International trade in crocodilian skins23 April 2002
There are three sources of supply of crocodilian skins: wild-harvested, captive-bred and ranched. The most common crocodilian skin type is caiman. Caiman are placed in their own category, separate from other crocodilian species and they compose half of all the crocodilian trade. In 1999, 791,824 of the 1,182,469 crocodilian skins were caiman. All other crocodilian species are combined in a single category called 'classics'. The most common classics species is the alligator, making up 244,812 of the 390,645 classics skins traded in 1999. Alligator and caiman together dominate the crocodilian skins market. These species accounted for 83% of the crocodile trade in 1999. Trade in crocodilian skins since the middle of the 1980s has followed a U-shaped path. After the implementation of restrictions limiting trade in wild stocks in the late 1970s, volume fell. With time, since the late 1980s, new production methods (ranching and captive breeding) have increased production and trade. From 1981 to 2000, there have been two periods of increasing sales: 1980-1988 and 1994-1995 and two periods of marked decline in sales value: 1989-1994 and 1996-1998. The 1989-1994 decline seemed to start with the drop in demand resulting from the economic slump in Japan, the market for half the crocodilian skins in the world. The small skins' market, more directly tied to the consumer, was the first to feel the effects of the slowdown. Some producers and others holding crocodilian skin inventories, it is believed, overreacted to the decline in prices instigated by the drop in Japanese demand. They liquidated stock, thus increasing supply, and this further depressed prices. The impact on the larger skins market was delayed somewhat due to the fact that demand for large skins suffers less variability and because speculation in these relatively valuable skins distorted the price. Over-supply of ranched alligator skins added to the decline in price but did not prompt it, according to this analysis. The value 'crash' in 1996 was also prompted by a decline in Asian economies. Caiman supplies increased just as a drop in ostrich skin prices also reduced demand. The combination of increased supply and decreased demand contributed to a drop in price of crocodilian skin products. Since 1977, the industry has switched from wild to domestic stocks. Wild supplies of all crocodilian skins fell from 427,153 in 1977 to 70,381 in 1999. Over the same period, ranching production rose from 1,258 to 255,945. Captive breeding rose from 567 skins in 1980 to 856,143 in 1999. Total trade in crocodilian skins, led by the growth of domesticated production, rose from 428,411 to 1,182,469. CITES In 1975, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) was established and, initially, virtually all trade in crocodilians was banned under Appendix I. Some trade was permitted for selected countries that satisfied certain criteria. After 1981, most countries acceded to CITES. The chief role of CITES was to ensure sustainable populations and to make sure that the industry developed along a conservation path. The agreement contained incentives to find ways to improve the status of the crocodilian population, to move from Appendix I (a total ban on trade) to Appendix II (limited trade). In addition to CITES, the US and European Union have had a strong effect on international trade by their conservation policies and legislation, such as the US Endangered Species Act. The pivotal economic and political power of these entities has made the implications of these policies felt worldwide. Competition Crocodile trade competes mainly with other exotic leathers: lizard, shark, frog, snake and ratites. The strongest competition comes from ostrich skin. The ostrich industry has grown considerably since the end of the South African monopoly in 1990 and as farmers in other nations entered the ostrich ranching industry. From 1980-1990, the production of crocodile skins outnumbered ostrich skins: 105,000 to 80,000. In 1996-1997, ostrich production (250,000) was twice as large as crocodilian skin production (105,000). Increased competition from ostrich leather is likely to have depressed crocodilian skin prices. Wild harvest skins, once practically the only source, have dropped from 427,153 in 1977 to 70,381 in 1999. The drop has been particularly sharp for caiman (388,322 to 15,739) and crocodylus porosus (13,931 to 2,549). Wild-harvested alligators have actually bucked the trend, rising from zero in 1977 to 325 in 1978 to 42,492 in 1999, a reflection of the rebound in US alligator populations. Certainly, CITES regulations have been behind this decline in wild harvest. The author claims that technological changes have given ranching and captive-breeding a per-unit cost advantage over wild harvest. Similarly, supply uncertainty about wild harvests have made tanners and consumers reluctant to depend on wild sources. Ranching Ranching has expanded greatly over the past two decades. In 1977, only 1,258 ranched skins (all of them crocodylus niloticus) were traded. In 1999, ranched skins numbered 255,945 (195,367 from alligator and 56,158 from crocodylus niloticus). Ranching may result in greater and more certain supplies, placing downward pressure on product prices. CITES regulations were designed to encourage ranching and discourage wild-harvests. Ranching is seen as a more conservation-orientated alternative. It is thought to involve less downward pressure on populations than harvesting of mature wild crocodilians because it normally takes younger animals, those that usually die in high numbers naturally. Another advantage of ranching is reduced regulation costs. In Louisiana alone, the cost of monitoring and regulation of the wild harvest is estimated to be $800,000 per year. Many developing nations may lack the resources to patrol and monitor wild-harvests. Instead, they may encourage domestic production, which is less dispersed and expensive to regulate. Like ranching, captive-bred skin supply has greatly increased since the implementation of CITES regulations. Nonexistent in 1980, by the end of the 1980s captive-bred supplies rose to 9,000, split between alligator and crocodylus niloticus. Total output associated with captive breeding has risen sharply to 856,143 in 1999, led by an expansion in caiman production. Caiman captive breeding rose from zero in 1988 to 31,000 in 1989 to 776,085 (91% of all captive breeding) in 1999. Captive breeding of crocodylus niloticus produced 69,000 skins in 1999. Alligator, after peaking at 20,000 in 1993, saw its captive-bred production fall to 6,953 in 1999. There appears to be an emerging supply of crocodylus porosus. Multiple production methods The trend is to shift production from wild harvest to captive breeding operations. Nevertheless, captive breeding may never completely replace wild harvests. To illustrate this, there are several countries with multiple harvest methods, ranching, captive breeding, and wild harvests, that appear to complement each other. In the US, for example, alligators are produced through wild harvests, ranching, and captive breeding. Other nations featuring all three production methods include Australia (crocodylus porosus), Indonesia (crocodylus novaeguineae), and Madagascar (crocodylus niloticus). Papua New Guinea has wild harvesting and ranching for crocodylus porosus and crocodylus novaeguineae. These two methods are also present for crocodylus niloticus in Botswana, Ethiopia, and Malawi. Zimbabwe features both ranching and captive breeding for crocodylus niloticus. Ranching and captive breeding provide opportunities to bring new species to the market. Mexico is trying to develop crocodylus moreletti and Cuba wants to introduce crocodylus rhombifer into captive breeding. Before introducing a new species into captive breeding production, a number of CITES regulations must be satisfied. The tanning sector The tanning sector is relatively small. There are only five major tanneries in the world, located in three countries: France, Italy and Singapore. Since demand for skins as a raw material by specific tanneries is unavailable, this report uses imports of crocodilian skins into each of the three major tannery nations as a substitute. To see if the tanneries in the different countries are serving the same market, the author correlated imports of different categories into the three major tannery nations. If two countries import the same type of skins, the correlation values will be positive and large, suggesting they purchase identical resources to produce similar output for the same customers. There is a positive, significant correlation for imports of caiman skins into France and Singapore and a positive, significant correlation for imports of classics into Italy and France. There is only a weak positive or negative correlation between imports of caimans into Italy and France or Singapore or classics into Singapore and France or Italy. This suggests that France and Singapore are serving the same market for caimans but not classics and Italy and France are serving the same markets for classics and not caimans. Conservation Conservation of wild species is seen as an important goal, for developing and developed economies. Governments, especially those in developing nations, cannot afford to put aside unlimited amounts of land and other resources for conservation. Government resources are rarely adequate to conserve biodiversity. Private-public partnerships and local organisations may try to devise working alternatives to government protection, but there are serious obstacles to these methods of encouraging sustainable use as well. A successful programme must meet several conditions. The directors or organisers of conservation programmes must collaborate with local people and institutions. They must be sure to respect private and common property rights. Institutions must be developed to address the programme and its works. Further, all these factors must be geographically distinct, fitting the local physiological, social, economic and political landscape. Conclusion Future conservation efforts should increasingly rely on market-driven forces for conservation. Current efforts depend on international charity and landholder goodwill. International conservation efforts depend on regulations and programmes targeting the producers and landholders. This overlooks the other sectors of the marketing chain. The author makes an appeal for redistributive interventions, to make sure that rents accruing to selective sectors (eg tanning) are spread to others (production and landholders.) The author believes there is a need to drive a value wedge between skins that are produced with ecologically friendly methods and those that are not. This would require a fundamental change in the industry to direct efforts towards in situ conservation. The author outlines a practical guide for implementing such a programme. Supply should be managed by producer cooperatives, private intermediaries and auctions. Under this scheme, supply should be restricted to the 140+ countries which are party to CITES. Levies should be enforced on each unit in trade. These funds could be redistributed to encourage in situ conservation. Certification of ecologically beneficial production techniques should be established to allow consumers the opportunity to purchase skins produced using less environmentally harmful methods.