A good portion of this view is rhetoric. But there are enough seeds of truth in it to keep governments and fisheries stakeholders uncomfortable and itching for improvement. Many important fish stocks are overexploited and fishers and their communities are bearing the resulting economic and social fallout. Without stocks that are producing stable and sustainable yields, fishers and their communities struggle. More than 30 million people worldwide depend directly or indirectly on fisheries for employment and income. And fisheries provide nearly a fifth of all human consumption of animal protein.
What are the causes of the current problems and can the situation be turned around? At first sight, it must seem strange in today’s increasingly liberalised world that an important sector could find itself in a situation characterised by a weakened resource base and poor profitability, yet with excessive amounts of labour and capital. And if such is the case, then the solution is surely simple: leave the sector to adjust and the labour and capital will move to more profitable sectors. This should reduce pressure on fish resources and, voilà, problem solved.
If only this were so. But fisheries inhabit an unusually imperfect economic world. The resource base, fish, is highly volatile and fragile, and can be weakened, potentially irreversibly. There can be a great deal of uncertainty due to variability in the productivity of stocks and natural conditions. Fishers’ access to their fish resource is often not secure. In most countries fisheries have traditionally been open for use by everyone. Over the past two or three decades access rights of commercial fishers have gradually been put in place through permits and quotas. But in most cases this does not alter the fundamental fact that fishers are only allowed access to the yields from part of a common property resource; the aquatic ecosystem. These access rights can – and have – been altered and attenuated by new management controls and changes, often without compensation.
There are other complicating features too. Fisheries tend to soak up subsidies to capital and labour that encourage investment in fishing capacity. And in some countries other government policies that aim at meeting regional development and food supply objectives come into play.
These imperfections created an economic climate where fishers were encouraged to harvest as much fish as they could as soon as possible, and to develop the fishing capacity to do so. This practice led to overfishing and declining production that was against the long-term interests of consumers and fishers alike. The figure (below left) illustrates this trend in the catches of important species like cod, haddock and herring. Between 1986 and 1998 the OECD’s marine fisheries production fell by 23% to 22 million tonnes. But this is only part of the story: fishers are catching more small species (e.g., small pelagics) and fewer larger species (e.g., groundfish and larger pelagics). There is only so far we can fish down the aquatic food chain.
Redressing the situation is likely to require adjustment and relocation. First, catches should be reduced in overexploited fisheries. Many governments are reducing catch limits; the EU reduced the total allowable catch for cod by 35% between 1998 and 2000. Similarly, a moratorium has been placed on cod fishing in almost all areas covered by the Northwest Atlantic Fisheries Organisation (NAFO). Cuts in catches should aim to restore the productivity of stocks to maximum levels as soon as possible, so as to minimise adjustment pain.
Capital and labour should also be reduced in overexploited fisheries. Paying for the removal of vessels and buying access rights from fishers can reduce the amount of capital applied in a fishery. OECD countries spent about US$350 million on these sorts of programmes in 1997. Another way to reduce domestic capacity is to export it to other fisheries. These programmes need to be implemented carefully to make sure problems are not created in those fisheries.
Reducing labour is more difficult and painful. In addition to normal welfare provisions, retraining schemes and early retirement incentives have to be used. In Canada, US$390 million has been allocated to these sorts of programmes for the Pacific salmon and Atlantic groundfish fisheries.
Other policies should be monitored to make sure they do not attract vessels and fishers into the business or act to retain them. Subsidies for vessel construction and renewal (US$210 million in OECD countries) and fishers’ income support and unemployment insurance (US$255 million) can fly in the face of policies to reduce capital and labour in the sector.
Helping fisheries to recover is an inexact science. Basically, decision-makers control only a few variables that influence the health of a fish stock. Changes in water temperature, dominance of competing species and a host of other factors have prompted some commentators to recommend that fisheries policymakers move “beyond the fallacy of controllability”. There are no guarantees that sensible policies will mean fishery recovery.
For fisheries that do recover, and for those that are producing maximum sustainable yields, policymakers can help by not repeating the mistakes of the past. They should avoid creating artificial incentives for fishing activity. Take fishery catch limits, for instance. Unless allocated to individual fishers, these can actually encourage a race for the fish. There is an incentive for boats to be brought in to catch as much of the overall limit as possible as fast as possible. Not for nothing is this method called the “Olympic” approach. A fishing season could be over in a month, leaving capital and labour idle and the market for fish at first glutted, but then empty.
Access rights of fishers are another delicate but essential point to get right. Much of this depends on the approach of fisheries authorities. The larger the insecurity of access rights, the smaller will be fishers’ tendency to invest in the resource’s sustainability and to develop a conservation ethic. Fisheries authorities can contribute to this insecurity through poorly-conceived policies. Good approaches can in contrast elevate the role of fishers in the management of the resource. In Japan, the Netherlands, New Zealand and Spain, fishers’ organisations have the right to recommend or make management rules.
In short, maintaining the productivity of fish stocks depends on good management decisions. And these decisions need to be enforced. This is no easy task given the wide distribution of a country’s fishing vessels and the routes they trawl. Imagine trying to enforce fisheries laws in an economic zone of 1.2 million nautical square miles, as is the case for New Zealand. OECD countries spend about US$2.2 billion each year on fisheries research, management and enforcement. This kind of spending is nonetheless a small price to pay for conserving our fisheries resource. Indeed, meaningful sustainable development strategy must have the sea at its heart. As Arthur C. Clarke once said, how inappropriate to call this planet Earth when it is clearly Ocean.
*The views in this article are not necessarily those of the New Zealand Ministry of Fisheries.
©OECD Observer No 226/227, Summer 2001