Environmental income—the income generated from ecosystem goods and services—is a major constituent of the household incomes of the rural poor. It includes income from natural systems such as forests, grasslands, lakes, and marine waters. It also includes agricultural income—the output of agroecosystems.

Researchers often make a distinction between agricultural income and what in this report we term “wild income”—that is, income from less manipulated natural systems like forests and fisheries. This distinction means that these two income streams are often counted and analyzed separately. Wild income deserves special attention, since it is often the element that is not accurately accounted for in most considerations of rural livelihoods. But both agricultural and wild income are important to an accurate assessment of the dependence of the poor on ecosystems for income. In addition, there is overlap between the two, as in the use of forest grasses for livestock forage, or forest leaf litter as a soil amendment or crop mulch.

Environmental income can be derived in several distinct ways. Income might accrue to households through direct use of ecosystem services, for instance, by consuming bushmeat and other wild foods, cutting fodder for livestock, using wood products in home construction, or eating produce grown in a home garden. Where markets exist, goods harvested from ecosystems, such as fish, herbs, or fuelwood, can be sold for cash or exchanged for services like school tuition. In addition, communities may charge stumpage fees for providing loggers access to timber, or they may collect taxes or levees from hunters or tourists, or royalties for access to minerals or the use of local species for pharmaceutical research. The income benefits of these public revenues may then be passed on to households in the form of public infrastructure like roads, schools, and clinics, or public services like agricultural extension programs.

Ecosystems have several characteristics that make them attractive as a source of income. Environmental resources are renewable, widespread, and they are often found in common property areas where the poor can access them without owning the land (Cavendish 2000:1980). In addition, exploiting natural systems often can be done with little need for investment or expensive equipment, making the cost of entry low—an important consideration for poor families with limited assets.