Mitigating the “Moral Hazard” of Government Intervention via Wolf/Livestock “Control” & Compensation Programs
Earlier, I wrote about the special treatment ranchers get via private and public compensation programs, and how these government interventions into private property management issues creates what economists call a “moral hazard”, obscuring free-market incentives that would otherwise encourage behaviors that prevent wolf depredations from occuring in the first place.
Question: Why would a livestock producer go to the extra effort of pursuing predator-friendly grazing techniques when it’s cheaper to forgo the bother ? That’s what compensation does, it makes it cheaper to forgo the bother.
Compensation is a wonderful response to the livestock industry’s only rational, interest-based qualm. It eliminates financial loss. But is it about time to start asking how well this good-faith response is being received in Idaho ? Wyoming ? New Mexico ?
How does it motivate the behaviors that are necessary to practically co-exist with wolves ?
It doesn’t. In fact, just the opposite. The same would be true for any pest control program. If I was a rose-farmer and a government agency promised to intervene … say, pay for and spray my entire property for aphids should a problem arise, I might be apt to sacrifice a rose-bush or two on the periphery rather than employ any prophylactic myself. It is no different for publicly financed wolf extermination programs executed by Wildlife Services. Many ranchers are more than happy to let go an initial lame calf or two if it means an end to the local wolf pack.
That difference plays out in very tangible ways with respect to policy. For example, in Minnesota regulatory conditions compliment government interventions into livestock/wolf management that are crafted to compel reponsible behavior, rather than dispel it.
Farmers are required to implement non-lethal and animal husbandry practices to prevent future attacks before any wolves are killed or farmers are eligible for compensation for wolf depredation. Read the rest of this entry »