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New
Zealand shows the world the way to efficient fisheries management
Introduction
| Realigning incentives | Building
on success | Recreational fishing
Quota allocation | The
legal basis | Restructuring the
system | Pattern for the future
New Zealand
is showing the world the way to efficient fisheries management.
It has broken away from the tradition of control by regulation,
and adopted a new approach based on property rights and economic
incentives.
The new
system gives the fishermen a right to take a defined quota,
or share of the total allowable catch. This quota is the holder's
legal property in the full sense of the word, being both transferable
and divisible.
It is
interesting to note that the consistent refusal of administrators
to admit that a fishing licence confers property rights on
the holder is a major stumbling block to the reform of a cumbersome,
inefficient and increasingly costly management system in Australia.
New Zealand's
quota management system has so far been partially adopted.
Now, having proved outstandingly successful during five years
of application to 32 of the nation's most important species,
an expert report has recommended its immediate and universal
adoption in both commercial and recreational fields.
The report,
prepared for the Minister of Fisheries by Peter H. Pearce C.M.,
lists four principal conclusions:
| 1 |
the
quota system is a better way of managing fisheries and
should be retained; |
| 2 |
a
number of changes are needed to make it work better; |
| 3 |
those
who hold rights to fisheries should be given increasing
responsibility for managing them; and |
| 4 |
environmental
issues are not being sufficiently well handled at present. |
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Realigning
incentives
Pearce found enthusiastic approval for the new quota management
system in all sectors of the community - commercial and recreational
fishermen, government officials, Maori and conservationists
alike.
This
public reaction, he believes, amounts to "an endorsement of
the idea that a system based on property rights, and the economic
incentives that accompany them, can be an effective alternative
to increasing government regulation."
He reports
that the quota system has improved management of stocks, reduced
redundant fishing capacity, alleviated conflicts over the
allocation of catches, and increased the economic returns
from fishing to both the industry and the government.
The new
system, he adds, "eliminates the single-minded competition
for fish and wasteful over-investment in fishing capacity."
"It provides
users with well-defined, securely vested and valuable interests
in the catch, giving them strong incentives to develop efficient
fishing enterprises and to support good, long-term resource
management."
"The
benefits of the quota system derive from this realignment
of fishers' incentives."
Building
on success
He points out, however, that the successes achieved so far
must be built on, and for this a number of substantial changes
are needed, both to the quota system itself and to the antiquated
regulatory framework within which it is still embedded.
Most
importantly, greater responsibility for managing fisheries
must be given to those who hold the rights of access to the
resources.
The most
immediate problem is that some 130 species, for which commercial
permits are issued, still remain outside the quota management
system, and recreational fishing is not covered. Both these
deficiencies, he says, must be remedied without delay.
He points
out that the alternative - dealing with them sequentially
over a period of time - would give rise to a number of avoidable
problems.
"The
sooner the quota management system is extended to cover all
species the better," his report recommends. "This view is
widely shared within the fishing community."
Recreational
fishing
The most immediate problem which must be faced is that of
making allowance for recreational fishing.
Something
like a third of New Zealand's people go fishing now and then,
mainly for snapper, kahawai and rock lobster, and in these
species amateur anglers compete with commercial fishermen.
While
bringing recreational fishing under the quota system is strongly
supported by commercial fishermen and fisheries administrators,
it is generally opposed by amateur anglers, who claim a traditional
freedom to fish without charge or restriction.
Pearce
points out, however, that they have a lot to gain from the
quota system.
"The
absence of specific rights, and any form of licensing, leaves
a dearth of information about the numbers or recreational
fishermen and their catches of fish," he says.
"This
is essential information recreational fishing groups need
to promote their interests, and resource managers need to
manage recreational fisheries."
He adds:
"Commercial fishermen's quotas give them a stronger legal
claim on the catch which is likely to leave recreational fishermen
in a weak position as their demands grow.
"Moreover,
recreational fishermen are left with no means of increasing
or adjusting their share of the catch."
"Recreational
fishing is vulnerable to the charge that only commercial fishermen
contribute to the cost of fisheries management."
The solution
he recommends is to allocate a proportion of the catch as
recreational quota, to be held on behalf of amateur anglers
by central or local government or, preferably, by new organisations,
based on Fish and Game Councils, created for the purpose.
Such
bodies would be best able to advance the interests of recreational
fishermen, and monitor catches by means of periodic surveys.
Quota
allocation
The permanent quota rights already issued to commercial fishermen
present problems of allocation, the report says.
Quotas
for species not yet under the system, but already being fished,
should be allocated on the basis of catch histories, while
those for species not currently being fished should be auctioned.
The report
stresses the point that the principle of allocating quota
rights on perpetual terms, which has been done in most cases,
should be adhered to.
This
is because long-term investment decisions cannot be made on
the basis of short-term access to resources. Moreover, limited
terms not only reduce the security and value of fishing rights,
but also reduce the incentive to conserve and enhance fish
stocks.
Quotas
should also be in terms of a proportion of the total allowable
catch.
The original
system of allocation of quotas in tonnes collapsed in 1989,
when it was realised that orange roughy stocks had been grossly
overestimated, and the Government found itself financially
incapable of buying back quotas.
The problem
was solved by changing all quotas to percentages of the total
allowable catch, making it unnecessary for the Government
to intervene at all in the quota market, either as buyer or
seller.
The percentage
system, Pearce admits, has two main disadvantages. It makes
the value of the quota less certain, and therefore less secure
as a property right; and it puts the responsibility of setting
the total allowable catch on the Government while the quota
holders either bear the cost or reap the profits which result
from the adjustment.
But long-term
benefits outweigh these short-term disadvantages.
"On the
other hand," he points out, "percentage quota can advance
the policy objective of engaging those who hold fishing rights
in the responsibilities of resource management."
"By assigning
quota holders defined shares, not only in the current catch
but also in all potential yields, percentage quota gives them
strong incentives to support good management, research and
enhancement."
The
legal basis
As things stand at present, there are still problems confronting
fishermen seeking to use quota rights as collateral for loans.
This
deficiency, Pearce believes, can be addressed by developing
the property rights approach to fisheries management.
A legal
register of property rights and interests, like that for registering
interests in land, would provide for the registering of mortgages,
and would be completely acceptable to financial interests.
The report
rejects the concept of Crown charges for fishing rights, like
the so-called "resource rent" which is advocated in some quarters.
This sort of tax has proved to be impractical, and does not
bring in the revenue expected of it.
"Notwithstanding
legal niceties," Pearce points out, "the quota management
system has effectively transferred property interests in fisheries
from the Crown to quota-holders, thus weakening the Crown's
claim for a return to the owner.
"In my
opinion," he adds, "the guiding principle in distributing
the burden of government charges should be cost recovery."
"That
is, the required revenue should be raised through charges
on holders of fishing rights, distributed among them in a
way which corresponds, as closely as possible, to the costs
they impose on the Treasury."
Restructuring
the system
The report points out that the new quota system has been imposed
on mechanisms designed for managing fisheries under the former,
highly regulatory system. Some of these mechanisms are no
longer necessary; others are not well suited to today's needs.
A wide
ranging legislative and administrative overhaul is needed.
This would involve the 1983 Fisheries Act, the 1971 Marine
Farming Act, the 1989 Maori Fisheries Act, the 1977 Territorial
Sea and Exclusive Economic Zone Act and what Pearce describes
as a "panoply of regulatory instruments".
The primary
purpose of management mechanisms, the report points out, is
to prevent depletion of fish stocks, which is achieved by
setting a total allowable catch and allocating proportional
quotas. They are therefore no longer necessary.
"I find
the present provisions for fisheries management plans anachronistic
and inappropriate," Pearce says, "and I conclude that they
should be abolished in favour of a more suitable process for
establishing the parameters within which those with rights
to fish may manage and use resources."
Fishing
permits, he says, "serve no obvious purpose" and should be
abolished, and "the necessity of controlled licences is also
questionable".
Pattern
for the future
The new approach, he says, involves separating the responsibility
for managing fishing, which can be assigned to those who hold
the rights to fish, from that of protecting the conservation
of resources, which is the responsibility of government.
Quota
holders must therefore be given legal authority to organise
themselves for the larger role they must play.
Fisheries
associations, covering recreational as well as commercial
fishermen and controlled by quota holders "much like shareholders",
should be the "vehicles for management" in future.
Says
Pearce: "They would design fishing regimes for the benefit
of their members, alleviate resource management problems such
as local depletion, comply with conservation prescriptions
about by-catches and related matters … and sponsor research
to establish yield capacity."
At the
national level, overseeing these regionally-based or resource-based
fisheries associations, would be "a fisheries board … to bring
all New Zealand's fisheries interests together."
Whether
the recommendations of the Pearce report will be followed
in detail is, of course, a matter for the future. But a new
system has been introduced which has already proved far superior
to the old, and it is obvious that there can be no turning
back.
As Minister
of Fisheries Douglas Kidd put it, "In spite of its admitted
shortcomings, the quota management system is working, and
the establishment of tradeable property rights to harvest
fish has had positive consequences."
New Zealand
has obviously made a significant breakthrough, and countries
with traditional management systems, which are failing to
maintain healthy stocks or sustain prosperous fishing industries,
are watching closely.
The world-wide
pattern is one of depressed resources, over-expanded fishing
fleets, low incomes for fishermen, heavy dependence on government
regulation and support and conflicts between fishing interests.
Ultimately,
all the world will have to follow the lead.
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