Individual Transferable Quotas Research Articles

How to Sustain Fisheries: Expert Knowledge from 34 Nations

Ensuring productive and sustainable fisheries involves understanding the complex interactions between biology, environment, politics, management and governance. Fisheries are faced with a range of challenges, and without robust and careful management in place, levels of anthropogenic disturbance on ecosystems and fisheries are likely to have a continuous negative impact on biodiversity and fish stocks worldwide. Fisheries management agencies, therefore, need to be both efficient and effective in working towards long-term sustainable ecosystems and fisheries, while also being resilient to political and socioeconomic pressures. Marine governance, i.e., the processes of developing and implementing decisions over fisheries, often has to account for socioeconomic issues (such as unemployment and business developments) when they attract political attention and resources. This paper addresses the challenges of (1) identifying the main issues in attempting to ensure the sustainability of fisheries, and (2) how to bridge the gap between scientific knowledge and governance of marine systems. Utilising data gained from a survey of marine experts from 34 nations, we found that the main challenges perceived by fisheries experts were overfishing, habitat destruction, climate change and a lack of political will. Measures suggested to address these challenges did not demand any radical change, but included extant approaches, including ecosystem-based fisheries management with particular attention to closures, gear restrictions, use of individual transferable quotas (ITQs) and improved compliance, monitoring and control.

An Empirical Analysis of Individual Fishing Quota Market Trading

AbstractIn the study, we investigate determinants of individual fishing quota (IFQ) lease price and transfer of permanent share in the General Category Scallop fishery of the Northeastern United St...

The hidden role of processors in an individual transferable quota fishery

The hidden role of processors in an individual transferable quota fishery

Why marginality persists in a governable fishery\u2014the case of New Zealand

This paper examines reproduction of marginality evident in fisheries. Uneven relations are widespread across geography and scale; between distant water fishing nations and coastal developing countries; between fishers on large-scale trawlers and smaller boats; between local elites and peasant operators; and between boat owners and crews working in poor and slave-like conditions. With inequality and social exclusion being such a pervasive phenomenon, we ask why do these relationships persist? Using governability, developed within the interactive governance approach, as an overarching basis for interpreting this issue, the purpose of this paper is to demonstrate the possibility that marginality is not only a feature of ungovernability but might also occur in a highly governable system. To advance this insight, we apply theoretical tools associated with Marxist-Gramscian political ecology to the case of small-scale fisher exclusion brought on by the implementation of an individual transferable quota system in New Zealand’s commercial fishery. In particular, we identify social and economic relations that give rise to an accentuated capitalist structure whereby the quota-owning sector of the population (e.g., processing companies and Maori tribal organizations) control the ways in which fishers access economic benefits from their labor. Over the years, the quota system has gained acceptance as a resource management strategy, an intervention that is now ideologically hard to break away. The result is the reproduction of fishers’ exclusion, which contributes to a governable fishery, rather than an ungovernable one. This understanding casts a critical note on what we mean by governability, directing our attention to the ethical questions regarding how fisheries are to be governed and the risks that come with its pursuit.

Analysing the fisheries policy reform in the Faroe Islands: On the path to sustainability?

The home fishery in the Faroe Islands has since 1996 been managed predominantly with fishing days. The system has proven ineffective and has led to overfishing, fleet overcapacity, and low profitability in the home fishery. A process of reform began in 2007 when fishing licenses were terminated, effective from January 1, 2018. A fisheries policy reform was adopted by the Faroese Parliament in December 2017, just weeks before licenses expired. This paper describes the substantial fisheries policy reform and analyses its likely effectiveness and impact on the Faroese fishing industry. New measures include total allowable catch and individual transferable quotas for parts of the home fleet; allocation of fishing rights through auctions and development quotas; harvest fees; and the complete elimination of foreign ownership and capital. The fishing days system will remain in place for the coastal fleet. We identify a number of barriers for success, most notably that measures to ensure sustainability in the home fishery only apply to parts of the fleet, which may render them ineffective and hinder the much needed recovery of the important cod and haddock stocks in Faroese waters. Full implementation of the fisheries reform may be hindered by a lack of political consensus on a number of matters, and ultimately, full implementation depends on the outcome of the next general election in the Faroe Islands (2019), as the current opposition has made it clear it prefers the fishing days system.

Collective Rights–Based Fishery Management: A Path to Ecosystem-Based Fishery Management

Fishery rents may be dissipated across margins not well defined or controlled by an individual transferable quota system. Collective rights–based fishery management (CRBFM), where catch rights are held by a group, can sometimes generate greater benefits and can also address external impacts of the fishery. I discuss potential failures of individual quotas and how these problems were addressed by CRBFM institutions. I then focus on the role of CRBFM in addressing environmental and social impacts external to the group of fishers, such as bycatch, habitat impacts, and spatial conflicts. The review suggests that CRBFM can effectively address both intrafishery and external impacts, provided there is sufficient incentive to do so, including maintaining access to preferred markets or the threat of further regulation. However, CRBFM can create moral hazard and adverse selection problems, and successful CRBFM institutions generally have homogeneous membership with well-aligned interests and/or formal contracts with monitoring and enforcement provisions.

Investigating trade-offs in alternative catch share systems: an individual-based bio-economic model applied to the Bay of Biscay sole fishery

An individual-based bio-economic model is presented and applied to the Bay of Biscay sole (Solea solea) fishery to investigate alternative quota management systems from a multicriteria perspective. For this study, the model integrates several institutional arrangements related to catch share management. The current French co-management system with nontransferability of quota is compared with an alternative individual transferable quota (ITQ) system in a context of transition to maximum sustainable yield. Trade-offs between ecological and socioeconomic impacts are highlighted and the effectiveness of governance scenarios is discussed in regard to the challenge of capacity adjustment. Results emphasize that the introduction of ITQs is expected to reduce by 40% the number of vessels in the fishery. While effectively mitigating the economic impacts of the transition phase to maximum sustainable yield, ITQs are also expected to increase substantially the fishing effort by trawlers, which may cause ecological concerns. The scenarios tested also include the simulation of a decommissioning scheme where subsequent decommissioned vessels are considerably different from the vessels that would lease out their quotas in an ITQ system, resulting in differentiated ecological and socioeconomic impacts between scenarios.

Moving beyond panaceas in fisheries governance

In fisheries management—as in environmental governance more generally—regulatory arrangements that are thought to be helpful in some contexts frequently become panaceas or, in other words, simple formulaic policy prescriptions believed to solve a given problem in a wide range of contexts, regardless of their actual consequences. When this happens, management is likely to fail, and negative side effects are common. We focus on the case of individual transferable quotas to explore the panacea mindset, a set of factors that promote the spread and persistence of panaceas. These include conceptual narratives that make easy answers like panaceas seem plausible, power disconnects that create vested interests in panaceas, and heuristics and biases that prevent people from accurately assessing panaceas. Analysts have suggested many approaches to avoiding panaceas, but most fail to conquer the underlying panacea mindset. Here, we suggest the codevelopment of an institutional diagnostics toolkit to distill the vast amount of information on fisheries governance into an easily accessible, open, on-line database of checklists, case studies, and related resources. Toolkits like this could be used in many governance settings to challenge users’ understandings of a policy’s impacts and help them develop solutions better tailored to their particular context. They would not replace the more comprehensive approaches found in the literature but would rather be an intermediate step away from the problem of panaceas.

Atlantic and Pacific halibut co‐management initiatives by Canadian fishermen's organizations

AbstractMany fisheries managers and neoliberal fisheries economists promote Individual Transferable Quotas (ITQs) as a solution to the race for fish which can cause rent dissipation under competitive quota or open access fisheries. These actors consider the Canadian Pacific halibut ITQ fishery an example of successful achievement of these objectives. However, critics note the weak performance of this management model in distribution of benefits, increased capital costs to fishermen, deteriorating safety conditions, reductions in crew income and barriers to entry. They point to the layup system which successfully managed effort in the Pacific halibut fishery for four decades prior to the introduction of ITQs. A system similar to the layup has been used for Atlantic halibut since 2013, initiated by the Fish Food and Allied Workers (FFAW) representing owner‐operator license holders in the halibut fishery off the coast of western Newfoundland and southern Labrador. The FFAW rejected the two halibut management plan options presented to them by Fisheries and Oceans Canada: the status quo (a competitive 12‐hr “derby” fishery) or IQs, likely leading to ITQs. Instead, the FFAW worked with license holders to develop a management plan that required harvesters to choose between different fishing periods that spread fishing opportunities over time. This approach improved conservation results, delivered strong economic returns, distributed benefits widely to active fishermen, and allowed an even flow into the market. The authors consider the advantages of these Canadian east and west coast halibut co‐management systems and their broader application.

Reducing bycatch through a risk pool: A case study of the U.S. West Coast groundfish fishery

Voluntary collective agreements among fishermen can improve the environmental and economic performance of a fishery, particularly when local leadership, strong incentives, catch accountability, and operational support are in place. Rights-based fisheries, such as Individual Fishing Quota (IFQ) systems, incentivize fishermen to act collectively to reduce fishing impacts, enhance stock health, and improve economic outcomes. However, developing cooperatives requires durable contracts, operational capacity, funding, and the ability to track, monitor, and enforce agreed-upon catches and fishing practices. This project focuses on the U.S. West Coast groundfish trawl IFQ fishery, and how the formation of a voluntary collective agreement, in the form of a bycatch risk pool (California Groundfish Collective), achieved improved fishery performance and other ancillary benefits. Up-front investment in the risk pool by a conservation non-governmental organization (NGO) provided both capacity and quota to cover transaction costs and incentivize transition to a cooperative model that was implemented across 5 ports and more than 48,000 km2 of fishing grounds off California. The challenges encountered in developing and operating the risk pool offer insights into designing and implementing voluntary collective agreements. By using spatial fishing plans and technology for collecting and sharing catch information, risk pool members reduced bycatch of overfished species relative to the fleet at large. Risk pool members were also able to use their spatial fishing data to inform a seafood sustainability rating and propose areas for Essential Fish Habitat protection, their quota pounds to support collaborative research on overfished species, and their collective membership to advocate for policy.

Fishing for a fee: Resource rent taxation in Iceland's fisheries

In 1990, Iceland established a comprehensive fisheries management system based on individual transferable quotas (ITQs). Simultaneously, low-cost licence fees, which the fishing industry paid to the government, were introduced. As the ITQ system became more mature and the financial performance of the fisheries improved, there was increasing public demand for the sharing of its resource rent. A special resource committee was set up in 1998 to address these views and concluded that a new fishing fee should be established to cover the cost associated with managing and supervising the use of marine resources, as well as making certain that a visible share of the resource rent accrued to the public. Although the fishing fee has changed since its introduction in 2004, the basic principles behind the taxation remain the same. Five issues have made the introduction and implementation of the fishing fees difficult. The first regards the fee amount for different species. The second relates to the variance in profitability between harvesting companies. The third concerns measurement of revenue and profits from harvesting in vertically integrated firms. The fourth issue is related to how to deal with the debt burden that became quite large for many Icelandic harvesting firms after the financial crisis of 2008. Finally, obtaining reliable data has been a major challenge. This paper provides a background to the implementation of the Icelandic fishing fee, describes and investigates fishing fees issues and their address by the government. In 2014, the fee amounted to 52 million euros, 6.0% of the catch value of Icelandic fishing vessels and around 1.2% of the total revenue of the Icelandic Treasury.

Mapping the geographical consolidation of fishing activities in Iceland during the maturation of the ITQ fisheries management system

Consolidation of the fishing industry worldwide is an issue heavily debated among scholars. Many economists have argued for its necessity, while others – such as sociologists, anthropologists and geographers – have pointed out negative effects of consolidation on fishing communities.The aim of this paper is to measure the geographical consolidation of fishing in Iceland since the introduction of the quota management system in 1984, and during its development into an individual transferable quota system (ITQ). Lorenz curves, Gini calculations and maps are used for this purpose. Consolidation of the fishing sector is a logical outcome of ITQs and the analysis shows that the ITQ system has led to increased geographical consolidation in the demersal and pelagic sectors in Iceland. Regions and communities are unequally affected by geographical consolidation and many small fishing communities are vulnerable to changes in the industry.The results are of value for fisheries management policy formation. When designing fisheries policy for the 21st century it is important to not only consider economic efficiency, but also geographical consolidation and its impact.

Individual Transferable Quotas Versus Taxation in Free Entry

In this paper, we consider a market where potential firms, which are allowed to be asymmetric, can freely enter and exit, and the total output would be socially excessive without any regulation. The effects of two alternative regulatory policies in the market: the individually transferable quota system and the specific tax system are compared. We show that any equilibrium market outcome under the specific tax system can be achieved under the individually transferable quota system, but the converse is not true.

Fisheries policy in the Faroe Islands: Managing for failure?

The Faroe Islands have had five different fisheries management regimes for their demersal home fleet between 1948 and 2018: open access; regulated open access; a licensing system; a brief period of individual transferable quotas (ITQ); and, since 1996, an effort quota system, where the main control component comprises fishing days without total allowable catch (TAC) control. The Faroese cod and haddock stocks are severely overfished, and the fleet is largely unprofitable because of excess capacity and the stocks’ poor state. This paper describes and analyses the main characteristics of the regimes and developments in policy to determine why management has failed. The results are compared with the Faroese pelagic and distant-water fleets, which are managed jointly with other coastal states using TAC and ITQ, to identify inconsistencies in policy and implementation. The conclusion is that the Faroese authorities have 1) persistently believed that fishing can be directed away from overfished stocks but have failed to accomplish this; 2) demonstrated short-sightedness in the management of their demersal fishery; 3) shown an unwillingness to effectively reduce fishing pressure and — by implication – employment in the fisheries sector for the sake of sustainability; and 4) shown that they can manage their fleets sustainably, as demonstrated by the pelagic and distant-water fleets, but have largely been unwilling to regarding the home fleet.

Prosper or perish? The development of Icelandic fishing villages after the privatisation of fishing rights

Icelandic fish stocks underwent privatisation in 1990, when existing fishing quotas were made fully transferable. The country’s system of individual transferable quotas has since been held up as a paragon of virtue for sustainable fisheries. This might be valid for ecological and most economic concerns, but for a truly sustainable fisheries management system the question of social impacts has to be addressed as well. This paper evaluates the performance of Icelandic fisheries management from a spatial and social point of view. The theoretical framing stems from the concepts of resilience and vulnerability. Through cluster and correlation analyses, different development trajectories of Icelandic fishing communities since 1990 are revealed. The results are presented on maps. Even though it is no longer the country’s largest economic sector, the livelihood of many small and remote settlements is strongly connected to the fisheries. Consolidation has taken place in the fisheries and rural-to-urban migration has continued. The majority of coastal communities can be classified as vulnerable, regarding the status of the local fishing industry in 2014. Regarding demographic development, the number of vulnerable communities was significantly higher in 2014 than it was at the early 1990s.

Individual transferable effort quotas for Italian fisheries? A preliminary analysis

In the context of transferable fishing concessions, the most well-known tool is probably the individual transferable quota, whereas the case of individual transferable effort quotas (ITEs) is much less often discussed. This study is the result of a project realized in collaboration with Italian fishery associations with the objective of evaluating, in a participatory framework, the possible consequences of the introduction of ITEs. A semi-quantitative survey was carried out over a sample of key stakeholders being experts of bottom trawling fisheries in the Tyrrhenian and Adriatic Seas and the pelagic trawling fishery in the Adriatic Sea. The results and elaborations of the surveys were discussed and validated by a focus group composed of delegates of fishery associations. Two aspects were investigated: the relationships between fishing capacity (i.e. engine power and gross tonnage), fishing activity (i.e. fishing days and fishing hours), revenues, and variable costs (e.g. fuel) and the suitability of different proposals and alternative approaches for the introduction of ITEs. The participation of stakeholders allowed the building of some simple pedagogical tools based on realistic figures collected through the surveys that could be used by managers of associations, cooperatives, and producer organizations to better understand the functioning and possible consequences of ITEs schemes.

The wrong fish: maneuvering the boundaries of market-based resource management

ABSTRACTHow can economic actors stay afloat in a highly volatile market environment? By drawing on ethnographic material from the Icelandic fishing industry, this article demonstrates how fishers maneuver the boundaries of market-based resource management that tend to ignore the ever-changing environment of the sea. The empirical material shows how fishers skillfully manipulate their socio-technical environment in order to adjust the market for so-called Individual Transferable Quotas (ITQs) with the movement of fish stocks. Accordingly, three coping practices are deployed: (i) tinkering with accounts, (ii) socio-technical conversion, and (iii) redefining boundaries. While these practices allow fishers to stay afloat, they are likewise undermined by the ever-changing environment of the sea, consequently fueling a money-induced cycle of socio-technical problem-solving and breakdowns.

Fishing fleet capacity and profitability

The individual transferable quotas (ITQ) system is a popular fisheries management system applied in many countries. Here, vessels are scrapped or sold out of the fishery, and their quotas are transferred to the remaining vessels, resulting in lower number of active vessels. This consequently reduces the overcapacity of fishing fleets and likely improves financial performance. Unlike previous studies, this paper quantifies the impact of capacity adjustment on vessel profitability through an econometric model. Supply and demand shifters are included in the model to isolate the influence of capacity adjustment. The case studies are the total Norwegian fishing fleet and an important vessel group – the ocean-going cod trawlers. Empirical findings generally indicate a positive impact of capacity adjustment on vessel financial performance. The observed recent decline in financial profitability of the fishing fleet may therefore be attributed to other factors rather than overcapacity.

Hybridity, possibility: Degrees of marketization in tradeable permit systems

Tradeable permit systems for allocating rights to impact the environment have become an important part of the regulatory toolkit over the last 35 years. Informed by elegant neoclassical economic thought, these regulatory markets promise lowest-cost environmental benefit by delegating decision-making to market participants. This article examines tradeable permits systems, including cap-and-trade carbon markets, tradeable water quality permits, and individual transferable quotas for fisheries, to understand the actual outcomes of attempts to transfer environmental governance to markets. Drawing on heterodox economic thought and the neoliberal natures literature, this article examines the institutional forms tradeable permit systems engender in conjunction with a neoclassical definition of ‘market’ to provide an internal critique of environmental marketization. In general, tradeable permit systems do not facilitate highly liquid financial markets that might signal the increasing importance of regulatory markets as an accumulation strategy for capital. Instead, market-based regulation tends to behave rather differently, acting as performance standards, quotas, or environmental taxes. The article concludes by reflecting on the political possibilities afforded by the recognition that regulatory markets, for the most part, bear little resemblance to high-flying financial markets.

Scrapping programmes and ITQs: Labour market outcomes and spill-over effects on non-targeted fisheries in Sweden

Scrapping programmes and individual transferable quotas (ITQs) are two management measures frequently used to reduce overcapacity in fisheries. These measures are often aimed at specific vessel segments targeting specific fish stocks. In this case, fishermen who scrap their vessels or sell their quotas may shift their fishing activities, possibly contributing to overcapacity in other fleets. The aim of this paper is to provide some insights on this issue based on a Swedish scrapping programme for trawlers targeting cod and Norwegian lobster and the introduction of an ITQ system for pelagic vessels introduced in 2008 and 2009. Individual-level data on fishing activities and income from other industries are used to examine how effort and catches have changed after 2009, and to what extent fishermen have left the fishing industry. The lesson learnt from the Swedish case is that fishermen tend to stay in the fishing sector, and this holds true for both participants in the scrapping programme and fishermen who sold their quota in the ITQ system. Therefore measures to reduce overcapacity in targeted fleets have increased fishing pressure and competition for quotas in the Swedish small-scale fleet.