Preserving Africa's Wildlife

SA’s Bush Business

As the first morning rays warm the plains next to Mankwe lake, the white rhino calf emerges from the safety of his mother’s flanks and gambols awkwardly through the veld.

“Aaaah!” A chorus of “cute” and “shame” erupts from our game vehicle, and the calf quickly bounces back to his mom, still unsteady on his feet, but clearly loving these early steps on his great adventure. “He was born a few days ago,” points out Dave, our game guide. “He’s just happy to be alive!”

 A cascade of camera shutters greets the little rhino’s every clumsy step as we scramble for our long lenses and start busily documenting our first good sighting at Pilanesberg National Park. At a time like this, with the joy of new life and the miracle of unspoilt Africa on full display, the silliest possible question to ask would be “How much is that little rhino worth?” Even more ridiculous is that we actually know what a rhino is worth. The weighted average price of a white rhino at Ezemvelo KZN Wildlife and South African National Parks (SANParks) game sales is R234 405. So in this case, you can put a price on beauty. And that’s not even as high as game prices get!

South African game farms are not just where Africa’s unique safari experiences are on offer for both local and international guests, they are also at the heart of some serious money, says Hagen Engler.

 A few kilometres away, in Rustenburg, a buffalo cow named Tanzania was recently sold at auction for a cool R20 million – a South African record.  The South African wildlife industry not only offers once-in-a-lifetime experiences for wide-eyed safari travellers, it’s also huge business. In fact, the annual income of SANParks in 2011 was R702m — but this pales in comparison to the estimated income of Wildlife Ranching SA. The body representing the country’s game and wildlife ranchers (those who farm rare breeds) estimates its industry’s gross annual income at R8 billion. This, from an annual South African tourism income of around R70 billion in 2010.

So, while most people touring South Africa will, like us, be cooing “ag shame” at newborn rhinos in South Africa’s National Parks, a significant number of people are visiting private game ranches. And if you’re visiting a private game ranch, there’s a good chance you’re going there to hunt.

Prof Pieter van Niekerk, chairman of the National Confederation of Hunters’ Organisations (Chasa) says that 60% of the income in the commercial game industry comes from hunting, with local hunters contributing most of that amount. The remainder of the industry income comes from eco-tourism (game viewing safaris, birding etc) and live-game trading.

It’s the live-game trading however that has begun to make serious headlines in recent years, especially because of the involvement of celebrity businessman like Bidvest Chairman Cyril Ramaphosa and Mimosa Films mogul Boet Troskie and his son Jaco.

Well-known entrepreneurs like these and others have been able to afford game with prices in the millions, which are guaranteed to make headlines.

But why are game animals fetching such high prices? And are these headline-grabbing big-ticket sales part of a general trend towards higher prices for game?

Yes, but it’s not as simple as that. Game-auction figures collected by Professor Flippie Cloete of North-West University, and published in Game & Hunt magazine, show common game prices are dropping. Meanwhile the prices of rare and exotic species are going through the roof. In 2011, game auctions turned more than R504 million – a 71% increase on 2010. One auction – the legendary Thabo Tholo 2011 – turned R107 million. This year, a game auction outside Rustenburg made sales worth R146 million!

“This can mainly be ascribed to a demand for scarce animals,” says Dr Cloete, pointing out that it’s mainly scarce species and colour variants that are showing price increases, while common game prices show a downward trend.

Wildlife auctioneer Brandon Leer agrees. “Last year’s general or plains game auction achieved a much lower density of purchase,” he told Gilla Brunt in an interview for the Wildlife Ranching South Africa (WRSA) Online.

So the growth in the game farming industry seems to be happening in the field of rare and exotic species, which will fetch higher prices on the stud market. In fact, the commercial farming of rare game is now the sixth-biggest industry in South African agriculture. What also attracts wealthy businessmen to rare game is that it’s a tangible, measurable investment. In the current uncertain economic climate, rare game has been seen to have proven value; both to breeders and hunters, and the returns on investment are brilliant.

Take an example, which Piet du Toit outlines in WRSA magazine. Imagine a game breeder purchases a single golden wildebeest bull, which might cost R460 000 at present prices, and adds it to a herd of 30 normal wildebeest cows, which might be worth R100 000 in total. When those cows become pregnant, the herd immediately increases in value to R1,5 million. Those 30 split calves should produce 15 gold wildebeest calves, which would be worth R100 000 each. So within two years, that half a million rand purchase has given the farmer a herd worth R3 million. That’s a return of 300% p.a. No wonder the big businessmen are showing up at game auctions these days! And those auctions are quite something.

If you search Thaba Tholo on YouTube, you’ll feel the buzz as auctioneer Willie Roux nurses the bids on Lot 84, Senatla, “the bull of the century”, up beyond the R10 million in half-a-million increments. You’ve never seen a bushveld hall full of khaki-clad farmers fold their arms as tightly as that! Not one sudden move that might be mistaken for a bid, except for a few subtle ones from “anonymous bidder” Peter Bellingham. Eventually he outlasts his final remaining rival, a mystery telephone bidder and secures Senatla for R18 million.

Rare game of this sort, bred by Piet du Toit and purchased by the likes of Messrs Bellingham, Troskie and Ramaphosa are possessed of super-genes that are in crazy demand across the industry. Famers have gone deep into the bush to capture the biggest, rarest, most beautiful animals, and then skilfully bred them to ensure their genes are passed down. As Piet points out, it’s also important when breeding with rare stud bulls to keep track of their progeny. DNA records are kept of all animals, which can be verified, and it is these priceless bloodlines that are driving growth in the game farming industry.

Species averaging in the R100 000s at recent game auctions include buffalo, sable, golden wildebeest, black impala, black-back impala and white rhino. Interestingly, the white rhino, despite its endangered status and the growing threat of poaching, is losing value. Average prices for white rhino at auction dropped 10,4% between 2010 and 2011.

Some say this is precisely because of the increasing regulation of rhino by the government as it tries to combat poaching. The process of buying a rhino involves negotiating a byzantine bureaucracy aimed at protecting the animal. One needs export permits from the originating farm, import permits from the destination farm, an internal movement permit, a vet licensed to dart rhino, and a government nature conservation official to be present upon arrival — which, as you can imagine, is a logistical nightmare for anyone. The new owner will also require an almost military level of security staff to protect his new investment from poachers, and if he chooses to dehorn the rhino, he must negotiate an even more complex permit system as darting a rhino, cutting off a horn, possessing a horn and transporting a horn are all restricted activities. But then, of course, what eco-tourist or hunter will travel across the world to see a rhino without its horn? Perhaps removing a rhino’s horn makes him less attractive to poachers, but then you’re removing the very thing that makes him a rhino. Will that become the only way to protect the life of the little rhino calf we saw romping across the Pilanesberg plain?

In the face of this, many game ranchers decide that rhinos are more trouble than they’re worth. At present white rhino numbers are about 20 000, but the accelerating rate of poaching to supply demand in the far east has seen poaching explode from a mere 13 poaching incidents in 2007 to where 220 rhinos had been poached by May this year. The Department of Environmental Affairs projects 584 will be poached by the end of 2012.

SANParks have prioritized the rhino poaching threat, and it’s policed in collaboration with the state security cluster, including the Hawks’ Endangered Species Specialist Unit, the South African Police and the South African National Defence Force. A total of 146 arrests have been made this year, and the Asset Forfeiture Unit is attaching the assets of poaching suspects. Three alleged poachers recently had R55 million of assets seized. Business Day however reports that there have only been 10 convictions in poaching cases to date, for a total of 111 years in jail. It’s likely the attachment of the bank accounts, farms, homes and cars of suspects not yet convicted will act as more of a deterrent to would-be poachers than the slow-turning wheels of justice.

But the sad truth is that every strategy to combat poaching has failed and the number of rhino deaths has soared in the face of demand from Vietnam, where wildlife trade monitoring network, Traffic, says the horn is used, not as an aphrodisiac, but a special gift to curry favour, to help with a hangover and a purported cancer cure.

Because of the ongoing CITES ban on the estimated R1,2 billion rhino horn trade, control of the industry is in the hands of organized crime. But Ezemvelo KZN Wildlife, the body that brought the white rhino back from the brink of extinction in the ‘60s, has proposed a strategy to take back the industry from the gangsters and criminals.

The idea, recently floated by CEO Bandile Mkhize involves legalizing the trade, and establishing one central rhino-horn clearing-house. Then, price and demand would be managed in the manner of the De Beers single-channel monopoly in the diamond industry, which ran through most of the 20th century. This system would work by using South Africa’s large rhino-horn stockpile to manage prices downwards and thus reduce potential profits for illegal traders. All horn would then be micro chipped, chemically profiled and certified so that no other horn could be traded. The South African team plans to present this proposal to the next CITES Conference in March 2013. Whether it’s accepted remains to be seen. But South African game is now an enormous international business, and everybody wants a part of it, from African billionaires to Vietnamese gangsters.

Home grown solutions are vital in addressing the challenges we face. South Africans have a vital part to play in preserving the African wildlife experience for all of humanity. Part of that means ensuring the keeping of game makes good financial sense for all involved.