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1. Inherent Characteristics of Fish Stocks

Fisheries management is a complex process that requires the integration of resource biology and ecology, with socio-economic and institutional factors affecting the behavior of fishers and policy makers. The purpose of this multidisciplinary field is to aid decision-making to achieve a sustainable development of the activity, so that future generations can also benefit from the resource. However, sustainability has been far more difficult to achieve that is commonly thought: fish population are becoming increasingly limited, world catch has begun to drop, and almost 70% of the individual fish stocks around the world are fully to heavily exploited, overexploited or depleted (Garcia & Newton, 1997).Indeed, depressed yeilds, coupled with a rise in demand and prices, determined a systematic decreasing trend in catch rates and global landings. Conventional management measures, such as minimum size limits and reductions in catch or in fishing effort, have been used to promote stock rebuilding by reducing fishing mortality and increasing survival of spawning stocks. However, uncertainty levels in stock estimates, impressive and hidden changes in fishing power, coupled with a risk prone management attitude and a high inter temporal preference in resource use, have determined drastic collapses of some stocks, even under an “a priori” successful management scenario (Ludwig et al., 1993). What are the reasons for management failure? How could this syndrome of overexploitation be explained? Among the multiple reasons that have been invoked to explain this, some inevitably arise from the inherent characteristics of both the fish stock and the fishery. To further understand management limitations of fish stocks, the following sections discuss the basic assumptions underlying the optimal allocation of natural resources, and the inherent characteristics of fisheries that prevent the market, under unrestricted access, from optimally allocating fishery resources. To mitigate these undesired effects, the bioeconomic literature invokes the allocation of property rights, which requires consideration of a management context. Thus, we provide some guidelines for developing fishery management plans.

1.1. Optimal allocation of renewable resources: basic assumptions

To have an optimal allocation of natural resources in a specific economy,non-attenuated property rights need to be specified. Those rights must be (Randall, 1981, Schmid, 1978):

Completely specified in terms of the rights that accompany the property over the resource, the restrictions over those rights, and the penalties corresponding to their violation.

Exclusive, so that the person who has those rights will also be responsible for any resource, the and penalties corresponding to the use of the natural resource.

Transferable, in order to have those rights in the hands of those who have the capability to convey them to the highest use value.

Effectively enforced, because a non-policed right becomes an empty right.

1.2. The failure in the optimal allocation of fishery resources

In fisheries, the basic assumptions of the neoclassic market model mentioned above are violated. Thus, overexploitation, both biological and economic, has been a common feature of many important fisheries around the world. Fishery resources have special inherent characteristics that distinguish them from other natural renewable resources and that require further discussion in order to understand short and long-term exploitation patterns.

Property regimes, property rights and externalities

Fishery resources could be subjected to four different property regimes: state, private, common (res communis) and open access (res nullius). The relevant concepts analyzed by Bromley (1991) are used to characterize each regime, as follows:


Externalities are defined as every external effect caused by individual fishers but not included in their accounting system. Fishing externalities are commonly negative and occur when fishers can freely enter and capture a resource, and where a voluntary agreement of co-operation does not exist; in these cases, resource users do not consider the external effects impose on others. Three types of negative externalities have been identified in most fisheries (Smith, 1969; Agnello & Donnelley, 1976): associated with the stock, crowding, and fishing gear. Before we extend this classification to account for other type of externalities, including positive ones, these three can be specified as follows:

Stock externalities. These occur when entry of new vessels reduces stock availability and hence the harvesting costs of others. Fishers do not consider these costs because they only take into account their private fishing trip costs (internal); ignoring the external costs imposed to others by stock reduction.

Crowding externalities. These arise when vessel aggregation on the fishing grounds increases marginal catch costs. Occurrence of such externalities depends on the extension of the fishing ground and the stock magnitude. Fishing effort will not be perfectly allocated in space (e.g., over the greatest resource concentrations) and time (e.g., they would wait to have access to a limited fishing ground). This externality is commonly seen in sedentary species with patchy distribution, where the exploiting strategy tends to sequentially deplete the most profitable beds.

Technological externalities. Arise when the fishing gear changes the population structure dynamics of the target species and associated bycatch, imposing negative effects to other fishers, and affecting the abundance of incidental species which might constitute the target of other fisheries. Two types of technological externalities could be distinguished:

(iii.1) Sequential externalities. Occur when artisanal and industrial fleets exploit different components of the population structure of the same species, thus affecting each other. Artisanal vessels tend to apply their fishing effort close to the coastal zone where juveniles inhabit, while the industrial fleet generally operates in deeper waters, exploiting the adult component of a stock. Thus, a substantial increase in fishing effort of the artisanal fleet would cause recruitment overfishing and a decrease in stock availability for the industrial fleet in subsequent periods, i.e., a negative externality for the industrial fleet. Analogously, an increase in fishing effort of the industrial fleet will diminish the spawning stock, affecting subsequent recruitment and thus stock availability for the artisanal fleet.

(iii.2) Incidental externalities. These arise in technological interdependent fisheries, when fleets use non-discriminatory fishing gears, e.g., a bycatch in fishery A diminishes the abundance of those species that constitute the target for fishery B. The non-accounted negative external effect for fishers belonging to fishery A constitutes an incidental externality. It is commonly observed in shrimp and demersal fisheries, where the shrimp fishery generates incidental catches of demersal speices, a non-accounted negative effect that generates and externality to the demersal fishing fleet.

Ecologically based externalities. Suppose that two competing species constitute the target of different fisheries; variations in fishing intensity exerted by both fleets would change the magnitude and direction of the ecological interaction and thus the relative abundance of both species. Consider two fisheries A and B that capture, respectively, the competing species S1 and S2 which coexist without exploitation. An increase in fishing effort over species S1 will determine an increment in abundance of species S2, exploited by fishery B. Thus, fishery A generates an external positive effect to fishery B, defined as an externality under competitive coexistence.

Alternatively, suppose that without human impact, the competitively subordinate species S2 is excluded by the dominant S1. Fishing effort exerted by fishery A will diminish S1, determining an increment of S2, harvested by fishery B, due to an increasing availability of a limited resource (e.g. space, food). Thus, fishery A generates an external positive effect to fishery B, which constitutes an externality by competitive release.

A predator-prey interdependence can also guide the direction of the externality. Consider a simple situation of a predator-prey relationship that can be modelled by the Lotka-Volterra equilibrium equations. An increase in fishing effort of fishery A, which has prey Sp as the target, will generate a decrease in the abundance of predator Sd, harvested by fishery B (consider a specialist predator sensu Begon et al., 1990), causing a negative externality. Analogously, when fishing effort is increased in fishery B, prey abundance increases, generating a positive externality to fishery A. Both external effects constitute a trophic-based externality.

Techno-ecological externalities. These occur when e.g., a fishing gear disturbs the habitat of the target and other co-occurring species that might constitute the target for other fisheries. These externalities are common in benthic stocks harvested with trawls. For example, destruction of the benthic biogenic habitat could diminish the probability of recolonization and recruitment (Botsford et al., 1997). The quality of the fishing ground (e.g.. available space for settlement, food availability) could mitigate the effect of the externality.

High exclusion costs

Inherent characteristics of fish stocks generate high costs of excluding other fishers from exploiting the resource. The open access regime, combined with high uncertainty levels in stock magnitude, determines that a fisher may not benefit by postponing a catch with the expectation of catching a larger and probably more valuable fish later, since that fish is likely to be caught in the meantime by another fisher. In other words, a single fisher cannot affect the size of the stock by reducing his catch rate, unless all or most other fishers agree to abstain proportionately (Eckert, 1979). Consequently, each fisher will increase his catch rate, and thus will generate high exclusion costs. Traditional schemes oriented to avoid high exclusion costs involve strategic institutional structures (e.g. property rights-based approaches, co-management schemes) and operational sets of management measures (sensu Charles, 1995; see also Orensanz & Jamieson, 1998). At least 4 approaches could be recognized: (i) resource privatization through the allocation of individual quotas; (ii) state intervention through the regulation of size and composition of the catch and the intensity of fishing effort; (iii) implementation of community-based management systems (Berkes, 1985, 1989; Smith & Berkes, 1991); or (iv) mixed strategies based on a combination of the above schemes (Defeo, 1993a, b; Seijo, 1993; Castilla, 1994 Castilla et al., 1998).

Social trap in fisheries, and the free rider behavior

Without an agreement to limit catches, the main result of a single fisher's reduced catch rate is to lower the extraction cost of other fisher without necessarily increasing his benefits. Consequently, each fisher will increase the catch rate and thus contribute to destroy the fishery, an undesired long-run result for all fishers involved. Using Schelling's (1978) terminology, this constitutes a social trap in fisheries because the micro-motives of an individual fisher in the short-run are not consistent and compatible with the macro-results that he and the other fishers desire in the long run. The short-run fishers micro-motives consist in catching as many fish as possible in order to increase their marginal benefits, while the long-run desired macro-results may involve achieving the maximum sustainable yield. Uncertainty of future stock availability determines that long-run results are usually dominated by marginal benefits in the short-run. The sustainable yield of a fishery, given certain intertemporal preference of resource use, will be an attainable goal only when the number of fishers is limited by some kind of effort regulation and act in concert.

The size of the group of fishers is a relevant factor affecting the avoidance of this social trap. If the group is large, a fisher may be an unintentional free rider or non-contributing user when he cannot avoid the macro-result (fishery collapse) because he cannot be sure that the behavior of other fishers will sustain resource yield. This kind of user is usually found when there is not a voluntary collective action by most community members to prevent resource depletion, and also when uncertainty exists about stock abundance (which is the usual case). When the group is small, exclusion costs are not necessarily lower, but the non-contributing user could be easily identified, therefore reducing the number of free riders (Schmid, 1987).

High transaction costs

Marine fisheries involved high transaction costs, which also attenuate an efficient allocation of fisheries resources over time. Transaction costs involve information costs, enforcement or policing costs and contractual costs (Schmid, 1987, Randall, 1981).

Information costs. Fisheries management implies high information costs resulting from interdisciplinary research efforts in biology, ecology, statistics and socio-economics. This research is needed to keep track of; (1) fish population dynamics and stock magnitude; (2) environmental variability; (3) spatial dynamics of catches and fishing effort; (4) changes in intertemporal preferences of the society as a result of fluctuations in market demand and resource availability. Overall increase in fishing are usually not accompanied by a corresponding increase in scientific and fishery information, which in turn led to poor management and overfishing, increase of harvesting costs and the consequent reduction of the economic rent of the fishery. This situation becomes even more complex with the large uncertainties observed in natural systems, as well as in biological, social, political and economic factors (Hilborn & Peterman, 1996), thus increasing the probability of having non-contributing users, stock depletion and economic rent dissipation.

Enforcement costs. Fisheries management involves high enforcement or policing costs resulting from the implementation of management schemes and allocation of property rights. In many cases, policing areas are so extensive (oceanic fisheries) or accessible to third parties (e.g. recreational harvesters in hand-gathering intertidal stocks and harvesting infralittoral stocks by scuba) that policing effort is extensive and ineffective. When this happens, the non-enforceable right becomes an empty right. The above-mentioned aspects, coupled with low operating costs, caused the collapse of many coastal fisheries (Defeo et al., 1993).

Contractual costs. This type of transaction costs occurs in countries where there have been legislative efforts directed to promote collective forms of organizations (e.g. cooperatives), giving them exploitation rights over certain resources. In this context, costs directed to foster this kind of organizations are usually substantial, so it is necessary to identify who (e.g. fishers or State) will pay for the contractual costs. Something similar happens when the State is interested in promoting a certain management strategy, as the implementation of Individual Transferable Quotas (ITQ: Geen & Nayar, 1988) or Individual Transferable Grounds (ITG: Seijo, 1993) between the members of a fishery community in order to maximize resource rent over time.

After recognizing the inherent characteristics of fishery resources, which provide the major elements of the management context, the next section summarizes the main steps needed to develop intelligent management plans.

1.3. Fisheries management plans

The intertemporal flow of costs and benefits of alternative management strategies should be sustained by a robust analysis of the fishery as a whole. For this purpose, static and dynamic bioeconomic models constitute an important aid to decision-making aiming at a sustainable management of fish stocks. The necessary steps for fisheries management planning can be summarized as follows (Seijo et al., 1991a).

1.4. A closing comment

The bioeconomic literature invokes the allocation of property rights as a way to mitigate the undesired effects caused by the inherent characteristics of fisheries, and thus to attenuate the risks of stock overexploitation. In this context, the bioeconomic impacts resulting from alternative management strategies must be valuated, as well as the adequate policy instruments that should be used to satisfy biological and economic criteria. These include biomass levels, yields, net revenues, direct employment, export earnings and contribution to the alimentary production of the region. For this purpose, static and dynamic bioeconomic models have been developed as a theoretical framework for the design of intelligent management schemes aiming at sustainable use of fish stocks. The remaining chapters of the book will address these topics.

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