Background: The area of Eucalyptus plantations has expanded greatly and the species dominates many rural and urban landscapes as it suits the limited resources of smallholder farmers, yields higher income than other tree crops and increasing demand for woodlot products. The study conducted in Wogera District within three purposively selected kebele administrations. Smallholder farmers at the study area are converting their crop land to Eucalyptus plantation. Therefore there should need to deal the pushing factors for the allocation of Eucalyptus. This study aims at identifying the factors influencing decision of land allocation for eucalyptus woodlot production, and estimating the land expectation value.
Method: Cross sectional data was collected through semi-structured interview schedule. Data analysis employed descriptive statistics and Faustman formula.
Results: The results of the household survey revealed that land degradation and neighbor influence are the main factors for smallholders’ land allocation decision for Eucalyptus plantation. Therefore, as per the results, most of the crop land has been converted to Eucalyptus plantation. However, this a rapid land conversion issue made a threat on most farmers in related to losing of indigenous crops so as it leads them to be food insecured.
Conclusion: Farmers in the study area are rational in their land allocation for production of either annual or perennial crops including Eucalyptus woodlots. Finally the study recommends government intervention in the separate land management issue is mandatory to make balance in production of both Eucalyptus and crops.