Protecting the Environment Through the Ownership Society — Part II

Policy Reports | Energy and Natural Resources

No. 295
Wednesday, January 17, 2007
by H. Sterling Burnett, Ph.D.

Ocean Fisheries: Common Heritage or Tragic Commons?

"Fish were once abundant along America's coasts."

For centuries, America's coastal fisheries ranked among the most bountiful on the planet. Five hundred years ago, the English explorer John Cabot reported that the waters off Newfoundland were so thick with cod that you could catch them by hanging baskets over the ship's side.50 In the waters of the Chesapeake, oyster beds were so thick they posed navigational hazards for ships. As late as the 1980s, the United States - together with many other parts of the world - entered into a "fisheries boom." As new fish stocks were discovered, fleets expanded and the world's fish catch increased six-fold. Today, U.S. waters contain 959 fish stocks, with an annual catch of 6.9 billion pounds, worth $3.4 billion.51 But the boom is over and in the last few years American and world fisheries have entered a period of rapid and unprecedented decline:

  • In the past 50 years, populations of large fish species - including tuna, swordfish, marlin, sharks, cod, halibut and flounder - have decreased 90 percent worldwide.52
  • Altogether, the National Marine Fisheries Service lists 98 species as overfished.53
  • Atlantic cod (once so abundant in American waters that they were called the "beef of the sea") have been fished to the verge of commercial extinction - their numbers depleted to the extent that fisherman cannot catch enough to be economically worthwhile.54
  • Due to overfishing, the Fisheries Service reports that half of all U.S. fisheries, and a quarter of the major fish stocks worldwide, are in jeopardy of an abrupt, severe decline from which they may never recover.55

Unless something is done quickly, American waters may go from being the world's most abundant fisheries to a virtual undersea wasteland within just a few years.

Why Have the Fisheries Declined? The decline is a result of two main factors: 1) the institutional structure of the fisheries and 2) misguided government policies.

"Ocean fisheries are declining due to overfishing."

Institutional Structure of Fisheries. Unlike cattle, sheep and horses, fish in the ocean do not have owners. They are common property to which everyone has access. Because they have no owners, they have no protectors or defenders. The result: overfishing, or a "tragedy of the commons."56

Although most fish species can withstand occasional overfishing, prolonged periods of population decline can lead to a collapse.57 The key to managing fish - like any other renewable resource - is to implement policies that encourage fishermen to take fish in numbers that will provide for human consumption without stripping the species' ability to reproduce itself.

Before government policies interfered, commercial fishing was guided by profit and loss. To the degree that fish were plentiful and relatively easy to catch, fishing was profitable and fleets grew. But when fish became temporarily scarce, the returns fell, profits sank and fishers either left the industry or cut back. Fishing fleets only overharvested temporarily since doing so lost them money.

Historically, treating the fisheries as a commons was not a problem and may still be the best policy for most ocean resources, most of the time. There is no market demand for the vast majority of species in the sea and, therefore, they are not subject to overharvesting. Of the 959 American fish stocks, only around 130 are commercially valuable.58

Misguided Government Policies. In the United States and worldwide, the open-commons system began to break down in the 1960s, when a number of government and private studies found that the world's marine resources were underutilized . For instance, a 1969 report requested by Congress found total annual world harvest from the oceans stood at 50 million metric tons, but with available equipment, production could be expanded to 150 million to 200 million metric tons - three to four times the 1969 production level.59

But if the industry was not limited by technology and investment, the report said, "far greater quantities of useful, marketable products could be harvested to meet the increasingly urgent world demand for protein foods ...[making it] more realistic to expect total annual production of marine food products (exclusive of aquaculture) to grow to 400 to 500 million metric tons before expansion costs become excessive."60

Contrary to this wildly optimistic - and badly mistaken - assessment, in 2003 the total harvest from inland and ocean fisheries was just 133 million tons - 40 million of which came from aquaculture, or fish farms and hatcheries.61

"The federal government subsidizes fishing."

As a result of the report's conclusion that U.S. waters were underfished, the government began to subsidize fishing in ways that encouraged the type of overfishing that never would have occurred under an open-commons system.62 The subsidies included:

  • Tax breaks for investments in new equipment and below-market loans to buy bigger boats and state-of-the-art equipment.
  • Grants to fishing harbors to improve and expand the number of mooring spaces, and to fish warehouses to purchase the latest equipment.
  • Grants and below-market loans for larger, newer fish processing plants.

The result of these programs was more fishers chasing fewer fish. In the late 1970s and early 1980s, there was a spectacular expansion in the U.S. fishing fleet. Of all the fishing vessels built in the past 50 years, more than half were built between 1973 and 1984.63

Worldwide, the story was much the same:

  • Throughout the 1980s, while the number of fish declined, government subsidies caused the world's fishing fleet to more than triple.64
  • The Chinese fleet alone more than quadrupled between 1970 and 1990.65

According to Carl Safina, an expert on fisheries, when fishing subsidies are combined with other wasteful actions in response to unwise regulations, the fishing industry spends $124 billion a year to catch $70 billion worth of fish.66

Misguided Government Response to Fewer Fish. The U.S. government's primary response to overfishing was the 1976 Magnuson-Stevens Fisheries Conservation and Management Act, which brought American waters under government control. The Act created 200-mile economic zones in American coastal waters that are exclusively accessible by American fishermen, and it established eight regional councils to formulate and implement fishery law. Each council drafts management plans specifically tailored to the breeding seasons, migration routes and current stocks of fish species in their region.67 The plans use command-and-control regulations that restrict the size of fishing vessels; the types of nets and/or traps; the length and timing of the fishing season; the areas open to fishing; and the amount (usually specified in tonnage) of particular species that can be kept.

Theoretically, the councils can limit private individuals' access to natural resources by controlling how fish are caught. The goal is to allow the fisheries to renew themselves, ensuring their availability for future generations. However, as discussed previously, the political process suffers from two weaknesses: 1) it is itself a commons and 2) it does nothing to change the incentives facing fishers.

Furthermore, every council is assigned conservationists and fish biologists who have specialized knowledge of the fish in the region to advise the council members in setting policies. However, in most councils, the majority of council members are fishers and therefore have a vested financial interest in promoting the interests of fishers rather than fish. Many other council members are politicians whose primary concern is winning local fishers' votes in the next election rather than protecting fish. Neither the fishers nor the politicians have very strong incentives to adhere to the recommendations of the conservationists or biologists. The result has been fishery management plans that are more concerned with profits and votes than with conserving fish.

"Fishery regulations benefit fishers rather than fish."

Results of Regulation. The fisheries would have been much better off if the government had done nothing over the past three decades. Left on its own, no private company or industry could continue to operate with such high losses. The problem with fishery regulations is that fishers have an economic self-interest in legally (or illegally) avoiding and evading them:

  • Prevented from fishing on some days, they make a greater effort on days when fishing is allowed.
  • Forced to use smaller boats, they use more of them, and when forced to use smaller nets, they use those nets more often.
  • Forced to limit the number of fish they can bring back to harbor, they throw the smallest ones overboard before their return; in U.S. waters, 2.3 billion pounds of dead fish are thrown back into the ocean every year.68

To make matters worse, in order to alleviate the economic harm fishermen have suffered as a result of regulatory constraints, the government has provided even greater subsidies, tax breaks and price supports. Thus, a vicious cycle persists in which fishermen overfish and the government helps sustain an overly large fleet.

Harm from Regulations. The harm caused by these policies is not limited to the fish populations themselves. Indeed, the economy and society in general suffer ill effects from regulations and subsidies. According to the U.S. Commerce Department, restoring American fisheries could double commercial fishing revenues, create 300,000 new jobs economy-wide and have a $25 billion overall impact on the U.S. economy.69

Overfishing also hurts the general public. Fish make up a fifth of all animal protein in the human diet. In fact, more than one billion people depend almost exclusively on fish for protein.70 Global production of fish exceeds by far the global production of land animals like poultry, beef or pork. Thus the depletion of fish stocks will result in malnutrition and poverty for many.

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