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The Economics of Fisheries Management and Marine Conservation

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Fall in prawn prices, increase in harvest costs (esp. fuel and management changes). Too many boats, chasing too few prawns.' Implementing MEY with rights-based ... – PowerPoint PPT presentation

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Title: The Economics of Fisheries Management and Marine Conservation


1
The Economics of Fisheries Management and Marine
Conservation R. Quentin Grafton and Tom
Kompas Crawford School of Economics and
Government Australian National University
2
Why regulate a fishery?
  • Common property and the race to fish.
  • The inevitable consequence of the race to fish
    over-capitalization, falling profits and stock
    depletion or overfishing.
  • Regulation Licence restrictions, output/effort
    controls, input restrictions, seasonal/area
    closures, ITQs.
  • Goal Provide a secure property right, guaranteed
    share of a sustainable harvest, maximum profits
    and autonomous/voluntary adjustment.
  • Right target and the right instrument.

3
Maximum Economic Yield (MEY)
  • MEY A sustainable catch or effort level that
    creates the largest difference between
    (discounted) total revenues and the total costs
    of fishing.
  • For profits to be maximized it must also be the
    case that the fishery applies a level of capital
    and other resources in combinations that minimize
    the costs of harvesting at the MEY catch level.

4
Why MEY as a target?
  • Maximizes fishery profits, regardless of changes
    in the price of fish or cost of fishing.
  • Improves international competitiveness.
  • Resilience to economic shocks.
  • Conservationist in most cases stock size is
    larger than that associated with MSY.
  • Provides added resilience and other environmental
    benefits.
  • Proper resource allocation
  • Prevents over-capitalization, falling
    incomes/asset values and expensive adjustment
    programs.

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11
MEY results in the Southeast Trawl Fishery
(Kompas and Che 2006)



Species

B/B

B/B

h

h

h

MSY
(steady



(TAC
)

(
in
2004)

state)

Orange roughy
/
E
astern

1.15

1.29

703

520

600

Orange roughy
/
Cascade

1.47

1.64

995

665

1
,
600

Spotted warehou

1.08

1.30

4
,
117

3
,
114

4
,
100

Ling
(trawl)

1.29

1.80

1
,
397

914

1
,
073

Flathead

1.03

1.05

3
,
850

2
,
980

3
,
200

Blue grenadier







normal

year

1.25

1.32

9,000

6,590

8,650


shooting year



10,450

7,650









12
MEY and MSY of the Western and Central Pacific
big eye tuna
13
MEY and MSY of the Western and Central Pacific
yellow fin tuna
14
Further considerations
  • Transition and steady state outcomes
  • Speed of adjustment
  • Planning horizon
  • Target vs. Instruments
  • Rate of discount

15
Implementing MEY whats wrong with input
controls?
  • Inability to control effort creep or fishing
    power inevitable race to fish behaviour and
    over-capitalization.
  • Wrong input combinations and lower profits.
  • Perpetual cuts in effort, non-voluntary
    adjustment, differential impact on operators.

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18
Input substitution (NPF)
19
Problems in the NPF
  • Inability to control effort creep.
  • Property rights are not secure.
  • Frequent (non-voluntary) structural adjustment,
    with or without an MEY target.
  • Falling profits and regulation that increases the
    cost of fishing.
  • Fall in prawn prices, increase in harvest costs
    (esp. fuel and management changes).
  • Too many boats, chasing too few prawns.

20
Implementing MEY with rights-based harvesting
  • Output controls (TAC) combined with ITQs are the
    preferred instrument for most fisheries.
  • ITQs transferable right to a share of the (MEY
    target) harvest.

21
Why ITQs?
  • No race to fish incentive, no tendency to
    over-capitalize.
  • Technological change lowers the costs of fishing
    and does not threaten stocks.
  • Efficiency gains quota trade from high to low
    marginal cost vessels compensation for catches
    larger than anticipated.
  • Fishers choose the mix of inputs and when to
    fish.
  • With MEY target autonomous (voluntary) fishery
    adjustment.

22
Implementing Property Rights in western and
central Pacific
  • High-seas fisheries, EEZs and RFMOs
  • Restricted access
  • Country quotas
  • Fisheries allocations

23
Concluding remarks
  • Need to consider both the biology and economics
    for effective management.
  • Need the right instrument and the right target.
  • MEY is conservationist.
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