Business and Economics

Agroforestry systems provide a wide range of economic benefits to producers and forest managers. These benefits can include increased production, diversified income streams, and more effective use of buffers and other field edges. These approaches can appeal to a range of farm sizes and types, from larger commodities growers to small, new, and/or limited-resource producers.

Opportunities for Enhancing Economic Benefits

There are significant existing and emerging opportunities for enhancing the economic benefits of agroforestry. Enhancing producers’ access to resources, markets, and risk management strategies for agroforestry can make operations more resilient.

Numerous resources exist for helping farmers to access land. From USDA programs, to land linking efforts, to leasing guides, partners throughout the agroforestry community are working to support those for whom access to land is their biggest barrier. Efforts are underway to help producers pay for up-front costs of agroforestry systems through USDA loans, banker and investor opportunities, and other approaches.

Producers with agroforestry systems access a wide range of markets: direct, wholesale, retail, online, and everything in between. Intermediaries, including processors, food hubs, distributors, often play an important role in the supply chain for agroforestry producers. In addition, adding value through processing is an effective approach for many growers with products with a short shelf life or products that consumers use in a processed form. For example, some producers make fruit jams or purees or sell shelled or dried nuts. Support for accessing these markets is also important.

Risk Management

Risk management techniques, including planning for short and long-term income, insurance tools, and diversified markets are also important to producers with agroforestry systems. USDA supports these aspects of business and economics, as do other agroforestry partners.

Business planning is an important part of agroforestry implementation. While agroforestry systems provide economic benefits to producers, planning for both long and short term income can be challenging. Resources exist to support this aspect of agroforestry including a wide array of enterprise budgets and other cost/benefit analysis tools.