Eucalypt plantation owned by a tea estate in Kenya’s Rift Valley Province. The biomass will be used either for firewood (curing tea) and/ or for electricity poles. Standing volume is very high, over 500m3/ha by 10 years of age. This is among the highest growth rates in the world, even competing with clonal material. (Photo: KFS)
What is more profitable?
Comparing the commercial growing of Eucalyptus grandis and agricultural crops in western Kenya By Joshua K Cheboiwo1 and David Langat2
E
ucalyptus was introduced in Kenya between 1903 and 1906 to provide firewood for steam engines that were used for rail transport. In Kenya, over 20 eucalyptus species have been introduced and of these E.grandis and E. saligna are grown on a large scale in public forest plantations, farms and tea estates mostly for firewood and power transmission poles. The principal planting areas are in the highlands between 1,800m and 2,700m in altitude and with a rainfall of 750 to 1,800mm per year. Eucalypts are the preferred tree species by farmers because of fast growth, good stem form, coppicing ability, reasonably durable wood, tolerance to water logging, multipurpose use, ready markets for its products and easy workability. Tree growing by farmers is rising and it is important that these efforts be supported through clear incentives and the provision of relevant information (technical, economical). Recent studies by KEFRI covering four types of farm forestry enterprises (sawlogs, transmission poles, charcoal and construction pole production) showed all were financially viable investments, but due to long waiting periods, were inferior to competing agricultural enterprises except for transmission poles.
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Eucalyptus production costs and benefits The costs for eucalyptus enterprises were obtained from KEFRI’s experimental records and from tea companies in Kericho and Nandi districts. Data included seedling purchase, land preparation, planting, tending and harvesting. The costs were mostly labour related and in a few cases tractor ploughing and use of chemicals in pest and weed control. Harvesting costs were factored at Ksh 220/m3 based on experiences from tea estates in Kericho. Similarly, data for competing crops were obtained from the Tea Research Foundation (TRF) and district agricultural offices. Calculations for the benefits from eucalyptus as well as from maize and tea agricultural enterprises were based on current prices. For comparative analysis, a discounting procedure was used to equate tree-based and agricultural enterprises.
Some assumptions for the determination of specific costs and benefits Current and future stumpage prices The current analysis used field stumpage prices; that is, sold as standing timber. Tree stumpage price is affected by demand and supply; the location of the stand and the tree species under consideration. For this analysis, we have used stumpage prices advised by
the Forest Department General Order No. 252 (2005/6; M.E.N.R. 2005) for plantations for sale by volume revenue estimates. The prices for firewood and pole wood were based on 2005 market surveys in Western Kenya (Cheboiwo, 2008). To ease calculations, we assumed a constant stumpage price over the investment period. Cost of capital and labour The current prevailing prices of farm inputs and labour are assumed to be actual market prices and not distorted. The average market prices of input and labour are therefore used in investment analysis and are assumed to apply throughout the investment period. Opportunity cost of land The land value in Kenya is highly developed and the market price in terms of lease or sale is the actual cost of land. For purposes of economic evaluation, the opportunity costs of land have been estimated from the value of accruals if the land used for woodlots could be used for the highest earning competing agricultural crops such as maize and tea. Yield calculations The volume of wood that can be achieved from 1 hectare of land during a given period
Miti July-September 2010