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Market and Rent Dissipation in Regulated Open Access Fisheries
Abstract
Using a model of regulated open access resource use with markets, we illustrate the potential complexity of interactions between markets, product quality, excess effort, and regulatory behavior in fisheries. Our model assumes two product types, one of which is processed and storable. The model describes the equilibrium that results when effort responds to open access incentives and when regulators respond to effort growth by mitigating its potential harmful effects on biomass safety. We use numerical simulations to demonstrate a mechanism by which market growth leads to the diversion of raw inputs into the inherently inferior market. The result is a scenario in which rents are dissipated not only because excessive inputs raise costs, but also because inferior product types reduce revenues. We conclude with an illustrative decomposition of rent gains into revenue and cost savings gains from rationalizing a hypothetical fishery, demonstrating the potential significance of market-side rents.
... Many studies assess the benefits of catch shares in specific fisheries both ex ante (Huang & Smith, 2014;Weninger & Waters, 2003) and ex post (Birkenbach et al., 2017;Grafton et al., 2000;Costello & Grainger 2018;Scheld et al., 2012). Studies find empirical evidence for slowing the race to fish (Birkenbach et al., 2020(Birkenbach et al., , 2017Brinson & Thunberg, 2016;Guldin & Anderson, 2018;Homans & Wilen, 1997;Tveteras et al., 2011); improved safety at sea (Pfeiffer & Gratz, 2016;Pfeiffer et al., 2022); increased revenues (or prices) (Ardini & Lee, 2018;Birkenbach et al., 2023;Branch, 2006;Brinson & Thunberg, 2016;Dupont et al., 2005;Grafton et al., 2000;Homans & Wilen, 2005;Kroetz et al., 2017;Pincinato et al., 2022); lower costs (Kompas & Che, 2005); and higher productivity (Dupont et al., 2002;Färe et al., 2015;Grafton et al., 2000;Solís et al., 2015;Thunberg et al., 2015). ...
... Transferability allows more efficient firms to accumulate quota over time. However, economic benefits can be caused by behavioral changes within the season as a consequence of slowing the race to fish and other incentive changes without changes in the fleet structure (Asche et al., 2009;Homans & Wilen, 2005;NASEM, 2021;Reimer et al., 2017;Wilen, 2006). With IFQs, fishers have more flexibility to minimize costs, time the market, and harvest higher quality products. ...
... The rationale is that, even in highly competitive seafood markets, a number of margins allow vessels to capture price premiums associated with differentiated products. These include timing landings to seasonal demand, landing higher quality fish that are not damaged, serving fresh markets rather than frozen markets, choosing a landing location, and targeting larger fish that fetch a premium (Asche et al., 2015;Birkenbach et al., 2022Birkenbach et al., , 2023Homans & Wilen, 2005;Smith et al., 2017). Our hypothesized mechanism is behavioral change that allows vessels to exploit these margins. ...
Many rights‐based systems in fisheries use individual fishing quotas (IFQs) that allocate shares of total allowable catch to individual fishers, vessels, or groups of fishers. We analyze the performance of IFQs in the Norwegian coastal groundfish fisheries that substantially limit transferability. We use data from two similar fishing groups that were treated with different management. Difference‐in‐differences results show that IFQs increase productivity and prices for some of the main groundfish species. Results suggest that expected productivity gains and price gains from first‐best rights‐based policies that create highly transferable IFQs can result from second‐best policies that substantially limit transferability.
... For example, a secure property right to catch fish at any time in the fishing season allows firms to spread the catch of stocks with high prices and downward-sloping demand over a longer fishing season. This minimizes market gluts that steer product toward lowerpriced frozen markets (Homans and Wilen 2005) and can result in higher prices for those species. Fishermen might also shift their efforts toward lower-priced species with cheaper quota or toward non-catch-share fisheries, intensifying the race to fish for those species during portions of the season (Asche et al. 2007;Cunningham et al. 2016). ...
... Previous structural models that evaluate the effects of transitioning to catch shares have focused on single-species fisheries. Homans and Wilen (1997) used aggregate data to estimate an empirical bioeconomic model of derby fishing; Grafton et al. (2000) used vessel-level data to estimate a stochastic production frontier to evaluate short-and long-run changes in technical efficiency; and Huang and Smith (2014) used vessel-level data to estimate a dynamic discrete choice model and evaluate the efficiency losses from strategic behavior. Empirical structural models have not been used to study the transition to catch shares in a multispecies fishery using vessel-level data. ...
... Of our five main findings from counterfactual policy simulations, the first four are broadly consistent with theoretical predictions and empirical evidence coming from treatment effects models. First, the finding of slowing the race to fish ( fig. 5) is consistent with theoretical predictions and previous nonstructural empirical work (Homans and Wilen 1997;Birkenbach et al. 2017). Although this result is not surprising, it does mean that the Northeast sector program achieved an important management objective relevant to many fisheries, namely, to reduce derby fishing. ...
... Three stylized scenarios provide our conceptual framework and reinforce the need for empirical testing of revenue gains. First, as in Homans and Wilen (2005), the race to fish steers potentially high-value fresh product into the low-value frozen market. Eliminating the race to fish increases the share of high-value product, raising the price. ...
... Similarly, the ability to exploit high late-season demand (that might otherwise have been unsatisfied due to early fishing closures) or to fish more carefully to avoid damage can also fetch a price premium. Two hypotheses are implicitly presented in Homans and Wilen (2005): 1) catch shares decompress the season, and 2) decompression leads to higher per-unit prices and thus revenues. There is strong empirical support for the first hypothesis (Birkenbach et al., 2017), and an examination of the second hypothesis is the subject of this paper. ...
... Incentives to spread out harvesting of one species may cause a substitution of effort away from another species, compressing its season (Birkenbach et al., 2020). Elongating one season and compressing another could lead to a price increase for the former and a price decrease for the latter based on the same mechanism proposed by Homans and Wilen (2005). ...
... These practices, and particularly the shorter season, had socio-economic impacts in fishing communities as fishhouses and processors operate in short seasons with capital being idle for the reminder of the year (Cojocaru et al., 2019). This has also led to alternative supply chains being served and often lower valued product forms being produced Homans & Wilen, 2005). ...
... Costello et al. (2008) show that fisheries managed with catch shares tend to be in better shape than fisheries with other management systems. Recent empirical evidence and modelling of economic performance emphasize that transitioning from competitive fishing to rights-based management improves economic outcomes by extending fishing seasons, reducing market gluts, increasing dockside prices and lowering the costs of fishing associated with the race to fish (Abbott et al., 2010;Andersen et al., 2010;Birkenbach et al., 2017Birkenbach et al., , 2020Costello et al., 2016;Gómez-Lobo et al., 2011;Grafton et al., 2006;Homans & Wilen, 2005;Newell et al., 2005;Pincinato et al., 2022). ...
... Harvest rights explain more variation in economic outcomes than access rights, but less variation than national governance conditions and infrastructure (Figures 2 and 3; Tables S4-S5). Harvest rights incentivize fishers to slow the race to fish by giving fishers secure rights to future benefits and thus leading to longer fishing seasons, fewer market gluts and greater profits through more stable supply chains and value added (Birkenbach et al., 2017;Essington, 2010;Homans & Wilen, 2005). Harvest rights are only weakly associated with social and environmental outcomes in fisheries based on the results. ...
There is growing recognition that fisheries should be managed for all three pillars of sustainability: economic, social and environmental sustainability. Limited quantitative evidence exists on factors supporting social sustainability, much less factors that contribute to multiple dimensions of sustainability. To develop a broader understanding of the factors that influence the performance of fishery management systems in environmental, economic and social pillars, we examine 11 input factors conjectured to contribute to successful fisheries using a global dataset of 145 fisheries case studies. The analysis indicates that management approaches are cross‐cutting and contribute to multiple dimensions of sustainability to varying extents. Importantly, factors exogenous to fisheries management can be as important as fisheries management, suggesting collaboration of fisheries institutions with other public and private institutions is important for sustainable fisheries development.
... The timing of fishery harvests throughout the year has important implications for product form, price, and ultimately revenue generated by the fishery Sylvia, 1999: Grafton et al., 2000). While seasonality in landings is an inherent feature of fisheries, it is often amplified by management systems and consumer demand (Homans and Wilen, 2005;Birkenbach et al., 2020;Love et al., 2023). Short fishing seasons, aimed at reducing fishing effort, can result in derby fishing, market gluts and weak incentives to develop higher-value fresh markets (Homans and Wilen, 2005). ...
... While seasonality in landings is an inherent feature of fisheries, it is often amplified by management systems and consumer demand (Homans and Wilen, 2005;Birkenbach et al., 2020;Love et al., 2023). Short fishing seasons, aimed at reducing fishing effort, can result in derby fishing, market gluts and weak incentives to develop higher-value fresh markets (Homans and Wilen, 2005). Birkenbach et al. (2017) show that the transition of US fisheries to individual fishing quotas (IFQs) extends the fishing season, and Birkenbach et al. (2023) show that the extended fishing season results in higher prices for species with higher paying alternative markets, such as fresh markets, which can then be served. ...
... Individual vessel quotas (IVQs) as predetermined shares of the yearly total allowable catch (TAC) have been introduced to improve the harvest strategy and enhance the profitability of fishing firms Flaaten et al., 2017 ;Bertheussen and Vassdal, 2021 ). IVQs reduce congregation of effort and short-pulse catches (Homans and Wilen, 2005 ;Birkenbach et al., 2017Birkenbach et al., , 2020. This eliminates supply gluts and promotes ex-vessel prices due to improved quality and stable landings throughout the fishing year (Dupont et al., 2005 ;Homans and Wilen, 2005 ;NOAA, 2011 ;Tveteras et al., 2011 ;Scheld et al., 2012 ;Ashrafi et al., 2020 ;Pincinato et al., 2022 ). ...
... IVQs reduce congregation of effort and short-pulse catches (Homans and Wilen, 2005 ;Birkenbach et al., 2017Birkenbach et al., , 2020. This eliminates supply gluts and promotes ex-vessel prices due to improved quality and stable landings throughout the fishing year (Dupont et al., 2005 ;Homans and Wilen, 2005 ;NOAA, 2011 ;Tveteras et al., 2011 ;Scheld et al., 2012 ;Ashrafi et al., 2020 ;Pincinato et al., 2022 ). Therefore, under the IVQ scheme, fishers carefully consider effort allocation decisions with regard to target species, harvest timing, fishing location, and landing sites, taking account of market prices, harvest costs, and biological availability, to attain maximum return from their quota holdings (Grafton et al., 2006 ;Asche et al., 2007Asche et al., , 2015Branch and Hilborn, 2008 ). ...
The benefits of individual vessel quota (IVQ) management in terms of improved harvest strategy and profitability are well recognized, but there is less focus on how different components of a quota portfolio can influence decisions underlying the effort allocation and profit-maximizing behaviour of fishers. Variations in the components of the quota portfolio may create economic incentives that alter the optimal harvest strategy and profitability. Thus, we study the potential impact of different components of quota portfolio on the intra-annual harvest strategy and profitability in two segments of the Norwegian bottom trawl fleet. By developing a vessel-based spatio-temporal bioeconomic framework, we demonstrate and compare adopted harvest strategies and accrued profits for small and large trawl vessels under three scenarios regarding restrictive quotas in codfish fishery. Our analysis confirms that alternations in the components of the quota portfolio influence the spatio-temporal dynamics of the fishing effort for small and large trawl vessels in different ways, probably due to the differences in vessel-specific characteristics. We also demonstrate that the differences in profit between small and large vessels in part depend on the overall size of the quota portfolio. The economies of scale in the trawl industry are being eroded as the shares of higher-priced species in the quota portfolio decreases. The benefits of economies of scale cannot be reaped as trawlers respond to the reduction in profit by redirecting effort from offshore areas of the Arctic to nearshore waters or staying ashore. Likewise, having small quotas of high-priced species reduces the effectiveness of the IVQ system in meeting management objectives, and could in some cases undermine sustainability outcomes. Our results also demonstrate that both the intensity with which fishers react to the fluctuations in market price levels and fishers’ perceptions of location attractiveness are influenced by the components of the quota portfolio.
... The fact that local species tend to be sold in fresh product forms ) and that some outlets have a significant preference for stable supply , can further amplify the market impact and community impact of misalignments between production and consumption. In some fisheries the production is frozen or preserved because of a short fishing season due to biological migration patterns (Pettersen and Asche 2020) or the regulatory system (Homans and Wilen, 2005), thereby reducing prices and income. Extending a harvest season is an approach to improve the market potential for fishers or aquaculture producers, but how effective it will be in generating more revenue depends on the demand patterns (Birkenbach et al. 2020;Kumar et al., 2021). ...
... For instance, the Maine urchin fishery is timed with the peak export market to Asia (Miller 2021). Seasonal closures to fishing create volatility in species availability and price (Dahl and Oglend 2014) and may prevent more valuable market segments from being served (Homans and Wilen 2005;Pincinato et al. 2022). The magnitude of these impacts will also be influenced by potential substitutes and other demand characteristics (Garlock et al., 2020;Birkenbach et al. 2020;Asche et al. 2022a). ...
Seasonality is a natural feature of wild caught fisheries that introduces variation in food supply, and which often is amplified by fisheries management systems. Seasonal timing of landings patterns and linkages to consumption patterns can have a potentially strong impact on income for coastal communities as well as import patterns. This study characterizes the relationship between seasonality in seafood production and consumption in the United States by analyzing monthly domestic fisheries landings and imports and retail sales of farmed and wild seafood from 2017 to 2019. Analyses were conducted for total seafood sales, by product form, by species group, and by region of the United States. The data reveal strong seasonal increases in consumption around December and March. Seasonal increases in consumption in Spring and Summer occurred in parallel with domestic fishing production. Domestic landings vary by region, but most regions have peak fishing seasons between May and October. Alaska has the largest commercial fishery in the United States and seasonal peaks in Alaska (July/August, February/March) strongly influence seasonality in national landings. Misalignment between domestic production and consumption in some seasons and species groups creates opportunities for imports to supplement demand and lost opportunities for domestic producers.
... Individual fishing quotas (IFQs) provide harvesting rights that alter fishers' incentives toward maximizing profits for their quota instead of maximizing their share of the catch (Grafton et al. 2006). The benefits of removing the competitive race to fish can appear in at least three dimensions: cost can be reduced (Grafton 1996), the harvest season can be extended (Homans and Wilen 1997), and generating higher-quality products can increase ex-vessel prices and possibly also harvesting costs (Homans and Wilen 2005). Moreover, when the IFQs are transferable, there are incentives to reduce overcapacity (Arnason 1990), although the incentives are limited when the transferability is restricted because of social considerations (Kroetz, Sanchirico, and Lew 2015). ...
... Individual fishing quotas (IFQs) provide harvesting rights that alter fishers' incentives toward maximizing profits for their quota instead of maximizing their share of the catch (Grafton et al. 2006). The benefits of removing the competitive race to fish can appear in at least three dimensions: cost can be reduced (Grafton 1996), the harvest season can be extended (Homans and Wilen 1997), and generating higher-quality products can increase ex-vessel prices and possibly also harvesting costs (Homans and Wilen 2005). Moreover, when the IFQs are transferable, there are incentives to reduce overcapacity (Arnason 1990), although the incentives are limited when the transferability is restricted because of social considerations (Kroetz, Sanchirico, and Lew 2015). ...
... Regulators in many countries have adopted Rights Based fisheries management as a means of addressing the problem of open access and excess capacity 1 inherent in common property fisheries. Rights Based fisheries management holds the potential of improved efficiency, productivity and profitability (Arnason et al. 2008). 2 Numerous theoretical economic papers have developed the structural foundation and defined the possibilities for capturing rent and improving the production process within a Rights Based management system (Dupont and Grafton 2001;Homans and Wilen 2005;Arnason 2011;World Bank 2017;World Bank and FAO 2009;Arnason et al. 2018). Success of the new strategy depends on setting biologically sustainable total catch levels (TAC), internalizing externalities associated with open access and allowing market incentives to guide access, timing and quality of catch. ...
... For blue whiting and capelin, there is a significant shift towards the higher priced consumption market in the last period. We suspect that improved handling and storage capability has supported this value shift (Homans and Wilen 2005). Figure 2 shows fish stocks development over the period 1994-2013 for six major species, for the purse seine fleet. ...
Regulators in many countries have adopted individual quotas as a means of dealing with the open access problem inherent in fisheries. The Norwegian Purse Seine fishery has evolved over the last 40 years from an open access fishery to a Rights Based management system with individual vessel catch quotas assigned to all major fish species. Regulations do allow for merging vessel quota. The purpose of this paper is to employ an index approach to decompose vessel revenues and costs by factor components. The index approach can measure the importance of prices, output and regulatory changes impacting productivity and provides insight into changes in a mature IVQ fishery. The current study uses a large individual vessel data set for the period 1994–2013. Results show that over time output prices have been the main drivers associated with increased revenues. We correlate output prices with an evolving IVQ fishery, and changes in harvest and demand conditions. Ongoing capital investment, not offset by increased harvest, has seen productivity decline in the early periods of the study but some recovery towards the end of the period.
... The first-movers are, however, well-positioned when it comes to exploiting the institutional changes that will expectedly take place to protect the snow crab resource for the firms (see Fig. 1). To protect the fishers against a race to fish (Homans and Wilen, 2005), the owner of the natural resource, i.e., the Norwegian State, has historically initially distributed quotas to fishers for free (Johnsen and Jentoft, 2018). However, this is conditioned upon the fact the players must have a track record of fishing and are still active fishers, as required by the Norwegian Participation Act of 1999. ...
... Introduction of ITQs (e.g., based on the snow crab vessels' catch history) has the potential to increase the firms' future profitability, making it easier to obtain external financing to streamline operations and reduce the race to fish (Homans and Wilen, 2005). Furthermore, an ITQ regime will create barriers of entry, and thus protect incumbent firms (Porter, 2008). ...
When the first Norwegian commercial catch of snow crabs was taken in the Barents Sea in 2012, an unexpected opportunity arose to create a new, profitable natural resource-based industry. However, hidden under the surface were massive biological, technological, and institutional uncertainties. This study first explores what motivated the entrepreneurs to invest in an industry exposed to extreme uncertainty and which firm and vessel resources were necessary to operate. The findings uncovered that most of the entrepreneurs had already exited another fishery with a profit. Thus, they were looking for new attractive business opportunities where they could apply resources and capabilities already accumulated. Furthermore, this study asks if there have been any survival-threatening challenges so far in the industry. The findings show that increased competition and the Russians closing the Loophole dramatically changed the opportunities for profitable fishing. Finally, the study discusses whether the players have the potential to gain a sustained institution-based first-mover advantage (FMA), i.e., a gratis fishing quota. It is argued that the snow crab vessels have positioned themselves into a historical stream of events, which can, at best, give rise to a gratis institutional protection of a valuable natural resource. Thus, if the vessels are allocated free individual transferable quotas, they will secure a sustained FMA, as a similar event is unlikely to occur in the future. Finally, in the paper, findings and implications are discussed.
... Timing of catch within the fishing year can have important implications for revenues generated by the fishery, product forms, and response of the fishery to policy changes (Grafton et al. 2000;Homans and Wilen 2005;Smith et al. 2008;Huang and Smith 2014). Some theoretical and empirical bioeconomic models have demonstrated the importance of within-season incentives-including biological conditions, stock effects, discounting, seafood markets, and congestion externalities-in determining these catch patterns (Clark 1980;Boyce 1992;Fell 2009;Valcu and Weninger 2013). ...
... Saithe and haddock landings are statistically less spread out than cod but comparable to each other + p < 0.10; *p < 0.05; **p < 0.01; ***p < 0.001 England haddock contracted (Birkenbach et al. 2017). Single-species theory of IFQs and associated market incentives predicts the average effect but cannot account for these mixed results (Homans and Wilen 2005). By modeling the period prior to allocating IFQs as one in which harvesters make sequentially myopic decisions, the mechanisms in the same model developed above can account for the possibility that some fisheries experience season compression while others experience decompression. ...
Fishers face multidimensional decisions: when to fish, what species to target, and how much gear to deploy. Most bioeconomic models assume single-species fisheries with perfectly elastic demand and focus on inter-seasonal dynamics. In real-world fisheries, vessels hold quotas for multiple species with heterogeneous biological and/or market conditions that vary intra-seasonally. We analyze within-season behavior in multispecies fisheries with individual fishing quotas, accounting for stock aggregations, capacity constraints, and downward-sloping demand. Numerical results demonstrate variation in harvest patterns. We specifically find: (1) harvests for species with downward-sloping demand tend to spread out; (2) spreading harvest of a high-value species can cause lower-value species to be harvested earlier in the season; and (3) harvest can be unresponsive or even respond negatively to biological aggregation when fishers balance incentives in multispecies settings. We test these using panel data from the Norwegian multispecies groundfish fishery and find evidence for all three. We extend the numerical model to account for transitions to management with individual fishing quotas in multispecies fisheries. We show that, under some circumstances, fishing seasons could contract or spread out.
... Combined with scientifically based quotas and enforcement, rights-based management has successfully reversed overfishing and bolstered economic efficiency in numerous fisheries (Hilborn et al. 2005;Grafton et al. 2006;Worm et al. 2009). This approach works for the enhancement of economic efficiency of the fisheries sector resulting in longer seasons, more costeffective harvesting, improved safety, higher-quality products, and reduced stock variability (Grafton et al. 2006;Birkenbach et al. 2017;Homans and Wilen 2005;Pfeiffer and Gratz 2016;Essington 2010;Melnychuk et al. 2012). Moreover, FAO has proposed the ecosystem approach to aquaculture (EAA), as a strategy to foster sustainable aquaculture worldwide. ...
Increasing recognition is being accorded to the widespread exploitation of fish populations globally, resulting in detrimental effects on aquatic biodiversity and the ecosystem. Unfortunately, fishing activities often yield unintended adverse consequences such as incidental catches of un-targeted species, habitat destructions, shifts in population demographics, and disruption to the ecosystem’s functioning. Shifting from traditional capturing methods to aquaculture emerges as a viable strategy for aquatic environments and conserving biodiversity. As one of the most rapidly expanding industries, aquaculture is adapting and intensifying to meet the growing demand for aquatic food products driven by a burgeoning global population. The application of diverse scientific techniques and methodologies offers pathways to achieve sustainable aquaculture that harmonizes with environmental and ecological considerations while also ensuring economic viability and accounting for social dimensions. The chapter focuses on the pursuit of sustainable development within the aquaculture and fisheries sector through the intervention of science and technology. Further, it offers a concise overview of various initiatives undertaken by nations and organizations to promote biodiversity conservation and responsible aquaculture management. In summation, the judicious application of scientific innovations, combined with strategic approaches and regulatory framework, holds positive outcomes for aquatic life and their habitats, thus enduring prosperity of the fishing industry.
... Previous studies have identified factors that contribute to the inefficiency of resource management in terms of rent-seeking for ITQs. For example, in Bergland et al. (2002), historical stock extraction rates determined rent gains; in Homans and Wilen (2005), longer fishing seasons led to rent expansion; in Reimer et al. (2014), rent distribution before ITQ introduction determined its magnitude; and in Boyce (2004), welfare weights for economic agents influenced the implementation of rent-generating policies. Empirical analyses have also attempted to identify the factors that determine the size of rents vis-à-vis ITQ allocation (Flaaten et al., 1995;Holzer et al., 2013). ...
Individual transferable quota (ITQ) systems are introduced in the context of global competition for fishery resources. However, rent-seeking for ITQ occurs as a potential rent, and the resource protection function is undermined. Additionally, globalisation may create a water pollution haven hypothesis through the location behaviour of fish processing firms, which drain polluted water during their production processes. This study aims to demonstrate this hypothesis using an R&D-based growth model with rent-seeking for ITQ and firm location for two countries, North and South. The South seeks to increase fish exports by increasing catch quotas. This policy increases the production of fish products and leads to a decreased economic growth rate via labour mobility from innovation to the fisheries sector. If the North reacts to the South’s policy by lowering its catch quotas, the policy prompts fish-processing firms to drain polluted water and relocate from the North to the South. Loose fishing quotas in the South compared to the North lead to worsening fishery resources through increased polluted water. This supports the water pollution haven hypothesis. Then, expanding the rent-seeking pressure on ITQs leads to faster economic growth, while increasing polluted water reduces fishery resources. This study implies that cooperative and complementary policy responses to reduce quotas in the North and South are important for achieving sustainable fisheries.
... As a fishery begins its operations it is important to assign permits to limit the access and prevent an excessive increase of production that may lead to the resource rent dissipation (overcapitalization) or affect the stock (overexploitation) (Gordon, 1954;Homans and Wilen, 2000). In our study, the twenty-vessel limited-access f 20 strategy proved to be the most profitable per vessel and a cautious measure, as it maintained the highest biomass levels among the assessed management strategies. ...
Potential and emerging fisheries create challenges and opportunities for fishery managers who need to decide how to sustainably manage a fishery that does not yet exist. A new Pacific hake stock off the west coast of Mexico has been identified. The Mexican government is interested in assessing the feasibility of a new commercial fishery. This work proposes and analyzes alternative potential fishery management measures for this possible new fishery under biological and market uncertainties. Results indicate that a new fishery could be biologically sustainable and economically profitable under a set of management strategies and control rules. A limited access strategy with low effort is recommended because it is most profitable per vessel and biologically cautious, considering the high uncertainty associated with the exploitation of an unfished stock. Despite the combination of high operating costs and low prices the fishery could still be profitable in the long-term, although there is risk of overexploitation if high fishing effort is allowed. Nevertheless, our results suggest low risk of fishing down the dwarf hake stock if the fishery is managed under low effort levels, allowing for sufficient opportunities for data collection and adaptive management. This work addresses the rare opportunity of assessing a fishery previous to its operation, with all the associated data limitations and uncertainty.
... As large and small vessels are selling into the same market, with the same quality-adjusted prices, differences in "price," as defined here, between vessel classes can be interpreted as a difference in quality, or a "movement along" a price-quality hedonic price function. Increased prices are consistent with previous studies arguing that slowing the race to fish can increase per unit prices through quality or avoidance of market gluts (Grafton, Squires, and Fox 2000;Homans and Wilen 2005). We find smaller effects, though statistically significant for cod and saithe, again indicating potential high grading, with bigger vessels having the opportunity to more selectively target larger, higher-value fish. ...
... This connection has directly secured the lives of millions of people in coastal areas (Payne, 2000). The open-access status of fishery resources creates the dissipation of fishing rents; therefore, the concentration of fishing interests in a few "powerful" fishers is likely unconcerned (Homans & Wilen, 2005). The benefits of fishery resources are theoretically distributed "across-the-board" among fish harvesters. ...
Trade and the environment have been in congruence by the treatment of environment-harmful subsidies. Several environment-friendly scholars in the 1990s suggested using countervailing duties endorsed by the WTO Subsidy Agreement to counteract such harmful subsidies as a prospective instrument for environmental protection. The United States recently brought this idea to the WTO; however, the proposal seems not to attract much attention from other member countries. The article revisits the past debate on the practicability of countervailing duties for environmental protection through recent developments of the WTO subsidy law. It is argued that, with the WTO jurisprudence on subsidization by natural resource exploitation rights, countervailing duties can be employed for natural resource conservation but not for environmental protection at large; however, there are limitations on the applicability of this green trade instrument for the conservation purpose. The instrument can be applied to certain "industrial" natural resources, such as minerals or commercial forests, but may be impractical for "consumer" natural resources such as fisheries or public grasses.
... To address this issue, diverse options to manage access to the ocean and its resources exist. These options include for example models that suggest regulating the sea by combining instruments like quotas or harvest seasons with the behaviour of the industry including fishing capacity, biological factors such as biomass level and other factors such as market changes (Homans 1997;Homans and Wilen 2005). Individual Transferable Quotas (ITQs) are another example of tools that are used to manage access to fisheries and are designed to provide, to their owner, exclusive and transferable rights of a given portion of the total allowable catch of fish. ...
This thesis aims to expand knowledge regarding the socio-economic and political aspects of the western Indian Ocean (WIO) tuna fisheries at different levels - local, national, regional. The thesis was written at a time when ocean-based activities are high on the agenda of governments and other stakeholders in a wave of interests for the blue economy, including in Africa and in the Indian Ocean. With increasing signs of collapse of some tuna stocks in the WIO, the thesis unveils the complexities of managing fishing activities of a highly valuable and mobile marine species such as tuna. To this end, the research answers the question: How do socio-economic and political processes shape the management of tuna fisheries in the Western Indian Ocean? To respond to this question, I will look at three aspects: narratives around the state of tuna resources, access politics and regionalism.
A political ecology approach is used for the research. Political ecology as a field of study pays particular attention to politics in its attempt to understand human-environment interactions. The study focuses on three countries in the WIO: Madagascar, Mauritius and the Seychelles. These countries were used to build a regional perspective. The thesis is based on empirical data collection and analysis, notably of documents regarding the fisheries, semi- structured interviews, and observations of fishing activities, landing at ports and decision- making during regional meetings.
The thesis makes three main arguments. Regarding the state of tuna resources, the thesis demonstrates that local fishers have developed strong discursive claims that they use to contest exploitation by industrial actors. Industrial actors, on the other hand, perceive themselves as unjustly accused of being the main responsible for overfishing in the region. In the case of tuna fisheries in the WIO, discursive power is not only exercised by usual powerful actors; small-scale fishers have built over the years a powerful narrative of tuna being overfished, with the support of actors such as NGOs and the media.
As for access politics, the thesis highlights that while rights-based mechanisms set the foundations for the possibility of equal access to the fish through various legal arrangements, structural mechanisms present a clear picture of unbalanced and unequal access between the various actors of the fishery. These power relations and conflicts are aggravated by the materiality of the tuna resources and the western Indian Ocean. The thesis also argues that local and national stakeholders in the fishery are at different times and spaces both winners
and losers; the foreign industrial actors are consistent winners; and the fish - or its sustainability - a consistent loser.
With respect to regionalism, the thesis unravels the importance of both local socio-economic contexts, geopolitical interactions and their role in advancing or not regional cooperation and identity. It also shows that capitalist exploitation of the resources involving geopolitical actors strongly influences regional management and use of the resources. For regionalism to truly exist in the WIO, building stronger links between countries, the WIO people and through tuna fisheries is essential.
For the WIO countries to continue to benefit from tuna fisheries, three action points are needed: take management measures that prioritise the long-term sustainability of tuna instead of political and economic interests; assess the impact of various types of tuna fisheries on livelihoods, food security and the state of resources; and promote regional initiatives that highlight the shared socio-economic and cultural values of tuna in the WIO region.
... In a natural resource context, rent dissipation can occur when open-access resources are over-extracted, leading to economically unsustainable use (e.g., Walker et al., 1990). For biological resources like fish, rent dissipation can also lead to collapse of the resource and even extinction (e.g., Homans and Wilen (2005). Gordon (1954)'s groundbreaking analysis of fishery grounds introduced his rent dissipation model, which sought to incorporate the concept of equilibrium into fisheries production analysis [1][2][3]. ...
Despite apparent efficiency concerns, the use of agricultural insurance as a policy tool has surged in rural China. Its use offers a natural experiment to assess both economic theory of property rights and agricultural policy effectiveness, and to revisit the rent dissipation model that was originally developed to explain the role of property rights in unsustainable fisheries harvest decisions. We focus on evidence of resource overpricing behavior in the context of subsidized agricultural insurance, including evidence of a theoretically-expected increasing rent pattern. Our results reinforce the importance of transactions costs as a driver of economic inefficiency and highlight the role of social costs as an important factor to explicitly consider when designing agricultural policy. In particular, when employing the formal policy mechanism of rural agricultural insurance, we suggest that informal risk-bearing arrangements can be leveraged to reduce social costs behind apparent overpricing behavior and increase land users’ welfare consistent with intended policy goals.
... conflicts. Fisheries provides a classic case of open access dilemma [1], where market failures could arise because agents inabilities to prevent rent dissipation [2]. Most recent studies emphasized the capacity of local organizations to manage CPR through collective action. ...
Fisheries as a common-pool resource (CPR) provides a classic case of open access dilemma: competition for yields is often fierce and the absence of access management could lead to conflicts. Availability, quality, and diversity of fishery resources in sufficient quantities are the foundation of fisheries management for present and future generations. Indonesia’s governing body, or more broadly, the governance, should be the moving force in producing policy outcomes involving coordination of conservation efforts to regulate extractive uses of natural resources. This paper briefly reviews the Indonesian fisheries policy as a CPR, its indicators, and its implication for the local fishing ecosystem.
... The improvement of the quality of landings in a pooling system was also reported in Sakai et al. [48]. Other studies find similar quality improvements in catch share fisheries [26,6]. ...
... This is often a challenge for aquaculture producers in the US, where the harvest is dependent on the growth cycle (Surathkal and Dey 2020; Hanson 2020). The parallel to fisheries with a race to fish is obvious (Anderson 2002;Homans and Wilen 2005). Garlock, Nguyen, et al. (2020) discuss in the case of US aquaculture production how potential production faces three competitive scenarios: it can create new market segments, it can win market share from domestic wild fish, and it can win market share from imports. ...
The US is the world’s largest seafood importer by value, with an increasing share of imports composed of farmed seafood. Despite numerous policy initiatives, production and growth in the US aquaculture sector is limited, and there is a significant literature discussing potential explanations. In this paper the recent success of imported Branzino is used to show that the market is not a constraint. Branzino is a portion-sized white-fleshed fish primarily farmed in the Mediterranean, with no obvious equivalents produced in the US. Since the turn of the century, imports have grown from zero to almost 10,000 metric tons, a quantity that would have made it the fourth largest farmed fish species if produced in the US, and all is imported fresh. From 2015 when the quantities became more significant, the species entered the large whitefish market, although with a significant price premium relative to tilapia, the largest species in this market, indicating that the opportunity to create separate niches in the seafood market is limited.
... Catch-shares management defines a fishery-wide total allowable catch (TAC) and then allocates transferable shares of that catch to vessel owners or other fishery participants. This governance approach has a robust record of improving the economic efficiency of fisheries, with economists and fisheries scientists documenting a variety of benefits from catch shares including more cost-efficient harvesting, longer seasons, increases in product quality, safer working conditions, reduced stock variability, and better tracking of management targets (1)(2)(3)(4)(5)(6). ...
Significance
Rights-based management reforms in fisheries have attracted controversy regarding the unequal distribution of their economic benefits, but systematic quantitative evidence has been lacking due to data limitations. Our research leverages a longitudinal dataset to compare payments to captains, crew, vessel owners, and owners of harvest quota in the Bering Sea crab fisheries both before and after implementing individual transferable quotas (ITQs). This paper provides a fishery-wide accounting of returns to these diverse stakeholder groups at the vessel level. The results underscore the importance of considering the distribution of payments to different stakeholders within each vessel as well as heterogeneity in payments across vessels. Our approach provides a model for collecting and analyzing data on distributional outcomes for other fisheries.
... Fisheries dynamics emerged as a research area by the 1960s [19,20] and still thrives today. Examples of recent applications include a model that shows what happens when effort responds to open access incentives and when regulators respond to increasing effort by mitigating its potential harmful effects on biomass safety [21]; modification of the Beverton-Holt formulation [19] to allow study of populations experiencing a seasonally fluctuating environment, compared to a carrying capacity assumed constant year-round [22]; and a model that shows how investments in substitutability by augmenting the stock of knowledge affect the value of natural capital [23]. ...
The objective is to provide an interpretive reading of the literature in resource scarcity and sustainability theory from the nineteenth century to the present time, focusing on shifts that have occurred in problem definition, conceptual framing, research tools applied, findings, and their implications. My reading shows, as one would expect, that the discourse has become more technical and the analysis more sophisticated; special cases have been incorporated into the mainstream of theory; and, where relevant, dynamic formulations have largely supplanted static analysis. However, that is barely scratching the surface. Here, I focus on more fundamental shifts. Exhaustible and renewable resource analyses were incorporated into the mainstream theory of financial and capital markets. Parallels between the resources and environmental spheres were discovered: market failure concepts, fundamental to environmental policy, found applications in the resources sector (e.g., fisheries), and renewable resource management concepts and approaches (e.g., waste assimilation capacity) were adopted in environmental policy. To motivate sustainability theory and assessment, there has been a foundational problem shift from restraining human greed to dealing with risk viewed as chance of harm, and a newfound willingness to look beyond stochastic risk to uncertainty, ambiguity, and gross ignorance. Newtonian dynamics, which seeks a stable equilibrium following a shock, gave way to a new dynamics of complexity that valued resilience in the face of shocks, warned of potential for regime shifts, and focused on the possibility of systemic collapse and recovery, perhaps incomplete. New concepts of sustainability (a safe minimum standard of conservation, the precautionary principle, and planetary boundaries) emerged, along with hybrid approaches such as WS-plus which treats weak sustainability (WS) as the default but may impose strong sustainability restrictions on a few essential but threatened resources. The strong sustainability objective has evolved from maintaining baseline flows of resource services to safety defined as minimizing the chance of irreversible collapse. New tools for management and policy (sustainability indicators and downscaled planetary boundaries) have proliferated, and still struggle to keep up with the emerging understanding of complex systems.
... tonnes if discount rate is increased from 1% to 10% (Fig. 3). The optimum dynamic strategy for a fishery can differ depending on the prevailing rate of discount at a time or at a place [46,47]. The discount rate determines the potential value of future fishing benefits; therefore, increasing the discount rate could promote unsustainable fishing activities and harvesting. ...
Hilsa (Tenualosa ilisha), the choicest table fish of Indian subcontinent, provides livelihood for 2.5 million fishermen of Bangladesh and 0.46 million fishermen of West Bengal (WB), India. Hilsa fishery contributes around 1% to the GDP of Bangladesh. Years of over-exploitation of Hilsa fishery through open access has led to an unprecedented decline in Hilsa stock in recent decades. The study aims to investigate the economic efficiency and existing management practices of Hilsa fisheries of WB (India) and Bangladesh. The Gordon-Schafer surplus production model was used to derive a deterministic bio-economic model on Hilsa fishery from the catch-effort-cost-price data of WB (India) and Bangladesh collected between 2002 and 2015. Hilsa populations of two countries have a similar growth rate (r = 0.224). Hilsa catchability coefficient (q) of Bangladesh is 0.000003553, which is about 20 times lower than WB (India) where it is 0.00007147. Fishing effort and Hilsa yield are not significantly associated with each other in WB (India) but in Bangladesh fishing effort has significant positive impact on Hilsa yield. If effort is increased by 1%, the yield in WB (India) may decrease by −1.12% whereas in Bangladesh the same may increase by 8.48%. Results indicate variable habitat conditions and biology of Hilsa are possibly more important for Hilsa yield of Bangladesh compared to WB (India). A 10–20% discount rate is sustainable option for Hilsa fisheries of WB (India) and Bangladesh. The stock reduction analysis demonstrates that WB (India) stock is severely overfished while Bangladesh stock exhibits stability in the overfishing zone. A trans-boundary management of Hilsa fishery is recommended which includes forming a joint scientific council, joint monitoring and facilitating data availability, imposing similar discount rates, ban periods, mesh sizes, and introduction of effort and landing taxes.
... As discussed by Costello et al. [10] and Hilborn and Ovando [11], open access is not conducive for healthy fish stocks or stock recovery. It is expected that poor environmental status and weak fisheries management systems also limit economic performance as poorer stock status increases harvesting costs and limits market opportunities [10,31,[33][34][35]. Given the three pillars of sustainability are positively correlated, it is not surprising that Africa also scores poorly in the social dimension. ...
The Fishery Performance Indicators is a data collection tool that allows collection of comparable fisheries data in the environmental, economic and community pillars even under data poor circumstances. In this paper, data collected for 35 fisheries in 14 African countries are analyzed and compared to global averages. Similar to a previous global analysis, the different pillars of sustainability were positively correlated. The results are even more pronounced for Africa than globally. The only exception is the relationship between environment and community pillars in Africa, which is statistically insignificant, and this is also the case for open access fisheries globally. The average scores in Africa are lower than global average scores in all dimensions, which is not unexpected given the high number of open access fisheries. However, factors that are not fisheries specific may be more important for this result, suggesting that a country’s governance, economic conditions, and development status are important for fisheries performance.
... Catch shares generally slow the race to fish (ibid.). A slower fishing pace also promotes targeting of higher-quality fish that are sold fresh at better prices over a longer period of the season [46]. By making individual catch shares transferable, divisible, and permanent (i.e., ITQs), Grafton [28] argued that it is in the quota holders' interest to preserve the fish stocks since larger stocks mean more profitability for the fishermen. ...
In fisheries, formal institutions are intentionally implemented to protect the stock of fish and to better adjust the fleet's catch capacity to the resource base. The present study, however, explores how the same institutions also influence competitive forces that shape industry attractiveness and the profitability of fishing boats. The empirical context is a sample of Norwegian seagoing purse seiners during a period that saw the introduction of two different individual transferable quota (ITQ) variants, the so-called unit quota system (UQ) system and the structural quota (SQ) system. The study analyses and compares the profitability of the vessels before ITQs were implemented in Norway (1985-1995), then under the original UQ regime (1996-2004), and finally under the present SQ regime (2005-2018). The findings disclose that the average profit margin was 8.8% in the pre-quota period, 20.6% in the UQ period and 24.3% in the SQ period. The differences between the pre-quota period and the two quota periods were significant (p < 0.000), whereas the difference between the two different quota periods were not (p = 0.068). Thus, the findings of this study draw a picture of an economically thriving industry after the introduction of ITQs. The paper argues that the significant profitability improvements achieved is rooted in the institutions that are established, which provide the players with essentially free and protected access to a common and valuable fish resource. Finally, implications of the findings are discussed.
... (Anderson, 1977;Clark, 1975;Gordon, 1954;Hannesson, 1993;Walden, 2014), the mechanism of its formation and the impact on profit and on economic efficiency continue to be the subject of discussions (see e.g. Homans, 2003). Fishing rent can be calculated as the difference between the market value of fishery products and the costs associated with its production and sale (Clark, 1990), i.e. it is identical to profit. ...
The purpose of the research is to find the reasons that led to unusually high profitability in Russian fisheries in 2014-2016. The analysis showed that the main driver of profitability growth is the growth of domestic prices for fish and fish products, which outstripped the overall food inflation. Governmental support for fishing led to a rapid increase in fishing rent, which was almost entirely appropriated by fishing companies. But such a basis for the growth of Russian fishing is unstable in the medium and long term.
... This may be further complicated by the fact that fishing vessels often hold quotas for several different species with sometimes overlapping seasons which may lead to inefficiency because fishers may choose to fish too much of some species relative to other species, as found by Asche and Roll (2018) for the Norwegian trawler fleet. This indicates that fishery management excessively focused on input restrictions and profitability in the harvesting sector may result in landings of fish of reduced quality, which may affect negatively the opportunities for value-adding and marketing in subsequent links in the value chain (Larkin and Sylvia, 1999;Homans and Wilen, 2005). Thus, regulators risk missing out on the FAO's request to utilize fish stocks in a way that contributes to the nutritional, social and economic value of wild fish stocks (Food and Agriculture Organization (FAO, 2018). ...
This study explores trade-offs between fish quality, fishing efficiency, costs and profitability across three different vessel groups in the Norwegian groundfish fishery, that is, vessels fishing with bottom trawls, longlines and Danish seines. The results of hedonic price analysis at the ex-vessel level of the value chain indicate substantial differences in fish quality as Atlantic cod caught with longlines obtain price premiums of 15.0 % and 12.6 % compared with bottom trawling and Danish seining, respectively, holding other variables constant. For haddock, longlining obtains a price premium of 20.0 % compared with Danish seining and 13.3 % compared with bottom trawling. However, despite better quality and prices, the costs of fishing are substantially higher for longliners than for bottom trawlers and Danish seiners, which explains the differences in profitability favoring the more technically efficient bottom trawlers and Danish seiners. Policy implications are discussed considering trade-offs between fish quality, ex-vessel prices and vessel profitability. In a highly regulated fishery such as the Norwegian groundfish fishery, with individual vessel and vessel group quotas based on historical fishing rights, policy intervention is important for optimal use of limited fish stocks but is not necessarily straightforward.
... In particular, one would expect it is harder for exporters of 2. Better control with the production process facilitates targeting more valuable markets and product forms. This can also be observed as a consequence of improved management in fisheries as exemplified by Pacific halibut (Homans and Wilen 2005) and Icelandic cod (Knútsson, Kristofersson, and Getson 2016). ...
Food security has nowadays become a big challenge around the world. Therefore, this comprehensive review investigates the complex relationship between the status of fish resources and the escalating challenges posed by climate change and population expansion, focusing on Malaysia's food security. With the global population on the rise and the effects of climate change intensifying, it is of the utmost importance to ensure a consistent and reliable food supply. This review assesses the present status of Malaysia's fish resources as a crucial element of the nation's food security landscape by conducting a comprehensive literature review. By elucidating the intricate interplay between changing climate patterns, expanding population pressures, and the availability of fish fisheries, this study identifies future vulnerabilities and opportunities. The findings of this review demonstrate that increasing fish availability alone does not guarantee food security. Effective policies must instead take into account the complex interplay between various factors, including consumption behaviours and ecosystem resilience in order to promote sustainable food security in the face of changing challenges. The study highlights the need for a multidimensional approach that addresses not only sustainable production practises, but also habitat preservation, balanced utilisation, and adaptive management strategies. As the study concentrates on the Malaysian context, its implications extend to regions with comparable challenges, highlighting the urgency of adopting holistic governance models that integrate ecological health and food security objectives. This review provides valuable insights for policymakers, researchers, and stakeholders interested in formulating resilient and effective measures to ensure enduring food security amidst the ever-changing dynamics of climate change and population growth by developing strategy to improve the contribution of fish in terms of sustainable food supply in Malaysia.
User rights in fisheries refer to the rights of fishers to harvest from fish resources. In terms of exclusivity, security, duration and transferability these rights can be strong or they can be weak. In recent years there has been a substantial movement toward stronger user rights in many fisheries around the globe and further shifts of the same kind are recommended by many fisheries advisors. The paper argues that a transition from weak to strong user rights in fisheries has a wide range of impacts. In the paper it is attempted to identify and describe some of the more prominent of these impacts. It is found that these impacts may be conveniently divided in economic, environmental and social impacts. Although this classification is by no means perfect or even exhaustive, it is hoped that it can serve as a framework for further research in the field. The paper continues to provide some discussion of the social desirability and undesirability of the various impacts.
Previous research has concluded that a transition to SURFs (strong user rights in fisheries) has several economic, environmental, and social impacts. In this paper, the problem of assessing the values of these impacts is considered. First, this kind of an assessment is considered in general terms. It is found that the values of the impacts depend in general on the empirical situation at hand. Therefore, a broad result that a transition to SURFs is either beneficial or detrimental does not seem to be available. Following this finding, it is attempted to evaluate empirically prominent impacts of installing SURFs in the Philippines Marine fisheries. On the basis of the available data and some simple bioeconomic modelling, it is found that the economic and biological impacts are mostly beneficial and their sum highly positive. Because of lack of data, the social impacts of SURFs could not be evaluated. However, it appears unlikely that they are detrimental enough to render a transition to SURFs inadvisable.
In recent years, the approach to wild-caught fisheries management has expanded beyond traditional single-fishery management. This article examines potential market failures within the fisheries sector that may arise because of a failure to account for key features of wild-caught fisheries and that can be addressed by an expanded scope. These market failures include multiple species caught together, multiple fisheries targeting the same stock, and other ecological and socioeconomic interconnections within ecosystems. We also examine market failures that may arise when external factors such as climate change and species invasions are not considered in fisheries management policy or if policies do not consider multisector use of seascapes, linkages between water pollution and fisheries, and market failures that cut across fisheries and nonfishery sectors and involve the underprovision of publicly available data and a lack of information sharing along the supply chain. We find that policies that address these market failures typically have distributional effects; that is, there will be winners and losers, even if aggregate efficiency increases. We conclude that research and policy design need to explicitly consider equity-efficiency trade-offs when seeking to address market failures, and we propose policy and research priorities that support the sustainability of wild-caught seafood.
The need for effective fishery management is growing worldwide due to the overexploited status of many fishery resources. While co-management between the government and fishers is considered a viable option, the performance of such a management is not well understood. This study describes the historical context, the current situation, and the price changes associated with the mackerel (chub mackerel Scomber japonicus, blue mackerel Scomber australasicus) purse seine fishery management in Japan’s EEZ waters of the North Pacific Ocean. This fishery is unusual in that an industry organization plays a major role in managing the total allowable catch (TAC) set by the government. Notably, the organization voluntarily introduced vessel-level monthly catch limits (CL) in 2007. This co-management system has been effective in adhering to the TAC. Moreover, we examine the price changes associated with the CL management by using difference-in-differences design where the prices in ports where vessels under the CL management land and where they do not are compared before and after 2007. Results indicate that the introduction of this management is associated with an increase in their mackerel price by 21.335 yen/kg (s.e. = 10.397), which virtually eliminated the price gaps with mackerel in other regions in Japan. Controlling for income, export price, and time trends do not change our result quantitatively. However, further study is needed to clarify the causal impact of the CL management, as the common trend assumption is likely to hold but the stable unit treatment value assumption is likely not in our setting.
This paper examines an extreme voluntary cooperation institution called ‘pooling system’ which is designed to manage the Danish seine fishery in the Muroran region, Hokkaido, Japan. This institution requires all vessels to fish together and to share the revenue. This paper examines the historical context in which this unique management was established, details of current management practices, and their impact on the ex-vessel price and productivity of the fishery. Using a difference-in-differences design, we show that the pooling system raised the price of walleye pollock (Gadus chalcogrammus), the main target species, by around 24%, while it also raised the total landings per net by around 25%. The price increase is likely due to quality improvement, while the productivity increase is likely due to improved spatial allocation of fishing efforts. We argue that the existence of this unique management system for more than two decades is largely due to these large economic benefits. In addition, the small number of vessels and owners has played a major role in facilitating consensus building and discouraging shirking. Finally, the existence of a skipper with strong leadership was fundamental to the establishment of this system.
An estimated 74.9% of China’s seafood imports are reexported
The relation between fisheries subsidies and their effects on the level of resource extraction is widely discussed in extant literature. However, in addition to impacts on the level of fishing, the various types of subsidies can generate different incentives for greenhouse gas emissions, a subject that is still little explored. Thus, this article aims to evaluate the influence of fishing subsidies on the sector's CO2 emissions. It is worth noting that three groups of subsidies were evaluated, the beneficial (Good), the capacity-enhancing (Bad) and the ambiguous (Amb), classified by Sumaila et al. (2010), who proposed such a division based on the negative effects on sustainability of fish stocks. To this end, an annual data panel was constructed for 14 developed countries from 2005 to 2012. The Dynamic Panel method was adopted as empirical strategy as well as the estimator proposed by Everaert and Pozzi (2007) to correct possible biases associated with micronumerosity in dynamic models. The results indicate that Bad subsidies generally point to increased CO2 emissions. Amb subsidies, which are not clearly defined in the literature, have no significant relationship with emissions. Finally, Good subsidies are also inversely related to CO2 emissions from the fishing industry.
The effectiveness of place branding for value addition and improved pricing of fish species,
usually done to benefit small-scale fishers in developing countries, is pivoted on a range of
institutional, social, and ecological factors. The recent plan proposed by the Bihar State Department of Animal and Fish Resources has suggested place branding of fish species from different rivers of the Gangetic plains in the state. This plan’s motive of bringing direct profits to local fishers is well intended, but needs to account for the fact that in Bihar, riverine capture fisheries are open-access and with weak institutional control, and witness long-term conflicts over access to fishing areas. Importantly, the selection of some fish species for branding and its consequences can threaten endangered biodiversity, such as the Ganges River Dolphin, India’s National Aquatic Animal. This report explains in detail why the plan to brand the “Bachwa” fish from the Ganga River, is likely to have potentially damaging effects on biodiversity conservation efforts and fisheries management.
We also suggest that the plan for the branding of Bachwa fish should be cancelled. We recommend some alternatives that may be considered in future plans for place branding of riverine fish species.
The initial stage of the emerging Norwegian snow crab (SC) industry was characterized by excessive optimism, and this case study explores whether the early entrants have gained sustainable first-mover advantages. Unfortunately, the investments have not been profitable as the firms made a yearly average negative profit of more than 10% in the period examined. Accordingly, the early entrants have so far suffered first-mover disadvantages. Nevertheless, the modest economic start may be bad at predicting the future wealth-creating potential. This, however, will require the SC population of the Barents Sea to increase sharply. It will also require that the nations involved in fishing SC agree on the distribution of the total quota between them. Another institutional requirement is that a system of catch shares (e.g. individual tradeable quotas) is introduced in the Norwegian SC fishery to protect the strategic position of the players from outside intruders, and also efficiently block the rivalry between them. The SC fishers are engaged in an extremely risky business with a significant financial loss potential. In addition to risks related to the resource base and to national and international regulations, there are large risks associated with how SCs in the Barents Sea can be best captured, processed and sold. As a consequence, the firms participating in SC fishing need significant financial reserves to cover any future losses. Without such reserves, they must either choose to withdraw from the industry and consider the inflicted losses as sunk cost as some have already done, or they will risk bankruptcy.
Le contexte étudié est celui d'un système irrigué qui connaît une pénurie en eau structurelle. La thèse compare différentes règles d'allocation de l'eau et de taxation lorsqu'on tient compte des inévitables marges de manoeuvre dont disposent les irrigants, notamment en ce qui concerne la surface mise en culture, l'équipement ou la stratégie d'irrigation. Ces marges de manoeuvre peuvent engendrer une interdépendance entre les agriculteurs : les interactions qui en découlent sont déterminées à l'équilibre. De façon très générale, on peut définir des règles d'allocation de type ex ante, où chaque agriculteur reçoit une quantité d'eau indépendante de ses choix et de ceux des autres agriculteurs, et des règles de type ex post qui distribuent l'eau en fonction des choix effectués. Si les règles de type ex post permettent de bien valoriser l'eau sur l'ensemble du système irrigué et peuvent organiser un partage efficace du risque, elles créent aussi par la même occasion des interactions stratégiques qui aboutissent à un sur-assolement. Une comparaison est faite entre règles ex ante et ex post, avec des agriculteurs qui n'ont pas la même capacité à valoriser l'eau lorsque la ressource à partager est connue, et avec des agriculteurs d'aversions au risque différentes lorsque la ressource est incertaine. De plus, quand le coût d'audit du respect des allocations est important, le Gestionnaire doit mettre en regard l'acquisition de plus d'information pour diminuer l'importance de ces interactions, et le coût d'acquisition de cette information. Ces questions sont appliquées sur deux terrains d'étude : de petits périmètres irrigués en Tunisie centrale gérés par des associations d'irrigants, et le bassin de l'Adour dans le Sud-Ouest de la France, où la culture intensive du maïs provoque des tensions sur la ressource pendant l'été.
A model of the commercial fishery, incorporating the microeconomic decisions of individual vessel operation, is developed and employed to predict the consequences of various methods of regulation, including: (i) total catch quotas; (ii) vessel licenses; (iii) taxes on catch (or effort); (iv) allocated catch (or effort) quotas. Among the principal predictions of the analysis are: (a) total catch quotas do not improve the economic performance of an open-access fishery; (b) limited entry results in distortion of inputs unless every input is controlled; (c) taxes and allocated transferable catch quotas are theoretically equivalent to one another in terms of economic efficiency, and both are capable in principle of optimizing exploitation of the common-property fishery.Key words: economics, fishery regulation, management, quotas, licenses, taxes, fishermen's quotas, common-property resource
This paper illustrates how conjoint analysis can be used to model preference for food products, and applies the technique to the study of fresh and frozen salmon preference among buyers from two intermediary wholesale levels in New England. The degree of preference for specific attributes and levels of the products is compared. The paper also evaluates the performance and predictive validity of a traditional additive conjoint model, a hybrid model estimated using both ordinary least squares, and a maximum likelihood hybrid two-limit Tobit model.
The purpose of this paper is to review several economic studies which present a spectrum of interesting and creative approaches to analyzing the market for fish and seafood. These studies form a basis from which to offer recommendations for further improving analysis of fish demand and markets. We do so in an effort to advocate the potential of this area of research in the decisions which promote efficient use of the world's fisheries resources. Each of the reviewed approaches has its merits and limitations, depending on the issue at hand, quality of the data and skills of the researcher. The approaches are categorized as either demand studies following more traditional commodity market analysis methods or as market research studies.
This paper provides a brief description of the evolution and current structure of the individual quota system (IQ) in the Icelandic fisheries. This particular fisheries managerial system was introduced at different times in different fisheries — in the herring fisheries in 1976, in the capelin fishery in 1980 and the demersal fisheries in 1984. Since 1990 all Icelandic fisheries have been subject to a uniform system of individual transferable quotas (ITQs). The paper discusses the social and economic impetus for the initial adoption of the ITQ fisheries system in the various fisheries, sketches its subsequent development and describes the key elements of the current system. Assessments of the economic impact of the ITQ system are presented in the last part of the paper. Although a definitive study of this impact is not available, the various indicators presented generally indicate an improvement, sometimes substantial one, in the economic efficiency of the fisheries in question.
This paper applies both the Engle-Granger and Johansen cointegration test procedures to determine the existence of market linkage among high-valued {salmon and turbot) and low-valued (cod) fish species using monthly average wholesale price data recorded on the Paris fish market. We find that the price of salmon is determined exogenously to the system of prices examined and that the market for salmon is not linked to the markets for turbot or cod.
Implementation of Individual vessel quotas (IVQs) in the British Columbia halibut fishery has provided a unique opportunity to examine the effects of this management technique on a previously intense "derby" fishery. This paper describes the changes that have occurred in the fishery since the introduction of individual vessel quotas in 1991. The results presented here are largely based on the findings of two surveys. In September 1993, we conducted in-depth interviews with most of the major halibut processors in British Columbia. These processors reported significant changes in the processors and marketing of halibut. In Spring 1994, we conducted a mail survey of all 435 licensed halibut fishermen. The survey consisted of several series of questions designed to measure changes in fishing operations (crew size, fishing practices, etc.). quota leasing activities, changes in fishing income, and opinions about the effects of IVQs. The results presented here provide important information about the effects of the British Columbia halibut IVQ program to date and will be useful for comparison to similar management programs implemented elsewhere.
Excess capacity of fishing fleets is one of the most pressing problems facing the world's fisheries and the sustainable harvesting of resource stocks. Considerable confusion persists over the definition and measurement of capacity and capacity utilization in fishing. Fishing capacity and capacity utilization, rather than capital (or effort) utilization, provide the appropriate framework. This paper provides both technological-economic and economic definitions of capacity and excess capacity in fishing and illustrates the technological-economic approach through a case study using Data Envelopment Analysis.
The authors develop a dynamic approach to measuring the evolution of comparative brand premium, an important component of brand equity. A comparative brand premium is defined as the pairwise price difference between two products being identical in every respect but brand. The model is based on hedonic regressions and grounded in economic theory. In constrast to existing approaches, the authors explicitly take into account and model the dynamics of the brand premia. By exploiting the premia’s intertemporal dependence structure, the Bayesian estimation method produces more accurate estimators of the time paths of the brand premia than other methods. In addition, the authors present a novel yet straightforward way to construct confidence bands that cover the entire time series of brand premia with high probability. The data required for estimation are readily available, cheap, and observable on the market under investigation. The authors apply the dynamic hedonic regression to a large and detailed data set about laser printers gathered on a monthly basis over a four-year period. It transpires that, in general, the estimated brand premia change only gradually from period to period. Nevertheless the method can diagnose sudden downturns of a comparative brand premium. The authors’ dynamic hedonic regression approach facilitates the practical evaluation of brand management.
The purpose of this paper is to test for price linkages among European (France, Germany, and U.K.) and U.S. prices of whole fresh cod and frozen cod fillets. In testing for a cointegrated system, we use both the two-stage Engle-Granger and Johansen procedures. Short-run price dynamics are measured using an error-correction model. Based on monthly import price observations from 1980 to 1992, the empirical results show no long-run price relationships for fresh cod between European and U.S. markets, but we do measure long-run price linkages for frozen cod fillets. Within Europe the markets for both fresh and frozen cod product are well integrated. The U.S. fresh cod market is distinct and separate from European markets, while the U.S. frozen cod market shows no short-run links to European markets. There is weak evidence for a long-run international market in frozen cod fillets.
Regulatory controls designed to manage Pacific halibut fisheries are shown to have altered firms' competitive behavior. Managing catch through open access derbies allowed processors to exert monopsony market power at the vessel level during short seasons. As a result, a significant portion of regulatory rents associated with reduced seasons were captured by processors. Results also indicate that processors have not exerted significant market power at the wholesale level.
The problem of optimal regulation of a fishery is discussed. Of special interest is the problem of regulating an overexploited fishery by reducing effort to allow the fish population to build up to a suitable level.We first argue that the problem requires an economic analysis based on the concept of maximization of present value. From this concept we then deduce a simple, general rule, the "Fisher Rule," which we subsequently use to determine optimal exploitation. Among the principal results are the following: (a) an optimal mesh-size is determined, which, because of the discounting of future revenues, is smaller than the size corresponding to maximum sustainable yield; (b) the optimal recovery policy for an overexploited fishery is deduced; it consists of a fishing closure permitting the fish population to reach an optimal age; (c) the optimal development of an unexploited fishery is deduced; an initial development stage characterized by large landings and profits is rapidly transformed into a situation of optimal sustained yield, in which both landings and profits may be significantly reduced; (d) the optimal policy is deduced for a fishery in which gear limitations are impractical; the result may be a strongly unstable fishing industry; (e) the effect of high discount rates, which might be employed by private fishing interests, is discussed; such rates may result in overfishing similar to the case of a common-property fishery.
British Columbia's Individual Vessel Quota (IVQ) system for Pacific halibut was implemented in 1991. Part of the anticipated benefits of an IVQ program for a formerly derby-style fishery are derived from additional revenues generated from an increased season length, which allows for more of the product to be marketed fresh and for new market niches to be developed. This paper is one of the first to empirically examine the ex vessel price effects and the resulting revenue effects of an IVQ system for a derby fishery in which IVQs are imposed. It is found that the price received for B.C. Pacific halibut has increased substantially over what it would have been if there were no IVQ program, and that the price increase grew during the four years during which the program was implemented. The total revenue benefit from the IVQ system to the B.C. fishers over the four years examined totaled C$23.22 million.
Biological changes in Pacific whiting (Merluccius productus) and corresponding production yields were used to model a vertically integrated fishery from harvest through processing. The seasonal bioeconomic programming model incorporated stock dynamics with the interactive economic effects of intrinsic fish quality, the harvest schedule, and quota allocation between heterogeneous user groups. The optimal management plan would maximize discounted net industry revenues (NPV) given a minimum spawning biomass. NPV was maximized when the intraseason timing of harvest coincided with the seasonal improvement in fish quality (e.g., following spawning and/or migration). NPV was only marginally affected, however, by the quota allocation between groups. Copyright 1999, Oxford University Press.
Given a relative lack of knowledge about Japanese consumer preferences for fish, Japanese fish demand is modeled using both Marshallian (ordinary) and inverse demand systems, each of which nests a number of competing specifications. Results indicate that the inverse demand systems dominate the ordinary demand systems in forecasting performance and in nonnested tests. The inverse system suggests that Japanese fish prices are less responsive to changes in consumption than found in previous studies. Copyright 1997, Oxford University Press.
The results from graphical and regression analyses of time-series data on seafood consumption and prices suggest that preferences for seafood have strengthened in response to medical evidence that seafood promotes nutrition and health. The graphical analysis reveals a trend of increased per capita consumption of seafood since the late 1960s despite concurrent increases in the relative price of seafood. The two-phase regression analyses of per capita consumption and of the relative price of seafood identified the mid-1960s and the mid-1970s as possible times of accelerated change in preferences. These results, which match those reported for consumption of poultry and red meats, have important implications for modeling derived demand in landings markets, for estimating welfare, and for managing fishing effort and multiple uses offish stocks.
Throughout its history the North Pacific halibut fishery has experienced dramatic changes in season length—most recently a greater than tenfold decrease during the last fifteen years. This analysis estimates the effect on exvessel halibut demand of season length by incorporating it with other more traditional explanatory variables such as landings, cold storage holdings, and prices of substitutes in a price dependent demand analysis. Exvessel demand is found to be price elastic; thus management programs that increase catch will also increase gross fishing revenues. Cold storage holdings have an inverse relationship to exvessel price. Since the level of cold storage holdings decreases as the fishing season approaches, the date of the first opening will affect the exvessel price. Finally the length of the halibut season does have a positive relationship with exvessel price; management strategies, such as limited entry, that increase season length will increase exvessel demand.
Economic analyses of individual transferable quota (ITQ) fisheries management traditionally have focused on the harvesting sector. However, harvester decisions impact the economic performance of co-dependent processing firms. This paper incorporates both sectors in an analysis of the effect of ITQs on commercial fisheries. Results show that, as a consequence of season elongation under a harvester-only allocation of fishing rights, capital nonmalleability implies that processor quasi-rents will be redistributed to harvesters. These losses could promote political gridlock and jeopardize adoption of an ITQ policy unless they are fully compensated or unless redistribution is avoided by a policy-superior initial allocation of rights to both harvesters and processors.
Competition among processing firms is analyzed in a fishery that is managed under a total allowable catch constraint. Firms compete first in the ex-vessel market for round fish and then in the downstream consumer market. Nash equilibrium prices are characterized at each stage of the vertical market. When the number of processors is sufficiently large, equilibrium prices are approximately Walrasian. The ex-vessel price is close to the processor marginal valuation of the round fish and the consumer price clears the total quantity of processed fish. Implications for market structure, conduct and performance, and fisheries management policy are drawn.
We suggest a model for a market, the Marseille wholesale fish market, in which purchases do not correspond to standard competitive demand. We use nonparametric methods to detect the properties of price-quantity relations which reveal ‘strategic demand’. Our data over three months include price quantity details of each transaction for each fish, and the identities of the buyers and sellers. The observed distributions of prices are stable over time, thus the market can be treated as a repeated game. Strategic demand curves are obtained by local fitting. They are downward-sloping at the aggregate level but not in general at the individual level. Thus regularities are generated by aggregation rather than derived from individual behaviour.
A system of individual transferable quotas (ITQs) was introduced into the southern bluefin tuna (SBT) fishery in 1984. This was the first such management system to be introduced in Australia and among the first worldwide. Its introduction marked a radical departure from traditional management regimes based on limiting the number of boats allowed to operate and other input controls. Because ITQs are a potential management option for many other fisheries, their success or otherwise in improving the economic performance and prospects of the SBT fishery is likely to have ramifications for the future direction of fisheries management in Australia. The impact of the ITQ scheme on fishery profitability is assessed in relation to the expected outcomes of alternative management programs if they had been introduced instead of ITQs. A model that draws together the major biological, physical, and economic relationships in the fishery provides a framework for this analysis.
The individual transferable quota (ITQ) system for wreckfish (Polyprion americanus) in the south Atlantic will be an important test of the practical merits of individual quota management for finfish fisheries in the United States. This paper describes the wreckfish ITQ program in detail and discusses difficulties encountered in its development. Beyond providing information on the practical constraints of setting up ITQs to managers contemplating ITQs for other fisheries, another goal is to evaluate the degree to which the wreckfish ITQ program is accomplishing its resource conservation, economic, and conflict reduction objectives. Analysis of data and experiences over the one and one-half year period during which the wreckfish ITQ has been in place are provided. Linked to the discussion of accomplishing objectives is an evaluation of the degree that consolidation has taken place and the tradeoff between efficiency goals and concerns over monopoly power.
"Technology is not the answer to the population problem. Rather, what is needed is 'mutual coercion mutually agreed upon'--everyone voluntarily giving up the freedom to breed without limit. If we all have an equal right to many 'commons' provided by nature and by the activities of modern governments, then by breeding freely we behave as do herders sharing a common pasture. Each herder acts rationally by adding yet one more beast to his/her herd, because each gains all the profit from that addition, while bearing only a fraction of its costs in overgrazing, which are shared by all the users. The logic of the system compels all herders to increase their herds without limit, with the 'tragic,' i.e. 'inevitable,' 'inescapable' result: ruin the commons. Appealing to individual conscience to exercise restraint in the use of social-welfare or natural commons is likewise self-defeating: the conscientious will restrict use (reproduction), the heedless will continue using (reproducing), and gradually but inevitably the selfish will out-compete the responsible. Temperance can be best accomplished through administrative law, and a 'great challenge...is to invent the corrective feedbacks..to keep custodians honest.'"
The chief aim of this paper is to examine the economic theory of natural resource utilization as it pertains to the fishing industry. It will appear, I hope, that most of the problems associated with the words “conservation” or “depletion” or “overexploitation” in the fishery are, in reality, manifestations of the fact that the natural resources of the sea yield no economic rent. Fishery resources are unusual in the fact of their common-property nature; but they are not unique, and similar problems are encountered in other cases of common-property resource industries, such as petroleum production, hunting and trapping, etc. Although the theory presented in the following pages is worked out in terms of the fishing industry, it is, I believe, applicable generally to all cases where natural resources are owned in common and exploited under conditions of individualistic competition.
In this article, I report the results of a study of the prices paid by individual buyers at the Fulton fish market in New York City. In principle, this is a highly competitive market in which there should be no predictable price differences across customers who are equally costly to service. The results indicate that different buyers pay different prices for fish of identical quality. For example, Asian buyers pay 7% less for whiting than do white buyers, a result which is inconsistent with the model of perfect competition.
This paper discusses the economics of the commercial fishing industry under the hypothesis of independent harvesting and processing sectors (although the possibility of integration is also discussed briefly). The analysis is based on an explicitly dynamic fishery model. The competitive and monopsonistic cases are discussed in detail and compared with the social welfare optimum. The implications for governmental regulation are also investigated.
By reviewing the current demand literature for fish and meat, it is apparent that several inadequacies arise from the problems of market delineation or aggregation errors. Inappropriate aggregation may lead to biases in price elasticities and associated specification problems with respect to identifying substitutes. Formal separability tests allow for identification of appropriate aggregation levels and the relevant products or market boundaries in a systematic manner. A formal demand system for fish and meat can thus be estimated with one data set over various aggregations with the appropriate demographic arguments. The present article tests for separability (and thus relevant substitutes/complements) by estimating different demand systems over different aggregation levels for fish and meat with an identical retail level household data set for the Canadian market.
The population problem has no technical solution; it requires a fundamental extension in morality.
Relationships between prices of goods have held interest within economics in at least two areas - market integration and product aggregation. There is a close relationship between market integration and aggregation, although this has not received much attention in the more recent literature. This relationship may increase the usefulness of market integration studies. In this paper, these relationships are developed and illustrated by an application to the world salmon market. It is shown that the Law of One Price holds for an international market with five salmon species. This result has significant implications for the world salmon market regarding both product aggregation in demand analyses and international trade policy.
A new method is introduced and applied to the British Columbia halibut fishery to analyze changes in productivity of firms harvesting a natural capital stock. The index-number technique decomposes the contributions of output prices, variable input prices, fixed inputs and productivity to firm profits, adjusted for changes in the natural capital stock. An application of the method is given using micro-level data from a common-pool resource. The indexes provide a ready-made comparison of all firms to the most profitable firm per unit of resource stock. Benchmarking with the decompositions also allows firms and regulators to improve overall industry performance by allowing them to analyze what components are contributing most to (relative) economic profits.
This paper develops a model of regulated open access resource exploitation. The regulatory model assumes that regulators are goal oriented, choosing target harvest levels according to a safe stock concept. These harvest quotas are implemented by setting season lengths, conditioned on the industry fishing capacity. The industry enters until rents are dissipated, conditioned on season length regulations. Harvest levels, fishing capacity, season length, and biomass are determined jointly. Using parameter estimates from the long-regulated North Pacific Halibut fishery, predictions of these variables from the regulated open access model are compared to predictions that arise from the Gordon model.
In this paper the Crutchfield and Pontecorvo conjecture that a monopsonistic processing sector would induce efficient use of a common property resource is analysed. It is shown that if the harvesting sector consists of a large number of firms with identical convex technologies, then the conjecture is correct. In addition, sufficient conditions are found under which the stationary resource stock with a monopsonistic processing sector is greater than the efficient size. /// Le contrôle monopsoniste d'une ressource renouvelable en propriété commune. Dans ce mémoire, l'auteur analyse la conjecture de Crutchfield et Pontecorvo à savoir qu'un secteur monopsoniste de traitement d'une ressource en propriété commune engendrerait une utilisation efficace de la ressource. On montre que si la récolte de la ressource est faite par un grand nombre de firmes utilisant des technologies convexes identiques, la conjecture est confirmée. De plus il est possible d'établir les conditions suffisantes qui font que le stock stationnaire de la ressource quand existe un secteur monopsoniste de traitement s'avère plus grand que le niveau de stock dicté par les impératifs de l'efficacité.
Economic Aspects of the Pacific Halibut Fishery, US Dept. of Interior The Economics of Marine Resources and Conservation Policy
- J Crutchfield
- A Zellner
J. Crutchfield, A. Zellner, Economic Aspects of the Pacific Halibut Fishery, US Dept. of Interior, Bureau of Commercial Fisheries, USGPO, 1962; Reprinted as J. Crutchfield, A. Zellner, The Economics of Marine Resources and Conservation Policy, University of Chicago Press, Chicago, 2003.
Marketing losses regulated open access fisheries, in "Fisheries Economics and Trade: Proceedings of the Sixth Conference
- J E Wilen
- F R Homansj
- Catanzano
J. E. Wilen and F. R. Homans, Marketing losses regulated open access fisheries, in "Fisheries
Economics and Trade: Proceedings of the Sixth Conference" (J. Catanzano, Ed.) IFREMER-
SEM (1994).
The Economics of Marine Resources and Conservation Policy
- J Crutchfield
- A Zellner
Intrinsic fish characteristics and intraseasonal production efficiency
- Larkin
Fisheries and the processing sector
- Clark
Property rights in a fishery
- Fox
Household demand for fish and meat products
- Salvannes