Transcript The economics of fishery management

The economics of fishery
management
The role of economics in fishery
regulation
Simple model of fish biology
Biomass
(x)
“Carrying
Capacity”
time
xMSY
Stock that gives “maximum
sustainable yield”
x
Interpreting this curve
• Growth rate of population
depends on stock size
low stock  slow growth
high stock  slow growth
• Also “sustainable yield curve”
• MSY
x
Introduce humans
Harvest depends on
Harvest “effort”, stock size, and technology
H
Harvest for high effort
kEHx
H = k*E*x
k = technology “catchability”
E = effort (e.g. fishing days)
x = biomass or stock
kELx
Harvest for low effort
x
Does stock grow or shrink?
If more fish are harvested than grow,
population shrinks.
If more fish grow than are harvested,
population grows.
For any given E, what harvest level is
just sustainable?
Where k*E*x =
“Yield-effort curve”
H(E)
Gives sustainable harvest
as a function of effort level
E
Introduce economics
Costs of harvesting
TC = w*E
• w is the cost per unit effort
Revenues from harvesting
TR = p*H(E)
• p is the price per unit harvest
Draw the picture
$
TC=w*E
Rents
to the
fishery
TR=p*H(E)
EOA
$/E
E
Value of fishery
maximized at E*.
Profits attract entry
to EOA (open access)
MR
w
MC
E*
E
Open access resource
Economic profit: when revenues exceed
costs (not accounting profit)
Open access creates externality of entry.
I’m making profit, that attracts you, you
harvest fish, stock declines, profits decline.
Entrants pay AC, get AR (not MC, MR)
So fishers enter until AR = AC
But, even open access is sustainable
Though not socially desirable
Why manage fisheries?
Otherwise, open access: externality of entry
drives value of fishery to 0.
May drive to extinction (or economic extinction)
Non-extractive values ignored.
Technology may destroy habitat, harvest
individuals that should not be harvested, etc
(another consequence of open access)
Technology may improve, so management must
keep up.
How manage fisheries?
Depends largely on characteristics of
fishery
Biology & status of stocks
History of extraction
Commercial vs. subsistence, status of stocks
Other values (non-extractive, recreational)
May failures, some successes
Some management alternatives
Harvest quotas (for whole fishery)
Individual transferable quotas (ITQ, IFQ)
Marine reserves (area closures)
Season closures
Ex-vessel tax (few)
Regulated entry (licenses)
Regulated efficiency (gear)
Effort tax (few)
Small-scale fisheries
Many small, multi-purpose boats
Difficult to enforce regulations
Local management most successful
Kinship rights, social pressure
Mainly limited entry, also gear, some
area closures, etc. Often self-imposed.
New entrants, technology, & markets
are attractive; can be destructive
History of cooperativas
Pre-1991: “Reserved Species Regime”
Lobster, abalone, etc. only harvested by fishing
cooperatives (A property right)
Post-1991: “Concession Regime”
Gave access rights for 20 years in particular areas
(benthic) or by boats (pelagic) (Another form of
property right)
Post-2000: “National Fishing Guide”
Info on catch, status, management of 287 marine
species (Pacific) – each fishery different.
Spiny Lobster Fishery
Lobster
2,500
M Tons
2,000
1,500
1,000
500
0
1978
1982
1986
1990
1994
1998
2002
• Maximum Sustainable Yield
• No increase in Fishing Effort
Abalone Fishery
Abalone meat
1,400
1,200
M Tons
1,000
800
600
400
200
1978
1982
1986
1990
1994
1998
2002
• Overfished
• Quota system
• Reference point:
Bt > Bt-1
• No increase in fishing effort
Fishing Areas - Cooperativas
29.00
28.80
28.60
PNA
28.40
28.20
PUR
28.00
BP
27.80
BT
27.60
27.40
EMAN
27.20
CSI
27.00
LR
26.80
PROG
26.60
PA
26.40
26.20
-116.00
-115.60
-115.20
-114.80
-114.40
-114.00
-113.60
-113.20
Cooperativas
Often devise own rules – social pressure
to abide.
Have exclusive rights to areas, selfenforce.
Federal management supercedes bargaining process with feds to
determine management
Individual Transferable Quotas
Regulator sets “total allowable catch”
(TAC).
Distributes quotas (auction, sell at fixed
price, give away based on historical
catch, or equal distribution)
Quota rights can be traded.
Some systems, buy right to harvest in
perpetuity (as % of TAC)
ITQs and property rights
Prior to 1976 coastal nations did not have
rights to marine resources in “high seas”
1976 Magnuson Act & Law of the Sea: Grants
rights to coastal nations to marine resources 200
miles from shore.
But how to regulate within a country?
ITQs effectively secure property rights to fish
in the ocean.
Lack of property rights is what causes problems
with open access
Potential problems with ITQs
Allocation of quotas?
High-grading incentive
Enforcement & administrative costs
Most quotas held by largest firms
“privatizing the oceans”?
How set TAC in first place?
Alaskan Halibut
Prior to adoption, season 1 day
Poor fish quality, excessive investment for
harvest, frozen most of year.
Adopted 1995: free allocation to fishing
vessels based on historic catch.
Debit cards, fish tickets for enforcement
A success, longer season, higher profits,
more fish, bigger/better quality fish