The cultivation of cocoa has been an important driver of tropical deforestation globally. Efforts to reverse this trend are focusing on the reintroduction of shade trees to cocoa plantations. Shade trees are valuable in enhancing biophysical conditions on cocoa (Theobroma cacao) fields and contribute to biodiversity and product diversification for smallholder producers. Participatory trials of cocoa agroforests planted with indigenous shade tree species were undertaken with farmers in the Atwima District of the Ashanti Region of Ghana, to increase tree volume on cocoa fields while improving rural livelihoods and enhancing environmental sustainability. An ex ante financial analysis of the technology was undertaken to assess its economic viability. Input-output data were collected from farmer experiments over three seasons and supplemented with data from traditional cocoa fields of varying rotation ages, and secondary data on production in later years of an eighty-year cocoa rotation. A discounted cash flow analysis was carried out to estimate the benefit-cost (B/C) ratio, net present value (NPV), internal rate of return (IRR) and land expectation value (LEV) as well as the sensitivity to a 20% decline in cocoa prices and additional chemical costs for various shade scenarios at a 10% discount rate. It was observed that cocoa production is, in general, profitable. The change from the traditional system to one with hybrid cocoa raised the IRR from 31% to 57% with planted shade and 67% without, although extra agrochemical costs would tend to reduce the profitability of unshaded hybrid cocoa in particular. The age of maximum LEV for the various scenarios suggests that the optimum economic rotation for the hybrid cocoa is between 18 and 29 years, much less than the traditional system.
A computer model was developed for the economic analysis of the damage caused to cocoa plants (Theobroma cacao) due to the harvest of timber shade trees (Cordia alliodora), based on field estimations from cocoa farms in the indigenous region of Talamanca, in the south east of Costa Rica. An economic cost-benefit analysis was carried out considering cocoa planting densities, yields, timber volumes and both cocoa and timber prices. Damage to cocoa plants was quantified in terms of severity levels and then translated into yield losses and their corresponding economic values. From the 49 harvested timber trees observed, 196 cocoa plants were affected, of which 4% required replanting and 38% coppicing. Tree trunks were involved in 55% of the damage cases (109) and tree crowns in 45% (89). Nevertheless, the revenue obtained from timber sales easily offset the costs of damage to the cocoa crop. The economic analysis showed that on average, the net gain derived from timber harvesting was around US$316 per tree. For all considered scenarios, the timber market price that would balance discounted costs and benefits to zero ranged between US$22 and US$66 m -3 (current market price for C. alliodora is US$128 m -3 ). There would be lower margins due to higher costs of cocoa damage in high yielding, high price cocoa scenarios. However, the study shows that damage due to tree felling should not be a major objection of farmers to the use of timber shade trees in cocoa farms even in these scenarios.
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