Land degradation and the associated soil acidity are critical challenge for crop production in Ethiopian highlands. Since liming is expensive, farmers have developed an alternative agroforestry system by integrating Acacia decurrens into their landscapes. The expansion rate of this system was assessed over the last three decades. The effects of the agroforestry system and charcoal-making kiln sites on soil properties were investigated for over five years compared to the adjacent croplands. Soil samples were collected from A. decurrens plantations, kiln sites, and adjacent croplands at 0–15 and 15–30 cm soil depths. In the last 30 years, the plantation and croplands increased by 8% and 17.5%, respectively, compared to the land-use system in 1993, mainly at the expense of grassland and abandoned land. The main incentive for expansion of A. decurrens plantations was farmers’ income generated from charcoal making. This intervention also improved soil properties with a significantly positive effect on soil pH, soil organic carbon (SOC), cation exchange capacity (CEC), and available Bray phosphorus (Bray-P) compared to the adjacent croplands. Results revealed that the SOC content in year 2 increased significantly (1.3–1.7 times) under A. decurrens plantation compared to adjacent crop fields. Moreover, soil pH increased by one unit on charcoal-making fields, which was equivalent to application of 4–5 t lime ha−1, while SOC increased by ~ 10% on kiln sites compared to the control. Charcoal making kiln spots increased available soil phosphorus by 112% compared to the adjacent non-kiln sites. The Bray- P was strongly and significantly (P < 0.05) correlated (r = 0.75) with soil pH. We conclude that integrating A. decurrens-based agroforestry practices would improve livelihoods by restoring degraded lands, improving income generation and carbon sequestration.
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