The tiger is seriously threatened with extinction from the wild. The most immediate threat to wild tigers arises from poaching to supply the illegal market for tiger body parts. To date, efforts to prevent trade in tiger products have failed to arrest the continuing decline of wild tiger numbers. This has prompted calls to meet the enduring demand for tiger parts with a supply provided from tigers in existing commercial captive breeding facilities.

The conservation rationale claimed for tiger farming is that the introduction of a legal supply source will result in lower product prices and consequently reduce poaching pressure. However, the tiger farming concept is fiercely opposed by western NGOs (and even the World Bank), who argue that it will actually intensify the threat to wild tigers. The opponents of tiger farming have further called for the closure of existing commercial captive breeding centres, and an effective reduction in captive tiger stocks.

In an attempt to move the polarized debate on tiger farming forward, we undertook a comprehensive review of the relevant literature on the subject and analyzed the arguments made to date. Numerous organizations have an interest in tiger conservation, and we examined publications with perspectives on in situ conservation strategies and captive breeding, trade studies, policy recommendations, and economic analyses of the trade and farming debate. Our review shows that tiger conservation and trade is a highly complex issue, given that there are six surviving subspecies, thirteen range states, and diverse forms of demand (and markets) for live tigers and tiger products.

In analyzing literature on the trade and farming debate, we also find obvious gaps in understanding between specialists in natural science, law enforcement and economics. Consequently, the exact nature of the forces driving poaching and illegal trade, and the best ways to address them, are not well understood. Trade studies by organizations such as TRAFFIC and the Environmental Investigation Agency reveal much detail about the illegal trade, but we find that some of their conclusions and recommendations do not flow logically from the evidence presented. Their positions show unstinting support of the CITES trade ban approach, despite strong evidence that this is not working.

To date, the farming debate has typically focused on a simple theoretical proposition branded as the “supply-side” approach. This simple supply-side model relies on certain assumptions that are easily challenged in the case of the tiger market. However, the mere fact that these assumptions do not hold does not automatically invalidate the case for farming.

One assumption is that of a hypothetical environment of “perfect competition”. In reality, no market is ever “perfectly competitive”, and we therefore need to consider more complex models that reflect the competitive environment more accurately. Until recently, this has only been partially attempted in a general theoretical framework without taking the specifics of the tiger market into account, and to date there is no consensus on an appropriate model for this market.

Another assumption is that wild and farmed tiger products are perfect substitutes for each other. However, evidence suggests that the market is likely to differentiate between them, especially in the case of tiger bones. Tiger bones, which are used in traditional Chinese medicines to treat rheumatism and other ailments, are often difficult to differentiate from bones of other species, and there is a high incidence of fakes in the marketplace. At least some consumers are likely to prefer bones from known certified sources (such as farms) over those from unknown sources. Conversely, other consumers may believe that products from wild tigers are more desirable and may be willing to pay a premium for them. To date, no study has properly assessed the relative preferences (measured by a willingness to pay) between farmed bones of verified source and wild bones of unknown origin. Without knowing these relative preferences, all predictions of the market impact of introducing a farmed supply of tiger products amount to sheer conjecture.

A common argument against the supply-side approach holds that the cost of raising a farmed tiger (variously quoted at between US$2,000 and $24,000) way exceeds the cost of poaching a wild one (quotes range from $1 to $200), and it will therefore always be cheaper to poach wild tigers than to farm them. However, this argument is flawed and the comparison misleading. The costs of tiger farming are offset by income from other sources such as tourism viewing (this accounts partially for the large number of existing captive animals), and the quoted costs of poaching do not reflect the full costs of illegal supply. The true costs of illegal supply include various transactions and risk costs associated with processing, smuggling, storing and delivering the product to end consumers, including bribery and protection costs. These cumulative costs are likely to be significant: this explains why recorded end-user prices (as much as $70,000 for one tiger) exceed even the alleged costs of raising a farmed tiger, typically by high margins.

In reality, the cost of poaching a tiger and supplying its body parts to end users will vary greatly with geography and circumstance, and it is likely that tiger farms have the potential to undercut the costs of illegal supply in many instances. The extent to which this may be possible is affected by the potential of laundering (the introduction of illegally-sourced product into legal channels), as this can reduce transactions and risk costs of illegal supply. Opponents of tiger farming cite laundering as a major concern, but they ignore market incentives that are likely to discourage it. The problem of fakes suggests that legal producers of farmed products would use authenticity as a competitive advantage, and therefore maintain a visibly separate supply channel. As a premium product, wild tiger bone should also command a higher market price, and there is no apparent benefit to either producers or consumers to routinely launder and market it as farmed bone.

Even if farmed and wild tiger products can be kept separate in the marketplace, opponents of tiger farming allege that allowing trade in farmed products would lead to an increase in demand for both farmed and wild tiger products, by removing an existing stigma associated with their consumption. However, this argument implies that existing law-abiding citizens will switch to becoming illegal consumers of wild products if farmed products are legitimized. Provided that stiff penalties for wild product consumption remain in place, from an economic perspective it seems more likely that existing illegal consumers would prefer to obtain products from legal suppliers, who would also have strong incentives to act against illegal competition.

Closer examination of anti-farming arguments also reveals common misconceptions about the nature of markets, which lead to flawed conclusions. One misconception is that the demand for tiger products is “too high” or “exceeds supply”. This argument assumes that the amount of product desired is a fixed number, and ignores the critical role of prices in regulating both the quantities supplied and consumed.

A second misconception is that an increase in supply causes an increase in demand, and hence an enhanced threat to wild tigers. In fact, demand is not determined by supply but by consumer preferences, and if these do not change, an increase in supply will simply result in an increase in quantity consumed with a concurrent drop in price. If the increased quantity consumed is supplied from farming, this does not impact on wild tigers, but the reduction in price may be beneficial for them, as it reduces the economic incentives for poaching and illegal trade.

These misconceptions reinforce an entrenched perception that trade is somehow detrimental to conservation and, conversely, that restricting or even eliminating trade will benefit conservation (the default assumption of a CITES Appendix I listing). Following this line of reasoning for tigers, reports by groups such as TRAFFIC and the EIA focus on levels of recorded trading activity and implicitly evaluate success by reductions in quantities traded. However, this approach is flawed, as trading profitability (not quantity) is the relevant driver of poaching pressure, and price data are thus essential in assessing relevant trends. Even if quantities traded are reduced, rising prices can more than offset the conservation benefit of those reductions.

Trade bans are also often mistakenly assumed to reduce or eliminate demand when in fact they might only constrict supply. If consumer preferences are relatively unaffected by trade restrictions, and if consumers are also relatively insensitive to increases in price, trade bans may be practically unenforceable and even aggravate the situation. This is because further restrictions in supply actually increase the profitability of the persisting illegal trade, thereby attracting sophisticated international organized crime syndicates. Such syndicates are adept at exploiting global institutional weaknesses and employing the assistance of corrupt enforcement agents, thereby remaining beyond the reach of the law. This phenomenon is prevalent in the trade of illegal drugs such as heroin, marijuana and cocaine, and is increasingly apparent in the wildlife trade. To date, these syndicates have on average successfully resisted attempts to thwart their activities, only experiencing relatively minor and temporary setbacks from law enforcement efforts.

In the case of seriously endangered species, trade bans and supply restrictions may also encourage excess levels of illegal harvesting driven by speculative demand for stockpiling purposes. Such speculation is caused by uncertainty over prices and future expectations of product scarcity (or even extinction of the species).

Examining evidence from the tiger trade and assessing the impact of the trade ban, we observe continued poaching, declines in wild tiger populations, illegal trade, consumption of tiger products, persistent demand for tiger bone medicines and reports of stockpiling. Increased regulation, bans and enforcement have not succeeded in eliminating any of this to date. We cannot ascertain whether illegal supply has become more or less profitable, and it is unclear to what extent the trade ban approach has helped wild tigers, if at all.

We are also skeptical of assertions that the use of tiger bone medicine is a dying practice, as these are based on flimsy evidence. Rising disposable incomes in China and neighbouring consumer countries, combined with an ageing population (and therefore more rheumatism sufferers) may actually result in future increases in consumer demand for tiger products. Although we acknowledge the possibility of influencing consumer preferences with information campaigns, the cost of achieving this to a point at which poaching is effectively reduced to sustainable levels is unclear, as is the potential source of funding.

We dispute claims that the trade ban is consistent with a precautionary approach. In particular, we believe that calls to further restrict supplies of tiger products from captive populations and to reduce stocks of captive tigers constitute a high risk approach. Taking this action forecloses an option of competing with illegal suppliers and effectively places the future of wild tigers in the hands of organized crime syndicates with consolidated monopolistic power. We strongly advise against this.

We recommend that conservation enforcement efforts focus on pre-emptive poaching measures in the vicinity of wild tiger populations, and intelligence-led enforcement sourced from wild tiger poaching incidents. Illegal trade in products sourced from captive tigers does not constitute a direct and immediate threat to wild tigers, and may even alleviate short-term poaching pressure, and we therefore advise against measures to restrict such activity. In particular, we advise against expending valuable conservation funding resources in attempts to restrict captive breeding and trading activity in non-range states such as the USA.

We recommend that range states secure all existing stockpiles of tiger products, and continue to accumulate and retain them. Similarly, captive tiger populations should be retained as an insurance policy.

We do not recommend re-instating regulated legal trade of tiger products supplied from tiger farming at this time, but suggest that this option be thoroughly investigated, employing the tools of relevant disciplines such as economics. We recommend undertaking a carefully designed consumer survey that assesses relative consumer preferences (measured by willingness to pay) between legal certified farmed products and illegal wild products of unverified origin. We also advise that any feasibility study of legal trade should address the issues of keeping farmed and wild products separate, preventing laundering, channeling a proportion of any profits into wild tiger conservation, and assessing appropriate ways to test the market (e.g. by means of a carefully designed one-off sale).

We urge all concerned tiger conservationists to consider our arguments carefully, and if unclear, to read the main text of this document, where they are laid out in more detail.