Let it be agreed at the outset that the term Fishery Management is to be defined in a broad sense. Policy making in this field is not concerned simply with the conservation of natural resources, i.e. stocks of fish species in bodies of water. It is occupied as well with development of the fishing industry and the fish trade.
The central objective of fishery management in this sense is optimization of net social benefits derivable from the use of natural resources. Achievement of the objective involves trade-offs among benefits, e.g. between expansion of employment opportunity and enhancement of individual income or between higher returns for producers and lower prices for consumers. The conditions under which such trade-offs occur differ from place to place and change through time.
This is the source of the major issues in fishery management that confront policy makers and administrators. The “system” within which these issues are presented consists of natural resources as one dimension and product markets as another, the connection between these being provided by the primary (harvesting), secondary (processing) and tertiary (marketing or distribution) divisions of the commercial fisheries. It is an open system, with numerous linkages to other sectors of the economy.
This constituent of the system consists not only of the actual resource endowment, i.e. stocks of fish species, but also of the aquatic environment or habitat occupied by and sustaining those stocks. Protection of the integrity and productivity of this habitat is an indispensable condition of successful fishery management. Habitats are subject to the impact of both internal and external influences. Natural variation in environmental conditions is always a hazard and on occasion can be devastating for a fishery, e.g. a shift in ocean currents that alters unpredictably the migration pattern of a species stock. An increasingly common external threat arises from accidental oil spills: hydrocarbon products and chemical clean-up agents are lethal to fish in adult as well as larval stages, either directly or through the food chain.
Environmental degradation has especially severe effects in the most productive and fragile areas of habitat, i.e. estuarine waters and wetlands (foreshore). The principal concentrations of human settlement and industrial activity tend to be located in the vicinity of these areas and progressively to encroach on them. Consequently, major threats to resource survival arise (a) from silting, (b) from the discharge of organic contaminants (from sewage works, packing plants, etc.), of mine tailings, of chemical pollutants (pesticides, herbicides, etc.) and of waste heat, and (c) from the long-term accummulation of heavy metals and other toxic detritus of industrialization.
To a degree, the toll exacted by such competitive demands on marine and freshwater environments is probably inevitable: being part of the price of economic development. The damage, however, may be minimized through an integral approach to fishery management, as discussed later, and, in some cases, offset by means of positive action to restore and/or enhance fish stocks, e.g. habitat renewal, aquacultural projects, etc.
1 The term “commercial” fisheries, as employed in the present text, contrasts with those of “subsistence” fisheries and “recreational” or “sports” fisheries. It applies to all activities directed to the capture and utilization of fish for sale, regardless of scale and equipment. This usage differs from that of some other writers, who employ “commercial” fisheries as a synonym for “industrial” fisheries in which large-scale or advanced technologies are used, in contrast with “artisanal” or “small-scale” fisheries.
Research in fishery resources has a relatively long history and, although (from a global viewpoint) grievous deficiencies remain, much relevant knowledge has been acquired. In large part, however, it is knowledge for specialists, e.g. officials charged with the design of regulatory programmes or the negotiation of resource-sharing agreements. Of principal interest here is what the generalist must know for effective decision-making at the political level of policy formulation.
The first thing to be said is that fishery resources are renewable but finite. This statement is not negated by the possibility of aquacultural enhancement of certain resource stocks, because the habitat available for that purpose is finite. Recognition and acknowledgement of the finiteness or exhaustability of fishery resources is a comparatively recent phenomenon and the concept may be resisted still in some quarters. It is, nevertheless, an indispensable ground for rational management policy.
It is perhaps necessary also to insist that internal (predator/prey and competitive) relationships within resource ecosystems are highly complex, as are external relationships with the aquatic environment. In neglect of this rule there lies a deadly trap for those who might be inclined to resolve management issues on the basis of superficial analyses. History is replete with instances of serious and even irreversible depletion of resource stocks as a result of simplistically based management policy.
The nature and extent of the resource base thus becomes the first constraint on the achievement of fishery-management objectives. For intelligent decision-making in this respect, some grasp must be obtained of the following:
(a) The magnitude and behavioural characteristics, i.e. seasonal concentrations, migratory patterns, etc., of a given species stock or stocks (biomass), including multispecies (intermingled) stocks.
(b) The way in which the stock(s) vary in response to natural (environmental) forces and to alternative levels of exploitative intensity, i.e. fishing pressure.
(c) The manner in which the exploitation of a particular stock interacts with that of others in the same ecosystem.
(d) The optimal catch rate and level, hence size and density of biomass, for the fish-harvesting industry.
(e) The effect of alternative allocations of access to a particular stock, among competing user groups, on the total quantity harvested, the catch rate and the unit size (age of individuals of the species) caught.
(f) The possible trade-offs among total catch, catch rate, catch stability and unit size.
(g) The maximum yield (catch) from a biomass, i.e. stocks in an ecosystem, that is sustainable over time (MSY).
The last-mentioned, being indicative of the “peril point” in fishing intensity, is a necessary datum for intelligent management planning. Possibly because of its conceptual simplicity or uncontroversiality, and thus its general acceptability, the MSY formerly was adopted as the target at which management policy should aim and this notion may be entrenched in some international conventions even yet. In ecological, not to mention economic and social, terms, the concept is not very meaningful and, in recent literature on marine biology relative to fishery management, it has been abandoned in favour of a more conservative formula.
The operational inutility of MSY is strikingly obvious in the case of intermingled resource stocks, characteristic of tropical and sub-tropical waters. Catches from such stocks usually consist of a large variety of species and year classes. The range in commercial value (price) is equally wide: there is often a sizeable proportion of “trash” fish in these catches. Whatever may be the possibility of selectively fishing a mixed stock (by means of adjustments in the gear used, for example), it seems probable that maximization of the sustainable yield would imply (a) exploitation at a low trophic level, i.e. non-optimal production in terms of market acceptability, and (b) changes in the species composition of the catch that might be irreversible. In any event, it is clear that optimal rates of resource exploitation are indeterminate on the basis of biological analysis alone.
Among alternative optima, that of a maximum sustainable surplus of revenue over cost in the fisheries (MEY) would maximize the economic benefit for society. There are social benefits, however, that are not necessarily realizable from the maximization of economic efficiency, as strictly understood. These include the creation of employment opportunity and the improvement of income distribution. Modification of the MSY and MEY in these directions results in the (rather awkwardly phrased) concept of optimum social yield (OSY). This defines the quantity and kind of inputs and outputs (catch) by which all the benefits referred to are optimized.
A peculiarity of fishery resources is that in general they are what is called, for want of a better term, common property. This means that, in accordance with the “rule of capture”, a quantity of fish from wild resource stocks becomes personal or private property, e.g. that of a fishing enterprise, only when removed from its natural habitat, i.e. caught and landed. Until the advent of extensions of fishery-management jurisdiction by a majority of coastal states, most marine fishery resources were the common property de jure of the world community - some still are and many of these are likely to remain so.
Extension of national jurisdiction over the use of fishery resources within the 200-mile economic zone of coastal countries in effect converts these resources into national (as distinguished from international) common property. The implications of this event, however, are unclear. Although a number of coastal states have been acting for several years as if they possessed a proprietory right in the high-seas fishery resources within their respective zones of jurisdiction - and, for stocks of anadromous species, even beyond those zones - this right is by no means universally acknowledged. There are grounds, however, to suspect that new international law on this subject is in the course of formation. It may be a question of time only until the exclusive authority of nation-states to dispose of the fishery resources of their economic zones is firmly and unequivocally established.
In what follows, it will be assumed that national governments have as free a hand to control the use of the marine and freshwater fishery resources of their respective economic zones as they do those of the lakes and streams wholly enclosed within their borders. The marine resources referred to normally would be restricted to stocks of sedentary, demersal and pelagic species that are found exclusively inside the boundaries of the zone in question. With respect to stocks of similar species that straddle zone boundaries and of pelagic or wide-ranging species that migrate into or through its zone, a nation's authority naturally is circumscribed. As in the case of obtaining access to the coastal zones of foreign countries for distant-water fleets, negotiation with the other country or countries concerned, on the allocation of shares, is necessary in such cases. Unlike past arrangements under international-commission management, however, the allocation should be on a long-term basis. Once agreement on sharing is reached, a country's quota becomes a form of national property.
The position as regards stocks of anadromous species is somewhat ambiguous. The country-of-origin's claim to the sole right of harvest for these stocks is based on the social cost of production, i.e. the value of alternative forms of development (power generation and the like) forgone to preserve watersheds and estuaries for the rearing of anadromous stocks. In some instances, however, such stocks mature in international waters or even in the coastal zones of other countries. It might be argued, therefore, that when this occurs the country of origin owes a share of the harvest or at least a pasturage fee to the international community or to the foreign country or countries involved.
Negotiation for the sharing among nations of the harvest of fishery resources gives rise to some of the most difficult and vexatious of fishery-management problems - problems that are rivalled only by those arising from the intra-national allocation of access among competing economic groups in the commercial fisheries. The difficulty in both cases stems from the existence of differences in the “opportunity cost” of production factors: capital, labour and intrepreneurial skill or initiative. These differences are magnified in an international context because of wide variation from country to country not only in opportunity costs but also in value systems. In these circumstances, there is no common ground for optimization of input or output in resource harvesting. Agreement as to shares in the harvest, therefore, may be enormously difficult.
Resolution of the issue is not helped by LOS principles unfolded up to the present. According to these principles, as generally understood, it is stipulated that any proportion of a total allowable catch (TAC) from stocks individually or in the aggregate that is not harvestable by the domestic fleet(s) of a coastal state be made available to the fleets of other countries that are capable of using it. The trouble is that the concept appears to have been developed purely in physical (biological) terms. As we have seen, optimal levels of harvesting and consequently the presence or absence of potential “surpluses” must be identified by means of an analysis that incorporates economic and social as well as biological factors.
Analytical sophistication of this kind is rarely available, unfortunately, and in its absence political “horse trading” must serve. In negotiations of the latter type, account would be taken of broad national interests (including, possibly, those outside the fisheries sector), e.g. the expansion and/or diversification of product markets, to be considered later, the sourcing of investment for general developmental purposes and other policy objectives.
The primary division of the commercial fisheries consists of all enterprises 2 engaged in the harvesting of fishery resources. Organization varies widely, in accordance with (a) historical evolvement, (b) the socio-economic environment, and (c) national developmental policy. In capitalist (market) and mixed economies, for example, fishing enterprises generally are privately owned and operated. Typically they exhibit enormous heterogeneity in form, size (extent of investment and numbers employed), type of equipment and pursuit (species caught, grounds fished and so on).
A traditional feature of organization, typical of commercial fishing enterprises in many parts of the world, is remuneration of crew members (as co-venturers with the owner) on the basis of individual shares in the proceeds of the catch. Sharing formulae usually vary with scale of enterprise, i.e. the larger the investment, the lower the labour share proportionately. With unionization, arrangements of this kind are being replaced by basic rates of pay, e.g. per trip or per season, plus productivity bonuses. Where port markets function effectively, e.g. when landings are sold at auction, fishing enterprises are predominently independent, i.e. untied to processing or trading entities. In other circumstances, groups of such enterprises may form a producers' co-operative to engage in processing and product marketing or a processing and/or trading company may acquire a fishing fleet. 3
In traditional, e.g. tribal, societies, fishing often is a communal affair, carried out for subsistence or commercial purposes or both. One finds a somewhat similar arrangement, i.e. the production brigade, in certain developing countries that have adopted a centrally directed economy. More commonly, perhaps, state enterprises (ressembling, in organization, the larger integrated fishing enterprises of market economies) predominate in the fisheries of socialist countries. Theoretically, when operating within national zones of jurisdiction, these latter should not be subject to the blight, described below, affecting enterprises that operate in a competitive milieu. They might well be so affected, however, as participants in international fisheries where a free-for-all prevails.
2 Throughout this text, the object or focus of fishery regulation is identified as the fishing enterprise, i.e. the entity responsible for investment, employment and operational decisions. A number of authors of papers on the same or related subjects, finding that usage somewhat “clinical” in tone, perhaps, prefer to use “fisherman” for this purpose, although a distinction sometimes is made between vessel owners and crew members.
3 Vertical integration, of which these are examples (forward and backward, respectively), also occurs in agriculture and other industrial sectors.
In both advanced and developing economies, the primary fishing industry often exhibits a dual structure, i.e. two more or less distinct segments, respectively designated small-scale or artisanal and large-scale or industrial. The terms refer to the size and/or sophistication of the technology (fishing craft, gear and other equipment) employed by the enterprises involved. A relatively wide difference in size of investment and number of persons engaged per enterprise is also implied: the range extends from one man with a canoe (or equivalent) to a factory ship crewed by several hundred.
The small-scale segment tends to be distinguished from the large-scale one in other respects. In most cases, the former represents the traditional fishery or fisheries of a region or country. As such, it is often technically stagnant and dispersed in small and remote rural communities scattered along the coastline. Access to fishing grounds is restricted, by the types of technology commonly in use, to a comparatively narrow strip of coastal waters. Economies of scale, e.g. in the procurement of inputs and the marketing of catches, seldom are realizable. In contrast, large-scale enterprises are likely to be centred on a few large ports, to be footloose in operation and to command the industrial, business and financial services of an urban community.
The stark dichotomy, suggested in the preceding paragraphs, between small-scale and large-scale segments of the fisheries in fact is an over-simplification. It appears to be real enough in some developing countries but elsewhere reality is better represented by a continuum: there being, between the smallest-scale and the largest-scale technologies in use, a number of intermediate-scale technologies and related sizes of enterprise.
Moreover, this may indicate the direction of development. Events of the recent past, e.g. the rise in energy cost and the establishment of EEZs, have transformed the outlook for enterprises at both ends of the range. The use of smaller-scale technologies is offered much greater scope, potentially at least, while some of the largest scale technologies, the vessels required for distant-water operations and possibly factory-ships in general, have become or are becoming out-moded. Movement toward an optimal fleet mix, optimizing the types and quantity of technologies in use (with a probable leaning toward smaller-to-intermediate ones) would be expedited by the institution of regimes of quasi-property rights for fishing enterprises, as considered later.
As mentioned earlier, common property in the natural resources is a pervasive feature of the commercial fisheries throughout the world. Indeed, not only may fish stocks be so catagorized but their aquatic habitat usually is common property also and, as such, liable to claims from other uses, e.g. for navigation, recreation and waste disposal. Associated with the peculiar institution of common property, in most countries, is the further peculiarity that access to the use of fishery resources traditionally has been open to all. The exceptions to this rule, e.g. the allocation to individuals and communities of an exclusive right to the use of fishery resources in their proximity, are relatively rare. Moreover, excepting the investment required for entry, access to the use of fishery resources usually has been costless or, at the most, subject to a token licence fee.
The combination of common property in fishery resources and of open and free access for resource users has profound consequences. Having no security in the resource base, the proprietors of a fishing enterprise can assure themselves of supply, i.e. a catch share, only through aggressive action on the fishing grounds. That is, within their financial competence, they must seek to excel in technical efficiency. Since entry is unrestricted and all enterprises are similarly motivated, additional investment and manpower are continuously attracted to a fishery so long as the “opportunity” incomes of these factors (going interest and wage rates) are being matched therein. The tendency is reinforced by evidence, always to be observed: (a) that “bonanza” catches occasionally are obtained, (b) that, as beneficiaries of “fisherman's luck” participants sometimes make windfall profits, and (c) that, being managed with unusual skill, some enterprises continue to operate successfully (earn quasi-rents) year in and year out.
The benefit to society of an economic activity is maximized when the difference between the value of output and the cost of inputs required to produce that output is at a maximum. Given secure property rights for producers and reasonably efficient markets, this result is brought about more or less automatically through the competitive action of producers seeking to maximize their individual returns. The paradox of the commercial fisheries is that, without property rights in the natural resource, competition (rational behaviour, that is) among producers leads not to maximization of the net return to society but to the reduction of society's return to zero. Far from generating an economic surplus, the yield of a fishery actually may be negative. When that happens, the fishery becomes a liability to the regional or national economy and a drain on the surpluses yielded by other sectors.4
Where fishing operations are relatively labour-intensive and alternative employment opportunity is scant, i.e. the opportunity cost 5 of labour approaches zero, the private cost of entry usually is low and the potential for the expansion of labour into a fishery is high. When labour is the scarce factor, on the other hand, fishing enterprises tend to invest excessively in fishing craft, gear and other equipment.6 In either case, the ultimate result is total dissipation of the surplus (rent) that exploitation of fishery resources is capable of generating and that, in other circumstances, might accrue in whole or in part to the resource “owners”, i.e. society in general as represented by the state.
The inexorable propensity to over-expansion and congestion pervades the commercial fisheries wherever the specified conditions of open access and common property in resources exist. It is sufficiently powerful to nullify alike the effects of a rise in product prices and those of a fall in production costs, e.g. as the result of a technological breakthrough. Consequently, mature fisheries everywhere are susceptible to recurrent crises, characterized by widespread economic distress, e.g. capital losses and declining incomes, dramatically illustrative of what has come to be known as “The Tragedy of the Commons”.
Disaster is liable to fall with particular severity on the small-scale segment of the fisheries. In some countries, engagement in small-scale fishing may be an occupation of last resort and be combined in complementary fashion with a variety of other occupations. Furthermore, under open-access conditions, the dynamics of entry and exit in this segment are notably asymmetic: entry is relatively easy and exit may be quite difficult. Impediments to withdrawal include (a) difficulty in the liquidation of assets from a declining fishery, (b) obligations to buyers and lenders (chronic indebtedness), (c) the cost of retraining and resettlement, (d) attachment to a native life-style, (e) isolation from and a lack of knowledge of and/or preparation for alternative employment, and (f) absence of an attractive or any opportunity for relocation and reemployment. As a result of all that, over-crowding with its attendent evils, e.g. general impoverishment, is especially acute in small-scale fisheries. In times of crises, then, incomes may quickly fall and remain below the opportunity level.
A concomitant baleful consequence of open access to the use of a common property is endangerment of the fishery resources involved. Fishing enterprises are led, because of the fiercely competitive forces impinging upon them, to circumvent and subvert measures designed to protect or conserve resource stocks. Pressure is brought to bear on regulating authorities to remove or relax controls, e.g. to open seasons prematurely, to extend seasons and catch quotas, to permit entry to nursery areas, to withdraw or modify gear regulations, i.e. those relating to lengths of line, size of hooks, mesh-sizes in nets, etc., or to enfeeble the application of such regulations and so on and on. Collectively, fishing enterprises have an all-important stake in the health of the natural resources on which their existence depends. Individually, however, they are compelled to behave in utter disregard of this vital concern.
4 This is true despite benefits of other types that society is alleged to obtain from the mere existence of a fishery or fisheries, e.g. employment and an abundant supply of fish protein at favourable prices (“consumer's surplus”). Under the assumed conditions, the waste of capital and labour resources in the fisheries implies that production generally (including food production) and consequently consumers' surplus are less than, and employment is no greater than, they otherwise would be.
5 Opportunity cost is defined as the most favourable price that can be commanded by a factor of production; it thus tends to become the lowest cost at which that factor can be obtained (purchased) by an entrepreneur.
6 Under restricted-entry regulation, unless the resource rent accruing to the privileged enterprises is appropriated by management authority, the process of “capital stuffing”, as it is called, may extend to investment in luxury and ostentation as well as in advanced technology.
The fundamental divergence between individual and collective interests is the underlying source of much inter-group conflict in the commercial fisheries. Such conflicts, e.g. so-called “gear conflicts”, represent probably the most intrasigent problems confronting fishery management. The term embraces conflicts among a variety of economic groups, e.g. between vessel-owners and crews (over shares in proceeds), between enterprises which use small-scale and those which use large-scale technology to exploit the same stocks at different points (inshore and offshore, respectively) in the biological cycle, between different regional groups that depend on the same market (where the supply from one may depress the price obtainable by another) and between domestic fleets and fleets from foreign countries. All are ultimately attributable (a) to the fact that, at a mature stage of development, the primary industry's capacity to produce far exceeds the capacity of available resources to sustain production, and (b) to the not unrelated fact that fishing as traditionally managed resembles a “zero-sum” game, i.e. a gain for one enterprise or group of enterprises implies an equal loss for another enterprise or other enterprises.
An unhappy outcome of this discord is that governmental authority, under pressure to reconcile the contending groups and protect them from one another, frequently is enticed into encasing the industry in a minutely specific and increasingly complex web of regulations. This is calculated, not only to frustrate efficient utilization of the natural resource, but to create strongly vested interests in the status quo. The latter effect has been described as a tendency toward profound inertia in the fisheries, i.e. participants, having adapted to the existing regulatory regime, tend to view with suspicion and to resist any proposal for change. The opposition thereby engendered is not infrequently a major obstacle to innovation in fishery regulation.
These, the secondary and tertiary divisions of the commercial fisheries, are not always separable. Where distances from points of landings to centres of consumption are short and, as often in tradition-oriented communities, consumers prefer to obtain undressed or minimally dressed fish, the processing phase may be by-passed more or less completely. To the extent that processing does take place, it is performed by fishermen themselves or by vendors at dockside or at central marketplaces. Generally speaking, an advanced degree of processing and packaging, including the operations of filleting, freezing, curing, canning and the preparation of by-products, is required (a) when fish must be stored for long periods, (b) when market outlets are situated far inland, and (c) when products are exported to other countries.
The ncessity for prolonged storage reflects a disparity between market requirements and supply availability. This may be (a) inevitable, i.e. attributable to the catch being based on stock concentrations of short duration or to consumption being concentrated annually by social or religious custom, or (b) wholly or partly avoidable, i.e. attributable to disorganization and/or the use of inadequate technology in resource harvesting. Distance between landing ports and distribution centres in the hinterland is largely a function of the size of a country and the service of export markets becomes an objective when supply, in the production of which a country possesses a comparative advantage, substantially exceeds the absorptive capability of the domestic market.
Where the three divisions of harvesting, processing and marketing (trading) are well developed and clearly identifiable, there may still be a marked separation of the first from the latter two. The port market, despite its effectiveness frequently being blurred by (a) financial ties between fish buyers or middlemen and fishing enterprises, e.g. the powerful “fish mammy” institution in certain regions, and (b) types of vertical integration as already indicated, usually separates the primary from the other two divisions of the fisheries quite distinctly. There may be no such clear-cut distinction between the latter divisions. Instances of integration forward, from processing through wholesaling to retailing (in export as well as domestic markets) may occur and the larger firms in both divisions may be closely associated through interlocking arrangements of various kinds.
Economies of location and scale in fish processing are important but generalization on this aspect of the subject is difficult. Some of the relevant factors are site specific. Proximity to raw-material sources, i.e. the fishing grounds, unless a factory-ship operation is contemplated, is an obvious consideration. Other determinants of location include the availability of power and a trained labour force and the presence of transportation nodes (where shipment to distant markets is involved). Economies of scale in processing typically are realized at a fairly modest throughput capacity (possibly as little as 10,000 tons raw fish/year). Scale is more significant with reference to business organization (for financing, bulk purchasing of supplies and market service) and to the conduct of research and development. Hence the prevalence of the multi-plant firm (horizontal integration) in this division of fisheries.
As compared with “industrialized” fish harvesting i.e. harvesting by fleets using large-scale technology (in contrast with the artisanal type of operation), fish processing is relatively labour intensive (in some cases a ratio of 3:1 is observed). Generalization, again, could mislead. When throughput units (individual animals) are uniform in size or when size is irrelevant, as in reduction processes, mechanization is feasible. Otherwise, manual operations (for dressing, skinning, filleting and the like) are necessary. The choice as between the use of manpower and machines depends in general on relative costs (based on wages, rentals, permissible write-offs and so on).
While the fish-processing industry and by extension the fish trade are not subject directly to the pressures (stemming from open access and the use of common-property resources) that impinge on the primary industry, the processing division especially may not be immune to an analogous tendency toward over-expansion. Over-expansion and the associated over-crowding of the primary industry often lead to widespread dispersion of operations and an accompanying increase in the seasonal peakedness of fish landings, i.e. the raw material for the fish-processing industry. In adjusting to this trend, firms in the latter division are induced to install additional facilities (branch or “feeder” plants) and/or additional firms enter the industry. The resulting emergence of redundant processing capacity sometimes is fostered by governments, anxious to expand employment opportunities and maintain sales outlets for primary producers, through provision of incentives, e.g. construction subsidies, and (from a rational viewpoint) superfluous infrastructure.
Since the entry of additional firms in the processing division tends to fragment trading operations, the fish trade may be affected as well by the developments just described. Where the export of fishery products is important for the growth and success of the industry, fragmentation in trading activity may be a serious weakness. By encouraging intra-trade competition, for example, it reduces the trade's ability to compete with powerful rivals in export markets. In certain circumstances, e.g. a downturn in the business cycle, this debilitating tendency may be countered by mergers among private firms or, failing that, the government concerned may intervene to consolidate export-trading operations by regulation (licensing and the imposition of entry criteria) or by creation of a state trading agency.
To appreciate the ramifications of fishery management and development policy, an understanding of the interdependent relationships between the fisheries and other sectors of the economy is necessary. The commercial fisheries interact with both factor and product markets, through backward and forward linkages, respectively. Factor markets are the source of inputs to the fisheries. Such inputs consist (a) of investment funds, for infrastructure, fishing craft and gear, plant and equipment and capital assets generally, (b) of working capital, to finance payrolls, product inventories and the like, (c) of labour time (the effort of individuals), and (d) of entrepreneurial talent and initiative (the integrating function).
The sources of investment funds for fishery development are the private financial institutions of a country and the state government. Because of the high degree of uncertainty attending the outcome of fishing operations and not infrequently, perhaps, ignorance on the part of the financial community of the particularities of fisheries, this sector sometimes is unattractive to private sources of venture or equity capital. Furthermore, since (a) fishing enterprises lack a property right in the resource stocks on which they depend, and (b) fishing craft often are highly specialized, i.e. have little value outside the fisheries, the security required by private banks for loans and advances often is difficult to provide. Small-scale fishing enterprises in particular, especially in parts of the developing world, are reported to be at a disadvantage in this regard and, in consequence, often are vulnerable to exploitation by “informal” suppliers of credit. Fragmentation and small-scale enterprise tend to cause similar problems for firms in the fish-processing industry and the fish trade.
For that reason, even in private-enterprise economies, one finds governments intervening to complement, supplement or replace private sources for the financing of business enterprise in the commercial fisheries. The programmes designed for these purposes take the form (a) of guarantees for the investment and lending activities of private institutions, (b) of special investment and loan funds, managed by state agencies, and (c) of subsidies of various kinds for fishing enterprises and small-scale business. There is a powerful tendency, unfortunately, for such programmes to become unnecessarily rich and to exacerbate the inherent leaning (already noticed) toward over-expansion in the primary fishing industry especially.
In addition to operational inputs, e.g. gear, fuel, bait, ice, salt, etc., which fishing enterprises are expected to provide from their own resources, there are certain capital inputs, fishing craft (vessels and boats) being the major item but also including engines and winches, for example, which are sometimes impracticable for barely viable enterprises to finance. These are the objects that attract subsidization. Grants, bounties and concessionary loans, as apparently facile means of compensating for capital-market imperfections, have a seductive appeal for administrations. Subsidies tend to get “built into” an industrial structure, however, and survival of the beneficiaries may become impossible without them. Extrication from programmes of this kind, therefore, is notoriously difficult and they tend both to distort investment in the fisheries and to be a perpetual burden on a country's taxpayers.
Because many components of fishery-related infrastructure produce collective goods, e.g. establishments for scientific research and for education and training and navigational support facilities and harbour works, governments assume responsibility for their provision almost everywhere. Some of the responsibility however, may be shared. A capability for research in product innovation and market development, for example, is largely a function of operational scale and is easily within the capacity of the larger private firms in the fisheries of some countries. Private companies may also have a role to play where training “on the job” is essential for the acquisition of certain skills in fishing and fish processing.
Excepting those areas where small-scale (artisanal) operations predominate and fishing craft are “homemade”, linkage with the shipbuilding and boatbuilding industry is probably the major backward linkage from the commercial fisheries. Fishing boats and vessels constantly are being repaired, upgraded and replaced. The useful life of even the larger, technologically sophisticated types of craft usually does not exceed 20 years. As the industry evolves, in the direction of greater specialization or in that of greater versatility (multipurpose fishing) as the case may be, new designs and technologies are introduced. Currently, there are trends toward (a) construction with fibreglass, ferro-concrete and aluminium - materials which have a longer life span, are less expensive to maintain and in some cases are lighter and more readily available than the traditional wood and steel, (b) selection of propulsion technology and propeller design for greater energy efficiency and manoeuvrability, and (c) optimal combination of craft size, horsepower and gear used, to facilitate diversified fishing and quality control.
Directly or through intermediaries, e.g. shipyards, shipchandlers and other supply houses, the commercial fisheries are linked to an impressive variety of producers of ancillary goods and services. Possibly as many as 3,000 species altogether are exploited in the world's fisheries, more than 100 in the national fisheries of each of several countries, and the capture and processing of so wide a variety of animals necessitates the devising of a comparable range of techniques and technologies. Some 250 categories of component and equipment may be used in the construction of fishing vessels, for example, and an even larger number of products are known to be consumed each year in fishing operations. Handling, processing and product storage involve equivalent requirements.
A selection of approximately 25 types of product, under five general classes, is shown in an appendix. The list is incomplete and is intended merely to indicate the scope and diversity of manufacturing, fabricating and service industries laid under contribution in the establishment and maintenance of modern commercial fisheries. The availability domestically of these supply sources is restricted largely to countries in an advanced stage of economic development. Most developing countries have to reply initially on imported supplies and/or the transfer of technology by means (a) of joint ventures with entities from technically advanced countries, or (b) of special arrangements, e.g. for aid programmes, with such countries.
Reliance on joint ventures for this purpose may not be always advantageous for the host country, since the interests of the two countries are not necessarily convergent. As formerly prevalent under international open-access conditions, the technologically more advanced fleet may enjoy an unfair advantage in competitive use of shared resources. An alternative arrangement, under which catchable surpluses are disposed of to foreign bidders would enable a coastal state to collect a maximal royalty for the use by other countries of its fishery resources. The proceeds might then be utilized as desired for the acquisition of technology, infrastructure and services to develop the domestic fisheries. The choice among the several alternatives would depend on policy-makers' comparative assessment of developmental prospects and associated costs.
At all events, through the linkages indicated above, the establishment of viable commercial fisheries creates important opportunities in the home market for the output of a range of supportive industries and services. Critical issues relating to economies of scale and the like are involved here, and realization of the opportunities referred to depends, among other things, on those issues being resolved.
In the evolvement of the commercial fisheries of any country, the role of product markets is a leading and decisive one. The initiation, adaptation and expansion of fishery production is constrained by opportunities for the sale of products that may be derived from resource stocks available to the country's fishing industry. Specification of products with respect to type, form and quality is established by market requirements - ultimately in accordance with the preferences of consumers served by the marketing system.
Fishery products fall into two broad categories, viz. food products and industrial products, i.e. fishmeal, oil, etc., the former of which is usually although not invariably the more important. Food products of the fisheries may be classified generically as follows:
Fresh or chilled, i.e. non-frozen (round, dressed, filleted, etc.)
Frozen (untreated, breaded, cooked, etc.)
Cured: smoked, salted, dried, etc.
Canned (plain and variously treated)
By-products: roe, pate, etc.
Market outlets are differentiated according to the class of product demanded - the class normally being differentiated in turn by fish species. Canned products have a relatively long shelf-life (several years), cured and frozen products an intermediate one (months), and fresh products one of a few days or even hours. As a rule, therefore, distant markets cannot be served effectively with fresh fish products excepting certain “luxury” products that can bear the cost of air-freight. The taste of consumers also may dictate the conditions, with reference to intrinsic quality, grading and workmanship, under which fish must be caught and the derived products prepared. If these conditions cannot be met, marketing opportunity is thereby forfeited. When marketability requires that fish be frozen, cured or canned, economies of scale in organization and in processing and trading operations come into play and the size of the product market or markets becomes a determinent of developmental potential and possibilities.
The demand for fishery products is determined in part by cultural history, i.e. it is based on an “acquired” taste, and, as most studies have shown, it tends to be inelastic as to price and income in the short term. To some extent, however, it appears also to be influenced (a) by fashion, e.g. dietary fads, and (b) by the price and availability of both complementary and competing food products. In the more affluent countries, where as much as two thirds of fish consumption is accounted for by the institutional (including hotel/restaurant) demand, as distinguished from the household demand, agregate demand sometimes responds to the rise and fall in general economic conditions. It is therefore, to be regarded as in some degree amenable to manipulative and expansionary effort by producers and traders.
To speak of a demand for fishery products as if they constituted a homogeneous mass is, of course, a serious oversimplification of reality. There exists in fact an almost infinite variety of such products, differentiated by species, processed form, mode of preparation and a host of other distinctions. Products range from virtually perfect interchangeability, e.g. certain (unlabled) canned products of the same species but of different origin, to absolute non-substitutability, e.g. as between food and industrial products. Consumer preferences and demand elasticities for specific products may exhibit a similar degree of heterogeneity within a country and a fortiori from one country or region to another.
The demand for industrial fish products is subject to special factors. That for fishmeal, for example, a component in animal feedstuffs, is affected by the price of alternative additives and responds to the ebb and flow in poultry and pork production. The demand for fish oils, which may be considered by-products of the reduction (meal-manufacturing) process, is affected in an analogous manner. It is generally beyond the reach of the fishing industry and/or the fish trade to influence the demand for these products.
