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Investigating the potential and economic feasibility for a compensation in advance scheme

Upper Lusatia in Saxony is one of Germany’s largest pond regions, consisting of around 1000 ponds. The building of fishponds and their use for fish farming has been a tradition in the region for over 800 years, providing an essential secondary habitat for several endangered species. One of these species is the European otter Lutra lutra, boasting a population of 400-500 individuals in the region, constituting one of the largest populations in central Europe in 2003. However, the presence of otters impacted the region’s 150-180 fish farmers, particularly those operating small ponds. To mitigate negative interactions between otters and fish farmers, the state of Saxony introduced a type of damage compensation scheme in 1997 to reimburse farmers for their economic losses. In 2003, the Framework for Biodiversity Reconciliation Action Plans (FRAP) project (hereafter the “project”) was initiated with the goal of creating a framework between the conservation of large vertebrates and the use of biological resources by humans. Coordinated by the Helmholtz Centre for Environmental Research in Germany, the project involved 13 partner organisations in nine European countries. The project used fisheries and fish eating vertebrates to illustrate successful approaches for conflict reconciliation. One of the examples used was that of otters in Saxony.

This case study will focus on one activity of the project’s work, which investigated the possibility of providing compensation in advance to fish farmers, where payments are made based on estimated expected losses, rather than payments after the damage had occurred (ex-post compensation).

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