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Although income and livelihood are two separate things, the level of householdincome is often used to measure livelihoods and comprises of both a subsistence andcash aspect. While the cash component would include for example sales, wages andremittances, subsistence would include for instance the consumption of ownagricultural produce and environmental resources. A total household income can thusbe divided into five different income groups by (Ellis 2000):Agricultural income – refers to income from own-account farming, whether onowner occupied land, or on land accessed through cash and tenancy. Broadlydefined agricultural income includes livestock as well as crop income andcomprises of both consumption and cash income from the output sold.Off-farm income – refers to wage or exchange labour on other farms and alsoincludes labour payments in kind.Non-farm income – refers to non-agricultural income sources such as nonfarmrural wage employment and non-farm rural self employmentRemittance – refers to income transfers between households, withinhouseholds or from outside organisations or households in some ways.Environmental income – refers to income derived from natural resources,sinks, and processes created by nature rather than by humans. Environmentalincome will here be treated as forest income.While we will use all of the income measures to identify overall diversification wewill also use them to calculate an overall household income. However, due to REDDsforests focus, an extra emphasise on forest environmental income will be made. It haslong been argued that environmental income is relatively more important to the poor,and as such, overuse and degradation will hurt the poor more than others.Vedeld et al. (2004) distinguish between three different functions of forest income.Safety nets – Forest products are used to overcome unexpected income shortfalls orcash needs.Support of current consumption – Forest products are important to maintain thecurrent level of consumption and prevent the household from falling into (deeper)poverty. This role would largely correspond with the term “coping strategy”35