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Dark clouds building up over trees? A simulation-based assessment of smallholder acacia investment in Ethiopia

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Listed:
  • Yismaw, Habtamu
  • Troost, Christian
  • Berger, Thomas
Abstract
This study simulates the economic effects of acacia diseases on smallholder farmers in the Upper Nile basin of the Ethiopian highlands, utilizing agent-based simulation analysis. Acacia, introduced in the 1990s, has become integral to the local agroforestry, enhancing soil fertility and providing significant economic benefits. However, recent outbreaks of acacia diseases threaten these gains. Our simulations suggest that income effects will be severe if the diseases make acacia production completely unprofitable. If interventions like fungicide applications and genetically robust seedlings are able to effectively counteract the diseases, acacia production will remain profitable even with the increased costs to apply these measures. However, they will most likely only partly compensate for the income losses, especially because of an expected delay until they can be introduced. The remaining income loss will still be substantial within the first 4-8 years after the disease outbreak. Our findings emphasize the necessity of timely and strategic management practices to support agricultural resilience. The study underscores the importance of innovative agricultural practices and targeted interventions to enhance the financial sustainability of smallholder farmers facing environmental challenges. Further research is needed to explore the role of acacia in soil fertility improvement, its impact on subsequent crop yields, potentially exacerbating interaction effects with interannual crop yield and price variability, and a detailed representation of livestock production activities. Additionally, the potential of off-farm work as an adaptation strategy warrants deeper investigation.

Suggested Citation

  • Yismaw, Habtamu & Troost, Christian & Berger, Thomas, 2024. "Dark clouds building up over trees? A simulation-based assessment of smallholder acacia investment in Ethiopia," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344393, International Association of Agricultural Economists (IAAE).
    • Handle: RePEc:ags:cfcp15:344393
    DOI: 10.22004/ag.econ.344393
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    References listed on IDEAS

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    1. Ajayi, Olu Clifford & Akinnifesi, Festus K. & Sileshi, G. & Kanjipite, W., 2009. "Labour inputs and financial profitability of conventional and agroforestry-based soil fertility management practices in Zambia," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(3), pages 1-17, September.
    2. Mössinger, Johannes & Troost, Christian & Berger, Thomas, 2022. "Bridging the gap between models and users: A lightweight mobile interface for optimized farming decisions in interactive modeling sessions," Agricultural Systems, Elsevier, vol. 195(C).
    3. Kibrom A. Abay & Mehari H. Abay & Mulubrhan Amare & Guush Berhane & Ermias Aynekulu, 2022. "Mismatch between soil nutrient deficiencies and fertilizer applications: Implications for yield responses in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 53(2), pages 215-230, March.
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    Keywords

    Farm Management; Land Economics/Use; Research Methods/ Statistical Methods;
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