The Design and Structure of the Australian Farm Forestry Financial Model

The Australian Farm Forestry Financial Model (AFFFM) is a powerful tool for the financial appraisal of farm forestry options. The AFFFM originated from financial modelling work undertaken through the Rainforest CRC and CARE Ltd. It is a whole-farm financial model developed in modules using Visual Basic as the programming language, and provides estimates of key financial criteria including net present value (NPV), land expectation value (LEV) and internal rate of return (IRR) and annuities. It also provides details of the impacts of forestry options on cash flows and the business cash position. Included in the AFFFM are substantial datasets for establishment and maintenance costs, growth rates and potential timber products of a number of tree species, for three regions. The following sections outline the scope of the AFFFM including its structure, assumptions, input parameters and key variables. Subsequent chapters describe in further detail the development of the growth modelling components (Chapter 10), the processes for developing and testing the model (Chapter 11) and two case studies involving the application of the AFFFM (Chapter 12).