Lh. Reeves et Rj. Lilieholm, REDUCING FINANCIAL RISK IN AGROFORESTRY PLANNING - A CASE-STUDY IN COSTA-RICA, Agroforestry systems, 21(2), 1993, pp. 169-175
We used fluctuations in net income from alternative cropping systems t
o assess the financial risk associated with an agroforestry system. Me
an-variance analysis was used to derive a set of minimum-risk farm pla
ns for a 15-hectare farm in Costa Rica. Monocultural coffee production
provided the highest expected net income, but also had the greatest e
conomic risk. As risk was reduced, the optimal agroforestry system div
ersified to include other cropping systems in addition to the coffee m
onoculture. Risk aversion was, however, accompanied by significant red
uctions in expected net income for the cropping systems studied. The i
nclusion of additional cropping systems whose net incomes are negative
ly correlated with the systems considered here could help reduce the e
conomic risk facing rural agriculturalists in this region.