1 Economic performance of common agroforestry systems in Southern Sumatra: implications for carbon sequestration services 1 Kirsfianti Ginoga a , Oscar Cacho b , Erwidodo c , Mega Lugina a , and Deden Djaenudin a a. Center for Socio-Economic Research on Forestry, Bogor, INDONESIA b. University of New England, Armidale, NSW 2351, AUSTRALIA c. Center for Agricultural Socio-Economic Research, Bogor, INDONESIA ABSTRACT This paper presents an analysis of the performance of four agroforestry systems common in the southern part of Sumatra (Jambi and Lampung). The systems analysed are rubber agroforestry, cinnamon multicropping, oil palm monoculture and damar agroforests.These systems span the range from monoculture to complex agroforest and hence provide a useful overview of potential benefits and costs. Using a combination of modelling and data from various sources the paper shows that all four agroforestry systems can be financially and economically attractive. The relative performance of each system in terms of social and environmental benefits is discussed at a general level, as well as their potential as tools for carbon sequestration. Keywords: Agroforestry, Carbon Sequestration, Sumatra, Indonesia, Economic Analysis INTRODUCTION Indonesia is home to about 10 percent of remaining tropical forests in the world, these forests are concentrated in the outer islands, including Sumatra, Kalimantan and West Papua. The rate of deforestation in Sumatra has historically been the highest in the nation (Suyanto et al, 2001). Deforestation has been driven largely by population pressure in the form of forest conversion by shifting cultivators and large private estates that employ transmigrants. The traditional shifting cultivation methods used in Sumatra are no longer sustainable, because, as available land has become scarce the fallow periods have become too short (Suyanto et al, 2001). Tree-based farming systems, particularly agroforestry, offer a sustainable alternative. ICRAF (1992, p.2) defines agroforestry as “a collective name for land-use systems and practices where woody perennials are deliberately integrated with crops and/or animals on the same land management unit. The integration can be in spatial mixture or in temporal sequence. There are normally both ecological and economic interactions between the woody and the non-woody components in agroforestry”. Agroforestry can assist in a variety of short, medium and long term goals of forest conservation, which have benefits both for local farmers and government agencies. Watkins (1993) points out that agroforestry is a sustainable management system for forest and conservation that increases production and ecological stability. The major roles of agroforestry can be summarised as (Simon and Wiersum, 1982): (a) to take the pressure off existing forest resources and improve distribution of labour; (b) to increase total production and meet the timber supply deficit; 1 Working paper CC03. ACIAR project ASEM 1999/093, http://www.une.edu.au/febl/Econ/carbon/ .