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WORLD RESOURCES 2005
MISUNDERSTANDING THE WEALTH OF THE POOR
It is often difficult to assign a monetary value to the ecosystem goods and
services on which the poor rely. Some have a market value when sold, but
many are consumed locally or at home, and do not enter into the formal
economy. In effect, the poor exist in an informal, and often unrecognized,
economy. This has led to the systematic undervaluation of the assets of
the poor and the underestimation of the potential benefits of sound
ecosystem management.
Several studies have tried to delineate this “other economy” of the rural
poor. A recent World Bank analysis, for example, found that the poor
derive, on average, one-fifth of their household income from forests,
mostly from nontimber products like wild foods, fuel, fodder, and thatch
grass (Vedeld et al. 2004:27-29). Regretfully, much of the economic
value of forests to the poor is missed in official state accountings of the
forest economy.
Kenya is a typical example. By official estimate, the formal forest sector
only generates about $2 million in earnings per year for sawn timber,
pulp, and other industrial wood products. This is dwarfed by the value of
the informal forestry sector, which contributes some $94 million in value
to rural households in the form of charcoal, fuelwood, and the panoply of
other forest products. And this does not include the recreational value of
forests for leisure and tourism, which could come to $30 million or so.
Since so much of this forest value accrues to the informal sector, most of
its value is missed (Mogaka et al. 2001:17).
This undervaluation causes decision-makers to assign a lower priority
to intact forest ecosystems as an economic asset than they should. For
example, in spite of their place in rural livelihoods, woodfuels are
generally not seriously considered in rural development plans and
poverty reduction strategies, even though they provide the majority of
the energy requirements of poor families on every continent (Arnold et
al. 2003:25; IEA 2002:27).
A similar situation exists with small-scale fisheries. Despite the unquestioned
importance of coastal and inland fisheries to the poor, small-scale
fisheries are also an overlooked resource in most poverty alleviation
strategies (Béné 2003:949). Again, this reflects the fact that fisheries
income for the poor frequently escapes official notice, since fish are often
locally consumed, and often at home. A survey in four rural Cambodian
provinces found that, even though three-fourths of households engage in
fishing as a primary or secondary occupation, fully half of them never sell
any fish in the open market (Degen et al. 2000:1, 20).
If programs to alleviate poverty continue to undervalue the assets of the
poor and misunderstand the dynamics of the informal economy, they will
remain only partially effective. Better valuation and accounting of wild
income, as well as income from home-based agriculture, is part of any
sensible strategy to incorporate environmental income into poverty reduction
programs.
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Other studies confirm Cavendish’s general findings.
Research in South Africa found communities regularly using
between 18 and 27 wild products, the most valuable again being
fuelwood, construction wood, wild fruits and herbs, and fodder
(Shackleton et al. 2000a:2). Quantities consumed per household
can be substantial. Average annual usage figures of 5.3 metric
tons of fuelwood, 104 kg of edible fruits, 58 kg of wild vegetables,
and 185 large poles for house construction and fencing are
typical in rural South Africa (Shackleton and Shackleton
2004:658; Shackleton et al. 2000a:2).
Subsistence use represents the greater part of the value of
these natural products to households. Home use of wild products
brings a direct reduction in cash expenditures of households—
a form of income that is essential to the survival of the very
poor. Estimated cash equivalents for subsistence use of wild
products ranged from US$194 to US$1,114 per year over a
series of seven studies in South Africa—a significant income
fraction (Shackleton et al. 2000a:2).
But wild products can be a considerable source of cash
income. In the Indian state of Kerala, residents in the Wayanand
district sell wild foods such as honey and mushrooms, along with
coveted gooseberries and other medicinal plants, earning an
annual average of Rs. 3,500 (US$75) per household (Shylajan
and Mythili 2003:109, 112-113). Likewise, medicinal-plant
vendors in rural South Africa bring in significant cash, with a
mean annual income of 16,700 rand (US$2,680) (Botha et al.
2004). At the other end of the scale, rural charcoal makers in
Kenya sell a 30-35 kilogram bag of charcoal for a mere 280 Ksh
(US$3.50) to middle men who transport it to Nairobi for cooking
fuel (Kantai 2002:16). (See Table 2.2.)
Gauging the importance of wild income to a poor
family’s total income is difficult, of course, because the
amount of such income is highly variable across families and
across the seasons. In general, however, wild income tends to
be more an auxiliary source rather than the main income
source for most poor families. But there are many exceptions
to this rule. For example, in some alpine villages in the
Western Himalayas, wild income provides around 70 percent
of household income, mostly from grazing of sheep and goats
and the collection of medicines and herbs (Asher et al. 2002:
20). If markets—such as tourists—are handy, wild income can
be impressive. A skilled wood carver using native materials in
Namibia, for example, can earn as much as US$1,800 per year
by plying the tourist trade. In general, however, wild income
contributes more modestly to total income, providing perhaps
15-40 percent of family income, if current studies are any
guide (Shylajan and Mythili 2003:100-102; Cavendish 2000;
Beck and Nesmith 2001).
Although the value of many wild products seems small
when considered in isolation, their aggregate value can be