The sculpture was one of the highlights of the festival held in Pattingham, close to the Shropshire border with South Staffordshire.
But it was set alight at around 9.40pm last night – and all that remains today is a large scorched patch in the field off Clive Road where it was displayed.
Mike Coop, one of the organisers, said: "This was a celebration to bring together the community.
"But then someone knocks the good will on the head by doing this. There were people out looking at the scarecrow at 8pm last night, with their lanterns and torches. "There were some children in the village who were going to head down today and look at it as they hadn't seen it over the weekend."
Mr Coop said he got a call from a farm worker this morning telling him somebody had set the sculpture on fire.
"It's a terrible shame, but I don't want this incident to ruin the good will that has been shared among the community this weekend."
See our picture gallery from the scarecrow festival here