Should South Africa Legalise the Rhino Horn Trade?

Rhino hunting has reached record heights in South Africa, prompting the government to address requests for establishing a legal market of Rhino horns to combat poaching.

Rhinos are currently on the ICUN Red List as critically endangered. Conservation society WWF estimated the Black Rhino population has decrease by 95% since the 1980s, from 75,000 to 4,500 in South Africa today. Currently, 80% of Rhinos are found on state owned reserves, their vast size makes them difficult to patrol and prime hunting territory for poachers. The Rhinos are tranquilised, their horns brutally chain-sawed off and left to bleed out through their mutilated heads – a long and excruciating death. More than 440 Rhinos were poached in 2011 – their horns removed for sale predominantly on the Asian and Middle Eastern black markets. The horns, used primarily for ornamental and medicinal purposes, sell for approximately $35,055 US per kilo, making Rhino horns a multi-billion dollar illegal industry on the global market.

Currently, four main conservation tactics are being used with little to unknown success. First, trade regulations have been implemented. The buying or selling of Rhino horns is prohibited under CITES. This form of attack has not proven effective, only minimal success has been gained through US trade tactics with China. Second, protected areas are set up and Armed Guards are used to protect Rhinos in the wilderness. However, poachers have been known to kill guards for the prize of a Rhinos horn, limiting the success of this approach. Third, some activists have taken the extreme action of attempting to safely dehorn Rhinos to discourage poachers from killing. However the success of this method is unknown, there is speculation that dehorning impairs their ability to reproduce and protect themselves and young. Fourth, a number of zoos and wilder life reserves have set up captive breeding programs to boost population numbers. While all approaches have benefits, neither individually or combined have the techniques managed to eradicate or lower poaching and increase the population size.

A number of Conservation Economists and private owners are pushing for a legal trade of Rhino horns to combat the illegal black market trade. Charles Jonga, Director of Campfire Association Zimbabwe argues South Africa “must be open to the idea of engaging with the markets and finding ways which would make Africa benefit from the demand”. The South African Department of Environmental Affairs recently commissioned a study into the legalising the Rhino horn trade and its effects. The department’s spokesman, Albie Modise stated the government “would consider this [legalising the Rhino horn trade] if we get authentic scientific backing that this would be effective”.

Legalising the Rhino horn market would make the government responsible for meeting demand. This would be possible given the South African government currently holds millions of dollars in confiscated Rhino horns. Some suspect that if the government took control of the market, they would be able to offer a competitive price to consumers, effectively making poaching obsolete. By offering a lower and legal price to consumer, poachers will most likely not take the risk of breaking the law to meet competitive prices. This in turn would save Rhino’s lives in the wilderness, allowing populations to grow. It has been suggested the funds raised by the sales of horns would go towards Rhino conservation.

However, conservation groups such as WWF criticise the idea, arguing it will setback decades of hard conservation work and destabilise the Rhino population. Morne du Plessis of WWF in South Africa said “we understand the need to come up with new ways of combating the rhino horn trade but we are against the notion that legalising it is the answer”. He went onto voice the WWF concerns that the market contains too many unknowns, which the government would not be able to control or grow to understand. Ultimately, many conservationists fear legalising the market will further disadvantage the Rhino.

Legalising the trade cannot be a permanent fix. While in the short run it may reduce poaching, there are no long term benefits, only losses. By legalising the trade, the number of consumers will grow as those unwilling to buy illegally will now join the market – demand will increase. However the government stockpile is finite, once stocks disappear there will be a larger market, with more consumers and only poachers to supply the horns. In the long rune, more horns will be demanded than the government can supply therefore more Rhinos will be poached to meet demand and the species will be facing even lower population numbers.

Given the government is unable to control poaching they must target the consumers. Reduce the number of consumers and increase the Rhino population. The questions is – how? Considering the high value put on Rhino horns for medicinal purposes in Asia and ornamental in the Middle East if is difficult to see how the consumer market can be reduced. To save Rhinos from extinction changes must be made however a method to do so is yet to be found.

Esther Ziebell

16 thoughts on “Should South Africa Legalise the Rhino Horn Trade?”

  1. The obvious solution to this is is legalisation, and embracing property rights.

    The tragedy of the commons that is putting rhinos on the course to extinction exists because land/rhinos are not allocated to an owner.

    We eat an enormous amount of chickens every year. Why aren’t they extinct? Because farmers can own land and raise chickens on them and protect them. The legalised market, together with property rights, provides an incentive for farmers to ensure there are enough chickens to continue the lineage of chickens to continue to constant stream of revenue and profits for his business.

    The same would happen with rhinos if we applied some of the Coase theorem to this problem.

  2. While I can see where you are coming from in a purely economic and profit based sense your suggestion has no real world application and would in fact be to the detriment of Rhinos. To suggest that Rhinos should be treated with the same carelessness and abuse as chicken is outrageous. For the most, chickens are force fed in factories in tiny cages, pumped with hormones and their lives last a matter of weeks to meet the demand of our dinner tables. Rhinos live for up to 40 years, I do not think demand is going to wait that long for Rhinos to mature and donate their horns at the end of their natural lives. Do you suggest we exploit these animals like we do so many others not for food but for non-existent medicinal purposes and knife handles? The aim is to preserve Rhino populations in their natural habitat, not to make a buck of them or allocate them to an owner. We need to stop the trade of Rhino horns, not exploit it for our own benefit.

    • Here you are arguing against animal cruelty, such as taking their horns. I am not arguing for or against that. I’m taking it as a premise, and accepting it as prevalent in society, and addressing it with a solution that will solve this – which property rights will.

      Your sentiment is very much in the same vein of arguments against capitalism because it “promotes greed”, but really capitalism merely takes greed as an assumption, and optimises based on the cold harsh reality that greed is present.

      And through competition, those who raise rhinos will have no choice but to raise the supply of horns (as a whole industry) until the horn is no longer scarce, which may actually destroy the perceived “luxury value” of the good. This would actually help the rhino too. A nice equilibrium would be struck where it is still profitable to raise rhinos, but barely – keeping them alive, and while also moderating their demand in the marketplace. There may also be rhino roaming free in parks and unallocated property still (or allocated property for the purpose of preserving wildlife), especially if the rhino horn drops in price now that legal purchase from rhino farms is more viable than well-protected wildlife reserves.

      The reason why protecting wildlife reserves now doesn’t work is because the scarcity of rhinos produced by not allowing rhino farms to exist (legalising private property) is making it worthwhile to try and violate the laws and create a black market instead.

      As per the applicability of the chicken pen idea to rhinos – it is even more pertinent. Here’s why – if you leave a chicken in the wild for 10 years, and assume that it doubles, and compare that to a rhino which would double after 40 years, then which is more likely to be true in the wild? The chicken. In 40 years time the tragedy of the commons will have destroyed all of the rhinos. In 10 years time, at least maybe not all of the chickens have been hunted, and they may still have a hope of surviving.

      • Collin, this is also a time value of money issue. A chicken farmer can rear an animal for sale in a matter of weeks, a Rhino lives for 40 years. It is unlikely that firms will invest in a project which has no revenue stream for 40 year unless rewards are exceedingly high. At a market discount rate the present value of a revenue stream 40 years in the future is very heavily discounted.

        • That is true, but the more likely that rhinos will be extinct, the more likely it is that the price of the horn will be immensely valuable to justify it.

          Also, I’m not sure how this “horning” business works, but can’t the rhino reproduce FIRST, and then have the horn taken? Which doesn’t make this an issue of horns later vs horn now, but horns now and horns later.

          And the tragedy of the commons tells us a similar tale about throwing back small fish into the sea to grow a little more – it doesn’t happen in a public pond, but it sure will in a fish farm.

          • I still feel the payoff is not large enough for firms to enter into such a business when there are far more viable ways to make money. It is also difficult to predict how Rhino populations will develop over the next 40 years, will the government take drastic action and the number increase? A firm would have to ask themselves these questions and it’s a big gamble to take over a 40 year period of time.

            It takes years for Rhinos to mature and the size of the horn does matter. You cannot simply take that of a baby. Since you raised the issue of mating it should be noted that breeding in captivity is very difficult. If it was easy Rhinos would not be on the brink of extinction.

          • But then why do rhino poachers hunt with so much voracity despite the risk of being persecuted? So obviously the profit incentive is there. And business is all about risk. Telstra exists despite there being competitive threats with the NBN, etc.

            I didn’t say you can take one off the baby, but you can breed current adults and then take their horns. Rhino farms don’t have to be in captivity if it is not effective. It can be in huge wide open plains, but as long as this property is owned privately, it can be done effectively – the incentives still exist.

            Rather than theorycrafting about whether this will work or not, we have to talk about a solution that actually will do something. This has been proven to work in many cases. It is worth trying.

            On the other hand, your proposed solution has not worked for drugs, and creates black markets and undesirable and destabilising gang warfare.

          • The profit incentive is there with immediate payoffs, not with those 40 years in the future. Even if as you suggest the trade is legalised, poachers will not go into private ownership, the payoffs of poaching outweigh that of your suggested farming. Poaching would continue.

            I don’t think you seem to understand that your idea cannot be done efficiently as you suggest. Breeding programs are difficult to establish, whether on a farm or in wide open spaces. If breeding was easy there would not be only a few thousand Rhinos left. Breeding programs are for pro-creation, to save the species, not to sell their horns. And, if you are suggesting taking their horns at maturity, not upon natural death and keeping them in privately owned wilderness you are killing them, Rhinos who have been dehorned will most likely be unable to protect themselves or their young in the wilderness.

            May ask what solution you are speaking of as mine. I have not offered a solution that will defiantly work, only suggested that that currently being considered by the South African government is unlikely to succeed and that your solution also is unlikely to succeed. If there was a quick fix or easily thought up was to help boost Rhino populations don’t you think it would have been thought of and tried over the past decades. The WWF stated that they have not done extensive research into legalising the market because initial research shows that it will not work. Poaching will continue either way so there is not point in legalising the market and encouraging the horn trade.

            As I said in the article, it is consumers which need to be focused on. It is a difficult task but currently we have no solution to poaching so we have to do our best the current tactics we have and attempt to remove the market. The US did this in 1993 by threatening to cut off legal wildlife trade with China if they did not attempt to stop illegal wildlife trade. In response China made it illegal to trade, sell, buy or transport Rhino horns. Ultimately, this has not stopped the trade worldwide but it is these types of actions that may help.

            I find it interesting that you began this conversation stating this was not about animal cruelty or welfare (which I strongly disagree with) but now you are turning around and accusing me of supporting ideas that will lead to the end of Rhinos when you argue a point that takes no consideration of a Rhinos quality or length of life.

          • Firstly, I do not doubt you have good intentions. Even communists are credited with best intentions.

            I am, however, questioning what will actually achieve the best outcomes (which for me, is ensuring their survival). Your suggestion, about curbing demand, is similar to what the U.S. tried on drugs, and alcohol, which created the black market and gang warfare. It makes it extremely inefficient to try to raise rhinos in private as well, because you have to face poachers alone and potentially also face the threat of the government. Hence, asking for the blessing of the government to raise rhinos legally can make sense.

            If you are correct that raising rhinos is far too difficult (but mind you, many extremely costly and difficult things are done when the incentive is great enough, think costly long-term infrastructure projects funded privately…), then there is unfortunately no solution. Sitting around worrying this may not work will achieve nothing, but trying this will give us the best shot.

            Doing nothing will continue to lack of incentives to keep rhinos alive. Doing this provides an incentive. It’s as simple as that. You may argue that the incentive is not enough, but if that is true, then nothing will work.

          • Drugs and alcohol are addictive substances, as far as I know, Rhino horns are not. I’m not suggesting it is easy to reduce demand but that is what needs to be achieved. There is no quick fix but to implement a plan that is most likely to fail because you can’t think of anything else is futile and very well could be to the detriment of Rhinos.
            Nothing is not being done, it’s just that no technique is overwhelmingly successful but that does not mean you give up or that Rhinos are doomed. We must continue to search for a solution while implementing the smaller techniques that may be helpful like breeding programs, guards around Rhinos, trade blocks on countries who don’t be hard on the Rhino trade and so on.

  3. Collin,
    The tragedy of the commons suggests that resources to which no property right is ascribed will be over exploited. It does not necessarily imply that the property right cannot be ascribed to the government. In fact, Hardin suggested that open access resources could be either sold/gifted to a private owner, or owned and regulated by government.

    Also, I don’t think Coasian bargaining can really be applied here. Firstly because Coase himself subsequently admitted that transaction costs are likely to be high, and that initial allocation matters. And secondly because I don’t really know who is doing the bargaining here – are the rhinos bargaining with the poachers?

    • Sure, the government could own it. I think it would be done better if there was competitive ownership of rhinos so there would be incentive for the most effective proliferation of rhinos so they could all vie to best compete to gain market share of the horn market.

      The typical Coase example is done with a river. The owner of river negotiates with whoever wants to exploit the resource. Here with rhinos/land with penned rhinos, the owner of the land/rhinos bargains with whoever wants to exploit the resource (the rhino).

      So those who want horns negotiate with the owners.

      I feel given the detail of the debate it is a good time to raise a defence to the objection that hasn’t been pointed out yet – what stops poachers from killing private property rhinos in the meantime?

      And that is a good question that underlies the importance of law enforcement institutions for proper functioning markets. But I would argue that if you give defensive rights to private property owners, the rhino farmer has every incentive, as long as rhino horns are expensive enough, to have the weaponry/defense systems to defend against poachers – and will do this better than benevolent-but-unincentivised rangers who do not necessarily have all the funds possible, since government doesn’t run on a profit/loss system…

      • Collin,
        A couple of points:

        Firstly, as I noted, Coase himself admitted that initial allocations of resources do matter. If poachers already roam free, that does affect the outcome. In any case, Coase theorem is a bit dubious in my view, you simply don’t see applied by economic agents at all frequently. An exception is perhaps litigation through the courts in first world countries, but in this example does not apply here, where rule of law is weak.

        Secondly, this moves beyond economics, but it is generally observed that societies which are highly armed for the purpose of individual defence are not highly developed and are prone to destabilising violence and civil strife. You mention the lack of incentives for government officers (and I’d note that the strong prospect of being killed is an incentive to combat poachers enough), but what incentive do highly armed private rhino property owners really have to obey the law if institutions are weak?

        • The Coase theorem is widely applied in many commonly accepted areas. Chickens in farms, fish farms, tree farms, etc. are all applications of private property rights solving environmental problems. I would argue it is the very essence of capitalism – for without ownership there is no incentive.

          I’m not willing to enter an argument about gun laws, but Switzerland and the U.S. have laws that promote civil self-defence by private armoury. Switzerland has a very reasonably low crime rate. The U.S. is complicated, but if you focus on states with less gun control, it will have less crime per household within the country, even if the country as a whole is suffering – this might be for other reasons. I’ll leave it at that, because I wouldn’t condone Australia to take on these laws. I think there are two equilibria that work well – no guns at all, and having guns. In the case where criminals have guns and are using them, and government cannot save us, I don’t see a problem with it.

          Private rhino property owners have an incentive to keep society stable enough so they can raise their rhinos in peace.

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