Fleet management and regulation access to fish stocks

Olivier GuyaderNatural resources economist

Marine economics unit - Ifremer, UMR AMURE

Fisheries Commission - European ParliamentBrussels, 23 November 2011

Outline1 The issue of overcapacity, and its economic /

institutional drivers

2 The need for efficient access regulation mechanisms

3 Pros and cons of administrative/market approaches

4 Bio-economic implications of the transition to MSY

5 Concluding remarks

1. The issue of excess capacity, and its economic /

institutional drivers

Trends in the EU fishing fleet capacity (in terms of kW), 1992-2008(Source: EC, 2008)

Effective+18%

Effective+18%

Nominal-25%

Nominal-25%

Whatever the interest of widening the approach of fisheries management to marine ecosystems, a major cause for fish stocks overexploitation has been well identified for long :

(increasing) excess harvesting capacity

Fish are common pool resources

Individual catches are a function of other’s effort

Individual effort

Development of excess capacity

Economic losses

Pressure on resources

Individually rational choices

Collectively rational choices≠

Excess harvesting of fish stocks

Key drivers are institutional / economic

User conflicts

Gordon, 1954; Scott, 1955; Hardin, 1968

Non-excludability Rivalry in consumption

The issue has a time-dimension

• Negative externalities between fishers harvesting the same stocks increase with anthropic pressure, which generates feedback loop:

Anthropicpressure on

stocks

Externalities between fishers

Excess harvesting capacity

• Anthropic pressure on stocks is fostered by:

− Technical progress, which increases catchability− increasing demand for fish− And by public incentives to the increase in fishing effort

(Mesnil 2009, Sumaila 2009).

2. The need for efficient access regulation

mechanisms

So, what can be done?

• Development of excess capacity is an endogenous tendency in the fishing industry, but it is by no means unavoidable.

• It can be successfully neutralized by proper fisheries management.

• But this cannot be achieved by conservation measures (including MPAs – see e.g. Hannesson, 1998).

Basically, fisheries management is (or should be) composed of two complementary types of measures:

Conservation :Preservation of

productive / reproductive capacity

of stocks (and habitats)

Access regulation :

Allocation of this capacity among

harvesters

Selection of harvesters

Determination of individual harvesting shares

Limitation of total catch

Selectivity of catches, gear impacts

Regulating access to fish resources:questions to be answered

Control variable ?

Catchesor

Non-transferable individual

authorisations

Control method ?

administrative (norms / rules) or

economic (incentives)

TaxationTransferable

individual authorisations*

* So-called « rights-based management »

Effort

Co-management

3. Pros and cons of approaches

No approach to the problem is exempt from difficulties

Control variable

• multi-dimensional nature of effort, and strong substitution possibilities between its components

• technical progress requires permanent adjustments

Difficulties related to controlling « fishing effort »

• monitoring of landings

• discards

Difficulties related to controlling catches

Control method

• criteria for the selection of operators

• fine-tuning of allocations to changes in individual circumstances

• de facto transferability

Difficulties related to administrative approaches

• sensitivity of the initial allocation issue

• possible market distorsions

• negative social effects attributed to the use of these instruments (employment, concentration)

Difficulties related to rights-based approaches*

*taxation is seldom used as an access regulation instrument

Source: Copes (1986), ... OECD (2010)

Regulation by effort

Source: Le Gallic, 2006

Diversity of approaches in practice – the OECD experienceRegulation by catches

XXXXXXXXUnited-States

XXXXXXCanadaXXCorea

XXIceland

XXXXNetherlandsXPoland

XXPortugal

XX(X)XXFranceXGreece

XIrelandXXXItaly

XXXXSpainXFinland

XXXBelgiumXXXXDenmark

(X)XXGermany

XXSweden(X)XXXXXUnited-Kingdom

XMexicoXXXNorway

XNew-Zealand

XXXJapan

XXXXAustralia

Transferable indiv.

quota

Individual quota

Quota / vessel

Community quota

Transferable effort/vessel

Transferable limited

licences

Territ. Use

Rights

Effort / vessel

Limited licencesCountry

XXXXXXXXUnited-States

XXXXXXCanadaXXCorea

XXIceland

XXXXNetherlandsXPoland

XXPortugal

XX(X)XXFranceXGreece

XIrelandXXXItaly

XXXXSpainXFinland

XXXBelgiumXXXXDenmark

(X)XXGermany

XXSweden(X)XXXXXUnited-Kingdom

XMexicoXXXNorway

XNew-Zealand

XXXJapan

XXXXAustralia

Transferable indiv.

quota

Individual quota

Quota / vessel

Community quota

Transferable effort/vessel

Transferable limited

licences

Territ. Use

Rights

Effort / vessel

Limited licencesCountry

Examples of access regulation instruments in France

EffortCatches

Economicincentives

Administrative

Method

Variable

EU licence

Licence and quotas individuels (Abalone Northern Brittany)

Scallop licences with hoursat sea, gear regulation

Licences for bivalves

Second hand vesselmarket

NephropsLicence

individual quota bluefin tuna

Bay of BiscaySole individualquota (POs)

BB Sole Fishingpermit per

métier

Administration

Fisheries committees

Producers organisations

An example of de facto transferable fishing rights:

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Bill

ion

cons

tant

eur

os (f

ixed

base

in 2

003)

Physical value Value of intangible assets

The implicit value of fishing rights capitalized in the price of second hand vessels in France (source: Guyader et al., 2005)

Source: Gutierrez, Hilborn, Defeo, Leadership, social capital and

incentives promotesuccessful fisheries, Nature, 2011

Survey: 130 co-managed fisheries

Role of co-management in successful fisheries

4. Bio-economic implications of the transition to MSY

bio-economic simulations of management options in the BB common sole fishery (constant TAC 4100 tons / fleet)

Source: Macher, Guyader et al., 2011, Merzéréaud et al., 2011, Simmonds et al., 2011

Catches

Access regulation regime, enforcement and governance to be

strengthened in order to stay aroundMSY

and avoid- increase in fleet capacity,

- rent dissipation, - overexploitation

yields per vessel, fleets profitability

Biomass Catches

5. Concluding remarks• The major cause of fisheries mismanagement is well identified: it is

the failure to address successfully the endogenous tendency to excess harvest capacity (often worsened by public subsidies)

• Solutions to this problem are also well known: individualisation of fishing rights, based wherever it is possible on catches, rather than on effort (uncontrollable in the long run) individual quotas + licence per gear or métier to promote more selective gears

• Innovative co-management arrangements seems to be a condition for successful management (acceptation and enforcement)

• The transferability issue is often misunderstood: once individual fishing rights have been clearly defined, they get a value and become transferred. As a result, the question is not: should individual rights be transferable, but rather: how to institute and regulate an efficient and fair system of transferability ?

5. Concluding remarks• Role of norms in the definition of individual fishing rights allocation,

especially regarding the impacts of fleets on the ecosystem • As long as the issues concerning access regulation are not solved,

conservation measures, wether “traditional” or more “ecosystemic” (e.g. MPAs) are likely to bring poor results.

Thank you for your attention

The link between access regulation and resource conservation:recent empirical evidence

(Costello, Gaynes and Lynham, Science 321, 1678 (2008))

1950 Year2000

0%

10%

20%

30%

100%

75%

50%

25%

0%

% collapsed fisheries

Without ITQs With

ITQs

% ITQsimplemented

The survey: 11,135 world fisheries, 1950-2003.

Main conclusions:•27% of non-ITQ fisheries were collapsed in 2003.

Among which 121 fisheries under ITQs in 2003.

Left axis: % of collapsed fisheries (landings < 10% of historical record).

•but only 13% among those under an ITQ management system.

23

Catch Capacity for biologists

– Fishing pressure (F) =

capacity X fishing activity X efficiency X capturability

Fishing effort

– Yields (CPUE) =

fishing pressure X biomass