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Financial Analysis of Highland Bamboo Plantation: A Comparative Analysis with Other Land-use Systems in Ethiopia

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Abstract

Ethiopia is well-endowed with bamboo resources that have important economic, social, and ecological roles. Nevertheless, its contribution to producer’s livelihoods and the national economy is very low compared to its potential. This study evaluates the financial performance of bamboo plantations against agricultural crops, Acacia decurrens plantations, and eucalyptus plantations in Banja district. Primary data were collected from 139 households and financial analysis was used to assess the profitability of the systems. The findings revealed that all land-use systems show positive values for all financial indicators. Comparatively, bamboo plantations are the second highly profitable land-use system next to Eucalyptus plantations with NPV of ETB 276,830.50 and BCR of 9, which is twice as high as crop production in the study area. However, the land allocation made by smallholder farmer for bamboo plantation was relatively smaller than other land use systems. Consequently, the current contribution of bamboo falls short of the contribution expected from the sector. Smallholder farmers in the area still rely on crop production though they are not satisfied with its return and it is sensitive to weather variability and is characterized by inherent low productivity. Hence, there is a need for a reform of the existing agricultural extension policy of the nation that has been biased to agronomic crops and it needs to be modified in a way that it is inclusive of alternative land uses on the basis of their financial profitability, social preferences and environmental resilience.

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Notes

  1. ETB = Ethiopian Birr = 0.0336 USD as of December 2018.

  2. Population data have taken from the 2017 report of Banja district agricultural and rural development office.

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Acknowledgements

Financial support for this study was obtained from Ethiopian Environment and Forest Research Institute (Grant Number: +251 116 46 46 06). We are very grateful for all the farmers and experts who are willingly participated during the entire field work.

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Authors and Affiliations

  1. College of Agriculture, Wollo University, P.O.Box 1145, Ethipia, Dessie, Ethiopia

    Mulugeta Siyoum

  2. Hawassa University, Wondo Genet College of Forestry and Natural Resources, P.O.Box 128, Hawassa, Ethiopia

    Teshale Woldeamanuel

  3. Ethiopian Environment and Forest Research Institute, P.O.Box 24536 code, 1000, Addis Ababa, Ethiopia

    Abeje Eshete

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  1. Mulugeta Siyoum
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  2. Teshale Woldeamanuel
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  3. Abeje Eshete
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Correspondence to Mulugeta Siyoum.

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Siyoum, M., Woldeamanuel, T. & Eshete, A. Financial Analysis of Highland Bamboo Plantation: A Comparative Analysis with Other Land-use Systems in Ethiopia. Small-scale Forestry 21, 169–183 (2022). https://doi.org/10.1007/s11842-021-09493-6

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