This paper attempts to contribute to one of the major aspects of international research agenda in agroforestry. A general framework is developed in this paper to capture the dynamic interactions of various components of agroforestry system. Using a multi-seasonal model of agroforestry, the competition among the system components in resource and input use and the trade-offs between different outputs of agroforestry system are analyzed. Policy implications for multi-disciplinary research are derived. It is argued that quantifying the potential benefits of agroforestry system requires reformulation of existing economic methods of analyzing agroforestry technology to contribute to the fuller understanding of the dynamic interactions among its various components.