AN ECONOMIC ASSESSMENT OF WILDLIFE PREDATION IN BRITISH COLUMBIA MAIN REPORT

Transcription

1 AN ECONOMIC ASSESSMENT OF WILDLIFE PREDATION IN BRITISH COLUMBIA MAIN REPORT November 2011

2 AN ECONOMIC ASSESSMENT OF WILDLIFE PREDATION IN BRITISH COLUMBIA MAIN REPORT Prepared for: B.C. Agricultural Research and Development Corporation Wild Predator Loss Prevention Pilot Project Prepared by: Pacific Analytics Inc. P.O. Box 5103, Victoria, British Columbia CANADA V8R 6N3 Tel/Fax: (250) and Risk Reduction Strategies Vancouver St. Victoria BC V8V3V2 Tel: (250)

3 Acknowledgements B.C. Agricultural Research & Development Corporation on behalf of the Wild Predator Loss Prevention Pilot Project, wishes to acknowledge the financial assistance of Agriculture and Agri-Food Canada, the B.C. Ministry of Agriculture, and the Investment Agriculture Foundation of B.C. for making this document possible. Agriculture and Agri Food Canada, the BC Ministry of Agriculture and the Investment Agriculture Foundation of BC, are pleased to participate in the production of this document. We are committed to working with our partners to address issues of importance to the agriculture and agri food industry in British Columbia. Opinions expressed in this document are those of the authors, and not necessarily those of Agriculture and Agri Food Canada, the BC Ministry of Agriculture or the Investment Agriculture Foundation. The authors wish to express our appreciation as well as the assistance and understanding of the many individuals involved in this project, with particular gratitude to Drew Carmichael, the Project Manager. When attempting to undertake an economic analysis without concrete data, it is helpful when the Project Manager understands the limitations of the findings and is able to convey that to his colleagues.

4 TABLE OF CONTENTS Executive Summary... i Background & Study Objectives... 1 BC PREDATOR MANAGEMENT HISTORY... 1 THE PROGRAM... 2 THE PROGRAM... 2 THE OBJECTIVES OF THIS REPORT... 3 Predation in Other Jurisdictions... 4 CANADA WILD PREDATION PROGRAMS... 4 US WILD PREDATION PROGRAMS... 6 The Economics of Cattle Predation... 9 THE BEEF CATTLE INDUSTRY... 9 TOTAL CATTLE PREDATION IN BC THE COST OF CATTLE PREDATION The Costs of Cattle Predation to Ranchers The Downstream Impacts of Cattle Predation Upstream Economic Impacts of Cattle Predation Total Economic Impacts of Cattle Predation Economic Impacts of Injury/Reduced Weaning Weights Economic Impact of Best Management Practices The Economics of Sheep Predation THE SHEEP INDUSTRY TOTAL SHEEP PREDATION IN BC... 30

5 THE COST OF SHEEP PREDATION Cost effectiveness of WPLP pilot project PILOT PROJECT FUNDING PROGRAM COST EFFECTIVENESS A Note on The Benefits of Predators ECONOMIC BENEFITS Benefits to Wilderness Businesses Other Benefits ECOLOGICAL BENEFITS SOCIAL BENEFITS Concluding Remarks A Note on Data APPENDIX A: Literature Review... 1A1 Appendix B: An Input-Output Primer... B1 Appendix C: Definitions... C1 LIST OF EXHIBITS Figure 1: Beef Cattle Industry in BC, Figure 2: Cattle of Type, Figure 3: Cattle Ranches by Census Agricultural Region, Figure 4: Verified Kills and Compensation Paid in BC Figure 5: Estimates of Total Cattle Predation in BC Figure 6: Cattle Prices in BC (2010)... 15

6 Figure 7: Estimates of Total Cost of Predation in BC (2010) Figure 8: Attenuated Input Matrices Figure 9: Economic Impacts of Predation on the Ranching Sector (2010) Figure 10: Economic Impacts of Predation on the Slaughtering Sector (2010) Figure 11: Total Economic Impacts from Cattle Predation (2010) Figure 12: Economic Impacts Per Predated Cattle (2010) Figure 13: Economic Impacts per cwt of Predated Cattle (2010) Figure 14: Sheep Production in BC Figure 15: Sheep by Type, Figure 16: Total Sheep Ranches, Figure 17: Estimated Sheep Predation in BC (2010) Figure 18: Estimated Cost of Sheep Predation in BC (2010) Figure 19: Economic Impacts of Sheep Predation in BC (2010) Figure 20: Economic Impacts of Sheep Slaughtering in BC (2010) Figure 21: Total Economic Impacts of Sheep Predation in BC (2010) Figure 22: Program Spending... 35

7 E X E C U T I V E S U M M A R Y The principal aim of this Report is to provide an assessment of the costs of predation to the cattle ranching and sheep farming sectors in British Columbia and, in addition, to outline briefly other benefits and costs economic, ecological and social - of predators to businesses and citizens of British Columbia. A secondary aim is to provide a concise documentation of predator-control programs in British Columbia and in other jurisdiction in North America. The essential issue facing the assessment is the lack of any credible information on predation in British Columbia. The few partial surveys and anecdotal evidence relating to predation did not provide sufficient information for the Study Team to identify accurately the costs of predation to businesses. In place of having accurate and credible data on predation, it was necessary to make a series of reasonable assumptions on predation levels and then, based on those levels, assess the costs. The reader should be aware of two important elements which impact the estimated costs: First, if predation levels are higher (lower) than the estimates used in this study, the estimated costs would be equally higher (lower), and thus the reader can measure the difference in total costs based on any expected difference in actual predation levels. Second, the mandate of the Study is to determine the economic costs of predation in the year It has been noted by many that the prices of cattle and sheep in 2011 are significantly higher than in 2010, and consequently, if estimated predation levels in 2011 are the same as in 2010, then the estimated economic costs would be that much higher. In a nutshell, since cattle and sheep prices are some 25%-35% higher this year, it is possible that the costs of predation in 2011 are 25%-35% higher than estimated in this Study. The following outlines the essential findings of this assessment: The Cattle Ranching Sector The assumed level of cattle predation in 2010 for this Study is 6,000, 4,100 calves and 1,900 mature cattle; Based on average prices of $1,000 for mature cattle and $600 for calves, the estimated cost of predation to ranchers is estimated at just over $4 million in revenues, of which the Cariboo experiences the bulk of the costs, estimated at some $2.3 million in lost revenues; This loss in revenues is equivalent to a direct loss of $2.3 million in Gross Domestic Product (GDP) and results in a loss of 35 jobs and a reduction in incomes of $730,000; P a c i f i c A n a l y t i c s I n c p a g e i

8 In addition to the costs of predation to ranchers, predation also represents a cost to companies that provide goods and services to ranchers since, with fewer cattle or sheep, the demand by ranchers for those goods and services are less. The cost of these downstream impacts (also known as indirect impacts or spin-off impacts) is estimated at $2.1 million in GDP, $580,000 in labour incomes, and 18 jobs; Similarly, the loss in wages will translate into a reduction in consumer spending, and after accounting for taxes, the loss is estimated at $670,000 in GDP, $390,000 in labour incomes, and another 7 jobs; An additional loss to the economy stems from the reduction in slaughtering activities as a result of the reduced number of cattle available for slaughter. In this case, the loss to the economy is estimated at $5.5 million in GDP, $4.2 million in labour income, and some 99 jobs; Exec Table 1: Total Economic Impacts from Cattle Predation (2010) Revenues $14.35 Direct Indirect Induced TOTAL Output $14.35 $6.64 $2.50 $23.50 GDP $5.07 $2.48 $1.58 $9.12 Material Inputs $9.30 $4.16 $0.92 $14.36 Labour Income $3.52 $1.45 $0.93 $5.90 Wages and Salaries $2.51 $1.28 $0.64 $4.42 Mixed Income $0.24 $0.05 $0.22 $0.49 SLI $0.77 $0.12 $0.08 $0.99 Employment Employment (FTE) Total Taxes $0.46 $0.12 $0.45 $1.05 Total Federal Taxes $0.31 $0.03 $0.25 $0.58 Total Indirect Taxes $0.01 $0.03 $0.08 $0.12 Personal Income Taxes $0.28 $0.00 $0.12 $0.40 Corp. Income Taxes $0.03 $0.00 $0.04 $0.06 Total Provincial Taxes $0.15 $0.08 $0.22 $0.45 Total Indirect Taxes $0.05 $0.08 $0.15 $0.30 Personal Income Taxes $0.09 $0.00 $0.04 $0.13 Corp. Income Taxes $0.01 $0.00 $0.02 $0.03 P a c i f i c A n a l y t i c s I n c p a g e ii

9 Exec Table 1 displays the total economic impacts resulting from a total predation of 6,000 cattle. Overall, GDP falls by $9.1 million, labour income by $5.9 million and employment by 160 jobs; The estimated impacts were calculated on a per cattle basis. Based on a cattle predation of 6,000, the estimated cost of predating a single animal is estimated at $1,520 when all impacts are accounted for; In addition to these estimated impacts, the presence of predators often results in injury and/or reduced weaning rates for calves. While it was not possible to estimate the cost to the BC economy of the losses due to lower weaning rates and/or injury, based on weight criteria, the cost is estimated at approximately $190 in GDP per cwt., labour income of $123, and employment of.003 jobs; Finally, the presence of predators influences the level and intensity of best management practices (BMPs) that ranchers employ. To determine the cost of these BMPs was not possible in this Study, but for many ranchers these BMP are substantive. Nevertheless, it is unlikely that the presence of an additional predator in a location would seriously affect the level of BMPs employed by the rancher. Rather, these are BMPs that most ranchers employ on a regular basis, regardless of how many predators are in the location. The Sheep Farming Sector The assumed level of sheep predation used for the Study is 2,211, of which 333 are mature sheep and 1,879 are lambs; The estimated loss in sheep farming revenues based on this predation level is $365,000. This translates into an economic loss of $207,000 in GDP, $66,000 in loss incomes and 3 jobs; When including the economic losses due to the reduction in supplier activity and the loss in personal consumption due to lower wages and salaries, GDP is reduced by $345,000, labour income by $150,000 and jobs by 5; As in the cattle ranching sector, sheep predation reduces the level of slaughtering activity in the province. In total, GDP is reduced by $880,000, labour income by $392,000 and employment by 5 jobs; After accounting for the additional impacts due to a reduction in sheep slaughtering, Exec Table 2 outlines the total impacts on the economy of sheep predation. In total, GDP is reduced by $1.2 million, incomes by $545,000 and employment by 19 jobs; P a c i f i c A n a l y t i c s I n c p a g e i i i

10 Exec Table 2: Total Costs of Sheep Predation (2010) Direct Indirect Induced TOTAL Revenues $1,296,895 Output $1,296,895 $662,436 $338,320 $2,297,651 GDP $734,319 $279,781 $214,356 $1,228,456 Material Inputs $562,576 $382,655 $123,965 $1,069,196 Labour Income $234,586 $185,086 $125,686 $545,789 Wages and Salaries $152,373 $168,299 $86,517 $407,190 Mixed Income $74,465 $0 $28,409 $102,873 SLI $8,178 $16,787 $10,761 $35,726 Employment Employment (FTE) Total Taxes $20,661 $18,509 $61,121 $100,721 Total Federal Taxes $11,191 $3,874 $32,713 $47,778 Total Indirect Taxes $2,583 $3,874 $10,761 $17,217 Personal Income Taxes $0 $0 $16,787 $16,787 Corp. Income Taxes $8,609 $0 $5,165 $13,774 Total Provincial Taxes $9,470 $14,635 $28,409 $52,943 Total Indirect Taxes $6,026 $14,635 $20,661 $41,322 Personal Income Taxes $0 $0 $6,026 $6,026 Corp. Income Taxes $3,443 $0 $2,152 $5,596 Cost-Effectiveness of the WPLP Pilot Project in 2010 Total program costs are estimated at $411,500; Based on an economic cost of $1,520 per animal, the crossover point for the WPLP program is 271 cattle ($411,500/$1,520). That is, if the program saved more than 271 cattle, the program is cost effective; The program was responsible for the removal of 134 predators in 2010; There are no data to indicate how many cattle were saved from predation due to these removals, but if each removed predator would have killed two or more animals, the program is cost effective. P a c i f i c A n a l y t i c s I n c p a g e iv

11 B A C K G R O U N D & S T U D Y O B J E C T I V E S BC PREDATOR MAN AGEMENT HISTO RY Since the first sheep and cattle ranches were established in British Columbia, the issue of predator predation has been a concern to the ranching community. 1 In the early years of the Province, the interface between wildlife and ranches was manageable, in part because of the relative abundance of wild lands where predators could exist far from the ranching communities, and partly because there was a public allowance for ranchers to deal with the issue as they saw fit. As the economy grew, conflict between domestic animals and wild predators also grew, with ranchers witnessing increasing losses to livestock herds by predators. Predators also reduced wild game populations, which adversely affected some hunters and, in addition, the expanding population increased the chance of direct contact between humans and wild predators, generating a safety risk. At the same time as representing a difficulty socially and economically for the Province, wild predators also play an important ecological role throughout the province, and their presence in British Columbia is valuable to many people. Indeed, virtually all residents of BC value the protection and expansion of natural ecosystems, one in which wild predators exist. Wild predators play an important role in the collective ecological food-chain relationship within the natural world. They contribute to overall ecosystem health through the pressure they place on game populations and reduction of their density. This realization has resulted in recent efforts to reintroduce predators, such as wolves, into habitats in Europe and the United States where they had been earlier removed. In addition, many First Nations communities place significant cultural value on the symbolism and interaction with wild predators. The British Columbia sheep and cattle industries traditionally have endorsed wild predator control, owing to the killing of their livestock by predators. However, the sheep and cattle industries also have received some indirect value from wild predators because of their role in the natural selection process within the ecosystem. Benefits include reduced grazing pressure by big game due to predator 1 Sheep producers tend to label themselves farmers and their lands as sheep farms. Rather than having to constantly refer to cattle ranches and sheep farms we have chosen to use the far simpler term ranches to refer to both cattle and sheep operations. P a c i f i c A n a l y t i c s I n c p a g e 1

12 kills, undesirable interactions such as collisions between vehicles and game animals, and reduced property damage that grazing game can produce. These benefits occur especially at the interface between wilderness and forest habitat and domesticated ranching. Historically, the most common approach to wild predator control has been to remove them from the ecosystem. However, outright extermination has become inconsistent with public sentiment and present environmental norms and the general public is now sensitized to the issue of culling wild animals for economic reasons. Because the sheep and cattle industries play an important economic and cultural role within the province, a no-control alternative to wild predators has become inconsistent with ensuring a continued place for the sheep and cattle industries in BC. Attempts have been made to balance the ranching community s need to manage the threat from wild predators while enabling the wild predator population to maintain its place at this interface. THE PROG RAM The British Columbia Wild Predator Loss, Control and Compensation Program (WPLCCP) for Cattle pilot ran from 2003 to This program sought to reduce the impacts of wild predators on cattle operations through a combination of improved management, targeted problem animal control, and compensation for unavoidable losses. Based on the WPLCCP Pilot Final Report prepared by the BC Cattlemen s Association, the program was well-received by the industry, and seen as a success. THE PROG RAM The complementary pilot to the WPLCCP is the present Wild Predator Loss Prevention and Mitigation Pilot Project (WPLP), which was initiated in August 2009 and is proposed to end December The goal of this pilot is similar to the first WPLCCP, which is to reduce the economic impact of wild predators on the cattle and sheep industries in BC. However, the focus is different and concentrates on development of prevention measures; the investigation and verification of predator harassment, injuries, or killing of livestock; and the implementation of targeted predator control strategies. Throughout the Pilot Project, various delivery models are being tested. The project is delivered by the B.C. Agricultural Research and Development Corporation (ARDCorp). A Project Manager works closely with, and seeks priorities and direction from, a steering committee. The Steering Committee is made up of the Chief Operating Officer (C.O.O.) of ARDCorp, 2 representatives from the B.C. Sheep Producers, 2 representatives from the B.C. Cattlemen s Association (BCCA), and P a c i f i c A n a l y t i c s I n c p a g e 2

13 representatives from the Ministry of Environment and the Ministry of Agriculture and Lands. ARDCorp and the BCCA have negotiated an agreement for the delivery of contracted field services by Wildlife Specialists (WS). The Wildlife Specialists deliver verification and mitigation services to livestock producers on behalf of the Pilot Project and the Predator Loss Compensation Program, administered by the BCCA for cattle losses. THE OBJECTIVES OF THI S REPORT Related to the Pilot Project, there was interest in having a socio-economic assessment of predation, with the intent of determining the economic costs and benefits of predation on both the Sheep sector and the Cattle sector. In order to achieve these objectives, this Report separates the deliverables into two main socio-economic components: First is a socio-economic evaluation (the estimation of direct, indirect and induced impacts) of the costs of predation. The costs are varied, and it is understood by all stakeholders that many of these costs cannot be estimated with any precision. Accordingly, our approach, where necessary, will focus on understanding the general costs that are incurred. The assumptions used generally are linear; accordingly if an assumption is considered, say, 10% too low, then the total impacts would be 10% too low. In this manner, the economic costs outlined in this Report can be easily adjusted to conform to different sets of assumptions, if necessary. The second component relates to the socio-economic benefits of predators to the economy and to society in general. These benefits generally are less concrete, and it is understood by stakeholders that precise estimates will not emerge from our analysis. Nevertheless, the outcome of our assessment provides stakeholders with a clearer understanding of the benefits of predators and the (non-quantified) value that predators hold in the eyes of the public. Most of this analysis is based on our literature review and most of the literature reviewed dealt with studies examining predator costs and benefits in other jurisdictions, in both Canada and the US. As such, the assessment of benefits are generalised to what may be expected in British Columbia rather than what actually is. The following section discusses this literature review. P a c i f i c A n a l y t i c s I n c p a g e 3

14 P R E D A T I O N I N O T H E R J U R I S D I C T I O N S A review of wild predation programs in other Canadian and US jurisdictions helps to inform possible strategies that British Columbia might consider in addressing livestock predation. Jurisdictions included a sample of both Canada provinces and US states, with a concentration on those with large predator habitats, significant livestock industries, and active wild predator programs. Provinces in the review included Ontario, Saskatchewan, Manitoba, and Alberta. States included Idaho, Montana, Washington, Colorado, and Wyoming. The Literature Review involved scanning relevant published predation literature and conducting telephone interviews with government officials familiar with wild predation within their jurisdictions. The annexed review includes a summary of jurisdictional findings, primarily gleaned from the literature, and a SWOT (strength, weaknesses, opportunities, threats) summary in matrix form, primarily from the phone interviews. Provincial and state literature review summaries and SWOT analyses are located in Appendix A. Findings are summarized below. C ANADA WILD PRE D ATION PROGRAMS Canada and the US address similar large wild predator issues in their programming, and primarily focus on wolf, coyote, grizzly, brown/black bear, and cougar. Unlike the US, the Canadian provinces have considerable autonomy over wild predator management. The wildlife/predator ecological balance has not been as affected as by US federal programs such as de-population and re-population of the grey wolf. In general, predation control is not as impacted by large and well-organized special interest groups. Wilderness and the preservation of wildlife, including predators, are very much symbolic of Canada and the Canadian public. Broadly speaking, predators remain removed from the Canadian public and reside in the sparsely populated areas (e.g., the north) within the provinces compared to the US. However, predator interaction with sheep and cattle in provinces is considerable. Anecdotal evidence and limited research shows that predator population trends appear to be increasing across Canada. Wild predation management in Canada differs considerably between provinces. The jurisdictional Literature Review and interviews indicate that the province with the most robust predation management is Saskatchewan. Factors may include: large agricultural community with an effective provincial lobby; program execution under the Saskatchewan Crop Insurance Corporation, where livestock is considered a crop; small animal special-interest groups; and a well-funded province, due to its P a c i f i c A n a l y t i c s I n c p a g e 4

15 mineral resource base. It is noteworthy that both Saskatchewan and Ontario (a new program) have based their wild predation policies on Manitoba. All three program compensate for multiple classes of livestock, including exotics, and for numerous predators, both large and small, including coyote. The provinces vary in the means by which removal is accomplished, including Ministry field staff, specialised removal experts, hunter/trapper association, etc. Characteristic of all three programs is less emphasis on predator prevention and livestock producer education, and more emphasis on funds available for producer compensation. Alberta s program is more similar to that of British Columbia, including fewer predators listed in the program and more rigorous livestock eligibility for compensation. Alberta is largely an agricultural culture with a large livestock base that effectively lobbies for favourable wild predation legislation. Alberta also is a resource rich province, with adequate funding available for wild predation programming. British Columbia is unique in Canada due to vast mountainous terrain and extensive crown land, while containing a comparatively small livestock production base. The predator population in British Columbia appear to be thriving. In addition, the populated southern British Columbia is urban or peri-urban, and many residents have little agricultural interaction. Public sentiment is toward environmental sustainability, assuring wildlife habitat, and maintaining British Columbia as a unique outdoor destination province. The province does not have the level of program funding of some prairie provinces. Wild predation management strives for a balance between ecological considerations and livestock industry sustainability on limited funds. The present program also seeks to address the predation issue in a multipronged approach: best-management practices (i.e. prevention), producer education, predator removal, and livestock compensation. Possible strengths of programs in other jurisdictions that might be considered in British Columbia include: Consistent, consolidated funding source to minimise conflicting predator program objectives from multiple funders; Eligibility under provincial Crop Insurance mechanism, with livestock being considered an eligible crop, for which compensation can be received; Greater public messaging of the positive role that livestock production plays in British Columbia s ecological and wildlife balance; P a c i f i c A n a l y t i c s I n c p a g e 5

16 Greater awareness by livestock owners of value that wild predators play by co-existing near livestock herds, without an increase in predation; Increased education to livestock producers as to effective removal of only problem predators; Use of technology by livestock owners to verify kills without required inspection by verifiers; Trained local groups or individuals trained for verification and/or removal to reduce predation response costs; and Better coordination between government (i.e. COS) and private (i.e. Wildlife Control Specialists) to focus their responses on specific predators. US WILD PREDATI O N PROGRAMS Wild predation controls in the US are similar to those in Canada but also differ in several respects. There is considerable federal funding support for individual state wildlife services to address predation issues. Support is primarily financial and administrative and falls within the Fish and Wildlife Services (FWS) under the Animal and Plant Health Inspection Service (APHIS) of the US Department of Agriculture (USDA). Most states addressed in the Literature Review report funding of wild predation programs at approximately 50% federal funding and 50% state or locally generated funds. The states that experience the greatest issue with wild predation are those in the northern Rocky Mountains, specifically Montana, Idaho, and Wyoming. US states address similar large predators as Canadian provinces, including coyote, wolf, grizzly bear, brown/black bear, and cougar (i.e. mountain lion), though both the numbers and the dynamics differ. The most visible and politically-sensitive predator has been the grey wolf. For example, the 1960s-70s depopulation programs of wolves and subsequent reintroduction in the 1990s has caused disruption in the ecological balance. Ungulate populations were impacted, having a direct or indirect impact on livestock. In addition, the listing of the grey wolf on the US Federal Endangered Species Act (ESA) reduced the tools available for control of the wolf population, as numbers increased rapidly following reintroductions. This has been further complicated by US legal wrangling and a revolving door of listing, de-listing, and re-listing under the ESA of the grey wolf, primarily based on politics rather than science. Most recently, in May 2011, the present US administration federally de-listed the grey wolf. An P a c i f i c A n a l y t i c s I n c p a g e 6

17 indication of the convoluted and sometimes conflicting nature of federal vs. state wild predation statues is that Alaska s wolf population has not been under the Endangered Species Act. In addition, Wyoming is the only state whose wolf population remains under the ESA because, at this writing, its State wolf conservation program is not yet approved federally. Status of the grey wolf is indicative of the political pressures that affect wild predation in the US. Numerous NGOs and human rights groups have substantial funding and strong political lobbies and oppose the interests, and sometimes even the presence, of livestock producers. Groups such as Defenders of Wildlife and the Sierra Club seek federal protection without individual state scrutiny of the impact of wolf, bear, or eagle population numbers on sheep flocks and cattle herds. Even if controls are allowed, pressure is heavy to use only non-lethal methods of predator control. Often these control methods are expensive, time-consuming, and temporary. In addition, over-emphasis in the grey wolf status diminishes the issues of other predators, such as coyotes, which are largely considered nuisance predators, with little restriction on their removal. The coyote predation issue gains little media attention but clearly impacts a greater number of livestock producers in more states than predation from wolves or other large predators. The repopulation of wolves in the northern Rocky states of Idaho, Montana, and Wyoming has had a spill-over effect into other states. The Literature Review and interviews indicate that states such as Washington and Colorado are experiencing increase in wolf populations and livestock conflict, without a clear policy to deal with resulting predator - livestock interaction. Colorado reports minor predation issues and also is unique regarding predation, because the APHIS / FWS National Wildlife Services Research Center is located near Denver. The Wildlife Research Center carries out research on various aspects of wildlife management, such as impacts of predator movement, improved wild predation prevention and mitigation tools, and an economic research project. The US state with the greatest funding and programming to address wild predation is Wyoming. This is partially due to the high-profile wolf re-introduction into Yellowstone Park, the large population of sheep and cattle in the state, and a strong livestock lobby. Wyoming has a robust predation mitigation, prevention, and removal program, including the use of aircraft. The state with the lowest funding and programming to address wild predation is Washington. Factors identified during the phone interview were: large urban population, special interest groups, relatively small livestock community, marginal Rocky Mountain terrain for wild P a c i f i c A n a l y t i c s I n c p a g e 7

18 predator habitat, and low wild predator funding priority by the Washington state legislature. Because of depleted funding, stakeholder agencies have experienced cooperation with each other toward finding low-cost predator management tools. In summary, possible strengths of the US wild predator program might be: Considerable funding from the Federal government; Federal administrative support to State programs, while retaining state management; Devolution of state predator management to local / county level; Federally funded research into predator and ungulate management; Strong stakeholder cooperation to address predator issues, due to reduced funding; Strong base of data from which to develop and measure wild predator impact and program effectiveness; Visible agricultural lobby to press for favourable predation management legislation. P a c i f i c A n a l y t i c s I n c p a g e 8

19 T H E E C O N O M I C S O F C A T T L E P R E D A T I O N THE BEEF CATTLE INDUST RY The beef cattle industry in British Columbia has experienced quite significant difficulties over the last number of years, in part due to the loss of markets stemming from the mad cow outbreak beginning in May, 2003 and in part due to increasing costs of production that have made ranching ever more marginal in many parts of British Columbia. The effect of this deteriorating financial environment has been a steady decline in beef production since the peak in Figure 1 displays a time series from 2000 to 2010 of total cattle numbers held by beef operations in the province plus a times series of the number of beef producing operations in the province for the period 2000 to Figure 1: Beef Cattle Industry in BC, Beef Cattle Number of Ranches 900, , , , , , , , , Year 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Source: Statistics Canada The number of cattle (as of July 1) in the province fell from a high of 805,000 in 2004 to 683,000 in 2006 (the year of the last Agricultural Census) and to a total in 2010 of 525,000. At the same time, the number of reported operating ranches fell from just P a c i f i c A n a l y t i c s I n c p a g e 9

20 over 3,300 in 2000 to 2,820 in 2006 (the last Agricultural Census year) to 2,515 in 2009, the last year of available data. 2 Figure 2 displays the number of cattle by type for the year Of the estimated 524,700 beef cattle in the province, 204,000 were calves with the remaining 320,700 mature animals. Figure 2: Cattle of Type, 2010 TOTAL CATTLE - 524,700 BULLS, 12,900 CALVES, 204,000 BEEF COWS, 199,000 STEERS, 50,600 BEEF HEIFERS, 58,200 Source: Statistics Canada The latest data identifying the number of cattle and the number of ranches by location within the province are from the 2006 Agriculture Census. The Census data provides detailed regional information on many aspects of cattle ranching, but there are no recent data from Statistics Canada to inform us as to how the changes since 2006 have affected each region. Figure 3 below identifies the number of cattle ranches by Census Agricultural Region (CAR) for the year From Figure 1 on page 9 we see that Statistics Canada has estimated that the number of reported cattle operations fell roughly 10% between 2006 and 2009 (from 2,820 in 2006 to 2,515 in 2009). Given the fall in cattle numbers between 2009 and 2010, it is likely that the number reported ranches have continued to fall. 2 The time series refers to reporting ranches ranches reporting their information to Statistics Canada - rather than total ranches in the Province and thus the 2006 number is substantively different form the 2006 Census number. This reporting difference is NOT reflected in the number of cattle. 3 The Statistics Canada time series of data differs from the Census data because the Census data was for a specific day in May, 2006, while the time series data is an estimate for operating ranches over the entire year. P a c i f i c A n a l y t i c s I n c p a g e 10

21 If the number of actual cattle ranches fell by the same percentage, then the approximate number of ranches in 2010 is 3,700. There is no data to suggest how this difference is distributed across regions. Figure 3: Cattle Ranches by Census Agricultural Region, 2006 Nechako 411 North Coast 25 TOTAL RANCHES - 4,177 Peace River 544 Cariboo 746 Thompson- Okanagan 1,092 Vancouver Island-Coast 353 Lower Mainland- Southwest 644 Kootenay 362 Source: Statistics Canada TOTAL CATT LE PREDATION IN BC While anecdotal evidence suggests that predation 4 represents a significant cost to British Columbia ranchers, there is little concrete data to back up those claims. Indeed, while in many other jurisdictions in North America with substantive predator populations (e.g., Wyoming 5 ) where there has been significant effort to track and manage predator issues, in British Columbia there is not even a reliable estimate of the annual number of predated livestock, let alone the cost that such predation represents to the economy. As a first step in assessing the costs of predation in British Columbia, it is necessary to calculate a reasonably reliable estimate of livestock predation in the province. There are data available from the WPLCCP for the number of verified kills (see Figure 4 Predators are mainly wolves and coyotes and to some extent bears and to a lesser extent cougars. 5 Wyoming, for instance, has undertaken an annual survey of predation by type of predator and type of predated animal since 1965, representing a time series spanning some 45 years. This has enabled the Department of Environment in Wyoming to track predation trends and to assist them in assessing the economic efficiency and viability of their anti-predation programs. It also has enabled them to focus on specific regions that are high in predation. While the Department does not claim it is solely responsible for the decline in predation over the last half decade, it nevertheless is a fact that predation of sheep in the State has fallen from roughly 120,000 in the mid 1960s to less than 40,000 in recent years. P a c i f i c A n a l y t i c s I n c p a g e 11

22 4 below), but these data only refer to predator kills that have been audited by program personnel; they do not represent a reliable estimate of the total kills. Anecdotally, these verified kills are believed to be in the neighbourhood of 15% of total predation (using that figure, a verified kill total of 143 in 2010 translates into a total predation estimate of 143/.15 or just under 1,000). As discussed below, the estimates calculated in this Report suggest that this 15% figure is likely too high that is, actual predation is far higher. Figure 4: Verified Kills and Compensation Paid in BC Verified Kills Compensation Paid $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Source: ARDCorp With the exception of the data on verified kills, there is only one other estimate of predation in BC. In 2010, the British Columbia Cattlemen s Association (BCCA) undertook a survey of its members that included questions on predation. Unfortunately, the survey has a number of drawbacks. First, the number of returns 225 represents barely 5% of all cattle ranchers in the province and therefore the results are not particularly robust. Second, the survey was not randomised. As a consequence, we do not know if ranchers with greater (lower) predation issues were more likely to respond or if larger (smaller) ranches are counted more. More importantly, the results were not benchmarked to all cattle producers in the province to provide a total for the province. 6 Rather the survey results were simply summed to give predation estimates. 6 In order to provide a statistically valid estimate of predation it would be necessary at the very minimum to have a random sample of ranches stratified by size of ranch and relatively small region. A statistically valid estimate would collect a 10% - 20% random sample for at least three P a c i f i c A n a l y t i c s I n c p a g e 12

23 Nevertheless, the survey represents the only available data on cattle predation, and therefore our task is to use that survey data to make an informed estimate of predation of cattle, although we caution that the estimate is more an assessment of magnitude than a value of actual predation. Several possible methods for estimating total predation in the Province are presented. 1. Based on survey returns of 225, the BCCA found that predation reached 549 cattle in 2010, of which 104 were mature cattle and the remaining 445 were calves. This suggests that the average respondent had a loss of 2.44 cattle (0.462 mature cattle and calves per ranch). If (and only if) the 225 survey returns represent a random sample of cattle ranchers in the Province, 7 this would suggest, based on our estimated 3,700 total ranches in the Province in 2010, an estimated 9,028 predated cattle (1,710 mature cattle and 7,318 calves). These results are displayed on the last row of Figure 5 below. 2. Unpublished data from the BCAA survey also provides results by the 18 BCCA Regional Associations. These association boundaries do not match the Census Agricultural Regions (CAR) as defined by Statistics Canada, but it was possible to assign most Association results to their appropriate CAR. These CARs are shown in Figure 3 above. If (and only if) the survey responses for each individual CAR are a random sample of ranches in the particular CAR, then it is possible to calculate the estimated number of predated animals using the regional data. The estimated predation for each CAR is displayed in the last column, with a sum for the province of 6,008 predated cattle (1,114 mature cattle and 4,894 calves). 3. One additional calculation can be made to estimate total predation. In the BCCA survey, 117 respondents replied that they had contacted the Wild Predator Program while the Program had some 310 calls in total in Therefore, if (and only if) the survey respondents are a random sample of all ranches experiencing predation, then the total estimated predation would be ranch sizes (Statistics Canada in its Agriculture Census identifies 9 different ranch sizes) for a jurisdiction area similar to, say, a Census Consolidated Subdivision (e.g., Central Kootenay B, Thompson-Nicola (Rivers and the Peaks) or Cariboo A). The resulting predation data would not only provide an estimate of total provincial predation but would also provide detailed locational information, much as the Wyoming data. 7 Unlikely, since one will notice that there are only 4 survey returns for the entire Lower Mainland and Island. One should also note that the relatively small sample (roughly 5%) is substantially lower than the Statistics Canada sampling of 20% for Census data. P a c i f i c A n a l y t i c s I n c p a g e 13

24 roughly 1,500 (equal to (310/117)*549, where the 549 equals total survey predation). Clearly this is an estimate far lower than the calculated predation estimates highlighted in Figure 5. Figure 5: Estimates of Total Cattle Predation in BC Census Agric. Region Regional Name # of Ranches # of Surveys Mature Stock Lost Calves Lost Total Lost Mature Loss per Survey Calf Loss per Survey Total Loss per Survey Est. Predation 1 & 2 3 Lower Main.- Island Thompson- Okanagan Kootenay ,171 5 Cariboo ,373 6 & 7 North Coast- Nechako Peace River ,216 6,008 TOTAL ,028 It is not really possible to say which estimate is closer to the actual (unknown) predation in the Province. None of the three estimates presented here are statistically valid and indeed, the survey suggests that there was no predation in the Lower Mainland Island region when this is known to be false. That alone could make the regionally-determined estimate of 6,783 too low. At the same time, this estimate might be considerably lower, if one uses the verified kills data. The upshot of this discussion is that one cannot make a definitive statement of total predation in the Province. For the purposes of this Report, we propose to use an estimate of 6,000 or approximately 1% of total stock. 8 The reader should understand, however, that this estimate is easily 20% higher or lower than the (unknown) true value, and therefore the financial results calculated later in this Report need to be considered in that light. 8 In Wyoming, the predation rate has been calculated at 0.8%. P a c i f i c A n a l y t i c s I n c p a g e 14

25 THE COST OF CATT L E PREDATION The Costs of Cattle Predation to Ranchers Given this coarse estimate of 6,000 predated cattle (say, 1,100 mature cattle and 4,900 calves), one can calculate the cost to the economy due to this loss of cattle. It is difficult to determine the exact price of lost cattle during 2010 for a number of reasons. First, does one use the average selling price over the year or is a better measure the selling price in the summer/early autumn when most calves would have gone to market? Second, how do we define the average selling price in 2010? The prices for steers differs from that of heifers (steers being roughly 5% - 10% higher) and the selling price per 100 weight decreases as the size of the animal increases and we have no indication of predated cattle weight. From data on the BC Livestock Producers website, 9 cattle prices in BC in 2010 ranged from roughly $100 -$135 per cwt. depending on the size of the animal. Figure 6 below highlights prices for two periods June 9 and September 21, 2010 for various weight classes. The average calf weight is assumed to be approximately 500 lbs. at weaning (8 ½ months). 10 From the data in Figure 6, the average 500 lb. calf (assumed to be in the weight class) was selling for approximately $600. Full-grown cattle, in contrast, have approximate selling weights on around 1,000-1,200 lbs. 11 and accordingly, we will assume an average selling price per mature animal of $1, Figure 6: Cattle Prices in BC (2010) Weight Steers Heifers Sep-21 Jun-09 Sep-21 Jun-09 Prices Value per Animal Prices Value per Animal $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Ibid 12 Prices have increased considerably since mid 2010, rising approximately 25% for cattle between June 2010 and September As such, the costs of predation in 2011 (assuming the same level of predation) would also be much higher, but the mandate of this report is to examine the economic costs in P a c i f i c A n a l y t i c s I n c p a g e 15

26 $ $ $ $ $ $ $ $ $ $ $94.65 $ $ $95.13 $ $98.68 $82.73 $ $97.76 $90.29 $ $89.98 $78.10 $ Butcher Bulls $65.50 $70.00 D1 D2 Cows $54.00 $57.50 Source: BC Livestock Producers Figure 7 highlights the cattle losses by region and the respective prices together with our estimate of total losses to ranchers of predation in the province. Figure 7: Estimates of Total Cost of Predation in BC (2010) Census Agric. Region Regional Name Mature Stock Lost Avg. Price Mature Value Lost Calves Lost Avg. Price Calf Value Loss Total Estimated Loss 1 & 2 3 Lower Main.- Island 0 $1,000 $0 0 $600 $0 $0 Thompson- Okanagan 53 $1,000 $53, $600 $172,000 $225,000 4 Kootenay 180 $1,000 $180, $600 $443,000 $623,000 5 Cariboo 666 $1,000 $666,000 2,786 $600 $1,672,000 $2,338,000 6 North Coast 0 $1,000 $0 0 $600 $0 $0 7 Nechako 0 $1,000 $0 0 $600 $0 $0 6 & 7 North Coast- Nechako 106 $1,000 $106, $600 $363,000 $469,000 8 Peace River 95 $1,000 $95, $600 $291,000 $386,000 TOTAL 1,100 $1,100,000 4,900 $2,941,000 $4,041,000 Based on this estimate of total predation and the estimated prices for these predated cattle, the total loss in revenue to the ranching sector in British Columbia is estimated at $4.041 million To re-iterate, the price increases in 2011 over 2010 would suggest that the overall cost of predation in 2011 was closer to $5 million. P a c i f i c A n a l y t i c s I n c p a g e 16

27 The Downstream Impacts of Cattle Predation This loss in calf and cattle production affects more than just the ranching sector; it will also impact industries which have downstream linkages to the ranching sector - industries supplying goods and services to the ranching sector and industries benefitting from ranching incomes. These impacts are sometimes known as spinoff impacts but more technically are referred to as indirect and induced impacts. 14 When a ranch raises cattle, it must purchase various material inputs for this production from suppliers. Some of these inputs are directly related to individual cattle such as feed and veterinary services and are often referred to as variable costs. In contrast, other inputs required in general by the ranch such as fuel, electricity, accounting services, etc. are known as fixed costs. When predation takes place, there will be a decline in the variable cattle costs but not in the fixed costs. This reduction is demand for variable inputs affects those industries supplying those materials. The lower demand for these inputs ripples through the entire economy (known as indirect impacts) leading to lower overall economy activity. At the same time, a reduction in salaries paid by the ranching sector and by the supplying industries due to a decline in cattle production will also ripple through the economy as there will be fewer purchases on consumer goods and services. These impacts are known as induced impacts. In order to calculate these impacts, it is first necessary to determine the average value of inputs used by the ranching sector in British Columbia. While some recent work has been done on estimating the financial structure of the ranching sector, 15 we have opted to use data constructed using unpublished data for the ranching sector from Statistics Canada. The data are in the form of Input-Output tables which are somewhat different than data contained in financial statements. The detail differences are not important to this Study, but for those interested, we have included an Appendix providing a primer on Input-Output data and how they differ from financial data. 14 Indirect impacts refer to the additional economic activity resulting from purchases of goods from supplier companies. These supplier companies themselves need to purchase supplies in order to produce the goods originally purchased, and thus economic activity throughout the economy is increased. Induced impacts result from the additional wages and salaries that companies pay which are, after savings and taxes, spent on additional consumer goods and services. 15 See, for example, a recent report A Project to Develop Baseline Data on a Typical Ranch in BC, 2010, by Mike Malmberg and Terry Peterson. P a c i f i c A n a l y t i c s I n c p a g e 17

28 Figure 8: Attenuated Input Matrices Animal Production Animal Slaughtering Crop and animal production Support activities for agriculture and forestry Mining and oil and gas extraction Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information and cultural industries Finance, insurance, real estate and rental and leasing Professional, scientific and technical services Administrative and support, waste and remediation Health care and social assistance Accommodation and food services Other services (except public administration) Operating, office, cafeteria and laboratory supplies Travel, entertainment, advertising and promotion Non-profit institutions serving households Government sector Net Indirect Taxes and Subsidies Labour Income Operating Surplus TOTAL OUTPUT Figure 8 on the previous page displays the inputs used by the ranching sector in BC in the format required to estimate the indirect and induced impacts on other industries in the province. When attempting to determine the impacts of a loss in cattle, however, a problem emerges. While it is likely that a loss of a calf or cow would result in a reduction in the amount of variable inputs (e.g., hay) required, the P a c i f i c A n a l y t i c s I n c p a g e 18

29 level of fixed inputs should not change. Somehow it is necessary to estimate what are the variable inputs and what change would likely occur. The report examining the financial structure of the BC ranching sector identifies the level of variable costs (referred to as direct costs in the Report) and fixed costs (referred to as indirect costs in the Report). For ranches across the Province, the estimated variable costs represent 58.5% of total input costs (fixed costs equalling 41.5%). Adjusting the inputs accordingly, the full negative impacts on the economy of predation can be assessed using the Input-Output model of the BC economy developed and maintained by Statistics Canada. Figure 9 on the following page highlights these impacts. The reduction of $4.04 million in revenues in the ranching sector would reduce direct GDP in the province by approximately $2.29 million and reduce incomes by over $730,000 and lower employment by roughly 34.5 jobs. The assumed predation of 6,000 cattle also decreases taxes paid to the Federal and Provincial governments as noted in Figure 9. The reduction in economic activity by the ranching sector also has spin-off impacts on their supplying industries (the indirect impacts ). Reduced activity in those industries would lower provincial GDP by another $870,000, remove some $580,000 in income from workers, and cause employment to fall by another 18 jobs. The reduced incomes in both the ranching sector and the suppliers sectors have their own impacts by reducing personal expenditures on consumer goods and services. These impacts known as induced impacts would reduce GDP by another $670,000; result in even lower incomes (by $390,000), and cause the loss of another 8 jobs in the economy. Overall, the estimated 6,000 cattle lost through predation causes a total downstream reduction of $3.83 million in GDP and $1.7 million in incomes, a loss of close to 61 jobs, and impact total government revenues by some $320,000 in taxes, with the provincial government losing $160,000 due to predation. P a c i f i c A n a l y t i c s I n c p a g e 19

30 Figure 9: Economic Impacts of Predation on the Ranching Sector (2010) Direct Indirect Induced TOTAL Revenues $4.04 Output $4.04 $2.07 $1.06 $7.17 GDP $2.29 $0.87 $0.67 $3.83 Material Inputs $1.76 $1.19 $0.39 $3.33 Labour Income $0.73 $0.58 $0.39 $1.70 Wages and Salaries $0.47 $0.52 $0.27 $1.26 Mixed Income $0.24 $0.00 $0.09 $0.32 SLI $0.02 $0.05 $0.03 $0.11 Employment Employment (FTE) Total Taxes $0.06 $0.06 $0.20 $0.32 Total Federal Taxes $0.03 $0.01 $0.10 $0.14 Total Indirect Taxes $0.01 $0.01 $0.03 $0.05 Personal Income Taxes $0.00 $0.00 $0.05 $0.05 Corp. Income Taxes $0.03 $0.00 $0.02 $0.04 Total Provincial Taxes $0.03 $0.04 $0.09 $0.16 Total Indirect Taxes $0.02 $0.04 $0.06 $0.13 Personal Income Taxes $0.00 $0.00 $0.02 $0.02 Corp. Income Taxes $0.01 $0.00 $0.01 $0.02 It should be noted that the Input-Output Model does not measure profits per se, rather it provides a measure of operating surplus. This operating surplus is comprised of profits, depreciation and interest payments on corporate debt. Since the marginal changes we are examining ought not to affect depreciation or interest payments at the ranch level, one could use the change in operating surplus to measure changes in profits. In this case, direct operating surplus (equal to GDP minus labour incomes minus indirect taxes) falls by $1.53 million ($ $ $ $0.02); stated otherwise, cattle predation of 6,000 animals reduces ranching profits in British Columbia by an estimated $1.53 million. P a c i f i c A n a l y t i c s I n c p a g e 20

31 Upstream Economic Impacts of Cattle Predation The previous discussion describes the economic impacts of wildlife predation on those industries supplying goods and services to the ranching sector. At the same time, predation impacts on upstream industries, in particular the slaughtering sector in BC. Assuming excess capacity in the slaughtering industry, any decrease in predation would result more cattle moving upstream to slaughter houses which would in turn increase overall economic activity in the province. Figure 8 on page 18 highlights the input table for the Slaughter industry. From this table, we see that animal inputs form roughly 40% ( Crop and Animal Production : 0.392) of total revenues. Accordingly, if there were no predation and all the extra cattle were sent for slaughtering, the additional $4.04 million of cattle inputs (from Figure 7) into the Slaughtering industry will translate into $10.03 million in additional Slaughtering industry output. We can then run this increase in output through the BC Input-Output Model to determine the overall impacts on the economy. Figure 10 below highlights the impacts of this additional slaughter house activity. The $10.3 million increase in Slaughtering industry output increases GDP by $2.78 million, results in an additional $2.79 million in incomes, generates 52 extra jobs and provides an additional $400,000 in taxes to various governments. The additional slaughtering activity also increases supplier activity (indirect impacts). Excluding the additional economic impacts generated in the ranching sector which already have been accounted for, suppler GDP will increase by $1.6 million, incomes by another $870,000, jobs by 36, and government revenues by $60,000. Furthermore, the increase in wages and salaries attributed to both the slaughtering industry and supplier industries have their own impacts on the economy through consumer spending (induced impacts). These induced impacts increase provincial GDP by $920,000, labour incomes increase by $53,000, and there are an additional 11 jobs created with a further $260,000 going to governments. Overall, then, we can say that the predation of the estimated 6,000 cattle reduces upstream economic activity to the tune of $5.3 million in GDP, $4.2 million in labour incomes, 99 jobs and $730,000 in total government revenues, of which $290,000 is attributable to the Provincial Government. P a c i f i c A n a l y t i c s I n c p a g e 21

32 Figure 10: Economic Impacts of Predation on the Slaughtering Sector (2010) Direct Indirect Induced TOTAL Revenues $10.31 Output $10.31 $4.58 $1.44 $16.33 GDP $2.78 $1.60 $0.92 $5.30 Material Inputs $7.54 $2.97 $0.52 $11.03 Labour Income $2.79 $0.87 $0.53 $4.21 Wages and Salaries $2.04 $0.75 $0.37 $3.16 Mixed Income $0.00 $0.05 $0.12 $0.17 SLI $0.75 $0.07 $0.05 $0.87 Employment Employment (FTE) Total Taxes $0.40 $0.06 $0.26 $0.73 Total Federal Taxes $0.28 $0.02 $0.14 $0.43 Total Indirect Taxes $0.00 $0.02 $0.05 $0.07 Personal Income Taxes $0.28 $0.00 $0.07 $0.35 Corp. Income Taxes $0.00 $0.00 $0.02 $0.02 Total Provincial Taxes $0.12 $0.04 $0.12 $0.29 Total Indirect Taxes $0.03 $0.04 $0.09 $0.16 Personal Income Taxes $0.09 $0.00 $0.02 $0.11 Corp. Income Taxes $0.00 $0.00 $0.01 $0.01 Total Economic Impacts of Cattle Predation It is now possible to calculate the total impacts on the provincial economy resulting from cattle predation. Based on our estimate of 6,000 predated cattle (a figure that must be accepted with caution), Figure 11 displays these total impacts. If somehow cattle predation could be eliminated completely, provincial GDP would increase by $8.88 million, incomes to workers by $5.74 million, employment by over 155 jobs and government revenues by just over $1 million. The provincial government itself loses $440,000 from cattle predation. P a c i f i c A n a l y t i c s I n c p a g e 22

33 Figure 11: Total Economic Impacts from Cattle Predation (2010) Direct Indirect Induced TOTAL Revenues $14.35 Output $14.35 $6.64 $2.50 $23.50 GDP $5.07 $2.48 $1.58 $9.12 Material Inputs $9.30 $4.16 $0.92 $14.36 Labour Income $3.52 $1.45 $0.93 $5.90 Wages and Salaries $2.51 $1.28 $0.64 $4.42 Mixed Income $0.24 $0.05 $0.22 $0.49 SLI $0.77 $0.12 $0.08 $0.99 Employment Employment (FTE) Total Taxes $0.46 $0.12 $0.45 $1.05 Total Federal Taxes $0.31 $0.03 $0.25 $0.58 Total Indirect Taxes $0.01 $0.03 $0.08 $0.12 Personal Income Taxes $0.28 $0.00 $0.12 $0.40 Corp. Income Taxes $0.03 $0.00 $0.04 $0.06 Total Provincial Taxes $0.15 $0.08 $0.22 $0.45 Total Indirect Taxes $0.05 $0.08 $0.15 $0.30 Personal Income Taxes $0.09 $0.00 $0.04 $0.13 Corp. Income Taxes $0.01 $0.00 $0.02 $0.03 The data in Figure 11 can be used to provide another set of statistics. Although we have said that the estimate of 6,000 predated cattle is a relatively poor (not robust) figure, we can use the data to tell us what the impacts are per predated animal. Figure 12 below highlights the total impacts per animal. The table suggests that every animal predated costs the provincial economy in total just over $1,500 in GDP and almost $1,000 in labour incomes. The single animal predation also results in a loss of 0.03 jobs throughout the province and costs governments almost $175. The BC Government itself loses $75 in taxes for every cattle predated. P a c i f i c A n a l y t i c s I n c p a g e 23

34 Figure 12: Economic Impacts Per Predated Cattle (2010) Direct Indirect Induced TOTAL Revenues 2,392.4 Output 2, , ,915.9 GDP ,520.1 Material Inputs 1, ,394.1 Labour Income Wages and Salaries Mixed Income SLI Employment Employment (FTE) Total Taxes Total Federal Taxes Total Indirect Taxes Personal Income Taxes Corp. Income Taxes Total Provincial Taxes Total Indirect Taxes Personal Income Taxes Corp. Income Taxes Economic Impacts of Injury/Reduced Weaning Weights The activity of predators has a further detrimental impact on the ranching sector. When predators occupy areas close to where cattle are located and/or when predators attach but do not kill their intended victim, the result is often that calves do not put on as much weight as normal. This reduction in weaning weights results in lower market prices and accordingly represents a loss to both the rancher and to the economy as a whole. Of course, just as there is little information on overall predation in BC, there is NO information on the weaning weight consequences of predators. Nevertheless, the economic impacts derived above and displayed in Figure 11 can be used to estimate the impacts per predated cwt. of beef which at least provides some indication of the associated costs. P a c i f i c A n a l y t i c s I n c p a g e 24

35 Figure 13 below highlights the economic impacts per cwt. (100 lbs.) of cattle. Provincial GDP falls by $191 for every cwt. predated; incomes fall by $123 and employment by jobs. Taxes also fall, by $22 for every cwt. predated with the Provincial Government itself loosing $9 for every cwt. lost to wild predators. Figure 13: Economic Impacts per cwt. of Predated Cattle (2010) Direct Indirect Induced TOTAL Revenues $ Output $ $ $52.22 $ GDP $ $51.79 $33.09 $ Material Inputs $ $87.03 $19.13 $ Labour Income $73.49 $30.30 $19.34 $ Wages and Salaries $52.43 $26.65 $13.32 $92.40 Mixed Income $4.94 $1.07 $4.51 $10.31 SLI $16.12 $2.58 $1.72 $20.63 Employment Employment (FTE) Total Taxes $9.67 $2.58 $9.46 $21.92 Total Federal Taxes $6.45 $0.64 $5.16 $12.03 Total Indirect Taxes $0.21 $0.64 $1.72 $2.58 Personal Income Taxes $5.80 $0.00 $2.58 $8.38 Corp. Income Taxes $0.64 $0.00 $0.86 $1.29 Total Provincial Taxes $3.22 $1.72 $4.51 $9.46 Total Indirect Taxes $1.07 $1.72 $3.22 $6.23 Personal Income Taxes $1.93 $0.00 $0.86 $2.79 Corp. Income Taxes $0.21 $0.00 $0.43 $0.64 If, for example, the weaning weight outcome of predators on the total calf herd of a particular rancher is 2,500 lbs., then the above impacts can be used to estimate the impact on the ranching operation. 16 The loss of revenue to the rancher would be approximately $7,500 (25 cwt. * $300). This loss would be in part a loss in employment income (approximately $1,850) and a loss in profits (offset by a very small amount of reduced taxes). 16 The previously cited report on predator activity in Wyoming suggested that weaning-weight loss could range between 1 and 10% of calf weight. Using a, say, 5% value and a 500 lb calf results in a weight loss of 25 lbs. per calf. For a ranch with, say, 100 calves going to market, this translates to a weaning-weight loss of some 2,500 lbs. P a c i f i c A n a l y t i c s I n c p a g e 25

36 Of course, this is very much a hypothetical estimate for a hypothetical ranch. Is 5% a reasonable estimate of the loss in weaning weight? Do ranches with fewer predators experience less weaning-weight loss? One would guess yes, but if so, how does the population of predators affect overall weaning weights? Nevertheless, it does provide an indication of how large the impacts could be for many ranches in BC. Economic Impact of Best Management Practices Ranchers and livestock producers employ Best Management Practices (BMPs) to mitigate predation, and these activities have an economic cost to them. BMP might include predator repellents, guardian animals, fencing, and husbandry practices, depending on specifics of the ranch or farm, and its locality. Predator repellents might include lighting, fladry on fencing, bells on livestock, noise makers, etc. Guardian animals might include dogs (cattle, sheep) as well as llamas or donkeys (sheep). Fencing might include permanent or portable, including electric. Husbandry practices are numerous, and include sound herd management, dead animal removal, appropriate breeding season, confined breeding location, defined storage areas, and pasture selection. Pasture selection is a BMP that can have severe implications when predation is present. Wild predators in an area can alter the grazing habits of the livestock. Animals can sense the presence of a predator, which may reduce the effective grazing area, as well as reduced weight gain due to constant stress (see Section above). The producer, knowing that a predator is in the area, may alter the pasturing schedule, resulting in overgrazing and unusable pasture or forage locations. The producer who has to use marginal land (i.e. brush land) for flocks or herds risks predation due to the proximity to predator habitat. The effect to the producer is that the overall pasture and grazing area for the livestock has been reduced, and the land is not able to reach its best and highest use. The cost is both the loss of potential grazing land and increased risk of animals to predators. The challenge with placing an economic value on BMPs to mitigate predation is three-fold: First, not all BMPs are specific only to wild predator prevention. Many are sound management practices that would be implemented by producers, whether or not threatened by predation. Second, the cost of BMPs to a producer likely would not necessarily increase as the number of local predators change marginally. Simply said, an extra predator in the region generally would not increase costs significantly. And third, BMPs and herd/flock management by definition requires the producer s considerable time, upon which it is difficult to place a value. BMP costs are relatively small compared to the entire operation. Results of a small P a c i f i c A n a l y t i c s I n c p a g e 26

37 survey of producers suggested that producers attach relatively minor costs to BMPs. However, the literature review shows that a few jurisdictions subsidize some producer costs, such as that of a guardian animal or fence construction. P a c i f i c A n a l y t i c s I n c p a g e 27

38 T H E E C O N O M I C S O F S H E E P P R E D A T I O N THE SHEEP IND US T RY The Sheep sector is a relatively small industry, raising roughly 55,000 sheep each year. While it has not undergone the difficulties with disease issues that the cattle industry has had to deal with over the last number of years, it has faced the same deteriorating financial environment that has affected the cattle industry. Figure 14 displays an historical time series of sheep production over the last decade. Production has fallen from a high of 85,000 sheep in 2001 to 62,500 in 2006 to 55,500 in Figure 15 displays the number of sheep in BC by type for Figure 14: Sheep Production in BC 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Source: Statistics Canada Sheep Mature Animals Lambs Year P a c i f i c A n a l y t i c s I n c p a g e 28

39 Figure 15: Sheep by Type, 2010 TOTAL SHEEP - 55,550 RAMS, 1,500 LAMBS, 28,900 EWES, 25,100 Source: Statistics Canada The sheep sector in British Columbia is a much small industry than the cattle industry, and consequently there is much less information on the financial and operating characteristics of sheep raising. Furthermore, while most ranches raising cattle do so as their main occupation (and thus are classified as cattle ranches by Statistics Canada), many farmers raising some sheep do so as a side occupation. As a consequence, there are fewer ranches classified by Statistics Canada as sheep ranches than there are farms that raise some sheep. Figure 16: Total Sheep Ranches, 2006 Nechako 19 North Coast 3 Kootenay 31 Cariboo 44 Total Sheep Ranches Peace River 11 Vancouver Island-Coast 146 Thompson- Okanagan 111 Lower Mainland- Southwest 166 Source: Statistics Canada P a c i f i c A n a l y t i c s I n c p a g e 29

40 Figure 16 displays the location of those ranches classified as sheep ranches in 2006, the year of the last Agricultural Census. There are no more recent data available. TOTAL SHEEP PREDATION IN BC It is true that there is relatively little information identifying cattle predation in BC; for sheep predation there is NO information. Indeed, there is not even anecdotal information from any survey. One of the few regions that track sheep predation is Wyoming. Based on several studies over time, predation in Wyoming is in the range of 0.9% - 1.6% of sheep stock and between 6.0% - 7.0% of lamb stock. If we assume the level of predation is the same in British Columbia as in Wyoming, then Figure 17 below provides an estimate of total predation in BC. Figure 17: Estimated Sheep Predation in BC (2010) # of Sheep % Predation Estimated Sheep Predation # of Lambs % Predation Estimated Lamb Predation Total Predation 26, % , % 1,879 2,211 There is no way to determine the accuracy of this estimate, so the reader must be aware that any costing calculated in the next section must be used with caution. THE COST OF SHEEP PREDATION There is considerable variability regarding the market value of sheep and lambs, in part because there is no public market for the whole of BC with identifiable prices and in part because of the great variability of the sheep and lamb product. There are a number of sheep farmers, for example, whose flocks consist of high market value breeding stock, while at the same time there are flocks with relatively low value animals. Anecdotal information suggests that breeding stock went for up to $1,600 per ram and $800 per ewe in 2011 but these are likely not representative of predated sheep. Cull ewes, in contrast, went for $ , Keeping in mind that sheep prices have increased in 2011 over 2010, a market value $250 for sheep seems reasonable. 17 Personal correspondence with Roma Tingle, September, P a c i f i c A n a l y t i c s I n c p a g e 30

41 For this Report, then, we use a value of $250 for sheep and $150 for lambs. Clearly, if a specific farmer has higher-valued breeding stock which is predated, the market prices should be set higher. And it is also understood that prices in 2011 are higher than they were in 2010, and therefore predation costs in 2011 would likely be higher than indicated. Nevertheless, the values here are representative and provide a realistic estimate of the costs of predation to the BC economy. Figure 18: Estimated Cost of Sheep Predation in BC (2010) Estimated Sheep Predation Average Sheep Price Predated Sheep Value Estimated Lamb Predation Average Lamb Price Predated Lamb Value TOTAL Value of Predation 333 $250 $83,250 1,879 $150 $281,850 $365,100 Figure 19: Economic Impacts of Sheep Predation in BC (2010) Direct Indirect Induced TOTAL Revenues $365,100 Output $365,100 $186,488 $95,243 $646,832 GDP $206,724 $78,764 $60,345 $345,833 Material Inputs $158,376 $107,724 $34,898 $300,998 Labour Income $66,040 $52,105 $35,383 $153,650 Wages and Salaries $42,896 $47,379 $24,356 $114,631 Mixed Income $20,963 $0 $7,998 $28,961 SLI $2,302 $4,726 $3,029 $10,058 Employment Employment (FTE) Total Taxes $5,816 $5,211 $17,207 $28,355 Total Federal Taxes $3,151 $1,091 $9,209 $13,450 Total Indirect Taxes $727 $1,091 $3,029 $4,847 Personal Income Taxes $0 $0 $4,726 $4,726 Corp. Income Taxes $2,423 $0 $1,454 $3,878 Total Provincial Taxes $2,666 $4,120 $7,998 $14,905 Total Indirect Taxes $1,696 $4,120 $5,816 $11,633 Personal Income Taxes $0 $0 $1,696 $1,696 Corp. Income Taxes $969 $0 $606 $1,575 P a c i f i c A n a l y t i c s I n c p a g e 31

42 Based on this (albeit, tentative) estimate of the cost of predation, it is now possible to determine the economic impacts of this sheep predation on the British Columbia economy. Running the loss in revenue through the BC Input-Output Model yields the impacts displayed in Figure 19 on the previous page. The general assumptions underlying the estimates are similar to those used in the cattle sector that variable costs of production are roughly 59% of total costs of production. Figure 20: Economic Impacts of Sheep Slaughtering in BC (2010) Revenues $931,795 Direct Indirect Induced TOTAL Output $931,795 $475,948 $243,077 $1,650,820 GDP $527,594 $201,018 $154,011 $882,623 Material Inputs $404,200 $274,930 $89,066 $768,197 Labour Income $168,546 $132,981 $90,303 $392,139 Wages and Salaries $109,477 $120,920 $62,161 $292,558 Mixed Income $53,502 $0 $20,411 $73,913 SLI $5,876 $12,061 $7,731 $25,668 Employment Employment (FTE) Total Taxes $14,844 $13,298 $43,915 $72,366 Total Federal Taxes $8,041 $2,783 $23,504 $34,328 Total Indirect Taxes $1,856 $2,783 $7,731 $12,370 Personal Income Taxes $0 $0 $12,061 $12,061 Corp. Income Taxes $6,185 $0 $3,711 $9,896 Total Provincial Taxes $6,804 $10,515 $20,411 $38,039 Total Indirect Taxes $4,330 $10,515 $14,844 $29,689 Personal Income Taxes $0 $0 $4,330 $4,330 Corp. Income Taxes $2,474 $0 $1,546 $4,020 The sheep sector generally does not send the majority of its animals to slaughter houses; rather, many are slaughtered on the farm or at a neighbouring farm specialized in preparing lamb and sheep products for market. Accordingly, Statistics Canada does not identify a sheep slaughtering industry in BC. We can say that the loss of sheep and lambs through predation does reduce slaughtering activity P a c i f i c A n a l y t i c s I n c p a g e 32

43 (reducing incomes for any abattoir-related operations that slaughter sheep or lambs, including on-farm slaughtering) and therefore there will be a further small decline in upstream economic activity While these impacts are difficult to determine with any accuracy, we nevertheless can use the Animal Slaughtering Industry from Statistics Canada to make a rough estimate of the overall impacts on the BC economy. Figure 20 highlights those impacts. The loss in direct revenues reaches almost $1 million which, when all impacts are accounted for, results in a loss in total GDP throughout the Province of just over $880,000, a loss of almost 14 jobs and reduction of roughly $70,000 in government revenues. Figure 21 below displays the total impacts of predation on the BC economy. Figure 21: Total Economic Impacts of Sheep Predation in BC (2010) Revenues $1,296,895 Direct Indirect Induced TOTAL Output $1,296,895 $662,436 $338,320 $2,297,651 GDP $734,319 $279,781 $214,356 $1,228,456 Material Inputs $562,576 $382,655 $123,965 $1,069,196 Labour Income $234,586 $185,086 $125,686 $545,789 Wages and Salaries $152,373 $168,299 $86,517 $407,190 Mixed Income $74,465 $0 $28,409 $102,873 SLI $8,178 $16,787 $10,761 $35,726 Employment Employment (FTE) Total Taxes $20,661 $18,509 $61,121 $100,721 Total Federal Taxes $11,191 $3,874 $32,713 $47,778 Total Indirect Taxes $2,583 $3,874 $10,761 $17,217 Personal Income Taxes $0 $0 $16,787 $16,787 Corp. Income Taxes $8,609 $0 $5,165 $13,774 Total Provincial Taxes $9,470 $14,635 $28,409 $52,943 Total Indirect Taxes $6,026 $14,635 $20,661 $41,322 Personal Income Taxes $0 $0 $6,026 $6,026 Corp. Income Taxes $3,443 $0 $2,152 $5,596 P a c i f i c A n a l y t i c s I n c p a g e 33

44 C O S T E F F E C T I V E N E S S O F W P L P P I L O T P R O J E C T For the past decade, the British Columbia Government in conjunction with various other stakeholders has funded pilot programs aimed at reducing cattle predation (but not sheep predation) and compensating ranchers for verified losses. For each of these programs, the question can be asked: what is the cost-effectiveness of each of these programs. Asked differently, how do the program costs compare to the estimated benefits to the economy or, alternatively, what stakeholder funding is required to increase economic benefits by, say, $1,000? The following attempts to determine this cost-benefit ratio. P ILOT PROJECT F U N D ING The Wild Predator Loss and Mitigation Pilot (WPLP) worked to support education, prevention and mitigation activities in collaboration with a suite of programming that included loss verification, administration and producer compensation. Programming and funding has been provided for by the Investment Agriculture Foundation with Agriculture and Agri-Food Canada (AAFC) funding, AGRI through Growing Forward funding 60/40 with AAFC, and the BC Cattlemen s Association. As well, the Ministry of Environment provided control specialists in the later stages of the pilot. In 2010, the Ministry of Agriculture s Business Risk Management (BRM) branch contributed Growing Forward funding, approximately $38,000, for WPLP administration and verification. BRM also paid out compensation of approximately $50,000 to ranchers who had verified livestock losses from wild predators. All loss claims were for predation on cattle. Predator mitigation (i.e. removal) is historically the most costly segment of predation management. Stage 1 of the WPLP program covered October 2009 February 2010 and primarily involved the setting up of the Pilot Project. From January - May 31, 2010, the WPLP operated under Stage 2 of the funding requirement, which allowed for 100% recovery for predator mitigation costs from IAF. From June - December 2010, Stage 3 reduced cost recovery to 75% (i.e. 25% paid by the livestock producers.) The Pilot Project was extended through December 2010, based upon a $50,000 contribution from BCCA as the producer contribution which triggered a 75% commitment of up to $150,000 from IAF. Implementation costs of 2010 mitigation Stages were approximately $70,000 (Jan-May) under a full time contract basis for 3 Wildlife Control Specialists in BC. In June the model changed to 18 contracted on-call Wildlife Specialists and $189,000 was expended P a c i f i c A n a l y t i c s I n c p a g e 34

45 between June-Dec. ( Note: it was during this period of time that the majority of the verifications and mitigation activity for the calendar year were conducted), for a total of approximately $259,000 for the calendar year of ARDCorp program management costs, including administration, training, workshops, and rancher education components of the WPLP, totalled approximately $57,000 from April Dec Development of several publications, including subjects of Best Management Practices and Targeted Predator Controls, cost $15,000, with approximately 50% spent in An approximate summary of the 2010 WPLP costs is found in the following table: Figure 22: Program Spending 18 Program Element Amount Funding Source Administration / Prevention /Education $57,000 Investment Agriculture Foundation Verification $38,000 AGRI/Risk Management Branch (Growing Forward funding 60/40 Fed/Prov contribution) Mitigation / Removal $259,000 IAF; BCCA (25% from June Dec.) Compensation $50,000 AGRI/Risk Management Branch(Growing Forward funding 60/40 Fed/Prov) Education / Publications $7,500 Investment Agriculture Foundation Total 2010 Program Jan-Dec $411,500 In 2010, the Wild Predator Call Centre Hotline received over 300 calls, including 35 from sheep and goat producers, with 260 requiring some level of response. These 18 Data provided by Drew Carmichael, Project Manager, ARDCorp. P a c i f i c A n a l y t i c s I n c p a g e 3 5

46 responses resulted in 187 files, with 143 verified losses of cattle. During 2010, the Wildlife Control Specialists removed 134 targeted predators, including 112 wolves, 18 coyotes, 2 black bears, and 2 cougars. This also included 10 predators on behalf of sheep producers. During 2010, Conservation Officers from the Ministry of Environment also mitigated a number of predators, such as bear, cougar, and coyotes, primarily for small sheep and goat producers in rural residential areas. In addition to the 112 wolves removed within the WPLP program, an additional 385 wolves were reported to have been removed in 2010 by the BC Trappers under the Ungulate Enhancement initiative. Many of these wolves were in regions where livestock interface with predators. This was a 100% increase in the numbers harvested by the BC Trappers compared to two years before. More significantly, the WPLP predator removal was targeted selectively by the Wildlife Control Specialists to those offending predators responsible for verified livestock predation, which has been an overall objective of the provincial predator mitigation strategy. One proxy estimate of the success of the 2010 WPLP program may be seen in the 2011 reduction in calls to the toll-free Wild Predator Call Centre Hotline. The 2010 emphasis on education, prevention, and mitigation to target only problem predators, especially wolves, may be having a sustainable impact, including fewer reported cases of predator-livestock conflict in PROGRAM Although this socio-economic analysis focuses on 2010 WPLP programming, the 2011 WPLP Pilot Project has introduced some changes and is briefly described here. Beginning February 15, the Conservation Officer Services (COS) of the Ministry of Environment advised that it would take the lead in wild predator/livestock interaction files and would provide verification and mitigation services. This Stage 4 of the Pilot Project utilizing COS officials would be at no direct cost to the producer. The Conservation Officer Services estimates that an additional $600,000 is required to implement wild predation verification and mitigation services within its department. Training has been done for COS field staff in predator-prone areas, and a full-time Predator Response Officer coordinates predation management services for the COS. Compensation and verification funding remains available through AGRI s Risk Management Branch under the Growing Forward agreement and the Wild Predator Loss Prevention Pilot management continues through ARDCorp. In addition, the Provincial Government has provided a $200,000 grant, administered through the BCCA, to help cover predation management costs, including predator verification P a c i f i c A n a l y t i c s I n c p a g e 36

47 and mitigation services from the 18 trained Wildlife Control Specialists, similar to the 2010 pilot. Complementary roles of both private WCS and the COS services is in its infancy, with the present inability to measure impact or cost/effectiveness. Noteworthy in 2011 is that the program actively focuses both on predation management for cattlemen and the sheep industry. However compensation is still only available for verified losses of cattle in BC. C O S T EFFECTIVENESS From Figure 22 we note that the total cost of operating the 2010 Wild Predator Loss and Mitigation Pilot Project was $411,500. From Figure 12 we note that the cost to the economy in terms of GDP per predated cattle was estimated to be $1,520. From these figures, we can then conclude that the WPLP is cost effective if the program is responsible for the saving of more than 271 cattle ($411,500/$1,520). It is not possible to determine how many cattle are saved by the program, but it is known that the program removed a total of 134 targeted predators in Thus, if a targeted predator takes, on average, more than two cattle, then the WPLP is cost effective. As well, these predators are also often responsible for losses to sheep, goats and other livestock as well. P a c i f i c A n a l y t i c s I n c p a g e 37

48 A N O T E O N T H E B E N E F I T S O F P R E D A T O R S The previous section of this Report highlighted the economic costs of predation on the cattle ranching and sheep farming economy. The underlying premise is that if predation could be eliminated, there would be an economic (GDP) benefit to the economy of roughly $9.1 million for the cattle ranching sector and $350,000 for the sheep sector. If predation could be reduced by, say, 10%, the economic benefits would be 10% of those estimated above. The reduction in predation could be achieved through better predator management such as increased fencing or greater animal oversight. But another option would be to undertake a selective cull of predators targeting neighbouring cattle ranches and/or sheep farms. While a selective cull of predators would have its own political issues and is likely not a viable response in most cases, there is an economic issue associated with a selective removal of predators: if a predator has a positive benefit in-and-of itself, then there is an economic cost to predator removal and this cost must accounted for in determining the net benefits of predator removal. For example, if a predator is expected to kill two cattle (and hence is responsible for an expected 2 X $1,520 = $3,040 reduction in economic (GDP) activity from Figure 12) and the social value of a predator is (say) $3,200, then the removal of the predator will actually result in a decline in overall social benefits. E C O N O M IC BENE F ITS Benefits to Wilderness Businesses The direct economic benefits of predators stem from their value to the Wilderness Tourism Industry and to the Guide Outfitting Industry. The economic benefit of predators to the Wilderness Tourism industry lies in the demand for wildlife viewing. Over fifty enterprises in the province specifically offer wildlife viewing, and many more lodges and tourist destinations tout their location within wildlife habitat as a major draw. Many of these destinations are quite high value-added activities, and indeed, many grizzly bear viewing operations have revenues exceeding $1 million and hire substantial numbers of employees. But the vast majority of these dedicated viewing lodges are located on the central coastal areas and hence are not located near cattle and sheep raising regions. The issue, however, is not how valuable these wilderness tourism firms are to the BC economy. The issue is: how would a small reduction in predators in a region affect the financial viability of the sectors? Clearly, a complete extermination of some P a c i f i c A n a l y t i c s I n c p a g e 38

49 predators, say, grizzly bears, would profoundly affect many of these firms and could result in a substantial negative impact on the economy. But again, the real issue is: what would a small reduction in predator numbers mean to the wilderness tourism sector? Even if the predator in question was the grizzly bear, the impact on wilderness lodges would be very minimal in most cases. 19 In the case of wolves, coyotes or cougars, which are not a significant part of the viewing sector, the impacts would be, for all intents and purposes, zero. Indeed, if the elimination of wolves, coyotes and cougars results in greater numbers of ungulates, this may actual benefit the wilderness lodge product (see below). The Guide Outfitting industry in British Columbia employs more than 2,000 people and generates approximately $115 million of economic activity (GDP) each year. These businesses are typically family operated and especially contribute to the economies of rural communities. Economic benefit is gained through hunt fees and through licenses, fees, tags, transport, lodging, and other discretionary expenses incurred by the hunter. Licensed visitors and residents specifically conduct hunts that target several BC predators, including black bear, grizzly bear, cougar, and wolves. The black bear, whose habitat is widespread across the province, is the second most popular Guide Outfitting hunt, after the wild sheep. Grizzly bear hunting is highly controlled but, with the exception of Stone Sheep in the far north of the Province, is the most expensive big game hunt in BC, and contributes disproportionally to the economy. Wolf hunting through the Guide Outfitters has been increasing in popularity, as is the taking of cougar, but generally the taking of a wolf is an opportunistic activity; that is, generally hunters do not book a hunt for the expressed purpose of hunting wolves. Rather, almost always the hunter comes upon a wolf and, having the proper tags, decides to take the animal. Accordingly, the inability of being able to hunt wolves does not impinge financially on the Guide Outfitting sector except for a possibly small impact on Outfitter take fees 20. Even the licenses and tags are prepaid and are not incumbent on a successful hunt. Other Benefits Other economic benefits of predators in BC come from a reduction in ungulates that would otherwise feed on the grazing habitat or winter stockyards of livestock. Deer 19 With regards to black bears, conservation officers destroy more than 600 bears each year due to bears coming to close to residential areas. 20 Some Guide Outfitters assess a fee for every animal taken; effectively a success fee. The take fee for a wolf is often non-existent or at best a nominal fee. P a c i f i c A n a l y t i c s I n c p a g e 39

50 especially are reported to have a noticeable impact on foodstocks that would otherwise be available for cattle and sheep in some regions of BC. Although the economic benefit is difficult to quantify, the reduction in numbers of large ungulates by wild predators does have the impact of freeing up forage, thereby reducing some production costs. At the same time, the existence of predators in-and-around potential grazing lands can have the effect of eliminating those lands from grazing use. If the cattle rancher or sheep farmer is unable to monitor his animals on those lands, the cost of using the land is the loss of animals. For those businesses where the available grazing land is limited, this could represent a significant cost to their business. Thus, even if there is no actual animal loss due to predation, because the rancher/farmer chooses not to graze his animals on the land, there is a cost in terms of losing potential grazing land. E C O LOGICAL BENEFITS The ecological value of predators is a reflection of the importance of predators to the overall wildlife balance. As mentioned above, predators play an essential part in keeping the ungulate population under control. However, the challenge is that often the predators targeted for control because they predate upon livestock are the same predators necessary to control ungulates that ravage agricultural forages. The ultimate goal is that predators will be a sustainable element within the natural ecological balance. This includes the complex interplay between wilderness habitat, wild plant and animal populations, climate change, and human interaction. Wild predators play an important role in this interaction. The ecological benefit is also closely linked to the social benefit, because of overwhelming public support for the existence of wild animals and wildlife habitat within the province. The irony is that urban and peri-urban encroachment into wildlife habitat is increasing wildlifehuman conflicts, resulting in a negative ecological view by some members of the public in certain areas of BC. The issue of predator ungulate balance is important on many levels. Deer and elk, for example, are more abundant in many parts of BC (and North America) than ever before, satisfying a long-standing wish of both deer and elk lovers and hunters. But as so often happens, the law of unintended consequences often rears its ugly head: wildflowers disappear; ground-level shrubs are decimated, along with the bird species that nest in them; and what replaces them are continuous stands of ferns, one of the few plants that ungulates don t eat. Ferns may look nice, but they can be an ecological disaster, forming closed canopies that prevent light reaching the ground. The ecology changes and, for instance, owls can t see their prey causing P a c i f i c A n a l y t i c s I n c p a g e 40

51 mouse populations to increase leading to higher tick population and ultimately higher incidences of Lyme disease. SOCIAL BENEFITS The social value of predators refers to the intrinsic value that citizens place on predators, excluding any explicit ecological or economic benefits that predators may have. The standard methodology for estimating this intrinsic value is called Contingent Valuation (CV) and it attempts to measure the existence value of an animal. This methodology uses a random sample survey of residents in a region (in this case, BC) questioning the value that a predator, say, a wolf, has to each survey respondent. Within the CV method, there are two approaches: first is referred to as willingness-to-pay and the second as willingness-to-be-paid. The first approach asks the respondent the question: how much are you willing to pay in order that there will be, say, one hundred additional predators (say wolves) in the region? This can be thought of as a type of tax policy question: how much extra taxes should go to saving one hundred wolves? If answered correctly the dollar stated by the respondent will be the value where the individual is indifferent between money not paid and the preservation of the one hundred wolves. 21 The average value of a single animal is calculated and then applied to all citizens to provide an estimate of the total value of the one additional wolf. The alternative question is: how much would you be willing to accept as a payment if the one hundred wolves are not preserved ; that is, how much would the province have to pay you (or reduce your taxes) so that you are equally well off after the one hundred wolves are culled. Needless-to-say, there have been few, if any, such CV studies for predators in BC and precious few for predators elsewhere. The one study found examined wolves in rural Wisconsin, 22 a state with relatively similar characteristics as British Columbia s ranching regions. The perhaps somewhat surprising result was that the social benefits of additional wolves are negative, that is, to the citizens in rural Wisconsin, an additional wolf is worth less than zero. The explanation of the authors is that, despite living in rural areas where one might expect the value of wildlife is more 21 There are numerous variations to these questions. Occasionally the question refers to the existence of a whole species, e.g., how much are you willing to pay to preserve the spotted owl, without which the spotted owl will go extinct. This form of question is normally only used for endangered species and rarely gives credible or consistent answers for non-endangered predators such as wolves or even grizzly bears. 22 An Economic Analysis of Predator Management in Wyoming, prepared for Wyoming Animal Damage Management Board, Wyoming Department of Agriculture; prepared by David T. Taylor, Benjamin S. Rashford, Roger H. Coupal and Thomoas Foulke, June P a c i f i c A n a l y t i c s I n c p a g e 41

52 highly regarded than urban dwellers, the population views the extant population of wolves to be sufficient for ecological reasons and therefore additional wolves only present a danger to their children, pets and farm animals. While it is impossible to present in this Report a concrete value for the social benefits of all predators, it is likely that the marginal social benefits for the three main predator groups wolves, coyotes and cougars are small at best. Indeed, the recent increase in sightings of cougars as well as well-publicized attacks on people by both cougars and grizzly bears in both British Columbia and other Rocky Mountain jurisdictions lends more evidence that the public has the sense that the number of predators meets or exceeds the social carrying capacity and that further preservation is not in the best interests of the general population. C O N C L U D I N G R E M A R K S This issue of predation is an important and on-going problem facing the cattle ranching and sheep farming sectors in BC. Various pilot programs to mitigate the cattle predation problem have been conducted over the last decade, mainly focusing on the development of better Best Management Practices (BMPs) and in providing some compensation to rancher for losses. No such programs have been developed for the sheep farming community. Despite the existence of these programs, there has been no attempt previously to estimate the cost to the ranching and sheep farming sectors of predation and to estimate the impacts on the BC economy as a whole. This Report is a first attempt at making these estimates. If the assumptions used in this Report are to be believed, the economic impacts are significant and it seems incumbent on the government to (continue to) address the issue in a comprehensive manner and to bring in the sheep farming community in its endeavours. All the more so, since prices in the ranching and sheep farming sectors are increasing, resulting in even greater economic losses than calculated for the year P a c i f i c A n a l y t i c s I n c p a g e 42

53 A N O T E O N D A T A One consistent comment in this Report has been with regards to the lack of credible, accurate information on predation in British Columbia. The lack of this information has seriously compromised the analysis in this Report. But more important, the lack of data has made policy decision-making difficult at best. The recent controversial changes in hunting regulations in the Interior to open the season for additional wolf hunting is a case in point where decisions had to be made based on incomplete information, without the benefit of a full understanding of the predation problem in the BC Interior. This issue of predation is an important and on-going problem facing the cattle ranching and sheep farming sectors in BC. It is likely that predation will continue to be a concern in the future and that the Provincial Government will again need to address the issue. Accordingly, we believe it is important that a concerted effort be made to improve the information database on predation. It should be noted that the 2011 Census of Agriculture was undertaken in May of this year, and consequently a detailed set of current farming and ranching characteristics will become available in the spring of Since such a detailed dataset is imperative to generate a comprehensive set of regional predation information, this is a particularly auspicious time to undertake a comprehensive survey of cattle ranching and sheep farming operations. There is also an increased public awareness of the growing population in some regions within BC of ungulates, such as deer. Deer have become an abundant and brazen annoyance in many urban and peri-urban landscapes and along roadways, and are seen as an environmental nuisance, a possible carrier of certain diseases, and a transportation risk. The public is now posing the question of how best to manage this ungulate population, including through natural predators. Further study of predation would help inform decision-makers to find durable solutions. It also should be understood that, just as the Census itself is only required every five years, only a single major survey of predation would be required to generate a credible and accurate baseline value. Updating the level of predation in following years could be done on the basis of a relatively small random sample and would not require the effort or expense of generating that first baseline. P a c i f i c A n a l y t i c s I n c p a g e 43

54 A P P E N D I X A : L I T E R A T U R E R E V I E W ALBERTA LITERATURE REVIEW AND SWOT ALBERTA WILD PRE D ATOR COMPENSATION PROGRAM Livestock included in the program are cattle, sheep, bison, pig, and goat. Predators included in the program are wolf, black/brown bear, grizzly bear, cougar, and eagles. Coyote is managed by Alberta Agriculture and Rural Development (ARD) and discussed on page 2. History Alberta s Wild Predator Compensation Program is presently administered and implemented through Alberta Fish and Wildlife (AFW). In 1980s, Alberta F&W had a strong Problem Wildlife Section, made up of government staffers trained specifically in management of predator wildlife. They were placed in strategic districts, instead of every location. With budget reductions and threats of program closure, fewer officers were asked to perform more wildlife service duties. In 1996 Alberta F&W took over compensation from Alberta Agriculture. There have been recent revisions re predator and livestock eligibility, compensation rates, and valuation of livestock. Investigation / Verification Verification is done by Fish and Wildlife Officers. Despite other commitments, Alberta F&W targets responding to a producer complaint within 24 hours, at least with an initial phone call. Procedure: Contact the nearest Fish and Wildlife office ASAP, requesting a site visit. The officer will examine the livestock and evidence to confirm predator kill or injury. If a confirmed or likely predator kill, the officer will file the claim on behalf of the producer Removal Removal, if necessary, will be carried out through Alberta Fish and Wildlife officers, through lethal and non-lethal means. Compensation Compensation paid: Compensation not paid: Cattle, bison, sheep, swine and goats. Any other animal, including horses, donkeys or exotic animals (i.e. llamas, alpacas, wild boar). Attacks by wolves, grizzly bears, black bears, cougars and eagles. Attacks by other types of predators, such as coyotes. P a c i f i c A n a l y t i c s I n c p a g e 1

55 The costs of veterinary care and medication up to the value of the animal based on the average for the type and class of livestock. Incidents of feeding on livestock that had already died of disease or other causes not related to wildlife predation. Compensation is through Alberta Fish and Wildlife. As in some other jurisdictions, payment is based upon verification of: 100% for confirmed kill 50% for probably kill 80% for injured livestock (note: additional 20% is paid if the animal dies) Alberta pays no premium to exotic or purebred species. Compensation is for meat price only. For all livestock, compensation is based on the average commercial value for the type and class of animal on the day it was killed, or the CanFax 3-day average. If the livestock killed is cattle of less than one year of age, the producer has the following options: Producers have the choice to accept compensation at the time of loss, or Producers can choose to wait until the end of October and receive compensation based on the Canfax average for the month of October, based on an average weight of 550 pounds The minimum payment on a confirmed cattle kill is $400. Wolves: The majority of predation payments is due to wolves, although other livestock losses are compensated similarly. Approximately $175K is available thru Alberta Fish and Wildlife annually. This includes approximately $20K for livestock that may be killed accidentally by hunters. Grizzly Bears: There is no hunting season on Grizzly. Approximately 2/3 are captured and relocated. It is a time-consuming issue for Alberta F&W. Grizzly Bear losses are compensated by the Alberta Conservation Association through a Wildlife Damage Fund, which is funded through the sale of licenses, etc. Prevention / Education Alberta has a prevention / education component, addressing best management practices with fact sheets, online aids, and officer trainings, as well as human / wildlife interaction campaigns such as Bear Smart. Coyote Predation Management Program Coyote is administered fully within the Alberta Agriculture and Rural Development. Status: The coyote is classified as Secure in the current General Status of Alberta Wild Species report, which defines the status of all wild species in Alberta. Therefore the coyote not included in the Wild Predator Compensation Program. P a c i f i c A n a l y t i c s I n c p a g e 2

56 Coyote Program Execution The coyote management program is delivered locally into counties and municipalities, through an Agricultural Services grant from the Province of Alberta. The program is implemented locally with Agriculture field staff, i.e. extension agents, who live and work in the area. The coyote predation package includes verification, control or removal, and follow-up. The field staff manages the complete coyote predation package Coyote Compensation No compensation for coyote predation. Coyote Removal Removal of coyotes is through various tools available to the Agricultural Field staff, such as guns, traps, snares and toxins. Toxins are available for M44 devices, Livestock Protection Collars, and Compound 1080 tablets. The local officers are trained in these methods, although committing sufficient time for proper management is sometimes an issue. In addition, an Alberta resident may hunt coyote, without a license, throughout the year on land to which he has the right of access, except on unoccupied public lands (i.e. forested public lands), where hunting is only permitted during coyote hunting season. Similar rules apply to a non-resident of Alberta who holds a wolf/coyote license. Prevention / Education Alberta Agriculture and Rural development also has educational materials and instructions in predation mitigation. A recent publication highlights all points of coyote predation and Best Management Practices for livestock producers: Coyote Predator Control Manual and Field Guide, March SWOT Strengths Weaknesses Division of program management due to workload (i.e. coyote thru ARD and major predators thru AFW) Reasonable program, with some responsibility placed on producer and some on the province. Provincial funding is strong at this time. Local administration of coyote predation programming, esp. Alberta ARD through counties & municipalities Some wolf / coyote crossover issues (i.e. which predator, how to remove, etc.) Selling the program to all livestock producers. Beef producers are responding to the program more than sheep producers, perhaps based upon no compensation for coyotes. Cattlemen have organizational voice. Wild Predator Compensation Program Predation management is the third priority for Alberta Fish and Wildlife, after public P a c i f i c A n a l y t i c s I n c p a g e 3

57 Opportunities Complete package of program delivery to producer from ARD (coyote) and AFW (other predators) Threats safety, and property protection / enforcement. Insufficient time to manage predation. Fewer FWS officers are doing more, Alberta F&W program costs: removal (i.e. hours dedicated to trapping and monitoring, including overtime hours and fuel.) research (i.e. predator collaring and monitoring, with possibility of predator or collar loss. Example: Bear $8000 each.) Improvements in research, GPS/satellite collaring assists in pack movement, management and control. Renewal of toxin license every 5 years assures Alberta regulators that ARD is responsible user Funding cuts. Public sentiment against toxins. Use is threatened, especially with other jurisdictions ending their use of M44 and Compound Contacts Ken McAdam Sustainable Resource Development Alberta Fish and Wildlife Enforcement and Field Services Vaughn Christensen Alberta Ministry of Agriculture Neil Brad Alberta Fish and Wildlife Provincial Compliance Officer (former) P a c i f i c A n a l y t i c s I n c p a g e 4

58 MANITOBA LITERATURE REVIEW AND SWOT M ANITO BA WILD LIF E DAMAGE COMPENSATION PROGRAM The Wildlife Damage Compensation Program is administered by the Manitoba Agricultural Services Corporation. (MASC) under Manitoba Conservation. The program has two main components wildlife damage to agricultural crops, and predation on livestock. Funding The Wildlife Damage Compensation (WDC) program makes payments to eligible producers for livestock loss/injury and crop damage due to wildlife. The program is cost-shared by the Government of Canada (60%) and Manitoba (40%). The WDC program is cost-free for eligible producers. Predators The program compensates for livestock killed or injured from predatory attacks by bears, cougars, wolves, foxes, or coyotes. The main predators in Manitoba are coyotes and wolves. In 2009, producers reported 805 calves killed by coyotes, and 206 cattle predated upon by wolves. Eligible livestock Eligible livestock in the program are: cattle, horses, sheep, hogs, wild boars, goats, elk, deer, bison, llamas, donkeys, ostriches, emus and other ratites. Verification Verification is through the Manitoba Agricultural Services Corporation (MASC). The livestock producer must contact an MASC insurance office to register a claim within 24 hours of discovering the attack. An adjuster will visit the site and access loss or injury, determining sufficient evidence for full, partial, or no compensation. Claims are normally paid 4-6 weeks after the inspection is complete. A Manitoba Conservation Natural Resources Officer will only get involved if there is a suspected abuse of the system, where a producer reports repeated livestock loss and seeks what might be deemed as compensation from a non-predator death. Removal Predator removal is carried out under the Problem Predator Removal Service (PPRS) under contract with the Manitoba Trappers Association. (MTA) Livestock producers must have an active claim number from Manitoba Agricultural Services (MASC) to request trapper services. Trapper registered with MTA for Problem Predator Control will be contacted for problems in their area. First Nations and aboriginal trappers are encouraged to participate A special kill permit is provided to MTA for predator control outside of trapping season. Licensed trappers traditionally use humane trapping techniques or the call & shoot method. P a c i f i c A n a l y t i c s I n c p a g e 5

59 Remuneration is on an hourly basis up to 24 hours, with extensions granted with written permission from a Natural Resources Officer. Trappers are paid for their travel expenses, on a per kilometer basis. Livestock producers are legally permitted to kill animals that are predating upon their livestock or are jeopardizing their personal safety. Alternately producers can designate others for predator removal on their operation. Any removal must be reported immediately to MASC. Protected species are grizzly bear and cougar and must be reported to Manitoba Conservation for management assistance. The goal of the Problem Predator Removal Service is removal of the problem predator rather than elimination of the predator population. Compensation Assessed values are based upon the average commercial market price for each type and class of livestock, derived from either the CanFax weekly summary or listing from MAFRI. In 2010 the Wildlife Damage Compensation program covered 80% of the livestock market price. Beginning April 1, 2011, compensation increased to 90% year. In April 2012, the amount will increase to 100% of the value of the loss. Probable death to livestock but not confirmed predation is compensated at 50% of the value. In all cases, there must be sufficient animal remains to determine the cause or probable cause Compensation payment increases above 80% are funded solely by the Province of Manitoba Registered purebred livestock are valued at twice that of the commercial market animal, and the maximum allowable per animal is $2000. Education / Prevention The wild predation educational component is led by Agriculture, Food, and Rural Initiatives (MAFRI). The Ministry has numerous publications and educational articles directed toward Manitoba livestock producers. The province provides no financial support for implementation of best management practices, although the official in charge at MAFRI is writing some BMP producer subsidy costs into a new proposal. SWOT Strengths Opportunities The program limits risk to livestock producers, and provides sustainability to the Manitoba livestock industry Strong funding Additional focus on education and prevention measures Re-allocation of compensation money to Weaknesses Threats Lack of emphasis on education and prevention Priority placed on compensation rather than prevention Funding cuts P a c i f i c A n a l y t i c s I n c p a g e 6

60 BMPs and predation prevention. Movement of admin and compensation of program to MAFRI, possibly a better fit than under Manitoba Conservation. Contacts Cameroon Meuckon Problem Wildlife Biologist Manitoba Conservation (204) Mamoon Rashid Business Development Specialist Manitoba Agriculture, Food, and Rural Initiatives mamoon.rashid@gov.mb.ca P a c i f i c A n a l y t i c s I n c p a g e 7

61 ONTARIO LITERATURE REVIEW AND SWOT W ILDLIFE DAMAGE COMPENSATION PROGRAMS FOR LIVESTOCK Background The Ontario government is in the transitional phase of its agriculture-wildlife conflict program as part of the implementation of the province's Strategy for Preventing and Managing Human-Wildlife Conflicts. The guiding principles of the Strategy include: Recognizing that wildlife has intrinsic ecological, economic, social and cultural value Responses to human-wildlife conflicts should be ecologically sound and based on scientific and technical knowledge Outreach and education are important tools for minimizing human-wildlife conflicts. In May 2008, two draft conflict strategies (Human/Wildlife; Agriculture/Wildlife) were released, reflecting the input of several provincial ministries and >30 stakeholders, including agricultural organizations; hunting and trapping associations, animal welfare groups, environmentalists; and conservationists. In the summer of 2010, a discussion paper on the Strategy was circulated for comment and as a part of consultations held with a wide variety of groups, such as: Ontario Federation of Agriculture; Ontario Soil and Crop Improvement Association; National Farmers Union; Christian Farmers Federation of Ontario; Ontario Cattlemen's Association; Ontario Sheep Marketing Agency; and Association of Municipalities of Ontario. These groups met with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) and the Ministry of Natural Resources (MNR) to provide feedback on the strategies. A summary of the original discussion paper with initial feedback from these meetings was posted on OMAFRA's website, and public comments were accepted until October 1, Recommendations and revisions to the Program are still in process. However, the following incorporate some proposed changes related to livestock producers. Proposed Changes P a c i f i c A n a l y t i c s I n c p a g e 8

62 Eligible livestock species would enlarge to include sheep, cattle, horses, donkeys, mules, rabbits, hogs, goats, elk, poultry, deer, bison, fur-bearing animals, llamas, alpacas, ostriches, emus, and rheas. The program would compensate producers for livestock killed or injured by coyotes, wolves, bears, foxes, fishers, cougars, lynx, bobcat, ravens, eagles, hawks, crows, turkey vultures, weasels, raccoons, mink or elk. Investigation / Verification Livestock producers can make claims to their local municipality for livestock losses attributable to attacks, for instance by wolves, coyotes, or wild dog. When the owner of livestock believes that they have suffered a loss of livestock due to predation by a coyote, wolf or a stray dog, the owner should immediately notify the valuer for their local municipality, or the Municipal Clerk. The valuer will make a full investigation and submit a written report within 10 days to the Municipal Clerk. A copy of the report is also provided to the producer. The valuer s report will give details regarding the extent of the damage to the livestock and the amount of the compensation claim awarded. The valuer must also state in the report whether or not the livestock was killed or injured by coyotes, wolves or dogs. Producers are also responsible for filing an affidavit with the Municipal Clerk within ten days of notifying the clerk or the valuer of the attack on their animals. The affidavit must state that, to the best of the producer s knowledge, the animals were killed by a coyote, wolf or dog. Where it is determined that the claim is valid, the municipality is not liable to pay more than is required by the regulations. Conversely, the municipality may not set the maximum amounts of compensation lower than those established in the regulations. Compensation Present Maximum Compensation $200 per sheep/goat/swine $1,000 per head of cattle $500 per horse $1,000 per year for poultry of one owner $20 per rabbit, maximum of $1,000 per year $100 per fur bearing animal Proposed Compensation Program revisions will probably result in an increase in maximum values of compensation for some livestock. For example, the current maximum value for sheep is $200 per animal, which is below the current market values. The updated maximum values would potentially result also in breeding sheep being valued at a higher level. Maximum values of compensation are to be developed by the agriculture-wildlife conflict working group. If a producer does not agree with the municipal valuer s report, s/he may appeal to the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). P a c i f i c A n a l y t i c s I n c p a g e 9

63 Removal Removal is not the desired method of wild predator management in Ontario. The Ontario Ministry of Natural Resources (MNR) has worked with other ministries, federal agencies, and stakeholders to develop the Strategy for Preventing and Managing Human-Wildlife Conflicts in Ontario. Livestock producers who have persistent predation issues contact MNR in order for a wildlife officer to examine options available and assist in arranging steps in mitigating the predation issue, which may include removal. The Fish and Wildlife Conservation Act sets out the legal actions property owners can take to deal with problem wildlife. Generally, landowners or their agents may capture, kill, or harass problem wildlife to prevent damage to their property. There is no closed season for coyotes in the majority of southern Ontario. Anyone who kills a wolf in protection of property is urged to report it to the local ministry office. Those living in most of northern and central Ontario must immediately report the killing of a wolf or coyote in the protection of property. Education / Prevention The Strategy for Preventing and Managing Human-Wildlife Conflicts in Ontario is committed to a robust wildlife predation education and prevention program, including: Developing or enhancing public information fact sheets, information articles and tools on preventing and managing conflict. Information would also be available in printed form. Developing a one-window access for producers (via a website or information bundle) to centralize wildlife management information on the web with links between OMAFRA and MNR. Information would also be available in printed form. Pursuing additional opportunities for outreach via Ontario's stewardship programs and initiatives. Enhancing the emphasis on best management practices and knowledge transfer through existing channels such as trade shows, industry events, OMAFRA-sponsored meetings and displays. Exploring the expansion of predation content for future Environmental Farm Plan workshops. SWOT Strengths Opportunities Thorough and transparent wildlife conflict consultation process. Numerous stakeholders involved in wildlife conflict consultation process Weaknesses Threats New program not yet operational. (Weaknesses identified later.) Stakeholder uncertainties due to new program roll-out. Increasing technology in predation management Research in predation and wildlife management Budget shortfall Controversy over lethal / non-lethal tools of management Climate change impact, including wildlife P a c i f i c A n a l y t i c s I n c p a g e 10

64 movement and predator behaviour patterns Contact Jake Bietz Policy Advisor Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) P a c i f i c A n a l y t i c s I n c p a g e 11

65 SASKATCHEWAN LITERATURE REVIEW AND SWOT SASKATC HEWAN LIVESTOCK PREDATION PROGRAM The Saskatchewan Livestock Predation Program is administered under the Saskatchewan Crop Insurance Corporation (SCIC), which defines livestock as a crop. The Program began on April 1, 2010 after a oneyear pilot to assess demand and feasibility, and was based on a similar initiative in the Province of Manitoba. The program is funded in the provincial budgeting process through the Ministry of Agriculture. Policies and guidelines were developed by the Saskatchewan Livestock Predation Committee. The Committee includes representatives from the Ministry of Agriculture, Ministry of Environment, and members from associations representing the sheep, cattle, cattle feeding, equine, and specialized livestock industries. Livestock Livestock eligible for compensation include: Cattle, sheep, goats, bison, horses, hogs (excluding wild boar), elk, fallow deer, llamas and donkeys Ostriches, emus, ducks, geese, chickens and turkeys Other less common species Predators Compensation is eligible from predation by coyotes, bears, cougars, lynx, foxes, wolves, eagles or any other wild animal that causes injury or death to eligible livestock. The principle predators in Saskatchewan are coyote (primarily attacking new calves and sheep), and wolves (primarily attacking cattle and horses). There have been claims since the program began in April Verification Process Producers who have predator problems contact one of the 21 SCIC customer service offices in the 21 counties in the province. SCIC will review and determine whether an adjuster predation specialist is required. If so, a specialist in the area will be contacted. The SCIC has approximately 220 adjusters, some of which are trained in predator verification. Response is usually within hours. A farm visit is made and a producer waiver is signed before investigation begins. Appropriate permits will be obtained. The producer is encouraged to take pictures immediately, and preserve the carcass. (i.e. move, cover) Payment can and has been based only on picture evidence. A predation specialist may be contacted to remove the problem animal(s) and provide the producer with suggestions to assist in future problems. P a c i f i c A n a l y t i c s I n c p a g e 12

66 Cougars, wolf, and bear predation issues must be reported to Conservation Officers within the Ministry of Environment. Removal The Livestock Predation Program hires experienced hunters or trappers under a 3-day contract. There are contract specialists and at least one per county office. The predation specialists will the remove the problem animal and provide the producer with written information and/or train in methods of resolving future predation issues. In some cases, the 3-day contract may be extended. Compensation 100% compensation is paid for death of livestock due to predation. In the event livestock are injured, producers can receive up to 80% of the animal s value to cover veterinary costs. If the animal dies, the other 20% is paid. 50% compensation is provided if predation is suspected but cannot be confirmed. If an animal s carcass cannot be found or there is no evidence to prove a predator attack occurred, compensation may not be paid. Minimum values for compensation include $400 for beef calves, $150 for foals, $60 for sheep and $60 for goat kids. For beef calves, pricing will be determined using CanFax values the week before, the week of, and the week after the loss. The highest of these three values will be given. The producer will receive a $400 minimum price. Compensation for other species and registered livestock will be determined using market sales data. Prices will be set using months when sales volumes are high. Education / Prevention Education and prevention has not been the focus of the new 2010 program. However, now adjusters and predator specialists are receiving further training and encouraging best management practices for producers. SWOT Strengths Weaknesses Strong funding from province Livestock Predation Committee comprised of many stakeholders who developed program Saskatchewan began program with 100% compensation, compared to Manitoba s 80%; Increased confidence from producers Training has been weak in early part of program, i.e. issues with verifying kills. Complaints of lack of predator verification in community pastures among sheep producers. High emphasis placed on compensation rather than prevention P a c i f i c A n a l y t i c s I n c p a g e 13

67 Opportunities Increase in educational and predator prevention programs Threats Funding: Compensation program is larger than expected. Program requires sizeable budget, which might be threatened Many predators (including coyote) covered Many livestock, domestic and exotic, covered Contact; Daniel Baber Saskatchewan Prevention and Predation Program Saskatchewan Crop Insurance Corp P a c i f i c A n a l y t i c s I n c p a g e 14

68 COLORADO LITERATURE REVIEW AND SWOT C O LORADO WILD P REDATOR PROGRAM Assistance for wildlife predation on livestock is addressed thru cooperation between USDA/APHIS/Wildlife Services, Colorado Division of Wildlife, Colorado Dept. of Agriculture, counties, and local livestock associations. Some salient points are: Colorado has a sizeable livestock industry. In 2008, the total value of cattle (cow/calf) was $2.83 Billion, and sheep inventory was valued at $59.2 Million. Wild predation issues primarily focus on sheep losses by coyote. In FY 2008, the Colorado branch of the NASS reported that producers lost an estimated 23,800 sheep and lambs to predators in 2007, or 41% of all their losses. The value of these losses was placed at US$2.44 million. Predators Primary predators and number of reported incidents last year Coyotes (~3000 last year) Black Bear (55) Cougar (<12) Wolves: very small but increasing population from northern Rocky states. Funding USDA / APHIS (56%) and State of Colorado /cooperative agreements (44%) such as livestock associations, county funding, park fees, etc. Removal Rancher has authority through Colorado state law to kill any predator in the act, or possibly involved in killing of livestock, any time of year. Others must have hunting license to kill member of predator family, including coyote. Removal services are implemented thru APHIS/Wildlife Services. Cougar and Bear are always removed on a per-animal basis Removal through aerial hunting is common, primarily fixed wing aircraft. One is USDA owned, and two available through contract services. Almost exclusively targeting coyotes with three criteria: o o o past area of predation locate in lambing ranges history of offending packs Tools allowed for coyote removal include hunting, toxin collars, and M44 (allowed for 30 day period in calendar year). Not allowed in Colorado are leg hold traps or Compound P a c i f i c A n a l y t i c s I n c p a g e 15

69 Compensation There is no compensation for coyotes. Bear and Cougar compensation is through Colorado Division of Wildlife, using the daily market value of the livestock, or documented value for an exotic or purebred animal. Prevention / Education Approximately 80% of livestock producers report using non-lethal predator deterrent tools. Best management practices (BMPs) information is disseminated in various forms. BMPs are always the priority action in predator management, with removal as the last resort. SWOT Strengths Weaknesses Ample funding, both Federal and State (i.e. state mining resources) Effective management tools have been taken away, such as leg-hold traps. Opportunities Threats Funding cutbacks, especially Federal Hopeful predation management research underway at WS Wildlife Research Center Negative public sentiment: Why are our taxes protecting private property, such as livestock? Increase in predator population Increased restrictions on removal Contact Mike Yeary Colorado State Director USDA / APHIS / Wildlife Services W. Alameda Parkway, Suite 204 Lakewood, CO mike.a.yeary@aphis.usda.gov P a c i f i c A n a l y t i c s I n c p a g e 16

70 IDAHO LITERATURE REVIEW AND SWOT IDAHO WILD PREDATOR PROGRAM Much of the livestock grazing in Idaho occurs on Federal and State range land, where livestock is often vulnerable to predation. Predators include coyote, wolf, black bear, grizzly bear, mountain lion (cougar), red fox, and eagle. Predation is the single largest cause of sheep mortality in Idaho. In 2008, predators killed a reported 10,600 sheep and lambs in Idaho. Coyotes were responsible for approximately 2/3 of these losses. Data from the National Agricultural Statistics Service (NASS) indicate that predation losses in Idaho from averaged about 3.7% for lambs and 1.3% for adult sheep. Research indicates that, in the absence of a management program, predator losses would probably average 17 % for lambs and 4.5 % for sheep. A conservative economic analysis of predator control efforts to protect sheep in southern Idaho has shown a 3:1 benefit-cost ratio. Program highlights Grey Wolf Grey wolf has been the predator for which legislative and management authority has vacillated considerably in recent decades in the US, including Idaho: (Endangered, 1974); re-introduction (1995); Idaho state control (2006); Endangered listing - Federal Wildlife Services (WS) control (2010); De-listed and back to Idaho State management (2011). Wolves are no longer under the protection of the federal Endangered Species Act (ESA), and now they are managed as a big game animal, similar to black bear and cougar. A hunting season is reported to be scheduled by Idaho Fish and Game Commission later in Wolves that are seen molesting or attacking livestock or domestic animals may be disposed of by the owner, their employees, agent, or animal damage control personnel. No permit from Idaho Fish and Game is necessary. The incident must be reported to IFG within 72 hours. If the livestock producer suspects predation from wolf (or another predator), the following procedure is in place: Producer contacts USDA/APHIS Wildlife Services office. WS investigates. Wildlife Services informs Idaho Dept. of Fish and Game, who decides appropriate action, including possible removal. WS contacts trapper specialists for removal. Compensation (wolf) o o Before de-listing: Defenders of Wildlife payout (100% confirmed kill; 50% probable kill) After de-listing (2011): Idaho F&G (same compensation, with APHIS/WS money this year); 2012 funds are uncertain P a c i f i c A n a l y t i c s I n c p a g e 17

71 Prevention / Education Coyote o State and Federal collaborate in education / prevention and dissemination of Best Mgmt. Practices information Coyote is listed by Idaho Fish and Game as fur-bearing predatory wildlife. It may be hunted or trapped without restriction with a license issued by Idaho F&G. No livestock compensation is provided. Grizzly bear There are very few in Idaho. The species is managed under USDA/APHIS/WS. Other comments Good collaboration between State and Federal agencies, and the Nez Perce Tribe in live-capturing and radio-collaring wolves to monitor expanding wolf populations. Idaho has several special interest groups. The most powerful lobbies are the livestock industry and hunters (i.e. elk), which monitor the ungulate population. Less powerful, but vocal, groups are the animal rights activists, including those who desire the wolf to be re-listed as endangered. SWOT Strengths Weaknesses Local execution of programs through Idaho F&G. Good collaboration between USDA/Wildlife Services, Idaho F&G, Idaho Dept. of Agriculture, and Nes Perce group. Changing status and management of wolf; resulting inefficiencies and public confusion. Producer resentment with large wolf population, when threshold was met in Lack of regulated removal causing producers to use self-removal. Difficulty to reverse this practice. Opportunities Threats Technology: New research, especially on predator movement (Example: Research on terrain that affects pack movement, i.e. most likely den or rendezvous locations) Increased producer resentment toward government over unresolved predator issues, especially politicized status of grey wolf. Funding uncertainty re wolf program Federal and state budget cuts Interest group efforts to re-list wolves into Endangered Species Act. Contact Dr. Hillary Cooley P a c i f i c A n a l y t i c s I n c p a g e 18

72 Grey Wolf Coordinator, Idaho USDA/APHIS/FWS P a c i f i c A n a l y t i c s I n c p a g e 19

73 MONTANA LITERATURE REVIEW AND SWOT MONTANA WILD PREDATOR PROGRAM Montana agriculture, especially cattle and sheep production, is vital to the state s economy. Montana s diverse and abundant wildlife is also an important resource. In 2007, predators caused an estimated $1.2 million in losses to Montana s sheep industry, up 16% from Cattle losses are not reported annually, but have increased over the last six years. Program highlights are: Predators Main predators are coyotes, wolves, grizzly bears, black bear, red foxes, and mountain lion (cougar). Coyotes are by far the most common predator. Wolves are second, primarily located in the Northern Continental Divide and Yellowstone Divide of the Rocky Mountains. This population is growing, due to repopulation, and is now moving east, into the flatlands and interfacing with private landholders and livestock. Grizzly bear population is slowly increasing, but not a real predator issue. Estimated at Funding Black bear and mountain lion are also relatively minor predators. Funding sources for Montana s predation management program include USDA/APHIS/ Wildlife Services; state of Montana, Montana Fish, Wildlife and Parks; a livestock buy-sell head tax ; and supplemental county head tax in certain counties for selling cattle and sheep. Management All of the predators mentioned above are managed through the Montana Department of Fish, Wildlife and Parks. The status of the grey wolf has changed several times due to successful repopulation in the state. It is now delisted from endangered as part of the US budget continuing resolution passed by Congress in May Therefore, wolf management has transferred from USDA /APHIS Wildlife Services (WS) to the Montana Department of Fish, Wildlife and Parks. APHIS WS continues to support wild predator management through funding, education materials, and technical assistance, as requested by the state. Due to distances, predator management is often performed through aerial operations, including helicopter. This includes predator capture, radio collaring, and monitoring, especially for wolves. Compensation Predation from wolves and grizzly bear are eligible for compensation. The USDA Wolf Predator Compensation Program for wolves has now ended. The State Fish, Wildlife, and Parks office now compensates for grey wolves. Grizzly Bears are compensated by the NGO Defenders of Wildlife. P a c i f i c A n a l y t i c s I n c p a g e 20

74 Montana has a State Livestock Loss Board, appointed by the governor. This board administers compensation, based upon daily USDA market reports of livestock class and weight. Verification (Investigation) Verification is performed by APHIS / US Fish and Wildlife Service, including confirmed or probable predator kills. Montana takes an incremental approach to predation management, including radio collaring and monitoring. Removal When wolves were listed, limited removal was allowed under the Montana Wolf Plan and a Federal 10J Rule administered by US Fish and Wildlife Services. Removal allowed when eyewitness to a kill or predator in immediate vicinity to a fresh kill. Due to the recent grey wolf de-listing, a legal harvest (hunt) is planned this year. US Fish and Wildlife conducts a 5-year review of wolf population levels in the state and recommends appropriate management practices. Coyotes are not regulated by state or federal government and can be shot year round by residents or non-residents. There is no compensation. An estimated 67% of coyotes are removed via aerial shooting - fixed wing aircraft or helicopter. Other comments The USDA/WS National Wildlife Research Center (NWRC) conducts an extensive program of research and methods to reduce and mitigation by predators on sheep and cattle. There is some research carried out of the effects of the wolf repopulation on ungulates and migration patterns, such as elk remaining in valleys instead of returning to mountains due to the presence of wolves. Montana has some vocal special interest groups, but most are moderate. Very few have good science behind their positions. Some ungulate populations appear to be affected by the wolf reintroduction Elk migration patterns are altered Elk remain in valley instead of returning to mountains (presence of wolves) SWOT Strengths Weaknesses Montana has multiple income streams for Wild Predation funding. Management approach is through control damage rather than outright pack elimination. Wolves and coyotes increasingly intermingling in the state. Tools presently used for coyote management may not be applicable for wolf, such as toxins and snares. Livestock producers attitude: government should solve predation issue, since the gov t P a c i f i c A n a l y t i c s I n c p a g e 21

75 caused it. (i.e. govt exterminated the wolves now gov t is repopulating, causing issues with our livestock and it is expensive to manage. ) Opportunities Threats Research at NWRC appears promising Program budgets may be cut GPS collaring and other technology aids would provide: o o o Better wolf population estimates Better tracking of predator movement around livestock to support prevention Better monitoring of predation killing Record prices for livestock equate to high value loss for animals killed by predation. Increasingly affect producer bottom-line. Some NGOs and special interest groups are very passionate with a single predator focus and want no intervention. (Other NGOs are more moderate and reasonable.) More vocal due to wolf de-listing. Contact John Steuber Montana State Director USDA / APHIS / Wildlife Services john.e.steuber@aphis.usda.gov (406) P a c i f i c A n a l y t i c s I n c p a g e 22

76 WASHINGTON LITERATURE REVIEW AND SWOT W ASHINGTON WILD PREDATOR PROGRA M Overview In the 1980s, Washington contracted with USDA for predation services. Washington game controllers managed the program. Federal funding was cut and in ~2005, Washington Dept. of Fish and Wildlife moved into enforcement only of a nuisance control program, primarily on small animals. Public safety was the priority, especially as the urban population increased. Services were privately contracted, focusing in nuisance wildlife, including coyote. The program was not subsidized by the state, with some funds from a livestock tax. For decades, Wash Dept. of Fish and Wildlife (WDFW) has paid for commercial agricultural/horticultural crop losses due to deer/elk forage and trampling damage, because a crop did not define livestock. WDFW has never paid for commercial livestock losses caused by predatory wildlife. Legislation attempts to allow WDFW goal to pay for livestock loss was unsuccessful, partially because the initial proposed program was too broad. It covered all livestock losses from any producer and from all depredating wildlife species including coyote. The estimated fiscal impacts of this program in the first few years was estimated at >$1 million in claims alone. WDFW never supported broad predator legislation, because of its lack of management capacity. Although the predation issues remained unresolved, the process created a working relationship between WDFW and the Cattlemen s Association of Washington State and other stakeholders. Washington legislation eventually approved a scaled down program: Predatory wildlife included black bear, cougar, grizzly (grizzly depredation on livestock is minuscule), and wolf. Coyote is not included. Losses can only be made by those that are legitimate farmers under definition, which includes a minimum of $10,000 gross annual income from the previous tax year, and verified by Tax Schedule F and other tax forms, and signing both a declaration form and a penalty of perjury statement. Losses could only be claimed for sheep, cattle, and horses. Predator Management Two big issues with Washington predator management, both legislative: 1. No funding for programs, although legislation was passed. 2. Legislature has limited predation management tools a. Public referenda, led by NGOs (i.e. Humane Society, PETA, PAWS, etc.) i. Initiative No baiting of black bears P a c i f i c A n a l y t i c s I n c p a g e 23

77 Predators ii. Initiative No hunting of cougar with dogs 1. No body trapping of fur-bearing animals 2. Sale of fur prohibited, including coyote 3. Producer waiver to trap predators can be applied for (note: several days to process application.) The primary predator impacting livestock is coyote. There is predation by mountain lion (cougars) and very few Grizzly bear attacks. Wolves are located in the eastern part of the state, and are a small but growing concern in Washington. Wolves are presently managed by USDA/APHIS/Wildlife Services (WS). Verification Most verification is done by the USDA/APHIS/ Wildlife Services in the USA. If money was appropriated, trained local professionals could do verification. WDFW cannot afford the fish & wildlife officers to investigate these depredations. The department now has a MOU or contract with the WS to continue verification, and WDFW concentrates any funding on compensation, removal, and education. We re still in our infancy regarding these changes. The major issue has been the legislature s failure to appropriate money which not only affects paying claims, but also cooperative and proactive methods to deploy to the field to assist landowners. Compensation Payment is the last option, due to funding cuts. WDFW has statutory authority to compensate. However, because of no appropriated money to pay for claims, WDFW has limited funding for livestock losses. Present program is under Deer and Elk Crop Damage Payment Plan. Fifty percent of the crop damage fund is eligible for livestock compensation. (i.e.: $75K for livestock out of $150K) Tight eligibility criteria must be met, including proof of legitimate producers through tax records. Result is that, in 2010, only 12 claims were made for compensation, when some years ago, there were approximately 50 claims Education Public messaging is done via websites. Washington has developed information, especially dealing with human/wildlife conflict issues, such as Living with Washington s Wildlife Best Management Practices for producers are also available in hard copy and on line thru WDFW and Washington State University. Information is also available through APHIS / Wildlife Services. P a c i f i c A n a l y t i c s I n c p a g e 24

78 SWOT Strengths Weaknesses Collaboration between local groups Transparency re lack of funding for livestock predation and seeking common solutions. Program buy-in by local stakeholders. Lack of funding Lack of predator removal tools Washington s high tech climate embraces predation management Compensation criteria appear to limit illegitimate producer claims. Opportunities Threats Increased technology to support predator management and producer BMPs Greater public messaging via websites Further funding restrictions Peri-urban population growth; human/wildlife conflict More effective BMPs in place for producers Increase in livestock predators Special interest groups pressuring Wash legislature for more restrictive measures Contact Sean Carrell Problem Wildlife Coordinator Washington Department of Fish and Wildlife Phone: , Fax: Enforcement website: P a c i f i c A n a l y t i c s I n c p a g e 25

79 WYOMING LITERATURE REVIEW AND SWOT W Y O M ING WILD PREDATOR PROGRAM Agriculture is a primary industry in Wyoming, with a $1 Billion economic impact. The cattle industry accounts for approximately 75% of agricultural cash receipts. Wyoming ranks third in national sheep production. The state ranks first nationally in average size of farms and ranches, which reflect the challenge with livestock predation. Predators include coyote, red fox, mountain lion, black bear, grizzly bear, and wolf. Coyote is the most significant predator and responsible for 66% of sheep lost to predation. Wyoming Agriculture Statistics Service (WASS) report that sheep producers lost 19,600 sheep and lambs to predators valued at $1.4 million, a decline from$1.8 million to WASS estimates the value of cattle/ calves lost to predation at >$1.5 Mill in Predator Management USDA/APHIS/Wildlife Services has no regulatory authority, but only helps with wildlife in Wyoming through cooperative agreements. Each state, including Wyoming, has control of resident wildlife species. Wyoming management is divested into 23 counties, with Predator Management Districts -- each managed by a 10 member Board, representing cattlemen, sheep producers, trappers/hunters, and environment/outdoor groups. The Wyoming Animal Damage Management Board overseas these Districts and formulates animal damage policy. The management focus is on ranch-level population control rather than state-level. Predators Wyoming has three classifications of predation: Nuisance predators, administered by Wyoming Department of Agriculture o o o o Coyote Red fox Skunk Racoon Trophy game animals, administered by Wyoming Dept. of Game and Fish (WDGF) o o Black bear Cougar Endangered Species, with increasing population, administered by USDA/APHIS/ US Fish and Wildlife Service (WS) o o Wolf Grizzly bear P a c i f i c A n a l y t i c s I n c p a g e 26

80 Program Funding Funding comes from several sources, with approximate elements at: $2.5 M Federal, $2.5 Million State, and a $1 sales tax on all cattle / sheep sales, which go to counties. Nineteen of 23 counties divide the $2.5 million in state funds to manage their program locally. Each county receives $ ,000 annually for predation management. Wolf management Wolves in Wyoming continue to be managed by USDA /APHIS/Wildlife Service (WS), at this writing. Unlike Idaho and Montana, the state does not have an USFWS approved regulatory framework for wolf management. Wolves have USFWS 10J legislative status, which allows for overall protection, but also removal of specific animals that are proven to be predating on livestock. Wolf / grizzly bear Wyoming contains the majority land area of Yellowstone Park, with a high concentration of grizzly bear and wolf. Both species spill over into bordering ranch land. Re wolves, the target population of 250 after re-introduction was reached in 2003 and has now grown to >450. Under the US Endangered Species Act (ESA), grizzly bears and wolves are managed similarly. Verification and Removal With evidence of livestock killing by wolf or grizzly, the producer contacts USDA/WS for verification. With 10J Rule Federal legislation, after approval through the Wyoming Fish and Game and Dept. of Agriculture, WS hires contact trappers for wolf removal services. With the grizzly bear, non-lethal means are attempted, including relocation back to Yellowstone. There is a three strike policy of predation with individual grizzly bears before removal. Compensation Land adjacent to Yellowstone Park is called the Designated Endangered Species Area. Wolf compensation in this zone is seven times (7x) the market value of the livestock. Grizzly compensation is 4.2 times (4.2x) the market value of the animal. The assumption is that predation is considerably higher than can be verified, and therefore the use of a multiplier. Outside of the Designated Endangered Species Area, compensation is at the market value of the livestock. Compensation is through Wyoming Fish and Game. Some ranchers complain of this discrepancy. Cougar / Black bear Big game (cougar, bear) predation claims are verified by US Wildlife Services, with compensation by Wyoming Game and Fish for the actual value of the livestock. P a c i f i c A n a l y t i c s I n c p a g e 27

81 Coyote Coyote are considered a nuisance predator. Concentration is on prevention and education. Each predator district performs coyote management as necessary, with support from WDGF and USDA/WS as requested. Removal methods allowable as listed below. There is no compensation for coyote predation. Predator Removal Wyoming allows several lethal and non-lethal methods of removal, including shooting, trapping, and toxicants. Fixed wing aircraft are regularly used, and toxicants for large predators include M44 and Livestock Protection Collars, almost exclusively for coyote management. The goal is to reduce the predator population on a local/producer level until the issue is dealt with. Prevention / Education Producers are reported to use up to 19 non-lethal best management practices (BMPs). USDA/WS, WDGF, and the University of Wyoming produce online and hard copy BMP materials. Extension efforts for coyote management are through the Wyoming Department of Agriculture. Ongoing research continues toward new BMPs. (Example: Wyoming researcher recently visited Eastern Europe countries to fact-find regarding adaptable breeds of larger guardian dogs for sheep producers.) Additional Comments SWOT Agriculture likes wildlife. Farmers and ranchers only want to be a part of decision-making process. America has love affair with wildlife. NGOs and special interest groups opposing predator management have very little or no accountability. Their positions are based on pseudo-science. Each must have a cause in order to raise money. The government must take a balanced approach. If government is overly protective to wildlife without biological reasons, the issue will go underground for remedies. The rancher will selfremove. The result will be wildlife management in chaos. o Example: The bald eagle is #2 predator against lambs in Wyoming. It is an ESA protected species, but there is no reason for this level of protection based on its population. Strengths Weaknesses Ample funding, due to high mineral prices in Wyoming Federal rather than State management of wolf / grizzly Local, county decision-making with transparent (volunteer) Boards. Creates high level of trust WS Director: I think we have the best managed predation program in the US. Insecure funds from USDA/WS Ranchers wary of USDA /WS as a federal agency with some poor policies in the past. Increased predation, especially adjacent to P a c i f i c A n a l y t i c s I n c p a g e 28

82 Yellowstone Park Opportunities Threats Results of livestock owner selfassessment of value-for-money re program management Best Management Practices research Funding cuts Special interest groups, especially focusing on ESA-listed species Agriculture is slowly losing ground to Animal Rights groups. Contact Rod Krischke Wyoming State Director USDA/APHIS/Wildlife Services (307) P a c i f i c A n a l y t i c s I n c p a g e 29

83 A P P E N D I X A: A N I N P U T - O U T P U T P R I M E R National Accounting (also termed Economic Accounting) assumes a company undertakes two steps in its production process. First, it purchases material inputs from other industries; and second, it transforms those material inputs into finished goods (or services), ready for resale. Take as an example a Restaurant. Restaurants buy fresh vegetables, meat, etc. from the Agriculture sector. Using other material inputs (e.g., electricity, cooking oil, etc.), it transforms them into finished dishes, which, in turn, are sold at a selling price higher than the cost of its inputs. The difference between the selling price and the material input cost is the mark-up or value-added. This value-added is used to pay for the kitchen and wait personnel, any taxes levied by governments, the depreciation of equipment, any interest costs the restaurant may have, and will also generate, the owner hopes, a profit. National Accounting asserts that the value which the restaurant sector adds to the economy (hence, the term value added ) is equal not to the total revenues of Restaurants, but only to this mark-up value. That is, the value of an industry to an economy is the difference between the value of its output (effectively, total operating revenues) and the cost of its material inputs. In this way, the Restaurant industry does not claim the value of the agriculture inputs it uses, which should rightly be accounted for by the Agriculture industry. As a result, there is no double counting when measuring the value of the entire economy. In other words: the value-added of the Outfitting Industry is the revenue from all of its sales to clients (output) minus all of its costs for payments to other firms for goods or services (material inputs), or: Value Added = Output (or Final Sales) - Material Inputs Another way of defining value added is that it is the sum of an industry s payments to employees, for indirect taxes, for depreciation and interest costs, and for profit: Value Added = Labour + Indirect Taxes + Depreciation + Interest Costs + Profit The resulting value-added of any firm (or industry) is available to be shared among labour (wages, salaries and benefits), indirect taxes and operating surplus. The operating surplus itself is shared between payments for the use of physical capital (depreciation), payments for the use of monetary capital (interest costs), and payments (profits) to the owner(s) of the enterprise. Value-added is an industry s contribution to, or direct impact on, the economy. And the sum of value-added of all industries is termed the country s Gross Domestic Product (GDP). An important distinction needs to be made between Financial Accounting and National Accounting. Under financial accounting, an industry which has a high value added (i.e., contributes a lot to the economy), can be unprofitable if, for example, its payments to labour or for interest costs are too P a c i f i c A n a l y t i c s I n c. p a g e A 1

84 high. Alternatively, low value-adding industries can be very profitable to their owners, depending on their usage of labour and their capital structure. Economists have standardized the measure of these flows and the inter-relationships of inputs and outputs among industries through the concept of Input-Output (I/O) analysis. The MAKE matrix (the top section of Exhibit 16 on page Error! Bookmark not defined. identifies the various types of output the sector produces. The USE matrix (the bottom section of that same table) highlights all of the various types of inputs used to produce that output. 23 One can readily determine from these tables that subtracting total Material Inputs from total Output leaves Gross Domestic Product (GDP). This GDP is equal to the sum of Wages and Salaries, Benefits, and Operating Surplus. The GDP-to-Output ratio is a measure of the direct contribution to the economy per dollar of output. Clearly, an industry that requires a lower dollar value of inputs to produce a given dollar of output is a higher value-adding industry. One must note, however, that a higher GDP-to-Output ratio does not imply that the industry is more important to the economy. It merely states that for every dollar of output the impact on the economy is greater. Obviously, when examining an industry s importance to an economy one must also take into account the total output of the industry. There is, however, another important characteristic of an industry that must be examined if one is to determine the importance of a sector to the local economy: its linkages to other industries. When inputs such as fresh produce or meat are purchased by the Restaurant sector, the industries supplying those goods and services (in this case farmers, food manufacturers, and food wholesalers and retailers) increase their own economic activity. This increased activity itself creates demand for other products. Farmers, for example, may need more fertilizers for their land and more petrol to run their machinery. Food wholesalers may require additional box material. The demand for extra fertilizers and petrol and box material will, in turn, stimulate activity in the fertilizer, petrol and box industries. The increased activity in the fertilizer industry will create greater demand for its own inputs, perhaps some chemicals. And so it continues down the chain of industries. The sum effects of all this additional economic activity are known as indirect impacts. Such indirect impacts (also known as multiplier effects or spin-offs ) on the economy clearly are important. They should not be ignored (as they usually are with financial accounting) if we are to measure the true benefits of an industry to an economy. An interesting observation is that, while it is true that high value-adding industries have low indirect impacts, those industries with relatively lower direct impacts have relatively higher indirect impacts. This is because, by definition, low valueadding industries consume more inputs per dollar of output and thus have a greater impact on their supplying industries. It should be noted, however, that the level of indirect impacts is highly influenced by the type of goods and services demanded and by the propensity of the companies (or the economy) to import those particular goods and services. The higher the propensity to import the required goods and services, the lower will be the effects on the local economy. Indeed, an industry that imports all its inputs will have virtually no indirect impact on the economy, save the small level of distributive activity (wholesale, retail and transportation margins) the imports may generate. 23 Output is closely associated with industry revenues and client spending, but there are important differences. Likewise, the inputs used by the Outfitting Industry are highly related to industry expenses. But, again, the differences are important. For a summary of these differences, see the next sub-section: Technical Differences. P a c i f i c A n a l y t i c s I n c. p a g e A 2

85 Increased industrial activity has a third effect on the economy. When additional wages and salaries are paid out, those dollars (appropriately adjusted for taxes and savings) are available to be re-spent on consumer goods and services. Take, for example, an additional $1 million in wages resulting in say, an increase of disposable income of $750,000. Depending on the spending patterns, this may result in extra consumer spending of say, $500,000 in the retail sector (the remaining being spent in the entertainment sector, restaurant sector, etc.). This will increase the economic activity of the manufacturers and other suppliers of consumer goods who, in turn, will increase their own employment and their own wage payments. The sum effects of this additional activity due to increased wages are known as induced impacts. Again, it should be clear that, like indirect impacts, induced impacts are highly influenced by the economy s propensity to import, as well as by taxation and savings rates, the level of wages paid to employees and the level of capacity at which the economy is operating. The question arises: given that there are many levels of indirect and induced spending which affect many, many different firms and industrial sectors, how can we estimate these impacts on the economy? Fortunately, economists have developed a method to estimate these impacts, by using the same input-output tables to which we already have been introduced. 24 However, since the base information is coming from financial statement data directly provided by operators, it is critical to understand how financial statement data are re-structured to meet National Accounting standards. These differences are discussed below. Technical Differences Although the National Accounting (Input-Output) measurement of the value and impacts of Outfitting begins with the same set of data as the financial results of the industry, a number of adjustments are required in order to conform to strict National Accounting standards. To avoid possible confusion, these technical differences between Financial Accounting and National Accounting should be understood. The intent here is not to provide a comprehensive or definitive discussion of these differences, however, but rather to provide a cursory overview. For a more in-depth discussion of the differences and of the methodology underlying National Accounting, the interested reader is referred to the National Accounting compendium published by the UN. 25 The following outlines the major differences: 1. The first and perhaps most important difference is that National Accounting measures all non-tax related revenues and expenses related to production, even those not itemized on the corporate income statement. Hence, gratuities paid to staff are included as output (in the case of the Outfitting Industry, as an increase in sports revenues). This increases output but not material inputs, and therefore it increases the estimate of GDP (Output Inputs) by precisely the amount of gratuities. Using our other definition of GDP (GDP = indirect taxes + wages, salaries and benefits + operating surplus), we see that the increase in GDP is reflected in an increase in wages and salaries equal to the reported gratuities. 24 For a detailed discussion of the underlying mathematics of Input-Output analysis, see Input-Output Analysis: Foundations and Extension, Ronald E. Miller and Peter D. Blair, Prentice Hall, System of National Accounts, Statistical Papers Series F No 2 Rev. 4, New York, 1993 P a c i f i c A n a l y t i c s I n c. p a g e A 3

86 2. Another (usually) off-budget item is an estimate of the value of imputed room and board. On the Output side there is an increase in lodging revenues and, since the provision of room and board is a value to the employee, it is considered equivalent to a wage subsidy, and thus contributes to overall GDP. Normally, the cost of food is already accounted for within the financial statement, thus the net impact on GDP is equal to the value of the imputed room and board. Statistics Canada has standard values that it uses to assess the value of this room and board and it is that standard that is used in this report. 3. At the same time, National Accounting omits revenues not directly related to the production process. Generally, these incomes are limited to interest and dividend earnings, but include nonoperating revenues related to rental incomes, commissions and the like. 4. A third difference is that, under National Accounting, the value of each input in the USE matrix is stated in producer prices. That is, all wholesale, retail, and transportation costs included in the purchaser price of a commodity are removed, as are all commodity taxes, indirect taxes and import duties. These distributive and tax margins, as they are called, are explicitly recognized in the USE matrix as separate line items. The reader should understand that this does not in any way reduce the total cost of inputs to the industry; it simply re-assigns the costs to different input categories. 5. A fourth difference lies in the treatment of merchandise sales. National Accounting treats the purchase of merchandise as partly a purchase from the manufacturer of the good (equal to the cost price of the good less distributive and tax margins) and partly a purchase from the retailer (equal to the mark-up for the good). Consequently, in an input-output table for a sector selling some retail goods, there is no recognition of the cost of the merchandise on the input (USE) side, and only the mark-up value is recognized on the output (MAKE) side. The cost of the merchandise is captured in the Manufacturing sector as output. It is for this reason that some analysts recognize certain manufacturing industries as direct tourism, even though tourists do not actually buy any goods directly from those manufacturers. 6. Related to this unusual approach to merchandise sales is the treatment of service margins. When a firm purchases a product (such as liquor, beer or wine) and re-sells it with a mark-up without any fundamental change to it, National Accounting recognizes only the mark-up or service margin as output. It then treats the purchase cost of the product (less distributive and tax margins) as an output to the original producer of the good. The main instance that affects most industries (besides retail sales) is alcohol sales. In this case, only the service margins are recognized as output, and the costs are assigned to the alcohol manufacturing sectors (beer, wine and liquor/distillers). In effect, then, the alcohol manufacturing sector is a direct provider to tourists under National Accounting principles. The following simplified diagram may help explain some of these differences. On the left hand side is a financial statement containing revenues for rooms, food and beverage, rental income, merchandise sales, and interest and dividend payments. Room and Food & Beverage revenues are mapped directly into the Accommodation and Restaurant categories, but with the addition of (say, 10%) gratuities. Rental Income is part of the production process and therefore is entered on the National Accounting side. Merchandise under National Accounting is the net value. Interest and Dividends are not part of production, and they are excluded from the right hand side. Operating Expenses are mapped and broken down according to their constituent parts: the cost at the factory gate, the P a c i f i c A n a l y t i c s I n c. p a g e A 4

87 distributive (wholesale, retail and transportation) costs, and the various taxes and duties. Wages go directly into the Wages and Salaries component, but include the gratuities. Financial Accounting National Accounting Rooms (100) Food & Beverage (100) Rental Income (50) Merchandise Sales (10) Int. & Div. (10) Gratuities Accommodation (110) Restaurant (110) Rental Income (50) Merchandise Sales (10-6=4) Material Inputs (50) Operating (100) Expenses Distributive Trade (25) P a c i f i c A n a l y t i c s I n c. p a g e A 5