Category Archives: property rights

An Environmental Success: Property Rights to Fisheries

It seems to a couple of other issue arise:

Effectively you’ve set a quote on catch. Is there a risk of regulatory capture resulting in the limit being set below what the fishery could sustain, in order to boost the price above the marginal cost of capture. In other words can’t these mechanism be a way to enforce price collusion?

Can the fishermen exchange the ‘right’ to catch. That would be more efficient in that fishermen who can capture fish at the lowest cost would buy rights from less efficient fishermen lower the social cost of fish.

An Environmental Success: Property Rights to Fisheries

via Donald Marron

by Donald Marron on 1/25/13

Creating property rights has helped protect fisheries while making the fishing industry more efficient, according to a nice blog post by Eric Pooley of the Environmental Defense Fund

(ht: Dick Thaler

). Writing at the Harvard Business Review, Pooley notes the success of the ”catch share” approach to fisheries management:

The Gulf of Mexico red snapper fishery, for example, was on the brink of collapse in the early part of the last decade. Fishermen were limited to 52-day seasons that were getting shorter every year. The shortened seasons, an attempt to counter overfishing, hurt fishermen economically and created unsafe “derbies” that often forced them to race into storms like the boats in The Deadliest Catch.

This short window also meant that all of the red snapper were being caught and brought to market at the same time, creating a glut that crashed prices. Many fishermen couldn’t even cover the cost of their trip to sea after selling their fish.

A decade ago, the Environmental Defense Fund began working with a group of commercial red snapper fishermen on a new and better way of doing business. Together, we set out to propose a catch share management system for snapper.

Simply put, fishermen would be allocated shares based on their catch history (the average amount of fish in pounds they landed each year) of the scientifically determined amount of fish allowed for catch each year (the catch limit). Fishermen could then fish within their shares, or quota, all year long, giving them the flexibility they needed to run their businesses.

This meant no more fishing in dangerously bad weather and no more market gluts. For the consumer, it meant fresh red snapper all year long.

After five years of catch share management, the Gulf of Mexico red snapper fishery is growing because fishermen are staying within the scientific limits. Boats that once suffered from ever-shortening seasons have seen a 60% increase in the amount of fish they are allowed to catch. Having a percentage share of the fishery means fishermen have a built-in incentive to husband the resource, so it will continue to grow.