Natural insurance, conservation of forests and poverty reduction in the semi-arid region of Tigray, northern Ethiopia

Abstract

This study deals with the interaction of vulnerability to shocks, conservation intervention and poverty reduction using a survey of households living along the margins of forests in the semi-arid region of Tigray, Ethiopia. Five major conclusions that have wider policy implications are derived from this study. First, forest environmental resources provide a natural insurance for households vulnerable to idiosyncratic and covariate risks in rural Tigray, enforcing the widely held view that forests are important as economic buffer in hard times. Second, even if forests provide the food security and income they may perpetuate poverty. Third, households in rural Tigray are not driven into forest extraction for coping shocks only but also by diversification strategy, suggesting that the problem for local communities has both the characteristics of portfolio analysis and economics of insurance. Fourth, forest incomes decrease the incidence of poverty while it increases income inequality in rural Tigray. Finally, we find that the Productive Safety Net Program (PSNP) in Tigray contributes in pursuing the twin goals of poverty reduction and conservation of forests that have often been portrayed as opposing goals. One important policy implication of this study is that government, policy-makers and natural resource managers need to acknowledge the livelihood safety- net role that forests play in rural livelihoods and recognize that environmental protection policies limiting or banning access and use of forest resources can deepen rural poverty. Finally, the study underlines the importance of promotion of public safety nets such as the PSNP, and the promotion of government programmes and policies that increase the productivity of agricultural production and support diversification into off-farm livelihood and income sources to provide positive incentives for forest conservation and sustainable use