Events

Confronting Fishing Overcapacity and Other Long-Overdue Reforms

April 26, 2007 // 12:00pm2:00pm
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"Too many boats, too few fish"—this is the common phrase used to describe overcapacity of the world's fisheries. But according to James Sanchirico, a senior fellow at Resources for the Future, this is a gross oversimplification: "What we are really seeing is too many boats chasing too few fish; with too much fishing power and too little wealth; too few large predators; too much habitat damage; and too much pollution," he explained at an event sponsored by the Environmental Change and Security Program (ECSP) on April 26, 2007. Sanchirico, along with Pro-Fish's Annie Jarrett and Sound Sea's Tundi Agardy, discussed the trends that have contributed to overcapacity, and examined efforts to reform policy and management. This event marked the sixth in ECSP's series on fisheries management.

Tracing the Roots of Overcapacity

The end of World War II wrought two profound changes on fisheries: First, the fishing industry adopted advances in naval technology, making fishing the high seas easier and more efficient; and second, the de facto moratorium on fishing was lifted. "Fishing became an extremely profitable operation, which created further incentive to continue the expansion," he said. In the 1950s, the first signs of overcapacity emerged. "We were beginning to see the tragedy of the commons operating," he said. "There were very few controls domestically and very few incentives to control domestic fisheries. We saw the beginning of the race to the bottom."

In 1976, the Magnuson-Stevens Fishery Conservation and Management Act increased the boundary of the United States' exclusive fishing territory from 12 to 200 nautical miles offshore. The act, by extension, legitimized the 200-mile limit off the coasts of other fishing nations, resulting in the now agreed-upon Exclusive Economic Zones. According to Sanchirico: "[This act] essentially gave the coastal nations control over most of the world's fisheries—most fisheries occur on upwellings and the continental shelf, which are covered out to 200 miles."

As a result, access rights shifted, along with the entire trade balance—nations with little or no coastline lost the rights to the sea; while countries with vast coastlines gained them. But not all coastal nations won out, noted Sanchirico. Wealthier coastal countries invested in vessel construction and provided subsidies and loans to fishing companies as a way to expand their fishing industries, but the less-developed countries (LDCs) with coastlines struggled to build capacity. Since the LDCs could not effectively fish their own waters, they often resorted to selling off their best assets: "You had a lot of cases of corrupt governments mining out the resources to foreign fleets."

Overcapacity: Drivers and Solutions

"Overcapacity is often seen as the result of greed and short-sightedness by fishers who are just out to make a profit," said Sanchirico. "But an economist looks differently at the flow from causes to solutions." As such, he believes the basic root cause of overcapacity is the treatment of fisheries as an open-access resource. Without clear ownership, there is no incentive for fishers to harvest at a sustainable rate. Instead, in a "race to fish," fishers compete to maximize their short-term profits. If more fish are harvested than replaced, the stock eventually dwindles.

Fixing the property rights problem, however, is easier said than done, as access rights can be established through a variety of economic means—zoning, individual transferable quotas (ITQs), and territorial use rights (TURFs), to name a few. While each of these systems has a particular advantage, the speakers noted that each situation requires using a different approach or multiple systems to work in tandem. In fisheries, they agreed, there is no "silver bullet" or "one-size-fits-all" solution.

Case Studies: Australia Versus Madagascar

The Northern Prawn Fishery (NPF) is Australia's largest and most valuable fishery. The NPF is a model of success: Its co-management plan engages government, the scientific community, NGOs, and on-the-ground stakeholders, and includes economic, biological, and ecological objectives. "This engenders full harmony in the fishery," said Annie Jarrett, executive officer of the NPF Management Advisory Committee (NORMAC).

But this symbiosis has not always existed, she noted. In the mid- to late 80s and early 1990s, the NPF was fished by too many vessels, leading to significant declines in the stock of tiger prawns. As a result, the fishery became financially shaky and susceptible to external factors like market prices and exchange rates. Reviving the fishery first required replenishing the stocks, which could only be done—and sustained—through "significant and on-going adjustments," said Jarrett. To reduce fishing capacity, licenses were severely restricted—52 were doled out in 2007, down from 302 in 1995. In conjunction, individual transferable fishing rights (ITFRs) allow fishers to trade their access rights. A larger fisher can buy rights from a smaller outfit, and both win if the smaller fisher cannot harvest as cheaply or efficiently as the larger fisher.

In contrast, the Madagascar Shrimp Fishery (MSF) was established in the late 1960s. It contributes greatly to the country's export sector, and is mined by the industrial and artisanal fishers. But the MSF has been plagued by irregular licensing and a general lack of transparency. Despite limits established on entry rights in 1998, the MSF continued to decline. In 2003, a mentor committee reviewed the fishery and proposed solutions to overcapacity, said Jarrett. The committee looked at Australia's fishery to determine what—if any—approaches could be adopted in Madagascar. "We [wanted to] take lessons learned from a developed country and put them to work in a developing one."

After an extensive review, the advisory committee determined that Australia's successful transferable quota system would not work in Madagascar, primarily because the country does not yet have the capacity to police and administer such a system. Two other schemes were dismissed as unfeasible in the MSF: A "boat day" system would require a costly and time-intensive tracking system to monitor vessel activity; while "effort unit" systems, which monitor fish catch per vessel, would require extensive scientific studies to determine the relationship between vessel size and fishing capability. These systems, like the transferable quota system, required more capacity than available in Madagascar.

The committee concluded that gear units were the most appropriate system for the MSF. A way of monitoring the physical tools used by fishers, the gear unit system offers several advantages: It allows technical innovation without requiring fishers to switch to new and costly vessels; and it creates a flexible system whereby operators can buy, sell, or lease gear units. In 2006, both the industrial and artisanal sectors agreed to adopt a gear unit system in 2008. They also agreed to reduce their fleets and improve biological and economic sustainability, as well as accept greater zoning restrictions and increase data collection. Finally, the fishery will work to adopt a co-management plan similar to Australia's, said Jarrett: "There was recognition [in the MSF] of the need to implement management controls on the fishery."

While the two fisheries do not share many features—they have different operating environments, capital opportunities, and institutional arrangements—Jarrett said the fisheries have a few important commonalities. They share management approaches based on secure access rights and adjustment programs to address overcapacity. They also share a vision for wealth generation and biological sustainability. And both have invested heavily in co-management strategies. These common traits, she stressed, reveal that approaches used in developed-world fisheries can be adopted in the developing world.

Determining Solutions, Roles, and Responsibilities

Individual transferable quotas (ITQs) have proven effective in Iceland, New Zealand, Australia, the United States, and Canada—all wealthy and capacity-rich countries. If ITQs can be effectively applied in developing-country contexts, the gains could be great, said Tundi Agardy, founder and executive director of Sound Seas: Not only does the quota system dampen the "race to fish," but it also generates wealth while reducing habitat destruction.

Zoning can serve multiple purposes in fisheries management, according to Agardy: "We will see increasingly sophisticated ways to zone fisheries as situations change and as needs change." Several different zoning systems can be used, she said: Fishing-only zones—while rare—exist in certain parts of the world. Brazil, for example, uses this type of zoning—which they call "extractive reserves"—to better engage the fishing sector in the development of a broad scale management scheme. But she also noted a second purpose: "It is a way to recognize the valid use of the oceans for fisheries."

On the opposite end of the fishing-only model are marine protected areas (MPAs). These areas can help increase production while also providing a framework around which to outline property rights, Agardy said. Additionally, MPAs create habitat-protected areas for certain species but also simultaneously help develop other markets to protect the sustainability of fish.

Sanchirico noted that zoning can be an incredibly useful mechanism to reduce conflict, but is not a panacea. Bringing the discussion to dry land, he explored a common example of zoning: the smoking and non-smoking sections in restaurants, which separate two conflicting uses of the same space. "What gets ignored about zoning," he said, "is that not only is the restaurant owner deciding whether to have both non-smoking and smoking sections, but they are also determining how large each section is." Zoning, he stressed, can lay the groundwork for better access rights, but it must be accompanied by good management and oversight.

In the restaurant analogy, the owner holds all the power. In fisheries, though, power division is less clear, noted Agardy: "Are we moving away from an egalitarian open-access regime in the oceans and toward a system in which there will be decisions made for use that affect only a few people positively, and potentially affect many people negatively?" While she noted that government is usually assumed to hold all the power, command-and-control approaches will not resolve overcapacity of fisheries: "Developing secure fishing rights is certainly something the government can do, but it is something that can only be done in government partnerships with civil society and industry…. It is only by involving those three that you can get management arrangements that are appropriate to the circumstances."

Drafted by Alison Williams.

 
Event Speakers List: 
  • Executive Officer, Northern Prawn Fishery Management Advisory Committee; Managing Director, Pro-Fish Pty Ltd.
  • Senior Fellow, Resources for the Future
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