Role of income diversification in protecting natural forests: evidence from rural households in forest margins of Sri Lanka

Income diversification among households living in forest margins helps to maintain a sustainable livelihood. Reducing forest dependency helps in-situ conservation of biodiversity thereby conserving forest resources. This paper presents evidence of income diversification and its effects on forest resource extraction by rural communities living in forest margins. Diversified income sources of typical households include crop farming, off-farm employment, animal husbandry, home gardening and extraction of non-timber forest products and fuelwood. The calculated mean indexes of diversification for the households in forest margins under investigation were 2.53, 2.57, 2.19 and 2.25. Results of the analysis show that the income diversification index had a negative and significant effect on dependency of rural households on forest resource extraction for three forest reserves. A positive relation between the index of income diversification and total income indicates an increase in household income due to increasing diversification income sources. However, given the complex nature of protecting natural forests, income diversification should be part of a broader integrated policy goal to protect natural forests.