Socioeconomics of Individual Transferable Quotas and Community-Based Fishery Management

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

Likewise, under community-based management, there will also be some incentive for fishing practices that are contrary to conservation. However, this will be countered by a more favorable perspective on sustainability, and thus a sounder base for a conservation ethic, derived from two important circumstances. First, since community-based management typically occurs in the context of smallboat fisheries, the fishers are relatively more dependent on long-term investment in non-transferable fishing skills than on large financial investments in rapidly depreciating equipment which can be liquidated over a relatively short period. This should encourage a more long-term view among fishers. second, management in such cases is based on, and guided by, the collective interest of the community, expressed in the decisions of a collective authority. Inter-generational equity and continuing prosperity for the community as a whole are major features which drive a need for long-term sustainable use and equitable sharing of the community's fishery resources-obj ectives less likely to be advocated by an ITQ fishery that may well be largely in the hands of corporations or a small number of privileged quota holders. Indeed, in smaller communities with a strong fishery base, it is common to find a collective interest in the health of the community's resource assets, which is strengthened by a collective interest in community-based harvest rights. This may extend to support for and/or participation in local fishery resource stewardship undertakings.

(2) Flexible Management. Flexibility, or adaptability, is important both within the fishing season and over longer periods of time. Unfortunately, the proper functioning of ITQ systems requires that quotas be fixed at the beginning of a season and be guaranteed for the duration of the season. This produces an inherent lack of flexibility; it limits the ability of managers to make in-season adjustments, lowering the TAC or imposing closures if stock monitoring indicates catches must be reduced to avoid damage to the stocks. This proved to be a significant problem in responding rapidly when cod stock collapses became apparent in Atlantic Canada in the early 1990s. With community-based management, however, flexibility can be built into the system, for example through a careful form of limited-entry licensing to regulate the number, size, and gear of fishing units allowed to operate. Consequently, even though in-season cuts will never be popular, they can at least be conducted fairly when needed. This better accounts for high levels of uncertainty in fish stocks, since stocks can be monitored throughout the season, allowing finetuning of permitted fishing time in mid-season if changing stock conditions so demand.

Over longer time periods, ITQ systems are inflexible in another way because, once in place, they can be expected to be difficult to dismantle. While governments typically give out quota shares free to initial quota holders, once the quotas enter into trade they often assume high values. If, at some point an ITQ system no longer appears desirable, due to actual or prospective biological, economic, or social problems, the government may find it difficult to move to another management system. The government may be dissuaded because of the excessive expense involved in buying out quota holders, who have been made to feel they "own" the fish stock, particularly if they have bought quotas at high prices. Thus, unsatisfactory ITQ systems may linger on, perhaps leading to stock collapse. This is important to keep in mind given that the massive collapse of groundfish stocks in Atlantic Canada occurred after some 10 years of experience with the government's individual quota management for a large part of the fishery. Both the near-irreversibility of ITQ systems and their inflexibility in annual quota setting are clearly at odds with the requirements of the FAO-mandated and internationally accepted precautionary approach in fisheries management.