That’s a very valid but also a very difficult question to tackle. While nowadays efforts have been made to develop financial tools and models to predict the profitability of agroforestry, the exact figures that would apply to an individual farm, are almost impossible to predict. The profitability of your agroforestry system depends on a lot of factors, with the availability of a market for the products and/or services you will develop as a very important part of this. In that perspective, you need to know that the profitability could be considered for three main aspects within your AF system: (1) the value that can be derived directly from the tree component (fruit, nuts, wood, etc); (2) the value related to the other agricultural outputs from your system (crop productivity and quality, meat or dairly productivity and quality, etc), and (3) services provided by your AF systems which have a direct value for the farmer or for which someone might be willing to pay (carbon storage, biodiversity, erosion reduction, etc).
What is important to consider, is a.o.:
- The timeframe of the agroforestry system, which is typically a long-term investment. Depending on the products you envision, the first products will be ready for harvest after a couple of years (fruits, nuts,…) or it could take over 30-50 years (quality wood).
- The availability of financial support (subsidies or other) for the initial investments and/or the maintenance of your AF system
- The interaction between the different components of your system and the relative importance of these components for your farm income. For example, at short term notice, the trees might compete with annual crops for space and for resources (water, light, …) in some cases, or they might be mutually reinforcing in other cases (e.g. trees providing shelter for animals – animals providing fertility to the trees).
- Not unimportantly but rarely considered in financial exercises: the stability and reliability of the policy context. This relates to support measures for agroforestry but also to rules and regulations potentially impeding planting or harvesting from trees.
PS: it is worth having a look at: The Agroforestry Handbook: agroforestry for the UK (Raskin & Osborn, 2019) – Chapter 6.
PPS: soon, a (Dutch) cost-benefit decision support tool called INTACT will be launched at the Agroforestry Planner Platform. In other countries, however, similar tools do exist. In Germany you have the AgroforstRechner.
