Horn of Contention: Pro-trade thinking comes in for severe criticism
Ian Michler
15 Jan 2014

Those that oppose the legalization of trade in rhino horn as the panacea for the continent’s rhino poaching crisis have long cautioned against the use of simplistic economic modelling as a basis to justify this stance. And now in the first of what is likely to be many more convincing critiques, a report that raises considerable doubt over the approaches used by pro-trade economists and consultants has just been published.

Compiled by Economists at Large (EcoLarge) and released by the International Fund for Animal Welfare (IFAW), Horn of Contention: A review of literature on the economics of trade in rhino horn sounds a clear and persuasive warning against pro-trade policies as a way of reducing the heavy poaching pressures on rhino. After reviewing a selection of literature on wildlife trade in general and the economics of trade in rhino horn in particular, the report highlights the risks involved in legalizing the trade. It concludes that “economic logic does not suggest that a legal trade in rhino horn would necessarily reduce poaching of rhino in Africa. Under certain conditions this may occur, but there is little empirical evidence cited in these papers to suggest that these conditions are currently in place.”

Distinguishing between ‘formal peer-reviewed articles’ and un-reviewed work or what they refer to as ‘grey literature’, the EcoLarge report makes a clear distinction between the two categories. The former have a far more cautious tone due to the ambiguous nature of the outcomes, pointing out the uncertainties and discrepancies with trade, while the authors of the ‘grey literature’ are overtly pro trade and make a host of assumptions on a variety of factors in order to fit the modelling. Listed in this category is the work of Michael ‘t Sas-Rolfes and Michael Eustace, two economists that have received extensive coverage within pro-trade circles, and their modelling has been instrumental in driving the economic arguments behind this lobby in South Africa. The EcoLarge report goes on to say these studies “are considerably less rigorous in their application of economic principles,” and that they “generally fail to address the factors that the more formal studies suggest could lead to increases in poachingthe evidence offered for these views is generally not compelling.” And in the case of Eustace, the report refers to his position as “simplistic and misguided.”

According to the EcoLarge report, amongst the many assumptions made in the ‘grey literature’, the one that ignores the distinctions between legal and illegal wildlife products and markets seems to bear the most significant consequences. The report warns of the very real potential for separate markets, legal and illegal to exist side by side and points to a recent study on Chinese consumption patterns for bear bile (Dutton, Hepburn, & Macdonald, 2011). “We find a willingness to pay considerably more for wild bear bile than farmed….the ability of farmed bear bile to reduce demand for wild bear bile is at best limited and, at prevailing prices, may be close to zero or have the opposite effect.”  And TRAFFIC has reported similar consequences with regards to consumer behaviour for tiger bones; “consumers also showed a preference for wild tiger products to those made from captive-bred animals,” said a 2009 report.

In a similar light, the assumption that supply can be controlled effectively enough to reduce price and ultimately bring down poaching levels also needs further scrutiny. Again, this seems to be a simplistic ‘textbook’ take rather than a real world scenario where in fact the very opposite may occur. Amongst the very few things we do know about these markets is that both the demand side and the quantity of illegal horn available is unknown, yet despite this the pro-trade modelling seems to have been based on assumptions that markets will be stable and can allocate resources efficiently, and that supply will equal demand. Given the population levels in the Far East and the regions recent voracious consumption levels, underestimating demand and the potential for poaching to occur at all price levels may well be the most critical oversight in the pro-trade modelling.

This same line of critical analysis also counters any notion that farming rhino horn is an acceptable solution. From the same Dutton et al report quoted on bear bile, the authors have the following warning, “When the government allows farming and trade to conserve wild stocks, the outcome could be the exact opposite of what is desired—extra poaching pressure and smaller wild stocks. Evidence suggests that there is imperfect competition in the wildlife commodity market; hence, the mode of competition between suppliers is undetermined a priori. It is unclear whether competition will be intense or not, implying that it is unclear whether supplies from the wild will contract or expand.”

This report clearly highlights the levels of uncertainty and risk involved with the current economic modelling underpinning the legalization lobby. And with the extinction of rhino at stake, it is difficult to see how the global regulatory authorities would be able to allow any changes to the current no-trade policies.

 Ian Michler is a top specialist wilderness guide, photojournalist and naturalist, and has lived and worked across Africa for the last 22 years. Ian works with the Conservation Action Trust www.conservationaction.co.za