Citation
Ecological sustainability in Amazonian agroforests

Material Information

Title:
Ecological sustainability in Amazonian agroforests
Creator:
McGrath, Deborah Anne, 1963-
Publication Date:

Subjects

Subjects / Keywords:
Farmers ( jstor )
Forest soils ( jstor )
Forests ( jstor )
Nutrients ( jstor )
Peaches ( jstor )
Plant litter ( jstor )
Productivity ( jstor )
Soil science ( jstor )
Soils ( jstor )
Species ( jstor )
City of Gainesville ( local )

Record Information

Rights Management:
Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
30032783 ( ALEPH )
41869669 ( OCLC )

Downloads

This item has the following downloads:


Full Text












ECOLOGICAL SUSTAINABILITY IN AMAZONIAN AGROFORESTS:
AN ON-FARM STUDY OF PHOSPHORUS AND NITROGEN DYNAMICS
FOLLOWING NATIVE FOREST CONVERSION












By

DEBORAH ANNE MCGRATH


A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA


1998
















ACKNOWLEDGMENTS


I am extremely fortunate to have had an excellent advisory committee. Each member

had a unique and indispensable role in my academic training, and for their generous assistance

I am very grateful. Both Drs. Nicholas Comerford and Marianne Schmink provided the

inspiration, encouragement, and support that ultimately allowed me to carry out research in

areas that I would not have otherwise felt free to explore. I also greatly benefitted from the

input of Drs. Wendell Cropper and Kimberlyn Williams, who introduced me to ecological

concepts that broadened my view of agricultural systems as functioning ecosystems. Dr. P.K.

Nair was very gracious to accept the task of reading my dissertation so late in the process.

My research interests were certainly stimulated by the dynamic agroforestry program at

Florida initiated by Dr. Nair and his students. My major advisor, Dr. Mary Duryea, was, quite

simply, a mentor in every way, and her friendship and guidance have been invaluable.

My field research was funded by fellowships from the Inter-American Foundation,

the National Security Education Program and the University of Florida Tropical Conservation

and Development Program. I am grateful for their financial support, as I am to the University

of Florida's Center for Latin American Studies, not only for the two-year Title VI Foreign

Languages and Area Studies (FLAS) fellowship in Brazilian Portuguese, but for encouraging

collaborative research among the social and natural sciences with our southern neighbors.










From the University of Florida I would like to thank Cherie Arias for generous

administrative help, James Bartos, Christina Bliss, Jeff English, Wayne Hogan, Dave Noletti,

Larry Schwandes, and Beverly Welch for laboratory assistance; Jay Harrison for statistical

counsel; Ken Clark for critical input to the study design, and Gretchen Greene and Bea

Covington for being girlfriends. Mary McLeod in the Forest Soils Lab was especially

generous with her time and patience. My interaction throughout the years with Dr. Peter

Hildebrand has been very important, because he is, in spirit, a "farmer's farmer".

Special thanks are extended to John Haydu, Peter Cronkleton, Coral Wayland, and

Richard Wallace for priceless laughs and a place to get away in Rio Branco when the

grittiness of the field became too much. Karen Kainer, Jon Dain, and Connie Campbell are

also acknowledged for their valuable insight into conducting participatory research in the

Amazon, as well as for their hospitality in Rio Branco. I also thank Sonia Alfaia for her

hospitality in Manaus. I greatly appreciated being able to count on Charles Clement, from the

National Institute of Amazonian Research (INPA) in Manaus, Brazil, and Pauline Grierson,

of the Ecosystems Research Group at the University of Western Australia, for thoughtful

advice and dialogue via e-mail.

This research would not have been possible without the generous and conscientious

collaboration of my Brazilian colleagues and friends. I am extremely grateful to the non-

governmental organization, Grupo PESACRE (Pesquisa e Extensao do Sistemas

Agroflorestais no Acre), both for institutional collaboration and tremendous logistical support

during the field research. Both the assistance and friendship provided by members of

PESACRE, especially that ofNilton Cossan Mota, greatly enriched my research experience.


iii










I thank SOS Amaz6nia and Projeto Tapiri for their helpful feedback and for allowing me to

participate in their environmental education courses. I also appreciate the use of laboratory

facilities at the Universidade Federal do Acre (UFAC). My most heart-felt thanks are

extended to Maria Lucia Hall de Souza for her superb field assistance. Her conscientious

work enabled me to entrust her with field data collection when I needed to leave the research

site. Her friendship, as well as the hospitality of both her and her husband, will not be

forgotten.

I must express my deep gratitude to the farmers of Projeto RECA (Reflorestatmento

Econ6mico Consorciado e Adensado) for their insight and enthusiastic collaboration in this

research. I am very grateful to the families of Sr. and Sra. Nelson Barbosa, Arnaldo da Costa,

Sr. Joio and Francisca Craveiro, Sr. Aluizio and Sra. Carmelita Goncalves, Sra. Linda

Hendricks, Semildo and Zali Kaefir, Bernadete and Sergio Lopes, Sr. and Sra. Raimundo

Ant6nio Roderigues, and Marcio and Menesilda Sorde, all of whom participated directly in

the study, offering their farms, friendship, generosity, hard work, and unwavering

commitment to the investigative process.

Finally, my gratitude to my parents, Tom and Patty McGrath and Janet and Garry

Bostwick, for their continual support and enthusiasm is endless. I know that to a large extent

my research interests were by the curiosity and love of my mother, Janet Bostwick, for all

things growing in soil, and by the commitment of my father, Thomas McGrath, to protecting

our environmental heritage. Finally, I thank my husband, C. Ken Smith, for his patience,

support, and collaboration as a colleague, as well as for being my hero and best friend.
















TABLE OF CONTENTS


ACKNOWLEDGMENTS ............................................... ii

AB STR A C T ........................................................ vii

1 INTRODUCTION ................................................... 1

The Problem: Ecological Instability in Amazonian Land-Use ............... 1
Research Questions and Objectives .................................. 6

2 THE RECA PROJECT ............................................... 9

The Settlement of Nova Calif6rnia, Acre, Brazil ................ ........ 9
Projeto RECA ................................................. 12
Agroforest Establishment ......................................... 15
Agroforest Tree Species .......................................... 17
Challenges Facing RECA ......................................... 21

3 APPLYING A PARTICIPATORY APPROACH TO AGROECOLOGICAL
RESEARCH ...................................................... 26

Introduction ................................................... 26
M ethods ...................................................... 29
The Participatory Process: Lessons Learned ........................... 42
Information Gained Using a Participatory Approach .................... 47
Conclusions ................................................... 56

4 PHOSPHORUS AVAILABILITY AND FINE ROOT PROLIFERATION IN
AMAZONIAN AGROFORESTS SIX YEARS FOLLOWING FOREST
CONVERSION .................................................... 58

Introduction ................................................... 58
M ethods ...................................................... 62
R results ....................................................... 71
Discussion and Conclusions ....................................... 76
Conclusions: Implications for Amnazonian Agroforest Sustainability ......... 87











5 LITTER DYNAMICS AND MONTHLY FLUCTUATIONS IN SOIL PHOSPHORUS
AVAILABILITY IN AN AMAZONIAN AGROFOREST .................. 90

Introduction ................................................... 90
M methods ...................................................... 94
R results .. .................................................... 102
D discussion .................. .... ............................ 111
Conclusions: Implications for Agroforest Management................. 121

6 NET PRIMARY PRODUCTIVITY, NITROGEN AND PHOSPHORUS CYCLING
IN AN AMAZONIAN AGROFOREST NINE YEARS FOLLOWING FOREST
CON V ER SION ................................................... 124

Introduction .................................................. 124
Methods ................................................... 127
Results ................................................... 139
D discussion ................................................. 150
Conclusions: Agroforest Sustainability ............................. 166

7 AMAZONIAN AGROFOREST SUSTAINABILITY: NUTRIENT CYCLING,
MANAGEMENT AND ECONOMIC VIABILITY ........................ 169

Accelerated P Cycling and Agroforest Management .................... 169
Nitrogen Removal and Agroforest Management ....................... 173
Conclusions: Prospects for Ecological and Economic Sustainability ........ 176

LIST OF REFERENCES ............................................. 181

BIOGRAPHICAL SKETCH ........................................... 201
















Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy


ECOLOGICAL SUSTAINABILITY IN AMAZONIAN AGROFORESTS:
AN ON-FARM STUDY OF PHOSPHORUS AND NITROGEN DYNAMICS
FOLLOWING NATIVE FOREST CONVERSION

By

Deborah Anne McGrath

December 1998


Chairperson: Dr. Mary L. Duryea
Major Department: School of Forest Resources and Conservation

Raising land productivity with perennial cash crops may allow Amazonian farmers to

meet food demands and increase livelihoods with less forest clearing. Despite more efficient

nutrient cycling in tree-based agroecosystems, maintaining phosphorus (P) availability to

plants growing in weathered tropical soils challenges the sustainability of commercial

plantation agroforests. The primary objective of this research project was to examine

phosphorus and nitrogen (N) dynamics in a widely-adopted peach palm (Bactris gasipaes

Kunth)-cupuassu (Theobroma grandiflorum)-Brazil nut (Bertholetia excelsa) agroforestry

system to evaluate the potential of commercial agroforests to offer a more sustainable

alternative to other Amazonian land-uses. The research was conducted in Acre, Brazil, using

a participatory approach so that farmers would benefit from both the investigative process and


vii










study results, perhaps enabling them to maximize the agroecosystem's potential for sustained

production. A comparison of soils from eight agroforests and adjacent native forests

demonstrated that despite greater cation exchange capacity and pH in agroforest soils,

extractable P was significantly lower, suggesting a decline in P availability since conversion

of forest to agroforest. Phosphorus limitations to productivity, assessed using a root

ingrowth bioassay, were not apparent, although greater root growth by peach palm suggested

a competitive advantage by this species. Monthly measurements of resin-exchangeable P

demonstrated greater P availability in soil beneath peach palm litter than under cupuassu trees.

Nitrogen and phosphorus were mineralized rapidly from decomposing palm litter but

immobilized in P-poor cupuassu leaves. Soil P availability was greatest early in the rainy

season, decreasing during the mid-rainy season when fruit production was highest. An annual

budget for an eight-year-old agroforest revealed that P removal with harvest was half that

expected for pasture and shifting cultivation, and that system-level P cycling was more rapid

than in Amazonian forests growing in similarly P-poor soils. High N removal with harvest

suggests that this nutrient may eventually limit agroforest productivity. Peach palm and

cupuassu phosphorus-use-efficiencies were similarly low, while that of Brazil nut was

comparable to Amazonian forest species. Leguminous cover crops and directed application

of soil amendments, including plant residues, beneath cupuassu and Brazil nut canopies are

recommended to increase soil nutrient availability and sustain productivity.


viii
















CHAPTER 1
INTRODUCTION


The Problem: Ecological Instability in Amazonian Land-use

Since the late 1970s, Amazonian deforestation has proceeded at alarming rates,

raising world-wide concern because of its potentially negative consequences for global climate

change, biodiversity, hydrology and biogeochemical cycles (Skole and Tucker 1993).

Approximately one third of forest clearing in the Brazilian Amazon is undertaken by the

region's growing population of colonist farmers for the shifting cultivation of annual crops,

while roughly 60% occurs at the hands of large-scale cattle ranchers for pasture creation

(Fearnside 1993, Skole et al. 1994, Serrao et al. 1996). Geologically, the Guyana and

Brazilian shields that dominate the northern and southern ends of the Amazon Basin are the

oldest and most highly weathered soils found on the South American continent (Toledo and

Navas 1986). Consequently, annual crop production in the Basin's acidic nutrient-poor soils

(predominately Oxisols and Ultisols) is generally limited to two years because nutrient pulses

released by burning native forest vegetation decrease rapidly with crop removal and leaching,

after which agricultural fields are abandoned to fallow and additional forest land is cleared for

continued cultivation (Uhl and Jordan 1984, Ewel 1986, H61olscher et al. 1997). In areas

where low population densities and high land availability permit long fallow periods for soil

restoration (i.e., 10 to 25 years), shifting cultivation can be productive, however, when the











2
fallow is shortened, the practice results in rapid soil degradation (Nicholaides et al. 1985, Juo

and Manu 1996). Similarly, pasture productivity and longevity in the Amazon are limited by

soil fertility and disruptions in nutrient cycling processes. Generally, three to five years

following forest conversion, a rapid decline in the productivity of planted grasses, associated

with decreases in soil nutrient availability, permits the invasion of herbaceous and woody

"weeds" that characterize degraded and subsequently abandoned pastures (Toledo and Navas

1986, Dias-Filho et al. In press). Regrowth in both abandoned shifting cultivation plots and

degraded pastures occurs as succession proceeds, but often the species composition of the

secondary vegetation differs from that in primary forests and soil C and N stocks, as well as

other properties favorable for agricultural production, decline (Nepstad et al. 1991, Trumbore

et al. 1995, Moraes et al. 1996, H1olscher et al. 1997). Managed extensively, without the use

of soil amendments or germplasm suited to the region's physiography, these two principal

Amazonian land-uses are largely unsustainable. This lack of ecological stability combined

with the small economic return per unit area of land yielded by these land-uses results in

accelerated deforestation, habitat fragmentation, lowered agricultural production, failure of

small-scale farms, and greater rural poverty (Hecht and Cockburn 1990, Fearnside 1993,

Skole et al. 1994).

More recently, perennial crop-based commercial plantation agroforestry systems have

emerged as a promising Amazonian land-use alternative with the potential to reduce soil

degradation, improve living standards, and decrease pressures on remaining forested areas

(Smith et al. 1997). Whereas annual and perennial crops have traditionally been grown

together in multistory tree gardens, the production of high value perennial cash crops in











3
plantation agroforests represents a relatively new practice in Amaz6nia (Nair and Muschler

1993, Smith et al. 1997). Both the potential economic and ecological advantages of tree-

based agroecosystems arise in part from their longevity which promotes a more closed cycling

of nutrients that may extend the productivity of land already cleared (Ewel 1986, Smith

1990). In principle, deep-rooted perennials intercept cations and nitrate otherwise leached

from the soil surface, storing and cycling these nutrients in living biomass, fallen litter and

decaying fine roots, while reducing erosion losses by physically protecting the soil (Nair 1989,

Young 1989). Moreover, soil degradation and nutrient depletion resulting from crop harvest

is potentially less if the products harvested represent only a small proportion of the system's

total organic matter and nutrient stocks (Jordan 1988). Perennial crop-based agroforestry

systems comprising cashew (Anacardium occidentale), coconut (cocos nucifera), babassu

(Orbignya prunifera) and cacao (Theobroma cacao) have long provided an economically

important and ecologically stable land-use in the more arid Northeastern region of Brazil

(Johnson and Nair 1989).

In the late 1980s, an independent producer organization of colonist farmers initiated

Project RECA (Reflorestamento Econ6mico Consorciado e Adensado) with the establishment

of a perennial crop-based commercial plantation agroforestry system in the western

Amazonian community of Nova Califrrnia. Project RECA's objectives were two-fold: to

improve the economic security of farmers and decrease farm-level deforestation by providing

a more sustainable alternative to other land-uses (RECA 1989). Essentially, the farmers

believed that a multi-species system comprised of native forest trees would be more

productive than their failing annual crops and monospecific plantations of coffee and cacao.











4
The original system comprised three perennial components, cupuassu ("cupuaqu" in

Portuguese, Theobroma grandiflorum), peach palm ("pupunha" in Portuguese, Bactris

gasipaes), and Brazil nut ("castanha"in Portuguese, Bertholetia excelsa), and was planted on

over 400 ha on nearly 200 farms throughout the region. This particular configuration of

agroforest species has proven highly productive during the initial years following

establishment, and consequently, the RECA project became known throughout Brazil as a

model of sustainable agriculture and grass roots initiative. As a result, farmers in Acre and

Rond6nia continue to convert both primary and secondary forest into perennial crop

plantations that now include coffee, citrus, palm heart, and other native fruit and timber

species.

Although the RECA agroforestry system initially exhibited high productivity,

sustaining yields in the future is a constant and justifiable concern for these farmers because

information about the behavior of these species as components of intensively harvested

agroforestry systems is limited (Clement 1991 & 1993, Venturieri 1993). Many studies have

demonstrated that mixed perennial crop-based systems offer greater ecological stability than

annual monocultures by improving soil properties (Nair 1989, Ewel et al. 1991, Chander et

al. 1998), however, little on-farm research has been conducted to determine if these systems

are sustainable in Amazonian Ultisols and Oxisols without the use of soil amendments (Szott

et al. 1991). For the most part, the RECA agroforests are low- to no-input systems because

most farmers have limited access to chemical fertilizers and little experience using the large

inputs of organic residues recommended to maintain soil fertility (e.g., Nicholaides et al.

1985, Szott et al. 1991). Throughout the Amazon Basin, it is estimated that nitrogen (N) and











5
phosphorus (P) deficiencies limit crop production in 90% of the region's upland soils

(Nicholaides et al. 1985). Maintaining P availability to crops plants may present a larger

challenge to sustained agroecosystem productivity because much of the total soil P stock is

geochemically bound to iron and aluminum oxides in forms largely unavailable for plant

uptake (Dias-Filho et al. In press). In agroecosystems where N requirements are met with

organic residues from leguminous plants, organic matter decomposition, mineralization and

fixation of N2 may be limited by soil fauna and bacteria sensitivity to P deficiency (Ewei 1986,

Crews 1993). From long-term studies of continuous cropping in Amaz6nia, Sanchez et al.

(1985) concluded that attempts to produce food crops in acid Oxisols and Ultisols without

the use of soil amendments are likely to fail. The question is, then, how sustainable are these

low- to no-input tree-based cropping systems planted by farmers throughout the Amazon

Basin?

At the time this study was initiated in 1995, RECA farmers were beginning to realize

the economic benefits of the original cupuassu-peach palm-Brazil nut agroforestry systems.

The continued adoption of commercial plantation agroforests throughout western Amaz6nia

underscores the importance of determining if these tree-based systems do offer greater

ecological stability than other land-uses, especially because conversion of native terrafirme

forest into perennial crops is likely to increase as federally-sponsored colonization projects

planned for Acre proceed (Brown pers. comm., Slinger 1996). The RECA project provides

a timely and much-needed case study for evaluating the potential for both economic and

ecological sustainability of these commercially-harvested tree-based agroecosystems.












Research Question and Objectives

The overall objective of this research was to evaluate the potential for ecological

sustainability of a widely-adopted commercial plantation agroforestry system comprised of

native Amazonian forest tree species. The central question guiding the studies was

1. How sustainable are low-input, commercial plantation agroforests in Amaz6nia, and

what are some of the factors that control sustained productivity in these systems?

Specific study objectives intended to address this question were to

1. Analyze soils from eight RECA agroforestry systems and adjacent native forests to

determine how soil chemistry has changed since conversion of primary forest to

agroforest.

2. Assess potential P limitations to agroforest and native forest plant productivity using

a root ingrowth bioassay.

3. Quantify the stocks and fluxes of P and N in an eight-year-old RECA agroforest, and

construct an annual budget to determine how much of the system's P and N

requirements are (a) met through internal cycling, (b) taken up from soil stocks, and

(c) removed with harvest.

4. Identify socio-economic challenges to the sustainability of RECA agroforestry

systems, particularly those that constrain modifications in agroforest management

practices, through interviews, focus groups, and discussions with RECA families and

other local NGO's and research institutions.

5. Conduct the research using a participatory approach that (a) encourages farmers'

involvement in the formation of research objectives, data collection and interpretation











7

of results, and (b) fosters a multilateral exchange of knowledge, information, and

experience among researchers and land managers.

This dissertation is divided into eight chapters, including the introduction. The

second chapter is a synthesis of the history of the RECA project largely based upon

unpublished reports, local newspaper articles, and interviews and discussions with RECA

families and other Brazilian organizations conducted as part of this research. It summarizes

the past and present challenges faced by the producers' organization, as well as the socio-

economic benefits enjoyed by RECA farmers as a result of community-level agroforestry

adoption. Although RECA is somewhat atypical from many producers' groups (e.g., it has

received large amounts of outside financial assistance), the decade-old project demonstrates

many of the complex socio-economic issues associated with agroforestry system adoption,

underscoring the fact that the search for ecological stability addresses only half (or maybe

less) of the sustainability question.

Farmer participation was an important element of this project. It is hoped that

participation by RECA farmers improved the likelihood that the scope of this research

ultimately renders results that are useful to land managers in Acre. However, given the time,

monetary, and academic constraints of doctoral research projects, perhaps the most

immediately useful research output to RECA farmers was the participatory process itself,

described in Chapter Three. This chapter briefly outlines reasons for adopting a participatory

approach to on-farm agroecological research, describes the methods used to encourage

farmer participation in this research, evaluates the positive outcomes of the process, and

identifies areas in need of improvement.











8
different aspects of ecological sustainability from a nutrient cycling perspective, since

nutrients, such as P and N, are cited as the resource most limiting to productivity in natural

and managed ecosystems throughout Amaz6nia. The fourth chapter examines soil changes

six years following conversion of native forest to agroforests, especially those in extractable

P, and attempts to identify P limitations to plant productivity. The fifth chapter analyzes

seasonal fluctuations in soil P availability in relation to leaf litter decomposition and the

agroforest's production cycle. In chapter six, system-level P and N dynamics in the

agroforest are compared with those of other Amazonian land-uses, including native forests,

pasture and shifting cultivation. The concluding chapter attempts to synthesize information

on agroforest P and N dynamics within the context of the socio-economic constraints and

opportunities faced by rural households (identified by researcher and RECA farmers) to

develop recommendations for management that enhance the cycling of organic matter and

nutrients to sustain productivity in this and other tree-based Amazonian agroecosystems.
















CHAPTER 2
THE RECA PROJECT


The Settlement of Nova Calif6rnia

The state of Acre, located in the western Amazon Basin on the borders of Bolivia and

Peru, is one of the last frontiers in the Brazilian Amazon (Grupo PESACRE 1989). An

important rubber-producing region previously considered part of Bolivia, Acre was annexed

by Brazil in 1903 following a war with its South American neighbor (Hecht and Cockbumrn

1990). The economy in Acre was thus originally based in forest extraction, and its inhabitants

were primarily indigenous peoples and rubber tappers, Brazilians brought from other regions

in the country to extract latex from trees growing in native forests (Kandell 1984). In the

1970s, the governmental institution, INCRA (Instituto Nacional de Colonizaqao e Reforma

Agraria), launched a large colonization project, referred to as the Polonoreste, in the

neighboring state of Rond6nia. The project encouraged families from south and southestemrn

Brazil, where agricultural modernization was displacing small farms, to resettle in this

relatively undeveloped region of western Amaz6nia by giving them title to 100 ha lots of

largely undisturbed forestland to farm (Browder 1996). In the process, the national highway

BR364 was paved, linking Rond6nia and later, Acre, to the rest of Brazil. These events

initiated a wave of migration to Rond6nia and Acre that consequently led to accelerated











10
deforestation in the region as colonist farmers and large-scale ranchers cleared native forest

for pasture and shifting cultivation (Hecht and Cockburn 1990).

The colonist community of Nova Calif6rnia, which lies on the border of Acre and

Rond6nia (10S, 67W), was officially recognized as a town by INCRA in 1984. Previously

known as "Santa Clara", which was little more than a gas station, a restaurant and five

houses, Nova Calif6rnia's establishment represented INCRA's official claim to land

previously controlled by the former owners of the rubber estate (seringal) Calif6rnia (RECA

unpublished). The region's population increased considerably in the mid to late 1980s as

families migrated from the southern Brazilian states of Parana, Rio Grande do Sul, and Santa

Catarina, many of them stopping in Rond6nia for several years before finally settling in Acre.

Located 150 km east of Rio Branco, the capital of Acre, Nova Calif6rnia now provides a

political and economic base for over a thousand farm families living on unpaved "feeder"

roads connected to the BR 364.

At the time of this study, state ownership of the region in which Nova Calif6rnia was

located had been disputed since the early 1980s by the governments of Acre and Rond6nia,

both of whom claimed the region as their own (Moreira 1992). The lack of legal definition

of the border between the two states greatly aggravated the economic hardship of families

living in and around Nova Calif6rnia because neither government was willing to invest

resources to build and maintain infrastructure in a town that might ultimately become the

property of another state. As a result, road maintenance, schools and medical facilities were

poorly funded, and INCRA, the organization that had brought families to the region,

essentially abandoned the community (Leite unpublished). Most residents had to travel











11
several hours on an unpaved road to Rio Branco for even minor medical care. Malaria, in

particular, was a medical problem that plagued residents, although this is now treated at a

community health post (PESACRE and GENESYS unpublished). Schools on feeder roads

continued only to the fourth grade, and families had to send their children to Rio Branco to

attend high school (Campbell 1994). During the rainy season, many families were forced to

walk up to 50 km to reach the BR364 because the mud made the unpaved feeder roads

impassable by car, bike, and horses. Because Nova Calif6rnia was never linked to a utility

grid, at the time of this study, electricity was provided to residents in town by a small

unreliable generator that was operated only in the evening, from six to twelve PM. Families

were responsible for digging their own wells, and "running" water was acquired by pumping

well water (using a diesel or electric pump) into a cistern built above the house. Wells

frequently dried up during the months of July and August, leaving families and the RECA

organization to collect water from swamp areas located at the edge of town. Most families

on the feeder roads still did not have access to electricity or running water at the end of this

study period.

The difficulties faced by these colonist farmers were made worse by the fact that

many of the crops they initially planted grew poorly, and in some cases, failed entirely due to

poor soils, pests, and insufficient marketing infrastructure. For example, monocultural

plantations of cacao (Theobroma cacao L.) succumbed to witches' broom (Crinipis

perniciosa (Stahel) Singer), and poor access to highly competitive markets impeded farmers

from selling coffee (Coffea arabica) (RECA unpublished). Moreover, most families were

unaccustomed to farming in the nutrient-poor soils underlying native Amazonian forest.











12
Many faced extreme hardship when their shifting cultivation plots of rice, beans, and maize

failed to produce adequate harvests during the second or third year following forest clearing.

As a result, many families were forced to abandon their farms and resettle in other regions,

or return to southern Brazil. Although Brazilian law obliges farmers to maintain 50% of their

land in native forest, it is not difficult to encounter vast tracts of deforested land in the region

surrounding Nova Califrrnia. Many of these deforested areas were created by ranchers who

bought up dozens of 100-ha lots from desperate colonist farmers and cleared them entirely

to raise cattle. Unfortunately, these large cattle ranches often proved unsustainable

themselves, due to poor soils and the invasion of weeds that precluded the regeneration of

pasture grasses, and in some cases, to a more recent drop in cattle prices throughout Brazil

(Hecht and Cockburn 1990, Browder pers. comm.). Consequently, many of these vast

degraded pastures have also since been abandoned.

Proieto RECA

In response to the economic crisis suffered by the region's families, the RECA project

(Projeto de Reflorestamento Consorciado e Adensado) was initiated by a group of farmers

in 1988. Fatigued with the enormous labor and risk associated with the shifting cultivation

of annual crops, these farmers began to experiment with plants native to Amaz6nia, and in

particular, tree crops. One of the group's leaders, Sergio Lopes, a university-trained teacher

from Santa Catarina, was also concerned about the ecological impact of deforestation

associated with shifting cultivation and farm abandonment. With assistance from the Catholic

Diocese of Rio Branco, the Federal University of Acre (UFAC) and the Institute of

Amazonian Research (INPA), the producers' group submitted a project proposal to various











13
European philanthropic organizations. The objective of the RECA's proposed project was

to increase the economic well-being of colonist farmers through the production of high-value

perennial crops. Because the tree crops proposed were native to Amaz6nia, it was also

reasoned that they were better adapted to the region's weathered forest soils and natural

pests, and thus more likely to persist and sustain productivity in these conditions. Thus, by

offering a more ecologically sustainable alternative to shifting cultivation, these systems could

decrease land abandonment and deforestation associated with small-scale production.

In 1989, the project acquired funding ($ 2 million USD) from Catholic organizations

in the Netherlands (CEBEMO) and France (CCFD) to inititiate the establishment of a multi-

species perennial crop-based commercial plantation agroforest on over 200 farms (Martinello

1993, Smith et al. 1997). The first agroforestry system established by the RECA project in

1989 and 1990 (described fully below) was comprised of three perennial species native to

Amazonia, and participants were required to plant the components in a specific configuration

of species and spacing designed by the RECA organization.

Monetary incentive was an important factor attracting families to participate in the

RECA project. For every hectare of commercial plantation agroforest planted, participating

families received approximately $1,000 (USD) over a three year period from RECA to help

offset expenses incurred during plantation establishment and to help sustain households during

the initial years required before the perennial system began yielding fruit (Moreira 1992). In

return, the participating families were obliged to give a proportion of each harvest, beginning

with the fourth year, to the RECA organization for 10 years after plantation establishment.

The proportion of harvest increased, from 5% during the fouth and fifth years, to 30% by











14
year ten, and the proceeds from the sale of products were used to support administrative and

operating costs of the RECA project. Services provided by the organization included the

transportation of raw products from farms on feeder roads to a small factory located in Nova

California where the pulp of cupuassu fruit was processed and stored frozen, and later

transported to urban centers, such as Rio Branco, for sale. Farmers were responsible for

transporting and marketing peach palm fruit themselves, and because the fruit is so highly

perishable, many farmers simply sold the palm seed to buyers interested in establishing heart-

of-palm plantations. More recently, the organization received financial assistance from

another non-governmental organization (NGO) to build a canning factory for palm heart, and

an auditorium/dormitory in which regional meetings with other producer organizations are

held. In addition, RECA's role in the community has not been confined entirely to

agricultural production. Nuns of the Catholic church who run a homeopathic pharmacy in

Nova Calif6mrnia regularly train RECA health agents in basic first aid and medicinal plant use

(Campbell 1994). So while RECA started out with a community-based agroforestry project,

the organization has evolved to represent and address the social and economic needs of the

people in and around Nova California, and for better or worse, the organization has become

quite politicized.

Participating farmers entered RECA through regionally-based groups, usually defined

by the feeder road the producers lived on. At the time of this study, there were a total of 15

groups, each led by an individual who acted as a liaison between the regional group and the

RECA organization by representing the group at monthly RECA coordinators' meetings. In

each group there was also a "tecnico", a fannrmer provided with technical training, sponsored











15

by RECA, whose role was to assist members with production related problems, and

introduce new species to plant, such as leguminous cover crops or native timber trees for new

plantations. At least four of the fifteen groups were led by women, although Campbell

(1994) notes that despite the project's seemingly democratic organization, women's voices

are hard to hear. Twice annually, all members of RECA were assembled for a three to five

day period, during which they reported on the health and productivity of their farms, and

discussed issues regarding new plantations, production, transport, processing and marketing.

'These assemblies also provide opportunities for research and extension organizations, as well

as for other producer groups in the region to meet with RECA farmers and discuss problems

related to agroforest management and product marketing. RECA has also attempted to

provide farmers with greater access to information and technical assistance. During the

period this study took place, two Brazilian non-government organizations (Projeto SOS and

Projeto Tapiri) offered week long environmental education courses to RECA farmers, and

RECA has formed partnerships with extension and research organizations such as PESACRE

(Grupo de Pesquisa e Extensao em Sistemas Agroflorestais do Acre) and EMBRAPA

(Empresa Brasileira de Pesquisa Agropecualia).

Agroforest Establishment

The specific agroforestry configuration under study was planted on over 300 farms

on approximately 450 ha in 1989 and 1990 (Leite unpublished). The system is two-tiered,

dominated by an upper canopy of peach palm (Bactris gasipaes Kunth) and Brazil nut

(Bertholletia excelsa Humb. & Bonpl.) with a middle canopy formed by cupuassu

(Theobroma grandiflorum (Willdenow ex Sprengel) Schumann). The agroforest's principal











16
products include cupuassu pulp, peach palm fruit and seed, and heart-of-palm, all of which

are consumed domestically as well as marketed regionally.

Typically, these agroforests were established by cutting and burning native forest

vegetation and interplanting one-year-old peach palm and cupuassu seedlings in rows at a

spacing of 4 x 7 m. Some agroforestry systems were also planted on old fallow fields

(capoeira). In every third row, Brazil nut was planted alternately with cupuassu to complete

a stocking density of approximately 370 trees ha', the majority of which are cupuassu and

peach palm (190 and 150 trees ha', respectively). The seedlings were raised on farm from

seeds collected from marketed fruit and surrounding forest; thus there exists considerable

genetic heterogeneity within each of the agroforests' three perennial components. At the time

of establishment, enough farmyard manure to fill a "milk can" (approximately 250 ml, equal

to about 0.5 and 0.15 kg ha"' N and P, respectively) was added to each seedling's planting

hole. During the first year, annual crops (maize, beans, rice, or cassava) were cultivated

between the agroforest rows to offset the initial expense of establishing the perennial system

(Wallace 1994). Thereafter, understory regrowth of native vegetation was cut twice annually

and left to decompose on the agroforest floor. In some systems leguminous cover crops

(Macuna cochichinensis and Pueraria phaseoloides) were planted in agroforest rows for

nitrogen fixation and weed control. However, due to the increased risk of fire hazard and the

fact that the vines began growing over the top of the tree canopies, the legumes were

eradicated from the agroforests three years after establishment. Since establishment, grazing

livestock were excluded from the agroforest, and no other amendments of any kind were

applied to the system.













Agroforest Tree Species

Peach Palm

The origin of peach palm (Bactris gasipaes Kunth, Palmae) is somewhat

controversial. Historically, peach palm, or "pupunha" in Portuguese, was grown throughout

tropical America by many pre-Colombian Amerindian communities for food, fiber, and

medicine. Clement (1988) cites the great genetic diversity in peach palm populations of

western Amaz6nia as evidence that the species originated in this region, although Mora Urpi

(1992) suggests that multiple domestication events may have taken place.

At present, two products are harvested from peach palm grown in multi-species

commercial plantation agroforests; an energy- and nutrient-rich fruit that is consumed locally,

and the tender unexpanded leaves produced by the apical meristem of young offshoots,

referred to as palm heart. The latter product is potentially more lucrative as it can be sold

both throughout Brazil and abroad as a high-priced delicacy. Peach palm is multi-stemmed,

producing as many as 12 offshoots that arise from axillary buds encircling the main stem.

This feature, in particular, has made it very popular for "sustainable" palm heart production

because unlike single-stemmed palms from which palm heart is also harvested (Euterpe spp.),

peach palm offshoots can be removed without killing the whole plant. Stems of peach palm

may attain up to 24 meters in height, but the species' relatively small crown, typically

composed of 10 to 30 pinnate leaves (Arkcoll 1990, Mora-Urpi et al. 1997), minimizes

shading of other agroforest components. An undesirable characteristic of the palm is that

stem internodes are frequently covered with long spines which present a hazard to livestock

and complicate fruit harvest for farmers. Peach palm root growth is generally concentrated











18

in the top 20 cm of soil, although a superficial mat of adventitious roots often develops at the

stem base and may extend up to five meters from the trunk (Ferreira et al. 1980). As leaves

and fruit abscise from palm stems, decomposing organic matter from fallen litter accumulates

in the root mat. Vandermeer (1977) states that approximately 75% of peach palm roots are

located within the perimeter of the canopy, but Ferreira et al. (1995) observed absorptive

roots extending up to nine meters from the stem base. The palm is relatively productive in

well-drained Oxisols and Ultisols, tolerating up to 50% aluminum saturation, although studies

have shown that nutrient additions are necessary to sustain long-term productivity (Mora-

Urpi et al. 1997). Because P is generally limiting in tropical soils, some work has been

conducted to determine the importance of P availability and mycorrhizal associations to peach

palm development and productivity (St. John, 1988, Clement and Habte 1995). For example,

Habte and Clement (1994) demonstrated that P fertilization greatly increased seedling leaf

growth, biomass increment and overall vigor, and Ruiz (1991) found that peach palm

infection with vescibular-arbuscular mycorrhizae was negatively correlated with soil P

concentrations.

Flowering in peach palm begins between the ages of 3 and 5, and the palm may

produce annual crops for up to 50 years, although estimates for fruit production in nutrient-

poor Amazonian soils are much lower (i.e., 20 to 25 years, Clement pers.comm.). The oily

fruit produced by the palm is highly perishable, and thus difficult to transport fresh to markets.

A beta-carotene-rich flour is made from dried fruit, employing the same on-farm processing

technique used for the fabrication of cassava flour, a traditional staple in Amazonian

households (Dibari pers. comm.). The fruit is also used for animal feed, and RECA farmers











19
have found it lucrative to sell peach palm seed to buyers interested in establishing heart-of-

palm plantations. Clement (1989) notes that commercial production of fruit and heart-of-

palm in the same system is not practical because the latter requires high density (4,000 plants

ha"') monospecific plantations to be economically viable.

Cupuassu

Theobroma grandiflonrm (Willdenow ex Sprengel) Schumann, Sterculiaceae, is one

of nine species in the same genus native to the Brazilian Amazon. Cupuassu ("cupuaqu" in

Portuguese) occurs naturally in forests of the eastern Brazilian states of Para and Maranhio,

but its distribution has spread across the Amazon Basin (Cabral Velho et al. 1990, Venturieri

1993). Like its relative, cacao (Theobroma cacao), it is a broad-leafmesic species that grows

naturally in the understory of terrafirme forests, tolerating both shade and nutrient-poor

soils. The species' growth habit is pseudo apical, resulting in a relatively small-statured (5

to 15 m height) tree, with a plagiotropic canopy projecting outward, up to eight meters from

the trunk (Ribeiro 1992, Ventureiri 1993). Cupuassu is generally pest-resistant, although like

cacao, it is susceptible to witches' broom (Crinipis perniciosa).

The large (12 to 25 cm length, 10 to 12 cm diameter) woody elliptical fruit pods

(loculicidal capsules) produced by cupuassu are harvested for the fragrant creamy pulp which

is used in desserts, candies, and drinks throughout Brazil (Cabral Velho et al. 1990). More

recently, methods have been developed to use fermented cupuassu seeds, much in the same

manner that cocoa beans are processed for chocolate, to make a confection known as

cupulatee" (Ribeiro de Nazare et al. 1990, Wallace 1994). Cupuassu typically flowers at the

end of the dry season, with maximum fruit production occurring during the mid to late rainy











20
season. The species is known for its low fecundity; Ventureiri (1993) found that 3,500

flowers per tree were necessary to produce 15 fruit. Trees begin bearing fruit as early as three

years of age, and by year six or seven, an average tree produces between 12 and 15 fruits per

season. Peak fruit production, reported to be as great as 100 fruits per tree per year, occurs

between ages 10 and 20, but trees can continue to bear fruit for up to 30 years (Ribeiro

1992). The author has seen 50-year-old productive cupuassu trees growing in mesic habitats

on homesteads in eastern Amazona. To maintain plantation productivity, Calzavara (1980)

recommends a yearly application of 100 g fertilizer (15% ammonium sulfate, 50%

superphosphate, 15% potassium chlorate) per tree, broadcast on the soil surfacejust beneath

the canopy's drip line.

Brazil Nut

A rare upper canopy emergent in Amazonian terra firme forests, Brazil nut, or

"castanha" in Portuguese, (Bertholletia excelsa Humb. & Bonpl.: Lecythidaceae) trees may

attain heights of 50 meters (Mori and Prance 1990). A mature tree has a straight, relatively

unbranched bole and small crown which makes it a favorable upper story agroforest

component. Taproot extension of Brazil nut trees growing in forests and pasture in eastern

Amazona has been observed 5 to 10 meters into the soil (Nepstadt et al. 1994). While the

tree grows naturally in the well-drained nutrient-poor soils underlying native forest

vegetation, Kainer et al. (1998) found that Brazil nut seedlings planted in shifting cultivation

plots, where light and nutrient availability were greater, grew more vigorously and had higher

foliar nutrient contents than those planted in forest gaps.











21

Most Brazil nuts are collected from wild trees growing in forests, however, the

species has more recently become a component ofmonospecific plantations and multi-species

agroforests in Amaz6nia. Although it may take 25 years for forest trees to reach maximum

production (estimated to be several hundred fruit per tree per year), trees grown in more

intensively-managed plantations may begin bearing fruit within eight years after establishment

(Mori and Prance 1990). In addition to being a food staple for forest dwelling communities,

Brazil nuts have become an important Amazonian cash crop, both sold for domestic

consumption and exported abroad (Kainer et al. 1998). Despite its economic potential,

Brazil nut was typically a minor component in the commercial plantation agroforests

examined in this study.

Challenges Facing RECA

Since its establishment, RECA's peach palm-cupuassu-Brazil nut agroforestry system

has been highly productive. The total harvest ofcupuassu fruit from RECA agroforests was

reported to be 75 tons in 1994 and 120 tons in 1995 (Leite unpublished). Evidence of

greater economic prosperity for many RECA farmers is demonstrated throughout Nova

Calif6rnia, with an increased building of new homes with all-weather roofs, as well as satellite

dishes and diesel generators that are found even in some homes located on the more secluded

feeder roads. Many farmers also claim that the profits made through the sale of cupuassu

pulp, peach palm seeds, and heart-of-palm have allowed them to invest in other productive

endeavors on their farm, including small-scale cattle ranching. Nova Calif6rnia itself has

grown considerably, with several more markets, bars, and furniture builders, providing further

evidence of increased prosperity in the community. Also, RECA's initial success has earned











22

attention, recognition and respect for the producers group from local research and extension

institutions who are eager to initiate on-farm studies with the organization to examine

everything from the use of leguminous cover crops and breeding of spineless peach palm

stems, to establishing dairy farms in the community. Visits from T.V. crews, journalists and

reporters from southern Brazil were common during the time this study took place. The

group's recognition has given them an advantage in applying for economic assistance from

other foreign NGO's, although many argue that this has created a dependency on outside aid

which prevents the organization from becoming a model of economic and ecological

sustainability.

Moreover, impressively high yields on relatively poor soils has not spared the

organization from other socio-economic problems, the largest of which have thus far been

associated with product processing and marketing (Smith et al. 1997). One of the first such

difficulties arose with the unexpectedly high yield of peach palm fruit. Because it is highly

perishable, the fresh fruit must be transported and marketed very shortly after harvest, and

the local market for fruit is somewhat limited in its demand for the starchy fruit. As a result,

much of the peach palm fruit harvested spoils while awaiting transportation or is fed to pigs

for lack of a buyer. As previously mentioned, some RECA farmers are now making a flour

from boiled fruit, and attempts are being made to market this product for commercial use in

cereals, cakes and pasta (Dibari pers. comm.).

In addition to creating daily hardship in rural households, the lack ofinfrastructural

development and maintenance in the region surrounding Nova California has presented

obstacles for the transport, processing and marketing of RECA products. During the period











23

this study took place, RECA had record high production of cupuassu fruit. However,

because the market in nearby Rio Branco became quickly saturated with the fruit pulp during

peak cupuassu production months, the fruit pulp was frozen for sale later in the year when

pulp stocks had decreased and fruit prices increased. Because electricity is so unreliable in

Nova Calif6rnia, RECA had a diesel-fueled generator that provided power to the small freezer

in the organization's local processing unit. However, extremely high cupuassu production

early in 1996 forced RECA to rent freezer space in Rio Branco to store 62 tons of pulp

(Smith et al. 1997). Renting the space increased the cost of processing and marketing the

product by RECA, so that the organization was short of funds to purchase unprocessed fruit

from local producers. Furthermore, the freezing and thawing of cupuassu pulp in RECA's

freezers during power lapses lowered the quality of this product and made it less marketable

in urban areas. By the end of the season, many producers were furious with the organization

who either owed them money or had quit purchasing their fruit. The problem was

compounded by the fact that impassable roads during the rainy season made it difficult for the

drivers of RECA's two vehicles to pick up fruit from more remotely-located farms. As a

result of transportation difficulties and RECA's inability to purchase fruit brought on by the

unanticipated high cost of frozen pulp storage, a large portion of the 1996 harvest was lost.

The inability of producers to sell their products to RECA, or transport them to other markets,

created economic hardship for many of the less well-off households, and provoked a lot of

bitterness towards the organization. Many of the farmers that originally received money from

RECA to establish the agroforest have since left the organization, and some now work for

a new privately-owned foreign company (Agro-Amaz6nia) that moved into Nova California











24

in 1996 to produce and process fruit such as pineapples, palm heart, watermelon, and

cupuassu. Nor is it clear that many of the farmers currently benefitting from the membership

in the organization are truly committed to repaying the loans they received to establish the

system. The default on payments by many producers has increased financial stress for the

organization (Lopes, pers. comm.).

Smith et al. (1997) concluded that RECA is not a viable model for sustainable

agroforestry in Amazonia because of the organization's inability to resolve processing and

marketing problems and chronic dependence on external financial aid. However, there is

evidence to suggest that RECA is learning from its early mistakes and slowly working out the

economic difficulties it faces, especially through collaboration with both non-governmental

and governmental institutions such as PESACRE and EMBRAPA. PESACRE, in particular,

has conducted short courses aimed at teaching farmers basic marketing principles and

choosing more marketable products to grow in the future (Haydu and Wallace 1997). The

Italian Aid agency, MLAL, has sent several volunteers to RECA to investigate ways to add

value to products through processing and decreased marketing costs. For example, RECA

is now working on producing jams and syrups from cupuassu pulp, which not only increases

the value of the pulp before it is marketed, but also decreases the costs of transporting and

storing frozen pulp. This will be an especially effective strategy if the cupuassu confections

can be marketed in sealed plastic bags to avoid the high processing and transporting costs

associated with glass containers. The toasted pupunha flour, as well as the chocolate

cupulatee) made from cupuassu beans also offer real possibilities to increase the return of

agroforest products to both farmers and the RECA organization. In addition, the MLAL











25

volunteer has worked with RECA to increase the standards of hygiene, quality and safety of

RECA products, and in particular, of canned heart-of-palm, which was one of the most

lucrative agroforest products produced by RECA because it is consumed throughout Brazil

and potentially exported abroad. Likewise, when Brazil nut begins to fruit, high marketing

potential also exists for the nuts, because they are already sold abroad from other areas in the

Amazon, and require relatively low-tech processing (Kainer 1997). Also, shortly after this

study's field research was completed, the border dispute between Acre and Rond6nia ended

with the legal incorporation of Nova Calif6rnia into the state of Rond6nia. State membership

will likely entitle Nova Calif6rnia to greater political and economic support, and

infrastructural improvements made by the government of Rond6nia should diminish some of

RECA's processing and marketing dilemmas. Finally, from the standpoint of biological

sustainability, RECA farmers have been very open to outside researchers attempting to

address soil fertility problems. Researchers from EMBRAPA and INPA continue to work

with individual farmers to determine which leguminous cover crops are most efficiently

managed by farmers while increasing soil nitrogen availability to crop plants. It is hoped that

future courses on product processing and marketing, as well as on agroecosystem

management, will be conducted in RECA's new auditorium in collaboration with producer

groups from all over Amaz6nia so that more of the region's rural families will benefit from

continued education and self-empowerment that will lead to more economically and

ecologically viable agricultural systems and healthier, more secure livelihoods. In this way,

RECA would indeed provide a model if it is able to confront challenges that face land

managers throughout Amaz6nia, and persevere to overcome these obstacles and assist others.
















CHAPTER 3
APPLYING A PARTICIPATORY APPROACH
TO AGROECOLOGICAL RESEARCH


Introduction

Over the past two decades, "on-farm research", "farmer participation", and "rural

people's knowledge" have become expected components of much agroforestry and

agroecological research, and a wide range of innovative and non-traditional research tools

have been developed to facilitate and strengthen the participatory process (e.g., Mascarenhas

1992, Feldstein and Jiggens 1994). In fact, the process of fannrmer participation has provided

a new paradigm for the development of more sustainable agricultural practices in resource-

poor risk-prone areas, as well as a tool of "empowerment" through which rural people may

achieve more secure livelihoods (Chambers et al. 1989, Rocheleau 1991).

Among the reasons for including the "recipients" or "target group" of technological

developments as informers in the investigative process is the ability to gain a greater

understanding of the interests, priorities and problems faced by user groups. These factors,

as well as household and community level socio-economic constraints (i.e., financial,

practical, educational, motivational, traditional, cultural, political), are critical considerations

in the development of appropriate agricultural technologies and their potential for future

adoption (Beer 1991). User participation thus has the potential to make research results more

practically applicable.











27

Moreover, the participatory process itself offers opportunities for both land managers

and researchers to interact collaboratively in the development and application of more

sustainable management techniques. The extent to which local people are encouraged to

participate in on-farm research varies considerably, from researcher-designed and -managed

trials that address problems identified, in part, by local land-users, to researcher study of trials

designed and managed by land-users (Rocheleau 1994). A mutually respectful and trusting

relationship fostered by the participatory process increases the likelihood that researchers will

benefit from the specific experience-based knowledge provided by farmers about the

landscape and land-use strategies that have succeeded or failed in the past (Scherr 1991).

Local participants may gain an enriched understanding of the processes controlling

agroecosystem productivity and health, as well as how such processes are maintained or

degraded through manipulation. This knowledge may enable them to manage their land more

sustainable.

Studies have shown that participation in agroecological research encourages farmers

to improve land management practices through continued experimentation on their own. For

example, Ruddell and Beingolea (1995) found that training farmers to conduct their own

research was a much more effective strategy for raising food security than attempting to

provide a "'technology package" that would not serve the diverse ecological micro-climatic

and socio-economic conditions faced by Andean potato farmers. Kainer (1997) found

participation in the research process helped rubber tapper families in the Brazilian Amazon

recognize their strategic position and power when negotiating with NGO's and other

conservation and research organizations.











28
There are critics who charge that "empowering" local people through participation

is "naive populism" because it implies that "powerful outsiders" must help "powerless

insiders" (Thompson and Scoones 1994). Several authors have pointed out that a "lack of

understanding" may not dictate how resource-poor farmers manage their land. Rather, a

complex set of personal socio-economic and political circumstances, often hidden to

outsiders, operates to constrain management choices (Chambers 1983, Thrupp 1989). Thus,

while useful, an increased understanding ofagroecological processes may not necessarily have

an immediate impact on management decisions. Nevertheless, both researcher and farmer

offer distinct sets of experience and tools, derived from different cultural backgrounds and

traditions of knowledge creation, none of which should be ignored when developing,

adapting, and applying more sustainable land-use practices.

A participatory approach was applied in this agroforestry research to (a) gain a greater

understanding about the role of perennial crops in Amazonian fannrming systems, and household

constraints to modifying agroforest management strategies, (b) stimulate household and

community-level discussions about the role of organic matter and nutrient cycling in

controlling agroecosystem productivity, (c ) elicit realistic management strategies from

farmers to enhance and sustain productivity, and in doing so, provide results useful to the

region's farmers. In this study, the participatory processes of dialogue and exchange among

researchers and farmers were facilitated through two principal channels; (a) focus group

discussions held during organized meetings and presentations, and (b) informal interviews

or "conversations" held with members of 10 individual households during field visits.












Methods

Research Initiation

RECA farmers participated during the formulation of research objectives, study site

selection, data collection, and presentation and interpretation of preliminary results. The

design of trials, analysis of data, and statistical interpretation of results were the responsibility

of the researcher. The presentation of final results to farmers is the last step awaiting

completion, as discussed later in this chapter. Another participatory dimension to the research

was close collaboration with local university, government, and non-governmental

professionals. Collaborative ties were made with local Brazilian agencies, such as PESACRE

(Pesquisa e Extensdo dos Sistemas Agroflorestais no Acre), a non-governmental organization

(NGO) working with colonist farmers on agroecological problems, EMBRAPA (Empresa

Brasileira de Pesquisa Agropecuaria), a national agronomic research institution, and SOS

Amaz6nia, a group of environmental educators. PESACRE, in particular, provided crucial

logistical assistance and a field assistant from the local university who was trained in

agroecological research methodologies during the research period.

As mentioned in the previous chapter, the original "RECA" agroforestry system was

both conceptualized and planted on over 200 farms in the late 1980's by the producers

themselves, although the group did receive some technical advice from local research

institutions and NGOs. By the time I conducted a six-week pilot study in Acre in 1994, the

RECA project was already well known throughout the western Amazon, and several extended

visits to RECA farms left me with two questions: how could these agroforestry systems be

so productive in seemingly nutrient-poor soils, and how long could such productivity last











30
without more intensive management? Conversations with host families and members of

RECA administration included discussions about their experiences with this agroforestry

system, as well as their concerns regarding the agroforest's health and productivity, and the

marketing of its products. From these conversations and additional feedback received from

PESACRE, I formulated preliminary study objectives to present to RECA during one of their

official assembly meetings before returning to the U.S. to write a research proposal.

Including RECA farmers in the formulation of research objectives as part of the

participatory process necessitated that I change my research plan entirely from that previously

delineated in the original pilot study proposal. The basic objective agreed upon between

myself and RECA farmers was that I would develop a project that would examine processes

controlling productivity in the system in relation to its management by households, so that

research results could be presented to the group in the form of recommendations for

sustaining and enhancing agroforest productivity. Moreover, after the proposal had been

developed, I attempted to meet the concerns of local farmers by adapting the root ingrowth

bioassay to include a study of root competition (Chapter 4). RECA farmers were concerned

about what they perceived to be "aggressive" root competition by peach palm, as evidenced

by the species' thick shallow network of roots that extended well beneath the canopies of

cupuassu. This was especially alarming for farmers because cupuassu was the most

economically important component of the agroforest at that time. Maintaining soil fertility

was also a concern for them, as farmers were committed to using only organic soil

amendments (the actual use of which appeared to be quite limited), primarily because

chemical inputs were expensive and not easily procured in this region. Other issues outside











31

my realm of training discussed by the organization and households included pest problems,

especially witches' broom, which had previously wiped out cacao plantations, and the

transport, processing and marketing of agroforest products.

Within a year of my initial visit, a simplified version of the research proposal approved

by my advisory committee was translated into Portuguese and sent to PESACRE and RECA

leaders for review. PESACRE determined that the research would fit within their

professional priorities and contacted the Federal University of Acre (UFAC) to find a an

agronomy student in need of a supervised field research project to meet graduation

requirements. The student was paid to work as a field assistant with the understanding that

I would train her to conduct agroforestry research and guide her through her senior thesis

project, with the prospect of her future employment with PESACRE.

Presentations and Group Discussions

Nutrient budget study. Prior to initiating the biological studies, as well during the field

data collection period, the research plan was presented to RECA farmers through a series of

meetings arranged by leaders of the producers' group. A summary of group presentations

made to RECA and other local organizations is provided in Table 3-1.

The phosphorus (P) and nitrogen (N) budget study was first introduced during an

ecology course given by SOS Amaz6nia, an interdisciplinary group ofBrazilian environmental

educators. Following an SOS-led session on soil fertility, I used a "bank account" analogy

to explain how the system, or "agroforestry account" is comprised of different reserves (i.e.,

soil, above- and below-ground biomass, litterfall, microorganisms, etc), and how this"capital"

is transferred in and out of the account with fertilization, mulching, harvesting, leaching and













32
other processes that add or remove nutrients from the system. We then briefly discussed how

management practices may contribute to conserving and building nutrient capital, increasing

the likelihood that the agroforestry system would be productive in the future.

After the basic study methods and participants' responsibilities were outlined,

recommendations by farmers were solicited and recorded on a flip chart. Their requests

included that (a) the research involve several farms, (b) I attend official RECA group

meetings to become acquainted with farmers and update them on the study's progress, and

(c) a Brazilian be trained to continue this type of research after my departure. Following the

discussion, several farmers volunteered their agroforestry plots for the study, and it was

agreed that the final site selection would be made after visiting the farms.

Root ingrowth and soil studies. In addition to identifying P limitations to agroforest

productivity, the root ingrowth bioassay was also designed to address the farmers' concerns

about peach palm root competition by comparing the growth of roots by this and other

agroforest components into ingrowth cores buried in the soil for a specified period of time

(Chapter 4). Soil samples from agroforestry systems and adjacent native forest on eight

farms were to be analyzed to determine how the agroforest soils had changed chemically since

conversion from native forest. These studies were introduced at RECA's semi-annual

assembly (August 1995) in which all members ordinarily meet to discuss problems they are

having on-farm and issues facing RECA as an organization. A presentation on the basic









Table 3-1. Summary of presentations and discussion groups conducted as part of participatory research process to study nutrient and fine
root dynamics in the RECA agroforestry system (AFS). Number of participants in parentheses. Translated from Portuguese.
Date Topic and Objectives Participants Methodologies Outputs


8/19/95 Nutrient budget proposal
-Discuss nutrient cycling
-Present proposed study
-Solicit feedback & volunteers

9/16/95 Root study proposal
-Discuss root competition
-Present proposed study
-Solicit feedback & volunteers

2/24/96 Root study update
-Update farmers on progress
-Discuss hypotheses
-Discuss participants' field observations


8/23/96 Root & soil study update
-Present preliminary data
-Discuss possible interpretations of
preliminary results


-RECA leaders
-Members
attending SOS
course ( 35)

-RECA members
attending semi-
annual assembly
(70+)

RECA members
attending semi-
annual assembly
(60+)


RECA members
attending semi-
annual assembly
(60+)


-Flip chart drawing of
AFS nutrient cycle
-List of study objectives
-Bank analogy

-Flip chart drawings of
root competition
-Ingrowth core used
-Group discussion

-Demonstration of actual
samples (ingrowth cores
with roots)
-Group discussion


-Simple bar graphs on
flip chart paper
-Sample soil analysis
sheet on flip chart paper


-Introduced concepts
of nutrient cycling
-Farmers' criteria
-Volunteer study sites

-Group discussion of
root competition,
-Farmers' criteria
-Volunteer study sites,

-Increased
understanding of root
study by farmers,
demonstrated by
questions
-Updated and received
feedback from farmers
on root study results









Table 3-1--continued.


Date Topic and Objectives


Participants


Methodologies


9/18/96 AFS nutrient cycling
-Present preliminary data on P&N
harvest removal, soil & plant stocks
-Discuss current management
-Discuss strategies to minimize soil
degradation & enhance nutrient cycling
-Generate list of management options
9/20/96 Nutrient cycling in RECA AFS
-Present methods & preliminary results
to local research institution
-Solicit feedback on results
-Encourage future research
collaborations with RECA

9/22/96 AFS Nutrient Cycling (SOS course)
and -Present nutrient cycling & removal
9/27/96 with harvest using preliminary data
-Discuss current land management &
effect on nutrient cycles & soil fertility
-Determine viable management options
to maintain productivity


11/4/96 Nutrient cycling in RECA AFS
-Present methods & preliminary results
to PESACRE & other local NGO's
-Discuss implications for AFS
management and productivity


RECA
reforestation team
(Equipe de
plantagAo, 17)




EMBRAPA
Rio Branco
(50)




Farmers in RECA
producers'
groups:
attending SOS
Environmental
Education course
(25 each session)
PESACRE
UFAC students
EMATER agents


-Colored drawings on
flipcharts of AFS with
approximate nutrient
stocks in soil, biomass
and harvest
-Flip chart list


-Slides of methodology
-Overhead transparencies
with results




-Game: Banco do Brasil
(felt board and cut outs)
-Enlarged photo series
(forest, burn, planting,
mature AFS)
-Small group discussions
-Flip chart lists


-Reintroduce nutrient
cycling in RECA AFS
-Farmers list practices
affecting nutrient cycle
-Listed options for
reducing soil
degradation

-Greater awareness by
research institutions of
the potential for on-
farm research with
RECA


-Farmers discuss
nutrient cycling in
diverse land-uses
-Small groups generate
list of management
options


-Slides & transparencies
with methods & results
-Banco do Brasil game
-List of farmer options
for AFS management


OutDuts


Outputs











35

concepts of root competition generated an animated discussion among farmers who had

observed the "aggressive roots" of peach palm in their own plantations, and were concerned

that it might eventually dominate, or even "kill" other components of the system. Farmers

were also interested in having their soil analyzed, as long as they also received the results.

After discussing criteria for farm site selection and participation in the study, the producers

themselves selected eight farm sites from among those volunteered by individuals.

Implementation of field studies. Once the field studies were underway, farmers were

updated on the progress of the research during the next two official assembly meetings (Table

3-1). These brief presentations simply served to keep RECA members not directly

participating in the field studies informed on the status of the research and foster interest in

the investigative process. Attending the two to three day meetings also allowed me to

become better acquained with RECA farmers and learn a great deal more about the

organization, and the challenging issues facing it and individual households. During this

period, however, most of the contact I had with farmers occurred through conversations with

household members held during my extended stays with families participating in the field

studies (discussed below).

Preliminary data generated from the concluded root and soil field studies, as well as

the ongoing P and N budget research, provided the basis for the nutrient cycling presentations

and discussion groups held in September and November, 1996. As indicated in Table 3-1,

a variety of techniques and tools were used to present the data and stimulate discussion. An

example is shown here for the nutrient cycling modules of the SOS Ecology courses (Table

3-2). These two sessions, along with an earlier session with RECA's reforestation team,











36
culminated with a list of management options for maintaining soil fertility generated by

participants.

Alternative (non-lecture) training techniques, such as games and small group

discussions, were employed to create a non-threatening and engaging environment, especially

as education levels varied considerably among RECA farmers. The basic objective of the

Banco do Brasil (official state bank) game used during the SOS courses was to demonstrate

how nutrients were transferred from different "accounts" in the agroforestry system, or

removed entirely with harvest. For example, when the cut-out of a peach palm crown was

added to the system depicted on the felt board, six Brazilian dollars (reais) were moved from

the soil account in the bank to the plant biomass account (the monetary value being based on

preliminary data, e.g., one Brazilian dollar equals one kg P/ha). When peach palm fruit was

added to the tree, its value was moved from the soil to the plant biomass account. When the

fruit was harvested, this amount was withdrawn from the bank. After a demonstration,

participants were asked in which account to place nutrients (or remove nutrients from) as

each component was added to or moved around in the agroforestry system. The felt board

and bank were also used to demonstrate changes in N cycling dynamics when understory

weeds were cut down and left to decompose, or when leguminous shrubs were included in

the system to add nitrogen through fixation of atmospheric N2. During both sessions, the

game encouraged a discussion about the importance of organic matter as a source of plant

nutrients, and management practices that favor organic matter build-up in the agroforestry

system.












Table 3-2. Lesson plan for participatory research activities, nutrient cycling module for SOS
environmental education course given to RECA farmers on September 22 and 27, 1996.
Total session time: 3 hours. Translated from Portuguese.
Session Objectives
1 Demonstrate the concept of nutrient cycling and its role in maintaining agro-
ecosystem productivity to RECA producers using data from RECA
agroforestry system
2 Identify and discuss current land management practices of RECA farmers that
potentially benefit or degrade nutrient cycling processes
3 Develop a list of practical land management options that may help maintain soil
fertility and future agroforestry system productivity


Time Method


Materials


20 min Interactive lecture (emphasis on
questions to farmers) to define
concepts of nutrient cycling
40 min Game: Banco do Brasil (uses
bank analogy to describe
nutrient inputs, outputs &
transfers)


15 min Break


40 min Group Discussion: Impact of
Agricultural Practices on
Nutrient Cycling


20 min Small Groups: discuss AFS
management & adaptations to
enhance nutrient cycling
30 min Group summary & evaluation
of proposed practices & effects
on nutrient cycling & AFS
productivity


-Flip chart with questions and room to list
answers (what is a nutrient cycle, why
important to land managers?, etc.)

-2 lxI m pieces of felt
cardboard cut-outs of AFS components
(trunks, leaves, fruit, roots, soil, legumes)
-Paper cut-out of bank with 3 accounts
(soil, fallen litter, live biomass in plants)
-Felt cut-outs of money (different values)
-Chart with "monetary (kg/ha) values for
AFS components based upon data


-Series of enlarged color (Xerox) photo
depicting a) native forest, b) cleared &
burned land, c) newly planted seedlings on
recently burned land d) pupunha
monoculture
-5 groups, each given one photo to
stimulate discussion and flip chart & pen
to list possible adaptations
-Flip chart table to be filled out as by
entire group with four columns:
Management practice; Objective; Benefit
or degrade nutrient cycle; Why?











38

Another important objective of the participatory process was to familiarize local

research and extension organizations with the on-farm studies underway in Nova California,

and facilitate future investigative collaborations with RECA farmers. For this reason,

research methodology, as well as preliminary study results, were presented to PESACRE and

EMBRAPA in Rio Branco (Table 3-1), as well as to the Soils Department at the University

of Vigosa in the south central Brazilian state of Minas Gerais. Included in the results

presented to these groups were the flip chart lists of management options generated by RECA

farmers.

Household Interviews

Root ingrowth and soil studies. Informal interviews, or conversations, were held with

both men and women of the eight families participating in the root ingrowth and soil studies

regarding the role ofagroforestry in a household's production strategy. Current agroforest

management practices, as well as constraints to and opportunities for modifying management

were also discussed. These conversations took place during three two-day visits with each

family. Previous visits to these farms prior to initiating the study had fostered a good working

relationship with each family. The actual installation of the root ingrowth study on each farm

required about a day with the help of family members. To encourage a "learning"

environment, the study objectives were reviewed and participants were asked to make

predictions about the results based upon their previous experience with the agroforestry

system.

The root ingrowth core bioassay methodology is relatively straightforward (Chapter

4), andparticipants appeared to understand it conceptually, as demonstrated by their questions











39
and predictions. Conversations with other family members occurred during meals, farm

walks, and other "leisure periods". Observation of farm and household activities provided

additional insight into agroforest and overall farm management. The families were visited a

second time when ingrowth cores were removed from the soil, and the results from soil

analyses were returned to each family on the third visit. The latter visit was used to discuss

soil fertility and agroforest management. The soil analysis "sheet" (Table 3-3) was modeled

somewhat after the form given to farmers by EMBRAPA. Although the language used was

rather technical, the sheet was quite useful in initiating discussions about soil acidity,

nutrients, and the potential use of leguminous cover crops, fertilizer and organic residues to

improve soil quality.

P and N budget study. Frequent (often daily) contact with the families participating

in the nutrient budget study provided an opportunity for in-depth conversations regarding

constraints to agroforest management and production, as well as continual observation of

farm and household activities. While the nutrient cycling study was installed on only one site,

the farm site itself was owned by one family who hired another family to live on the property

and manage it, and a close relationship with both households provided considerable insight

into differing perceptions of agroforest productivity and sustainability. Because it was

impossible for me to be present every time fruit or palm heart was harvested from the system,

family members recorded the weight of fruit removed from the study plots, and collected

rainfall samples immediately after storms.







Table 3-3. Sample soil analysis sheet given to farmers participating in root ingrowth bioassay and studies
after completion of analysis collected from their farms. Analyses performed included pH, % organic
matter, extractable cations and P, and total N and P. Translated from Portuguese.
University of Florida The RECA Project
Soil Analyses 0-20 cm depth (November 1995)
Property of Sr. Aluizio e Sra. Carmelita Gongalves, Group BR

Your soil mean Your soil mean
agroforest native forest
pH 4.9 4.9 4.4 4.3

Organic matter (%) 1.4 2.0 1.7 2.0

Ca 189 350 31 102

Mg 41 61 35 42
K 26 35 26 36
A] 179 267 196 310
Fe 39 32 32 49
Na 3.5 4.7 2.2 3.0
P 1.4 1.1 1.6 1.5
P total 383 410 352 360

N total 1,217 1,690 943 1,599
mg/kg = ppm












Return of Final Results

As mentioned earlier, the final step of returning the final results to RECA and

PESACRE is awaiting completion. That it will have taken two years from the time I left Acre

to return the results is not entirely satisfactory, and this may represent one drawback of

participatory research, at least at the doctoral level. The lag time between process and

product underscores, once again, the need to make the process count. Currently, I am

planning, in collaboration with PESACRE and RECA, a course to be conducted in Acre in

on "Nutrient Cycling and Agroecosystem Sustainability". One of the objectives of this course

will be to present the final research results to RECA, as well as review and evaluate the

research process. Included in the final results will be the lists of management options

generated by the participants themselves, as well as actual data and interpretation of the field

studies. Hopefully this will provide a forum in which to discuss which practices are actually

applied in the field and by whom. Field visits would help identify how both management

practices and the agroforestry system itself have evolved since the research was conducted.

The final research results will be discussed in relation to past and present agroforest

management. Management options recognized by farmers as immediately feasible will be

reviewed. Because of their importance to sustained production (Chapters 4-6), practices that

may require more resources and training, such as widespread planting and regular pruning of

leguminous cover crops, and seasonal directed application of soil amendments, will also be

discussed. A review of the research process will provide an opportunity to discuss basic

research methods and their application by farmers as outlined earlier in this chapter.











42
We will present data generated from the field research in an extension pamphlet that

will be translated into Portuguese and disseminated by PESACRE. The focus of the

extension brochure will be how nutrient cycles of tree-based agroecosystems can be managed

to maximize their potential for sustained productivity. In addition to offering information and

management recommendations to farmers, the pamphlet may also provide a framework for

NGO's, such as PESACRE and SOS Amazonia, to use when conducting environmental

education courses for other rural producers' groups in Acre. PESACRE has also indicated

that additional collaborative efforts to develop an environmental education program could

provide an important last step in the participatory process.

The Participatory Process: Lessons Learned

The Benefits of Participation

Undoubtedly, the research benefitted directly from the participatory process. The

open discussions held with families and focus groups, engendered, in part, by the trust built

as a result of encouraging genuine multi-lateral exchange, revealed a lot of information that

that might not have otherwise been apparent to outside researchers. The role of perennial

crops in colonist households was clarified, and constraints to and opportunities for improving

agroforest management were identified. Extremely important to this process was the fact

that RECA was well organized and held regular meetings in which my participatory activities

could be integrated. As a result, RECA farmers remained aware of and interested in the

investigative process and the results it would potentially render, as demonstrated by their

thoughtful questions, observations, recommendations and continued willingness to participate

throughout the field research period.











43
The management recommendation lists generated by different discussion groups

(discussed below) represent the most tangible output of the process itself. The process might

have been much more limited had I not had a formal venue in which to conduct the

presentations. The real test of the participatory process lies in the extent to which

management recommendations generated by farmers are actually applied, both now and in the

future. Hopefully, the official fora provided by organized group discussions helped stimulate

on-going dialogue among RECA farmers and other research and extension institutions about

sustained production, ecological processes, such as nutrient cycling, and farmer management.

Further evidence to suggest that farmers benefitted from the process was the fact that

several individuals approached me to help them design their own on-farm research.

Experimentation among RECA farmers is nothing new. For example, many farmers had

already conducted "informal" on-farm research with different legumes species, and I

encouraged these producers to share their results with other families, as well as with

EMBRAPA in Rio Branco, whose researchers were in the process of initiating "new" studies

of legumes in agroforest understories on farms surrounding Nova Calif6rnia.

Although it is important that producers believe in the validity of their own research,

such farmer-initiated research could also benefit from training by professional researchers.

For this reason, a short course designed for farmers on "basic field research methods",

conducted in collaboration with organizations such as PESACRE and EMBRAPA, may be

an extremely effective way to improve agroecosystem management. Such a course would

provide an opportunity to discuss (a) the valuable experience farmers have gained through

experimentation on their own, as well as the strategies they employ, (b) differences farmers











44
may have noted between their research and that conducted by trained scientists, and (c) the

pros and cons to different investigative approaches. We could also discuss why controls and

replication are used in scientific research, and how they might use these "tools" to enhance

their own experimentation, if they are not already doing so. Grassroots developmental

organizations, such as World Neighbors, have successfully taught indigenous rural people to

use mathematics and statistical analyses in the design and interpretation of on-farm research

(Ruddell and Beingolea 1995). How the results of on-farm research can be shared (both

formally and informally) with fellow farmers, researchers, and extensionists would also be a

useful topic for discussion. Such a course could be included in an environmental education

program for rural producers conducted by NGO's such as PESACRE.

The Challenges of Participation

There is a lot to be learned from attempting to combine community participation and

doctoral field research. Although definitely rewarding, it added responsibilities, as well as

risks, to the research process. Initially I was determined to present "scientific" research to

farmers as simply as a series of steps, much like planting and harvesting a crop. In the end,

there were many "steps" that I found difficult to explain to participants, or for which it was

difficult to create a situation that allowed participants to arrive at a better understanding of

the process on their own. For example, while I believed the root ingrowth bioassay would

provide a relatively easy-to-understand, yet scientifically-sound, means to assess root

competition among species and phosphorus deficiencies to plant growth in the field, the

method presented a few problems. For one thing, root growth in natural conditions is

tremendously variable, and although the study was designed to accommodate variability










45

across farms, it appeared that farmers made up their mind about study results based upon

what they observed in their own field, and from conversations with other farmers. For

example, when farmers saw more peach palm roots protruding from unwashed, unseparated

ingrowth cores, they concluded that peach palm was, as they predicted, an aggressive

competitor. At this point it was difficult, and even questionable, to encourage participants

to withhold judgement on the preliminary results until a log transformation and analysis of

variance had been performed on the total length of roots found in cores (Chapter 4). This is

part of the process they did not participate in, and all that could be done was encourage

discussion among participants about what they were seeing as we removed the ingrowth cores

from the soil. Potentially, this presents a dilemma, because it is the researcher's responsibility

that study results are not erroneously interpreted, but one cannot resort to the approach:

"take my word for it, this is the way it is" if one is to maintain a participatory process. In this

case, peach palm root growth was greater than that ofcupuassu in cores buried in agroforest

alleys, supporting the farmers' hypothesis. However, in cores bured in agroforest rows,

beneath the dripline of the cupuassu canopy, there was no statistically significant difference

in root growth between the two tree species. Moreover, when it came to assessing

phosphorus limitations using the ingrowth cores, the data were not easily interpreted, even

after statistical analyses were performed, and the results pointed out some methodological

weaknesses of the root ingrowth bioassay (Chapter 4). Similar situations are not uncommon

in many fields of research; thus, it is an issue that must be addressed both prior to research

initiation and throughout the entire participatory process. Perhaps it was more problematic

in this study because of the type of agroecological research conducted, which concentrated











46
on biological processes, and not technology creation or evaluation. For example, in many

"on-farm trials", farmers may test fertilizer applications, genetic varieties (e.g. Hildebrand and

Poey 1985) or even planting locations (Kainer et al. 1998). From these types of studies,

farmers can "pick" the technology which performs the best under the specific environmental

and socio-economic conditions they face. In the present study, there was no technology

tested, rather, farmers were asked to evaluate their own practices in relation to its effect on

a process, so it was important that they understand the process. A frank discussion at the

outset about the scientific method, and and how it is met through the research objectives, may

facilitate a better understanding among participants about the limits of particular studies in

addressing specific questions.

This also points out the need for careful selection and execution of research methods;

however this is not always possible in more remote resource-limited areas, and could

therefore preclude research in regions that need it the most. Rocheleau (1991) notes that we

can improve our capabilities for participatory research if we "abandon fixed packages of

research methodology and broaden our horizons to include a wide variety of principles,

methods and other peoples' field experience". Such an approach does not necessarily allow

for controlled conditions, nor the use of tools that produce predictable outcomes. This

demonstrates the delicate balance between remaining faithful to the scientific method and

open to new constructs of knowledge creation.

Finally, participatory research takes a lot of energy and concentration to ensure that

the process is continually beneficial, and not exploitative, for all parties involved. I had to

be on guard constantly so as not to let my personal research anxieties prevent me from











47
hearing what the farmers had to say. I remember one day in particular when I was appalled

to realize that I had been so concerned with the difficult logistics involved with field work that

I had not concentrated enough on my interaction with the farmers. One must continually ask

oneself "are participants really gaining from the process, or just supplying labor, land or

lunch?".

Information Gained Using a Participatory Approach

The Role of Agroforests in RECA Households

From interviews with only 10 out of 300 RECA households, it is not possible to

generalize about the role of agroforestry in RECA farms. The households interviewed had

very diverse cultural and socio-economic backgrounds, and their reasons for adopting and

maintaining agroforestry as part of their production strategy also differed. However, three

common themes emerged from these interviews about the role of the cupuassu-peach palm-

Brazil nut agroforestry system in household production strategies. In general, an increase

in farm household income from the sale of agroforest products

a. allowed poor farmers, who might otherwise have abandoned their land or sold it to

ranchers, to continue farming profitably on the same land,

b. provided farm families with the means to purchase (i) household durable goods (such

as furniture, diesel generators and satellite dishes), (ii) labor to help with farm

activities, and (iii) livestock, especially cattle,

c. motivated farmers to open new areas of forest each year for perennial crop

monocultures (such as coffee and palm heart), because they anticipated a future drop











48
in agroforest productivity and/or change in the marketability of crops such as

cupuassu fruit.

These points serve as hypotheses to be tested with rigorous surveys. They also offer

some insight into the role of agroforestry system adoption in decreasing farm-level forest

clearing. Although several families claimed that agroforestry system adoption allowed them

to clear less native forest because they were no longer obliged to produce annual crops for

sale, the third point suggests that many RECA farmers are practicing a "shifting cultivation"

of perennial crops, that is, continual clearance of forestland for the establishment of perennial

crops in anticipation that the older systems will lose productivity in the near future. In fact,

when questioned about the period of time they anticipated the first cupuassu-peach palm-

Brazil nut systems to remain productive, most believed that cupuassu production would cease

within eight to ten years of planting, and many households had already established younger

monocultural plantations to avoid root competition. This same attitude was demonstrated by

the recommendations made by discussion group participants from the RECA reforestation

team to "intensify production of one species by planting monocultures" (Table 3-4).

This transitory approach to perennial cropping reveals farmers' anxieties about soil

fertility, and perhaps a basic disbelief in the potential for sustained production by tree-based

agroecosystems. Coffee was cultivated in a similar manner from the 1800s to mid 1900s in

regions of southeastern Brazil previously covered by the Atlantic forest (Laakkonen 1996).

In states such as Minas Gerais, monocultural plantations of coffee were planted on slopes

cleared of native forest vegetation. Without soil amendments, the plantations were

productive for an average of seven years before they were abandoned, during which time











49
additional forest was cleared for new coffee plantations that would come into production

about the time the others failed (Dean 1995). One RECA farmer frankly admitted that it was

a shortage of labor, and not the potential longevity of perennial crops, that kept him from

clearing additional forest.

Constraints to Agroforest Management

Labor was cited by all households as one of the largest constraints to modifying

existing agroforest management practices. For example, the labor burden incurred when

cutting climbing legume (Macuna spp.) vines from the canopies of cupuassu trees was

mentioned as a reason for eliminating the thriving N-fixing species from the system. Nearly

every farmer had experimented with other "shrub" forms of legumes (e.g. Pueraria spp);

however, in most plantations, they were left to grow, unpruned, in the understory throughout

the season because it required a lot of work to cut them down. During the dry season the

dead legumes were viewed as a fire hazard and for this reason many farmers eradicated the

shrubs. Interestingly, some families found it lucrative to harvest the seeds of some legumes

and sell them to buyers interested in establishing leguminous cover crops. However, by the

time the field studies took place, legumes had been eliminated from many agroforest

plantations because replanting the legumes every year was not feasible for families.

Unfortunately, the legume species most successful at reestablishment through natural

reseeding wasMacuna, a species viewed by farmers as most impractical from a management

standpoint. Furthermore, other legumes did not compete well with the native understory

herbaceous vegetation, which often exceeded 2 meters in height before it was cut down and

left to decompose. Families understood that the "weeds" in the agroforest understory











50
competed for nutrients and water with the system's tree components, but generally

households had only enough labor to cut down the herbaceous understory once or twice a

year, at best. Other labor-intensive farm production-related activities included annual crop

production (for household consumption); seed germination and seedling propagation in on-

farm nurseries; establishment of new perennial systems that included crops such as pineapples,

coffee and native timber trees; vegetable gardening; small and large livestock care, including

pasture creation and maintenance; well maintenance and water transport; processing and

transport of harvested products, medicinal plant propagation and collection; and forest

extraction (medicinal herbs and clay, Brazil nuts, game, fruits, seeds and seedlings for

planting, etc).

Another constraint to agroforest management was a lack of access to chemical and

organic fertilizers, and technical information about their use. Because little station research

had been done in the region on fertilizer use in alternative cropping systems (i.e. non-annual

crops), even extension agents had little idea about the most effective and efficient use of the

prohibitively-expensive soil amendments available, such as triple superphosphate and lime.

Organic fertilizers, such as cow manure, were often applied to home gardens in which

vegetables for household consumption were grown, or applied to enrich the soil used for

seedling germination and propagation. Plant residues were fed to small livestock, or were

viewed as too burdensome to transport material from the point of origin to the agroforest.

Most families, however, did leave peach palm residue (leaves and stem) originating from the

harvest of small basal offshoots for heart-of-palm in the agroforest. Operationally, these

residues were not strategically placed, but left to decompose where they fell. As mentioned











51
earlier, while leguminous cover crops were not pruned for maximum residue production, they

were initially left to decompose when they died during the dry season, and some families

found the residues to be a good livestock food supplement.

Finally, as discussed in Chapter Two, reliable transport, on- and off-farm processing,

and marketing of agroforest products were cited as some of the largest obstacles facing

households and the RECA organization. Particularly disturbing was the fact that large

harvests of peach palm fruit frequently spoiled while awaiting transport from farm to market.

High processing costs ofcupuassu pulp, due to Nova Calif6rnia's unreliable electricity supply,

raised the cost of marketing this product, and thus lowered the price farmers received from

the RECA organization. Financial losses such as these made farmers reluctant to invest

precious resources in more intensive agroforest management practices, regardless of the

system's potential for sustained production.

Management Options Generated by Farmers

Reforestation team. A very detailed list of agroforest management options was

generated by members of RECA's reforestation team (Table 3-4), who were "tecnicos" or

farmers trained technically to help other farmers. Most of the recommendations on this table

are presented as stated by farmers (translated from Portuguese), although there are a few

(identified by italics) that I suggested myself From previous farm visits it was apparent that

many households had previously employed, or were currently practicing, some of the options

listed, especially under the "leguminous cover crops" and "organic matter" categories.

Moreover, these practices had been discussed repeatedly in sessions led by myself, SOS

educators, and extension agents, and the lists demonstrated that producers were aware of











52
these practices. However, comments made by individuals during the session, as well as farm

visits and household interviews also revealed that many of the recommendations listed were

not necessarily being implemented. To a great extent this may have been due to the labor

constraints already discussed. For example, many farmers did not have the labor resources

to cut down/cultivate legumes and weeds to maximize understory nutrient cycling and

minimize competition, or to ferment cupuassu pods and other plant residues for compost.

However, at the end of the discussion session, participants did agree that most of the options

listed were desirable in order for their system to sustain productivity for a longer period of

time. Labor, time and monetary constraints made it difficult for farmers to adopt some

practices (indicated by the letter c or d in Table 3-4), despite their beneficial role in maintain

productivity. Some options, such as the use of lime and phosphate rocks, were not viewed

as feasible, because of their expense and inavailability.

Another recommendation viewed as impractical was felling the larger (> 8 m in height)

peach palm offshoots, and cutting up the stems and leaves for use as mulch beneath the

cupuassu and Brazil nut trees. I suggested this in response to comments made by producers

about the fact that during agroforest establishment most farmers had allowed the

offshoots to grow very tall (up to 16 m), not realizing that fruit and heart harvest from these

stems would become difficult, if not impossible. Although felling some of the larger

offshoots would theoretically (a) liberate and "recycle" nutrients stored in "underutilized"






Table 3-4. Management recommendations for maintaining agroforest soil fertility and decreasing root competition among agroforest
components generated by members of the RECA reforestation team during a participatory session entitled: Nutrient Removal from
Agroforestry Systems (held on September 19, 1996). Translated from Portuguese, italics indicate recommendations suggested by researcher.
Goal of Management Practice
Maintaining Soil Fertility Reducing Root Competition


Leguminous cover crops in agroforest understory
-Plant legumes (with bacteria) to promote N2-fixation ab
-Plant legumes in fallow fields b
-Plant legumes without burning fallow vegetation
-Cut down/cultivate legumes to recycle organic matter 0,b
-Cut down/cultivate weeds to recycle organic matter'
Organic matter in agroforestrv system
-Maintain an efficient nutrient cycle with green cover
crops and tree crops b
-Diversify plantations with legumes, native
timber tree species, shrubs, coffee, medicinal &
other native herbaceous plants 'b
-Bring/incorporate organic matter from forest'
(branches & leaves, etc.) into agroforestry system
-Apply cow manure to agroforest soil'
-Apply plant residues, especially palm heart harvest'
-Compost plant residues'
-Ferment cupuassu pods at factory for compost
-Maintain organic matter layer with weeds & legumes ab


Reduce peach palm offshoots (maintain only three),'
-Roots die with elimination of stems?
-Transfer nutrients stored in biomass to soil
-Increase harvest of peach palm heart
-Use residues from cut peach palm offshoots as green
manure beneath cupuassui and Brazil nut
Intensify production of one species by planting monocultures
-Plant peach palm for heart production in monocultures'
-Eliminate peach palm in future mixed cropping systems"'b
-Larger spacing between trees in future plantings
-Plant monocultural plantations of cupuassu (discussed
potential problems of disease and pests)"


Inorganic inputs Apply residues from palm heart harvest beneath cupuassu'
-Phosphate rocks in organic matter layer' -Transfer nutrients stored in peach palm to soil beneath
-Apply lime to add calcium and lower soil acidity4 cupuassu
-Directed and sparing application of chemical fertilizerd -Orient root growth toward decomposing organic matter?
'practiced operationally by many farmers; practiced experimentally by a few farmers; "rarely practiced, dnot practiced






Table 3-5. Management recommendations for maintaining agroforestry system (AFS) soil fertility generated RECA farmers attending
nutrient cvcling module of SOS Ecolovgy class (held on Seotember 27. 1996) during small uroup exercise. Translated from Portuuese.


Management Recommendations
Group one Group two Group three Group four
-Directed application of cow -Manage AFS adequately to -Organic soil amendments' -Leave wood residues to
manure maintain efficient cycling of decompose on soil'
nutrients
-Green (leguminous) cover -Increase the AFS diversity by -Leguminous cover crops ",b -Maintain "dead" cover with
crop ofMacuna spp.5 b planting native timber tree palm residues to enrich soil'
species'
-Fertilization with legumes in -Fertilization with organic -Native timber tree species' -Plant native timber tree
most practical manner' matter' species to add organic matter'
-Reduce root competition by -Nutrient export (?) -Control nutrient removald -Plant legumes to furnish
eliminating weeds and older nitrogen *b
peach palm stems'
-Leave organic matter when -Reduce competition by' -Apply animal manure to"
harvesting fruits to minimize controlling understory weeds improve plant production
impoverishment of soil'


'practiced operationally by many farmers; practiced experimentally by a few farmers; 'rarely practiced, dnot practiced











55
above-ground biomass, and (b) potentially decrease intraspecific competition by decreasing

peach palm overstory biomass, participants concluded that the practice would be both labor

intensive and dangerous to farmers, possibly damaging to agroforest components (if other trees

were struck by fallen palm stems), and would not result in higher palm heart yields since the

larger stems no longer produced "tender" apical buds. Participants did agree that an effort

should be made to maintain only three stems per palm in younger plantations; two young

offshoots for heart harvest, and the larger "mother" stem for fruit production. They also

concluded that it would be feasible to place as mulch the residues of young palm offshoots

harvested for heart beneath cupuassu and Brazil nut canopies.

RECA farmers. Despite the fact that the producers comprising the reforestation team

had access to greater technical training, the management option lists generated by "untrained"

RECA farmers in small groups during the SOS nutrient cycling module were very similar to

those listed by the "tecnicos" (Table 3-5). Moreover, recommendations were similar among

the four groups, i.e., use of leguminous cover crops and organic residues, agroforest

diversification with native timber species, and cow manure application. The strength in these

lists is that they were made by the producers themselves, organized in small groups, so that

their independent responses indicate that these practices were commonly recognized by

farmers as beneficial to sustaining agroecosystem productivity. The "agroforest

diversification" option also demonstrated the producers' knowledge of improved organic

matter and nutrient cycling in structurally diverse tree-based systems, and their role in

maintaining soil fertility.











56
Compared to the "tecnico" group, however, it was more difficult to elicit from these

producers which practices were truly feasible and which were impractical. When the small

groups were reunited to "report out" their lists, we discussed management options in greater

depth; for example, how legumes could be pruned to provide mulch and decrease competition.

In retrospect, it might have been very useful to introduce the "tecnico's" management options

list to see if this group would comment on the feasibility of the recommendations made by the

reforestation team. Furthermore, the "untrained" producers may have been less hesitant to

comment on the practical application of the management options they had cited had they seen

the similarity between their lists and that made by the "tecnicos".

Most participants were aware of management options that could help sustain

agroforest productivity in the future. Yet field visits, interviews, and comments made by

participants during the focused discussion, indicated that, for whatever reason, they were not

currently practicing some of these techniques (i.e., application of manure and plant residues).

These findings suggests that a lack of resources (time, labor, money), rather than a lack of

"understanding," may have prohibited households from employing more sustainable agroforest

management practices.

Conclusions

It has been assumed that offering economically and ecologically viable land

management strategies to Amazonian farmers is crucial to decreasing tropical deforestation.

Amazonian farmers are rapidly adopting perennial-crop based agroforestry systems as an

alternative to shifting cultivation. This land-use may offer a greater degree of ecological

stability if the biological processes that control sustained productivity in tree-based ecosystems










57
are maintained and/or enhanced through management practices. Encouraging farmer

participation in agroecological research allowed us to gain a better understanding of the

constraints to more intensive agroforest management faced by rural Amazonian households.

Farmer input through focus group discussions also revealed the existing opportunities for

modifying agroforest management to increase its potential for sustained production. As such,

the most valuable output of the participatory process for RECA farmers may be the list of

management options they themselves generated. These lists were very instrumental in

formulating management recommendations that address biological constraints to optimal

agroforest nutrient cycling identified by this research (Chapter 7). Although not an "ideal" list

of management practices, working within the framework provided by the farmer-generated

lists does offer the most promising approach to maximizing the agroforests' potential for

sustained production, given the constraints faced by rural Amazonian households. Stimulating

household and community-level discussions about the role of nutrient dynamics in sustained

agroecosystem production may also encourage farmers to continue experimenting on their own

to develop innovative practices that enhance agroforest productivity and minimize soil

degradation. Finally, the information gained by encouraging local participation underscores

the fact that the longevity of this system as a viable alternative to other Amazonian land-uses

depends on the extent to which it improves the livelihoods of rural households as much as its

potential for ecological sustainability.
















CHAPTER 4
PHOSPHORUS AVAILABILITY AND FINE ROOT PROLIFERATION IN
AMAZONIAN AGROFORESTS SIX YEARS FOLLOWING FOREST CONVERSION


Introduction

Since the late 1970's, the rate of deforestation in the Brazilian Amazon is among the

highest in the world, raising concern because of its potentially negative consequences for

global climate, hydrology, biogeochemical cycles and biodiversity (Skole and Tucker 1993).

While a great share of the destruction is attributed to large-scale cattle ranching, nearly one

third of forest clearing is undertaken by the region's growing population of small farmers,

primarily for the shifting cultivation of annual crops (Fearnside 1993, Skole et al. 1994,

Serrio et al. 1996). As one of many strategies to decrease deforestation rates, it has been

proposed that adding perennial crops to agricultural systems may raise land productivity, and

subsequently allow small farmers to meet food demands with less forest clearing (Sanchez et

al. 1982, Anderson 1990, Smith 1990). Increasingly over the past decade, as the practice of

shifting cultivation has proven economically unviable in the region's nutrient-poor soils,

Amazonian farmers have begun adopting perennial crop-based agroforestry systems, largely

because many agroforest products are high value cash crops that often require less labor to

produce (Smith et al. 1997). Some studies point out that these agroforests can be more

ecologically sustainable than annual cropping systems because the longevity of tree-based

ecosystems promotes a more closed cycling of organic matter and nutrients, a key factor for











59
the growth of native forests in weathered Amazonian soils (Sanchez et al. 1982, Ewel 1986).

Despite more efficient nutrient cycling offered by tree-based agroecosystems,

maintaining phosphorous (P) availability to plants growing in tropical Ultisols and Oxisols is

problematic for a number of reasons. While nitrogen fixation and rainfall deposition may

serve as significant external sources of N, there is no comparable atmospheric input that can

dramatically increase P availability in P-deficient habitats (Schlesinger 1995). Thus, the

amount of P cycling through natural and low input agricultural systems is determined by the

initial state of the various pools comprising the soil P stock (Stevenson 1986). Phosphorus

uptake occurs from the most vulnerable soil pool, free phosphate ions desorbed or dissolved

from the soil solid phase, often referred to as "labile" P (Fardeau 1996). While this "labile"

pool is difficult to actually quantify because it is continually affected by a myriad of biological

and geochemical factors, a number of procedures are used to quantify readily-extractable P,

and the P measured in such extracts is presumed to be correlated with plant uptake. Much

of the total P stock in tropical Oxisols and Ultisols has been precipitated as insoluble Al and

Fe phosphates, or occluded in hydrous oxides of Al and Fe, as a result of intense weathering,

which render it largely unavailable for short-term plant and microbial uptake. Solution

phosphate concentrations are maintained at low levels because any plant available P remaining

in, or added to, the soil system is sorbed by Al and Fe oxides on the surfaces of clay minerals

(van Wambeke 1992, Fontes and Weed 1996). In these conditions, mineralization of organic

P becomes increasingly important to P nutrition (Stewart and Tiessen 1987, Cross and

Schlesinger 1995), as do mycorrhizal associations and Al- and Fe-solubilizing root exudates

that increase P availability to plants (Chapin 1980, Fox et al. 1990, Bolan 1991).











60
Nonetheless, numerous studies provide evidence that tropical forest productivity is P-limited

(Vitousek and Sanford 1986, Attiwill and Adams 1995). Thus, maintaining P availability in

biologically and structurally less diverse agroforestry systems undergoing repeated nutrient

removal with crop harvests is a dilemma certain to face Amazonian land managers. The

problem is further aggravated by the fact that many farmers have limited access to chemical

fertilizers and little experience using the large inputs of organic residues recommended to

maintain soil fertility (e.g., Nicholaides et al. 1985, Szott et al. 1991). Studies of low input

annual cropping have shown that with continued harvest, cation leaching and soil

acidification, P availability may decrease to the extent that organic matter decomposition, N

mineralization, and N-fixation is limited because of soil fauna and bacteria sensitivity to P

deficiency (Ewel 1986, Crews 1993).

Critical to addressing the problem of P maintenance in Amazonian tree-based

agroecosystems is a knowledge of (1) how P dynamics are altered when native terrafirme

forest is converted to agroforest, and (2) how long readily-extractable soil P pools can sustain

agroforest productivity without the use of amendments. These questions are particularly

important if commercial agroforestry systems are to be considered both economically viable

and ecologically sustainable alternatives to other more destructive land uses in Amazonia.

Establishing nutrient limitations to plant productivity often requires fertilization

experiments that test the relationship between nutrient supply and plant growth and

development (Marschner 1995). Cuevas and Medina (1988) used root proliferation in

nutrient enriched-ingrowth cores as a bioassay to infer nutrient limitations to fine root growth

in Amazonian forests. Raich et al. (1994) demonstrated that this method could be used to










61
identify specific nutrient limitations to aboveground forest productivity by comparing root

proliferation response in nutrient-enriched cores to previous forest fertilization studies. It is

generally accepted that many crop plants do proliferate in nutrient-rich patches, but studies

have shown that nutrient-deficient plants exhibit a greater proliferation response than nutrient-

sufficient plants (Caldwell 1994). For example, Ostertag (1998) found that root growth of

tropical forest trees established in P-poor soils was greater in response to P fertilization than

the same forest types growing in less P-limited soils. In P-deficient habitats, roots and

associated mycorrhizae must grow to P sources as phosphate concentrations become depleted

around the rhizosphere because P diffusion through the soil solution is slow (Nye and Tinker

1977). Thus, root proliferation in response to P microsite enrichment could be an effective

tool for assessing P limitations to ecosystem productivity, as well among species within a

system growing in P-poor Amazonian soils.

The objectives of our study were threefold. First, readily-extractable inorganic and

organic P pools, as well as other chemical properties, were compared between agroforest and

adjacent native forest soils to determine how short-term (< 10 years) P dynamics change when

primary forest is converted to perennial crop-based agroforestry systems. Secondly, P

limitations to productivity in eight six-year-old agroforestry systems were studied using a root

ingrowth bioassay to examine fine root response to phosphate microsite enrichment by

agroforest and native forest plants. Finally, a differential response in root proliferation

among agroforest species was examined as a component of inter-species competition. This

third objective was added at the request of the Brazilian farmers collaborating in this study











62
who were concerned about what they perceived to be aggressive root competition by the

agroforest's palm component.

Methods

The Study Area

The study was conducted on eight farms within a 30 km radius from the town ofNova

California, a rural community which lies on the border of the Brazilian states of Acre and

Rond6nia in the western Amazon Basin (67W, 10 S). The life zone in this region is humid

moist tropical forest (Holdridge 1967) and the native non-flooded terrafirme vegetation

comprises both deciduous and evergreen broadleaftree species. Average air temperature is

22 C and mean annual rainfall over the last 10 years is approximately 2,000 mm with a three-

month dry period occurring from June through August (UFAC unpublished). The region's

topography is slightly undulating and soils are predominately Ultisols and Oxisols (Sombroek

1966, Souza 1991). Soils from the study sites are acidic (pH < 5), with an effective cation

exchange capacity less than 12 cmol+ kg clay', high levels of exchangeable aluminum (>40%

Al saturation), and 40 percent or more clay in the top 20 cm (Table 4-1). These properties

are consistent with Oxisols of the Ustox suborder (van Wambeke 1992). Colonist farmland

holdings in the region are typically 100 hectares, half of which are maintained in primary

forest, as dictated by Brazilian law (IBGE 1990). Land use includes livestock pasture, annual

and perennial crops, homegardens, and forest extraction.









Table 4-1. Soil properties ( one SE) in eight agroforests and adjacent native forests at 0-20 and
20-40 cm depth (n=8).
0-20 cm 20- 40 cm Paired t-test
Soil Property p values"
Agroforest Forest Agroforest Forest by soil depth

Sand(%) 27.6 5.6 24.2 5.2 26.2 5.7 25.3 3.9
Silt(%) 25.92.0 35.35.4 22.92.0 27.74.4 0.139 0-20 cm
Clay(%) 46.2 6.0 40.6 5.4 50.9 5.9 47.0 4.7
pH 4.9 0.2 4.3 0.1 4.7 0.2 4.3 0.1 0.006 0-40 cm
Organic matter (%) 2.0 0.1 2.0 0.2 1.3 0.1 1.3 01
M-l Ca(mgkg-')b 349.9152 102.436 105.1 43 45.5 18 0.035 0-40 cm
M-I Mg(mgkg-') 60.813 42.2 7.2 23.45.4 24.25.0 0.115 0-20 cm
M-I K(mgkg') 35.1 17 36.0+2.8 19.0 1.8 21.22.2
M-l Pi(mgkg') 1.080.11 1.540.22 0.190.22 0.430.11 0.051 0-40cm
Ca (cmol+kg") 1.96 0.50 0.50 0.17 0.009
Mg (cmol+kg') 0.50 0.07 0.32 0.05 0.045
K (cmol+kg-') 0.14 0.02 0.13 0.07
Al (cmol+kg") 1.88 0.53 2.17 0.35
ECEC(cmol+kg-')c 4.42 0.34 3.11 0.27 0.004
A] sat (%) 41.0 10.9 68.2 7.7 0.033










Table 4-1-continued.


0-20 cm


Soil Property


Agroforest


Forest


20- 40 c


Agroforest


;m Paired t-test
p values'
Forest by soil depth


Total C (gkg-) 16.2 1.5 15.3 1.3
Total N (g kg-') 1.69 0.02 1.60 0.13
Total P (g kg-') 0.41 0.06 0.36 0.04
7 P values ; 0.15 not reported.
bMehlich-1 extractable elements.
SEffective cation exchange capacity (sum of base cations + exchangeable Al).


Table 4-2. Readily-extractable inorganic (Pi) and organic (Po) phosphorus ( one SE) in 0-20 and 20-40 cm depth (n=8).
0-20 cm 20- 40 cm Paired t-test
Soil Property P values'
Agroforest Forest Agroforest Forest by soil depth

M-l Pi(mgkg-') 1.080.11 1.540.22 0.19 0.22 0.430.11 0.051 0-40cm

Bray Pi (mg kg-') 2.64 0.29 3.56 0.63 0.86 0.20 1.08 0.23 0.045 0-20 cm

Resin Pi (mg kg-') 1.31 0.10 2.00 0.29 0.07 0.01 0.28 0.12 0.087 0-40 cm

Bicarb Pi (mg kg-') 0.75 0.19 1.32 0.37
Bicarb Po (mg kg-') 6.19 0.71 6.98 0.50 0.139 0-20 cm
' P values 0.15 not reported.










65
The eight farms included in this study were volunteered by members of the producers'

organization, Projeto RECA (Economic Partnership for Reforestation). In the late 1980's the

group established a perennial crop-based commercial plantation agroforestry system, one to

two hectares in size, on more than 200 farms. The system is two-tiered, dominated by an

upper canopy of peach palm (Bactris Gaesipaes Kunth), a multi-stemmed monocot cultivated

for centuries by Amerindians throughout Amaz6nia (Clement 1986). The middle canopy is

formed by cupuassu (Theobroma grandiflorum (Willdenow ex Sprengel) Schumann), a

shade-tolerant broad leaf tree native to non-flooded forests of the central Amazon Basin

(Venturieri 1993). A third component of the system is Brazil nut (Bertholletia excelsa Humb.

& Bonp.), a broad leaf upper canopy dominant, also a native to the region's forests (Mori and

Prance 1990). The agroforest's principal products include cupuassu pulp, peach palm fruit

and seed, and heart-of-palm, all of which are harvested as early as three years after system

establishment. Brazil nuts are also an important cash crop throughout Amaz6nia (Kainer et

al. in press), however, at the time of the study, this species had not yet begun to produce

fruit.

Typically, the agroforest was established by cutting and burning native forest

vegetation and interplanting one-year-old cupuassu, peach palm and Brazil nut seedlings at

a spacing of 7 x 4 meters to complete stocking densities of 190, 150 and 30 trees ha'1,

respectively. During the first year of establishment, leguminous cover crops were planted

in agroforest rows. However, legumes were largely eradicated from the agroforests in the

years following establishment, and native understory herbaceous vegetation was cut down and

left to decompose twice annually. Since agroforest establishment, grazing livestock











66

were excluded from the system, nor were chemical fertilizers applied on the eight farms under

study.

Farmer Participation

The research was carried out using a participatory (Feldstein and Jiggins 1994)

approach that encourages farmer involvement throughout the investigative process. By

involving farmers it was hoped that the results might ultimately be more useful to them. Prior

to initiating the study, the research objectives and overall plan were presented to RECA

producers. As a result of feedback received by the farmers, a third objective was added,

which was to compare root proliferation response to phosphate among agroforest species,

in an attempt to address their concerns about aggressive root competition by the peach palm.

Personal observation and interviews during repeated stays (3 visits each x 2 days) with nine

families, five focus group discussions with RECA farmers (2 30 participants each), and

project reports all provided information about agroforestry system establishment, farm

management practices, and crop harvests. A more detailed description of the participatory

process is provided in Chapter 3.

Plot Establishment

On each farm a 20 x 20 m plot was located in both the agroforest and adjacent native

forest. Adjacent native forest refers to the primary terra firme vegetation that had been

growing contiguous to the forest that was cut and burned to establish the agroforestry system.

As fire often enters standing forest during agricultural site preparation, a 50-m border was

maintained between agroforest and adjacent native forest plots to avoid sampling under











67
previously-burned vegetation. There were no observed topographic differences between

paired forest and agroforest plots on any of the farms.

Soil Sampling and Analyses

One well-mixed composite soil sample consisting of 10 randomly located cores was

taken at two depths (0-20 cm and 20-40 cm) from both the agroforest and adjacent native

forest plots on all eight farms. The samples were air dried, passed through a 2-mm mesh

sieve, and hand-picked free of fine roots prior to chemical analyses.

Mehlich-1I (M-1) cations and P at 0-20 and 20-40 cm soil depth were extracted by

shaking 5 g mineral soil in 20 ml of dilute double acid (0.05 N HCL in 0.025 N H2SO4) for

five minutes. Percent organic matter (OM) was quantified using the Walkley-Black

dichromate procedure (Nelson and Sommers 1982), and pH was measured using a Beckman

pH meter and electrode in a 2:1 water to soil ratio. A particle size analysis was performed

using the pipet method (Kilmer and Alexander 1949).

In the top 20 cm of soil, exchangeable base cations (K", Ca2 and Mg") and aluminum

(Al3") were measured after extracting 10 g soil in 100 ml 1.0 M NH4OAc and 1.0 M KCI,

respectively, for 16 hours. Total P in 200 mg finely ground soil was extracted using a

concentrated H2S04/H202 digest at 360C for two hours. Ion concentrations in the filtered

extracts were measured using inductively coupled argon plasma (ICAP) spectroscopy. Total

soil nitrogen (N) and carbon (C ) were analyzed after Dumas (flash) combustion (Nitrogen

Analyzer 2500; Carlo Erba Strumentazione, Milan, Italy).

In addition to M-1 phosphorus, readily-extractable P was measured using anion

exchange resins to exhaustion, the Bray P1 (Bray and Kurtz 1945), and sodium bicarbonate










68
procedures (Olsen and Dean 1954). Although these four extracts are all used to quantify

readily-extractable P, they solubilize varying quantities of the "labile" pool as a result of

different chemical reactions. The dilute mixed acid in the Mehlich- I extract dissolves Al and

Fe phosphates (Olsen and Sommers 1982) and is used as an index for P availability in Oxisols

throughout Brazil. Anion exchange resins desorb exchangeable Pi without drastic changes

in pH or other soil chemistry. High correlations of resin-extractable P with plant uptake

suggests that resin extracts more closely simulate the physical action of plant roots (McKean

and Warren 1996). The Bray P 1 extract removes easily-acid-soluble Al- and Fe- phosphates

through the formation of fluoride complexes with Al and Fe. The sodium bicarbonate

(bicarb) extract solubilizes a small portion of what is presumed to be readily-mineralizable

organic P (Po), which includes some microbial biomass, in both alkaline and acid soils

(Bowman and Cole 1978, Stevens 1986). Bicarb Pi, used only to calculate Po in this study,

is traditionally used to measure extractable Pi in neutral to alkaline soils (Olsen and Sommers

1982).

For resin-extractable P, 2 g of soil were placed with a 2.5 x 5 cm2-' anion exchange

membrane sorptionn capacity = 272 mg P per membrane) in a 50 ml centrifuge tube filled with

30 ml deionized (DI) H20. The tubes were shaken for 16 hours, after which the membrane

was removed and rinsed with deionized water to remove soil. Phosphorus on the membrane

was desorbed by shaking it in 20 ml 0.5 M NH4OAc for two hours. Using the Bray P1

extract, 1 g soil was shaken for one minute with 7 ml of 1.0 N NH4F and 0.5 N HCL in DI

H20 and filtered. For bicarb-extractable Pi, 10 g soil were shaken in 30 ml 0.5 M NaCO3

(pH 8.5) for 30 minutes. Concentrated HCI (1.5 ml) was added to the filtered and centrifuged










69

extracts to precipitate organic matter. Aliquots of the bicarb Pi extracts were ashed in a

muffle furnace at 560 C and wet-digested with concentrated HCI to extract total P (Ptot).

Bicarb Po was calculated as the difference between bicarb-extracted Ptot and Pi (Olsen and

Sommers 1982). All procedures were conducted in triplicate, and extract P concentrations

were determined colorimetrically using the molybdate blue method (Murphy and Riley 1962)

on a Milton Roy Spectronic 1201 spectrophotometer.

Root Ingrowth Bioassay

A root ingrowth bioassay (Cuevas and Medina 1988) was used to study root

proliferation response to phosphate microsite enrichment. Two hypotheses were tested: (1)

fine root length in phosphate-treated cores would be greater relative to the paired control,

indicating a P limitation to plant productivity, and (2) peach palm fine root length would be

greater than that of cupuassu in both core treatments and agroforest locations, signaling root

competition by the palm that could be detrimental to cupuassu nutrition. Root biomass

between P-treated and control cores was also compared. Root proliferation by Brazil nut was

not studied because the species is a minor component of the system, contributing to less than

8% of the agroforest's trees (30 trees ha').

The ingrowth cores were constructed from high density polyethylene mesh tubes (10

cm tall, 6.5 cm diameter, 4x2 mm mesh size), and filled with 40 g medium-sized vermiculite,

treated with either 100 mL 0.08 M Na2HPO4 (phosphate treatment) or deionized water

(control). The cores were placed individually in 7.5 cm diameter holes dug in the top 15 cm

of soil using a bucket auger, and buried in pairs consisting of both a P-treated and control

core spaced 30 cm apart. Five pairs were buried in each of three locations per farm: (a)











70
between trees in agroforest rows; (b) in agroforest alleys (between tree rows), and (c )

randomly in adjacent native forest. In the agroforest rows, where both cupuassu and peach

palm roots grew, the ingrowth core pairs were buried midway between the two trees, which

usually fell beneath the dripline of the cupuassu canopy. Core placement in rows was located

at random, but the pairs were buried so that each treatment was equidistant from both the

cupuassu and peach palm. Cores were placed randomly in agroforest alleys, an area densely

populated by peach palm roots, but where cupuassu roots were rarely found, to determine if

the latter would proliferate outside of its "rooting zone" in response to P microsite

enrichment. Ingrowth pairs were placed randomly in adjacent native forest plots to examine

native forest plant response to P microsite enrichment. The cores were buried at the

beginning of the rainy season (mid November) 1995, concurrent with soil sampling, and left

for 100 days.

Upon removal, roots were cut flush with the outside of the ingrowth cores, and the

roots inside the tubes were washed and separated according to Volt and Person (1990). Total

root length was calculated using the line intersect method (Tenant 1975). Root lengths for

native forest species were estimated together, while agroforest root lengths were calculated

separately for peach palm, cupuassu, and the remaining "other" roots. Total root length per

ingrowth core is reported as m'2 to facilitate comparisons with root mass (g m'2). Oven-dried

and ground root tissue was wet-digested with H2SO/H2'02 (Thomas et al. 1967) for analysis

of P concentrations using ICAP spectroscopy.












Statistical Analyses

A paired-comparison t-test was used to identify differences in soil properties between

agroforest and adjacent native forest (n= 8 farms). Root length data were log transformed

to meet the equal variance assumption of analysis of variance (ANOVA) after a normal

probability plot of the residuals revealed heteroscedasticity; untransformed mean values are

presented. Paired differences between control and phosphate-treated cores were analyzed as

a function of location, species, and land-use system treatments by using ANOVA models with

these effects and their interactions. All analyses were performed using SAS (SAS Institute,

Inc., Cary, NC).

Results

Agroforest Soil Six Years Following Forest Clearing

Physical and chemical properties of agroforest and native forest soils are presented

in Table 4-1. Across the eight farms, particle size distribution did not differ between

agroforest and native forest soils. In particular, the clay fraction at both depths did not differ

between agroforest and native forest, providing evidence that soil properties were initially the

same in the paired agroforest and forest plots, because particle size distribution varies little

over time or as a result of management (Sanchez 1987).

Exchangeable Ca and Mg were significantly greater in the agroforest soil, as was pH,

resulting in a higher effective cation exchange capacity (ECEC) and lower aluminum

saturation (Al sat) in this system. Exchangeable Ca, in particular, was nearly four times

higher in the agroforests than in adjacent forests (P < 0.009). Overall, total C, N, P, and soil

organic matter were low when compared to other Amazonian forest soils, and did not differ










72
between the two systems. Although the concentration ofagroforest M-I extractable bases

was either higher or unchanged from that of forest soils six years after clearing, M-l Pi

decreased nearly 30% in the top 20 cm, and over 55% at the 20-40 cm depth (P < 0.049).

Readily-extractable Pi concentrations in the Bray P 1 and resin extracts of native forest soils

(0-20 cm) were also higher than those of agroforest soil (Table 4-2). Overall, the Bray P1

extract produced the highest extractable Pi concentrations in agroforest and forest soils,

presumably due to the dissolution of Al-phosphates, however, in both systems these

concentrations would be considered inadequate (< 7 mg kg"') for agricultural production

(Olsen and Sommers 1982). Bicarb Po was the largest extractable pool measured, however

neither it nor Bicarb Pi differed between agroforest and native forest soils.

Fine Root Response to Phosphate-Enriched Microsites

In all three locations (agroforest rows, alleys, and adjacent native forest) there was

a trend towards greater root length in phosphate-treated cores (Fig. 4- 1 A). However, using

a t-test, the difference in root length between paired P-treated and control cores was

statistically significant only in the agroforest alleys (P < 0.015). Overall, when data from both

rows and alleys were pooled, mean root length in P-treated cores (74.92 m mf2) was still

greater than in the control (46.96 m m"2) (P < 0.039). Root weight did not differ between the

control and P-treated cores in either agroforest location, but was significantly greater in P-

treated cores buried in native forest (Fig. 4-1B).

A significant root proliferation response to P-treatment was exhibited by cupuassu

only in agroforest alleys (Fig.4-2). Both cupuassu and "other" root length in P-treated cores

















150



120


EC
E
E^
.c
c

_.1
4-'

0
0
Of


agroforest
rows alleys


100


forest


I 'll, I I I y
agroforest
rows alleys


Fig.4-1. In all ingrowth core locations, there was a trend towards greater root length in P-treated cores; this
significant only in agroforest alleys. Root biomass was significantly greater in P-treated cores buried in forests.


effect was statistically


forest











100


Rows p<0.18

80-


60-


40- '
p<0.34
20- p<0.13 T
20- T 1


0 I 1 --Il I I
cupuassu peach palm other


SControl
""I Phosphate


p<0.67


J J



p<0.35
p<0.10 T
.' ;;


cupuassu peach


Fig. 4-2. In agroforest rows, root length did not differ between cupuassu and peach palm
in either core treatment. Root length in phosphate-treated ingrowth cores was significantly
greater than the control for cupuassu and "other" roots only in agroforest alleys.


E
E
-.
CD
C
(-
0
0


palm other


-r-*---------------------inii,,ii,,,,,ii,,,i,,inii,,,,iii,,,niiinnnii----n











75

(6.38 and 44.61 m m"2, respectively) were significantly greater than in control cores (0.52 and

13.58 m m"2) (P < 0.012 and P 0.007) Cupuassu root weight in P-treated cores (2.41 g

m-2) was also higher than that found in the paired control (0.90 g m-2) (P !< 0.100). Peach

palm root length did not differ between phosphate and control cores, but exceeded that of

cupuassu for both the P- and control treatments in the alley location (P < 0.0001) (Fig. 4-2).

In agroforest rows, there were no differences in root length or weight between the P-treated

and control cores, nor were there differences between peach palm and cupuassu root lengths

in either treatment (Fig 4-2).

Table 4-3. Phosphorus content ( one SE) in fine root tissue growing in phosphate-treated

and control ingrowth cores (n=8).

Tissue P Content (mg g'1) T-test Increase in

Control Phosphate P values P content (%)
cupuassu 0.62 0.02 0.86 0.05 0.041 38.7
peach palm 0.88 0.06 1.01 0.05 0.031 14.8
other 1.10 0.15 1.22 0.10 10.9
forest spp. 0.83 0.07 0.93 0.10 12.1
a P values a 0.15 not reported.

Across all four root groups (cupuassu, peach palm, "other" and forest), tissue P

contents were greater for roots growing in P-treated cores than those in the control (P

,0.010). Analyzed separately by group, this effect was significant only for cupuassu and

peach palm, with cupuassu exhibiting over twice the increase in root P content (38.7%) than

the palm (14.8%) (Table4-3).















Discussion

Soil Chemistry Following Conversion of Forest to Agroforest

The greater exchangeable Ca and Mg in the top 20 cm ofagroforest soil relative to

adjacent native forest indicates a common effect of the slash-and-bum conversion of primary

forest to agricultural land-use. Ash deposited on the future agroforest site from forest

biomass burning undoubtedly produced a pulse of base cations in the mineral soil,

precipitating an increase in pH and a decrease in exchangeable Al. Many studies report the

favorable effects of burning on soil chemical properties initially following forest clearing

(Ewel et al. 1981, Sanchez et al. 1983, Andriesse and Kioopmans 1984), and this study

suggests that such changes may persist six years after agroforest establishment.

Although the nutritional quality of forest biomass growing in tropical Oxisols is

relatively low (Vitousek and Sanford 1986), the total quantity of nutrients released after

burning mature forest usually supports two to three years of no-input annual cropping before

fields are abandoned to fallow (Serrao et al. 1995, Juo and Manu). In perennial crop-based

agroforests, nutrients otherwise removed from the system during the first few years following

the burn through annual crop harvest or leaching, were stored in growing agroforest biomass

and cycled in fallen litter and decaying roots. When nutrient export commenced with

agroforest harvest three to four years after planting, it would be less than that expected for

annual crops because the first few years of crop production are usually low in a maturing

perennial system comprised of these Amazonian species (Ventereiri 1993, Mora-Urpi et al.

1997). In addition, a change in species composition when forest was converted to agroforest










77
may have further modified soil properties by altering the quantity and quality (i.e., nutrient

content) of above- and below-ground litter (Binkley 1995, Smith et al. 1998). While it might

be expected that nitrogen-fixing legumes growing in the agroforest understory during the first

three years after establishment would add nitrogen to the soil, total N did not differ between

the two systems. This may be due to the fact that volatilisation of N during forest biomass

burning can be up to 68% of total N content in vegetation (Kaufman et al. 1995) Moreover,

N export from this particular configuarion of agroforest species can be relatively high, often

comparable to that of annual cropping systems as the system approaches six to eight years

(Chapter 6).

Regardless of the origin, an increase in exchangeable bases and pH can also stimulate

decomposition and mineralization of organic matter by creating a more favorable environment

for microbial populations (Nye and Greenland 1960), as well as decrease the soil's P fixation

capacity by reducing APl and Fe3 solubility. Combined with the transfer of P from biomass

to soil following a slash and burn, these factors could initially increase P availability to plants

(Sanchez 1976). Kainer et al. (inpress) found that M-1 Pi concentrations in recently burned

shifting cultivation plots (pH = 5.9, 8.1 mg kg') were markedly greater than those in native

forest (pH = 4.7, 2.8 mg kg') located in the same western Amazonian extractive reserves.

Similarly, Lessa et al. (1996) attributed an increase in bicarb-extractable Po in the top 20 cm

of an Oxisol to accelerated organic matter decomposition and mineralization one year

following savanna clearing in northeastern Brazil.












Readily-Extractable Pi

Six years after forest clearing, there was no evidence that Pi concentrations in

agroforest soil increased as a result of forest biomass burning. In fact, while agroforest M-1

extractable bases had increased or remained unchanged from native forest levels at the time

of sampling, M-1 Pi was considerably lower, as were Pi in the Bray P1 and resin extracts.

Such decreases in agroforest readily-extractable Pi are evidence that phosphate is being taken

up by the aggrading agroforest faster than it can be restored into these pools from less readily-

extractable forms.

Without a measure of total soil microbial biomass in the two systems, it is unknown

if temporary differences in Pi immobilization contributed to lower agroforest extractable Pi

concentrations. However, as discussed below, similar total C-to- P ratios and organic matter

content in agroforest and forest soils suggest that this would not be the principal cause of

lower agroforest readily-extractable Pi. It is also improbable that extractable Pi decreased as

a result of downward movement or leaching through the soil profile, given the inherent

adsorptive characteristics of tropical Oxisols (van Wambeke 1992). However, it is possible

that soil Pi plus that released from plant biomass during the bum was "fixed" into more stable

P fractions not measurable in the extracts used in this study. Linquist et al. (1997) found that

despite large P fertilizer applications exceeding crop removal in a Hawaiian Ultisol, M- 1 Pi

decreased from 35 to 30.5 mg kg' during a four year period. In our study, however, the

relatively short period occurring between forest burning and sampling makes it unlikely that

agroforest P moved into the most recalcitrant occluded soil pools (Cross and Schlesinger

1995). Thus, one might expect agroforest solution Pi to be restored, either through











79
desorption from secondary minerals or Po mineralization. Using sequential fractionation

procedures, studies have shown that readily-extractable Pi in many agricultural systems is

maintained in equilibrium with less labile pools, such as NaOH-extractable Pi (Hedley et al.

1982, Tiessen et al. 1983, Crews 1996). Despite an 86% decrease in resin Pi (from 2.76 to

0.38 mg kg1) after 13 years of no-input cropping in a Peruvian Ultisol, Beck and Sanchez

(1994) surmised that resin Pi had been sustained by Po mineralization and more stable Pi

fractions because this Pi pool was not large enough to support the total removal of 38 kg P

ha' that resulted from grain harvests. The role of these less readily-available P fractions in

maintaining solution Pi, and ultimately, the productivity of perennial crop-based agroforests,

is relatively unstudied and certainly merits further investigation.

Extractable Po

How soil bicarb-extractable Po concentrations were affected initially following forest

burning is unknown, but at the time of sampling six years later this pool did not differ between

the two systems. This suggests that despite soil conditions more favorable to organic matter

decomposition and mineralization, other factors, such as lower turnover in above- and below-

ground biomass at this stage of agroforest development, may have stabilized or even limited

bicarb Po accumulation in agroforest soils. Linquist et al (1997) suggested that readily-

extractable Po is coupled with C mineralization after observing that bicarb Po declined at the

same rate as soil organic carbon and total N during four years of continual cropping in an

Ultisol. In our study, soil organic matter (OM) was equally low (2.0 %) in both forest and

agroforest soils, most likely because decomposition and mineralization are so rapid in the

tropical environment that only the most recalcitrant OM fractions remain in either system.











80
In these conditions one would expect the labile Po pool to be maintained at a constant level,

unless modified temporarily by seasonal pulses or immobilization. He et al. (1997)

demonstrated that total soil C-to-P ratios were closely related to soil microbial biomass and

P availability. In our study, neither C-to-P ratios nor the total soil C content differed between

the two systems, suggesting that varying rates of mineralization and immobilization are not

the primary causes for a difference in P availability between forest and agroforest.

Other research has shown that while bicarb-extractable Po may act as a sink or source

during periods of fertilization or P deficiency, absolute changes in this pool after years of

cultivation are negligible (Sharply and Smith 1985, Crews 1996, Schmidt et al. 1996). These

and other studies indicate that increasingly stable P pools, such as NaOH-extractable and

"residual" Po, contribute significantly to plant P uptake over the long term by buffering more

readily-extractable Pi pools, and therefore may better represent the soil's potential for P

maintenance (Beck and Sanchez 1996). Tiessen et al. (1982) suggested that as the most

labile Po fractions mineralize and become depleted through crop uptake, P dissolution from

primary and secondary minerals becomes increasingly important to plant nutrition.

Total P

Whereas significant decreases in agroforest readily-extractable Pi might be explained

by its redistribution among various P fractions not measured in this study, total P provides

an index of the absolute amount of P in the soil. As in the case of base cations, one might

expect greater total P concentrations in agroforest soils as a result of the net transfer of P

from forest biomass to soil following burning. Kauffman et al. (1995) found that total soil

P in slashed primary terrafirme forests in Rond6nia, Brazil increased 40% from preburn











81
concentrations immediately following burning. Any such increase in agroforest soil P

following forest biomass burning was no longer apparent six years later, as demonstrated by

similar total P concentrations in agroforest (902 kg ha-') and adjacent forest (792 kg ha')

soils. Likely sinks for agroforest P include accumulation in above and below-ground biomass

and loss through three years of crop harvests, which, combined, could account for

approximately 35 to 40 kg ha"' (Chapter 6). Peach palm biomass, in particular, was found

to store over twice as much P in above-ground biomass, than in cupuassu and Brazil nut

combined in an eight-year-old agroforest (Chapter 6). The lack of difference between forest

and agroforest total soil P stocks implies that the latter has already depleted any post-burn P

additions. As a result, the readily-extractable Pi fraction in agroforests will likely continue

to decrease with time, eventually precipitating a decline in productivity under current

management practices, unless Pi is made available through other mechanisms, such as root

exudates, or buffered in the soil system by other less readily-available fractions not measured

in this study.

Fine Root Response to Phosphate Microsite Enrichment

While soil extracts provide evidence that labile Pi has decreased since agroforest

establishment, the question remains whether agroforest productivity is currently limited by the

size of this pool. The greater proliferation of cupuassu and "other" plants roots in P-treated

cores buried in agroforest alleys compared to the control cores suggests that these species

may invest more resources into roots that find P-enriched microsites. However, definite P

limitations to plant productivity could not be inferred using the root ingrowth core bioassay

because roots of the same species did not respond to P microsite enrichment in agroforest











82
rows. There was a similar trend towards greater mean root length in P-treated cores buried

in native forest, but this effect was not statistically significant. Cuevas and Medina (1988)

used proliferation of fine root biomass to infer both a P and Ca limitation to native terrafirnme

forest in the Venezuelan Amazon, and an analysis of native forest root mass in this study

revealed a significantly higher root mass in P-treated cores. As earlier noted, extractable Pi

concentrations measured in any of the extracts used in this study are considered "low" for

both forest and agroforest soils. However, a P-limitation to native forest productivity cannot

be inferred based on the root ingrowth bioassay, despite the fact that many studies cite P as

the nutrient most limiting to tropical forest productivity (Vitousek and Sanford 1996).

Length Versus Mass as an Indicator of Proliferation

Overall, root mass in P-treated cores did not differ from that of the control in

agroforest alleys, and this is perhaps due to differing patterns of root biomass allocation

among the system's components. Cupuassu root length appeared to be a more sensitive

measure of root proliferation than mass, and a plot of root length versus mass reveals a

significant linear relationship in which a small increment in mass produced a large increase in

length. Similarly, the majority of the various unidentified herbaceous species that comprised

the "other" group had very fine roots (diameter < 0.5 mm), which produced over twice as

much length than peach palm roots (in P-treated cores) with less than a third of the mass. The

difference in "other" root mass between to P-treated and control cores was not significant,

perhaps because the greater mass of coarser (diameter 2 mm) roots (of different species)

that occasionally grew into cores of both treatments overwhelmed the fine root mass,

obscuring any proliferation response based upon this variable. Ultimately, we placed greater











83
emphasis on root length in our evaluation of root proliferation response because the surface

area of contact between root and soil is more indicative of a root system's capacity to take

up nutrients than is mass (Newman 1966).

Root Proliferation in Agroforest Alleys and Rows

Studies have shown that root proliferation in patches where nutrients are more

abundant is a foraging strategy that may be more effective for fine- rooted species growing

in environments where nutrients are heterogeneously distributed or "patchy" (Caldwell 1994).

The proliferation response to P-enrichment exhibited by cupuassu in agroforest alleys may

reflect the heterogeneity of nutrient availability and the density of root distribution in this

location. With extractable Pi concentrations so low in agroforest soils, root growth would

likely be concentrated in areas of accumulating organic matter to take advantage of Po

mineralization. Decomposition and mineralization of more abundant and homogeneously

distributed litterfall in agroforest rows probably contributed to a more constant supply of P

to cupuassu roots growing in this location. Overall, cupuassu root length was greater in cores

placed in rows than in alleys, regardless of treatment. This, and the fact that the row location

often fell beneath the cupuassu canopy, suggest that roots were more densely distributed in

agroforest rows. Higher root density would increase the likelihood that roots would

"randomly" grow into both P-enriched and control cores, perhaps explaining why cupuassu

root lengths did not differ significantly between the P-treated and control cores in rows.

In contrast, litterfall in alleys was patchy, often exposing bare mineral soil. In such

an environment, the cost of root growth is relatively high if nutrient acquisition is not

increased as a result of the investment. Thus, we see very little cupuassu root length or mass











84
in the control cores buried in agroforest alleys compared to rows. Cupuassu roots growing

into alleys proliferated only when they encountered the P-enriched cores. Greater light and

water availability, and perhaps lower root densities in agroforest alleys may have also

contributed to a more favorable environment for the root growth of "other" weedy species

which are often better adapted to efficient exploitation of patchy nutrient availability.

Root Competition Among Agroforest Components

Differences in root response to P-microsite enrichment among agroforest components

may also reflect differing ecological strategies for nutrient acquisition that determine

competitive interactions among agroforest components. While the roots of cupuassu and

"other" plants proliferated in P-enriched cores in agroforest alleys, peach palm roots did not

exhibit similar foraging behavior. In fact, overall, neither palm root length, nor mass, differed

among core treatments or locations. This suggests that this species may acquire P in P-

deficient habitat through mechanisms other than proliferation of fine roots.

Fitter (1994) suggested that coarse-rooted species are less adapted to proliferate in

nutrient-enriched microsites because the investment necessary for the growth of longer-lived

high diameter roots may not be offset by the resources gained in short-lived nutrient-rich

patches. Potential differences among plant species in their capacity for root proliferation

seriously weakens the root ingrowth bioassay as a means to detect nutrient deficiencies in

crops, because a lack of proliferation might be misinterpreted to mean that the species is not

nutrient-limited, when in fact, a lack of response may be due to species-specific differences

in carbon allocation. The specific root length of peach palm is approximately half that of

cupuassu (Haag 1997), so that the palm allocates twice as much biomass to an equivalent










85
length of root as cupuassu. Furthermore, such differences in carbon allocation may indicate

different ecological strategies for resource capture. For example, it may be that instead of

proliferating short-lived fine rootlets in ephemeral nutrient patches, the palm may invest in

longer-lived higher diameter roots to locate and exploit soil resources that may be spatially

beyond the reach of competitors. Ferreira et al. (1995) estimated that when growing in

heavy-textured clay Oxisols, absorptive roots of peach palm may extend up to 9 meters from

the stem. In addition, the palm roots form thick superficial mats at the base of stems and

offshoots that "catch" fallen litter. In another study (Chapter 6) resin-Pi concentrations in the

organic matter trapped in the peach palm's root mat were 10 to 100 times greater than Pi

concentrations in the top 5 cm of surrounding soil. Finally, peach palm roots are known to

form vesicular-arbuscular mycorrhizal symbioses in Amazonian Oxisols, and other studies

suggest that this species may be able to solubilize less readily-extractable forms ofP (Clement

and Habte 1994, Femrnandes and Sanford 1995). Despite these potential mechanisms for P

acquisition, it cannot be concluded that peach palm is P-sufficient based upon a lack of root

proliferation response to P microsite enrichment, due the inherent weaknesses of the root

ingrowth bioassay mentioned above.

Mora-Urpi et al. (1997) note that P deficiencies are rarely observed in peach palm

growing in tropical Ultisols and Oxisols, and the various strategies for P acquisition described

above likely increase the palm's competitive ability in P-deficient soils. The RECA farmers'

concerns of root competition by the peach palm were based upon observations that palm

roots regularly grew in the soil beneath cupuassu canopies. In an eight-year old agroforest

of the same configuration planted by RECA farmers peach palm comprised 72.3% of total











86
above ground biomass, providing further evidence of the palm's dominance in this

agroecosystem (Chapter 6). The results of this study demonstrate that readily-extractable Pi

concentrations in agroforest soil decreased relative to adjacent forest, perhaps to the

detriment of other less-competitive species in the system. In another study, resin-extractable

P measured monthly over one year was higher underneath peach palm canopies than those of

cupuassu, presumably due to faster leaching, decomposition and mineralization of the

relatively P-rich peach palm leaf litter (Chapter 5), and the palm appears more efficient in

procuring and storing P in rapidly growing above- and below-ground biomass than the other

two agroforest components (Chapter 6). Thus, if competition is defined as the reduction in

plant fitness resulting from resource exploitation by neighboring plants (Grime 1977), it might

be concluded that peach palm competition threatens productivity in cupuassu and Brazil nut

under current no-input management practices. However, this study also demonstrates that

cupuassu roots do proliferate when they encounter P-enriched patches in close proximity to

its canopy, resulting in nearly a 40% increase in root tissue P content. While peach palm root

length and mass was greater than that of cupuassu in alley ingrowth cores, root length did not

differ between the two agroforest components in cores buried in rows, near the dripline of the

cupuassu canopy. Thus, despite the presence of neighboring peach palm roots, cupuassu P

nutrition might benefit from directed application of organic residues and/or fertilizer beneath

and around the canopy dripline, although further on-farm study is required before this can be

recommended.













Conclusions: Implications for Amazonian Agroforest Sustainabilitv

The results of this study demonstrate that six to eight years following clearing, labile

inorganic phosphorus decreases when native forest is converted to agroforest in western

Amaz.nia, which could result in early P-limitations to agroforest productivity in P removal

is not offset with additions. Clearly, the role of less labile Pi and Po pools in maintaining P

availability in perennial cropping systems deserves further research. However, the decrease

in agroforest labile Pi six years after forest conversion represents not only an irreplaceable loss

from the system under current management practices, but more importantly, a significant

difference in P cycling between tree-based agroecosystems and native forest. Like secondary

forest ecosystems, storage in live tissue represents a significant P sink during early stages of

vegetational succession, and presumably, much of the agroforest's future standing biomass

production requirements would be met by nutrient fluxes in the intrasystem cycle as the tree-

based agroecosystem reaches steady state (Attiwill and Leeper 1987). For example,

Polglase et al. (1992) found that M- 1 Pi in Eucalyptus reglans forests decreased from 34 mg

kg' at time zero to 2.3 mg kg' at age 16, and remained constant thereafter in stands aged 40

to 80 years old.

In contrast, P removal with the harvest of agroforest products, estimated during the

sixth year following establishment to be between 3.2 and 4.0 kg P ha"1 yr"1, represents a

permanent loss from the total soil P stock. While Po mineralization may sustain production

requirements of native forest at steady-state, the decrease in agroforest labile Pi indicates that

Po pools cannot adequately restore solution Pi as it is taken up by an aggrading

agroecosystem undergoing P removal with successive crop harvests. Unless replenished











88
through external inputs, this drain on soil P will only increase as the system matures and

harvest ofagroforest products continues. Arguably, the 25 to 50% reduction (depending on

the extract) in readily-extractable Pi six years after forest conversion, represents less than one

percent of the agroforest's total soil P stock (410 mg kg'), and the large difference between

total P and extractable Pi may include pools that are plant-available over the long term.

However, the rate at which P is supplied to agroforest plants determines the system's

productivity on a short term basis, and hence, its potential for economic sustainability. The

decrease in agroforest readily-extractable Pi relative to that in native forest soils demonstrates

that it is being taken up more rapidly than it can be restored by other P pools in the soil

system, and this decrease in "labile" P may affect components of the system differentially is

one species, for example, is has "access" to less readily-soluble P forms while another is not.

Therefore, it cannot be assumed that the processes sustaining mature native forest ecosystems

will maintain productivity in all agroforest components without management intervention.

While it is unlikely that production in the agroforest will cease entirely in the short

term, continually low or reduced productivity may exclude commercial agroforestry from

consideration as an economically viable alternative to other more destructive land uses in

Amaz6nia. In the absence of perceived economic sustainability, farmers will clear more forest

to establish new agricultural systems, because forest land is not a scarce resource in this

region. In all five focus group discussions held with RECA farmers, producers admitted that

they continued to clear forest every year following agroforest establishment to plant more

perennial crops. Their objective was to maintain household income when productivity of the

first agroforestry systems planted ultimately fell. Coupled with their fear of aggressive











89
competition by the peach palm, these farmers did not believe that the initially "high"

productivity ofagroforests could be maintained, and thus, they chose to minimize economic

risk by planting new systems every year. Although the producer's concerns are

understandable, perceived and managed in this way, agroforests do not offer a means of

decreasing deforestation rates on Amazonian small farms.

Undoubtedly, the sustained production in Amazonian agroforests will require practices

that both offset nutrient export with crop harvest using soil amendments, as well as enhance

organic matter cycling to maintain soil solution P concentrations and protect the system from

further nutrient losses. Aside from cost, a major constraint to the use of most organic and

inorganic amendments in these soils could be that phosphate ions are adsorbed almost as fast

as they are released into solution, either through dissolution or mineralization. Hands et al.

(1995) recommend that inorganic P be added to the mulch layer of alley cropping systems to

avoid fixation by the mineral soil. In this case, directed fertilizer application in fallen litter

beneath the cupuassu canopy, where root growth was shown to be comparable to that of

peach palm, would add P, stimulate organic matter decomposition and mineralization, and

perhaps encourage greater fine root growth towards sources of mineralizing P on the

agroforest floor. Obviously this and other potential management practices need to be tested

before they can be recommended, and further participatory on-farm research is necessary to

design management strategies that are both economically feasible and practical so that

commercial agroforestry systems do indeed offer a sustainable alternative to more destructive

land uses driving Amazonian deforestation.
















CHAPTER 5
LITTER DYNAMICS AND MONTHLY FLUCTUATIONS
IN SOIL PHOSPHORUS AVAILABILITY IN AN AMAZONIAN AGROFOREST


Introduction

Maintaining phosphorus (P) availability to crop plants growing in highly weathered

soils is one of the largest challenges facing the development of sustainable agroecosystems

throughout much of the humid tropics (Sanchez 1976). Previous studies have shown that

less than 1% of total P in Oxisols and Ultisols of South America's Amazon Basin is

extractable using procedures for the most common indices of P availability (Tiessen et al.

1993, Dias-Filho et al. in press, Chapter 4), and it is estimated that P deficiencies limit

crop production in 90% of the region's upland soils (Nicholaides et al. 1985, Smyth and

Cravo 1990). Much of the soil P stock is geochemically bound to iron and aluminum

oxides in forms that are largely unavailable for uptake, rendering plant P nutrition highly

dependent upon biologically-mediated transformations of organic P (Cross and

Schlesinger 1995, Hedley et al. 1995). Thus, in non-fertilized agroecosystems,

fluctuations in soil P availability over a growing season are often associated with factors

controlling litter decomposition and Pi mineralization from soil organic matter, such as

temperature, moisture and resource quality (i.e. the biodegradability of organic material),

as well as with seasonal variations in P demand by plants and competing microbial

populations (Tate 1984, Stewart and Tiessen 1987, Lajtha and Harrison 1995). In tree-













based ecosystems, such as perennial crop-based agroforests, Pi mineralized from

decomposing litterfall and dead roots contributes to the long-term productivity of these

systems, although the highest rate at which Pi is released from various organic sources

may not necessarily coincide with periods of greatest demand by the system's crop

components. It is the rate of Pi release by mineralization, rather than the amount of

organic P (Po) present, that frequently controls Po availability to plants (Tate 1984).

Consequently, the most efficient use of soil amendments, including inorganic fertilizers,

green manures and organic residues, often requires synchronized and directed application

during periods of high demand by crop plants and low soil availability (Young 1989,

Fernandes et al. 1997). For this reason, monitoring spatial and temporal fluctuations in

soil P availability in relation to the production cycle of an agroecosystem is important to

developing management practices that sustain productivity in low/no input systems.

Assessing short term changes in soil P availability is, however, difficult using the most

common soil extracts because they often solubilize portions of solid-phase P not available

to plants (Bolan 1991). Moreover, soil extractions carried out in laboratories do not

necessarily reflect the ambient conditions that control P mineralization, or the

biogeochemical processes that cause short term fluctuations in soil solution Pi, such as

microbial immobilization, adsorption to soil solids, and plant uptake (Lajtha 1988).

In general, resin extracts more closely simulate the physical action of plant roots

because exchangeable ions, such as H2PO04, are desorbed from soil solids without drastic

changes in soil chemistry (McKean and Warren 1996). Conceptually, the resin acts as a

sink for phosphate ions desorbing from soil solids, continually removing them from












solution so that an equilibrium between the solid and solution phases is not established

(Vaidyanathan and Talibudeen 1970). In a laboratory study, Parfitt and Tate (1994) used

resin-impregnated membranes to measure P mineralization by extracting the soil to

exhaustion before and after an incubation period. Under field conditions, especially in

soils with high sorption capacities, resins behave more like dynamic exchangers, so that P

measured in resin extracts represents a composite index of the soil's retention capacity,

microbial P demand, and the status of plant available P (Cooperband and Logan 1994).

As a composite index, resin-filled bags or impregnated membranes are useful for making

in situ comparisons of temporal and spatial variations in P availability within or among

systems (Huang and Schoenau 1996, Femrnandes and Coutinho 1997). Fluctuations in P

availability under field conditions have been monitored in a number of different ecosystems

using resin bags placed in or on top of the soil for varying lengths of time (Gibson 1986,

Lajtha 1988, Giblin et al. 1994, Yavitt and Wright 1996). Krause and Ramlal (1987) used

resin bags to show that P availability over a four month period remained 2.5 times greater

in soil under a clear-cut area than in adjacent forest, presumably due to increased

decomposition stimulated by higher temperatures and forest floor mixing resulting from

the timber harvest activities. The relatively new use of resin-impregnated membranes as

an index of P availability in field conditions is especially attractive because the two-

dimensional rigid structures can be placed in soil or litter to achieve maximum surface area

contact with minimal disturbance (Cooperband and Logan 1994, Huang and Schoenau

1996), and unlike resin-filled bags, resin membranes do not trap fine roots and soil

particles that interfere with analyses (Fernandes and Warren 1996). Numerous studies




Full Text
ECOLOGICAL SUSTAINABILITY IN AMAZONIAN AGROFORESTS:
AN ON-FARM STUDY OF PHOSPHORUS AND NITROGEN DYNAMICS
FOLLOWING NATIVE FOREST CONVERSION
By
DEBORAH ANNE MCGRATH
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
1
1998

ACKNOWLEDGMENTS
I am extremely fortunate to have had an excellent advisory committee. Each member
had a unique and indispensable role in my academic training, and for their generous assistance
I am very grateful. Both Drs. Nicholas Comerford and Marianne Schmink provided the
inspiration, encouragement, and support that ultimately allowed me to carry out research in
areas that I would not have otherwise felt free to explore. 1 also greatly benefitted from the
input of Drs. Wendell Cropper and Kimberlyn Williams, who introduced me to ecological
concepts that broadened my view of agricultural systems as functioning ecosystems. Dr. P.K.
Nair was very gracious to accept the task of reading my dissertation so late in the process.
My research interests were certainly stimulated by the dynamic agroforestry program at
Florida initiated by Dr. Nair and his students. My major advisor. Dr. Mary Duryea, was, quite
simply, a mentor in every way, and her friendship and guidance have been invaluable.
My field research was funded by fellowships from the Inter-American Foundation,
the National Security Education Program and the University of Florida T ropical Conservation
and Development Program. I am grateful for their financial support, as I am to the University
of Florida’s Center for Latin American Studies, not only for the two-year Title VI Foreign
Languages and Area Studies (FLAS) fellowship in Brazilian Portuguese, but for encouraging
collaborative research among the social and natural sciences with our southern neighbors.
ii

From the University of Florida I would like to thank Cherie Arias for generous
administrative help, James Bartos, Christina Bliss, Jeff English, Wayne Hogan. Dave Noletti,
Larry Schwandes, and Beverly Welch for laboratory assistance; Jay Harrison for statistical
counsel; Ken Clark for critical input to the study design, and Gretchen Greene and Bea
Covington for being girlfriends. Mary McLeod in the Forest Soils Lab was especially
generous with her time and patience. My interaction throughout the years with Dr. Peter
Hildebrand has been very important, because he is, in spirit, a “farmer’s farmer ’.
Special thanks are extended to John Haydu, Peter Cronkleton, Coral Wayland, and
Richard Wallace for priceless laughs and a place to get away in Rio Branco when the
grittiness of the field became too much. Karen Kainer, Jon Dain, and Connie Campbell are
also acknowledged for their valuable insight into conducting participatory research in the
Amazon, as well as for their hospitality in Rio Branco. I also thank Sonia Alfaia for her
hospitality in Manaus. I greatly appreciated being able to count on Charles Clement, from the
National Institute of Amazonian Research (INPA) in Manaus, Brazil, and Pauline Grierson,
of the Ecosystems Research Group at the University of Western Australia, for thoughtful
advice and dialogue via e-mail.
This research would not have been possible without the generous and conscientious
collaboration of my Brazilian colleagues and friends. I am extremely grateful to the non¬
governmental organization, Grupo PESACRE (Pesquisa e Extensáo do Sistemas
Agroflorestais no Acre), both for institutional collaboration and tremendous logistical support
during the field research. Both the assistance and friendship provided by members of
PESACRE, especially that of Nilton Cossan Mota, greatly enriched my research experience.
iii

I thank SOS Amazonia and Projeto Tapiri for their helpful feedback and for allowing me to
participate in their environmental education courses. I also appreciate the use of laboratory
facilities at the Universidade Federal do Acre (UFAC). My most heart-felt thanks are
extended to Maria Lucia Hall de Souza for her superb field assistance. Her conscientious
work enabled me to entrust her with field data collection when I needed to leave the research
site. Her friendship, as well as the hospitality of both her and her husband, will not be
forgotten.
I must express my deep gratitude to the farmers of Projeto RECA (Reflorestatmento
Económico Consorciado e Adensado) for their insight and enthusiastic collaboration in this
research. I am very grateful to the families of Sr. andSra. Nelson Barbosa, Amaldo da Costa,
Sr. Joáo and Francisca Craveiro, Sr. Aluizio and Sra. Carmelita Gonsalves, Sra. Linda
Hendricks, Semildo and Zali Kaefir, Bemadete and Sergio Lopes, Sr. and Sra. Raimundo
Antonio Roderigues, and Marcio and Menesilda Sorde, all of whom participated directly in
the study, offering their farms, friendship, generosity, hard work, and unwavering
commitment to the investigative process.
Finally, my gratitude to my parents, Tom and Patty McGrath and Janet and Garry
Bostwick, for their continual support and enthusiasm is endless. I know that to a large extent
my research interests were by the curiosity and love of my mother, Janet Bostwick, for all
things growing in soil, and by the commitment of my father, Thomas McGrath, to protecting
our environmental heritage. Finally, I thank my husband, C. Ken Smith, for his patience,
support, and collaboration as a colleague, as well as for being my hero and best friend.
iv

TABLE OF CONTENTS
ACKNOWLEDGMENTS ii
ABSTRACT vu
1 INTRODUCTION 1
The Problem: Ecological Instability in Amazonian Land-Use 1
Research Questions and Objectives 6
2 THE RECA PROJECT 9
The Settlement of Nova California, Acre, Brazil 9
Projeto RECA 12
Agroforest Establishment 15
Agroforest Tree Species 17
Challenges Facing RECA 21
3 APPLYING A PARTICIPATORY APPROACH TO AGROECOLOGICAL
RESEARCH 26
Introduction 26
Methods 29
The Participatory Process: Lessons Learned 42
Information Gained Using a Participatory Approach 47
Conclusions 56
4 PHOSPHORUS AVAILABILITY AND FINE ROOT PROLIFERATION IN
AMAZONIAN AGROFORESTS SIX YEARS FOLLOWING FOREST
CONVERSION 58
Introduction 58
Methods 62
Results 71
Discussion and Conclusions 76
Conclusions: Implications for Amazonian Agroforest Sustainability 87
v

5 LITTER DYNAMICS AND MONTHLY FLUCTUATIONS IN SOIL PHOSPHORUS
AVAILABILITY IN AN AMAZONIAN AGROFOREST 90
Introduction 90
Methods 94
Results 102
Discussion Ill
Conclusions: Implications for Agroforest Management 121
6 NET PRIMARY PRODUCTIVITY, NITROGEN AND PHOSPHORUS CYCLING
IN AN AMAZONIAN AGROFOREST NINE YEARS FOLLOWING FOREST
CONVERSION 124
Introduction 124
Methods 127
Results 139
Discussion 150
Conclusions: Agroforest Sustainability 166
7 AMAZONIAN AGROFOREST SUSTAINABILITY: NUTRIENT CYCLING,
MANAGEMENT AND ECONOMIC VIABILITY 169
Accelerated P Cycling and Agroforest Management 169
Nitrogen Removal and Agroforest Management 173
Conclusions: Prospects for Ecological and Economic Sustainability 176
LIST OF REFERENCES 181
BIOGRAPHICAL SKETCH 201
vi

Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
ECOLOGICAL SUSTAINABILITY IN AMAZONIAN AGROFORESTS:
AN ON-FARM STUDY OF PHOSPHORUS AND NITROGEN DYNAMICS
FOLLOWING NATIVE FOREST CONVERSION
By
Deborah Anne McGrath
December 1998
Chairperson: Dr. Mary L. Duryea
Major Department: School of Forest Resources and Conservation
Raising land productivity with perennial cash crops may allow Amazonian farmers to
meet food demands and increase livelihoods with less forest clearing. Despite more efficient
nutrient cycling in tree-based agroecosystems, maintaining phosphorus (P) availability to
plants growing in weathered tropical soils challenges the sustainability of commercial
plantation agroforests. The primary objective of this research project was to examine
phosphorus and nitrogen (N) dynamics in a widely-adopted peach palm (Bactns gasipaes
Kunthj-cupuassu (Theobroma grandiflorum)-Brazi\ nut (Bertholetia excelsa) agroforestry
system to evaluate the potential of commercial agroforests to offer a more sustainable
alternative to other Amazonian land-uses. The research was conducted in Acre, Brazil, using
a participatory approach so that farmers would benefit from both the investigative process and
vii

study results, perhaps enabling them to maximize the agroecosystem’s potential for sustained
production. A comparison of soils from eight agroforests and adjacent native forests
é
demonstrated that despite greater cation exchange capacity and pH in agroforest soils,
extractable P was significantly lower, suggesting a decline in P availability since conversion
of forest to agroforest. Phosphorus limitations to productivity, assessed using a root
ingrowth bioassay, were not apparent, although greater root growth by peach palm suggested
a competitive advantage by this species. Monthly measurements of resin-exchangeable P
demonstrated greater P availability in soil beneath peach palm litter than under cupuassu trees.
Nitrogen and phosphorus were mineralized rapidly from decomposing palm litter but
immobilized in P-poor cupuassu leaves. Soil P availability was greatest early in the rainy
season, decreasing during the mid-rainy season when fruit production was highest. An annual
budget for an eight-year-old agroforest revealed that P removal with harvest was half that
expected for pasture and shifting cultivation, and that system-level P cycling was more rapid
than in Amazonian forests growing in similarly P-poor soils. High N removal with harvest
suggests that this nutrient may eventually limit agroforest productivity. Peach palm and
cupuassu phosphorus-use-efficiencies were similarly low, while that of Brazil nut was
comparable to Amazonian forest species. Leguminous cover crops and directed application
of soil amendments, including plant residues, beneath cupuassu and Brazil nut canopies are
recommended to increase soil nutrient availability and sustain productivity.
viii

CHAPTER 1
INTRODUCTION
The Problem: Ecological Instability in Amazonian Land-use
Since the late 1970s, Amazonian deforestation has proceeded at alarming rates,
raising world-wide concern because of its potentially negative consequences for global climate
change, biodiversity, hydrology and biogeochemical cycles (Skole and Tucker 1993).
Approximately one third of forest clearing in the Brazilian Amazon is undertaken by the
region’s growing population of colonist farmers for the shifting cultivation of annual crops,
while roughly 60% occurs at the hands of large-scale cattle ranchers for pasture creation
(Feamside 1993, Skole et al. 1994, Serráo et al. 1996). Geologically, the Guyana and
Brazilian shields that dominate the northern and southern ends of the Amazon Basin are the
oldest and most highly weathered soils found on the South American continent (Toledo and
Navas 1986). Consequently, annual crop production in the Basin's acidic nutrient-poor soils
(predominately Oxisols and Ultisols) is generally limited to two years because nutrient pulses
released by burning native forest vegetation decrease rapidly with crop removal and leaching,
after which agricultural fields are abandoned to fallow and additional forest land is cleared for
continued cultivation (Uhl and Jordan 1984, Ewel 1986, Hólscher et al. 1997). In areas
where low population densities and high land availability permit long fallow periods for soil
restoration (i.e., 10 to 25 years), shifting cultivation can be productive, however, when the
1

2
fallow is shortened, the practice results in rapid soil degradation (Nicholaides et al. 1985, Juo
and Manu 1996). Similarly, pasture productivity and longevity in the Amazon are limited by
soil fertility and disruptions in nutrient cycling processes. Generally, three to five years
following forest conversion, a rapid decline in the productivity of planted grasses, associated
with decreases in soil nutrient availability, permits the invasion of herbaceous and woody
“weeds” that characterize degraded and subsequently abandoned pastures (Toledo and Navas
1986, Dias-Filho et al. In press). Regrowth in both abandoned shifting cultivation plots and
degraded pastures occurs as succession proceeds, but often the species composition of the
secondary vegetation differs from that in primary forests and soil C and N stocks, as well as
other properties favorable for agricultural production, decline (Nepstad et al. 1991, Trumbore
et al. 1995, Moraes et al. 1996, Holscher et al. 1997). Managed extensively, without the use
of soil amendments or germplasm suited to the region’s physiography, these two principal
Amazonian land-uses are largely unsustainable. This lack of ecological stability combined
with the small economic return per unit area of land yielded by these land-uses results in
accelerated deforestation, habitat fragmentation, lowered agricultural production, failure of
small-scale farms, and greater rural poverty (Hecht and Cockbum 1990, Fearnside 1993,
Skole et al. 1994).
More recently, perennial crop-based commercial plantation agroforestry systems have
emerged as a promising Amazonian land-use alternative with the potential to reduce soil
degradation, improve living standards, and decrease pressures on remaining forested areas
(Smith et al. 1997). Whereas annual and perennial crops have traditionally been grown
together in multistory tree gardens, the production of high value perennial cash crops in

3
plantation agroforests represents a relatively new practice in Amazonia (Nair and Muschler
1993, Smith et al. 1997). Both the potential economic and ecological advantages of tree-
based agroecosystems arise in part from their longevity which promotes a more closed cycling
of nutrients that may extend the productivity of land already cleared (Ewel 1986, Smith
1990). In principle, deep-rooted perennials intercept cations and nitrate otherwise leached
from the soil surface, storing and cycling these nutrients in living biomass, fallen litter and
decaying fine roots, while reducing erosion losses by physically protecting the soil (Nair 1989,
Young 1989). Moreover, soil degradation and nutrient depletion resulting from crop harvest
is potentially less if the products harvested represent only a small proportion of the system’s
total organic matter and nutrient stocks (Jordan 1988). Perennial crop-based agroforestry
systems comprising cashew (Anacardium occidentale), coconut (cocos nucífera), babassu
('Orbignya pnmifera) and cacao (Theobroma cacao) have long provided an economically
important and ecologically stable land-use in the more arid Northeastern region of Brazil
(Johnson and Nair 1989).
In the late 1980s, an independent producer organization of colonist farmers initiated
Project REC A (Reflorestamento Económico Consorciado e Adensado) with the establishment
of a perennial crop-based commercial plantation agroforestry system in the western
Amazonian community of Nova California. Project RECA's objectives were two-fold: to
improve the economic security of farmers and decrease farm-level deforestation by providing
a more sustainable alternative to other land-uses (RECA 1989). Essentially, the farmers
believed that a multi-species system comprised of native forest trees would be more
productive than their failing annual crops and monospecific plantations of coffee and cacao.

4
The original system comprised three perennial components, cupuassu (“cupuapu” in
Portuguese, Theobroma grandiflorum), peach palm (“pupunha” in Portuguese, Bactris
gasipaes), and Brazil nut (“castanha”in Portuguese, Bertholetia excelsa), and was planted on
over 400 ha on nearly 200 farms throughout the region. This particular configuration of
agroforest species has proven highly productive during the initial years following
establishment, and consequently, the RECA project became known throughout Brazil as a
model of sustainable agriculture and grass roots initiative. As a result, farmers in Acre and
Rondónia continue to convert both primary and secondary forest into perennial crop
plantations that now include coffee, citrus, palm heart, and other native fruit and timber
species.
Although the RECA agroforestry system initially exhibited high productivity,
sustaining yields in the future is a constant and justifiable concern for these farmers because
information about the behavior of these species as components of intensively harvested
agroforestry systems is limited (Clement 1991 & 1993, Venturieri 1993). Many studies have
demonstrated that mixed perennial crop-based systems offer greater ecological stability than
annual monocultures by improving soil properties (Nair 1989, Ewel et al. 1991, Chander et
al. 1998), however, little on-farm research has been conducted to determine if these systems
are sustainable in Amazonian Ultisols and Oxisols without the use of soil amendments (Szott
et al. 1991). For the most part, the RECA agroforests are low- to no-input systems because
most farmers have limited access to chemical fertilizers and little experience using the large
inputs of organic residues recommended to maintain soil fertility (e.g., Nicholaides et al.
1985, Szott et al. 1991). Throughout the Amazon Basin, it is estimated that nitrogen (N) and

5
phosphorus (P) deficiencies limit crop production in 90% of the region's upland soils
(Nicholases et al. 1985). Maintaining P availability to crops plants may present a larger
challenge to sustained agroecosystem productivity because much of the total soil P stock is
geochemically bound to iron and aluminum oxides in forms largely unavailable for plant
uptake (Dias-Filho et al. In press). In agroecosystems where N requirements are met with
organic residues from leguminous plants, organic matter decomposition, mineralization and
fixation ofN: may be limited by soil fauna and bacteria sensitivity to P deficiency (Ewel 1986,
Crews 1993). From long-term studies of continuous cropping in Amazonia, Sanchez et al.
(1985) concluded that attempts to produce food crops in acid Oxisols and Ultisols without
the use of soil amendments are likely to fail. The question is, then, how sustainable are these
low- to no-input tree-based cropping systems planted by farmers throughout the Amazon
Basin?
At the time this study was initiated in 1995, RECA farmers were beginning to realize
the economic benefits of the original cupuassu-peach palm-Brazil nut agroforestry systems.
The continued adoption of commercial plantation agroforests throughout western Amazonia
underscores the importance of determining if these tree-based systems do offer greater
ecological stability than other land-uses, especially because conversion of native terra firme
forest into perennial crops is likely to increase as federally-sponsored colonization projects
planned for Acre proceed (Brown pers. comm., Slinger 1996). The RECA project provides
a timely and much-needed case study for evaluating the potential for both economic and
ecological sustainability of these commercially-harvested tree-based agroecosystems.

6
Research Question and Objectives
The overall objective of this research was to evaluate the potential for ecological
sustainability of a widely-adopted commercial plantation agroforestry system comprised of
native Amazonian forest tree species. The central question guiding the studies was
1.How sustainable are low-input, commercial plantation agroforests in Amazonia, and
what are some of the factors that control sustained productivity in these systems?
Specific study objectives intended to address this question were to
1. Analyze soils from eight RECA agroforestry systems and adjacent native forests to
determine how soil chemistry has changed since conversion of primary forest to
agroforest.
2. Assess potential P limitations to agroforest and native forest plant productivity using
a root ingrowth bioassay.
3. Quantify the stocks and fluxes of P and N in an eight-year-old RECA agroforest, and
construct an annual budget to determine how much of the system’s P and N
requirements are (a) met through internal cycling, (b) taken up from soil stocks, and
(c ) removed with harvest.
4. Identify socio-economic challenges to the sustainability of RECA agroforestry
systems, particularly those that constrain modifications in agroforest management
practices, through interviews, focus groups, and discussions with RECA families and
other local NGO’s and research institutions.
Conduct the research using a participatory approach that (a) encourages farmers’
involvement in the formation of research objectives, data collection and interpretation
5.

7
of results, and (b) fosters a multilateral exchange of knowledge, information, and
experience among researchers and land managers.
This dissertation is divided into eight chapters, including the introduction. The
second chapter is a synthesis of the history of the RECA project largely based upon
unpublished repons, local newspaper articles, and interviews and discussions with RECA
families and other Brazilian organizations conducted as part of this research. It summarizes
the past and present challenges faced by the producers’ organization, as well as the socio¬
economic benefits enjoyed by RECA farmers as a result of community-level agroforestry
adoption. Although RECA is somewhat atypical from many producers’ groups (e g., it has
received large amounts of outside financial assistance), the decade-old project demonstrates
many of the complex socio-economic issues associated with agroforestry system adoption,
underscoring the fact that the search for ecological stability addresses only half (or maybe
less) of the sustainability question.
Fanner participation was an important element of this project. It is hoped that
participation by RECA farmers improved the likelihood that the scope of this research
ultimately renders results that are useful to land managers in Acre. However, given the time,
monetary, and academic constraints of doctoral research projects, perhaps the most
immediately useful research output to RECA farmers was the participatory process itself,
described in Chapter Three. This chapter briefly outlines reasons for adopting a participatory
approach to on-farm agroecological research, describes the methods used to encourage
farmer participation in this research, evaluates the positive outcomes of the process, and
identifies areas in need of improvement.

8
different aspects of ecological sustainability from a nutrient cycling perspective, since
nutrients, such as P and N, are cited as the resource most limiting to productivity in natural
and managed ecosystems throughout Amazonia. The fourth chapter examines soil changes
six years following conversion of native forest to agroforests, especially those in extractable
P, and attempts to identify P limitations to plant productivity. The fifth chapter analyzes
seasonal fluctuations in soil P availability in relation to leaf litter decomposition and the
agroforest’s production cycle. In chapter six, system-level P and N dynamics in the
agroforest are compared with those of other Amazonian land-uses, including native forests,
pasture and shifting cultivation. The concluding chapter attempts to synthesize information
on agroforest P and N dynamics within the context of the socio-economic constraints and
opportunities faced by rural households (identified by researcher and RECA farmers) to
develop recommendations for management that enhance the cycling of organic matter and
nutrients to sustain productivity in this and other tree-based Amazonian agroecosystems.

CHAPTER 2
THE RECA PROJECT
The Settlement of Nova California
The state of Aeré, located in the western Amazon Basin on the borders of Bolivia and
Peru, is one of the last frontiers in the Brazilian Amazon (Grupo PESACRE 1989). An
important rubber-producing region previously considered part of Bolivia, Acre was annexed
by Brazil in 1903 following a war with its South American neighbor (Hecht and Cockbum
1990). The economy in Aeré was thus originally based in forest extraction, and its inhabitants
were primarily indigenous peoples and rubber tappers, Brazilians brought from other regions
in the country to extract latex from trees growing in native forests (Kandell 1984). In the
1970s, the governmental institution, INCRA (Instituto Nacional de Colonizaqáo e Reforma
Agrária), launched a large colonization project, referred to as the Polonoreste, in the
neighboring state of Rondónia. The project encouraged families from south and southestem
Brazil, where agricultural modernization was displacing small farms, to resettle in this
relatively undeveloped region of western Amazonia by giving them title to 100 ha lots of
largely undisturbed forestland to farm (Browder 1996). In the process, the national highway
BR364 was paved, linking Rondónia and later, Aeré, to the rest of Brazil. These events
initiated a wave of migration to Rondónia and Aeré that consequently led to accelerated
9

10
deforestation in the region as colonist farmers and large-scale ranchers cleared native forest
for pasture and shifting cultivation (Hecht and Cockburn 1990).
The colonist community of Nova California, which lies on the border of Aeré and
Rondónia (10° S, 67° W), was officially recognized as a town by INCRA in 1984. Previously
known as “Santa Clara”, which was little more than a gas station, a restaurant and five
houses, Nova California’s establishment represented INCRA’s official claim to land
previously controlled by the former owners of the rubber estate (seringal) California (RECA
unpublished). The region’s population increased considerably in the mid to late 1980s as
families migrated from the southern Brazilian states of Parana, Rio Grande do Sul, and Santa
Catarina, many of them stopping in Rondónia for several years before finally settling in Aeré.
Located 150 km east of Rio Branco, the capital of Aeré, Nova California now provides a
political and economic base for over a thousand farm families living on unpaved “feeder”
roads connected to the BR 364.
At the time of this study, state ownership of the region in which Nova California was
located had been disputed since the early 1980s by the governments of Aeré and Rondónia,
both of whom claimed the region as their own (Moreira 1992). The lack of legal definition
of the border between the two states greatly aggravated the economic hardship of families
living in and around Nova California because neither government was willing to invest
resources to build and maintain infrastructure in a town that might ultimately become the
property of another state. As a result, road maintenance, schools and medical facilities were
poorly funded, and INCRA, the organization that had brought families to the region,
essentially abandoned the community (Leite unpublished). Most residents had to travel

11
several hours on an unpaved road to Rio Branco for even minor medical care. Malaria, in
particular, was a medical problem that plagued residents, although this is now treated at a
community health post (PESACRE and GENESYS unpublished). Schools on feeder roads
continued only to the fourth grade, and families had to send their children to Rio Branco to
attend high school (Campbell 1994). During the rainy season, many families were forced to
walk up to 50 km to reach the BR364 because the mud made the unpaved feeder roads
impassable by car, bike, and horses. Because Nova California was never linked to a utility
grid, at the time of this study, electricity was provided to residents in town by a small
unreliable generator that was operated only in the evening, from six to twelve PM. Families
were responsible for digging their own wells, and “running” water was acquired by pumping
well water (using a diesel or electric pump) into a cistern built above the house. Wells
frequently dried up during the months of July and August, leaving families and the RECA
organization to collect water from swamp areas located at the edge of town. Most families
on the feeder roads still did not have access to electricity or running water at the end of this
study period.
The difficulties faced by these colonist fanners were made worse by the fact that
many of the crops they initially planted grew poorly, and in some cases, failed entirely due to
poor soils, pests, and insufficient marketing infrastructure. For example, monocultural
plantations of cacao (Theobroma cacao L.) succumbed to witches’ broom (Crinipis
perniciosa (Stahel) Singer), and poor access to highly competitive markets impeded farmers
from selling coffee (Coffea arabica) (RECA unpublished). Moreover, most families were
unaccustomed to farming in the nutrient-poor soils underlying native Amazonian forest.

12
Many faced extreme hardship when their shifting cultivation plots of rice, beans, and maize
failed to produce adequate harvests during the second or third year following forest clearing.
As a result, many families were forced to abandon their farms and resettle in other regions,
or return to southern Brazil. Although Brazilian law obliges farmers to maintain 50% of their
land in native forest, it is not difficult to encounter vast tracts of deforested land in the region
surrounding Nova California. Many of these deforested areas were created by ranchers who
bought up dozens of 100-ha lots from desperate colonist farmers and cleared them entirely
to raise cattle. Unfortunately, these large cattle ranches often proved unsustainable
themselves, due to poor soils and the invasion of weeds that precluded the regeneration of
pasture grasses, and in some cases, to a more recent drop in cattle prices throughout Brazil
(Hecht and Cockbum 1990, Browder pers. comm ). Consequently, many of these vast
degraded pastures have also since been abandoned.
Proieto RECA
In response to the economic crisis suffered by the region’s families, the RECA project
(Projeto de Reflorestamento Consorciado e Adensado) was initiated by a group of fanners
in 1988. Fatigued with the enormous labor and risk associated with the shifting cultivation
of annual crops, these farmers began to experiment with plants native to Amazonia, and in
particular, tree crops. One of the group’s leaders, Sergio Lopes, a university-trained teacher
from Santa Catarina, was also concerned about the ecological impact of deforestation
associated with shifting cultivation and farm abandonment. With assistance from the Catholic
Diocese of Rio Branco, the Federal University of Aeré (UFAC) and the Institute of
Amazonian Research (INPA), the producers’ group submitted a project proposal to various

13
European philanthropic organizations. The objective of the RECA’s proposed project was
to increase the economic well-being of colonist farmers through the production of high-value
perennial crops. Because the tree crops proposed were native to Amazonia, it was also
reasoned that they were better adapted to the region’s weathered forest soils and natural
pests, and thus more likely to persist and sustain productivity in these conditions. Thus, by
offering a more ecologically sustainable alternative to shifting cultivation, these systems could
decrease land abandonment and deforestation associated with small-scale production.
In 1989, the project acquired funding ($ 2 million USD) from Catholic organizations
in the Netherlands (CEBEMO) and France (CCFD) to inititiate the establishment of a multi¬
species perennial crop-based commercial plantation agroforest on over 200 farms (Martinello
1993, Smith et al. 1997). The first agroforestry system established by the RECA project in
1989 and 1990 (described fully below) was comprised of three perennial species native to
Amazonia, and participants were required to plant the components in a specific configuration
of species and spacing designed by the RECA organization.
Monetary incentive was an important factor attracting families to participate in the
RECA project. For every hectare of commercial plantation agroforest planted, participating
families received approximately $1,000 (USD) over a three year period from RECA to help
offset expenses incurred during plantation establishment and to help sustain households during
the initial years required before the perennial system began yielding fruit (Moreira 1992). In
return, the participating families were obliged to give a proportion of each harvest, beginning
with the fourth year, to the RECA organization for 10 years after plantation establishment.
The proportion of harvest increased, from 5% during the fouth and fifth years, to 30% by

14
year ten, and the proceeds from the sale of products were used to support administrative and
operating costs of the RECA project. Services provided by the organization included the
transportation of raw products from farms on feeder roads to a small factory located in Nova
California where the pulp of cupuassu fruit was processed and stored frozen, and later
transported to urban centers, such as Rio Branco, for sale. Farmers were responsible for
transporting and marketing peach palm fruit themselves, and because the fruit is so highly
perishable, many farmers simply sold the palm seed to buyers interested in establishing heart-
of-palm plantations. More recently, the organization received financial assistance from
another non-governmental organization (NGO) to build a canning factory for palm heart, and
an auditorium/dormitory in which regional meetings with other producer organizations are
held. In addition, RECA’s role in the community has not been confined entirely to
agricultural production. Nuns of the Catholic church who run a homeopathic pharmacy in
Nova California regularily train RECA health agents in basic first aid and medicinal plant use
(Campbell 1994). So while RECA started out with a community-based agroforestry project,
the organization has evolved to represent and address the social and economic needs of the
people in and around Nova California, and for better or worse, the organization has become
quite politicized.
Participating farmers entered RECA through regionally-based groups, usually defined
by the feeder road the producers lived on. At the time of this study, there were a total of 15
groups, each led by an individual who acted as a liaison between the regional group and the
RECA organization by representing the group at monthly RECA coordinators’ meetings. In
each group there was also a “técnico”, a farmer provided with technical training, sponsored

15
by RECA, whose role was to assist members with production related problems, and
introduce new species to piant, such as leguminous cover crops or native timber trees for new
plantations. At least four of the fifteen groups were led by women, although Campbell
(1994) notes that despite the project’s seemingly democratic organization, women’s voices
are hard to hear. Twice annually, all members of RECA were assembled for a three to five
day period, during which they reported on the health and productivity of their farms, and
discussed issues regarding new plantations, production, transport, processing and marketing.
These assemblies also provide opportunities for research and extension organizations, as well
as for other producer groups in the region to meet with RECA farmers and discuss problems
related to agroforest management and product marketing. RECA has also attempted to
provide farmers with greater access to information and technical assistance. During the
period this study took place, two Brazilian non-government organizations (Projeto SOS and
Projeto Tapiri) offered week long environmental education courses to RECA farmers, and
RECA has formed partnerships with extension and research organizations such as PESACRE
(Grupo de Pesquisa e Extensao em Sistemas Agroflorestais do Aeré) and EMBRAPA
(Empresa Brasileira de Pesquisa Agropecuária).
Agroforest Establishment
The specific agroforestry configuration under study was planted on over 300 farms
on approximately 450 ha in 1989 and 1990 (Leite unpublished). The system is two-tiered,
dominated by an upper canopy of peach palm (Baclris gasipaes Kunth) and Brazil nut
(Bertholletia excelsa Humb. & Bonpl.) with a middle canopy formed by cupuassu
(Theobroma grandiflonim (Willdenow ex Sprengel) Schumann). The agroforest’s principal

16
products include cupuassu pulp, peach palm fruit and seed, and heart-of-palm, all of which
are consumed domestically as well as marketed regionally.
Typically, these agroforests were established by cutting and burning native forest
vegetation and interplanting one-year-old peach palm and cupuassu seedlings in rows at a
spacing of 4 x 7 m. Some agroforestry systems were also planted on old fallow fields
(capoeira). In every third row, Brazil nut was planted alternately with cupuassu to complete
a stocking density of approximately 370 trees ha'1, the majority of which are cupuassu and
peach palm (190 and 150 trees ha'1, respectively). The seedlings were raised on farm from
seeds collected from marketed fruit and surrounding forest; thus there exists considerable
genetic heterogeneity within each of the agroforests’ three perennial components. At the time
of establishment, enough farmyard manure to fill a “milk can” (approximately 250 ml, equal
to about 0.5 and 0.15 kg ha'1 N and P, respectively) was added to each seedling’s planting
hole. During the first year, annual crops (maize, beans, rice, or cassava) were cultivated
between the agroforest rows to offset the initial expense of establishing the perennial system
(Wallace 1994). Thereafter, understory regrowth of native vegetation was cut twice annually
and left to decompose on the agroforest floor. In some systems leguminous cover crops
(Macuna cochichinensis and Pueraria phaseoloides) were planted in agroforest rows for
nitrogen fixation and weed control. However, due to the increased risk of fire hazard and the
fact that the vines began growing over the top of the tree canopies, the legumes were
eradicated from the agroforests three years after establishment. Since establishment, grazing
livestock were excluded from the agroforest, and no other amendments of any kind were
applied to the system.

17
Agroforest Tree Species
Peach Palm
The origin of peach palm (Bactris gasipaes Kunth, Palmae) is somewhat
controversial. Historically, peach palm, or “pupunha” in Portuguese, was grown throughout
tropical America by many pre-Colombian Amerindian communities for food, fiber, and
medicine. Clement (1988) cites the great genetic diversity in peach palm populations of
western Amazonia as evidence that the species originated in this region, although Mora Urpi
(1992) suggests that multiple domestication events may have taken place.
At present, two products are harvested from peach palm grown in multi-species
commercial plantation agroforests; an energy- and nutrient-rich fruit that is consumed locally,
and the tender unexpanded leaves produced by the apical meristem of young offshoots,
referred to as palm heart. The latter product is potentially more lucrative as it can be sold
both throughout Brazil and abroad as a high-priced delicacy. Peach palm is multi-stemmed,
producing as many as 12 offshoots that arise from axillary buds encircling the main stem.
This feature, in particular, has made it very popular for “sustainable” palm heart production
because unlike single-stemmed palms from which palm heart is also harvested (Euterpe spp.),
peach palm offshoots can be removed without killing the whole plant. Stems of peach palm
may attain up to 24 meters in height, but the species' relatively small crown, typically
composed of 10 to 30 pinnate leaves (Arkcoll 1990, Mora-Urpi et al. 1997), minimizes
shading of other agroforest components. An undesirable characteristic of the palm is that
stem intemodes are frequently covered with long spines which present a hazard to livestock
and complicate fruit harvest for farmers. Peach palm root growth is generally concentrated

18
in the top 20 cm of soil, although a superficial mat of adventitious roots often develops at the
stem base and may extend up to five meters from the trunk (Ferreira et al. 1980). As leaves
and fruit abscise from palm stems, decomposing organic matter from fallen litter accumulates
in the root mat. Vandermeer (1977) states that approximately 75% of peach palm roots are
located within the perimeter of the canopy, but Ferreira et al. (1995) observed absorptive
roots extending up to nine meters from the stem base. The palm is relatively productive in
well-drained Oxisols and Ultisois, tolerating up to 50% aluminum saturation, although studies
have shown that nutrient additions are necessary to sustain long-term productivity (Mora-
Urpi et al. 1997). Because P is generally limiting in tropical soils, some work has been
conducted to determine the importance of P availability and mycorrhizal associations to peach
palm development and productivity (St. John, 1988, Clement and Habte 1995). For example,
Habte and Clement (1994) demonstrated that P fertilization greatly increased seedling leaf
growth, biomass increment and overall vigor, and Ruiz (1991) found that peach palm
infection with vescibular-arbuscular mycorrhizae was negatively correlated with soil P
concentrations.
Flowering in peach palm begins between the ages of 3 and 5, and the palm may
produce annual crops for up to 50 years, although estimates for fruit production in nutrient-
poor Amazonian soils are much lower (i.e., 20 to 25 years, Clement pers.comm). The oily
fruit produced by the palm is highly perishable, and thus difficult to transport fresh to markets.
A beta-carotene-rich flour is made from dried fruit, employing the same on-farm processing
technique used for the fabrication of cassava flour, a traditional staple in Amazonian
households (Dibari pers. comm.). The fruit is also used for animal feed, and RECA farmers

19
have found it lucrative to sell peach palm seed to buyers interested in establishing heart-of-
palm plantations. Clement (1989) notes that commercial production of fruit and heart-of-
palm in the same system is not practical because the latter requires high density (4,000 plants
ha'1) monospecific plantations to be economically viable.
Cupuassu
Theobroma grandiflorum (Willdenow ex Sprengel) Schumann, Sterculiaceae, is one
of nine species in the same genus native to the Brazilian Amazon. Cupuassu (“cupuaqu’’ in
Portuguese) occurs naturally in forests of the eastern Brazilian states of Pará and Maranhao,
but its distribution has spread across the .Amazon Basin (Cabral Velho et al. 1990, Venturieri
1993). Like its relative, cacao {Theobroma cacao), it is a broad-leaf mesic species that grows
naturally in the understory of terra firme forests, tolerating both shade and nutrient-poor
soils. The species’ growth habit is pseudo apical, resulting in a relatively small-statured (5
to 15 m height) tree, with a plagiotropic canopy projecting outward, up to eight meters from
the trunk (Ribeiro 1992, Ventureiri 1993). Cupuassu is generally pest-resistant, although like
cacao, it is susceptible to witches’ broom (Crinipis perniciosa).
The large (12 to 25 cm length, 10 to 12 cm diameter) woody elliptical fruit pods
(loculicidal capsules) produced by cupuassu are harvested for the fragrant creamy pulp which
is used in desserts, candies, and drinks throughout Brazil (Cabral Velho et al. 1990). More
recently, methods have been developed to use fermented cupuassu seeds, much in the same
manner that cocoa beans are processed for chocolate, to make a confection known as
“cupulate” (Ribeiro de Nazaré et al. 1990, Wallace 1994). Cupuassu typically flowers at the
end of the dry season, with maximum fruit production occurring during the mid to late rainy

20
season. The species is known for its low fecundity; Ventureiri (1993) found that 3,500
flowers per tree were necessary to produce 15 fruit. Trees begin bearing fruit as early as three
years of age, and by year six or seven, an average tree produces between 12 and 15 fruits per
season. Peak fruit production, reported to be as great as 100 fruits per tree per year, occurs
between ages 10 and 20, but trees can continue to bear fruit for up to 30 years (Ribeiro
1992). The author has seen 50-year-old productive cupuassu trees growing in mesic habitats
on homesteads in eastern Amazona. To maintain plantation productivity, Calzavara (1980)
recommends a yearly application of 100 g fertilizer (15% ammonium sulfate, 50%
superphosphate, 15% potassium chlorate) per tree, broadcast on the soil surface just beneath
the canopy’s drip line.
Brazil Nut
A rare upper canopy emergent in Amazonian terra firme forests, Brazil nut, or
“castanha” in Portuguese, (Bertholletia excelsa Humb. & Bonpi.: Lecythidaceae) trees may
attain heights of 50 meters (Mori and Prance 1990). A mature tree has a straight, relatively
unbranched bole and small crown which makes it a favorable upper story agroforest
component. Taproot extension of Brazil nut trees growing in forests and pasture in eastern
Amazona has been observed 5 to 10 meters into the soil (Nepstadt et al. 1994). While the
tree grows naturally in the well-drained nutrient-poor soils underlying native forest
vegetation, Kainer et al. (1998) found that Brazil nut seedlings planted in shifting cultivation
plots, where light and nutrient availability were greater, grew more vigorously and had higher
foliar nutrient contents than those planted in forest gaps.

21
Most Brazil nuts are collected from wild trees growing in forests, however, the
species has more recently become a component of monospecific plantations and multi-species
agroforests in Amazonia, Although it may take 25 years for forest trees to reach maximum
production (estimated to be several hundred fruit per tree per year), trees grown in more
intensively-managed plantations may begin bearing fruit within eight years after establishment
(Mori and Prance 1990). In addition to being a food staple for forest dwelling communities,
Brazil nuts have become an important Amazonian cash crop, both sold for domestic
consumption and exponed abroad (Kainer et al. 1998). Despite its economic potential,
Brazil nut was typically a minor component in the commercial plantation agroforests
examined in this study.
Challenges Facing RECA
Since its establishment, RECA’s peach palm-cupuassu-Brazil nut agroforestry system
has been highly productive. The total harvest of cupuassu fruit from RECA agroforests was
reported to be 75 tons in 1994 and 120 tons in 1995 (Leite unpublished). Evidence of
greater economic prosperity for many RECA farmers is demonstrated throughout Nova
California, with an increased building of new homes with all-weather roofs, as well as satellite
dishes and diesel generators that are found even in some homes located on the more secluded
feeder roads. Many farmers also claim that the profits made through the sale of cupuassu
pulp, peach palm seeds, and heart-of-palm have allowed them to invest in other productive
endeavors on their farm, including small-scale cattle ranching. Nova California itself has
grown considerably, with several more markets, bars, and furniture builders, providing further
evidence of increased prosperity in the community. Also, RECA’s initial success has earned

22
attention, recognition and respect for the producers group from local research and extension
institutions who are eager to initiate on-farm studies with the organization to examine
everything from the use of leguminous cover crops and breeding of spineless peach palm
stems, to establishing dairy farms in the community. Visits from T V. crews, journalists and
reporters from southern Brazil were common during the time this study took place. The
group’s recognition has given them an advantage in applying for economic assistance from
other foreign NGO’s. although many argue that this has created a dependency on outside aid
which prevents the organization from becoming a model of economic and ecological
sustainability.
Moreover, impressively high yields on relatively poor soils has not spared the
organization from other socio-economic problems, the largest of which have thus far been
associated with product processing and marketing (Smith et al. 1997). One of the first such
difficulties arose with the unexpectedly high yield of peach palm fruit. Because it is highly
perishable, the fresh fruit must be transported and marketed very shortly after harvest, and
the local market for fruit is somewhat limited in its demand for the starchy fruit. As a result,
much of the peach palm fruit harvested spoils while awaiting transportation or is fed to pigs
for lack of a buyer. As previously mentioned, some RECA farmers are now making a flour
from boiled fruit, and attempts are being made to market this product for commercial use in
cereals, cakes and pasta (Dibari pers. comm.).
In addition to creating daily hardship in rural households, the lack of infrastructural
development and maintenance in the region surrounding Nova California has presented
obstacles for the transport, processing and marketing of RECA products. During the period

23
this study took place. RECA had record high production of cupuassu fruit. However,
because the market in nearby Rio Branco became quickly saturated with the fruit pulp during
peak cupuassu production months, the fruit pulp was frozen for sale later in the year when
pulp stocks had decreased and fruit prices increased. Because electricity is so unreliable in
Nova California. RECA had a diesel-fueled generator that provided power to the small freezer
in the organization’s local processing unit. However, extremely high cupuassu production
early in 1996 forced RECA to rent freezer space in Rio Branco to store 62 tons of pulp
(Smith et al. 1997). Renting the space increased the cost of processing and marketing the
product by RECA, so that the organization was short of funds to purchase unprocessed fruit
from local producers. Furthermore, the freezing and thawing of cupuassu pulp in RECA’s
freezers during power lapses lowered the quality of this product and made it less marketable
in urban areas. By the end of the season, many producers were furious with the organization
who either owed them money or had quit purchasing their fruit. The problem was
compounded by the fact that impassable roads during the rainy season made it difficult for the
drivers of RECA’s two vehicles to pick up fruit from more remotely-located farms. As a
result of transportation difficulties and RECA’s inability to purchase fruit brought on by the
unanticipated high cost of frozen pulp storage, a large portion of the 1996 harvest was lost.
The inability of producers to sell their products to RECA, or transport them to other markets,
created economic hardship for many of the less well-off households, and provoked a lot of
bitterness towards the organization. Many of the farmers that originally received money from
RECA to establish the agroforest have since left the organization, and some now work for
a new privately-owned foreign company (Agro-Amazonia) that moved into Nova California

24
in 1996 to produce and process fruit such as pineapples, palm heart, watermelon, and
cupuassu. Nor is it clear that many of the farmers currently benefiting from the membership
in the organization are truly committed to repaying the loans they received to establish the
system. The default on payments by many producers has increased financial stress for the
organization (Lopes, pers. comm ).
Smith et al. (1997) concluded that RECA is not a viable model for sustainable
agroforestry in Amazonia because of the organization’s inability to resolve processing and
marketing problems and chronic dependence on external financial aid. However, there is
evidence to suggest that RECA is learning from its early mistakes and slowly working out the
economic difficulties it faces, especially through collaboration with both non-governmental
and governmental institutions such as PESACRE and EMBRAPA. PESACRE, in particular,
has conducted short courses aimed at teaching farmers basic marketing principles and
choosing more marketable products to grow in the future (Haydu and Wallace 1997). The
Italian Aid agency, MLAL, has sent several volunteers to RECA to investigate ways to add
value to products through processing and decreased marketing costs. For example, RECA
is now working on producing jams and syrups from cupuassu pulp, which not only increases
the value of the pulp before it is marketed, but also decreases the costs of transporting and
storing frozen pulp. This will be an especially effective strategy if the cupuassu confections
can be marketed in sealed plastic bags to avoid the high processing and transporting costs
associated with glass containers. The toasted pupunha flour, as well as the chocolate
(cupulate) made from cupuassu beans also offer real possibilities to increase the return of
agroforest products to both farmers and the RECA organization. In addition, the MLAL

25
volunteer has worked with RECA to increase the standards of hygiene, quality and safety of
RECA products, and in particular, of canned heart-of-palm, which was one of the most
lucrative agroforest products produced by RECA because it is consumed throughout Brazil
and potentially exported abroad. Likewise, when Brazil nut begins to fruit, high marketing
potential also exists for the nuts, because they are already sold abroad from other areas in the
Amazon, and require relatively low-tech processing (Kainer 1997). Also, shortly after this
study’s field research was completed, the border dispute between Aeré and Rondónia ended
with the legal incorporation of Nova California into the state of Rondónia. State membership
will likely entitle Nova California to greater political and economic support, and
infrastructural improvements made by the government of Rondónia should diminish some of
RECA’s processing and marketing dilemmas. Finally, from the standpoint of biological
sustainability, RECA farmers have been very open to outside researchers attempting to
address soil fertility problems. Researchers from EMBRAPA and INPA continue to work
with individual farmers to determine which leguminous cover crops are most efficiently
managed by farmers while increasing soil nitrogen availability to crop plants. It is hoped that
future courses on product processing and marketing, as well as on agroecosystem
management, will be conducted in RECA’s new auditorium in collaboration with producer
groups from all over Amazonia so that more of the region’s rural families will benefit from
continued education and self-empowerment that will lead to more economically and
ecologically viable agricultural systems and healthier, more secure livelihoods. In this way,
RECA would indeed provide a model if it is able to confront challenges that face land
managers throughout Amazonia, and persevere to overcome these obstacles and assist others.

CHAPTER 3
APPLYING A PARTICIPATORY APPROACH
TO AGROECOLOGICAL RESEARCH
Introduction
Over the past two decades, “on-farm research”, “farmer participation”, and “rural
people’s knowledge” have become expected components of much agroforestry and
agroecological research, and a wide range of innovative and non-traditional research tools
have been developed to facilitate and strengthen the participatory process (e.g., Mascarenhas
1992, Feldstein and Jiggens 1994). In fact, the process of farmer participation has provided
a new paradigm for the development of more sustainable agricultural practices in resource-
poor risk-prone areas, as well as a tool of “empowerment” through which rural people may
achieve more secure livelihoods (Chambers et al. 1989, Rocheleau 1991).
Among the reasons for including the “recipients" or "target group" of technological
developments as informers in the investigative process is the ability to gain a greater
understanding of the interests, priorities and problems faced by user groups. These factors,
as well as household and community level socio-economic constraints (i.e., financial,
practical, educational, motivational, traditional, cultural, political), are critical considerations
in the development of appropriate agricultural technologies and their potential for future
adoption (Beer 1991). User participation thus has the potential to make research results more
practically applicable.
26

27
Moreover, the participatory process itself offers opportunities for both land managers
and researchers to interact collaboratively in the development and application of more
sustainable management techniques. The extent to which local people are encouraged to
participate in on-farm research varies considerably, from researcher-designed and -managed
trials that address problems identified, in part, by local land-users, to researcher study of trials
designed and managed by land-users (Rocheleau 1994). A mutually respectful and trusting
relationship fostered by the participatory process increases the likelihood that researchers will
benefit from the specific experience-based knowledge provided by farmers about the
landscape and land-use strategies that have succeeded or failed in the past (Scherr 1991).
Local participants may gain an enriched understanding of the processes controlling
agroecosvstem productivity and health, as well as how such processes are maintained or
degraded through manipulation. This knowledge may enable them to manage their land more
sustainably.
Studies have shown that participation in agroecological research encourages farmers
to improve land management practices through continued experimentation on their own. For
example, Ruddell and Beingolea (1995) found that training farmers to conduct their own
research was a much more effective strategy for raising food security than attempting to
provide a "technology package” that would not serve the diverse ecological micro-climatic
and socio-economic conditions faced by Andean potato farmers. Kainer (1997) found
participation in the research process helped rubber tapper families in the Brazilian Amazon
recognize their strategic position and power when negotiating with NGO’s and other
conservation and research organizations.

28
There are critics who charge that “empowering” local people through participation
is “naive populism” because it implies that “powerful outsiders” must help “powerless
insiders” (Thompson and Scoones 1994). Several authors have pointed out that a “lack of
understanding” may not dictate how resource-poor farmers manage their land. Rather, a
complex set of personal socio-economic and political circumstances, often hidden to
outsiders, operates to constrain management choices (Chambers 1983, Thrupp 1989). Thus,
while useful, an increased understanding of agroecological processes may not necessarily have
an immediate impact on management decisions. Nevertheless, both researcher and farmer
offer distinct sets of experience and tools, derived from different cultural backgrounds and
traditions of knowledge creation, none of which should be ignored when developing,
adapting, and applying more sustainable land-use practices.
A participatory approach was applied in this agroforestry research to (a) gain a greater
understanding about the role of perennial crops in Amazonian farming systems, and household
constraints to modifying agroforest management strategies, (b) stimulate household and
community-level discussions about the role of organic matter and nutrient cycling in
controlling agroecosystem productivity, (c ) elicit realistic management strategies from
farmers to enhance and sustain productivity, and in doing so, provide results useful to the
region’s fanners. In this study, the participatory processes of dialogue and exchange among
researchers and farmers were facilitated through two principal channels; (a) focus group
discussions held during organized meetings and presentations, and (b) informal interviews
or “conversations” held with members of 10 individual households during field visits.

29
Methods
Research Initiation
RECA farmers participated during the formulation of research objectives, study site
selection, data collection, and presentation and interpretation of preliminary results. The
design of trials, analysis of data, and statistical interpretation of results were the responsibility
of the researcher. The presentation of final results to farmers is the last step awaiting
completion, as discussed later in this chapter. Another participatory dimension to the research
was close collaboration with local university, government, and non-governmental
professionals. Collaborative ties were made with local Brazilian agencies, such as PESACRE
(Pesquisa e Extensáo dos Sistemas Agroflorestais no Aeré), a non-governmental organization
(NGO) working with colonist farmers on agroecological problems, EMBRAPA (Empresa
Brasileira de Pesquisa Agropecuária), a national agronomic research institution, and SOS
Amazonia, a group of environmental educators. PESACRE, in particular, provided crucial
logistical assistance and a field assistant from the local university who was trained in
agroecological research methodologies during the research period.
As mentioned in the previous chapter, the original “RECA” agroforestry system was
both conceptualized and planted on over 200 farms in the late 1980's by the producers
themselves, although the group did receive some technical advice from local research
institutions and NGOs. By the time I conducted a six-week pilot study in Aeré in 1994, the
RECA project was already well known throughout the western Amazon, and several extended
visits to RECA farms left me with two questions: how could these agroforestry systems be
so productive in seemingly nutrient-poor soils, and how long could such productivity last

30
without more intensive management? Conversations with host families and members of
RECA administration included discussions about their experiences with this agroforestry
system, as well as their concerns regarding the agroforest’s health and productivity, and the
marketing of its products. From these conversations and additional feedback received from
PESACRE, I formulated preliminary study objectives to present to RECA during one of their
official assembly meetings before returning to the U.S. to write a research proposal.
Including RECA farmers in the formulation of research objectives as part of the
participatory process necessitated that I change my research plan entirely from that previously
delineated in the original pilot study proposal. The basic objective agreed upon between
myself and RECA farmers was that I would develop a project that would examine processes
controlling productivity in the system in relation to its management by households, so that
research results could be presented to the group in the form of recommendations for
sustaining and enhancing agroforest productivity. Moreover, after the proposal had been
developed, I attempted to meet the concerns of local farmers by adapting the root ingrowth
bioassay to include a study of root competition (Chapter 4). RECA farmers were concerned
about what they perceived to be “aggressive” root competition by peach palm, as evidenced
by the species’ thick shallow network of roots that extended well beneath the canopies of
cupuassu. This was especially alarming for farmers because cupuassu was the most
economically important component of the agroforest at that time. Maintaining soil fertility
was also a concern for them, as farmers were committed to using only organic soil
amendments (the actual use of which appeared to be quite limited), primarily because
chemical inputs were expensive and not easily procured in this region. Other issues outside

31
my realm of training discussed by the organization and households included pest problems,
especially witches’ broom, which had previously wiped out cacao plantations, and the
transport, processing and marketing of agroforest products.
Within a year of my initial visit, a simplified version of the research proposal approved
by my advisory committee was translated into Portuguese and sent to PESACRE and RECA
leaders for review. PESACRE determined that the research would fit within their
professional priorities and contacted the Federal University of Acre (UFAC) to find a an
agronomy student in need of a supervised field research project to meet graduation
requirements. The student was paid to work as a field assistant with the understanding that
I would train her to conduct agroforestry research and guide her through her senior thesis
project, with the prospect of her future employment with PESACRE.
Presentations and Group Discussions
Nutrient budget study. Prior to initiating the biological studies, as well during the field
data collection period, the research plan was presented to RECA farmers through a series of
meetings arranged by leaders of the producers’ group. A summary of group presentations
made to RECA and other local organizations is provided in Table 3-1.
The phosphorus (P) and nitrogen (N) budget study was first introduced during an
ecology course given by SOS Amazonia, an interdisciplinary group ofBrazilian environmental
educators. Following an SOS-led session on soil fertility, I used a “bank account” analogy
to explain how the system, or “agroforestry account” is comprised of different reserves (i.e.,
soil, above- and below-ground biomass, litterfall, microorganisms, etc), and how this “capital”
is transferred in and out of the account with fertilization, mulching, harvesting, leaching and

32
other processes that add or remove nutrients from the system. We then briefly discussed how
management practices may contribute to conserving and building nutrient capital, increasing
the likelihood that the agroforestry system would be productive in the future.
After the basic study methods and participants’ responsibilities were outlined,
recommendations by farmers were solicited and recorded on a flip chart. Their requests
included that (a) the research involve several farms, (b) I attend official RECA group
meetings to become acquainted with farmers and update them on the study’s progress, and
(c) a Brazilian be trained to continue this type of research after my departure. Following the
discussion, several farmers volunteered their agroforestry plots for the study, and it was
agreed that the final site selection would be made after visiting the farms.
Root ingrowth and soil studies. In addition to identifying P limitations to agroforest
productivity, the root ingrowth bioassay was also designed to address the farmers’ concerns
about peach palm root competition by comparing the growth of roots by this and other
agroforest components into ingrowth cores buried in the soil for a specified period of time
(Chapter 4). Soil samples from agroforestry systems and adjacent native forest on eight
farms were to be analyzed to determine how the agroforest soils had changed chemically since
conversion from native forest. These studies were introduced at RECA’s semi-annual
assembly (August 1995) in which all members ordinarily meet to discuss problems they are
having on-farm and issues facing RECA as an organization. A presentation on the basic

Table 3-1. Summary of presentations and discussion groups conducted as part of participatory research process to study nutrient and fine
root dynamics in the RECA agroforestry system (AFS). Number of participants in parentheses Translated from Portuguese
Date Topic and Objectives Participants Methodologies Outputs
8/19/95
Nutrient budget proposal
-Discuss nutrient cycling
-Present proposed study
-Solicit feedback & volunteers
-RECA leaders
-Members
attending SOS
course (± 35)
-Flip chart drawing of
AFS nutrient cycle
-List of study objectives
-Bank analogy
-Introduced concepts
of nutrient cycling
-Farmers’ criteria
-Volunteer study sites
9/16/95
Root study proposal
-Discuss root competition
-Present proposed study
-Solicit feedback & volunteers
-RECA members
attending semi¬
annual assembly
(70+)
-Flip chart drawings of
root competition
-Ingrowth core used
-Group discussion
-Group discussion of
root competition,
-Farmers’ criteria
-Volunteer study sites,
2/24/96
Root study update
-Update farmers on progress
-Discuss hypotheses
-Discuss participants’ field observations
RECA members
attending semi¬
annual assembly
(60+)
-Demonstration of actual
samples (ingrowth cores
with roots)
-Group discussion
-Increased
understanding of root
study by farmers,
demonstrated by
questions
8/23/96
Root & soil study update
-Present preliminary data
-Discuss possible interpretations of
preliminary results
RECA members
attending semi¬
annual assembly
(60+)
-Simple bar graphs on
flip chart paper
-Sample soil analysis
sheet on flip chart paper
-Updated and received
feedback from farmers
on root study results

Table 3-1--continued.
Date
9/18/96
9/20/96
9/22/96
and
9/27/96
11/4/96
Topic and Objectives
AFS nutrient cycling
-Present preliminary data on P&N
harvest removal, soil & plant stocks
-Discuss current management
-Discuss strategies to minimize soil
degradation & enhance nutrient cycling
-Generate list of management options
Nutrient cycling in RECA AFS
-Present methods & preliminary results
to local research institution
-Solicit feedback on results
-Encourage future research
collaborations with RECA
AFS Nutrient Cycling (SOS course)
-Present nutrient cycling & removal
with harvest using preliminary data
-Discuss current land management &
effect on nutrient cycles & soil fertility
-Determine viable management options
to maintain productivity
Nutrient cycling in RECA AFS
-Present methods & preliminary results
to PESACRE & other local NGO’s
-Discuss implications for AFS
management and productivity
Participants
RECA
reforestation team
(Equipe de
plantagao, 17)
EMBRAPA
Rio Branco
(±50)
Farmers in RECA
producers’
groups:
attending SOS
Environmental
Education course
(±25 each session)
PESACRE
UFAC students
EMATER agents
Methodologies
Outputs
-Colored drawings on
flipcharts of AFS with
approximate nutrient
stocks in soil, biomass
and harvest
-Flip chart list
-Slides of methodology
-Overhead transparencies
with results
-Game: Banco do Brasil
(felt board and cut outs)
-Enlarged photo series
(forest, bum, planting,
mature AFS)
-Small group discussions
-Flip chart lists
-Slides & transparencies
with methods & results
-Banco do Brasil game
-List of farmer options
for AFS management
-Reintroduce nutrient
cycling in RECA AFS
-Farmers list practices
affecting nutrient cycle
-Listed options for
reducing soil
degradation
-Greater awareness by
research institutions of
the potential for on-
farm research with
RECA
-Farmers discuss
nutrient cycling in
diverse land-uses
-Small groups generate
list of management
options

35
concepts of root competition generated an animated discussion among farmers who had
observed the “aggressive roots” of peach palm in their own plantations, and were concerned
that it might eventually dominate, or even “kill” other components of the system. Farmers
were also interested in having their soil analyzed, as long as they also received the results.
After discussing criteria for farm site selection and participation in the study, the producers
themselves selected eight farm sites from among those volunteered by individuals.
Implementation of field studies. Once the field studies were underway, farmers were
updated on the progress of the research during the next two official assembly meetings (Table
3-1). These brief presentations simply served to keep RECA members not directly
participating in the field studies informed on the status of the research and foster interest in
the investigative process. Attending the two to three day meetings also allowed me to
become better acquained with RECA farmers and learn a great deal more about the
organization, and the challenging issues facing it and individual households. During this
period, however, most of the contact I had with farmers occurred through conversations with
household members held during my extended stays with families participating in the field
studies (discussed below).
Preliminary data generated from the concluded root and soil field studies, as well as
the ongoing P and N budget research, provided the basis for the nutrient cycling presentations
and discussion groups held in September and November, 1996. As indicated in Table 3-1,
a variety of techniques and tools were used to present the data and stimulate discussion. An
example is shown here for the nutrient cycling modules of the SOS Ecology courses (Table
3-2). These two sessions, along with an earlier session with RECA’s reforestation team,

36
culminated with a list of management options for maintaining soil fertility generated by
participants.
Alternative (non-lecture) training techniques, such as games and small group
discussions, were employed to create a non-threatening and engaging environment, especially
as education levels varied considerably among RECA farmers. The basic objective of the
Banco do Brasil (official state bank) game used during the SOS courses was to demonstrate
how nutrients were transferred from different “accounts” in the agroforestry system, or
removed entirely with harvest. For example, when the cut-out of a peach palm crown was
added to the system depicted on the felt board, six Brazilian dollars (reais) were moved from
the soil account in the bank to the plant biomass account (the monetary value being based on
preliminary data, e.g., one Brazilian dollar equals one kg P/ha). When peach palm fruit was
added to the tree, its value was moved from the soil to the plant biomass account. When the
fruit was harvested, this amount was withdrawn from the bank. After a demonstration,
participants were asked in which account to place nutrients (or remove nutrients from) as
each component was added to or moved around in the agroforestry system. The felt board
and bank were also used to demonstrate changes in N cycling dynamics when understory
weeds were cut down and left to decompose, or when leguminous shrubs were included in
the system to add nitrogen through fixation of atmospheric N2. During both sessions, the
game encouraged a discussion about the importance of organic matter as a source of plant
nutrients, and management practices that favor organic matter build-up in the agroforestry
system.

37
Table 3-2. Lesson plan for participatory research activities, nutrient cycling module for SOS
environmental education course given to RECA farmers on September 22 and 27, 1996.
Total session time: 3 hours. Translated from Portuguese.
Session Objectives
1
Demonstrate the concept of nutrient cycling and its role in maintaining agro¬
ecosystem productivity to RECA producers using data from RECA
agroforestry system
2
Identify and discuss current land management practices of RECA farmers that
potentially benefit or degrade nutrient cycling processes
3
Develop a list of practical land management options that may help maintain soil
fertility and future agroforestry system productivity
Time
Method
Materials
20 min
Interactive lecture (emphasis on
questions to farmers) to define
concepts of nutrient cycling
-Flip chart with questions and room to list
answers (what is a nutrient cycle, why
important to land managers?, etc.)
40 min
Game: Banco do Brasil (uses
bank analogy to describe
nutrient inputs, outputs &
transfers)
-2 lxl m pieces of felt
cardboard cut-outs of AFS components
(trunks, leaves, fruit, roots, soil, legumes)
-Paper cut-out of bank with 3 accounts
(soil, fallen litter, live biomass in plants)
-Felt cut-outs of money (different values)
-Chart with “monetary (kg/ha) values for
AFS components based upon data
15 min
Break
40 min
Group Discussion: Impact of
Agricultural Practices on
Nutrient Cycling
-Series of enlarged color (Xerox) photo
depicting a) native forest, b) cleared &
burned land, c) newly planted seedlings on
recently burned land d) pupunha
monoculture
20 min
Small Groups: discuss AFS
management & adaptations to
enhance nutrient cycling
-5 groups, each given one photo to
stimulate discussion and flip chart & pen
to list possible adaptations
30 min
Group summary & evaluation
of proposed practices & effects
on nutrient cycling & AFS
productivity
-Flip chart table to be filled out as by
entire group with four columns:
Management practice; Objective; Benefit
or degrade nutrient cycle; Why?

38
Another important objective of the participatory process was to familiarize local
research and extension organizations with the on-farm studies underway in Nova California,
and facilitate future investigative collaborations with RECA farmers. For this reason,
research methodology, as well as preliminary study results, were presented to PESACRE and
EMBRAPA in Rio Branco (Table 3-1), as well as to the Soils Department at the University
of Vigosa in the south central Brazilian state of Minas Gerais. Included in the results
presented to these groups were the flip chart lists of management options generated by RECA
farmers.
Household Interviews
Root ingrowth and soil studies. Informal interviews, or conversations, were held with
both men and women of the eight families participating in the root ingrowth and soil studies
regarding the role of agroforestry in a household’s production strategy. Current agroforest
management practices, as well as constraints to and opportunities for modifying management
were also discussed. These conversations took place during three two-dav visits with each
family. Previous visits to these farms prior to initiating the study had fostered a good working
relationship with each family. The actual installation of the root ingrowth study on each farm
required about a day with the help of family members. To encourage a “learning”
environment, the study objectives were reviewed and participants were asked to make
predictions about the results based upon their previous experience with the agroforestry
system.
The root ingrowth core bioassay methodology is relatively straightforward (Chapter
4), andparticipants appeared to understand it conceptually, as demonstrated by their questions

39
and predictions. Conversations with other family members occurred during meals, farm
walks, and other ‘leisure periods”. Observation of farm and household activities provided
additional insight into agroforest and overall farm management. The families were visited a
second time when ingrowth cores were removed from the soil, and the results from soil
analyses were returned to each family on the third visit. The latter visit was used to discuss
soil fertility and agroforest management. The soil analysis “sheet” (Table 3-3) was modeled
somewhat after the form given to farmers by EMBRAPA. Although the language used was
rather technical, the sheet was quite useful in initiating discussions about soil acidity,
nutrients, and the potential use of leguminous cover crops, fertilizer and organic residues to
improve soil quality.
P and N budget study. Frequent (often daily) contact with the families participating
in the nutrient budget study provided an opportunity for in-depth conversations regarding
constraints to agroforest management and production, as well as continual observation of
farm and household activities. While the nutrient cycling study was installed on only one site,
the farm site itself was owned by one family who hired another family to live on the property
and manage it, and a close relationship with both households provided considerable insight
into differing perceptions of agroforest productivity and sustainability. Because it was
impossible for me to be present every time fruit or palm heart was harvested from the system,
family members recorded the weight of fruit removed from the study plots, and collected
rainfall samples immediately after storms.

Table 3-3. Sample soil analysis sheet given to farmers participating in root ingrowth bioassay and studies
after completion of analysis collected from their farms. Analyses performed included pH, % organic
University of Florida - The RECA Project
Soil Analyses 0-20 cm depth (November 1995)
Property of Sr. Aluizio e Sra. Carmelita Gongalves, Group BR
Your soil
agroforest
mean
Your soil
native forest
mean
PH
4.9
4.9
4.4
4.3
Organic matter (%)
1.4
2.0
1.7
2.0
Ca
189
350
31
102
Mg
41
61
35
42
K
26
35
26
36
A1
179
267
196
310
Fe
39
32
32
49
Na
3.5
4.7
2.2
3 0
P
1.4
1.1
1.6
1.5
P total
383
410
352
360
N total
1,217
1,690
943
1,599
mg/kg = ppm

41
Return of Final Results
As mentioned earlier, the final step of returning the final results to RECA and
PESACRE is awaiting completion. That it will have taken two years from the time I left Aeré
to return the results is not entirely satisfactory, and this may represent one drawback of
participatory research, at least at the doctoral level. The lag time between process and
product underscores, once again, the need to make the process count. Currently, I am
planning, in collaboration with PESACRE and RECA, a course to be conducted in Aeré in
on “Nutrient Cycling and Agroecosystem Sustainability”. One of the objectives of this course
will be to present the final research results to RECA, as well as review and evaluate the
research process. Included in the final results will be the lists of management options
generated by the participants themselves, as well as actual data and interpretation of the field
studies. Hopefully this will provide a forum in which to discuss which practices are actually
applied in the field and by whom. Field visits would help identify how both management
practices and the agroforestry system itself have evolved since the research was conducted.
The final research results will be discussed in relation to past and present agroforest
management. Management options recognized by farmers as immediately feasible will be
reviewed. Because of their importance to sustained production (Chapters 4-6), practices that
may require more resources and training, such as widespread planting and regular pruning of
leguminous cover crops, and seasonal directed application of soil amendments, will also be
discussed. A review of the research process will provide an opportunity to discuss basic
research methods and their application by farmers as outlined earlier in this chapter.

42
We will present data generated from the field research in an extension pamphlet that
will be translated into Portuguese and disseminated by PESACRE. The focus of the
extension brochure will be how nutrient cycles of tree-based agroecosystems can be managed
to maximize their potential for sustained productivity. In addition to offering information and
management recommendations to farmers, the pamphlet may also provide a framework for
NGO’s, such as PESACRE and SOS Amazonia, to use when conducting environmental
education courses for other rural producers’ groups in Aeré. PESACRE has also indicated
that additional collaborative efforts to develop an environmental education program could
provide an important last step in the participatory process.
The Participatory Process: Lessons Learned
The Benefits of Participation
Undoubtedly, the research benefitted directly from the participatory process. The
open discussions held with families and focus groups, engendered, in part, by the trust built
as a result of encouraging genuine multi-lateral exchange, revealed a lot of information that
that might not have otherwise been apparent to outside researchers The role of perennial
crops in colonist households was clarified, and constraints to and opportunities for improving
agroforest management were identified. Extremely important to this process was the fact
that RECA was well organized and held regular meetings in which my participatory activities
could be integrated. As a result, RECA farmers remained aware of and interested in the
investigative process and the results it would potentially render, as demonstrated by their
thoughtful questions, observations, recommendations and continued willingness to participate
throughout the field research period.

43
The management recommendation lists generated by different discussion groups
(discussed below) represent the most tangible output of the process itself. The process might
have been much more limited had I not had a formal venue in which to conduct the
presentations. The real test of the participatory process lies in the extent to which
management recommendations generated by farmers are actually applied, both now and in the
future. Hopefully, the official fora provided by organized group discussions helped stimulate
on-going dialogue among RECA farmers and other research and extension institutions about
sustained production, ecological processes, such as nutrient cycling, and farmer management.
Further evidence to suggest that farmers benefited from the process was the fact that
several individuals approached me to help them design their own on-farm research.
Experimentation among RECA farmers is nothing new. For example, many farmers had
already conducted “informal” on-farm research with different legumes species, and I
encouraged these producers to share their results with other families, as well as with
EMBRAPA in Rio Branco, whose researchers were in the process of initiating “new” studies
of legumes in agroforest understories on farms surrounding Nova California.
Although it is important that producers believe in the validity of their own research,
such farmer-initiated research could also benefit from training by professional researchers.
For this reason, a short course designed for farmers on “basic field research methods”,
conducted in collaboration with organizations such as PESACRE and EMBRAPA, may be
an extremely effective way to improve agroecosystem management. Such a course would
provide an opportunity to discuss (a) the valuable experience farmers have gained through
experimentation on their own, as well as the strategies they employ, (b) differences farmers

44
may have noted between their research and that conducted by trained scientists, and (c ) the
pros and cons to different investigative approaches. We could also discuss why controls and
replication are used in scientific research, and how they might use these “tools” to enhance
their own experimentation, if they are not already doing so. Grassroots developmental
organizations, such as World Neighbors, have successfully taught indigenous rural people to
use mathematics and statistical analyses in the design and interpretation of on-farm research
(Ruddell and Beingolea 1995). How the results of on-farm research can be shared (both
formally and informally) with fellow farmers, researchers, and extensionists would also be a
useful topic for discussion. Such a course could be included in an environmental education
program for rural producers conducted by NGO’s such as PESACRE.
The Challenges of Participation
There is a lot to be learned from attempting to combine community participation and
doctoral field research. Although definitely rewarding, it added responsibilities, as well as
risks, to the research process. Initially I was determined to present “scientific” research to
farmers as simply as a series of steps, much like planting and harvesting a crop. In the end,
there were many “steps” that I found difficult to explain to participants, or for which it was
difficult to create a situation that allowed participants to arrive at a better understanding of
the process on their own. For example, while I believed the root ingrowth bioassay would
provide a relatively easy-to-understand, yet scientifically-sound, means to assess root
competition among species and phosphorus deficiencies to plant growth in the field, the
method presented a few problems. For one thing, root growth in natural conditions is
tremendously variable, and although the study was designed to accommodate variability

45
across farms, it appeared that farmers made up their mind about study results based upon
what they observed in their own field, and from conversations with other farmers. For
example, when farmers saw more peach palm roots protruding from unwashed, unseparated
ingrowth cores, they concluded that peach palm was, as they predicted, an aggressive
competitor. At this point it was difficult, and even questionable, to encourage participants
to withhold judgement on the preliminary results until a log transformation and analysis of
variance had been performed on the total length of roots found in cores (Chapter 4). This is
part of the process they did not participate in, and all that could be done was encourage
discussion among participants about what they were seeing as we removed the ingrowth cores
from the soil. Potentially, this presents a dilemma, because it is the researcher’s responsibility
that study results are not erroneously interpreted, but one cannot resort to the approach:
“take my word for it, this is the way it is” if one is to maintain a participatory process. In this
case, peach palm root growth was greater than that of cupuassu in cores buried in agroforest
alleys, supporting the farmers’ hypothesis. However, in cores bured in agroforest rows,
beneath the dripline of the cupuassu canopy, there was no statistically significant difference
in root growth between the two tree species. Moreover, when it came to assessing
phosphorus limitations using the ingrowth cores, the data were not easily interpreted, even
after statistical analyses were performed, and the results pointed out some methodological
weaknesses of the root ingrowth bioassay (Chapter 4). Similar situations are not uncommon
in many fields of research; thus, it is an issue that must be addressed both prior to research
initiation and throughout the entire participatory process. Perhaps it was more problematic
in this study because of the type of agroecological research conducted, which concentrated

46
on biological processes, and not technology creation or evaluation. For example, in many
'‘on-farm trials”, farmers may test fertilizer applications, genetic varieties (e.g. Hildebrand and
Poey 1985) or even planting locations (Kainer et al. 1998). From these types of studies,
farmers can “pick” the technology which performs the best under the specific environmental
and socio-economic conditions they face. In the present study, there was no technology
tested, rather, farmers were asked to evaluate their own practices in relation to its effect on
a process, so it was important that they understand the process. A frank discussion at the
outset about the scientific method, and and how it is met through the research objectives, may
facilitate a better understanding among participants about the limits of particular studies in
addressing specific questions.
This also points out the need for careful selection and execution of research methods;
however this is not always possible in more remote resource-limited areas, and could
therefore preclude research in regions that need it the most. Rocheleau (1991) notes that we
can improve our capabilities for participatory research if we “abandon fixed packages of
research methodology and broaden our horizons to include a wide variety of principles,
methods and other peoples’ field experience”. Such an approach does not necessarily allow
for controlled conditions, nor the use of tools that produce predictable outcomes. This
demonstrates the delicate balance between remaining faithful to the scientific method and
open to new constructs of knowledge creation.
Finally, participatory research takes a lot of energy and concentration to ensure that
the process is continually beneficial, and not exploitative, for all parties involved. I had to
be on guard constantly so as not to let my personal research anxieties prevent me from

47
hearing what the farmers had to say. I remember one day in particular when I was appalled
to realize that I had been so concerned with the difficult logistics involved with field work that
I had not concentrated enough on my interaction with the farmers. One must continually ask
oneself “are participants really gaining from the process, or just supplying labor, land or
lunch?”.
Information Gained Using a Participatory Approach
The Role of Agroforests in RECA Households
From interviews with only 10 out of 300 RECA households, it is not possible to
generalize about the role of agroforestry in RECA farms. The households interviewed had
very diverse cultural and socio-economic backgrounds, and their reasons for adopting and
maintaining agroforestry as part of their production strategy also differed. However, three
common themes emerged from these interviews about the role of the cupuassu-peach palm-
Brazil nut agroforestry system in household production strategies. In general, an increase
in farm household income from the sale of agroforest products
a. allowed poor farmers, who might otherwise have abandoned their land or sold it to
ranchers, to continue fanning profitably on the same land,
b. provided farm families with the means to purchase (i) household durable goods (such
as furniture, diesel generators and satellite dishes), (ii) labor to help with farm
activities, and (iii) livestock, especially cattle,
c. motivated farmers to open new areas of forest each year for perennial crop
monocultures (such as coffee and palm heart), because they anticipated a future drop

48
in agroforest productivity and/or change in the marketability of crops such as
cupuassu fruit.
These points serve as hypotheses to be tested with rigorous surveys. They also offer
some insight into the role of agroforestry system adoption in decreasing farm-level forest
clearing. Although several families claimed that agroforestry system adoption allowed them
to clear less native forest because they were no longer obliged to produce annual crops for
sale, the third point suggests that many RECA farmers are practicing a “shifting cultivation”
of perennial crops, that is, continual clearance of forestland for the establishment of perennial
crops in anticipation that the older systems will lose productivity in the near future. In fact,
when questioned about the period of time they anticipated the first cupuassu-peach palm-
Brazil nut systems to remain productive, most believed that cupuassu production would cease
within eight to ten years of planting, and many households had already established younger
monocultural plantations to avoid root competition. This same attitude was demonstrated by
the recommendations made by discussion group participants from the RECA reforestation
team to “intensify production of one species by planting monocultures” (Table 3-4).
This transitory approach to perennial cropping reveals farmers’ anxieties about soil
fertility, and perhaps a basic disbelief in the potential for sustained production by tree-based
agroecosystems. Coffee was cultivated in a similar manner from the 1800s to mid 1900s in
regions of southeastern Brazil previously covered by the Atlantic forest (Laakkonen 1996).
In states such as Minas Gerais, monocultural plantations of coffee were planted on slopes
cleared of native forest vegetation. Without soil amendments, the plantations were
productive for an average of seven years before they were abandoned, during which time

49
additional forest was cleared for new coffee plantations that would come into production
about the time the others failed (Dean 1995). One RECA farmer frankly admitted that it was
a shortage of labor, and not the potential longevity of perennial crops, that kept him from
clearing additional forest.
Constraints to Agroforest Management
Labor was cited by all households as one of the largest constraints to modifying
existing agroforest management practices. For example, the labor burden incurred when
cutting climbing legume (Macuna spp.) vines from the canopies of cupuassu trees was
mentioned as a reason for eliminating the thriving N-fixing species from the system. Nearly
every farmer had experimented with other “shrub” forms of legumes (e.g. Pueraria spp);
however, in most plantations, they were left to grow, unpruned, in the understory throughout
the season because it required a lot of work to cut them down. During the dry season the
dead legumes were viewed as a fire hazard and for this reason many farmers eradicated the
shrubs. Interestingly, some families found it lucrative to harvest the seeds of some legumes
and sell them to buyers interested in establishing leguminous cover crops. However, by the
time the field studies took place, legumes had been eliminated from many agroforest
plantations because replanting the legumes every year was not feasible for families.
Unfortunately, the legume species most successful at reestablishment through natural
reseeding was Macuna, a species viewed by farmers as most impractical from a management
standpoint. Furthermore, other iegumes did not compete well with the native understory
herbaceous vegetation, which often exceeded 2 meters in height before it was cut down and
left to decompose. Families understood that the “weeds” in the agroforest understory

50
competed for nutrients and water with the system’s tree components, but generally
households had only enough labor to cut down the herbaceous understory once or twice a
year, at best. Other labor-intensive farm production-related activities included annual crop
production (for household consumption); seed germination and seedling propagation in on-
farm nurseries; establishment of new perennial systems that included crops such as pineapples,
coffee and native timber trees; vegetable gardening; small and large livestock care, including
pasture creation and maintenance; well maintenance and water transport; processing and
transport of harvested products, medicinal plant propagation and collection; and forest
extraction (medicinal herbs and clay, Brazil nuts, game, fruits, seeds and seedlings for
planting, etc).
Another constraint to agroforest management was a lack of access to chemical and
organic fertilizers, and technical information about their use. Because little station research
had been done in the region on fertilizer use in alternative cropping systems (i.e. non-annual
crops), even extension agents had little idea about the most effective and efficient use of the
prohibitively-expensive soil amendments available, such as triple superphosphate and lime.
Organic fertilizers, such as cow manure, were often applied to home gardens in which
vegetables for household consumption were grown, or applied to enrich the soil used for
seedling germination and propagation. Plant residues were fed to small livestock, or were
viewed as too burdensome to transport material from the point of origin to the agroforest.
Most families, however, did leave peach palm residue (leaves and stem) originating from the
harvest of small basal offshoots for heart-of-palm in the agroforest. Operationally, these
residues were not strategically placed, but left to decompose where they fell. As mentioned

51
earlier, while leguminous cover crops were not pruned for maximum residue production, they
were initially left to decompose when they died during the dry season, and some families
found the residues to be a good livestock food supplement.
Finally, as discussed in Chapter Two, reliable transport, on- and off-farm processing,
and marketing of agroforest products were cited as some of the largest obstacles facing
households and the RECA organization. Particularly disturbing was the fact that large
harvests of peach palm fruit frequently spoiled while awaiting transport from farm to market.
High processing costs ofcupuassu pulp, due to Nova California's unreliable electricity supply,
raised the cost of marketing this product, and thus lowered the price farmers received from
the RECA organization. Financial losses such as these made farmers reluctant to invest
precious resources in more intensive agroforest management practices, regardless of the
system’s potential for sustained production.
Management Options Generated by Fanners
Reforestation team. A very detailed list of agroforest management options was
generated by members of RECA’s reforestation team (Table 3-4), who were “técnicos” or
farmers trained technically to help other farmers. Most of the recommendations on this table
are presented as stated by farmers (translated from Portuguese), although there are a few
(identified by italics) that I suggested myself. From previous farm visits it was apparent that
many households had previously employed, or were currently practicing, some of the options
listed, especially under the “leguminous cover crops” and “organic matter” categories.
Moreover, these practices had been discussed repeatedly in sessions led by myself, SOS
educators, and extension agents, and the lists demonstrated that producers were aware of

52
these practices. However, comments made by individuals during the session, as well as farm
visits and household interviews also revealed that many of the recommendations listed were
not necessarily being implemented. To a great extent this may have been due to the labor
constraints already discussed. For example, many farmers did not have the labor resources
to cut down/cultivate legumes and weeds to maximize understory nutrient cycling and
minimize competition, or to ferment cupuassu pods and other plant residues for compost.
However, at the end of the discussion session, participants did agree that most of the options
listed were desirable in order for their system to sustain productivity for a longer period of
time. Labor, time and monetary constraints made it difficult for farmers to adopt some
practices (indicated by the letter c or d in Table 3-4), despite their beneficial role in maintain
productivity. Some options, such as the use of lime and phosphate rocks, were not viewed
as feasible, because of their expense and inavailability.
Another recommendation viewed as impractical was felling the larger (> 8 m in height)
peach palm offshoots, and cutting up the stems and leaves for use as mulch beneath the
cupuassu and Brazil nut trees. I suggested this in response to comments made by producers
about the fact that during agroforest establishment most farmers had allowed the
offshoots to grow very tall (up to 16 m), not realizing that fruit and heart harvest from these
stems would become difficult, if not impossible. Although felling some of the larger
offshoots would theoretically (a) liberate and “recycle” nutrients stored in “underutilized”

Table 3-4. Management recommendations for maintaining agroforest soil fertility and decreasing root competition among agroforest
components generated by members of the RECA reforestation team during a participatory session entitled: Nutrient Removal from
Agroforestry Systems (held on September 19,1996), Translated from Portuguese, italics indicate recommendations suggested by researcher.
Goal of Management Practice
Maintaining Soil Fertility
Reducing Root Competition
Leguminous cover crops in agroforest understorv
-Plant legumes (with bacteria) to promote N2-fixation i,b
-Plant legumes in fallow fieldsb
-Plant legumes without burning fallow vegetation J
-Cut down/cultivate legumes to recycle organic matter *,b
-Cut down/cultivate weeds to recycle organic matter*
Organic matter in agroforestrv system
-Maintain an efficient nutrient cycle with green cover
crops and tree crops b
-Diversify plantations with legumes, native
timber tree species, shrubs, coffee, medicinal «fe
other native herbaceous plantsa,b
-Bring/incorporate organic matter from forestc
(branches «fe leaves, etc.) into agroforestry system
-Apply cow manure to agroforest soil0
-Apply plant residues, especially palm heart harvest0
-Compost plant residues0
-Ferment cupuassu pods at factory for compost11
-Maintain organic matter layer with weeds & legumes *-b
Inorganic inputs
-Phosphate rocks in organic matter layerJ
-Apply lime to add calcium and lower soil acidity11
-Directed and sparing application of chemical fertilizer11
Reduce peach palm offshoots (maintain only three)*’0
-Roots die with elimination of stems?
-Transfer nutrients stored in biomass to soil
-Increase harvest of peach palm heart
-Use residues from cut peach palm offshoots as green
manure beneath cupuassu and Brazil nuf
Intensify production of one species by planting monocultures
-Plant peach palm for heart production in monocultures*
-Eliminate peach palm in future mixed cropping systems*b
-Larger spacing between trees in future plantingsb
-Plant monocultural plantations of cupuassu (discussed
potential problems of disease and pests)*
Apply residues from palm heart harvest beneath cupuassu0
-Transfer nutrients stored in peach palm to soil beneath
cupuassu
-Orient root growth toward decomposing organic matter ?
‘practiced operationally by many farmers; bpracticed experimentally by a few farmers; °rarely practiced, dnot practiced

Table 3-5. Management recommendations for maintaining agroforestry system (AFS) soil fertility generated RECA farmers attending
nutrient cycling module of SOS Ecology class (held on September 27, 1996) during small group exercise Translated from Portuguese
Management Recommendations
Group one
Group two
Group three
Group four
-Directed application of cow
manurec
-Manage AFS adequately to
maintain efficient cycling of
nutrients
-Organic soil amendments0
-Leave wood residues to
decompose on soil'
-Green (leguminous) cover
crop of Macuna spp.i,b
-Increase the AFS diversity by
planting native timber tree
species'
-Leguminous cover crops 1,b
-Maintain “dead” cover with
palm residues to enrich soil'
-Fertilization with legumes in
most practical mannerc
-Fertilization with organic
matter0
-Native timber tree species'
-Plant native timber tree
species to add organic matter*
-Reduce root competition by
eliminating weeds and older
peach palm stems'
-Nutrient export (?)
-Control nutrient removal11
-Plant legumes to furnish
nitrogen ',b
-Leave organic matter when
harvesting fruits to minimize
impoverishment of soil0
-Reduce competition by'
controlling understory weeds
-Apply animal manure to0
improve plant production
'practiced operationally by many farmers; bpracticed experimentally by a few farmers; °rarely practiced, dnot practiced

55
above-ground biomass, and (b) potentially decrease intraspecific competition by decreasing
peach palm overstory biomass, participants concluded that the practice would be both labor
intensive and dangerous to farmers, possibly damaging to agroforest components (if other trees
were struck by fallen palm stems), and would not result in higher palm heart yields since the
larger stems no longer produced “tender” apical buds. Participants did agree that an effort
should be made to maintain only three stems per palm in younger plantations; two young
offshoots for heart harvest, and the larger “mother” stem for fruit production. They also
concluded that it would be feasible to place as mulch the residues of young palm offshoots
harvested for heart beneath cupuassu and Brazil nut canopies.
RECA farmers. Despite the fact that the producers comprising the reforestation team
had access to greater technical training, the management option lists generated by “untrained”
RECA farmers in small groups during the SOS nutrient cycling module were very similar to
those listed by the “técnicos” (Table 3-5). Moreover, recommendations were similar among
the four groups, i.e., use of leguminous cover crops and organic residues, agroforest
diversification with native timber species, and cow manure application. The strength in these
lists is that they were made by the producers themselves, organized in small groups, so that
their independent responses indicate that these practices were commonly recognized by
farmers as beneficial to sustaining agroecosystem productivity. The “agroforest
diversification” option also demonstrated the producers’ knowledge of improved organic
matter and nutrient cycling in structurally diverse tree-based systems, and their role in
maintaining soil fertility.

56
Compared to the “técnico” group, however, it was more difficult to elicit from these
producers which practices were truly feasible and which were impractical. When the small
groups were reunited to “report out” their lists, we discussed management options in greater
depth; for example, how legumes could be pruned to provide mulch and decrease competition.
In retrospect, it might have been very useful to introduce the “técnico-s” management options
list to see if this group would comment on the feasibility of the recommendations made by the
reforestation team. Furthermore, the “untrained” producers may have been less hesitant to
comment on the practical application of the management options they had cited had they seen
the similarity between their lists and that made by the “técnicos”.
Most participants were aware of management options that could help sustain
agroforest productivity in the future. Yet field visits, interviews, and comments made by
participants during the focussed discussion, indicated that, for whatever reason, they were not
currently practicing some of these techniques (i.e., application of manure and plant residues).
These findings suggests that a lack of resources (time, labor, money), rather than a lack of
“understanding,” may have prohibited households from employing more sustainable agroforest
management practices.
Conclusions
It has been assumed that offering economically and ecologically viable land
management strategies to Amazonian farmers is crucial to decreasing tropical deforestation.
Amazonian farmers are rapidly adopting perenrual-crop based agroforestry systems as an
alternative to shifting cultivation. This land-use may offer a greater degree of ecological
stability if the biological processes that control sustained productivity in tree-based ecosystems

57
are maintained and/or enhanced through management practices. Encouraging farmer
participation in agroecological research allowed us to gain a better understanding of the
constraints to more intensive agroforest management faced by rural Amazonian households.
Farmer input through focus group discussions also revealed the existing opportunities for
modifying agroforest management to increase its potential for sustained production. As such,
the most valuable output of the participatory process for RECA farmers may be the list of
management options they themselves generated. These lists were very instrumental in
formulating management recommendations that address biological constraints to optimal
agroforest nutrient cycling identified by this research (Chapter 7). Although not an “ideal” list
of management practices, working within the framework provided by the farmer-generated
lists does offer the most promising approach to maximizing the agroforests’ potential for
sustained production, given the constraints faced by rural Amazonian households. Stimulating
household and community-level discussions about the role of nutrient dynamics in sustained
agroecosystem production may also encourage farmers to continue experimenting on their own
to develop innovative practices that enhance agroforest productivity and minimize soil
degradation. Finally, the information gained by encouraging local participation underscores
the fact that the longevity of this system as a viable alternative to other Amazonian land-uses
depends on the extent to which it improves the livelihoods of rural households as much as its
potential for ecological sustainability.

CHAPTER 4
PHOSPHORUS AVAILABILITY AND FINE ROOT PROLIFERATION IN
AMAZONIAN AGROFORESTS SIX YEARS FOLLOWING FOREST CONVERSION
Introduction
Since the late 1970's, the rate of deforestation in the Brazilian Amazon is among the
highest in the world, raising concern because of its potentially negative consequences for
global climate, hydrology, biogeochemical cycles and biodiversity (Skole and Tucker 1993).
While a great share of the destruction is attributed to large-scale cattle ranching, nearly one
third of forest clearing is undertaken by the region’s growing population of small fanners,
primarily for the shifting cultivation of annual crops (Feamside 1993, Skole et al. 1994,
Serráo et al. 1996). As one of many strategies to decrease deforestation rates, it has been
proposed that adding perennial crops to agricultural systems may raise land productivity, and
subsequently allow small farmers to meet food demands with less forest clearing (Sanchez et
al. 1982, Anderson 1990, Smith 1990). Increasingly over the past decade, as the practice of
shifting cultivation has proven economically unviable in the region’s nutrient-poor soils,
Amazonian farmers have begun adopting perennial crop-based agroforestry systems, largely
because many agroforest products are high value cash crops that often require less labor to
produce (Smith et al. 1997). Some studies point out that these agroforests can be more
ecologically sustainable than annual cropping systems because the longevity of tree-based
ecosystems promotes a more closed cycling of organic matter and nutrients, a key factor for
58

59
the growth of native forests in weathered Amazonian soils (Sanchez et al. 1982, Ewel 1986).
Despite more efficient nutrient cycling offered by tree-based agroecosystems,
maintaining phosphorous (P) availability to plants growing in tropical Ultisols and Oxisols is
problematic for a number of reasons. While nitrogen fixation and rainfall deposition may
serve as significant external sources of N, there is no comparable atmospheric input that can
dramatically increase P availability in P-deficient habitats (Schlesinger 1995). Thus, the
amount of P cycling through natural and low input agricultural systems is determined by the
initial state of the various pools comprising the soil P stock (Stevenson 1986). Phosphorus
uptake occurs from the most vulnerable soil pool, free phosphate ions desorbed or dissolved
from the soil solid phase, often referred to as “labile” P (Fardeau 1996). While this “labile”
pool is difficult to actually quantify because it is continually affected by a myriad of biological
and geochemical factors, a number of procedures are used to quantify readily-extractable P,
and the P measured in such extracts is presumed to be correlated with plant uptake. Much
of the total P stock in tropical Oxisols and Ultisols has been precipitated as insoluble Al and
Fe phosphates, or occluded in hydrous oxides of Al and Fe, as a result of intense weathering,
which render it largely unavailable for short-term plant and microbial uptake. Solution
phosphate concentrations are maintained at low levels because any plant available P remaining
in, or added to, the soil system is sorbed by AJ and Fe oxides on the surfaces of clay minerals
(van Wambeke 1992, Fontes and Weed 1996). In these conditions, mineralization of organic
P becomes increasingly important to P nutrition (Stewart and Tiessen 1987, Cross and
Schlesinger 1995), as do mycorrhizal associations and Al- and Fe-soiubilizing root exudates
that increase P availability to plants (Chapin 1980, Fox et al. 1990, Bolán 1991).

60
Nonetheless, numerous studies provide evidence that tropical forest productivity is P-limited
(Vitousek and Sanford 1986, Attiwill and Adams 1995). Thus, maintaining P availability in
biologically and structurally less diverse agroforestry systems undergoing repeated nutrient
removal with crop harvests is a dilemma certain to face Amazonian land managers. The
problem is further aggravated by the fact that many farmers have limited access to chemical
fertilizers and little experience using the large inputs of organic residues recommended to
maintain soil fertility (e.g., Nicholaides et al. 1985, Szott et al. 1991). Studies of low input
annual cropping have shown that with continued harvest, cation leaching and soil
acidification, P availability may decrease to the extent that organic matter decomposition, N
mineralization, and N-fixation is limited because of soil fauna and bacteria sensitivity to P
deficiency (Ewel 1986, Crews 1993).
Critical to addressing the problem of P maintenance in Amazonian tree-based
agroecosystems is a knowledge of (1) how P dynamics are altered when native terra firme
forest is converted to agroforest, and (2) how long readily-extractable soil P pools can sustain
agroforest productivity without the use of amendments. These questions are particularly
important if commercial agroforestry systems are to be considered both economically viable
and ecologically sustainable alternatives to other more destructive land uses in Amazonia.
Establishing nutrient limitations to plant productivity often requires fertilization
experiments that test the relationship between nutrient supply and plant growth and
development (Marschner 1995). Cuevas and Medina (1988) used root proliferation in
nutrient enriched-ingrowth cores as a bioassay to infer nutrient limitations to fine root growth
in Amazonian forests. Raich et al. (1994) demonstrated that this method could be used to

61
identify specific nutrient limitations to aboveground forest productivity by comparing root
proliferation response in nutrient-enriched cores to previous forest fertilization studies. It is
generally accepted that many crop plants do proliferate in nutrient-rich patches, but studies
have shown that nutrient-deficient plants exhibit a greater proliferation response than nutrient-
sufficient plants (Caldwell 1994). For example, Ostertag (1998) found that root growth of
tropical forest trees established in P-poor soils was greater in response to P fertilization than
the same forest types growing in less P-limited soils. In P-deficient habitats, roots and
associated mycorrhizae must grow to P sources as phosphate concentrations become depleted
around the rhizosphere because P diffusion through the soil solution is slow (Nye and Tinker
1977). Thus, root proliferation in response to P microsite enrichment could be an effective
tool for assessing P limitations to ecosystem productivity, as well among species within a
system growing in P-poor Amazonian soils.
The objectives of our study were threefold. First, readily-extractable inorganic and
organic P pools, as well as other chemical properties, were compared between agroforest and
adjacent native forest soils to determine how short-term (< 10 years) P dynamics change when
primary forest is converted to perennial crop-based agroforestry systems. Secondly, P
limitations to productivity in eight six-year-old agroforestry systems were studied using a root
ingrowth bioassay to examine fine root response to phosphate microsite enrichment by
agroforest and native forest plants. Finally, a differential response in root proliferation
among agroforest species was examined as a component of inter-species competition. This
third objective was added at the request of the Brazilian farmers collaborating in this study

62
who were concerned about what they perceived to be aggressive root competition by the
agroforest’s palm component.
Methods
The Study Area
The study was conducted on eight farms within a 30 km radius from the town of Nova
California, a rural community which lies on the border of the Brazilian states of Aeré and
Rondónia in the western Amazon Basin (67°W, 10°S). The life zone in this region is humid
moist tropical forest (Holdridge 1967) and the native non-flooded terra firme vegetation
comprises both deciduous and evergreen broadleaf tree species. Average air temperature is
22° C and mean annual rainfall over the last 10 years is approximately 2,000 mm with a three-
month dry period occurring from June through August (UFAC unpublished). The region’s
topography is slightly undulating and soils are predominately Ultisols and Oxisols (Sombroek
1966, Souza 1991). Soils from the study sites are acidic (pH < 5), with an effective cation
exchange capacity less than 12 cmol+ kg clay'1, high levels of exchangeable aluminum (>40%
A1 saturation), and 40 percent or more clay in the top 20 cm (Table 4-1). These properties
are consistent with Oxisols of the Ustox suborder (van Wambeke 1992). Colonist farmland
holdings in the region are typically 100 hectares, half of which are maintained in primary
forest, as dictated by Brazilian law (IBGE 1990). Land use includes livestock pasture, annual
and perennial crops, homegardens, and forest extraction.

Table 4-1. Soil properties ( ± one SE) in eight agroforests and adjacent native forests at 0-20 and
20-40 cm depth (n=8)
0-20 cm
20-
40 cm
Paired t-test
Soil Property
Agroforest
Forest
Agroforest
Forest
p values'
by soil depth
Sand (%)
27.6 ± 5.6
24.2 ±5.2
26.2 ± 5.7
25.3 ± 3 9
Silt (%)
25.9 ± 2.0
35.3 ± 5.4
22.9 ±2.0
27.7 ±4.4
0.139 0-20 cm
Clay (%)
46.2 ± 6.0
40.6 ± 5.4
50.9 ± 5.9
47.0 ±4.7
PH
4.9 ±0.2
4.3 ±0.1
4.7 ±0.2
4.3 ±0.1
0.006 0-40 cm
Organic matter (%)
2.0 ±0.1
2.0 ± 0 2
1.3 ±0.1
1.3 ±0 1
M-l Ca (mg kg ‘)b
349.9 ±152
102.4 ±36
105.1 ±43
45.5 ± 18
0.035 0-40 cm
M-l Mg (mg kg ')
60.8 ± 13
42.2 ±7.2
23.4 ±5.4
24.2 ± 5 0
0.115 0-20 cm
M-l K (mg kg')
35.1 ± 17
36.0 ±2.8
19.0 ± 1.8
21.2 ± 2.2
M-l Pi (mg kg'1)
1.08 ± 0.11
1.54 ±0.22
0.19 ±0.22
0 43 ±011
0 051 0-40 cm
Ca (cmol+kg1)
1 96 ±0.50
0.50 ±0.17
0 009
Mg (cmol+kg1)
0 50 ±0.07
0.32 ±0.05
0.045
K (cmol+kg1)
0.14 ±0.02
0.13 ±0.07
A1 (cmol+kg1)
1 88 ±0.53
2.17 ± 0.35
ECEC(cmol+kg‘)c
4.42 ±0.34
3.11 ±0.27
0.004
A1 sat (%)
41.0 ± 10 9
68.2 ±7.7
0 033

Table 4-1-continued.
0-20 cm 20- 40 cm Paired t-test
Soil Property p values'
Agroforest Forest Agroforest Forest by soil depth
Total C (g kg1) 16.2 ± 1.5 15.3 ±1.3
Total N (g kg1) 169 ±0.02 1.60 ±0.13
Total P (g kg1) 0 41 ± 0 06 0.36 ± 0 04
* P values 2: 0.15 not reported.
bMehlich-l extractable elements
c Effective cation exchange capacity (sum of base cations + exchangeable Al).
0-20 cm
20-
40 cm
Paired t-test
Soil Property
Agroforest
Forest
Agroforest
Forest
p values *
by soil depth
M-l Pi (mg kg1)
1.08 ±0.11
1.54 ±0.22
0.19 ± 0.22
0.43 ±0.11
0 051 0-40 cm
Bray Pi (mg kg'1)
2.64 ±0.29
3.56 ±0.63
0 86 ±0.20
1.08 ±0.23
0.045 0-20 cm
Resin Pi (mg kg'1)
1.31 ±0.10
2.00 ±0.29
0 07 ±0.01
0.28 ±0.12
0.087 0-40 cm
Bicarb Pi (mg kg1)
0.75 ±0.19
1.32 ± 0.37
Bicarb Po (mg kg1)
6 19 ± 0.71
6.98 ±0.50
0.139 0-20 cm
' P values ^ 0 15 not reported.

65
The eight farms included in this study were volunteered by members of the producers'
organization. Projeto RECA (Economic Partnership for Reforestation). In the late 1980’s the
group established a perennial crop-based commercial plantation agroforestry system, one to
two hectares in size, on more than 200 farms. The system is two-tiered, dominated by an
upper canopy of peach palm (Badris Gaesipaes Kunth), a multi-stemmed monocot cultivated
for centuries by Amerindians throughout Amazonia (Clement 1986). The middle canopy is
formed by cupuassu (Theobroma grandiflorum (Willdenow ex Sprengel) Schumann), a
shade-tolerant broad leaf tree native to non-flooded forests of the central Amazon Basin
(Venturieri 1993). A third component of the system is Brazil nut (Bertholletia excelsa Humb
& Bonp), a broad leaf upper canopy dominant, also a native to the region’s forests (Mori and
Prance 1990). The agroforest’s principal products include cupuassu pulp, peach palm fruit
and seed, and heart-of-palm, all of which are harvested as early as three years after system
establishment. Brazil nuts are also an important cash crop throughout Amazonia (Kainer et
al. in press), however, at the time of the study, this species had not yet begun to produce
fruit.
Typically, the agroforest was established by cutting and burning native forest
vegetation and interplanting one-year-old cupuassu, peach palm and Brazil nut seedlings at
a spacing of 7 x 4 meters to complete stocking densities of 190, 150 and 30 trees ha'1,
respectively. During the first year of establishment, leguminous cover crops were planted
in agroforest rows. However, legumes were largely eradicated from the agroforests in the
years following establishment, and native understory herbaceous vegetation was cut down and
left to decompose twice annually. Since agroforest establishment, grazing livestock

66
were excluded from the system, nor were chemical fertilizers applied on the eight farms under
study.
Farmer Participation
The research was carried out using a participatory (Feldstein and Jiggins 1994)
approach that encourages farmer involvement throughout the investigative process. By
involving farmers it was hoped that the results might ultimately be more usetul to them. Prior
to initiating the study, the research objectives and overall plan were presented to RECA
producers. As a result of feedback received by the farmers, a third objective was added,
which was to compare root proliferation response to phosphate among agroforest species,
in an attempt to address their concerns about aggressive root competition by the peach palm.
Personal observation and interviews during repeated stays (3 visits each x 2 days) with nine
families, five focus group discussions with RECA farmers (¿30 participants each), and
project reports all provided information about agroforestry system establishment, farm
management practices, and crop harvests. A more detailed description of the participatory
process is provided in Chapter 3.
Plot Establishment
On each farm a 20 x 20 m plot was located in both the agroforest and adjacent native
forest. Adjacent native forest refers to the primary terra firme vegetation that had been
growing contiguous to the forest that was cut and burned to establish the agroforestry system.
As fire often enters standing forest during agricultural site preparation, a 50-m border was
maintained between agroforest and adjacent native forest plots to avoid sampling under

%
67
previously-burned vegetation. There were no observed topographic differences between
paired forest and agroforest plots on any of the farms.
Soil Sampling and Analyses
One well-mixed composite soil sample consisting of 10 randomly located cores was
taken at two depths (0-20 cm and 20-40 cm) from both the agroforest and adjacent native
forest plots on all eight farms. The samples were air dried, passed through a 2-mm mesh
sieve, and hand-picked free of fine roots prior to chemical analyses.
Mehlich-1 (M-l) cations and P at 0-20 and 20-40 cm soil depth were extracted by
shaking 5 g mineral soil in 20 ml of dilute double acid (0.05 N HCL in 0.025 N H2S04) for
five minutes. Percent organic matter (OM) was quantified using the Walkley-Black
dichromate procedure (Nelson and Sommers 1982), and pH was measured using a Beckman
pH meter and electrode in a 2:1 water to soil ratio. A particle size analysis was performed
using the pipet method (Kilmer and Alexander 1949).
In the top 20 cm of soil, exchangeable base cations (K\ Ca2+ and Mg2*) and aluminum
(Al3+) were measured after extracting 10 g soil in 100 ml 1.0 M NH4OAc and 1.0 M KC1,
respectively, for 16 hours. Total P in 200 mg finely ground soil was extracted using a
concentrated H2S04/H202 digest at 360°C for two hours. Ion concentrations in the filtered
extracts were measured using inductively coupled argon plasma (ICAP) spectroscopy. Total
soil nitrogen (N) and carbon (C ) were analyzed after Dumas (flash) combustion (Nitrogen
Analyzer 2500; Carlo Erba Strumentazione, Milan, Italy).
In addition to M-l phosphorus, readily-extractable P was measured using anion
exchange resins to exhaustion, the Bray PI (Bray and Kurtz 1945), and sodium bicarbonate

68
procedures (Olsen and Dean 1954). Although these four extracts are all used to quantify
readily-extractable P, they solubilize varying quantities of the “labile” pool as a result of
different chemical reactions. The dilute mixed acid in the Mehlich-1 extract dissolves A1 and
Fe phosphates (Olsen and Sommers 1982) and is used as an index for P availability in Oxisols
throughout Brazil. Anion exchange resins desorb exchangeable Pi without drastic changes
in pH or other soil chemistry. High correlations of resin-extractable P with plant uptake
suggests that resin extracts more closely simulate the physical action of plant roots (McKean
and Warren 1996). The Bray PI extract removes easily-acid-soluble Al- and Fe- phosphates
through the formation of fluoride complexes with Al and Fe. The sodium bicarbonate
(bicarb) extract solubilizes a small portion of what is presumed to be readily-mineralizable
organic P (Po), which includes some microbial biomass, in both alkaline and acid soils
(Bowman and Cole 1978, Stevens 1986). Bicarb Pi, used only to calculate Po in this study,
is traditionally used to measure extractable Pi in neutral to alkaline soils (Olsen and Sommers
1982).
For resin-extractable P, 2 g of soil were placed with a 2.5 x 5 cm2 anion exchange
membrane (sorption capacity = 272 mg P per membrane) in a 50 ml centrifuge tube filled with
30 ml deionized (DI) H20. The tubes were shaken for 16 hours, after which the membrane
was removed and rinsed with deionized water to remove soil. Phosphorus on the membrane
was desorbed by shaking it in 20 ml 0.5 M NH4OAc for two hours. Using the Bray PI
extract, 1 g soil was shaken for one minute with 7 ml of 1.0 N NH4F and 0.5 N HCL in DI
H20 and filtered. For bicarb-extractable Pi, 10 g soil were shaken in 30 ml 0.5 M NaCO,
(pH8.5)for30 minutes. Concentrated HC1 (1.5 ml) was added to the filtered and centrifuged

69
extracts to precipitate organic matter. Aliquots of the bicarb Pi extracts were ashed in a
muffle furnace at 560 0 C and wet-digested with concentrated HC1 to extract total P (Ptot).
Bicarb Po was calculated as the difference between bicarb-extracted Ptot and Pi (Olsen and
Sommers 1982). All procedures were conducted in triplicate, and extract P concentrations
were determined colorimetrically using the molybdate blue method (Murphy and Riley 1962)
on a Milton Roy Spectronic 1201 spectrophotometer.
Root Ingrowth Bioassav
A root ingrowth bioassav (Cuevas and Medina 1988) was used to study root
proliferation response to phosphate microsite enrichment. Two hypotheses were tested: (1)
fine root length in phosphate-treated cores would be greater relative to the paired control,
indicating a P limitation to plant productivity, and (2) peach palm fine root length would be
greater than that of cupuassu in both core treatments and agroforest locations, signaling root
competition by the palm that could be detrimental to cupuassu nutrition. Root biomass
between P-treated and control cores was also compared. Root proliferation by Brazil nut was
not studied because the species is a minor component of the system, contributing to less than
8% of the agroforest’s trees (30 trees ha'1).
The ingrowth cores were constructed from high density polyethylene mesh tubes (10
cm tali, 6.5 cm diameter, 4x2 mm mesh size), and filled with 40 g medium-sized vermiculite,
treated with either 100 mL 0.08 M NajHPC^ (phosphate treatment) or deionized water
(control). The cores were placed individually in 7.5 cm diameter holes dug in the top 15 cm
of soil using a bucket auger, and buried in pairs consisting of both a P-treated and control
core spaced 30 cm apart. Five pairs were buried in each of three locations per farm: (a)

70
between trees in agroforest rows; (b) in agroforest alleys (between tree rows), and (c )
randomly in adjacent native forest. In the agroforest rows, where both cupuassu and peach
palm roots grew, the ingrowth core pairs were buried midway between the two trees, which
usually fell beneath the dripline of the cupuassu canopy. Core placement in rows was located
at random, but the pairs were buried so that each treatment was equidistant from both the
cupuassu and peach palm. Cores were placed randomly in agroforest alleys, an area densely
populated by peach palm roots, but where cupuassu roots were rarely found, to determine if
the latter would proliferate outside of its “rooting zone’’ in response to P microsite
enrichment. Ingrowth pairs were placed randomly in adjacent native forest plots to examine
native forest plant response to P microsite enrichment. The cores were buried at the
beginning of the rainy season (mid November) 1995, concurrent with soil sampling, and left
for 100 days.
Upon removal, roots were cut flush with the outside of the ingrowth cores, and the
roots inside the tubes were washed and separated according to Volt and Person (1990). Total
root length was calculated using the line intersect method (Tenant 1975). Root lengths for
native forest species were estimated together, while agroforest root lengths were calculated
separately for peach palm, cupuassu, and the remaining “other’ roots. Total root length per
ingrowth core is reported as m'2 to facilitate comparisons with root mass (g m'2). Oven-dried
and ground root tissue was wet-digested with H2S04/H202 (Thomas et al. 1967) for analysis
of P concentrations using ICAP spectroscopy.

71
Statistical Analyses
A paired-comparison t-test was used to identify differences in soil properties between
agroforest and adjacent native forest (n= 8 farms). Root length data were log transformed
to meet the equal variance assumption of analysis of variance (ANOVA) after a normal
probability plot of the residuals revealed heteroscedasticity; untransformed mean values are
presented. Paired differences between control and phosphate-treated cores were analyzed as
a function of location, species, and land-use system treatments by using ANOVA models with
these effects and their interactions. All analyses were performed using SAS (SAS Institute,
Inc., Cary, NC).
Results
Agroforest Soil Six Years Following Forest Clearing
Physical and chemical properties of agroforest and native forest soils are presented
in Table 4-1. Across the eight farms, particle size distribution did not differ between
agroforest and native forest soils. In particular, the clay fraction at both depths did not differ
between agroforest and native forest, providing evidence that soil properties were initially the
same in the paired agroforest and forest plots, because particle size distribution varies little
over time or as a result of management (Sanchez 1987).
Exchangeable Ca and Mg were significantly greater in the agroforest soil, as was pH,
resulting in a higher effective cation exchange capacity (ECEC) and lower aluminum
saturation (A1 sat) in this system. Exchangeable Ca, in particular, was nearly four times
higher in the agroforests than in adjacent forests (P < 0.009). Overall, total C, N, P, and soil
organic matter were low when compared to other Amazonian forest soils, and did not differ

72
between the two systems. Although the concentration of agroforest M-l extractable bases
was either higher or unchanged from that of forest soils six years after clearing, M-l Pi
decreased nearly 30% in the top 20 cm, and over 55% at the 20-40 cm depth (P < 0.049).
Readily-extractable Pi concentrations in the Bray PI and resin extracts of native forest soils
(0-20 cm) were also higher than those of agroforest soil (Table 4-2). Overall, the Bray PI
extract produced the highest extractable Pi concentrations in agroforest and forest soils,
presumably due to the dissolution of Al-phosphates, however, in both systems these
concentrations would be considered inadequate (< 7 mg kg'1) for agricultural production
(Olsen and Sommers 1982). Bicarb Po was the largest extractable pool measured, however
neither it nor Bicarb Pi differed between agroforest and native forest soils.
Fine Root Response to Phosphate-Enriched Microsites
In all three locations (agroforest rows, alleys, and adjacent native forest) there was
a trend towards greater root length in phosphate-treated cores (Fig. 4-1 A). However, using
a t-test, the difference in root length between paired P-treated and control cores was
statistically significant only in the agroforest alleys (P < 0.015). Overall, when data from both
rows and alleys were pooled, mean root length in P-treated cores (74.92 m m'2) was still
greater than in the control (46.96 m m'2) (P <. 0.039). Root weight did not differ between the
control and P-treated cores in either agroforest location, but was significantly greater in P-
treated cores buried in native forest (Fig. 4-IB).
A significant root proliferation response to P-treatment was exhibited by cupuassu
only in agroforest alleys (Fig.4-2). Both cupuassu and “other” root length in P-treated cores

Root Length (m m'2)
150
p<0.30
120 -
A.
p<0.13
agroforest forest
rows alleys
Fig 4-1. In all ingrowth core locations, there was a trend towards greater root length in P-treated cores; this effect was statistically
significant only in agroforest alleys. Root biomass was significantly greater in P-treated cores buried in forests.

Root Biomass (g m'2) ^oot Len9thi (m m )
74
Fig. 4-2. In agroforest rows, root length did not differ between cupuassu and peach palm
in either core treatment. Root length in phosphate-treated ingrowth cores was significantly
greater than the control for cupuassu and “other” roots only in agroforest alleys.

75
(6.38 and 44.61 m m'2, respectively) were significantly greater than in control cores (0.52 and
13.58 m m'2) (P < 0.012 and P < 0.007) Cupuassu root weight in P-treated cores (2.41 g
m'2) was also higher than that found in the paired control (0.90 g m'2) (P < 0.100). Peach
palm root length did not differ between phosphate and control cores, but exceeded that of
cupuassu for both the P- and control treatments in the alley location (P < 0.0001) (Fig. 4-2).
In agroforest rows, there were no differences in root length or weight between the P-treated
and control cores, nor were there differences between peach palm and cupuassu root lengths
in either treatment (Fig 4-2).
Table 4-3. Phosphorus content (± one SE) in fine root tissue growing in phosphate-treated
and control ingrowth cores (n=8 ).
Tissue
P Content (mg g'1)
T-test
Increase in
Control
Phosphate
P values *
P content (%)
cupuassu
0.62 ± 0.02
0.86 ±0.05
0.041
38.7
peach palm
0.88 ±0.06
1.01 ±0.05
0.031
14.8
other
1.10 ± 0.15
1.22 ±0.10
10.9
forest spp.
0.83 ±0.07
0.93 ±0.10
12.1
1P values £ 0.15 not reported.
Across all four root groups (cupuassu, peach palm, “other" and forest), tissue P
contents were greater for roots growing in P-treated cores than those in the control (P
sO.010). Analyzed separately by group, this effect was significant only for cupuassu and
peach palm, with cupuassu exhibiting over twice the increase in root P content (38.7%) than
the palm (14.8%) (Table4-3).

76
Discussion
Soil Chemistry Following Conversion of Forest to Agroforest
The greater exchangeable Ca and Mg in the top 20 cm of agroforest soil relative to
adjacent native forest indicates a common effect of the slash-and-bum conversion of primary
forest to agricultural land-use. Ash deposited on the future agroforest site from forest
biomass burning undoubtedly produced a pulse of base cations in the mineral soil,
precipitating an increase in pH and a decrease in exchangeable Al. Many studies report the
favorable effects of burning on soil chemical properties initially following forest clearing
(Ewel et al. 1981, Sanchez et al. 1983, Andriesse and Kioopmans 1984), and this study
suggests that such changes may persist six years after agroforest establishment.
Although the nutritional quality of forest biomass growing in tropical Oxisols is
relatively low (Vitousek and Sanford 1986), the total quantity of nutrients released after
burning mature forest usually supports two to three years of no-input annual cropping before
fields are abandoned to fallow (Serráo et al. 1995, Juo and Manu). In perennial crop-based
agroforests, nutrients otherwise removed from the system during the first few years following
the bum through annual crop harvest or leaching, were stored in growing agroforest biomass
and cycled in fallen litter and decaying roots. When nutrient export commenced with
agroforest harvest three to four years after planting, it would be less than that expected for
annual crops because the first few years of crop production are usually low in a maturing
perennial system comprised of these Amazonian species (Ventereiri 1993, Mora-Urpi et al.
1997). In addition, a change in species composition when forest was converted to agroforest

77
may have further modified soil properties by altering the quantity and quality (i.e., nutrient
content) of above- and below-ground litter (Binkley 1995, Smith et al. 1998). While it might
be expected that nitrogen-fixing legumes growing in the agroforest understory during the first
three years after establishment would add nitrogen to the soil, total N did not differ between
the two systems. This may be due to the fact that volatilisation of N during forest biomass
burning can be up to 68% of total N content in vegetation (Kaufman et al. 1995) Moreover,
N export from this particular configuarion of agroforest species can be relatively high, often
comparable to that of annual cropping systems as the system approaches six to eight years
(Chapter 6).
Regardless of the origin, an increase in exchangeable bases and pH can also stimulate
decomposition and mineralization of organic matter by creating a more favorable environment
for microbial populations (Nye and Greenland 1960), as well as decrease the soil’s P fixation
capacity by reducing Al3+ and Fe3+ solubility. Combined with the transfer of P from biomass
to soil following a slash and burn, these factors could initially increase P availability to plants
(Sanchez 1976). Kainer et al. (inpress) found that M-l Pi concentrations in recently burned
shifting cultivation plots (pH = 5.9, 8.1 mg kg'1) were markedly greater than those in native
forest (pH = 4.7, 2.8 mg kg'1) located in the same western Amazonian extractive reserves.
Similarly, Lessa et al. (1996) attributed an increase in bicarb-extractable Po in the top 20 cm
of an Oxisol to accelerated organic matter decomposition and mineralization one year
following savanna clearing in northeastern Brazil.

78
Readilv-Extractable Pi
Six years after forest clearing, there was no evidence that Pi concentrations in
agroforest soil increased as a result of forest biomass burning. In fact, while agroforest M-l
extractable bases had increased or remained unchanged from native forest levels at the time
of sampling, M-l Pi was considerably lower, as were Pi in the Bray PI and resin extracts.
Such decreases in agroforest readily-extractable Pi are evidence that phosphate is being taken
up by the aggrading agroforest faster than it can be restored into these pools from less readily-
extractable forms.
Without a measure of total soil microbial biomass in the two systems, it is unknown
if temporary differences in Pi immobilization contributed to lower agroforest extractable Pi
concentrations. However, as discussed below, similar total C-to- P ratios and organic matter
content in agroforest and forest soils suggest that this would not be the principal cause of
lower agroforest readily-extractable Pi. It is also improbable that extractable Pi decreased as
a result of downward movement or leaching through the soil profile, given the inherent
adsorptive characteristics of tropical Oxisols (van Wambeke 1992). However, it is possible
that soil Pi plus that released from plant biomass during the bum was “fixed” into more stable
P fractions not measurable in the extracts used in this study. Linquist et al. (1997) found that
despite large P fertilizer applications exceeding crop removal in a Hawaiian Ultisol, M-l Pi
decreased from 35 to 30.5 mg kg'1 during a four year period. In our study, however, the
relatively short period occurring between forest burning and sampling makes it unlikely that
agroforest P moved into the most recalcitrant occluded soil pools (Cross and Schlesinger
1995). Thus, one might expect agroforest solution Pi to be restored, either through

79
desorption from secondary minerals or Po mineralization. Using sequential fractionation
procedures, studies have shown that readily-extractabie Pi in many agricultural systems is
maintained in equilibrium with less labile pools, such as NaOH-extractable Pi (Hedley et al.
1982, Tiessen et al. 1983, Crews 1996). Despite an 86% decrease in resin Pi (from 2.76 to
0.38 mg kg'1) after 13 years of no-input cropping in a Peruvian Ultisol, Beck and Sanchez
(1994) surmised that resin Pi had been sustained by Po mineralization and more stable Pi
fractions because this Pi pool was not large enough to support the total removal of 38 kg P
ha'1 that resulted from grain harvests. The role of these less readily-available P fractions in
maintaining solution Pi, and ultimately, the productivity of perennial crop-based agroforests,
is relatively unstudied and certainly merits further investigation.
Extractable Po
How soil bicarb-extractable Po concentrations were affected initially following forest
burning is unknown, but at the time of sampling six years later this pool did not differ between
the two systems. This suggests that despite soil conditions more favorable to organic matter
decomposition and mineralization, other factors, such as lower turnover in above- and below¬
ground biomass at this stage of agroforest development, may have stabilized or even limited
bicarb Po accumulation in agroforest soils. Linquist et al (1997) suggested that readily-
extractabie Po is coupled with C mineralization after observing that bicarb Po declined at the
same rate as soil organic carbon and total N during four years of continual cropping in an
Ultisol. In our study, soil organic matter (OM) was equally low (2.0 %) in both forest and
agroforest soils, most likely because decomposition and mineralization are so rapid in the
tropical environment that only the most recalcitrant OM fractions remain in either system.

80
In these conditions one would expect the labile Po pool to be maintained at a constant level,
unless modified temporarily by seasonal pulses or immobilization. He et al. (1997)
demonstrated that total soil C-to-P ratios were closely related to soil microbial biomass and
P availability. In our study, neither C-to-P ratios nor the total soil C content differed between
the two systems, suggesting that varying rates of mineralization and immobilization are not
the primary causes for a difference in P availability between forest and agroforest.
Other research has shown that while bicarb-extractable Po may act as a sink or source
during periods of fertilization or P deficiency, absolute changes in this pool after years of
cultivation are negligible (Sharply and Smith 1985, Crews 1996, Schmidt etal. 1996). These
and other studies indicate that increasingly stable P pools, such as NaOH-extractable and
“residual” Po, contribute significantly to plant P uptake over the long term by buffering more
readily-extractable Pi pools, and therefore may better represent the soil’s potential for P
maintenance (Beck and Sanchez 1996). Tiessen et al. (1982) suggested that as the most
labile Po fractions mineralize and become depleted through crop uptake, P dissolution from
primary and secondary minerals becomes increasingly important to plant nutrition.
Total P
Whereas significant decreases in agroforest readily-extractable Pi might be explained
by its redistribution among various P fractions not measured in this study, total P provides
an index of the absolute amount of P in the soil. As in the case of base cations, one might
expect greater total P concentrations in agroforest soils as a result of the net transfer of P
from forest biomass to soil following burning. Kauffman et al. (1995) found that total soil
P in slashed primary terra firme forests in Rondónia, Brazil increased 40% from preburn

81
concentrations immediately following burning. Any such increase in agroforest soil P
following forest biomass burning was no longer apparent six years later, as demonstrated by
similar total P concentrations in agroforest (902 kg ha'1) and adjacent forest (792 kg ha'1)
soils. Likely sinks for agroforest P include accumulation in above and below-ground biomass
and loss through three years of crop harvests, which, combined, could account for
approximately 35 to 40 kg ha'1 (Chapter 6). Peach palm biomass, in particular, was found
to store over twice as much P in above-ground biomass, than in cupuassu and Brazil nut
combined in an eight-year-old agroforest (Chapter 6). The lack of difference between forest
and agroforest total soil P stocks implies that the latter has already depleted any post-bum P
additions. As a result, the readily-extractable Pi fraction in agroforests will likely continue
to decrease with time, eventually precipitating a decline in productivity under current
management practices, unless Pi is made available through other mechanisms, such as root
exudates, or buffered in the soil system by other less readily-available fractions not measured
in this study.
Fine Root Response to Phosphate Microsite Enrichment
While soil extracts provide evidence that labile Pi has decreased since agroforest
establishment, the question remains whether agroforest productivity is currently limited by the
size of this pool. The greater proliferation of cupuassu and “other” plants roots in P-treated
cores buried in agroforest alleys compared to the control cores suggests that these species
may invest more resources into roots that find P-enriched microsites. However, definite P
limitations to plant productivity could not be inferred using the root ingrowth core bioassay
because roots of the same species did not respond to P microsite enrichment in agroforest

82
rows. There was a similar trend towards greater mean root length in P-treated cores buried
in native forest, but this effect was not statistically significant. Cuevas and Medina (1988)
used proliferation of fine root biomass to infer both a P and Ca limitation to native terra firme
forest in the Venezuelan Amazon, and an analysis of native forest root mass in this study
revealed a significantly higher root mass in P-treated cores. As earlier noted, extractable Pi
concentrations measured in any of the extracts used in this study are considered “low" for
both forest and agroforest soils. However, a P-limitation to native forest productivity cannot
be inferred based on the root ingrowth bioassay, despite the fact that many studies cite P as
the nutrient most limiting to tropical forest productivity (Vitousek and Sanford 1996).
Length Versus Mass as an Indicator of Proliferation
Overall, root mass in P-treated cores did not differ from that of the control in
agroforest alleys, and this is perhaps due to differing patterns of root biomass allocation
among the system's components. Cupuassu root length appeared to be a more sensitive
measure of root proliferation than mass, and a plot of root length versus mass reveals a
significant linear relationship in which a small increment in mass produced a large increase in
length. Similarly, the majority of the various unidentified herbaceous species that comprised
the “other “ group had very fine roots (diameter <0.5 mm), which produced over twice as
much length than peach palm roots (in P-treated cores) with less than a third of the mass. The
difference in “other" root mass between to P-treated and control cores was not significant,
perhaps because the greater mass of coarser (diameter ^ 2 mm) roots (of different species)
that occasionally grew into cores of both treatments overwhelmed the fine root mass,
obscuring any proliferation response based upon this variable. Ultimately, we placed greater

83
emphasis on root length in our evaluation of root proliferation response because the surface
area of contact between root and soil is more indicative of a root system’s capacity to take
up nutrients than is mass (Newman 1966).
Root Proliferation in Agroforest Alleys and Rows
Studies have shown that root proliferation in patches where nutrients are more
abundant is a foraging strategy that may be more effective for fine- rooted species growing
in environments where nutrients are heterogeneously distributed or “patchy” (Caldwell 1994).
The proliferation response to P-enrichment exhibited by cupuassu in agroforest alleys may
reflect the heterogeneity of nutrient availability and the density of root distribution in this
location. With extractable Pi concentrations so low in agroforest soils, root growth would
likely be concentrated in areas of accumulating organic matter to take advantage of Po
mineralization. Decomposition and mineralization of more abundant and homogeneously
distributed litterfall in agroforest rows probably contributed to a more constant supply of P
to cupuassu roots growing in this location. Overall, cupuassu root length was greater in cores
placed in rows than in alleys, regardless of treatment. This, and the fact that the row location
often fell beneath the cupuassu canopy, suggest that roots were more densely distributed in
agroforest rows. Higher root density would increase the likelihood that roots would
“randomly” grow into both P-enriched and control cores, perhaps explaining why cupuassu
root lengths did not differ significantly between the P-treated and control cores in rows.
In contrast, litterfall in alleys was patchy, often exposing bare mineral soil. In such
an environment, the cost of root growth is relatively high if nutrient acquisition is not
increased as a result of the investment. Thus, we see very little cupuassu root length or mass

84
in the control cores buried in agroforest alleys compared to rows. Cupuassu roots growing
into alleys proliferated only when they encountered the P-enriched cores. Greater light and
water availability, and perhaps lower root densities in agroforest alleys may have also
contributed to a more favorable environment for the root growth of “other” weedy species
which are often better adapted to efficient exploitation of patchy nutrient availability.
Root Competition Among Agroforest Components
Differences in root response to P-microsite enrichment among agroforest components
may also reflect differing ecological strategies for nutrient acquisition that determine
competitive interactions among agroforest components. While the roots of cupuassu and
“other” plants proliferated in P-enriched cores in agroforest alleys, peach palm roots did not
exhibit similar foraging behavior. In fact, overall, neither palm root length, nor mass, differed
among core treatments or locations. This suggests that this species may acquire P in P-
deficient habitat through mechanisms other than proliferation of fine roots.
Fitter (1994) suggested that coarse-rooted species are less adapted to proliferate in
nutrient-enriched microsites because the investment necessary for the growth of longer-lived
high diameter roots may not be offset by the resources gained in short-lived nutrient-rich
patches. Potential differences among plant species in their capacity for root proliferation
seriously weakens the root ingrowth bioassay as a means to detect nutrient deficiencies in
crops, because a lack of proliferation might be misinterpreted to mean that the species is not
nutrient-limited, when in fact, a lack of response may be due to species-specific differences
in carbon allocation. The specific root length of peach palm is approximately half that of
cupuassu (Haag 1997), so that the palm allocates twice as much biomass to an equivalent

85
length of root as cupuassu. Furthermore, such differences in carbon allocation may indicate
different ecological strategies for resource capture. For example, it may be that instead of
proliferating short-lived fine rootlets in ephemeral nutrient patches, the palm may invest in
longer-lived higher diameter roots to locate and exploit soil resources that may be spatially
beyond the reach of competitors. Ferreira et al. (1995) estimated that when growing in
heavy-textured clay Oxisols, absorptive roots of peach palm may extend up to 9 meters from
the stem. In addition, the palm roots form thick superficial mats at the base of stems and
offshoots that “catch” fallen litter. In another study (Chapter 6) resin-Pi concentrations in the
organic matter trapped in the peach palm’s root mat were 10 to 100 times greater than Pi
concentrations in the top 5 cm of surrounding soil. Finally, peach palm roots are known to
form vesicular-arbuscular mycorrhizal symbioses in Amazonian Oxisols, and other studies
suggest that this species may be able to solubilize less readily-extractable forms of P (Clement
and Habte 1994, Fernandes and Sanford 1995). Despite these potential mechanisms for P
acquistion, it cannot be concluded that peach palm is P-suificient based upon a lack of root
proliferation response to P microsite enrichment, due the inherent weaknesses of the root
ingrowth bioassay mentioned above.
Mora-Urpi et al. (1997) note that P deficiencies are rarely observed in peach palm
growing in tropical Ultisols and Oxisols, and the various strategies for P acquisition described
above likely increase the palm’s competitive ability in P-deficient soils. The RECA farmers’
concerns of root competition by the peach palm were based upon observations that palm
roots regularly grew in the soil beneath cupuassu canopies. In an eight-year old agroforest
of the same configuration planted by RECA farmers peach palm comprised 72.3% of total

86
above ground biomass, providing further evidence of the palm’s dominance in this
agroecosystem (Chapter 6). The results of this study demonstrate that readily-extractable Pi
concentrations in agroforest soil decreased relative to adjacent forest, perhaps to the
detriment of other less-competitive species in the system. In another study, resin-extractable
P measured monthly over one year was higher underneath peach palm canopies than those of
cupuassu, presumably due to faster leaching, decomposition and mineralization of the
relatively P-rich peach palm leaf litter (Chapter 5), and the palm appears more efficient in
procuring and storing P in rapidly growing above- and below-ground biomass than the other
two agroforest components (Chapter 6). Thus, if competition is defined as the reduction in
plant fitness resulting from resource exploitation by neighboring plants (Grime 1977), it might
be concluded that peach palm competition threatens productivity in cupuassu and Brazil nut
under current no-input management practices. However, this study also demonstrates that
cupuassu roots do proliferate when they encounter P-enriched patches in close proximity to
its canopy, resulting in nearly a 40% increase in root tissue P content. While peach palm root
length and mass was greater than that of cupuassu in alley ingrowth cores, root length did not
differ between the two agroforest components in cores buried in rows, near the dripline of the
cupuassu canopy. Thus, despite the presence of neighboring peach palm roots, cupuassu P
nutrition might benefit from directed application of organic residues and/or fertilizer beneath
and around the canopy dripline, although further on-farm study is required before this can be
recommended.

87
Conclusions: Implications for Amazonian Agroforest Sustainability
The results of this study demonstrate that six to eight years following clearing, labile
inorganic phosphorus decreases when native forest is converted to agroforest in western
Amazonia, which could result in early P-limitations to agroforest productivity in P removal
is not offset with additions. Clearly, the role of less labile Pi and Po pools in maintaining P
availability in perennial cropping systems deserves further research. However, the decrease
in agroforest labile Pi six years after forest conversion represents not only an irreplaceable loss
from the system under current management practices, but more importantly, a significant
difference in P cycling between tree-based agroecosystems and native forest. Like secondary
forest ecosystems, storage in live tissue represents a significant P sink during early stages of
vegetational succession, and presumably, much of the agroforest’s future standing biomass
production requirements would be met by nutrient fluxes in the intrasystem cycle as the tree-
based agroecosystem reaches steady state (Attiwill and Leeper 1987). For example,
Polglase et al. (1992) found that M-l Pi in Eucalyptus regions forests decreased from 34 mg
kg'1 at time zero to 2.3 mg kg'1 at age 16, and remained constant thereafter in stands aged 40
to 80 years old.
In contrast, P removal with the harvest of agroforest products, estimated during the
sixth year following establishment to be between 3.2 and 4.0 kg P ha'1 yr'1, represents a
permanent loss from the total soil P stock. While Po mineralization may sustain production
requirements of native forest at steady-state, the decrease in agroforest labile Pi indicates that
Po pools cannot adequately restore solution Pi as it is taken up by an aggrading
agroecosystem undergoing P removal with successive crop harvests. Unless replenished

88
through external inputs, this drain on soil P will only increase as the system matures and
harvest of agroforest products continues. Arguably, the 25 to 50% reduction (depending on
the extract) in readily-extractable Pi six years after forest conversion, represents less than one
percent of the agroforest’s total soil P stock (410 mg kg'1), and the large difference between
total P and extractable Pi may include pools that are plant-available over the long term.
However, the rate at which P is supplied to agroforest plants determines the system’s
productivity on a short term basis, and hence, its potential for economic sustainability. The
decrease in agroforest readily-extractable Pi relative to that in native forest soils demonstrates
that it is being taken up more rapidly than it can be restored by other P pools in the soil
system, and this decrease in “labile” P may affect components of the system differentially is
one species, for example, is has “access” to less readily-soluble P forms while another is not.
Therefore, it cannot be assumed that the processes sustaining mature native forest ecosystems
will maintain productivity in all agroforest components without management intervention.
While it is unlikely that production in the agroforest will cease entirely in the short
term, continually low or reduced productivity may exclude commercial agroforestry from
consideration as an economically viable alternative to other more destructive land uses in
Amazonia. In the absence of perceived economic sustainability, farmers will clear more forest
to establish new agricultural systems, because forest land is not a scarce resource in this
region. In ail five focus group discussions held with RECA farmers, producers admitted that
they continued to clear forest every year following agroforest establishment to plant more
perennial crops. Their objective was to maintain household income when productivity of the
first agroforestry systems planted ultimately fell. Coupled with their fear of aggressive

89
competition by the peach palm, these farmers did not believe that the initially “high”
productivity of agroforests could be maintained, and thus, they chose to minimize economic
risk by planting new systems every year. .Although the producer’s concerns are
understandable, perceived and managed in this way, agroforests do not offer a means of
decreasing deforestation rates on Amazonian small farms.
Undoubtedly, the sustained production in Amazonian agroforests will require practices
that both offset nutrient export with crop harvest using soil amendments, as well as enhance
organic matter cycling to maintain soil solution P concentrations and protect the system from
further nutrient losses. Aside from cost, a major constraint to the use of most organic and
inorganic amendments in these soils could be that phosphate ions are adsorbed almost as fast
as they are released into solution, either through dissolution or mineralization. Hands et al.
(1995) recommend that inorganic P be added to the mulch layer of alley cropping systems to
avoid fixation by the mineral soil. In this case, directed fertilizer application in fallen litter
beneath the cupuassu canopy, where root growth was shown to be comparable to that of
peach palm, would add P, stimulate organic matter decomposition and mineralization, and
perhaps encourage greater fine root growth towards sources of mineralizing P on the
agroforest floor. Obviously this and other potential management practices need to be tested
before they can be recommended, and further participatory on-farm research is necessary to
design management strategies that are both economically feasible and practical so that
commercial agroforestry systems do indeed offer a sustainable alternative to more destructive
land uses driving Amazonian deforestation.

CHAPTER 5
LITTER DYNAMICS AND MONTHLY FLUCTUATIONS
IN SOIL PHOSPHORUS AVAILABILITY IN AN AMAZONIAN AGROFOREST
Introduction
Maintaining phosphorus (P) availability to crop plants growing in highly weathered
soils is one of the largest challenges facing the development of sustainable agroecosystems
throughout much of the humid tropics (Sanchez 1976). Previous studies have shown that
less than 1% of total P in Oxisols and Ultisols of South America’s Amazon Basin is
extractable using procedures for the most common indices of P availability (Tiessen et al.
1993, Dias-Filho et al. in press, Chapter 4), and it is estimated that P deficiencies limit
crop production in 90% of the region’s upland soils (Nichoiaides et al. 1985, Smyth and
Cravo 1990). Much of the soil P stock is geochemically bound to iron and aluminum
oxides in forms that are largely unavailable for uptake, rendering plant P nutrition highly
dependent upon biologically-mediated transformations of organic P (Cross and
Schlesinger 1995, Hedley et al. 1995). Thus, in non-fertilized agroecosystems,
fluctuations in soil P availability over a growing season are often associated with factors
controlling litter decomposition and Pi mineralization from soil organic matter, such as
temperature, moisture and resource quality (i.e. the biodegradability of organic material),
as well as with seasonal variations in P demand by plants and competing microbial
populations (Tate 1984, Stewart and Tiessen 1987, Lajtha and Harrison 1995). In tree-
90

91
based ecosystems, such as perennial crop-based agroforests. Pi mineralized from
decomposing litterfall and dead roots contributes to the long-term productivity of these
systems, although the highest rate at which Pi is released from various organic sources
may not necessarily coincide with periods of greatest demand by the system’s crop
components. It is the rate of Pi release by mineralization, rather than the amount of
organic P (Po) present, that frequently controls Po availability to plants (Tate 1984).
Consequently, the most efficient use of soil amendments, including inorganic fertilizers,
green manures and organic residues, often requires synchronized and directed application
during periods of high demand by crop plants and low soil availability (Young 1989,
Fernandes et al. 1997). For this reason, monitoring spatial and temporal fluctuations in
soil P availability in relation to the production cycle of an agroecosystem is important to
developing management practices that sustain productivity in low/no input systems.
Assessing short term changes in soil P availability is, however, difficult using the most
common soil extracts because they often solubilize portions of solid-phase P not available
to plants (Bolán 1991). Moreover, soil extractions carried out in laboratories do not
necessarily reflect the ambient conditions that control P mineralization, or the
biogeochemical processes that cause short term fluctuations in soil solution Pi, such as
microbial immobilization, adsorption to soil solids, and plant uptake (Lajtha 1988).
In general, resin extracts more closely simulate the physical action of plant roots
because exchangeable ions, such as H2P04', are desorbed from soil solids without drastic
changes in soil chemistry (McKean and Warren 1996). Conceptually, the resin acts as a
sink for phosphate ions desorbing from soil solids, continually removing them from

92
solution so that an equilibrium between the solid and solution phases is not established
(Vaidyanathan and Talibudeen 1970). In a laboratory study, Parfitt and Tate (1994) used
resin-impregnated membranes to measure P mineralization by extracting the soil to
exhaustion before and after an incubation period. Under field conditions, especially in
soils with high sorption capacities, resins behave more like dynamic exchangers, so that P
measured in resin extracts represents a composite index of the soil’s retention capacity,
microbial P demand, and the status of plant available P (Cooperband and Logan 1994).
As a composite index, resin-filled bags or impregnated membranes are useful for making
in situ comparisons of temporal and spatial variations in P availability within or among
systems (Huang and Schoenau 1996, Fernandes and Coutinho 1997). Fluctuations in P
availability under field conditions have been monitored in a number of different ecosystems
using resin bags placed in or on top of the soil for varying lengths of time (Gibson 1986,
Lajtha 1988, Giblin et al. 1994, Yavitt and Wright 1996). Krause and Ramlal (1987) used
resin bags to show that P availability over a four month period remained 2.5 times greater
in soil under a clear-cut area than in adjacent forest, presumably due to increased
decomposition stimulated by higher temperatures and forest floor mixing resulting from
the timber harvest activities. The relatively new use of resin-impregnated membranes as
an index of P availability in field conditions is especially attractive because the two-
dimensional rigid structures can be placed in soil or litter to achieve maximum surface area
contact with minimal disturbance (Cooperband and Logan 1994, Huang and Schoenau
1996), and unlike resin-filled bags, resin membranes do not trap fine roots and soil
particles that interfere with analyses (Fernandes and Warren 1996). Numerous studies

93
have demonstrated that ion concentrations in extracts from resin membranes correlate
closely with plant uptake, as well as with more traditional indices of nutrient availability,
including resin-filled bags (Abrams and Jarrell 1992, McLaughlin et al. 1993, Cooperband
and Logan 1994, Fernandes and Warren 1996, Huang and Schoenau 1996, Fernandes and
Coutinho 1997). In agroecosystems, seasonal monitoring of soil P availability using anion
exchange resin membranes (AERMs) could be instrumental in developing fertilizer
recommendations or improving soil organic matter management to maintain P availability
during periods of high productivity and demand.
The present study is part of a larger project examining phosphorus cycling in an
eight-year-old farmer-managed Amazonian agroforest. The objective was to monitor
resin-extractable soil P monthly using anion exchange resin membranes (AERMs) over 14
months in the agroforest to determine if changes in P availability were related to (a)
factors controlling organic matter decomposition, such as precipitation, soil moisture and
temperature, as well as litter quality, and (b) seasonal fluctuations in agroforest
productivity and P requirements. Decomposition and C, N, and P dynamics in leaf litter
from the system’s two primary perennial components were studied to determine if soil P
availability might be related to species differences in (a) litter quality, specifically, initial
leaf N and P contents, and C-to-N and C-to-P ratios, and consequently, (b) differing rates
of P release or immobilization from organic matter.

94
Methods
The Study Site
The study took place on-farm in a 2.0 hectare eight-vear-old peach palm (Bactris
Gaesipaes Kunth)-cupuassu (Theobroma grandiflorutn) agroforestry system located in
the rural community of Nova California. Peach palm, a fast-growing multi-stemmed
monocot, is planted by farmers for heart-of-palm and its beta-carotene- and energy-rich
fruits. Cupuassu is a broad-leaf middle canopy component of many Amazonian
agroforests, the primary product of which is a creamy fragrant pulp harvested from its
large pods. Both species are native to Amazonian forests, and appear to tolerate the
acidic nutrient-poor soils that underlie the non-flooded terra firme vegetation. The
agroforest chosen for study was one of the oldest in the region and its management was
typical of that practiced by most farmers. Like most of the agroforestry systems in the
region, it was established on an area previously occupied by terra firme forest. The
cupuassu and peach palm seedlings were originally planted at a stocking density of 190
and 150 trees ha'1, respectively, at a spacing of 7 x 4 meters. A more detailed description
of the land-use history of the study site is provided in Chapter 2. All measurements for the
present study were taken from five 0.10 ha blocks established on the site, each separated
by a buffer strip of two to three tree rows.
Data collected by the Federal University of Acré’s meteorological station (UFAC
unpublished) comparing monthly rainfall and mean daily temperatures in the region during
the study period with eleven-year averages are presented in Figs 5-la and b. The region’s
soils are typically Oxisols or Ultisols. Soil on this particular site was identified

95
30
29
28
O 27
S¡T 26
I 25
V_
0)
g. 24
£ 23
22
21
20
450
400
_ 350
g 300
o 250
200
Q.
^ 100
50
0
Oct Dec Feb Apr Jun Aug Oct
Month
Fig. 5-1. (a) Monthly rainfall, and, (b) mean daily temperatures from October 1995
through September 1996 compared to 11-year averages (± one standard deviation) in Rio
Branco, Aeré, Brazil (150 km east of the agroforest site in Nova California, Aeré, UFAC,
unpublished).
Oct Dec Feb Apr Jun Aug Oct

96
as a clayey (66% clay, 0-85 cm), mildly acidic (pH 5.1), Typic Kandiusult with high base
saturation (92%, 0-20 cm) but low concentrations of dilute-acid-flouride- (1.0 mg kg'1, 0-
85 cm) and resin-extractable (to exhaustion, 1.1 mg kg'1, 0-20 cm) Pi (Chapter 5). The
total P content in the top 20 cm of soil from the study site was 535 mg kg'1, and soils from
eight six-year old agroforests within a 30 km radius of the study site had similarly low
concentrations of extractable Pi and total P contents (Chapter 4).
Periods of High Productivity: Litterfall and Fruit Production
Peak litterfall and fruit harvests were used as an indication of periods of high
productivity and resource demand in the agroforest. Over one year, freshly fallen litter
from the agroforest’s perennial components was collected biweekly from 35 randomly-
located 1.0 m2 mesh traps (7 per block) installed 0.5 m from the soil surface. The litter
was sorted and weighed by species and plant part. All fruit harvested by farmers from the
five blocks was also weighed. Subsamples (approximately 100 g per block per collection)
of both litter and fruit were pooled by month, oven-dried at 60 °C, reweighed for water
content determination, and ground to pass through a 1-mm mesh sieve. The tissue P
content was determined by block-digesting a 200 mg sample of the ground plant material
with concentrated H2S04/H202 at 360°C (Thomas et al. 1967) and analyzing the cleared
supernatant for P04'3 using inductively coupled argon plasma (ICAP) spectroscopy.
Litter Decomposition. C. N, and P Dynamics, and Turnover
The standing stock of litter mass on the agroforest floor was estimated by species
as the mean of 4 (one every three months) collections from 20 randomly-located 0.25 cm2
quadrats (4 per block). Concurrent with the season of peak fine litterfall, freshly fallen leaf

97
litter from peach palm and cupuassu trees was collected the first week of October 1995.
The samples were air-dried prior to placement in 15 x 25 cm nylon bags (mesh size = 1
rrrnr ). Because peach palm leaves attain up to 4 m in length (including petiole), a cross
section, 20 cm in length, was cut from approximately the middle of each leaf, so that the
sample in each decomposition bag contained 20 cm of whole rachis and pinna from one
palm leaf. This was equal to 34 ± 5 g dry leaf mass per decomposition bag. Cupuassu
leaves typically curl length-wise shortly after abscising from the tree. Approximately 3 to
4 entire (curled) cupuassu leaves, or 10 ± 2 g dry leaf mass, were placed in each cupuassu
decomposition bag. Although the dry mass placed in decomposition bags differed
between the two species, the bags were filled so that the entire surface area (375 cm2) was
filled uniformly with one layer of leaf material.
A total of 90 bags per species were placed in the field during the second week in
October 1995; one for every anticipated bimonthly collection in three randomly-selected
locations in all five agroforest plots. One bag per species per subplot location was
collected for dry matter and nutrient content determination every two months, beginning
in December, 1995. Fifteen samples of both species were weighed, oven-dried at 60°C to
a constant weight, reweighed to determine the initial dry mass of leaf litter, and ground.
These samples were used to calculate a correction factor for the dry matter content of
bagged non-oven-dried leaves. Leaf litter P content was analyzed in the same manner
used for litterfall and fruit The N and C contents of ground leaf litter were quantified
after Dumas combustion in a Carlo Erba NA2500 C&N analyzer. Dry matter, P, N, and C

98
contents of litter samples retrieved from the field every two months were analyzed in the
same manner. All chemical analyses were conducted in triplicate.
Mass loss from decomposing leaf litter was analyzed using Olson’s (1963)
standard exponential decay function: X/Xq = e kl where X/Xq is the fraction of initial mass
remaining (X is the litter mass at time t, X„ is the initial mass), t is time, and k is the decay
constant (the slope of the linear regression) fit to litter for each species. Turnover (1/k)
of leaf litter of each species was compared to total litterfall turnover (or mean residence
time) calculated as the quotient of the species’ mean for annual standing litter stock and
total annual litterfall. Turnover calculated as 1/k assumes that litterfall and accumulation
on the forest floor is at steady-state (Singh and Gupta 1977).
Changes in chemical composition in leaf litter over time were analyzed using
absolute values of C, N, and P contents, calculated as the elemental concentrations of leaf
litter from the initial and subsequent bimonthly collections multiplied by the fraction of the
original litter mass remaining, and expressed as a percent of the original C. N, or P
fraction content.
Fluctuations in Soil P Availability
Anion exchange resin membranes (AERMs) were used to monitor monthly
fluctuations in “bioavailable” P, or solution Pi, in the top 5 cm of mineral soil, particularly
changes in P availability associated with litter decomposition on the agroforest floor.
Specifically, AERMs were used to determine if agroforest soil Pi availability 1) varied in
response to periods of high productivity when P demands are greater in the system, 2)
fluctuated seasonally in response to changes in precipitation, soil moisture and

99
temperature, and, 3) differed between root mat organic matter, bare mineral soil, and soil
covered with fallen litter. The root mat of peach palm rises up to 1.0 meter above the soil
surface, encircling the multiple stems of each individual. Fallen leaves and reproductive
parts accumulate and decompose in this superficial mat of adventitious roots, potentially
providing a non-soil source of nutrients for uptake by the palm.
Methods for membrane preparation and placement were similar to those described
by Cooperband and Logan (1994). For each monthly measurement, 72 12.5 cm2 (2.5 x
5.0 cm) strips were cut from one 90 cm2 AERM sheet (type 204-U-435, Ionics,
Watertown, MA) and rinsed with deionized water (DI FLO). This size strip contains
approximately 1.0 g dry resin and has the capacity to sorb 272 mg P. After attaching a
thread to the end of each strip, the membranes were eluted with 0.5 M CH3COONH4
(ammonium acetate) for 12 hours, and then re-rinsed with DI FLO to remove excess
solution. Cooperband et al. (In press) found that AERMs sorbed significantly more Pi
when eluted with CH3COONH4 than with NaCl.
From October 1995 through January 1996, monthly changes in overall P
availability in agroforest soil were measured from 8 randomly-located membranes per
block. During the second week of each month, the membranes were inserted vertically
into a slit made in the top 5 cm of soil using a trowel. Following membrane placement,
the opening was reclosed by pressing soil against both sides of the strip to ensure close
contact between membrane and soil. The threads attached to each strip were tied to flags
for later identification of membrane location. Four membrane strips per block were also
placed in the decomposing organic matter accumulated in the peach palm’s superficial root

100
mat to monitor P availability in this non-soil-root interface. By February, the organic
matter in the palm root mat had disappeared completely, leaving nothing but bare roots, so
membrane placement was discontinued in this location until September when litterfall had
again accumulated in the root mats. From February through November, AERMs were
placed (as described above) in bare mineral soil in agroforest alleys, and in soil covered by
fallen leaf litter beneath the canopies of peach palm and cupuassu. Four membrane strips
per soil location (alley, cupuassu, palm) were placed in each plot, and the randomly-
selected locations changed each month. Throughout the 14-month study period,
membranes in all locations were removed after 10 days, rinsed thoroughly with DI H20 to
remove debris, placed in polypropoiene vials filled with 60 ml DI H20 plus one drop 5%
mercuric chloride (to prevent bacterial and fungal growth), and refrigerated until
extraction. Twelve membrane strips per month were reserved for use as blanks, and
otherwise treated exactly the same as those placed in soil.
Orthophosphate sorbed onto the AERMs was extracted (exchanged?) by shaking
each membrane with 20 ml 0.5 M CH3COONH4 in a 50 ml centrifuge tube on a
reciprocating shaker for two hours. The membranes were removed from solution and the
extracts were analyzed for Pi concentrations colorimetrically using the molybdate blue
method (Murphy and Riley 1962) on a Milton Roy Spectronic 1201 spectrophotometer.
Phosphorus concentrations per 20 ml of extract were expressed on a per membrane basis
(/¿g membrane'1), or per kg resin, after subtracting mean monthly Pi concentrations in
extracts from membrane blanks. Phosphorus concentrations from field membrane extracts
that were lower than that of blanks were considered to be zero.

101
Concurrent with membrane placement and pick-up throughout the 14-month study
period, gravimetric water content in the top 5 cm of soil was measured twice monthly
from fresh samples collected from four random locations per plot. The soil samples were
oven-dried to a constant mass, and soil moisture was expressed as a percentage of dry
mass. Soil temperature was also measured using dial thermometers placed in the top 5 cm
t
of soil in the same general location from which soil moisture was sampled.
Statistical Analyses
Differences in P availability by membrane location or month were analyzed in a
two-way ANOVA model with these effects and their interactions using SAS (SAS
Institute, Inc., Cary, NC). Orthogonal contrasts were used to identify specific differences
in P availability among membrane locations and months. To analyze the difference in
overall soil P availability compared to that found in root mat organic matter, AERM-P
values were pooled across the 3 soil membrane locations (cupuassu litter, peach palm litter
and bare mineral soil) by month and used in a two-way ANOVA model. The months
during which root mat P availability was not measured were eliminated from the analysis.
Regression analyses were used to determine if monthly changes in dry matter and absolute
mass of C, N, and P, as well as the decomposition constant (K) of leaf litter differed
between the two agroforest components. A t-test was used to determine if initial and final
C, N, and P concentrations of leaf litter differed between the two species. Litterfall and
fruit harvest data represent the monthly mean of five blocks ± one standard error; a
statistical test could not be performed on these data due to the lack of independence
among blocks.

102
Results
Litterfall and Fruit Production
Combined litterfall and fruit production in the agroforest was highest during the
mid rainy season months of January and February when a peak in peach palm fruit harvest
was observed (Figs. 5-lb and 5-2). From November 1995 through March 1996, the
heavier of the two peach palm production periods, palm fruit harvest ranged from 9.6 ±
2.4 to 157.5 ± 26.9 g m'2. Harvest of cupuassu fruit was considerably less, ranging from
1.0 ± 0.02 to 24.9 ± 0.1 g m'2 during the months of January through June. However,
monthly cupuassu litterfall production peaked during this period (12.2 ± 10.4 to 25.3 ±
21.3 g rri2), due to the abscission of aborted fruit. Overall productivity in the agroforest
was lowest during June and July, the two driest months of the study period. August was
marked by unseasonably high rainfall, an increase in peach palm litterfall, the beginning of
the second season of peach palm fruit production, and a peak in cupuassu leaf litterfall.
Peach palm litterfall was highest during the early rainy season months of September and
October, 1996. Total litterfall production by peach palm and cupuassu trees over a
twelve-month period was 623 and 99 g m'2, respectively. A breakdown of dry matter and
C, N, and P contents of total litterfall by species and plant part is presented in Chapter 6.
Decomposition and C. N. and P Dynamics
Initial P concentrations of leaf litter collected in October 1995 were greater for
peach palm (0.05 ± 0.003 %) than for cupuassu (0.022 ± 0.001 %), but C concentrations
were higher in the latter (50.5 ± 0.3%) than in the former (44.6 ± 0.2%) (P < 0.0001). As

Biomass (g m'2)
103
250
225 H
200
175 -
150 -
125 -
100 -
75 -
50 -
25 -
0
m
â– xm
â– XW.
wa
m
m
m
Wk
rm-
MM
m
m
m
m
M
?á§t
m
m
1
'VX/sX'
Ma
Wm
Í
W>X
WM
M>x
ww
ÍSS
palm litter
WWMh palm harvest
cupuassu litter
cupuassu harves
Hf
Oct Dec
Feb
Apr
Month
Jun
¡Ü
Aug Oct
Fig 5-2. Mean monthly litterfall and fruit harvest by peach palm and cupuassu, two
perennial components of an eight-year-old Amazonian agroforest. Cupuassu litterfall
mass increased during the rainy season because of an increase in aborted unharvested fruit,
but peakrd leaf litter production occurred in August, 1996. Data are monthly means from
five blocks (±one standard error).

104
a result, the C-to-P ratio for cupuassu leaf litter was nearly 2.5 times greater than that of
the palm (P¿ 0.0001). After 12 months, the absolute mass of P contained in peach palm
leaf litter was 45% of that initially measured (Fig 5-3a), whereas that in cupuassu litter
increased over time so that by the end of the study period, this species’ leaf litter P mass
was 70% greater than that initially measured (Fig. 5-3b). Initial leaf litter N
concentrations (0.97%) did not differ between the two species, but the C-to-N ratio of
cupuassu litter was greater than that of the palm (P< 0.007). There was no significant
change in N mass of cupuassu leaf litter throughout the course of 12 months, and despite
similar initial leaf litter N concentrations, monthly losses ofN mass from peach palm litter
were greater than those for cupuassu (P^ 0.0001). Similarly, the fraction of initial C mass
remaining in peach palm leaf litter after 12 months (29.7 ± 1.2%) was half that of
cupuassu (62.0 ± 1.8%). Initial N and P concentrations of abscised peach palm leaflets
(1.33 ± 0.09 and 0.09 ± 0.005 %, respectively) were higher than those of the composite
nutrient content of rachis and leaflets, and the leaflet fraction decomposed so rapidly that
by the end of the 12-month study, only rachis remained in the decomposition bags.
Throughout the study period, monthly decreases in peach palm leaf litter dry
matter and elemental mass were significantly greater than those of cupuassu (P < 0.0001).
After one year, only 40% of the initial peach palm leaf litter mass remained in the
decomposition bags, compared to 75 % of original mass remaining in cupuassu bags.
Accordingly, the decay constant (k) for peach palm leaf litter (2.12) was five-fold greater
than that for cupuassu (0.42) (P < 0.0001). Leaf litter turnover time, using 1/k as an
estimate, was 2.4 years for cupuassu and under 6 months for peach palm.

105
200 -|
180 -
vO
160 -
O)
c
'c
140 -
CO
E
120 -
d)
CH
(/)
100 -
CO
CO
80 -
To
60 -
40 -
20 -
A.
--A-- p
Oct Dec Feb Apr Jun Aug Oct
Month
Fig. 5-3. Changes in the absolute mass of C, N, and P in decomposing litterfa.ll leaves
from (a) peach palm, and (b) cupuassu trees. Data are monthly means from five blocks
(±one standard error).

106
Estimates of litter turnover times, calculated as the quotient of standing litter to
total annual littterfall, or mean residence time, differed from 1/k. The turnover time of all
cupuassu litterfall (including reproductive parts, 0.91 yr) was 2.5 times less than that
predicted for leaf litter alone using 1/k (Table 5-1). The mean residence time of total
peach palm litterfall (including woody petioles, 0.82 yr) was greater than that predicted for
leaves in decomposition bags (0.47 yr). Total standing litter mass of either species did not
differ among the four sampling dates.
Table 5-1. Dry matter, P and N content and turnover times of standing stock
litter and total annual litterfall for three Amazonian agroforest species. Stocks
and fluxes of P and N were calculated as the product of dry mass and nutrient
content for each species and plant part. Turnover was the quotient of standing
stock litter and litterfall. Data are means of five blocks (± one standard error).
Peach Palm
Cupuassu
Standing stock litter (g m'2)
515.2 ± 82.6
78.9 ±9.1
Standing stock litter P (g m'2)
0.29
0.02
Standing stock litter N (g m'2)
5.11
0.89
Total litterfall (g m'2 yr'1)
629.0 ± 18.3
87.2 ± 5.9
Litterfall P flux (g m'2 yr'1)
0.70
0.08
Litterfall N flux (g m'2 yr'1)
8.66
1.34
Litter turnover time (yr)
0.82
0.91
Litter P turnover time (yr)
0.41
0.25
Litter N turnover time (yr)
0.56
0.75
Temporal Fluctuations in Soil P Availability
Monthly values for AERM-P, (averaged across membrane soil locations from
February through November 1996), fluctuated significantly throughout the study period,

107
Oct Dec Feb Apr Jun Aug Oct
Month
Fig. 5-4. Fluctuations in soil P availability in an eight-year-old Amazonian agroforest
monitored using anion exchange resin membranes (a) averaged across membrane locations
from October 1995 through November 1996, and (b) in bare mineral soil and soil covered
by either peach palm or cupuassu litter from February through November 1996. Data are
monthly means (± one standard error).

Soil Moisture (%)
108
40
35
30
25
20
15
10
Month
Fig. 5-5. Average monthly moisture and temperature (± one standard error) in the top 5
cm of soil over 13-month period in an eight-year-old Amazonian agroforest system.
Soil Temperature (°C)

109
especially during the rainy season when membrane P fell from 1.62 ,ug in December to
0.014 ¿¿g in January (Fig. 5-4a) (P < 0.0001). Overall, AERM-P was greatest in
November and December of 1995, which corresponded with the beginning of the rainy
season (when monthly precipitation surpassed 100 mm) and an increase in soil moisture
during the latter month (Figs. 5-1 and 5-5). January’s drop in AERM-P coincided with
an increase in peach palm fruit harvest, which later peaked the following month (Figs.5-2
and 5-4a). During the mid- to late-rainy season (February through April), AERM-P
increased somewhat from its low point in January, but remained below values observed
during the early rainy season. By the mid dry season (June and July), soil moisture,
temperature and AERM-P was significantly lower than that measured during the early and
mid rainy seasons (Figs. 5-1, 5-4a and 5-5) (P< 0.001). In August, an increase in AERM-
P was observed (P< 0.006), which corresponded with an unseasonably high amount of
precipitation and a rise in soil temperature. Both rainfall and AERM-P dropped in
September, and then rose again in October, but soil moisture content and temperature
continued to increase from August through October.
Spatial Fluctuations in P Availability
From February through November, average P availability was higher in soil
covered by peach palm litter (0.393 ± 0.134 ¿¿g membrane'1) than in bare mineral soil
(0.185 ± 0.061 ¿¿g membrane'1) (P ¿ 0.030, Fig 5-4b). Specifically, membrane P was
greater in soil beneath palm litter near the height of the rainy season in February, and
during the early rainy season months of October and November, 1996 (P< 0.005). In
general, membrane P in bare mineral soil did not differ from that underlying cupuassu

110
litter, except during the month of August when there was a sharp increase in P availability,
followed by a decline in October. Phosphorus availability in soil covered by peach palm
litter was also greater than that of soil beneath fallen cupuassu leaves (P< 0.06). During
the seven months in which it was possible to measure AERM-P in the root mat of peach
palm, membrane P in the decomposing organic matter accumulated in this location was
always greater than that found in bare mineral soil or in soil covered by fallen litter (P<
0.01, Table 5-2).
Table 5-2. Monthly values for bioavailable phosphorus in organic matter accumulated in
the superficial root mat of peach palm and in the top 5 cm of bare mineral soil in an eight-
year old Amazonian agroforest. Available P is always greater in root mat organic matter
Month
Bioavailable P (//g membrane'1)
Organic matter
(root mat)
Mineral soil
(all locations)
October ‘95
1.41 ±0.38
0.41 ±0.08
November ‘95
30.00 ± 12.0
1.62 ±0.45
December ‘95
5.94 ±0.56
1.78 ±0.37
January ‘96
0.81 ±0.29
0.02 ±0.004
September ‘96
8.22 ±4.53
0.22 ± 0.02
October ‘96
43.29 ±24.39
0.69 ±0.16
November ‘96
9.46 ± 1.63
0.93 ±0.33

Ill
Discussion
Litter Decomposition and P Dynamics
Many studies have shown that litter chemical properties such as lignin, polyphenol,
and tannin concentrations, significantly influence decomposition and mineralization rates in
tropical tree litter (Palm and Sanchez 1991, Constantinides and Fownes 1994, Mesquita et
al. 1998). Nevertheless, initial N and P concentrations in litter, as well as C-to-N and C-
to-P ratios, often provide a good indication of litter biodegradability (Swift et al. 1979,
Taylor et al. 1989, Cortez et al. 1996). Despite the fact that both peach palm and
cupuassu leaf litter had similar N concentrations, dry matter and elemental loss from
cupuassu leaves were much lower, and the patterns of loss differed considerably between
the two agroforest components. Peach palm leaves appeared to lose C, N and P, at
somewhat similar rates, while the absolute mass of N in cupuassu leaves remained
constant, and that of P increased. The initial P concentrations of leaf litter from both
agroforest species were low compared to other studies of tropical trees, which range from
0.05 to 0.22 % (Palm and Sanchez 1990, Montagnini et al. 1993, Cornejo et al. 1994,
Songwe et al. 1995, Byard et al. 1996). Net immobilization, as indicated by an increase in
litter nutrient content above 100 percent of the original mass, occurs in substrates deficient
in the nutrients needed by decomposers for metabolic processes (Palm and Sanchez 1990),
and the duration of P immobilization in tropical tree leaf litter has been shown to vary
from a month to several years (Montagnini et al. 1993, Cornejo et al. 1994, Songwe et al.
1995). Net P immobilization in cupuassu leaf litter, presumably induced by the initially
low Pcontent and high C-to-P ratio of this substrate, began during the mid-rainy season, at

112
least four months after abscission from the tree, and continued throughout the study
period. Because immobilization takes place when decomposing organisms utilize and
accumulate nutrients from the soil solution (Palm and Sanchez 1990), the fact that
cupuassu leaves acted as a sink for P as decomposition proceeded likely explains why
AERM-P in soil covered by this species leaf litter was generally low. In contrast, net P
mineralization occurred from bagged peach palm leaf litter, as demonstrated by a decrease
in litter P mass over time, perhaps because the initial composite P concentration of palm
leaflet and rachis litter was twice as high as that of cupuassu. and the C-to-P ratio was also
significantly lower. In addition, the hundreds of small tender leaflets comprising over half
the mass of a peach palm leaf provide a much greater surface area of edge for
decomposers to attack, and this undoubtedly facilitates the breakdown and release of
nutrients from this litter fraction. Consequently, overall AERM-P was greater in soil
covered by palm litter than by that of the more P-deficient cupuassu leaves.
The standing litter/litterfali quotient used to estimate total litterfall turnover
suggests that P mineralization from cupuassu surface litter occurs within approximately
three months. This may be due to, in part, the fact that the turnover time calculated as the
quotient of standing litter and litterfall comprised all fallen litter, including reproductive
pans that have relatively high P concentrations (0.12 to 0.17%), increasing the likelihood
that this fraction decomposes more rapidly than leaf litter. Aborted cupuassu fruit
accounted for 70% of litterfall mass, but less than 20% of standing litter stock. When
measuring soil P availability, the AERMs were always placed in soil beneath cupuassu leaf
litter. However, the lack of difference in the standing litter stock among the four sampling

113
dates suggests that cupuassu litter does not accumulate on the agroforest floor on a yearly
basis, and there was some evidence to suggest that this species’ leaf litter may decompose
more rapidly than the results of the litterbag study indicate. Although the litterbag
technique is widely-used for estimating decomposition rates, acknowledged shortcomings
of this method include the exclusion of soil macrofauna by the mesh size of the bag,
microclimate alteration, and less soil surface contact with bagged litter (Swift et al. 1979).
The important role of soil invertebrates in the comminution of litter is widely recognized
(Singh and Gupta 1977, Lavelie et al. 1992), and large holes, presumably created by
insects, were regularly observed in (unbagged) cupuassu leaf litter. These holes were
absent in leaf litter confined to mesh bags, suggesting that macrofauna may be important
during the initial stages of cupuassu leaf decomposition. Nevertheless, lower initial P
contents and a higher C-to-P ratio of fallen cupuassu leaves, compared to peach palm, do
suggest that P release from this fraction of litter is slower than that of the palm.
The lower turnover time of total peach palm litterfall (standing litter/litterfail
quotient), compared to that estimated for leaf litter alone, may be due to the fact that
approximately 28% of fallen peach litter was comprised of woody petioles that have very
low N concentrations (0.80 ± 0.06 %), resulting in a relatively high C-to-N ratio (68)
compared to that of leaflets and dicot leaves (29 to 38). The chemical composition and
physical structure of palm petioles, which are several centimeters thick, likely precludes
rapid decomposition of this fraction. The absence of this more recalcitrant constituent of
palm litter from the decomposition bags may explain why the turnover time of leaf litter
(1/k) was greater than that of standing litter. Ewel (1976) attributed the slow

114
decomposition of palm (Orbignya spp.) leaves to structural characteristics. Furthermore,
a comparison of peach palm iitterfall in October 1995 and in October 1996 suggests that
litterfall in this species had not yet reached a steady-state, as indicated by greater fallen
litter during the latter month, and in such circumstances, turnover times would be
underestimated However, using either estimate of turnover, it appears that peach palm
litter remains on the agroforest floor for less than one year.
Anion Resin Exchange Membranes and Soil P Availability
As a composite index, the AERMs appeared adequately sensitive to detect
monthly fluctuations in soil solution P, despite very low concentrations of dilute-acid
flouride- and resin-extractable soil P. The 14-month average AERM-P content extracted
from membranes placed in soil (0.51 ± 0.14 /¿g membrane'1, or 0.51 mg kg'1 resin) was
much lower than values reported by Yavitt and Wright (1996) who found that monthly P
accumulation in resin bags placed in the top 10 cm of a forested Panamanian Alfisol varied
from approximately 2 to 15 mg kg'1 resin over a 5 year period. In contrast, AERM-P
found on membranes placed in the organic matter in the palm root mats was comparable
to, and sometimes exceeded, values cited in the Panamanian study. The large difference in
monthly soil P availability between the studies could be attributed to both differing
sorption capacities and P contents of the two soils. The high clay and low extractable-P
content of the agroforest soil is typical of other tropical Ultisols, and increases the
likelihood that P released into the soil solution is quickly sorbed onto clay surfaces or
taken up by competing plant roots and microbial populations (Van Wambeke 1992,
McKean and Warren 1996). Decomposing litter caught in the superficial palm root mats

115
has little if any contact with soil (until smaller fragments are washed down through the
roots by rainfall), reducing the likelihood that mineralized P was quickly sorbed to soil
solids.
Cooperband and Logan (1994) note that P diffusion within a resin-filled bag may
differ from that in the soil solution, and unlike the two-dimensional membranes, P sorbed
to resins in a bag likely has less contact with clay surfaces. Because of the high surface
area contact between soil and membrane, it is possible that P sorbed onto AERMs is
reexchanged or immobilized by microbes during the 10-day field incubation period. In
contrast to the assumption that AERMs act as infinite sinks for P, Cooperband and Logan
(1994) demonstrated that the behavior of AERMs in situ is influenced by soil mineralogy,
P retention capacity and microbial-biological demand. During the dry season months of
June and July, when both soil moisture (and thus P diffusion rates) and AERM-P were
low, extracts from membrane blanks, which contained the usual trace amount of P, often
had higher concentrations of P than those extracted from field-incubated membranes. This
suggests that the trace contamination originating from the ammonium acetate eluant used
to saturate the AERMs was immobilized by microbes or desorbed from the membranes’
surface during the incubation period. The fact that AERMs potentially behave as dynamic
exchangers in field conditions should not detract from their use as a qualitative composite
index of soil P availability; however, it may preclude their use for in situ measurement of P
mineralization.

116
Spatial and Temporal Fluctuations in Soil P Availability
Fluctuations in soil P availability appear to be most related to seasonal changes in
monthly precipitation. For example, AERM-P is greatest during the early rainy season
months of both 1995 and 1996. As indicated by Fig. 5-1, the study region’s nine month
wet season typically begins in October, and is characterized by monthly rainfall greater
than 100 mm. Below average precipitation in October, 1995, delayed the onset of the wet
season; however, when rainfall exceeded 100 mm the following month, a peak in
membrane P was observed. A sharp increase in AERM-P was also seen at the end of the
dry season during the month of August, 1996, which received an unseasonably high
amount of precipitation. During both November 1995 and August 1996, soil moisture
remained unchanged from that measured the previous month, despite monthly rainfall
exceeding 100 mm. This suggests that a wet-dry cycle was initiated during these months
with a few large rainstorms that interrupted relatively dry periods. Records show that
81% of November's precipitation fell in six days (UFAC unpublished), and the above-
average air temperatures that occurred during this month likely increased
evapotranspiration and soil drying. Similarly, the precipitation received in August, which
is normally the driest month of the year, fell in four rain events.
Studies carried out in both wet and seasonally dry tropical forests have
demonstrated that pulses of N and P induced by cycles of soil-wetting and -drying may
represent processes critical to the cycling of nutrients in these ecosystems (Singh et al.
1989, Luizao et al. 1992, Srivastava 1992, Davidson et al. 1993, Diaz-Ravina 1995). In
tree plantations and terra firme forest located in the central Amazon Basin, Smith et al.

117
(1998) found that alternate cycles of soil-wetting and -drying caused by sporadic rainfall at
the end of the rainy season coincided with annual peaks in N mineralization. Studies of
soils in India demonstrate that pulses in soil N and P availability during the beginning of
the wet season were correlated with significant decreases in microbial biomass (Singh et
al. 1989, Raghubanshi et al. 1990, Maithani et al. 1996), and Srivastava and Singh (1991)
attributed a decline of microbial C, N, and P in soils of several tropical dry ecosystems to
the lysis of microbial cells provoked by the onset of monsoonal rains. In contrast, Luizao
et al. (1992) found that rewetting soil samples collected from an Amazonian rainforest
after a dry period induced net-immobilization of N. In the present study, an increase in P
availability in soil covered by fallen litter, particularly that of cupuassu trees, coincided
with unusually high precipitation during the normally dry month of August. Whether or
not such an increase in P availability can be attributed to the lysis of microbial cells at the
end of a dry period is obviously unknown; however, it seems plausible that cycles of soil¬
wetting and drying could stimulate biologically-mediated transformations of P in soil
organic matter. With the potential for microbial immobilization of P in cupuassu leaf litter
so high, the August pulse of P in the soil beneath this species litter might be explained by
sudden microbial or fungal release if some of the decomposers were indeed susceptible to
lysis upon wetting. Alternatively, the first wet-season rains can initiate synchronous
decomposition of litter accumulated over the dry season, also resulting in a pulsed nutrient
mineralization (Lodge et al. 1994). The August rise in soil P availability beneath cupuassu
litter also coincided with a peak in this species’ leaf litterfall and perhaps P was leached
out of freshly fallen litter prior to the initiation of decomposition and net P immobilization.

118
It is notable that AERM-P decreased and remained lower during the months following
peak cupuassu litterfall, when immobilization of P in decomposing cupuassu leaf litter
might occur as conditions favorable to microbial populations (adequate moisture and
substrate) persisted. Similarly, during the early rainy season (October and November) a
sharp increase in AERM-P on membranes placed in soil covered by peach palm leaf
occurred during this species’ peak litterfall months. This could be attributable to initial
nutrient leaching of freshly fallen leaves, or, as the results of the decomposition study
suggest. P mineralization from decomposing palm litter during the first few months after
abscission.
The consistently low levels of AERM-P on membranes placed in bare mineral soil
throughout the dry season, as well as during the late and early rainy seasons of 1996, are
likely due to the fact that there is considerably less organic matter from which P can be
mineralized in this location. With solution P concentrations so low in this location, it
seems probable that any small amount of P mineralized would be sorbed immediately to
soil solids. In addition, in all membrane locations during the dry season months of June
through August, one would expect the rate of P diffusion through the soil solution to
decrease considerably in response to the drop in soil moisture content (Nye and Tinker
1977). While the exact soil locations where peaks in AERM-P occurred during the
months of December and January, 1995, are unknown, the random distribution of
membranes in soil during this period allows for the possibility that some AERMs were
placed beneath decomposing litter which would serve as a source of higher P
mineralization.

119
Pulsed P Availability and Agroforest Productivity
Raghubanshi et al. (1990) suggested that the pulsed turnover of microbial nutrients
early in the rainy season supports the initiation of plant growth and shortens the net
immobilization phase of litter decomposition. Whatever the cause of observed P pulses
early in the rainy season, it seems that such an increase in soil P availability may critical to
agroforest productivity. For example, flowering in cupuassu begins during this period, as
does the second season of peach palm fruit production, and P deficiencies have been
shown to limit the formation of reproductive organs (Marschner 1995).
Conversely, another significant factor controlling soii P availability in the
agroforest soil may be uptake by plants and competing microbial populations during
periods of high P demand. AERM-P dropped during the mid- rainy season, a period
during which the P requirement of both cupuassu and peach palm was high due to fruit
production. It seems logical that microbial populations would flourish during the rainy
season when soil moisture is high and abscissed fruit and litter abundant, initiating even
greater competition for solution P as P was immobilized by decomposers working on P-
poor cupuassu leaf litter. Marts et al. (1991) found that NH4+ -N was immobilized in
forest and savanna soils during the wet season in northern Brazil. Singh et al. (1989),
however, demonstrated that microbial biomass in tropical dry forest and savanna was
highest during the dry summer, when plant demand for nutrients was minimal, and
decreased considerably during the rainy season, hypothetically due to consumption of
microbes by nematodes and protozoa.

120
Whether or not microbial demand is high dumg the wet season, the rainy season is
obviously a period of high P demand by the agroforest’s perennial components, and low
soil P availability at this time could affect the production by the system’s different
components differentially. Peach palm appears to employ several mechanisms for P
acquisition, such as aggressive root proliferation, resulting in root growth up to nine
meters from the stem (Ferreira et al. 1989), as well as the maintenance of a superficial root
mat that entraps fallen litter. In particular, it seems likely that the high P environment in
the peach palm root mat is most effectively exploited by that species alone, if these roots,
infact, are physiologically capable of ion absorption. Other studies demonstrate that roots
in superficial mats do take up ions, and represent an effective strategy for more efficient
nutrient acquisition Went and Stark (1968) first hypothesized that root growth in
superficial mats associated with fallen litter led to a more efficient recovery of nutrients in
tropical rainforests, and Stark and Jordan (1978) demonstrated that less than 1% of 32P
applied to the surface of native forest root mats passed through the root mat into the soil.
St. John (1983) found that superficial root proliferation in decomposing litter on the floor
of Amazonian native forests resulted from random encounters of growing roots with
organic matter, followed by increased branching in at that site.
Cupuassu, on the other hand may not be as well adapted to compete for P in such
conditions, and indeed, despite the fact that it was initially planted in greater numbers in
the agroforest, biomass production by this species is a small fraction of that produced by
the palm (Chapter 6). In addition, the total mass of cupuassu fruit aborted (70 g m'2)
during the rainy season was as great as that harvested (69 g m‘2) throughout the study

121
period, and this high proportion of prematurely abscissed fruit may reflect a nutrient
deficiency (Ventureiri, pers. comm ).
Conclusions: Implications for Agroforest Management
The results of this study indicate that soil P availability in Amazonian agroforests
may be highest at the beginning of the rainy season when both litterfail and a cycle of soil¬
wetting and drying is initiated after the dry season Although explanations for the exact
mechanisms responsible for pulsed nutrient release vary among studies, it appears that
nutrient pulses associated with seasonal fluctuations in precipitation are a common and
important dynamic in tropical forest biogeochemical cycles. In the present study, pulsed P
availability may be critical to initiating fruit production and stand growth, as flower and
new leaf formation generally recommence at the end of the dry season. Greater P demand
by agroforest components during the early to mid-rainy season, necessary for peak fruit
and litterfail production (especially that of peach palm), may explain why soil P availability
is relatively low during the height of the rainy season, despite conditions favorable for
decomposition and mineralization, such as abundant moisture. Low P availability due to
increased competition during this season could perhaps limit fruit production and harvest
in one or both species.
Considerably higher AERM-P in the root mat of peach palm, and in the soil
covered by its litter demonstrated spatial heterogeneity in agroforest soil P availability. In
particular, peach palm leaflets, which have relatively high P concentrations and comprise
49% of this species' fallen litter, appear to decompose and release both N and P rapidly,
within 12 months, and consequently, soil P availability was greater beneath this species’

122
canopy, where fallen litter accumulates. Furthermore, the decomposition of organic
matter trapped in the peach palm’s superficial root mat appears to provide a non-soil
source of high P availability and it is possible that this heterogeneity in P availability is
most effectively exploited by the palm itself
While P immobilization in initially P-poor cupuassu leaf litter may contribute to
lowered P availability in soil beneath this species leaf litter, it appears that P is released
relatively rapidly from other fractions of this species’ litter, such as abscissed reproductive
tissues. From a management perspective, it would appear reasonable to apply soil
amendments just prior to or during the rainy season months of January through April or
May, when soil P availability appears uniformly low, and P requirements by both cupuassu
and peach palm are high. This period may also coincide with greater labor availability
during the rainy season months. Furthermore, the cause for the high rate of eariy fruit
abscission during the mid to late rainy season in cupuassu is unknown, and since P is
important to the formation of reproductive structures and fruit ripening, fruit production
by this species might benefit from increased soil P availability during the fruiting period.
In particular, small applications of inorganic fertilizer directed beneath the cupuassu
canopy in fallen leaf litter may stimulate decomposition and mineralization from this
ordinarily P-poor and recalcitrant fraction. Because the roots of this species are generally
concentrated beneath the canopy (Venteireri pers. comm ), such a directed application
might increase the chance that the added P is taken up by roots, and perhaps, minimize
sorption onto soil solids. Because peach palm leaves are higher in P and decompose
rapidly, physically placing abscised palm leaves directly under the cupuassu canopy may

123
represent a relatively easy and low cost way of increasing P availability to cupuassu.
Further extended study of the spatial and temporal fluctuations in both P and N availability
may reveal more information regarding the mechanisms behind pulsed nutrient release in
Amazonian tree-based ecosystems and lead to more refined management practices that
enhance productivity of all crop components, as well as sustain system productivity in the
future.

CHAPTER 6
NET PRIMARY PRODUCTIVITY, NITROGEN AND PHOSPHORUS
CYCLING IN AN AMAZONIAN AGROFOREST NINE YEARS
FOLLOWING FOREST CONVERSION
Introduction
The world’s largest region of intact tropical forest, an area covering 5.5 million km':.
lies in South Americas Amazon Basin (Browder 1988). Two-thirds of Amazonia is located
in Brazil, where high rates of deforestation over the past two decades have been driven
primarily by forest clearing for pasture and shifting cultivation of annual crops (Fearnside
1993, Serao et al. 1996). Although widespread, these land-uses have proven relatively
unsustainable, often resulting in rapid soil degradation, lowered agricultural productivity, farm
failure, and land abandonment, all of which lead to continued deforestation (Hecht and
Cockbum 1990, Skole et al. 1994). More recently, commercial perennial crop-based
agroforestry systems have emerged as a promising Amazonian land-use alternative with the
potential to reduce soil degradation, improve living standards, and decrease pressures on
remaining forested areas (Smith et al. 1997). While annual and perennial crops have
traditionally been grown together in multi-story tree gardens, the production of high value
perennial cash crops in plantation agroforests represents a relatively new practice in Amazonia
(Nair and Muschler 1993, Smith et al. 1997).
124

125
Both the potential economic and ecological advantages of tree-based agroecosystems
arise in part from their longevity which promotes a more closed cycling of nutrients that may
extend the productivity of land already cleared (Ewel 1986, Smith 1990). In principle, deep-
rooted perennials intercept cations and nitrate otherwise leached from the soil surface, storing
and cycling these nutrients in living biomass, fallen litter and decaying fine roots, while
reducing erosion losses by physically protecting the soil (Nair 1989, Young 1989). It is such
nutrient conserving mechanisms that help sustain native forest systems growing on highly
weathered Amazonian soils (Jordan 1985). Like trees in forest ecosystems, the potential also
exists for some perennial crops to benefit from less labile forms of P. made available through
mycorrhizal associations and root exudates that solubilize organic P, as well as aluminum and
iron phosphates (Young 1989, Fox et al. 1990, Bolán 1990, Attiwill and Adams 1993).
Moreover, soil degradation and nutrient depletion resulting from crop removal is potentially
less if the products harvested represent only a small proportion of the system's total organic
matter and nutrient stores (Jordan 1987).
Research investigating alterations in nutrient cycling and carbon storage resulting from
forest conversion to other Amazonian land-uses has been important both to understanding the
impact of deforestation on regional biogeochemical cycles, and to improving management
practices so as to minimize environmental degradation (Sanchez et al. 1983, Uhl and Jordan
1984, Cerri et al. 1991, Nepstad et al. 1994, Szott et al. 1994). Studies have also
demonstrated the relative importance of biomass accumulation by secondary successional
regrowth in abandoned agricultural plots and degraded pastures to regional carbon balances
(Brown et al. 1992, Feamside 1996). Although it is largely accepted that agroforestry

126
systems offer greater ecological stability than shifting cultivation and extensive cattle
ranching, few studies exist of nutrient dynamics in Amazonian agroforestry systems, perhaps
because perennial cropping systems have traditionally comprised a minor fraction of total
land-use in this region (Benites 1990, Vosti et al. 1997). The few documented examples of
successful agroforestry plantations in Amazonia, such as the black pepper-based systems in
the Japanese settlement of Tomé-Afu in eastern Brazil (Subler and Uhl 1990) and alley
cropping trials in Yurimaguas, Peru (e g., Szott et al. 1991), have required high inputs of
labor and materials, resources not easily obtained by most small farmers (Anderson 1992).
Likewise, data on organic matter and nutrient cycling in plantation agroforests from long-term
trials of fertilized cacao- and coffee-based systems growing on inherently more fertile Costa
Rican soils (Glover and Beer 1986, Beer et al. 1990, Fassbender et al. 1991) do not represent
the conditions faced by farmers in Amazonia. The paucity of data on farmer-managed
Amazonian agroforestry systems makes it difficult to evaluate their true potential for
ecological sustainability relative to other land-uses.
More recently, economic factors, such as low cattle prices and the burdensome labor
required for shifting cultivation in nutrient-poor Amazonian soils, have made commercial
plantation agroforestry systems a more attractive option for small farmers (Smith et al. 1997).
In the late 1980's producers groups established a variety of market-oriented agroforestry
systems in several communities in the western Amazon Basin that have proven initially very
productive. These agroforests are primarily low- or no-input systems because both access
to, and experience using, chemical fertilizers or large quantities of organic residues to
maintain soil fertility have been limited in this region. The emergence of low input

127
commercial plantation agroforests among farmers in Aeré and Rondónia, Brazil, provides an
opportunity to investigate productivity and nutrient cycling in Amazonian tree-based
agroecosystems, and to begin assessing the extent to which these systems do offer a more
sustainable alternative to other land-uses in the region.
This study of on-farm nutrient dynamics in an eight year old agroforestry system had
two objectives. First, agroforest above- and below-ground net primary productivity (NPP),
defined here as the annual accumulation of organic matter per unit of land, was quantified and
compared to data reported for forests and other land-uses. Secondly, the agroforest’s stores
and fluxes of nitrogen (N) and phosphorus (P) were measured over one year to construct an
annual budget, and using a mass balance approach, to determine how much of the system's
N and P requirement is met through internal cycling, taken up from soil stores, and removed
from the system with crop harvest. Nitrogen and phosphorus were studied specifically
because deficiencies of these two nutrients constrain agricultural productivity in 90% of
Amazonian soils (Nicholases et al. 1985). The data on agroforest productivity and N and
P cycling were then used to evaluate the potential for commercial plantation agroforestry
systems to offer a more ecologically sustainable alternative to other Amazonian land-uses.
Methods
The Study Area
The study site is located in the rural community of Nova California which lies on the
border of the Brazilian states of Aeré and Rondónia in the western Amazon Basin (10°S,
67 °W). The life zone in this region is humid tropical forest (Holdridge 1978) and the native
upland terra firme forest comprises both deciduous and evergreen broadleaf tree species.

128
Average air temperature is 26° C and mean annual rainfall over the last 10 years is
approximately 2000 mm with a three-month dry period occurring from June through August
(UFAC unpublished). Regional soil maps show a matrix ofyellow Latisols (Oxisols) and red-
yellow Podzolics (Ultisols), which are acidic and low in base cations and readily-extractable
inorganic P (Pi) as a result of intense weathering (Sousa 1991). Physical and chemical
analyses of soil from the research site (Table 6-1) demonstrate properties consistent with a
clay loam Typic Kandiustult (Soil Survey Staff 1992).
The study took place in an eight-year-old peach palm (Bactns Gaesipaes Kunth)-
cupuassu (Theobroma grandiflorum (Willdenow ex Sprengel) Schumann)-Brazil nut
{Bertholletia excelsa Humb. & Bonpl.) agroforestry system. This particular system was
established on over 200 farms throughout the region in the late 1980's by the RECA
(Economic Partnership for Reforestation) project, a group of colonist farmers searching for
a more economically and ecologically viable alternative to other Amazonian land-uses. Peach
palm, a fast-growing muiti-stemmed monocot, is planted by farmers for heart-of-palm
(which may be harvested without killing the main stem) and its beta-carotene- and energy-rich
fruits. Cupuassu is a broad-leaf middle canopy component of many Amazonian
agroforests, the primary product of which is a creamy fragrant pulp harvested from its large
pods. Brazil nuts are an important Amazonian cash crop, although at the time of this study,
this species had not yet begun fruit production. All three species are native to the region’s
forests, and appear to tolerate the acidic nutrient-poor soils that underlie the native upland
terra-firme vegetation. Like most of the agroforestry systems in the region, it was

Table 6-1. Soil properties at five successive depths from an eight-year old Amazonian agroforest. Data are means ± 1 SE. Values
statistically different from the depth immediately above are indicated by adjacent P values in parentheses
Depth (cm)
0-10
10-20
20-40
40-60
60-85
Bulk density (g cm'3)b
l.OiO.Ol
1.0 ± 0 01
Sand (%)
19 2 ± 1.2
16.6 ± 10 (P<0.06)
14.8 ± 0 8
13 7 ± 0 7
13.0 ± 0.5
Silt (%)
18.9 ± 0.5
19.5 ± 1.3
17 3 ± 12
17.9 ± 12
17 7 ± 0 5
Clay (%)
62.0 ± 1.1
63.6 ±0.5
67.9 ± 1.0(Pá0.00l)
68.4 ±0.8
69.3 ±0.7
Organic matter (%)
3.2 ± 0.1
2.2 ± 0.1 (P<0 001)
1.6 ± 0.1 (P<0.001)
1.2 ± 0.1 (P<0 001)
1 0 ± 0 1
(PsO.Ol)
pH (H20)
5 9 ± 0.4
5.1 ± 0.2 (P^O Ol)
4.8 ±0.1
4 8 ±0 2
4.8 ± 0.1
Bray Pi (mg kg'1)
2 8 ± 0.6
1.5 ±0 2 (P<0 01)
0.4 ±0.1 (P^O 02)
0 1 ±0 03
N D.c
Mehlich Pi (mg kg1)
1.5 ±0.6
0.5 ± 0.2 (P<0 01)
0.1 ±0.04
0 02 ±0.01
N.D.
Resin Pi (mg kg'1)
1.7 ±0.2
0.5 ±0.2 (P<0.001)
Total C (g kg1)
29.3 ± 0.6
18 8 ± 0.6 (P<0 001)
Total N (g kg1)
2.4 ±0.03
1.7 ± 0 1 (P<0.001)
Total P (g kg'1)
0 6 ± 0.02
0.4 ± 0.02 (P<() 001)

Table 6-1—continued
Depth (cm)
0-10 10-20 20-40 40-60 60-85
Ca (cmol+kg1)
7.3 ± 1.3
3.4 ± 0 7 (P^0 02)
Mg (cmol+kg'1)
1.1 ±0.1
0.5 + 0 1 (P<0 001)
K (cmol+kg1)
0.2 + 0.01
0.1 ± 0 1 (P<0 001)
A1 (cmol+kg1)
0.1 ±0.04
0.6 ±0.1
ECEC (cmol+kg1)*
8 8+ 1.3
4.5 ±0.5 (P<0.01)
'A one-way ANOVA and orthogonal contrasts were used to identify statistical differences in soil properties among depths
bSampled separately at a depth of 0-20 cm
cNot detectable
d Effective cation exchange capacity (ECEC) = sum of bases + aluminum.

131
established by cutting and burning primary forest, and interplanting one-year-old cupuassu,
peach palm and Brazil nut seedlings at a spacing of 7 x 4 meters to complete stocking
densities of 190, 150 and 30 trees ha'1, respectively. A more detailed description of the land-
use history of the study site is provided in Chapter 2.
From September 1995 through October 1996, NPP and the stores and fluxes ofC, N,
and P were measured in an eight-year-old peach paim-cupuassu-Brazil nut agroforest
established on a 2.5 ha area previously covered by native forest. Of the various sites
volunteered by members of RECA, this particular agroforest was chosen for study because
it was the oldest in the region and its management was typical of that practiced by most
farmers. All measurements described below were taken from five 0.10 ha plots, each
separated by a buffer strip of two tree rows. This study focuses on overall agroforestry
system P and N dynamics, relative to those reported for other Amazonian land-uses, although
intra-plant cycling of P and N, as well as efficiency of use, are reported for the three
agroforest tree species.
Soil Stores
At the beginning of the study, five composite soil samples (1 per block, each
comprised often randomly-located cores) were collected at depths of0-10, 10-20,20-40,40-
60, and 60-85 cm. The samples were air-dried, passed through a 2-mm mesh sieve, and hand¬
picked free of fine roots prior to chemical analyses. A sharp-edged metal cylinder was driven
into the top 20 cm of soil to extract 20 samples (4 per block) for determining bulk density.

132
Above-Ground Biomass and Litter
Calculations of above-ground biomass stores and increment were based on
measurements taken from each tree in all five plots in late September 1995 and again in early
October 1996. The allometric relationships used to estimate above-ground biomass are
summarized in Table 6-2. Peach palm biomass was estimated using equations developed
from 12 or 24 felled individuals. Cupuassu bole and large branch (diameters 5.5 cm) biomass
were estimated nondestructive^ as the product of volume and wood density, based on
measurements of basal and apical diameter and height. Estimates for Brazil nut bole mass
were made similarly, using diameter at breast height (dbh) and total height to calculate
Table 6-2. Allometric relationships used to estimate above-ground biomass in an
eight-year-old peach palm-cupuassu-Brazil nut agroforestry system. Independent
variables include height to crown base (BH), total leaf number (LN), secondary branch
Dependent Variable (kg/tree)
Equation
R2
N
P-
value
Peach Dalm
stem
y = 0.69*BH2 - 4 04*BH
+ 10.70
0.94
24
0.001
leaf sheath'
y = 0.03*LN2 + 0.02*LN + 0.63
0.80
24
0.001
leavesb
y = 0.07*LN2 - 0.21*LN+1.04
0.84
24
0.001
reproductive tissues
y = 0.03*LN2 - 0.47*LN+1.95
0.72
12
0.01
Cupuassu
branches (basal diam < 5 cm)
y = -0.95*BD + 0.47
0.90
32
0.001
Cupuassu leaves
y = -0.20*BD + 0.13
0.75
32
0.001
Brazil nut tree totalc
y = 0.089*(DBH2*H*S)
0.99
94
0.06d
'Axilary bud (palm heart) was 7% of leaf sheath mass.
bLeaflets and petiole + rachis were 51 and 49% of leaf mass, respectively.
cFrom Brown et al. (1989), exponential terms transformed; Brazil nut wood
density = 0.85 g cm'3. dMSE=0.0607.

133
volume, and a form factor of 0.80 to adjust for trunk taper (Husch et al. 1982). From both
the cupuassu and Brazil nut trees, 30 branches were cut and weighed for estimates of
secondary branch and leaf mass. These data were used in regression equations to predict
cupuassu leaf and branch biomass from branch number and basal diameter. The consistent
branch length and basal diameter of young Brazil nut trees allowed for the estimation of
crown mass from the mean branch and leaf weight (kg/branch) multiplied by the average
number of branches per meter of crown. Total Brazil nut biomass (bole + branches + leaves)
compared well with estimates of Amazonian forest tree biomass by Brown et al. 1989.
The initial mass and nutrient stores of live herbaceous vegetation (weeds) was not
quantified because the understory had just been cut down by farmers prior to sampling the
perennial components for the first time. However, understory weed increment throughout
the year was measured twice, just before the vegetation was cut again by farmers, from 25
randomly-located 0.25 nr quadrats (5 per block).
On both measurement dates, three composite samples were collected from 12
individuals of each perennial species by tissue type. The tree samples and fresh weed biomass
were weighed, oven-dried at 60°C, reweighed for moisture content determination and
analyzed for nutrient content. To enable a comparison of the nutritional status of the
agroforest under study with others in the region, five composite samples of fresh leaves (5
leaves from each of 3 trees) were collected from cupuassu trees during the same month in
eight six-year-old RECA agroforests with the same configuration of species and spacing.
The agroforest floor surface litter mass was sampled four times during the study
period (early, mid- and late rainy season, and mid-dry season) from 25 randomly-located 0.25

134
nr quadrats (4 per block). Each quadrat sample was sorted and weighed by species and plant
pan (palm leaflets, petiole+rachis, leaves, reproductive tissues, twigs, and a fraction of
unclassified material). Because the majority of surface litter was comprised of leaf material,
one pooled sample per block was taken by species from every collection for the determination
of water and nutrient content.
Below-Ground Biomass and Standing Litter Stock
The standing stock of fine (< 3 mm diameter) and coarse (3 to 10 mm) roots was
sampled initially in early November 1995. Eight randomly-located soil cores were collected
from each block at depths of 0-10, 10-20 and 20-40 cm. The roots were washed free from
the soil in deionized water and drained in a 0.5 mm mesh sieve. Roots at the 0-10 and 10-20
cm depth from two of the five blocks were identified as live or dead, based upon fleshiness,
color, and elasticity. To estimate both the live store and below-ground litter, the mean total
mass of roots for the five blocks was multiplied by the proportion of live and dead roots
found in the corresponding horizons of the two sampled blocks. Oven-dried roots were
weighed and analyzed for nutrient content.
Agroforest Production. Turnover, and Flux
Annual agroforest production included the biomass increment of the perennial
components, harvested fruits, understory regrowth and total above- and below-ground litter
produced over the year. Freshly fallen litter from the agroforest’s perennial components was
collected from 35 randomly-located 1.0 nr mesh traps (7 per block) installed 0 5m from the
soil surface at the beginning of the study. The litter was collected every ten days, sorted.

135
weighed, and sub-sampled by species and plant part for moisture and nutrient content
determination.
Below-ground litter turnover in the top 20 cm of soil through the production and
death of fine roots was measured using the ingrowth cylinder method (Cueves and Medina
1988). Ingrowth tubes made of polyethylene mesh (10 cm tall, 6.5 cm diameter, 2x3 mm
mesh size) were filled with root-free soil collected from the same depth and packed to an
approximate bulk density of 1.0 g cm'3. Ten cylinders per block were buried (5 cm from the
soil surface to reach a final depth of 15 cm) at random locations early in the rainy season
(December), and removed four months later during peak rainfall. Upon removal, roots were
cut flush with the cylinder exterior, and the tissue inside was washed, separated, dried and
weighed as described for standing root stock sampling. Annual fine root growth rate was
calculated by dividing the mean total number of roots (live and dead) that grew inside the 10-
cm tall cores by the number of days (120) the cores were in the ground, and extrapolating this
rate (g cm'2 day'1) over 365 days to a depth of 20 cm. To estimate annual below-ground litter
production, it was assumed that the root death rate equaled the total biomass of fine roots
produced in one year, as has been done for other nutrient budgets (Attiwill and Leeper 1987).
Concurrent with ingrowth core removal, fine root biomass was resampled from soil cores
taken at depths of 0-10 and 10-20 cm from two of the five replicate blocks. The difference
in standing root mass between the two sampling dates was compared to the growth rate
calculated from the ingrowth cores.
Total N and P resorbed from leaves of each species prior to abscission throughout the
year was estimated as the product of fresh leaf N or P concentration and total leaf litter mass

136
multiplied by the proportion of foliar N or P resorbed (one minus the quotient of litterfall N
or P and fresh-leaf N or P). Because variable amounts of organic matter also may be
withdrawn prior to leaf abscission, the litterfall/ff esh-ieaf quotients were calculated two ways;
using N and P concentrations per unit mass, and N and P concentrations per unit calcium.
The latter method, according to Vitousek and Sanford (1986), assumes that Ca is immobile
once it reaches the leaves.
Annual nutrient return to soil was calculated as the sum of the N or P flux in above-
and below-ground litter input, understory weed regrowth, and the P and N leached from the
canopy via throughfall. The mass and nutrient stores of understorv weeds that grew
throughout the year were included in annual return to soil because the vegetation is normally
cut and left to decompose on the agroforest floor. The P concentration in throughfall was
sampled concurrently with rainfall collections in filtered recipients placed randomly beneath
the canopies of peach palm and cupuassu (6 per block). Immediately following rain events,
the samples were filtered a second time to exclude debris and frozen until chemical analysis,
and recipients were moved to different canopy locations. Throughfall P flux was calculated
from total rainfall adjusted for an estimated 20% canopy retention based on Elsenbeer et al.
(1995). Nitrogen throughfall flux was estimated from data from three studies of tropical
forests growing in similarly nutrient-poor soils presented by Vitousek and Sanford (1986).
Twelve-month N and P input in rainfall/deposition was calculated as the region’s ten-
year average annual rainfall (UFAC unpublished) multiplied by the average concentration of
total N and P in rainfall. Total P concentrations were determined from rainwater collected
from September through April (three rain events per month) in ten acid-washed filtered

137
recipients located at ground level in agroforest canopy gaps in and adjacent open fields. Data
from Williams et al. (1997) on NH4* and N03' concentrations in rainfall from the central
Amazon Basin were used for total N estimates.
Removal of N and P through the harvest of agroforest products was calculated as the
total mass harvested multiplied by the average nutrient concentration of each product.
Throughout the study, all fruit harvested from the five blocks was weighed, and water and
nutrient content determination were based upon five composite samples (each comprised of
one sample per block per week) collected monthly during periods of production Palm heart
water and nutrient content were calculated from composite samples collected on five separate
occasions.
Plant and Soil Analyses
All plant samples were oven-dried at 60°C, ground to pass through a 1-mm mesh
sieve, and when necessary, reground to a fine powder using a zirconium ball. Plant tissue
P content was determined by block-digesting material with concentrated H:S04/H202 at
360°C (Thomas et al. 1967) and analyzing the cleared supernatant for PO/3 using inductively
coupled argon plasma (ICAP) spectroscopy. The N and C content of freshly fallen litter,
agroforest floor litter, and roots were quantified after Dumas combustion in a Carlo Erba
NA2500 C&N analyzer. Carbon stores in live above-ground biomass, and all reproductive
parts were estimated as 48% of total dry mass, as plant tissue typically contains between 45
and 50% C (Schlesinger 1997). Total N of these tissues was determined using the Kjeldahl
method on digested material. Analysis of random samples determined that there was no
significant difference between total Kjeldahl nitrogen (TKN) and tissue N content determined

138
using the C&N analyzer. Samples of fresh cupuassu leaves from the agroforest under study,
and eight others, were digested and assayed, as described above, for Ca, K, Mg, P and TKN.
Oven-dried finely ground soil from 0-10 and 10-20 cm depths was used for the
determination of total C, N (assayed in the C&N analyzer), and P in soil stores. Total P was
extracted using a concentrated H2S04/H202 block digest at 360° C for two hours. Inorganic
P, presumably correlated to plant uptake, was measured from three different extracts of air-
dried sieved soil. Bray Pi was extracted in 1.0NNH4F and 0.5 N HCL in deionized (DI) H20
(Bray and Kurtz 1945) and Mehlich-1 (M-l) Pi by shaking 5 g mineral soil in 20 ml of dilute
double acid (0.05 N HCL in 0.025 N H2S04) for five minutes. Resin Pi was measured after
shaking 2 g of soil with a 2.5 x 5 cm2 anion exchange membrane in 30 ml DI H20 for 16
hours. The membrane was removed from solution, rinsed free of soil with DI H20, and the
Pi on the membrane was then extracted by shaking the membrane in 20 ml 0.5 M NH4OAc
for two hours. Soil Pi concentrations in the three filtered extracts were determined
colorimetrically using the molybdate blue method (Murphy and Riley 1962) on a Milton Roy
Spectronic 1201 spectrophotometer, as were total P concentrations in rainfall and throughfall
samples after ashing and wet-digestion with concentrated HC1. Soil exchangeable bases and
aluminum were extracted for 16 hours in 1.0 M NH4OAc and 1.0 M KC1, respectively
(Thomas 1982) and assayed using ICAP spectroscopy. Additional analyses conducted on all
five soil depths include particle size distribution using the pipet method (Kilmer and
Alexander 1949), pH, measured using a Beckman electrode in a 2:1 water to soil ratio, and
the Walkley-Black dichromate procedure (Nelson and Sommers 1982) to determine soil
organic matter (%).

139
Statistical Analyses
Differences in soil properties and root mass by depth were analyzed in one-way
ANOVA model using SAS (SAS Institute, Inc., Cary, NC). Orthogonal contrasts were used
to analyze differences between specific depths and in cupuassu foliar contents between the
agroforest under study and eight others in the region. Unless otherwise indicated, the sample
size (N) represents five blocks, and data are means ± one standard error.
Net Primary Productivity and N and P Budget
Net primary productivity (NPP) equaled total organic matter produced by the
agroforest throughout the year. Net C fixation, and the annual N and P requirement were
calculated as total twelve-month production of agroforest biomass multiplied by C, N, and
P concentration of each component. An annual budget was constructed to analyze how much
of the system's P and N requirement was a) met through intra system cycling via resorption,
b) taken up from soil stores, c) returned to soil, and d) removed from the system with crop
harvest. Nutrient uptake from the soil was determined as the agroforestry system’s total
annual production requirement less N and P reabsorbed from live tissues prior to abscission
(Waring and Schlesinger 1985).
Results
Soil Characteristics and Elemental Stores
The soil underlying the agroforest had a high clay content (>60%) that increased 7%
from 0 to 85 cm depth (Table 6-1). Exchangeable cations were approximately twice as
concentrated in the soil surface (0-10 cm) compared to the 10-20 cm depth (P < 0.01). Soil
pH was higher in the top 10 cm (P < 0.001), but decreased to 4 8 by the 20 cm depth, where

140
it remained constant to 85 cm. Soil organic matter (OM) and extractable inorganic P (Pi) also
declined significantly with depth (P < 0.01); between 60 and 85 cm. percent OM was one
third the value for the 0-10 cm depth, and the concentrations of both Mehlich- and Bray-
extractable Pi were below detectable limits.
The top 20 cm of soil was the largest store of C, N, and P measured, representing 68,
90 and 97% of the system’s total storage (soil plus plant mass) for these three elements,
respectively (Table 6-3). While total soil P storage appears relatively large, the fraction of
extractadle P potentially “readily” available for plant uptake in the top 20 cm, as measured
by short term indices using the Bray (0.44 g m'2), Mehlich (0.23 g m'2) or resin (0.22 g m'2)
extracts, was less than 0.5% of total P.
Standing Biomass Stores
Overall, 17% of agroforest total C storage (7,233 g m'2, including soil and litter) was
in woody stems. Live wood represented over 70% of the total aboveground biomass and C
storage, but only 40 and 45 % of this compartment’s N and P stores. Leaves were a smaller
fraction of above-ground biomass (29%), but stored 50 and 44% of the system’s above¬
ground N and P. Peach palm biomass (2,468 g m'2) was over 2.5 times that of cupuassu
(382.4 g m'2) and Brazil nut (563.7 g m‘2) combined, and accounted for 76.8 and 83.0% of
the system’s above-ground stores of N and P, respectively (Table 6-4). Cupuassu foliar
concentrations of Ca, Mg, and K did not differ among the agroforest under study and the six
others sampled, but N and P contents were lower in the eight-year-old system (P <0.05)
(Table 6-5).

141
Table 6-3. Biomass, stores, and cycling of C, N, and P in an Amazonian agroforestry system
during the eighth year after establishment.
Mass
C
N
P
Aeroforest Stores (o. m'2)
Soil (0-20 cm)
204,000
4,906
418.2
102.00
Live biomass
Live wood
2,520
1,210
10.1
0.96
Foliage
781
375
12.4
0.97
Reproductive tissues
114
55
2.5
0.23
Total live above-ground
3,415
1,640
25.0
2.15
Live roots (diameter<2 mm)
514
175
5.0
0.25
roots (diameter 2.1 -5 mm)
197
67
1.9
0.10
Total below-ground (0-40 cm depth)
711
242
6.9
0.35
Total above- and below-ground
4,126
1,882
31.9
2.50
Agroforest floor surface litter
775
319
8.9
0.41
Below-ground litter (0-15 cm)
407
126
3.6
0.21
Annual flux (e. m'2 vr'2)
Agroforest annual production*
Foliage (including weeds)
938
409
12.8
0.87
Live wood increment
1,063
508
4.1
0.35
Reproductive tissues
681
329
8.9
0.80
Fine roots (0-20 cm depth)
360
122
3.5
0.18
Total NPP and N & P requirement
3,042
1,368
29.3
2.20
Reabsorption before abscission
-
-
6.3
0.37
Return to soil
Above-ground litter
786
332
11.1
0.85
Understory weeds
110
53
2.4
0.13
Below-ground litter (0-20 cm)
360
122
3.5
0.18
Throughfall -
-
-
0.5
0.08
Total return to soil
1,256
507
17.5
1.24
Uptake (requirement-reabsorption)
23.0
1.83
Outputs: removal from harvest
466
223
4.4
0.40
Inputs: rainfall/deposition
-
-
0.6
0.01
a Agroforest annual production = biomass increment + weed growth + harvest + litterfall.
- N throughfall input from Vitousek and Sanford (1986).

Table ¿M. N and P stores in above-ground biomass, annual growth increment, and mass harvested of agroforest products
Standing biomass
Concentration (%)
Stores (g m'2)
Increment
Harvested
(g nr2)
N
P
N
P
(g m'2 yr1)
(g m'2 yr1)
Peach Palm
stem
1,691.8 ± 108
0.38 ±0.03
0.04 ± 0.004
6.43
0 68
676.2
leaf sheath
237.6 ± 13
1 09 ±0 12
0.15 ±0.023
2.59
0.36
84.4
bud (heart)
17.9 ± 1
2.71 ±0 33
0 44 ±0 050
0.49
0.08
64
5.0
leaflets
240.6 ± 15
2.55 ± 0 10
0 13 ±0 009
6.14
0 31
95 1
petiole+rachis
167.2 ± 11
0.62 ± 0.04
0.06 ± 0.008
1.04
0.10
66.1
inflorescences
73.8 ± 13
2.91 ±0 19
0.27 ±0.019
2.15
0.20
mature fruit
40.0 ± 7
0.89 ± 0.02
0.07 ±0.002
0.37
0.03
433.7
392.6 ±32
CuDuassu
bole + branches^ 5
cm 75.8 ±4
0.38 ±0.02
0.02 ± 0.002
0.29
0.02
61.8
branches (diam < 5
cm) 224 3 ±13
0.55 ± 0.01
0.05 ±0.002
1.23
0 11
45.1
leaves
82.3 ±4
1.70 ±0.08
0.09 ± 0.005
1.40
0.07
18.2
mature fruit
1.09 ±0.20
0.13 ± 0.010
68.8
68 8 ±2

Table 6-4- continued.
Standing Biomass Concentration (%) Stores (g m'2) Increment Harvested
(g m'2) N P N P (gm‘2yr ‘) (gm"2yr ‘)
Brazil nut
bole
464.1 ± 110
0.39 ±0.03
0.02 ±0 001
181
0 09
245.3
branches
64 4± 5
0 47 ± 0 05
0 04 ± 0.006
0 30
0.06
10.6
leaves
35.2 ±3
2.05 ±0.10
0.10 ± 0.014
0.72
0.04
5.8
Understorv
weeds
No data
2 19 ± 0 13
0.12 ±0.02
109 8
Table 6-5. Cupuassu foliar nutrient concentrations for one eight-year-old peach palm-cupuassu-Brazil nut agroforest and the mean foliar
Cupuassu foliar nutrient concentration (%)
System
Ca
Mg K
N
P
8-year-old agroforest
0.65 ±0 15
0.23 ± 0.02 0 75 ±0.07
1 70 ±0 08'
0 09 ±0 005'
6-year old agroforests
0.54 ±0 05
0.26 ±0.01 0.61 ±0.09
1.92 ±0.04
0.12 ±0.005
'Means significantly different between the two different-aged systems, p £ 0.05 and dead) below-ground mass measured to a 20 cm depth
(892 g m'2), they were only 44.7% of total below-ground litter (Tables 6-4 and 6-7), perhaps because much of the dead fine root litter had
begun to decompose early in the rainy season when the samples were collected

Table 6-6. Mean fine (<3 mm) and coarse (3 to 10 mm) root biomass (± 1 SE) for two diameter classes to a 40 cm soil depth, and carbon
(C), nitrogen (N) and phosphorus (P) stores for live roots and below-ground litter (dead roots). Live and dead root mass based upon
percentage of dead roots (in parentheses) in two of the five blocks sampled
Soil
depth (cm)
Standing stock root biomass (g
m-2)
Elemental stores (g m
-2),
diameter <3 mm
diameter 3 to 10 mm
live roots
dead roots
total
live
dead
total
live
dead
C
N
P
C
N
P
0-10
387 ±40
248
139
148 ± 35
58
90
104 0
2.97
0 150
70 8
2.11
0 119
(36%)
(61%)
10-20
179 ±26
136
43
178 ± 56
43
135
60 9
1.74
0 088
55.0
1.64
0 093
(26%)
(76%)
20-40b
130 ± 19
130
96 ± 88
96
76.8
2 19
0.111
Total mass
696
514
182
422
197
225
241.7
690
0 349
125 8
3.75
0.212
* Elemental stores were based upon C, N, and P concentrations (%) for live roots of 34 0 ± 0 9, 0 97 ± 0.02, and 0.049 ± 0 002, respectively,
and 30.9 ± 1.0, 0.92 ± 0.03, and 0.052 ± 0.003 for dead roots, assayed from pooled samples of both diameter classes
b Root biomass at the 20-40 cm soil depth was assumed to be live

145
Total root mass (live plus litter) from 0 to 40 cm soil depth was 1,118 g m2, or just
over 20% of total agroforest organic matter initially measured. Similarly, the live root to
shoot biomass ratio was 0.21, and the standing stock of live roots (0-10 mm diameter)
comprised 13, 22, and 14% of the system’s live C, N, and P stores (Table 6-3).
The total mass of live fine roots was over 2.5 times that of coarse roots (P< 0 001),
and appeared concentrated in the top 10 cm of soil, where there was nearly twice the fine root
biomass than that found at 10-20 and 20-40 cm depths combined (P< 0.001, Table 6-6).
Coarse root biomass did not differ significantly among the depths measured. Peach palm
accounted for almost one half (48%) of total root biomass at 0-10 cm, but only a third (33%)
at 10-20 cm.
Combined above- and below-ground standing litter mass totaled 1,182 g m'2, over
two-thirds of which was surface litter (Table 6-3). The litter stock comprised nearly 3% of
the system’s total N reserves ( including soil, 462.6 g m'2), but accounted for only 0.6% of
all P storage (112.2 g m‘2). Peach palm leaves and reproductive tissues accounted for 79%
of the surface litter mass (Table 6-7). Although fine roots contributed 64% of the total (live
and dead) below-ground mass measured to a 20 cm depth (892 g m'2), they were only 45%
of total below-ground litter (Tables 6-3 and 6-6), perhaps because much of the dead fine root
litter had begun to decompose early in the rainy season when the samples were collected.
Production and N and P Requirements
By the ninth year following establishment, agroforest net primary productivity was
3,042 g m'2 yr'1, a figure representing nearly three-quarters of the total live agroforest biomass
measured at the beginning of the study (Table 6-3). Annual live wood C increment was equal

146
to 7% of total C storage initially measured in vegetation, litter and soil combined. Peach palm
stem, mature fruit, and Brazil nut bole were the largest fractions of biomass accumulated over
the year, totaling 1,355 g m'2, or 44.5% of total annual production (Table 6-3). Although
biomass production of understory weeds represented only 4.1% of the above-ground
increment, the N requirement for weed growth over one year (2.4 g m'2) exceeded the
combined stores ofN in leaves of cupuassu (1.4 g m'2) and Brazil nut (0.7 g m'2) measured
at the beginning of the study. Overall, live wood represented over one third of the above¬
ground biomass increment, but it comprised only 15 and 17% of the system’s annual N and
P requirement (Table 6-3). Leaf production accounted for half of the N required by above¬
ground tissues throughout the year. Nearly 40% of the above-ground P requirement was
allocated to reproductive tissues, half which was removed with the harvest of agroforest fruits
and palm heart.
Root production, measured using the ingrowth cores, was 180 g m"2 yr'1 . When
extrapolated over 20 cm soil depth, the total contribution of fine root growth to NPP was 3 60
g m'2 yr'1, or 12% of the annual increment in agroforest biomass. Fine root growth
represented 9% of annual carbon fixation and 12 and 8% of the system’s N and P
requirement. The total standing stock of fine root biomass (live and dead, 393 ± 54 g m'2, 0-
10 cm, and 200 ± 41 g m'2, 10-20 cm depth), sampled a second time five months following
the initial measurement, did not differ significantly from the November measurement in either
soil depth.

147
Agroforest Turnover and Flux
Total N and P flux due to resorption from leaves based on fresh and litter leaf N or
P per-unit-Ca quotients was always greater than that calculated using the per-unit-mass
quotients (Table 6-8). Assuming that the per-unit-Ca values are a more accurate estimate of
resorption, the average proportion of P (63%) reabsorbed from leaves of the three perennial
components was greater than that for N (49%). Resorption of N and P from leaves prior to
abscission provided 22 and 17 % of what was required for production throughout the year,
leaving roughly 80% of the N and P requirement to be taken up from soil stores.
Soil uptake over the year represented nearly three-quarters of N and P storage in live
vegetation (Table 6-3). However, 76 and 68% of uptake was returned to the soil through
litter, green weed residues and throughfall. Despite a relatively small biomass input, the N
and P return to soil from cut green understory weeds was 14 and 11% of the total. Above¬
ground litterfall mass was the largest fraction of N (63%) and P (69%) returned to soil. The
mean residence time (litterfall/surface litter) of C, N, and P in the agroforest floor was 0.96,
0.80 and 0.48 years, indicating that while the annual litterfall input ofP remained in the forest
floor for less than half a year, C was retained on the agroforest floor for twice as long. Leaves
were 70% of total annual above-ground litterfall, but reproductive tissues also constituted a
significant fraction (25%) of the litter mass, and contributed 35% of the total return of P to
the soil (Table 6-7). Inputs of N and P to the agroforest from rainfall were negligible.

Litter type
Biomass
(g ni 2)
. Concentration (%)
Flux (g m'2 yr1)
C
N
P
C
N
P
Peach palm
petiole + rachis
175
38.2 ±0.2
0.56 ±0.06
0.04 ±0.005
66.9
0.98
0.07
leaflets
305
40.6 ±0.3
1.33 ± 0.09
0.09 ±0.005
123 8
4 06
0.28
aborted fruit*
66
48
2.14 ± 0.12
0.19 ± 0.014
31.7
1.41
0 13
flowers
59
48
3.74 ±0.11
0.38 ± 0.010
28.3
2.21
0.22
unclassified
18
42.8± 1.2
2.25 ±0.18
0.19 ±0.03
7.7
0.41
0 03
Cupuassu
leaves
27
45.5 ±0.3
1 19 ± 0.07
0.04 ±0.005
12.3
0.32
0 01
aborted fruit
70
48
1 39 ±0 12
0 12 ± 0.001
33.6
0 97
0 08
flowers
2
48
2.27 ±0.15
0.17 ± 0.01
1.0
0.05
0.003
Brazil Nut
leaves
40
41.9 ± 0.4
1 46 ±0.05
0.05 ±0.005
16 8
0.58
0.02
branches
24
39.3 ±0.3
0.41 ±0.04
0.008 ±0.001
9.4
0.10
0.002
Total litterfall
786
331.5
11.09
0.845
‘Carbon concentration of all reproductive tissues estimated as 48%.
4^
00

149
Table 6-6. Mean N, P, and Ca contents in fresh leaves and leaf litter of the same perennial
agroforest species, collected on the same date as the fresh leaves, and total N and P resorbed
from leaves prior to abscission throughout the year. The proportion of foliar N and P
resorbed (1- litterfall/fresh leaf concentration * 100) is calculated for (a) N and P
Species
Element
(mg g'1)
Total resorbed
(g m ‘2 yr1)
N
P
Ca
N
P
Peach palm leaflets
25.5
1.32
5.11
leaf litter
13.1
0.67
9.10
(a)
48.5
49.2
178.1
3.77
0.198
(b)
71.7
71.5
5.58
0.288
Palm petiole + rachis
6.2
0.64
no data
leaf litter
5.6
0.44
7.63
(a)
9.1
31.2
0.11
0.035
Cupuassu leaves
17.0
0.90
6.50
leaf litter
11.9
0.36
12.30
(a)
30.0
60.0
189.2
0.14
0.015
(b)
63.1
78.9
0.29
0.019
Brazil nut leaves
20.5
0.10
11.60
leaf litter
14.6
0.05
13.38
(a)
28.8
50.0
115.4
0.24
0.020
(b)
38.4
56.6
0.32
0.023

150
representing 3 and 0.6% of soil uptake, whereas, nutrient removal from harvest represented
19 and 22% of the N and P taken up from the soil throughout the year (Table 6-3).
Discussion
Stores and Cycling of C. N. and P in Amazonian Land-uses
Soil stores. Studies have shown that the soil compartment is often the largest store
of C and N in tropical ecosystems (Ewel et al. 1981, Brown and Lugo 1990), and the
conversion of forest to other agricultural land-uses has the potential to decrease soil C storage
by 20 to 40%, usually within five years of the first cultivation (Davidson and Ackerman
1993). Carbon and nitrogen stores in the top 20 cm of the agroforest soil were over two- and
nine-fold greater than the combined storage of above- and below-ground biomass and litter,
further supporting the claim that C and N storage is concentrated in the soil compartment.
The C and N contents of the agroforest soil appear typical of those found throughout
Amazonia. For example, soil stores of C and N were well within a range reported for
pastures (3.2 to 6.1 kg C m'2 and 0.24 to 0.48 kg N m'2) and native forests (2.7 to 6.2 kg C
m'2 and 0.15 to 0.50 kg N m'2) in Rondónia, Brazil (Neill et al. 1997). Mean soil C and N
contents (0-20 cm depth) for the RECA agroforest under study (24.5 kg C m'2 and 2.1 g N
kg'1), and eight others in the region (16.2 kg C m'2 and 1.7 g N kg'1, Chapter 4), were higher
than values cited for pasture, shifting cultivation plots and native forest (8.1 to 10.3 g C kg'1
and 0.80 to 1.0 g N kg'1) in Aeré, Brazil (Kainer et al. 1998), but lower than values reported
for native forest and timber plantations (49.6 to 62.9 g C kg'1 and 2.68 to 4.10 g N kg'1) in
eastern Amazonia (Smith et al. 1998, Smith et al. in press a). While this study presents only
the storage of C and N in one agroforest, paired comparisons of soils from the eight other

151
RECA agroforests with those from adjacent native forests demonstrated no difference in total
C and N contents between the two systems (Chapter 4). Without a measurement of bulk
density, it cannot be determined from these data if soil C and N storage changed as a result
of converting forest to agroforest, but Smith et al. (in press b) found that neither soil C
contents nor corresponding C stores under extensively managed 30 year-old timber
plantations differed from those found in plots of adjacent native forest in the eastern Brazilian
Amazon.
Storage of P was also concentrated in the top 20 cm of the soil, resulting in over 35
times as much P in this compartment than in vegetation and litter combined. Similarly, the
soil P store comprised 99% of P storage in Costa Rican agroforestry systems of cacao and
shade trees (Fassbender et al. 1988), 90% in five-year-old secondary forest and 80% of P in
mature terra firme forests growing in Amazonian Oxisols (Uhl and Jordan 1984). However,
only a small fraction of the soil P store in the present study was extractable using indices
presumably correlated to the available pool. In fact, assuming bulk density remained constant
at 1.0 g cm'3, the Bray-extractable Pi store to a depth of 85 cm (below which Pi
concentrations were no longer detectable) totaled only 0.54 g cm'2, or 0.5% of total P found
in the top 20 cm of soil. A generalized distinction made between tropical and temperate
forests is that P in the former is largely “immobilized” in vegetation because the extractable
soil P content is so low relative to that of standing biomass (Ewel et al. 1981). However,
studies of subtropical and temperate forest soils have shown that more stable forms of P are
solubilized by organic acids that may be released by decomposing litter or exuded by roots
and associated mycorrhizae (Comerford and Skinner 1989, Fox et al. 1990). Mechanisms

152
such as this, that render more resistant P fractions available for uptake, broaden the
significance of the total soil P store to the long-term nutrition of tree-based systems.
The total P content in the upper 20 cm of soil (averaged between the 0-10 and 10-20
cm depths) of the eight-year-old agroforest soil (535 mg kg'1) was within the range of values
for the eight six-year-old RECA agroforests (241 to 665 mg kg'1) and their paired plots of
adjacent native forest (224 to 566 mg kg'1, Chapter 1). Somewhat lower total soil P contents
(100 to 230 mg kg'1) are reported for soils underlying other Amazonian primary and
secondary forests (Uhl and Jordan 1984, Tiessen et al. 1994, Lips and Duivenvoorden 1996).
Sombroek (1966) explains that the soil-forming sediments of the western Amazon Basin are
less weathered than those in the eastern basin, and in some regions this has resulted in
eutrophic soils with a higher base status. Thus, it is possible that total P concentrations are
also inherently higher in soils of the study region. Extractable P (M-l, resin or Bray) in the
top 20 cm of soil from the eight-year-old agroforest, and eight six-year-old agroforests from
the same region (Chapter 4), was less than or equal to values cited for pastures, shifting
cultivation plots, tree plantations and native forests throughout eastern and western Amazonia
(Russell 1983, Sanchez et al. 1985, Tiessen et al. 1994, Lips and Duivenvoorden 1996, Neill
et al. 1997, Smith et al. 1998, Kainer et al. 1998). Thus, according to these commonly-used
indices, extractable P on the agroforest site was not any greater than in other regions of
Amazonia.
Above-ground biomass and productivity. Overall, agroforest organic matter
accumulation and C storage in standing biomass was lower than that for natural successional
vegetation of similar ages. Eight years after establishment, agroforest live above-ground

153
biomass was 15 to 30% less than that in younger (5 and 6.5 years) secondary forest regrowth
(40 and 95 tons ha'1) in Aeré, Brazil (Brown et al. 1992) and Venezuela (Uhl and Jordan
1984). However, agroforest NPP was over 40% greater than that of the Venezuelan
secondary forest. Although the total store of agroforest biomass (53.1 tons ha'1, including
litter and roots) fell below a range of values calculated by Fearnside and Guimaraes (1996)
for ten-year-old secondary forests in eastern Amazonia (61.8 to 99.9 tons ha1), the average
annual increment in agroforest biomass (7.0 tons ha'1) was comparable to that of the
successional vegetation (6.1 to 10.0 tons ha'1). In contrast, despite similar stores of above¬
ground biomass, NPP in the Amazonian agroforest was 30% higher than that in five-year-old
fertilized commercial plantation agroforests of cacao and shade trees in Costa Rica (Alpizar
et al. 1986), demonstrated by four-fold greater production of harvested fruit in the older
system.
In comparing biomass storage and NPP between agroforestry systems and secondary
forests, several factors should be considered. Secondary forest regrowth typically regenerates
from abandoned shifting cultivation plots and pastures after two to three years of cropping,
thus, it is likely that soil nutrient contents are initially lower than those in agroforestry systems
established on sites recently cleared of primary forest. However, often, biomass and nutrients
may be removed (approximately 2 tons ha'1, 40 kg N ha'1 and 8 kg P ha'1) from the
agroecosystem during its first year with the harvest of annual crops, initially interplanted with
seedlings of the perennial components. Although the cultivation of annual crops is
discontinued after the first year, as early as four years following establishment, biomass and
nutrient removal recommences with the harvest of agroforest products. Generally, cupuassu

154
fruit production in four-year-old plantations is estimated to be 20% of that expected for year
eight (Venturieri 1993), however, six years after agroforest establishment, other RECA
farmers reported cupuassu harvests between 0.6 and 0 8 tons ha'1, similar to that of the eight-
year-old system. Similarly, high harvests of peach palm fruit were reported by farmers for
the young agroforests. Finally, the agroforest understory of native species regrowth is
typically cut down and left to decompose every year following establishment, and the woody
components of this vegetation would undoubtedly accumulate mass if allowed to continue
growing. Combined, the cutting of understorv weeds and harvest of agroforest products
accounted for 5.8 tons ha'1 of organic matter produced during the eighth year alone. Thus,
while agroforest standing biomass and C storage may be less than that of secondary forests,
annual rates of productivity may not greatly differ.
Above-ground N and P storage. Although organic matter in above-ground biomass
was nearly equal in both the Amazonian (this study) and five-year-old Costa Rican (cacao.
Alpizar et al. 1986) agroforests, N and P storage in the Amazonian agroforest was
approximately 30 and 45% less, perhaps due to initial fertilization (14 kg N ha'1 and 18 kg
P ha'1) in the cacao-based systems (Table 6-9). In contrast, above-ground biomass in young
secondary forest fallows growing on an Ultisol in Yurimaguas, Peru (Szott et al. 1994) was
over 1.5 times greater than that of the eight-year-old Amazonian agroforest. Phosphorus
storage in the natural fallows (Szott et al. 1996) was 15% less than that in the agroforest
above-ground biomass, despite a greater soil store of (readily) extractable phosphorus (Table
6-9). Agroforest live above-ground biomass was at least seven-fold less that of mature native
forests growing on Amazonian Oxisols (Folster et al. 1976, Jordan and Uhl 1978) and Ultisols

155
(Russell 1983). Storage of N differed by a factor of four to twelve, but mature forest P
stores were only 1.5 to 2.5 times greater than that of the agroforest.
A weighted average of foliar N concentrations among the three agroforest perennial
species (1.77%) was within the range reported for native forest leaves (1.27 to 1.84%), but
the average P concentration (0.10%) exceeded values cited for mature forests (0.05 to
0.07%) growing on Oxisois (Vitousek and Sanford 1986, Smith et al. in press). Within-
stand nutrient use efficiency, defined here as the ratio of above-ground biomass to the total
nutrient mass in above-ground tissues (Chapin 1980), appeared lower in the agroforest than
what might be expected for natural Amazonian systems. Agroforest N-use efficiency (NUE)
fell at the lower end of a range calculated for primary and secondary forests (Table 6-9),
while P-use efficiency (PUE) was well below that calculated for native vegetation. The ratio
of N to P storage in agroforest above-ground biomass was lower than that found in the
mature forests, secondary forests and a similar-aged timber (Gmelina aborea) plantation
(Russeil 1983), but higher than that of the younger fertilized cacao-based agroforests (Table
6-9).
Litterfall. Further evidence for lower agroforest PUE relative to Amazonian forests
is found by examining nutrient flux in above-ground litterfall. Total litter production during
the agroforest’s eighth year fell within a range of litterfall rates for 12 mature forests (665
to 1,202 g m'2yr '*) presented by Barabosa and Feamside (1996). While N flux in agroforest
litterfall was comparable to that of the native forests, P return to soil via above-ground litter
(0.85 g P m'2yr _1) was greater than values cited for forest litter (0.22 to 0.67 g P m'2 yr '*).

Table 6-9. Soil order and stores of total N, P, and extractable Pi, live above-ground biomass and N and P stores, as well as N- (NUE) and
P- (PIIE) use efficiency and the ratio of N to P storage in forest and tree-based agroecosystems ND indicates no data available
System
Soil &
depth cm
Soil store g m'2
N P
Extract
Pi g m'2
Biomass
tons ha"'
Store
N
g m'2
P
NU
E
x 103
PUE
x 103
Stor
e
N/P
Source
Peach palm agroforest-
Brazil (8 yrs)
Ultisol
0-20
418
109.1
0.23
Mehlich
34
25
2.1
1.4
16.2
11.9
This Study
Mature forest-
Venezuela
Oxisol
0-10
147
21.1
ND
246
95
3.1
2.6
79.4
317
Jordan and Uhl
1978
Mature forest-
Colombia
Oxisol
0-50
483
20.5
ND
326
100
3 8
3 3
85.9
26.3
Fólster et al.
1976
Mature forest-
Brazil
Ultisol
0-100
654
ND
2.42
Mehlich
410
306
5.2
1.3
78 9
58.9
Russell 1983
Secondary forest
Colombia (16 years)
Oxisol
0-50
664
22.2
ND
203
71
5.5
2.9
36.9
12.7
Fólster et al
1976
Secondary forest
Venezuela (5 yrs)
Oxisol
0-10
140
14 4
ND
40
17
0.8
2.4
50.0
21.3
Uhl and Jordan
1984
Secondary forest-
Peru (4 5 yrs)
Ultisol
0-45
582
ND
1.60
Olsen
55
30
18
1.8
30.6
167
Szott et al
1994 & 1996
Gmelina plantation-
Brazil (8 yrs)
Ultisol
0-100
573
ND
6.45
Mehlich
97
55
2.7
1.8
35.9
20.4
Russell 1983
Cacao-shade agroforest
Costa Rica (4 5 yrs)
Inceptisol
0-45
877
342.0
ND
36
35
3.9
10
9.2
9.0
Alptzar et al
1986

157
The large flux of P in agroforest litterfall was due, in part, to the large proportion of aborted
fruits and abscised flowers contained in the litter Combined, these P-rich reproductive tissues
accounted for 25% of the total litter mass and 51% of the annual transfer of P to the soil
through litterfall. In two studies, one of five mature forests in the Colombian Amazon (Lips
and Duivenvoorden 1996), and the other in Brazil which reports one of the highest P fluxes
in Amazonian litterfall (Barbosa and Feamside 1996), reproductive tissues comprised only
3% of total litter mass and 6% of annual P flux. Also notable is that peach palm leaflets,
which account for 39% of agroforest litter mass, have P contents (0.7 to 0.9 mg g'1) that
equal or exceed values (0.4 to 0.7 mg g'1) reported for mature Amazonian forest leaf litter
(Dantas and Phillipson 1989, Barbosa and Feamside 1996). As a result of relatively high P
contents in litterfall, it appeared that P was less limiting to organic matter decomposition than
N, as demonstrated by a shorter residence time of fallen litter on the agroforest floor.
Nitrogen remained immobilized in surface litter 60% longer than phosphorus. Interesting,
however, is that despite high rates of P return to the soil via litterfall, P resorption from
senescing agroforest leaves remained comparable to rates cited for mature Amazonian forests
(Vitousek and Sanford 1986, Scott et al. 1992).
Below-ground storage and productivity. This study reports biomass for roots with
diameters £ 10 mm to a soil depth of 40 cm, hence total below-ground biomass was
underestimated by not sampling deeper in the soil profile. Roots with diameters greater than
10 mm were not encountered in the random sample of standing stock, although larger roots
obviously account for some portion of total below-ground mass. Nonetheless, data from
other studies suggest that estimates of agroforest live root and dead litter mass may be fairly

158
representative because belowground biomass is typically concentrated both in the soil surface
and in finer roots. For example, in five-year-old peach palm-cupuassu agroforests in
Amazonas. Brazil, 65% of fine root mass measured to a depth of 150 cm was located in the
top 30 cm of soil, and one third of all fine roots was classified as litter (Haag 1997). Ferreira
et al. (1995) observed that approximately 80% of all peach palm root biomass in mature
plantations (sampled to a depth of 2 meters) was in the top 20 cm of the soii.
Root biomass data are difficult to compare among studies because of differing
sampling depths and root diameter classes, however a few studies indicate that the root mass
measured for this agroforest is typical for tree-based land-use systems in Amazonia. Total
agroforest root biomass (s 10 mm diameter, 892 g m'2, including litter) in the top 20 cm of
mineral soil was within a range reported for mature forests and four different 30-year-old tree
plantations in eastern Amazonia (273 to 908 g m'2, Smith et al. in press), and in young forest
fallows (600 to 835 g m'2, Uhl and Jordan 1978, Szott et al. 1994). However, root biomass
in the older tree plantations and mature forest (409 to 1,215 g m'2) tended to exceed that of
the agroforest when the root mat growing on top of the soil surface was included in the
comparison.
Several authors (Vitousek and Sanford 1986, Vogt et al. 1986) have demonstrated
a trend for tropical forests growing on nutrient-poor Oxisols and Ultisols to have higher root
to shoot ratios than those growing in more nutrient-rich soils, presumably because trees
“invest” more resources into acquiring the resource most limiting to productivity (Bloom et
al. 1985). In the present study, the agroforest root to shoot ratio (0.21) was similar to mature
forests growing on Amazonian Oxisols (0.20, Uhl and Jordan 1984) and higher than that for

159
younger (< 5 years) natural forest fallows (0.09, Szott et al. 1994). The storage of N in
below-ground tissues differed somewhat from that of native vegetation, however. The
average N concentration in agroforest fine roots (0.97%) was lower than values presented by
Klinge (1976) for mature forests in Amazonian Oxisols and Ultisols (1.22 to 1.63%), whereas
that of P (0.05%) fell within the range reported for mature forests (0.02 to 0.083%). Similar
to above-ground biomass, increased P storage, relative to N, was observed in agroforest
below-ground biomass. The ratio of N to P storage in agroforest roots (live plus litter, 14)
was lower than that reported for mature forests (32 to 81 Vitousek and Sanford 1986, Vogt
et al. 1986, Medina and Cuevas 1989), and secondary forest fallows (20 to 24, Uhl and
Jordan 1984, Szott et al. 1996), but higher than that of fertilized cacao-based agroforests (10,
Fassbender et al. 1988).
Estimates of root growth and death for this agroforest do not take into consideration
the seasonality of root turnover because root production was measured during one period
only, from the early to mid rainy season. Sanford and Cuevas (1996) noted that fine root
mortality in mature tropical forests growing in nutrient-poor Costa Rican soils was highest
during the dry season, followed by a peak in root production during the wet season. Thus,
one might assume that the fine root growth rate reported in this study (180 g m'2 yr'1 )
represents a maximum estimate of below-ground productivity. Reported rates of fine root
growth, measured in other studies using sequential soil cores and rhizatrons, vary
considerably among Amazonian land-uses, from that in Venezuelan coffee plantations (661
g m'2yr ‘, 0-7 cm depth) to primary terra firme forests (1,267 g m'2yr ’, 0-10 cm, Cuevas
and Medina 1988, Sanford and Cuevas 1996), although it is impossible to compare these data

160
with the present study, due to methodological differences. The data are comparable to that
in a study by Jordan and Escalante (1980), in which root production in mature terra firme
forest (124 g m'2 yr'1, 0-40 cm) was measured as total biomass accumulation in the interior
of cleanly excavated soil pits. A comparison of the two studies indicates an agroforest root
growth rate over twice that of the mature forest. Expressed per cm soil depth, root
production in the agroforest (18 g m'2 yr'1) is six-fold that in the Venezuelan forest (3.1 g m''
yr'1). Part of the difference is unquestionably due to the fact that root density generally
decreases with soil depth, and fine root production in the mature forest was measured in a 40
cm-deep pit as opposed to the top 15 cm of soil where the agroforest ingrowth cores were
buried. Nonetheless, while the estimate of fine root growth undoubtedly undervalues the
contribution of below-ground production and turnover to NPP and nutrient cycling, it does
suggest that fine root production in the agroforest may be at least comparable to that of a
mature forest. That the second sampling of fine root biomass in the upper 20 cm of soil did
not reveal significantly greater total root (live and dead) mass than that found during the initial
measurement in November may be due to the fact that root growth during the latter period
had already begun with the debut of the rainy season. Decomposition of dead roots
accumulated during the dry season may also help explain the lack of difference in root
biomass between the early and late rainy season sampling periods.
Removal ofN and P. Relative to other agroecosystems, nitrogen removal from this
particular assemblage of agroforest species appeared higher than that of phosphorus. Szott
et al. (1996) report that N and P export with rice grain harvest for an “average” (2 tons ha'1)
first crop following forest clearing on a Peruvian Ultisol ranges from 46 to 55 kg N ha'1 yr'1

161
and 9 to 10 kg P ha'1 yr'1, depending on whether or not the rice straw is left on the field or
removed with the crop. Similar N and P expon values are reported for a high-yielding (2
tons ha'1 yr'1) 17-year-old cacao-shade tree agroforest growing in an Alfisol in north-eastern
Brazil (44 kg N ha'1 yr'1 ha, 10 kg P ha'1 yr'1, Sanchez et al. 1985), although lower values are
also cited for the shifting cultivation of annual (unspecified) crops in central Brazilian Oxisols
(40 kg N ha'1 yr'1, Frissel 1977), and maize in acid Costa Rican Ultisols (4.9 kg P ha'1 yr'1,
Hands et. al. 1993). While P removal with the harvest of agroforest products might be only
half that expected from an average first rice crop, N export appears similar to that of annual
crops. Moreover, N removal in the Amazonian agroforest exceeded that of five-year-old
fertilized cacao-shade tree plantations (19 to 26 kg ha'1 yr'1, Fassbender et al. 1986) and
unfertilized 14-year-old Himalayan mandarin-/! Ibizea commercial plantation agroforests (39
kg ha'1 yr'1, Sharma et al. 1995), while P removal remained similar to that of both systems (4
to5 kg ha'1 yr'1). Estimated N removal from extensively-managed (unfertilized/unseeded)
pasture in central Brazil (13 kg ha'1, Frissel 1977) or eastern Amazonia (7 kg ha'1, Dias-Filho
et al. in press) is considerably less than that of the agroforest, although P export (2.5 to 4.6
kg ha'1 yr1 ) from the former is less than or equal to that of the agroforest.
Nitrogen and phosphorus losses through soil leaching were not measured for this
agroforest. Imbach et al. (1989) claimed that N and P removal through leaching from cacao-
based agroforests in Costa Rica (5.5 and 0.46 kg ha'1 yr'1, respectively) did not differ greatly
from other natural tropical ecosystems, although these values are at least ten-fold greater than
those presented by Vitousek and Sanford (1986) for tropical forests growing on Oxisols in
Brazil (0.2 kg N ha'1 yr'1, and 0.008 to 0.04 kg P ha'1 yr'1). Assuming agroforest N loss

162
through leaching was as great as that cited for Costa Rican agroforests, removal of N would
approximate its addition by rainfall. Phosphorus leaching would likely be much less due the
anion’s immobility in tropical Oxisols and Ultisols, as demonstrated by Williams and Melack
(1997) who found that stream water solute concentrations in deforested catchments of central
Amazonia were 50-fold less for total P than for N.
Cycling of N and P, and Agroforest Sustainability
Soil fertility may be reflected in the nutrient contents of individual plant tissues.
Cupuassu N and P concentrations from leaves of the eight-year-old agroforest fell at the low
end of the range for eight other six-year-old RECA agroforests (1.66 to 2.08 and 0.09 to
0.13%). Soil contents of Bray-, Mehlich- and resin-extractable, as well as total N and P,
averaged over 0-20 cm depth, were also within the range found in the younger agroforests
(Chapter 4), demonstrating that N and P dynamics in the eight-year-old system were
fundamentally similar to other agroforests in the region. Total C, N, and extractable P
contents also appear to be similar to other regions in Amazonia.
Phosphorus. Low soil and plant tissue P contents, as well as high rates of P
resorption, and subsequently high P-use efficiency, are all cited as evidence that P is more
limiting to tropical forest productivity than N (Vitousek and Sanford 1986, Cuevas and
Medina 1988, Attiwill and Adams 1993, Silver 1994). Grubb (1989) cautions against
comparing nutrient-use efficiency (NUE) among plant communities of differing developmental
stages, because in general, NUE increases with plant age. Brown et al. (1990) observed that
secondary forests were typically less P-use-efficient than mature stands regardless of age, soil
type and disturbance history, especially in return of P through litterfall. In this case, above-

163
ground P-use efficiency in the eight year old agroforest appeared lower than that of both
primary and secondary forests growing on P-poor soils. This, combined with high rates of P
return in litterfall, and moderately high NPP, might suggest that despite soil concentrations
of extractable-P equal to or lower than values reported for a range of land-uses throughout
Amazonia, P may not be as limiting to agroforest productivity as it is to native forests, at least
during this early stage of the agroecosystem’s development.
One explanation may be that one or more of the agroforest species is talcing up P
originating from soil pools not measured by the extractable indices used in this and other
studies. It could be that the three perennial agroforest components, originally native to
Amazonian forests, have evolved either to tolerate P-poor conditions, or to maximize P
acquisition through mechanisms that increase soil P availability relative to that measured in
commonly-used soil extracts (Chapin 1980, Lajtha and Harrison 1995). Moderately high
agroforest productivity, as well as above-average P contents in fresh leaves and fallen litter,
suggest the latter. Although similar data are unavailable for the other two agroforest species,
it is known that peach palm, the system’s dominant component, forms symbiotic mycorrhizal
associations (Mora-Urpi et al. 1997). Mycorrhizal associations may increase P availability
to host plants by expanding the surface area of contact between roots and soil, as well as
solubilize organic P through fungal release of phosphatases (Bolán 1991). Soil organic P (Po)
was not measured in this study, nor is it measured by the extractable P indices, and given the
large quantity of P returned to the soil through litterfall, Po may account for a significant
portion of the system’s P nutrition. The concentrated growth of peach palm root biomass in
the soil surface where overall nutrient availability was greater suggests this. In addition to

164
taking up nutrients as they are released from decomposing organic matter, the plants may also
have “access” to less readily available forms of Po. Fernandes and Sanford (1995) suggested
that peach palm has the ’’ability” to deplete moderately labile (NaOH-extractabie) Po after
finding that this fraction was considerably lower in soils occupied by 30-year-old abandoned
peach palm plantations than in those of similar-aged cacao orchards and adjacent forests in
Costa Rica. The role of organic and inorganic P fractions not measured by commonly-used
extraction techniques in both Amazonian agroecosystem and forest nutrition certainly merits
further research, especially as it is likely that other native species growing on equally P-poor
soils similarly exploit more resistant forms of the nutrient.
If one or more of the agroforest components is simply scavenging P as other native
forest species might, then, the question remains, why are biomass P concentrations so high
relative to secondary forest vegetation growing in seemingly similar P-poor soils? Unlike
tropical secondary forests, which typically regenerate from abandoned agricultural fields or
pasture, most of the commercial plantation agroforests planted by members of RECA were
established on sites recently cleared of forest. Thus, the majority of agroforests received a
“subsidy” of nutrients released by burned forest biomass and decomposing slash. Kauffman
et al. (1995) found that total soil P in slashed-and-bumed primary forests in Rondónia, Brazil
increased 40% from prebum concentrations. Although some losses would occur if annual
crops were harvested from the agroforest during the first year of establishment, much of the
P pulse resulting from forest burning for site preparation would be taken up and stored in the
tissues of the rapidly aggrading perennial system. While large quantities of P are returned to
the soil in abscised plant parts, much of that stored in live tissues appears to be reused, as

165
demonstrated by foliar resorption rates comparable to those of mature forests. The result
appears to be an overall rapid and efficient cycling of P within the system.
Nitrogen. Total N contents in the agroforest’s soil appeared within the range reported
throughout Amazonia. While agroforest N-use efficiency appeared slightly lower than that
for natural Amazonian systems, foliar N concentrations, as well as N return to the soil via
litterfall were comparable to that of mature forests. Thus, while P cycling appears relatively
high in the agroforest, the storage and flux of N remains similar to Amazonian primary and
secondary forests. The longer mean residence time of N in agroforest surface litter indicates
that there may be more competition within the system for N than P among plants and
microbial populations, especially as the N-to-P ratio of peach palm leaf litter (14 to 14.8),
which comprises over 60% of total litterfall, is low relative to values cited for other tropical
forests (22 to 27, Vogt et al. 1986). Moreover, a soil C-to-N ratio (12.2) lower than those
reported for 19 tropical Oxisols (14.0) and 18 Ultisols (17.3, Sanchez et al. 1982), provides
further evidence that N may become more limiting to agroforest productivity than P, if
mineralization rates from decomposing organic matter decline because of reduced N
availability. The fact that N removal with the harvest of agroforest products is comparable
to that expected from the shifting cultivation of annual crops does not bode well for the
maintenance of N availability in the tree-based system.
Unlike phosphorus, the potential exists for large additions of nitrogen through fixation
of atmospheric N2 by leguminous herbs and trees. Glover and Beer (1986) found that N-
fixing shade trees could return 33 to 36 g N m'2 yr'1 to Costa Rican coffee plantation
agroforests when pruned three times annually. Similarly, Fassbender et al. (1985) found that

166
the organic matter and N input from biannual prunings of leguminous shade trees
compensated for harvest losses in cacao-based agroforests. Initially, at the urging of
researchers and extensionists working with the RECA organization, farmers had planted
leguminous cover crops in the agroforest understory, primarily in hopes of decreasing weedy
regrowth. By the sixth year following establishment, most RECA farmers had eradicated the
legumes from the agroforests. Reasons for eliminating the legumes included a fear of
increased fire hazard from the woody vines of Macuna cochichinensis, as well as the extra
labor necessary to keep the climbing legume from growing over the top of tree canopies.
Conclusions: Agroforest Sustainability
The eight-year-old agroforest system studied is typical of most others throughout
Amazonia, in that it is low- to no-input, thus, fertility maintenance is essentially reliant on the
same biological processes that sustain native Amazonian forests. Nutrient uptake from the
growing perennial vegetation likely decreased losses from leaching and erosion relative to
what might have been expected under annual crop systems in which the soil remains relatively
bare between cropping seasons. Moreover, rates of N and P cycling with this particular
configuration of perennial species have remained at least as high as that expected for mature
forests, while storage of N and P per unit of biomass appears somewhat greater than that of
native primary and secondary vegetation. Such benefits provided by tree-based
agroecosystems likely contributed to relatively high rates of productivity. Unlike the shifting
cultivation of annual crops, which ceases after the second or third year following forest
clearing because of a decline in soil fertility, relatively high rates of agroforest productivity
have been sustained at least eight years following native forest conversion.

167
However, unlike native forests, which are for all practical purposes “closed systems”,
commercial perennial crop-based agroforests undergo repeated N and P removal with
harvests. Ecological sustainability in agroforests, as in other agroecosystems, then becomes
a matter of degree, related to how much organic matter and nutrients are removed from the
system relative to what is returned. Under current management practices, it appears that
sustaining N availability in the agroforest may present more of a challenge in the near future
than that of P because of the large quantities of N lost with crop harvests. Contrary to what
might be expected from agricultural systems growing in highly weathered Amazonian Oxisols
and Ultisols, P cycling in the peach-palm-cupuassu-Brazil nut agroforest appears quite high
relative to that in mature, and even secondary, forests. This does not guarantee, however,
that P will not limit agroforest productivity. While the total annual P removal with perennial
crop harvest is half of that expected for one annual crop (two to three per year may be
grown), there is evidence to suggest that P availability may be declining, as demonstrated by
lower concentrations of readily-extractable P in soils of six-year-old agroforests relative to
adjacent native forests (Chapter 4). While the importance of these particular extraction
indices of P availability to long-term agroforest nutrition remains unclear, depletion of readily-
extractable P does demonstrate that this fraction is being taken up by agroforest vegetation
more rapidly than it is replenished in the soil solution. A decline in this soil P pool may have
differential effects on the agroforest’s components, depending upon the competitive ability
of each species, especially, for example, if one is able to exploit less readily-labile P fractions,
while another is not.

168
The concept of sustainability has many and varied definitions, especially among
academic disciplines. However there is some agreement that sustainable agriculture includes
meeting human needs for food and fiber, maintaining environmental integrity or quality, and
being socially and economically viable (Smit and Smithers 1994). One of the economic
advantages of the commercial plantation mixed agroforestry system is that it potentially
minimizes financial risk because farmers are able to produce and sell a variety of products.
This benefit is lost if one species is allowed to dominate the system, resulting in lowered
productivity of other economically important agroforest components. Furthermore, unlike
shifting cultivation plots, where soil fertility is generally restored during an adequately long
(10-15 years) fallow period, there is evidence to suggest that tree-based agroecosystems, if
not managed to sustain nutrient availability, can actually result in overall site degradation.
Fernandes and Sanford (1994) found that secondary succession from abandoned peach palm-
based plantations proceeded more slowly and resulted in a loss of species diversity, compared
to that occurring in old shifting cultivation plots and pasture. Soils from the abandoned palm
orchards were also lower in available N and P than those under the other land-use systems.
Thus, regardless of how quickly N and P are taken up, stored, and cycled through the system,
it seems that losses of either nutrient must be offset by additions if overall productivity in the
agroforest is to be sustained. Replacing nutrient losses, through careful additions of plant
residues, manure and inorganic fertilizers, and planting of N-fixing plants, may allow
Amazonian farmers to realize the full ecological and economic benefits of tree-based
agroecosystems. Obviously, further on-farm research is necessary to determine how this can
be achieved in a manner that is both practical and affordable for small producers.

CHAPTER 7
AMAZONIAN AGROFOREST SUSTAINABILITY:
NUTRIENT CYCLING, MANAGEMENT AND ECONOMIC VIABILITY
Accelerated P Cycling and Agroforest Management
The accelerated rate of P cycling demonstrated by the eight-year-old peach palm-
cupuassu-Brazil nut agroforest, as well as a decrease in extractable-P, relative to adjacent
native forest soils, suggests a species effect on biogeochemical cycling in the tree-based
agroecosystem. The effect of individual tree species on nutrient dynamics in forest
ecosystems is widely recognized (Binkley 1995), and the peach-palm dominated
agroforest appeared to cycle P at higher rates than those cited for native primary and
secondary forests growing in seemingly similar P-poor soils (Chapter 6). Not only were P
concentrations higher in peach palm above- and below-ground biomass, freshly fallen and
standing litter, but the P content found in these stores was considerably higher than in
those of the other two agroforest components due to the palm’s greater total biomass.
Increased uptake of P by peach palm would likely be facilitated by symbiotic mycorrhizal
associations (Clement and Habte 1995), which, in addition to increasing the volume of soil
explored, may solubilize organic P through increased phosphatase production (Bolán
1991). However, since most plants form mycorrhizal associations, one might expect the
other two agroforest components, also native to P-poor Amazonian forest soils, to benefit
similarly from mycorrhizal infection. Other studies have shown that even in the absence of
169

170
mycorrhizai associations, some species, such as pigeon pea (Cajunus cajún L. Millsp.)
utilize P bound in Fe oxides by exuding substances that chelate Fe3+ from their roots (Ae
et al. 1990). Fernandes and Sanford (1995) suggested that peach palm may have similar
“access” to ordinarily less soluble forms of P after observing that NaOFI-extractable Po
pools were significantly lower under old peach palm orchards than in surrounding plant
communities. Binkley et al. (1997) determined that P cycling in Albizia-Eucalyptus
plantations in Hawaii was accelerated compared to that in monospecific stands of
Eucalyptus. They attributed the increased P uptake by Albizia to a greater production of
low-molecular weight organic acids under this species that increased soil P availability.
Fox and Comerford (1992) found that oxalate, an organic acid often released by
decomposing litter or exuded by roots, undergoes ligand exchange reactions with oxide-
sorbed P, thus increasing P solubility in the soil solution. Interestingly, the fruit of peach
palm contain appreciable amounts of calcium oxalate, necessitating that the fruit be boiled
before human consumption (Mora-Urpi et al. 1997). The relationship between oxalate
crystals in peach palm fruit and potentially greater P availability has not been examined,
thus it seems that investigation of this and potential mechanisms employed by this palm
species to optimize P uptake in seemingly P-poor conditions is warranted. Further
research into the mechanisms controlling a species’ ability to solubilize “unavailable” P
may greatly benefit the development of more ecologically sustainable agroecosystems
throughout the tropics where P is very often the nutrient most limiting to production.
The possibility that accelerated P cycling in the peach palm-dominated agroforest
may be due to a species effect underscores three points. First, tree-based commercial

171
plantation agroforestry systems comprised of different species may not necessarily benefit
from similarly high rates of P cycling. Secondly, low removal of a specific nutrient, such
as P, may depend upon the configuration of agroforest species and stage of the system's
development. Thirdly, and perhaps most importantly, such a species effect on P cycling
can be manipulated to enhance P availability to other agroforest components, and this may
be particularly valuable in the P-limited soils comprising much of the humid tropics. For
example, as the system is currently managed, an increased capacity for P uptake by peach
palm threatens the other agroforest components because the palm’s high productivity has
allowed this species to dominate the system through rapid above- and below-ground
growth. Furthermore, declining pools of readily-extractable P in agroforest soils relative
to those in adjacent native forests, presumably due to rapid P uptake by the palm, may
differentially affect the agroforest components, perhaps decreasing the productivity of
species that do not have similar capacities for increased P uptake. However, as Chapter 4
demonstrated, palm root growth into ingrowth cores was significantly greater than that of
cupuassu in agroforest alleys, but not in rows where the P-treated cores were buried at the
drip line of cupuassu. This suggests that under these circumstances, peach palm may not
necessarily have an overwhelming competitive advantage in terms of root growth, so that
the cupuassu may benefit from soil amendments applied beneath its canopy, as
recommended by Calzavara (1980).
Unfortunately, as the focus group discussions with farmers pointed out, most
households in this region do not have easy access to the chemical fertilizers recommended.
However, the relatively P-rich organic matter found in peach palm leaf litter, or stored in

172
this species’ above-ground biomass, offers a relatively accessible source of organic
residues that can be applied to the soil underlying both cupuassu and Brazil nut by farmers
as they harvest palm heart. Group discussions with farmers regarding potential
modifications to agroforest management indicated that this was a feasible practice for
most households. As Chapter 5 demonstrated, soil P availability was greater under palm
litter, and the litter itself had a higher P content and decomposed more rapidly. Physically
moving the palm litter from agroforest alleys to beneath the dicot tree canopies would
require a pair of gloves (due to the spines found along palm rachises), but not much extra
labor since the species is interplanted with the other trees in the same system. This
appears as practical as collecting plant residues from nearby native forest, a practice cited
by some farmers as something they do to enrich soils for household vegetable gardens.
Physical manipulation of existing palm or other plant residues, combined with directed
application of small amounts of chemical fertilizers (were they to become more available)
or manures to help stimulate decomposition and mineralization of P-poor cupuassu and
Brazil nut leaf litter, would undoubtedly help maintain overall system productivity by
optimizing and/or facilitating P cycling by all agroforest components.
Finally, regardless of how rapidly P is cycled through the peach palm-dominated
agroforest, without nutrient additions to offset losses, a drop in productivity is just a
matter of time. Thus, if after several years productivity in the agroforest declines below a
level acceptable to farmers, the palm-dominated agroforests could be cut and burned in the
same manner used to clear native forests, and the minerals released from the combusted
plant biomass may provide a more P-rich environment for new crops than native

173
secondary forest (capoeira) of the same age. One possible draw-back to this strategy is
that some Peruvian farmers have noted difficulties establishing plants in soils previously
occupied by palm heart monocultures due to the extensive superficial rooting systems
produced by peach palm (Mora-Urpi et al. 1997). From these reports, however, it is
unclear how the land was prepared for new plantings, and one study suggests that dead
fine roots (< 3 mm diameter) from the palm collected in the top 20 cm of soil decompose
entirely within one year (McGrath unpublished data). Replanting new crops on sites
occupied by abandoned agroforests may reduce pressure on more biologically diverse
secondary forests and help minimize forest fragmentation, if farmers determine that the
labor and risk required to cut and bum abandoned peach palm-dominated agroforests is
less than that for capoeira.
Nitrogen Removal and Agroforest Management
The nitrogen cycle of the peach palm-cupuassu-Brazii nut agroforestry system
demonstrated that while tree-based agroforests may cycle nutrients nearly as efficiently as
native Amazonian forests, nutrient removal in the former can be just as high as that
expected for annual crop harvests. In this case, rates of N resorption from leaves prior to
abscission and N return to soil in fallen litter were comparable to those cited for mature
and secondary forests growing in Amazonian soils with similar total N contents, but
annual N export with agroforest product harvest rivaled that of an average first year rice
crop. In the agroforestry system studied, there was nothing to suggest an unusual species
effect on N cycling. All agroforest species tended to have similar foliar N concentrations,
although the largest N stores were found in peach palm stem stems and leaflets, due to

174
their large mass. In systems where heart-of-palm is more intensively exploited, N export
would be expected to rise, since the N concentration in the bud and leaf sheath tissues
comprising harvested palm heart is higher than that of peach palm fruit (Chapter 6).
However, the harvesting of palm heart eliminates stems that would eventually grow to
produce fruit (and store nutrients), so that fruit harvest, which accounts for approximately
80% of the current agroforest N export, might decrease. Availability of both P and N in
the system could potentially increase with the liberation of these elements stored in leaflets
and unused leaf sheath residues. Palm heart also has a much greater market value and
does not perish as easily during transport, which would give farmers a higher return for
each kilogram of organic matter removed from the system. Clearly, the effect of
intensifying palm heart harvest on N and P cycling, removal and management should be
examined further, especially in the monospecific palm heart plantations that were gaining
popularity with farmers as a more attractive alternative to mixed-species agroforests.
Regardless of the harvest strategy employed, the large annual removal of N with
agroforest crop harvest suggests that N availability may limit overall agroforest
productivity in the near future if such losses are not offset by additions. Fortunately, N
can be added to the system through atmospheric fixation of N2 by leguminous plants, and
RECA farmers appeared very aware of the importance of N additions to sustaining crop
productivity and the potential role of legumes as N-fixers. Although farmers had largely
eradicated the climbing Macuna vines from their agroforests, the Brazilian agronomic
research institution, EMBRAPA, begun experimenting with several other legume species
with a few RECA farmers. Collaboration among EMBRAPA scientists, local extension

175
agents and farmers will help ensure that species are chosen based upon their ease of
management, as well as on characteristics such as leaf litter quality and adaptability to the
region’s physiography. Thus, re-introducing N-fixing species to RECA’s agroforestry
systems is not an insurmountable challenge, although the management of leguminous
cover crops may need some modification to maximize N cycling efficiency. For example,
unlike understory weedy vegetation that was generally cut down twice a year and left to
decompose on the agroforest floor, many farmers allowed rows of Desmodium to grow
unpruned throughout the entire season. The legumes would naturally die during the dry
season, but farmers complained that the large dry shrubs presented a fire hazard, and some
researchers believed that the legumes exerted a competitive effect on cupuassu tree
growth. While it is not quite clear why farmers were hesitant to manage leguminous
understories in the same manner used for weedy regrowth, occasional pruning or cutting
down of the legumes would decrease the dry season hazard, and release N and other
nutrients in the decomposing litter. The annual cutting of understory weeds, as was
operationally practiced by RECA farmers, undoubtedly benefited the agroforest by
reducing inter-specific competition for water and nutrients, adding green manure for
organic matter build-up, and releasing nutrients, especially as N annual uptake by
understory weeds was higher than the initial total N content found in the eight-year-old
cupuassu and Brazil nut canopies (Chapter 6). Further on-farm and station
experimentation with legumes could determine the optimum periods for pruning, so that
nutrients release occurs when uptake and production requirements are the highest. Many
studies have shown, however, that even the most efficiently-managed N-fixing species

176
cannot entirely compensate for high annual N losses from a system (Imbach et al. 1989).
Thus, while the incorporation of legumes may extend agroforest productivity by adding N
and increasing organic matter cycling, it cannot guarantee that the system will not become
N-limited without N (and other nutrient) additions that balance iosses. Moreover, soil P
deficiencies often limit N-fixation in tropical soils (Ewel 1986).
Conclusions: Prospects for Ecological and Economic Sustainability
It has been assumed that offering economically and ecologically viable land
management strategies to Amazonian farmers is crucial to decreasing tropical forest
conversion. Amazonian farmers are rapidly adopting perennial-crop based agroforestry
systems as an alternative to shifting cultivation. This land use may offer a greater degree of
ecological stability if the biological processes that control sustained productivity in tree-
based ecosystems are maintained and/or enhanced through management practices.
However, as the RECA case study demonstrates, the ability to market agroforest crops
will ultimately determine the longevity of this system as a viable economic alternative to
other Amazonian land-uses. Thus, ideally, the most ecologically and economically
sustainable commercial plantation agroforests would produce high value and easily-
marketable cash crops with minimum nutrient and organic matter export from the system,
while maximizing nutrient cycling efficiency, organic matter build-up and soil protection.
This research indicates that under the socio-economic conditions faced by RECA farmers
(Chapter 2), the peach palm-cupuassu-Brazil nut commercial plantation agroforest planted
by the RECA organization has the potential to meet these criteria, to varying degrees,
depending upon future management. This particular system appears to promote

177
accelerated cycling of P in seemingly P-poor soils, and relatively efficient cycling of N,
especially if legumes are incorporated and managed to maximize N cycling. While these
processes have undoubtedly contributed to maintaining productivity far longer than would
be expected for annual crops growing in the same soils, ultimately, nutrient additions will
be needed to offset losses if the system is to continue to sustain high yields. Management
practices can help optimize nutrient cycling efficiency, but N-fixing leguminous cover
crops may not necessarily replace the large loss incurred by the system with yearly crop
harvests. Moreover, despite an accelerated rate of P cycling, future additions of this and
other nutrients, such as potassium (K), will likely be necessary to maximize the potential
for sustained production offered by long-lived tree-based agroecosystems. Government
policies that give resource-poor farmers greater access to credit so they can buy
agricultural inputs, such as chemical fertilizer, as well as further research into the efficient
and careful use of both organic and inorganic amendments in Amazonian soils, would go a
long way in helping Amazonian colonists develop more sustainable agricultural practices.
However, it makes sense to invest in more intensive agricultural practices only if the
systems are economically viable and show promise of improving the livelihoods of rural
households.
The crops produced by the peach palm-cupuassu-Brazil nut agroforest all
potentially have high market value, although their current marketability may be
constrained more by local infrastructural capacity than by market demand. Frozen
cupuassu pulp appears to have a relatively constant demand throughout Brazil, but
limitations in local infrastructure (e.g., roads, electricity) increased the processing,

178
transport and storage costs for RECA compared to those incurred by producers located
closer to large urban centers. Adding value to products prior to sale through processing
will increase the marketability of RECA’s crops. For example, making pasteurized juice
concentrates, jams and candy from cupuassu pulp, as well as “chocolate (cupulate)” from
cupuassu beans will add value to products, increase their shelf life and perhaps facilitate
transportation and storage. RECA’s newly-gained statehoodship with Rondónia may help
ensure that the town is provided with improved infrastructural support and maintenance
necessary to improve product processing (Chapter 2). Improving the quality of canned
heart-of-palm will make RECA’s product more competitive in markets in southern Brazil,
especially as harvesting palm heart does not kill peach palm as is the case with the single
stemmed Euterpe spp. from which the product is exploited in other regions. While
transforming peach palm fruit into a toasted nutrient-rich flour helps minimize losses
incurred by farmers awaiting transportation, the urban public will need to be educated on
the uses of this flour, and eventually a formal market for the flour and its products must be
developed to absorb all the fruit that will be produced in the near future by this particular
configuration of agroforest species. Peach palm fruit alone accounted for approximately
80% of the total mass harvested from the RECA commercial plantation agroforest. This
underscores the importance of diversification in future agroforest plantations, and the need
for market research conducted in collaboration with local non-governmental organizations
(NGO’s), such as PESACRE, to determine which products are most marketable in the
region, given local infrastructural and processing constraints, and consumer demands.
During this study period, it appeared that the RECA organization, with the help of other

179
NGO’s, was slowly but surely addressing these issues. For example, many farmers were
also planting native forest timber species in more recently established agroforestry
systems, along with other fruit trees and cash crops such as coffee and citrus. Confronting
these market challenges will go a long way towards ensuring the economic viability of the
organization and its commercial plantation agroforests.
Browder (1996) notes that Amazonian colonists are adaptive forest farmers whose
patterns of resource use co-evolve with the environment around them. As they learn
about forest species and ecosystem dynamics, they are able to successfully manipulate the
forest in ways that diversify sources of value. Indeed, it may be that the success of RECA
and other colonist producer groups will depend upon how dynamic these organizations
and their members can remain, able to respond to a rapidly changing geophysical and
socio-economic environment with modifications in land-use practices and market
strategies.
Finally, as comments made by participants in focus group discussions pointed out,
sustainable land management is also subject to perception. As long as colonist farmers do
not have confidence in a system’s potential for sustained production, they must continue
to minimize risk by clearing forest and planting new systems (Chapter 3). Moreover, it
seems unlikely that land owners will continue to invest resources, such as labor or
purchased inputs, in a system that does guarantee economic security, no matter how
ecologically sustainable it may be. Thus it is imperative that research institutions, such as
EMBRAPA, as well as local and foreign NGO’s, such as PESACRE, continue to work
with producers organizations to help them develop both practices that maintain or increase

180
productivity, and systems that meet market demands with minimal environmental
degradation. Direct participation by farmers in the investigative process will hopefully
foster a greater understanding for the processes that control sustained production and
ecosystem health, the constraints faced by households, and the opportunities available for
more sustainable agroecosystem management.

LIST OF REFERENCES
Abrams, M.M. and W.M. Jarreil. 1992. Bioavailability index for phosphorus using ion
exchange resin impregnated membranes. Soil Science Society of America Journal 56: 1532-
1537.
Ae, N.J. Arihara, K. Okada, T. Yoshihara, and C. Johansesn. 1990. Phosphorus uptake by
pigeon pea and its role in cropping systems of the Indian continent. Science 248: 477-480.
Anderson, A. 1992. Land-use strategies for successful extractive economies in Amazonia.
Advances in Economic Botany 9: 67-77.
Andriesse, J. P and T. T. Koopmans. 1984. A monitoring study on nutrient cycles in soils
used for shifting cultivation under various climatic conditions in tropical Asia. I. The
influence of simulated burning on form and availability of plant nutrients. Agriculture,
Ecosystems and Environment 12: 1-16.
Apízar, L., H.W. Fassbender, J. Heuveidrop, H. Fólster, and G. Enriquez. 1986. Modeling
agroforestry systems of cacao (Theobroma caca) with laurel (Corcha alliodora) and poro
(Erythrina poeppigina) in Costa Rica I. Inventory of organic matter and nutrients.
Agroforestry Systems 4: 175-189.
Arkcoll, D. 1990. New crops from Brazil. Pages 367-369 in Cabral Velho, C., A. Whipkey,
and J. Janick. 1990. Cupuassu: A new beverage crop for Brazil. Pages 367-375 in J Janick
and J.E. Simon, editors. Advances in New Crops Proceedings of the First National
Symposium, New Crops: Research, Development. Economics. Timber Press, Portland,
Oregon, U S.A.
Attiwill, P. M. and M.A. Adams. 1993. Tansley Review No. 50: Nutrient cycling in forests.
New Phytology 124: 561-582.
Attiwill, P.M. and G.W. Leeper. 1987. Forest Soils and Nutrient Cycles. Melbourne
University Press, Collingwood, Victoria, Australia.
Barbosa, R.I. and P.M. Feamside. 1996. Carbon and nutrient flows in an Amazonian forest:
Fine litter production and composition at Apiaú, Roraima, Brazil. Tropical Ecology 37: 115-
125.
181

182
Beck, M. A. and P.A. Sanchez. 1994 Soil phosphorus fraction dynamics during 18 years of
cultivation on a Typic Paleudult. Soil Science 34: 1424-1431.
Beck, M.A. and P.A. Sanchez. 1996. Soil phosphorus movement and budget after 13 years
of fertilized cultivation in the Amazon basin. Plant and Soil 184: 23-31.
Beer, J. 1991. Implementing on-farm agroforestry research: lessons learned in Talamanca,
Costa Rica. Agroforestry Systems. 15:229-243.
Beer, J., A. Bonnemann, W. Chavez, H.W. Fassbender, A C. Imbach, and I. Martel. 1990.
Modelling agroforestry systems of cacao (Theobroma cacao) with Cordia allidora and
Erythrina poeppigigiana in Costa Rica. V. Productivity indices, organic matter models and
sustainability over ten years. Agroforestry Systems 12: 229-249.
Benites, J .R. 1990. Agroforestry systems with potential for acid soils of the humid tropics
of Latin America and the Caribbean. Forest Ecology and Management 36: 81-101.
Binkley, D. The influence of tree species on forest soils: processes and patterns. Pages 1-33
in D.J. Mead and I S. Comforth, editors. Proceedings of the Trees and Soil Workshop,
Lincoln University 28 February - 2 March 1994. Agronomy Society of New Zealand Special
Publication No. 10, Lincoln University Press, Canterbury, New Zealand.
Binkley, D , C. Giardina, and M. Ryan. 1997. Opposite effects of tree species on phosphorus
supply and uptake in Hawaii. Supplement to Bulletin of the Ecological Society of America,
Abstracts from the 1997 Annual Meeting 78: 54.
Bloom, A.J., F.S. Chapin, III, and H.A. Mooney. Resource limitation in plants-an economic
analogy. Annual Review of Ecology and Systematics 16: 363-393.
Bolán, N. S. 1991. A critical review of the role of mycorrhizal fungi in the uptake of
phosphorus by plants. Plant and Soil 143:189-207.
Bowman, R. A. and C. V. Cole. 1978. Transformations of organic phosphorus substrates
in soils evaluated by NaHC03 extraction. Soil Science 125: 49-54
Bray, R.H. and L.T. Kurtz. 1945. Determinations of total, organic and available forms of
phosphorus in soils. Soil Science 125: 39-45.
Browder, J O. 1988. Public policy and deforestation in the Brazilian Amazon. Pages 247-
297 in R. Repetto and M. Gillis, editors. Public Policies and the Misuse ofForest Resources.
Cambridge Press, London, UK.

183
Browder. J.O. 1996. Reading colonist landscapes: social interpretations of tropical forest
patches in an Amazonian agricultural frontier. Pages 285-299 in J. Schelhas and R.
Greenberg, editors. Forest Patches in Tropical Landscapes. Island Press, Washington, D C.,
USA.
Brown, I F., D C. Nepstad, I. De O. Pires, L.M. Luz, and A S. AJechandre. 1992. Carbon
storage and land-use in extractive reserves. Acre, Brazil. Environmental Conservation 19:
307-315.
Brown, S., A.J.R. GHlespie, and A.E. Lugo. 1989. Biomass estimation methods for tropical
forests with applications to forest inventory data. Forest Science 4: 881-902.
Brown, S. and A.E. Lugo. 1990. Tropical secondary forests. Journal of Tropical Ecology
6: 1-32.
Byard, R., K.C. Lewis, F. Montagnini. 1996. Leaf litter decomposition and mulch
performance from mixed and monspecific plantations of native tree species in Costa Rica.
Agriculture, Ecosystems and Environment 58: 145-155.
Cabral Velho, C., A. Whipkey, and J. Janick. 1990. Cupuassu: A new beverage crop for
Brazil.Pages 367-375 in J Janick and J.E. Simon, editors. Advances in New Crops
Proceedings of the First National Symposium, New Crops: Research. Development.
Economics. Timber Press, Portland, Oregon, U.S.A.
Caldwell, M.M. 1994. Exploiting nutrients in fertile soil microsites. Pages 325-347 in M.
M. Caldwell and W. Pearcy, editors. Exploitation of Environmental Heterogeneity bv Plants:
Ecophysiological Processes Above- and Belowground. Academic Press, Inc., San Diego,
California, USA.
Calzavara, B.B.G. 1980. Culturas da Amazonia: Fruteiras Abieiro Abricózeiro Bacurizeiro
Biribázeiro Cupuaguzeiro. EMBRAPA-CPATU, Brasilia, Brazil.
Campbell, C. 1994. Gender issues and non-timber forest products: some preliminary
observations from on-going research in the western Brazilian Amazon. Paper presented at
the Annual Meeting of the Society for Applied Anthropology, April 1994, in Cancún, Mexico.
Cerri, C.C, B. Volkoff, and F. Andreaux. 1991. Nature and behavior of organic matter in soil
under natural forest, and after deforestation, burning and cultivation near Manaus. Forest
Ecology and Management 38: 247-257.
Chambers, R.A. 1983. Rural Development: Putting the Last First. John Wiley & Sons Inc.,
New York, New York, USA.

184
Chambers, R., A. Pacey, and L.A. Thrupp. 1989. Farmer First: Farmer Innovation and
Agricultural Research. Intermediate Technology Publications, London, UK.
Chander, K., S. Goyal, D P Nandal. K.K. Kapoor 1998 Soil organic matter, microbial
biomass and enzyme activities in a tropical forest agroforestry. Biology and Fertility of Soils
27: 168-172.
Chapin, F.S. 1980. The mineral nutrition of wild plants. Annnual Review of Ecology and
Systematics 11: 233-260.
Clement, C. R. 1 f The pejibaye palm (Bactris gasipaes H.B.K.) as an agroforestry
component. Agroforestry Systems 4: 205-219.
Clement, C.R. 1988 Domestication of the pejibaye palm (Bactris gasipaes). past and
present Pages 155-174 in M.J. Baiik, editor. The Palm - Tree of Life: Biology, Utilization
and Conservation. Advances in Economic Botany 6 New York Botanical Garden, New
York, New York. USA.
Clement, C.R. 1989. A center of crop genetic diversity in western Amazonia, a new
hypothesis of indigenous fruit-crop distribution. BioScience 39: 624-631.
Clement, C.R. and M Habte. 1995. Genotypic variation in vesicular-arbuscuiar mychorrizal
dependence of the pejibaye palm. Plant Nutrition 18: 1907-1916.
Comerford, N.B. and M.F. Skinner. 1989. Residual phosphorus solubility for an acid, clayey,
forested soil in the presence of oxalate and citrate. Canadian Journal of Soii Science 69: 111-
117.
Constantinides, M., and J.H. Fownes. 1994. Nitrogen mineralization from leaves and litter
oftropical plants: relationship to nitrogen, lignin and soluble polyphenol concentrations. Soil
Biology and Biochemistry 26: 49-55.
Cooperband, L.R., P.M. Gale, and N.B. Comerford. In Press. Refinement of the anion
exchange membrane method for soluble phosphorus measurement. Soil Science Society of
America Journal.
Cooperband, L. R. and T.J. Logan. 1994. Measuring in situ changes in labile soil phosphorus
with anion-exchange membranes. Soil Science Society of America Journal 58: 105-114.
Cornejo, F.H., A. Varela, and S. Joseph Wright. 1994. Tropical forest litter decomposition
under seasonal drought: nutrient release, fungi and bacteria. Oikos 70: 183-190.

185
Crews, T. E. 1993. Phosphorus reguation of nitrogen fixation in a traditional Mexican
agroecosystem. Biogeochemistry 21: 141-166.
Crews, T. E. 1996. The supply of phosphorus from native, inorganic phosphorus pools in
continuously cultivated Mexican agroecosystems. Agriculture, Ecosystems and Environment
57: 197-208.
Cross, A.F. and W. H. Schlesinger. 1995. A literature review and evaluation of the Hedley
fractionation: Applications to the biogeochemical cycle of soil phosphorus in natural
ecosystems. Geoderma 64: 197-214.
Cuevas, E. and E. Medina. 1988. Nutrient dynamics within Amazonian forests II. Fine root
growth, nutrient availability and leaf litter decomposition. Oecologia 76: 222-235.
Dantas, M. and J. Phillipson. 1989. Litterfall and litter nutrient content in primary and
secondary Amazonian “terra firme’ rain forest. Journal of Tropical Ecology 5: 27-36.
Davidson, E.A. and I. Ackerman. 1993. Changes in carbon inventories following cultivation
of previously unfilled soils. Biogeochemistry 20. 161-193.
Davidson, E.A., P.A. Matson, P M. Vitousek, R. Riley, K. Dunkin, G. Garcia-Méndez and
J.M. Maass. 1993. Processes regulating soil emissions of NO and N02 in a seasonally dry
tropical forest. Ecology 74: 130-139.
Dean, W. 1995. With Broadax and Firebrand: The Destruction of the Brazilian Atlantic
Forest. University of California Press, Berkeley, CA, USA.
Dias-Filho, M.B., E.A. Davidson, and C.J.R. de Carvalho. In press. Pastures. In M.E.
McClain, R.L. Victoris and J.E. Richey, editors. The Biogeochemistrv of the Amazon Basin.
Oxford University Press, New York, New York, USA.
Diaz-Ravina, M., T. Carballas, and M.J. Acea. 1995. Seasonal changes in microbial biomass
and nutrient flush in forest soils. Biology and Fertility of Soils 19: 220-226.
Ewel, J.J. 1976. Litter fall and leaf decomposition in a tropical succession in Guatemala.
Journal of Ecology 64: 293-308.
Ewel, J. 1986. Designing agricultural systems for the humid tropics. Annual Review of
Ecology and Systematics 17: 245-271.
Ewel, J, C. Berish, and B. Brown. 1981. Slash and bum impacts on a Costa Rican wet forest
site. Ecology 62: 816-829.

186
Ewel, J. J., M.J. Mazzarino, and C.W Berish. 1991. Tropical soil fertility changes under
monocultures and successional communities of different structure. Ecological Applications
1: 289-302.
Fardeau, J. C. 1996. Dynamics of phosphate in soils. An isotopic outlook Fertilizer
Research 45: 91-100.
Fassbender, H.W., L. Alpízar, J. Heuveldop, H. Folster, and G. Enriquez. 1988. Modelling
agroforestry systems of cacao (Theobroma caca) with laurel (Cordia alliodora) and poro
(Erythrina poeppigina) in Costa Rica. III. Cycles of organic matter and nutrients.
Agroforestry Systems 6: 49-62.
Feamside, P.M. 1993. Deforestation in Brazilian .Amazonia: the effect of population and
land tenure. Ambio 22: 537-545.
Feamside, P.M. 1996. Amazonian deforestation and global warming: carbon stocks in
vegetation replacing Brazil’s Amazon forest. Forest Ecology and Management 80: 21-34.
Feamside, P.M. and W Malheiros Guimaráes. 1996. Carbon uptake by secondary forests
in the Brazilian Amazon. Forest Ecology and Management 80: 35-46.
Feldstein, H.S. and J.J. Jiggins. 1994. Tools for the Field: Methodologies Handbook for
Gender Analysis in Agriculture. Kumarian Press, West Hartford, Conneticut, USA.
Fernandes, D.N. and R.L. Sanford, Jr. 1995. Effects of recent land-use practices on soil
nutrients and succession under tropical wet forest in Costa Rica. Conservation Biology 9:
915-922.
Fernandes, E.C.M., P.P. Motavalli, C. Castilla, and L. Mukurumbira. 1997. Management
control of soil organic matter dynamics in tropical land-use systems. Geoderma 79: 49-67.
Fernandes, M.L.V. and J. Coutinho. 1997. Anion and cation exchange resin membranes to
assess the phosphorus status of some Portuguese soils. Communications in Soil Science and
Plant Analyses 28: 483-495.
Fernandes, M.L.V. and G.P. Warren. 1996. Comparison of resin beads and resin membranes
for extracting soil phosphate. Fertilizer Research 44: 1-8.
Ferreira, S.A.N., C.R. Clement, and G. Ranzani. 1980. Contribuido ao conhecimento do
sistema radicular da pupunheira (Bactns Gasipaes H.B.K. -Guilielma gasipaes (H.B.K.)
Bailey) I - Solo Latossolo Amarelo, textura média. Acta Amazónica 10: 245-249.

187
Ferreira, S.A.N., C.R. Clement, G. Ranzani. and S.S. Costa. 1995. Contribuido ao
conhecimento do sistema radicular da pupunheira (Bactris Gasipaes Kunth Palmae) II - Solo
Latossolo Amarelo, textura argilosa. Acta Amazónica 25: 161-170.
Fitter, A.H. 1994. Architecture and biomass allocation as components of the plastic response
of root systems to soil heterogeneity. Pages 305-323 in M. M. Caldwell and W. Pearcy,
editors. Exploitation of Environmental Heterogeneity by Plants: Ecophvsiological Processes
Above- and Belowground. Academic Press, Inc., San Diego, California, USA.
Fontes, M. P. F. and S B. Weed. 1996. Phosphate adsorption by clays from Brazilian
Oxisols: relationships with specific surface area and minerology. Geoderma 72: 37-51.
Fox, T. R., N.B. Comerford, and W W. McFee. 1990. Phosphorus and aluminum release
from a spodic horizon mediated by organic acids. Soil Science Society of America Journal
54:1763-1767.
Frissel, M.J. 1977. Cycling of mineral nutrients in agricultural ecosystems. Agro-
Ecosystems 4: 1-354
Giblin, A.E., J.A. Laundre, K.J. Nadelhoffer, and G.R. Shaver. 1994. Measuring nutrient
availability in arctic soils using ion exchange resins: a field test. Soil Science Society of
America Journal 58: 1154-1162.
Gibson, D. J. 1986. Spatial and temporal heterogeneity in soil nutrient supply measured using
in situ ion-exchange resin bags. Plant and Soil 96: 445-450.
Glover, N. and J.W. Beer. 1986. Nutrient cycling in two traditional Central American
agroforestry systems. Agroforestry systems 4: 77-87.
Grime, J.P. 1977. Evidence for the existence of three primary strategies in plants and its
relevance to ecological and evolutionary theory. American Naturalist 111: 1169-1194.
Grubb, P.J. 1989. The role of mineral nutrients in the tropics: a plant ecologist’s view.
Pages 417-439 in J. Proctor, editor. Mineral Nutrients in Tropical Forest and Savanna
Ecosystems. Blackwell Scientific Publications, Oxford, UK.
Grupo PESACRE. 1989. Sustainability of agroforestry and agricultural systems used by
Rubber Tappers and settlers in the state of Acre, Brazilian Amazon. Paper Presented at the
Ninth Annual Farming Systems Research/Extension Symposium, October 8-11, Fayetteville
AK, USA.

188
Haag, D. 1997. Root distribution patterns in a polycuiturai system with local tree crops on
an acid upland soil in Central Amazonia. Master of Science Thesis, Universitat Bayreuth,
Bayreuth, Germany.
Hands, M., A.F. Harrison, and T. Bayliss-Smith. 1995. Phosphorus Dynamics in slash-and-
bum and alley cropping on Ultisols of the humid tropics. Pages 155-170 in H. Tiessen H,
editor. Phosphorus in the Global Environment Transfers, Cycles and Management. John
Wiley & Sons, Chichester, U K.
Haydu, J.J. and R. H. Wallace. 1997 Curso de comercializagáo para produtos
agroflorestais: Apresentacáo e observares. International Working Paper Series IW97-13,
International Agricultural Trade and Development Center, University of Florida, Institute of
Food and Agricultural Sciences, Gainesville, FL, USA.
He, Z.L., J.Wu, A.G.O’Donnell, and J.K. Syers. 1997. Seasonal responses in microbial
biomass, carbon, phosphorus and sulphur in soils under pasture. Biology and Fertility of Soils
24: 421-428.
Hecht, S. and A. Cockbum. 1990. The Fate of the Forest. Developers, Destroyers and
Defenders of the Amazon. Harper Perennial, New York, New York, USA.
Hedley, M.J., J.J.Mortvedt, N.S. Bolán, and J.K. Syers. 1995. Phosphorus fertility
management in agroecosystems. Pages 59-92 in H. Tiessen, editor. Phosphorus in the Global
Environment. Transfers, Cycles and Management. John Wiley & Sons, Chichester, U.K.
Hedley, M.J., R.E. White, and P.H. Nye. 1982. Plant-induced changes in the rhizosphere of
rape (Brassica napus var. Emerald) seedlings. New Phytology 91: 45-56.
Hildebrand, P. And F. Poey. 1985. On-Farm Agronomic Trials in Farming Systems Research
and Extension. Lynne Reiner Publishers, Boulder, CO, USA.
Holdridge, L. R. 1967. Life Zone Ecology. Tropical Science Center, San Jose, Costa Rica.
Hólscher, D., B. Ludwig, R.F. Móller and H. Fólster. 1997. Dynamic of soil chemical
parameters in shifting cultivation agriculture in the Eastern Amazon. Agriculture, Ecosystems
and Environment 66: 153-163.
Huang, W Z. and J. J. Schoenau. 1996. Microsite assessment of forest soil nitrogen,
phosphorus, and potassium supply rates in-field using ion exchange membranes.
Communications in Soil Science and Plant Analyses 27: 2895-2908.
Husch, B., C.I. Miller, and T.W. Beers. 1982. Forest Mensuration. Third Edition. John
Wiley & Sons, New York, New York.

189
IBGE. 1990. Proieto Zoneamento das Potencialidades dos Recursos Naturais da Amazonia
Legal. Fundacao Instituto Brasileiro de Geografía e Estática. Rio de Janeiro, Brazil.
Imbach, A. C., H.W Fassbender, R. Borel, J. Beer, and A. Bonnemann. 1989 Modelling
agroforestry systems of cacao (Theobroma caca) with laurel (Cordia alliodora) and poro
(Erythrina poeppigina) in Costa Rica. IV. Water balances, nutrient inputs and leaching.
Agroforestry Systems 8: 267-287.
Johnson, D. and P.K.R. Nair. 1989. Pages XXX-XXX in P. K. R. Nair, editor. Agroforestrv
Systems in the Tropics. Kluwer Academic Publishers, Dordrecht, Netherlands.
Jordan, C.F. 1985. Nutrient Cycling in Tropical Forest Ecosystems: Principles and their
Application in Management and Conservation. John Wiley & Sons, Chichester, England.
Jordan, C.F. 1988. Permanent plots for agriculture and forestry. Pages 58-89 in C.F. Jordan,
editor. Amazonian Rain Forests. Ecosystem Disturbanc and Recovery Springer-Verlag,
Berlin Heidelberg, Germany.
Jordan, C.F. and G. Escalante. 1980. Root productivity in an Amazonian rain forest.
Ecology 61: 14-18.
Jordan, C.F. and C. Uhl. 1978. Biomass of a “tierra firme” forest of the Amazon Basin.
Oecologia Plantarium 13: 387-400
Juo, A. S. R. and A. Manu. 1996. Chemical dynamics in slash and bum agriculture.
Agriculture, Ecosystems and Environment 58: 49-60.
Kainer, K.A. 1997 Enrichment Prospects for Extractive Reserves in a Nutshell: Brazil Nut
Germination and Seedling Autecology in the Brazilian Amazon. Ph.D. Dissertation,
University of Florida, Gainesville, FL. USA.
Kainer, K.A., M.L. Duryea, N. Costa de Macédo and K. Williams. 1998 Brazil nut seedling
establishment and autecology in extractive reserves of Acre, Brazil. Ecological Applications
8: 397-410.
Kandell, J. 1984. Passage Through El Dorado. Avon Books, New York, New York, USA.
Kauffman, J.B., D.L. Cummings, D.E. Ward, and R. Babbit. 1995. Fire in the Brazilian
Amazon: Biomass, nutrient pools, and losses in slashed primary forests. Oecologia 104: 397-
408.
Kilmer, V.J. and L.T. Alexander. 1949. Methods of making mechanical analyses of soils.
Soil Science 68: 15-24.

190
Klinge, H. 1973. Root mass estimation in lowland tropical rain forests of central Amazonia.
I. Fine root masses of a pale yellow latosol and a giant humus podzol. Tropical Ecology 14:
29-38.
Klinge, H. 1976. Root mass estimation in lowland tropical rainforests of central Amazonia,
Brazil. Tropical Ecology 17: 79-88.
Krause, H.H. and D. Ramlal. 1987. In situ nutrient extraction by resin from forested, clear-
cut and site-prepared soil. Canadian Journal of Soil Science 67: 943-952.
Laakkonen, S. 1996. The roasted forests, coffee and the history of deforestation in Brazil.
Pages 229-247 in M. Pala and G. Mery, editors. Sustainable Forestry Challenges for
Developing Countries. Kluwer Academic Publishers, Dordrecht, Netherlands.
Lajtha, K. 1988. The use of ion-exchange resin bags for measuring nutrient availability in
an arid ecosystem. Plant and Soil 105: 105-111.
Lajtha, K. and A.F. Harrison. 1995. Strategies of phosphorus acquisition and conservation
by plant species and communities. Pages 139-147 in H. Tiessen, editor. Phosphorus in the
Global Environment. Transfers, Cycles and Management. John Wiley & Sons, Chichester,
U.K.
Lavelle, P., E. Blanchart, A. Martin, A.V. Spain, and S. Martin. 1992. Impact of soil fauna
on the properties of soils in the humid tropics. Pages 157-185 in R. Lai, editor. Myths and
Science of Soils of the Tropics. Soil Science Society of America Special Publication,
Madison, WI, USA.
Leite, A.C. Unpublished. A busca de novos mercados para produtos agroflorestais: O caso
do Projeto RECA. Report for the Municipal Secretary of Agriculture (SEMAG) in Rio
Branco, Acre, Brazil.
Lessa, A. S. N., D.W. Anderson, and J O. Moir. 1996. Fine root mineralization, soil organic
matter and exchangeable cation dynamics in slash and bum agriculture in the semi-arid
northeast of Brazil. Agriculture, Ecosystems and Environment 59: 191-202.
Linquist, B. A., P.W. Singleton, and K.G. Cassman. 1997. Inorganic and organic
phosphorus dynamics during a build-up and decline of available phosphorus in an Ultisol. Soil
Science 162: 254-264.
Lips, J.M. and J.F. Duivenvoorden. 1996. Fine litter input to terrestrial humus forms in
Colombian Amazonia. Oecologia 108: 138-150.

191
Lodge, D.J., W.H. McDowell, andC.P. McSwiney. 1994. The importance of nutrient pulses
in tropical forests. Trends in Ecology and Evolution 9: 384-387.
Luizao, R.C.C., T.A. Bonde, and T. Rosswall. 1992. Seasonal variation of soil microbial
biomass-The effects of clearfelling a tropical rainforest and establishment of pasture in the
central Amazon. Soil Biology and Biochemistry 24: 805-813.
Maithani, K., R.S. Tripathi, A. Arunachalam, and H.N. Pandev 1996. Seasonal dynamics
of microbial biomass C, N, and P during regrowth of a disturbed subtropical humid forest in
north-east India. Applied Soil Ecology 4: 31-37.
Marrs, R.H., J. Thompson, D. Scott, and J. Proctor. 1991. Nitrogen mineralization and
nitrification in terra firme forest and savanna soils on Ilha de Maracca. Roraima. Brazil.
Journal of Tropical Ecology 7: 123-137.
Mascarenhas, J. 1992. Participatory rural appraisal and participatory learning methods:
recent experiences from MYRADA in South India. Forest, Trees and People Newsletter
15/16: 10-18.
Marschner, H. 1995. Mineral Nutrition of Higher Plants Second Edition. Academic Press
Limited, London, U.K.
Martinello, S. 1993. RECA: um paraíso na Amazonia. Municipios do Acre, June: 6-14.
McKean, S. J. and J.P. Warren. 1996. Determination of phosphate desorption characteristics
in soils using successive resin extrations. Communications in Soil Science and Plant Analyses
27: 2397-2417.
McLaughlin, M.J., P.A. Lancaster, P.W.G. Sale, N.C. Uren, and K.I. Peverill. 1993. Use of
cation/anion exchange membranes for multi-element testing of acidic soils. Plant and Soil
156: 223-226.
Medina, E. and E. Cuevas. 1989. Patterns of nutrient accumulation and release in
Amazonian forests of the upper Rio Negro basin. Pages 217-240 in J. Proctor, editor.
Mineral Nutrients in Tropical Forest and Savanna Ecosystems. Blackwell Scientific
Publications, Oxford, UK.
Mesquita, R. de C.G., S. W. Workman, and C.L. Neely. 1998. Slow litter decomposition
in a Cecrop/a-dominated secondary forest of central Amazonia. Soil Biology and
Biochemistry 30: 167-175.

192
Montagnini. F., K. Ramstad, and F. Sancho. 1993. Litterfall, litter decomposition and the
use of muich of four indigenous tree species in the Atlantic lowlands of Costa Rica.
Agroforestry Systems 23: 39-61.
Moraes, J.F.L., B. Volkoff, C.C. Cerri and M. Bemoux. 1996. Soil properties under
Amazon forest and changes due to pasture installation in Rondónia, Brazil. Geoderma 70:
63-81.
Mora-Urpí, J. 1992. Pejibay Palm (Bactris gasipaes). Pages 209-219 in J E. Hernández
Bermejo and J. León, editors. Cultivos Marginados: Otra Perspectiva de 1492. Food &
Agriculture Organization (FAO) and Jardín Botánico de Córdoba, FAO Production and
Protection Paper 26, Rome.
Mora-Urpí, J., J.C. Weber and C.R. Clement. 1997. Peach Palm. Badris zasipaes Kunth.
Promoting the conservation and use of underutilized and neglected crops. 20. Institute of
Plant Genetics and Crop Plant Research, Gatersleben/Intemational Plant Genetic Resoures
Institute, Rome, Italy.
Moreira, J. 1992. RECA enfrenta dificuldades: Síntese de um projeto orginal. A Gazeta,
October 9, 1992.
Mori, S.A. and G.T. Prance. 1990. Taxonomy, ecology and economic botany of the Brazil
nut (Bertholletia excelsa Humb. & Bonpl.: Lecythidaceae). Advances in Economic Botany
8: 130-150.
Murphy, J. and J. P. Riley. 1962. A modified single solution method for determination of
phosphate in natural waters. Analítica Chimica Acta 27: 31-36.
Nair, P. K. R. 1989. The role of trees in soil productivity and protection. Pages 567-589 in
P. K. R. Nair, editor. Agroforestrv Systems in the Tropics. Kluwer Academic Publishers,
Dordrecht, Netherlands.
Nair, P.K.R. and R.G. Muschler. 1993. Agroforestry. Pages 987-1057 in L. Pancei, editor.
Tropical Forestry Handbook Volumes I and 2. Springer-Verlag, Berlin, Heidelberg,
Germany.
Negrin, M. A., S. González-Carcedo, and J.M. Hemández-Moreno. 1995. P fraction in
sodium bicarbonate extracts of andic soils. Soil Biology and Biochemistry 27: 761-766.
Neill, C., J.M. Mellilo, P.A. Steudler, C.C. Cerri, J.F.L. de Moraes, M.C. Piccolo, and M.
Brito. Soil carbon and nitrogen stocks following forest clearing for pasture in the
southwestern Brazilian Amazon. Ecological Applications 7: 1216-1225.

193
Nelson, D. W. and L.E. Sommers. 1982. Total carbon organic carbon and organic matter.
Pages 570-571 In A.L. Page, editor. Methods of Soil Analysis Part 2: Chemical and
Microbiological Properties. .American Society of Agronomy, Madison. Wisconsin, USA.
Nepstad, D C., C.R. de Carvalho, E.A. Davidson, P.H. Jipp, P.A. Lefebvre, G.H. Negreiros,
E.D. da Silva, T.A. Stone. S .E. Trumbore, and S. Vieira. 1994. The role of deep roots in
the hydrological and carbon cycles of Amazonian forests and pastures. Nature 372: 666-669.
Nepstad, D C., D. Uhl, and E.A.S. Serrao. 1991. Recuperation of a degraded Amazonian
landscape: forest recovery and agricultural restoration. Ambio 20: 248-255.
Newman, E.I. 1966. A method of estimating the total length of root in a sample. Journal
of Applied Ecology 3: 139-145.
Nicholaides, J., D.E. Bandy, P.A. Sanchez, J.R. Benites, J.H. Vilachica, A.J. Coutu, and C.S.
Valverd. 1985. Agricultural Alternatives for the Amazon Basin. Bioscience 35: 279-285.
Nye, P.H. and D.J. Greenland. 1964. Changes in the soil after clearing tropical forest. Plant
and Soil 21: 101-112.
Nye, P.H. and P.B. Tinker. 1977. Solute Movement in the Soil-Root System. Blackwell
Scientific Publications, Oxford, United Kingdom.
Olson, J. S. 1963. Energy storage and the balance of producer and decomposer in ecological
systems. Ecology 44: 322-331.
Olsen, S. R. and L.E. Sommers. 1982. Phosphorus. Pages 403-430 in C. A. Black, editor
Methods of Soil Analysis, Part 2, Chemical and Microbiological Properties. Soil Science
Society of America, Inc., Madison, Wisconsin, USA.
Ostertag, R. 1998. Root Dynamics of Tropical Forests in Relation to Nutrient Availability.
PhD. Dissertation, University of Florida, Gainesville, FL. USA.
Palm, C.A. and P.A. Sanchez. 1990. Decomposition and nutrient release patterns of the
leaves of three tropical legumes. Biotropica 22: 330-338.
Palm, C.A. and P.A. Sanchez. 1991. Nitrogen release from the leaves of some tropical
legumes as affected by their lignin and polyphenolic contents. Soil Biology and Biochemistry
23: 83-88.
Parfitt, R.L., K.R. Tate and R.B. McKercher. 1994. Measurement of phosphorus
mineralization using an anion exchange membrane. Communications in Soil Science and Plant
Analyses 25: 3209-3219.

194
Polglase, P. J., PM. Attiwill, and M.A. Adams. 1992. Nitrogen and phosphorus cycling in
relation to stand age of Eucalyptus regnans F. Meull. III. Labile inorganic and organic P,
phosphatase activity and P availability. Plant and Soil 142: 177-185.
Projeto RECA. Unpublished. Project summary for Projeto de Reflorestamento Económico
Consorciado e Adensado. Nova California, Acre, Brazil.
Raghubanshi, A S., S.C. Srivastava, R.S. Singh, and J.S. Singh. 1990. Nutrient release in
leaf litter. Nature 346: 227.
Raich, J. W., R.H. Riley, and P.M. Vitousek. 1994 Use of root-ingrowth cores to assess
nutrient limitations in forest ecosystems. Canadian Journal of Forest Research 24: 2135-
2138.
Ribeiro, G.D. 1992. A Cultural do Cupuaquzeiro em Rondónia. Empresa Brasileira de
Pesquisa Agropecuária (EMBRAPA), Porto Velho, Rondónia, Brazil.
Ribeiro de Nazaré, R.F., W.C. Barbosa, and R. M. F. Viégas. 1990. Processamento das
sementes de cupuaqu para a obtenqáo de cupulate. Boletim de Pesquisa No. 109. Empresa
Brasileira de Pesquisa Agropecuária (EMBRAPA), Belém, Para, Brazil.
Rocheleau, D.E. 1991. Participatory research in agroforestry: learning from experiences and
expanding our repertoire. Agroforestry Systems 15: 111-138.
Rocheleau, D.E. 1994 Participatory research and the race to save the planet: questions,
critique, and lessons from the field. Agriculture and Human Values 11: 4-25.
Ruddell, E.D. and J. Beingolea. 1995. Towards farmer scientists. ILEIA Newsletter for
Low External Input and Sustainable Agriculture 11: 16-17.
Ruiz, P.O. 1993. El rol de las micorrizas en pijuayo (Bactnsgasipaes H.B.K.) Pages 127-
132 in J. Mora-Urpí, L.T. Szott, M. Murillo and V.M. Patiño, editors. IV Congreso
Internacional sobre biologia, agronomia e industrialización del Piiuavo. Universidad de Costa
Rica, San José, Costa Rica.
Russell, C.E. 1983. Nutrient Cycling and Productivity of Native and Plantation Forests at
Jari Florestal, Pará, Brazil. Doctoral Dissertation, University of Georgia, Athens, Georgia,
USA.
St. John, T.V. 1983. Response oftree roots to decomposing organic matter in two lowland
Amazonian rainforests. Canadian Journal of Forest Research 13: 346-349.

195
St. John, T.V. 1988. Prospects for application of vesicular-arbuscular mvcorrhizae in the
culture of tropical palms. Pages 50-55 in M.J. Balick, editor. The Palm- Tree of Life.
Biology, Utilization and Conservation. Advances in Economic Botany 6. New York
Botanical Garden, New York, New York. USA.
Sanchez, P. A. 1976. Properties and Mangement of Soils in the Tropics. Wiley, New York,
New York, USA.
Sanchez, P. A., D.E. Bandy, J.H. Villachicia, and J.J. Nicholaides. 1982. Amazon Basin soils:
Management for continuous crop production. Science 216: 821-827.
Sanchez, P.A., M.P. Gichuru, and L. B. Katz. 1983a. Organic matter in major soils of the
tropical and temperate regions. Pages 99-114 in International Congress of Soil Science,
editor. Managing Soil Resources to Meet the Challenges to Mankind. 12th International
Congress of Soil Science, New Delhi, India, 8-16 February 1982.
Sanchez, P.A., C.A. Palm, C.B. Davey, L.T. Szott, and C.E. Russell. 1985b. Tree crops as
soil improvers in the humid tropics? Pages 327-358 in MGR. Canned and J.E. Jackson,
editors. Attributes of Trees as Crop Plants. Institute of Terrestrial Ecology, Great Britain,
UK.
Sanchez, P. A., J.H. Villachica, and D.E. Bandy. 1983. Soil fertility dynamics after clearing
of a tropical rainforest in Peru. Soil Science Society of America Journal 47: 1171-1178.
Sanford, R.L. Jr. and E. Cuevas. 1996. Root growth and rhizosphere interactions in tropical
forests. Pages 268-303 in S.S. Mulkey, R.L. Chazdon, and A.P. Smith, editors. Tropical
Forest Plant Ecophysiology. Chapman & Hall, New York, New York, USA.
Scherr, S.J. 1991. On-farm research: the challenges of agroforestry. Agroforestry Systems
15: 95-110.
Schlesinger, W.H. 1997. Biogeochemistrv an Analysis of Global Change. Academic Press,
San Diego, California, USA.
Schmidt, J. P., S.W. Buol, and E.J. Kamprath. 1996. Soil phosphorus dynamics during
seventeen years of continous cultivation: fractionation analyses. Soil Science Society of
America Journal 60: 1168-1172.
Scott, D.A., J. Proctor, and J. Thompson. 1992. Ecological studies on a lowland evogeen
rain forest on Maracá Island, Roraima, Brazil. II. Litter and nutrient cycling. Journal of
Ecology 80: 705-717.

196
Seneviratne, R, and A. Wild. 1985. Effect of mild drying on the mineralization of soil
nitrogen. Plant and Soil 84: 175-179.
Serráo, E.A.S, D. Nepstad, and R. Walker. 1996. Upland agricultural and forestry
development in the Amazon: sustainability, criticality and resilience. Ecological Economics
18:3-13.
Sharma, R., E. Sharma, and A N. Purohit. 1995. Dry matter production and nutrient cycling
in agroforestry systems grown in association with Albizea and mixed tree species.
Agroforestry Systems 29: 165-179.
Sharpley, A. N. and S.J. Smith. 1985. Fractionation of inorganic and organic phosphorus in
virgin and cultivated soils. Soil Science Society of America Journal 49: 127-130.
Shaver, G.R. and J.M Melillo. 1984 Nutrient budgets of marsh plants: Efficiency concepts
and relation to availability. Ecology 65: 1491-1510.
Silver, W.L. 1994. Is nutrient availability related to plant nutrient use in humid tropical
forests? Oecologia 98: 336-343.
Singh, J.S. and S.R. Gupta. 1977. Plant decomposition and soil respiration in terrestrial
ecosystems. The Botanical Review 43: 449-528.
Singh, J.S., A.S. Raghubanshi, R.S. Singh, and S.C. Srivastava. 1989. Microbial biomass
acts as a source of plant nutrients in dry tropical forest and savanna. Nature 338: 499-500.
Skole, D.L., W.H. Chomentowski, W.A. Salas, and A.D. Nobre. 1994 Physical and human
dimensions of deforestion in Amazonia. Bioscience 44: 314-322.
Skole, D. And C. Tucker. 1993. Tropcial deforestation and habitat fragmentation in the
Amazon: Satellite data from 1978 to 1988. Science 260: 1905-1910.
Slinger, V.A. 1996. Analysis of a Planned Agroforestry System in Amazon Resettlement: A
Case Study of the Polo Municipal de Produfáo Agroflorestal of Aeré, Brazil. M.A. Thesis,
University of Florida, Gainesville, FL. USA.
Smit, B. and J. Smithers. 1994. Sustainable agriculture and agroecosystem health. Pages
31-38 in N. Ole Nielsen, editor. Proceedings of an International Workshop on
Agroecosvstem Health. University of Guelph, Guelph, Ontario, Canada.
Smith, C.K., H.L. Gholz, and F. de Assis Oliveira. 1998. Soil nitrogen dynamics and plant-
induced soil changes under plantations and primary forest in lowland Amazonia, Brazil. Plant
and Soil terra firme forest 200: 193-204.

197
Smith, K., H. L. Gholz, and F de Assis Oliveira. In press a. Soil carbon storages and
dynamics after forest conversion to tree plantations in lowland Amazonia, Brazil.
Smith, K., H. L. Gholz, and F. de Assis Oliveira. In press b. Litterfall and nitrogen-use
efficiency of plantations and primary forest in the eastern Brazilian Amazon.
Smith, N. H. 1990 Strategies for sustainable agriculture in the tropics. Ecological Economics
2: 311-323.
Smith, N., J. Dubois, D. Current, E. Lutz, and C. Clement. 1997. Agroforestry experiences
in the Brazilian Amazon: Constraints and opportunities. The Pilot Program to Conserve the
Brazilian Rainforest, Brasilia, Brazil.
Smyth, T.J. and M S. Cravo. 1990. Phosphorus management for continuous com-cowpea
production in a Brazilian Amazon Oxisol. Agronomy Journal 82: 305-309.
Soil Survey Staff. 1992. Keys to Soil Taxonomy, Fifth Edition. Pocahontas Press, Inc.,
Blacksburg, Virginia, USA.
Sombroek, W. G. 1966. Amazon Soils, a Reconnaissance of the Soils of the Brazilian
Amazon Region. Center for Agricultural Publications and Documents (PUDOC),
Wageningen, Netherlands.
Songwe, N.C., D.U.U. Okali, and F.E. Fasehun. 1995. Litter decomposition and nutrient
release in a tropical rainforest, Southern Bakundu Forest Reserve, Cameroon. Journal of
Tropical Ecology 11: 333-350.
Souza, C. G. 1991. Solos. Pages 123-136 in Geografía do Brasil. Volume 3. Regiao Norte.
Funda?áo Instituto Brasileiro de Geografía e Estática e Ministerio da Economía (IBGE), Rio
de Janeiro, Brazil.
Srivastava, S.C. 1992. Microbial C, N, and P in dry tropical soils: seasonal changes and
influence of soil moisture. Soil Biology and Biochemistry 24: 711-714.
Stark, N.M. and C.F. Jordan. 1978. Nutrient retention by the root mat of an Amazonian rain
forest. Ecology 59: 434-437.
Stark, N. And M. Spratt. 1977. Root biomass and nutrient storage in rain forest Oxisols near
San Carlos de Rio Negro. Tropical Ecology 18: 1-9.
Stevenson, F. J. 1986. Cycles of Soil: Carbon. Nitrogen, Phosphorus, Sulfur,
Micronutrients. Wiley, New York, New York, USA.

Stewart. J.W.B. and H. Tiessen. 1987. Dynamics of soil organic phosphorus.
Biogeochemistry 4: 41-60.
198
Subler, S. and C. Uhl. 1990. Japanese agroforestry in Amazonia: A case study in Tomé-apu,
Brazil. Pages 152-166 in A.B. Anderson, editor. Alternatives to Deforestation: Steps
Toward Sustainable Use of the Amazon Rain Forest. Colombia University Press, New York,
New York, USA.
Swift, M.J., O. Heal, and J.M. Anderson. 1979. Decomposition in Terrestrial Ecosystems.
Blackwell Scientific Publications, Oxford, U K.
Szott, L.T. and C.A. Palm. 1996. Nutrient stocks in managed and natural humid tropical
fallows. Plant and Soil 186: 293-309.
Szott. L.T., C.A. Palm, and C.B. Davey. 1994 Biomass and litter accumulation under
managed and natural tropical fallows. Forest Ecology and Management 67: 177-190.
Szott, L. T., C.A. Palm, and P.A. Sanchez. 1991. Agroforestry in acid soils of the humid
tropics. Advances in Agronomy 45: 275-301.
Tate, K.R. 1984 The biological transformation of P in soil. Plant and Soil. 76: 245-256.
Taylor, B.R., D. Parkinson, and W.F.J. Parsons. Nitrogen and lignin content as predictors
of litter decay rates: A microcosm test. Ecology 70: 97-104.
Tennant, D. 1975. A test of a modified line intersect method of estimating root length.
Journal of Ecology 63: 995-1001.
Thomas, G.W. 1982. Exchangeable cations. Pages 159-165 in C. A. Black, editor.
Methods of Soil Analysis, Part 2, Chemical and Microbiological Properties. Soil Science
Society of America, Inc., Madison, Wisconsin, USA.
Thomas, R. L., R.W. Sheard, and J.R. Moyer. 1967. Comparison of conventional and
automated procedures for nitrogen, phosphorus and potassium analysis of plant material using
a single digestion. Agronomy Journal 59: 240-243.
Thompson, J., and I. Scoones. 1994. Challenging the populist perspective: rural people’s
knowledge, agricultural research, and extension practice. Agriculture and Human Values 11:
58-76.
Thrupp, L.A. 1989. Legitimizing local knowledge, from displacement to empowerment for
Thirld World people. Agriculture and Human Values 6: 13-24.

199
Tiessen, H., P. Chacon, E. Cuevas. 1994. Phosphorus and nitrogen status in soils and
vegetation along a toposequence of dystrophic rainforests on the upper Rio Negro.
Oecologia 99: 145-150.
Tiessen, H., E. Cuevas, and P.Chaucon. 1994. The role of soil organic matter in sustaining
soil fertility. Nature 371: 783-785.
Toledo, J.M. and J. Navas. 1986. Land clearing for pastures in the Amazon. Pages 97-116
in R. Lai, P.A. Sanchez, and R.W. Cummings, Jr., editors. Land Clearing and Development
in the Tropics. A. A. Balkema Publishers, Rotterdam, Netherlands.
Tomlinson, P.B. 1983. Structural elements of the rain forest. Pages 9-28 in F B. Golley,
editor. Tropical Rainforest Ecosystems: Structure and Function. Elselvier Scientific
Publishing Co., Amsterdam, the Netherlands.
Trumbore. S.E., E.A. Davidson, P. Barbosa de Camargo, D C. Nepstad, and L A. Martinelli.
1995. Belowground cycling of carbon in forests and pastures of Eastern Amazonia. Global
Biogeochemical Cycles 9: 515-528.
UFAC. Unpublished data from the Federal University of Acre (UFAC) meteorological
station, January 1984 - December 1995. Boltim de dados meteorológicos do municipio de
Rio Branco, Acre, Brazil.
Uhl, C. and C.F. Jordan. 1984. Vegetation and nutrient dynamics during the first five years
of succession following forest cutting and burning in the Rio Negro region of Amazonia.
Ecology 65: 1476-1490.
Vaidyanathan, L.V and O. Talibudeen. 1970. Rate process in the desorption of phosphate
from soil by ion-exchange resins. Journal of Soil Science 21: 173-183.
Vandermeer. 1977. Observations on the root system of the pejibaye palm (Bactns gasipaes
H.B.K.) in Costa Rica. Turrialba 27: 239-242.
van Wambeke, A. 1992. Soils of the Tropics Properties and Appraisal. McGraw-Hill Inc.,
New York, New York, USA.
Venturieri, G.A. 1993. Cupuacu: a espécie, sua cultura, usos, e processamento. Clube do
Cupu, Belém, Brazil.
Vitousek, P.M. 1982. Nutrient cycling and nutrient use efficiency. American Naturalist 119
553-572.

200
Vitousek, P.M. 1984. Litterfall, nutrient cycling, and nutrient limitation in tropical forests.
Ecology 65: 285-298
Vitousek, P. M. and R.L. Sanford, Jr. 1986. Nutrient cycling in moist tropical forest. Annual
Review of Ecology and Systematics 17: 137-167.
Vogt, K.A., C.C. Grier, and D.J. Vogt. 1986. Production, turnover, and, nutrient dynamics
of above- and below-ground detritus of world forests. Pages 303-377 in A. Macfadyen and
E.D. Ford, editors. Advances in Ecological Research, Volume 15. Academic Press, Inc.,
London, UK.
Vogt, K. A. and H. Persson. 1990. Measuring growth and development of roots. Pages 477-
501 in J.P. Lassoie and T.M. Hinckley, editors. Techniques and Approaches in Forest Tree
Ecophysioloev. CRC Press, Boca Raton, Florida, USA.
Vosti, S.A., S. Oliveira, and M. Faminow. 1997. Policy issues in agroforestry: technology
adoption and regional integration in the western Brazilian Amazon. Paper presented at the
88th Annual Tri-Societies Meeting (American Society of Agronomy, Crop Science Society
of America, and Soil Science Society of America) in Indianapolis, Indiana, USA, February,
1997.
Wallace, R.H. 1994. Community-based production and marketing of cupua?u (Theobroma
grandiflomm) in Acre, Brazil: Challenges for sustainable nontimber forest product
development. M.A. Thesis, American University, Washington, D C., USA.
Wander, M.M., D.V. McCracken, L.M. Shuman, J.W. Johnson and J E. Box, Jr. 1995.
Anion-exchange membranes used to assess management impacts on soil nitrate.
Communications in Soil Science and Plant Analyses 26: 2383-2390
Waring, R.H. and W.H. Schlesinger. 1985. Forest Ecosystems Concepts and Management.
Academic Press, Inc., San Diego, California, USA.
Went, F.W. and N. Stark. 1968. Mycorrhiza. BioScience 18: 1035-1038.
Williams, M R, T.R. Fisher, and J.M. Melack. 1997. Chemical composition and deposition
of rain in the central Amazon, Brazil. Atmospheric Environment 31: 207-217.
Williams, M R. and J.M. Melack. 1997. Solute export from forested and partially deforested
catchments in the central Amazon. Biogeochemistry 38: 67-102.
Young, A. 1989. Agroforestrv for Soil Conservation. CAB International, Wallingford,
United Kingdom.

BIOGRAPHICAL SKETCH
Deborah McGrath was bom on December 27, 1963, in Madison, Wisconsin. She
graduated from high school in Boise, Idaho, in 1982, after which she began her college
education at Boise State University where she studied international relations, French, and
Russian studies. In 1984 she transferred to the University of Wisconsin-Madison, and it
was from this institution that she received her Bachelor of Arts, with majors in economics,
international relations, and history in 1986. Immediately following graduation she began
nearly four years of service as a Peace Corps Forestry Extension volunteer in the two
West African francophone nations of Benin and Guinea. Upon her return from Africa, she
was accepted into the University of Florida’s School of Forest Resources and
Conservation where she earned a Master of Science degree in forest resources and
conservation, with a concentration in tree physiology and reforestation. While a graduate
student at Florida, she worked with the University’s International Training Division as a
trainer for short courses given for international participants in agroforestry, farming
systems research & extension (FSRE), and gender analysis in natural resource
management. She was also employed as the campus Peace Corp recruiter. After
receiving a Title VI Foreign Language and Area studies Fellowship to study Brazilian
Portuguese in 1993, she began a Ph D. program in forest resources and conservation, with
a concentration in forest ecology and soils, agroforestry, and extension.
201

I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
IL. Duryea,
Professor of Forest Resources and
Conservation
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
? — j.
P.K.R. Nair
Professor of Forest Resources and
Conservation
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
OmM f
Wendell P. Cropper
Courtesy Associate Scientist of Forest
Resources and Conservation
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
^ l•.—¿a»./7
Nicholas B. Comerford T
Professor of Soil and Water Science

I certify that I have read this study and that in my opinion it conforms to acceptable
standards of scholarly presentation and is fully adequate, in scope and quality, as a thesis
for the degree of Doctor of Philosophy.
^la-kOMUL odámuIl.
Marianne C. Schmink
Professor of Latin American Studies
This dissertation was submitted to the Graduate Faculty of the School of Forest
Resources and Conservation in the College of Agriculture and to the Graduate School and
was accepted as partial fulfillment of the requirements for the degree of Doctor of
Philosophy.
December, 1998
(4/U^
Wayne H. Smith
Director, Forest Resources and
Conservation
✓
Rachel B. Shireman
Dean, College of Agriculture
Dean, Graduate School

LO
I 7ft0
|9^
-Ml HSs-5
UNIVERSITY OF FLORIDA
I m ni mu .u-.M-M ....
3 1262 08555 1165




PAGE 1

(&2/2*,&$/ 6867$,1$%,/,7< ,1 $0$=21,$1 $*52)25(676 $1 21)$50 678'< 2) 3+263+2586 $1' 1,752*(1 '<1$0,&6 )2//2:,1* 1$7,9( )25(67 &219(56,21 %\ '(%25$+ $11( 0&*5$7+ $ ',66(57$7,21 35(6(17(' 72 7+( *5$'8$7( 6&+22/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,1 3$57,$/ )8/),//0(17 2) 7+( 5(48,5(0(176 )25 7+( '(*5(( 2) '2&725 2) 3+,/2623+< 81,9(56,7< 2) )/25,'$

PAGE 2

$&.12:/('*0(176 DP H[WUHPHO\ IRUWXQDWH WR KDYH KDG DQ H[FHOOHQW DGYLVRU\ FRPPLWWHH (DFK PHPEHU KDG D XQLTXH DQG LQGLVSHQVDEOH UROH LQ P\ DFDGHPLF WUDLQLQJ DQG IRU WKHLU JHQHURXV DVVLVWDQFH DP YHU\ JUDWHIXO %RWK 'UV 1LFKRODV &RPHUIRUG DQG 0DULDQQH 6FKPLQN SURYLGHG WKH LQVSLUDWLRQ HQFRXUDJHPHQW DQG VXSSRUW WKDW XOWLPDWHO\ DOORZHG PH WR FDUU\ RXW UHVHDUFK LQ DUHDV WKDW ZRXOG QRW KDYH RWKHUZLVH IHOW IUHH WR H[SORUH DOVR JUHDWO\ EHQHILWWHG IURP WKH LQSXW RI 'UV :HQGHOO &URSSHU DQG .LPEHUO\Q :LOOLDPV ZKR LQWURGXFHG PH WR HFRORJLFDO FRQFHSWV WKDW EURDGHQHG P\ YLHZ RI DJULFXOWXUDO V\VWHPV DV IXQFWLRQLQJ HFRV\VWHPV 'U 3. 1DLU ZDV YHU\ JUDFLRXV WR DFFHSW WKH WDVN RI UHDGLQJ P\ GLVVHUWDWLRQ VR ODWH LQ WKH SURFHVV 0\ UHVHDUFK LQWHUHVWV ZHUH FHUWDLQO\ VWLPXODWHG E\ WKH G\QDPLF DJURIRUHVWU\ SURJUDP DW )ORULGD LQLWLDWHG E\ 'U 1DLU DQG KLV VWXGHQWV 0\ PDMRU DGYLVRU 'U 0DU\ 'XU\HD ZDV TXLWH VLPSO\ D PHQWRU LQ HYHU\ ZD\ DQG KHU IULHQGVKLS DQG JXLGDQFH KDYH EHHQ LQYDOXDEOH 0\ ILHOG UHVHDUFK ZDV IXQGHG E\ IHOORZVKLSV IURP WKH ,QWHU$PHULFDQ )RXQGDWLRQ WKH 1DWLRQDO 6HFXULW\ (GXFDWLRQ 3URJUDP DQG WKH 8QLYHUVLW\ RI )ORULGD 7 URSLFDO &RQVHUYDWLRQ DQG 'HYHORSPHQW 3URJUDP DP JUDWHIXO IRU WKHLU ILQDQFLDO VXSSRUW DV DP WR WKH 8QLYHUVLW\ RI )ORULGDfV &HQWHU IRU /DWLQ $PHULFDQ 6WXGLHV QRW RQO\ IRU WKH WZR\HDU 7LWOH 9, )RUHLJQ /DQJXDJHV DQG $UHD 6WXGLHV )/$6f IHOORZVKLS LQ %UD]LOLDQ 3RUWXJXHVH EXW IRU HQFRXUDJLQJ FROODERUDWLYH UHVHDUFK DPRQJ WKH VRFLDO DQG QDWXUDO VFLHQFHV ZLWK RXU VRXWKHUQ QHLJKERUV LL

PAGE 3

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fIDUPHUfV IDUPHU f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f LQ 0DQDXV %UD]LO DQG 3DXOLQH *ULHUVRQ RI WKH (FRV\VWHPV 5HVHDUFK *URXS DW WKH 8QLYHUVLW\ RI :HVWHUQ $XVWUDOLD IRU WKRXJKWIXO DGYLFH DQG GLDORJXH YLD HPDLO 7KLV UHVHDUFK ZRXOG QRW KDYH EHHQ SRVVLEOH ZLWKRXW WKH JHQHURXV DQG FRQVFLHQWLRXV FROODERUDWLRQ RI P\ %UD]LOLDQ FROOHDJXHV DQG IULHQGV DP H[WUHPHO\ JUDWHIXO WR WKH QRQn JRYHUQPHQWDO RUJDQL]DWLRQ *UXSR 3(6$&5( 3HVTXLVD H ([WHQV£R GR 6LVWHPDV $JURIORUHVWDLV QR $FUHf ERWK IRU LQVWLWXWLRQDO FROODERUDWLRQ DQG WUHPHQGRXV ORJLVWLFDO VXSSRUW GXULQJ WKH ILHOG UHVHDUFK %RWK WKH DVVLVWDQFH DQG IULHQGVKLS SURYLGHG E\ PHPEHUV RI 3(6$&5( HVSHFLDOO\ WKDW RI 1LOWRQ &RVVDQ 0RWD JUHDWO\ HQULFKHG P\ UHVHDUFK H[SHULHQFH LLL

PAGE 4

, WKDQN 626 $PD]RQLD DQG 3URMHWR 7DSLUL IRU WKHLU KHOSIXO IHHGEDFN DQG IRU DOORZLQJ PH WR SDUWLFLSDWH LQ WKHLU HQYLURQPHQWDO HGXFDWLRQ FRXUVHV DOVR DSSUHFLDWH WKH XVH RI ODERUDWRU\ IDFLOLWLHV DW WKH 8QLYHUVLGDGH )HGHUDO GR $FUH 8)$&f 0\ PRVW KHDUWIHOW WKDQNV DUH H[WHQGHG WR 0DULD /XFLD +DOO GH 6RX]D IRU KHU VXSHUE ILHOG DVVLVWDQFH +HU FRQVFLHQWLRXV ZRUN HQDEOHG PH WR HQWUXVW KHU ZLWK ILHOG GDWD FROOHFWLRQ ZKHQ QHHGHG WR OHDYH WKH UHVHDUFK VLWH +HU IULHQGVKLS DV ZHOO DV WKH KRVSLWDOLW\ RI ERWK KHU DQG KHU KXVEDQG ZLOO QRW EH IRUJRWWHQ PXVW H[SUHVV P\ GHHS JUDWLWXGH WR WKH IDUPHUV RI 3URMHWR 5(&$ 5HIORUHVWDWPHQWR (FRQPLFR &RQVRUFLDGR H $GHQVDGRf IRU WKHLU LQVLJKW DQG HQWKXVLDVWLF FROODERUDWLRQ LQ WKLV UHVHDUFK DP YHU\ JUDWHIXO WR WKH IDPLOLHV RI 6U DQG6UD 1HOVRQ %DUERVD $PDOGR GD &RVWD 6U -R£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

PAGE 5

7$%/( 2) &217(176 $&.12:/('*0(176 LL $%675$&7 YX ,1752'8&7,21 7KH 3UREOHP (FRORJLFDO ,QVWDELOLW\ LQ $PD]RQLDQ /DQG8VH 5HVHDUFK 4XHVWLRQV DQG 2EMHFWLYHV 7+( 5(&$ 352-(&7 7KH 6HWWOHPHQW RI 1RYD &DOLIRUQLD $FUH %UD]LO 3URMHWR 5(&$ $JURIRUHVW (VWDEOLVKPHQW $JURIRUHVW 7UHH 6SHFLHV &KDOOHQJHV )DFLQJ 5(&$ $33/<,1* $ 3$57,&,3$725< $3352$&+ 72 $*52(&2/2*,&$/ 5(6($5&+ ,QWURGXFWLRQ 0HWKRGV 7KH 3DUWLFLSDWRU\ 3URFHVV /HVVRQV /HDUQHG ,QIRUPDWLRQ *DLQHG 8VLQJ D 3DUWLFLSDWRU\ $SSURDFK &RQFOXVLRQV 3+263+2586 $9$,/$%,/,7< $1' ),1( 5227 352/,)(5$7,21 ,1 $0$=21,$1 $*52)25(676 6,; <($56 )2//2:,1* )25(67 &219(56,21 ,QWURGXFWLRQ 0HWKRGV 5HVXOWV 'LVFXVVLRQ DQG &RQFOXVLRQV &RQFOXVLRQV ,PSOLFDWLRQV IRU $PD]RQLDQ $JURIRUHVW 6XVWDLQDELOLW\ Y

PAGE 6

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

PAGE 7

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f DYDLODELOLW\ WR SODQWV JURZLQJ LQ ZHDWKHUHG WURSLFDO VRLOV FKDOOHQJHV WKH VXVWDLQDELOLW\ RI FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV 7KH SULPDU\ REMHFWLYH RI WKLV UHVHDUFK SURMHFW ZDV WR H[DPLQH SKRVSKRUXV DQG QLWURJHQ 1f G\QDPLFV LQ D ZLGHO\DGRSWHG SHDFK SDOP %DFWULV JDVLSDHV .XQWKMFXSXDVVX 7KHREURPD JUDQGLIORUXPf%UD]L? QXW %HUWKROHWLD H[FHOVDf DJURIRUHVWU\ V\VWHP WR HYDOXDWH WKH SRWHQWLDO RI FRPPHUFLDO DJURIRUHVWV WR RIIHU D PRUH VXVWDLQDEOH DOWHUQDWLYH WR RWKHU $PD]RQLDQ ODQGXVHV 7KH UHVHDUFK ZDV FRQGXFWHG LQ $FUH %UD]LO XVLQJ D SDUWLFLSDWRU\ DSSURDFK VR WKDW IDUPHUV ZRXOG EHQHILW IURP ERWK WKH LQYHVWLJDWLYH SURFHVV DQG YLL

PAGE 8

VWXG\ UHVXOWV SHUKDSV HQDEOLQJ WKHP WR PD[LPL]H WKH DJURHFRV\VWHPf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

PAGE 9

&+$37(5 ,1752'8&7,21 7KH 3UREOHP (FRORJLFDO ,QVWDELOLW\ LQ $PD]RQLDQ /DQGXVH 6LQFH WKH ODWH V $PD]RQLDQ GHIRUHVWDWLRQ KDV SURFHHGHG DW DODUPLQJ UDWHV UDLVLQJ ZRUOGZLGH FRQFHUQ EHFDXVH RI LWV SRWHQWLDOO\ QHJDWLYH FRQVHTXHQFHV IRU JOREDO FOLPDWH FKDQJH ELRGLYHUVLW\ K\GURORJ\ DQG ELRJHRFKHPLFDO F\FOHV 6NROH DQG 7XFNHU f $SSUR[LPDWHO\ RQH WKLUG RI IRUHVW FOHDULQJ LQ WKH %UD]LOLDQ $PD]RQ LV XQGHUWDNHQ E\ WKH UHJLRQfV JURZLQJ SRSXODWLRQ RI FRORQLVW IDUPHUV IRU WKH VKLIWLQJ FXOWLYDWLRQ RI DQQXDO FURSV ZKLOH URXJKO\ b RFFXUV DW WKH KDQGV RI ODUJHVFDOH FDWWOH UDQFKHUV IRU SDVWXUH FUHDWLRQ )HDPVLGH 6NROH HW DO 6HUU£R HW DO f *HRORJLFDOO\ WKH *X\DQD DQG %UD]LOLDQ VKLHOGV WKDW GRPLQDWH WKH QRUWKHUQ DQG VRXWKHUQ HQGV RI WKH $PD]RQ %DVLQ DUH WKH ROGHVW DQG PRVW KLJKO\ ZHDWKHUHG VRLOV IRXQG RQ WKH 6RXWK $PHULFDQ FRQWLQHQW 7ROHGR DQG 1DYDV f &RQVHTXHQWO\ DQQXDO FURS SURGXFWLRQ LQ WKH %DVLQnV DFLGLF QXWULHQWSRRU VRLOV SUHGRPLQDWHO\ 2[LVROV DQG 8OWLVROVf LV JHQHUDOO\ OLPLWHG WR WZR \HDUV EHFDXVH QXWULHQW SXOVHV UHOHDVHG E\ EXUQLQJ QDWLYH IRUHVW YHJHWDWLRQ GHFUHDVH UDSLGO\ ZLWK FURS UHPRYDO DQG OHDFKLQJ DIWHU ZKLFK DJULFXOWXUDO ILHOGV DUH DEDQGRQHG WR IDOORZ DQG DGGLWLRQDO IRUHVW ODQG LV FOHDUHG IRU FRQWLQXHG FXOWLYDWLRQ 8KO DQG -RUGDQ (ZHO +OVFKHU HW DO f ,Q DUHDV ZKHUH ORZ SRSXODWLRQ GHQVLWLHV DQG KLJK ODQG DYDLODELOLW\ SHUPLW ORQJ IDOORZ SHULRGV IRU VRLO UHVWRUDWLRQ LH WR \HDUVf VKLIWLQJ FXOWLYDWLRQ FDQ EH SURGXFWLYH KRZHYHU ZKHQ WKH

PAGE 10

IDOORZ LV VKRUWHQHG WKH SUDFWLFH UHVXOWV LQ UDSLG VRLO GHJUDGDWLRQ 1LFKRODLGHV HW DO -XR DQG 0DQX f 6LPLODUO\ SDVWXUH SURGXFWLYLW\ DQG ORQJHYLW\ LQ WKH $PD]RQ DUH OLPLWHG E\ VRLO IHUWLOLW\ DQG GLVUXSWLRQV LQ QXWULHQW F\FOLQJ SURFHVVHV *HQHUDOO\ WKUHH WR ILYH \HDUV IROORZLQJ IRUHVW FRQYHUVLRQ D UDSLG GHFOLQH LQ WKH SURGXFWLYLW\ RI SODQWHG JUDVVHV DVVRFLDWHG ZLWK GHFUHDVHV LQ VRLO QXWULHQW DYDLODELOLW\ SHUPLWV WKH LQYDVLRQ RI KHUEDFHRXV DQG ZRRG\ fZHHGVf WKDW FKDUDFWHUL]H GHJUDGHG DQG VXEVHTXHQWO\ DEDQGRQHG SDVWXUHV 7ROHGR DQG 1DYDV 'LDV)LOKR HW DO ,Q SUHVVf 5HJURZWK LQ ERWK DEDQGRQHG VKLIWLQJ FXOWLYDWLRQ SORWV DQG GHJUDGHG SDVWXUHV RFFXUV DV VXFFHVVLRQ SURFHHGV EXW RIWHQ WKH VSHFLHV FRPSRVLWLRQ RI WKH VHFRQGDU\ YHJHWDWLRQ GLIIHUV IURP WKDW LQ SULPDU\ IRUHVWV DQG VRLO & DQG 1 VWRFNV DV ZHOO DV RWKHU SURSHUWLHV IDYRUDEOH IRU DJULFXOWXUDO SURGXFWLRQ GHFOLQH 1HSVWDG HW DO 7UXPERUH HW DO 0RUDHV HW DO +ROVFKHU HW DO f 0DQDJHG H[WHQVLYHO\ ZLWKRXW WKH XVH RI VRLO DPHQGPHQWV RU JHUPSODVP VXLWHG WR WKH UHJLRQfV SK\VLRJUDSK\ WKHVH WZR SULQFLSDO $PD]RQLDQ ODQGXVHV DUH ODUJHO\ XQVXVWDLQDEOH 7KLV ODFN RI HFRORJLFDO VWDELOLW\ FRPELQHG ZLWK WKH VPDOO HFRQRPLF UHWXUQ SHU XQLW DUHD RI ODQG \LHOGHG E\ WKHVH ODQGXVHV UHVXOWV LQ DFFHOHUDWHG GHIRUHVWDWLRQ KDELWDW IUDJPHQWDWLRQ ORZHUHG DJULFXOWXUDO SURGXFWLRQ IDLOXUH RI VPDOOVFDOH IDUPV DQG JUHDWHU UXUDO SRYHUW\ +HFKW DQG &RFNEXP )HDUQVLGH 6NROH HW DO f 0RUH UHFHQWO\ SHUHQQLDO FURSEDVHG FRPPHUFLDO SODQWDWLRQ DJURIRUHVWU\ V\VWHPV KDYH HPHUJHG DV D SURPLVLQJ $PD]RQLDQ ODQGXVH DOWHUQDWLYH ZLWK WKH SRWHQWLDO WR UHGXFH VRLO GHJUDGDWLRQ LPSURYH OLYLQJ VWDQGDUGV DQG GHFUHDVH SUHVVXUHV RQ UHPDLQLQJ IRUHVWHG DUHDV 6PLWK HW DO f :KHUHDV DQQXDO DQG SHUHQQLDO FURSV KDYH WUDGLWLRQDOO\ EHHQ JURZQ WRJHWKHU LQ PXOWLVWRU\ WUHH JDUGHQV WKH SURGXFWLRQ RI KLJK YDOXH SHUHQQLDO FDVK FURSV LQ

PAGE 11

SODQWDWLRQ DJURIRUHVWV UHSUHVHQWV D UHODWLYHO\ QHZ SUDFWLFH LQ $PD]RQLD 1DLU DQG 0XVFKOHU 6PLWK HW DO f %RWK WKH SRWHQWLDO HFRQRPLF DQG HFRORJLFDO DGYDQWDJHV RI WUHH EDVHG DJURHFRV\VWHPV DULVH LQ SDUW IURP WKHLU ORQJHYLW\ ZKLFK SURPRWHV D PRUH FORVHG F\FOLQJ RI QXWULHQWV WKDW PD\ H[WHQG WKH SURGXFWLYLW\ RI ODQG DOUHDG\ FOHDUHG (ZHO 6PLWK f ,Q SULQFLSOH GHHSURRWHG SHUHQQLDOV LQWHUFHSW FDWLRQV DQG QLWUDWH RWKHUZLVH OHDFKHG IURP WKH VRLO VXUIDFH VWRULQJ DQG F\FOLQJ WKHVH QXWULHQWV LQ OLYLQJ ELRPDVV IDOOHQ OLWWHU DQG GHFD\LQJ ILQH URRWV ZKLOH UHGXFLQJ HURVLRQ ORVVHV E\ SK\VLFDOO\ SURWHFWLQJ WKH VRLO 1DLU
PAGE 12

7KH RULJLQDO V\VWHP FRPSULVHG WKUHH SHUHQQLDO FRPSRQHQWV FXSXDVVX fFXSXDSXf LQ 3RUWXJXHVH 7KHREURPD JUDQGLIORUXPf SHDFK SDOP fSXSXQKDf LQ 3RUWXJXHVH %DFWULV JDVLSDHVf DQG %UD]LO QXW fFDVWDQKDfLQ 3RUWXJXHVH %HUWKROHWLD H[FHOVDf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t 9HQWXULHUL f 0DQ\ VWXGLHV KDYH GHPRQVWUDWHG WKDW PL[HG SHUHQQLDO FURSEDVHG V\VWHPV RIIHU JUHDWHU HFRORJLFDO VWDELOLW\ WKDQ DQQXDO PRQRFXOWXUHV E\ LPSURYLQJ VRLO SURSHUWLHV 1DLU (ZHO HW DO &KDQGHU HW DO f KRZHYHU OLWWOH RQIDUP UHVHDUFK KDV EHHQ FRQGXFWHG WR GHWHUPLQH LI WKHVH V\VWHPV DUH VXVWDLQDEOH LQ $PD]RQLDQ 8OWLVROV DQG 2[LVROV ZLWKRXW WKH XVH RI VRLO DPHQGPHQWV 6]RWW HW DO f )RU WKH PRVW SDUW WKH 5(&$ DJURIRUHVWV DUH ORZ WR QRLQSXW V\VWHPV EHFDXVH PRVW IDUPHUV KDYH OLPLWHG DFFHVV WR FKHPLFDO IHUWLOL]HUV DQG OLWWOH H[SHULHQFH XVLQJ WKH ODUJH LQSXWV RI RUJDQLF UHVLGXHV UHFRPPHQGHG WR PDLQWDLQ VRLO IHUWLOLW\ HJ 1LFKRODLGHV HW DO 6]RWW HW DO f 7KURXJKRXW WKH $PD]RQ %DVLQ LW LV HVWLPDWHG WKDW QLWURJHQ 1f DQG

PAGE 13

SKRVSKRUXV 3f GHILFLHQFLHV OLPLW FURS SURGXFWLRQ LQ b RI WKH UHJLRQnV XSODQG VRLOV 1LFKRODVHV HW DO f 0DLQWDLQLQJ 3 DYDLODELOLW\ WR FURSV SODQWV PD\ SUHVHQW D ODUJHU FKDOOHQJH WR VXVWDLQHG DJURHFRV\VWHP SURGXFWLYLW\ EHFDXVH PXFK RI WKH WRWDO VRLO 3 VWRFN LV JHRFKHPLFDOO\ ERXQG WR LURQ DQG DOXPLQXP R[LGHV LQ IRUPV ODUJHO\ XQDYDLODEOH IRU SODQW XSWDNH 'LDV)LOKR HW DO ,Q SUHVVf ,Q DJURHFRV\VWHPV ZKHUH 1 UHTXLUHPHQWV DUH PHW ZLWK RUJDQLF UHVLGXHV IURP OHJXPLQRXV SODQWV RUJDQLF PDWWHU GHFRPSRVLWLRQ PLQHUDOL]DWLRQ DQG IL[DWLRQ RI1 PD\ EH OLPLWHG E\ VRLO IDXQD DQG EDFWHULD VHQVLWLYLW\ WR 3 GHILFLHQF\ (ZHO &UHZV f )URP ORQJWHUP VWXGLHV RI FRQWLQXRXV FURSSLQJ LQ $PD]RQLD 6DQFKH] HW DO f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f 7KH 5(&$ SURMHFW SURYLGHV D WLPHO\ DQG PXFKQHHGHG FDVH VWXG\ IRU HYDOXDWLQJ WKH SRWHQWLDO IRU ERWK HFRQRPLF DQG HFRORJLFDO VXVWDLQDELOLW\ RI WKHVH FRPPHUFLDOO\KDUYHVWHG WUHHEDVHG DJURHFRV\VWHPV

PAGE 14

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fV 3 DQG 1 UHTXLUHPHQWV DUH Df PHW WKURXJK LQWHUQDO F\FOLQJ Ef WDNHQ XS IURP VRLO VWRFNV DQG F f UHPRYHG ZLWK KDUYHVW ,GHQWLI\ VRFLRHFRQRPLF FKDOOHQJHV WR WKH VXVWDLQDELOLW\ RI 5(&$ DJURIRUHVWU\ V\VWHPV SDUWLFXODUO\ WKRVH WKDW FRQVWUDLQ PRGLILFDWLRQV LQ DJURIRUHVW PDQDJHPHQW SUDFWLFHV WKURXJK LQWHUYLHZV IRFXV JURXSV DQG GLVFXVVLRQV ZLWK 5(&$ IDPLOLHV DQG RWKHU ORFDO 1*2fV DQG UHVHDUFK LQVWLWXWLRQV &RQGXFW WKH UHVHDUFK XVLQJ D SDUWLFLSDWRU\ DSSURDFK WKDW Df HQFRXUDJHV IDUPHUVf LQYROYHPHQW LQ WKH IRUPDWLRQ RI UHVHDUFK REMHFWLYHV GDWD FROOHFWLRQ DQG LQWHUSUHWDWLRQ

PAGE 15

RI UHVXOWV DQG Ef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f RUJDQL]DWLRQ DV ZHOO DV WKH VRFLRn HFRQRPLF EHQHILWV HQMR\HG E\ 5(&$ IDUPHUV DV D UHVXOW RI FRPPXQLW\OHYHO DJURIRUHVWU\ DGRSWLRQ $OWKRXJK 5(&$ LV VRPHZKDW DW\SLFDO IURP PDQ\ SURGXFHUVf JURXSV H J LW KDV UHFHLYHG ODUJH DPRXQWV RI RXWVLGH ILQDQFLDO DVVLVWDQFHf WKH GHFDGHROG SURMHFW GHPRQVWUDWHV PDQ\ RI WKH FRPSOH[ VRFLRHFRQRPLF LVVXHV DVVRFLDWHG ZLWK DJURIRUHVWU\ V\VWHP DGRSWLRQ XQGHUVFRULQJ WKH IDFW WKDW WKH VHDUFK IRU HFRORJLFDO VWDELOLW\ DGGUHVVHV RQO\ KDOI RU PD\EH OHVVf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

PAGE 16

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fV SURGXFWLRQ F\FOH ,Q FKDSWHU VL[ V\VWHPOHYHO 3 DQG 1 G\QDPLFV LQ WKH DJURIRUHVW DUH FRPSDUHG ZLWK WKRVH RI RWKHU $PD]RQLDQ ODQGXVHV LQFOXGLQJ QDWLYH IRUHVWV SDVWXUH DQG VKLIWLQJ FXOWLYDWLRQ 7KH FRQFOXGLQJ FKDSWHU DWWHPSWV WR V\QWKHVL]H LQIRUPDWLRQ RQ DJURIRUHVW 3 DQG 1 G\QDPLFV ZLWKLQ WKH FRQWH[W RI WKH VRFLRHFRQRPLF FRQVWUDLQWV DQG RSSRUWXQLWLHV IDFHG E\ UXUDO KRXVHKROGV LGHQWLILHG E\ UHVHDUFKHU DQG 5(&$ IDUPHUVf WR GHYHORS UHFRPPHQGDWLRQV IRU PDQDJHPHQW WKDW HQKDQFH WKH F\FOLQJ RI RUJDQLF PDWWHU DQG QXWULHQWV WR VXVWDLQ SURGXFWLYLW\ LQ WKLV DQG RWKHU WUHHEDVHG $PD]RQLDQ DJURHFRV\VWHPV

PAGE 17

&+$37(5 7+( 5(&$ 352-(&7 7KH 6HWWOHPHQW RI 1RYD &DOLIRUQLD 7KH VWDWH RI $HU ORFDWHG LQ WKH ZHVWHUQ $PD]RQ %DVLQ RQ WKH ERUGHUV RI %ROLYLD DQG 3HUX LV RQH RI WKH ODVW IURQWLHUV LQ WKH %UD]LOLDQ $PD]RQ *UXSR 3(6$&5( f $Q LPSRUWDQW UXEEHUSURGXFLQJ UHJLRQ SUHYLRXVO\ FRQVLGHUHG SDUW RI %ROLYLD $FUH ZDV DQQH[HG E\ %UD]LO LQ IROORZLQJ D ZDU ZLWK LWV 6RXWK $PHULFDQ QHLJKERU +HFKW DQG &RFNEXP f 7KH HFRQRP\ LQ $HU ZDV WKXV RULJLQDOO\ EDVHG LQ IRUHVW H[WUDFWLRQ DQG LWV LQKDELWDQWV ZHUH SULPDULO\ LQGLJHQRXV SHRSOHV DQG UXEEHU WDSSHUV %UD]LOLDQV EURXJKW IURP RWKHU UHJLRQV LQ WKH FRXQWU\ WR H[WUDFW ODWH[ IURP WUHHV JURZLQJ LQ QDWLYH IRUHVWV .DQGHOO f ,Q WKH V WKH JRYHUQPHQWDO LQVWLWXWLRQ ,1&5$ ,QVWLWXWR 1DFLRQDO GH &RORQL]DGR H 5HIRUPD $JU£ULDf ODXQFKHG D ODUJH FRORQL]DWLRQ SURMHFW UHIHUUHG WR DV WKH 3RORQRUHVWH LQ WKH QHLJKERULQJ VWDWH RI 5RQGQLD 7KH SURMHFW HQFRXUDJHG IDPLOLHV IURP VRXWK DQG VRXWKHVWHP %UD]LO ZKHUH DJULFXOWXUDO PRGHUQL]DWLRQ ZDV GLVSODFLQJ VPDOO IDUPV WR UHVHWWOH LQ WKLV UHODWLYHO\ XQGHYHORSHG UHJLRQ RI ZHVWHUQ $PD]RQLD E\ JLYLQJ WKHP WLWOH WR KD ORWV RI ODUJHO\ XQGLVWXUEHG IRUHVWODQG WR IDUP %URZGHU f ,Q WKH SURFHVV WKH QDWLRQDO KLJKZD\ %5 ZDV SDYHG OLQNLQJ 5RQGQLD DQG ODWHU $HU WR WKH UHVW RI %UD]LO 7KHVH HYHQWV LQLWLDWHG D ZDYH RI PLJUDWLRQ WR 5RQGQLD DQG $HU WKDW FRQVHTXHQWOY OHG WR DFFHOHUDWHG

PAGE 18

GHIRUHVWDWLRQ LQ WKH UHJLRQ DV FRORQLVW IDUPHUV DQG ODUJHVFDOH UDQFKHUV FOHDUHG QDWLYH IRUHVW IRU SDVWXUH DQG VKLIWLQJ FXOWLYDWLRQ +HFKW DQG &RFNEXUQ f 7KH FRORQLVW FRPPXQLW\ RI 1RYD &DOLIRUQLD ZKLFK OLHV RQ WKH ERUGHU RI $HU DQG 5RQGQLD r 6 r:f ZDV RIILFLDOO\ UHFRJQL]HG DV D WRZQ E\ ,1&5$ LQ 3UHYLRXVO\ NQRZQ DV f6DQWD &ODUDf ZKLFK ZDV OLWWOH PRUH WKDQ D JDV VWDWLRQ D UHVWDXUDQW DQG ILYH KRXVHV 1RYD &DOLIRUQLDfV HVWDEOLVKPHQW UHSUHVHQWHG ,1&5$fV RIILFLDO FODLP WR ODQG SUHYLRXVO\ FRQWUROOHG E\ WKH IRUPHU RZQHUV RI WKH UXEEHU HVWDWH VHULQJDOf &DOLIRUQLD 5(&$ XQSXEOLVKHGf 7KH UHJLRQfV SRSXODWLRQ LQFUHDVHG FRQVLGHUDEO\ LQ WKH PLG WR ODWH V DV IDPLOLHV PLJUDWHG IURP WKH VRXWKHUQ %UD]LOLDQ VWDWHV RI 3DUDQD 5LR *UDQGH GR 6XO DQG 6DQWD &DWDULQD PDQ\ RI WKHP VWRSSLQJ LQ 5RQGQLD IRU VHYHUDO \HDUV EHIRUH ILQDOO\ VHWWOLQJ LQ $HU /RFDWHG NP HDVW RI 5LR %UDQFR WKH FDSLWDO RI $HU 1RYD &DOLIRUQLD QRZ SURYLGHV D SROLWLFDO DQG HFRQRPLF EDVH IRU RYHU D WKRXVDQG IDUP IDPLOLHV OLYLQJ RQ XQSDYHG fIHHGHUf URDGV FRQQHFWHG WR WKH %5 $W WKH WLPH RI WKLV VWXG\ VWDWH RZQHUVKLS RI WKH UHJLRQ LQ ZKLFK 1RYD &DOLIRUQLD ZDV ORFDWHG KDG EHHQ GLVSXWHG VLQFH WKH HDUO\ V E\ WKH JRYHUQPHQWV RI $HU DQG 5RQGQLD ERWK RI ZKRP FODLPHG WKH UHJLRQ DV WKHLU RZQ 0RUHLUD f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f 0RVW UHVLGHQWV KDG WR WUDYHO

PAGE 19

VHYHUDO KRXUV RQ DQ XQSDYHG URDG WR 5LR %UDQFR IRU HYHQ PLQRU PHGLFDO FDUH 0DODULD LQ SDUWLFXODU ZDV D PHGLFDO SUREOHP WKDW SODJXHG UHVLGHQWV DOWKRXJK WKLV LV QRZ WUHDWHG DW D FRPPXQLW\ KHDOWK SRVW 3(6$&5( DQG *(1(6<6 XQSXEOLVKHGf 6FKRROV RQ IHHGHU URDGV FRQWLQXHG RQO\ WR WKH IRXUWK JUDGH DQG IDPLOLHV KDG WR VHQG WKHLU FKLOGUHQ WR 5LR %UDQFR WR DWWHQG KLJK VFKRRO &DPSEHOO f 'XULQJ WKH UDLQ\ VHDVRQ PDQ\ IDPLOLHV ZHUH IRUFHG WR ZDON XS WR NP WR UHDFK WKH %5 EHFDXVH WKH PXG PDGH WKH XQSDYHG IHHGHU URDGV LPSDVVDEOH E\ FDU ELNH DQG KRUVHV %HFDXVH 1RYD &DOLIRUQLD ZDV QHYHU OLQNHG WR D XWLOLW\ JULG DW WKH WLPH RI WKLV VWXG\ HOHFWULFLW\ ZDV SURYLGHG WR UHVLGHQWV LQ WRZQ E\ D VPDOO XQUHOLDEOH JHQHUDWRU WKDW ZDV RSHUDWHG RQO\ LQ WKH HYHQLQJ IURP VL[ WR WZHOYH 30 )DPLOLHV ZHUH UHVSRQVLEOH IRU GLJJLQJ WKHLU RZQ ZHOOV DQG fUXQQLQJf ZDWHU ZDV DFTXLUHG E\ SXPSLQJ ZHOO ZDWHU XVLQJ D GLHVHO RU HOHFWULF SXPSf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f VXFFXPEHG WR ZLWFKHVf EURRP &ULQLSLV SHUQLFLRVD 6WDKHOf 6LQJHUf DQG SRRU DFFHVV WR KLJKO\ FRPSHWLWLYH PDUNHWV LPSHGHG IDUPHUV IURP VHOOLQJ FRIIHH &RIIHD DUDELFDf 5(&$ XQSXEOLVKHGf 0RUHRYHU PRVW IDPLOLHV ZHUH XQDFFXVWRPHG WR IDUPLQJ LQ WKH QXWULHQWSRRU VRLOV XQGHUO\LQJ QDWLYH $PD]RQLDQ IRUHVW

PAGE 20

0DQ\ IDFHG H[WUHPH KDUGVKLS ZKHQ WKHLU VKLIWLQJ FXOWLYDWLRQ SORWV RI ULFH EHDQV DQG PDL]H IDLOHG WR SURGXFH DGHTXDWH KDUYHVWV GXULQJ WKH VHFRQG RU WKLUG \HDU IROORZLQJ IRUHVW FOHDULQJ $V D UHVXOW PDQ\ IDPLOLHV ZHUH IRUFHG WR DEDQGRQ WKHLU IDUPV DQG UHVHWWOH LQ RWKHU UHJLRQV RU UHWXUQ WR VRXWKHUQ %UD]LO $OWKRXJK %UD]LOLDQ ODZ REOLJHV IDUPHUV WR PDLQWDLQ b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f &RQVHTXHQWO\ PDQ\ RI WKHVH YDVW GHJUDGHG SDVWXUHV KDYH DOVR VLQFH EHHQ DEDQGRQHG 3URLHWR 5(&$ ,Q UHVSRQVH WR WKH HFRQRPLF FULVLV VXIIHUHG E\ WKH UHJLRQfV IDPLOLHV WKH 5(&$ SURMHFW 3URMHWR GH 5HIORUHVWDPHQWR &RQVRUFLDGR H $GHQVDGRf ZDV LQLWLDWHG E\ D JURXS RI IDQQHUV LQ )DWLJXHG ZLWK WKH HQRUPRXV ODERU DQG ULVN DVVRFLDWHG ZLWK WKH VKLIWLQJ FXOWLYDWLRQ RI DQQXDO FURSV WKHVH IDUPHUV EHJDQ WR H[SHULPHQW ZLWK SODQWV QDWLYH WR $PD]RQLD DQG LQ SDUWLFXODU WUHH FURSV 2QH RI WKH JURXSfV OHDGHUV 6HUJLR /RSHV D XQLYHUVLW\WUDLQHG WHDFKHU IURP 6DQWD &DWDULQD ZDV DOVR FRQFHUQHG DERXW WKH HFRORJLFDO LPSDFW RI GHIRUHVWDWLRQ DVVRFLDWHG ZLWK VKLIWLQJ FXOWLYDWLRQ DQG IDUP DEDQGRQPHQW :LWK DVVLVWDQFH IURP WKH &DWKROLF 'LRFHVH RI 5LR %UDQFR WKH )HGHUDO 8QLYHUVLW\ RI $HU 8)$&f DQG WKH ,QVWLWXWH RI $PD]RQLDQ 5HVHDUFK ,13$f WKH SURGXFHUVf JURXS VXEPLWWHG D SURMHFW SURSRVDO WR YDULRXV

PAGE 21

(XURSHDQ SKLODQWKURSLF RUJDQL]DWLRQV 7KH REMHFWLYH RI WKH 5(&$fV SURSRVHG SURMHFW ZDV WR LQFUHDVH WKH HFRQRPLF ZHOOEHLQJ RI FRORQLVW IDUPHUV WKURXJK WKH SURGXFWLRQ RI KLJKYDOXH SHUHQQLDO FURSV %HFDXVH WKH WUHH FURSV SURSRVHG ZHUH QDWLYH WR $PD]RQLD LW ZDV DOVR UHDVRQHG WKDW WKH\ ZHUH EHWWHU DGDSWHG WR WKH UHJLRQfV ZHDWKHUHG IRUHVW VRLOV DQG QDWXUDO SHVWV DQG WKXV PRUH OLNHO\ WR SHUVLVW DQG VXVWDLQ SURGXFWLYLW\ LQ WKHVH FRQGLWLRQV 7KXV E\ RIIHULQJ D PRUH HFRORJLFDOO\ VXVWDLQDEOH DOWHUQDWLYH WR VKLIWLQJ FXOWLYDWLRQ WKHVH V\VWHPV FRXOG GHFUHDVH ODQG DEDQGRQPHQW DQG GHIRUHVWDWLRQ DVVRFLDWHG ZLWK VPDOOVFDOH SURGXFWLRQ ,Q WKH SURMHFW DFTXLUHG IXQGLQJ PLOOLRQ 86'f IURP &DWKROLF RUJDQL]DWLRQV LQ WKH 1HWKHUODQGV &(%(02f DQG )UDQFH &&)'f WR LQLWLWLDWH WKH HVWDEOLVKPHQW RI D PXOWLn VSHFLHV SHUHQQLDO FURSEDVHG FRPPHUFLDO SODQWDWLRQ DJURIRUHVW RQ RYHU IDUPV 0DUWLQHOOR 6PLWK HW DO f 7KH ILUVW DJURIRUHVWU\ V\VWHP HVWDEOLVKHG E\ WKH 5(&$ SURMHFW LQ DQG GHVFULEHG IXOO\ EHORZf ZDV FRPSULVHG RI WKUHH SHUHQQLDO VSHFLHV QDWLYH WR $PD]RQLD DQG SDUWLFLSDQWV ZHUH UHTXLUHG WR SODQW WKH FRPSRQHQWV LQ D VSHFLILF FRQILJXUDWLRQ RI VSHFLHV DQG VSDFLQJ GHVLJQHG E\ WKH 5(&$ RUJDQL]DWLRQ 0RQHWDU\ LQFHQWLYH ZDV DQ LPSRUWDQW IDFWRU DWWUDFWLQJ IDPLOLHV WR SDUWLFLSDWH LQ WKH 5(&$ SURMHFW )RU HYHU\ KHFWDUH RI FRPPHUFLDO SODQWDWLRQ DJURIRUHVW SODQWHG SDUWLFLSDWLQJ IDPLOLHV UHFHLYHG DSSUR[LPDWHO\ 86'f RYHU D WKUHH \HDU SHULRG IURP 5(&$ WR KHOS RIIVHW H[SHQVHV LQFXUUHG GXULQJ SODQWDWLRQ HVWDEOLVKPHQW DQG WR KHOS VXVWDLQ KRXVHKROGV GXULQJ WKH LQLWLDO \HDUV UHTXLUHG EHIRUH WKH SHUHQQLDO V\VWHP EHJDQ \LHOGLQJ IUXLW 0RUHLUD f ,Q UHWXUQ WKH SDUWLFLSDWLQJ IDPLOLHV ZHUH REOLJHG WR JLYH D SURSRUWLRQ RI HDFK KDUYHVW EHJLQQLQJ ZLWK WKH IRXUWK \HDU WR WKH 5(&$ RUJDQL]DWLRQ IRU \HDUV DIWHU SODQWDWLRQ HVWDEOLVKPHQW 7KH SURSRUWLRQ RI KDUYHVW LQFUHDVHG IURP b GXULQJ WKH IRXWK DQG ILIWK \HDUV WR b E\

PAGE 22

\HDU WHQ DQG WKH SURFHHGV IURP WKH VDOH RI SURGXFWV ZHUH XVHG WR VXSSRUW DGPLQLVWUDWLYH DQG RSHUDWLQJ FRVWV RI WKH 5(&$ SURMHFW 6HUYLFHV SURYLGHG E\ WKH RUJDQL]DWLRQ LQFOXGHG WKH WUDQVSRUWDWLRQ RI UDZ SURGXFWV IURP IDUPV RQ IHHGHU URDGV WR D VPDOO IDFWRU\ ORFDWHG LQ 1RYD &DOLIRUQLD ZKHUH WKH SXOS RI FXSXDVVX IUXLW ZDV SURFHVVHG DQG VWRUHG IUR]HQ DQG ODWHU WUDQVSRUWHG WR XUEDQ FHQWHUV VXFK DV 5LR %UDQFR IRU VDOH )DUPHUV ZHUH UHVSRQVLEOH IRU WUDQVSRUWLQJ DQG PDUNHWLQJ SHDFK SDOP IUXLW WKHPVHOYHV DQG EHFDXVH WKH IUXLW LV VR KLJKO\ SHULVKDEOH PDQ\ IDUPHUV VLPSO\ VROG WKH SDOP VHHG WR EX\HUV LQWHUHVWHG LQ HVWDEOLVKLQJ KHDUW RISDOP SODQWDWLRQV 0RUH UHFHQWO\ WKH RUJDQL]DWLRQ UHFHLYHG ILQDQFLDO DVVLVWDQFH IURP DQRWKHU QRQJRYHUQPHQWDO RUJDQL]DWLRQ 1*2f WR EXLOG D FDQQLQJ IDFWRU\ IRU SDOP KHDUW DQG DQ DXGLWRULXPGRUPLWRU\ LQ ZKLFK UHJLRQDO PHHWLQJV ZLWK RWKHU SURGXFHU RUJDQL]DWLRQV DUH KHOG ,Q DGGLWLRQ 5(&$fV UROH LQ WKH FRPPXQLW\ KDV QRW EHHQ FRQILQHG HQWLUHO\ WR DJULFXOWXUDO SURGXFWLRQ 1XQV RI WKH &DWKROLF FKXUFK ZKR UXQ D KRPHRSDWKLF SKDUPDF\ LQ 1RYD &DOLIRUQLD UHJXODULO\ WUDLQ 5(&$ KHDOWK DJHQWV LQ EDVLF ILUVW DLG DQG PHGLFLQDO SODQW XVH &DPSEHOO f 6R ZKLOH 5(&$ VWDUWHG RXW ZLWK D FRPPXQLW\EDVHG DJURIRUHVWU\ SURMHFW WKH RUJDQL]DWLRQ KDV HYROYHG WR UHSUHVHQW DQG DGGUHVV WKH VRFLDO DQG HFRQRPLF QHHGV RI WKH SHRSOH LQ DQG DURXQG 1RYD &DOLIRUQLD DQG IRU EHWWHU RU ZRUVH WKH RUJDQL]DWLRQ KDV EHFRPH TXLWH SROLWLFL]HG 3DUWLFLSDWLQJ IDUPHUV HQWHUHG 5(&$ WKURXJK UHJLRQDOO\EDVHG JURXSV XVXDOO\ GHILQHG E\ WKH IHHGHU URDG WKH SURGXFHUV OLYHG RQ $W WKH WLPH RI WKLV VWXG\ WKHUH ZHUH D WRWDO RI JURXSV HDFK OHG E\ DQ LQGLYLGXDO ZKR DFWHG DV D OLDLVRQ EHWZHHQ WKH UHJLRQDO JURXS DQG WKH 5(&$ RUJDQL]DWLRQ E\ UHSUHVHQWLQJ WKH JURXS DW PRQWKO\ 5(&$ FRRUGLQDWRUVf PHHWLQJV ,Q HDFK JURXS WKHUH ZDV DOVR D fWFQLFRf D IDUPHU SURYLGHG ZLWK WHFKQLFDO WUDLQLQJ VSRQVRUHG

PAGE 23

E\ 5(&$ ZKRVH UROH ZDV WR DVVLVW PHPEHUV ZLWK SURGXFWLRQ UHODWHG SUREOHPV DQG LQWURGXFH QHZ VSHFLHV WR SLDQW VXFK DV OHJXPLQRXV FRYHU FURSV RU QDWLYH WLPEHU WUHHV IRU QHZ SODQWDWLRQV $W OHDVW IRXU RI WKH ILIWHHQ JURXSV ZHUH OHG E\ ZRPHQ DOWKRXJK &DPSEHOO f QRWHV WKDW GHVSLWH WKH SURMHFWfV VHHPLQJO\ GHPRFUDWLF RUJDQL]DWLRQ ZRPHQf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f RIIHUHG ZHHN ORQJ HQYLURQPHQWDO HGXFDWLRQ FRXUVHV WR 5(&$ IDUPHUV DQG 5(&$ KDV IRUPHG SDUWQHUVKLSV ZLWK H[WHQVLRQ DQG UHVHDUFK RUJDQL]DWLRQV VXFK DV 3(6$&5( *UXSR GH 3HVTXLVD H ([WHQVDR HP 6LVWHPDV $JURIORUHVWDLV GR $HUf DQG (0%5$3$ (PSUHVD %UDVLOHLUD GH 3HVTXLVD $JURSHFX£ULDf $JURIRUHVW (VWDEOLVKPHQW 7KH VSHFLILF DJURIRUHVWU\ FRQILJXUDWLRQ XQGHU VWXG\ ZDV SODQWHG RQ RYHU IDUPV RQ DSSUR[LPDWHO\ KD LQ DQG /HLWH XQSXEOLVKHGf 7KH V\VWHP LV WZRWLHUHG GRPLQDWHG E\ DQ XSSHU FDQRS\ RI SHDFK SDOP %DFOULV JDVLSDHV .XQWKf DQG %UD]LO QXW %HUWKROOHWLD H[FHOVD +XPE t %RQSOf ZLWK D PLGGOH FDQRS\ IRUPHG E\ FXSXDVVX 7KHREURPD JUDQGLIORQLP :LOOGHQRZ H[ 6SUHQJHOf 6FKXPDQQf 7KH DJURIRUHVWfV SULQFLSDO

PAGE 24

SURGXFWV LQFOXGH FXSXDVVX SXOS SHDFK SDOP IUXLW DQG VHHG DQG KHDUWRISDOP DOO RI ZKLFK DUH FRQVXPHG GRPHVWLFDOO\ DV ZHOO DV PDUNHWHG UHJLRQDOO\ 7\SLFDOO\ WKHVH DJURIRUHVWV ZHUH HVWDEOLVKHG E\ FXWWLQJ DQG EXUQLQJ QDWLYH IRUHVW YHJHWDWLRQ DQG LQWHUSODQWLQJ RQH\HDUROG SHDFK SDOP DQG FXSXDVVX VHHGOLQJV LQ URZV DW D VSDFLQJ RI [ P 6RPH DJURIRUHVWU\ V\VWHPV ZHUH DOVR SODQWHG RQ ROG IDOORZ ILHOGV FDSRHLUDf ,Q HYHU\ WKLUG URZ %UD]LO QXW ZDV SODQWHG DOWHUQDWHO\ ZLWK FXSXDVVX WR FRPSOHWH D VWRFNLQJ GHQVLW\ RI DSSUR[LPDWHO\ WUHHV KDn WKH PDMRULW\ RI ZKLFK DUH FXSXDVVX DQG SHDFK SDOP DQG WUHHV KDn UHVSHFWLYHO\f 7KH VHHGOLQJV ZHUH UDLVHG RQ IDUP IURP VHHGV FROOHFWHG IURP PDUNHWHG IUXLW DQG VXUURXQGLQJ IRUHVW WKXV WKHUH H[LVWV FRQVLGHUDEOH JHQHWLF KHWHURJHQHLW\ ZLWKLQ HDFK RI WKH DJURIRUHVWVf WKUHH SHUHQQLDO FRPSRQHQWV $W WKH WLPH RI HVWDEOLVKPHQW HQRXJK IDUP\DUG PDQXUH WR ILOO D fPLON FDQf DSSUR[LPDWHO\ PO HTXDO WR DERXW DQG NJ KDn 1 DQG 3 UHVSHFWLYHO\f ZDV DGGHG WR HDFK VHHGOLQJfV SODQWLQJ KROH 'XULQJ WKH ILUVW \HDU DQQXDO FURSV PDL]H EHDQV ULFH RU FDVVDYDf ZHUH FXOWLYDWHG EHWZHHQ WKH DJURIRUHVW URZV WR RIIVHW WKH LQLWLDO H[SHQVH RI HVWDEOLVKLQJ WKH SHUHQQLDO V\VWHP :DOODFH f 7KHUHDIWHU XQGHUVWRU\ UHJURZWK RI QDWLYH YHJHWDWLRQ ZDV FXW WZLFH DQQXDOO\ DQG OHIW WR GHFRPSRVH RQ WKH DJURIRUHVW IORRU ,Q VRPH V\VWHPV OHJXPLQRXV FRYHU FURSV 0DFXQD FRFKLFKLQHQVLV DQG 3XHUDULD SKDVHRORLGHVf ZHUH SODQWHG LQ DJURIRUHVW URZV IRU QLWURJHQ IL[DWLRQ DQG ZHHG FRQWURO +RZHYHU GXH WR WKH LQFUHDVHG ULVN RI ILUH KD]DUG DQG WKH IDFW WKDW WKH YLQHV EHJDQ JURZLQJ RYHU WKH WRS RI WKH WUHH FDQRSLHV WKH OHJXPHV ZHUH HUDGLFDWHG IURP WKH DJURIRUHVWV WKUHH \HDUV DIWHU HVWDEOLVKPHQW 6LQFH HVWDEOLVKPHQW JUD]LQJ OLYHVWRFN ZHUH H[FOXGHG IURP WKH DJURIRUHVW DQG QR RWKHU DPHQGPHQWV RI DQ\ NLQG ZHUH DSSOLHG WR WKH V\VWHP

PAGE 25

$JURIRUHVW 7UHH 6SHFLHV 3HDFK 3DOP 7KH RULJLQ RI SHDFK SDOP %DFWULV JDVLSDHV .XQWK 3DOPDHf LV VRPHZKDW FRQWURYHUVLDO +LVWRULFDOO\ SHDFK SDOP RU fSXSXQKDf LQ 3RUWXJXHVH ZDV JURZQ WKURXJKRXW WURSLFDO $PHULFD E\ PDQ\ SUH&RORPELDQ $PHULQGLDQ FRPPXQLWLHV IRU IRRG ILEHU DQG PHGLFLQH &OHPHQW f FLWHV WKH JUHDW JHQHWLF GLYHUVLW\ LQ SHDFK SDOP SRSXODWLRQV RI ZHVWHUQ $PD]RQLD DV HYLGHQFH WKDW WKH VSHFLHV RULJLQDWHG LQ WKLV UHJLRQ DOWKRXJK 0RUD 8USL f VXJJHVWV WKDW PXOWLSOH GRPHVWLFDWLRQ HYHQWV PD\ KDYH WDNHQ SODFH $W SUHVHQW WZR SURGXFWV DUH KDUYHVWHG IURP SHDFK SDOP JURZQ LQ PXOWLVSHFLHV FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV DQ HQHUJ\ DQG QXWULHQWULFK IUXLW WKDW LV FRQVXPHG ORFDOO\ DQG WKH WHQGHU XQH[SDQGHG OHDYHV SURGXFHG E\ WKH DSLFDO PHULVWHP RI \RXQJ RIIVKRRWV UHIHUUHG WR DV SDOP KHDUW 7KH ODWWHU SURGXFW LV SRWHQWLDOO\ PRUH OXFUDWLYH DV LW FDQ EH VROG ERWK WKURXJKRXW %UD]LO DQG DEURDG DV D KLJKSULFHG GHOLFDF\ 3HDFK SDOP LV PXOWLVWHPPHG SURGXFLQJ DV PDQ\ DV RIIVKRRWV WKDW DULVH IURP D[LOODU\ EXGV HQFLUFOLQJ WKH PDLQ VWHP 7KLV IHDWXUH LQ SDUWLFXODU KDV PDGH LW YHU\ SRSXODU IRU fVXVWDLQDEOHf SDOP KHDUW SURGXFWLRQ EHFDXVH XQOLNH VLQJOHVWHPPHG SDOPV IURP ZKLFK SDOP KHDUW LV DOVR KDUYHVWHG (XWHUSH VSSf SHDFK SDOP RIIVKRRWV FDQ EH UHPRYHG ZLWKRXW NLOOLQJ WKH ZKROH SODQW 6WHPV RI SHDFK SDOP PD\ DWWDLQ XS WR PHWHUV LQ KHLJKW EXW WKH VSHFLHVn UHODWLYHO\ VPDOO FURZQ W\SLFDOO\ FRPSRVHG RI WR SLQQDWH OHDYHV $UNFROO 0RUD8USL HW DO f PLQLPL]HV VKDGLQJ RI RWKHU DJURIRUHVW FRPSRQHQWV $Q XQGHVLUDEOH FKDUDFWHULVWLF RI WKH SDOP LV WKDW VWHP LQWHPRGHV DUH IUHTXHQWO\ FRYHUHG ZLWK ORQJ VSLQHV ZKLFK SUHVHQW D KD]DUG WR OLYHVWRFN DQG FRPSOLFDWH IUXLW KDUYHVW IRU IDUPHUV 3HDFK SDOP URRW JURZWK LV JHQHUDOO\ FRQFHQWUDWHG

PAGE 26

LQ WKH WRS FP RI VRLO DOWKRXJK D VXSHUILFLDO PDW RI DGYHQWLWLRXV URRWV RIWHQ GHYHORSV DW WKH VWHP EDVH DQG PD\ H[WHQG XS WR ILYH PHWHUV IURP WKH WUXQN )HUUHLUD HW DO f $V OHDYHV DQG IUXLW DEVFLVH IURP SDOP VWHPV GHFRPSRVLQJ RUJDQLF PDWWHU IURP IDOOHQ OLWWHU DFFXPXODWHV LQ WKH URRW PDW 9DQGHUPHHU f VWDWHV WKDW DSSUR[LPDWHO\ b RI SHDFK SDOP URRWV DUH ORFDWHG ZLWKLQ WKH SHULPHWHU RI WKH FDQRS\ EXW )HUUHLUD HW DO f REVHUYHG DEVRUSWLYH URRWV H[WHQGLQJ XS WR QLQH PHWHUV IURP WKH VWHP EDVH 7KH SDOP LV UHODWLYHO\ SURGXFWLYH LQ ZHOOGUDLQHG 2[LVROV DQG 8OWLVRLV WROHUDWLQJ XS WR b DOXPLQXP VDWXUDWLRQ DOWKRXJK VWXGLHV KDYH VKRZQ WKDW QXWULHQW DGGLWLRQV DUH QHFHVVDU\ WR VXVWDLQ ORQJWHUP SURGXFWLYLW\ 0RUD 8USL HW DO f %HFDXVH 3 LV JHQHUDOO\ OLPLWLQJ LQ WURSLFDO VRLOV VRPH ZRUN KDV EHHQ FRQGXFWHG WR GHWHUPLQH WKH LPSRUWDQFH RI 3 DYDLODELOLW\ DQG P\FRUUKL]DO DVVRFLDWLRQV WR SHDFK SDOP GHYHORSPHQW DQG SURGXFWLYLW\ 6W -RKQ &OHPHQW DQG +DEWH f )RU H[DPSOH +DEWH DQG &OHPHQW f GHPRQVWUDWHG WKDW 3 IHUWLOL]DWLRQ JUHDWO\ LQFUHDVHG VHHGOLQJ OHDI JURZWK ELRPDVV LQFUHPHQW DQG RYHUDOO YLJRU DQG 5XL] f IRXQG WKDW SHDFK SDOP LQIHFWLRQ ZLWK YHVFLEXODUDUEXVFXODU P\FRUUKL]DH ZDV QHJDWLYHO\ FRUUHODWHG ZLWK VRLO 3 FRQFHQWUDWLRQV )ORZHULQJ LQ SHDFK SDOP EHJLQV EHWZHHQ WKH DJHV RI DQG DQG WKH SDOP PD\ SURGXFH DQQXDO FURSV IRU XS WR \HDUV DOWKRXJK HVWLPDWHV IRU IUXLW SURGXFWLRQ LQ QXWULHQW SRRU $PD]RQLDQ VRLOV DUH PXFK ORZHU LH WR \HDUV &OHPHQW SHUVFRPPf 7KH RLO\ IUXLW SURGXFHG E\ WKH SDOP LV KLJKO\ SHULVKDEOH DQG WKXV GLIILFXOW WR WUDQVSRUW IUHVK WR PDUNHWV $ EHWDFDURWHQHULFK IORXU LV PDGH IURP GULHG IUXLW HPSOR\LQJ WKH VDPH RQIDUP SURFHVVLQJ WHFKQLTXH XVHG IRU WKH IDEULFDWLRQ RI FDVVDYD IORXU D WUDGLWLRQDO VWDSOH LQ $PD]RQLDQ KRXVHKROGV 'LEDUL SHUV FRPPf 7KH IUXLW LV DOVR XVHG IRU DQLPDO IHHG DQG 5(&$ IDUPHUV

PAGE 27

KDYH IRXQG LW OXFUDWLYH WR VHOO SHDFK SDOP VHHG WR EX\HUV LQWHUHVWHG LQ HVWDEOLVKLQJ KHDUWRI SDOP SODQWDWLRQV &OHPHQW f QRWHV WKDW FRPPHUFLDO SURGXFWLRQ RI IUXLW DQG KHDUWRI SDOP LQ WKH VDPH V\VWHP LV QRW SUDFWLFDO EHFDXVH WKH ODWWHU UHTXLUHV KLJK GHQVLW\ SODQWV KDnf PRQRVSHFLILF SODQWDWLRQV WR EH HFRQRPLFDOO\ YLDEOH &XSXDVVX 7KHREURPD JUDQGLIORUXP :LOOGHQRZ H[ 6SUHQJHOf 6FKXPDQQ 6WHUFXOLDFHDH LV RQH RI QLQH VSHFLHV LQ WKH VDPH JHQXV QDWLYH WR WKH %UD]LOLDQ $PD]RQ &XSXDVVX fFXSXDTXff LQ 3RUWXJXHVHf RFFXUV QDWXUDOO\ LQ IRUHVWV RI WKH HDVWHUQ %UD]LOLDQ VWDWHV RI 3DU£ DQG 0DUDQKDR EXW LWV GLVWULEXWLRQ KDV VSUHDG DFURVV WKH $PD]RQ %DVLQ &DEUDO 9HOKR HW DO 9HQWXULHUL f /LNH LWV UHODWLYH FDFDR ^7KHREURPD FDFDRf LW LV D EURDGOHDI PHVLF VSHFLHV WKDW JURZV QDWXUDOO\ LQ WKH XQGHUVWRU\ RI WHUUD ILUPH IRUHVWV WROHUDWLQJ ERWK VKDGH DQG QXWULHQWSRRU VRLOV 7KH VSHFLHVf JURZWK KDELW LV SVHXGR DSLFDO UHVXOWLQJ LQ D UHODWLYHO\ VPDOOVWDWXUHG WR P KHLJKWf WUHH ZLWK D SODJLRWURSLF FDQRS\ SURMHFWLQJ RXWZDUG XS WR HLJKW PHWHUV IURP WKH WUXQN 5LEHLUR 9HQWXUHLUL f &XSXDVVX LV JHQHUDOO\ SHVWUHVLVWDQW DOWKRXJK OLNH FDFDR LW LV VXVFHSWLEOH WR ZLWFKHVf EURRP &ULQLSLV SHUQLFLRVDf 7KH ODUJH WR FP OHQJWK WR FP GLDPHWHUf ZRRG\ HOOLSWLFDO IUXLW SRGV ORFXOLFLGDO FDSVXOHVf SURGXFHG E\ FXSXDVVX DUH KDUYHVWHG IRU WKH IUDJUDQW FUHDP\ SXOS ZKLFK LV XVHG LQ GHVVHUWV FDQGLHV DQG GULQNV WKURXJKRXW %UD]LO &DEUDO 9HOKR HW DO f 0RUH UHFHQWO\ PHWKRGV KDYH EHHQ GHYHORSHG WR XVH IHUPHQWHG FXSXDVVX VHHGV PXFK LQ WKH VDPH PDQQHU WKDW FRFRD EHDQV DUH SURFHVVHG IRU FKRFRODWH WR PDNH D FRQIHFWLRQ NQRZQ DV fFXSXODWHf 5LEHLUR GH 1D]DU HW DO :DOODFH f &XSXDVVX W\SLFDOO\ IORZHUV DW WKH HQG RI WKH GU\ VHDVRQ ZLWK PD[LPXP IUXLW SURGXFWLRQ RFFXUULQJ GXULQJ WKH PLG WR ODWH UDLQ\

PAGE 28

VHDVRQ 7KH VSHFLHV LV NQRZQ IRU LWV ORZ IHFXQGLW\ 9HQWXUHLUL f IRXQG WKDW IORZHUV SHU WUHH ZHUH QHFHVVDU\ WR SURGXFH IUXLW 7UHHV EHJLQ EHDULQJ IUXLW DV HDUO\ DV WKUHH \HDUV RI DJH DQG E\ \HDU VL[ RU VHYHQ DQ DYHUDJH WUHH SURGXFHV EHWZHHQ DQG IUXLWV SHU VHDVRQ 3HDN IUXLW SURGXFWLRQ UHSRUWHG WR EH DV JUHDW DV IUXLWV SHU WUHH SHU \HDU RFFXUV EHWZHHQ DJHV DQG EXW WUHHV FDQ FRQWLQXH WR EHDU IUXLW IRU XS WR \HDUV 5LEHLUR f 7KH DXWKRU KDV VHHQ \HDUROG SURGXFWLYH FXSXDVVX WUHHV JURZLQJ LQ PHVLF KDELWDWV RQ KRPHVWHDGV LQ HDVWHUQ $PD]RQD 7R PDLQWDLQ SODQWDWLRQ SURGXFWLYLW\ &DO]DYDUD f UHFRPPHQGV D \HDUO\ DSSOLFDWLRQ RI J IHUWLOL]HU b DPPRQLXP VXOIDWH b VXSHUSKRVSKDWH b SRWDVVLXP FKORUDWHf SHU WUHH EURDGFDVW RQ WKH VRLO VXUIDFH MXVW EHQHDWK WKH FDQRS\fV GULS OLQH %UD]LO 1XW $ UDUH XSSHU FDQRS\ HPHUJHQW LQ $PD]RQLDQ WHUUD ILUPH IRUHVWV %UD]LO QXW RU fFDVWDQKDf LQ 3RUWXJXHVH %HUWKROOHWLD H[FHOVD +XPE t %RQSL /HF\WKLGDFHDHf WUHHV PD\ DWWDLQ KHLJKWV RI PHWHUV 0RUL DQG 3UDQFH f $ PDWXUH WUHH KDV D VWUDLJKW UHODWLYHO\ XQEUDQFKHG EROH DQG VPDOO FURZQ ZKLFK PDNHV LW D IDYRUDEOH XSSHU VWRU\ DJURIRUHVW FRPSRQHQW 7DSURRW H[WHQVLRQ RI %UD]LO QXW WUHHV JURZLQJ LQ IRUHVWV DQG SDVWXUH LQ HDVWHUQ $PD]RQD KDV EHHQ REVHUYHG WR PHWHUV LQWR WKH VRLO 1HSVWDGW HW DO f :KLOH WKH WUHH JURZV QDWXUDOO\ LQ WKH ZHOOGUDLQHG QXWULHQWSRRU VRLOV XQGHUO\LQJ QDWLYH IRUHVW YHJHWDWLRQ .DLQHU HW DO f IRXQG WKDW %UD]LO QXW VHHGOLQJV SODQWHG LQ VKLIWLQJ FXOWLYDWLRQ SORWV ZKHUH OLJKW DQG QXWULHQW DYDLODELOLW\ ZHUH JUHDWHU JUHZ PRUH YLJRURXVO\ DQG KDG KLJKHU IROLDU QXWULHQW FRQWHQWV WKDQ WKRVH SODQWHG LQ IRUHVW JDSV

PAGE 29

0RVW %UD]LO QXWV DUH FROOHFWHG IURP ZLOG WUHHV JURZLQJ LQ IRUHVWV KRZHYHU WKH VSHFLHV KDV PRUH UHFHQWO\ EHFRPH D FRPSRQHQW RI PRQRVSHFLILF SODQWDWLRQV DQG PXOWLVSHFLHV DJURIRUHVWV LQ $PD]RQLD $OWKRXJK LW PD\ WDNH \HDUV IRU IRUHVW WUHHV WR UHDFK PD[LPXP SURGXFWLRQ HVWLPDWHG WR EH VHYHUDO KXQGUHG IUXLW SHU WUHH SHU \HDUf WUHHV JURZQ LQ PRUH LQWHQVLYHO\PDQDJHG SODQWDWLRQV PD\ EHJLQ EHDULQJ IUXLW ZLWKLQ HLJKW \HDUV DIWHU HVWDEOLVKPHQW 0RUL DQG 3UDQFH f ,Q DGGLWLRQ WR EHLQJ D IRRG VWDSOH IRU IRUHVW GZHOOLQJ FRPPXQLWLHV %UD]LO QXWV KDYH EHFRPH DQ LPSRUWDQW $PD]RQLDQ FDVK FURS ERWK VROG IRU GRPHVWLF FRQVXPSWLRQ DQG H[SRQHG DEURDG .DLQHU HW DO f 'HVSLWH LWV HFRQRPLF SRWHQWLDO %UD]LO QXW ZDV W\SLFDOO\ D PLQRU FRPSRQHQW LQ WKH FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV H[DPLQHG LQ WKLV VWXG\ &KDOOHQJHV )DFLQJ 5(&$ 6LQFH LWV HVWDEOLVKPHQW 5(&$fV SHDFK SDOPFXSXDVVX%UD]LO QXW DJURIRUHVWU\ V\VWHP KDV EHHQ KLJKO\ SURGXFWLYH 7KH WRWDO KDUYHVW RI FXSXDVVX IUXLW IURP 5(&$ DJURIRUHVWV ZDV UHSRUWHG WR EH WRQV LQ DQG WRQV LQ /HLWH XQSXEOLVKHGf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fV LQLWLDO VXFFHVV KDV HDUQHG

PAGE 30

DWWHQWLRQ UHFRJQLWLRQ DQG UHVSHFW IRU WKH SURGXFHUV JURXS IURP ORFDO UHVHDUFK DQG H[WHQVLRQ LQVWLWXWLRQV ZKR DUH HDJHU WR LQLWLDWH RQIDUP VWXGLHV ZLWK WKH RUJDQL]DWLRQ WR H[DPLQH HYHU\WKLQJ IURP WKH XVH RI OHJXPLQRXV FRYHU FURSV DQG EUHHGLQJ RI VSLQHOHVV SHDFK SDOP VWHPV WR HVWDEOLVKLQJ GDLU\ IDUPV LQ WKH FRPPXQLW\ 9LVLWV IURP 7 9 FUHZV MRXUQDOLVWV DQG UHSRUWHUV IURP VRXWKHUQ %UD]LO ZHUH FRPPRQ GXULQJ WKH WLPH WKLV VWXG\ WRRN SODFH 7KH JURXSfV UHFRJQLWLRQ KDV JLYHQ WKHP DQ DGYDQWDJH LQ DSSO\LQJ IRU HFRQRPLF DVVLVWDQFH IURP RWKHU IRUHLJQ 1*2fV DOWKRXJK PDQ\ DUJXH WKDW WKLV KDV FUHDWHG D GHSHQGHQF\ RQ RXWVLGH DLG ZKLFK SUHYHQWV WKH RUJDQL]DWLRQ IURP EHFRPLQJ D PRGHO RI HFRQRPLF DQG HFRORJLFDO VXVWDLQDELOLW\ 0RUHRYHU LPSUHVVLYHO\ KLJK \LHOGV RQ UHODWLYHO\ SRRU VRLOV KDV QRW VSDUHG WKH RUJDQL]DWLRQ IURP RWKHU VRFLRHFRQRPLF SUREOHPV WKH ODUJHVW RI ZKLFK KDYH WKXV IDU EHHQ DVVRFLDWHG ZLWK SURGXFW SURFHVVLQJ DQG PDUNHWLQJ 6PLWK HW DO f 2QH RI WKH ILUVW VXFK GLIILFXOWLHV DURVH ZLWK WKH XQH[SHFWHGO\ KLJK \LHOG RI SHDFK SDOP IUXLW %HFDXVH LW LV KLJKO\ SHULVKDEOH WKH IUHVK IUXLW PXVW EH WUDQVSRUWHG DQG PDUNHWHG YHU\ VKRUWO\ DIWHU KDUYHVW DQG WKH ORFDO PDUNHW IRU IUXLW LV VRPHZKDW OLPLWHG LQ LWV GHPDQG IRU WKH VWDUFK\ IUXLW $V D UHVXOW PXFK RI WKH SHDFK SDOP IUXLW KDUYHVWHG VSRLOV ZKLOH DZDLWLQJ WUDQVSRUWDWLRQ RU LV IHG WR SLJV IRU ODFN RI D EX\HU $V SUHYLRXVO\ PHQWLRQHG VRPH 5(&$ IDUPHUV DUH QRZ PDNLQJ D IORXU IURP ERLOHG IUXLW DQG DWWHPSWV DUH EHLQJ PDGH WR PDUNHW WKLV SURGXFW IRU FRPPHUFLDO XVH LQ FHUHDOV FDNHV DQG SDVWD 'LEDUL SHUV FRPPf ,Q DGGLWLRQ WR FUHDWLQJ GDLO\ KDUGVKLS LQ UXUDO KRXVHKROGV WKH ODFN RI LQIUDVWUXFWXUDO GHYHORSPHQW DQG PDLQWHQDQFH LQ WKH UHJLRQ VXUURXQGLQJ 1RYD &DOLIRUQLD KDV SUHVHQWHG REVWDFOHV IRU WKH WUDQVSRUW SURFHVVLQJ DQG PDUNHWLQJ RI 5(&$ SURGXFWV 'XULQJ WKH SHULRG

PAGE 31

WKLV VWXG\ WRRN SODFH 5(&$ KDG UHFRUG KLJK SURGXFWLRQ RI FXSXDVVX IUXLW +RZHYHU EHFDXVH WKH PDUNHW LQ QHDUE\ 5LR %UDQFR EHFDPH TXLFNO\ VDWXUDWHG ZLWK WKH IUXLW SXOS GXULQJ SHDN FXSXDVVX SURGXFWLRQ PRQWKV WKH IUXLW SXOS ZDV IUR]HQ IRU VDOH ODWHU LQ WKH \HDU ZKHQ SXOS VWRFNV KDG GHFUHDVHG DQG IUXLW SULFHV LQFUHDVHG %HFDXVH HOHFWULFLW\ LV VR XQUHOLDEOH LQ 1RYD &DOLIRUQLD 5(&$ KDG D GLHVHOIXHOHG JHQHUDWRU WKDW SURYLGHG SRZHU WR WKH VPDOO IUHH]HU LQ WKH RUJDQL]DWLRQfV ORFDO SURFHVVLQJ XQLW +RZHYHU H[WUHPHO\ KLJK FXSXDVVX SURGXFWLRQ HDUO\ LQ IRUFHG 5(&$ WR UHQW IUHH]HU VSDFH LQ 5LR %UDQFR WR VWRUH WRQV RI SXOS 6PLWK HW DO f 5HQWLQJ WKH VSDFH LQFUHDVHG WKH FRVW RI SURFHVVLQJ DQG PDUNHWLQJ WKH SURGXFW E\ 5(&$ VR WKDW WKH RUJDQL]DWLRQ ZDV VKRUW RI IXQGV WR SXUFKDVH XQSURFHVVHG IUXLW IURP ORFDO SURGXFHUV )XUWKHUPRUH WKH IUHH]LQJ DQG WKDZLQJ RI FXSXDVVX SXOS LQ 5(&$fV IUHH]HUV GXULQJ SRZHU ODSVHV ORZHUHG WKH TXDOLW\ RI WKLV SURGXFW DQG PDGH LW OHVV PDUNHWDEOH LQ XUEDQ DUHDV %\ WKH HQG RI WKH VHDVRQ PDQ\ SURGXFHUV ZHUH IXULRXV ZLWK WKH RUJDQL]DWLRQ ZKR HLWKHU RZHG WKHP PRQH\ RU KDG TXLW SXUFKDVLQJ WKHLU IUXLW 7KH SUREOHP ZDV FRPSRXQGHG E\ WKH IDFW WKDW LPSDVVDEOH URDGV GXULQJ WKH UDLQ\ VHDVRQ PDGH LW GLIILFXOW IRU WKH GULYHUV RI 5(&$fV WZR YHKLFOHV WR SLFN XS IUXLW IURP PRUH UHPRWHO\ORFDWHG IDUPV $V D UHVXOW RI WUDQVSRUWDWLRQ GLIILFXOWLHV DQG 5(&$fV LQDELOLW\ WR SXUFKDVH IUXLW EURXJKW RQ E\ WKH XQDQWLFLSDWHG KLJK FRVW RI IUR]HQ SXOS VWRUDJH D ODUJH SRUWLRQ RI WKH KDUYHVW ZDV ORVW 7KH LQDELOLW\ RI SURGXFHUV WR VHOO WKHLU SURGXFWV WR 5(&$ RU WUDQVSRUW WKHP WR RWKHU PDUNHWV FUHDWHG HFRQRPLF KDUGVKLS IRU PDQ\ RI WKH OHVV ZHOORII KRXVHKROGV DQG SURYRNHG D ORW RI ELWWHUQHVV WRZDUGV WKH RUJDQL]DWLRQ 0DQ\ RI WKH IDUPHUV WKDW RULJLQDOO\ UHFHLYHG PRQH\ IURP 5(&$ WR HVWDEOLVK WKH DJURIRUHVW KDYH VLQFH OHIW WKH RUJDQL]DWLRQ DQG VRPH QRZ ZRUN IRU D QHZ SULYDWHO\RZQHG IRUHLJQ FRPSDQ\ $JUR$PD]RQLDf WKDW PRYHG LQWR 1RYD &DOLIRUQLD

PAGE 32

LQ WR SURGXFH DQG SURFHVV IUXLW VXFK DV SLQHDSSOHV SDOP KHDUW ZDWHUPHORQ DQG FXSXDVVX 1RU LV LW FOHDU WKDW PDQ\ RI WKH IDUPHUV FXUUHQWO\ EHQHILWLQJ IURP WKH PHPEHUVKLS LQ WKH RUJDQL]DWLRQ DUH WUXO\ FRPPLWWHG WR UHSD\LQJ WKH ORDQV WKH\ UHFHLYHG WR HVWDEOLVK WKH V\VWHP 7KH GHIDXOW RQ SD\PHQWV E\ PDQ\ SURGXFHUV KDV LQFUHDVHG ILQDQFLDO VWUHVV IRU WKH RUJDQL]DWLRQ /RSHV SHUV FRPP f 6PLWK HW DO f FRQFOXGHG WKDW 5(&$ LV QRW D YLDEOH PRGHO IRU VXVWDLQDEOH DJURIRUHVWU\ LQ $PD]RQLD EHFDXVH RI WKH RUJDQL]DWLRQfV LQDELOLW\ WR UHVROYH SURFHVVLQJ DQG PDUNHWLQJ SUREOHPV DQG FKURQLF GHSHQGHQFH RQ H[WHUQDO ILQDQFLDO DLG +RZHYHU WKHUH LV HYLGHQFH WR VXJJHVW WKDW 5(&$ LV OHDUQLQJ IURP LWV HDUO\ PLVWDNHV DQG VORZO\ ZRUNLQJ RXW WKH HFRQRPLF GLIILFXOWLHV LW IDFHV HVSHFLDOO\ WKURXJK FROODERUDWLRQ ZLWK ERWK QRQJRYHUQPHQWDO DQG JRYHUQPHQWDO LQVWLWXWLRQV VXFK DV 3(6$&5( DQG (0%5$3$ 3(6$&5( LQ SDUWLFXODU KDV FRQGXFWHG VKRUW FRXUVHV DLPHG DW WHDFKLQJ IDUPHUV EDVLF PDUNHWLQJ SULQFLSOHV DQG FKRRVLQJ PRUH PDUNHWDEOH SURGXFWV WR JURZ LQ WKH IXWXUH +D\GX DQG :DOODFH f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f PDGH IURP FXSXDVVX EHDQV DOVR RIIHU UHDO SRVVLELOLWLHV WR LQFUHDVH WKH UHWXUQ RI DJURIRUHVW SURGXFWV WR ERWK IDUPHUV DQG WKH 5(&$ RUJDQL]DWLRQ ,Q DGGLWLRQ WKH 0/$/

PAGE 33

YROXQWHHU KDV ZRUNHG ZLWK 5(&$ WR LQFUHDVH WKH VWDQGDUGV RI K\JLHQH TXDOLW\ DQG VDIHW\ RI 5(&$ SURGXFWV DQG LQ SDUWLFXODU RI FDQQHG KHDUWRISDOP ZKLFK ZDV RQH RI WKH PRVW OXFUDWLYH DJURIRUHVW SURGXFWV SURGXFHG E\ 5(&$ EHFDXVH LW LV FRQVXPHG WKURXJKRXW %UD]LO DQG SRWHQWLDOO\ H[SRUWHG DEURDG /LNHZLVH ZKHQ %UD]LO QXW EHJLQV WR IUXLW KLJK PDUNHWLQJ SRWHQWLDO DOVR H[LVWV IRU WKH QXWV EHFDXVH WKH\ DUH DOUHDG\ VROG DEURDG IURP RWKHU DUHDV LQ WKH $PD]RQ DQG UHTXLUH UHODWLYHO\ ORZWHFK SURFHVVLQJ .DLQHU f $OVR VKRUWO\ DIWHU WKLV VWXG\fV ILHOG UHVHDUFK ZDV FRPSOHWHG WKH ERUGHU GLVSXWH EHWZHHQ $HU DQG 5RQGQLD HQGHG ZLWK WKH OHJDO LQFRUSRUDWLRQ RI 1RYD &DOLIRUQLD LQWR WKH VWDWH RI 5RQGQLD 6WDWH PHPEHUVKLS ZLOO OLNHO\ HQWLWOH 1RYD &DOLIRUQLD WR JUHDWHU SROLWLFDO DQG HFRQRPLF VXSSRUW DQG LQIUDVWUXFWXUDO LPSURYHPHQWV PDGH E\ WKH JRYHUQPHQW RI 5RQGQLD VKRXOG GLPLQLVK VRPH RI 5(&$f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fV QHZ DXGLWRULXP LQ FROODERUDWLRQ ZLWK SURGXFHU JURXSV IURP DOO RYHU $PD]RQLD VR WKDW PRUH RI WKH UHJLRQfV UXUDO IDPLOLHV ZLOO EHQHILW IURP FRQWLQXHG HGXFDWLRQ DQG VHOIHPSRZHUPHQW WKDW ZLOO OHDG WR PRUH HFRQRPLFDOO\ DQG HFRORJLFDOO\ YLDEOH DJULFXOWXUDO V\VWHPV DQG KHDOWKLHU PRUH VHFXUH OLYHOLKRRGV ,Q WKLV ZD\ 5(&$ ZRXOG LQGHHG SURYLGH D PRGHO LI LW LV DEOH WR FRQIURQW FKDOOHQJHV WKDW IDFH ODQG PDQDJHUV WKURXJKRXW $PD]RQLD DQG SHUVHYHUH WR RYHUFRPH WKHVH REVWDFOHV DQG DVVLVW RWKHUV

PAGE 34

&+$37(5 $33/<,1* $ 3$57,&,3$725< $3352$&+ 72 $*52(&2/2*,&$/ 5(6($5&+ ,QWURGXFWLRQ 2YHU WKH SDVW WZR GHFDGHV fRQIDUP UHVHDUFKf fIDUPHU SDUWLFLSDWLRQf DQG fUXUDO SHRSOHfV NQRZOHGJHf KDYH EHFRPH H[SHFWHG FRPSRQHQWV RI PXFK DJURIRUHVWU\ DQG DJURHFRORJLFDO UHVHDUFK DQG D ZLGH UDQJH RI LQQRYDWLYH DQG QRQWUDGLWLRQDO UHVHDUFK WRROV KDYH EHHQ GHYHORSHG WR IDFLOLWDWH DQG VWUHQJWKHQ WKH SDUWLFLSDWRU\ SURFHVV HJ 0DVFDUHQKDV )HOGVWHLQ DQG -LJJHQV f ,Q IDFW WKH SURFHVV RI IDUPHU SDUWLFLSDWLRQ KDV SURYLGHG D QHZ SDUDGLJP IRU WKH GHYHORSPHQW RI PRUH VXVWDLQDEOH DJULFXOWXUDO SUDFWLFHV LQ UHVRXUFH SRRU ULVNSURQH DUHDV DV ZHOO DV D WRRO RI fHPSRZHUPHQWf WKURXJK ZKLFK UXUDO SHRSOH PD\ DFKLHYH PRUH VHFXUH OLYHOLKRRGV &KDPEHUV HW DO 5RFKHOHDX f $PRQJ WKH UHDVRQV IRU LQFOXGLQJ WKH fUHFLSLHQWV RU WDUJHW JURXS RI WHFKQRORJLFDO GHYHORSPHQWV DV LQIRUPHUV LQ WKH LQYHVWLJDWLYH SURFHVV LV WKH DELOLW\ WR JDLQ D JUHDWHU XQGHUVWDQGLQJ RI WKH LQWHUHVWV SULRULWLHV DQG SUREOHPV IDFHG E\ XVHU JURXSV 7KHVH IDFWRUV DV ZHOO DV KRXVHKROG DQG FRPPXQLW\ OHYHO VRFLRHFRQRPLF FRQVWUDLQWV LH ILQDQFLDO SUDFWLFDO HGXFDWLRQDO PRWLYDWLRQDO WUDGLWLRQDO FXOWXUDO SROLWLFDOf DUH FULWLFDO FRQVLGHUDWLRQV LQ WKH GHYHORSPHQW RI DSSURSULDWH DJULFXOWXUDO WHFKQRORJLHV DQG WKHLU SRWHQWLDO IRU IXWXUH DGRSWLRQ %HHU f 8VHU SDUWLFLSDWLRQ WKXV KDV WKH SRWHQWLDO WR PDNH UHVHDUFK UHVXOWV PRUH SUDFWLFDOO\ DSSOLFDEOH

PAGE 35

0RUHRYHU WKH SDUWLFLSDWRU\ SURFHVV LWVHOI RIIHUV RSSRUWXQLWLHV IRU ERWK ODQG PDQDJHUV DQG UHVHDUFKHUV WR LQWHUDFW FROODERUDWLYHO\ LQ WKH GHYHORSPHQW DQG DSSOLFDWLRQ RI PRUH VXVWDLQDEOH PDQDJHPHQW WHFKQLTXHV 7KH H[WHQW WR ZKLFK ORFDO SHRSOH DUH HQFRXUDJHG WR SDUWLFLSDWH LQ RQIDUP UHVHDUFK YDULHV FRQVLGHUDEO\ IURP UHVHDUFKHUGHVLJQHG DQG PDQDJHG WULDOV WKDW DGGUHVV SUREOHPV LGHQWLILHG LQ SDUW E\ ORFDO ODQGXVHUV WR UHVHDUFKHU VWXG\ RI WULDOV GHVLJQHG DQG PDQDJHG E\ ODQGXVHUV 5RFKHOHDX f $ PXWXDOO\ UHVSHFWIXO DQG WUXVWLQJ UHODWLRQVKLS IRVWHUHG E\ WKH SDUWLFLSDWRU\ SURFHVV LQFUHDVHV WKH OLNHOLKRRG WKDW UHVHDUFKHUV ZLOO EHQHILW IURP WKH VSHFLILF H[SHULHQFHEDVHG NQRZOHGJH SURYLGHG E\ IDUPHUV DERXW WKH ODQGVFDSH DQG ODQGXVH VWUDWHJLHV WKDW KDYH VXFFHHGHG RU IDLOHG LQ WKH SDVW 6FKHUU f /RFDO SDUWLFLSDQWV PD\ JDLQ DQ HQULFKHG XQGHUVWDQGLQJ RI WKH SURFHVVHV FRQWUROOLQJ DJURHFRVYVWHP SURGXFWLYLW\ DQG KHDOWK DV ZHOO DV KRZ VXFK SURFHVVHV DUH PDLQWDLQHG RU GHJUDGHG WKURXJK PDQLSXODWLRQ 7KLV NQRZOHGJH PD\ HQDEOH WKHP WR PDQDJH WKHLU ODQG PRUH VXVWDLQDEO\ 6WXGLHV KDYH VKRZQ WKDW SDUWLFLSDWLRQ LQ DJURHFRORJLFDO UHVHDUFK HQFRXUDJHV IDUPHUV WR LPSURYH ODQG PDQDJHPHQW SUDFWLFHV WKURXJK FRQWLQXHG H[SHULPHQWDWLRQ RQ WKHLU RZQ )RU H[DPSOH 5XGGHOO DQG %HLQJROHD f IRXQG WKDW WUDLQLQJ IDUPHUV WR FRQGXFW WKHLU RZQ UHVHDUFK ZDV D PXFK PRUH HIIHFWLYH VWUDWHJ\ IRU UDLVLQJ IRRG VHFXULW\ WKDQ DWWHPSWLQJ WR SURYLGH D WHFKQRORJ\ SDFNDJHf WKDW ZRXOG QRW VHUYH WKH GLYHUVH HFRORJLFDO PLFURFOLPDWLF DQG VRFLRHFRQRPLF FRQGLWLRQV IDFHG E\ $QGHDQ SRWDWR IDUPHUV .DLQHU f IRXQG SDUWLFLSDWLRQ LQ WKH UHVHDUFK SURFHVV KHOSHG UXEEHU WDSSHU IDPLOLHV LQ WKH %UD]LOLDQ $PD]RQ UHFRJQL]H WKHLU VWUDWHJLF SRVLWLRQ DQG SRZHU ZKHQ QHJRWLDWLQJ ZLWK 1*2fV DQG RWKHU FRQVHUYDWLRQ DQG UHVHDUFK RUJDQL]DWLRQV

PAGE 36

7KHUH DUH FULWLFV ZKR FKDUJH WKDW fHPSRZHULQJf ORFDO SHRSOH WKURXJK SDUWLFLSDWLRQ LV fQDLYH SRSXOLVPf EHFDXVH LW LPSOLHV WKDW fSRZHUIXO RXWVLGHUVf PXVW KHOS fSRZHUOHVV LQVLGHUVf 7KRPSVRQ DQG 6FRRQHV f 6HYHUDO DXWKRUV KDYH SRLQWHG RXW WKDW D fODFN RI XQGHUVWDQGLQJf PD\ QRW GLFWDWH KRZ UHVRXUFHSRRU IDUPHUV PDQDJH WKHLU ODQG 5DWKHU D FRPSOH[ VHW RI SHUVRQDO VRFLRHFRQRPLF DQG SROLWLFDO FLUFXPVWDQFHV RIWHQ KLGGHQ WR RXWVLGHUV RSHUDWHV WR FRQVWUDLQ PDQDJHPHQW FKRLFHV &KDPEHUV 7KUXSS f 7KXV ZKLOH XVHIXO DQ LQFUHDVHG XQGHUVWDQGLQJ RI DJURHFRORJLFDO SURFHVVHV PD\ QRW QHFHVVDULO\ KDYH DQ LPPHGLDWH LPSDFW RQ PDQDJHPHQW GHFLVLRQV 1HYHUWKHOHVV ERWK UHVHDUFKHU DQG IDUPHU RIIHU GLVWLQFW VHWV RI H[SHULHQFH DQG WRROV GHULYHG IURP GLIIHUHQW FXOWXUDO EDFNJURXQGV DQG WUDGLWLRQV RI NQRZOHGJH FUHDWLRQ QRQH RI ZKLFK VKRXOG EH LJQRUHG ZKHQ GHYHORSLQJ DGDSWLQJ DQG DSSO\LQJ PRUH VXVWDLQDEOH ODQGXVH SUDFWLFHV $ SDUWLFLSDWRU\ DSSURDFK ZDV DSSOLHG LQ WKLV DJURIRUHVWU\ UHVHDUFK WR Df JDLQ D JUHDWHU XQGHUVWDQGLQJ DERXW WKH UROH RI SHUHQQLDO FURSV LQ $PD]RQLDQ IDUPLQJ V\VWHPV DQG KRXVHKROG FRQVWUDLQWV WR PRGLI\LQJ DJURIRUHVW PDQDJHPHQW VWUDWHJLHV Ef VWLPXODWH KRXVHKROG DQG FRPPXQLW\OHYHO GLVFXVVLRQV DERXW WKH UROH RI RUJDQLF PDWWHU DQG QXWULHQW F\FOLQJ LQ FRQWUROOLQJ DJURHFRV\VWHP SURGXFWLYLW\ F f HOLFLW UHDOLVWLF PDQDJHPHQW VWUDWHJLHV IURP IDUPHUV WR HQKDQFH DQG VXVWDLQ SURGXFWLYLW\ DQG LQ GRLQJ VR SURYLGH UHVXOWV XVHIXO WR WKH UHJLRQfV IDUPHUV ,Q WKLV VWXG\ WKH SDUWLFLSDWRU\ SURFHVVHV RI GLDORJXH DQG H[FKDQJH DPRQJ UHVHDUFKHUV DQG IDUPHUV ZHUH IDFLOLWDWHG WKURXJK WZR SULQFLSDO FKDQQHOV Df IRFXV JURXS GLVFXVVLRQV KHOG GXULQJ RUJDQL]HG PHHWLQJV DQG SUHVHQWDWLRQV DQG Ef LQIRUPDO LQWHUYLHZV RU fFRQYHUVDWLRQVf KHOG ZLWK PHPEHUV RI LQGLYLGXDO KRXVHKROGV GXULQJ ILHOG YLVLWV

PAGE 37

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£R GRV 6LVWHPDV $JURIORUHVWDLV QR $HUf D QRQJRYHUQPHQWDO RUJDQL]DWLRQ 1*2f ZRUNLQJ ZLWK FRORQLVW IDUPHUV RQ DJURHFRORJLFDO SUREOHPV (0%5$3$ (PSUHVD %UDVLOHLUD GH 3HVTXLVD $JURSHFX£ULDf D QDWLRQDO DJURQRPLF UHVHDUFK LQVWLWXWLRQ DQG 626 $PD]RQLD D JURXS RI HQYLURQPHQWDO HGXFDWRUV 3(6$&5( LQ SDUWLFXODU SURYLGHG FUXFLDO ORJLVWLFDO DVVLVWDQFH DQG D ILHOG DVVLVWDQW IURP WKH ORFDO XQLYHUVLW\ ZKR ZDV WUDLQHG LQ DJURHFRORJLFDO UHVHDUFK PHWKRGRORJLHV GXULQJ WKH UHVHDUFK SHULRG $V PHQWLRQHG LQ WKH SUHYLRXV FKDSWHU WKH RULJLQDO f5(&$f DJURIRUHVWU\ V\VWHP ZDV ERWK FRQFHSWXDOL]HG DQG SODQWHG RQ RYHU IDUPV LQ WKH ODWH nV E\ WKH SURGXFHUV WKHPVHOYHV DOWKRXJK WKH JURXS GLG UHFHLYH VRPH WHFKQLFDO DGYLFH IURP ORFDO UHVHDUFK LQVWLWXWLRQV DQG 1*2V %\ WKH WLPH FRQGXFWHG D VL[ZHHN SLORW VWXG\ LQ $HU LQ WKH 5(&$ SURMHFW ZDV DOUHDG\ ZHOO NQRZQ WKURXJKRXW WKH ZHVWHUQ $PD]RQ DQG VHYHUDO H[WHQGHG YLVLWV WR 5(&$ IDUPV OHIW PH ZLWK WZR TXHVWLRQV KRZ FRXOG WKHVH DJURIRUHVWU\ V\VWHPV EH VR SURGXFWLYH LQ VHHPLQJO\ QXWULHQWSRRU VRLOV DQG KRZ ORQJ FRXOG VXFK SURGXFWLYLW\ ODVW

PAGE 38

ZLWKRXW PRUH LQWHQVLYH PDQDJHPHQW" &RQYHUVDWLRQV ZLWK KRVW IDPLOLHV DQG PHPEHUV RI 5(&$ DGPLQLVWUDWLRQ LQFOXGHG GLVFXVVLRQV DERXW WKHLU H[SHULHQFHV ZLWK WKLV DJURIRUHVWU\ V\VWHP DV ZHOO DV WKHLU FRQFHUQV UHJDUGLQJ WKH DJURIRUHVWf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f 5(&$ IDUPHUV ZHUH FRQFHUQHG DERXW ZKDW WKH\ SHUFHLYHG WR EH fDJJUHVVLYHf URRW FRPSHWLWLRQ E\ SHDFK SDOP DV HYLGHQFHG E\ WKH VSHFLHVf WKLFN VKDOORZ QHWZRUN RI URRWV WKDW H[WHQGHG ZHOO EHQHDWK WKH FDQRSLHV RI FXSXDVVX 7KLV ZDV HVSHFLDOO\ DODUPLQJ IRU IDUPHUV EHFDXVH FXSXDVVX ZDV WKH PRVW HFRQRPLFDOO\ LPSRUWDQW FRPSRQHQW RI WKH DJURIRUHVW DW WKDW WLPH 0DLQWDLQLQJ VRLO IHUWLOLW\ ZDV DOVR D FRQFHUQ IRU WKHP DV IDUPHUV ZHUH FRPPLWWHG WR XVLQJ RQO\ RUJDQLF VRLO DPHQGPHQWV WKH DFWXDO XVH RI ZKLFK DSSHDUHG WR EH TXLWH OLPLWHGf SULPDULO\ EHFDXVH FKHPLFDO LQSXWV ZHUH H[SHQVLYH DQG QRW HDVLO\ SURFXUHG LQ WKLV UHJLRQ 2WKHU LVVXHV RXWVLGH

PAGE 39

P\ UHDOP RI WUDLQLQJ GLVFXVVHG E\ WKH RUJDQL]DWLRQ DQG KRXVHKROGV LQFOXGHG SHVW SUREOHPV HVSHFLDOO\ ZLWFKHVf EURRP ZKLFK KDG SUHYLRXVO\ ZLSHG RXW FDFDR SODQWDWLRQV DQG WKH WUDQVSRUW SURFHVVLQJ DQG PDUNHWLQJ RI DJURIRUHVW SURGXFWV :LWKLQ D \HDU RI P\ LQLWLDO YLVLW D VLPSOLILHG YHUVLRQ RI WKH UHVHDUFK SURSRVDO DSSURYHG E\ P\ DGYLVRU\ FRPPLWWHH ZDV WUDQVODWHG LQWR 3RUWXJXHVH DQG VHQW WR 3(6$&5( DQG 5(&$ OHDGHUV IRU UHYLHZ 3(6$&5( GHWHUPLQHG WKDW WKH UHVHDUFK ZRXOG ILW ZLWKLQ WKHLU SURIHVVLRQDO SULRULWLHV DQG FRQWDFWHG WKH )HGHUDO 8QLYHUVLW\ RI $FUH 8)$&f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f JURXS $ VXPPDU\ RI JURXS SUHVHQWDWLRQV PDGH WR 5(&$ DQG RWKHU ORFDO RUJDQL]DWLRQV LV SURYLGHG LQ 7DEOH 7KH SKRVSKRUXV 3f DQG QLWURJHQ 1f EXGJHW VWXG\ ZDV ILUVW LQWURGXFHG GXULQJ DQ HFRORJ\ FRXUVH JLYHQ E\ 626 $PD]RQLD DQ LQWHUGLVFLSOLQDU\ JURXS RI%UD]LOLDQ HQYLURQPHQWDO HGXFDWRUV )ROORZLQJ DQ 626OHG VHVVLRQ RQ VRLO IHUWLOLW\ XVHG D fEDQN DFFRXQWf DQDORJ\ WR H[SODLQ KRZ WKH V\VWHP RU fDJURIRUHVWU\ DFFRXQWf LV FRPSULVHG RI GLIIHUHQW UHVHUYHV LH VRLO DERYH DQG EHORZJURXQG ELRPDVV OLWWHUIDOO PLFURRUJDQLVPV HWFf DQG KRZ WKLV fFDSLWDOf LV WUDQVIHUUHG LQ DQG RXW RI WKH DFFRXQW ZLWK IHUWLOL]DWLRQ PXOFKLQJ KDUYHVWLQJ OHDFKLQJ DQG

PAGE 40

RWKHU SURFHVVHV WKDW DGG RU UHPRYH QXWULHQWV IURP WKH V\VWHP :H WKHQ EULHIO\ GLVFXVVHG KRZ PDQDJHPHQW SUDFWLFHV PD\ FRQWULEXWH WR FRQVHUYLQJ DQG EXLOGLQJ QXWULHQW FDSLWDO LQFUHDVLQJ WKH OLNHOLKRRG WKDW WKH DJURIRUHVWU\ V\VWHP ZRXOG EH SURGXFWLYH LQ WKH IXWXUH $IWHU WKH EDVLF VWXG\ PHWKRGV DQG SDUWLFLSDQWVf UHVSRQVLELOLWLHV ZHUH RXWOLQHG UHFRPPHQGDWLRQV E\ IDUPHUV ZHUH VROLFLWHG DQG UHFRUGHG RQ D IOLS FKDUW 7KHLU UHTXHVWV LQFOXGHG WKDW Df WKH UHVHDUFK LQYROYH VHYHUDO IDUPV Ef DWWHQG RIILFLDO 5(&$ JURXS PHHWLQJV WR EHFRPH DFTXDLQWHG ZLWK IDUPHUV DQG XSGDWH WKHP RQ WKH VWXG\fV SURJUHVV DQG Ff D %UD]LOLDQ EH WUDLQHG WR FRQWLQXH WKLV W\SH RI UHVHDUFK DIWHU P\ GHSDUWXUH )ROORZLQJ WKH GLVFXVVLRQ VHYHUDO IDUPHUV YROXQWHHUHG WKHLU DJURIRUHVWU\ SORWV IRU WKH VWXG\ DQG LW ZDV DJUHHG WKDW WKH ILQDO VLWH VHOHFWLRQ ZRXOG EH PDGH DIWHU YLVLWLQJ WKH IDUPV 5RRW LQJURZWK DQG VRLO VWXGLHV ,Q DGGLWLRQ WR LGHQWLI\LQJ 3 OLPLWDWLRQV WR DJURIRUHVW SURGXFWLYLW\ WKH URRW LQJURZWK ELRDVVD\ ZDV DOVR GHVLJQHG WR DGGUHVV WKH IDUPHUVf FRQFHUQV DERXW SHDFK SDOP URRW FRPSHWLWLRQ E\ FRPSDULQJ WKH JURZWK RI URRWV E\ WKLV DQG RWKHU DJURIRUHVW FRPSRQHQWV LQWR LQJURZWK FRUHV EXULHG LQ WKH VRLO IRU D VSHFLILHG SHULRG RI WLPH &KDSWHU f 6RLO VDPSOHV IURP DJURIRUHVWU\ V\VWHPV DQG DGMDFHQW QDWLYH IRUHVW RQ HLJKW IDUPV ZHUH WR EH DQDO\]HG WR GHWHUPLQH KRZ WKH DJURIRUHVW VRLOV KDG FKDQJHG FKHPLFDOO\ VLQFH FRQYHUVLRQ IURP QDWLYH IRUHVW 7KHVH VWXGLHV ZHUH LQWURGXFHG DW 5(&$fV VHPLDQQXDO DVVHPEO\ $XJXVW f LQ ZKLFK DOO PHPEHUV RUGLQDULO\ PHHW WR GLVFXVV SUREOHPV WKH\ DUH KDYLQJ RQIDUP DQG LVVXHV IDFLQJ 5(&$ DV DQ RUJDQL]DWLRQ $ SUHVHQWDWLRQ RQ WKH EDVLF

PAGE 41

7DEOH 6XPPDU\ RI SUHVHQWDWLRQV DQG GLVFXVVLRQ JURXSV FRQGXFWHG DV SDUW RI SDUWLFLSDWRU\ UHVHDUFK SURFHVV WR VWXG\ QXWULHQW DQG ILQH URRW G\QDPLFV LQ WKH 5(&$ DJURIRUHVWU\ V\VWHP $)6f 1XPEHU RI SDUWLFLSDQWV LQ SDUHQWKHVHV 7UDQVODWHG IURP 3RUWXJXHVH 'DWH 7RSLF DQG 2EMHFWLYHV 3DUWLFLSDQWV 0HWKRGRORJLHV 2XWSXWV 1XWULHQW EXGJHW SURSRVDO 'LVFXVV QXWULHQW F\FOLQJ 3UHVHQW SURSRVHG VWXG\ 6ROLFLW IHHGEDFN t YROXQWHHUV 5(&$ OHDGHUV 0HPEHUV DWWHQGLQJ 626 FRXUVH s f )OLS FKDUW GUDZLQJ RI $)6 QXWULHQW F\FOH /LVW RI VWXG\ REMHFWLYHV %DQN DQDORJ\ ,QWURGXFHG FRQFHSWV RI QXWULHQW F\FOLQJ )DUPHUVf FULWHULD 9ROXQWHHU VWXG\ VLWHV 5RRW VWXG\ SURSRVDO 'LVFXVV URRW FRPSHWLWLRQ 3UHVHQW SURSRVHG VWXG\ 6ROLFLW IHHGEDFN t YROXQWHHUV 5(&$ PHPEHUV DWWHQGLQJ VHPLn DQQXDO DVVHPEO\ f )OLS FKDUW GUDZLQJV RI URRW FRPSHWLWLRQ ,QJURZWK FRUH XVHG *URXS GLVFXVVLRQ *URXS GLVFXVVLRQ RI URRW FRPSHWLWLRQ )DUPHUVf FULWHULD 9ROXQWHHU VWXG\ VLWHV 5RRW VWXG\ XSGDWH 8SGDWH IDUPHUV RQ SURJUHVV 'LVFXVV K\SRWKHVHV 'LVFXVV SDUWLFLSDQWVf ILHOG REVHUYDWLRQV 5(&$ PHPEHUV DWWHQGLQJ VHPLn DQQXDO DVVHPEO\ f 'HPRQVWUDWLRQ RI DFWXDO VDPSOHV LQJURZWK FRUHV ZLWK URRWVf *URXS GLVFXVVLRQ ,QFUHDVHG XQGHUVWDQGLQJ RI URRW VWXG\ E\ IDUPHUV GHPRQVWUDWHG E\ TXHVWLRQV 5RRW t VRLO VWXG\ XSGDWH 3UHVHQW SUHOLPLQDU\ GDWD 'LVFXVV SRVVLEOH LQWHUSUHWDWLRQV RI SUHOLPLQDU\ UHVXOWV 5(&$ PHPEHUV DWWHQGLQJ VHPLn DQQXDO DVVHPEO\ f 6LPSOH EDU JUDSKV RQ IOLS FKDUW SDSHU 6DPSOH VRLO DQDO\VLV VKHHW RQ IOLS FKDUW SDSHU 8SGDWHG DQG UHFHLYHG IHHGEDFN IURP IDUPHUV RQ URRW VWXG\ UHVXOWV

PAGE 42

7DEOH FRQWLQXHG 'DWH DQG 7RSLF DQG 2EMHFWLYHV $)6 QXWULHQW F\FOLQJ 3UHVHQW SUHOLPLQDU\ GDWD RQ 3t1 KDUYHVW UHPRYDO VRLO t SODQW VWRFNV 'LVFXVV FXUUHQW PDQDJHPHQW 'LVFXVV VWUDWHJLHV WR PLQLPL]H VRLO GHJUDGDWLRQ t HQKDQFH QXWULHQW F\FOLQJ *HQHUDWH OLVW RI PDQDJHPHQW RSWLRQV 1XWULHQW F\FOLQJ LQ 5(&$ $)6 3UHVHQW PHWKRGV t SUHOLPLQDU\ UHVXOWV WR ORFDO UHVHDUFK LQVWLWXWLRQ 6ROLFLW IHHGEDFN RQ UHVXOWV (QFRXUDJH IXWXUH UHVHDUFK FROODERUDWLRQV ZLWK 5(&$ $)6 1XWULHQW &\FOLQJ 626 FRXUVHf 3UHVHQW QXWULHQW F\FOLQJ t UHPRYDO ZLWK KDUYHVW XVLQJ SUHOLPLQDU\ GDWD 'LVFXVV FXUUHQW ODQG PDQDJHPHQW t HIIHFW RQ QXWULHQW F\FOHV t VRLO IHUWLOLW\ 'HWHUPLQH YLDEOH PDQDJHPHQW RSWLRQV WR PDLQWDLQ SURGXFWLYLW\ 1XWULHQW F\FOLQJ LQ 5(&$ $)6 3UHVHQW PHWKRGV t SUHOLPLQDU\ UHVXOWV WR 3(6$&5( t RWKHU ORFDO 1*2fV 'LVFXVV LPSOLFDWLRQV IRU $)6 PDQDJHPHQW DQG SURGXFWLYLW\ 3DUWLFLSDQWV 5(&$ UHIRUHVWDWLRQ WHDP (TXLSH GH SODQWDJDR f (0%5$3$ 5LR %UDQFR sf )DUPHUV LQ 5(&$ SURGXFHUVf JURXSV DWWHQGLQJ 626 (QYLURQPHQWDO (GXFDWLRQ FRXUVH s HDFK VHVVLRQf 3(6$&5( 8)$& VWXGHQWV (0$7(5 DJHQWV 0HWKRGRORJLHV 2XWSXWV &RORUHG GUDZLQJV RQ IOLSFKDUWV RI $)6 ZLWK DSSUR[LPDWH QXWULHQW VWRFNV LQ VRLO ELRPDVV DQG KDUYHVW )OLS FKDUW OLVW 6OLGHV RI PHWKRGRORJ\ 2YHUKHDG WUDQVSDUHQFLHV ZLWK UHVXOWV *DPH %DQFR GR %UDVLO IHOW ERDUG DQG FXW RXWVf (QODUJHG SKRWR VHULHV IRUHVW EXP SODQWLQJ PDWXUH $)6f 6PDOO JURXS GLVFXVVLRQV )OLS FKDUW OLVWV 6OLGHV t WUDQVSDUHQFLHV ZLWK PHWKRGV t UHVXOWV %DQFR GR %UDVLO JDPH /LVW RI IDUPHU RSWLRQV IRU $)6 PDQDJHPHQW 5HLQWURGXFH QXWULHQW F\FOLQJ LQ 5(&$ $)6 )DUPHUV OLVW SUDFWLFHV DIIHFWLQJ QXWULHQW F\FOH /LVWHG RSWLRQV IRU UHGXFLQJ VRLO GHJUDGDWLRQ *UHDWHU DZDUHQHVV E\ UHVHDUFK LQVWLWXWLRQV RI WKH SRWHQWLDO IRU RQ IDUP UHVHDUFK ZLWK 5(&$ )DUPHUV GLVFXVV QXWULHQW F\FOLQJ LQ GLYHUVH ODQGXVHV 6PDOO JURXSV JHQHUDWH OLVW RI PDQDJHPHQW RSWLRQV

PAGE 43

FRQFHSWV RI URRW FRPSHWLWLRQ JHQHUDWHG DQ DQLPDWHG GLVFXVVLRQ DPRQJ IDUPHUV ZKR KDG REVHUYHG WKH fDJJUHVVLYH URRWVf RI SHDFK SDOP LQ WKHLU RZQ SODQWDWLRQV DQG ZHUH FRQFHUQHG WKDW LW PLJKW HYHQWXDOO\ GRPLQDWH RU HYHQ fNLOOf RWKHU FRPSRQHQWV RI WKH V\VWHP )DUPHUV ZHUH DOVR LQWHUHVWHG LQ KDYLQJ WKHLU VRLO DQDO\]HG DV ORQJ DV WKH\ DOVR UHFHLYHG WKH UHVXOWV $IWHU GLVFXVVLQJ FULWHULD IRU IDUP VLWH VHOHFWLRQ DQG SDUWLFLSDWLRQ LQ WKH VWXG\ WKH SURGXFHUV WKHPVHOYHV VHOHFWHG HLJKW IDUP VLWHV IURP DPRQJ WKRVH YROXQWHHUHG E\ LQGLYLGXDOV ,PSOHPHQWDWLRQ RI ILHOG VWXGLHV 2QFH WKH ILHOG VWXGLHV ZHUH XQGHUZD\ IDUPHUV ZHUH XSGDWHG RQ WKH SURJUHVV RI WKH UHVHDUFK GXULQJ WKH QH[W WZR RIILFLDO DVVHPEO\ PHHWLQJV 7DEOH f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f 3UHOLPLQDU\ GDWD JHQHUDWHG IURP WKH FRQFOXGHG URRW DQG VRLO ILHOG VWXGLHV DV ZHOO DV WKH RQJRLQJ 3 DQG 1 EXGJHW UHVHDUFK SURYLGHG WKH EDVLV IRU WKH QXWULHQW F\FOLQJ SUHVHQWDWLRQV DQG GLVFXVVLRQ JURXSV KHOG LQ 6HSWHPEHU DQG 1RYHPEHU $V LQGLFDWHG LQ 7DEOH D YDULHW\ RI WHFKQLTXHV DQG WRROV ZHUH XVHG WR SUHVHQW WKH GDWD DQG VWLPXODWH GLVFXVVLRQ $Q H[DPSOH LV VKRZQ KHUH IRU WKH QXWULHQW F\FOLQJ PRGXOHV RI WKH 626 (FRORJ\ FRXUVHV 7DEOH f 7KHVH WZR VHVVLRQV DORQJ ZLWK DQ HDUOLHU VHVVLRQ ZLWK 5(&$fV UHIRUHVWDWLRQ WHDP

PAGE 44

FXOPLQDWHG ZLWK D OLVW RI PDQDJHPHQW RSWLRQV IRU PDLQWDLQLQJ VRLO IHUWLOLW\ JHQHUDWHG E\ SDUWLFLSDQWV $OWHUQDWLYH QRQOHFWXUHf WUDLQLQJ WHFKQLTXHV VXFK DV JDPHV DQG VPDOO JURXS GLVFXVVLRQV ZHUH HPSOR\HG WR FUHDWH D QRQWKUHDWHQLQJ DQG HQJDJLQJ HQYLURQPHQW HVSHFLDOO\ DV HGXFDWLRQ OHYHOV YDULHG FRQVLGHUDEO\ DPRQJ 5(&$ IDUPHUV 7KH EDVLF REMHFWLYH RI WKH %DQFR GR %UDVLO RIILFLDO VWDWH EDQNf JDPH XVHG GXULQJ WKH 626 FRXUVHV ZDV WR GHPRQVWUDWH KRZ QXWULHQWV ZHUH WUDQVIHUUHG IURP GLIIHUHQW fDFFRXQWVf LQ WKH DJURIRUHVWU\ V\VWHP RU UHPRYHG HQWLUHO\ ZLWK KDUYHVW )RU H[DPSOH ZKHQ WKH FXWRXW RI D SHDFK SDOP FURZQ ZDV DGGHG WR WKH V\VWHP GHSLFWHG RQ WKH IHOW ERDUG VL[ %UD]LOLDQ GROODUV UHDLVf ZHUH PRYHG IURP WKH VRLO DFFRXQW LQ WKH EDQN WR WKH SODQW ELRPDVV DFFRXQW WKH PRQHWDU\ YDOXH EHLQJ EDVHG RQ SUHOLPLQDU\ GDWD HJ RQH %UD]LOLDQ GROODU HTXDOV RQH NJ 3KDf :KHQ SHDFK SDOP IUXLW ZDV DGGHG WR WKH WUHH LWV YDOXH ZDV PRYHG IURP WKH VRLO WR WKH SODQW ELRPDVV DFFRXQW :KHQ WKH IUXLW ZDV KDUYHVWHG WKLV DPRXQW ZDV ZLWKGUDZQ IURP WKH EDQN $IWHU D GHPRQVWUDWLRQ SDUWLFLSDQWV ZHUH DVNHG LQ ZKLFK DFFRXQW WR SODFH QXWULHQWV RU UHPRYH QXWULHQWV IURPf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

PAGE 45

7DEOH /HVVRQ SODQ IRU SDUWLFLSDWRU\ UHVHDUFK DFWLYLWLHV QXWULHQW F\FOLQJ PRGXOH IRU 626 HQYLURQPHQWDO HGXFDWLRQ FRXUVH JLYHQ WR 5(&$ IDUPHUV RQ 6HSWHPEHU DQG 7RWDO VHVVLRQ WLPH KRXUV 7UDQVODWHG IURP 3RUWXJXHVH 6HVVLRQ 2EMHFWLYHV 'HPRQVWUDWH WKH FRQFHSW RI QXWULHQW F\FOLQJ DQG LWV UROH LQ PDLQWDLQLQJ DJURn HFRV\VWHP SURGXFWLYLW\ WR 5(&$ SURGXFHUV XVLQJ GDWD IURP 5(&$ DJURIRUHVWU\ V\VWHP ,GHQWLI\ DQG GLVFXVV FXUUHQW ODQG PDQDJHPHQW SUDFWLFHV RI 5(&$ IDUPHUV WKDW SRWHQWLDOO\ EHQHILW RU GHJUDGH QXWULHQW F\FOLQJ SURFHVVHV 'HYHORS D OLVW RI SUDFWLFDO ODQG PDQDJHPHQW RSWLRQV WKDW PD\ KHOS PDLQWDLQ VRLO IHUWLOLW\ DQG IXWXUH DJURIRUHVWU\ V\VWHP SURGXFWLYLW\ 7LPH 0HWKRG 0DWHULDOV PLQ ,QWHUDFWLYH OHFWXUH HPSKDVLV RQ TXHVWLRQV WR IDUPHUVf WR GHILQH FRQFHSWV RI QXWULHQW F\FOLQJ )OLS FKDUW ZLWK TXHVWLRQV DQG URRP WR OLVW DQVZHUV ZKDW LV D QXWULHQW F\FOH ZK\ LPSRUWDQW WR ODQG PDQDJHUV" HWFf PLQ *DPH %DQFR GR %UDVLO XVHV EDQN DQDORJ\ WR GHVFULEH QXWULHQW LQSXWV RXWSXWV t WUDQVIHUVf O[O P SLHFHV RI IHOW FDUGERDUG FXWRXWV RI $)6 FRPSRQHQWV WUXQNV OHDYHV IUXLW URRWV VRLO OHJXPHVf 3DSHU FXWRXW RI EDQN ZLWK DFFRXQWV VRLO IDOOHQ OLWWHU OLYH ELRPDVV LQ SODQWVf )HOW FXWRXWV RI PRQH\ GLIIHUHQW YDOXHVf &KDUW ZLWK fPRQHWDU\ NJKDf YDOXHV IRU $)6 FRPSRQHQWV EDVHG XSRQ GDWD PLQ %UHDN PLQ *URXS 'LVFXVVLRQ ,PSDFW RI $JULFXOWXUDO 3UDFWLFHV RQ 1XWULHQW &\FOLQJ 6HULHV RI HQODUJHG FRORU ;HUR[f SKRWR GHSLFWLQJ Df QDWLYH IRUHVW Ef FOHDUHG t EXUQHG ODQG Ff QHZO\ SODQWHG VHHGOLQJV RQ UHFHQWO\ EXUQHG ODQG Gf SXSXQKD PRQRFXOWXUH PLQ 6PDOO *URXSV GLVFXVV $36 PDQDJHPHQW t DGDSWDWLRQV WR HQKDQFH QXWULHQW F\FOLQJ JURXSV HDFK JLYHQ RQH SKRWR WR VWLPXODWH GLVFXVVLRQ DQG IOLS FKDUW t SHQ WR OLVW SRVVLEOH DGDSWDWLRQV PLQ *URXS VXPPDU\ t HYDOXDWLRQ RI SURSRVHG SUDFWLFHV t HIIHFWV RQ QXWULHQW F\FOLQJ t $)6 SURGXFWLYLW\ )OLS FKDUW WDEOH WR EH ILOOHG RXW DV E\ HQWLUH JURXS ZLWK IRXU FROXPQV 0DQDJHPHQW SUDFWLFH 2EMHFWLYH %HQHILW RU GHJUDGH QXWULHQW F\FOH :K\"

PAGE 46

$QRWKHU LPSRUWDQW REMHFWLYH RI WKH SDUWLFLSDWRU\ SURFHVV ZDV WR IDPLOLDUL]H ORFDO UHVHDUFK DQG H[WHQVLRQ RUJDQL]DWLRQV ZLWK WKH RQIDUP VWXGLHV XQGHUZD\ LQ 1RYD &DOLIRUQLD DQG IDFLOLWDWH IXWXUH LQYHVWLJDWLYH FROODERUDWLRQV ZLWK 5(&$ IDUPHUV )RU WKLV UHDVRQ UHVHDUFK PHWKRGRORJ\ DV ZHOO DV SUHOLPLQDU\ VWXG\ UHVXOWV ZHUH SUHVHQWHG WR 3(6$&5( DQG (0%5$3$ LQ 5LR %UDQFR 7DEOH f DV ZHOO DV WR WKH 6RLOV 'HSDUWPHQW DW WKH 8QLYHUVLW\ RI 9LQRVD LQ WKH VRXWK FHQWUDO %UD]LOLDQ VWDWH RI 0LQDV *HUDLV ,QFOXGHG LQ WKH UHVXOWV SUHVHQWHG WR WKHVH JURXSV ZHUH WKH IOLS FKDUW OLVWV RI PDQDJHPHQW RSWLRQV JHQHUDWHG E\ 5(&$ IDUPHUV +RXVHKROG ,QWHUYLHZV 5RRW LQJURZWK DQG VRLO VWXGLHV ,QIRUPDO LQWHUYLHZV RU FRQYHUVDWLRQV ZHUH KHOG ZLWK ERWK PHQ DQG ZRPHQ RI WKH HLJKW IDPLOLHV SDUWLFLSDWLQJ LQ WKH URRW LQJURZWK DQG VRLO VWXGLHV UHJDUGLQJ WKH UROH RI DJURIRUHVWU\ LQ D KRXVHKROGfV SURGXFWLRQ VWUDWHJ\ &XUUHQW DJURIRUHVW PDQDJHPHQW SUDFWLFHV DV ZHOO DV FRQVWUDLQWV WR DQG RSSRUWXQLWLHV IRU PRGLI\LQJ PDQDJHPHQW ZHUH DOVR GLVFXVVHG 7KHVH FRQYHUVDWLRQV WRRN SODFH GXULQJ WKUHH WZRGDY YLVLWV ZLWK HDFK IDPLO\ 3UHYLRXV YLVLWV WR WKHVH IDUPV SULRU WR LQLWLDWLQJ WKH VWXG\ KDG IRVWHUHG D JRRG ZRUNLQJ UHODWLRQVKLS ZLWK HDFK IDPLO\ 7KH DFWXDO LQVWDOODWLRQ RI WKH URRW LQJURZWK VWXG\ RQ HDFK IDUP UHTXLUHG DERXW D GD\ ZLWK WKH KHOS RI IDPLO\ PHPEHUV 7R HQFRXUDJH D fOHDUQLQJf HQYLURQPHQW WKH VWXG\ REMHFWLYHV ZHUH UHYLHZHG DQG SDUWLFLSDQWV ZHUH DVNHG WR PDNH SUHGLFWLRQV DERXW WKH UHVXOWV EDVHG XSRQ WKHLU SUHYLRXV H[SHULHQFH ZLWK WKH DJURIRUHVWU\ V\VWHP 7KH URRW LQJURZWK FRUH ELRDVVD\ PHWKRGRORJ\ LV UHODWLYHO\ VWUDLJKWIRUZDUG &KDSWHU f DQGSDUWLFLSDQWV DSSHDUHG WR XQGHUVWDQG LW FRQFHSWXDOO\ DV GHPRQVWUDWHG E\ WKHLU TXHVWLRQV

PAGE 47

DQG SUHGLFWLRQV &RQYHUVDWLRQV ZLWK RWKHU IDPLO\ PHPEHUV RFFXUUHG GXULQJ PHDOV IDUP ZDONV DQG RWKHU fOHLVXUH SHULRGVf 2EVHUYDWLRQ RI IDUP DQG KRXVHKROG DFWLYLWLHV SURYLGHG DGGLWLRQDO LQVLJKW LQWR DJURIRUHVW DQG RYHUDOO IDUP PDQDJHPHQW 7KH IDPLOLHV ZHUH YLVLWHG D VHFRQG WLPH ZKHQ LQJURZWK FRUHV ZHUH UHPRYHG IURP WKH VRLO DQG WKH UHVXOWV IURP VRLO DQDO\VHV ZHUH UHWXUQHG WR HDFK IDPLO\ RQ WKH WKLUG YLVLW 7KH ODWWHU YLVLW ZDV XVHG WR GLVFXVV VRLO IHUWLOLW\ DQG DJURIRUHVW PDQDJHPHQW 7KH VRLO DQDO\VLV fVKHHWf 7DEOH f ZDV PRGHOHG VRPHZKDW DIWHU WKH IRUP JLYHQ WR IDUPHUV E\ (0%5$3$ $OWKRXJK WKH ODQJXDJH XVHG ZDV UDWKHU WHFKQLFDO WKH VKHHW ZDV TXLWH XVHIXO LQ LQLWLDWLQJ GLVFXVVLRQV DERXW VRLO DFLGLW\ QXWULHQWV DQG WKH SRWHQWLDO XVH RI OHJXPLQRXV FRYHU FURSV IHUWLOL]HU DQG RUJDQLF UHVLGXHV WR LPSURYH VRLO TXDOLW\ 3 DQG 1 EXGJHW VWXG\ )UHTXHQW RIWHQ GDLO\f FRQWDFW ZLWK WKH IDPLOLHV SDUWLFLSDWLQJ LQ WKH QXWULHQW EXGJHW VWXG\ SURYLGHG DQ RSSRUWXQLW\ IRU LQGHSWK FRQYHUVDWLRQV UHJDUGLQJ FRQVWUDLQWV WR DJURIRUHVW PDQDJHPHQW DQG SURGXFWLRQ DV ZHOO DV FRQWLQXDO REVHUYDWLRQ RI IDUP DQG KRXVHKROG DFWLYLWLHV :KLOH WKH QXWULHQW F\FOLQJ VWXG\ ZDV LQVWDOOHG RQ RQO\ RQH VLWH WKH IDUP VLWH LWVHOI ZDV RZQHG E\ RQH IDPLO\ ZKR KLUHG DQRWKHU IDPLO\ WR OLYH RQ WKH SURSHUW\ DQG PDQDJH LW DQG D FORVH UHODWLRQVKLS ZLWK ERWK KRXVHKROGV SURYLGHG FRQVLGHUDEOH LQVLJKW LQWR GLIIHULQJ SHUFHSWLRQV RI DJURIRUHVW SURGXFWLYLW\ DQG VXVWDLQDELOLW\ %HFDXVH LW ZDV LPSRVVLEOH IRU PH WR EH SUHVHQW HYHU\ WLPH IUXLW RU SDOP KHDUW ZDV KDUYHVWHG IURP WKH V\VWHP IDPLO\ PHPEHUV UHFRUGHG WKH ZHLJKW RI IUXLW UHPRYHG IURP WKH VWXG\ SORWV DQG FROOHFWHG UDLQIDOO VDPSOHV LPPHGLDWHO\ DIWHU VWRUPV

PAGE 48

7DEOH 6DPSOH VRLO DQDO\VLV VKHHW JLYHQ WR IDUPHUV SDUWLFLSDWLQJ LQ URRW LQJURZWK ELRDVVD\ DQG VWXGLHV DIWHU FRPSOHWLRQ RI DQDO\VLV FROOHFWHG IURP WKHLU IDUPV $QDO\VHV SHUIRUPHG LQFOXGHG S+ b RUJDQLF 8QLYHUVLW\ RI )ORULGD 7KH 5(&$ 3URMHFW 6RLO $QDO\VHV FP GHSWK 1RYHPEHU f 3URSHUW\ RI 6U $OXL]LR H 6UD &DUPHOLWD *RQVDOYHV *URXS %5
PAGE 49

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f1XWULHQW &\FOLQJ DQG $JURHFRV\VWHP 6XVWDLQDELOLW\f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f SUDFWLFHV WKDW PD\ UHTXLUH PRUH UHVRXUFHV DQG WUDLQLQJ VXFK DV ZLGHVSUHDG SODQWLQJ DQG UHJXODU SUXQLQJ RI OHJXPLQRXV FRYHU FURSV DQG VHDVRQDO GLUHFWHG DSSOLFDWLRQ RI VRLO DPHQGPHQWV ZLOO DOVR EH GLVFXVVHG $ UHYLHZ RI WKH UHVHDUFK SURFHVV ZLOO SURYLGH DQ RSSRUWXQLW\ WR GLVFXVV EDVLF UHVHDUFK PHWKRGV DQG WKHLU DSSOLFDWLRQ E\ IDUPHUV DV RXWOLQHG HDUOLHU LQ WKLV FKDSWHU

PAGE 50

:H ZLOO SUHVHQW GDWD JHQHUDWHG IURP WKH ILHOG UHVHDUFK LQ DQ H[WHQVLRQ SDPSKOHW WKDW ZLOO EH WUDQVODWHG LQWR 3RUWXJXHVH DQG GLVVHPLQDWHG E\ 3(6$&5( 7KH IRFXV RI WKH H[WHQVLRQ EURFKXUH ZLOO EH KRZ QXWULHQW F\FOHV RI WUHHEDVHG DJURHFRV\VWHPV FDQ EH PDQDJHG WR PD[LPL]H WKHLU SRWHQWLDO IRU VXVWDLQHG SURGXFWLYLW\ ,Q DGGLWLRQ WR RIIHULQJ LQIRUPDWLRQ DQG PDQDJHPHQW UHFRPPHQGDWLRQV WR IDUPHUV WKH SDPSKOHW PD\ DOVR SURYLGH D IUDPHZRUN IRU 1*2fV VXFK DV 3(6$&5( DQG 626 $PD]RQLD WR XVH ZKHQ FRQGXFWLQJ HQYLURQPHQWDO HGXFDWLRQ FRXUVHV IRU RWKHU UXUDO SURGXFHUVf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

PAGE 51

7KH PDQDJHPHQW UHFRPPHQGDWLRQ OLVWV JHQHUDWHG E\ GLIIHUHQW GLVFXVVLRQ JURXSV GLVFXVVHG EHORZf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fLQIRUPDOf RQIDUP UHVHDUFK ZLWK GLIIHUHQW OHJXPHV VSHFLHV DQG HQFRXUDJHG WKHVH SURGXFHUV WR VKDUH WKHLU UHVXOWV ZLWK RWKHU IDPLOLHV DV ZHOO DV ZLWK (0%5$3$ LQ 5LR %UDQFR ZKRVH UHVHDUFKHUV ZHUH LQ WKH SURFHVV RI LQLWLDWLQJ fQHZf VWXGLHV RI OHJXPHV LQ DJURIRUHVW XQGHUVWRULHV RQ IDUPV VXUURXQGLQJ 1RYD &DOLIRUQLD $OWKRXJK LW LV LPSRUWDQW WKDW SURGXFHUV EHOLHYH LQ WKH YDOLGLW\ RI WKHLU RZQ UHVHDUFK VXFK IDUPHULQLWLDWHG UHVHDUFK FRXOG DOVR EHQHILW IURP WUDLQLQJ E\ SURIHVVLRQDO UHVHDUFKHUV )RU WKLV UHDVRQ D VKRUW FRXUVH GHVLJQHG IRU IDUPHUV RQ fEDVLF ILHOG UHVHDUFK PHWKRGVf FRQGXFWHG LQ FROODERUDWLRQ ZLWK RUJDQL]DWLRQV VXFK DV 3(6$&5( DQG (0%5$3$ PD\ EH DQ H[WUHPHO\ HIIHFWLYH ZD\ WR LPSURYH DJURHFRV\VWHP PDQDJHPHQW 6XFK D FRXUVH ZRXOG SURYLGH DQ RSSRUWXQLW\ WR GLVFXVV Df WKH YDOXDEOH H[SHULHQFH IDUPHUV KDYH JDLQHG WKURXJK H[SHULPHQWDWLRQ RQ WKHLU RZQ DV ZHOO DV WKH VWUDWHJLHV WKH\ HPSOR\ Ef GLIIHUHQFHV IDUPHUV

PAGE 52

PD\ KDYH QRWHG EHWZHHQ WKHLU UHVHDUFK DQG WKDW FRQGXFWHG E\ WUDLQHG VFLHQWLVWV DQG F f WKH SURV DQG FRQV WR GLIIHUHQW LQYHVWLJDWLYH DSSURDFKHV :H FRXOG DOVR GLVFXVV ZK\ FRQWUROV DQG UHSOLFDWLRQ DUH XVHG LQ VFLHQWLILF UHVHDUFK DQG KRZ WKH\ PLJKW XVH WKHVH fWRROVf WR HQKDQFH WKHLU RZQ H[SHULPHQWDWLRQ LI WKH\ DUH QRW DOUHDG\ GRLQJ VR *UDVVURRWV GHYHORSPHQWDO RUJDQL]DWLRQV VXFK DV :RUOG 1HLJKERUV KDYH VXFFHVVIXOO\ WDXJKW LQGLJHQRXV UXUDO SHRSOH WR XVH PDWKHPDWLFV DQG VWDWLVWLFDO DQDO\VHV LQ WKH GHVLJQ DQG LQWHUSUHWDWLRQ RI RQIDUP UHVHDUFK 5XGGHOO DQG %HLQJROHD f +RZ WKH UHVXOWV RI RQIDUP UHVHDUFK FDQ EH VKDUHG ERWK IRUPDOO\ DQG LQIRUPDOO\f ZLWK IHOORZ IDUPHUV UHVHDUFKHUV DQG H[WHQVLRQLVWV ZRXOG DOVR EH D XVHIXO WRSLF IRU GLVFXVVLRQ 6XFK D FRXUVH FRXOG EH LQFOXGHG LQ DQ HQYLURQPHQWDO HGXFDWLRQ SURJUDP IRU UXUDO SURGXFHUV FRQGXFWHG E\ 1*2fV VXFK DV 3(6$&5( 7KH &KDOOHQJHV RI 3DUWLFLSDWLRQ 7KHUH LV D ORW WR EH OHDUQHG IURP DWWHPSWLQJ WR FRPELQH FRPPXQLW\ SDUWLFLSDWLRQ DQG GRFWRUDO ILHOG UHVHDUFK $OWKRXJK GHILQLWHO\ UHZDUGLQJ LW DGGHG UHVSRQVLELOLWLHV DV ZHOO DV ULVNV WR WKH UHVHDUFK SURFHVV ,QLWLDOO\ ZDV GHWHUPLQHG WR SUHVHQW fVFLHQWLILFf UHVHDUFK WR IDUPHUV DV VLPSO\ DV D VHULHV RI VWHSV PXFK OLNH SODQWLQJ DQG KDUYHVWLQJ D FURS ,Q WKH HQG WKHUH ZHUH PDQ\ fVWHSVf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

PAGE 53

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f 7KLV LV SDUW RI WKH SURFHVV WKH\ GLG QRW SDUWLFLSDWH LQ DQG DOO WKDW FRXOG EH GRQH ZDV HQFRXUDJH GLVFXVVLRQ DPRQJ SDUWLFLSDQWV DERXW ZKDW WKH\ ZHUH VHHLQJ DV ZH UHPRYHG WKH LQJURZWK FRUHV IURP WKH VRLO 3RWHQWLDOO\ WKLV SUHVHQWV D GLOHPPD EHFDXVH LW LV WKH UHVHDUFKHUfV UHVSRQVLELOLW\ WKDW VWXG\ UHVXOWV DUH QRW HUURQHRXVO\ LQWHUSUHWHG EXW RQH FDQQRW UHVRUW WR WKH DSSURDFK fWDNH P\ ZRUG IRU LW WKLV LV WKH ZD\ LW LVf LI RQH LV WR PDLQWDLQ D SDUWLFLSDWRU\ SURFHVV ,Q WKLV FDVH SHDFK SDOP URRW JURZWK ZDV JUHDWHU WKDQ WKDW RI FXSXDVVX LQ FRUHV EXULHG LQ DJURIRUHVW DOOH\V VXSSRUWLQJ WKH IDUPHUVf K\SRWKHVLV +RZHYHU LQ FRUHV EXUHG LQ DJURIRUHVW URZV EHQHDWK WKH GULSOLQH RI WKH FXSXDVVX FDQRS\ WKHUH ZDV QR VWDWLVWLFDOO\ VLJQLILFDQW GLIIHUHQFH LQ URRW JURZWK EHWZHHQ WKH WZR WUHH VSHFLHV 0RUHRYHU ZKHQ LW FDPH WR DVVHVVLQJ SKRVSKRUXV OLPLWDWLRQV XVLQJ WKH LQJURZWK FRUHV WKH GDWD ZHUH QRW HDVLO\ LQWHUSUHWHG HYHQ DIWHU VWDWLVWLFDO DQDO\VHV ZHUH SHUIRUPHG DQG WKH UHVXOWV SRLQWHG RXW VRPH PHWKRGRORJLFDO ZHDNQHVVHV RI WKH URRW LQJURZWK ELRDVVD\ &KDSWHU f 6LPLODU VLWXDWLRQV DUH QRW XQFRPPRQ LQ PDQ\ ILHOGV RI UHVHDUFK WKXV LW LV DQ LVVXH WKDW PXVW EH DGGUHVVHG ERWK SULRU WR UHVHDUFK LQLWLDWLRQ DQG WKURXJKRXW WKH HQWLUH SDUWLFLSDWRU\ SURFHVV 3HUKDSV LW ZDV PRUH SUREOHPDWLF LQ WKLV VWXG\ EHFDXVH RI WKH W\SH RI DJURHFRORJLFDO UHVHDUFK FRQGXFWHG ZKLFK FRQFHQWUDWHG

PAGE 54

RQ ELRORJLFDO SURFHVVHV DQG QRW WHFKQRORJ\ FUHDWLRQ RU HYDOXDWLRQ )RU H[DPSOH LQ PDQ\ nfRQIDUP WULDOVf IDUPHUV PD\ WHVW IHUWLOL]HU DSSOLFDWLRQV JHQHWLF YDULHWLHV HJ +LOGHEUDQG DQG 3RH\ f RU HYHQ SODQWLQJ ORFDWLRQV .DLQHU HW DO f )URP WKHVH W\SHV RI VWXGLHV IDUPHUV FDQ fSLFNf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f QRWHV WKDW ZH FDQ LPSURYH RXU FDSDELOLWLHV IRU SDUWLFLSDWRU\ UHVHDUFK LI ZH fDEDQGRQ IL[HG SDFNDJHV RI UHVHDUFK PHWKRGRORJ\ DQG EURDGHQ RXU KRUL]RQV WR LQFOXGH D ZLGH YDULHW\ RI SULQFLSOHV PHWKRGV DQG RWKHU SHRSOHVf ILHOG H[SHULHQFHf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

PAGE 55

KHDULQJ ZKDW WKH IDUPHUV KDG WR VD\ UHPHPEHU RQH GD\ LQ SDUWLFXODU ZKHQ ZDV DSSDOOHG WR UHDOL]H WKDW KDG EHHQ VR FRQFHUQHG ZLWK WKH GLIILFXOW ORJLVWLFV LQYROYHG ZLWK ILHOG ZRUN WKDW KDG QRW FRQFHQWUDWHG HQRXJK RQ P\ LQWHUDFWLRQ ZLWK WKH IDUPHUV 2QH PXVW FRQWLQXDOO\ DVN RQHVHOI fDUH SDUWLFLSDQWV UHDOO\ JDLQLQJ IURP WKH SURFHVV RU MXVW VXSSO\LQJ ODERU ODQG RU OXQFK"f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f KRXVHKROG GXUDEOH JRRGV VXFK DV IXUQLWXUH GLHVHO JHQHUDWRUV DQG VDWHOOLWH GLVKHVf LLf ODERU WR KHOS ZLWK IDUP DFWLYLWLHV DQG LLLf OLYHVWRFN HVSHFLDOO\ FDWWOH F PRWLYDWHG IDUPHUV WR RSHQ QHZ DUHDV RI IRUHVW HDFK \HDU IRU SHUHQQLDO FURS PRQRFXOWXUHV VXFK DV FRIIHH DQG SDOP KHDUWf EHFDXVH WKH\ DQWLFLSDWHG D IXWXUH GURS

PAGE 56

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fVKLIWLQJ FXOWLYDWLRQf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fLQWHQVLI\ SURGXFWLRQ RI RQH VSHFLHV E\ SODQWLQJ PRQRFXOWXUHVf 7DEOH f 7KLV WUDQVLWRU\ DSSURDFK WR SHUHQQLDO FURSSLQJ UHYHDOV IDUPHUVf DQ[LHWLHV DERXW VRLO IHUWLOLW\ DQG SHUKDSV D EDVLF GLVEHOLHI LQ WKH SRWHQWLDO IRU VXVWDLQHG SURGXFWLRQ E\ WUHHEDVHG DJURHFRV\VWHPV &RIIHH ZDV FXOWLYDWHG LQ D VLPLODU PDQQHU IURP WKH V WR PLG V LQ UHJLRQV RI VRXWKHDVWHUQ %UD]LO SUHYLRXVO\ FRYHUHG E\ WKH $WODQWLF IRUHVW /DDNNRQHQ f ,Q VWDWHV VXFK DV 0LQDV *HUDLV PRQRFXOWXUDO SODQWDWLRQV RI FRIIHH ZHUH SODQWHG RQ VORSHV FOHDUHG RI QDWLYH IRUHVW YHJHWDWLRQ :LWKRXW VRLO DPHQGPHQWV WKH SODQWDWLRQV ZHUH SURGXFWLYH IRU DQ DYHUDJH RI VHYHQ \HDUV EHIRUH WKH\ ZHUH DEDQGRQHG GXULQJ ZKLFK WLPH

PAGE 57

DGGLWLRQDO IRUHVW ZDV FOHDUHG IRU QHZ FRIIHH SODQWDWLRQV WKDW ZRXOG FRPH LQWR SURGXFWLRQ DERXW WKH WLPH WKH RWKHUV IDLOHG 'HDQ f 2QH 5(&$ IDUPHU IUDQNO\ DGPLWWHG WKDW LW ZDV D VKRUWDJH RI ODERU DQG QRW WKH SRWHQWLDO ORQJHYLW\ RI SHUHQQLDO FURSV WKDW NHSW KLP IURP FOHDULQJ DGGLWLRQDO IRUHVW &RQVWUDLQWV WR $JURIRUHVW 0DQDJHPHQW /DERU ZDV FLWHG E\ DOO KRXVHKROGV DV RQH RI WKH ODUJHVW FRQVWUDLQWV WR PRGLI\LQJ H[LVWLQJ DJURIRUHVW PDQDJHPHQW SUDFWLFHV )RU H[DPSOH WKH ODERU EXUGHQ LQFXUUHG ZKHQ FXWWLQJ FOLPELQJ OHJXPH 0DFXQD VSSf YLQHV IURP WKH FDQRSLHV RI FXSXDVVX WUHHV ZDV PHQWLRQHG DV D UHDVRQ IRU HOLPLQDWLQJ WKH WKULYLQJ 1IL[LQJ VSHFLHV IURP WKH V\VWHP 1HDUO\ HYHU\ IDUPHU KDG H[SHULPHQWHG ZLWK RWKHU fVKUXEf IRUPV RI OHJXPHV HJ 3XHUDULD VSSf KRZHYHU LQ PRVW SODQWDWLRQV WKH\ ZHUH OHIW WR JURZ XQSUXQHG LQ WKH XQGHUVWRU\ WKURXJKRXW WKH VHDVRQ EHFDXVH LW UHTXLUHG D ORW RI ZRUN WR FXW WKHP GRZQ 'XULQJ WKH GU\ VHDVRQ WKH GHDG OHJXPHV ZHUH YLHZHG DV D ILUH KD]DUG DQG IRU WKLV UHDVRQ PDQ\ IDUPHUV HUDGLFDWHG WKH VKUXEV ,QWHUHVWLQJO\ VRPH IDPLOLHV IRXQG LW OXFUDWLYH WR KDUYHVW WKH VHHGV RI VRPH OHJXPHV DQG VHOO WKHP WR EX\HUV LQWHUHVWHG LQ HVWDEOLVKLQJ OHJXPLQRXV FRYHU FURSV +RZHYHU E\ WKH WLPH WKH ILHOG VWXGLHV WRRN SODFH OHJXPHV KDG EHHQ HOLPLQDWHG IURP PDQ\ DJURIRUHVW SODQWDWLRQV EHFDXVH UHSODQWLQJ WKH OHJXPHV HYHU\ \HDU ZDV QRW IHDVLEOH IRU IDPLOLHV 8QIRUWXQDWHO\ WKH OHJXPH VSHFLHV PRVW VXFFHVVIXO DW UHHVWDEOLVKPHQW WKURXJK QDWXUDO UHVHHGLQJ ZDV 0DFXQD D VSHFLHV YLHZHG E\ IDUPHUV DV PRVW LPSUDFWLFDO IURP D PDQDJHPHQW VWDQGSRLQW )XUWKHUPRUH RWKHU LHJXPHV GLG QRW FRPSHWH ZHOO ZLWK WKH QDWLYH XQGHUVWRU\ KHUEDFHRXV YHJHWDWLRQ ZKLFK RIWHQ H[FHHGHG PHWHUV LQ KHLJKW EHIRUH LW ZDV FXW GRZQ DQG OHIW WR GHFRPSRVH )DPLOLHV XQGHUVWRRG WKDW WKH fZHHGVf LQ WKH DJURIRUHVW XQGHUVWRU\

PAGE 58

FRPSHWHG IRU QXWULHQWV DQG ZDWHU ZLWK WKH V\VWHPfV WUHH FRPSRQHQWV EXW JHQHUDOO\ KRXVHKROGV KDG RQO\ HQRXJK ODERU WR FXW GRZQ WKH KHUEDFHRXV XQGHUVWRU\ RQFH RU WZLFH D \HDU DW EHVW 2WKHU ODERULQWHQVLYH IDUP SURGXFWLRQUHODWHG DFWLYLWLHV LQFOXGHG DQQXDO FURS SURGXFWLRQ IRU KRXVHKROG FRQVXPSWLRQf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f $QRWKHU FRQVWUDLQW WR DJURIRUHVW PDQDJHPHQW ZDV D ODFN RI DFFHVV WR FKHPLFDO DQG RUJDQLF IHUWLOL]HUV DQG WHFKQLFDO LQIRUPDWLRQ DERXW WKHLU XVH %HFDXVH OLWWOH VWDWLRQ UHVHDUFK KDG EHHQ GRQH LQ WKH UHJLRQ RQ IHUWLOL]HU XVH LQ DOWHUQDWLYH FURSSLQJ V\VWHPV LH QRQDQQXDO FURSVf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f RULJLQDWLQJ IURP WKH KDUYHVW RI VPDOO EDVDO RIIVKRRWV IRU KHDUWRISDOP LQ WKH DJURIRUHVW 2SHUDWLRQDOO\ WKHVH UHVLGXHV ZHUH QRW VWUDWHJLFDOO\ SODFHG EXW OHIW WR GHFRPSRVH ZKHUH WKH\ IHOO $V PHQWLRQHG

PAGE 59

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nV XQUHOLDEOH HOHFWULFLW\ VXSSO\ UDLVHG WKH FRVW RI PDUNHWLQJ WKLV SURGXFW DQG WKXV ORZHUHG WKH SULFH IDUPHUV UHFHLYHG IURP WKH 5(&$ RUJDQL]DWLRQ )LQDQFLDO ORVVHV VXFK DV WKHVH PDGH IDUPHUV UHOXFWDQW WR LQYHVW SUHFLRXV UHVRXUFHV LQ PRUH LQWHQVLYH DJURIRUHVW PDQDJHPHQW SUDFWLFHV UHJDUGOHVV RI WKH V\VWHPfV SRWHQWLDO IRU VXVWDLQHG SURGXFWLRQ 0DQDJHPHQW 2SWLRQV *HQHUDWHG E\ )DQQHUV 5HIRUHVWDWLRQ WHDP $ YHU\ GHWDLOHG OLVW RI DJURIRUHVW PDQDJHPHQW RSWLRQV ZDV JHQHUDWHG E\ PHPEHUV RI 5(&$fV UHIRUHVWDWLRQ WHDP 7DEOH f ZKR ZHUH fWFQLFRVf RU IDUPHUV WUDLQHG WHFKQLFDOO\ WR KHOS RWKHU IDUPHUV 0RVW RI WKH UHFRPPHQGDWLRQV RQ WKLV WDEOH DUH SUHVHQWHG DV VWDWHG E\ IDUPHUV WUDQVODWHG IURP 3RUWXJXHVHf DOWKRXJK WKHUH DUH D IHZ LGHQWLILHG E\ LWDOLFVf WKDW VXJJHVWHG P\VHOI )URP SUHYLRXV IDUP YLVLWV LW ZDV DSSDUHQW WKDW PDQ\ KRXVHKROGV KDG SUHYLRXVO\ HPSOR\HG RU ZHUH FXUUHQWO\ SUDFWLFLQJ VRPH RI WKH RSWLRQV OLVWHG HVSHFLDOO\ XQGHU WKH fOHJXPLQRXV FRYHU FURSVf DQG fRUJDQLF PDWWHUf FDWHJRULHV 0RUHRYHU WKHVH SUDFWLFHV KDG EHHQ GLVFXVVHG UHSHDWHGO\ LQ VHVVLRQV OHG E\ P\VHOI 626 HGXFDWRUV DQG H[WHQVLRQ DJHQWV DQG WKH OLVWV GHPRQVWUDWHG WKDW SURGXFHUV ZHUH DZDUH RI

PAGE 60

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f GHVSLWH WKHLU EHQHILFLDO UROH LQ PDLQWDLQ SURGXFWLYLW\ 6RPH RSWLRQV VXFK DV WKH XVH RI OLPH DQG SKRVSKDWH URFNV ZHUH QRW YLHZHG DV IHDVLEOH EHFDXVH RI WKHLU H[SHQVH DQG LQDYDLODELOLW\ $QRWKHU UHFRPPHQGDWLRQ YLHZHG DV LPSUDFWLFDO ZDV IHOOLQJ WKH ODUJHU P LQ KHLJKWf SHDFK SDOP RIIVKRRWV DQG FXWWLQJ XS WKH VWHPV DQG OHDYHV IRU XVH DV PXOFK EHQHDWK WKH FXSXDVVX DQG %UD]LO QXW WUHHV VXJJHVWHG WKLV LQ UHVSRQVH WR FRPPHQWV PDGH E\ SURGXFHUV DERXW WKH IDFW WKDW GXULQJ DJURIRUHVW HVWDEOLVKPHQW PRVW IDUPHUV KDG DOORZHG WKH RIIVKRRWV WR JURZ YHU\ WDOO XS WR Pf QRW UHDOL]LQJ WKDW IUXLW DQG KHDUW KDUYHVW IURP WKHVH VWHPV ZRXOG EHFRPH GLIILFXOW LI QRW LPSRVVLEOH $OWKRXJK IHOOLQJ VRPH RI WKH ODUJHU RIIVKRRWV ZRXOG WKHRUHWLFDOO\ Df OLEHUDWH DQG fUHF\FOHf QXWULHQWV VWRUHG LQ fXQGHUXWLOL]HGf

PAGE 61

7DEOH 0DQDJHPHQW UHFRPPHQGDWLRQV IRU PDLQWDLQLQJ DJURIRUHVW VRLO IHUWLOLW\ DQG GHFUHDVLQJ URRW FRPSHWLWLRQ DPRQJ DJURIRUHVW FRPSRQHQWV JHQHUDWHG E\ PHPEHUV RI WKH 5(&$ UHIRUHVWDWLRQ WHDP GXULQJ D SDUWLFLSDWRU\ VHVVLRQ HQWLWOHG 1XWULHQW 5HPRYDO IURP $JURIRUHVWU\ 6\VWHPV KHOG RQ 6HSWHPEHU f 7UDQVODWHG IURP 3RUWXJXHVH LWDOLFV LQGLFDWH UHFRPPHQGDWLRQV VXJJHVWHG E\ UHVHDUFKHU *RDO RI 0DQDJHPHQW 3UDFWLFH 0DLQWDLQLQJ 6RLO )HUWLOLW\ 5HGXFLQJ 5RRW &RPSHWLWLRQ /HJXPLQRXV FRYHU FURSV LQ DJURIRUHVW XQGHUVWRUY 3ODQW OHJXPHV ZLWK EDFWHULDf WR SURPRWH 1IL[DWLRQ LE 3ODQW OHJXPHV LQ IDOORZ ILHOGVE 3ODQW OHJXPHV ZLWKRXW EXUQLQJ IDOORZ YHJHWDWLRQ &XW GRZQFXOWLYDWH OHJXPHV WR UHF\FOH RUJDQLF PDWWHU rE &XW GRZQFXOWLYDWH ZHHGV WR UHF\FOH RUJDQLF PDWWHUr 2UJDQLF PDWWHU LQ DJURIRUHVWUY V\VWHP 0DLQWDLQ DQ HIILFLHQW QXWULHQW F\FOH ZLWK JUHHQ FRYHU FURSV DQG WUHH FURSV E 'LYHUVLI\ SODQWDWLRQV ZLWK OHJXPHV QDWLYH WLPEHU WUHH VSHFLHV VKUXEV FRIIHH PHGLFLQDO mIH RWKHU QDWLYH KHUEDFHRXV SODQWVLE %ULQJLQFRUSRUDWH RUJDQLF PDWWHU IURP IRUHVWF EUDQFKHV mIH OHDYHV HWFf LQWR DJURIRUHVWU\ V\VWHP $SSO\ FRZ PDQXUH WR DJURIRUHVW VRLO $SSO\ SODQW UHVLGXHV HVSHFLDOO\ SDOP KHDUW KDUYHVW &RPSRVW SODQW UHVLGXHV )HUPHQW FXSXDVVX SRGV DW IDFWRU\ IRU FRPSRVW 0DLQWDLQ RUJDQLF PDWWHU OD\HU ZLWK ZHHGV t OHJXPHV rE ,QRUJDQLF LQSXWV 3KRVSKDWH URFNV LQ RUJDQLF PDWWHU OD\HU$SSO\ OLPH WR DGG FDOFLXP DQG ORZHU VRLO DFLGLW\ 'LUHFWHG DQG VSDULQJ DSSOLFDWLRQ RI FKHPLFDO IHUWLOL]HU 5HGXFH SHDFK SDOP RIIVKRRWV PDLQWDLQ RQO\ WKUHHff 5RRWV GLH ZLWK HOLPLQDWLRQ RI VWHPV" 7UDQVIHU QXWULHQWV VWRUHG LQ ELRPDVV WR VRLO ,QFUHDVH KDUYHVW RI SHDFK SDOP KHDUW 8VH UHVLGXHV IURP FXW SHDFK SDOP RIIVKRRWV DV JUHHQ PDQXUH EHQHDWK FXSXDVVX DQG %UD]LO QXI ,QWHQVLI\ SURGXFWLRQ RI RQH VSHFLHV E\ SODQWLQJ PRQRFXOWXUHV 3ODQW SHDFK SDOP IRU KHDUW SURGXFWLRQ LQ PRQRFXOWXUHVr (OLPLQDWH SHDFK SDOP LQ IXWXUH PL[HG FURSSLQJ V\VWHPVrE /DUJHU VSDFLQJ EHWZHHQ WUHHV LQ IXWXUH SODQWLQJVE 3ODQW PRQRFXOWXUDO SODQWDWLRQV RI FXSXDVVX GLVFXVVHG SRWHQWLDO SUREOHPV RI GLVHDVH DQG SHVWVfr $SSO\ UHVLGXHV IURP SDOP KHDUW KDUYHVW EHQHDWK FXSXDVVX 7UDQVIHU QXWULHQWV VWRUHG LQ SHDFK SDOP WR VRLO EHQHDWK FXSXDVVX 2ULHQW URRW JURZWK WRZDUG GHFRPSRVLQJ RUJDQLF PDWWHU fSUDFWLFHG RSHUDWLRQDOO\ E\ PDQ\ IDUPHUV ESUDFWLFHG H[SHULPHQWDOO\ E\ D IHZ IDUPHUV rUDUHO\ SUDFWLFHG GQRW SUDFWLFHG

PAGE 62

7DEOH 0DQDJHPHQW UHFRPPHQGDWLRQV IRU PDLQWDLQLQJ DJURIRUHVWU\ V\VWHP $)6f VRLO IHUWLOLW\ JHQHUDWHG 5(&$ IDUPHUV DWWHQGLQJ QXWULHQW F\FOLQJ PRGXOH RI 626 (FRORJ\ FODVV KHOG RQ 6HSWHPEHU f GXULQJ VPDOO JURXS H[HUFLVH 7UDQVODWHG IURP 3RUWXJXHVH 0DQDJHPHQW 5HFRPPHQGDWLRQV *URXS RQH *URXS WZR *URXS WKUHH *URXS IRXU 'LUHFWHG DSSOLFDWLRQ RI FRZ PDQXUHF 0DQDJH $)6 DGHTXDWHO\ WR PDLQWDLQ HIILFLHQW F\FOLQJ RI QXWULHQWV 2UJDQLF VRLO DPHQGPHQWV /HDYH ZRRG UHVLGXHV WR GHFRPSRVH RQ VRLOn *UHHQ OHJXPLQRXVf FRYHU FURS RI 0DFXQD VSSLE ,QFUHDVH WKH $)6 GLYHUVLW\ E\ SODQWLQJ QDWLYH WLPEHU WUHH VSHFLHVn /HJXPLQRXV FRYHU FURSV E 0DLQWDLQ fGHDGf FRYHU ZLWK SDOP UHVLGXHV WR HQULFK VRLOn )HUWLOL]DWLRQ ZLWK OHJXPHV LQ PRVW SUDFWLFDO PDQQHUF )HUWLOL]DWLRQ ZLWK RUJDQLF PDWWHU 1DWLYH WLPEHU WUHH VSHFLHVn 3ODQW QDWLYH WLPEHU WUHH VSHFLHV WR DGG RUJDQLF PDWWHUr 5HGXFH URRW FRPSHWLWLRQ E\ HOLPLQDWLQJ ZHHGV DQG ROGHU SHDFK SDOP VWHPVn 1XWULHQW H[SRUW "f &RQWURO QXWULHQW UHPRYDO 3ODQW OHJXPHV WR IXUQLVK QLWURJHQ nE /HDYH RUJDQLF PDWWHU ZKHQ KDUYHVWLQJ IUXLWV WR PLQLPL]H LPSRYHULVKPHQW RI VRLO 5HGXFH FRPSHWLWLRQ E\n FRQWUROOLQJ XQGHUVWRU\ ZHHGV $SSO\ DQLPDO PDQXUH WR LPSURYH SODQW SURGXFWLRQ nSUDFWLFHG RSHUDWLRQDOO\ E\ PDQ\ IDUPHUV ESUDFWLFHG H[SHULPHQWDOO\ E\ D IHZ IDUPHUV rUDUHO\ SUDFWLFHG GQRW SUDFWLFHG

PAGE 63

DERYHJURXQG ELRPDVV DQG Ef SRWHQWLDOO\ GHFUHDVH LQWUDVSHFLILF FRPSHWLWLRQ E\ GHFUHDVLQJ SHDFK SDOP RYHUVWRU\ ELRPDVV SDUWLFLSDQWV FRQFOXGHG WKDW WKH SUDFWLFH ZRXOG EH ERWK ODERU LQWHQVLYH DQG GDQJHURXV WR IDUPHUV SRVVLEO\ GDPDJLQJ WR DJURIRUHVW FRPSRQHQWV LI RWKHU WUHHV ZHUH VWUXFN E\ IDOOHQ SDOP VWHPVf DQG ZRXOG QRW UHVXOW LQ KLJKHU SDOP KHDUW \LHOGV VLQFH WKH ODUJHU VWHPV QR ORQJHU SURGXFHG fWHQGHUf DSLFDO EXGV 3DUWLFLSDQWV GLG DJUHH WKDW DQ HIIRUW VKRXOG EH PDGH WR PDLQWDLQ RQO\ WKUHH VWHPV SHU SDOP LQ \RXQJHU SODQWDWLRQV WZR \RXQJ RIIVKRRWV IRU KHDUW KDUYHVW DQG WKH ODUJHU fPRWKHUf VWHP IRU IUXLW SURGXFWLRQ 7KH\ DOVR FRQFOXGHG WKDW LW ZRXOG EH IHDVLEOH WR SODFH DV PXOFK WKH UHVLGXHV RI \RXQJ SDOP RIIVKRRWV KDUYHVWHG IRU KHDUW EHQHDWK FXSXDVVX DQG %UD]LO QXW FDQRSLHV 5(&$ IDUPHUV 'HVSLWH WKH IDFW WKDW WKH SURGXFHUV FRPSULVLQJ WKH UHIRUHVWDWLRQ WHDP KDG DFFHVV WR JUHDWHU WHFKQLFDO WUDLQLQJ WKH PDQDJHPHQW RSWLRQ OLVWV JHQHUDWHG E\ fXQWUDLQHGf 5(&$ IDUPHUV LQ VPDOO JURXSV GXULQJ WKH 626 QXWULHQW F\FOLQJ PRGXOH ZHUH YHU\ VLPLODU WR WKRVH OLVWHG E\ WKH fWFQLFRVf 7DEOH f 0RUHRYHU UHFRPPHQGDWLRQV ZHUH VLPLODU DPRQJ WKH IRXU JURXSV LH XVH RI OHJXPLQRXV FRYHU FURSV DQG RUJDQLF UHVLGXHV DJURIRUHVW GLYHUVLILFDWLRQ ZLWK QDWLYH WLPEHU VSHFLHV DQG FRZ PDQXUH DSSOLFDWLRQ 7KH VWUHQJWK LQ WKHVH OLVWV LV WKDW WKH\ ZHUH PDGH E\ WKH SURGXFHUV WKHPVHOYHV RUJDQL]HG LQ VPDOO JURXSV VR WKDW WKHLU LQGHSHQGHQW UHVSRQVHV LQGLFDWH WKDW WKHVH SUDFWLFHV ZHUH FRPPRQO\ UHFRJQL]HG E\ IDUPHUV DV EHQHILFLDO WR VXVWDLQLQJ DJURHFRV\VWHP SURGXFWLYLW\ 7KH fDJURIRUHVW GLYHUVLILFDWLRQf RSWLRQ DOVR GHPRQVWUDWHG WKH SURGXFHUVf NQRZOHGJH RI LPSURYHG RUJDQLF PDWWHU DQG QXWULHQW F\FOLQJ LQ VWUXFWXUDOO\ GLYHUVH WUHHEDVHG V\VWHPV DQG WKHLU UROH LQ PDLQWDLQLQJ VRLO IHUWLOLW\

PAGE 64

&RPSDUHG WR WKH fWFQLFRf JURXS KRZHYHU LW ZDV PRUH GLIILFXOW WR HOLFLW IURP WKHVH SURGXFHUV ZKLFK SUDFWLFHV ZHUH WUXO\ IHDVLEOH DQG ZKLFK ZHUH LPSUDFWLFDO :KHQ WKH VPDOO JURXSV ZHUH UHXQLWHG WR fUHSRUW RXWf WKHLU OLVWV ZH GLVFXVVHG PDQDJHPHQW RSWLRQV LQ JUHDWHU GHSWK IRU H[DPSOH KRZ OHJXPHV FRXOG EH SUXQHG WR SURYLGH PXOFK DQG GHFUHDVH FRPSHWLWLRQ ,Q UHWURVSHFW LW PLJKW KDYH EHHQ YHU\ XVHIXO WR LQWURGXFH WKH fWFQLFRnVf PDQDJHPHQW RSWLRQV OLVW WR VHH LI WKLV JURXS ZRXOG FRPPHQW RQ WKH IHDVLELOLW\ RI WKH UHFRPPHQGDWLRQV PDGH E\ WKH UHIRUHVWDWLRQ WHDP )XUWKHUPRUH WKH fXQWUDLQHGnf SURGXFHUV PD\ KDYH EHHQ OHVV KHVLWDQW WR FRPPHQW RQ WKH SUDFWLFDO DSSOLFDWLRQ RI WKH PDQDJHPHQW RSWLRQV WKH\ KDG FLWHG KDG WKH\ VHHQ WKH VLPLODULW\ EHWZHHQ WKHLU OLVWV DQG WKDW PDGH E\ WKH fWFQLFRVf 0RVW SDUWLFLSDQWV ZHUH DZDUH RI PDQDJHPHQW RSWLRQV WKDW FRXOG KHOS VXVWDLQ DJURIRUHVW SURGXFWLYLW\ LQ WKH IXWXUH
PAGE 65

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f $OWKRXJK QRW DQ fLGHDOf OLVW RI PDQDJHPHQW SUDFWLFHV ZRUNLQJ ZLWKLQ WKH IUDPHZRUN SURYLGHG E\ WKH IDUPHUJHQHUDWHG OLVWV GRHV RIIHU WKH PRVW SURPLVLQJ DSSURDFK WR PD[LPL]LQJ WKH DJURIRUHVWVf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

PAGE 66

&+$37(5 3+263+2586 $9$,/$%,/,7< $1' ),1( 5227 352/,)(5$7,21 ,1 $0$=21,$1 $*52)25(676 6,; <($56 )2//2:,1* )25(67 &219(56,21 ,QWURGXFWLRQ 6LQFH WKH ODWH nV WKH UDWH RI GHIRUHVWDWLRQ LQ WKH %UD]LOLDQ $PD]RQ LV DPRQJ WKH KLJKHVW LQ WKH ZRUOG UDLVLQJ FRQFHUQ EHFDXVH RI LWV SRWHQWLDOO\ QHJDWLYH FRQVHTXHQFHV IRU JOREDO FOLPDWH K\GURORJ\ ELRJHRFKHPLFDO F\FOHV DQG ELRGLYHUVLW\ 6NROH DQG 7XFNHU f :KLOH D JUHDW VKDUH RI WKH GHVWUXFWLRQ LV DWWULEXWHG WR ODUJHVFDOH FDWWOH UDQFKLQJ QHDUO\ RQH WKLUG RI IRUHVW FOHDULQJ LV XQGHUWDNHQ E\ WKH UHJLRQfV JURZLQJ SRSXODWLRQ RI VPDOO IDQQHUV SULPDULO\ IRU WKH VKLIWLQJ FXOWLYDWLRQ RI DQQXDO FURSV )HDPVLGH 6NROH HW DO 6HUU£R HW DO f $V RQH RI PDQ\ VWUDWHJLHV WR GHFUHDVH GHIRUHVWDWLRQ UDWHV LW KDV EHHQ SURSRVHG WKDW DGGLQJ SHUHQQLDO FURSV WR DJULFXOWXUDO V\VWHPV PD\ UDLVH ODQG SURGXFWLYLW\ DQG VXEVHTXHQWO\ DOORZ VPDOO IDUPHUV WR PHHW IRRG GHPDQGV ZLWK OHVV IRUHVW FOHDULQJ 6DQFKH] HW DO $QGHUVRQ 6PLWK f ,QFUHDVLQJO\ RYHU WKH SDVW GHFDGH DV WKH SUDFWLFH RI VKLIWLQJ FXOWLYDWLRQ KDV SURYHQ HFRQRPLFDOO\ XQYLDEOH LQ WKH UHJLRQfV QXWULHQWSRRU VRLOV $PD]RQLDQ IDUPHUV KDYH EHJXQ DGRSWLQJ SHUHQQLDO FURSEDVHG DJURIRUHVWU\ V\VWHPV ODUJHO\ EHFDXVH PDQ\ DJURIRUHVW SURGXFWV DUH KLJK YDOXH FDVK FURSV WKDW RIWHQ UHTXLUH OHVV ODERU WR SURGXFH 6PLWK HW DO f 6RPH VWXGLHV SRLQW RXW WKDW WKHVH DJURIRUHVWV FDQ EH PRUH HFRORJLFDOO\ VXVWDLQDEOH WKDQ DQQXDO FURSSLQJ V\VWHPV EHFDXVH WKH ORQJHYLW\ RI WUHHEDVHG HFRV\VWHPV SURPRWHV D PRUH FORVHG F\FOLQJ RI RUJDQLF PDWWHU DQG QXWULHQWV D NH\ IDFWRU IRU

PAGE 67

WKH JURZWK RI QDWLYH IRUHVWV LQ ZHDWKHUHG $PD]RQLDQ VRLOV 6DQFKH] HW DO (ZHO f 'HVSLWH PRUH HIILFLHQW QXWULHQW F\FOLQJ RIIHUHG E\ WUHHEDVHG DJURHFRV\VWHPV PDLQWDLQLQJ SKRVSKRURXV 3f DYDLODELOLW\ WR SODQWV JURZLQJ LQ WURSLFDO 8OWLVROV DQG 2[LVROV LV SUREOHPDWLF IRU D QXPEHU RI UHDVRQV :KLOH QLWURJHQ IL[DWLRQ DQG UDLQIDOO GHSRVLWLRQ PD\ VHUYH DV VLJQLILFDQW H[WHUQDO VRXUFHV RI 1 WKHUH LV QR FRPSDUDEOH DWPRVSKHULF LQSXW WKDW FDQ GUDPDWLFDOO\ LQFUHDVH 3 DYDLODELOLW\ LQ 3GHILFLHQW KDELWDWV 6FKOHVLQJHU f 7KXV WKH DPRXQW RI 3 F\FOLQJ WKURXJK QDWXUDO DQG ORZ LQSXW DJULFXOWXUDO V\VWHPV LV GHWHUPLQHG E\ WKH LQLWLDO VWDWH RI WKH YDULRXV SRROV FRPSULVLQJ WKH VRLO 3 VWRFN 6WHYHQVRQ f 3KRVSKRUXV XSWDNH RFFXUV IURP WKH PRVW YXOQHUDEOH VRLO SRRO IUHH SKRVSKDWH LRQV GHVRUEHG RU GLVVROYHG IURP WKH VRLO VROLG SKDVH RIWHQ UHIHUUHG WR DV fODELOHf 3 )DUGHDX f :KLOH WKLV fODELOHf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f ,Q WKHVH FRQGLWLRQV PLQHUDOL]DWLRQ RI RUJDQLF 3 EHFRPHV LQFUHDVLQJO\ LPSRUWDQW WR 3 QXWULWLRQ 6WHZDUW DQG 7LHVVHQ &URVV DQG 6FKOHVLQJHU f DV GR P\FRUUKL]DO DVVRFLDWLRQV DQG $O DQG )HVRLXELOL]LQJ URRW H[XGDWHV WKDW LQFUHDVH 3 DYDLODELOLW\ WR SODQWV &KDSLQ )R[ HW DO %RO£Q f

PAGE 68

1RQHWKHOHVV QXPHURXV VWXGLHV SURYLGH HYLGHQFH WKDW WURSLFDO IRUHVW SURGXFWLYLW\ LV 3OLPLWHG 9LWRXVHN DQG 6DQIRUG $WWLZLOO DQG $GDPV f 7KXV PDLQWDLQLQJ 3 DYDLODELOLW\ LQ ELRORJLFDOO\ DQG VWUXFWXUDOO\ OHVV GLYHUVH DJURIRUHVWU\ V\VWHPV XQGHUJRLQJ UHSHDWHG QXWULHQW UHPRYDO ZLWK FURS KDUYHVWV LV D GLOHPPD FHUWDLQ WR IDFH $PD]RQLDQ ODQG PDQDJHUV 7KH SUREOHP LV IXUWKHU DJJUDYDWHG E\ WKH IDFW WKDW PDQ\ IDUPHUV KDYH OLPLWHG DFFHVV WR FKHPLFDO IHUWLOL]HUV DQG OLWWOH H[SHULHQFH XVLQJ WKH ODUJH LQSXWV RI RUJDQLF UHVLGXHV UHFRPPHQGHG WR PDLQWDLQ VRLO IHUWLOLW\ HJ 1LFKRODLGHV HW DO 6]RWW HW DO f 6WXGLHV RI ORZ LQSXW DQQXDO FURSSLQJ KDYH VKRZQ WKDW ZLWK FRQWLQXHG KDUYHVW FDWLRQ OHDFKLQJ DQG VRLO DFLGLILFDWLRQ 3 DYDLODELOLW\ PD\ GHFUHDVH WR WKH H[WHQW WKDW RUJDQLF PDWWHU GHFRPSRVLWLRQ 1 PLQHUDOL]DWLRQ DQG 1IL[DWLRQ LV OLPLWHG EHFDXVH RI VRLO IDXQD DQG EDFWHULD VHQVLWLYLW\ WR 3 GHILFLHQF\ (ZHO &UHZV f &ULWLFDO WR DGGUHVVLQJ WKH SUREOHP RI 3 PDLQWHQDQFH LQ $PD]RQLDQ WUHHEDVHG DJURHFRV\VWHPV LV D NQRZOHGJH RI f KRZ 3 G\QDPLFV DUH DOWHUHG ZKHQ QDWLYH WHUUD ILUPH IRUHVW LV FRQYHUWHG WR DJURIRUHVW DQG f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f &XHYDV DQG 0HGLQD f XVHG URRW SUROLIHUDWLRQ LQ QXWULHQW HQULFKHGLQJURZWK FRUHV DV D ELRDVVD\ WR LQIHU QXWULHQW OLPLWDWLRQV WR ILQH URRW JURZWK LQ $PD]RQLDQ IRUHVWV 5DLFK HW DO f GHPRQVWUDWHG WKDW WKLV PHWKRG FRXOG EH XVHG WR

PAGE 69

LGHQWLI\ VSHFLILF QXWULHQW OLPLWDWLRQV WR DERYHJURXQG IRUHVW SURGXFWLYLW\ E\ FRPSDULQJ URRW SUROLIHUDWLRQ UHVSRQVH LQ QXWULHQWHQULFKHG FRUHV WR SUHYLRXV IRUHVW IHUWLOL]DWLRQ VWXGLHV ,W LV JHQHUDOO\ DFFHSWHG WKDW PDQ\ FURS SODQWV GR SUROLIHUDWH LQ QXWULHQWULFK SDWFKHV EXW VWXGLHV KDYH VKRZQ WKDW QXWULHQWGHILFLHQW SODQWV H[KLELW D JUHDWHU SUROLIHUDWLRQ UHVSRQVH WKDQ QXWULHQW VXIILFLHQW SODQWV &DOGZHOO f )RU H[DPSOH 2VWHUWDJ f IRXQG WKDW URRW JURZWK RI WURSLFDO IRUHVW WUHHV HVWDEOLVKHG LQ 3SRRU VRLOV ZDV JUHDWHU LQ UHVSRQVH WR 3 IHUWLOL]DWLRQ WKDQ WKH VDPH IRUHVW W\SHV JURZLQJ LQ OHVV 3OLPLWHG VRLOV ,Q 3GHILFLHQW KDELWDWV URRWV DQG DVVRFLDWHG P\FRUUKL]DH PXVW JURZ WR 3 VRXUFHV DV SKRVSKDWH FRQFHQWUDWLRQV EHFRPH GHSOHWHG DURXQG WKH UKL]RVSKHUH EHFDXVH 3 GLIIXVLRQ WKURXJK WKH VRLO VROXWLRQ LV VORZ 1\H DQG 7LQNHU f 7KXV URRW SUROLIHUDWLRQ LQ UHVSRQVH WR 3 PLFURVLWH HQULFKPHQW FRXOG EH DQ HIIHFWLYH WRRO IRU DVVHVVLQJ 3 OLPLWDWLRQV WR HFRV\VWHP SURGXFWLYLW\ DV ZHOO DPRQJ VSHFLHV ZLWKLQ D V\VWHP JURZLQJ LQ 3SRRU $PD]RQLDQ VRLOV 7KH REMHFWLYHV RI RXU VWXG\ ZHUH WKUHHIROG )LUVW UHDGLO\H[WUDFWDEOH LQRUJDQLF DQG RUJDQLF 3 SRROV DV ZHOO DV RWKHU FKHPLFDO SURSHUWLHV ZHUH FRPSDUHG EHWZHHQ DJURIRUHVW DQG DGMDFHQW QDWLYH IRUHVW VRLOV WR GHWHUPLQH KRZ VKRUWWHUP \HDUVf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

PAGE 70

ZKR ZHUH FRQFHUQHG DERXW ZKDW WKH\ SHUFHLYHG WR EH DJJUHVVLYH URRW FRPSHWLWLRQ E\ WKH DJURIRUHVWfV SDOP FRPSRQHQW 0HWKRGV 7KH 6WXG\ $UHD 7KH VWXG\ ZDV FRQGXFWHG RQ HLJKW IDUPV ZLWKLQ D NP UDGLXV IURP WKH WRZQ RI 1RYD &DOLIRUQLD D UXUDO FRPPXQLW\ ZKLFK OLHV RQ WKH ERUGHU RI WKH %UD]LOLDQ VWDWHV RI $HU DQG 5RQGQLD LQ WKH ZHVWHUQ $PD]RQ %DVLQ r: r6f 7KH OLIH ]RQH LQ WKLV UHJLRQ LV KXPLG PRLVW WURSLFDO IRUHVW +ROGULGJH f DQG WKH QDWLYH QRQIORRGHG WHUUD ILUPH YHJHWDWLRQ FRPSULVHV ERWK GHFLGXRXV DQG HYHUJUHHQ EURDGOHDI WUHH VSHFLHV $YHUDJH DLU WHPSHUDWXUH LV r & DQG PHDQ DQQXDO UDLQIDOO RYHU WKH ODVW \HDUV LV DSSUR[LPDWHO\ PP ZLWK D WKUHH PRQWK GU\ SHULRG RFFXUULQJ IURP -XQH WKURXJK $XJXVW 8)$& XQSXEOLVKHGf 7KH UHJLRQfV WRSRJUDSK\ LV VOLJKWO\ XQGXODWLQJ DQG VRLOV DUH SUHGRPLQDWHO\ 8OWLVROV DQG 2[LVROV 6RPEURHN 6RX]D f 6RLOV IURP WKH VWXG\ VLWHV DUH DFLGLF S+ f ZLWK DQ HIIHFWLYH FDWLRQ H[FKDQJH FDSDFLW\ OHVV WKDQ FPRO NJ FOD\n KLJK OHYHOV RI H[FKDQJHDEOH DOXPLQXP !b $ VDWXUDWLRQf DQG SHUFHQW RU PRUH FOD\ LQ WKH WRS FP 7DEOH f 7KHVH SURSHUWLHV DUH FRQVLVWHQW ZLWK 2[LVROV RI WKH 8VWR[ VXERUGHU YDQ :DPEHNH f &RORQLVW IDUPODQG KROGLQJV LQ WKH UHJLRQ DUH W\SLFDOO\ KHFWDUHV KDOI RI ZKLFK DUH PDLQWDLQHG LQ SULPDU\ IRUHVW DV GLFWDWHG E\ %UD]LOLDQ ODZ ,%*( f /DQG XVH LQFOXGHV OLYHVWRFN SDVWXUH DQQXDO DQG SHUHQQLDO FURSV KRPHJDUGHQV DQG IRUHVW H[WUDFWLRQ

PAGE 71

7DEOH 6RLO SURSHUWLHV s RQH 6(f LQ HLJKW DJURIRUHVWV DQG DGMDFHQW QDWLYH IRUHVWV DW DQG FP GHSWK Q f FP FP 3DLUHG WWHVW 6RLO 3URSHUW\ $JURIRUHVW )RUHVW $JURIRUHVW )RUHVW S YDOXHVn E\ VRLO GHSWK 6DQG bf s s s s 6LOW bf s s s s FP &OD\ bf s s s s 3+ s s s s FP 2UJDQLF PDWWHU bf s s s s 0O &D PJ NJ ffE s s s s FP 0O 0J PJ NJ nf s s s s FP 0O PJ NJf s s s s 0O 3L PJ NJnf s s s s FP &D FPRONJf s s 0J FPRONJf s s FPRONJf s s $ FPRONJf s s (&(&FPRONJffF s s $ VDW bf s s

PAGE 72

7DEOH FRQWLQXHG FP FP 3DLUHG WWHVW 6RLO 3URSHUW\ S YDOXHVn $JURIRUHVW )RUHVW $JURIRUHVW )RUHVW E\ VRLO GHSWK 7RWDO & J NJf s s 7RWDO 1 J NJf s s 7RWDO 3 J NJf s s r 3 YDOXHV QRW UHSRUWHG E0HKOLFKO H[WUDFWDEOH HOHPHQWV F (IIHFWLYH FDWLRQ H[FKDQJH FDSDFLW\ VXP RI EDVH FDWLRQV H[FKDQJHDEOH $Of FP FP 3DLUHG WWHVW 6RLO 3URSHUW\ $JURIRUHVW )RUHVW $JURIRUHVW )RUHVW S YDOXHV r E\ VRLO GHSWK 0O 3L PJ NJf s s s s FP %UD\ 3L PJ NJnf s s s s FP 5HVLQ 3L PJ NJnf s s s s FP %LFDUE 3L PJ NJf s s %LFDUE 3R PJ NJf s s FP n 3 YDOXHV QRW UHSRUWHG

PAGE 73

7KH HLJKW IDUPV LQFOXGHG LQ WKLV VWXG\ ZHUH YROXQWHHUHG E\ PHPEHUV RI WKH SURGXFHUVn RUJDQL]DWLRQ 3URMHWR 5(&$ (FRQRPLF 3DUWQHUVKLS IRU 5HIRUHVWDWLRQf ,Q WKH ODWH fV WKH JURXS HVWDEOLVKHG D SHUHQQLDO FURSEDVHG FRPPHUFLDO SODQWDWLRQ DJURIRUHVWU\ V\VWHP RQH WR WZR KHFWDUHV LQ VL]H RQ PRUH WKDQ IDUPV 7KH V\VWHP LV WZRWLHUHG GRPLQDWHG E\ DQ XSSHU FDQRS\ RI SHDFK SDOP %DGULV *DHVLSDHV .XQWKf D PXOWLVWHPPHG PRQRFRW FXOWLYDWHG IRU FHQWXULHV E\ $PHULQGLDQV WKURXJKRXW $PD]RQLD &OHPHQW f 7KH PLGGOH FDQRS\ LV IRUPHG E\ FXSXDVVX 7KHREURPD JUDQGLIORUXP :LOOGHQRZ H[ 6SUHQJHOf 6FKXPDQQf D VKDGHWROHUDQW EURDG OHDI WUHH QDWLYH WR QRQIORRGHG IRUHVWV RI WKH FHQWUDO $PD]RQ %DVLQ 9HQWXULHUL f $ WKLUG FRPSRQHQW RI WKH V\VWHP LV %UD]LO QXW ^%HUWKROOHWLD H[FHOVD +XPE t %RQSf D EURDG OHDI XSSHU FDQRS\ GRPLQDQW DOVR D QDWLYH WR WKH UHJLRQfV IRUHVWV 0RUL DQG 3UDQFH f 7KH DJURIRUHVWfV SULQFLSDO SURGXFWV LQFOXGH FXSXDVVX SXOS SHDFK SDOP IUXLW DQG VHHG DQG KHDUWRISDOP DOO RI ZKLFK DUH KDUYHVWHG DV HDUO\ DV WKUHH \HDUV DIWHU V\VWHP HVWDEOLVKPHQW %UD]LO QXWV DUH DOVR DQ LPSRUWDQW FDVK FURS WKURXJKRXW $PD]RQLD .DLQHU HW DO LQ SUHVVf KRZHYHU DW WKH WLPH RI WKH VWXG\ WKLV VSHFLHV KDG QRW \HW EHJXQ WR SURGXFH IUXLW 7\SLFDOO\ WKH DJURIRUHVW ZDV HVWDEOLVKHG E\ FXWWLQJ DQG EXUQLQJ QDWLYH IRUHVW YHJHWDWLRQ DQG LQWHUSODQWLQJ RQH\HDUROG FXSXDVVX SHDFK SDOP DQG %UD]LO QXW VHHGOLQJV DW D VSDFLQJ RI [ PHWHUV WR FRPSOHWH VWRFNLQJ GHQVLWLHV RI DQG WUHHV KDn UHVSHFWLYHO\ 'XULQJ WKH ILUVW \HDU RI HVWDEOLVKPHQW OHJXPLQRXV FRYHU FURSV ZHUH SODQWHG LQ DJURIRUHVW URZV +RZHYHU OHJXPHV ZHUH ODUJHO\ HUDGLFDWHG IURP WKH DJURIRUHVWV LQ WKH \HDUV IROORZLQJ HVWDEOLVKPHQW DQG QDWLYH XQGHUVWRU\ KHUEDFHRXV YHJHWDWLRQ ZDV FXW GRZQ DQG OHIW WR GHFRPSRVH WZLFH DQQXDOO\ 6LQFH DJURIRUHVW HVWDEOLVKPHQW JUD]LQJ OLYHVWRFN

PAGE 74

ZHUH H[FOXGHG IURP WKH V\VWHP QRU ZHUH FKHPLFDO IHUWLOL]HUV DSSOLHG RQ WKH HLJKW IDUPV XQGHU VWXG\ )DUPHU 3DUWLFLSDWLRQ 7KH UHVHDUFK ZDV FDUULHG RXW XVLQJ D SDUWLFLSDWRU\ )HOGVWHLQ DQG -LJJLQV f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f ZLWK QLQH IDPLOLHV ILYH IRFXV JURXS GLVFXVVLRQV ZLWK 5(&$ IDUPHUV  SDUWLFLSDQWV HDFKf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

PAGE 75

r SUHYLRXVO\EXUQHG YHJHWDWLRQ 7KHUH ZHUH QR REVHUYHG WRSRJUDSKLF GLIIHUHQFHV EHWZHHQ SDLUHG IRUHVW DQG DJURIRUHVW SORWV RQ DQ\ RI WKH IDUPV 6RLO 6DPSOLQJ DQG $QDO\VHV 2QH ZHOOPL[HG FRPSRVLWH VRLO VDPSOH FRQVLVWLQJ RI UDQGRPO\ ORFDWHG FRUHV ZDV WDNHQ DW WZR GHSWKV FP DQG FPf IURP ERWK WKH DJURIRUHVW DQG DGMDFHQW QDWLYH IRUHVW SORWV RQ DOO HLJKW IDUPV 7KH VDPSOHV ZHUH DLU GULHG SDVVHG WKURXJK D PP PHVK VLHYH DQG KDQGSLFNHG IUHH RI ILQH URRWV SULRU WR FKHPLFDO DQDO\VHV 0HKOLFK 0Of FDWLRQV DQG 3 DW DQG FP VRLO GHSWK ZHUH H[WUDFWHG E\ VKDNLQJ J PLQHUDO VRLO LQ PO RI GLOXWH GRXEOH DFLG 1 +&/ LQ 1 +6f IRU ILYH PLQXWHV 3HUFHQW RUJDQLF PDWWHU 20f ZDV TXDQWLILHG XVLQJ WKH :DONOH\%ODFN GLFKURPDWH SURFHGXUH 1HOVRQ DQG 6RPPHUV f DQG S+ ZDV PHDVXUHG XVLQJ D %HFNPDQ S+ PHWHU DQG HOHFWURGH LQ D ZDWHU WR VRLO UDWLR $ SDUWLFOH VL]H DQDO\VLV ZDV SHUIRUPHG XVLQJ WKH SLSHW PHWKRG .LOPHU DQG $OH[DQGHU f ,Q WKH WRS FP RI VRLO H[FKDQJHDEOH EDVH FDWLRQV .? &D DQG 0Jrf DQG DOXPLQXP $Of ZHUH PHDVXUHG DIWHU H[WUDFWLQJ J VRLO LQ PO 0 1+2$F DQG 0 .& UHVSHFWLYHO\ IRU KRXUV 7RWDO 3 LQ PJ ILQHO\ JURXQG VRLO ZDV H[WUDFWHG XVLQJ D FRQFHQWUDWHG +6+ GLJHVW DW r& IRU WZR KRXUV ,RQ FRQFHQWUDWLRQV LQ WKH ILOWHUHG H[WUDFWV ZHUH PHDVXUHG XVLQJ LQGXFWLYHO\ FRXSOHG DUJRQ SODVPD ,&$3f VSHFWURVFRS\ 7RWDO VRLO QLWURJHQ 1f DQG FDUERQ & f ZHUH DQDO\]HG DIWHU 'XPDV IODVKf FRPEXVWLRQ 1LWURJHQ $QDO\]HU &DUOR (UED 6WUXPHQWD]LRQH 0LODQ ,WDO\f ,Q DGGLWLRQ WR 0O SKRVSKRUXV UHDGLO\H[WUDFWDEOH 3 ZDV PHDVXUHG XVLQJ DQLRQ H[FKDQJH UHVLQV WR H[KDXVWLRQ WKH %UD\ 3, %UD\ DQG .XUW] f DQG VRGLXP ELFDUERQDWH

PAGE 76

SURFHGXUHV 2OVHQ DQG 'HDQ f $OWKRXJK WKHVH IRXU H[WUDFWV DUH DOO XVHG WR TXDQWLI\ UHDGLO\H[WUDFWDEOH 3 WKH\ VROXELOL]H YDU\LQJ TXDQWLWLHV RI WKH fODELOHf SRRO DV D UHVXOW RI GLIIHUHQW FKHPLFDO UHDFWLRQV 7KH GLOXWH PL[HG DFLG LQ WKH 0HKOLFK H[WUDFW GLVVROYHV $ DQG )H SKRVSKDWHV 2OVHQ DQG 6RPPHUV f DQG LV XVHG DV DQ LQGH[ IRU 3 DYDLODELOLW\ LQ 2[LVROV WKURXJKRXW %UD]LO $QLRQ H[FKDQJH UHVLQV GHVRUE H[FKDQJHDEOH 3L ZLWKRXW GUDVWLF FKDQJHV LQ S+ RU RWKHU VRLO FKHPLVWU\ +LJK FRUUHODWLRQV RI UHVLQH[WUDFWDEOH 3 ZLWK SODQW XSWDNH VXJJHVWV WKDW UHVLQ H[WUDFWV PRUH FORVHO\ VLPXODWH WKH SK\VLFDO DFWLRQ RI SODQW URRWV 0F.HDQ DQG :DUUHQ f 7KH %UD\ 3, H[WUDFW UHPRYHV HDVLO\DFLGVROXEOH $O DQG )H SKRVSKDWHV WKURXJK WKH IRUPDWLRQ RI IOXRULGH FRPSOH[HV ZLWK $O DQG )H 7KH VRGLXP ELFDUERQDWH ELFDUEf H[WUDFW VROXELOL]HV D VPDOO SRUWLRQ RI ZKDW LV SUHVXPHG WR EH UHDGLO\PLQHUDOL]DEOH RUJDQLF 3 3Rf ZKLFK LQFOXGHV VRPH PLFURELDO ELRPDVV LQ ERWK DONDOLQH DQG DFLG VRLOV %RZPDQ DQG &ROH 6WHYHQV f %LFDUE 3L XVHG RQO\ WR FDOFXODWH 3R LQ WKLV VWXG\ LV WUDGLWLRQDOO\ XVHG WR PHDVXUH H[WUDFWDEOH 3L LQ QHXWUDO WR DONDOLQH VRLOV 2OVHQ DQG 6RPPHUV f )RU UHVLQH[WUDFWDEOH 3 J RI VRLO ZHUH SODFHG ZLWK D [ FP DQLRQ H[FKDQJH PHPEUDQH VRUSWLRQ FDSDFLW\ PJ 3 SHU PHPEUDQHf LQ D PO FHQWULIXJH WXEH ILOOHG ZLWK PO GHLRQL]HG ',f + 7KH WXEHV ZHUH VKDNHQ IRU KRXUV DIWHU ZKLFK WKH PHPEUDQH ZDV UHPRYHG DQG ULQVHG ZLWK GHLRQL]HG ZDWHU WR UHPRYH VRLO 3KRVSKRUXV RQ WKH PHPEUDQH ZDV GHVRUEHG E\ VKDNLQJ LW LQ PO 0 1+2$F IRU WZR KRXUV 8VLQJ WKH %UD\ 3, H[WUDFW J VRLO ZDV VKDNHQ IRU RQH PLQXWH ZLWK PO RI 1 1+) DQG 1 +&/ LQ ', + DQG ILOWHUHG )RU ELFDUEH[WUDFWDEOH 3L J VRLO ZHUH VKDNHQ LQ PO 0 1D& S+fIRU PLQXWHV &RQFHQWUDWHG +& POf ZDV DGGHG WR WKH ILOWHUHG DQG FHQWULIXJHG

PAGE 77

H[WUDFWV WR SUHFLSLWDWH RUJDQLF PDWWHU $OLTXRWV RI WKH ELFDUE 3L H[WUDFWV ZHUH DVKHG LQ D PXIIOH IXUQDFH DW & DQG ZHWGLJHVWHG ZLWK FRQFHQWUDWHG +& WR H[WUDFW WRWDO 3 3WRWf %LFDUE 3R ZDV FDOFXODWHG DV WKH GLIIHUHQFH EHWZHHQ ELFDUEH[WUDFWHG 3WRW DQG 3L 2OVHQ DQG 6RPPHUV f $OO SURFHGXUHV ZHUH FRQGXFWHG LQ WULSOLFDWH DQG H[WUDFW 3 FRQFHQWUDWLRQV ZHUH GHWHUPLQHG FRORULPHWULFDOO\ XVLQJ WKH PRO\EGDWH EOXH PHWKRG 0XUSK\ DQG 5LOH\ f RQ D 0LOWRQ 5R\ 6SHFWURQLF VSHFWURSKRWRPHWHU 5RRW ,QJURZWK %LRDVVDY $ URRW LQJURZWK ELRDVVDY &XHYDV DQG 0HGLQD f ZDV XVHG WR VWXG\ URRW SUROLIHUDWLRQ UHVSRQVH WR SKRVSKDWH PLFURVLWH HQULFKPHQW 7ZR K\SRWKHVHV ZHUH WHVWHG f ILQH URRW OHQJWK LQ SKRVSKDWHWUHDWHG FRUHV ZRXOG EH JUHDWHU UHODWLYH WR WKH SDLUHG FRQWURO LQGLFDWLQJ D 3 OLPLWDWLRQ WR SODQW SURGXFWLYLW\ DQG f SHDFK SDOP ILQH URRW OHQJWK ZRXOG EH JUHDWHU WKDQ WKDW RI FXSXDVVX LQ ERWK FRUH WUHDWPHQWV DQG DJURIRUHVW ORFDWLRQV VLJQDOLQJ URRW FRPSHWLWLRQ E\ WKH SDOP WKDW FRXOG EH GHWULPHQWDO WR FXSXDVVX QXWULWLRQ 5RRW ELRPDVV EHWZHHQ 3WUHDWHG DQG FRQWURO FRUHV ZDV DOVR FRPSDUHG 5RRW SUROLIHUDWLRQ E\ %UD]LO QXW ZDV QRW VWXGLHG EHFDXVH WKH VSHFLHV LV D PLQRU FRPSRQHQW RI WKH V\VWHP FRQWULEXWLQJ WR OHVV WKDQ b RI WKH DJURIRUHVWfV WUHHV WUHHV KDnf 7KH LQJURZWK FRUHV ZHUH FRQVWUXFWHG IURP KLJK GHQVLW\ SRO\HWK\OHQH PHVK WXEHV FP WDOL FP GLDPHWHU [ PP PHVK VL]Hf DQG ILOOHG ZLWK J PHGLXPVL]HG YHUPLFXOLWH WUHDWHG ZLWK HLWKHU P/ 0 1DM+3&A SKRVSKDWH WUHDWPHQWf RU GHLRQL]HG ZDWHU FRQWUROf 7KH FRUHV ZHUH SODFHG LQGLYLGXDOO\ LQ FP GLDPHWHU KROHV GXJ LQ WKH WRS FP RI VRLO XVLQJ D EXFNHW DXJHU DQG EXULHG LQ SDLUV FRQVLVWLQJ RI ERWK D 3WUHDWHG DQG FRQWURO FRUH VSDFHG FP DSDUW )LYH SDLUV ZHUH EXULHG LQ HDFK RI WKUHH ORFDWLRQV SHU IDUP Df

PAGE 78

EHWZHHQ WUHHV LQ DJURIRUHVW URZV Ef LQ DJURIRUHVW DOOH\V EHWZHHQ WUHH URZVf DQG F f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fURRWLQJ ]RQHff LQ UHVSRQVH WR 3 PLFURVLWH HQULFKPHQW ,QJURZWK SDLUV ZHUH SODFHG UDQGRPO\ LQ DGMDFHQW QDWLYH IRUHVW SORWV WR H[DPLQH QDWLYH IRUHVW SODQW UHVSRQVH WR 3 PLFURVLWH HQULFKPHQW 7KH FRUHV ZHUH EXULHG DW WKH EHJLQQLQJ RI WKH UDLQ\ VHDVRQ PLG 1RYHPEHUf FRQFXUUHQW ZLWK VRLO VDPSOLQJ DQG OHIW IRU GD\V 8SRQ UHPRYDO URRWV ZHUH FXW IOXVK ZLWK WKH RXWVLGH RI WKH LQJURZWK FRUHV DQG WKH URRWV LQVLGH WKH WXEHV ZHUH ZDVKHG DQG VHSDUDWHG DFFRUGLQJ WR 9ROW DQG 3HUVRQ f 7RWDO URRW OHQJWK ZDV FDOFXODWHG XVLQJ WKH OLQH LQWHUVHFW PHWKRG 7HQDQW f 5RRW OHQJWKV IRU QDWLYH IRUHVW VSHFLHV ZHUH HVWLPDWHG WRJHWKHU ZKLOH DJURIRUHVW URRW OHQJWKV ZHUH FDOFXODWHG VHSDUDWHO\ IRU SHDFK SDOP FXSXDVVX DQG WKH UHPDLQLQJ fRWKHUf URRWV 7RWDO URRW OHQJWK SHU LQJURZWK FRUH LV UHSRUWHG DV Pn WR IDFLOLWDWH FRPSDULVRQV ZLWK URRW PDVV J Pnf 2YHQGULHG DQG JURXQG URRW WLVVXH ZDV ZHWGLJHVWHG ZLWK +6+ 7KRPDV HW DO f IRU DQDO\VLV RI 3 FRQFHQWUDWLRQV XVLQJ ,&$3 VSHFWURVFRS\

PAGE 79

6WDWLVWLFDO $QDO\VHV $ SDLUHGFRPSDULVRQ WWHVW ZDV XVHG WR LGHQWLI\ GLIIHUHQFHV LQ VRLO SURSHUWLHV EHWZHHQ DJURIRUHVW DQG DGMDFHQW QDWLYH IRUHVW Q IDUPVf 5RRW OHQJWK GDWD ZHUH ORJ WUDQVIRUPHG WR PHHW WKH HTXDO YDULDQFH DVVXPSWLRQ RI DQDO\VLV RI YDULDQFH $129$f DIWHU D QRUPDO SUREDELOLW\ SORW RI WKH UHVLGXDOV UHYHDOHG KHWHURVFHGDVWLFLW\ XQWUDQVIRUPHG PHDQ YDOXHV DUH SUHVHQWHG 3DLUHG GLIIHUHQFHV EHWZHHQ FRQWURO DQG SKRVSKDWHWUHDWHG FRUHV ZHUH DQDO\]HG DV D IXQFWLRQ RI ORFDWLRQ VSHFLHV DQG ODQGXVH V\VWHP WUHDWPHQWV E\ XVLQJ $129$ PRGHOV ZLWK WKHVH HIIHFWV DQG WKHLU LQWHUDFWLRQV $OO DQDO\VHV ZHUH SHUIRUPHG XVLQJ 6$6 6$6 ,QVWLWXWH ,QF &DU\ 1&f 5HVXOWV $JURIRUHVW 6RLO 6L[
PAGE 80

EHWZHHQ WKH WZR V\VWHPV $OWKRXJK WKH FRQFHQWUDWLRQ RI DJURIRUHVW 0O H[WUDFWDEOH EDVHV ZDV HLWKHU KLJKHU RU XQFKDQJHG IURP WKDW RI IRUHVW VRLOV VL[ \HDUV DIWHU FOHDULQJ 0O 3L GHFUHDVHG QHDUO\ b LQ WKH WRS FP DQG RYHU b DW WKH FP GHSWK 3 f 5HDGLO\H[WUDFWDEOH 3L FRQFHQWUDWLRQV LQ WKH %UD\ 3, DQG UHVLQ H[WUDFWV RI QDWLYH IRUHVW VRLOV FPf ZHUH DOVR KLJKHU WKDQ WKRVH RI DJURIRUHVW VRLO 7DEOH f 2YHUDOO WKH %UD\ 3, H[WUDFW SURGXFHG WKH KLJKHVW H[WUDFWDEOH 3L FRQFHQWUDWLRQV LQ DJURIRUHVW DQG IRUHVW VRLOV SUHVXPDEO\ GXH WR WKH GLVVROXWLRQ RI $OSKRVSKDWHV KRZHYHU LQ ERWK V\VWHPV WKHVH FRQFHQWUDWLRQV ZRXOG EH FRQVLGHUHG LQDGHTXDWH PJ NJnf IRU DJULFXOWXUDO SURGXFWLRQ 2OVHQ DQG 6RPPHUV f %LFDUE 3R ZDV WKH ODUJHVW H[WUDFWDEOH SRRO PHDVXUHG KRZHYHU QHLWKHU LW QRU %LFDUE 3L GLIIHUHG EHWZHHQ DJURIRUHVW DQG QDWLYH IRUHVW VRLOV )LQH 5RRW 5HVSRQVH WR 3KRVSKDWH(QULFKHG 0LFURVLWHV ,Q DOO WKUHH ORFDWLRQV DJURIRUHVW URZV DOOH\V DQG DGMDFHQW QDWLYH IRUHVWf WKHUH ZDV D WUHQG WRZDUGV JUHDWHU URRW OHQJWK LQ SKRVSKDWHWUHDWHG FRUHV )LJ $f +RZHYHU XVLQJ D WWHVW WKH GLIIHUHQFH LQ URRW OHQJWK EHWZHHQ SDLUHG 3WUHDWHG DQG FRQWURO FRUHV ZDV VWDWLVWLFDOO\ VLJQLILFDQW RQO\ LQ WKH DJURIRUHVW DOOH\V 3 f 2YHUDOO ZKHQ GDWD IURP ERWK URZV DQG DOOH\V ZHUH SRROHG PHDQ URRW OHQJWK LQ 3WUHDWHG FRUHV P Pnf ZDV VWLOO JUHDWHU WKDQ LQ WKH FRQWURO P Pnf 3 f 5RRW ZHLJKW GLG QRW GLIIHU EHWZHHQ WKH FRQWURO DQG 3WUHDWHG FRUHV LQ HLWKHU DJURIRUHVW ORFDWLRQ EXW ZDV VLJQLILFDQWO\ JUHDWHU LQ 3 WUHDWHG FRUHV EXULHG LQ QDWLYH IRUHVW )LJ ,%f $ VLJQLILFDQW URRW SUROLIHUDWLRQ UHVSRQVH WR 3WUHDWPHQW ZDV H[KLELWHG E\ FXSXDVVX RQO\ LQ DJURIRUHVW DOOH\V )LJf %RWK FXSXDVVX DQG fRWKHUf URRW OHQJWK LQ 3WUHDWHG FRUHV

PAGE 81

5RRW /HQJWK P Pnf DJURIRUHVW URZV DOOH\V IRUHVW )LJ ,Q DOO LQJURZWK FRUH ORFDWLRQV WKHUH ZDV D WUHQG WRZDUGV JUHDWHU URRW OHQJWK LQ 3WUHDWHG FRUHV WKLV HIIHFW ZDV VWDWLVWLFDOO\ VLJQLILFDQW RQO\ LQ DJURIRUHVW DOOH\V 5RRW ELRPDVV ZDV VLJQLILFDQWO\ JUHDWHU LQ 3WUHDWHG FRUHV EXULHG LQ IRUHVWV

PAGE 82

5RRW %LRPDVV J Pnf 5RRW /HQWK P P f )LJ ,Q DJURIRUHVW URZV URRW OHQJWK GLG QRW GLIIHU EHWZHHQ FXSXDVVX DQG SHDFK SDOP LQ HLWKHU FRUH WUHDWPHQW 5RRW OHQJWK LQ SKRVSKDWHWUHDWHG LQJURZWK FRUHV ZDV VLJQLILFDQWO\ JUHDWHU WKDQ WKH FRQWURO IRU FXSXDVVX DQG fRWKHUf URRWV RQO\ LQ DJURIRUHVW DOOH\V

PAGE 83

DQG P Pn UHVSHFWLYHO\f ZHUH VLJQLILFDQWO\ JUHDWHU WKDQ LQ FRQWURO FRUHV DQG P Pnf 3 DQG 3 f &XSXDVVX URRW ZHLJKW LQ 3WUHDWHG FRUHV J Pnf ZDV DOVR KLJKHU WKDQ WKDW IRXQG LQ WKH SDLUHG FRQWURO J Pnf 3 f 3HDFK SDOP URRW OHQJWK GLG QRW GLIIHU EHWZHHQ SKRVSKDWH DQG FRQWURO FRUHV EXW H[FHHGHG WKDW RI FXSXDVVX IRU ERWK WKH 3 DQG FRQWURO WUHDWPHQWV LQ WKH DOOH\ ORFDWLRQ 3 f )LJ f ,Q DJURIRUHVW URZV WKHUH ZHUH QR GLIIHUHQFHV LQ URRW OHQJWK RU ZHLJKW EHWZHHQ WKH 3WUHDWHG DQG FRQWURO FRUHV QRU ZHUH WKHUH GLIIHUHQFHV EHWZHHQ SHDFK SDOP DQG FXSXDVVX URRW OHQJWKV LQ HLWKHU WUHDWPHQW )LJ f 7DEOH 3KRVSKRUXV FRQWHQW s RQH 6(f LQ ILQH URRW WLVVXH JURZLQJ LQ SKRVSKDWHWUHDWHG DQG FRQWURO LQJURZWK FRUHV Q f 7LVVXH 3 &RQWHQW PJ Jnf 7WHVW ,QFUHDVH LQ &RQWURO 3KRVSKDWH 3 YDOXHV r 3 FRQWHQW bf FXSXDVVX s s SHDFK SDOP s s RWKHU s s IRUHVW VSS s s 3 YDOXHV e QRW UHSRUWHG $FURVV DOO IRXU URRW JURXSV FXSXDVVX SHDFK SDOP fRWKHU DQG IRUHVWf WLVVXH 3 FRQWHQWV ZHUH JUHDWHU IRU URRWV JURZLQJ LQ 3WUHDWHG FRUHV WKDQ WKRVH LQ WKH FRQWURO 3 V2f $QDO\]HG VHSDUDWHO\ E\ JURXS WKLV HIIHFW ZDV VLJQLILFDQW RQO\ IRU FXSXDVVX DQG SHDFK SDOP ZLWK FXSXDVVX H[KLELWLQJ RYHU WZLFH WKH LQFUHDVH LQ URRW 3 FRQWHQW bf WKDQ WKH SDOP bf 7DEOHf

PAGE 84

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f DQG WKLV VWXG\ VXJJHVWV WKDW VXFK FKDQJHV PD\ SHUVLVW VL[ \HDUV DIWHU DJURIRUHVW HVWDEOLVKPHQW $OWKRXJK WKH QXWULWLRQDO TXDOLW\ RI IRUHVW ELRPDVV JURZLQJ LQ WURSLFDO 2[LVROV LV UHODWLYHO\ ORZ 9LWRXVHN DQG 6DQIRUG f WKH WRWDO TXDQWLW\ RI QXWULHQWV UHOHDVHG DIWHU EXUQLQJ PDWXUH IRUHVW XVXDOO\ VXSSRUWV WZR WR WKUHH \HDUV RI QRLQSXW DQQXDO FURSSLQJ EHIRUH ILHOGV DUH DEDQGRQHG WR IDOORZ 6HUU£R HW DO -XR DQG 0DQXf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f ,Q DGGLWLRQ D FKDQJH LQ VSHFLHV FRPSRVLWLRQ ZKHQ IRUHVW ZDV FRQYHUWHG WR DJURIRUHVW

PAGE 85

PD\ KDYH IXUWKHU PRGLILHG VRLO SURSHUWLHV E\ DOWHULQJ WKH TXDQWLW\ DQG TXDOLW\ LH QXWULHQW FRQWHQWf RI DERYH DQG EHORZJURXQG OLWWHU %LQNOH\ 6PLWK HW DO f :KLOH LW PLJKW EH H[SHFWHG WKDW QLWURJHQIL[LQJ OHJXPHV JURZLQJ LQ WKH DJURIRUHVW XQGHUVWRU\ GXULQJ WKH ILUVW WKUHH \HDUV DIWHU HVWDEOLVKPHQW ZRXOG DGG QLWURJHQ WR WKH VRLO WRWDO 1 GLG QRW GLIIHU EHWZHHQ WKH WZR V\VWHPV 7KLV PD\ EH GXH WR WKH IDFW WKDW YRODWLOLVDWLRQ RI 1 GXULQJ IRUHVW ELRPDVV EXUQLQJ FDQ EH XS WR b RI WRWDO 1 FRQWHQW LQ YHJHWDWLRQ .DXIPDQ HW DO f 0RUHRYHU 1 H[SRUW IURP WKLV SDUWLFXODU FRQILJXDULRQ RI DJURIRUHVW VSHFLHV FDQ EH UHODWLYHO\ KLJK RIWHQ FRPSDUDEOH WR WKDW RI DQQXDO FURSSLQJ V\VWHPV DV WKH V\VWHP DSSURDFKHV VL[ WR HLJKW \HDUV &KDSWHU f 5HJDUGOHVV RI WKH RULJLQ DQ LQFUHDVH LQ H[FKDQJHDEOH EDVHV DQG S+ FDQ DOVR VWLPXODWH GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ RI RUJDQLF PDWWHU E\ FUHDWLQJ D PRUH IDYRUDEOH HQYLURQPHQW IRU PLFURELDO SRSXODWLRQV 1\H DQG *UHHQODQG f DV ZHOO DV GHFUHDVH WKH VRLOfV 3 IL[DWLRQ FDSDFLW\ E\ UHGXFLQJ $O DQG )H VROXELOLW\ &RPELQHG ZLWK WKH WUDQVIHU RI 3 IURP ELRPDVV WR VRLO IROORZLQJ D VODVK DQG EXUQ WKHVH IDFWRUV FRXOG LQLWLDOO\ LQFUHDVH 3 DYDLODELOLW\ WR SODQWV 6DQFKH] f .DLQHU HW DO LQSUHVVf IRXQG WKDW 0O 3L FRQFHQWUDWLRQV LQ UHFHQWO\ EXUQHG VKLIWLQJ FXOWLYDWLRQ SORWV S+ PJ NJnf ZHUH PDUNHGO\ JUHDWHU WKDQ WKRVH LQ QDWLYH IRUHVW S+ PJ NJnf ORFDWHG LQ WKH VDPH ZHVWHUQ $PD]RQLDQ H[WUDFWLYH UHVHUYHV 6LPLODUO\ /HVVD HW DO f DWWULEXWHG DQ LQFUHDVH LQ ELFDUEH[WUDFWDEOH 3R LQ WKH WRS FP RI DQ 2[LVRO WR DFFHOHUDWHG RUJDQLF PDWWHU GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ RQH \HDU IROORZLQJ VDYDQQD FOHDULQJ LQ QRUWKHDVWHUQ %UD]LO

PAGE 86

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f +RZHYHU LW LV SRVVLEOH WKDW VRLO 3L SOXV WKDW UHOHDVHG IURP SODQW ELRPDVV GXULQJ WKH EXP ZDV fIL[HGf LQWR PRUH VWDEOH 3 IUDFWLRQV QRW PHDVXUDEOH LQ WKH H[WUDFWV XVHG LQ WKLV VWXG\ /LQTXLVW HW DO f IRXQG WKDW GHVSLWH ODUJH 3 IHUWLOL]HU DSSOLFDWLRQV H[FHHGLQJ FURS UHPRYDO LQ D +DZDLLDQ 8OWLVRO 0O 3L GHFUHDVHG IURP WR PJ NJn GXULQJ D IRXU \HDU SHULRG ,Q RXU VWXG\ KRZHYHU WKH UHODWLYHO\ VKRUW SHULRG RFFXUULQJ EHWZHHQ IRUHVW EXUQLQJ DQG VDPSOLQJ PDNHV LW XQOLNHO\ WKDW DJURIRUHVW 3 PRYHG LQWR WKH PRVW UHFDOFLWUDQW RFFOXGHG VRLO SRROV &URVV DQG 6FKOHVLQJHU f 7KXV RQH PLJKW H[SHFW DJURIRUHVW VROXWLRQ 3L WR EH UHVWRUHG HLWKHU WKURXJK

PAGE 87

GHVRUSWLRQ IURP VHFRQGDU\ PLQHUDOV RU 3R PLQHUDOL]DWLRQ 8VLQJ VHTXHQWLDO IUDFWLRQDWLRQ SURFHGXUHV VWXGLHV KDYH VKRZQ WKDW UHDGLO\H[WUDFWDELH 3L LQ PDQ\ DJULFXOWXUDO V\VWHPV LV PDLQWDLQHG LQ HTXLOLEULXP ZLWK OHVV ODELOH SRROV VXFK DV 1D2+H[WUDFWDEOH 3L +HGOH\ HW DO 7LHVVHQ HW DO &UHZV f 'HVSLWH DQ b GHFUHDVH LQ UHVLQ 3L IURP WR PJ NJnf DIWHU \HDUV RI QRLQSXW FURSSLQJ LQ D 3HUXYLDQ 8OWLVRO %HFN DQG 6DQFKH] f VXUPLVHG WKDW UHVLQ 3L KDG EHHQ VXVWDLQHG E\ 3R PLQHUDOL]DWLRQ DQG PRUH VWDEOH 3L IUDFWLRQV EHFDXVH WKLV 3L SRRO ZDV QRW ODUJH HQRXJK WR VXSSRUW WKH WRWDO UHPRYDO RI NJ 3 KDn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n JURXQG ELRPDVV DW WKLV VWDJH RI DJURIRUHVW GHYHORSPHQW PD\ KDYH VWDELOL]HG RU HYHQ OLPLWHG ELFDUE 3R DFFXPXODWLRQ LQ DJURIRUHVW VRLOV /LQTXLVW HW DO f VXJJHVWHG WKDW UHDGLO\ H[WUDFWDELH 3R LV FRXSOHG ZLWK & PLQHUDOL]DWLRQ DIWHU REVHUYLQJ WKDW ELFDUE 3R GHFOLQHG DW WKH VDPH UDWH DV VRLO RUJDQLF FDUERQ DQG WRWDO 1 GXULQJ IRXU \HDUV RI FRQWLQXDO FURSSLQJ LQ DQ 8OWLVRO ,Q RXU VWXG\ VRLO RUJDQLF PDWWHU 20f ZDV HTXDOO\ ORZ bf LQ ERWK IRUHVW DQG DJURIRUHVW VRLOV PRVW OLNHO\ EHFDXVH GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ DUH VR UDSLG LQ WKH WURSLFDO HQYLURQPHQW WKDW RQO\ WKH PRVW UHFDOFLWUDQW 20 IUDFWLRQV UHPDLQ LQ HLWKHU V\VWHP

PAGE 88

,Q WKHVH FRQGLWLRQV RQH ZRXOG H[SHFW WKH ODELOH 3R SRRO WR EH PDLQWDLQHG DW D FRQVWDQW OHYHO XQOHVV PRGLILHG WHPSRUDULO\ E\ VHDVRQDO SXOVHV RU LPPRELOL]DWLRQ +H HW DO f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f 7KHVH DQG RWKHU VWXGLHV LQGLFDWH WKDW LQFUHDVLQJO\ VWDEOH 3 SRROV VXFK DV 1D2+H[WUDFWDEOH DQG fUHVLGXDOf 3R FRQWULEXWH VLJQLILFDQWO\ WR SODQW 3 XSWDNH RYHU WKH ORQJ WHUP E\ EXIIHULQJ PRUH UHDGLO\H[WUDFWDEOH 3L SRROV DQG WKHUHIRUH PD\ EHWWHU UHSUHVHQW WKH VRLOfV SRWHQWLDO IRU 3 PDLQWHQDQFH %HFN DQG 6DQFKH] f 7LHVVHQ HW DO f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f IRXQG WKDW WRWDO VRLO 3 LQ VODVKHG SULPDU\ WHUUD ILUPH IRUHVWV LQ 5RQGQLD %UD]LO LQFUHDVHG b IURP SUHEXUQ

PAGE 89

FRQFHQWUDWLRQV LPPHGLDWHO\ IROORZLQJ EXUQLQJ $Q\ VXFK LQFUHDVH LQ DJURIRUHVW VRLO 3 IROORZLQJ IRUHVW ELRPDVV EXUQLQJ ZDV QR ORQJHU DSSDUHQW VL[ \HDUV ODWHU DV GHPRQVWUDWHG E\ VLPLODU WRWDO 3 FRQFHQWUDWLRQV LQ DJURIRUHVW NJ KDnf DQG DGMDFHQW IRUHVW NJ KDnf VRLOV /LNHO\ VLQNV IRU DJURIRUHVW 3 LQFOXGH DFFXPXODWLRQ LQ DERYH DQG EHORZJURXQG ELRPDVV DQG ORVV WKURXJK WKUHH \HDUV RI FURS KDUYHVWV ZKLFK FRPELQHG FRXOG DFFRXQW IRU DSSUR[LPDWHO\ WR NJ KDn &KDSWHU f 3HDFK SDOP ELRPDVV LQ SDUWLFXODU ZDV IRXQG WR VWRUH RYHU WZLFH DV PXFK 3 LQ DERYHJURXQG ELRPDVV WKDQ LQ FXSXDVVX DQG %UD]LO QXW FRPELQHG LQ DQ HLJKW\HDUROG DJURIRUHVW &KDSWHU f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fRWKHUf SODQWV URRWV LQ 3WUHDWHG FRUHV EXULHG LQ DJURIRUHVW DOOH\V FRPSDUHG WR WKH FRQWURO FRUHV VXJJHVWV WKDW WKHVH VSHFLHV PD\ LQYHVW PRUH UHVRXUFHV LQWR URRWV WKDW ILQG 3HQULFKHG PLFURVLWHV +RZHYHU GHILQLWH 3 OLPLWDWLRQV WR SODQW SURGXFWLYLW\ FRXOG QRW EH LQIHUUHG XVLQJ WKH URRW LQJURZWK FRUH ELRDVVD\ EHFDXVH URRWV RI WKH VDPH VSHFLHV GLG QRW UHVSRQG WR 3 PLFURVLWH HQULFKPHQW LQ DJURIRUHVW

PAGE 90

URZV 7KHUH ZDV D VLPLODU WUHQG WRZDUGV JUHDWHU PHDQ URRW OHQJWK LQ 3WUHDWHG FRUHV EXULHG LQ QDWLYH IRUHVW EXW WKLV HIIHFW ZDV QRW VWDWLVWLFDOO\ VLJQLILFDQW &XHYDV DQG 0HGLQD f XVHG SUROLIHUDWLRQ RI ILQH URRW ELRPDVV WR LQIHU ERWK D 3 DQG &D OLPLWDWLRQ WR QDWLYH WHUUD ILUPH IRUHVW LQ WKH 9HQH]XHODQ $PD]RQ DQG DQ DQDO\VLV RI QDWLYH IRUHVW URRW PDVV LQ WKLV VWXG\ UHYHDOHG D VLJQLILFDQWO\ KLJKHU URRW PDVV LQ 3WUHDWHG FRUHV $V HDUOLHU QRWHG H[WUDFWDEOH 3L FRQFHQWUDWLRQV PHDVXUHG LQ DQ\ RI WKH H[WUDFWV XVHG LQ WKLV VWXG\ DUH FRQVLGHUHG fORZf IRU ERWK IRUHVW DQG DJURIRUHVW VRLOV +RZHYHU D 3OLPLWDWLRQ WR QDWLYH IRUHVW SURGXFWLYLW\ FDQQRW EH LQIHUUHG EDVHG RQ WKH URRW LQJURZWK ELRDVVD\ GHVSLWH WKH IDFW WKDW PDQ\ VWXGLHV FLWH 3 DV WKH QXWULHQW PRVW OLPLWLQJ WR WURSLFDO IRUHVW SURGXFWLYLW\ 9LWRXVHN DQG 6DQIRUG f /HQJWK 9HUVXV 0DVV DV DQ ,QGLFDWRU RI 3UROLIHUDWLRQ 2YHUDOO URRW PDVV LQ 3WUHDWHG FRUHV GLG QRW GLIIHU IURP WKDW RI WKH FRQWURO LQ DJURIRUHVW DOOH\V DQG WKLV LV SHUKDSV GXH WR GLIIHULQJ SDWWHUQV RI URRW ELRPDVV DOORFDWLRQ DPRQJ WKH V\VWHPnV FRPSRQHQWV &XSXDVVX URRW OHQJWK DSSHDUHG WR EH D PRUH VHQVLWLYH PHDVXUH RI URRW SUROLIHUDWLRQ WKDQ PDVV DQG D SORW RI URRW OHQJWK YHUVXV PDVV UHYHDOV D VLJQLILFDQW OLQHDU UHODWLRQVKLS LQ ZKLFK D VPDOO LQFUHPHQW LQ PDVV SURGXFHG D ODUJH LQFUHDVH LQ OHQJWK 6LPLODUO\ WKH PDMRULW\ RI WKH YDULRXV XQLGHQWLILHG KHUEDFHRXV VSHFLHV WKDW FRPSULVHG WKH fRWKHU f JURXS KDG YHU\ ILQH URRWV GLDPHWHU PPf ZKLFK SURGXFHG RYHU WZLFH DV PXFK OHQJWK WKDQ SHDFK SDOP URRWV LQ 3WUHDWHG FRUHVf ZLWK OHVV WKDQ D WKLUG RI WKH PDVV 7KH GLIIHUHQFH LQ fRWKHUf URRW PDVV EHWZHHQ WR 3WUHDWHG DQG FRQWURO FRUHV ZDV QRW VLJQLILFDQW SHUKDSV EHFDXVH WKH JUHDWHU PDVV RI FRDUVHU GLDPHWHU A PPf URRWV RI GLIIHUHQW VSHFLHVf WKDW RFFDVLRQDOO\ JUHZ LQWR FRUHV RI ERWK WUHDWPHQWV RYHUZKHOPHG WKH ILQH URRW PDVV REVFXULQJ DQ\ SUROLIHUDWLRQ UHVSRQVH EDVHG XSRQ WKLV YDULDEOH 8OWLPDWHO\ ZH SODFHG JUHDWHU

PAGE 91

HPSKDVLV RQ URRW OHQJWK LQ RXU HYDOXDWLRQ RI URRW SUROLIHUDWLRQ UHVSRQVH EHFDXVH WKH VXUIDFH DUHD RI FRQWDFW EHWZHHQ URRW DQG VRLO LV PRUH LQGLFDWLYH RI D URRW V\VWHPfV FDSDFLW\ WR WDNH XS QXWULHQWV WKDQ LV PDVV 1HZPDQ f 5RRW 3UROLIHUDWLRQ LQ $JURIRUHVW $OOH\V DQG 5RZV 6WXGLHV KDYH VKRZQ WKDW URRW SUROLIHUDWLRQ LQ SDWFKHV ZKHUH QXWULHQWV DUH PRUH DEXQGDQW LV D IRUDJLQJ VWUDWHJ\ WKDW PD\ EH PRUH HIIHFWLYH IRU ILQH URRWHG VSHFLHV JURZLQJ LQ HQYLURQPHQWV ZKHUH QXWULHQWV DUH KHWHURJHQHRXVO\ GLVWULEXWHG RU fSDWFK\f &DOGZHOO f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fUDQGRPO\f JURZ LQWR ERWK 3HQULFKHG DQG FRQWURO FRUHV SHUKDSV H[SODLQLQJ ZK\ FXSXDVVX URRW OHQJWKV GLG QRW GLIIHU VLJQLILFDQWO\ EHWZHHQ WKH 3WUHDWHG DQG FRQWURO FRUHV LQ URZV ,Q FRQWUDVW OLWWHUIDOO LQ DOOH\V ZDV SDWFK\ RIWHQ H[SRVLQJ EDUH PLQHUDO VRLO ,Q VXFK DQ HQYLURQPHQW WKH FRVW RI URRW JURZWK LV UHODWLYHO\ KLJK LI QXWULHQW DFTXLVLWLRQ LV QRW LQFUHDVHG DV D UHVXOW RI WKH LQYHVWPHQW 7KXV ZH VHH YHU\ OLWWOH FXSXDVVX URRW OHQJWK RU PDVV

PAGE 92

LQ WKH FRQWURO FRUHV EXULHG LQ DJURIRUHVW DOOH\V FRPSDUHG WR URZV &XSXDVVX URRWV JURZLQJ LQWR DOOH\V SUROLIHUDWHG RQO\ ZKHQ WKH\ HQFRXQWHUHG WKH 3HQULFKHG FRUHV *UHDWHU OLJKW DQG ZDWHU DYDLODELOLW\ DQG SHUKDSV ORZHU URRW GHQVLWLHV LQ DJURIRUHVW DOOH\V PD\ KDYH DOVR FRQWULEXWHG WR D PRUH IDYRUDEOH HQYLURQPHQW IRU WKH URRW JURZWK RI fRWKHUf ZHHG\ VSHFLHV ZKLFK DUH RIWHQ EHWWHU DGDSWHG WR HIILFLHQW H[SORLWDWLRQ RI SDWFK\ QXWULHQW DYDLODELOLW\ 5RRW &RPSHWLWLRQ $PRQJ $JURIRUHVW &RPSRQHQWV 'LIIHUHQFHV LQ URRW UHVSRQVH WR 3PLFURVLWH HQULFKPHQW DPRQJ DJURIRUHVW FRPSRQHQWV PD\ DOVR UHIOHFW GLIIHULQJ HFRORJLFDO VWUDWHJLHV IRU QXWULHQW DFTXLVLWLRQ WKDW GHWHUPLQH FRPSHWLWLYH LQWHUDFWLRQV DPRQJ DJURIRUHVW FRPSRQHQWV :KLOH WKH URRWV RI FXSXDVVX DQG fRWKHUf SODQWV SUROLIHUDWHG LQ 3HQULFKHG FRUHV LQ DJURIRUHVW DOOH\V SHDFK SDOP URRWV GLG QRW H[KLELW VLPLODU IRUDJLQJ EHKDYLRU ,Q IDFW RYHUDOO QHLWKHU SDOP URRW OHQJWK QRU PDVV GLIIHUHG DPRQJ FRUH WUHDWPHQWV RU ORFDWLRQV 7KLV VXJJHVWV WKDW WKLV VSHFLHV PD\ DFTXLUH 3 LQ 3 GHILFLHQW KDELWDW WKURXJK PHFKDQLVPV RWKHU WKDQ SUROLIHUDWLRQ RI ILQH URRWV )LWWHU f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f VR WKDW WKH SDOP DOORFDWHV WZLFH DV PXFK ELRPDVV WR DQ HTXLYDOHQW

PAGE 93

OHQJWK RI URRW DV FXSXDVVX )XUWKHUPRUH VXFK GLIIHUHQFHV LQ FDUERQ DOORFDWLRQ PD\ LQGLFDWH GLIIHUHQW HFRORJLFDO VWUDWHJLHV IRU UHVRXUFH FDSWXUH )RU H[DPSOH LW PD\ EH WKDW LQVWHDG RI SUROLIHUDWLQJ VKRUWOLYHG ILQH URRWOHWV LQ HSKHPHUDO QXWULHQW SDWFKHV WKH SDOP PD\ LQYHVW LQ ORQJHUOLYHG KLJKHU GLDPHWHU URRWV WR ORFDWH DQG H[SORLW VRLO UHVRXUFHV WKDW PD\ EH VSDWLDOO\ EH\RQG WKH UHDFK RI FRPSHWLWRUV )HUUHLUD HW DO f HVWLPDWHG WKDW ZKHQ JURZLQJ LQ KHDY\WH[WXUHG FOD\ 2[LVROV DEVRUSWLYH URRWV RI SHDFK SDOP PD\ H[WHQG XS WR PHWHUV IURP WKH VWHP ,Q DGGLWLRQ WKH SDOP URRWV IRUP WKLFN VXSHUILFLDO PDWV DW WKH EDVH RI VWHPV DQG RIIVKRRWV WKDW fFDWFKf IDOOHQ OLWWHU ,Q DQRWKHU VWXG\ &KDSWHU f UHVLQ3L FRQFHQWUDWLRQV LQ WKH RUJDQLF PDWWHU WUDSSHG LQ WKH SHDFK SDOPfV URRW PDW ZHUH WR WLPHV JUHDWHU WKDQ 3L FRQFHQWUDWLRQV LQ WKH WRS FP RI VXUURXQGLQJ VRLO )LQDOO\ SHDFK SDOP URRWV DUH NQRZQ WR IRUP YHVLFXODUDUEXVFXODU P\FRUUKL]DO V\PELRVHV LQ $PD]RQLDQ 2[LVROV DQG RWKHU VWXGLHV VXJJHVW WKDW WKLV VSHFLHV PD\ EH DEOH WR VROXELOL]H OHVV UHDGLO\H[WUDFWDEOH IRUPV RI 3 &OHPHQW DQG +DEWH )HUQDQGHV DQG 6DQIRUG f 'HVSLWH WKHVH SRWHQWLDO PHFKDQLVPV IRU 3 DFTXLVWLRQ LW FDQQRW EH FRQFOXGHG WKDW SHDFK SDOP LV 3VXIILFLHQW EDVHG XSRQ D ODFN RI URRW SUROLIHUDWLRQ UHVSRQVH WR 3 PLFURVLWH HQULFKPHQW GXH WKH LQKHUHQW ZHDNQHVVHV RI WKH URRW LQJURZWK ELRDVVD\ PHQWLRQHG DERYH 0RUD8USL HW DO f QRWH WKDW 3 GHILFLHQFLHV DUH UDUHO\ REVHUYHG LQ SHDFK SDOP JURZLQJ LQ WURSLFDO 8OWLVROV DQG 2[LVROV DQG WKH YDULRXV VWUDWHJLHV IRU 3 DFTXLVLWLRQ GHVFULEHG DERYH OLNHO\ LQFUHDVH WKH SDOPfV FRPSHWLWLYH DELOLW\ LQ 3GHILFLHQW VRLOV 7KH 5(&$ IDUPHUVf FRQFHUQV RI URRW FRPSHWLWLRQ E\ WKH SHDFK SDOP ZHUH EDVHG XSRQ REVHUYDWLRQV WKDW SDOP URRWV UHJXODUO\ JUHZ LQ WKH VRLO EHQHDWK FXSXDVVX FDQRSLHV ,Q DQ HLJKW\HDU ROG DJURIRUHVW RI WKH VDPH FRQILJXUDWLRQ SODQWHG E\ 5(&$ IDUPHUV SHDFK SDOP FRPSULVHG b RI WRWDO

PAGE 94

DERYH JURXQG ELRPDVV SURYLGLQJ IXUWKHU HYLGHQFH RI WKH SDOPfV GRPLQDQFH LQ WKLV DJURHFRV\VWHP &KDSWHU f 7KH UHVXOWV RI WKLV VWXG\ GHPRQVWUDWH WKDW UHDGLO\H[WUDFWDEOH 3L FRQFHQWUDWLRQV LQ DJURIRUHVW VRLO GHFUHDVHG UHODWLYH WR DGMDFHQW IRUHVW SHUKDSV WR WKH GHWULPHQW RI RWKHU OHVVFRPSHWLWLYH VSHFLHV LQ WKH V\VWHP ,Q DQRWKHU VWXG\ UHVLQH[WUDFWDEOH 3 PHDVXUHG PRQWKO\ RYHU RQH \HDU ZDV KLJKHU XQGHUQHDWK SHDFK SDOP FDQRSLHV WKDQ WKRVH RI FXSXDVVX SUHVXPDEO\ GXH WR IDVWHU OHDFKLQJ GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ RI WKH UHODWLYHO\ 3ULFK SHDFK SDOP OHDI OLWWHU &KDSWHU f DQG WKH SDOP DSSHDUV PRUH HIILFLHQW LQ SURFXULQJ DQG VWRULQJ 3 LQ UDSLGO\ JURZLQJ DERYH DQG EHORZJURXQG ELRPDVV WKDQ WKH RWKHU WZR DJURIRUHVW FRPSRQHQWV &KDSWHU f 7KXV LI FRPSHWLWLRQ LV GHILQHG DV WKH UHGXFWLRQ LQ SODQW ILWQHVV UHVXOWLQJ IURP UHVRXUFH H[SORLWDWLRQ E\ QHLJKERULQJ SODQWV *ULPH f LW PLJKW EH FRQFOXGHG WKDW SHDFK SDOP FRPSHWLWLRQ WKUHDWHQV SURGXFWLYLW\ LQ FXSXDVVX DQG %UD]LO QXW XQGHU FXUUHQW QRLQSXW PDQDJHPHQW SUDFWLFHV +RZHYHU WKLV VWXG\ DOVR GHPRQVWUDWHV WKDW FXSXDVVX URRWV GR SUROLIHUDWH ZKHQ WKH\ HQFRXQWHU 3HQULFKHG SDWFKHV LQ FORVH SUR[LPLW\ WR LWV FDQRS\ UHVXOWLQJ LQ QHDUO\ D b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

PAGE 95

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fV IXWXUH VWDQGLQJ ELRPDVV SURGXFWLRQ UHTXLUHPHQWV ZRXOG EH PHW E\ QXWULHQW IOX[HV LQ WKH LQWUDV\VWHP F\FOH DV WKH WUHH EDVHG DJURHFRV\VWHP UHDFKHV VWHDG\ VWDWH $WWLZLOO DQG /HHSHU f )RU H[DPSOH 3ROJODVH HW DO f IRXQG WKDW 0O 3L LQ (XFDO\SWXV UHJLRQV IRUHVWV GHFUHDVHG IURP PJ NJn DW WLPH ]HUR WR PJ NJn DW DJH DQG UHPDLQHG FRQVWDQW WKHUHDIWHU LQ VWDQGV DJHG WR \HDUV ROG ,Q FRQWUDVW 3 UHPRYDO ZLWK WKH KDUYHVW RI DJURIRUHVW SURGXFWV HVWLPDWHG GXULQJ WKH VL[WK \HDU IROORZLQJ HVWDEOLVKPHQW WR EH EHWZHHQ DQG NJ 3 KDn \Un UHSUHVHQWV D SHUPDQHQW ORVV IURP WKH WRWDO VRLO 3 VWRFN :KLOH 3R PLQHUDOL]DWLRQ PD\ VXVWDLQ SURGXFWLRQ UHTXLUHPHQWV RI QDWLYH IRUHVW DW VWHDG\VWDWH WKH GHFUHDVH LQ DJURIRUHVW ODELOH 3L LQGLFDWHV WKDW 3R SRROV FDQQRW DGHTXDWHO\ UHVWRUH VROXWLRQ 3L DV LW LV WDNHQ XS E\ DQ DJJUDGLQJ DJURHFRV\VWHP XQGHUJRLQJ 3 UHPRYDO ZLWK VXFFHVVLYH FURS KDUYHVWV 8QOHVV UHSOHQLVKHG

PAGE 96

WKURXJK H[WHUQDO LQSXWV WKLV GUDLQ RQ VRLO 3 ZLOO RQO\ LQFUHDVH DV WKH V\VWHP PDWXUHV DQG KDUYHVW RI DJURIRUHVW SURGXFWV FRQWLQXHV $UJXDEO\ WKH WR b UHGXFWLRQ GHSHQGLQJ RQ WKH H[WUDFWf LQ UHDGLO\H[WUDFWDEOH 3L VL[ \HDUV DIWHU IRUHVW FRQYHUVLRQ UHSUHVHQWV OHVV WKDQ RQH SHUFHQW RI WKH DJURIRUHVWfV WRWDO VRLO 3 VWRFN PJ NJnf DQG WKH ODUJH GLIIHUHQFH EHWZHHQ WRWDO 3 DQG H[WUDFWDEOH 3L PD\ LQFOXGH SRROV WKDW DUH SODQWDYDLODEOH RYHU WKH ORQJ WHUP +RZHYHU WKH UDWH DW ZKLFK 3 LV VXSSOLHG WR DJURIRUHVW SODQWV GHWHUPLQHV WKH V\VWHPfV SURGXFWLYLW\ RQ D VKRUW WHUP EDVLV DQG KHQFH LWV SRWHQWLDO IRU HFRQRPLF VXVWDLQDELOLW\ 7KH GHFUHDVH LQ DJURIRUHVW UHDGLO\H[WUDFWDEOH 3L UHODWLYH WR WKDW LQ QDWLYH IRUHVW VRLOV GHPRQVWUDWHV WKDW LW LV EHLQJ WDNHQ XS PRUH UDSLGO\ WKDQ LW FDQ EH UHVWRUHG E\ RWKHU 3 SRROV LQ WKH VRLO V\VWHP DQG WKLV GHFUHDVH LQ fODELOHf 3 PD\ DIIHFW FRPSRQHQWV RI WKH V\VWHP GLIIHUHQWLDOO\ LV RQH VSHFLHV IRU H[DPSOH LV KDV fDFFHVVf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

PAGE 97

FRPSHWLWLRQ E\ WKH SHDFK SDOP WKHVH IDUPHUV GLG QRW EHOLHYH WKDW WKH LQLWLDOO\ fKLJKf SURGXFWLYLW\ RI DJURIRUHVWV FRXOG EH PDLQWDLQHG DQG WKXV WKH\ FKRVH WR PLQLPL]H HFRQRPLF ULVN E\ SODQWLQJ QHZ V\VWHPV HYHU\ \HDU $OWKRXJK WKH SURGXFHUf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f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

PAGE 98

&+$37(5 /,77(5 '<1$0,&6 $1' 0217+/< )/8&78$7,216 ,1 62,/ 3+263+2586 $9$,/$%,/,7< ,1 $1 $0$=21,$1 $*52)25(67 ,QWURGXFWLRQ 0DLQWDLQLQJ SKRVSKRUXV 3f DYDLODELOLW\ WR FURS SODQWV JURZLQJ LQ KLJKO\ ZHDWKHUHG VRLOV LV RQH RI WKH ODUJHVW FKDOOHQJHV IDFLQJ WKH GHYHORSPHQW RI VXVWDLQDEOH DJURHFRV\VWHPV WKURXJKRXW PXFK RI WKH KXPLG WURSLFV 6DQFKH] f 3UHYLRXV VWXGLHV KDYH VKRZQ WKDW OHVV WKDQ b RI WRWDO 3 LQ 2[LVROV DQG 8OWLVROV RI 6RXWK $PHULFDfV $PD]RQ %DVLQ LV H[WUDFWDEOH XVLQJ SURFHGXUHV IRU WKH PRVW FRPPRQ LQGLFHV RI 3 DYDLODELOLW\ 7LHVVHQ HW DO 'LDV)LOKR HW DO LQ SUHVV &KDSWHU f DQG LW LV HVWLPDWHG WKDW 3 GHILFLHQFLHV OLPLW FURS SURGXFWLRQ LQ b RI WKH UHJLRQfV XSODQG VRLOV 1LFKRLDLGHV HW DO 6P\WK DQG &UDYR f 0XFK RI WKH VRLO 3 VWRFN LV JHRFKHPLFDOO\ ERXQG WR LURQ DQG DOXPLQXP R[LGHV LQ IRUPV WKDW DUH ODUJHO\ XQDYDLODEOH IRU XSWDNH UHQGHULQJ SODQW 3 QXWULWLRQ KLJKO\ GHSHQGHQW XSRQ ELRORJLFDOO\PHGLDWHG WUDQVIRUPDWLRQV RI RUJDQLF 3 &URVV DQG 6FKOHVLQJHU +HGOH\ HW DO f 7KXV LQ QRQIHUWLOL]HG DJURHFRV\VWHPV IOXFWXDWLRQV LQ VRLO 3 DYDLODELOLW\ RYHU D JURZLQJ VHDVRQ DUH RIWHQ DVVRFLDWHG ZLWK IDFWRUV FRQWUROOLQJ OLWWHU GHFRPSRVLWLRQ DQG 3L PLQHUDOL]DWLRQ IURP VRLO RUJDQLF PDWWHU VXFK DV WHPSHUDWXUH PRLVWXUH DQG UHVRXUFH TXDOLW\ LH WKH ELRGHJUDGDELOLW\ RI RUJDQLF PDWHULDOf DV ZHOO DV ZLWK VHDVRQDO YDULDWLRQV LQ 3 GHPDQG E\ SODQWV DQG FRPSHWLQJ PLFURELDO SRSXODWLRQV 7DWH 6WHZDUW DQG 7LHVVHQ /DMWKD DQG +DUULVRQ f ,Q WUHH

PAGE 99

EDVHG HFRV\VWHPV VXFK DV SHUHQQLDO FURSEDVHG DJURIRUHVWV 3L PLQHUDOL]HG IURP GHFRPSRVLQJ OLWWHUIDOO DQG GHDG URRWV FRQWULEXWHV WR WKH ORQJWHUP SURGXFWLYLW\ RI WKHVH V\VWHPV DOWKRXJK WKH KLJKHVW UDWH DW ZKLFK 3L LV UHOHDVHG IURP YDULRXV RUJDQLF VRXUFHV PD\ QRW QHFHVVDULO\ FRLQFLGH ZLWK SHULRGV RI JUHDWHVW GHPDQG E\ WKH V\VWHPfV FURS FRPSRQHQWV ,W LV WKH UDWH RI 3L UHOHDVH E\ PLQHUDOL]DWLRQ UDWKHU WKDQ WKH DPRXQW RI RUJDQLF 3 3Rf SUHVHQW WKDW IUHTXHQWO\ FRQWUROV 3R DYDLODELOLW\ WR SODQWV 7DWH f &RQVHTXHQWO\ WKH PRVW HIILFLHQW XVH RI VRLO DPHQGPHQWV LQFOXGLQJ LQRUJDQLF IHUWLOL]HUV JUHHQ PDQXUHV DQG RUJDQLF UHVLGXHV RIWHQ UHTXLUHV V\QFKURQL]HG DQG GLUHFWHG DSSOLFDWLRQ GXULQJ SHULRGV RI KLJK GHPDQG E\ FURS SODQWV DQG ORZ VRLO DYDLODELOLW\
PAGE 100

VROXWLRQ VR WKDW DQ HTXLOLEULXP EHWZHHQ WKH VROLG DQG VROXWLRQ SKDVHV LV QRW HVWDEOLVKHG 9DLG\DQDWKDQ DQG 7DOLEXGHHQ f ,Q D ODERUDWRU\ VWXG\ 3DUILWW DQG 7DWH f XVHG UHVLQLPSUHJQDWHG PHPEUDQHV WR PHDVXUH 3 PLQHUDOL]DWLRQ E\ H[WUDFWLQJ WKH VRLO WR H[KDXVWLRQ EHIRUH DQG DIWHU DQ LQFXEDWLRQ SHULRG 8QGHU ILHOG FRQGLWLRQV HVSHFLDOO\ LQ VRLOV ZLWK KLJK VRUSWLRQ FDSDFLWLHV UHVLQV EHKDYH PRUH OLNH G\QDPLF H[FKDQJHUV VR WKDW 3 PHDVXUHG LQ UHVLQ H[WUDFWV UHSUHVHQWV D FRPSRVLWH LQGH[ RI WKH VRLOfV UHWHQWLRQ FDSDFLW\ PLFURELDO 3 GHPDQG DQG WKH VWDWXV RI SODQW DYDLODEOH 3 &RRSHUEDQG DQG /RJDQ f $V D FRPSRVLWH LQGH[ UHVLQILOOHG EDJV RU LPSUHJQDWHG PHPEUDQHV DUH XVHIXO IRU PDNLQJ LQ VLWX FRPSDULVRQV RI WHPSRUDO DQG VSDWLDO YDULDWLRQV LQ 3 DYDLODELOLW\ ZLWKLQ RU DPRQJ V\VWHPV +XDQJ DQG 6FKRHQDX )HUQDQGHV DQG &RXWLQKR f )OXFWXDWLRQV LQ 3 DYDLODELOLW\ XQGHU ILHOG FRQGLWLRQV KDYH EHHQ PRQLWRUHG LQ D QXPEHU RI GLIIHUHQW HFRV\VWHPV XVLQJ UHVLQ EDJV SODFHG LQ RU RQ WRS RI WKH VRLO IRU YDU\LQJ OHQJWKV RI WLPH *LEVRQ /DMWKD *LEOLQ HW DO
PAGE 101

KDYH GHPRQVWUDWHG WKDW LRQ FRQFHQWUDWLRQV LQ H[WUDFWV IURP UHVLQ PHPEUDQHV FRUUHODWH FORVHO\ ZLWK SODQW XSWDNH DV ZHOO DV ZLWK PRUH WUDGLWLRQDO LQGLFHV RI QXWULHQW DYDLODELOLW\ LQFOXGLQJ UHVLQILOOHG EDJV $EUDPV DQG -DUUHOO 0F/DXJKOLQ HW DO &RRSHUEDQG DQG /RJDQ )HUQDQGHV DQG :DUUHQ +XDQJ DQG 6FKRHQDX )HUQDQGHV DQG &RXWLQKR f ,Q DJURHFRV\VWHPV VHDVRQDO PRQLWRULQJ RI VRLO 3 DYDLODELOLW\ XVLQJ DQLRQ H[FKDQJH UHVLQ PHPEUDQHV $(50Vf FRXOG EH LQVWUXPHQWDO LQ GHYHORSLQJ IHUWLOL]HU UHFRPPHQGDWLRQV RU LPSURYLQJ VRLO RUJDQLF PDWWHU PDQDJHPHQW WR PDLQWDLQ 3 DYDLODELOLW\ GXULQJ SHULRGV RI KLJK SURGXFWLYLW\ DQG GHPDQG 7KH SUHVHQW VWXG\ LV SDUW RI D ODUJHU SURMHFW H[DPLQLQJ SKRVSKRUXV F\FOLQJ LQ DQ HLJKW\HDUROG IDUPHUPDQDJHG $PD]RQLDQ DJURIRUHVW 7KH REMHFWLYH ZDV WR PRQLWRU UHVLQH[WUDFWDEOH VRLO 3 PRQWKO\ XVLQJ DQLRQ H[FKDQJH UHVLQ PHPEUDQHV $(50Vf RYHU PRQWKV LQ WKH DJURIRUHVW WR GHWHUPLQH LI FKDQJHV LQ 3 DYDLODELOLW\ ZHUH UHODWHG WR Df IDFWRUV FRQWUROOLQJ RUJDQLF PDWWHU GHFRPSRVLWLRQ VXFK DV SUHFLSLWDWLRQ VRLO PRLVWXUH DQG WHPSHUDWXUH DV ZHOO DV OLWWHU TXDOLW\ DQG Ef VHDVRQDO IOXFWXDWLRQV LQ DJURIRUHVW SURGXFWLYLW\ DQG 3 UHTXLUHPHQWV 'HFRPSRVLWLRQ DQG & 1 DQG 3 G\QDPLFV LQ OHDI OLWWHU IURP WKH V\VWHPfV WZR SULPDU\ SHUHQQLDO FRPSRQHQWV ZHUH VWXGLHG WR GHWHUPLQH LI VRLO 3 DYDLODELOLW\ PLJKW EH UHODWHG WR VSHFLHV GLIIHUHQFHV LQ Df OLWWHU TXDOLW\ VSHFLILFDOO\ LQLWLDO OHDI 1 DQG 3 FRQWHQWV DQG &WR1 DQG &WR3 UDWLRV DQG FRQVHTXHQWO\ Ef GLIIHULQJ UDWHV RI 3 UHOHDVH RU LPPRELOL]DWLRQ IURP RUJDQLF PDWWHU

PAGE 102

0HWKRGV 7KH 6WXG\ 6LWH 7KH VWXG\ WRRN SODFH RQIDUP LQ D KHFWDUH HLJKWYHDUROG SHDFK SDOP %DFWULV *DHVLSDHV .XQWKfFXSXDVVX 7KHREURPD JUDQGLIORQLPf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fV PHWHRURORJLFDO VWDWLRQ 8)$& XQSXEOLVKHGf FRPSDULQJ PRQWKO\ UDLQIDOO DQG PHDQ GDLO\ WHPSHUDWXUHV LQ WKH UHJLRQ GXULQJ WKH VWXG\ SHULRG ZLWK HOHYHQ\HDU DYHUDJHV DUH SUHVHQWHG LQ )LJV OD DQG E 7KH UHJLRQfV VRLOV DUH W\SLFDOO\ 2[LVROV RU 8OWLVROV 6RLO RQ WKLV SDUWLFXODU VLWH ZDV LGHQWLILHG

PAGE 103

2 Df Of§ &' J e B e i 4 X 4B 2FW 'HF )HE $SU -XQ $XJ 2FW 0RQWK )LJ Df 0RQWKO\ UDLQIDOO DQG Ef PHDQ GDLO\ WHPSHUDWXUHV IURP 2FWREHU WKURXJK 6HSWHPEHU FRPSDUHG WR \HDU DYHUDJHV s RQH VWDQGDUG GHYLDWLRQf LQ 5LR %UDQFR $HU %UD]LO NP HDVW RI WKH DJURIRUHVW VLWH LQ 1RYD &DOLIRUQLD $HU 8)$& XQSXEOLVKHGf 2FW 'HF )HE $SU -XQ $XJ 2FW

PAGE 104

DV D FOD\H\ b FOD\ FPf PLOGO\ DFLGLF S+ f 7\SLF .DQGLXVXOW ZLWK KLJK EDVH VDWXUDWLRQ b FPf EXW ORZ FRQFHQWUDWLRQV RI GLOXWHDFLGIORXULGH PJ NJn FPf DQG UHVLQH[WUDFWDEOH WR H[KDXVWLRQ PJ NJn FPf 3L &KDSWHU f 7KH WRWDO 3 FRQWHQW LQ WKH WRS FP RI VRLO IURP WKH VWXG\ VLWH ZDV PJ NJn DQG VRLOV IURP HLJKW VL[\HDU ROG DJURIRUHVWV ZLWKLQ D NP UDGLXV RI WKH VWXG\ VLWH KDG VLPLODUO\ ORZ FRQFHQWUDWLRQV RI H[WUDFWDEOH 3L DQG WRWDO 3 FRQWHQWV &KDSWHU f 3HULRGV RI +LJK 3URGXFWLYLW\ /LWWHUIDOO DQG )UXLW 3URGXFWLRQ 3HDN OLWWHUIDOO DQG IUXLW KDUYHVWV ZHUH XVHG DV DQ LQGLFDWLRQ RI SHULRGV RI KLJK SURGXFWLYLW\ DQG UHVRXUFH GHPDQG LQ WKH DJURIRUHVW 2YHU RQH \HDU IUHVKO\ IDOOHQ OLWWHU IURP WKH DJURIRUHVWfV SHUHQQLDO FRPSRQHQWV ZDV FROOHFWHG ELZHHNO\ IURP UDQGRPO\ ORFDWHG P PHVK WUDSV SHU EORFNf LQVWDOOHG P IURP WKH VRLO VXUIDFH 7KH OLWWHU ZDV VRUWHG DQG ZHLJKHG E\ VSHFLHV DQG SODQW SDUW $OO IUXLW KDUYHVWHG E\ IDUPHUV IURP WKH ILYH EORFNV ZDV DOVR ZHLJKHG 6XEVDPSOHV DSSUR[LPDWHO\ J SHU EORFN SHU FROOHFWLRQf RI ERWK OLWWHU DQG IUXLW ZHUH SRROHG E\ PRQWK RYHQGULHG DW r& UHZHLJKHG IRU ZDWHU FRQWHQW GHWHUPLQDWLRQ DQG JURXQG WR SDVV WKURXJK D PP PHVK VLHYH 7KH WLVVXH 3 FRQWHQW ZDV GHWHUPLQHG E\ EORFNGLJHVWLQJ D PJ VDPSOH RI WKH JURXQG SODQW PDWHULDO ZLWK FRQFHQWUDWHG +6+ DW r & 7KRPDV HW DO f DQG DQDO\]LQJ WKH FOHDUHG VXSHUQDWDQW IRU 3n XVLQJ LQGXFWLYHO\ FRXSOHG DUJRQ SODVPD ,&$3f VSHFWURVFRS\ /LWWHU 'HFRPSRVLWLRQ & 1 DQG 3 '\QDPLFV DQG 7XUQRYHU 7KH VWDQGLQJ VWRFN RI OLWWHU PDVV RQ WKH DJURIRUHVW IORRU ZDV HVWLPDWHG E\ VSHFLHV DV WKH PHDQ RI RQH HYHU\ WKUHH PRQWKVf FROOHFWLRQV IURP UDQGRPO\ORFDWHG FP TXDGUDWV SHU EORFNf &RQFXUUHQW ZLWK WKH VHDVRQ RI SHDN ILQH OLWWHUIDOO IUHVKO\ IDOOHQ OHDI

PAGE 105

OLWWHU IURP SHDFK SDOP DQG FXSXDVVX WUHHV ZDV FROOHFWHG WKH ILUVW ZHHN RI 2FWREHU 7KH VDPSOHV ZHUH DLUGULHG SULRU WR SODFHPHQW LQ [ FP Q\ORQ EDJV PHVK VL]H UUUQU f %HFDXVH SHDFK SDOP OHDYHV DWWDLQ XS WR P LQ OHQJWK LQFOXGLQJ SHWLROHf D FURVV VHFWLRQ FP LQ OHQJWK ZDV FXW IURP DSSUR[LPDWHO\ WKH PLGGOH RI HDFK OHDI VR WKDW WKH VDPSOH LQ HDFK GHFRPSRVLWLRQ EDJ FRQWDLQHG FP RI ZKROH UDFKLV DQG SLQQD IURP RQH SDOP OHDI 7KLV ZDV HTXDO WR s J GU\ OHDI PDVV SHU GHFRPSRVLWLRQ EDJ &XSXDVVX OHDYHV W\SLFDOO\ FXUO OHQJWKZLVH VKRUWO\ DIWHU DEVFLVLQJ IURP WKH WUHH $SSUR[LPDWHO\ WR HQWLUH FXUOHGf FXSXDVVX OHDYHV RU s J GU\ OHDI PDVV ZHUH SODFHG LQ HDFK FXSXDVVX GHFRPSRVLWLRQ EDJ $OWKRXJK WKH GU\ PDVV SODFHG LQ GHFRPSRVLWLRQ EDJV GLIIHUHG EHWZHHQ WKH WZR VSHFLHV WKH EDJV ZHUH ILOOHG VR WKDW WKH HQWLUH VXUIDFH DUHD FPf ZDV ILOOHG XQLIRUPO\ ZLWK RQH OD\HU RI OHDI PDWHULDO $ WRWDO RI EDJV SHU VSHFLHV ZHUH SODFHG LQ WKH ILHOG GXULQJ WKH VHFRQG ZHHN LQ 2FWREHU RQH IRU HYHU\ DQWLFLSDWHG ELPRQWKO\ FROOHFWLRQ LQ WKUHH UDQGRPO\VHOHFWHG ORFDWLRQV LQ DOO ILYH DJURIRUHVW SORWV 2QH EDJ SHU VSHFLHV SHU VXESORW ORFDWLRQ ZDV FROOHFWHG IRU GU\ PDWWHU DQG QXWULHQW FRQWHQW GHWHUPLQDWLRQ HYHU\ WZR PRQWKV EHJLQQLQJ LQ 'HFHPEHU )LIWHHQ VDPSOHV RI ERWK VSHFLHV ZHUH ZHLJKHG RYHQGULHG DW r& WR D FRQVWDQW ZHLJKW UHZHLJKHG WR GHWHUPLQH WKH LQLWLDO GU\ PDVV RI OHDI OLWWHU DQG JURXQG 7KHVH VDPSOHV ZHUH XVHG WR FDOFXODWH D FRUUHFWLRQ IDFWRU IRU WKH GU\ PDWWHU FRQWHQW RI EDJJHG QRQRYHQGULHG OHDYHV /HDI OLWWHU 3 FRQWHQW ZDV DQDO\]HG LQ WKH VDPH PDQQHU XVHG IRU OLWWHUIDOO DQG IUXLW 7KH 1 DQG & FRQWHQWV RI JURXQG OHDI OLWWHU ZHUH TXDQWLILHG DIWHU 'XPDV FRPEXVWLRQ LQ D &DUOR (UED 1$ &t1 DQDO\]HU 'U\ PDWWHU 3 1 DQG &

PAGE 106

FRQWHQWV RI OLWWHU VDPSOHV UHWULHYHG IURP WKH ILHOG HYHU\ WZR PRQWKV ZHUH DQDO\]HG LQ WKH VDPH PDQQHU $OO FKHPLFDO DQDO\VHV ZHUH FRQGXFWHG LQ WULSOLFDWH 0DVV ORVV IURP GHFRPSRVLQJ OHDI OLWWHU ZDV DQDO\]HG XVLQJ 2OVRQfV f VWDQGDUG H[SRQHQWLDO GHFD\ IXQFWLRQ ;;T H NO ZKHUH ;;T LV WKH IUDFWLRQ RI LQLWLDO PDVV UHPDLQLQJ ; LV WKH OLWWHU PDVV DW WLPH W ;f LV WKH LQLWLDO PDVVf W LV WLPH DQG N LV WKH GHFD\ FRQVWDQW WKH VORSH RI WKH OLQHDU UHJUHVVLRQf ILW WR OLWWHU IRU HDFK VSHFLHV 7XUQRYHU Nf RI OHDI OLWWHU RI HDFK VSHFLHV ZDV FRPSDUHG WR WRWDO OLWWHUIDOO WXUQRYHU RU PHDQ UHVLGHQFH WLPHf FDOFXODWHG DV WKH TXRWLHQW RI WKH VSHFLHVf PHDQ IRU DQQXDO VWDQGLQJ OLWWHU VWRFN DQG WRWDO DQQXDO OLWWHUIDOO 7XUQRYHU FDOFXODWHG DV N DVVXPHV WKDW OLWWHUIDOO DQG DFFXPXODWLRQ RQ WKH IRUHVW IORRU LV DW VWHDG\VWDWH 6LQJK DQG *XSWD f &KDQJHV LQ FKHPLFDO FRPSRVLWLRQ LQ OHDI OLWWHU RYHU WLPH ZHUH DQDO\]HG XVLQJ DEVROXWH YDOXHV RI & 1 DQG 3 FRQWHQWV FDOFXODWHG DV WKH HOHPHQWDO FRQFHQWUDWLRQV RI OHDI OLWWHU IURP WKH LQLWLDO DQG VXEVHTXHQW ELPRQWKO\ FROOHFWLRQV PXOWLSOLHG E\ WKH IUDFWLRQ RI WKH RULJLQDO OLWWHU PDVV UHPDLQLQJ DQG H[SUHVVHG DV D SHUFHQW RI WKH RULJLQDO & 1 RU 3 IUDFWLRQ FRQWHQW )OXFWXDWLRQV LQ 6RLO 3 $YDLODELOLW\ $QLRQ H[FKDQJH UHVLQ PHPEUDQHV $(50Vf ZHUH XVHG WR PRQLWRU PRQWKO\ IOXFWXDWLRQV LQ fELRDYDLODEOHf 3 RU VROXWLRQ 3L LQ WKH WRS FP RI PLQHUDO VRLO SDUWLFXODUO\ FKDQJHV LQ 3 DYDLODELOLW\ DVVRFLDWHG ZLWK OLWWHU GHFRPSRVLWLRQ RQ WKH DJURIRUHVW IORRU 6SHFLILFDOO\ $(50V ZHUH XVHG WR GHWHUPLQH LI DJURIRUHVW VRLO 3L DYDLODELOLW\ f YDULHG LQ UHVSRQVH WR SHULRGV RI KLJK SURGXFWLYLW\ ZKHQ 3 GHPDQGV DUH JUHDWHU LQ WKH V\VWHP f IOXFWXDWHG VHDVRQDOO\ LQ UHVSRQVH WR FKDQJHV LQ SUHFLSLWDWLRQ VRLO PRLVWXUH DQG

PAGE 107

WHPSHUDWXUH DQG f GLIIHUHG EHWZHHQ URRW PDW RUJDQLF PDWWHU EDUH PLQHUDO VRLO DQG VRLO FRYHUHG ZLWK IDOOHQ OLWWHU 7KH URRW PDW RI SHDFK SDOP ULVHV XS WR PHWHU DERYH WKH VRLO VXUIDFH HQFLUFOLQJ WKH PXOWLSOH VWHPV RI HDFK LQGLYLGXDO )DOOHQ OHDYHV DQG UHSURGXFWLYH SDUWV DFFXPXODWH DQG GHFRPSRVH LQ WKLV VXSHUILFLDO PDW RI DGYHQWLWLRXV URRWV SRWHQWLDOO\ SURYLGLQJ D QRQVRLO VRXUFH RI QXWULHQWV IRU XSWDNH E\ WKH SDOP 0HWKRGV IRU PHPEUDQH SUHSDUDWLRQ DQG SODFHPHQW ZHUH VLPLODU WR WKRVH GHVFULEHG E\ &RRSHUEDQG DQG /RJDQ f )RU HDFK PRQWKO\ PHDVXUHPHQW FP [ FPf VWULSV ZHUH FXW IURP RQH FP $(50 VKHHW W\SH 8 ,RQLFV :DWHUWRZQ 0$f DQG ULQVHG ZLWK GHLRQL]HG ZDWHU ', )/2f 7KLV VL]H VWULS FRQWDLQV DSSUR[LPDWHO\ J GU\ UHVLQ DQG KDV WKH FDSDFLW\ WR VRUE PJ 3 $IWHU DWWDFKLQJ D WKUHDG WR WKH HQG RI HDFK VWULS WKH PHPEUDQHV ZHUH HOXWHG ZLWK 0 &+&221+ DPPRQLXP DFHWDWHf IRU KRXUV DQG WKHQ UHULQVHG ZLWK ', )/2 WR UHPRYH H[FHVV VROXWLRQ &RRSHUEDQG HW DO ,Q SUHVVf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fV VXSHUILFLDO URRW

PAGE 108

PDW WR PRQLWRU 3 DYDLODELOLW\ LQ WKLV QRQVRLOURRW LQWHUIDFH %\ )HEUXDU\ WKH RUJDQLF PDWWHU LQ WKH SDOP URRW PDW KDG GLVDSSHDUHG FRPSOHWHO\ OHDYLQJ QRWKLQJ EXW EDUH URRWV VR PHPEUDQH SODFHPHQW ZDV GLVFRQWLQXHG LQ WKLV ORFDWLRQ XQWLO 6HSWHPEHU ZKHQ OLWWHUIDOO KDG DJDLQ DFFXPXODWHG LQ WKH URRW PDWV )URP )HEUXDU\ WKURXJK 1RYHPEHU $(50V ZHUH SODFHG DV GHVFULEHG DERYHf LQ EDUH PLQHUDO VRLO LQ DJURIRUHVW DOOH\V DQG LQ VRLO FRYHUHG E\ IDOOHQ OHDI OLWWHU EHQHDWK WKH FDQRSLHV RI SHDFK SDOP DQG FXSXDVVX )RXU PHPEUDQH VWULSV SHU VRLO ORFDWLRQ DOOH\ FXSXDVVX SDOPf ZHUH SODFHG LQ HDFK SORW DQG WKH UDQGRPO\ VHOHFWHG ORFDWLRQV FKDQJHG HDFK PRQWK 7KURXJKRXW WKH PRQWK VWXG\ SHULRG PHPEUDQHV LQ DOO ORFDWLRQV ZHUH UHPRYHG DIWHU GD\V ULQVHG WKRURXJKO\ ZLWK ', + WR UHPRYH GHEULV SODFHG LQ SRO\SURSRLHQH YLDOV ILOOHG ZLWK PO ', + SOXV RQH GURS b PHUFXULF FKORULGH WR SUHYHQW EDFWHULDO DQG IXQJDO JURZWKf DQG UHIULJHUDWHG XQWLO H[WUDFWLRQ 7ZHOYH PHPEUDQH VWULSV SHU PRQWK ZHUH UHVHUYHG IRU XVH DV EODQNV DQG RWKHUZLVH WUHDWHG H[DFWO\ WKH VDPH DV WKRVH SODFHG LQ VRLO 2UWKRSKRVSKDWH VRUEHG RQWR WKH $(50V ZDV H[WUDFWHG H[FKDQJHG"f E\ VKDNLQJ HDFK PHPEUDQH ZLWK PO 0 &+&221+ LQ D PO FHQWULIXJH WXEH RQ D UHFLSURFDWLQJ VKDNHU IRU WZR KRXUV 7KH PHPEUDQHV ZHUH UHPRYHG IURP VROXWLRQ DQG WKH H[WUDFWV ZHUH DQDO\]HG IRU 3L FRQFHQWUDWLRQV FRORULPHWULFDOO\ XVLQJ WKH PRO\EGDWH EOXH PHWKRG 0XUSK\ DQG 5LOH\ f RQ D 0LOWRQ 5R\ 6SHFWURQLF VSHFWURSKRWRPHWHU 3KRVSKRUXV FRQFHQWUDWLRQV SHU PO RI H[WUDFW ZHUH H[SUHVVHG RQ D SHU PHPEUDQH EDVLV fJ PHPEUDQHnf RU SHU NJ UHVLQ DIWHU VXEWUDFWLQJ PHDQ PRQWKO\ 3L FRQFHQWUDWLRQV LQ H[WUDFWV IURP PHPEUDQH EODQNV 3KRVSKRUXV FRQFHQWUDWLRQV IURP ILHOG PHPEUDQH H[WUDFWV WKDW ZHUH ORZHU WKDQ WKDW RI EODQNV ZHUH FRQVLGHUHG WR EH ]HUR

PAGE 109

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f 2UWKRJRQDO FRQWUDVWV ZHUH XVHG WR LGHQWLI\ VSHFLILF GLIIHUHQFHV LQ 3 DYDLODELOLW\ DPRQJ PHPEUDQH ORFDWLRQV DQG PRQWKV 7R DQDO\]H WKH GLIIHUHQFH LQ RYHUDOO VRLO 3 DYDLODELOLW\ FRPSDUHG WR WKDW IRXQG LQ URRW PDW RUJDQLF PDWWHU $(503 YDOXHV ZHUH SRROHG DFURVV WKH VRLO PHPEUDQH ORFDWLRQV FXSXDVVX OLWWHU SHDFK SDOP OLWWHU DQG EDUH PLQHUDO VRLOf E\ PRQWK DQG XVHG LQ D WZRZD\ $129$ PRGHO 7KH PRQWKV GXULQJ ZKLFK URRW PDW 3 DYDLODELOLW\ ZDV QRW PHDVXUHG ZHUH HOLPLQDWHG IURP WKH DQDO\VLV 5HJUHVVLRQ DQDO\VHV ZHUH XVHG WR GHWHUPLQH LI PRQWKO\ FKDQJHV LQ GU\ PDWWHU DQG DEVROXWH PDVV RI & 1 DQG 3 DV ZHOO DV WKH GHFRPSRVLWLRQ FRQVWDQW .f RI OHDI OLWWHU GLIIHUHG EHWZHHQ WKH WZR DJURIRUHVW FRPSRQHQWV $ WWHVW ZDV XVHG WR GHWHUPLQH LI LQLWLDO DQG ILQDO & 1 DQG 3 FRQFHQWUDWLRQV RI OHDI OLWWHU GLIIHUHG EHWZHHQ WKH WZR VSHFLHV /LWWHUIDOO DQG IUXLW KDUYHVW GDWD UHSUHVHQW WKH PRQWKO\ PHDQ RI ILYH EORFNV s RQH VWDQGDUG HUURU D VWDWLVWLFDO WHVW FRXOG QRW EH SHUIRUPHG RQ WKHVH GDWD GXH WR WKH ODFN RI LQGHSHQGHQFH DPRQJ EORFNV

PAGE 110

5HVXOWV /LWWHUIDOO DQG )UXLW 3URGXFWLRQ &RPELQHG OLWWHUIDOO DQG IUXLW SURGXFWLRQ LQ WKH DJURIRUHVW ZDV KLJKHVW GXULQJ WKH PLG UDLQ\ VHDVRQ PRQWKV RI -DQXDU\ DQG )HEUXDU\ ZKHQ D SHDN LQ SHDFK SDOP IUXLW KDUYHVW ZDV REVHUYHG )LJV OE DQG f )URP 1RYHPEHU WKURXJK 0DUFK WKH KHDYLHU RI WKH WZR SHDFK SDOP SURGXFWLRQ SHULRGV SDOP IUXLW KDUYHVW UDQJHG IURP s WR s J Pn +DUYHVW RI FXSXDVVX IUXLW ZDV FRQVLGHUDEO\ OHVV UDQJLQJ IURP s WR s J Pn GXULQJ WKH PRQWKV RI -DQXDU\ WKURXJK -XQH +RZHYHU PRQWKO\ FXSXDVVX OLWWHUIDOO SURGXFWLRQ SHDNHG GXULQJ WKLV SHULRG s WR s J UULf GXH WR WKH DEVFLVVLRQ RI DERUWHG IUXLW 2YHUDOO SURGXFWLYLW\ LQ WKH DJURIRUHVW ZDV ORZHVW GXULQJ -XQH DQG -XO\ WKH WZR GULHVW PRQWKV RI WKH VWXG\ SHULRG $XJXVW ZDV PDUNHG E\ XQVHDVRQDEO\ KLJK UDLQIDOO DQ LQFUHDVH LQ SHDFK SDOP OLWWHUIDOO WKH EHJLQQLQJ RI WKH VHFRQG VHDVRQ RI SHDFK SDOP IUXLW SURGXFWLRQ DQG D SHDN LQ FXSXDVVX OHDI OLWWHUIDOO 3HDFK SDOP OLWWHUIDOO ZDV KLJKHVW GXULQJ WKH HDUO\ UDLQ\ VHDVRQ PRQWKV RI 6HSWHPEHU DQG 2FWREHU 7RWDO OLWWHUIDOO SURGXFWLRQ E\ SHDFK SDOP DQG FXSXDVVX WUHHV RYHU D WZHOYHPRQWK SHULRG ZDV DQG J Pn UHVSHFWLYHO\ $ EUHDNGRZQ RI GU\ PDWWHU DQG & 1 DQG 3 FRQWHQWV RI WRWDO OLWWHUIDOO E\ VSHFLHV DQG SODQW SDUW LV SUHVHQWHG LQ &KDSWHU 'HFRPSRVLWLRQ DQG & 1 DQG 3 '\QDPLFV ,QLWLDO 3 FRQFHQWUDWLRQV RI OHDI OLWWHU FROOHFWHG LQ 2FWREHU ZHUH JUHDWHU IRU SHDFK SDOP s bf WKDQ IRU FXSXDVVX s bf EXW & FRQFHQWUDWLRQV ZHUH KLJKHU LQ WKH ODWWHU s bf WKDQ LQ WKH IRUPHU s bf 3 f $V

PAGE 111

%LRPDVV J Pnf 2FW 'HF )HE $SU -XQ $XJ 2FW ,, :$ I0 P =P P P $P :P PP )SS P SDOP OLWWHU OWO SDOP KDUYHVW FXSXDVVX OLWWHU FXSXDVVX KDUYHV PP n!c 0RQWK )LJ 0HDQ PRQWKO\ OLWWHUIDOO DQG IUXLW KDUYHVW E\ SHDFK SDOP DQG FXSXDVVX WZR SHUHQQLDO FRPSRQHQWV RI DQ HLJKW\HDUROG $PD]RQLDQ DJURIRUHVW &XSXDVVX OLWWHUIDOO PDVV LQFUHDVHG GXULQJ WKH UDLQ\ VHDVRQ EHFDXVH RI DQ LQFUHDVH LQ DERUWHG XQKDUYHVWHG IUXLW EXW SHDNUG OHDI OLWWHU SURGXFWLRQ RFFXUUHG LQ $XJXVW 'DWD DUH PRQWKO\ PHDQV IURP ILYH EORFNV sRQH VWDQGDUG HUURUf

PAGE 112

D UHVXOW WKH &WR3 UDWLR IRU FXSXDVVX OHDI OLWWHU ZDV QHDUO\ WLPHV JUHDWHU WKDQ WKDW RI WKH SDOP 3 f $IWHU PRQWKV WKH DEVROXWH PDVV RI 3 FRQWDLQHG LQ SHDFK SDOP OHDI OLWWHU ZDV b RI WKDW LQLWLDOO\ PHDVXUHG )LJ Df ZKHUHDV WKDW LQ FXSXDVVX OLWWHU LQFUHDVHG RYHU WLPH VR WKDW E\ WKH HQG RI WKH VWXG\ SHULRG WKLV VSHFLHVf OHDI OLWWHU 3 PDVV ZDV b JUHDWHU WKDQ WKDW LQLWLDOO\ PHDVXUHG )LJ Ef ,QLWLDO OHDI OLWWHU 1 FRQFHQWUDWLRQV bf GLG QRW GLIIHU EHWZHHQ WKH WZR VSHFLHV EXW WKH &WR1 UDWLR RI FXSXDVVX OLWWHU ZDV JUHDWHU WKDQ WKDW RI WKH SDOP 3 f 7KHUH ZDV QR VLJQLILFDQW FKDQJH LQ 1 PDVV RI FXSXDVVX OHDI OLWWHU WKURXJKRXW WKH FRXUVH RI PRQWKV DQG GHVSLWH VLPLODU LQLWLDO OHDI OLWWHU 1 FRQFHQWUDWLRQV PRQWKO\ ORVVHV RI1 PDVV IURP SHDFK SDOP OLWWHU ZHUH JUHDWHU WKDQ WKRVH IRU FXSXDVVX 3A f 6LPLODUO\ WKH IUDFWLRQ RI LQLWLDO & PDVV UHPDLQLQJ LQ SHDFK SDOP OHDI OLWWHU DIWHU PRQWKV s bf ZDV KDOI WKDW RI FXSXDVVX s bf ,QLWLDO 1 DQG 3 FRQFHQWUDWLRQV RI DEVFLVHG SHDFK SDOP OHDIOHWV s DQG s b UHVSHFWLYHO\f ZHUH KLJKHU WKDQ WKRVH RI WKH FRPSRVLWH QXWULHQW FRQWHQW RI UDFKLV DQG OHDIOHWV DQG WKH OHDIOHW IUDFWLRQ GHFRPSRVHG VR UDSLGO\ WKDW E\ WKH HQG RI WKH PRQWK VWXG\ RQO\ UDFKLV UHPDLQHG LQ WKH GHFRPSRVLWLRQ EDJV 7KURXJKRXW WKH VWXG\ SHULRG PRQWKO\ GHFUHDVHV LQ SHDFK SDOP OHDI OLWWHU GU\ PDWWHU DQG HOHPHQWDO PDVV ZHUH VLJQLILFDQWO\ JUHDWHU WKDQ WKRVH RI FXSXDVVX 3 f $IWHU RQH \HDU RQO\ b RI WKH LQLWLDO SHDFK SDOP OHDI OLWWHU PDVV UHPDLQHG LQ WKH GHFRPSRVLWLRQ EDJV FRPSDUHG WR b RI RULJLQDO PDVV UHPDLQLQJ LQ FXSXDVVX EDJV $FFRUGLQJO\ WKH GHFD\ FRQVWDQW Nf IRU SHDFK SDOP OHDI OLWWHU f ZDV ILYHIROG JUHDWHU WKDQ WKDW IRU FXSXDVVX f 3 f /HDI OLWWHU WXUQRYHU WLPH XVLQJ N DV DQ HVWLPDWH ZDV \HDUV IRU FXSXDVVX DQG XQGHU PRQWKV IRU SHDFK SDOP

PAGE 113

_ Y2 2f F nF ( &+ FR &2 2FW 'HF )HE $SU -XQ $XJ 2FW 0RQWK )LJ &KDQJHV LQ WKH DEVROXWH PDVV RI & 1 DQG 3 LQ GHFRPSRVLQJ OLWWHUIDOO OHDYHV IURP Df SHDFK SDOP DQG Ef FXSXDVVX WUHHV 'DWD DUH PRQWKO\ PHDQV IURP ILYH EORFNV sRQH VWDQGDUG HUURUf

PAGE 114

(VWLPDWHV RI OLWWHU WXUQRYHU WLPHV FDOFXODWHG DV WKH TXRWLHQW RI VWDQGLQJ OLWWHU WR WRWDO DQQXDO OLWWWHUIDOO RU PHDQ UHVLGHQFH WLPH GLIIHUHG IURP N 7KH WXUQRYHU WLPH RI DOO FXSXDVVX OLWWHUIDOO LQFOXGLQJ UHSURGXFWLYH SDUWV \Uf ZDV WLPHV OHVV WKDQ WKDW SUHGLFWHG IRU OHDI OLWWHU DORQH XVLQJ N 7DEOH f 7KH PHDQ UHVLGHQFH WLPH RI WRWDO SHDFK SDOP OLWWHUIDOO LQFOXGLQJ ZRRG\ SHWLROHV \Uf ZDV JUHDWHU WKDQ WKDW SUHGLFWHG IRU OHDYHV LQ GHFRPSRVLWLRQ EDJV \Uf 7RWDO VWDQGLQJ OLWWHU PDVV RI HLWKHU VSHFLHV GLG QRW GLIIHU DPRQJ WKH IRXU VDPSOLQJ GDWHV 7DEOH 'U\ PDWWHU 3 DQG 1 FRQWHQW DQG WXUQRYHU WLPHV RI VWDQGLQJ VWRFN OLWWHU DQG WRWDO DQQXDO OLWWHUIDOO IRU WKUHH $PD]RQLDQ DJURIRUHVW VSHFLHV 6WRFNV DQG IOX[HV RI 3 DQG 1 ZHUH FDOFXODWHG DV WKH SURGXFW RI GU\ PDVV DQG QXWULHQW FRQWHQW IRU HDFK VSHFLHV DQG SODQW SDUW 7XUQRYHU ZDV WKH TXRWLHQW RI VWDQGLQJ VWRFN OLWWHU DQG OLWWHUIDOO 'DWD DUH PHDQV RI ILYH EORFNV s RQH VWDQGDUG HUURUf 3HDFK 3DOP &XSXDVVX 6WDQGLQJ VWRFN OLWWHU J Pnf s s 6WDQGLQJ VWRFN OLWWHU 3 J Pnf 6WDQGLQJ VWRFN OLWWHU 1 J Pnf 7RWDO OLWWHUIDOO J Pn \Unf s s /LWWHUIDOO 3 IOX[ J Pn \Unf /LWWHUIDOO 1 IOX[ J Pn \Unf /LWWHU WXUQRYHU WLPH \Uf /LWWHU 3 WXUQRYHU WLPH \Uf /LWWHU 1 WXUQRYHU WLPH \Uf 7HPSRUDO )OXFWXDWLRQV LQ 6RLO 3 $YDLODELOLW\ 0RQWKO\ YDOXHV IRU $(503 DYHUDJHG DFURVV PHPEUDQH VRLO ORFDWLRQV IURP )HEUXDU\ WKURXJK 1RYHPEHU f IOXFWXDWHG VLJQLILFDQWO\ WKURXJKRXW WKH VWXG\ SHULRG

PAGE 115

2FW 'HF )HE $SU -XQ $XJ 2FW 0RQWK )LJ )OXFWXDWLRQV LQ VRLO 3 DYDLODELOLW\ LQ DQ HLJKW\HDUROG $PD]RQLDQ DJURIRUHVW PRQLWRUHG XVLQJ DQLRQ H[FKDQJH UHVLQ PHPEUDQHV Df DYHUDJHG DFURVV PHPEUDQH ORFDWLRQV IURP 2FWREHU WKURXJK 1RYHPEHU DQG Ef LQ EDUH PLQHUDO VRLO DQG VRLO FRYHUHG E\ HLWKHU SHDFK SDOP RU FXSXDVVX OLWWHU IURP )HEUXDU\ WKURXJK 1RYHPEHU 'DWD DUH PRQWKO\ PHDQV s RQH VWDQGDUG HUURUf

PAGE 116

6RLO 0RLVWXUH bf 0RQWK )LJ $YHUDJH PRQWKO\ PRLVWXUH DQG WHPSHUDWXUH s RQH VWDQGDUG HUURUf LQ WKH WRS FP RI VRLO RYHU PRQWK SHULRG LQ DQ HLJKW\HDUROG $PD]RQLDQ DJURIRUHVW V\VWHP 6RLO 7HPSHUDWXUH r&f

PAGE 117

HVSHFLDOO\ GXULQJ WKH UDLQ\ VHDVRQ ZKHQ PHPEUDQH 3 IHOO IURP XJ LQ 'HFHPEHU WR J LQ -DQXDU\ )LJ Df 3 f 2YHUDOO $(503 ZDV JUHDWHVW LQ 1RYHPEHU DQG 'HFHPEHU RI ZKLFK FRUUHVSRQGHG ZLWK WKH EHJLQQLQJ RI WKH UDLQ\ VHDVRQ ZKHQ PRQWKO\ SUHFLSLWDWLRQ VXUSDVVHG PPf DQG DQ LQFUHDVH LQ VRLO PRLVWXUH GXULQJ WKH ODWWHU PRQWK )LJV DQG f -DQXDU\fV GURS LQ $(503 FRLQFLGHG ZLWK DQ LQFUHDVH LQ SHDFK SDOP IUXLW KDUYHVW ZKLFK ODWHU SHDNHG WKH IROORZLQJ PRQWK )LJV DQG Df 'XULQJ WKH PLG WR ODWHUDLQ\ VHDVRQ )HEUXDU\ WKURXJK $SULOf $(503 LQFUHDVHG VRPHZKDW IURP LWV ORZ SRLQW LQ -DQXDU\ EXW UHPDLQHG EHORZ YDOXHV REVHUYHG GXULQJ WKH HDUO\ UDLQ\ VHDVRQ %\ WKH PLG GU\ VHDVRQ -XQH DQG -XO\f VRLO PRLVWXUH WHPSHUDWXUH DQG $(503 ZDV VLJQLILFDQWO\ ORZHU WKDQ WKDW PHDVXUHG GXULQJ WKH HDUO\ DQG PLG UDLQ\ VHDVRQV )LJV D DQG f 3 f ,Q $XJXVW DQ LQFUHDVH LQ $(50 3 ZDV REVHUYHG 3 f ZKLFK FRUUHVSRQGHG ZLWK DQ XQVHDVRQDEO\ KLJK DPRXQW RI SUHFLSLWDWLRQ DQG D ULVH LQ VRLO WHPSHUDWXUH %RWK UDLQIDOO DQG $(503 GURSSHG LQ 6HSWHPEHU DQG WKHQ URVH DJDLQ LQ 2FWREHU EXW VRLO PRLVWXUH FRQWHQW DQG WHPSHUDWXUH FRQWLQXHG WR LQFUHDVH IURP $XJXVW WKURXJK 2FWREHU 6SDWLDO )OXFWXDWLRQV LQ 3 $YDLODELOLW\ )URP )HEUXDU\ WKURXJK 1RYHPEHU DYHUDJH 3 DYDLODELOLW\ ZDV KLJKHU LQ VRLO FRYHUHG E\ SHDFK SDOP OLWWHU s J PHPEUDQHnf WKDQ LQ EDUH PLQHUDO VRLO s J PHPEUDQHnf 3  )LJ Ef 6SHFLILFDOO\ PHPEUDQH 3 ZDV JUHDWHU LQ VRLO EHQHDWK SDOP OLWWHU QHDU WKH KHLJKW RI WKH UDLQ\ VHDVRQ LQ )HEUXDU\ DQG GXULQJ WKH HDUO\ UDLQ\ VHDVRQ PRQWKV RI 2FWREHU DQG 1RYHPEHU 3 f ,Q JHQHUDO PHPEUDQH 3 LQ EDUH PLQHUDO VRLO GLG QRW GLIIHU IURP WKDW XQGHUO\LQJ FXSXDVVX

PAGE 118

OLWWHU H[FHSW GXULQJ WKH PRQWK RI $XJXVW ZKHQ WKHUH ZDV D VKDUS LQFUHDVH LQ 3 DYDLODELOLW\ IROORZHG E\ D GHFOLQH LQ 2FWREHU 3KRVSKRUXV DYDLODELOLW\ LQ VRLO FRYHUHG E\ SHDFK SDOP OLWWHU ZDV DOVR JUHDWHU WKDQ WKDW RI VRLO EHQHDWK IDOOHQ FXSXDVVX OHDYHV 3 f 'XULQJ WKH VHYHQ PRQWKV LQ ZKLFK LW ZDV SRVVLEOH WR PHDVXUH $(503 LQ WKH URRW PDW RI SHDFK SDOP PHPEUDQH 3 LQ WKH GHFRPSRVLQJ RUJDQLF PDWWHU DFFXPXODWHG LQ WKLV ORFDWLRQ ZDV DOZD\V JUHDWHU WKDQ WKDW IRXQG LQ EDUH PLQHUDO VRLO RU LQ VRLO FRYHUHG E\ IDOOHQ OLWWHU 3 7DEOH f 7DEOH 0RQWKO\ YDOXHV IRU ELRDYDLODEOH SKRVSKRUXV LQ RUJDQLF PDWWHU DFFXPXODWHG LQ WKH VXSHUILFLDO URRW PDW RI SHDFK SDOP DQG LQ WKH WRS FP RI EDUH PLQHUDO VRLO LQ DQ HLJKW \HDU ROG $PD]RQLDQ DJURIRUHVW $YDLODEOH 3 LV DOZD\V JUHDWHU LQ URRW PDW RUJDQLF PDWWHU 0RQWK %LRDYDLODEOH 3 J PHPEUDQHnf 2UJDQLF PDWWHU URRW PDWf 0LQHUDO VRLO DOO ORFDWLRQVf 2FWREHU f s s 1RYHPEHU f s s 'HFHPEHU f s s -DQXDU\ f s s 6HSWHPEHU f s s 2FWREHU f s s 1RYHPEHU f s s

PAGE 119

,OO 'LVFXVVLRQ /LWWHU 'HFRPSRVLWLRQ DQG 3 '\QDPLFV 0DQ\ VWXGLHV KDYH VKRZQ WKDW OLWWHU FKHPLFDO SURSHUWLHV VXFK DV OLJQLQ SRO\SKHQRO DQG WDQQLQ FRQFHQWUDWLRQV VLJQLILFDQWO\ LQIOXHQFH GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ UDWHV LQ WURSLFDO WUHH OLWWHU 3DOP DQG 6DQFKH] &RQVWDQWLQLGHV DQG )RZQHV 0HVTXLWD HW DO f 1HYHUWKHOHVV LQLWLDO 1 DQG 3 FRQFHQWUDWLRQV LQ OLWWHU DV ZHOO DV &WR1 DQG & WR3 UDWLRV RIWHQ SURYLGH D JRRG LQGLFDWLRQ RI OLWWHU ELRGHJUDGDELOLW\ 6ZLIW HW DO 7D\ORU HW DO &RUWH] HW DO f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b 3DOP DQG 6DQFKH] 0RQWDJQLQL HW DO &RUQHMR HW DO 6RQJZH HW DO %\DUG HW DO f 1HW LPPRELOL]DWLRQ DV LQGLFDWHG E\ DQ LQFUHDVH LQ OLWWHU QXWULHQW FRQWHQW DERYH SHUFHQW RI WKH RULJLQDO PDVV RFFXUV LQ VXEVWUDWHV GHILFLHQW LQ WKH QXWULHQWV QHHGHG E\ GHFRPSRVHUV IRU PHWDEROLF SURFHVVHV 3DOP DQG 6DQFKH] f DQG WKH GXUDWLRQ RI 3 LPPRELOL]DWLRQ LQ WURSLFDO WUHH OHDI OLWWHU KDV EHHQ VKRZQ WR YDU\ IURP D PRQWK WR VHYHUDO \HDUV 0RQWDJQLQL HW DO &RUQHMR HW DO 6RQJZH HW DO f 1HW 3 LPPRELOL]DWLRQ LQ FXSXDVVX OHDI OLWWHU SUHVXPDEO\ LQGXFHG E\ WKH LQLWLDOO\ ORZ 3FRQWHQW DQG KLJK &WR3 UDWLR RI WKLV VXEVWUDWH EHJDQ GXULQJ WKH PLGUDLQ\ VHDVRQ DW

PAGE 120

OHDVW IRXU PRQWKV DIWHU DEVFLVVLRQ IURP WKH WUHH DQG FRQWLQXHG WKURXJKRXW WKH VWXG\ SHULRG %HFDXVH LPPRELOL]DWLRQ WDNHV SODFH ZKHQ GHFRPSRVLQJ RUJDQLVPV XWLOL]H DQG DFFXPXODWH QXWULHQWV IURP WKH VRLO VROXWLRQ 3DOP DQG 6DQFKH] f WKH IDFW WKDW FXSXDVVX OHDYHV DFWHG DV D VLQN IRU 3 DV GHFRPSRVLWLRQ SURFHHGHG OLNHO\ H[SODLQV ZK\ $(503 LQ VRLO FRYHUHG E\ WKLV VSHFLHV OHDI OLWWHU ZDV JHQHUDOO\ ORZ ,Q FRQWUDVW QHW 3 PLQHUDOL]DWLRQ RFFXUUHG IURP EDJJHG SHDFK SDOP OHDI OLWWHU DV GHPRQVWUDWHG E\ D GHFUHDVH LQ OLWWHU 3 PDVV RYHU WLPH SHUKDSV EHFDXVH WKH LQLWLDO FRPSRVLWH 3 FRQFHQWUDWLRQ RI SDOP OHDIOHW DQG UDFKLV OLWWHU ZDV WZLFH DV KLJK DV WKDW RI FXSXDVVX DQG WKH &WR3 UDWLR ZDV DOVR VLJQLILFDQWO\ ORZHU ,Q DGGLWLRQ WKH KXQGUHGV RI VPDOO WHQGHU OHDIOHWV FRPSULVLQJ RYHU KDOI WKH PDVV RI D SHDFK SDOP OHDI SURYLGH D PXFK JUHDWHU VXUIDFH DUHD RI HGJH IRU GHFRPSRVHUV WR DWWDFN DQG WKLV XQGRXEWHGO\ IDFLOLWDWHV WKH EUHDNGRZQ DQG UHOHDVH RI QXWULHQWV IURP WKLV OLWWHU IUDFWLRQ &RQVHTXHQWO\ RYHUDOO $(503 ZDV JUHDWHU LQ VRLO FRYHUHG E\ SDOP OLWWHU WKDQ E\ WKDW RI WKH PRUH 3GHILFLHQW FXSXDVVX OHDYHV 7KH VWDQGLQJ OLWWHUOLWWHUIDOL TXRWLHQW XVHG WR HVWLPDWH WRWDO OLWWHUIDOO WXUQRYHU VXJJHVWV WKDW 3 PLQHUDOL]DWLRQ IURP FXSXDVVX VXUIDFH OLWWHU RFFXUV ZLWKLQ DSSUR[LPDWHO\ WKUHH PRQWKV 7KLV PD\ EH GXH WR LQ SDUW WKH IDFW WKDW WKH WXUQRYHU WLPH FDOFXODWHG DV WKH TXRWLHQW RI VWDQGLQJ OLWWHU DQG OLWWHUIDOO FRPSULVHG DOO IDOOHQ OLWWHU LQFOXGLQJ UHSURGXFWLYH SDQV WKDW KDYH UHODWLYHO\ KLJK 3 FRQFHQWUDWLRQV WR bf LQFUHDVLQJ WKH OLNHOLKRRG WKDW WKLV IUDFWLRQ GHFRPSRVHV PRUH UDSLGO\ WKDQ OHDI OLWWHU $ERUWHG FXSXDVVX IUXLW DFFRXQWHG IRU b RI OLWWHUIDOO PDVV EXW OHVV WKDQ b RI VWDQGLQJ OLWWHU VWRFN :KHQ PHDVXULQJ VRLO 3 DYDLODELOLW\ WKH $(50V ZHUH DOZD\V SODFHG LQ VRLO EHQHDWK FXSXDVVX OHDI OLWWHU +RZHYHU WKH ODFN RI GLIIHUHQFH LQ WKH VWDQGLQJ OLWWHU VWRFN DPRQJ WKH IRXU VDPSOLQJ

PAGE 121

GDWHV VXJJHVWV WKDW FXSXDVVX OLWWHU GRHV QRW DFFXPXODWH RQ WKH DJURIRUHVW IORRU RQ D \HDUO\ EDVLV DQG WKHUH ZDV VRPH HYLGHQFH WR VXJJHVW WKDW WKLV VSHFLHVf OHDI OLWWHU PD\ GHFRPSRVH PRUH UDSLGO\ WKDQ WKH UHVXOWV RI WKH OLWWHUEDJ VWXG\ LQGLFDWH $OWKRXJK WKH OLWWHUEDJ WHFKQLTXH LV ZLGHO\XVHG IRU HVWLPDWLQJ GHFRPSRVLWLRQ UDWHV DFNQRZOHGJHG VKRUWFRPLQJV RI WKLV PHWKRG LQFOXGH WKH H[FOXVLRQ RI VRLO PDFURIDXQD E\ WKH PHVK VL]H RI WKH EDJ PLFURFOLPDWH DOWHUDWLRQ DQG OHVV VRLO VXUIDFH FRQWDFW ZLWK EDJJHG OLWWHU 6ZLIW HW DO f 7KH LPSRUWDQW UROH RI VRLO LQYHUWHEUDWHV LQ WKH FRPPLQXWLRQ RI OLWWHU LV ZLGHO\ UHFRJQL]HG 6LQJK DQG *XSWD /DYHOLH HW DO f DQG ODUJH KROHV SUHVXPDEO\ FUHDWHG E\ LQVHFWV ZHUH UHJXODUO\ REVHUYHG LQ XQEDJJHGf FXSXDVVX OHDI OLWWHU 7KHVH KROHV ZHUH DEVHQW LQ OHDI OLWWHU FRQILQHG WR PHVK EDJV VXJJHVWLQJ WKDW PDFURIDXQD PD\ EH LPSRUWDQW GXULQJ WKH LQLWLDO VWDJHV RI FXSXDVVX OHDI GHFRPSRVLWLRQ 1HYHUWKHOHVV ORZHU LQLWLDO 3 FRQWHQWV DQG D KLJKHU &WR3 UDWLR RI IDOOHQ FXSXDVVX OHDYHV FRPSDUHG WR SHDFK SDOP GR VXJJHVW WKDW 3 UHOHDVH IURP WKLV IUDFWLRQ RI OLWWHU LV VORZHU WKDQ WKDW RI WKH SDOP 7KH ORZHU WXUQRYHU WLPH RI WRWDO SHDFK SDOP OLWWHUIDOO VWDQGLQJ OLWWHUOLWWHUIDLO TXRWLHQWf FRPSDUHG WR WKDW HVWLPDWHG IRU OHDI OLWWHU DORQH PD\ EH GXH WR WKH IDFW WKDW DSSUR[LPDWHO\ b RI IDOOHQ SHDFK OLWWHU ZDV FRPSULVHG RI ZRRG\ SHWLROHV WKDW KDYH YHU\ ORZ 1 FRQFHQWUDWLRQV s bf UHVXOWLQJ LQ D UHODWLYHO\ KLJK &WR1 UDWLR f FRPSDUHG WR WKDW RI OHDIOHWV DQG GLFRW OHDYHV WR f 7KH FKHPLFDO FRPSRVLWLRQ DQG SK\VLFDO VWUXFWXUH RI SDOP SHWLROHV ZKLFK DUH VHYHUDO FHQWLPHWHUV WKLFN OLNHO\ SUHFOXGHV UDSLG GHFRPSRVLWLRQ RI WKLV IUDFWLRQ 7KH DEVHQFH RI WKLV PRUH UHFDOFLWUDQW FRQVWLWXHQW RI SDOP OLWWHU IURP WKH GHFRPSRVLWLRQ EDJV PD\ H[SODLQ ZK\ WKH WXUQRYHU WLPH RI OHDI OLWWHU Nf ZDV JUHDWHU WKDQ WKDW RI VWDQGLQJ OLWWHU (ZHO f DWWULEXWHG WKH VORZ

PAGE 122

GHFRPSRVLWLRQ RI SDOP 2UELJQ\D VSSf OHDYHV WR VWUXFWXUDO FKDUDFWHULVWLFV )XUWKHUPRUH D FRPSDULVRQ RI SHDFK SDOP LLWWHUIDOO LQ 2FWREHU DQG LQ 2FWREHU VXJJHVWV WKDW OLWWHUIDOO LQ WKLV VSHFLHV KDG QRW \HW UHDFKHG D VWHDG\VWDWH DV LQGLFDWHG E\ JUHDWHU IDOOHQ OLWWHU GXULQJ WKH ODWWHU PRQWK DQG LQ VXFK FLUFXPVWDQFHV WXUQRYHU WLPHV ZRXOG EH XQGHUHVWLPDWHG +RZHYHU XVLQJ HLWKHU HVWLPDWH RI WXUQRYHU LW DSSHDUV WKDW SHDFK SDOP OLWWHU UHPDLQV RQ WKH DJURIRUHVW IORRU IRU OHVV WKDQ RQH \HDU $QLRQ 5HVLQ ([FKDQJH 0HPEUDQHV DQG 6RLO 3 $YDLODELOLW\ $V D FRPSRVLWH LQGH[ WKH $(50V DSSHDUHG DGHTXDWHO\ VHQVLWLYH WR GHWHFW PRQWKO\ IOXFWXDWLRQV LQ VRLO VROXWLRQ 3 GHVSLWH YHU\ ORZ FRQFHQWUDWLRQV RI GLOXWHDFLG IORXULGH DQG UHVLQH[WUDFWDEOH VRLO 3 7KH PRQWK DYHUDJH $(503 FRQWHQW H[WUDFWHG IURP PHPEUDQHV SODFHG LQ VRLO s J PHPEUDQHn RU PJ NJn UHVLQf ZDV PXFK ORZHU WKDQ YDOXHV UHSRUWHG E\
PAGE 123

KDV OLWWOH LI DQ\ FRQWDFW ZLWK VRLO XQWLO VPDOOHU IUDJPHQWV DUH ZDVKHG GRZQ WKURXJK WKH URRWV E\ UDLQIDOOf UHGXFLQJ WKH OLNHOLKRRG WKDW PLQHUDOL]HG 3 ZDV TXLFNO\ VRUEHG WR VRLO VROLGV &RRSHUEDQG DQG /RJDQ f QRWH WKDW 3 GLIIXVLRQ ZLWKLQ D UHVLQILOOHG EDJ PD\ GLIIHU IURP WKDW LQ WKH VRLO VROXWLRQ DQG XQOLNH WKH WZRGLPHQVLRQDO PHPEUDQHV 3 VRUEHG WR UHVLQV LQ D EDJ OLNHO\ KDV OHVV FRQWDFW ZLWK FOD\ VXUIDFHV %HFDXVH RI WKH KLJK VXUIDFH DUHD FRQWDFW EHWZHHQ VRLO DQG PHPEUDQH LW LV SRVVLEOH WKDW 3 VRUEHG RQWR $(50V LV UHH[FKDQJHG RU LPPRELOL]HG E\ PLFUREHV GXULQJ WKH GD\ ILHOG LQFXEDWLRQ SHULRG ,Q FRQWUDVW WR WKH DVVXPSWLRQ WKDW $(50V DFW DV LQILQLWH VLQNV IRU 3 &RRSHUEDQG DQG /RJDQ f GHPRQVWUDWHG WKDW WKH EHKDYLRU RI $(50V LQ VLWX LV LQIOXHQFHG E\ VRLO PLQHUDORJ\ 3 UHWHQWLRQ FDSDFLW\ DQG PLFURELDOELRORJLFDO GHPDQG 'XULQJ WKH GU\ VHDVRQ PRQWKV RI -XQH DQG -XO\ ZKHQ ERWK VRLO PRLVWXUH DQG WKXV 3 GLIIXVLRQ UDWHVf DQG $(503 ZHUH ORZ H[WUDFWV IURP PHPEUDQH EODQNV ZKLFK FRQWDLQHG WKH XVXDO WUDFH DPRXQW RI 3 RIWHQ KDG KLJKHU FRQFHQWUDWLRQV RI 3 WKDQ WKRVH H[WUDFWHG IURP ILHOGLQFXEDWHG PHPEUDQHV 7KLV VXJJHVWV WKDW WKH WUDFH FRQWDPLQDWLRQ RULJLQDWLQJ IURP WKH DPPRQLXP DFHWDWH HOXDQW XVHG WR VDWXUDWH WKH $(50V ZDV LPPRELOL]HG E\ PLFUREHV RU GHVRUEHG IURP WKH PHPEUDQHVf VXUIDFH GXULQJ WKH LQFXEDWLRQ SHULRG 7KH IDFW WKDW $(50V SRWHQWLDOO\ EHKDYH DV G\QDPLF H[FKDQJHUV LQ ILHOG FRQGLWLRQV VKRXOG QRW GHWUDFW IURP WKHLU XVH DV D TXDOLWDWLYH FRPSRVLWH LQGH[ RI VRLO 3 DYDLODELOLW\ KRZHYHU LW PD\ SUHFOXGH WKHLU XVH IRU LQ VLWX PHDVXUHPHQW RI 3 PLQHUDOL]DWLRQ

PAGE 124

6SDWLDO DQG 7HPSRUDO )OXFWXDWLRQV LQ 6RLO 3 $YDLODELOLW\ )OXFWXDWLRQV LQ VRLO 3 DYDLODELOLW\ DSSHDU WR EH PRVW UHODWHG WR VHDVRQDO FKDQJHV LQ PRQWKO\ SUHFLSLWDWLRQ )RU H[DPSOH $(503 LV JUHDWHVW GXULQJ WKH HDUO\ UDLQ\ VHDVRQ PRQWKV RI ERWK DQG $V LQGLFDWHG E\ )LJ WKH VWXG\ UHJLRQf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b RI 1RYHPEHUnV SUHFLSLWDWLRQ IHOO LQ VL[ GD\V 8)$& XQSXEOLVKHGf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f ,Q WUHH SODQWDWLRQV DQG WHUUD ILUPH IRUHVW ORFDWHG LQ WKH FHQWUDO $PD]RQ %DVLQ 6PLWK HW DO

PAGE 125

f IRXQG WKDW DOWHUQDWH F\FOHV RI VRLOZHWWLQJ DQG GU\LQJ FDXVHG E\ VSRUDGLF UDLQIDOO DW WKH HQG RI WKH UDLQ\ VHDVRQ FRLQFLGHG ZLWK DQQXDO SHDNV LQ 1 PLQHUDOL]DWLRQ 6WXGLHV RI VRLOV LQ ,QGLD GHPRQVWUDWH WKDW SXOVHV LQ VRLO 1 DQG 3 DYDLODELOLW\ GXULQJ WKH EHJLQQLQJ RI WKH ZHW VHDVRQ ZHUH FRUUHODWHG ZLWK VLJQLILFDQW GHFUHDVHV LQ PLFURELDO ELRPDVV 6LQJK HW DO 5DJKXEDQVKL HW DO 0DLWKDQL HW DO f DQG 6ULYDVWDYD DQG 6LQJK f DWWULEXWHG D GHFOLQH RI PLFURELDO & 1 DQG 3 LQ VRLOV RI VHYHUDO WURSLFDO GU\ HFRV\VWHPV WR WKH O\VLV RI PLFURELDO FHOOV SURYRNHG E\ WKH RQVHW RI PRQVRRQDO UDLQV ,Q FRQWUDVW /XL]DR HW DO f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n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f 7KH $XJXVW ULVH LQ VRLO 3 DYDLODELOLW\ EHQHDWK FXSXDVVX OLWWHU DOVR FRLQFLGHG ZLWK D SHDN LQ WKLV VSHFLHVf OHDI OLWWHUIDOO DQG SHUKDSV 3 ZDV OHDFKHG RXW RI IUHVKO\ IDOOHQ OLWWHU SULRU WR WKH LQLWLDWLRQ RI GHFRPSRVLWLRQ DQG QHW 3 LPPRELOL]DWLRQ

PAGE 126

,W LV QRWDEOH WKDW $(503 GHFUHDVHG DQG UHPDLQHG ORZHU GXULQJ WKH PRQWKV IROORZLQJ SHDN FXSXDVVX OLWWHUIDOO ZKHQ LPPRELOL]DWLRQ RI 3 LQ GHFRPSRVLQJ FXSXDVVX OHDI OLWWHU PLJKW RFFXU DV FRQGLWLRQV IDYRUDEOH WR PLFURELDO SRSXODWLRQV DGHTXDWH PRLVWXUH DQG VXEVWUDWHf SHUVLVWHG 6LPLODUO\ GXULQJ WKH HDUO\ UDLQ\ VHDVRQ 2FWREHU DQG 1RYHPEHUf D VKDUS LQFUHDVH LQ $(503 RQ PHPEUDQHV SODFHG LQ VRLO FRYHUHG E\ SHDFK SDOP OHDI RFFXUUHG GXULQJ WKLV VSHFLHVf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f :KLOH WKH H[DFW VRLO ORFDWLRQV ZKHUH SHDNV LQ $(503 RFFXUUHG GXULQJ WKH PRQWKV RI 'HFHPEHU DQG -DQXDU\ DUH XQNQRZQ WKH UDQGRP GLVWULEXWLRQ RI PHPEUDQHV LQ VRLO GXULQJ WKLV SHULRG DOORZV IRU WKH SRVVLELOLW\ WKDW VRPH $(50V ZHUH SODFHG EHQHDWK GHFRPSRVLQJ OLWWHU ZKLFK ZRXOG VHUYH DV D VRXUFH RI KLJKHU 3 PLQHUDOL]DWLRQ

PAGE 127

3XOVHG 3 $YDLODELOLW\ DQG $JURIRUHVW 3URGXFWLYLW\ 5DJKXEDQVKL HW DO f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f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f IRXQG WKDW 1+ 1 ZDV LPPRELOL]HG LQ IRUHVW DQG VDYDQQD VRLOV GXULQJ WKH ZHW VHDVRQ LQ QRUWKHUQ %UD]LO 6LQJK HW DO f KRZHYHU GHPRQVWUDWHG WKDW PLFURELDO ELRPDVV LQ WURSLFDO GU\ IRUHVW DQG VDYDQQD ZDV KLJKHVW GXULQJ WKH GU\ VXPPHU ZKHQ SODQW GHPDQG IRU QXWULHQWV ZDV PLQLPDO DQG GHFUHDVHG FRQVLGHUDEO\ GXULQJ WKH UDLQ\ VHDVRQ K\SRWKHWLFDOO\ GXH WR FRQVXPSWLRQ RI PLFUREHV E\ QHPDWRGHV DQG SURWR]RD

PAGE 128

:KHWKHU RU QRW PLFURELDO GHPDQG LV KLJK GXPJ WKH ZHW VHDVRQ WKH UDLQ\ VHDVRQ LV REYLRXVO\ D SHULRG RI KLJK 3 GHPDQG E\ WKH DJURIRUHVWfV SHUHQQLDO FRPSRQHQWV DQG ORZ VRLO 3 DYDLODELOLW\ DW WKLV WLPH FRXOG DIIHFW WKH SURGXFWLRQ E\ WKH V\VWHPfV GLIIHUHQW FRPSRQHQWV GLIIHUHQWLDOO\ 3HDFK SDOP DSSHDUV WR HPSOR\ VHYHUDO PHFKDQLVPV IRU 3 DFTXLVLWLRQ VXFK DV DJJUHVVLYH URRW SUROLIHUDWLRQ UHVXOWLQJ LQ URRW JURZWK XS WR QLQH PHWHUV IURP WKH VWHP )HUUHLUD HW DO f DV ZHOO DV WKH PDLQWHQDQFH RI D VXSHUILFLDO URRW PDW WKDW HQWUDSV IDOOHQ OLWWHU ,Q SDUWLFXODU LW VHHPV OLNHO\ WKDW WKH KLJK 3 HQYLURQPHQW LQ WKH SHDFK SDOP URRW PDW LV PRVW HIIHFWLYHO\ H[SORLWHG E\ WKDW VSHFLHV DORQH LI WKHVH URRWV LQIDFW DUH SK\VLRORJLFDOO\ FDSDEOH RI LRQ DEVRUSWLRQ 2WKHU VWXGLHV GHPRQVWUDWH WKDW URRWV LQ VXSHUILFLDO PDWV GR WDNH XS LRQV DQG UHSUHVHQW DQ HIIHFWLYH VWUDWHJ\ IRU PRUH HIILFLHQW QXWULHQW DFTXLVLWLRQ :HQW DQG 6WDUN f ILUVW K\SRWKHVL]HG WKDW URRW JURZWK LQ VXSHUILFLDO PDWV DVVRFLDWHG ZLWK IDOOHQ OLWWHU OHG WR D PRUH HIILFLHQW UHFRYHU\ RI QXWULHQWV LQ WURSLFDO UDLQIRUHVWV DQG 6WDUN DQG -RUGDQ f GHPRQVWUDWHG WKDW OHVV WKDQ b RI 3 DSSOLHG WR WKH VXUIDFH RI QDWLYH IRUHVW URRW PDWV SDVVHG WKURXJK WKH URRW PDW LQWR WKH VRLO 6W -RKQ f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f ,Q DGGLWLRQ WKH WRWDO PDVV RI FXSXDVVX IUXLW DERUWHG J Pnf GXULQJ WKH UDLQ\ VHDVRQ ZDV DV JUHDW DV WKDW KDUYHVWHG J Pff WKURXJKRXW WKH VWXG\

PAGE 129

SHULRG DQG WKLV KLJK SURSRUWLRQ RI SUHPDWXUHO\ DEVFLVVHG IUXLW PD\ UHIOHFW D QXWULHQW GHILFLHQF\ 9HQWXUHLUL SHUV FRPP f &RQFOXVLRQV ,PSOLFDWLRQV IRU $JURIRUHVW 0DQDJHPHQW 7KH UHVXOWV RI WKLV VWXG\ LQGLFDWH WKDW VRLO 3 DYDLODELOLW\ LQ $PD]RQLDQ DJURIRUHVWV PD\ EH KLJKHVW DW WKH EHJLQQLQJ RI WKH UDLQ\ VHDVRQ ZKHQ ERWK OLWWHUIDLO DQG D F\FOH RI VRLOn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f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b RI WKLV VSHFLHVn IDOOHQ OLWWHU DSSHDU WR GHFRPSRVH DQG UHOHDVH ERWK 1 DQG 3 UDSLGO\ ZLWKLQ PRQWKV DQG FRQVHTXHQWO\ VRLO 3 DYDLODELOLW\ ZDV JUHDWHU EHQHDWK WKLV VSHFLHVf

PAGE 130

FDQRS\ ZKHUH IDOOHQ OLWWHU DFFXPXODWHV )XUWKHUPRUH WKH GHFRPSRVLWLRQ RI RUJDQLF PDWWHU WUDSSHG LQ WKH SHDFK SDOPfV VXSHUILFLDO URRW PDW DSSHDUV WR SURYLGH D QRQVRLO VRXUFH RI KLJK 3 DYDLODELOLW\ DQG LW LV SRVVLEOH WKDW WKLV KHWHURJHQHLW\ LQ 3 DYDLODELOLW\ LV PRVW HIIHFWLYHO\ H[SORLWHG E\ WKH SDOP LWVHOI :KLOH 3 LPPRELOL]DWLRQ LQ LQLWLDOO\ 3SRRU FXSXDVVX OHDI OLWWHU PD\ FRQWULEXWH WR ORZHUHG 3 DYDLODELOLW\ LQ VRLO EHQHDWK WKLV VSHFLHV OHDI OLWWHU LW DSSHDUV WKDW 3 LV UHOHDVHG UHODWLYHO\ UDSLGO\ IURP RWKHU IUDFWLRQV RI WKLV VSHFLHVf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f VXFK D GLUHFWHG DSSOLFDWLRQ PLJKW LQFUHDVH WKH FKDQFH WKDW WKH DGGHG 3 LV WDNHQ XS E\ URRWV DQG SHUKDSV PLQLPL]H VRUSWLRQ RQWR VRLO VROLGV %HFDXVH SHDFK SDOP OHDYHV DUH KLJKHU LQ 3 DQG GHFRPSRVH UDSLGO\ SK\VLFDOO\ SODFLQJ DEVFLVHG SDOP OHDYHV GLUHFWO\ XQGHU WKH FXSXDVVX FDQRS\ PD\

PAGE 131

UHSUHVHQW D UHODWLYHO\ HDV\ DQG ORZ FRVW ZD\ RI LQFUHDVLQJ 3 DYDLODELOLW\ WR FXSXDVVX )XUWKHU H[WHQGHG VWXG\ RI WKH VSDWLDO DQG WHPSRUDO IOXFWXDWLRQV LQ ERWK 3 DQG 1 DYDLODELOLW\ PD\ UHYHDO PRUH LQIRUPDWLRQ UHJDUGLQJ WKH PHFKDQLVPV EHKLQG SXOVHG QXWULHQW UHOHDVH LQ $PD]RQLDQ WUHHEDVHG HFRV\VWHPV DQG OHDG WR PRUH UHILQHG PDQDJHPHQW SUDFWLFHV WKDW HQKDQFH SURGXFWLYLW\ RI DOO FURS FRPSRQHQWV DV ZHOO DV VXVWDLQ V\VWHP SURGXFWLYLW\ LQ WKH IXWXUH

PAGE 132

&+$37(5 1(7 35,0$5< 352'8&7,9,7< 1,752*(1 $1' 3+263+2586 &<&/,1* ,1 $1 $0$=21,$1 $*52)25(67 1,1( <($56 )2//2:,1* )25(67 &219(56,21 ,QWURGXFWLRQ 7KH ZRUOGfV ODUJHVW UHJLRQ RI LQWDFW WURSLFDO IRUHVW DQ DUHD FRYHULQJ PLOOLRQ NPn OLHV LQ 6RXWK $PHULFDV $PD]RQ %DVLQ %URZGHU f 7ZRWKLUGV RI $PD]RQLD LV ORFDWHG LQ %UD]LO ZKHUH KLJK UDWHV RI GHIRUHVWDWLRQ RYHU WKH SDVW WZR GHFDGHV KDYH EHHQ GULYHQ SULPDULO\ E\ IRUHVW FOHDULQJ IRU SDVWXUH DQG VKLIWLQJ FXOWLYDWLRQ RI DQQXDO FURSV )HDUQVLGH 6HUDR HW DO f $OWKRXJK ZLGHVSUHDG WKHVH ODQGXVHV KDYH SURYHQ UHODWLYHO\ XQVXVWDLQDEOH RIWHQ UHVXOWLQJ LQ UDSLG VRLO GHJUDGDWLRQ ORZHUHG DJULFXOWXUDO SURGXFWLYLW\ IDUP IDLOXUH DQG ODQG DEDQGRQPHQW DOO RI ZKLFK OHDG WR FRQWLQXHG GHIRUHVWDWLRQ +HFKW DQG &RFNEXP 6NROH HW DO f 0RUH UHFHQWO\ FRPPHUFLDO SHUHQQLDO FURSEDVHG DJURIRUHVWU\ V\VWHPV KDYH HPHUJHG DV D SURPLVLQJ $PD]RQLDQ ODQGXVH DOWHUQDWLYH ZLWK WKH SRWHQWLDO WR UHGXFH VRLO GHJUDGDWLRQ LPSURYH OLYLQJ VWDQGDUGV DQG GHFUHDVH SUHVVXUHV RQ UHPDLQLQJ IRUHVWHG DUHDV 6PLWK HW DO f :KLOH DQQXDO DQG SHUHQQLDO FURSV KDYH WUDGLWLRQDOO\ EHHQ JURZQ WRJHWKHU LQ PXOWLVWRU\ WUHH JDUGHQV WKH SURGXFWLRQ RI KLJK YDOXH SHUHQQLDO FDVK FURSV LQ SODQWDWLRQ DJURIRUHVWV UHSUHVHQWV D UHODWLYHO\ QHZ SUDFWLFH LQ $PD]RQLD 1DLU DQG 0XVFKOHU 6PLWK HW DO f

PAGE 133

%RWK WKH SRWHQWLDO HFRQRPLF DQG HFRORJLFDO DGYDQWDJHV RI WUHHEDVHG DJURHFRV\VWHPV DULVH LQ SDUW IURP WKHLU ORQJHYLW\ ZKLFK SURPRWHV D PRUH FORVHG F\FOLQJ RI QXWULHQWV WKDW PD\ H[WHQG WKH SURGXFWLYLW\ RI ODQG DOUHDG\ FOHDUHG (ZHO 6PLWK f ,Q SULQFLSOH GHHS URRWHG SHUHQQLDOV LQWHUFHSW FDWLRQV DQG QLWUDWH RWKHUZLVH OHDFKHG IURP WKH VRLO VXUIDFH VWRULQJ DQG F\FOLQJ WKHVH QXWULHQWV LQ OLYLQJ ELRPDVV IDOOHQ OLWWHU DQG GHFD\LQJ ILQH URRWV ZKLOH UHGXFLQJ HURVLRQ ORVVHV E\ SK\VLFDOO\ SURWHFWLQJ WKH VRLO 1DLU
PAGE 134

V\VWHPV RIIHU JUHDWHU HFRORJLFDO VWDELOLW\ WKDQ VKLIWLQJ FXOWLYDWLRQ DQG H[WHQVLYH FDWWOH UDQFKLQJ IHZ VWXGLHV H[LVW RI QXWULHQW G\QDPLFV LQ $PD]RQLDQ DJURIRUHVWU\ V\VWHPV SHUKDSV EHFDXVH SHUHQQLDO FURSSLQJ V\VWHPV KDYH WUDGLWLRQDOO\ FRPSULVHG D PLQRU IUDFWLRQ RI WRWDO ODQGXVH LQ WKLV UHJLRQ %HQLWHV 9RVWL HW DO f 7KH IHZ GRFXPHQWHG H[DPSOHV RI VXFFHVVIXO DJURIRUHVWU\ SODQWDWLRQV LQ $PD]RQLD VXFK DV WKH EODFN SHSSHUEDVHG V\VWHPV LQ WKH -DSDQHVH VHWWOHPHQW RI 7RP$IX LQ HDVWHUQ %UD]LO 6XEOHU DQG 8KO f DQG DOOH\ FURSSLQJ WULDOV LQ
PAGE 135

FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV DPRQJ IDUPHUV LQ $HU DQG 5RQGQLD %UD]LO SURYLGHV DQ RSSRUWXQLW\ WR LQYHVWLJDWH SURGXFWLYLW\ DQG QXWULHQW F\FOLQJ LQ $PD]RQLDQ WUHHEDVHG DJURHFRV\VWHPV DQG WR EHJLQ DVVHVVLQJ WKH H[WHQW WR ZKLFK WKHVH V\VWHPV GR RIIHU D PRUH VXVWDLQDEOH DOWHUQDWLYH WR RWKHU ODQGXVHV LQ WKH UHJLRQ 7KLV VWXG\ RI RQIDUP QXWULHQW G\QDPLFV LQ DQ HLJKW \HDU ROG DJURIRUHVWU\ V\VWHP KDG WZR REMHFWLYHV )LUVW DJURIRUHVW DERYH DQG EHORZJURXQG QHW SULPDU\ SURGXFWLYLW\ 133f GHILQHG KHUH DV WKH DQQXDO DFFXPXODWLRQ RI RUJDQLF PDWWHU SHU XQLW RI ODQG ZDV TXDQWLILHG DQG FRPSDUHG WR GDWD UHSRUWHG IRU IRUHVWV DQG RWKHU ODQGXVHV 6HFRQGO\ WKH DJURIRUHVWfV VWRUHV DQG IOX[HV RI QLWURJHQ 1f DQG SKRVSKRUXV 3f ZHUH PHDVXUHG RYHU RQH \HDU WR FRQVWUXFW DQ DQQXDO EXGJHW DQG XVLQJ D PDVV EDODQFH DSSURDFK WR GHWHUPLQH KRZ PXFK RI WKH V\VWHPnV 1 DQG 3 UHTXLUHPHQW LV PHW WKURXJK LQWHUQDO F\FOLQJ WDNHQ XS IURP VRLO VWRUHV DQG UHPRYHG IURP WKH V\VWHP ZLWK FURS KDUYHVW 1LWURJHQ DQG SKRVSKRUXV ZHUH VWXGLHG VSHFLILFDOO\ EHFDXVH GHILFLHQFLHV RI WKHVH WZR QXWULHQWV FRQVWUDLQ DJULFXOWXUDO SURGXFWLYLW\ LQ b RI $PD]RQLDQ VRLOV 1LFKRODVHV HW DO f 7KH GDWD RQ DJURIRUHVW SURGXFWLYLW\ DQG 1 DQG 3 F\FOLQJ ZHUH WKHQ XVHG WR HYDOXDWH WKH SRWHQWLDO IRU FRPPHUFLDO SODQWDWLRQ DJURIRUHVWU\ V\VWHPV WR RIIHU D PRUH HFRORJLFDOO\ VXVWDLQDEOH DOWHUQDWLYH WR RWKHU $PD]RQLDQ ODQGXVHV 0HWKRGV 7KH 6WXG\ $UHD 7KH VWXG\ VLWH LV ORFDWHG LQ WKH UXUDO FRPPXQLW\ RI 1RYD &DOLIRUQLD ZKLFK OLHV RQ WKH ERUGHU RI WKH %UD]LOLDQ VWDWHV RI $HU DQG 5RQGQLD LQ WKH ZHVWHUQ $PD]RQ %DVLQ r6 r:f 7KH OLIH ]RQH LQ WKLV UHJLRQ LV KXPLG WURSLFDO IRUHVW +ROGULGJH f DQG WKH QDWLYH XSODQG WHUUD ILUPH IRUHVW FRPSULVHV ERWK GHFLGXRXV DQG HYHUJUHHQ EURDGOHDI WUHH VSHFLHV

PAGE 136

$YHUDJH DLU WHPSHUDWXUH LV r & DQG PHDQ DQQXDO UDLQIDOO RYHU WKH ODVW \HDUV LV DSSUR[LPDWHO\ PP ZLWK D WKUHHPRQWK GU\ SHULRG RFFXUULQJ IURP -XQH WKURXJK $XJXVW 8)$& XQSXEOLVKHGf 5HJLRQDO VRLO PDSV VKRZ D PDWUL[ RI\HOORZ /DWLVROV 2[LVROVf DQG UHG \HOORZ 3RG]ROLFV 8OWLVROVf ZKLFK DUH DFLGLF DQG ORZ LQ EDVH FDWLRQV DQG UHDGLO\H[WUDFWDEOH LQRUJDQLF 3 3Lf DV D UHVXOW RI LQWHQVH ZHDWKHULQJ 6RXVD f 3K\VLFDO DQG FKHPLFDO DQDO\VHV RI VRLO IURP WKH UHVHDUFK VLWH 7DEOH f GHPRQVWUDWH SURSHUWLHV FRQVLVWHQW ZLWK D FOD\ ORDP 7\SLF .DQGLXVWXOW 6RLO 6XUYH\ 6WDII f 7KH VWXG\ WRRN SODFH LQ DQ HLJKW\HDUROG SHDFK SDOP %DFWQV *DHVLSDHV .XQWKf FXSXDVVX 7KHREURPD JUDQGLIORUXP :LOOGHQRZ H[ 6SUHQJHOf 6FKXPDQQf%UD]LO QXW ^%HUWKROOHWLD H[FHOVD +XPE t %RQSOf DJURIRUHVWU\ V\VWHP 7KLV SDUWLFXODU V\VWHP ZDV HVWDEOLVKHG RQ RYHU IDUPV WKURXJKRXW WKH UHJLRQ LQ WKH ODWH nV E\ WKH 5(&$ (FRQRPLF 3DUWQHUVKLS IRU 5HIRUHVWDWLRQf SURMHFW D JURXS RI FRORQLVW IDUPHUV VHDUFKLQJ IRU D PRUH HFRQRPLFDOO\ DQG HFRORJLFDOO\ YLDEOH DOWHUQDWLYH WR RWKHU $PD]RQLDQ ODQGXVHV 3HDFK SDOP D IDVWJURZLQJ PXOWLVWHPPHG PRQRFRW LV SODQWHG E\ IDUPHUV IRU KHDUWRISDOP ZKLFK PD\ EH KDUYHVWHG ZLWKRXW NLOOLQJ WKH PDLQ VWHPf DQG LWV EHWDFDURWHQH DQG HQHUJ\ULFK IUXLWV &XSXDVVX LV D EURDGOHDI PLGGOH FDQRS\ FRPSRQHQW RI PDQ\ $PD]RQLDQ DJURIRUHVWV WKH SULPDU\ SURGXFW RI ZKLFK LV D FUHDP\ IUDJUDQW SXOS KDUYHVWHG IURP LWV ODUJH SRGV %UD]LO QXWV DUH DQ LPSRUWDQW $PD]RQLDQ FDVK FURS DOWKRXJK DW WKH WLPH RI WKLV VWXG\ WKLV VSHFLHV KDG QRW \HW EHJXQ IUXLW SURGXFWLRQ $OO WKUHH VSHFLHV DUH QDWLYH WR WKH UHJLRQfV IRUHVWV DQG DSSHDU WR WROHUDWH WKH DFLGLF QXWULHQWSRRU VRLOV WKDW XQGHUOLH WKH QDWLYH XSODQG WHUUDILUPH YHJHWDWLRQ /LNH PRVW RI WKH DJURIRUHVWU\ V\VWHPV LQ WKH UHJLRQ LW ZDV

PAGE 137

7DEOH 6RLO SURSHUWLHV DW ILYH VXFFHVVLYH GHSWKV IURP DQ HLJKW\HDU ROG $PD]RQLDQ DJURIRUHVW 'DWD DUH PHDQV s 6( 9DOXHV VWDWLVWLFDOO\ GLIIHUHQW IURP WKH GHSWK LPPHGLDWHO\ DERYH DUH LQGLFDWHG E\ DGMDFHQW 3 YDOXHV LQ SDUHQWKHVHV 'HSWK FPf %XON GHQVLW\ J FPnfE s s 6DQG bf s s 3f s s s 6LOW bf s s s s s &OD\ bf s s s 3£Of s s 2UJDQLF PDWWHU bf s s 3 f s 3f s 3f s 3A22Of S+ +f s s 3A2 2Of s s s %UD\ 3L PJ NJnf s s 3 f s 3Af s 1 'F 0HKOLFK 3L PJ NJf s s 3 f s s 1' 5HVLQ 3L PJ NJnf s s 3f 7RWDO & J NJnf s s 3 f 7RWDO 1 J NJf s s 3f 7RWDO 3 J NJnf s s 3f f

PAGE 138

7DEOH f§FRQWLQXHG 'HSWK FPf &D FPRONJf s s 3A f 0J FPRONJnf s 3 f FPRONJf s 3 f $ FPRONJf s (&(& FPRONJfr s 3f n$ RQHZD\ $129$ DQG RUWKRJRQDO FRQWUDVWV ZHUH XVHG WR LGHQWLI\ VWDWLVWLFDO GLIIHUHQFHV LQ VRLO SURSHUWLHV DPRQJ GHSWKV E6DPSOHG VHSDUDWHO\ DW D GHSWK RI FP F1RW GHWHFWDEOH G (IIHFWLYH FDWLRQ H[FKDQJH FDSDFLW\ (&(&f VXP RI EDVHV DOXPLQXP

PAGE 139

HVWDEOLVKHG E\ FXWWLQJ DQG EXUQLQJ SULPDU\ IRUHVW DQG LQWHUSODQWLQJ RQH\HDUROG FXSXDVVX SHDFK SDOP DQG %UD]LO QXW VHHGOLQJV DW D VSDFLQJ RI [ PHWHUV WR FRPSOHWH VWRFNLQJ GHQVLWLHV RI DQG WUHHV KDn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f ZHUH FROOHFWHG DW GHSWKV RI DQG FP 7KH VDPSOHV ZHUH DLUGULHG SDVVHG WKURXJK D PP PHVK VLHYH DQG KDQGn SLFNHG IUHH RI ILQH URRWV SULRU WR FKHPLFDO DQDO\VHV $ VKDUSHGJHG PHWDO F\OLQGHU ZDV GULYHQ LQWR WKH WRS FP RI VRLO WR H[WUDFW VDPSOHV SHU EORFNf IRU GHWHUPLQLQJ EXON GHQVLW\

PAGE 140

$ERYH*URXQG %LRPDVV DQG /LWWHU &DOFXODWLRQV RI DERYHJURXQG ELRPDVV VWRUHV DQG LQFUHPHQW ZHUH EDVHG RQ PHDVXUHPHQWV WDNHQ IURP HDFK WUHH LQ DOO ILYH SORWV LQ ODWH 6HSWHPEHU DQG DJDLQ LQ HDUO\ 2FWREHU 7KH DOORPHWULF UHODWLRQVKLSV XVHG WR HVWLPDWH DERYHJURXQG ELRPDVV DUH VXPPDUL]HG LQ 7DEOH 3HDFK SDOP ELRPDVV ZDV HVWLPDWHG XVLQJ HTXDWLRQV GHYHORSHG IURP RU IHOOHG LQGLYLGXDOV &XSXDVVX EROH DQG ODUJH EUDQFK GLDPHWHUV FPf ELRPDVV ZHUH HVWLPDWHG QRQGHVWUXFWLYHA DV WKH SURGXFW RI YROXPH DQG ZRRG GHQVLW\ EDVHG RQ PHDVXUHPHQWV RI EDVDO DQG DSLFDO GLDPHWHU DQG KHLJKW (VWLPDWHV IRU %UD]LO QXW EROH PDVV ZHUH PDGH VLPLODUO\ XVLQJ GLDPHWHU DW EUHDVW KHLJKW GEKf DQG WRWDO KHLJKW WR FDOFXODWH 7DEOH $OORPHWULF UHODWLRQVKLSV XVHG WR HVWLPDWH DERYHJURXQG ELRPDVV LQ DQ HLJKW\HDUROG SHDFK SDOPFXSXDVVX%UD]LO QXW DJURIRUHVWU\ V\VWHP ,QGHSHQGHQW YDULDEOHV LQFOXGH KHLJKW WR FURZQ EDVH %+f WRWDO OHDI QXPEHU /1f VHFRQGDU\ EUDQFK 'HSHQGHQW 9DULDEOH NJWUHHf (TXDWLRQ 5 1 3 YDOXH 3HDFK 'DOP VWHP \ r%+ r%+ OHDI VKHDWKn \ r/1 r/1 OHDYHVE \ r/1 r/1 UHSURGXFWLYH WLVVXHV \ r/1 r/1 &XSXDVVX EUDQFKHV EDVDO GLDP FPf \ r%' &XSXDVVX OHDYHV \ r%' %UD]LO QXW WUHH WRWDOF \ r'%+r+r6f G n$[LODU\ EXG SDOP KHDUWf ZDV b RI OHDI VKHDWK PDVV E/HDIOHWV DQG SHWLROH UDFKLV ZHUH DQG b RI OHDI PDVV UHVSHFWLYHO\ F)URP %URZQ HW DO f H[SRQHQWLDO WHUPV WUDQVIRUPHG %UD]LO QXW ZRRG GHQVLW\ J FPn G06(

PAGE 141

YROXPH DQG D IRUP IDFWRU RI WR DGMXVW IRU WUXQN WDSHU +XVFK HW DO f )URP ERWK WKH FXSXDVVX DQG %UD]LO QXW WUHHV EUDQFKHV ZHUH FXW DQG ZHLJKHG IRU HVWLPDWHV RI VHFRQGDU\ EUDQFK DQG OHDI PDVV 7KHVH GDWD ZHUH XVHG LQ UHJUHVVLRQ HTXDWLRQV WR SUHGLFW FXSXDVVX OHDI DQG EUDQFK ELRPDVV IURP EUDQFK QXPEHU DQG EDVDO GLDPHWHU 7KH FRQVLVWHQW EUDQFK OHQJWK DQG EDVDO GLDPHWHU RI \RXQJ %UD]LO QXW WUHHV DOORZHG IRU WKH HVWLPDWLRQ RI FURZQ PDVV IURP WKH PHDQ EUDQFK DQG OHDI ZHLJKW NJEUDQFKf PXOWLSOLHG E\ WKH DYHUDJH QXPEHU RI EUDQFKHV SHU PHWHU RI FURZQ 7RWDO %UD]LO QXW ELRPDVV EROH EUDQFKHV OHDYHVf FRPSDUHG ZHOO ZLWK HVWLPDWHV RI $PD]RQLDQ IRUHVW WUHH ELRPDVV E\ %URZQ HW DO 7KH LQLWLDO PDVV DQG QXWULHQW VWRUHV RI OLYH KHUEDFHRXV YHJHWDWLRQ ZHHGVf ZDV QRW TXDQWLILHG EHFDXVH WKH XQGHUVWRU\ KDG MXVW EHHQ FXW GRZQ E\ IDUPHUV SULRU WR VDPSOLQJ WKH SHUHQQLDO FRPSRQHQWV IRU WKH ILUVW WLPH +RZHYHU XQGHUVWRU\ ZHHG LQFUHPHQW WKURXJKRXW WKH \HDU ZDV PHDVXUHG WZLFH MXVW EHIRUH WKH YHJHWDWLRQ ZDV FXW DJDLQ E\ IDUPHUV IURP UDQGRPO\ORFDWHG PTXDGUDWV SHU EORFNf 2Q ERWK PHDVXUHPHQW GDWHV WKUHH FRPSRVLWH VDPSOHV ZHUH FROOHFWHG IURP LQGLYLGXDOV RI HDFK SHUHQQLDO VSHFLHV E\ WLVVXH W\SH 7KH WUHH VDPSOHV DQG IUHVK ZHHG ELRPDVV ZHUH ZHLJKHG RYHQGULHG DW r& UHZHLJKHG IRU PRLVWXUH FRQWHQW GHWHUPLQDWLRQ DQG DQDO\]HG IRU QXWULHQW FRQWHQW 7R HQDEOH D FRPSDULVRQ RI WKH QXWULWLRQDO VWDWXV RI WKH DJURIRUHVW XQGHU VWXG\ ZLWK RWKHUV LQ WKH UHJLRQ ILYH FRPSRVLWH VDPSOHV RI IUHVK OHDYHV OHDYHV IURP HDFK RI WUHHVf ZHUH FROOHFWHG IURP FXSXDVVX WUHHV GXULQJ WKH VDPH PRQWK LQ HLJKW VL[\HDUROG 5(&$ DJURIRUHVWV ZLWK WKH VDPH FRQILJXUDWLRQ RI VSHFLHV DQG VSDFLQJ 7KH DJURIRUHVW IORRU VXUIDFH OLWWHU PDVV ZDV VDPSOHG IRXU WLPHV GXULQJ WKH VWXG\ SHULRG HDUO\ PLG DQG ODWH UDLQ\ VHDVRQ DQG PLGGU\ VHDVRQf IURP UDQGRPL\ORFDWHG

PAGE 142

QU TXDGUDWV SHU EORFNf (DFK TXDGUDW VDPSOH ZDV VRUWHG DQG ZHLJKHG E\ VSHFLHV DQG SODQW SDQ SDOP OHDIOHWV SHWLROHUDFKLV OHDYHV UHSURGXFWLYH WLVVXHV WZLJV DQG D IUDFWLRQ RI XQFODVVLILHG PDWHULDOf %HFDXVH WKH PDMRULW\ RI VXUIDFH OLWWHU ZDV FRPSULVHG RI OHDI PDWHULDO RQH SRROHG VDPSOH SHU EORFN ZDV WDNHQ E\ VSHFLHV IURP HYHU\ FROOHFWLRQ IRU WKH GHWHUPLQDWLRQ RI ZDWHU DQG QXWULHQW FRQWHQW %HORZ*URXQG %LRPDVV DQG 6WDQGLQJ /LWWHU 6WRFN 7KH VWDQGLQJ VWRFN RI ILQH PP GLDPHWHUf DQG FRDUVH WR PPf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fV SHUHQQLDO FRPSRQHQWV ZDV FROOHFWHG IURP UDQGRPO\ORFDWHG QU PHVK WUDSV SHU EORFNf LQVWDOOHG P IURP WKH VRLO VXUIDFH DW WKH EHJLQQLQJ RI WKH VWXG\ 7KH OLWWHU ZDV FROOHFWHG HYHU\ WHQ GD\V VRUWHG

PAGE 143

ZHLJKHG DQG VXEVDPSOHG E\ VSHFLHV DQG SODQW SDUW IRU PRLVWXUH DQG QXWULHQW FRQWHQW GHWHUPLQDWLRQ %HORZJURXQG OLWWHU WXUQRYHU LQ WKH WRS FP RI VRLO WKURXJK WKH SURGXFWLRQ DQG GHDWK RI ILQH URRWV ZDV PHDVXUHG XVLQJ WKH LQJURZWK F\OLQGHU PHWKRG &XHYHV DQG 0HGLQD f ,QJURZWK WXEHV PDGH RI SRO\HWK\OHQH PHVK FP WDOO FP GLDPHWHU [ PP PHVK VL]Hf ZHUH ILOOHG ZLWK URRWIUHH VRLO FROOHFWHG IURP WKH VDPH GHSWK DQG SDFNHG WR DQ DSSUR[LPDWH EXON GHQVLW\ RI J FPn 7HQ F\OLQGHUV SHU EORFN ZHUH EXULHG FP IURP WKH VRLO VXUIDFH WR UHDFK D ILQDO GHSWK RI FPf DW UDQGRP ORFDWLRQV HDUO\ LQ WKH UDLQ\ VHDVRQ 'HFHPEHUf DQG UHPRYHG IRXU PRQWKV ODWHU GXULQJ SHDN UDLQIDOO 8SRQ UHPRYDO URRWV ZHUH FXW IOXVK ZLWK WKH F\OLQGHU H[WHULRU DQG WKH WLVVXH LQVLGH ZDV ZDVKHG VHSDUDWHG GULHG DQG ZHLJKHG DV GHVFULEHG IRU VWDQGLQJ URRW VWRFN VDPSOLQJ $QQXDO ILQH URRW JURZWK UDWH ZDV FDOFXODWHG E\ GLYLGLQJ WKH PHDQ WRWDO QXPEHU RI URRWV OLYH DQG GHDGf WKDW JUHZ LQVLGH WKH FP WDOO FRUHV E\ WKH QXPEHU RI GD\V f WKH FRUHV ZHUH LQ WKH JURXQG DQG H[WUDSRODWLQJ WKLV UDWH J FPn GD\nf RYHU GD\V WR D GHSWK RI FP 7R HVWLPDWH DQQXDO EHORZJURXQG OLWWHU SURGXFWLRQ LW ZDV DVVXPHG WKDW WKH URRW GHDWK UDWH HTXDOHG WKH WRWDO ELRPDVV RI ILQH URRWV SURGXFHG LQ RQH \HDU DV KDV EHHQ GRQH IRU RWKHU QXWULHQW EXGJHWV $WWLZLOO DQG /HHSHU f &RQFXUUHQW ZLWK LQJURZWK FRUH UHPRYDO ILQH URRW ELRPDVV ZDV UHVDPSOHG IURP VRLO FRUHV WDNHQ DW GHSWKV RI DQG FP IURP WZR RI WKH ILYH UHSOLFDWH EORFNV 7KH GLIIHUHQFH LQ VWDQGLQJ URRW PDVV EHWZHHQ WKH WZR VDPSOLQJ GDWHV ZDV FRPSDUHG WR WKH JURZWK UDWH FDOFXODWHG IURP WKH LQJURZWK FRUHV 7RWDO 1 DQG 3 UHVRUEHG IURP OHDYHV RI HDFK VSHFLHV SULRU WR DEVFLVVLRQ WKURXJKRXW WKH \HDU ZDV HVWLPDWHG DV WKH SURGXFW RI IUHVK OHDI 1 RU 3 FRQFHQWUDWLRQ DQG WRWDO OHDI OLWWHU PDVV

PAGE 144

PXOWLSOLHG E\ WKH SURSRUWLRQ RI IROLDU 1 RU 3 UHVRUEHG RQH PLQXV WKH TXRWLHQW RI OLWWHUIDOO 1 RU 3 DQG IUHVKOHDI 1 RU 3f %HFDXVH YDULDEOH DPRXQWV RI RUJDQLF PDWWHU DOVR PD\ EH ZLWKGUDZQ SULRU WR OHDI DEVFLVVLRQ WKH OLWWHUIDOOII HVKOHDI TXRWLHQWV ZHUH FDOFXODWHG WZR ZD\V XVLQJ 1 DQG 3 FRQFHQWUDWLRQV SHU XQLW PDVV DQG 1 DQG 3 FRQFHQWUDWLRQV SHU XQLW FDOFLXP 7KH ODWWHU PHWKRG DFFRUGLQJ WR 9LWRXVHN DQG 6DQIRUG f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f ,PPHGLDWHO\ IROORZLQJ UDLQ HYHQWV WKH VDPSOHV ZHUH ILOWHUHG D VHFRQG WLPH WR H[FOXGH GHEULV DQG IUR]HQ XQWLO FKHPLFDO DQDO\VLV DQG UHFLSLHQWV ZHUH PRYHG WR GLIIHUHQW FDQRS\ ORFDWLRQV 7KURXJKIDOO 3 IOX[ ZDV FDOFXODWHG IURP WRWDO UDLQIDOO DGMXVWHG IRU DQ HVWLPDWHG b FDQRS\ UHWHQWLRQ EDVHG RQ (OVHQEHHU HW DO f 1LWURJHQ WKURXJKIDOO IOX[ ZDV HVWLPDWHG IURP GDWD IURP WKUHH VWXGLHV RI WURSLFDO IRUHVWV JURZLQJ LQ VLPLODUO\ QXWULHQWSRRU VRLOV SUHVHQWHG E\ 9LWRXVHN DQG 6DQIRUG f 7ZHOYHPRQWK 1 DQG 3 LQSXW LQ UDLQIDOOGHSRVLWLRQ ZDV FDOFXODWHG DV WKH UHJLRQfV WHQ \HDU DYHUDJH DQQXDO UDLQIDOO 8)$& XQSXEOLVKHGf PXOWLSOLHG E\ WKH DYHUDJH FRQFHQWUDWLRQ RI WRWDO 1 DQG 3 LQ UDLQIDOO 7RWDO 3 FRQFHQWUDWLRQV ZHUH GHWHUPLQHG IURP UDLQZDWHU FROOHFWHG IURP 6HSWHPEHU WKURXJK $SULO WKUHH UDLQ HYHQWV SHU PRQWKf LQ WHQ DFLGZDVKHG ILOWHUHG

PAGE 145

UHFLSLHQWV ORFDWHG DW JURXQG OHYHO LQ DJURIRUHVW FDQRS\ JDSV LQ DQG DGMDFHQW RSHQ ILHOGV 'DWD IURP :LOOLDPV HW DO f RQ 1+r DQG 1n FRQFHQWUDWLRQV LQ UDLQIDOO IURP WKH FHQWUDO $PD]RQ %DVLQ ZHUH XVHG IRU WRWDO 1 HVWLPDWHV 5HPRYDO RI 1 DQG 3 WKURXJK WKH KDUYHVW RI DJURIRUHVW SURGXFWV ZDV FDOFXODWHG DV WKH WRWDO PDVV KDUYHVWHG PXOWLSOLHG E\ WKH DYHUDJH QXWULHQW FRQFHQWUDWLRQ RI HDFK SURGXFW 7KURXJKRXW WKH VWXG\ DOO IUXLW KDUYHVWHG IURP WKH ILYH EORFNV ZDV ZHLJKHG DQG ZDWHU DQG QXWULHQW FRQWHQW GHWHUPLQDWLRQ ZHUH EDVHG XSRQ ILYH FRPSRVLWH VDPSOHV HDFK FRPSULVHG RI RQH VDPSOH SHU EORFN SHU ZHHNf FROOHFWHG PRQWKO\ GXULQJ SHULRGV RI SURGXFWLRQ 3DOP KHDUW ZDWHU DQG QXWULHQW FRQWHQW ZHUH FDOFXODWHG IURP FRPSRVLWH VDPSOHV FROOHFWHG RQ ILYH VHSDUDWH RFFDVLRQV 3ODQW DQG 6RLO $QDO\VHV $OO SODQW VDPSOHV ZHUH RYHQGULHG DW r& JURXQG WR SDVV WKURXJK D PP PHVK VLHYH DQG ZKHQ QHFHVVDU\ UHJURXQG WR D ILQH SRZGHU XVLQJ D ]LUFRQLXP EDOO 3ODQW WLVVXH 3 FRQWHQW ZDV GHWHUPLQHG E\ EORFNGLJHVWLQJ PDWHULDO ZLWK FRQFHQWUDWHG +6+ DW r& 7KRPDV HW DO f DQG DQDO\]LQJ WKH FOHDUHG VXSHUQDWDQW IRU 32 XVLQJ LQGXFWLYHO\ FRXSOHG DUJRQ SODVPD ,&$3f VSHFWURVFRS\ 7KH 1 DQG & FRQWHQW RI IUHVKO\ IDOOHQ OLWWHU DJURIRUHVW IORRU OLWWHU DQG URRWV ZHUH TXDQWLILHG DIWHU 'XPDV FRPEXVWLRQ LQ D &DUOR (UED 1$ &t1 DQDO\]HU &DUERQ VWRUHV LQ OLYH DERYHJURXQG ELRPDVV DQG DOO UHSURGXFWLYH SDUWV ZHUH HVWLPDWHG DV b RI WRWDO GU\ PDVV DV SODQW WLVVXH W\SLFDOO\ FRQWDLQV EHWZHHQ DQG b & 6FKOHVLQJHU f 7RWDO 1 RI WKHVH WLVVXHV ZDV GHWHUPLQHG XVLQJ WKH .MHOGDKO PHWKRG RQ GLJHVWHG PDWHULDO $QDO\VLV RI UDQGRP VDPSOHV GHWHUPLQHG WKDW WKHUH ZDV QR VLJQLILFDQW GLIIHUHQFH EHWZHHQ WRWDO .MHOGDKO QLWURJHQ 7.1f DQG WLVVXH 1 FRQWHQW GHWHUPLQHG

PAGE 146

XVLQJ WKH &t1 DQDO\]HU 6DPSOHV RI IUHVK FXSXDVVX OHDYHV IURP WKH DJURIRUHVW XQGHU VWXG\ DQG HLJKW RWKHUV ZHUH GLJHVWHG DQG DVVD\HG DV GHVFULEHG DERYH IRU &D 0J 3 DQG 7.1 2YHQGULHG ILQHO\ JURXQG VRLO IURP DQG FP GHSWKV ZDV XVHG IRU WKH GHWHUPLQDWLRQ RI WRWDO & 1 DVVD\HG LQ WKH &t1 DQDO\]HUf DQG 3 LQ VRLO VWRUHV 7RWDO 3 ZDV H[WUDFWHG XVLQJ D FRQFHQWUDWHG +6+ EORFN GLJHVW DW r & IRU WZR KRXUV ,QRUJDQLF 3 SUHVXPDEO\ FRUUHODWHG WR SODQW XSWDNH ZDV PHDVXUHG IURP WKUHH GLIIHUHQW H[WUDFWV RI DLU GULHG VLHYHG VRLO %UD\ 3L ZDV H[WUDFWHG LQ 1 1+) DQG 1 +&/ LQ GHLRQL]HG ',f + %UD\ DQG .XUW] f DQG 0HKOLFK 0Of 3L E\ VKDNLQJ J PLQHUDO VRLO LQ PO RI GLOXWH GRXEOH DFLG 1 +&/ LQ 1 +6f IRU ILYH PLQXWHV 5HVLQ 3L ZDV PHDVXUHG DIWHU VKDNLQJ J RI VRLO ZLWK D [ FP DQLRQ H[FKDQJH PHPEUDQH LQ PO ', + IRU KRXUV 7KH PHPEUDQH ZDV UHPRYHG IURP VROXWLRQ ULQVHG IUHH RI VRLO ZLWK ', + DQG WKH 3L RQ WKH PHPEUDQH ZDV WKHQ H[WUDFWHG E\ VKDNLQJ WKH PHPEUDQH LQ PO 0 1+2$F IRU WZR KRXUV 6RLO 3L FRQFHQWUDWLRQV LQ WKH WKUHH ILOWHUHG H[WUDFWV ZHUH GHWHUPLQHG FRORULPHWULFDOO\ XVLQJ WKH PRO\EGDWH EOXH PHWKRG 0XUSK\ DQG 5LOH\ f RQ D 0LOWRQ 5R\ 6SHFWURQLF VSHFWURSKRWRPHWHU DV ZHUH WRWDO 3 FRQFHQWUDWLRQV LQ UDLQIDOO DQG WKURXJKIDOO VDPSOHV DIWHU DVKLQJ DQG ZHWGLJHVWLRQ ZLWK FRQFHQWUDWHG +& 6RLO H[FKDQJHDEOH EDVHV DQG DOXPLQXP ZHUH H[WUDFWHG IRU KRXUV LQ 0 1+2$F DQG 0 .& UHVSHFWLYHO\ 7KRPDV f DQG DVVD\HG XVLQJ ,&$3 VSHFWURVFRS\ $GGLWLRQDO DQDO\VHV FRQGXFWHG RQ DOO ILYH VRLO GHSWKV LQFOXGH SDUWLFOH VL]H GLVWULEXWLRQ XVLQJ WKH SLSHW PHWKRG .LOPHU DQG $OH[DQGHU f S+ PHDVXUHG XVLQJ D %HFNPDQ HOHFWURGH LQ D ZDWHU WR VRLO UDWLR DQG WKH :DONOH\%ODFN GLFKURPDWH SURFHGXUH 1HOVRQ DQG 6RPPHUV f WR GHWHUPLQH VRLO RUJDQLF PDWWHU bf

PAGE 147

6WDWLVWLFDO $QDO\VHV 'LIIHUHQFHV LQ VRLO SURSHUWLHV DQG URRW PDVV E\ GHSWK ZHUH DQDO\]HG LQ RQHZD\ $129$ PRGHO XVLQJ 6$6 6$6 ,QVWLWXWH ,QF &DU\ 1&f 2UWKRJRQDO FRQWUDVWV ZHUH XVHG WR DQDO\]H GLIIHUHQFHV EHWZHHQ VSHFLILF GHSWKV DQG LQ FXSXDVVX IROLDU FRQWHQWV EHWZHHQ WKH DJURIRUHVW XQGHU VWXG\ DQG HLJKW RWKHUV LQ WKH UHJLRQ 8QOHVV RWKHUZLVH LQGLFDWHG WKH VDPSOH VL]H 1f UHSUHVHQWV ILYH EORFNV DQG GDWD DUH PHDQV s RQH VWDQGDUG HUURU 1HW 3ULPDU\ 3URGXFWLYLW\ DQG 1 DQG 3 %XGJHW 1HW SULPDU\ SURGXFWLYLW\ 133f HTXDOHG WRWDO RUJDQLF PDWWHU SURGXFHG E\ WKH DJURIRUHVW WKURXJKRXW WKH \HDU 1HW & IL[DWLRQ DQG WKH DQQXDO 1 DQG 3 UHTXLUHPHQW ZHUH FDOFXODWHG DV WRWDO WZHOYHPRQWK SURGXFWLRQ RI DJURIRUHVW ELRPDVV PXOWLSOLHG E\ & 1 DQG 3 FRQFHQWUDWLRQ RI HDFK FRPSRQHQW $Q DQQXDO EXGJHW ZDV FRQVWUXFWHG WR DQDO\]H KRZ PXFK RI WKH V\VWHPnV 3 DQG 1 UHTXLUHPHQW ZDV Df PHW WKURXJK LQWUD V\VWHP F\FOLQJ YLD UHVRUSWLRQ Ef WDNHQ XS IURP VRLO VWRUHV Ff UHWXUQHG WR VRLO DQG Gf UHPRYHG IURP WKH V\VWHP ZLWK FURS KDUYHVW 1XWULHQW XSWDNH IURP WKH VRLO ZDV GHWHUPLQHG DV WKH DJURIRUHVWU\ V\VWHPfV WRWDO DQQXDO SURGXFWLRQ UHTXLUHPHQW OHVV 1 DQG 3 UHDEVRUEHG IURP OLYH WLVVXHV SULRU WR DEVFLVVLRQ :DULQJ DQG 6FKOHVLQJHU f 5HVXOWV 6RLO &KDUDFWHULVWLFV DQG (OHPHQWDO 6WRUHV 7KH VRLO XQGHUO\LQJ WKH DJURIRUHVW KDG D KLJK FOD\ FRQWHQW !bf WKDW LQFUHDVHG b IURP WR FP GHSWK 7DEOH f ([FKDQJHDEOH FDWLRQV ZHUH DSSUR[LPDWHO\ WZLFH DV FRQFHQWUDWHG LQ WKH VRLO VXUIDFH FPf FRPSDUHG WR WKH FP GHSWK 3 f 6RLO S+ ZDV KLJKHU LQ WKH WRS FP 3 f EXW GHFUHDVHG WR E\ WKH FP GHSWK ZKHUH

PAGE 148

LW UHPDLQHG FRQVWDQW WR FP 6RLO RUJDQLF PDWWHU 20f DQG H[WUDFWDEOH LQRUJDQLF 3 3Lf DOVR GHFOLQHG VLJQLILFDQWO\ ZLWK GHSWK 3 f EHWZHHQ DQG FP SHUFHQW 20 ZDV RQH WKLUG WKH YDOXH IRU WKH FP GHSWK DQG WKH FRQFHQWUDWLRQV RI ERWK 0HKOLFK DQG %UD\ H[WUDFWDEOH 3L ZHUH EHORZ GHWHFWDEOH OLPLWV 7KH WRS FP RI VRLO ZDV WKH ODUJHVW VWRUH RI & 1 DQG 3 PHDVXUHG UHSUHVHQWLQJ DQG b RI WKH V\VWHPfV WRWDO VWRUDJH VRLO SOXV SODQW PDVVf IRU WKHVH WKUHH HOHPHQWV UHVSHFWLYHO\ 7DEOH f :KLOH WRWDO VRLO 3 VWRUDJH DSSHDUV UHODWLYHO\ ODUJH WKH IUDFWLRQ RI H[WUDFWDGOH 3 SRWHQWLDOO\ fUHDGLO\f DYDLODEOH IRU SODQW XSWDNH LQ WKH WRS FP DV PHDVXUHG E\ VKRUW WHUP LQGLFHV XVLQJ WKH %UD\ J Pnf 0HKOLFK J Pnf RU UHVLQ J Pnf H[WUDFWV ZDV OHVV WKDQ b RI WRWDO 3 6WDQGLQJ %LRPDVV 6WRUHV 2YHUDOO b RI DJURIRUHVW WRWDO & VWRUDJH J Pn LQFOXGLQJ VRLO DQG OLWWHUf ZDV LQ ZRRG\ VWHPV /LYH ZRRG UHSUHVHQWHG RYHU b RI WKH WRWDO DERYHJURXQG ELRPDVV DQG & VWRUDJH EXW RQO\ DQG b RI WKLV FRPSDUWPHQWfV 1 DQG 3 VWRUHV /HDYHV ZHUH D VPDOOHU IUDFWLRQ RI DERYHJURXQG ELRPDVV bf EXW VWRUHG DQG b RI WKH V\VWHPfV DERYHn JURXQG 1 DQG 3 3HDFK SDOP ELRPDVV J Pnf ZDV RYHU WLPHV WKDW RI FXSXDVVX J Pnf DQG %UD]LO QXW J Pff FRPELQHG DQG DFFRXQWHG IRU DQG b RI WKH V\VWHPfV DERYHJURXQG VWRUHV RI 1 DQG 3 UHVSHFWLYHO\ 7DEOH f &XSXDVVX IROLDU FRQFHQWUDWLRQV RI &D 0J DQG GLG QRW GLIIHU DPRQJ WKH DJURIRUHVW XQGHU VWXG\ DQG WKH VL[ RWKHUV VDPSOHG EXW 1 DQG 3 FRQWHQWV ZHUH ORZHU LQ WKH HLJKW\HDUROG V\VWHP 3 f 7DEOH f

PAGE 149

7DEOH %LRPDVV VWRUHV DQG F\FOLQJ RI & 1 DQG 3 LQ DQ $PD]RQLDQ DJURIRUHVWU\ V\VWHP GXULQJ WKH HLJKWK \HDU DIWHU HVWDEOLVKPHQW 0DVV & 1 3 $JURIRUHVW 6WRUHV R Pnf 6RLO FPf /LYH ELRPDVV /LYH ZRRG )ROLDJH 5HSURGXFWLYH WLVVXHV 7RWDO OLYH DERYHJURXQG /LYH URRWV GLDPHWHU PPf URRWV GLDPHWHU PPf 7RWDO EHORZJURXQG FP GHSWKf 7RWDO DERYH DQG EHORZJURXQG $JURIRUHVW IORRU VXUIDFH OLWWHU %HORZJURXQG OLWWHU FPf $QQXDO IOX[ H Pn YUnf $JURIRUHVW DQQXDO SURGXFWLRQr )ROLDJH LQFOXGLQJ ZHHGVf /LYH ZRRG LQFUHPHQW 5HSURGXFWLYH WLVVXHV )LQH URRWV FP GHSWKf 7RWDO 133 DQG 1 t 3 UHTXLUHPHQW 5HDEVRUSWLRQ EHIRUH DEVFLVVLRQ 5HWXUQ WR VRLO $ERYHJURXQG OLWWHU 8QGHUVWRU\ ZHHGV %HORZJURXQG OLWWHU FPf 7KURXJKIDOO 7RWDO UHWXUQ WR VRLO 8SWDNH UHTXLUHPHQWUHDEVRUSWLRQf 2XWSXWV UHPRYDO IURP KDUYHVW ,QSXWV UDLQIDOOGHSRVLWLRQ D $JURIRUHVW DQQXDO SURGXFWLRQ ELRPDVV LQFUHPHQW ZHHG JURZWK KDUYHVW OLWWHUIDOO 1 WKURXJKIDOO LQSXW IURP 9LWRXVHN DQG 6DQIRUG f

PAGE 150

7DEOH 0 1 DQG 3 VWRUHV LQ DERYHJURXQG ELRPDVV DQQXDO JURZWK LQFUHPHQW DQG PDVV KDUYHVWHG RI DJURIRUHVW SURGXFWV 6WDQGLQJ ELRPDVV &RQFHQWUDWLRQ bf 6WRUHV J Pnf ,QFUHPHQW +DUYHVWHG J Pf 1 3 1 3 J Pn \Unf J Pn \Uf 3HDFK 3DOP VWHP s s s OHDI VKHDWK s s s EXG KHDUWf s s s OHDIOHWV s s s SHWLROHUDFKLV s s s LQIORUHVFHQFHV s s s PDWXUH IUXLW s s s s &XPLDVVX EROH EUDQFKHVA FP s s s EUDQFKHV GLDP FPf s s s OHDYHV s s s PDWXUH IUXLW s s s

PAGE 151

7DEOH FRQWLQXHG 6WDQGLQJ %LRPDVV &RQFHQWUDWLRQ bf 6WRUHV J Pnf ,QFUHPHQW +DUYHVWHG J Pnf 1 3 1 3 JPf\U ff J Pn \Unf %UD]LO QXW EROH s s s EUDQFKHV s s s OHDYHV s s s 8QGHUVWRUY ZHHGV 1R GDWD s s 7DEOH &XSXDVVX IROLDU QXWULHQW FRQFHQWUDWLRQV IRU RQH HLJKW\HDUROG SHDFK SDOPFXSXDVVX%UD]LO QXW DJURIRUHVW DQG WKH PHDQ IROLDU &XSXDVVX IROLDU QXWULHQW FRQFHQWUDWLRQ bf 6\VWHP &D 0J 1 3 \HDUROG DJURIRUHVW s s s sr s r \HDU ROG DJURIRUHVWV s s s s s f0HDQV VLJQLILFDQWO\ GLIIHUHQW EHWZHHQ WKH WZR GLIIHUHQWDJHG V\VWHPV S e DQG GHDGf EHORZJURXQG PDVV PHDVXUHG WR D FP GHSWK J Pnf WKH\ ZHUH RQO\ b RI WRWDO EHORZJURXQG OLWWHU 7DEOHV DQG f SHUKDSV EHFDXVH PXFK RI WKH GHDG ILQH URRW OLWWHU KDG EHJXQ WR GHFRPSRVH HDUO\ LQ WKH UDLQ\ VHDVRQ ZKHQ WKH VDPSOHV ZHUH FROOHFWHG

PAGE 152

7DEOH 0HDQ ILQH PPf DQG FRDUVH WR PPf URRW ELRPDVV s 6(f IRU WZR GLDPHWHU FODVVHV WR D FP VRLO GHSWK DQG FDUERQ &f QLWURJHQ 1f DQG SKRVSKRUXV 3f VWRUHV IRU OLYH URRWV DQG EHORZJURXQG OLWWHU GHDG URRWVf /LYH DQG GHDG URRW PDVV EDVHG XSRQ SHUFHQWDJH RI GHDG URRWV LQ SDUHQWKHVHVf LQ WZR RI WKH ILYH EORFNV VDPSOHG 6RLO GHSWK FPf 6WDQGLQJ VWRFN URRW ELRPDVV J Pf (OHPHQWDO VWRUHV J P f GLDPHWHU PP GLDPHWHU WR PP OLYH URRWV GHDG URRWV WRWDO OLYH GHDG WRWDO OLYH GHDG & 1 3 & 1 3 s s bf bf s s bf bf E s s 7RWDO PDVV r (OHPHQWDO VWRUHV ZHUH EDVHG XSRQ & 1 DQG 3 FRQFHQWUDWLRQV bf IRU OLYH URRWV RI s s DQG s UHVSHFWLYHO\ DQG s s DQG s IRU GHDG URRWV DVVD\HG IURP SRROHG VDPSOHV RI ERWK GLDPHWHU FODVVHV E 5RRW ELRPDVV DW WKH FP VRLO GHSWK ZDV DVVXPHG WR EH OLYH

PAGE 153

7RWDO URRW PDVV OLYH SOXV OLWWHUf IURP WR FP VRLO GHSWK ZDV J P RU MXVW RYHU b RI WRWDO DJURIRUHVW RUJDQLF PDWWHU LQLWLDOO\ PHDVXUHG 6LPLODUO\ WKH OLYH URRW WR VKRRW ELRPDVV UDWLR ZDV DQG WKH VWDQGLQJ VWRFN RI OLYH URRWV PP GLDPHWHUf FRPSULVHG DQG b RI WKH V\VWHPfV OLYH & 1 DQG 3 VWRUHV 7DEOH f 7KH WRWDO PDVV RI OLYH ILQH URRWV ZDV RYHU WLPHV WKDW RI FRDUVH URRWV 3 f DQG DSSHDUHG FRQFHQWUDWHG LQ WKH WRS FP RI VRLO ZKHUH WKHUH ZDV QHDUO\ WZLFH WKH ILQH URRW ELRPDVV WKDQ WKDW IRXQG DW DQG FP GHSWKV FRPELQHG 3 7DEOH f &RDUVH URRW ELRPDVV GLG QRW GLIIHU VLJQLILFDQWO\ DPRQJ WKH GHSWKV PHDVXUHG 3HDFK SDOP DFFRXQWHG IRU DOPRVW RQH KDOI bf RI WRWDO URRW ELRPDVV DW FP EXW RQO\ D WKLUG bf DW FP &RPELQHG DERYH DQG EHORZJURXQG VWDQGLQJ OLWWHU PDVV WRWDOHG J Pn RYHU WZRWKLUGV RI ZKLFK ZDV VXUIDFH OLWWHU 7DEOH f 7KH OLWWHU VWRFN FRPSULVHG QHDUO\ b RI WKH V\VWHPfV WRWDO 1 UHVHUYHV LQFOXGLQJ VRLO J Pnf EXW DFFRXQWHG IRU RQO\ b RI DOO 3 VWRUDJH J Pff 3HDFK SDOP OHDYHV DQG UHSURGXFWLYH WLVVXHV DFFRXQWHG IRU b RI WKH VXUIDFH OLWWHU PDVV 7DEOH f $OWKRXJK ILQH URRWV FRQWULEXWHG b RI WKH WRWDO OLYH DQG GHDGf EHORZJURXQG PDVV PHDVXUHG WR D FP GHSWK J Pnf WKH\ ZHUH RQO\ b RI WRWDO EHORZJURXQG OLWWHU 7DEOHV DQG f SHUKDSV EHFDXVH PXFK RI WKH GHDG ILQH URRW OLWWHU KDG EHJXQ WR GHFRPSRVH HDUO\ LQ WKH UDLQ\ VHDVRQ ZKHQ WKH VDPSOHV ZHUH FROOHFWHG 3URGXFWLRQ DQG 1 DQG 3 5HTXLUHPHQWV %\ WKH QLQWK \HDU IROORZLQJ HVWDEOLVKPHQW DJURIRUHVW QHW SULPDU\ SURGXFWLYLW\ ZDV J Pn \Un D ILJXUH UHSUHVHQWLQJ QHDUO\ WKUHHTXDUWHUV RI WKH WRWDO OLYH DJURIRUHVW ELRPDVV PHDVXUHG DW WKH EHJLQQLQJ RI WKH VWXG\ 7DEOH f $QQXDO OLYH ZRRG & LQFUHPHQW ZDV HTXDO

PAGE 154

WR b RI WRWDO & VWRUDJH LQLWLDOO\ PHDVXUHG LQ YHJHWDWLRQ OLWWHU DQG VRLO FRPELQHG 3HDFK SDOP VWHP PDWXUH IUXLW DQG %UD]LO QXW EROH ZHUH WKH ODUJHVW IUDFWLRQV RI ELRPDVV DFFXPXODWHG RYHU WKH \HDU WRWDOLQJ J Pn RU b RI WRWDO DQQXDO SURGXFWLRQ 7DEOH f $OWKRXJK ELRPDVV SURGXFWLRQ RI XQGHUVWRU\ ZHHGV UHSUHVHQWHG RQO\ b RI WKH DERYHJURXQG LQFUHPHQW WKH 1 UHTXLUHPHQW IRU ZHHG JURZWK RYHU RQH \HDU J Pnf H[FHHGHG WKH FRPELQHG VWRUHV RI1 LQ OHDYHV RI FXSXDVVX J Pnf DQG %UD]LO QXW J Pnf PHDVXUHG DW WKH EHJLQQLQJ RI WKH VWXG\ 2YHUDOO OLYH ZRRG UHSUHVHQWHG RYHU RQH WKLUG RI WKH DERYHn JURXQG ELRPDVV LQFUHPHQW EXW LW FRPSULVHG RQO\ DQG b RI WKH V\VWHPfV DQQXDO 1 DQG 3 UHTXLUHPHQW 7DEOH f /HDI SURGXFWLRQ DFFRXQWHG IRU KDOI RI WKH 1 UHTXLUHG E\ DERYHn JURXQG WLVVXHV WKURXJKRXW WKH \HDU 1HDUO\ b RI WKH DERYHJURXQG 3 UHTXLUHPHQW ZDV DOORFDWHG WR UHSURGXFWLYH WLVVXHV KDOI ZKLFK ZDV UHPRYHG ZLWK WKH KDUYHVW RI DJURIRUHVW IUXLWV DQG SDOP KHDUW 5RRW SURGXFWLRQ PHDVXUHG XVLQJ WKH LQJURZWK FRUHV ZDV J P \Un :KHQ H[WUDSRODWHG RYHU FP VRLO GHSWK WKH WRWDO FRQWULEXWLRQ RI ILQH URRW JURZWK WR 133 ZDV J Pn \Un RU b RI WKH DQQXDO LQFUHPHQW LQ DJURIRUHVW ELRPDVV )LQH URRW JURZWK UHSUHVHQWHG b RI DQQXDO FDUERQ IL[DWLRQ DQG DQG b RI WKH V\VWHPfV 1 DQG 3 UHTXLUHPHQW 7KH WRWDO VWDQGLQJ VWRFN RI ILQH URRW ELRPDVV OLYH DQG GHDG s J Pn FP DQG s J Pn FP GHSWKf VDPSOHG D VHFRQG WLPH ILYH PRQWKV IROORZLQJ WKH LQLWLDO PHDVXUHPHQW GLG QRW GLIIHU VLJQLILFDQWO\ IURP WKH 1RYHPEHU PHDVXUHPHQW LQ HLWKHU VRLO GHSWK

PAGE 155

$JURIRUHVW 7XUQRYHU DQG )OX[ 7RWDO 1 DQG 3 IOX[ GXH WR UHVRUSWLRQ IURP OHDYHV EDVHG RQ IUHVK DQG OLWWHU OHDI 1 RU 3 SHUXQLW&D TXRWLHQWV ZDV DOZD\V JUHDWHU WKDQ WKDW FDOFXODWHG XVLQJ WKH SHUXQLWPDVV TXRWLHQWV 7DEOH f $VVXPLQJ WKDW WKH SHUXQLW&D YDOXHV DUH D PRUH DFFXUDWH HVWLPDWH RI UHVRUSWLRQ WKH DYHUDJH SURSRUWLRQ RI 3 bf UHDEVRUEHG IURP OHDYHV RI WKH WKUHH SHUHQQLDO FRPSRQHQWV ZDV JUHDWHU WKDQ WKDW IRU 1 bf 5HVRUSWLRQ RI 1 DQG 3 IURP OHDYHV SULRU WR DEVFLVVLRQ SURYLGHG DQG b RI ZKDW ZDV UHTXLUHG IRU SURGXFWLRQ WKURXJKRXW WKH \HDU OHDYLQJ URXJKO\ b RI WKH 1 DQG 3 UHTXLUHPHQW WR EH WDNHQ XS IURP VRLO VWRUHV 6RLO XSWDNH RYHU WKH \HDU UHSUHVHQWHG QHDUO\ WKUHHTXDUWHUV RI 1 DQG 3 VWRUDJH LQ OLYH YHJHWDWLRQ 7DEOH f +RZHYHU DQG b RI XSWDNH ZDV UHWXUQHG WR WKH VRLO WKURXJK OLWWHU JUHHQ ZHHG UHVLGXHV DQG WKURXJKIDOO 'HVSLWH D UHODWLYHO\ VPDOO ELRPDVV LQSXW WKH 1 DQG 3 UHWXUQ WR VRLO IURP FXW JUHHQ XQGHUVWRU\ ZHHGV ZDV DQG b RI WKH WRWDO $ERYHn JURXQG OLWWHUIDOO PDVV ZDV WKH ODUJHVW IUDFWLRQ RI 1 bf DQG 3 bf UHWXUQHG WR VRLO 7KH PHDQ UHVLGHQFH WLPH OLWWHUIDOOVXUIDFH OLWWHUf RI & 1 DQG 3 LQ WKH DJURIRUHVW IORRU ZDV DQG \HDUV LQGLFDWLQJ WKDW ZKLOH WKH DQQXDO OLWWHUIDOO LQSXW RI3 UHPDLQHG LQ WKH IRUHVW IORRU IRU OHVV WKDQ KDOI D \HDU & ZDV UHWDLQHG RQ WKH DJURIRUHVW IORRU IRU WZLFH DV ORQJ /HDYHV ZHUH b RI WRWDO DQQXDO DERYHJURXQG OLWWHUIDOO EXW UHSURGXFWLYH WLVVXHV DOVR FRQVWLWXWHG D VLJQLILFDQW IUDFWLRQ bf RI WKH OLWWHU PDVV DQG FRQWULEXWHG b RI WKH WRWDO UHWXUQ RI 3 WR WKH VRLO 7DEOH f ,QSXWV RI 1 DQG 3 WR WKH DJURIRUHVW IURP UDLQIDOO ZHUH QHJOLJLEOH

PAGE 156

/LWWHU W\SH %LRPDVV J QL f &RQFHQWUDWLRQ bf )OX[ J Pn \Uf & 1 3 & 1 3 3HDFK SDOP SHWLROH UDFKLV s s s OHDIOHWV s s s DERUWHG IUXLWr s s IORZHUV s s XQFODVVLILHG s s s &XSXDVVX OHDYHV s s s DERUWHG IUXLW s s IORZHUV s s %UD]LO 1XW OHDYHV s s s EUDQFKHV s s s 7RWDO OLWWHUIDOO f&DUERQ FRQFHQWUDWLRQ RI DOO UHSURGXFWLYH WLVVXHV HVWLPDWHG DV b A

PAGE 157

7DEOH 0HDQ 1 3 DQG &D FRQWHQWV LQ IUHVK OHDYHV DQG OHDI OLWWHU RI WKH VDPH SHUHQQLDO DJURIRUHVW VSHFLHV FROOHFWHG RQ WKH VDPH GDWH DV WKH IUHVK OHDYHV DQG WRWDO 1 DQG 3 UHVRUEHG IURP OHDYHV SULRU WR DEVFLVVLRQ WKURXJKRXW WKH \HDU 7KH SURSRUWLRQ RI IROLDU 1 DQG 3 UHVRUEHG OLWWHUIDOOIUHVK OHDI FRQFHQWUDWLRQ r f LV FDOFXODWHG IRU Df 1 DQG 3 6SHFLHV (OHPHQW PJ Jnf 7RWDO UHVRUEHG J P f \Urf 1 3 &D 1 3 3HDFK SDOP OHDIOHWV OHDI OLWWHU Df Ef 3DOP SHWLROH UDFKLV QR GDWD OHDI OLWWHU Df &XSXDVVX OHDYHV OHDI OLWWHU Df Ef %UD]LO QXW OHDYHV OHDI OLWWHU Df Ef

PAGE 158

UHSUHVHQWLQJ DQG b RI VRLO XSWDNH ZKHUHDV QXWULHQW UHPRYDO IURP KDUYHVW UHSUHVHQWHG DQG b RI WKH 1 DQG 3 WDNHQ XS IURP WKH VRLO WKURXJKRXW WKH \HDU 7DEOH f 'LVFXVVLRQ 6WRUHV DQG &\FOLQJ RI & 1 DQG 3 LQ $PD]RQLDQ /DQGXVHV 6RLO VWRUHV 6WXGLHV KDYH VKRZQ WKDW WKH VRLO FRPSDUWPHQW LV RIWHQ WKH ODUJHVW VWRUH RI & DQG 1 LQ WURSLFDO HFRV\VWHPV (ZHO HW DO %URZQ DQG /XJR f DQG WKH FRQYHUVLRQ RI IRUHVW WR RWKHU DJULFXOWXUDO ODQGXVHV KDV WKH SRWHQWLDO WR GHFUHDVH VRLO & VWRUDJH E\ WR b XVXDOO\ ZLWKLQ ILYH \HDUV RI WKH ILUVW FXOWLYDWLRQ 'DYLGVRQ DQG $FNHUPDQ f &DUERQ DQG QLWURJHQ VWRUHV LQ WKH WRS FP RI WKH DJURIRUHVW VRLO ZHUH RYHU WZR DQG QLQHIROG JUHDWHU WKDQ WKH FRPELQHG VWRUDJH RI DERYH DQG EHORZJURXQG ELRPDVV DQG OLWWHU IXUWKHU VXSSRUWLQJ WKH FODLP WKDW & DQG 1 VWRUDJH LV FRQFHQWUDWHG LQ WKH VRLO FRPSDUWPHQW 7KH & DQG 1 FRQWHQWV RI WKH DJURIRUHVW VRLO DSSHDU W\SLFDO RI WKRVH IRXQG WKURXJKRXW $PD]RQLD )RU H[DPSOH VRLO VWRUHV RI & DQG 1 ZHUH ZHOO ZLWKLQ D UDQJH UHSRUWHG IRU SDVWXUHV WR NJ & Pn DQG WR NJ 1 Pnf DQG QDWLYH IRUHVWV WR NJ & Pn DQG WR NJ 1 Pnf LQ 5RQGQLD %UD]LO 1HLOO HW DO f 0HDQ VRLO & DQG 1 FRQWHQWV FP GHSWKf IRU WKH 5(&$ DJURIRUHVW XQGHU VWXG\ NJ & Pn DQG J 1 NJnf DQG HLJKW RWKHUV LQ WKH UHJLRQ NJ & Pn DQG J 1 NJn &KDSWHU f ZHUH KLJKHU WKDQ YDOXHV FLWHG IRU SDVWXUH VKLIWLQJ FXOWLYDWLRQ SORWV DQG QDWLYH IRUHVW WR J & NJn DQG WR J 1 NJnf LQ $HU %UD]LO .DLQHU HW DO f EXW ORZHU WKDQ YDOXHV UHSRUWHG IRU QDWLYH IRUHVW DQG WLPEHU SODQWDWLRQV WR J & NJn DQG WR J 1 NJnf LQ HDVWHUQ $PD]RQLD 6PLWK HW DO 6PLWK HW DO LQ SUHVV Df :KLOH WKLV VWXG\ SUHVHQWV RQO\ WKH VWRUDJH RI & DQG 1 LQ RQH DJURIRUHVW SDLUHG FRPSDULVRQV RI VRLOV IURP WKH HLJKW RWKHU

PAGE 159

5(&$ DJURIRUHVWV ZLWK WKRVH IURP DGMDFHQW QDWLYH IRUHVWV GHPRQVWUDWHG QR GLIIHUHQFH LQ WRWDO & DQG 1 FRQWHQWV EHWZHHQ WKH WZR V\VWHPV &KDSWHU f :LWKRXW D PHDVXUHPHQW RI EXON GHQVLW\ LW FDQQRW EH GHWHUPLQHG IURP WKHVH GDWD LI VRLO & DQG 1 VWRUDJH FKDQJHG DV D UHVXOW RI FRQYHUWLQJ IRUHVW WR DJURIRUHVW EXW 6PLWK HW DO LQ SUHVV Ef IRXQG WKDW QHLWKHU VRLO & FRQWHQWV QRU FRUUHVSRQGLQJ & VWRUHV XQGHU H[WHQVLYHO\ PDQDJHG \HDUROG WLPEHU SODQWDWLRQV GLIIHUHG IURP WKRVH IRXQG LQ SORWV RI DGMDFHQW QDWLYH IRUHVW LQ WKH HDVWHUQ %UD]LOLDQ $PD]RQ 6WRUDJH RI 3 ZDV DOVR FRQFHQWUDWHG LQ WKH WRS FP RI WKH VRLO UHVXOWLQJ LQ RYHU WLPHV DV PXFK 3 LQ WKLV FRPSDUWPHQW WKDQ LQ YHJHWDWLRQ DQG OLWWHU FRPELQHG 6LPLODUO\ WKH VRLO 3 VWRUH FRPSULVHG b RI 3 VWRUDJH LQ &RVWD 5LFDQ DJURIRUHVWU\ V\VWHPV RI FDFDR DQG VKDGH WUHHV )DVVEHQGHU HW DO f b LQ ILYH\HDUROG VHFRQGDU\ IRUHVW DQG b RI 3 LQ PDWXUH WHUUD ILUPH IRUHVWV JURZLQJ LQ $PD]RQLDQ 2[LVROV 8KO DQG -RUGDQ f +RZHYHU RQO\ D VPDOO IUDFWLRQ RI WKH VRLO 3 VWRUH LQ WKH SUHVHQW VWXG\ ZDV H[WUDFWDEOH XVLQJ LQGLFHV SUHVXPDEO\ FRUUHODWHG WR WKH DYDLODEOH SRRO ,Q IDFW DVVXPLQJ EXON GHQVLW\ UHPDLQHG FRQVWDQW DW J FPn WKH %UD\H[WUDFWDEOH 3L VWRUH WR D GHSWK RI FP EHORZ ZKLFK 3L FRQFHQWUDWLRQV ZHUH QR ORQJHU GHWHFWDEOHf WRWDOHG RQO\ J FPn RU b RI WRWDO 3 IRXQG LQ WKH WRS FP RI VRLO $ JHQHUDOL]HG GLVWLQFWLRQ PDGH EHWZHHQ WURSLFDO DQG WHPSHUDWH IRUHVWV LV WKDW 3 LQ WKH IRUPHU LV ODUJHO\ fLPPRELOL]HGf LQ YHJHWDWLRQ EHFDXVH WKH H[WUDFWDEOH VRLO 3 FRQWHQW LV VR ORZ UHODWLYH WR WKDW RI VWDQGLQJ ELRPDVV (ZHO HW DO f +RZHYHU VWXGLHV RI VXEWURSLFDO DQG WHPSHUDWH IRUHVW VRLOV KDYH VKRZQ WKDW PRUH VWDEOH IRUPV RI 3 DUH VROXELOL]HG E\ RUJDQLF DFLGV WKDW PD\ EH UHOHDVHG E\ GHFRPSRVLQJ OLWWHU RU H[XGHG E\ URRWV DQG DVVRFLDWHG P\FRUUKL]DH &RPHUIRUG DQG 6NLQQHU )R[ HW DO f 0HFKDQLVPV

PAGE 160

VXFK DV WKLV WKDW UHQGHU PRUH UHVLVWDQW 3 IUDFWLRQV DYDLODEOH IRU XSWDNH EURDGHQ WKH VLJQLILFDQFH RI WKH WRWDO VRLO 3 VWRUH WR WKH ORQJWHUP QXWULWLRQ RI WUHHEDVHG V\VWHPV 7KH WRWDO 3 FRQWHQW LQ WKH XSSHU FP RI VRLO DYHUDJHG EHWZHHQ WKH DQG FP GHSWKVf RI WKH HLJKW\HDUROG DJURIRUHVW VRLO PJ NJnf ZDV ZLWKLQ WKH UDQJH RI YDOXHV IRU WKH HLJKW VL[\HDUROG 5(&$ DJURIRUHVWV WR PJ NJnf DQG WKHLU SDLUHG SORWV RI DGMDFHQW QDWLYH IRUHVW WR PJ NJn &KDSWHU f 6RPHZKDW ORZHU WRWDO VRLO 3 FRQWHQWV WR PJ NJnf DUH UHSRUWHG IRU VRLOV XQGHUO\LQJ RWKHU $PD]RQLDQ SULPDU\ DQG VHFRQGDU\ IRUHVWV 8KO DQG -RUGDQ 7LHVVHQ HW DO /LSV DQG 'XLYHQYRRUGHQ f 6RPEURHN f H[SODLQV WKDW WKH VRLOIRUPLQJ VHGLPHQWV RI WKH ZHVWHUQ $PD]RQ %DVLQ DUH OHVV ZHDWKHUHG WKDQ WKRVH LQ WKH HDVWHUQ EDVLQ DQG LQ VRPH UHJLRQV WKLV KDV UHVXOWHG LQ HXWURSKLF VRLOV ZLWK D KLJKHU EDVH VWDWXV 7KXV LW LV SRVVLEOH WKDW WRWDO 3 FRQFHQWUDWLRQV DUH DOVR LQKHUHQWO\ KLJKHU LQ VRLOV RI WKH VWXG\ UHJLRQ ([WUDFWDEOH 3 0O UHVLQ RU %UD\f LQ WKH WRS FP RI VRLO IURP WKH HLJKW\HDUROG DJURIRUHVW DQG HLJKW VL[\HDUROG DJURIRUHVWV IURP WKH VDPH UHJLRQ &KDSWHU f ZDV OHVV WKDQ RU HTXDO WR YDOXHV FLWHG IRU SDVWXUHV VKLIWLQJ FXOWLYDWLRQ SORWV WUHH SODQWDWLRQV DQG QDWLYH IRUHVWV WKURXJKRXW HDVWHUQ DQG ZHVWHUQ $PD]RQLD 5XVVHOO 6DQFKH] HW DO 7LHVVHQ HW DO /LSV DQG 'XLYHQYRRUGHQ 1HLOO HW DO 6PLWK HW DO .DLQHU HW DO f 7KXV DFFRUGLQJ WR WKHVH FRPPRQO\XVHG LQGLFHV H[WUDFWDEOH 3 RQ WKH DJURIRUHVW VLWH ZDV QRW DQ\ JUHDWHU WKDQ LQ RWKHU UHJLRQV RI $PD]RQLD $ERYHJURXQG ELRPDVV DQG SURGXFWLYLW\ 2YHUDOO DJURIRUHVW RUJDQLF PDWWHU DFFXPXODWLRQ DQG & VWRUDJH LQ VWDQGLQJ ELRPDVV ZDV ORZHU WKDQ WKDW IRU QDWXUDO VXFFHVVLRQDO YHJHWDWLRQ RI VLPLODU DJHV (LJKW \HDUV DIWHU HVWDEOLVKPHQW DJURIRUHVW OLYH DERYHJURXQG

PAGE 161

ELRPDVV ZDV WR b OHVV WKDQ WKDW LQ \RXQJHU DQG \HDUVf VHFRQGDU\ IRUHVW UHJURZWK DQG WRQV KDnf LQ $HU %UD]LO %URZQ HW DO f DQG 9HQH]XHOD 8KO DQG -RUGDQ f +RZHYHU DJURIRUHVW 133 ZDV RYHU b JUHDWHU WKDQ WKDW RI WKH 9HQH]XHODQ VHFRQGDU\ IRUHVW $OWKRXJK WKH WRWDO VWRUH RI DJURIRUHVW ELRPDVV WRQV KDn LQFOXGLQJ OLWWHU DQG URRWVf IHOO EHORZ D UDQJH RI YDOXHV FDOFXODWHG E\ )HDUQVLGH DQG *XLPDUDHV f IRU WHQ\HDUROG VHFRQGDU\ IRUHVWV LQ HDVWHUQ $PD]RQLD WR WRQV KDf WKH DYHUDJH DQQXDO LQFUHPHQW LQ DJURIRUHVW ELRPDVV WRQV KDnf ZDV FRPSDUDEOH WR WKDW RI WKH VXFFHVVLRQDO YHJHWDWLRQ WR WRQV KDnf ,Q FRQWUDVW GHVSLWH VLPLODU VWRUHV RI DERYHn JURXQG ELRPDVV 133 LQ WKH $PD]RQLDQ DJURIRUHVW ZDV b KLJKHU WKDQ WKDW LQ ILYH\HDUROG IHUWLOL]HG FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV RI FDFDR DQG VKDGH WUHHV LQ &RVWD 5LFD $OSL]DU HW DO f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n NJ 1 KDn DQG NJ 3 KDnf IURP WKH DJURHFRV\VWHP GXULQJ LWV ILUVW \HDU ZLWK WKH KDUYHVW RI DQQXDO FURSV LQLWLDOO\ LQWHUSODQWHG ZLWK VHHGOLQJV RI WKH SHUHQQLDO FRPSRQHQWV $OWKRXJK WKH FXOWLYDWLRQ RI DQQXDO FURSV LV GLVFRQWLQXHG DIWHU WKH ILUVW \HDU DV HDUO\ DV IRXU \HDUV IROORZLQJ HVWDEOLVKPHQW ELRPDVV DQG QXWULHQW UHPRYDO UHFRPPHQFHV ZLWK WKH KDUYHVW RI DJURIRUHVW SURGXFWV *HQHUDOO\ FXSXDVVX

PAGE 162

IUXLW SURGXFWLRQ LQ IRXU\HDUROG SODQWDWLRQV LV HVWLPDWHG WR EH b RI WKDW H[SHFWHG IRU \HDU HLJKW 9HQWXULHUL f KRZHYHU VL[ \HDUV DIWHU DJURIRUHVW HVWDEOLVKPHQW RWKHU 5(&$ IDUPHUV UHSRUWHG FXSXDVVX KDUYHVWV EHWZHHQ DQG WRQV KDn VLPLODU WR WKDW RI WKH HLJKW \HDUROG V\VWHP 6LPLODUO\ KLJK KDUYHVWV RI SHDFK SDOP IUXLW ZHUH UHSRUWHG E\ IDUPHUV IRU WKH \RXQJ DJURIRUHVWV )LQDOO\ WKH DJURIRUHVW XQGHUVWRU\ RI QDWLYH VSHFLHV UHJURZWK LV W\SLFDOO\ FXW GRZQ DQG OHIW WR GHFRPSRVH HYHU\ \HDU IROORZLQJ HVWDEOLVKPHQW DQG WKH ZRRG\ FRPSRQHQWV RI WKLV YHJHWDWLRQ ZRXOG XQGRXEWHGO\ DFFXPXODWH PDVV LI DOORZHG WR FRQWLQXH JURZLQJ &RPELQHG WKH FXWWLQJ RI XQGHUVWRUY ZHHGV DQG KDUYHVW RI DJURIRUHVW SURGXFWV DFFRXQWHG IRU WRQV KDn RI RUJDQLF PDWWHU SURGXFHG GXULQJ WKH HLJKWK \HDU DORQH 7KXV ZKLOH DJURIRUHVW VWDQGLQJ ELRPDVV DQG & VWRUDJH PD\ EH OHVV WKDQ WKDW RI VHFRQGDU\ IRUHVWV DQQXDO UDWHV RI SURGXFWLYLW\ PD\ QRW JUHDWO\ GLIIHU $ERYHJURXQG 1 DQG 3 VWRUDJH $OWKRXJK RUJDQLF PDWWHU LQ DERYHJURXQG ELRPDVV ZDV QHDUO\ HTXDO LQ ERWK WKH $PD]RQLDQ WKLV VWXG\f DQG ILYH\HDUROG &RVWD 5LFDQ FDFDR $OSL]DU HW DO f DJURIRUHVWV 1 DQG 3 VWRUDJH LQ WKH $PD]RQLDQ DJURIRUHVW ZDV DSSUR[LPDWHO\ DQG b OHVV SHUKDSV GXH WR LQLWLDO IHUWLOL]DWLRQ NJ 1 KDn DQG NJ 3 KDnf LQ WKH FDFDREDVHG V\VWHPV 7DEOH f ,Q FRQWUDVW DERYHJURXQG ELRPDVV LQ \RXQJ VHFRQGDU\ IRUHVW IDOORZV JURZLQJ RQ DQ 8OWLVRO LQ
PAGE 163

5XVVHOO f 6WRUDJH RI 1 GLIIHUHG E\ D IDFWRU RI IRXU WR WZHOYH EXW PDWXUH IRUHVW 3 VWRUHV ZHUH RQO\ WR WLPHV JUHDWHU WKDQ WKDW RI WKH DJURIRUHVW $ ZHLJKWHG DYHUDJH RI IROLDU 1 FRQFHQWUDWLRQV DPRQJ WKH WKUHH DJURIRUHVW SHUHQQLDO VSHFLHV bf ZDV ZLWKLQ WKH UDQJH UHSRUWHG IRU QDWLYH IRUHVW OHDYHV WR bf EXW WKH DYHUDJH 3 FRQFHQWUDWLRQ bf H[FHHGHG YDOXHV FLWHG IRU PDWXUH IRUHVWV WR bf JURZLQJ RQ 2[LVRLV 9LWRXVHN DQG 6DQIRUG 6PLWK HW DO LQ SUHVVf :LWKLQ VWDQG QXWULHQW XVH HIILFLHQF\ GHILQHG KHUH DV WKH UDWLR RI DERYHJURXQG ELRPDVV WR WKH WRWDO QXWULHQW PDVV LQ DERYHJURXQG WLVVXHV &KDSLQ f DSSHDUHG ORZHU LQ WKH DJURIRUHVW WKDQ ZKDW PLJKW EH H[SHFWHG IRU QDWXUDO $PD]RQLDQ V\VWHPV $JURIRUHVW 1XVH HIILFLHQF\ 18(f IHOO DW WKH ORZHU HQG RI D UDQJH FDOFXODWHG IRU SULPDU\ DQG VHFRQGDU\ IRUHVWV 7DEOH f ZKLOH 3XVH HIILFLHQF\ 38(f ZDV ZHOO EHORZ WKDW FDOFXODWHG IRU QDWLYH YHJHWDWLRQ 7KH UDWLR RI 1 WR 3 VWRUDJH LQ DJURIRUHVW DERYHJURXQG ELRPDVV ZDV ORZHU WKDQ WKDW IRXQG LQ WKH PDWXUH IRUHVWV VHFRQGDU\ IRUHVWV DQG D VLPLODUDJHG WLPEHU *PHOLQD DERUHDf SODQWDWLRQ 5XVVHOO f EXW KLJKHU WKDQ WKDW RI WKH \RXQJHU IHUWLOL]HG FDFDREDVHG DJURIRUHVWV 7DEOH f /LWWHUIDOO )XUWKHU HYLGHQFH IRU ORZHU DJURIRUHVW 38( UHODWLYH WR $PD]RQLDQ IRUHVWV LV IRXQG E\ H[DPLQLQJ QXWULHQW IOX[ LQ DERYHJURXQG OLWWHUIDOO 7RWDO OLWWHU SURGXFWLRQ GXULQJ WKH DJURIRUHVWfV HLJKWK \HDU IHOO ZLWKLQ D UDQJH RI OLWWHUIDOO UDWHV IRU PDWXUH IRUHVWV WR J Pn\U nrf SUHVHQWHG E\ %DUDERVD DQG )HDPVLGH f :KLOH 1 IOX[ LQ DJURIRUHVW OLWWHUIDOO ZDV FRPSDUDEOH WR WKDW RI WKH QDWLYH IRUHVWV 3 UHWXUQ WR VRLO YLD DERYHJURXQG OLWWHU J 3 Pn\U nrf ZDV JUHDWHU WKDQ YDOXHV FLWHG IRU IRUHVW OLWWHU WR J 3 Pn \U nrf

PAGE 164

7DEOH 6RLO RUGHU DQG VWRUHV RI WRWDO 1 3 DQG H[WUDFWDEOH 3L OLYH DERYHJURXQG ELRPDVV DQG 1 DQG 3 VWRUHV DV ZHOO DV 1 18(f DQG 3 3,,(f XVH HIILFLHQF\ DQG WKH UDWLR RI 1 WR 3 VWRUDJH LQ IRUHVW DQG WUHHEDVHG DJURHFRV\VWHPV 1' LQGLFDWHV QR GDWD DYDLODEOH 6\VWHP 6RLO t GHSWK FP 6RLO VWRUH J Pn 1 3 ([WUDFW 3L J Pn %LRPDVV WRQV KDn 6WRUH 1 J Pn 3 18 ( [ 38( [ 6WRU H 13 6RXUFH 3HDFK SDOP DJURIRUHVW %UD]LO \UVf 8OWLVRO 0HKOLFK 7KLV 6WXG\ 0DWXUH IRUHVW 9HQH]XHOD 2[LVRO 1' -RUGDQ DQG 8KO 0DWXUH IRUHVW &RORPELD 2[LVRO 1' )OVWHU HW DO 0DWXUH IRUHVW %UD]LO 8OWLVRO 1' 0HKOLFK 5XVVHOO 6HFRQGDU\ IRUHVW &RORPELD \HDUVf 2[LVRO 1' )OVWHU HW DO 6HFRQGDU\ IRUHVW 9HQH]XHOD \UVf 2[LVRO 1' 8KO DQG -RUGDQ 6HFRQGDU\ IRUHVW 3HUX \UVf 8OWLVRO 1' 2OVHQ 6]RWW HW DO t *PHOLQD SODQWDWLRQ %UD]LO \UVf 8OWLVRO 1' 0HKOLFK 5XVVHOO &DFDRVKDGH DJURIRUHVW &RVWD 5LFD \UVf ,QFHSWLVRO 1' $OSW]DU HW DO

PAGE 165

7KH ODUJH IOX[ RI 3 LQ DJURIRUHVW OLWWHUIDOO ZDV GXH LQ SDUW WR WKH ODUJH SURSRUWLRQ RI DERUWHG IUXLWV DQG DEVFLVHG IORZHUV FRQWDLQHG LQ WKH OLWWHU &RPELQHG WKHVH 3ULFK UHSURGXFWLYH WLVVXHV DFFRXQWHG IRU b RI WKH WRWDO OLWWHU PDVV DQG b RI WKH DQQXDO WUDQVIHU RI 3 WR WKH VRLO WKURXJK OLWWHUIDOO ,Q WZR VWXGLHV RQH RI ILYH PDWXUH IRUHVWV LQ WKH &RORPELDQ $PD]RQ /LSV DQG 'XLYHQYRRUGHQ f DQG WKH RWKHU LQ %UD]LO ZKLFK UHSRUWV RQH RI WKH KLJKHVW 3 IOX[HV LQ $PD]RQLDQ OLWWHUIDOO %DUERVD DQG )HDPVLGH f UHSURGXFWLYH WLVVXHV FRPSULVHG RQO\ b RI WRWDO OLWWHU PDVV DQG b RI DQQXDO 3 IOX[ $OVR QRWDEOH LV WKDW SHDFK SDOP OHDIOHWV ZKLFK DFFRXQW IRU b RI DJURIRUHVW OLWWHU PDVV KDYH 3 FRQWHQWV WR PJ Jnf WKDW HTXDO RU H[FHHG YDOXHV WR PJ Jnf UHSRUWHG IRU PDWXUH $PD]RQLDQ IRUHVW OHDI OLWWHU 'DQWDV DQG 3KLOOLSVRQ %DUERVD DQG )HDPVLGH f $V D UHVXOW RI UHODWLYHO\ KLJK 3 FRQWHQWV LQ OLWWHUIDOO LW DSSHDUHG WKDW 3 ZDV OHVV OLPLWLQJ WR RUJDQLF PDWWHU GHFRPSRVLWLRQ WKDQ 1 DV GHPRQVWUDWHG E\ D VKRUWHU UHVLGHQFH WLPH RI IDOOHQ OLWWHU RQ WKH DJURIRUHVW IORRU 1LWURJHQ UHPDLQHG LPPRELOL]HG LQ VXUIDFH OLWWHU b ORQJHU WKDQ SKRVSKRUXV ,QWHUHVWLQJ KRZHYHU LV WKDW GHVSLWH KLJK UDWHV RI 3 UHWXUQ WR WKH VRLO YLD OLWWHUIDOO 3 UHVRUSWLRQ IURP VHQHVFLQJ DJURIRUHVW OHDYHV UHPDLQHG FRPSDUDEOH WR UDWHV FLWHG IRU PDWXUH $PD]RQLDQ IRUHVWV 9LWRXVHN DQG 6DQIRUG 6FRWW HW DO f %HORZJURXQG VWRUDJH DQG SURGXFWLYLW\ 7KLV VWXG\ UHSRUWV ELRPDVV IRU URRWV ZLWK GLDPHWHUV e PP WR D VRLO GHSWK RI FP KHQFH WRWDO EHORZJURXQG ELRPDVV ZDV XQGHUHVWLPDWHG E\ QRW VDPSOLQJ GHHSHU LQ WKH VRLO SURILOH 5RRWV ZLWK GLDPHWHUV JUHDWHU WKDQ PP ZHUH QRW HQFRXQWHUHG LQ WKH UDQGRP VDPSOH RI VWDQGLQJ VWRFN DOWKRXJK ODUJHU URRWV REYLRXVO\ DFFRXQW IRU VRPH SRUWLRQ RI WRWDO EHORZJURXQG PDVV 1RQHWKHOHVV GDWD IURP RWKHU VWXGLHV VXJJHVW WKDW HVWLPDWHV RI DJURIRUHVW OLYH URRW DQG GHDG OLWWHU PDVV PD\ EH IDLUO\

PAGE 166

UHSUHVHQWDWLYH EHFDXVH EHORZJURXQG ELRPDVV LV W\SLFDOO\ FRQFHQWUDWHG ERWK LQ WKH VRLO VXUIDFH DQG LQ ILQHU URRWV )RU H[DPSOH LQ ILYH\HDUROG SHDFK SDOPFXSXDVVX DJURIRUHVWV LQ $PD]RQDV %UD]LO b RI ILQH URRW PDVV PHDVXUHG WR D GHSWK RI FP ZDV ORFDWHG LQ WKH WRS FP RI VRLO DQG RQH WKLUG RI DOO ILQH URRWV ZDV FODVVLILHG DV OLWWHU +DDJ f )HUUHLUD HW DO f REVHUYHG WKDW DSSUR[LPDWHO\ b RI DOO SHDFK SDOP URRW ELRPDVV LQ PDWXUH SODQWDWLRQV VDPSOHG WR D GHSWK RI PHWHUVf ZDV LQ WKH WRS FP RI WKH VRLL 5RRW ELRPDVV GDWD DUH GLIILFXOW WR FRPSDUH DPRQJ VWXGLHV EHFDXVH RI GLIIHULQJ VDPSOLQJ GHSWKV DQG URRW GLDPHWHU FODVVHV KRZHYHU D IHZ VWXGLHV LQGLFDWH WKDW WKH URRW PDVV PHDVXUHG IRU WKLV DJURIRUHVW LV W\SLFDO IRU WUHHEDVHG ODQGXVH V\VWHPV LQ $PD]RQLD 7RWDO DJURIRUHVW URRW ELRPDVV V PP GLDPHWHU J Pn LQFOXGLQJ OLWWHUf LQ WKH WRS FP RI PLQHUDO VRLO ZDV ZLWKLQ D UDQJH UHSRUWHG IRU PDWXUH IRUHVWV DQG IRXU GLIIHUHQW \HDUROG WUHH SODQWDWLRQV LQ HDVWHUQ $PD]RQLD WR J Pn 6PLWK HW DO LQ SUHVVf DQG LQ \RXQJ IRUHVW IDOORZV WR J Pn 8KO DQG -RUGDQ 6]RWW HW DO f +RZHYHU URRW ELRPDVV LQ WKH ROGHU WUHH SODQWDWLRQV DQG PDWXUH IRUHVW WR J Pnf WHQGHG WR H[FHHG WKDW RI WKH DJURIRUHVW ZKHQ WKH URRW PDW JURZLQJ RQ WRS RI WKH VRLO VXUIDFH ZDV LQFOXGHG LQ WKH FRPSDULVRQ 6HYHUDO DXWKRUV 9LWRXVHN DQG 6DQIRUG 9RJW HW DO f KDYH GHPRQVWUDWHG D WUHQG IRU WURSLFDO IRUHVWV JURZLQJ RQ QXWULHQWSRRU 2[LVROV DQG 8OWLVROV WR KDYH KLJKHU URRW WR VKRRW UDWLRV WKDQ WKRVH JURZLQJ LQ PRUH QXWULHQWULFK VRLOV SUHVXPDEO\ EHFDXVH WUHHV fLQYHVWf PRUH UHVRXUFHV LQWR DFTXLULQJ WKH UHVRXUFH PRVW OLPLWLQJ WR SURGXFWLYLW\ %ORRP HW DO f ,Q WKH SUHVHQW VWXG\ WKH DJURIRUHVW URRW WR VKRRW UDWLR f ZDV VLPLODU WR PDWXUH IRUHVWV JURZLQJ RQ $PD]RQLDQ 2[LVROV 8KO DQG -RUGDQ f DQG KLJKHU WKDQ WKDW IRU

PAGE 167

\RXQJHU \HDUVf QDWXUDO IRUHVW IDOORZV 6]RWW HW DO f 7KH VWRUDJH RI 1 LQ EHORZJURXQG WLVVXHV GLIIHUHG VRPHZKDW IURP WKDW RI QDWLYH YHJHWDWLRQ KRZHYHU 7KH DYHUDJH 1 FRQFHQWUDWLRQ LQ DJURIRUHVW ILQH URRWV bf ZDV ORZHU WKDQ YDOXHV SUHVHQWHG E\ .OLQJH f IRU PDWXUH IRUHVWV LQ $PD]RQLDQ 2[LVROV DQG 8OWLVROV WR bf ZKHUHDV WKDW RI 3 bf IHOO ZLWKLQ WKH UDQJH UHSRUWHG IRU PDWXUH IRUHVWV WR bf 6LPLODU WR DERYHJURXQG ELRPDVV LQFUHDVHG 3 VWRUDJH UHODWLYH WR 1 ZDV REVHUYHG LQ DJURIRUHVW EHORZJURXQG ELRPDVV 7KH UDWLR RI 1 WR 3 VWRUDJH LQ DJURIRUHVW URRWV OLYH SOXV OLWWHU f ZDV ORZHU WKDQ WKDW UHSRUWHG IRU PDWXUH IRUHVWV WR 9LWRXVHN DQG 6DQIRUG 9RJW HW DO 0HGLQD DQG &XHYDV f DQG VHFRQGDU\ IRUHVW IDOORZV WR 8KO DQG -RUGDQ 6]RWW HW DO f EXW KLJKHU WKDQ WKDW RI IHUWLOL]HG FDFDREDVHG DJURIRUHVWV )DVVEHQGHU HW DO f (VWLPDWHV RI URRW JURZWK DQG GHDWK IRU WKLV DJURIRUHVW GR QRW WDNH LQWR FRQVLGHUDWLRQ WKH VHDVRQDOLW\ RI URRW WXUQRYHU EHFDXVH URRW SURGXFWLRQ ZDV PHDVXUHG GXULQJ RQH SHULRG RQO\ IURP WKH HDUO\ WR PLG UDLQ\ VHDVRQ 6DQIRUG DQG &XHYDV f QRWHG WKDW ILQH URRW PRUWDOLW\ LQ PDWXUH WURSLFDO IRUHVWV JURZLQJ LQ QXWULHQWSRRU &RVWD 5LFDQ VRLOV ZDV KLJKHVW GXULQJ WKH GU\ VHDVRQ IROORZHG E\ D SHDN LQ URRW SURGXFWLRQ GXULQJ WKH ZHW VHDVRQ 7KXV RQH PLJKW DVVXPH WKDW WKH ILQH URRW JURZWK UDWH UHSRUWHG LQ WKLV VWXG\ J Pn \Un f UHSUHVHQWV D PD[LPXP HVWLPDWH RI EHORZJURXQG SURGXFWLYLW\ 5HSRUWHG UDWHV RI ILQH URRW JURZWK PHDVXUHG LQ RWKHU VWXGLHV XVLQJ VHTXHQWLDO VRLO FRUHV DQG UKL]DWURQV YDU\ FRQVLGHUDEO\ DPRQJ $PD]RQLDQ ODQGXVHV IURP WKDW LQ 9HQH]XHODQ FRIIHH SODQWDWLRQV J Pn\U FP GHSWKf WR SULPDU\ WHUUD ILUPH IRUHVWV J Pn\U f FP &XHYDV DQG 0HGLQD 6DQIRUG DQG &XHYDV f DOWKRXJK LW LV LPSRVVLEOH WR FRPSDUH WKHVH GDWD

PAGE 168

ZLWK WKH SUHVHQW VWXG\ GXH WR PHWKRGRORJLFDO GLIIHUHQFHV 7KH GDWD DUH FRPSDUDEOH WR WKDW LQ D VWXG\ E\ -RUGDQ DQG (VFDODQWH f LQ ZKLFK URRW SURGXFWLRQ LQ PDWXUH WHUUD ILUPH IRUHVW J Pn \Un FPf ZDV PHDVXUHG DV WRWDO ELRPDVV DFFXPXODWLRQ LQ WKH LQWHULRU RI FOHDQO\ H[FDYDWHG VRLO SLWV $ FRPSDULVRQ RI WKH WZR VWXGLHV LQGLFDWHV DQ DJURIRUHVW URRW JURZWK UDWH RYHU WZLFH WKDW RI WKH PDWXUH IRUHVW ([SUHVVHG SHU FP VRLO GHSWK URRW SURGXFWLRQ LQ WKH DJURIRUHVW J Pn \Unf LV VL[IROG WKDW LQ WKH 9HQH]XHODQ IRUHVW J Pnn \Unf 3DUW RI WKH GLIIHUHQFH LV XQTXHVWLRQDEO\ GXH WR WKH IDFW WKDW URRW GHQVLW\ JHQHUDOO\ GHFUHDVHV ZLWK VRLO GHSWK DQG ILQH URRW SURGXFWLRQ LQ WKH PDWXUH IRUHVW ZDV PHDVXUHG LQ D FPGHHS SLW DV RSSRVHG WR WKH WRS FP RI VRLO ZKHUH WKH DJURIRUHVW LQJURZWK FRUHV ZHUH EXULHG 1RQHWKHOHVV ZKLOH WKH HVWLPDWH RI ILQH URRW JURZWK XQGRXEWHGO\ XQGHUYDOXHV WKH FRQWULEXWLRQ RI EHORZJURXQG SURGXFWLRQ DQG WXUQRYHU WR 133 DQG QXWULHQW F\FOLQJ LW GRHV VXJJHVW WKDW ILQH URRW SURGXFWLRQ LQ WKH DJURIRUHVW PD\ EH DW OHDVW FRPSDUDEOH WR WKDW RI D PDWXUH IRUHVW 7KDW WKH VHFRQG VDPSOLQJ RI ILQH URRW ELRPDVV LQ WKH XSSHU FP RI VRLO GLG QRW UHYHDO VLJQLILFDQWO\ JUHDWHU WRWDO URRW OLYH DQG GHDGf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f UHSRUW WKDW 1 DQG 3 H[SRUW ZLWK ULFH JUDLQ KDUYHVW IRU DQ fDYHUDJHf WRQV KDnf ILUVW FURS IROORZLQJ IRUHVW FOHDULQJ RQ D 3HUXYLDQ 8OWLVRO UDQJHV IURP WR NJ 1 KDn \Un

PAGE 169

DQG WR NJ 3 KDn \Un GHSHQGLQJ RQ ZKHWKHU RU QRW WKH ULFH VWUDZ LV OHIW RQ WKH ILHOG RU UHPRYHG ZLWK WKH FURS 6LPLODU 1 DQG 3 H[SRQ YDOXHV DUH UHSRUWHG IRU D KLJK\LHOGLQJ WRQV KDn \Unf \HDUROG FDFDRVKDGH WUHH DJURIRUHVW JURZLQJ LQ DQ $OILVRO LQ QRUWKHDVWHUQ %UD]LO NJ 1 KDn \Un KD NJ 3 KDn \Un 6DQFKH] HW DO f DOWKRXJK ORZHU YDOXHV DUH DOVR FLWHG IRU WKH VKLIWLQJ FXOWLYDWLRQ RI DQQXDO XQVSHFLILHGf FURSV LQ FHQWUDO %UD]LOLDQ 2[LVROV NJ 1 KDn \Un )ULVVHO f DQG PDL]H LQ DFLG &RVWD 5LFDQ 8OWLVROV NJ 3 KDn \Un +DQGV HW DO f :KLOH 3 UHPRYDO ZLWK WKH KDUYHVW RI DJURIRUHVW SURGXFWV PLJKW EH RQO\ KDOI WKDW H[SHFWHG IURP DQ DYHUDJH ILUVW ULFH FURS 1 H[SRUW DSSHDUV VLPLODU WR WKDW RI DQQXDO FURSV 0RUHRYHU 1 UHPRYDO LQ WKH $PD]RQLDQ DJURIRUHVW H[FHHGHG WKDW RI ILYH\HDUROG IHUWLOL]HG FDFDRVKDGH WUHH SODQWDWLRQV WR NJ KDn \Un )DVVEHQGHU HW DO f DQG XQIHUWLOL]HG \HDUROG +LPDOD\DQ PDQGDULQ$OEL]HD FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV NJ KDn \Un 6KDUPD HW DO f ZKLOH 3 UHPRYDO UHPDLQHG VLPLODU WR WKDW RI ERWK V\VWHPV WR NJ KDn \Unf (VWLPDWHG 1 UHPRYDO IURP H[WHQVLYHO\PDQDJHG XQIHUWLOL]HGXQVHHGHGf SDVWXUH LQ FHQWUDO %UD]LO NJ KDn )ULVVHO f RU HDVWHUQ $PD]RQLD NJ KDn 'LDV)LOKR HW DO LQ SUHVVf LV FRQVLGHUDEO\ OHVV WKDQ WKDW RI WKH DJURIRUHVW DOWKRXJK 3 H[SRUW WR NJ KDn \Unf IURP WKH IRUPHU LV OHVV WKDQ RU HTXDO WR WKDW RI WKH DJURIRUHVW 1LWURJHQ DQG SKRVSKRUXV ORVVHV WKURXJK VRLO OHDFKLQJ ZHUH QRW PHDVXUHG IRU WKLV DJURIRUHVW ,PEDFK HW DO f FODLPHG WKDW 1 DQG 3 UHPRYDO WKURXJK OHDFKLQJ IURP FDFDR EDVHG DJURIRUHVWV LQ &RVWD 5LFD DQG NJ KDn \Un UHVSHFWLYHO\f GLG QRW GLIIHU JUHDWO\ IURP RWKHU QDWXUDO WURSLFDO HFRV\VWHPV DOWKRXJK WKHVH YDOXHV DUH DW OHDVW WHQIROG JUHDWHU WKDQ WKRVH SUHVHQWHG E\ 9LWRXVHN DQG 6DQIRUG f IRU WURSLFDO IRUHVWV JURZLQJ RQ 2[LVROV LQ %UD]LO NJ 1 KDn \Un DQG WR NJ 3 KDn \Unf $VVXPLQJ DJURIRUHVW 1 ORVV

PAGE 170

WKURXJK OHDFKLQJ ZDV DV JUHDW DV WKDW FLWHG IRU &RVWD 5LFDQ DJURIRUHVWV UHPRYDO RI 1 ZRXOG DSSUR[LPDWH LWV DGGLWLRQ E\ UDLQIDOO 3KRVSKRUXV OHDFKLQJ ZRXOG OLNHO\ EH PXFK OHVV GXH WKH DQLRQfV LPPRELOLW\ LQ WURSLFDO 2[LVROV DQG 8OWLVROV DV GHPRQVWUDWHG E\ :LOOLDPV DQG 0HODFN f ZKR IRXQG WKDW VWUHDP ZDWHU VROXWH FRQFHQWUDWLRQV LQ GHIRUHVWHG FDWFKPHQWV RI FHQWUDO $PD]RQLD ZHUH IROG OHVV IRU WRWDO 3 WKDQ IRU 1 &\FOLQJ RI 1 DQG 3 DQG $JURIRUHVW 6XVWDLQDELOLW\ 6RLO IHUWLOLW\ PD\ EH UHIOHFWHG LQ WKH QXWULHQW FRQWHQWV RI LQGLYLGXDO SODQW WLVVXHV &XSXDVVX 1 DQG 3 FRQFHQWUDWLRQV IURP OHDYHV RI WKH HLJKW\HDUROG DJURIRUHVW IHOO DW WKH ORZ HQG RI WKH UDQJH IRU HLJKW RWKHU VL[\HDUROG 5(&$ DJURIRUHVWV WR DQG WR bf 6RLO FRQWHQWV RI %UD\ 0HKOLFK DQG UHVLQH[WUDFWDEOH DV ZHOO DV WRWDO 1 DQG 3 DYHUDJHG RYHU FP GHSWK ZHUH DOVR ZLWKLQ WKH UDQJH IRXQG LQ WKH \RXQJHU DJURIRUHVWV &KDSWHU f GHPRQVWUDWLQJ WKDW 1 DQG 3 G\QDPLFV LQ WKH HLJKW\HDUROG V\VWHP ZHUH IXQGDPHQWDOO\ VLPLODU WR RWKHU DJURIRUHVWV LQ WKH UHJLRQ 7RWDO & 1 DQG H[WUDFWDEOH 3 FRQWHQWV DOVR DSSHDU WR EH VLPLODU WR RWKHU UHJLRQV LQ $PD]RQLD 3KRVSKRUXV /RZ VRLO DQG SODQW WLVVXH 3 FRQWHQWV DV ZHOO DV KLJK UDWHV RI 3 UHVRUSWLRQ DQG VXEVHTXHQWO\ KLJK 3XVH HIILFLHQF\ DUH DOO FLWHG DV HYLGHQFH WKDW 3 LV PRUH OLPLWLQJ WR WURSLFDO IRUHVW SURGXFWLYLW\ WKDQ 1 9LWRXVHN DQG 6DQIRUG &XHYDV DQG 0HGLQD $WWLZLOO DQG $GDPV 6LOYHU f *UXEE f FDXWLRQV DJDLQVW FRPSDULQJ QXWULHQWXVH HIILFLHQF\ 18(f DPRQJ SODQW FRPPXQLWLHV RI GLIIHULQJ GHYHORSPHQWDO VWDJHV EHFDXVH LQ JHQHUDO 18( LQFUHDVHV ZLWK SODQW DJH %URZQ HW DO f REVHUYHG WKDW VHFRQGDU\ IRUHVWV ZHUH W\SLFDOO\ OHVV 3XVHHIILFLHQW WKDQ PDWXUH VWDQGV UHJDUGOHVV RI DJH VRLO W\SH DQG GLVWXUEDQFH KLVWRU\ HVSHFLDOO\ LQ UHWXUQ RI 3 WKURXJK OLWWHUIDOO ,Q WKLV FDVH DERYH

PAGE 171

JURXQG 3XVH HIILFLHQF\ LQ WKH HLJKW \HDU ROG DJURIRUHVW DSSHDUHG ORZHU WKDQ WKDW RI ERWK SULPDU\ DQG VHFRQGDU\ IRUHVWV JURZLQJ RQ 3SRRU VRLOV 7KLV FRPELQHG ZLWK KLJK UDWHV RI 3 UHWXUQ LQ OLWWHUIDOO DQG PRGHUDWHO\ KLJK 133 PLJKW VXJJHVW WKDW GHVSLWH VRLO FRQFHQWUDWLRQV RI H[WUDFWDEOH3 HTXDO WR RU ORZHU WKDQ YDOXHV UHSRUWHG IRU D UDQJH RI ODQGXVHV WKURXJKRXW $PD]RQLD 3 PD\ QRW EH DV OLPLWLQJ WR DJURIRUHVW SURGXFWLYLW\ DV LW LV WR QDWLYH IRUHVWV DW OHDVW GXULQJ WKLV HDUO\ VWDJH RI WKH DJURHFRV\VWHPf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f 0RGHUDWHO\ KLJK DJURIRUHVW SURGXFWLYLW\ DV ZHOO DV DERYHDYHUDJH 3 FRQWHQWV LQ IUHVK OHDYHV DQG IDOOHQ OLWWHU VXJJHVW WKH ODWWHU $OWKRXJK VLPLODU GDWD DUH XQDYDLODEOH IRU WKH RWKHU WZR DJURIRUHVW VSHFLHV LW LV NQRZQ WKDW SHDFK SDOP WKH V\VWHPfV GRPLQDQW FRPSRQHQW IRUPV V\PELRWLF P\FRUUKL]DO DVVRFLDWLRQV 0RUD8USL HW DO f 0\FRUUKL]DO DVVRFLDWLRQV PD\ LQFUHDVH 3 DYDLODELOLW\ WR KRVW SODQWV E\ H[SDQGLQJ WKH VXUIDFH DUHD RI FRQWDFW EHWZHHQ URRWV DQG VRLO DV ZHOO DV VROXELOL]H RUJDQLF 3 WKURXJK IXQJDO UHOHDVH RI SKRVSKDWDVHV %RO£Q f 6RLO RUJDQLF 3 3Rf ZDV QRW PHDVXUHG LQ WKLV VWXG\ QRU LV LW PHDVXUHG E\ WKH H[WUDFWDEOH 3 LQGLFHV DQG JLYHQ WKH ODUJH TXDQWLW\ RI 3 UHWXUQHG WR WKH VRLO WKURXJK OLWWHUIDOO 3R PD\ DFFRXQW IRU D VLJQLILFDQW SRUWLRQ RI WKH V\VWHPfV 3 QXWULWLRQ 7KH FRQFHQWUDWHG JURZWK RI SHDFK SDOP URRW ELRPDVV LQ WKH VRLO VXUIDFH ZKHUH RYHUDOO QXWULHQW DYDLODELOLW\ ZDV JUHDWHU VXJJHVWV WKLV ,Q DGGLWLRQ WR

PAGE 172

WDNLQJ XS QXWULHQWV DV WKH\ DUH UHOHDVHG IURP GHFRPSRVLQJ RUJDQLF PDWWHU WKH SODQWV PD\ DOVR KDYH fDFFHVVf WR OHVV UHDGLO\ DYDLODEOH IRUPV RI 3R )HUQDQGHV DQG 6DQIRUG f VXJJHVWHG WKDW SHDFK SDOP KDV WKH ffDELOLW\f WR GHSOHWH PRGHUDWHO\ ODELOH 1D2+H[WUDFWDELHf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fVXEVLG\f RI QXWULHQWV UHOHDVHG E\ EXUQHG IRUHVW ELRPDVV DQG GHFRPSRVLQJ VODVK .DXIIPDQ HW DO f IRXQG WKDW WRWDO VRLO 3 LQ VODVKHGDQGEXPHG SULPDU\ IRUHVWV LQ 5RQGQLD %UD]LO LQFUHDVHG b IURP SUHEXP FRQFHQWUDWLRQV $OWKRXJK VRPH ORVVHV ZRXOG RFFXU LI DQQXDO FURSV ZHUH KDUYHVWHG IURP WKH DJURIRUHVW GXULQJ WKH ILUVW \HDU RI HVWDEOLVKPHQW PXFK RI WKH 3 SXOVH UHVXOWLQJ IURP IRUHVW EXUQLQJ IRU VLWH SUHSDUDWLRQ ZRXOG EH WDNHQ XS DQG VWRUHG LQ WKH WLVVXHV RI WKH UDSLGO\ DJJUDGLQJ SHUHQQLDO V\VWHP :KLOH ODUJH TXDQWLWLHV RI 3 DUH UHWXUQHG WR WKH VRLO LQ DEVFLVHG SODQW SDUWV PXFK RI WKDW VWRUHG LQ OLYH WLVVXHV DSSHDUV WR EH UHXVHG DV

PAGE 173

GHPRQVWUDWHG E\ IROLDU UHVRUSWLRQ UDWHV FRPSDUDEOH WR WKRVH RI PDWXUH IRUHVWV 7KH UHVXOW DSSHDUV WR EH DQ RYHUDOO UDSLG DQG HIILFLHQW F\FOLQJ RI 3 ZLWKLQ WKH V\VWHP 1LWURJHQ 7RWDO 1 FRQWHQWV LQ WKH DJURIRUHVWf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f ZKLFK FRPSULVHV RYHU b RI WRWDO OLWWHUIDOO LV ORZ UHODWLYH WR YDOXHV FLWHG IRU RWKHU WURSLFDO IRUHVWV WR 9RJW HW DO f 0RUHRYHU D VRLO &WR1 UDWLR f ORZHU WKDQ WKRVH UHSRUWHG IRU WURSLFDO 2[LVROV f DQG 8OWLVROV 6DQFKH] HW DO f SURYLGHV IXUWKHU HYLGHQFH WKDW 1 PD\ EHFRPH PRUH OLPLWLQJ WR DJURIRUHVW SURGXFWLYLW\ WKDQ 3 LI PLQHUDOL]DWLRQ UDWHV IURP GHFRPSRVLQJ RUJDQLF PDWWHU GHFOLQH EHFDXVH RI UHGXFHG 1 DYDLODELOLW\ 7KH IDFW WKDW 1 UHPRYDO ZLWK WKH KDUYHVW RI DJURIRUHVW SURGXFWV LV FRPSDUDEOH WR WKDW H[SHFWHG IURP WKH VKLIWLQJ FXOWLYDWLRQ RI DQQXDO FURSV GRHV QRW ERGH ZHOO IRU WKH PDLQWHQDQFH RI 1 DYDLODELOLW\ LQ WKH WUHHEDVHG V\VWHP 8QOLNH SKRVSKRUXV WKH SRWHQWLDO H[LVWV IRU ODUJH DGGLWLRQV RI QLWURJHQ WKURXJK IL[DWLRQ RI DWPRVSKHULF 1 E\ OHJXPLQRXV KHUEV DQG WUHHV *ORYHU DQG %HHU f IRXQG WKDW 1 IL[LQJ VKDGH WUHHV FRXOG UHWXUQ WR J 1 Pn \Un WR &RVWD 5LFDQ FRIIHH SODQWDWLRQ DJURIRUHVWV ZKHQ SUXQHG WKUHH WLPHV DQQXDOO\ 6LPLODUO\ )DVVEHQGHU HW DO f IRXQG WKDW

PAGE 174

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

PAGE 175

+RZHYHU XQOLNH QDWLYH IRUHVWV ZKLFK DUH IRU DOO SUDFWLFDO SXUSRVHV fFORVHG V\VWHPVf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f WKHUH LV HYLGHQFH WR VXJJHVW WKDW 3 DYDLODELOLW\ PD\ EH GHFOLQLQJ DV GHPRQVWUDWHG E\ ORZHU FRQFHQWUDWLRQV RI UHDGLO\H[WUDFWDEOH 3 LQ VRLOV RI VL[\HDUROG DJURIRUHVWV UHODWLYH WR DGMDFHQW QDWLYH IRUHVWV &KDSWHU f :KLOH WKH LPSRUWDQFH RI WKHVH SDUWLFXODU H[WUDFWLRQ LQGLFHV RI 3 DYDLODELOLW\ WR ORQJWHUP DJURIRUHVW QXWULWLRQ UHPDLQV XQFOHDU GHSOHWLRQ RI UHDGLO\ H[WUDFWDEOH 3 GRHV GHPRQVWUDWH WKDW WKLV IUDFWLRQ LV EHLQJ WDNHQ XS E\ DJURIRUHVW YHJHWDWLRQ PRUH UDSLGO\ WKDQ LW LV UHSOHQLVKHG LQ WKH VRLO VROXWLRQ $ GHFOLQH LQ WKLV VRLO 3 SRRO PD\ KDYH GLIIHUHQWLDO HIIHFWV RQ WKH DJURIRUHVWfV FRPSRQHQWV GHSHQGLQJ XSRQ WKH FRPSHWLWLYH DELOLW\ RI HDFK VSHFLHV HVSHFLDOO\ IRU H[DPSOH LI RQH LV DEOH WR H[SORLW OHVV UHDGLO\ODELOH 3 IUDFWLRQV ZKLOH DQRWKHU LV QRW

PAGE 176

7KH FRQFHSW RI VXVWDLQDELOLW\ KDV PDQ\ DQG YDULHG GHILQLWLRQV HVSHFLDOO\ DPRQJ DFDGHPLF GLVFLSOLQHV +RZHYHU WKHUH LV VRPH DJUHHPHQW WKDW VXVWDLQDEOH DJULFXOWXUH LQFOXGHV PHHWLQJ KXPDQ QHHGV IRU IRRG DQG ILEHU PDLQWDLQLQJ HQYLURQPHQWDO LQWHJULW\ RU TXDOLW\ DQG EHLQJ VRFLDOO\ DQG HFRQRPLFDOO\ YLDEOH 6PLW DQG 6PLWKHUV f 2QH RI WKH HFRQRPLF DGYDQWDJHV RI WKH FRPPHUFLDO SODQWDWLRQ PL[HG DJURIRUHVWU\ V\VWHP LV WKDW LW SRWHQWLDOO\ PLQLPL]HV ILQDQFLDO ULVN EHFDXVH IDUPHUV DUH DEOH WR SURGXFH DQG VHOO D YDULHW\ RI SURGXFWV 7KLV EHQHILW LV ORVW LI RQH VSHFLHV LV DOORZHG WR GRPLQDWH WKH V\VWHP UHVXOWLQJ LQ ORZHUHG SURGXFWLYLW\ RI RWKHU HFRQRPLFDOO\ LPSRUWDQW DJURIRUHVW FRPSRQHQWV )XUWKHUPRUH XQOLNH VKLIWLQJ FXOWLYDWLRQ SORWV ZKHUH VRLO IHUWLOLW\ LV JHQHUDOO\ UHVWRUHG GXULQJ DQ DGHTXDWHO\ ORQJ \HDUVf IDOORZ SHULRG WKHUH LV HYLGHQFH WR VXJJHVW WKDW WUHHEDVHG DJURHFRV\VWHPV LI QRW PDQDJHG WR VXVWDLQ QXWULHQW DYDLODELOLW\ FDQ DFWXDOO\ UHVXOW LQ RYHUDOO VLWH GHJUDGDWLRQ )HUQDQGHV DQG 6DQIRUG f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

PAGE 177

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f DQG WKH SHDFKSDOP GRPLQDWHG DJURIRUHVW DSSHDUHG WR F\FOH 3 DW KLJKHU UDWHV WKDQ WKRVH FLWHG IRU QDWLYH SULPDU\ DQG VHFRQGDU\ IRUHVWV JURZLQJ LQ VHHPLQJO\ VLPLODU 3SRRU VRLOV &KDSWHU f 1RW RQO\ ZHUH 3 FRQFHQWUDWLRQV KLJKHU LQ SHDFK SDOP DERYH DQG EHORZJURXQG ELRPDVV IUHVKO\ IDOOHQ DQG VWDQGLQJ OLWWHU EXW WKH 3 FRQWHQW IRXQG LQ WKHVH VWRUHV ZDV FRQVLGHUDEO\ KLJKHU WKDQ LQ WKRVH RI WKH RWKHU WZR DJURIRUHVW FRPSRQHQWV GXH WR WKH SDOPfV JUHDWHU WRWDO ELRPDVV ,QFUHDVHG XSWDNH RI 3 E\ SHDFK SDOP ZRXOG OLNHO\ EH IDFLOLWDWHG E\ V\PELRWLF P\FRUUKL]DO DVVRFLDWLRQV &OHPHQW DQG +DEWH f ZKLFK LQ DGGLWLRQ WR LQFUHDVLQJ WKH YROXPH RI VRLO H[SORUHG PD\ VROXELOL]H RUJDQLF 3 WKURXJK LQFUHDVHG SKRVSKDWDVH SURGXFWLRQ %RO£Q f +RZHYHU VLQFH PRVW SODQWV IRUP P\FRUUKL]DO DVVRFLDWLRQV RQH PLJKW H[SHFW WKH RWKHU WZR DJURIRUHVW FRPSRQHQWV DOVR QDWLYH WR 3SRRU $PD]RQLDQ IRUHVW VRLOV WR EHQHILW VLPLODUO\ IURP P\FRUUKL]DO LQIHFWLRQ 2WKHU VWXGLHV KDYH VKRZQ WKDW HYHQ LQ WKH DEVHQFH RI

PAGE 178

P\FRUUKL]DL DVVRFLDWLRQV VRPH VSHFLHV VXFK DV SLJHRQ SHD &DMXQXV FDMQ / 0LOOVSf XWLOL]H 3 ERXQG LQ )H R[LGHV E\ H[XGLQJ VXEVWDQFHV WKDW FKHODWH )H IURP WKHLU URRWV $H HW DO f )HUQDQGHV DQG 6DQIRUG f VXJJHVWHG WKDW SHDFK SDOP PD\ KDYH VLPLODU fDFFHVVf WR RUGLQDULO\ OHVV VROXEOH IRUPV RI 3 DIWHU REVHUYLQJ WKDW 1D2),H[WUDFWDEOH 3R SRROV ZHUH VLJQLILFDQWO\ ORZHU XQGHU ROG SHDFK SDOP RUFKDUGV WKDQ LQ VXUURXQGLQJ SODQW FRPPXQLWLHV %LQNOH\ HW DO f GHWHUPLQHG WKDW 3 F\FOLQJ LQ $OEL]LD(XFDO\SWXV SODQWDWLRQV LQ +DZDLL ZDV DFFHOHUDWHG FRPSDUHG WR WKDW LQ PRQRVSHFLILF VWDQGV RI (XFDO\SWXV 7KH\ DWWULEXWHG WKH LQFUHDVHG 3 XSWDNH E\ $OEL]LD WR D JUHDWHU SURGXFWLRQ RI ORZPROHFXODU ZHLJKW RUJDQLF DFLGV XQGHU WKLV VSHFLHV WKDW LQFUHDVHG VRLO 3 DYDLODELOLW\ )R[ DQG &RPHUIRUG f IRXQG WKDW R[DODWH DQ RUJDQLF DFLG RIWHQ UHOHDVHG E\ GHFRPSRVLQJ OLWWHU RU H[XGHG E\ URRWV XQGHUJRHV OLJDQG H[FKDQJH UHDFWLRQV ZLWK R[LGH VRUEHG 3 WKXV LQFUHDVLQJ 3 VROXELOLW\ LQ WKH VRLO VROXWLRQ ,QWHUHVWLQJO\ WKH IUXLW RI SHDFK SDOP FRQWDLQ DSSUHFLDEOH DPRXQWV RI FDOFLXP R[DODWH QHFHVVLWDWLQJ WKDW WKH IUXLW EH ERLOHG EHIRUH KXPDQ FRQVXPSWLRQ 0RUD8USL HW DO f 7KH UHODWLRQVKLS EHWZHHQ R[DODWH FU\VWDOV LQ SHDFK SDOP IUXLW DQG SRWHQWLDOO\ JUHDWHU 3 DYDLODELOLW\ KDV QRW EHHQ H[DPLQHG WKXV LW VHHPV WKDW LQYHVWLJDWLRQ RI WKLV DQG SRWHQWLDO PHFKDQLVPV HPSOR\HG E\ WKLV SDOP VSHFLHV WR RSWLPL]H 3 XSWDNH LQ VHHPLQJO\ 3SRRU FRQGLWLRQV LV ZDUUDQWHG )XUWKHU UHVHDUFK LQWR WKH PHFKDQLVPV FRQWUROOLQJ D VSHFLHVf DELOLW\ WR VROXELOL]H fXQDYDLODEOHf 3 PD\ JUHDWO\ EHQHILW WKH GHYHORSPHQW RI PRUH HFRORJLFDOO\ VXVWDLQDEOH DJURHFRV\VWHPV WKURXJKRXW WKH WURSLFV ZKHUH 3 LV YHU\ RIWHQ WKH QXWULHQW PRVW OLPLWLQJ WR SURGXFWLRQ 7KH SRVVLELOLW\ WKDW DFFHOHUDWHG 3 F\FOLQJ LQ WKH SHDFK SDOPGRPLQDWHG DJURIRUHVW PD\ EH GXH WR D VSHFLHV HIIHFW XQGHUVFRUHV WKUHH SRLQWV )LUVW WUHHEDVHG FRPPHUFLDO

PAGE 179

SODQWDWLRQ DJURIRUHVWU\ V\VWHPV FRPSULVHG RI GLIIHUHQW VSHFLHV PD\ QRW QHFHVVDULO\ EHQHILW IURP VLPLODUO\ KLJK UDWHV RI 3 F\FOLQJ 6HFRQGO\ ORZ UHPRYDO RI D VSHFLILF QXWULHQW VXFK DV 3 PD\ GHSHQG XSRQ WKH FRQILJXUDWLRQ RI DJURIRUHVW VSHFLHV DQG VWDJH RI WKH V\VWHPnV GHYHORSPHQW 7KLUGO\ DQG SHUKDSV PRVW LPSRUWDQWO\ VXFK D VSHFLHV HIIHFW RQ 3 F\FOLQJ FDQ EH PDQLSXODWHG WR HQKDQFH 3 DYDLODELOLW\ WR RWKHU DJURIRUHVW FRPSRQHQWV DQG WKLV PD\ EH SDUWLFXODUO\ YDOXDEOH LQ WKH 3OLPLWHG VRLOV FRPSULVLQJ PXFK RI WKH KXPLG WURSLFV )RU H[DPSOH DV WKH V\VWHP LV FXUUHQWO\ PDQDJHG DQ LQFUHDVHG FDSDFLW\ IRU 3 XSWDNH E\ SHDFK SDOP WKUHDWHQV WKH RWKHU DJURIRUHVW FRPSRQHQWV EHFDXVH WKH SDOPf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f 8QIRUWXQDWHO\ DV WKH IRFXV JURXS GLVFXVVLRQV ZLWK IDUPHUV SRLQWHG RXW PRVW KRXVHKROGV LQ WKLV UHJLRQ GR QRW KDYH HDV\ DFFHVV WR WKH FKHPLFDO IHUWLOL]HUV UHFRPPHQGHG +RZHYHU WKH UHODWLYHO\ 3ULFK RUJDQLF PDWWHU IRXQG LQ SHDFK SDOP OHDI OLWWHU RU VWRUHG LQ

PAGE 180

WKLV VSHFLHVf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f EXW QRW PXFK H[WUD ODERU VLQFH WKH VSHFLHV LV LQWHUSODQWHG ZLWK WKH RWKHU WUHHV LQ WKH VDPH V\VWHP 7KLV DSSHDUV DV SUDFWLFDO DV FROOHFWLQJ SODQW UHVLGXHV IURP QHDUE\ QDWLYH IRUHVW D SUDFWLFH FLWHG E\ VRPH IDUPHUV DV VRPHWKLQJ WKH\ GR WR HQULFK VRLOV IRU KRXVHKROG YHJHWDEOH JDUGHQV 3K\VLFDO PDQLSXODWLRQ RI H[LVWLQJ SDOP RU RWKHU SODQW UHVLGXHV FRPELQHG ZLWK GLUHFWHG DSSOLFDWLRQ RI VPDOO DPRXQWV RI FKHPLFDO IHUWLOL]HUV ZHUH WKH\ WR EHFRPH PRUH DYDLODEOHf RU PDQXUHV WR KHOS VWLPXODWH GHFRPSRVLWLRQ DQG PLQHUDOL]DWLRQ RI 3SRRU FXSXDVVX DQG %UD]LO QXW OHDI OLWWHU ZRXOG XQGRXEWHGO\ KHOS PDLQWDLQ RYHUDOO V\VWHP SURGXFWLYLW\ E\ RSWLPL]LQJ DQGRU IDFLOLWDWLQJ 3 F\FOLQJ E\ DOO DJURIRUHVW FRPSRQHQWV )LQDOO\ UHJDUGOHVV RI KRZ UDSLGO\ 3 LV F\FOHG WKURXJK WKH SHDFK SDOPGRPLQDWHG DJURIRUHVW ZLWKRXW QXWULHQW DGGLWLRQV WR RIIVHW ORVVHV D GURS LQ SURGXFWLYLW\ LV MXVW D PDWWHU RI WLPH 7KXV LI DIWHU VHYHUDO \HDUV SURGXFWLYLW\ LQ WKH DJURIRUHVW GHFOLQHV EHORZ D OHYHO DFFHSWDEOH WR IDUPHUV WKH SDOPGRPLQDWHG DJURIRUHVWV FRXOG EH FXW DQG EXUQHG LQ WKH VDPH PDQQHU XVHG WR FOHDU QDWLYH IRUHVWV DQG WKH PLQHUDOV UHOHDVHG IURP WKH FRPEXVWHG SODQW ELRPDVV PD\ SURYLGH D PRUH 3ULFK HQYLURQPHQW IRU QHZ FURSV WKDQ QDWLYH

PAGE 181

VHFRQGDU\ IRUHVW FDSRHLUDf RI WKH VDPH DJH 2QH SRVVLEOH GUDZEDFN WR WKLV VWUDWHJ\ LV WKDW VRPH 3HUXYLDQ IDUPHUV KDYH QRWHG GLIILFXOWLHV HVWDEOLVKLQJ SODQWV LQ VRLOV SUHYLRXVO\ RFFXSLHG E\ SDOP KHDUW PRQRFXOWXUHV GXH WR WKH H[WHQVLYH VXSHUILFLDO URRWLQJ V\VWHPV SURGXFHG E\ SHDFK SDOP 0RUD8USL HW DO f )URP WKHVH UHSRUWV KRZHYHU LW LV XQFOHDU KRZ WKH ODQG ZDV SUHSDUHG IRU QHZ SODQWLQJV DQG RQH VWXG\ VXJJHVWV WKDW GHDG ILQH URRWV PP GLDPHWHUf IURP WKH SDOP FROOHFWHG LQ WKH WRS FP RI VRLO GHFRPSRVH HQWLUHO\ ZLWKLQ RQH \HDU 0F*UDWK XQSXEOLVKHG GDWDf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

PAGE 182

WKHLU ODUJH PDVV ,Q V\VWHPV ZKHUH KHDUWRISDOP LV PRUH LQWHQVLYHO\ H[SORLWHG 1 H[SRUW ZRXOG EH H[SHFWHG WR ULVH VLQFH WKH 1 FRQFHQWUDWLRQ LQ WKH EXG DQG OHDI VKHDWK WLVVXHV FRPSULVLQJ KDUYHVWHG SDOP KHDUW LV KLJKHU WKDQ WKDW RI SHDFK SDOP IUXLW &KDSWHU f +RZHYHU WKH KDUYHVWLQJ RI SDOP KHDUW HOLPLQDWHV VWHPV WKDW ZRXOG HYHQWXDOO\ JURZ WR SURGXFH IUXLW DQG VWRUH QXWULHQWVf VR WKDW IUXLW KDUYHVW ZKLFK DFFRXQWV IRU DSSUR[LPDWHO\ b RI WKH FXUUHQW DJURIRUHVW 1 H[SRUW PLJKW GHFUHDVH $YDLODELOLW\ RI ERWK 3 DQG 1 LQ WKH V\VWHP FRXOG SRWHQWLDOO\ LQFUHDVH ZLWK WKH OLEHUDWLRQ RI WKHVH HOHPHQWV VWRUHG LQ OHDIOHWV DQG XQXVHG OHDI VKHDWK UHVLGXHV 3DOP KHDUW DOVR KDV D PXFK JUHDWHU PDUNHW YDOXH DQG GRHV QRW SHULVK DV HDVLO\ GXULQJ WUDQVSRUW ZKLFK ZRXOG JLYH IDUPHUV D KLJKHU UHWXUQ IRU HDFK NLORJUDP RI RUJDQLF PDWWHU UHPRYHG IURP WKH V\VWHP &OHDUO\ WKH HIIHFW RI LQWHQVLI\LQJ SDOP KHDUW KDUYHVW RQ 1 DQG 3 F\FOLQJ UHPRYDO DQG PDQDJHPHQW VKRXOG EH H[DPLQHG IXUWKHU HVSHFLDOO\ LQ WKH PRQRVSHFLILF SDOP KHDUW SODQWDWLRQV WKDW ZHUH JDLQLQJ SRSXODULW\ ZLWK IDUPHUV DV D PRUH DWWUDFWLYH DOWHUQDWLYH WR PL[HGVSHFLHV DJURIRUHVWV 5HJDUGOHVV RI WKH KDUYHVW VWUDWHJ\ HPSOR\HG WKH ODUJH DQQXDO UHPRYDO RI 1 ZLWK DJURIRUHVW FURS KDUYHVW VXJJHVWV WKDW 1 DYDLODELOLW\ PD\ OLPLW RYHUDOO DJURIRUHVW SURGXFWLYLW\ LQ WKH QHDU IXWXUH LI VXFK ORVVHV DUH QRW RIIVHW E\ DGGLWLRQV )RUWXQDWHO\ 1 FDQ EH DGGHG WR WKH V\VWHP WKURXJK DWPRVSKHULF IL[DWLRQ RI 1 E\ OHJXPLQRXV SODQWV DQG 5(&$ IDUPHUV DSSHDUHG YHU\ DZDUH RI WKH LPSRUWDQFH RI 1 DGGLWLRQV WR VXVWDLQLQJ FURS SURGXFWLYLW\ DQG WKH SRWHQWLDO UROH RI OHJXPHV DV 1IL[HUV $OWKRXJK IDUPHUV KDG ODUJHO\ HUDGLFDWHG WKH FOLPELQJ 0DFXQD YLQHV IURP WKHLU DJURIRUHVWV WKH %UD]LOLDQ DJURQRPLF UHVHDUFK LQVWLWXWLRQ (0%5$3$ EHJXQ H[SHULPHQWLQJ ZLWK VHYHUDO RWKHU OHJXPH VSHFLHV ZLWK D IHZ 5(&$ IDUPHUV &ROODERUDWLRQ DPRQJ (0%5$3$ VFLHQWLVWV ORFDO H[WHQVLRQ

PAGE 183

DJHQWV DQG IDUPHUV ZLOO KHOS HQVXUH WKDW VSHFLHV DUH FKRVHQ EDVHG XSRQ WKHLU HDVH RI PDQDJHPHQW DV ZHOO DV RQ FKDUDFWHULVWLFV VXFK DV OHDI OLWWHU TXDOLW\ DQG DGDSWDELOLW\ WR WKH UHJLRQfV SK\VLRJUDSK\ 7KXV UHLQWURGXFLQJ 1IL[LQJ VSHFLHV WR 5(&$fV DJURIRUHVWU\ V\VWHPV LV QRW DQ LQVXUPRXQWDEOH FKDOOHQJH DOWKRXJK WKH PDQDJHPHQW RI OHJXPLQRXV FRYHU FURSV PD\ QHHG VRPH PRGLILFDWLRQ WR PD[LPL]H 1 F\FOLQJ HIILFLHQF\ )RU H[DPSOH XQOLNH XQGHUVWRU\ ZHHG\ YHJHWDWLRQ WKDW ZDV JHQHUDOO\ FXW GRZQ WZLFH D \HDU DQG OHIW WR GHFRPSRVH RQ WKH DJURIRUHVW IORRU PDQ\ IDUPHUV DOORZHG URZV RI 'HVPRGLXP WR JURZ XQSUXQHG WKURXJKRXW WKH HQWLUH VHDVRQ 7KH OHJXPHV ZRXOG QDWXUDOO\ GLH GXULQJ WKH GU\ VHDVRQ EXW IDUPHUV FRPSODLQHG WKDW WKH ODUJH GU\ VKUXEV SUHVHQWHG D ILUH KD]DUG DQG VRPH UHVHDUFKHUV EHOLHYHG WKDW WKH OHJXPHV H[HUWHG D FRPSHWLWLYH HIIHFW RQ FXSXDVVX WUHH JURZWK :KLOH LW LV QRW TXLWH FOHDU ZK\ IDUPHUV ZHUH KHVLWDQW WR PDQDJH OHJXPLQRXV XQGHUVWRULHV LQ WKH VDPH PDQQHU XVHG IRU ZHHG\ UHJURZWK RFFDVLRQDO SUXQLQJ RU FXWWLQJ GRZQ RI WKH OHJXPHV ZRXOG GHFUHDVH WKH GU\ VHDVRQ KD]DUG DQG UHOHDVH 1 DQG RWKHU QXWULHQWV LQ WKH GHFRPSRVLQJ OLWWHU 7KH DQQXDO FXWWLQJ RI XQGHUVWRU\ ZHHGV DV ZDV RSHUDWLRQDOO\ SUDFWLFHG E\ 5(&$ IDUPHUV XQGRXEWHGO\ EHQHILWHG WKH DJURIRUHVW E\ UHGXFLQJ LQWHUVSHFLILF FRPSHWLWLRQ IRU ZDWHU DQG QXWULHQWV DGGLQJ JUHHQ PDQXUH IRU RUJDQLF PDWWHU EXLOGXS DQG UHOHDVLQJ QXWULHQWV HVSHFLDOO\ DV 1 DQQXDO XSWDNH E\ XQGHUVWRU\ ZHHGV ZDV KLJKHU WKDQ WKH LQLWLDO WRWDO 1 FRQWHQW IRXQG LQ WKH HLJKW\HDUROG FXSXDVVX DQG %UD]LO QXW FDQRSLHV &KDSWHU f )XUWKHU RQIDUP DQG VWDWLRQ H[SHULPHQWDWLRQ ZLWK OHJXPHV FRXOG GHWHUPLQH WKH RSWLPXP SHULRGV IRU SUXQLQJ VR WKDW QXWULHQWV UHOHDVH RFFXUV ZKHQ XSWDNH DQG SURGXFWLRQ UHTXLUHPHQWV DUH WKH KLJKHVW 0DQ\ VWXGLHV KDYH VKRZQ KRZHYHU WKDW HYHQ WKH PRVW HIILFLHQWO\PDQDJHG 1IL[LQJ VSHFLHV

PAGE 184

FDQQRW HQWLUHO\ FRPSHQVDWH IRU KLJK DQQXDO 1 ORVVHV IURP D V\VWHP ,PEDFK HW DO f 7KXV ZKLOH WKH LQFRUSRUDWLRQ RI OHJXPHV PD\ H[WHQG DJURIRUHVW SURGXFWLYLW\ E\ DGGLQJ 1 DQG LQFUHDVLQJ RUJDQLF PDWWHU F\FOLQJ LW FDQQRW JXDUDQWHH WKDW WKH V\VWHP ZLOO QRW EHFRPH 1OLPLWHG ZLWKRXW 1 DQG RWKHU QXWULHQWf DGGLWLRQV WKDW EDODQFH LRVVHV 0RUHRYHU VRLO 3 GHILFLHQFLHV RIWHQ OLPLW 1IL[DWLRQ LQ WURSLFDO VRLOV (ZHO f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f WKH SHDFK SDOPFXSXDVVX%UD]LO QXW FRPPHUFLDO SODQWDWLRQ DJURIRUHVW SODQWHG E\ WKH 5(&$ RUJDQL]DWLRQ KDV WKH SRWHQWLDO WR PHHW WKHVH FULWHULD WR YDU\LQJ GHJUHHV GHSHQGLQJ XSRQ IXWXUH PDQDJHPHQW 7KLV SDUWLFXODU V\VWHP DSSHDUV WR SURPRWH

PAGE 185

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f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f LQFUHDVHG WKH SURFHVVLQJ

PAGE 186

WUDQVSRUW DQG VWRUDJH FRVWV IRU 5(&$ FRPSDUHG WR WKRVH LQFXUUHG E\ SURGXFHUV ORFDWHG FORVHU WR ODUJH XUEDQ FHQWHUV $GGLQJ YDOXH WR SURGXFWV SULRU WR VDOH WKURXJK SURFHVVLQJ ZLOO LQFUHDVH WKH PDUNHWDELOLW\ RI 5(&$fV FURSV )RU H[DPSOH PDNLQJ SDVWHXUL]HG MXLFH FRQFHQWUDWHV MDPV DQG FDQG\ IURP FXSXDVVX SXOS DV ZHOO DV fFKRFRODWH FXSXODWHff IURP FXSXDVVX EHDQV ZLOO DGG YDOXH WR SURGXFWV LQFUHDVH WKHLU VKHOI OLIH DQG SHUKDSV IDFLOLWDWH WUDQVSRUWDWLRQ DQG VWRUDJH 5(&$fV QHZO\JDLQHG VWDWHKRRGVKLS ZLWK 5RQGQLD PD\ KHOS HQVXUH WKDW WKH WRZQ LV SURYLGHG ZLWK LPSURYHG LQIUDVWUXFWXUDO VXSSRUW DQG PDLQWHQDQFH QHFHVVDU\ WR LPSURYH SURGXFW SURFHVVLQJ &KDSWHU f ,PSURYLQJ WKH TXDOLW\ RI FDQQHG KHDUWRISDOP ZLOO PDNH 5(&$f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b RI WKH WRWDO PDVV KDUYHVWHG IURP WKH 5(&$ FRPPHUFLDO SODQWDWLRQ DJURIRUHVW 7KLV XQGHUVFRUHV WKH LPSRUWDQFH RI GLYHUVLILFDWLRQ LQ IXWXUH DJURIRUHVW SODQWDWLRQV DQG WKH QHHG IRU PDUNHW UHVHDUFK FRQGXFWHG LQ FROODERUDWLRQ ZLWK ORFDO QRQJRYHUQPHQWDO RUJDQL]DWLRQV 1*2fVf VXFK DV 3(6$&5( WR GHWHUPLQH ZKLFK SURGXFWV DUH PRVW PDUNHWDEOH LQ WKH UHJLRQ JLYHQ ORFDO LQIUDVWUXFWXUDO DQG SURFHVVLQJ FRQVWUDLQWV DQG FRQVXPHU GHPDQGV 'XULQJ WKLV VWXG\ SHULRG LW DSSHDUHG WKDW WKH 5(&$ RUJDQL]DWLRQ ZLWK WKH KHOS RI RWKHU

PAGE 187

1*2fV ZDV VORZO\ EXW VXUHO\ DGGUHVVLQJ WKHVH LVVXHV )RU H[DPSOH PDQ\ IDUPHUV ZHUH DOVR SODQWLQJ QDWLYH IRUHVW WLPEHU VSHFLHV LQ PRUH UHFHQWO\ HVWDEOLVKHG DJURIRUHVWU\ V\VWHPV DORQJ ZLWK RWKHU IUXLW WUHHV DQG FDVK FURSV VXFK DV FRIIHH DQG FLWUXV &RQIURQWLQJ WKHVH PDUNHW FKDOOHQJHV ZLOO JR D ORQJ ZD\ WRZDUGV HQVXULQJ WKH HFRQRPLF YLDELOLW\ RI WKH RUJDQL]DWLRQ DQG LWV FRPPHUFLDO SODQWDWLRQ DJURIRUHVWV %URZGHU f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fV SRWHQWLDO IRU VXVWDLQHG SURGXFWLRQ WKH\ PXVW FRQWLQXH WR PLQLPL]H ULVN E\ FOHDULQJ IRUHVW DQG SODQWLQJ QHZ V\VWHPV &KDSWHU f 0RUHRYHU LW VHHPV XQOLNHO\ WKDW ODQG RZQHUV ZLOO FRQWLQXH WR LQYHVW UHVRXUFHV VXFK DV ODERU RU SXUFKDVHG LQSXWV LQ D V\VWHP WKDW GRHV JXDUDQWHH HFRQRPLF VHFXULW\ QR PDWWHU KRZ HFRORJLFDOO\ VXVWDLQDEOH LW PD\ EH 7KXV LW LV LPSHUDWLYH WKDW UHVHDUFK LQVWLWXWLRQV VXFK DV (0%5$3$ DV ZHOO DV ORFDO DQG IRUHLJQ 1*2fV VXFK DV 3(6$&5( FRQWLQXH WR ZRUN ZLWK SURGXFHUV RUJDQL]DWLRQV WR KHOS WKHP GHYHORS ERWK SUDFWLFHV WKDW PDLQWDLQ RU LQFUHDVH

PAGE 188

SURGXFWLYLW\ DQG V\VWHPV WKDW PHHW PDUNHW GHPDQGV ZLWK PLQLPDO HQYLURQPHQWDO GHJUDGDWLRQ 'LUHFW SDUWLFLSDWLRQ E\ IDUPHUV LQ WKH LQYHVWLJDWLYH SURFHVV ZLOO KRSHIXOO\ IRVWHU D JUHDWHU XQGHUVWDQGLQJ IRU WKH SURFHVVHV WKDW FRQWURO VXVWDLQHG SURGXFWLRQ DQG HFRV\VWHP KHDOWK WKH FRQVWUDLQWV IDFHG E\ KRXVHKROGV DQG WKH RSSRUWXQLWLHV DYDLODEOH IRU PRUH VXVWDLQDEOH DJURHFRV\VWHP PDQDJHPHQW

PAGE 189

/,67 2) 5()(5(1&(6 $EUDPV 00 DQG :0 -DUUHLO %LRDYDLODELOLW\ LQGH[ IRU SKRVSKRUXV XVLQJ LRQ H[FKDQJH UHVLQ LPSUHJQDWHG PHPEUDQHV 6RLO 6FLHQFH 6RFLHW\ RI $PHULFD -RXUQDO $H 1$ULKDUD 2NDGD 7
PAGE 190

%HFN 0 $ DQG 3$ 6DQFKH] 6RLO SKRVSKRUXV IUDFWLRQ G\QDPLFV GXULQJ \HDUV RI FXOWLYDWLRQ RQ D 7\SLF 3DOHXGXOW 6RLO 6FLHQFH %HFN 0$ DQG 3$ 6DQFKH] 6RLO SKRVSKRUXV PRYHPHQW DQG EXGJHW DIWHU \HDUV RI IHUWLOL]HG FXOWLYDWLRQ LQ WKH $PD]RQ EDVLQ 3ODQW DQG 6RLO %HHU ,PSOHPHQWLQJ RQIDUP DJURIRUHVWU\ UHVHDUFK OHVVRQV OHDUQHG LQ 7DODPDQFD &RVWD 5LFD $JURIRUHVWU\ 6\VWHPV %HHU $ %RQQHPDQQ : &KDYH] +: )DVVEHQGHU $ & ,PEDFK DQG 0DUWHO 0RGHOOLQJ DJURIRUHVWU\ V\VWHPV RI FDFDR 7KHREURPD FDFDRf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£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

PAGE 191

%URZGHU -2 5HDGLQJ FRORQLVW ODQGVFDSHV VRFLDO LQWHUSUHWDWLRQV RI WURSLFDO IRUHVW SDWFKHV LQ DQ $PD]RQLDQ DJULFXOWXUDO IURQWLHU 3DJHV LQ 6FKHOKDV DQG 5 *UHHQEHUJ HGLWRUV )RUHVW 3DWFKHV LQ 7URSLFDO /DQGVFDSHV ,VODQG 3UHVV :DVKLQJWRQ & 86$ %URZQ ) & 1HSVWDG 'H 2 3LUHV /0 /X] DQG $ 6 $-HFKDQGUH &DUERQ VWRUDJH DQG ODQGXVH LQ H[WUDFWLYH UHVHUYHV $FUH %UD]LO (QYLURQPHQWDO &RQVHUYDWLRQ %URZQ 6 $-5 &fOHVSLH DQG $( /XJR %LRPDVV HVWLPDWLRQ PHWKRGV IRU WURSLFDO IRUHVWV ZLWK DSSOLFDWLRQV WR IRUHVW LQYHQWRU\ GDWD )RUHVW 6FLHQFH %URZQ 6 DQG $( /XJR 7URSLFDO VHFRQGDU\ IRUHVWV -RXUQDO RI 7URSLFDO (FRORJ\ %\DUG 5 .& /HZLV ) 0RQWDJQLQL /HDI OLWWHU GHFRPSRVLWLRQ DQG PXOFK SHUIRUPDQFH IURP PL[HG DQG PRQVSHFLILF SODQWDWLRQV RI QDWLYH WUHH VSHFLHV LQ &RVWD 5LFD $JULFXOWXUH (FRV\VWHPV DQG (QYLURQPHQW &DEUDO 9HOKR & $ :KLSNH\ DQG -DQLFN &XSXDVVX $ QHZ EHYHUDJH FURS IRU %UD]LO3DJHV LQ -DQLFN DQG -( 6LPRQ HGLWRUV $GYDQFHV LQ 1HZ &URSV 3URFHHGLQJV RI WKH )LUVW 1DWLRQDO 6\PSRVLXP 1HZ &URSV 5HVHDUFK 'HYHORSPHQW (FRQRPLFV 7LPEHU 3UHVV 3RUWODQG 2UHJRQ 86$ &DOGZHOO 00 ([SORLWLQJ QXWULHQWV LQ IHUWLOH VRLO PLFURVLWHV 3DJHV LQ 0 0 &DOGZHOO DQG : 3HDUF\ HGLWRUV ([SORLWDWLRQ RI (QYLURQPHQWDO +HWHURJHQHLW\ EY 3ODQWV (FRSK\VLRORJLFDO 3URFHVVHV $ERYH DQG %HORZJURXQG $FDGHPLF 3UHVV ,QF 6DQ 'LHJR &DOLIRUQLD 86$ &DO]DYDUD %%* &XOWXUDV GD $PD]RQLD )UXWHLUDV $ELHLUR $EULF]HLUR %DFXUL]HLUR %LULE£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t 6RQV ,QF 1HZ
PAGE 192

&KDPEHUV 5 $ 3DFH\ DQG /$ 7KUXSS )DUPHU )LUVW )DUPHU ,QQRYDWLRQ DQG $JULFXOWXUDO 5HVHDUFK ,QWHUPHGLDWH 7HFKQRORJ\ 3XEOLFDWLRQV /RQGRQ 8. &KDQGHU 6 *R\DO 3 1DQGDO .. .DSRRU 6RLO RUJDQLF PDWWHU PLFURELDO ELRPDVV DQG HQ]\PH DFWLYLWLHV LQ D WURSLFDO IRUHVW DJURIRUHVWU\ %LRORJ\ DQG )HUWLOLW\ RI 6RLOV &KDSLQ )6 7KH PLQHUDO QXWULWLRQ RI ZLOG SODQWV $QQQXDO 5HYLHZ RI (FRORJ\ DQG 6\VWHPDWLFV &OHPHQW & 5 I 7KH SHMLED\H SDOP %DFWULV JDVLSDHV +%.f DV DQ DJURIRUHVWU\ FRPSRQHQW $JURIRUHVWU\ 6\VWHPV &OHPHQW &5 'RPHVWLFDWLRQ RI WKH SHMLED\H SDOP %DFWULV JDVLSDHVf SDVW DQG SUHVHQW 3DJHV LQ 0%DLLN HGLWRU 7KH 3DOP 7UHH RI /LIH %LRORJ\ 8WLOL]DWLRQ DQG &RQVHUYDWLRQ $GYDQFHV LQ (FRQRPLF %RWDQ\ 1HZ
PAGE 193

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fWHUUD ILUPHf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
PAGE 194

(ZHO 00D]]DULQR DQG &: %HULVK 7URSLFDO VRLO IHUWLOLW\ FKDQJHV XQGHU PRQRFXOWXUHV DQG VXFFHVVLRQDO FRPPXQLWLHV RI GLIIHUHQW VWUXFWXUH (FRORJLFDO $SSOLFDWLRQV )DUGHDX & '\QDPLFV RI SKRVSKDWH LQ VRLOV $Q LVRWRSLF RXWORRN )HUWLOL]HU 5HVHDUFK )DVVEHQGHU +: / $OS]DU +HXYHOGRS + )ROVWHU DQG (QULTXH] 0RGHOOLQJ DJURIRUHVWU\ V\VWHPV RI FDFDR 7KHREURPD FDFDf ZLWK ODXUHO &RUGLD DOOLRGRUDf DQG SRUR (U\WKULQD SRHSSLJLQDf LQ &RVWD 5LFD ,,, &\FOHV RI RUJDQLF PDWWHU DQG QXWULHQWV $JURIRUHVWU\ 6\VWHPV )HDPVLGH 30 'HIRUHVWDWLRQ LQ %UD]LOLDQ $PD]RQLD WKH HIIHFW RI SRSXODWLRQ DQG ODQG WHQXUH $PELR )HDPVLGH 30 $PD]RQLDQ GHIRUHVWDWLRQ DQG JOREDO ZDUPLQJ FDUERQ VWRFNV LQ YHJHWDWLRQ UHSODFLQJ %UD]LOfV $PD]RQ IRUHVW )RUHVW (FRORJ\ DQG 0DQDJHPHQW )HDPVLGH 30 DQG : 0DOKHLURV *XLPDU£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£R DR FRQKHFLPHQWR GR VLVWHPD UDGLFXODU GD SXSXQKHLUD %DFWQV *DVLSDHV +%. *XLOLHOPD JDVLSDHV +%.f %DLOH\f 6ROR /DWRVVROR $PDUHOR WH[WXUD PGLD $FWD $PD]QLFD

PAGE 195

)HUUHLUD 6$1 &5 &OHPHQW 5DQ]DQL DQG 66 &RVWD &RQWULEXLGR DR FRQKHFLPHQWR GR VLVWHPD UDGLFXODU GD SXSXQKHLUD %DFWULV *DVLSDHV .XQWK 3DOPDHf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fV YLHZ 3DJHV LQ 3URFWRU HGLWRU 0LQHUDO 1XWULHQWV LQ 7URSLFDO )RUHVW DQG 6DYDQQD (FRV\VWHPV %ODFNZHOO 6FLHQWLILF 3XEOLFDWLRQV 2[IRUG 8. *UXSR 3(6$&5( 6XVWDLQDELOLW\ RI DJURIRUHVWU\ DQG DJULFXOWXUDO V\VWHPV XVHG E\ 5XEEHU 7DSSHUV DQG VHWWOHUV LQ WKH VWDWH RI $FUH %UD]LOLDQ $PD]RQ 3DSHU 3UHVHQWHG DW WKH 1LQWK $QQXDO )DUPLQJ 6\VWHPV 5HVHDUFK([WHQVLRQ 6\PSRVLXP 2FWREHU )D\HWWHYLOOH $. 86$

PAGE 196

+DDJ 5RRW GLVWULEXWLRQ SDWWHUQV LQ D SRO\FXLWXUDL V\VWHP ZLWK ORFDO WUHH FURSV RQ DQ DFLG XSODQG VRLO LQ &HQWUDO $PD]RQLD 0DVWHU RI 6FLHQFH 7KHVLV 8QLYHUVLWDW %D\UHXWK %D\UHXWK *HUPDQ\ +DQGV 0 $) +DUULVRQ DQG 7 %D\OLVV6PLWK 3KRVSKRUXV '\QDPLFV LQ VODVKDQG EXP DQG DOOH\ FURSSLQJ RQ 8OWLVROV RI WKH KXPLG WURSLFV 3DJHV LQ + 7LHVVHQ + HGLWRU 3KRVSKRUXV LQ WKH *OREDO (QYLURQPHQW 7UDQVIHUV &\FOHV DQG 0DQDJHPHQW -RKQ :LOH\ t 6RQV &KLFKHVWHU 8 +D\GX -DQG 5 + :DOODFH &XUVR GH FRPHUFLDOL]DJ£R SDUD SURGXWRV DJURIORUHVWDLV $SUHVHQWD"DR H REVHUYDUHV ,QWHUQDWLRQDO :RUNLQJ 3DSHU 6HULHV ,: ,QWHUQDWLRQDO $JULFXOWXUDO 7UDGH DQG 'HYHORSPHQW &HQWHU 8QLYHUVLW\ RI )ORULGD ,QVWLWXWH RI )RRG DQG $JULFXOWXUDO 6FLHQFHV *DLQHVYLOOH )/ 86$ +H =/ -:X $*2f'RQQHOO DQG -. 6\HUV 6HDVRQDO UHVSRQVHV LQ PLFURELDO ELRPDVV FDUERQ SKRVSKRUXV DQG VXOSKXU LQ VRLOV XQGHU SDVWXUH %LRORJ\ DQG )HUWLOLW\ RI 6RLOV +HFKW 6 DQG $ &RFNEXP 7KH )DWH RI WKH )RUHVW 'HYHORSHUV 'HVWUR\HUV DQG 'HIHQGHUV RI WKH $PD]RQ +DUSHU 3HUHQQLDO 1HZ
PAGE 197

,%*( 3URLHWR =RQHDPHQWR GDV 3RWHQFLDOLGDGHV GRV 5HFXUVRV 1DWXUDLV GD $PD]RQLD /HJDO )XQGDFDR ,QVWLWXWR %UDVLOHLUR GH *HRJUDID H (VW£WLFD 5LR GH -DQHLUR %UD]LO ,PEDFK $ & +: )DVVEHQGHU 5 %RUHO %HHU DQG $ %RQQHPDQQ 0RGHOOLQJ DJURIRUHVWU\ V\VWHPV RI FDFDR 7KHREURPD FDFDf ZLWK ODXUHO &RUGLD DOOLRGRUDf DQG SRUR (U\WKULQD SRHSSLJLQDf LQ &RVWD 5LFD ,9 :DWHU EDODQFHV QXWULHQW LQSXWV DQG OHDFKLQJ $JURIRUHVWU\ 6\VWHPV -RKQVRQ DQG 3.5 1DLU 3DJHV ;;;;;; LQ 3 5 1DLU HGLWRU $JURIRUHVWUY 6\VWHPV LQ WKH 7URSLFV .OXZHU $FDGHPLF 3XEOLVKHUV 'RUGUHFKW 1HWKHUODQGV -RUGDQ &) 1XWULHQW &\FOLQJ LQ 7URSLFDO )RUHVW (FRV\VWHPV 3ULQFLSOHV DQG WKHLU $SSOLFDWLRQ LQ 0DQDJHPHQW DQG &RQVHUYDWLRQ -RKQ :LOH\ t 6RQV &KLFKHVWHU (QJODQG -RUGDQ &) 3HUPDQHQW SORWV IRU DJULFXOWXUH DQG IRUHVWU\ 3DJHV LQ &) -RUGDQ HGLWRU $PD]RQLDQ 5DLQ )RUHVWV (FRV\VWHP 'LVWXUEDQF DQG 5HFRYHU\ 6SULQJHU9HUODJ %HUOLQ +HLGHOEHUJ *HUPDQ\ -RUGDQ &) DQG (VFDODQWH 5RRW SURGXFWLYLW\ LQ DQ $PD]RQLDQ UDLQ IRUHVW (FRORJ\ -RUGDQ &) DQG & 8KO %LRPDVV RI D fWLHUUD ILUPHf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
PAGE 198

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t 6RQV &KLFKHVWHU 8. /DYHOOH 3 ( %ODQFKDUW $ 0DUWLQ $9 6SDLQ DQG 6 0DUWLQ ,PSDFW RI VRLO IDXQD RQ WKH SURSHUWLHV RI VRLOV LQ WKH KXPLG WURSLFV 3DJHV LQ 5 /DL HGLWRU 0\WKV DQG 6FLHQFH RI 6RLOV RI WKH 7URSLFV 6RLO 6FLHQFH 6RFLHW\ RI $PHULFD 6SHFLDO 3XEOLFDWLRQ 0DGLVRQ :, 86$ /HLWH $& 8QSXEOLVKHG $ EXVFD GH QRYRV PHUFDGRV SDUD SURGXWRV DJURIORUHVWDLV 2 FDVR GR 3URMHWR 5(&$ 5HSRUW IRU WKH 0XQLFLSDO 6HFUHWDU\ RI $JULFXOWXUH 6(0$*f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

PAGE 199

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

PAGE 200

0RQWDJQLQL ) 5DPVWDG DQG ) 6DQFKR /LWWHUIDOO OLWWHU GHFRPSRVLWLRQ DQG WKH XVH RI PXLFK RI IRXU LQGLJHQRXV WUHH VSHFLHV LQ WKH $WODQWLF ORZODQGV RI &RVWD 5LFD $JURIRUHVWU\ 6\VWHPV 0RUDHV -)/ % 9RONRII && &HUUL DQG 0 %HPRX[ 6RLO SURSHUWLHV XQGHU $PD]RQ IRUHVW DQG FKDQJHV GXH WR SDVWXUH LQVWDOODWLRQ LQ 5RQGQLD %UD]LO *HRGHUPD 0RUD8USL 3HMLED\ 3DOP %DFWULV JDVLSDHVf 3DJHV LQ ( +HUQ£QGH] %HUPHMR DQG /HQ HGLWRUV &XOWLYRV 0DUJLQDGRV 2WUD 3HUVSHFWLYD GH )RRG t $JULFXOWXUH 2UJDQL]DWLRQ )$2f DQG -DUGQ %RW£QLFR GH &UGRED )$2 3URGXFWLRQ DQG 3URWHFWLRQ 3DSHU 5RPH 0RUD8USL -& :HEHU DQG &5 &OHPHQW 3HDFK 3DOP %DGULV ]DVLSDHV .XQWK 3URPRWLQJ WKH FRQVHUYDWLRQ DQG XVH RI XQGHUXWLOL]HG DQG QHJOHFWHG FURSV ,QVWLWXWH RI 3ODQW *HQHWLFV DQG &URS 3ODQW 5HVHDUFK *DWHUVOHEHQ,QWHPDWLRQDO 3ODQW *HQHWLF 5HVRXUHV ,QVWLWXWH 5RPH ,WDO\ 0RUHLUD 5(&$ HQIUHQWD GLILFXOGDGHV 6QWHVH GH XP SURMHWR RUJLQDO $ *D]HWD 2FWREHU 0RUL 6$ DQG *7 3UDQFH 7D[RQRP\ HFRORJ\ DQG HFRQRPLF ERWDQ\ RI WKH %UD]LO QXW %HUWKROOHWLD H[FHOVD +XPE t %RQSO /HF\WKLGDFHDHf $GYDQFHV LQ (FRQRPLF %RWDQ\ 0XUSK\ DQG 3 5LOH\ $ PRGLILHG VLQJOH VROXWLRQ PHWKRG IRU GHWHUPLQDWLRQ RI SKRVSKDWH LQ QDWXUDO ZDWHUV $QDOWLFD &KLPLFD $FWD 1DLU 3 5 7KH UROH RI WUHHV LQ VRLO SURGXFWLYLW\ DQG SURWHFWLRQ 3DJHV LQ 3 5 1DLU HGLWRU $JURIRUHVWUY 6\VWHPV LQ WKH 7URSLFV .OXZHU $FDGHPLF 3XEOLVKHUV 'RUGUHFKW 1HWKHUODQGV 1DLU 3.5 DQG 5* 0XVFKOHU $JURIRUHVWU\ 3DJHV LQ / 3DQFHO HGLWRU 7URSLFDO )RUHVWU\ +DQGERRN 9ROXPHV DQG 6SULQJHU9HUODJ %HUOLQ +HLGHOEHUJ *HUPDQ\ 1HJULQ 0 $ 6 *RQ]£OH]&DUFHGR DQG -0 +HP£QGH]0RUHQR 3 IUDFWLRQ LQ VRGLXP ELFDUERQDWH H[WUDFWV RI DQGLF VRLOV 6RLO %LRORJ\ DQG %LRFKHPLVWU\ 1HLOO & -0 0HOOLOR 3$ 6WHXGOHU && &HUUL -)/ GH 0RUDHV 0& 3LFFROR DQG 0 %ULWR 6RLO FDUERQ DQG QLWURJHQ VWRFNV IROORZLQJ IRUHVW FOHDULQJ IRU SDVWXUH LQ WKH VRXWKZHVWHUQ %UD]LOLDQ $PD]RQ (FRORJLFDO $SSOLFDWLRQV

PAGE 201

1HOVRQ : DQG /( 6RPPHUV 7RWDO FDUERQ RUJDQLF FDUERQ DQG RUJDQLF PDWWHU 3DJHV ,Q $/ 3DJH HGLWRU 0HWKRGV RI 6RLO $QDO\VLV 3DUW &KHPLFDO DQG 0LFURELRORJLFDO 3URSHUWLHV $PHULFDQ 6RFLHW\ RI $JURQRP\ 0DGLVRQ :LVFRQVLQ 86$ 1HSVWDG & &5 GH &DUYDOKR ($ 'DYLGVRQ 3+ -LSS 3$ /HIHEYUH *+ 1HJUHLURV (' GD 6LOYD 7$ 6WRQH 6 ( 7UXPERUH DQG 6 9LHLUD 7KH UROH RI GHHS URRWV LQ WKH K\GURORJLFDO DQG FDUERQ F\FOHV RI $PD]RQLDQ IRUHVWV DQG SDVWXUHV 1DWXUH 1HSVWDG & 8KO DQG ($6 6HUU£R 5HFXSHUDWLRQ RI D GHJUDGHG $PD]RQLDQ ODQGVFDSH IRUHVW UHFRYHU\ DQG DJULFXOWXUDO UHVWRUDWLRQ $PELR 1HZPDQ (, $ PHWKRG RI HVWLPDWLQJ WKH WRWDO OHQJWK RI URRW LQ D VDPSOH -RXUQDO RI $SSOLHG (FRORJ\ 1LFKRODLGHV '( %DQG\ 3$ 6DQFKH] -5 %HQLWHV -+ 9LODFKLFD $&RXWX DQG &6 9DOYHUG $JULFXOWXUDO $OWHUQDWLYHV IRU WKH $PD]RQ %DVLQ %LRVFLHQFH 1\H 3+ DQG '*UHHQODQG &KDQJHV LQ WKH VRLO DIWHU FOHDULQJ WURSLFDO IRUHVW 3ODQW DQG 6RLO 1\H 3+ DQG 3% 7LQNHU 6ROXWH 0RYHPHQW LQ WKH 6RLO5RRW 6\VWHP %ODFNZHOO 6FLHQWLILF 3XEOLFDWLRQV 2[IRUG 8QLWHG .LQJGRP 2OVRQ 6 (QHUJ\ VWRUDJH DQG WKH EDODQFH RI SURGXFHU DQG GHFRPSRVHU LQ HFRORJLFDO V\VWHPV (FRORJ\ 2OVHQ 6 5 DQG /( 6RPPHUV 3KRVSKRUXV 3DJHV LQ & $ %ODFN HGLWRU 0HWKRGV RI 6RLO $QDO\VLV 3DUW &KHPLFDO DQG 0LFURELRORJLFDO 3URSHUWLHV 6RLO 6FLHQFH 6RFLHW\ RI $PHULFD ,QF 0DGLVRQ :LVFRQVLQ 86$ 2VWHUWDJ 5 5RRW '\QDPLFV RI 7URSLFDO )RUHVWV LQ 5HODWLRQ WR 1XWULHQW $YDLODELOLW\ 3K' 'LVVHUWDWLRQ 8QLYHUVLW\ RI )ORULGD *DLQHVYLOOH )/ 86$ 3DOP &$ DQG 3$ 6DQFKH] 'HFRPSRVLWLRQ DQG QXWULHQW UHOHDVH SDWWHUQV RI WKH OHDYHV RI WKUHH WURSLFDO OHJXPHV %LRWURSLFD 3DOP &$ DQG 3$ 6DQFKH] 1LWURJHQ UHOHDVH IURP WKH OHDYHV RI VRPH WURSLFDO OHJXPHV DV DIIHFWHG E\ WKHLU OLJQLQ DQG SRO\SKHQROLF FRQWHQWV 6RLO %LRORJ\ DQG %LRFKHPLVWU\ 3DUILWW 5/ .5 7DWH DQG 5% 0F.HUFKHU 0HDVXUHPHQW RI SKRVSKRUXV PLQHUDOL]DWLRQ XVLQJ DQ DQLRQ H[FKDQJH PHPEUDQH &RPPXQLFDWLRQV LQ 6RLO 6FLHQFH DQG 3ODQW $QDO\VHV

PAGE 202

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£ULD (0%5$3$f 3RUWR 9HOKR 5RQGQLD %UD]LO 5LEHLUR GH 1D]DU 5) :& %DUERVD DQG 5 0 ) 9LJDV 3URFHVVDPHQWR GDV VHPHQWHV GH FXSXDTX SDUD D REWHQT£R GH FXSXODWH %ROHWLP GH 3HVTXLVD 1R (PSUHVD %UDVLOHLUD GH 3HVTXLVD $JURSHFX£ULD (0%5$3$f %HOP 3DUD %UD]LO 5RFKHOHDX '( 3DUWLFLSDWRU\ UHVHDUFK LQ DJURIRUHVWU\ OHDUQLQJ IURP H[SHULHQFHV DQG H[SDQGLQJ RXU UHSHUWRLUH $JURIRUHVWU\ 6\VWHPV 5RFKHOHDX '( 3DUWLFLSDWRU\ UHVHDUFK DQG WKH UDFH WR VDYH WKH SODQHW TXHVWLRQV FULWLTXH DQG OHVVRQV IURP WKH ILHOG $JULFXOWXUH DQG +XPDQ 9DOXHV 5XGGHOO (' DQG %HLQJROHD 7RZDUGV IDUPHU VFLHQWLVWV ,/(,$ 1HZVOHWWHU IRU /RZ ([WHUQDO ,QSXW DQG 6XVWDLQDEOH $JULFXOWXUH 5XL] 32 (O URO GH ODV PLFRUUL]DV HQ SLMXD\R >%DFWULVJDVLSDHV +%.f 3DJHV LQ 0RUD8US /7 6]RWW 0 0XULOOR DQG 90 3DWLR HGLWRUV ,9 &RQJUHVR ,QWHUQDFLRQDO VREUH ELRORJLD DJURQRPLD H LQGXVWULDOL]DFLQ GHO 3LLXDYR 8QLYHUVLGDG GH &RVWD 5LFD 6DQ -RV &RVWD 5LFD 5XVVHOO &( 1XWULHQW &\FOLQJ DQG 3URGXFWLYLW\ RI 1DWLYH DQG 3ODQWDWLRQ )RUHVWV DW -DUL )ORUHVWDO 3DU£ %UD]LO 'RFWRUDO 'LVVHUWDWLRQ 8QLYHUVLW\ RI *HRUJLD $WKHQV *HRUJLD 86$ 6W -RKQ 79 5HVSRQVH RIWUHH URRWV WR GHFRPSRVLQJ RUJDQLF PDWWHU LQ WZR ORZODQG $PD]RQLDQ UDLQIRUHVWV &DQDGLDQ -RXUQDO RI )RUHVW 5HVHDUFK

PAGE 203

6W -RKQ 7 9 3URVSHFWV IRU DSSOLFDWLRQ RI YHVLFXODUDUEXVFXODU P\FRUUKL]DH LQ WKH FXOWXUH RI WURSLFDO SDOPV 3DJHV LQ 0 %DOLFN HGLWRU 7KH 3DOP 7UHH RI /LIH %LRORJ\ 8WLOL]DWLRQ DQG &RQVHUYDWLRQ $GYDQFHV LQ (FRQRPLF %RWDQ\ 1HZ
PAGE 204

6HQHYLUDWQH 5 DQG $ :LOG (IIHFW RI PLOG GU\LQJ RQ WKH PLQHUDOL]DWLRQ RI VRLO QLWURJHQ 3ODQW DQG 6RLO 6HUU£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£R $JURIORUHVWDO RI $HU %UD]LO 0$ 7KHVLV 8QLYHUVLW\ RI )ORULGD *DLQHVYLOOH )/ 86$ 6PLW % DQG 6PLWKHUV 6XVWDLQDEOH DJULFXOWXUH DQG DJURHFRV\VWHP KHDOWK 3DJHV LQ 1 2OH 1LHOVHQ HGLWRU 3URFHHGLQJV RI DQ ,QWHUQDWLRQDO :RUNVKRS RQ $JURHFRVYVWHP +HDOWK 8QLYHUVLW\ RI *XHOSK *XHOSK 2QWDULR &DQDGD 6PLWK &. +/ *KRO] DQG ) GH $VVLV 2OLYHLUD 6RLO QLWURJHQ G\QDPLFV DQG SODQW LQGXFHG VRLO FKDQJHV XQGHU SODQWDWLRQV DQG SULPDU\ IRUHVW LQ ORZODQG $PD]RQLD %UD]LO 3ODQW DQG 6RLO WHUUD ILUPH IRUHVW

PAGE 205

6PLWK + / *KRO] DQG ) GH $VVLV 2OLYHLUD ,Q SUHVV D 6RLO FDUERQ VWRUDJHV DQG G\QDPLFV DIWHU IRUHVW FRQYHUVLRQ WR WUHH SODQWDWLRQV LQ ORZODQG $PD]RQLD %UD]LO 6PLWK + / *KRO] DQG ) GH $VVLV 2OLYHLUD ,Q SUHVV E /LWWHUIDOO DQG QLWURJHQXVH HIILFLHQF\ RI SODQWDWLRQV DQG SULPDU\ IRUHVW LQ WKH HDVWHUQ %UD]LOLDQ $PD]RQ 6PLWK 1 + 6WUDWHJLHV IRU VXVWDLQDEOH DJULFXOWXUH LQ WKH WURSLFV (FRORJLFDO (FRQRPLFV 6PLWK 1 'XERLV &XUUHQW ( /XW] DQG & &OHPHQW $JURIRUHVWU\ H[SHULHQFHV LQ WKH %UD]LOLDQ $PD]RQ &RQVWUDLQWV DQG RSSRUWXQLWLHV 7KH 3LORW 3URJUDP WR &RQVHUYH WKH %UD]LOLDQ 5DLQIRUHVW %UDVLOLD %UD]LO 6P\WK 7DQG 0 6 &UDYR 3KRVSKRUXV PDQDJHPHQW IRU FRQWLQXRXV FRPFRZSHD SURGXFWLRQ LQ D %UD]LOLDQ $PD]RQ 2[LVRO $JURQRP\ -RXUQDO 6RLO 6XUYH\ 6WDII .H\V WR 6RLO 7D[RQRP\ )LIWK (GLWLRQ 3RFDKRQWDV 3UHVV ,QF %ODFNVEXUJ 9LUJLQLD 86$ 6RPEURHN : $PD]RQ 6RLOV D 5HFRQQDLVVDQFH RI WKH 6RLOV RI WKH %UD]LOLDQ $PD]RQ 5HJLRQ &HQWHU IRU $JULFXOWXUDO 3XEOLFDWLRQV DQG 'RFXPHQWV 38'2&f :DJHQLQJHQ 1HWKHUODQGV 6RQJZH 1& '88 2NDOL DQG )( )DVHKXQ /LWWHU GHFRPSRVLWLRQ DQG QXWULHQW UHOHDVH LQ D WURSLFDO UDLQIRUHVW 6RXWKHUQ %DNXQGX )RUHVW 5HVHUYH &DPHURRQ -RXUQDO RI 7URSLFDO (FRORJ\ 6RX]D & 6RORV 3DJHV LQ *HRJUDID GR %UDVLO 9ROXPH 5HJLDR 1RUWH )XQGD"£R ,QVWLWXWR %UDVLOHLUR GH *HRJUDID H (VW£WLFD H 0LQLVWHULR GD (FRQRPD ,%*(f 5LR GH -DQHLUR %UD]LO 6ULYDVWDYD 6& 0LFURELDO & 1 DQG 3 LQ GU\ WURSLFDO VRLOV VHDVRQDO FKDQJHV DQG LQIOXHQFH RI VRLO PRLVWXUH 6RLO %LRORJ\ DQG %LRFKHPLVWU\ 6WDUN 10 DQG &) -RUGDQ 1XWULHQW UHWHQWLRQ E\ WKH URRW PDW RI DQ $PD]RQLDQ UDLQ IRUHVW (FRORJ\ 6WDUN 1 $QG 0 6SUDWW 5RRW ELRPDVV DQG QXWULHQW VWRUDJH LQ UDLQ IRUHVW 2[LVROV QHDU 6DQ &DUORV GH 5LR 1HJUR 7URSLFDO (FRORJ\ 6WHYHQVRQ ) &\FOHV RI 6RLO &DUERQ 1LWURJHQ 3KRVSKRUXV 6XOIXU 0LFURQXWULHQWV :LOH\ 1HZ
PAGE 206

6WHZDUW -:% DQG + 7LHVVHQ '\QDPLFV RI VRLO RUJDQLF SKRVSKRUXV %LRJHRFKHPLVWU\ 6XEOHU 6 DQG & 8KO -DSDQHVH DJURIRUHVWU\ LQ $PD]RQLD $ FDVH VWXG\ LQ 7RPDSX %UD]LO 3DJHV LQ $% $QGHUVRQ HGLWRU $OWHUQDWLYHV WR 'HIRUHVWDWLRQ 6WHSV 7RZDUG 6XVWDLQDEOH 8VH RI WKH $PD]RQ 5DLQ )RUHVW &RORPELD 8QLYHUVLW\ 3UHVV 1HZ
PAGE 207

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f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f LQ &RVWD 5LFD 7XUULDOED YDQ :DPEHNH $ 6RLOV RI WKH 7URSLFV 3URSHUWLHV DQG $SSUDLVDO 0F*UDZ+LOO ,QF 1HZ
PAGE 208

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f LQ ,QGLDQDSROLV ,QGLDQD 86$ )HEUXDU\ :DOODFH 5+ &RPPXQLW\EDVHG SURGXFWLRQ DQG PDUNHWLQJ RI FXSXD"X 7KHREURPD JUDQGLIORUXPf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
PAGE 209

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fV 6FKRRO RI )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ ZKHUH VKH HDUQHG D 0DVWHU RI 6FLHQFH GHJUHH LQ IRUHVW UHVRXUFHV DQG FRQVHUYDWLRQ ZLWK D FRQFHQWUDWLRQ LQ WUHH SK\VLRORJ\ DQG UHIRUHVWDWLRQ :KLOH D JUDGXDWH VWXGHQW DW )ORULGD VKH ZRUNHG ZLWK WKH 8QLYHUVLW\fV ,QWHUQDWLRQDO 7UDLQLQJ 'LYLVLRQ DV D WUDLQHU IRU VKRUW FRXUVHV JLYHQ IRU LQWHUQDWLRQDO SDUWLFLSDQWV LQ DJURIRUHVWU\ IDUPLQJ V\VWHPV UHVHDUFK t H[WHQVLRQ )65(f DQG JHQGHU DQDO\VLV LQ QDWXUDO UHVRXUFH PDQDJHPHQW 6KH ZDV DOVR HPSOR\HG DV WKH FDPSXV 3HDFH &RUS UHFUXLWHU $IWHU UHFHLYLQJ D 7LWOH 9, )RUHLJQ /DQJXDJH DQG $UHD VWXGLHV )HOORZVKLS WR VWXG\ %UD]LOLDQ 3RUWXJXHVH LQ VKH EHJDQ D 3K SURJUDP LQ IRUHVW UHVRXUFHV DQG FRQVHUYDWLRQ ZLWK D FRQFHQWUDWLRQ LQ IRUHVW HFRORJ\ DQG VRLOV DJURIRUHVWU\ DQG H[WHQVLRQ

PAGE 210

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ ,/ 'XU\HD 3URIHVVRU RI )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ f§ M 3.5 1DLU 3URIHVVRU RI )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 2P$‹ I :HQGHOO 3 &URSSHU &RXUWHV\ $VVRFLDWH 6FLHQWLVW RI )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 1LFKRODV % &RPHUIRUG 7 3URIHVVRU RI 6RLO DQG :DWHU 6FLHQFH

PAGE 211

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D WKHVLV IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ AODXPWX/ RG£PX,O 0DULDQQH & 6FKPLQN 3URIHVVRU RI /DWLQ $PHULFDQ 6WXGLHV 7KLV GLVVHUWDWLRQ ZDV VXEPLWWHG WR WKH *UDGXDWH )DFXOW\ RI WKH 6FKRRO RI )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ LQ WKH &ROOHJH RI $JULFXOWXUH DQG WR WKH *UDGXDWH 6FKRRO DQG ZDV DFFHSWHG DV SDUWLDO IXOILOOPHQW RI WKH UHTXLUHPHQWV IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 'HFHPEHU :D\QH + 6PLWK 'LUHFWRU )RUHVW 5HVRXUFHV DQG &RQVHUYDWLRQ Z 5DFKHO % 6KLUHPDQ 'HDQ &ROOHJH RI $JULFXOWXUH 'HDQ *UDGXDWH 6FKRRO

PAGE 212

/2 IW n0O96V] 81,9(56,7< 2) )/25,'$ ,,, ,,, +LOO OL+,


xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EGJM9RUZ5_C3ZYE7 INGEST_TIME 2014-04-04T17:24:32Z PACKAGE AA00020961_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES