Planet Money - Supply, demand, extinction

Episode Date: June 30, 2023

Back in the 90s, Ivan Lozano Ortega was in charge of Bogota's wildlife rescue center. And he kept getting calls from the airport to come deal with... frogs. Hundreds of brightly colored, poisonous frogs.Ivan had stumbled upon the poisonous frog black market. Tens of thousands of frogs were being poached out of the Colombian rainforest and sold to collectors all around the world by smugglers. And it put these endangered frogs at risk of going extinct.Today on the show, how Ivan tried to put an end to the poison frog black market, by breeding and selling frogs legally. And he learns that it's not so easy to get a frog out of hot water.This episode was hosted by Stan Alcorn and Sarah Gonzalez, and co-reported and written with Charlotte de Beauvoir. It was produced by Willa Rubin with help from Emma Peaslee. It was edited by Jess Jiang. It was fact-checked by Sierra Juarez. It was engineered by Josh Newell. Alex Goldmark is our executive producer.Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. It was around 9.30 at night on a Sunday in 1998. Ivan Lozano-Ortega is at his house in Bogota, Colombia, and he's getting ready to go to sleep when he gets a call. We are calling from the Bogota International Airport. I'm with the police and we just found a bag full of frogs. A bag full

of frogs. And I said, okay. The reason they called Ivan is that Ivan was in charge of Bogota's Wildlife Rescue Center. It was like this exotic animal orphanage where people would send animals that somebody, for some reason, had taken out of

the wild. We were used to receive a monkey, a parrot, and a turtle per day. Yeah, they'd get turtles, monkeys. One time they even got a bear. And they were kind of like, uh, okay, yeah, sure, we can handle a bear. You can feed a bear. I mean, it's easy to feed a bear. But they weren't prepared, apparently, for frogs. And it was a lot of frogs. The police told them there were like 400. And I was like, what? 400? What kind of frogs? They said, oh, those ones that are really, really nice and good looking, that are very, that have very bright colors and stuff like that.

And I was like, oh my God, those are poison frogs. What am I going to do with that? Most of them were a type of frog called Ufaga lemani. They're bright red and black. They kind of look like they're permanently wet. And yeah, poisonous. So it was like mind-blowing. We were not really expecting that.

Did you say, no, we can't do that? Like, what did you say? I just thought to myself, At that time, we were young and these challenges were enriching, you know, and we were like, it's going to hurt, but we are going to do our best. Ivan tells the police, meet me at the rescue center, bring the frogs, I'll be right there. And the first thing Ivan has to do is he's got to make these frogs comfortable. And the frogs, they're really particular. They like it hot and they like it wet. So we had to flood one of the offices, put a lot of water on the floor.

You flooded the office? We had to flood it. Close all doors, put a heater, and raise the temperature and raise the humidity to 90%. Sounds cozy. The staff has to work outside under a tent. They're using makeshift butterfly nets to catch bugs in the park to feed the frogs. But the frogs are really picky, and they keep rejecting their park bugs because they don't like park bugs. They like rainforest bugs. At one point, one of the frogs breaks loose and Ivan picks it up with his bare hand without thinking. And then his finger starts to swell up from the poison.

It was strange because you never see veins on a finger. Did you call a doctor? No, I didn't have time for that. It was a 24-hour kind of job at that time. And the clock was ticking. The frogs were dying. Ivan says they were dying like flies. And there are not a lot of these frogs in the wild. They are critically endangered. And now Ivan was responsible for a whole bunch of them. It's a huge responsibility. It's like you got a box of

panda bears and these frogs are dying on your hands. A few weeks later, Ivan gets another call from the airport. There's another 300 frogs here. Then another call. More frogs. And we were like, what is going on? Somebody is depleting

the Colombian forest of these frogs. This is an nightmare. This is something that is going to make the species become extinct. Something has to be done. Hello and welcome to Planet Money. I'm Sarah Gonzalez. And I'm Stan Alcorn. I've been reporting in Colombia where these poisonous frogs have been getting poached and smuggled out of the country. Today on the show, Ivan has a plan to outsmart the smugglers. He wants to flood the frog market and drive the smugglers out of business. And to see how that plan is going,

we hike to the one tiny spot in the world where these special frogs live, deep in the Colombian rainforest. When Ivan was a kid, he dreamed of running a zoo. He'd spend hours just flipping through pages of a wildlife encyclopedia. He could never pick just one favorite animal. But when he grew up and started working in animal conservation, he decided that his favorite animals would be all of the endangered ones. In the beginning, I wanted to protect all the animals, but it was impossible.

I didn't have the money to work with something big like a jaguar or a deer or something like that. Not even a bird. But after he got that bag full of smuggled frogs from the airport, the Ufaga-Lamani frogs, something clicked. These cute little red and black striped frogs, they were small, they were manageable, they were in his country, in Colombia. Ivan thinks, maybe this is a species I could save from extinction. I wanted to do something during my lifetime, not just starting something that somebody else could finish.

Now, to actually save this animal, Ivan would have to take on the smugglers. Yeah, people were ripping these frogs from the forest and smuggling them out of Colombia through the Bogota airport to sell them to people overseas, to people who love these frogs so much that they want to keep them as pets. Like, you know how there are cat people and snake people? Well, there are frog people, and they call themselves froggers. And among the froggers, Yvonne's frog, the Ufaga-Lamani, has become particularly treasured. In this box right here is quite literally gold. How is that possible? It's just a cardboard box. No, no.

This is a video of a guy unboxing Ufaga-Lamani frogs. This is $65,000 worth of frogs from Colombia. To be clear, the frogs in the video were not smuggled. Generally, people who buy smuggled goods don't brag about it on YouTube. But that is what was happening to the Ufaga Lamani. And to understand how this little creature became something that froggers were breaking the law to own, I wanted to travel up the smuggled frog supply chain, up a rough dirt road along the Anchikaya River, to the only place in the world where this frog lives.

Chiquilla River, to the only place in the world where this frog lives. A few square miles of rainforest in the middle of the Andes Mountains in Colombia. It's super remote, no phone service, just like 10 houses nearby. And to find one of these frogs, I'd need to follow a stream deep into the jungle. So I went with an expert, a local guide who knows this rainforest. Her name's Lucely Lopez. Lucely says, this is my university. The jungle is really steep. I can barely keep up with her. Oof.

Not ideal for hiking. At some points, we're moving just inches at a time. It's like trying to swim through tree branches. We are in the middle of a plant. We can barely move. Useli has to break out her machete. But finally, two and a half hours in, Useli hears one of the frogs calling.

She says there's one nearby. And to keep the frogs singing, Useli does a kind of frog call. We're trying to follow the frog's song, but the frog goes quiet, so we try playing a recording of a real ufaga lemani. It sounds kind of like a duck quacking, I guess, and we do hear a faint quacking in response somewhere uphill, and we try to follow it, but the jungle is too thick to move forward. So after about 15 minutes of unrequited frog calls,

we give up on this frog and go deeper into the jungle. It's just constant macheteing. Until, just above a stream. Donde? Si. Ah! Ay! There it is! just above a stream. ¿Dónde? ¡Ay! There it is. The frog is just sitting on a branch.

Luceli's like, Hi, my lemani, how pretty, my precious baby. I love you. It's like the size of a plum, and its red and black stripes look wet and bright, and the tips of its toes are white, like it just had its nails done. And even though Lucellae is right up next to it, it doesn't try to escape. It just sits there. These frogs don't worry about predators. Their bright colors tell predators to stay away, that they're poisonous.

Yeah, the colors and friendly disposition that have made them so attractive to pet owners, those are part of an evolutionary strategy that's helped them thrive here in their natural environment for millions of years. This valley used to be filled with the sound of Ufaga-Lamani. Up until 50 years ago, when the worst predators arrived, the smugglers. Carlos Rodriguez Mera remembers when the smugglers started showing up back then, when he was a kid. Tall guys, he says. Americans and Germans offering money to catch 100 frogs, 150 frogs. And Carlos would do it because he says he needed to help his family. He'd spend a few days camping under a tarp in the woods, hunting the frogs during the day, the same way we did on the steep, wet slopes.

But if he saw one, he'd grab it. Barehanded, quick, and dump it in a plastic bag. Carlos says the smugglers would offer him a few dollars per frog. And according to the biologists who study these frogs, smugglers took an estimated 80,000 frogs out of this valley. Today, there are probably less than 5,000 of them left. And Ivan, Ivan who rescued those frogs from the airport in the 90s, he says that part of what makes this frog so special is that they are rare.

If you have any kind of good that is rare and difficult to find, difficult to purchase, you will meet probably a very high price for that, like a diamond. Like a diamond. So like if a non-endangered, regular, old, cute, small frog went for $30 back in the 90s, this frog was 10 times that. $300. People kind of only want it because it's hard to get. It's like a fancy bag or like limited edition sneakers or something. And they will pay whatever they need to get their hands on one. It is what is called a Veblen good.

With normal goods, like, I don't know, socks or like carrots, the demand goes up as the goods get cheaper. But with Veblen goods, like this frog, the high price is actually part of the appeal. So the demand goes up as they get more expensive. The demand is not going to stop. It's going to stop when the frogs are extinct. And if you can't stop the demand,

Ivan starts wondering if he could do something about the supply. Like, what if he could make the diamond of the frog world common? Exactly, because these are not diamonds in the end. They will breed. Yeah, the frogs will breed. This is the heart of Ivan's big plan to save this tiny animal. So our bet was breeding them in large numbers, flooding the market,asing the prices. So nobody wants ever to go to the jungle and poach these animals for the international trade. So you're going to put the smugglers out of business with economics, basically. Exactly.

Ivan isn't talking here about breeding frogs to release in the wild, to repopulate the Anchicaya Valley. He is talking about breeding frogs to sell to frog collectors overseas so that everyone can leave the few remaining Ufagalamani alone. And his goal is to create a supply glut. So many frogs that the price would drop and it just wouldn't be worth poaching or smuggling anymore. That was his idea. But no one had ever done any of this before. To pull this off, he was going to have to figure out how to breed them, how to get the Colombian government to let him sell them, and then sell so many that he'd drive down the price and out-compete the smugglers.

And this is the place where he was going to try to do all that. It's a frog breeding facility, a frog farm, a couple hours outside of Bogota, guarded by a whiny dog named Molly. Hello, Molly. Welcome. This is it. This is Tesoros. This is Tesoros de Colombia, the treasures of Colombia.

That's what he called it. In 2011, Ivan got a batch of Ufagalamani frogs, specifically for the purpose of breeding here. Those airport frogs, they were long gone. But now he needed to keep these new frogs alive. You know what that is? It's a lot of carrots with labels on it, it looks like. Exactly. Are those for the humans or for the frogs? No, not even close. Those are for the crickets. The carrots are for the crickets and the crickets are for the frogs. Now in the wild,

these frogs do not necessarily eat just crickets. Ivan learns that they eat like 80 different types of bugs. And these jungle bugs are actually what make these frogs poisonous. Frogs in captivity, because of their boring captive cricket diet, actually stop being poisonous. Whoa. Ivan does sprinkle the crickets with different supplements to try to simulate that jungle diet. There is no supplement for poisonousness, but there is one for color, actually. It helps give them that bright, bright shade of red they get in the wild. Yeah, and the frogs are eating these crickets sprinkled with whatever color enhancing thing Ivan's got.

So he's keeping these frogs alive and nice and bright, how everyone likes them. But these frogs, they were not really laying eggs. These frogs are not like other frogs. They don't dump a thousand eggs at once. They only lay like four or five eggs at a time. And they don't lay eggs in any old place either. These frogs need to feel comfortable if they're going to make babies. To breed these frogs, Ivan is learning how to think

like a frog. He learns they like to lay their eggs in private, not just out there in the terrarium where everybody can see. So he gives the frogs a little pipe where they can sneak in, have some privacy. And they start laying eggs, little eggs that will hatch into tadpoles and become real Ufaga-Lamani frogs. And the most important part of Ivan's process is actually what he feeds the tadpoles. The tadpoles will eat only eggs for their development. I'm sorry, they eat eggs? Eggs. eat only eggs for their development. I'm sorry, they eat eggs? Eggs. Yeah, these tadpoles eat eggs and not just any eggs. Basically, they're brothers and sisters. Ufaga-Lamani tadpoles eat Ufaga-Lamani eggs. Is that a common thing? Is that just a normal frog behavior? No, no, that's what makes this species very special because they are not easy to breed in captivity.

Because you have to feed them. You have to feed them eggs. You cannot feed them anything else. Even in the wild, the mama frog feeds her tadpoles some of her other eggs. This is part of why this frog is so rare in the wild, because they eat their own. Ufaga actually means egg eater. That's the most important part or aspect of this farm. And that's the secret. That's the secret.

It takes Ivan almost two years, but he finally gets the first batch of frogs to survive. Four little frog babies. It was stressful. I mean, this was really stressful because it's like, you know, having a human baby. I have two daughters, so I know the feeling. I mean, this was really stressful because it's like, you know, having a human baby. I have two daughters, so I know the feeling. Every day I was worried that they will die. I was every day when I was not at the farm calling, saying, how are they? Are they still alive?

And they say, yes. The four of them, yes. All four frogs made it to adulthood. And then they made babies. Now he needed to try to sell them, to get legal permission to sell a critically endangered species. That's controversial. When people have tried this kind of thing in the past,

it hasn't always worked out so well. Yeah, things kind of backfired when people started doing this with tigers, for example. People started breeding tigers in China, Laos, South Africa, for the explicit purpose of killing them to sell their parts, their skin, their teeth, bones. Now, the goal was to have everyone kind of like leave the wild tigers alone. But breeding tigers like this kind of made the problem worse because suddenly authorities had to try to figure out which tiger teeth were farmed and legal and which were wild and illegal. And with these farmed tiger parts available, it reduced the stigma of owning tiger parts in general, actually increasing demand and endangering even more wild tigers. In Yvonne's case, it was up to the Colombian government to weigh these kinds of arguments and decide whether or not to give him permission.

They'd never given anyone this kind of permission before to sell Colombia's endangered frogs. So a year went by. Then two. And the frogs, they're just piling up in his lab. He can't sell a single one. His business partners quit. He's hundreds of thousands of dollars in debt.

And he's losing hope. I was angry all the time. It was terrible. Did you think about shutting it down then? How? I mean, I was in a very bad situation economically, mentally, but I had, this is my life project. You know, you don't abandon your life project. Finally, after about three years, the Colombian government gives Ivan permission to sell the first ever legal export of Ufaga-Lamani.

He ships off 35 frogs in a box headed to New York City. This is what Ivan wanted. People buying lab-made frogs instead of black market poached jungle frogs. Everyone was like, you know, shouting and saying, this is incredible. We made history. This is the new hobby. This is the new way of conservation. It was crazy. Were you thinking, we did it? Yes. I thought, I said, with this, we're not going to lose these incredible species anymore.

I was really confident. But it is not so easy to outsmart and outcompete the smugglers. And after the break, Ivan's plan to save the Ufaga-Lamani frog might actually endanger other animals. There are lines the Federal Reserve just won't cross. But when the economy is in crisis, those lines get blurry. You know, I don't think we had ever seen a world in which we thought the Fed was going to sort of jump into the corporate bond market. And we certainly hadn't seen a world where they were prepared to lend to Main Street businesses. And we certainly hadn't seen a world where they were prepared to lend to Main Street businesses.

So it really underlines that during moments of crisis, we've seen them get pretty creative. A deep dive on Fed power. That's in our recent bonus episode. It's available now for Planet Money Plus listeners, whose support helps make this show possible. When Yvonne sold those first 35 lab-bred Ufagalamani frogs, he actually got on a plane and flew to New York City himself to hand-deliver the frogs

to the frog buyers. It's a big party. There's champagne, the frogs are there, Ivan, and the frog buyers. Like, Americans and Europeans purchasing frogs. This is in a way the source of the problem, right? These are the people who are...

I never thought that they were doing anything wrong. I mean... You didn't think it was wrong? Like in those early days when you found all the traffic frogs and you find out it's because of people buying them? It was wrong for Colombia, for the species in Colombia. But from their point of view, they were doing nothing wrong. They were just frog lovers that wanted the frogs. If you are not working with them, this thing is not going to have success. So they must be part of the solution. So my name is Chris Miller, and in my fun life, I breed frogs. Chris Miller is a frog collector in Chicago.

He actually started when he was a kid, and someone randomly gave him a frog. They're like, would you like a frog? And so I'm like, yeah, of course. Who doesn't want a frog? That one frog turned into more than a thousand frogs. He keeps them in his garage, which he calls Frogville. No, he doesn't. Yes, he does.

And 20 years ago, he bought some Ufaga Lamani. They weren't readily available, but if you knew who to ask, you could get them. Chris bought three Ufaga Lamani, smuggled out of the Anchicaya Valley in the Colombian rainforest. The price for these smuggled frogs was $300 each. Not cheap, but actually it was a lot cheaper than the frogs from Ivan's facility, from Tesoros. When Ivan first started selling frogs, they were going for $1,000 to $2,000 for a single frog. We in Frogville, as we call it up here, we can't be continuous customers of Tesoro's because we just don't have the money to do it.

Now, Ivan, the frog breeder, he has been lowering his prices to try to compete with the black market frog rates. His most recent frog price list says one Ufa-Galamani goes for $900. Ivan says he's even sold some for $500. But from what we can tell, that's still not cheaper than the smuggled frog prices. It's hard for him to compete because Ivan, he needs to make enough money to run his whole frog farm. He has to pay employees, legal advisors, government permits. It's quite expensive to run Tesoros. It's almost $20,000 per month.

Well, and this seems like one of the huge challenges of competing with a black market and with smugglers, right? Because the smugglers don't have to pay for lawyers. The smugglers don't have to pay for lawyers. The smugglers don't have to do paperwork. Would your price need to come all the way down to $200 to totally drive them out of business, make it not make sense? Yeah, sure. We think that that's a possibility. It's not going to be, we're not going to be able to run the facility with those prices. So Ivan's plan to turn the diamond of the frog world into something common and cheap isn't really working.

You cannot compete with the smugglers. You need also a backup. His backup plan? Make people care about these frogs and where they come from. That's how you get rid of smugglers, not just by price, but with education. of smugglers, not just by price, but with education. Yeah, Ivan wants to educate the froggers, basically convince them that it is not okay to buy a smuggled frog and that it is actually worth it to buy frogs that are farmed ethically, no matter how pricey they might seem. Yeah, it's like fair trade frogs. And this has kind of worked.

Frog collectors like Chris, they were openly buying smuggled frogs or the offspring of smuggled frogs just a couple decades ago. And now it's a lot more taboo. Chris says there's no way he'd do that today. But there are still people buying smuggled frogs. Just a few years ago, more turned up at the Bogota airport. But Ivan still thinks that he can end Ufaga-Lamani frog smuggling by lowering the price of his ethical frogs even more.

It's just, he'd have to do something a little risky, a little mad scientist-y. Ivan wants to introduce the frog-buying people to new species of frogs, frogs that most people have never even heard of, and start selling those. Frogs that would feel so rare, so special, that he could charge a ton for them. The idea is that he'd make so much money off these fancy new frogs that he could charge way less for the Ufaga-Lamani. That's the model of the business, exactly. You just keep some good income for species for a while. And then you move to other species.

Why? Because there's demand for the other species. So the idea is to increase the amount of species we're working on. He wants to breed and sell wild birds, too. Like this bird called the multicolored tanager. Ivan's whole model, it's kind of a never-ending cycle, right? Like, to save one animal, you need to keep introducing more and more animals to the pet trade. And as I've been reporting on this, I gotta say, I do worry a bit about what will happen to these new species. Like, could they become the new target for smugglers?

But Yvonne, he has no doubts. He is sure that this would only be good for them. And so he's moving forward with this plan. He's working on getting a permit to sell these birds and new frogs from the Colombian government. And he says that if he doesn't get that permit in the next few years,

Tesoros may have to close. And then Ivan thinks that the smugglers will start taking Ufaga-Lamani from the rainforest more and more again until maybe they take the last one. This episode was produced masterfully by Willa Rubin with help from Emma Peasley. It was edited by Jess Jing, fact-checked by Sierra Juarez, and engineered by Josh Newell. Alex Goldmark is our executive producer. We want to thank Charlotte DeBouvoir, who co-reported this show

and hiked into the jungle with me and wrote with us. And special thanks also to Professor Milady Bettencourt and to our guide in Anchequia, Dairo Ultima. I'm Stan Alcorn. And I'm Sarah Gonzalez. This is NPR. Thanks for listening.