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Food vs. Wood: Dynamic Choices for Kenyan Smallholders

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  • Peralta Sanchez, Alexandra
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    Abstract

    Smallholder farmers in many areas of the semiarid tropics are planting exotic tree species that provide alternative income sources, fuel, and building materials. While providing other benefits, these trees often occupy land that could produce annual food crops. This study uses a polyperiod, linear programming model to explore the opportunity cost of planting Eucalyptus grandis and Grevillea robusta trees compared to crops in the Nyando watershed of western Kenya. Results of the ten year period wealth maximization model suggest that a representative farmer’s decisions on farm resource allocation are sensitive to changes in the relative prices of short rotation tree products and annual crops. The model also suggests that there are economic tradeoffs between planting trees and crops, as well as between planting different tree species. Timber production is not likely to replace food crops for two main reasons: (1) the high cost of meeting household subsistence requirements from marketed grains, (2) household cash flow needs met by annual crops. Farmers plant eucalyptus for commercial purposes because they can obtain timber products within four years; however if the prices of these short rotation products go down, farmers will prefer to grow timber from high yield grevillea.

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    Bibliographic Info

    Paper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Graduate Research Masters Degree Plan B Papers with number 134024.

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    Date of creation: 2012
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    Handle: RePEc:ags:midagr:134024

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    Postal: Justin S. Morrill Hall of Agriculture, 446 West Circle Dr., Rm 202, East Lansing, MI 48824-1039
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    Web page: http://www.aec.msu.edu/agecon/
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    Keywords: Community/Rural/Urban Development; Production Economics; Resource /Energy Economics and Policy;

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    1. Scherr, Sara J., 1995. "Economic factors in farmer adoption of agroforestry: Patterns observed in Western Kenya," World Development, Elsevier, vol. 23(5), pages 787-804, May.
    2. Niskanen, Anssi, 1998. "Value of external environmental impacts of reforestation in Thailand," Ecological Economics, Elsevier, vol. 26(3), pages 287-297, September.
    3. Fafchamps, Marcel, 2000. "Ethnicity and credit in African manufacturing," Journal of Development Economics, Elsevier, vol. 61(1), pages 205-235, February.
    4. Jalota, R. K. & Sangha, K. K., 2000. "Comparative ecological-economic analysis of growth performance of exotic Eucalyptus tereticornis and indigenous Dalbergia sissoo in mono-culture plantations," Ecological Economics, Elsevier, vol. 33(3), pages 487-495, June.
    5. Amacher, Gregory S. & Merry, Frank D. & Bowman, Maria S., 2009. "Smallholder timber sale decisions on the Amazon frontier," Ecological Economics, Elsevier, vol. 68(6), pages 1787-1796, April.
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