Abstract
This study aimed at determining the extent to which the smallholder tree growers benefit from tree growing activities. It strove to accomplish the following: (i) analyse costs and benefits associated with tree growing activities; (ii) determine profitability indices; and (iii) assess economic status of respondents in the study area. Stratified random sampling technique was used to draw respondents. Mixed research methods for data collection were employed: household survey using semistructured questionnaire, key informants’ interviews, focus group discussions, and researcher’s direct observation. Data were analysed using Statistical Package for Social Sciences (SPSS) and Microsoft Excel computer programmes. Profitability was analysed by gross profit margin (GPM) and return on investment (ROI). Findings suggested that tree growing activities are profitable with GPM of 21% and ROI of 26%. ANOVA results showed no statistical difference within study districts between tree growers and non-tree growers. The possible explanation of this situation could be that tree growers have not invested much the benefits they get from tree growing into asset endowment. ANOVA results on household income revealed a similar pattern except in Njombe DC where there was a statistical significant difference in household income between tree growers and non-tree growers (F (1, 64) = 5.989, P = 0.017 ). The effect size of the difference is medium (Eta = 0.08). It is concluded that tree growing activities in the Southern Highlands of Tanzania are economically profitable.
Highlights
Methodology e study was conducted in Mufindi, Kilolo, Makete, Wanging’ombe, Njombe DC, and Njombe town districts, Tanzania. e design of the study was a descriptive and analytic cross-sectional survey. e sample design for the present study strove to have a study sample which is sufficient and representative of the target population. e target populations for this study were households in the study districts who are involved in tree growing activities and those who are not involved in tree growing
Growing of eucalyptus is more pronounced in Kilolo district compared to other districts, while pines dominate in Wanging’ombe district (Figure 2). us, most of the investors in the study areas prefer growing pines than other species. is could be justified by the demand and selling prices of pines as opposed to other species of trees [25]
Purchase of land constitutes a large proportion of costs for tree growing
Summary
Profit is an absolute measure of the positive gain from an investment or business operation after subtracting all expenses. Profit is used as an index for performance measuring of a business [2]. Profitability, on the contrary, is the size of the profit relative to the size of the business. Profitability measures how efficient the business is in using its resources (capital and employees) to produce profit [4]. Profitability is a relative measure of the success or failure of a business. Profit is an absolute term, whereas the profitability is a relative concept. They are closely related and mutually interdependent, having distinct roles in business. Profitability portrays the efficiency of the management in converting the firm’s resources into profits [5]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
