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Measures of capacity, capacity utilization and overcapacity outlined in previous sections provide indications of potential problems in particular fleet segments, species and fisheries. Such information is essential to the effective management of capacity. Generation of such indicators, however, is not sufficient to ensure effective capacity management. In many cases, researchers who are not directly involved in the management process will be estimating the measures. The information generated needs to be distributed to fisheries managers, industry representatives and other groups with an interest in providing management advice (e.g. economists, biologists, technicians). Consequently, the assessment of overcapacity or under capacity in each fishery requires a general reporting framework that allows the information generated to be readily accessible to those who are likely to use it.

The objective of this section is to provide a possible reporting framework that states may wish to adopt for the purposes of reporting an assessment of capacity, and excess and overcapacity in their respective fisheries. An advantage of adopting such a reporting framework is that it facilitates the presentation of key measures and explicit recognition of underlying assumptions (underlying both the measurement of capacity output and input levels, and of target input and output levels to be used as a basis for comparison). Examples of tables that might be completed by each State when reporting their capacity measures are provided in Appendix F.

The reporting framework is based on the assumption that states have Level 3 data (see Appendix A). This was considered by the Mexico City consultation to be the desired data level for estimating fishing capacity. Where only Level 0 or 1 data are available, it will not be possible to report at the level of detail suggested for the individual fishery level reports. However, it is expected that most information could be constructed to complete the general and national level tables. When Level 2 data are available, it is likely that input-based indicators of capacity could be estimated at the individual fishery level.

Although the Mexico City consultation established data levels and the feasibility of estimating capacity using that data, resource managers would probably have to assign priorities initially to the fisheries to be examined. They may want to consider prioritizing according to the type of existing management, nature of overfishing, value of the fishery, or some other criteria.

The tables provide a snapshot of the current extent of overcapacity in each fishery. In developing such tables, potential problems in individual fisheries, fleet segments and species will become apparent, which will enable better targeting of capacity management measures. Subsequent aggregation of this information at the national level will provide an overview of the general extent of a country’s problem, even when it may overlook specific situations.

7.1 General information

The general information suggested in Table F.1 is primarily intended to provide an indication of the relative importance of each fishery. Much of the information required for Table F.1 should be generally available, and is generally reported currently by most countries. For artisanal and subsistence fisheries, estimates of production value and activity levels (e.g. boat numbers and employment) may be necessary. These estimates can be derived largely from the information collected for estimating capacity in these fisheries.

7.2 Fishery level information

A separate analysis of capacity, capacity utilization and relative capacity is recommended (Tables F.2 to F.5) for each fishery identified in Table F.1. Analyses are to be estimated for each fleet segment that participates in the fishery and for each key species. Input-based indicators are presented in Tables F.2 to F.5, and output based indicators, in Tables F.6 to F.10.

Key input-based capacity indicators for each fleet segment in each fishery are presented in Table F.2. For purposes of international comparisons and aggregation across fisheries, it is recommended that gross tonnage, engine power (in kW) and standardized days fished (days times kW) be used, because these measures should be readily available in each country. For non-mechanized fisheries, only days fished should be reported (assuming that all days fished are homogeneous). Latent effort and (input-based) capacity utilization estimates should also be presented for each fleet segment. It will be necessary, however, to develop allocation rules to determine potential capacity output when latent effort exists. One possible method involves allocating according to historical participation, if there has been actual participation in more than one fishery.

Alternatively, capacity output could be calculated conditional on the assumption that all effort by vessels having latent effort in a fishery could be allocated to the same fishery. This places an upper limit on capacity output. There are other optimization or DEA options that also could be considered, which determine the allocation of variable and fixed factors, such that the allocation maximizes technical efficiency over a group of fisheries. (See, for example, Färe, Grosskopf and Li, 1992; Färe et al., 2000.) Changes in input-based indicators of capacity and capacity utilization over the last five years (Table F.3) also should be reported where possible to provide an indication of trends in the fishery. Where possible, target levels of inputs associated with MSY[45] and ASY also should be identified for each fleet segment (Tables F.4 and F.5). Given these target levels, estimates of overcapacity at the fleet segment and total fishery can be derived.

Output measures of capacity and capacity utilization (Tables F.6 to F.8) ideally should be made at the species level. The number of key species examined in each fishery will vary. However, species that are nationally important should be reported for each fishery in which it is caught, even if it is relatively unimportant to some. This enables aggregation of species across all fisheries for the purpose of producing a national assessment. Less nationally important species can be aggregated into an “other” category.

For each species in a particular fishery, a target capacity should be specified where possible (Table F.9). Ideally, to allow for international comparisons, two target capacity measures should be provided, which are consistent with the target levels of inputs detailed in Tables F.4 and F.5 and prevailing stock conditions. Where a fishery is managed by output controls, the TAC can be assumed to represent the target output equivalent to the ASY for the purpose of estimating overcapacity.

The information in Tables F.6 to F.9 provides only a snapshot of current capacity utilization and relative capacity. Where possible, a summary table of the key information for each species over the last five years should be presented to demonstrate trends in capacity utilization and relative capacity (Table F.10).

7.3 National level information

Information from individual fisheries can be aggregated into national indicators of capacity and capacity utilization. Input-based indicators for each fishery could be summarized and aggregated to provide an estimate of the total level of physical inputs utilized in the fisheries (Table F.11).[46] For measures such as total tonnage and engine power, this may provide an overestimate of total capacity, because some boats may operate in more than one fishery and hence may be double counted. A note outlining the potential overestimate should be made in the accompanying text. Measures of capital utilization (i.e. standardized days fished) should not be distorted, because fishing activity is only counted once for each fishery.

Target levels of input capacity for each fishery (provided separately for each fleet segment in Tables F.4 and F5) could be aggregated to provide an overview of input-based overcapacity at the national level (Tables F.12 and F.13). Similarly, information on catch, capacity output, capacity utilization and relative capacity could be aggregated across the fisheries for each species to provide an overall indicator of species exploitation (Table F.14).

Summary estimates of the total level of capacity output for each fishery could be estimated by aggregating across species in each fishery (Table F.15). Target capacity measures also could be aggregated in a similar way. It may be useful to the aggregation to use prices as weights, to provide an estimate of capacity in terms of revenue and thus provide an indication of the economic significance of any observed overcapacity. Aggregation of commodities does, however, pose particularly vexing problems, and therefore, should be done in a manner consistent with aggregation theory. (See, for example, Cornes, 1992) For international comparisons, these could be converted to United States dollars at the prevailing exchange rate for each country. Tables may also be presented in local currency in addition to the table in US$. Countries with Level 1 data could also attempt to provide estimates in terms of US$. If information on species composition is not available to derive a reliable estimate of the output value, then information could be presented in terms of aggregated catch weight. This is less desirable, because it does not provide any indication of the extent of economic overcapacity, because high volume low value species often dominate the catch weight. It does, however, preclude confusion arising from market differences that affect relative prices (across species or time) but not actual quantities that may be produced with existing capacity.

The different estimates of aggregate national capacity utilization and relative capacity should be summarized to provide an overall picture of capacity in the state (Table F.16). Because measures are derived on the basis of different assumptions, there are no a priori reasons why consistent measures should be achieved. That is, there are no reasons why relative output capacity should be the same as relative input capacity. Also, aggregation across non-homogeneous units can add distortions to the final measure (e.g. same sized boats in different fisheries will have different levels of catch). For example, potting boats will have lower catch of higher valued species while pelagic trawlers will have higher catches of lower valued species. The different measures are presented in the table only as indicators of the possible extent of overcapacity in each state.

Although aggregation of capacity estimates at the state or national level poses several problems, there is, nevertheless, a need to secure such estimates. A primary need, of course, is to develop national policies on capacity reduction. Moreover, vessels in some fisheries may actually change their geographical home port or fishery (e.g. a vessel moves from the east coast of a nation to the west coast and enters a similar gear fishery involving different species). One potential way to deal with aggregation across different species and fisheries is to develop meaningful price weighted aggregates. This is regularly done to measure gross and net national products or the output of a diverse industry (e.g. agriculture, which produces pork, poultry, beef, lamb and various crops). A simple Divisia or Tornqvist aggregate could be constructed, provided output price information was available.[47]

7.4 Additional information (qualitative review)

Presentation of tables also will need accompanying text highlighting the potential distortions that may have been introduced into the analysis through necessary assumptions. For example, the text could indicate which, if any, fisheries are subsistence-based, such that capacity output is assumed to be equivalent to current catch. Similarly, fisheries with a high proportion of part-time fishers will exhibit relatively low capacity utilization. These also will need to be noted in accompanying text.

The management objectives of each fishery also should be presented, and the effect of these on the estimation of Alternative Sustainable Yield (ASY) outlined (i.e. information on the relative weights assigned to each objective should be provided). Related to this are short-term and long-term targets. If target capacity is primarily short run, it needs to be explained and an indication of long-term targets needs to be provided.

As noted above, some fishers will operate in more than one fishery. As a result, a simple aggregation of the physical inputs in each fishery will lead to an overestimate of the total level of inputs employed. An estimate of the potential overestimate of these inputs could be provided in the text.

Attention could be drawn to likely distortions caused by incompatible units, particularly in relation to measures of input capacity. Aggregation of these units across fisheries is likely to cause distortions, and a qualitative assessment of the extent of these distortions would be useful in interpreting these figures.

A description of the methodology used to estimate the individual capacity measurements should also be provided, particularly as different methods may result in different measures (a consequence of the underlying assumptions). For example, the text should explain which techniques were used to estimate capacity output for each fishery and how the estimates of target capacity were derived (e.g. bio-economic or stock dynamic models, or average of previous years).

For states exploiting shared resources (e.g. straddling stocks), coordination of the methodology for estimating capacity and target capacity is essential. Details about which stocks are shared and the coordination process for their assessments also should be provided.

Finally, an assessment of the situation in each fishery based on the data in the tables should be undertaken, taking into account the estimation problems encountered in each fishery (e.g. aggregation problems, or stock fluctuations in pelagic fisheries). In particular, consideration should be given to what might be considered an “acceptable” level of capacity underutilization in each fishery. For relatively stable fisheries, this might be small, whereas greater capacity underutilization may be acceptable in more variable fisheries, particularly if conditions in the assessment year are relatively “poor”.

[45] The Mexico Conference concluded that maximum sustainable yield (MSY) should be considered as an upper bound limit to target output and should be used as the basis for international comparisons. MSY also has been adopted as the limit reference point by the Code of Conduct for Responsible Fishing.
[46] It is stressed that in addition to obtaining and summarizing information on the physical aspects of production (i.e. input and output levels), there should be a broad emphasis placed on collecting and summarizing detailed economic information (e.g. costs, input and output prices, revenues, capital values and returns to factors of production).
[47] Numerous other forms of aggregate outputs are possible. Detailed discussions on aggregation over commodities or inputs are available in Johnson, Hassan and Gren (1984), Deaton and Muellbauer (1980), and Cornes (1992). All three references, as well as Daal and Merkies (1984), provide discussions on aggregating over firms or individuals.

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