in

Prepared by:

EMERSON V. BARCELLANO, PhD

Edited by:
SHIELA F. MALAO, PhD
English editor

Published by:
FRGJ Printing Press
8C Sunkist St., Pengue Ruyu
Tuguegarao City, Cagayan
 One strategy to enhance effective and efficient teaching is the provision of a teaching

guide. This material was made available for reference purposes to students enrolled in the

course in Introduction to Agroforestry and Upland Farming System for the BS Forestry, BS

Agriculture and BS Agroforestry programs. This material was prepared to enable the students

to learn and appreciate better the subject matter and to enhance their learning capability,

conserve time and effort and have better understanding on the nature of their chosen degree.

It is hoped that through this teaching guide, the students will not only memorize but

also internalize the contents of this material for them to actively practice and become partner

in the proper conservation and utilization of the dwindling forest resources of the country.

I fervently hope for a more fruitful and productive learning of the subject matter

through this material.

EMERSON V. BARCELLANO, PhD

Subject-In-Charge
 TABLE OF CONTENTS
Topic Page No.
Title page 1
Foreword 2
Table of contents 3
1 Overview of agroforestry 6
Philosophical basis of agroforestry 7
Attributes of agroforestry 7
Premises of agroforestry 8
Criteria of a good agroforestry system 9
Roles of agroforestry 9
2 The upland situation in the Philippines 13
Status and overview of the Philippines upland areas 13
Shifting cultivation 14
Land areas under shifting cultivation 15
Number of people engaged in shifting cultivation 15
Implications of shifting cultivation 16
Response of the Philippine government regarding shifting 17
cultivation
Problems and issues in the Philippine upland areas 18
Strategies to attain goals for upland development 19
3 Some laws related to agroforestry 21
4 Classification of agroforestry system 23
Basic element of a system 24
Application of system 25
Land use system 28
Systems analysis 29
System assessment criteria 30
Systems and interdisciplinary research 32
The agroforestry system classification 33
5 Agroforestry systems in the Philippines and in the humid tropics 37
 Significance of agroforestry system 37
Concept of sustainable agroforestry system 37
Indigenous agroforestry system 39
Modified fallow system /swidden cultivation 41
Multi-storey system 42
The alley cropping system 44
The live fence/boundary planting 44
The windbreak system 44
The taungya system 44
The silvipastoral system 45
The agrisilvipastoral system 46
6 The Sloping Agricultural Land technology (SALT) 48
Developed Agroforestry system in the Central Visayas 48
Forms of SALT 50
Making and using an A-Frame 51
Difficulties in the field 57
7 Recent developments in agroforestry 60
Marketing of agroforestry tree products, Marketing concepts and 60
principles
The concepts of a market 60
The major classifications of market 60
The importance of marketing 72
The essence of marketing 72
The role of marketing 73
The approaches to marketing 74
The marketing management philosophies 77
The marketing methodology 77
Characteristics of an agroforestry market 78
The development of efficient agroforestry market mechanisms 79
Issues and constraints of agroforestry marketing 80
AFTPs marketing approaches 83
References 95
 Presently, there are various definitions given to the term agroforestry. Lundgren and
Raintree (1983) set it apart from such related land uses as forest plantations and orchards.
Thus, agroforestry has been defined as an approach to land use in which woody perennials
(tree, shrubs, palms, and bamboos) are deliberately grown on the same land management unit
as agricultural crops and/or livestock either in some form of spatial or temporal sequence. In
agroforestry systems, there are both ecological and economic interactions between and among
the components. From the above definition, agroforestry can be viewed as a new word for the
old practice of growing woody plants with agricultural crops and/or livestock together on the
same land.

The word agroforestry is a generic term that embraces four classes:

1) Agrisilviculture, the conscious and deliberate use of land for the simultaneous
production of agricultural and tree crops;
2) Silvipastoral systems, a management system where forests are managed for the
production of wood as well as the raising of domesticated animals;
3) Agrisilvi-pastoral systems, land is manage for the concurrent production of
agricultural and forest crops and for the rearing of domesticated animals or in
other words, it is the combination of agrisilviculture and silvipastoral systems;
and
4) Multipurpose forest tree production systems, the system where forest tree
species are regenerated and managed for their ability to produce not only wood
but leaves for fodder and edible fruits as well (King, 1978).

Nair (1984), further classified Agroforestry systems based on four criteria such as:
structural function; agro-ecological setting, socioeconomic scale, and management levels of
the system. Agroforestry as a sustainable land management system which increases the
overall yield of the land, combines the production of crops (including tree crops) and forest
plants and/or animals simultaneously or sequentially on the same unit of land, and applies
management practices that are compatible with the cultural practices of the local population.
 An approach to land use in which woody perennials ( trees, shrubs, palms, bamboos)
are deliberately grown on the same land management unit as agricultural crops and/or
animals, either on some form of spatial arrangement or temporal sequence. In agroforestry
systems there are both ecological and economical interactions between the different
components (Lundgren and Raintree, 1983). A system of land management whereby forest
and agricultural products are produced on appropriate and suitable areas simultaneously or
sequentially for the social, economic and ecological benefits of the community (PCARRD,
1979)

Philosophical Basis of Agroforestry

1. To promote social equity and participation of upland communities for sustainable
management of upland farms; and
2. To develop upland farmers to become self-relient and competent managers of upland
resources.

Attributes of Agroforestry
By definition, therefore, agroforestry possesses the following attributes:
a. The land management system is sustainable – i. e promote conservation and
enrichment of soil and water on sloping lands.
b. The practice increases yield and services per unit area – i. e. intensifies land use –
addresses land scarcity issues.
c. The cropping scheme combines the production of forest and agricultural crops and/or
animal crops, either simultaneously or sequentially on the same unit of land.
d. The system contributes to the socio-economic and ecological upliftment of the
community and is compatible with the cultural patterns of the local communities, and
e. The practice is consistent with the sound ecological principles – i.e. increase
efficiency of nutrient cycling
Premises of Agroforestry

A. Biological Premise – based on the advantages of forest and trees on soil and
environment:
Soil Conservation and Amelioration – prevents/minimize soil erosion; high organic
matter (serves as buffer against rainfall impact, increases soil aggregation / infiltration);
serves as windbreak (protection against wind erosion); litterfall (source of nutrients); root
system (improves soil infiltration, serves as physical barrier against soil erosion); improves
soil properties (more efficient nutrient cycling, improves soil fertility through nutrient pump,
symbiotic association with beneficial micro-organisms, improves soil porosity, infiltration
rate and soil structure.
a. Water Conservation – increases soil porosity and infiltration; increases water-
retaining capacity (organic matter/litter and crown shade, minimize soil moisture
evaporation, organic matter serves as “sponge”).
b. Microclimate Amelioration – improves microclimate (shading effect, lower
temperature, less air turbulence, less intense solar radiation, dampens
environmental fluctuations).
c. Other Benefits – enhances aesthetic value; serves as source of food and shelter for
wildlife especially birds and other beneficial predators of harmful insects.

B. Socio-economic Premise – based on the potential of agroforestry in helping alleviate

the socio-economic conditions of poor and landless upland farmers who lack resources
inputs, unemployed and are forced to cultivate marginal lands. The practices of
agroforestry can benefit these farmers in the following ways:
 Source of employment
 Source of raw materials for handicraft/cottage industries
 Source of food, energy ( fuel wood), feeds for livestock, etc. and
 Source of raw materials for housing, farm implements, etc.
Criteria of a Good Agroforestry System
From the definition, the 3 criteria for a sound or well-designed agroforestry system are
productivity, sustainability and adoptability (cultural compatibility)

1. Productivity criterion
Agroforestry contributes to the production of direct benefits of “productive roles” such
as food, fodder, feeds for fish and livestock, fuel, fiber, pole wood/wood, other products such
as gums, resins, latex, oil, herbal medicine, etc. as well as indirect benefits or “service roles”
such as soil and water conservation (erosion control, mulch, etc.) fertility, improvement
(organic fertilizer, green manure, nutrient pump/cycling) microclimate amelioration
(shelterbelt, shading), live fencing, etc.)
Increase farmer’s income (from cash crops or those in excess of household
consumption). Requires proper combinations of crops and technologies to achieve
acceptable, if not the optimum, product mix to improve farmer’s welfare.

2. Sustainability Criterion
Employs conservation strategies to ensure long term productivity even at the expense
of decrease in present productivity. Requires putting some form of incentive into the
technology to ensure adoption of conservation practices especially by those farmers who
operate close to margin of subsistence.

3. Adoptability Criterion
Should be culturally acceptable/adoptable (compatible with their customs, tradition,
beliefs). Farmers should have the technical skills, financial resources and manpower to adopt
it. To ensure adoption, the farmers should be involved directly in the planning and designing
agroforestry systems.

Roles of Agroforestry
A. Ecological (Protective/Ameliorative) Roles of Agroforestry
1. Minimization of soil erosion and surface run-off – tree and/or other woody
perennial contributes to the conservation/amelioration of soil-water and
 microclimate similar to those beneficial influences derived from forest ecosystems.
These trees/woody perennials minimize, soil erosion and surface run-off in several
ways.

Minimization of Soil Erosion is Through the Following:

a. The tree canopies reduce the erosive power of rainfall through crown
interception.
b. The trees serve as windbreaks, reducing wind velocities that cause wind
erosion.
c. The stems and roots serve as physical barrier against soil erosion.
d. Trees minimize soil erosion indirectly through minimization of surface run-off.
e. The canopies that intercept the rainfall and the organic matter that accumulates
on the soil surface serve as buffer against rainfall impact thus minimizing soil
compaction and increasing infiltration.
f. The organic matter serves as cementing against which promote soil
aggregation and therefore enhancing porosity and infiltration.
g. The organic matter also serves as a “sponge” which increases the water
holding capacity.
h. The pores created by the dead roots and by the penetrating root system
increases infiltration and absorb much of the water that percolates via the stem
flow.
i. The favorable soil and microclimate condition under tree canopies favor the
activities of the burrowing soil organisms such as earthworms thereby
increasing porosity and infiltration.

2. Minimization of nutrients loss

3. Minimization of landslides
 4. Minimization of pest and disease occurrence. - The presence of different plants
species in agroforestry systems, as in tropical rainforest that it mimics, makes it
less susceptible to pest and disease attacks.

Two Ecological Principles that Explain this:

a. Associated with plant diversity is faunal diversity. These diverse species
affect each other through a complex ‘feeding” inter-relationships, thereby
providing a mechanism for check and balance of each others population. On
the other hand, the abundance/ concentration of food in monocultures make it
very convenient for the pests and pathogens to grow and reproduce rapidly.
b. Certain plant species act as repellant against certain pests.

5. Amelioration of Soil Fertility - According to Pritchett (1979), although litter fall is

the major pathway of nutrient flow from standing biomass to soil, considerable
amount of N, P, Ca and Mg are leached from the canopy and returned to the soil
via through fall and stem flow (tables 7,8 &9).

1. Amelioration of Soil Physical Properties - Tree roots can loosen the topsoil by
radial growth and can improve subsoil porosity infiltration capacity when deep
roots decompose. According to Pritchett (1979), the pore volume of forested
soils varies from 30-65 % and is normally greater than similar soil used for
agricultural purpose because the continuous cropping in the latter, results to
reduction in organic matter and macro pore spaces.

2. Amelioration of Microclimate

Trees are not only important in recycling beneficial gases (e.g. CO2 & O2) but also
absorber of toxic gases and other air pollutants. In the Philippines, the national
Environmental protected Council reported that several tree species (Leucaena leucocephala,
Albizia falcataria, Caesalpinia, Caripanulata & Gmelina arborea) have the ability to absorb
toxic pollutants such as SO2 and NO2 (Labo, 1982). Of these trees, Leucaena was considered
the most promising due to its ability to absorb toxic gases.

B. Productive/Socio-economic Roles of Agroforestry

a. All the ecological roles of agroforestry discussed above rebound to long-term
benefits particularly the over-all improvements of the socio-economic conditions
of the subsistence upland farmers.
b. As the upland ecosystem is properly conserved through appropriate agroforestry
system, it follows that improve productivity would be sustained through time.
c. The stable production of goods and services in turn ensures self-sufficient of the
upland farmers in food, fuel, fodder and other basic necessities.
d. The extra income earned by the farmers could also be used for other social benefits
such as clothing, shelter, medical care and education of their children. All these,
therefore, rebound to general improvement of the quality of life of the farmers.
 a. Status and overview of the Philippines upland areas
The upland areas in the Philippine are usually found in highland areas or above
elevations along the lowland rivers or between hills. These areas are economically and
environmentally important as follows:

1. It provides support system of lowlands and aquatic areas in a dynamic and highly
interactive landscape component of a natural system.
2. The place where increasing population of the “poorest of the poor” lives.
3. Contain the tropical forest ecosystem that is the oldest, productive and protective
ecosystem on earth.
4. Contains untapped mineral deposits.
5. A destabilizing force in the peace and security situation of the country if
environmental and socioeconomic conditions are not improved.
6. Uplands are repositories of our country’s natural history.

The goals of upland development

1. Increased productivity
a. System should be able to meet the basic needs of the farmers for food, fuelwood,
fodder, poles etc.
b. System should be financially advantageous.
c. Tree, crops and/or livestock components should be properly chosen and properly
combined, spatially and temporally, and with appropriate cultural management
practices applied.
d. System should include utilization of idle labor.
e. System should address the problems, constraints and needs as identified during the
diagnostic study.
 2. Enhanced sustainability
a. The system should promote soil and water conservation or ameliorate soil
properties.
b. The system should be diverse enough to withstand sudden changes in weather, pest
and disease epidemic and market price fluctuation.
c. The system should be environment-friendly.
d. The system should maximize the use of recycling of materials or wastes.

3. Enhanced community participation and improved equitability

a. The system should fit to local farming practices
b. The system should consider farmer’s capabilities
c. The farmer should be provided with security to the land they till and to the trees
livestock they raise.
d. The farmers or their organization should be provided with assistance and other
forms of incentives.
e. The system should be compatible with the customs, traditions, and belief of the
participants.
f. The project should be gender – sensitive.

In practice, the upland areas are the subject of shifting cultivation activities of most
upland dwellers.

b. Shifting cultivation
Shifting cultivation is characterized by a rotation of fields between short periods of
cropping and longer fallow periods. Specifically, the land is usually cleared of forest, burned,
cultivated and after 1-3 years, fallowed for up to 20 years or more. Other terms used to
describe this farming practice are slash-and-burn agriculture and swidden farming.
In the Philippines and many other tropical countries, it is usually practice in sloping
areas called “uplands” or “hilly lands”. For the purpose of this paper, upland farming is
synonymously used with hilly land farming which refers to agricultural crop production in
slopping or mountainous areas. Each country has its own practical definition of the exact
degree of slope involved. For example, in the Philippines upland areas are generally
considered to be those classified as forest lands (irrespective of those actual cover) which
have 18 % slope and above. While in Malaysia, forest lands are those with slopes greater than
25 degrees. Shifting cultivation can be viewed as a form of upland farming.
Fire plays a very important role in swidden farming. Burning is a utilized as a labor
saving means of clearing the land. The ash produced from the combustion of dried vegetation
also enriches the soil. In effect, farmers are getting “free” fertilizers from trees that took
decades to grow and accumulate nutrients in their biomass. However, fire also volatilizes
nitrogen in the soil so that they are lost to the atmosphere.
Shifting cultivators, together with loggers, have largely been blamed for the
destruction of tropical rainforest. In 1975 alone, it is estimated that 20M families engaged in
shifting cultivation destroyed 10M hectares of tropical forest worldwide. However, many
indigenous communities who live close to the forest have developed sustainable fallow
system. Thus it is common to make a distinction between upland migrant farmers who
employ unstable lowland technology in slopping areas and indigenous cultural communities
(ICC’s) who practiced farming technologies adapted to slopping areas.
The significance in shifting cultivation in Asia can be highlighted in looking at two
things: the area coverage and the number of people involved.

Land Areas under shifting cultivation

Table I shows that the estimated land area under shifting cultivation in Asia-Pacific
region is 75 million hectares. These figures may even be conservative. Another estimate
cited by Rao (1989) placed the total area involved at 100 million hectares. This is supported
by more recent data in the Philippines. SPOT satellite photographs revealed that around 4M
hectares of upland areas are actually being cultivated throughout the Philippines archipelago.

Number of people engaged in shifting cultivation

Table 1 shows the number of people affected by shifting cultivation. For the whole
region, there are close to 30 million people involved. This is most likely to be an
underestimation also. The Philippines had less than a million people in table 1, while the latest
estimates put the number of people dependent on upland cultivation at a staggering 9 million
out of a total population of 60 million. For tropical Asia, Rao (1983) placed the number of
people affected at up to 80 million.

Table 1. Extent of shifting cultivation in the Asia-Pacific region (Rao, 1983 as cited by
Srivastava, 1986)

Population dependent on Shifting Total Area affected by shifting

Country
cultivation (‘000) cultivation (‘000)
Bangladesh 108 1,000
Brunei 20 120
Fiji - 200
India 2,700 10,000
Indonesia 12,000 35,000
Lao, PDR 1,000 3,000
Malaysia 1,640 4,700
Papua New Guinea 1,000 4,000
Philippines 830 2,000
Solomon Islands 20 3
Srilanka 60 1,000
Thailand 1,000 4,000
Vietnam 5,000 8,000
Total 27,978 74,443
Rounded to 30,000 75,000

Implications of shifting cultivation

1. Ecological
a. On-site impacts
In the Phil. and other Asian countries, shifting cultivation is probably the leading
cause of direct forest destruction. The latter will extract the larger and commercially-valuable
species. The logged-over forest will then be cleared and burned for agricultural crop
production.
Later on, continuous cultivation will lead to the degradation of the site. This is due to
accelerated erosion in steep areas resulting to loss of plants nutrients. Table 2 shows that the
rates of erosion in several upland farms in the Philippines. Considering that the acceptable
erosion rate is 12tons/ha, it will be seen that typical upland farms have very high erosion
rates. Because of this, farm productivity is lowered eventually leading to the total collapsed of
the farming system. Finally the sub marginal land is abandoned.
Tropical forest soils are inherently infertile. Once the nutrients and organic matter is
lost, it will take a long time before the area is regenerated. There is therefore a real danger of
ending up with millions of hectares of degraded grassland areas in many countries in tropical
Asia.

b. Offsite impacts
As a consequence of the above, upland farming has spawned a host of off-site impacts.
This includes impaired hydrology which causes flooding and drought as well as siltation of
water bodies and even rice fields.

2. Socio-economic
a. Low farm income and poverty.
Because of the continuous degradation of the land and neglect by the government most
upland farms have marginal yields. Many of them are subsistence- oriented. This has led to
widespread poverty in upland communities. In the Philippines they are considered among the
poorest of the poor. Understandably, this condition is one major causes of political unrest in
the country side.

b. Effect on National Crop Production.

As was presented earlier, upland farms occupy a sizeable proportion of land area in
many countries. They thus have the political to boost the agricultural productivity of a country
even as population continues to increase while land area remains constant. In fact, upland
communities are already providing a significant proportion of farm produce in many town
markets in the Philippines. A case in point is the Mt. Trail in vegetables in Benguet Province
which is the semi-temperate vegetable bowl in the Philippines.

Response of the Philippine government regarding shifting cultivation

In many countries, upland areas are under the jurisdiction of forestry agencies.
Previously, foresters look up at upland areas as solely of forests, whether natural or
plantations. Farming is considered taboo in this area. Thus all attempts were geared towards
physically removing shifting cultivators from what foresters consider their domain.
Punitive measures were implemented. Farmers were jailed for squatting on state forest
lands. However this approach did not work for a number of reasons. For one, while the farmer
is languishing in jail, his wife and children continued farming the land. Besides, there
wouldn’t be enough jail rooms to contain millions of upland farmers.
Another approach was resettlement. Whole communities in the upland were uprooted
and resettled in other areas. However, this is very expensive. In addition, resettlement areas
are not very attractive being too far from centers of civilization so that livelihood
opportunities are severely limited. In many cases, farmers leave resettlement areas and go
back to their former upland farms. Obviously, this approach is not a long term solution to the
problem.
Thus, up to the early ’70’s policy makers and scientists were faced with a dilemma.
On the one hand, foresters want to keep upland areas planted to trees on the basis of the
ecological consequences of deforestation. On the other hand, farmers need to produce food
crops for their subsistence. There was therefore a tug-of-war between there two camps for the
use of upland areas.
It was in this context that agro forestry came into being. In the mid ‘70’s there was a
realization that trees and food crops need not be competitors for land. Scientists and
development workers begun to see the real potential for combining trees and crops to create a
sustainable production system that will be both productive and protective.

Problems and Issues in the Philippine Upland areas

1. “Shrinking land-increasing population”. In the near future land-based resources will
not be sufficient to support the projected population increases.
2. Inheritance pattern. Related to issue no. 1, Our present inheritance pattern tends to
promote land fragmentation and expansion into forest lands.
3. Tenurial forms. The government is in the process of evolving various tenurial forms
appropriate for a specific cause situation. Lack of sufficient time and research data
makes identification of appropriate tenurial form difficult.
4. Appropriate education for productive and sustainable uplands. At present indigenous
knowledge and culture are eroded by the so called modern educational system. This
has long term consequences in the development of the uplands.
5. Empowerment. Upland conditions are variable and inaccurate and require highly
flexible and localized decision-making in implementing upland programs. Requires
maximum use of indigenous knowledge in planning. This will require empowerment
of local communities. The question is how we can affect this need in the present
organizational set-up of the government line agencies.
6. Equity. It is a matter of time before land consolidation will again be in the control of
those who have money and power. CSCs although it could not be sold or transferred
except to immediate kins, finds its way into the hands of money lenders and
unscrupulous individuals. This will in the long run influence upland equity and will
undermine objectives of ISF.
7. Lowland – upland interaction. Highly accelerated programs isolated upland from
lowland development. Since upland and rural landscape are interacting, this should be
considered in rural resource management.
8. Militarization in the uplands. Presence of undisciplined military personnel and military
operations cause displacements and loss in confidence of our upland farmers. Battered
and brutalized people aggravate the gap between government and uplanders and loss
in farm activity.
9. Need for neutral and bankable program in the uplands.
10. Devolution. Merging of government agencies and placing the control of government
projects in the hands of local officials created confusion among project implementers.

Strategies to attain goals of upland development

Diversification
Diversification of tree crop and livestock and enterprises or production systems.
Three strategies promoting sustainability and social acceptability
a. Use of traditional knowledge as basis for planning
b. Participatory approaches in project planning and management
 c. Strategies enhancing ecological functions and prevention of environmental
pollution

3. Strategies promoting sectoral and spatial integration of plans and programs. Multi-
sectoral, integrated, watershed unit approaches in planning and management

4. Policy support
Appropriate policy support for land tenure, marketing and access for different
assistance

5. Workable upland technologies for farming systems

a. Productive
b. Sustainable
c. Socially acceptable/equitable
a. PD 705 (Revised Forestry Code of the Philippines)
 Governs the administration, development, use and protection of the country’s
public forest lands
 Defined Agroforestry as “a sustainable management of land which increases
overall production, combines agricultural crops, tree crops and forest plants
and/or animals simultaneously or sequentially, and applies management
practices which are compatible with the cultural patterns of the local
population”
 Prescribes the adoption of multiple-use management
 Encourages the establishment of industrial tree plantations, tree farms and
agroforestry farms as reforestation strategies

b. Executive Order 192 (DENR Re-organization Act dated June 10, 1987)
 Created the Department of Environment and Natural Resources which is the primary
government agency responsible for the sustainable development of the country’s
natural resources
 Defined sustainable development as “a process of change to meet the needs of the
people without lessening the potential for meeting their future needs, the needs of
other societies, and those of the future generations”

c. RA 7186 (Local Government Code of 1991 dated October 10, 1991)

 Devolution of specific DENR functions to the local government units
 Community-based forest management projects, communal forests, tree parks, solid
waste disposal system, and conservation of mangroves were devolved to the municipal
levels
 Enforcement of forestry laws, pollution control laws, and scale minings were devolved
to the provincial level
d. RA 7586 (NIPAS Act of 1992 dated June 1, 1992)
 Established the NIPAS which set the classification and administration of all
designated protected areas in the country to maintain essential ecological processes
and life support systems; preserve genetic diversity; ensure sustainable use of resource
found; and, maintain their natural conditions to the greatest extent possible

e. Executive Order 263 (July 19,1995)

 Mandated the adoption of the Community-based Forest Management Program as the
national strategy for sustainable management of the country’s forestlands

f. RA 8371 (The Indigenous Peoples Rights Act of 1997 dated October 29, 1997)
 Provides constitutional provision for the state to recognize and promote the rights of
the indigenous cultural communities to their ancestral domains and ancestral lands

g. RA 8435 (AFMA of 1997)

 Prescribes urgent related measures to modernize the agriculture and fisheries sectors
of the country in order to enhance profitability, and prepare said sectors for the
challenges of globalization through an adequate, focused and rational delivery of
necessary support services.
 The word system is used very often in the agricultural research and development
literature. Yet use of the system concept is rather a recent development and consequently
lacks uniformity in its conceptual definition and methods of approach. In a broad sense, a
system is defined as a group of associated elements forming a unified whole and working
together for a common goal. For example, the sociological household is a system composed
of elements of persons, resources, customs, etc. A farm is an agricultural system composed of
crops, livestock, trees, etc.
An important characteristic of a system is that since different elements of the system
are interrelated, a change in one element causes change in one or more of the other elements.
Further, an element of a system can itself be considered as a system. The crop production
activities of a farm constitute its cropping systems. An animal is also an example of a living
system, an element of the animal production system. Every system can be thought of as one
component of another larger system.
Many different systems approaches are used by scientists to unravel complexities.
Humankind is ever busy trying to understand the real world. To make sense of reality,
scientists use their imagination to define systems that simplify real phenomena. Systems can
be of any size or complexity varying from a molecule to a solar system. Where systems are
highly complex, they are studied in terms of subsystems. Models, which are extensions of the
known to understand the unknown, are often used to visualize systems. A model is
appropriate if it incorporates all relevant elements and their relationships. Reality, however, is
too complex to be represented completely by a model.
Although scientists are always keen on the descriptive and/or analytical value of their
systems, other professionals and practitioners are also interested in systems, perhaps for
different reasons. For example, the systems approach can be effective for management (e.g.,
for monitoring key factors that can improve operations and performance), predictions
(knowing what will happen if key factors change in the future), or for training (e.g., for auto
mechanics, electronics, agricultural production). A systems approach helps to focus attention
on what is important, effective, and practical.
Basic element of a system
A system may have many elements. The six basic elements of any system are:

1. Boundary
A system has a boundary. This clearly defines what remains inside (endogenous) and
what remains outside (exogenous). Understanding a system means knowing how the
endogenous pans relate to each other and how they independently and holistically relate to the
exogenous environment. Boundaries can be real or imaginary.

2. Structure
A system has structure. This refers to how the pans relate to each other in terms of
space and time. In other words, structure signifies spatial and temporal arrangements.

3. Function
A system has function. This refers to input-output relationships. A function is a
process in which inputs are introduced, managed, and convened into outputs within a time
spectrum, in order to achieve desired objectives or goals.

4. State
A system also has state. For example, a steady state system is one that does not
experience any change in structure or function within a given period. This would not be the
case in a system that is just being developed, or a system experiencing a declining state of
resources or productivity. Both endogenous and exogenous factors can cause changes in the
state of the system.

5. Hierarchy
There is a hierarchy of interrelated and interdependent systems. For example, a
human being system is pan of a household system, which is pan of community system, which
is part of a regional system, which is pan of a nation, which in turn is part of a community of
nations. This means that the analysis of any system in this hierarchy must take cognizance of
the influence of higher and lower-order systems. For example, one cannot fully understand an
individual person's behavior without understanding the household and community of which
he or she is part.
Furthermore, there is the question of how generally or specifically a system is defined.
One could describe and analyze a human being system, for example, at a general level such
that it applies to all human beings on earth, or at a very detailed level such that each person is,
in fact, a different system. Thus the choice of the precise level in this hierarchy is critical for
systems definition and analysis.

6. Type
Basically, there are two types of systems: mechanistic and purposeful. In the former,
behavior is predictable as the system does not determine its own goals, rather it reacts to
predetermined stimuli (e.g., a computer or an airplane). A purposeful system determines its
own goals and the ways to achieve them (e.g., an animal, household or nation).

Application of a system
There are many uses of systems terminology in agriculture, such as ecozone system,
land use system, farming system, cropping system, livestock system, agroforestry system. Let
us develop one of which is in common use today, the farming system, and refer to it to
explain others.

1. Farming Systems
Most experts agree to a definition of a farming system as a combination of crops,
livestock, and trees, managed in diverse spatial and temporal arrangements, subject to
biophysical and socioeconomic conditions, to satisfy the household's objectives and priorities.
Such a system can be described, first, in terms of structure (Figure 1). Literally, structure is
what one sees on a farm and where each component is located in relation to the others:
boundary, buildings, crops, animals, etc. Often the structure of a farming system is subject to
seasonal variations within or across years particularly with respect to the temporal
arrangement of annual crops.
A farming system can also be described functionally. This is a qualitative
representation, indicating the endogenous interactions among production systems and the
household, and also the exogenous interactions with the environment. It is imperative to
quantify these interactions in order to understand how well this system is managed and how
well it is meeting the household's objectives as well as to identify its constraints.

The structure of a sample small-farming system. This is an example of structural

description in system analysis.

2. Other Systems
Cropping and Livestock Systems: A structural description of the crop component
alone, that is to say the cropping system of a farming system. It identifies the specific
contributions of various livestock species to the household and to other components of a
farming system.
 Agroforestry systems: The presence of trees on external and internal boundaries,
cropland, homestead plots or on any other available niche of farmland, defines the
agroforestry systems structurally. There are several agroforestry systems on this farming
system, and each can be described functional, i.e., in terms of inputs used and outputs
generated.

Structure of cropping sub-system of a small-scale farming system.

Land-use system
Each system identified thus far can be described and analyzed with emphasis on how
land as an essential resource is being used and managed by the household in the farming
system or in any production system.

The land-use systems analysis could comprise:

1. household priorities and objectives;
2. .land-use intensity, namely, units of inputs or labor per hectare;
3. levels of management;
4. productivity levels and potentials, and
5. disposal and use of outputs.

Similarly, one could analyze systems defined on the basis of other crucial factors such
as labor, household information, or market participation. It is all a question of the desired
focus or emphasis for understanding a given farming system or its parts.

Ecozone System: One usually wants to study farming systems within a larger system,
e.g., an ecozone system. The latter could be defined on the basis of homogeneous
characteristics such as altitude, climate, topography, soil type, or vegetation; or, alternatively,
on the basis of specific farming and/or production systems which reflect to a large extent what
is feasible in terms of the above agro-ecological determinants. The analysis at this level can
be conducted as follows: If one studies many farming systems in a particular ecozone, one
notices common patterns with respect to structural and/or functional characteristics which
provide a logical basis for classifying farming systems. A general definition criteria (e.g.,
systems with maize and cattle), will encompass a greater number of farms, while a more
specific definition criteria (e.g., systems with specific management and yield levels of maize),
will contain a lesser number of farms.
Systems analysis

System Assessment Criteria

Systems analysis aims at comparing one system with others or assessing the
comparative performance of the same system over different periods of time. The performance
of a system depends to a large extent how its components interact, both structurally and
functionally. To analyze a system one should use assessment criteria based on the relationship
between structural and functional components of the system. Farming systems in tropical
environments are typically characterized by multiple combinations of structural and
functional interactions and therefore it is important to identify such interactions and to
quantify their positive and negative effects.

Qualitative assessment of livestock roles in a farming system

Role Cattle Goats Sheep Donkeys Pigs Poultry Wildlife

FOOD
Meat 1 3 1 3 2
Milk 2 1
Egg 3
TRACTION
Land prep 3 3
Cultivation 1
Transport 2 3
Manure/Fertilizer 3 1 1 1
STORAGE
Food Supply 3 1 1 3
Capitalization 3 2 1
Seasonal feed excesses 3 3 1 1 2
Weed and Bush Control 1 1 2
CULTURAL NEEDS
Contract agreement 3 2
Rituals 3 3 1
Ornamentation 1 1 2
Sports/Recreation 1 1 1
1 = Weak 2 = Moderate 3 = Strong
System Assessment Criteria
Three useful indicators of performance for a system are:
1. Management intensity, which is measured as an input/input ratio. For
example, amount of fertilizer/ha, or labor input/ha.
2. Productivity, which is measured as an output/input ratio, For example,
yield/ha, or yield/livestock unit.
3. Profitability, which is measured as output value/input. For example, net
benefit invested or net benefit/ha.
4. Other indicators include those related to the physical resource status, such as
soil fertility and structure, or vegetation cover.

The criteria are calculated for a given time period, usually a season or year. If one
studies how and why these indicators vary over the medium term (2 - 5 years) or the long
term (5 - 15 years), then one can assess whether the system in question is stable and
sustainable. Thus, sustainability of a system can be ascertained by studying long-term trends
in the indicators of physical resource status, management intensity, productivity, and
profitability.

Analytical Steps
In a general sense, systems analysis means an explicit consideration of system
objectives, interplay of endogenous components and factors, and interaction/linkages with
exogenous systems; the analysis Uses the time factor as an important variable. On the basis of
the preceding sections, the systems analysis process can be broken into a series of steps, each
answering one of the following key questions:

Present Performance of the System

What is the structure of the system(s)? The structural components refer to basic
resources such as edaphic, biotic, abiotic, or economic resources. Structural assessment
involves a specification of boundary and spatial, as well as temporal arrangements of physical
components; this is Usually done on a qualitative and/or quantitative basis.
 What is the function of the system(s)? The functional components refer to
management resources, viz, input levels used, technological and economic input, and output
levels achieved, both in physical and/or economic terms. Functional assessment involves a
description of inputs (use of labor, cash inputs, information), outputs (food, feed, materials)
and their disposal (home consumption, sale), and the timing of when these events occur.
Management and performance analysis is needed here, including quantitative analysis.
Biophysical as well as socioeconomic criteria should be used for functional assessment over a
given period such as 1, 2, or 5 years.

What is the state of the system? Answering this requires analysis of trends with
respect to changes in the basic structure and/or functions of the system. Stability and
sustainability are important considerations in this step. In all these investigations, the
influence of risk and uncertainty factors (e.g., climate price structure, human emergencies)
should not be underestimated, especially in agriculture-based systems.

Future Improvements
The above questions seek information on the present performance of the systems. If
the task is to improve the system, then one must ask a set of additional questions:

What are the objectives of the system manager(s) (e.g., farmer and household). And
how do those objectives match up with present system performance? It should be noted that,
although the manager's objectives and priorities for the system may not acceptable to all, they
can be ascertained and recorded accurately.

What are the positive and negative effects on the system of the present
component structures and/or functions? How could they be modified or replaced to
achieve higher levels of performance? Any proposed interventions must to be appropriate and
acceptable to the manager(s).

What are the positive and negative effects on the system of exogenous factors, and
what should be done about these factors to move the system in the desired direction? If
endogenous and/or exogenous changes should be carried out, what adjustments of structure
and/or function are required by the system manager to successfully implement the proposed
changes? Are they feasible technically, managerially, and economically?
The primary focus analysis of system performance is the identification of constraints
and key opportunities for improvement. This leads to a better understanding of the type of
changes to structure and function that would be required to make the system perform as
expected by its manger(s) - whether fine-tuning, incremental changes, or major changes.

Systems and interdisciplinary research

Research with a systems approach is used in almost all biophysical disciplines, such as
ecology, genetics, soil science, husbandry, pathology, and engineering, as well as in social
science disciplines including economics, sociology, anthropology, and political science.
However, there is a major difference in the conceptual framework and analytical methods
used by natural scientists, as compared to social scientists. For the former, research typically
deals with plants, organisms, and animals under "controlled" conditions, while for the latter,
research deals with people in their "natural" habitat where "controls" can be exercised only
through analytical methods. In this respect, each discipline in the natural and social sciences
has different tools for studying and improving land-use production systems.
An interdisciplinary, systems approach is often used in research on land-use systems,
whether homogenous or mixed systems. Research to improve any of the land-use systems
would require interaction among scientists from the different disciplines. Particularly in the
case of mixed systems, interdisciplinary research can be quite complex and challenging. To be
effective, team interaction should be based on a consensus on the systems analysis process
and on the specific contribution to be made by each discipline to the overall research strategy.
Productive interdisciplinary research requires a leader or leaders possessing expertise in
systems analysis, orientation to client farmer needs, technical know-how, and team
management skills.
The agroforestry system classification
Agroforestry systems can be classified in different ways using structural and
functional considerations. One common classification of agroforestry includes
agrosilvopastoral, silvopastoral or agrosilviculture systems, which can be further sub-divided
depending on specific arrangements and/or functions.

The types of agroforestry land-use systems

Type of System Examples of Components
Homogenous Systems
Monocropping systems Maize, wheat, rice.
Mono-animal systems Cattle, sheep, poultry.
Mono-tree systems Timber plantations, woodlots.
Mixed Systems
Crop-crop Maize/cassava, maize/beans.
Animal-animal Cattle/goat, cattle/poultry.
Crop-animal Maize/cattle, cereals/poultry/household waste.
Alley farming, mixed intercropping, boundary tree
Crop-tree
planting.
Animal-tree Alley grazing, fodder tree banks.
Crop-animal-tree Homegardens, alley farming with Livestock.

Another classification divides agroforestry systems into "mainly agrosilvicultural"

(i.e., trees with crops), "mainly or partly silvopastoral" (i.e., trees with pasture and livestock)
"tree-component predominant", and "other components present". This scheme recognizes
further subdivision according to structural or functional considerations. This particular
classification is probably best suited for analysis of the potentials of agroforestry.
More recently, with a view to reviewing and synthesizing the state-of-the-art in
agroforestry research and development for an annual ICRAF three-week course, the author
and a lecturing team adopted the classification.
An example of the classification of agroforestry systems. (After Young, 1987).

1. Mainly Agrosilvicultural (trees with crops)

Rotational:
. Planted tree fallow
. Taungya
Spatial mixed
. Trees on cropland
. Plantation crop combination
- with upper-storey trees
- with lower-storey
- tree/shrubs crops
- with herbaceous crops
. Tree gardens:
- multistorey tree gardens
- home gardens
Spatial zoned;
Alley farming
Boundary planting
Trees for soil conservation:
- barrier hedges
- on grass barrier steps
- on bunds, etc.
- on terraces
. Windbreaks and shelterbelts
. Biomass transfer

2. Mainly or partly Silvopastoral (trees with pastures and livestock)

Spatial mixed:
. Trees on rangeland or pastures
. Plantation crops with pastures
Spatial zoned:
. Live fences
- mainly barrier function
- multipurpose
. Fodder banks
3. Trees Component Predominant
. Woodlots with multipurpose management
. Reclamation forestry leading to production:
- on eroded land
- on salinized land
- on moving sands
4. Other Components Present and Special Aspects
. Apiculture with forestry
. Aquaforestry (trees with fisheries)
. Trees in water management
. Irrigated agroforestry

A second example of the classification of agroforestry systems (Torquebiau, 1989).

1. Alley Farming (hedgerow intercropping)
2. Crops under tree cover
3. Pastures and animals under tree cover
4. Agroforests (live fencing, boundary planting, windbreaks, shelterbelts)
5. Sequential technologies (shifting cultivation, taungya, improved fallow)
6. Other technologies (aquaculture and apiculture with trees)

Structural criteria are readily applicable in classifying agroforestry systems. In

contrast, the use of functional criteria to classify agroforestry systems is uncommon. The
science of agroforestry is not yet sufficiently advanced in the analysis of technology
management and performance to define useful functional criteria for system classification.
The occasional exceptions include, for example, speaking of alley farming for soil fertility
improvement or for fodder production, or indicating how a farming system's output is to be
disposed of (e.g., for home consumption, cash generation, or both).
The key task at present is to determine the most appropriate criteria to apply in
classifying agroforestry systems. The choice of classification depends on its intended use of
the classification. For purposes of technology development, the chosen classification should
provide a useful framework for guiding research and assessing research progress.
Significance of Agroforestry Systems
The practice of agroforestry has tremendous significance because it is closely linked
with the issue on the increasing demand for food due to the ever-growing human populations.
Agroforestry utilizes the spaces between trees for intercropping with agricultural crops and
this practice does not impair the growth and development of the trees but enables farmers to
derive extra income in addition to the benefits accrued from the usual use of the timber
resources such as fuel wood and the like.
Ong (1988) reported that by intercropping trees with arable crops, biomass production
per unit area could be substantially increased when the roots of the trees exploit water and
nutrients below the shallow roots of crops and when a mixed canopy intercepts more solar
energy. Tree growth in such cases conserve soil moisture, increases atmospheric humidity,
improves soil fertility, protects field crops against the scorching and desiccating effects of
winds, and generally makes the climate pleasant, thereby enhancing agricultural crop and
animal yields.
Gujral (1990) as cited by Karki (1996) mentioned some advantages of agroforestry.
First, gains in agricultural productivity are achieved through increases in soil organic matter
and reduction of runoff and erosion. Second, woody perennials through their deep roots are
very useful in nutrient recycling in deeper soil strata. Third, woody vegetation improves soil
moisture through shading and mulching influences.

Concept of Sustainable Agroforestry System

Sustainability is a complex as well as multidimensional term. It can mean different
things: a) the maintenance of productive capacities over time; b) maintenance of a particular
level of benefits; and c) measure of the growth of productivity and/or benefits, or the
appropriate redistribution of both, in pace with the growth of man needs and expectations
(Charoenwatana and Rambo as cited in Wulandari, 1999). It may refer to the maintenance of
a particular management over time (Asdi in Wulandari 1999).
 In the context of rural development projects, sustainability is one that is continuous,
self-help, and not only present at a period when support or subsidies were given by the
initiator. Determinants for sustainability generally encompass socio-cultural, economic and
biophysical or technical (plants, animals and environment) dimensions (FAO; UNEP and
WWF, as cited by Wulandari 1999). Such sustainable development is environmental non-
degrading, technically appropriate, economically viable and socially acceptable (FAO;
Pookpakdi in Wulandari 1999).
ICRAF (1993) cited some criteria for a well-designed agroforestry system such as
productivity, sustainability and adoptability. The system is said to be productive when it
contributes to the production of direct benefits (production of food, fodder, fuel wood, fiber,
etc.) and indirect benefits (soil and water conservation, fertility improvement, micro-climate
amelioration, etc.). To be productive, the system must also be able to increase farmers’
income from cash crops, or from those in excess of the farmers’ household consumption. The
system requires proper combination of crops and technologies to achieve acceptable, if not
optimum product mix combination to improve farmers’ condition.
To be sustainable, an agroforestry system must employ conservation strategies to
ensure long term productivity, and requires putting some form of incentives into the
technology to ensure adoption of conservation practices especially by farmers who operate
close to the margin of subsistence. The system is said to be adoptable when it is comparable
with the farmers’ customs, traditions, belief, etc., the farmers have the technical
knowledge/skills, financial resources and manpower to adopt it, and that the farmers are
involved directly in the planning and designing of agroforestry systems.
Agroforestry is considered as one of the most viable and sustainable land-use systems
in the tropical uplands. As a form of land-use, it has two main objectives:
(1) productivity which involve the multiplicity of outputs and;
(2) sustainability that implies the conservation and improvement of the environmental
aspects of the upland resource base.

Vergara (1987) pointed out that the most viable alternative for maintaining
productivity is the application of low-cost agroforestry systems that promote soil conservation
and minimize nutrient losses in the fragile upland ecosystem. The system should be an
integral agroforestry that involves simultaneous and continuous cropping with annuals and
perennials and in the long run, maximizes productivity and site protection thus promoting
sustainability.
Nair (1984) stressed that agroforestry as a production system combines soil-
conserving and soil-improving perennials with food crops to possess the potentials achieving
the desired sustainability in upland areas. The increasing dependence of modern agricultural
technology on high value inputs on one hand and the deteriorating economic situation of most
developing countries on the other hand have led to an increasing awareness of the potentials
of conservation-oriented agroforestry technologies. Agroforestry encompasses a wide variety
of land-use systems to increase productivity and generate better economic returns while
promoting the conservation of soil, plant, and water resources.

The Indigenous Agroforestry systems

Indigenous agroforestry systems in this context refer to those systems practiced mainly
by cultural minorities developed over many generations. Existence of these technologies
cannot be discounted for these are time-tested systems that are able to sustain production
while preserving the integrity of the environment. Lessons relevant to agroforestry systems
design and development could be drawn from them.

1. Rice terraces- forest coupled agroforestry (Payoh- pinugo system)

a. Irrigated rice terraces constructed on very steep mountain sides for which the
Ifugao tribe in Northern Philippines has been famous for.
b. Without using fertilizers or pesticides, rice yields are much higher than the
national average.
c. The system has been in existence for more than 2,000 years (Halos, 1982)
d. Terracing is probably the most important factor responsible for its
sustainability.
e. In addition, a forest component is valuable to the system. Forest stand called
“pinugo” in the local dialect are owned, developed, and maintained by families
who can own rice terraces (payoh).
 f. The forest stand serves as watershed from which springs forth water needed to
irrigate the terraces as well as prevents land slippage (Celestino & Elliot, 1986,
Olofson, 1983).

These forested areas, which range in size from 500m2 to 5 hectares (Anonymous,
1983) are managed according to a set of laws that stipulate among in relation to rice fields and
the tree species that are suitable to plants (Halos, 1982)

2. The Fallow System

a. Swidden cultivation is said to be the oldest form of agroforestry (Vergara,
1986).
b. Land is cleared, burned, and without plowing planted to agricultural crops,
after a few years, the area is fallowed or allowed to revert back to forest in
order to rejuvenate the site.
c. The swidden farmers does not really abandon the area but simply allows it to
“rest”, he rotates from one piece of land to another in a well define cycle.
d. The system becomes sustainable as long as the length of the fallow period is
maintained.

Examples:
1. The Ikalahan tribe of the Nueva Vizcaya, Philippines.
2. Hanunuo tribes of Mindoro, Philippines.
3. The Naalad improved fallow system located in Barangay (village)
Naalad in the Municipality of Naalad, Cebu City.

There are Two Improvements over the Traditional Fallow System

a. Instead of waiting for the natural process of regeneration, the farmers
directly seed the fallow area with Leucaena leucocephala which
presumably hastens the rejuvenation of soil fertility to only six years.
 b. At the end of the fallow period, they cut the Leucocephalla trees and use the
branches to form some kind of wattling (‘babag’ in the local dialect) along
the contours. One row of corn or tobacco is planted in between two rows
of ‘babag’. Agricultural crop production lasts also for six years. This
system has been estimated to be over 200 years old already.

Modified Fallow system / Swidden Cultivation

1. Normally involves the clearing, burning and direct planting of agricultural crops
without plowing the area. After 2-3 years of cultivation, the area is fallowed or
allowed to revert back to forest in order to rehabilitate the soil. However, with the
deteriorating land- man ratio, modifications to the traditional fallow systems were
employed.

2. Naalad system or the modified fallow system in Naalad, Cebu proved to be

effective in farming practice for the uplands. They first shortened the ‘rest period’
by planting ipil-ipil (Leucaena leucocephalla) on the fallow area. Instead of
fallowing for 17 years, it was reduced to only six years. Second, at the end of
fallowing, fascines are constructed at the contour lines using the branches of ipil-
ipil. These are locally known ‘balabag’. Lasco (PCARRD Highlights 1992)
conducted an on-farm evaluation of the Naalad modified fallow system in Naga,
Cebu. It is one of the most unique indigenous improved fallow systems found in
Naalad, Naga, Cebu. The Naalad system, developed 100 years ago, is basically a
fallow system. The fallow period is hastened by the introduction of native 'ipil-ipil'
(L. leucocephala) in the area to be fallowed. There are two improvements over the
traditional fallow system.

First, instead of waiting for natural succession processes to revegetate the fallow,
the farmers plant L. leucocephala to shorten the fallow period from ten or more years to
only five to six years.
Second, at the end of the fallow period, farmers cut the L. leucocephala branches
and twigs but instead of burning the biomass as they do in shifting cultivation, they pile
 them along the contours to form a fascine-like structure locally known as balabag or
babag, which help conserve the soil. The balabag are spaced from 1 m - 2 m and the
alleys formed between are planted to corn and tobacco.

3. Hanunuo Mangyan indigenuous AF system

Gascon (PCARRD 1999) studied the Hanunuo Mangyans' indigenous agoroforestry
systems in Sitio Dangkalan, Bulalacao, Oriental Mindoro. There are three agroforestry
production systems practiced, namely: the swidden or kaingin, the multistorey, and the home
garden.
In swidden farms, rice and corn were other major crops planted. Other crops
interplanted included banana, cassava, sugarcane, and root crops. Crops were planted
simultaneously or sequentially within the cultivated area. However, the crops were randomly
and/or inappropriately planted, and thus competed with the rice and corn for soil nutrients,
water, and sunlight resulting to low yields. It was the most practiced system but the least
ecologically sound.
Fallowing was practices whenever the farmer noticed that the soil was no longer
fertile. The land was rested for 1-3 years which was not enough if compared to the 19 years
fallow period which their ancestors practiced.
In multistorey farms, the upper canopy had coconut while the middle canopy had
mango, banana, 'anahaw' (Livistona rotundifolia), and 'anuling' (Pisonia umbellifera). The
lower canopy was dominated by pineapple with some L. leucocephala at the edges. It was
also found to be the most ecologically sound in terms of soil fertility maintenance.
The home gardens were structurally simple. The upper canopy was usually planted to
bananas, coconut, mango, jackfruit, and guava. Ube was planted under and twined on the fruit
trees. L. leucocephala and 'kakawate' (Gliricidia sepium) served as live fences.

3. Multi-storey System
Characterized by the presence of stratified canopy.
Examples:
1. In the Philippines, the most predominant is the coconut-based multi-storey.
 2. The forest component of the Ifugao rice terraces is composed of forest trees,
bamboos, rattan & medicinal plants. The species diversity exceeds that of a
natural forest (Olofson, 1983).
3. Home gardens with varying degree of diversity are also common throughout
the Philippines.
4. Benguet Pine (Pinus kesiys) and coffee.
5. Mahogany (Swietenia macrophylla) and agricultural crops practiced in
Benguet like alnus, japonica, and coffee.
6. Leucaena leucocephala and coffee practiced in Iloilo National College of
agriculture (INCA).
7. Rain tree (Samanea saman) and coffee practiced in Negros, Occidental and
Ifugao.
8. Paraserianthes falcataria and coffee or abaca practiced in Bukidnon.

In addition to the income generating role of this system, it also provides protection to
the site. The layered canopies reduce the impact of rainfall and thus, reduce accelerated soil
erosion. The litter falls serve not only as a soil cover cushion the drip flow but also provide
the necessary organic matter for growth and development of the plant species grown. The
phenomena of nutrient pumping and biodiversity also exist in this system.
This system is characterized by randomly mixing various species that create at least
two layers of canopy. It mimics the structure of a tropical rainforest with its attendant
advantages. The upper canopy is composed of light-demanding species, while the understorey
is made up of shade-tolerant species.
Multistorey system can be developed where there is existing monoculture (only one
species) plantation, such as coconut and forest tree plantations. Planting configuration of the
main tree crop is planted with wide spacing to allow enough light for layers of shade-tolerant
crops.
The Alley cropping system
Alley cropping is one of the simplest and most widespread agroforestry practices in
sloping lands. It involves planting of hedgerows along the contours and growing agricultural
crops in the "alleys" formed between hedgerows. The hedgerows are planted to one or more
rows of woody perennials and are regularly pruned to prevent shading. Prunings are used as
green manure or mulch, which contributes to the soil nutrients when decomposed, thereby
promoting efficient nutrient cycle.
Planting hedgerows is done to minimize soil erosion by trapping sediments at the base of the
hedgerows and reducing surface runoff velocity. After a few years, terraces are formed. Alley
cropping is applicable in stabilizing and promoting the sustainability of upland (hilly land)
farms devoted to annual crops such as corn, rice, and vegetables. Without hedgerows, these
farms are most ecologically vulnerable to erosion with rates of up to 200 t/ha as against the
maximum acceptable level of 12 t/ha.

The Live fence/Boundary planting

Planting of multipurpose trees and shrubs (MPTS) around the farm is a very common
practice. They provide protection, privacy, and valuable products to the farmers. Trees are
planted within property line as fence, or as demarcation of farm lots.

The Windbreak system

Windbreaks are strips of vegetation composed of trees, shrubs, and vines to protect
croplands from strong winds. They can provide protection to crops over a distance equivalent
to 15-20 times the height of the trees in the windbreak. They can also help minimize wind
erosion and reduce moisture loss.

The Taungya system

The taunga involves the planting of cash or food crops between newly planted forest
seedlings in a reforestation project. Farmers raise crops while the forest trees are still young.
After 2-3 years, depending on the tree spacing and tree species, the canopy closes, and light-
demanding annual crops can no longer be planted. The culminating vegetation is a pure tree
plantation. Farmers then transfer to other open areas to repeat the process. This can be applied
by using different reforestation species.

The Silvipastoral system

Silvipastoral system is the combination of woody perennials with livestock
production. This system includes: livestock production. This system includes: livestock-
under-tree, protein bank (fodder bank), live fence, and hedgerow planting of improved pasture
grasses and/or other fodder trees or shrubs.

1. Livestock-Under-Tree
Animals (e.g. cattle, sheep, goats, etc.) are allowed to graze freely underneath
the relatively mature tree plantations. These plantations are for wood or fruit
production. An example is the silvipasture scheme of Nasipit Lumber Company in
Agusan. The cattle are allowed to graze under the 'lumbang' (Aleurites moluccanna)
trees where improved forage grasses are grown. With this scheme nuts for linseed oil
and meat from grazing cattle are simultaneously produced. The cattle keep the grasses
trimmed down, saving labor costs in cleaning the plantation, and making it easy to
collect the fallen lumbang nuts. The cattle dung scattered over the plantation area
serves as an excellent organic fertilizer.

2. Protein Bank
Leguminous fodder trees or shrubs (e.g., 'ipil-ipil' [Leucaena leucocephala],
'kakawate' [Gliricidia sepium], desmodium [Desmodium rensonii], etc.) are
established as small stands on certain portions of the farm or pasture area serving as a
supplementary source of protein-rich fodder for livestock. They also serve as fence.
They are regularly pruned and the top and branch prunings are then fed to animals.

3. Live Fence
Trees or shrubs with foliage which are palatable to livestock are grown around
a certain grassland area to enclose the grazing animals. Aside from the trees' role as
live fence, they can be managed (e.g., regular top pruning to encourage more lateral
 branching) such that the enclosed animals can browse on the low-lying branches for
fodder supplement.

4. Hedgerow Planting of Improved Pasture Grasses and/or other Fodder Trees or

Shrubs
Hedgerows of fodder trees or shrubs (e.g., D. rensonii, L. leucocephala, G. sepium,
Flemingia congesta, Sesbania sp., etc.) are planted along contours at certain intervals. The
strips between the hedgerows are grown with improved pasture grasses and/or other fodder
shrubs. Prunings from the hedgerows, grasses, and fodder trees/shrubs are fed to confined
animals. An example is the Simple Agrolivestock Technology (SALT 2) developed by the
Mindanao Baptist Rural Life Center (MBRLC) at Bansalan, Davao del Sur.

The Agrisilvipastoral System

Agrisilvipastoral system is the combination of agricultural crops, woody perennials,
and livestock. This system includes: silvipastoral, multistorey + animals, and alleycropping
with pasture grasses and agricultural crops.

1. Agricultural System Transformed to Silvipastoral

In this system, the initial cropping combinations include tree seedlings and
annual agricultural crops as in the taungya system. As the trees grow and close their
canopies, it will no longer be possible to grow annual agricultural crops. Instead,
shade-tolerant grasses and vines will take over the forest floor where animals are
allowed to graze freely as in livestock-under-tree system.

2. Multistorey + Animals
This is similar to the multistorey under agrisilvicultural system, except that in
this case, grazing animals are an added component. A good example is the coconut-
lanzones mixture, with horses (or cattle) grazing under them as observed in Laguna
and Quezon provinces.

3. Alleycropping with Pasture Grasses and Agricultural Crops

 This is similar to hedgerow cropping with pasture grasses. However, instead of
all alleys planted to agricultural crops, some alleys in between the hedgerows are
grown with improved pasture grasses and/or fodder trees or shrubs which are regularly
cut and fed to livestock.
Developed Agroforestry Technologies/Systems practices in the Central Visayas
The system makes use of the SALT or Sloping Land Agricultural Technology (SALT
1), and its three variations, the Simple Agro-Livestock Technology (SALT 2), Sustainable
Agroforest Land Technology (SALT 3), and Small Agrofruit Livelihood Technology (SALT
4).

The SALT and its history

Sloping Agricultural Land Technology (SALT) was developed on a marginal site in
Kinuskusan, Bansalan, Davao del Sur, Philippines. In 1971, the Mindanao Baptist Rural life
Center (MBRLC) started to employ contour terraces in sloping areas. Dialogues with local
upland farmers’ acquainted the center with farm problems and needs which give the impetus
to work out a relevant and appropriate upland farming system.
From testing different intercropping schemes and observing Lucaena species (ipil-
ipil)–based farming system in Hawaii and at MBRLC, the SALT was finally verified and
completed in 1978. the following guidelines were considered in the development stage:
adequately control soil erosion, help restore soil structure and fertility, efficient in food
production, applicable to at least 50% of hillside farms, easily duplicated by upland farmers
with the use of local resources and preferably with out making loans, culturally acceptable,
have the small farmer as the focus and food production as the top priority, workable in a
relatively short time, require minimal labor and economically feasible.
SALT, according to MBRLC director Jon Jeffrey Palmer, grew out of the problems
that farmers expressed to the MBRLC staff during informal meetings, as well as data gathered
from actual visits. Low and declining farm yields, Palmer said, were the foremost problems
mentioned by the farmers. Deforestation, soil erosion, and inappropriate farming
technologies, Palmer added, were seen as the three major causes of low farm productivity.
Traditionally, farmers’ practices have been judged to be inadequate, and thus below
standard, when measured against ‘modern’ agriculture, which relies heavily on improved
varieties, commercial fertilizers, chemicals, etc.," Palmer explained. However, these same
"modern" methods, even though scientifically proven, Palmer added, are often out of reach of
the majority of the world’s farmers and can actually cause a decrease in productivity if not
used properly.
The guiding principles of SALT are that it must adequately control soil erosion; help
restore soil structure and fertility; must be efficient in food and crop production; applicable to
at least 50 per cent of hillside farms; easily duplicated by upland farmers with the use of local
resources and preferably without making loans; culturally acceptable; have the small farmer
as the focus and food production as the top priority; workable in a relatively short time;
require minimal labor, and be economically feasible.
In addition, MBRLC recognizes that even "poor" farmers deserve to eat nutritious
food, which it believes is possible through SALT. For this purpose, the MBRLC envisions for
SALT to serve as an alternative to the low-yielding or otherwise high-chemical input
problems of the ordinary farmers from both upland and lowland areas.
Simply put, SALT is an integration of soil conservation and food production
strategies, involving the cultivation of complementary crops in a field where rows of nitrogen-
fixing trees provide natural fertilizer and prevent soil erosion.
The idea, according to Palmer, is to maximize the use of the "small family farm"
through the "marriage" between animals, trees, crops, and other natural resources, each of
which helps sustain the productivity of the other, and at the same time, preserve the soil and
its fertility. SALT also includes planting of trees for timber and firewood on surrounding
boundaries. Livestock such as goats, chickens, pigs are also raised on the farm.
On a more technical level, SALT is a diversified farming system which can be
considered agro-forestry since rows of permanent shrubs like coffee, cacao, citrus and other
fruit trees are dispersed throughout the farm plot. The strips not occupied by permanent crops
are planted alternately with cereals (corn, upland rice, etc.) and legumes (soybean, mungbean,
peanut, etc.). This cyclical cropping or crop rotation provides the farmers harvests throughout
the year.
The advantages of SALT, according to MBRLC, are that it is a simple, applicable,
low-cost, and timely method of farming the uplands and even the lowlands, especially in these
financially and environmentally troubled times.
 Depending on their capability, farmers may use SALT and its different variations all
in one setting. SALT 1 or Sloping Agricultural Land Technique is be used by farmers in
upland area where it is most helpful to prevent soil erosion.

Forms of SALT

SALT I – Sloping Agricultural Land Technology.

It composed of 75% Agriculture, 25% Forestry. SALT 1 farmers who used the same
size of land earned an annual average income of P14,400, and harvested 2.0 to 2.5 tons of
corn per hectare.

SALT II – Small Agro-Livestock Land Technology.

It is a goat based agroforestry with a land use of 40% for agriculture, 20% for forestry
and 40% for livestock. SALT 2, or Simple Agro-Livestock Land Technology, is a small
livestock-based agroforestry with a land use of 40 per cent for agriculture, 20 per cent for
forestry and 40 per cent for livestock. The manure from the animals is utilized as fertilizer
both for agricultural crops and the forage crops. SALT 2 farmers earned P32,000, and
harvested 3.0 to 4.0 tons of corn per hectare.

SALT III – Sustainable Agroforestry Land Technology.

It is a cropping system in which a farmer can incorporate food production, fruit
production, and trees that can be marketed. SALT 3, or Sustainable Agro-forest Land
Technology, is a cropping system in which farmers can incorporate food production, fruit
production, and forest trees that can be marketed. SALT 3 farmers earned P20,000, and
harvested 2.0 to 2.5 tons of corn per hectare. Data for SALT 4 farmers, however, were not
available.
SALT IV – Small Agrofruit Livelihood Technology.
As the name suggests, is devoted to the planting of fruit trees (which could occupy
2/3 of the land area) and food crops (1/3 of the area). SALT 4, or Small Agrofruit Livelihood
Technology.
Several studies conducted by MBRLC showed that the use of either or all techniques
consequently enhanced the income of farmers. A 1995 on general comparison of production
benefits of local farming practices and the SALT systems as applied in several farms in
Mindanao showed the traditional farmers earning an annual average income of P6,000 and
harvested 0.55 to 1.0 ton of corn per hectare.

Making and Using an A-Frame

An A-frame is an essential tool in preparing the land for many of the agroforestry
technologies mentioned in this manual. It enables a farmer to mark the slope, or contour of
the land, so that it can be used in a way that minimizes erosion. It can be easily made by a
farmer using materials that are found in the farm.

Steps in making an A-Frame

A. Secure the following materials

- Three wooden or bamboo poles with a
diameter of about 1 and ½ inches.
Two (2) of the poles should be about
2.2 meters long and 1 should be about
1.2 meters long;

- strings for tying;

- a stone about the size of a 100 watt

electric bulb or similar materials for
weight
- Gather 3 wooden poles, some string,
and a stone
B. Tie the longer poles together securely at one end,
about ten (10) centimeters from the end. Let the
lower ends or legs stand on level ground. Spread
the legs about 2 meters apart to form a triangle.
Tie both ends of the crosspiece securely at
approximately the middle of both legs. Tie poles
together to form an A. Tie end of string to stone.

C. Tie one end of the string on top the frame, and

the stone on the other end. The stone should
hang about 1 foot above the ground when
suspended.

D. Mark point where string passes through center of

horizontal pole.

E. Prepare to use the “A-Frame” for marking level lines (contours) as follows:

1. Place the A-Frame in an upright position. Mark the sport where the legs of the
frame touch the ground. Then mark the crossbar where it is crossed by the
weighted string.
2. Reverse the position of the A-Frame’s legs such that left leg is exactly on the same
spot where the right leg was and vice-versa. Again, mark the crossbar where is
crossed by the weighted string.
3. Now place a permanent mark midway between the first mark and the second mark.
4. When the string crosses the permanent mark this means both legs are resting on
the level line.
 5. Move the A-Frame to another site and position it such that the weighted string
passes through the permanent mark or mid-point. Mark where the legs touch the
ground.
6. Reserve the position of the leg as in (b) above. If the string passes through the
same point, this means that the A-Frame is standing on level ground and that the
middle mark or mid-point indicates level position. If not, repeat the same
procedure to find the correct mid-point on the crossbar.
7. Pivot leg around until string hangs over midpoint. Drive stake into ground.

Marking the Contour Lines with the A-

Frame

A. Soil erosion begins at the top of a slope.

Prevention measures should also begin
at the top. The starting area should be at
the steepest slope where contour lines
will be closest together. As the slope
becomes more gentle, the lines will
gradually be further apart.
B. Drive in the first stake and place the first leg of the A-Frame beside the base of the
stake. Position the second leg such that the weighted string passes through the mid-
point mark (level position marker) made on the crossbar. When this happens it means
you have found the contour line which is a level line between the 2 legs of the A-Frame.

C. Move the A-Frame forward by placing the first leg on the spot where the second leg
stood before. Adjust the front leg again until the weighted string passes through the
mid-point mark on the cross bar. Mark contour lines. Follow this procedure until you
reach the boundary on the other side of the field.
Alternative Tools for Locating Contour Lines
There are a number of alternative tools that one can use in locating contour lines. For
example, one may use an ordinary carpenter’s level in place of a weighted string. The level is
tied securely on top of the A-Frame described in the proceeding section, except that there is
no need to find the mid-point or level position on the crossbar. The 2 legs of the A-Frame are
on the same level when the air space in the level stops in the middle.
Another alternative is to use a transparent plastic tube. Secure a 5 meter plastic tube
with a diameter of from 3/8 to ½ of an inch and fill it up with water. Hold one end of the tube
against the first stake, with end bent upwards to prevent the water from spilling out. A second
man holds the other end (also bent upward). Next, move the front end of the tube slowly up
and down until it is at a point where the water will level off near the tube end on both sides.
The second man would then drive a stake into the ground immediately below the front end of
the tube. The plastic tubing is moved forward, with one end held against the second stake and
the other end adjusted until the water levels off near the end on both sides of the tube as
before. Follow this procedure until the boundary on the other side of the field is reached.

Ways of Approximating the Degree of Steepness and the Distance Between Erosion
Control Hedgerows
Determining Steepness
In approximating the degree of steepness of the slope, the following practical
procedures may be used:

A. A Practical Way
1. Get two sticks, one with a length of 1.80 cm and the other, 90 cm.
2. Stand upright facing the hillside. Hold the stick at one end and point directly in
front of you, in a level position, with your arm fully extended.
- If you can touch the hillside with the short stick (90 cm) while standing upright
and holding the stick level, this means the slope of the land is approximately
100 %. A 100 % slope rises at a 45 degree angle.
 - If you can touch the hillside with the longer stick, but not with shorter one, this
means the slope is approximately 60 %. If you cannot touch the hillside with
the longer stick, this means the slope must be less than 60 %.

NOTE: Results obtained from the above procedure are approximate and will vary slightly with
the stature of each person. However, in practice this difference is insignificant.

B. With the Use of an Abney Level

A more accurate way of determining the degree of slope is with the use of an Abney
level.
1. Find a convenient reference point on the upper side of the slope or hill. It could be
a tree or a stick driven erect into the soil. Mark a clean reference point on the tree
(or stick) at about the level of your eyes.
2. Stand erect at the foot of the hill or slope and sight the Abney level on the
reference point marked on the tree trunk or stick. While the Abney level is sighted
fixed on the reference point, adjust the leveling knob until the airspace stops in the
middle.
3. Read/record the degree of slope (in percent) as automatically indicated in the
Abney level.

Determining the Distance between Hedgerows

The distance between contour lines will vary with the degree of slope. Steeper slopes
mean closer contour lines.
Horizontal distance is not as important as vertical distance. One and a half-meters or
five feet, is generally considered the optimum vertical distance between contour lines. This
translates into more or less the average distance from an adult’s shoulder to his foot.
If a farmer is planting a hedgerow of trees whose leaves can be used for green
manuring (fertilizer), the distance between contour hedgerows should be no more than 3-6
meters horizontally measured. This spacing will usually mean hedgerows are capable of
supporting the fertilizer needs crops of growth between hedgerows. For a practical way of
approximating the distance between erosion control hedgerows in relation to the slope,
proceed as follows:

A. Begin at the upper side of the slope and work your way down. First locate the
upper-most contour line where you are going to plant the first contour hedgerow.
Mark the spot with a stake.

B. Move downhill approximately 1.5 meters (vertical distance). Hold one hand directly
in front of you in a fully extended position and pointing directly at the stake you just
drove in before you moved downhill. Sight along your arm and move up-and-down
the hill until your arm is level when pointing at the base of the stake. The spot on
the hillside where you are standing shall be the location of the next contour
hedgerow. Mark the spot where you are standing with a stake.

C. Follow the same procedure as in no. 2 until you reach the bottom of the slope.

Sizes of A-Frame/Materials Used

Each A-Frame transit may vary in size, depending on who will use it and the type of
terrain being contoured. Children would work better with a transit like one to one and a half
meters tall. Adults may make a transit more than two meters in height. For gentle slopes with
very few obstructions an A-Frame with a five to six meter base may prove useful. There is no
standard size.
An A-Frame may be with several types of materials: finished wood, bamboo, tree
stems, nails, vines, string and rock. The important thing to remember is to choose materials
which may be used by as may local people as possible. If expensive or “imported” materials
are used, farmers may conclude they cannot make the structure because materials are lacking.
It is up to the ingenuity of each participant to select the proper building materials from his
own site.
Using the A-Frame Transit to Measure Grades
Many times a graded line, canal or trail needs to be constructed on a farm. The A-
Frame can be used to establish grade lines. To calibrate the A-Frame for measuring grades,
first measure the horizontal distance between the feet. Then lift one leg high enough to create
the required ratio between the height and A-Frame base width. The point where the string
now crosses the enter bar is marked. Example: let us assume that the horizontal distance
between the feet is 200 cm. To calibrate for a 10 % grade line raise one leg to a height of 20
cm. and mark where the string crosses the bar. The ratio of 20/200 can be reduced to 1/10 or
10 %.
Each time the newly marked point is used as the center, it means a slope of 10 % is
being measured. For some canals, a one percent slope for drainage is necessary when the area
constantly receives heavy rains. In this case a 200 cm. wide A-Frame would have its legs
raised 2 cm. and a point marked. Frequent recalibration is a necessary when marking a
graded line as when making a level contour line.

Difficulties arise in the field

When using the A-Frame transit to mark level contour lines, certain situations a rise
which hinder measurement. The list below illustrates some of these problems as encountered
by farmers using the A-Frame transit. The stated solutions are by no means the only answer
but only suggestions.

A. Gullies
Contour lines sometimes run across deep gullies. Continuing the contour line on the
opposite side can be a problem for beginners. Several solutions have been found:

1. Stand below the gully and simply estimate where a line would start; continue from
that point.
2. Construct a check dam on the contour line that would run across the gully and
continue the contour line on the opposite side.
 3. Use the A-Frame to measure around the gully, continuing the line until it emerges
on the opposite side.
B. Large Rocks / Trees
These obstacles may be handled like gullies (1a and 1b above). Alternately, the
tree/rock may serve as a base point for canal or line, or may be removed from the area.

C. Plowed Fields
Measuring in a plowed field with deep furrows can be tricky. The A-Frame user must
decide if he will measure from the furrow bottom and remove chunks of plowed soil or from
ridges created by the plowing.

D. Cogon / Talahib Grass

When tall grasses are encountered they must be removed so the A-Frame may pass easily
across the field. It is suggested two persons will sharp bolos or knives work in front of the A-
Frame clearing a line 1-2 meters wide along the estimated route.

E. Muddy Fields
In areas where rains have made the soil sticky, care should be taken to regularly clean
the A-Frame feet. Accumulated mud may cause one leg to become longer, thereby altering
the center. This will result in a sloping rather than level contour line.

F. Wind
Strong wind will create problems in field measurement. The plumb bob will swing
making the centering process difficult. To counteract: 1) a very heavy weight could be used;
2) some farmers place two nails on either side of the center line, or use an additional piece of
bamboo to create a slot for the string. These two devices restrict the swing in strong winds.

G. Limited Stakes
Sometimes, stakes are in short supply. It is not necessary to have a stake every two
meters or so. Every other stake may be pulled out and used again.
Calibration
A. Finding the center point where both legs are level should be done very frequently
to avoid sloping lines. Calibration at least once every half hour of field work is
usually necessary. At the beginning of each field session, calibration is a must.

The reasons for movement of the initial center point are varied. Frequently, the A-
Frame connection points will slip or become united; wood will dry out and shrink.
A small error on the transit may be translated into a large error in the field.

B. How to overcome a calibration error. Frequent calibration is the most practical

way to overcome calibration errors. However, another way is to reverse the legs of
the A-Frame each measurement. This way, one measuring unit that marks a line
too low will be compensated when the next measurement marks the line too high.
A small contour line adjustment will find a common level.

Smoothing the Curve

The average A-Frame is about two meters at its base. Because this is a short distance,
a contour line when marked in the field, appears to be very crooked. Small changes in
topography shift the A-Frame. Small adjustment of the various stake positions can “smooth
the curve”, creating a line which a carabao can easily plow. If trees or grasses are planted
along this smooth line, the result is aesthetically beautiful yet functional.
 THE CONCEPTS OF A MARKET
Market is a place where buyers and sellers engage in exchange of goods and services.
Marketing refers to the process whereby individuals & groups obtain what they need
and want through creating and exchanging products and value with others. Marketing also
refers to performance of all activities involved in moving AFPTs from the point of production
to the point of consumption.

A market may be held to mean any of the following.

1. A body of organization of buyers and sellers. Examples: Buying and selling of fruits,
vegetables, livestock, furniture, charcoal, grains, cereals, and others.
2. A geographical area. As a geographical area, the Philippines may be considered as a
good market for American products in the belief that they are always of good quality. In
the same manner, the Bicol region may be conceived as a market for copra, that is, where
copra is sold and bought.
3. A combination of forces which determines price and exchange opportunity. In
economic theory, the term market means “the general conditions under which buying and
selling are conducted.”

THE MAJOR CLASSIFICATIONS OF MARKET

1. Consumer market refers to the aggregate of all individuals acting on their own volition
and/or on behalf of their families. It caters to the wants and needs of the population. It is
the biggest market among the three.

2. Industrial market. Industrial goods are the objects of exchange in the industrial market.
It composed of goods that are consumed by organizations in the production of consumers’
 goods or other industrial goods or in conducting an enterprise. The purchase of industrial
goods like installations, operating supplies, and raw materials is likely to be negotiated by
professionals, whose business is to buy that is, by purchasing agents acting on behalf of
certain companies.

3. Government market. The government market do not receive as much attention and
interest from writers of marketing textbooks in particular as that of the consumer and
industrial market. The government market is an integral and important component of the
entire marketing system. The government which is a public corporation like that of a
private business enterprise needs supplies, materials, equipment and others to continue to
discharge its multifarious functions to its clientele.

KEY CONCEPTS OF MARKETING (Diane Russell, Kaala Moombe & Cori Ham)
Marketing is about producing the right product, placing it at the right place for the
customer to buy it at the right price and promoting it to the right customer

Some key activities of marketing include:

a. Analyzing the needs of the people who will use the product;
b. Predict the type of products of different customers want and decide which business
will try to satisfy;
c. Estimate how many people will use the product and the volume they will buy;
d. Predict exactly when people want to buy the product;
e. Determine the locations of the customers and how to get products to them;
f. Estimate the price they will pay for the product and if the business can make a profit
selling at that price;
g. Decide the kind of promotion should be used to tell potential customers about the
products;
h. Estimate the number of competing companies making similar products. Estimate how
they produce, the product and the prices; and
i. Figure out to provide services after sales when customer found problems with the
products they bought.
 The market concept is all about marketing strategies based on knowledge regarding
consumer needs. These needs as well as consumer behavior and attitudes affect every aspect
of marketing strategy. Success in marketing depends on defining these and directing
marketing strategies towards meeting them. This information is needed to define and segment
the market, plan market strategies and evaluate market strategies (Assael, 1987) so that in the
end the customer is satisfied.

Product Price
Variety, quality,
Low price, discounts,
feature, packaging,
allowances, payment
sizes, services, etc. period, credit terms
TARGE
T
MARKE
Place T Promotion
Channels, coverage, Sales promotion,
assortments, locations, advertising, sales force,
inventory, transport public relations, direct
marketing

The Four Ps of Marketing Mix (Modified from Kotler, 1994; p.98)

Product – what is the product, characteristics or attributes.

Price – how is the product to be priced, how competitive, to what extent should the price
reflect value added
Place – distribution channels, selling strategy, mode of sale
Promotion -strategies to increase purchases of buyers (advertising, brochures, credit or
discounts, etc.)

Key concepts of marketing relevant in the marketing of natural products

1. Consumer behavior
The acts of individuals directly involved in obtaining and using economic goods and
services. This includes the decision processes that precede and determine the acts (Baker,
1991). Consumer behavior stresses the interaction between the marketer and the consumer.
The core of the model is the process of perceiving and evaluating product information,
considering how brand alternatives meet the consumer’s needs and deciding on a brand,
which is essentially a consumer’s decision making process. Such choice processes are
influenced by the following factors (Assael, 1986; Kotler, 1994):
 The Individual consumer: The consumer’s needs perceptions of the product and its
characteristics and attitudes toward alternatives. Also the consumer’s demographic,
life-style, age, economic circumstances, occupation and personality characteristics
including self-concept;
 Environmental influences: Cultural (culture, subculture and social class), social
(reference groups, family and roles and statuses) and situational determinants
 Marketing strategy: This factor represents variables (The 4Ps) within the control of
the marketer that attempt to inform and influence the consumer. These variables
maybe regarded as stimuli perceived and evaluated by the consumer in the process of
decision-making.

2. Market segmentation
Customer behaviors differ with not all customers demanding the same type of product
or service. To ensure that specific customer demands are met, market segmentation is used to
define possible target markets. Segmentation is an aggregation process where people with
similar needs are clustered into a market segment with homogeneous group of customers.
The criteria of a good market segments are the following:
 The customers in market segment are similar as possible with respect to their likely
responses to the specific marketing mix
 Customers in different segments are different as possible with respect to their likely
responses to the marketing mix
 The segments are big enough to be profitable.
 The segment dimensions are useful for identifying customers and deciding on
marketing mix variables.

3. Demand
Demand is the starting point in market analysis and enterprise development. The
factors influencing demand include price, availability and seasonality.
 The general relationship between price and quantity demand is called the law of
diminishing demand which says that if the price of a product is raised a smaller quantity will
be demanded and if the price of a product is lowered a greater quantity will be demanded.
Inelastic demand means that although the quantity demanded increase if the price is
decreased, the quantity demand will not “stretch” enough to avoid a decrease in total revenue.
In contrast, elastic demand means that if prices are dropped, the quantity demand will stretch
(increase). Thus elasticity can be defines in terms of changes in total revenue. If total revenue
will increase if price is lowered, then demand is elastic. If total revenue will decrease if price
is lowered, then demand is inelastic.
The demand price relationship is influenced by the availability of product. In general,
consumers are willing to pay more for a scarce product. The willingness to pay more will be
affected by factors such as availability of substitutes, the importance of the product in the
customer’s budget and the urgency of the customer’s need and its relation to other needs.
Industries based on indigenous fruits would be subjected to strong seasonal forces.
During the fruiting season it is possible to procure raw materials at a lower price as fruits are
available in abundance. At the beginning and end of the season prices become higher as fruits
are less available. Processing enterprises find that there is less of a demand for their products
during the fruiting season as consumers can process their own products or consume fresh
fruits. Demand for processed products would then increase in the time between fruiting
seasons. One way of evening out sales would be to provide seasonal discounts where the
prices are lowered when fruits are in abundance and raise prices gradually as substitute fruits
become less available.

4. Product
Product means the need-satisfying offering of a firm. The offering require a “total”
product offering that is really a combination of excellent service, a physical good with the
right features, useful instructions, a convenient package, a trustworthy warranty and even a
familiar name that has satisfied the customer in the past. Products can be divided into product
classes according to the way people buy them:
 Convenience products are products that consumers need but are not willing to spend
much time or effort shopping for. The products are bought often and require little
service or selling, do not cost much and may even bought by habit.

 Shopping products are products that a customer feels are worth the time and effort to
compare with competing products. Customers compare products that are verily
similar on price (e.g television sets) and other time they want to compare the quality
and suitability of products before making a choice. In this instance price does often
not play a role.

 Specialty products are consumer products that the consumer really wants and makes a
special effort to find. It is the customer’s willingness to search and not the extent of
the search that makes it a specialty product. Any branded product that consumers
insist on by name is a specialty product.

 Unsought products are products that potential customers do not yet want or know they
can buy. New unsought products are products offering really new ideas that potential
customers do not know about yet. Regularly unsought products such as gravestones,
life insurance and encyclopedias stay unsought but not unsought forever.

 Branding means the use of a name, term, symbol or design (or a combination of
these) to identify a product. It includes the use of brand names, trademarks, and
practically all other means of product identification. A brand name is a word, letter or
group of words or letters (ICRAF, Levi). A trademark includes only those words,
symbols or marks that are legally registered for use by a single company (Coca Cola).
Natural products could be presented to customers at various stages of processing.
Examples include:
1. Raw product (pieces of fruit)
2. Semi-processed (coffee)
3. Certified, organic
4. Graded product (wood, cocoa)
5. Refined (filtered honey)
 6. Manufactured (furniture, statue, jam)
7. Bundled/packaged (basket of fruit)

5. Profit margin and markup

Most retailers and wholesalers set prices by adding an amount to the cost of products
to get the selling price. The amount is normally a percentage of the cost of the product and is
called a markup. Many retailers think that high markups mean big profits. This is often not
true as it may result in a price that is too high resulting in a price few customers willing to
pay. Some retailers and wholesalers try to speed up turnover to increase profit even if it
means selling at a lower price and smaller markup. They realize that a business runs up costs
over time. If they can sell a much greater amount in the same time period, they may be able
to take a lower markup and still earn higher profits at the end of the period. The sellers of
fresh produce such as fruits would add a fairly low markup as they cannot afford to wait for
customers willing to pay high prices. They need a fast turnover rate to prevent their products
from spoiling. Manufacturers of luxury goods and for example jewelry would have a fairly
high markup rate as their production processes would be slower, preventing them from selling
a large quantity of low priced products.

6. Value addition
When raw material is transformed into a product value is added. The raw material
becomes more usable to consumers and they would be willing to pay more for it than in the
raw material format. Value can be added in various ways to raw material. These include:
a. Selection and grading of raw material (e.g fruit)
b. Preservation (e.g., boiling rattan in oil)
c. Transformation
d. Creation of product (e.g., basket)
e. Assembling (parts of a product)
f. Packaging
g. Transporting and distribution of product
Another concept associated with value addition is value engineering where the
objective is to eliminate any costs that do not contribute to the value and performance of the
product. Some ways to reduce non-value added costs is to reduce the number of components
of the product, thus simplify the manufacturing process, or to use cheaper materials. Value
addition is not restricted to the product per se. Services such as after sales care, warranties,
product information, customer help lines all add value to a product and to the customer’s
perception of product quality. Value could also be encapsulated in brand names where
customers would be willing to pay more for a specific brand than for another due to a
perception that one brand is better and of higher value.

7. Market shed
The market shed is the capture area of a market. This includes the area where
products are supplied from as well as the area where customers are from. Such market shed
could be much localized where for instance firewood is traded in a rural village. It could also
be sub-regional/national where for instance fruit products are brought from forest areas to
urban markets. In the case of products such as Amarula liqueur the market shed is
international.

8. Subsector
A sub-sector groups different commodities and products with common market chains
together. Sub-sectors in agroforestry includes:
a. Wood – Smallholder timber, poles
b. Fruit
c. Nurseries and seed collection
d. Handicrafts
e. Energy – fuelwood, charcoal
f. Fodder
g. Non-timer forest products

9. Market chain/value chain

Before a product can be sold it needs to move from the factory to a point where it
would be accessible to the consumer. Raw materials are supplied to the factory where value
is added by processing it into a product. These products are then moved to a wholesaler who
would buy large volumes of the product and sell smaller volumes to many retailers. Retailers
would then sell to the consumer. During each step of the process the value of the product
increases as the different links add their costs and profit percentages to the price of the
product. Some products have short chains (raw material sold directly to the consumer) and
other much more complex chains (processed products sold via a range of agents, wholesalers
and retailers). Weaknesses in the chain would however have an effect on the whole chain.
When the producer promotes his/her products to the other links in the market chain it
is said that he/she is pushing their products through the chain. The producer could also
promote his/her product to the final consumer who would then in turn demand it from the
retailer. This is called pulling products through the market chain.
A market or value chain can be viewed as the flow of water in a river. Organizations
located at the original source of supply are described as being “upstream” while those closer
to the end consumer are “downstream”. Vertical integration is the process whereby a link in
the market or value chain owns some of the upstream and/or downstream links. If a producer
also owns the wholesaler and/or retailer it is called downstream vertical integration. When a
producer also owns the source of raw material it is called upstream vertical integration.
Control is one of the major reasons why a link in the market chain would want to own other
links either up or downstream. Upstream vertical integration would assist in ensuring a
reliable supply of raw material while downstream vertical integration would ensure better
control over the movement of products to the consumers and the costs of the products.

10. Market systems

The exchange of goods and services between people is as old as mankind. In early
times a family would have produced only enough goods for their home consumption but as
time went by it became apparent that it is easier to specialize in the production of a few items
and to exchange your surplus items for surplus items from another person. This simple
bartering system only worked when someone else wants what you had and vice versa. Each
trader had to find others who have products of about the same value. A common money
system changed all of this as sellers only had to find buyers who wanted their products and
agree on a price. By bringing goods to a central marketplace it was also easier to find willing
buyers of goods. Markets are about more than just an exchange of goods and money. Market
systems include among others the physical infrastructure, transport systems, laws and
regulations and human role players in an interwoven system. The elements of market system
include:
a. Transportation networks
b. Policies/laws/regulations (formal and informal)
c. Communications and information systems
d. Social and cultural relations (gender, ethnicity, personal)
e. Natural resource endowments and management
f. Entertainment and sociability
g. Infrastructure (market spaces)
h. Trade organizations at all levels
i. Skills & knowledge
j. . Demographics
k. Psychological elements
l. Other markets (inputs, credit, financial)

The key element in any market system would be the people involved. These people
could include:
a. Producers and producer groups
b. Traders, middlemen, merchants, shopkeepers
c. Manufacturers
d. Salespeople
e. Policymakers
f. Transformers, processors (e.g., craftspeople)
g. Bulkers, wholesalers, distributors
h. Retailers, vendors
i. Consumers
They are bound together by different formal and informal relationships and governed
by various policies and regulations. Some of the institutions and policies that would have an
impact on the trade of indigenous products would include:
a. International trade bodies (WTO, UNECA)
 b. National rules and regulations on market access (e.g., licenses, patents, fees)
c. On specific markets and commodities (e.g., charcoal, timber, indigenous fruit)
d. Regulating boards
e. Trade associations and guilds (e.g., timber manufacturers’ association)
f. Regulations governing associations and enterprises (e.g., farmer groups registration).

Within these market systems “imperfections” are the rule not the exception. In a
perfect market supply and demand will be matched with price equilibrium. “Imperfections”
come from imperfect information, inequities in power among actors,
monopolies/monopsonies/cartels, rules and practices that encourage rent-seeking behavior.
Outside interventions such as development projects can create market imperfections through
subsidies and handouts.

11. Market analysis

Markets are analyzed according to the market structure, conduct and performance
model (SCP model). In the SCP model of industrial organization analysis, structure refers to
the economically significant features of a market that affect the behavior of firms in the
industry supplying that market. The importance of market structure induces the firms to
behave in certain ways. The behavior in changing prices, outputs, product characteristics,
selling expenses and research expenditures is known as market conduct. The SCP concept is
under the industrial organization and used as a simple but effective model to analyze
industrial organization. The model is used on the assumption that what society wants from
producers of goods and service is good performance (Scherer, 1970); and that the
performance of an economy can be measured along four major lines or goals. The market
performance is the industry’s actual contribution relative to its potential to the achievement of
the following goals (Scherer, 1970; Caves, 1977):

a. Efficiency in the use of resources. Decisions as to what, how much and how to
produce should be efficient. Thus, scarce resources should not be wasted and
production decisions should be responsive qualitatively and quantitatively to consumer
demands.
b. Progressiveness in enlarging and improving the flow of goods and services. The
operations of producers should be progressive, taking advantage of opportunities
presented by technologies for increasing output per unit of input and making available
to consumers superior new products contributing to the long-term growth of per capita
real income.

c. Stability in prices and employment. The operations of producers should facilitate

stable employment of resources, especially human resources.

d. Fairness in the treatment of individuals. The distribution of income should be

equitable. Thus, profit margins must be reasonable and prices reasonably stable.

e. Economic performance is influenced by sets of attributes that are interlinked to each

other. The model considers the Structure, Conduct and end Performance of markets or
industries (Figure 2). As suggested by the model, there is causal flow from market
structure and/or basic conditions to conduct and performance. It asserts that
performance may be predicted based on the observation of structure, conduct and
basic conditions. Performance in a particular market is dependent upon the conduct of
sellers and buyers. Conduct depends in turn upon the structure of the relevant market
like number and size of sellers and buyers, product differentiation, barriers to entry of
new actors. The market structure and conduct are also influenced by various basic
conditions. Within this relationship, there are also feedback effects like product
differentiation and costs may be altered by research and development strategies
(Scherer, 1970).
 General paradigm of the extended SCP approach
External
framework of
conditions
Decision
making Conduct in Performance
Structure of environment the in the
the subsector for subsector subsector
(horizontal enterprises (horizontal (horizontal
Decisions and vertical and vertical
and vertical (alternatives,
dimensions) incentives dimension) dimension)
power)

The SCP approach (Source: Hormann, 1992)

THE IMPORTANCE OF MARKETING

1. Marketing farm products and Agroforestry tree products is an extremely important part of
the country’s economy.
2. Marketing adds value to products.
3. Marketing of farm products is a vital, significant part of the daily life of the people and the
economic life of our country.
4. Marketing has also been known for its contribution to what economists call as the
“Multiplier effect”.

THE ESSENCE OF MARKETING

The essence of marketing today is evidenced in five major areas of economic
endeavor. To fulfill and utilize the marketing concept to serve the needs of the company and
in turn increase its sales, a marketing organization must focus its attention and be willing to
do the following:
1. Define its market area
2. Research consumer needs and wants
3. Develop and redevelop product and/or service to meet the demand
4. recruit, select and train manpower to deliver the product or service to the target market
and
 5. Develop its marketing policies in consonance with its profit objective without
forgetting its social responsibility to the public it seeks to serve.

The Core Marketing Concepts

Needs, wants & demands

Market
CORE MARKETING Products &
CONCEPTS Services

Exchange, transactions
Value, satisfaction &
& relationships
quality

Shows that these core marketing concepts are linked with each concept building on the one
before it

The ROLE OF MARKETING (Mendoza, 2003)

Marketing is a pervasive activity affecting our personal life and our socio-economic
structure. The following are its significant roles.
1. As a career, a profession. Some of the challenging careers are advertising, market
research, personal selling, wholesaling, transportation.
2. Standard of living. It raises our standard of living by bringing efficiency, convenience
and technology within our reach.
3. Economic stability. More sales and more profit move the wheels of economy-
production, employment, capital etc. more efficient.
4. Employment. The roles mentioned provide millions of jobs to people, even to those who
are not marketing graduates.

A. Objectives of marketing
a. Micro level
– Individual farmers, firms, households
– Group of farmers, cooperatives
 – Community level

b. Macro level
– Poverty alleviation
– Food security and availability of affordable, good quality and safe food products
– High levels of agricultural production/productivity
– Environmental protection/sustainability

The APPROACHES TO MARKETING (Mendoza, 2003)

A. Traditional-Commodity, Institutional and Functional
1. Commodity or product approach – process on how to market a product, group of
products or service. This is used in solving highly specialized marketing problems
like when differences in principles and strategies exist.
2. Institutional approach. Provides a useful analysis of the nature of operations,
evaluation and function of a particular institution such as producers, wholesalers,
retailers and various agencies.
3. Functional approach. Consist of activities as research, product planning, development,
pricing, advertising, sales promotion, standardization, distribution and others

B. Contemporary Marketing Approaches

1. Marketing mix or 4P’s (product, promotion, price and place). These are variables that
a company may use in mapping a successful marketing strategy. Each P is interrelated
to all other P’s.
Marketing success = desirable product + acceptable price + effective promotion +
right place.
Product

Promotion Consumer Price

Place
2. Conceptual approach. Studies ideas of marketing rather than activities. This is
viewed as a means of advancing the understanding of marketing as a tool aiding
analysis and logic and thereby communicating ideas. They seek ways to improve
marketing and to solve marketing problems through research, logical analysis and
innovative thought. An earlier counterpart of this approach is “Consumer is King.”
The consumer is like a king whose right must be understood and respected. Every
business enterprise must produce something which the consumer wants most, or it
goes out of business. This is the reason why economist describes the consumer as
king.

3. Holistic approach. It is based upon the understanding that activities or processes are
interdependent upon other activities or processes. It is a unified or holistic view of
marketing. The four P’s are interrelated. It integrates the functional, commodity,
institutional managerial, social, comparative, marketing mix, and the conceptual
approaches into one comprehensive whole.

4. Marketing management. It is the managerial approach to marketing. It is an analysis,

planning, implementation, and control of programs designed to bring changes in the
target market for the purpose of achieving organizational objectives. It relies heavily
on designing the organizations offerings in terms of the market’s needs and desires,
and using effective pricing, communication and distribution to uniform, motivate, and
serve the market. The marketing management tasks are as follows:

a. Conventional tasks. It tries to charge people’s wants rather than serve their wants;
e.g. losing a deal with a buyer who is not convinced to get an insurance plan. This
is a hard task.
b. Stimulating marketing. It tries to create a liking for something of which he has no
knowledge.
c. Development marketing. It persuades consumers that a new product is a substitute
for something; e.g. looking for a substitute to oil.
 d. Remarketing. Refers to the rebuilding interest in the stock market facing a tight
money situation.
e. Synchromarketing. Refers to the changing pattern of demand to match the time
pattern of supply.
f. Maintenance marketing. It refers to the maintaining sales against the erosive
forces of competition. Ready to change or innovative product just to maintain the
level of sales.
g. Demarketing. It tries to reduce demand in a temporary or permanent basis. e.g.
Encouraging consumers to reduce their energy consumption.
h. Countermarketing. Trying to destroy the demand or interest in a particular product
or service. e.g. anti-smoking campaign.

5. Macro-marketing. It looks at the economy’s entire marketing system to see how

efficient and fair it is. It relates to the overall function of marketing in the society, its
operations, volumes marketed, numbers of persons employed, average size of
institution.
6. Micro-marketing. It examines the individual firm within the economic system. Its
operations, objectives, functions and problems. Its concern is specific institution and
practices. If macro-marketing aims to accomplish economy’s objectives,
micromarketing aims to carry out specific company objectives.
7. Social concept. It depicts marketing as a social institution rather than merely as a
business activity or economic process. It is viewed as a social interaction. It has
social responsibilities to competitors, suppliers, community, the nation and consumers.
8. Comparative marketing system. This is corollary to the social concept of marketing.
It recognizes existing environmental differences, marketing within different countries
and between them. Other names referring to this are “world marketing”,
“international marketing”, ‘international trade”, “national marketing”, and “foreign
marketing”.
 THE MARKETING MANAGEMENT PHILOSOPHIES
1. Production Concept
The consumers will favor products that are available and highly affordable and
that management should therefore focus on improving production and distribution
efficiency.

2. Product Concept
The consumers will favor products that offer the most quality, performance, and
features and that the organization should therefore devote its energy to making continuous
product improvements.

3. Selling Concept
The consumers will not buy enough of the organization’s products unless the
organization undertakes a large scale selling and promotion effort.

4. Marketing concept
The marketing management philosophy depends on determining the needs and
wants of target markets and delivering the desired satisfactions more effectively and
efficiently than competitors do.

5. Societal marketing concept

The idea that the organization is to determine the needs, wants and interests of
target markets and deliver the desired satisfactions more effectively and efficiently than
do competitors and in return it will improves the consumers and society’s well being. The
societal marketing concept is the newest of the five marketing management philosophies.

THE MARKETING METHODOLOGY

A number of general myths exist about marketing and markets. Some of the most
common ones are presented in Table 1 (Common myths and truths in marketing methodology.
Application of marketing approaches to Agroforestry Tree products.
 MYTH TRUTH
If we build it,
they will come
First understand demand. Producing more might even glut the market
(produce more
=sell more
The market determines the enterprise model. Groups may or may not be
Forming a appropriate. It is often assumed that farmer groups are the best mechanisms for
group is the first enterprise development. Individual entrepreneurs are motivated to create enterprises
step in for the benefit of themselves and their families. Farmer groups can be effective for
enterprise training but very often cannot function as viable enterprises because individuals’ and
development families’ group goals differ and change over time. In some groups there may even
be a significant exploitation of weaker members’ labor for the benefit of leaders.
Traders and
Traders perform an essential and risky function. Margins are high because costs
middlemen are
and risks are high.
exploiters
Over-regulation inhibits market performance. Lowering transaction costs
enhances investment. In most African countries, markets are already heavily
regulated both formally and informally (through people and groups already in the
Markets needs
trade). Desired trade liberalization has not worked largely because of informal
more
regulations that persist despite policy change. Streamlining and simplifying
regulations
regulations as well as curtailing opportunities for rent-seeking through informal
regulations (such as opportunistic road barriers) could greatly enhance economic
growth
Value addition can be more expensive and labor intensive than it’s worth. Start
with selection, grading and storage. Value addition (from NGO and projects) can be
Value addition more expensive and labor-intensive than it’s worth and often involves subsidies that
always adds are unsustainable. Often the first best steps are to improve selection and simple
value grading of raw materials (this is a form of value addition but often not considered as
such because it is not very exciting). Each “value step” adds to the price but also the
cost.

Characteristics of an Agroforestry market

a. Many small-scale producers, rather than a few large enterprises

b. Many products traded in relatively small volumes; others are high-volume
c. Seasonal production, storage problems, price fluctuations
d. Producers lack market information and negotiation power
e. Often low level of value adding
f. Lack of export promotion agencies and marketing support
g. Often lack of standards (e.g. quality and packaging)
 h. Opportunities for ‘niche markets’ – organic production of coffee; fair trade
i. Organizations/institutions can have great impact on improving markets and developing
‘brands’, e.g. OTOP in Thailand
j. Immature financial support system, access to capital may be difficult
k. Production on communal land, which will not suffice as collateral for credits
l. Policy and regulation issues – trade and transport policies and fees, etc.
m. Difficult to make traditional economic calculations on ROIs in mixed agroforestry
systems
n. No single institution devoted to markets for AFTPs
i. research center
ii. export/import promotion agency
iii. association for producers or traders
iv. information center or website for market information

o. Knowledge about agroforestry markets is fragmented and diverse; not easy to access
p. Trade statistics are mixed up with those of forestry and agriculture
q. The informal sector is very significant, by-passing trade statistics entirely
r. Limited knowledge on agroforestry markets’ importance to farmers’ livelihoods

The Development of efficient agroforestry market mechanism

Market mechanisms provide the link between producers and consumers and consist of
traders, processors, transport service providers, and other agents, as mentioned above. The
challenge is to promote the development of mechanisms that provide relevant, accessible and
efficient marketing services for tradable as well as non-tradable products and services. It
should be emphasized that the constraints and opportunities that market actors face are
context-specific and need to be established in direct interaction with them. This exploration is
likely to bring out concerns in the following fields.
 Issues and constraints of Agroforestry marketing (ICRAF 2005)
1. Contested access to the (forest) land where products and services are obtained
2. Limited physical access to markets within ‘shelf-life’ of the product
3. High transaction costs, taxes or other economic hurdles, linked to government
intervention and policies
4. Lack of information on market quality/price relations and limited negotiation ability
5. Strong fluctuations in market prices and associated uncertainty for small-scale,
community-based enterprises.

The policy, legal and regulatory framework

Policies, laws and regulations need to be framed with explicit recognition that most
market actors in rural areas whether men or women operate in the informal economy and that
those in the formal sector are often small and not too sophisticated. This means that policies,
laws and regulations should be supportive of the informal economy rather than reflect a
commonly held view that the informal economy is inefficient and should be discouraged in
favor of the formal economy.
Small entrepreneurs are often disadvantaged in policy, legal and regulatory
frameworks as a result of a negative attitude towards informal sector activities combined with
modernization aspirations, attempts to attract foreign private investments and the ambition to
build an industrial sector. Resulting high regulatory and legal barriers to entry, far-reaching
demands for reports and information to authorities, and high demands in respect of technical
standards etc. often inhibit the emergence and growth of small enterprises in rural areas.
A reduction of such regulatory and legal barriers to entry is essential to address a
number of constraints resulting from few and weak market actors, for example non-reliable
services, monopoly pricing, extortion and high transaction costs. Measures in other field such
financial services and entrepreneurial skills development will also be necessary to reduce
barriers to entry.
The private sector is generally assigned an important role in macro policy statements.
However, there are often reasons to critically assess the extent to which such policy
statements are implemented. Such an assessment may reveal subsidized government
involvement in processing and marketing thereby distorting competition, price controls,
discriminatory taxation, poorly formulated or a lack of company laws, insurance laws, labor
laws, financial legislation, etc. The development and enforcement of labor laws that protect
poor women and children from exploitation and abuse is of particular relevance.

Governance and law enforcement

SIDA addresses good governance as a development concern in a broader perspective
than just market development. At the same time there are reasons to recognize the
significance of good governance also in the latter context. Corruption is particularly harmful
to market development. It limits competition and it increases transaction costs by
necessitating out of pocket expenses for bribes. Corruption also sets a standard of dishonesty
in business transactions that permeates all links in the marketing chain. Furthermore,
corruption promotes market actors on the basis of their willingness and ability to pay bribes
and on the basis of relationships to license providers, contract providers, etc., rather than on
the basis of business efficiency and competence. In the end the resulting malfunctioning of the
market mechanisms will limit the potential of the rural poor to engage in markets.
Corruption is regarded as something serious and unfortunate but not beyond remedy.
A concrete and credible program for addressing corruption is part of any serious attempt to
apply a market based development strategy. Governance is also about administrative
efficiency. Red tape and unqualified political and administrative bodies can result in
inefficiency that makes the operation of businesses in the formal sector difficult. Such
inefficiency is particularly harmful if the regulatory framework is complex and overburdened
with requirements and involves many different government offices.
Finally, a legal and regulatory framework is only useful if it is enforced. An
inefficient and corrupt judiciary system is a constraint that tends to favor those with power
and seldom the poor. This also means that small market operators are disfavored in business
relations with bigger and more powerful operators. Like good governance, the development of
judiciary systems is significant in a much broader perspective than just market development.
Sida provides support to a number of partner countries in this area from which market
development will benefit.
Physical infrastructure
Access to electricity and telecommunications is essential for many market actors on
the demand side particularly for those who are considering entering into processing. Trading
in grain generally implies movement, handling and storage of large quantities not necessarily
by individual traders but by all traders in an area. Policy regimes, grain stores are often
constructed and operated by state agencies. Such storage facilities are made available to
private traders either through sale or leasing agreements. Construction of market places for
retail and wholesale trading if located and designed to reflect the preferences of sellers and
buyers, can contribute to easier access and reduced transaction costs.

Financial services and entrepreneurial skills

Trading in agricultural inputs such as fertilizers, and more importantly, trading in
agricultural output, is highly seasonal. Furthermore, the capital required to purchase crops put
on the market at harvest time (notably grain) is large by any measure in many partner
countries. The inability or unwillingness of financial institutions to fully finance traders to
absorb the quantities offered to the market simply means a reduction in effective demand. As
farmers often have a great need for cash, the result is flooded markets and a downward
pressure on prices. Farmers also face the risk of not being able to sell their output or to
deliver produce to traders with a promise to be paid later, which means uncertainty and risk.
These problems have to be addressed from different perspectives (including the conditions on
farmers’ production loans and on-farm storage). One perspective is to see what can be done
to ensure adequate funding of traders’ capital needs.
In addition to financial services for the purchase of farm outputs, market agents also
require financial services for other trading transactions and for equipment (e.g. vehicles) and
processing facilities. Market entrepreneurs often benefit from improved skills and capabilities
(managerial, administrative and technical). This would increase their efficiency, thereby
reducing transaction costs. The provision of training can contribute to this end and it can be
designed and provided to reduce barriers to entry. If such training is given in selected centers,
this can be a further attraction to establish businesses in these centers.
Rural centers
A government can influence this development proactively in order to increase the pace
at which market actors extend their outreach and penetrate areas with poor market access. A
development of this type can be promoted by providing infrastructure (streets, electricity,
telecommunications infrastructure, water and sanitation facilities, etc) and service facilities
(such as education and health services) in such centers. These efforts will counteract the
concentration of market actors to centers in the most developed parts of a country or a region,
and to the larger or the largest urban centers. Non-agricultural activities typically tend to be
located and expand in such centers. These and other economic activities in these centers will
provide opportunities for increased market participation by rural poor.

Dealing with poorly functioning markets

When private market actors do not provide expected services, or services of very poor
quality, there seems to be a case for direct government involvement. However, rather than
suggesting government involvement in service provision without further consideration, the
following questions should be asked: Why do private actors not provide the services? Or why
do they provide poor services? Then the means to address the answers to these questions
should be explored before direct government involvement is considered.
There are compelling reasons to proceed in this order. The track record of direct
government intervention in production, processing and marketing is generally discouraging.
Government failures have been the rule rather than the exception. This does not mean that the
private sector always is a convincing alternative, at least not in the short to medium term.
There are indeed numerous examples of “private sector failures”. However, sight should not
be lost of the ambition to develop efficient and largely private sector market mechanisms. To
this end a government has a crucial role to play in creating the necessary preconditions.

AFTPs Marketing Approaches

The purposes of AFTP’s marketing approaches are as follows:
1) Identify AF species and products that hold potential for farmers.
2) Identify market channels that are used and have potential for farmers’ products.
3) Identify the marketing problems faced by farmers and market agents.
 4) Enhance farmers’ understanding of market mechanisms.
5) Identify opportunities to increase quantity and improve quality of farmers’ AFTPs and
expand farmers’ marketing role

There are several ways to approach the study of AFTP’s/food marketing. Some of the
approaches are purely descriptive whereas others attempt to evaluate the AFTP’s/food
marketing system and provide recommendations for improving it. The approaches are
Functional, Institutional and Behavioral system approaches respectively.

A. The Functional Approach

One method of classifying the activities that occur in the marketing processes is to
break down the processes into functions. A marketing function is a major specialized activity
performed in accomplishing the marketing process.

Use of the Functional Approach

The functional approach considers the jobs that must be done; it is not concerned with
the agency that performs them. Analyzing the functions of various middlemen is particularly
helpful in evaluating marketing costs. Retailing is usually much more costly than
wholesaling. The functional approach points up the greater complexity of retailing. Cost
comparisons are meaningful only when they are related to the job done. The functional
approach is useful in understanding the difference in marketing costs of various commodities.
The three important characteristics of these marketing functions are as follows:
First, the functions affect not only the cost of marketing food but the value of food
products to consumers. Processing, transportation, and storage provide form, space, and time
utility for consumers. The exchange and facilitating market functions grease the wheels of the
marketing machinery and perhaps provide services at cost lower than farmers and consumers
can perform them. In evaluating marketing functions, consideration must be given to both the
costs and benefits of the functions. The value added by a marketing function may be greater
or less than the cost of performing that function.
Second, although it is frequently possible to “eliminate the middleman”, it is very
difficult to eliminate marketing functions, and costs to someone else. For example, farmers
may assume the storage, selling, and transportation functions, eliminating brokers and
commission men. A neighborhood group of consumers can eliminate the food retailer by
purchasing in large lots from wholesale food outlets but in doing so they will assume some
retailing functions storage, standardization, and perhaps transportation. The cost of
performing a marketing function can be reduced but the function cannot be eliminated from
the marketing process.
The third characteristic of marketing functions is that they can be performed by
anyone anywhere in the food system. There are some traditional combinations, placements,
and timing of food marketing functions. Food processors usually combine the storage,
processing, and transportation functions; and many farmers view on-farm storage integral part
of farming. But in general, a variety of firm combinations and timing of food marketing
functions is observed. The functions may be indispensable but they are quite flexible because
they are performed in various places within the food industry. The widely accepted
classifications of functions are as follows:

1. Exchange functions
These functions are never performed in our economy without a judgment of the value
usually expressed at least partially as a price being placed on the goods. It represents the
point at which the study of price determination enters into the study of marketing. Both the
buying and selling functions have as their primary objective of the negotiation of favorable
terms of exchange.

a) Buying (assembling)
The buying function is largely one of seeking out the sources of supply,
assembling of products, and the activities associated with purchase. This function can
be either the assembling of the raw products from the production areas or the
assembling of finished products into the hands of other middlemen in order to meet
the demands of the ultimate consumer.
 b) Selling
The selling function is more than merely passively accepting the price offered.
Most of the physical arrangements of display of goods are grouped here and
sometimes are called merchandising. Advertising and other promotional devices to
influence or create demands are also part of the selling function. The decision as to
the proper unit of sale, the proper packages, the best marketing channel, the proper
time and place to approach potential buyers – all are decisions that can be included in
the selling function.

2. Physical functions
The physical functions are those activities that involve handling, movement, and
physical change of the actual commodity itself. They are involved in solving the problems of
when, what, and where in marketing.

a. Storage
The storage function is primarily concerned with making goods available at
the desired time. It may be the activities of elevators in holding large quantities of raw
materials, until they are needed for further processing. It may be the holding of
supplies of finished goods as the inventories of processors, wholesalers, and retailers.

b. Transportation
The transportation function is primarily concerned with making goods
available at the proper place. Adequate performance of this function requires the
weighing of alternatives of routes and types of transportation as they might affect
transportation costs. It also includes the activities involved in preparation for
shipment, such as crating and loading.

c. Processing
The processing function is sometimes not included in a list of marketing
functions because it is essentially a form changing activity. However, in the broad
view of agricultural marketing this activity cannot be omitted, the processing function
 would include all those essentially manufacturing activities that change the basic form
of the product, such as converting live animals into meat, fresh peas into canned or
frozen peas, or wheat into flour and finally into bread.

B. Facilitating functions
The facilitating functions are those that make possible the smooth performance of the
exchange and physical functions. These activities are not directly involved in either the
exchange of title or the physical handling of products. However, without them the modern
marketing system would not be possible. They might aptly be called the grease that makes
the wheels of the marketing machine go round.

a) Standardization
The standardization function is the establishment and maintenance of uniform
measurements of both quality and quantity. This function simplifies buying and selling
because it makes the sale by sample and description possible. Effective standardization is
basic to an efficient pricing process. A consumer-directed system assumes that the consumer
will make his wants known largely through price differentials. Standardization also simplifies
the concentration process because it permits the grouping of similar lots of commodities early
in movement from the producing points. Such activities as quality control in processing
plants and inspections to maintain the standards in the marketing channel can be considered
part of this function. In addition, certain aspects of the packaging activity are a
standardization procedure of units of sale as well as being part of the merchandising activity
of the selling function.

b) Financing
The financing function is the use of money to carry on the various aspects of
marketing. To the extent that there is a delay between the times of the first sale of raw
products and the sale of finished goods to the ultimate consumer, capital is tied up in the
operation. Anywhere that storage or delay takes place; someone must finance the holding of
goods. The period may be for one year or more, as in the operations of the canning industries,
or a relatively short time, as in the marketing of perishables. Financing may take the easily
recognizable form of credit from various lending agencies or the more subtle form of tying up
the owner’s capital resources. In either instance, it is a necessary activity in modern
marketing.

c) Risk bearing
The risk bearing function is accepting of the possibility of loss in the marketing of a
product. Most of these risks are classified into two broad classifications - physical risks and
market risks. The physical risks are those that occur from destruction or deterioration of the
product itself by fire, accident, wind, earthquakes, cold, and heat. Market risks are those that
occur because of the changes in value of a product as it is marketed.
Risk bearing may take a more conventional form such as the use of insurance
companies in the case of physical risks or the utilization of future exchanges in the case of
price risks. Or, as is often true, the entrepreneur himself may bear the risk without the aid of
any of these specialized agencies. The function of risk bearing is often confused with the
function of finance. Their differences can be kept clear, however, if it is remembered that the
need for financing arises because of the time lag between the purchase and sale of products,
whereas the need for risk bearing arises because of the possibility of loss during the holding
period.

d) Market intelligence
The market intelligence function is the job of collecting, interpreting, and
disseminating the large variety of data necessary to the smooth operation of the marketing
process. Efficient marketing cannot operate in an information vacuum. An effective pricing
mechanism is dependent on well-informed buyers kind of pricing policy to use in their sale
requires that a large amount of market knowledge be assembled for study. This function is
performed by those who specialize in its performance. On the other hand, everyone in the
marketing structure who buys and sells products evaluates available market data and performs
this function to some degree.
B. The Institutional Approach
Functional approach attempts to answer the “what” and “who does what”. The
Institutional approach focuses attention on the “whom”. Marketing institutions are the wide
variety of business organizations that have developed to operate the marketing machinery.
The institutional approach considers the nature and character of the various middlemen and
related agencies and also the arrangement and organization of the marketing machinery. In
this approach the human element receives primary emphasis.

Use of the Institutional Approach

Very often the “why” in marketing practices answered in terms of the characteristics
of who performed. The institutional approach is helpful in understanding specialized
middlemen in the food industry. Farmers can and at times do perform such middlemen
activities as storage, transportation, selling, and even processing. The rationale for the
existence of food middlemen often performs the food marketing functions more efficiently
than either farmers or consumers. Middlemen reduce market search and transactions costs.
Without food middlemen, farmers and consumers would forfeit these economic gains from
specialization and scale economies (Figure 4). Each farmer sells directly to each consumer.
Which is better system? The general rule is that food middlemen perform the food
marketing functions when the costs for these functions are lower than those of farmers and
consumers. There are undoubtedly situations where the farmer and consumer play the
middlemen roles.
 F F F F

C C C C
Farmers (F) sell direct to consumers (C): no Middlemen
F F F F

Central Collecting market

Central dispersal market

C C C C

Alternative food marketing patterns. Farmers (F) sell to consumers (C) through middlemen (M), The
figure illustrates the need for food middlemen tends to make the food system hourglass-shaped. There are many
more farmers and consumers than middlemen, and middlemen normally be larger in size than the farmers and
consumers with whom they deal. This could provide food middlemen with an advantageous bargaining position
in the food system, and this may work to the disadvantages of farmers and consumers.

Middlemen of Marketing
Middlemen are those individuals or business concerns who specialize in performing
the various marketing functions involved in the purchase and sale of goods as they are move
from producers to consumers. There is no limitation as to the way which they have organized
for doing business. They operate as individual proprietors, partnerships, or cooperative or
non cooperative corporations. The middlemen of particular interest in food marketing can be
classified as follows:

A. Merchant middlemen
1. Retailers
2. Wholesalers
 Merchant middlemen take title to and therefore own the products they handle. They
buy and sell for their own gain. The retailer buys products for resale directly to the ultimate
consumer of the goods. He is the producer’s personal representative to the consumer. As
such, his job is very complex. From the functional viewpoint, the retailer may perform all of
the marketing agencies.
The wholesaler sells to retailers, other wholesalers, and industrial users, but does not
sell in significant amounts to final consumers. Wholesalers make up a highly heterogeneous
group of varying sizes and characteristics. One of the more numerous groups of wholesalers
are the local buyers or country assemblers who buy goods in the producing area directly from
farmers and ship the products to the larger cities where they are sold to other wholesalers and
processors. In this group are such agencies as grain elevators, poultry and egg buyers, and
local livestock buyers

B. Agent middlemen
1. Brokers
2. Commission men
Agent middlemen, act only as representatives of their clients. Merchant wholesalers
and retailers secure their incomes from a margin between the buying and selling prices.
Agent middlemen receive their incomes in the form of fees and commissions. Agent
middlemen sell services to their principals, not physical goods to customers. In many
instances, the principal stock-in-trade of the agent middlemen is market knowledge and know-
how he uses in bringing the buyer and seller together. Their services are often retained by a
buyer or seller of goods who feels that he does not have the knowledge or opportunity to
bargain effectively for himself.
Agent middlemen can be broken down into two major groups, commission men and
brokers. The commission man is usually granted broad powers by those who consign goods
to him. He normally takes over the physical handling of the product, arranges for the terms of
sale, collects, deducts his fee, and remits the balance of his principal. The broker usually does
not have physical control of the product. He ordinarily follows the direction of his principal
closely and has less discretionary power in price negotiations than commission men. In
agriculture, livestock commission firms and grain brokers on the grain exchanges are good
examples of these two classifications of agent middlemen.

C. Speculative middlemen
Speculative middlemen are those who take title to products with the major purpose of
profiting from price movements. All merchant middlemen speculate in the sense that they
face uncertain conditions. Usually, wholesalers and retailers attempt to secure their incomes
through handling and merchandising their products and hold the uncertain aspects to a
minimum. Speculative middlemen seek out and specialize in taking risks and usually do a
minimum of handling and merchandising. Middlemen also called traders, scalpers, and
spreaders and are specialized risk-taker called speculator. They often attempt to earn their
profits from short-rum fluctuations in prices. Purchases and sales are usually made at the
same level in the marketing channel. The grain scalper buys and sells grain futures several
times within the trading day.
Speculative middlemen are often the result of the benefits of specialization. He
performs this function more cheaply. Speculator performs a very important job in the market
situation. However, in less desirable instances the existence of speculators indicates that other
merchant or agent middlemen are not effectively performing their tasks. In these situations
speculators represent unnecessary duplication of middlemen.

D. Processors and manufacturers

Processors and manufacturers primarily exist to undertake some action on products to
change their form. Food processors take an active part in other institutional aspects of
marketing. Meat packers, flour millers, and fruit and vegetable canners, often act as their own
buying agents in the producing areas. Many processors attempt to reach the ultimate
consumer through advertising. The restaurant most often is a retailing establishment in that it
sells to final consumers. However some businesses operate as wholesalers, preparing food in
large quantities and selling to other retail outlets.
 E. Facilitative organizations
Facilitative organizations aid the various middlemen in performing their tasks. Such
organizations directly participate in the marketing processes either as merchants, agents,
processors, or speculators. They establish the “rules of the game” which must be followed by
the trading middlemen, such as hours of trading and terms of sale. They also aid in grading
and in arranging and transmitting payment. They receive their incomes from fees and
assessments from those who use their facilities.
Another group of organization falling in this general category is the trade associations.
The primary purpose of a large majority of these organizations is to gather, evaluate, and
disseminate information of value to a particular group or trade. They carry on research of
mutual interest and also act as unofficial policemen in preventing practices the trade considers
unfair or unethical. Through not active in the buying and selling of goods, these organizations
often have far-reaching influence on the nature of marketing.

C. The Behavioral Systems Approach

Both the functional and institutional approaches are useful in analyzing the existing
marketing activities. However, the marketing process is continually changing in its
organization and functional combinations. How to understand and predict change is a major
problem. Each is composed of people who are making decisions in an attempt to solve
particular problems. The four major types of problems with their associated behavioral
systems can be identified as follows:
The first and perhaps most obvious is the input-output system. Each marketing firm or
organization of firms is attempting to have an output of something. Each is using as an input
resources that are costly and scarce. It is in this system context that the discipline of
economics and the various physical and engineering sciences make their major contributions
to marketing understanding.
Another major concern is the power system. All firms and groups of firms have status
and a vested interest in the present role they are playing. They may have developed a
reputation for quality, being leaders, having a community conscience, being soundly
conservative, or the fastest growing. No flippant decisions will be made that might
deteriorate their particular niche of power and means will actively be sought to enhance it.
Economic theory of monopoly and imperfect competition behavior as well as the political
scientists’ concern with power behavior gives insights into this system of behavior.
The problem of getting appropriate information to the manager and of transmitting his
decisions into actions by other workers becomes of increasing importance. Each firm or
organization of firms a therefore be viewed as communications system. Effective channels of
information and direction are a major problem of large firms and complex organizations. It is
in this area that the concern of psychology, sociology, and business management over the
proper ways to organize and direct subordinate workers and units becomes of particular
relevance. Finally, the behavioral system for adapting to internal and external change is then
a major component of the firm or organization. As a rule, firms desire to survive and are
prepared to pay some price to do so. How to operate in manner that will assure that important
changes are identified and adaptive solutions to these changes are effectively evolved is a
major area of behavior.
The analytical view of multiple behavior systems adds the important dimension of
decision makers and their differing goals to the rather impersonal functional and institutional
analyses. It points up sharply that market analysis is not the province of economics alone.
Each of the social sciences, as well as the physical sciences, can contribute to the
understanding of marketing problems.
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