LAST week the International Whaling Commission (IWC) met on the Portuguese island of Madeira and agreed that climate change is a threat to whales. A decision on the Danish proposal for Greenland to hunt 10 humpback whales a year was postponed. Australia’s Environment Minister was there and told the meeting that whale-watching is a growing industry worth more than whale hunting. Ian Mott disagrees:
“THE claim, by Australian Environment Minister Peter Garrett, that whales are worth more alive than dead betrays a breathtaking level of economic ignorance and a dangerous penchant for simplistic, “Cargo Cult” panaceas.
Garrett’s message, “That whale-watching is an industry which is growing right around the world and that the potential for communities to generate sustainable livelihood from watching whales – not killing them, but watching them – is significant.”
For central to his claim is an assumption that whale watching and whale harvesting are mutually exclusive activities. As if the entire whale watching industry would disappear if a single humpback whale was hunted for food. Clearly, the 1000 Minke whales already taken each year, for a decade or two, have had no adverse impact on the whale molesting industry. Indeed, the industry has a very obvious inclination to maximise the flow-on effects of the media attention provided by the anti-whaling protesters. If the Japanese were not involved in whaling then the whale watching industry would be much smaller than it is today.
We need to be very careful about lending credibility to people who are incapable of incorporating any sort of “grey” in their consideration of “black and white”. There are between 50,000 and 100,000 humpback whales world wide and more than 1 million Minke’s and any suggestion that the further expansion of the whale watching industry is being constrained by inadequate whale numbers, or infrequent sightings, is pure bollocks. As with all tourist related industries, the limit to growth is defined by the supply of customers willing to pay, not by the number of boats, not by the number of operators, and not by the number of whales. Just double the number of operators and we will soon find out how relevant actual whale numbers really are to the viability of the industry.
In fact, we have the curious circumstance where the key ingredient in the product mix (the whale population) is in robust good health and expanding while a key element of the marketing message is the claimed threat posed to whales and their supposed rarity. It is marketing of a product using messages that are in direct variance with the facts. Funny, I thought we had a Trade Practices Act that specifically outlawed this kind of marketing.
And one really must take a very hard critical look at this $3 billion that is being bandied about as the annual value of the industry. The standard MO of the industry advocate is to throw in the accommodation, meals and all other activities that the whale watcher might engage in during the visit in which they also spent a morning watching whales. So a whole weeks worth of accommodation and entertainment is claimed under the whale watching banner even though it might only occupy a small fraction of the tourists vacation time. If the operators pulled that sort of stunt in a share prospectus they would cop a good long stretch in jail.
But these claims also betray a woeful grasp of business costing on the part of Garrett and the industry. Even if we accept the bogus $3 billion value of the whale watching industry world wide we must still spread that value over the entire world population of whales. They cannot have it both ways. The industry does not watch many Minke Whales at all but they insist that the harvesting of Minke’s poses a threat to their industry. So if this industry is claiming that the survival of every whale on the planet is a prerequisite for the survival of their industry then they must include the capital value of every whale in their costing and pay a commensurate economic rent for their exclusive use of that resource.
That economic rent must be determined from existing markets. And in Japan, whale meat retails at 2060 yen/kg or AU $27/kg. So a typical 7.0 tonne Minke whale might produce 3.7 tonnes of dressed meat at $27,000/tonne or $99,900 each. A 45 tonne Humpback might produce 23 tonnes of dressed meat worth $620,000 each. So if we ignore all the other whale species we can see that the 1 million Minke whales, that the whale watching industry demands exclusive use of, has a capital value of $100 billion. And the 100,000 Humpbacks has a capital value of $62 billion. Add in the other species like Fin whales etc and a total value of the whale resource is easily in the order of $200 billion. And in that light, the $3 billion whale watching industry represents a rate of return of only 1.5% per annum.
Or to put it another way, $3 billion divided by 1.5 million whales amounts to only $2000 per whale. It is akin to taking the whole 7 tonne whale and only using 74kg of it.
But wait, the whale watching industry currently makes no payment for its current shared use of the whale resource and it has given no indication of a willingness to pay any premium for exclusive use. And to be fair, the whale hunting nations have also given no indication of a willingness to pay for the portion that they use. But unlike the whale watchers, they certainly don’t demand exclusive use of the entire resource either.
So where does that leave us? Well, one thing is certain, if the whale watching industry had to pay the full annual cost for each whale that it “uses” based on a normal rate of return on the capital value of the whale then they would very quickly work out exactly how many whales they really needed each year. A modest 5% annual interest on a $620,000 Humpback would amount to $31,000 each year, for each animal they engage with. They could view each whale on its way north and again on its way back south. And they might even spread these costs between other whale watching businesses along the coast who could also view the same whale. Add some standard tracking devices and the entire industry could offer a guarantee of sightings while actually engaging with a very small number of animals. But the price of a viewing would be unlikely to drop below $3,000 a pop.
But no. As is so often the case, the whale watching industry demonstrates how a natural resource that has no value attached to it will ensure the grossest inefficient use of that resource. They seriously believe that they need exclusive use of every whale on the planet to satisfy a market comprised of people who, in all probability, will only pay for the experience once, or maybe twice, in their whole life.
The fact is that neither the whale watching industry or the whale eating industry are operating in a way that will optimise this natural resource. One of the two seeks only to use a sustainable portion of the resource while the other demands exclusive use of the entire resource for which it has no intention, nor capacity to pay for.
Byron Hinterland, NSW, Australia
Notes and Links
MSM mention of Environment Minister at the meeting
USA hijacks IWC in an unprecedented move: Denmark’s humpback proposal postponed to special meeting
Ian Mott is a third generation native forest owner, miller and regenerator from the Byron hinterland. A former Sydney and Brisbane Executive Recruiter with his own agency, his interest in the family property has seen him evolve, over the past decade, into a property rights activist and consultant. He is secretary of the Landholders Institute Inc and has held a number of positions on national, state and regional level policy and planning bodies. Mr Mott has a blog at http://ianmott.blogspot.com/
The photograph shows a reader of this blog, known as David, and Jennifer Marohasy eating whale in a restaurant in Tokyo in September 2008. More here: http://jennifermarohasy.com/blog/2008/09/eating-whale-in-tokyo/