Fishing vessel profitability and local economic link obligations—the case of Norwegian trawlers

Abstract

This paper investigates to what extent limited entry licence local-link obligations hamper economic performance of Norwegian wet fish trawlers. For 1999 average landing prices, gross revenue, net profit and some other economic indicators are compared for three groups of trawlers: (A) vessels that had local-link licence obligations and complied with them; (B) vessels that had such obligations but did not comply; and (C) vessels without local-link obligations. Average operating profit was highest for Group C. Group B vessels’ operating profit was just above that of Group A, despite significantly higher revenues. For all fish species, except redfish, Group C trawlers received higher prices than the other vessels.