FOOD VS. WOOD: DYNAMIC CHOICES FOR KENYAN SMALLHOLDERS By Maria Alexandra

111 Pages·2012·4.46 MB·English

by  Alexandra Peralta

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FOOD VS. WOOD: DYNAMIC CHOICES FOR KENYAN SMALLHOLDERS

By

Maria Alexandra Peralta Sanchez

A PLAN B RESEARCH PAPER

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE
Department of Agricultural, Food and Resource Economics
2012
ABSTRACT

FOOD VS. WOOD: DYNAMIC CHOICES FOR KENYAN SMALLHOLDERS

By
Maria Alexandra Peralta Sanchez

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.
ACKNOWLEDGMENTS

The author is grateful with her master’s plan B paper committee, Dr. Scott Swinton, Dr. Eric
Crawford and Dr. Larry Leefers, for their comments and suggestions, and particularly to Dr.
Swinton for his guidance and mentoring over the process of completing this work. The author is
also grateful for material and financial support from the Pro-Poor Rewards for Environmental
Services in Africa (PRESA) at the International Agrofrestry Center (ICRAF), the Challenge
Program for Water and Food (CPWF) at the International Center for Tropical Agriculture (CIAT)
and the Department of Agricultural, Food and Resource Economics at Michigan State University.
We thank Brent Swallow and Nancy Johnson for scientific support, Fredah Maina, Wilson Nindo,
Joyce Kasyoki and Katherine Kimengu, for logistic support of the fieldwork and the farmers of
Kaplelartet for their hospitality and collaboration.

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TABLE OF CONTENTS

LIST OF TABLES.........................................................................................................................vi!
LIST OF FIGURES.....................................................................................................................viii!
Food vs. Wood: Dynamic Choices for Kenyan Smallholders........................................................1!
Introduction.....................................................................................................................................1!
Theoretical framework: Multi-period profit maximization............................................................6!
Objectives for empirical analysis..............................................................................................10!
Polyperiod linear programming model.........................................................................................11!
Data and setting.............................................................................................................................23!
Production activities..................................................................................................................26!
Constraints................................................................................................................................27!
Cost, prices and yields..............................................................................................................28!
Discount Rates..........................................................................................................................32!
Model Scenarios........................................................................................................................33!
Results and discussion..................................................................................................................34!
Discussion and conclusion............................................................................................................41!
APPENDIX 1................................................................................................................................45!
Description of activities included in the Tableau.....................................................................45!
Year 1:...................................................................................................................................45!
Years 2 to 10:........................................................................................................................48!
APPENDIX 2................................................................................................................................52!
Focus group questionnaire............................................................................................................52!
VERBAL CONSENT SCRIPT................................................................................................52!
APPENDIX 3................................................................................................................................57!
Focus groups summary.................................................................................................................57!
Appendix 4....................................................................................................................................77!
Individual interviews questionnaire..............................................................................................77!
APPENDIX 5................................................................................................................................90!
Linear programming model detailed results Scenario 1...............................................................90!
iv
APPENDIX 6................................................................................................................................96!
Linear programming model detailed results Scenario 2...............................................................96!
APPENDIX 7..............................................................................................................................102!
Linear programming model detailed results Scenario 3.............................................................102!
APPENDIX 8..............................................................................................................................106!
Linear programming model detailed results Scenario 4.............................................................106!
References...................................................................................................................................108!

v
LIST OF TABLES

Table 1. Labor schedule of activities per acre, for planting annual crops (beans, maize and sweet
potatoes), Eucalyptus grandis and Grevillea robusta, upper Awach, western Kenya, 2008…....30.

Table 2. Costs, prices and yields per acre for annual crops (maize, beans and sweet potatoes),
lower Awach catchment, western Kenya, 2008. ………………………………………………...31.

Table 3. Costs, prices and yields per acre, Eucalyptus grandis and Grevillea robusta, lower
Awach catchment, western Kenya, 2008………………………………………………………...31.

Table 4. Land allocation under the different model scenarios…………………………………...37.

Table 5. Focus group sessions held in Kaplelartet, 2008………………………………………...57.

Table 6. Polyperiod linear programming model results: Low price of poles (80Ksh) and 10%
discount rate scenario…………………………………………………………………………….90.

Table 7. Polyperiod linear programming model results: Medium price of poles (140Ksh) and
10% discount rate scenario……………………………………………………………………... 92.

Table 8. Polyperiod linear programming model results: High price of poles (150Ksh) and 10%
discount rate scenario…………………………………………………………………………….94.

Table 9. Polyperiod linear programming model results: Low price of poles (80Ksh) and high
yield of Grevillea trees…………………………………………………………………………...96.

Table 10. Polyperiod linear programming model results: Medium price of poles (140Ksh) and
high yield of Grevillea trees……………………………………………………………………...98.

v i
Table 11. Polyperiod linear programming model results: High price of poles (150Ksh) and high
yield of Grevillea trees………………………………………………………………………….100.

Table 12. Polyperiod linear programming model results: Low price of poles (80Ksh) and no
sweet potato land constraint…………………………………………………………………….102.

Table 13. Polyperiod linear programming model results: Medium (140Ksh) and high (150Ksh)
price per pole, high yield Grevillea, and no sweet potato land constraint……………………...104.

Table 14. Polyperiod linear programming model results: Low (Ksh80), medium (Ksh140) and
high (Ksh150) price of poles, high yield Grevillea and no sweet potato land constraint………106.

vi i
LIST OF FIGURES

Figure 1. Sketch of Year 1 of the tableau………………………………………………………. 21.

Figure 2. . Sketch of the 10 period tableau, showing production periods for poles (eucalyptus)
and firewood(eucalyptus and grevillea)……………………………………………………….....22.

Figure 3. Location of the study site: Kaplelartet village, Western Kenya……………………….25.

vi ii
Food vs. Wood: Dynamic Choices for Kenyan Smallholders

Introduction

Smallholder farmers in many areas of the semiarid tropics are planting exotic tree species that
provide alternative income sources, as well as fuel and building materials. According to Rudel
(2009),

“Between 1980 and 2000 the extent of forest plantations increased seven fold in
developing countries, smallholders in Africa created woodlots behind their houses,
corporations have planted extensive tree farms in South America, villages in
mainland Southeast Asia have planted trees in nearby uplands and state agencies
have planted trees on degraded lands in South Asia.”

Exotic tree species such as Eucalyptus spp grow fast, so planting them can reward farmers with a
rapid income flow from their investment. Eucalyptus rates of return for Northern Ethiopia were
found to be above 20% (Jagger and Pender, 2003). In India the net returns from Eucalyptus
tereticornis were found to reach Rs. 1,340,000 per hectare in plantations of 6-8 year old trees,
almost three times greater than returns for Dalbergia sisso plantations with trees of the same age
(Jalota and Sangha, 2000). In Sudan, comparisons of profitability of Eucalyptus, Acacia and
1