Why is it that environmental income is so important to the household economies of the poor? Environmental income comes from a variety of sources, each with a fairly low cost of investment. This allows poor households to pursue several different income-generating activities at once, diversifying their income sources and reducing their risk if any one activity fails. Specializing in a particular commodity or trade might be the most profitable, but poor households often lack the income buffer to take the chance. For example, if a household produces only maize, and the market for maize falls, or a pest or drought damages the crop, the family would lose its entire income. Or the household may simply lack the means to invest in the equipment, land, or training needed to specialize in a single trade or business.
Diversification is the answer.A poor family may raise rice for sale and home consumption, harvest fish cultured in the rice paddies for protein, collect wild materials for construction use and fuel, pursue home crafts such as basket making or wood carving for sale to tourists, and keep cattle for milk production and as a quickly saleable asset in time of need. All these are strategies for smoothing out the family-income stream over time and over a variety of sources of risk, such as weather, illness, or market downturns (Ellis 1998:17, 18).
An ecosystem, then, acts as a natural buffer to income shocks for a poor family (Campbell et al. 2002:102). Since it often provides some income even after wage income or remittances fall, it is where the poor often turn to in times of duress. But dependence on an array of low-income naturebased activities, while safest from a survival point of view, is often not a route to substantial wealth. For accumulating wealth, nature-based activities need to tap more lucrative markets, be supported with adequate financial, social, and physical infrastructure