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Economics & Social Sciences Research Program

The Role of Economics in the Bering Sea Pollock Fishery’s Adaptation
to Climate Change

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July-Sept 2012
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One component of the Bering Sea Integrated Ecosystem Research Project (BSIERP) is a spatial economic model that predicts changes in fishing activity in the Bering Sea pollock fishery that may result from climate change.  Seasonal sea ice in the Bering Sea is predicted to decrease by 40% by 2050, resulting in more frequent warm years characterized by reduced winter ice cover and a smaller cold pool (<1.5ºC bottom temperature).  Retrospective data from the pollock catcher/processer fishery were used to study the behavior of harvesters in past climate regimes to make inferences about future behavior in a warmer climate. We found that in the pollock fishery large differences in the value of catch resulting from the pursuit of roe-bearing fish in the winter fishing season result in disparate behavior between the winter and summer fishing seasons. In the winter season, warm years and high abundances drive more intensive effort early in the season to harvest earlier-maturing roe. In the summer season, a smaller cold pool and high abundances are correlated with decreased effort in the northern reaches of the fishing grounds.  Spatial price differences are associated with changes in the distribution of effort of approximately the same magnitude. Although biological evidence suggests that the predicted increased frequency of warmer regimes may result in decreasing abundances, the historical data is insufficient to predict behavior in warm, low abundance regimes. Our study provides insight into the economic drivers of the fishery, many of which are related to climate, and illustrates the difficulty in making predictions about the effects of climate change on fisheries with limited historical data. Over the past year presentations on aspects of this work were presented at several forums, including the Alaska Marine Sciences Symposium, the North American Association of Fisheries Economists meetings, the Ecosystem Studies of Sub-Arctic Seas meetings, and the American Fisheries Society annual meetings.  A manuscript has been submitted to the Canadian Journal of Fisheries and Aquatic Sciences.

By Alan Haynie and Lisa Pfeiffer


Income Diversification and Risk for Fishermen

Catches and prices from many fisheries exhibit high interannual variability leading to variability in the income derived by fishery participants. The economic risk posed by this may be mitigated in some cases if individuals participate in several different fisheries, particularly if revenues from those fisheries are uncorrelated or vary asynchronously. We construct indices of gross income diversification from fisheries at the level of individual vessels and find that the income of the current fleet of vessels on the U.S. West Coast and in Alaska is less diverse than at any point in the past 30 years. We also find a dome-shaped relationship between the variability of individuals’ income and income diversification which implies that a small amount of diversification does not reduce income risk, but higher levels of diversification can substantially reduce the variability of income from fishing. Moving from a single fishery strategy to a 50-25-25 split in revenues reduces the expected coefficient of variation of gross revenues between 24% and 65% for the vessels included in this study.

The increasing access restrictions in many marine fisheries through license reductions and moratoriums have the potential to limit fishermen’s ability to diversify their income risk across multiple fisheries.  Catch share programs often result in consolidation initially and may reduce diversification. However, catch share programs also make it feasible for fishermen to build a portfolio of harvest privileges and potentially reduce their income risk. Therefore, catch share programs create both threats and opportunities for fishermen wishing to maintain diversified fishing strategies.

By Stephen Kasperski and Dan Holland


Productivity Growth and Product Choice in Fisheries: the Case of the Alaskan Pollock Fishery Revisited

Many fisheries worldwide have exhibited marked decreases in profitability and fish stocks during the last few decades as a result of overfishing. However, more conservative, science- and incentive-based management approaches have been practiced in the U.S. federally managed fisheries off Alaska since the mid 1990s.  The Bering Sea pollock fishery is one such fishery and remains one of the world’s largest in both value and volume of landings.  In 1998, with the implementation of the American Fisheries Act (AFA) this fishery was converted from a limited access fishery to a rationalized fishery in which fishing quota were allocated to cooperatives who could transfer quotas, facilitate fleet consolidation, and maximize efficiency.  The changes in efficiency and productivity growth arising from the change in management regime have been the subject of several studies, a few of which have focused on the large vessels that both catch and process fish onboard (catcher-processors). In this study we modify existing approaches to account for the unique decision making process characterizing catcher-processor’s production technologies.  In particular, we focus on sequential decisions regarding what products to produce and the factors that influence productivity once those decisions are made using a multiproduct revenue function. The estimation procedure is based on a latent variable econometric model and departs from and advances previous studies since it deals with the mixed distribution nature of the data. Our productivity growth estimates are consistent with increasing productivity growth since rationalization of the fishery, even in light of large decreases in the pollock stock.  These findings suggest that rationalizing fishery incentives can help foster improvements in economic productivity even during periods of diminished biological productivity.

By Ron Felthoven and Marcelo de Oliveira Torres

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