Fishing Quota Management System Needs Reform

Fishing Quota Management System Needs Reform

Gareth MorganFisheries Management24 Comments

A report released on Friday suggests that the Ministry of Primary Industries (MPI) was wrong not to prosecute five inshore fishing vessels that were filmed dumping fish during a trial of video technology. In the debate over whether to prosecute, an internal email suggested that if MPI cracked down on this problem it would put half the fishing operators out of business.

Of course Greenpeace recreational fishing lobby group Legasea claim that MPI is captured, but the issues are far more complex than that. Fish dumping is a problem all around the world, and different ways of managing fish stocks inevitably create different problems.

However, there are some tweaks that could be made to the Quota Management System to reduce fish dumping without putting inshore fishing operators out of business. We have to make sure that fishing quota owners are responsible for the actions of the people doing the fishing.

Why Dump Fish?

In our work on the fishing book Hook Line and Blinkers we looked at a lot of fishing systems around the world. As soon as any country tries to limit the amount of fish caught to preserve fish stocks, it creates an incentive to dump fish. By placing a limit on the quantity of fish, the only way for fishers to earn more money is by improving the quality of fish they catch. That means chucking back the cheap stuff so you can catch more of the good stuff. It can also be difficult to catch exactly the fish you are allowed to catch – if you catch fish you shouldn’t catch the temptation is often to throw them back and keep fishing for the ones you are allowed to catch.

New Zealand’s Quota Management System tries to take care of this problem by allowing the fishers to land a few extra fish, and sell them. The more fish you land over your limit, the higher the penalty you pay for that fish. The aim is to allow fishers a little room to move, but of course it doesn’t remove the incentive to dump fish altogether.

Cameras on board

MPI have touted technology as the answer. They will put GPS and cameras on all fishing vessels, to allow random monitoring of their actions and ensure there is no dumping. Greenpeace has pointed out that the contract to monitor the cameras has been won by a company that is owned by the fishing industry, so it is unclear how seriously MPI are taking the issue.

Regardless of this, as MPI points out cameras alone will not fix this problem without putting fishers out of business. The cause of the problem runs much deeper, and we can’t necessarily blame the people catching the fish.

The real problem – the Quota Management System

The MPI internal email noted that about half inshore operators going out of business if the rules were enforced may have been an exaggeration, but the basic point is correct. This issue reveals a weakness in the way the Quota Management System works.

The idea of the Quota Management System was that by giving fishers a right to catch a proportion of the fish stock forever, they would have an incentive to look after that fish stock. This is the basic idea behind most property rights, and it generally works, but there are two major flaws in the current set up for fishing.

Firstly, the people who own the quota don’t always do the fishing. Often they do, but sometimes they rent out their quota to other people who can do the fishing more cheaply. Offshore this tends to be foreign charter vessels (who now operate under our labour laws at least), and inshore it tends to be smaller local operators. In both cases the only people making real money are the quota owners; they have the power so they squeeze as much profit from renting out their quota as they can. The fishers renting the quota have to work very hard to make their money. That can often mean cutting corners – for example by dumping fish.

Secondly, there is still competition for inshore fish stocks with recreational fishers. This means that the commercial operators don’t really have any incentive to look after the fish stocks – after all if there are more fish in the water they might just get snapped up by the recreational folks.

These two issues are the real drivers behind the fish-dumping problem. Cameras might pick up the worst offenders but, as MPI says, if the rules are strictly enforced many of the fishers renting quota will indeed go out of business. Is that what we want?

Reform of the Quota Management System is needed

If we are serious about reducing dumping, change is needed. The first issue can be resolved by ensuring that all quota owners have to either own the boat doing the fishing, or be responsible for any infringements made in the process of catching their quota. The second issue requires bringing recreational fishers into the Quota Management System; if they want to catch more fish for example they would need to buy it off commercial operators. This would be possible with a moderate license fee for recreational fishers.

The changes suggested above should reduce fish dumping, without putting local inshore fishers out of business. The problem is that the first idea would hit the profits of the quota owners, and the second would be politically unpopular. The Quota Management System is currently being reviewed, but it is being led by MPI so we probably can’t expect the sort of fundamental changes recommended above.

Changes are needed, but don’t hold your breath.

Fishing Quota Management System Needs Reform was last modified: September 20th, 2016 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.

24 Comments on “Fishing Quota Management System Needs Reform”

  1. the other issue with a licence for recreational fishers is that it could be tough to enforce. That doesnt mean it shouldnt be done but will make it far less effective

  2. a big cause of dumping could be that a fisherman often has quota for 1 type of fish only. if he pulls up a mix of types of fish then the incentive is to dump all other fish.
    the idea that the quota owner should be the fisherman is a very good one
    i would not want to get a licence to go out and get a couple of fish to eat today.

  3. Let’s not throw out the baby here. The problem with dumping seems to be in the trawling sector, however the issue may not be any more widespread than the odd farmer allowing his cows in the creek. Developing technology (precision harvesting system) promises much more selective fishing and better quality product with the ability to return unwanted fish unharmed so the incentive to dump fish may soon disappear.
    If a quota owner is required to own the means of production, why not be consistent and prevent farmland and factories from being rented to others who can’t afford the capital setup cost?
    Ah I see, nationalise the assets so the cost comes down. That might be politically tricky too.

  4. With regard to managing the recreational fishing sector, many participants believe that the only management required is to remove the commercial sector. This is obviously naïve as in many popular recreational areas the recreational take far outweighs that of commercial, and is growing.
    I have a friend; an obsessive recreational fisher who is adamant that he should not pay a licence fee. He is currently in Alaska and is somehow happy to abide by their rules, paying the daily fee, severely limiting daily take and putting back fish too big. If the Rec lobby is correct an annual fee in NZ equal to the daily fee in Alaska would raise something like 20 million a year and start to contribute to a better recreational fishery. Its the only political issue to overcome.

    1. Correct! Suggest you recommend to your friend to check out Fish4all – would he at least consider reporting his catch?

  5. MPI has always looked after quota holders interests.

    The decision not to prosecute these criminals is sickening. They should have had their quota taken whether they owned it or not. Forget poachers these guys are government sponsored poachers and environmental terrorists.

    When there are no consequences for criminal behaviour it just encourages more.If they are caught no one goes to jail, no quotas are stripped, no one is even prosecuted. MPI know what is going on and are complicate. They tried to cover this up and even when its exposed there is no responsibility.

    The most disturbing thing is there will be no changes. Why would commercial fishers change when there are no consequences.

    As a rec fish all Im expecting is more dumping more daily bag limit cuts and a further decline in our marine environment.

    What happened two months ago is a good example of MPIs crazy where they increased both the rec and commercial snapper quota in the west of south island. The commercial quota was increased by 50,000kg and they increased the rec quota by a massive 160,000kg. Wow this would seem to be a big win for the rec fisher but unfortunately they didnt increase the daily limit so this was just words. So in the real world this just allowed the commercial sector to take another 50 tons of fish per annum. It would be funny if it wasnt so sad.

    Piracy is alive and well in NZ and its government sponsored.

    1. You need to read the Ministers decision letter in regards to the SNA 7 fishery that you are commenting on. The Minister increased the recreational allowance to cover the estimated recreational removals. he robbed the commercial guys when he did that – same as he robbed them in SNA 1. But read the SNA 7 decision – I assure you it was not ‘just words’ – MPI had allowed the recreational allowance within what was supposed to be a ‘rebuild TAC’ to be exceeded by an estimated 160 tonnes (an MPI estimate by the way).

      1. “He robbed the commercial guys” These are but a few individuals who take everyones fish which is mostly sold to offshore consumers. Apart from the people who can afford international prices for their own fish.

        The practicality of SNA7 is that the commercial catch allowance went up by 50 tons. Catch limit for rec fishers stayed at 10. How are rec fishers robbing anyone.

        Putting a public good in the hands of a few greedy men was the worst ecological disaster this country has seen.

        1. You are wrong on several counts. In the case of SNA 7 the recreational catches had exceeded the allowance made for them when a stock rebuilding TAC was implemented. It was the recreational sector which ‘overfished’ (and slowed the rate of rebuild as a consequence). The Minister – on advice from MPI officials – chose to ignore that overfishing and increased the TAC and the recreational allowance within the TAC to legitimise the failure to manage. Read the consultation document and decision letter here .

          1. I dont know what part of the report ure looking at but says what I said. The numbers reflect what is being caught now and there is no rec increase only a 50 ton increase by commercial. Thats 50,000 fish I estimate.

            Look I can see you must have some commercial fishing interest but the point Im trying to make is that commercial fisherman were given the right to profit from our oceans and have ****ed it up. There is biased towards them over everyone else by MPI and as soon as there is the slightest recovery the commercial quota in increased. This is opposite to the rec quota which continually gets cut and always goes down.

            You think somehow this is all about money. Its about restoring the oceans to pre piracy levels not selling our fish to the world!!!

          2. Wrong again – I do not think it is about money. It is about stock abundance in the first instance and about sustainable harvest second. You did not read the link properly or you would understand why I am correct in my explanation of the TAC decision. The Minister rewarded overfishing by the recreational sector. To re-manufacture an old cliche – you cannot have your fish and eat it too. In order to maintain any preferred level of stock abundance it is necessary for catches to be constrained – not only commercial catches which in the case of the SNA 7 fishery (and some others) are commensurate with commercial catch limits.

          3. I read the report in the first place. Not a single extra fish will be caught but commercial fishers will be taking another 50,000 fish. Is this wrong?????????No so youre wrong.

            Im sick of commercial fishers like you justifying taking more and more fish from our sea and saying its a good thing. It isnt a good thing at all.

            Instead of increasing quotas when stocks begin to recover just leave the f**ing fish in the sea to breed. Your greed is never ending. Just take it till its all gone for everyone to line your pockets and feed the rest of the world.

            You can talk your self serving propaganda but dont ask me to believe it!!!

            Tell me what is your stake in the commercial fisheries because youre obviously pushing their agenda.

  6. When the fish stocks are not worth harvesting around NZ the government will wring there hands and blame the recreational boys
    The question that has not been answered is, the IWI want to protect the Shore and the fisheries. How many of them have direct links to the trawlers that are doing the damage. If that is the case it makes a mockery of the treaty, and all it stand for

    1. Why did anyone think Maori would be any less greedy or give anymore of a crap about the marine environment than their white counterparts. Theyre all just greedy poachers stealing our fish.

      1. Maybe they are not, no one really knows, But they are the ones who want control of the seabed and foreshore, and in my opinion protecting it is part of the mandate,for everybody equally, to go down and get a couple of fish
        In saying that in the 60,s/70,s. I could catch a good feed of snapper off the beach, within 1/2 an hour with a surfcaster, Now I can fish all day and catch a couple of Kawhai or a sand shark, A snapper is unheard of for most surfcasters on the west coast, in the lower north island, So where have all the fish gone?

      2. They are not OUR fish. Fish belong to themselves, They have a role to play in ecology just as every species does.

  7. You have provided a very simplistic overview of the situation relating to discarding fish – you might have added for example that discarding is legal for both commercial and recreational users; that discarding has no adverse effects on the long term sustainability of stocks (assuming TACs are not exceeded); that ‘dumping’ is a term associated with ‘quota busting’ not with discarding; that mandatory video surveillance is an expensive band-aid but will not address root cause of dumping. There is nothing inherently wrong with the QMS – which in my definition is the New Zealand Fisheries Management Regime. The system works as evidenced by increases in stock abundance across all main species since implementation in October 1986. It does not work perfectly. That is the fault of quota share owners and Government agencies in equal measure.

  8. Why dont we just start again like CYFs. The current system is an ecological disaster. Its not getting better and not the best economic use of a scarce resource.

    Ban offshore boats full stop.

    Rearrange the system to stop fish dumping.

    Cameras everywhere on every boat. If you can make taxis have them why not boats. It is not expensive and with wide spread corruption these fishers can not be trusted. They have proven this time and time again.

    Fines and prosecutions that happen and deter past behaviour.

    Ban commercial fishing from large rec areas like Hauraki Gulf. Pay the commercial fishers to leave the area.

    Let recreational fishers buy quota off the commercial sector. This would need legislation not to increase their quota at a later date.

    These are off the cuff suggestions but whatever this governments decisions on fisheries I shall not be voting for a government that does not support change.

    Theres a message for Labour or the Greens. Give me a workable solution to this current madness on fishing and you will get my vote.

  9. I don’t have a particular barrow to push on this but the interesting point that I think should be examined is the economic return from commercial vs. recreational fishing. With increasing amounts of commercial quota being fished by overseas boats and very little processing actually done in New Zealand one suspects that the price received for quota is actually quite low compared to the economic activity (boats, gear fuel etc.) generated from recreationa fishers let alone catering for an increasing tourist market. Many tourists would pay to fish in NZ if they could be assured of catching a snapper or similar and the returns potentially much greater. Once I would have supported a viable commercial fish industry in this country where fish were caught and processed by New Zealanders but the case is much weaker now.

    1. There is very little commercial quota being fished by overseas boats – none in the inshore fisheries and only some in the deep water fisheries. Overseas boats are chartered by NZ fishing companies/quota share owners for fisheries which have short seasons (Auckland Island squid; southern blue whiting for example) are bulk harvest, relatively low value/high volume fisheries which have been sustainably harvested for decades. The economics and duration of those fisheries, and the specialised harvest methods, don’t justify NZ investment in fleet and resources. Contract harvest fishing is the most cost effective option.

      You might suspect the price received would be low in comparison to economic activity from recreational fishing but you would be very wrong. Spending on recreational fishing is not earning. Commercial fishing and exporting of seafood earns money for New Zealand. The recreational fishing sector has a high churn of discretionary spending but the recreational charter fishing industry falls well short of even the smallest seafood export product by volume in terms of generating wealth for the country.

  10. The issue is that a fish is “free” – a “quota” is just a limit

    The best solution is a payment per fish -and camera’s on the commercial boats to ensure that every fish caught is counted
    That way there is a massive incentive to only catch the fish that you can sell at a profit

    I suspect that the level of price that the commercial guys would be able to practically pay is so low that the recreational guys would not be bothered about paying the same
    $0.20 per snapper?? – $1.40 if you catch your limit
    Make it public on a website – you can’t brag about the fish you caught and then not pay the fees!

  11. Great article, agree with the highlighting of these two critical factors impacting especially coastal fish species. There are responsible seafood companies out there seeking to understand and implement the very social licence to operate standards you talk about. Agree too with the recreational fishing licence proposal if they have a specific allocation of shares of the total allowable catch and that their catches are reported. Fish4all is a new voluntary recreational fishing reporting app for just that!

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