Decreasing uncertainties and reversing paradigms on the economic performance of agroforestry systems in Brazil

•Agroforestry enhances the generation of income and the recovery of degraded areas.•Agroforestry practice can be a viable alternative to family farming.•The volatility of emerging markets influence on return on investment. The return on investment in agroforestry depends mainly on meteorological and market variables, both uncontrollable. For this, it is necessary to prepare investment projects to verify the feasibility before executing them, minimizing the risks and uncertainties to the farmer. In this sense, the study aimed to identify the economic and financial viability of a biodiverse agroforestry system to boost income generation and recovery of degraded areas. For this, it was decided to model a biodiverse agroforestry arrangement with the purpose of meeting the new Brazilian Forest Code, Law no. 12,651 of 2012 and promoting economic-financial return to the family farmer in the state of Mato Grosso do Sul. The study method considered the following capital investment valuation techniques: Net Present Value (NPV), Internal Rate of Return (IRR), Equivalent Uniform Annual Worth (EUAW), Discounted Payback Period (DPP), Profitability Index (PI), Modified Internal Rate of Return (MIRR), Benefit Cost Ratio (BCR) and Capital Asset Pricing Model (CAPM). In addition, sensitivity and risk analyzes were developed using Software R (R Development Core Team). There were 10,000 interactions between variables of productivity, price and variable costs. The results demonstrate that the agroforestry system is significantly viable regardless of whether the farmer owns rural property, since net sales revenues can remain higher than the costs over 20 years.