Wood volume and profitability analysis of small-scale tree growers’ woodlots with a gender perspective in Mufindi District, Iringa Region, Tanzania

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Date

2024-05

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Publisher

Sokoine University of Agriculture

Abstract

The majority of tree plantations in Tanzania consist of softwood species, primarily pines, and cypress, along with preferred hardwood species such as teak and eucalyptus. Small-scale forestry has emerged as a significant and potentially productive segment. Empirical evidence suggests that small-scale forestry constitutes the majority of the total plantation area in the country. While government forests employ a standard practice of selling trees by volume, small- scale growers often opt to sell standing trees without prior measurement. Therefore, it is important to assess this selling practices in order to determine if investments made by small-scale tree growers are profitable. The study aimed to assess the profitability of small-scale tree growers' woodlots, considering gender disparities in the sector, and exploring the economic implications of different selling methods and challenges facing small- scale tree growers. Cross-sectional data were collected through semi-structured interviews. Random sampling was used to select small-scale tree growers’ households for data collection. Data analysis involved descriptive statistics and cost-benefit analysis by using Stata software. The woodlot assessment included inventory work of measuring tree parameters of diameters (Dbh) and heights. Forest inventory data was analyzed by using yield table models in Microsoft Excel. The results of the household survey revealed that investments by small-scale tree growers are profitable. Profitability indicators for those selling standing trees and processing trees for lumber are presented, showing higher values for the later. Gender differences in revenue and profitability indices are observed, with males earning more than females. Moreover, results indicated that small-scale tree growers are potentially experiencing a substantial loss in revenue, profit, and gross profit margin due to the selling method used. When small-scale tree growers sell by observational estimation, they can generate TZS 1.9 million per acre at the age of 11 years. In contrast, selling by volume yields an average of TZS 2.7 million per acre at the age of 11 years. Likewise on the Profit, through selling by volume there is a mean increase in profit of TZS 61155 per acre, and by observational estimation, there is a mean decrease of TZS 42063 per acre. Results also revealed that the key challenges facing small-scale tree growers include fire occurrences and low market prices of trees. About 73% of the respondents reported that fire occurrence is the main challenge in the management of woodlots while 34% reported low prices as a main challenge, followed by 26.30% on marketing. Therefore, processing and adding value to the produced woods tend to significantly increase revenue and profitability. This implies that, small-scale tree growers should prioritize in value addition through processing for increased profitability. In addition, mechanisms for a market shift towards valuing good quality products and promoting sales at longer rotation age should be developed. Small-scale tree growers, with the assistance of the government, should be advised to adopt a standardized method of selling trees based on volume which will allow them to maximize their profit. Further, waiting for the recommended rotation age will ensure a good price and diversification of income sources for small-scale tree growers in Mufindi District. This is crucial because it will reduce the pressure of selling immature stands and accepting low prices. Furthermore, providing continuous education on best management practices, particularly regarding fire safety, is essential.

Description

MSc Dissertation

Keywords

Marketing strategies, Selling methods, Volume, Observational estimation, Profitability, challenges, Profit margins

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