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6.1 Capacity Management Considerations - the simplest case

No simple management solutions exist to the problems of excess capacity and overcapacity in fisheries, even in the simplest case.

Advice to managers must include both short run and long run considerations, and the advice must distinguish between excess capacity and overcapacity - since the two imply different policy choices.

6.1.1 Reduction issues

If overcapacity is high relative to current (depleted) resource conditions but less so relative to the long run target (rebuilt) resource condition, managers may want to introduce temporary regulations to reduce fishing effort, rather than developing plans for a large scale permanent reduction in fleet size.

However, if capacity levels at current conditions also exceed optimal capacity levels corresponding to long term target conditions, a joint policy of capacity and fishing effort reduction may be appropriate.

Thus, advice regarding capacity and considerations for its management should be formulated in terms of:

6.1.2 Implementing issues

Managers also need to appreciate the myriad of difficulties of implementing explicit capacity reduction programs.

For example, when one input is reduced, it is both possible and reasonable to expect that a substitute input can be increased to offset the impacts of capacity reduction efforts. Thus, while a regulation reducing the days absent from port to reduce time spent fishing could theoretically reduce capacity, the real result may be an that fishermen increase the horsepower of their fishing craft to reduce the travel time spent getting to the fishing grounds - thereby effectively increasing the proportion of days spent fishing.

In addition, even if there are not incentives caused by regulations or management strategies, the capacity in a fishery may also increase over time simply due to technological improvements in fishing gear.

It is also important to remember that the management advice from these quantitative and qualitative approaches is limited without additional social and economic information, and this is particularly important with respect to trying to determine overcapacity. Determination of overcapacity implies that capacity exceeds some desired level, but determining optimal capacity levels must take account of the social and economic context within which the fishery or fisheries are operating. Social and economic considerations will also be of paramount importance in the design of capacity reduction programs.

To achieve a enduring reduction of capacity, it is preferable to make changes in the regulatory institutions so that fishermen have a market incentive to reduce capacity, simply because changes in regulated, open access fishery management regimes will provide only short run relief from overcapacity. Regardless, any proposed management regulations must be carefully crafted by fishery managers and tested prior to their adoption to ensure they meet their goals and objectives - and this frequently means that additional research needs to be completed before the impacts of proposed regulations on fleet capacity levels can be determined.

6.2 Capacity Management Considerations - beyond the simple case

Concerns about designating a desired level of output are particularly important when moving beyond the simplest case of a single stock, a single homogeneous stakeholder group, and single fisheries jurisdiction.

Dealing with heterogeneous fisheries that are characterized by multiple cohorts, species, stocks, fishing areas, different groups of fishermen, and also combinations of consumptive and non-consumptive user groups rapidly increases the complexity of management.

6.2.1 Multiple stakeholder groups

In fisheries where there are different groups of fishermen, it is important to recognize the potential social and economic impacts of capacity reduction programs on the different sectors. If, for example, a fishery includes both artisanal and industrial fishermen, yet the management objective for a fishery is to maximize foreign trade revenue using a large scale industrial fleet, the artisanal fishers may loose a source of food and/or income that is necessary for their sheer survival.

Multiple output measures of capacity can be developed using either DEA or SPF techniques, but selecting a desired target level of output or the appropriate configuration for the resulting fishing fleet once overcapacity is eliminated is a serious policy question deserving special attention.

The analysis necessary to determine the composition of the resulting fishing fleet has not been done in the literature, but theoretically could be developed if fishery managers identified their policy objectives. Bioeconomic models of commercial and recreational fisheries have been developed[33] and, although these models do not deal directly with capacity utilization in fisheries, they could be adapted to determine the impact of management regulations on both fleet size and fleet composition for different user groups in the fishery.[34]

6.2.2 Variable fish stocks

In fisheries where the stocks are randomly variable, optimal fishing capacity may not be linked with fishing effort the way it is in more stable stocks, and the matter of coping with stochastic variations becomes even more complex.

Hannesson (1993) considered the choice of optimum fishing capacity for fish stocks that vary at random and where optimum fishing capacity is normally a decision variable that is separate from fishing effort. The optimum fishing capacity is shown to depend on the price of fish, the cost of capacity, and the “harvest rule” that links the permitted catch to the size of the fish stock. Operating costs may also influence the optimum capacity through the effect of stock “thinning” on the cost per unit of fish caught and the level at which further depletion becomes unprofitable.

6.2.3 High seas fisheries

There has been recognition of the fact that the high seas may be confronted with an even greater overcapitalization problem than EEZ fisheries. This is due both to the prevalence of open access conditions and to the fact that there are presently no internationally agreed measures that would require states to control fishing capacity on the high seas.

Thus, in the absence of strong regulatory frameworks, the first step of the solution has been to recommend the ratification of the 1995 UN Straddling Stocks Agreement[35] and the FAO Compliance Agreement.[36] Further capacity management suggestions, such as those from the 1998 FAO TWG, include a variety of complementary measures:

6.3 Capacity, Capacity Management, and Beyond

As was stated at the beginning of this section, there are no simple management solutions to the problems of excess capacity and overcapacity in fisheries.

Management considerations regarding capacity and capacity reduction programs have to recognize and accommodate:

None of these are easy issues to deal with, and there is an enormous need to improve national and international research, institutional, and management capabilities in order to move forward and to be able to properly address the many issues pertaining to the effective control and reduction of fishing capacity.

[33] See Seijo, Defeo, and Salas (1998), Ward (1994), Ward and Keithly (1998), Ward and Mecinko (1996), Grant, Isakson, and Griffin (1981), and Thunberg, (1995).
[34] The benefits of using such models are significant, because they could be used to develop effective capacity reduction regulations prior to their adoption in a particular fishery. Once a strategy is found that conforms with the management objectives of the fishery, then a regulation could be developed that would selectively reduce capacity in only those sectors of the industry necessary to eliminate overcapacity. Quantitative measures of capacity utilization using DEA or SPF techniques could then be used to monitor the fishery to ensure that overcapacity did not reassert itself.
[35] The United Nations Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks. The Agreement was adopted on 4 August 1995 by the United Nations Conference on Straddling Fish Stocks and Highly Migratory Fish Stocks, was open for signature from 4 December 1995 until 4 December 1996, and was signed by 59 States and entities. The Agreement is in force as from 11 December 2001.
[36] Agreement To Promote Compliance With International Conservation And Management Measures By Fishing Vessels On The High Seas

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