The Province (Vancouver)
August 3, 1997
How do fishermen behave? When holding clear rights, do they exploit fisheries recklessly or manage them sustainably? Can we trust them?
Such questions are at the heart of the debate over the wisdom of establishing property rights in fish.
In claiming that privatized fisheries would be unworkable, critics raise the spectre of fisheries owners – especially large corporations – “aggressively exploiting” their stocks.
Fortunately, most fisheries owners — be they large corporations or sole owners of small boats — do not operate as exploiters. Indeed, experience in fisheries governed by rights holders indicates the opposite. Fisheries owners understand that their economic welfare, as reflected in the market value of their rights, depends on the health of their stocks. Rather than maximizing short-term gains, they tend to harvest conservatively and to invest in long-term stock growth.
The most common form of property rights in commercial fisheries are Individual Transferable Quotas, which have been most fully developed in Iceland and New Zealand. ITQs confer on their holders permanent, divisible, transferable rights to specific quantities of fish or, more frequently, to fixed percentages of a variable annual catch.
Iceland, a country with a history of private ownership of inland fisheries, pioneered experiments with ITQs in ocean fisheries in the late 1970s. It started with the herring fishery, which had collapsed from overfishing in the previous decade. Ragnar Arnason, professor of fisheries economics at the University of Iceland, calls the move to stronger property rights a biological success: Despite steadily increasing harvests, the herring biomass has grown to a level not seen since the 1950s.
Arnason also tentatively credits property rights with reversing the decline in cod stocks. While the stocks have not yet been rebuilt, fishing effort has decreased substantially since the introduction of ITQs. Quotas’ greatly increased market values reflect optimism about the stocks’ future.
A story told by the University of Iceland’s Birgir Runolfsson illustrates the revolution in fishers’ attitudes: In January 1996, in response to indications of healthier cod stocks, Iceland’s Prime Minister suggested increasing the cod catch. The association representing boat owners rejected his proposal; it proposed increasing the catch only in the following year, and only if stocks remained healthy.
In New Zealand, too, stronger property rights have reversed the trends of declining stocks and poor profitability. While catches have increased since the introduction of ITQs in the 1980s, key stocks have remained stable or improved.
As quotas have become more secure, New Zealand’s fishermen have had greater incentives to manage their stocks sustainably. Quota owners have begun to organise themselves into associations that finance stock enhancement and scientific research and set rules ensuring sustainable fishing.
But critics aren’t concerned only about the state of our fish stocks. They also fear that undesirable social and economic changes will accompany the privatization of our fisheries. Chief among the concerns is corporate concentration, with dire warnings that ownership will become the exclusive right of a privileged few big businesses or multinational corporations.
If experience elsewhere is any indication, the critics have little to fear. In Iceland, numerous small firms continue to characterize the fishing industry. The 11 largest fishing companies, which hold less than a third of the cod quotas, have increased their share of quota by approximately five percent in the last five years. And if measured as a percentage of total groundfish catches, these large firms’ shares have actually declined.
Under the ITQ system, skill and efficiency, not money or political power, enables companies to succeed.
Iceland’s fishing fleet remains diverse. In addition to 484 large and medium sized vessels, the fleet boasts 344 part-time owner-operated boats with crews of between one and three people. For a country of only 270,000 people the numbers are striking.
Nor has corporate concentration presented problems in New Zealand. Tom McClurg, representing the Treaty of Waitangi Fisheries Commission, disputes the myth that property rights are hostile to the interests of small fishers, calling the number of smaller boats in the fleet “surprisingly constant.”
Experience with ITQs should also assuage fears regarding unemployment. In 1995, New Zealand’s fishing industry employed 9,838 people — up from 7,900 in 1986. These jobs are far more secure than their predecessors, which depended on subsidies and were threatened whenever governments’ priorities changed. Similarly, in 1995, Iceland fishery employed 6,800 fishers — up from 5,800 in 1983.
Ken Erikson, president of Canada’s Pacific Coast Fishing Vessel Owners Guild, explains that salmon fishermen can’t afford not to move towards stronger rights. A quota system that gives fishers incentives to catch fewer fish more efficiently and to maintain a higher quality product will benefit fish and fishers alike.
“If we fish for dollars,” Erikson explains, “we’re going to survive.”