Financial Analysis of the Use of Land: Agriculture or Woodlot

Agriculture is the main driver of deforestation. In other to reduce deforestation, a viable alternative livelihood strategy, aside from agriculture, must be in place to provide a sustainable income for investors. Managing forests for sustainable production (the forest economy) has been suggested as...

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Bibliographic Details
Published in:Land (Basel) 2022-04, Vol.11 (5), p.642
Main Authors: Ninson, Jacqueline, Egyir, Irene S., Mensah-Bonsu, Akwasi, Onumah, Edward Ebo
Format: Article
Language:English
Subjects:
Agricultural economics
Agricultural production
Agriculture
Comparative analysis
Crops
Deforestation
Discount rates
Economics
Farmers
Financial analysis
Fisheries
Forest management
Forestry
Households
Land area
Land use
Livelihood
Net present value
Population
Profitability
Sustainability
Sustainable production
Sustainable use
Timber
woodlot
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Summary:Agriculture is the main driver of deforestation. In other to reduce deforestation, a viable alternative livelihood strategy, aside from agriculture, must be in place to provide a sustainable income for investors. Managing forests for sustainable production (the forest economy) has been suggested as an alternative for sustainable land use practice. In the current study, we undertook a comparative analysis of woodlots and agriculture. The profitability of agriculture and woodlot production in Ghana was compared using a profitability model. We looked at profitability in terms of Net Present Value (NPV) and the Benefit-Cost Ratio (BCR) of three regions in Ghana, namely, Ashanti, Bono-East, and Western Regions. We found that woodlot producers with contractual relationships with the Forest Commission and other forestry companies produce the highest Net Present Value (NPV) and Benefit-Cost Ratio (BCR). However, this profitability is marginally higher than that of agriculture, which gives a fixed yearly return. This means woodlot production may not be a panacea to reducing agriculture in Ghana.
ISSN:2073-445X
2073-445X
DOI:10.3390/land11050642