Economics of charcoal production in miombo woodlands of eastern Tanzania: some hidden costs associated with commercialization of the resources

Abstract

This paper assigns monetary values to commercial production of charcoal (using traditional earth kilns) in the miombo woodlands surrounding Kitulanghalo Forest Reserve in eastern Tanzania, through cost–benefit analysis (CBA). Charcoal is the most commercialised resource in the study area and the net present value (NPV) for the charcoal business over a 15-year period was US$ 511 ha −1. The profit from charcoal production is attributable to very low capital outlays, ‘free’ own labour, ‘free’ raw materials, lack of concern about associated external costs and high demand for charcoal. When the cost of labour, raw materials and opportunity costs were considered, the NPV value was negative (US$ −868 ha −1), indicating that profit realization is accomplished at the expense of other potential uses of the woodlands. The estimated local wood consumption for charcoal of 6.01 m 3 capita −1 year −1 is very high compared to subsistence firewood consumption of 1.5 m 3 capita −1 year −1. The estimated area cleared for charcoal production locally was 1671 ha year −1, which was about 13% of surrounding easily accessible communal woodlands in the area (<5 km from settlements and <10 km from the Dar-es-Salaam–Morogoro highway), which were estimated to cover 13 350 ha. This shows that although commercialisation of wood resources provides tangible monetary benefits to rural communities, it also contributes to the resource depletion that will ultimately threaten their long-term survival. We recommend some policy interventions in order to safeguard the resources.