The way in which timber companies pay to use forests can have a profound effect on sustainable forest management. A well-designed pricing policy can help ensure the efficient utilization of forest resources, a long-term sustainable harvest and minimum ecological and environmental damage. Highlighting this, a new report shows that Peninsular Malaysia's pricing policy neither produces optimal financial returns for the government nor provides the best incentives for sustainable forestry practice. This study looked at concessions in several logging areas and found that the introduction of a tender system for logging concessions would be the best way to create an efficient market for logging rights.This, in turn, was predicted to improve both the competitive performance of logging companies and the equitable allocation of forestry revenue.

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