EIP-AGRI Focus Group Agroforestry MINIPAPER 7: Financial Impact of Agroforestry

There is a balance to be achieved by agroforestry economists when they are asked to both “promote” agroforestry and determine the profitability of agroforestry. A conclusion of Graves et al. (2007) was that silvoarable agroforestry was likely to be of greatest interest where the profitability of the tree system was similar to that of the arable system; otherwise the owner would be best advised to focus on either the more profitable arable or forestry system. However many of the practical examples of where agroforestry seem to be implemented on a conventional arable or livestock farm, is to make the main enterprise more sustainable. An example of this is “woodland
eggs” e.g. in he UK. Similarly, farmer Stephen Briggs has planted a silvoarable system in order to reduce soil erosion on his peatland arable farm in Eastern England.
Some agroforestry promotion is focused on the improvement of grants. However in the absence of progress, some farmers are particularly adept at finding agroforestry combinations that do not invalidate single-farm or basic payments. For example planting agricultural crops such as apple trees allow the farmer to retain his land as “agricultural land” whilst increasing tree cover. In a similar way, tree strips can be designated as “wildflower strips” to benefit from agri-environment payments. It can be argued that the key component of any successful agroforestry system is the farmer (Burgess, 2017).
There remains a dearth of information for farmers about the value of wood. An efficient wood market would benefit from greater transparency in timber and wood prices for small producers.
There remains a need to firstly account for the additional complexity and administrative costs associated with agroforestry in financial analyses. In addition, on-going maintenance costs and other non-financial on-going commitments are unknown, unclear and hence are a barrier at planting. Secondly, in view of
the substantial wider societal benefits of agroforestry, ways should be sought to minimise the unnecessary administrative burden. It is clear than the current system of “complex rules” has tended to lead to a more “simplified landscape”. Is it possible to deliver a system of “simple rules” that creates a more “complex and diverse landscape”?
This analysis focuses solely on the financial analysis of the marketable components of the system. A wider economic analysis would consider wider societal benefits and the impacts of grants and subsidies.