Fisheries, Quota Management and Quota Transfer

Individual transferable quotas (ITQs) were heralded in the 1980s as a market-based solution to the problem of overfishing and were adopted around the world. These neoliberal market mechanisms combined with the fisheries science of stock assessments in diverse contexts to produce a new baseline in fisheries management, albeit one set out in a diverse array of related but not identical bio-economic projects. Appropriately, quota management, quota transfer and bio-economic rationalizations have received attention from social scientists, with some finding that ITQs have produced desirable and effective results while others note the (un)intended, negative social consequences of this private rights regime. Stock assessment has been critiqued for not paying enough attention to ecosystems and for providing insufficient insight into how many fish there are. Further, ITQs are associated with a growing focus on de-centered, self-organizing responses to what are perceived as crises in natural systems. The movement away from centralized state control, towards diffuse, client-centered managerial interventions and assessments has consequences for how fishing communities and property rights are understood, how fisheries investment functions, how enforcement and conservation are carried out, how fisheries are assessed, and what the characteristics of ecosystems are thought to be. Thus economic and policy attention is being shifted to aspects of fisheries besides allocation of access privileges as property among fishing companies, and particularly to new concerns emerging from the achievements, limitations and failures of ITQ regimes. How have fishing places and fishing people been reconfigured by the unique hybrid of science, capital and managerialism that has been ushered in alongside ITQs? This chapter sets out the scope of the field of inquiry.

In the mid-twentieth century, several economists –led by the Canadians Gordon Scott and Scott Anthony–introduced bio-economic analysis which founded the modern understanding of issues in managing common property resources. They focused on managing marine fisheries to improve their national economic profitability, but many economists, including Gordon Scott, advocated for intensifying industrialized technologies that soon exacerbated the need for catch limits, limited entry, ITQs and other conservation measures. Fisheries biologists have largely bought into these approaches and have been unable to critique the bio-economic understanding in part because economists successfully alienated them from an understanding of their own past by appropriating fisheries biologists’ expertise over the economic dimensions of their scientific project. This chapter builds on my earlier findings that both Victorian-era economic ideas and nineteenth century German scientific forestry management ideals have powerfully influenced marine resource management to this day. The focus on ‘rational’ exploitation of fish and other marine species for maximum sustainable yield has been the result. The use of population models allowed the marine environment to become an abstraction, facilitated a limited understanding of fisheries science by economists, and mediated the focus on economic efficiency. Twentieth century fisheries management became further enmeshed in economic and social idealist constructions with the incursion of Keynesian economists such as Gordon Scott, and Canadian Deputy Minister of Fisheries Stewart Bates. By placing their contributions within the context of changing economic theory and mid-twentieth century Cold War issues affecting governments, scientists, and productivity in the North Atlantic region, and by analyzing the basic assumptions of Gordon Scott and his followers in the light of greater historical context, the fundamental irrationality and personal bias that form the basis of bio-economic models is exposed, as is the irrationality of mid-century fisheries management policy.

The introduction of fisheries management schemes always included unintended side effects and the development of strategies to avoid or circumnavigate regulatory systems. Using the case of the German market for fish products during the twentieth century this chapter demonstrates how the fish processing industry and the distant water fishing industry avoided the effects from the introduction of fisheries management schemes. Together, they simply targeted a new species every time a management scheme restricted access to a species. The consumer plays a key role in the success of any such scheme. Poor consumer knowledge about marine species combined with sophisticated advertising and marketing enabled German fish processing companies and distant water fisheries to avoid or minimize the effects of fisheries management on their respective businesses. Overall the chapter demonstrates that any analytical approach of fisheries management schemes will remain incomplete if the role of the final consumer is not considered.

New Zealand’s quota management system (QMS) and ITQ system is now 30 years old and has its own highly developed literature. During the 1980s and 1990s this literature generally interpreted the ITQ experiment in positive terms: issues of allocation, equity and industrial performance were effectively addressed through the QMS/ITQ regime; the fisheries were well managed; and the policies resulted in economic growth. But since 2000 the literature has moved on from these issues of the past. Increasingly the regime is seen as being challenged by other developments, and no longer delivering expected economic results. QMS and ITQ are now regarded as useful and effective instruments of past policies but insufficient on their own for future fisheries management: they need to be buttressed by other fisheries management policies if environmental and economic expectations are to be met; and they need effective policing since the track record of enterprise behavior reveals that the firms are not committed to sustainable development of the fisheries but to obtaining rentier profits from their quota. New Zealand is understood as a special context with special challenges for fisheries management.

In this chapter, the author studies and analyzes the Icelandic ITQ system as a work in process and progress. In Iceland, ITQ policies for commercial fisheries have, from the very beginning, been mixed up in an unstable play of demersal harvest rights allocations and reallocations by the State. The numerous reallocation policies that have successively reshaped rights distributions since 1991 are a very stimulating object for anyone interested in the study of marine resource management in theory and practice. The ethnographic study of such an unstable resource management system is very challenging: a methodology had to be elaborated which would suit the study of an object which involved a number of different parameters and kept evolving very quickly. Far from having being adapted from theory, Iceland’s ITQ system must be understood as a 100% homemade system constantly adapted to social demand. The aim of this chapter will be not to establish whether ITQs in Iceland have been a success or not but rather to point out how public authorities and stakeholders interacted and coped with the ITQ system to reshape and re-define it in various contexts.

Since 1990, the Norwegian fisheries management system has gradually moved towards a market mode where quotas are bought and sold. The end goal of the system was unclear at the outset and developed incrementally in a way that the fish as opposed to the fisher was of key focus and concern, thus transforming previously open access groundfish fisheries into a closed rights-based system. Norwegian authorities were, however, not willing or able to move fully to a privatized ITQ system. The opposition to such a system was too strong and support for it reluctant at best. Instead, fisheries authorities played a balancing act between resource conservation, economic efficiency and regional distribution. This explains the outcome: an extremely complex system with numerous checks and balances in order to keep the market mechanism under control. How successful has this system been in riding these three horses? How much failure can this system handle before major reforms are necessary?

In recent years, Sweden has managed its fisheries in line with the analysis made by the European Commission: overcapacity is persistent and only a few fleet segments have a level of income that can provide acceptable wages and scope for investment. An ITQ system was put in place in pelagic fisheries in the autumn of 2009. The chapter analyses the effects of the introduction of ITQ in Sweden. The introduction of the ITQs in the pelagic fishery led to a rationalization of the fleet, which, at first glance, has meant a more profitable pelagic fishery, with less black money (Wramner, Professor emeritus environmental science and former director of the Swedish Agency for Marine and Water Management. Interview, 2013 09 02, 2013) in the fishery. However, not all of the catch fisheries have been placed under ITQ, and this has produced unintended effects. First mover advantages and forms of concentration and expansion have been stimulated in a skewed fashion. The system is inflexible when it comes to making markets for by-catch, and hinders the recruitment of young fishers into the industry. It has also led to displacement of Swedish pelagic fishers into coastal demersal fishing or overseas fisheries, and to the sale of boats to owners who are now active in cod fishing or in the shrimp fishery. As a result, there is now overcapacity, poor profitability, and catch dumping in the Swedish shrimp fisheries and perhaps in Sweden’s Baltic Sea cod fishery.

Sustainability is one of the main focuses of the European Common Fisheries Policy (CFP). Drawing on the definition of Brundtland (Our common future: world commission on environment and development, Oxford University Press, Oxford, 1987) the evaluation of a fishery management regime calls for the investigation of its impact on sustainability of the fishery. An important aspect of that is inter- and intra-generational fairness in the distribution of access rights. Individual Transferable Quota (ITQ) schemes are widely discussed management systems that allow for economic rationalization and are expected to entail increased economic efficiency in the fishery. In order to analyze the impacts of ITQs on sustainability, we focus on three major concerns of inter- and intra-generational fairness connected to ITQs, using the examples of the German and Danish quota systems: the initial allocation of quota shares, changes in the fleet structure, and the implications for newcomers in the fishing industry. In this chapter, we investigate the just use of quota management exemplified by ITQ systems in Germany and Denmark. The methodology of investigating intra- and intergenerational fairness is first explained before this approach is applied to the German and Danish fisheries quota management systems. The last section discusses the results and examines whether ITQs can be classified as a sustainable and thus inter- and intra-generationally just management tool.

Open access to fishing has always been politically useful to policy makers as a strategy of imperialism. The Faustian bargain between the US government and its fishermen has been that in return for free access, fishermen would put up with government-imposed inefficiencies to blunt the impact of excessive fishing pressure on fish stocks. These inefficiencies increase the cost of fishing. Too many boats make it impossible for fishermen to operate economically, or for management to move beyond allocation battles. In the bio-economic models developed during the 1960s, fisheries did not pay economic rent, nor did they cover their administrative costs. Fishers freely entered the fisheries, accepting the risks of competition and the challenge of controlling operating costs; efforts to cap entry into most American fisheries were delayed until the early 1990s. This legacy has created a system with artificially high administrative costs that will not be recovered under individual transferable quota (ITQ) schemes. Lack of fish has led to successive rounds of subsidies, which offer short-term fixes but do not address the overcapacity problems or the tension among the competing goals within fisheries management. These issues will be examined in the context of the West Coast halibut fishery, which has moved to an ITQ system at the same time as the stocks are declining. This chapter argues that the imposition of ITQs will be ineffectual in overcoming the legacy of decades of free enterprise, over-capitalization, and the historical reluctance of American government to make fisheries pay the costs of their administration.

In the wake of neoliberal reworking of Alaskan fisheries beginning in the 1970s, Tlingit and Haida village residents in southeast Alaska rapidly lost rights to commercial salmon and halibut fisheries, primarily through the sale of the property rights awarded to them when the programs were initiated. At the same time, the lack of capital, financial qualifications (collateral, credit history), and basic knowledge about the operation of bureaucratic systems of finance and property rights, prevented young village residents from purchasing the state-created permits needed for commercial fishing. While commercial fishing as an economic foundation of village life has virtually disappeared, nevertheless village residents maintain strong ties to the customary and traditional salmon systems which have sustained their communities – culturally and nutritionally – for thousands of years. Villagers acquire salmon using small-scale technologies consisting of open skiffs and nets pulled by hand, operated typically by crews of two or three men. While conducting their subsistence fisheries, they have identified numerous cases of unharvested surplus salmon at stream mouths which the permitted commercial purse seine fishery directed by the biological managers have failed to capture. They have perceived and advanced the possibility of developing local, community based small-scale fisheries to make use of the foregone harvests. The neoliberal regime has tightly aligned six sectors – legal practitioners (politicians and lawyers), resource managers (biologists), commercial fishing permit holders (producers), processing firms (capitalists), financiers (bankers) and policing agents (enforcement personnel) – into an assemblage I refer to as “Leviathan”. This hybrid alignment presents itself and acts as an impregnable entity protecting the interests of its collaborators from the establishment of new fisheries or the entrance of new practices into its alignment. This paper will (1) describe the components and construction of “Leviathan” as it operates to protect itself, (2) demonstrate how an “optimizing” logic of cost minimization in management results in underutilization of salmon available for harvest and (3) present two case studies of salmon stocks that are presently not being utilized that could become community-based, small scale commercial fisheries that would be of substantial economic benefit to village residents for whom “Leviathan” makes no provision.

This chapter summarizes the findings of our studies of bio-economic rationalizations that have occurred in the wake of the individual transferable quota (ITQ) regimes. It argues that despite the different approaches and perspectives used to understand regimes based on fish stock assessments and catch share arrangements, and despite the diverse contexts for such regimes, some general findings are possible. These are discussed in terms of key issues in assessments of ITQ regimes, namely the prevention of overfishing, the fair allocation of fishing rights, making fishers into responsible, self-managing actors, the creation of well-functioning markets, and whether the ITQ regimes were social or environmental projects. It concludes with comments about future directions for research.