In recent years the planting of eucalyptus trees in Ethiopia has expanded from State owned plantations to community woodlots and household compounds. In an environment suffering from severe woody biomass shortages water scarcity, erosion and land degradation, fast growing and resilient eucalyptus species perform better than most indigenous woodland and forest tree species (as well as most crops). In addition to increasing biomass and providing ground cover, the sale of eucalyptus poles and products has substantial potential to raise farm incomes, reduce poverty, increase food security and diversify smallholder-farming systems in less-favored areas of northern Ethiopia.Despite the potential for eucalyptus to improve rural livelihoods in northern Ethiopia in 1997, the regional government of Tigray imposed a ban on eucalyptus tree planting on farmlands. This ban is related to concerns regarding potential negative environmental externalities associated with eucalyptus and also due to the desire to reserve productive farmland for crop production. The regional government promotes planting of eucalyptus and other species in community woodlots, and has recently begun to allow private planting of eucalyptus on community wasteland and steep hillsides.In this paper, we review the debate about the ecological impacts of eucalyptus trees, as well as the economic factors that influence whether smallholders invest in these trees. Ex ante benefit-cost analysis based on community level survey data from Tigray illustrates that under most conditions planting eucalyptus trees yields high rates of return, well above 20% under most circumstances. The effect of variable harvest rates, the costs of decreased crop production when eucalyptus trees are planted on farmlands, and differences between administrative zones are considered relative to our base case in our rate of return estimates. The importance of fast growing tree species that can accommodate the high discount rates associated with smallholders in this region is emphasized.
In this article, we use data for 376 households, 1,066 parcels, and 2,143 plots located in 95 villages in the hillside areas in Honduras to generate information needed by decision makers to assess the needs and opportunities for public investments, and design policies that stimulate natural resource conservation. We develop a quantitative livelihood approach, using factor and cluster analysis to group households based on the use of their main assets. This resulted in seven household categories that pursue similar livelihood strategies. We use a multinomial logit model to show that livelihood strategies are determined by comparative advantages as reflected by a combination of biophysical and socioeconomic variables. While 92% of the rural hillsides population in Honduras lives on US$1.00/capita/day or less, households that follow a livelihood strategy based on basic grain farming are the poorest because they often live in isolated areas with relatively poor agro-ecological and socioeconomic conditions. Opportunities for off-farm work tend to be limited in these areas and household strategies that combine on-farm work with off-farm work earn higher incomes. Per capita incomes can be increased by improving road infrastructure, widening access to land, policies that reduce household size and dependency ratios, and adoption of sustainable land management technologies that restore soil fertility. We used probit models to show that the latter can be promoted by agricultural extension programs and land redistribution. Investments in physical assets should be directed toward households that pursue livelihood strategies based on off-farm employment or coffee production, while agricultural training programs are best focused on livestock producers. Copyright 2006 International Association of Agricultural Economics.
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