Harvesting of Chinese caterpillar fungus, one of the most expensive biological commodities in the world,
has become an important livelihood strategy for mountain communities of Nepal. However, very little is
known about the role of Chinese caterpillar fungus in household economy. We estimated the economic
contribution of Chinese caterpillar fungus to the household income, quantified the extent of ‘‘Chinese caterpillar
fungus dependence’’ among households with different economic and social characteristics, and
assessed the role of cash income from the Chinese caterpillar fungus harvest in meeting various household
needs including education, debt payments, and food security. Results show that Chinese caterpillar
fungus income is the second largest contributor to the total household income after farm income with
21.1% contribution to the total household income and 53.3% to the total cash income. The contribution
of Chinese caterpillar fungus income to total household income decreases as the household income
increases making its contribution highest for the poorest households. There is significant correlation
between Chinese caterpillar fungus dependency and percentage of family members involved in harvesting,
number of food-sufficient months, and total income without Chinese caterpillar fungus income.
Income from Chinese caterpillar fungus is helping the poorest to educate children, purchase food, and
pay debts. However, reported decline of Chinese caterpillar fungus from its natural habitat might threaten
local livelihoods that depend on the Chinese caterpillar fungus in future. Therefore, sustainable management
of Chinese caterpillar fungus through partnership among local institutions and the state is
critical in conserving the species and the sustained flow of benefits to local communities.