Valuing Soil Conservation Benefits of Agroforestry Practices

Although advocates of agroforestry have promoted soil conservation as one of its primary benefits, empirical estimates of these benefits have been lacking due to temporal and spatial complexity of agroforestry systems and soil resource dynamics. This study aims to reduce this gap by designing and testing a three stage farm level productivity methodology for economic evaluation of soil conservation benefits of agroforestry. Stage 1 quantifies the relationship between soil conservation, agroforestry, and soil quality. In Stage 2, the effects of changes in soil quality on individual household agricultural production are estimated. Finally, in Stage 3 these changes in production are valued at net market prices. The data to test this framework were drawn from two USAID/Government of Philippines projects that introduced contour hedgerow agroforestry in the Eastern Visayas, Philippines. Multiple regression analysis is used in each stage to establish the relationship between the agroforestry practice, soil quality and changes in farm-household income. The value of soil conservation is measured in terms of the change in net household income which is the true measure of change in the economic welfare of the household. The results indicate that agroforestry-related soil conservation does benefit the farmer, with the 'average' farmer gaining 114 pesos annually. This in itself provides insufficient incentive for the farmer to invest in agroforestry in this case because the direct opportunity costs of agroforestry adoption and maintenance result in a negative overall contribution to individual household income. However, the specific soil conservation benefit calculations do not account for several significant off-site and on-site benefits external to the individual households. In addition, all long run soil conservation benefits (and particularly improvements in the agro-ecological profile) may not have been realized in the short ten year period since the initiation of the agroforestry project. Thus, even though net benefits of agroforestry is negative, there may be good reason for society to encourage the farmers to practice agroforestry to conserve the soil and enhance overall societal welfare.