I understood the whole statement to mean that both the physical environment of the mountains and the conditions for living in them (for both alpacas and people)

I understood the whole statement to mean that both the physical environment of the mountains and the conditions for living in them (for both alpacas and people) are difficult. As in, "the mountains are a harsh environment and people are living in poor conditions upon them" which would suggest an even more limited set of circumstances than being just poor somewhere else or just on those mountains but not having to depend on them for everyday living.