The U.S. fishing industry is sinking as the catch dwindles and a way of life vanishes. But a market-based fix could fill nets again.
This story hits all the highlights: tragedy of the commons, the halibut derby, ITQs, quotes from economists and crazy fishermen.
Tragedy of the commons:
But as nets come up emptier and emptier, the irony for freedom-loving fishermen is that the regulatory system most have so far chosen to stick with tries to limit their every move, dictating where and when they can fish and the size of boats, nets, and gear. The rules of commercial fishing, which vary by locale and species, are set by eight regional councils made up of industry, state, and federal regulators, scientists, and environmentalists. The rules are cumbersome and convoluted, and many fishermen exploit loopholes. "Communism isn't dead," says University of Rhode Island professor Jon Sutinen. "Central planning is still thriving in our fisheries management."
It's a classic case of the tragedy of the commons, the economic textbook description of why farmers overgraze on public lands. Each farmer seeks to maximize the benefit of letting his cattle graze. So with no individual incentives to conserve, in the end, the grass on the commons is destroyed for all.Individual fishermen have an incentive to fish as quickly as possible because under the rules in place in most coastal areas, an entire fishery is closed when the total catch quota is reached. "Everyone is trying to maximize their catch," says Harvard professor Robert Stavins, a pioneer in the design of economic solutions to similar problems in air- pollution control. "There's no private-property right."
That results in lower-quality product and the ecologically harmful practice of discarding "bycatch," fish other than those being sought that are accidentally hauled in. A great many of those fish are either thrown back dead or don't survive. And in the fishing frenzy, boats collectively often exceed the quotas. In New England, long the poster child for limp enforcement, cod limits were set above scientific recommendations for years, and fisherman still blew past them. The haul in 2001, for example, was over 40 million pounds, almost three times the quota.
The halibut derby and ITQs:
In the bad old days, Kodiak controlled halibut fishing in much the same way as fishing for most species is regulated in coastal areas of the Lower 48. Halibut fishermen could go out only a day or two a year. Before derby day, Miller recalls, harbors were filled with the sounds of saws as boats were rigged for halibut. Thousands of vessels were on the water at once, all racing to catch as many fish as possible before the quota limit was hit. In 1988, with his hold and decks overflowing, Miller tossed out mattresses and filled the bunks with fish. Practically limping back to port, he tied up with his back deck partially submerged.
Once time ran out, dozens of boats would line up at seafood processors' piers, halibut bursting from their holds and piled on deck. The processors couldn't handle the volume, so fish lay inside the plants in icy stacks 20 feet high. It took two weeks to process the backlog. Poorly handled and less than fresh, the halibut brought only about $1 a pound.
The unsafe conditions and waste pressured Alaska's North Pacific Fishery Management Council to search for a solution. In 1995 it introduced ITQs. The new system, adapted from the work of free-market economists, was controversial. Quota shares, handed out on the basis of previous years' catches, could be bought and sold. Those who hadn't fished during the qualifying years, and even members of halibut boat crews, got none.
Hard feelings still linger, but since then, the numbers have been startling. According to the most recent stats, Alaska fishermen caught 77 million pounds of halibut worth $169 million in 2004 vs. 58 million pounds worth $85 million just 10 years earlier. This year's catch could exceed $200 million.
When Alaska's program began in 1995, Miller got some of his share based on his historical catch. He then bought more ITQs for about $9 a pound. It has been a brilliant investment. Shares now go for up to $22 a pound. And the price of the high-quality fish he brings in has tripled as well.
And check out the interview with Mr. Cod:
BW: Should regulations, such as using individual quotas, be overhauled to make fishing more profitable?
Mr. Cod: Why don't they just ban dragging or seriously restrict the size of engines and vessels? That would be more effective than all this days-at-sea and quotas stuff. I think we should go back to skiffs.
I agree. I agree so much that I put this post together on an IBM Typewriter and am going into town on my mule to mail the paper to Typepad via pony express. That would be one way to stop the overposting problem.
Seriously, much of fisheries management is designed to raise the cost of fishing so that fewer fish are caught (e.g., bigger mesh size on nets). Fewer fish could be caught at much lower cost with individual quotas. And those quotas would be held by those who valued them the most if they were transferable (with the usual caveats about fishing communities, etc).
