Growing agroforests with incentive schemes

By Delia C .Catacutan, Rodel D. Lasco and Caroline D. Piñon


While agroforests have been shown to produce multiple benefits, it can be difficult for farmers to establish and maintain them. Scientists at the World Agroforestry Centre in the Philippines set out to see if incentive schemes could make a difference.

Farmers and, indeed, nations derive many benefits from agroforestry. According to the World Bank in 2007, in developing countries agroforestry contributed 29% to agriculture’s gross domestic product and 65% in labour force and was a major source of livelihoods for 3 billion people.

Experience from smallholders’ agroforestry in the region also shows that externalities from cultivation can be reduced, made less vulnerable to climate change, and even harnessed to deliver more environmental services.

However, in spite of the viability of agroforestry, its widespread adoption is constrained by various factors including farmers’ inability to invest, inadequate institutional structures to provide information and a lack of market incentives.

In the Philippines, smallholders constitute about 90% of the farming population and represent around 21% of the country’s total labour force. They are key players in the agricultural sector but their contribution to economic growth has not been optimal relative to its potential. They have limited resources with which to fulfil society’s expectations for food, fibre and environmental services.

In response to this, we examined which, if any, incentive schemes might be most successful in encouraging smallholders to adopt and maintain agroforestry systems.

We found that global schemes such as the Clean Development Mechanism (CDM) and Reducing Emissions from forest Degradation and Deforestation Plus (REDD+) offered a range of incentives from which smallholders could benefit, including direct payments for carbon stored in trees and non-cash incentives such as training in particular skills or provision of infrastructure, but these schemes tended to be complicated and poorly matched to specific countries and smallholders’ needs.

We also studied local incentive schemes and concluded that both direct and indirect incentives were effective in promoting adoption of agroforestry by smallholders. For example, in Lantapan in the Philippines, farmers were intercropping ‘musizi’ trees with string beans with support from the local government’s own incentive program.

Musizi trees with string beans as alley crop. Photo: World Agroforestry Centre/Caroline Pinon

According to the farmers, growing vegetables amongst trees had a lot to offer but, at the same time, they struggled to raise the capital and manage associated risks. The introduction of vegetables to tree-based systems can be very sensitive to climatic variation, not to mention the competition between crops and trees for light, nutrients and water. Meeting the initial cost of adoption is thus a challenge, not to mention the market volatility of agricultural crops and the uncertainty of timber prices. To help overcome these challenges, the government leveraged outside support for a variety of incentives and also successfully tapped the global carbon market. An important aspect of the program was the way in which the government was responsively addressing smallholders’ needs in a sensible manner while offsetting the weakness of national programs.

We concluded that incentives can help smallholders and stimulate investment in agroforestry. To be most effective, national institutions should catalyze international carbon incentives for smallholders and work to simplify the rules for involvement in such schemes, whilst local governments should address smallholders’ needs through locally designed programs.

Ultimately, effective coordination and links will be needed to harmonize global, national and local incentive mechanisms if smallholders are to enjoy optimal benefits from agroforestry.


Read the book chapter

Catacutan DC, Lasco RD, Piñon CD. 2012. Incentive mechanisms for smallholder agroforestry: opportunities and challenges in the Philippines. In:  Nair PR, Garrity DP, eds. Agroforestry: the future of global land use. Dordrecht, The Netherlands: Springer Science and Business Media. p. 497–514.





This work is part of the CGIAR Research Program on Forests, Trees and Agroforestry.


Edited by Robert Finlayson

Rob Finlayson

Robert Finlayson is the Southeast Asia program's regional communications specialist. As well as writing stories for the Centre's website, he devises and supervises strategies for projects and the countries in the Southeast Asia region, including scripting and producing videos, supervising editors and translators and also assisting with resource mobilization.

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