The economic feasibility of Jatropha cultivation for biodiesel production in Rwanda: A case study of Kirehe district

Rwandan dependence on imported petroleum products led to the exploration of the possibility of using biodiesel. To obtain feedstock, local farmers across the country were encouraged to grow Jatropha curcas L for biodiesel production project. This study investigated the economic feasibility of small-scale Jatropha farming for biodiesel production in Kirehe district, Eastern Province. In assessing the economic feasibility, both primary and secondary data were used. Primary data were collected from a total of 73 small-scale Jatropha farmers in five selected sectors in Kirehe district as well as from interviews with key players of biodiesel project. By using Net Present Value (NPV) and Benefit Cost Ratio (BCR) as cost-benefit indicators, it was found that currently Jatropha cultivation is not economically feasible. This is due to very low seed yields, low Jatropha seed price, high discount rate and high production cost. Sensitivity analysis indicated that Jatropha cultivation is economically viable when seed yield is greater than 7000 kg/ha/year (with NPV greater than 1,184,414 Rwf/ha) and seed market price is greater than 240 RwI/kg (with NPV greater than 88,172 Rwf/ha). In addition, it was found that if Jatropha is grown as fences (which require less inputs and labour), the venture is profitable with NPV of 821,500 Rwf/ha. However, substantial amount of revenue (2,081,924 Rwf/ha) is generated when hired labour is replaced by family labour. Based on the findings from this study, it is recommended that currently small-scale farmers should grow Jatropha as fences around their farms or alongside roads due to significantly low investment risks and opportunity costs for land. However, higher profit will be realized from Jatropha grown as fences if alternative uses of seeds will be developed by various actors along the value chain. (C) 2019 International Energy Initiative. Published by Elsevier Inc. All rights reserved.