Non-Timber Forest Products as an Alternative to Reduce Income Uncertainty in Rural Households

Abstract

Rural households face uncertain income due to several risks associated with markets, climate and productive uncertainties. In South Ecuador, subsistence seasonal agriculture constitutes the main livelihood strategy for local farmers. Non-timber forest products, such as Caesalpinia spinosa locally known as tara, constitute an alternative to diversify income. Tara is collected from natural areas, by mostly women, during male migration periods, which coincide with the dry season. To identify farmers’ income composition, a field survey was conducted among 125 farmers, who also happen to collect tara. Prevalent agricultural options for the region included maize, beans, cattle ranching, pigs and poultry. To calculate risk-efficient combinations, we applied Markowitz’s portfolio theory, which combines options based on their income and risk performance. The results revealed that tara is only part of low-income portfolios, despite the low correlation between the markets. The exclusion in tara from high-income portfolios might be a consequence of its lower returns compared with other options such as maize and cattle ranching. Collectors need to improve efficiency during harvest and post-harvest processes to reduce loss, which is above 50%. If appropriately managed, tara could contribute to raising household income, alleviating agricultural risks and boosting gender equality.