In areas where farmland borders protected areas, wildlife may be attracted to crops and cause substantial financial damage for farmers. Elephants, in particular, can destroy a year's harvest in a single night, and can also cause damage to buildings and other farm structures. Few studies have examined whether damage caused by wild elephants increases social inequalities in farmer communities. We interviewed settlement leaders and subsistence rice farmers living in the buffer zone of Bardiya National Park, Nepal, to examine (1) the variation and spatial distribution of wealth within the farmer community, (2) the severity and spatio-temporal distribution of damage inflicted by Asian elephants Elephas maximus, and (3) the willingness to insure against such damage. We investigated whether particular societal strata are disproportionally affected by negative interactions with elephants. We found that farmers near the boundary between agricultural and wilderness areas were significantly poorer and had smaller landholdings than those further into the cultivated lands. Concomitantly, damage to crops and houses was more frequent nearer the wilderness–agriculture boundary than further away from it. Hence, in the buffer zone of Bardiya National Park, farmers near the wilderness–cultivation boundary, with small landholdings, had a relatively higher cost of elephant damage, yet were less willing to pay for an insurance scheme. We infer that in areas where both social inequality and damage caused by wildlife are spatially structured, conservation success may cause economic hardship for the local community, particularly for the poorer class. We discuss causes of the current lack of communal mitigation measures against the damage caused by elephants in the Park, and potential solutions.