Farming vs forests: Trade-off between agriculture and the extraction of non-timber forest products

A number of empirical studies on tropical forests have focused on the issues of agricultural development and deforestation. According to these studies, deforestation is assumed to be an increasing function of agricultural yields hence implying a negative external effect. Contrary, this article presents a case which explores the trade-off between agriculture and extraction of forest products. We measure the technical efficiency of agriculture in natural forest peripheries and test the results from forest resource extraction. The study findings show that non-timber forest product extraction is a decreasing function of agricultural efficiency, hence producing a positive externality in the conversion of forest resources. This study also determines the level of efficiency improvement necessary to compensate the current income generated by non-timber forest products (NTFPs). Improving agricultural efficiency in forest peripheries should be an integral component of forest conservation policy.