Evaluation of Three Lobster Fishery Management
Plans
by
|
|
Jon G. Sutinen,* John M. Gates,*
John J. Poggie, Jr.,** and Timothy M. Hennessey*** |
|
|
|
* Department of Environmental & Natural Resource
Economics ** Department of Sociology & Anthropology *** Department of Political Science |
|
|
|
University of Rhode Island, Kingston, RI 02881 |
|
Three plans have been
proposed to the Lobster Management Subcommittee for the future management of
Rhode Island’s lobster fishery. In this report we present the results of our
assessment of the expected biological, economic, social and administrative
consequences of each plan.[1]
We intend no overall
ranking of the plans that are evaluated below. We recognize that there may be
several reasons for regulating a fishery. In addition to conserving the
resource and improving economic performance, fishery management measures are
sometimes used to prevent or mitigate conflicts among user groups, to affect
the distribution of benefits among users and to protect social values and life
styles. The results herein only delineate the inherent tradeoffs among the sets
of consequences that fishery managers face when deciding which management
measures to employ.
Biological consequences
Of the three proposed
plans, DEM’s Lobster License Plan places the strongest ceiling on fishing
effort. It removes latent traps and freezes the number of traps at about
(perhaps below) the current number of active traps in the fishery. The plan
allows no new entrants to the fishery until the resource stock is rebuilt; and
then only to replace departing lobstermen on a 1:1 basis.
To reduce the number of
traps the plan relies on attrition of license holders over time. We expect the
rate of decrease in licenses to be slow. The prohibition on license transfers
(except to family members or vessel crew in the case of death or disability of
the license holder) creates a disincentive to retire from the fishery.
Fishing mortality is not
fully controlled by the DEM plan since there is a ‘spongy’ relationship between
traps and fishing mortality. Operators will still have the incentive to find
other ways to increase the productivity of their trap allocation as stock
conditions improve (such as by changing the number of trap hauls per period,
placement of traps, using more and superior bait, etc.).[2]
·
We assign a grade of
A-minus to the biological consequences of DEM’s Lobster License Plan. It places
a firm ceiling on trap numbers but the reduction in traps will be slow.
The industry’s Effort
Control and Consolidation Plan offers a fairly strong control of fishing
effort. It reduces latent effort by moving the licenses that are currently
inactive – each with a potential of 800 traps – to an apprenticeship license
with a limit of 100 traps each. Since there is no cap on the number of
apprentice licenses, there is no firm cap on the total number of active traps
in the fishery. If resource and market conditions improve over time,
apprenticeship licenses will increase in number.
The industry’s Plan will
stimulate a reduction in the number of traps fished in the short term, when
there are no added incentives for inactive licenses to enter the fishery. The
Plan stimulates reduction by encouraging consolidation of licenses. Our
computer modeling demonstrates that there are significant incentives for
lobstermen to consolidate licenses. We anticipate an immediate move towards
consolidation and, therefore, a reduction in traps fished in the short term.
Our computer modeling
shows that consolidation also will result in lower catches – ranging from 26%
to 33% fewer pounds of lobsters caught. Our models account for likely increases
in trap hauls per period and in days fished. But our models do not account for
the ‘trap saturation’ that is believed to exist in the lobster fishery.
Therefore, we believe the actual amount of catch reductions will be less than
our model estimates.
While the short-term
reductions in traps, effort and catch are admirable, the unrestricted growth of
apprenticeship licenses – each with 100 traps – threatens in the long term to
either mitigate or reverse trap reductions if stock and/or market conditions
improve.
·
We assign a B-plus
grade to the biological consequences of the industry’s Effort Control and
Consolidation Plan. It will lead to a reduction in the number of traps fished
in the short term: however, it does not place a firm ceiling on the total
number of traps in the fishery in the long term.
The industry’s Open Access
Plan provides no direct control on the total number of traps. It lifts the
moratorium on licenses and allows unrestricted access to the fishery. The
number of active traps will tend to decrease only if stock and/or market
conditions deteriorate. If those conditions improve, the number of traps will
increase due to new entrants and increased trap usage by the currently active
fleet. We expect fishing mortality to steadily increase under this Plan.
The Open Access Plan
proposes significant increase in the minimum size and imposes a relatively
small maximum size of lobster. Our fishery scientist colleagues have testified
that such significant changes can, in principle, rebuild the resource stock.
Since no specific minimum and maximum size limits have been proposed, there is
no way to predict the extent of stock rebuilding that can be expected.
·
We assign a grade of
D-minus to the biological consequences of the industry’s Open Access Plan. It
places no restrictions on the total number of traps fished, which will likely
put the resource at greater risk.
Economic consequences
Economic consequences
include changes in the net economic benefits to harvesters, processors,
distributors, marketers, and consumers. The net benefits are related to
landings (amounts and seasonal patterns); fishing patterns (season length,
race-to-fish); harvesting capacity (fleet size and composition, vessel sizes);
harvesting practices (fishing techniques, product handling); by-catch (amounts
and use of); product utilization (discards, high-grading); landed product
forms; harvesting costs; gear conflicts; gear loss; employment (amount and
seasonal patterns) in harvesting and processing; safety; total sales/revenues;
vessels owners and crew incomes; and resource rent. In the market sector, net
benefits are related to prices (levels and seasonal patterns); product quality
and forms; product utilization; product availability patterns (e.g. market
gluts and scarcity); imports and exports; and consumption patterns.
Of the three proposed
plans, the industry’s Effort Control and Consolidation Plan offers the most
favorable economic consequences to RI lobstermen. Our computer modeling shows
that net incomes for the fleet as a whole will increase in the short term
through consolidation (by as much as 75% for some, not all, producers). Costs
decline more than revenues in these models. If trap saturation prevails, then
revenues will not drop and net revenues will increase more than our estimates.
We also expect growth in net incomes over time when stock conditions improve in
the fishery.
The Plan’s provision to
allow the sale of a lobster license strengthens and protects the security of
lobster businesses. This is especially valuable to lobstermen within a few
years of retirement in the early years of stock rebuilding. This provides
greater financial security to them and their families. Also, the economic
security offered by transferable licenses will motivate the financial community
to offer lobstermen more favorable terms on credit, especially when combined
with improved prospects for stock rebuilding.
·
We assign a grade of
B-plus to the economic consequences of the industry’s Effort Control and
Consolidation Plan. We expect the Plan to significantly increase the net
benefits to and economic security of lobster producers, and provide greater
economic stability in the fishery. The plan also provides protection against
excessive consolidation in the fishery. We do not assign a top grade to the
economic consequences of this Plan because of the restrictive conditions on
license transfers and because the number of apprenticeship licenses is not
controlled.
DEM’s Lobster License Plan
will not improve the net incomes of the fleet in the short term – because the
Plan effectively freezes each active producer in an initial position. There is
little or no flexibility and opportunity in the Plan to improve economic
returns in the short term. However, net incomes are expected to grow in the
long term as stock rebuilding occurs under the Plan.
The Plan actually worsens
the security of lobster businesses, especially in the short term. The ban on
the sale of licenses combined with the ban on new entrants seriously weakens
these enterprises. The plan places fishermen at risk who are currently within a
few years of retirement. Since no new entrants are allowed – at least until the
stock is rebuilt – and licenses cannot be sold, the value of their lobster
fishing businesses is depressed. Also, since the license must be returned to
the State, the boat and other assets must be sold for use outside of RI state
waters. They will have to work longer and harder in order to afford retirement.
In the short term, the
weaker economic security will hamper the lobstermen’s access to credit.
However, in the long term, with the improved control of fishing effort and
improved prospects for the fishery, the financial community is likely to offer
more favorable terms to lobstermen.
·
We assign a grade of
C-minus to the economic consequences of DEM’s Lobster License Plan. There are
few, if any, opportunities for producers to improve their net incomes under the
Plan. It also places at risk the businesses of those producers who are
currently within a few years of retirement. We do not assign a lower grade to
the economic consequences of this Plan because of the strong potential for
stock rebuilding in the long term.
The industry’s Open Access
Plan will not improve the economic status of the fishery. We do not expect the
net incomes of lobstermen to improve either in the short or the long term.
Under open access, the long term viability of the fishery is placed at risk,
which will threaten the economic security of lobster producers and their
families.
Licenses would have no
value in an open access fishery, even if they could be traded. However, unlike
the DEM Lobster License Plan’s severe restrictions on new entrants, under open
access new entrants would be potential buyers of lobster businesses. But, since
we expect the biological and economic conditions to worsen under open access,
the sale value of those businesses for use in RI waters would be low.
·
We assign a grade of
D-minus to the economic consequences of the Open Access Plan. We expect the
plan to reduce net benefits to and the economic security of lobster producers
in both the short and long term. The plan also is likely to create more
instability in the fishery.
For any one of the three
plans, we expect no significant changes in the net benefits to local dealers
and consumers, since RI production is a small fraction of the lobster market.
Also, neither the quality nor the seasonal patterns of lobster landings is
expected to be affected by the plans.
Social consequences
Sociologists and
anthropologists who study marine resource-dependent communities use what is
called ‘cultural capital’ to measure the social health of these communities.[3]
The Rhode Island communities of Pt. Judith/Galilee, Jamestown, Newport,
Tiverton and Sakonnet Pt. rank among the top marine resource-dependent
communities in New England (traditionally as well as currently). The lobster
fishery is a major determinant of the social health (a.k.a. cultural capital)
of these communities.
Of the three proposed
plans, the industry’s Open Access Plan has the most benign social consequences
in the short term, and perhaps in the long term. The Plan allows lateral
mobility into and out of the lobster fishery. To the extent that new entrants
from other fisheries are not perceived to damage the well-being of currently
active lobstermen, the linkages and relationships between lobster producers and
producers in other fisheries will be strengthened. A stronger sense of
community would emerge. Open access would continue to support the traditional
lifestyles of RI fishermen.
There would be little or
no disruption to employment, demographics, family stability, social stress, and
social networks in the communities, at least in the short term. If open access
leads ultimately to further stock depletion and economic hardship in the
lobster fishery, the social health of these communities could suffer in the
long term.
Further, the Plan would
not directly affect ownership patterns in the fishery. There will be no
tendency, triggered by the Plan, to move away from the small-scale and
family-operated lobster operations that are highly valued by many members of
the fishing community.
The Open Access Plan is
likely to be perceived as fair among many fishermen and other community
members. No privileged class of lobster producers is created by the plan; and
there are no ‘haves’ and ‘have-nots’ created by the Plan. All who want to enter
the fishery may do so, and they compete on a level playing field with others in
the fishery. The Plan does not arbitrarily redistribute incomes and other
benefits among fishermen in fishery-dependent communities.
·
We assign a grade of
B-plus to the social consequences of the Open Access Plan. In the short term
the Plan preserves, and may even strengthen, the ‘cultural capital’ of those
Rhode Island communities dependent on the lobster fishery. We do not assign a
higher grade to the social consequences of this Plan because we fear that the
long terms prospects for fishery are threatened by open access. A deteriorating
fishery would, consequently, also threaten the social health of those
communities that are dependent on this most valuable of RI’s fisheries.
The industry’s Effort
Control and Consolidation Plan presents a few threats to the social health of
fishing communities in the short term. However, the Plan may improve the social
health of these communities in the long term.
The Plan creates an
identified group of lobstermen who are initially awarded active and part-time
licenses. This group may be perceived by the larger community as a ‘privileged
class.’ If so, the Plan may be perceived as unfair by some members of the
community, including other fishermen. If this perception is sufficiently
strong, this could create social divisiveness and threaten the social health of
the communities, at least in the short term.
The Plan allows lateral
mobility into and out of the lobster fishery. New entrants can acquire an
apprenticeship license for a nominal fee. New entrants who wish to operate at a
larger scale than permitted by the apprenticeship license may purchase a
license from a willing seller of an active or part-time license. The price of a
license is not likely to be low. Therefore, entry will not be possible for
those who do not have the financial ability to purchase an active or part-time
license. If this barrier to entry is widely perceived as unfair, social
networks may be frayed in the short term.
The Plan fosters
consolidation and, therefore, a reduction in the number of lobster producers.
Employment in the fishery will decline. Unless provisions are provided to allow
and encourage downsizing of license holders, there is little prospect for the
number of producers & employment to increase in the long term when the
fishery resource recovers.
Ownership patterns in the
fishery are likely to be changed by this Plan. We expect a move towards smaller
producers (100 traps) and larger producers (1200 trap maximum), and a move away
from medium size producers (400 to 800 traps). We do not expect large
corporations to dominate as a form of business in the fishery. We expect the family-operated
form of business to thrive as well as any other form.
The Plan has the potential
to significantly improve the economic health of lobster producers and their
families. This is expected to spill over to the larger community, especially in
the long term when the resource is rebuilt. Higher incomes will result in
greater expenditures by lobster families in their communities, and tax revenues
will grow. We expect these expenditures and taxes to improve the physical and
social infrastructure in RI fishery-dependent communities.
·
We assign a grade of B
to the social consequences of the industry’s Effort Control and Consolidation
Plan. The Plan presents a few threats to the social health of fishing
communities in the short term. However, the Plan may improve the social health
of these communities in the long term. We do not rate this Plan higher because
of the potential for perceived inequities that may lead, in the short term, to
social disruption in RI’s fishing communities.
DEM’s Lobster License Plan
presents some serious threats to the social health of RI’s fishing communities.
First, it caps the number of lobster producers and does not allow new entrants
until after the resource stock is rebuilt. Second, it creates a small,
exclusive group of lobster license holders. Third, it imposes serious
inflexibilities on the remaining participants in the fishery. We expect these
and other provisions to present significant threats to the social health of
fishing communities in RI.
On the plus side, the Plan
does not significantly alter employment, demographic, and ownership patterns in
the fishery. If the plan ultimately leads to rebuilding the lobster resource
stock, the fishery should be allowed to expand. New entrants will be allowed at
that point, which should relieve some of the social disruption caused during
the rebuilding phase of the Plan.
·
We assign a grade of D
to the social consequences of DEM’s Lobster License Plan. The Plan presents
serious threats to the social health of RI fishing communities, especially
those communities that are dependent on the lobster fishery. We do not rate
this Plan higher because of prohibition of new entrants during the rebuilding
phase, the lack of flexibility for producers, and the privileged group of
producers that the Plan creates.
Administrative consequences
Administrative
consequences include changes in the amount of enforcement resources and costs;
compliance and enforcement problems; industry acceptance and cooperation, or
resistance; information demands; monitoring resources and costs; research
requirements and costs; and data degradation, including misreporting of
landings and fishing activity. Administrative consequences also include the
extent to which lobster producers encourage their elected representatives to
become involved in the setting of management measures (a.k.a. the ‘end run’);
and the extent to which lobster producers seek favorable treatment by the
management authorities (a.k.a., ‘rent seeking’). Such influences are well known
for their ability to thwart the ability of fishery management authorities to
effectively manage the fisheries for which they are responsible.[4]
Of the three plans, the
industry’s Effort Control and Consolidation Plan is expected to have few
serious administrative drawbacks and may yield some positive administrative
consequences. The Plan is not expected to add significantly to the burden on
enforcement, since trap monitoring is expected to continue in much same way as
under the current program. Since the industry’s Plan appears to have strong
support among the leadership of the State’s two principle lobster
organizations, we expect widespread acceptance of the plan among the industry.
This should result in substantial cooperation with DEM and no increase in
noncompliance.[5]
We expect the initial
allocation of traps among currently active lobster producers to be time
consuming and potentially problematic. The appeals process will require
additional resources for administration of the program.
We do not expect this Plan
to elevate information demands, monitoring resources and costs, research
requirements and costs, nor cause data degradation, including misreporting of
landings and fishing activity.
We expect that there will
be less of a propensity by lobster producers to encourage elected
representatives to become involved in the setting of management measures, since
entry is allowed and trap allocations are handled by a market for licenses.
This is in direct contrast to the DEM Lobster License Plan. Some of this
behavior will continue as in the past, but the volume of this activity is
expected to diminish as a result of this Plan.
·
We assign a grade of
B-plus to the administrative consequences of industry’s Effort Control and
Consolidation Plan. The initial allocation of traps will be time-consuming and
may be problematic; however, compliance is expected to improve and ‘rent-seeking’
to diminish.
The industry’s Open Access
Plan presents only a few potential drawbacks. The Plan proposes no changes in
the number of traps allowed by each participant. The entry of new producers
overtime will add more traps in the water and thereby increase the demands on
enforcement, but probably not to a great extent.
The principal potential
drawback that we see is that the plan proposes significant increases in the
minimum carapace size and imposition of a maximum size. Many lobstermen may not
readily accept and cooperate with the proposed increases in the minimum
carapace size and imposition of a maximum size. If so, this could lead to a
substantial growth in noncompliance, which would require more enforcement
resources.
We do not expect the Plan
to elevate information demands, monitoring resources and costs, research
requirements and costs, nor cause data degradation, including misreporting of
landings and fishing activity.
·
We assign a grade of B
to the administrative consequences of industry’s Open Access Plan. The proposed
significant changes in size regulations may increase compliance and enforcement
problems.
DEM’s Lobster License Plan
proposes to lock producers in to a set of fixed trap allocations and allows for
no new entrants into the fishery. Unless DEM can marshal widespread support
among the industry for these aspects of the Plan, we expect noncompliance to
grow, causing an increase in enforcement problems and more demands on
enforcement resources.
We expect the initial
allocation of traps among currently active lobster producers to be time
consuming and more problematic than the industry’s Effort Control and
Consolidation Plan. The appeals process will involve more resources for this
purpose than the other plan, since the volume of appeals is expected to be
greater and more time consuming.
We do not expect this Plan
to elevate information demands, monitoring resources and costs, research
requirements and costs, nor cause data degradation, including misreporting of
landings and fishing activity.
Also, since transfers of
licenses are prohibited by the Plan, there will be a strong propensity by
lobster producers to encourage elected representatives to become involved to
influence administration of the Plan, especially the administration of new
entrants to the fishery. We expect the ‘end run’ and ‘rent seeking’ behaviors
to intensify.
·
We assign a grade of D
to the administrative consequences of DEM’s Lobster License Plan. The initial
allocation of traps will be more time-consuming and problematic than the
industry Plan; and noncompliance and ‘rent-seeking’ are expected to increase.
None of the plans provides
a mechanism to recover the costs of management from lobster producers. The
administrative performance of each plan could be measurably improved if a form
of sustainable financing were implemented in the fishery.
The results of our
evaluation is summarized in the following table.
|
|
Proposed Management Plans |
||
|
Consequences |
Effort Control & Consolidation Plan |
Open Access Plan |
DEM Lobster License Plan |
|
Biological |
B+ |
D- |
A- |
|
Economic |
B+ |
D- |
C- |
|
Social |
B |
B+ |
D |
|
Administrative |
B+ |
B |
D |
Bibliography
References Cited
Dyer,
Christopher L. ; and Poggie, John J. 2000. "The Natural Resource Region
and Marine Policy: A Case Study from the New England Groundfish Fishery."
24 Marine Policy 245-255.
Furlong,
W. J. 1991. ‘The Deterrent Effect of Regulatory Enforcement in the Fishery,’ Land Econ. 67(1): 116-129.
Gates,
J.M., 2000. "Input Substitution in a Trap Fishery," ICES, Journal of Marine Science. 57:
89-108.
Hennessey,
T. and M. Healey. 2000. Ludwig's rachet and the collapse of New England
groundfish stocks. Coastal Manage.
28(3):187-213.
Kuperan,
K., and J. G. Sutinen. 1998. ‘Blue Water Crime: Legitimacy, Deterrence and
Compliance in Fisheries,’ Law and Society
Review 32(2):309-338.
OECD.
1994. Fisheries Enforcement Issues,
Paris: Organization for Economic Co-operation and Development.
OECD.
1997. Towards Sustainable Fisheries:
Economic Aspects of the Management of Living Marine Resources. Organization
for Economic Cooperation and Development. Paris; 268 pp.
Sissenwine, M.P., & Rosenberg, A. 1993. Marine
fisheries at a critical juncture. Fisheries,
18(10): 6-14.
Sissenwine, M.P., and P. M. Mace. 2001. Governance For
Responsible Fisheries: An Ecosystem Approach,’ a paper presented to The Reykjavik Conference On Responsible Fisheries
In The Marine Ecosystem, October 1-4, 2001, Reykjavik, Iceland.
Sutinen,
J. G. and K. Kuperan. 1999. ‘A Socioeconomic Theory of Regulatory Compliance in
Fisheries,’ International Journal of
Social Economics 26(1/2/3):174-193.
Sutinen,
J. G., A. Rieser, and J. R. Gauvin. 1990. "Measuring and Explaining
Noncompliance in Federally Managed Fisheries," Ocean Development and International Law, 21:335-372.
Sutinen,
Jon G. 1999. ‘What Works Well and Why: Evidence from Fishery Management
Experiences in OECD Countries,’ ICES
Journal of Marine Science, 56: 1051-1058.
Sutinen,
Jon G. and Harold F. Upton. 2000. ‘Economic Perspectives on New England
Fisheries Management,’ Northeast
Naturalist 7(4): 361-72.
Additional
Readings
References
on the Economics of Lobster Fisheries
Gates,
J.M., with E.J. Richardson. 1986. "Economic Benefits of American Lobster
Fishery Management Regulations," Marine Resource Economics, 2(4):353-385.
Hasselback,
N.L., J.B. Dirlam, and J.M. Gates. 1981. "Canadian Lobster Imports and the
New England Lobster Industry," Marine Policy 5(1):40-51.
References
on the Political & Administrative Aspects of Regulation
Buchanan
J. and G Tullock. 1975. Polluters, Profit and Political Response: Direct
Control versus Taxes. Am. Econ. Rev. 65:139-140.
Buchanan,
J. and G. Tullock. 1962. The Calculus of Consent. Ann Arbor: University of
Michigan Press, 1972.
Buchanan,
J.M. 1980. Rent-seeking under external diseconomies. In Toward a Theory of the
Rent-Seeking Society, ed JM Buchanan, RD Tollinson, and G Tullock. College
Station:Texas A&M Press.
Campos
J.E. 1989. Legislative Institutions, Lobbying and the Endogenous Choice of
Regulatory Instrument: A political Economy Approach to Instrument Choice. J.L.
Econ & Org 5: 333-348.
Fiorina
M. 1982. Legislative Choice of Regulatory Forms: legal process or
Administrative Process? Public Choice 39:33-
Hahn K.
1990. The political Economy of Environmental Regulation: Towards a Unifying
Framework. Public Choice 65: 21-
Hennessey,
T. and M. Healey. 1999. “The Fairness Paradox, Ludwig’s Ratchet and the
“Problem” of Fisheries Management in Canada and The United States,” in Dennis
Soden and Brent Steel, Handbook of Global Environmental Policy and
Administration. Marcel Decker, New York.
Keohane
N., Revesz R. and R Stavin. 1998. The Choice of Regulatory Instruments in
Environmental Policy. Harvard Environmental Law Review, 22:313-367.
Magat,
W., Kruspnick, A. and Harrington, W. 1986. Rules in the making: A statistical
analysis of regulatory agency behavior. Washington, DC: Resources for the
future.
Niskanen,
W. 1971. Bureaucracy and Representative Government. Chicago, IL:Aldine Press.
Olson, M.
1964. The logic of Collective Action. Harvard University Press, Cambridge MA.
Peltzman,
S. 1976. Toward a more general theory of Regulation. Journal of Law and
Economics 19:211-240.
Peltzman,
S. 1984. Constituent Interest and Congress Voting. Journal of Law and Economics
27:181
Sproule-Jones,
M. 1982. Public Choice and Natural Resources: Methodological Explanation and
Critique. American Political Science Review. 790-802.
Stigler,
G. 1971. The Economy theory of Regulation. Bell Journal of Economics 2:3-21.
Tollinson,
R.D. 1982. Rent-Seeking: A survey, Kyklos 35:575-602.
Wolf, C.
Jr. 1988. Markets or Governments: Choosing between Imperfect Alternatives. The
MIT Press, Cambridge, MA.
Zusman,
A. and G. Rausser. 1994. Intraorganizational Influence relations and the
optimality of collective action. J. of Econ. Behavior and Org. 24:1-17.
References
on Regulatory Compliance & Enforcement in Fisheries
Descriptive
Sutinen,
J. 1994. Summary and Conclusion of the Workshop on Enforcement Measures, in Fisheries Enforcement Issues,
Organization for Economic Co-operation and Development: 7-16.
Sutinen,
J. G. 1987. ‘Enforcement of the MFMCA: An Economist's Perspective,’ Marine Fisheries Review, 49(3):36-43.
Sutinen,
J. G. and T. M. Hennessey (eds.), 1987. Fisheries
Law Enforcement: Programs, Problems and Evaluation, Marine Technical Report
93, University of Rhode Island, Kingston, RI.
Sutinen,
J. G. and T. M. Hennessey. 1986. ‘Enforcement: The Neglected Element in
Fisheries Management.’ E. Miles, R. Pealy and R. Stokes (eds.), Natural Resource Policy and Management:
Essays in Honor of James A. Crutchfield. Seattle: University of Washington
Press.
Wang, S.
and A. Rosenberg. 1997. ‘Thalassorama: US New England Groundfish Management
Under the Magnuson-Stevens Fishery Conservation and Management Act,’ Marine Resource Economics 12: 361-66.
Theory
Becker,
Gary. 1968. ‘Crime and Punishment: An Economic Approach,’ J. Political Economy 76(2): 169-217.
Milliman,
Scot. R. 1986. ‘Optimal Fishery Management in the Presence of Illegal
Activity’. J. Environ. Econ. and Manage.
13(4):363-381.
Sutinen,
J. G. 1993. "Morality and Fairness, and Their Role in Fishery
Regulation," in Proceedings of the
IV Annual Conference of The European Association of Fisheries Economists,
M. Spagnolo (ed.), Salerno, Italy; pp 7-15.
Sutinen,
J.G. 1993 ‘Recreational and Commercial Fisheries Allocation with Costly
Enforcement.’ Amer. J. Agricultural Econ.
75(5): 1183-1187.
Sutinen,
J. G. and P. Andersen. 1985. ‘The Economics of Fisheries Law Enforcement.’ Land Economics, 6l(4):387-397.
Tyler, T.
1990. Why People Obey the Law. New
Haven & London: Yale University Press, 273p.
Evidence
Bean, C.
1990. An Economic Analysis of Compliance and Enforcement in the Quahaug Fishery
of Narragansett Bay, unpublished Masters thesis, University of Rhode Island.
Gauvin,
John R. 1988. An Econometric Estimation of Compliance Behavior in the
Massachusetts Inshore Lobster Fishery, an unpublished M.S. thesis, Department
of Resource Economics, University of Rhode Island.
IDA.
1999. Fisheries Law Enforcement:
Assessment of Deterrence. IDA Document D-2381. Institute for Defense
Analysis, Alexandria, VA.
Sutinen,
J. G. and J. R. Gauvin. 1988. A Study of Law Enforcement and Compliance in the
Commercial Inshore Lobster Fishery of Massachusetts. Volumes I and II. An
unpublished Report to the Environmental Enforcement Division, State of
Massachusetts.
Policy
Analysis, Prescriptions
Sutinen, J. G. 1996. Fisheries Compliance and Management:
Assessing Performance. Australian Fisheries Management Authority, Canberra,
ACT (August).
Results of Consolidation Modeling
We developed a model to simulate
the consequences for net income and cost savings that may result from consolidation
of two licenses, each with an initial allocation of 800 traps. One license
acquires the other and, as a result, is able to fish 1200 traps.
The estimates are for one
year in which, before consolidation, each operator fished approximately 150
days, operated with a sternman, and faced an average price of $3.60. The net
income that we estimate is not net of the cost of capital. In other words,
costs such as mortgage payments have not been accounted for in our estimates of
net income.
We considered eight (8)
possible scenarios:
|
Scenario |
Description |
|
1 |
Base Case: consolidation only (to
one 1200 trap operation) |
|
2 |
Haul rate increase of 50 traps/day |
|
3 |
Days fished increase of 10% |
|
4 |
Haul rate & days fished increase |
|
5 |
Catch per trap haul increase of 10% |
|
6 |
CPTH & haul rate increases |
|
7 |
CPTH & days fished increases |
|
8 |
CPTH, haul rate & days fished
increases |
The first four scenarios
assume that resource abundance does not change; and the last four scenarios assume
that abundance increases such that there is a 10% increase in the
catch-per-trap-haul (CPTH). The base case of consolidation only assumes that
there is no change in either the
number of traps hauled per day, or the number of days fished. The next three
scenarios increase each of these separately and in combination to estimate the
potential economic outcomes.
The chart below shows the
results of consolidation under 8 scenarios. In scenario 4, where both the haul
rate and days fished increase – a most likely response by producers - there is
a reasonably strong incentive for consolidation. The net income after consolidation
is 33% greater than the joint net income of the two lobster producers before
consolidation. There clearly is an incentive for one producer to acquire the
license of the other. The increase in net income would be shared between the
two parties who have consolidated their licenses. The seller would receive some
share of these net income and the buyer would receive the remaining share –
determined by the price of license when sold by one operator to the other.
In scenario 8, where
resource abundance increases, and the producer increases both his haul rate and
days fished, net income is projected to increase by about 75%. (As noted in the
text, a 10% increase in catch-per-trap-haul may not occur if trap saturation
exists).
In addition to improving
producers’ net incomes, there are cost savings result from the labor and
capital that are released from one of the lobster operations. For example, the
vessel may be sold and the captain’s labor services transferred either to
another fishery or the next best use of this time (which may be retirement).
