Does ‘race to fish’ behaviour emerge in an individual transferable quota fishery when the total allowable catch becomes non‐binding?

Abstract

Successful individual transferable quota (ITQ) management requires a binding (constraining) total allowable catch (TAC). A non‐binding TAC may result in a shift back towards open access conditions, where fishers increasingly compete (‘race’) to catch their share of the total harvest. This process was examined by comparing fishing fleet behaviour and profitability in the Tasmanian southern rock lobster (Jasus edwardsii) fishery (TSRLF), Australia. Between 2008 and 2010, the TSRLF had a non‐binding TAC and effectively reverted to a regulated, limited‐entry fishery. Fishers' uncertainty about future profitability and their ability to take their allocated catch weakened the security characteristic of the ITQ allocation. The low quota lease price contributed to an increase in fleet capacity, while the more limited reduction in quota asset value proved an investment barrier, hindering the autonomous adjustment of quota towards the most efficient fishers. In the TSRLF, catch rates vary more than beach price and are therefore more important for determining daily revenue (i.e., price x catch rate) than market price. Consequently, fishers concentrated effort during times of higher catch rates rather than high market demand. This increased rent dissipation as fishers engaged in competitive race to fish to be the first to exploit the stock and obtain higher catch rates. The history of this fishery emphasizes the need for a constraining TAC in all ITQ fisheries, not only for stock management, but also to manage the security of the ITQ allocation and prevent unanticipated and undesirable changes in fisher behaviour and fishery profitability.

Moving beyond panaceas in fisheries governance

“…Evidence for the social costs of power disconnects associated with ITQs is extensive, but bioeconomic benefits have also been diluted as powerful quota-holders lobby to raise catch limits above scientifically recommended levels to maintain the "value" of their quota (18,(91)(92)(93). Ecologically, locked-in ITQs are ill-suited to handling the nonlinearities and interconnections occurring in dynamic marine systems.…”

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

“…This observation reinforces the need to approach the problem of fisheries capacity management as an issue at the sectorial or multi-fishery, rather than single fishery, level (Holland 1999) and makes the question of how best to manage existing capacity in such fisheries to meet economic, social, and environmental goals as they transition to regulated fisheries, of central importance. Furthermore, the importance of designing effective capacity management policies goes beyond the case of the fishery where fishing regulations are either absent or ineffective, as incentives to compete in harvesting and investment among fishers is evident in fisheries under a range of regulatory regimes, including individual transferable quotas (Costello and Deacon 2007;Emery et al 2014).…”

“…While such behavior can persist in regulated fisheries (Homans and Wilen 1997) and under a range of property institutions, including rights-based regimes (Costello and Deacon 2007;Asche et al 2008;Emery et al 2014), the twin problems of race to fish and race to invest behavior are most pervasive in fisheries where access is unrestricted and fishing regulations are ineffective. In the fishery literature, overcapacity and excess capacity are defined as separate concepts and treated as different issues.…”

Profit and equity trade‐offs in the management of small pelagic fisheries: the case of the Japanese sardine fishery*

“…The effectiveness of TAC systems generally depends on whether: (i) the actual catch in the fishery does not exceed the TAC; and (ii) the TAC is binding or close to binding (Grafton et al ; Kompas and Gooday ). When the TAC is non‐binding, the fishery’s yield or effort is, in effect, not constrained by the TAC (Emery et al ; Rust et al ). The TAC for the Japanese sardine has not been binding in any year since the management system was introduced to the fishery (FA ).…”