Economic analysis of closing degraded Boswellia papyrifera dry forest from human interventions — A study from Tigray, Northern Ethiopia

Abstract

In Ethiopia, environmental degradation leads to a reduction of forest areas with economically important tree species like Boswellia papyrifera. In an attempt to reverse this development and assist natural rehabilitation, closing degraded forest from free grazing, fuel wood collection and other interference is practiced in Tigray. Sustainability of this management will, among other things, depend on the resources' tangible benefits. This study aimed to determine and compare net benefits (in Ethiopian Birr (ETB) per ha) from the closed and open Boswellia papyrifera forestlands. Production and household surveys were carried out in Jijike and Siye tabias of Abergelle woreda in northern Ethiopia. Data on costs and benefits of frankincense production were collected from firms trading the product. Net benefits from forestlands and croplands were determined using the Net Present Value criterion. The estimated mean frankincense productions were 127 kg/ha/yr for closed forestland and 84.54 kg/ha/yr for open forestland. A significant difference ( p < 0.05) was observed between per tree mean frankincense yield of closed and open sites. The average grass harvest from closed area was 2851 kg/ha/yr. The financial Net Present Values were 8622 ETB/ha for closed and 6468 ETB/ha for open forestlands. These values were by 4574 ETB and 2005 ETB higher than the sum of NPV from crop and crop residuals of a hectare of cropland in the study area of the two sites, respectively. Exporting frankincense could generate foreign exchange of 53.28 and 39.05 USD/ha/yr from closed and open sites, respectively. Rural households earn about 74% of the annual total revenue (ETB/ha) from closed and open area as wage for tapping and collecting frankincense and using of grass. Sensitivity analysis showed that managing degraded Boswellia papyrifera forestland as closed area always generates a higher NPV than the open one in case of changes in discount rate and prices of inputs and outputs. Thus, managing the forest through closed areas is a competitive land-use alternative and provides higher net benefits than both open forestland and agricultural croplands.