commercial fisheries economics program - noaa€¦ · commercial fisheries economics program office...

Commercial Fisheries Economics Program

Drew KittsOffice of Science and Technology

Economics & Social Analysis DivisionScience Program ReviewSeptember 26 – 28, 2017

OverviewIntroduction

Accomplishments within the program’s 7 major areas of focus

Data Query Tools

My Current Research

Strengths, weaknesses, opportunities, threats

U.S. Department of Commerce | National Oceanic and Atmospheric Administration | NOAA Fisheries |

Presentation material reflects:• Work of previous Commercial Program Leads• Ayeisha Brinson – on detail with Office of General Council• Economists at Science Centers

Commercial Economics Program website: www.st.nmfs.noaa.gov/economics/fisheries/commercial/index


Introduction

https://www.st.nmfs.noaa.gov/economics/fisheries/commercial/index

Commercial Fisheries Economics ProgramNOAA Fisheries conducts a wide range of commercial fisheries economic analyses and related activities.

• Enables NOAA Fisheries to assess the magnitude and distribution of costs/benefits associated with fisheries management decisions.

• Directly supports NOAA Fisheries stewardship goal of maximizing benefits to the Nation while ensuring the long-term sustainability of all living marine resources.


Major areas of focus• Evaluate costs and earnings of commercial

fishing businessesCost data collections Cost and earning reports

• Measure economic performance of fisheries Economic performance of catch share programsFisheries Economics of the United States reportsOther related publications

• Regional economic impacts• Spatial choice behavior• Capacity and technical efficiency measurement• Allocation of resources among user groups• Market dynamics and consumer preferences

Cost and Earnings of Commercial Fishing Businesses


Use of Commercial Fisheries Cost DataApplications to Management and Ecosystem Research• Estimate net revenue and profits• Conduct cash flow assessments• Estimate economic impacts (jobs, sales, etc.)• Benefit-cost analysis of fisheries regulations

(e.g., gear restrictions, time and area closures, bycatch limits, rebuilding plans)• Benefit-cost analysis of proposed projects affecting fisheries

(e.g., dam removal)• Natural resource damage assessments (e.g., oil spills)• Ecosystem modeling, including climate-related affects



Cost and Earnings ofCommercial Fishing BusinessesHistory of S&T support for data collection:• $600k in 1999 from Fisheries leadership• Dedicated funding of $200k per science center since 2001• $100k each for Southwest and Pacific Islands• Reduced by 5.5% in 2013 (Center tax)• Additional reduction of 20% next year `• Alaska – cost recovery funds are available for cost data collection.

Only needed $95k last year and $62k this year.• Some work funded separately through RFP

Cost and Earnings of Commercial Fishing BusinessesHighlights:• Grew from 3 collection programs in 2001 to 18 programs currently• 7 of 18 programs are…

• mandatory (first one in SE – critical support from Vishwanie Maharaj)• a census• trip costs, rest are annual

• Mix of survey vehicles: mail, web, telephone, in-person, logbook, observer• Paperwork Reduction Act clearance documents supported by S&T. Also

created national clearance package.• History of data collections and snapshot of all programs as of 2014 available in:

Thunberg, E., et.al. 2015. A Snapshot of 2014 NOAA Fisheries Commercial Fishery Cost Data Collection. U.S. Dept of Commer., NOAA Technical Memorandum NMFS-F/SPO-154, 331 p. http://spo.nmfs.noaa.gov/tm/TM154.pdf


TOR 2a

http://spo.nmfs.noaa.gov/tm/TM154.pdf

CFEAI (Commercial Fisheries Economic Assessment Index)

Purpose: identify data collection gaps and prioritize funding requests

• Tracks 3 data collection elements:• Revenue• Operating costs• Fixed costs

• Tracks 2 economic assessment elements:• Returns above operating costs• Profit

• Tracking began in 2010


TOR 1

CFEAI Score 2010-2018


Perc

ent o

f Max

imum

Sco

re

Total CFEAI Score Revenue Operating Costs Fixed Costs Returns over op costs Profit

100%

50%

Collection of U.S. Commercial Fisheries Costs by Region


Operating Costs (OC)

Fixed Costs (FC)

Overview• 2001: NMFS implemented initiative to improve

commercial fisheries economic data.

• 2016: All regions improved coverage.• OC Coverage Rates:

• 30%+ in most regions• 80%+ in NE and Atlantic HMS

• FC Coverage Rates:• 20%+ in most regions• 80%+ in some regions

Methods• Data collected using variety of methods

• Mail, telephone, in-person, web, and add-ons• Mandatory and voluntary surveys

• FC collected at annual level.• OC collected at trip level for some fisheries;

at annual level for others. • Periodicity: Logbook/observer program add-ons

ongoing; other surveys on 1-7 yr intervals.

Coverage by region/fishery

Percent of Fisheries with Fishing Vessel Cost Data (2001-2016)

https://www.st.nmfs.noaa.gov/Assets/economics/images/collectionUSCommercialFisheriesCosts.jpg


Cost and earnings reports from all Centers


www.st.nmfs.noaa.gov/economics/fisheries/commercial/cost-and-earnings-reports

Summaries of…

Data Survey methods

Response rates Etc.

http://www.st.nmfs.noaa.gov/economics/fisheries/commercial/cost-and-earnings-reports


Barriers to cost data collections:

• Survey fatigue/response rate• Demand on staff time• NE: significant institutional barrier to making

mandatory• Auditing of data difficult• Paperwork Reduction Act



Examples of analyses that use cost data:

• Murphy T, Kitts A, Demarest C, Walden J. 2015. 2013 Final report on the performance of the northeast multispecies (groundfish) fishery (May 2013 -April 2014). US Dept Commer, Northeast Fish Sci Cent Ref Doc. 15-02; 106 p. doi: 10.7289/V5XS5SB9 https://www.nefsc.noaa.gov/publications/crd/crd1502/

• Walden, John & Kitts, Nolan. (2014). Measuring fishery profitability: An index number approach. Marine Policy. 43. 321–326. 10.1016/j.marpol.2013.07.002. http://www.sciencedirect.com/science/article/pii/S0308597X13001449

• Carl Lian , Rajesh Singh , and Quinn Weninger , "Fleet Restructuring, Rent Generation, and the Design of Individual Fishing Quota Programs: Empirical Evidence from the Pacific Coast Groundfish Fishery,"Marine Resource Economics 24, no. 4 (2009): 329-359. https://www.nwfsc.noaa.gov/news/events/program_reviews/2017/documents/Fleet%20Restructuring%20Rent%20Generation%20and%20the%20Design%20of%20Individual%20Fishing%20Quota%20Programs%20Empirical%20Evidence%20from%20the%20Pacific%20Coast%20Groundfish.pdf

• Jerry Leonard & Erin Steiner (2017) Initial Economic Impacts of the U.S. Pacific Coast Groundfish Fishery Individual Fishing Quota Program, North American Journal of Fisheries Management, 37:4, 862-881. https://www.nwfsc.noaa.gov/news/events/program_reviews/2017/documents/Initial%20Economic%20Impacts%20of%20the%20U%20S%20Pacific%20Coast%20Groundfish%20Fishery%20Individual%20Fishing%20Quota%20Program.pdf


https://www.nefsc.noaa.gov/publications/crd/crd1502/

http://www.sciencedirect.com/science/article/pii/S0308597X13001449

https://www.nwfsc.noaa.gov/news/events/program_reviews/2017/documents/Fleet%20Restructuring%20Rent%20Generation%20and%20the%20Design%20of%20Individual%20Fishing%20Quota%20Programs%20Empirical%20Evidence%20from%20the%20Pacific%20Coast%20Groundfish.pdf

https://www.nwfsc.noaa.gov/news/events/program_reviews/2017/documents/Initial%20Economic%20Impacts%20of%20the%20U%20S%20Pacific%20Coast%20Groundfish%20Fishery%20Individual%20Fishing%20Quota%20Program.pdf


Processor survey• 2014: Add-on to annual survey of seafood processors and stand-alone survey

• 2015: stand alone survey

• Purpose: improve estimation of economic impacts of regulations

• Data collected:• Number of employees• Hours worked• Weight and cost of purchases, by species• Other revenues collected

• Report forthcoming


Measure EconomicPerformance of Fisheries


Some regions measured performance of their catch share fisheries

S&T convened workshops over 3-year period to developperformance indicators for all CS fisheries

Tier 1 PMs – readily available data for all programs

Tier 2 PMs – data available in some regions

Tier 3 PMs – require substantial research and development

Extended approach to non-catch share fisheries – Phase II

Economic Performance of Catch Share Fisheries


TOR 2b&c, 5


Baseline Period – average of 3 yrs prior to catch share program implementation

Performance Measure DescriptionQuota allocated to CS program Annual quota of combined catch share program species, in terms of weight

Aggregate landings Annual total weight of combined catch share program species generated by vessels that fish quota.

Quota utilization rate Aggregate landings/quota allocated to CS program

Entities holding share Annual total number of entities/individuals/vessel owners/permit holders (depending on allocation in catch share program) receiving quota share at the beginning of the year.

Active vessels Annual number of vessels that fish quota and landing one or more pounds of any catch share program species.

Season length Number of days per calendar year or fishing year that the catch share program fishery is open.

Trips Annual total number of trips taken by vessels fishing quota on which one or more pounds of any catch share program species were landed.

Days at sea Annual total number of days absent on trips taken by vessels fishing quota on which one or more pounds of any catch share program species were landed.

Revenue fromcatch share species

Annual total ex-vessel revenue of combined catch share program species generated by vessels that fish quota.

Revenue from non-catchshare species

Aggregate revenue from non-catch share species caught on catch share program trips(see trip definition above).

Other fishery revenue Annual total revenue for active vessels in this catch share program on trips not included in this catch share program. (This refers to specific program for which performance measures are reported.)

Tier 1 CS Performance Indicators


Performance Measure DescriptionTotal Factor Productivity The ratio of aggregate outputs to aggregate inputs

Biomass Adjustment The biomass adjustment factor for the ration of the biomass index to the previous time period

Gini Coefficient(Sum (2*i-n-1)xi)/n2u where Sum denotes the sum from i = 1 to n; i is the entities rank order in ascending order; x is annual catch share species revenue for entity i; n is the number of entities; and u is mean revenue.

ACL exceeded Y/N Was the ACL exceeded for any species/stock within the catch share program? Answers should be: Y/N/NA

ACL exceeded species If the ACL was exceeded, please list the appropriate species/stock where the ACL was exceeded.

Share Cap in Place Y/N Is there an ownership or allocation cap in place? An ownership share and/or allocation cap is any measure consistent with the MSA LAPP. Answers should be: Y/N/NA

Share Cap % The percentage of ownership share and/or allocation cap. If the share cap is a range, enter the range in the comments section.

Cost Recovery Fee Program Y/N Is the cost recovery fee program in place? Answers should be: Y/N/NA

Cost Recovery Fee Amount Annual amount collected for cost recovery

Tier 1 CS Performance Indicators (cont.)


Performance Measure Description

ACL or Quota/TAC Combined ACL for all species in the fishery, in terms of weight, as defined above. If no ACL, provide the combined Quota/TAC.

Aggregate landings Annual total weight, as defined above, of all species in the fishery landed on trips attributed to the fishery in a given year, where year is defined as above.

Number of permits Number of uniquely permitted vessels for the fishery at a given point in a year, where year is defined as above.

Active vessels Number of vessels with landings from trips attributed to the fishery in a given year, where year is defined as above.

Season length Number of days the fishery is open in a given year, where year is defined as above.

Trips Annual total number of trips attributed to the fishery in a given year, where year is defined as above.

Days at sea Number of days absent on trips attributed to the fishery in a given year, where year is defined as above.

Revenue from speciesin fishery

Total ex-vessel revenue from species in the fishery landed on trips attributed to the fishery in a given year, where year is defined as above.

Revenue from species not in fishery

Total ex-vessel revenue from species not in the fishery landed on trips attributed to the fishery in a given year, where year is defined as above.

Tier 1 Non-CS Performance Indicators


Performance Measure Description

Total Factor Productivity The ratio of aggregate outputs to aggregate inputs

Biomass Adjustment The biomass adjustment factor for the ration of the biomass index to the previous time period

Gini Coefficient(Sum (2*i-n-1)xi)/n2u where Sum denotes the sum from i = 1 to n; i is the entities rank order in ascending order; x is annual species revenue for vessel i; n is the number of vessels; and u is mean revenue.

Limited Entry Y/N Is the fishery or a component thereof under a limited entry management program? (Y/N/NA)

Limited Entry Components If one or more of the components of the fishery is under open access, please list the component(s).

ACL or Quota/TACexceeded Y/N

Was the ACL or Quota or TAC exceeded for any species/stock within the fishery? Answers should be: Y/N/NA

ACL exceeded species Please list the appropriate species/stock where the ACL or quota or TAC was exceeded.

Tier 1 Non-CS Performance Indicators (cont.)

• At various levels of aggregation• Quota pound lease pricesNet revenue

Vessel productivity(Malmquist index)

Profits

Rent(and quota share prices)

Vessel safety(accident/injury rates,

number of rescue events)• Employment demographics• Changes in crew payCrew information

Tier 2 Performance Measures


Well-being

Individual physical, mental and emotional

Community impacts

Vulnerability

Resilience

Attitudes toward the environment/stewardship

Tier 3 Performance Measures


The Economic Performance of U.S. Catch Share ProgramsBrinson, A.A. and E. M. Thunberg 2013. The Economic Performance of U.S. Catch Share Programs. U.S. Dept. of Commer., NOAA Technical Memorandum NMFS-F/SPO-133, 160 p.www.st.nmfs.noaa.gov/Assets/economics/catch-shares/documents/Catch_Shares_Report_FINAL.pdf


Performance Measure Report – results as of 2010

http://www.st.nmfs.noaa.gov/Assets/economics/catch-shares/documents/Catch_Shares_Report_FINAL.pdf

Internal website• Annually, each region produces PMs for CS and non-CS fisheries• Results are uploaded to central repository• Fact sheets produced by S&T

Fact sheets:• www.st.nmfs.noaa.gov/economics/fisheries/commercial/

catch-share-program/index


Annual Performance Measure Production

TOR 4

https://www.st.nmfs.noaa.gov/economics/fisheries/commercial/catch-share-program/index

FEUS (Fisheries Economics of the United States)


Commercial• Revenues• Prices• Landings• Economic impacts

Recreational• Number of anglers• Number of fishing days• Angler expenditures• Number of fish harvested/released• Economic impacts

Marine Economy• Establishments• Employees• Receipts & payroll

www.st.nmfs.noaa.gov/economics/publications/feus/fisheries_economics_2015/index

https://www.st.nmfs.noaa.gov/economics/publications/feus/fisheries_economics_2014/index

Commercial Fishing Returns Working Group

Economistsfrom all regions

NMFS guidance document• Various measures

of returns –financial/economic

• Consistent approaches and terminology

Topics• Capital Costs• Labor costs• Quota costs• Cost allocation• Index

approaches


TOR 2b&c, 3, 4

Guidance on Fishing Vessel Risk Assessments and Accounting for Safety at Sea in Fishery Management DesignLambert, D.M., E.M. Thunberg, R.G. Felthoven, J.M. Lincoln, and W.S. Patrick. 2015. Guidance on Fishing Vessel Risk Assessments and Accounting for Safety at Sea in Fishery Management Design. U.S. Dept. of Commer., NOAA. NOAA Technical Memorandum NMFS–OSF-2, 56 p. http://www.nmfs.noaa.gov/sfa/publications/technical-memos/nmfs_osf_tm2.pdf

Safety Incidents in the West Coast Catch Shares FisheriesPfeiffer, Lisa. 2016. Safety Incidents in the West Coast Catch Shares Fisheries. U.S. Dept. of Commer., NOAA. NOAA Technical Memorandum NMFS-F/SPO-160, 23 p. http://spo.nwr.noaa.gov/tm/TM160.pdf


Fishing Safety

http://www.nmfs.noaa.gov/sfa/publications/technical-memos/nmfs_osf_tm2.pdf

http://spo.nwr.noaa.gov/tm/TM160.pdf

U.S. Catch Share Markets: A Review of Characteristics and Data AvailabilityHolland, D., et. al. 2014. U.S. Catch Share Markets: A Review of Characteristics and Data Availability. U.S. Dept. of Commer., NOAA Technical Memorandum NMFS-F/SPO-145, 67 p.http://spo.nmfs.noaa.gov/sites/default/files/TM145_0.pdf

US catch share markets: a review of data availability and impediments to transparent marketsHolland, Daniel S., et. al., (2015), US catch share markets: a review of data availability and impediments to transparent markets, Marine Policy, 57, issue C, p. 103-110http://EconPapers.repec.org/RePEc:eee:marpol:v:57:y:2015:i:c:p:103-110

Impact of quota trading on net revenues in the Northeast U.S. groundfish fisheryKitts A, Demarest C. 2013. Impact of quota trading on net revenues in the Northeast U.S. groundfish fishery. US Dept Commer, Northeast Fish Sci Cent Ref Doc. 13-19; 24 p. https://www.nefsc.noaa.gov/publications/crd/crd1319/


Quota Values

http://spo.nmfs.noaa.gov/sites/default/files/TM145_0.pdf

http://econpapers.repec.org/RePEc:eee:marpol:v:57:y:2015:i:c:p:103-110

https://www.nefsc.noaa.gov/publications/crd/crd1319/

Regional Economic Impacts


S&T Supported Economic Impact Projects

Interactive Fisheries Economic

Impacts Tool

National IMPLAN model

www.st.nmfs.noaa.gov/apex/f?p

=160:7::::::

Purchase IMPLAN data

for use in Centers

Managedby Scott

Steinback(NEFSC)

Data collection programin Alaska

$200k/yr to supplement

IMPLAN data

Hawaiimodel


TOR 2b&c, 3, 4, 5

https://www.st.nmfs.noaa.gov/apex/f?p=160:7::::::

Spatial Choice Behavior


TOR 2b&c, 3, 4, 5

FishSET – Spatial Economics Toolbox for Fisheries


Capacity and TechnicalEfficiency Measurement


Capacity and TE Toolbox:• Built on earlier capacity work• Literature, examples, and code• Data Envelopment Analysis using GAMS• www.st.nmfs.noaa.gov/economics/tools/

capacity-technical-efficiency/index• Largely efforts of John Walden at NEFSC


Capacity andTechnical Efficiency Measurement

TOR 2b&c, 3, 4, 5

http://www.st.nmfs.noaa.gov/economics/tools/capacity-technical-efficiency/index

• Lowe Factor Productivity Index (outputs/inputs) for allcatch share fisheries.• Example of effort to move Tier II PM to Tier I

• Productivity Change in U.S. Catch Shares FisheriesWalden, J., et. al. 2014. Productivity Change in U.S. Catch Shares Fisheries. U.S. Dept. of Commer., NOAA Technical Memorandum NMFS-F/SPO-146, 137 p. www.st.nmfs.noaa.gov/Assets/economics/catch-shares/documents/TM146_Productivity.pdf


Capacity andTechnical Efficiency Measurement

http://www.st.nmfs.noaa.gov/Assets/economics/catch-shares/documents/TM146_Productivity.pdf

Allocation of Resources Among User Groups


Allocation of Resources Among User Groups2014 allocation workshop

• Gathering of academic and agency economists to discuss issues, methods, and models

• Presentations here: www.st.nmfs.noaa.gov/economics/fisheries/commercial/allocation-of-resources-among-user-groups


TOR 2b, 3, 4

https://www.st.nmfs.noaa.gov/economics/fisheries/commercial/allocation-of-resources-among-user-groups

Market Dynamicsand Consumer Preferences


Objective: understand the markets for fish and shellfish resources• Retail level and other levels along the supply chain• Interactions between U.S. managed resources with foreign supplies• Consumer preferences, direct markets, market structure, and seafood labeling

Some publications here (up to 2012): https://www.st.nmfs.noaa.gov/economics/publications/commercial/index

See this for PIFSC (scroll down): https://www.pifsc.noaa.gov/economics/research_themes.php


Market Dynamicsand Consumer Preferences

TOR 2b&c, 3, 4, 5

https://www.st.nmfs.noaa.gov/economics/publications/commercial/index

https://www.pifsc.noaa.gov/economics/research_themes.php

Sampling of others:• Fewer Fish for Higher Profits? Price Response and Economic

Incentives in Global Tuna Fisheries ManagementSun, C.H., F.-S. Chiang, P. Guillotreau, D. Squires, D.G. Webster, and M. Owens. In press. “Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management.” Environmental and Resource Economics.

• Alaska FSC – markets and trade: www.afsc.noaa.gov/REFM/Socioeconomics/current_research.php#marketstrade

• An Inverse Demand System for New England Groundfish. American Journal of Agricultural EconomicsLee, M-Y. A and E.M. Thunberg. An Inverse Demand System for New England Groundfish. American Journal of Agricultural Economics. In Press.

• Domestic and Imports Sources of Supply to the U.S. Shrimp Market and Anti-dumping DutiesMarvasti, A. and D.W. Carter. 2016. Domestic and Imports Sources of Supply to the U.S. Shrimp Market and Anti-dumping Duties. Journal of Economic Studies. 43(6): 1039-1056


Market Dynamics and Consumer Preferences

http://www.afsc.noaa.gov/REFM/Socioeconomics/current_research.php#marketstrade

Data Query Tools


• https://dataexplorer.northwestscience.fisheries.noaa.gov/fisheye/

Northwest FSCFISHEyE

• Self-service online tool for analyzing routine commercial regulations

• Annual catch limits, minimum size limits, trip limits, time/area closures

Southeast FSC Economic

Web-BasedQuery System


Data Query Tools

TOR 2b&c, 4, 5

https://dataexplorer.northwestscience.fisheries.noaa.gov/fisheye/

Northeast FSC

• Logbook, dealer, and permit database query tool• Landings, revenue, effort, etc.

by region/state/port/gear• Internal users – access to raw

confidential data

• Market news, quota pound prices, international trade,fishing activity maps


Data Query ToolsSouthwest FSC –PACFIN Fishing Communities Data Mart

• Socio-economic and demographic data at fishing community level• Employment, wages, home

prices, poverty levels, etc.

Pacific Island FSC – Data visualization tools• Retail prices: http://52.33.119.245:3838/fishretailstudy/• Future

• PIFSC data portal – many features


Data Query Tools

http://52.33.119.245:3838/fishretailstudy/

My Current Research


• Vessel ownership patterns in New England groundfish fishery

• Fishing fleet and fisher income diversity• recently accepted in PNAS: Holland et. al. The Impact of Catch Shares on

Diversification of Fishers’ Income and Risk

• Correcting for biases in sea sampling data while estimating commercial fishing trip costs

• Value of quota in the New England groundfish fishery

• Characteristics of quota market in NE groundfish


My Current Research

Strengths, Weaknesses,Opportunities, Threats


Strengths• Highly collaborative/cooperative relationship with science centers

and with other HQ divisions (SF, etc.)

• Dual function of staff – facilitation role and own research

• Utilize a variety of support initiatives as planning tools• Dedicated funding and CFEAI for data collection planning• Decision support and data query tools• Performance measures

Weaknesses• Inconsistency in types of data collected among regions –

cross-regional comparisons difficult

• Data sharing difficult – between regions and with outside researchers


SWOT – Commercial Fisheries Program

Opportunities• Facilitate data sharing mechanisms

• Example: platform for running models without seeing confidential data

• Provide technical support for putting models into production mode

Threats• Overall declines in budget• Center taxing of S&T project funding• Difficulties filling vacancies


SWOT – Commercial Fisheries Program

Questions


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