The contribution of frankincense to the agro-pastoral household economy and its potential for commercialization - A case from Borana, southern Ethiopia

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Frankincense, gum arabic and myrrh are among the most valuable commercial non-timber forest products in the drylands of eastern Africa. This study examines the frankincense value chain and its contribution to the household economy in southern Ethiopia. The study applied a combination of sustainable livelihood and value chain framework to assess the values and the contribution of frankincense to household economies. Data were collected through a household survey, focus group discussions, key informant interviews and field observations. On average, the annual cash income generated from the harvest and sale of frankincense was estimated at 60 USD per adult equivalent unit (AEU) which was 35% of the total household annual cash income. Our analyses reveal that income from frankincense constitutes the second largest share of the total average household cash income after livestock, which accounted for 60%. The poorer households (44% of the sample) have a relatively higher reliance on frankincense income (49.8%), which is almost as much as the contribution from livestock and non-farm income combined (50.2%). Frankincense income functions as a supplementary source of income for the herders. The value chain analysis shows that the price increases from nearly 1 USD per kg at harvest sites to 5.5 USD per kg at the retail level. Nevertheless, despite the abundance of the resource and a growing domestic market demand, the marketed quantities are low, extraction practices are primitive and both local and national markets are poorly developed. Recommendations for researchers and development practitioners include improving harvesting and processing skills through training, introducing harvesting and post-harvest technologies, improving market access, providing credit services, and training to gatherers and local traders on value-adding activities and marketing skills. These measures could improve the economic returns from frankincense extraction and sale and contribute to increased incomes and more sustainable livelihoods.