A spreadsheet approach to the economic modelling of agroforestry systems

Abstract

The ability to simulate the functioning of an agroforestry system in respect of its technical and economic components is important from a number of viewpoints. This paper outlines the components of a simulation model currently being developed at Bangor and discusses the potential of spreedsheet modelling in a number of contexts. The paper is divided into two parts. The first part is concerned with methodological aspects of the economic evaluation of a system of multiple land use in which agricultural and forestry enterprises are undertaken on the same area of land. It begins by describing the general approach and assumptions adopted and then proceeds to outline in detail, key components of a computerised spread sheet model embodied within the VP-Planner package. This allows a large number of parameters both technical and economic to take on a range of possible values thus enabling an assessment of the sensitivity of profitability to changing technical and economic conditions. The second part illustrates, in an application of the model to a poplar, cereal and sheep agroforestry system, how such an approach can be used to good effect in three broad areas of investigation. These are firstly, the economic evaluation of changing technical variables associated with complementary interactions and declining agricultural productivity through time. Secondly, the consequences of alternative price scenarios under differing initial land productivity and agricultural decay functions are examined. Finally, the scope for use of the spreadsheet modelling approach is illustrated.