Agroforestry has a number of economic advantages that can raise farm income, increase resilience, and promote sustainable agricultural methods. This system allows farmers to make money from a variety of sources by combining trees with crops or livestock. By diversifying the products produced, the adoption of such tree-based farming might enhance economic resilience. Producing specialized goods like organic fruits, coffee, agroforestry-certified wood, or naturally produced goods with a low environmental impact can help farmers create multiple niche markets. The market prices of these value-added goods are frequently higher, leading to greater profitability. Also, the financial risks linked to market changes or climate variability are spread out thanks to this diversification, which lessens reliance on a particular crop or livestock species.

The economic benefit of agroforestry systems is increased by using trees for several purposes. Farmers can profit from both timber and non-timber forest products through agroforestry. They can harvest wood for construction, furniture, or the production of energy, depending on the variety of tree they choose. Agroforestry systems offer possibilities for processing with added value and product variety. The people involved can also make income by selling a variety of non-timber forest products like honey, resin, fibers, fruits, nuts, and medicinal plants. According to some field studies, teak agroforestry systems in Indonesia, for example, can produce up to 12% of the total household income despite having a lower recycling time (because of the plant’s lengthy growth season). Furthermore, the adoption of a coffee agroforestry system in the Wey-Besay Watershed, Lampung, increased household income by more than 50% compared to only 12% from the conventional farming system. Small-scale forest-based businesses may find potential thanks to agroforestry systems. By improving household income, on-farm output, and employment opportunities, agroforestry can help reduce rural poverty. It can also lower the chance of economic failure by increasing the diversity of production within farming systems.

The impact of chemical inputs and how Agroforestry makes the system more profitable

Chemical inputs to agriculture, such as fertilizers and pesticides, carry significant costs to the environment and to human health, depending on factors such as toxicity, mobility and persistence in the environment. Excess-use of fertilizers and pesticides has led to biodiversity loss and ecosystem degradation with a decrease of beneficial pest predators and essential pollinators populations. 

Furthermore, the impact of chemical inputs is not limited to farms but it also concerns humans, wildlife and livestock: pesticides and fertilizers are dispersed through the air, linger in soils for years or even decades after they are applied severely impacting soil health and fertility, contaminate surface water and groundwater, leave residues in food. 

In addition to hidden and external costs related to the use of chemical inputs (regulatory costs, human health costs and enviromental costs), farmers using fertilizers and pesticides bear high costs for their production or purchase. The outbreak of Russia-Ukraine war on February 24, 2022, exacerbated already tight global fertilizer supplies boosting prices at historically high levels. 

Moreover, even if they might increase crop yields in the beginning, chemical inputs lead to soil erosion and degradation which seriously impact the productivity in the long term. Agroforestry improves soil fertility with crop plants able to resist or tolerate insect pests and diseases. The need for costly external inputs diminishes, the investments that farmers have to carry out are considerably lower and crop yields are stabilized or even enhanced in the long term. Hence, agroforestry is not only good for the environmental sustainability and resilience, but it also makes the system more profitable for the farmers. 

Improving the livelihoods of rural women through agroforestry

Improving the conditions of women and children is an essential component of agroforestry’s social and economic impact. Agroforestry can create new employment prospects in rural regions for off-farm tasks like grain drying, wood harvesting, furniture creation, etc. Women may also benefit from more work options because they can participate directly in production operations, which helps increase gender equality in rural areas. Additionally, job retention in rural areas may stop rural emigration and help enhance the rural economy.

A field study in western Kenya’s Nyando District examined an agroforestry initiative using household surveys, in-depth interviews, focus groups, and field observations. Many communities in this district received tree seedlings and agroforestry instruction between 2006 and 2008, and their experiences with the project were evaluated in a survey conducted in 2010. Some women in this area would travel over 20 kilometers to buy fuel from nearby regions. Women who frequently have to travel great distances in search of essential commodities run the risk of being attacked while on their trips and have less opportunity to engage in other activities. Researchers discovered that households’ time spent gathering wood and the amount of fuel wood they purchased both dramatically decreased after the Nyando District adopted agroforestry. Mature trees in these observed agroforestry systems not only gave women access to a safer and more dependable source of fuel wood, but they also gave them more time to engage in activities that generated cash. This study’s interviews with women revealed that some of them increased their revenues by selling local fuel wood, which suggests that agroforestry can assist women’s livelihoods.

The use of multipurpose trees, in particular, may increase the profitability of agroforestry since they could serve a variety of purposes, including providing rural populations with alternate sources of revenue, fodder, or food (such as wild edible fruits) during times of scarcity. In addition, some trees with a higher monetary value may be able to create funds for the community in addition to those from annual crops. By offering yearly and recurring earnings from various outputs, it can enable the diversification of agricultural goods obtained in an integrated manner, increasing economic profitability. By boosting the local economy and producing jobs, local production diversification can benefit the entire rural community.

Harnessing the potential of agroforestry to serve industries

It is indisputable that trees contribute in a variety of ways as sources of basic resources for industrial growth. Trees sustain a wide range of industries that are essential to modern society, from wood and paper to medicinal compounds and renewable energy. Biofuels made from tree sap, fruit pulp, and oils (such as palm oil or jatropha) can all be used as fuel in addition to lumber. If production were increased, biofuels made from tree byproducts may still serve an interesting role in lowering reliance on fossil fuels and greenhouse gas emissions.

For the production of lumber, plywood, and engineered wood products, agroforestry can serve the timber sector. Building homes, offices, infrastructure, and a variety of other structures requires tree products. Additionally, trees are a major source of pulp, a crucial component in the paper and packaging industries. The pharmaceutical and herbal industries extract substances having therapeutic properties from a variety of tree parts, including leaves, barks, resins, and oils. Also, the production of natural rubber and latex depends on specific tree species, such as the rubber tree (Hevea brasiliensis).

Agroforestry can offer recreational activities that benefit the general public and give landowners a variety of income streams, such as hunting, horseback riding, wildlife watching, and rural tourism. Additionally, it improves the landscape’s diversity and aesthetic quality, giving it a more appealing visual impact than monocultures. This helps boost ecotourism and increase financial opportunities. Also, the welfare of animals is improved by the use of trees in agroforestry systems. They offer protection from the sun, wind, and rain, as well as cover from external factors. They provide defense against predators and promote natural behaviors like foraging. It has been proven that laying chickens raised in woodlands are less likely to peck at their feathers and lay fewer eggs with low-quality shells.

Additional income through seedlings production

Growing tree seedlings can be a lucrative business for farmers. They can provide the seedlings for sale to individuals, organizations, or government bodies engaged in forestry initiatives. Farmers can take advantage of this market opportunity to boost their income as demand for tree seedlings rises as a result of environmental concerns and afforestation programs. Most tree crops require adequate care in nurseries before they can be transplanted to the field. Nurseries are usually sited in areas with adequate shade to prevent direct exposure to extreme weather events and pest attacks. This could serve as an income-generating opportunity for most farmers involved in agroforestry. This can make rural households’ economic framework more secure and less risky than if they only engaged in conventional farming systems. Also, to start a tree seedling nursery, labor-intensive tasks including seed gathering, sowing, watering, weeding, and transplanting are necessary. Farmers can create employment opportunities for themselves, their family, and other local residents by producing tree seedlings. This can improve rural communities’ lives and help fight poverty.