A Discounted Cash Flow and Capital Budgeting Analysis of Silvopastoral Systems in the Amazonas Region of Peru

Stephanie Chizmar, Miguel Castillo, Dante Pizarro, Hector Vasquez, Wilmer Bernal, Raul Rivera, Erin Sills, Robert Abt, Rajan Parajuli and Frederick Cubbage
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Stephanie Chizmar: Forestry and Environmental Resources, North Carolina State University, 2800 Faucette Dr., Raleigh, NC 27695, USA
Miguel Castillo: Crop and Soil Sciences, North Carolina State University, 101 Derieux Pl, Raleigh, NC 27695, USA
Dante Pizarro: Animal Science Faculty, Universidad Nacional Agraria La Molina, Lima 15024, Peru
Hector Vasquez: Facultad de Ingeniería Zootecnista, Agronegocios y Biotecnología, Universidad Nacional Toribio Rodriguez de Mendoza de Amazonas, Chachapoyas 01001, Peru
Wilmer Bernal: Facultad de Ingeniería Zootecnista, Agronegocios y Biotecnología, Universidad Nacional Toribio Rodriguez de Mendoza de Amazonas, Chachapoyas 01001, Peru
Raul Rivera: Crop and Soil Sciences, North Carolina State University, 101 Derieux Pl, Raleigh, NC 27695, USA
Erin Sills: Forestry and Environmental Resources, North Carolina State University, 2800 Faucette Dr., Raleigh, NC 27695, USA
Robert Abt: Forestry and Environmental Resources, North Carolina State University, 2800 Faucette Dr., Raleigh, NC 27695, USA
Rajan Parajuli: Forestry and Environmental Resources, North Carolina State University, 2800 Faucette Dr., Raleigh, NC 27695, USA
Frederick Cubbage: Forestry and Environmental Resources, North Carolina State University, 2800 Faucette Dr., Raleigh, NC 27695, USA

Land, 2020, vol. 9, issue 10, 1-15

Abstract: Silvopasture is a type of agroforestry that could deliver ecosystem services and support local livelihoods by integrating trees into pasture-based livestock systems. This study modeled the financial returns from silvopastures, planted forests, and conventional cattle-pasture systems in Amazonas, Peru using capital budgeting techniques. Forests had a lower land expectation value (USD 845 per hectare) than conventional cattle systems (USD 1275 per hectare) at a 4% discount rate. “Typical” model silvopastures, based on prior landowner surveys in the Amazonas region, were most competitive at low discount rates. The four actual silvopastoral systems we visited and examined had higher returns (4%: USD 1588 to USD 9524 per hectare) than either alternative pure crop or tree system, more than likely through strategies for generating value-added such as on-site retail stands. Silvopasture also offers animal health and environmental benefits, and could receive governmental or market payments to encourage these practices.

Keywords: silvopasture; economics; financial analysis; carbon payment; Peru (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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