',$ f '$7( f /2&$7,21 +DPOHW ZLWKLQ YLOODJH f 1$0( f *(1'(5 f $*( f &$67( f 2&&83$7,21 f 0$5,7$/ 67$786 f +286(+2/' ,1)250$7,21 DJH JURXS JHQGHU 0$/(6 OHVV WKDQ \HDUV ROG \HDUV ROG PRUH WKDQ \HDUV ROG OLWHUDF\ E\ JHQGHU f +286( 7<3( f 522) 7<3( f $118$/ )$0,/< ,1&20( ,QGLDQ 5Vf OHVV WKDQ 5V 86 f 5V 5V 5V PRUH WKDQ 5V DQG OLWHUDF\ )(0$/(6

PAGE 192

$SSHQGL[ $f§FRQWLQXHG f /,9(672&. 2:1(56+,3 W\SH DQG TXDQWLW\f f /$1'2:1(56+,3 W\SH TXDQWLW\ DQG RZQHUVKLS VWDWXVf f +286( /2&$7,21 f )25(67 352'8&76 3(5621$//< &2//(&7(' %< 5(6321'(17 W\SH TXDQWLW\ PRQWK RI FROOHFWLRQ W\SH RI IRUHVW ZKHUH FROOHFWHGf f )25(67 352'8&7 86( VXEVLVWHQFH RU FRPPHUFLDO XVHf f )25(67 352'8&76 75$',7,21$//< &2//(&7(' %< /2&$/ 3(23/( UHVSRQGHQWnV RSLQLRQf f ,) 68&+ 352'8&76 $5( /2&$//< 6&$5&( :+< +$6 68&+ 6&$5&,7< 2&&855(' UHVSRQGHQWnV RSLQLRQf" f :+$7 %(1(),76f '2 <28 $1' <285 )$0,/< (1-2< )520 5(&(17/< 3/$17(' 08/7,3/( 63(&,(6 3/$17$7,216 063Vf" f :+$7 ',6%(1(),76 '2 <28 $1' <285 )$0,/< (;3(5,(1&( )520 5(&(17/< 3/$17(' 063V" f $5( 063V $1 ,03529(0(17 29(5 7+( 0,125 )25(676 7+$7 7+(< 5(3/$&(" :+< 25 :+< 127" f ,6 7+(5( $1 ,1&5(6,1* 1((' )25 )25(676 ,1 $1' $5281' <285 9,//$*(" ,) 62 :+<" f :+$7 75(( 63(&,(6 :28/' <28 /,.( 72 +$9( 3/$17(' ,1 7+( 1(: )25(676063V" f :+$7 ,6 <285 23,1,21 2) 7+( %(67 0(7+2' )25 &5($7,1* 7+( .,1' 2) 1(: )25(676 <28 '(6,5(" ORFDWLRQ DQG PHWKRGf

PAGE 193

$33(1',; % 3/$17 63(&,(6 ,1&/8'(' ,1 $ 0,125 )25(67 9(*(7$7,21 86( 6859(< 1257+ .$1$5$ ',675,&7 .$51$7$.$ ,1',$ 6&,(17,),& 1$0( )$0,/< .$11$'$ 1$0( +HPLGHVPXV LQGLFXV /f 6FKXOW 3HULSORFDFHDH KDDOXEDOOL $QDPLUWD SDQLFXODWD &ROHEU 0HQLVSHUPDFHDH DDGDHPXQQL 5K\QFKRVW\OLV VS 2UFKLGDFHDH VLWD\GXQGDH %RUUHULD KLVSLGD 5XELDFHDH MHUUODH VRSSX &DVVLD VRSKHUD / )DERLGHDH \HODYDULJDH NXGL &RORFFDVLD HVFXOHQWD /f 6FKRWW $UDFHDH NDHVD &RORFFDVLD HVFXOHQWD YDU EODFN $UDFHDH NDUH\ NDHVD $PDU\OOLV ]H\ODQLFXP / $PDU\OOLGDFHDH LVDPXQJHUL &ROHXV PDODEDULFXV %HQWK /DPLDFHDH VDPEDDUD VRSSX 3RO\JRQXP DYLFXODUH / 3RO\JRQDFHDH NDQQDHNXGL (OHSKDQWRSXV VFDEHU / $VWHUDFHDH QDHODJRQDJDOX 7\ORSKRUD DSRVLQDWD : t $ $VFOHSLDGDFHDH SXQ\DOOD +LELVFXV URVD VLQHQVLV / 0DOYDFHDH ELOL GDDVDYDDOD *UDSWRSK\OOXP SLFWXP / f *ULII 5XELDFHDH GDDVDSXWUDH %XOERSK\OOXP VS 2UFKLGDFHDH LPDUDEDDODHNDD\L *DUGHQLD JXPPLIHUD / I 5XELDFHDH ELNNDH ,[RUD JUDQGLIORUD 5XELDFHDH ELOLKRODHDDVDZDDOD ,[RUD JUDQGLIORUD YDU GDUN 5XELDFHDH NHPSX KRODHGDDVDZDDOD $HUXD ODQDWD -XVV $PDUDQWDFHDH KRZODSDWOL 9LWH[ QHJXQGR / 9HUEHQDFHDH ODNNL 'XUDQWD SOXPHULD 9HUEHQDFHDH SD\WDH PXOOX &DORWURSLV JLJDQWHD /f 'U\DQGHU H[ $LWQ I $VFOHSLDGDFHDH HNNDH /DZVRQLD DOED / YDUUXEUD /\WKUDFHDH PXGXUXQJJLKHQQD 5DQGLD GXPHWRUXP /DPN 5XELDFHDH NDDUDH 3DQGDQXV RGRUDWLVVLPXV 5R[E 3DQGDQDFHDH N\DGLJDH 3DQGDQXV IDVFLFXODULV 3DQGDQDFHDH PXQGLJDH $GKDWRGD YDVLFD 1HHV $FDQWKDFHDH EDHVDDOD 6SRQGLDV PDQJLIHUD / $QDFDUGLDFHDH DPDWDHNDDL )OXJJHD YLURVD :LOOG (XSKRUELDFHDH VDQDHOD\ &DULVVD FDUDQGDV / $SRF\QDFHDH NDYDOL &DO\FRSWHULV IORULEXQGD 5R[E &RPEUHWDFHDH NDPXVDOX +RODUUKHQD DQWLG\VHQWHULFD 5R[E H[ )OHPLQJf :DOOLFK H[ $ 'F $SRF\QDFHDH NRGDVD

PAGE 194

$SSHQGL[ %f§FRQWLQXHG 6&,(17,),& 1$0( )$0,/< .$11$'$ 1$0( %DPEXVD DUXQGLQDFHDH 5HW]f :LOOG 3RDFHDH EHHGHUXEDPERR $QDFDUGLXP RFFLGHQWDOH / $QDFDUGLDFHDH JDHUX 3KHRQL[ VLOYHVWULV /f 5R[E 3KRHQL[ DFDXOLVf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f 6NHHOV (XJHQLD MDPERODQXP /DPf 0\UWDFHDH NDQQDHUDOX 7HUPLQDOLD FHEXOD *DHUWQHUf 5HW] &RPEUHWDFHDH DQDODH NDD\LKLUGD &LQQDPRPXP ]H\ODQLFXP %OXPH /DXUDFHDH GDOFKLQL 6DSLQGXV HPDUJLQDWD / 6DSLQGDFHDH DQWXDODK &DUH\D DUEUHD 5R[E /HWK\FLGDFHDH NDYDOXNDYXOL $UWRFDUSXV ODFXFKD 0RUDFHDH DWODNDH 6WU\FKQRV QX[YRPLFD / /RJDQLDFHDH NDDVDUDNDD 0\WULJ\QH SDUYLIORUD 5XELDFHDH NDOXP %XFKDQDQLD ODWLIROLD 5R[E $QDFDUGLDFHDH QXUXNDOX *DUFLQLD LQGLFD 7KRXDUVf &KRLV\ &OXVLDFHDH PXUXJDOX 9DWHULD LQGLFD / 'LSWHURFDUSDFHDH GXXSD 'LOOHQLD SHQWDFM\QD 'LOOHQLDFHDH NDQDJDOOX 0LFKHOLD FKHPSDFD / 0DJQROLDFHDH VDPSLJDH &DVVLD ILVWXOD / &DHVDOSLQRLGHDH NDNNDD\L $OEL]LD $PDUD %LRYLQ 0LPRVRLGHDH ELONXPEL $UWRFDUSXV LQWHJULIROLXV / I 0RUDFHDH KDODVX $HJOH PDUPHORV /f &RUU 6HUU 5XWDFHDH SXWUDHELOYDSXWUDH &DVXDULQD HTXLVHWLIROLD / &DVXDULQDFHDH JDOOL PDUD $FDFLD DXULFXOLIRUPLV &XQQ ([ %HQWK 0LPRVRLGHDH $FDFLD 6RXUFH IRU YHULILFDWLRQ RI ODWLQ ELQRPLDOV 86'$ $JULFXOWXUH 5HVHDUFK 6HUYLFH +DQGERRN

PAGE 195

$33(1',; & 0,125 )25(67 352'8&7 86( 35()(5(1&( 6859(< 7(5(.$1$+$//, 9,//$*( 1257+ .$1$5$ .$51$7$.$ ,1',$ 1$0( 0$/()(0$/( $*( &$67( +$0/(7 86,1* ; 3+2726 2) /2&$//< ,'(17,),(' 3/$17 63(&,(6 f :+,&+ 2) 7+(6( 3+272*5$3+(' 3/$176 &$1 <28 ,'(17,)<" f 2) 7+( 3/$176 7+$7 <28 ,'(17,),(' &$1 <28 7(// +2: 7+(< $5( 86('" f 3/$&( ($&+ 6(/(&7(' 3+272 21 21( 2) 7+( $5($6 0$5.(' 9(5< 86()8/ 86()8/ 6/,*+7/< 86()8/ 127 86()8/ +$50)8/ '21n7 .12: f 3/$&( ($&+ 6(/(&7(' 3+272 21 21( 2) 7+( $5($6 0$5.(' 9(5< &20021 &20021 5$5( 9(5< 5$5( 1(9(5 )281' f 5(6(/(&7 $1< 2) 7+( 6(/(&7(' 3+27263/$176 7+$7 <28 &2//(&7 ,1 0,125 )25(67 0)f $5($6 f 3/($6( 5$1. 7+( 6(/(&7(' 3+27263/$176 ,1 25'(5 2) 7+(,5 86()8/1(66 72 <28 7KH LQWHUYLHZHU VKRXOG VD\ WKDW 86()8/1(66 PHDQV WKH SURYLVLRQ RI EDVLF SHUVRQDO DQG IDPLO\ QHHGV $1' DOVR LQFRPH JHQHUDWLRQ LI VXFK LV WKH FDVHf f 2) 7+( 7(1 0267 86()8/ 3/$176 +2: 08&+ 2) ($&+ '2 <28 &2//(&7 ($&+ <($5" f 5(3($7 48(67,216 )25 6233,1$ %(77$ 6%f )25(67 $5($6 ,) $335235,$7(

PAGE 196

$33(1',; /2&$/ 86(6 2) 3/$17 63(&,(6 7(5(.$1$+$//, 9,//$*( 1257+ .$1$5$ .$51$7$.$ ,1',$ 63(&,(6 1$0( /2&$/ 86(6f DQG 38%/,6+(''2&80(17(' 86(6f +HPLGHVPXV LQGLFXV /f 6FKXOW 5RRW H[WUDFW PL[HG ZLWK PLON VHUYHV DV LQIDQW JURZWK WRQLF ([WUDFW LV WDNHQ GXULQJ SUHJQDQF\ WR LQFUHDVH PLON SURGXFWLRQ 5RRW H[WUDFW WUHDWV ORVV RI DSSHWLWH G\VSHSVLD IHYHU VNLQ GLVHDVHV UHODWHG WR V\SKLOLV ERZHO GLVRUGHUV OHXFRUUKRHD VRIW WLVVXH LQIHFWLRQV DQG FKURQLF FRXJK 5RRW SDVWH LV DSSOLHG WR VZHOOLQJV DQG UKHXPDWLF MRLQWVf $QDPLUWD SDQLFXODWD &ROHEU &RFFXOXV VXEHURVXV : t $f /HDYHV SURGXFH DQ HGLEOH GU\ FXUU\ 5RRW H[WUDFW SDVWH WUHDWV FKLOGUHQnV VWRPDFK ZRUPV VHUYHV DV D EORRG FOHDQVLQJ DJHQW DQG DOVR UHGXFHV ERG\ KHDWVZHDWV /HDI MXLFH KHOSV H[WUDFW JXQLHD ZRUPV 'ULHG IUXLW LV D SRZHUIXO QDUFRWLF %HUU\ RLQWPHQW WUHDWV VNLQ IXQJLLQIHFWLRQV 3XOYHUL]HG EHUULHV DUH XVHG DV DQ LQVHFWLFLGH DQG ILVK SRLVRQ 6HHGV FRQWDLQ SLFURWR[LQ IRU WUHDWPHQW RI FRQYXOVLRQV DQG SDUDO\VLVf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f &RORFFDVLD HVFXOHQWD /f 6FKRWW 6DOYH WUHDWV VZHOOLQJ LQ FDWWOH 6DOYH HDVHV WKH H[WUDFWLRQ RI WKRUQV IURP VNLQ 6WDUFK IRRG VRXUFH

PAGE 197

$SSHQGL[ 'f§FRQWLQXHG &RORFFDVLD HVFXOHQWD YDU EODFN 6WDUFK IRRG VRXUFH $PDU\OOLV ]H\ODQLFXP / /HDI MXLFH WUHDWV XQFRQWUROOHG VZHDWLQJORVV RI ERG\ IOXLGV -XLFH IURP OHDI SXOS IXQFWLRQV DV DQ HPHWLF %UXLVHG KRW OHDYHV FRDWHG ZLWK PXVWDUG RLO WUHDW LQIODPHG MRLQWV DQG VSUDLQV 3XOS MXLFH DOVR WUHDWV HDUDFKHf &ROHXV PDODEDULFXV %HQWK *UHHQV DUH GULHG RQ FRDOV DQG WKHQ PL[HG ZLWK KRQH\ WR WUHDW FROGVLQIOXHQ]D WR UHGXFH WKURDW SKOHJP VRRWKH VRUH WKURDWV DQG WR DLG GLJHVWLRQ )RRG VRXUFH 3RO\JRQXP DYLFXODUH / 'HFRFWLRQ LV PL[HG ZLWK ULFH DQG EXWWHU WR LPSURYH GLJHVWLRQ DQG WR WUHDW G\VHQWHU\ (OHSKDQWRSXV VFDEHU / &ORWWLQJ DJHQW LQ SODVWHUV WKDW VWRSV FXWDQHRXV EOHHGLQJ IRU FDWWOH DOVRf 7UHDWV HDU DFKH DQG IOXLG GUDLQDJH IURP HDU LQIHFWLRQV /HDYHV ERLOHG LQ FRFRQXW RLO WUHDW VNLQ HF]HPD DQG XOFHUV 6KRRW H[WUDFW KDV DQWLELRWLF SURSHUWLHV 5RRW DQG OHDI GHFRFWLRQ WUHDWV GLDUUKRHD G\VHQWHU\ DQG ZKHQ WDNHQ ZLWK FXPLQ DQG EXWWHUPLON WUHDWV XUHWKUDO GLVFKDUJHV 5RRW H[WUDFW VWRSV YRPLWLQJ 3RZGHUHG URRW DQG SHSSHU UHGXFHV WRRWKDFKHf 7\ORSKRUD DSRVLQDWD : t $ *LYHQ ZLWK PLON WR FKLOGUHQ WR WUHDW FRQVWLSDWLRQ *LYHQ ZLWK KRQH\ WR FKLOGUHQ WR WUHDW FROGV UHGXFH PXFRXV DQG WR WUHDW DVWKPD 'ULHG OHDYHV DQG URRWV IXQFWLRQ DV H[SHFWRUDQW GLDSKRUHWLF HPHWLF DQG FDWKDUWLFf +LELVFXV URVD VLQHQVLV / )ORZHU LV PL[HG ZLWK ZDWHU WR UHGXFH PXFRXV GXULQJ FROGV DQG ORZHU ERG\ WHPSHUDWXUH GXH WR IHYHU 6HUYHV DV UHOLJLRXV RIIHULQJ DQG KDLU GHFRUDWLRQ 3ODQW FRQWDLQV D EODQG YDVFLG PXFLODJH WKDW IXQFWLRQV DV D GHPXOFHQW HPROOLHQW DQG GLXUHWLFf *UD S W RSK\O XUQ SLFWXP /f *ULII 7UHDWV VNLQ DQG UHVSLUDWRU\ DOOHUJLHV )RRG VRXUFH 6RXUFH RI JUHHQ PDQXUHPXOFK

PAGE 198

$SSHQGL[ 'f§FRQWLQXHG %XOERSK\OOXP VS 5DZ IUXLW LV FUXVKHG ZLWK MDJJHU\ KHDWHG DQG WKHQ DSSOLHG GLUHFWO\ RQ FXWDQHRXV ZRXQGV LQ FDWWOH WR WUHDW VZHOOLQJ DQG LQIHFWLRQ )UXLW LV PL[HG ZLWK ULFH DQG JLYHQ WR PLONFRZV WR LPSURYH PLON TXDOLW\ *DUGHQLD JXPPLIHUD / I 3XOYHUL]HG SRZGHU LV JLYHQ WR FDWWOH WR WUHDW G\VHQWHU\ )RRG VRXUFH $Q DQWKHOPLQWLF WKDW WUHDWV URXQGZRUP LQ OLYHVWRFN 7KH JXPUHVLQ IXQFWLRQV DV DQ DQWLVSDVPRGLF FDUPLQDWLYH DQWLVHSWLF DQG VWLPXODQW ,W LV JLYHQ WR FKLOGUHQ GXULQJ WHHWKLQJf ,[RUD JUDQGLIORUD &RQWUROV PHQVWUXDO EOHHGLQJ 5HGXFHV ERG\ KHDW GXH WR IHYHU )RRG VRXUFH ,[RUD JUDQGLIORUD YDU EODFN 5HGXFHV VZHDWLQJ YRPLWLQJ DQG LQYROXQWDU\ ORVV RI ERG\ IOXLGV $HUXD ODQDWD -XVV 7UHDWV G\VHQWHU\ 6RXUFH RI JUHHQ PDQXUHPXOFK 5RRW H[WUDFW WUHDWV KHDGDFKHf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f &DORWURSLV JLJDQWHD /f 'U\DQGHU H[ $LWQ I 5RRW LV PL[HG ZLWK WXPHULF DQG WLHG WR ULJKW ELFHS IRU IRXU WR ILYH GD\V WR WUHDW IHYHU 7UHDWV VNLQ LQIODPPDWLRQ DQG VNLQ LQIHFWLRQV 5HOLJLRXV RIIHULQJ 5RRW LV WDNHQ DV D SXUJDWLYH DQG WR WUHDW OHSURV\ 5RRW FKDUFRDO DQG URRW EDUN LV PL[HG ZLWK RLO WR WUHDW VNLQ HUXSWLRQV IRXO XOFHUV OHSURV\ 5RRW EDUN LV PL[HG ZLWK ULFH YLQHJDU LQWR SDVWH WR WUHDW ILODULDO VZHOOLQJ RI OHJV RU VFURWXPf

PAGE 199

$SSHQGL[ 'f§FRQWLQXHG 'XUDQWD SOXPHULD )HQFLQJ PDWHULDO /DZVRQLD DOED / YDU UXEUD )ORZHUV OHDYHV DQG VKRRWV DUH PL[HG ZLWK PLON WR WUHDW LUUHJXODULW\ LQ PHQVWUXDO IORZ /HDYHV DQG IORZHUV WUHDW KHDGDFKHf 5DQGLD GXPHWRUXP /DPN 5RRW H[WUDFW IURP PDWXUH WUHHV LV PL[HG ZLWK OHPRQ MXLFH DQG WDNHQ RUDOO\ WR WUHDW VQDNH ELWH )HQFLQJ PDWHULDO 5RRW DQG IUXLW WUHDW VQDNH ELWH 5RRW LV JURXQG ZLWK R[ XULQH DQG DSSOLHG DV VDOYH WR WKH H\HV RI WKH SDWLHQW WR JUDLQV RI GULHG IUXLW SXOS LV JLYHQ RUDOO\ %DUN WUHDWV UKHXPDWLVP DQG ERQH DFKH DVVRFLDWHG ZLWK IHYHU )UXLW LV DQ HPHWLF DQG XVHIXO LQ WUHDWLQJ EURQFKLWLV DQG DVWKPDf 3DQGDQXV RGRUDWLVVLPXV 5R[E 7UHDWV MRLQW SDLQ +DLU GHFRUDWLRQ 5HOLJLRXV RIIHULQJ :HDYLQJ PDWHULDO 0DOH IORZHUV WUHDW HDUDFKH KHDGDFKH DQG EORRG GLVHDVHV /HDYHV DUH VDLG WR WUHDW VFDELHV VPDOOSR[ OHXFRGHUPD DQG OHSURV\ 3DQGDQXV IDVFLFXODULV /HDYHV DUH FUXVKHG LQWR SODVWHU WR WUHDW GLVORFDWHG OLPEV LQ FDWWOH )HQFLQJ DQG ZHDYLQJ PDWHULDO 5LSDULDQ HURVLRQ FRQWURO /HDYHV DUH ZRYHQ LQWR PDWV WKDWFK EDJV HWF /HDI ILEHU LV PDGH LQWR FRUGDJH .HRUD RLO IURP PDOH LQIORUHVFHQFH LV D IODYRULQJ DQG SHUIXPH LQJUHGLHQW 3ODQWHG DORQJ FDQDOV WR VWDELOL]H VRLOf $GKDWRGD YDVLFD 1HHV /HDYHV RU URRWV DUH PL[HG ZLWK KRQH\ GULQN WR WUHDW FROGV FRXJK DVWKPD UHGXFH KHDW GXH WR IHYHU DQG WR SXULI\ WKH EORRG 7UHDWV 7LQHD VNLQ LQIHFWLRQV DQG RWKHU VNLQ GLVHDVHV )HQFLQJ PDWHULDO 6RXUFH RI JUHHQ PDQXUHPXOFK /HDYHV FRQWDLQ DONDORLG YDVLFLQH WKDW IXQFWLRQV DV H[SHFWRUDQW DQG DQWLVSDVPRGLF WR WUHDW FRXJK UHVSLUDWRU\ LQIHFWLRQV WXEHUFXORVLV EURQFKLWLV DQG DVWKPD 5RRW DQG EDUN KDYH VLPLODU XVHV WR WKH OHDYHVf 6SRQGLDV PDQJLIHUD / )RRG VRXUFH 6WHP LV FUXVKHG DQG PL[HG ZLWK EXWWHUPLON WR WUHDW G\VHQWHU\ LQ FDWWOH )OXJJHD YLURVD ZLQG /HDI JUHHQ LV GULHG SRZGHUHG DQG PL[HG ZLWK PLON WR WUHDW PHQVWUXDO LUUHJXODULW\ ,PSURYHV GLJHVWLRQ

PAGE 200

$SSHQGL[ 'f§FRQWLQXHG &DULVVD FDUDQGDV / 5RRW H[WUDFW LV PL[HG ZLWK FDOFLXP K\GUR[LGH PRLVW OLPHVWRQHf WR WUHDW WRRWKDFKH 5RRW SDVWH LV XVHG DV IO\ UHSHOOHQWf &DO\FRSWHULV IORULEXQGD 5R[E )RRG VRXUFH 6RXUFH RI JUHHQ PDQXUHPXOFK :HDYLQJ PDWHULDO +RODUUKHQD DQWLG\VHQWHULFD 5R[E H[ )OHPLQJf :DOOLFK H[ $ 'F 6WHP H[WUDFW DQG IULHG SRZGHUHG VHHGV DUH PL[HG ZLWK EXWWHUPLON WR WUHDW VWRPDFK ZRUPV DQG VWRPDFK DFKH )RRG VRXUFH )UHVK EDUN LV H[FHOOHQW UHPHG\ IRU GLDUUKRHD DQG DPRHELF G\VHQWHU\ 6HHGV DUH HIIHFWLYH LQ WUHDWLQJ G\VHQWHU\ FRPSOLFDWHG ZLWK ZRUPV LQ FKLOGUHQ GLDUUKRHD IHYHUV UHVSLUDWRU\ GLVHDVHV MDXQGLFH FROLF HWFf %DPEVD DUXQGLQDFHDH 5HW]f :LOOG 2QH KDQGIXO RI JUHHQ OHDYHV JLYHQ WR FRZV HDVHV WKH ELUWK RI FDOYHV )HQFLQJ PDWHULDO :HDYLQJ PDWHULDO &RQVWUXFWLRQ PDWHULDO 7HQGHU VKRRWV DUH D VRXUFH RI IRRG /HDYHV XVHIXO LQ VWXPXODWLQJ PHQWUXDO IORZ DQG IRU HQFRXUDJLQJ GLVFKDUJH RI PHQVHV RU ORFKLD DIWHU FKLOGELUWK /HDYHV DUH PL[HG ZLWK EODFN SHSSHU DQG VDOW WR FKHFN GLDUUKRHD LQ FDWWOH /HDI EXGV WUHDW WKUHDGZRUPV
PAGE 201

$SSHQGL[ 'f§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f 'LRVS\URV PHODQR[\ORQ 5R[E 3RZGHUHG OHDYHV WUHDW VWRPDFK LQIHFWLRQV )RRG VRXUFH %DUN DQG IUXLW DUH XVHIXO DVWULQJHQWV 'HFRFWLRQV DUH HIIHFWLYH FXUHV IRU FKURQLF G\VHQWHU\ GLDUUKRHD DQG LQWHUQDO KHDPRUUKDJHVf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f 6HPHFDUSXV DQDFDUGLXP / I 2LO H[WUDFWHG IURP URDVWHG QXW LV PL[HG ZLWK VXJDU DQG PLON DQG WDNHQ RUDOO\ WR WUHDW VWRPDFK DQG LQWHVWLQDO ZRUPV 7UHDWV IRRW FDOOXV 3HVW FRQWURO DJHQW DIWHU SHVW RXWEUHDN 2LO H[WUDFWHG IURP QXW DQG QXW VKHOO LV D SRZHUIXO HVFKDURWLF DQWLVHSWLF FKRODJRJXH FDUGLDF DQG QHUYH WRQLF ([XGHG QXW RLO LV PL[HG ZLWK PLON DQG WDNHQ GDLO\ WR WUHDW FRXJK DQG WR UHOD[ WKH XYXOD DQG SDODWH 7KH EUXLVHG QXW LV DQ DERUWLIDFLHQW ZKHQ SODFHG LQ WKH PRXWK RI WKH XWHUXVf

PAGE 202

$SSHQGL[ 'f§FRQWLQXHG $QQRQD VTXDPRVD / 7UHDWV FDWWOH LOOQHVVHV 6RXUFH RI JUHHQ PDQXUHPXOFK )RRG VRXUFH 8QULSH IUXLW WUHDWV GLDUUKHD G\VHQWHU\ DQG G\VSHSVLD %UXLVHG ULSH IUXLW LV PL[HG ZLWK VDOW WR KDVWHQ VXSSXUDWLRQ RI WXPRUV 6HHGV DSSOLHG WR XWHUXV LQGXFH DERUWLRQ 6HHG SRZGHU LV D KDLU FOHDQVLQJ DJHQWf +ROLJDUQD DUQRWWLDQD +RRI I %DUN H[WUDFW WUHDWV FDWWOH VNLQ LQIHFWLRQV 6RXUFH RI JUHHQ PDQXUHPXOFK 3HVW FRQWURO DJHQW DIWHU SHVW RXWEUHDN $QWKRFHSKDOLV FDGDPED 0LT 7UHDWV ERG\ SRLVRQLQJ VXFK DV WHWQXV LQIHFWLRQ )UXLW MXLFH ZLWK FXPLQ DQG VXJDU LV JLYHQ IRU VQDNH ELWH %DUN GHFRFWLRQ WUHDWV IHYHU 0L[WXUH RI EDUN MXLFH OLPH MXLFH RSLXP DQG DOXP WUHDW H\H LQIODPPDWLRQf 6DUDFD LQGLFD / /HDI H[WUDFW LV PL[HG ZLWK PLON WR LPSURYH IHUWLOLW\ DQG WR WUHDW PHQVWUXDO LUUHJXODULW\ /HDYHV DUH FRQVLGHUHG WR EH DOWHUDWLYH DQG XVHIXO LQ WUHDWLQJ FROLF %DUN GHFRFWLRQ LV KLJKO\ DVWULQJHQW DQG LV D KRXVHKROG UHPHG\ IRU KHPRUURLGV LQWHUQDO EOHHGLQJ DQG XWHULQH GLVRUGHUV HVSHFLDOO\ PHQRUUKDJLD DQG OHXFRUUKRHDf $SRURVD OLQGOH\DQQD )UXLW UHGXFHV ERG\ KHDWIHYHU DQG QDXVHD %DUN H[WUDFW LV D UHPHG\ IRU FRQVWLSDWLRQ DQG SLOHV )RRG VRXUFH 6RXUFH RI JUHHQ PDQXUHPXOFK 6\]\JLXP FXPLQL /f 6NHHOV (XJHQLD MDPERODQXPf 7HQGHU OHDYHV DUH FKHZHG WR H[WUDFW MXLFH ZKLFK WUHDWV VWRPDFK SUREOHPV /HDI ILEHU LV VSLW RXW ([WUDFW WUHDWV IHYHUFKLOOV DQG GLDUUKRHD 6RXUFH RI JUHHQ PDQXUHPXOFK /HDYHV DUH DVWULQJHQW DQG DUH D UHPHG\ LQ G\VHQWHU\ ZLWK EORRG GLVFKDUJHV 7HQGHU OHDI MXLFH LV PL[HG ZLWK JRDWnV PLON WR WUHDW GLDUUKRHD LQ FKLOGUHQ 6HHGV WUHDW PHOOLWXV GLDEHWHV %DUN GHFRFWLRQ LV D PRXWKZDVK DQG JDUJOH IRU VSRQJ\ JXPV DQG RUDO LQIHFWLRQV

PAGE 203

$SSHQGL[ 'f§FRQWLQXHG 7HUPLQDOLD FHEXOD *DHUWQHUf 5HW] )UXLW SXOS LV JURXQG ZLWK KRQH\ WR WUHDW EDG FRXJKV H[FHVVLYH PXFRXV DQG WRQVLOLWLV )RRG DQG RLO VRXUFH 3HVW FRQWURO DJHQW DIWHU SHVW RXWEUHDN 7UHDWV LQIHFWLRQV LQ FDWWOH )UXLW LV DVWULQJHQW SXUJDWLYH DQG D VDIH OD[DWLYH 8QULSH IUXLW SXOS LV PL[HG ZLWK KRQH\ DQG DURPDWLFV OLNH FORYH RU FLQQDPRQ WR WUHDW IODWXOHQFH GLDUUKHD DQG G\VHQWHU\ ,QIXVLRQ RI IUXLW DV JDUJOH WUHDWV PRXWK LQIHFWLRQV VSRQJ\ DQG XOFHUDWHG JXPVf &LQQDPRPXP ]H\ODQLFXP %OXPH 7UHDWV HDU DFKH DQG KHOSV GUDLQ HDU LQIHFWLRQV )RRG DQG VSLFH VRXUFH )XQFWLRQV DV DQ DURPDWLF VWLPXODQW DQG FDUPLQDWLYH WR WUHDW IODWXOHQFH DQG VSDVPRGLF DIIHFWLRQV RI WKH ERZHOV %DUN SRZGHU LQIXVLRQ VWLPXODWHV XWHULQH PXVFOH FRQWUDFWLRQV LQ SURORQJHG ODERUf 6DSLQGXV HPDUJLQDWD / 3ODVWHU WUHDWV VNLQ LQIHFWLRQV LQ KXPDQV DQG FDWWOH 6RXUFH RI JUHHQ PDQXUHPXOFK 6KDPSRR IRU KDLU QRXULVKPHQW &DUH\D DUEUHD 5R[E %DUN H[WUDFW WUHDWV KHDUW GLVHDVH )RRG VRXUFH 6RXUFH RI JUHHQ PDQXUHPXOFK $UWRFDUSXV ODFXFKD 7UHDWV VWRPDFK ZRUPV DQG ERG\ OLFH )RRG VRXUFH &RQVWUXFWLRQ PDWHULDO 6WU\FKQRV QX[ YRPLFD / /HDI DQG EDUN H[WUDFWV WUHDW FXWDQHRXV LQFOXGLQJ PRXWKf XOFHUV LQ KXPDQV DQG FDWWOH 3HVW FRQWURO DJHQW DIWHU SHVW RXWEUHDN 6RXUFH RI JUHHQ PDQXUHPXOFK /HDYHV DUH XVHG LQ SRXOWLFHV RYHU VORXJKLQJ ZRXQGV DQG XOFHUV HYHQ PDJJRWLQIHVWHG OHVLRQV $ IHZ GURSV RI EDUN H[WUDFW WUHDW FKROHUD DQG DFXWH G\VHQWHU\ 3RZGHUHG URRW EDUN LV PL[HG ZLWK OLPH MXLFH WR WUHDW FKROHUD 3RZGHUHG VHHGV DUH HIIHFWLYH WUHDWLQJ QHXUDOJLD RI WKH IDFH VSDVPRGLF GLVHDVHV HSLOHSV\ DQG VH[XDO LPSRWHQFHf 0\WULJ\QH SDUYLIORUD %ROH XVHG WR PDNH OHYHOLQJ EDU RQ SORZV &RQVWUXFWLRQ PDWHULDO 6RXUFH RU JUHHQ PDQXUHPXOFK

PAGE 204

$SSHQGL[ 'f§FRQWLQXHG %XFKDQDQLD ODWLIROLD 5R[E )RRG VRXUFH 6RXUFH RI JUHHQ PDQXUHPXOFK )UXLWV DQG VHHGV DUH QXWULWRXV DQG JRRGn WDVWLQJ 6HHG JXP WUHDWV GLDUUKRHD DQG LV DSSOLHG WR JODQGXODU VZHOOLQJV LQ WKH QHFN 2LQWPHQW IURP NHUQHO WUHDWV VNLQ GLVHDVHV LWFKLQJ DQG IDFLDO EOHPLVKHVf *DUFLQLD LQGLFD 7KRXDUVf &KRLV\ )UXLW WUHDWV ERG\ KHDWDFLGLW\ QDXVHD DQG GLDUUKRHD 2LO WUHDWV FDOOXVHG VNLQ HVSHFLDOO\ IRRW FDOOXV )RRG VRXUFH )UXLW LV FRROLQJ GHPXOFHQW DQWLVFRUEXWLF FKRODJRJXH DQG DV DQ DVWULQJHQW LV JLYHQ WR VWRS KDHPRUUKDJH LQ WKH ERZHOV 2LO WUHDWV XOFHUDWLRQV DQG ILVVXUHV RI WKH OLS 'ULQN RI LQIXVLRQ DQG LWV ORFDO DSSOLFDWLRQ WUHDW XUWLFDULDf 9DWHULD LQGLFD / 5HVLQ LV H[WHUQDOO\ DSSOLHG WR WUHDW VNLQ GLVHDVHV 5HOLJLRXV RIIHULQJ %ROH UHVLQ WUHDWV JRQRUUKRHD ([WHUQDO DSSOLFDWLRQ RI UHVLQ WUHDWV VNLQ FDUEXQFOHV 6HHG RLO GUHVVLQJ WUHDWV FKURQLF UKHXPDWLVPf 'LOOHQLD SHQWDJ\QD 7UHDWV GLVHDVH LQ FDWWOH )RRG VRXUFH &RQVWUXFWLRQ PDWHULDO 6RXUFH RI JUHHQ PDQXUHPXOFK 0LFKHOLD FKHPSDFD / %DUN H[WUDFW WUHDWV VWRPDFK DFKH +DLU GHFRUDWLRQ 5HOLJLRXV RIIHULQJ &RQVWUXFWLRQ PDWHULDO %DUN GHFRFWLRQ WUHDWV PLOG JDVWULWLV ,QIXVLRQV RI GULHG URRWV DQG URRW EDUN DUH SXUJDWLYHV )ORZHUV DQG IUXLWV WUHDW G\VSHSVLD QDXVHD DQG IHYHU /HDI MXLFH LV JLYHQ ZLWK KRQH\ WR WUHDW FROLFf &DVVLD ILVWXOD / 7HQGHU OHDI RLO H[WUDFW WUHDWV FXWDQHRXV LQIODPDWLRQ LWFK DQG VNLQ DOOHUJLHV /HDYHV KDYH OD[DWLYH SURSHUWLHV EXW DUH SULPDULO\ DQ H[WHUQDO HPROOLHQW WR WUHDW ULQJZRUP VNLQ LUULWDWLRQ DQG WR EULQJ UHOLHI IURP GURSVLFDO VZHOOLQJV /HDI SRXOWLFHV WUHDW FKLOEODLQV UKHXPDWLVP DQG IDFLDO SDUDO\VLVf $OKL]LD $PDUD %RLYLQ &RQVWUXFWLRQ PDWHULDO 6RXUFH RI JUHHQ PDQXUHPXOFK &RROV WKH ERG\ DQG WUHDWV HU\VLSHODV VNLQ LQIODPPDWLRQ H\H GLVHDVHV DQG XOFHUVf

PAGE 205

$SSHQGL[ 'f§FRQWLQXHG $UWRFDUSXV LQWHJULIROLD / I )RRG DQG EHYHUDJH VRXUFH &RQVWUXFWLRQ PDWHULDO 5HOLJLRXV RIIHULQJ 5RDVWHG ULSH VHHGV DUH QXWULWRXV 0LON\ ODWH[ LV PL[HG ZLWK YLQHJDU WR H[WHUQDOO\ WUHDW JODQGXODU VZHOOLQJV 5RRW H[WUDFW WUHDWV GLDUUKRHD 7HQGHU OHDYHV DQG URRW H[WUDFWV WUHDW VNLQ GLVHDVHVf $HJOH PDUPHORV /f &RUU 6HUU /HDI JUHHQ DLGV GLJHVWLRQ WUHDWV GLDUUKRHD %DUN WUHDWV FKLOOVIHYHU /HDI MXLFH LV PL[HG ZLWK FRZnV XULQH WR WUHDW OLFH /HDI GHFRFWLRQ LV XVHIXO DV IHEULIXJH H[SHFWRUDQW DQG DQWLDVWKPDWLF 5LSH IUXLW WUHDWV GLDUUKRHD LQWHVWLQDO GLVRUGHUV DQG VRPH IRUPV RI G\VSHSVLD FKDUDFWHUL]HG E\ ERWK FRQVWLSDWLRQ DQG GLDUUKRHD 5RRW EDUN GHFRFWLRQ WUHDWV IHYHU DQG KHDUW SDOSLWDWLRQVf &DVXDULQD HTXLVHWLIROLD / &RQVWUXFWLRQ PDWHULDO 2UQDPHQWDO SODQW 5LSDULDQ VRLO HURVLRQ FRQWURO DJHQW %DUN LV VOLJKWO\ DVWULQJHQW DQG PDGH LQWR LQIXVLRQV WR WUHDW GLDUUKRHD G\VHQWHU\f $FDFLD DXULFXOLIRUPLV &XQQ H[ %HQWK &RQVWUXFWLRQ PDWHULDO 6RXUFH RI JUHHQ PDQXUHPXOFK DIWHU VORZ GHFRPSRVLWLRQ 6RXUFHV IRU 3XEOLVKHG'RFXPHQWHG 8VHV RI 3ODQW 6SHFLHV 'DVWXU ) 0HGLFLQDO 3ODQWV RI ,QGLD DQG 3DNLVWDQ % 7DUDSRUHYDOD 6RQV t &RPSDQ\ /WG +RUQE\ 5RDG %RPED\ 'DVWXU ) 8VHIXO 3ODQWV RI ,QGLD DQG 3DNLVWDQ % 7DUDSRUHYDOD 6RQV t &RPSDQ\ /WG +RUQE\ 5RDG %RPED\ +RUWXV 7KLUG $ &RQFLVH 'LFWLRQDU\ RI 3ODQWV &ROOHFWHG LQ WKH 86$ DQG &DQDGD &RUQHOO 8QLYHUVLW\ IRU LWV / + %DLOH\ +RUWRULXP 0DFPLOOLQ 3XEOLVKLQJ &RPSDQ\ 1HZ
PAGE 206

/,67 2) 5()(5(1&(6 $JDUZDO $ DQG 6 1DUDLQ 7RZDUGV *UHHQ 9LOODJHV $ 6WUDWHJ\ IRU (QYLURQPHQWDOO\ 6RXQG DQG 3DUWLFLSDWRU\ 5XUDO 'HYHORSPHQW &HQWHU IRU 6FLHQFH DQG (QYLURQPHQW 1HZ 'HOKL ,QGLD $JDUZDOD 9 3 )RUHVWV LQ ,QGLD 2[IRUG DQG ,%+ 3XEOLVKLQJ &RPSDQ\ %RPED\ ,QGLD $NEDUVKD $ 5HVHUYDWLRQ RI )RUHVWV LQ &RRUJ 0HUFDUD 'LVWf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
PAGE 207

%URPOH\ : (QYLURQPHQW DQG (FRQRP\ 3URSHUW\ 5LJKWV DQG 3XEOLF 3ROLF\ %DVLO %ODFNZHOO ,QF &DPEULGJH 0DVVDFKXVHWWV %URPOH\ : DQG 0 0 &HUQHD 7KH 0DQDJHPHQW RI &RPPRQ 3URSHUW\ 1DWXUDO 5HVRXUFHV 7KH :RUOG %DQN :DVKLQJWRQ & &HUQHD 0 0 $OWHUQDWLYH 8QLWV RI 6RFLDO 2UJDQL]DWLRQ 6XVWDLQLQJ $IIRUHVWDWLRQ 6WUDWHJLHV 3S LQ &HUQHD 0 0 HG 3XWWLQJ 3HRSOH )LUVW 6RFLRORJLFDO 9DULDEOHV LQ 5XUDO 'HYHORSPHQW 7KH :RUOG %DQN 2[IRUG 8QLYHUVLW\ 3UHVV 1HZ
PAGE 208

(YDQV & 7KH 4XDQWLWDWLYH $QDO\VLV RI 3ODQW *URZWK 8QLYHUVLW\ RI &DOLIRUQLD 3UHVV %HUNHOH\ &DOLIRUQLD 3S (\UH ) + DQG : 0 =LOOJLWW 3DUWLDO &XWWLQJV RI 1RUWKHUQ +DUGZRRGV RI WKH /DNH 6WDWHV 86'$ 7HFKQLFDO %XOOHWLQ :DVKLQJWRQ & )$2 5XUDO :RPHQ )RUHVW 2XWSXWV DQG )RUHVWU\ 3URMHFWV )20,6& GLVFXVVLRQ GUDIWf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f 6RFLHW\ IRU WKH 3URPRWLRQ RI :DVWHODQGV 'HYHORSPHQW 1HZ 'HOKL ,QGLD *DGJLO 0DQG 5 *XKD 7KLV )LVVXUHG /DQG $Q (FRORJLFDO +LVWRU\ RI ,QGLD 2[IRUG 8QLYHUVLW\ 3UHVV 'HOKL ,QGLD *D]HWWHHU RI WKH %RPED\ 3UHVLGHQF\ .DQDUD 'LVWULFW 9ROXPH ;9 3DUW UHSULQWHG LQ f 6DJDUGHHS 3XEOLFDWLRQV .DUZDU ,QGLD *RYHUQPHQW RI ,QGLD 5HSRUW RI WKH 1DWLRQDO &RPPLVVLRQ RQ $JULFXOWXUH 1&$f 3DUW ,; *RYHUQPHQW RI .DUQDWDND 'HSDUWPHQW RI /DZ DQG 3DUOLDPHQWDU\ $IIDLUV .DUQDWDND )RUHVW $FW DQG .DUQDWDND )RUHVW 5XOHV 6XSHU *UDSKLFV %DQJDORUH ,QGLD *URHQIHOGW $OFRUQ 6 %HUZLFN )OLFNLQJHU DQG 0 +DW]LRORV 2SSRUWXQLWLHV IRU (FR'HYHORSPHQW LQ %XIIHU =RQHV $Q $VVHVVPHQW RI 7ZR &DVHV LQ :HVWHUQ ,QGLD %LRGLYHUVLW\ 6XSSRUW 3URJUDP :RUOG :LOGOLIH )XQG :DVKLQJWRQ &

PAGE 209

*XKD 5 7KH 8QTXLHW :RRGV (FRORJLFDO &KDQJH DQG 3HDVDQW 5HVLVWDQFH LQ WKH +LPDOD\D 2[IRUG 8QLYHUVLW\ 3UHVV 'HOKL ,QGLD *XKD 5 DQG 0 *DGJLO 6WDWH )RUHVWU\ DQG 6RFLDO &RQIOLFW LQ %ULWLVK ,QGLD 3DVW t 3UHVHQW 0D\f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
PAGE 210

.UDPHU 3 DQG 7 7 .RVORZVNL 3K\VLRORJ\ RI :RRG\ 3ODQWV $FDGHPLF 3UHVV ,QF 2UODQGR )ORULGD .XPPHU 0 5HPRWH 6HQVLQJ DQG 7URSLFDO 'HIRUHVWDWLRQ $ &DXWLRQDU\ 1RWH IURP WKH 3KLOLSSLQHV 3KRWRTUDPPHWULF (QJLQHHULQJ DQG 5HPRWH 6HQVLQJ /9,,,f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

PAGE 211

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
PAGE 212

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
PAGE 213

6KLYD : (FRORJ\ DQG WKH 3ROLWLFV RI 6XUYLYDO &RQIOLFWV RYHU 1DWXUDO 5HVRXUFHV LQ ,QGLD 8QLWHG 1DWLRQV 8QLYHUVLW\ 3UHVV 6DJH 3XEOLFDWLRQV 1HZ 'HOKL ,QGLD 6KXNOD DQG 5DPDNULVKQDQ (IIHFWV RI SUXQLQJ RQ WUHH JURZWK LQ 0DQ DQG WKH %LRVSKHUH 3URJUDP 6HULHV 81(6&2 6K\DP 6XQGHU 6 $ 1
PAGE 214

9,.6$7 :RPHQ LQ 'HYHORSPHQW LQ *XMDUDW 6WDWH 9LNVDW $KPHGDEDG ,QGLD :DWW 7KH &RPPHUFLDO 3URGXFWV RI ,QGLD -RKQ 0XUUD\ $OEHPHUOH 6WUHHW /RQGRQ :DWW 6HFRQG 5HSULQW $ 'LFWLRQDU\ RI WKH (FRQRPLF 3URGXFWV RI ,QGLD 3HULRGLFDO ([SHUWV 1HZ 'HOKL ,QGLD :LOOLDPV 0 'HIRUHVWDWLRQ 3DVW DQG 3UHVHQW 3URJUHVV LQ +XPDQ *HRJUDSK\ :LOOLDPV 3 :RPHQn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

PAGE 215

%,2*5$3+,&$/ 6.(7&+ 'RQDOG ,DQ )OLFNLQJHU ZDV ERUQ LQ /LPD 2KLR RQ -XO\ +H DWWHQGHG SXEOLF VFKRRO LQ /LPD XQWLO DJH ZKHQ KH HQUROOHG DW 'HHUILHOG $FDGHP\ 'HHUILHOG 0DVVDFKXVHWWV +LV MXQLRU \HDU RI KLJK VFKRRO ZDV VSHQW DW WKH )UDQFR$PHULFDQ ,QVWLWXWH LQ 5HQQHV )UDQFH WKURXJK WKH 6FKRRO
PAGE 216

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 1LJHO + 6PLWK &KDLU 3URIHVVRU RI *HRJUDSK\ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ &AVDU 1n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

PAGE 217

/' I  81,9(56,7< 2) )/25,'$


xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EG4PFL8LH_QW24HV INGEST_TIME 2013-02-14T16:17:44Z PACKAGE AA00012977_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES



PAGE 1

REHABILITATION OF DEGRADED TROPICAL FORESTS IN INDIA S WESTERN GHATS : SILVICULTURAL AND SOCIO-ECONOMIC IMPLICATIONS OF MULTIPLE SPECIES PLANTATIONS By DONALD IAN FLICKINGER A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 1997

PAGE 2

Copyright 1997 by Donald Ian Flickinger

PAGE 3

With the base of ignorance reaction arises; with the base of reaction consciousness arises ; with the base of consciousness, mind and body arise ; with the base of mind and body the six senses arise ; with the base of the si x senses contact arises ; w ith the base of contact sensation arises ; with the base of sensation, craving and aversion arise ; with the base of craving and aversion attachment arises ; with the base of attachment the process of becoming arises ; w ith the base of the process of becoming birth arises; with the base of birth aging and death arise, together with sorrow lamentation physical and mental sufferings and tribulations Thus arises the entire mass of suffering With the complete eradication and cessation of ignorance reaction ceases ; with the cessation of reaction consciousness ceases ; with the cessation of consciousness mind and body cease ; with the cessation of mind and body the si x senses cease ; with the cessation of the six senses contact ceases ; with the cessation of contact sensation ceases; with the cessation of sensation craving and aversion cease ; with the cessation of craving and aversion attachment ceases ; with the cessation of attachment the process of becoming ceases ; with the cessation of the process of becoming birth ceases ; with the cessation of birth aging and death cease together with sorrow lamentation, physical and mental sufferings and tribulations Thus this entire mass of suffering ceases Paticca-samuppada Sutta Samyutta Nikaya XII (I). 1.

PAGE 4

ACKNOWLEDGMENTS I wish to thank Volunteers in Asia Inc., Stanford California for posting me in Southeast Asia as an appropriate technology volunteer spurring my interest in community resource work My professional association with Yayasan Dian Desa Foundation staff in Yogyakarta Indonesia and British Oxfam Oxford England exposed me to technical and administrative approaches that encourage greater choice and self-sufficiency in local communities The desire to improve my skills as a community worker brought me back to the United States to pursue graduate education At the University of Florida Nigel Smith Jack Putz, Abe Goldman, Cesar Caviedes Marc McLean, Seth Bigelow and my graduate peers in the Department of Geography have all assisted and encouraged me to finish this work The kind support of the Fulbright Foundation in India Karnataka Forest Department s Y N. Yelappa Reddy and my friends C Saibaba Vimla, Pandurang Hegde, Mumta Hegde Malti Hegde, and Satish Hegde made my field research in India both possible and personally rewarding My wife, Jennifer Silveira marked the path to completion of this work by her own example lV

PAGE 5

The practice of Vipasana Meditation as taught by S N Goenka has strengthened my sense of humility acceptance and goodwill toward others Finally, the memory of my mother Jane Slusser Flickinger and her life-long application of those adages pretty is as pretty does and if you can't say anything nice don't say anything at all strengthens my efforts to pass these pearls on to my sons, Parker and Whitney V

PAGE 6

TABLE OF CONTENTS page ACKNOWLEDGMENT s .......................................... ... .. l V LIST OF LIST OF TABLES .. ..... .......... ................... ........ lX FIGURES ............................................... X1l INTRODUCTION .................................................... 1 Forest Rehabilitation and the Needs of Forest Dependent Communities : A Dual Research Agenda ........ .............. 3 The Research Area ......................................... .. 7 Multiple Species Plantations (MSPs) ....................... . 10 Gender and Caste based Analysis of Forest Resource Use ..... 13 Village Study Area ............................. .. ........... 15 FOREST REHABILITATION VIA MULTIPLE SPECIES PLANTATIONS (MSPs) : THE SILVICULTURAL STUDY ........................ ..... 17 Tree Seedlings and the Forest Understory .... .............. 17 Silvicultural Study Focus .............................. .. ... 21 SILVICULTURAL STUDY : SITE SELECTION AND IMPLEMENTATION ......... 26 Research Area Selection ..................................... 26 Research Site Selection ..................................... 28 Silvicultural Experiment Design ........................ .... 32 Plant Selection and Imposition of Experimental Treatments .. 35 Plot Maintenance . ....................................... .. 39 Plant Harvesting Processing and Measurement .... ........... 40 Calibration Estimates Requiring Destructive Measurements .... 41 SILVICULTURAL STUDY RESULTS AND DISCUSSION .................. .. 45 INTRO DUCT I ON ............... ............................. .. 4 5 Seedling Growth Rates During Monsoon versus Dry Seasons ... . 45 Experimental Plant Damage and Measurement Problems .. .. .. ... 46 Shoot and Root Collar Relative Growth Rate (RGR) Results .. .. 48 Discussion: Ecological Potential of MSPs ....... ....... .. . 56 Local Misgivings about MSPs : Reduced Biodiversity and Forest Reservation ....................................... 59 FOREST RESOURCES IN PENINSULAR INDIA : STATE APPROPRIATION AND LOCAL EXCLUSION ......................................... .... 62 The Historical Context ........ ............................. 63 British Colonial Administration of Indian Forest Resources ............. ......... ............... ..... .. 65 Ecology and Aesthetics of Forests : Colonial Perceptions .................................... .... 7 0 Vl

PAGE 7

Local Resistance to Capitalization of Forests ... .. ... .. 71 Management of Indian forests in the early 20th Century ........................................... .. 72 Post-Colonial Management of Forest Resources ............. 74 Capitalization of Indian Forest Resources : An Analytical Framework ................................................ 77 Forest Policy and Management in Northwestern Karnataka State .................................................... 80 Pushing Back the Forest Frontier : Forest Encroachment in Sirsi Taluk . ............ ........................ .. 84 Conclusion ....... .. . .................................... .. 86 THE COMMUNITY FOREST RESOURCE STUDY : THE BASELINE SURVEY ....... 88 Introduction ....... ........................................ 88 The Forest Resource Use Study : A Two-Tiered Approach ........ 89 Hypotheses of Caste Gender and Age to be Tested by the Surveys . . . . . . . . . . . . . . . . . . . . . . . . . 9 0 The Baseline Survey ......................................... 91 Creation and Administration of the Baseline Survey ....... 91 Caste Groups .................................. ........ .. 94 Hamlets .................................................. 96 Gender ................................................... 96 Age . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 7 Marital Status ................................... .. .. . 98 Literacy ................. .... .......................... .. 98 Land Ownership Employment and Land Encroachment ....... 100 House and Roof Type ................................. .. .. 105 Income .. . ...... .. ............. ......... ..... ... .... 105 Livestock Ownership .. .... .. ....................... ... .. 106 Collection of Non-Timber Forest Products ................ 107 Table 6-11--continued ................................. 110 Fuelwood ... .. .. ................................. ... .. 112 Leaves ........ ............ .... ............. ..... ... 113 Fruits .. .............. ... ........................ .. .... 116 Mushrooms ................... .... .......... ........ ... 11 7 Date Palm . . . . . . . . . . . . . . . . . . . . . . 118 Disappearing Forest Products .... . .. ........ .. .......... 118 Local Perceptions of Multiple Species Plantations (MSPs) ............................................... 120 Perceived Need for Local Forests ........................ 122 Locally Popular Tree Species .. .. ........................ 123 Suggested Future Reforestation Methodologies ...... ... . 125 THE COMMUNITY FOREST RESOURCE STUDY : THE FOREST RESOURCE USE SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . .. 12 8 Introduction .............................................. 128 Forest Products Use Survey Data Collection .... .. .... .... 129 Forest Products Use Survey Data Analysis Tools and Procedures ..... .. .. ....... ... .. .. .. ... ....... ... .... 131 Similarity Matrices .. ................................. 132 Hierarchical Clustering ................................. 133 Multidimensional Scaling ................................ 134 Consensus Analysis ...................................... 135 Forest Products Use Survey Results ......................... 138 Vll

PAGE 8

Pl a nt Identificatio n .................................... 138 Priority Use of Plants ...... .. ...... . ..... .. .......... 146 Plant Versatility (Number of plant uses) .. ..... ....... 151 Plant Usefulness .............. ... ............ .. ..... . 157 Plant Abundance ....... ........... .................... 163 Discussion of Survey Results .. ...... ...... ... .......... .. 165 TO W ARDS PARTICIPATORY MANAGEM E NT OF FOREST RESOURCES .......... 168 Introduction . ..... .. ............... ..................... 168 Participatory Research in Forest Planning and Management . 168 Using Spatial Information to Catalyze Local Participation . 171 Community Based Natural Resource Management : An Applied Scenario ............. ... ............. . .. .... ... ... . .. 172 APPENDIX A BASELINE SURVEY OF 122 HOUSEHOLDS TEREKANA H ALLI VILLAGE NORTH KANARA DISTRICT KARNATAKA INDIA ...... .... 175 APPENDIX B PLANT SPECIES INCLUDED IN A MINOR FOREST VEGETATION USE SURVEY, NORTH KANARA DISTRICT, KARNATAKA INDIA ... .. .. ....... .. ..................... ... .. ... .. . 177 APPENDIX C MINOR F OREST PRODUCT USE PREFERE N CE SURVEY TEREKANAHALLI VILLAGE NORTH KANARA KARNATAKA INDIA ...... 179 APPENDIX D LOCAL USES OF PLANT SPECIES TEREKANAHALLI VILLAGE, NORTH KANARA KARNATAKA INDIA .................... 180 LIST OF REFERENCES ........ .... ............. .. ... ............ 190 BIOGRAPHICAL SKETCH ............ .. ........... .. ...... .. .... ... 199 ' Vlll

PAGE 9

LIST OF TABLES Table page Table 1-1 Native hardwood species often incorporated into Multiple Species Plantations (MSPs) ..... ........ ... . . . .. 11 Table 3-1 Sirsi Forest Division plantations: number of plantations planted from 1987-1991 .......................... 29 Table 3-2 Local names of 1988-91 research plots located within each of 4 research blocks ...... ............... ...... 30 Table 3-3 Number of treatments assigned to experimental units in 1988 MSP plots .............. . .. .............. ... 33 Table 3-4 Number of treatments assigned to experimental units in 1989 and 1990 MSP plots ............................ 33 Table 3-5 Regressions used to estimate 1990 Lagerstroemia lanceolata and Terminalia tomentosa seedling shoot dry weights at the start of the experiment ............ ......... 43 Table 4-1 Percentage of annual seedling shoot growth occurring during monsoon versus dry season n=l74 ......... . 46 Table 4-2 Comparative growth of 16 seedlings grown with and without matrix trees in multiple species plantations ....... 57 Table 6-2 Age distribution, by 10-year intervals of baseline survey informants ............................... .. 98 Table 6-3 Distribution of households in which all females are literate, by caste ...................... . .. . ...... ... 99 Table 6-4 Distribution of households in which all females or all males are illiterate by caste .. ................... 100 Table 6-5 Land ownership and forest use rights by caste f ami l y . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0 1 Table 6-6 Distribution of employment by caste ............ ... 102 Table 6-7 Distribution of unskilled laborers by caste and gender ................ ................... .. ............... 10 3 Table 6-8 Distribution of Gaonthana use and land encroachment by caste ........................... . .. .. .. .. 104 lX

PAGE 10

Table 6-9 Distribution of annual household income in Indian Rupees by caste ................ .. .............. .. . .. 106 Table 6-10 Distribution of average number of 4 types of livestock by caste family ................................. 107 Table 6-11 Priority forest products month(s) collected forest type where collected and number of times mentioned by caste ........................... ............ 109 Table 6-12 Numbers and percentage of female and male informants that collect priority forest products .. .. .. .. .. 112 Table 6-13 Fuelwood collection by gender and caste ........... 112 Table 6-14 Average annual fuelwood collection in kilograms and cartloads by caste household .......................... 113 Table 6-15 Collection of green leaf fodder by caste and gender ..................... ........................... .. 114 Table 6-16 A verage annual green leaf collection in kilograms for the 2 major leaf-collecting castes .......... 115 Table 6-17 Dry leaf collection by caste and gender ........... 115 Table 6-18 Average annual dry leaf collection in kilograms for the 2 major leaf-collecting castes ..................... 116 Table 6-19 Collection of 6 popular species of fruit by caste ...... ............................................... 116 Table 6-20 Mushroom Collection, by caste . ................... 117 Table 6-21 Date palm collection by caste .................... 118 Table 6-22 Increasingly scarce forest products ............... 119 Table 6-23 Reasons cited why 10 forest products are becoming locally scarce by caste .......................... 120 Table 6-24 Local opinions about MSPs ..................... ... 121 Table 6-25 Local op i nions about MSPs versus minor forests .... 122 Table 6-26 Perceptions about the utility of local forests ... 123 Table 6-27 Tree species most requested for inclusion in future reforestation programs and their use ...... ........ 124 Table 6-28 Local recommendations for siting of future reforestation programs by caste ........................... 125 X

PAGE 11

Table 6-29 Local recommendations for implementation strategy of future reforestation programs by caste . ..... 126 Table 7-1 Consensus analysis of informant identification of 65 plants by caste ............... .. .................. .. .. 143 Table 7-2 Knowledge coefficient of informants in identifying 65 local plants with respect to caste gender and age class ...................................... 14 6 Table 7-3 Informants knowledge coefficients of the priority use of recognized plants by caste and gender ..... 150 Table 7-4 Consensus analysis of informant knowledge of plant versatility by caste ............................. .. 153 Table 7-5 Informants knowledge coefficients of versatility of recognized plants by caste gender, and age ... .......... 154 Table 7-6 Knowledge coefficients of versatility of recognized plants by caste, for Havik Brahmins ............ 157 Table 7-7 Consensus analysis of perceived usefulness of recognized plants by caste ............................. ... 160 Table 7-8 Knowledge coefficients of perceived usefulness of recognized plants by caste and gender ................. .... 161 Table 7-9 Rankings and usefulness scores of the most useful survey plants according to survey informants .............. 162 Table 7-10 Knowledge coefficients of perceived local abundance of recognized plant species by caste, gender, and age ............ ..... .. .. ............................ .. 164 Table 7-1 Plant species included in a survey of local vegetation resources obtained from minor forests of North Kanara District Karnataka India ... ........ ... .. .. .. .... 177 Xl

PAGE 12

LIST OF FIGURES Figure page Figure 1-1 Uttara Kanada (North Kanara) District K arnataka In d ia ............................................. 8 Figure 1-2 Forest types and forest conversion Uttara Kanada District K arnataka India ............................ 9 Figure 3-1 Location of research blocks and Uttara Kanada cities .............................................. ....... 31 Figure 3-2 Silvicul t ure e x periment design : blocks whole plots a n d split plots ...................................... 33 Figure 3-3 Comparison of control and combined soil trenching-canopy guying treatments applied in 1991 to one two and three year old plantations ... .. ............ 36 Figure 3-4 Destructive seedling harvest plan used to estimate shoot biomass of 1 2 and 3 year old seedlings at the start of the 1991 92 study ........................... 42 Figure 4-1 Shoot extension comparison of Terminalia tomentosa and Lagerstroemia lanceolata 1 2 and 3 years after outplanting into MSPs .................... ...... 49 Figure 4-2 Root collar a r ea gro w th co m parison of Terminalia tomentosa and Lagerstroemia lanceolata 1 2 a n d 3 years after outplanting i n to MSPs .................. ........ 49 Figure 4-3 Shoot dry weight increment comparison of Terminalia tomentosa and Lagerstroemia lanceolata 1 2, and 3 years after outplanting into MSPs ...... ..... .. .. .. 50 Figure 4-4 2 and 3 (T + G) Shoot extension of Lagerstroemia lanceolata 1 years after outplanting into MSPs Trench & Guy vs Control (Ctrl) ............... ................... 51 Figure 4-5 Shoot extension of Terminalia tomentosa 1 2 and 3 years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl) ...................................... 51 Figure 4-6 Root collar area gro w th of Terminalia tomentosa 1 2 and 3 years after outplanti ng i n to M SPs Trench & Guy (T + G) vs Control (Ctrl) ............................... 52 Xll

PAGE 13

Figure 4-7 Root collar area growth of Lagerstroemia lanceolata 1 2 and 3 years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl) . ... ........ . 53 Figure 4-8 Shoot dry w eight increment of Terminalia tomentosa 1 2 and 3 years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl) ............... 53 Figure 4-9 Shoot dry weight increment of Lagerstroemia lanceolata 1 2 and 3 years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl) .......... . . 54 Figure 4-10 Shoot extension of Lagerstroemia lanceolata 3 years after outplanting trench and guy vs trench vs guy vs control vs NPK treatments ............................... 55 Figure 4-11 Root collar area growth of Lagerstroemia lanceolata 3 years after outplanting trench and guy vs trench vs guy vs control vs NPK treatments .................. 55 Figure 4-12 Shoot dry w eight increment of Lagerst r oemia lanceolata 3 years after outplanting trench and guy vs trench vs guy vs control vs NPK treatments .................. 56 Figure 7-1 gender A similarity matrix of plant identification by for Havik Brahmin informants ....... ..... ......... 133 Figure 7 2 Plant identification by caste using multidimensional scaling ........ .......................... 139 Figure 7-3 Plant identification, by gender using multidimensional scaling ................... .. ............. 140 Figure 7-4 Plant identification by ten-year age classes using multidimensional scaling ........................ .... 141 Figure 7-5 classes Plant identification by caste gender and age using hierarchical clustering ...................... 142 Figure 7-6 Priority use of recognized plants by caste using multidimensional scaling ........................... . 147 Figure 7-7 Priority use of recognized plants by gender using multidimensional scaling ............................. 149 Figure 7-8 Plant versatility or number of uses tallied for recognized plants by caste using multidimensional scaling . ... ........................................ .... 151 Figure 7-9 Plant versatility or number of uses tallied for recognized plants by gender using multidimensional scaling . ................................................. 152 Xlll

PAGE 14

Figure 7-10 Plant versatility or number of uses tallied for recognized plants by gender for Havik Brahmins using multidimensional scaling . . ................. .. .. .. 155 Figure 7-11 Number of uses tallied for recognized plants by gender for Havik Brahmins using hierarchical clustering ............ .. . ..... ..................... ..... 156 Figure 7-12 Perceived usefulness of recognized plants by caste using multidimensional scaling .................. .. 158 Figure 7-13 Perceived usefulness of recognized plants by gender using multidimensional scaling ................ .... 159 XlV

PAGE 15

Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy REHABILITATION OF DEGRADED TROPICAL FORESTS IN INDIA S WESTERN GHATS : SILVICULTURAL AND SOCIO-ECONOMIC IMPLICATIONS OF MULTIPLE SPECIES PLANTATIONS By Donald Ian Flickinger December 1997 Chairman : Nigel J H Smith Major Department: Geography This research examines the role of multiple species plantations (MSPs) in rehabilitation of Indian tropical moist deciduous forests, as evaluated by both silvicultural and community resource use criteria The silvicultural study investigates the effects of tree species and duration of exposure to understory conditions on shoot growth rates of underplanted tree seedlings An initial survey conducted in 1990 evaluated shoot height and basal area growth rates of native hardwood seedlings after one two and three years of exposure understory conditions in MSPs Local foresters opinions about the shade/understory tolerance of many native tree species was also solicited Using the information I selected one understory-tolerant and one understory-intolerant species for experimental study. Seedlings of these two species xv

PAGE 16

were experimentally released after one two and three years of growth beneath MSPs and their growth rates measured during one year after release Growth rates of unreleased control seedlings were also measured over the same one year period In a second experiment I compared the relative effects of aboveground and belowground competition on shoot growth rates of the understory tolerant species The relative effect of soil fertility on seedling shoot growth was also assessed. The effect of state-managed MSP programs on gender caste and age based use of forest resources forms the forest resource use component of this research Historical development ownership and use of India s timber and non-timber resources in northwestern Karnataka State are first described Contemporary attitudes towards and use of non timber forest resources in minor forests before and after their conversion to MSPs are then disaggregated by gender caste and age Differential effects of modern state reforestation programs on local resource user groups of interest are derived from two community surveys Gender and caste-based non-timber resource use priorities that have been neglected in previous state reforestation programs are identified Jo i nt state forest departme n t local community negociations centered on collection presentation and analysis of spatial data are introduced as a strategy to catalyze and guide future forest resource use decision making XVl

PAGE 17

CHAPTER 1 INTRODUCTION This work was stimulated by the notion that degraded tropical forest systems can and should be rehabilitated according to ecological principles without imposing economic hardship on forest-dependent people in the process While instances of promising tropical reforestation ef f orts are frequently cited (e g ., Food and Agricultural O r ganizatio n o f the United Nations 1989 Agarwal and Narain 1989 Cernea 1985 Murray 1983 Nesmith 1991, Poffenberger 1990) until recently few programs have emphasized the role of local forest dwellers in program conception implementation or enjoyment of the benefits they produce (Ayuwat 1993 Dhar et al 1990 Malhorta and Poffenburger 1989 Noronha and Spears 1985 Pathan et al 1990 Singh 1987). How then can reforestation programs in the tropics be ecologically sound while meeting the needs of local people? This two-part question guides the study that follows To address both parts of this question field research site selection had to be limited to areas where forest rehabilitation efforts were already underway, and in proximity to rural forest dependent communities A two-year search led to the selection of a reforestation site in India s Western Ghats where the application of a dual ecology/community welfare research agenda was deemed feasible The area is Karnataka State s Uttara Kanada (North Kanara) District where a multiple species plantation 1

PAGE 18

2 (MSP) reforestation program is underway A decade of Karnataka Forest Department (KFD) refinement of MSP techniques over thousands of hectares in North Kanara District was already producing both silvicultural and ecological impacts when this research began in mid-1991. Two separate but linked sets of research questions were formulated to address the ecological and community welfare impacts of forest rehabilitation using MSP silviculture The initial focus of this work was to document and test the degree to which MSPs facilitate recovery of North Kanara s tropical moist deciduous forests The complementary focus centered on two surveys about local perceptions of forest resources and the effect of MSP silviculture on forest-dependent communities in North Kanara This research concludes by identifying several ecological merits of MSPs, while documenting that MSPs are often disliked, or at least misunderstood by local forest dwellers Local perceptions are shown to vary according to survey informants caste gender and sometimes age Conclusions drawn from the social surveys provide a framework for understanding differences in local perceptions about forest resources how they are utilized and local recommendations for forest rehabilitation The remainder of this introductory chapter describes my silvicultural and social survey research agendas how they are related and the questions that have guided both inquiries It also describes the research area the MSP silvicultural system,

PAGE 19

3 and Terkanahalli Village where forest resource-use survey data were collected Chapters 2 through 4 describe the relevance and specific aims of the silvicultural study, study design and implementation and study results and associated ecological impacts of MSPs, respectively Chapter 5 reviews the historical conflict between the Indian state and local communities over forest resources Chapters 6 and 7 describe the development of two community forest resource use surveys their implementation and presentation and discussion of survey responses Chapter 8 presents a spatial approach to participatory decision-making about future forest resource use Joint forest department/local community workshops emphasizing the collection, presentation and analysis of spatial data are introduced as a strategy to catalyze and guide collaborative forest resource management The ideas for this approach evolved from my collaboration with both foresters and local people in carrying out this dual research agenda Forest Rehabilitation and the Needs of Forest Dependent Communities : A Dual Research Agenda The ecological importance of Indian forests their protection and rehabilitation and the undesirable consequences of their disappearance (Bentley et al 1987) are well-understood by those who live near the remaining tropical forests of peninsular India (Nair 1984) During the 1980s concern over the

PAGE 20

4 effects of deforestation of India s watersheds spurred international financing of social forestry programs to reforest 45 million hectares (ha) of degraded Indian uplands Total recommended outlays to protect India s tropical forest resources amounted to US$ 1 2 billion for 1987-91 or 23 percent of investments recommended to save tropical forests worldwide (World Resources Institute 1985) The primary operational response of Indian state governments to shrinking forest areas has been the conversion of degraded forest lands into plantations By 1990 India boasted 18 900 000 ha of plantations : a figure that continued to increase by 1 441 000 ha annually during the early 1990s (World Resources Institute 1994) This represents the largest commitment to plantation silviculture in the tropics Reforestation efforts notwithstanding annual rates of deforestation in India increased steadily during the 1980s: 339 000 ha/year for the decade versus 147,000 ha/year for the period 1981-85 (World Resources Institute 1994) Menon (1986) calculated that deforestation rates in the Trichur region of the southern Western Ghats accelerated by 50% between the years 1960 and 1984 compared to 23% for the years from 1930 to 1960 This loss has amounted to a cumulative contraction of Trichur s forest area from 392 km 2 in 1930 to 130 km 2 in 1984 Concern about Western Ghats deforestation spawned a Karnataka Forestry Department (KFD) initiative in 1982 to rehabilitate deforested sites in an ecologically sound and socially beneficial way (Shyam Sunder et al 1986) Local foresters call these replanted areas ''miscellaneous plantations''

PAGE 21

5 but I have named them multiple species plantations (MSPs) because the technique comprises simultaneous outplanting of numerous native hardwood tree species with faster-growing nitrogen fixing naturalized tree species on degraded sites These sites are usually located within KFD jurisdictional zones called minor forests : areas where local people have historical non-timber usufruct rights (see Chapter 5 for the history of minor forest designation and utilization) Recurrent income-generating thinnings of the fast-growing overstory species begin in the seventh year after outplanting These thinnings progressively remove MSP canopy trees releasing companion saplings from a shaded understory environment Both state foresters and local people ha v e a stake in the successful rehabilitation of degraded forests by using MSP silviculture. Foresters hope to quickly establish several valuable hardwood tree species on non-productive state forest lands while generating income from commercial thinnings Local people are the designated beneficiaries of fuelwood branches and mulch resulting from plantation thinning operations (Shyam Sunder et al 1986) If workable this sharing of benefits will promote the popular i t y and future success of M SP programs among Karnataka s foresters and villagers alike Have MSPs performed as intended since their inception providing expected benefits to both villagers and foresters? Do MSPs produce undesirable outcomes? And if so can MSP silviculture be improved to enhance benefits to both of these groups and to the Indian environment? These questions guide

PAGE 22

6 both the silvicultural and community forest resource-use portions of this study The study s silvicultural component focuses on the effects of species and duration of understory exposure (i e how long native hardwood seedlings have been growing beneath a canopy of faster-growing trees) on understory seedlings shoot growth rates before and after canopy removal Relative growth rate data interviews and personal field observations are used to distinguish the growth characteristics and temporal differences in understory tolerance of two native hardwood species One species is characterized as tolerant of understory conditions, while the other is less-tolerant (Kadambi 1956) Study results point to management guidelines that maximize seedlings growth rates after outplanting in MSPs The effects of state-managed MSP programs on caste gender, and in some cases age-based use of forests guide the forest resource-use survey component of this research Historical development, ownership and use of India s timber and non-timber resources describe the setting in which two surveys were made Current local knowledge and perceptions of non-timber resources are then analyzed by caste gender and age in both surveys one of 122 and the other of 37 rural informants These surveys highlight how knowledge of forest resources and perceptions about MSPs vary according to these three variables The surveys pay special attention to perceptions about unrehabilitated minor forests Minor forests have been historically available to local people for utilization of non-timber resources Today they are

PAGE 23

7 uniformly degraded making them prime candidate sites for government MSP reforestation programs The Research Area The research area is within the Sirsi Forest Division a management unit in the Kanara Forest Circle of the Karnataka Forest Department (KFD) Uttara Kanada District India (see 2 Figure 1-1) This Forest Circle contains 8 800 km of statemanaged reserved forest (14-15 N 75 E) with elevations ranging from 450-900 m above sea level The seven month monsoon brings 1700-2100 mm of precipitation mostly between June and September Mean annual temperature is 27 mean temperature of the coldest month is 24 5 and the mean minimum daily temperature of the coldest month is 19 c (Pascal 1988) The Dharwad System is the name given to the ancient metalliferous metamorphic rock that underlies the research area It is rich in iron manganese and in some locations in copper lead and gold This matrix rock is derived from ''ancient sediments conglomerates, more or less ferruginous quartzites greywackes, schists and limestone" (Pascal 1988 : 5) A heterogeneous mixture of gneiss and different kinds of intrusive granites also dot the Karnataka Plateau Area soils have been classified as eutric nitosols (FAO World Soils Map 1988) or alfisols (Sanchez 1976) and are often paleustalfs due to their deep argillic horizons and the influence of pronounced wet and dry season moisture fluctuations

PAGE 24

Uttara Kanada District, India (X) I (J Meter s 0 1000D00 Figure 1-1 Uttara Kanada (North Kanara) District Karnataka India

PAGE 25

Uttara Kanada District India Forest Types and Forest Conversion Forest/Landuse Type closed_forest open_forest D degrodecLforest farmland/ plantations K rn 0 20 40 Figure 1-2 Forest types a n d forest conversion Uttara Kanada District Karnataka India Source : Kar n ata k a Forest De p artme n t Maps Division Aranya B h avan Bangalore

PAGE 26

10 The largest urban center in the Sirsi Forest Division is Sirsi Town Sirsi and its surroundings had about 40 000 inhabitants in 1981 : a figure that grew to 80 000 by 1992 (Sirsi Tax Collector s Office pers com ) Sirsi had a population 2 density of 100-200 persons per km in the mid-1980s (Pascal 1988) Numerous villages dot the countryside outside of Sirsi each bordered by state reserved forest lands Terkanahalli Village where the forest resource use surveys were carried out, is located six km east of Sirsi along Banvasi Road By Indian standards Sirsi s environs are not densely populated helping to explain why three-fourths of this hilly region is still forested (see Figure 1-2) Multiple Species Plantations (MSPs) In 1982, Karnataka State Forester A N Yellappa Reddy led KFD foresters in adopting MSP silviculture as a promising strategy to rehabilitate degraded forests in northwestern Karnataka Degraded minor forests are prime candidates for MSP silviculture because they demonstrate limited ability to naturally regenerate themselves under present use regimes After being bounded by cattle exclusion trenches and receiving transplantation holes with downslope water collection pits these areas are planted with nursery-grown seedlings of Acacia auriculiformis Casuarina equisetifolia or a mixture of these naturalized species Inter-seedling spacing has varied over the years from one to three meters (10 000 to 1089 stems/ha) according to local site conditions and management objectives

PAGE 27

11 Both species are known for their rapid initial growth fuel wood quality wide range o f soil pH tolerance d rought-hardiness and their ability to fi x nitrogen (Davidson et al 1989 M idgley and Vivekanandan 1 986) W hat distinguishes M SP silviculture is the simultaneous planti ng o f n ative tropica l ha r d w ood species (see Table 11 ) w ith o n e o r b ot h of th ese n itro gen-fix i ng s p ecies hence the term multiple species plantations Table 1-1 Native h ardwood species often i n corporated into Mu lti p le S p ecies Pl an tations ( M SPs) Species Name Family Local Name Spondias pinnata Anacardiaceae umba da, hog plum Wrightia tinctoria Apocynaceae hale, dhantappala S tereospermum xylocarpum Bignoniaceae kharisingha pann1.mur1.nga Bombax ceiba Bombacaceae kapok semul Cordia McCloudii Boraginaceae hadanga Anogeissus latifolia Combretaceae dindal nJama Terminalia ar1una Combretaceae hole matti kulamaruthu Terminalia balerica Combretaceae tare ', thaanni myrobalan Terminalia paniculata Combretaceae kindal pullamaruthu Terminalia tomentosa Combretaceae mutti karimaruthu Albizia procera Fabaceae jalavaka s1r1.s Dalbergia latifolia Fabaceae veeti rosewood s1sum Emblica officin alis Fabaceae nelli myrobalam Ougenia dalbergioides Fabaceae karimut tul Pterocarpus marsupium Fabaceae honne ', venga bijasal

PAGE 28

12 Table 1-1-continued Species Name Family Local Name Xylia xylocarpa Fabaceae jamba, irul Lagerstroemia flosreginae Lythraceae holedasal, jarul Lagerstroemia lanceolata Lythraceae nundi venteak Syzygium Myrtaceae neral neralu cumun1. Adina cordifolia Rubiaceae heddi haldu Mitragyna parviflora Rubiaceae kalum nirkadambu Sapindus emarginata Sapindaceae antualah ri tha soapnut Grewia tiliafolia Tiliaceae dardussal, dhaman Gmelina arborea Verbenaceae shivani, gamar1. grandis Verbenaceae thekku Tectona sagowann1., Vitex ultisima Verbenaceae bharanugi myla milla Presumably the faster-growing Acacia and Casuarina seedlings create a protective understory environment for hardwood seedling establishment and growth while the m selves becoming a source of fuelwood and poles Commercial thinni n g of Acacia and Casuarina begins approximately seven years after outpla n ting Each successive thinning provides enhanced gro w ing space releasing hardwood species in the plantation understories The silvicultural prescription calls for removal of all Acacia and Casuarina by about the fifteenth year Due to the initial crowding the residual mixed stand contains hardwood saplings and poles with straight boles This MSP approach is favored over planting of native hardwoods alone on exposed mineral soil since

PAGE 29

13 the absence of Acacia and/or Casuarina has often resulted in mortality or slowed stem growth of seedlings Unsuccessful state forest plantations seen by the author at Thirthalli Karnataka clearly make this point Analysis of Sirsi Forest Division office records indicates that from 1984-1992 over 12 000 ha of degraded forests received MSP treatment in the Division Eighty percent of these MSPs occur on a portion of the Division s 45 000 ha classified as minor forest lands The remaining MSPs are located within degraded parts of reserve forests This planting effort covers 30 percent of the total area of previously degraded forests in the Division Approximately 12,000 ha of degraded forests remain targeted for MSPs Another 12 000 ha are not sufficiently degraded to warrant MSP treatment at present Three thousand hectares of degraded forest will not receive MSPs at the request of local forest dwellers Explanations for this local attitude towards MSPs will be considered in Chapters 6 through 8 the forest resource use portion of this study Gender and Caste-based Analysis of Forest Resource Use In their analysis of environmentally sound and participatory development Agarwal and Narain (1989) rede f ine rural Indian poverty not as a shortage of cash but as a shortage of biomass resources to meet basic survival needs These authors document absolute reductions in biomass productivity over India's non agricultural lands, contributing to increased poverty among rural people

PAGE 30

14 Rural women being the primary managers and processers of biomass resources for subsistence are often the most immediate victims of deforestation in and around Indian villages (VIKSAT 1990) Women often have the greatest practical knowledge of local biomass resources (Rocheleau 1988 Molnar and Schreiber 1989 FAO 1989) yet are seldom consulted about reforestation projects intended to be n efit their families (FAQ 1983 Hoskins 1983 Rocheleau 1988 Spring 1988 Williams 1985 Nesmith 1991 Shi v a 1988) To become socia l ly oriented fo r estry programs must therefore expand their focus beyond productivity issues to include program impacts on local users of forest resources particularly women Women may be excluded from joining forestry programs due to gender-based biases of extension methods (Spring 1988) or because socio-economic const r aints make their participation difficult (Hoskins 1983) Such barriers to women's participation must be recognized and consciously addressed if programs are to accommodate all local people As with gender people may be differentially affected by forestry programs on the basis of caste or ethnicity Caste based response to MSPs is variable and is predicated on inter caste differences in forest resource knowledge and use Gadgil (1989) describes these caste-based differences in the region of this study where he found that nine endogamous caste groups have diversified and partitioned their use of forest resources He cites the fo l lowing examples : Chamagars make mats and brooms from Phoenix palms ; Badigars and Holeswars make baskets a n d rope from Dendrocalamus strictis bamboo ; Gudigars use sandalwood and other

PAGE 31

15 tree species in woodcarving; Achari use different tree species than Gudigars to make tool handles; Holeya make fishing tackle using Hemidesmus indicus ; and Maratha and Jadamalli make brooms from Lantana camara Forestry program impacts within particular caste groups are also expected to differ with respect to gender. In some situations a person s age may shape his/her knowledge and opinions about forest resources and their rehabilitation This study employs two survey instruments to distinguish differences in local knowledge and use of minor forests both before and after they are converted to MSPs The surveys also encourage informants to recommend ways to address their needs when they are adversely affected by MSPs. Together the two surveys attempted to 1) Identify caste and gender-based differences in local community knowledge and use of non-timber forest resources; 2) Identify groups of interest that benefit the most from MSP programs those groups that benefit the least, and those that remain unaffected ; 3) Determine whether MSPs provide enhanced benefits to local gender and caste-based groups when compared to unrehabilitated minor forest lands ; 4) Explore how MSP silviculture and management can be altered to benefit critically affected gender and caste groups, those whose subsistence derives from access to and use of forest resources. Village Study Area The multi-caste village of Terkanahalli was selected for study of local forest resource use practices Terkanahalli lies six km east of Sirsi Town on the Banvasi Road The Sirsi Taluk

PAGE 32

16 Revenue Department maintains birth death and land deed records dating from 1825 of the original inhabitants of Terkanahalli Village A temple there consecrated to Virabhadra resembles the architectural style of Belur and Halibid Temples ca 1100. This indicates ancient settlement of the site. The village proper is divided into eight residential groupings or hamlets, the largest being Terkanahalli Gram. Fourteen caste groups reside in Terkanahalli making it a mixed caste village In 1992 140 families lived in all of the hamlets 122 of which were included in the forest products use survey The average local landholding was approximately 1 0 1 2 ha More than 50 percent of all families were landless and therefore normally worked as agricultural laborers for land-owning families or the KFD Some landless people also worked in nearby Sirsi The largest landholding in the area was a joint family holding of 15 acres The owners were absentee residents of Sirsi Town MSPs are found throughout Terkanahalli the oldest having been planted in 1987 Villagers are therefore familiar with this silvicultural innovation of the KFD. While local opinions vary concerning the specific impacts of MSPs on village life there is consensus that MSPs are speeding the depletion of valuable non timber forest resources Reduced biodiversity and tenure/usufruct explanations for this loss clearly emerge from the community forest resource use study Remedies to this problem are suggested by survey informants and these form the basis for a participatory forest resource management model presented in the concluding chapter of this dissertation

PAGE 33

CHAPTER 2 FOREST REHABILITATION VIA MULTIPLE SPECIES PLANTATIONS (MSPs) : THE SILVICULTURAL STUDY In this chapter I describe the relevance of Karnataka s MSPs to growth studies of tree seedlings in a forest understory environment Both theoretical and practical aspects of seedling shoot growth beneath a forest canopy are reviewed emphasizing effects of extended exposure to understory conditions This leads to the specific focus of this study : the effect of different periods of exposure to understory conditions on shoot growth rates of two tropical tree species How varying periods of understory exposure might affect seedling shoot growth after release from understory conditions is also discussed Finally, I present a series of research questions that relate duration of understory exposure species type and experimental release from understory conditions to seedling shoot growth rates over a 12 month research period Tree Seedlings and the Forest Understory The forest understory environment presents both opportunities and challenges to young tree seedlings Short lived opportunistic light demanders longer-lived light-demanders (Schulz 1960), and some primary forest species cannot germinate or survive in an understory environment Many primary forest 17

PAGE 34

18 species do however benefit from canopy shade during their establishment phase (Bazzaz 1980) Large vapor pressure deficits desiccating winds extreme temperatures and radiation loads are reduced beneath the forest canopy Understory conditions allow shade-tolerant seedlings to establish root systems that can support further growth of photosynthetic stern tissue Once established, however, seedling growth rates in the understory inevitably slow as a result of competition from neighboring trees (Marquis 1981 Shukla and Ramakrishnan 1984) and herbaceous vegetation (Krajicek 1975) Canopy thinning studies have yielded a doubling in stern growth rates of seedlings and saplings two to three years after release treatments (Erdmann and Peterson 1972) but may also have the inverse effect of depressing height growth (Erdmann et al 1975) in favor of diameter growth depending on the amount of canopy removal Removal of canopy trees may also result in seedling stress or even mortality if exposure occurs too abruptly or if seedlings are insufficiently established This shock effect is often because the ratio of root absorbing surface to transpiring surface (fine root : leaf surface ratio) suitable for shaded conditions does not increase quickly enough to replace shoot transpiration losses (Kramer and Koslowshi 1979) after release A seedling water deficit develops causing stomatal closure and a decrease in carbon fixation ; the reduced capacity for transpirational cooling can also result in heat stress and death Shelterwood and related silvicultural systems are based on the incremental removal of canopy trees to attenuate

PAGE 35

19 environmental stresses on seedlings that occur with instantaneous release Support for this silvicultural approach comes from Marquis (1982) who found that Allegheny hardwood seedlings originating under shelterwood canopies survived overstory removal better than seedlings from natural closed stands He also recommended that seedlings in natural stands should be at least three years old and 10 to 15 cm tall to survive after release by clearcutting Seedling age on shelterwood sites in contrast had no effect seedlings survival after canopy removal With some notable exceptions such as Betula alleghaniensis in the Great Lakes region and Tsuga heterophylla in the Cascade Range of North America (Eyre and Zillgitt 1953) sustained exposure to understory conditions is usually disadvantageous to tree seedlings Suppressed seedlings suffer increased pest attack and/or fungal decay as they lose vigor (Erdmann 1979) They may also be overtopped by more shade tolerant species In Michigan Acer saccharum (sugar maple) outgrew B alleghaniensis (yellow birch ) after 23 years of suppression (Eyre and Zillgitt 1953) Enhanced growth of understory seedlings in response to release diminishes with age (Marquis 1982) Even though 16-65 year old birch still responded to release (Erdmann and Peterson 1972) trees less than 16 years old had faster growth rates after release Residual effects of prolonged exposure to understory conditions have silvicultural implications In particular silviculturists need to know how well understory tree seedlings recover and grow after release from varying periods of growth

PAGE 36

20 suppression Forest economists explore this question in practical terms when evaluating precommercial thinning operations : if precommercially released trees consistently grow larger in average diameter at breast height ( DBH) than nonreleased trees does this diameter increase at an early age result in the released trees maturing at a significantly earlier age than nonreleased trees? If true this could result in shorter rotations and with shorter rotatio n s economic evaluations may become more favorable to applying crop-tree release treatment (Smith and Lamson 1983 : 3) If the effect of duration of suppression on seedling shoot growth rates is known silviculturists can define appropriate species based rules for seedling release treatments This in turn would hasten the re-establishment of native hardwood forests on degraded sites which is the long-term objective of Karnataka foresters in establishing MSPs on minor forest sites MSPs offer unique opportunities to investigate the effects of species and duration of understory exposure on shoot growth rates of understory seedlings in tropical forests Several silvicultural attributes of MSPs make this possible : 1) size-graded seedlings representing more than 20 native species and two naturized nitrogen-fixing species were used to reforest two percent of state forestlands in the research area each year from 1982-1991 totaling 20 million seedlings over 12 000 ha ; 2) understory seedlings comprise several known age classes and were growing beneath MSP canopies for known periods of time ; 3) overstory stand conditions are as uniform as plantation silviculture permits (i e similar overstory species grown at similar planting densities on similar soils

PAGE 37

21 in the same climatic region), to minimize extraneous variation ; 4) canopy tree spacing and size in one two and three year old plantations permitted manipulation of canopy openness via canopy tree with ropes ; 5) soil conditions and tree spacing permitted 0 60 m deep trenching of at least 3 2 m 2 of ground surface surrounding target seedlings ; 6) plantation stands are normally well-protected by the local forestry department from theft arson and damage from cattle Previous studies have been designed to assess the relative effects of root versus shoot competition on woody plant growth using partitioned release experiments (e g ., Christy 1986 Horn 1985 Putz 1992, Putz and Canham 1992 Shainsky and Radosevich 1986 Strothman 1967 Wilson 1988 Zeide 1980) I know of no studies that have addressed the effects of duration of exposure to competition on subsequent growth rates of released woody perennial species (but see Shukla and Ramakrishnan 1984) Silvicultural Study Focus This study assesses how shoot relative growth rates (Shipley 1989) of two species of tropical seedlings change during increasing periods of exposure to understory conditions and after experimental release from them Release treatments include soil trenching (T) canopy guying (G), and trenching and guying (T + G) combined The following questions served to guide this study and define hypotheses for investigation 1) Do increasing periods of exposure to understory conditions slow growth rates of the two understory seedling species of interest?

PAGE 38

22 2) Do growth rates of a reputedly suppression/shade tolerant species stabilize while growth rates of a reputedly less shade-tolerant species continue to slow with increasing periods of continuous understory exposure? 3) What is the effect of one two and three years of continuous understory exposure on within species and between species seedling growth rates in the first year after release from understory conditions? 4) Does belowground competition inhibit growth rates of understory seedlings more than aboveground competition when understory exposure time is held constant? Question 1) can be addressed by within-species comparisons of seedling shoot growth rates for control treatments in plots of increasing age address As more numerous faster-growing nitrogen-fixing trees progressively occupy growing space above ground and below ground in MSPs shoot growth rates of understory seedlings are expected to slow regardless of species When tree canopies begin to overlap and root systems intermingle competition for shared space light nutrients and moisture inevitably begins Slowed shoot growth of understory seedlings when it does occurs can serve as a marker of the intensification of resource competition. The search for this horizon of competition can begin in the youngest MSPs those that are one two, and three years old Four year old canopy trees are too large to receive experimental treatments This study was therefore limited to one, two and three year old MSPs Branches of adjacent seedlings planted at 3 m spacings remained completely separated during the first year of MSP establishment I assumed that intermingling of root systems was

PAGE 39

23 also limited during this first year During the second and third years however MSP canopies can reach heights of six to seven m and close Trenching similarly revealed that by the second year lateral roots of neighboring seedlings intermingle If, however understory seedling shoot growth fails to slow during MSPs' second or third year it may be that growth is merely reallocated such as to greater shoot extension at the expense of diameter growth Comparison of shoot height and root collar stem diameter growth data provided information about allocation of growth in understory seedlings Conversely fast-growing overstory trees may create beneficial growing conditions for young understory seedlings Increased litter accumulation nitrogen fixation and retention of soil moisture provide explanations for such ameliorated conditions Many local foresters maintain that MSPs enhance survival and early growth of understory seedlings My observations at several area plantations lacking fast-growing matri x species supported their claim Sustained or enhanced shoot growth of understory seedlings in this experiment would further substantiate the early beneficial effects of MSPs Question 2) can be addressed by between-species comparisons of seedling shoot growth rates for control treatments in plots of increasing age Shoot growth responses are expected to be species-specific as MSPs age as mediated by a species tolerance of understory conditions For example shoot growth rates of a reputedly understory/shade-intolerant species should slow as MSP overstory trees mature while growth of more shade

PAGE 40

24 tolerant species should vary less or stabilize Due to its limited time horizon this study is unable to measure any slowdown in shoot growth of the understory-intolerant species occurring beyond a MSP s third year Question 3 can be addressed by within-species and between species comparisons of seedling shoot growth rates for trench and guy (T+G) release treatments in stands of increasing age In the first year after experimental release from one two and three years in the MSP understory each species is expected to achieve enhanced shoot growth over that of controls for that species for the same year Within-species shoot growth is also expected to increase uniformly after release regardless of understory exposure time Recovery capacity of young seedlings, particularly understory-tolerant species should not be altered by understory exposure that varies by only one to three years Even the less understory-tolerant species should recover uniformly from these small differences in understory exposure time Most seedlings sustain understory exposures much longer than three years in natural forests and still respond to growth opportunities provided by the death of overstory trees (Hartshorn 1982) Shoot growth of the less-tolerant species should however respond more favorably to release treatment than does the more tolerant species, due to the farmer s adaptive preference for open unimpeded growing space Question 4) can be addressed by comparison of growth responses to factorial treatments (i e ., control trench guy, trench and guy) and one further contrast (NPK fertilization)

PAGE 41

25 the extent to which aboveground and/or belowground factors inhibit understory seedling shoot growth in MSPs This factorial experiment was imposed only on the more understory/shade tolerant species in the oldest (three years) MSPs assuming that similar results could then be expected for less-tolerant species The research area s pronounced wet and dry monsoon climate produces a marked growing season from June to December followed by a draughty semi-deciduous/dormant season from January to May Seedlings in forest nurseries grow quickly during the hot dry months only because irrigation is provided Year-round canopy openness from nine to 37 percent and abundant sunflecks beneath the oldest MSPs studied lead to the prediction that soil moisture limits understory seedling shoot growth rather than sunlight Enhanced evapo-transpiration caused by canopy guying (G) should therefore limit seedling shoot growth not soil trenching (T). Nearly all MSPs are located on paleustalf soils (FAO World Soils Map 1988) having litter layers that thicken to 3-7 cm by a plantation s third year Organic matter in the top 10 cm of 12 MSP soils varied from 2 0 to 7 3 percent by soil weight and averaged 3 1 percent (Walkley-Black dichromate methodology, IFAS Analytical Research Laboratory University of Florida) All macro and micro-nutrients were found to be in sufficient supply for plant growth The NPK treatment is therefore not expected to increase the shoot growth of understory seedlings

PAGE 42

CHAPTER 3 SILVICULTURAL STUDY : SITE SELECTION AND IMPLEMENTATION In this chapter I describe the silvicultural study Formulation and implementation of my research plan evolved from a 1990 tour of northwestern Karnataka s Sirsi Forest Division Experimental species and research sites selected for execution of the plan are discussed I then describe the process of experimental plant selection, imposition of experimental treatments plot maintenance during the 1991-92 research year, and final plant harvest and processing procedures Finally I describe calibration harvests that were used to estimate initial shoot dry weights of experimental plants that were not destructively harvested until the end of the year-long experiment Research Area Selection I visited 12 Multiple Species Plantation (MSP) plots during a January 1990 tour of the Sirsi Forest Division Increases in shoot height and root collar basal area were easily distinguished among native tree seedlings that had been growing one two or three years within MSPs These observations were discussed with local foresters and their opinions about the relative shade or understory tolerance of many native tree species were noted There was agreement that all species achieve maximum growth when 26

PAGE 43

27 growing in forest gaps or openings but that some species tolerate shade better than others. The most frequently planted species were classified as either shade tolerant or shade intolerant ". Shade-tolerant species included Lagerstroemia lanceolata (nundi) Terminalia paniculata and Dalbergia latifolia Terminalia tomentosa (mutti) and Pterocarpus marsupium were considered more shade-intolerant species Proposed experimental treatments of tree seedlings in MSP understories were tested using canopy guying and soil trenching techniques Guying involved pulling back and securing all canopy trees that overtopped a target tree This procedure was tested in a three-year old MSP and found to be feasible To test proposed soil trenching techniques, two year old L lanceolata and T tomentosa seedlings were transplanted into 60 X 60 X 60 cm pits in the Kalve Nursery of Sirsi Forest Division The sides of these pits were lined with 30 guage plastic sheeting (Biradar Plastics Malmaddi Dharwad 580 007 India) Excavation of these trenches 17 months later was done to assess possible confounding effects of plastic root barriers on seedling root growth in planned experimenta l trenching treatments All five T tomentosa and five L lanceolata seedlings survived this soil trenching pre-test Both species more than tripled in stem height indicating that changes in shoot growth would be distinguishable after a 12 month study Excavation of roots indicated that lateral roots of four seedlings had extended to the plastic barriers and were growing along them The distance between plastic barriers and seedling bases was therefore increased to

PAGE 44

28 one m in experimental trenching treatments Excavation also showed that the 30 guage plastic used as root barriers around the seedlings had partially deteriorated after 17 months under ground. I therefore chose to use thicker 60 guage plastic sheeting in all trenching treatments Trenching and guying preliminary studies convinced me that these treatments could be successfully imposed on one two, and three year-old MSP plots available in the Sirsi Forest Division There was insufficient time during this initial visit to select specific tree species or MSP plots for the field study Research Site Selection In early May 1991 Sirsi Forest Division officers provided information about all plantation plots within their five jurisdictional forest ranges These plots ranged in size from five to 90 ha, with an average area of 25 ha It soon became clear that plots planted prior to 1987 cou l d not be considered for this study From 1982 to 1986 MSP silviculture had evolved by trial and error and was not consistent in its application Plots were few and scattered while the types of species used and their planting densities were not uniform Karnataka Forest Department Officers S S Hegde and S D Sumshekar tallied all 315 forest division plantation plots planted from 1987 through 1991 Numbers of new plots planted each year from 1987 1991 appear in Table 3-1

PAGE 45

29 Table 3-1 Sirsi Forest Division plantations: number of plantations planted from 1987-1991 YEAR PLANTED 1987 1988 1989 1990 1991 PLOTS PLANTED 72 40 73 80 50 Two hundred three of these stands were located in minor forest areas 106 stands were in reserve forests and six stands were in forests where local spice garden owners have historical tree lopping privileges so-called soppina betta forests. Two hundred seventy-nine of these stands are true MSPs while 36 stands were planted with either Bambusa spp (bamboo) Santalam album (sandalwood) Acacia auriculiformis (acacia) Casuarina equisetifolia (Australian pine) or a limited number of native species All 279 MSP stands were considered for their suitability as experimental plots Most were undesirable for the purposes of this research due to one or more of the following : individual stands were isolated from other MSPs ; seedling density was too low or seedling mortality was too great; locally abundant species of seedings were not commonly found in other MSPs; faster-growing canopy species were uncommon or irregularly spaced ; residual trees with spreading canopies were too abundant; micro-climatic irregularities of slope, aspect or soil rendered plots atypical ; or tree seedlings were sometimes damaged by excessive cattle and/or human disturbance From a candidate list of five geographical areas or blocks, four were chosen Siddupur Hunsekopp Aksal and Heggekopp (see Figure 3-1) Hunsekopp and Aksal blocks are west and north of

PAGE 46

30 Sirsi Town, respectively Siddapur and Heggekopp blocks are both south of Siddapur Town The fifth Hulekal block contained too many large residual trees for inclusion and was rejected The four acceptable blocks had similar seedling spacing in intra block plots (two or three meters), and contained a chronologic suite of MSP plots planted during 1988 1989 and 1990 (see Table 3-2) The youngest (i e. most recently planted) series of plots (1988-90) was chosen for study in an attempt to track the onset of slowed shoot growth from the earliest possible moment seedling outplanting from nurseries Table 3-2 Local names of 1988-91 research plots located within each of four research blocks Date Planted SIDDAPUR HUNSEKOPP AKSAL HEGGEKOPP 1988 MUGDUR HUNSEKOPP PUTANMANE MUSWALLI 1989 PADWANBAIL HUNSEKOPP AKSAL HEGGEKOPP 1990 NAGARBAWI YECHADI ANDALLI HEGGEKOPP Area reconnaissance also indicated that no other three-year interval provided more than three suitable plots (i e one experimental block) for study Trees in plots older than three years were often too large to easily permit the canopy guying and soil trenching treatments employed in this study

PAGE 47

Uttara Kanada District, India Major Cities and Research Blocks OANOEU e YELLAPUR M UNDGDO ANKO BLOCK 111 BLOCK II : RSI IV BHATKA U ttara K anado Di s tri c 1 Reseorch Blocks 0 20 40 Figure 3-1 Location of research blocks and Uttara Kanada cities Source : Karnataka Forest Department Maps Division Aranya Bhavan Bangalore

PAGE 48

32 Each of the age-specific plots contained numerous individuals of L lanceolata and T. tomentosa These two native species were chosen for detailed study because the former is known locally to be relatively shade tolerant while the latter is considered shade intolerant and because an abundance of outplantings of these two species was found in all experimental blocks and plots Working with two species of varying shade/understory tolerance allows for a range of potential seedling shoot growth response to a developing plantation environment Silvicultural Experiment Design This study was designed to investigate the impact of MSP plantation age and associated temporal effects of plantation development on shoot growth rates of understory seedlings The experimental design appears in Figure 3-2 Each of the four geographical blocks contained at least one plot that had received MSP treatment in each of the following years : 1988 1989 and 1990 The numbers and kinds of experimental treatments assigned to experimental seedlings in 1988 plots and in both 1989 and 1990 plots is shown in Tables 3-3 and 3-4 respectively

PAGE 49

BLOCKS (4 locations) 1990 1989 1988 SUPPRESSION INTERVAL (whole plots) 33 Suppression Tolerant Species Suppression Intolerant Species CONTROL CONTROL Trench & Guy ff+ G) Trenching & Guying ff+ G) Trenching ff) Guying (G) NPK Feltilization for suppression tolerant species only TREATMENTS (split plots) Figur e 3 -2 Si lvi c ulture experiment design : blocks wh o le pl ot s a nd split pl o t s Table 3-3 Number of treatments assigned to e x perimental units in 1 988 MSP pl o ts by species CONTROL TRE N C H GUY TRENCH & GUY FERTILIZATION Lagerstroemia lanceolat a 4 4 4 4 4 Terminalia tomentosa 4 0 0 4 0 Table 3 -4 in 1989 and Number of tr e atm e nts ass i gned 1990 MSP plots by species to experiment a l un its CO NTR O L TREN C H & GOY Lagerstroemia lanceolata 4 4 Terminalia tomentosa 4 4

PAGE 50

34 Only L lanceolata received all four factorial treatments and the fertilization contrast and only in the oldest 1988 MSP plots (see Table 3-3) These oldest plots under study offered the greatest potential for detection of slowed seedling shoot growth resulting from resource competition, given that physical crowding above and below ground increases as plantations mature For this reason I decided to impose all treatment levels on the 1988 plots and to do this for the reputedly more shade/understory tolerant species L lanceolata If slowed growth could be detected for the more tolerant species then L lanceolata s response to crowding should apply to other less-tolerant species The reputedly less-tolerant T. tomentosa received only the combined soil trenching-canopy guying and control treatments in the 1988 plots The canopy guying by soil trenching factorial design explores the contribution of both aboveground and belowground factors to changes in seedling shoot growth for the year after imposition of treatments The fertilization treatment tests whether soil macro nutrients or soil moisture is more limiting to seedling shoot growth in MSPs during the year after experimental treatment The combined canopy guying and soil trenching treatment (see Figure 3 3) mimics a release event that seedlings normally experience as a result of plantation thinning operations Seedling shoot growth was monitored during the year following experimental release In the 1989 and 1990 plots both L lanceolata and T tomentosa received only the combined soil trenching-canopy guying

PAGE 51

35 and the control treatments, due to the time and expense of imposing these treatments The five weeks available to initiate the experiment prior to the early June arrival of the monsoon were also too short to establish all 12 experimental plots. Plots in Aksal and Heggekopp blocks had to be established during the monsoon rains of June and July Soil trenching operations became more arduous under wet soil conditions Ultimately, the experimental design was replicated over all four blocks comprising 60 experimental seedlings per block for a total of 240 experimental units Plant Selection and Imposition of Experimental Treatments Selection of individual experimental plants and implementation of treatments began in early May of 1991 I initially walked through the 1988 1989, and 1990 plots in each of the four blocks to assess spatial uniformity of outplanted L. lanceolata and T. tomentosa seedlings Some plots contained uniform distributions of L. lanceolata and T tomentosa throughout while others had few or none of these two species within their boundaries Areas having sufficient L lanceolata and T tomentosa seedlings were entered and a random compass bearing was followed for a random distance between 15 and 20 m Making a right-angle turn at this point I began to scan in front and three m on either side of my path for L lanceolata and T tomentosa seedlings

PAGE 52

36 C ONTROLS '\ i \,f /; J \ \ .. J I \ l/ \ \~ l / /\\/ / \ I \ 1 ., \ / \1 // !-" / ""'' ,.,. ~/ / 7 \ \\ 'v( \ \ \\ \\ \:I \V \V I I 1 J I I I I I \ 1990 1989 1988 J t \1// "'r \ I \ / ~' '\ r I I I \ I ... , \I / ,, / I \ ~ '11 '. T + G Treatment s Figure 3-3 Comparison of control and combined soil trenching canopy guying treatments applied in 1991 to one two and three year old plantations Each candidate seedling encountered was inspected for signs of damage, disease, multiple stems or the presence of vegetation within one m of its base Individuals having none of these deficiencies were flagged for later measurement and treatment When co ming within 20 m of a plot edge, I made a second right angle turn and walked six to seven meters before making a third right-angle turn and then continued the seedling scanning procedure After I marked a sufficient number of candidate seedlings in a particular plot I measured the height and root collar diameter of each seedling. When necessary, soil was cleared from around the base of a seedling to permit two root collar diameter

PAGE 53

37 measurements using calipers the second measurement being at a right angle to the first Length of the primary stem was recorded from the root collar to the apical bud The species of the seedling and its general condition were recorded Each individual was then marked using a labeled laundry tag tied to a length of string and attached to the main stern just above the point of diameter measurement A second labeled tag was attached to each individual midway along its stern to insure future identification. Each individual s location was marked on a detailed plot map Canopy openness was estimated using a hemispherical densiorneter (Lemmon 1956) averaging measurements made above each seedling s main stem at 1 2 rn above ground, while facing in each of the four cardinal directions Soil temperature was measured 5 cm and 15 cm below the surface during midday heat using an analog soil thermometer Experimental treatments were then assigned at random to the marked seedlings in each plot using a random number table The canopy had not yet closed in the most recently planted 1990 plots and little or no guying of matrix Acacia and/or Casuarina crowns was therefore required until six months later after the monsoon Smaller plantation trees could usually be held under tension while being guyed to neighboring tree limbs or stems Canopy openness in 1989 plots varied from 50 percent to 90 percent, and could easily be increased from 85 percent to 90 percent openness by guying Guying became progressively more difficult as plot age increased Three year old Acacia and Casuarina trees in 1988 plantations often had basal diameters of

PAGE 54

38 13 cm or more, and heights of six to seven m Here canopy openness ranged from 9 to 37 percent and could be increased with guying to only 45 percent to 50 percent openness To bend these larger individuals down for guying required climbing more than half way up them, allowing one s body weight to slowly bow tree sterns downwards On more than a dozen occasions the snapping of tree crowns under my own body weight caused falls of three to four meters. Wearing a motorcycle helmet increased my confidence, and perhaps protection, when crowns snapped Guyed treatments were checked and retied during each of the five maintenance visits made to every plot during the one year experiment Reguying usually increased canopy openness a further 15 percent by the time the experiment was concluded Soil trenching was the most difficult aspect of initiating the silvicultural study Each perimeter trench was hand-dug 5060 cm deep, 25 cm wide 7 2 min circumference and positioned 1 0 1.1 m away from the stem of the experimental seedling, at its center Under optimal conditions, four such pits could be dug lined with 60 guage black plastic sheeting (three year durability guarantee from Biradar Plastics Malmaddi Dharwad 580 007 India) and back-filled during a full day of digging One hundred twelve pits were dug in this study taking more than a month for myself and two assistants to complete While digging I noted that most rooting activity occurred in the upper 35 cm of the soil profile including most large lateral roots Roots smaller than 0.5 cm diameter were sometimes observed to extend below a depth of 60 cm, but even these were uncommon For this

PAGE 55

39 reason I concluded that soil trenching would be an effective experimental method to reduce belowground competition for experimental plants although it did not prevent competition deeper in the soil profile Some target seedling roots were necassarily cut during trenching in the oldest 1988 plots, but damage was minimal to target seedling roots in 1 989 and 1990 plots NPK fertilizer was added twice to selected 1988 L lanceolata seedlings first in June and then again in October of 1991 One hundred grams of Jai Kisaan s Sampurna '' 19 : 19 : 19 NPK particle mix (N03 19% P205 19% K20 19% Zuari Agrochemicals Ltd Goa India) were poured into three 30 cm deep 2 cm wide soil auger holes drilled at a distance of 40 cm from each experimental seedling stem This NPK treatment was a planned contrast with the trenching treatment also imposed on 1988 L. lanceolata seedlings Plot Maintenance I visited all e x perimental plants five times during the research yea r to perform pl o t maintenance and to measure seedling growth Maintenance duties included : canopy re-guying operations ; clearing plant bases to permit remeasurement of root collar diameters ; and relabeling individuals that had become difficult to identify The half-way mark of the research year was December 1991 the end of the rainy season I took advantage of this natural break in season to record shoot height and root collar diameter

PAGE 56

40 growth of all experimental seedlings These data allow comparison of understory seedling shoot growth for the wet ( June December) and dry (January-May) portions of the 1991-92 research year I expect that most seedling shoot growth would occur during the wet monsoon and that dry season conditions resul t i n slow or even negative growth due to elevated evapotranspiration and associated stem shrinkage Plant Harvesting Processing and Measurement Destructive harvest of all experimental plants occurred from May 25 June 20 1992 The 1992 monsoon arrived on June 7 and slowed harvest of Aksal and Heggekopp blocks I recorded shoot height root collar diameter and shoot condition for each surviving experimental plant I also measured canopy openness, and soil temperatures 5 cm and 15 cm below the surface To estimate shoot biomass seedlings were clipped at the point of root c o llar measurement, cut into 25-30 cm lengths, sealed in marked envelopes and transported to my house for further processing There shoot fresh weights were recorded using a OW 2000 g No 015 IPA electronic top loading balance (IPA Services Peenya Industrial Estate Bangalore 560 058 India), prior to drying at 70 C (Pearcy 1989) in a Biochem hot air oven (Universal Biochemicals, Sathya Sayee Nagar Madurai 625 003, India ) from two to six days until dry weights stabilized Drying time was a function of shoot diameter, thicker individuals requiring longer to dry to a constant weight

PAGE 57

4 1 Finally 10 individuals each of L lanceolata and T. tomentosa were ashed and the ash weighed to determine average ash content of each species Calibration Estimates Requiring Destructive Measurements Calibration data both species were obtained in the following manner Non-destructive measurements (i e ., shoot height and root collar basal area) of all experimental plants at the May June 1991 start of the study was complemented by destructive measurement of 23 randomly-selected seedlings outplanted into MSPs a year earlier in June 1990. From these 11 L lanceolata and 12 T tomentosa individuals shoot dry weight estimates were calculated for 1990 L. lanceolata and T tomentosa experimental seedlings using root collar basal area regressions These 23 seedlings were used because my 1990 experimental seedlings could not be destructively measured at the study s outset When the study concluded in June 1992 destructive measurements of all 1990 experimental seedlings provided shoot dryweight estimates for experimental seedlings that had already been outplanted for two years when the study began in June 1991 (i e my 1989 experimental seedlings) Similarly destructive measurements of all 1989 experimental seedlings provided shoot dry weight estimates for experimental seedlings that had been outplanted three years prior to the start of the study (i e my 1988 experimental seedlings) (see Figure 3-4)

PAGE 58

Study begins, 1991 -Study ends, 1992 Harvest growth data used to estimate starting biomass of next older seedling cohort 42 1 Harvest 23 non-study 1990 seedlings used to estimate starting biomass of 1990 seedlinqs Planted Age 1 ~ge 2 Planted Age 1 Age 2 Age Planted Age 1 Age 2 Age 3 ~ge 1988 1989 1990 1991 1992 Figure 3-4 Destructive seedling harvest plan used to estimate shoot biomass of one two and three year-old seedlings at the start of the 1991 -9 2 study This strategy of using growth data of younger seedlings collected at the end of the experiment to estimate initial dry weights of the next older cohort of seedlings at the start of the experiment accomplished two objectives It insured that calibration measurements were derived from seedlings found growing within the study s experimental blocks where site cond iti ons were most nearly similar to those of other ex perimental seedlings minimized the destructive impact of this study on seedling regeneration within the research area Table 3-5 contains the calibration equations used to estimate shoot dry weights at the June 1991 start of the It also 3 4 experiment for all three seedling age cohorts Root collar basal area was found to provide better estimates of shoot dry weight than shoot height and was therefore used in deriving the equations in Table 3 5

PAGE 59

43 Table 35 S e edling r oo t c ollar basal area ( cm 2 ) r egressi o n s used to estimate Lagerstr o emia lanceolata and Terminalia tomentosa shoot dry weights (g) at the start of the experiment 1990 1989 1988 L y = -10 727 + 325(x) y = -2 118 + 207( x ) y = -219 6 4 + 79l(x) lanceolata R 2 = 93 4 R 2 = 7 4 3 R 2 = 970 se = 2 02 n = 12 se = 4. 9 4, n = 32 se 26 85 n = 28 T y = -11 070 + 419(x) y = -9 692 + .1 99( x ) y = -50 57 4 + 335( x ) tomentosa R 2 = .955 se 4 4 9 f n = 11 y = shoot dry weight estimate x = root collar basal area R 2 = 7 68 se = 4 21 n = se = standard error of slope coefficients n = sample siz e R 2 = 811 28 s e = 9 27 n = 28 Shoot dry weight calibration estimates for June 1991 when the yearlong study began were used to calculate shoot relative gr o wth rates ( RGRs) a s des c ribed by Evans (1972) and Hunt ( 1 9 78 ) : RGR (grams gram 1 interval 1 ) where H1 = shoot height (cm) root collar basal area (mm 2 ) or oven-dried shoot biomass (g) at the beginning of the experimental interval H 2 = sh oot height (c m ) r oo t collar basal area ( mm 2 ) o r o ven-dried sh oo t biomass ( g ) at the end o f t he experimenta l interval T 2 T1 = experimental measurement interval

PAGE 60

44 RGR an i ndex of efficiency of p l ants as producers of new material (Hunt 1978) permits comparisons of growth for plants of unequal size Here it is equivalent to the slope of the natural logarithm of shoot growth (H) plotted against time (T). This study compares these RGRs with respect to species treatment and MSP age RGR comparisons of shoot dry weights were made for the 12 month study period Shoot height and root collar basal area RGRs were compared over wet (June-December) and dry (January-May ) season periods, and did not require destructive sampling or calibration Testing for differences in RGRs of seedling shoot height, root co llar basal area, and seedling shoot dry weight were done using PC SAS Version 3 0 (1994) and the SAS General Linear Models Procedure (Littell et al 1994) These results are presented with other experimental results in Chapter 4

PAGE 61

CHAPTER 4 SILVICULTURAL STUDY RESULTS AND DISCUSSION INTRODUCTION This chapter presents results of the shoot growth rate study conducted on seedlings of native trees growing within Multiple Species Plantation (MSP) plots Ancillary information collected for shoot growth seasonality damage to experimental plants and abiotic conditions beneath MSPs are also presented and discussed The chapter concludes by summarizing the potential role of MSPs in rehabilitation of degraded tropical forests MSPs represent a workable ecological response to forest degradation yet they may also contribute to the impoverishment of local, forest-dependent communities Both reduced biodiversity and tenure/usufruct explanations for local grievances about MSPs are presented as an introduction to the second portion of this research the community forest resource use study Seedling Growth Rates During Monsoon versus Dry Seasons Measurement of changes in shoot extension and root collar area growth as well as estimates of shoot dry weight increment were calculated for both the wet monsoon (June-December) and dry (January-May) seasons Comparison of these three growth parameters for the two periods illustrates that nearly all shoot growth occurred during the wet monsoon (see Table 4 1) 45

PAGE 62

46 Table 4-1 Percentage of annual seedling shoot growth occurring during monsoon versus dry season n=l74 Season Shoot Root Collar Shoot Dry Weight Increment Extension Area Growth (based on calibration estimates) Monsoon 96 percent 100 percent 100 percent (Jun-Dec) Dry 4 percent net negative net negative growth (Jan-May) growth Dry season conditions resulted in negative root collar area growth and n egative shoot dry weight increment estimates in 73 percent and 60 percent of all experimental plants respectively This result is apparently due to cross-sectional stem shrinkage caused by excess evapotranspiration June-December monsoon plant growth data are therefore more meaningful in comparing shoot growth rates during the one-year research study Because of the January-May stem shrinkage all plant growth results presented below are derived from the seven month monsoon gro w th period Experimental Plant Damage and Measureme n t Problems Seventy of 244 (32 percent) experimental trees were damaged or died during the one year research period while 174 trees (68 percent) were not damaged Fifty-three of the damaged trees were browsed by domestic animals 10 were hacked by villagers while collecting fodder 5 were uprooted by porcupines and two died of

PAGE 63

47 unknown causes Tree damage events were recorded when observed, and all affected trees were thereafter excluded from further shoot growth calculations Fifty-two of the 70 (74 percent) damaged trees were located in the Aksal and Heggekopp blocks These two blocks were physically closer to hamlets than the Siddapur and Hunsekopp blocks accounting for more frequent tree damage. Aksal and Heggekopp blocks also yielded eight of nine net negative shoot dry weight treatment means for all blocks during the study. Eight of 24 (33 percent) shoot dry weight treatment means within these two blocks were net negative I was unable to establish Aksal and Heggekopp blocks before the 1991 monsoon arrived, thus measuring shoots after they had already begun to expand with monsoon water Aksal and Heggekopp blocks were subsequently harvested for final measurement just before the monsoon returned in 1992 when sterns were shrunken to their maximum extent This timing inconsistency in shoot measurements in Aksal and Heggekopp blocks accounts for the net negative growth recorded there. Beginning and year-end shoot weight increment data collected from Aksal and Heggekopp blocks are therefore not comparable to Siddapur and Hunsekopp block growth data, which were properly recorded before the monsoon arrived in both 1991 and 1992 Because of this temporal/seasonal disparity in the collection of growth data frequent net negative shoot dry weight increment estimates, and greater incidence of tree damage, all shoot dry weight increment estimates derived from Aksal and

PAGE 64

48 Heggekopp blocks was excluded from shoot dry weight RGR estimates. Shoot and R o ot Collar Relative Growth Rate (RGR) Results Shoot extension in response to increasing periods of understory exposure was species mediated (see Figure 4-1) Lagerstroemia lanceolata shoots grew faster than T tomentosa shoots during the first two years of understory exposure but then slowed dramatically during year three (F = 16 0 p < 0 0002, n = 77) Though the more understory tolerant species L lanceolata s faster shoot growth was ultimately curtailed by the closing canopy in three year old MSPs Terminalia tomentosa shoot growth was slower but sustained during the experiment (see Figure 4-1) Terminalia tomentosa seedlings demonstrate that even more understory intolerant species are capable of sustaining themselves beneath a forest canopy when young Root collar area growth rates of both of T tomentosa and L. lanceolata progressively decreased with increasing exposure to understory conditions (F = 53 5 p < 0 0001 n = 77 ; see Figure 4-2) Species-based differences in root collar growth rates were not significant.

PAGE 65

f c.) E c.) C: I Shoot extension of Terminalia tomentosa and Lagerstroemia /anceolata 1 2 and 3 years afte r outplanting controls 0 6 -0 5 0 4 0 34 1 41 "T" 0 3 0 25 .L 0 22 0.22 'T" ,.. 0 2 .L ... 0 1 0 1 -0 T t L I T t L I T t. L I y ear 1 y ea r 2 year 3 49 .___ _______________ _ __, Figure 4-1 Shoot e x tension comparison of Terminalia tomentosa and Lagerstroemia lanceolata one t w o and three years after outplanting into MSPs 1 8 .:1 6 1 4 1 2 c-:. 1 0 8 c 0 6 0 4 0 2 0 Root collar a r ea growth of Terminalia tomentosa and Lagerstroemia lanceo/ata1 2 and 3 years after outplanting con t rols 1 3 1 6 0 6 0 g-0. 3 1 0 1 1 T t L I T t L .I T t L .I. y e ar 1 y ea r 2 yea r 3 Figure 4-2 Root collar area growth comparison of Terminalia tomentosa and Lagerstroemia lanceolata one t w o and three years after outplanting into MSPs

PAGE 66

50 Shoot dry weight increments for both tree species apparently increases with increasing exposure to understory conditions, but this was due to block* year interaction (F = 9 13, p < 0.0003 n = 77) rather than the effect of number of years of understory exposure (see Figure 4-3) ... C') C') C: Shoot dry weight increment of Terminalia tomentosa and Lagerstroemia lanceo/ata1 2 and 3 years after outplanting controls 2.5 -----------2 1 6 1 5 2 1 0 5 T t L .I. T t L .I. T t L .I. year 1 year 2 year 3 Figure 4-3. Shoot dry weight increment comparison of Terminalia tomentosa and Lagerstroemia lanceolata one two, and three years after outplanting into MSPs The next six graphs represent the effects of one two and three years of continuous understory exposure on experimental plants shoot growth rates in the first year after release from understory conditions Figure 4-4 indicates that experimental release of L lanceolata produced significant post-release shoot extension after one and three years of understory exposure (F = 5 3 p < 0 025 n = 74) The effect of release after two years of understory exposure is inconclusive

PAGE 67

r Shoot extension of Lagerstroemia lanceolata 1 2 and 3 years after outplanting trench & guy (T+G ) vs control (Ctrl) 0. 6 0 5 >0 4 E 0 3 (.) 0 21 e (.) 0. 2 0 1 C 0 1 0 O r i T + G Ctrl T +G Ori T +G year 1 year 2 year 3 l ___ 51 Figure 4-4 Shoot extension of Lagerstroemia lanceolata one two and three years after outplanting into MSPs Trench & Guy (T + G) vs Con t rol (Ctrl) Shoot extension of Terminalia tomentosa-1 2 and 3 years after outplanting trench & guy (T+G) vs control (Ctrl) 0 3 ------=-------. 0. 25 >0 2 e 0 15 0 1 C 0 05 0 l-_..___.._ .......... __._ ___,J .___.....___ _____. ___, Ctrl T +G Or i T+ G O r i T+G year 1 y ea r 2 year 3 Figure 4-5 Shoot e x tension of Terminalia tomentosa one two and three years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl)

PAGE 68

52 Experimental release of T tomentosa trees from understory conditions produced uniform post-re l ease shoot growth rates (see Figure 4-5) Root collar gro wt h rates also increased for T tomentosa seedlings after they were relaesed from two and three years of understory exposure (F = 3 4 p < 0 068 n = 77 ; see Figure 4-6) when compa r ed to controls These increases occurred within the context of slowing root collar area growth rates for both release and control treatments Release therefore mitigated a general slowing of shoot growth among all T tomentosa trees Figure 4-7 demonstrates a more pro n ounced mitigation of slo w ing root collar area growth for released L lanceolata trees regardless of understory exposure time (F = 7 6 p < 0 008 n = 74) Root collar area growth of Terminalia tomentosa-1, 2, and 3 years after outplanting, trench & guy (T+G) vs control (Ctrl) 1 8 ~------------. 1 6 1 4 1 2 t: 1 E e o a E 0 6 .5 0 4 0 2 0 66 0 51 0 39 .......--.. O 3 i.--+-0 L..a......-J.. ....L---J. --'-..:...:.;..JL....--L.----1 Ctrl T +G Ctr l T +G Ctr l T +G year 1 y ear 2 year 3 Figure 4 6 Root collar area growth of Terminalia tomentosa one two and three years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl)

PAGE 69

I Root collar area growth of Lagerstroemia lanceolata 1, 2 and 3 years after outplanting trench & guy (T+G) vs control (Ctrl) 1 8 ...----------. 1 6 1 4 >1 2 e 1 E e o 8 E 0 6 .5 0 4 0 2 0 -l---'1 39 0 82 0 57 0 1 Ctrl T +G Ori T +G Ori T +G year 1 year 2 year 3 53 Figure 4-7 Root collar area growth of Lagerstroemia lanceolata one two, and three years after outplanting into MSPs Trench & Guy (T + G) vs Control (Ctrl) .. >C) C) C: Shoot dry weight increment of Terminalia tomentosa 1, 2, and 3 years after outplanting, trench & guy (T +G) vs control (Ctrl) 2 1 6 1 65 1 5 1 7 1 5 1 0 5 Ori T +G Ctrl T +G Ctrl T +G year 1 year 2 year 3 l Figure 4-8 Shoot dry w eight increment of Terminalia tomentosa one two and three years after outplanting into MSPs, Trench & Guy (T + G) vs Control (Ctrl) Post-release increments of shoot dry weights were not significant when compared to controls for either T tomentosa

PAGE 70

54 (see Figure 4 8) or L lanceolata (see Figure 4-9) regardless of prior duration of understory exposure Figures 4-8 and 4-9 suggest however that post-release shoot weight increments did not decrease with increasing exposure to understory conditions ... >, t7) l t7) C Shoot dry weight increment of Lagerstroemia lanceolata 1 2, and 3 years after outplanting, trench & guy (T +G) vs control (Ctrl) 2 5 2 1 86 1 5 1 8 1 5 1 2 1 0 5 Ori T+G Ori T+G Or i T+G year 1 year 2 year 3 Figure 4 9 lanceolata MSPs Trench Shoot dry weight increment of Lagerstroemia one two and three years after outplanting & Guy (T + G) VS Control (Ctrl) into The final three graphs compare the growth inhibition effects of belowground and aboveground competition on L lanceolata plants shoot growth rates after three years of understory exposure They also compare trench (T) to fertilization (NPK) treatments to identify whether soil moisture or soil nutrients more limit shoot growth rates Figure 4 10 sho w s that while all four imposed treatments resulted in increased shoot extension relative to controls differences between the applied treatments were not significant statistically (F = 2 2 p < 0 102 n = 31) Similar non-significant results were obtained for root collar

PAGE 71

55 area (see Figure 4-11) and shoot dry weight increment (see Figure 4-12) when comparing the four non-control treatments Shoot extension of Lagerstroemia lanceo/ata3 years after outplanting trench & guy (T+G) vs (T) vs (G) vs control (Ctrl) vs NPK 0 4 -------~-----, 0 35 0 3 0 3 0.31 >0 25 e 0 2 E 0 15 C: 0 1 0 05 1 0 ..1._.i.:.;.; :;J____t,; T G T+G Ctrl NA< ,._ ___ --------------' Figure 4-10 Shoot e x tension of Lagerstroemia lanceolata three years after outplanting trench and guy vs trench vs guy vs control vs NPK treatments) Root collar area growth of Lagerstroemia lanceolata3 yea rs after outplanting trench & guy (T+G) vs (T) vs (G) vs control (Ctrl) vs 0 7 -,------..._,.L _,._ ____ 0 6 o 5 o 4-'-N E 0 4 E "1 0 3 E E c 0 2 0 1 0 ..J..-J-----1. __..___L-__.___ .,__ __,J Figure 4-11 three years vs control vs T G T+G Ctr l NA< Root collar area growth o f Lagerstroemia lanceolata after outplanting trench and guy vs trench vs guy NPK tre a t m ents

PAGE 72

... >en cn C 56 Shoot dry weight increment of Lagerstroemia lanceo/ata3 years after outplanting trench & guy (T +G) vs (T) vs (G) vs control (Ctrl) vs 2 5 --..------~,l!L...U,.. ------, 2 1 86 1 82 1 5 1 2 1 0 5 T G T+G Ctrl NA< Figure 4-12 Shoot dry weight increment of Lagerstroemia lanceolata three years after outplanting, trench and guy vs trench vs guy vs control vs NPK treatments Discussion : Ecological Potential of MSPs The MSP understory environment promotes shoot growth of understory seedlings d uring their first two years after outplanting This growth occurred almost entirely during the June-December wet season In contrast shoots often contracted in cross sectional area and dry weight during the January May dry season Abiotic changes beneath MSPs that extend understory seedlings' effective growing season further into the dry season would improve their g r owth performance Lower soil temperatures enhanced and prolonged rete n tion of soil moisture increased accumulation of leaf litter and reduced insolat i on may all improve the MSP understory for seedling growth For example noon temperatures 15 cm below the soil surface in May were cooler beneath a three year old MSP than beneath a neighboring

PAGE 73

57 plantation with open grown seedlings of the same age (29 5 C vs 35 3 C) Repeated dry season measurements of t hese abiotic factors could could test for potential increases in the effective growing season provided by the MSP environment Table 4-2 Comparative shoot and root collar growth of 16 trees, grown with and without matrix trees in multiple species plantations (MSPs) n=16 Species Trees Grown Trees Grown With Matrix Without Matrix Trees Trees Terminalia tomentosa 2 6 2 31 8 shoot e x tension (cm/yr) Lagerstroemis lanceolata 124 5 56 8 shoot extension ( cm/yr) both species (cm/yr) 80 8 44 3 Terminalia tomentosa 2 1 9 1 root collar area (rnrn2 /yr) Lagerstroemis lanceolata 10 1 9 0 root collar area ( rnrn 2 /yr) both (mm2/yr) 4 8 9 1 species The growth form of understory seedlings also improves with the presence of fast-growing nitrogen-fixing matri x species in MSPs relative to open grown seedlings Table 4-2 compares mean shoot and root collar basal area growth for eight seedlings (four L lanceolata and four T tomentosa) growing in the absence of matrix trees versus equal numbers of seedlings growing beneath

PAGE 74

58 matrix trees These seedlings were all located in the 1989 plot of the Siddapur block Shade-tolerant L lanceolata grew more in shoot height under matrix trees than it did in the open L lanceolata s root collar area growth was similar whether growing under matrix trees or not Less tolerant T. tomentosa s shoot growth was similar whether shaded or not. Terminalia tomentosa did grow more in root collar cross-sectional area in the open. However growth form of both species became branched and bent when growing in the open which is silviculturally undesirable. I also witnessed the beneficial effects of MSP matrix trees on seedling growth in a Tirtahalli plantation One-half of a stand of three-year old mixed seedlings that had not grown satisfactorially was replanted with three m spacings of Acacia auriculiformis and Casuarina equisetifolia along with a new cohort of native seedlings When visiting this plot three years later, both older and younger native seedlings in the portion of the stand receiving supplemental planting consistently displayed greater stem and root collar growth than older seedlings that had received no replanting These observations indicate that matrix plantation trees do not adversely affect the early growth of companion understory seedlings Over the longer term matrix species should not interfere with understory seedling growth if they are commercially thinned early and repeatedly Prescribed bi-annual thinnings of matrix species should culminate in complete overstory removal after approximately 14 years Karnataka foresters should nevertheless exercise care in the selection of

PAGE 75

59 matrix species to preclude the introduction and/or spread of invasive and exotic species Fast-growing native species with suitable growth characteristics should be selected tested and used as MSP matrix species whenever possible Finally the MSP environment also appears to facilitate natural recruitment and succession, when compared to plantations without matrix species This phenomenon is indicated by the early appearance of unplanted species like Syzygium cumini/Eugenia jambolanum (guava) Cinnamomum zeylanticum (cinnamon) Ixora grandiflora Calicopteris floribunda Piper nigrum (wild black pepper) Bulbophyllum spp orchids and other epiphytes in plantations near Tirtahalli Local Misgivings about MSPs : Reduced Biodiversity and Forest Reservation Villagers living within the Sirsi Forest Division freely express their displeasure with MSPs particularly the conversion of minor forest areas to MSPs as described in Chapter 1 They object that minor forests degraded though they often are still produce a wide variety of subsistence products for local people A forest product use survey conducted by the author in 1992 demonstrated the active use of 67 plant species for 63 different purposes including : foods medicines fodder building materials tools household implements soaps cosmetics sporting activities, and prayer offerings (see Appendix D) to name a few These 67 species are not a complete representation

PAGE 76

60 of minor forest plant diversity, but they reflect the multiple use value of minor forests to local people Conversion of minor forests to MSPs precipitates ecological changes that reduce their utility to local communities Site preparation for MSP establishment often kills extant plants immediately while the plantation trees outcompete many remaining multiple-use species for soil resources growing space and light. In the short term species diversity is reduced by the establishment of MSPs on minor forest sites even in plantations consisting of 20 or more planted species As MSPs mature natural recruitment of native species becomes more evident Enhanced recruitment ultimately allows site biodiversity to surpasses that of degraded minor forests However this recouped diversity may favor commercial timber species over plants having local-use attributes Twenty or more years and several thinning operations may be required before minor forest sites occupied by MSPs again provide the multiple-use subsistence benefits estimed by local forest dwellers This is too long for most forest dependent people to wait In the interim conversion of minor forests to MSPs will cause further reductions in forest areas where local harvest of non-timber products is still permitted by Karnataka State forest laws Limitation of public access to forests and the non-timber forest products they provide is a process that has long-standing historical precedent The following socio-economic study begins by documenting the progressive reservation of Indian forest resources by state authority Reservation of both forest areas

PAGE 77

61 and specific forest products by Indian forest law has spread and intensified over the past 150 years In this context MSPs can be viewed as the most recent manifestation of legalized state appropriation of forest resources from local purvie w.

PAGE 78

CHAPTER 5 FOREST RESOURCES IN PENINSULAR INDIA : STATE APPROPRIATION AND LOCAL EXCLUSION The historical record, both before and after Indian independence documents the progressive exclusion of local people from forests as a consequence of state appropriation of land This appropriation gained momentum as the Indian state capitalized the wealth of its forests creating demand for its forest products in markets across South Asia and around the world Contemporary popular attitudes about forest management, and multiple species plantation (MSP) silviculture in particular, issue from historical conflict between state forest bureaucracies and forest dependent communities in peninsular India Recent rehabilitation of degraded forest areas using MSPs has served to extend local access restrictions to minor forests areas where local people exercise non-timber use privileges in the absence of such plantations Therefore MSPs are vie w ed locally as a recent form of a centuries old process of exclusion from forests This chapter refers to historical use of Indian forest resources as the base from which progressive state appropriation and capitalization of forests evolved I adopt a conceptual framework to describe the step-by-step capitalization of Indian forest resources. I then present historical information about forest conservation silviculture and recent forest encroachment by villagers in the Sirsi Forest Division my research area in 62

PAGE 79

63 northwestern Karnataka Finally I introduce forest resource use surveys as investigative tools to 1) document local knowledge and use of forest resources ; and 2) to describe impacts of MSPs on a local forest-dependent community The Historical Context Prior to the consolidation of British rule in peninsular India what are now state-owned forests were controlled by ethnically homogeneous groups either agrarian communities or hunter-gatherer societies (Gadgil 1989) By 1700 agrarian groups had already deforested the coastal plains and much of the interior plateau region of southern Indian for agricultural use (Richards 1985) Indigenous regional rulers such as the 18th century s Haider Ali also removed premium woods from the Western Ghats forests of Kanara District to build ships along the Malabar Coast (Bombay Gazetteer 1883) Such princes were often acknowledged to exercise formal authority over forests (Ashton 1988 Bentley et al 1987) Local groups nevertheless enjoyed de facto use rights to non agricultural lands in their vicinity (Gadgil 1989) Evergreen forest tracts or kans were important sources of food fuel and fiber for local subsistence They also provided the organic matter necessary to produce agricultural crops on local wood ash or kumri swidden plots and leaf mulch to fertilize intensively managed spice gardens Over time some evergreen kans in North Kanara have been designated as sacred groves indicating a local reverence for them

PAGE 80

64 Because human survival depended largely on the sustained productivity of neighboring forests, local incentive to protect these assets was strong In the Himalayan foothills region, Guha (1989) describes an intimate and reverential attitude of local people towards the hill forests that have historically provided their life support and protection from slope erosion Likewise in peninsular India clan and community-based institutions arose to manage local forests for posterity and to control non local access to local forests (Gadgil and Guha 1992) The operation and power of local institutions became legitimized as a consequence of their ability to impose penalties for unsanctioned use of local forest resources This was often possible because forested regions were isolated from political and economic centers of power on the Indian plains leaving local forest communities both politically and ecologically independent (Richards and McAlpin 1983) Local communities did protect and maintain forest resources as witnessed by early British accounts of the condition of India s peninsular forests including the Western Ghats region (Cleghorn 1861 Duff 1826,). Even vast natural stands of teak are reported to have been in excellent condition in the Haliyal area of Kanara District (Bombay Gazetteer 1883) when the Indian Forest Act of 1878 became law This legislation formally inaugurated a period of conflict over Indian forest resources that continues to the present The period is characterized by intensified exploitation of forests to meet state goals and

PAGE 81

65 interests and the progressive exclusion of local people from their forest life-support system British Colonial Administration of Indian Forest Resources The British colonial administration in India displayed a marked indifference to Indian forest resources during the 18th century Nascent European demand for exotic spices gums oils, and tropical timber prompted some commercial felling of Indian forests though on a limited scale (Bombay Gazetteer 1883) Early written records concerning Indian forests fishing and grazing resources are insignificant when compared to colonial preoccupation with agrarian resources and property relations concerning ownership and cultivation of arable land (Grove 1990, Richards and Tucker 1988) Subsidies and inducements encouraged cultivators to clear lands along India s forest frontier Forests were viewed more as impediments to the expansion of cultivation and its associated revenue potential Along the Malabar Coast in southwestern India no forests were turned into protected reserves until 1806 (Guha and Gadgil 1989) In 1816 the first Conservator of Forests was appointed in India to sanction the East India Company s teak (Tectona grandis) extraction monopoly (FAO Forestry Paper 55 1985) Exploitation of abundant natural teak stands began in Malabar and Travancore to supply timber for construction of British navy ships since imperial forests in North America had been surrendered as a result of the American Revolution More forests were felled to plant coffee tea cardamom and other export crops after the

PAGE 82

66 East India Company transferred India s administration to the British Crown in 1858 Establishment of the first scientifically-managed government plantations began from 18651870 (Agarwala 1985) Construction of India's first railways in the late 19th century initiated significant large-scale exploitation of South Asian forests From 1870 to 1910 railway networks expanded seven-fold, from 7,678 to 51 658 kilometers (Guha and Gadgil 1989 ) The larger network required numerous railway ties that soon became a locally scarce commodity In 1864 according to the wishes of the Governor general Lord Dalhousie India s first forest department was established to meet an annual demand of 1 000,000 ties for the railway companies Experienced German foresters of whom Inspector-General of Forests Dietrich Brandis (Richards and McAlpin 1983) was the most prominent were hired by the British to place government forests under a rational form o f European silvi c ulture The Indian Forestry Act of 1865 sanctioned the establishment of government forest reserves and extended the state monopoly of teak to other commercially important species, including rosewo o d (Dalbergia latifolia), sandalwood (Santalum album) and ebony (Diospyros ebenum) (FAO 1985) This legislation also claimed government authority to set forest use rules and to impose penalties for use infractions While local access to forests f o r grazing fuelwood collection, and timber felling was still permitted in practice such use could henceforth be regulated by

PAGE 83

67 government decree This established a legal structure to sanction subsequent state demarcation and reservation of forests The Indian Forest Act of 1878 consolidated absolute government authority over utilization and management of newly designated reserved forests (Grove 1990) By 1882 34 square miles (4 9 %) of forests had been reserved in the Sirsi Forest Sub Division out o f a total of 700 sq u are miles In Kanara District as a whole 684 (19 %) of 3 549 square miles of forests had been reserved (Bombay Gazetteer 1883) The 1878 laws also estab l ished so-called p r otected forests areas that would become reserved forests after demarcation and preparation of silvicultural prescriptions Understanding that future production of timber could not be guaranteed i f customary local forest use rights continued the government also placed restrictions o n local use of protected forests under the 1878 act Nineteen species of trees and four forest products became reserved solely to the government These species were : Tectona grandis Santalum album Dalbergia latifolia, Diasporas ebenum, Pterocarpus marsupium, Calophyllum elatum, Artocarpus integrifolia, A. hirsuta, Vitex altissima, Ougenia dalbergioides, Lagerstroemia microcarpa, Gmelina arborea Terminalia tomentosa T chebula, Xylia dolabriformis, Thespesia populnea Acacia catechu, A concinna, and Bassia latifolia The four reserved products were : fruits of Terminalia chebula (hirda) fruits of Acacia concinna (shigikai) flowers of Bassia latifolia (ippe huva) and late x from A cacia catechu (kath)

PAGE 84

68 These products, such as hirda fruits could only be gathered by locals under forest department contract The colonial government also redefined previous customary forest use rights granted to local people as use ''privileges'' in protected forests The chief privileges still permitted were : 1) clearing patches of forest for wood-ash or swidden tillage; 2) lopping leaves for green manuring of spice and betelnut palm gardens garden owners were restricted to lopping only in designated soppina betta/betta forests tracts that were no more than eight times the area of their garden holdings ; 3) growing pepper in some evergreen kan forests ; 4 ) free grazing in designated forest tracts ; and 5) free or cheap wood fuel and bamboo collection (Bombay Gazetteer 1883) The sale or barter of protected forest products was strictly prohibited The penalty for doing so was often the loss of all collection privileges Village forests were designated close to villages to be administered by village councils (Village Forest Panchayats) for multiple use by local people Local use of reserved species and products was also illegal in these v i llage forests The Indian Forest Act of 1878 forma l ly initiated the process of supplanting village-based customary forest use agreements by centralized government Physically limiting local access to forests and progressively converting local forest resources into commercial commodities for distant markets were pivotal elements in this transfer of authority (Gadgil and Guha 1992) Before 1878 forests had been e x ploited in a non intensive manner Trade and commercialization of fo r est derived surpluses had been

PAGE 85

69 limited to commodities like wild pepper and cardamom medicinal plants sandalwood ivory and a few timber species Agrarian communities on India s plains had little interest in Kanara s forests for other than a small number of such products and extraction of these did not have a serious impact on the ecological function of Kanara s forests After 1878 forests were considered to be sources of revenue from timber production Silvicultural strategies to maximize timber revenues led to changes in forest species composition that favored conifers over mixed oak hardwood/conifer forests in northern I n dia and pure stands of teak over mixed evergreen hardwood forests in peninsular India (Guha 1989) The 1878 laws also initiated the ecological separation of forests from agricultural activities (Guha a n d Gadgil 1989) Once reserved forests could no longer legally p r ovide inputs to maintain soil fertility in neighboring fields and gardens The threat of falling agricultural yields prompted the Forest Policy Resolution of 1894 (Haeuber 1993) which stressed the need to clear forests for local agricultural extension A tightening vice of accelerated forest conversion on the one hand and continued forest reservation on the other squeezed local forest use into shrinking forest tracts of inferior quality Finally the 1894 laws modified forest classification into more nearly its present form Reserved forests were distinguished as either Protective or National Forests village and less productive forests were renamed Minor Forests and grazing areas became Pasture Lands (Haeuber 1993) Betta Forest

PAGE 86

70 zones and their classification were maintained Formal prescription of bettas as lopping forests would be delayed, however until the 192 4 Forest Act The 1924 Act would also set limits on local usufruct privileges in Minor Forests Ecology and Aesthetics of Forests : Colonial Perceptions While acquiring a global reach over natural resources for the purposes of trade some Europeans also asserted control over their territories based on ecological considerations A small number of 19th century colonial forest conservationists promoted forest reservation in dozens of colonial territories (Grove 1990) including India to redress environmental degradation This group popularized a theory linking deforestation to undesirable rainfall and climatic changes (Grove 1990) A minority of British officials warned that the unchecked e x pansion of agricultural lands would through a process called desiccation cause the loss of valuable timber resources mass deforestation and environmental cataclysms throughout India (Richards 1985) In f ormed scientific authorities of colonial island territories reported the destruction of soil and water resources when forested uplands were converted from forests to agricultural lands Another perception that spurred some British to espouse a forest reservation agenda had an aesthetic or Edenic slant (Grove 1990) A paradisal image of pristine tropical lands was strongly imprinted on European minds W ith time and travel these views were transformed into fascination for collection and classification of tropical flora or game hunting of tropical

PAGE 87

71 wildlife. The boundaries of many ecological reserves were, therefore defined by colonial states to set aside regions of diverse flora and fauna for the enjoyment and recreation of Europeans. Local Resistance to Capitalization of Forests Finding their entry to local forests barred by legal injunction in the 19th century local communities petitioned governments for compensation In the years prior to 1878 many such protests were diffused by flexible and well-informed forest officials who acknowledged many sustainable local forest use practices and recognized protest over their proscription as legitimate Cleghorn (1861) acknowledged that local tribes were in fact less destructive of forests than invading plains cultivators and investors in plantations But petition and protest often went unrewarded and were entirely ignored after the passage of the Indian Forest Act of 1878 Finding petition unsuccessful law-breaking in the form of illegal wood gathering grazing tree felling and smuggling of state forest resources became common Arson of state commercial forests also served to convey indigenous displeasure at being barred from ancestral forest lands However locals were careful to destroy only single-species stands that symbolized the interests of capital and not the mixed species stands that embodied multiple-use attributes from a subsistence perspective (Guha and Gadgil 1989) In an advanced stage of resistance alliances between traditional elites and peasants emerged when British denial of

PAGE 88

72 customary forest use rights became intolerable across Indian classes and castes(Grove 1990) From the crown s perspective, control of forests then became tantamount to control of political dissent, since organized forms of resistance appeared to openly flaunt British authority. Forest conservancy was intensified, and forcible suppression was sometimes used to quell these organized insurrections The threat of locally-caused destruction of forests was often used as a pretext for enhanced political suppression of Indians Whether intended to sustain the colony s resource endowment to provide short-term profit and pleasure or to maintain political power colonial reservation of forests led to a state monopoly of India s forests Management of Indian forests in the early 20th Century Extension of colonial authority over forests was sanctioned by the Indian Forest Act of 1927 This act reiterated the forest management framework of 1878 while also allowing the government to assume control of many forests that it did not already own (Haeuber 1993) It also enumerated situations in which forest department officials could arrest without a warrant those accused of forest resource theft Administration of forests was placed under federated provincial auspices in the Government of India Act of 1935, a decade prior to Indian independence Henceforth forest administration would be directed by state governments with central government involvement limited to forestry policy education and research This historical delegation of authority

PAGE 89

73 explains wide variations in the programs methods and effectiveness of forest administration to be found among the states of modern India Contemporary discussions about Indian forestry or forest administration must therefore be prefaced by clear reference to a particular state or territory Such differences among states not withstanding rates of forest conversion increased throughout India after independence Growing population impoverishment of the environment and global economic forces joined together to insure the conversion of all but India s most remote and inaccessi b le natural forests A final reformulation of forest policy in British India came in a 1944 statement issued by the inspector-general of Indian forests It represented a last effort to reconcile the conflicting management priorities of state forestry officials and Indian nationalists The former perceived stricter control of local forest access and use as essential to successful timber production in state reserves and protected forests The latter called for formal recognition of the dependence of India s rural poor on forest resources for their survival The 1944 statement gave the needs of agricultural production priority over production forestry and l ocal subsistence priority over the generation of state revenue (Haeuber 1993) However this compromise had little impact on the day-to-day management activities of state foresters Enforcement of forest protection laws went unchanged

PAGE 90

74 Post-Colonial Management of Forest Resources After independence the newly formed Central Board of Forestry formulated the 1952 Government of India Resolution It recommended that forest lands occupy one-third of all Indian territory and that 60 percent of hill regions and 20 percent of the plains should remain forested Actual percentages continued to decline below these recommendations however as few funds were earmarked for reforestation The growing commercial emphasis on production forestry to promote national self reliance became the new nation s priority Previous rights of indigenous tribal forest-dwellers to collect fuelwood timber and fodder in reserved forests were progressively revoked (Haeuber 1993), while the ability of state governments to reserve forest lands grew apace Indeed expansion of reserved state forests accelerated after independence In 1992 the modern Sirsi Forest Division contained approximately 70 000 ha of reserved forest 41 percent of all forests Fifty thousand ha of minor forest and 50 000 ha of betta forest comprised the remaining divisional forests (1992 interview with divisional forestry officer) With the integration of princely states into the Indian Union in the early 1950s royal hunting preserves of forests woodlands and grasslands also came under the purview of empowered state departments of forestry Local communities that had previously relied on such lands to provide a variety of household farming fodder and dietary requirements found that their use of state-managed forests had become entirely regulated

PAGE 91

75 Any of their remaining use privileges were now formally described as ''concessions'' The Indian National Commission on Agriculture (NCA) forest management recommendations of the early 1970s gave top priority to industrialization of the Indian forestry sector as the vehicle to boost timber exports and foster import substitution The NCA blamed declines in forest commercial productivity on local forest encroachment and illegal removal of forest products Their recommendations emphasized conscription of all unclassified forests into reserved forests as soon as possible in order that local forest use concessions be terminated "as far as possible in the manner provided in the forest law (Government of India Report of the National Commission on Agriculture Part IX 4:8) To compensate local people for their loss of these forest use concessions forest department distribution depots were established to sell forest products to them at cost Today, many villagers remain embittered by having to purchase from government depots what they formerly gathered in local forests at no charge The NCA also recommended reclassification of forests to conform with an industrial production orientation Uplands, steep slopes, and riparian zones were consolidated as protection forests Production forests were of three types : low-value mixed quality forests targeted for complete felling and replanting; valuable forests that could still be economically improved by conversion planting ; and inaccessible forests that would be exploited after forest roads reached them The most deforested tracts were reclassified as social forests These included

PAGE 92

76 degraded minor forests wastelands village commons and road and rail right of-ways (Viksat 1990 Haeuber 1993) Local community use of non-reserved products obtained from social forests was offered in compensation for lost local access to newly-classified protection and production forests State governments failed to invest in replanting or other rehabilitation schemes in social forests favoring investment in production forests instead Policy makers interpreted social forests to be commercially expendable tracts to which local use pressure could be redirected in lieu of more valuable production forests (Shiva 1988) Forest management legislation initiatives in the 1980s heightened debate over the future of Indian forests Jurisdictional conflict between state and federal agencies over control of forests was touched off by the Forest Conservation Act of 1980 This amounted to a legislative last stand at the federal level to prohibit clearance or conversion of forests to other land uses without parliamentary approval (Government of India Report of the National Commission on Agriculture Part IX) State governments balked at this interference from the central government. However state forestry departments were quick to seize upon this legislation as an opportunity to strengthen state control of forest lands particularly in the area of law enforcement The 1980 Act strengthened the severity of fines and punishments for illegal activities in state forests It granted forest officers the right to arrest offenders without a warrant for tampering with boundaries setting fires gathering reserved

PAGE 93

77 products and cultivating forest lands (Haeuber 1993). Local forest use concessions in all forest types were further restricted The act also called for the initiation of forest rehabilitation in degraded forests and other wastelands throughout the country. Soon thereafter the proposed Indian Forest Act of 1981 recommended authorizing state governments to reclassify any lands they wished to as ''forestsu (whether forested or not) in order to enhance public control over both tree and non-tree derived forest resources (Kulkarni 1983) Since 1981 the dispute over disposition of India s forests has continued between state and federal authorities on the one hand and state forest departments and forest dwellers on the other Government officials blame villagers for their indiscriminate use and destruction of forests while the latter blame government-sponsored industrial forestry operations for conversion of India s remaining natural forests Recent warnings about the environmental consequences of Indian deforestation (Shiva 1990) and its possible mitigation do not seem to have made a serious impact on those wielding political influence Public media battles continue over control of India s residual forest wealth rather than over its maintenance and reproduction Capitalization of Indian Forest Resources : An Analytical Framework The historical capitalization of Indian forest resources described above is summarized by Nadkarni s (1989) analytical framework of forest conversion and capitalization Nadkarni

PAGE 94

78 (1989) outlines three historical stages of forest use and conversion : the pre-commercial-cum-pre-capitalist stage; the initial commercial stage; and the highly commercialized stage. In the first stage nature s forest bounty is an abundant and free gift for one s personal use not intended for commercial sale. Forests are an important source of many subsistence products for household use Unsophisticated technology precludes regional-scale conversion of forests for subsistence purposes. Destruction of forests sometimes does occur however because the resource is not considered scarce The use of fire as an effective tool in preparing land for short-term agriculture is an example of such destruction. British officials generally considered the customary burning of forest tracts in Indian swidden agriculture or jhuming as a primitive and uneconomic landuse practice to be discouraged (Grove 1990) Yet jhuming had been practiced for generations in an apparently sustainable manner by agrarian societies over large tracts of the interior Indian Plain (Ramakrishnan 1980) Only a small percentage of land was under cultivation at any one time, while fallow areas were rested to naturally recoup their fertility for future cultivation Large expanses of forest cover were always maintained within traditional jhuming systems. In the second or initial commercial stage a perception of resource scarcity arises as external market forces begin to assert control over forest resources at the expense of local forest-based communities Emphasis on intensified production of a few commercially viable timber species and products

PAGE 95

79 necessitates the exclusion of local people from forests Once this occurs traditional common property stewardship arrangements begin to break down (Bromley 1991) Local princes small merchants and savkars (merchant moneylenders) employ formerly autonomous members of local communities to extract high value forest products in exchange for wages (Richards and McAlpin 1990). Agarwal and Narain (1989) describe this as the progressive alienation of local communities from their forests Bromley and Cernea (1989 : 35) describe this transformation as follows : Common property is in essence private property for the group and in that sense it is a group decision regarding who shall be excluded But when options for gainful and promising exclusion of excess population have been destroyed by surrounding political cultural or economic events then those engaged in the joint use of a resource are left with no option but to eat into their capital In the third highly commercialized stage, forest resources become the raw materials of external forest-based industries Large, mechanized and centralized factors of industrial production subjugate regional merchant capital Local access to forests is further diminished as commercial forestry promotes controlled conversion of native forests (Bee 1990) and regeneration of managed plantations An open access free-for-all of intensified degradation occurs in the few natural forests to which local access remains less restricted (e g village or minor forests) The impoverishment of local communities proceeds as

PAGE 96

80 these scarce forest resources are destroyed by those who most depend upon them for subsistence (Richards 1985 Kaur 1991) As state control of forests expands forest-dwelling communities find a bureaucracy of state forest officials positioned between themselves and the now restricted forests To obtain access to state lands, peasants must find favor with department officials or with neighbors powerful enough to influence forest department staff (Blaikie and Brookfield 1986). If either of these strategies fails, individuals are often forced to survive by ignoring forest access laws to extract their basic material needs from public forests Given this situation in which forests are under attack from all quarters Nadkarni maintains that management of forest resources must finally enter a fourth enlightened stage of systematic and rational management. This stage emphasizes conservation and regeneration of forest resources for both local subsistence and regional commercial needs (FAO 1985 Agarwala 1985) A model for enlightened joint forest planning and management between state foresters and local people will be presented in the final chapter of this study Forest Policy and Management in Northwestern Karnataka State In the 1935 Government of India Act promulgation of constitutional la ws regarding natural resources remained a federal prerogative while practical management of forests fell to state departments of forestry The Karnataka Forest Department s (KFD) descending directly from colonial precedent,

PAGE 97

81 was inaugurated with the establishment of Karnataka 1956 Due to the relative wealth of forest resources in Karnataka state foresters assumed conservancy of this natural legacy in as serious a manner as did their colonial predecessors Karnataka s forests are among India s most diverse in biological terms but for legal purposes they comprise three primary types : reserved forests protected forests and minor or village forests In reserved forests only limited single tree felling occurs and this is done exclusively by state foresters From 1985 until 1991 an even more restrictive policy of only dead and down tree removal was adopted by an environmentally-minded chief conservator of forests In contrast protected forests include both natural and manipulated stands under commercial silvicultural treatment An increasing number of protected forests have been converted into plantations as their mature trees are harvested The state s most degraded stands have been classified as minor or village forests These have been designated for local harvest of non-timber products in specified quantities A fourth class of forests is found only in the upper Ghats of Yellapur Sirsi and Siddapur Taluks (sub-districts) Soppina betta forests These forests were first designated as so-called lopping forests in the late 19th century providing green manure/mulch usufruct privileges to those who owned betel nut (Areca catechu) gardens Eight to nine acres of soppina betta lopping forest were traditionally allocated for every one acre of spice garden owned by landed cultivators Spice garden

PAGE 98

82 owners with betta privileges have historically had no formal role in betta forest management decisions made by the state Private tree felling is prohibited in all forests with the exception of betta forests where authorization to remove single trees for subsistence purposes has been occasionally granted to spice garden owners since 1977 The highly degraded condition of minor forests however, attests to the historical inability of state foresters to enforce felling regulations Conversely the will to enforce felling regulations is often lacking as local forest officials so m etimes receive payment to look the other way when felling occurs Like the British before them Karnataka s foresters follow prescriptions to enhance the biomass productivity of selected timber species often in uniform plantations ( A garwala 1985) In this market-oriented silviculture local people receive jobs as forest department personnel or daily wage laborers often the only form of seasonal employment locally available Forest managers take silvicultural control of forest ecosystems as quickly as technology and finances permit Economic goals drive all stages of such production forestry From the 1960s to mid 1980s several unrelated events began to discourage Karnataka foresters from continued planting of single species plantations The invasiveness of exotic understory plants particularly Eupatorium sp ., massive insect defoliation of teak plantations and mismatching of plantation species to inappropriate sites made the maintenance costs of many

PAGE 99

83 marginal stands greater than the expected economic returns. A reassessment of silviculture practices began Forest policy initiatives of the 1980s began to stress rehabilitation of India s degraded forests and wastelands This new policy climate presented Karnataka foresters with an opportunity to assert silvicultural control over state forest lands that had been previously neglected particularly minor forests. By 1982 the first of what would become annual plantings of multiple species plantations (MSPs) began Replanting of degraded forests especially minor forests to MSPs gained momentum during the 1980s The silvicultural component of this study was conducted in MSPs planted on minor forest lands in 1988 1989 and 1990 Prevailing opinion of foresters about MSPs centered on the need to rehabilitate impoverished forest lands forests that had been damaged through irresponsible overuse by local people Though this opinion was often justified foresters failed to acknowledge two characteristics of minor forests and MSPs that were abundantly clear to local people : 1) though degraded minor forests still provided local people with many products necessary for their welfare ; and 2) MSP establishment effectively excluded local people from forests where they had previously enjoyed access to collect non-timber products.

PAGE 100

84 Pushing Back the Forest Frontier : Forest Encroachment in Sirsi Taluk Another process that diminishes public access to forest resources in Karnataka State is forest encroachment In Sirsi Taluk for example forest felling and expansion of village land has been occurring continuously for at least 150 years (Bombay Gazetteer 1883) During most of this period sanctioned encroachment of forest land was recog n ized by state and federal agencies Whenever there was a need to e x pand agricultural and residential lands for distribution to landless people the State Revenue and Forest Departments would institute so called ''disforestment'' This involved the removal of forest lands from Forest Department records and their transferal to Revenue Department records The forest settlement officer in the Revenue Department was charged with carrying out this task Forest conversion w as first codified into la w by the Forest Policy Resolution of 1894 Public outcry for greater access to forest lands for homesteading and agricultural expansion necessitated further opening of the forest frontier Though forest settlement w as the centerpiece of this act state control of reserved forests was simultaneously strengthened In practice disforestment amounted to transfer of less productive and degraded forests to private cultivators and state reservation of productive forests The 1894 act also set legal precedent for recurrent titling of encroached forest lands a

PAGE 101

85 popular program that would become a tool of post-independence politicians to garner votes during election years Prior to 1980 forest land encroachment was legally recognized or regularized on a continuous basis Regularization is provided for by the Kanara Forest Privileges Rules of 1911 People were given legal title to forest lands called patta while cutting of any forest trees remaining on this land was normally prohibited by the KFD Some forest lands were also given on a temporary lease basis and many of these areas have not been regularized (Tax Collector s Records Sirsi Taluk) All regularization of encroached forest lands ended in 1980 when the Forest Conservation Act became law Since 1980 encroachment onto state forest land has remained a common practice in Terkanahalli Village as is the case throughout the Sirsi Taluk Tax records for two villages indicate that 90 percent of land owners have in some manner encroached on forest land Average size of encroached parcels varies from 0 2 to 1 75 ha Landless people also encroach on forest land This is normally done in order to build homes The size of these parcels averages 0 1 to 0 8 ha (Tax Collector's Records Sirsi Taluk) Villagers who have not encroached on forest land do not live adjacent to forest land Some of these people have however encroached on forest land elsewhere The illegality of forest encroachment is a consequence of India s Forest Conservation Act of 1980 which stipulates that no forest land shall be used for any other purpose than forest production except by consent of the federal government Since

PAGE 102

86 1980 unsanctioned encroachment of forest land has therefore necessarily become the norm Revenue Department record keeping of newly encroached land was discontinued in 1980-81 This is because any official record or recognition of encroachment can serve as a basis for or potentially facilitate subsequent titling of encroached land to villagers Due to political pressure in 1991-92 the Karnataka State government again initiated regularization of encroached forest land but only for lands placed under cultivation before 1970 Recent regularization efforts indicate that politicians give higher priority to the resource demands of vocal local communities than to national environmental legislation Though forest encroachment by growing numbers of the rural poor is often politically expedient the inevitable result is further disappearance of Indian forests Conclusion This chapter has outlined the progressive appropriation of Indian forest resources by the public sector at the expense of forest-dependent communities Multiple species plantation (MSP) silviculture is described as the most recent effort by Karnataka forestry officials to reduce local access to the few forests where villagers may still collect non-timber products Conversely MSPs may represent a sincere state effort to improve the productivity of degraded minor fo r ests simultaneously improving the welfare of local forest-dependent communities Community-oriented strategies have been

PAGE 103

87 successfully undertaken to reforest degraded public forestlands in West Bengal (Malhotra and Poffenberger 1989) and to establish community buffer zones around wildlife reserves in Gujarat (Groenfeldt et al 1990) In 1993 the Karnataka Foresty Department (KFD) adopted a joint forest planning and management program for several Karnataka districts These initiatives suggest that Indian state forestry bureaucracies are beginning cooperative management of public forestlands to enhance the welfare of both local communities and forests Can the recent KFD initiative rehabilitate forests while at the same time benefiting forest-dependent communities? To address this question I employed two forest resource use surveys as investigative tools to : 1) document local knowledge and use of forest resources ; and 2) describe impacts of MSPs on a local forest community with respect to gender caste and age The surveys were also structured to explore some policy and management options that could facilitate compromise and cooperation between state forestry authorities and private users of the forest The final three chapters of this research present these surveys their results and the path w ays to compromise that they suggest

PAGE 104

CHAPTER 6 THE COMMUNITY FOREST RESOURCE STUDY : THE BASELINE SURVEY Introduction This chapter describes the testing administration and analysis of a forest resource use baseline survey developed to address the following questions : 1) Who are the local forest-dwelling people in the survey area, and how do they use local forest resources? 2) Do Karnataka Forest Department s (KFD) multiple species plantations (MSPs) provide enhanced benefits to these local people when compared to the benefits they previously enjoyed from the forests MSPs have replaced? 3) If benefits from MSPs do accrue but are unevenly distributed within forest communities what groups are affected and in what ways? 4) How might MSP management be improved to produce those forest products most needed by groups dependent on forests for their subsistence? The baseline or general survey adopts caste affiliation gender and age as independent variables to distinguish intra community differences in informant knowledge of forest plants and products derived from them Reported uses of forest resources in minor forests and minor forests already converted to MSPs are compared for all intra community groups This tests whether the presence or absence of MSPs has any effect on forest-dependent 88

PAGE 105

89 communities Local betta forest use information is also provided for those Havik Brahmins who have usufruct privileges in them The baseline survey also solicits informants suggested improvements to MSPs that would better respond to their own subsistence needs and forest use priorities These responses include local preferences about : desirable tree species for planting lands where new forests ought to be planted and how future reforestation programs should be implemented The Forest Resource Use Study : A Two-Tiered Approach The range of views about forest and MSP resources the gender caste and age groups that profess them and improvements or alternatives to MSPs suggested by each group are the central foci of two surveys undertaken in this study the baseline and forest resource use surveys Baseline or general community information is essential in this context for it affords familiarity with communities affected by the advent of MSP silviculture The most direct method to collect baseline data about people and their use of forest resources is to observe and document their interactions with a forest environment for an extended period. This process usually involves tallying items that people collect from forests learning how the items are used locally, how they are collected how much of each is collected per harvest interval how important each item is to community socio-economic welfare, and how sustainable local collection practices are Investigators use a variety of survey techniques

PAGE 106

90 to gather and analyze such baseline data including the semi structured survey format used in this study If more specific information is sought however a second and more detailed survey (see Chapter 7) instrument becomes necessary The forest resource use survey focuses on informants knowledge of forest plants, and their opinions about the plants they recognize. If properly constructed a detailed survey may reveal informant use of both existing forest areas and the MSPs that are now replacing them This line of inquiry can identify the extent of opportunities gained or lost when MSPs spring up on minor forest land next to forest-dependent villages Hypotheses of Caste Gender and Age to be Tested by the Surveys Caste affiliation has been shown to mediate the management and use of natural resources elsewhere in India (Gadgil and Guha 1992) Caste is also expected to distinguish knowledge and use of forest resources and the benefits they provide to villagers. Knowledge and use of forest products should increase as a function of increasing caste dependence upon these products for subsistence Castes ow n ing more agricultural land or having economic alternatives beyond the forest are expected to be less knowledgeable about forests and to be less affected by their conversion to MSPs However due to reduced plant diversity in young MSPs all caste groups are expected to report that MSPs are less useful to them than the minor forests they replace

PAGE 107

91 Women are expected to have greater knowledge of forest products than men, as they have been observed to visit forests more frequently to collect such products Older people are expected to possess more forest-based knowledge than younger people due to their longer experience in acquiring forest skills and lore. Conversion of forests to MSPs should have little or no impact on community members oriented towards urban economic pursuits, in which forest resources play no part These groups are expected to have the least knowledge of forests regardless of gender caste, or age The Baseline Survey Creation and Administration of the Baseline Survey Terkanahalli Village was selected as the survey study area from a pool of four rural sites, all of which had been repeatedly visited in the course of silvicultural research While most Indian villages I visited maintain a considerable degree of caste or ethnic homogeneity Terkanahalli is a mixed village Within its political boundaries members of 12 different caste groups live in 11 residential groupings or hamlets Hamlets are the most relevant units of rural social organization being predominantly caste-based (Agarwal and Narain 1989 Groenfeldt et al 1990) Formal villages (Gram Panchayat) often encompass several caste specific hamlets making intra-village caste-based differences profound

PAGE 108

92 Terkanahalli is within the field jurisdiction of Mr C Saibaba an officer at the District Commissioner s Office in Sirsi Taluk Mr. Saibaba understood my research interests and described Tarakanahalli as a suitable area for the administration of the forest use surveys I envisioned He also facilitated my entry into the area and the subsequent collection of survey information by hired female assistants The two field assistants were sisters who live in a village 12 km east of Terkanahalli along the Banvasi Road They were recommended to me by the director of a non government development project in the Western Ghats region Both women were in their early 20s The younger was a student and the other a graduate of a two year teacher s training college in Sirsi Both lived on a working farm and were adapted to a rural lifestyle A semi-structured survey of 25 questions was formulated for use in the study's baseline phase. Employees of both government agencies and non-government development organizations guided me in formulating specific questions that would not be perceived as intrusive The survey solicited information about informants' households their forest resource collection and use activities, and their opinions about government MSPs and how they could be improved to better meet local forest use requirements To test the baseline survey, my two assistants first administered it to my neighbors in Sirsi Town As a result of the test the survey format and language were changed when confusing or inappropriate, and the survey s overall length was shortened I then accompanied my assistants to Terkanahalli, to

PAGE 109

93 observe them while two more survey trials were done with villagers sitting at a bus stop on Banvasi Road After the assistants had virtually memorized the survey format and divided administration and recording tasks among themselves they entered Terkanahalli to do two final trials in households by themselves. Having completed these final trials they came to Sirsi to review what had occurred with me The veracity of trial responses concerning family membership, land ownership, income category, and livestock holdings was also checked against the District Commissioner s records by Mr Saibaba Responses agreed with local tax records A final, revised survey format was adopted by me and my assistants and photocopied for interview and recording purposes (see Appendix A) During April and early May 1992 my two assistants independently visited each hamlet in Terkanahalli to conduct the baseline survey in 122 of 140 households Each survey required approximately 30 minutes to administer and sampled all 12 village caste groups. At least four informants were selected from each caste group. If there were fewer than four households representing a particular caste in the survey area then an informant from every household in such under-represented castes was interviewed Eighty-five of the informants were female, while 37 were male Females were intentionally oversampled since they are most commonly involved in the collection of forest resources for personal and household use

PAGE 110

94 Caste Groups Twelve distinct caste groups participated in the Terkanahalli Village baseline survey 1 Havik Brahmin : This is the majority land-holding group Ninety-five percent of all Havik informants own their own lands The largest group of Dravid or southern Brahmins in Kanara Haviks probably migrated from northern India by sea at the end of the 7th century (Bombay Gazetter 1881) Intensively-managed Areca nut/spice garden management is the primary occupation of most lay H aviks These lucrative gardens are usually located on fertile alluvial bottom lands Annual green manuring from betta forest loppings and sophisticated gravity-fed irrigation net w orks sustain garden productivity Some Haviks have non-farm business interests. One-third of all households in the survey area are Havik Brahmin This group commands economic and political respect in Kanara and is prominant in state-level politics as well 2 Lingayat : Processing of oil seed is the historical occupation of many Lingayats This group migrated south into Kanara from Dharwad about 200 years ago Hard-working small merchants and farmers this group has economic influence and brahminical status 3 Sonar/Shet : Believed to have moved inland from Goa after its conquest by the Portuguese in 1510 (Bombay Gazetteer 1881) this group of goldsmiths has taken the honorific Shet after surnames Five of the 9 Sonars interviewed own their agricultural lands A rising class economically Sonars claim brahminical origins. Other Brahmins however perceive them to be of intermediate status 4 Namadha r i Naik : Migrating into the Western Ghats from the Malabar Coast this group has agricultural roots Fifty percent of those surveyed own their own land while one-third work as agricultural laborers A few have local business interests Formerly weak economically and politically Namadhari Naiks are an emerging force in Kanara political affairs 5 Badagi : A ubiquitous local group of carpenters blacksmiths and manufacturers of agricultural tools two of five Badagis interviewed own their agricultural lands. Badagis hold an intermediate position both economically and socially

PAGE 111

95 6 Muslim: Muslims migrated from northern India into the Kanara area of Karnataka about 100 years ago More recently they have moved from Sirsi into rural communities like Terkanahalli Small business owners and urban landlords none of the 11 Muslims interviewed own agricultural land Living adjacent to Banvasi Road most work as unskilled laborers locally or commute to work in Sirsi. While their economic position is w eak Muslims are well-organized and assert themselves politically. 7 Poojari Naik : This group originates from coastal South Kanara District and is still concentrated there Agricultural laborers small business entrepreneurs, and government employees, few Poojaris own land None of the four Poojaris interviewed own land A local minority this group is weak economically and has a relatively low social position 8. Kodiya : Kodiyas are barbers who have moved inland from coastal areas None of the three Kodiyas interviewed own land Besides cutting hair many work as agricultural laborers This group is weak economically and has a low social position 9 Patgar : H aving migrated i nl and f r om coastal areas, Patgars work as agriculture laborers government employees and a few own small businesses The single Patgar woman interviewed owns some irrigated rice land and two animals a cow and a buffalo This group is weak economically and has a low social position 10 Maratha : Maratha migration south into Kanara from Maharashtra occurred about 500 years ago Only one of the seven Marathas interviewed own land Others work as agricultural laborers Marathas have historically collected bamboo and canes from minor forests for processing and sale This is a poor group having a low social position 11 Vokkaliga Gowda : This is a scattered minority in Kanara s interior but large enclaves of Vokkaliga Gowdas are found in coastal North Kanara While few own land five of the seven interviewed lease cultivable lands Not to be confused with pastoral ''gowdas '' in other regions, this group is economically weak, has low status and is unrepresented politically 12 Moger : Primarily fishers originating from coastal areas Magers work as agricultural laborers for others Magers are considered an underprivileged community a scheduled caste, and are the focus of central and

PAGE 112

Hamlets 96 state government affirmitive action programs This group has the lowest social status Terkanahalli Village comprises 11 hamlets Informants from each hamlet were included in the baseline survey Particular caste groups predominate in specific hamlets physically separating themselves from other groups Local minority castes also keep to themselves spatially but sometimes share hamlets with other minorities Integration of minorities is most frequent bordering Banvasi Road allowing landless groups convenient access to employment and market opportunities beyond the village Some but not all groups living in hamlets close to Banvasi Road collect no forest products at all In such cases forest products are purchased from other caste groups that collect surpluses Apart from this roadside-interior distinction, the effect of hamlets on local forest use was not apparent Gender Eighty-five females and 37 males were interviewed Females were intentionally over-sampled in Terkanahalli since there they are most commonly involved in the collection of a variety forest products for personal and household use Table 6-1 shows the distribution of individual survey informants by gender and caste

PAGE 113

97 Table 6-1 Gender and caste distribution of baseline survey informants Caste Females Males Havik Brahmin 24 16 Lingayat 2 0 Sonar/Shet 7 2 Namadhari Naik 19 10 Badagi 5 0 Muslim 9 2 Poojari Naik 3 1 Kodiya 3 2 Patgar 1 0 Maratha 5 2 Vokkaliga Gowda 7 0 Moger 0 2 Age Informants varied in age from 18 to 94 Age distribution by 10-year intervals is presented i n Table 6-2 This table indicates large numbers of female informants between 20 and 29 years of age The interviewers felt that this was because they, too were women in their 20s They reported that women in their 20s were uniformly enthusiastic to answer the survey questions, and were not refused

PAGE 114

98 Table 6-2 Age distribution by 10-year intervals of baseline survey informants Age Interval Females Males Teens 2 1 Twenties 29 6 Thirties 19 9 Forties 11 6 Fifties 14 4 Sixties 4 7 Seventies 3 4 Eighties 2 0 Nineties 1 0 Marital Status Only eight informants were unmarried : three females under 30 years old a 30 year-old female, three males under 30 years old and a 34 year-old male In this region as in much of rural India females normally marry before the age of 20 and males in their early 20s (VIKSAT 1990) Literacy Local usage of the term ''literacy'' extends to those who are only able to write their own signature irrespective of educational background Because of this interpretation reported literacy appears greater than functio n al literacy the ability to read and write at a junior high school level Caste distribution of households in which all female members are

PAGE 115

99 literate in presented in Table 6-3. Nearly total literacy has been achieved among Terkanahalli women in brahminical (Lingayat Havik Brahmin, and Sonar/Shet) households Economically progressive Namadhari Naik and Muslim households display intermediate levels of total female literacy while total household female literacy is low among all other castes. Table 6-3 Distribution of households in which all females are literate by caste Caste Households in Which All Females are Literate n=l22 Havik Brahmin 41 of 42 (98 percent) Lingayat 2 of 2 (100 percent) Sonar/Shet 8 of 9 (89 percent) Namadhari Naik 18 of 29 (62 percent) Badagi 1 of 5 (20 percent) Muslim 7 of 11 (64 percent) Poojari Naik 0 of 4* (0 percent) Kodiya 0 of 3* (0 percent) Patgar 0 of 1* (0 percent) Maratha 2 of 7 ( 29 percent) Vokkaliga Gowda 3 of 7 ( 43 percent) Moger 0 of 2* (0 percent) *Represents all households in the survey area Table 6-4 lists households in which all females or all males are illiterate by caste All brahminical households surveyed are

PAGE 116

100 to some e x tent literate All other caste households surveyed reported tota l fe mal e illiteracy mo r e often t h a n total male illiteracy Table 6-4 Distribution of households in which all females or all males are illiterate by caste Caste Females Males households sampled Havik Brahmin, n=42 0 0 Lingayat n=2 0 0 Sona r /Shet n=9 0 0 Namadhari Naik n=29 7 1 Badagi n=S 2 1 M uslim n=ll 4 2 Poojari Naik n=4* 2 0 Kodiya n=3* 3 0 Patgar n=l* 1 0 Maratha n=7 5 1 Vokkaliga Gowda n=7 4 0 Moger n=2* 2 0 Totals 30 5 *Re p resents a ll households in the sur v ey area Land Ownership Employment and Land Encroachment Ownership of Areca nut/spice gardens has been the historical prerogative of Havik Brahmins in Kanara District Lopping rights in betta forests are a state-sanctioned privilege associated with

PAGE 117

101 spice garden ownership Increasing regi onal and international demand for Ar eca nut continues to boost profits from these gardens In Terkan a halli and throughout Kanara lands that were formerly considered unsuitable for Areca culture are now being converted to gardens wherever possible Namadhari Naik, Sonar/Shet and Muslim groups are no w taking up Areca culture Table 6-5 Land ownership and forest use rights by caste family Caste, n=l22 Own Paddy Own Arecanut Have Betta Forest (rice fields) (spice gardens) Use Rights Havik Brahrnin n=42 37 37 31 Lingayat n=2 0 0 0 Sonar/Shet n=9 5 1 0 Namadhari Naik n=29 20 4 1 Badagi, n=5 2 0 0 Muslim, n=ll 1 1 0 Poojari Naik, n=4 0 0 0 Kodiya n=3 0 0 0 Patgar, n=l 1 0 0 Maratha n=7 2 0 0 Vokkaliga Gowda, n=7 6 0 0 Moger n=2 0 0 0 Totals 74 43 32 Paddy ownership is a another sign of economic welfare, and is becoming more common among non-brahrninical caste groups Table

PAGE 118

102 6-5 provides summary land ownership and betta rights informati on by caste family group Survey responses are based o n family, not individual land holdings Table 6-6 Distribution of employment by caste Caste, n=l22 Landowning Farmer on U nsk illed Other Farmer Leased Land Laborer Havik Brahmin, n=42 39 0 1 2 priestess Lingayat n=2 2 0 0 0 Sonar/Shet n=9 5 0 4 0 Namdhari Naik, n=29 15 1 12 1 retired Badagi n=5 2 0 2 1, carpenter Muslim, n=ll 0 1 7 3, merchant Poojari Naik n=4 0 0 4 0 Kodiya n=3 0 0 2 1 barber Patgar, n=l 1 0 0 0 Maratha n=7 1 1 5 0 V. Gowda, n=7 1 5 1 0 Moger n=2 0 0 2 0 Totals 66 8 40 8 Table 6-6 summarizes informant employment information by caste Land-owning farmers are primarily Brahminical but include half of all Namadhari N aik informants Other non brahminical informants are unskilled laborers except Vokkaliga Gowdas most of whom farm leased land Those w ho classify

PAGE 119

103 themselves as unskilled laborers or coolies work either for land-owning farmers in forest department tree nurseries or in Sirsi Town Forty-six percent of women reported themselves to be unskilled laborers versus 14 percent of male informants Most female laborers ha v e seasonal or non permanent jobs in local tree nurseries jobs performed almost entirely by women. Seedling outplanting work during monsoon rains is also done by women Table 6-7 Distribution of unskilled laborers by caste and gender Caste Females n=85 Males, n=37 Havik Brahmin 1 of 24 0 of 18 Lingayat 0 of 2 none interviewed Sonar/Shet 4 of 7 0 of 2 Namadhari Naik 8 of 19 3 of 10 Badagi 2 of 5 none interviewed Muslim 8 of 9 0 of 2 Poojari Naik 3 of 3 0 of 1 Kodiya 2 of 3 none interviewed Patgar 0 of 1 none interviewed Maratha 5 of 5 0 of 2 Vokkaliga Gowda 6 of 7 none intervie w ed Moger none interviewed 2 of 2 Totals 39 of 85 5 of 37 (46 percent) (14 percent)

PAGE 120

104 Only five of 33 (15 percent) brahrninical female informants were unskilled laborers In contrast 34 of 52 (65 percent) of all non-brahminical women informants were unskilled l aborers Table 6-7 indicates the distribution of unskilled laborers by caste and gender Table 6-8 Distribution of Gaonthana use and land encroachment by caste Caste n=122 House Located on House Located on Agricultural Gaonthana L a nd Encroac h ed L and Encroachment Forest Lands Havik Brahrnin, n =4 2 22 2 2 Lingayat, n=2 0 2 0 Sonar/Shet n=9 7 0 0 Narnadhari Naik, n=29 16 8 7 Badagi, n=5 3 1 0 Muslim, n=ll 0 10 0 Poojari Naik n=4 1 3 1 Kodiya, n=3 3 0 0 Patgar, n=l 1 0 0 Maratha, n=7 2 5 1 Vokkaliga Gowda, n=7 0 1 1 Moger n=2 0 2 0 of Tot a ls 55 (45 percent) 34 (28 percent) 12 (10 percent) Village land gaonthana is mentioned in British land settlement records by the early 19th century (Bombay Gazetteer

PAGE 121

105 1882). Gaonthana is administered by local village governments as sites for schools and other public buildings festival venues sacred places and as homesites for underprivileged families and caste groups As rural populations have grown encroachment of gaonthana by land-strapped homesteaders has become commonplace Gaonthana encroachment is not limited to the poor but commonly practiced by most caste groups Encroachment has also extended into other public land including forest lands as agricultural land has become scarce (see Table 6-8) House and Roof Type Most survey informants have unfired mud walled dwellings and fired clay tile roofs The wealthiest 20 percent of Havik Brahmins have laterite block houses though only three of these have corrugated metal roofs Muslims live near Banvasi Road and purchase fired bricks from non-local sources to build their homes The poorest 25 percent of Namadhari Naiks Vokkaliga Gowdas Poojari Naiks Marathas Muslims and Mogers have thatched roof houses Wealthy families have larger homes stables and connecting courtyards but construct these from mud walls and clay roof tiles Income Informants reported their annual household income in a categorical manner by assignment to one of five intervals

PAGE 122

106 Table 6-9 Distribution of annual household income in I n dian Rupees by caste Caste, n=l22 <2000 2000-5000 5000-10,000 10,000-20,000 >20,000 H Brahmin n=42 0 2 7 11 22 Lingayat, n=2 0 1 1 0 0 Sonar/Shet n=9 0 2 5 2 0 N Naik n=29 3 9 11 5 1 Badagi, n=S 0 2 2 1 0 Muslim n=ll 1 5 5 0 0 P Naik, n=4 0 2 2 0 0 Kodiya, n=3 2 0 1 0 0 Patgar n=l 0 0 1 0 0 Maratha n=7 0 6 1 0 0 v. Gowda n=7 0 1 5 1 0 Moger, n=2 0 1 1 0 0 Totals 6 31 42 20 23 Table 6-9 presents the distribution of these household income intervals by caste Annual income greater than 10 000 Indian Rupees is almost entirely restricted to brahminical and M anadhari Naik castes O n e US dol l ar equalled 22 50 In d ian Rupees in mid1992 Livestock Ownership Domestic animals include bu f fa l oes o x e n, cows and goats Table 6 10 presents the average number of livestock owned per caste household for each of these domesticates

PAGE 123

107 Table 6-10 Distribution of average number of 4 types of l ivestock by caste family Caste Oxen Cows Buffaloes Goats Havik Brahmin, n=42 0 52 2.43 2 24 0 0 Lingayat n=2 0 5 0 0 1 0 0 0 Sonar/Shet n=9 1 3 0 9 0 6 0 2 Namadhari Naik n=29 1 72 1 48 1 38 1 03 Badagi n=5 0 4 3 2 0 6 0 0 Muslim n=ll 0 18 0 0 0 18 0 0 Poojari Naik n= 4 0 0 0 25 0 0 0 0 Kodiya n=3 0 0 2 0 0 0 0 0 Patgar n=l 1 0 0.0 1 0 0 0 Maratha n=7 0 71 1 0 0 0 0 0 Vokkaliga Gowda n=7 1 28 0 86 0 57 0 0 Moger n=2 0 0 0 0 0 0 0 0 Brahminical and Namadhari Naik families maintain relatively large numbers of oxen cows and buffaloes Among other castes Vokkaliga Gowdas maintain modest numbers of these three domesticates Badagis and Kodiyas own primarily cows and Marathas own modest numbers of cows and oxen Collection of Non-Timber Forest Products Informants prioritized the most important products they personally collect from neighboring forests the season of collection and the forest type where collecting activities occur Products most often mentioned include : fuelwood green

PAGE 124

108 leaves (fodder) dry leaves (garden mulch) fruits mushrooms bamboo shoots and fiber These seven product classes represent an incomplete listing of forest products collected locally Informants also mentioned gums resins honey medicinal plants, and timber species used in tool making and house construction. The follow-up survey includes information about these important but lesser-mentioned products Informants confirmed that all they collect is for their personal use or sold locally No forest products are marketed outside of Terkanahalli to generate supplemental income Table 6-11 provides a summary of the number of times priority forest products were mentioned month(s) when they are collected and forest types where they are collected by caste group Fuelwood collection was mentioned most often by informants from all castes, except Muslims who usually purchase fuelwood from forest department depots Havik Brahmins and Namadhari Naiks emphasized dry leaf and green leaf collection to fertilize their gardens/fields and to feed their livestock. Non brahminical informants allocate their collection effort to a wide variety of products This is also true of Sonars/Shets who earn more modest family incomes than do Havik Brahmins Forest product collection effort is most intense at the end of the dry season (April-May) a time of scarcity, but when household labor resources are abundant Minor forests were cited as the most important product collection areas by all castes except : Havik Brahmins who have access to betta forests ; and Kodiyas who live adjacent to a reserved forest.

PAGE 125

109 Table 6-11 Priority forest products, month(s) collected, forest type where collected and number of times mentioned by caste Caste H Brahmin, n=42 Lingayat, n=2 Priority Items (times mentioned) Fuelwood (33) Dry Leaves (30) Green Leaves (26) Fruits (9) Fuelwood (2) Green Leaves (1) Sonar/Shet n=9 Fuelwood (9) Mushrooms (3) N Naik n=29 Green Leaves (2) Bamboo Shoots (2) Fiber (1) Fruits (1) Fuelwood (29) Fiber (11) Dry Leaves (10) Green Leaves (13) Mushrooms (9) Fruits (13) Bamboo Shoots (3) Month (s) Collected May Jan-May Jul-Aug Feb May May Jun-Aug Apr-May Aug Jul-Aug Jun-Jul May May Mar May May Apr-May Jul-Sept Jul-Aug Apr May May-Jun Where Collected (times mentioned) Betta Forests (33), Minor Forests (7), & No Collection (2) Minor Forests (2) Minor Forests (9) Minor Forests (20) Reserve Forests (8), & Betta Forests (1)

PAGE 126

Table 6-11--c o ntinued Caste Badagi, n=S Muslim n=ll P Naik n=4 Kodiya n = 3 Patgar n=l Priority Items (times mentioned) Fuelwood (5) Fruits ( 4 ) Mushrooms (3) Fiber (3) Fuel w ood (1) Gree n Leaves (1) Dry Leaves (1) Fuel w ood (4) Fruits (2) Green Leaves (1) Dry Leaves (1) Mushrooms ( 1 ) Bamboo Shoots(l) Fiber (1) Fuelwood (3) Dry Leaves (1) Fruits (2) Fuelwood (1) Fruits (1) 11 0 Month(s ) Collected May Dec May Jun-Aug All Year Ma y Jun Sept May Apr May Dec-May Jul-Aug Apr-May Jun M ay All Year May Dec Apr May May Apr Where Collected (times mentioned) Reserve Forests (4) & M inor Forests (1) M inor Forests (1) No Collection (10) Minor Forests (4) R eserve Forests (3) Minor Forests (1)

PAGE 127

Table 6-11--continued Caste Maratha n=7 V Gowda, n=7 Moger n=2 Priority Items (times mentioned) Fuelwood (7) Green Leaves (4) Dry Leaves (1) Fruits (1) Bamboo Shoots (1) Fiber ( 1) Fuelwood (7) Dry Leaves (5) Green Leaves (4) Mushrooms (3) Fruits (1) Fuelwood (2) Green Leaves (1) Dry Leaves (1) Fruits (1) 111 Month (s) Collected May Jun-Sept Feb-May Dec-May Jun All Year May May Jun-Aug Aug Dec-May May Jun May May Where Collected (times mentioned) Minor Forests (7) Minor Forests (5), Reserve Forests (1), & Plantations (1) Minor Forests (2) Both women and men participate in harvesting forest products Eight-six percent of both female and male informants collect fuelwood A greater percentage of men than women informants lop trees and collect leaf mulch Numbers and percentages of female and male informants that collect priority forest products are presented in Table 6-12

PAGE 128

112 Table 6-12. Numbers and percentage of female and male informants that collect priority forest products Priority Forest Female Male Collectors Products Collectors, n=85 n=37 Fuelwood 73 ( 8 6 percent) 32 ( 8 6 percent) Green Leaves 28 (33 percent) 25 (67 percent) Dry Leaves 31 ( 36 percent) 19 (51 percent) Fruits 24 (28 percent) 11 (30 percent} Mushrooms 17 (20 percent) 2 (5 percent} Fiber 12 (14 percent) 7 ( 19 percent) Bamboo Shoots 5 (6 percent) 2 (5 percent) Fuelwood Males and females of all castes share in fuelwood collection (see Table 6-13) with the exception of Muslim women Ten female informants did state that it is usually women who go to the forest to collect firewood Fuelwood collection occurs particularly during April and May the final 2 months of the dry season Table 6-13 Fuelwood collection by gender and caste Caste Grouping Female Collectors Male Collectors Muslim 0 of 9 (0 percent) 1 of 2 (50 percent ) All Other Caste Groups 73 of 76 (96 percent) 31 of 35 (89 percent) Annual fuelwood collection for individual households was reported in cartload equivalents 1 cartload equalling 400 kg. Average

PAGE 129

113 annual fue lwood collection per household by caste group is sho wn in Table 6-14 Twenty-one of 42 Havik Brahmin households use biogas generated from domestic animal waste to supplement their fuelwood use requirements Table 6-14 Average annual fuelwood collection in kilograms and cartloads by caste household Caste Househ old Ki l ograms per Fam i ly Havik Brahmin n=42 1600 (4 cart loads) Lingayat n=2 1600 (4 cart loads) Shet n=9 2 4 00 (6 cart loads) Namadhari Naik n=29 3280 ( 8 2 cart loads) Badagi, n=5 2080 (5 2 cart loads) Muslim, n=ll 200 (<1 cart load) Poojari Naik n=4 2000 (5 cart loads) Kodiya n=3 2920 ( 7 3 cart loads) Patgar n=l 2400 (6 cart l oads) M aratha n=7 2800 (7 cart loads) Vokkaliga Gowda n=7 2280 (5 7 cart loads) Moger, n=2 2800 (7 cart loads) Leaves Green leaves are lopped from woody perennials for fodder and are also lopped from betta forest trees and dried before collection as mulch The most popular fodder-producing trees species in Terkanahalli are : Dillenia pentagyna Grewia tiliaefolia Ficus Glomerata Pterocarpus marsupium and Pothos

PAGE 130

114 scandens. Livestock-owning Havik Brahmins, Namadhari Naiks, and Vokkaliga Gowdas allocate considerable effort to lopping leaves Badagis and Kodiyas, many of whom own cows did not report lopping activity They purchase fodder from others and/or collect herbaceous fodder Lingayats and the Patgar did not report how they acquire leaf fodder for their oxen and buffaloes. Green leaf lopping by caste and gender is shown in Table 6-15. Table 6-15 Collection of green leaf fodder by caste and gender Caste Fe m ale Col le ctors Male Collectors Havik Brahmin f=24 f m=lB 14 (58 percent) 12 (67 percent) Shet f = 7 m=2 1 1 Namadhari Naik, =19, m=lO 6 (32 percent) 7 ( 70 percent) Muslim, =9 m=2 0 1 Poojari Naik, f =3 m=l 0 1 Maratha, f=S, m=2 2 2 Vokkaliga Gowda, =7 4 (57 percent) none interviewed Moger, m=2 none interviewed 1 Annual green leaf collection for individual households was reported in headload equivalents 1 headload equalling 25 kg Table 6-16 shows average annual green leaf collection per household for the two major leaf collecting caste groups Havik Brahmin and Namadhari Naik.

PAGE 131

115 Table 6-16 Average annual green leaf collection in kilograms, for the two major leaf-collecting castes Caste Household Kilograms/Household Havik Brahmin, n=42 3437 5 (137 5 headloads) Namadhari Naik n=29 1562 5 (62 5 headloads) Dry leaves are collected on the forest floor and applied to spice gardens and agricultural fields as green manure and mulch Havik Brahrnins apply leaf mulch primarily to spice gardens while Namadhari Naiks and Vokkaliga Gowdas apply mulch to agricultural fields The most popular leaf manure producing tree species are : Careya arborea, Terminalia tomentosa Terminalia paniculata, Pterocarpus marsupium Dillenia pentagyna, and Buchanania latifolia Dry leaf collection by gender and caste is presented in Table 6-17 Table 6-17 Dry leaf collection by caste and gender Caste Female Collectors Male Collectors Havik Brahrnin =24, rn=18 18 ( 7 5 percent) 12 (67 percent) Narnadhari Naik, =19 rn=lO 6 (32 percent) 4 ( 4 0 percent) Muslim f=9 rn=2 0 1 Poojari Naik, =3 rn=l 0 1 Kodiya, f=3, m=O 1 none interviewed Maratha f=S rn=2 1 0 Vokkaliga Gowda, f=7, rn=O 5 ( 71 percent) none interviewed Moger, f=O rn=2 none interviewed 1

PAGE 132

116 Annual dry leaf collection for i n dividual households was reported in headload equivalents 1 h eadload equalling 25 kg. (see Table 6-18) for the two major leaf collecting caste groups Table 6 18 Average annual dry leaf collection in kilograms for the t w o m ajor le a f col l ec t i n g castes Caste Househo ld Kilograms / Household Havik Brahmin n=42 5832 5 (233 3 headloads) Namadhari Naik n=29 1530 (61 2 headloads) Fruits Table 6-19 indicates the number of times informants from different castes m entioned unsolic i ted t h a t th ey collect six Table 6-19 Collection of si x p opular spec i es o f fruit by caste (times mentioned) Caste Mango Jack Wataekai Acacia Soapnut Mangos teen Havik Brahmin n=42 1 1 4 0 7 5 Sonar/Shet, n=9 1 1 1 0 0 0 Namdhari Naik, n=29 3 3 2 1 1 1 Badagi n=S 3 4 3 2 1 Kodiya n=3 2 2 1 1 0 0 Poojari Naik, n=4 1 0 0 0 0 1 V Gowda n=7 1 1 1 1 0 1 Maratha n=7 0 0 0 0 1 0 Total 12 12 12 5 9 9

PAGE 133

117 species of fruit : mango (Mangifera indica) jack (Artocarpus integrifolia) wataekai (Artocarpus lacucha) Acacia (Acacia coccina) soapnut (Sapindus emerginata), and mangosteen (Garcinia indica) These are some of the most popular local forest fruits They are seasonally collected by men and women informants from eight caste groups Mushrooms Two groups of edible funji are collected locally dark and light button mushrooms Both fruit during monsoon rains and are primarily collected by Namadhari Naik and poorer caste women (see Table 6-20 ) Vokkaliga Gowda women reported that they each collect approximately 1 kg of mushrooms each rainy season Though no informants supplement their income from mushroom sales there is a market for them in Sirsi Town Entrepreneurs have begun commercial cultivation of non wild mushrooms in Kanara District Table 6 20 Mushroom Collection by caste (times mentioned) Caste Times Mentioned Namadhari Naik 7 Badagi 2 Vokkaliga Gowda 1 Poojari Naik 1 Sonar/Shet 1

PAGE 134

118 Date Palm Besides consuming Phoenix silvestris fruits poor caste groups use date palm fiber to weave chape mats and to make whisk brooms. Table 6-21 indicates those caste groups that mentioned they collect date palm products Table 6-21 Date palm product collection by caste (times mentioned) Caste Times Ment i oned Namadhari Naik 11 Badagi 2 Poojari Naik 2 Patagar 1 Sonar/Shet 1 Maratha 1 Moger 1 Disappearing Forest Products Table 6-22 lists the 10 products most commonly mentioned by informants as having become scarce or locally extinct Raw nuts of Artocarpus lacucha are dried for use as a sour spice in cooking Acacia coccina seeds are crushed for use as shampoo/soap in bathing Sapindus indica seeds are also a source of shampoo/soap. Havik Brahmins most often mentioned the local disappearance of wild honey (19 times) Artocarpus lacucha (16 times) Acacia coccina (14 times) and Sapindus indica (seven times) from surrounding forests Poorer caste groups uniformly mentioned all of the products listed in Table 6-22

PAGE 135

119 Table 6-22 Increasingly scarce forest products (times mentioned) Forest Produc t T i mes Mentioned Artocarpus lacucha 38 Wild Honey 35 Acacia coccinna 30 Garcinia indica 22 Sapindus indica 12 Construction Timber 12 Bamboo 11 Mushrooms 10 Art oc arpus integrifolia 6 Mang if era indica 4 When asked why these 10 desired products have become scarce or extinct in local forests, illegal lopping and felling of trees was prominently cited (84 of 90 times) Table 6-23 summarizes local beliefs about why these products have become scarce A not applicable response was given for informants who do not themselves collect these 10 forest products

PAGE 136

120 Table 6 23 Reasons cited w hy 10 forest products are becoming locally scarce by caste (times m entioned) Caste S c ar ce, Extinct, Lack of Soil Not Felling Felling Vigilence of too Applicable Forest Guards Dry Havik Brahmin, n=42 5 27 1 0 9 Lingayat, n=2 0 1 0 0 1 Sonar/Shet, n=9 2 3 0 2 2 Namadhari Naik n=29 11 13 0 1 4 Badagi n=S 3 1 0 0 1 Muslim, n=ll 0 4 0 1 6 Poojari Naik, n=4 1 2 0 0 1 Kodiya, n=3 0 0 0 1 2 Patgar, n=l 0 1 0 0 0 Maratha, n=7 2 4 0 0 1 Vokkaliga Gowda n=7 1 1 0 0 5 Moger, n=2 0 2 0 0 0 Totals, n=122 25 59 1 5 32 Local Perceptions of Multiple Species Plantations (MSPs) Only nine of 122 informants indicated that MSPs are of any benefit to the local community Of these nine five Namadhari Naik women and a Poojari Naik woman are seasonally employed in forest department tree nurseries Two info r mants spread Casuarina and Acacia leaves from plantations on their gardens to intentionally suppress weed growth One informant felt that MSPs decreased local timber theft since no harvestable timber can be

PAGE 137

121 found in young plantations Fifty-eight of 122 (48 percent) informants reported that to date they perceive no disadvantages associated with MSPs Sixty-four (52 percent) informants reported four primary disadvantages of MSPs to local communities Two informants felt that only the state government benefits from expansion of MSPs Reported opinions about MSPs were uniformly distributed across all non-Muslim castes and gender lines and are listed in Table 6-24 Table 6-24 Local opinions about MSPs (times mentioned) Opinion about MSPs Times Mentioned Positive benefits 9 No Disadvantages 58 Disappearance of Fodder Resources 39 Fuelwood Collection Restrictions 10 Diminished Ground water Resources 10 Loss of Medicinal Resources 5 Informants were then asked if MSPs are an improvement over the minor forests that they are replacing and on what basis Not one informant reported MSPs to be an improvement over minor forest areas Twenty informants did feel that MSPs have had no net impact on the community either positive or negative. This group consisted of 10 Muslims six Havik Brahmins and four Badagis Many Muslims do not personally collect forest products, while the other two groups have collection privileges in betta or

PAGE 138

122 private forested (malki) la n ds Lost medici n a l r esources were reported exclusively by Havik Brahmins Other negative comparisons of MSPs to minor forests were uniformly distributed across caste and gender and are sho w n in Table 6-25 Table 6-25 Local opinions about MSPs versus minor forests (times mentioned) Opinion about MSPs versus Minor Forests Times Mentioned No Impact Either Positive or Negative 20 Loss of Fodder Resources Leaves & Grasses 30 Fuelwood Collection Restrictions 25 Loss of Green Leaf M a n ure/ M ulch Resources 22 Unspecified Loss of Multiple Uses 17 Loss of Medicinal Resources 8 Perceived Need for Local Forests Informants were asked if there is an increasing need for forests of all types in and around Terkanahalli Village and if so why Everyone agreed that forests are a vital community resource but reasons for this varied A fe w informants stressed specific products derived from forests such as fuel w ood fodder and medicines A majority ho w ever stressed broader environmental attributes of forest systems particular l y those associated with soil fertility and agricultur a l p r oductivity Responses were not caste or gender-specific and are listed in Table 6-26

PAGE 139

123 Table 6-26 Pe r ceptio n s about t he utility of local forests (times mentioned) Perceptions About the Utility of Local Forests Times Mentioned In c reas e S o i l m oi sture & Ext e nd Gr o w i ng Season 32 Improve Local Agricultural Productivity 21 Attenuate Climatic Extremes & Pollution 18 Pr o vide Unspecified Multiple Use Benefits 17 Source of Fuelwood 15 Source of Leaves for Fodder & Green Manure 8 Source of Lumber for Tool Making 6 Source of Medicinal Resources 5 Locally Popular Tree Species When asked about preferred types of trees to be included in future reforestation programs native multiple-use species were mentioned most ofte n (93 times) follo w ed by native timber species (24 times) and native fruit trees (three times) Specific tree species that informants most frequently requested for inclusion in future reforestation programs are listed in Tabl e 6 27 along w ith their prima r y use(s) Eight or more of these species are already among those routinely p l anted in MSPs However 30 informants felt that the growth of native tree species was discouraged in MSPs Five individuals felt that native species should account fo r fully two-thirds of all tree plantings in MSPs Casuarina and Acacia trees presently comprise 65-80 percent of all plantings in MSPs.

PAGE 140

124 Table 6-27 Tree species most requested for inclusion in future reforestation programs and their use Tree Species Times Primary Uses(s) Requested Termlnalia tomentosa 56 Green Manure/Mulch, Lumber Terminalia paniculata 41 Green Manure/Mulch, Lumber Xylia xylocarpa 33 Insect Resistent Lumber, Combustible Seed Pods Pterocarpus 21 Fodder Lumber marsup1.um Coloring Agent Dalbergia latifolia 11 Valuable Lumber Artocarpus heterphylla 9 Lumber Fruit Lagerstroemia lanceolata 9 Lumber Green Manure/Mulch Careya arborea 7 Plough Making, Garden Mulch Mang if era indica 7 Fruit Tectona grandis 7 Lumber Santalum album 6 Incense Making Syzygium 5 Fruit Veterinary Medicine cum1.n1. Anacardium occidentale 3 Fruit Oil Insecticide Vitex ultissima 2 Veterinary M edicine Informants made unsolicited suggestions about how to promote regeneration of these and otner native tree species Fencing/trenching of all remaining minor forests t o facilitate natural regeneration was mentioned 32 times Planting of gaps in fenced minor forests with under-represented native species (enrichment) was menti o n ed 11 times. These suggestions were n ot

PAGE 141

125 caste or gender specific H o w ever si x M usli ms and f our Vokkaliga Gowdas supported e x pansion of M SPs w ithout changes to increase fuelwood supplies Suggested F uture Refo r est at ion Methodolog i es The baseli n e survey concluded by soliciting i n formant opinion about siting of f uture reforestation p rograms (see Table Ta bl e 6-2 8. Loca l r eco mmenda tions fo r siti ng o f f u ture reforest at ion pro g ra m s (ti m es me n tione d ) by ca s te Caste Private Forest Village Betta Not Land Dept Land Land Land Specified Havik Brahmin n=42 2 28 0 1 11 Lingayat n=2 0 1 0 0 1 Sonar/Shet n=9 3 3 2 0 1 Namadhari Naik n=29 2 22 2 0 3 Badagi, n=5 0 3 1 1 0 Muslim n=ll 1 9 0 0 1 Poojari Naik n=4 0 4 0 0 0 Kodiya n=3 0 2 1 0 0 Patgar n=l 0 1 0 0 0 Maratha, n=7 0 4 0 0 3 Vokkaliga Gowda, n=7 0 6 0 0 1 Moger n=2 0 1 0 0 1 Tota l s n=l22 8 84 6 2 22

PAGE 142

126 6-28) and recommended implementation strategies (see Table 629) Eighty-four of 122 informants felt that reforestation programs should continue to be implemented on forest department lands Table 6-29 indicates that 65 of 122 informants desired a continuation of forest department-sponsored tree planting programs However 31 of these 65 informants independently suggested that joint forest planting and management agreements be adopted henceforth Table 6-29 Local recommendations for implementation strategy of future reforestation programs (times mentioned) by caste Caste Private Government Village NGO Not Sponsored Coope r ation Specified Ha vi k Br a h.min, n = 4 2 3 19 15 5 0 Lingayat n =2 0 1 1 0 0 Sonar/Shet, n=9 3 3 3 0 0 Namadhari Naik, n=29 2 16 10 1 0 Badagi, n=S 0 4 1 0 0 Muslim n = ll 0 10 1 0 0 Poojari Naik n=4 0 2 2 0 0 Kod i ya, n = 3 0 2 0 1 0 Patga r n =l 0 0 1 0 0 Maratha, n=7 0 4 1 1 1 Vokkaliga Gowda n=7 0 4 3 0 0 M o ger, n = 2 0 0 1 1 0 Totals, n = l 22 8 65 39 9 1

PAGE 143

127 Joint management arrangements as defined by informants imply local responsibility for protection of replanted forests in exchange for limited tenure over non-timber resources Outright leasing of forest tracts to individuals and families was mentioned five times Reforestation through private initiative was mentioned by eight individuals all of whom own forest land (malki bena). Non-government organization (NGO) sponsorship of reforestation programs has never occurred in Terkanahalli and was rarely suggested Thirty-nine of those interviewed felt that independent village cooperative reforestation schemes should be initiated Twelve Havik Brahmin women suggested that village women s societies (Mahila Mandals) were capable of carrying out cooperative tree planting programs.

PAGE 144

CHAPTER 7 THE COMMUNITY FOREST RESOURCE STUDY : THE FOREST RESOURCE USE SURVEY Introduction When the baseline survey was completed a more detailed forest resource use survey was administered The latter survey focuses on informants knowledge of forest plants and their opinions about the plants they recognize If properly constructed a detailed survey may reveal informant use of both existing forest areas and the Multiple Species Plantations (MSPs) that are now replacing them This line of inquiry can identify the extent of opportunities gained or lost when MSPs spring up on minor forest land next to forest-dependent villages Thirty-seven survey forest resource use survey informants were randomly selected from the sample of 122 that had participated in the prior baseline survey This second survey measures the competence of these Terkanahalli people with respect to identification and use of 65 species of forest plants This survey also assesses the effect of (MSP) programs on women s and men s reported use of forest resources among Havik Brahmins as well as 11 less populous castes in the forest products use survey Finally the survey explores differences in knowledge 128

PAGE 145

129 and reported use of forest resources based on informant age classes of 10-year intervals Forest Products Use Survey Data Collection While conducting silvicultural research I collected plant specimens commonly associated with minor forest environments Forest department field officers and local people helped in plant identification The collection included 65 species (see Appendix B) having commonly recognized uses among village informants For each of the 65 species branches vegetative buds and whenever possible flowers and fruit were photographed several times One 3" X 5" photograph of each species in the collection was selected for future use in the forest resource use survey This photographic collection of forest plants was by no means comprehensive, but did include those species that villagers commonly mentioned they harvested for personal and family use These 65 species became elements in a cognitive domain of locally used forest resources The use of photographs to represent forest species was practical since living material could not be maintained for use during the entire survey Presenting photographs for inspection, rather than flashcards with species names written on them stimulated informants to reflect upon: 1) whether they indeed recognized a particular plant species; 2) the extent of their personal knowledge about the utility of each species ; and

PAGE 146

130 3) the kind of forest or forest type from which each familiar plant species could be obtained all objects of my investigation After recording an informant s gender caste age and hamlet of residence field assistants asked each informant to sort the 65 plant photographs into piles six different times, following the survey questionnaire format (see Appendix C). This procedure is known as pile sorting (Borgatti 1992) In this survey informant sorting was often guided by the use of pre determined categories. Categorical scales help structure pile sorts can be flexibly customized to the particular needs of researchers, and facilitate analysis of survey response data The list below describes the series of pile sorts conducted, and the information content of each sort 1 Informants selected photographs of recognized plant species from the sample of 65 plant photographs This pile sort provides a relative measure of informant competence to correctly identify 65 forest plant species 2 Informants assigned both a tally of uses and the primary use of each identified plant species These responses provide a relative measure of informant knowledge about the versatility and use of each identified plant species (see Appendix D). 3 Informants assigned identified plant species to one of five categories according to their perceived usefulness This pile sort provides a relative measure of informant perception about the utility of each identified plant species 4 Informants assigned identified plant species to one of five categories according to how rare they were perceived to be This pile sort provides a relative measure of informant perception of how often each identified plant species is encountered locally 5 Informants selected those plant species that they had occasion to collect in minor forest areas This pile sort provides a relative measure of the perceived

PAGE 147

131 importance of minor forest areas as sources of forest plants and their products. 6. Informants ranked up to 10 plant species collected in minor forest areas according to their perceived usefulness. They also estimated their annual collection of each plant species. This pile sort provides identification and ranking of the most important minor forest products collected by each informant Pile sorts five and six were then repeated if appropriate, for betta forest MSPs and reserved forest areas Pile sorts five and six provide a relative measure of the perceived importance of betta forest MSPs, and reserved forest areas as sources of identified forest plant species and their products Although attempted pile sorts five and six were discontinued for MSPs and reserve forest areas, since no informant stated thats/he made significant collections of forest plants or their products in MSPs or reserve forests. Both of these forest types are patrolled by the KFD and product collection from them is formally restricted Only three informants mentioned that they collected identified forest plants in betta forests The second survey was administered from late May to early June 1992 Forest Products Use Survey Data Analysis Tools and Procedures The forest resource use survey data were analyzed according to informants caste affiliation gender and age Until the advent of inexpensive and user-friendly applications like Anthropac 4.0 (Borgatti 1992) analysis of large field survey data sets was a difficult task These data analysis tools are

PAGE 148

132 particularly helpful to those who rely on surveys as a primary means of collecting information about people their attitudes, and their environment They provide analytical power in detecting patterns of knowledge and behavior within a sampled population Similarity Matrices If an investigator wishes to evaluate whether individuals or groups of informants have similar attitudes across a domain of items (e g forest plant resources) s/he must first compile informant-by-survey item response data matrices rows of data containing informants judgments about each item in the domain of interest (Bernard 1988) These matrices are normally rectangular, being square when the number of informants exactly matches the number of items in the survey Cell values of data matrices are then compared to generate symmetric, informant-by informant similarity matrices Mathematical coefficients in the cells of so-called aggregate similarity or aggregate proximity matrices numerically indicate how similar or dissimilar, one informant s response profile is to each of the other informant's response profiles Figure 7-1 is a similarity matrix of six female and six male Havik Brahmins identification profiles of 65 minor forest plants A diagonal line of 1 0 values crosses an aggregate similarity matrix from the top left corner to the bottom right corner of the matrix This diagonal includes cells in which each response profile is compared with itself

PAGE 149

1 r 2 F 3 4 F F 133 5 6 7 8 9 F F M M M 10 M ----1 1 M 12 M 1 r 1.00 0.17 0.10 o.59 0.11 o.68 o. 7 4 o.s I o. 78 0.80 o.38 o. 12 1 r 0.12 1.00 0.14 o.59 0.1s 0.12 o.84 O.J9 o.91 0.81 o.-59 o.87 3 F 0.70 0.74 1.00 0.64 0.80 0./j 0./3 0.55 0.67 0.71 0.52 0./1 4 F 0.59 0.59 0.64 1.00 0.63 0.65 0.54 0 52 0.53 0.53 0.53 0.60 5 F 0.77 0.75 0.80 0.63 1.00 0.75 0.75 0.60 0 74 0.75 0. 4 6 0.75 6 F 0.68 0.72 0./3 0.65 0.75 1.00 0.68 0.54 0.71 0 72 0.45 0.69 7 M 0.74 0.84 0.73 0.54 0.75 0.68 1.00 0.58 0.82 0.75 0.39 0.81 8 M 0.57 0.59 0.55 0.52 0.60 0.54 0.58 1.00 0.54 0.57 0.33 0.61 9 M 0./8 0 910.670.53 0.74 0.7 1 0.82 0.54 1.00 0.88 0.38 0.80 10 M 0.80 0 8 1 0.710.530.75 0.72 0.75 0.57 0.88 1.00 0.41 0./6 11 M 0.38 0.39 0.52 0.53 0.46 0.45 0.39 0.33 0.38 0.41 1.00 0.44 12 M 0.77 0.82 0./10.600.75 0.69 0.81 0.610.800.76 0.44 1.00 Figure 7-1 A similarity matrix of p l ant identification by gender, for Havik Brahrnin inf o rmants In this research similarity matrices w ere generated for each response in the forest resource use survey for all 37 informants with respect to caste gender and age class These matrices were then input into hierarchical clustering and multidimensional scaling models to determine w hich informants tend to form clusters to be similar or hang together ". Hierarchical Cl ustering Hierarchi c al clustering (HC) produces cluster diagrams that are agglomerative i e they begin with many small clusters and gradually merge these into fewer and fewer bigger clusters Johnson s hierarchical clustering (Borgatti 1992) is the most common clustering procedure and is used in Anthropac 4 0 HC can be based on several algorithms the most common being: 1 ) the minimum method which agglomerates clusters according to the

PAGE 150

134 greatest similarity between any item in one cluster and any item in another cluster ; and 2) the maximum method, which agglomerates according to the least similarity between any item in one cluster and any item in another cluster. These methods produce similar hierarchies of clusters when data possess a clustered structure. The methods produce varying hierarchies as data become less structured, or non-clustered. Multidimensional Scaling Multidimensional scaling (MOS) is another analytical method that produces a visual representation of similarities among items in a domain MOS mathematically squeezes items into a least stress optimal configuration within two-dimensional coordinate space It does this by calculating Euclidean distances among all pairs of items that have been assigned arbitrary coordinates in n-dimensional space The derived estimation matrix of similarities is then compared to the original input aggregate proximity data (Borgatti 1992) The greater the correspondence between these two matrices the less the stress function The more complex the relationship between items in a domain becomes, the more poorly MOS represents this relationship in two dimensions and the greater the stress function (Stress values of less than 0 1 are considered acceptable in social science research (Borgatti 1992)) In other words informants may tend to think about how items in a domain are related, or how similar they are according to more than one criterion This situation produces unusually large discrepancies in how informants position

PAGE 151

135 ambiguous data items in two-dimensional space To address this weakness of MOS the number of dimensions may de increased to three or more, but the display clarity of two-dimensional scaling becomes sacrificed for an ever-decreasing reduction in stress While MOS can indicate similarities in informant responses when they exist, it can also indicate ambiguous or confusing survey items warranting their removal from subsequent surveys If the stress function becomes too great, it becomes advisable to discard MOS as an analytical technique Consensus Analysis Consensus analysis is based on the premise that agreement implies competence that agreement among informants implies correct knowledge on their part Stated otherwise cultural consensus modeling permits a researcher to compare informant X response data matrices concerning elements in a cognitive domain to measure informant competence. Consensus analysis also provides a collective indication of the culturally defined truth about elements in a domain In formalized testing an individual student s response profile is compared to that of the teacher s response profile on the same examination By computing the proportion of student judgements that match the teacher s a measure of that student's competence or knowledge coefficient can be derived To formulate the probability of two individual students giving the same answer to specific questions four potential outcomes must be considered :

PAGE 152

136 1 Student A and Student B both know the correct answer ( s ) ; 2 Student A knows the correct answer while Student B guesses correctly ; 3 Student B knows the correct answer while Student A guesses correctly ; 4. Neither student knows the correct answer but both guess the same answer regardless of whether it is correct or incorrect When these four probabilities are summed the probability that Students A and B give the same answer (mAB) is : dAdB + dA(l-dB)/L + dB(l-dA)/L + (1-dA) (1-dB)/L, in which dA = p(Student A knows) dB p(Student B knows) (1 dA) p(Student A does not know) (1-dB) = p(Student B does not know) L = number of alternative choices 1/L = p(a student guesses correctly). This expression can be simplified to become mAB = (dAdB-1)/L Thus, agreement between Student A and Student Bis the product of their respective competencies (Borgatti 1992) Three assumptions must be met for this model to be robust : 1) there must be only one truly correct answer pertaining to each item in a domain ; 2) there is independence among the judgements each student makes about items in a domain; and

PAGE 153

137 3) there is homogeneity (or random selection) of the items in the domain that are selected for students to judge The utility of the consensus model is its predictive power about the correct answers to an examination or a forest products survey even when there is no teacher s answer key available for reference By analyzing student-student examination response similarities (or informant-informant survey response similarities) both the level of each informant s knowledge and the culturally correct answers to survey questions can be deduced Such a model also permits researchers to distinguish variation in responses at the sub-cultural level In other words consensus modeling can aid field researchers in identifying not only culturally defined correct answers but also those subgroups within a culture that possess knowledge about a given cognitive domain and those subgroups that do not Three assumptions analogous to those mentioned above must be met for consensus modeling to remain robust in the context of socio-cultural surveys : 1) variability in informant response is due to differences in amount of knowledge not due to differences in cultural reality (i e all informants are members of the same comprehensive culture) ; 2) informants respond to survey questions independently of other informants and do not give systematic responses (i.e such as always answering yes ) ; and 3) all items to be judged by informants are drawn from the same cognitive domain and not mixed with items from any other domains

PAGE 154

138 As a final test for significant contrasts in informant response profiles correlation analysis was performed on all knowledge coefficients produced by consensus analysis using SPSS for Windows (version 6 1 2) Forest Products Use Survey Results Plant Identification Multidimensional scaling hierarchical clustering and consensus analysis procedures were first used to compare informant response profiles for plant identification Results provide a visual and mathematical basis for evaluating informant plant identification skills with respect to caste gender and age class The single cluster in the upper right-hand portion of Figure 7-2 indicates similarity across castes in identifying 65 plant species Informants positioned beyond the cluster include : one Namadhari Naik (NN) a 65 year old woman ; one Poojari Naik (Po) a 35 year old woman ; one Kodiya (Ko) a 45 year old man ; and one Sonar/Shet (So) a 27 year old woman Figures 7-3 and 7-4 show the same plant identification response profiles with respect to gender and age class respectively

PAGE 155

Dim 2 I I 0 41 J I 1 0.46 J I I l 34 NN I I J 2.21 J j J 3.08 I J 1 Po 3. 1 6 -2.30 139 1 I A So M u HB I 1 44 Bo M u HB M oBHB M o So NN I 1 M o8 M uo Ko Bo N NPooGHB Po HB Bo I Po ' A I I A J I J A I I I 0.J9 0.27 Dim l Stress 0 1 in 2 dimensions ofter 32 ile r otions. Figure 7-2 Plant identification by caste using multidimensional scaling l I I A Figure 7-3 indicates internal similarity among males and females in plant identification with the exception of the four informants mentioned above Plant identification response profiles also appear similar across ten-year age classes (1 : 1019 ; 2 : 20 29 ; 3 : 30-39 4 : 40-49 ; 5 : 50 59 ; 6 : 60 69 and NA : age unknown) in Figure 7-4 In Summary MOS analyses indicate general similarity among informants in their ability to identify 65 plant species from photographs

PAGE 156

Dim 2 I 0 // j I I 0.61 I I 1 4 4 I I J -2.2 8 J I J J l l J J J 140 t MM I MMI M I r f F FMMM f F f IF FF I r M F M F -3 16 2.30 1 44 -0.5 9 S l ress in 2 dimensions is 0.1 of ler 32 ilerolions J J A J J ) A J I J A I I 1 A J A J J J 0.27 Dim 1 Figure 7-3 Plant identification by gender using multidimensional scaling

PAGE 157

141 .................................................................... .......................................................................... t. 0.84 A J J I I 2 2 2 I 0 1? 5 J 13 5N25 24 A I I 1 262 5? J I 2 2 2 4 1 I 6 I I 08 2 A I 1 6 1 I I 7 0'.) I I I -3.0 I A l l I I J. Jj -2.24 I JJ 0 46 0.42 Stress in 2 dimensions is 0.1 ofter .52 ile ro l 1 ons. Figure 7-4 Plant identification by ten-year age classes using multidimensional scaling Hierarchical scaling of plant identification response profiles is shown in Figure 7 5 In all hierarchical scaling figures single letters represent castes as follows : h (Havik Brahmin) n (Namadhari Naik) s (Sonar), b (Badagi) M (Muslim), P (Poojari Naik) k (Kodiya) p (Patgar) m (Maratha) and g (Vokkaliga Gowda) ; F indicates female while M indicates male ; and the numbers 1 through 6 are matched to their respective 10 year age classes

PAGE 158

14 2 n I) s k h rr1 p b M b b h s rn h q IJ M q k n p n h h h s h k h m h h h h m M CASTE F F F M M F f F F F F M I F F F F F f F F F f F F F F F F M M M M I M M M GENDER 6 3 2 4 6 5 2 4 5 2 3 2 1 2 2 2 1 2 7 3 2 1 j 5 2 J 3 1 2 N 6 1 4 2 5 2 1 AGE 0.906J ................................. XXX .. 0.8846 ....... ..................... XXX XXX .. 0.8769 .......... ........ ......... XXX XXXXX .. 0.8361 .......................... .. XXX XXXXXXX .. 0.8776 ............................. XXX XXXXXXXXX 0.818? ............................ xxxx xxxxxxxxxx 0.816 / .... ...................... xxxxxxxxxxxxxxx 0.80J9 ..... .................. XXX XXXXXXXXXXXXXXXX 0.80jJ ........................ XXX XXXXXXXXXXXXXXXXX 0. /818 ........................ xxxxxxxxxxxxxxxxxxxxxxx 0. /697 ................... XXX .. XXXXXXXXXXXXXXXXXXXXXXXX 0. / 4 55 ............. ..... XXX .. XXXXXXXXXXXXXXXXXXXXXXXXX 0. / 400 ............. ..... XXX XXXXXXXXXXXXXXXXXXXXXXXXXXX O. / J 1 / ............. ..... xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.114 j .................. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0. 703 7 .................. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0. 7027 ......... XXX ...... XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.6905 ......... XXX ...... XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0. 684 2 ......... XXX .... XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.6879 ......... XXX ... XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0. 6 /92 ......... XXX .. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.6739 ........ XXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.6585 ........ XXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.6486 ........ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.6481 ........ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.62 /5 ....... xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.6061 ...... xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.J I 14 . . XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.JJ/6 .... xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.5000 ... xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 0.4857 .. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx O.J529 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0.-5000 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Figure 7 5 Plant identification by caste gender and age classes using hierarchical clustering Four of six Havik Brahrnin (h) w omen similarly identified 65 local plants at the 0 8167 level or greater Four of six Havik Brahrnin men sim i larly identif i ed these plants at the 0 73 17 l ev el

PAGE 159

143 or greater This suggests greater internal agreement among Havik Brahmin women about plant identification than among Havik Brahmin men There are no other notable clusters with respect to caste Age classes are not separately clustered and therefore do not serve to distinguish differences in plant identification among informants Table 7-1 Consensus analysis of informant identification of 65 plants by caste CONSENSUS ANALYSIS Pseudo Reliability = 0.936 l IGl:.NVALUES I ACIOR VALUl PERCl:. N 1 CUM % RArlO --------1 : 12 .OJ9 61.J 61.5 1.928 7: 6.2~ 31. 9 93 J 4. /89 j: 1 .J04 6.7 100.0 ------19.588 100.0 Your data ore not w ell-exp l ained by a sing l e facto r Th i s cond i tion violates lhe One Cultu r e assumption of the Co n sensus M odel. Consensus modeling results in Table 7-1 provide evidence that the assumption of one culture is not supported with respect to plant identification by caste Anthroppac 4.0 computes the eigenvalues (the ratio column in consensus analysis tables) of chance adjusted individual similari t y matrices If the ratio of the first eigenvalue to the second eigenvalue is less than 3 to 1, the case in Table 7-1 there is evidence that informants have

PAGE 160

144 at least two varying perceptions of truth about the domain of interest The assumption of one culture is also not supported when comparing plant identification knowledge for women informants only In contrast a ratio of 10 to 1 would provide strong support for the assumption that informants share the same comprehensive culture i e informants do not originate from different subcultures (Borgatti 1992). To seek explanations for differences in informant plant identification knowledge consensus analysis also compares informant X survey response data matrices to identify the culturally correct identification of each plant It then refers to this culturally defined answer key in estimating each informant s knowledge coefficient for plant identification Informant knowledge coefficient data for which higher decimal values represent greater relative knowledge, indicate that caste, gender and age groups all possess a range of plant identification knowledge internally (see Table 7-2) Similarly, correlation analysis of these knowledge coefficients with respect to caste gender, and age produced no significant results Several castes contain skilled field botanists For example three high-scoring male informants (# 28 # 33, and# 35) were all found to be ayurvedic herbalists Comparison of Table 7-2 and Figure 7-5 does suggest that Kodiya Vokkaliga Gowda and most Havik Brahmin women informants are both similar and competent in plant identification The two Kodiya women similarly identified the plants at the 0 7818 level and had knowledge coefficients of 0 69 or higher The two Vokkaliga

PAGE 161

145 Gowda women similarly identified the plants at the 0 7143 level and had knowledge coefficients of 0 64 or higher To summarize plant identification knowledge is not uniform among informants, but cannot be easily distinguished according to caste gender, or age Most caste gender and age groups display broad intra-group differences in both plant identification profiles and plant knowledge For Havik Brahmins agreement among women is greater than among men With the exception of two competent herbalists Havik Brahmin men possess lower plant identification knowledge coefficients than do Havik Brahmin women.

PAGE 162

146 Table 7-2 Knowledge coefficient of informants in identifying 65 local plants with respect to caste gender, and age class Informant~ Caste 1 Ba 2 Ba 3 Ba 4 Go 5 Go 6 HB 7 HB 8 HB 9 HB 10 HB 11 HB 12 Ko 13 Ko 14 Ma 15 Ma 16 Mu 17 Mu 18 NN 19 NN 20 NN 21 Pa 22 Pa 23 Po 24 Po 25 So 26 So 27 So 28 HB 29 HB 30 HB 31 HB 32 HB 33 HB 34 Ko 35 Ma 36 Mo 37 Mu Average : 0 526 Std. Dev .: 0 221 Gender F F F F F F F F F F F F F F F F F F F F F F F F F F F M M M M M M M M M M Priority Use of Plants Age Knowledge Coefficient 2 0 51 3 0 53 4 0 43 2 0 64 2 0.69 1 0 57 2 0 57 2 0 76 2 0 59 3 0 72 5 0 63 2 0 76 3 0 69 2 0 60 5 0 35 2 0 .4 7 5 0 58 2 0.70 3 0 64 6 0 22 1 0 64 2 0 37 1 0 .4 9 3 0 09 1 0 59 3 0 72 2 0 22 1 0 66 2 0 51 4 0 44 5 0 54 6 0 34 NA 0 74 4 0 09 6 0 77 2 0 61 1 0 59 Multidimensional scaling hierarchical clustering and consensus analysis are next used to compare informant response

PAGE 163

147 profiles for the priority use of recognized plants based on caste gender and age class D,m? u ........ ........................... .. .... ..... ..... ..... ... ......................... ............................................. ......... ...................................... .... ...... . ; ... /\Ml I I I I HB J 0.52 HB A I 118 HB HB J I HB HB HB I I 11B Ko HB J Bo HB HBKo M o Mu So Bo G N Po So M u J 0 40 NN Go Po A ' NN Bo 1 Po 1 .33 ' J I Po 2.25 t I 1 t J 18 ' 3 ?4 2 2? 1 20 Slress 1n ? dimensions 1s 0.11 J M u M o So Ko -018 0.8 4 D1rn 1 I I 1 A I I t I J I J Figure 7-6 Priority use of recognized plants by caste using multidimensional scaling

PAGE 164

148 Figure 7-6 indicates greater similarity among Havik Brahmin (HB) plant use response profiles than when compared with other caste groups Figure 7 7 similarly shows a distinct contrast between male and female informants with respect to priority use of recognized plants Males tended to report agriculturally oriented uses of plants fodder mulch and food Females tended to report household and medicinal plant uses (see Appendix D) medicines, tonics cleansers fiber and tools helping to account for this contrast These contrasts are supported by correlation analysis of the priority use knowledge coefficient data shown in Table 7-3 Havik Brahmins reported different priority uses of recognized plants than did the other castes : r = 0 5269 p = 0 001 n = 37 Similarly castes having lower social standing (Vokkaliga Gowda Kodiya Maratha Moger Poojari Naik and Patgar) jointly reported different priority uses than did the higher status castes : r = 0 3622 p = 0 028 n = 37 Finally women reported different priority uses of recognized plants than did men : r = 0 4443 p = 0 006 n = 37 Age class did not produce recognizable distinctions in priority use of plants response profiles

PAGE 165

149 Dim 1 ......... 00000+00 +OO > .. ., .. '''*"' u J I J 0 .96 A J M 1 1 M l 1 M J J r F J J M M 1 0 06 M F F r MMM I A r F r FF I J F r r FF 1 F J F F I I J 1 0/ J 1 I I J J I I I F M I 2.09 A I J I 1 I l I l I 1 J IO A J l J l 1 1 J 1 l 2 26 1 ') / 0.28 0 / 1 Dim 1 Stress 1n 2 d1mens1ons is 0.11 J Figure 7-7 Priority use of recognized plants by gender using mu l tid i mensional s c aling

PAGE 166

150 Table 7-3 Informants knowledge coefficients of the priority use of recognized plants by caste and gender Caste Gender Ba F Ba F Ba F Go F Go F HB F HB F HB F HB F HB F HB F Ko F Ko F Ma F Ma F Mu F Mu F NN F NN F NN F Pa F Pa F Po F Po F So F So F So F HB M HB M HB M HB M HB M HB M Ko M Ma M Mo M Mu M Average : 0 700 Std Dev : 0 093 Knowledge Coefficient 0 72 0 67 0 73 0 84 0 82 0 67 0 51 0 69 0 81 0 67 0 74 0 72 0 74 0 72 0 74 0 76 0 69 0.78 0 77 0 64 0 71 0 77 0 81 0 70 0 65 0 77 0 73 0 65 0 66 0 33 0 53 0 66 0 63 0 67 0 76 0 69 0 74

PAGE 167

151 Plant Versatility (Number of plant uses) The perceived versatility (number of uses tallied) of recognized plants is analyzed ne x t The heterogeneous cluster in the lower left portion of Figure 7-8 suggests differences between Havik Brahmins and all other castes in tallying the number of uses for each recognized plant species Dim 2 l I l I 3.10 A I l I l l l 7 08 A I I I J I I I I J I l .06 Ko Po NN A 1 HB I l J Po Ba I I Po NN Po I M u Go Go NN M o 0.04 M oSo HBKo A J HB HB M o M a M u I J HB HB So M u Bo So I I HBB I HB HB HB I t 0 98 A J J J 1 I HB I I I I I " ,._ I " o, u ,, , ,, , ,_ ,, 0 0 1 1 ? 0 lJ 0.8/ 1 86 2.86 St r ess in 2 dimensions is 0. 117 Figure 7-8 Plant versatility or number of uses tallied for recognized plants by caste using multidimensional scaling

PAGE 168

152 Informants positioned beyond the cluster include three of the outlie r s no t ed earlier : one Namadhari Naik (NN) a 65 year old w oman ; one P oojari N aik (Po) a 35 year o l d w o m an ; o n e Kodiya (Ko) a 45 year old man ; plus one Havik Brahmin (HB) a 25 year old man and a different Sonar (So) a 30 rather than a 27 year old woman Dim 2 0.. . .. . J 3.10 ' I I 7 08 J 1 I 1.06 I I F r I F F 0.04 M I M M M I [ r FF M r M 1 0 98 I ' I F FF r r M 0# ......... ............ M I r F r M r M I F I A I J J A I I I A I I 1 1 A 1 I 1 I J A I J I .. ,....,I oo ,o , ,. ,,,,, ,. ,. ,. ,, ,, 1.1 2 0 Jj 0 87 1.86 2.86 Dim 1 Stress 1n 2 d1mens1ons is 0.117 Figure 7-9 Plant versatility or number of uses tallied for recognized plants by gender using multidimensional scaling

PAGE 169

153 Figure 7-9 indicates that when excluding the five outlying informants male and female response profiles of plant versatility are located on opposite sides of the cluster Table 7-4 Consensus analysis of informant knowledge of plant versatility by caste CONSENSUS ANALYSIS AAAA Pseudo-Reliability= 0 960 EIGENVALUES FACTOR VALUE PERCENT CUM % ------------------------1 : 15 100 80.3 80.3 2: 2.854 15.2 95.5 3: 0.851 4.5 100.0 --------------------------------------------18 805 100.0 RATIO ------5.290 3.356 ---------Tables 7 4 and 7 5 also suggest that informant knowledge of plant versatility is not uniform The 1 6 ratio of eigenvalues indicates more than one cultural perception about plant versatility T h is difference is accounted for on the basis of caste and as will be shown gender within the Havik Brahmin caste Knowledge of plant use versatility is high among non Havik Brahmin castes particularly for Gowdas Marathas and Poojari Naiks Females have greater knowledge coefficients than males of plant versatility with the exception of two less knowledgeable Havik Brahrnin women aged 18 and 20 and three knowledgeable males These contrasts are supported by correlation analysis of the plant versatility knowledge coefficient data shown in Table 7-5

PAGE 170

154 Table 7-5 Informants knowledge coefficients of versatility of recognized plants by caste gender, a n d age Caste Gen der Age Ba F 2 Ba F 3 Ba F 4 Go F 2 Go F 2 HB F 1 HB F 2 HB F 2 HB F 2 HB F 3 HB F 5 Ko F 2 Ko F 3 M a F 2 M a F 5 Mu F 2 Mu F 5 NN F 2 NN F 3 NN F 6 Pa F 1 Pa F 2 Po F 1 Po F 3 So F 1 So F 3 So F 2 HB M 1 H B M 2 HB M 4 HB M 5 HB M 6 HB M NA Ko M 4 Ma M 6 Mo M 2 M u M 1 Average : 0 626 Std Dev .: 0 129 Knowledge Coefficient 0 67 0 72 0 65 0 77 0 76 0.40 0 .4 3 0 62 0 74 0 58 0 58 0 62 0 76 0 70 0 73 0 73 0 6 4 0 79 0 65 0 57 0 63 0 77 0 72 0 65 0 65 0 64 0 67 0 47 0 .4 6 0 18 0 35 0 69 0 52 0 65 0 70 0 59 0 67 Havik Brahrnins reported fewer uses of recognized plants than did the othe r castes : r = 0 7185 p = 0 005 n = 37 Castes having lower social standing (Vokkaliga Gowda Kodiya Maratha, Moger

PAGE 171

155 Poojari Naik, and Patgar ) jo int l y reported more uses of plants than did the higher status castes : r = 0 4063 p = 0 0 13 n = 37 Women informants reported more uses of recognized plants than did the men : r = 0 4565 p = 0 005 n = 37 Figure 7-10 indicates that for Havik Brahmins only, females plant versatility response profiles are more tightly clustered and therefore more similar than those of males 1 7 1 A 1 I I J I J I I OJ l M I J M I J J J J 0 J~ f A I 1 l r I I F M I J O.J2 r 1 J 1 I J M 1 I I I 00 M A J I 1 17 0.49 0.14 0 .7 6 1 .39 Dim 1 S lr ess 1 n 2 dimensions is O 116 Figure 7-10 Plant versatility or number of uses tallied for recognized plants by gender for Havik Brahmins using multidimensional scaling

PAGE 172

156 Hierarchical clustering analysis in Figure 7 11 further supports the notion of internal similarity among Havik Brahmin female response profiles for plant versatility (0 4576 or greater ) when c o mpared to Havik Brahmin males (0 3333 or greater) Knowledge coefficients in Table 7-6 suggest that Hav i k Brahmin women are more knowledgeable about plant versatility than Havik Brahmin men Correlation analysis of the plant versatility knowledge coefficient data shown in Table 7-6 confirms that Havik Brahmin women reported more uses of recognized plants than did Havik Brahmin men : r = 0 6627 p = 0 019 n = 12 Age class is not reliable in distinguishing similarities in response profiles for plant versatility l1l[RARCHICAL CLUSl [RING MMMMFFr,MFFM 0.JJjj 0.5082 0.4912 0. 4643 0.4576 0. 4 4 90 0. 4 468 0.4JSS 0.4000 0.-5684 O.Jjjj . . . . . XX X . . . X X X X X X . . . X X X XXXXX . . . xxxx xxxxx . . . xxxxxxxxxxx .... xxxxxxxxxxxxxx .... xxxxxxxxxxxxxxx ... xxxxxxxxxxxxxxxxx .. xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx Figure 7-11 Number of uses tallied for recognized plants by gender, for Havik Brahmins, using hierarchical clustering

PAGE 173

157 Table 7-6 Knowledge coefficients of versatility of recognized plants by gender, for Havik Brahmins Gender Age Class F 1 F 2 F 2 F 2 F 3 F 5 M 1 M 2 M 4 M 5 M 6 M NA Average: 0 556 Std Dev .: 0 116 Plant Usefulness Knowledge Coefficient 0 54 0 54 0 70 0 69 0 69 0 63 0 58 0 40 0 35 0 41 0 48 0 64 Multidimensional scaling, hierarchical clustering and consensus analysis are next used to compare informant response profiles about the perceived usefulness of recognized plants, based on caste, gender and age class The cluster of Havik Brahmins in the lower left corner of Figure 7-12 suggests differences between them and other castes with respect to plant usefulness response profiles, though the stress value (0 215) in two dimensions is too great to warrant confidence Multidimensional scaling of plant usefulness in three dimensions amplifies these differences, w hile only moderately reducing stress (0 171) Analogous differences between males and females are obtained when comparing perceived plant usefulness profiles by gender (see Figure 7-13) though stress values remain the same Age class did not produce recognizable distinctions in

PAGE 174

158 perceived plant usefulness response profiles. Multidimensional scaling results of plant usefulness response data are, by themselves inconclusive Dim 2 2 J4 I J 1.5.5 1 1 Bo 1 0. 7 1 Bo 1 HB Po PoBo 1 So Ko Ko M o J Co So NN M Po 0 10 HB Mu Go Mu HB 1113 Mol lB Mu 1 HI IBHB HH HB 1 HB M o N N 0 92 HB 1 0 91 0.22 0.5J Slress in 2 dimensions 1s 0.215 Ko Po So 1 28 N N 2.0J D i m 1 A 1 1 1 J I A A I 1 I 1 I A 1 I Figure 7-12 Perceived usefulness of recognized plants by caste, using multidimensional scaling

PAGE 175

159 i -----------------------Dim 1 0.9J : 0.42 : 0 10 : 0.63 : I I 91 I 4 F-21 F48 F 93 M -J r 68 116 M 45 F 15 1 56 F5 r20 r ?3 F115 F14 1 57 ~59 M 59 147 F70 M 61 ~51 M 3 4 0 F37 M 141 F-24 F23 M -52 F M 45 M 4 1 F6 F77 M -89 0 66 0 12 0.47 0.96 Sl r ess in J d1mens1ons is O 171 --------------I I + 1.50 Dim 2 Figure 7-13 gender using Perceived usefulness of recognized plants by multidimensional scaling Hierarchical clustering analysis also fails to produce clear distinctions in plant usefulness profiles w ith respect to either caste gender or age class. Consensus modeling results in Table 7 7 provide evidence that the assumption of one culture regarding perceived usefulness of recognized plants is not supported with respect to caste However Tab l e 7-8 suggests that differences in perceived plant usefulness are better explained on the basis of gender rather than caste With the exception of two less knowledgeable Hav i k Brahmin women and one knowledgeable Maratha man females have

PAGE 176

160 higher knowledge coefficients of the perceived usefulness of recognized plants than males This conclusion is supported by correlation analysis of perceived plant usefulness knowledge coefficient data shown in Table 7-8 Women perceived the usefulness of recognized plants differently than did the men : r = 0 3505 p = 0 033 n = 37 Age class is not reliable in distinguishing similarities in response profiles for plant usefulness Table 7-7 Consensus analysis of perceived usefulness of recognized plants by caste CONSENSUS ANALYSIS Respondent Reliability= 0.946 EIGENVALUES FACTOR VALUE PERCENT CUM % ------------------------1 : 12.512 76.4 76.4 2: 2.327 14.2 90.6 3: 1.539 9.4 100.0 --------------------------------------16.378 100.0 RATIO ------5.378 1.511 ------------

PAGE 177

161 Table 7-8 Knowledge coefficients of perceived usefulness of recognized plants by caste and gender Caste Gender Ba F Ba F Ba F Go F Go F HB F HB F HB F HB F HB F HB F Ko F Ko F Ma F Ma F Mu F Mu F NN F NN F NN F Pa F Pa F Po F Po F So F So F So F HB M HB M HB M HB M HB M HB M Ko M Ma M Mo M Mu M Average: 0 568 Std Dev .: 0 123 Knowledge Coefficient 0 62 0 59 0 39 0 65 0 77 0 48 0 38 0 61 0 72 0 60 0 71 0 72 0 71 0 55 0 48 0 59 0 58 0 78 0 64 0 40 0 58 0 65 0 59 0 36 0 52 0 64 0 75 0 45 0 .4 3 0 32 0 42 0 52 0 58 0 43 0 72 0 52 0 59

PAGE 178

162 Recognized plants receiving the highest informant usefulness scores and their consequent rankings are presented in Table 7 9 Table 7 9 Rankings and usefulness scores (lower score indicates greater usefulness) of the most useful survey plants according to survey informants Plant name Ranking Score Bambusa arundinaceae (Retz ) Willd 1 186 Emblica officianalis Gaertner 2 203 Garcinia indica (Thouars) Choisy 3 253 Syzygium cumini ( L ) Skeels 4 265 Artocarpus integrifolius L f 5 270 Pheonix silvest r is (L .) Roxb (Phoenix 6 272 acaulis) Dillenia pentagyna 7 288 Caryota urens L 8 301 Careya arborea Ro x b 9 314 Mytrigyne parviflora 10 325 Holarrhena antid y senterica (Roxb ex 11 334 Fleming) Cinnamomum zeylanicum Blume 12 348 Terminalia cebula (Gaertner) Retz 13 366 Hemidesmus indicus ( L ) Schult 14 367 Calycopteris floribunda Roxb 14 367 Sapindus emarginata L 15 368 A porosa lin d leya n na 16 371 Anacardium occidentale L 17 373 Anamirta panicul a ta Colebr 18 377 Artocarpus lacucha 19 382 Duranta plumeria 20 383 Albizia Amara Biovin 21 384 Semeca r pus anaca r di u m L f 22 391 Randia dumetorum La m k 23 392 Aerua lanata Juss 24 393 Carissa carandas L 24 393 Buchanania latifolia Roxb 24 393 Only 4 of these 27 most useful plant species are reported to be locally abundant : Holarrhena antidysenterica Calycopteris

PAGE 179

163 floribunda Dillenia pentagyna and Hemidesmus indicus. The other 23 species are in demand locally and might induce a favorable response if included in future social forestry programs. Plant Abundance Plant species most often reported to be locally abundant include : Coloccasia esculenta Coloccasia esculenta var black, Holarrhena antidysenterica, Cassia fistula Calycopteris floribunda Dillenia pentagyna Michelia chempaca Vitex negundo Hemidesmus indicus and Holigarna aronottiana Consensus analysis results alone indicate slight contrasts in informant response profiles about perceived local abundance of recognized plants and then only on the basis of age class This conclusion is supported by correlation analysis of perceived plant abundance knowledge coefficient data shown in Table 7-10 Younger informants displayed relative greater knowledge about local abundance of recognized plants than did older informants : r = 0 3551, p = 0.034 n = 36 However, 20 of 37 informants were less than 30 years old at the time of the survey and this may have weighted collective knowledge about plant abundance in the direction of these younger informants

PAGE 180

164 Table 7-10 Knowledge coefficients of perceived local abundance of recognized plant species by caste gender and age Caste Gender Age Ba F Ba F Ba F Go F Go F HB F HB F HB F HB F HB F HB F Ko F Ko F Ma F Ma F M u F Mu F NN F NN F NN F Pa F Pa F Po F Po F So F So F So F HB M HB M HB M HB M HB M HB M Ko M Ma M Mo M Mu M Average: 0 5792 Std Dev : 0 113 2 3 4 2 2 1 2 2 2 3 5 2 3 2 5 2 5 2 3 6 1 2 1 3 1 3 2 1 2 4 5 6 NA 4 6 2 1 Class K n o w ledge Coefficient 0 60 0 56 0 38 0 67 0 76 0 47 0 .4 2 0 68 0 71 0 63 0 62 0 71 0 70 0 56 0 54 0 62 0 61 0 73 0 60 0 34 0 67 0 66 0 64 0 46 0 54 0 52 0 73 0.60 0 .44 0 34 0 .4 9 0 54 0 62 0 38 0 68 0 57 0 64

PAGE 181

165 Discussion of Survey Results Proper identification of 65 species of local plants was not uniform among informants but could not be easily distinguished by caste gender or age Survey informants from each of these three groups expressed a range of plant identification knowledge Contrary to expectation, informants from lower status castes did not identify plants any better than informants from higher status castes Havik Brahmin women expressed greater internal agreement about the identity of local plants than did Havik Brahmin men They also had higher plant identification knowledge coefficients than did the men Havik Brahmins did have different plant use priorities than other caste groups Similarly the six lower status castes had different plant use priorities than the six higher status castes Men of all castes had different plant use priorities than did women Men emphasized fodder and mulch uses of plants, while women gave more importance to plant-derived medicines, tonics, fiber, tools and food uses of plants Women of all castes both agreed and knew more about the multiple uses of plants than did men Women of all castes also had different perceptions of the usefulness of recognized plants than did men particularly Havik Brahmin men Women were more sensitive to how plant resources can be used because they are the primary processors of plant materials into consumable household products Knowledge of the multiple uses of recognized plants did increase as a function of increasing caste dependence upon these

PAGE 182

166 products for subsistence The Hav ik Brahmin men interviewed knew less about the multiple uses of recognized plants than other informants Informants from the six lower status castes knew more about the multiple uses of recognized plants than informants from the six higher status castes That informants from higher status castes own more spice gardens and/or livestock helps explain why their perceptions about plant uses is more limited and specific Informants less than 30 years of age agreed among themselves and were more kno w ledgeable about the local abundance of recognized plants than were older informants The fact that 55 percent of informants were less than 30 years old may have weighted collective knowledge about plant abundance in the direction of these informants In all other measures of plant knowledge and use age class affiliation did not distinguish differences among informants Terkanahalli villagers apparently learn about the distribution of local forest plants from an early age None of the 122 informants felt that multiple species plantations (MSPs) are an improvement over the minor forests they replace Young MSPs support less plant diversity than minor forests, and their creation further diminishes the number of remaining minor forests tracts Broad-based dependence on minor forest products for wood fuel fiber and fruits clarifies why all informants favored minor forests over MSPs All caste groups felt that M SPs threatened their most important collection activity in minor forests wood fuel

PAGE 183

167 gathering. All informants placed the greatest emphasis on minor forests as sources of wood fuel except female Muslim informants who buy wood fuel from the local forest department depot Informants also wished to retain access to minor forests fuel wo o d resour c es in the future Spice garden owners originating exclusively from the four most affluent castes esteemed minor forests primarily as mulch repositories Only Havik Brahmins and one Namadhari Naik that have access to betta forests for mulch collection do not rely on minor forests for mulch Brahminical informants of modest means like Sonar and Lingayat however reported col l ecti ng a var iety of fruits fiber and fungi from minor forests

PAGE 184

CHAPTER 8 TOWARDS PARTICIPATORY MANAGEMENT OF FOREST RESOURCES Introduction The forest resource use surveys just described can be used as a base from which to devise participatory community-based reforestation programs The Terkanahalli study shows that knowledge about and use of forest resources varies among forest dependent people These differences are sometimes a reflection of gender or caste status and the concomitant forest access/use privileges associated with particular castes Intra-community differences in access to, knowledge and use of forest resources highlight the practical difficulties in initiating appropriate broad-based community forestry programs Conversely such differences help identify distinct social groups or networks that can serve as a functional base in participatory reforestation initiatives This chapter presents an approach that applies local knowledge and a spatial information perspective to the resolution of conflicts over natural resources Participatory Research in Forest Planning and Management The survey results presented in Chapters 6 and 7 suggest that the most immediate and comprehensive information resource about a specific culture is a sample of informants randomly selected from that culture. Few scientific research programs 168

PAGE 185

169 depend on the research subjects themselves to define the direction and scope of a proposed study The presumption of social science scholars to know more about a culture than members of that culture has been a recurrent cause for the failure of socio-economi c development programs. In Terkanahalli Village an informant-driven research program could, for example direct research to improved management of plant species perceived to be versatile in their use and/or locally rare. Valuable and rare plant species are precisely those that informants prioritize for use in local environmental rehabilitation programs Forestry extension programs should therefore emphasize planting of rare, multiple-use species that are popular locally (Agarwala 1 985) and that are not reserved or restricted in their utilization This is a strong base from which to initiate popular participatory reforestation schemes It also provides a real incentive for local communities to cooperate in the protection of replanted forests There is a risk that different sub cultures within a culture may assign conflicting priorities and values to natural resources In such discordant resource use priorities lies the root of the struggle over resources and their consequent degradation The example of minor forest resources in peninsular India makes this point well Two-thirds of all minor forests in the Sirsi Forest Division are degraded and have low productivity Yet because of their juxtaposition to both neighboring hamlets and reserved forests, these forests are valued differently by those who have an interest in using them Some minor forests are

PAGE 186

170 important to foresters as protective buffers against further encroachment into valuable reserved forests as corridors to protect riparian wetlands or may themselves possess valuable timber In contrast local people especially the landless often depend on nearby minor forest resources for subsistence purposes At the sub-village or hamlet level minor forest use priorities may vary according to caste affiliation and gender If these contrasting priorities are not properly understood and accounted for, there is always the chance that disenchanted subcultures will sabotage local reforestation efforts Identifying attitudinal differences between subcultures is the primary function of analytical tools like those used in the forest resource use surveys After differences in resource use priorities between subcultures become clear the next logical step is to initiate negotiation among subcultures to reach compromise resource management agreements For example when one subculture (e g state foresters) yields to the use wishes of another (e g wood fuel gatherers) in some forest tracts the former could expect to have its silvicultural priorities acknowledged in other tracts Responsibility for the welfare and maintenance of specific forest tracts could increase in measure with the use rights conferred To achieve this goal of responsible resource management requires that conflicts between subcultures competing for limited resources be identified and understood Participatory survey-based analytical procedures can produce subcultural information quickly and accurately

PAGE 187

171 Using Spatial Information to Catalyze Local Participation In India, conversion of forest lands or changes in their ownership are prohibited by the Indian constitution except for occasional regularization of forest encroachment mentioned earlier Therefore if changes in access to forests are to occur attention must focus on limited transfers of forest resource tenure to local people To do this properly requires detailed knowledge of where specific resources are who is using them and the intensity of use pressure on them Minor forests represent the arena of greatest potential for allocation and local sharing of resource tenure since this is where overlap in use agendas is most pronounced both between foresters and villagers and bet w een villagers themselves Minor forests also have the greatest potential to increase yields of forest products since their yield potential is the most underutilized of all forest types in Karnataka At the hamlet level forest use priorities of different caste gender or other socio-economic groups can be gathered and presented spatially at little expense A facilitator-guided workshop involving every family in open discussion and planning about the future development and use of local forest resources would be an efficient means to collect present and analyze such information Use of Geographic Information System (GIS) techniques whether via hand-drawn acetate maps digital data bases or both would be the heart of the forest ma n agement workshop process Such spatial data could be case specific and easily updated, to keep improving its accuracy and utility Most

PAGE 188

172 importantly maps generated by this exercise would be attractive to view engaging the interest and participation of resource users Local management of spatial resource information using GIS technology is now globally feasible both technically and economically GIS software packages have become portable and are possible to operate in even remote rural settings Presentation of natural resource information from a landscape perspective can focus and guide informed dialog in the resource management decision making process By contri b uting their perceptions and knowledge to a spatial inventory of resources, even the most socially disadvantaged villagers become active players in resource management decisions affecting their community Such GIS-based development efforts have been observed by the author in Borneo where participatory forestry projects are catalyzed through village mapping activities Spatial information gathering village mapping and local manipulation of spatial data strengthen communities in their efforts to autonomously manage local resources Community-Based Natural Resource Management : An Applied Scenario IDRISI is a low cost widely used GIS that is appropriate for use in spatial data collection analysis and presentation in rural areas of lesser industrialized countries (Eastman 1990). In community-based w o r kshop exercises local resource maps generated from IDRISI could be used as centerpieces for joint natural resource management planning among all workshop

PAGE 189

173 participants All actors who have an impact on local resources including local people and government department staff would become contributors to the creation of map overlays of spatial information about a community s resources. This information would then be superimposed on a map of the village area in different combinations depending on the resource allocation/use question under discussion Areal overlap of information would represent tracts having multiple use attributes as defined by workshop participants Negotiation and compromise concerning future management and use of these sites would be necessary to ensure that all participants achieve their resource use objectives Whenever participants yield to the use wishes of others in some tracts they could expect to have their own use wishes acknowledged in others Enhanced control and tenure over natural resources could be accorded to those who obtain worksh op recognition as favored users of specific tracts however responsibility for the welfare and maintenance of those tracts would increase in equal measure The workshop process would revolve around consensus of who should enjoy the use of which resources and under what conditions of responsibility Community resource tenure arrangements constantly change whether due to birth death, weather, politics or local economic conditions An IDRISI spatial accounting system of local resource conditions and use arrangements could be routinely updated to serve as a reference in ongoing resource negotiations With respect to site selection for multiple species plantations described in this study, workshop participants could

PAGE 190

174 create their candidate site overlays in participant interest groups and then present their selections to the entire workshop in spatial form This would spur debate over a silvicultural prescription for local forests in space and in time Whether resulting management decisions would be good or bad depend entirely upon the aims and perspectives of those who manage or in some way depend on forest resources (Vale 1982) If the wishes of all workshop participants are adequately addressed then joint decisions could be described as good decisions

PAGE 191

APPENDIX A BASELINE SURVEY OF 122 HOUSEHOLDS TEREKANAHALLI VILLAGE NORTH KANARA DISTRICT KARNATAKA INDIA 1) DATE 2) LOCATION : Hamlet within village 3) NAME 4) GENDER 5) AGE 6) CASTE 7) OCCUPATION 8) MARITAL STATUS 9) HOUSEHOLD INFORMATION : age group gender and literacy less than 18 years old 18-60 years old more than 60 years old literacy by gender 10) HOUSE TYPE 11) ROOF TYPE # MALES 12) ANNUAL FAMILY INCOME (Indian Rs ) less than Rs 2000 (US$ 75) Rs 2000-5000 Rs 5000-10 000 Rs 10 0 0 0-2 0 0 0 0 more than Rs 20 000 175 # FEMALES

PAGE 192

176 Appendi x A -continued 13) LIVESTOCK OWNERSHIP (type and quantity) 14) LANDOWNERSHIP (type quantity and ownership status) 15) HOUSE LOCATION 16) FOREST PRODUCTS PERSONALLY COLLECTED BY RESPONDENT (type quantity, month of collection type of forest where collected ) 17) FOREST PRODUCT USE (subsistence or commercial use) 18) FOREST PRODUCTS TRADITIONALLY COLLECTED BY LOCAL PEOPLE (respondent s opinion) 19) IF SUCH PRODUCTS ARE LOCALLY SCARCE WHY HAS SUCH SCARCITY OCCURRED (respondent s opinion)? 20) WHAT BENEFIT(S) DO YOU AND YOUR FAMILY ENJOY FROM RECENTLY PLANTED MULTIPLE SPECIES PLANTATIONS (MSPs)? 21) WHAT DISBENEFITS DO YOU AND YOUR FAMILY EXPERIENCE FROM RECENTLY PLANTED MSPs? 22) ARE MSPs AN IMPROVEMENT OVER THE MINOR FORESTS THAT THEY REPLACE? WHY OR WHY NOT? 23) IS THERE AN INCRESING NEED FOR FORESTS IN AND AROUND YOUR VILLAGE? IF SO WHY? 24) WHAT TREE SPECIES W OULD YOU LIKE TO HAVE PLANTED IN THE NEW FORESTS/MSPs? 25) WHAT IS YOUR OPINION OF THE BEST METHOD FOR CREATING THE KIND OF NEW FORESTS YOU DESIRE? (location and method)

PAGE 193

APPENDIX B PLANT SPECIES INCLUDED IN A MINOR FOREST VEGETATION USE SURVEY NORTH KANA.RA DISTRICT KARNATAKA INDIA SCIENTIFIC NAME FAMILY KANNADA NAME Hemidesmus indicus ( L. ) Periplocaceae haaluballi Schult Anamirta paniculata Colebr. Menispermaceae aadaemunni Rhynchostylis sp. Orchidaceae sitaydundae Borreria hispida Rubiaceae jerrlae soppu Cassia sophera L Faboideae yelavarigae kudi Coloccasia esculenta ( L ) Araceae kaesa Schott Coloccasia esculenta var Araceae karey kaesa black Amaryllis zeylanicum L. Amaryllidaceae isamungeri Coleus malabaricus Benth Lamiaceae sambaara soppu Polygonum aviculare L Polygonaceae kannaekudi Elephantopus scaber L Asteraceae naelagonagalu Tylophora aposinata W & A. Asclepiadaceae punyalla Hibiscus L Malvaceae bili daasavaala rosa s1.nens1.s Graptophyllum pictum ( L ) Rubiaceae daasaputrae Griff. Bulbophyllum sp Orchidaceae imarabaalaekaayi Gardenia gummifera L f Rubiaceae bikkae Ixora grandiflora Rubiaceae biliholaeaasawaala Ixora grandiflora var. dark Rubiaceae kempu holaedaasawaala Aerua lanata Juss Amarantaceae howlapatli Vitex negundo L. Verbenaceae lakki Duranta plumeria Verbenaceae paytae mullu Calotropis gigantea ( L ) Asclepiadaceae ekkae Dryander ex Aiton f Lawsonia alba L var.rubra Lythraceae mudurunggi/henna Randia dumetorum Lamk Rubiaceae kaarae Pandanus odoratissim us Roxb Pandanaceae kyadigae Pandanus fascicularis Pandanaceae mundigae Adhatoda vasica Nees Acanthaceae baesaala Spondias mangifera L Anacardiaceae amataekaai Fluggea virosa Willd Euphorbiaceae sanaelay Carissa carandas L. Apocynaceae kavali Calycopter is floribunda Roxb Combretaceae kamusalu Holarrhena antidysenterica Apocynaceae kodasa (Roxb. ex Fleming) Wallich ex A De 177

PAGE 194

178 Appendix B--continued SCIENTIFIC NAME FAMILY KANNADA NAME Bambusa arundinaceae (Retz ) Poaceae beederu/barnboo Willd Anacardium occidentale L. Anacardiaceae gaeru Pheonix silvestris ( L. ) Roxb Arecaceae ichala (Ph o enix acau li s) Caryota urens L. Arecaceae byney mara Emblica officianalis Gaertner Euphorbiaceae naelli Diospyros melanoxylon Roxb Ebenaceae turnbari Fi c us aspermagara L. Moraceae gutthi/garagutthi Gmelina arborea L Verbenaceae shivani Semecarpus anacardium L f. Anacardiaceae guddaegaeru Annona squamosa L Annonaceae ramphal H o ligarna ar o nottiana Hook. Anacardiaceae holagaere F Anthocephalus cadamba Miq Rubiaceae apatia Saraca indica L Caesalpinoideae ashok Aporosa lindleyanna Euphorbiaceae sallae Syzygium ( L ) Skeels Myrtaceae kannaeralu cum1.n1. (Eugenia jambolanum Lam.) Terminalia cebula (Gaertner) Cornbretaceae analae kaayi/hirda Retz. Cinnamomum zeylanicum Blume Lauraceae dalchini Sapindus emarginata L. Sapindaceae antualah Careya arborea Roxb Lethycidaceae kavalu/kavuli Artocarpus la c ucha Moraceae atlakae Strychnos nu xv o mica L. Loganiaceae kaasarakaa Mytrigyne parv i flora Rubiaceae kalum Bu c hanania l a ti f o lia R o xb Ana c ardiaceae nurukalu Garcinia indica (Thouars) Clusiaceae murugalu Choisy Va teria indica L Dipterocarpaceae duupa Dillenia pentagyna Dilleniaceae kanagallu Michelia chempaca L Magnoliaceae sampigae Cassia fistula L Caesalpinoideae kakkaayi Albizia Amara Biovin Mimosoideae bilkurnbi Artocarpus integrifolius L Moraceae halasu f Aegle marmelos ( L ) Corr Rutaceae putrae/bilvaputrae Serr Casuarina equisetifolia L Casuarinaceae galli mara Acacia auriculiformis Cunn Mimosoideae Acacia Ex Benth Source for verification of latin binomials : USDA Agriculture Research Service Handbook 505 1986

PAGE 195

APPENDIX C MINOR FOREST PRODUCT USE PREFERENCE SURVEY TEREKANAHALLI VILLAGE NORTH KANARA KARNATAKA INDIA NAME : MALE/FEMALE : AGE : CASTE : HAMLET : USING 3X5 PHOTOS OF 65 LOCALLY IDENTIFIED PLANT SPECIES : 1) WHICH OF THESE PHOTOGRAPHED PLANTS CAN YOU IDENTIFY? 2) OF THE PLANTS THAT YOU IDENTIFIED CAN YOU TELL HOW THEY ARE USED? 3) PLACE EACH SELECTED PHOTO ON ONE OF THE AREAS MARKED: VERY USEFUL USEFUL SLIGHTLY USEFUL NOT USEFUL HARMFUL DON T KNOW 4) PLACE EACH SELECTED PHOTO ON ONE OF T H E AREAS MARKED : VERY COMMON COMMON RARE VERY RARE NEVER FOUND 5) RESELECT ANY OF THE SELECTED PHOTOS/PLANTS THAT YOU COLLECT IN MINOR FOREST (MF) AREAS 6) PLEASE RANK THE SELECTED PHOTOS/PLANTS IN ORDER OF THEIR USEFULNESS TO YOU (The interviewer should say that USEFULNESS means the provision of basic personal and family needs AND also income generation if such is the case ) 7) OF THE TEN MOST USEFUL PLANTS HOW MUCH OF EACH DO YOU COLLECT EACH YEAR? 8) REPEAT QUESTIONS 5 7 FOR SOPPINA BETTA (SB) FOREST AREAS IF APPROPRIATE 179

PAGE 196

APPENDIX D LOCAL USES OF PLANT SPECIES, TEREKANAHALLI VILLAGE, NORTH KANARA, KARNATAKA, INDIA SPECIES NAME Hemidesmus indicus (L.) Schult Anamirta paniculata Colebr (Cocculus suberosus W & A ) Rhynchostylis sp Borreria hispida Cassia sophera L Coloccasia esculenta (1 ) Schott LOCAL USE(S) and (PUBLISHED/DOCUMENTED USES) Root extract mixed with milk serves as infant growth tonic ; Extract is taken during pregnancy to increase milk production (Root extract treats loss of appetite dyspepsia, fever, skin diseases related to syphilis bowel disorders leucorrhoea soft tissue infections and chronic cough Root paste is applied to swellings and rheumatic joints ) Leaves produce an edible dry curry ; Root extract paste treats children s stomach worms, serves as a blood cleansing agent, and also reduces body heat/sweats. (Leaf juice helps extract guniea worms Dried fruit is a powerful narcotic Berry ointment treats skin fungi/infections Pulverized berries are used as an insecticide and fish poison Seeds contain picrotoxin for treatment of convulsions and paralysis ) Inflorescences serve as hair decoration and religious offerings Plaster for cutaneous wounds in cattle ; Stems serve as cattle fodder Ingredient in curry ; Stern is ground with jaggery for treatment of jaundice ; Roots are eaten to improve digestion (Entire plant decoction is expectorant for bronchitis Leaves have purgative action Leaves and sugar water drink treats jaundice Bruised leaves and root bark paste treats ringworm and skin ulcers Bark infusion acts as cathartic and is also felt to remedy diabetes ) Salve treats swelling in cattle; Salve eases the extraction of thorns from skin; Starch food source 180

PAGE 197

181 Appendix D--continued Coloccasia Starch food source esculenta var. black Amaryllis zeylanicum L Coleus malabaricus Benth Polygonum aviculare L Elephantopus scaber L Tylophora aposinata W & A Hibiscus rosa ' sinensis L Graptophyllum pictum (L ) Griff Leaf juice treats uncontrolled sweating/loss of body fluids (Juice from leaf pulp functions as an emetic Bruised hot leaves coated with mustard oil treat inflamed joints and sprains Pulp juice also treats earache.) Greens are dried on coals and then mixed with honey to treat colds/influenza to reduce throat phlegm soothe sore throats and to aid digestion ; Food source Decoction is mixed with rice and butter to improve digestion and to treat dysentery Clotting agent in plasters that stops cutaneous bleeding (for cattle also); Treats ear ache and fluid drainage from ear infections (Leaves boiled in coconut oil treat skin eczema and ulcers Shoot extract has antibiotic properties Root and leaf decoction treats diarrhoea dysentery and when taken with cumin and buttermilk treats urethral discharges Root extract stops vomiting Powdered root and pepper reduces toothache ) Given with milk to children to treat ' constipation ; Given with honey to children to treat colds reduce mucous and to treat asthma (Dried leaves and roots function as expectorant diaphoretic emetic and cathartic ) Flower is mixed with water to reduce mucous during colds and lower body temperature due to fever ; Serves as religious offering and hair decoration (Plant contains a bland vascid mucilage that functions as a demulcent emollient and diuretic ) Treats skin and respiratory allergies; Food source ; Source of green manure/mulch

PAGE 198

182 Appendix D--continued Bulbophyllum sp Gardenia gummifera L. f. Ixora grandiflora Ixora grandiflora var black Aerua lanata Juss. Vitex negundo L Calotropis gigantea (L ) Dryander ex Aiton f Raw fruit is crushed with jaggery heated, and then applied directly on cutaneous wounds in cattle to treat swelling and infection ; Fruit is mixed with rice and given to milkcows to improve milk quality. Pulverized powder is given to cattle to treat dysentery ; Food source (An anthelmintic that treats roundworm in livestock The gum-resin functions as an anti-spasmodic carminative antiseptic, and stimulant It is given to children during teething ) Controls menstrual bleeding ; Reduces body heat due to fever ; Food source Reduces sweating vomiting and involuntary loss of body fluids Treats dysentery ; Source of green manure/mulch (Root extract treats headache ) Leaves mixed with garlic and corn to treat malaria ; Mixed with cumin and tumeric powder to treat colds fever and throat infection in cattle ; Treats skin and respiratory allergies; Pest control agent after pest outbreak ; Fencing material (Plant is aromatic tonic febrifuge expectorant and diuretic Leaf decoction with Piper longum treats catarrhal fever Leaves are smoked or made into poultices to treat headache colds swollen joints and sprains Leaf juice is applied to infected skin ulcers Root decoction treats fever Root bark tincture treats rheumatism.) Root is mixed with tumeric and tied to right bicep for four to five days to treat fever ; Treats skin inflammation and skin infections ; Religious offering (Root is taken as a purgative and to treat leprosy Root charcoal and root bark is mixed with oil to treat skin eruptions foul ulcers leprosy Root bark is mixed with rice vi n egar into paste to treat filarial swelling of legs or scrotum )

PAGE 199

Appendix D--continued Duranta plumeria Lawsonia alba L var rubra Randia dumetorum Lamk. Pandanus odoratissimus Ro x b Pandanus fascicularis Adhatoda vasica Nees Spondias L Fluggea Willd mangifera virosa 183 Fencing material Flowers leaves and shoots are mixed with milk to treat irregularity in menstrual flow (Leaves and flowers treat headache ) Root extract from mature trees is mixed with lemon juice and taken orally to treat snake bite; Fencing material (Root and fruit treat snake bite Root is ground with ox urine and applied as salve to the eyes of the patient 10 to 30 grains of dried fruit pulp is given orally Bark treats rheumatism and bone ache associated with fever Fruit is an emetic and useful in treating bronchitis and asthma ) Treats joint pain ; H air decoration ; Religious offering ; Weaving material (Male flowers treat earache headache and blood diseases Leaves are said to treat scabies smallpox leucoderma and leprosy Leaves are crushed into plaster to treat dislocated limbs in cattle ; Fencing and weaving material ; Riparian erosion control (Leaves are woven into mats thatch bags etc Leaf fiber is made into cordage Keora oil from male inflorescence is a flavoring and perfume ingredient Planted along canals to stabilize soil ) Leaves or roots are mi x e d with honey drink to treat colds cough asthma reduce heat due to fever and to purify the blood ; Treats Tinea skin infections and other skin diseases ; Fencing material ; Source of green manure/mulch (Leaves contain alkaloid vasicine that functions as expectorant and antispasmodic to treat coug h, respiratory infections tuberculosis bronchitis and asthma Root and bark have similar uses to the leaves.) Food source ; Stem is crushed and mixed with buttermilk to treat dysentery in cattle Leaf green is dried po w dered and mixed with milk to treat menstrual irregularity ; Improves digestion

PAGE 200

184 Appendix 0--continued Carissa carandas L Root extract is mixed with calcium hydroxide (moist limestone) to treat toothache Calycopteris floribunda Roxb Holarrhena antidysenterica (Roxb ex Fleming) Wallich ex A De Bambusa arundinaceae (Retz ) Willd Anacardium occidentale L Pheonix silvestris (L ) Ro x b (Phoenix acaulis) Caryota urens L (Root paste is used as fly repellent ) Food source ; Source of green manure/mulch ; Weaving material Stern extract and fried powdered seeds are mixed with buttermilk to treat stomach worms and stomach ache ; Food source (Fresh bark is excellent remedy for diarrhoea and amoebic dysentery Seeds are effective in treating dysentery complicated with worms in children diarrhoea fevers, respiratory diseases jaundice colic etc ) One handful of green leaves given to cows eases the birth of calves ; Fencing material ; Weaving material ; Construction material; Tender shoots are a source of food. (Leaves useful in sturnulating rnentrual flow, and for encouraging discharge of menses or lochia after childbirth Leaves are mixed with black pepper and salt to check diarrhoea in cattle Leaf buds treat threadworrns Young shoots contain 0 3 % hydrocyanic acid which is lethal to mosquito larvae ) Leaf juice extract treats toothache ; Treats uncontrolled sweating and vomiting; Food source ; Religious offering ; (Bark is used to treat sore gums and toothache The spirit made from the fuit is diuretic and stimulant and is locally applied in neuralgic pains and rheumatism ) Infusion of fruit in milk is a tonic to restore health after illness ; Food source ; Weaving material Bole is used to make the leveling bar on plows ; Fencing material ; Construction material

PAGE 201

185 Appendix 0--continued Emblica officianalis Gaertner Diospyros melanoxylon Roxb Ficus aspermagara L Gmelina arborea L Semecarpus anacardium L f Dried and powdered fruit treats cough mucous secretion diarrhoea and dysentery ; Powdered fruit purifies w ater ; Juice of fruit helps maintain the dark luster of hair Plaster treats foot callus ; Pest control agent after pest outbreak (All tree parts are used medicinally Fresh fruit is a rich source of vitamin C and also treats lung and eye inflammation Fruit oil is reported to enhance hair growth The dried fruit is an intestinal astringent and treats diarrhoea dysentery and haemorrhage Juice of the bark honey and tumeric are combined to treat gonorrhea ) Powdered leaves treat stomach infections; Food source (Bark and fruit are useful astringents Decoctions are effective cures for chronic dysentery, diarrhoea and internal heamorrhages ) Treats cattle illnesses; Source of green manure/mulch ; Leaves are used as sandpaper/polishing material Leaf juice extract is mixed with yogurt and taken orally to treat broken bones The dosage is sixteen times more when used to treat cattle ; Treats lumbar back ache ; Bole is used to make leveling bar on plows (Leaf extract is mixed with milk and sugar to treat gonorrhoea catarrh of the bladder cough Leaf paste is applied to head to treat headache during fevers Root and bark are bitter tonic laxative, and treat indigestion ) Oil extracted from roasted nut is mixed with sugar and milk and taken orally to treat stomach and intestinal worms; Treats foot callus ; Pest control agent after pest outbreak (Oil extracted from nut and nut shell is a powerful escharotic, antiseptic cholagogue cardiac and nerve tonic Exuded nut oil is mixed with milk and taken daily to treat cough and to relax the uvula and palate The bruised nut is an abortifacient when placed in the mouth of the uterus.)

PAGE 202

186 Appendix D--continued Annona squamosa L Holigarna arnottiana Hoof f Anthocephalis cadamba Miq Saraca indica L Aporosa lindleyanna Syzygium cumini (L ) Skeels (Eugenia jambolanum) Treats cattle illnesses; Source of green manure/mulch ; F ood source (Unripe fruit treats diarrhea dysentery and dyspepsia Bruised ripe fruit is mixed with salt to hasten suppuration of tumors Seeds applied to uterus induce abortion Seed powder is a hair cleansing agent ) Bark extract treats cattle skin infections ; Source of green manure/mulch ; Pest control agent after pest outbreak Treats body poisoning such as tetnus infection (Fruit juice with cumin and sugar is given for snake bite Bark decoction treats fever Mi x ture of bar k juice lime juice opium and alum treat eye inflammation ) Leaf ext r act is mi x ed w ith mil k to improve fertility and to treat menstrual irregularity (Leaves are considered to be alterative and useful in treating colic Bark decoction is highly astringent and is a household remedy for hemorroids internal bleeding and uterine disorders especially menorrhagia and leucor r hoea ) Fruit reduces body heat/fever and nausea ; Bark extract is a remedy for constipation and piles ; Food source ; Source of green manure/mulch Tender leaves are chewed to extract juice w hich treats stomach problems Leaf fiber is spit out ; Extract treats fever/chills and diarrhoea. Source of green manure/mulch (Leaves are astringent and are a remedy in dysentery with blood discharges Tender leaf juice is mi x ed with goat s milk to treat diarrhoea in c h ildren Seeds treat mellitus diabetes Bar k decoction is a mouthwash and gargle for spongy gums and oral infections

PAGE 203

Appendix D--continued Terminalia cebula (Gaertner) Retz Cinnamomum zeylanicum Blume Sapindus emarginata L Careya arborea Roxb Artocarpus lacucha Strychnos nux vomica L Mytrigyne parviflora 187 Fruit pulp is ground with honey to treat bad coughs e x cessive mucous and tonsilitis; Food and oil source ; Pest control agent after pest outbreak ; Treats infections in cattle (Fruit is astringent purgative and a safe laxative Unripe fruit pulp is mixed with honey and aromatics like clove or cinnamon to treat flatulence diarrhea and dysentery Infusion of fruit as gargle treats mouth infections spo n gy and ulcerated gums ) Treats ear ache and helps drain ear infections ; Food and spice source (Functions as an aromatic stimulant and carminative to treat flatulence and spasmodic affections of the bowels Bark powder infusion stimulates uterine muscle contractions in prolonged labor ) Plaster treats skin infections in humans and cattle ; Source of green manure/mulch ; Shampoo for hair nourishment Bark e x tract treats heart disease ; Food source ; Source of green manure/mulch Treats stomach worms and body lice ; Food source ; Construction material Leaf and bark extracts treat cutaneous (including mouth) ulcers in humans and cattle ; P est control agent after pest outbreak ; Source of green manure/mulch (Leaves are used in poultices over sloughing wounds and ulcers even maggot-infested lesions A few drops of bark extract treat cholera and acute dysentery Powdered root bark is mixed with lime juice to treat cholera Po w dered seeds are effective treating neuralgia of the face spasmodic diseases epilepsy and se x ual impotence ) Bole used to make leveling bar on plows ; Construction material ; Source or green manure/mulch

PAGE 204

Appendix D--continued Buchanania latifolia Roxb Garcinia indica (Thouars) Choisy Vateria indica L Dillenia pentagyna Michelia chempaca L Cassia fistula L Albizia Amara Boivin 188 Food source; Source of green manure/mulch (Fruits and seeds are nutritous and good tasting Seed gum treats diarrhoea and is applied to glandular swellings in the neck. Ointment from kernel treats skin diseases itching and facial blemishes ) Fruit treats body heat/acidity, nausea, and diarrhoea; Oil treats callused skin especially foot callus ; Food source; (Fruit is cooling demulcent antiscorbutic cholagogue and as an astringent is given to stop haemorrhage in the bowels Oil treats ulcerations and fissures of the lip Drink of infusion and its local application treat urticaria ) Resin is externally applied to treat skin diseases ; Religious offering (Bole resin treats gonorrhoea External application of resin treats skin carbuncles Seed oil dressing treats chronic rheumatism ) Treats disease in cattle ; Food source ; Construction material ; Source of green manure/mulch Bark extract treats stomach ache ; Hair decoration ; Religious offering ; Construction material (Bark decoction treats mild gastritis. Infusions of dried roots and root bark are purgatives Flowers and fruits treat dyspepsia nausea, and fever Leaf juice is given with honey to treat colic ) Tender leaf oil extract treats cutaneous inflamation itch and skin allergies (Leaves have laxative properties but are primarily an external emollient to treat ringworm, skin irritation and to bring relief from dropsical swellings Leaf poultices treat chilblains rheumatism, and facial paralysis ) Construction material ; Source of green manure/mulch (Cools the body and treats erysipelas skin inflammation eye diseases and ulcers )

PAGE 205

Appendix D--continued Artocarpus integrifolia L f Aegle marmelos (L ) Corr Serr Casuarina equisetifolia L. Acacia auriculiformis Cunn ex Benth 189 Food and beverage source ; Construction material ; Religious offering (Roasted ripe seeds are nutritous. Milky latex is mixed with vinegar to externally treat glandular swellings Root extract treats diarrhoea Tender leaves and root extracts treat skin diseases ) Leaf green aids digestion treats diarrhoea; Bark treats chills/fever ; Leaf juice is mixed with cow s urine to treat lice (Leaf decoction is useful as febrifuge, expectorant, and anti-asthmatic Ripe fruit treats diarrhoea intestinal disorders and some forms of dyspepsia characterized by both constipation and diarrhoea Root bark decoction treats fever and heart palpitations ) Construction material ; Ornamental plant ; Riparian soil erosion control agent (Bark is slightly astringent and made into infusions to treat diarrhoea dysentery ) Construction material ; Source of green manure/mulch after slow decomposition Sources for Published/Documented Uses of Plant Species : Dastur J F 1950 Medicinal Plants of India and Pakistan D B. Taraporevala Sons & Company Ltd ., Hornby Road Bombay Dastur J F 1964 Useful Plants of India and Pakistan D. B Taraporevala Sons & Company Ltd Hornby Road Bombay Hortus Third, A Concise Dictionary of Plants Collected in the USA and Canada. 1976. Cornell University for its L H Bailey Hortorium Macmillin Publishing Company New York NY Kapoor L D 1990 CRC Handbook of Ayurvedic Medicinal Plants CRC Press Inc Boca Raton Florida Watt G 1908 The Commercial Products of India John Murray Albemerle Street London. Watt, G 1972 Second Reprint A Dictionary Products of India. Periodical Experts of the Economic New Delhi India

PAGE 206

LIST OF REFERENCES Agarwal A and S Narain 1989 Towards Green Villages : A Strategy for Environmentally Sound and Participatory Rural Development Center for Science and Environment New Delhi, India Agarwala, V P 1985 Forests in India Oxford and IBH Publishing Company Bombay, India Akbarsha, A. Dist ) 1985 Reservation of Forests in Coorg (Mercara Myforest 21 :4 1-49 Ashton P S 1988. A Question of Sustainable Use Pp 185-196 in : Denslow J S and C Padoch, eds People of the Tropical Rain Forest University of California Press Berkeley, California Ayuwat D. 1993 Effects of migration patterns on forest use and forestry projects in a Thai village Society and Natural Resources 6 : 195-202 Bazzaz, F A. and S T A Pickett 1980 Physiological Ecology of Tropical Succession : A Comparative Review Annual Review of Ecology and Systematics 11 : 287-310 Bee 0 J 1990 The Tropical Rain Forest : Patterns of Exploitation and Trade Singapore Journal of Tropical Geography 11 : 117 142 Belanger, R P and W. D Pepper. 1978 Seedling Density Influences the Early Growth Science 24:493-496 of Planted Sycamore Forest Bentley, W R ., G B Singh and N Chatterjee 1987 Tenure and Agroforestry Potentials in India Pp. 231-238 in : Raintree J B ., ed Land, Trees, and Tenure : Proceedings of an International Workshop on Tenure Issues in Agroforestry ICRAF Nairobi Kenya. Bernard H R. 1988 Research Methods in Cultural Anthropology Sage Publications Newbury Park California Blaikie P and H C Brookfield 1987 Society Methuen London England Land Degradation and and New York, New York Borgatti S P 1992 ANTHROPAC 4 0 Columbia : Analytic Technologies 190

PAGE 207

191 Bromley D W. 1991 Environment and Economy Property Rights, and Public Policy Basil Blackwell, Inc ., Cambridge Massachusetts. Bromley D W. and M M Cernea Property Natural Resources D C. 1989 The Management of Common The World Bank Washington, Cernea M M 1985 Alternative Units of Social Organization Sustaining Afforestation Strategies Pp 267-294 in: Cernea, M M. ed Putting People First : Sociological Variables in Rural Development The World Bank Oxford University Press New York Christy E J Growth of Vegetatio 1986 Effects of Root Competition and Shading on Suppressed Western Hemlock (Tsuga Heterophylla) 65 : 21-28 Cleghorn H 1861 Forests and Gerdens of South India W H Allen and Company, London England Dastur J F 1950 Medicinal Plants of India and Pakistan D B Taraporevala Sons & Company Ltd ., Hornby Road, Bombay. Dastur J F 1964 Useful Plants of India and Pakistan D B Taraporevala Sons & Company Ltd ., Hornby Road Bombay Davidson N J., K C True and J S Pate 1989 Water relations of the parasite host relationship between the mistletoe Amyema linophyllum (Fenzl) Tieghem and Casuarina obesa Miq Oecologia 12 : 12-20 Dhar S K. J R Gupta and M Sarin 1990 Participatory forest management in the Shivalik Hills : experiences of the Haryana Forest Department Ford Foundation New Delhi India Duff S G 1826 A History of Marattas Longman London England Eastman, R 1990 IDRISI University Worcester, School of Geography Massachusetts Clark Erdmann G G and R M Peterson 1972 Crown Release Increases Diameter Growth and Bole Sprouting of Pole Size Yellow Birch USDA Forest Service North Central Forest Experiment Station Research Note NC-130, St Paul Minnesota Erdmann G G., R M Gedman and R R Oberg 1975 Crown Release Accelerates Diameter Growth and Crown Development of Yellow Birch Saplings. USDA Forest Service Research Paper NC-117 : 7 8 Washington, D C

PAGE 208

192 Evans G C 1972 The Quantitative Analysis California Press Berkeley of Plant Growth University of 246-254. California. Pp. Eyre, F. H and W M Zillgitt 1953 Partial Cuttings of Northern Hardwoods of the Lake States USDA Technical Bulletin 1076 Washington D C FAO 1983 Rural Women Forest Outputs and Forestry Projects FO : MISC/83/3 (discussion draft) Food and Agricultural Organization of the United Nations Rome Italy. FAO 1985 Intensive Multiple-Use Forest Management in the Tropics Food and Agricultural Organization of the United Nations Forestry Paper 55 : 74-85 Rome Italy FAO 1989 Women in Community Forestry Project Design and Implementation Organization of the United Nations A Field Guide For Food and Agricultural Rome Italy FAQ-UNESCO 1977 Soil Map of the World 1 : 5 000,000 Volume VIISouth Asia UNESCO Paris France. Fortmann L 1987 Tree Tenure : An Analytical Framework for Agroforestry Projects in : Raintree J B ., ed Land Trees and Tenure : Proceedings of an International Workshop on Tenure Issues in Agroforestry ICRAF Nairobi Kenya. 17-34 Gadgil M 1989 Deforestation : Problems and Prospects in : Supplement to Wastelands News Vol IV No 4 (May-July 1989) Society for the Promotion of W astelands Development New Delhi India Gadgil M and R Guha 1992 This Fissured Land : An Ecological Oxford University Press Delhi India History of India Gazetteer of Part I Karwar the Bombay Presidency Kanara District Volume XV 1883 (reprinted in 1991) Sagardeep Publications India Government of India 1982 Report of the National Commission on Agriculture (NCA) Part IX 4 Government of Karnataka Department of Law and Parliamentary Affairs 1987 Karnataka Forest Act 1963 and Karnataka Forest Rules 1969 Super Graphics Bangalore India Groenfeldt D. J Alcorn S Berwick D Flickinger and M Hatziolos 1990 Opportunities for Eco-Development in Buffer Zones : An Assessment of Two Cases in Western India Biodiversity Support Program World Wildlife Fund Washington D C

PAGE 209

193 Guha R 1989 The Unquiet Woods : Ecological Change and Peasant Resistance in the Himalaya Oxford University Press Delhi, India Guha R and M Gadgil 1989 State Forestry and Social Conflict in British India Past & Present 123(May) : 141-177. Grove R H 1990 Colonial Conservation Ecological Hegemony and Popular Resistance : Towards a Global Model, in: MacKenzie J M ., ed Imperialism and the Natural World. Manchester U P Haeuber R 1993 Indian Forestry Policy in Two Eras : Continuity or Change? Environmental History Review Vol 17 No 1. Hartshorn G. 1980 Neotropical forest dynamics Biotropica Vol 12 supplement : 23-30 Holling, C S 1986 The Resilience of Terrestrial Ecosystems: Local Surprise and Global Change Pp 292-317 in : Clark, W c and R E Munn eds Sustainable Development of the Biosphere Cambridge University Press Cambridge England Horn, J C. 1985 Response of Understory Tree Seedlings to Trenching Am Mid Nat 114:252-258 Hortus Third, A Concise Dictionary of Plants Collected in the USA and Canada 1976 Cornell University for its L H Bailey Hortorium Macmillin Publishing Company New York New York. Hoskins M W. 1983 Women in Forestry for Local Community Development : A Programming Guide AID/otr-147-79-83 US Agency for International Development (AID) Washington D C Hunt R 1978 Plant Growth Analysis Edward Arnold Ltd ., London England Pp 8-15 Kadambi K. 1956 The Silviculture of Indian Trees No 7 : Terminalia paniculata, Roth W & A Its Silviculture and Management Forest Research Institute Dehra Dun India Kapoor L D 1990 CRC Handbook of Ayurvedic Medicinal Plants CRC Press Inc ., Boca Raton Florida Kaur R 1991 Women in Forestry in India in : Policy Research and External Affairs Working Papers Women in Development Washington D C Krajicek J E 1975 Planted Black Walnut Does Well on Cleared Forest Sites If Competition is Controlled, in : USDA Forest Service, North Central Forest Experiment Station Research Paper NC-192, Washington D C

PAGE 210

Kramer, P. J. Plants. 194 and T. T Koslowski. 1979 Physiology of Woody Academic Press Inc., Orlando, Florida Kummer D M. 1992 Remote Sensing and Tropical Deforestati o n: A Cautionary Note from the Philippines Photogrammetric Engineering and Remote Sensing LVIII : (10)1469-1471. Lemmon, P E. 1956 A Spherical Densiometer for Estimating Forest Overstory Density Forest Science 2 : 314-320 Littell R C. R J Freund and P. C Spector SAS System for Linear Models SAS Series in Statistical Applications SAS Institute Inc ., Cary, North Carolina Malhotra K C and M Poffenberger eds 1989 Forest Regeneration Through Community Protection : the West Bengal Experience Proceedings of the Working Group Meeting on Forest Protection Committees June 21-22 1989 West Bengal Forestry Department Calcutta India Marquis D A 1981 Survival Growth and Quality of Residual Trees Following Clearcutting in Allegheny Hardwood Forests USDA Forest Service Northeast Experiment Station Research Report NE-477, Washington, D C Marquis D A 1982 Effect of Advance Seedling Size and Vigor on Survival After Clearcutting in : USDA Forest Service Northeast Experiment Station Research Paper NE-498 Washington D C Matthews E 1983 Global Vegetation and Landuse : New High Resolution Data Bases for Climatic Studies Journal of Climate and Applied Meteorology 22 : 474 487 Mciver J P and E G Carmi n es 1981 Unidimensional Scaling Sage Publications Beverly Hills Ca Menon, A R R 1986 Forest denudation in Kerala : A case study of Trichur Forest Division Pp 94 98 in : Nair K S S R Gnanaharan and S Kedharnath eds ., Ecodevelopment o f Western Ghats Kerala Forest Reserach Institute Peechi, India Midgley S J and K Vivekanandan 1987 Australian Acacias in Sri Lanka ACIAR Proc-Ser Australian Centre for International Agricultural Research Canberra Australia Molnar A and G Schreiber 1989 Women and Forestry Operational Issues in : Policy Planning and Research Working Papers Women in Development WPS 184 Washington D C Morgan and Fleury 1993 Geo Info Systems April

PAGE 211

195 Murray G F 1983 Agroforestry outreach : An approach to tree planting in rural Haiti. Helvetas Schweizer Aufbauwerk fur Entwicklungslander Switzerland Nadkarni M V management 1989 The political economy of forest use and Sage Publications New Delhi India Nair K K 1984 Tropical Wet Everg r een Forests : A Valuable Asset of the Western Ghats to be Preserved and Studied, in : Proceedings of a Seminar on Ecodevelopment of the Western Ghats Kerala Forest Research Institute, Peechi India Nesmith C 1991 West Bengal Gender Trees and Fuel : Social Forestry i n India Human Organization 50 : 337-348. Noronha R and J S Spears 1985 Sociological Variables in Forestry Project Design Pp 227-266 in : Cernea M M ed Putting People First : Sociological Variables in Rural Development The World Bank Oxford University Press New York Pascal J P of India India 1988 Wet Evergreen Forests of the Western Ghats Institut Francais de Pondichery Pondichery Pathan, R. S N J Arul, and M Poffenberger 1990 Forest protection committees in Gujarat joint management initiative Ford Foundation New Delhi India Pearcy R W., J Ehleringer H A Mooney and P W Rundel 1989 Plant Physiological Ecology : Field Methods and Instrumentation Chapman and Hall New York New York Poffenberger M 1990 Joint management of forest lands : experiences from South Asia Ford Foundation New Delhi India Poffenberger M ., ed 1990 Forest management partnerships : regenerating India's forests Executive summary of the workshop on sustainable forestry Ford Foundation, New Delhi India Putz F. E 1992 Reduction of Root Competition Increases Growth of Slash Pine Seedlings on a Cutover Site in Florida Southern Journal of Applied Forestry 16 : 193 197 Putz F E and C D. Canham 1992 Mechanisms of Arrested Success i on in Shrublands: Root and Shoot Competition Between Shrubs and Tree Seedlings Forest Ecology and Management 49 : 267-275 Ramakrishnan 1980 Jhurnming in the Northeast Hills Region Man and the Biosphere Program Series UNESCO in :

PAGE 212

196 Richards J F 1985 Changes in the Land and Human Product i vity in Northern India 1870-1970. Agricultural History 59:523-548 Richards J F and M. B McAlpin 1983 Cotton Cultivation and Land Clearing in the Bombay Deccan and Karnatak : 1818-1920 in : Richards J F and R P. Tucker eds Global Deforestation and the 19th Century World Economy Duke University Press Durham NC Richards J F and R P Tucker. 1988 World Deforestation in the 20th Century Duke University Press Durham NC Rocheleau D E 1987 Women Trees and Tenure : Implications for Agroforestry Research and Development Pp 79 120 in : Raintree J B ., ed Land Trees and Tenure : Proceedings of an International Workshop on Tenure Issues in Agroforestry ICRAF Nairobi Kenya Rocheleau D E 1988 Gender Resource Management and the Rural Landscape : Implications for Agroforestry and Farming Systems Research Pp 140-169 in : Poats S V ., M Schmink and A Spring eds Gender Issues in Farming Systems Research and Extension Westview Press Bolder Colorado Sanchez P A. Tropics 1976 Properties and Management of Soils in the J Wiley, New York, New York SAS Institute 1994 SAS/STAT Version 6 SAS Institute Inc ., Cary North Carolina Schmink M 1987 The Rationality of Tropical Forest Destruction in : Management of the Forests of Tropical America: Prospects and Technologies USAid, USDA and Institute of Tropical Forestry Rio Piedras Puerto Rico Schultz J P 1960 Northern Surinam Ecological Studies of Rainforest in North Holland Amsterdam Netherlands Shainsky, H L. and S R Radosevich 1986 Growth and Water Relations of Pinus ponderosa Seedlings in Competitive Regimes with Arctostaphylos patula Seedlings Journal of Applied Ecology 23 : 957 966 Shipley B 1989 The Use of Above ground Maximum Relative Growth Rate as an Accurate Predictor of Whole-plant Maximum Relative Growth Rate Functional Ecology 3 : 771-775 Shiva W 1988 in India Staying Alive: Women, Ecology Zed Books London England. and Development

PAGE 213

197 Shiva W. 1991. Ecology and the Politics of Survival : Conflicts over Natural Resources in India United Nations University Press : Sage Publications, New Delhi India Shukla and Ramakrishnan 1984 Effects of pruning on tree growth in : Man and the Biosphere Program Series UNESCO Shyam Sunder S ., A N. Yellappa Reddy S M. Chalwadi, and G. B. Narvekar 1986 Afforestation of Western Ghats in Karnataka Pp 2 81-284 in: Nair K S S ., R Gnanaharan, and S Kedharnath, eds ., Ecodevelopment of Western Ghats Kerala Forest Reserach Institute, Peechi India Singh G B. 1987 Agroforestry in the Indian subcontinent : past present and future Pp 117-138 in : Agroforestry: A Decade of Development International Council for Research in Agroforestry Nairobi Kenya Smith H C and N I Lamson. 1983 Precommercial Crop-tree Release Increases Diameter Growth of Appalachian Hardwood Saplings in : USDA Forest Service Northeast Forest Experiment Station Research Paper NE-534, Washington, D C Spring A 1988 Using Male Research and Extension Personnel to Target Women Farmers Pp 407-425 in : Poats S V ., M Schmink, and A Spring, eds Gender Issues in Farming Systems Research and Extension. Westview Press Bolder Colorado Strothman R. O 1967 The Influence of Light and Moisture on the Growth of Red Pine Seedlings in Minnesota. Forest Science 13 : 182-191 Toky 0 P 1992 Role of Remote Sensing Techniques in the Study and Management of Forest Ecosystems Myforest 28 : 169174 Tucker R P and J F. Richards eds 1988. Global Deforestation and the Nineteenth Century World Economy Duke Press Policy Studies Durham North Carolina USDA Agriculture Research Service Handbook 505 : A Checklist of Names for 3 000 Vascular Plants of Economic Importance Revised 1986 Superintendent of Documents Government Printing Office Washington, D C USDA Forest Service 1972 Crown Release Increases Diameter Growth and Bole Sprouting of Yellow Birch in : USDA Forest Service North Central Forest Experiment Station Research Note NC-130, Washington, D C. Vale T R 1982 Plants and People Commercial Printing Inc ., State College Pennsylvania

PAGE 214

198 VIKSAT 1990 Women in Development in Gujarat State Viksat Ahmedabad India. Watt G 1908 The Commercial Products of India John Murray, Albemerle Street London Watt G. 1972 Second Reprint A Dictionary Products of India Periodical Experts of the Economic New Delhi India Williams M J 1989 Deforestation : Past and _P_r_o~g~r_e_s_s_i_n __ H_u_m_a_n_G_e_o_g~r_a-p_h..._y 13 : 176-208 Present Williams P J 1985 Women s Participation in Forestry Activities in Burkina Faso PJW-17 Institute of Current World Affairs Hanover New Hampshire Wilson, J B. Journal 1988. Shoot Competition and of Applied Ecology 25 : 279-296 Root Competition. World Resources Institute 1985 Part III Country Investment Profiles in : Tropical Forests : A Call for Action World Resources Institute Washington D C World Resources Institute 1994 World Resources 1994-95 : A Guide to the Global Environment Oxford University Press Oxford England Zeide B 1980 Ranking Forest Growth Factors Environment and Experimental Botany 20 : 421-427

PAGE 215

BIOGRAPHICAL SKETCH Donald Ian Flickinger was born in Lima Ohio on July 8, 1956. He attended public school in Lima until age 14 when he enrolled at Deerfield Academy Deerfield Massachusetts His junior year of high school was spent at the Franco American Institute in Rennes France through the School Year Abroad Program Philips Academy Andover Massachusetts In 1982 he earned a Bachelor of Arts degree in political science from Stanford University Stanford California His junior year of college was spent studying at the Institut d Etudes Politiques and Universite de Paris, France In 1987 he earned a Masters of Science degree in wildland resource science from the University of California, Berkeley From 1978 to 1984 he resided in Indonesia undertaking community development work with both Volunteers in Asia Inc ., Stanford, California and with British Oxfam, Oxford, UK. In 1987, he came to the University of Florida to pursue doctoral study in both tropical forestry and community resource management While at the University of Florida he has been a graduate assistant and done short-term consulting work in both Indonesia and India 199

PAGE 216

I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. Nigel J. H. Smith, Chair Professor of Geography I certify that I have read this study and that in my opinion it confor1ns to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy C sar Caviedes Professor of Geography I certify that I have read this study and that in my opinion it confor1ctS to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy L Abraham Goldman Associate Professor of Geography I certify that I have read this study and that in my opinion it conforltts to acceptable standards of.......s-G.Q.olarly presentation and is fully adequate, in scope and qual'ty, as a dissertation for the degree of Doctor of Philosophy. rancis E. DIY-ofessor of This dissertation was submitted to the Graduate Faculty of the Department of Geography in the College of Liberal Arts and Sciences and to the Graduate School and was accepted as partial fulfillment of the requirements for the degree of Doctor of Philosophy. December, 1997 Dean, Graduate School

PAGE 217

. Lo 780 1 9? F It>~ I


LD
1780
199 7
.f=6 /
UNIVERSITY OF FLORIDA
3 1262 08554 9540