Dear Mr Hume, let’s talk about trade in rhino horn – by Alisha Kirk
My thoughts here, written in my own capacity, are neither intended criticism nor an inference of ill-intent. Your achievements confirm your commitment.
For clarity, I have no association with commercial wildlife farming/ranching. I’m not a veterinarian, a scientist, a government official, a lobbyist, affiliated with an NGO or a member of any APU unit. I’m also not involved in conservation unless, of course, you wish to include donations to various conservation bodies, which, I must admit, I have been guilty of in the past.
I am, however, a South African, and proudly so. Each sunrise still holds promise for a brighter future. My children understand this, too. To pay for this privilege, I trade globally. I know stock markets, trading floors and exchange regulations as well as anybody anywhere, and I sleep with one eye open, watchful for substantive change in commodities, equities, traded products, derivatives, currencies and debt. This is my world.
We agree that rhinoceros are being poached for their horns; composed mostly of keratin, the same protein in our hair and fingernails. In the past, western society believed, erroneously, as it turns out, that the demand for rhino horn was ostensibly driven by the sexual desires of Asian men. During the same period, Yemeni demand for dagger handles made of rhino horn, considered a symbolic rite of passage, also contributed to global demand. Until very recently, it was thought that Eastern medicinal requirements primarily drove demand for horn. Rhino horn is said to ‘cool the blood’ and break a fever. Notwithstanding, Traditional Chinese Medicine (TCM ) does advocate an alternative. Modern demand theory challenges the notion that TCM demands are causal in the main. It’s now believed that rhino horn symbolises status for the elite. The ‘cure for cancer’ theory emanating out of Vietnam has also largely been discounted.
To clarify then, rhino horn is not an aphrodisiac. Yemeni demand for dagger handles has all but disappeared, and even though rhino horn has been used in TCM in the past, today’s practitioners prescribe alternatives. Most agree that rhino horn does not cure cancer. Modern theory holds that it is considered symbolic of status. What’s clear is that the demand for rhino horn is tangible.
Over the last century, 90% of the world’s rhinoceros were killed/harvested, mostly for their horn. As a result of this decline, the Convention on International Trade in Endangered Species (CITES), of which South Africa is a founding member, instituted a complete ban on all trade in rhinoceros products. For a time, pressure on the wild herd was seemingly controlled. In South Africa, the success was even better than most had hoped for. Consequently and simplistically for our purposes here, CITES downgraded the white rhinoceros to Appendix II, which allowed for limited trade. South Africans are, if nothing else, tenacious in business. Specific animals, considered surplus then, were offered to the private sector, and the local herd expanded.
Whilst South Africa enjoyed success, the rest of Africa’s rhinoceros population declined. Different theories account for this decline. Some say corruption, ease of access, leaky borders, less likelihood of getting caught etc. accounted for most. Nobody knows for sure. What’s clear, however, is that demand for rhino horn during that period was robust.
Back in South Africa, whilst rhinos were getting more costly to harvest illegally elsewhere because there were simply too few to harvest cost-effectively, our herd had expanded. Even though the harvest in the rest of Africa was patently illegal, the downgrading of our white rhino herd to Appendix II legitimised the harvest of trophy rhinoceros, subject to local permit approval, by sportsmen prepared to pay for the privilege. The illegal trade immediately focused on South Africa, which had inadvertently offered the illegal trade some legitimacy; most claim unintentionally. Pseudo-hunts for pseudo-sportsmen were facilitated locally, and rhinoceros were shot for horn to (illegally) supply what was becoming an insatiable Eastern demand. The South African authorities, belatedly appraised, instituted a ban on these pseudo-hunts, but the damage was done. The illegal trade had established local contact, formulated transfer channels and entrenched local infrastructure. Illegal harvest or poaching of the South African herd had begun in earnest.
In the current environment, demand for rhino horn is robust, and supply is imperfect, bottle-necked through illegal channels.
Economic theory tells us that markets exist mostly to facilitate supply and demand. In early times, we bartered one bundle of goods for another. The constituents or volume of the bundle determined the exchange. Today, we establish a price at the point of exchange, which the buyer pays in currency – usually the US dollar. Price, in turn, considers scarcity, real or perceived. In theory, the more scarce the bundle of goods, the higher the exchange price. The theory holds true in all markets, legal or otherwise, as long as demand is constant (or rising) i.e, not price sensitive.
On the ground, the supply of rhino horn is constrained and wholly dependent on illegal harvesting or poaching. It’s safe to assume that demand is constant at the current price, or prices would have fallen. The CITES ban has limited the supply of rhino horn to the end-user (currently illegal everywhere). The illegal trade facilitates the supply through a complex, convoluted maze of diverse and largely independent groups of harvesters in the field. Infrastructural corruption up the chain facilitates the transfer of product through the distribution channels to the end-user.
This is where you come in. You say to lift the CITES ban on rhinoceros trade. Legitimise the demand at the end-user. Eliminate the illegal supply chain. Establish a Central Selling Organisation mandated to control the supply of approved product through legal channels and to approved distributors only, who in turn supply the end-user markets. De-horn rhinoceros safely and without any negative effect on the donor-animal and collapse prices by volume of supply. Funds raised from the legal sales would contribute to current conservation in any one of a number of ways, either by bolstering fortress conservation (security) or for the purchase of land etc. Your point is well made but, dare I say it, flawed.
Allow me to clarify as best as I can. For ease of reference, the points will be annotated.
1. Nobody detracts from the success of your herd. I certainly don’t. Even so, as the owner of South Africa’s largest privately owned herd, you stand to benefit more than most from a resumption of trade. It’s a conflict of interest, which I can’t, in good conscience, ignore. Whilst the authorities deliberate, perhaps you would consider recusing yourself from the discussion and withdrawing from the media?
2. It’s true that rhino horn can be harvested as and when the animal regenerates its horn over the course of its life. It’s also true that the animal doesn’t have to be killed to do so. Notwithstanding, unless SANPARKS and/or Ezemvelo KZN Wildlife intend to dehorn their herd in the field, which you’ll agree is an unlikely occurrence, the only benefit to either would be the sale of surplus animals to private owners. To participate equitably, these rhinos would need to be sold at prices at, or in excess of, the current price of horn. A single animal yields approximately 4-6kg of horn? At current prices of US$30,000-US$50,000 per kilogram, that equates to approximately ZAR1,500,000 to ZAR2,500,000 per animal or circa 10 times the current price of the live animal.
3. On my point 2. above, you might be inclined to point out that an increase in supply should, by definition, drop the price of the product to more ‘reasonable’ levels. That’s true if demand stays constant, but it’s an assumption best left in the bin where it belongs. There is no irrefutable evidence that demand won’t increase, perhaps dramatically so, if ever trade was legalised. A possible/’probable’ shift outwards of the demand curve would leave prices unchanged at best or resume its upward spiral as new users enter the market.
4. The global regulatory environment is constantly in flux. It’s safe to expect some significant change within my own industry. The CSO concept as a stand-alone entity will soon be obsolete. A fairly common criticism of the CSO structure is its bias towards some form of complicity, either in open forum or disguised by internal policies. In truth, most operate as cartels, controlling both price and supply. Manipulation is simply endemic in such a structure. The same cartel-like complicity will manifest in the demand markets. Selling to ‘selected’ distributors has the same causal effect.
5. It does not follow that illegal syndicates will become redundant when trade is legalised. On the contrary, the scope to ‘launder’ illegally harvested product through official channels becomes entrenched, particularly in a corrupt environment or when large sums of money are involved. At the same time, your cost of harvesting horn or your production costs are significantly higher, I suspect, than the price of a bullet plus one or two thousand dollars for the trigger-men.
6. You have said that illegal trade will be eradicated in a legal trade environment. I don’t see why. The infrastructural environment under the auspices of legal trade would, in all likelihood, be no different from the current. Illegal networks are well established. Fortunately, some commendable work has been done by the authorities to break down these structures, but they still exist and will continue to exist until they don’t and certainly for reasons other than resumption in trade.
7. The most blatant flaws in your argument I’ve left to last, and they detract from the rest of your argument. Cattle farming has little to do with conservation. Farming lions for the ‘legal trade’ is, by anybody’s definition, not conservation. The same applies to the farming of chickens or pigs or sheep or, in this case, rhinoceros. Farming rhinoceros to shave their horns is as far removed from conservation as farming crocodiles for their belly skins. Yes, they’re not domesticated, but they’re hardly free-roaming ‘wild’ animals, either. Your herd is supplementary-fed and controlled in relatively small paddocks. Mauricedale is obviously a well-run farming operation.
8. Now, if you were to publicly distinguish your herd from the free-roaming herd and openly commoditise your rhinoceros, then your herd becomes a product, like eggs or bacon. Yes, it’s still an illegal commodity, but your exhortations in the public domain to reopen trade would be inscrutable. Intentions are made clearer, are based on sound business principles and are more readily understood in the public eye. However, masking intent by including conservation benefits and the project- integration of the local community in the same dialogue is misleading, although unintended perhaps.
9. In passing, I am confident that the authorities in control of the valuable stockpile of rhinoceros horn will remain steadfast in their application, thus avoiding any potential conflicts of interest. These same officials hold the elective right to lobby CITES to renew trade.
Also read – Opinion: Rhino horn trade = extinction in the wild
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