A Cost - Benefit Analysis of Substituting Bamboo for Tobacco: a Case Study of Smallholder Tobacco Farmers in South Nyanza, Kenya
Abstract
This study examines the benefits and costs of f
arming bamboo as a substitute for
tobacco
in South Nyanza, Kenya. Using primary data, the study applied the framework of cost
benefit analysis to analyze the cost and benefits of both tobacco and bamboo.
In this
study, the costs and benefits for the year 2006
-
2007 and 2009
-
2016 were extrapolated
using the data for bamboo for 2008. The data for tobacco for 2006 was used to estimate
the costs and benefits for tobacco from 2007
-
2016.
Results of the base scenario showed that bamboo farming is financially and economically
beneficial to tobacco farmers
since the incremental benefits are positive. This is shown by
the results which indicate that whilst the financial net present value for tobacco farmers is
KShs 155,445 that of bamboo farmers is KShs 663,272.
A sensitivity analysis showed no
change in the
sign of the net incremental benefit.
The study concluded that b
amboo
farming therefore, if well managed
can meet the objective of the F
ramework
Convention
on Tobacco C
ontrol and also the government as it seeks to find an alternative to tobacco
growing. Th
e study therefore recommends that Bamboo be introduced as an alternative
tobacco
growing areas.
Citation
Masters Of Arts in economics, University of Nairobi, 2012Publisher
University of Nairobi, School of Economics