Profitable but Costly: Private Gains and Social Burdens of Non-Timber Forest Products in Imo State, Nigeria

Abstract

The trade-off between environmental quality and economic goods within the forest environment is raising a serious policy concern, especially now that most forest is gradually lost to degradation. Productive operations within a forest environment may be profitable with concomitant burden on the environment. The study examines the economics of NTFPs production with data from 80 agro-forest producers selected across the state using a two-stage sampling procedure and analyzed using cost and returns as well as simple descriptive statistics. The result presents a male-dominated (52.5%) agri-forest prenure with secondary education and a mean forest area of 1.92ha under NTFP production. There are net returns of ₦19,614.19/ha from leafy vegetables, like ukazi (Gnetum africanum), utazi (Gangronem alatifolium), and uzuza (Piper guineense), with a rate of returns to capital of 1.76/ha, hence about ₦0.76 returns per hectare in every ₦1.00 total private cost per hectare in the forest environment. Again, a gross and net private margin of 0.657 and 0.534%, respectively, to the total cost of oil palm fruit harvest is made within the forest. This implies that there’s a rate of return to operating expense and total capital invested of 65.7% and 53.4%, respectively. Hence, for every ₦1.00 spent on operating expense in oil palm tree maintenance and fruit harvesting, an additional ₦0.65 per agro-forest prenuers will be generated, while ₦0.53 will be generated. The total private return of N189, 695.12 per farmer in snail production within the forest is a better improvement with a return to capital of 134.5%. There is a more than proportionate increase in return to capital invested of ₦1.35 with every ₦1.00 spent in snail production within the forest environment in the state. The result shows that the total social cost of ₦156,100.00 from all the productive operations within the forest environment in the state was higher than the social benefit of ₦91,000.00 derived from the forest environment, with a negative net social benefit (₦65,100.00). The use of the forest for NTFP production is difficult to exclude from other social benefits it has generated or derived from outside the immediate private operations in the state. The study recommends that agro-forest prenures should intensify more wedges (transactional cost) against negative externalities in all their productive operations. This will increase the social benefit, reduce external cost, and thus sustain the net private gains in NTFP production in the state.