16. Right-based Fisheries Management

Question 1

According to economic theory, what are property rights necessary for?

Answer 1

• According to economic theory, it is necessary for economic efficiency:
- High level of production
- Economic growth

Question 2

What are the key properties of strong property rights in fisheries?

Answer 2

1. Exclusivity:
   No other individuals or companies can fish in that area without permission.
   * For example, in Individual Transferable Quatos (ITQs) system, each fisher has exclusive rights to catch certain quantity of fish.
2. Durability:
   Duration of the property right. Grants for a significant period of time.
   * For example, a fishing company gets 20 years rights to fish in that area (they will now be more willing to invest in better fishing equipment)
3. Security:
   Security of propertyrights. Rights are upheld and protected.
   * Fishing company have legal recourse if another company fishes in their area
4. Tradability:
   Property rights can be bought and sold.
   * A company wants to focus on other area or spieces, sells its rights to another company

Question 3

What is the open access/common pool arrangement of harvesting in fisheries?

Answer 3

• Everyone can enter, but no one has explicit property rights. The fish is yours if you capture it

Question 4

What are the consequences of weak property rights in fisheries?

Answer 4

• Elimination of fish stocks
• Damage to the marine ecosystem
• Miss out on economic benefits

Question 5

What are the instruments for rights-based management in fisheries?

Answer 5

The instruments for rights-based management in fisheries include
1) TURFs,
2) ITQs,
3) Fishery cooperatives

Question 6

What is a Fishery Cooperative?

Answer 6

A Fishery Cooperative is an association that collectively holds rights to control some or all of its member’s fishing activities.

Question 7

What is the purpose of Individual Transferable Quotas (ITQs) in rights-based fisheries management?

Answer 7

The purpose of Individual Transferable Quotas (ITQs) in rights-based fisheries management is to allocate species-based rights to individuals.

Question 8

What is the purpose of Territorial Use Rights Fisheries (TURFs)

Answer 8

• Territorial Use Rights in Fisheries (TURF)
• They Do: Gives exclusive access to specific areas or territory of fishing (space-based rights). Creates a sense of ownership/property rights.

The purpose of Territorial Use Rights Fisheries (TURFs) in rights-based fisheries management is to allocate space-based rights to individuals or groups.

Question 9

What is the purpose of Fishery Cooperatives in rights-based fisheries management?

Answer 9

The purpose of Fishery Cooperatives in rights-based fisheries management is to facilitate collective action by a group of individuals.

Question 10

How do strong property rights promote economic efficiency in fisheries?

Answer 10

Strong property rights promote economic efficiency in fisheries by providing exclusivity, durability, security, and tradability, which can lead to a high level of production and economic growth.

Question 11

What are individual transferable quotas (ITQs)?

Answer 11

• Individual Transferable Quotas (ITQs)
• Give rights to harvest a certain volume of fish. Held by individual agents and are tradable.
  q (i, t) = a(i, t) * TAC(t)
  Agents quota at time t = quota share * TAC

Question 12

Why are property rights important in fisheries management?

Answer 12

Property rights are important in fisheries management as they ensure economic efficiency, a high level of production, and economic growth.

Question 13

What is the structure (formula) of ITQs?

Answer 13

The structure of ITQs includes a Total Allowable Catch (TAC) and individual shares of quota (q(i,t)), which are multiplied by the TAC to determine the quota for each agent (a(i,t)).

q (i, t) = a(i, t) * TAC(t)
Agents quota at time t = quota share * TAC

Question 14

How many fishing nations have adopted ITQ systems?

Answer 14

By the end of 2010, 222 fishing nations, including the US, Canada, Chile, Peru, Iceland, Norway, New Zealand, Australia, and some EU countries have adopted ITQ systems.

Question 15

What are the relative successes of ITQ systems?

Answer 15

The rapid adoption of ITQ systems around the world suggests relative success in overcoming the common property problem, improving the economics of fisheries, reducing excessive fishing effort and capital use in over-exploited fisheries, significantly increasing the unit value of landings, and halting and even reversing the previous long-term decline of fish stocks.

Question 16

What are the four dimensions of property rights in ITQs?

Answer 16

• Security: Ability for the holder to hold on the property under challenges like theft
• Tradability: Ability to ell the property rights
• Exclusivity: Property holder can utilize the property, and prevent others from using it
• Durability: Time span of property rights

Question 17

What is the perfect ITQ system?

Answer 17

The perfect ITQ system has full exclusivity, durability, security, and tradability.

Question 18

How can ITQs promote fishery efficiency?

Answer 18

1) Quality over Quantity (Security)
- Quota system limits the amount of fish that can be caught. Can fish at own pace without hard “open-access-competition” from others. This reduces overcapitalization of fishing vessels and gear as fishermen no longer need to invest in more equipment to catch more fish within the limited time frame.
- The quota system also encourages fishermen to use the most efficient fishing methods and gear, as they can focus on quality rather than quantity.
2) Tradeable Quotas (Tradability)
- Those who are most efficient at catching fish can buy more quotas and vice versa.
3) Long-term planning (Duration)
- The tradability encourages long-term planning and investment.

Question 19

What are the inherent limitations of (perfect) ITQs?

Answer 19

• Efficient fishing activity: Even when perfect, does not guarantee efficient fishing activity.
• Biomass: May not ensure that fish stock biomass are optimal
• Marine Ecosystems and Habitat: May not address impact of fishing gear on marine ecosystems and habitats
• Interactions: Typically single-species based. May not account for interections between different species.

Question 20

What are the imperfect applications of ITQs?

Answer 20

1. Reduced quality property rights:
   Security: Gives the user a TAC. Can be restrictions on duration or tradability. For example, if ITQs are only valid for a short time (like a year), fisheries may not have long term SECURITY to invest in sustainable fishing practices.

Tradability: If there are limitations on trading or leasing quotas, it may hinder efficient transfers.

2. Discrete TAC periods
   Typically set annually, which not always aligns with natural fluctuations and life cycles of the targeted fish species. For example, with a quick increase in population, the annual TAC might not be adjusted quickly enough to allow for sustainable exploitation.

Conversely, if population goes down, the annual TAC might be to high, leading to overfishing.

3. Aggregate quotas:

In some cases, ITQs may be set for groups of fish stocks, cohorts (age groups), or geographical areas rather than individual species. This can create problems if some species or sub-stocks within these groups are more vulnerable to overfishing than others.

For example, if an ITQ is set for a group of species, fishers may focus their efforts on the most valuable species within the group, leading to depletion of that particular species while others remain underexploited.

4. Inappropriate TACs:
   Optimal TAC depends on accurate information about fish stock and ecosystem. Data on fish stocks can be uncertain, and incentives can drive decision.

For instance, political pressures or short-term economic interests might lead to TACs being set too high, resulting in overfishing. On the other hand, overly cautious TACs might lead to underutilization of the resource and economic inefficiencies.

5. Inadequate enforcement:
   Effective ITQ systems rely on the ability to monitor and enforce compliance with quotas. However, in some cases, enforcement may be inadequate due to a lack of resources, insufficient monitoring systems, or the vastness of the fishing area.
   As an example, illegal, unreported, and unregulated (IUU) fishing may occur if there is weak enforcement, undermining the ITQ system and leading to overfishing or unfair competition

Question 21

What is the history of TURFs?

Answer 21

• Been used in the South Pacific for centuries
• But challenging to establish it in nearshore and offshore marine environments due to difficulty of fencing the ocean

Question 22

What are the key features for the success of TURFs?

Answer 22

The key features for the success of TURFs are the identification of a closed class of users, boundary enforcement, internal rules and/or coordination mechanisms to give users proper incentives (such as ITQs within a TURF), and duration and security of rights.

Question 23

What is Japan’s nearshore TURF system?

Answer 23

Japan’s nearshore TURF system is one of the oldest and most well-developed TURF systems in the world, which grants exclusive use of the marine resources in zones extending off the coastline adjacent to coastal villages with poor access to rice lands.

Question 24

What are the innovations of Japan’s TURF system?

Answer 24

The innovations of Japan’s TURF system include a system of 1. zoning and allocation of space among gears and different marine use,
2. micro decisions about managing effort through rotation,
3. limit harvest to maximize price,
4. harvest or revenue pooling.

Question 25

How do TURFs compare to ITQs?

Answer 25

TURFs grant collectives the right to use the marine ecosystem, which promotes a systemwide cooperative, while (imperfect) ITQs cannot deal with marine ecosystem problems or conflicting marine uses due to internal coordination problems among individual holders/quota systems and spatial-temporal missallocation of individual species.

Question 26

What are the challenges of TURFs?

Answer 26

The challenges of TURFs include ensuring that the scale of the TURF matches the range of the species, including migrating species, and that the scale is small enough to minimize transaction costs for coordination. The optimal scale of TURF is also a challenge.

Question 27

How do TURFs and Fishery cooperatives blend together?

Answer 27

TURFs and Fishery cooperatives often blend together when a coastal community claims exclusive rights over a marine resource and forms an association.

Question 28

What are the multiple objectives of fisheries management?

Answer 28

The multiple objectives of fisheries management include ecological objectives (ecosystem effects and target stock condition), economic objectives (fishing community welfare, target stock harvest, profitability, and employment), and management objectives (management cost).

Question 29

Why is there no one-size-fits-all solution in fisheries management?

Answer 29

There is no one-size-fits-all solution in fisheries management because each tool is most effective when aimed at solving specific problems and applied to a subset of ecological and economic settings. Thus, it is necessary to identify and match appropriate solutions to the specific political, economic, and ecological problems in a particular fishery.

Question 30

What is the importance of combining different instruments in fisheries management?

Answer 30

The combination of instruments in fisheries management is essential to achieving goals because no single tool can address all ecological, economic, and social objectives. Thus, combining different instruments can provide a more effective and comprehensive approach to managing fisheries.

Question 31

What is the duration and security of rights in TURFs?

Answer 31

The duration and security of rights are key features for the success of TURFs, which depend on durability and security of property rights.

Question 32

What is the optimal scale of TURFs?

Answer 32

The optimal scale of TURFs must match the range of the species and be small enough to minimize transaction costs for coordination.

Question 33

What are the limitations of ITQs in dealing with marine ecosystem problems or conflicting marine uses?

Answer 33

The limitations of ITQs in dealing with marine ecosystem problems or conflicting marine uses include internal coordination problems among individual holders/quota system, spatial-temporal missallocation of individual species, and externalities on other fisheries or marine uses.

Question 34

What are the key features for the success of TURFs?

Answer 34

The key features for the success of TURFs include the identification of a closed class of users, boundary enforcement, internal rules and/or coordination mechanisms to give users proper incentives, and duration and security of rights.