This Fishery is Happy As a Clam

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Appeared in the National Post, January 2, 2003
Headlines of fisheries fiascos in Canada are nothing new. The collapse of cod stocks on the East Coast and bickering over salmon allocations on the West Coast have brought the competence of our fisheries managers into question. But what haven’t made the headlines are management changes that have saved many of Canada’s smaller fisheries. The geoduck (pronounced gooey duck) clam fishery on the West Coast is one such example.

By the late 1980s the geoduck fishery was in serious trouble. To control catches, managers had shortened seasons to the point that fishermen called geoduck a “shotgun” fishery. Despite short openings, actual catches consistently exceeded those allowed by the Department of Fisheries and Oceans (DFO)--in one year by 80 percent. The “shotgun” fishery led to supply gluts and reduced the availability of live product throughout the rest of the year, which meant lower prices. Production costs escalated as fishermen put more resources into catching as much as possible during the short season.

These problems were symptoms of a fundamental management flaw: ignoring the power of incentives. If there is no fisheries management, an obvious problem arises: too many fishermen chase too few fish, which sooner or later depletes stocks. Without management, the incentive is to catch as many fish as possible before someone else does.

A preliminary stage in the evolution of many fisheries is the introduction of catch limits, a moratorium on new licenses and regulations that limit fishing times and fishing techniques. While these ideas sound sensible, they provide only a short-term fix.

Why doesn’t controlling the number of fishermen in the fishery work? Because fisherman still operate under the same basic incentive to catch as many fish as possible, before another fisherman gets them. Regulating effort by shortening openings or implementing gear restrictions doesn’t work either. Fishermen are still racing to catch fish and have strong incentives to work around new regulations. Restrict boat length, for example, and boats get wider.

While these problems are well understood by academics, fisheries managers, and fishermen, many fisheries continue to hobble along from crisis to crisis by trying variations of the same management theme. Not in the geoduck fishery.

In 1988 the geoduck industry association asked DFO to alter radically the way the fishery was managed by implementing an individual quota (IQ) program. Under the program, the allowable catch is allocated in equal shares to license holders. IQs change incentives in fisheries by essentially eradicating the race for fish. If you know how many clams you can catch before unmooring your boat, you are no longer competing with other fishermen to catch as much as possible as quickly as possible.

It has been more than ten years since IQs were introduced in the geoduck fishery, and evidence suggests the fishery has changed for the better. In six of the ten years preceding the introduction of IQs, harvests exceeded allowable catches by an average of 30 percent. In the twelve years following the introduction of IQs, catches exceeded allowable catches in 4 years; but these overages -overage is the technical term in fisheries parlance for exceeding the allowable catch - have averaged less than 1 percent of the allowable catch.

After quotas were introduced, prices increased likely as result of longer openings, which allowed fishermen to sell more of their product fresh. The increase in geoduck prices increased revenues for fishermen, despite fewer catches. Profitability increased not only due to higher prices, but also due to lower fishing costs. According to a 1991 DFO report evaluating the impact of IQs, “Cost savings have been identified in the areas of vessel fuel consumption and labour/material used in harvesting.”

The increased profitability of the industry was good news for taxpayers too. Prior to the introduction of IQs, the only fee geoduck harvesters paid was a $10 annual license to DFO. With the introduction of IQs, industry agreed to pay additional third-party monitoring costs and to pay for additional management and research. License fees also increased from $10 per year to $3,615 in 1996 and $7,345 per year in 2001.

The strongest evidence that the management change has been successful comes from fishermen themselves. A survey of individuals representing 38 of the 55 licenses in the fishery revealed that since the introduction of individual quotas, 92 percent believe that overall conservation has improved, 100 percent believe that profitability has improved, and 100 percent believe that the overall impact on the fishery has been positive.

Allocating individual fishermen a share of the catch through individual quotas has transformed the geoduck fishery. Today, it is considered a model for other fisheries. Harvesters in the industry should be commended for suggesting the management change. The Department of Fisheries and Oceans should be commended for having the vision to implement it.

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