Individual Transferable/Fishing Quotas
International and domestic fishery policies provide important frameworks for management, but effective implementation of these policies including monitoring and enforcement is the key to improving fishery yields, and maintaining healthy ecosystems.
Fisheries management can be thought of as a series of input and output controls. Input controls include limiting the number of participants, restricting season length, closing fishing areas and restricting types and amount of gear, while output controls include various methods of limiting the amount of fish harvested, below a total allowable catch (TAC) based on a long-term sustainable level determined by fisheries scientists (NRC).
As traditional input controls, have failed to meet conservation needs, new ecosystem-based approaches are being implemented through the development of marine protected areas (MPA).
Fisheries resources are often said to suffer from "tragedy of the commons" as property rights are not clearly defined and incentives promote over harvesting of resources. The United Nations Convention on the Law of the Sea effectively defined property rights to 90% of the ocean's natural resources in the form of Exclusive Economic Zones (EEZ), yet fish stocks still suffer because this 200 nautical mile zone is treated as a commons by fishers within the coastal State with jurisdictional power over the area. Various measures in the form of input and output controls have been implemented in an attempt to limit access and provide rights to ocean resources. Rights-based input controls include requiring people to hold licenses for fishing while output controls include assigning shares of the TAC to certain fishers.
Fisheries managers define an annual TAC based on exploitation rates and an estimate of current stock size both of which are subject to considerable uncertainty (National Research Council). Using the TAC system, without other input controls, has repeatedly resulted in quotas being achieved while fishing mortalities are exceeded because stock estimates are overly optimistic (Rose). Because the TAC approach designates the quantity of fish that can be harvested but does not determine who can harvest or by what means, it promotes a race for fish as fishers compete for their share of the TAC. This leads to overcapitalization of the fishing fleet as boat owners invest in expensive equipment to compete with other fishers, an increase in waste or by-catch in the race to harvest large quantities of the intended species, and a compromise of safety as fishers are pressured to go out in hazardous weather conditions and avoid boat maintenance that would take time off of the sea (NRC). Additionally, because fishers want to harvest their share of the quota as quickly as possible before the TAC is reached, the market is often flooded with fish at the beginning of the season, driving the price down, and after the TAC is reached, consumers are left buying fish from the freezer aisle.
Individual Transferable Quotas (ITQ) or Individual Fishing Quotas (IFQ) as they are referred to in some literature are an output control that assign exclusive individual rights to harvest specific portions of the overall quota of marine fish. In the United States, an IFQ is defined specifically as "a Federal permit under a limited access system to harvest a quantity of fish, expressed by a unit or units representing a percentage of the total allowable catch of a fishery that may be received or held for exclusive use by a person" (Public Law). Quotas are generally divisible and transferable and can be traded or sold under a market system. In keeping with Western ideals that markets are the best way to provide efficiency, economic growth and social welfare, linking fisheries management to economic markets is a natural progression in fishery policy (NRC). By assigning portions of the TAC to individual fishers or vessels, the incentive to race for fish is eliminated. This should reduce overcapitalization of fishing fleets, improve safety and ideally spread the fish catch evenly throughout the season, resulting in a higher market value for fish. Additionally, since quotas are clearly designated, monitoring and enforcement should be straightforward maintaining total catch below or at the TAC.
Managing fisheries through property rights is not a new concept in fact traditional societies regularly implement similar strategies. In many Pacific Island countries, villages, tribes or even individual families have exclusive rights over certain fishing grounds and have control over who fishes in these areas. This traditional system has worked effectively for centuries because the privilege of "owning" a portion of the sea, comes with an associated responsibility to harvest the resource sustainably. Unfortunately, using this system, in the form of IFQs, in developed fisheries of the West has been problematic. Of primary concern is the initial allocation of quotas. Permits are generally given to individuals or vessels based on catch history over several years. Questions of equity arise as new fishers are excluded from the allocation and fishers who have harvested large quantities of fish in the past (perhaps unsustainably) are allocated the largest share of the TAC. Other concerns center around the consolidation of quota shares by large industrial vessels that have the money and power to buy out smaller boats. This creates a corporate structure, effectively destroying small fishing communities and creating serious social consequences. For example in New Zealand, 80% of quotas are owned by 10% of the permit holders and in Iceland 700 of the 1,000 small boat fishermen sold their quota to industrialized fishing boats (Cape Cod Commercial Hook Fishermen's Association).