Managing Fleet Capacity Effectively Under Second-Hand Market Redistribution

Abstract

Fishing capacity management policies have been traditionally implemented at national level with national targets for capacity reduction. More recently, capacity management policies have increasingly targeted specific fisheries. French fisheries spatially vary along the French coastline and are associated to specific regions. Capacity management policies, however, ignore the capital mobility associated with second-hand vessel trade between regions. This is not an issue for national policies but could limit the effectiveness of regional capacity management policies. A gravity model and a random-effect Poisson regression model are used to analyze the determinants and spatial extent of the second-hand market in France. This study is based on panel data from the French Atlantic Ocean between 1992 and 2009. The trade flows between trading partners is found to increase with their sizes and to be spatially concentrated. Despite the low trade flows between regions, a net impact analysis shows that fishing capacity is redistributed by the second-hand market to regions on the Channel and Aquitaine from central regions. National capacity management policies (constructions/destructions) have induced a net decrease in regional fleet capacity with varying magnitude across regions. Unless there is a change of policy instruments or their scale of implementation, the operation of the second-hand market decreases the effectiveness of regional capacity management policies in regions on the Channel and Aquitaine.

A comparative review of fisheries management experiences in the European Union and in other countries worldwide: Iceland, Australia, and New Zealand

“…Public‐aided fleet capacity reduction schemes have also been an important conservation instrument of the CFP in both the northeast Atlantic and the Mediterranean (Hatcher ; Quillerou et al . ; Aranda and Murillas ).…”

“…In the northeast Atlantic, the ranges of minimum mesh sizes (e.g., 70-120 mm for demersal otter trawlers) are higher than that operated in the Mediterranean (e.g., 20-40 mm for trawlers). Public-aided fleet capacity reduction schemes have also been an important conservation instrument of the CFP in both the northeast Atlantic and the Mediterranean (Hatcher 2000;Quillerou et al 2013;Aranda and Murillas 2015).…”

Characterising investments in EU fisheries and defining their desirability

“…This is especially true if no profitable alternative fisheries are available, because fishers have paid a high entry fixed (sunk) cost, equal to the vessel value (Dixit, 1989; Ward and Sutinen, 1994; Ikiara and Odink, 1999). In addition, high switching costs when changing fisheries tend to limit capacity reallocation and fishers tend to stay within the same fishery over time (Bockstael and Opaluch, 1983; Opaluch and Bockstael, 1984; Quillérou et al, 2013)4 . Nevertheless, the degree of (non-)malleability of physical capital varies significantly from fishery to fishery.…”