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Tuskers, tasty crops and the forest tribes in between: managing HECs through financial incentives in human–elephant–forest ecosystems

Ram Ranjan

Journal of Environmental Economics and Policy, 2017, vol. 6, issue 1, 79-95

Abstract: Managing human–elephant conflicts can be challenging, especially when they arise as a result of an increase in elephant populations made possible through decades of conservation efforts. In addition to causing elephant mortality, the economic costs of such conflicts to the affected farming communities can be significant. In this paper, we explore the effectiveness of various financial compensation schemes provided to the affected farmers when their crops are damaged by elephant raiding. A bio-economic model involving elephant and forest stock dynamics is incorporated within an optimal crop choice model of the farming community. Results indicate that flat compensation schemes based on a certain percentage of crop damages cause perverse incentives in crop choice decisions, and yet could be beneficial to the environment. Whereas, crop-ratio-based compensation schemes targeted at reducing human–elephant conflicts through encouraging planting of crops that are less palatable to elephants may or may not be effective in conserving elephant population. Several key characteristics of the human–elephant–forest ecosystem interact to determine the efficaciousness of financial incentives, and outcomes vary across types of affected communities depending upon whether they are primarily agrarian or forestry based.

Date: 2017
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Handle: RePEc:taf:teepxx:v:6:y:2017:i:1:p:79-95