Eucalyptus Succession on Croplands in the Highlands of Northwestern Ethiopia: Economic Impact Analysis Using Farm Household Model

Amare Tesfaw, Dawit Alemu, Feyera Senbeta and Ermias Teferi
Additional contact information
Amare Tesfaw: Department of Agricultural Economics, College of Agriculture and Natural Resources, Debre Markos University, Debre Markos P.O. Box 269, Ethiopia
Dawit Alemu: Stichting Wageningen Research Ethiopia, Wageningen University & Research (WUR), Addis Ababa P.O. Box 88, Ethiopia
Feyera Senbeta: Center for Environment and Development Studies, Addis Ababa University, Addis Ababa P.O. Box 1176, Ethiopia
Ermias Teferi: Center for Environment and Development Studies, Addis Ababa University, Addis Ababa P.O. Box 1176, Ethiopia

Resources, 2022, vol. 11, issue 8, 1-20

Abstract: The northwestern highlands of Ethiopia are characterized by severe land degradation and apparently low agricultural productivity. This situation is continuously threatening the livelihoods of smallholder farmers who mainly sustain their living from the cultivation of annual crops. In recent years, however, smallholder farmers have started converting their croplands to plantations of Eucalyptus , a non-native tree species to Africa, for its rewarding economic contributions. In this study, we aggregated data from 388 smallholder Eucalyptus growers located in three agroecology zones (onwards called farm typologies). We measured the economic impact of Eucalyptus succession on croplands using a farm household model which is provided in the GAMS (General Algebraic Modeling System) platform. The results of the model varied between farm typologies and showed that households’ gross margins increased with a corresponding increase in the conversion of croplands. Results also showed that gross margins from plantations of Eucalyptus were higher than that of cultivation of food crops. Furthermore, evaluation of farm portfolios indicated a higher benefit-cost ratio (BCR) for the plantation of Eucalyptus . We concluded that the conversion of croplands in the study area is an incentive-driven process in a dynamic farming system, which strongly demands bringing policy-emanated livelihood alternatives. With this arena, the expansion of Eucalyptus is recommended for lands of terrain features, high marginality and low suitability for the cultivation of food crops and setting aside fertile arable lands. We generalized that an increase in Eucalyptus plantation pays off given the implementation of proper land resource management and the apparent impacts of Eucalyptus on biodiversity and cultural landscape is managed with sustainability perspectives. However, it demands collaborative policy efforts that can especially meet socioeconomic, environmental and public interests.

Keywords: Eucalyptus; farm portfolio; farm household model; GAMS; succession; trade-off (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2079-9276/11/8/71/pdf (application/pdf)
https://www.mdpi.com/2079-9276/11/8/71/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jresou:v:11:y:2022:i:8:p:71-:d:875638

Access Statistics for this article

Resources is currently edited by Ms. Donchian Ma

More articles in Resources from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().