Social and economic consequences of 40 years of Dutch quota management

The Netherlands was one of the first nations to introduce ITQs in their fisheries to manage national yearly Total Allowable Catches (TACs). These ITQs have gradually developed from an individual quota system in 1976 to an ITQ system in the 1980s. In 1993 the system was reformed into a co-management system. In this paper it is argued that many of the usual negative socio-economic consequences of ITQs mentioned in the literature have been largely absent, due to the embeddedness of ITQs in co-management arrangements. However, cracks have appeared lately in this combined management system, allowing an identification of its vulnerabilities. These findings show that the social and economic structure of Dutch fisheries is changing from a rather cooperative to a more competitive and exclusive system, more like conventional ITQs.     

The elephant in the room: The hidden costs of leasing individual transferable fishing quotas

Despite the increasingly positive reviews of individual transferable quotas (ITQs), few studies have considered how quota leasing activities can reduce the economic benefits to society and to fishermen operating under the ITQ fisheries system. This analysis reveals negative economic impacts of ITQs previously overlooked by examining the extent of quota leasing and the relationship between the catch value, the cost of fishing, and the quota lease price in the BC halibut fishery, long considered a poster child for ITQs. Findings challenge assumptions of economic theory used to promote the benefits of ITQs.     

Ex ante evaluation of the costs and benefits of individual transferable quotas: A case-study of seven Australian commonwealth fisheries

Individual transferable quotas (ITQs) have been introduced in a number of different countries, including Australia. Using seven Australian commonwealth fisheries the paper undertakes an ex ante cost–benefit analysis whether to introduce ITQs into these fisheries. The analysis uses five cost–benefit criteria, and in particular the gross value of production (GVP), to evaluate whether ITQs should be introduced or not. For fisheries where the net benefits do not currently justify ITQs, a pathway is provided to improve management outcomes with the use of individual transferable efforts units (ITEs).     

Demand-side fishery management: integrating two forms of input control

A fishery management approach is presented which combines (1) a buyback of fishing vessels, and (2) a management tax or fee on seafood going to market. Tax rate by species is set proportional to the extent of overexploitation. Tax revenue is used for several purposes, including a buyback of licenses at free-market price. Advantages and disadvantages of this policy are discussed, with specific comparison to individual transferable quotas (ITQs). This regulatory policy offers advantages (1) for multispecies fisheries, (2) with ecosystem fishery management, (3) where self-funded financing for license buyback is needed, and in place of or together with ITQs (4) where allocation, discarding and highgrading, quota setting, or enforcement of ITQs is problematic.     

Lesser-known consequences of managing marine fisheries using individual transferable quotas

Managing marine fisheries using output controls in the form of individual transferable quotas (ITQs) can be an attractive alternative to more traditional input controls. There are now a number of examples of where ITQ-managed fisheries have been able to reduce the impact of the major management problems in global fisheries, namely, gross over-capitalisation and effort. However, ITQs are not the perfect management tool and one of the lesser known consequences of ITQ-managed fisheries where ITQs consist of a harvest right is the implicit relationship between ITQ property rights and rights of access to the fishing grounds. This implicit spatial right to the grounds can provide obstacles in the way of allocating water-space within fishing grounds for alternative uses such as marine-protected areas, large-scale aquaculture, and wind farms. These lesser-known consequences of ITQ-managed fisheries are discussed here.     

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.     

Figuring fish and measuring men: the individual transferable quota system in the Icelandic cod fishery

This article discusses inequality in the Icelandic cod fishery, focusing on changes in the actual distribution of fishing quotas and the ways in which Icelanders currently talk about equity and ownership. The individual transferable quota (ITQ) system, introduced in 1984, divided access to an important resource among those who happened to be boat owners at that time. Statistical findings with respect to the cod fishery - based on a database (the ‘Quotabase’) constructed using detailed information on all vessels that have been allotted ITQs from the onset of the system - show that ITQs have been increasingly concentrated in the hands of the biggest companies. Many of the small-scale boat owners that still hold ITQs are increasingly compelled to enter into contracts that involve fishing for larger ITQ holders. It is suggested that the distribution of ITQs, as well as their evaluation in social discourse, represents an important field of research. In Iceland, public discontent with the concentration of fishing rights and the ensuing social repercussions is increasingly articulated in terms of loaded metaphors, including ‘profiteering’, ‘tenancy’ and ‘lords of the sea’. It is argued that the ultimate efficiency of management programs may be jeopardized if managers ignore the history and culture of the fisheries involved and the likely social and ecological consequences of their programs.     

Using individual transferable quotas (ITQs) to achieve social policy objectives: A proposed intervention

ITQs offer environmental and economic benefits, including better conservation of a fish stock and greater profitability for fishers. With some limitations, they achieve fairly good alignment between the profit incentive and stewardship objectives. Nevertheless, critics have objected to ITQ schemes because of such factors as the “armchair fishing” phenomenon, unfairness to the public (the owner of the fish), economic and social damage to remote communities, and increased concentration within the fishery. Economists generally dismiss these as distributional issues rather than matters of efficiency or economics, but economic principles are clearly not the only factors that may require attention or action from a government or regulator. This paper proposes an intervention that addresses these concerns within the context of an ITQ scheme. The intervention does not reduce the permanence or values of ITQs, and therefore retains the benefits that ITQs are designed to deliver. Nevertheless, the intervention addresses the criticisms identified above. Modifications of the intervention may enable additional goals and benefits to be achieved as well.     

Individual transferable quotas in Argentina: Policy and performance

The purpose of the article is to describe the Argentine ITQ system during the early years after the initial allocation in 2009 and introduce the Argentine case in the discussion on ITQs. This paper has been elaborated based on statistical information derived from fleet and catch data of the Fishing Log System of the Undersecretariat of Fisheries and Acquaculture and Management Reports on the Individual Transferable Quotas regime. The implementation of the Argentine ITQs regime took into account issues learned from other countries and from the theoretical debate about the pros and cons of the ITQ system. The Argentine ITQ regime introduced enough flexibility to dismiss the disadvantages of this system pointed out in other international experiences.     

Designing ITQ programs for commercial recreational fishing

This paper discusses the potential for implementing individual transferable quota (ITQ) schemes in commercial recreational fisheries, focusing particularly on charter and headboat fisheries. After a brief discussion of ITQs in commercial fisheries, the paper discusses the manner in which rents get dissipated in commercial recreational fisheries. Fishing mortality in recreational fisheries is determined as a joint outcome of angler behavior and trip supply. In the recreational sector under open access conditions, there are likely to be too many vessels providing too many trips at prices that are too low. Vessel input configurations are likely to be distorted in a manner that generates excessive fishing mortality. Designing ITQs for recreational fisheries requires consideration of issues not prominent in the design of commercial fisheries. Among the most important is the manner in which angler preferences and types affect overall mortality from both landings and discards. While catch and release fisheries and pure food fish recreational fisheries are relatively easy to manage with recreational ITQs, fisheries with both angler types present difficult monitoring problems that add complexities to ITQ design. Various ways to design programs that account for both landings and discard mortalities and that generate incentives for anglers and vessel owners to reduce discard mortality are discussed.     

Privatization,financialization and ocean grabbing in New Brunswick herring fisheries and salmon aquaculture

The growing literature on individual transferable quotas (ITQs) and on intensive salmon aquaculture and its negative impacts on the environment and other users of related marine space has been little connected to the developing literature on financialization and to the literature on ocean grabbing within fisheries. This paper seeks to address this gap through a case study of the recent history of herring fisheries and intensive aquaculture in New Brunswick, Canada, exploring how specific neoliberal processes – including privatization and marketization (in herring fleet ITQs and aquaculture lease systems), (re)regulation, financialization and globalization – have interacted to support the reshaping of regional fisheries from mixed small-scale, family-based, petty commodity fisheries towards vertically-integrated, corporate, financialized fisheries characterized by ocean grabbing.     

Alternatives to ITQs in equity–efficiency–effectiveness trade-offs: How the lay-up system spread effort in the BC halibut fishery

Individual Transferable Quotas (ITQs), also called “catch shares”, have been broadly adopted in the last two decades, at the same time that concerns about their equity and effectiveness in delivering the predicted outcomes have increased. This paper documents how an alternative fishermen-designed and operated system of spreading fishing effort to avoid the race for fish—called the lay-up system—worked effectively and equitably for four decades in the British Columbia halibut fishery before ITQs were introduced in this fishery. Why the lay-up system was allowed to collapse and its history ignored illustrates important roles played by conflicting ideologies, bureaucratic rationality, and the inability to imagine an alternative way of solving fisheries management problems. Trade-offs between the efficiency, equity, and effectiveness of halibut and other management systems are considered.     

Individual transferable quotas versus auctioned seasonal quotas: An experimental investigation

Fishery policies have largely developed in response to revealed problems with existing policy instruments. The last major innovation is the introduction of individual transferable quotas, ITQs. Experience thus far is promising. However, if history repeats itself, it is pertinent to start exploring further improvements. Among other things, concerns may be raised about the efficiency of ITQs, financial risks to owners of quotas and fishing vessels, and problems with fairness and collection of resource rent. These issues are studied with a laboratory experiment. Different from previous experiments it allows for trade of both quotas and vessels. In addition, the experiment tests an alternative institutional arrangement, namely auctioned seasonal quotas, ASQs. Neither of the two systems turns out to be as perfect as economic theory predicts. While the two systems are similar in some respects, the ASQ system allows for taxation of resource rent, and surprisingly, it may be the system with the lowest financial risk for fishing firms.     

Lease quota fishing in a changing rock lobster industry

The Tasmanian rock lobster industry has been managed by Individually Transferable Quotas (ITQs) and several input control measures since 1998. In this study, nine years of rock lobster fishing business data were used to categorise the catch and quota ownership traits and examine the response to the introduction of ITQ management. More specifically the study investigates how profit drivers moderated industry structure change.     

Distributional effects of property rights: Transitions in the Atlantic Herring fishery

A principal challenge in developing any fishery management plan is the allocation of benefits and costs among participants in the fishery. This process is further complicated by imperfect information about future market demand and limited ability to predict the consequences of regulatory change. This paper offers a new approach to policymakers, using econometric analysis to simulate the potential impact of individual tradable quotas (ITQs) in a fishery. We compare the distribution of harvest across participants in the Atlantic Herring fishery under the current open access regime and under a potential ITQ regime, assuming two different levels of future demand. Our results show that production efficiency varies by vessel gear, home-port and relationship with buyers. Some of the predicted consequences of ITQs are: vessels from Massachusetts will gain share relative to those from Maine; trawlers will gain share relative to purse seine vessels; and independent vessels will lose share relative to vessels that are primarily contracted to specific processors or bait companies. These results will help policymakers in developing future management plans for the herring fishery. More generally, this analytical approach can help regulators in any fishery assess the potential impact of alternative policy changes under alternative future demand scenarios.     

The cost-benefit ledger of quota leasing

Bruce Turris recently presented an analysis of the expenses and earnings of British Columbia fishermen who lease halibut quota (ITQs). The BC Longline Fishermen's Association, which represents active halibut fishermen has quite a different analysis of these costs and benefits, and also takes issue with Turris’ analysis of the state of the fishery in general under quotas.     

Transferable quotas,efficiency and crew ownership in Whalsay,Shetland

The resource economic theory tells us that individual transferable quotas (ITQs) improve efficiency in the fishing industry by removing the least efficient actors from a fishery and allowing ownership to concentrate in the hands of the most efficient operators. Assertions about the nature of this allocative efficiency are, however, often based on purely theoretical assumptions. This paper presents a case study of the efficient operators remaining in the UK pelagic fishing fleet. After over 30 years of rights-based management (RBM) and 12 years of ITQs, the UK pelagic fleet numbers only 31 large-scale boats. Seven of these operate from the island of Whalsay in Shetland, which, with a population of approximately 1000 people (0.000016% of the population of the UK), is entitled to land around 22% of the UK pelagic catch. A key characteristic of the economically efficient Whalsay fleet is a crew ownership structure. This is now under threat from the long-term dynamics of the UK's ITQ system, as the high price of quota prevents the renewal of the fishery through new entrants. In the majority of global fisheries, where vessel ownership structures do not follow an assumed economic norm, fully marketised transferable rights may not be the most efficient method of management.     

Licence Banks as a tool to mitigate corporate control of fisheries: A British Columbia groundfish example

This paper provides an example of how one group of fishermen, operating in an ITQ fishery in British Columbia, Canada, used a licence bank to attempt to mitigate the negative consequences of ITQs. After ten years in operation, the licence bank is self-sustaining and has realized modest and limited success. The authors identify a number of lessons learned from the experience, as well as highlight the opportunities that licence banks offer as an alternative mechanism to redress the negative consequences of ITQs.     

Private rights,public benefits: Industry-driven seabed protection

New Zealand has a large exclusive economic zone (EEZ) that contains a variety of marine habitats and commercially-important species. The commercial fishing industry operating within New Zealand's EEZ is of significant value to the economy and fisheries resources are managed through the extensive use of Individual Transferable Quotas (ITQs). One of the benefits of ITQs has been to better align some of the private incentives of quota owners with the public interest. These incentives contributed to an initiative proposed by the fishing industry to close large areas of New Zealand's EEZ to protect the seabed from trawling. These closed areas are termed benthic protection areas (BPAs) and protect the benthic biodiversity of about 1.1 million square kilometres of seabed—approximately 30% of New Zealand's EEZ. A significant proportion of New Zealand's known seamounts and active hydrothermal vents are protected by these closed areas. We describe and discuss the criteria used to select BPAs and some of the criticism of this marine protection initiative. We argue that the assignment of strong property rights in fishing resources was an important precondition to an industry initiative that has a significant public benefit. Where private and public interests are well aligned, government can adopt an enabling and facilitation role, ceding direct control of processes in order to get the results the align with the public interest.     

Tangled lines in New Zealand's quota management system: The process of including recreational fisheries

This article uses New Zealand as a case study of processes relating to the inclusion of recreational fisheries in modern fisheries management systems based on Individual Transferable Quotas (ITQs). The New Zealand case highlights challenges governments often meet when attempting to integrate the recreational sector into fisheries management, including: (a) resistance to restrictions on what has historically been free-of-charge public access to fish for recreational purposes and (b) the fragmented character of the recreational sector, which makes it difficult to have recreational interests attend to their management role and responsibilities.