A financial analysis of forest land use in Bendel, Nigeria

Abstract

The poor performance of agriculture in the past decade, deficits in food crop production and the misuse and abuse of farmlands, generated conflicts between food and timber production in forest reserves. In order to reduce pressure of dereservation, a multiple-land-use system (agriforestry) was introduced into the reserves. This study attempts to investigate the profitability of three forms of forest land-use practices: food crop production; agroforestry; and pure stands of Gmelina arborea (gmelina). Land uses were financially profitable. The net present values, benefit/cost ratios and internal rates of return per hectare respectively gave N1, 761.18 (US$880.59), 2.9 and 29% for food crop production, N2,648.10 (US$1,324.05), 2.0 and 10% for agriforestry, and N397.81 (US$198.905), 1.2 and 8% for pure stands of gmelina. The stiff competition for food crop production in forest reserves is financially compelling. Nevertheless, agroforestry reduced the costs of plantation establishment to government, improved the financial well-being of peasant farmers, and ensured mutual use of the land for food and timber production.