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FAO/19340/R.Faidutti

Issue

Although the word 'capacity' is frequently used to describe capabilities, competencies, or skills, in fisheries discussions the term 'capacity' may also be used to describe several other categories of specialized issues that reflect the relationship between the concept of capacity, the harvesting of fish by fishing vessels, and the biological concept of fishing mortality (the killing of fish). Because the management implications of these different definitions can be significant, it is extremely important to be very clear about what sort of capacity is being discussed.

Concepts relating to fish harvesting capacity are not as clearly understood by fishery managers as the biological concept of overfishing, and much of this confusion arises because many times the terms 'overcapacity' and 'excess capacity' are incorrectly used as synonyms and even though they are quite different. To make matters even more confusing, the concepts of excess capacity, overcapacity, overfishing and overcapitalization are closely related, yet different. Moreover, they are not the same as the word "capacity" that is frequently used to describe capabilities, competencies, or skills, in fisheries discussions.

Fishing technologists often refer to "capacity" when describing physical measures of the vessel (e.g., hull capacity and the ability to hold fish) as well as the operational or technical efficiency of a fishing vessel and its gear. Fishing power is what has been typically thought of as "capacity" and includes such things as gear size, boat size, and horsepower. A difficulty with such a physical definition that it focuses on the inputs used to catch fish rather than the output of fish and fishing effort and may create a misleading impression of what is happening to true capacity. For instance, where engine power is controlled, fishers can increase the power of their vessels in other ways, thereby substituting one input for another and increasing capacity (as defined by economists) in the fishery.

For fisheries biologists, “capacity” is often though of in terms of fishing effort and the resultant rate of fishing morality (the proportion of a fish stock that is killed through fishing). For fisheries managers, “capacity”may be linked to the number of vessels operating in a fishery or in terms of the gross tonnage of a fleet, total effort such as standard fishing days, or even the rate of vessel utilization.

In contrast, economists define capacity either in terms of inputs (what is used in production) or in terms of outputs (what is produced). In input terms, the economic definition of capacity can be considered as the minimum fleet and effort required to produce a given total allowable catch or given output (harvested catch) level. In output terms, capacity can be considered as the maximum harvest level that a fisherman or a fleet can produce with given levels of inputs, such as fuel, amount of fishing gear, ice, bait, engine horsepower and vessel size.

As a result, the economic term “overcapacity” also can be described in two ways. In input terms, "overcapacity" means there is more than the minimum fleet and effort required to produce a given TAC or given output (harvested catch) level. Alternatively, in output terms, overcapacity means that the maximum harvest level that a fisher could produce with given levels of inputs, such as fuel, amount of fishing gear, ice, bait, engine horsepower and vessel size would exceed the desired level of harvesting or TAC. To accommodate these two perspectives, FAO has adopted a definition of fishing capacity that is:

the amount of fish (or fishing effort) that can be produced of a period of time (e.g. a year or a fishing season) by a vessel or a fleet if fully utilized and for a given resource condition.

Measuring overcapacity – either quantitatively or qualitatively - provides fishery managers with information on the ability of a fishing firm or industrial fleet to harvest the target level of capacity at its lowest cost for a given desired stock abundance level. It can be measured at the target levels as well as at economically efficient levels of production. Assessing overcapacity is of critical importance because overcapacity is a harmful, longrun phenomenon that does not self-correct itself and will persist indefinitely if not addressed.

In contrast, excess capacity - the difference between what a production facility could produce if fully utilized and what is produced by the owners, given the prices of inputs and outputs - is a common, short run phenomenon in all types of industries at different points in time. In fisheries, lower prices or temporarily higher costs (e.g. fuel price increases) may result in boats operating less than expected under average conditions. If the prices and costs return to normal levels, then this excess capacity is self correcting. Excess capacity can also be caused by fisheries management. If stock recovery programmes impose restrictions on catch or effort that result in the vessels being underutilized during the recovery process, but later allow vessels to be fully utilized which the stocks have recovered, then the excess capacity will not be problematic. However, if the effort or catch restrictions are likely to persist into the future, then it is likely that excess capacity is actually an indicator of overcapitalization in the fishery.

These concepts are also distinct from fishing effort - the amount of time and fishing power used to harvest fish; fishing power - which includes such things as gear size, boat size, and horsepower; and the term overcapitalization - which is overinvestment in assets (capital).

Finally, overcapitalization is overinvestment in assets (capital) in a fishery. If fishers have a market incentive to overinvest in capital, i.e. overcapitalization, and other productive inputs used to harvest fish, then the excessive use of capital and labor in a fishery causes biological overfishing to occur. With the appearance of overfishing and resulting declines in stock abundance, overcapacity develops in a fishery when the net benefits to the fishing fleet begin to decline.

Possible solutions

One reason for the prevalence of physical definitions in fishing is perhaps that until recently the desired quantity of catch has not been defined. Fishers have just operated and caught what they could. Now, it is recognized that marine capture fisheries resources are finite, that catches must be limited. However, because stakeholders want to maximize their economic and fiscal returns from capture fisheries, economic definitions of capacity are increasingly relevant.

Understanding the distinctions amongst these different aspects of fishing capacity and their implications for successful fisheries management is critical for sustainable fisheries development. And, while excess capacity may be of less importance than overcapacity to fishery managers, the ability to distinguish between the level of excess and overcapacity to determine appropriate management actions is still necessary.

Indeed, at the June 2004 Technical Consultation to Review Progress and Promote the Full Implementation of the IPOA to Prevent, Deter and Eliminate IUU Fishing and the IPOA for the Management of Fishing Capacity, the Consultation noted that that technical efforts by FAO and other specialists to lay the groundwork for implementing the IPOA-Capacity makes a distinction between excess capacity, which is largely self-correcting through market forces, and overcapacity, which requires intervention by fisheries managers. The Consultation also noted that, as part of ensuring the most effective use of the limited resources of FAO, RFMOs and States, efforts to implement the IPOA-Capacity have focused and should continue to focus on the issue of overcapacity where such intervention can have a positive effect.

Action taken

For effective management of capacity, assessing overcapacity is best narrowed down to a given area or fishery while making due allowance for the possible switch of capacity between fisheries and areas. Thus, it is important that both countries and regional fisheries bodies are beginning the systematic management and assessment of the fishing capacity in their respective fisheries.

In preparing for the Technical Consultation to Review Progress and Promote the Full Implementation of the IPOA to Prevent, Deter and Eliminate IUU Fishing and the IPOA for the Management of Fishing Capacity, the FAO survey of member States' activities revealed that preliminary assessments of capacity at the fishery level have been undertaken by around three quarters of the States responding to the survey. Furthermore, of the fourteen countries that responded to the survey and who represented over 40 percent of the total marine catch in 2002 had undertaken preliminary assessments of capacity.

Outlook

Assessments of capacity and, in particular, of overcapacity are increasingly part of national, regional fisheries, and international management activities. Nonetheless, there are major constraints and issues relating to the assessment and management of capacity, particularly for developing countries. As a result, free and open access, with the consequent problems of overcapacity and overexploited resources, remain a feature of many regions.

Concerted efforts to assess capacity, whether quantitatively or qualitatively are a positive sign for the measurement of fishing capacity and, ultimately, for avoiding or catalysing the transition away from overcapacity in capture fisheries.

 
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