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UBC Theses and Dissertations

Using product-specific fuelwood yields to assess economic viability : a case study of farm-based Gliricidia sepium and Caesalpinia velutina plantations in Nicaragua Baker, Kahlil

Abstract

Non-industrial fuelwood plantations are commonly seen as a means of improving rural livelihoods while helping to meet energy demand. However, for smallholders to invest in the establishment of fuelwood plantations, economic viability is required. Two of the greatest sources of uncertainty in evaluating the economic viability of fuelwood plantations are the effects that market-specific requirements can have on the stumpage price a plantation owner can hope to receive and the lack of appropriate growth and yield information. The primary objective of this thesis was to determine if Caesalpinia velutina and Gliricidia sepium fuelwood plantations in Nicaragua could be economically viable in the smallholder context if sold within the market place. To improve the accuracy of the economic viability assessment, a novel approach was used that forecasted fuelwood yields by market-specific product segments, thereby accounting for the effects of market requirements on differential revenues and costs. Data on market demand, product segment dimensions and prices were collected by measuring fuelwood logs and by interviewing fuelwood consuming business owners. To forecast fuelwood log volume by product segments, species-specific yield models based on three separate sub-models were developed: 1) mean diameter at breast height (DBH) predicted over time; 2) mean height as a function of mean DBH; and 3) taper as a function of mean DBH and mean height. Mortality was assumed to be zero, following establishment mortality. To assess economic viability, information on costs, discount rates, market requirements and fuelwood yields by product segment were combined using the net present value (NPV) and the internal rate of return (IRR). It was concluded that fuelwood plantation yields according to product-specific requirements were essential for the economic viability analysis. In the context of this study, farm-based Caesalpinia velutina and Gliricidia sepium fuelwood plantations could be economically viable over longer rotations. However, barriers to entry such as access to capital and the need for reaching economies of scale made it unlikely that fuelwood plantations could be economically viable for smallholders without institutional support.

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Attribution-NonCommercial-NoDerivatives 4.0 International

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