THE ROLE OF AGROFORESTRY FOR FARM HOUSEHOLD’S WELFARE: EVIDENCE FROM INDONESIA

Abstract

The role of agroforestry on socio-economic and environmental conditions has been widely documented in the literature. However, its role in farmers' households remains low, especially in Indonesia. The objective of this study is to understand the determinant of agroforestry and analyze the role of agroforestry on farmers' welfare. This study was collected from 301 farmers in East Java of Indonesia and used cross-sectional data. A logit The method employs regression analysis to estimate the factors affecting farmers' decision to adopt agroforestry, and propensity score matching (PSM) to investigate the welfare effect of agroforestry adoption, which was measured by farming income and non-farming income. The results indicated that farmers adopting agroforestry were significantly affected by education, farming experience, and farmers’ ethnicity. Furthermore, the PSM analysis reveals that agroforestry improves farmers’ income significantly. Farmers who adopt agroforestry have a better farming income than the farmers who did not adopt. On the other hand, the non-farm income shows otherwise. Therefore, these findings imply that farmers should implement agroforestry continuously to improve their welfare conditions.

Keywords

• agroforestry
• welfare
• income
• logit
• psm
• indonesia