Attractiveness of plantations for smallholders

Apart from cultural preferences, traditions and other 'non-rational' criteria, financial attractiveness is the key factor for smallholder decisions about land use. Yet for the generation of cash income, plantations show significant competitive disadvantages compared to agriculture. Even if supported by external organizations, plantations still require significant inputs of land and time. They represent long-term investments with the accumulation of risk over several years. Smallholders also need to wait a relatively long time for cash returns, which, due to insecure market situations, are often unpredictable. In contrast, although the cultivation of agricultural crops does not necessarily generate a higher financial return per hectare or per work input, it promises a more immediate income, allows flexibility to respond to changing markets, is based on existing traditional knowledge and skills and doesn't require long-term investment. Thus, in many situations agricultural land uses provide benefits more quickly, more flexibly and with a lower level of risk (Hoch, 2009).

Furthermore plantations consisting of only one, or a few - often exotic -tree species may provide fewer environmental benefits for smallholders than alternatives such as forest fallows, secondary forests or degraded primary forests. In still forested landscapes, for example, the regeneration of deforested land occurs relatively quickly (Nepstad et al, 1991). In contrast to plantations, these succession processes run naturally, and thus require little management input. Generally, secondary forests are also more diverse and ecologically more adapted to local ecosystems. Summing up, secondary forests, compared to plantations, have the potential to deliver environmental services of a higher quality at significantly lower costs.

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