Economic Analysis Of Smallholder Farmers' Forest Land-use Decision

Classical forest economics has largely ignored smallholder forest land use decision-making process.Numerous research and developments have been made in large scale Timber production and value chain Analysis.This is retrogressive,given that smallholder farmers are the most numerous types of forest managers in the world.To address this gap,this thesis advances the literature on the economic decision making context of smallholders'forestland-use decisions using lessons from Productive Public Works Afforestation Programs in Chiradzulu,Malawi.This advancement is critical to improving the design of smallholder afforestation programs.This study endeavors to address the aforementioned research gap by pursuing three specific objectives visa viz;To determine probability of smallholder farmers'forestland-use decision,to examine determinants of smallholder farmers'forest land use decision and suggest practical institutional and policy recommendation for improved smallholder afforestation programs.The study used both qualitative and quantitative research approaches and utilized both secondary and primary data.A total of 383 smallholder farmers were randomly interviewed with the aid of a questionnaire that had specific questions addressing the specific objectives of the study.The log likelihood of regression analysis is-259.59669,P>chi2=0.5979>.R~2=0.0158,1?r?0 denoting negative though not perfect correlation Thus the models showed a strong significance.The findings suggest that smallholders'forestland-use decisions are governed by very different principles than those proposed in many of the existing forest economics literature.My findings revealed that smallholder farmers'forest land use decision is highly influenced by the products and services that meet their greatest needs such as water and energy.I argue that due to transaction costs,market prices are no longer representative of decision prices;rather these prices are shaped by both endogenous smallholder-specific preferences,and characteristics of the household,farm and landscape.Multi-collinearity was tested using the Variance Inflation Factor(VIF)while heteroscedasticity was checked using Cook-Weisberg test.