Fisheries Researdz, 18 ( 1993) 2 19-229 219 01657836/93/$06.00 0 1993 - Elsevier Science Publishers B.V. All rights reserved

e

M.J. Sanders FAO Regional Fisheries Project, P.O. Box 48 1, Victoria, Seychelles

(Accepted 17 May 1993)

Abstract

Bio-economic analyses indicate that the catch from the handline fishery on the Saya de Malha and Nazareth Banks (in the southwest Indian Ocean ) is about equal to the estimate of maximum sustain- able yield, and that the maximisation of fishery profit could be attained from roughly one-quarter of the contemporary fishing effort. The consequence of implementing quota management (IT@) to effect an appropriate increase from the prevailing near zero fishery profit is investigated. Also in- cluded is an assessment of the likely value of future entitlements to engage in the fishery foilowing the introduction of this form of management.

The fishery examined here present auritius (nine vessels in s are the banks on the

cularly the Saya Malh? and Nazareth Banks. Fishing trips are of roughly 6 weeks with the target species (Lethrirrus mahsena) comprising about 9 catch. The vessels are mother Ships3 each equipped with lo-20 dories with three handline fishermen per dory.

The landings by Mauritian vessels from the Saya de Malha and Nazareth Banks during 1988 were respectively 265 1 t and 1429 t. An additional 300 t (approximately) are believed to have been landed from the mother s in Reunion. Almost all of this would have been caught on the Saya d Rank.

The fishing effort during the s ritian vessels is reported as 39 039 man-days for the Saya de lha and 19 730 an-days for the Naz-

ank. Assuming the same the fishermen fro cum0

220 M.3. Sanders /Fisheries Research 18 (1993) 219-229

gives a combined fishing effort for the Saya de Malha of 43 457 man-days and 63 187 man-days from both banks.

At present, the fishery is not subject to any specific management regime. In the case of Mauritius, its expansion has nevertheless been influenced by gov- ernment-imposed price control as applied to frozen fish. This is reflected by the events following the abandonment of price control in 198 1. At that time the number of participating vessels was five, in 1982 it was ten, and at the re- establishment of price control in 1987 it had increased to 15.

The decline in the number of vessels since 1987 is claimed by the fishing companies to be the consequence of low profitability. This is somewhat sup- ported by the repossession of four vessels by the banks in 1988-1989 as the consequence of defaults on loans. Some other vessels were retired voluntarily without replacement.

It was at this stage in the history of the fishery that the Mauritian Govem- ment invited the Food and Agriculture Organisation Regional Fishery Project based in the Seychelles to undertake an evaluation of the fishery performance and need for management. The work was undertaken during September/Oc- tober 1989 and culminated in a seminar attended by representatives of the fishery administration and the fishing companies.

This paper is based largely on the author’s contribution to this seminar. It concerns the use of simple bio-economic modelling to show how the fishery profits might be enhanced under a management system of individual trans- ferable quotas (ITQs). It also deals with how indicative future values for the quota entitlements might be determined, and provides estimates of these val- ues under various profit sharing arrangements between the government and industry.

As reproduced here, the contribution represents an example, based on real fishery data, of the steps necessary to provide a basis for discussion on the fishery’s future management. It sets the biological assessment into a broader context, particularly in terms of the financial well-being of the fishery, and in so doing, seeks to stimulate the essential interplay between fishery biologists and economists. While some of the associated social issues appear not to be addressed within the analyses, they are nevertheless identified, and as such become discussion topics.

Assessment of fishery performance

The method used for forecasting the likely catch weight, catch rate, mean individual weight of the fish in the catch and the biomass for each of a range of sustained annual fishing efforts is based on Thompson and Bell ( 1934 ) . The details are reflected by the spreadsheet depicted in Table 1. The values for the input parameters used are largely from Bertrand et al. ( 1986) and

Tab

le 1

E

stim

ates

of

catc

h, c

atch

rat

e, m

ean

size

and

bio

mas

s fr

om a

giv

en le

vel o

f ann

ual

fish

ing

effo

rt

Age

C

atch

St

anda

rd

Fish

ing

Nat

ural

Po

pula

tion

( 103

) C

atch

N

atur

al

Mea

n M

ean

Cat

ch

Bio

mas

s (y

ears

) co

ef.

effo

rt

mor

t. m

ort.

deat

h le

ngth

w

eigh

t w

hole

w

hole

( x

10-

4)

(man

- co

ef.

coef

. St

art

End

M

ean

‘;%

I)

no.

(cm

) (8

) w

eigh

t w

eigh

t da

ys 1

( 1

03)

0)

(t)

t 4

X

F

M

NI

N2

N

G

D

L’

W

GV

B

0 0.

000

68

0.00

00

0.20

0 22

100

1809

4 20

030

0 40

06

8.5

11.1

0

0 I

0.00

0 68

0.

0000

0.

200

1809

4 14

814

1639

9 0

3280

13

.5

46.8

0

0 2

0.00

0 68

0.

0000

0.

200

1481

4 12

129

1342

7 0

2685

18

.0

115.

1 0

0 3

0.00

0 68

0.

0000

0.

200

1212

9 99

30

1099

3 0

2199

22

.1

217,

9 0

0 4

0.00

0 68

0.

0000

0.

200

9930

81

30

9000

0

1800

25

.8

353.

1 0

0 5

0.02

9 68

0.

1972

0.

200

8130

54

65

6710

13

23

1342

29

.2

516.

6 68

3 34

66

6 0.

145

68

0.98

50

0.20

0 54

65

1669

32

01

3156

64

0 32

.2

703.

1 22

19

2250

7

0.14

5 68

0.

9860

0.

200

1669

51

0 97

8 96

4 19

6 34

.9

907.

3 87

4 88

7 8

0.14

5 68

0.

9860

0.

200

510

156

299

294

60

37.4

11

23.7

33

1 33

6 9

0.14

5 68

0.

9860

0.

200

156

48

91

90

18

39.7

13

47.7

12

1 12

3 10

0.

145

68

0.98

60

0.20

0 48

15

28

27

6

41.7

15

74.8

43

44

11

0.

145

68

0.98

60

0.20

0 15

4

9 8

2 43

.5

1801

.6

15

15

12

0.14

5 68

0.

9860

0.

200

4 1

3 3

I 45

.2

2025

.1

5 5

13

0.14

5 68

0.

9860

0.

200

1 0

1 1

0 46

.7

2242

-9

2 2

14

0.14

5 68

0.

9860

0.

200

0 0

0 0

0 d&

l 24

53.2

1

1 15

0.

145

68

0.98

60

0.20

0 0

0 0

0 0

49.3

26

54.7

0

0 16

0.

145

68

0.98

60

0.20

0 0

0 0

0 0

50.4

28

46.4

0

0

Tot

al

5867

16

233

4295

71

29

Inpu

ts:

Asy

mpt

otic

len

gth

(L,)

, 6

1 .O

cm; g

row

th r

ate

coef

fici

ent

(K),

0.1

0 ye

ar-‘

; ag

e at

zer

o le

ngth

(to

), -i

.OO

year

; age

at f

irst

cap

ture

(t,)

, 5.

80 y

ear;

le

ngth

/wei

ght

coef

fici

ents

(a)

, 0.

0 14

and

(b),

3.1

18; c

atch

abili

ty c

oeff

icie

nt (

q),

0.14

5 X

1 0v

4; n

atur

al m

orta

lity

coef

fici

ent

(M),

0.2

0 ye

ar-‘

; nu

mbe

r of

rec

ruits

(R

), 2

2.1

mill

ion

year

- ‘;

ann

ual

fish

ing

effo

rt (

x),

6800

0 m

an-d

ays.

Equ

atio

ns:

F=

qX,

&=

iV,e

xp[

- (F

+M

) 1;

N’

= (

N,

-N2)

/(F

+M

);

C,=

FN

’;

D=

MN

’;

L’=

L,(

1 -

exp[

-K

(z+

0.5-

t,)])

; w

’ =

uE’~

; C

’,=

C,,W

’; B

=N

’ X

w’.

Not

e: V

alue

for

catc

habi

lity

coef

fici

ent

estim

ated

usi

ng F

=qX

w

ith f

ishi

ng m

orta

lity

coef

fici

ents

of F

z0.4

08

(198

2/ 1

983)

and

Fs0

.306

( 1

983/

198

4)

for

the

Saya

de

Mal

ha B

ank

(fro

m B

ertr

and

et a

l., 1

986 )

. V

alue

for

the

num

ber

of r

ecru

its o

f ze

ro a

ge e

stim

ated

(u

sing

spr

eads

heet

) as

that

num

ber

requ

ired

to

achi

eve

the

obse

rved

cat

ch f

or 1

985

and

1986

fr

om t

he o

bser

ved

fish

ing

effo

rt i

n th

ose

year

s.

222 M.J. Sanders /Fisheries Research 18 (1993) 219-229

Bautil and Samboo ( 1988). The annual recruitment was assumed to be con- stant (hence the estimates of yields, etc. are equilibrium values).

In the estimation of fishery profit for each level of fishing effort, the addi- tional inputs are the ex-quay fish price of 15.9 Rs kg-’ and fishing costs of 1110 Rs per man-day. These were both taken from Sturgess ( 1989) who un- dertook a costs and earnings study of the fishery in the month immediately prior to the seminar. The results, shown in Table 2, support the contention that the fishing effort prevailing in 1988 (63 187 man-days) was associated with close to zero profit. The estimated catch of 4302 t from this level of effort is close to the observed catch (about 4380 t ) .

The estimate obtained for the maximum sustainable yield (MY) is 4311 t. It seems that this could be attained with a fishing effort of 50 000 man-days. This is 79% of the effort in 1988. The estimate obtained for the fishery profit at XMsv is Rs 1.4 million.

Probably the most interesting result concerns the attainment of the maxi- mum fishery profit (MPP 9. It seems that this could be achieved from a fish- ing effort of about one-quarter of that occurring in 1988. The estimate for the

Table 2 Estimates of fishery performance at equilibrium for a range of annual fishing efforts

Fishing Annual Mean catch/ Mean Exploited Catch Fishery Fishery effort catch effort ind. fish biomass value costs profit (man-days) (t ) (kg per man-day) weight ( t ) (Rs ‘000) (Rs ‘000) (Rs ‘000)

(kg) X Clv c&./x w B V c P

0 0 605 1.343 44779 0 0 0 4000 1840 460 1.245 34754 29256 4440 24816 8000 2882 360 1.161 27858 45824 8880 36944

12000 3480 290 1.089 22993 55332 13320 42012 16000 3827 239 1.029 19472 60849 17760 43089 20000 4030 202 0.979 16859 64077 22200 41877 24000 4151 173 0.937 14873 6600 1 26640 39361 28000 4223 151 0.902 13329 67146 31080 36066 32000 4265 133 0.872 12104 67814 35520 32294 36000 4290 119 0.847 11114 68211 39960 2825 1 40000 4303 108 0.825 10299 68418 44400 24018 44000 4309 98 0.806 9619 68513 48840 19673 48000 4311 90 0.790 9044 68545 53280 15265 52000 4311 83 0.776 8551 68545 57720 10825 56000 4308 77 0.763 8124 68497 62160 6337 60000 4304 72 0.751 7750 68434 66600 1834 64000 4300 67 0.741 7421 68370 71040 (2670) 68000 4295 63 0.732 7129 68291 75480 (7190)

Inputs: Fish price (Pr), 15.90 Rs kg-‘; annual cost (c), 1110 Rs per man-day. Equations: V= C,X Pr; c=xc/ 1000; P=V-C.

M.J. Sanders /Fisheries Research 18 (I 993) 219-229 223

MFP is Rs 4 ion (equivalent to nearly US 3 million ) . The esti the catch at is 3827 t, which is 484 t les than the estimated MSY, and 553 t less than the observed catch in 1988.

efis

The approach presented in this and subsequent sections seeks the improve- ment of fishery profit through a substantial, although indirect reduction in fishing effort and costs. Its essential ingredients include having an annual catch quota for the fishery, apportioning this quota between the fishing companies, and allowing the trading (purchase, sale and lease) of quota entitlements. Hence the term individual transferable quotas ( ITQs) .

The advantage of ITQs management is that it tends to encourage the fishery to move voluntarily in the direction of improved financial performance. This arises because once the fishery participants are assured of their portion of the year’s quota, there remains no legitimate purpose to increase fishing effsrt (beyond that required to take the quota), but rather attention will be focused on cost-saving ways to increase profits.

Two scenarios were investigated. In Scenario A, the fishery quota is set at 3800 t from the first year (following the base year). In Scenario is decreased in annual increments of 100 t and then maintain from the fifth year. The catch in the base year was taken as that estimated from the observed fishing effort of 1988.

As before, the method for assessing the likely improvement in fi formance from ap lying these scenarios is base and Bell (1934). ts application involved co linked spreadsheets, the first reflecting the base year and the re the subsequent 10 consecutive years.

The calculations undertaken within the spreads e years other than the base year are identical. They are the same as for the base year, except that the values for the population numbers at t to the values for the population numbers at the cohort) from the previous spreadsheet.

The construction of the spreadsheet depicting the base year and the values used for the input parameters, are the same as those given in Table 1 (except for the fishing effort in the base year, which was 63 187 man-d as ob- served in 1988). The procedure with respect to each of the sprea ets for the later years was to determine (by trial and error) the fishing effort required to attain the predetermined catch quota.

In estimating the fishery profit in each year, the conversion of catch weight to catch value involved using the ex-quay price of 15.9 RS kg-‘, and the con-

version of fishing effort to fishery costs from applying 1110 The results shown in Table 3 show the accumulation of fis

224 M.J. Sanders /Fisheries Research 18 (1993) 2X9-229

Table 3 Estimates of fishery performance with alternative management scenarios

Year Fishing Annual Mean catch/ Mean Exploited Catch Fishery Fishery effort catch effort ind. fish biomass value costs profit (man-days) (t) (kg per weight (t) (Rs’OOO) (Rs’OOO) (Rs’OOO)

man-day) (kg) X GJ G//X W B V C P

Scenario A 1989(O) 63000 1990( 1) 52680 1991(2) 47810 1992( 3) 43690 1993(4) 40180 1994(5) 37180 1995(6) 34600 1996(7) 32370 1997(8) 30430 1998(g) 28730 1999( 10) 27240

Scenario B 1989(O) 63000 1990( 1) 60820 1991(2) 57500 1992( 3) 53300 1993(4) 48560 1994( 5) 43630 1995(6) 40140 1996(7) 37150 1997(8) 34570 1998(g) 32340 1999( 10) 30400

4301 68 0.744 7500 68386 69930 (1544) 3800 72 0.746 7806 60420 58475 1945 3800 79 0.757 8331 60420 53069 7351 3800 87 0.771 8865 60420 48496 11924 3800 95 0.786 9402 60420 44600 15820 3800 102 0.800 9940 60420 41270 19150 3800 110 0.815 10477 60420 38406 22014 3800 117 0.829 11006: 60420 35931 24489 3800 125 0.843 11532 60420 33777 26643 3800 132 0.856 12047 60420 31890 28530 3800 140 0.869 12551 60420 30236 30184

4301 68 0.744 7500 68386 69930 (1544) 4200 69 0.744 7562 66780 67510 (730) 4100 71 0.747 7730 65190 63825 1365 4000 75 0.753 8005 63600 59163 4437 3900 80 0.761 8386 62010 53902 8108 3800 87 0.773 8873 60420 48429 11991 3800 95 0.786 9409 60420 44555 15865 3800 102 0.801 9946 60420 41237 19184 3800 110 0.815 10482 60420 38373 22047 3800 118 0.829 11014 60420 35897 24523 3800 125 0.843 11539 60420 33744 26676

Inputs: Fish price (fr), 15.90 Rs kg-l; annual cost (c), 1110.00 Rs per man-day. Equations: v= c, x Pr, c= XJ 1000; P= v- c.

base year and the increase in the mean weight of fish in the catches, both reflected by progressively increasing catch rates and biomass. With respect to neither scenario does the attainment of a new equilibrium occur within the 10 year period considered. The principal constraint to a more rapid regener- ation of fish stock is its longevity (of roughly 15 years) and slow growth rate.

The extent of improvement in economic performance in the 10 years from both scenarios is substantial. In the case of Scenario A, for example, the esti- mate of fishery profit in the tenth year is Rs 30.2 million. This is some 70% of the estimated MFP.

Scenario A appears to be a better alternative than Scenario B. This is par- ticularly apparent when comparing the fishery profits determined with re-

M. .I. Sanders /Fisheries Research 18 (1993) 219-229 225

spect to the earlier years. In the t ird, fourth and fifth year, for e difference is greater than Rs 7 llion. The estimated mean fish in the catches are also greater with Scenario A. This woul if the companies were paid higher prices for larger fish (whi

ue of future quo

The issue investigated in this section is the extent to which newly generated fishery profit might become capitalised in the value of the quota entitlements (to be held by the fishing companies). Also, as the fish stock may be consid- ered as the property of the community generally (of some recognition of the possible sharing of the fishery profits between the community and the companies is included.

This concept of 6ovemment charging a resource rent is well established in forestry and mining, although not yet so common in fisherie stems from the notion that the private use of publicly owned resources sh be the sub- ject of a charge (especially where the participants enjoy exclusive rights), just as would be the case if the resources were privately owned.

In the analyses the value of a quota entitlement is considered to be reflected by the magnitude of the future flow of fishery profits. This definition captures the financial but not necessarily the social component of value, and presumes that both the buyers and sellers of ITQs have perfect knowledge about future profits and trade rationally. s for this reason that economists generally pre- fer to equate ITQ values w the prices actually paid. The latter, however, also suffers from the possibility of traders being misinformed and/or irra- tional. Furthermore, in order to assign values, trading must already have commenced (which was not the case for the banks handline fishery). The value of a quota entitlement was taken as the ne present value of this antki- pated flow of profits. The relationship used for t e calculations is

P=N[l-(1-Fr)-“l/v

where P is the net present value, Nis the annual increment of profit flow, Y is the interest rate (as a fraction) and n is the term.

The equation is taken from Ayers ( 1963, Chapter 9 ). An underlying as- sumption is that the flow of profits is comprised of equal annual increments. This is consistent with the fishing companies having imperfect knowledge of future profits, and hence being likely to value entitlements on the basis of a continuation of the prrzvailing level of profit.

The analyses were undertaken with respect to each of the management scenarios. The increments of future profit flow were taken as equal to the estimates of fishery profit shown in Table 3. The interest rate used in the calculations wzu 15%, and reflects a mid-way value between the borrowing

Tab

le 4

E

stim

ates

of

fish

ery

prof

it to

the

com

pani

es a

nd q

uota

ent

itlem

ent

valu

e

Yea

r y=

O

y=o.

2 yz

o.4

y=O

.6

~~0.

8

Fish

ery

Quo

ta

Fish

ery

Quo

ta

Fish

ery

Quo

ta

Fish

ery

Quo

ta

Fish

ery

Quo

ta

prof

it to

en

title

men

t pr

ofit

to

entit

lem

ent

prof

it to

en

title

men

t pr

ofit

to

entit

lem

ent

prof

it to

en

title

men

t co

mpa

nies

va

lue

com

apni

es

valu

e co

mpa

nies

va

lue

com

pani

es

valu

e co

mpa

nies

va

lue

Scen

ario

A

1989

(O)

(0.4

) (2

.3)

(0.3

) (1

.9)

(0.2

) (1

.4)

(0.1

) (0

.9)

(0.1

) (0

.5)

1990

(l)

0.5

3.3

0.4

2.6

0.3

2.0

0.2

1.3

0.1

0.7

1991

(2)

1.9

12.5

1.

5 10

.0

1.2

7.5

0.8

5.0

0.4

2.5

20.3

2.

5 16

.2

1.9

12.2

1.

3 8.

1 0.

6 4.

1 26

.9

3.3

21.5

2.

5 16

.1

1.7

10.8

0.

8 5.

4 32

.6

4.0

26.1

3.

0 19

.5

2.0

13.0

1.

0 6.

5 37

.4

4.6

30.0

3.

5 22

.5

2.3

15.0

1.

2 7.

5 41

.7

5.2

33.3

3.

9 25

.0

2.6

16.7

1.

3 8.

3 45

.3

5.6

36.3

4.

2 27

.2

2.8

18.1

1.

4 9.

1 48

.5

6.0

38.8

4.

5 29

.1

3.0

19.4

1.

5 9.

7 51

.3

6.4

41.1

4.

8 30

.8

3.2

20.5

1.

6 10

.3

1992

( 3)

3.1

1993

(4)

4.2

1994

( 5)

5.0

1995

(6)

5.8

1996

(7)

6.4

1997

(8)

7.0

1998

(9)

7.5

1999

( 10)

7.

9

Scen

ario

B

19&

3(O

) (0

.4)

1990

( 1)

(0.2

) 19

91(2

) 0.

3 19

92(3

) 1.

1 19

93(4

) 2.

1 19

94(5

) 3.

2 19

95(6

) 4.

2 19

96(7

) 5.

0 19

97(8

) 5.

8 19

98(9

) 6.

5 19

99( 1

0)

7.0

(2.3

) (0

.3)

(1.1

) (0

.1)

2.2

0.3

7.2

0.9

13.4

1.

7 20

.4

2.5

27.0

3.

3 32

.6

4.0

37.5

4.

6 41

.7

5.2

45.4

5.

6

(1.9

(0

.9

1.7

5.7

10.8

16

.3

21.6

26

.1

30.0

33

.4

36.3

(0.2

) (1

.4)

(0.1

1

(0.9

) (0

.1)

(0.5

) (0

.1)

(0.7

) (0

.1 )

(0.4

) (0

.0)

(0.2

) 0.

2 1.

3 0.

1 0.

9 0.

1 0.

4 0.

7 4.

3 0.

4 2.

9 8.

2 1.

4 1.

2 8.

1 0.

8 5.

4 0.

4 2.

7 1.

9 12

.2

1.3

8.2

0.6

4.1

2.5

16.2

1.

7 10

.8

0.8

5.4

3.0

19.6

2.

0 13

.1

1.0

6.5

3.5

22.5

2.

3 15

.0

1.2

7.5

3.9

25.0

2.

6 16

.7

1.3

8.3

4.2

27.2

2.

8 18

.2

1.4

9.1

Inpu

ts:

Ter

m,

( n ).

, 2. i .

CU

ye,>

.1

_,

‘:

c m

iere

sl r

a.te

(r),

15

.001

. E

quat

ions

: P

c=P

( l-

y)/&

; Q

=Pc(

I-

(1 +

r)-l

)/r)

. N

ote:

y is

the

prop

Aon

of

fis

hery

pro

fii

d&te

d fo

r co

mm

unity

us

e; P

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M.J. Sanders/Fisheries Research 18 (1993) 219-229 227

and lending rates applying in a commercial bank in 25 years for the term was based on the assumption that the validity of an entitlement will not be limited in time. A sensitivity analysis showed that the net present value of an entitlement is largely insensitive to terms greater than 25 years.

The results shown in Table 4 indicate, for example, that with respect to Scenario A, the net present value of a quota entitlement of 1000 t would be Rs 32.6 million in the fifth year and reach Rs 5 1.3 million in the tenth year. The estimated profits to the entitlement holder for those 2 years are Rs 5.0 million and Rs 7.9 million, in the event that there is no resource rent charge by Government.

In the event of 40% of the fishery profit being diverted for community use, the estimates for the value of the 1000 t entitlement in the fifth and tenth years are respectively Rs 19.5 million and s 30.8 million. The associated estimates of profit to the entitlement holder are respectively Rs 3.0 million and Rs 4.8 million.

iscussion

The assessments relate to determining both the contemporary fishery per- formance and the performance that might be expected following the imple- mentation of ITQs management. It is intended that the results be considered as indicative only, and serve essentially as a basis for generally depicting the consequences of this approach to management.

There are several reasons in sup art of the fishery profits aud hence the values of the quota entitlements a /or resource rents increasing more rap- idly than indicated, following any introduction of IT@ management. This could occur, for example, if t e buyers of quota entitlement per unit of fishing effort tha e sellers. In the analyses desc costs per unit effort were kept constant over all years.

Also, it was assumed that the stock in e base year was at e may nbt have been the case. If in fact re was some accumu believed to be the case in 1988, the catch rates, mean individu and hence fishery profits would be slightly higher than estimated. (The ac- cumulated stock is here defined as that in excess of the stock at equilibrium in the event of the contemporary fishing effort being maintained. )

In the analyses, the fish price was assumed to remain constant over all years. While it would be important for the control of fish price to be maintained until the quota management was in place, it seems likely that price control will ultimately be ab s the consequence of the economic liberation policies being adopte auritian Government. In such a case, the price could be expected to increase and the fishery profits (and hence the values of the quota entitlements and/or resource rents) to be higher than estimated.

228 M.J. Sanders /Fisheries Research 18 (1993) 219-229

Abandonment prior to the introduction of management would temporarily increase profits, which in turn would almost certainly lead to further in- creases in fishing effort and hence costs (and stock over-exploitation), to the extent of dissipating all the new-found profit, leaving the fishery worse off than previously.

With reference to the communities’ ownership of the fish stocks, the author is unaware of any objective criteria for deciding what portion of the fishery profit should be diverted for community use. In practice, this would pvqbably be best achieved in a process of negotiation between the industry participants and Government, and in recognition of both the financial and non-financial (e.g. social and political) implications.

It is relevant to note here that the matter of how much fishery profit to divert for community use would need early consideration. This is because it would be extremely difficult for the Government (on behalf of the commu- nity) to divert fishery profit which had already been capitalised within the value of entitlements, once the buying and selling of quotas had commenced. In an extreme example, a recent buyer of quota could be bankrupted follow- ing the imposition of any substantial resource rent.

A variant of the above concerns the potential ‘wind-fall’ benefit to the first generation of entitlement holders. Such would arise if the first issue of entitle- ments was made free of charge, and were immediately able to be sold at a high price. Having in mind the present poor performance of this fishery, such a situation seems unlikely. If it was seen as a problem, an approach would be for the Government to exact a once-only charge when issuing the first entitlements.

Concluding comments

Government-imposed price control on frozen fish has impacted on both the number of participating vessels, and the extent of stock over-exploitation. As indicated earlier, the consequence of abandoning price control during the period between 198 1 and 1987 was that the prices became higher, and the number of participating vessels and hence fishing effort increased.

The question to be addressed below is, would it not be better to maintain the status quo (i.e. price control) as an alternative to ITQs management, with the community able to benefit from purchasing cheaper fish, and possibly more fishermen able to be employed than otherwise. There are difficulties with this approach, however, only some of which are discussed here.

An important aspect concerns the matter of who should be the beneficiaries from the fishery, and the extent of benefit they should receive. It is difficult to know what the consumers would pay for fish in the absence of price con- trol, and hence the extent of benefit that they presently receive. With respect to the benefit being received by the fishermen, it seems that Rs 43 million

M.J. Sanders /Fisheries Research 18 (1993) 219-229 229

annually in potential fishery profit is presently being foregone i some 337 fishermen employed. The firs

order to keep e values is the estimate of

MFP and the second is an estimate of the of fishermen that would be displaced if the fishery were managed to achieve MFP. This is equivalent to Rs 128 000 (i.e. US$ 8500) per fisherman, and could only be justified (in the strictly economic sense) if there was substantial under-employment within the Mauritian economy generally, and the fishermen had little or no other employment opportunities. There has been no study of employment within this context; however, vessel owners are reporting difficulties in obtaining adequate numbers of crew, from which it has been presumed that the fisher- men are able to find other employment.

Another aspect of price control management concerns the choice of price. Ideally, this should be such that the fishery performs according to the prede- termined objectives. If maintenance of the present number of fishermen is the objective, for example, then there is no short-term need to change the price. In the event of the attainment of M§Y being the objective, the price would need to be lowered, so as to encourage a reduction in fishing effort (and hence vessel numbers) towards X MSy (i.e. 50 000 man-days). The price would need to be lowered eve further to cause an effort reduction to the extent of achieving

It follows that viewpoint of the vessel owners at least, the appli- cation of price control to achieve improved fishery performance (towards MSY or MFP) would be a m s than from the implements tion of ITQs management. In revenues from the sale of the quota entitlements compensate those owners who choose to withdraw their vessels from the fishery. There is no such compensation in the case of vessels retrenched from the effects of reduced fish prices.

Ayers, Jr., F., 1963. Mathematics of Finance. Schaums Qutline Series. MacGraw Hill, New York.

Bertrand, J. et al., 1986. Rapport du groupe de travail pour une evaluation des ressources en capitaine dame berri des banes de Saya de Malha. Publ. IFREMER, 40 pp. (Mimeo. )

Bautil, B.R.R. and Samboo, R., 1988. Preliminary stock assessment for the mabsena emperor (Lethrinus mahsena) on the Nazareth Bank of Mauritius. In: Proc. Workshop on the Assess- ment of the Fisheries Resources in the Southwest Indian Ocean. RAF/79/065/WP/41/88/ E, FAO/UNDP, 277 pp.

Sturgess, N.H., 1989. Some economic aspects of the Mauritius banks fishery. In Proc. Seminar on the Management of the Banks Hamdline Fishery. RAF/87/008/WP/52/89/E, FAG/ UNDP, 99 pp.

Thompson, W.F. and Bell, F.H., 1934. Biological statistics of the Pacific halibut fishery. 2. Ef- fect of changes in intensity upon total yield and yield per unit of gear. Rep. 8, fnt. Fish. (Pacific Halibut) Comm., 49 pp.