High-Grading in a Quota-Regulated Fishery, with Empirical Evidence from the Icelandic Cod Fishery

Fishers in quota-regulated fisheries find it to their advantage to discard less valuable fish at sea to increase the value of their catch. A theoretical model describing the high-grading behavior of fishers is presented, and an empirical model is derived as well as a testing strategy to test for high-grading and to estimate the discarded amount of each grade. The model is applied to data for the Icelandic quota regulated cod fishery during the period September 1998 to June 2001. The results indicate that highgrading occurs in the Icelandic cod fishery for both long-line and net vessels. However, the discard rates are small, and the results clearly suggest that the ban on discards in Iceland has effectively dealt with high-grading. The estimated discard rates are consistent with existing estimates of high-grading for the same types of vessel in the same fishery. This suggests that the modeling of discarding decisions based purely on incentives is a useful alternative to classical biometric methods.ITQ's, highgrading, empirical estimation, Resource /Energy Economics and Policy, Q21, Q22, C12,

The final cod war

Iceland had several disputes with its neighboring countries during the fifties, sixties and seventies over expansions of sovereign waters and control of fishing rights, known as the cod wars. Iceland was successful in securing exclusive fishing rights for its people. However, the problem of overexploitation, which lay at the heart of the disputes, did not disappear with the exclusion of foreign fleets from Icelandic waters. Instead, Icelanders swiftly replaced foreign overcapacity with their own. It took fundamental changes in fisheries policy, joint efforts of scientists and industry - and 40 years, to archive a truly sustainable management of the Icelandic cod stock. This final cod “war” – the civil war – is the story of how long run interests won over short run interests after the introduction of quota management. How industry and scientists came together to develop a harvest rule for cod. And how long it took to convince politicians to follow scientific advice rather than pursuing their own shortsighted political goals. Finally, the paper provides data on the effects abundance has on harvest costs, industry structure and profitability

Import Demand Estimation and the Generalized Composite Commodity Theorem

A frequently encountered problem in import demand estimation is how to account for competition between imports and domestic production. Traditionally, use of the Armington model has been a way to handle this problem. This is a disaggregate model which distinguishes commodities by country of origin with import demand determined in a separable two-step procedure. The model appears frequently in analysis of international agricultural markets. However, the Armington model relies on a set of weak separability assumptions, which several authors have shown to be highly questionable. In this paper, a new aggregation theorem, the Generalized Composite Commodity Theorem (GCCT), is applied to test whether imports can be treated as a separate group. An advantage with the GCCT is that only import data is required to conduct the test. The application is to the imports of swordfish to the U.S. with implications for U.S. and international swordfish management policies.Armington, separability, GCCT, demand system, sword fish, International Relations/Trade, F18, Q11, Q22,

The Relationship between Fisheries and Farming

Fishmeal is a critically important feed ingredient for use in animal (e.g., poultry and pork) and aquaculture production (e.g., salmon, trout, and shrimp). There is concern that demand for fishmeal may place additional stress on the world’s pelagic fisheries and may undermine the sustainability of some aquaculture systems that rely on fishmeal. Our research suggests that since 1998 market for fishmeal has changed. An important explanation is likely to be the increasing use of specialized feed formulations in the pork, poultry and aquaculture sectors. It is clear that growth in aquaculture production alone is insufficient to explain the structural change since growth in the use of fishmeal in aquaculture has slowed considerably despite the continued rapid growth in global aquaculture sector. The increasing relative price of fishmeal is likely to increase costs for animal producers, act as a stimulus for innovation and have considerable implications for the management of pelagic fisheries.Keywords: Interrelations between Aquaculture/Animal Production and Fisheries, Structural ChangeKeywords: Interrelations between Aquaculture/Animal Production and Fisheries, Structural Chang

Seasonal flows of economic benefits in small-scale fisheries in Liberia: A value chain analysis

Publisher's version (útgefin grein)Artisanal fisheries employ small simple craft making fishers, processors and traders vulnerable to seasonal fluctuations. This study examines effects of seasonality on supply, trading relationships and benefits distribution in two small-scale fisheries in Liberia. Quantities of seafood traded in the dry season were 6 times higher than during the rainy season. Analysis of organizational structures and marketing channels of value chains; and the differences in net benefits of actors, show that market relationships promoted competition among buyers compared to captive relationships. The difference in net benefits between fishers and traders was significant but fishers net incomes were significantly reduced during the rainy season relative to fish traders. We identify key areas of possible policy interventions, such as improving quality and infrastructure, tackling power asymmetries and promoting increased competition among middlemen.This study was supported by the National Fisheries and Aquaculture Authority (NaFAA) of Liberia, within the framework of the Sectorial Support Program of the Sustainable Fisheries Partnership Agreement between Liberia and the EU and the UNESCO Fisheries Training Program in Iceland. All the fishermen and fish traders who provided valuable information through interviews, research assistants as well as anonymous revierwers of earlier manuscript are hereby acknowledged.Peer Reviewe

Highgrading in Quota Regulated Fisheries: Evidence from the Icelandic Cod Fishery

A theoretical model with nonlinear discarding costs is constructed to describe highgrading in a fishery with an Individual Transferable Quota (ITQ) program. The model shows that ITQs provide incentives to discard fish when the hold capacity of the vessel is nonbinding. An empirical model is developed to test for highgrading and to predict the discarded quantities of different grades of fish. This model is applied to the Icelandic ITQ-regulated cod fishery. Net and long-line vessels are involved in highgrading and the quota price induces highgrading for net vessels. The predicted total discarded quantities are 4.7% and 2.7% of total landings for net and long-line vessels, respectively. Long-line and net vessels are predicted to discard 18% and 76% of their small cod catch, suggesting that resource managers should focus on net vessels. These discard rates correspond well with biometric estimates, suggesting that economic modeling is a useful alternative method

High-Grading in a Quota-Regulated Fishery, with Empirical Evidence from the Icelandic Cod Fishery

Fishers in quota-regulated fisheries find it to their advantage to discard less valuable fish at sea to increase the value of their catch. A theoretical model describing the high-grading behavior of fishers is presented, and an empirical model is derived as well as a testing strategy to test for high-grading and to estimate the discarded amount of each grade. The model is applied to data for the Icelandic quota regulated cod fishery during the period September 1998 to June 2001. The results indicate that highgrading occurs in the Icelandic cod fishery for both long-line and net vessels. However, the discard rates are small, and the results clearly suggest that the ban on discards in Iceland has effectively dealt with high-grading. The estimated discard rates are consistent with existing estimates of high-grading for the same types of vessel in the same fishery. This suggests that the modeling of discarding decisions based purely on incentives is a useful alternative to classical biometric methods

AJAE Appendix: Highgrading in Quota-Regulated Fisheries: Evidence from the Icelandic Cod Fishery

The material contained herein is supplementary to the article named in the title and published in the American Journal of Agricultural Economics.Agribusiness,