Profitability, Capacity and Productivity Trends in an Evolving Rights Based Fishery: The Norwegian Purse Seine Fishery
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Profitability, Capacity and Productivity Trends in an Evolving Rights Based Fishery: The Norwegian Purse Seine Fishery Nils‑Arne Ekerhovd1 · Daniel V. Gordon2,3 Accepted: 20 August 2020 © Springer Nature B.V. 2020
Abstract Regulators in many countries have adopted individual quotas as a means of dealing with the open access problem inherent in fisheries. The Norwegian Purse Seine fishery has evolved over the last 40 years from an open access fishery to a Rights Based management system with individual vessel catch quotas assigned to all major fish species. Regulations do allow for merging vessel quota. The purpose of this paper is to employ an index approach to decompose vessel revenues and costs by factor components. The index approach can measure the importance of prices, output and regulatory changes impacting productivity and provides insight into changes in a mature IVQ fishery. The current study uses a large individual vessel data set for the period 1994–2013. Results show that over time output prices have been the main drivers associated with increased revenues. We correlate output prices with an evolving IVQ fishery, and changes in harvest and demand conditions. Ongoing capital investment, not offset by increased harvest, has seen productivity decline in the early periods of the study but some recovery towards the end of the period. Keywords Rights Based fisheries (IVQ) · Prices · Productivity · Revenue-cost decomposition · Törnqvist index
* Daniel V. Gordon [email protected] Nils‑Arne Ekerhovd [email protected] 1
SNF-Centre for Applied Research at NHH, Bergen, Norway
2
Department of Economics, University of Calgary, 2500 University Dr. NW, Calgary, AB T2N1N4, Canada
3
Department of Safety, Economics and Planning, University of Stavanger, Stavanger, Norway
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N.-A. Ekerhovd, D. V. Gordon
1 Introduction Regulators in many countries have adopted Rights Based fisheries management as a means of addressing the problem of open access and excess capacity1 inherent in common property fisheries. Rights Based fisheries management holds the potential of improved efficiency, productivity and profitability (Arnason et al. 2008).2 Numerous theoretical economic papers have developed the structural foundation and defined the possibilities for capturing rent and improving the production process within a Rights Based management system (Dupont and Grafton 2001; Homans and Wilen 2005; Arnason 2011; World Bank 2017; World Bank and FAO 2009; Arnason et al. 2018). Success of the new strategy depends on setting biologically sustainable total catch levels (TAC), internalizing externalities associated with open access and allowing market incentives to guide access, timing and quality of catch. A critical mass of empirical work is coming together to support theoretical pronouncements by measuring higher prices, improved quality of catch, reduced fishing effort, improved productivity and greater profitability secured with the introduction of a Rights Based management system (Geen and Naya
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