There are many reasons for planting AOP trees beyond the original intent of cash-cropping, including improving fallow, providing shade, producing forage, and reducing soil erosion. All of these benefits of planting trees increase .the wealth of the farmer or prevent it from falling, even if they do not increase the farmer’s cash flow.
The first section of this study compares the costs of AOP plantings with their benefits. This is done in four steps. The first step is to present a general description of AOP plantations and the crop associations which will be analyzed. The second is to determine the net revenues the farmers would have received had they not planted any AOP seedlings. These foregone revenues are the opportunity costs of the AOP system. The third step is to determine the net revenues of the AOP system, including the tree and crop components. These net revenues are the benefits of AOP plantings. The final step is to bring all the benefits and all the costs into a similar time frame. This is done by determining the net present value of the costs and benefits and by determining the internal rate of return of the investment.
The AOP plantings were evaluated over a 16-year period because it falls within the usual length of economic evaluations (15 to 20 years), and secondly because the assumed harvest schedule of four 4-year rotations fits this 16-year cycle.
The group of representative or typical farms to be analyzed was chosen by studying a sample of AOP planters. Survey forms have information which describes the crop associations found on participants’ fields. Crop budgets were developed for each of the crop associations using published research data whenever available. These crop budgets, the labor inputs, the seed requirements, and the prices of inputs and outputs by region are on a computer spreadsheet.
The analysis of AOP plantations shows that 85% of all program particiants have improved their financial well-being by planting AOP seedlings. Of the remaining 15%, many are .likely to be better off for planting AOP seedlings because of the nonmonetary benefits of tree planting.