A theoretical model of community operated compensation scheme for crop damage by wild herbivores

Damage to agricultural crops by protected species in the vicinity of wildlife parks is an important but underestimated problem. Since measures to protect crops are generally met with limited success in areas with high animal density, some form of compensation for the damage is necessary to avoid resentment of local farmers. The general method of compensation followed globally is that the victim makes a claim, which is verified or negotiated by the compensating agency and the agreed amount is paid. The major flaw in this method is that objective and realistic assessment of damage is difficult. Subjectivity in visual assessment leads to conflicts and both under and over-compensation is counterproductive in the long run. We suggest here an alternative model of compensation, which is based on the net loss in produce, rather than visual estimate of damage. In this model the average loss in net produce is estimated over a belt with comparable risk of damage. The compensation payable is calculated based on the average loss but is paid in proportion to individual farm’s produce. Analysis based on principles of behavioral economics shows that this compensation scheme would facilitate good agricultural inputs and honesty in reporting the produce. It would also effectively segregate wildlife damage from other forms of agricultural loss. The theoretical foundation of the alternative model of compensation and suggestive means of implementing it are discussed.