ABSTRACT
Smallholder farmers are increasingly planting eucalyptus trees as an important farm product in many rural areas of Ethiopia including the study area - Gurage Zone. This study analyzed the contribution of eucalyptus trees to rural households’ livelihood and factors that influence the share of land allocated to eucalyptus by smallholder farmers in the study area. The study mainly used household survey, key informant interviews as well as Focus Group Discussions to generate the required data for the study. The descriptive analysis indicated that eucalyptus tree is an important farm product as a source of households’ energy in addition to other economic and social benefits. In addition to being the most reliable source of finance during times of emergency, it was found to contribute almost 31% of total annual household income. Furthermore, the fraction logit estimation indicated factors such as total household income, household heads’ perception towards eucalyptus trees, livestock holdings as well as distance from main roads to be important factors in determining the share of land allocated to eucalyptus trees. We recommend government officials and experts to assist smallholder farmers to use rural land in the most sustainable way by developing and implementing appropriate land use policy.
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