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- Title
Profitability of Smallholder Agroforestry Woodlot Innovations.
- Authors
Amare, Dagninet; Darr, Dietrich
- Abstract
Agroforestry innovations (AFI) are a component of Ethiopia's mixed farming system promoted as an alternative livelihood activity for fulfilling home consumption needs and financial earnings. We evaluate the financial profitability of three AFI systems in the Amhara region of Ethiopia, namely acacia, bamboo, and eucalyptus, based on data from 327 farmers. Farmers primarily employ intercropping for establishing eucalyptus and acacia AFI, whereas bamboo is planted as a single crop due to its spreading root system interfering with other crops. Virtually, the indicators of the discounting analysis demonstrated the viability of AFI investments under smallholders. The benefit-cost ratio (BCR) is the highest for eucalyptus-cum-wheat (4) and the lowest for acacia-cum-maize (2.16) production systems. Internal rate of return (IRR) values (9%-37%) for all AFI are higher than the current discount rate (7%), with bamboo being the most viable. The AFI remain financially feasible up to a 20% prospective revenue shock. The profitability of AFI is unstable due to market volatility caused by fluctuations in demand and political instability. Based on our findings, we recommend further research on demand, supply, and market location to design appropriate adjustments to national agricultural policy interventions.
- Subjects
ETHIOPIA; FARMERS; ALTERNATIVE agriculture; AGROFORESTRY; WOODLOTS; INTERNAL rate of return; BAMBOO
- Publication
Human Ecology: An Interdisciplinary Journal, 2023, Vol 51, Issue 5, p1009
- ISSN
0300-7839
- Publication type
Article
- DOI
10.1007/s10745-023-00446-5