The implications of this development in land use change are significant for Kenya and the rest of solid-biomass-fuel dependent Africa. Among the questions that need answering are: What will happen to food security? What will happen to the “huge profits” once the market is flooded by “cheap” wood if and when more and more farmers switch to tree planting? Is a boom and bust cycle possible and how do we prevent this from happening? We look forward to further reporting on this issue
— The Charcoal Project
As report in Kenya’s Daily Nation.
HEADLINE: Grain farmers diversify to forestry
By BARNABAS BII bbii@ke.nationmedia.com
Posted Tuesday, April 16 2013 at 01:00
Investment in private forestry is becoming profitable, in Western Kenya due to increased demand for wood fuel by textile and food processing industries.
Grain farmers who have invested in commercial forestry are recording huge profits as a result of the high demand for wood products that has outstripped forest plantation establishments.
The region, according to Kenya Forestry Research Institute (KEFRI) and Kenya Forestry Services (KFS) has three categories of industrial firewood consuming sectors that motivate farmers to venture into economic forestry.
The sectors include one main pulp mill — Rai Plywood — which came up after the collapse of Pan African Paper Mills, Webuye, (Pan Paper), 28 tea processing factories affiliated to Kenya Tea Development Authority (KTDA) and 12 textile and food processing industries, which require wood fuel.
“Most grain farmers in the region are investing in commercial farm forestry because they consider being more profitable, compared with maize or wheat production,” said Mr Solomon Mibey, KFS North Rift head of conservancy.
“The shift by some farmers to private forestry, especially fast-maturing tree for charcoal, sawn wood trade and fodder for their animals, indicate high degree of prices transmission within the tree product market chains,” noted Mr Mibey.
The demand for firewood by KTDA-affiliated factories is estimated at 450,000 tonnes, valued at Sh675 million.
According to the KFRI report, pulp, textile and food processing industries in the region consumed about 320,000 tonnes of firewood last year, valued at Sh560 million.
Industrial firewood sector has a chain demand value of over Sh1.2 billion, making the forestry sector one of the most profitable. This has enticed some farmers in the North Rift, the country’s food basket, to diversify to the sub-sector.
“The farm forestry sector in the North Rift region has great potential to transform livelihoods of millions of smallholder tree growers through increased availability of tree product market opportunities and diversification of on-farm incomes,” said Mr Mibey.
Royalties from forest products, he said, have increased drastically following the government’s decision to slap hefty penalties on prohibited saw millers.
“An average Sh50 million is generated from a minimum plantation, while the lowest penalty of Sh50,000 has been imposed to deter illegal loggers,” said Mr Mibey.
The cost of firewood in the region is about Sh1,400 per cubic metre, while the price of electricity transmission pole wood is Sh1,300.
Most farmers consider these to be more profitable than maize and wheat, whose prices can drop to Sh2,000 a bag, depending on market forces.
Transmission poles
In 2009, the demand for electricity transmission poles by Kenya Power was about 350,000 pieces, estimated at over Sh3 billion.
According to the KEFRI report, the region is home to six out of the eight recommended poles treatment plants, with an estimated production capacity of 380,000 poles per year.
“The entry of concrete pylons into the power transmission sector, and of KFS into the supply chain, calls for urgent attention to diversification by farmers and processing for non-traditional markets and exports,” says the report.
English 
French 
The implications referred in the opening paragraph are overly pessimistic. As with all free markets, there will be initial volatility, but the most important consideration is that in the longer term, farmers will have diversification of income sources. As for food security, more intra-African trade should solve that problem but intra-state regulations need to be reviewed, probably at the regional trading-bloc level.
Thank you for sharing your thought! I think it’s probably too early to tell exactly what the ramifications of this new development. I agree that better, coordinated integration and policy must be a part of the larger solution to the issue in SSA.
For the record, we welcome comments and a vigorous debate about this and every issue we blog about, so don’t hold back!
The problem is to prevent commercial forestry from encroaching land for food, or it would intensify the food crisis, especially in underdeveloped countries.