**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.

**Keywords:** risk, income, diversification, NTFPs, sustainability

### **1. Introduction**

Farming activities are often exposed to several sources of risk that are faced by households without enough information to support their management decisions. Production, marketing, financial, institutional and human risks are experienced by most farms, either independently or interrelated. Various socio-economic conditions affect people's livelihoods, such as the availability of employment opportunities, access to markets, agricultural development, the degree of linkages with urban areas and labour migration [1].

Several studies focused on the livelihood strategies in developing countries have highlighted the relevance of diversification to reduce risks [2]. Rural households diversify their livelihoods and combine various strategies to obtain food, goods and income. With increasing exposure to national and international markets, new

opportunities are emerging. People at the forest fringe combine the exploitation of natural resources with farming, off-farm employment and labour migration [1]. The contribution of forest for income diversification is underrated though. Forests provide a wide range of goods and services to local dwellers that create opportunities to address many sustainable develop goals (SDGs). Sustainable forest management might promote economic growth and productive employment in rural communities, especially the poorer ones [3]. Moreover, the broad branch of non-timber forest products (NTFPs) can create greater inclusion of women in the field of sustainable forest management, boosting women empowerment [4].

Crop diversification and the inclusion of alternative options such as NTFPs can enhance the performance of low-income farms [5–7]. Over the past few decades, NTFPs have been playing a significant role in the improvement of livelihoods of communities around the world through cash income, food security, health care, nutrition, and other social and cultural ecosystem services [5, 8]. Besides the potential for income diversification, NTFPs have an important insurance role for farmers. In many developing countries, NTFPs are considered as a safety net that fills the gaps during emergencies and shortfalls in agricultural production [5]. In case of crop damage, the households harvest NTFPs for supplementary income [6].

Since the early 1990s, the role of NTFPs for sustainable forest use and poverty alleviation has received increased attention [1, 2]. Nevertheless, the incomegenerating capacity of NTFP extraction in natural forests is restricted to factors such as product availability, density and irregular distribution of valuable species. NTFP harvesting is mostly a part-time, seasonal and subsistence-oriented activity, complementary to farming [1].

According to the IPCC [9], climate change is expected to significantly impact the provision of NTFPs, especially in mountain regions. The increase in global average temperatures and change in precipitation patterns will impact the provision of NTFPs. Scientists foresee that warmer temperatures can drive to shifts in plant species distribution and richness, and some of them alert a rise in local extinction risks due to the competitive replacement of slow-growing plant species. Moreover, climate change is expected to increase exposure to other risks such as more frequent and severe forest fires, storms, landslides and floods [10]. Faced with this situation, it is necessary to implement long-term adaptation practices that guarantee the availability of NTFP and provide local communities with suitable livelihoods [11].

NTFPs have the potential to improve the livelihood of rural dwellers in tropical countries. In Ecuador, the market for NTFPs is rarely considered a profitable option because the accountability of harvesting and trade is deficient. *Caesalpinia spinosa* (Molina) Kuntze, locally known as tara, is a native species in the Andes [12]. Tara has been traditionally appreciated due to its multiple uses as firewood, construction material and fog catcher [13]. More recently, it has become a valuable NTFP alternative attributable to its high commercial value on growing international markets. Its pods and seeds are used for medicine, food and industry sectors based on their antimicrobial and antioxidant capacity [14–16]. The pods are used in the leather industry and for the manufacture of dyes because of their high content of high-quality tannins. In addition, the seeds are rich in a hydrocolloid called tara gum highly appreciated for the manufacture of food thickeners, cosmetics, varnishes, paints, etc. [17, 18].

In southern Ecuador, tara is distributed in wild populations along with dry tropical mountain forests, which is one of the most threatened forests in the world [18, 19]. This area is also affected by poverty, around 29% of the population is regarded as poor according to the National Institute of Statistics [20]. In this region, tara is mainly

#### *Non-Timber Forest Products as an Alternative to Reduce Income Uncertainty in Rural… DOI: http://dx.doi.org/10.5772/intechopen.102970*

collected by local women [21]. Females are more likely to be engaged in NTFP collection [8]. Thus, policymaking and land-use planning must consider that NTFPs are part of the overall livelihood strategy of the people involved [6].

In order to understand the livelihood strategies of poor households in dry forest areas and their interactions with NTFP, as a source of supplementary income, this research was conducted in southern Ecuador. Throughout this study, we aimed to determine the current composition of farmers' income. We also analysed the share of the tara on overall farmers' income and the harvesting strategies. Finally, we assessed the risk related to the main farmer's activities in the region and how NTFPs can be incorporated as part of diversification strategies to cope with farming risks.
