Profitability of Eucalyptus growing in Busiro, Mpigi District, Uganda

Abstract

The demand for forest products, such as wood for construction, fuel and furniture-making is ever increasing; yet the supply of woody products from the existing forest resources is decreasing. In addition to government's effort to encourage farmers to grow forest trees, farmers need to be assured that their investments in forest tree growing is worthwhile. The paper examines the worthiness of investments in eucalyptus growing with the view of advising farmers on forest tree growing using empirical evidence. It is based on data collected over a period of four yean (1993-1997) from three eucayptus farmers found in Busiro County, Mpigi District. The worthiness of investments in eucalyptus growing has been determined using the net present value (NPV) criterion. It has been proved that investments in eucalyptus growing in perpetuity (forever) and being harvested on a four (4) year rotation period can earn a present value of a perpetual periodic annuity of Ug. shs 4,553,162.