ANALYSIS OF THE PROFITABILITY OF AVOCADO-BASED AGROFORESTRY VALUE CHAIN IN THE EASTERN PROVINCE OF RWANDA

This study analyzes the profitability of avocado-based agroforestry value chain in the eastern province of Rwanda. This was aimed at investigating the degree to which it is lucrative for the value chain actors. Primary data were collected from 214 producers, 20 traders and 9 consumers. Descriptive statistics and net profit margin (NPM) were used to determine to what extent the avocado-based agroforestry is profitable along its value chain. The study’s results show that most of the existing avocado-based agroforestry fruit trees accounting for 86.50% were traditional non-improved varieties that had originated from fellow farmers. The use of fertilizer inputs remains less among the producers where the majority of them ( 84.30%) don’t apply it . The avocado-based agroforestry value chain is lucrative for all involved actors (producers, rural collectors, wholesalers, and retailers). Though avocado is a perennial crop with consecutive investments and returns across years, the study only dealt with the profitability analysis within one year of 2022 for matching the producers’ market supply with other value chain actors within the same channels in the same period. Designing and implementing the policies concerning the efficient use of agro-inputs in avocado-based agroforestry production and well-organized market integration will scale up the profitability for producers and traders and improve consumers’ needs along the value chain. This study provided useful information for subsequent studies with regard to fruit-based agroforestry value chains.


INTRODUCTION
Globally, meeting the food demand of the rapidly growing population is challenging and requires a profitable and sustainable farming system (Von, 2007).Sub-Saharan Africa (SSA) is the most food insecure and poorest part in the world, where the undernourished population accounts for 39% (FAO et al., 2018) due mainly to inadequate farming systems and lack of well-structured agricultural value chains.Nevertheless, Agroforestry was initiated as a viable system for food and tree production to ameliorate food security and generate income for a community (Nair, 1993). 1  According to Molua (2005) and Saidou et al. (2021), agroforestry increases and diversifies farm production while protecting and conserving natural resources.Likewise, Njogu et al. (2016) asserted that the fruit trees on the farms play a vital role in nutritional diversification and are a significant source of income.Bucagu et al. (2012) reported that fruit-based agroforestry had received a little attention.Dave et al. (2019) indicated that fruit trees are currently an integral component of the agroforestry agenda.
Rwanda is the most densely populated country in Africa continent (World Bank, 2017).Its agriculture sector is mainly constrained by land scarcity, dependence on rain-fed for the majority of the farmers, and land degradation leading to poverty and food insecurity, especially in rural communities.Moreover, limited agricultural commercialization due to weak output and financial markets remains a concern (Weatherspoon et al., 2021).According to MINAGRI (2018), agroforestry could provide a recovery solution to degraded land, in particular providing essential farm resources including fruits.Besides, Ndoli et al. (2021) found that agroforestry has a significant contribution to food security and social welfare improvement through agroforestry product sales revenue.
A mapping survey for agroforestry expansion in Rwanda showed that the eastern plateau and savannah are some of the most prioritized agro-ecological zones (Mukuralinda et al., 2016).In Rwanda, there are three categories of agroforestry tree species such as timber, fruit, and legume based on their main functions (Bucagu, 2011).The present research focuses on avocado fruit-based agroforestry.Among the fruit tree species-based agroforestry, the avocado (Persea americana) is predominant in terms of frequencies across the six agro-ecologies throughout the country (Mukuralinda et al., 2016;NISR, 2020;Ndoli et al., 2021).Correspondingly, the study by Shumeta (2010) revealed that avocado fruit trees were suitably grown with arable crops like maize as a planned agroforestry system in the southwestern part of Ethiopia.Similarly, Lusike et al. (2018) argued that intercropping avocado with other crops like beans, peas, kales, cabbages, maize, and potatoes is possible.
Avocado is grown in Rwanda for local consumption and export.Two most popular improved varieties, namely Hass and Fuerte are exported, mostly with destinations to Dubai, France, Netherlands, and the Middle East (NAEB, 2020).This crop is a good source of income for farmers besides earning foreign currency.Avocado is the second dominant fruit in the country in terms of annual export revenues, with $740,573.00after sweet banana, which accounted for $1,001,886.00 in the year 2019 (NAEB, 2020).
To ensure the successful implementation of agroforestry system, the concerned development professionals must pay more attention to agroforestry products' marketing efficiency (Ola and Menapace, 2020).According to Agroforestry Network et al. (2018), advancing value chains for agroforestry products and services is imperative to enable the actors to generate substantial income.Correspondingly, Mbora et al. (2008), Jamnadass et al. (2011), FAO (2013) and ICRAF (2013), argued that the profitability of agroforestry value chain could boost through the adoption of improved tree varieties with advanced farm management approaches to comply with highvalue market requirements.
Too little is known about the profitability of avocado-based agroforestry value chain in Rwanda and particularly in the Rwandan eastern province.Therefore, this study analyses the profitability of avocado-based agroforestry value chain in the eastern province of Rwanda.According to (Tulsian, 2014), profitability determines the ability of the business enterprise to generate profits from its use relative to revenue and costs.According to Rahman et al. (2014), profitability indicates how efficiently a product or plant generates profit for owners.

MATERIALS AND METHODS
This study was carried out in the Eastern Province of Rwanda in Kirehe, Ngoma, and Kayonza Districts.This administrative entity is shared between two different agro-ecological zones, namely the eastern plateau and the eastern savannah.The Eastern Province is the largest in the country with 9,813.00km 2 out of 26,338.00km 2 of the country's total area (NISR, 2012).Additionally, it is the greatest area for agricultural production activities nationwide.However, this area is the most constrained by a prolonged drought season.Hence, climate smart agricultural production, including the adoption of fruit-based agroforestry is one of the trusted options to mitigate and resile the drought-based climate change impact in this region.The data used was collected from a random sample of 214 smallholder producers selected from the checklists provided by the local authorities comprising 4240 avocadobased agroforestry smallholder producers as a mother population.The random sampling approach minimizes the bias and ensures that the population is wellrepresented (Wackerly et al., 2008).For each selected smallholder producer, the number of avocado-based agroforestry trees (young and fruiting) was counted alongside their respective varieties, fertilizer use, and volume of marketable surplus.Subsequently, there was a purposive sampling of 20 traders of avocado composed of 6 rural collectors, 5 wholesalers, and 9 retailers) and 9 consumers of avocado.In this way, information offered by the producers regarding to whom they supply avocado led to select the above-mentioned actors integrated along the same value chain marketing channel.The semi-structured questionnaires with closed-ended and open-ended questions were used to collect the data.For the analysis of data, a value chain map was used.In order to determine the profitability of avocado commodities traded/quintal for every involved actor, the formula of net profit margin was employed.The profitability has several measurements, with exotic names and abbreviations, which entails that there is no a single method to express profitability (Lutz, 2010).Normally, profitability is expressed in the form of a ratio.This study applied NPM as one of the most important profitability metrics.NPM shows the extent to which a net profit is earned as a percentage of revenue received.To calculate NPM, formula 1 was used as follows: where NPM is net profit margin, NP is net profit, and TR is total revenue.The NP here is calculated from TR thus; NP = TR -COGS -(TMC + overhead costs), COGS and TMC referring to cost of goods sold and total marketing costs, respectively.

RESULTS AND DISCUSSIONS Demographic Characteristics of the Respondents
The study found that 77.70% of household heads (HHHs) were males and 22.30% of females.Regarding the households (HHs) members' age groups, 38.90% of the family members were below 16 years, and then 24.60, 31.60, and 4.90% were in the age groups of 16 to 30 years, 51 to 64 years, and 65 years and above, respectively.For the educational level attainment of the respondents, a large number (74.30%) accomplished primary, 10.90, 14.00, and 0.80% had never attained education, attained college, and university, respectively.
Table 1 shows the demographic characteristics the respondents in the present study.

Characteristics of Avocado-Based Agroforestry in Selected Sites and Marketing Channels
The total number of surveyed avocado trees was 493, of which 321 were productive.The number of trees owned per household ranged between 1 to 11 and the average number of avocado trees owned per HH was 2.30.Majority (70.80%) of avocado-adopted trees originated from fellow farmers, whereas 9.20, 5.70, and 14.30% originated from government bodies, nongovernmental organizations, and local markets sequentially.Most of the adopted avocado fruit-based agroforestry varieties were traditionally nonimproved, accounting for 86.50%, and the minority were improved varieties, namely Hass, Ettinger, and Fuertes, which made up 5.20, 4.70, and 3.60%, respectively.The vast majority (84.30%) of avocado-based agroforestry producers do not apply any fertilizer types.Only 9.70, 1.80, and 4.20% of respondents apply farm yard manure (FYM), inorganic fertilizer, the mixture of inorganic fertilizer with FYM respectively.The low agro-input use might be attributed to a lack of avocado-quality planting materials, low awareness of fruit-based agroforestry system management methods, and a lack of access to finance due to the low coping capacity of small-scale producers.These findings are in agreement with others of Agroforestry Network (2020), which revealed that most of the high-quality agro-inputs (planting materials of improved varieties and fertilizer blends) have been adopted in monocropping but not fully adopted in the agroforestry system.These findings are also consistent with the study's findings of Jamnadass et al. (2011) who found that most of the current fruit trees-based agroforestry offer low yield with low quality due to inadequacy of improved planting materials and poor farming techniques.
Regarding the marketing channel, Figure 1 shows that there are six marketing channels and the quantity of avocado passing in each channel.Figure 1 shows that producers' marketable surplus is 90.50 quintals (qt.).However, due to post-harvest losses through the marketing process, only 89.32 quintals were traded.The length of the value chain channel (the number of actors involved along the channel) and the volume of marketed avocados are the prominent aspects to characterize the marketing channels.The survey showed the channels as follows:

Profitability Analysis of Avocado-Based Agroforestry Value Chain
The NPM was used in profitability analysis.Table 2 shows the results on profitability analysis.The NPM is (39.20%) for producers, 20.20% for rural collectors, 11.30% for wholesalers and 9.80% for retailers.These results show that the avocado-based agroforestry value chain is profitable for all value chain actors.The results imply that investment in the avocado-based agroforestry value chain is financially viable and can contribute to the improvement of the living standards of chain actors.

Table 1 :
Demographic characteristics of the respondents Figure 1: Avocado-agroforestry based market channels in the study area University of Gent, and the Katholieke Universiteit Leuven.It was financially supported by the European Union initiative on Climate-relevant Development Smart Innovation through Research in Agriculture (and food systems) in developing countries -DeSIRA.Any opinions, findings, conclusion or recommendations expressed in this publication are those of the authors and do not necessarily reflect the view of the institutions mentioned above.