Making the case for agroforestry

Currently we are releasing more terrestrial carbon to the atmosphere than we are capturing through our land-use activities. Nevertheless, there is also the opportunity to convert our soils into net carbon sinks again. 

This process can be achieved through carbon farming practices that are part of regenerative agricultural solutions. One specific type of regenerative agriculture is agroforestry, which has gained increased attention over the last years by investors and climate scientists alike for its cost-effectiveness, climate change mitigation potential and environmental friendliness. 

What is agroforestry?

Agroforestry is a collective name for land-use systems and technologies where woody perennials (trees, shrubs, palms, bamboos, etc.) are deliberately used on the same land-management units as agricultural crops and/or animals, in some form of spatial arrangement or temporal sequence. 

The goal is to increase productivity of associated crops, leading to more diverse and sustainable production systems and better income from tree products, while also protecting the environment.

Agroforestry systems help with water management, biodiversity improvement, pollination, disease control, carbon sequestration, and soil improvement through decreased erosion and nutrient loss. Resulting from this, agroforestry systems function as an effective climate change mitigation solution while also offering resilience towards the physical risks thereof. 

Scaling potential

The climate think tank Project Drawdown estimates that currently agroforestry practices are implemented on around 650 hectares of land globally, however mostly in the global south. Resulting from this, scaling potential is still high in the western world. 

Interest from the private sector has grown considerably over recent years, particularly among cocoa and coffee producers. Moreover, according to Croatan Institute, around 47.5bn USD of investment assets fall under the regenerative agriculture category in the US alone. This is mainly because of the attractive investment profile of agroforestry projects. The German company Forest Finance, for example, operates a marketplace where it matches investors and agroforestry projects and expects a return of 4-7% on its investments. 

On the climate side, the Project Drawdown rates agroforestry as one of the best natural climate solutions for carbon sequestration. They estimate that agroforestry practices have the potential to sequester around 4.45 tons of carbon per hectare annually. 

Nevertheless, some challenges remain, particularly regarding policy setting and knowledge transfer to farmers. As for the former, until now it is difficult receive subsidies for agroforestry systems or not cost-effective to make the transition. This should change at least in the EU, however, with the introduction of the new Common Agricultural Policy (CAP). As for the latter, resources need to be built up to help farmers with the transition to agroforestry, while also connecting them with investors supported by a strong business case.