Agro-forest management policy is one of the most trending issues in Indonesia under the dynamics circumstances of regional autonomy. Regional autonomy has been recognized in the formal governance system of the Republic Indonesia through Regional Governance Law 5/1972 and Village Governance Law 5/1979. A strong political reform following deep economic crisis in 1998 has forced Indonesian President Suharto to step down, and the new government has to accommodate political reform agendas, included a broader regional autonomy, which has been implemented under a Regional Governance Law 22/1999, then replaced by Law 32/2004 and Law 23/2014. The existing Regional Governance Law has shifted almost all authorities in forest management from the regency to the province, and associated with the new established Law 11/2020 on job creation, a single license of multi-purpose forest utilization was introduced, including agroforestry, that will potentially reduce deforestation and improve the community welfare. This study evaluates key elements of local development goals, risks and barriers, as well as basic capitals for agro-forest management in Tebo Regency, Jambi Province, using an Interpretive Structural Modelling approach. Overall, this study concludes that weak coordination, low quality of human capital, inappropriate communication with stakeholders, and lack of financial resources are the greatest challenges to the implementation of agro-forest management, particularly agroforestry, as a part of social forestry schemes.