A Terengganu state official earlier was quoted saying that the state government plans to legalize the collection of turtle eggs through the issuance of permit. An article at the BBC says environmentalists are calling the plan as plain crazy. I’m unsure what to think of the plan.
I recognize the fact that a ban more often than not isn’t a solution. A ban usually has an unintended consequence; it creates perverse incentive:
“Banning the sale of eggs will not solve the problem as it could encourage poaching and the high price for the eggs could worsen the problem.
“The next best thing to do is to license the egg sellers to control the number of eggs that can be sold each season. We will look into this seriously.”
In short, the issuance of permit would theoretically lower the prices of the eggs and discourage eggs trading in the black market.
While it’s good to know that the official knows his economics, like what I’ve said earlier, I’m unsure where I stand on this issue.
For the policy to be successful, prices have to be lowered to a point where trading in the black market is unattractive. Assuming constant demand, the only way to do that is to increase supply. The permit system does exactly that; it increases legal supply from zero to some positive figure.
I’d only support the policy in a specific way. That is, the ultimate goal of permit allocation is the survival of the species. Please refer to the graph that I’ve prepared below:
Currently, it’s clear that the turtle population is in between point 0 and A. Given that, I’d support the issuance of permit if the harvest rate — in this case, the number of permits issued — is below the growth rate. I’d disagree to the issuance of permit if the harvest rate is above the growth rate.
The reason behind my opinion is apparent in the graph. Assuming the growth rate is in between 0A and the harvest rate is A, such practice would drive the species into extinction. This is because the harvest rate is greater than the growth rate. In effect, there’s a negative net growth. If the growth rate is in between AB while the harvest rate is A, that would enable the species to recover as well as accommodate for human consumption.
Just to explain the graph further, point 0, A and C are the equilibrium points. 0 of course is extinction point while both A and C are where harvest and growth rates are equal to each other.
I wonder though how large an increase in supply do we need to make black market trading unattractive. If the increase is too big and eventually forces harvest rate to be greater than the growth rate, this would be a foolish policy.