Deepak Lal: Saving the tiger

Business Standard , Thursday, July 21, 2005
Correspondent : Deepak Lal
Creating market-based incentives will help.

“Tiger! Tiger! Burning bright

In the forests of the night

What immortal hand or eye

Could frame thy fearful symmetry”

It is worth repeating William Blake’s famous lines, as they best show us why the reported slaughter of nearly all the tigers in Sariska and the systematic poaching in other India game reserves is a great tragedy.

But Project Tiger, despite its initial success in increasing the number of Indian tigers in the wild, is now failing in its basic objective of preventing their extinction.

The basic reason for this failure is that, as in so many cases where bureaucratic solutions based on good intentions, bans and policing, are used to achieve desirable objectives, the incentive structures are perverse, not least for the bureaucratic enforcers who are merely provided new avenues of corruption.

Press reports confirm this has been the entirely predictable outcome of Project Tiger.

Given these failures, dirigistes always call for greater political will to deal with the miscreants and for the creation of an enlightened and altruistic cadre of public servants.

But, as economists know, instead of dirigiste bureaucratic means of dealing with the problem of renewable but common resources, incentives for their optimal preservation are provided by converting them into private property. How can these economic principles be used to save the tiger?

First note that tigers have an economic value and also a cost. To take the latter first. The major cost is borne by those who live in agricultural communities close to the game reserves.

With growing pressure of population on agricultural land, the tigers are competing for increasingly scarce land that could be used for farming.

This rising opportunity cost of preserving the existing game reserves is borne by those who live by farming on the edges of these reserves.

There is also the increasing danger of attacks by tigers as their natural habitat shrinks with unauthorised encroachments by farmers.

What of the economic value? These differ for dead and live tigers. The demand for dead tigers, which is leading to their extinction, is largely for their body parts, which are used in traditional medicines in China and South East Asia, and the decorative demand for trophies—not least in India.

The demand for live tigers is from the burgeoning global tourist industry. These relative costs and benefits provide the existing structure of incentives and disincentives to kill tigers.

Currently, as the tigers are publicly owned, the villagers living near the reserves bear all the costs and get little benefit from the tourist demand for live tigers.

Given the large sum that a dead tiger commands in the underground market, they would not be human if they did not aid and abet in the killing of tigers rather than keeping them alive.

The forest service, which is responsible for managing the publicly-owned tigers, is prone to what economists call “rent seeking”, like all bureaucracies.

They can earn much more under the table in helping those who want to kill tigers for profit than any psychic income they derive from being the keepers of these magnificent beasts.

To save the tiger, the answer lies in changing the structure of incentives through the creation of property rights in the tigers for those who would have an incentive in keeping them alive.

The answer would seem to be obvious, and has been adopted by many African countries (South Africa and Zimbabwe, for instance) to preserve their endangered species of wild elephants and rhinos.

It is to privatise the tiger reserves. Long-term leases to the land and wildlife in the game reserves could be auctioned to national or international tourist companies, with the right to build tourist ranches and hotels and the accompanying infrastructure, with the proviso that the population of tigers would be monitored by the forest service—as is currently supposed to be done.

Furthermore, the lease would involve an annual rent based on a prescribed (low) share of the net earnings from tourists visiting the company-owned game reserve. This annual rent of the game reserve would be paid to the villages contiguous with the reserves.

The villagers, apart from the income they might get from the employment and the ancillary services generated by the private tourist game resort, would now also have a direct interest in keeping the tigers alive as their annual rent would be directly based on tourist sightings of live tigers.

Whilst for the private operators of these game reserves there would be a direct incentive to invest in the protection, policing and monitoring of their major asset—the tigers.

It is difficult to judge whether the economic value of live tigers, which would thereby be created, would be greater than the current price commanded by the body parts of dead tigers in the Far East.

But in time, assuming that the tiger population in these privatised tourist game reserves reaches sustainable levels, some culling of their tiger population may be licensed.

The supply of body parts from these culled tigers, and those whose demise is part of nature’s cycle, could then be made part of a legal trade, preferably through annual auctions.

There are those of an idealistic bent who will find such a market-based solution either nauseating or unworkable.

As to the last, they should be sent to the private ranches in South Africa, which have reversed the danger of the extinction of the African elephant to such an extent that, when my wife and I visited the Krueger National Park in South Africa a few years ago, there was an ongoing official cull using military helicopters.

As to those who are idealistically opposed to any market-based solutions, as seems to be true of many members of the ruling coalition, they should be reminded that just as their dislike of the market has kept Indians in poverty, their repugnance of market-based solutions to saving the tiger will only ensure that very soon our children and grandchildren will find Blake’s poem incomprehensible, as the only Indian tigers they will be able to see are the sad and dispiriting remnants in our zoos.

SOURCE : Business Standard, Thursday, July 21, 2005

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