Providence Journal
January 9, 2006

Give fisherman more stakes in fisheries

By Donald R. Leal

BOZEMAN, Mont. - U.S. COASTAL fisheries are in trouble. Experts say that overfishing plagues roughly one-third of the nation's fish stocks. Red snapper in the Gulf of Mexico has yet to recover from excessive catches that were first noted in the mid-1980s. Cod from Georges Bank off the coast of New England has not come back after plummeting in the mid-1990s. Time is running out for lingcod, red grouper, and dozens of other species.

Depletion of fish stocks is the result of the well-known "tragedy of the commons": Without private-property rights to fish stocks, fishermen have little incentive to conserve, so they tend to take too many fish, jeopardizing future catches and income. The problem is global: the United Nation's Food and Agriculture Organization says that 25 percent of the world's fish stocks are seriously overfished. Across the oceans, cod, tuna, marlin, sharks and other commercially prized fishes have been dwindling for decades as fishing fleets have expanded in number and traversed the high seas.

For three decades the U.S. government has tried to solve the problem in its own waters by telling fishermen when, where, and how to fish. But these regulations only created more problems. At one point, for example, the halibut season in Alaska was reduced to two days a year, causing a mad rush to fish with little regard for safety or care of the catch. Restrictions in the red snapper fishery allow each vessel just 2,000 pounds of snapper per trip although many boats could easily bring in far more. Such regulations drive up costs for gas, boat maintenance, and crew time.

Short seasons and other restrictions are bad for fishermen, fish, and consumers. Fishermen have incentives to buy bigger and faster boats, to go out in dangerous weather, and to catch as many fish as quickly as possible. When seasons lasted a few days, crab fishing in the icy Bering Sea was downright deadly -- boats sank and fishermen lost their lives. When halibut seasons lasted two days, the abundance of fish taken in such a short time could not even be processed. Less than 20 percent of the catch could be sold while fresh -- most had to be frozen. During one 24-hour period in 1991, a third of the halibut catch rotted on decks.

In the Gulf of Mexico, a minimum size limit for red snapper forces fishermen to throw back more than 2 million pounds of snapper a year. The entire fishery lands just 4.5 million pounds a year. Making the problem worse, many snapper are tossed back dead because when they are brought up from the depths, the rapid pressure change often kills them.

The rush to be the biggest and the fastest has spurred enormous overcapitalization in U. S. fishing. For example, experts estimated in 2000 that the total catch allocation of sablefish off the northern Pacific coast could have been accomplished with one-tenth the vessels.

The good news is that solutions, based on free market principles, exist. These involve assigning transferable catch quotas to individual fishermen, communities, or harvesting cooperatives. The most widely used approach, individual fishing quotas or IFQs, limits each fisherman to a percentage of the total allowable catch set each season by fishery managers. Quota holders can adjust the size of their holdings by buying and selling quotas. Those wishing to enter the fishery can buy quotas; those who want to get out can sell them.

Where these IFQs have been adopted, they have transformed fishing. Seasons were extended. Alaska's halibut season went from two to three days a year to 8 months, allowing fishermen to take better care of their catch, choose the best time to fish, and operate more safely. Consumers have more fresh fish, and regulators have greater precision in controlling the overall catch.

Other countries are well ahead of the United States in adopting IFQs. New Zealand and Iceland use them with nearly all commercial fish stocks; Canada uses them in two-thirds of its fisheries, and Australia, Greenland, and the Netherlands have adopted them for some fisheries. Overall, these foreign fisheries report higher fishing incomes, reduced fleet excesses, higher product quality, safer fishing, and reduced overfishing and less by-catch (the accidental catches which usually have to be tossed back).

In the United States, IFQs have developed more slowly, They were adopted in the Mid-Atlantic surf clam fishery (1990), the South Atlantic wreckfish fishery (1992), and the Alaska halibut and sablefish fisheries (1995). A congressional moratorium ended their expansion between 1996 and 2002, largely because of opposition from special interest groups such as fish processors.

Now the Bush administration is doing something to address the problem. The president has sent legislation to Congress spelling out a management approach for U.S. marine fisheries that includes use of transferable quotas for individual fishermen, communities, and harvesting cooperatives.

This system would dramatically change the incentives and the nature of fishery governance. Fishermen would no longer be compelled to buy bigger and faster boats and fish during bad weather. Instead of competing with others for shares of fish up for grabs, they could focus on taking better care of their catch and avoiding bycatch. And regulators could rid the fishery of regulations that do more environmental harm than good, like compressed seasons.

If market-based approaches are so good, why haven't more fishing areas adopted them in the United States? Right now, only eight coastal fisheries have such approaches. The Bush administration hopes to double that number by 2010. The fisheries are likely to include some of America's largest fisheries such as the West Coast ground-fish fishery and the Gulf of Mexico snapper and other reef fish fisheries.

A major stumbling block is the fear that corporations will buy up all the quotas and fishing communities will shrivel. The reality is that nearly all IFQ programs impose limits on how much quota individuals or companies can hold. To ensure fishing remains a mainstay of local economies and societies, quotas can also be allocated to coastal fishing communities. This is already being done in Alaska and British Columbia.

Another factor limiting the spread of IFQs is conflicting views in the environmental community. Environmental Defense has been a strong supporter, but the Marine Fish Conservation Network has not. It suspects that such approaches are a step toward privatizing parts of the ocean and fears that it would be difficult to reduce catches if necessary to protect fish stocks. Such fears are unfounded. If managers see a need to reduce the total allowable catch, every fisherman's catch would be reduced proportionately.

The Bush administration goal is modest, but it is an important step toward the health of our marine resources. Congress should endorse the move to expand market-based fisheries management.

Donald R. Leal is a senior fellow with the Property and Environment Research Center (PERC) in Bozeman, Montana. He is author of Fencing the Fishery, editor of Evolving Property Rights in Marine Fisheries, and coauthor with Terry L. Anderson of Free Market Environmentalism.