The role of trees for sustainable management of less-favored lands: the case of eucalyptus in Ethiopia

In northern Ethiopia, eucalyptus is the most commonly observed tree species in community and household woodlots. In an environment suffering from biomass and water shortages, erosion and land degradation, fast growing and resilient eucalyptus perform better than most indigenous tree species. Smallholders show a clear preference for eucalyptus poles, which are useful for farm implements and constructing dwellings and fences. In addition, the sale of eucalyptus poles and products has the potential to raise farm incomes, reduce poverty, increase food security and diversify smallholder-farming systems in less-favored areas of Tigray. Despite the potential for eucalyptus to improve rural livelihoods, in 1997 the regional government of Tigray imposed a ban on eucalyptus tree planting on farmlands. The ban was precipitated by concerns about the potential negative environmental externalities associated with eucalyptus, and the desire to reserve farmland for crop production. However, the regional government promotes the planting of eucalyptus in community woodlots, and has recently begun to allow private planting of eucalyptus on community wasteland and steep hillsides. In this paper, we review the ecological debate surrounding the planting of eucalyptus trees. In addition, the economic factors that influence smallholders to invest in tree production are considered. Ex ante benefit-cost analysis based on community and village level survey data from Tigray illustrates that planting eucalyptus yields high rates of return, well above 20% in most circumstances. The effect of variable harvest rates, and the potential costs of decreased crop production when eucalyptus trees are planted on or near farmlands are considered relative to our base case scenario. Based upon the review of the ecological and economic impacts of eucalyptus, we conclude that a policy option favoring the allocation of wastelands for private tree planting offers the greatest opportunity for rural smallholders. (C) 2002 Elsevier Science B.V. All rights reserved.