Economics of charcoal production and its implication to the management of miombo woodlands in Kilosa district

Masters Dissertation

Tanzania is one among developing countries with increasing population growth. The increase of population is reported to contribute to the deforestation as most of the people depend on charcoal as primary source of energy in which the country produces and consume around 3% of global consumption. Most, of previous studies on charcoal provided empirical data on charcoal production, but consistency on productivity, costs incurred, benefits accrued and implication of the technology to woodlands is missing. This study was conducted to analyse the economics of charcoal production and its implication to the Miombo woodlands in Kilosa District, Morogoro region. The aim of the study was to get empirical knowledge for improving charcoal production and to strengthen the theoretical base necessary for supporting sound decision making in the study area. A sample of 120 charcoal producers in villages namely Nyali, Ulaya Mbuyuni, Dodoma Isanga and Ihombwe was used. Descriptive statistics and econometrics methods were used for data analysis. Cobb-Douglas production function was used to estimate charcoal yield per kiln and descriptive statistics of terciles were used to compare the socio-economic characteristics between producers groups. In analysing cost of charcoal production descriptive statistics were used in presenting the findings. Gross Margin analysis was used to estimate profit of charcoal production per kiln while multiple regression was used to analyse factors influencing profitability of charcoal business. For charcoal production technologies, findings show that charcoal producers using modern kilns had 40% yield higher than producers who used traditional kilns while producers who used medium size kilns ranging from 10.5cm3 to 50.5cm3 had 50% yield higher than producers who used small and large size kilns. In cost analysis results show on average cost of tree preparation per bag is about TAS 2000 per bag, kiln preparation about TAS 1000 per bag and kiln supervision about TAS 500 per bag. Profitability analysis the gross margin of 26% implying that charcoal producers retain about 26% of each TAS 1 invested after selling charcoal also the results shows that producer with modern kilns have 44.5% profit higher compared to those with traditional kilns. It is concluded that modern kilns associated with high yield and more profit compared to traditional kilns. Modern kilns investment cost was relatively higher compared to traditional kilns. To achieve greater sustainability the study recommends policies in charcoal making should emphasize the use of modern kilns