The story of the vicuña and its golden fleece is instructive. A small relative of the llama and alpaca, the vicuña is the national animal of Peru. It is prized for the soft, warm wool its fine coat produces and thrived for centuries in the Andean highlands under the protection of Inca royalty.
Then the Spanish Argonauts arrived in South America and ruined everything. The vicuña was hunted to the brink of extinction by the usual means – unrestrained plunder of the commons by poachers with nothing to gain from conservation and everything to gain from high global demand.
With the advent of the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) in 1974, the vicuña, its population reduced to a mere 6,000, was duly declared protected. Trade in its products was banned.
Although it is one of only a handful of species that CITES claims as success stories, the truth is that the ban on trade did little to protect it. On the contrary, its survival is owed to a commercial campaign to shear vicuña instead of poaching them, and on the privatisation of ownership of the animals. The trigger for the recovery of the population numbers was the exact opposite of the CITES ban; in 1994 it was lifted, giving local communities and commercial farmers an economic stake in the conservation of the species.
Today, the animal is out of danger and its population stands at a healthy 350,000.
This story is not new. It has been part of the literature on endangered species for years. Last year, Tanya Jacobson, a tireless campaigner for legalising rhino horn trade as a means of curbing poaching, drew a parallel with rhino conservation. A similar treatment of rhinos, documenting the role of private property and the legal commercial exploitation of the animals in pulling the white rhino population in South Africa back from the brink of extinction, dates back to at least 1990. The author of that paper, conservation economist Michael ‘t Sas-Rolfes, continues his excellent work on the economics of poaching and extinction to this day.
Now, after years of lobbying (including by your own correspondent from the world of free markets and individual liberty) the South African government has explicitly committed to make a formal request to CITES to permit international trade in rhino products.
The process to reverse the ban could take many years. The soonest a proposal can be discussed and approved is the next three-yearly conference of the parties (COP17), scheduled for 2016 in South Africa, but given its controversial nature it may well be delayed by many more years. By then the ever-rising poaching tally may have caused the population to collapse irretrievably and the handful of private rhino owners may have given up their struggle against poachers. Even the biggest of them all, John Hume, has been hit by poachers for the first time this year. The Mail & Guardian produced a touching video of the affair, entitled After the Killing.
In the mean time, the government is reportedly considering the very expensive project of dehorning all rhinos, holding auctions of existing stockpiles and establishing an exchange-traded trust to control the market.
Therein lie curious dangers.
Skeptics of free trade will witness these auctions and may observe that they do little to stem the poaching tide. The reason for this is that a market consists not only of static supply and demand. These factors vary over time. A once-off sale may put a temporary dent in the price, but even that is questionable, given the unfulfilled demand that the trade ban has created. And even if it does the decline in price may not be permanent, and because there is no ongoing supply syndicates will likely soon revert to poaching.
Likewise, a single, highly-regulated trust to trade rhino horn, perhaps along the lines of the De Beers Diamond Trading Company, will merely establish a protected cartel motivated to keep prices high by restricting supply and thereby unwittingly encouraging continued demand for cheaper poached horn.
If once-off auctions and highly regulated trade are not effective in stemming the poaching tide consider that it may be the limited nature of trade, rather than trade itself, that is failing.
Among the many possible regulations that could be imposed would be to permit trade only in certified, dehorned rhinos. However, the technical hurdles to police such a market are high. They require DNA profiling, microchip marking and various other expensive interventions merely to establish proof of origin. Going further, to limit trade only to horns from animals that died a natural death would remove dehorning as an anti-poaching measure, and in any case complicates the tracing of a horn’s legality even further.
One of the stock arguments of anti-trade environmentalists is that if governments cannot combat trade in rhino products when it is entirely illegal, they cannot possibly hope to control a more sophisticated market in which some trade is permitted, while products derived from poaching remain illegal.
This may seem superficially true, and one should never underestimate the incompetence of a new bureaucracy established with good intentions but with limited resources and myriad sophisticated rules to enforce against experienced smugglers and black marketeers.
However, holding this up as a reason not to legalise trade is nonsensical. By the same token, is the failure of governments to combat the trade in stolen motor vehicles a reason to prohibit car sales altogether? Would the failure to stamp out smuggling in tobacco or alcohol to evade high sin taxes be a justification for banning cigarettes or booze? Does the persistence of cattle rustling and sheep poaching suggest that a ban on trade would help or a more onerous regulatory bureaucracy is indicated?
The failure of prohibitions to prevent the trade in illegal substances, goods and services might equally well be upheld as a reason not to ban things at all, as I argued in my New Year’s column last year.
If elaborate restrictions on the trade in rhino horn prove too difficult or expensive a burden on the state, the rational solution is not to maintain the prohibition but to permit trade anyway, with a lighter regulatory touch. Even if a black market continues to exist eliminating the legal market would only encourage it, which would be counter-productive.
Rhino products are no different from any other. Owners that are legally permitted to attach a fair value their rhino herds will have both the incentive and the means to combat poaching, in cooperation with wildlife experts, police, insurance companies and security professionals. In the absence of an expensive and sophisticated tracking bureaucracy, owners ultimately have the responsibility to limit their own poaching losses to commercially acceptable levels.
Legal trade in rhino products will finally restore to the animals their true conservation value, which in combination with private property protection can spark the revival of the species, just as the vicuña was rescued from extinction by the simple expedient of farming them for their golden fleece.
As the government wisely pursues avenues towards a legalisation of rhino horn trade, let’s hope that it doesn’t stop at half-measures and succumb to merely testing the waters with once-off auctions or over-burdening the market with well-intended, but onerous, regulations. Putting a toe in the water makes it seem colder than it really is and fearful anti-trade lobbyists will waste no time pointing this out. However, that doesn’t mean we ought to be afraid to jump in.
The easier it is for buyers to obtain legal rhino horn, the more incentive rhino farmers have to produce it, and the more likely it will be that crime syndicates will stop exploiting it for its smuggling value. That means establishing a truly free and unencumbered market.
The fear of extinction is strong, but ironically, excessive caution can sink the project to save the rhino. DM