The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

An investigation of the organization of canoe fisheries in Nigeria: A case study of Ilaje/Esedo local government area of Ondo State

The effects of some socio-economic variables on the performance of artisanal fishermen were investigated. The variables include the age-structure of the fishermen, level of investment, educational background, membership of co-operative societies and marketing arrangements. All these variables were found to be crucial to productivity in the artisanal fishing sector

Poverty alleviation among fishermen within the floodplains of Kaduna River: implication for introducing commercial fish farming at village level in Doko local government area of Niger State, Nigeria

A diagnostic survey was conducted among the fishermen in six selected villages in Doko Local Government Area of Niger State. One hundred and fifty fishermen were randomly selected and interviewed to find out whether or not they had interest in commercial fish farming aimed at improving their livelihood. The dwindling fish catches in the natural flood plain ponds and Ex-bow Lakes continue to have a serious negative effect on the socio-economic well being of the village communities in question. A break on natural regular annual flooding of the plains had resulted into very low natural fish recruitment. Data analysis using simple descriptive statistics revealed that land tenure system, educational status, inadequate infrastructural facilities, religious taboos, existing fish species among others were found to be favourable indices for commercial fish farming. However, serious conflicts among the fishermen concerning the ownership status of these natural fish ponds are found to be major obstacles to commercial fish farming despite that the traditional ownership of the ponds were vested in the lands of individuals and village communities. Extensive fish farming and small-scale fish farming in the ponds and Ex-bow Lake with improved management practices are considered to be profitable venture. Despite the fact that fish seeds supply and extension effort are still inadequate, the fish farmers have indicated willingness to adopt commercial fish farming in the Ex-bow Lakes and flood plains in order to restore abundant fish production thereby providing for their food security and also increasing the daily income

Impact assessment of Niger State fisheries legislation on fisheries conservation in Edozhigi local government area (L.G.A.) of Niger State

A preliminary survey was conducted among the fishermen in five selected villages in Edozhigi L.G.A. of Niger State. One hundred and fifty fishermen were randomly selected and interviewed to find out the impact of Niger State fisheries legislation on fisheries conservation resources in the area. The analysis of data collected using descriptive statistics indicated that undersized mesh of gill nets, beach seines and traps are being used unabated. Also, fenced barriers across the entrance of flood plain ponds and Ex-bow lakes from the main stream are in the area. The fisheries rules and regulations implementers are rarely seen or not seen at all in the area. The decreasing nature of fish catches was detected. It is observed that government policy on fish conversation is neglected due to inadequate or lack of funding for meaningful extension and implementation of the fisheries rules and regulations

Government-Industry Cooperative Fisheries Research in the North Pacific under the MSFCMA

The National Marine Fisheries Service’s Alaska Fisheries Science Center (AFSC) has a long and successful history of conducting research in cooperation with the fishing industry. Many of the AFSC’s annual resource assessment surveys are carried out aboard chartered commercial vessels and the skill and experience of captains and crew are integral to the success of this work. Fishing companies have been contracted to provide vessels and expertise for many different types of research, including testing and evaluation of survey and commercial fishing gear and development of improved methods for estimating commercial catch quantity and composition. AFSC scientists have also participated in a number of industry-initiated research projects including development of selective fishing gears for bycatch reduction and evaluating and improving observer catch composition sampling. In this paper, we describe the legal and regulatory provisions for these types of cooperative work and present examples to illustrate the process and identify the requirements for successful cooperative research.

Technical efficiency in artisanal fisheries (AF) in Badagry local government area of Lagos State, Nigeria

This study examined the technical efficiency in artisanal fisheries in Lagos State of Nigeria. The study employed a two stage random sampling procedure for the selection of 120 respondents. The analytical techniques involved descriptive statistics and estimation of technical efficiency following maximum likelihood estimation (MLE) procedure available in FRONTIER 4.1. The MLE result of the stochastic frontier production function showed that hired labour, cost of repair and capital items are critical factors that influences productivity of artisanal fishermen with the coefficient of hired labour being highly elastic. This implies that employing more labour will significantly increase the catch in the study area. The predicted farm efficiency with an average value of 0.92 showed that there is a marginal potential of about 8 percent to increase the catch, hence the income of the fishermen. The study further examined the factors that influence productivity of fishermen in the study area. Year of education, mode of operation and frequency of fishing have important implication on the technical efficiency of fishermen in the study area.