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Sea Change: How Markets and Property Rights Could Transform the Fishing Industry

Sea Change: How Markets and Property Rights Could Transform the Fishing Industry

Richard Wellings | Philip Booth | Paul Dragos Aligica | H. Sterling Burnett | Birgir Runolfsson | Ion Sterpan | Rachel Tingle


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Government management of fisheries has been little short of disastrous. In many regions, valuable fish stocks have collapsed as a result of overfishing. Ill-conceived regulation also means that every year millions of tons of edible fish are thrown back dead into the sea. While an absence of established property rights means that wild fish are vulnerable to overfishing, the problem is greatly exacerbated by large subsidies. State intervention has created significant overcapacity in the industry and undermined the economic feedback mechanisms that help to protect stocks. This short book sets out a range of policy options to improve outcomes. As well as ending counterproductive subsidies, these include community-based management of coastal zones and the introduction of individual transferable quotas. The analysis is particularly relevant to the UK as it begins the process of withdrawal from the European Union. After decades of mismanagement under the Common Fisheries Policy, Brexit represents a major opportunity to adopt an economically rational approach that benefits the fishing industry, taxpayers and consumers.

Table of Contents

Section Title Page Action Price
_GoBack xi
The authors ix
Foreword xii
Summary xvi
Tables and figures xix
1\tIntroduction 1
Richard Wellings 1
Global fish stocks 2
The tragedy of the commons 6
How market mechanisms protect fisheries 9
Cutting off the invisible hand 12
Fishing for favours 14
The tragedy of state regulation 15
Property rights approaches 18
Conclusions 21
References 23
2\tSubsidising decline: government intervention in the fishing industry 26
H. Sterling Burnett 26
Why have the fisheries declined? 28
Government policies encourage unsustainable harvests 29
Subsidies: what kind and how much? 31
Misguided government responses to the fisheries decline 34
Current policies harm commercial fishing operators 38
Acting to reverse fisheries decline 39
End subsidies and tax breaks 42
Replace the current regulatory system with a system of property rights 43
Encourage other countries to cut subsidies and adopt similar property-based fisheries policies 45
References 49
3\tThe European Common Fisheries Policy 52
Rachel Tingle 52
1957–69: The conception and early development of the CFP 55
1970–82: The establishment of common Community waters 57
1983–92: The development of a fisheries management system 64
1993–2002: The introduction of vessel licensing and effort controls 70
2003–13: Reform of the CFP 72
2014 Onwards: last chance for the CFP? 79
Appendix: UK system for apportioning national fishing quotas 88
References 91
4\tGoverning the fisheries: insights from Elinor Ostrom’s work 95
Paul Dragos Aligica and Ion Sterpan 95
Introduction 95
Public choice and voluntary action 97
The approach 98
Governance regimes 100
Performance criteria 102
Co-management and the commons 104
Government interference and failure 105
A case of fragile institutions: the Nova Scotian inshore fisheries 107
A case of robust institutions: the Maine lobster industry 110
Conclusions 113
References 114
5\tRights-based ocean fishing in Iceland 117
Birgir Runolfsson 117
The fisheries problem 118
Creating rights to fishing 120
Criticism and concerns about an ITQ system 123
ITQs in practice 128
Conclusion 139
References 140
About the IEA 144
Table 1\tLandings of fish into the UK by UK and foreign vessels, 1938–2014 (thousand tonnes) 83
Figure 1\tGlobal fish catch, 1950–2013 (wild capture) 4
Figure 2\tGlobal fish production from aquaculture, 1950–2013 5
Figure 3\tExclusive Economic Zones around the British Isles 63
Figure 4\tProfits in the Icelandic fisheries industry, 1980–2012 138