wind. Some benefits may also extend across borders, for example, in the case
of biodiversity protection and carbon sequestration. Many of these benefits are
not selfishly motivated and are unrelated to any particular use of the resources;
they reflect concerns for the environment and a desire to preserve environ-
mental and forest resources for others and for future generations. To date, eco-
nomic studies have not embraced attempts to value the biodiversity gains from
agroforestry. This reflects partly the difficulties of using economic valuation
techniques for valuing biodiversity, but also, we argue, it reflects the lack of an
incentive to value biodiversity because the potential for capturing its value
through market creation has, until recently, been small.
Second, economists have developed methods capable of estimating in
monetary terms the wide range of benefits associated with agroforestry land
uses, including nonuse values. These range from more straightforward proce-
dures such as using market prices to calculate financial flows from agroforestry
systems to more sophisticated survey techniques (such as contingent valua-
tion) that are able to measure nonuse values. Application of these techniques
tends to confirm the intuition that once nonmarket benefits are accounted for,
the economics of agroforestry can be transformed (see also Tomich et al.
1998). The additional stage that is needed for actual policy aimed at encour-
aging agroforestry involves the design of incentives and institutions for the
capture of these nonmarket benefits.
Third, farmers are unlikely to preserve primary forest on their farms, even
when it is part of a larger land use strategy that includes a shift to multistrata
agroforestry as a way of providing agricultural and forest products. The initial
costs of establishing agroforestry systems are perceived to be excessively high,
and farmers typically have short time horizons, so that the long-term benefits
of agroforestry are heavily discounted. This suggests that the development of
less intensive alternatives to multistrata agroforestry and improved systems,
which build on farmers’ current practices, may have a higher likelihood of
adoption. For example, Smith et al. (1999) show that farmers in the Peruvian
Amazon tend to diversify their agricultural systems with small areas of peren-
nial crops and to regenerate significant areas of secondary forests to recuper-
ate degraded areas as part of their slash-and-burn practices. Enrichment of
these secondary forests may provide many of the economic and environmen-
tal benefits of agroforestry systems while involving much lower investment
costs.
Fourth, the importance farmers attach to the environmental externalities
from agroforestry systems and nonuse values indicates that the common per-
ception that smallholders are interested only in short-term survival may be
misplaced and that intergenerational issues and environment-related factors
should be given greater emphasis in the design of improved land use systems.
The implication is that land uses such as agroforestry that encompass forest
84 II. The Ecological Economics of Agroforestry