Fisheries Economics

1
Fisheries Economics

• David Letson
• Marine Affairs/Economics
• University of Miami

2
The Basics

• Fisheries are renewable resources, like forests.
• Unlike forests, we harvest the growth each year.
• Open access and ill-advised public policies.
• We will consider
• efficient management and
• reasons for spectacular counterexamples.

3
Concerns

• Bycatch
• Uncontrolled access
• Technological advances
• Globalization of world markets
• Habitat destruction
• Allocation commercial and recreational
• Transboundary stocks

4
Tragedy of the Commons

• Resource accessible to all but belonging to none
• Individual motivation versus public well being.
• Garrett Hardin
• Resource characteristic or a human institution?

5
Why do they keep fishing?

• Economic motivation
• capture of benefits
• costs of depleted stocks
• subsidies
• Overfishing is rational but inefficient.
• Identity as fishers.

6
Descriptive Statistics

• UN/FAO marine species over-exploited
• US is sixth largest producer
• Recreational fishing also important
• Flat growth since 1989 understates real decline
• Economic losses.

7
ExampleUS Groundfish

• Edwards and Murawski
• Multi-species groundfishery off New England
• 70 reduction in effort would maximize value
• Seven-fold increase in stocks
• Three-fold increase in sustainable yield
• Add value 150M/year.
• Realization depends critically on property rights.

8
What is a fishery?

• Stock of fish
• initial size
• growth rate
• recruitment,
• growth of individuals, and
• mortality.
• Fishing enterprises
• fishing effort
• catch
• costs and revenues

9
Fishing effort

• A composite input to production
• inputs other than the fish stocks.
• Measure of inefficiency.
• Relevant considerations
• boats, nets, traps
• crew
• spatial distribution of stocks, fishers,
  consumers
• time spent fishing.

10
Biological Assumptions

• Growth of fish stocks is a function of the
  initial stock (Schaefer logistical growth).
• We focus on recruitment, individual growth, and
  natural mortality.
• We dont consider salinity, temperature,
  currents, weather, predator/prey relationships,
  pollution, loss of habitat, etc.

11
Economics of an open-access fishery

• Total sustainable revenue
• Total cost of harvest
• Maximum Sustainable Yield
• Maximum economic yield

12
Extensions

• Fishers not homogeneous.
• Time lags Slow, painful adjustments.
• Multi-species. Multi-nation.
• Individuals sometimes do cooperate.
• Regulators do not always act in social interest.

13
Fisheries Management (I)

• Will future catches compensate for todays
  restraint?
• Facilitate transfer of resources to beneficial
  use?
• How will regime affect prices and harvest costs?
• Will improved stocks attract additional effort?

14
Fisheries Management (II)

• Usual approaches
• catch quotas,
• trip limits,
• bag limits,
• gear restrictions,
• limits on fish size, and
• seasonal and area closures.

15
Fisheries Management (III)

• Usual ways Raise harvest costs, with profits
  still zero.
• Effort increases to take advantage of the
  improved stocks and catch rates.
• Need use rights for fish stocks.

16
Individual transferable quotas (ITQs)

• Allocates shares of TAC to individuals.
• Fishers still decide who, when and how.
• Design issues
• eligibility, duration, transferability
• Initial allocation.

17
Management Review

• Restrictiveness correlated with success.
• Complexity of fishery, success inversely related.
• Unpopular programs do not succeed.
• Failure necessary before restrictions accepted.
• Success creates pressure to increase access.

18
Conclusions

• World fisheries in decline.
• Open access encourages over-harvest.
• Subsidies worsen problems.
• Management must reduce effort, protect habitat.