Environmental Income by Ecosystem

By looking directly at individual ecosystems and the value that they provide to the poor, their importance to livelihoods becomes more obvious.

Agroecosystems

The most important source of environmental income in the world is agriculture—the goods derived from agroecosystems. Agroecosystems differ from other types of ecosystems because of the high degree to which they have been modified by people. Large-scale agriculture, driven by expensive inputs and technology— fertilizer, pesticides, irrigation, tractors, and harvesters—is responsible for much of world food production and agricultural exports. But small-scale agriculture—the farming that the poor pursue—is the silent giant that supports the great majority of the rural residents in poor nations.

This kind of farming looks much different than large-scale farming. While most farms in developed countries are owned by corporations and dominated by physical rather than human capital, in the developing world farms are still largely familyowned and operated. Small-scale farming remains laborintensive and often lacks access to irrigation, fertilizer, or other inputs that raise productivity. The producer and consumer is frequently the same household. Despite the successes of the Green Revolution, this characterization still describes the majority of the agriculture practiced in the world today (FAO 2000b).

Smallholder farmers—those who own less than 5 hectares of land—cultivate lands in several ways: home gardens and small orchards that largely produce subsistence goods for home consumption; cultivation of commodity crops such as cotton or maize; and grazing of family-owned livestock. This can occur on very small parcels—sometimes on quite marginal land—and is often intermixed with other land uses like forestry. The goods which these small-scale “farms” produce can also be sold in local markets, sold to collectives that combine goods for resale, or even exported to other countries. Each of these modes of production plays a role in the household economy of the poor. Perhaps the most common and important benefit of these farms is that, combined with livestock, they meet a large portion of the nutritional requirements of many poor households.

Malawi, where small-scale farmers account for 70 percent of all farm production, provides a window onto the importance of such farming. Nearly eight of ten Malawians farm their own land—most cultivating less than a hectare (Fisher 2004:136). Maize is the staple crop, with cassava, sorghum, groundnuts, and beans also important. Nearly half of all households own chickens, and one-fifth own goats. Together these agricultural assets provide more than half of household income. Income from forests contributes another 30 percent. Only 10 percent of Malawi’s population is engaged in wage employment, highlighting how critical environmental income—and particularly farm income—is to survival (Dorward 2002:9-24).

Understanding the role of small-scale agriculture in poor households requires an appreciation of the interplay between selling crops for cash and consuming them at home.

A study of home gardens in the Bushbuckridge district in South Africa exemplifies this interplay and the substantial contribution that home gardens often have in the livelihoods of the poor. In this district, households grow an average of four to five plant species on their residential plots. Households consume nearly three-quarters of the plants that they grow and sell the rest. The total cash value of all plants sold and consumed at home per year was US$266 per household— a sizable contribution to income in an area with few employment opportunities (High and Shackleton 2000: 148, 154). (See Table 2.3.)

Forests

After agriculture, forests are probably the greatest generators of environmental income for the poor. Rural communities are frequently found in or near forest areas, which vary widely in density and composition, from closed canopy rainforests to alpine coniferous forests to woody savannas. The productivity and variety of forest ecosystems, as well as their habitat value for game species, make them important contributors to the local subsistence and commercial economies.
(See Box 2.2.)

Substantial research corroborates the importance of forests to the world’s poor. In 2004 the World Bank completed a review of studies on the income that forests provide to those who live in or near them. The review examined cases from 17 countries on three continents, focusing especially on Africa. The results were striking: environmental income from forests was found to be important at every income level and on every continent, providing an average of 22 percent of total income—the equivalent of $678 per year (adjusted for purchasing power parity (PPP) worldwide)—in the households examined (Vedeld et al. 2004:28-29). (See Table 2.4.)

As many other studies have concluded, the Bank found that the most significant income from forests came from wild foods, fuel, fodder, and thatch grass. Timber and medicines were also found to be important to total income. Unfortunately, much of the economic value of forests to the poor is missed in the official state accounting of the forest economy (Mogaka et al. 2001:4).

Woodfuels

The poor rely overwhelmingly on woodfuels as their household energy source. In developing nations alone, some 2.4 billion people—more than a third of the world population—rely on wood or other biomass fuels for cooking and heating (IEA 2002:26). For example, nearly all rural households in Kenya, Tanzania, Mozambique, and Zambia use wood for cooking, and over 90 percent of urban households in these countries use charcoal imported from the countryside (IEA 2002:26). In India, 62 percent of rural households depend on woodfuels (Vadivelu 2004:5).

Wood used as fuel is fundamentally important in the household economies of the rural poor. It is not only a source of energy in the home, but a supplemental source of cash income through the collection, processing, and sale of firewood and charcoal. Charcoal in particular, due to its high energy content and easy portability, is an important income-producer and a sole source of employment for many. In Kenya alone, the charcoal economy is estimated at about 23 billion Kenyan shillings per year—on a par with tourism as an income generator (Kantai 2002:16).

Non-Timber Forest Products

The poor have traditionally not been able to capture much of the income generated from the harvest and sale of timber.

Because of its high value, more powerful interests—in private commerce and in the state bureaucracy—have generally dominated this resource. For the poor to reap greater benefits from timber production, forest ownership and governance regimes would have to change substantially.

But forests produce many other goods and services—collectively known as “nontimber forest products (NTFPs)—that are critical income sources for the poor. Typical NTFPs include various foods, fodder, fuel, medicines, and many other collectibles—literally every product derived from a forest besides timber (Wickens 1991:4). (See Table 2.5.) The variety can be staggering. Forest dwellers in the Brazilian Amazon, for example, regularly sell some 220 NTFPs at Belem’s daily open market— 140 of which are wild products, and the rest cultivated in the forest (Shanley et al. 2002, in Molnar et al. 2004:35). If harvested correctly, NTFPs can make not only a substantial, but a sustainable, contribution towards livelihoods. In addition to their market value, many NTFPs have social, cultural, or religious significance as well.

The use of NTFPs is quite varied, and it is well documented that they provide a wide range of subsistence and cash income to a large number of households in many nations (Neumann and Hirsch 2000:53-55). On Mexico’s Yucatan peninsula, for example, the market value of palm thatch used or sold as roofing material is estimated at US$137 million per year (Bye 1993, in Molnar et al. 2004:35). In India, NTFP production contributes about 40 percent of total official forest revenues and 55 percent of forest-based employment. (Tewari and Campbell 1996:26). In Botswana, the government recently admitted the value of NTFPs exceeds that of timber (Taylor 1996:76-77).

As impressive as these national-scale estimates are, they tend to understate the importance of NTFPs to households. Since the values of NTFPs are generally difficult to calculate, they are often underestimated (Lampietti and Dixon:1995:1-2). This undervaluation causes decision-makers to assign a lower priority to intact forest ecosystems as an economic asset than they should.

Fisheries and Reefs

For those living near the coast, or near inland water bodies, fisheries are nearly always an important aspect of household income. Like forests, fisheries are generally accessible, in some form, by people of all income levels, making them a last refuge for many poor households. An estimated 250 million people in developing countries are directly dependent on small-scale fisheries for food and income. In Thailand, for example, 90 percent of the nation’s fishers are still small-scale operators (World Bank 2004:17).

The small-scale fishing that the poor do differs markedly from the industrial fishing of factory trawlers and long-line fishers. Small-scale fishing is usually a low-capital operation with owner-operated vessels, such as those using cast nets and small traps. Many times it is carried out from small non-mechanized canoes or rafts, or from small motorized boats and dinghies crewed by one or a few people. But sometimes it is done from the shore without even the use of a boat. In Indonesia, for example, half of the nation’s 2 million ocean fishers use unmotorized canoes; another 25 percent use small boats with outboard engines; 80 percent live below the national poverty line (FAO 2000a:2-3).

Marine fisheries often contribute enormously to the livelihoods of the coastal poor. In coastal communities studied in Mozambique, fishing contributes 34-38 percent of cash income, with additional environmental income coming from the sale of mollusks, seaweed, and sea cucumbers (Wilson et al. 2003:96). Likewise, families in coastal Tanzania supplement subsistence agriculture and forestry with fishing, seaweed and shrimp farming, and salt production (Bayer 2003:1). Households living in coastal villages along Korangi Creek in Pakistan rely on mangroves as their primary source of woodfuel and animal fodder, and rely on the mangrove fisheries for both wage labor and food (Khalil 1999:9-10). For families too poor to own boats in Indiranagar, India, labor on the fishing boats of others provides a crucial source of income (Rengasamy et al. 2003:128).

Inland fisheries—in lakes, rivers, streams, rice paddies, and fish ponds—are just as important a resource for the poor as marine fisheries. In the Lower Mekong River basin, for example, a recent study found that 40 million rural farmers—many of them poor—engage in seasonal fishing activities. In Laos, where the incidence of rural poverty is quite high, 70 percent of all farm households augment their family food supplies and incomes with fish (Sverdrup-Jensen 2002:8).

These statistics make it clear that fisheries are a key—and often overlooked—aspect of food security for the poor. In East Asia and in Africa, fish provide more than 50 percent of the animal protein intake in the diet of 400 million people (World Bank 2004:18). In Liberia, Ghana, and Cambodia, fish and fish products constitute 65 to 70 percent of animal protein consumed (FAO and UK DFID 2002:20, 21; UK DFID 2000:18).

In areas of the world that support coral reefs, these systems also provide a crucial portion of people’s livelihood. (See Table 2.6.) Reefs provide fish for daily consumption, shells and corals for use in house construction and for sale to tourists, and a variety of marine species for medicinal purposes (Rengasamy et al. 2003:130-133). Rural households in the Fiji Islands—a third of which are poor—routinely subsist on fish and shellfish such as kaikoso clams they catch themselves on local beaches, reefs, and other inshore waters, and sell the remainder for cash. (See Chapter 5 for a complete case study of Fiji’s fisheries.) In the Caribbean and parts of South East Asia, coral reefs play an important role in a growing ecotourism market, bringing money and jobs into these regions. The combined benefits of dive tourism, fisheries, and shoreline protection provided by reefs bring an estimated net value of US$3.1-3.6 billion to the Caribbean region every year (Burke and Maidens 2004:58).

Many fisheries—particularly marine fisheries—are dominated by large-scale fishing operations, and conflicts between local small-scale fishers and commercial operations are common. Often, poor communities operate at the margins, fishing what large-scale operators leave behind (Kura et al. 2004:87-88). In Chad’s Chari delta and along the western shore of Lake Chad (Nigeria), a comparative analysis found that the poor have access only to marginalized fishing grounds, while the more well-to-do have access to all water bodies (Béné 2003:960). Even where the poor do have access, they often lose out to richer fishers when competing directly, due to inferior equipment.