Wildlife damage, insurance/compensation for farmers and conservation: Sri Lankan elephants as a case

The interference with agriculture has been recognised as the main cause for the current conflict between farmers and wild elephants in Sri Lanka, as elsewhere in the Asian elephant range. Thus compensating farmers for the damages caused by elephants is essential, if this endangered species is to survive in the long run. This paper explores the practicality of establishing an improved publicly funded insurance/compensation scheme to recompense farmers for the elephant damages. It does so by analysing results from two contingent valuation surveys undertaken in Sri Lanka. We find that possible public support of farmers plus urban dwellers significantly exceeds the financial requirement of the insurance scheme proposed in this study for perpetuity. The article also shows that it is often inappropriate from an economic viewpoint to analyse crop insurance as if it only involves the insurance of a private good because important positive externalities can arise from ‘crop’ damages by wildlife, e.g. elephants. The use of agricultural land by some species is essential for their long-term survival and this is often positively valued by the community as a whole.

Technological and financial approaches to risk management in agriculture: an integrated approach

In the present paper, risk-management problems where farmers manage risk both through production decisions and through the use of market-based and informal risk-management mechanisms are considered. It is shown that many of these problems share a common structure, and that a unified and informative treatment of a broad spectrum of risk-management tools is possible within a cost-minimisation framework, under minimal conditions on their objective functions. Fundamental results are derived that apply regardless of the producer's preference towards risks, using only the no-arbitrage condition that agricultural producers never forego any opportunity to lower costs without lowering returns.

Drought policy: a graphical analysis

The standard approach to modelling production under uncertainty has relied on the concept of the stochastic production function. In the present paper, it is argued that a state-contingent production model is more flexible and realistic. The model is applied to the problem of drought policy.

Analysis of long-term light-trap data for Helicoverpa spp. (Lepidoptera : Noctuidae) in Australia: the effect of climate and crop host plants

Regression analyses of a long series of light-trap catches at Narrabri, Australia, were used to describe the seasonal dynamics of Helicoverpa armigera (Hubner). The size of the second generation was significantly related to the size of the first generation, to winter rainfall, which had a positive effect, and to spring rainfall which had a negative effect. These variables accounted for up to 96% of the variation in size of the second generation from year to year. Rainfall and crop hosts were also important for the size of the third generation. The area and tonnage of many potential host crops were significantly correlated with winter rain. When winter rain was omitted from the analysis, the sizes of both the second and third generations could be expressed as a function of the size of the previous generation and of the areas planted to lucerne, sorghum and maize. Lucerne and maize always had positive coefficients and sorghum a negative one. We extended our analysis to catches of H. punctigera (Wallengren), which declines in abundance after the second generation. Winter rain had a positive effect on the sizes of the second and third generations, and rain in spring or early summer had a negative effect. Only the area grown to lucerne had a positive effect on abundance. Forecasts of pest levels from a few months to a few weeks in advance are discussed, along with the improved understanding of the seasonal dynamics of both species and the significance of crops in the management of insecticide resistance for H. armigera.

Forecasting regional crop production using SOI phases: an example for the Australian peanut industry

Using peanuts as an example, a generic methodology is presented to forward-estimate regional crop production and associated climatic risks based on phases of the Southern Oscillation Index (SOI). Yield fluctuations caused by a highly variable rainfall environment are of concern to peanut processing and marketing bodies. The industry could profitably use forecasts of likely production to adjust their operations strategically. Significant, physically based lag-relationships exist between an index of ocean/atmosphere El Nino/Southern Oscillation phenomenon and future rainfall in Australia and elsewhere. Combining knowledge of SOI phases in November and December with output from a dynamic simulation model allows the derivation of yield probability distributions based on historic rainfall data. This information is available shortly after planting a crop and at least 3-5 months prior to harvest. The study shows that in years when the November-December SOI phase is positive there is an 80% chance of exceeding average district yields. Conversely, in years when the November-December SOI phase is either negative or rapidly falling there is only a 5% chance of exceeding average district yields, but a 95% chance of below average yields. This information allows the industry to adjust strategically for the expected volume of production. The study shows that simulation models can enhance SOI signals contained in rainfall distributions by discriminating between useful and damaging rainfall events. The methodology can be applied to other industries and regions.