Designing a community-based insurance scheme to reduce human–wildlife conflict

Roshan Sherchan (), Rajesh Kumar Rai (), Roshani Rai () and Arun Dhakal ()
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Roshan Sherchan: Green Governance Nepal
Rajesh Kumar Rai: Tribhuvan University
Roshani Rai: Green Governance Nepal
Arun Dhakal: Nepal Agro-Forestry Foundation

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2022, vol. 24, issue 4, No 28, 5112-5130

Abstract: Abstract Globally, human–wildlife conflict (HWC) is a burning issue, which the conservationists have attempted to address through various conservation strategies. One of the widely adopted strategies is the provision of compensation for the loss caused by wildlife. The existing mechanism of compensation in Nepal is time-consuming and insufficient. This study, therefore, attempts to assess the feasibility of a community-based insurance scheme (CBIS), which is expected to be time-efficient with no additional burden to farmers. The CBIS scheme is an insurance mechanism to be operated by a locally elected committee and provides compensation to the premium paying farmers only. The study was carried out in the Jhapa District of Nepal, one of the most affected districts by wild elephants. We conducted a household survey using a questionnaire for 509 respondents from the five most affected villages. We chose a choice experiment to determine the preferences of respondents for CBIS. Four activities including compensation for crop damage, and human casualties (serious injuries and death), and fence management were selected under the CBIS. The regression analysis revealed that only the compensation for crop damage was statistically significant. The estimated annual crop damage caused by elephants was worth USD 1.49 million. The estimated premium exceeded the expected insurance payout, indicating the suitability of the scheme. The estimated premium was USD 0.38 per hectare for a 1% increase in damage payout. The total annual premium would be USD 0.136 million for a 25% payment of the damage, while the expected annual insurance payout would be USD 77,788. The annual premium can be lower if the government allocates the budget for the CBIS, out of the existing relief distribution program. The engagement of local municipalities in the CBIS management can make the scheme more viable.

Keywords: Choice experiment; Crop insurance; Crop damage; Human casualties; Wild elephants (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10668-021-01652-1

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