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.     

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.     

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.     

Bluefin tuna fishery policy in Malta: The plight of artisanal fishermen caught in the capitalist net

The bluefin tuna fishery has undergone a major shift in Malta, moving from an open access artisanal nature to a privatized and industrialized activity dominated by the purse seining fleet and the BFT ranching industry. The shift has been exacerbated by the national implementation of an individual transferable quota system, which has enabled the concertation of quotas into fewer hands. The main objective of this article is to understand how privatization has evolved within the sector and the way the Maltese artisanal fishermen are experiencing the shift. This study takes an exploratory mixed-method approach to quantitatively and qualitatively understand how policy underpinnings interplay with the sustainability dimension of the small-scale fishing sector. Results show that the transition of the bluefin tuna fishery from artisanal to industrial has generated a legitimacy crisis over fishing rights, decreased profitability amongst most of the artisanal fleet, and led to a series of socio-ecological impacts on the artisanal fisheries system at large. It is concluded that the neo-liberal trajectories of industrialization have directly undermined the continued sustainability of artisanal fishing communities.     

Transferability of fishing rights: The Spanish case

Some authors defend the implementation of regulation mechanisms such as individual transferable quotas, that is, the capacity to assign every fisherman an individual right so that he can fish a certain quantity of a specific species during a concrete period of time, as the most efficient way to reach a greater resource assessment and to guarantee biological sustainability. Nevertheless, much attention has been brought to the fact that, since these rights can be sold, negotiated, exchanged or transferred by the owners, it can bring about a concentration process, which would not favour social equity.     

Managing shark fishermen in southern Australia: A critique

This paper analyses effects of a shift from input to output controls in Australia's Southern Shark Fishery. We show that the use of two management tools—individual transferable quotas and a “partnership approach”—was flawed and argue that primary contributing causes were the unjustified expectation that quota management would serve as a ‘technical fix’ to a variety of presumed problems, the discounting of social effects and the extreme lack of stability in the organizational structure within which this fishery was situated.     

Ignoring market failure in quota leasing?

This short communication is, in part, a response to the Bruce Turris' rejoinder (Marine Policy…2010) to Pinkerton et al., The elephant in the room: The hidden costs of leasing individual transferable fishing quotas (Marine Policy, July 2009). In responding to this article on the unacknowledged problems of unregulated and even unrecorded leasing of individual transferable fishing quotas (ITQs), Turris illustrated the point of the original article well by minimizing the status of leasing as a major influence leading to problems with the fishery: an elephant in the room. Turris focused instead on relatively small and less relevant details, misrepresented the argument, and largely ignored or skirted our discussion of the absent structural conditions important for open competition and efficient outcomes. This response addresses several of his concerns, elaborates on some of the initial points in the original article and contributes some new ones.     

The IVQ regime in Norway: A stable alternative to an ITQ regime?

Since the introduction of quotas and licences as important management tools, Norway has insisted on an individual vessel quota regime (IVQ). The main argument has been to avoid market-based transactions of quotas and vessels and secure stability in regard to a diverse fleet structure and decentralized ownership of scarce cod resources. Thus, an individual transferable quota system (ITQ) with a high degree of transactions and the potential for a heavy concentration of quota ownership and fewer vessels has never been an alternative. However, since the late 80s, the trawler fleet has been trapped within a web of unprofitable overcapacity. Within the frame of a closed management regime and a path-dependent IVQ system, the quota regime has been forced towards a market-orientated system for transactions. In this article, we analyze the Norwegian IVQ system and discuss whether the aggregate effects of the IVQ regime are congruent with the models’ profound ideals.     

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.     

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.     

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.     

Rights-based management in the Western and Central Pacific Ocean tuna fishery: Economic and environmental change under the Vessel Day Scheme

Defining, strengthening and enforcing rights over fisheries resources is frequently identified as central to overcoming ‘the tragedy of the commons’ and associated environmental and economic challenges in fisheries systems. Though economic theory generally suggests that output control (e.g. quotas) creates the strongest incentives for efficiency and conservation, input controls (e.g. on effort) remain common. This paper explores the rationale for, and implications of, employing a transferable effort scheme in one of the largest and most valuable fisheries. In 2007, eight Pacific Island countries implemented the Vessel Day Scheme with the aims of strengthening their rights over tuna resources and control over economic and environmental trends. Four years since implementation, the scheme has significantly increased economic returns for the island states and generated improvements in data reporting. However, it has not generated a firm limit on fishing effort and its structure has made it difficult to directly target the biological concerns of individual species within the multi-species fishery. In the future, outcomes of the Vessel Day Scheme will continue to be tempered by the structural limitations of effort-based regulatory scheme, market conditions in the sector and the willingness of firms and island states to clarify, abide by and enforce the technical components of the scheme.     

Distributional issues in the operation of rights-based fisheries management systems

Rights-based management regimes are considered by economists as an important solution to the problems of excess capacity and biological over-harvesting of fisheries. In practice, adoption of such regimes, and particularly of those relying on individual quota allocations, has often met with resistance from within the fisheries concerned. A key reason for this resistance appears to be the distributional conflicts which arise in the process of implementing the regimes. An economic analysis of the nature of these conflicts in the different contexts in which they have been observed is proposed. The approach centres on the way in which distributional conflicts can influence the operation of management systems and their impacts on fisheries, from the country to the individual firm level. As an illustration, an analysis of the economic processes at firm level is developed based on the simulation of a fishery managed under individual transferable quotas.     

Private property and public interest in fisheries management: the Tasmanian rock lobster fishery

In 1998 a management system based on individual transferable quota (ITQ) was introduced in the Tasmanian rock lobster fishery. This marked the continuation of a management trend that has favoured economic efficiency at the cost of reduced employment and greater restrictions on access to the fishery. The authors discuss management trends in the fishery in the context of Tasmania's history, and social and political characteristics, which it is argued, have shaped development of Tasmania's resource management culture. Implications for social equality, economic well-being and environmental sustainability are discussed. In conclusion the difficulty of reforming policy that has been shaped by vested interests and which establishes rent-seeking activity is considered.     

Free form property rights for fisheries: The decentralized design of rights-based management through groundfish “sectors” in New England

Harvest cooperatives were implemented in several US fisheries over the last decade during a period when US law prohibited implementation of any new individual fishery quota (IFQ) systems. Harvest cooperatives provided an alternative to individual quotas as a means to end the race for fish and increase fishery profitability. The prohibition on new IFQ systems in the US was lifted, but harvest cooperatives remain a more feasible and perhaps a superior alternative to IFQs for some fisheries. The New England Fishery Management Council is on the verge of implementing a new management system for the groundfish fishery based on harvest cooperatives known as “sectors”. This paper describes the New England sector management system and discusses a number of advantages but also some drawbacks relative to IFQs. It argues that a hybrid of the two approaches could have advantages over either.     

Corporate management of the Northwestern Hawaiian Islands lobster fishery

Limited entry and biological quotas were implemented in the lobster fishery of the Northwestern Hawaiian Islands in 1991, during a period of declining stock abundance. A companion use-it-or-lose-it permit provision has had the perverse effect of increasing fishing effort during times of declining stocks. Despite its unfavorable short-term prospects, the fishery has the potential to be very lucrative for a small number of boats over the long term. This paper introduces a dramatically different management regime that would create ownership rights in a private management corporation for the current limited-entry permit holders. This corporation would function within a renewable operating contract with the government to protect the public interest in the conservation of the lobster population and its associated ecosystem. Published by Elsevier Science Ltd.     

Estimating present and future profits within the Namibian hake industry: a bio-economic analysis

Namibia's fishing industry is managed using a system of fishing rights and individual fishing quotas. This property rights system was intended to encourage the local fishing industry to exploit the resource responsibly. Unfortunately, unintended perverse incentives have promoted induced overcapacity and inefficient use of vessels. In combination with inconsistent quota allocations, the result has been persistent pressure on the already depleted biological resource. This paper uses a bio-economic model to estimate actual and potential profits in Namibia's hake fishery. N$300 million annual profit was not realised due to the depressed state of the resource. Mean annual profits for the years 2007–2009 were N$80 million, which provides the fishing industry, as a whole, only about 36% of the potential normal profit. Theoretically this implies that the fishing industry would probably receive better returns with less risk if they invested their money elsewhere. This study demonstrates that by rationalising quotas and improving management, better efficiency and higher profits for the fishers and government could be obtained.     

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.     

Landlords,leaseholders & sweat equity: changing property regimes in aquaculture

This paper explores the tensions, issues and problems being experienced by one small fishing community off Canada's east coast, as it confronts the challenges of a rapidly growing aquaculture industry. It examines the significance for the community of changing property regimes, directly related to a government policy, proclaimed in October 2000, that is transforming ownership patterns in the industry, and creating new property regimes through the allocation of aquaculture sites. It argues that this policy reflects a fundamentally different ideology that is taking away community control over resources and threatening livelihoods dependent upon the wild fishery.     

Self-governance within a QMS framework—The evolution of self-governance in the New Zealand Bluff oyster fishery

This paper examines efforts to develop stakeholder led self-governance in the Bluff oyster fishery. The paper focuses on collaborative management and its ability to address some of the unintended consequences of management. The Bluff oyster fishery's administrative, biological, and economic performances are analysed to assess whether or not the participatory management model, in this case fisheries self-governance, complements individual transferable quota (ITQ) for this inshore shellfish fishery.The paper argues that the Bluff oyster fishery's current self-governance model, based on a fishery plan, aids in improving the performance of the fishery, and that the Bluff oyster fishery has the capacity to shift further towards a stakeholder led self-regulated fishery.