Is Native Timber Tree Intercropping an Economically Feasible Alternative for Smallholder Farmers in the Philippines?

16 Pages Posted: 11 Apr 2011

See all articles by Fernando Santos Martin

Fernando Santos Martin

University of California, Davis

Meine van Noordwijk

World Agroforestry Centre

Abstract

Integration of trees on upland farms in the Philippines has been slower than expected and desirable from an environmental perspective. Our economic and risk analysis points to current policies as part of the problem. The study compares three domesticated indigenous timber trees (Shorea contorta V., Pterocarpus indicus J., and Vitex parviflora W.) intercropped with maize against a benchmark of the widely used exotic mahogany (Swietenia macrophylla K.). We used a biophysical simulation model (WaNuLCAS 3.1) to represent interaction between trees and crops for a fundamental level of water, nutrient and light capture as the basis for production functions. External conditions affecting systems profitability were accounted for in the Policy Analysis Matrix (PAM). Elements of risk were introduced through Monte Carlo simulation. Study results revealed that from a farmer’s perspective intercropping systems provide similar (within an uncertainty range of + or − 10%) returns to monocropping scenarios. When net subsidies and taxes are accounted for, social profitability evaluations favour tree intercropping at high tree densities. The net effect of the current bias in price policies towards food production therefore refrains farmers from making decisions to integrate trees on farms; a decision that is actually in the national interest on economic grounds, even without consideration of positive environmental effects.

Keywords: agricultural policy, agricultural systems, development economics, economic and risk analysis, productivity analysis

Suggested Citation

Santos Martin, Fernando and van Noordwijk, Meine, Is Native Timber Tree Intercropping an Economically Feasible Alternative for Smallholder Farmers in the Philippines?. Australian Journal of Agricultural and Resource Economics, Vol. 55, No. 2, pp. 257-272, 2011, Available at SSRN: https://ssrn.com/abstract=1806104 or http://dx.doi.org/10.1111/j.1467-8489.2011.00530.x

Fernando Santos Martin (Contact Author)

University of California, Davis

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Meine Van Noordwijk

World Agroforestry Centre ( email )

Nairobi
Kenya

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