On February 8, 2017, Environmental Affairs Minister Edna Molewa gazetted draft regulations that would permit domestic trade in, and limited export of, rhino horn. The outcry was predictable. A representative article is Melanie Verwoerd’s piece: “The big problem with legalising rhino horn sales”.
Although she points out a few issues that are typical of badly drafted law (and can easily be remedied), most of her arguments are stock anti-trade positions. “The only way to curb rhino poaching … is a sustained campaign to ban all sales and consumption of rhino horn,” she writes. And: “The only people that will benefit from this sale of rhino horn are the rhino farmers, the speculators/traders and possibly officials and politicians who might get illegal kickbacks. The one stakeholder that won’t is the rhinos.”
The big problem with her view that “the sale of … horn … will put [rhinos] right back into more danger than ever before” is that there is no evidence for it, and much evidence that the trade prohibition put rhinos in danger.
Verwoerd cites increased elephant poaching after South Africa’s one-off sale of ivory stockpiles in 2008, but even if a causal link could be made between such auctions and poaching, the sale of government stockpiles to selected buyers cannot be expected to have the same effects as ongoing private trade. With a one-time auction, the price mechanism does not work effectively, and the market does not have time to respond to either supply or demand or reach any sort of equilibrium.
About the Convention on the International Trade in Endangered Species (CITES), which in 1977 established a ban on international rhino horn trade, Verwoerd says “it is worthwhile noting that South Africa will go against the wishes of 100 other countries who voted last year against the sale of rhino horn”.
Yes, so they did. But many of those countries are heavily influenced by animal rights groups and the political realities in their home countries. More important, most of those countries have no rhino themselves. Caring about animals is easy when you don’t actually have to look after them. For other CITES members, the rhino horn question is one of political opportunism. For South Africa, which is home to the vast majority of the world’s rhinos, it is a very practical matter, with very real costs – which the government estimates at up to R2-billion per year.
The reason South Africa has an abundance of rhinos is that it allowed private ownership of game, and legal trade in trophies and other game products. This principle is known as “sustainable use”, and it is a core pillar of the World Conservation Strategy, upon which the work of the International Union for the Conservation of Nature (IUCN) and CITES are supposed to be based.
South Africa’s enlightened wildlife conservation practices, based not on prohibition and enforcement, but on the principle of private ownership and sustainable use, has largely been successful. According to TRAFFIC, the wildlife trade monitoring network: “With such an enabling environment, it is not surprising that, since the 1960s, there has been a marked shift to wildlife-based land-use amongst private landowners, and today game ranches in South Africa cover an area nearly three times the collective size of all national and provincial protected areas on state land. Wildlife in general, but rhinos in particular, have benefited tremendously from these visionary natural resource policies.”
While many once-threatened game species have recovered and thrived under private ownership, this success is not mirrored in species in which trade is prohibited. In the case of rhino, measures imposed to curb trophy hunting for the purpose of horn export ultimately led to a moratorium on domestic rhino horn trade, instituted in 2009. It was followed by a sharp rise in poaching, against which only military-style enforcement has made any dent in the last year or so.
Prohibition has rarely, if ever, worked to curb markets in “undesirable” products. All it does is raise prices and force trade onto the black market and into the hands of criminal syndicates. Don Pinnock, a criminologist who spoke on Cape Town’s gangs at the Knysna Literary Festival this past weekend, made an eloquent argument for the decriminalisation of drugs, saying that the War on Drugs has failed, it clogs up police work, courts and prisons, and causes more social ills than the drugs themselves. As I have done, he cites Portugal as an exemplary case in which decriminalisation has reduced demand for drugs, as well as associated crime.
When I asked him afterwards why he didn’t feel the same way about prohibition on the trade in rhino horn, he said that the situation was different, because suppliers could never satisfy all the demand for horn.
This is a mistaken view, however. In a free market, the price mechanism serves to signal cost and scarcity to consumers, and signal demand to producers. Each therefore has a direct incentive to adjust their production or consumption according to market conditions.
There is no reason why the market for rhino horn should be any different from other products. Artificial scarcity, which results from a trade ban, only serves to make the black market trade more profitable, according to environmental economist Michael t’Sas-Rolfes, because demand is relatively insensitive to price.
In a detailed market analysis, which is worth reading in its entirety if you want to understand the rhino poaching crisis, he notes that the price of rhino horn rose sharply after CITES instituted its ban on international trade in 1977, but it had no discernible positive effect on poaching.
“The fact that poaching levels started to rise dramatically after the imposition of restrictions on domestic trade and Vietnamese hunts suggests that the South African suppliers were not only not ‘fuelling demand’ but had probably been acting as a buffer against potential poaching activity,” he wrote. “By providing horn from non-lethal sources as well as technically legal income-generating hunts, they were playing a dual role of meeting market demand while continuing to generate financial returns that would ultimately continue to provide economic support for the local wildlife industry. Were it not for the role of the South African private sector, poaching activity in other private reserves and state parks such as Kruger may well have started far sooner than it did.”
Production is dependent on private ranchers who breed and protect herds for commercial purposes. When consumers have a legal avenue to procure the products they want, there is less motive to incur the significant risks of poaching. This is why poaching in legally traded wildlife and farm animals is not an existential problem for the species in question, nor is it prohibitively expensive to combat.
The simple fact is that prohibition has failed, just as it has with alcohol and drugs. Trade bans have inflated prices and eliminated market competition, making poaching a highly profitable business for criminal syndicates. Prohibition sets aside the private property rights of game ranchers, and removes the incentive to conserve species. Game farmers are getting rid of their rhinos, instead of increasing their herds. Bans also ignore the interests of local communities living near rhino populations. It relies on expensive enforcement programmes by heavily-armed security forces, but amid persistently high unemployment, they fight against an inexhaustible supply of would-be poachers.
We know from experience that trade bans do not work to curb poaching. We also have evidence, from CITES itself, that legal ranching and well-managed trade can work, as it did for crocodiles and vicuña. The big problem with opposing legal trade in rhino horn, as Verwoerd does, is that it is high time to try policies that might actually work. DM