Value chain analysis of Eucalyptus poles in around Bahir Dar, Northwestern Ethiopia

Abstract

Value chain development is critical for ensuring the benefits of rapidly evolving plantation forests, such as Eucalyptus. This study examines the value chain of Eucalyptus poles, focusing on the investigation of actors and their roles, the benefit margin and value added to each actor, as well as the potential opportunities and challenges. A total of 194 (157 tree growers and 37 other actors) were selected using a multistage purposive random sampling technique. The study used value chain analysis and gross margin to explore Eucalyptus pole marketing lines, their functions, and estimate cost and value-added distributions. The results revealed direct actors, including tree growers, workers, traders, transporters, and exporting agents, and indirect actors (government, brokers, service providers, etc.). Around 18 Eucalyptus pole marketing lines were identified, with 80 % of the poles transacted in the major three lines. The Eucalyptus pole business is profitable for all involved. But not all have received an equal share of the benefits along the chain. Tree growers generated the highest value in the shortest lines, and traders reaped the highest benefit from the longer chain. Traders captured the highest percentage of the domestic price, while tree producers captured the least. A lack of access to market information, storage space, government and NGO support, inter-actor cooperation, the external effects of Eucalyptus, and the absence of land segregation have hampered the sector's development. Policy interventions should prioritize cluster planting, storage space provision, and cooperative creations to enhance community livelihoods and the sustainable management of Eucalyptus plantations. This study focuses on the Eucalyptus pole value chain due to its market significance, strategic relevance, market dynamics, actor profiles, and marketing systems associated with Eucalyptus poles. However, it still advocates for further research on Eucalyptus charcoal to understand its value chain dynamics and the broader Eucalyptus industry ecosystem.