CARE Ltd. Contributes to Incentive Scheme for Encroachment Bush Management

Bush Encroachment in Namibia

Conversion And Resource Evaluation Ltd. [CARE Ltd.] worked with Dagmar Honsbein (Ministry of Finance, Namibia and policy expert) and the Polytechnic of Windhoek, Namibia on a study funded by the Namibian Agronomic Board [NAB] on the cost-benefit analysis of removing encroachment bush from farmland in Namibia.

Bush encroachment has increased drastically over the last 30 years. 26 million hectares of prime agricultural land are currently encroached by bush. The Bush Encroachment Research, Monitoring and Management Project in 2004 showed that bush thickening results in a reduction of the land’s carrying capacity by up to 80% in some areas. In addition, water-use efficiency of natural rangelands has become extremely poor in the encroached areas, which increases the frequency of artificial drought events in a drought-prone country. Bush encroachment is commonly regarded as part of the desertification process.

The overall objective of the work was to identify a variety of appropriate bush encroachment management practices, both current ones and promising new practices, based on a cost-benefit analysis assessment incorporating economic, ecological and social criteria.

Energy Production from Biomass

The Use of Encroachment Bush

CARE Ltd. carried out comprehensive cost-benefit analysis [CBA] for a range of bush clearance (manual cutting, aerial and manual arboricides, stem burning) and cattle stocking scenarios and did a nominal (influenced by inflation) discounted cash flow forecast for 20 years to estimate the Net Present Value [NPV] and assess the economic viability of the scenarios. The livestock farming enterprise was assumed to benefit from increased grazing available over time.

Subsequently the following value added options for the cleared bush including energy production from biomass were evaluated:

• Domestic wood fuel and non fuel uses [fencing, etc.]
• Charcoal production [small bush kilns and commercial slow pyrolysis]
• Small-scale downdraft gasification [0.25-1 MWe]
• Fast pyrolysis for liquids for subsequent power generation [0.25-13 MWe]
• Fluidised bed combustion for power generation [1-70 MWe]
• Co-firing coal/bush for power generation [3.5-93 MWe]

The main results from the CBA study were the following:

• All bush clearance scenarios for the three predominant cattle farming areas without income from encroachment bush sales showed negative NPV values, indicating that bush clearance is not economically feasible.
• The breakeven selling price of bush varies between N$7.5 to 35 /t [€ 1- 4 /t] for the different areas and treatments. Bush sales at farm gate at N$124/t [€10/t] or higher lead to clearly profitable encroachment bush clearing projects.  However, if the full value chain is to be considered care should be exercised at setting wood sales at an arbitrary price, i.e. higher than N$372/t [or €30/t].
• If bush sales cannot be secured above the determined breakeven selling price, then the no clearance scenarios prove to be superior with positive NPV.
• If transport costs are included in the bush price, the transport distance that leads to zero NPV varies between 45 to 58km, 107 to 120 km and 169 to 182 km for bush prices of N$124, 248 and 372 /t [€10, 20 and 30/t] respectively. 
• With regards to the use of bush, there is a ready, but not quantified market for firewood; however this is seasonal and variable.
• Using bush for commercial charcoal production is possible, although this ultimately depends on the charcoal sale price; however consumer demand for environmentally friendly products could make higher prices acceptable. 
• None of the thermal conversion options considered for power generation would be economically viable in Namibia with the current industrial electricity prices. Using bush for small-scale decentralised gasification for power generation is the nearest to being economically viable (1 MWe, N$1.33-1.63/kWh).  Heat sales would make it commercially viable and therefore options like using the heat to drive a refrigeration cycle should be considered. 
• Each farm needs to have its own detailed CBA taking into account all local factors in the determination of the overall viability of a range of options.

These results will be used by NAB to direct future policy in invader bush clearance and utilisation.

NPV of various bush clearance options

Value added options for Encroachment Bush