Date of Award:
Master of Science (MS)
Department name when degree awarded
Robert J. Lilieholm
Agroforestry as a sustainable production system has been recognized as a land use system with the potential to slow encroachment of agriculture onto forested lands in developing countries. However, the acceptance of nontraditional agroforestry systems has been hampered in some areas due to the risk-averse nature of rural agriculturalists. By explicitly recognizing risk in agroforestry planning, a wider acceptance of agroforestry is possible. This thesis consists of a collection of three papers that explore the potential of modern stock portfolio theory to reduce financial risk in agroforestry planning.
The first paper presents a theoretical framework that incorporates modern stock portfolio theory through mathematical programming. This framework allows for the explicit recognition of financial risk by using a knowledge of past net revenue trends and fluctuations for various cropping systems, with the assumption that past trend behavior is indicative of future behavior. The paper demonstrates how financial risk can be reduced by selecting cropping systems with stable and/or negatively correlated net revenues, thereby reducing the variance of future net revenues.
Agroforestry systems generally entail growing simultaneously some combination of plant and/or animal species. As a result, interactions between crops usually cause crop yields within systems to deviate from what would be observed under monocultural conditions, thus requiring some means of incorporating these interactions into mathematical models.
The second paper presents two approaches to modeling such interactions, depending on the nature of the interaction. The continuous system approach is appropriate under conditions where yield interactions are linear between crops and allows for a continuous range of crop mixtures. The discrete system approach should be used where nonlinear interactions occur. Under this second approach, decision variables are defined as fixed crop mixtures with known yields.
In the third paper, the techniques presented above were applied to a case study site in Costa Rica. Using MOTAD programming and a discrete system approach, a set of minimum-risk farm plans were derived for a hypothetical farm. For the region studied, results indicate that reductions in risk require substantial reductions in expected net revenue.
Reeves, Laurence H., "Mathematical Programming Applications in Agroforestry Planning" (1991). All Graduate Theses and Dissertations. 6495.
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