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Is native timber tree intercropping an economically feasible alternative for smallholder farmers in the Philippines?

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  • Martin, Fernando Santos
  • Noordwijk, Meine van

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.

Suggested Citation

  • Martin, Fernando Santos & Noordwijk, Meine van, 2011. "Is native timber tree intercropping an economically feasible alternative for smallholder farmers in the Philippines?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(2), pages 1-16.
  • Handle: RePEc:ags:aareaj:176839
    DOI: 10.22004/ag.econ.176839
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    File URL: https://ageconsearch.umn.edu/record/176839/files/j.1467-8489.2011.00530.x.pdf
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    References listed on IDEAS

    as
    1. Shimamoto, Mihoko & Ubukata, Fumikazu & Seki, Yoshiki, 2004. "Forest sustainability and the free trade of forest products: cases from Southeast Asia," Ecological Economics, Elsevier, vol. 50(1-2), pages 23-34, September.
    2. Coxhead, Ian A., 1997. "Induced innovation and land degradation in developing country agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(3), pages 1-28.
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