Written by Don Pinnock, this is an article worth sharing.
Horn of contention
Rhino economics is a hotly contested field, but a new international research report says that those who wish to open trade in horn could be leading rhinos to destruction. By Don Pinnock.
Rhinos have horns that are useful to rhinos alone. As the art world shows, however, value has more to do with scarcity and fashion than practical use. Rhino horn is keratin, the stuff your nails are made from, and has no known curative qualities. But because tens of thousands of people, mainly in Vietnam, think it does, there’s a huge illegal demand feeding seemingly unstoppable poaching which has placed the species in grave danger of extinction.
Most of the factors driving the trade and the debate are economic. At point of sale, prices for horn between $60 000 and $70 000 are quoted. Other factors include poverty in rhino range states, insufficient budgets for protection, corruption, lax penalties and rising incomes in consumer countries.
On the supply side, mainly in Africa, are people keen to sell. Poaching syndicates do it their way. Last year alone 946 rhinos fell to their guns in South Africa alone – about 18 a week. They organise shooters, transporters, bribes, the occasional private reserve owner, vets, container agents and all manner of undercover mules.
Other people and organizations owning rhinos or connected to owners have to be more circumspect. They lobby, organise luncheons, get ‘research’ papers written and put out press reports supporting their desire to legalize trade in horns. Until now they have monopolized the debate.
But a research organization, Economists at Large, in a report prepared for the International Fund for Animal Welfare (IFAW), has delivered a shot across their bows. Entitled Horn of Contention, it questions what it calls the ‘grey literature’ of the pro-trade lobby and poses some hard questions about the contention that selling rhino horn is a way to save rhinos.
The pro-traders, according to the report’s author Rod Campbell, assume that:
legal markets will ‘hijack’ consumers from illegal markets;
increased surveillance funded by horn sales will increase poaching costs;
efforts to reduce demand will be ineffective;
syndicates will react to the legal trade by reducing sales rather than competing, and
technical advances such as DNA tracking will minimize laundering of illegal horns into the legitimate trade.
All trade in rhino horn is currently illegal under the Convention on International Trade in Endangered Species (CITES). Pro-trade advocates are lobbying for the government of South Africa to propose to end the trade ban at the next CITES general meeting in 2016.
The report finds little evidence to support their arguments. ‘Economic logic,’ it says, ‘does not suggest that a legal trade in rhino horn would necessarily reduce poaching of rhino in Africa. Under certain conditions this may occur, but there is little empirical evidence cited in these papers to suggest that these conditions are currently in place.’ There is a real risk, it adds, that trade could actually increase poaching, with devastating consequences for rhinos.
The IFAW report says the belief that prices would fall with legalization relies on the assumption that markets for wildlife products are perfectly competitive, with everyone – from the poacher to the consumer – aware of the entire market. This it patently not so. Legal sales would not cancel illegal ones, it says, and there could be parallel markets supporting a demand for ‘wild’ horn as opposed to farmed, pushing up the value of the poached product. This happened with both bear bile and tiger products.
‘It is unclear,’ says IFAW, ‘whether competition will be intense or not, implying that it is unclear whether supplies from the wild will contract or expand.’ With trade being legal, the stigma of using rhino horn could decrease, drawing more people into the market.
The report takes the main pro-trade advocates Michael ‘t Sas-Rolfes, Michael Eustace and Rowan Martin to task for being ‘considerably less rigorous in their application of economic principles’ and questions their basic assumptions. Martin’s assertion that legal trade ‘would steal customers from illegal traders or just attract new customers remains unproven.’
Eustace’s assumption of a perfect or simply efficient market, says the report, is particularly inappropriate for rhino horn as it fails to take into account externalities, market power of suppliers, corruption and imperfect information at every level of the market.
‘It is exactly because demand has been growing faster than supply that prices have been increasing, stockpiling has been reported and the current situation has emerged…Eustace ignores the likelihood that it is high prices which are driving expanded supply through illegal means and does not explain why an illegal market would not continue alongside an authorised trade, especially when it may be cheaper for traders to obtain illegal horns, rather than pay farmers.
‘t Sas-Rolfe asserts that ‘just because Western reductionist science has not (yet) established a healing effect for rhino horn does not negate the deeply held beliefs and rich ancestral experience of an Eastern culture that adopts a more systems-based approach to medicine.’ According to IFAW, this assumes that ancient beliefs are unchangeable and ignores the 50%-70% decline in the consumption of shark-fin soup in China as a result of campaigns against it.
The report adds that Eustace’s claim that ‘there would be no room for laundering illegal horn or corruption’ if horn was legal seems to be without any basis other than his belief that ‘having a profitable investment in the industry, these pharmaceutical companies would see that the Chinese government closed down the illegal operators.’
The continuation of illegal participants in Chinese industries as diverse as coal mining and software development, says IFAW, suggests that cracking down on illegal horn in China would be difficult enough, let alone in major markets such as Vietnam. The pro-traders simply assume China or Vietnam would cooperate, but have no evidence to support this.
It’s also uncertain whether poaching syndicates would respond to a legalized trade by passively accepting lower volumes, or whether they would cut into their profits per horn to try to sell more. This would be an incentive to poach more effectively. Increased protection of rhinos might also increase their numbers, but in the end, with more to poach, might reduce poaching costs.
If poaching were to continue after trade was legalized, this would massively decrease both the profits and incentive to farm rhinos. According to Martin’s own estimates, the minimum law enforcement effort needed to protect three rhinos would amount to around $20 000 per rhino.
Conservationist Ian Player saved the rhino in the past by encouraging private sales and making the creatures valuable to keep and farm. He and others like John Hume, who farms hundreds of rhinos, use this history as an argument for trading in rhino horn. But if they cannot prove trading will curb poaching, they stand to sacrifice the species for their own beliefs or profit.
‘It is far from clear,’ says the report, ‘that a legal trade would "provide a huge incentive for conversion of land to rhino farming", as Martin suggests. A legal trade would clearly benefit those who currently own significant numbers of rhino or stockpiled horn, but whether a sustainable supply, sufficiently large to reduce poaching, can be profitable, is uncertain.’
To read the report, go to www.conservationaction.co.za
2 Responses
The pro-hunting for trade lobby want to keep the waters muddied. We can turn this around with more media coverage like this!
Those of us who can expose such schemes in fact must expose them. Thank you for reading my blog and for your contribution.
W.