Presentation given at Tenure & Fishing Rights 2015 by Ragnar Arnason

1. Rights-Based Approaches to Fishing:
Theory and experiences
A presentation at the conference
Tenure and Fishing Rights 2015
Ragnar Arnason*
Apsara Angor Hotel, Siem Reap
March 23-27 2015

2. Topics
I. Rights-based fishing: What do we know?
– Theory
– Experience
II. The cases presented at this conference
III. Conclusions

3. I.
Rights-based fishing:
What do we know?

4. The Common Property Problem
Universal: Holds for all resources, places and times!
Note however…
(1) If the “CP-group” is sufficiently small (< 10 members)
=> not complete waste.
(2) If the CP-group is able to establish co-ordinated use
(i.e., a management regime) => waste is reduced!
The Common Property Theorem
Valuable resources held in common tend
to be overexploited and wasted

5. The CPP in Fisheries
In fisheries, the CPP appears as
1. Excessive fishing fleets and effort
2. Overexploited fish stocks
3. Poor profitability, low personal incomes
4. Little or no contribution to GDP
5. A threat to biological sustainability
6. A threat to economic/social sustainability

6. Value,
$
Biomass
Effort
Costs
Sustainable
revenues (yield)
Sustainable
biomass
OSY
CSY
The Sustainable Fisheries Model

7. Individual Property
Universal: Holds for all resources, places and times!
Validity is pretty obvious
– Aristotle noted this 350 B.C
– Individuals maximize their benefits; why would they not?
– Formally proved in economic theory (e.g. Welfare theorem I)
The Individual Property Theorem
Valuable resources held by single agents
tend to be well used and preserved

8. Note however,…..
• It empowers rights holders
– Allows them to retain old traditions if they want
So, individual property
• Promotes economic efficiency
– Maximizes income and economic growth
• But it does not necessarily promote
(1) Equity and fairness
(2) Preservation of traditional social structures
– Tends to undermine them!

9. The empirical evidence
• Most fisheries in the world have been and
are organized as CP-fisheries
Outcome:
overexploitation!
(Exactly as predicted by theory)

10. The global fishery in 2004
(World Bank and FAO 2009)
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40
Fishing effort (index)
Revenuesandcosts(B.US$)
Optimal
Potential
profits
Current
Current
loss

11. Global Fishery Waste
Sustainable global fishery:
Current (2004) and profit maximizing outcomes
Current Optimal
Difference
(optimal –current)
Fishing effort 13.9 m. GRT 7.3 m. GRT -6.6 m. GRT
Harvest 85 m. mt 81 m. mt. -4 m. mt.
Biomass 148 m. mt 314 m. mt. +165 m.mt.
Profits -5 b. USD 44 b. USD 49 b. USD
50 b. USD  Global Development Assistance in 2004

12. Although
global fisheries are still mostly
organized as common property ones
rights-based fisheries are becoming
more common

13. Key Property Rights in Fisheries
Key Property Rights in Fisheries
Sole
ownership
Territorial
user rights
TURFs
Individual
quotas
IQs/ITQs
Community
rights
Rarely
used
Mainly
sedentary
species
Very
common
Fairly
common
Good
Experience
Good Good Mixed

14. Individual Transferable Quotas: ITQs
• The most widely applied rights-based fisheries
management system in the world
• Adopted as a major part of the FMS by at least
22 major fishing nations
─ New-Zealand, Australia, USA, Canada, Greenland, Iceland, Holland,
Norway, Denmark, Sweden, Estonia, Germany, UK, Portugal, Spain,
Russia, Morocco, Namibia, South Africa, Chile, Peru, Falkland
• Close to 25% of global catch is now taken
under ITQs!

15. Outcomes of ITQs
- General pattern around the world -
Economically very successful!
(1) Reduction in fishing effort (immediately)
(2) Fishing capital declines (but usually slowly)
(3) Unit price of landings quickly increases (often
greatly)
(4) Quotas become valuable (quickly!)

16. Outcomes of ITQs (..cont.)
Socially ?
(1) Alters structure of fishing industry/communities
– More efficient operations, techniques
– Tends to consolidate operations (fewer vessels, fishers)
(2) Creates new valuable assets – some people get rich
(3) Promotes more capitalistic culture
Biologically moderately successful
(1) Biomass recovers (slowly)
(2) Enhanced sense of resource stewardship by fishers
(3) Discarding often reduced
Good or bad?

17. Limitations to PRs
• In principle PRs solve the main problems of
fisheries
• In practice there are difficulties
1. PR-technology
– Can we define and enforce PRs?
– Prohibitively costly to enforce the PRs
2. Socio-politically infeasible
These difficulties apply in particular to artisanal
fisheries in less developed countries (esp. Africa & Asia)
 50% of the global fishery

18. But note
• Common property problem within the community!
– Not a trivial problem (decision making in groups, politics,
impossibility theorems, disparage member interests etc.)
• Likelihood of success depends on
(a) the quality of community rights and
(b) decision making set-up!
For these reasons
attention has been drawn to
community fishing rights

19. Fishing Communities:
Design Principles: Summary
(Ostrom 1990, Arnason 2005)
1. Community rights should be as high
quality as possible
2. Community must be able to restrict entry
3. Community should be inclusive – i.e.
include all fishers in the area

20. Design Principles: Summary (cont.)
4. Community should have as homogeneous
membership as possible
5. Each member’s pay-off should be
increasing in the aggregate pay-off
6. Fishing communities should be endowed
with efficient decision-making structures
– Governance!

21. II.
Case Study Experiences

22. The case studies
1. Eight cases
2. From different parts of the world
3. However, not representative (too few & not random)
4. Have not been able to study carefully => may
have missed and misunderstood

23. Case studies: Summary table
Individual
rights
Communal rights Results
Type Type Quality
Design
principles
Bio-
economic
Social
Cambodia TURFs Med No? +/- +
Indonesia TURFs (Weak) No? (+/-) (+)
Sierra Leone TURFs Med No? ? (+)
PNA Days Days Strong (Yes) + +
Mexico Licences TURFs Weak No? -? ?
Canada ITQs +(?) (-)
Iceland ITQs + (-)
Australia IEQs +

24. Summary
1. Great variety of arrangements
2. Mostly weak PRs and imperfectly developed
community management frameworks

25. Pattern of outcomes
1. Bio-economic outcomes
– If individual rights => good
– If community rights => weak
2. Social outcomes
– If individual rights => weak
– If community rights => good

26. What should the Commission do?
1. Member nations decide on fisheries
management
2. Commission should:
• Encourage adoption of rights-based methods
• Offer technical and expert advice
• Offer financial support (adjustment, regional etc.) -
loans rather than grants.
• Beef up enforcement especially for landings

27. END