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4.1 Biological, economic and financial impacts of fixed and variable TACs
4.2 Conclusions

4.1 Biological, economic and financial impacts of fixed and variable TACs

4.1.1 The effects of variable recruitment and biomass changes
4.1.2 Risk assessment issues of fixed and variable quotas and effects on long-term catches

In real fishery situations, recruitment to the fishery will vary over time both in response to environmental influences and as a result of exploitation. The extent of variation will depend on the species in question while the effect of such year to year variation on the biomass of the exploited stock will depend on the exploitation rate and the extent to which older year classes contribute to the fishery.

The question of the most appropriate strategy for a quota managed fishery under a scenario of variable recruitment was examined by constructing a stochastic model in which recruitment to a fishery with five exploited year classes was allowed to vary randomly (recruitment was normally distributed with a mean of 1 and standard deviation of 1) over an eight year period (Morgan 1997). The effects of fixed and variable quotas were then examined at various levels of TAC with the variable quota being adjusted each ‘year’ in response to changes in stock biomass as a result of recruitment variation.

4.1.1 The effects of variable recruitment and biomass changes

As might be expected, the fishing effort required to take a fixed quota varied in accordance with the variability in recruitment. However, most importantly, the extent of such variation (measured as the coefficient of variation of effort) increased rapidly with increasing TAC (measured as the % of MSY) before declining as the MSY level was approached (Figure 11). This decline was partly a result of the inability to take these relatively high quotas in years when recruitment was low. At fixed TACs set at a level less than MSY, quota levels were reached in almost all years although the year to year variation in fishing effort needed to take the quota was high.

4.1.2 Risk assessment issues of fixed and variable quotas and effects on long-term catches

Under a scenario of variable recruitment, it might be expected that adjusting the TAC each year in response to recruitment (and stock biomass) levels would produce not only higher average catches but would also generate higher economic rents from the fishery. Within the modelling structure described above, variable TAC increased total catches over the 8 year period by 2.1% at MSY when compared with a fixed TAC. At TAC levels less than about 0.8 of the long run MSY, variable TACs actually produced a smaller total catch than fixed TACs (Table 1). Also, under a variable quota management system, the variation in fishing effort needed to take the TAC was significantly larger than the equivalent fixed quota scenario (Figure 11) except at levels a little less than MSY where variability of effort for fixed quotas was higher.

Table 1

Catches over an 8-year period under fixed and variable quota management systems with variable recruitment













0.75 (MEY)






1.0 (MSY)



Figure 11: Variation in year to year fishing effort required to take fixed and variable quotas. Note that under variable quotas, the variation in fishing effort to take the TAC will be generally be greater than with fixed quotas.

The discounted economic rent generated under a fixed and variable quota system was also examined using the above modelling technique and using a discount rate of 7%. Figure 12 shows that in general, fixed quotas produce higher levels of economic rent from the fishery at all levels of TAC except at a point a little less than MSY (in this case, at MEY) where variable quotas produced higher economic rent levels. This difference is related to the increased variability of fishing effort required to take a variable quota which results in uncertainty over long-term licence valuations and hence a long term reduction in discounted rent generated.

Figure 12: Changes in discounted economic rent generated under fixed and variable quotas at different levels of TAC. In most instances (apart from near MSY) fixed TACs or quotas usually generate more economic rent than variable TACs. This is partly due to the larger variation in fishing effort (and hence costs) required to take a variable TAC than a fixed TAC.

In summary, variable TACs or quotas, adjusted in accordance with random variations in recruitment result in significantly higher levels of year to year variation in fishing effort required to take the TAC than is the case with fixed TACs. Also, because the TAC or quota is adjusted each year in response to stock biomass, the total long term catch under a variable TAC system is generally less than with a fixed TAC management system. This implies that variable TACs or quotas may offer more protection to the stock which may be important if the TACs are set near MSY or if stock abundance is low. In most instances, the long term economic rent generated from the modelled fishery is greater under fixed TAC management than with variable TACs or quotas except at points approaching MSY. This greater long term economic rent which is generated under a fixed TAC management regime results in the value of access rights to such a fishery being higher than what they would be under a variable TAC management structure. As indicated above, this difference in access right value is partly related to the greater stability in fishing effort required to take a fixed TAC than what there is under a variable TAC management scheme.

Since the modelling techniques used in this analysis were generalised production and cost functions which are applicable to many fisheries, it is believed that these results have general application. However, similar analyses need to be undertaken for specific fisheries as part of the information requirements for effective quota management and for analysis of the implications of such management.

4.2 Conclusions

The decision of whether to manage by fixed or variable TACs or quotas is therefore very much a trade off between the extent of stock (particularly breeding stock) protection that is considered necessary and the objectives of maximising economic rent and minimising effort variability. If TACs are set at levels near MSY, the biological risk of, and costs associated with, a stock decline may be significant and hence management by variable TACs will usually be the preferred option. However, if TACs are set at lower levels (particularly near MEY), fixed quotas will usually produce greater long term economic rents while minimising the variability in fishing effort required to take the quota.

Examples of fisheries which have a regular annual system of adjusting the TAC in response to stock biomass or recruitment levels are surprisingly rare although there are numerous examples of fisheries, particularly in New Zealand, Australia and Canada where TACs have been adjusted in response to either a crises in the fishery or as a one-off adjustment. For example, the TAC of a Sardinops fishery in Western Australia was reduced from 5500t to 3700t in 1995 in response two years of poor recruitment of juveniles with a computer simulation model of the fishery being used to guide the TAC adjustment process (Fletcher 1995).

Another example of a fishery that adjusts the total allowable catch in response to stock abundance is the fishery for pilchards (Sardinops spp.) in South Australia. In this fishery the quota was increased from 3 500t in 1997 to approximately 11 000t in 1998. In order to avoid the problems of over-capacity in this fishery, the additonal quota was allocated through a tender process for one year only. The allocation of the Total Allowable Catch has therefore become a two-tiered process with a core quota and a variable additional quota which is auctioned or tendered to the highest bidder.

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