Evolution, adoption and economic evaluation of an agroforestry-based farming system with and without carbon values: the case of Nepal

Evolution, adoption and economic evaluation of an agroforestry-based farming system with and without carbon values: the case of Nepal

Modern agriculture, although high yielding, has several negative consequences such as land fertility loss through erosion and nutrient depletion and water source contamination. Most importantly it has deteriorated the global climate through emissions of greenhouse gases (GHGs): methane, nitrous oxide and carbon dioxide into the atmosphere. The modern agriculture has accelerated land degradation. The other human-induced phenomenon taking place around the globe is deforestation, which is mostly caused by agricultural expansion in order to feed the growing population. Nepal, as one of the least developed countries (LDC) with a fragile ecosystem, is not free of these global problems. Agroforestry, although not a panacea to deforestation and land degradation, has come to the forefront as a sustainable land- use strategy to mitigate these problems as agroforestry has the potential of enhancing soil quality and reducing emissions. However, the adoption of the agroforestry-based farming system is not widespread. Therefore, the aim of this research was to perform an integrated evaluation of such promising land use in Nepal, which covers adoption potential of agroforestry-based farming system at landscape as well as farm level, its financial return over other land uses such as agriculture and an integrated evaluation of GHG mitigation potential of it.

For this case study, out of 2000 households, a sample of 200 was randomly selected, using a random table. The study was carried out in nine VDCs of Dhanusha district, Nepal. Household survey, focus group discussion and inventory of agroforestry tree species were the three methods used to collect the required data. Considering the rotation period of horticultural trees, a 30-year time horizon was used for this study as one agroforestry cycle. Data on demography, adoption, cost and benefits and GHG emissions sources were collected from household survey questionnaires. The costs and benefits of farming systems were converted into monetary terms and discounted to produce net present values. One focus group discussion was conducted with agroforestry farmers to trace the history of agroforestry-based farming system development and to explore the major drivers behind this development. Diameter at breast height (DBH) and height were measured on five agroforestry tree species i.e. Eucalyptus camaldulensis, Dalbergia sissoo, Gmelina arborea, Melia azedarach and Anthocephalus chinensis and three horticultural tree species i.e. Mangifera indica, Artocarpus heterophyllus and Litchi chinensis to develop a tree growth model so as to estimate the carbon sequestration potential of agroforestry-based farming systems.

The study revealed that out of eight variables the farm size (t=3.512) was the most determining factor with regards to adoption of agroforestry. The results of a regression model for the household data showed that the model explained approximately 75% variation, out of which about 60% variation was explained by this variable alone. The other seven variables significantly influencing adoption were ‗availability of irrigation water‘ (t=6.271), ‗education level of household heads‘ (t=3.582), ‗number of agricultural labour force‘ (t=5.494), ‗frequency of visits‘ (t=3.146), ‗expenditure on farm inputs‘ (t=2.753), ‗household‘s experience in agroforestry‘ (t=2.589) and ‗distance of home to government forest‘(t=2.676). The benefit-cost analysis showed that all three indicators of financial analysis, NPV (Net present value), B-C (Benefit-cost ratio) ratio and return-to-labor, were higher in agroforestry systems than in subsistence agriculture, reflecting that integrating trees on farms is financially more attractive. Although financially attractive, the finding suggests that the current harvest cycles of agroforestry tree species were below the optimum level which has stopped them from getting the actual benefits from tree planting and also minimised the carbon sequestration potential of the system.

Inclusion of carbon showed that it contributed by less than 0.5% to the total NPV. Therefore, the income from carbon could not be an incentive to motivate small farmers towards agroforestry intervention. However, considering emission reduction as a carbon benefit from agroforestry, a considerable amount of income could be generated from carbon sale and that could be a motivating factor for small holders to adopt agroforestry. The finding suggested that integrating trees could reduce GHG emissions by 40% to 64% in a hectare basis depending on tree density on the farm in a 30-year period compared to subsistence-based agriculture. However, given the land constraints the chance of small farmers moving to agroforestry-based farming system is heavily constrained. A mechanism for joint farming practice such as cooperative farming, i.e. integrating small farms together to form a larger one, could be a viable policy intervention to encourage small holders towards adopting the environmentally and economically viable land use system such as agroforestry-based farming system.