Barbara Creecy hints at tax incentives for private owners of SA rhino herds

Environment Minister Barbara Creecy has hinted that tax incentives could be on the cards for private rhino owners, who are the custodians of most of South Africa’s population of the pachyderms.

“There have been some considerations with regard to incentives in the taxation space. I’m not able to speak on that at the moment, but I do hope in the not-too-distant future we might be able to make an announcement on that,” Creecy said during a brief interview with Daily Maverick in Pretoria after the release of the latest rhino poaching statistics.

The minister was responding to a question about whether the government was looking at ways to provide the private rhino sector with incentives.

The latest poaching data, for the six months to the end of June 2023, underlined once again the private sector’s key role in protecting rhinos in the face of the onslaught to feed Asian demand for their horns.

During this period, 231 rhinos were killed in South Africa, a decline of 11% compared with the first half of last year, when 259 of the animals were slain.

From January to June 2022, 49 privately owned rhinos were felled, 19% of the total. Over the same period this year, 46 were killed in privately owned reserves, which is about 20%.

But about 8,000 rhinos are now in private hands, accounting for at least 60% of a dwindling national herd, according to estimates by the Private Rhino Owners Association.

Poaching has pivoted from the Kruger National Park, where the population has been decimated by relentless poaching over the past 15 years, to KwaZulu-Natal’s shoddily managed state-run provincial reserves. Such parks accounted for over 60% of rhino losses in the first six months of this year.

Almost all the growth in South Africa’s rhino population over the past decade has taken place on private land, despite incentives to own the species having evaporated.

The business case for owning rhinos in the past was to breed animals for resale, draw tourists for game viewing and photographic safaris, or for trophy hunting.

But prices have collapsed, industry sources say, whereas security costs have soared, making rhinos a liability rather than an asset. 

Smaller players have been driven out of the game, leading to a concentration of ownership. This undermines the business or investment case for rhino ownership.

The global ban on trade in rhino horn remains firmly in place, a policy that some critics maintain is fuelling the poaching crisis because Asian demand for horn for its alleged (and frankly fictional) medicinal uses and ornamental carving remains robust.

The horns of this dilemma have been thrown into sharp relief by the failure in May of an online auction to sell rhino tycoon John Hume’s breeding project in North West. Hume owns about 2,000 white rhinos, well over 10% of the global population of the species.

But he says he can no longer afford to maintain his project, which is classified as a “captive breeding operation”.

Daily Maverick understands that Hume remains in talks with potential investors despite the failure of the auction.

But the spectre of policy uncertainty – a hallmark of a lack of governance that thwarts investment on many other fronts in South Africa – is casting a shadow over Hume’s attempts to find a buyer.

A high-level panel in 2020 recommended the phasing out of intensive breeding operations.

There is a broad consensus that the captive breeding of lions is unethical, but rhino captive breeding operations, where the animals graze in large enclosures and remain in many ways wild, are a different matter and have demonstrably added to the species’ numbers, whereas state-owned populations have been hammered.

A 2022 study assessing South African captive breeding operations that contained more than 2,800 rhinos, found that their average annual population growth was 9%.

“This increase has been attributed to effective security, provision of additional habitat, dispersal and frequent genetic exchange of rhinos between breeding subpopulations by the private sector,” said the study, which was published in the peer-reviewed journal, PLOS One.

Asked about the potential fate of captive breeding operations in light of the 2020 panel recommendations, Creecy said: “We will be issuing a follow-up policy paper shortly. It’s about the implementation of the high-level panel recommendations.”

It remains to be seen whether that will include incentives for rhino ownership. The panel’s report certainly took aim at captive breeding operations like the one for which Hume is trying to find investors or donors with deep pockets.

Still, talk of tax incentives indicates that the government recognises the contribution the private sector has made to rhino conservation. What that would entail is hard to say.

For a business, things like security costs must already be a tax write-off. 

Could tax relief be offered to those who grow their herds, in recognition of their conservation efforts? That seems unlikely, but it’s high time that the government began thinking outside its box on such issues. DM