Legalising rhino horn trade: don't charge in blind

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In 2015 and 2016, the total number of rhinos poached represented almost 6% of South Africa’s rhinos (if white and black rhinos are added up together), which is similar to the estimated population growth rate. This suggests that the situation is close to a tipping point where rhino deaths exceed births.

Statistics for 2017 haven’t been tallied, but the numbers are likely to be high again. Before 2008, South Africa was losing fewer than 25 rhinos to poaching per year. There is no consensus about the reasons for the increase in poaching.

Rhinos are killed for their horns, which fetch high prices on the black market. There are suggestions from 2012 that end user prices were as high as USD$65000/kg. Most poached rhino horns are smuggled to Asia, where their uses range from traditional or modern medicine to making ornaments. It’s also speculated that criminal syndicates store some in stockpiles in the belief that prices will increase in future.

In an attempt to stop the poaching, South Africa has developed a multi-sectoral approach that includes state and private entities and combines law enforcement with interventions like translocations. The poaching rate appears to have levelled, but this strategy hasn’t reduced killings to sustainable levels – or prevented the involvement of organised crime in rhino poaching.

Since limiting the supply of horn to the market has not succeeded, another strategy is to consider the opposite: increasing the supply by legalising trade.

A group of South African conservation biologists recently estimated how much horn could be supplied if this happened. The paper looked at the amount of rhino horn that could be produced in South Africa in one year. The horn could come from rhinos that die of natural causes, live rhinos dehorned on private properties and stockpiles. Trophy hunted rhinos were also considered, although this would be a highly contentious source of horn for legal trade. Trophy hunting of rhinos is legal in South Africa under highly regulated conditions.

The paper estimated a minimum production of 5319 kg horn over one year and a maximum of 13 356 kg. In comparison, the amount of horn thought to be entering the illegal markets is around 5346 kg/year.

The scientists did not think there was enough information to assess whether this would be enough to satisfy the demand in Asia. Markets are complex and it’s hard to predict what would happen if more rhino horn became available. A number of factors need to be taken into account, including the unknown impact of having separate markets for legal and illegal horn, uncertainty about prices, the possibility of laundering illegal horn through legal markets, and relaxing of the stigma of buying horn.

As a result, caution is needed before unleashing unpredictable market forces on a threatened species.

Contrasting approaches

In theory, rhino poaching could be made less financially rewarding in two ways.

One is to reduce demand: to discourage people from buying rhino horn. So far, there is no credible evidence that this approach will work.

Another is to make trade legal. Here, the goal is to attract buyers away from the illegal market and to use the income from legal trade to protect rhinos. This approach has never been tried because a Convention on International Trade in Endangered Species or CITES ban on international trade has been in place since the 1970s.

There are strongly opposing views on the likely outcome of legalising trade, and no credible evidence to support the theory.

Traditional economic theory suggests that the price of horn would drop if it were readily available through legitimate channels. This would lead to lower profits for criminals and a subsequent reduction in poaching. It also suggests that prohibiting the sale of horn increases its scarcity and leads to increased prices. Confiscating horn may cause increased poaching to meet demand.

The theory, however, assumes that legal and illegal horns are interchangeable in a single market. This would not be true if there were separate legal and illegal markets with different prices.

It’s not clear, either, how an increased supply of horn would affect market prices. And legalising trade might reduce the stigma of buying rhino horn, stimulating demand for legal horn among law-abiding people. If demand exceeded legal supply, poaching might increase. The number of potential law abiding users of rhino horn is unknown.

These unknowns point to the need for policymakers to proceed with caution. The potential for unintended consequences resulting from boosting the supply of rhino horn make legalising trade a high risk strategy.

Andrew Taylor Wildlife Trade Programme Officer at the Endangered Wildlife Trust featured as a coauthor on the article.