Cutting Spending and Waste in Fisheries

Bureaucratic, command-and-control regulation of coastal fisheries wastes taxpayers’ dollars and endangers the sustainability of this common resource. Managing a shared resource like fish in the sea is a difficult problem. Since no one owns them, there has always been simply a race to capture as many as you can and bring them to market. Ownership was established, or more literally, declared, when the fish was on the boat. As both population and technology increased, this practice led to overfishing and the disappearance of some fish populations.

What is the best way to manage a common resource like fish in the sea?

Currently, the government claims ownership of the fish and then assigns the management of the fishery to a regional council, which studies the fish population to determine how many can be caught while preserving or recovering the fish population. Once the council makes that determination , it then tries to figure out how long that will take an estimated number of fishermen, using existing technology, to catch that amount. Finally, the council declares how long the fishing season will last in a given year. Fishermen in that region then race to see how many fish they can catch in that prescribed period of time and get them to market before the season is closed. This type of fishing has been depicted in the Discovery Channel’s reality series, Deadliest Catch.

As entertaining as it may be to follow the crews on Deadliest Catch, this system is wasteful and uneconomical, not to mention hazardous for the fishermen involved.

It incentivizes every fisherman to burn up too much of his or her capital in an effort to maximize the catch during the very limited season. It also forces processors to over-invest in infrastructure and technology to handle the large number of fish it must process in a very short period of time before the fish spoil.

This system of government command-and-control regulation has not worked and taxpayers have been forced to spend almost a billion dollars in bailouts over the last 10 years. And, as with other industries which have received bailouts, the giveaways rarely come with common-sense, long-term reforms attached and therefore have not ushered in better economic or environmental conditions for the fisheries or fishing communities.

A quick look at the management of elephant populations in other countries offers a primer on the pitfalls of government ownership of resources like fish. In countries where elephants, for example, are considered to be the property of the government, populations have declined. Where African countries allow them to be the property of people or tribes, the elephants have flourished.

One reform idea is to allow fish stock to be treated more like radio spectrum. Such a policy of assigning a property right to a share of fish is generally known as “catch shares” programs or a limited access privilege program (LAPP).

The government could auction the property right to quotas of fish to pay for the administrative expenses. Once a fisherman owned the right to catch and sell a certain amount of fish, he could more rationally use his capital to maximize profit and monitor the prices the fish get at the market to decide when it is most profitable to send out a boat with a crew to catch the fish. This process would allow him to take fuel costs into account and, since he could catch his fish at anytime in the year, he would not have to over extend himself to buy expensive, technologically advanced equipment in order to maximize the catch in the shortest period of time.

Under this rubric, fishermen would be more motivated to take safety at sea into account, taking fewer risks fishing in dangerous weather because of artificial time constraints. (It was this pressure to fish during the limited season that led to the demise of the Andrea Gail in the movie, The Perfect Storm.)

Finally, taxpayers would also get relief. A system that provided more stable year-round employment for a dedicated pool of professional fishermen and smoothing the boom-and-bust cycle would reduce the need for fisherman to draw on state or federal benefits during idle periods.

According to one study, Can Catch Shares Reduce the US Federal Deficit?, changing the management of our fisheries to “catch shares” programs could reduce the deficit by about $1 billion annually. Not only could this reduce wasteful spending, but it would increase revenue since profitable fisherman pay higher income taxes.

Professional fishermen know how to fish. They do it very efficiently when the government isn’t micro-managing when and how they fish. Give the taxpayers a break and reduce the waste and cost of over-regulated fishing.

Congress should examine “catch shares” more closely as an innovative idea to lower government spending in the long run.

– Roger Morse, Visiting Fellow