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Livestock predation by large carnivores prompted the Bhutanese government to initiate a scheme (the ‘Tiger ConservationFund’) to compensate agro-pastoralists losing livestock to attack by tigers (Panthera tigris), leopards (P. pardus), snow leopards (P. uncia) and Himalayan black bears (Ursus thibetanus) over a three-year period (2003–2005). In this paper we report on the economic impact of predation to farmers during that period, and how losses were compensated. US$ 138,454 in compensation was paid to 1233 farmers for 1692 livestock kills. On average, compensation covered 35.5% of the market value of predated livestock. Compensated farmers lost on average 1.3 head of livestock in the year they received compensation, a loss equivalent to

39% of annual average household income. Losses were highly skewed; some farmers lost the equivalent of many years of income, and some remote northern regions of the country were heavily impacted. A majority of the compensation (63%) was paid for leopard attacks, so a strategy to reduce livestock losses throughout Bhutan should focus on leopards as the principal livestock predator. Compensation schemes are an important mechanism for large carnivore conservation in the Himalayas, and we advocate for a scheme in Bhutan that is long-lasting and sustainable.

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