Limited Entry and Share-based Fisheries Management
Daniel D. Huppert
Associate Professor, School of Marine Affairs; Adjunct Associate Professor, School of Fisheries; Adjunct Associate Professor, Department of Economics
University of Washington
The task of successful ocean fisheries management requires establishing fishery harvest rules that simultaneously (a) sustain the commercial seafood supply and recreational fishing opportunities, (b) conserve the exploited fish stocks, (c) utilize scarce public and private resources efficiently, and (d) protect key elements of marine ecosystems. The rules are usually expressed as an annual total allowable catch (TAC) for each species harvested and a long list of permitted and prohibited acts. The TACs are reckoned to balance mortality caused by fishing with natural growth potential of the fished populations. The list of rules often includes prohibition or restriction on fishing gear used (number of hooks, size of gill net, use of turtle exclusion devices in shrimp trawls), prohibition of fishing in certain areas seasonally or entirely (including MPAs and no-trawl zones), limits on the numbers of people or firms allowed to participate in a fishery (license limitation or individual harvest shares), and prohibition on retaining fish of certain species, size or sex. In the US, fisheries regulations are typically worked out in consultation with regional interests and agencies through State Fish and Game Commissions or, for resources beyond 3 miles from shore in the Exclusive Economic Zone, the Regional Fishery Management Councils.
One of the problems faced by the Councils and other fishery management authorities is the historically weak development of social conventions and law concerning fishing rights. While the Fishery Conservation and Management Act of 1976 clearly established Federal ownership of the fishery resources in the Exclusive Economic Zone, further enumeration and assignment of rights to take this public property for private use has evolved slowly and fitfully. Lack of well-specified individual harvest rights encourages fishing firms to compete for larger shares of the TAC by fishing earlier, faster, harder and at greater expense and risk. This in turn exacerbates the dangers of fishing, when commercial fishing is already the most dangerous profession, and it encourages vast and unnecessary investment in fishing and fish processing capacity. One astute observer (Francis Christy, 1997) calculated that US ocean fisheries waste $2.9 billion per year in excessive costs, largely as a result of our poorly formulated rules for sharing harvest rights.
The most promising avenue for avoiding this waste of resource is the sub-division and allocation of harvest rights to individuals. Given a specific harvest right, the individual (whether a family firm or a big corporation) has an economic incentive to harvest the fish at a low cost while also responding to needs of the fish consumers and markets. Experience with individual fishing quotas in the Alaska sablefish and halibut fishery bears out this promise. Fishermen have transformed their approach to fishing by reducing the direct competition for harvest shares and by altering the timing and placement of fish harvests to meet market demand. The value of the harvest has increased and the cost of operations decreased, yielding much higher economic returns from the fishery overall. This is reflected in the billion or so dollars of wealth created in the marketable harvest rights.
But many people are concerned about the equity of allocating exclusive rights to harvest public-owned fish stocks and about the possible disturbances caused to fishing communities as the industry restructures under the new institutions. These concerns were perhaps responsible for the political pressures in Congress, leading to the Sustainable Fisheries Act of 1996 which prohibited the development and implementation of new individual fishing quota programs until October 1, 2000. It also called for the repeal of any new individual fishing quota programs approved by the Secretary of Commerce after January 4, 1995. The Congress extended the moratorium during the appropriations process in 2000.
During the moratorium, and at the behest of Congress, the National Academy of Sciences reviewed the problems and promises of individual fishing quotas (IFQs) and published their recommendation to lift the moratorium and to allow the Regional Councils to develop appropriate measures within the context of regional fisheries. It is time to follow this advice. The Councils have demonstrated that they are capable of developing rules for IFQs that address a variety of social and economic concerns raised by industry and the public. The proper place for deliberating and deciding these rules is not the Congress, but is rather the regional decision making bodies with direct knowledge of the circumstances in the fisheries.
Other options for allocating harvest shares include license limitation and fishing cooperatives. The license limitation approach simply places a limit on the number of firms authorized to participate in a particular fishery - a measure that has been used extensively in salmon fishing, crab fishing, and groundfish fishing in Alaska and off the Pacific coast. Where annual TACs cannot be reliably established before the fishing season, license limitation may be a good second-best alternative to individual quota shares. A fishing cooperative is typically a voluntary organization of fishing firms which allocates and coordinates some portion of the TAC. For example, the Pacific Whiting Conservation Cooperative consists of three firms that manage the portion of the whiting TAC that is allocated to the factory trawler fleet by the Pacific Fishery Management Council. These can be established voluntarily and without Federal government assistance, but the formation of such an organization becomes difficult when numerous firms must be included and especially when the group of firms has no statutory claim to a share of the TAC. Cooperatives can be encouraged and shaped by Federal rules that define which groups of fishing firms are eligible for what shares of the TAC and under what conditions. The Alaska Pollock Cooperatives organized in 1999-2000 are examples of this option. However the cooperatives are formed, the explicit allocation of harvest rights to firms within the cooperatives create incentives to harvest more efficiently and at a reasonable pace.
So, in the spirit of decentralized democracy, good resource management, and economic efficiency the Councils should be permitted to explore a number of approaches to allocating fishing rights, including those known as license limitation, individual fishing quotas, and fishing cooperatives. This requires only that the moratorium on individual harvest shares be lifted and that no burdensome procedural rules be placed upon the regional participants in fishery management.
References
Christy, Francis T. 1997. Economic Waste in Fisheries: Impediments to Change and Conditions for Improvement. Pp 28-39 in Pikitch, Huppert, and Sissenwine Global Trends - Fisheries Management, American Fisheries Society Symposium 20. Bethesda, Maryland.
National Research Council. 1999. Sharing the Fish: Toward a National Policy on Individual Fishing Quotas. National Academy Press. Washington, D.C.
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