Fishery management is the pursuit of certain objectives through the direct or indirect control of effective fishing effort or some of its components 3. For example, a minimum mesh size may be instituted and enforced for the purpose of regulating the size of fish at fish capture and increasing the productivity of the resource; or, a system of licences may be introduced in order to control entry into the fishery for the purpose of maximizing the economic returns from the fishery. Fishery development, on the other hand, is the expansion of effective effort through a set of assistance programmes again for the purpose of attaining certain objectives. For example, the fishing range of canoes may be expanded through subsidized motorization for the purpose of exploiting underutilized resources and increasing fish supplies and fishermen's incomes. Fishery development may be defined more broadly to include, in addition to the expansion of fishing effort, improvement in post-harvest technology, marketing and transportation of fishery products as well as the provision of infrastructure and other related facilities. 4
Because of its “control” feature, fishery management is thought to be required once a fishery becomes “overexploited”, while fishery development is thought to apply while a fishery is still “under-exploited” 5. This need not be so. One need not wait for overfishing to occur before management measures are taken. Overfishing is better avoided by judicious management measures taken along with development. Similarly, the need for development is not confined to underexploited fisheries. As management of overexploited fisheries sooner or later involves the regulation of fishing effort, development, fishery-related or otherwise, is needed to absorb the surplus labour and capital. In many developing countries, enforcement of management regulations is virtually impossible without development of sufficiently attractive employment alternatives elsewhere. Moreover, further “development” of an already “overexploited” fishery 6 may not be as unwarranted as it sounds if the purpose is a temporary solution of otherwise intractable social problems.
3 The indirect control of effort includes the case in which a management authority does not get involved in the control of effort but simply creates the appropriate environment for its control by the fishermen themselves (e.g. community property rights).
4 Of course, as we will see in section 4.3 below, any form of fishery development which makes fishing more profitable will lead (indirectly) to an expansion of effort unless it is combined with fisheries management. In the sequel we focus on fishery management and development narrowly defined, broadening our focus as we go along to include these other aspects of fishery development. Finally, in section 4.3 we focus on assistance programmes for fishery development broadly defined.
5 The definitions of the terms “overexploitation” and “underexploitation” depend essentially on the objective being pursued for the fishery; they are loosely used here but their meaning in the sequel is clear from the context.
These interrelations notwithstanding, the priority in overexploited fisheries is for management and in underexploited fisheries for development. Thus, the general objective of both management and development is the attainment of the “optimum” rate of exploitation of the fishery. How this optimum is defined depends, of course, on the specific objectives of the policy-makers. If the policy objective is maximum fish production then the optimum rate of exploitation is defined by the maximum sustainable yield (MSY), that is, the maximum catch that can be obtained on a sustained basis. If the actual catch is less than the MSY because of insufficient fishing effort the fishery is said to be “biologically” underexploited and further development is possible, while if the catch is less than MSY because of excess effort the fishery is “biologically” overexploited and management is called for 7. Thus, it is not sufficient to know the MSY and to compare it with the actual catch; we need also to know the fishing effort required to obtain MSY and to compare it with actual effort.
If, on the other hand, the policy objective is to maximize the economic benefit to the national economy from the fishery, the optimum rate of exploitation is defined by the maximum economic yield (MEY), that is, the maximum sustainable surplus of revenues over fishing costs. Alternatively, MEY may be thought of as a modification of MSY to take into account the value of the fish caught and the cost of catching it. The fishery is said to be underexploited in the economic sense and to require further development if the actual catch falls short of MEY due to insufficient effort. Analogously,the fishery is said to be overexploited in the economic sense and to call for management if the actual catch falls short of MEY due to excess fishing effort.
In cases where social considerations, such as the improvement of socio-economic conditions of small-scale fishermen, generation of employment opportunities and improvement of income distribution matter, the optimum rate of exploitation is defined by a third concept, the maximum social yield (MScY) 8. This is the level of catch and corresponding effort which provides the best possible solution to social problems given the policy objectives and all possible alternatives. Alternatively, the MScY may be thought of as modification of the MEY to account for non-purely-efficiency aspects, such as poverty and distribution. Introduction of social considerations may limit the speed with which management measures are introduced, or it may justify a more intensive rate of fishing than is justified on purely economic grounds. Thus, levels of effort below the one corresponding to MScY may be termed socio-economic underexploitation, while levels of effort above it, socio-economic overexploitation. Obviously, this latter concept, MScY, is the one most applicable to the case of small-scale fisheries in which socio-economic considerations often override both biological and strictly economic concerns.
However, estimation of MScY cannot be made independently of MSY and MEY. As biological aspects enter the economic model, which more appropriately may be termed “bio-economic”, so do both biological and economic parameters enter the determination of MScY, which may be more appropriately termed a “bio-socio-economic” model. Thus, before attempting to construct such a model for determining MScY, it is necessary to review the basic biological and economic aspects of fishery management and corresponding models.
6 “Overexploited” in the narrow sense that the catch (or profit) is less than the maximum possible due to excess fishing effort.
7 This is not to say that MSY is a biological concept. There is nothing “biological” about it except that it corresponds to the maximum natural growth of the stock and it has been suggested by early fishery biologists as a possible objective of fishery management. MSY is, in some sense, an economic concept without, however, full cognizance of all economic factors as it ignores the costs of fishing and the value of the catch.
8 MScY as the objective of fisheries management takes full cognizance of the likely conflict between income and employment objectives (more employment may lead to overfishing and a reduction of the aggregate fishing income). Employment objectives may be weighted more heavily than income objectives only when there are no other effective means of redistributing income to lower-income groups.
While fisheries biology is a science in itself, the fishery administrator needs only to be familiar with some basic biological concepts and relationships of direct relevance to fisheries development and management. In the simplest case of a single-species, single-gear fishery, the relevant relationship is the one between “sustainable catch” and “fishing effort”. Sustainable catch is the quantity of fish in terms of weight of biomass which can theoretically be caught year after year without a change in the intensity of fishing. Fishery managers are interested in the sustainable catch rather than any temporary changes in the catch because fish, being a renewable resource, is capable of being harvested on a sustainable yield basis. Fishing effort, on the other hand, is a composite index of all inputs employed for the purpose of realizing this catch. Fishing effort is understood in effective rather than nominal terms, that is, in terms of its effect on the fish stock. (Often fisheries biologists use the term fishing mortality to denote effective fishing effort.) We are interested in effort because it is the main parameter under the control of man.
The relationship between sustainable catch and effort is a basic production relationship relating output (catch) to inputs (effort) but, unlike other production relationships, there is no direct relationship between output and fishing effort. This is due to the fact that fishing effort, while the only input supplied by man, is in fact combined with a natural resource, the fish stock, to “produce” catch. Were the fish stock a fixed factor, just like land, we would expect output to continue increasing (though at a decreasing rate) in response to increases in effort except at the extreme point of overcrowding when output might actually decline. However, the fish stock being a living resource, rather than a fixed factor, reacts to changes in fishing effort in a manner which complicates the catch-effort relationship. Hence, to understand this relationship, some basic biological features of the resource need to be considered.
A basic biological concept is the "net natural growth" of the fish stock which is the net increase in the biomass of the fish population between two points in time. Net natural growth (henceforth “growth” for brevity) is equal to recruitment (new young fish entering the stock) plus individual growth of fish already in the stock minus natural mortality. The growth of the stock is an important concept because it is the amount of fish which can be caught on a sustainable basis without affecting the size of the stock. Hence, it is important to know what determines the growth rate of a given fish stock.
One theory, known as the Schaefer Growth Model, postulates that the growth of a stock of fish depends on the size of the stock 9. At a small stock size, the growth is small but it increases as the stock becomes larger until a point of maximum growth is reached beyond which growth declines with further increases in the stock due to limits placed by environmental factors (food, space, etc.). This implies an inverted U-shape curve as shown in Figure 1, with the same growth obtainable at two different stock sizes: at a small stock size growing relatively fast and at a large stock size growing relatively slowly.
Fishing effort enters the model as a form of fishing mortality in addition to natural mortality. The larger the fishing effort, the higher the fishing mortality and the lower the (equilibrium) size of the stock. That is, there is an inverse or negative relationship between fishing effort and the size of the standing stocks: as effort expands the fish stock shrinks as shown in Figure 2.
By combining this negative relationship between equilibrium stock and fishing effort (Figure 2) on the one hand, and the inverted U-shape relationship between net natural growth and stock (Figure 1) on the other, we obtain a U-shape relationship between growth and fishing effort (Figure 3). Too little effort means too large stock and hence too little growth (because of overcrowding); more effort means smaller stock (less crowding) and hence higher growth; but, too much effort results in too little stock and hence, again, in too little growth. Since the sustainable catch exactly equals growth at the corresponding level of effort, the sustainable catch-effort relationship is identical to the growth-effort relationship. Thus, the same sustainable catch can be caught with little effort operating on a large stock or with a lot of effort operating on a smaller stock.
9 More complicated models such as Beverton and Holt (1957) and Ricker (1958) consider the age structure of the stock and the effect of fishing on recruitment. These models require detailed biological data on individual growth rates, recruitment, natural mortality, size at first capture, etc., which in many cases are not readily available. These models have been discussed in detail elsewhere (Gulland, 1969; FAO, 1978; Pauly, 1979 and 1980). Here, we review the simple Schaefer (1954) model with extensions, where possible, to account for factors such as the effect of fishing on recruitment, the age structure and the species composition of the stocks.
Figure 1 Growth - stock relationship
Figure 2 Stock - effort relationship
Figure 3 Growth-effort and catch-effort relationships
The fishery administrator needs to keep the inverted U-shape of this curve in mind because it describes the long-term response of catch to changes in fishing effort which is the main variable under his/her control: in the early stages of the exploitation of a fishery, expansion of effort brings about more or less proportional increases in catch; but the more effort expands the smaller the growth in catches until a point, known as maximum sustainable yield (MSY), is reached beyond which additional effort reduces, rather than raises, the sustainable catch. This is not to imply that it is not possible to catch temporarily more fish by increasing effort beyond the level corresponding to MSY; however, such increases in catch cannot be sustained over the long-run, at least not by the fishery as a whole.
Temporary increases in catch following an expansion in fishing effort should not mislead the fisheries administrator into believing that there is still potential for further intensification of fishing. Only when the increase in catch is shown to be sustainable over time is there scope for expansion and, yet, it should be noted that even in an underexploited fishery, as fishing is intensified, additional effort brings forth smaller and smaller increases in catch as MSY is approached.
The diminishing efficiency of effort as exploitation increases can be seen more clearly by expressing catch per unit of effort (cpue) as a function of effort. This is done by dividing the vertical coordinate (catch) of the sustainable yield curve by its horizontal coordinate (effort) to obtain cpue which is then plotted against effort as shown in Figure 4. The resulting curve, known as the catch rate curve, steadily drops as fishing effort increases, reflecting the reduction in the biomass of the stock as fishing is intensified. As we have indicated earlier, at moderate levels of effort this reduction in the biomass might enhance rather than damage the stock's capacity to reproduce, because of the resource's intrinsic compensatory mechanisms. However, when fishing is intensified beyond the MSY the compensatory mechanisms fail to maintain the productivity of the resource. The progressive decline in sustainable yield beyond MSY has two causes: firstly, if the size at first capture and more generally the age structure of catches is not modified, the yield per recruit tends to decline beyond a certain level of fishing effort; in addition, average recruitment into the stock, and so the sustainable yield produced by that recruitment, tend also to decline when the parental stock is reduced by heavy fishing to very low levels.
Both the sustainable yield curve and the catch rate curve (Figure 4) were drawn on the assumption of a given age at first capture or a given age structure of the catch. They can be shifted up or down by manipulating the average age at first capture through a variety of means such as changes in the mesh size or in the type of gear, or spatial and seasonal distribution of effort (see Figure 5). For example, reductions of trawl mesh size up to a point may increase catch above certain levels of effort and raise the sustainable yield curve, but too fine nets have the opposite result. In open-access fisheries, where the race for the limited resource often leads to very fine mesh sizes as well as fishing in spawning and nursery areas and seasons, there is an appreciable scope for raising the yield curves through raising the age at first capture. From Figure 5 it can be seen that the higher the fishing effort is, the higher is the gain in sustainable yield to be accrued from an increase in mesh size; in other words, the justification for mesh size regulation increases as fishing effort goes up. Thus, a second parameter which the fishery administrator can control and use to increase the yield from a fishery is the average age of fish at first capture. (As we will see later, this may make a dual contribution to the improvement of the total value of the catch: higher volume of catch and higher unit value for fish of larger size.)
To sum up, a fishery administrator may achieve the maximum possible catch from a fishery on a sustainable basis by simultaneously adjusting the level of fishing effort which corresponds to the highest point on the chosen sustainable yield curve and the age at first capture which puts the fishery on the highest possible sustainable yield curve (Figure 5). It must also be kept in mind that, after a change in either the level of fishing effort or in the age at first capture, sufficient time (depending on the lifespan of the species concerned) must be allowed for the age structure of the stock to stabilize at the new conditions of exploitation.
Figure 4 Relationship between catch per unit of effort and effort
Figure 5 Sustainable yield curves (SYC) under alternative ages at first capture (tc) and the adjustment of fishing effort and age at first capture for maximizing the sustainable yield from a given stock
The sustainable yield and catch rate curves can become operational, that is, useable in a real-world fishery, by plotting catch and cpue figures from the fishery against the corresponding effort figures. It is often easier and more accurate to do this by specifying a mathematical form for these curves and estimating its parameters through statistical techniques such as linear regression. As an example, we have plotted catch and effort data from the demersal fishery of the Gulf of Thailand. We found that the maximum sustainable yield of demersal fish in the Gulf of Thailand is 550,000 metric tons and the corresponding effort about 6 million standard fishing hours 10. More importantly, we have obtained the intercept and the slope of the yield curve which give, respectively, an index of the virgin biomass and the rate at which this biomass index and the corresponding catch rate have declined with the expansion of effort to the present level. The fisheries administrator can use these values to assess the level of the exploitation of the fishery (whether under- or overexploited) and to predict the change in the cpue and in the sustainable yield in response to a change in effort, keeping in mind that such extrapolations will cease to be valued, as soon as the exploitation pattern, as reflected by the age structure of catches, is appreciably modified.
The accuracy of any long-term forecasts would also depend on the stability of the environment and on the length and accuracy of the time-series on catch and effort used in estimating the catch-effort relationship. In the theoretical model considered above, we have implicitly assumed that environmental conditions remain unchanged or, at most, they are subject to random fluctuations which average out into the discussed (average) yield curves. However, when non-random or evolutionary changes in the environmental conditions, whether favourable or otherwise to the stocks under consideration, are taking place, it is important that predictions consider also the present state of the environment, its likely effects on the strength of the year classes making up the stock to be exploited in the forthcoming years and, as far as possible, its possible evolution. Moreover, some of the year-to-year variability in the size of the stocks and the corresponding sustainable yields may be neither random nor evolutionary but may arise from the intensification of fishing and the consequent reduction in the number of age classes in the stock which, in turn, reduces the in-built stability of the stock (Troadec, 1982). Finally, the natural variability of the stocks depends on their nature and location as well as on their interaction with the biotic and abiotic environment. The stocks of coastal pelagic species show generally more inter-annual variability than do demersal stocks. Tropical stocks consist of generally short-life species but their spawning seasons generally extend over longer periods, thus counterbalancing the stock variability resulting from the fewer number of broods of which they are made; they interact more with their biotic environment (other stocks) than with their abiotic environment (temperature, etc.) which is normally less variable than in the temperate waters (Pauly, 1979). This means that a stock or a species may show considerable annual variability because of (changes in) the intensity of fishing on other stocks or species as well as in its own rate of fishing rather than because of changes in its (abiotic) environment.
The natural variability of the stocks as well as the possible decline in recruitment and the increase in variability associated with intensive fishing suggest that, on purely biological considerations, even MSY may be “too risky” an objective for development or management.
For simplicity of exposition we have been assuming, thus far, a homogeneous fishery in the sense of a single-species stock fished by a single group of fishermen using one type of gear. However, the tropical fisheries which account for the bulk of small-scale fisheries around the world are distinctly characterized by multispecies stocks exploited by distinct groups of fishermen using a variety of fishing gear. These factors certainly complicate the picture and make more difficult the control of fishing effort and the selection of the “optimum” age at first capture, but the basic inverted U-shape sustainable yield curve 11 still provides a good approximation of the response of the multispecies resource accessible to a community of artisanal fishermen to the expansion of the effort it can deploy.
10 We have standardized effort using the Research Vessel of the Thai Department of Fisheries as a base gear.
11 Perhaps, with its top flat portion stretched far out before it turns down. In certain cases the curve may well be asymptotic in most of its relevant range, implying little or no increase (or decrease) in catch with expansion of effort beyond a certain point.
Let us, first, consider the case of a single-species fishery exploited by two different groups of fishermen: (a) a group of small-scale fishermen operating inshore (including lagoons and estuaries) with rather primitive gear such as stationary traps, and (b) a group of trawlers fishing offshore for the same species, all part of the same stock. This means that the two groups of fishermen concentrate on catching fish of different ages since the spawning and/or nursery areas are often situated in lagoons and estuaries from where “maturing” fish migrate to the offshore area. Under these circumstances it might be possible to increase the overall catch (and its unit value) by increasing the age at first capture through redistribution of effort in favour of the offshore fishery. It could even be that maximization of sustainable catch from the stock, taken as a whole, calls for the complete elimination of the coastal small-scale fishery. However, before the fishery administrator decides the fate of the coastal fishery, he/she needs to consider a number of other factors such as the higher cost of catching the same fish when dispersed offshore, the relative social costs of the inputs (capital, labour, fuel, etc.) used by the two fisheries and the alternative employment opportunities available for any displaced coastal fishermen. (These considerations suggest the importance of economic and social aspects of fisheries management to be discussed in sections 2.2 and 2.3 below.) The situation is analogous in the case of two groups of fishermen fishing the same stock in different seasons of the year or with different fishing technologies: a fisheries administrator can always manipulate the technology or the seasonal and spatial distribution of effort as well as its total amount in order to maximize catch but socio-economic considerations may temper his desire to do so.
Another complication raised by tropical fisheries is the multispecies composition of the stocks and the consequent technological and biological interactions within the fishery. A technological interaction is said to exist when non-discriminatory gear is applied to a stock comprised of several species in which case it is impossible to allocate the overall fishing effort between the constituent species of the stock. A biological interaction, on the other hand, involves either competition between two or more species for the same food or a predator/prey relationship. In certain fisheries, such as those for tunas, the number of species may be small and they may have similar characteristics of productivity, commercial value, and likelihood of capture. However, this is rarely the case in tropical demersal fisheries where it is not uncommon to find more than one or two hundred species in the same haul ranging from almost worthless trashfish to high-value crustaceans. Perhaps more importantly, there is a complex network of competition and predation relationships and differential likelihood of capture and risk of extinction among constituent species subjected to the same overall fishing effort. When a given overall level and distribution of effort over the constituent species are maintained for a sufficiently long time, a certain species composition, age structure, and aggregate biomass are established and reflected in the catch. Changes in fishing intensity alter this ecological configuration of ages, species and overall biomass. It is quite possible that the relative abundance of some species increases while others altogether fall to low levels in the catch. However, total biological extinction is quite unlikely for most species, notably owing to the existence of natural reserves (e.g., untrawlable grounds).
Under these circumstances, trying to maximize sustainable catch becomes a complicated if not a totally elusive task. In fact, it is quite possible that, as the fishery expands, there will be a sequential collapse of certain species and “emergence” of new species, e.g., cephalopods, which had failed to achieve a dominant status in the presence of more efficient and better adapted species. An example is found in Pauly (1979) who reports that flat fishes (Heterosomata) in the Gulf of Thailand had been kept in check by small prey fishes (Leiognathidea) despite the former's superior reproductive capacity. It was only when the small prey fishes were reduced by heavy fishing and by their predators that the flat fishes found an opportunity to proliferate. This hypothesis, if correct, may help explain why the catches from the Gulf of Thailand keep increasing despite the expansion of effort to levels that would imply heavy overfishing in the light of earlier estimates of MSY.
Selection of a single optimum size at first capture is operationally difficult since what is optimum size for one species is likely to be too small or too large for some other species. In a multispecies fishery, a compromise mesh size will be required; certain species will be overexploited and others underexploited depending on the fishing technology and the biological relationships between species. The latter could be particularly complex because competition and predation affect differently the various age groups of different species (e.g., large predators can prey on small pelagic species which prey on the eggs of the former). These complexities obscure the effect of intensive fishing of one species on the abundance of another species.
The task of the administrator in a multispecies fishery is further complicated by the fact that the species composition, the age structure, and the total biomass of the stock do not vary only in response to man-made stresses (changes in fishing intensity), but also as a result of natural stresses. Ecosystems are subject to both short-term fluctuations and evolutionary changes in their composition and geographical distribution, as the experience with several coastal pelagic fisheries has shown (see Troadec, 1982). Given our limited knowledge of the structure and behaviour of ecosystems and of their reactions to man-made and natural stresses as well as the need for simple, easily understood and implementable management schemes, fishery administrators should start with a pragmatic and practical approach to management:
(a) Observe the average species and age composition of the catch and monitor its response to changes in the intensity and pattern of fishing (overall increase in fishing effort, modification of mesh size, introduction of new gear types, change in seasonal and spatial distribution of effort, etc.).
(b) Develop a multispecies production model and translate it into socio-economic terms in a manner analogous with the single species fishery, i.e., use the prices of each species as weights to aggregate the multispecies catch obtained at different levels of effort; then, express this aggregate value of catch as a function of total fishing effort to obtain what might be called a total revenue or gross economic yield curve (see section 2.2 below).
(c) Examine whether this gross economic yield curve could be raised through manipulation of the controllable factors, that is, by changing the total level of fishing effort and the distribution of available fishing capacities on the component species through changes in mesh size, type of gear and the distribution of fishing operations over space and time.
(d) Keep in mind that natural variability of the resource base is an inherent characteristic of fisheries that is hardly possible to predict, and that it is extremely difficult to adjust the volume of fishing and processing capacities and the size of fishermen communities to its year-to-year fluctuations.
A multispecies production model may be constructed by summing up the individual yield curves of the component species as shown in Figure 6. The resulting aggregate sustainable yield curve has more or less the same overall shape as the yield curve of the single-species fishery; basically, catches increase with effort up to some maximum and then decline. It is of crucial importance, however, to keep in mind the aggregate nature of the curve; movements along the curve by increasing total effort do not only change total catch and age structure but also its species composition. The kinks on the overall sustainable yield curve of Figure 6 may imply the practical disappearance of certain species from the catch for certain levels of effort. As the variability in the species composition and size of the stock, as well as the risk of irreversible changes, tend to increase with the intensity of fishing, the fisheries administrator needs to be particularly cautious to select fishing rates and catch levels below the aggregate MSY. As we will see below, this is also economically wise since the economic yield curve in a multispecies fishery attains a maximum at considerably lower levels of effort than those necessary to realize MSY. Similarly, when the pattern of fishing (mesh size, spatial and seasonal distribution) has been manipulated to raise the sustainable yield curve through changes in the age structure and species composition of the catch (in a fashion analogous to Figure 5), possible irreversibilities as well as the economic value of the so modified catch should also be considered.
This essentially experimental (or trial and error) approach to multispecies fisheries management is probably the only option available at the current state of knowledge and management capabilities. It has the added advantage that it involves considerable learning by doing and it is amenable to modifications as new knowledge is accumulated and management capabilities improve.
Figure 6 Derivation of the aggregate sustainable yield curve for a multispecies fishery through vertical summation of the individual sustainable yield curves of the component species. The waves in the aggregate SYC signify the dwindling of the share of the indicated species in the catch at certain levels of fishing effort.
While it is possible to obtain an aggregate sustainable yield curve for a multispecies fisheries (see Figure 6), it does not provide us with a meaningful management tool. A more appropriate device, as we have cause to suggest earlier, would be the gross economic yield or total revenue (TR) curve obtained by multiplying the catch of each species (at different levels of total fishing effort) by its unit price, summing up over all species, and expressing the resulting aggregate value or total revenue as a function of total fishing effort (see Figure 7).
where, Yi(E) is the catch of species i expressed as a function of total fishing effort, Pi is the unit price of species i, and n is the number of marketable species in the catch.
Notice that the TR curve in Figure 7 attains a maximum at a lower level of effort than the sustainable yield curve, suggesting the possibility of raising the volume of catch at the expense of its value through intensification of fishing. This will result from a reduction of the unit price of fish species as their average size declines as the intensity of fishing goes up as well as, in certain fisheries at least, by the replacement of valuable species by less valuable ones.13
Next, we need to introduce fishing costs. Fishing effort is an index of fishing inputs, such as vessel, engine, crew, fuel and other operating costs as well as fishing time. Since some of these inputs are correlated, we need only use those which best represent the catching power and its utilization. Often the product of the tonnage or the horsepower with fishing time is used. Further, since a variety of types of fishing gear are used, it is necessary to standardize effort by expressing the effort expended by the various types of gear in terms of the effort of a base gear which is preferably one whose catching power and pattern of fishing has remainded unchanged for a long period of time (for details and an example, see Panayotou and Jetanavanich, 1982). Assuming that a standard unit of effort, say research vessel hours, has been constructed, we proceed to specify the following fishing cost equation:
|TC = c . E||(2)|
where c is the average cost per unit of effort assumed, for simplicity's sake, to be constant. Equation (2) may be graphed as the straight line of Figure 8.14
12 Throughout this section we are assuming a well-functioning economy with plenty of non-fishing employment opportunities and no serious social problems. We will relax these assumptions in the following section where social considerations are introduced.
13 One cannot preclude a priori the possibility of heavy fishing pressure resulting in the replacement of low-value predators by high-value preys as in the case of flat fishes in the Gulf of Thailand referred to earlier. In such case, the TR curve may continue rising beyond the MSY level of effort but not ad infinitum. Sooner or later, a point is reached beyond which additional fishing effort brings a reduction in the volume of the catch or its unit value or both.
14 It should be noted, however, that the directly proportional relationship between cost and effort depicted by equation 2 and Figure 8 and employed henceforth is a simplication for expositional purposes. In most cases, the true cost curve would be curved or sigmoid since the composition of effort would be different at different levels of effort; as effort expands there are economies of scale up to a point and diseconomies of scale beyond. Introduction of these complications does not change our qualitative results but it does matter quantitatively and, furthermore, it has distributive implications.
Figure 7 The gross economic yield or total revenue (TR) curve of a multispecies fishery constructed by multiplying the catch of each species by its price and summing up over all species, or by multiplying the aggregate sustainable yield curve by the average price of catch. Notice that the maximum yield. At the maximum yield the value of catch is less than the maximum.
Figure 8 Total cost (TC) line - a proportional relationship between cost and effort
Putting revenues and cost together, we obtain a complete bio-economic model in which the net economic yield or resource rent (∏) is obtained as the difference between revenues and costs:
As shown in Figure 9, the net economic yield is maximized at the level of effort E1 for which the slope of the total revenue curve equals the slope of the total cost curve. At this level of effort the last hour of fishing brings in a catch whose value (MR in Figure 9) is exactly equal to the cost of catching it (MC in Figure 9). Each of the previous units of effort brings in a catch whose value is higher than its cost while every unit beyond E1 brings in a catch whose value is less than its cost. A wise owner or manager of a fishery will expand fishing effort up to E1 since, up to that point, every additional unit of effort adds to the profits, but he/she will not allow effort to go beyond E1 since every unit of effort beyond E1 adds more to the cost than to the revenues and hence it lowers profits (see Figure 9).15
In the absence of social considerations (see Section 2.3 below), the maximum profit obtainable at E1 level of effort and known as the maximum net economic yield (MEY) is the appropriate objective of fisheries management as it ensures that the net benefit to the society from the fishery is maximized. In a multispecies fishery, MEY further reduces the risk of valuable species disappearing from the catch (except in those cases where their disappearance gives rise to other species of higher net value). Thus, MEY is preferable to the elusive MSY as the objective of fishery management, not only from the economic point of view 16, but also from the ecological point of view since, ecologically, a greater diversity of species has greater chances of being achieved for lower intensities of fishing. The latter has the added advantage of maintaining flexibility (more options open) in the light of the possible irreversibility of “extinction” of certain species about which we know very little.
As we will see in more detail in the next chapter (Section 3.3), MEY is not tenable in an unregulated open-access fishery. The absence of property rights over the resource and the presence of surplus profits (resource rents) at MEY would encourage existing fishermen to expand their effort and others to take up fishing until all surplus profits are completely dissipated in excessive effort. Expansion of effort would only cease when total revenues just equal total costs and, hence, there are no surplus profits (resource rents) to attract new extrants. The level of effort (E3 in Figure 9) which generates zero resource rents (zero net economic yield) is known as a “bio-economic equilibrium”, because at this point both the stock (bio) and the industry (economic) stabilize. From the biological point of view, at E3 there is overexploitation of young fish known as “growth overfishing” and a risk of an overexploitation of the parent stock and chronic drop in recruitment known as “recruitment over-fishing”.17
15 This is, however, true only under static conditions, i.e. assuming instantaneous adjustments of fishing effort and of fish stock. As we will see a few pages below, when discussing the dynamic model, consideration of the time involved in these adjustments justifies expansion of effort beyond E1 but rarely beyond E2.
16 The often advanced argument that attainment of MSY is preferable to MEY when people are hungry because it supplies more protein is clearly not valid as long as money can buy protein. This is so because the extra effort (capital and labour) required to catch the few extra tons of fish can produce many more tons of protein from other sources such as aquaculture and livestock. For example, an increase in effort in Figure 9 by one unit, from E1 to E', will incur a cost of aE' dollars worth of protein from other sources (opportunity cost of effort) to produce additional protein from the sea worth only bE' dollars. Therefore, if money can buy protein, MEY gives the maximum amount of protein. Of course, if there are overriding distributional problems which the authorities cannot solve otherwise, deviations from MEY toward MSY may be justified, as we will see in the next section.
17 Of course, biological overfishing of either kind is not a result of the bio-economic equilibrium per se but of the point on the yield curve on which the bio-economic equilibrium occurs.
Figure 9 A bio-economic model for fisheries management. Maximum sustainable yield (MSY) and maximum gross value of catch (maximum total revenues) are not the most appropriate objectives of fishery management, as they do not make the best possible use of the fishery resource even if the objective is maximum protein (from all sources). The maximum resource rent or maximum (net) economic yield (MEY) is obtained at E1 level of effort where the marginal revenue of effort equals the marginal costs of effort. This is level of effort, however, is not tenable in an unregulated open-access fishery which gravitates towards a much higher level of effort (E3), where all resource rents are dissipated. (Note that the average cost and average revenue curves show, respectively, the cost and revenue per unit of effort at each level of effort, while the marginal cost and marginal revenue curves show, respectively, the change in total cost and total revenue, resulting from a change in the level of effort. For more details on this construction, see Anderson - 1977.)
In purely economic terms and solely with regard to the natural resource, at E3 the fishery ceases to be a “resource” since it generates no resource rents. All resource rents are being wasted to pay excessive numbers of fishermen for their labour and investments which, without these rents, would have earned incomes far below those paid by other similar occupations. That much effort (consisting of scarce capital and labour) is being wasted at E3 is evidenced not only by the fact that the average returns from a valuable resource barely cover the costs of its exploitation but also (and more strikingly) by the fact that the marginal returns at E3 are far below the marginal costs and the average returns. In fact, at E3 the marginal returns are negative which implies that we can increase total revenues by simply reducing effort. Thus, shifting these excess resources (E1, E3) away from the fishery towards other sectors would not only generate a surplus value (rent from the fishery) but it would also increase production and income in those other sectors 18, a prospect which underlines the importance and potential contribution of fisheries management to the overall national economy and well-being. In fact, in an actual economy, the potential benefits from fisheries management may even be greater since the process of entry into the fishery might not stop where all rents disappear but continue into the ‘red’, beyond E3, where fishing costs exceed the total value of the catch, and hence fishermen on the average do not earn even as much as they could earn from other occupations.
How could this happen? One reason has to do with the fact that investment decisions are made on over-optimistic forecasts of yield based either on proportional extrapolation of past yields or on exceptionally good fishing years. Since fishermen make their investment decisions quite independently from each other and since the economic life of a vessel is quite long, over-investment is very likely. Moreover, once built, a fishing vessel is, to a large degree, a “sunk” cost and would keep operating whether it covers its fixed cost (depreciation and interest on capital) or not, as long as it covers its operating costs. Another reason for the expansion and sustenance of effort beyond the bio-economic equilibrium with consequent negative resource rents is the tendency of governments to subsidize (directly or indirectly) the industry, thereby lowering the private cost of fishing below its true social cost. Finally, fishermen may be earning incomes below their opportunity cost because of geographical and occupational immobility, itself the result of a host of socio-cultural factors to which we turn our attention in the following section.
The model on Figure 9 is a fixed-price model in that the price of each species is assumed to be independent of the size of the catch. This is not an unrealistic assumption for small-scale fisheries which, while employing the majority of the fishermen, land only a fraction of the total catch. There are cases, however, like Indonesia where virtually the entire catch is landed by small-scale fishermen. We could still use the fixed-price model if we are dealing with only a small part of the Indonesian fishery. At the national level, however, we need to introduce a flexible-price model. Depending on consumer preferences and import and export possibilities, the average price of all species combined will be relatively high at low levels of catch and relatively low at higher levels. As fishing effort expands, a number of forces are at work whose net effect may raise or lower the average unit price of the catch; at low fishing intensities, increases in catch tend to lower the average price and economies of scale from the expansion of operations also tend to reduce it; at high fishing intensities, the drop in catch tends to raise the average price while the reduction in the size of fish caught tends to lower it.
As the more valuable species become relatively scarcer or may, in some cases, disappear from the catch with the intensification of fishing, their prices rise resulting in substitution of less valuable species for more valuable ones, the extent of substitution depending on tastes and incomes. As a corollary, the rise in the prices of conventional species encourages the development of methods of improved utilization of non-conventional species which is encouraged further by economies of scale made possible by their surge in quantities. In reality, the shape and position of the TR curve may change very widely, but for theoretical purposes, the general shape can be assumed to be similar to that of Figure 9.19
18 This is a theoretical possibility which depends on the opportunity cost of labour, mobility and alternative sources of employment which must be investigated for each individual fishery. However, properly defined, the curves of Figure 9 incorporate all these factors.
19 More appropriately, the demand function for each species could be estimated using data on quantities demanded at different prices (of the species concerned and of its close substitutes) as well as information on consumer preferences and incomes. (For more details and an example from Thailand, see Panayotou and Jetanavanich, 1982.)
Thus far, we have been implicitly assuming that changes in effort and adjustments in stocks could be made instantaneously. Profits attract new entrants, losses cause exit, and stocks are reduced with entry and increased with exit with corresponding changes in net natural growth. All these changes have been assumed to take place in zero time. In reality, exit, entry, stock adjustment and growth all take time and “time is money”. In multispecies fisheries, changes in the composition of the stock as a result of fishing also take time. The idea is that benefits which materialize later on, as opposed to now, should be appropriately discounted because there is always a cost to waiting. Analogously, costs which are incurred in the future are not as painful as costs incurred today.
Whether an action, such as allowing a fish stock to recover from overfishing, should be taken depends on whether the benefits of waiting exceed the cost of waiting. The crucial determinants of these benefits and costs are the growth rate of the biomass, the discount rate and the rate of depreciation of fishing assets. In the case of multispecies fisheries, one should consider both the growth rates of the individual species and the rate at which a certain species composition is altered or reconstituted. The proper goal of management is the maximization of the present value of net revenues over the life of the fishery. This gives rise to a dynamic maximum economic yield (DMEY) which is obtained by expanding (or reducing) effort to the point where the last unit adds to the present value of the stream of future revenues as much as it adds to the present value of the stream of costs. It can be shown that the DMEY is located somewhere between the (static) MEY and the open access equilibrium depending on the rate of discount. If the latter is zero, then DMEY = MEY. If, on the other hand, the discount rate is indefinitely high, DMEY = open-access equilibrium.
While the idea behind DMEY is fairly simple and appealing, its application is limited by the complexity of its mathematical formulation and its relatively greater data requirements (compared to available statistics in developing countries). For this reason, we will not attempt to develop or apply a dynamic model to small-scale fisheries. However, we will, on several occasions, utilize some of the concepts and ideas behind the dynamic model.
Up to this point, we have been concerned with models which attempt to maximize catch (MSY) and aggregate economic surplus (MEY). We have concluded that in tropical multispecies fisheries MSY is not a meaningful goal for fisheries management. Not only does it ignore the costs of fishing effort but it may also result in a maximum catch consisting largely of trashfish at the expense of more valuable species whose relative abundance may considerably decline in the catch under the heavy fishing pressure required by MSY. We have, then, concluded that the maximum economic yield (MEY) is a more appropriate goal for fisheries management, since it results in maximization of a society's net benefit from the fishery, it keeps more options open in the light of our inadequate knowledge of ecological relationships, and it reduces the risk of collapse of certain species.
Fishery development aims at increasing the exploitation of under-utilized stocks by expanding effective effort through allocation of additional labour and capital, technological upgrading, training, etc. Fishery management, on the other hand, calls for a reduction in fishing effort which, sooner or later, involves the retirement of fishermen and fishing assets.20 The implementation of such interventions, though justified on aggregate economic grounds, may be constrained by a variety of social considerations. Since fisheries development and management involve and affect primarily the fishermen, it is necessary: (i) to consider their values, motivations, and attitudes towards the contemplated intervention, and (ii) to examine the distribution of benefits from the intervention between fishermen and non-fishermen, and among fishermen themselves (small-scale vs. large-scale, crewmen vs. boat owners, etc.) in the light of their relative socio-economic conditions. For example, introduction of high-risk high-return fishing technologies may fail, even if subsidized, if the fishermen happen to be risk-averse either by culture or by necessity (at subsistence levels of living, food security is far more significant than a high but uncertain return). Similarly, fishery development may be obstructed by the low social status of fishing vis-a-vis other occupations in certain societies in the same way it can be obstructed by the lack of education and skills to master the required technology for a new type of fishing. Analogously, management involving the retirement of a group of fishermen is unjustified and often non-enforceable in the absence of alternative employment opportunities outside the fishery; if implemented it would have counter-equity implications by imposing a cost on a low income group in order to generate an economic surplus for the society as a whole (the average-income group).
20 Up to this point we are assuming a well-functioning economy with plenty of non-fishing employment opportunities and no serious social problems, in which case MEY is equivalent to maximum social benefit. From this point on we gradually introduce unemployment and other social problems and modify accordingly MEY into maximum social yield (MScY) as the goal of management.
The introduction of social considerations into the bio-economic model leads to a new concept for fisheries management: the maximum social yield (MScY) which is basically a modified MEY. Introduction of social considerations may limit the speed or the extent to which management measures are introduced, or it may justify more development than is justified on purely economic grounds. This can be best illustrated by the case of an overexploited fishery in a rural economy with severe scarcity of alternative employment opportunities.
In our bio-economic model we had implicitly assumed that the market prices of fishing inputs (wages, price of fuel, etc.) reflect the true sacrifices which the society incurs in using these inputs (labour, fuel, etc.) in fishing rather than in other occupations. Under these assumptions, attainment of MEY from the fishery may require the reduction of fishing effort by half which, in a country such as Thailand, may mean forcing out of the fishery as many as 35,000 fishermen (or more). How desirable is this when in the rest of the economy there are large numbers of permanently unemployed or underemployed workers?
When there is considerable unemployment, fishing wages do not reflect the true opportunity cost of labour. If, because of widespread unemployment, fishermen have no alternative to fishing, their opportunity cost is close to zero, and therefore the society makes little or no sacrifice in keeping them in the fishery. Therefore, in calculating the cost per unit of effort, c, and the TC curve, we should not include the cost of labour; the wages paid (or other earnings) are not a cost to the society as they represent the utilization of previously unutilized human resources. As shown in Figure 10, the total fishing costs when there is widespread unemployment, TC’, are lower than the total costs under full employment, TC, because the former do not include the cost of labour while the latter do. The result is that the ‘new MEY’ or maximum social yield (MScY) is at a level of effort EMScY considerably higher than EMEY (the level of effort under full employment). Although the surplus profits at EMScY are lower than at EMEY (i.e. dg < ab), the social yield being the sum of surplus profits and wages is higher at EMScY than at EMEY by the amount of df, i.e:
dg + gh > ab + bc or dg + gh - (ab + bc) = df
Thus, df is the net social benefit from allowing effort to expand from EMEY to EMScY. However, expansion of effort beyond EMScY should not be allowed since the social surplus (profits and wages) is reduced. At open-access equilibrium level of effort, EOAE, the social surplus kℓ consisting entirely of wages is much lower than at EMScY but not necessarily lower than at EMEY. At point m, where TC' = TR, the losses are so high that all wages are absorbed and only capital and running costs are covered by the gross proceeds and hence the social surplus is effectively zero. Thus the maximum social surplus (MScY) is obtained at EMScY level of effort; it is equal to dh and consists of dg amount of surplus profits and gh amount of wages (Figure 10).
If we also take into account that fishing assets (boat and gear) may have no alternative uses, TC shifts even lower than TC’ justifying an even higher level of fishing effort but yet lower than the open-access equilibrium level of effort, EOAE. However, as we move away from both MEY and MEY in order to expand fishing employment, the secondary employment generated through the multiplier effect (fish processing and marketing, non-fishing investment of fishing profits) is reduced 21 and such reductions may offset any gains in fishing employment. Hence, the maximum social yield cannot be to the right of MSY, even with high priority on the employment objective. 22
Figure 10 Maximum social yield (MScY) in the absence of alternative employment oppor- tunities. (Note: social yield (ScY) = wages + profits)
Figure 11 Time lag between the decision to invest in fishing assets (based on over-optimistic forecast of yield) and actual entry into the fishery. The number of fishermen (or fishing effort) keeps increasing even at a time when the average yield is falling and profitability is declining.
Without attempting to be exhaustive of all relevant social considerations, let us consider three more cases: lack of mobility, subsistence orientation of production, and income distribution.
According to our bio-economic model, fishermen will stay in the fishery as long as they earn an income at least as high as the opportunity cost of their labour and capital. As the fishery becomes over-crowded and profits for most fishermen disappear, we would expect those fishermen who are not able to earn from the fishery as much as they can earn from other occupations to slip quietly out of the fishery, changing both occupation and location if necessary, i.e., we assume perfect mobility of labour and capital. This often does not happen.
Lack of occupational and geographical mobility may result from long isolation, low formal education, advanced age, preference for a particular way of life, cultural taboos, caste retrictions, inability to liquidate one's assets, indebtedness or just lack of knowledge and exposure to opportunities. The consequence of immobility is that fishermen may continue fishing even if they earn far less than their opportunity costs.
In fact, many of the socio-economic problems of small-scale fisheries arise from the asymmetry between entry and exit. To enter the fishery, especially in a good fishing year, is relatively easy.23 To leave, especially in a bad fishing year, is quite difficult; for one, a fisherman might not be able to afford to spend time looking for a job or moving when his income is down to subsistence level 24 and, for another, he can hardly expect to find a buyer for his boat and gear during a bad fishing year. During a good fishing year, of course, to leave the fishery is out of the question. It is easy to see how entry during a good year (or a series of good years) and no exit during a bad year (or a series of bad years) would swell the ranks of small-scale fishermen and reduce their incomes to subsistence levels. There is, further, the time lag between the decision to invest in fishing assets, which usually is made when fishing is quite profitable, and the actual entry which may take place when the average yield and profitability have already declined (see Figure 11).
21 F.T. Christy, Jr. has brought to my attention the case of the flat-topped curves which do not show depletion except at very high levels of fishing effort. This is the case with certain shrimp fisheries and might also be the case with certain multispecies fisheries. In such cases, of course, the secondary employment in fish processing and marketing remains steady with the expansion of primary employment (fishing effort) and secondary employment in vessel and gear construction.
22 In fact, with zero (social) fishing costs, the maximum social yield is obtained exactly at the same level of effort as MSY. Only if fishing costs are negative from the society's point of view (e.g. danger of riots, social disorder and crime if effort is curtailed) could MScY be at a level of effort higher than that of MSY.
23 The ease of entry into the fishery differs from country to country and from fishery to fishery. In countries with caste restrictions such as India, or with close communities such as Sri Lanka, entry is more difficult than in more open societies such as Thailand or the Philippines. Entry into coastal fisheries might be easier than entry into offshore fisheries because of lower capital requirements. On the other hand, entry into the offshore fishery might be open to everyone (provided he has the capital and the skill) while entry into the coastal small-scale fishery may be barred by customary or territorial rights. However, restriction of entry from outside the community is not always effective in limiting effort because of population growth within the community. The ease of entry also differs according to the type of fishing: pelagic or purseseine fishing usually requires more skills than demersal or trawl fishing.
24 This reason was given by many small-scale fishermen in Southeast Asia interviewed by the author. When asked “if fishing is so bad why don't you take up another job?”, they retorted that now they worked more hours to earn a living and had no time to make several trips to the provincial capital to line up a job. It could be that this attitude is more due to a lack of knowledge or of exposure to opportunities outside fishing than lack of time. Still, little is known about mobility in and out of the fishery and further research is called for.
Our bio-economic model assumes that the objective of every fisherman is profit maximization. It would not change the results of the model if we replace profit by income. However, it has often been argued that artisanal or traditional fishermen are engaged in fishing not for profit but for subsistence; but, even subsistence is made possible either by consuming one's produce or by selling it for cash income. However, since fish is not a subsistence commodity (i.e. it is not a staple), a fisherman's subsistence depends almost entirely on his income whether as a boat-owner or labourer. Thus, the earnings of income is clearly the intermediate (if not the final) objective of those engaged in fishing.
However, there are two related problems. Some fishermen's objective may be to earn a certain level of income rather than maximize that income. In these cases they behave differently from the fishermen of our bio-economic model who chase every fish which has a price tag higher than the cost of catching it. Fishermen who go after a target level of income reduce their effort when fishing is very profitable (because few fishing trips are sufficient to meet their target) and increase their effort when fishing is poor, a behaviour with grave implications for both fisheries development and management.
In our bio-economic model we have assumed that the purpose of fisheries management from the economic point of view was to maximize the aggregate social benefit without consideration of who gets what. However, given the dualisms that exist in many fisheries, such as small- and large-scale fishermen and boat owners and labourers on the one hand, and the objectives of many governments to reduce income disparities on the other, it is often appropriate to attach a bigger weight to the benefits accruing to small-scale fishermen and crew members than to large-scale fishermen and big boat-owners. This would mean that social benefits would increase as a result of a change in the sharing system which increases the share of the crew, or as a result of a fisheries regulation which allocates more coastal resources to small-scale fishermen by banning trawlers close to shore even if total fishing effort is not reduced and total fishing income has not increased.
As another example, consider the case of the small-scale coastal fishery which catches fish of too young age before it is recruited into the stock exploited by an offshore large-scale fishery. The sustainable catch and its value may be raised by raising the age at first capture through the contraction of the small-scale fishery; but, this is by no means socially desirable if neither income redistribution nor the small-scale fishermen's participation in offshore fishing could be made operational. Inefficiency and waste, especially of open-access resources, could be the price being paid for a tolerable distribution of wealth unattainable by other means in certain socio-political environments. Yet, inefficiency should not be a permanent means of redistributing income; distributional considerations may slow down the speed and temporarily modify the objectives of fisheries management but they cannot alter its long-term objective of rationalizing the fishery for the greatest possible benefit to the society as a whole.
Our discussion of social considerations underlies the need for a closer look on the various constraints under which small-scale fisheries operate (Chapter III) before specific management regulations and assistance programmes (Chapter IV) can be considered.