Financial drivers of land use decisions: The case of smallholder woodlots in Amhara,Ethiopia |
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| Institution: | 1. Department of Forest Sciences, University of Helsinki, Latokartanonkaari 7, FI-00014 Helsinki, Finland;2. International Livestock Research Institute (ILRI), Vietnam Country Office No. 8, Lot 13A, TrungHoa Street, Hanoi, Viet Nam;1. Department of Agricultural and Food Sciences, University of Bologna, viale Giuseppe Fanin 50, 40127 Bologna, Italy;2. Department Agricultural Policy, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), Theodor-Lieser-Straße 2, 06120 Halle, Saale, Germany;3. Martin-Luther-Universität Halle-Wittenberg, Universitätsplatz 10, 06108 Halle, Saale, Germany;1. Agricultural Economics and Rural Policy Group, Wageningen University and Research, Hollandseweg 1, 6706 KN Wageningen, The Netherlands;2. Environmental Economics and Natural Resources Group, Wageningen University and Research, Hollandseweg 1, 6706 KN Wageningen, The Netherlands;3. CESifo, Munich, Germany;4. Forest and Nature Conservation Policy Group, Wageningen University and Research, Droevendaalsesteeg 3, 6700 AA Wageningen, The Netherlands;1. University of Thessaly, Department of Agriculture, Crop Production & Rural Environment, Laboratory of Agronomy and Applied Crop Physiology, Fytokou Str., 38446 Volos, Greece;2. University of Thessaly, Department of Agriculture, Crop Production & Rural Environment, Fytokou Str., 38446 Volos, Greece;3. Institute for Soil Mapping and Classification, Larissa, Greece;1. Department of Policy Planning and Management, College of Social Sciences and Humanities-Sokoine University of Agriculture (SUA), P. O. Box 3035, Morogoro, Tanzania;2. Danish Institute for International Studies, Ostbanegade 117, DK-2100 Copenhagen, Denmark |
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| Abstract: | A household survey on the financial drivers of woodlot production was conducted in the Lake Tana watershed of Amhara State, Ethiopia. Analysis of smallholder Eucalyptus globulus Labill. production reveals that converting uneroded over eroded croplands leads to significantly higher financial returns. Returns were also significantly higher for rotation intervals closer to the optimal economic rotation and for higher planting densities. Most woodlots had positive financial returns. The presence of negative financial returns for some households demonstrates that positive ecological externalities, a lack of economies of scale and/or myopic behavior are potentially important factors in land use decision-making. Wood utilization decisions were shown to impact the potential financial returns of households. Smallholders’ activities demonstrate that eucalyptus is an imperfect substitute for agricultural production on surplus cropland. A third of respondents indicated they had intentionally chosen to convert uneroded croplands to achieve higher returns. Smallholders faced constraints in bargaining over price and access to markets. Future land use policies should address marketing constraints and unsustainable land use activities. Harvesting soil from natural forests and the conversion of productive surplus cropland to woodlot production both present long-term sustainability challenges. This study demonstrates the importance of considering economic and social incentives when creating land use policies for smallholder's woodlot production. |
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| Keywords: | Ethiopia Erosion Financial return Private forestry Small-scale woodlots |
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