Ending Seal Hunt Makes Economic Sense, Prof Says

July 27, 2009 - News Release

The economic benefits of ending Canada's commercial harp seal hunt far outweigh the costs, especially in light of the European Union's ban today on seal products, says a University of Guelph professor.

Economist John Livernois, who conducted a study on the economics of the seal hunt, said the EU ban will have a drastic effect on the price of seal pelts. In turn, this means that the price tag associated with halting Canada’s commercial seal hunt will also drop dramatically.

“The cost for ending the commercial seal hunt is based strictly on profits, so if profits are falling, the cost of ending the hunt will be much lower,” he said.

Livernois’ study, which was published in the journal Marine Policy in the spring, found that ending the hunt would save Canada a minimum of $6.9 million a year. This is roughly how much money is currently spent by the Coast Guard on icebreaker support ($4.7 million), by the federal and Newfoundland governments for lobbying and other support ($200,000), and by non-governmental organizations for anti-seal hunting campaigns ($2 million).

However, Livernois said the study was conservative — to the tune of nearly $2 million — in its estimates of how much money the federal government is spending on managing the seal hunt due to a lack of data.

By contrast, the study found that the seal hunt, which lasts for about three weeks each March, generates about $6.5 million to $8.7 million a year in profits. But that estimate assumes that the price of seal pelts will remain as strong as it has been for the past decade, Livernois said.

The EU ban likely means that the profits will be cut in half, he said. “So the economic case for ending the hunt is very strong.”

Prices for seal pelts fell from an average of $50 to $33 in 2008, and the anticipation of the EU ban drove prices down even further in 2009 to below $20 per pelt. As a result, many hunters didn’t bother going out this year, he said.

“While no one can be certain what the effect will be in the long run, in the short run, it’s quite clear.”

Livernois’ study says that the most effective way of ending the hunt is with a system of individual transferable quotas. This would involve allotting seal hunters free quotas based on their performance, and then allowing them to hunt up to their quota or to sell or lease their quotas to other hunters, to NGOs or to the federal government.

“Those willing to pay to end the hunt could do so directly to sealers that are willing to sell their right to hunt, thereby ensuring that if the hunt is scaled back or ultimately ended, sealers are fairly compensated,” he said.

Transferable quotas would also improve the efficiency and safety of the seal hunt, the study said. Currently, the fastest hunters reap the greatest rewards, so sealers are driven to take greater risk. This is both dangerous and costly, with the Coast Guard regularly being called on to rescue trapped vessels.

The study’s other findings include:

– The Canadian harvest of harp seals accounts for about two-thirds of the world harvest in recent years;

– Most pelts are exported to Norway (about 60 per cent), followed by Finland (18 per cent), Germany (13 per cent) and China (6 per cent); and

- Seal hunters earned, on average, between $1,929 and $2,130 in 2005 (the best recent season) and between $11 and $221 in 2008.

Prof. Johh Livernois
Department of Economics

For media questions, contact Communications and Public Affairs: Lori Bona Hunt, 519-824-4120 Ext. 53338 lhunt@uoguelph.ca , or Barry Gunn at Ext. 56982, bagunn@uoguelph.ca .

University of Guelph
50 Stone Road East
Guelph, Ontario, N1G 2W1