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| Fisheries with a gross value of production of less than $4 million. | ||
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Eleven fisheries managed by the Commonwealth were worth less than $4 million in 2006-07, of which nine were worth less than $2 million. Management of these fisheries is challenging as many management arrangements applied to large fisheries are not suitable for smaller fisheries. A key difficulty that managers face in managing small fisheries is making decisions based on very little information. Managers need to consider how much information various management regimes require, and whether or not the cost of collecting sufficient data is likely to outweigh the potential benefits. Ongoing administrative and enforcement costs also differ between management arrangements. Sometimes, the possible net economic returns of a fishery will not justify the simplest form of management. In these cases, closing the fishery may be appropriate, at least from an economic efficiency perspective. All fisheries are small at some stage in their development, and estimating whether the future net economic returns of an exploratory fishery justify three or four years’ worth of management costs can be difficult. However, there are some general principles which can be used as a starting point in cases where the marginal benefits and costs are difficult to quantify.  In the report issued by the Commonwealth of Australia (1989) and in the Australian Government policy review (DAFF 2003), ITQs are advocated as the ‘preferred management approach for Commonwealth fisheries resources’. Their practicality should be examined before other management controls are considered. The fishery manager should implement a management regime which can deal with increased interest in the fishery. Profitability and participation are affected by many variables, including changes in fish prices, exchange rates and the development of new fishing technologies. Changes to management arrangements in one fishery can also cause effort to be redirected to other fisheries. While input controls might appear to be protecting a fish stock when only a handful of operators are fishing, significant increases in participation can put a fish stock at risk of collapse. A conservative TAC will ensure effort cannot be increased in the fishery without the intervention of the management authority. A conservative TAC can always be increased if the need arises. Managers and industry should bear in mind management costs are likely to be higher in a fishery that is fished heavily, other things being equal. Harvesting relatively large shares of the stock in each period may induce high research costs to ensure sustainability, and the development of new restrictions to protect the environment generally. If management costs seem not to be justified based on the net economic returns being generated and it is not possible to close a fishery, then management should implement a regime which ensures stock sustainability and minimises the cost of management. An ITQ system can have significant fixed costs, including compliance and enforcement costs, and administrative costs associated with issuing quota and keeping track of transfers, as well as reconciling each fisher’s catch to their quota. Input controls avoid the relatively high fixed costs of an ITQ system. However, they have costs of their own, including having to update controls regularly to prevent effort creep. On the other hand, if there is an input to the fishery which is hard to substitute for another, it may form the basis for an efficient input control. Of course, the Commonwealth’s small fisheries already have management arrangements in place, and for historical reasons many have very high levels of latent effort. Perhaps the only way the AFMA can demonstrate that it is pursuing the goal of maximising net economic returns in these fisheries is to actively reduce latent effort. This means setting TACs which restrict effort, adopting effective input controls which limit effort, or reducing the number of permits issued. A more detailed discussion of the economic issues associated with managing small fisheries is presented in Galeano, Love and Gooday (2005). |
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Small fisheries |
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