Optimal Vessel Quotas and Capacity of a Danish Trawler Fleet Segment: A Dual Approach

In the period of investigation, 1995–2000, the Danish fishery for species meant for human consumption was managed by individual non-transferable vessel quotas, while the fishery for species meant for fishmeal and fish oil was subject to a total quota. The revenues of the fishermen targeting species for human consumption are therefore fixed on the assumption that they are price takers, and that they will maximize profits by minimizing their costs. To model the economic behaviour of the fishermen in terms of the optimal quota size per vessel and optimal fleet size, a dual cost-function approach is an appropriate choice. This method is applied using a generalized Leontief cost function to model the behaviour of the Danish fleet of trawlers below 50 GRT, targeting species for human consumption solely. The estimated cost function is used to determine the optimal quotas yielding: (i) minimum average cost and (ii) maximum profit. The results of the estimations show that the optimal quotas per vessel should be increased by more than 2.5 times and consequently that the fleet should be reduced by more than 60%. As this has not been the case, a probable explanation is that non-transferable quotas leave the fishermen with the option of quitting the fishery only if a decommissioning programme is in place. There is no option to transfer the quota to another vessel.Cost function, dual approach, economic behaviour, Leontief cost function, long-run equilibrium, maximum profit, minimum average cost., Institutional and Behavioral Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, B41, C13, C61, C67,

COULD WELFARE OPTIMALITY BE ACHIEVED WITH EXTENSIVE DATA INFORMATION?

This paper examines whether the Danish management system achieves welfare maximisation. For cod in the North Sea, Skagerrak, and Kattegat, rations are used. It is shown that rations raise substantial information requirements and that the existing allocation of rations is inoptimal. In addition, a linear programming model is used to show that there is considerable overcapacity in the Danish trawler fleet in the Baltic Sea. Danish fisheries managers have access to an extensive data set, and with the available information it would be possible to secure a welfare optimum.Resource /Energy Economics and Policy,

Modelling economic response to harvest and effort control in North Sea cod fishery

A number of European fishing fleets have been regulated through a combination of quota and effort (sea days) controls since 2004. These two regulation schemes are, however, interrelated, i.e. a given quota limit will necessarily determine the effort used and vice versa. A bioeconomic feedback model is presented which takes this causality between effort and harvest control into account, and switches back and forth between these two regulation schemes depending on which is the binding rule. The model is based on biological stock projection, and quotas are set using the Pope approximation while an economic production function is used to estimate the harvest when the effort is binding. The economic response of the fleet is modelled through a dynamic investment/disinvestment module which evaluates the change in the fleet capacity given the economic outcome of the fishery. A simple example is presented for the Danish seiners catching cod in the North Sea. The model has been constructed as part of the 6th framework project “Operational Evaluation Tools for Fisheries Management Options (EFIMAS)”