Alley Cropping Agroforestry Systems: Using Monte-Carlo Simulation for a Risk Analysis in Comparison with Arable Farming Systems

Abstract

Alley cropping agroforestry systems are mixed farming systems in which forest stripes are cultivated simultaneously with annual crops or pasture systems. Agroforestry systems have several advantages like lower levels of soil erosion, the reduction of nutrient leaching, increasing biodiversity and an improvement of the landscape. Despite the various advantages, the number of agroforestry system in Germany is negligible and alley cropping is only applied at specific experimental sites. Reasons for this retention might be economic disadvantages in comparison with traditional annual cropping systems. In order to compare the profitability and risk profiles of agroforestry and traditional annual cropping systems, we applied Monte-Carlo simulation. The analysis is based on data from two different experimental farms in Germany. In comparison with an annual arable farming system, the experimental agroforestry system in Dornburg shows a higher expected value of the performance cost difference in combination with a lower standard deviation. For the second experimental site in Forst, the results also reveal a higher expected value of the performance cost difference for the agroforestry system in comparison to the annual arable farming system. However, differences to the first experimental area occur because in Forst the standard deviation is higher for the agroforestry system than for the annual arable farming system. Thus, in both cases the agroforestry system turns out to be more profitable than the annual arable farming system but in the case of the Forst the higher profitability goes hand in hand with higher risk. The results have manifold implications for agricultural policy and future research.