Catch quotas or “total allowable catches” (TAC) are the predominant strategies to manage fisheries. Catch quotas can be exploited by a common-pool or a rights based approach. Un- der a common-pool approach there is a fishery-wide TAC for which fishers compete until the TAC is fully exploited. This ensues a race to fish, creating an incentive to invest in more powerful vessels and more efficient gear and technology to outcompete others. As such, the common-pool approach is criticised to lead to unsustainable exploitation levels and eco- nomic inefficient fisheries (Grafton, 2000). A right based approach allocates individual rights to a predetermined share of the catch, ensuring an individual owns a secured portion of the allowable catch. This approach should encouraging stewardship over the resources and providing more flexibility in time and space to harvest the resources, because fishers do not have to account for the catches of others (Grafton et al., 2006). Rights based management approaches have been increasingly recognised to be core to achieve biologically and eco- nomically sustainable fisheries (Hilborn et al., 2005, Branch, 2009).
Individual quota are the most commonly used right based approach to manage fish- eries. Individual transferable quota ((Christy, 1973), ITQ) are an extended form allowing fish- ers to sell, lease or buy quota. By allowing the transfer of quota, ITQs are believed to reduce the incentive to discard (i.e. high-grading and over-quota discarding) and increase the eco- nomic efficiency of fishing activities (Little et al., 2009). Discarding can be reduced when fishers who would be forced to discard because they have (almost) fully exploited their share of quota (before the end of the year) can buy quota from fishers who know they will not make full use of their share. In addition, quota transfers between individuals can increase net revenue of both vessels.
Since the introduction of ITQs in the 1970’s many fisheries worldwide are currently managed by ITQs (Costello et al., 2008, Chu, 2009) (figure 6.1). Within the European Union specifically, Member States are being encouraged to establish a system of transferable fish- ing rights (EU Regulation 1380/2013). While most Member States have already implemented some kind of rights based management approach (e.g. community catch quotas; individu- al (transferable) effort or catch quotas; vessel catch limits; and territorial use rights (MRAG
et al., 2009), some Member States are reluctant to adopt an ITQ system for their fisheries.
Member States are opposed to transferability of quotas, because they fear the rights to the property will be concentrated in the hands of a few corporations or individuals. France, for example, has non-transferable quota in order to prevent quota from being considered as
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assets, thereby protecting their traditional fishing communities and maintaining economic and social equilibrium in fishery-dependent coastal zones (MRAG et al., 2009).
In this thesis, I have assumed the fisheries are managed by individual non-transferable quota. This implies the model does not allow quotas to be transferred from one fisher to another during a year. While this assumption holds true for the fisheries in France, the Dutch mixed-fisheries for flatfish was one of the first fisheries to adopt ITQs to manage their fish- eries on plaice and sole (Chu, 2009, van Hoof, 2013). Examining the impact of adopting an ITQ system in fisheries have been studied by either a retrospective analysis (Arnason, 1995; Annala, 1996; Hamon et al., 2009) or by modelling trading behaviour within a simulated ITQ market (Dupont, 2000, Little et al., 2009, Marchal et al., 2011). Little et al. (2009) for example, have included trading of quota into an agent-based model to evaluate fishing strategies un- der right-based management. The model simulates choices individual vessels in a multi-spe- cies fisheries make in terms of fishing location and quota trading in order to maximize their profit. The main elements determining whether a vessel will engage in quota trading are the amount of quota available and the quota price. The quota price is assumed to be equal to the average marginal profit (i.e. the profit of harvesting a unit of fish) across vessels or fleets. Buying additional quota is only in the interest of a vessel when the difference between its expected marginal profit of catching fish and the costs of obtaining additional quota is pos- itive (Guyader and Thébaud, 2001). For a vessel willing to sell quota this difference should be negative. Model results showed that transferability of quota increases profitability of the fleet; even less efficient vessels are able to make substantial profits by leasing their quotas. However, when there are no trading opportunities for species for which quota are already filled, fishing will continue until most quota (often of the most valuable species) are fully exploited. Hence, quota transferability may improve the match between catches and quota, but does not necessarily alleviate discarding.
Due to the lack of quota transferability in our model, the outcomes may not fully cor- respond to actual observations. In particular, within the context of the discard ban future projections are uncertain. Under the discard ban the transition from landing quota to catch quota may become problematic. Especially in mixed fisheries, potential restrictive quota
Figure 6.1
Assessment of the increased use of the ITQ system globally (copyright, Chu, 2009).
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may lead to severe restrictions in fishing activity when these quota are fully exploited at an early stage (i.e. choke species). Quota transfer may partially prevent the early cessation of fishing activities due to choke species. However, quota owners may want to retain their quota to prevent their own company or fleet to be restricted in their fishing activities. In addition, the new discard regulation provides opportunities for flexibility in dealing with quotas through inter-annual quota and inter-species (i.e. counting the catch of one spe- cies to the quota of other species) flexibilities, as well as exemptions from landing discards based on survivability and de minimis (i.e. an exemption when increased selectivity is dif- ficult to achieve or when handling discards on board generates disproportionate costs). To date, it remains uncertain how these flexibilities and exemptions will be implemented and influence future fishing opportunities. Hence, it is difficult to predict how quota trading will develop under the discard ban. Including quota transfer into the model will make it more operational for practical use, however, this would require a more detailed knowledge on the actual implementation of the management regulations.