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53. Having heard about some of the issues in the USA regarding capacity and efforts to reduce capacity, the discussion shifted to the purpose of the expert consultation; namely, for the participants to:

identify and outline innovative strategies and mechanisms for convincing stakeholders to reduce overcapacity and subsequently avoid the regeneration of overcapacity.

54. Beginning with a brief, general roundtable discussion about potential barriers to implementing capacity reduction (CR) programs, the following issues (in alphabetical order) were mentioned as potentially creating barriers to the adoption and implementation of capacity reduction programs.

54.1. Awareness and recognition - and the difficult balance between capacity and long term problems of overcapacity as well as of the fact that benefits from capacity reduction programs will not likely be immediately measurable;

54.2. Balances of power and distributional issues - and how these may occur within fleets, between various parts of fleets, as well as between different stakeholder groups;

54.3. Development - and how coastal states have the right to fish and how this may affect having fishing vessels, even when overcapacity may already exist;

54.4. Displacement - and the movement and impacts of fishers when capacity is shifted out of one fishery but not necessarily removed from fishing;

54.5. Employment - and using fisheries as an alternative livelihood of last resort;

54.6. Financing - and who should pay or, at least, contribute to capacity reduction programs and of how good financial conditions may inhibit stakeholders’ interest in undertaking capacity reduction strategies even when overcapacity exists.

54.7. Food security - and using fisheries as food source of last resort;

54.8. Globalization - and how market forces are reaching further and creating new incentives and pressures on previously isolated resources before local societies are prepared to deal with these forces; market forces, technological change and innovation, predicting change and continuous adaptation,

54.9. Governance and institutions - and how informal systems may perform better but have less formal legitimacy than official processes and how different stakeholder groups may make use of existing institutional arrangements to achieve their particular objectives;

54.10. Information and education - and about the real and perceived outcomes, objectives, and goals that different user groups may have; how different cultures may accept or reject capacity reduction programs; and about trust and accountability;

54.11. International cooperation - and the need to share knowledge, outcomes, and benefits about efforts to reduce overcapacity;

54.12. Limitations - and the fact wild capture fisheries are not capable of providing food, employment, and income for all who want to use them;

54.13. Management and management systems - and how existing regulations may influence, cause or change fishing behavior, and how to harness technology so that it increases productivity of the fleet while also supporting capacity reduction;

54.14. Objectives and Perceptions - and how much fish different user groups actually caught versus what they should be allowed to catch as well as the disputes that conflicting objectives may create;

54.15. Politics - and how management decisions may be influenced or changed by politics;

54.16. Range of a fishery and the numbers of participants - and how potentially enormous numbers of participants who may be individually operating at low levels but having significant cumulative impacts; and

54.17. Serendipity and Total Chance - and how the adoption of capacity reduction programs may simply depend on a combination of factors that cannot be controlled or predicted.

55. Without prioritizing these, the discussion shifted to a common theme that linked all of these issues - information and education of all stakeholders who would be involved in some way with the design, adoption, and implementation of capacity reduction programs.


56. To assist the participants in focussing on the most basic issues regarding capacity reduction programs, the discussion was directed to consider a very simple, hypothetical situation of overcapacity in a high capital-to-labor ratio fishery[8]. The hypothetical fishery involved a single and not highly variable - but overfished - stock. It was being harvested by a single homogeneous fleet. And, it occurred within a single jurisdiction, to which access was limited.

57. One of the first points of discussion was that - because capacity reduction will probably involve changes to people’s livelihoods, lifestyles, and lives - discussions about overcapacity and capacity reduction will create significant uncertainty and concern for those who may be affected. Thus, it is absolutely critical to provide and share unbiased information, guidance, and education about the effects of overcapacity, the effects of various capacity reduction programs, and the longer term impacts of reducing capacity.

58. For example, many local efforts to address overcapacity in a fishery often can be slowed or blocked by the objective of trying to maintain local employment - or by concerns about potential losses of employment. At the national level, broader objectives of resource and overall employment may make capacity reduction programs less difficult to implement, simply because concern about particular local employment issues may not be as strong. However, even at the national level fishery management authorities have been reluctant to deal with overcapacity due to the issue of having to put people out of their current fishing jobs. (It was also noted that in some countries there may be differences in the balance of power amongst different stakeholder groups that may need to be taken into account.)

59. Allocation issues - who gets what - are part of dealing with overcapacity problems. As a result, the details of who “wins” and who “loses” - may be at the center of arguments for not addressing overcapacity.

60. There was strong belief that a co-management approach is likely to produce a more positive and durable outcome. As a result, the group believed that it is useful to present the problem of overcapacity in a particular fishery to the fishers in ways that allow them to see how, if action is taken, it can improve their personal situations as well as the condition of the fishery.

61. It will be useful to share and communicate knowledge, both informally and formally, amongst and between administrators, fishers, managers, scientists, and other groups.

62. It is also important to understand the particular situation, the particular people and fishery who are facing a situation of overcapacity. Formally, this can be described as “needs identification and assessment”. Informally, it means learning as much as possible about the issues and critical human problems facing the fishers. This process of working with fishers and others to make decisions about the actions to be taken also helps all stakeholders to better understand the implications of not taking action.

63. The main issues raised in this discussion are listed in Table 1. Based on these issues, the group identified the essential elements and steps for sharing information and knowledge; namely, that it is important to:

64. In this way, fishers and the people in a fishery management authority can work together to implement a specific capacity reduction plan.

65. The participants noted, however, that in just about any fishery, it is not possible to convince everybody about the benefits of reducing overcapacity. In the end, there will be some fishermen who will benefit, and some who will lose. Thus, it is also important to work to reduce the losses to as few participants as possible.

66. At the conclusion of the discussion regarding information and education, the group designed a possible communication pathway for sharing information with stakeholders about overcapacity and different capacity reduction strategies, options, and impacts (Figure 2).

67. Discussion Outcome: Information and education about overcapacity, capacity reduction, and different types of capacity reduction programs is critical.

68. Providing and sharing this information with fishers needs to be the first step, followed by working with political persons. Next, the economic aspects and the management approaches for practically achieving a particular capacity reduction strategy need to be shared.

Figure 2. Communication pathway

Table 1. Information and educational issues associated with capacity reduction programs







Discuss with stakeholders Create-interest/“buy in”

-What knowledge to impart? There is a need to differentiate from the normative knowledge and positive knowledge with regard to capacity reduction.

How does one recognize the group(s) to educate?

· stakeholders
· general public

the start up process: Stakeholders, including

· movers and shakers
· serendipity
· political path
· agency path

Duration: Run an information “campaign” over 12 months or other duration

Timeframe for the education program will depend on the time frame expected to reduce a targeted level of capacity.

· Govt.
· Stakeholders
· Others
· NGO/donors

Include ministry in research

implications of no capacity reduction for industry, the fishers, government

Why will others listen to managers?

· need to create confidence

Stakeholders, including

· political stakeholders
· operational stakeholders
· technical stakeholders (fishermen, other operators)

The country - and degree of democracy - may be VERY relevant to such an education process.

Consult and talk with fishers

Consult and talk with related stakeholders

Determine community concerns

provide options for reduction

Education for whom?

· fishers
· scientists
· administrators
· related stakeholders
· communities
· political, operational, and technical stakeholders

Pathways of communication: In developing countries policy is often driven from the top through the cabinet decisions, thus:

· There may be a need to influence politicians at the top to make any policy realized.
· At the same time there is a need to understand the needs at lower political levels (e.g., at the fisher level) so that appropriate policy can be pushed from the top.
· To influence policy there is a need to drive it from both the bottom and from the top.

Possible Approaches

· encourage fishermen to take continuing training programs
· training course on capacity reduction program (e.g., 2 months)
· provide organized knowledge about overcapacity and capacity reduction programs to minimize confusion and misinformation
· explain the economic and social benefits of capacity reduction programs

Encourage scientists to work in collaboration with fishers

high grading in fisheries education to fishermen

Who decides what to teach?

Radio-TV program(s)

scientific information and research program

educate policy makers: economics versus conservation

How to get knowledge to policy makers and members of parliament?

· Part of the issue is when are you pooling ignorance and when are pooling knowledge.
· There is a need to organize knowledge so that it does not add confusion with regard to the problem.

Publicity brochure on capacity reduction program - ongoing

Talk to member(s) of parliament

explain needs for reduction


Work to build consensus

explain potential consequences, both positive and negative

Target the press


69. The discussions next focused on a series of topics that may need consideration when trying to generate interest and support for capacity reduction programs.

70. These topics included:

71. Again, the discussions focused on the purpose of the expert consultation; namely, how these different elements might influence the design of capacity reduction options, facilitate or prevent the adoption and subsequent implementation of capacity reduction programs, and avoid the regeneration of overcapacity.

72. The following sections reflect the ideas and outcomes that provided the basis for the general recommendations and guidance of the expert consultation.

Social Concerns/Issues

73. The expert consultation agreed that social concerns can create potentially significant barriers to designing, adopting, and implement capacity reduction programs. Thus, it is critical to include and address the following in the design of any particular capacity reduction package. (See also Table 2.)

73.1. Employment displacement and the degree of related opportunity costs - The extent to which new or alternative jobs or few other means of earning income are readily available will influence concerns about short and long term hardship, if not poverty, for fishers and the extended community.

73.2. Social heterogeneity and/or cultural resistance - Both a diverse community or one in which there is resistance to change, there will be difficulties in building consensus. If there is considerable social heterogeneity amongst the participants in the fishery, the development and design of a capacity reduction program will have to be more sensitive to different groups concerns and needs. Similarly, if there is cultural resistance to not being able to fish and/or a desire to maintain fishing as a way of life, then it will be more challenging to try to convince fishers of the need to reduce overcapacity and to have fewer fishers.[9] As a result, it is important to consider overcapacity and capacity reduction in the full context of the objectives and goals of the management of the particular fishery.

73.3. Knowledge-based perceptions - There may be many incorrect perceptions about what capacity reduction programs can and cannot do and the impacts that they may or may not have. Thus, education is a key element for overcoming uncertainty and creating program support.

73.4. Historical or traditional rights - If there are long-standing traditions of fishing, these may be difficult to overcome, regardless of the current legal or fisheries governance system. Again these are sensitive and important matters to incorporate into the design of a capacity reduction program and to consider when working with the stakeholders to build consensus.

73.5. Fear of Change - Uncertainty about social change and about destabilizing a community can create enormous barriers to being able to address overcapacity. Education, information sharing, and listening and responding to these concerns is critical to build trust, confidence, and the success of a capacity reduction program.

73.6. Upstream and down-stream effects - Capacity reduction programs will probably have impacts on related sectors. The perceived, if not the actual, magnitude of these distributional impacts can create barriers to the adoption and implementation of capacity reduction programs.

73.7. Mistrust and concerns about social justice - There will be so-called “winners” and “losers” as the result of a capacity reduction program, and this will likely create resistance to such programs. This may be especially true if there are concerns about social inequalities, discrimination, and/or changes in balances of power.

Social Concerns: Potential/partial solutions

74. Table 2 lists some of the potential means to overcome potential social barriers or issues within the design of a capacity reduction program.

75. The specific design of any particular capacity reduction program and the particular solutions to social concerns will likely reflect the particular situation being addressed. However, there will likely be similar types of solutions, such as those addressing:

76. It is important to create better understanding about both the short- and long term effects of capacity reduction programs to reduce these concerns.

77. The process for addressing overcapacity involves people and creates - at the very least - temporary uncertainty about their livelihoods and, frequently, about their incomes. Unfortunately, these concerns will probably be just as much about perceived and potential effects as about likely actual effects.

78. More specifically, the suggested solutions included:

79. One of the significant outcomes of this discussion was the consensus about the energy and commitment needed to make these sorts of programs successful.

80. Discussion Outcome: There are no quick solutions to mitigating social concerns.

81. The possible proposed solutions involve communication, training, and trust-building - activities that take time, dedication, and patience.

Table 2. Social concerns associated with capacity reduction programs










poverty from loss of employment

no alternative incomes

local food security and employment

social diversity

value of traditional society

perception of CR program may be a function of the level of stakeholders’ education/understanding

participants “rights” to subsidies for fishing

uncertainty about social change

can schools support less students - impacts on other residents

CR - likely to change and perhaps increase social inequality

CR will cause loss of employment in short run

alternative crew employment in area

heterogeneous social groups

fishing as a way of life

perceptions (wrong)

the “right” to fish

bias in social stability - and fears of destabilizing community

CR efforts can go beyond the harvesting sector

resistance due to the (perception) of being discriminated against

poverty and lack of alternative livelihoods

limited alternative employment opportunities

CR will affect different groups on different areas differently

reluctance to impose sanctions

educational barriers (level of education is too low)

difficulties in obtaining consensus

impact on related activities (e.g. shipbuilding, inputs



social/ethnic religious/ language heterogeneity

loss of lifestyle

fear of unemployment /displacement

distributional impacts

community displacement

community displacement

lack of well-defined communities

reduction in quality of life

role of different social organizations e.g., associations, fishermen’s cooperatives

ability to adjust to CR programs

no/lack of community support

socio cultural barriers to change

opportunity cost of labor

extinction of fishing dependent communities

loss of job related satisfaction

loss of prestigious job & status

local culture

Table 3. Potential means of addressing social concerns in the design of a capacity reduction program









design and implement acceptable compensation program

alternative job opportunities

public meetings present evidence solicit opinions / solutions

educate about the eventual problems if there is no capacity reduction

community meetings and discussions on fishing rights

outreach to various groups

tax over remaining capacity or transfers to people who “lose” (investment or work-wise)

explain the impacts of capacity reduction programs and the respective distributional consequences

ensure the linkage between social programs and the capacity reduction program

provide development assistance following adjustment program

explain impacts of capacity reduction programs and their distributional consequences

improve understanding of benefits and impacts of a capacity reduction program by fishers

implement co-community based management

explain the impacts of capacity reduction programs and the respective distributional consequences

identify the upstream and downstream effects - costs & benefits

reach out to and work with various groups that would be affected

develop an alternative livelihood program for those who may be displaced

set up job training programs

explanation and getting community consensus on the state of fisheries

enhance education levels of fishers

provide and explain information about the inevitability of change


campaign for non-consumptive use, alternative livelihoods

provide alternative training and employment

develop cross-community fishery management group

outreach to various groups

discuss implications of capacity reduction with those to be affected to help reduce fears

provide transfers to people who lose (investment or work-wise)

provide feedback to the community - information on expected outcomes (including problems)

institute retraining and education programs

outreach to various groups

information - present realities

provide alternative training and employment

provide alternative training and employment

introduce unemployment compensation during transition

remote development / alternative fisheries

discuss implications of capacity reduction with those to be affected (reduce fear)

undertake broader education related to a capacity reduction program

conduct training about capacity reduction program impacts

tax remaining capacity

tax over remaining capacity or transfers to people who lose (investment or work-wise)

provide opportunity for relocation grants if desired

accompanying measures to protect cultural values

provide information about present-day realities

offer income support during transition

to make proposals on economic alternatives, e.g. eco tourism, sea farming

build consensus amongst social organizations about capacity reduction programs

educate about potential unemployment and income levels if no capacity reduction

set up retraining programs

involve stakeholders

Legal Concerns/Issues

82. The expert consultation examined the sorts of legal issues and concerns that might arise when trying to design, adopt, and implement capacity reduction programs. Described in Table 4, the following six categories of issues were discussed as creating potential barriers.

82.1. The definition(s) of rights - Issues relating to the definition of access or other property rights, historical rights, takings, and constitutional rights may all affect what may or may not be considered as options for capacity reduction programs. These considerations will vary from State to State and from jurisdiction to jurisdiction.

82.2. The ability to actually formulate capacity reduction programs - There may be practical limits on the power or abilities of a fisheries management agency to design or implement a capacity reduction program. There may be existing legislation that limits the types of options that could be suggested and designed. Similarly, other legislation for other purposes may have to be considered, taken into account, or even specifically addressed and, thus, influence the options for capacity reduction program or the details of a particular program’s design. Examples may include endangered species legislation, labor legislation, and financial legislation.

82.3. The ability to enforce capacity reduction programs - The problems of monitoring, control, and surveillance are not new ones. However, in implementing capacity reduction programs, having adequate enforcement is critical, especially when it may take several years to see the benefits of supporting and participating in capacity reduction rules. Efforts to reduce illegal fishing are similarly important.

82.4. Various judicial or other legal dispute resolution issues - Judicial and other dispute resolution systems are essential to achieving due process, but they can also hamper the implementation of capacity reduction programs. There is a need to ensure that the participants in these systems are fully briefed and understand what is to many, the relatively new issue area of fisheries and fisheries management. Without this information, for example, the penalties and other punishments may not reflect the seriousness of the problems they are meant to address. It is also important to design capacity reduction programs in ways that do not allow a few participants to stall their implementation to the detriment of all other participants.

82.5. Existing regulatory mechanisms - Even when there is interest and will to simplifying rules and regulations, driving change in a bureaucracy can be difficult. Complex legal frameworks and the time to write or change existing rules and regulations can slow or even stop the adoption of a capacity reduction program. If there is a poor legal framework, it may need to be strengthened or otherwise clarified before capacity reduction strategies can be considered. Similarly, if there is a lot of bureaucracy, existing regulatory mechanisms and methods may make it difficult to introduce new, different or innovative programs.

82.6. Informal arrangements or other relationships - It is normal that informal arrangements or other relationships between members of different sectors exist. If various constituent groups have objectives that are different from those of a capacity reduction plan, the groups may call upon these informal relationships to achieve their respective objectives, potentially creating conflicts or creating barriers to the adoption or implementation of a capacity reduction program.

Table 4. Legal concerns associated with capacity reduction programs







constitutional rights access rights property rights

limitation on power of agency

law and regulation enforcement mechanisms

court/judicial decisions

bureaucratic methods (no dialog)

arrangements between members of various sectors

badly defined property /access rights

existing legislation may limit type of program

develop enforceable laws and regulations

propensity to sue increases legal back costs, delays/slows implementation

complex legal framework

need to know what constitutes a “taking” and the “right of taking” by government

other legislation may have to be considered and/or affect capacity reduction program options e.g. endangered species

problem of monitoring control and surveillance

failure of penalties to be enforced in courts

simplification in rules and regulations

Need to understand the difference between property rights and access rights

conflicting legislation prevents viable capacity reduction program

monitoring and enforcement capacity

retarding in law application

time required to write or change legislation

Need to be aware of the existence of historical rights

legally required analysis may limit consideration of capacity reduction programs

limits in the authority of fishery management agencies

no proportion between punishment and profits to not respect limits

poor legal framework

the existence of legal “common property”

requirements for adequate scientific information for implementing a capacity reduction program

reduction in illegal fishing [legal efforts to cope with the existence of this]

public awareness on capacity reduction law and regulations

constitutional issues & constitutionality of some capacity reduction programs

legal limitation on the types of capacity reduction programs that can be implemented

enhance legal efforts to cope with illegal fishing

inconsistency between laws

“poison pill” reservations / clauses on certain measures

prohibition on certain measures/options

separation of law makers (executive and implementers (administrators) - different roles of government

inconsistency between laws

Legal Concerns: Potential/partial solutions

83. The expert consultation listed various practical options to try to overcome some of the legal issues that they identified. As with other areas of concern, knowledge building, information sharing, consensus building and transparency were priority actions as part of addressing legal issues.

84. Knowledge building, information sharing and constituency building may involve the building of consensus with stakeholders who are part of the legislative processes at both local and national levels. This is especially true if there is a need to amend or to write new legislation.

85. Discussion Outcome: It is very important to create incentives for self regulation - by understanding the business realities of fishing and by building on local, traditional, and customary forms of compliance.

86. In the short term, capacity reduction options may need to reflect the practical realities of existing legal and enforcement budgets and penalty systems. However, this does not prevent longer term efforts to change legislation and to set up regulatory structures in ways that encourage flexibility and responsibilities.

Table 5. Potential means of addressing legal concerns in the design of a capacity reduction program







enumerate property rights consistent with constitution

seek local and national support constituency building, etc

improve the regulatory programs (and funding for) of enforcement and compliance

reinforcement of need to impose adequate penalties in courts

local arrangements

develop framework for public inquiry into fisheries management

undertake definition or clarification of fishing rights

review of legal requirements for capacity reduction program

consider the cost application of regulations before adopting it

public inquiry into fisheries management framework

seek local and national support,

clearly define access rights

build consensus with congressmen, legislators, executive, judicial, politicians

create incentives for self-enforcement

develop framework for public inquiry into fisheries management

undertake constituency building, etc

flexibility in law

redrafting fisheries legislation

develop enforcement program that is practical, feasible

transparency in public reports

amend constitution

framework adjustment / devise escape routes in legislation

eradicate corruption in law enforcement

speed up court cases regarding fishery management disputes

adapt law to use scientific evidence

public inquiring into fisheries management framework

strengthen the capacity of law enforcement personnel

“sunshine” laws - legal transparency requirements

update / revise legislation to meet issues of today

simplification of legal dispute procedures

limit the discretion of judges´

alternative legislative requirements

lobby for neutral change legislation to require neutral treatment of all different regulation types

new comprehensive legislation to remove conflicts between existing laws

Financial Concerns/Issues

87. During this part of the expert consultation, the group focused on financial concerns and did not focus on social or economic costs. As a group, the expert consultation did not discuss the various incentive adjusting management tools that are also available for reducing and preventing the reappearance of overcapacity.

88. Instead, the discussion primarily covered the five financial issue areas below that are only relevant to buy-back programs and not a broader range of financial issues that may arise generally as part of capacity reduction (Table 6).

88.1. Information - Information gathering, especially the cost of research, was seen as a potentially significant barrier to providing full information about capacity reduction programs. However, it was noted that capacity reduction programs could be implemented with a minimum of research.

88.2. Management and program costs - Capacity reduction programs require more than a one-time, direct cost of a buyout. Thus, even with buyout programs, it is important to include the subsequent costs of running the management program that follows a buyout. In addition to such direct costs, it is important to clearly document the transfer and use of funds for capacity reduction, so that all stakeholders can clearly account for monies raised and spent.

88.3. Buy-back hurdles - There are several categories of financial issues regarding the distributional consequences of capacity reduction programs, especially those including buyouts as part of the program. Perhaps the biggest concern is the question of who pays. The financial concerns listed in Table 6 regarding the funding of buybacks as part of capacity reduction programs are very much linked to financial distributional concerns.

88.4. Distributional consequences - While some participants may want the government to fund or offer other financial assistance, the principle of “user pays” is one that civil society is frequently using when talking about natural resources. Thus, if remaining participants benefit from capacity reduction programs, they may also be the ones who help to fund the adjustment process. In other situations, donor organizations, seeking to provide the community at large with the benefits of capacity reduction, may consider paying for the temporary benefits achieved through buyout programs. For the participants who exit a fishery, it is important to assist their transition to new activities and livelihoods.

88.5. Competition for funds - Even in countries where funding is not a barrier in itself, budget priorities, within fisheries administrations and at broader government levels, may not consider the funding of buyout programs as a high priority. In countries where funding issues are extremely serious, buyouts may be not be considered a main concern when compared to other matters. If the fishing industry is going to fund its own buyout program, then the current financial position of the participants will have a significant influence on the ability to self-finance this part of a capacity reduction program.

Table 6. Financial concerns associated with capacity reduction programs






cost of research

cost of management structure in which capacity reduction is included

financial transfer to support buy-back systems

who pays? industry or government (society)

budget priorities

costs of implementing a capacity reduction program

levels of direct costs of program

buy-backs are expensive

user pays principle

priority of budget allocation

costs of implementing social components of capacity reduction programs

program costs

remaining participants pay for those who exit

specify benefits of capacity reduction

low priority to compete for (treasury) funds

malpractice of fund administration

not possible to recover investments

who benefits/profits? the community or industry?

opportunity cost of public funds

transparency on subsidies

who pays for the adjustments?

availability of donor aid

ability to transfer costs

welfare coverage from loss of employment

lack of funding in developing countries

invest in other alternative activities

financial condition of industry

help to move to other activities

sustained source of funding

public and private financial support

relative wealth of competing groups to pay

Financial Concerns: Potential/partial solutions

89. Many of the solutions to financial concerns that were offered by the expert consultation were linked to the notion of transparent and accountable comparisons of costs and benefits.

90. The ideas of coordinating capacity reduction research as a cost saving, setting priority areas for further capacity-related research, considering various capacity reduction approaches, and evaluating the costs of doing nothing are all related to the notion of providing the best possible policy advice as the basis on which to make capacity reduction decisions.

91. When comparing various capacity reduction programs, it is critical to pay attention to the total program costs (including ongoing management) and not just to portions of a capacity reduction program, such as the buyout component.

92. This is essential when competing for funds and/or trying to secure donor funding to implement the program. However, even the most balanced benefit cost analyses may not be able to overcome historical issues or precedence and the influence of these on the feasibility of different options for capacity reduction tools that are applicable in a country.

93. It is also crucial to know the costs of doing nothing new, particularly because existing management program costs may continue to escalate over time when there is overcapacity. In addition, because reducing capacity can frequently mean a reduction in the participants in a fishery, it may be necessary to secure some form of income compensation for them as part of the reality of getting the capacity reduction program adopted.

Table 7. Potential means of addressing financial concerns in the design of a capacity reduction program







capacity reduction program management costs (including implementation, monitoring, surveillance, etc.)

secure funding from donors and other stakeholders

develop scenarios about property rights systems

adopt the “users pay” principle

develop program with industry to minimize costs and create link to the various distributional consequences

create partnerships - for funding link to distributional consequences

competition for funds

evaluate the cost of “doing nothing” and information collection

cost benefit analysis of the capacity reduction. program as part of marketing the capacity reduction program

lobbying/marketing for funds

buy-back hurdles

income compensation programs may be necessary to get capacity reduction program adopted

cost-benefit approaches

distributional consequences

distribute financial costs amongst users/society

Political Concerns/Issues

94. In addressing the matter of political concerns, the expert consultation focussed on the six issue areas listed in Table 8 and described below.

94.1. Ideas and the decision-making framework - Participatory processes, from local to multi-national, were deemed to create more durable solutions in the long term, but potentially more difficult to set up and implement in the near term. However, with increasingly global markets these days, fisheries may provide an entrée to additional international activities. In working to build amicable working relationships with policy makers and politicians, it may also be essential to work with party agendas and various spheres of influence.

94.2. Defining the decision-making framework and process - The politics of setting up and implementing capacity reduction programs may make it essential to understand who or which administrative entities may have the power to run the program and who or which entities should run the program. Thus, it is important to be aware of the balances of power amongst different politicians, policy makers, administrative agencies and agency staff.

94.3. Representatives’ political objective and mandates - The challenges of overcoming problems such as those associated with capacity reduction programs are difficult ones that may not be political priorities, politically expedient or timely. Elections, party issues, and political will are issues that can work to create political support for capacity reduction programs, but these issues can also result in the postponement of political support until more opportune times.

94.4. Different costs - The financial and social costs of capacity reduction programs, especially in the short term, are likely to create political discomfort unless capacity reduction programs are designed to include ways of addressing these issues.

94.5. Information and understanding - Many potentially significant political concerns associated with capacity reduction programs will reflect the current widespread lack of understanding about the impacts and issues of addressing overcapacity. Constituents’ incomplete knowledge, perceptions and fears about change will also likely create areas of concern for politicians if there is little or no guidance offered about the impacts, changes, and benefits of addressing overcapacity as part of justifying the need for capacity reduction programs.

94.6. Decision-making mechanisms - Political concerns generated by the idea of capacity reduction programs can range from situations that are quite normal - such as public hearings- to situations that are difficult, such as demonstrations and consultations run by the party in power.

Table 8. Political concerns associated with capacity reduction programs







participatory process versus non-participatory

define who are the decision makers

politicians like to conciliate

likely to increase unemployment ® poverty

ignorance of impacts

public hearing

multinational cooperative approach

management of program - who gets it - may not be who SHOULD have the program includes issues of who is going to fund the program

short term problems / difficult decisions & long term benefits may not be appreciated by politicians

unemployed constituents

fear of change

legal demonstrations

existing situation

politicians, policy makers, administrative agency staff


1) no loss of influence

2) minimization of complaints

hard to get support when individual outcomes are uncertain

failure to understand problem

expert consultation in ruling party

for politicians - a greater opening on world-wide fisheries

fisheries may not be highest priority

program costs

lack of understanding

build up amicable working relationships with policy makers and politicians

there may be vested interests

politically determined funding options

acceptance of capacity reduction

formal and informal influencing groups

the frequency of elections may affect political interest and support

encourage change of politicians views about capacity reduction programs

fisheries cooperatives work

capacity reduction programs can be stopped through the political process

justification of needs

determination of which government department holds responsibility for capacity reduction

fisheries may be a relatively unimportant industry (commercially) or relatively small political constituency

poor signals to politicians

not good to appear too different relative to other administrators

political will may change throughout the process

Caveat: there may be two-stages of decisions:

1) to undertake (or not undertake) capacity reduction; and then

2) how to undertake the reductions within a capacity reduction program

Or, there may just be a political mandate to proceed.

Objectives of the Politician(s) and/or power groups may require balancing or maintaining groups’ power

Political Concerns: Potential/partial solutions

95. The discussion of potential or partial solutions to political concerns focused on the need to know how to capture the power of various political objectives and processes without creating significant additional problems for politicians (Table 9).

96. The basis of the decision-making framework is the definition of roles and responsibilities, especially for the design and implementation of a capacity reduction program. This may involve setting up regional or more local fisheries management authorities or a framework that allows the industry to regulate itself, either in part or fully.

97. Similarly, a key part of defining the decision-making process is to identify the beneficiaries of capacity reduction programs - such as civil society, fishers, other users of the marine environment - and to involve these groups in the decision-making processes of capacity reduction. A related possible solution that can be part of the decision-making mechanism is to provide financial and other support resources during the transition period to those directly affected. It is also important for the design of a capacity reduction program to provide possible solutions to address potential unemployment.

98. If industry and other constituencies are supportive of a capacity reduction program, this can help to overcome concerns that politicians may have about achieving their political objectives and mandates. In some cases, it may be more powerful or successful to ensure that industry is on-side and informed than to work on the political side of things. However, in other cases, the political sector and angle may be stronger and be able to over-ride pressure groups.

99. The different costs of overcapacity - to society at large, to fishers, to future generations - as well as the immediate costs to the fishing industry, consumers and other sectors need to be clearly explained as part of the process of recognizing and reducing political fears about capacity reduction programs.

100. Politicians’ understanding and knowledge of the complexities of capacity reduction programs can be greatly enhance if both the costs of doing nothing and the elements and costs of the long term problems of overcapacity are fully and clearly explained. This knowledge sharing process should include an explanation of all the various angles and elements of capacity reduction programs, including clear information about the so-called “winner”, “losers”, and what will happen to them.

Table 9. Potential means of addressing political concerns in the design of a capacity reduction program







fishery management councils

identify beneficiaries

get industry on-side (see information/education

industry groups

expose the long term problem

provide resources for the transition

define stakeholders’ responsibilities

involve beneficiaries in the decision-making process

provide possible solutions to deal with unemployment


re-enforce the social and economic costs of doing NOTHING

utilize market mechanisms and the power of the consumer

transparency on distribution of fishing rights

link capacity reduction with other programs

other sectors

carry out education programs to ensure politicians get the full story

industrial self-management framework

open pathways for all sides to lobby/promote their perspectives

other groups

engage politicians through dialog

formal and informal decision-making mechanisms (identification)

rally/lobby politicians to support capacity reduction program

educate decision-makers about the benefits/costs

regional fisheries management councils

form coalitions with wider groups outside fisheries

convince politicians, policy makers of the benefits and impacts of capacity reduction programs

process based on subsidiarity principles (smaller cost)

build consensus, targeting opinion makers

inform and educate by carrying out structured lobbying campaign(s)

Management Concerns/Issues

101. In many ways, the management concerns listed by the expert consultation reflect the enormous changes occurring in the field of fisheries management. Indeed, it is not only information and analytical requirements are expanding far beyond what was previously sufficient for managing fisheries. Institutional, policy, and management issues are also changing rapidly.

102. Table 10 shows just some of the management-related issues that were identified as potential barriers to the introduction and implementation of capacity reduction programs, including the following.

102.1. Information and analytical requirements - Information and analysis that supports fisheries management is increasingly necessary. This is especially important because the incentives that cause participants’ behavior are counter-intuitive and not like those in agriculture or other businesses.

102.2. Institutional impediments - Fisheries management is undergoing enormous changes in the roles that different stakeholders play. The role of industry in the management process is changing as fisheries managers and others try to determine who has management authority and for what decisions. Even the growing number of agencies with different elements of jurisdiction over the marine environment and its use creates potential barriers to the introduction and implementation of capacity reduction programs.

102.3. Legal impediments - As discussed in the previous section, legal impediments can allow or prevent the use of certain capacity reduction management strategies, potentially constraining management options.

102.4. Knowledge levels of managers, policy makers - As in any discipline, change creates challenges and requires continuous improvement. Uninformed managers and policy makers can thus create significant challenges to the introduction of comparatively new approaches to addressing overcapacity. Similarly, administrators may not be as aware of market realities and incentives that fishers may face on a daily bases.

102.5. Compliance - Weaknesses in enforcement as well as the lack of enforcement capabilities can pose significant barriers to capacity reduction programs, especially if the reduction programs rely on incentive blocking measures and fail to motivate participants to enforce themselves. Cost recovery in management is a relatively new concept that is not applied in many fisheries, thereby further requiring fisheries managers to match enforcement forces with existing budget realities.

102.6. Reluctance to involve stakeholder participation - Many management authorities are still trying to find a useful level of public input into the fisheries management process. User participation, roles, and responsibilities are not yet clearly resolved.

102.7. Entrenched management biases - There are both potential human and mechanical biases that may pose barriers to fisheries management. Personal backgrounds, biases, interests and incomplete understanding of management options can limit the use of innovative management approaches to addressing overcapacity. In addition, the lack of managers with social science and people management skills can seriously limit the ability of management authorities to manage fishers, i.e. the people who fish. Similarly, the belief that rules or regulations without taking human concerns into account can limit capacity reduction program options. Even the notion that fisheries management is the management of people, not fish, is a relatively new concept that is not necessarily well accepted by managers around the world and thus poses a potential barrier to dealing with the human issues of overcapacity.

102.8. Distributional effects - Both the actual and the perceived distributional effects of overcapacity and capacity reduction programs can create enormous barriers to the introduction and implementation of capacity reduction programs.

102.9. Multiple management objectives - Multiple, and typically conflicting, management objectives can be found in fisheries legislation and in the objectives that fisheries managers may have. This type of barrier to the introduction and implementation of capacity reduction programs is made even more difficult because of the need, the desire, and the willingness, to take hard decisions about fishers and their activities.

Table 10. Management concerns associated with capacity reduction programs












information research available to support

multiple government agencies jurisdiction

what legislation allows or authorizes

new / different approaches not well understood

enforcement weaknesses

management system (permits or solicits public inputs)

poor understanding of the effects of overcapacity

belief that rules or regulations will solve the problem

initial distribution of access rights

conflict with political objectives

analysis required to support management

role of industry in management process

inertia, not encouraging change

lack of capacity monitor effort

role of industry in management process

biases of managers

present management regulations/regimes

necessary conditions for efficient allocation in relation to capacity

objectives of managers

fisheries are counter-intuitive

who/what has management authority

regional council for fisheries ITQs in debate

control, monitoring and surveillance

user participation

personal interest of managers

control and command system

goals & objectives may conflict

poor scientific evidence

number of agencies / entities required

market incentives may not be understood by managers

strengthen enforcement mechanisms

management cost recovery (degree of participation)

background of managers

annual TACs and catch quotas are barriers

desire for high employment in the fisheries industry

poor understanding of effects of overcapacity

position in the hierarchy of management agency

education of managers

management of fishers not fish

regulatory incentives to increase overcapacity

willingness to take “hard” decisions

lack of social science based management

some technologies will increase excess and overcapacity

strong opposition to ITQs

tax exemptions for fisheries and fishers

Management Concerns: Potential/partial solutions

103. Setting aside discussions about the various types of incentive blocking and incentive adjusting management approaches that can be used to try to address overcapacity, the expert consultation listed a variety of potential solutions (Table 11) to help solve some of the management concerns listed in Table 10.

104. To meet information and analytical requirements, it is important to have structured and prioritized research programs that freely and transparently share information and data. In addition, it is increasingly important to use socio-bio-economic models that reflect the real complexities and human elements of capacity reduction programs.

105. In terms of compliance, it is important to reduce the incentives that currently encourage fishers to overcapitalize. In addition, the use of standardized mechanisms for conflict resolution as well as current technologies for enforcement will help to alleviate management concerns.

106. To overcome legal impediments, it may be necessary to obtain legislation or regulations that require fisheries managers to eliminate overcapacity in fisheries. This may only require minor changes or improvements to laws and regulatory frameworks, or it may involve more significant political interventions.

107. Institutional barriers are difficult to overcome, but with the identification of key people in fisheries management institutions around the world, networks to share information and to drive changes will develop. In addition, as the use of tools such as conflict resolution techniques become more familiar, it will become increasingly possible to implement them as part of the process of addressing overcapacity. This will also help overcome reluctance to using consensus building strategies, joint management commissions, and stakeholder involvement as normal management tools.

108. Awareness building and knowledge sharing are key elements to overcoming ongoing education and training needs for fisheries managers and policy makers. The introduction of additional management, social, and economic skills into agencies as well as the diffusion of practical experiences amongst fisheries managers can also help to keep them and policy makers up to date.

109. It is no simple task to address the concerns created by the distributional effects of any fisheries regulations, and addressing the distributional impacts of capacity reduction programs is no different. A policy of open, transparent assessment and explanation of how the different capacity reduction options create and deal with these impacts is critical. In addition, it is important to address transitional management impacts, such as through the provision of interim financial aid or other opportunities.

110. The matter of resolving multiple management objectives is similarly complex. It is important to work on possible ways in which to meet multiple objectives, but it may not be reasonable to expect that these differences can be perfectly resolved. Thus, the use of mechanisms for conflict resolution as well as determining different user groups’ preferences and priorities will allow different groups to make trade-offs.

111. Entrenched management biases may take time to resolve, but greater use of stakeholder participation in setting fisheries management objectives, co-management or collaborative management, and locally-based management will help. In addition, these sorts of strategies will help to become more multi-disciplinary and inclusive.

Table 11. Potential means of addressing management concerns in the design of a capacity reduction program












initiate research program(s)

reduce overcapacity incentives

obtain regulations that mandate an end to overcapacity (properly defined)

use mechanisms for conflict resolution

set up consensus building strategies among stakeholders and policy makers

change awareness about consequences

property rights system

work on possible accommodation of conflicting goals and objectives, noting that perfection may not be necessary

encourage greater stakeholder participation in determination of fishery management objectives

encourage use of flexible, multiple management measures

determine analytical requirements

mechanisms for conflict resolution

develop/improve laws and regulatory frameworks

identify key players in each institution

develop joint management commissions

education of fishery managers on capacity reduction program

assess potential distribution of income/impacts of capacity reduction

develop and use mechanisms for conflict resolution

local based management

require multi-disciplinary approach to management

structured research priorities and programs

on-board monitoring

lobby politicians to remove/reduce legal impediments

clear distribution of responsibilities

initiate stakeholder discussions

build other skills, e.g., management skills, social skills, economic skills, etc

explain variety of options in the initial distribution of rights (quotas, territories, countries)

determine different interest group preferences and priorities regarding conflicting objectives rights

try to use more co-management

provide transparent / free access to data (base); availability

promote public discussion on capacity reduction

obtain financial aid to ease pain of transition

help to define trade-offs

develop and use socio-bio-economic models

initiate programs to train / inform managers, policy makers, fishers about practical experiences about capacity reduction programs

define time frame for capacity reduction (provide clarity to process, beware of legal implications)

prepare a brochure about capacity reduction programs

Management Options

112. Fisheries management systems and tools can be generalized into two categories:

113. All of the tools in these categories can be used as part of an overall capacity reduction program. However, it is essential to know how they respectively differ, both in the short term and in the long term, because they create different incentives for fishers and change fishers’ behavior. Table 12 lists some of the intended and potential side effects of these approaches.

Table 12. Potential capacity reduction effects of “incentive blocking” tools





limited entry

· restricts the number of participants

· defines competition
· inspires fierce competition and even conflict
· no limit on individual or total catch
· requires monitoring to ensure entry remains limited


· purchases and removes vessels

· does not restrict the entry of new vessels / entrants
· unless vessels destroyed, they will displace/move into other fisheries and activities
· no limit on individual or total catch

gear and vessel restrictions

· limit fishers’ options on how to fish,
· limits fishers’ options on how go to sea

· safety at sea may be jeopardized if determined by a bureaucrat
· inspires creative thinking to find and use unrestricted inputs in place of restricted ones
· no limit on individual or total catch

total allowable catches (TACs)

· sets a regulatory limit on total allowable catch
· TAC setting can be difficult and subject to pressures

· no limit on individual catch
· inspires racing to harvest greater share of the limited catch or resource
· racing/derby fishing causes short-term gluts in markets
· requires real-time monitoring and catch counting to minimize over-harvesting
· prices impacted by short-term gluts
· processor schedules have to accommodate uneven receipt and storage of short-term gluts

vessel catch limits

· sets regulatory limits on each vessel’s allowable catch
· setting catch limit can be difficult and subject to pressures

· requires real-time monitoring and catch counting to minimize over-harvesting
· allocated allowable catch may not be enough to match (or may be too much for) individual vessel’s ability to catch
· inspires creative thinking to find and use unrestricted inputs in place of restricted ones
· creates pressure to re-allocate individual vessel catches
· inspires racing to be sure that vessel can its share of limited catch
· if transferable, transferability allows individuals to exit and enter

individual effort quotas (IEQs)

· sets regulatory limits on effort

· not a direct link to actual catch levels
· requires real-time monitoring and catch counting to minimize over-harvesting
· inspires creative thinking to find and use unrestricted inputs in place of restricted ones
· if transferable, transferability allows for individuals to approximately match their desired level of activity and catch
· if transferable, transferability allows individuals to exit and enter
· requires monitoring to ensure entry remains limited

Table 13. Potential capacity reduction effects of “ incentive adjusting” tools





individual transferable quotas (ITQs)

· sets regulatory shares of a total allowable catch
· initial allocation can be designed in any way and can reflect comparative level of participation in fishery
· transferability allows for flexibility and trading to match level of fishing as desired (new entrants have to purchase ITQs (assets))
· sale of ITQ to other participants provides funds for retirement / doing other activities (transferability allows individuals to exit and enter)
· TAC setting can be difficult and subject to pressures

· windfall gains to recipients if provided free
· creates a direct link to actual catch levels
· requires real-time monitoring and catch counting to minimize over-harvesting
· inspires creative thinking to find and use any inputs
· transferability allows for individuals to approximately match their desired level of activity and catch
· creates incentives to safeguard the asset (ITQ) value
· safety at sea is determined by the fisherman, not a bureaucrat
· inspires fishers to fish to minimize their costs
· changes fishing from hunting to accounting
· requires monitoring to ensure entry remains limited

individual effort quotas (IEQs)

· sets regulatory shares of a total allowable effort (not catch)
· initial allocation can be designed in any way and can reflect comparative level of participation in fishery
· transferability allows for flexibility and trading to match level of fishing as desired
· sale of IEQ to other participants provides funds for retirement / doing other activities (transferability allows individuals to exit and enter because new entrants have to purchase IEQs (assets))
· quota setting can be difficult and subject to pressures

· windfall gains to recipients if provided free
· does not create a direct link to actual catch levels
· inspires creative thinking to find and use unrestricted inputs in place of restricted ones
· inspires creative thinking to find and use any inputs
· transferability allows individuals to approximately match their desired level of activity and catch
· creates incentives to safeguard the asset (IEQ) value
· safety at sea is determined by the fisherman, not a bureaucrat
· inspires fishers to fish to minimize their costs
· changes the nature of fishing from hunting to accounting
· requires monitoring to ensure entry remains limited

taxes & royalties

· charges set on basis of fish landed or caught
· does not restrict the number of participants to those in the group
· does not define the actual rules of fishing

· does not create a direct link to actual catch levels
· requires real-time monitoring and catch counting to minimize over-harvesting
· inspires creative thinking to find and use any inputs
· safety at sea is determined by the fisherman, not a bureaucrat
· inspires fishers to fish to minimize their costs
· changes fishing from hunting to accounting

group fishing rights

· restricts the number of participants to those in the group
· does not define the actual rules of fishing

· does not create a direct link to actual catch levels
· requires real-time monitoring and catch counting to minimize over-harvesting
· inspires creative thinking to find and use any inputs
· safety at sea is determined by the fisherman, not a bureaucrat

territorial user rights (TURFs)

· restricts the number of participants to those in the territory
· does not define the actual rules of fishing

· does not create a direct link to actual catch levels
· requires real-time monitoring and catch counting to minimize over-harvesting
· inspires creative thinking to find and use any inputs
· safety at sea is determined by the fisherman, not a bureaucrat


114. Economic arguments, per se, tend to focus on efficiency too much, and do not take into account the other aspects. The design of a capacity reduction program needs to balance different objectives, to make trade-offs, and to be aware of what those adaptations mean with respect to both the entire program package and the rest of the economy.

115. Initially, attention was devoted to the issue of “what might be implied by economic concerns?” After considerable discussion, the group focused on the economic issues or potential impacts that might need to be addressed in designing and implementing a capacity reduction program. Broadly speaking, these include issues such as:

Economic Efficiency

116. Generally, efficiency in economics is concerned with the allocation of resources such that the maximum net benefits are achieved in the marketplace. Importantly, this concept of efficiency has been extended to include non-market values as well; e.g., the existence value of a pristine environment or of a stock of marine mammals.

117. Including these non-market values does reduce the level of harvest from what would otherwise be considered to be the optimal level of harvest in a commercial and/or recreational fishery. It also can address values that could be increased by correcting market failures that occur in regulated open access fisheries.

118. Capacity reduction programs can be economically efficient if they create incentives that eliminate overcapacity by causing fishermen to behave as if property rights exist for the in situ resource. This is because stronger property rights programs - where the access rights are clearly defined and enforceable - are preferred to weaker property rights programs because they give fishermen a greater market incentive to conserve capital, labor, and the fish stock.

Allocation and Cumulative Impacts of Capacity Reduction Programs

119. Significant displacement effects will result with the implementation of a capacity reduction program. These allocative impacts will depend upon how the capacity reduction program is implemented. If capacity reduction programs are designed solely to increase efficiency, the least efficient producers are likely to be displaced. Alternatively, if other management objectives such as preserving or protecting artisanal fishermen or maximizing employment are also desired, then production levels of the more efficient producers may have to be reduced.

120. The initial allocation and the selection of the implicit owners of the marine resource will determine who will be the “winners” and “losers”. The identification of “winners” and “losers” goes beyond just those directly involved in the fishery. Individuals who supply goods and services to or receive goods and services from fishermen will also be affected by a change in the size and location of the fishing fleet that results from capacity reduction program.

121. Thus, the implementation process needs to:

  • identify the management objectives and goals of the fishery managers,
  • carefully determine the likely stakeholder groups that will be displaced by the capacity reduction program, and
  • take steps to identify and implement mitigation strategies to reduce these displacement effects.

Distributional Effects

122. Capacity reduction programs will have distributional effects.

123. Individuals will have already been made worse off by managers allowing overcapacity to develop in a fishery. If the fishermen who are removed from the fishery along with their capital investment can be absorbed into another industry in the local economy, then they and the nation should be better off. That is, more goods and services will be provided to final consumers and less environmental harm will be generated by the fishing industry. This is what is described as a Pareto Optimal solution: at least one person is made better off, and no one is made worse off by the change in the management program.

124. If there is no alternative employment for the fisherman that pays at least as well as fishing (i.e., if the opportunity costs of fishermen are zero) and there is no other use for his fishing vessel (i.e., if his capital is immalleable), then the displaced individuals will not be able to contribute to the local economy at the same level.

125. On the other hand, if those who receive the benefit from the capacity reduction program more than offset the costs to those who have to leave the fishery, then a second best solution has been achieved. In such a situation, the nation is better off even though there are those who are worse off individually. In this case, the issue becomes one of redistributing income from those who received the benefits to those who bear the costs. Such methods may include market mechanisms or transfer payments.

126. Achieving pareto optimal solutions is only possible if there is perfect competition, no technological externalities, and no market failure connected with uncertainty. It is unlikely - even with market adjusting management regimes - that truly pareto optimal solutions will result. This means that there will be so-called “winners” and “losers”.

127. Under the second-best scenario, the alternative strategy adopted satisfies at least one of the standard Pareto efficient conditions. The remaining efficiency conditions, while not fulfilled, do not prevent an improvement in the allocation of capital, labor, and the stock of fish for the nation.

128. An additional discussion considered including the concept of “Superfairness”.[10] In very simple terms, “Superfairness” characterizes a distribution in which each category of participants prefers its own share to the share received by another group. No participant group envies another and, thus, this also relates to an equitable distribution. Another way of describing the superfairness concept is when one uses the “I cut the pieces of cake and you choose first” rule used to divide a cake between two persons.

129. It is critical to remember that:

  • individuals will have already been made worse off by managers allowing overcapacity to develop in a fishery, and that
  • capacity reduction programs will have distributional effects.

130. The issue is to resolve the overcapacity problem and to do it in a way that results in a sustainable fishery and, preferably, minimize additional losses.

Using Economic Efficiency Analyses to Compare Capacity Reduction Programs

131. Basically, the economic impacts of the different capacity reduction program options can be evaluated using quantitative and/or qualitative bioeconomic analysis.

132. Models of fisheries can be put together to correspond to the fish stock dynamics, the fishing fleets’ dynamics, the vessels’ operating costs, and the markets’ analysis. If empirical data is not available, expert opinion or theoretical constructs can be used to parameterize the model to determine expected directions of change in the fishery caused by the adoption of capacity reduction programs. When empirical data is available, the magnitude of the change in direction can also be determined.

133. These models are simplifications of real world processes and, thus, will not perfectly predict changes in the behavior of fishermen. However, they will give an indication about the impacts of different capacity reduction programs and provide managers and decision-makers with guidance. In addition, models can be made more complex, with better estimates made if more empirical data is collected and analyzed.

Economically Efficiency and Capacity Reduction Programs

134. Economically efficient solutions tend to be those that maximize social net benefits which include non-market values by stakeholders in or concerned with the fishery. However, it may be necessary to introduce additional, secondary considerations for a particular capacity reduction program even those these could reduce the net benefits of the economically efficient solution.

135. For example, if there are concerns about maintaining a minimum level of employment in a fishery, managers may decide to maintain fish harvesting capacity above the economically optimal level. While this will not be the best result for the conservation of capital and the fish stock, it could meet management objectives that are important to the management organization.

Complications and Trade-offs

136. It may also be necessary to consider the role of fisheries in relation to both the local and the national economy

137. If it is a major component of the national economy, then the effects will likely be felt nation-wide. As a result, changes that might be beneficial to one group of stakeholders might have substantial negative impacts on other stakeholders and on the economy in general. This would require that any analysis of the impacts of capacity reduction programs as well as the capacity reduction programs themselves on the entire economy. In this situation, if the economy can absorb the displaced labor and capital investment relatively quickly, the proper incentive adjusting[11] capacity management program could generate substantial net benefits to the national economy and generally improve the availability of goods and services available to the final consumer. In contrast, an incentive blocking[12] capacity management program that would preserve the status quo management in a fishery might eventually lead to a substantial loss in net benefits to the final consumer.

138. The effects of capacity reduction programs may be substantially greater on local communities than on the national economy, especially if the fishing industry is a small component of the national economy. Additionally, if the fishery is a small part of the national economy, the impacts of an incentive blocking capacity reduction program might minimize the short run costs of eliminating overcapacity and not result in substantial impacts on final consumers. Similarly, the improvement in net benefits from an incentive adjusting capacity reduction program might not be felt by the final consumers, particularly if other market inefficiencies in the processing and wholesale sectors exist.

139. The impacts of capacity reduction programs on fish stocks and the environment will depend on the scale of the fisheries and on the level of the overcapacity in the fishery.

140. In categorical form, the list of impacts considered by the group (Table 14) are issues that are part of any fishery management decision and the design of any regulatory strategy, i.e. how the program will affect:

Table 14. Concerns about some of the side effects of incentive blocking programs

141. And, as for any fishery management situation, the range of these impacts will differ depending on the design of each capacity reduction program. The impacts will also depend on whether the overcapacity is in fleets that are large-, medium-, or small-scale commercial fisheries or whether the participants are subsistence and artisanal fishermen.

142. Finally, macroeconomic changes in a national economy can affect a fishery and cause different effects on overcapacity and capacity reduction programs.[13] Examples of this include:

143. These macroeconomic changes can lead to increases or reductions in both excess and overcapacity. Managers need to be aware of the distinction between the two forms of capacity to ensure that they do not undertake capacity reduction programs for fisheries that will eventually correct themselves or ignore potentially disastrous effects from unchecked overcapacity developing in the fishery.

Concluding Ideas

144. The expert consultation concluded this discussion by noting that implementing a capacity reduction program is more complicated for more complicated fisheries and that the scale of the fishery must be taken into consideration. Thus, any capacity reduction program must be situation- or case-specific.

145. There is no single capacity reduction program that can be applied to all fisheries. However, regardless of the design of a capacity reduction program, it should bring about certain benefits, including the increased probability of promoting a sustainable resource and, as a result, the increased probability of having a healthy and sustainable industry or fishing activity.

146. In this way, a well-designed capacity reduction program can increase the economic value of a fishery and the help to avoid subsequent - and even more severe - economic and social catastrophe.

[8] The participants in the expert consultation adopted this description of the simple hypothetical fishery to minimize the multi-cultural confusion caused by describing it as either a “commercial” or an “industrial” fishery. Quite simply, these words are used to describe fisheries in different ways in different parts of the world.
[9] Indeed, traditional values or cultural priorities may not necessarily consider capacity reduction as an inevitable “need” if, for example, participants are willing to trade some loss of income in return for more employment in the fishery.
[10] Baumol initially described this in his book “Superfairness” (1986), The MIT Press, Cambridge, Massachusetts.
[11] The incentive adjusting programs that were considered included, but are not limited to, individual transferable quotas, co-management, cost recovery, cooperative, territorial use rights, and IEQs (individual effort controls, which were also considered under incentive blocking mechanisms).
[12] The incentive blocking programs that were considered included, but are not limited to, limited entry, buyback programs, gear and vessel restrictions, total allowable catch levels (TACs), vessel catch limits, and IEQs (individual effort controls, which were also considered for incentive adjusting mechanisms).
[13] Although not discussed during the expert consultation, the impact of the increased importation of relatively cheap shrimp in the U.S. has resulted in a substantial reduction in the capacity of the Gulf of Mexico shrimp fishery. This has allegedly greatly reduced the level of excess capacity in that fishery, but it has not necessarily altered the overcapacity in that fishery.

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