Fisheries co-management and transaction costs

Fisheries co-management is increasingly seen as a solution to the problems of resource use conflicts and overexploitation. The importance of transactions costs may not have been given adequate attention. The transaction costs are 1) information costs, 2) collective decisionmaking tools, and 3) collective operational costs. The various components of transaction costs of fisheries co-management systems are described in this paper. These costs need to be determined for evaluating the feasibility of a co-managed fishery compared to a centrally managed one.

U.S. Caribbean fish trap fishery costs and earnings study

Executive Summary: This study describes the socio-economic characteristics of the U.S. Caribbean trap fishery that encompasses the Commonwealth of Puerto Rico and Territory of the U.S. Virgin Islands. In-person interviews were administered to one hundred randomly selected trap fishermen, constituting nearly 25% of the estimated population. The sample was stratified by geographic area and trap tier. The number of traps owned or fished to qualify for a given tier varied by island. In Puerto Rico, tier I consisted of fishermen who had between 1-40 fish traps, tier II was made up of fishermen who possessed between 41 and 100 fish traps, and tier III consisted of fishermen who held in excess of 100 fish traps. In St. Thomas and St. John, tier I was composed of fishermen who held between 1 and 50 fish traps, tier II consisted of fishermen who had between 51-150 fish traps and tier III was made up of fishermen who had in excess of 150 fish traps. Lastly, in St. Croix, tier I was made up of fishermen who had less than 20 fish traps and tier II consisted of fishermen who had 20 or more fish traps. The survey elicited information on household demographics, annual catch and revenue, trap usage, capital investment on vessels and equipment, fixed and variable costs, behavioral response to a hypothetical trap reduction program and the spatial distribution of traps. The study found that 79% of the sampled population was 40 years or older. The typical Crucian trap fisherman was older than their Puerto Rican and St. Thomian and St. Johnian counterparts. Crucian fishermen’s average age was 57 years whereas Puerto Rican fishermen’s average age was 51 years, and St. Thomian and St. Johnian fishermen’s average age was 48 years. As a group, St. Thomian and St. Johnian fishermen had 25 years of fishing experience, and Puerto Rican and Crucian fishermen had 30, and 29 years, respectively. Overall, 90% of the households had at least one dependent. The average number of dependents across islands was even, ranging between 2.8 in the district of St. Thomas and St. John and 3.4 in the district of St. Croix. The percentage utilization of catch for personal or family use was relatively low. Regionally, percentage use of catch for personal or family uses ranged from 2.5% in St. Croix to 3.8% in the St. Thomas and St. John. About 47% of the respondents had a high school degree. The majority of the respondents were highly dependent on commercial fishing for their household income. In St. Croix, commercial fishing made up 83% of the fishermen’s total household income, whereas in St. Thomas and St. John and Puerto Rico it contributed 74% and 68%, respectively. The contribution of fish traps to commercial fishing income ranged from 51% in the lowest trap tier in St. Thomas and St. John to 99% in the highest trap tier in St. Croix. On an island basis, the contribution of fish traps to fishing income was 75% in St. Croix, 61% in St. Thomas and St. John, and 59% in Puerto Rico. The value of fully rigged vessels ranged from $400 to $250,000. Over half of the fleet was worth $10,000 or less. The St. Thomas and St. John fleet reported the highest mean value, averaging $58,518. The Crucian and Puerto Rican fleets were considerably less valuable, averaging $19,831 and $8,652, respectively. The length of the vessels ranged from 14 to 40 feet. Fifty-nine percent of the sampled vessels were at least 23 feet in length. The average length of the St. Thomas and St. John fleet was 28 feet, whereas the fleets based in St. Croix and Puerto Rico averaged 21 feet. The engine’s propulsion ranged from 8 to 400 horsepower (hp). The mean engine power was 208 hp in St. Thomas and St. John, 108 hp in St. Croix, and 77 hp in Puerto Rico. Mechanical trap haulers and depth recorders were the most commonly used on-board equipment. About 55% of the sampled population reported owning mechanical trap haulers. In St. Thomas and St. John, 100% of the respondents had trap haulers compared to 52% in Puerto Rico and 20% in St. Croix. Forty-seven percent of the fishermen surveyed stated having depth recorders. Depth recorders were most common in the St. Thomas and St. John fleet (80%) and least common in the Puerto Rican fleet (37%). The limited presence of emergency position indication radio beacons (EPIRBS) and radar was the norm among the fish trap fleet. Only 8% of the respondents had EPIRBS and only 1% had radar. Interviewees stated that they fished between 1 and 350 fish traps. Puerto Rican respondents fished on average 39 fish traps, in contrast to St. Thomian and St. Johnian and Crucian respondents, who fished 94 and 27 fish traps, respectively. On average, Puerto Rican respondents fished 11 lobster traps, and St. Thomian and St. Johnian respondents fished 46 lobster traps. None of the Crucian respondents fished lobster traps. The number of fish traps built or purchased ranged between 0 and 175, and the number of lobster traps built or bought ranged between 0 and 200. Puerto Rican fishermen on average built or purchased 30 fish traps and 14 lobster traps, and St. Thomian and St. Johnian fishermen built or bought 30 fish traps and 11 lobster traps. Crucian fishermen built or bought 25 fish traps and no lobster traps. As a group, fish trap average life ranged between 1.3 and 5 years, and lobster traps lasted slightly longer, between 1.5 and 6 years. The study found that the chevron or arrowhead style was the most common trap design. Puerto Rican fishermen owned an average of 20 arrowhead traps. St. Thomian and St. Johnian and Crucian fishermen owned an average of 44 and 15 arrowhead fish traps, respectively. The second most popular trap design was the square trap style. Puerto Rican fishermen had an average of 9 square traps, whereas St. Thomian and St. Johnian fishermen had 33 traps and Crucian fishermen had 2 traps. Antillean Z (or S) -traps, rectangular and star traps were also used. Although Z (or S) -traps are considered the most productive trap design, fishermen prefer the smaller-sized arrowhead and square traps because they are easier and less expensive to build, and larger numbers of them can be safely deployed. The cost of a fish trap, complete with rope and buoys, varied significantly due to the wide range of construction materials utilized. On average, arrowhead traps commanded $94 in Puerto Rico, $251 in St. Thomas and St. John, and $119 in St. Croix. The number of trips per week ranged between 1 and 6. However, 72% of the respondents mentioned that they took two trips per week. On average, Puerto Rican fishermen took 2.1 trips per week, St. Thomian and St. Johnian fishermen took 1.4 trips per week, and Crucian fishermen took 2.5 trips per week. Most fishing trips started at dawn and finished early in the afternoon. Over 82% of the trips lasted 8 hours or less. On average, Puerto Rican fishermen hauled 27 fish traps per trip whereas St. Thomian and St. Johnian fishermen and Crucian fishermen hauled 68 and 26 fish traps per trip, respectively. The number of traps per string and soak time varied considerably across islands. In St. Croix, 84% of the respondents had a single trap per line, whereas in St. Thomas and St. John only 10% of the respondents had a single trap per line. Approximately, 43% of Puerto Rican fishermen used a single trap line. St. Thomian and St. Johnian fishermen soaked their traps for 6.9 days while Puerto Rican and Crucian fishermen soaked their traps for 5.7 and 3.6 days, respectively. The heterogeneity of the industry was also evidenced by the various economic surpluses generated. The survey illustrated that higher gross revenues did not necessarily translate into higher net revenues. Our analysis also showed that, on average, vessels in the trap fishery were able to cover their cash outlays, resulting in positive vessel income (i.e., financial profits). In Puerto Rico, annual financial profits ranged from $4,760 in the lowest trap tier to $32,467 in the highest tier, whereas in St. Thomas and St. John annual financial profits ranged from $3,744 in the lowest tier to $13,652 in the highest tier. In St. Croix, annual financial profits ranged between $9,229 and $15,781. The survey also showed that economic profits varied significantly across tiers. Economic profits measure residual income after deducting the remuneration required to keep the various factors of production in their existing employment. In Puerto Rico, annual economic profits ranged from ($9,339) in the lowest trap tier to $ 8,711 in the highest trap tier. In St. Thomas and St. John, annual economic profits ranged from ($7,920) in the highest tier to ($18,486) in the second highest tier. In St. Croix, annual economic profits ranged between ($7,453) to $10,674. The presence of positive financial profits and negative economic profits suggests that higher economic returns could be earned from a societal perspective by redirecting some of these scarce capital and human resources elsewhere in the economy. Furthermore, the presence of negative economic earnings is evidence that the fishery is overcapitalized and that steps need to be taken to ensure the long-run economic viability of the industry. The presence of positive financial returns provides managers with a window of opportunity to adopt policies that will strengthen the biological and economic performance of the fishery while minimizing any adverse impacts on local fishing communities. Finally, the document concludes by detailing how the costs and earnings information could be used to develop economic models that evaluate management proposals. (PDF contains 147 pages)

A Low-level Geographic Information System for coastal zone management, with application to Brunei Darussalam. Part II:: Economic analysis of trawling in Brunei Darussalam

Economic analysis of the trawl fishery of Brunei Darussalam was conducted using cost and returns analysis and based on an economic survey of trawlers and B:RUN, a low-level geographic information system. Profitability indicators were generated for the trawl fleet under various economic and operational scenarios. The results show that financial profits are earned by trawlers which operate off Muara, particularly those with high vessel capacity, and that these profits could be further enhanced. On the other hand, a similar fleet operating off Tutong would generate profits due mainly to high fish biomass. Trawling operations offshore are deemed financially unfeasible. Incorporating realistic opportunity costs and externalities for existing trawl operations off Muara results in economic losses.

A Low-level Geographic Information System for coastal zone management, with applications to Brunei Darussalam: Part I: The concept and its design elements

This contribution is the first part of a four-part series documenting the development of B:RUN, a software program which reads data for common spreadsheets and presents them as low-resolution maps of slates and processes. The program emerged from a need which arose during a project in Brunei Darussalam for a 'low level' approach for researchers to communicate findings as efficiently and expeditiously as possible. Part I provides a overview of the concept and design elements of B:RUN. Part II will highlight results of the economics components of the program evaluating different fishing regimes, sailing distances from ports and fleet operating costs. Environmental aspects will be presented in Part III in the form of overlay maps. Part IV will summarize the implications of B:RUN results to coastal and fishery resources management in Brunei Darussalam and show how this approach can be adapted to other coastlines and used as a teaching and training tool. The following three parts will be published in future editions of Naga, the ICLARM Quarterly. The program is available through ICLARM.

Reported Trip Costs, Gross Revenues, and Net Returns for U.S. Atlantic Pelagic Longline Vessels

Logbook set and trip summary data (containing catch and cost information, respectively) collected by NOAA’s National Marine Fisheries Service (NMFS) were analyzed for U.S. pelagic longline vessels that participated in Atlantic fisheries in 1996. These data were augmented with vessel information from the U.S. Coast Guard. Mean fish weights and ex-vessel prices from NMFS observers and licensed seafood dealers, respectively, were used to estimate gross revenues. Comparisons revealed that net returns varied substantially by vessel size and fishing behavior (i.e. sets per trip, fishing location, season, and swordfish targeting). While the calculated economic effects of proposed regulations will depend on the descriptive statistic chosen for analysis, which itself depends on the type of analysis being conducted, results show that considering heterogeneity within this fleet can have a significant effect on predicted economic consequences.

Evaluation of the economic costs and benefits of methods for reducing nutrient loads to the Gulf of Mexico: Topic 6 Report for the Integrated Assessment on Hypoxia in the Gulf of Mexico.

In this report we analyze the Topic 5 report’s recommendations for reducing nitrogen losses to the Gulf of Mexico (Mitsch et al. 1999). We indicate the relative costs and cost-effectiveness of different control measures, and potential benefits within the Mississippi River Basin. For major nonpoint sources, such as agriculture, we examine both national and basin costs and benefits. Based on the Topic 2 economic analysis (Diaz and Solow 1999), the direct measurable dollar benefits to Gulf fisheries of reducing nitrogen loads from the Mississippi River Basin are very limited at best. Although restoring the ecological communities in the Gulf may be significant over the long term, we do not currently have information available to estimate the benefits of such measures to restore the Gulf’s long-term health. For these reasons, we assume that measures to reduce nitrogen losses to the Gulf will ultimately prove beneficial, and we concentrate on analyzing the cost-effectiveness of alternative reduction strategies. We recognize that important public decisions are seldom made on the basis of strict benefit–cost analysis, especially when complete benefits cannot be estimated. We look at different approaches and different levels of these approaches to identify those that are cost-effective and those that have limited undesirable secondary effects, such as reduced exports, which may result in lost market share. We concentrate on the measures highlighted in the Topic 5 report, and also are guided by the source identification information in the Topic 3 report (Goolsby et al. 1999). Nonpoint sources that are responsible for the bulk of the nitrogen receive most of our attention. We consider restrictions on nitrogen fertilizer levels, and restoration of wetlands and riparian buffers for denitrification. We also examine giving more emphasis to nitrogen control in regions contributing a greater share of the nitrogen load.