With negligible exceptions, as was explained earlier, fishery resources have been the common property of individual nations or of the world at large. The allocation of rights to the use of those resources by means of a market, therefore, has not been possible. In this situation, governments, acting unilaterally or in concert with other authorities, have been impelled to allocate access among rival claimants. Assuming that, in relation to the claims of other resource sectors, that of fisheries to a specific water body and/or the resources therein has been established, allocation is necessary first of all as between commercial and recreational (and possibly subsistence) uses.7 In the absence of a real or a simulated market mechanism, unfortunately, such allocation must be essentially arbitrary. The same is true of the second phase of access allocation, i.e. among individual users (enterprises and/or persons).
In the case of the commercial fisheries, the issues confronting management authorities include the following: 8
1. Should the objective of management be:
a) to maximize the number of persons employed in fisheries,
b) to maximize enterprise revenue, more particularly the earnings of participating fishermen
c) to maximize a surplus (rent) for resource owners, i.e. the state or citizenry, or
d) to achieve some desired amalgam of the foregoing?
7 This does not apply in every instance, of course, but only when anglers (and/or subsistence fishermen) compete with commercial fishermen for access to and use of a specific stock or stock complex.
8 Subsidiary issues might relate to maximization of protein production or of export earnings.
2. How should existing and potential conflicts of interest among groups sharing a stock or stocks in common be resolved, e.g. as between groups using immobile equipment and those enjoying relative mobility and as between domestic and foreign fleets?
3. How should the mix of inshore or small-scale, nearshore or intermediate-range and offshore or distant-water fishing craft be optimized, with reference to:
a) harvesting costs of different types and sizes of craft,
b) processors' requirements for volume and stability of throughput, and
c) market preferences as to variety and quality or product?
4. What is the preferred pattern of fleet ownership, i.e. independent fishing enterprises vs. vertically integrated (fishing, processing and trading) companies, and how should it be brought about?
5. As competing users of finite natural resources, how may fishing enterprises be induced to conserve society's other resources, i.e. minimize inputs of capital and labour in the fisheries?
In general, it appears that fishery managers have adopted 1.(a) as their over-riding objective, have concentrated on the resolution of issue 2. and have tended to overlook or slight the remaining issues. Management thus has striven to accomplish ultimately incompatible purposes. On the one hand, conservation of resource stocks has been accepted as obligatory. At the same time, maximization of employment in the fisheries requires that open access to stock exploitation be maintained and, as suggested earlier, this can lead to ruinous pressure on fishery resources. Consequently, regulation of the commercial fisheries inevitably becomes direct regulation of inputs to fishing, i.e. regulation of the productive efficiency of participating enterprises. This takes the form of restrictions on the type and size of fishing craft admitted, specification of the kind and quantity of gear used and control of operating seasons and grounds fished.
In application, the approach is often frustrating and sometimes self-defeating. While perfect substitutability of inputs is rare, adaptation on a considerable scale usually is feasible even in the short run: curtailment of permissible vessel size may be offset by an increase in power installed, extra crew may compensate for limitation of power and so on. As a result, fishery regulation tends to degenerate into a process of continuous makeshift design. Regulatory measures become more and more complex and ever more costly to enforce, world without end! The anomalous nature of fishery regulation, as it has evolved over time, may be shown by applying operational rules typical of the commercial fisheries to another resource industry (see Appendix B).
The eventual futility of management in this mode has been obscured by an apparent absence of alternatives, given the constraints on policy imposed by legal precept, political directive and institutional or administrative structure. There is now, however, a growing perception (a) that the conventional approach leads to intolerable enforcement costs, (b) that, because of circumvention and emasculation, existing measures constantly verge on instability and collapse, and (c) that fisheries as traditionally managed are terribly wasteful of social resources.
Fishery management's reason for being emerges in the course of fisheries maturation. Unexploited resource stocks, excepting those serving as forage for exploited stocks, are of little concern to anyone. The need for conservational action originates in the stock mortality resulting from non-natural predation, i.e. commercial (and/or recreational) exploitation. Since fishing activity is generated by an opportunity to market the products derivable from accessible fishery resources, commercial exploitation of such resources is initiated by a demand for those products and is intensified by growth in that demand. In this sense, product markets are the “prime mover” in fishery development and the ultimate source of management problems.
That is not to say that, although guided and constrained by marketing opportunity, productive activity in the fisheries is a passive reaction to such opportunity. In the early stages of development particularly, when issues of economic viability are to the fore, market penetration, diversification and expansion are likely to be the primary concern of policy makers in government as well as in the industry and trade involved. Priority is then placed on demand analysis and, on the basis of that analysis, on ensuring effective and efficient service of market requirements with respect to form and quality of product and to continuity and stability of supply. The relevant issues are as follows:
1. What is the industrial structure and type of business organization, in fish processing and marketing, best suited to developmental needs?
2. To what extent and in what respects do the existing structure and organization fall short of requirements?
3. What are the social and institutional (including legal and jurisdictional) constraints on desirable restructuring and reorganization?
4. How might such constraints be removed and would some or all disappear through time?
5. Are there managerial deficiencies and deficiencies in factor markets that constrain development in desirable directions and, if so, what should be done to eliminate these?
6. What if any role is to be assigned to foreign firms and agencies in this aspect of fishery development?
7. For the assessment of comparative benefits in the latter respect, should the short-term perspective be distinguished from that of the long term?
8. What powers, e.g. in the form of grants of access rights, are at the disposal of the national government in question to influence trends in the international marketplace and how should such powers be exercised?
In so far as the “management” of demand is feasible, it involves matching and if possible bettering the service to customers that is obtainable from rival suppliers. Besides a capability, on the part of the trade and industry, to provide a satisfactory product and adequate supply, as already indicated, this requires sufficient flexibility and resilience to respond effectively to commands of the market for product innovation, adaptation and promotion. Hence the importance of industrial structures referred to above.
At this juncture, it is necessary to stress that, although supply management in the commercial fisheries (in the sense in which it is practised by some agricultural industries) is not totally inconceivable, it is difficult in the extreme. Demand in product markets, as signalled by price, is quite specific with reference to species and quantities. Any congruence or consistency, however, between harvesting requirements so dictated and balanced exploitation of resource stocks in an ecosystem would be wholly fortuitous. This is a major source of the “by-catch” and “discards” problem that so often undo the effectiveness of fishery regulation.
To some extent, supply for the product market may be augmented and/or stabilized by drawing on production from aquaculture. Stocks of certain species of Cyprinidae, Mollusca, Salmonidae and many others are capable of enhancement for that purpose. Since supply from this source is more readily manageable than that from wild stocks, as regards quantity and time harvested, the crop may be combined with other commercial supplies in a complementary manner.
Broadly speaking, there are two types of aquaculture, viz. fish farming (pond and enclosure culture) and fish ranching (in which the crop grows to maturity at sea). In both cases, special provisions of an institutional and legal nature are required to promote development. Fish farmers must be able to obtain the right to a water column protected from pollution, trespassers and other infringements. Fish ranchers must be assured of exclusive right to their crop, which means that harvesting by others, e.g. on the return migration, must be prohibited. In some instances, e.g. where stocks intermingle, the latter prohibition might be infeasible because of excessive interference with fishing operations based on wild stocks.
While compatibility between harvesting preferences (reflecting those of the market) and optimal resource use is not realizable, in the short term at least, certain second-best objectives are attainable and merit pursuit. Action may be taken, for example (a) to inject an assessment of potential marketability into the setting of annual TACs (total allowable catches) - on the ground that, if the derived products are unsaleable and must be inventoried (stored), it were better to leave the fish in the water, and (b) to restructure the primary industry so as to eliminate or minimize, (i) seasonal peaks (gluts) in supply, and (ii) the incidence of unacceptable, e.g. undersized or low-quality, fish in commercial landings.
Action along these lines, one must point out, may create a political dilemma for the management authority. Especially when the industry is heavily dependent on export markets, competitive efficiency is likely to be imperative for successful development and continued viability. When the domestic market mainly is to be served, the issue is less critical but far from trivial: inflated cost in the supply of food would imply a transfer of income from consumers to producers which might be undesirable from a policy viewpoint. If efficiency in product supply were to be maximized, however, the presence or persistence in the industry of economically inefficient units, i.e. fishing enterprises, processing firms and trading companies (and components of these), could not be tolerated.
Removal of such units and operations, on the other hand, whether it were my means of administrative fiat or as a result of the harsh impact of market forces, may well prove to be exceedingly difficult. Certain elements or features of inefficiency, e.g. seasonal “bunching” of landings (raw-material supply), wide variation in quantity landed (season to season), insufficient variety in the species mix and inconsistent quality of product, are associated in many instances with excessive dependence for supply on an outmoded or inadequate technology, i.e. the relatively immobile fishing craft and gear typical of small-scale or artisanal enterprises. At the same time, as the commercial fisheries have evolved in some countries, small-scale fishing enterprises and the “superstructure” erected on their operations, i.e. fish processing and/or the fish-trading business, constitute the sole or major economic base of whole communities and regions. In such circumstances, a rapid or drastic restructuring of the industry and trade is out of the question - often, because of unacceptable social or cultural repercussions, any action whatever in the direction of “rationalization” is virtually impossible.
Although grim, a situation of this kind is not absolutely hopeless. For one thing, that small-scale implies inefficiency is by no means a universal rule: in certain conditions, small-scale technology and operations are optimal economically - the important point is to determine when and where this is so. Moreover, as the basis of a traditional culture or way of life, small-scale fishing and the communities it supports sometimes enshrine social values that are not necessarily inferior to the technocratic ones espoused by the more bemused of economic planners and developers. Rather than being an insufferable frustration of progress, then, the necessity of postponing the achievement of some policy objectives and rescheduling programmes of modernization may in fact present an opportunity for a reassessment of objectives and for a redirection of planning toward more realistic approaches to fishery development.
As we have seen, the conventional mode of fishery management leads to the following lamentable state of affairs:
1. More or less universal congestion and an accompanying waste of social resources, particularly in the primary fishing industry, i.e. inputs of these resources exceeding (often grossly exceeding) the quantity necessary, with given technology, for economically efficient harvesting operations.
2. Consequent pressure on the natural-resource base, a pressure that verges constantly on the uncontrollable.
3. Compulsive intervention by government to conserve the resource base and to mitigate the inevitable effects of over-crowding and waste in the primary fisheries, i.e. recurrent crises and impoverishment of participants.
As explained, governmental intervention takes the form of measures (a) to control output (quantity harvested), e.g. catch quotas and seasonal or ground closures, usually on a discrete-stock basis, (b) to regulate input (fishing power), e.g. restrictions on type and size of fishing craft, on type and effectiveness of fishing gear and finally on numbers of entrants, and (c) to provide financial support for enterprises and individuals in crisis or adversely affected by regulation, e.g. construction and price subsidies, income supplements and the like. The regulatory measures mentioned tend to become progressively more restrictive and more complex in application. Those relating to surveillance and enforcement, especially, become intolerably costly - beyond the horizon for poorer countries. Supportive measures also, income supplementation in particular, are subject to increasing cost. Moreover, to use an extravagant under-statement, the results are unsatisfactory for nearly everyone concerned. Is there no alternative?
In answer to that question, it is necessary first to specify the fishery-management problem as precisely as possible. The salient characteristics of the resource base, i.e. volatility, non-tangibility and interactivity, are well known. In consequence, the sources of uncertainty confronting users of fishery resources are unusual in extent and variety. All business activity is subject to uncertainty, however, and in this respect the fisheries differ from other resource-based industries only in degree. It is well known also that, with minor exceptions, fishery resources are common property and it is generally supposed that this institutional peculiarity is inherent in the nature of such resources. Yet society has contrived to create forms of private property in land and mineral resources, e.g. hydrocarbons, which share a number of features with fishery resources. Furthermore, resources that were once common property, e.g. grazing lands and the open range, are so no longer.
Herein lies the crux of the management problem. The socially wasteful propensity in fisheries and proneness to crises are directly attributable to competition among fishing enterprises under conditions of open access to the use of natural resources, to which none can lay claim and for the husbandry of which none are individually responsible. This is not a recent insight. More than a hundred years ago a fisheries official in Canada wrote as follows:
“… the occupancy of salmon stands under formal title enables the occupiers to economize both their own capital and labour and the public property in salmon. Where the fishery is carried on … under such incitements to excess as are created by contentious rivalry and the prospect of mere temporary gain, it is extremely difficult to control fishing operations within reasonable bounds. But, on the other hand, where occupants can rely on the permanence of their holdings, and enjoy in successive years the benefit of their own moderation in each preceding season, the Department finds very little difficulty in controlling the pursuit.” 9
Supposing it were possible to dismiss precedent and, without prejudice, to manage fisheries for the optimal benefit of society and the nation: how might this be done rationally? To begin with, it would not be necessary to take common property in fishery resources as given. This point might be disputed by legal experts, e.g. the common law of England and certain other countries does not recognize ownership of wild animals in their natural state. Nevertheless, as has been indicated, a number of coastal states now act as if fishery resources within their respective economic zones were national property. Conversion from property of the state to property of citizens, individual and corporate, may not be an unreasonable extension of the process.
9 Canadian Sessional Papers, 1874
Assuming a decision were made to proceed on that understanding, it then would be expedient to institute a regime of “stinted” quantitative rights, i.e. property or quasi-property rights, for fishing enterprises and/or enterprise groups. Such rights probably would take the form of entitlements to the use of a national or state property, i.e. usufructuary rights (in contrast with rights of ownership).
The concept is simple enough. Putting it into practice, one may expect, would be an intricate and protracted process. In relatively rare instances, usufructuary rights might pertain directly to resource stocks: leaseholds for aquacultural enterprises are an obvious case in point. Conceivably, also, the right to harvest (and husband) a discrete stock of a sedentary species might be granted to an adjacent producers' organization, e.g. a co-operative or municipal corporation, provided the group were small and cohesive enough to avoid a resurgence of destructive competition internally. Territorial rights of use systems, which exist or have existed traditionally in some areas, would typify this approach and might be applicable to the management of small-scale fisheries in certain situations.
In general, however, usufructuary rights would apply to shares in a seasonal or annual harvest, i.e. in an explicit or implicit TAC. Presumably, for reasons of security for the usufructuaries, the shares would be expressed in absolute rather than proportional terms, i.e. tonnes, not percentages. A share might be defined as the minimal quantity required to ensure viability (or a break-even operation?) for the smallest-scale enterprise in a particular fishery - multiple shares being available for those of larger scale.
For the allocation of the rights under consideration, the preferred method would be a public auction. This would enable the government, on behalf of society as resource owner, to extract the rent yielded by the nation's fishery resources. The rights would be obtainable on a long-term, possibly even a perpetual, basis. To accommodate expansion of enterprises, as well as to facilitate entry and exit, these rights would be transferable. That is, subject to such rules and conditions as may be desirable, e.g. to prevent monopolization, a private market in usufructuary fishing rights would be allowed to develop.
In terms of economic efficiency, a management regime of this kind is capable (a), by inducing enterprise proprietors (with security of tenure) to produce at lowest cost, of bringing about an optimal combination of inputs of production factors in the fish-harvesting industry, and (b), consequently, of maximizing returns to those factors (including resource-rent generation). In addition, by shifting the decision-making responsibility for factor combination to private fishing enterprises, a major part of the regulatory activity of government would be eliminated.
What has been outlined in the preceding section is an ideal approach to fishery management, based on the “simplifying” assumption that policy makers and administrators have a free hand to direct the development of commercial fisheries under their care. In the real world, most fisheries will have matured long since and exhibit all the unfortunate features described earlier, e.g. over-capitalization, congestion, conflict among vested interests, etc. The transformation contemplated is comparable with the enclosure of common lands in Europe during the 18th century and the fencing of the open range in North America during the latter part of the last century. As an institutional innovation, it may be expected to encounter similar resistance. The conventional approach to fishery management is deeply entrenched in the administrative and research establishments of government almost everywhere. Resistence to change is likely to be encountered in industry circles also: better the devil you know than the devil you don't know! Additional barriers include:
1. Social inertia, deriving (a) from the dispersion and isolation of fishing communities (a result in some areas of moves to escape the effects of over-crowding in open access fisheries), and (b) from the associated dependence on fishing as a complementary or supplementary source of livelihood in a mixed economy.
2. Political sensitivity to the disruptive potential of interference in things as they are, the existing distribution of income in particular.
With reference to implementation, there are also practical problems to be overcome. Initially, one may assume, all enterprises already in the fisheries would have to be accommodated. Since enterprise shares in the aggregate could not exceed the relevant TAC, the suggested allocative procedure might not be admissible, i.e. assignment to the smallest-scale enterprise in a fishery of a share sufficiently large to permit at least break-even operation and multiples of that share to larger enterprises in adequate relation to their individual scale. On the other hand, to divide up a projected TAC among elegible enterprises proportionately in accordance with historic shares during a base period might deny a majority the possibility of viable operation. The preferable procedure, i.e. distribution of rights to shares on the basis of competitive bidding (open where relevant to recreational and foreign users of the resource stocks in question), while advocable for a new fishery, would not be acceptable for mature fisheries. This as well as free trading in shares, following the intial distribution, is likely to be opposed because of the advantage that would be felt to accrue to the larger and more powerful and aggressive enterprises (usually a minority).
Furthermore, until adjustment to the new regime were complete, irregularity and instability in resource availability would present formidable difficulties for allocation. These would be least significant in the case of fisheries based on stocks of sedentary and demersal species. The season-to-season variation in the catch from such stocks is relatively small overall. This does not hold for intra-regional areas, however, and only the sufficiently mobile fleet units would be assured of securing the catch to which they had obtained (by grant or purchase) a right.
The difficulties increase when stocks of pelagic species are involved: inter-seasonal variability tends to be substantially greater for these. If certain cephalopod species are included, seasonal availability with respect to locational incidence especially becomes largely unpredictable. To some extent, as in the case of demersal stocks, the problem might be resolved through mobility and the use of an effective technology. In most instances, however, it probably would be necessary to base share rights on stock availabilities averaged over some appropriate period, e.g. five years.
A similar arrangement might be workable in the case of fisheries based on stocks of certain anadromous species. The basis for allocation in this instance relates not to a total allowable catch but to a total necessary “escapement”, i.e. the proportion of a run; descrete or confluent, required to perpetuate the stock(s) involved. Annual resource availability is thus an aggregate of residual quantities, subject to the effect of variation in life-cycle phases and so on. Consequently, the amplitude of year-to-year fluctuation in catches may be very great.
There are two further complications. The first arises from the intermingling and interdependence of resource stocks. As stated in an earlier section, harmony between product-market requirements and best use of resource stocks in an ecological setting would be quite exceptional. Because of this, by-catches, i.e. the incidental (and allegedly incidental) capture of certain species in directed fishing operations for other species, are often a troublesome problem for management. Its avoidance under a regime of usufructuary rights might require that temporal and spatial conditions be attached to the operations of licenced enterprises. Even this might be ineffective in the case of fisheries based on the composite stocks found in tropical regions.
A second, not entirely unassociated, complication pertains to the typical operational patterns of fishing enterprises. Many, perhaps a majority of these enterprises in some areas engage in diversified, multipurpose fishing operations. Under such circumstances, there might be a tendency to bunch landings early in a particular seasonal fishery to permit movement to a complementary fishery, with resultant diseconomies elsewhere in the system, i.e. in the processing and trading divisions. Enterprises would be especially inclined to behave in this way if only one or a few of the fisheries engaged in were under a usufructuary-rights programme, which is likely to be the usual situation in the early years of such a regime.
To counter the tendency and distribute fishing activity evenly over time, a seasonal breakdown of quota shares and/or differential pricing (equalizing expected marginal returns) might occasionally be feasible. Whether a regime of usufructuary rights, perpetual or long-term, would impel fishing enterprises toward greater specialization or toward further diversification is indeterminate at present. Evidence from fisheries under TAC control and closed entry, but without enterprise quotas or shares, is conflicting and perhaps irrelevant.
The introduction of a programme of this kind, again, would present some difficulties. In view of the preceding considerations, this would have to be by way of experiment or trial and error. To maximize the probability of success, a discrete fishery prosecuted exclusively by a homogeneous fleet of specialized fishing enterprises should be selected for this purpose - if such can be found. An additional prerequisite to the introduction of a usufructuary-rights programme, since the rights would be conferred on fishing enterprises, is that there be some formal “institutionalization” of these enterprises: either incorporation or a suitable form of registration. This might be quite impracticable for some time to come in the small-scale fisheries of developing countries.
Finally, despite the advantages of a usufructuary-rights programme for the fishing enterprises involved, problems of monitoring, surveillance and enforcement are likely to be serious - at least until the industry had adapted fully to such a regime and its advantages were clearly evident and appreciated by all participants. The inducement to cheat, i.e. to under-report catches, would be powerful. To ensure compliance with the programme, therefore, (a) accurate catch data in real time would be required by fishery-management authorities, (b) the industrial/trade structure would have to provide reliable channels of communication, and (c) the administration would have to be able, i.e. possess the capacity (an enforcement staff, a patrol fleet, a system of legal sanctions, etc.), to impose adherence to regulations. Some of these requirements, e.g. a sophisticated and comprehensive statistical service for the primary fisheries, may verge on the unimaginable for many developing countries (and not a few developed ones) in the foreseeable future.
Regretfully one must conclude that regimes of usufructuary rights in fisheries, notwithstanding their great promise, may have limited prospects of application for the present. Where examples of such a regime have or once had a traditional basis, however, these should be fostered or revived and other groups encouraged toward emulation.
We must turn, then, to alternative approaches. Among these, the second best might be a public (governmental) or private corporation vested with a monopoly of fish harvesting on a regional or national basis - the choice as between public and private monopolies depending (a) on the socio-political orientation of government, and (b) on contextual practicalities. In either case, whether harvesting operations were carried out directly, i.e. by the corporations' own fleet, or through contracting with independent vessel owners, such an entity, as in effect sole owner of the resource(s) involved, could be expected (a) to husband those resources carefully, and (b) to economize in the use of inputs to their harvest. It would be capable, that is, of optimizing the mix of benefits (employment, return on investment, service to consumers and state revenue) obtainable from fishery-resource utilization.
Where a programme of stinted usufructuary-rights for independent fishing enterprises is inapplicable or temporarily infeasible and a public or private monopoly is unacceptable (for reasons of policy or practicability), a “fallback” position might be found in a system of entry control in the primary fishing industry.10 Under such a system, which may be considered a prelude to or first approximation of a usufructuary-rights programme, rights to fish (subject to specific restrictions) would be conveyed to a limited number of enterprises by means of a licence or permit. Besides the restrictions (on time, location and gear) conventionally applied in open-access fisheries, entry-control regulations may restrict the number, size and power of fishing craft and the number of persons engaged.
10 An alternative approach to fishery rationalization that has been advocated by several writers, i.e. that of a levy or tax on fish landings, is rejected here as being generally impracticable. To be completely effective in blocking incentives to expansion, virtually all profits from fishing would have to be extracted. This would entail (a) varying the levy according to the stocks and areas fished, and (b) adjusting it continuously in accordance with changes in resource availability, in costs and in price. In addition to being thus extraordinarily difficult to administer, such a tax, if imposed on the marginally profitable enterprises typical of mature fisheries, also would result in widespread dislocation and hardship for fishermen.
A serious flaw in this type of programme is that, in principle although it permits control of inputs and thereby of costs in fishing, it has failed to do so in practice. Since the compulsion among admitted enterprises to compete for access to resource use is not removed or even reduced, fleet capacity continues to expand and potential surpluses continue to be dissipated. This comes about because, as stated before, restrictions on one or a few dimensions of an enterprise are soon countered by increment(s) in another or others. An attempt to restrict all inputs simultaneously, while theoretically possible, would (a) give rise to horrendous problems of regulation design and enforcement, and (b) thwart technological progress in fish harvesting.
The outlook, however, may not be as unrelievedly gloomy as the foregoing review of options might suggest. An ideal may be reached by stages. Under an entry-control programme, for example, although the opportunities available to enterprise owners for sabotage are great, they are certainly not infinite. For a particular period and given applicable technology, the waste and loss of benefits caused by excessive inputs in a fish harvest may be quite tolerable. A provisional approach of this kind might be acceptable especially if entry control bought time, as it were, and provided a foundation on which to institute when opportune a programme of usufructuary-rights or comparable quasi-property rights in fishery resources for the enterprises involved.
As a step in that direction, it would be desirable that licences or entry permits be made freely transferable. Entry control implies the need for a mechanism or procedure by which entry privileges may be allocated, i.e. original entrants selected, enabled to leave when ready and replaced by new entrants. In the absence of transferability, (a) allocation is subject to more or less arbitrary bureaucratic or political decision, and (b) vessel owners, who might wish to retire from fishing, would be unable to realize any portion of the capitalized value of their licences and might incur a loss on the sale of their equipment as well. 11 Special provisions, e.g. to avert speculation in privileged fishing rights by “absentee” investors, to prevent the concentration of rights by participants (monopolization) and to allow preference for the kin of participants in the transfer of rights, may be accommodated if necessary in the design of entry-control programmes.
To afford some security of tenure for the owners of licenced enterprises and facilitate administrative planning, entry permits or licences, instead of being granted annually, should be made available for an extended term, e.g. one related to normal periods for investment depreciation.
Where the accrual of resource rent or of capital gains for participants in an entry-controlled fishery is a matter of concern, methods for the diversion of these to the state are to be found in the form (a) of licence fees, and (b) of landings charges or royalties. Licence fees have the virtue of administrative simplicity but, because they must be levied as a flat rate for particular types and sizes of enterprise (or of fishing craft as proxy), they are unrelated to resource use and enterprise revenue and, therefore, are highly inequitable in impact. A royalty on primary production (fish caught and landed), on the other hand, besides being related directly to the quantity of fishery resources used by an enterprise, reduces the enterprise's financial ability to increase fishing power and thus contribute to the waste of other social resources. 12
11 A prohibition on transfers may be circumvented, incidentally, by legal strategems, clandestine deals and the like, the effect of which is to raise the cost of transactions.
12 In theory, a royalty could be set at a rate sufficiently high to extract the resource rent in total, but rarely if ever would that be a rational (or feasible) objective of management policy.
The subject of the present discourse, apart from some account being taken of administrative expedience or feasibility, is the political economy of fisheries. Many details of policy-making are specific to individual countries, regions of countries and fisheries indigenous thereto. Those cannot be anticipated in a general treatment of this kind. It may be said, nonetheless, that fishery policy involves (a) all the laws, institutional arrangements, regulations and procedures governing the management and use of fishery resources, and (b) governmental activities that affect the fisheries indirectly, e.g. those relating to taxation, industrial and trade development and foreign affairs.
In formulating policy, the first requirement is to ensure the preservation and conservation of the natural-resource base. The additional requirements, more or less in order of priority, are: (a) economic efficiency in the utilization of fishery resources, (b) an equitable distribution of benefits from fishery development, and (c) simplicity and flexibility in fishery regulation. Protection of the resource base, the habitat and the stocks therein, obviously is a sine qua non for policy-makers: everything else is contingent on that. Efficiency in resource utilization, including the processing and marketing as well as the harvesting phases of utilization, is also an obvious desideratum in so far as it is achievable. It implies maximization of the net value, measured in monetary units, generated by the commercial fisheries, 13 i.e. production at lowest possible cost.
Unalloyed policy formulation is seldom if ever attainable. Requirements clash and often one must be sacrificed in whole or in part for another. The pure criterion of economic efficiency, for example, sometimes must be compromised in deference to social necessity, e.g. the creation of employment opportunity or the maintenance of fishery-based communities. This is unobjectionable, provided the “sacrifice” is explicitly evaluated. In this connection, it may be mentioned that, when there is little if any alternative employment, the opportunity cost of labour is negligible. Employment in fishing, representing the utilization of an idle resource, entails no sacrifice on the part of society. Fishermen's earnings in such a situation are a social benefit, not a cost of production.
Innovation and change are ineluctable, in the fisheries as in other spheres of activity. The impact of change, e.g. shifts and alteration in the economic, institutional or regulatory environment, may be especially traumatic in fisheries, however, because of inter-group tensions stemming from the struggle for shares of a common resource. Policy initiatives add to those tensions: despite beneficial long-term results for all, there are bound to be adverse effects for some in the short term. In the formulation of policy, therefore, account must be taken of prevailing concepts of equity and fairness (a) in the granting of fishing rights and access allocation, (b) in the design of measures impinging on particular interest groups, and (c) in the distribution of the economic gains or benefits generated by the fisheries. Equity concepts tend to be difficult to reconcile both one with another and with the efficiency criterion. Between optional courses of action with a similar distributional outcome, however, the one costing least in terms of sacrificed efficiency should be chosen.
From the fact that continuous change is inevitable and that the direction of change in the future is unpredictable, it follows that policy-making and planning must be comparably adaptive and versatile. To fail in this respect is to invite the certainty of being overtaken by events. To be successful, policy also must be adaptable to effective and efficient administration. Regulatory programmes, for example, that impose the fewest and least complex requirements on the public are to be preferred. Certain forms of regulation are more critically dependent on detailed data or on close control than others. Those that prescribe behaviour that is contrary to the private economic interests of the persons and communities subject to their impact may be unenforceable. In the absence of alternative employment opportunity, the displacement of fishermen or fishing enterprises, which would have counter-equity implications, is a probable instance.
13 This applies likewise, in countries where subsistence and/or recreational fisheries (angling) are significant, to the values generated by these forms of resource use, which are real enough although not readily measurable.
The fundamental objective of fishery-management policy has been identified as being the optimization of benefits to society from the use of fishery resources. Insight into the problem of maximizing the aggregate value yielded by fisheries may be obtained from appropriate analytical models but definitive direction for the distribution of the aggregate cannot be expected from the same source. As with externalities, issues of equity and distribution, e.g. the allocation of access among competing producers and the reduction of income disparities, originate in the mores and social standards and the political philosophy dominant in society. The form which such issues take, consequently, varies from one historical period to another. Their resolution is the responsibility of policy makers as politicians.
It is also widely recognized that resource management should apply somehow to an ecosystem, i.e. the complex of fish stocks in interaction among themselves and with their aquatic environment, in contrast with the traditional discrete-stock approach. Progress in knowledge, however, has not yet reached the point where this approach can be taken: makeshifts are still the rule. Social-benefit optimization implies ecosystem management, it has been suggested, and undoubtedly there is some interrelationship. Management of fishery-resource use in an ecological context presumably would require a properly balanced exploitation of the species stocks involved. As was pointed out earlier, however, exploitation rates normally are generated by product markets which transmit through the pricing mechanism intensive demands for some species and rejection of others. In other words, price signals do not ensure that selectivity in commercial fishing conforms with effective ecosystem management.
This variety of market failure is virtually inevitable in the short term. The longer-term outcome in a dynamic context, is uncertain: through a process of price adjustment (second-stage effects) and product substitution, an ultimate reconciliation of demand and a “rational” distribution of harvesting rates over species in an ecosystem is theoretically possible on the basis of static analysis. Meanwhile, management authority is obliged to intervene to redress the imperfections of the market. Such intervention takes various forms, e.g. a differential tax on landings and/or price subsidization, market-development programmes and the like. Adjustmental measures sometimes entail costs which have to be taken into account in evaluating the benefits to be obtained from the use of fishery resources.
Economic and social benefits and associated costs, as has been described, are realized within a complex system that embraces (a) the natural resource base, (b) the primary, secondary and tertiary components of the fishery sector, (c) product markets, i.e. those that determine the character and quantity of fishery output, and (d) factor markets, i.e. those that allocate capital and labour inputs to the fisheries. It is usually the case, unfortunately, that, for relevant policy analysis in this field, policy makers and their advisors are provided with a data base that is at best inadequate and more probably one that suffers from glaring deficiencies. Examples include measurements of price and income elasticities for specific markets, precise information on harvesting and processing costs and the multiplier effects (through linkages with other sectors of the economy) of alternative forms and directions of fishery development. In consequence, fishery managers often are forced to operate in an informational vacuum. A listing of major gaps in information, however, may serve to indicate for policy-makers the location of priorities for research.
For net social-benefit optimization, as argued above, it is necessary (among other things) that fishing enterprises be induced to minimize production costs. This is the crux of fishery management in the 1980's. The management approach advocated here, that of the institution of quasi-property or usufructuary rights for fishing enterprises, regardless of the generality or facility of its application, represents an ultimate ideal. For the present, no doubt, in most countries, second-best approaches must serve until more extensive experience has been obtained in the practical application of property-rights programmes in fisheries. Among existing approaches, that of closed entry, i.e. the licensing of a limited number of fishing enterprises (selected on an acceptable basis of eligibility) for participation in a specific fishery, offers most promise of progress in the desired direction.
Ancillary policy issues relate (a) to the initial allocation of access rights, e.g. by fiat or auction, (b) to the length and security of tenure for participants, (c) to bases or methods, e.g. transactions in an open market, for the transfer of rights between participants and from these to new entrants, and (d) to the trade-offs among employment generation, income enhancement and rent acquisition. At the heart of these issues lies society's choice of income distribution which, in turn, depends on social/cultural value systems. With reference to the potential accrual of a resource rent, for example, the state's alternatives are:
1. To appropriate it, by tax-back or other means, on behalf of the nation (as resource owner);
2. To permit its being captured by the privileged participants in the fishery; or
3. To allow it to be dissipated by opening the fishery to the entry of additional enterprises, i.e. to create new opportunity for investment and employment in the fishery or fisheries under regulation.
To be sure, some combination of these options is possible. The state might appropriate a portion only of the actual rent available, e.g. sufficient to defray the cost of governmental programmes for fishery management and development, and permit the balance to be distributed according to one or another of the remaining alternatives. Option 2 probably would not be publicly acceptable in most societies. 14 Adoption of Option 3 is legitimate provided that the trade-off between employment for the many and income enhancement for the relatively few is adequately evaluated and that the following conditions are met: (a) growth in employment is assigned the highest priority in policy planning, (b) the fisheries do not become an employer of last resort, which would lead to recurrence of open-access evils and thus end in futility, and (c) the resulting congestion on the fishing grounds and pressure on resource stocks is not so intense as to preclude effective management for conservation purposes.
From all this it should be clear that the scope of fishery-management policy is broad indeed. Not only is fishery regulation in itself complex and widely ramifying in effect, trends and events in other areas of national policy, e.g. those affecting industry and trade in general, the law and finance and social welfare, may have a significant impact on the commercial fisheries. Recognition of that fact is of the utmost importance in policy formulation or planning for fishery management and development. Limitation of space precludes extended treatment of policy planning in the present paper, but an outline of some of the major themes of planning may be pertinent and useful at this point.
First of all, policy making and planning are not a function of specialists or “planners” - the latter perform an analytic and advisory role (a supportive or staff function) in the planning process but the key role is that of the decision maker, i.e. the line manager or executive. The latter function extends from the minister or political head of a department or agency downward through subordinate levels of executive responsibility. Planning, as well as the execution of policy, actually is an activity of institutions rather than of individuals.
Secondly, comprehensive planning begins at the normative phase, i.e. with the setting of goals for policy makers. Goals, representing the aspirations or aims of a whole society, may be articulated only by legitimate political leadership. They differ, therefore, from country to country and through time. Societal goals as understood here usually manifest the existence of a “grand design” and tend to be given vague or broadly inclusive expression. Consequently, for the use of policy makers in a specific field such as fisheries, they must be interpreted in operational terms. Even in these terms, no necessary ordering of priorities is disclosed. Goals frequently are in conflict one with another and some may be mutually exclusive. The pursuit of a particular goal thus imposes a constraint on the achievement of other goals and trade-offs are inescapable.
14 Nevertheless, this is what tends to occur in the case of closed-entry programmes. Such programmes usually are introduced in conditions, i.e. over-capitalization and general privation, that do not permit recovery of a (non-existent) surplus by state authorities. Under entry control, however, surpluses quickly emerge and, in the interest of equitable income distribution, should be extracted in large part for the public, e.g. by means of a royalty on primary production. Otherwise the (capitalized) value of resource rent tends to be realized in total by the first generation of entrants.
The next step in the planning process, therefore, is the identification of goal priorities or preferred policy objectives. At this point, coordination of planning with policy makers in the several relevant fields enumerated above, for the purpose of integrating plans over a sufficiently wide front, becomes of the greatest importance and urgency. In this way the activities of a number of diverse agencies are made reciprocally reinforcive, the public is spared the spectacle of government departments working at cross purposes and idiotic mistakes, like the introduction of programmes that destroy the effect of other programmes, e.g. financial incentives for industrial expansion that nullify measures to protect endangered fish stocks, are avoided.
Various policy objectives, relating to resource use and allocation, industrial and trade development and the creation of social/cultural benefits, may be formulated for fishery management. To a greater extent even than societal goals, however, such objectives are bound to differ among countries. In occasional instances, objectives of more or less universal validity may be identified, e.g. “Security of the base for productive fisheries within the complex of demands on the aquatic environment”, “Elimination of wastage at all stages of production”, and “Minimization of the socially and culturally disruptive impact of industrial change”. In other instances, specific objectives of relevance elsewhere may not be pertinent to a particular nation's needs or to the stage of development of its fisheries.
A point that should be made is that there may be important cases of trade-off between short-term and long-term objectives. In the immediate future, for example, the creation of additional employment opportunity may be of primary concern, although trade expansion is the more distant target. Measures directed toward realization of the former objective, by building into the system certain types of high-cost production, could forestall achievement of the latter. It is incumbent on policy makers, through sound policy analysis and integration of fishery plans with those for other sectors, to prevent the occurrence of such an eventuality. To the utmost extent possible, pre-emption of options for the future should not be permitted.
Policy objectives having been chosen and priorities identified, strategies must be devised to ensure - or, rather, to maximize the probability of - the objectives being reached within the selected time frame. This is the strategic phase of the planning process. Strategies provide the rules, directions or guidelines required for competent tactical planning, i.e. the design of programmes, which, of course, are the end-products of the process. Neglect of strategic planning is a common fault of bureaucracies. There is an almost invincible tendency on the part of administrators to do more of what has been done before. The effect is (a) to maintain or repeat programmes that are no longer pertinent, and may in fact be prejudicial, to the needs of the real world, and (b) to divert scarce talent and funding from the design and delivery of programmes that are really needed. Scrupulous adherence to strategic directives is recommended for the cure of this bureaucratic malady.
Since strategies follow from policy objectives, each fishery-management authority must devise their own. Guidelines are required for programming over the whole range of fishery-management issues, including (a) research, i.e. the establishment and maintenance of an adequate knowledge base, (b) resource-use regulation, (c) industrial and trade development, and (d) advancement of social and cultural ends. Guidelines relevant to research programming, for example, might include those specifying the nature of the regulatory regime projected, intensions respecting product development and so on. The nature of knowledge requirements would flow from those specifications.
Although programmes must be specific as to place and time, as well as purpose, certain general criteria for programme design may be prescribed. Regulations to control the operation of the primary fishing industry (fishing enterprises collectively), for example, should (a) induce the industry to operate at minimal average cost of production, (b) encourage progress in efficiency, e.g. through technological innovation, (c) command the support of a concensus among those affected, and (d) be adaptable to changing conditions 15 and, if necessary, to gradual implementation. Further, in designing the regulations, the distributional effects, associated costs and other political constraints must be taken into account.
15 Because of deficient knowledge of species interactions and the like, this is said to be a particularly important consideration in the case of fisheries based on the multi-species stocks typical of the tropics.
Criteria of similar generality may be prescribed for the design of developmental programmes. As a rule, these programmes should be directed toward the creation of an economic and institutional environment conducive to the growth and efficient performance of the fishing industry (primary and secondary) and of the fish trade. Appropriate examples are programmes (a) to correct imperfections in factor markets, (b) to provide needed infrastructure, (c) to assist in the establishment of an effective marketing organization, and (d) to supply research and extension services. Programme design should also aim at maximal cost-effectiveness, i.e. of available alternatives, that which achieves the object at lowest cost should be chosen. Finally, in view of the insidious tendency of subsidization (a) to pervert private investment decisions, and (b) to prolong dependence on public funding, a subsidy to promote fishery development should be granted only when there is reasonable assurance that the assistance will become unnecessary and can be phased out.
In devising strategies and designing programmes in accordance with strategic directives, heed should be taken of the fact that (in market economies) policy making and planning is a dual process. That is to say, decisions as to investment and employment in the fisheries are also being made by private individuals, cooperatives, firms and corporations. It is of the greatest importance to these entities that the policy environment in which they operate, i.e. the framework of regulations, taxation rules and other relevant programmes, be reasonably stable and predictable. At the same time, as indicated earlier, operational efficiency may require that rules and regulations be applied with some flexibility. Rigid application that failed to allow (a) for the values, motivations and attitudes of those affected, and/or (b) for the distributional implications of fishery management and development programmes, could be disastrous. It has been pointed out, for example, that the introduction of an advanced technology is likely to come to nothing if, for cultural reasons or out of necessity, boat owners are averse to risk-taking.
It is very important too that governmental decision-making be seen to be responsive to reality. Policy formulation and planning properly is an iterative process in which planners and decision-makers interact with client groups, i.e. in the present context, fishery-oriented industry and trade organizations or their representatives and other interested circles. The mechanisms and instrumentalities by means of which this takes place vary with the historical experience, the political philosophy and the conventional practice of different countries. In parliamentary democracies, the national legislature is the principal channel of client input, with special-interest organizations (“pressure groups” and “lobbies”), playing a subsidiary role. The last-mentioned sources of input may be augmented by the establishment of formal and ad hoc cosultative or advisory bodies (councils, committees, etc.).
Of equal importance is incorporation in the policy-making process of effective “feedback” from recipients of fishery-management and development programmes and assurance of prompt and expeditious adaptation of planning to change in the internal and external conditions of the fisheries. Besides sensitivity and responsiveness on the part of decision makers, this requires (a) that administrators and officials be held strictly accountable to the political leadership for programme results, and (b) that a comparatively elaborate quantitative (statistical) and qualitative intelligence service, for programme-impact evaluation and policy analysis, be put in place - a requirement that developing countries may find difficult to meet.
