Welfare effects of forest management participation among smallholder farmers in Nigeria

Sustaining forest ecosystems while improving welfare outcomes has become a critical policy priority. However, empirical evidence on how forest conservation translates into improved livelihoods remains limited, particularly in developing countries. Using data from 634 smallholder farmers in Cross River State, Nigeria, within the rainforest region, this study applies an Endogenous Switching Regression (ESR) model to examine the welfare implications of participation in forest management. Welfare is assessed using per capita expenditure and the severity of food insecurity, measured by the Rasch-based Food Insecurity Experience Scale (FIES). The results indicate that participation in forest management significantly reduces the severity of food insecurity while lowering per capita monetary expenditure. This pattern suggests substitution between market purchases and forest-derived consumption goods, as households obtain fuelwood, non-timber forest products, and other subsistence resources directly from forests. As a result, households rely less on market purchases while maintaining or improving access to food. The findings show a short-term trade-off between monetary and non-monetary dimensions of welfare. While measured cash expenditure declines, improved access to subsistence resources enhances food security and supports greater livelihood resilience, reflecting a shift from cash-based consumption toward greater reliance on subsistence resources.