There is a widespread concern world over about non-sustainability of present developmental strategies and structures in both developed as well as developing world. Most debates have however, ignored the relationship between the region of high biodiversity and high poverty (see IIM Working Paper NO.938). in this paper we have not only pursued the cultural and institutional roots of this relationship but also identified practical ways in which the people preserving biodiversity can be compensated. Paper makes a strong case for changing the nature of discourse and modifying existing epistemology of environmental debate. In part one, the relationship between diversity and deprivation is analyzed. In part two, the cultural and institutional aspects are studied. In part three, examples form indigenous ecological knowledge system including nature related folk songs generating eco-ethics are reviewed. Cultural diversity and the traditions of indigenous enquiry are pursued in part four. In part five, we discuss the reasons for protests emerging from these regions and the nation state's response. In part six, I discuss the mechanism for compensating farmers for preserving diversity. In part seven, the legal, fiscal and organizational routes for paying compensation are described. Part eight lists the ethical dilemma in conducting discourse on bio-diversity. In last part, areas for follow up action by academics, planners and NGOs are illustrated.