the case for game ranching - a biodiversity ......investment: 3. potential financial performance of...

THE CASE FOR GAME RANCHING A Biodiversity Economy

Imperative

DEA Workshop on

Game Breeding

Pretoria

2 December 2015

Dr Gert Dry WRSA: Past-President

THE CASE FOR GAME RANCHING -A Biodiversity Economy Imperative1. GLOBAL REALITY

2. SOUTH AFRICAN REALITY

3. RANCH LEVEL REALITY

4. CONCLUSION

© J.G. du Toit

GLOBAL REALITY Conservation Ideology¹: Keeps the whole process working as naturally

as possible within the bounds of our current circumstances, capacity and constraints

Preservation Ideology¹: Keeping, for emotional reasons, a snapshot of the world as it is/was (at some time / defined by whom?)

The 74 largest terrestrial herbivore species on earth (body mass >100kg) are generally facing dramatic population declines and range contractions. > 60% threatened with extinction².

Kenya lost almost 80% of its wild animals since ban of hunting. Key Species: 20 000 rhino declined to 1 000

150 000 elephant declined to 2 000

20 000 lion declined to 2 000

Except for SA, lion declined in rest of Africa by 60% over last 21 years³.

References1. Dictionary2. Ripple, W.J., et al (2015) Collapse of the World’s Largest Herbivores. Sci. Adv. 1, e14001033. Red list Data Book, 2015

GLOBAL REALITY …

© J.G. du Toit

GLOBAL REALITY…

SOUTH AFRICAN REALITY

RSA had 3 private game ranches in 1960 with ownership of

game and land vested in farmers.

Currently, 20 000 000 ha marginal, uneconomic, semi-desert,

agricultural land converted into sustainable land-use option.

10 000 – 11 000 GAME RANCHES

Average size of game ranches is 2700 ha

Embedded CapEx in terms of land value, plus fencing costs, plus

game handling facilities plus game is R2300 bn

References• Bothma, J du P., et al. 2015. Game Management 6th Edition• Cousins, J.A., et al. 2010. The Challenge of Regulating Private Wildlife Ranching for Conservation in South Africa.

http//www.ecologyandsociety.org/volxx/155.• Child, B.A., et al. 2012. The economics and institutional economics on private land in Africa.• Cloete, P.C., et al. 2015. Game Ranching Profitability in South Africa, ABSA & Barclays.

SOUTH AFRICAN REALITY… 140k people employed: reward systems 3x higher than conventional

stock farmers:

Out of more than 100 permanent jobs game ranchers supply,

±15 people qualify as farm/general workers.

On average-sized ranch, the staff complement would consist of

the following:

Ranch manager

Assistant manager

Secretary / admin officer

Mechanic

4 Field rangers

6 Labourers

SOUTH AFRICAN REALITY…SUCCESSES OF GAME RANCHING IN SA

Now, 20 million head of game in SA, more than in the past 165 years

cf 14m cattle and 30m sheep & goats

Species where wildlife ranching played an important role in saving them from

extinction:SPECIES TOTAL APPROX.

(1950)

IN PARKS ON PRIVATE

RANCHES

TOTAL 2015

White Rhino 30 12 000 5 000 (30%) 17 000

Black Rhino 30 1 510 450 (23%) 1 960

Blesbok 2 000 25 000 >225 000 (90%) >250 000

Bontebok 19 1 000 >7 000 (87.5%) >8 000

Sable Antelope 450 <500 15 000 (97%) >15 500

Roan Antelope 150 381 4 500 > (92%) 4 881

Cape Mountain

Zebra

<80 1 925 865 (31%) >2 790

Black Wildebeest <500 1 800 >15 700 (87%) >17 500

Where

would you

look for a

genetic

bottle-

neck?

2010 Structural Economic Change

Source: Groenewald & York. 2013. An economic outlook, the wildlife industry. Golden Breeders.

May 2013

SOUTH AFRICAN REALITY…

SOUTH AFRICAN REALITY…

CURRENT CONTRIBUTIONS

R20 billion contribution per annum

Decent jobs: 140 000 at better salaries due to higher skills

needed

Food security: >150 000 tons of game meat per annum

Sustainable use, biodiversity and conservation:

>20 million ha (20% of SA’s agricultural land) of marginal

agricultural land converted to sustainable green economy

Contributed to saving various species from extinction, including

leopard tortoise and Waterberg copper butterfly.

SOUTH AFRICAN REALITY…SPECIFIC GOALS FOR 2025

Contribution to SA’s balance sheet R75 to R100 billion per annum

Decent jobs 250 000 decent jobs

Steady improvement in living standards

Steady improvement in reward systems

Food security Produce 250 000 tons of game meat per annum

Facilitate the export of game meat with a target of R1 billion exports (FMD permitting)

Agrarian development, biodiversity & conservation 30m ha footprint for game ranching

30m head of game on game ranches

More species on all game ranches

References1. Cloete, P.C., et al. 2015. Game Ranch Profitability in South Africa, ABSA & Barclays

© J.G. du Toit

RANCH LEVEL REALITY1. COST DRIVERS FOR HUNTERS

Average spend of hunters (excluding cost of game hunted)

(Accommodation, transportation, food, beverages, ammunition,

clothing, hunting gear, etc.)

Average trophy hunters’ spending (excluding cost of game

hunted) (Transport, SA airlines, accommodation, food,

ammunition, hunting gear, shipping costs, licenses and permits,

etc.)

2005 2007 2009 2010 2013

R4 130 R9 544 R13 631 R12 946 R16 565

2013

R48 376


RANCH LEVEL REALITY…

Weighted average real auction prices for selected game species

References1. Vleissentraal

Capital outlay for game animals on the different Ranch Sizes (Cloete, P.C.)

Species

Composition

Relative species

distribution on a

typical bushveld farm

Minimum

number

Number of animals

per species

(Bushveld 150 LSU)

Number of animals

per species

(Bushveld 600 LSU)

Number of animals

per species

(Bushveld 1000 LSU)

Low-selective grazers (20% of relative distribution)

Zebra 100% 10 39 154 257

High-selective grazers (30% of relative distribution)

Blesbuck 3% 12 12 21 35

Oryx 10% 12 12 29 48

Red hartebeest 15% 12 14 54 90

Blue wildebeest 50% 12 35 162 270

Waterbuck 15% 12 12 44 74

Mixed feeders (30% of relative distribution)

Eland 15% 12 6 24 40

Impala 65% 15 100 619 1032

Nyala 7% 12 11 44 30

Browsers (20% of relative distribution)

Giraffe 25% 8 8 17 10

Kudu 60% 12 30 120 300

Total capital outlay R 2 278 772,07 R 9 052 238,75 R 13 791 867,90

RANCH LEVEL REALITY…

1. Potential financial performance of disease-free buffalo¹

Return on capital

investment:

2. Potential financial performance of intensive sable breeding¹

Return on capital

investment:

3. Potential financial performance of intensive golden wildebeest¹

Return on capital

investment:

4. Game ranchers’ tax regime not equal to stock or crop-farming, i.e.

pays 8 times more in terms of property taxation


Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

- 2,3% 18,6% 19% 21,2% 23,1% 25,9% 27,5% 29,9% 43,1%

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

- 63,2% 39,4% 39,4% 41,2% 42,7% 41,1% 45,5% 46,8% 48,2%

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

- 28,0% 27,6% 32,2% 36,1% 40% 44,4% 49,2% 54,6% 60,4%

CONCLUSION

References1. Drs Peter & Pamela Oberem, 2015. The Case for Game Ranching, WRSA

CONCLUSION… State sponsored “Conservation/Preservation” not sustainable.

Current “Conservation” Jurisprudence dysfunctional for game ranching

WRSA established Transformation Fund to facilitate traction towards

Biodiversity Economy

Start-up Capital/Pledged Funding

1% of commission earned at WRSA auctions for the 2015 auction

season

Pending Funding Streams

20% of revenue to be earned from statutory levies currently in

development with The National Agricultural Marketing Council (NAMC)

20% from industry funding currently in development with the Department

of Trade and Industry (DTI)

CONCLUSION… Breeding practices and colour variations are not a threat to Biodiversity

Small percentage of game ranches (<5%) have colour variants

Small percentage of animals on farms (<1%)

WRSA undertaking to the Minister of Environmental Affairs not to sell, donate

or translocate less common coloured species to any national, provincial or

municipal parks, or release same in “the wild”. Read conservation.

© J.G. du Toit

CONCLUSION… MONITOR AND EVALUATE GAME RANCHING’S PERFORMANCE

AS

AN ASSET CLASS OF THE BIODIVERSITY ECONOMY AND SUSTAINABLE USE

AND NOT

AS AN EXTENSION OF THE STATE’S CONSERVATION MANDATE

KEY INDUSTRY STAKEHOLDERS DEVELOP INTEGRATED/CO-ORDINATED RESPONSE TO MITIGATE CURRENT “NOISE-IN-THE-

SYSTEM”

RECOMMENDED CHANGES TO GOVERNANCE AND REGULATORY MODEL BY THE STATE

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