INVESTING IN TREES AND LANDSCAPE ... - PROFOR

In this context, investment opportunities for restoration of productive African landscapes through treebased
enterprises are extremely attractive. In some situations, investment by large-scale producers
can result in a confluence of interests, generating multiple wins for the economy, for employment,
and for the ecological integrity of whole landscapes. In many other situations, tens of millions of
African households can ably serve global markets with a wide array of agricultural commodities and
natural products that offer profitability at scale to the farmer and investor alike.
1.2 MAJOR TREE-BASED INVESTMENT OPPORTUNITIES
Many of the tree-based technologies are viable investment opportunities now and will remain so
in the future. In addition, some nascent investment opportunities have high potential. This section
describes a number of these opportunities. Data on tree products—with regard to forecasting,
prices, production, and profits—are spotty, so some of the information presented here is limited to a
particular species or location. Certainly, an investor would have to do more analysis in terms of due
diligence, but this section identifies a number of promising opportunities.
Tropical Fruit
The tropical fruit market has evolved significantly since the 1980s as a result of rising incomes,
improved technology, and evolving international agreements (Huang 2004). Tropical fruit crops
are important for food security and cash income in many developing countries, from a nutritional
perspective and owing to their contribution to farmer income and export earnings. The value of
international trade of fresh tropical fruit in 2008 was $4.5 billion, compared with $7.5 billion for
bananas, $6.2 billion for apples, and $3.3 billion for oranges. Processed tropical fruit transactions
were valued at $1.9 billion in 2008 (FAOSTAT). As major players in global trade, Japan, the United
States, and other developed countries expanded their imports of fruit juices significantly after the
mid-1990s, when citrus and noncitrus juice import restrictions were liberalized (Feleke and Kilmer
2009). About 90 percent of tropical fruits produced globally are sold and consumed within the
producing countries, so the traded value is but a small fraction of the value of production.
Africa has witnessed a massive production increase in fruits such as mangoes, citrus fruits, and
bananas. African production of fruit and vegetables grew by 9 percent between 1990 and 2003.
Output was anticipated to increase from 961,000 metric tons (MT) in 1998–2000 to 1.1 million
MT by 2010. Currently, Africa accounts for 16 percent of global papaya production, 11 percent of
mango production, and 10 percent of avocado production. However, the share of fruit exports from
Africa is low and, despite massive production dating back to the 1950s, export share has been
dwindling since the 1980s, while that of Asia and Latin America has increased, owing to variable
quality of fruits from large numbers of producers that do not comply with export requirements and
an oligopolistic market structure that favors a few exporters. For example, in 2005, there were only
four private exporting companies in Uganda, all of which focused exclusively on exportation of raw
cocoa (Gibbon, Lin, and Jones 2009).
Projections indicate that global production of tropical fruits will increase from 70 million tons in
2006 to 81 million tons in 2015, an increase of 16 percent in a decade. Developed countries are
expected to continue to dominate import demand for fruits by 2015. Annual export growth rates in
the near term are expected to be 1.4 percent for mangos, 2 percent for avocados, and 5.6 percent
Chapter 1. TREE-BASED AND OTHER LAND MANAGEMENT TECHNOLOGIES FOR LANDSCAPE RESTORATION AND LIVELIHOOD IN AFRICA
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