dd ee zz riri oo hh utut AA e e rr uu osos THE COSTS AND BENEFITS OF clcl ss DiDi AGROFORESTRY TO FARMERS c c blibli uu PP Dean Current Ernst Lutz Sara J. Scherr dd ee zz riri oo hh utut AA e e Deforestationg, rowings carcityo f treep roducts, and environmentald egra- rr uu ss dation have createds eriousp roblemsf or rurall and use in many developing oo clcl countries.A groforestry,a system in which/w oody perennialsa re grown on ss DiDi the same land as agriculturacl rops or livestock, has been increasinglye n- blic blic listed in the campaignt o meet these threatst o the rural economy. uu Cases tudieso f twenty-onea groforestryp rojects in six CentralA merican PP and two Caribbeanc ountriesf ormed the empiricalb asis for the study de- scribed in this article. A focal point of analysis was the profitability of agroforestryf or farmersa s a cruciali ncentivet o adoption. dd ee The findings indicatet hat many agroforestryp racticesa re profitableu n- zz oriori der a broad rangeo f conditionsa nd are thereforel ikely to be widely appli- hh utut cable.S uccessfulp rojectsh ave worked with local communities,r esponding AA e e to local needsa nd preferencesa nd offeringf armersa broadb asketo f species rr uu and systenmfsr om which to choose. Demonstration plots and the use of ss cloclo paratechnicianhs ave beenl ow-costa nd effectivem eanso f technologyt rans- DisDis fer, and applied researchh as been imiportanitn identifyingt echniquesa nd c c practicess uited to the region. Other findings have identifiedg overnment ubliubli regulationo f tree harvestinga nd insecurityo f tenure-though not lack of PP title in itself-as disincentivesto adoption. D eforestationi n Central Americaa nd the Caribbean has meant in- dd ee creasings carcityo f trees, a principals ource of fuela nd construction zz oriori materialsi n rural areas, and contributest o environmentald egrada- hh utut tion of fragilea gricultural lands. In the eight countriesw here the empirical AA e e part of our work was done, the forest cover declinedb etween 10 and 24 urur percent during the 1980s (table 1). In the two countries with the highest ss oo populationd ensity (El Salvadora nd Haiti), only 6.2 and 1.3 percent of for- clcl DisDis est cover remainedb y 1990. c c blibli uu The World Bank Research Observer, vol. 10, nio. 2 (August 19951, pp. 151-80 PP 1I 1 (D 1995 The International Bank for Reconistruction and Development/THE WX'ORLDBA NK Table 1. Case Study Countries: Key Indicators Forest Change in Rate of Reforestation Rate of GNP per Forest cover forest defores- as percentage Population population capita cover in per cover tation of area densitv growth (1992 1990 capita 1981-90 1981-90 deforestation Country and region (pop/kn 2) (percent) I.S. dollars) (percentage) (hectares) (percentage) (percent) per year' Costa Rica 62.7 2.8 1,960 28.8 0.5 -23.8 2.9 7.5 Dominican Republic 149.0 2.1 1,050 22.5 0.2 -24.2 2.8 1.1 El Salvador 257.1 1.4 1,170 6.2 O.Ob -16.8 2.2 16.1 Guatemala 89.0 2.9 980 39.3 0.5 -15.6 1.7 3.1 Haiti - - - 1.3 0.01 -10.3 4.8 73.3 Honduras 48.2 3.3 580 41.2 0.9 -19.4 2.1 0.4 Nicaragua 30.0 2.7 340 50.8 1.6 -16.8 1.9 1.5 Panama 32.5 2.1 2,420 41.1 1.3 -17.0 1.9 0.8 Total 77.3 - - 36.9 - -18.1 - 2.3 Latin America and the Caribbean (total) 24.2 1.9 2,180 56.2 2.3 -7.1 0.8 5.0 - Not available. a. Deforestation is defined as change of land use from forest to other use or depletion of forest crown cover to less than 10 percent. b. Extremely small values. Souirce: World Bank 1994; Bli) 1993; FAO 1993. One response of governments, backed by nongovernmental organizations (NGOs) and international donors, has been to encourage agroforestry: a land use system in which trees, shrubs, palms, and bamboos are cultivated on the same land as agricultural crops or livestock for economic reasons but also for envi- ronmental ones, to replenish wood stocks while upgrading land through dimin- ishing erosion, water loss, and other natural phenomena. The system includes managing natural regrowth; seeding, planting, and maintaining trees as border plantings; interplanting in agricultural crops; woodlots; and home gardens (see the glossary in box 1). Agroforestry complements and reinforces traditional re- forestation efforts by reducing the pressure on remaining natural forests and providng environmental services. Traditional agroforestry practices already play an important role in many farming systems-fruit trees are planted in home gardens, pastures, fields, and among permanent tree crops; live shrubs and bushes are used for fencing; coffee and cocoa plants are cultivated in the shaded areas under existing trees; and fallow (shifting cultivation) systems are maintained that sequentially rotate trees with crops. Recently introduced agroforestry systems include woodlots, taungya, and managed woody fallows for forest tree production. For farm areas devoted to perennial crops, systems include deliberate perennial intercrops and home gar- dens. The main systems introduced for annual cropland are trees planted in lines on boundaries or on terrace risers, alley cropping of annual crops between tree rows, barrier hedges along the contours of fields, and windbreaks. Although agroforestry activities have attracted solid support and are likely to receive further substantial investment from public agencies, NGOs, and interna- tional donors, they have generally been poorly documented. Monitoring of projects, where it exists, has been weak or focused narrowly on operational concerns (Scherr and Muller 1991; Current, Rivas, and G6mez 1994). Most research and analysis of agroforestry systems have dealt with the physical and biological aspects, neglecting systematic analysis of agroforestry's economic contributions at the farm level (Swinkels and Scherr 1991), even though the absence of a profit motive may have been a root cause of project failures (Tschinkel 1987; Murray 1991). Nor has there been much comparison of differ- ent extension approaches and of their influence on farmer adoption of agroforestry (Vergara and MacDicken 1990). Thus, important questions remain about which strategies to pursue for agroforestry development. Which agroforestry practices, under different envi- ronmental and economic conditions, are profitable for the farmers? Under what conditions are farmers willing to invest in agroforestry systems oriented to envi- ronmental rehabilitation? Do certain conditions justify subsidies and nonmarket incentives? What level and type of field extension assistance are needed to dis- seminate new agroforestry species and information and encourage adoption? What are the principal constraints on farmers that discourage further adoption of agroforestry? What kinds of policy action would encourage adoption? 153 Dean Current. ErnzstL utz, and Sara J. Scherr To find answers to these questions, this study analyzed the experiences of twenty-one projects in eight countries of Central America and the Caribbean (see figure 1) and drew together the lessons to guide the design and execution of future efforts. Consultants from the region and staff at the Tropical Research Center for Research and Education (CATIE) in Costa Rica carried out eight coun- try studies on the basis of an earlier pilot study (Current and Lutz 1992) under the overall direction of the World Bank, with methodological support from the International Food Policy Research Institute (IFPRI). Each study included a coun- try overview and case studies of two or three selected agroforestry projects, analyzing in detail the technical interventions and adoption in each project, the Box 1. Glossary Agroforestry: The deliberate use of woody perennials (trees, shrubs, palms, bamboos) on the same land management unit as agricultural crops, pastures, and animals. This may consist of a mixed spatial arrangement in the same place at the same time or a sequence over time. Alley cropping: Cultivation of annual crops between rows of trees or hedgerows. Some- times called hedgerow intercropping. Boundary planting: Lines of multipurpose trees or shrubs planted along borderlines and boundaries dividing properties or land uses. Contour planting: Rows of trees or shrubs planted along the contour of the field. Home garden: A complex collection of woody and herbaceous plants deliberately grown in small plots in or near home compounds, often associated with the production of small domestic animals. Live fenceposts: Use of living trees, rather than dead posts, as fenceposts. In Central America, these are usually used to support barbed wire fencing. The fenceposts may also be managed for fuelwood or poles. Multipurpose trees or shrubs: A woody perennial grown to provide more than one product or service. Taungya:A system in which new forest plantations are established together with food and cash crops, which continue to be intercropped until shaded out by the maturing planta- tion. Trees intercropped with annual crops: Closely spaced trees planted or maintained in crop- land for their products or their positive effects on associated crop production (for ex- ample, nitrogen-fixation or microclimate improvement). Trees intercropped with perennial crops: Closely spaced trees planted or maintained in perennial crops for their products, or their positive effect on associated crop production (for example, shade or nitrogen-fixation). Windbreak: Strips of trees or shrubs planted to protect fields, homes, canals, or other areas from wind and blowing soil or sand. Woodlot: Stands of trees planted and managed to produce various tree products, associ- ated plants or services. Woody fallow: Fallow is land resting from cropping, which may be grazed or left unused; it is often colonized by natural vegetation. For woody fallows, the fallow is left uncul- tivated for sufficient time for woody plants to become predominant; farmers may en- rich, manage, or harvest from this woody fallow. Note: This glossary is based on Rocheleau,W eber, and Field-Juma 1988. 154 The World Bank Research Observer. vol. 10, no. 2 (August, 1995) Figure 1. Approximate Location of Case Studies, Central America -. v)fi S 8' -2 ' HlsjANloA ' IBRD2 6984R HI2S PANIOLA 2 MEXICO I CARIB fEAN c I ,~~~! ~~~~~ *. - ~H*2A' ITI .1lBELUZ£> SEA - o * , 16- _ ) j ,.;Gulfof >j- u REPUBLIC /H_ .o' nduras 1 _764 - _ 72-? 70e GUATEMALA- ' ' * A.,.. . . i0. ;* * HONDURAS *4 -. '--- * ELS*LAU6DOR EL.A\DON ICARAGU~A 'CASE STUDIES P A CP AI CFIF II CC, \tsL'E Mrnoguo '--w ROcrUgNo\D AlRIES 3, X O C E A N *COTX OCEAN ~~~~~~COSTA\ O 100 200 300 KILOMETERS V ~~' El ". l S t_RICAf ' Coho --_ 0 100 200 MtES ~ P A ON A\ Tio6c nb ooun nthdiasm riecasopd,lS oronfd ,e WnomnepIoiOYeN#, W 0po 5 jneo ynf st hirw-W eOraBtooWrlGen k"vapz xt_ , pi RtouE9 aoy0 4nt -ont ihwaIoS vrniy or any. ndoyr.mt anooso'aM BI or ccepl o , ACOLOMBIA 8I0. JIk 1995 project's economic performance at the farm level, its approach to extension, and policies that influenced the implementation of the project and its adoption by farmers. National workshops and a regional workshop to review prelimi- nary findings were held for farmers, extension agents, project managers, and decisionmakers, with representatives from farmer organizations, NGOs, national agencies, and international donors. To our knowledge, this effort was the first large-scale study of farm-level profitability of agroforestry in the tropics. The specific objectives of the study were to: * document earlier agroforestry efforts and their lessons for tree planting on farms; * determine costs and benefits of agroforestry systems from the farmers' perspective; * determine the relative advantages and disadvantages for farmers of different types of agroforestry systems under different site and resource conditions; and Dean Crrent, Ernist Luitz, and Sara I. Scherr 155 * identify the effects of institutional factors and government policies on the adoption of agroforestry systems. This article summarizes the principal findings of the country studies, compar- ing them, where possible, with the experience of other regions. Beginning with a brief background history of agroforestry in the region, the article goes on to describe the investigative methods used, to outline the characteristics of the projects reviewed, and then to discuss the findings on household benefits, the pros and cons of different extension approaches, and the effects of different policies. Evolution of Agroforestry in Central America and the Caribbean Numerous projects have been established in the past two decades throughout Central America and the Caribbean to promote communal and individual tree plantings and agroforestry systems. Agroforestry development in the region gen- erally reflected-and in some cases led-international trends in thinking and action about agroforestry. In the late 1970s and early 1980s, when the emphasis in forestry was on fuelwood production, agroforestry systems were used to plant trees on farms for fuelwood (Eckholm 1975; King 1979). Fuelwood projects were implemented worldwide (U.S. Comptroller General 1982; USAID/ROCAP 1979), and research was undertaken on fuelwood species (National Academy of Sciences 1980). But the response to fuelwood projects in rural communities was discouraging: farmers were unenthusiastic about contributing the sizable invest- ment in labor-for planting, felling, sectioning, and splitting-needed to pro- duce a good with a relatively low market value. Furthermore, fuelwood has traditionally been collected as a free good (even on private lands), which less- ened its attraction as a product for farmers. In El Salvador, with its high popu- lation density and low forest cover, a recent national study showed that only 33 percent of the rural population considered the acquisition of fuelwood a prob- lem (Current and Juarez 1992). Subsequently, the emphasis shifted from fuelwood production to the concept of multipurpose tree species in agroforestry systems. Establishing multipurpose trees on farmland can provide a wide range of benefits.' For farm families, they may help meet household consumption needs, provide a source of income, or improve land husbandry to ensure future production. In addition to fuelwood, multipurpose tree species supply green manure, wood for construction, fence posts, and raw materials for local or industrial processing, and cash income and savings from any of these. Conflicts do arise between cultivating trees and rais- ing agricultural crops, but many agroforestry systems allow farmers to integrate trees into their farming systems, with only small drawbacks for crop produc- tion; in some cases the trees increase overall farm productivity (Gregersen, Draper, and Elz 1989; Raintree 1991). 156 The World Bank Research Observer, vol. 10, no. 2 (August, 1995) Social benefits from establishing trees on farms can be significant and are often cited to justify tree-planting projects supported by national governments and donors. Trees can provide protection from soil erosion generated by water and wind (Lutz, Pagiola, and Reiche 1994), thereby protecting future produc- tive potential and preserving important watersheds that feed hydroelectric projects and supply water for population centers. Trees provide wood products for the farm, thus relieving the pressure on natural forest areas (Current and Lutz 1992); they provide raw materials for rural industries that generate employment for rural communities (Arriola and Herrera 1991; Campos, Rodriguez, and Ugalde 1991); and they also provide environmental and social benefits, such as wildlife habitats, water retention capacity, or shade for dwellings. Regionally, the most important applied research initiative has been the Tree Crop Production (Madelefia 3) Project, financed by the U.S. Agency for Interna- tional Development (USAID) Regional Office for Central American Programs (ROCAP) and executed by CATIE (Belaunde and Rivas 1993). Other internation- ally important research programs included those of the Forestry Fuelwood Re- search and Development (F/FRED) Project in Asia (French and van den Beldt 1994), the International Center for Research in Agroforestry (ICRAF) (Steppler and Nair 1987), and the Nitrogen Fixing Tree Association operating around the world (NFTA 1993). Numerous national and international NGOs have also under- taken applied research and extension activities (Cook and Grut 1989; Nair 1990). The shift in emphasis toward multipurpose tree species was accompanied by a corresponding realization that a project is more likely to succeed if project planners consult local communities about their own perceived needs and then design projects to meet those needs instead of imposing schemes that the com- munities may not consider a priority. In line with this thinking, research was focused on traditional agroforestry systems (Budowski 1987; Reiche 1992), and many forestry agencies have been changing their emphasis from "guarding" the forest to helping communities produce tree plantings which, in turn, may help protect the remaining forest. The stronger community role in project and tech- nology design has parallels in Africa and Asia (Kerkhof 1990; Budd and others 1990; French and van den Beldt 1994; Raintree 1991). Methods of the Study The study compared the economic and technical performance of the most prevalent agroforestry systems used in the twenty-one selected projects. Analysis of Household Benefits The analysis identified the role-both intended and actual-of the trees in the household's livelihood strategy-for household use, to generate cash income or 157 Dean Ctsrrent. Ernst Lutz, anzdS ara J. Scherr savings, or as insurance. It then assessed the actual effects of the agroforestry practice on labor, land, and other household resources (including household risks) and used cost-benefit and related analvses to assess the profitability of the agroforestry practice relative to farmers' alternative systems, using sensitivitv analysis to determine the range of conditions (such as input or output prices and productivity levels) under which an agroforestry technology was likely to be profitable (Scherr, forthcoming). The data on inputs, outputs, costs, and prices required to develop the multivear agroforestry enterprise budgets were generated in various ways, among them recall data and plot measures from single-visit farm surveys and multivisit stud- ies of farms in the case studies, and results of on-farm research trials in the project area. Costs and benefits were valued at the prices that these farmers actually face, with no attempt to adjust for economic distortions. Farmers were interviewed about the means and the opportunity costs of using land, labor, and capital resources in agroforestry. They also provided qualitative assessments and anecdotal information on social and environmental costs and benefits; quan- titative information was generally not available. The study deliberately emphasized household benefits; because farmers make their decisions on land use in light of their own objectives, production possibilities, and constraints, understanding their incentives is essential to understanding patterns of resource use and to formulating appropriate re- sponses to problems. Ultimately the success of any agroforestrv system de- pends not on the project planners' perception, but on the farmers' percep- tion of its costs and benefits. Furthermore, the farm-level approach focuses sharply on effects on farm productivity, which are particularly important in this region. (This is not to minimize the importance, in some situations, of off-farm effects.) Analysis of Technology Adoption Researchers collected information on indigenous agroforestry practices, farming systems, land use problems, and the farmers' criteria for selecting agroforestry interventions. Characteristics of technology adoption (the sys- tems selected, the extent, durability, and determinants of adoption) were assessed through informal farmer surveys. Formal and informal surveys of farmers, focus groups, and investigations by project staff identified specific problems, and researchers assessed experience of the project so far with se- lection of tree species, tree-crop interactions, and methods of establishing trees. Policy Assessment The study identified policy influences on agroforestry adoption, project imple- mentation, and the profitability of agroforestry from several sources. Country 158 The W'orld Baniik Researcb Observer, vol. 10, no. 2 (August. 1995) overviews drew on public documents, key informants, and unpublished litera- ture. Project case studies relied on interviews with farmers and project staff as well as project reports for policy insights and documented constraints caused by specific legal, institutional, and policy problems. The national and regional work- shops provided forums for project executives and policymakers to develop spe- cific recommendations for policy action. Characteristics of Projects Reviewed The twenty-one projects analyzed were selected on the basis of the age of the project (older projects being preferred); the availability of economic data; the willingness of project staff to cooperate in the study; and the size of the farms. The focus was on smallholders: average farm size was under twenty hectares in most projects, under five hectares in five projects. Together, the projects cost approximately US$150 million and represent more than 50,000 farm house- holds; they cover a variety of agroforestry systems and site and socioeconomic conditions (table 2). Table 3 summarizes key elements of the extension strategies used bv the projects. Such strategies can generally be divided into four broad categories: using existing forestry or agricultural extension networks; training and pro- viding logistical support to extension agents hired specifically for the project; integrating project extension agents with national extension agencies; and supporting extensioni staff organized and managed by NGOs. The projects studied represented all four of these categories. The most common methods used to provide information and training to the farmers were visits by exten- sion agents or paratechnicians, field trips and training courses, and demon- stration plots. Six projects provided marketing assistance. Most projects used material incentives (free seedlings or other inputs), and many others used cash incentives, credit, or food-for-work incentives. (Food for work has been used for communal and privately owned nurseries, as well as for tree plant- ing on both communal and private lands. I'lant survival rates have been much higher for private nurseries and private tree plantings.) Incentives and Deterrents for Adopting Agroforestry The study assessed the profitability of agroforestry at the household level in light of financial benefits and costs, risk management, and the nature and acces- sibility of markets for agroforestry products. The success or failure of the effort to promote agroforestry depends ulti- mately on how many farmers take up the system and persevere with it. Per- ceived profitability for the household is a critical influence on a farmer's initial decision to include agroforestry in the farm's activities. The systems adopted Dean Current. Ernst Lutz, and Sara J. Scherr 159 Table 2. Farming and Agroforestry Systems in the Case Study Project Agroforestry Principal tree systems species Project and country promoted uttilized Community Agricultural Center-Hojancha Costa Rica A,E,H 5,21,31 PRODAFF orestry /Agroforesrrv Development Project Costa Rica A,E,H,L 5,11,17 COOPELDOS-Windbreaks for coffee and dairy products Costa Rica F 9,14,15,19 Traditional Agroforestry Systems of the Humid Tropics Costa Rica A,C,L 13,17,20 Agroforestry Support to Low-Income Rural Communities El Salvador D,E,G,H,1 18,20,24,31 Community and Family Nursery Program El Salvador D,E,G,H 8,18,31 Agroforestrv Program of DIGEB(OS/CARE/PeCacoer ps Guatemala A,C,D,G,L 3,9,17,18,20, and DlGEsos/cATIE/Madeleha 3 Guatemala 22,25 La Maquina Settlement Guatemala E,G,H 6,18 Development of the Broadleaved Forest (BLFDP) Honduras A,C,E,G 20,23,29 CoHASAR ural Development Honduras B,E,H 20,24 Sierra de Omoa Management Unit Honduras A,J 13,20 Land Ulse Planning (LUPE) Honduras C,D,E.H 13,20 Control of Erosion in the West and Reforestation Nicaragua F 18,24,30 Support to Farm Forestrv and Rehabilitation of Windbreaks Nicaragua E,F,G,H 18,20,24,30 Demonstration Farm "La Esperanza" Nicaragua C,E,L 7,8,16,20,27 Agroforestry for Community Development (INRENARE/CARE) Panama B,E,F,G,H 2,18,24,26 Food Production and Commmuniry Development-Aquaculture (MOlA/WFP) Panama H 24,26,31 ENDA-Caribe: Desarrollo Rural Integrado de Zambrana Dominican Rep. C,G 2,7 Fondo Rotativo Agroforestal v Comercia (FORESTA) Dominican Rep. C,E,H 2,17,18,20 Agroforestrv Outreach Project- Pan American Development Foundation Haiti D,E,H 4,8,10,,18.24 Maissade Watershed Management Project-Save the Children Haiti F 1,8,12.28 Co/dc Avgofoestiry systenms 9 Casuarina ttninhlitinuiiatt Casuarina A Perennial crop withi rees IC C/lalpa Iongissimo Catalpa B Treei ntercrop witli agriculture II Cedtielti odttrata Spanish cedar C Alley croppinig 12 Colubcitnat arhrescens Coffee colubfina D Contouirplantings 13 Cordit tlliodlora Onion cordia E Borderp lanitingsa nd live fence' 14 Croton niteus Colpachi (C. Amer.) F Windbreak 15 Cttpr,essos itsilunitts Mexican cypress G Taungya 16 Enteolotthitnitt vtlocarpum Earpodi ree H Woodloi 17 Ervihrina sp. Mouniaini mmonlelle I Fallow 18 Eucalyptus tarnialdultensis Eucalypius J Home garden 19 tldf ypfus sahlignai Eucalyptas K Foddertrees 2(f Glicitidia. tpiunt Motherofcocoa L Treesi n pasturei silvopastoral) 21 Gnmelisaa chrorea Gmelina 22 Getillea rohusla Silkoak Code Prsnciptl- cespeties Cotmmtonn tantic 23 Inga tera (iuaba I A(tcia atmulitotilmis Japanese acacia 24 Letuttsaen leucocephlatI Leucaena 2 At aria mtingittni Mangium 25 Aetliu a:edertwh Chinaberry 3 Aliis axctnunna,wt Alder 26 Pittits taoi haea Caribbeanp ine 4 Azdilcat hia indita Neeitt 27 Piteltc/lo/am saman Raintree 5 Bontl'ottpsis qainaram Pocholte( C. Amer.) 28 Simtintha ,uaglata Aceituno( C. Amiler.) 6 Caesalpinia telutinti Aripin( C. Amer.) 29 St ietenia niacrophlya Hondurasm ahogany 7 Calliondr a caloth.ltstus Calliandra 3() lecona stans Yellow trumpetf lower 8 Citssia siaanieu Yellowc assia 31 Tettionagrandis Teak Source:H argreaves and Fiargreaves 1970; Little 1983; Litrle and Wadsworth 1964; Little, Woodbury, and Wadsworth 19 64; Witsberger, Current, and Archer 1982. 160