CHAPTER ONE

1.0 INTRODUCTION

Wood fuels (charcoal and fuel wood) play a significant role in the fuel requirements of many

developing countries especially Nigeria where there is an increasing dependence due to growing

urban population coupled with limited accessibility to the modern alternative fuels. The report of

Food and Agriculture Organization, (2005) indicates that extraction of trees for wood fuels

accounts for sixty one (61) percent of total wood removal globally and that hundreds of millions

of people remain completely dependent upon wood for fuels.

In developing countries, wood fuels contribute to 83% of total energy consumption (World

Energy Council, 2004), and in the case of charcoal, Africa consumes over 50% of the world’s

total production of which Nigeria alone consumes about 16%, majority of this charcoal is

consumed in urban areas by households for cooking and heating.

In several energy policy documents in Nigeria, it is desirable that households will over time

experience a transition from charcoal to more modern fuel types such as kerosene and gas. This

transition has not occurred as charcoal has become an increasingly dominant fuel for urban

households. Charcoal has remained the most common cooking fuel in Nigeria, and over the year,

charcoal supply/demand imbalance in some parts of the country has adversely affected the

economic well-being of the people. On the national level, increasing charcoal consumption

contributes to deforestation with consequent land degradation and soil erosion.

Charcoal production worldwide is increasing for energy use in households and industry, but it is

often regarded as an unsustainable practice and is linked to agricultural frontiers (Prado 2000).

The production (Coomes and Burt 1999) and use of charcoal in agriculture is common in Brazil

and widespread in Asia (Steiner et al.2004).

newly proposed opportunity to use charcoal as a soil conditioner that improves soil quality on

very acid and highly weathered soils (Lehmann et al. 2002; Steiner et al. 2004). This can be

realized either by charring the entire aboveground woody biomass in a shifting cultivation

system as an alternative to slash and- burn (coined recently as slash-and-char by (Glaser et al.

2002; Lehmann et al. 2002) or by utilizing crop residues in permanent cropping systems.

Charcoal formation during biomass burning is considered one of the few ways that C is

transferred to refractory long-term pools (Glaser et al. 2001a; Kuhlbusch and Crutzen 1995;

Skjemstad 2001). Producing charcoal for soil amelioration instead of burning biomass would

result in increased refractory soil organic matter, greater soil fertility and a sink of CO2 if re-

growing vegetation (secondary forest) is used. A farmer practicing slash and char could profit

from soil fertility improvement and C credits (if provided by a C trade mechanism to mitigate

climate change), providing a strong incentive to avoid deforestation of remaining primary

tropical forests.

Carbonised materials are formally authorized for use as soil amendment material in Japan, which

is using 27% of its national charcoal production (50,835 t) for purposes other than fuel, more

than 30.6% of which is used in agriculture (Okimori et al. 2003). In the past Japanese farmers

prepared a fertilizer called “haigoe” which consisted of human waste and charcoal powder

(Ogawa 1994). Charcoal is proposed to be an important component of the man-made and

exceptionally fertile terra preta soils in the Amazon (Glaser et al. 2001b).
In the SADC region, households consume about 97% of wood energy mostly for cooking,

heating and cottage industries while industrial sector is the second to household sector (SADC

Energy Sector 1993 in Monela and Kihiyo, 1999).

Fuel wood accounts for 92% of the primary energy consumed in Tanzania while petroleum and

electricity account only for 7% and 1 % respectively (Ishengoma and Ngaga, 2001). Most of the

industrial wood energy is consumed by small-scale industries which include food processing

industries and service sectors such as brewing, fish smoking, salt production, baking, restaurants,

schools, hospitals and food vending; agro-processing industries such as tobacco curing, tea

drying and beeswax processing; and production of building materials such as burnt bricks, lime,

smiths, foundries, pottery and ceramics. These industries and domestic activities which rely upon

wood energy provide employment and income for rural people particularly during off-season in

agricultural production (Monela and Kihiyo,1999).

Yet still, the majority of wood fuel consumers cannot afford the high investment costs associated

with alternative commercial energy sources (Moyo et al., 1993).

Availability, reliability of supply and cheaper prices renders wood fuels more preferable than

alternative sources of energy.

Furthermore due to the anticipated steady increase in population, it is expected that actual

consumption of firewood and charcoal will continue to rise to a greater extent. This will put

stress on natural forests from where the charcoal is obtained, possibly resulting in deforestation

of the forest ecosystems.

Currently, little is known on the dynamics of charcoal production in terms of ecological and

socio-economic impacts. It is against this background that some recent researches were done.
1.1 PROBLEM STATEMENT

The widespread and increasing popularity of charcoal among Nigerian urban households is as

result of rapid urbanization, high population growth, inadequate supply of the modern alternative

fuels at prices which consumers can easily afford, fall in the real income of urban dwellers due to

declining economic condition and availability of charcoal at relatively cheaper prices. The

situation now in Nigeria is that thousands of bags of charcoal enter most of our urban centres on

daily basis every year and these add up to quite a large tonnage of charcoal per year for which

trees had to be cut from forest.

In Nigeria the four main cooking fuels used in urban centres are charcoal, fuel wood, kerosene

and Liquefied Petroleum Gas (LPG), however, there is a situation of erratic supply of modern

fuels (kerosene and gas) and availability of charcoal at relatively cheaper prices, many urban

households therefore see the use of charcoal as an alternative way out of this problem of

inadequate supply of the modern alternative fuels, hence there is massive shifting to the use of

charcoal among urban households, a situation which in turn leads to increase in demand for

charcoal among urban households. This increase in demand however has devastating impacts

upon the forests, the rural supply areas and agriculture.

Adverse impact that are already apparent but which would increase if the trend continues are:

soil erosion, less biomass available for all other uses, traditional economic forest products such

as fruits, nuts, medicinal trees becoming scarce, and more land being opened for cultivation but

fall in agricultural productivity.

the situation, this study examined the proportion of cooking fuel expenditure in total household

expenditure and estimates the respective proportion of expenditure of the main cooking fuel

types in total fuel expenditure.

1.2 OBJECTIVES OF THE STUDY

The general objective of this study is to analyse the economic analysis of charcoal production in

Nasarawa state, Nigeria. The specific objectives are to;

(a) Describe the socio-economic characteristic of charcoal producers in the study area.

(b) Identify the marketing channels for charcoal production in the area

(c) Determine the cost and returns on charcoal production marketing in the area

(d) Determine the marketing constraints affecting charcoal producers.

(e) Examine the determinants of the quantity of charcoal produced.

1.3 JUSTIFICATION OF THE STUDY

Despite the economic benefits of charcoal production, much concern has been expressed towards

the consequences that follow its production. Allen and Barnes (1985) said about 7.5 million

hectares of closed forest and 3.8 million hectares of African forests are cleared yearly for a

variety of purposes ranging from timber production, construction purposes, agriculture as well as

charcoal production. It is therefore predicted that if the present trend continues the tropical

rainforest could completely disappear by the year 2020 due to deforestation induced by fuel

wood, charcoal production and conversion of forest to other uses. Taking into consideration the
poverty level of the developing nations, occasioned by unemployment and low per capita

income, charcoal production has become a mean of livelihood.

Hence, many rural dwellers in tropical Africa have taken to charcoal production at an alarming

proportion as their means of economic survival. Akinbami (2003) even revealed that more than

60% of Nigerian population relied on fuelwood and charcoal as the main energy sources for

cooking as a result of extreme high poverty rate in the country. As charcoal production

continues, much debate has been generated as whether the economic benefits of charcoal

production worth the environmental consequences that trail its production, which include

deforestation as a result of cutting down of trees for charcoal production, accumulation of

greenhouse gases in the atmosphere due to burning of trees for charcoal and its consequential

effects on global energy balance and climate change. Focusing on the economics of charcoal

production would be of immense importance to managing both the trees and soil in the study

area.
 CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Concepts and Sustainable Approaches to Charcoal Production

To facilitate the understanding of the literature provided in this chapter, the study defined certain

fundamental concepts on the topic. These concepts are as follows:

2.2.Nature and Process of Charcoal Production

Charcoal "is the general term for a range of carbonized materials, with varying combustion and

dark properties” (Amanor et al, 2002). It is usually produced by raising the temperature of wood

beyond the point at which many of its organic components become chemically unstable and

begin to break down. The details of this process, called pyrolysis, are still incompletely

understood. Most of the newly formed materials are vaporized. The material left behind is a

black, porous charcoal that retains the original form of the wood but has just one fifth the weight,

one half the volumes, and about one third of the original energy content (Amanor et al, 2002). To

prevent most of the wood from igniting during production (pyrolysis), charcoal must be made in

an environment of restricted air flow.

In most of the developing world, charcoal makers use traditional means or build temporary

earthen kilns for each batch (FAO, 2000). The wood is stacked compactly in a pit or on the

ground. The stack is covered with straw or other vegetation, and then buried under a layer of soil.

It is ignited with burning embers introduced at one or more points at the bottom of the stack. The

task of the charcoal maker throughout the ensuing "burn" is to open and close a succession of

vent holes in the soil layer to draw the fire evenly around the wood stack, heating the wood while

burning as little of it as possible.

2.3 Sustainable Forest Management and Charcoal Production

because; it has different interpretations by different people and at different places. In

development thinking, The Brundtland Commission sees it as a system of forest management

that meets the needs of the present generation without compromising the ability of future

generation to meet their needs (Todaro and Smith, 2009). The role of sustainable forest

management in development was echoed by the United Nation’s General Assembly Agenda 21

in 1997.

The UN General Assembly looked at the term based on some key principles such as:

Principle 1

Human beings are at the centre of concerns for sustainable development. They are entitled to a

healthy and productive life in harmony with nature.

Principle 2

States have, in accordance with the Charter of the United Nations and the principles of

international law, the sovereign right to exploit their own resources pursuant to their own

environmental and developmental policies. They have a responsibility to ensure that activities

within their jurisdiction or control do not cause damage to the environment of other States or of

areas beyond the limits of national jurisdiction.

Principle 3

The right to development must be fulfilled so as to equitably meet developmental and

environmental needs of present and future generations.

These principles reinforce the importance of forest resources to nations’ social and economic

development hence the need to sustainably use those resources for the benefit of the present

generation without depriving future generation the opportunity to also take advantage of the
benefits of forest resources. That is, the harvesting of fuelwood for present consumption should

not compromise the ability of future generation in getting access to forest resources for

fuelwood.

Ayodele et al (2009) maintains that sustainable exploitation of wood fuels involves the

production of charcoal without endangering the natural environment. They stressed that

sustainable management of forest is the maintenance of forest area and its species composition

over a certain period of time.

Sustainable fuel wood production and its efficient utilization can be achieved through adoption

of improved energy technologies, with sustained efforts to eliminate waste of limited wood

resources

2.4: Charcoal production system

Usually charcoal is produced in earth mound kilns made by covering a pile of logs with earth

blocks, igniting the kiln and allowing carbonization under limited air supply. Source of labour

for charcoal making activities is mainly household labour.

Charcoal making process that is usually done in public lands involves wood cutting, kiln

preparation, carbonisation and finally unloading charcoal from the kiln. While 13, 10 and 14

days are spent for wood cutting, kiln preparation and carbonization, respectively, unloading the

charcoal kiln takes only about 4 days (Zahabu, 2001).

It was observed that there are special months for charcoal production. These are off-season

months for agriculture and cover the period of June through November. Charcoal production is

usually done to supplement farm income which is the major economic activity. On the average,
each household produces about 35 bags a year, mostly for sale. No charcoal is produced

intentionally for home use except that which is left after sale and usually it is very minimal.

2.5 The Significance of Charcoal in National Development

Environmentalists feel that charcoal production should be stopped because of its destructive

nature as presently practiced (Achard et al., 2002). However, Arnold and Persson (2003) asserted

that both rural and urban dwellers in some developing countries have developed a strong appetite

for charcoal use. Therefore attempts to ban the production or the use of charcoal will be mostly

unsuccessful mainly due to the interplay of socio-economic interests. Since operators can use

free raw materials (wood from natural forests or farm clearing) and turn them into a marketable

commodity in high demand, there is the need to have much respect for the sustainability of the

resource.

The Food and Agriculture Organisation (2000) points out that, charcoal is a very important

energy source for households. Its saturation ranges from 54 to 71 percent in urban areas and it is

the main fuel for more than 1 million families in Sub Saharan Africa. It was also noted as a

valuable ommercial fuel, with an annual turnover of some US$60 million at current market

prices. The FAO assumed that if 80 percent of this amount corresponds to labour payments at

US$1.50 per day, its production and marketing create some 144,000 permanent jobs earning

twice the average minimum wage (US$0.75 per day) of most sub-Saharan African countries as

of the year 2000.

Fuelwood use is dominant in rural households. More than 2.2 million families depend on it for

cooking and heating, and at least 280,000 of them use it for small-scale processing activities,

such as fish smoking, gari making, pito brewing, akpeteshi distillation, pottery making, oil
extraction (from palm fruits, coconut, groundnut, shea butter), thus making a significant

contribution to food preservation, food security and cash earnings for rural and urban people

(FAO, 2000). In addition, there are some 600, 000 small-scale enterprises in commercial

activities, such as chop bars, street food and grills, which depend on fuel wood or charcoal as

their main source of energy. Today wood energy still contributes directly to poverty reduction

(Broadhead et al, 2001) especially in developing countries. In Ghana, it has been estimated that,

wood fuel mainly in the form of charcoal and fuel wood make up 60 percent or more of the total

natural energy consumption (Energy Commission, 2010). More than 2 billion people used fuel

wood or charcoal as energy to cook and preserve food (Broadhead et al, 2001). Wood energy

thus helps households in attaining food security.

A fuel wood shortage has in some cases reduced households to one cooked meal per day in

South Africa (Broadhead et al, 2001). It was also reported that, as much as 575,000 persons are

directly engaged at various levels by wood fuel production, full-time or part-time (paid or

unpaid) across Africa.

On a global scale, Broadhead et al (2001) reported that out of 2 billion people who depended on

wood for fuel mostly in developing countries, only 96 million were able to satisfy their minimum

energy needs for cooking and heating through importations and exportations of charcoal.

In 2001 the FAO began a significant effort to reassess their projections of fuel wood

consumption. The FAO study shows a growing consumption of fuelwood worldwide,

particularly in Africa (Broadhead et al, 2001). According to the FAO (2000), as cited by

Broadhead et al. 2001, the quantities of charcoal needed by 2020 and 2030 in Africa alone is

estimated at 38.4 and 46.1 million tons respectively (See Table 2.2). This shows that charcoal

will continue to be a key source of household’s domestic and commercial cooking energy form
for most rural families in the developing world. The overall quantities involved, and the numbers

still relying on fuel wood will continue to be very large.

The International Energy Agency (IEA) in 2001 also estimated that in 2030, biomass energy will

still account for an estimated three quarters of total residential energy in Africa. Additionally,

due to population growth, the number of people using fuel wood and other biomass fuel demand

will rise by more than 40 percent during 2000–2030 to about 700 million. In Asia, despite

declining consumption, there will still be an estimated1.7 billion users in 2030, while 70 million

would be in Latin America (IEA, 2002).

Additional, Barnes et al, 2002 estimates that charcoal consumption is often growing faster than

firewood consumption. Charcoal is becoming a much larger part of the fuelwood total in Africa

and South America and, growing close to the rate of population growth. Significant variations

between countries exist, but the general trend of decreasing per capita consumption of both

fuelwood and charcoal with increasing income remains (Broadhead et al. 2001).

There is a kind of ladder of energy sources in the urban areas: from firewood at the bottom,

through charcoal, kerosene and LPG, to electricity at the top (Kammen and Lew, 2005). People

generally climb this ladder as their income increases. Therefore charcoal, which is infrequently

used in the rural areas because of availability of free wood, is quite popular in urban areas

because of higher income and other factors such as its lightness and non-smoking nature (FAO,

2000). As income rises, initially more fuelwood is consumed, but beyond a certain level its use

decreases due to its substitution by other fuels (Kammen and Lew, 2005). According to Filmer

and Pritchett (2001), price influences the amount of fuel that is consumed, but only minimally

affects the choice between fuels.

urban cooking energy (Kammen and Lew, 2005) with many transitioning from firewood to

charcoal as the cost of wood increases in urban areas (Barnes et al., 2002). The Charcoal

potential in Southern Africa (CHAPOSA) study estimated that consumption of charcoal grew

during 1990–2000 by 80 percent in both Lusaka and Dar es Salaam. The proportion of

households in Dar es Salaam using charcoal as their primary fuel increased from 50 to 70percent

over the same period.

As indicated in Table 2.3, the growth of some countries requires more charcoal for domestic and

commercial use. It is estimated that for every 1 percent increase in urbanization, there is a 14

percent correspondent increase in charcoal consumption (UNFPA, 2009). The high rates of

urbanization prevalent in the region suggest that by 2050, more than 50 percent of Africans will

reside in cities (UNFPA, 2009). High and ever-increasing demand for charcoal, coupled with

improper forest management, and poor regulation of the trade present a solemn future for forests

in Africa (UNFPA, 2009). In places where this combination of factors exists, the fuelwood crisis

needs to be revisited.

2.6 Environmental Impacts of Charcoal/ Fuel woods Production

Removal of woody biomass for fuel poses some far-reaching consequences on the structure and

functioning of ecosystems worldwide. Fuelwood extraction has been cited for increasing soil

erosion, reducing soil moisture content and decreasing soil fertility as nutrient leaching is

increased (Angelsen and Kaimowitz, 1999). Vegetative cover and subsoil nutrients are also fast

declining through the charcoal activities. These are then associated with more extensive effects

including reservoir siltation, flooding, water shortages due to shifting ground water regimes

(Oguntunde et al, 2008) and biological impacts such as reduced faunal abundance (Ogunkunle
and Oladele 2004) and biodiversity. Additionally, in extreme cases such changes are expected to

culminate in changes in weather patterns and, in drier regions, desertification (Angelsen &

Kaimowitz, 1999), thus making the increased utilization of fuelwood by urban populations one

of the most critical environmental issues sub-Saharan Africa must address.

The subtler impacts of tree-cutting for fuelwood are much more relevant when discussing the

ecological impact of cutting. The most important perhaps is change in species compositions as

cutting influences the survival and reproduction of preferred fuel species relative to less

preferred species. A study done in Nigeria, Burkina Faso, Mali, Niger and Senegal found

substantially different species compositions in farmed parkland and a nearby ecologically

equivalent forest reserves (Kindt et al, 2008).

Tree species which do not coppice may disappear altogether. A study in Senegal noted that many

tree species, particularly large trees have very few seedlings and therefore very low probabilities

of regenerating naturally (Lykke, 1998). Another study in Ghana found that an important

fuelwood species such as mahogany used by 80 percent of households in two villages in the

savannah belt during the past decade was no longer available (Pabi and Morgan, 2002).

2.7 Draft Woodfuel Policies in Ghana

Woodfuels, consisting of firewood and charcoal, constitute the most important energy forms

in Ghana. It contributes about 60 percent of total energy consumption in the country (Energy

Commission, 2010). While woodfuels will continue to provide the bulk of Ghana’s energy

supply in the foreseeable future there is the need to put in place measures to deal with the

negative impacts, such as deforestation and its associated impact on people’s health and the

environment. In Ghana numerous studies and draft policies are being conducted on fuel wood

and charcoal harvesting but with limited targeted interventions and actual implementation in the
country. This makes it practically difficult to regulate activities within the industry, hence the

incidence of severe pressure on both the natural environment and the biodiversity (Energy

Commission, 2010).

On the basis of these realizations, there is the need to ensure better management of wood fuel

supply particularly, from the natural forest or woodlots through effective policies in order to

achieve sustainable use of the resource. Current efforts are on addressing the following:

Sustainability of sources of supply;

Production of efficient technologies for wood fuel production and use;

Substitution of traditional wood fuels with more modern fuels like LPG

Efficiency in the transportation of wood fuel;

Improved packaging and marketing; and

Strong coordination in institutional and regulatory arrangements

The government’s response to addressing the goals outlined above led to the formulation of a

draft wood fuel policy in 2010. The draft policy seeks to ensure sustainability of biomass

resource for the country. The policy categories are the following;

Production Technology

Ghana’s policies on charcoal production tend to focus on raising the efficiency in charcoal

production thereby increasing charcoal yields.

Policy Objective:

To introduce new and innovative ways of producing woodfuel more efficiently and cost

effectively
Policy strategies:

Energy Commission to provide technical assistance and funding for programmes to transfer

improved carbonization technologies and higher levels of efficiency in the production,

distribution and use of woodfuel

Strengthen through technical assistance existing institutions for testing and certification of

improved production and end use technologies for woodfuel

Provide logistical support for the Agricultural Extension Officers to expand technical

assistance and the creation of awareness on the adoption of improved carbonization

technologies to charcoal producers

End-use Technology

The traditional woodfuel stoves have low efficiencies and as well generate a lot of smoke in

the cooking environment which leads to health hazards, especially respiratory diseases. Even

though the improved stove is about 20 percent more expensive than the traditional stoves, the

expected savings on fuel cost is said to be significant to pay off on the investment of the

improved stoves. The policy on end use technology focuses on promoting the adoption of more

efficient wood fuel cook stoves (Energy Commission, 2010)

Policy objectives

To promote the use of more efficient but less expensive woodfuel cook stoves.

To build capacity of improved cook-stoves manufacturers.

Policy Strategies

Liaise and coordinate with relevant governmental and non-governmental agencies to train

artisans in the production of improved stoves

improved production technologies

Create public awareness on energy efficiency and conservation practices and health impacts

(especially on women) in the use of woodfuel

Marketing

The woodfuel supply chain consists of feedstock owners, producers, dealers/transporters, bulk

sellers, retailers and exporters. In the local market places, there are bulk and retail sale dedicated

areas. Even though woodfuel is an inflammable energy product there is no fire precautionary

measure in place for bulk marketing and transportation.

Policy objectives:

To develop a comprehensive database for woodfuel supply and demand

To minimise charcoal dust creation, environmental and health impacts

To control fire outbreaks in the production and handling of charcoal

Policy Strategies

Enact LIs and bye laws for the recycle or compacting of charcoal dust into briquettes, etc.

Create awareness on health impacts of inhaling charcoal dust and other particulate matter and

promote the use of protective mask for commercial handling of charcoal.

Enact LIs and bye laws for improved packaging and labeling of charcoal.

Enforce safety regulations in the production, transportation and marketing of charcoal.

and need to regulate the charcoal industry. The policy seeks to ensure a balance between

charcoal production and sustainable forest management.

METHODOLOGY

3.1 STUDY AREA

This study was conducted in Lafia Local Government Area of Oyo State which lies between

latitude 7° 25’ and 7° 45’ North and longitude 3° 15’ and 3° 35’ East (Oladapo et al., 2008). The

total land area is about 838 km2 with a population of 118,226 according to 2006 population

census (National Bureau of Statistics, 2006).

The local government area experiences the tropical hinterland climate with annual rainfall of

between 1500 and 2000 mm. The relative humidity is over 70% in the morning and falls to

between 50 and 70% in the afternoon.

The mean annual temperature is 27°C and the annual temperature range is 8°C. Its vegetation is

of savanna types most especially guinea and derived savanna, vegetation species include

Panicum maximum, Imperata cylindrical, Andropogon gayanus, Chromolaena odorata,

Eupatorium odoratum, Tithonia diversifofolia, Parkia biglobosa, Vitellaria paradoxa, and

Piliostigma reticulata which are raw materials in production of charcoal.

The major occupation of the people is farming. Substantial parts of the region offer a variety of

opportunity for farming especially in the area with vast expanse of plain fertile land. Other

occupations include metal smelting; cloth weaving and trading which is enhanced by presence of

big markets such as Maya and Towobowo. Charcoal productions in large scale have been on the

increase, most of the charcoals produced are taken to urban centers for sale while smaller

proportion is used locally. The local government area has more than one hundred charcoal depots

where charcoal produced is stored temporally before being sold or evacuated to consumption

centers.
3.2 SOURCES OF DATA

The data for this study was basically primary data collection from the charcoal producers within

the study area with the aid of interview schedule. This will be complemented with secondary

data obtained from past projects, reviews, books and other reference materials.

3.3 SAMPLING PROCEDURE

Random sampling technique where all respondents have equal probability of being selected was

used in the study. In stage one, six villages were randomly selected from the Local Governments

area of the state. In the second stage, 140 villagers were randomly selected in each of the six

villages selected. In the last stage, 4 charcoal producers were randomly selected thereby making

a total of 144 respondents.

METHOD OF DATA ANALYSIS

Data obtained was analyzed using descriptive statistics such as frequency and percentages while

budgetary (gross margin) analysis was used to capture objective (iii) and regression analysis to

capture objective (v).