Why plans to legalise rhino-horn trade will fail

A recent study in Vietnam, sponsored by the World Wildlife Fund (WWF), reveals that demand for rhino horn may be much larger than previously thought. It shows that, in addition to consumers of rhino horn, there is a large group of "intenders" — people who intend to buy rhino horn when they can afford it.

The study shows that rhino horn is bought not just for traditional medical purposes, but also as a status symbol. Rapid growth in living standards means the number of people who could become consumers of rhino horn is potentially enormous.

These findings cast doubt on the viability of proposals, supported by the South African government, to introduce a legalised, regulated market in rhino horn. Supporters of such an approach believe a regulated market offers a better chance for the survival of the world’s remaining rhinos than a ban on all trade. They argue that a ban on trade has perverse consequences — it raises the price of horn and so increases the incentive for poachers.

By contrast, this view suggests that legal sales of stockpiled rhino horns, plus the dehorning of live rhinos to sell their horns, would drive down prices, reducing the incentive to poach.

But this will not happen if future demand is likely to exceed the supply of stockpiled and harvested horns.

The problems associated with a regulated market for rhino horn are addressed in a recent paper by Alan Collins of the University of Portsmouth and Gavin Fraser and Jen Snowball of Rhodes University. They warn that there is no sure way of forecasting demand for rhino horn in a legalised, regulated market. The current price of rhino horn exceeds the price of platinum, cocaine and heroin. This suggests that potential demand for horn is far greater than what is met through illegal poaching at present.

This is confirmed by the WWF study. Moreover, there is no way of knowing how much the stigma and fear of being caught buying illegal rhino horn affects demand. Such restraints would disappear by legalising rhino-horn trade, and demand could soar, outstripping all efforts to increase supply.

Collins, Fraser and Snowball warn also that increasing supply may be harder than is sometimes thought. They note that rhino horn grows about 6cm a year and this could potentially be harvested to increase supply under a formal dehorning programme. But increasing the breeding rate of rhinos to be dehorned is complicated by their small genetic pool and the time it will take for numbers to rise. The large areas rhinos require for habitat means protecting these rhinos being bred for their horns from poachers will be enormously costly. The price of live rhinos has been falling because game farms can no longer afford to protect their rhinos.

Funding security for rhinos in a captive breeding programme will require government and international support. It also requires that harvested horn prices remain high. But as long as the price of a rhino horn hugely exceeds the costs of poaching, a regulated market for rhino horns will not reduce the incentive to poach. Moreover, unless legal supply chains are very well policed, they will open an avenue for poached horns to be passed off as legal supply, increasing the profitability of poaching.

What can be done, then, to save rhinos from extinction? Collins, Fraser and Snowball suggest a multipronged approach. They propose that "pharmaceutical grade" rhino horn be marketed in powdered form as a preferred alternative to poached horn. Such horn must be supplied exclusively through official channels to prevent stockpiling by speculators, who hope to gain not only from an artificially induced shortage of horn, but from the extinction of rhinos altogether.

The value of poached horns, they suggest, could also be undermined relative to legal "pharmaceutical grade" horn by using indelible dyes and embedding tracking devices in horns, as well as DNA verification of legal supply. They suggest that selling fake horn in the illegal market might drive buyers seeking the real thing to the legal alternative.

Simultaneously, protection of existing rhino populations must be increased so that numbers can rise to the point at which the regulated market can be supplied with horn on a sustainable basis.

This requires severe antipoaching measures, as well as determined efforts to hamper the shipment of illegal horns. Legalised hunting of rhinos must be subject to far more rigorous controls to prevent single licences being used repeatedly to disguise the shipment of poached horns. Embassy diplomatic bags, which have been a key link in some illegal supply chains, must be routinely subject to keratin-detection tests.

There is no easy, cheap or quick solution. But news that the number of rhinos poached so far this year has already exceeded the record number of last year means action is urgently required.

A recent study in Vietnam, sponsored by the World Wildlife Fund (WWF), reveals that demand for rhino horn may be much larger than previously thought. It shows that, in addition to consumers of rhino horn, there is a large group of "intenders" — people who intend to buy rhino horn when they can afford it.

The study shows that rhino horn is bought not just for traditional medical purposes, but also as a status symbol. Rapid growth in living standards means the number of people who could become consumers of rhino horn is potentially enormous.

These findings cast doubt on the viability of proposals, supported by the South African government, to introduce a legalised, regulated market in rhino horn. Supporters of such an approach believe a regulated market offers a better chance for the survival of the world’s remaining rhinos than a ban on all trade. They argue that a ban on trade has perverse consequences — it raises the price of horn and so increases the incentive for poachers. By contrast, this view suggests that legal sales of stockpiled rhino horns, plus the dehorning of live rhinos to sell their horns, would drive down prices, reducing the incentive to poach.

But this will not happen if future demand is likely to exceed the supply of stockpiled and harvested horns.

The problems associated with a regulated market for rhino horn are addressed in a recent paper by Alan Collins of the University of Portsmouth and Gavin Fraser and Jen Snowball of Rhodes University. They warn that there is no sure way of forecasting demand for rhino horn in a legalised, regulated market. The current price of rhino horn exceeds the price of platinum, cocaine and heroin.

This suggests that potential demand for horn is far greater than what is met through illegal poaching at present. This is confirmed by the WWF study. Moreover, there is no way of knowing how much the stigma and fear of being caught buying illegal rhino horn affects demand. Such restraints would disappear by legalising rhino-horn trade, and demand could soar, outstripping all efforts to increase supply.

Collins, Fraser and Snowball warn also that increasing supply may be harder than is sometimes thought. They note that rhino horn grows about 6cm a year and this could potentially be harvested to increase supply under a formal dehorning programme. But increasing the breeding rate of rhinos to be dehorned is complicated by their small genetic pool and the time it will take for numbers to rise. The large areas rhinos require for habitat means protecting these rhinos being bred for their horns from poachers will be enormously costly. The price of live rhinos has been falling because game farms can no longer afford to protect their rhinos.

Funding security for rhinos in a captive breeding programme will require government and international support. It also requires that harvested horn prices remain high. But as long as the price of a rhino horn hugely exceeds the costs of poaching, a regulated market for rhino horns will not reduce the incentive to poach. Moreover, unless legal supply chains are very well policed, they will open an avenue for poached horns to be passed off as legal supply, increasing the profitability of poaching.

What can be done, then, to save rhinos from extinction? Collins, Fraser and Snowball suggest a multipronged approach. They propose that "pharmaceutical grade" rhino horn be marketed in powdered form as a preferred alternative to poached horn. Such horn must be supplied exclusively through official channels to prevent stockpiling by speculators, who hope to gain not only from an artificially induced shortage of horn, but from the extinction of rhinos altogether.

The value of poached horns, they suggest, could also be undermined relative to legal "pharmaceutical grade" horn by using indelible dyes and embedding tracking devices in horns, as well as DNA verification of legal supply. They suggest that selling fake horn in the illegal market might drive buyers seeking the real thing to the legal alternative.

Simultaneously, protection of existing rhino populations must be increased so that numbers can rise to the point at which the regulated market can be supplied with horn on a sustainable basis.

This requires severe antipoaching measures, as well as determined efforts to hamper the shipment of illegal horns. Legalised hunting of rhinos must be subject to far more rigorous controls to prevent single licences being used repeatedly to disguise the shipment of poached horns. Embassy diplomatic bags, which have been a key link in some illegal supply chains, must be routinely subject to keratin-detection tests.

There is no easy, cheap or quick solution. But news that the number of rhinos poached so far this year has already exceeded the record number of last year means action is urgently required.

Picture Source: http://www.rhinoconservation.org

By Gavin Keeton

Keeton is with the economics department at Rhodes University.

Article Source:  Business Day