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The purpose of this paper is to investigate whether community‐based wildlife conservation can potentially be added in rural farmers’ investment portfolio to diversify and consequently reduce agricultural risk.

The correlation coefficient is computed from national data on the rates of return on agricultural production and wildlife conservation, to find out whether wildlife conservation is a feasible hedge asset.

The correlation coefficient between the returns to agricultural production and wildlife conservation for the period 1989‐1999, for which data exist for both activities, is inferior to unity indicating that rural farmers could use wildlife conservation to reduce the risk they face by engaging in agricultural production only.

Data on communal agricultural production and community‐based wildlife conservation potentially suffer from at least three limitations. First, wildlife is a unique resource that does not require the usual cash investment to acquire and as such the rates of return on wildlife conservation will likely be overstated. Second, some benefits from wildlife are public and non‐monetised; this results in depressed rates of return on wildlife conservation. Lastly, both the data on agricultural production and wildlife conservation are likely to understate physical and human capital investments; this potentially results in abnormally high rates of return.

Even though the paper makes a case for community‐based wildlife conservation at a national level, the benefits of diversification into wildlife conservation are likely to be high only in those rural areas that can sustain wildlife populations sufficient to generate adequate returns from wildlife activities such as tourism, trophy hunting, live animal sales and meat cropping.

This paper empirically investigates whether the risk that rural farmers face could potentially be managed through diversification into community‐based wildlife conservation and provides paramount evidence that wildlife conservation is a hedge asset in rural Zimbabwe. More investment in community‐based wildlife conservation would also help efforts to conserve wildlife.