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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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