Hot air ballooning, wildebeest migration , game viewing ,walking safari , masai cultural visits.
THE CASE FOR GAME RANCHING - A Biodiversity ......investment: 3. Potential financial performance of...
Transcript of 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
References1. Cloete, P.C., et al. 2015. Game Ranch Profitability in South Africa, ABSA & Barclays
RANCH LEVEL REALITY…
Weighted average real auction prices for selected game species
References1. Vleissentraal
RANCH LEVEL REALITY…
Weighted average real auction prices for selected game species
References1. Vleissentraal
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
References1. Cloete, P.C., et al. 2015. Game Ranch Profitability in South Africa, ABSA & Barclays
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
Thank you© J.G. du Toit