The Andes' diverse microclimates and agro-ecological zones make farmers vulnerable to climate variations. Dependent on agriculture, Andean communities must enhance traditional and new practices to mitigate risks. Assessing adaptation options is crucial for identifying strategies to reduce vulnerability in small-scale farming systems. Efficient resource allocation and financial capital are essential for overcoming losses and adapting to changing conditions. This study developed a linear programming optimization model to maximize resource allocation efficiency, yielding positive outcomes for most farmers, except those facing resource scarcity, who require additional off-farm activities. Low interest rates (below 15%) favored tree incorporation in optimal solutions, enhancing livelihoods. However, increasing climate risks and unstable markets led small-scale farmers to prioritize immediate needs over long-term investments like tree-based systems. Interestingly, land allocation for forestry did not increase despite heightened climate risks impacting crops and pastures. As interest rates rise, more land is dedicated to basic needs, limiting resources for capital accumulation activities like forestry. This indicates that tree integration as an adaptation strategy is often restricted to households with greater financial capital. Farmers demonstrated low sensitivity to changes in tree prices and agricultural wages, suggesting resilien
