The economics of smallholder agroforestry: Two case studies

Agroforestry programs must be economically attractive to farmers if they are to be successful. In addressing the economics of an agroforestry system, planners must pay attention to input and output mixes and attitudes toward risk as components of smallholder profitability. From the smallholder's perspective, local market conditions and existing practices may provide a greater indicator of project success or failure than environmental benifits, which may be nearly impossible to quantify. A positive on-farm economic analysis provides a necessary, but not sufficient, indication of the successful introduction of an agroforestry project. This paper makes use of two case studies to demonstrate the need for and shortcomings of economic analysis as applied to agroforestry projects.