Benefits and risks of diversification for individual fishers

Abstract

Individuals relying on natural resource extraction for their livelihood face high income variability driven by a mix of environmental, biological, management, and economic factors. Key to managing these industries is identifying how regulatory actions and individual behavior affect income variability, financial risk, and, by extension, the economic stability and the sustainable use of natural resources. In commercial fisheries, communities and vessels fishing a greater diversity of species have less revenue variability than those fishing fewer species. However, it is unclear whether these benefits extend to the actions of individual fishers and how year-to-year changes in diversification affect revenue and revenue variability. Here, we evaluate two axes by which fishers in Alaska can diversify fishing activities. We show that, despite increasing specialization over the last 30 years, fishing a set of permits with higher species diversity reduces individual revenue variability, and fishing an additional permit is associated with higher revenue and lower variability. However, increasing species diversity within the constraints of existing permits has a fishery-dependent effect on revenue and is usually (87% probability) associated with increased revenue uncertainty the following year. Our results demonstrate that the most effective option for individuals to decrease revenue variability is to participate in additional or more diverse fisheries. However, this option is expensive, often limited by regulations such as catch share programs, and consequently unavailable to many individuals. With increasing climatic variability, it will be particularly important that individuals relying on natural resources for their livelihood have effective strategies to reduce financial risk. diversity-stability relationship | Bayesian variance function regression | income variability | natural resource management | ecological portfolio effects I t can be difficult for individuals to sustain a livelihood from natural resource extraction. These livelihoods tend to have high annual variability in income relative to other professions (1, 2). In addition to income variability from economic sources, such as changes in demand or prices, individuals dependent on natural resources are also subject to biological and environmental variability (3). For example, drought and flooding are a major source of risk for agricultural food security and farmers' incomes (4), and catastrophic disease outbreaks and wildfires increase risk for the logging industry (5).Individuals who rely on natural resources for income develop strategies to reduce income variability. For example, farmers may diversify their crops or include off-farm income sources to buffer against environmental and market shocks, as well as longterm climatic trends and seasonality (6-8). However, otherwise well-intentioned regulations may limit how individuals diversify, or may incentivize against diversification. For instance, crop subsidies in the United States may incentivize some farms ...

Catch diversification provides multiple benefits in inland fisheries

“…However, a higher catch does not always guarantee more benefits for the following reasons. First, maximizing catch by targeting one or a few species (i.e., specialization) can pose long‐term risks if environmental and market conditions change rapidly and unexpectedly (Anderson et al., ; Dee et al., ; Ward et al., ). For example, Alaskan fishing communities that had high catch diversity or were able to opportunistically shift the species composition of their catch experienced small or negligible changes in revenue following major ocean and market regime shifts that occurred in 1989 (Cline et al., ).…”

“…Our findings underscore the potential need to implement catch diversification strategies in lake fishery management. However, as discussed in previous studies (Anderson et al., ; Cline et al., ), there are at last two key steps that must be taken to implement catch diversification strategies in Japanese fisheries.…”

“…Both crop diversification (i.e., mixed planting or crop rotation) and catch diversification (i.e., catching multiple fisheries species) have been touted as a means to maintain yields and revenue in agroecosystems and fisheries despite large and abrupt changes in environmental and market conditions (Anderson et al., ; Binder, Isbell, Polasky, Catford, & Tilman, ; Holland et al., ; Isbell, ; Isbell, Adler, et al., ). Therefore, there is considerable interest in designing and developing diversification strategies for these systems.…”

“…Commercial capture fisheries are especially vulnerable to abrupt environmental perturbations and unexpected shifts in market conditions (Anderson et al., ; Cline, Schindler, & Hilborn, ; Holland et al., ). There is a critical need to explore resilient management strategies that are robust to uncertainties and regime shifts in fisheries resources and markets.…”

“…Creating and maintaining flexibility in fishing opportunities could be one mechanism to make the benefits derived from exploitation of fish stocks more resilient to perturbation (Cline et al., ). In addition, catch diversity has been reported to stabilize total catch or revenue through portfolio effects (PEs; i.e., the statistical averaging of multiple species or populations) and asynchrony (Anderson et al., ; Nesbitt & Moore, ; Ward et al., ). The biodiversity–ecosystem functioning framework may help elucidate the mechanisms responsible for this enhanced stability.…”