Experiences with Individual Transferable Quotas: An Overview

Abstract

I. INTRODUCTION Rights based management in fisheries is based on the allocation and enforcement of property rights in the form of access and use rights. Individual transferable quotas (ITQs) allocate the total allowable catch among fishers in the form of individual harvesting rights. In contrast to traditional regulations, ITQs operate on the principle that incentives rather than controls should be used to manage a fishery. Theoretically, if ITQs command a positive price fishers will take into account a share of the externality imposed on others provided that they are perceived as an exclusive and durable property right. It can be shown analytically that ITQs will not maximize the net return in a fishery given the existence of stock or congestion externalities, but they should lead to a superior outcome compared to open access (Boyce 1992). This paper addresses the question of whether ITQs have achieved the benefits often attributed to them. Il. EXPERIENCES WITH ITQs ITQ programmes have been implemented in a number of fisheries in several countries including Canada, Iceland, Australia and New Zealand. These programmes are evaluated to determine whether ITQs have led to changes in employment and harvesting shares, a reduction in fishing effort or an increase in profitability. 1. Reduction in Fishing Effort One of the expected benefits of ITQs is that they can reduce the excess capital employed in a fishery. Depending upon the fishery and the potential .opportunities in alternative activities, the removal of excess harvesting capacity may involve an adjustment period of several years. Grafton (1994) provides a listing of the changes in vessel numbers in selected rights based