Funding Agroforestry
What type of value does agroforestry create?
Agroforestry is unique in that it creates things we can sell, and things that benefit society. This muddies the waters in terms of who should pay for trees. If agroforestry is “profitable,” shouldn’t farmers and private land managers simply plant the trees? But if these trees are creating value for those downstream, does that merit taxpayer funding? It of course depends what tree species we’re planting, but we haven’t collectively decided which trees need a subsidy and which do not.
The extremely long-term payback of native hardwood reforestation would suggest that it should be publicly funded, even if a landowner can harvest some timber for their grandchildren. A pecan orchard or chestnut alley crop reduces flood risk and increases biodiversity, but both crops provide a market rate of return. Should these trees be subsidized?
Agroforestry yields market goods, and public goods, clarified at right. We expect that if something creates public benefit, it can be funded publicly. In theory, this makes sense, and funding should partially come from the public sector. In practice, this is less common, and it’s likely that “No one is coming to fund you.” No matter what should be, we have to look at what is. When the rubber hits the road, are we funding trees with our cash? Or with our clout, relationships, and time?
Are there grants for this?
Will you pay with money, or social capital? We can’t perfectly exchange cash for social capital, and vice versa, but we can equate money to the time it takes to apply for grants and build rapport with funders. When there is public funding available, how much time are you willing to spend applying for grants?
A playbook for funding your ideal agroforestry system
The only incorrect agroforestry system is one that you won’t manage and doesn’t improve the farm. Here’s how to parse out what that looks like.
First, you need to understand what your ideal agroforestry system looks like. Are you simply looking to drive long term revenue and create asset value? Or do you look to trees for health, shelter, biodiversity, culture, or a reason to get up in the morning? There are no wrong answers, except an agroforestry system that you don’t actually like.
Second, we need to understand the installation costs of these trees, followed by the revenue they create. Some tree species and sections are going to be more profitable and enjoyable than others, and we should prioritize those that yield the most value. To be clear: what are the costs of your ideal scenario? Overyield allows us to prototype and cost-out agroforestry systems before we plant them: inputs, equipment, revenue, yields, and labor hours.
Third, we have to ask if this cost fits with our farm, and if not, over what time will we have the cash on hand to make it work? If we don’t have the cash on hand, we can either trade our time for money until we do, or trade our time for social capital (clout, relationships with funders). If we pursue the cash route, this is fully within our control: make money, plant trees. If we pursue the grant route, the value exchange can be in our favor, but is much less straightforward.
Is a grant right for me?
The first question we have to ask when evaluating a grant is: Does the grant fund a thing that adds value to my life? Or am I just doing this thing because there’s funding available? The more that a tree system align with our goals and wants, the more likely we are to manage it and see it to success. If you hate pigs, and there were funding for a hog barn, would you build a hog barn?
The second question: at our currently labor rate, how many hours or months would it take to pay for our ideal scenario? How many work days or weekends are we willing to spend? From there, how many grants would we have to apply for to fund this? How many good hours will this take? 24? 60? Applying for grants is indeed often worth our time; and it’s important to be honest with ourselves.
Lastly, we need to understand what the grantor expects from us, in exchange for funding. Is there reporting or inspection? Are we required to host field days? No harm no foul if so, but post-funding requirements also need to align with our context.
Evaluating different grants
Grants often take years to come to fruition, and we need to ask ourselves how long we’re willing to wait for “free money.” Would I wait 3 years to plant these trees, to avoid paying out of pocket? 5 years? In 5 years, you could be looking at a profitable elderberry business, your first chestnut burrs dropping nuts on the ground, or tangible shade benefit from black locust silvopasture. At Propagate, we often see the following predicament when land managers hold out for grants.
Should I apply for this grant?
Grant applicants hope for Box C, but too frequently end up in Box D, with no trees funded.
One great way to determine whether we should apply for funding is via the expected payoff matrix, seen at right.
In Box A, we pay out of pocket, and we could have gotten a subsidy. But the good news is: we have trees.
In Box B, we pay out of pocket, and we could not have gotten a subsidy. We’re still out $3,000 (or $30,000), but we have trees in the ground, and it wouldn’t have been worth our time to apply for funding.
In Box C, we apply for grants, and get funded! This is our ideal scenario: free trees on the farm.
In Box D, we apply for grants, hold out on planting trees, and don’t get funded. We’re not out $3,000, but we lose 1-2+ years of tree growth. This often becomes a vicious cycle, with farms waiting years for funding.
The short of this matrix is that grant applicants hope for Box C, but too frequently end up in Box D, with no trees funded.
To conclude, we have two questions that can signal a “go” when applying for grants.
First, does our project align with the mission of the funder? Government funding sources, NGO’s, and private foundations have mission statements and directives that dictate what gets funded. Only apply for a grant if your project accomplishes the goals of the funders. They usually aren’t flexible.
Second, we need to ask: “Is this grant targeted directly at me?” Does it seem like a home run? A slam dunk? Are you thinking, “They should have just called me?” We want avoid wishful thinking, and trying to fit a square tree into a round grant. Don’t stretch that “maybe.” Leave the mental gymnastics to the news anchors. Hail Marys rarely get funded.
To conclude, here are some concise takeaways:
The more public benefit your agroforestry system produces, the better fit it is for public funding.
Figure out what you want to plant before you ask what funding is available – and then fund the thing you want to plant.
Understand the costs of your ideal agroforestry system.
Do you want to fund trees with money or social capital? Or a combination thereof?
How many hours are you willing to put towards creating that social capital?
If grants don’t look promising, and you favor expediency, you might want to pay for agroforestry out of pocket.
Only apply for grants that fit your project, and even then: consider the costs of applying for and managing the grant, and weigh those costs against paying for the trees directly.
Propagate is an agroforestry project developer that helps farmland owners plant, operate, and monitor tree crops. We offer farm planning software, technical assistance, and project development services – a simplified end-to-end solution, so that farms can generate stable sources of income for future generations.