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3.1  Catch limits

Recently the standard procedure for regulating fishing effort in most of the developed world has been by catch limits (TACs). There are a number of advantages and disadvantages in setting catch limits and in regulating fishing effort by these means. The most serious disadvantage, which was touched on in the Introduction, is that catch limits in isolation are, even if successful, only capable of solving problems of resource conservation. Unless they are allocated in some way, either between national groups, or within a nation's fishing community the problems of over-capitalization remain.

In this section we consider firstly the relevant technical details of the procedures for calculating TACs before considering their allocation.

3.1.1 Calculation of a Total Allowable Catch (TAC)

Implicit in the calculation of a TAC are criteria which specify some aim of management. These criteria could, for example, reflect a desire for MSY, for a particular target fishing mortality, say F0.1 (Boerema and Gulland, 1972) or for a long-term maximization of yield per recruit. Pope(1984) reviews the problems faced by scientists in interpreting ambiguous goals in order to give scientific advice on TACs. Readers are referred to Pope for details, but it should be emphasized that such goals should as far as possible be unambiguous. The main problem is that many management goals do not directly translate into a target fishing mortality rate. Accordingly it is often necessary to interpret the goal in these terms before proceeding with the calculation.

Given some specified goal, the calculation then involves the following procedures. Initially, it is necessary to make some assessment of the abundance and biological structure: e.g., age or length composition of the stock. Such a process can be done directly or indirectly. Direct methods involve, for example, acoustic surveys supplemented by random samples of the size composition of the stock. This is a method favoured for species whose recruitment is highly variable and whose mortality rate is sufficiently high that recruitment forms a significant proportion of the total stock. A variety of small pelagic species - capelin, sardine, anchovy, herring - are assessed in this way.

Indirect assessment of current abundance can be done using the technique of Virtual Population Analysis (VPA) or by means of production models which relate catch rates to the abundance of the resource.

Direct methods are costly, but can provide reasonably accurate assessments of current abundance. Indirect methods are cheap, often relying solely on data collected as a matter of course during fishery monitoring, but are often inaccurate, sometimes grossly so.

It should not be inferred that in all cases direct methods can provide a reasonably accurate estimate of abundance. There are a number of problems of sample design and calibration which (in some cases) render them ineffective. For example, the interpretation of acoustic data on shoals of mixed species is highly ambiguous.

The main problem with indirect techniques is that they rely for estimates of current abundance on a variety of ad hoc methods for calibrating effort efficiency. They are correspondingly inaccurate where effort calibration is difficult. Pope (1979), and Pope and Shepherd (1982) discuss the mathematical details of this process. A second problem is that the calculations can be sensitive to the estimate of the natural mortality rate of the fish stock. In many cases this parameter can only be estimated with considerable uncertainty.

Once an assessment has been made of the abundance of the resource, the calculation of a TAC according to specified criteria is straightforward. Indeed the mathematical apparatus for such calculations has been available for several decades (see Ricker, 1958; Beverton and Holt, 1957).

Pope (1984) considers in some detail the calculation of TACs given a specific goal and an estimate of abundance. He describes a number of problems, all of which point to a substantial level of uncertainty in the calculations. Apart from this conclusion the technical details are inappropriate for consideration in this study. The main problems may be simply stated. If it is possible to obtain estimates of abundance of each age class in the fish stock, the fate of these age classes in the future can be predicted, using a fixed natural mortality rate and some specified level of fishing mortality. Extrapolations concerning the total stock will be subject to error due to the incoming recruitment (which cannot be readily estimated) and that associated with the estimates of current abundance and natural mortality. Where the fish stock has a low total mortality rate (defined as the sum of fishing and natural mortality), these extrapolations will be reasonably accurate as the new recruitment is a small part of the stock. If the species has a high natural mortality, or fishing pressure has made total mortality high, the stock will consist of few age classes and recruitment will be correspondingly important. In such situations predictions will tend to be inaccurate. The corollary of this observation is that high fishing rates can lead to greater unpredictability.

Where these problems are acute, direct estimates of recruitment strength are sometimes made to supplement the indirect estimates of the older post-recruited part of the stock. Examples occur in a number of fisheries for pelagic species. Typical fisheries are those for various herring stocks in the North Atlantic and anchovetas and sardine of the Eastern Pacific.

The procedure for calculating TACs may be illuminated by considering the recent practice of the Advisory Committee for Fisheries Management (ACFM) of the International Council for the Exploration of the Sea (ICES), which provides scientific advice to countries fishing in the North-East Atlantic area. In their reports the ACFM typically shows catches as a function of the fishing mortality that they will impose on the stock. Such a graph can then be used to show how the appropriate management objectives of the administrative body can be achieved (Hoydal, 1984).

In other management bodies, for example, in the International Whaling Commission (IWC), once the status of the stock has been assessed relative to its MSY level, the calculation of a TAC comes automatically from the rules of the New Management Procedure (NMP). In a similar manner, proposals for managing the Californian anchovy assess the relationship of the stock to its optimal sustainable yield, and then assess TACs on the basis of simple rules (McInnis, 1984).

Although simple in concept there are a number of problems associated with these procedures for the calculation of a TAC which are not widely recognized. The most obvious problem is that they rely on a history of accurate data on the age or size composition of the catch, the effort and the catch per unit effort of the various components of the fishery. Such data are often not available on fisheries in developing countries and clearly are not available in newly developing fisheries. However, the most important disadvantage of management based on TACs has become apparent recently. The problem is that the adoption of TAC management has often been accompanied by a marked deterioration in the quality of the data. Under-reporting of catches undermines all the techniques of resource assessment. The scientists are quite unable to perform assessments if data are not available or are unreliable. It is a reflection of the magnitude of this problem that a number of scientific groups have declared themselves unable to calculate TACs on the basis of the data made available to them (Griffith, 1982; Hoydal, 1984).

A less important, but still significant problem involves the allocation of scarce scientific manpower, which is often called upon to make annual assessments of stock status and TACs. Hoydal (1984) reviews current practice of the International Council for the Exploration of the Sea (ICES). He documents an extremely elaborate system of working groups and committees meeting for a significant portion of the year. Clearly such concentration of manpower cannot be done at low cost.

A reasonable question to consider in this context is the potential trade-off between the average level of catch obtained and the precision required of the estimate. For example,if it is required that the TAC should correspond to the level where MSY can be obtained, it will be necessary to monitor continuously the stock abundance and to revise TACs on a regular basis. By contrast, if the management was aiming to catch only some small proportion of the MSY level, the need for monitoring and regular changes in TAC levels is substantially reduced. The trade-off between the level of catch and the costs associated with scientific monitoring have rarely been quantified, but there is clear scope for investigating the possibility for less frequent monitoring.

In multi-species fish communities, the standard methods for assessing stock abundance, fishing mortality and potential yield are all exacerbated. Here, the setting of a global catch level faces the problem that substantial numbers of by-catches and discards occur.

The problem of by-catches has been recognized for some time. In particular, management in the North-West Atlantic, under ICNAF, operated on a whole range of individual TACs, all with separate by-catch regulations. In the ICNAF area these by-catch regulations often meant that the TAC was unattainable, given the selectivity and areas of operation of the fleets (Brown, Brennan and Palmer, 1979). Current regulation of the sprat fishery in the North Sea forbids a by-catch of herring greater than 10% by weight (ICES, 1982). With decreasing sprat and increasing herring this presents problems for fishermen in complying with regulations.

Discards occur when fishermen choose to throw away less valuable fish in order that their quota consists only of the most valuable. Such a problem is not unique to multi-species fisheries, but also occurs in situations where a wide range of age classes of a single species are harvested and larger and older fish are more valuable per unit weight. Indeed legislation to regulate the rate of discarding has some history in the North Atlantic, and sorting machines (which enable small fish to be separated) are banned for certain fisheries.

3.1.2  Allocation of TACs

Without allocation, the tendency for fishing enterprises is to move towards an over-investment in equipment and labour in order that they may increase their share of the common TAC. This has in the past caused severe problems, with a major disruption in the seasonal pattern of a fishery as fishermen rush to obtain their share of the quota. Often vessels increase in size and add engine power both to get more quickly to and from the grounds and to operate with greater fishing power, while there. Allocation can occur between nations and within a nation.

3.1.3 International Allocation of TACs

There are four main types of international allocation: firstly where there is fishing with open access; secondly where there are shared stocks; thirdly where there are anadromous stocks; and fourthly where there is foreign fishing within a national EEZ.

Under the pre-LOS conditions, the open-access fishing was typical; since the LOS and the Declaration of EEZs only a few high seas stocks, such as the tunas, are harvested in this manner.

The European Economic Community is a unique example of a group of nations which have agreed to combine their fishery resources and act as a single State. Having done this they now allocate their common resources among themselves and negotiate as a unit, with other States, concerning shared stocks.

Although there is clear need for there to be some allocation between countries when stocks are shared, it is quite clear that there will be no hard and fast rules for such allocation. When stocks are shared, criteria that have been used in the past have involved the biological characteristics of the shared stock. These include the location of spawning grounds and the migration routes of juvenile and adult fish. In some sense such information can be used as a basis for allocation, although the details clearly involve political negotiations, in which other factors may play a more important role.

Where countries do not have sufficient industrial capacity to land the TAC within their EEZ they may choose to allocate a proportion to foreign vessels.

The allocation of a TAC to foreign vessels when the stock is solely within the jurisdiction of a single coastal State is clearly the right and prerogative of the coastal State. Two decisions are to be made: How much of the TAC is to be declared as surplus to the needs of the coastal State and thus is available for foreign fishermen? How is the total allowable level of foreign fishing to be allocated among various nations? In the past such allocation has been made on the basis of historical performance, i.e., where, when and how often fishing by foreign vessels had occurred in pre-LOS conditions. More recently the allocation appears to have been made on the basis of the provision of data and cooperation in research and enforcement.

It is often the case that countries will consider the allocation of a TAC to foreign vessels to be of a temporary nature until such time as they are able to build up their own capacity. However, where the resource fluctuates in natural conditions in a substantial manner it can often be economically optimal to choose to develop the fishing industry to a level where the domestic capacity can always be satisfied. The surplus to this capacity is then allocated on a year-to-year basis to foreign fleets. These fleets, given sufficient lead time and a number of different stocks where they have temporary access rights, may find such an arrangement attractive. Beddington and Clark (1983) have investigated in some detail the theoretical basis of policies of this type.

Intra-national Allocation of TAC

When a country is the sole owner of a fish resource, or has agreed in international negotiation to its proportion of a TAC, it faces the problem of allocation of that TAC amongst its national groups. Such allocation can be highly detailed and technical or can be of a general nature. Often the aim will be to improve both the efficiency of individual enterprises or to make the allocation between different groups of fishermen more equitable. The improvement of the efficiency of an-individual enterprise is best achieved by the allocation of a proportion of the TAC to that enterprise. Where this occurs there is no incentive for fishermen to over-invest in equipment and labour in the hope of improving on their share of the global TAC, Such allocation, however, conveying as it does, an effective property right to individuals, must be considered in the overall context of the fishery management policy of the country.

Allocation to individual groups of fishermen often can occur on a geographical basis. Thus allocation rights to a quota to artisanal fishermen may best be achieved by dividing up the appropriate TAC amongst different sectors of the coastal population. A similar allocation between industrial and artisanal sections can also be made.

Administration of Catch Limits

A significant problem alluded to above concerns the necessity of enforcing a TAC, both in terms of the information that is collected for scientific purposes and to ensure proper management. The nature of many fisheries means that enforcement of catch limits will often be, if not impossible, on the high seas, extremely expensive. In such situations there are distinctive advantages in monitoring catches and enforcing quotas at the point of first sale. Analogies can be drawn between illegal catches, i.e., greater than the allocation, and the receiving of stolen goods. The buyer of fish from fishermen being clearly in the key position to provide evidence that the fish purchased were not in contravention to regulations. Accordingly an attractive idea is to involve the fish buyer in the enforcement process. This occurs in some Alaskan fisheries (Tillion, 1984).

There are clear interactions between the enforcement of TACs and the collection of accurate data for the purposes of stock assessment. Past failures in the developed world have already been referred to in this context. It is clearly undesirable that regulations put a premium on cheating and that enforcement fails to stop it.

The cost of enforcement needs to be set against the benefits to be obtained by operating a TAC form of regulation. It is apparent that in many developed countries the cost of enforcement is extremely high (Derham, 1984; Schowengerdt, 1984). In a similar manner, developing countries should rightly query the benefit of operating a TAC - based management when they have to face the problem of financing enforcement.

3.2  Indirect methods of controlling fishing effort

Although the most obvious way to control fishing effort is by directly regulating either the catch or the amount of effort, such direct methods of control do have a number of problems. In particular they are difficult and complicated to enforce and hence expensive. Furthermore they are in the words of Caddy (1984b) “information hungry”, i.e., for their proper administration they demand considerable amounts of data collection. Accordingly there are attractions in methods which are neither as complicated nor as costly. We now consider such methods.

3.2.1   Closed Seasons

There are effectively two types of closed season; the first one occurs when particular periods of the year are banned for fishing. In such situations it may be possible to protect particular life history stages of a stock, for example juveniles or small fish. The Peruvian anchoveta fishery was normally closed early in the year when small fish (peladilla) were particularly abundant.

Although the closed season can be effective in restricting fishing mortality on particular life history stages, there are considerable problems in using it as a broad measure to control fishing mortality. The reason is that if catch rates are high outside the closed season, the economic characteristics of the industry will lead either to increasing fishing capacity entering the industry or to an expansion of the capacity of the vessels already there. This, if allowed to continue, can lead to increases in fishing mortality up to and beyond those occurring prior to the closed season being instituted.

Closed seasons also can have a disrupting effect on marketing, generating as they do, discontinuities in supply.

The second type of closed season occurs with a natural feed-back generated by the effect that fishing has on the fish stock. In essence the idea is to assess a decline in the catch rate as the season progresses and when some pre-determined catch rate (corresponding to some target level of stock abundance such as a minimum spawning biomass), is reached the season is closed. The underlying ideas behind such a method are those of De Lury (1947) and Leslie (1952). Both methods rely heavily on the direct relationship between catch per unit effort and stock abundance and are correspondingly inappropriate for species where this relationship is weak.

Closed seasons of this type also tend to involve the sort of over-capitalization considered above. Fishermen are tempted by high catch rates at the start of the season to invest heavily in capital equipment to increase their share of the ultimate yield.

3.2.2  Closed Areas

A similar method of regulating fishing effort on particular life history stages of a species is to designate a particular geographical location as a closed area for fishing. A number of examples occur in developed countries, typical is the “Norway pout box” around the Shetland Isles.

Often closed areas may provide shelter from fishing mortality for certain life history stages, but this can well be at the expense of increased fishing effort on other age groups. Accordingly it is necessary to assess the overall effect of such closures on the dynamics of the stock. For example, protection of age groups zero and one may not produce appropriate protection of the spawning stock when fishing mortality rates are high on the other pre-spawning age groups.

In some circumstances, protected areas may be extremely useful in ensuring that, for example, portions of the spawning stock are protected; this ensures an effective escapement with corresponding conservation benefits.

A particular application of closed areas, which has been adopted in a number of developing countries, is that of the “Coastal Belt”. The aim of this regulation is to protect artisanal fishermen from competition with trawlers who typically fish well within the normal range of the artisan (Khoo, 1980; Pathansali and Jothy, 1974). Obviously, such regulations depend on the detailed natural history of the stock concerned. It is, for example, quite useless in a situation where fish are first exploited by the industrial fishery offshore, and only then migrate into the coastal belt. Even when this is not the case, there will be a tendency for the fishing effort of the industrial fleet to concentrate on the borders of the coastal zone (Marr, 1982). Close surveillance and enforcement will usually be necessary to make such closures effective.


One of the attractions of closed seasons and, if they are relatively large, closed areas, is that they are relatively easy to enforce. In particular, aerial surveillance coupled with patrol with vessels can prove a cost-effective way of ensuring that these regulations are obeyed (Derham, 1984).

3.2.3  Mesh Regulations

Traditionally one of the main methods for controlling the pattern of fishing mortality is via mesh regulation. The underlying theory has been well understood since Beverton and Holt (1957) and may be simply stated: the large mesh net permits young fish to escape and hence to grow and contribute to the biomass of the fish stock in subsequent years.

One problem of mesh regulations is that in the immediate period following their introduction, catch rates will fall. In essence this means that the fishermen are being expected to make a sacrifice now for future benefit. This may or may not be economically optimal for the fishermen concerned and hence may attract disfavour if it has a net discounted cost to the individual. In such situations it is all too easy for fishermen to bypass such regulations in a number of ways. Correspondingly, if this is the case, enforcement will be difficult and expensive.

The speed with which the benefits of mesh regulation occur depend on the biological characteristics of the species concerned. For long-lived species with a low mortality rate, such benefits will be several years in occurring, for short-lived species benefits can be expected within a few months.

One problem with mesh regulations is that, although the expected benefits are easy to calculate, such benefits in terms of changes in stock size or increased yields to fishermen are extremely difficult to detect. The reason is that natural fluctuations in recruitment far exceed the expected changes in yield and stock size, and hence can mask any benefits. Accordingly it is almost a matter of faith that such benefits occur. The problem of communicating such faith to a fishing community can be difficult. This is particularly important as fishermen have at their disposal a number of ways of circumventing these regulations (Thompson and Ben Yami, 1984).

One area where mesh regulation has been found to be relatively successful is in legislating between the desires of industrial fisheries and those for human consumption. Banning of small mesh nets can effectively close down an industrial fishery. Examples of this are to be found in various areas around the world, but most noticeably in the North Atlantic (Jones, 1984).

In multi-species trawl fisheries typical of the tropics, for example Malaysia, Indonesia and Thailand, there is a major problem with mesh regulations. Trawl fisheries in such areas typically catch a large number of species and each species in terms of the simple Beverton and Holt theory would have an optimum mesh size. Clearly a single mesh size therefore will be sub-optimal for the majority of species. Despite these caveats there are clear advantages in considering the problem of size at first capture for such fisheries. In the Gulf of Thailand there has been a steady increase in the proportion of small fish in the catch and to some extent this could be alleviated by operating trawls with a larger mesh (Pauly, 1979a). It should be noted in conclusion that mixed fisheries in the North Atlantic face similar problems, although the number of species involved is considerably smaller.

3.3  Restrictive licensing

3.3.1  Control of fishing effort by licence control

In theory the direct control of fishing effort or fishing mortality by licence control is an effective way to ensure the conservation of a fish stock. Indeed formal considerations of the dynamics of exploited species lead to the conclusion that there are considerable advantages in controlling the exploitation of renewable resources in this way (Gulland, 1969; Clark, 1977; Beddington and May, 1977). The basic idea is that catch levels changes automatically with stock size, when a fixed level of effort is applied. Put more formally, application of a fixed level of effort is believed to lead to a fixed level of fishing mortality. Accordingly, changes in stock abundance produce changes in catch levels. In other words a feedback is established which should ensure that the stock always tends to return towards its equilibrium. This is the theory. The practice is rather different.

One of the main problems is that effort is not the time-invariant, undivided unit of the simple models. Typically the efficiency of fishing enterprises tends to change, improving with better gear and better information. The appropriate efficiency calibrations can only be made post hoc, when catch rates can be compared with different historical levels of stock abundance. Accordingly, in controlling effort, managers are often in the process of attempting to catch up, often unsuccessfully, with the technological development of the fishing fleet. Such considerations are further complicated by the composition of fishing fleets, in which different units are often not comparable, and by by-catches of non-target species. In many fisheries, especially on shoaling species, the theoretical benefits of effort control are more seriously undermined by the poor relation between catch rates and stock size, i.e., a fixed level of effort does not lead to a fixed level of fishing mortality.

Despite these problems, direct control of effort by licensing can provide a method of controlling the total fishing mortality. As a tool for ensuring conservation of stocks it is likely to be successful only when introduced relatively early in the development of a fishery. Too often, it has been introduced when capacity is already excessive and its conservation value correspondingly slight. Typical examples are reviewed below.

When a decision is made to institute a licensing programme a series of questions are posed to the management. We now proceed to consider these questions.

3.3.2  How many licences?

Typically scientists will have been able to make some approximate calculations of the potential yield of the stock. In a newly developing fishery, such calculations will often rely on some simple rule of thumb such as that proposed by Gulland (1970). This rule states that an approximation to the MSY of the stock is obtained by the formula: MSY = ½ MB; where M is the coefficient of natural mortality of the stocks and B its unexploited biomass. This particular formula has been found in general to overestimate the potential of the stock, but modifications suggested by Beddington and Cooke (1983) enable a rough approximation to be made on the basis of standard survey data.

The manager can then, on the basis of simple catch rates, calculate how many vessels will be needed to take this MSY. At this stage it is going to be of some considerable advantage to assume that the efficiency of the fleet will increase with time. Hence, such calculations should be made conservatively so that the number of vessels required to take the MSY is not over-estimated. Having made this calculation this figure should be an upper level on the number of licences to be issued. The manager may of course chose, for social or economic reasons, to issue far fewer licences.

Complications occur when more than one type of vessel is going to be operating, but their solution is fairly obvious. If maximum catch rates are assumed for each type of vessel, appropriate combinations of licences for different vessel types can be considered, subject to the constraint that the maximum expected catch does not exceed the MSY.

Clearly this upper figure for the number of licences need not be chosen. The manager may seek to establish a smaller number of licences and then as more information accumulates on the fishery and the fish stock, to expand the fishery by increasing the numbers of licences. He may also seek to operate the fishery at a level well below MSY for economic or other reasons. It should perhaps be said that similar calculations will be required if a foreign fleet is to be licensed within the country's EEZ.

Only rarely are restrictive licensing programmes introduced before fleets have grown quite large relative to the available resources. One of those unique circumstances was when licence control was introduced into the South Australian prawn fishery in March 1968, only two months after the first commercial catches were taken. In this case, other fisheries in the same geographical area were heavily over-capitalized and created a sensitivity to the need for cautious growth in fleet size (Bain, 1984). More common are fisheries where many fishermen and fishery administrators agree that reduction in fleet size would be helpful.

In many nations (e.g., Norway, the United States, Canada and Australia), decisions on eligibility for licences results in excessively large fleets. Fleet reduction (buy-back, scrapping) programmes are often aimed in the direction of smaller fleets, but with no specific fleet size in mind. In a few cases, target numbers of vessels are determined based on such considerations as conservation of the fish resources, maintenance of order in fishing operations, the number of fishing units already engaged in the fishery, and managerial and financial aspects (Asada, 1973). Calculations of target numbers for fleet size require, at a minimum, good data on fishing effort and biological stocks, and preferably good data on the economic and social environment of the fishery. When this is not available, as is the case in Malaysia, limitation in fleet size becomes politically nearly impossible (Majid, 1984).

3.3.3  How long will the programme stay in place?

One very special type of licence limitation programme is a moratorium on new entrants. Moratoria have been used when a rapid decline in the fish stock creates a crisis atmosphere which is thought to be only temporary. A moratorium is usually the first phase in a permanent restrictive licensing programme; it is also used as an immediate response to a crisis which is expected to require long-term policy changes, but where no decision has been reached about the long-term policy.

There are sound reasons for use of a mortatorium. For example, introducing a permanent programme which is unfamiliar to fishermen is often politically difficult, while it is easy to say that all current fishermen may continue to fish but that those outside the fishery will have to wait a short while. Nonetheless, moratoria often have severe unwanted effects. For example, in the United States, Maine and Massachusetts responded to over-capitalization of their lobster fisheries with attempts at limited entry. In 1975, Maine froze the number of lobster licences and attempted to develop a permanent system for restricting licences. Political feasibility within the State required discrimination against non-residents which, in turn, was not acceptable in federal courts. The matter was then dropped. However, discussions alone have been credited with significantly increasing participation. When discussions ended, participation rates also fell. On a parallel note a moratorium on new lobster licences was passed in Massachusetts in 1975. While the number of licences issued in 1975 was virtually the same as in 1974, the number of licences reporting landings jumped from 876 to 1,201. Fishing effort then increased, with the number of lobster pots fishing, increasing by 50 percent between 1974 and 1977 (Smith, 1978). These numbers illustrate one conclusion reached in many other areas as well - if the only thing done is place a moratorium on the numbers participating in a fishery, the short-run effect will be to increase fishing effort, leading to negative impacts in terms of economic efficiency, resource conservation and, probably, equity.

3.3.4  What kind of licences should be issued?

A wide variety of licensing programmes exists around the world. The variation reflects social, economic, and political environments, as well as the opportunities to harvest various fish species. The precise nature of these influences affects the level of details of licence criteria. In addition, the larger the number of restrictions in the programme the better able it will be to achieve a number of conservation, economic and equity goals, but the more expensive and time consuming it will be.

The licence limitation programme in Japan, which evolved gradually throughout the twentieth century, provides a good example of a more complex system. It reflects the social, economic, and political factors which, along with the fishery resources available to the island nation, have led to its importance in the harvesting, processing, and consumption of seafood. Early use of licence control was adopted primarily to protect the large number of coastal fishermen using relatively simple fishing techniques from a growing fleet of large, more powerful trawlers. The continuing growth of restrictive licensing was based on such other objectives as the reduction of competition and prevention of disputes between different groups of offshore fishermen, stabilization of fishing conditions, maintenance of profitability, conservation of resources, and prevention of international disputes (Kasahara, 1972).

A complex system of fishing rights and fishing licences is a key part of the Japanese approach to fishery management, perhaps more so than in any other fishing nation in the world. The licensing system controls the activities of each fishery through restrictions on the total number of licences to be issued, size of vessels to be used, area of fishing, method of fishing, and often species to be taken (Kasahara, 1972). The Japanese system also is more sensitive to multiple-purpose and multiple-species fisheries than other nations' programmes. For example, a joint limitation on fishing effort for purse seine fisheries for sardines, mackerels, and horse mackerels is the key regulation on fisheries for stocks which migrate in the same area and appear to be closely related in abundance fluctuations (Asada, 1973). The detailed nature of the licensing programme reflects not only the complexity of the world-wide, intensive exploitation by the Japanese, but also the relatively minor use of other forms of regulation, compared to other major fishing nations.

Other nations tend to follow many of these same principles. For example, Malaysia issues licences which effectively assign certain sizes of vessels to specific areas. The zone from 5 to 12 miles from shore is reserved for owner-operated trawlers and small purse seiners. Waters from 12 to 30 miles from shore are assigned to large trawlers and purse seiners as well as other fishing gears wholly owned and operated by Malaysians. Foreign fishing, including both joint venture and charter can operate inside the EEZ, but must remain more than 30 miles from shore (Majid, 1984).

In Alaska, licences are issued to fishermen which are specific to one species or a closely related group of species, a particular gear type, and an area. If licences had less detail, major shifts in effort could defeat the purposes of regulations. Many Alaska fishermen are highly mobile and quite capable of shifting their activities from one area to a quite distant area. There are obvious economic disadvantages in such restrictive licensing. However, fishermen are able to operate with different gear types or in more than one area by obtaining more than one type of licence. This goes some way towards alleviating these disadvantages.

Great care is often required if restrictive licensing is to stop the increase in effective fishing effort. If vessel licence limitation combined with a fleet reduction programme increases profitability, remaining vessel owners will try to increase their share of the resource by further investment in a larger vessel size or additional gear. If licences are tied to fishermen rather than vessels, the same phenomenon will occur - investment will tend to increase the effective fishing power of each remaining fisherman. Thus “capital stuffing” (the tendency to increase the ratio of capital expenditures to whatever component of effort is limited), “seepage” (the tendency for effective fishing effort to seep back when nominal effort is reduced), and similar terms reflect the theoretical economist's argument. If there are three or more inputs to a productive process, one of which is unpriced (the fish in the sea), and another which is reduced while the value of the product is constant or continues to rise, then profit-maximizing firms will tend to increase their use of one or more of the other inputs.

The tendency for economic efficiency gains from licence limitation to be dissipated over time has been recognized by managers of licence control programmes in many countries. For example, as British Columbia authorities noted the tendency for the restricted number of vessels in salmon fishing to be replaced by larger vessels, restrictions were added requiring ton-for-ton replacement, i.e. to add a new vessel twice as large as older vessels, two vessels would have to be retired rather than just one. Additional restrictions limited the ability of vessel licences to be transferred from one gear type to a different gear type having greater fishing power per unit of size.

Japan also had to respond to vessel owners who tried to increase the size of their vessels in restricted fisheries. Japanese licensing authorities limited this tendency by issuing licences specific to tonnage classes. Not surprisingly, the bulk of vessels in a 20 to 40 ton class tended to be 39.9 ton vessels. At times the tendency to maximize fishing capacity for a given licence-restricted dimension jeopardized the health, safety, and comfort of the crew as when sleeping space was decreased to increase hold space (Keen, 1973). Government accommodations of industry demands for upgrading vessels to accommodate new technology and allow for new fishing technologies tended to increase the effective fishing capacity beyond what otherwise might have been permitted.

To permit changing technologies and fishing opportunities, vessel owners were allowed to replace old vessels with a new ones of equal size range or to build new ones of larger size by the “tonnage supplement system” (Asada, 1973). For example, if two 140 ton deep-sea tuna vessels were withdrawn, the owner could licence a 280 ton tuna vessel (actually a slightly larger vessel because eligible tonnages are calculated by the top end of weight ranges). The important point here is that, during good times in fisheries, licensed tonnage traded hands at good prices. For example, supplementary tonnage for high-seas skipjack tuna vessels rose from $100 per ton in 1955 to about $500 per ton in 1959 and approached $1,000 per ton in 1960 (Keen, 1973). Such prices reflect a value to limited licences and suggest that licence restrictions contribute to industry profits.

3.3.5  Who issues the licences?

In some nations, licences must be issued by the level of government responsible for marine fisheries. In others, the choice of administrative agency may be rather flexible. In general, the more issues of high national purpose are involved the closer the jurisdictional choice will be to the national level and the greater the variability in local circumstances the closer the choice will be to the local level.

In Japan, fishing licences are granted either by the Minister of Agriculture and Forestry or by Prefectural Governors. The first licence is awarded for fisheries which the National Government has designated as requiring national control. The reasons for national attention are the large size of vessels employed, the wide area of fishing operations, the existence of international fisheries agreements, and the nature of the fishing grounds (Asada, 1973). The second type of licence can either be for a fishery requiring nationwide coordination, where the Minister fixes the maximum number of vessels to be licenced for each prefecture, or for fisheries which the Prefectural Governors, on their own initiative, regulate in order to coordinate fishing operations at the prefectural level.

Another country where licenses are issued at more than one jurisdictional level is the United States. Most fishing licences are issued by individual States in order to allow maximum responsiveness to variations in local circumstances. However, licences to harvest mid-Atlantic surf clams are issued by the federal government because other approaches to restricting effort to this offshore resource were insufficient and local States had not been able to coordinate licence control on their own.

3.3.6  Who is to be licensed?

In many countries, one of the issues which impedes initial political acceptance of a programme arises from criteria for initial qualification. The larger the number who fear that they, their deckhands, or their children will be excluded, the greater the resistance. On the other hand, the easier it is to get a licence, the less effective a programme will be in reducing excess capacity.

An illustration of a weak approach comes from the United States. A limited licensing programme for salmon in California based initial qualifications on very permissive standards. Basically, a person was eligible if one salmon was landed in any of six base years prior to the programme, or owned a boat under construction during part of the base period, or made a good faith purchase on a vessel intended for salmon fishing. California also included cooperation in landing one salmon as another criterion. Rather than decreasing the licensed fishermen as planned, the number of fishermen participating actually rose in the first year of the programme. Since that time, standards to maintain licences have become far more rigorous at the request of the fishermen.

Most licence control programmes have based initial qualification for licences upon historical landings records. Preference for licensing those who have historically fished is due largely to equity considerations. For example, many fishermen would not think it fair to deprive a life-long fisherman of his occupation while awarding a licence to someone without previous experience.

Historical landings data are sometimes difficult to obtain and to interpret. One issue of interpretation is whether to establish the history solely upon landings of the appropriate species in the specific area, other species in the specific area, or the appropriate species in some larger area. For example, in the British Columbia salmon fishery, the fleet was to be reduced upon introduction of restrictive licensing by limiting ordinary licences to harvesters with a significant involvement in the salmon fishery and phasing small producers out during the next ten years. Later, fishermen with histories of halibut landing, but no recent salmon landings were included in the ordinary licence category. This adjustment was certainly responsive and probably equitable, but it also made fleet reduction more difficult.

Extremely high unemployment, limited other economic prospects, and related social concerns have led to special treatment of aboriginal fishermen in North America (Pearse, 1982) and small-scale coastal artisanal fishermen in Malaysia (Majid, 1984). The decision to give preference to artisanal fishermen sometimes conflicts with a preference for full-time professional fishermen, which is reflected in requirements for significant levels of landings to qualify initially and/or retain a valid licence. The reason is that many artisanal fishermen pursue several occupations in order to survive: they fish a little, farm a little, provide craft products or services to tourists, etc.

In many countries appeals boards or committees are used to determine special cases on the right to receive a licence. In some countries fishermen participate directly on such panels. In other countries fishermen are used only in an advisory manner since judgements are considered more equitable when rendered by a disinterested third party. In either case, judgements on issues such as initial qualifications, conditions on use of a licence, transferability, etc., are often perceived by fishermen to be made equitably. However, equity judgements often depend upon how one defines the groups which are being affected. Public participation is strongly stressed in defining political feasibility.

Several procedures are used to enable individuals to obtain licences after a programme is established. One way is to allow licences to be transferred either freely on the market or through formal government channels. One argument as to why licences should be transferable is that a fisherman who labours long and hard deserves to pass that privilege to other members of his family or to benefit through the sale of the licence. On the other hand, where licences are non-transferable, fleet reduction will take place automatically as licence holders retire, die, or move on to other activities.

Licences in Japan are not granted in perpetuity. However, most fishermen need not worry about losing their licences since the licensing authority, in awarding licences, gives first priority to those already engaged in the fishery in question who provide evidence that they will abide by the laws and regulations concerning fisheries and labour, that their vessels meet necessary technical standards, and that they possess sufficient capital to engage in the fishery. Japan is also one of the few countries which has been able to significantly reduce the size of some of its licensed fleets. However, the major reductions were carried out by placing a high priority in licensing other expanding fisheries first to those vessels and fishermen who were giving up their licences to fisheries with excess capacity. For example, the significant reduction in the size of the East China Sea trawl fishery in the 1950s was made possible through the growth in the tuna longline fishery and conversion of trawlers into salmon catchers (Kasahara, 1973).

3.3.7  Will restrictive licensing cause more administrative and enforcement costs?

Restrictive licensing will be ineffective when fishery data and research results are meager.

For example, implementation of restrictive licensing in Malaysia has been difficult in part due to the lack of good data and in part due to social and political difficulties in acting on the data available. Fishermen sell their fish to a few hundred middlemen with large control over the product. Boats are unloaded at the middlemen's facilities, on the beach, or at sea onto vessels from Singapore. The Government has attempted to centralize landings, but the fishermen ignore the Government's landing facilities because of threats from the middlemen, according to remarks by Ibrahim Mohammed reported in Saila and Roedel (1979). Consequently, what statistics are available are collected by sampling at landing points. Majid (1984) documents a number of other areas where information is either sparse or lacking. Because of this shortage of data, administrators are not able to estimate with confidence the number of licences to be issued by fishery and by area. Neither can they determine the appropriate vessel classification by area, suggest alternative techniques where destructive fishing techniques are to be banned, or develop other measures which they believe to be necessary.

Many nations are impatient with restrictive licensing, expecting high benefits to emerge quickly at low costs. However, well-established licensing programmes have evolved slowly, under trial and error. Early stages of licensing programmes can pose especially difficult enforcement problems. At one time, Japan faced a problem recently of concern to Malaysia(Asada, 1973; Majid, 1984). Namely, there were many illegal, unlicensed boats in certain fisheries and little political support to enforce laws against these boats. In both cases, special exceptions were made to licence the illegal fleets, followed by stronger enforcement programmes against unlicensed vessels after the adjustments to the licensing programme. Therefore, countries adopting new licence limitation programmes should expect some difficulties as a normal outcome of adopting a new administrative approach.

The discussion of restrictive licensing above has been related solely to actions by a nation to its own fishermen. However, many coastal fishing nations also issue a limited number of licences to foreign fishermen operating in the coastal nation's EEZ. The principal rationale is that permits or licences are necessary for foreign vessels if they are to be controlled. Other limitations, such as allocated TACs, cannot be effective if the numbers of foreign vessels are unknown. The presence of unpermitted vessels can only be discovered by vessels or aircraft (Chappel, 1984).

The issuing of a licence to a foreign vessel is often associated with requirements for reports and statistical record-keeping (Bain, 1984; Chappel, 1984). While these data are valuable, a further benefit comes from the incentive to fishermen, domestic as well as foreign, to comply with fishing regulations when violations can lead to loss of a fishing licence (Tillion, 1984). The licence serves as a convenient legal means of stopping the fishery at the appropriate time by simply suspending the licence (Derham, 1984).

3.4  Monetary Measures

Governments collect money from fishermen for many reasons; likewise, fishermen are given money or receive reduced tax obligations, in many ways. While these monetary measures are rarely intended to regulate fishing effort, fishermen are influenced. In this section monetary measures directly affecting fishermen are reviewed. The review does not discuss the very important, but indirect influence of monetary measures directed at fish processors, ports, shipyards, etc. However, any tax which reduces the price paid to fishermen does tend to work like a tax on fishermen; any subsidy, such as one for harbour improvements, which lowers fishermen's costs or makes fishermen more efficient tends to work like a subsidy to fishermen.

3.4.1  Royalties (fees, taxes, charges)

Fishermen pay revenues to the governments in numerous ways. Specific payments may be levied in proportion to the quantity or value of the catch, with the charge varying by species or characteristics of the catch. Fees are collected for licensing gear units, vessels, and individual fishermen (Ben-Yami, 1984). Such fees may vary by gear and vessel characteristic, and may differ by area, ethnic group and many other categories as has been mentioned in Section 3.3 above. Fishermen also pay personal income taxes, property taxes to local governments, fuel taxes, other sales taxes, business income taxes, etc. If they violate fishing regulations they also pay fines. In addition to monetary payments, fishermen may make payments in kind such as providing food to government observers going to sea on fishermen's vessels and providing labour to fishery habitat maintenance activities.

Fishery managers often omit taxes when they discuss major fishery management techniques because taxes are usually imposed for some reason other than to regulate fishing effort and tax administration is carried out by other branches of the government. Governments tend to collect revenues based upon whatever equity criteria are appropriate to their nation. One criterion - ability to pay - causes taxes to be proportional to income and/or wealth. This reduces the income which fishermen receive from working and may lead to a change in fishing effort.

A second criterion - the user principle - causes taxes to be proportional to the use of the public resource. Taxing fishermen by a surcharge on berthing fees could create a disincentive for fishermen to bring larger vessels into port. A very unpopular example in the United States is a proposal to charge fishermen a share of Coast Guard expenses for being rescued. On the other hand, fishing groups have, at times, supported certain taxes which lead directly to more benefits to them; e.g., fish habitat improvements and expanded hatchery investments.

Many economists have argued that the introduction of taxes in proportion to fishing effort and/or catch can achieve many management goals more economically than other approaches (McConnell & Norton, 1980). However, as Crutchfield (1979) points out, there are many problems with the use of taxes as a tool to vary fishing effort in the short term.

In fisheries, subject to wide environmental variation, fishery managers may wish to very catches on fishing effort from year to year. As stocks decline, taxes would have to rise if they are to reduce effort. However, political considerations will make it difficult to increase a fisherman's taxes at exactly the same time that his expected catch has been reduced. Even if tax increases are politically acceptable, the existence of several time lags will reduce their effectiveness. First, there is a legislative administrative time lag associated with any change in taxes. For example, in some parts of the United States, local legislatures are the only bodies permitted to alter tax rates and some legislatures meet only once every two years. This lengthy time lag between public recognition of a need to alter a tax rate and actual implementation of the new tax rate is preceded by a lag between the time something caused fish stocks to decline and the time of fishery biologists recognized what was going on, collected appropriate data, analysed the data, and developed an argument sufficiently strong to capture the interest of the politician. There is still another time delay between the time taxes are changed and the time fishermen reduce fishing effort. There are several reasons for this last lag. Some fishermen may take a while to understand what the new tax rates mean, i.e., they may be slow to process the new information. Many more fishermen grasp the implications quickly, but are limited in their ability to respond. Switching fisheries may require investment in fishing gear or even a different vessel; it may also require accumulation of new fishing skills or information on the location of available stocks; all of this takes time. Further, since some fishermen will be more able to switch fisheries than others, some fishermen will suffer more in terms of reduced earnings due to the tax change than others.

While the difficulties in using taxes to adjust fishing effort in the short term reduce the usefulness of this procedure as a management tool, nevertheless it has been used with some success. When a 1979 hurricane made major adjustments in fishing patterns necessary in Cuba, price manipulations were used in concert with spatial and seasonal regulations to reallocate fishing effort among alternative shrimp stocks (Baisre et al, 1984).

Although short-term variations in tax rates to react to crises are therefore not likely to be broadly useful, many countries could set taxes to adjust fishing effort between chronically over-fished stocks and alternative, less heavily fished stocks. This is most likely to happen where fishing effort is drawn into a fully utilized fishery, landing a species whose price is rapidly rising. For example, Pacific salmon has a much higher poundage fee in the United States than any of the Pacific groundfish species.

A second circumstance where fees have increased is when a successful licence limitation programme has increased the earnings of the remaining fishermen (Bain, 1984). Finally, fees charged by a coastal nation to foreign nations fishing in its EEZ have been varied from year to year (Bain, 1984; Jelley, 1983). In certain circumstances, not only does a coastal nation feel less pressure to preserve the historic earnings positions of foreigners, they may even increase the licence fees in order to accelerate the replacement of foreign fishing effort by their own domestic fleets.

In summary, taxes can serve as an excellent tool for collecting part, or all, of the public money needed to maintain, regulate, and enhance fisheries. They can be used to channel fishing effort towards the less heavily utilized fisheries, although enforcement of tax collection will become more costly as taxation schemes become more complex and as fishermen and processors are given greater incentives to cheat. Finally, the use of taxation as a regulating tool is likely to be feasible only when changes are made over a long period of time. Although there are exceptions in the case of taxing foreigners and in unusual domestic circumstances.

Equity effects of taxes

In many nations, tax revenues are less than public expenditures on fishery research, management, and the maintenance of habitat. Some of the reasons for this anomolous situation are the low incomes and political vulnerability of many fishermen, or so it is claimed.

In a number of countries, licence fees and taxes on landed fish have risen recently with the intention of collecting a larger share of the public expenses related to fisheries. This has been especially important where restrictive licensing and/or property rights programmes have improved the economic well-being of fishermen.

The collection of revenue by a coastal nation from a distant-water foreign nation fishing in the coastal nation's EEZ follows two major approaches. Some countries are charging high fees. Other nations keep fees low, but require fishery development assistance and preferential market access for the coastal nation's seafood exports (FAO, 1983).

Effect of taxes on administration and enforcement

The administrative and enforcement costs of monetary measures will vary widely from country to country. These measures are usually added to other similar measures within countries and may impose few additional costs unless used to achieve very specific fishing effort objectives. Since administrative issues with such programmes have been addressed in some depth above, only a few major issues are identified here.

It has been argued that taxes are seldom likely to be used to reduce fishing effort or to channel fishing effort from over-fished resources to less heavily fished stocks. Enforcement of tax programmes aimed at controlling fishing effort are therefore likely to be either ineffective or quite costly, since both fishermen and their buyers may go to some lengths to evade taxes and/or the intended effort control. For example, if one species is taxed more heavily than another, enforcement will require checking on species identification to ensure that sales records are not falsified. This may be particularly difficult when the fish is partially processed in the catching vessel, to either save costs, or improve the quality of the landed product. Other evasive actions include landing fish at times or places where enforcement is less likely and vessel-to-vessel transfer at sea, including transfers between vessels of different regions of a country (when taxes very within a country) and between vessels from different countries. It should be noted that such problems are similar to those encountered in enforcing quotas.

3.4.2  Financial support programmes

Governments provide financial support to fisheries in numerous ways (Ben-Yami, 1984). The price paid for fish is kept high, quite frequently by restrictions on imported fish, and less often by direct payments to fishermen. At times, fuel costs are subsidized, and/or fuel supplies are made particularly available to fishermen during periods of shortages. While fishing gear and vessel construction may also be subsidized, import restrictions to help domestic shipyards and gear shops may also increase fishermen's costs. Public support is provided for gear research and demonstration programmes which contribute to technical improvements. Low-interest loans may be provided for vessels or working capital. Public expenditures are made for environmental improvement, a factor of great importance for fish stocks spending part or all of their life span in fresh water, estuaries, bays, coral reefs, etc. Fish stocks are enhanced. Significant public investments are made in infrastructure (roads, port facilities, etc.). Scrapping (buy back, buy out) programmes are often supported by public funds to make payments to fishermen willing to leave a fishery. Public expenditures are also made to develop alternative, non-fishing opportunities such as the Malaysian programme to expand agriculture near fishing communities (Majid, 1984). Finally, many countries attempt to stabilize fishermen's incomes which otherwise vary widely from year to year (Brochmann, 1984).

Adverse consequences

Nations tend to achieve many of the objectives just noted for financial support programmes. For example, some coastal nations have developed their own fleets and are reducing subsidies used to bring that infant industry to maturity. However, a number of subsidy programmes have led to undesirable outcomes as well.

In some nations, fishery development programmes although subsidized for good reasons have expanded fishing capacity in fisheries which were already over-capitalized. For example, trawlers built to increase fishing on offshore stocks in Malaysia tended to fish on nearshore stocks (Majid, 1984). Subsidy programmes to increase fishing effort on lightly-exploited resources neglected the multiple-purpose character of most new, large vessels. For example, mid-water trawlers intended to replace foreign fishermen pursuing Pacific whiting (Pacific hake) off the Pacific coast of the United States can only fish for Pacific whiting during parts of the year: other times they catch bottomfish stocks which were already being fully utilized by smaller trawlers.

Subsidy programmes intended to aid low income fisheries or fisheries in low income years have the further result of removing the incentive to move labour and capital resources to the fisheries where then can be most productive and to other sectors of the economy where they could be of more value (Brochmann, 1984a). Once incentives to be productive decline, it is not surprising that an “above average” number of years are seen to result in “below average” income. In Norway subsidy payments to fishermen per man year have increased more rapidly than the rise in wage per man year in the industrial sector over the last decade (Brochmann, 1984).

In summary, financial support programmes can and do play a valuable role in development of fisheries. They are particularly beneficial in the introduction of new technology to increase the health and safety of fishermen as well as to reduce costs and allow fishermen to adapt to new opportunities. They are also useful in contributing to the stabilization of widely fluctuating incomes, facilitating compensation for economic distortions created by government, and achieving equity goals. However, some programmes hamper fishery management, stay in place long after their goal has been achieved, and cause economic distortions of their own.

Economic effects of financial support programmes

Financial support programmes can contribute valuably to economic performance in fisheries in many nations. However, this contribution is often accompanied by undesirable outcomes.

Some subsidy programmes can cause fishermen to use economically inefficient techniques. For example, fuel subsidies produce a tendency to use fuel-intensive, wide-ranging fishing techniques when another technique may have been far more appropriate. Subsidy programmes intended to encourage fishing on lightly-exploited species can often have some impact on expanding fishing on already fully-utilized stocks. Financial support programmes started for good reasons may lead to excess capacity in a fleet, or remove the natural economic forces which would otherwise cause a decline in fleet capacity. Once such programmes are started, they are difficult to remove. Elimination of subsidies at the time fleets grow too large would mean that you subsidized fishermen when they were in a good economic position and removed the subsidy at the same time that incomes were on the decline. Consequently, initial design should include plans for removal of the subsidy before it has caused excess capacity.

Effect of financial support on administration and enforcement

As indicated, subsidy programmes are subject to a number of distortions. Avoiding those difficulties leads to substantial administrative and enforcement costs. To ensure that loans to develop new fisheries do not lead to further excess capacity in fully-developed fisheries requires both a more complex administration in granting the loan (to ensure money is used as planned) and detailed record-keeping in the management agency to ensure that vessels built on specific loan programmes are not transferred into the over-capitalized fishery. Costs and/or political factors keep such administration from taking place other than in rare instances. Political factors also make it difficult to direct financial support solely to certain groups, i.e., if fishermen in isolated fishing communities get low-interest loans, the loans may also become available more generally (Brochmann, 1984a). These problems are made even worse in developing nations when large lending agencies fail to appreciate some of the special circumstances of the borrowing country (Majid, 1984).

3.5  Property Rights

The regulatory measures discussed above have been used in many fisheries where property rights are weak or absent. Where property rights exist, individual rights holders make their own decisions. Various forms of property rights have evolved over time in these countries to meet the needs of each country. The experience with property rights over access to fish and fishing territory with particular emphasis on experience in Japan, Canada, and New Zealand, where a variety of approaches have proved to be valuable, is reviewed.

3.5.1  Territorial Use Rights

Territorial use rights in fisheries have played important roles in many parts of the world for centuries (Christy, 1982; McGoodwin, 1984; Panayotou, 1984). They have tended to evolve where some group found excluding outsiders and defining rules for allocating access to certain fishery resources worth more than the costs of controlling the exclusive use. Among the many techniques for allocating rights are the exclusive assignment of access to certain areas to individuals, or the taking of turns in fishing a certain area. In addition, indirect methods such as the local administration of regulations concerning closed areas, seasons or gear restrictions have been used (McGoodwin, 1984).

Territorial use rights are commonly administered by local governments with or without the sanction of a national government and are, at times, enforced by extralegal means. Examples of extralegal means are the verbal abuse of outsiders, threatened and actual sabotage of fishing gear used by the outsiders, and even physical violence to the intruders (McGoodwin, 1984).

The establishment of sole ownership by a group can lead to a number of benefits. By excluding “outsiders”, the resource can be exploited by a group of fishermen sensitive to the adverse consequences of misuse and having a vested interest in keeping the fishery resources viable over time. Such fishermen are more likely to invest in stock enhancement and community works such as landing sites, artificial reefs, aggregation devices, and aquaculture. The local authority may economize on the use of labour and capital in fishing, particularly when there are other productive activities in the local area such as agriculture. Conflicts among fishermen may be reduced; in some circumstances conflicts between fishermen in adjacent areas may also decline. Finally, more flexible adjustment to changes in technology, markets, resource characteristics and the socio-economic structure of the fishing community may be permitted (Panayotou, 1984).

Several conditions affect the creation and maintenance of territorial use rights. Characteristics of the fish species are quite important; e.g., exclusive control over a certain area is important for sedentary or relatively immobile species such as oysters, for species which can be grown in confined space such as pen-reared salmon, for species attracted to fish attraction devices, and for species which migrate between fresh and salt water. The characteristics of the gear used to capture the fish are also important; relatively immobile gear (e.g., traps and weirs) are more conducive to control over fishing territory than mobile gear. The enforcement of exclusive ownership also requires that boundaries can be defined and defended, that cultural factors support the political and social acceptability of assigning exclusive rights, and that the government has the necessary authority (Christy, 1982).

Historical experience with territorial use rights suggests that they will rise and decline in importance as human and natural circumstances evolve. Many such rights which were viable in early stages of history were weakened, if not dissolved, as human populations grew, new technologies emerged, or species originally harvested for local food used became commercialized (Panayotou, 1984; McGoodwin, 1984). Where such trends have weakened fishing rights, some countries have maintained those rights by granting them legal status. The fishing rights system in Japan is a clear example where territorial fishing rights have been incorporated into national law.


The fishing rights system in Japan has grown out of early regulation in 18th-century Japan. Feudal lords awarded exclusive fishing rights to certain villages in return for payments of royalties. Over time these rights were modified as a lord would grant a special fishing privilege to an individual or a group in return for a large contribution to his government. The “old fishery law”, enacted in 1901, recognized and legalized the rights which had been granted in the feudal system. In addition, new exclusive rights were created in response to fishing opportunities opened up by new technology. After World War II, all fishing rights were cancelled and a new fishing rights system was created to reflect the greater democracy in Japan. Those who lost rights in this reallocation were, however, issued compensatory bonds which could be cashed five years later (Yamamoto, 1984).

The fishing right is a right to fish a defined water area with defined fishing gears. While recognized as a formal property right, it cannot be rented, transferred, or mortgaged. The common fishing right, which corresponds loosely to the exclusive fishing right in the old fishery law is granted only to a fishery cooperative and is accompanied with procedural requirements for coordination within the cooperative (Yamamoto, 1984). Common fishing rights cover littoral fishery resources attached to the sea bottom, small stationary gears operating in waters shallower than 27 metres, and beach seines. Set net fishing rights for larger gear stationed in waters deeper than 27 metres are primarily awarded to cooperatives, but other fishermen with proven capital and experience are also eligible. The third type of right, demarcated fishing right, applies to mariculture in a specific sea area; it also applies in principle to fishery cooperatives.

The fishing rights system, as it originally evolved, was a classical form of territorial use right. As new technology evolved, the fishery commercialized, and population grew, the Japanese have been able to preserve the system by use of laws and administrative regulations. Valuable fisheries which have provided food fish to the populace and maintained secure work places in fishing communities suggest that fishing rights have been very useful.

3.5.2  Allocations of TAC as property rights

In the previous section, we reviewed the sole ownership of a fishing territory as a source of property rights. Earlier in this paper we noted that allocation of catch limits to individuals or specific groups is also an important form of property rights. Two case studies are provided to illustrate the increasing use of property rights to conduct a fishery, and some of the issues which emerge when such allocation occurs.


Territorial use rights have long existed in Canada. Fixed placement of weirs and traps and extralegal agreements among fishermen concerning where each would tend to fish were widely used in the early history of fishing in Canada. In contrast with Japan, as population growth, technological advance, and rising commercial value brought about forces which weakened property rights, the rights were not supported by law. However, as environmental crises and excessive investment in fishing led to heightened concern about fishery management, Canadians began to experiment with individual enterprise quota systems which is more of a property right to fish than the granting of a fishing area. By 1982 there were at least nine fisheries using some such system on both coasts and in at least one large lake (Doucet, 1984). There are also formal proposals to expand use of quota licences in the near future, particularly on the Atlantic coast (Kirby, 1982; Pearse, 1982). In the following section, we review one individual fishermen's quota programme because it dramatically identifies both the possible gains from this fishery management tool and some of the difficulties in developing individual quota programmes.

The Bay of Fundy herring fishery

The herring fishery in the Bay of Fundy began in 1880 as a weir operation providing fish to a canned sardine operation and evolved to a combination of weirs, fixed and drift gillnets, and purse seines of various sizes providing fish into diverse processing channels a hundred years later (Crouter, 1984). In the mid-1960s a collapse in the Pacific coast herring fishery led to the transfer of large purse seiners to the Atlantic coast. At the same time, European vessels were expanding their harvests on the Georges Bank. As a result of the expanded harvest rates, the Georges Bank herring stocks collapsed and the Bay of Fundy stocks were severely depressed (Crouter, 1984).

Following a government freeze on the numbers of units in the domestic purse seine fleet in 1970, quotas were placed on both the Bay of Fundy and Georges Bank fisheries in 1972. Although the growing domestic fleet capacity made management more difficult, the reasons for adoption of radically different regulation measures in 1976 were related to the economic crises in the industry (Crouter, 1984). Here shortened seasons in response to expanding fleet capacity had led to soaring costs, declining prices (due in part to lower fish quality), and conflict among the herring fishermen. The Government agreed to grant financial support in 1975 based upon expectations of major changes to follow.

In 1976, herring sales for fish meal production were prohibited, over-the-side sales to Polish factory vessels were permitted, and purse seine vessels were given individual vessel allocations. Many of the fishermen organized themselves into a marketing “club” which controlled their fishing activities by organizing sales. Fishermen were able to fish together and share their catches. Prices were higher (especially to “club” members who were the only ones allowed to sell to Polish vessels), the season was longer and profits improved considerably (Crouter, 1984; Doucet and Iles, 1981). Success and “club” membership both grew in 1977, accompanied by minor changes in individual vessel allocations.

In 1978, 26 vessels left the cooperative association. Their reasons evidently were to receive less direction in marketing and harvesting as well as less internal monitoring (Crouter, 1984). The removal of “club” control required and increased level of government control. In 1980, both catch and price were down sharply, mutual cooperation among fishermen collapsed and government enforcement of vessel quotas proved to be generally unsuccessful. Direct, over-the-side sales for 1981 and 1982 were approved by the government on the basis that fishermen groups once again form an association to control marketing and, hence, fishing activities (Crouter, 1984).

A recent, thorough review of the Canadian Atlantic policy (Kirby, 1982) concludes that the allocation of a TAC has been an appropriate development, but that procedures must be further modified to support other national goals. Specifically, the further expansion of the domestic fish processing industry requires replacement of over-the-side sales to foreign vessels with sales to domestic processors. The current restrictive licensing system is also to be converted to a system of transferable vessel quotas. The over-capitalized fleet is expected to decline in number as the more efficient vessels buy quotas from the less efficient. To accelerate the fleet reduction, a five-year buy-back programme for boat quotas has also been prepared. While Canada is still in a stage of development of this approach to property rights, many Canadians feel they are making good progress (Kirby, 1982; Crouter, 1984).

New Zealand

In the last section, Canadian experience with allocation of TAC among domestic fishermen was used to illustrate a use of property rights receiving increasing examination in developed nations (see, e.g., several of the papers in Pearse, 1979). In this section, the New Zealand experience with the allocation of a TAC among domestic fishermen, foreign fishermen, and joint ventures is reviewed. This is done to illustrate how a programme with similarities to the Canadian experience can be used as a tool for managing fisheries.

Recognizing international equity principles emerging from Law of the Sea negotiations and desiring assistance in fishery development such as improved resource assessment, technology transfer and overseas market access, New Zealand provided for three classes of fishing preference when it established its EEZ in 1978. First preference went to domestic fishermen, second to joint ventures, and third to foreign fishermen. Under this system trawl finfish catch by foreign licensed vessels fell by more than 50 percent between 1975 and 1980, while domestic fishermen investing in larger vessels moved further offshore, and approximately doubled their catch. However, in 1980 the largest share of trawl finfish catch was being taken by the new joint venture fleet.

New Zealand not only determines what share of the total allowable catch is to go to domestic fishermen, joint ventures, and foreign fleets, but the foreign harvest is allocated into TACs for each country and the joint venture harvest is allocated into company quotas. Company quotas proved to greatly enhance the administrative feasibility of regulations. Since New Zealand required all foreign vessels to obtain a licence, make a first port call after entering the EEZ and before fishing, and a second port call before leaving the EEZ, most enforcement could be carried out inexpensively at dockside; at-sea inspections could be held to a minimum.

Joint ventures were viewed in New Zealand as a transitional arrangement. If domestic fishermen cannot fully harvest a resource, foreign vessels should be allowed to do so, perhaps in return for a royalty, trade concession or other consideration. If the domestic fishermen can harvest the resource, they should. Thus while joint ventures were working out as well in New Zealand as in many other countries, a recent initiative has been taken to convert the joint ventures into a more domestic activity. Starting on 1 April 1983, nine of the joint venture companies, with a greater than 75% New Zealand shareholding have been allocated varying individual quotas which sum to as much as the total quota for some deep-sea species (Waugh, 1984). Initial quota allocation was based on criteria reflecting known performance, available vessels and onshore processing capabilities. Quotas of some species can be traded between companies to permit adjustment of fishing to meet processing requirements (Waugh, 1984).

In summary, New Zealand has evolved a system of allocating shares of the total allowable catch to specific fishing companies as an approach to the development of their deep-sea fisheries. Foreign equity holdings, advice, and technology transfer are permitted, but only in a context which permits domestic fishery development. For fisheries where joint ventures have not proven to be viable, foreign fisheries continue to remain a significant factor.

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