Financial Analysis of Agroforestry Practice at Household Level in the Phu Phan Agroforestry Network, Sakon Nakhon Province

Abstract

              The objectives of the study were to conduct financial analysis of agroforestry   practices and to determine the marketing channel of A. thwaitesianum at the household level in the Phu Phan Agroforestry Network, Sakon Nakhon province. Financial analysis was employed to determine the success of the investment in 3 main agroforestry patterns namely: 1) Antidesma thwaitesianum combined with Dimocarpus longan and Tagetes erecta; 2) A. thwaitesianum combined with Tamarind indica and Musa sapientum; and 3) A. thwaitesianum combined with Annona squamosa and Carica papaya. Data were collected by employing the designed questionnaire with 56 farmer respondents. The studied agroforestry plots were divided into 3 types by plot size namely: small (4-7 rai), medium (8-11 rai) and large (12-16 rai). The 3 financial analytical methods (net present value, NPV; benefit cost ration, B/C; and internal rate of return, IRR) were employed to evaluate the success of the investment, with given discount rates of 5, 8 and 10 percent, and a given projected period of 25 years.

            The study found that all of the agroforestry farm sizes provided NPV > 0, B/C > 1 and IRR values that were much higher than the given discount rates. The medium plot size which was a combination among A. thwaitesianum, Dimocarpus longan and Gynura hispida provided the highest internal rates of return. Based on the determination of A. thwaitesianum, marketing channel involved a total production of 40.88 tons with a distribution to local factories (55.75%) and agricultural processing product groups (44.25%) for wine, drinking juice and concentrated juice production. 

Keywords: financial analysis, agroforestry, Phu Phan Agroforestry Network