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Rent extraction can promote a fair distribution of income for the community
Rent extraction can promote a fair distribution of income for the community

In economic theory, 'rent' is the payment for use of a resource, whether it be land, labour, equipment, ideas or money. Originally derived for the use of land, in which the indestructibility of the resource was central, the term 'economic rent' has come to denote a payment for use of any resource whose supply is indestructible, non-augmentable and invariant to price, at least in the short run.

For resources without private property rights, the question arises if the community at large should charge the users a portion of that rent. This can be done through taxation, royalties or other forms of payments of rents that have been realised by those who exploit the resource in question. The purpose would be to promote an equitable distribution of a 'surplus' income that some consider in principle to belong to all members of the community.

In relation to fisheries, a 'rent' is generally thought of as the difference between total revenues obtained from the fishery and the total costs (estimated at their opportunity costs) of employing the various factors of production that together make up the enterprises participating in the fishery. The total costs include charges for replacement of assets. The rent is often considered as a "surplus" profit over and above that considered normal.

However, to design a system for the extraction of economic rent from fisheries is extremely complex, not least because for most fisheries effort must be significantly reduced before a rent is created. Also what is equitable is in the end a question that is settled through negotiations amongst the parties concerned. Some of whom are likely to argue that for time immemorial the right to go fishing has been free - at least for coastal communities - and should so remain.

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