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Report Fishery Economics Nov 2003

Report from the Fisheries Economics Course
Held in Auckland 20th & 21st November 2003
Prepared by Trish Rea

for option4 and the NZ Big Game Fishing Council (NZBGFC)

Venue: Auckland University , 1 Short St , Auckland .
Presenter: Basil Sharp
Subject: Fisheries Economics
Attendance: 10
MFish policy division Wellington (1), Sanford Ltd (1), Ngai Tahu Seafood (1), Endurance Fishing
Ltd (2), Cawthron Institute (1), Fine Food Brokers (2), Iwi rep (1), option4 (1).

An overview of pre-European fisheries management was provided. William Firth has written a book suggesting a form of property rights existed in the pre – European system. The history of unsustainable fisheries management was discussed in more detail including subsidies, the impact on the fish stocks and foreign fishers within our coastal zone from the 1960's through to 1985. During the introduction of the QMS the government sought to push part-time fishers out of the system by setting a minimum income level from fisheries activity. All those who did not pass the threshold were not considered for the issuing of ITQ's. Some fishers surrendered their harvest and were compensated to leave the industry. The government paid out $42M in two tender rounds to buy back harvest. Recreational and Maori interests were put in the “ too hard basket” during the establishment of the QMS due to the difficulty in accommodating those interests in a commercial model.

Property Rights
Being a fisheries economics course the major focus was on property rights and the value of those rights. The constraints on economic development due to the unregulated nature of the public harvest were discussed in more detail. From an economic perspective it is more valuable to have fully tradeable rights in the entire fishery and let the market determine the value. The Coase Model is used by economists to work out the most efficient use of tradeable rights in any given situation. There was some discussion around the value in having licensing to pay for quota so the recreational sector could harvest fish. The commercial representatives clearly resent having to pay for research and management of the fishery when they perceive the public being managed by the government at no cost to the harvester.

Non – Market Values
The 1999 survey by the South Australian Centre for Economic Studies (REC9801) is the only formal measure of the value of recreational fishing that has been conducted in New Zealand . Non – market values are very hard to quantify and have not been adequately measured in relation to recreational interests in the fishery. Interesting to note that courts in the UK and US are now recognising non – market values in cases (particularly environmental) being decided. These values have not been tested through our court system yet.

The three options in Soundings were reviewed along with option4's principles. The increasing, unconstrained recreational take was concerning to the commercial representatives as it is obviously in competition with their interests. Fisher prevalence figures presented by Basil were outdated, his information showed 400,000 fishers nationwide. We agreed that most of the effort is concentrated in the top half of the North Island .

Industry were keen to know where option4 got the mandate to speak on behalf of the public considering the lack of fishers belonging to fishing clubs. It was explained that option4 do not have members but as a result of Soundings we have option4, NZRFC, NZGBFC and NZACA working together in talking with the public.

Allocation of Shares
Mention was made that there was no priority in the allocation process in regards to shares in the fishery. It was explained that the process involved in setting TACC's did in fact demonstrate preference to non – commercial interests. Neither the commercial representatives nor the MFish rep made any comment on this subject.

Bycatch is a concern for many commercial fishers. They felt the system restricted their ability to catch their quota or limited their profitability by not being able to purchase enough ACE to cover their bycatch species.

Aquaculture is increasing along with competition for coastal space. Discussion focussed on the competing rights of ITQ holders, recreational and aquacultural harvesters. The complex nature of the current foreshore and seabed issue, the Oceans policy development and the impact of coastal farming in overseas countries were covered. Until some of the issues are decided at a national level Regional Councils will struggle to meet the increasing demand for coastal waters.

A very interesting two-day course. The opportunity to listen to the commercial fisher's perspective was of value. Information covered in the course was provided to all in attendance. With the focus on economics, overseas trade and tariffs it is not a course that would interest most recreational fishers. Some of the data presented was well out of date and would need to be updated to be of any real use for future reference.


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