A cost-benefit analysis of farming in forest land: A case of shamba system in Dundori, Nakuru district

Abstract

This study examines the benefits and costs of farming in forestland in Dundori forest, Nakuru district, Kenya. There are several arguments for and against the practice of the Shamba System, this study sought to throw light on the issue. Given that the government has gone back and forth over the system indicates a policy problem to be addressed. Using primary data, the study applied the framework of cost-benefit analysis to analyze the Shamba system and investigate its impact on reforestation. The data showed 88 percent tree survival rate indicating the potential of afforesting degraded forest reserves although it is the Kenya Forest Service that decides the type of trees species to be planted. From the findings, the system allows food production by landless farmers and adds to their per capita income. Although we were not able to account for all the services and products provided by forests; the analysis of the study indicate higher economic than financial net benefit as expected. The incremental benefits were positive and a sensitivity analysis showed no change in the sign of the net incremental benefits. The study recommends participation of farmers through incentives in management of the reforestation exercise. There is need for the government to increase forest guards per forest station, to hold capacity building 'barazas' on non-resident cultivation guidelines and to allocate some acreage to planting indigenous trees under the Shamba system. The system should therefore be promoted for economic and reforestation purposes.