Financial viability of canarium nut production scenarios for smallholders in Vanuatu: a literature review and sensitivity analysis

Abstract Canarium indicum L. is a species of high importance in Vanuatu for its multiple use but particularly for its nuts. Nevertheless, the canarium nut industry is still underdeveloped, and there is the need to improve production systems that involve smallholders, the major source of the product. This paper aims to assess the potential of canarium growing by smallholders in Vanuatu. We carried out a review of available literature on canarium nuts in Vanuatu and performed financial and sensitivity analyses of canarium tree growing at the household level under four scenarios: sale of nut-in-shell, sale of kernel-in-testa, sale of dried kernel using solar dryer, and sale of dried kernel using electric dryer. The literature demonstrates great potential for the canarium nut industry but also highlights its challenges, which were confirmed in the financial analysis. The financial returns for the different scenarios, the nature of labour provided, nut processing limitations, and potential market opportunities are discussed. All base-case scenarios resulted in negative NPVs. Current prices do not pay off investment in canarium growing if labour is costed at the minimum wage of the country. Even with this significant reduction in labour needs for processing, NPVs remain negative. However, smallholders might place a non-financial value to the activity. Prices paid for all canarium products must increase for a profitable investment. A minimum price of USD 0.319 kg −1 is needed for a positive sale of nut-in-shell. There is potential for value adding if infrastructure is available and if smallholders are interested. Challenges and opportunities for canarium nuts discussed in this manuscript are also relevant for other non-timber forest products in other remote locations in the tropics.