“We make the connection between the fishers’ living conditions and the fish stock’s status.” The newest EfD Center is not a newcomer to influencing fisheries policy. The Research Nucleus on Environmental and Natural Resource Economics at the Universidad de Concepcion has been active for several years in bringing an economics perspective into fisheries management in Chile. EfD is proud to welcome the Concepcion team into the EfD family.
“Fisheries management has social and economic consequences,” said Dr. Carlos Chavez, Principal Investigator of the Research Nucleus and coordinator of EfD Concepcion. “It’s important for policy makers to consider market behavior as well as marine science.”
Shaping governmental policies to better protect the environment and use natural resources more sustainably has been a goal of the Research Nucleus for years. The researchers also develop activities designed to create relationships between the Nucleus and those involved in designing and implementing policies at various levels of the government with the aim of contributing to the conversation leading to the design and implementation of policies, and to review and recommend changes to policies already in place.
The Research Nucleus played a major role in developing the 2012 Chilean Fisheries Law and implementing and evaluating this new law in 2013. Chile adopted its first law to regulate fisheries in 1991, but it was the El Niño effects on climatic conditions in 1997 that created an urgent need to revise these regulations. Jack mackerel landings, for example, fell dramatically in 1997, seriously impacting the livelihood of fishing communities. In 1999, Chile adopted its first limits on Total Allowable Catch (TAC) for its main species. But how should that total catch be divided among the companies and individuals engaged in commercial fishing? The solution was a market-based plan inspired by the idea of Individual Tradable Quotas (ITQ). The system was called Maximum Individual Harvest Limit, and set catch shares that could be transferred between fishers.
The idea behind ITQs is simple. Each fisher is assigned a quota for each species. The quota is tradable; for example, a fisher who wants to retire can sell a quota to another who wants to expand. This system creates an incentive to fish in a sustainable manner that can conserve fish stocks. The trading price of a quota will decrease in value if a fish stock falls, but will increase in value if the stock increases. Fishers no longer have an incentive to rush to catch all they can before someone else does; each share is guaranteed. Chile adopted a one-year harvest limit plan in 2001 and a ten-year plan in 2002.
How did harvest limits work in practice? The Concepcion researchers were asked to evaluate the results mid-way through the ten-year plan. Since 2006, the Research Nucleus has been deeply involved in evaluating the impact and proposing revisions to the system.
“The economic impacts of ITQs were good,” said Dr. Chavez. “Because the right to a share of the catch is assured, companies can plan to work throughout the season, creating more stable employment.” The work place also became safer; the competitive atmosphere before harvest limits encouraged unsafe operation of fishing vessels.
Companies that process fish as well as catching them found that the security of fishing rights allowed them to diversify into more products. Instead of selling mostly fish meal under the old system, companies added canned and frozen fish and even fish burgers into their product lines. “Now they are assured that they will get fish at the proper time and in the right condition, so they can sign contracts to export these products,” explained Dr. Chavez.
The Concepcion team also identified several weaknesses in how the 2002 fisheries law operated in practice. “Enforcing quotas is always a challenge,” said Dr. Chavez. There are also problems with “by-catch” (netting species that weren’t targeted) and “high grading” (catching the right species but at a size that’s not desirable for processing, for example, and not wanting those fish counted against the quota.) In both cases, the unwanted fish are dead by the time they are thrown back in the water. Interviews with crews showed that high grading was a serious problem, said Dr. Chavez.
Another serious problem is political: who decides on the total allowable catch for each species of fish? Under the 2002 law, the TAC was determined by the Undersecretary of Fisheries in consultation with stakeholders sitting on the National Council of Fisheries. While scientific evaluations of the level of each fish stock were taken into account, the council was weighted toward owners of fishing fleets and processing plants, as well as crew unions and small-scale fishers. “The council tended to vote against the science-based proposal and offer a counter-proposal with a higher catch allowance, especially for high-value fish,” explained Dr. Chavez. “The counter-proposal was then negotiated in a closed political process.”
As a result of these findings, the Concepcion economists – along with marine scientists, oceanographers, and sociologists – made recommendations to the Chilean public and Congress to improve the 2002 fisheries law when it expired in 2012.
The Nucleus generally interacts with policy makers through lectures and workshops on environmental, fisheries, and forestry topics. These workshops are designed to be a meeting point between researchers and policy makers and to encourage an academic debate. In this way, the Research Nucleus can be involved in the conversation around design, implementation, and evaluation of environmentally relevant policies.
In this way, researchers contributed an extensive analysis of the new Chilean Fisheries Law. Members of the research nucleus worked with a multidisciplinary team to analyze and prepare a response that explored the economic, social, and environmental impacts of the law, including fishery management, sustainability, economic efficiency, and participation of the citizenry. They responded with a presentation to the Undersecretary of Fisheries and a discussion paper, and participated in a panel for politicians and others focused on the shortcomings of the law and proposals for reforms. They further participated in the discussion by contributing newspaper articles, giving interviews, participating in seminars, and meeting with government officials. Several of the recommendations made by researchers were adopted and incorporated into the revised New Fisheries Law.
“We didn’t get everything we wanted,” said Dr. Chavez. But the new law includes improved enforcement, including a new design for sanctions that is more closely tied to economic incentives. For instance, the penalty for violating the quota is now three or four times the value of the fish that are illegally taken. Operators will be required to pay a fee that will fund the administration and enforcement of the system. The media campaign also sent the public a message that violating quotas is a criminal offense.
The process for setting the total catch has also been improved, with greater weight for scientific expertise, and a requirement to set the catch allowance closer to the scientific recommendations. “We asked that social scientists as well as marine scientists sit on the scientific committee recommending the catch allowance, but that suggestion wasn’t adopted,” said Dr. Chavez.