Pick Your Poissons

Economic and ecological diversity for fisheries

The pitiful state of America's ocean fisheries provokes perennial handwringing. In its July 31st issue, The New Yorker profiled historical ecologist, fisher and MacArthur genius Ted Ames. Mining the memories of old fishers and historical documents, Ames has rediscovered the former spawning and feeding grounds of ghost cod populations in the Gulf of Maine that were destroyed by overfishing. The hope is that that knowledge will aid in some day restoring them. The profile notes that with modern fishing methods "[e]ntire populations of fish can be erased." In fact, New England's once vast cod fishery is all but gone today.

Nowhere in The New Yorker profile does the concept of the tragedy of the commons appear. This is an odd omission because it is the explanation for why so many of the world's fisheries, including New England's, are being devastated. The tragedy of the commons occurs when resources can be exploited by anyone. In open access fisheries, no fisher has an incentive to leave any fish behind to breed because he knows that the next fisher that comes along will simply take whatever fish he leaves and sell it. It's a race to the bottom with both fish and fishers losing out. This race to the bottom has all but destroyed New England's famous cod, haddock and flounder fisheries.

The New Yorker profile notes that Maine's lobster fisheries remain healthy and productive, but attributes that success mostly to "stringent practices" such as state-mandated size limits. The profile does mention in passing: "Lobstermen informally divide the ocean among the towns and precincts whose shores it borders. A lobsterman from one town who drops his traps in another town's waters can expect to find his strings cut and his traps disappeared." In other words, Maine "harbor gangs" avoid the tragedy of commons in their fisheries because they treat their local lobster fisheries as their private communal property and exclude outsiders. In other words, property rights, even informal property rights, can help restore and protect fisheries.

In early June, the Philanthropy Roundtable convened an all-day meeting in San Francisco to discuss how charitable foundations could best help solve the growing economic and ecological crisis in America's Pacific Coast fisheries. Roundtable president Adam Meyerson offered four premises underlying the conference in his opening remarks. There are solutions; the search for the solutions involves using the best science; markets and property rights are part of the solution; and philanthropists have a key role to play in finding solutions to this great crisis. Representatives for more than 20 foundations that are concerned about Pacific fisheries issues attended the conference. Presenters included marine biologists, economists and commercial fishers.

Most of the presenters agreed that the chief problem with fisheries is that current system of regulated open-access encourages overfishing and ecological devastation. University of California economist James Wilen's offered his "Parable of the Farm" to illustrate the predicament. His parable invited participants to imagine what farming would be like if it were managed like most fisheries are today.

At the beginning of planting season each year, farmers would gather at the borders of Iowa with their tractors and at a signal rush in to plow and plant as much land as they could before the next farmer beat them to it. Since the farmers could not be sure of getting the same plot the next season they wouldn't take care of the land that they did manage to plow that season. Next year, they would buy bigger faster tractors so that they could reach more land and plow it faster than rival farmers. Were farming managed this way, the result would be degraded land, excess machinery capacity, the production of low value products, perverse innovation producing bigger faster tractors, the imposition of more and more detailed regulations and land would have no value. This is exactly what we see in regulated open-access fisheries today. Or as American Enterprise Institute scholar Steven Hayward suggested, "Imagine what the beef industry look like if it were open access."

Another part of the problem with fisheries is that there is a conflict of visions, according to Washington State University professor of fisheries management Ray Hilborn. On the one hand, fisheries can be valued as marine ecosystems, and on the other, they are seen as resources to generate jobs, food and profit. Hilborn noted that it is impossible to maximize one without harming the other. The problem is how to decide what the proper balance is. Stephen Palumbi, a professor of marine sciences at Stanford University, pointed out that intact marine ecosystems offer other benefits besides harvesting fish. For example, fishing in Monterey, California yields only $20 million per year, while tourism brings in $2 billion—a lot of that from tourists who come to see marine life. Palumbi argued that establishing marine reserves increase diversity, fishery productivity and tourism.

Participants in the Philanthropy Roundtable conference also heard presentations describing how property rights in fisheries have worked out in a number of areas. Yale University sustainable development economist Robert Repetto described real life experiment in property rights in the scallop fishery off the Atlantic coast. In the 1980s, Canada adopted essentially a system of tradable quotas in its scallop fishery while the United States maintained a system of top down regulations including ever shorter scallop fishing seasons. Twenty years later the results are stark. The Canadian scallop fishery produces more and bigger scallops and is profitable. On the other hand, Repetto concludes: "If the U.S. scallop fishery were a business, its management would surely be fired, because its revenues could readily be increased by at least 50 percent while its costs were being reduced by an equal percentage. No private sector manager could survive with this degree of inefficiency."

Mercatus Center scholar Maurice McTigue, a former New Zealand cabinet minister, detailed how New Zealand's successful program of individual tradable quotas (ITQs) in its fisheries was established. The result is that fisheries are being sustainably harvested and the export value of their products went up 400 percent. And Mark Lundsten, a former Alaska halibut and sablefish fisher, described how the creation of individual fishing quotas (IFQs) in Alaska transformed those fisheries. In 1994, before (IFQs) the halibut fishing season was a "derby" (called that because it was reminiscent of demolition derbies) lasting 72 hours. After IFQs were assigned, the season lasted 245 days. Fishers did not have to go out in bad weather and consumers got fresh rather than frozen fish. Inevitably establishing property rights in fisheries means that many fishers and boats will have to leave the industry. This fact always generates a lot of initial resistance among fishers.

Representatives from the Bradley Fund for the Environment, the Gordon and Betty Moore Foundation, the Keith Campbell Foundation for the Environment, and the David and Lucille Packard Foundation also briefly described their fisheries programs. Their programs range from encouraging the creation of dedicated access privileges (ITQs are an example) to helping establish territorial use rights in fishing (TURFs) for sea urchin fisheries, and to creating international certification systems for sustainable fisheries such as Marine Stewardship Council. The foundations also support scientific research on the effects of fishing on marine ecosystems.

Annually, there is $32 billion loss on worldwide fisheries revenues of $100 billion. Clearly the current situation in our fisheries cannot continue. While not a panacea, property rights will be a vital part of the solution to restoring fisheries and marine ecosystems to health.

Disclosure: The Philanthropy Roundtable paid his expenses to participate in the San Francisco conference.

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