Rhino horn – an open letter


Dear Mr Hume

To be clear – I have no association with commercial wildlife farming / ranching. I’m not a veterinarian, a scientist, government official, lobbyist, affiliated to a 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.

I am, however, a South African, 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 demand for horn was ostensibly driven by the sexual desires of Asian men. During the same period Yemeni demand for dagger-handles, made of rhino-horn (hereinafter ‘horn’), considered a symbolic rite of passage, also contributed to global demand. Until very recently it was thought that demand for horn was primarily driven by Eastern medicinal requirements. ‘Horn’ is said to ‘cool the blood’ and break a fever. Notwithstanding, ‘TCM’ (Traditional Chinese Medicine) does, in fact, advocate an alternative. Modern demand-theory challenges the notion that ‘TCM’ demands are causal in the main. It’s now believed that ‘horn’ is symbolic of status for the elite. The ‘cure for cancer’ theory, emanating out of Vietnam, has also, largely, been discounted.

To clarify then; ‘horn’ is not an aphrodisiac. Yemeni demand for dagger-handles has all but disappeared and even though ‘horn’ has been used in ‘TCM’ in the past, today’s practitioners prescribe alternatives. Most agree that ‘horn’ does not cure cancer. Modern theory holds that ‘horn’ is considered symbolic of status. What’s clear is that demand for ‘horn’ is real.

Over the last century 90% of the world’s rhinoceros were killed / harvested, mostly for their horn. As a result of this decline, CITES (Convention on International Trade in Endangered Species), 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. As a consequence 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 at the time, were offered to the private sector and the local herd expanded.

Whilst South Africa enjoyed success the rest of Africa’s rhinoceros population continued to decline. 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 ‘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 rhino, 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 supply (illegally), what was becoming, an insatiable Eastern demand. The South African authorities, (belatedly), instituted a ban on these pseudo-hunts but the damage was done. The illegal trade had established local contact, formulated channels of transfer and entrenched local infrastructure. Illegal harvest or poaching of the South African herd had begun in earnest.

Demand for ‘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 price of exchange. The theory holds true in all markets, legal or otherwise, as long as demand is constant (or rising) and is not price sensitive.

On the ground the supply of ‘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 ‘horn’ to the end-user (currently illegal everywhere). The illegal trade facilitates the supply through a complex, convoluted maze of diverse and largely independent group 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 lift the CITES ban on rhinoceros trade. Legitimise ‘demand‘ at the end-user. Eliminate the illegal supply chain. Establish a Central Selling Organisation mandated to control supply of approved product through legal channels and to approved distributors only; & who in turn supply the end-user. De-horn rhinoceros safely and without any ill effect on the 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 ‘horn’ can be harvested as and when the animal regenerates its horn and 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 dehorning their herd in the field, an unlikely occurrence you’ll agree, the only benefit to either would be the sale of surplus animals to private owners. To participate equitably these rhino would need to be sold at prices at or in excess of the current price of horn. A single animal yields approximately 6 kg of horn? At current prices of $30 000 – $50 000 per kilogram that equates to approximately R 1 500 000 to R 2 500 000 per animal or approximately 10 times the current price of live animals.
  3. You’ve argued that an increase in supply should, by definition, drop the price of 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, if ever trade was legalised. A possible / probable shift outwards of the demand curve would leave prices unchanged or higher as new users enter the market.
  4. The global regulatory environment is constantly in flux. The CSO concept, as a stand-alone entity, will soon become 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 and or when large sums of money are involved. At the same time your cost of harvesting horn or your production costs are significantly higher than a 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. The 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 a resumption in trade.
  7. The most blatant flaws in your argument I’ve left to last and they detract, negate even, from the rest of your argument.
    1. 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 sheep; or, in this case, rhinoceros. Farming rhino to shave their horns is as far removed from conservation as is farming crocodiles for their belly skins. Yes they’re not domesticated but they’re hardly free-roaming ‘wild’ animals either. Your herd is tame, supplementary-fed and controlled in relatively small paddocks. Mauricedale is obviously a well-run farming operation.
    2. 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 & bacon. Yes it’s still an illegal commodity but your exhortations in the public domain, to reopen trade, would be inscrutable. Your 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 patent nonsense; although unintended perhaps.
  8. 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 for a renewal of trade.

Let’s forget your farming-model for the moment and speak plainly. In truth the solution to poaching lies not in your pocket however honorable the idea might sound. The solution is multi-faceted, complex and requires fortitude and administrative will. Each facet is dependent on the rest or the idea fails.

Here’s what I think –

Step 1 – Strict application of the CITES ban with full international cooperation inclusive of enforcement, administration and legislative cohesion across borders.

Step 2 – radically improve security in the field. By way of example the Kruger National Park enjoys 2 000 000 plus visitors each year. A small ‘poaching-levy’ of say R 100 pp paid at the gate equates to R 200 000 000…

Step 3 – Vigorous domestic law enforcement; judicial expediency and infrastructural scrutiny.

Step 4 – Official transgressions in the Administration related to the trade, either at provincial or national level, however minor, intentional or negligent, punishable by immediate dismissal and or criminal prosecution.

Step 5 – Significant improvements in channels of communication / education in the demand markets; eliminate the end-user and negate demand.

Step 6* – See Step 1

In closing let me say this. Whilst I can sympathise with your predicament, your appeal ‘on behalf of all rhinos, is patently absurd. Your intentions are justified in your own capacity only. There is simply too much at stake to risk financial reward for a small minority without a thorough interrogation of the extent of the demand market.

From Monday to Friday I trade the commodity markets. I would hate to see our lumbering grey quoted by the pound on CBOT. I like him where he is. He’s not much but he’s ours; and he’s not for sale.


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