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The Silence of the Lambs: Payment for Carnivore Conservation and Livestock Farming Under Strategic Behavior

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  • Anders Skonhoft

    (Norwegian University of Science and Technology)

Abstract

During the last few decades, the number of large carnivores (wolf, bear, lynx and wolverines) has increased significantly in Scandinavia. As a result of more predation of livestock, conflicts with livestock farmers have deepened. We model this conflict using sheep farming as an example, and in instances in which farmers are given compensation for the predation loss. The compensation scheme is composed of a fixed per animal loss value (ex-post), but also a compensation just for the presence of the carnivores (ex-ante). Ex-post compensation payment is practiced in many countries where farmers are affected by killed and injured livestock, but also damages to crops. Ex-ante payment implies payment for environmental services and is also widely practiced. In the first part of the paper, the stocking decision of a group of farmers is analyzed. In a next step, the Directorate for Natural Resource Management (DNRM), managing the carnivores and compensation scheme, is introduced. The strategic interaction between the sheep farmers and DNRM is modelled as a Stackelberg game with DNRM as the leader. We find that it is not beneficial for DNRM to use ex-post, but only ex-ante compensation. The solution to the game is compared to the social planner solution, and numerical illustrations indicate that the efficiency loss of the ex-ante compensation scheme to be small.

Suggested Citation

  • Anders Skonhoft, 2017. "The Silence of the Lambs: Payment for Carnivore Conservation and Livestock Farming Under Strategic Behavior," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 905-923, August.
    • Handle: RePEc:kap:enreec:v:67:y:2017:i:4:d:10.1007_s10640-016-0011-9
    DOI: 10.1007/s10640-016-0011-9
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    References listed on IDEAS

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    1. Bulte, Erwin & Rondeau, Daniel, 2007. "Compensation for wildlife damages: Habitat conversion, species preservation and local welfare," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 311-322, November.
    2. Astrid Zabel & Karen Pittel & Göran Bostedt & Stefanie Engel, 2011. "Comparing Conventional and New Policy Approaches for Carnivore Conservation: Theoretical Results and Application to Tiger Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 287-301, February.
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    5. Astrid Zabel & Göran Bostedt & Stefanie Engel, 2014. "Performance Payments for Groups: The Case of Carnivore Conservation in Northern Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 613-631, December.
    6. Zabel, Astrid & Pittel, Karen & Bostedt, Göran & Engel, Stefanie, 2011. "Comparing conventional and new policy approaches for carnivore conservation: Theoretical results and application to tiger conservation," Munich Reprints in Economics 19669, University of Munich, Department of Economics.
    7. Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
    8. Asle Gauteplass & Anders Skonhoft, 2015. "Optimal exploitation of a renewable resource with capital limitations: Nordic sheep farming with and without grazing externalities," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(1), pages 25-50.
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    Cited by:

    1. Miller, Andrew D. & Miteva, Daniela A. & Gopalakrishnan, Sathya, 2022. "Optimal policies to promote large carnivore conservation in a spatially heterogeneous landscape," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322596, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Carnivore conservation; Sheep farming; Compensation; Stackelberg game;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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