HTML _ 97-441 - Commercial Fishing: Economic Aid and Capacity Reduction
14-Apr-1997; Andrew Read, Eugene Buck; 31 p.

Abstract: Both experience and economic models show that, in the absence of enforceable access or catch restrictions, competition among commercial fishermen results in an expansion of fishing capacity, and resultant fishing effort, beyond the sustainable limits of the fish population being pursued. The spiral of increasing effort and diminishing returns (i.e., rent dissipation) has helped to fuel increases in fish prices that reduce benefits to consumers and processors; has shifted many fish populations toward smaller, younger fish that typically command lower prices; and in many cases has reduced yields far below achievable levels. Congress has considered several approaches to address concerns about overcapitalization and excess capacity in the fishing industry. The economic aid and capacity reduction programs discussed in this document are some possible approaches to reducing overcapitalization and overfishing. Alternative approaches, such as community development quotas and individual transferable quotas, seek to meet some of the same objectives, but are not discussed in this report. Although some U.S. fisheries remain open to new entrants, access to many fisheries is limited or restricted. If new entry to a fishery is permitted, any capacity removed could be replaced or increased, negating the effects of any capacity reduction scheme. Capacity reduction in a limited access fishery may be feasible if vessels or licenses that are removed cannot be replaced. However, without measures to prevent upgrading (i.e., ¨capital stuffing¨) -- increasing the size or fishing power (i.e., efficiency or effectiveness) -- of remaining vessels, the benefits of capacity removal could again be negated. Bodies governing limited access fisheries at local, state, national, and international levels have initiated various ¨buyback¨ or retirement schemes to reduce overcapacity and the consequent overfishing. The nature and scope of these programs have been as varied as the fisheries they have covered. The common objective of vessel buybacks or license retirement is the permanent withdrawal of effort (i.e., fishermen and their vessels) from a particular fishery. In most cases, however, the reduction in the number of vessels or licenses has had a relatively modest effect on fleet capacity, since the first to accept buybacks are usually the oldest and least efficient units. Although sometimes conceived as a means for easing financial hardship caused by reduced landings of fish, capacity reduction is more often viewed as a measure to realign effort and eventually increase sustainable catch levels. Unlike economic aid, however, capacity reduction aims to provide long-term benefits to those choosing, or able, to remain within the industry and may thus indirectly confer benefits to some of the communities that these fisheries support. [read report]

Topics: Marine

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