Structured Equations to Assess the Socioeconomic and Business Factors Influencing the Financial Sustainability of Traditional Amazonian Chakra in the Ecuadorian Amazon
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1. Introduction
Sustainability contributes to ensuring long-term food production by linking natural resources with their use and management [1,2,3]. Therefore, it is of great interest to deepen our understanding of the relevant variables in stakeholders’ decision-making concerning sustainability, such as the socioeconomic, organizational, and external factors influencing the sustainability of their operations [4,5].
The assessment of sustainability is developed through a set of indicators implemented in agricultural, forestry, and livestock projects [6]. The agrosystem evaluation framework encompasses a cyclical, adaptable, and practical structure with a participatory, interdisciplinary, and comprehensive approach, facilitating the identification of the intersection of environmental, social, and economic processes involved in sustainability [7,8,9].
Currently, various methodologies exist for measuring agricultural sustainability, such as response-inducing sustainability evaluation (RISE) which assesses agricultural sustainability in three dimensions: environmental (30 parameters across 6 indicators), social (10 parameters across 2 indicators), and economic (11 parameters across 2 indicators), covering everything from land use to farm management [10,11]. The sustainability assessment of farming and the environment (SAFE) is a holistic methodology with a hierarchical structure that consists of principles, criteria, indicators, and reference values. The principles are related to the multiple functions of the agroecosystem [12], indicateurs de durabilité des exploitations agricoles or farm sustainability indicators (IDEA) which consists of approximately 41 indicators, distributed across the three dimensions of sustainability: Economic Dimension: about 12 indicators. Social Dimension: around 8 indicators. Environmental Dimension: approximately 21 indicators [13], monitoring tool for integrated farm sustainability (MOTIFS) it assesses agricultural sustainability across three levels, with scores ranging from 0 to 100, covering economic, ecological, and social aspects to identify areas for improvement [14,15]. The system for environmental and agricultural modeling; linking European science and society’s (SEAMLESS) goal is to develop a framework that underpins the integrated assessment of agricultural systems on multiple scales (from the field, farm, region up to the EU and the world) [16,17]. Multi-criteria decision analysis (MCDA) provides a simple, inexpensive, yet holistic tool for assessing the sustainability level of agricultural systems. The multi-attribute utility theory is utilized [18,19], the evaluation of natural resource management systems incorporating sustainability indicators (MESMIS) which proposes integrating information on the interaction of system components to identify the effects of social, economic, and environmental processes at different scales. Sustainable agroecosystems must meet attributes of high productivity, stability, adaptability, autonomy, and equity [20,21], and the sustainability assessment of food and agriculture systems (SAFA) [22].
Evaluating the sustainability level of diverse agrosystems is of significant interest, both academically and practically. This process is carried out with the purpose of quantifying the causal relationships between various indicators. An outstanding example of such an assessment can be found in a study that reports the influence of financial indicators on the sustainability of the cereal-sheep dairy production system in Castilla La Mancha, Spain, where the structural equation model (SEM) was utilized [23].
SEM is a robust tool for analyzing the relationships of dependence between variables [24,25]. Unlike other techniques, such as multiple regression and factor analysis [26], SEM stands out for its ability to evaluate relationships between unobservable constructs, called latent variables, which can only be measured through observable variables. This allows for the control of the measurement error specific to each variable, which is crucial for assessing the validity of the measured constructs [24].
In this research, causal relationships were analyzed between different dimensions of sustainability: (a) environmental resilience (ER), (b) biodiversity conservation (BC), (c) food security (FS), (d) social factors (SF), and (e) business factors (BF) on the financial-economic sustainability (FES) of the agroforestry cocoa production system (Theobroma cacao), namely the Amazonian Chakra, a traditional agroforestry system (TAFS). The Chakra is an ancestral system used and preserved for millennia by the Kichwa population in the Ecuadorian Amazon [27,28].
For this analysis, 60 indicators selected from the SAFA tool were used to evaluate their performance in 330 cocoa-producing households that employ the Amazonian Chakra system in the Ecuadorian Amazon region (EAR), and to delve into the relationship between sustainability indicators and their influence on the economic and financial stability of these rural producers. The results were analyzed using partial least squares structural equation modeling (PLS-SEM).
The structure of the article begins with an introduction to the Amazonian Chakra, followed by a focus on the SAFA methodology applied to cocoa producers in Amazonian Chakras and the EAR. The materials and methods section describes the formulation of the hypotheses, methodology, data sources, sample design, and data collection instrument. The results of the model validation are presented in the corresponding section. Finally, the discussion and conclusions sections analyze the findings and their implications in comparison to the data from the literature review.
1.1. Context of the Traditional Agroforestry System: The Amazonian Chakra
Tropical agroforestry systems are distinguished by significantly higher levels of biodiversity and sustainability compared to other intensive systems [29]. These systems attain a greater degree of sustainability when they incorporate shade trees comprising approximately 40% of the composition within landscapes that encompass forest remnants [30,31]. In this framework, the Amazonian Chakra deeply aligns with various sustainable development goals (SDGs) [32,33]. In this holistic context, the Amazonia Chakra represents a potential for achieving several of the 17 SDGs. The Chakra enables self-sufficiency in food, medicinal products, and construction materials, ensuring household income, presenting a sustainable alternative that promotes poverty reduction (SDG 1), fostering food security and sovereignty (SDG 2) [34], enhancing household incomes (SDG 8) [35], playing a key role in climate change mitigation (SDG 13) [36], and biodiversity conservation (SDG 15) [37], emphasizing its contribution to access to clean water and responsible production and consumption practices (SDGs 6 and 12).
From a socioeconomic and financial perspective, the majority of small-scale farmers who cultivate 70% of the cocoa in the lowland tropical regions of Latin America, West Africa, and Indonesia earn less than $2 a day but rely on cocoa production for between 60 and 90% of their income [38,39].
The Amazonian Chakra was recognized by the Food and Agriculture Organization of the United Nations (FAO) in February 2023 as a Globally Important Agricultural Heritage System (GIAHS). Under this recognition, the “Amazonian Chakra is a productive area on family-managed farms with a focus on organic sustainability and biodiversity, valuing ancestral wisdom. These systems, rich in biodiversity and culture, benefit communities by ensuring food security, providing ecosystem services, preserving cultural values, promoting social cohesion, and conserving a highly biodiverse landscape” [6].
Fine and flavor cocoa producers using the Amazonian Chakra system have farms averaging 8.4 hectares, with 2.2 hectares devoted to the cocoa Chakra system, 5.7 hectares to forests, and 0.4 hectares to other crops. The same authors mention that, on average, families consist of 5.2 members, 59% of them have female heads of household, and the average age is 48.7 years. 88.4% of them belong to the Kichwa Amazonian ethnic group and have completed an average of 7.5 years of education [40].
On the other hand, the Amazonian Chakra system plays a vital role in ensuring the cultural identity and food security of the Kichwa Amazonian population [27,41,42]. Despite limited financial resources, households practicing the Amazonian Chakra system, according to [37], do not go hungry. These researchers found that, on average, the Amazonian Chakra system provides 2091 Kcal per person per day, considering only the crops of the system and excluding tree fruits, small-scale livestock, and hunting and fishing activities in nearby rivers and forests.
It is increasingly recognized that this system is characterized by its high agrodiversity, integrating timber trees, fruit trees, palms, staple crops (mainly yuca and plantains), and, more recently, commercial crops (mainly cocoa and coffee), as well as medicinal and spiritual plants [43,44,45,46]. Moreover, for some of these producers, their main income comes from the Amazonian Chakra, especially those with greater access and integration into the market [47,48]. For instance, for producers targeting the fine and flavor cocoa market, the average monthly income from the Chakra is $558.04 (USD), representing 31% of their total income, and only 8% have access to credit [40].
1.2. Conceptual Framework: The SAFA Approach
The sustainability assessment of food and agriculture systems (SAFA), developed by the Food and Agriculture Organization of the United Nations [22], consists of three key components. First, there are guidelines that explain the sustainability principles used in the development of SAFA. Second, a detailed list of 116 sustainability indicators is presented, covering 58 subtopics, 21 themes, and 4 sustainability dimensions. Third, there is software provided for analyzing and presenting the results, which describe the sustainability of the evaluated system through a polygon organized into 21 themes and five levels of sustainability, ranging from “unacceptable sustainability” in red to “optimal sustainability” in dark green [49].
The SAFA is a fundamental tool for understanding the sustainability of food and agricultural production systems, which is of great importance in the search for more sustainable and resilient alternatives. The combination of guidelines, indicators, and software allows for a detailed and rigorous analysis of the systems under evaluation, facilitating the identification of strengths, weaknesses, and improvement opportunities [50].
Furthermore, the SAFA framework is internationally recognized as a reference for assessing the performance of agri-food companies in terms of sustainability, with the aim of supporting the implementation of sustainable and effective management in the agri-food sector [51]. In this study, this tool will be used to comprehensively evaluate the sustainability of agricultural operations to identify improvement opportunities and promote sustainable management in the agri-food sector [52,53].
4. Discussion
A quantitative relationship was established between the sustainability indicators of the SAFA system and the economic and financial outcomes through a PLS-SEM, representing a valuable tool to quantify the relationships between sustainability indices (ER, BC, FS, and SF) and the final results in the agroforestry systems, the Amazonian Chakra [62,81,82,83]. These findings are supported by existing literature, indicating that small-scale farmers in various regions, such as the Mediterranean basin, the tropical Americas (Mexico and Ecuador) [84], and South Africa, face similar strategic challenges in their pursuit of food security, family well-being, and poverty reduction [63,82,83,85].
Regarding the main objective of this research, it is concluded that sustainability indices related to environmental resilience (Hypothesis 1) and business factors (Hypothesis 5) showed a strong negative and positive influence, respectively, on the FES of the Amazonian Chakra. Additionally, BC and FS indicators had a significant effect (99%) on FES. Hypotheses 2 and 3 were validated, although these constructs showed a weak effect.
Hypotheses 3 and 5 were positively confirmed, indicating that practices related to FS and BF have a significantly positive impact on FES in agroforestry production systems. This finding is in line with current literature, emphasizing the importance of these sustainability dimensions for enhancing economic and financial outcomes in agroforestry contexts [63,83,85,86].
The positive influence of food security suggests that strategies ensuring the availability and quality of food to meet dietary needs and food preferences, as well as promoting an active and healthy lifestyle, can significantly contribute to strengthening FES [85,87].
Similarly, business factors, by promoting responsible and ethical business practices, can generate economic benefits for agroforestry production systems [71].
In contrast, the ER and BC indicators, corresponding to Hypotheses 1 and 2 respectively, had a negative impact on the Chakra’s FES, as did SF. These findings align with the existing literature that emphasizes the interplay between economic activities and environmental quality [88,89,90,91]. These authors underscore that excessive dependence or undue pressure on the environment from these activities can have adverse consequences and harm its quality. However, BC can positively impact long-term economic sustainability in various ways [92].
Our findings reflect common tensions between economic activities and environmental health. Although these results may be surprising, they are consistent with the idea that environmental resilience does not always lead to immediate economic benefits, especially in regions where traditional environmental conservation practices may require significant short-term investments.
These results are essential for understanding the sustainability dynamics in specific agroforestry environments. The negative influence of ER and BC suggests that, in the Chakra Amazónica, a greater focus on these practices may not necessarily lead to improvements in FES. This finding underscores the need to carefully consider sustainability strategies based on the local context and environmental conditions.
Hypothesis 4, related to social factors, was not verified with a 99% level of confidence. This may be due to the diversity of social factors that can influence economic-financial sustainability, requiring a more detailed evaluation. The diversity of social factors, ranging from social capital to cultural and demographic diversity, can have significant implications for the ability of systems to remain economically sustainable [93,94].
Policy Implications for Sustainability
In the context of promoting food security and sustainable agriculture, food security has a positive impact on the financial sustainability of cocoa producers in the Chakra. Therefore, it is suggested that public policies focus on strengthening local food production and availability. This approach should include the promotion of sustainable agricultural practices and support for crop diversification, which would contribute to ensuring the food security and sovereignty of local communities [95,96].
Promoting the development of business management could incentivize companies to adopt socially responsible practices, such as fair trade and investment in local communities. To achieve this goal, more effective tax incentives or regulations could be implemented [97] that recognize and reward cooperative businesses, demonstrating a significant commitment to business factors geared toward promoting good practices within the Amazonian Chakra system and, consequently, their involvement in special markets [97].
Since environmental resilience and biodiversity conservation can have negative effects on financial sustainability in certain contexts, it is essential to strike a balance between environmental conservation and local communities’ economic well-being. This could involve reviewing environmental regulations and promoting sustainable agricultural practices in deforestation-free areas that positively encourage increased income through access to markets that recognize the quality not only of the products but also the production system.
In this regard, the importance of promoting a comprehensive management approach that addresses not only economic and financial dimensions, but also social and environmental aspects, is emphasized. This could be achieved through support for incentive-based market solutions for those who choose to engage in sustainable agricultural strategies [98,99], as well as through training programs that promote the sustainable management of natural resources and the adoption of agricultural practices that consider multiple aspects of sustainability.
5. Conclusions
Food security and business factors have a positive and significant impact on the financial and economic sustainability of cocoa producers using the Amazonian Chakra system. This underscores the importance of ensuring the availability and quality of food, as well as promoting ethical and socially responsible business practices to improve economic outcomes in this system.
The negative impact of the environmental resilience and biodiversity conversion factors on FES suggests that, in the context of the Chakra, an excessive focus on these areas may not be as effective in driving the FES of cocoa producers, risking the abandonment of this important system.
No significant evidence was found for social factors in relation to FES. This indicates that, at least in this study, social aspects do not have a clear and measurable impact on the economic outcomes of cocoa producers in the Chakra.
This study provides valuable practical guidance for farmers, agricultural organizations, and policymakers interested in improving economic sustainability in cocoa production in the Chakra. By highlighting the potential negative impacts of an excessive focus on environmental resilience and biodiversity conversion, the research offers useful warnings and guidance for balancing conservation and production goals in agroforestry systems, enriching both theoretical knowledge and practical tools available.
Furthermore, the study has demonstrated the utility of the partial least squares structural equation model (PLS-SEM) as a valuable tool for quantifying the relationships between sustainability indicators and economic-financial outcomes in traditional agroforestry systems. Overall, the results emphasize the importance of holistic management that addresses both economic-financial and social-environmental dimensions in the Chakra system.
For future research, conducting longitudinal and comparative studies is suggested to better understand the temporal and regional dynamics of economic sustainability. It is also important to explore previously unconsidered variables, develop more integrated models, and evaluate the impact of specific policies and practices. Detailed case studies and research on the influence of community participation can enhance our understanding of economic sustainability in agroforestry systems such as the Amazonian Chakra. These research directions would expand knowledge and help promote farmers’ economic sustainability.
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