16 



A forest yields every year 500 trees which, when converted and conveyed to the 

 market at a cost of R2,000, sell for £10,000. The revenue amounts to HS.OOO. If 

 the cost of maintaining and administering the forest, including necessary works of 

 improvement, amounts for the year to B4,000, the net revenue is fi4,000. The gross 

 recej/j/samount toE10,000, but of this sum fl2,000 must be considered to be an 

 advance made, in order to plaoe the produce in the purchaser's hands, which is recovered 

 on the sale of the timber. 



Revenue is the net value of produce— It will be readily- 

 understood that, in calculations or comparisons of revenue, 

 the revenue figures, after deducting the cost of felling and 

 extracting the produce, must be used and not the gross 

 receipts or total price realised for the produce. Against 

 the latter must be debited money expended on placing the 

 produce in the market and which in no sense represents the 

 value of the produce in the forest. There is no case in which 

 large timber, if taken far enough to a good market, will not 

 realise a better piice than small ; but this would not make it 

 advantageous to grow such timber if the increased cost of 

 production and transport combined were not more than 

 covered by the higher realisations. The net revenue might 

 still be less than that realised for small material. 



Statements showing the gross receipts, as entered in the accounts of the Forest 

 Department, are too often made use of in India. How misleading these may prove 

 will be seen from the following comparison between the true financial results of the 

 working of the Department for the year 1888-89 and the results as they appear 

 when the expenditure on timber works is treated as outlay on the forest and not as an 

 advaiice which is recovered when the produce is sold : — 



Relation of revenue to area.— For purposes of comparison the 

 revenue may be usefully stated, in tbe same way as the pro- 

 duction, with reference to tbe area from which it is derived. 



In the example given above, suppose the area to be 4,000 acres of mixed 

 forest, yielding teak, and worked by the selection method. The revenue per acre is 



8,000, r,„ ., , . 4,000 T,i 



^^ or k4 ; the net revenue per acre is j^ ~ Kl. 



