Bidding and performance in multiple unit combinatorial fishery quota auctions: Role of information feedbacks

This article explores the role of market information and learning in multiple unit combinatorial markets for fishing quota. Combinatorial auctions allow trading of packages of different types of quotas (for example for different regions or industry) in the same auction market. Bidders can submit package bids which would allow them to enjoy synergy benefits. However, to realize the full benefit bidders require comprehensive understanding of the market. This article focuses on the impact of varying levels of information feedback on performance in multiple unit forward combinatorial auctions using laboratory experiments. In a general context of trade in fishery quota, it was asked whether (a) providing additional market information and (b) learning through time helps in more efficient outcomes. It is found that much of the benefits of information are derived from structural effects, like repeated rounds and package valuations. Providing additional market information does not improve auction performances to a large extent. These results will be useful in designing more efficient combinatorial markets for fisheries quota.     

Fisheries quota allocation: Laboratory experiments on simultaneous and combinatorial auctions

Markets for individual tradeable fishing quota are evolving and maturing in many countries throughout the world. Synergies in spatial and temporal packages of fishing quotas have yet to be explored and exploited. The relative performance of simultaneous multi-round and combinatorial auctions has been well documented and explored in a number of environments including the allocation of spectrum rights by the US Federal Communications Commission, aircraft take-off and landing slots, as well as pollution emissions allowances. It is therefore timely and policy relevant to explore the relative performance of simultaneous and combinatorial fishery quota markets in controlled experimental environments. This paper reports the results of a series of economic experiments exploring the relative merits of these alternative fishing quota markets. The results provide important insights into the future development of individual tradeable fishing quotas.     

Fish quota auctions in the Russian Far East: a failed experiment

For three years (2001–2003), fish quotas in the Russian far east (REE) were allocated by auction. First, a short overview of the RFE fisheries is provided and how the total allowable catch (TAC) is allocated between regions and (before the auctions) enterprises. Then the auction system is discussed. The purpose of the auctions was to divert some of the resource rent to the state budget and to increase the transparency of the quota allocation mechanism. In the end, a lot less of the TAC than intended was sold by auctions. Nevertheless, the auctions provided a substantial income for the government. On the other hand they led to a decline in industry profits and greater indebtedness of the industry. Arguably they also led to more of illegal fishing, as firms bought quotas in order to cover operations on a greater scale that were not well monitored. In 2004 the auction system was abandoned, in part due to pressures from the industry.     

Lessons for fisheries management from the EU cod recovery plan

The performance of the EU long-term management plan for cod stocks, in force since 2009, is analysed focusing on the human and institutional factors. The plan operates through landings quotas (TACs) and effort restrictions following a Harvest Control Rule, and deploys a novel instrument allowing Member States to ‘buy back’ or increase fishing effort for fleet segments engaged in cod-avoidance measures. The stipulated fishing mortality reductions have not been achieved. On the positive side, the ‘buy-back’ instrument has led to increased uptake of selective gear and implementation of permanent and real-time temporary closures. On the negative side, ignoring the dimension of fishers as reactive agents in the design, the impact assessment, and the annual implementation of the measures has contributed to the failure to adequately implement the plan and achieve its objectives. The main problem is that the landings quotas taken in a mixed fishery did not limit catches because fishers were incentivised to continue fishing and discard overquota catch while quota for other species was available. The effort limitations intended to reduce this effect were insufficient to adequately limit fishing mortality in targeted fisheries, although fishers experienced them as prohibiting the full uptake of other quotas. Recommendations for future plans include (i) management through catch rather than landings quotas, (ii) the internalisation of the costs of exceeding quotas, (iii) use of more selective gear types, (iv) the development of appropriate metrics as a basis for regulatory measures and for evaluations, (v) participatory governance, (vi) fishery-based management, (vii) flexibility in fishing strategy at vessel level.     

Distribution of economic returns in small-scale fisheries for international markets: A value-chain analysis

Small-scale fishers are often believed to receive marginal earnings for seafood relative to other value- chain actors but proportionate incomes across different traded species are rarely compared. This study compares value chains for 15 species of sea cucumbers between Fiji and Kiribati using data collected on sale prices of dried products (bêche-de-mer) from fishers to middlemen and exporters, export prices and market retail prices in China. Pacific islanders comprised almost all fishers, but represented only some middlemen and few exporters. Proportional increases in prices along the value chains differed greatly among sea cucumber species and between countries. Fishers’ earnings varied greatly among species. The relative share of the end market value they received was negatively related to product end-market value; on average 50% of the end retail value for the lowest-value species but <10% for the highest-value species. Most fishers lacked information about market prices. The gross markup of exporters differed greatly between the two countries. Downstream actors reaped increasingly higher proportions of the product value for higher value species. Variation in sale prices between countries and fishers for the same product indicates a potential for higher earnings to fishers. Improved transparency of prices to fishers could empower them to negotiate higher prices, especially for more valuable species. Upgrading of value-chain governance, e.g. through fisher cooperatives or auction systems, could improve efficiency and fisher incomes, potentially reducing the need for high fishing rates. Such interventions will benefit from understanding the value-chain patterns among different species harvested in multispecies fisheries.     

The challenges of the landing obligation in EU fisheries

A feasibility study was conducted on the impacts of the new Common Fisheries Policy (CFP) rules requiring catches in regulated fisheries to be landed and counted against quotas of each Member State - the landing obligation (LO), and that catch of species subject to the LO below a minimum conservation reference size (MCRS) be restricted to purposes other than direct human consumption. The aim was to estimate the level of discarded fish likely to be covered by the new rules, the impact of the rules on EU fisheries and the regulatory challenges and responses to them. Data from EU's Scientific, Technical and Economic Committee on Fisheries (STECF) database were analysed to estimate the volume of unwanted catches produced by EU fisheries. Views were sought from policy officials and fisheries scientists through a questionnaire on the implications of the LO and the control of fisheries across Member States, and the potential adjustments that might be needed. Findings show that 11% (44,000 t) of the total catches of EU countries from which data were available are of fish under MCRS. The species with the highest volume of undersized discards associated with the lowest quota, which would potentially restrict the fishing opportunities for other quota species (i.e. choke species), are plaice and haddock with 18,000 and 14,000 t of undersized fish respectively, followed by whiting and cod with 5000 and 6000 t of undersized fish respectively. Discards data shows that the Netherlands, United Kingdom, France and Belgium will be most affected by landings for non-human markets. Findings also show that existing infrastructure at landing ports in all Member States is limited because there are currently limited facilities in place to handle animal by-products produced by the catching sector. Policy officials maintained that while they could support the fishing industry through funding programmes, it is the responsibility of fishers to ensure they have the right infrastructure to handle unwanted catches. The expectation is that the LO combined with the restriction to non-human consumption purposes will encourage fishers to internalise the costs of catching unwanted fish and motivate them to avoid unwanted catch. This will be realised if sufficient flexibility is given to fishers to find their own solutions to reducing unwanted catches. It is concluded that gear technology measures exist to enable the regulated fisheries to increase gear selectivity.     

Catch shares have not led to catch-quota balancing in two North American multispecies trawl fisheries

Catch shares, where annual catch limits are divided among individuals, communities or cooperatives, are a commonly used fisheries management strategy to increase profits and reduce overcapitalization. Usually these quota shares can be sold or leased, which is theorized to allow for greater utilization of fleet-wide quota. However, this catch-quota balancing may not be achieved in multispecies trawl fisheries where it is difficult to selectively target valuable species while avoiding overfished species. Two similar catch-share-managed, multispecies trawl fisheries were compared to evaluate whether catch shares lead to catch-quota balancing. The U.S. West Coast Groundfish fishery has several species with low total allowable catches (TACs) while the Canadian British Columbia Trawl fishery has comparatively higher TACs. Results indicate that the West Coast fishery had a statistically significant decrease in catch-quota ratios from 0.41 in the three years before catch shares to 0.29 in the three years after catch shares. In contrast, the BC fishery experience no statistically significant change in fishery-wide average catch-quota ratios, which were 0.70 in the three years before and 0.62 in the three years after catch shares. In the West Coast fishery, the risk of exceeding quotas for some species may be so high that fishers are unable to achieve high degrees of catch-quota balancing and instead focus on species that can be easily selected with changes in fishing behavior. Multispecies fisheries management has direct tradeoffs between maximizing yield and achieving conservation goals, and these results may highlight the tradeoff between rebuilding overfished species by reducing TACs, and the achievement of catch-quota balancing.     

Factors contributing to effective management in the Sakuraebi (Sergia lucens) fishery of Donggang,Taiwan

An in-depth assessment was conducted on the functioning of a Taiwanese Sakuraebi (Sergia lucens) fishery management institution to understand the role of leadership in the context of long-term incentive creation. Interviews with relevant stakeholders and statistical analysis of fisheries data indicated that the daily vessel quota system and fishers’ collective efforts to influence the market resulted in increased sales value, while simultaneously allowing for the equitable distribution of benefits from the Sakuraebi fishery in Donggang, Taiwan. Local fishers expressed a high level of satisfaction with the corresponding activities initiated by the fisher's organization. Interview respondents felt that promotional marketing activities led by the organization to enhance domestic consumption were particularly effective, and statistical analysis suggests that these activities helped to reduce the dependency of Taiwanese Sakuraebi fishers on export markets. A notable characteristic of this fishery is that it combines a large-scale sales organization, which enables the exertion of market influence, with a small-sized subsidiary organization for fisheries management. An annually rotating leadership system for managing fishery operations also provides members with the opportunity to share a sense of participation and responsibility, while keeping long-term policy goals. This study reinforces previous findings that leadership, social cohesion, and the nature of the resource are key factors determining the effectiveness and success of fisheries management.     

Stakeholder perceptions of the northern Gulf of Mexico grouper and tilefish individual fishing quota program

The Gulf of Mexico Fishery Management Council determined that previous management of the grouper and tilefish fisheries in the northern Gulf of Mexico were not meeting management goals, and developed a catch shares program using individual fishing quotas (IFQs) beginning in January 2010 in order to more effectively manage these fisheries. An IFQ is a management method in which individual fishers and corporations are allocated the right to harvest a percentage of a fishery's total allowable catch, thus specifying how much of a particular species each fisher can harvest. This study makes use of a mail out survey to document the perceptions of fishers, seafood wholesalers, fisheries managers, and academics with an interest in the (northern) Gulf of Mexico grouper and tilefish IFQ program. While fishers, seafood dealers, fisheries managers, and academics all acknowledge that the IFQ program will create some problems, commercial fishers and dealers were far more skeptical of the alleged benefits of IFQs. Moreover, larger commercial operators were more inclined to agree with managers and academics that the IFQ program will produce several benefits for their operations and the fisheries. Some smaller operators believe that they will be driven to ignore the new rules or be forced out of business. In the future, the Gulf Council might do two things: put a bit more effort into making fishers aware of the potential benefits of IFQs, and develop alternatives with more flexibility perhaps working more closely with communities of fishers, who prize their independent way of life above all else.     

Beyond individual quotas: The role of trust and cooperation in promoting stewardship of five Australian abalone fisheries

Private property rights, such as individual transferable quotas, are thought to encourage fishers to act as resource stewards. To achieve this, however, fishers must be able to cooperate with each other. This paper examines the relationship between trust, cooperation and stewardship in five abalone (Haliotis) fisheries in southeastern Australia. Industry-led resource management initiatives are used as indicators of stewardship, sometimes including substantial sacrifice of catch quota. Higher levels of trust and cooperative capacity enabled greater levels of industry-based resource management in four of the five fisheries. In one case, however, high levels of trust and cooperative capacity did not translate into associated levels of resource management. It is suggested that additional factors, such as perceptions of resource condition, are key determinants of resource stewardship. Private property rights may, therefore, be less important than previously argued.     

Enhancing the performance of quota managed fisheries using seasonality information: The case of the Portuguese artisanal dredge fleet

Several fisheries across the world are managed by a quota regime. These quotas can be set yearly, monthly, weekly or daily. However, for some fish species demand seasonality may occur, which should be taken into consideration in the establishment of the quota (especially in those fisheries managed by daily or monthly quotas). This would allow fishermen to catch more fish at times of the year with higher demand in detriment of periods when demand is low. The present work investigates the existence of demand seasonality for bivalves from the artisanal dredge fleet. This fleet operates along the entire coast of the Portugal mainland. The analysis of fleets' revenue efficiency is assessed with Data Envelopment Analysis models, and the monthly seasonality effects on the revenue efficiency were tested using a Tobit regression. The results revealed that on the South coast there is a strong demand in the summer whereas on the western coast (northwest and southwest fishing areas) demand increases during Christmas and New Year festivities. Since this fishery is managed by weekly/daily quotas, it is proposed that these quotas should be redistributed in order to adjust them to periods of higher demand, thereby increasing the profitability of the vessels. The approach followed could be applied to similar fisheries worldwide.     

Setting quotas using provisional data: a case study from the South Australian abalone fisheries

Stock assessments of quota or effort managed fisheries in which the duration of the fishing season is 12 months are invariably delivered well into the subsequent fishing season. As a result, quotas are frequently based on year-old data. This delay is often unavoidable because it may take months to collect, collate and analyse data necessary to assess fishery performance. The South Australian fisheries for blacklip (Haliotis rubra Leach, 1814) and greenlip abalone (H. laevigata Donovan, 1808) have addressed this issue by using provisional data on current stock status to inform application of the harvest strategy decision rules that set the quota for the next year. The primary index of relative abundance for these fisheries is catch per unit effort (CPUE). Our study uses 25 years (1988–2012) of CPUE data to quantify the differences between the provisional and complete-season CPUE estimates at the spatial scales used to assess the fisheries. We demonstrate that, in most cases, there was a strong relationship between the provisional and complete-season CPUE estimates for both species, with little evidence of bias. As the provisional CPUE estimates were a reliable and accurate predictor of the complete-season CPUE estimates, this provides a high degree of confidence in using provisional CPUE estimates to set quotas, thereby overcoming the difficulty of basing decisions on aged data. These findings are likely to be applicable to other fisheries, particularly those where much of the annual catch is obtained (or effort expended) in a short time period at the commencement of the fishing season.     

Catch-quota balancing in multispecies individual fishing quotas

Individual fishery quotas (IFQs) are an increasingly prevalent form of fishery management around the world, with more than 170 species currently managed with IFQs. Yet, because of the difficulties in matching quota holdings with catches, many argue that IFQs are not appropriate for multispecies fisheries. Using on-the-ground-experience with multispecies IFQ fisheries in Iceland, New Zealand, Australia, and Canada, we assess the design and use of catch-quota balancing mechanisms. Our methodology includes a mix of interviews with fishery managers, industry representatives, and brokers, literature review, and data analysis. We find that a combination of incentives and limits on use rates for the mechanisms provide sufficient flexibility to the quota owner without the fishery manager incurring excessive levels of overexploitation risk. Contrary to some opinions, these programs are evidence that it is possible to implement IFQ programs for multispecies fisheries and that they can be profitable and sustainable.     

Networks of capital: Reframing knowledge in the Namibian hake fishery

This paper explores the failures of the quota allocation system in the hake fishery in Walvis Bay, Namibia through an examination of the complex processes that link commodities, labour, production, markets, and knowledge in the industrial setting. The relationships between state regulations and public nature point to a specific engagement in which nature is divided, distributed, and owned, namely through the market driven prospects of transferable quotas. This article examines fishing quota as a set of relations that links the transformation of fish from biological organism to global product and thus weaves science, the state, markets, and social relationships into an entanglement of different forms of capital. In this context, the tension between the quota holder, the value of that quota, and their participation in the industry reflects a complex network of capital mediated through various strategies. Based on ethnographic research in the Namibian trawl sector, this article surfaces these modes of capital in the dynamics of the fishing operations. As such, the fishing industry, the company that holds the fishing rights, the government׳s role in quota allocations, the vessels, gear, and technologies, and the relationships and roles of the crewmembers and skippers׳ knowledge all contribute to a particular formulation of fishing practices. Fisher׳s knowledge in industrial fishing practices becomes a site in which to explore the consequences of ITQs that may also begin to destabilise the neoliberal business model for fisheries in times of crisis.     

Fisheries management — a New Zealand perspective

The current fisheries management regime in New Zealand involves a system of quota management within which individual quotas are owned by fishermen and are transferable on an open market. The sum of these individual transferable quotas ITQs for a particular species equates to the total allowable catch TAC for that species. The objectives, implementation and consequences of this system are outlined, and its significance for stock assessment for species included in the ITQ system is discussed. A recent need for a TAC reduction in the deep-water fishery for orange roughy Hoplostethus atlanticus is mentioned in the context of the ITQ system. It is suggested that there is potential for economic benefit to the fishing industry in the Benguela system if an ITQ system were to be introduced locally.     

Social,economic and trade characteristics of the elasmobranch fishery on Unguja Island,Zanzibar, East Africa

Understanding the socio-economic drivers underpinning fishers' decisions to target elasmobranchs is considered vital in determining sustainable management objectives for these species, yet limited empirical data is collected. This study presents an overview of elasmobranch catch, trade and socio-economic characteristics of Zanzibar's small-scale, artisanal fishery. The value of applying this information to future elasmobranch fisheries policy is demonstrated. In August 2015, interviews were conducted with fishers (n = 39) and merchants (n = 16) at two landing sites, Kizimkazi-Dimbani and Mkokotoni, along with the main market site in Stone Town. Additionally, elasmobranch catches were recorded across the same locations between June and August 2015. Elasmobranchs were listed as target species by 49% of fishers interviewed. Whilst most fishers (n = 30) stated that 76–100% of their household income came from fishing, there was variation in how elasmobranch catch and trade contributed. One-third of fishers (n = 36) that caught and sold elasmobranchs reported that 41–60% of their income came from elasmobranch catch. However, for some fishers (n = 8) elasmobranch catch represented 0–20% of their income, whilst for others (n = 4) it represented 81–100%. Differences in fisheries income and elasmobranch price could be attributed to several interacting factors including season, weather, fishing effort, fishing gear, target catch and consumer demand. Further, elasmobranch price was influenced by size and species. The study revealed information on catch, trade, markets and socio-economy that is important for future research, conservation and management of elasmobranchs and fisheries in Zanzibar. The methods utilised have potential for broader application to understudied, artisanal elasmobranch fisheries in the western Indian Ocean.     

Unravelling the dynamics of a multi-gear fleet – Inputs for fisheries assessment and management under the Common Fisheries Policy

Effective species management requires good knowledge on vessel dynamics, either at a stock basis or through the establishment of multiannual management plans as advisable under the new European Common Fisheries Policy (CFP). Achieving such knowledge on Portuguese multi-gear fisheries is challenging given the large number of species caught and the different management measures applied to potential target species. The latter ranges from no input or output controls to output controls based on individual vessel quotas (IVQ). To provide accurate regional knowledge to the CFP, the dynamics of vessels involved in the trammel net fishery targeting anglerfish (Lophius spp.) was characterised based on onboard sampling data and logbook reports. The selected vessels were very dynamic, and were found to target other species such as hake (Merluccius merluccius), John Dory (Zeus faber) and octopus (Octopus vulgaris). Anglerfish landing trends can be explained by changes in abundance, quota availability and shifts/changes in fishing effort. Overall, the dynamics of these vessels varied with area of exploitation, IVQ value and anglerfish total allowable catch (TAC). These results show the influence of different management systems in the dynamics of vessels and the advantage of an IVQ management system, where fishers can spatially and temporally allocate effort. Results also highlight a fishing effort shift towards unregulated species in face of IVQ or TAC restrictions.     

Fishing without quota: The ACE fisher in New Zealand's inshore fishery

The annual catch entitlement (ACE) scheme was added to New Zealand's quota management system for fisheries in 2001. The scheme allocates quota owners an annual share of the total allowable commercial catch (TACC) in proportion to their quota holding of a particular fishstock. With ACE being transferable, the change made it simpler for fishers (permit holders) who did not own quota to purchase ACE to match catch for specific fishstocks. But to be viable, non-quota-owning (ACE reliant) fishers need access to a reliable, long-term supply of ACE. This study examines the relationships between ACE reliant purchasers and their suppliers of ACE in New Zealand's Fishing Management Area Three during the 2014-15 fishing year. The study found that most buyers and sellers of ACE form enduring relationships to their mutual benefit. This symbiotic relationship bodes well for the survival of small fishers with the expertise to land fish in an efficient manner.     

A decade of ITQ-management in Icelandic fisheries: consolidation without consensus

Icelandic fisheries have been managed by individual transferable quotas (ITQs) for a decade but there is still no consensus about the quota issue. Distributional effects of ITQs, in terms of income distribution between owner and crew, and the vulnerability of fisheries communities short of quota, have been in the centre of the debate.The author discusses changes in stakeholder involvement in policy-making, conflicts of interest and legal disputes linked to the ITQ-system. By way of conclusion, some options for resolving conflicts and reaching consensus on the fisheries management issue are discussed.     

Efficiency of the New Zealand annual catch entitlement market

Balancing catch with annual catch entitlement (ACE) is crucial both for the financial viability of fishers and for the efficient operation of the New Zealand quota management system (QMS). This study examines the information channels that are used by fishers to search for ACE availability, and notes how these channels differ between large and small fishers. Special attention is given to the viability of small independent fishers whose participation in the fishery is dependent on their acquiring ACE in the open ACE market. An ACE market survey along with extensive consultation captured the views of fishers, fish processors, and quota brokers. These sources provide valuable insights into the day-to-day operation of the ACE market. They suggest that while elements of market power are evident in the ACE market there are also characteristics of an efficient market.