Socioeconomics of Individual Transferable Quotas and Community-Based Fishery Management

Agricultural and Resource Economics Review, Oct 2004 by Copes, Parzival, Charles, Anthony

In many fisheries around the world, the failures of centralized, top-down management have produced a shift toward co-management-collaboration and sharing of decision making between government and stakeholders. This trend has led to a major debate between two very different co-management approaches-community-based fishery management and market-based individual transferable quota management. This paper examines the debate over the relative merits of these models and undertakes a socioeconomic analysis of the two approaches. The paper includes (1) an analysis of differences in the structure, philosophical nature, and underlying value systems of each, including a discussion of their treatment of property rights; (2) a socioeconomic evaluation of the impacts of each system on boat owners, fishers, crew members, other fishery participants, and coastal communities, as well as the distribution of benefits and costs among fishery participants; and (3) examination of indirect economic effects that can occur through impacts on conservation and fishery sustainability. The latter relate to (a) the conservation ethic, (b) the flexibility of management, (c) the avoidance of waste, and (d) the efficiency of enforcement. The paper emphasizes the need for a broader approach to analyzing fishery management options, one that recognizes and properly assesses the diversity of choices, and that takes into account the interaction of the fishery with broader community and regional realities.

Key Words: co-management, community-based management (CBM), community economics, distributional impacts, fishery policy, individual transferable quotas (ITQs), property rights, sustainable fishing

Centralized, top-down approaches to fishery management-the sort found in many management agencies within developed countries-have been discredited in the wake of harvest declines and fishery collapses around the world, notably that of the Atlantic Canadian groundfishery (Charles, 1997). It has become clear that, while the government must maintain its overall role in guiding the fishery to best meet the needs of fishers, coastal communities, and citizens as a whole, fishery management must evolve toward co-management-closer collaboration and a greater sharing of responsibilities and decision making between government and stakeholders.

While the above reality seems generally accepted, this is where the agreement ends. There are two main contrasting visions of co-management. On the one hand, there are those who view the fishery as a cornerstone of the coastal economy, and of coastal life in general, and see co-management as a tool for careful planning to meet the current and future needs of both fishers and the communities in which they live. These people will tend to opt for a planned approach to co-management, likely through what is called community-based management. Others, who seek market-based approaches to management, tend to consider persons who currently hold marketable individual quotas as the legitimate stakeholders in the fishery, in whose interest the fishery should be managed. While the variety and complexity of fishery conditions leaves room for many different options in structuring fishery management, the most important debate regarding the choice of management system seems to be associated with the approaches identified above: community-based management and market-based individual transferable quota (ITQ) management. The literature contains a variety of work relating to this debatesee, for example, Charles (2001, 2002); Copes (1986, 1995, 1997, 1998, 2000); Neher, Arnason, and Mollert (1989); Organization for Economic Cooperation and Development (1993); Pinkerton (1989); Pinkerton and Weinstein (1995); Pomeroy (1995); Shotton (2000); Townsend and Charles (1997).

This paper examines the debate and undertakes an analysis of the two management models. We begin by briefly describing what is meant by each of the management approaches. This is followed by an examination of the structure, philosophical nature, and underlying value systems of each, including an overview of their treatment of property rights. A socioeconomic evaluation follows, with discussion of the distribution of benefits and costs among fishery participants, community economic impacts, and finally indirect economic effects that can occur through impacts on conservation and fishery sustainability.

Community-Based Fishery Management

Nova Scotia's Coastal Communities Network (CCN) defines community-based fishery co-management as "a method or system of management in which harvester and community interests have a significant role in the management of fishery resources," and where "local organizations clearly define and share specific management responsibilities and authority" with governments. The CCN notes that "in all community based co-management activities, fishers are recognized as the primary participants" but at the same time, "the involvement and support of the broader community is essential" (CNN, 1997, online report).