Making the Ocean Safe for Fish

“What is owned by many is taken least care of, for all men regard more what is their own than what others share with them.”
– Aristotle, A Treatise on Government, Book 2

What do the Derwent anglers club in England, some New Brunswick riparians, a number of Quebec fishing clubs and many New Zealand fisherman have in common? — they all have established property rights to the fish they catch.
They have something else in common, too. They all have taken steps to protect and preserve the fish they own, just as Aristotle predicted 2,500 years ago.

Elizabeth Brubaker, Executive Director of the Toronto-based Environment Probe, in a recent AIMS paper, Making the Oceans Safe for Fish, argues that a similar system of private ownership on the east coast could have headed off the ecological and economic disaster which has ravished the fisheries here — and, she argues, it remains the best way to manage the fisheries in the future.

Under a regime of property rights, where fishermen actually own a secure percentage of the total catch, Brubaker writes “fishermen need not waste money building bigger boats and equipping them with more advanced gear in a race to catch fish” before other fishermen get to them.

Property rights “promote conservation. With valuble resources tied up in their property rights to a certain percentage of the catch, fishermen have an economic interest in conserving fish stocks and keeping out interlopers.”

Brubaker notes that a number of countries have already moved towards a fisheries sector based on property rights by granting individual transferable quotas (ITQs), under which fishermen are initially granted or sold a percentage of the catch. After that, they own their ITQs and can sell, buy, trade or rent them.

This eliminates a pervasive incentive for fishermen to remain in the fisheries, even if they would prefer to shift to another line of work where they might be more productive. Fishermen now hold on to a valuable resource, their quota, only if they continue fishing; they lose it if they stop. Under ITQs, they could sell this resource at a fair market price enabling them to move to other activities without economic loss.

“In New Zealand, which introduced ITQs in the mid-1980’s, the system now governs 32 different fisheries. More efficient fishermen have bought out their less efficient counterparts, eliminating the excess capacity that had previously characterized the fleet. And with economic incentives to preserve and enhance the fishery, quota holders are financing research, exploration, enhancement, and policing measures.”

Brubaker contrasts this with a system of government resource management. “Self-interest likewise motivates the politicians and the bureaucrats who are paid to manage the common resources. But for them, personal gain often results not from protecting resources but from increasing their budgets, putting people to work, and ensuring their re-election.”

These incentives led to the current Atlantic fisheries crisis, she writes. “Nowhere is the government’s failure to protect the fisheries more evident than on Canada’s East Coast.”

She cites government reports from the early 1980’s which focused on expanding employment in the fisheries even as stock dwindled. Matters were made worse, she says, by government sudsidies designed to create even more employment in the fisheries, but which had the result of increasing capacity in a sector already plagued to death by over-capacity.

Attempts to create new jobs “prompted on-going assistance – including construction and insurance subsidies, tax breaks, loan guarantees, and unemployment insurance benefits to fishermen, boat owners and processors. Essentially the government was paying people to destroy a valuable resource by enabling them to enter and stay in an industry that couldn’t support them; it was encouraging eclogically destructive and economically inefficient expansion”.

Although ITQs would have prevented the worst abuses of government management and would provide a sensible management for the future, Brubaker suggests further steps.

“Ideally, government-related ITQ regimes for harvesting are just one stage in the evolutionof private ownership of the fisheries. Although governments frequently set total allowable catches, ITQ systems can become totally self-regulating, with an association of all ITQ holders setting catches and taking on other management responsibilities. Such a shift in responsibility occured in several New Zealand fisheries in the early 1990s. A further evolution could entail outright ownership of the fisheries, removing owners’ obligations to utilize their resources exclusively as fisheries when conservation, tourism or otheruses proved more valuable.”

While property rights have been a practical option for fisheries managment for some time. Brubaker notes that new technology can improve enforcements of such rights.

“Assigning property rights to ocean fisheries has traditionally been hindered by the difficulty of keeping out trespassers. Satellites make ‘fencing’ the ocean possible. In the United States, NASA has experimented in policing the ocean with satellites that can identify boats by the unique ‘fingerprints’ in their exhaust. Similar technology may likewise enable owners to monitor their fishing zones, and to enforce their property rights in fisheries.”

She warns that the establishment of property rights would become a “two-edge sword,” at least initially, but argues that long-term benefits vastly outwiegh adjustment costs.

“Inevitably, some owners would – either through error or ignorance – deplete their stocks. As long as their activites did not violate others’ property rights, the law would permit them. But with the removal of governments’ perverse incentives to harvest resources uneconomically, the destruction of private property would occur less frequently. That which did occur would be modest compared to the wholesale environmental devastation wrought directly or abetted by governments.”

“Making the Oceans Safe for Fish: How Property Rights Can Reverse the Destruction of the Atlantic Fisheries” is part of the AIMS commentary series, a forum in which new and interesting public policy ideas can be aired. The paper is an edited excerpt from Brubaker’s most recent book “Property Rights in the Defence of Nature”, 1995, published by Earthscan, Toronto and London. A copy can be ordered through AIMS.