Financial Profitability of Carbon Offset Monoculture Plantation Forestry on Smallholder Farms in Trans Mara Sub-County, Kenya

Chemuliti, Judith K.; Ackello-Ogutu, Chris; Mbogoh, Stephen G.; Irungu, Patrick

doi:10.1080/00128325.2018.1486506

Cited by 3 publications

(5 citation statements)

References 21 publications

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“…Millet has the lowest mean total net cash ow compared to other practices. In agreement with this nding Chemuliti et al (2019) in Kenya reported that trees have higher mean total net cash ows and annual net cash ows than cereal crops. The mean total net cash ow and annual net cash ow for coffee-shade practice are higher than other options.…”

Section: Government Initiatives and Policy Contexts: Ethiopiasupporting

confidence: 86%

“…NPV indicates returns to land, i.e., the present values of the costs and revenues attained from the investment activity (Chemuliti et al, 2019;Duguma, 2013;Godsey, 2003;Nigussie et al, 2020). It is the difference between the present value of the bene ts and associated costs.…”

Section: Discussionmentioning

confidence: 99%

“…In addition, price data for cereal crops for 15 years was not su ciently available in the district. Hence, as many authors do (e.g., Chemuliti et al, 2019;Nigussie et al, 2020), we assumed that the input costs, yields, and prices were the same from the rst to the fteenth year. The main cost for cereal monoculture practice comprises ploughing, weeding, fertilizer, sowing, harvesting, threshing, and seed costs (Table A4).…”

Section: Data Collectionmentioning

confidence: 99%

“…2013;Chemuliti et al, 2019;Martinelli et al, 2019;Nigussie et al, 2020). Yields of various cereal crops and agroforestry are negatively affected by natural risks such as pest attacks and storms as well as policy instruments such as trade and supply conditions.…”

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confidence: 99%

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Comparative financial profitability of agroforestry and cereal monocropping practices in Northwestern Ethiopia

Tebkew,

Asfaw,

Worku

et al. 2024

Preprint

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Complimentary agroforestry systems play an important role in agri-food systems, ecosystem security, sustainable natural resource management, mitigates climate change, world development sustainability, and improving farmers' financial conditions worldwide. While the empirical literature on land use and agroforestry systems in Northwestern Ethiopia appears to be extensive, the literature on comparative financial analysis of agroforestry is very scanty. Thus, this study was conducted in the north-western of Ethiopia to: (1) explore the financial feasibility of farmers’ investments in three common agroforestry practices (i.e., homegarden, dogwood (Rhamnus prinoides), and coffee-shade), (2) evaluate and compare the relative financial attractiveness of the selected agroforestry practices and those of the cereal crop practices, and (3) discuss profitability constraints and identify potential solutions to farmers’ agroforestry practices. The result shows that all agroforestry practices were financially profitable (NPV ha− 1 193,932 − 296,739 ETB, r = 10%). The coffee-based was most profitable, with 34.65%, and 26.45% higher NPV ha− 1 than Dogwood and homegarden, respectively, but it has irregular cash flow patterns. Although all are profitable (positive NPV and EAI, and > Unity BCR ), agroforestry practices were financially more attractive than monoculture cereal practices (NPV ranges ETB 58,643 to 167,106) and had a crucial impact on the farmers’ income flow. Sensitivity analysis reveals more impact on returns from changes in discount rate than labour costs and revenue. Market fluctuation, disease, lack of improved fruit tree varieties, land shortage, and input shortages, particularly water pumps, were major constraints for the establishment and profitability of agroforestry practices. Government should support and subsidize different varieties of tree species, establish and develop market chains, and provide credit services and seeds and seedlings to enhance the adoption of agroforestry practices and increase the financial return of farm households. Through the positive externalities of trees, providing incentives to encourage the establishment and adoption of agroforestry practices by farmers may also benefit society. This is also in line with implementing and expanding the country's current state-led green legacy initiative.

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Section: Government Initiatives and Policy Contexts: Ethiopiasupporting

confidence: 86%

Section: Discussionmentioning

confidence: 99%

Section: Data Collectionmentioning

confidence: 99%

mentioning

confidence: 99%

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Comparative financial profitability of agroforestry and cereal monocropping practices in Northwestern Ethiopia

Tebkew,

Asfaw,

Worku

et al. 2024

Preprint

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“…An enterprise budgets approach to value the agricultural development have been published covering different commodities in several parts of the world (Kibirige, 2014). This method had also been applied for forest plantations (McConnell et al, 2016;Purnomo et al, 2016;Frey et al, 2018;Chemuliti et al, 2019). It was found that forest plantations under current market conditions is profitable.…”

Section: Forestry Financial Valuationmentioning

confidence: 99%

Biological assets as mudharabah-based loan collateral for smallholder farmers in Indonesia: a feasibility study

Soeleman

Fitria

2020

DIJB

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Lack source of fund is one of the critical issues being faced by smallholder farmers. Despite having teak trees in their yards, such trees as biological assets are not accepted as loan collateral for bank's loan. In average, smallholder farmers fulfil their daily needs by cutting down their teak trees of five years old for sale. This research explored the feasibility of postponing teak harvesting time and analyzed the financial impact. By postponing the harvesting time, it is expected that the growth of the diameter and height of the tree, thus increasing the volume, and the price increases will increase the value of the asset. The method being employed was enterprise budget in which the costs of maintenance, the growth of the trees, and the sales of the harvested trees over time were considered. For the valuation, a profit-sharing as a result of value increases due to harvesting delay is shared between the owner of the asset and the investor through mudharabah financing arrangement. The result suggests that the annual return for the investor (such as a bank) is well above the current interest on a loan, and, therefore, biological assets should be justified as collateral for a bank loan.

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Coffee, climate, community: A holistic examination of specialty coffee supply chains in Rwanda

van Kollenburg,

van Weert

2024

Sustainable Development

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Rwanda has been a notable player in sustainable development in the last decades, particularly in light of its agricultural practices. This paper offers a multifaceted viewpoint on the challenges faced by Rwanda's specialty coffee sector. Our holistic approach to studying the situation and possibilities included fieldwork, site visits, informal interviews with various stakeholders, from farmers to governmental officials, and an extensive literature study to support our findings. We highlight the challenges of optimizing the domestic supply chain and the effects of such developments on rural livelihoods. Poverty and lacking resources require a nuanced view toward sustainability, as ecological and economic sustainability do not align. The paper presents how certification programs can function as indicators of sustainability and stresses the need for policy evaluations. We also discuss the unique challenges faced by smallholder farmers in Rwanda and how corporate interests may interfere with long‐term sustainable development. As Rwanda continues to develop, this paper argues that the resilience and ingenuity of its people are crucial in the ongoing development of sustainable agricultural systems.

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Financial Profitability of Carbon Offset Monoculture Plantation Forestry on Smallholder Farms in Trans Mara Sub-County, Kenya

Cited by 3 publications

References 21 publications

Comparative financial profitability of agroforestry and cereal monocropping practices in Northwestern Ethiopia

Comparative financial profitability of agroforestry and cereal monocropping practices in Northwestern Ethiopia

Biological assets as mudharabah-based loan collateral for smallholder farmers in Indonesia: a feasibility study

Coffee, climate, community: A holistic examination of specialty coffee supply chains in Rwanda

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