Economics of On-farm Production of Indigenous Fruits - Indigenous Fruit Trees in the Tropics: Domestication, Utilization and Commercialization - page 251

3

For a more formal treatment, see Dixit and Pindyck (1994).

4

The capital asset pricing model explains the equilibrium rate of return on
capital assets given that asset's non-diversifiable risk in relation to the well-
diversified market portfolio (for a formal treatment see Luenberger, 1998).

5

For a broader analysis the risk-adjusted rate of return would have to be
adjusted at regional level.

6

More information on the technical details of this approach can be found in
Mithöfer (2005) and the literature cited therein.

7

In the investment model, costs and benefits of the two alternatives (i.e.
planting versus collection) are made comparable on the basis of returns on
labour, which is the major resource used in each activity.

8

IFTs bear fruits at a time of year when income from rain-fed agriculture is
zero and at that time complement income from irrigated horticultural crops.
The covariance of seasonal income streams may differ from the covariance
of the annual income streams; however, how this may influence the decision
to invest is ambiguous, since harvesting of the fruits occurs in the same
period as planting of rain-fed agricultural crops and each activity implies
opportunity costs in terms of the other.

References

Abebaw, D. and Virchow, D. (2003) The micro-
economics of household collection of wild
coffee in Ethiopia: some policy implications
for in-situ conservation of Coffea arabica
genetic diversity. In: Economic Analysis of
Policies for Biodiversity Conservation .
BioEcon Workshop, 28- 29 August, Venice.
Akinnifesi, F.K., Kwesiga, F., Mhango, J.,
Chilanga, T., Mkonda, A., Kadu, C.A.C.,
Kadzere, I., Mithöfer, D., Saka, J.D.K.,
Sileshi, G., Ramadhani, T. and Dhliwayo,
P. (2006) Towards the development of
miombo fruit trees as commercial tree
crops in Southern Africa. Forests, Trees
and Livelihoods 16, 103-121.
Arnold, J.E.M. and Dewees, P.A. (1999)
Trees in managed landscapes: factors in
farmer decision making. In: Buck, L.E.,
Lassoie, J.P. and Fernandes, E.C.M. (eds)
Agroforestry in Sustainable Agricultural
Systems . Lewis Publishers, Boca Raton,
Florida, pp. 277-294.
Bessen, J. (1999) Real Options and the
Adoption of New Technologies . Research
on Innovation, Wallingford, UK.
Brealey, R.A. and Myers, S.C. (2000) Principles
of Corporate Finance . Irwin McGraw-Hill,
Boston, Massachusetts.

Brigham, T. (1994) Trees in the rural cash
economy: a case study from Zimbabwe's
communal areas. MA thesis, Carleton
University, Ottawa, Canada.
Campbell, B. (1996) The Miombo in Transition:
Woodlands and Welfare in Africa . Center
for International Forestry Research, Bogor,
Indonesia.
Campbell, B., Grundy, I. and Matose, F.
(1993) Tree and woodland resources: the
technical practises of small-scale farmers.
In: Bradley, P.N. and McNamara, K. (eds)
Living with Trees: Policies for Forestry
Management in Zimbabwe . The World
Bank and the Stockholm Environment
Institute, Washington, DC and Stockholm,
pp. 29-62.
Cavendish, W. (2000) Empirical regularities in
the poverty-environment relationship of rural
households: evidence from Zimbabwe.
World Development 28, 1979-2003.
Chidumayo, E. (1997) Miombo Ecology
and Management: An Introduction . IT
Publications, London.
Chipika, J.T. and Kowero, G. (2000)
Deforestation of woodlands in communal
areas of Zimbabwe: is it due to agricultural
policies? Agriculture, Ecosystems and
Environment 79, 175-185.