Efficiency and biodiversity

Abstract

This paper aims to deliver empirical evidence on the links between production efficiency, biodiversity, and resource management by analysing a case study on small-scale tobacco production in the Miombo woodlands in Tanzania. The subsistence nature of tobacco production in Tanzania suggests that most power driven equipments, fertilizers and sustainable crop processing technologies are beyond the reach of most small-scale tobacco growers. The consequence is that in order to expand their production tobacco farmers heavily substitute such inputs by an increasing use of wood. Hence an increasing amount of forest land is cleared by the farmers resulting in forest degradation and a loss of biodiversity. This study determines in a first step the efficiency of tobacco production bordering the Miombo woodlands in Tanzania as well as investigates factors for the relative inefficiency on farm level. In a second step the relation between forest species diversity in the surrounding woodlands and tobacco production efficiency as well as between diversity and the type of institutional arrangement with respect to forest management are empirically analysed. The results indicate that the different efficiency measures vary widely over the sample, showing a significant positive effect of the curing technology – i.e. the design of the barn - and the source of the firewood. The majority of farmers produce with increasing returns to scale. A strong positive correlation between the tobacco production efficiency and forest diversity as well as between community based arrangements and forest diversity is revealed. This finally suggests that agricultural production efficiency is conducive for environmental sustainability with respect to tobacco in Tanzania as well as supports property rights based institutional arrangements for forest resource management.