Could Privatization Have Prevented the 77 Percent Cut in New England's Cod Fishery?

The New England cod fishery has essentially collapsed from annual landings of 18,000 metric tons in the early 1990s to around 4,000 tons in recent years. And marine biologists believe the situation is getting worse. Consequently, the New York Times is reporting:

... New England Fishery Management Council voted to recommend reductions of 77 percent from last year’s catch for each of the next three years for cod in the Gulf of Maine.

It also recommended cuts of 61 percent from last year for one year only to the cod catch on Georges Bank, a vast area off Cape Cod, which was named for the fish. The council’s recommendations are subject to approval by the federal government, which is expected to put them in place by May 1.

Such deep cuts will decimate the local fishing fleets and the jobs that depend upon them. This situation might well have been avoided had local fishers agreed earlier to privatize the fishery. A recent study in Science once again showed that allocating catch-shares to fishers - giving a percentage of the catch to individual fishers - prevents overfishing that leads to the collapse of fisheries. Over at the Harvard Business Review, Environmental Defense Fund vice-president Eric Pooley explains how catch shares helped improve the red snapper fishery in the Gulf of Mexico: 

... fishermen would be allocated shares based on their catch history (the average amount of fish in pounds they landed each year) of the scientifically determined amount of fish allowed for catch each year (the catch limit). Fishermen could then fish within their shares, or quota, all year long, giving them the flexibility they needed to run their businesses.

This meant no more fishing in dangerously bad weather and no more market gluts. For the consumer, it meant fresh red snapper all year long.

After five years of catch share management, the Gulf of Mexico red snapper fishery is growing because fishermen are staying within the scientific limits. Boats that once suffered from ever-shortening seasons have seen a 60% increase in the amount of fish they are allowed to catch. Having a percentage share of the fishery means fishermen have a built-in incentive to husband the resource, so it will continue to grow (emphasis added).

The unfortunate truth is that privatizing fisheries never occurs until they near collapse. Fishers evidently believe that they are more canny than their competitors and can always find enough fish for themselves; so they fiercely resist efforts to privatize old-fashioned open-access fish-killing regimes. It is also always the case that too many fishers are pursuing too few fish and that means that some will have to find other work to do.

A catch-share system was finally established in New England and it was working. As Pooley notes:

From 2009 to 2011, groundfish landings were up six percent, revenues for fishermen were up 18% and discards were reduced by two-thirds. But all is not well there. Warming Atlantic waters are leading to migration changes and increases in predator species that prey on cod and compete for food....In New England, catch shares have kept a difficult situation from becoming even worse.

In fact, last year sea surface temperatures off the northeastern coast of the U.S. reached record highs which seems to be driving whatever cod remain further north away from New England. If this warming trend continues, not even catch shares will restore New England's cod fishery.

For more background on the trials and tribulations of privatizing fisheries see my posts, "Give a Man a Fishery and Soon You'll Have More Fish," and "How to Save New England's Fishing Villages."

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  • ||

    Wow, externalities, the prisoners' dilemma, privatization, and global warming all in one article.

  • WTF||

    I'll just leave this here.

  • Jgalt1975||

    And I'll leave this here (on topic): http://www.youtube.com/watch?v=N76h9GS0fwQ

  • Tman||

    Ron,

    I hope you had a chance to read this piece from the Seattle Times. It's a very unique perspective on the catch share program and the consequences -intended or not- that have resulted from the first real experiment with catch shares.

    http://www.seattleweekly.com/2...../full/all/

    Sharecroppers of the Sea
    As Alaska's deadliest catches become more regulated, "slipper skippers" exploit those who actually fish.



    It's a system, called catch shares, that the government and environmental groups will tell you is the best thing to happen to fish since catch limits. But fishermen in the halibut and black-cod industry—the first in the country to live with the bizarre realities of these new policies—have weathered its real consequences, outcomes that fly in the face of more official, rosy portrayals. Outcomes like absentee landlords, brokers and bankers, fish quota that costs more than your house, and a new generation of people cluttering their hulls, demanding sandwiches.

    It's getting hard for young fishermen like Bright to stay in this game. Those who try, though, are bettering their odds with a few comfy amenities, bait for a different kind of big fish: owners. Big-screen TVs, staterooms, hot tubs, saunas, and a super-sweet DVD collection are all things that could potentially shift their odds.

    Meet America's newest sharecroppers.
  • Ron Bailey||

    Tman: Thanks very much for sharing this. I am curious - I don't expect that you would object to a farmer leasing his land to another younger farmer, right? Is there all that much difference in leasing fishing quota?

  • SIV||

    I recall seeing a map which showed the densest concentration,by far, of farm-subsidy recipients were in Manhattan. Particularly the Upper West Side. I suppose there's room enough for fisherman to live there too.

  • Tman||

    The only real difference I can see is that corn is hardly in danger of being "over-farmed", and I doubt we are in danger of issuing corn quotas anytime soon.

    The more interesting question the article brings up (in terms of markets and liberty) is about the "Old Believers" who are utilizing the power of the free market to undercut the younger competitors by essentially doing the same job for substantially less.

    The overall point from the article about the catch share system is that there are a variety of consequences that have resulted since its implementation, and not everything is as ideal as it's made out to be.

  • Raston Bot||

    Are those leases hereditary?

    Here's a familiar argument wrt Russians:

    This race to the bottom in pricing negates that. He's bothered by the undercutting, greed, and calls to his walk-ons from other skippers, offering to do more for less. It hurts everyone, he says.

    I'm not sure it hurts the consumers. And the Russians have several competitive advantages like proximity to Alaska and no mortgages since they build their own boats.

  • The Derider||

    Property owners seek rents: News at 11.

  • ||

    Shut the fuck up, joe, you pathetic tiny moron.

  • Homple||

    "Tragedy of the Commons" + sermonette on global warming.

  • ||

    Ron,

    Does the Science study explain why the quota system for Georges Bank was a failure?

    I live in NH and hear the whining of the fishing industry. But not once have I heard a proposed solution to solving the declining fish stock. Usually it comes down to a dispute over techniques that measure the fish stock vs. any real argument regarding management.

    And I'm constantly amazed at the rhetoric coming out of NH senators about how "vital" the industry is in this state. It's such bullshit. The entire fishing industry could vanish here and no one would blink.

  • ||

    You have like 10 miles of coastline. How much fishing can NH do?

  • Heroic Mulatto||

    Does it work that way? If I set out from Portsmouth and go north, does it count as Maine? Or is it where the boat comes back to port?

  • ||

    It's not even that. How many fishing boats can they have? You have to moor them somewhere, and ME, MA, RI, and CT have vastly more space for boats. NH has just their tiny little strip.

    When I used to drive up to Maine from Manhattan for vacation, I'd start drinking the instant I crossed the Mass/NH border, because I was now out of the land of asshole MA state troopers. Go Portsmouth!

  • Heroic Mulatto||

    True.

  • Zeb||

    NH does have a proud drinking and driving tradition. Where I am from, at least, "road soda" for some reason became a common term for the beer you drink while driving to or from work.

  • Zeb||

    I think anyone coming from a NH port counts. There is a fishing industry, but way smaller than Maine or Mass. I wouldn't think that there are more than a few hundred people in NH at this point making their living from commercial fishing.

  • ||

    Yup. That's what makes the Senators' pleas so blatantly shallow.

    There are really three main fishing ports in NH, Portsmouth, Rye, and Hampton. Their ability to process fresh catch is extremely limited, so most of the commercial fishing is Mom & Pop operations. A few very small boats that sell their wares to local restaurants and markets.

    But there's the magic word...LOCAL. How the intelligencia fawn over that fucking word.

    Hampton has a single major commercial fishing pier that's on the verge of collapse due to lack of maintenance. This is due to the unwillingness to charge the industry the fees necessary to maintain it (which admittedly would bankrupt the industry, because it's so fucking tiny). So here is an area where SIV is right...they are looking to subsidize a multi-million reconstruction just so the rinky-dink fleet can keep operating.

    Because it's LOCAL. Boy to I hate the blind worshiping that word inspires.

  • Zeb||

    Worshiping local as a good in itself is indeed silly. But it sure is nice to get truly fresh seafood. But Maine and Mass are plenty local for that in NH.

  • Heroic Mulatto||

  • Ron Bailey||

    MP: The Science article is a bit more broad gauged so does not focus on that fishery. Some studies suggest that part of the reason that the Georges Bank fishery has been slow to recover is that overfishing produced a situation in which herring more successfully predate young cod. The result is that it could take as long as 25 years to get cod back to their earlier levels. For lobster lovers, there is good news - fewer cod mean more lobsters.

  • ||

    Thanks.

    That's about what I figured, and that's why I had a problem with your headline. Privatization may have been a solution if it had started 30 years ago. But it's not necessarily any better a solution than the quota system the government implemented over the last decade.

    And I hate the use of that word in this context anyhow. It's not Privatization. It's a government structured marketplace over a Commons area. It's an issue of regulation, not of markets.

    BTW...Lobster has been averaging 3.99/lb retail in these parts for at least 3 years. That industry is already half dead due to over-supply.

  • SIV||

    Typical. The government spends billions subsidizing over-fishing and then comes the "solution" of increased regulation and restriction of fishing rights. Libertarians then cheer closing of the commons.

  • ||

    government spends billions subsidizing over-fishing

    That's not what happened at all.

  • Ron Bailey||

    MP: Globally fishing subsidies amount around $27 billion per year, but in U.S. it's merely $700 million per year - about one-fifth the value of the entire catch.

  • ||

    Yes, but we're talking about New England, not Alaska and Hawaii. Here, the only subsidization is the payoff that the industry is going to get from the FEMA after being shutdown by NOAA.

  • SIV||

    How much did those subsidies contribute to the over-fishing of cod off New England?

    I seem to recall it played a large part in the collapse of the swordfishery.

  • robc||

    about one-fifth the value of the entire catch.

    Merely?

    I hope my sarcasm meter is broken, because 20% isnt mere.

  • SIV||

    I'd like to know how much the subsidies contribute to overfishing, particularly when it results in a collapse of a fishery. That doesn't seem to be easily searchable information (perhaps because it is unknown).

  • robc||

    About 20%, would be my guess. :)

    Figure out the S-D curve both with and without the subsidy, and subtract the difference in Q1 and Q2.

  • R C Dean||

    Libertarians then cheer closing of the commons.

    On what planet have libertarians ever been in favor of "the commons", which are defined by the absence of property rights?

  • SIV||

    The Natural Rights planet?

    The Rothbardian anarchist planet?

    I'll recognize your property rights to a shellfish farm,dredged shipping channel or an oil rig but not in some deed to space you've never occupied and aren't using that you bought in robc's ocean auction.

  • robc||

    It seems the easier solution is to sell the "land".

    Then the owners can determine how much fishing is to be done on the land.

  • Heroic Mulatto||

    Do to so would require overturning centuries of legal definitions and traditions concerning the Law of the Sea.

  • robc||

    Okay.

    And?

  • Heroic Mulatto||

    Good luck with that.

  • SIV||

    robc is just "progressive" when it comes to those old rights and traditions.

  • Death Rock and Skull||

    The "land" could just be the right to fish within the boundaries of an area, not necessarily prevent navigation or extraction of other resources that the fishermen are not interested in. Creating sea boundaries is easy as hell with GPS. You could even put monuments on the sea floor if you wanted to, for what reason I don't know.

  • ||

    Didn't they do that with pollock in Alaska?

  • robc||

    It wouldnt be done by breed.

    If I own this square mile of water, I can fish (or sublet some amount of fish or however I want to handle it) for whichever.

  • ||

    I wasn't asking how you would do it, I was remembering some History Channel special that said they had actually done this in Alaska but the special was entirely focused on pollock.

  • robc||

    You said "didnt they do that"

    that, referring to how I would do it.

  • SIV||

    Who owns this "land"?

    There is a long tradition of common rights (recently much-abused by governments)to the shore and sea.

  • robc||

    Yes there is. And, sometimes, you have to rethink those traditions and maybe do something different.

    The British Colonies in America had a long tradition of being rules by a king.

  • Heroic Mulatto||

    I'm not saying you're wrong, I'm just saying it ain't going to be easy.

  • iggy||

    I have no skin in this game and know shit all about the law of the sea, but SIV's entire argument seems to boil down to 'We've always done it this way, therefore we should continue doing it this way.' That doesn't seem like a very convincing argument.

  • SIV||

    Where do your rights come from?

  • SugarFree||

    The barrel of a gun.

  • robc||

    God.

  • ||

    Fuck you, that's where they come from.

  • Death Rock and Skull||

    Rights come from the way people naturally organized themselves to avoid having their shit fucked up.

  • SIV||

    I'll say both.

  • robc||

    I'm just saying it ain't going to be easy.

    I would have swore you werent brand new to libertarianism.

    Also, why does Rice play Texas?

  • SIV||

    The Monarch didn't own the sea.
    I'm not too eager to toss out traditions of rights and common law in favor of new-fangled central planning.

  • robc||

    Central Planning?

    Im suggesting that the sea immediately be auctioned off to individuals.

    Sure, I centrally planned auction, but beyond that, nope.

  • SIV||

    I only see bad outcomes. Sure small pieces are OK for mariculture or mineral extraction but what exactly are you selling? The water and wildlife move all around. You would only be selling the sea floor.Who is selling it? We currently all have a natural common right to the sea. I'm keeping mine, thank you.

  • Death Rock and Skull||

    On land, people don't own wildlife unless it moves on to their property.

  • Raston Bot||

    http://blogs.seattleweekly.com.....wers_r.php

    Washington shellfish growers are aghast at the federal closure of a Point Reyes oyster farm which supplies 40 percent of the oysters consumed in California, describing the decision as a rebuke of economic growth and accepted environmental science.

    Typical enviro-crazy nonsense.

  • iggy||

    'Not every conservationist backs shellfish farming: The San Francisco Chronicle quoted Sylvia Earle, a former NOAA chief scientist as saying, "Protecting Drakes Estero, America's only West Coast marine wilderness park, will restore health and hope for the ocean."'

    Who cares about your jobs, the economy and food production? We have marine wilderness parks to think of! I also like the use of the word 'hope' for the ocean. I'm not sure how delusional you have to be to personify a massive body of water.

  • Raston Bot||

    Also, a single shellfish can filter gallons of water per day. Sylvia Earle is one batshit crazy chief scientist.

  • DaveSs||

    So uh, how does one join the elite list of approve fishermen.

    Kinda sounds like the NY Taxi medallion scam.

  • Gordilocks||

    After the cod fishery collapsed in Newfoundland in the 90's, people started moving west in search of work.
    Now, most of the oil sands development in Alberta is being fuelled by Newfie labour, everyone is making a killing, and fishing for cod is not really something anyone is looking forward to for some time, if ever at all.

    North Dakota is experiencing a massive energy boom - why the hand wringing? Park your boats and head west, folks. Maybe by the time the oil runs out, the cod will have come back.

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