In the last couple of years, Africa’s rhino population has experienced a poaching epidemic. Official figures show that the number of killed animals has exploded in South Africa, from 13 in 2007 to 1054 in 2016. This surge can be traced back to a demand boom for rhino horn in Asia, where it is coveted as medicine and used to treat fever, alcoholism, and even cancer. In the face of this crisis, South Africa’s constitutional court overturned the country’s previous ban on domestic trade on March 30 in the hope that legalization would curb poaching. The decision was met by both support and criticism, with both sides agreeing that the problem lies in market forces, namely supply and demand. The question is, is it possible to use the same forces to save rhinos from extinction?
According to the pro-legalization side, the problem is deficient supply. They argue that, just like during the prohibition era in the US, a trade ban only makes things worse. Restricting supply pushes up prices but it does not dampen demand. In return, the high prices create a lucrative business that attracts poachers and only increases the incentive to kill rhinos. In addition, where there is demand, people will always find new ways to supply the market. As a result, bans are becoming increasingly hard to enforce, as supply chains become more sophisticated, making it harder to prevent and clamp down on illicit trade. This concern is particularly relevant in parts of Africa where law enforcement is ineffective, corruption is rife and surveillance is non-existent.
As a response to this problem, private rhino ranchers in South Africa argue that if they could sell their stock of horns, they could undermine the illegal trade. By selling their stock, they increase the supply of horns on the market, thus lowering prices. This would in turn discourage poaching since their profit margins would decrease as well. If rhino ranchers can provide horns legally, for a cheaper price and at a minimized risk it would incentivize people to buy from them and not on the illegal market. Since rhino horns, unlike ivory, continues to grow over the rhino’s lifetime, it can be “harvested” and provide a steady supply of horn to the market. Not only would this saturate demand, it would also allow rhinos to reproduce and grow in numbers since it would not be necessary to kill the animal in order to procure the horns. Moreover, the tax revenues from this business could be reinvested to conservation efforts and create a long-term source of income. Simply put, the domestic legalization would allow rhino ranchers to use the market forces against poachers and successfully outcompete them.
In contrast, prohibitionists argue that this reasoning is too simplistic and naïve. Conservation efforts should instead focus on cutting demand rather than adapting to the market. In their view, allowing domestic trade would be to open Pandora’s box, leaving the outcome entirely in the hands of the volatile market. The risk is that any attempt to normalize the use of rhino horn by allowing it to be sold might boost demand along with the increase in supply. Consequently, the ensuing decrease in prices would only bring in more customers and leave incentives for poaching unchanged as demand surges. To tackle this, more funding should be invested in marketing campaigns debunking myths of rhino horn as remedies and creating a stigma around using it. One such initiative that has proven successful is to inform people that rhino horn is the chemical equivalent of human hair and nails, thus diminishing its exclusivity.
In addition, legalization poses problems for law enforcement. Without a proper plan in place for how the legal market could be managed and regulated, such as via permits and certificates, legal and poached horns become indistinguishable. As their origin cannot be traced, it makes it easier to launder and export illegal, poached horns. In the eyes of conservationists this would be the worst possible outcome. Buyers in Asia would get access to cheaper supplies, illegal poachers would still control exports and profit from it and the rhino population would keep falling.
The lift of the ban on domestic trade in rhino horns has proven to be controversial and the outcome is still uncertain. However, the fact remains that in order to halt the poaching epidemic as well as provide a future for the rhinos, conservation efforts have to use the power of the market to undercut the illegal business. Whether the solution will be targeting demand or increasing supply remains to be seen. However, as there are only 20.000 white rhinos and 5.000 black rhinos left in the wild, action has to be taken now to save them. It is indeed a race against extinction.