Improving the Economic Management of the Bristol Bay (Alaska) Sockeye Salmon Fishery in the Age of Aquaculture

Abstract

When evaluated using biological criteria, Alaskan salmon fisheries are considered to be among the best managed commercial fisheries in the world. Nevertheless, the economic performance of these fisheries has deteriorated in recent years as a result of a long‐term decline in ex‐vessel prices triggered by exponential growth in the world salmon farming sector, with prices reaching historic lows during the late 1990s and early 2000s. Building on the regulated open‐access model for renewable resources developed by Homans and Wilen (1997), Valderrama and Anderson (2010) conducted a formal examination of market interactions between the Bristol Bay sockeye salmon fishery and the world aquaculture sector. Their study demonstrated that the rents extracted during the initial years of the limited‐entry program were gradually dissipated as a result of overcapacity and price declines caused by aquaculture. In this study, the Valderrama and Anderson (2010) econometric model is used as a framework to evaluate the economic benefits of rights‐based management in the Bristol Bay fishery. The analysis illustrates the efficiency gains that management schemes such as harvesting cooperatives could generate by lowering the level of effort in the fishery. Given that growth in world aquaculture is expected to continue in the foreseeable future, improving efficiency in the fisheries sector is an essential step to restore some of the rents lost to competition with the aquaculture sector.