EconMult

Abstract: This article is part of Arne Eide's doctoral thesis, which is available in Munin at http://hdl.handle.net/10037/2399

Abstract: We explore the possibilities for constructing an aggregate model of the multispecies fish resources of the Barents Sea, useful for the purpose of policy analysis under uncertainty. A wish to make the model compatible with existing Norwegian models of the Barents Sea, notably the Aggmult and the Econmult models, works to complicate the model. A wish to use the model to search for policies under uncertainty, using computer intensive search procedures, calls for a limited number of calculations per simulation. Focus here is on the biological part of the model. The economic part of the model and the stochastics are presented in Moxnes (1994).

Abstract: This is a study on economic implications of the 3 year harvest control rule (HCR) for the Northeast Arctic cod stock, decided in November 2002 by the Joint Norwegian-Russian Fisheries Commission. Outcomes of this rule are compared to those of five other rules, including the previous one based on a 1 year quota decision. Results are measured by six indicators; three economic, two biological and one management indicator. A previous study showed that for the period 2005-2008, the Precautionary approach (Fpa = 0.40) and 3 year TAC rule agreed in 2002 implied an increase in both spawning stock (SSB) and total fishable stock, SB(3+), at the expense of all economic indicators, when compared to five other HCRs. The same trend we can observe in this analysis of the years 2005-2034. Introduction The Northeast Artic cod stock in the Barents Sea and Norwegian waters is bilaterally managed with Russia. Total allowable catch (TAC) and technical regulations for the fishery are set every autumn in the Joint Norwegian-Russian Fisheries Commission meetings. The Commission are given TAC advises from ICES’s Advisory Committee on Fisheries Management (ACFM). Advises are based on results of studies and modelling done by Norwegian and Russian research institutions that monitor the stocks. Advices form ICES reflects the knowledge on the stocks size and dynamics. This knowledge is constantly changing as observed through changes of parameters and use of reference points. TAC advises from ACFM have fluctuated significantly more than TAC agreed by the Commission. The Commission have probably taken notice of economic, social and other industry interest when TACdecisions have been made. Stability can from an economic point of view be favourable as it may contribute to optimal exploitation of capacity invested in fleet, employment security and it can reduce risks. Especially the last few years’ increased stability has been a priority by the Commission, and in 2000 a quota that should be equal for the years 2001, 2002 and 2003 was decided. This quota was established in such a way that the stock would be higher than the precautionary Spawning Stock Biomass (SSB) with the biomass of 500 000 tonnes. In 2001 data implied that the stock would fall below this level, while the stock was increasing towards 2003. Because of these variations, there has been a request for good and reasonable principles and criteria for long term management of the stock. At the 30 session of the commission in 2001 (Ministry of Fisheries 2001) a working group was established to compose a report for long term strategic management. The group consisted of stock assessment researchers from Norway and Russia. The results from the study were four general objectives for the management taking stock sizes, yield and implications for the society into consideration. In addition suggestions for specific measuring parameters for these criteria were produced, and estimates of the parameters in seven management regime simulations for the period 2003-2006 were made (Anonymous 2003). The work of the group also suggested different variables to measure the effects of the management regimes in relation to the criteria for satisfactory long term management. The group used average TAC to IIFET 2006 Portsmouth Proceedings 2 illustrate the objective of high yield from the stock, and the difference between highest and lowest TAC next year as an indicator of sustainability and social consequences. However, they point out that economic indicators as price and cost should also be included when management regimes are settled. In November 2002 the commission met (Ministry of Fisheries 2002) and decided to use a new rule for management based on the report from the group for setting the TAC for 2004. The rule has been named “three year harvest control rule”(HCR) and works as follows; average annual TAC is estimated for the next three years with precautionary fishing mortality (Fpa = 0.40). TAC is set at this value. The subsequent year the estimation of average TAC is repeated at the same procedure and TAC is set at this new average value. However, TAC cannot change more than 10 % from year to year. In addition, F shall decrease linearly from Fpa if the SSB falls below the precautionary level (Bpa). Approach The transition from the traditional annual quota setting into a more long term quota setting strategy like the HCR, could give a suboptimal management from a biological, resource and business administration point of view. Biologically the slowness of the harvest rule could give overfishing in periods of low recruitment and a decrease in stock with risk of a lower SSB. Underfishing could be the result in a period of strong increase in the stock. ICES was in 2003 asked by the Norwegian Ministry of Fisheries to suggest advices on the basis of the harvest rule. An evaluation of the rule was also done by ICES based on simulations of stockdata with assumptions about recruitment, weight, sexual maturity and risk (ICES 2004). With F = Fpa , it is a high probability that SSB is above Blim and the risk of a SSB below Bpa is also low. However, an increase of F up to 0,50 could mean a higher risk of a low stock, and the mechanism of reducing F with a SSB below Bpa must be carried out. Thus, the effect of the rule with regards to ensure the stock would depend on the actual reduction of F carried out, which may be politically difficult. From a single stock perspective, overand underfishing have some resource-economic implications for the agestructure of the stock that could lead to harvest of both juvenile and overaged fish. A change in the agestructure affects the ability of harvesting with different gear types and further affects the cost of harvesting. The model used for cod assessment and management in the Barents Sea is a single stock model. If herring and capelin, as two major stocks in the ecosystem, are added to the model, it would affect the biological sustainability of the model and the resource-economic consequences. In a realistic situation with a collapse of the capelinstock and large quotas of cod, the slowness of the rule could lead to a dramatically decrease in the codstock as a result of overfishing and cannibalism. These factors imply that in addition to the parameters for measurement suggested by the working group, economic parameters included in management strategies should be worked out. On the basis of the methods used in a study by Eide, Hermansen & Flaaten (2005), this research will investigate which of the parameters that best could indicate economically sustainable management in a long term perspective. The short term study results of the years 2005-2008, implied an increase in SSB and total fishable stock at the expense of all economic indicators when compared to five other harvest rules (Eide, Hermansen & Flaaten 2005). A simulation of the years 2005-2034 for 2 biological, and 3 economic indicators at 6 different harvest rules will follow in this analysis. IIFET 2006 Portsmouth Proceedings 3 Methods and models for economic evaluation of HCRs Estimation of long term future economic results demands a model implementing both biological connections as well as the fishery interactions with these. To represent the fishery, the model ECONMULT (Eide F Gross Revenue (Value of landed quantity), Wage Paying Ability (Value of catch subtracted all costs except those for wages), and Value Added (Value of catch subtracted with costs for other alternative industry). The two biological indicators are Spawning biomass and Total Biomass. Norwegian TAC is also included as a management indicator. The six harvest rules tested are: Precautionary approach (Fpa = 0,4) and 3 year TAC rule Precautionary approach (Fpa = 0,4) and 1 year TAC rule Constant fishing mortality equal to the 2001 level (F2001 =0,84) and 3 year TAC rule Constant fishing mofrality equal to the 2001 level (F2001 = 0,84) and 1 year rule. Constant TAC of which 300 thousand tonnes for Norway Constant TAC of which 420 thousand tonnes for Norway. IIFET 2006 Portsmouth Proceedings 4 Results The results of the period 2005-2034 are averages of 10 stochastic simulations with variations of herring abundance in the ecosystem. Standard deviations are not presented for all indicators, but by two different management rules and indicators later to be discussed.