Tree plantations are widely considered a sustainable and economically feasible
way to foster reforestation of degraded tropical lands. However, the greatest
obstacle to their implementation is the 5–10 years period before initial returns
through tree harvesting are realized. This study evaluated the feasibility of
generating returns in this period by intercropping hardwood plantations with
annual crops. In an agroforestry trial established in eastern Panama, the costs and
revenues of intercropping five native and one exotic (Tectona grandis) tree
species with three different agricultural treatments––maize-beans, pigeon pea
and cassava––were assessed. All tree-crop combinations, except those with
cassava, generated positive net cash flows during the first years. Over the modeled
rotation period of 25 years, the agrisilvicultural systemsshowed up to 50 % higher
net present values (NPV) than pure forestry (given a 6 % interest rate), while most
tree-crop combinations exceeded the NPV of pure agriculture. T. grandis
intercropped with pigeon pea showed the best economic performance. The NPVs
of the agrisilvicultural systems were less sensitive to changes in costs or
revenues than either pure forestry or pure agriculture. Accordingly, the final
felling value required for intercropping treatments to meet the desired interest
rate of 6 % was up to 90 % lower than that for pure forest plantations. This effect
was strongest for native tree species, as their slower growth allowed for longer
periods of intercropping. Results suggest that intercropping hardwood
plantations can be an effective tool for improving financial feasibility of
reforestation while providing increased food security in rural areas.