Insurance may encourage coexistence between farmers and wildlife by reimbursing farmers’ losses.
China introduced an insurance scheme to mitigate human–elephant conflict in Xishuangbanna Dai
autonomous prefecture in Yunnan Province, where elephants cause damage to rubber plantations. However,
recent experience has suggested that the present insurance system exhibits poor performance
related to funding shortfalls, undervaluing of plantations and insufficient payouts, and by limiting community
involvement. To address these shortcomings we conducted attitude surveys with farmers, and
developed an actuarial (risk-based) insurance model for rubber loss that incorporated spatially-explicit
risk of depredation and net present value of rubber at damage, in order to calculate fair payouts at village
and town levels for the year 2011. Farmers were largely dissatisfied with the current insurance system,
and their level of satisfaction was associated with the compensation ratio (percentage of lost rubber
reimbursed by insurance). The illustrative results based on 2011 rubber loss data revealed high variability
in risk and therefore payouts (and further, premiums) and that fair insurance payouts would be approximately
five times the current levels. To improve compensation and support long-term program sustainability,
we considered an insurance cost-sharing mechanism that incorporated shared payments from
government, rubber farmers, and Chinese tourists. We found that multiple stakeholders were willing
to pay for elephant conservation, which could make significant contributions to insurance premiums over
the long term. Importantly, this proposed insurance model could be broadly applicable to livestock and
long-lived cash crop compensation systems.
Insurance may encourage coexistence between farmers and wildlife by reimbursing farmers’ losses.China introduced an insurance scheme to mitigate human–elephant conflict in Xishuangbanna Daiautonomous prefecture in Yunnan Province, where elephants cause damage to rubber plantations. However,recent experience has suggested that the present insurance system exhibits poor performancerelated to funding shortfalls, undervaluing of plantations and insufficient payouts, and by limiting communityinvolvement. To address these shortcomings we conducted attitude surveys with farmers, anddeveloped an actuarial (risk-based) insurance model for rubber loss that incorporated spatially-explicitrisk of depredation and net present value of rubber at damage, in order to calculate fair payouts at villageand town levels for the year 2011. Farmers were largely dissatisfied with the current insurance system,and their level of satisfaction was associated with the compensation ratio (percentage of lost rubberreimbursed by insurance). The illustrative results based on 2011 rubber loss data revealed high variabilityin risk and therefore payouts (and further, premiums) and that fair insurance payouts would be approximatelyfive times the current levels. To improve compensation and support long-term program sustainability,we considered an insurance cost-sharing mechanism that incorporated shared payments fromgovernment, rubber farmers, and Chinese tourists. We found that multiple stakeholders were willing
to pay for elephant conservation, which could make significant contributions to insurance premiums over
the long term. Importantly, this proposed insurance model could be broadly applicable to livestock and
long-lived cash crop compensation systems.
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