BY AND LARGE, it was a disappointment. The long-awaited report of the U.S. Commission on Ocean Policy, issued in April, mostly repeats familiar themes–the need for more research on the resources of the sea, more regulations to protect them, more bureaucracy to implement the regulations, and of course more government spending. But the 500-page tome does not champion a remedy that could end the crisis unfolding before our eyes, the depletion of our fish stocks. It does not fully appreciate that our ocean resources are undergoing what economists call the tragedy of the commons–too many people exploiting a common resource–and that the solution is some semblance of private property rights.
The overfishing problem is well documented. “Thirty percent of the fish populations that have been assessed are overfished or are being fished unsustainably,” warned the private Pew Oceans Commission in June 2003. Cod and other groundfish off New England were once so abundant that Basque fishermen made the heroic trek across the Atlantic, yet today, their stocks are near historic lows, and since 1994 taxpayers have spent more than $80 million to assist New England fishermen. Alaska crab, which once made fortunes for the hardy souls willing to face icy waters, are so overfished in some areas that a $100 million buyout has been proposed to reduce bloated fishing fleets. Like the presidential commission, the Marine Fish Conservation Network, a consortium of over 150 national and local environmental groups and fishing groups from both coasts, is sounding the alarm.
Sadly, none of this is likely to arrest the depletion. Calls for fine-tuning the existing regulatory system are futile. Every one of the hundreds of “coastal federal fisheries” in U.S. waters is already managed by a fishery management council, typically composed of fishermen, state and federal regulators, and others presumably eager to protect fish stocks. This hasn’t stopped the depletion, and it’s no secret why.
Government regulation attempts to prevent overfishing by limiting when, where, and how one may fish. To do this, fishery managers set a commercial harvest limit, a number they think will keep the stock from being depleted. To prevent the catch from exceeding this limit, they cut back the season, and/or reduce the size of the area to be fished, and/or limit the size of boats (since bigger ones could bring home too many fish).
Fishermen react in ways that are rational but destructive. After all, they have bills to pay. They buy faster, high-technology boats that can catch as many fish in less time, even in a smaller area. The result is a wild race for fish. Boats go out whatever the weather (as in the movie The Perfect Storm), resulting in accidents, lost boats, tangled gear, and wasted catch. Short seasons also mean that customers must eat processed or frozen fish most of the year, while fishermen’s revenues go down.
Yet a solution to overfishing is not hard to find. Individual fishing quotas (IFQs) have been successful in numerous countries, including New Zealand and Iceland, parts of Australia, a growing number of fisheries in Canada, and even in four fisheries in the United States.
With IFQs, the dynamics change. An IFQ represents a percentage of the total allowable catch set each year by fishery managers. It is a transferable right to obtain a specific quantity of fish. If the total allowable catch for South Atlantic wreckfish is 7,400,000 pounds a year, a fisherman with a 0.1 percent quota share would have an IFQ of 7,400 pounds. A fisherman who wants to catch more or less than this amount can buy or sell portions of his IFQ. He can even sell the entire quota share and leave the industry.
With IFQs, it ceases to be necessary to shorten the season to limit the catch. Each fisherman can fish at his own pace, going out in good weather and protecting the quality of the catch until he returns to shore. The hectic race for fish disappears.
In Alaska before IFQs, the halibut season was just two or three days a year, and fishermen were hammered by low prices because of the glut when the boats came in. Fishing was hazardous. Lost or abandoned gear and incomplete processing on vessels wasted halibut–a loss estimated in 1990 to be worth at least $3.2 million. And environmental goals were rarely met–the actual catch often exceeded the total allowable catch.
After IFQs were adopted in 1995, Alaska’s halibut season grew to 245 days a year. Fishermen now receive higher prices because they can deliver fresh halibut through much of the year. Less gear is lost, fishing is safer, and harvests no longer exceed the allowable limit.
But the potential of IFQs has yet to be realized in most U.S. fisheries. The first IFQs led to protests by special interests, resulting in a moratorium on IFQs from 1996 through October 1, 2002. Major opposition came from fish-processing companies. Faced with two- and three-day seasons, some halibut processors had invested in giant refrigeration units to process the tons of fish that were dumped on them all at once. Processors enjoyed power over the fishermen, who had to find markets for their catch in just a few days. These processors complained of losing their capital investments and market position.
The moratorium in the United States has ended, but IFQs still face an uphill political battle. Last fall, processors in Alaska and the state of Washington found a champion in Alaska senator Ted Stevens. As head of the Senate Appropriations Committee, he exacted a high price for allowing crabbers in Alaska waters to adopt IFQs: His appropriations bill rider requires Alaska crabbers who use IFQs to sell 90 percent of their catch to specific processors–as few as eight processors in one crabbing area. Even though the Justice Department raised antitrust questions about the proposal, the bill carrying Stevens’s rider sailed through. It sets a bad precedent for other fisheries.
Free market organizations such as PERC and the Reason Foundation favor IFQs, but so far only one traditional environmental organization has endorsed them: A senior economist at Environmental Defense, Peter Emerson, calls IFQs “the only rational way to manage this resource.” The Marine Fish Conservation Network, suspicious of property rights, supports only a tentative and watered-down version of IFQs that would leave fishermen little long-term stake in the health of fish stocks.
Even so, IFQs have the potential for broad bipartisan support. The Bush administration favors them, and Senators John Kerry and Olympia Snowe sponsored a bill that would allow their use. Another supporter–Rep. Wayne Gilchrest, chairman of the Subcommittee on Fisheries Conservation, Wildlife, and Oceans–will be working to incorporate them in the reauthorization of the Magnuson-Stevens Fisheries Conservation and Management Act later this year, a hopeful sign that a cure for overfishing may be in sight.
Donald R. Leal and Jane S. Shaw are senior associates of PERC, the Property and Environment Research Center in Bozeman, Montana. Leal is editor of Evolving Property Rights in Marine Fisheries (forthcoming from Rowman and Littlefield).
