Economic sustainability of agroforestry systems for farmers in the Brazilian cocoa sector

Details

Supervisors

Van den Broeck, Goedele

Faculty

Faculté des bioingénieurs

Degree label

Master [120] : bioingénieur en sciences et technologies de l'environnement, à finalité spécialisée

Abstract

Cocoa production is confronted with major sustainability challenges across environmental, social, and economic dimensions. Therefore, it is crucial to develop policies that balance human economic needs with biodiversity conservation. Agroforestry and agroecological practices have been suggested as nature-based solutions to enhance sustainability in these supply chains, but there is limited evidence integrating both environmental and economic perspectives. Additionally, there is a noticeable gap in studies focusing on Latin America, particularly Brazil. Therefore, this master thesis aims to analyze the economic profile of 313 cocoa agroforestry producers in the southern Bahia region of Brazil and to examine how different economic performance variables are affected across a gradient of Shade Tree Density (STD). Cross-sectional household survey data and an Ordinary Least Squares (OLS) method were used, checking the different assumptions. The results of the OLS models indicate that an increase in STD has a significant negative effect on cocoa yield and production costs of CAFS producers in southern Bahia. However, no significant effect of the STD gradient was observed on other economic performance variables (i.e. cocoa income, cocoa income per ha, income from other crops within CAFS and household income). Therefore, the findings of this study confirm our hypothesis that household income remains stable across the STD gradient, with no observed trade-offs in environmental performance. Additionally, various characteristics of the producer, the farm, and the cocoa production have a significant effect on the different economic performance variables modeled. The results of this research also suggest that further efforts are needed to empower women in southern Bahia, to formally recognize each settlement (grant official land titles to the settlers) and to improve Bahia's road network. The findings also suggest government involvement in facilitating access to credit for small producers and the implementation of various techniques by the producer to enhance their performance such as replacing old, non-productive plants, pruning, and especially the use of hybrid and cloned species. The use of temporary workers and the income diversification through the production of cocoa covariates, livestock activities, off-farm employment and non-labor income had significantly positive effects on the various economic indicators. Finally, determining a universal profitability threshold proved challenging and further research should aim to incorporate non-monetary indicators of development and to evaluate the well-being of the poor from a broader perspective. Further research should also focus on addressing potential endogeneity issues associated with the shade tree density gradient by applying instrumental variable (IV) models.