FINANCIAL OPTIMIZATION TO SETTLE AN AGROFORESTRY SYSTEM: BENEFIT-COST, RANDOM PRICES, DIFFERENT SCENARIOS AND EXTERNALITIES

Abstract

An agroforestry system in northeast Morelos state, in Mexico, proposed as an alternative for natural resources sustainable use of. The evaluation criteria in the system efficiency were the land productivity increase or permanence without degradation, net profit optimality of under constraints of land-capital, and a risk measure via a cost-benefit relationship. The costs of externalities were introduced to assess the restoration of the production process original conditions. The product prices were randomly chosen from a suitable distribution function. The system optimality was achieved under three yield scenarios: unfavorable, average and favorable. Results show that extensive cultivars, prickly pear (Ficus carica L.) and chapulixtle (Dodonaea viscosa (L.) Jacq.) are less risky than intensive ones, squash (Cucurbita pepo (L.) Sesse y Moc), watermelon (Cucumis melo L.) and onion (Allium cepa L.). Land and capital are not comparable resources; when there is a land excess against capital constraints, rational solutions are reached, but in the opposite condition, solutions are unsatisfactory.