ECONOMICS OF AGROFORESTRY PRODUCTION IN IRRIGATED AGRICULTURE

A dynamic optimization model for agroforestry management is developed where tree biomass and soil salinity evolve over time in response to harvests and irrigation water quantity and quality. The model is applied to agroforestry production in the San Joaquin Valley of California. Optimal water applications are at first increasing in soil salinity, then decreasing, while the harvest decision is relatively robust to changes in most of the underlying economic and physical parameters. Drainwater reuse for agroforestry production also appears promising: both net reuse volumes and the implied net returns to agroforestry are substantial.