DISCARD BEHAVIOR, HIGHGRADING AND REGULATION: THE CASE OF THE GREENLAND SHRIMP FISHERY

A formal economic analysis of the discarding problem is presented, focusing on the individual fisherman and the effect of different regulations on the fisherman's incentives to discard. It is shown that in a nonregulated fishery, either multispecies or single species/multisize, where the only constraints are the hold capacity and the length of the season, the fisherman may have rational incentives to discard/highgrade, if the marginal trip profit of an extra fishing day is greater than the average trip profit. Regulation by TAC does not change the incentives to discard. However, under INTQs and ITOs, the incentives to discard increase. The incentives to discard decrease under ITQs compared to INTQs, if the unit quota price is smaller than the shadow price of the quota. The model is applied to the Greenland shrimp fishery, where it demonstrates the reported discard behavior in the fishery. Finally, different regulations of discard are applied and discussed in the model. The analysis suggests that regulation of fishing days could be a promising alternative to usual suggested measures like tax/subsidies and landings obligations.Resource /Energy Economics and Policy,

Fisheries Management with Multiple Market Failures

Within fisheries it is well-known that several market failures exist. However, fisheries economists analyse these market failures separately despite the fact that the market failures arise simultaneously. In this paper several market fail-ures that arise simultaneously are analysed. A resource stock tax and a tax on self-reported harvest are considered as a solution to problems associated with the stock externality, measuring individual catches and stock uncertainty. Within a fisheries economic model it is shown that it will be in the interest of risk-averse fishermen to report a part of their catch even without a control pol-icy. In addition, it is shown that this tax structure can secure optimal expected individual catches and simulations show that the tax payment is very low. Thus, the tax system may be useful in practical fisheries management.Prices regulation, Quantity regulation, Asymmetric Information, Self-Reporting, Stock Tax and Harvest Tax

Regulation of Renewable Resources in Federal Systems: The Case of Fishery in th EU

The EU regulation of fisheries is decided in two levels. The level of the total allowable catch (TAC) for the most important species is decided every year by the Council of Minsters. The TACs are allocated to the Member States as quotas. The Member States determine who is going to harvest the quota. There is, however, an information problem associated with this structure. It does not take into account how efficient fishermen in different countries are. In this paper we model the information problem as an adverse selection problem and analyse an EU tax coupled to effort as an alternative to the TAC system. We work with the hypothesis that EU suffers from a fiscal illusion and includes tax revenue in the objective function in order to finance other, also inefficient, operations. Even in the light of these imperfections there are at least two reasons for recommending an EU tax. First, it can be used to correct part of the market failure associated with fishery. Second, it can be used to secure correct revealation of types in the light of asymmetric information.

A Bioeconomic Analysis of the Greenland Shrimp Fishery in the Davis Strait

This paper presents a bioeconomic analysis determining the resource rent and optimum effort of the shrimp (Pandalus borealis) fishery in the Davis Strait, taking into account the discard behaviour of the fleet. It is demonstrated that, from an economic point of view, the shrimp stock in the Davis Strait is substantially overfished. In order to obtain the maximum economic yield, the effort must be reduced by at least 40% compared to the effort level of 1991. The gain in resource rent by reducing effort is estimated to be at least 20% compared to the resource rent of 1991.Bioeconomics, rent, discard, shrimp, Greenland, Environmental Economics and Policy, Production Economics,

MANAGEMENT OF FISHERIES IN THE EU: A PRINCIPAL-AGENT ANALYSIS

In this paper, an EU tax on fishing effort is studied as an alternative to the system of Total Allowable Catches (TACs). The analysis is conducted under imperfect information, and the hypothesis adopted is that the EU lacks information about the costs of individual fishermen. In light of this imperfection, there are at least two reasons for considering an EU tax. First, it can be used to correct part of the market failure associated with fisheries. Second, it can be used to secure correct revelation of fishermen types in light of asymmetric information.Resource /Energy Economics and Policy,

Moral Hazard Problems in Fisheries Regulation: The Case og Illegal Landings

This paper treats illegal landings as a moral hazard problem that arises, since individual catches are unobservable to society and hence private information. A tax/subsidy mechanism taking into account the asymmetric information problem is formulated as a solution to problems with illegal landings. The incentive scheme uses fish stock size as the tax variable, and can be seen as an alternative to a control policy. Rough estimates from a simulation study suggest that the incentive scheme is potentially useful. The incentive scheme also has potential application as an instrument to the solution of by-catch and discard problems.

Assessing Risk and Uncertainty in Fisheries Rebuilding Plans

This paper deals with risk and uncertainties that are an inherent part of design-ing and implementing fisheries rebuilding plans. Such risk and uncertainties stem from a variety of sources, biological, economic and/or political factors, and are influenced by external factors like changing environmental conditions. The aim of this paper is to characterize such risks and uncertainties and to as-sess the importance of it in relation to the performance of fisheries rebuilding plans, to give some examples where uncertainties have negatively affected the ability of rebuilding plans to reach their intended targets and to give some guidelines how to deal with risk and uncertainties. The conclusion is that when designing fisheries rebuilding plans, it should be taken into account the availability of relevant information, such that progress is (indisputable) measurable, and causes of potential failure can be clarified. Rebuilding plans need to consider biological, economic and distributional consequences in order to reduce uncertainties and to ensure successful implementation of the plan. Risk communication is also valuable in the process, since it gives transparency of the objectives and means to meet these objectives, elucidates crucial information from stakeholders and legitimates the whole process of designing and implementing the rebuilding plans, which is essential for the success of these plans. To that end the plans should be as simple and realistic as possible. It is recommended to apply risk analysis and to use the precautionary principle only in cases where large uncertainties exists and/or potentially high costs exits of ignoring the uncertainty cannot be resolved. Two fisheries rebuilding plans are analysed and how they address risk and uncertainties are evaluated. This study was done under contract with the OECD. The authors are grateful to Gunnar Haraldsson and Saba Khwaja for comments and advise.

Ecological Benchmarking to Explore Alternative Fishing Schemes to Protect Endangered Species by Substitution: The Danish Demersal Fishery in the North Sea

The cod stock in the North Sea is threatened by overexploitation. To recover this fishing stock, pressure needs to be reduced. This implies that catch compositions with small amounts of cod are preferred by public policy makers. The present analysis assesses the technological efficiency of fishing trips in terms of the substitution possibilities away from cod by considering landings of cod as an undesirable output. A conservative non-parametric frontier technology approach imposing minimal assumptions and based on directional distance functions is applied to explore alternative fishing activities for Danish gill netters operating in the North Sea with the goal of reducing cod catches. Since performance on different fishing trips may be influenced by the operating environment, a four-stage approach is applied to correct for exogenous factors (Fried et al. (1999)). The corrected directional distance function efficiency scores reveal the behavioural inefficiencies, i.e., prospects for decreasing the catch of cod while catch of other species are increased.Capacity, Directional distance function, Fisheries, Output Substitution

Cost-Benefit Analysis of the Greenland Offshore Shrimp Fishery

This paper examines the social economic value of the Greenland off-shore shrimp fishery. The contribution of the fishery to the economy is examined us-ing a cost-benefit analysis where the objective of the report is to examine the current state of the fishery rather than possible changes, which are a political decision. The analysis is undertaken by examining the state and development of the off-shore shrimp fishery in Greenland, as well as the changes in profits, sales and production in the years 2006 and 2007. Financial accounts and costs data pro-vided by the companies fishing in Greenland have contributed to estimating the net value of the industry. The management cost is included as well in the analysis. The paper concludes that there is a positive economic benefit from the shrimp fishery in Greenland, which is believed to be caused by the efficient manage-ment system of the fishery (based on Individual Transferable Quotas). It is fur-ther shown that the companies and the crew gains nearly the whole net-benefit from the fishery, while the public finance are not gaining much. Acknowledgements. We want to thank the contact persons from the companies and Greenland Statistics: Søren Brandt (Qajaq Trawl), Carl Christensen (Niisa Trawl), Jens Bisgaard (Royal Greenland and Ice Trawl), Henrik Krogh and Kjeld Holmstrup (Polar Seafood) and Gert Schmidt, Per Lyster Pedersen and Lars Geraa from Greenland Statistics. We also want to thank Henrik Leth and Jens K. Lyberth from the Confederation of Greenland Employers for good discussions and help during the project as well as financial support. The study was made possible thanks to financial support from the Confederation of Greenland Employers.Greenland, shrimp, fishery, Cost-Benefit Analysis, economic rent