2.3.5. Economic profitability
The economic profitability of multispecies systems is firstly
related to their productivity. Despite difficulties due to the
number of products involved, specific tools have been developed
to assess that productivity. The LER concept (Land
Equivalent Ratio, developed hereafter) has been extended to
take into account the duration of land occupancy by crops
(Area × Time Equivalence Ratio, ATER) or to incorporate
monetary returns (Monetary equivalent ratio,MER). However,
other issues have to be considered when assessing economic
profitability (Follis, 1993):
(i) Product time range
When setting up perennial plantations such as oil palms
or rubber trees, crop mixing is widely used to generate
income in the first years of the plantation, when the
palms or trees are still unproductive, do not produce
any economic returns and also occupy a confined field
space. As investments and products are needed or delivered
at different times, a financial appraisal of these
agroforestry systems calls for tools developed to assess
forestry projects, such as Discounted Cash Flow, and the
results of the comparisons depend on the discount rate
chosen. Nevertheless, most studies show an economic advantage
for multispecies systems used for that purpose,
when compared with pure forestry projects.
(ii) Income stability
Stability has often been presented as the main reason for
adopting multispecies systems in situations exposed to
risk, such as poor tropical agriculture. Multispecies systems
that provide several products can maintain a more
stable income, particularly if price variations for those
products are not correlated. Multispecies systems also often
require lower external fertiliser and pesticide inputs.
That lower dependence on external inputs makes multispecies
systems more resilient to external changes, such
as product prices.
Intercropping a new crop with a traditional crop is also a
way of cautiously entering a new market, without much
knowledge, as shown by fruit production in cocoa agroforestry
systems in Cameroon.
(iii) Evaluation of ecological services
Multispecies systems may also offer ecological services,
either for the internal benefit of the fields in which they
are cultivated (pollination or soil conservation) or for external
benefits, such as water quality, biodiversity or the
beauty of the landscape. Valuing those services is becoming
an important issue, to incorporate them into the economic
appraisal of cropping systems. Several examples
exist of payment for such services, particularly in Latin
America, but accurate assessment is still needed.
(iv) Labour productivity
Mixing is also assumed to be conducive to an adequate
distribution of labour over the year. Unfortunately, very
little on-farm research has been published on labour distribution
and labour productivity in multispecies systems
compared with pure crops. Some data are available
on annual intercrops, such as the “abonera” system
in Honduras, where velvet bean (Mucuna deeringianum)
is sown in the rows of corn. That system shows higher
labour productivity, even after the second year of establishment,
whatever the discount rate chosen. In Brazil,
the direct sowing mulchbased cropping system, combining
cover crops before, after or during the main crop, is
widely adopted on mechanised farms. The adoption of
these systems by smallholders is mainly motivated by
labour savings, but precise labour data are not available.
Multispecies systems may also favour the equity of income
distribution within the family, as in West Africa,
where, for instance, nuts of the shea tree (Vitellaria paradoxa)
scattered in the fields are for the exclusive benefit
of women.
Although frequent, the advantages and benefits of multispecies
systems must not be overgeneralised: not all crops are
beneficial in mixtures, since they do not systematically generate
ecological and/or economic benefits, andmay involvemore
complex or higher inputs of labour. Even when advantages are
recognised, multispecies systems are sometimes more difficult
to manage and require substantial farmer skills and specific
research efforts.
2.3.5. Economic profitabilityThe economic profitability of multispecies systems is firstlyrelated to their productivity. Despite difficulties due to thenumber of products involved, specific tools have been developedto assess that productivity. The LER concept (LandEquivalent Ratio, developed hereafter) has been extended totake into account the duration of land occupancy by crops(Area × Time Equivalence Ratio, ATER) or to incorporatemonetary returns (Monetary equivalent ratio,MER). However,other issues have to be considered when assessing economicprofitability (Follis, 1993):(i) Product time rangeWhen setting up perennial plantations such as oil palmsor rubber trees, crop mixing is widely used to generateincome in the first years of the plantation, when thepalms or trees are still unproductive, do not produceany economic returns and also occupy a confined fieldspace. As investments and products are needed or deliveredat different times, a financial appraisal of theseagroforestry systems calls for tools developed to assessforestry projects, such as Discounted Cash Flow, and theresults of the comparisons depend on the discount ratechosen. Nevertheless, most studies show an economic advantagefor multispecies systems used for that purpose,when compared with pure forestry projects.(ii) Income stabilityStability has often been presented as the main reason foradopting multispecies systems in situations exposed torisk, such as poor tropical agriculture. Multispecies systemsthat provide several products can maintain a morestable income, particularly if price variations for thoseproducts are not correlated. Multispecies systems also oftenrequire lower external fertiliser and pesticide inputs.That lower dependence on external inputs makes multispeciessystems more resilient to external changes, suchas product prices.Intercropping a new crop with a traditional crop is also away of cautiously entering a new market, without muchknowledge, as shown by fruit production in cocoa agroforestrysystems in Cameroon.(iii) Evaluation of ecological servicesMultispecies systems may also offer ecological services,either for the internal benefit of the fields in which theyare cultivated (pollination or soil conservation) or for externalbenefits, such as water quality, biodiversity or thebeauty of the landscape. Valuing those services is becomingan important issue, to incorporate them into the economicappraisal of cropping systems. Several examplesexist of payment for such services, particularly in LatinAmerica, but accurate assessment is still needed.(iv) Labour productivityMixing is also assumed to be conducive to an adequatedistribution of labour over the year. Unfortunately, verylittle on-farm research has been published on labour distributionand labour productivity in multispecies systemscompared with pure crops. Some data are availableon annual intercrops, such as the “abonera” system
in Honduras, where velvet bean (Mucuna deeringianum)
is sown in the rows of corn. That system shows higher
labour productivity, even after the second year of establishment,
whatever the discount rate chosen. In Brazil,
the direct sowing mulchbased cropping system, combining
cover crops before, after or during the main crop, is
widely adopted on mechanised farms. The adoption of
these systems by smallholders is mainly motivated by
labour savings, but precise labour data are not available.
Multispecies systems may also favour the equity of income
distribution within the family, as in West Africa,
where, for instance, nuts of the shea tree (Vitellaria paradoxa)
scattered in the fields are for the exclusive benefit
of women.
Although frequent, the advantages and benefits of multispecies
systems must not be overgeneralised: not all crops are
beneficial in mixtures, since they do not systematically generate
ecological and/or economic benefits, andmay involvemore
complex or higher inputs of labour. Even when advantages are
recognised, multispecies systems are sometimes more difficult
to manage and require substantial farmer skills and specific
research efforts.
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