Financial analysis of a complex agroforestry system for environmental restoration purpose in the Brazilian Rainforest

• Published in: Agroforestry systems Vol. 96; no. 2; pp. 235 - 248
• Main Authors: Padovan, M. P., Nogueira, F. F., Ruas, F. G., Rodrigues, A. C. C., Arco-Verde, M. F.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01.02.2022; Springer Nature B.V
• Subjects: Agricultural economics; Agriculture; Agroforestry; Annual rainfall; Biodiversity; Biomedical and Life Sciences; Cost analysis; Economic analysis; Environmental restoration; Financial analysis; Financial management; Food production; Forestry; Life Sciences; Rainforests; Restoration; Rural environments; Species; Systems design; Wildlife conservation; Financial balance; Successional system; Technical coefficients; Annual crops
• ISSN: 0167-4366; 1572-9680
• DOI: 10.1007/s10457-021-00655-1

Complex agroforestry systems (AFS) based on the diversity of natural ecosystems have been strategic for the restoration of the degraded areas allying biodiversity conservation with food production that allows minimizing restoration costs. We supposed that AFS may provide diversification of production and earnings for farmers over time depending on the system design, species utilized, and management. The financial analysis conducted in a biodiverse, multistratified, and successional AFS, with 20 species mostly from the Rainforest, associated with annual species pointed out that the restoration costs were minimized. The financial analysis was based on technical and economic coefficients obtained for two years and simulated for 20 years. The established AFS (EAFS), however, demonstrated low financial performance in the first 10 years of the project with IRR of -3.9% and 5.6% and B/C ratio of 0.8 and 1.1 for 10 and 20 years, respectively, with payback in 14 years. Based on the results obtained, simulation of a system (SAFS) was carried out from changes in the arrangement, species selection, and management. The SAFS presented IRR of 20.7% e 13.5%, B/C ratio of 1.6 and 1.8 for 10 and 20 years, respectively, with payback in 2 years. It has been shown that financial analysis might help to promote agroforestry restoration and the environmental compliance of rural properties through the financial prognosis of the system that allows the generation of products with a positive financial balance over the time required for the ecological restoration process.