Economic evaluation of agroforestry systems of cacao (Theobroma cacao) with laurel (Cordia alliodora) and poró (Erythrina poeppigiana) in Costa Rica

Two agrosilvicultural production systems based on Theobroma cacao with either the timber tree laurel (Cordia alliodora) or the legume tree poró (Erythrina poeppigiana) as shade trees (both 13 years old) are financially analysed and compared in order to determine whether the economic benefits of timber production outweigh the service benefits from the positive effects of the leguminous tree on crop production. Although the timber trees are not mature at age 13, advantages are found for the timber tree system with respect to the legume tree system in terms of net present worth and benefit/cost ratio of returns to land and labour. Sensitivity tests showed that this advantage is small for returns to land but very stable for returns to labour. Projections to age 25 show that the advantages will hold over time. The opportunity costs of capital are crucial. The interest rate of 10% used may, for the potential user group of farmers with small-to medium-size holdings, be below the capital costs, and relatively slight increases in this rate will erase the advantages of the timber tree system. However, the timber trees operate like a saving account in offering a large cash income at the time of timber harvest and acting as a risk-minimizing factor. Both properties may well offset lower returns to capital for a small farmer. During the analysis, the paper also addresses the problem of using data from a study initially designed for nutrient cycling studies, for an economic analysis.