The Small Island Developing States (SIDS), comprising more than 50 nations and
territories worldwide, are challenged to establish sustainable development strategies consistent
with their small size, remoteness, and fragile and limited natural resources. Agriculture is
considered instrumental in furthering sustainable development of SIDS. Agroforestry, an age-old
agricultural practice dominates many landscapes among SIDS, proving its ecological
sustainability; yet little is known (quantitatively) about productivity, value, and use of
agroforests or the role agroforestry plays in the livelihoods of SIDS. Such information is
important to ensure that decision makers are able to establish sustainable programs for economic
development. Research conducted on Pohnpei, Federated States of Micronesia, documented
livelihood systems, quantified agricultural activities, and simulated the impact of potential policy
scenarios on both agroforestry and livelihood systems. Sixty-four percent of households relied on
three or more sources for cash income; the main income sources included formal employment,
agriculture, remittances/pensions, and fishing. One-hundred percent of households were engaged
in subsistence agriculture, and 88% and 90% of households used crops for cash income and
ceremonial purposes, respectively. Homegarden agroforestry practices provided between 24%
and 98% of the total value of agricultural products. Agroforests contributed, per household, an
average of $4,242 yr-1 and island-wide contributed 18% to Pohnpei’s GDP (total annual value of
$15.7 million). Limited market access was found to increase dependence on crops for cash
income. In contrast formal employment was found to reduce dependence on crops for cash
income. Using ethnographic linear programming, the results suggested that establishing a price
policy and/or expanding market opportunities would contribute directly to households most
reliant on agriculture for cash income but would have only marginal impacts on households
reliant on fishing, remittances, and formal employment for cash income. Use of an expanded
version of the traditional Policy Analysis Matrix methodology allowed for the internalization of
environmental externalities contributing to a more accurate analysis of farming systems.