Economics of Agroforestry TOTAL KENYA TREE CONFERENCE 2015 16 th -17 th July, 2015 Hilda Kegode
Feeding the world Global challenges 9 billion people in 2050 Fuel Over 3 billion people use fuelwood for cooking Improving the living conditions of the rural poor Over 1 billion of those living in rural areas are poor
The big question How can we increase food availability and reduce poverty without depleting the natural resource base?
What is agroforestry? An integrated approach that reaps benefits from combining trees and shrubs with crops and/or livestock Combines agricultural and forestry technologies to create more productive, profitable, healthy and sustainable land-use systems
Who we are The World Agroforestry Centre (ICRAF) Part of the CGIAR Consortium Dedicated to generating and applying knowledge to stimulate agricultural growth, raise farmers incomes and protect the environment through agroforestry research Guided by three broad development challenges poverty alleviation that entails enhanced food security and health improved productivity with lower environmental and social costs resilience in the face of climate change and other external shocks
Why agroforestry It is an ancient practice, but increased interest today because: -Higher poverty levels in developing countries -Increased tropical deforestation -Land degradation and scarcity -Growing interest in alternative farming systems
Value of agroforestry At the household level, profitability of AF is measured in terms of financial benefits and costs, risk management, accessibility to markets of AF products Analyzing economics of AF systems difficult because of: i. Complexity of products (some benefits are unquantifiable) ii. Time period between when trees are established and impacts are measured (costs and benefits must be brought into a single time period through discounting or compounding)
Value of agroforestry Economic values ascribed to agroforestry -Sharing fixed costs because of joint production relationship -Reducing the initial time period required to produce income from land exclusively devoted to tree production -Diversifying income sources and spreading risks related to monoculture Three different relationships between agroforestry and crops Supplementary: +, 0 Complementary: +, + Competitive: +, -
Benefits of agroforestry systems Increases farm profitability by increasing output of Food Fodder Fuelwood Results from either increasing biophysical output or reducing input costs Enhances livelihoods by providing new products that add to the diversity and flexibility of the farming enterprise Honey, fruits, timber, herbs, fibre
Benefits of agroforestry systems - Controls soil erosion; conserves soil moisture; improves soil texture and overall soil fertility; mitigates against the effects of flooding - Environmental services (windbreaks, soil water conservation); contributes to mitigating the effects of climate change; cleaner air, carbon sequestration, biodiversity conservation - Aesthetic values
Costs Costs are higher and mostly borne in initial years of establishment of AF systems Land agroforestry requires land Time time required to plant and manage trees on farm Seeds and/or seedlings cost money Tree management costs -Planting -Weeding -Nurturing - Watering - Manuring - Pruning
Costs Opportunity costs of labour and time diverted away from other household or farm activities Opportunity costs of land diverted from crop production to tree planting
Examples of business enterprises Tree nurseries Direct sales of fruits, fuelwood, seeds, timber, fodder Value chain e.g. of fruits Honey production Livestock products e.g. milk Gum and resins Fibre > basketry Sustainable charcoal production Payment for ecosystem services e.g. carbon, water and water conservation
Challenges facing AF development Lack of land tenure and small plot sizes Long time period before realization of benefits discourages investment Access to quality seeds and/or seedlings Lack of information and training Poor linkage to markets for some outputs Trees felled prematurely, susceptible to browsing
Possible solutions Create more awareness about agroforestry Improve accessibility to seeds/seedlings Training farmers in entrepreneurship and business skills Link farmers better to output markets Create a better policy environment to encourage investment
Conclusion Agroforestry has had positive impact on the asset base and livelihoods of poor households Benefits may take long to make impact but there is long-run profitability More investment is required in promoting AF and encouraging its adoption Works cited: FAO, 2005. Realizing the Economic Benefits of Agroforestry: experiences, lessons and challenges in State of the World s Forests, 2005, pp 88-95, FAO, Rome, Italy W.B. Kurtz, H.E. Garrett and J.P. Slusher. Economics of Agroforestry, School of Natural Resources, Department of Agricultural Economics, University of Missouri-Columbia
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