Fisheries management as a Fisheries management as a regional businessregional business

-The case of Norway-The case of Norway

Paper presented to: EAFE, RomePaper presented to: EAFE, Rome

5-75-7thth April 2004 April 2004

Torbjørn Trondsen, Torbjørn Trondsen,

NFH, University of Tromso, NorwayNFH, University of Tromso, Norway

& &

James A Young.James A Young.

University of Stirling, ScotlandUniversity of Stirling, Scotland

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

22

PlanPlan

• Background to the case for market Background to the case for market orientationorientation

• Pertinent trends in Norwegian fisheriesPertinent trends in Norwegian fisheries

• The relative position of North NorwayThe relative position of North Norway

• An alternative model: concept & An alternative model: concept & applicationapplication

• ConclusionsConclusions

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

33

Background to the case for Background to the case for market orientationmarket orientation

• Property rights valuesProperty rights values

• Resource rent management & Resource rent management & allocationallocation

• Property rights & fish business Property rights & fish business development development

• Governmental motivation to act Governmental motivation to act

• Political & industry pressure groupsPolitical & industry pressure groups

• EU ?EU ?

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

44

Pertinent trends in Norwegian Pertinent trends in Norwegian fisheriesfisheries

• Decline in number Decline in number of fishermen & of fishermen & vesselsvessels

• Increased engine Increased engine capacity capacity

• Concentration of Concentration of fishing activities fishing activities

• Regional imbalance Regional imbalance of effort & catchof effort & catch

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

55

0

3000

6000

9000

12000

15000

18000

21000

24000

27000

30000

1981 1985 1989 1993 1997 2001

År/Year

Fa

rtø

y/V

es

se

ls

Aktive fartøy/ Active vessels Alle/ Total

Total horsepower in the Norwegian fishing fleet

500 000

1 000 000

1 500 000

2 000 000

1971 1975 1980 1985 1990 1995 2000 2001

År

HP

0

5000

10000

15000

20000

25000

30000

35000

1983 1986 1989 1992 1995 1998 2001

År/Year

Fis

ka

rar/

Fis

he

rme

n

Hovudyrke /Main occupation Alle /Total

Fishermen

Vessels

Engine capacity<14000

Trends in Trends in Norwegian Norwegian fisheriesfisheries

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

66

Concentration of pelagic fishing rights: Concentration of pelagic fishing rights: Owners and regionsOwners and regions

Capacity shares of licensed pelagic vessels 1971-2002

0 %

5 %

10 %

15 %

20 %

25 %

30 %

35 %

40 %

45 %

50 %

Hordaland M&R Northern Norw ay Other

1971

2002

Capacity pelagic fisheries 1971-2002

0

100

200

300

400

1971 2002

Nu

mb

er

0200000400000600000800000100000012000001400000

Number ofvessels

Loading capacityin HL

Entry regulation

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

77

Pelagic fishing groundsPelagic fishing groundsSpring herring

Capelin

Blue whiting

Mackerel

North Sea Herring

Hordaland: Pelagic capitol Catch

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

88

The relative position of North The relative position of North NorwayNorway

Catches 2001

Finnmark

Northern Norway

Ålesund: Factory trawler fleet capital

Saithe

Haddock

Cod

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

99

The relative position of North Norway: share of total Norwegian cod catch

North Norwegian shares of total Norwegian landings of whitefish 1968-2002

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

Pct Northern Norway

Finnmark's share of total Norwegian landings of white fish 1968-2002

0,0 %

5,0 %

10,0 %

15,0 %

20,0 %

25,0 %

30,0 %

Pct Finmark of total

Entry regulation coastal fishing vessels

Northern Norway

Finnmark

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1010

An alternative model: tAn alternative model: the he drivers for change drivers for change • Closure of fisheries due to overcapacityClosure of fisheries due to overcapacity• Fishing rights tradedFishing rights traded• Expansion in factory vessels (auto longliners) and Expansion in factory vessels (auto longliners) and

big purse seiners in Western Norway big purse seiners in Western Norway • Localization of fishing rights a function of capital and market Localization of fishing rights a function of capital and market

controlcontrol• Investment in overcapacity rewarded with fishing rights.Investment in overcapacity rewarded with fishing rights.

• Exit of Coastal fishers without individual quotas Exit of Coastal fishers without individual quotas • Weak regional management of fishing rightsWeak regional management of fishing rights

– Former county fishery administration taken over by the Former county fishery administration taken over by the governmental Directorate of Fisheries in Bergengovernmental Directorate of Fisheries in Bergen

– Norwegian Fishermen’s Association dominated by “quota Norwegian Fishermen’s Association dominated by “quota barons” & influence over Fishery Management Policybarons” & influence over Fishery Management Policy

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1111

An alternative modelAn alternative model: North Norway’s : North Norway’s demandsdemands

• Regional & Societal ownershipRegional & Societal ownership• Fairer regional allocation of fishing Fairer regional allocation of fishing

rightsrights• Efficient economic utilization of Efficient economic utilization of

resources resources • Value adding in the coastal Value adding in the coastal

communitiescommunities• Compatibility with prospective EU Compatibility with prospective EU

frameworks?frameworks?

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1212

An alternative model: An alternative model: backgroundbackground

• The main ideas publishedThe main ideas published – Toward Market Orientation: The Toward Market Orientation: The

role of auctioning individual role of auctioning individual seasonal quotas (ISQ). seasonal quotas (ISQ). Marine Marine PolicyPolicy-(in press):-(in press):

– Fisheries Management and Fisheries Management and Market Oriented Value adding Market Oriented Value adding (MOVA). (MOVA). Marine Resource Marine Resource Economics Economics Vol. 16 No. 1. (2001):Vol. 16 No. 1. (2001):

• Experiences from.Experiences from.– EU’s regional co-EU’s regional co-

management systemsmanagement systems– Regional/group quotas Regional/group quotas

management in the US & management in the US & NZNZ

– Japanese co-managementJapanese co-management• Norwegian attitudes Norwegian attitudes

regarding regional and regarding regional and fisheries management and fisheries management and policypolicy

• General Model SCP : General Model SCP : – StructureStructure

– ConductConduct

– PerformancePerformance

• Region as a value Region as a value adding competition adding competition arenaarena

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1313

An alternative model:An alternative model: Regional business Regional business management of fishing management of fishing rightsrights

• Regional Resource Enterprises (RRE)Regional Resource Enterprises (RRE)– Owned by County authority (eg Norwegian Owned by County authority (eg Norwegian

Energy)Energy)– Non transferable license leasing contracts to Non transferable license leasing contracts to

individual fishermenindividual fishermen

• Quota asset value and Quota asset value and leasing leasing income income = resource rent for regional development= resource rent for regional development

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1414

ALLOCATION MODELS OF FISHING RIGHTS

Regional management Vessel Group management

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1515

An alternative model: applicationAn alternative model: application of of RREs & consequences for fishing RREs & consequences for fishing operationsoperations

• No extra barriers on grounds or No extra barriers on grounds or landing portslanding ports

• Opportunity for flexible combinations Opportunity for flexible combinations of leasesof leases

• Greater involvement of individual Greater involvement of individual fishermen & industry participantsfishermen & industry participants

• More stable competitive frameworkMore stable competitive framework

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1616

An alternative model: applicationAn alternative model: application of of RREs & consequences for fishing RREs & consequences for fishing operationsoperations

• Better focus on market oriented Better focus on market oriented value addingvalue adding

• Compliance with PO & co-Compliance with PO & co-management trendsmanagement trends

• Compatibility with emergent EU CFP?Compatibility with emergent EU CFP?

T. Trondsen fishmarketinT. Trondsen fishmarketing.comg.com

Fisheries management as a regioFisheries management as a regional businessnal business

1717

ConclusionsConclusions

• Limits on enthusiasm for change in existing Limits on enthusiasm for change in existing power centrespower centres

• Local initiatives necessaryLocal initiatives necessary– Co-existence of regional & standard vessel group Co-existence of regional & standard vessel group

management models? management models? • Regional variations possible Regional variations possible

– Finnmark and W Norway – different models?Finnmark and W Norway – different models?• Political and Industry studies - reviews Political and Industry studies - reviews

ongoingongoing• Finnmark County currently leading – but wider Finnmark County currently leading – but wider

transnational considerations may dominate?transnational considerations may dominate?