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Forces and Mechanisms under IFQs

Forces and Mechanisms under IFQs. Presentation to. Pacific Fishery Management Council Workshop on Trawl IQs. Marcus Hartley. April 2006. Alternative 3: IFQs for all Groundfish except Other Species. IFQs for all Groundfish except Other Species.

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Forces and Mechanisms under IFQs

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  1. Forces and Mechanisms under IFQs Presentation to Pacific Fishery Management Council Workshop on Trawl IQs Marcus Hartley April 2006

  2. Alternative 3: IFQs for all Groundfish except Other Species. • IFQs for all Groundfish except Other Species. • Whiting seasons would be eliminated, but whiting sectors are maintained. • 3 whiting sectors • Reporting of all groundfish catch would be required. • At-sea monitoring would be required on all vessels.

  3. Assume Program C for Each Alternative • 75 percent of QS to Harvesters • 25 percent of QS to Processors • Processors are defined as those facilities that take ownership of, and process, unprocessed groundfish

  4. Processor & Harvester Relationships • Processors would be allocated 25 percent of the QP of all species under Alternative 4. • How will these allocations of QS/QP be used by processors? • Would the allocation of QS/QP to processors make it more likely that harvesters would try to acquire additional QS? • If so, why? • How would the discussion change if processors were instead allocated … • 50 percent of the QS/QP? • 10 percent of the QS/QP?

  5. How will Processors use QS/QP • One processor told us… • He would provide the QP to the harvesters that he normally works with free of charge to ensure that they would deliver all their fish (all species) to him. • He would not lease them to his harvesters and would not pay a lower ex-vessel price • He would prioritize to most efficient vessels

  6. How will Processors use QS/QP • One processor told us that… • He would lease them to harvesters at the market rate paid for QP. • With IFQs, it’s all about profit maximization

  7. How will Processors use QS/QP • One processor told use … • He would use them on his own vessels and use the extra profits to expand his fleet

  8. Processor Behavioral Changes • Is it likely that processors would change the products they produce under an IFQ program? • What kinds of changes might be made? • Is it likely that processors would change the timing of their purchase demands for particular species in an effort to reduce incidental catch and thereby increase target catches? • What data are available with respect to products and product prices?

  9. Processor Use of QS/QP • Mainstream economic theory assumes pure competition; therefore, questions of how processors use QS/QP cannot easily be answered. • We would look at game theory and experimental economics to address these issues.

  10. Whiting Fisheries Changes • Whiting Seasons would be eliminated under this alternative. What would be the affect of this option on the program? • Would you expect whiting vessels (that don’t fish for other types of groundfish) to change behavior with respect to timing or areas fished to reduce incidental catch? How?

  11. Spatial and Temporal Behavioral Changes • How would harvesters change timing or areas of fishing under this IFQ program compared to permit stacking? • The Consulting Team thinks vessels will move to times and areas where the ratio of target CPUE to incidental catch rates is most favorable, subject to constraints of market demand from processors

  12. Incidental Catch Behavioral Changes • What will be the effect of the IFQ program on incidental catches of overfished species? • Will the IFQ program allow harvesters to reduce incidental catches? • How could these changes be accomplished?

  13. More Whiting Behavioral Changes • Would you expect whiting vessels that also fish for other types of groundfish to change behavior with respect to timing or areas fished in order to reduce incidental catch?

  14. More on incidental catch • How do you think groundfish-only vessels would change? • How will the incentives for reducing incidental catch change?

  15. At-Sea Monitoring Program • Remembering that the IFQ program includes an observer and monitoring program (assume a cost of $500 per day), is it likely that harvesters would need to purchase additional QS/QP to cover those additional costs? • How would this change if more emphasis were placed on video monitoring, thereby reducing the costs of the observer/monitoring system?

  16. Alternative 4: IFQs for all groundfish species • IFQs for all groundfish species. • Whiting Sector designations would be eliminated. • Whiting Seasons would be eliminated. • Reporting of all groundfish catch would be required. • At-sea monitoring would be required on all vessels.

  17. Elimination of Whiting Sectors • How do you think elimination of the whiting sector designations will affect distribution of whiting between whiting processing sectors?

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