Financial Analysis of Agroforestry Practices

Background

The analysis of economic of agroforestry is more complicated than annual crops because it involves trees and crops and because there is usually a period between establishment and when impact can be measured. This chapter analyses the financial returns of farmers in three practices: fodder shrubs (Calliandra calothyrsus) in Kenya were established to increase mil production; rotational woodlots in Tanzania were implemented to provide firewood (Acacia crassicarpa) and improved fallows (Sesbania sesban) were established in Zambia to increase fertility. 

Conclusions & Takeaways

The authors highlight that even when the three projects involved increased costs in relation to existing alternatives, the three of them showed overall increased NPV. Costs were low, authors don’t consider they require access to credit and benefits were stable to sentitivity analysis.