fishery economic status report

abare research report 07 19

abar

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nova

tion

in e

cono

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fishery economic status report

paul newton roslyn wood david galeano simon vieira and richard perry

october 2007

abare abareconomicscom

copy Commonwealth of Australia 2007

This work is copyright The Copyright Act 1968 permits fair dealing for study research news reporting criticism or review Selected passages tables or diagrams may be reproduced for such purposes provided acknowledgment of the source is included Major extracts or the entire document may not be reproduced by any process without the written permission of the Executive Director ABARE

ISSN 1037-8286 ISBN 978-1-921448-02-7

Newton P Wood R Galeano D Vieira S and Perry R 2007 Fishery Economic Status Report ABARE Report 0719 Prepared for the Fisheries Resources Research Fund Canberra October

Australian Bureau of Agricultural and Resource Economics GPO Box 1563 Canberra 2601

Telephone +61 2 6272 2000 Facsimile +61 2 6272 2001 Internet wwwabareconomicscom

ABARE is a professionally independent government economic research agency

ABARE project 3160

ii

fishery economic status raquo abare research report 0719

foreword

The inaugural release of the Fishery Economic Status Report brings together available indicators of the economic performance of each of the diverse fisheries managed by the Australian Fisheries Management Authority (AFMA) The indicashytors are central to AFMA industry and community assessments of fisheries performshyance and AFMArsquos performance in pursuit of its objective of maximising economic efficiency in fisheries management Many regional communities rely on fisheries being sustainable and profitable and the wider community too expects Commonshywealth resources to be managed effectively over time

This report can be used in conjunction with the Bureau of Rural Sciences Fishery Status Reports for an indication of the biological and economic health of Australian Government managed fisheries

Phillip Glyde Executive Director

October 2007

iii


acknowledgments

The authors acknowledge the contributions of Laura Hohnen Hugh Green and Anthea McQueen in the compilation of this report Thanks to Dr Nick Rayns Mary Lack Cathy Dichmont Neil Garbutt Leanna Tedesco Brenda Dyack Peter Gooday Tom Kompas and Don Gunasekera for providing valuable comments The authors also gratefully acknowledge the support of the Fisheries Resources Research Fund

iv


contents

overview 1

1 introduction 9

economics of fishery management 11 fisheries management options 15 economic performance indicators 18 how much to spend on performance monitoring 18 harvest strategy policy 21

2 production trade and costs 22

Commonwealth fisheriesrsquo production 22 exchange rates and Australian fisheries trade 24 fuel prices and fishing costs 28 lsquoSecuring our Fishing Futurersquo adjustment package 29

3 the fisheries 31

4 large fisheries 32

eastern tuna and billfish fishery 32 Heard Island and McDonald Island fishery 45 northern prawn fishery 50 southern bluefin tuna fishery 60 southern and eastern scalefish and shark fishery 69 Torres Strait fisheries 95

5 small fisheries 107

Bass Strait central zone scallop fishery 110 Coral Sea fishery 117 Macquarie Island toothfish fishery 121 Norfolk Island fishery 125 north west slope trawl fishery 128

v


skipjack fishery 132 small pelagic fishery 136 southern squid jig fishery 140 South Tasman Rise fishery 148 western deepwater trawl fishery 151 western tuna and billfish fishery 153

6 commercial fishing and regional communities 160

home ports and unloading ports of Commonwealth fisheries 160 employment in commercial fishing seafood processing and seafood wholesaling 163 employment in ports servicing Commonwealth fisheries 164

references 186

appendixes

A estimating the economic performance of Commonwealth managed fisheries 177

B glossary and abbreviations 181

vi


boxes 1 AFMA objectives 9 2 maximum economic yield and the open access equilibrium 13 3 economic performance indicators and tools 19 4 calculating the gross value of production for the

Commonwealth southern bluefin tuna fishery 24 5 catches of squid in other Commonwealth fisheries 143 6 Indian Ocean Tuna Commission 160

fi gures 1 net economic return (the difference between fishing costs

and revenue) is maximised at MEY 13 2 real gross value of Australian fisheries production 22 3 value of production of major Commonwealth fisheries

2005-06 23 4 real value of Commonwealth fisheries production and the

USndashAustralian exchange rate 24 5 value of Australian fisheries exports 2005-06 25 6 real gross value of Australian fisheries exports 26 7 real Australian export prices for key species 26 8 real value of exports of edible fisheries products

by destination 26 9 Japanese exchange rate and yen price of key export

species to Japan 27 10 Australian imports of edible fisheries products 2005-06 27 11 real value of Australian imports of edible fisheries products

by source 28 12 real average retail price of diesel fuel across Australian

capital cities 29 13 volume of production ndash eastern tuna and billfish fishery 35 14 value of production ndash eastern tuna and billfish fishery 35 15 net economic returns ndash eastern tuna and billfish fishery 42 16 reported catch by species ndash CCAMLR subdivision

encompassing the Heard Island and McDonald Island fishery 46 17 volume of production ndash northern prawn fishery 52 18 value of production ndash northern prawn fishery 52

vii


19 JapanndashAustralia exchange rate 52 20 destination of Australian prawn exports 2005-06 53 21 source of Australian imports of prawn products 2005-06 53 22 net economic returns ndash northern prawn fishery 58 23 volume of production ndash southern bluefin tuna fishery 62 24 value of production ndash southern bluefin tuna fishery 62 25 value of southern bluefin tuna exports by processing method 62 26 reported catch of southern bluefin tuna by nation 65 27 movement of southern bluefin tuna around Australia

and associated fishing effort 66 28 volume of production ndash southern and eastern scalefish

and shark fishery 73 29 value of production ndash southern and eastern scalefish

and shark fishery 73 30 catch as a percentage of available TAC in the southern

and eastern scalefish and shark fishery by species in 2006 88 31 Commonwealth trawl sector ndash southern and eastern

scalefish and shark fishery 89 32 gillnet hook and trap sector ndash southern and eastern

scalefish and shark fishery 89 33 number of hours trawled ndash Commonwealth trawl sector 90 34 cumulative sum of ITQ ownership March 2006ndash southern

and eastern scalefish and shark fishery 90 35 volume of production ndash Torres Strait fisheries 97 36 value of production ndash Torres Strait fisheries 97 37 volume of production ndash Torres Strait prawn fishery 97 38 value of production ndash Torres Strait prawn fishery 97 39 volume of production ndash Torres Strait tropical rock

lobster fishery 98 40 value of production ndash Torres Strait tropical rock

lobster fishery 98 41 net economic returns ndash Torres Strait prawn fishery 105 42 total factor productivity index ndash Torres Strait

prawn fishery 105 43 volume of production ndash Bass Strait central zone

scallop fishery 112

viii


44 value of production ndash Bass Strait central zone scallop fi shery 112

45 net economic returns ndash Bass Strait central zone scallop fi shery 116

46 volume of production ndash north west slope deepwater trawl fishery 129

47 value of production ndash north west slope trawl fishery 129 48 volume of production ndash southern squid jig fishery 142 49 value of production ndash southern squid jig fishery 142 50 volume of squid production in Commonwealth fisheries 142 51 value of squid and cuttlefish imports and exports 143 52 net economic returns ndash southern squid jig fishery 147 53 TAC determination ndash South Tasman Rise fishery 149 54 volume of production ndash western deepwater trawl fishery 152 55 value of production ndash western deepwater trawl fishery 152 56 volume of production ndash western tuna and billfish fishery 154 57 value of production ndash western tuna and billfish fishery 154 58 employment by community 168

maps Commonwealth fisheries 31 1 eastern tuna and billfish fishery 34 2 Heard Island and McDonald Island fishery 45 3 northern prawn fishery 51 4 southern bluefin tuna fishery 61 5 southern and eastern scalefish and shark fishery 71 6 Great Australian Bight trawl Commonwealth trawl and

east coast deepwater trawl sectors of the southern and eastern scalefish and shark fishery 72

7 gillnet hook and trap sector of the southern and eastern scalefish and shark fishery 72

8 Torres Strait fishery management area 96 9 Bass Strait central zone scallop fishery 111 10 Coral Sea fishery 118 11 Macquarie Island fishery 122 12 Norfolk Island fishery 126

ix


13 north west slope trawl fishery 129 14 eastern zone of the skipjack tuna fishery 133 15 western zone of the skipjack tuna fishery 133 16 small pelagic fishery 137 17 southern squid jig fishery 141 18 South Tasman Rise sector of the southern remote zone 148 19 western deepwater trawl fishery 151 20 western tuna and billfish fishery 155

tables summary of economic performance of each Commonwealth fishery 3 1 comparison of input and output controls 16 2 fuel costs as a percentage of total cash costs by fishery 29 3 competitive trigger TACs for broadbill swordfish 2007

ndash eastern tuna and billfish fishery 36 4 Eastern Tuna and Billfish Fishery Management Plan 2005

ndash excerpts relating to economic efficiency 37 5 average financial performance of vessels ndash eastern tuna

and billfi sh fi shery 40 6 vessels permits hooks and shots ndash eastern tuna and billfish

fi shery 41 7 catch limits for the 2006-07 season ndash Heard Island and

McDonald Island fishery 47 8 Heard Island and McDonald Island Fishery Management

Plan 2002 ndash excerpts relating to economic efficiency 47 9 latent effort ndash Heard Island and McDonald Island fishery 49 10 Northern Prawn Fishery Management Plan 1995

ndash excerpts relating to economic efficiency 54 11 number of vessels ndash northern prawn fishery 54 12 financial performance of the fleet ndash northern prawn fishery 56 13 active permits 30 March 2006 ndash northern prawn fishery 57 14 Southern Bluefin Tuna Fishery Management Plan 1995

ndash excerpts relating to economic efficiency 63 15 CCSBT annual catch allocations 2007 to 2009 64 16 latent effort ndash southern bluefin tuna fishery 67

x


17 methods target species and number of vessels by sector ndash southern and eastern scalefish and shark fishery 74

18 total allowable catches 2007 season ndash southern and eastern scalefish and shark fishery 76

19 Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 ndash excerpts relating to economic effi ciency 77

20 endorsements surrendered under concession buyback ndash southern and eastern scalefish and shark fishery 78

21 financial performance of vessels in the Commonwealth trawl sector ndash southern and eastern scalefish and shark fishery 85

22 financial performance of vessels in the gillnet hook and trap sector ndash southern and eastern scalefish and shark fishery 86

23 sleeper holdings in the Commonwealth trawl sector ndash southern and eastern scalefish and shark fishery 91

24 preliminary optimal harvest strategies ndash southern and eastern scalefish and shark fishery 92

25 estimates of maximum sustainable yield (MSY) of tiger prawns ndash Torres Strait prawn fishery 102

26 financial performance of vessels ndash Torres Prawn fishery 103 27 latent effort ndash Torres Strait prawn fishery 104 28 Bass Strait Central Zone Scallop Fishery Management Plan

ndash excerpts relating to economic efficiency 112 29 financial performance of operators ndash Bass Strait central

zone scallop fishery 114 30 latent effort ndash Bass Strait central zone scallop fishery 115 31 Macquarie Island Toothfish Fishery Management Plan 2006

ndash exerpts relating to economic efficiency 123 32 vessels reporting skipjack catch by purse seine method 135 33 trigger limits for zones B C and D ndash small pelagic fishery 138 34 Southern Squid Jig Fishery Management Plan

ndash excerpts relating to economic efficiency 144 35 estimated financial performance of vessels ndash southern squid

jig fishery 145 36 latent effort ndash southern squid jig fishery 146

xi


37 Western Tuna and Billfish Fishery Management Plan 2005 ndash excerpts relating to economic efficiency 155

38 financial performance of operators 2001-02 ndash western tuna and billfish fishery 157

39 effort in the fishery ndash western tuna and billfish fishery 158 40 net economic returns 2001-02 ndash western tuna and billfish

fishery 159 41 home and unloading ports for Commonwealth fisheries 161 42 ABS estimates of employment in the Australian fishing

industry 163 43 ABARE estimates of employment in Australian

fishing industries 2006 164 44 employment in and Commonwealth fisheries serviced

by important fishing locations 165

timelines 1 eastern tuna and billfish fishery 33 2 northern prawn fishery 55 3 southern bluefin tuna fishery 65 4 Torres Strait prawn fishery 100 5 skipjack fishery 134

xii


overview

Fisheries managed by the Australian Fisheries Management Authority (AFMA) accounted for around 13 per cent of the gross value of production of Australian fisheries and aquaculture in 2005-06 There are a number of objectives that AFMA is bound to pursue under the Fisheries Management Act 1991 One of the objectives is to maximise the net economic returns to the Australian community from the management of Australian fisheries

Assessment against this objective is complex as it requires a comparison between the potential net economic returns available from a fishery and those that are realshyised under the prevailing management system Recently the net economic returns of Commonwealth fisheries have been affected by unfavourable movements in exchange rates and fuel prices Also competition on the domestic market from low value imports (particularly in the case of prawns and frozen fish fillets) has affected fish prices While these factors can be expected to have had a substantial impact on both current and potential net economic returns from fisheries AFMA has a role to play in ensuring that the greatest possible proportion of potential net returns are captured

A number of economic performance indicators are available to assist in assessing the economic performance of fisheries These include net economic returns as well as simpler indicators such as the level of latent effort in a fishery or the price of quota While many of these indicators have been developed for the large Commonwealth fisheries such as the southern and eastern scalefish and shark fishery and the northern prawn fishery for other fisheries particularly low value fisheries limited data mean that most indicators cannot be generated Even for some of the larger fisheries such as the eastern tuna and billfish fishery the only measures currently available are of the level of latent effort and net economic returns

While more information is valuable the collection interpretation and dissemination of data are not costless As such in some cases collecting a large amount of inforshymation may not be justifiable on benefitndashcost grounds particularly in low value fisheries However this need not preclude a low value fishery from having useful indicators In most small fisheries even a relatively inexpensive indicator such as the level of latent effort or quota sale and lease prices may provide an insight into the efficiency of the management arrangement

1


The economic performance indicators available for each Commonwealth fishery along with a summary of the overall economic performance of each fishery are shown in the following summary table For most fisheries only a limited number of indicators are available For example only three fisheries have three or more economic performance indicators Over time some of these information gaps will be addressed

Historically the overall economic performance of Commonwealth fisheries has been poor This is because past management arrangements applied catch and effort settings that did not always constrain fishers or provide the right incentives Fisheries such as the southern and eastern scalefish and shark fishery and the eastern tuna and billfish fishery have been associated either with large amounts of unused quota or with large numbers of unused permits Estimates of net economic returns for these fisheries in recent years are regularly close to zero or even negashytive The contrast is stark with fisheries for which management controls are effective mdash for example the southern bluefin tuna fishery and the northern prawn fishery have historically earned above average returns for operators

To address the issues of profitability and sustainability the Australian Government has taken steps to change the operating environment of Commonwealth fisheries significantly The Australian Governmentrsquos Securing our Fishing Future adjustment package mdash which included a $149 million voluntary concession buyback mdash has removed a large share of fishing capacity from some major Commonwealth fisheries Also the Australian Fisheries Management Authority has implemented tighter controls on catch and effort particularly for overfished stocks Finally the Australian Government has developed and released a Harvest Strategy Policy that aims to stop overfishing allow overfished stocks to recover and promote the longer term profitability of the fishing industry

It follows that in the next few years there are likely to be significant changes in many key economic indicators for Commonwealth fisheries Initially a decrease in catch and effort in some fisheries may result in lower revenues because fewer fish are being caught Over time however reduced pressure on fish stocks is expected to result in a growth in biomass For some species it may be that more can be harvested each season in the future from larger stocks To ensure the long term profitability of Commonwealth fisheries it will be important that the recent focus on management settings that allow profits to be maximised is continued Market forces alone cannot bring about economic efficiency in Commonwealth fisheries Instead management is required so that catch and effort are constrained effectively The management arrangements should also allow fishers to choose a combination of inputs that maximises their profits within sustainability and other environmental constraints

2


summary of economic performance of each Commonwealth fishery

overall economic performance

bull gross value of production and net economic returns have been falling since the early 2000s

bull exhibits some of the economic characteristics of an unmanaged open access fishery

bull introduction of TAE system is useful but will only improve efficiency if TAE restricts effort effectively

bull data on the gross value of production of the fishery are confidential

bull TACs are regularly filled which is a good indicator that profits are positive

bull environmental constraints have resulted in TACs probably set below MEY

bull ITQs provide the best chance that profits will be maximised subject to these environmental constraints

bull gross value of production and net economic returns from the fishery have been falling since the early 2000s given the appreciation of the Australian dollar and higher fuel prices

bull MEY has been adopted as the harvest strategy and management moving to TACs and ITQs is a step in the right direction

continued

3

indicatortools

eastern tuna and billfish value of quota

latent effort net economic returns

productivity indexes profit decomposition stochastic frontier analysis bioeconomic models

Heard Island and McDonald Island fishery value of quota latent effort net economic returns productivity indexes profit decomposition stochastic frontier analysis bioeconomic models

northern prawn fishery value of quota latent effort net economic returns

productivity indexes profit decomposition stochastic frontier analysis

bioeconomic models

performancestatus of tool

na

high close to zero or negative (surveyed since1994-95) ndash$83 millionin 2004-05 under development under development na na

na low na na na na na

na low positive but declining (surveyed since 1992-93) $92 million in 2003-04 na na two ABARE studies have shown that restrictions on inputs have increased the cost and decreased the efficiency of fishing optimal number of boats harvest levels and fishing days have been estimated


summary of economic performance of each Commonwealth fishery continued

indicatortools performancestatus of tool overall economic performance

southern bluefin tuna value of quota relatively high bull gross value of production from latent effort low the fishery has fallen in recent net economic returns na years with the appreciation of productivity indexes na the Australian dollar and lower profit decomposition na southern bluefin tuna prices stochastic frontier analysis na bull however ITQ management has bioeconomic models na been effective

bull low latency implies that operatorsrsquo effort is being restricted to a point below the level of effort associated with open access

southern and eastern scalefish and shark fishery value of quota low for many species bull gross value of production from latent effort high the fishery has been relatively net economic returns Commonwealth trawl stable in recent years although

(surveyed since 1996-97) it has gradually fallen in the close to zero or negative Commonwealth trawl sector ndash$43 million in 2004-05 bull in general net economic returns Gillnet hook and trap from the fishery have been (surveyed since 1998-99) falling in recent years positive and relatively constant Contributing to this fall are $23 million in 2004-05 higher fuel costs and lower

productivity indexes under development prices for some species due to profit decomposition under development increased import competition stochastic frontier analysis demonstrated that cost savings bull ITQs by themselves will not

have been realised as a result guarantee that net economic of quota trade returns form the fishery will be

bioeconomic models bioeconomic model developed for maximised In addition to ITQs five species orange roughy (eastern TACs need to be set at levels zone and Cascade Plateau) spotted that restrict operatorsrsquo effort warehou ling (trawl) and flathead Historically this does not appear The model also provides estimates of to have been the case steady state MEY harvests and optimal However the recent reduction of initial harvests to allow for stocks to many TACs and the large rebuild while maximising long term proportion of boats exiting the profits In all cases the model indi- fishery as a result of the recent cated that TACs needed to be structural adjustment package reduced from 2004 catch levels to should result in stock rebuilding maximise net economic returns and higher profits in the longer Model results are broadly term consistent with the 2007 TACs continued

4




Torres Strait prawn fishery value of quota na bull gross value of production and net returns latent effort mediumndashhigh have fallen since the late 1990s as a net economic returns positive but declining result of lower prawn prices and rising

(surveyed since 1993-94) fuel prices ndash$01 million in 2003-04

productivity indexes total factor productivity has bull high level of latent effort in the fishery increased over time has also hampered the achievement

profit decomposition na of higher net economic returns stochastic frontier analysis na bull the recent reduction in total allowable bioeconomic models na days and boat numbers may result in

a larger proportion of potential returns being captured

Torres Strait tropical rock lobster value of quota na bull there are currently no economic latent effort na performance indicators available net economic returns na bull a move to ITQs is anticipated for 2008 productivity indexes under development bull the fishery appears suited to profit decomposition na management by ITQs but it is stochastic frontier analysis na important that the TAC is set bioeconomic models na appropriately

Bass Strait central zone scallop value of quota na bull fishery closed since the beginning of latent effort high 2006 due to concerns over the status net economic returns negative for all years surveyed of the scallop stocks

ndash$08 million in 1998-99 bull fishery only open to fishing productivity indexes na intermittently since the late 1990s profit decomposition na and catches were generally low stochastic frontier analysis na during these openings bioeconomic models na bull a high level of latent effort in the fishery

over this period has hampered the achievement of high net economic returns However given that the fishery is managed with ITQs and area closures it should be possible to manage the fishery on a sustainable basis once the fishery reopens if TACs are appropriately set

continued

5



indicatortools

Coral Sea fishery value of quota latent effort net economic returns productivity indexes

profi t decomposition stochastic frontier analysis bioeconomic models

Macquarie Island fishery value of quota latent effort net economic returns productivity indexes profit decomposition stochastic frontier analysis bioeconomic models

Norfolk Island fishery value of quota latent effort net economic returns productivity indexes profi t decomposition stochastic frontier analysis bioeconomic models

north west slope trawl fishery value of quota latent effort net economic returns productivity indexes profi t decomposition stochastic frontier analysis bioeconomic models

performance status of tool

na na na na

na na na


na na na na na na na



bullcurrently no economic performance indicators available

bull given the low GVP of this fishery it is unlikely that large expenditures on management could be justified

bulldata on the gross value of production of the fishery is confidential


bull ITQs provide the best chance that profits will be maximised subject to environmental constraints


bull given the low GVP of this fishery it is unlikely that large expenditures on management could be justifi ed



continued

6



indicatortools

skipjack fishery value of quota latent effort net economic returns productivity indexes profit decomposition stochastic frontier analysis bioeconomic models

small pelagic fishery value of quota latent effort net economic returns productivity indexes profit decomposition stochastic frontier analysis bioeconomic models

southern squid jig fishery value of quota latent effort net economic returns


South Tasman Rise fishery value of quota latent effort net economic returns productivity indexes profit decomposition stochastic frontier analysis bioeconomic models


na high na na na na na


na high negative for all years surveyed ndash$08 million in 2000-01 na na na na



bullhigh levels of latent effort suggest that the fishery is operating at or near the open access equilibrium and hence profits are likely to be low

bullhigh levels of latent effort are an impediment to achieving higher net economic returns as any changes to market conditions such as increasing fish prices or falling costs will likely result in capital being drawn into the fishery and profits being dissipated


bull the move to ITQs may improve the economic performance of the fishery and limit the potential for overcapitalisation but only if TACs are set at appropriate levels


bullhigh levels of latent effort are an impediment to achieving higher net economic returns as anychanges to market conditions such as increasing fish prices or falling costs will likely result in capital being drawn into the fishery and profits being dissipated

bullfishery managed with a competitive TAC that has not been close to being filled in recent years This high level of latent effort suggests that the fishery is operating at or near the open access equilibrium and hence profits are likely to be low

continued

7



performance indicatortools status of tool

western deepwater trawl fishery value of quota na latent effort high net economic returns na productivity indexes na profit decomposition na stochastic frontier analysis na bioeconomic models na

western tuna and billfish fishery value of quota na latent effort high net economic returns $18 million in

2001-02

productivity indexes na profit decomposition na stochastic frontier analysis na bioeconomic models na na Not available


bull high levels of latent effort suggest that the fishery is operating at or near the open access equilibrium and hence profits are likely to be low

bull high levels of latent effort are an impediment to achieving higher net economic returns as any changes to market conditions such as increasing fish prices or falling costs will likely result in capital being drawn into the fishery and profits being dissipated

bull gross value of production of this fishery has been falling since the early 1990s


bull the move to ITQs may improve the economic performance of the fishery but only if TACs are set at levels that restrict catch

8

1 introduction

The Australian Fisheries Management Authority (AFMA) manages more than twenty fisheries on behalf of the Australian Government Together these fisheries accounted for around 13 per cent of the gross value of production of Australian fisheries in 2005-06 The Fisheries Management Act 1991 binds AFMA to pursue a number of objectives (box 1)

The purpose in this report is to assess AFMArsquos performance against its economic objective mdash that net economic returns to the Australian community be maximised First an outline of the economic performance indicators against which fisheries can be evaluated is provided Then for each fishery an inventory of what informashytion is currently available is presented and given the available information each fishery is evaluated according to this set of economic performance indicators

box 1 AFMA objectives

In the Fisheries Management Act the objectives that AFMA must pursue include

raquo implementing efficient and cost-effective fisheries management on behalf of the Commonwealth

raquo ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development (which include the exercise of the precaushytionary principle) in particular the need to have regard to the impact of fishing activities on nontarget species and the long term sustainability of the marine environment

raquo maximising the net economic returns to the Australian community from the management of Australian fisheries

raquo ensuring accountability to the fishing industry and to the Australian community in AFMArsquos management of fisheries resources and

raquo achieving government targets in relation to the recovery of the costs of AFMA Source AFMA( 2006f)

9


The goal in this report is to begin a system of evaluating the economic status of Commonwealth fisheries For some fisheries there is limited information on the economic performance of fisheries on which to make an assessment Over time information gaps will be addressed so that it is increasingly possible to assess the performance of fisheries and their management against economic efficiency criteria In future ABARE economic status reports will build on this information and provide ongoing monitoring and evaluation of the economic performance of Commonwealth fisheries It is important to note that in some cases it will be worthwhile to fill as many information gaps as possible However in many small value fisheries the potential benefits of filling these gaps is unlikely to outweigh the costs of doing so

This report is divided into four main sections

raquo The economics of fisheries management ndash including a framework for assessing the economic performance of fisheries economic performance indicators and how much to spend on performance monitoring

raquo Production trade and costs ndash detailing Commonwealth fisheries production Australian imports and exports of fisheries products and recent movements in exchange rates and fuel costs

raquo Assessment and description of each fishery ndash where the level of detail for each fishery is dependent on the availability of information Broad themes include

bull location bull volume and value of production and catch composition bull current and future management arrangements bull biological status (information obtained from the most recent Bureau of Rural

Sciences (BRS) Fishery Status Report 2006 mdash Larcombe et al 2007) bull financial performance and bull economic performance

raquo Employment in commercial fishing ndash information is provided on the major home and unloading ports for most Commonwealth fisheries For these ports Australian Bureau of Statistics census data for 2001 (ABS 2002) are used to show employment by major industry

10


economics of fishery management

importance of economics

Resources in fisheries have characteristics that make them different from the resources and inputs used in most other industries The major differences lie in how property rights are defined It is common in most industries that rights are specified in a way that ensures the holder of a right accrues the full costs and rewards of their action or inaction relating to the right Rights specified in this way are exclusive When rights are exclusive the costs and benefits of decisions taken are exclusive to the individual business Because of this the owners of the rights can manage resources optimally over time

However in a typical uncontrolled open access fishery rights are not exclusive Whenever a fisher catches another tonne of fish two costs are incurred that are separate from the traditional and exclusive fishing input costs of fuel labour and capital First catching an extra tonne of fish lsquothinsrsquo the fish stock making the next tonne more expensive to catch for all fishers Second the potential for these fish to reproduce is lost to all fishers in the future However because the fish stock is an unpriced input to the production process these costs are spread across all fishers and the individual fisher incurs only a fraction of the total cost of their actions In other words when a fisher is weighing up the costs and benefits of catching the next tonne they are not considering the total cost to the fishery They therefore catch more than they would if all inputs were priced thus diverting more fuel labour and capital from more valuable uses elsewhere in the economy This is the open access problem that can lead to what has been called the lsquotragedy of the commonsrsquo (Hardin 1968) and the reason why intervention by a fisheries manager is needed when fishers do not optimally manage their collective resource

Making property rights perfectly exclusive for most fisheries is usually infeasible A second option mdash vesting all rights to the fishery in a sole owner mdash would solve the problem but is not a practical policy option in most cases because existing fisheries are exploited by multiple operators Instead fisheries managers limit the extent of the problem by restricting effort or catch This has two important aspects The first is determining the level to which effort or catch should be restricted The second is the impact that management regulations have on fishing costs and revenues

Managersrsquo choices on these aspects are guided by AFMArsquos economic efficiency objective which implies that effort should be restricted to the point where the differshy

11


ence between fishing costs and fishing revenues is greatest (box 2) This is where net economic returns are maximised

Of all AFMArsquos objectives in the Fisheries Management Act 1991 the economic efficiency objective (or maximum net economic return objective) is probably the most contentious and poorly understood An objective that maximises the sustainshyable catch of a fishery mdash the maximum sustainable yield (MSY) mdash is often preferred perhaps because it maximises the gross value of production of a fishery However at this greater level of effort revenues are not increasing at as great a rate as fishing costs so profits are lower than if fishing effort was stopped at the level of effort associated with maximum economic yield (MEY) Furthermore fish stocks are denser when economic efficiency is maximised so conservation concerns are met At the same time the fishery earns the greatest profits it can over time because a target level of harvest is cheaper to catch when a fish stock is dense A profitable fishery is also more resilient to changes in key variables that affect all industries such as exchange rates and fuel prices

An economically efficient fishery will have the following three characteristics

raquo total catch and effort restricted to the point that maximises net economic returns over time allowing for the future costs of fishing and the impact of current catch on future stocks and catches mdash this prevents rational fishers from expanding their effort until all profits are dissipated This is known as fishery level efficiency

raquo revenues maximised and catching costs minimised for a given quantity of catch This can be referred to as vessel level efficiency While fishers can be relied on to choose the combination of inputs that minimises costs and maximshyises revenue for their particular operation (given the constraints imposed by fisheries management) the management measures used in a fishery can have a significant impact on the costs and revenues of fishing

raquo fisheries management services provided effectively and at least cost for the given level of management (not necessarily at lowest cost overall) mdash this is management efficiency

12


box 2 maximum economic yield and the open access equilibrium

The total revenue curve in figure 1 is derived from a biological stockndashrecruitment relationship translated into effort units showing the relationship between effort and catch in dollar amounts Every point along this curve represents an effort and catch combination that is sustainable Setting effort at EMSY means that the maximum sustainable yield (MSY) is harvested generating the largest total revenue The total cost curve gives the cost of applying each effort level

Although total revenue is maximised at EMSY this is not where total profits are maximshyised Maximum economic yield (MEY) is the level of catch that maximises profit the difference between total revenue and total cost In figure 1 this occurs at EMEY with a corresponding catch value of $MEY This is where net economic returns are maximshyised It is also where the optimal amount of societyrsquos scarce resources are allocated to the fishery including fishing vessels labour etc

Typically a fishery will not gravitate to the effort level associated with maximum economic yield without intervention from a management authority Instead effort is most likely to settle at a point known as the open access equilibrium (EOA in figure 1)

In an open access fishery all fishers acting in their own interest are induced to fish more but because they do not take into account the effect of their fishing activity on other fishers in the fishery mdash including the increased cost of harvesting because of stock depletion mdash all fishers are eventually worse off There is no incentive for one fisher to reduce their effort because the profits this would create will be dissipated by another fisher expanding their effort At EOA the difference between costs and

fig 1 net economic return (the difference between fishing costs and revenue) is maximised at MEY

$

$MEY

continued

thin stocks

revenue

costs

thick stocks

fishing effort EMEY EMSY EOA

13


box 2 maximum economic yield and the open access equilibrium continued

revenue is zero so there is no net economic return made from the fishery Note also that fish stocks are thinner at the open access equilibrium than stocks at MEY

MEY and EMEY are influenced by changes in fish prices (which stretch or compress the total revenue curve) and the costs of fishing which pivot the total cost curve about the origin Higher fish prices would shift MEY to the right and vice versa while higher fishing costs per unit of effort would shift MEY to the left and vice versa

In most cases reducing effort to EMEY will not lead immediately to an increase in revenues and profits However as the growth in the fish stock in each period begins to outstrip the rate of harvest the underlying stock will grow making the costs of catching a tonne of fish lower in the future The length of time it takes for the fish stock to settle at a new equilibrium population level depends on the biology of the stock

In figure 1 a discount rate of zero is assumed While a case can be made for a zero discount rate in common property resources it is an accepted practice to assume some positive discount rate to account for the fact that a harvest at some time in the future is worth less than a harvest today The effect of a positive discount rate is to move MEY closer to MSY That is if current harvest is valued more highly than future harvest it pays to work the fishery harder today resulting in smaller equilibrium stocks at MEY However if the cost of catching a tonne of fish is dependent on the size of the stock then even with a relatively high discount rate the optimal size of the stock in most cases will be larger than the size of the stock at MSY

It should also be noted that figure 1 is a simplified representation of the true process useful for explaining the general principles of fisheries economics A real bioeconomic model would account for complex factors such as uncertainty and changes in biological and economic variables over time

14


fisheries management options

For net economic returns to be maximised effort must be restricted to EMEY Fishshyeriesrsquo managers have two categories of control for this purpose

raquo input controls mdash the aim of these controls is to prevent catch and effort from gravitating to the open access equilibrium by placing restrictions on fishing gear limiting the number of vessels operating in a fishery setting the number of days the fishery is open or controlling any other type of fishery input

raquo output controls mdash the aim of these controls is also to limit catch and effort but do so by restricting the size of the harvest Setting a total allowable catch (TAC) can provide biological protection for the fishery mdash once the predetermined catch level has been reached the fishery is closed A TAC system is most effective when the total catch is split among operators through a system of individual transferable quotas (ITQs)

Department of Agriculture Fisheries and Forestry (2003) reaffirmed the Australian Governmentrsquos position of ITQs being the preferred management approach for Commonwealth fisheries In addition the Ministerial Direction released in late 2005 stated that output controls in the form of ITQs must be implemented in all fisheries by 2010 unless a strong case is made to the Minister that this would not be cost effective or would be otherwise detrimental

ITQs work best in high value single species fisheries with stable abundance If there is good information about fish stocks fishing costs revenues and production relationships landings and discarding then the efficiency of ITQ management is enhanced Effective enforcement is also important (Rose 2002)

However a number of problems have been identified with the implementation of ITQs in some fisheries Some of these include the difficulty in setting TACs for species with variable abundance and highgrading For a more in-depth discussion of the benefits of ITQs in fisheries management see Rose (2002) and Squires et al (1995)

Of course the benefits of a system of output controls only accrue when the targets are appropriately set A system of output controls that does not restrict effort because TACs are set well above historical catch levels is not preferred to an input control that restricts effort effectively without significantly increasing the costs of fishing This is because an output controlled fishery with TACs set too high is likely to gravitate to the open access equilibrium where profits are very low Table 1 briefly outlines the advantages and disadvantages of input and output controls

15


table 1 comparison of input and output controls

output controls individual transferable quotas (ITQs) raquo ITQs are shares of a total allowable catch (TAC) that can be traded permanently or temposhy

rarily they are usually issued at the start of the fishing season raquo ITQs are used in the southern bluefin tuna fishery the Bass Strait central zone scallop fishery

the Heard and McDonald Islands and the Commonwealth trawl gillnet hook and trap and Great Australian Bight trawl sectors of the southern and eastern scalefish and shark (SESS) fi shery

raquo ITQs are to be adopted by the western tuna and billfish fishery northern prawn fishery and the small pelagic fishery and are being considered in some Torres Strait fisheries

advantages raquo provide individual fishers with a share of the TAC raquo quotas flow to fishers that are more efficient creating autonomous adjustment raquo costs are minimised for a particular level of catch and returns are maximised

disadvantages raquo establishment costs can be high as consultation is needed for new rights to be issued to

eligible concession holders raquo ITQs can encourage discarding when the TAC of one species in a multispecies fishery has

been met raquo ITQs may also promote highgrading (returning caught fish to the sea in the hope that higher

value product will be caught in the future) if price differentials and fishing costs are conducive raquo inaccurate estimates of discarding cause an inefficient TAC to be set raquo ongoing monitoring and compliance may be more costly than for input controls

comments raquo the Minister has issued a direction to AFMA that each Commonwealth fishery be managed

using output controls by 2010 unless a case can be made for why they are not appropriate for a particular fishery

raquo implementing a TACITQ system is not sufficient catch levels must be set appropriately for it to be an effective control

raquo where uncertainty in stocks is smaller than uncertainty in catch per unit effort (CPUE) output controls allow for higher and less variable net economic returns than input controls

raquo spatial controls and gear restrictions may be needed to protect other aspects of the environment

competitive total allowable catch (TAC) raquo TACs are set and the fishery is closed once the TACs are reached Individual shares are not

granted advantages raquo TACs provide management with assured maximum catch and avoid negotiation over allocashy

tion of individualsrsquo shares continued

16



competitive total allowable catch (TAC) continued disadvantages raquo there is a strong incentive for fishers to compete to maximise their catch mdash this promotes overshy

capitalisation as fishers attempt to increase their relative fishing effort raquo TACs may be seen as unfair as smaller scale fishers find it difficult to compete with large scale

fi shers

comments raquo as with ITQs spatial controls and gear restrictions may be needed to protect other aspects of

the environment raquo catch levels must be set appropriately for it to be an effective control

input controls Examples of input controls include raquo limited entry raquo boat size restrictions raquo gear restrictions (for example limits on the size of nets or number of hooks that can be used) raquo individual transferable effort units Input controls are used in many Commonwealth fisheries including the eastern tuna and billfishshyfishery the northern prawn fishery and the Torres Strait prawn fishery

advantages raquo initial management costs may be lower than for an ITQ system raquo unlikely to be any management induced highgrading andor discarding

disadvantages raquo there is a strong incentive for fishers to compete to maximise their catch resulting in overcashy

pacity and a reduction in overall returns raquo fishers will substitute unrestricted inputs for restricted inputs which pushes up the cost of fishing

mdash this lsquoeffort creeprsquo forces managers to periodically adjust input control and can make some gear redundant

raquo input controls require a two-stage process where first the targeted level of catch is identified and then the level of effort required is determined

raquo there are costs associated with the initial allocation of transferable effort units if these are adopted

comments raquo input controls prevent fishers from using the least cost combination of inputs for a given level of

catch raquo they almost always involves some level of effort creep mdash rather than the community benefiting

from improved fishing techniques gear controls are frequently adjusted to limit the amount of effective effort applied in a fishery

raquo input controls can be successful in fisheries where no input substitution is possible raquo where uncertainty over stocks is larger than uncertainty over CPUE the variability of net

economic returns is likely to be lower in an effort controlled fishery raquo input controls may be appropriate in small fisheries where the costs of implementing and mainshy

taining a system of output controls may not be feasible

17


economic performance indicators In general assessment against the economic efficiency objective is complex This is because it requires a comparison between the potential net economic returns available from the fishery and those that are realised under the prevailing manageshyment system (Gooday et al 2003) The difficulty lies in the fact that for most fishshyeries there is a great deal of uncertainty surrounding both the estimate of potential net economic returns and the returns that are actually generated in a fishery

No single indicator or methodology is universally appropriate for assessing the economic performance of all fisheries The range of indicators that may be considered include simple indicators of efficiency such as changes in the number of unused permits and the value of licences and quota to more advanced techshyniques such as economic surveys and bioeconomic models that require more information

The main tools for assessing efficiency at the vessel or fishery level are summarised in box 3 For more information on these indicators see Gooday et al (2003)

ABARE has been conducting economic surveys of major Commonwealth fisheries since the early 1990s The economic data collected during these surveys provide input to a number of indicators For example economic survey data are used to calculate net economic returns productivity indexes and profit decompositions and to provide input to the construction of bioeconomic models

how much to spend on performance monitoring An issue fundamental to the development of fishery management policies is the appropriate amount of information needed by decision makers to make informed decisions This issue applies equally to both the scientific and economic aspects of fi shery management

While a range of indicators have been presented in the previous section limited data mean that for many fisheries most indicators cannot be generated This does not necessarily mean that significant expenditure be incurred to construct indicators for all fisheries While more information is valuable the collection interpretation and dissemination of information are not costless

18


box 3 economic performance indicators and tools

indicators

net economic returns

Using economic survey data net economic returns can be calculated that provide an indication of the level of profit generated in a fishery Very low (or negative) net economic returns can suggest that the fishery is operating at close to the open access equilibrium described in figure 1 While net returns provide an indication of the current returns in a fishery they provide no indication of the potential returns from a fishery

productivity indexes

A productivity index shows whether more or less output is being produced over time with a unit of input The index is calculated by combining changes in total output (fish) to changes in total inputs such as fuel labour and capital Most recently these have been derived for the Torres Strait prawn fishery in Hanna et al (2006)

latent effort

Economic surveys of small fisheries are usually not justified precluding many of the indicators previously discussed As an alternative one indicator that is particularly important in smaller fisheries is the level of latent effort This is a measure of the amount of inactive rights that could be used in the fishery at relatively short notice Generally a permit is left inactive only when the holder determines that the profits available in the fishery are low Therefore latent effort reveals permit holdersrsquo assessment of a fisheryrsquos profitability But high latent effort is more than a sign of low profits It is also an impediment to achieving high net economic returns in the long run If profits start to be generated idle effort is drawn into the fishery and profits are competed away at a higher level of catch Stocks could be fished down relatively quickly if enough inactive effort is triggered

In a limited entry fishery latent effort is indicated by inactive permits In a quota managed fishery it manifests as unfilled quota Both are common in Commonwealth fisheries As would be expected estimates of net economic returns and latent effort are highly correlated mdash low net economic returns are associated with high levels of latency and vice versa

value of quota

Estimates of the traded value of quota is another relatively inexpensive indicator of the economic value of a fishery managed by output controls Given reasonable certainty of title and a competitive market the price at which quota is traded will reflect the present value of all future expected net returns from the fishery Prices

continued

19


box 3 economic performance indicators and tools continued

of permanent quota not only reflect expected net returns in the current period but also perceived uncertainties by market participants about the path of returns and discount rates used thereafter In fisheries for which quota constraints are binding only intermittently market value of quota may represent an option value rather than reflecting the full value expected from the catch A major difficulty in using quota lease or sale prices as an indicator of fishery profits is that market prices are not easy to observe because there is no formal mechanism currently in place to collect quota sale and lease prices

tools

profi t decompositions

Productivity gains have the potential to contribute to an increase in business profit It is also the case that factors such as stock size and the rising price of outputs and declining costs of inputs can contribute to an increase in business profit A profit index decomposition approach enables decomposition of profit into its composhynents productivity the prices of outputs and inputs and vessel capital This method offers important advantages over traditional measures of productivity in fisheries in that it provides individual firm level measures and quantifies the contribution of productivity inputs and outputs to relative profits

stochastic frontier analysis

Stochastic frontier analysis is used to estimate vessel level efficiency and is particushylarly useful in comparing efficiencies before and after a change in management arrangements This measure can be used to estimate whether or not there are losses to vessel level efficiency when input controls are introduced For example a study of the northern prawn fishery fleet estimated that vessel level efficiency fell from 75 per cent in 1994 to 68 per cent in 2000 (Kompas et al 2004b) The study attributed this partly to fishers resorting to inefficient (but unrestricted) inputs to circumvent restrictions on vessel size and power While this action may have been profit maximising for an individual fisher overall fishery efficiency was reduced

bioeconomic models

Productivity indexes profit decompositions and stochastic frontier analysis are partial indicators of the economic performance of a fishery in that they only assess vessel level efficiency In order to assess both vessel level efficiency and fishery level efficiency a bioeconomic model is required Bioeconomic models integrate scientific and financial information to determine the levels of effort and catch that maximise net economic returns mdash see for example Kompas et al (2004a) The results can be used to help managers set efficient effort and harvest levels or to estimate the net economic returns that are being forgone under the prevailing management regime

20


The optimal level of expenditure on management (including performance monitoring) occurs where the last dollar spent on the management of a fishery generates an extra dollar of profit Of course this point is very difficult to determine A problem for managers of small value fisheries in particular is making decisions with sometimes very limited information Compiling economic and biological data on a fishery may cause management costs to quickly outweigh the benefits of management (that is profits to fishers) When management costs exceed profits over a period of time a case could be made for closing the fishery under the precautionary principle

As such in some cases collecting a large amount of information may not be justifishyable on benefitndashcost grounds especially in very small fisheries In other cases fishers may not be willing to supply the data or the data simply may not exist However it is still possible for a fishery to have useful performance indicators Even a very simple measure of the degree of latent effort or quota sale and lease prices can give an indication about the efficiency of management arrangements In some cases managers will already have the information available so that the measures can be calculated with little effort

harvest strategy policy In September 2007 the Australian Government Department of Agriculture Fisheries and Forestry (DAFF) released the document Commonwealth Fisheries Harvest Strategy Policy and Guidelines The policy was a collaborative work between DAFF CSIRO AFMA the Australian Government Department of Environshyment and Water Resources the Bureau of Rural Sciences ABARE and numerous industry representatives It was a direct result of the Ministerial Direction to AFMA of December 2005

The policy will help managers develop actions that assess biological and economic conditions in a fishery so that defined objectives can be achieved Strategies will seek to maintain stocks at the biomass associated with maximum economic yield and to ensure that they remain above a biomass where the risk to the stock is regarded as too high Stock rebuilding or lsquofish downrsquo strategies will be developed to ensure that target biomass levels are reached Where estimates of key variables such as the biomass at maximum economic yield are not known proxies based on the best available data will be used instead

More information is available at wwwdaffgovaufisheriesdomestic

21

2 production trade and costs

Commonwealth fisheriesrsquo production The value of Commonwealth fisheriesrsquo production has been declining in real terms since 2000-01 in line with similar declines in the value of state and territory fisheries and aquaculture (figure 2) In 2005-06 the value of Commonwealth fisheries production was $278 million This is 48 per cent less than the real value in 2000-01

The declining trend reflects that production in Commonwealth fisheries has been affected recently by unfavourable movements in a number of important economic variables For example fishing effort and catches have been influenced by fuel price increases and an appreciating Australian dollar that makes exports less competitive and imports more attractive to consumers With increasing costs and a deteriorating competitive position the financial viability of the industry is affected

Although AFMA is unable to influence these variables it can influence the amount of fishing effort the size of the catch and therefore the size of the stock

By restricting effort to the point of maximum economic yield the fish stock is thicker which in turn

fig 2 real gross value of Australian reduces the costs of fishing By fisheries production pursuing an economically sustainshyable fishery there is a greater likelihood that the industry can be resilient in the way it adapts to changes that it has no control over such as higher fuel prices While management responses to short term changes in fish prices or the costs of fishing are unlikely to improve the financial stability of the industry unfavourable long term changes in key economic variables

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 may justify a management change

$b 2005-06

05

10

15

20

25 Commonwealth fisheries

aquaculture

state wildcatch fisheries

22


that favours reduction in fishing effort in order to promote sustainability of the industry in the long run

The composition of the Commonwealth fishery is reflected in figure 3 The southern and eastern scalefish and shark (SESS) fishery generates the highest value of production of all Commonwealth fisheries It is an amalgamation of former fisheries which now appear as sectors of the new SESS fishery mdash the Commonshywealth trawl sector the gillnet hook and trap sector the Great Australian Bight trawl sector and the east coast deepwater trawl sector Overall the gross value of production was $811 million in 2005-06 (figure 3) In the same year the northern prawn fishery generated a gross value of production of $728 million easily the highest value of production for a single method fishery The eastern tuna and billfish fishery is also important in value terms mdash it generated $287 million in 2005-06

The southern bluefin tuna fishery is estimated by ABARE to have been worth $375 million in 2005-06 Post-harvest aquaculture operations resulted in the value growing to $156 million This higher amount accrues to the South Australian aquaculture sector rather than the associated Commonwealth fishery The method for estimating the gross value of production of the Commonwealth southern bluefin tuna fishery is explained in box 4

fig 3 value of production of major Commonwealth fisheries 2005-06

Commonwealth trawl sector

southern bluefin tuna

eastern tuna and billfish

Torres Strait fisheries

gillnet hook and trap sector

Great Australian Bight trawl sector

northern prawn

other fisheries

$m 10 20 30 40 50 60 70

sectors of the southern and eastern scalefish and shark fishery

23


box 4 calculating the gross value of production for the Commonwealth southern bluefin tuna fishery

Almost all southern bluefin tuna caught in Commonwealth waters are transferred to aquaculture farms off Port Lincoln in South Australia The price of live juvenile fish at the point of transfer to these farms is not observed largely because many operators are involved in both catching and grow-out operations Consequently the gross value of production for the fisheryrsquos output must be estimated indirectly ABARE derives the value of the Commonwealth southern bluefin tuna fishery by adding fishing costs to an estimate of the fisheryrsquos profit This estimate is based on the lease price of quota which is obtained through surveys of industry representatives

exchange rates and Australian fisheries trade

exchange rates

Changes in the value of the Australian dollar against the currencies of trading partners affects the value of Commonwealth fisheriesrsquo production It is common for the US dollar to be used as the reference price for international trade An appreshyciation of the Australian dollar relative to the US dollar reduces the prices received for exports and vice versa

The relationship between the real value of Commonwealth producshy

fig 4 real value of Commonwealth tion and recent movements in fisheries production and the the Australian dollar is shown in USndashAustralian exchange rate figure 4 The appreciation of the

exchange Australian dollar from US52 cents

400 06 in figure 4 along with the 48 per cent decrease in the real value of production for Commonwealth

rate 07 per Australian dollar in 2001-02 500

to US75 cents in 2005-06 (44 per cent appreciation) is tracked

300 05 fisheries While changes to the Commonwealth fisheries GVP exchange rate would not be the

2005-06 A$m US$A$ only factor contributing to the fall in

the value of production it is likely to 1997 1999 2001 2003 2005 -99 -2000 -02 -04 -06 have had a substantial impact

24


Australian exports of fisheries products

Information about Australian exports of fisheries products is disseminated by the Australian Bureau of Statistics Each product is classified according to the Australian Harmonised Export Commodity Classification system In most cases this system records each productrsquos species group and form of processing (such as fresh and chilled or frozen) as well as the originating state or territory and the country of destination However using this source of data it is generally not possible to identify the fishery from which a product was landed Therefore in this section Australian fisheries exports as a whole are discussed Commonwealth fisheries are not specifically identified

Approximately 80 per cent of the total value of Australian exports of fisheries products relates to edible seafood products Pearls account for 94 per cent of the value of the remaining 20 per cent of value that represents nonedible exports

In 2005-06 the main exported products in value terms were rock lobster (31 per cent of gross value of exports) pearls (19 per cent) abalone (16 per cent) whole tuna (11 per cent) and prawns (9 per cent) (figure 5)

The gross value of Australian fisheries exports rose slightly in 2005-06 mdash by $53 million to $155 billion (figure 6) However over the five years to 2005-06 the total value of exports fell by 38 per cent from a peak of $25 billion in 2000-01 Both edible and nonedible fisheries exports declined in value over this period by 37 per cent and 40 per cent respectively

As a relatively small producer of fig 5 value of Australian fisheries fisheries products Australia receives exports 2005-06 prices for seafood exports that are set predominantly on world markets other

$211m rock lobster There have been a few factors at work depressing the export value of

whole tunaAustralian fisheries products since $177m 2000-01 First the volume of exports 11 of edible fisheries products has fallen by 19 per cent since 2000-01 to prawns

$134m around 52 000 tonnes in 2005-06 9 Second in general prices of fishshy

$290meries products have fallen on world $246m 19

markets Third the appreciating 16

14 $489m 31

pearlsabalone

25


fig 6 real gross value of Australian Australian dollar against the currenshy fisheries exports cies of major trading partners has

further reduced the prices received 25 by Australian exporters The general

decline in the prices of major 20 fisheries commodities exported from

15 Australia is shown in figure 7

In 2005-06 Hong Kong overtook Japan as Australiarsquos main export market for edible fisheries products (figure 8) In value terms 33 per cent of Australiarsquos edible fisheries

1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06

products were exported to Hong Kong ($396 million) and 31 per cent were exported to Japan ($371

million) The United States is Australiarsquos third largest export destination followed closely by China In 2005-06 these four markets accounted for 82 per cent of the value of Australiarsquos exports of edible fisheries products (figure 8)

Over the five years to 2005-06 the total value of Australiarsquos seafood exports to Japan fell by 56 per cent in real terms (2005-06 dollars) mdash from $839 million in 2000-01 to $371 million in 2005-06 This was caused largely by substantial

fig 7 real Australian export prices for fig 8 real value of exports of edible key species fisheries products by destination

Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26


reductions in the volume of exports fig 9 Japanese exchange rate and yen of key products (rock lobster prawns price of key export species to Japan and other fish) and the appreciation of the Australian dollar relative to the Japanese yen the effect of which has been compounded by declining yen prices for key export species particushylarly prawns (figure 9) For example the yen price of prawns fell by around 28 per cent over the period 2000-01 to 2005-06 In addition the Australian

2500

1500

2000

80

60

70

prawns

rock lobster exchange rate

tuna (whole)dollar relative to the yen appreciated by 40 per cent over that period These yenkg yenA$

two factors resulted in the real price 2001 2003 2005 -02 -04 -06of prawn exports declining by 48 per

cent over the period

Australian imports of fisheries products

Australian fisheries products compete on the domestic market with imported products The value of Australian imports of fisheries products increased by $93 million to $126 billion between 2004-05 and 2005-06 which is equivalent to approximately 60 per cent of the value of Australian fisheries production Over 80 per cent of the gross value of imports was edible fisheries products with pearls accounting for 68 per cent of nonedible imports The main edible products imported into Australia were

fig 10 Australian imports of edible prawns (20 per cent of the gross value fisheries products 2005-06 of edible seafood imports) fresh chilled or frozen finfish fillets (20 per other

$117m cent) and canned fish (22 per cent) (fi gure 10)

other crustaceans and molluscs

Thailand New Zealand Viet Nam $225m and China were the major sources 22

of edible fisheries products imported into Australia In 2005-06 imports from these four countries accounted for 65 per cent of total edible $201m imports by value (figure 11) Nearly 20 $56m

5 63 per cent of Australiarsquos imports

11 canned finfish $229m

22

finfish fillets $201m 20

whole finfish prawns

27


fig 11 real value of Australian imports of of canned fish 23 per cent of fresh edible fisheries products by source chilled or frozen prawns and 20

per cent of canned crustaceans and China1000

Viet Nam

New Zealand

Thailand

other

molluscs were sourced from Thailand New Zealand was the source of 34

800 per cent of Australiarsquos imports of fresh chilled or frozen fish products 32

600 per cent of canned crustaceans and molluscs and 24 per cent of fresh 400 chilled or frozen mollusc imports

200

2005-06 Although the real value of Australiarsquos $m imports of edible seafood fluctuated

1997 1999 2001 2003 2005 by around $1 billion over the five -98 -2000 -02 -04 -06

years to 2005-06 the volume of edible seafood imports increased

by 31 per cent over the period Of particular note was the increase in prawn imports from China and Viet Nam The volume of fresh chilled or frozen prawn imports from China increased from 160 tonnes in 2000-01 to 4460 tonnes in 2005-06 while the volume of fresh chilled or frozen prawn imports from Viet Nam increased from 1250 tonnes to 6840 tonnes over the same period Also of note was the increase in relatively cheap imports of frozen finfish fillets from Viet Nam which rose from 1400 tonnes in 2000-01 to 11 200 tonnes in 2005-06

The appreciation of the Australian dollar relative to trading partnersrsquo currencies has reduced the price that Australians pay for imports of fisheries products This increased competition from overseas suppliers has affected the prices received by Australian producers

fuel prices and fishing costs Results from ABARErsquos fishery surveys indicate that fuel is a major cost of fishing typishycally accounting for 10ndash20 per cent of the total costs of operating a vessel (table 2) In the northern prawn fishery and Torres Strait prawn fishery the proportion is even higher at 25 per cent and 32 per cent respectively This reflects the longer distances travelled and that trawling tends to use more fuel

Increases in world oil prices in recent years have caused diesel prices to increase At the same time generally thinning fish stocks in some Commonwealth fisheries mean that fishers have had to travel further to make catches

28


table 2 fuel costs as a percentage of total cash costs by fishery

fi shery

eastern tuna and billfish 169 northern prawn 251 Commonwealth trawl sector 228 gillnet hook and trap sector 96 Torres Strait prawn 321 southern squid jig 131 western tuna and billfish 137 Results for most recent survey year which varies according to fishery

fig 12 real average retail price of diesel fuel across Australian capital cities

monthly ended December 2005

80

90

100

110

120

130

2005-06 cL

Dec DecDec Dec Dec Dec Dec 1999 2001 2003 2005

The average retail diesel price across Australian capital cities is given in figure 12 (FUELtrac 2006) Retail prices rose in real terms from 95 cents a litre in October 2003 to 134 cents per litre in October 2005 As offroad users of diesel fishers are entitled to a rebate on their fuel expense under the Energy Grants Credit Scheme (Commonwealth of Australia 2006) For claims made after early January 2006 the rebate was approximately 38 cents a litre

lsquoSecuring our Fishing Futurersquo adjustment package In November 2005 the Australian Government announced a $220 million strucshytural adjustment package for the fishing industry that combined with a range of fisheries management measures is aimed at addressing overfishing and rebuilding overfished stocks The package included a $149 million fishing concession buyback involving a voluntary tender process to allow individual fishing businesses to leave the industry The buyback concluded in December 2006 The target fisheries for the buyback were the eastern tuna and billfish fishery southern and eastern scalefish and shark fishery Bass Strait central zone scallop fishery and the northern prawn fishery The buyback consisted of two rounds the first closing at the end of June 2006 with almost $90 million spent with the remaining $60 million allocated in the second round which closed in late November 2006 In total over 550 concessions were purchased

29


Commonwealth and state fishers affected by the declaration of marine protected areas in the South East Marine Region were also eligible for business exit assistshyance

Additional elements of the package include $30 million for business restructuring assistance for onshore and fishing related businesses affected by the reduction in fishing activity and up to $20 million for fishing community grants to help generate economic activity in ports affected by the adjustment

A further $15 million is being provided over three years to offset likely increases in the average management cost paid by each remaining fisher To improve the management of Commonwealth fisheries $6 million has been allocated to fund science compliance measures and data collection

Implementation of new harvest strategies based on the policy is mandatory in all fisheries and these are expected to be applied by 1 January 2008 More informashytion is available at wwwdaffgovau

30

3 the fisheries

This report provides information about large fisheries separately from small fisheries Economic indicators based on available data for each fishery are used to assess the performance of a fishery The Commonwealthrsquos larger more valushyable fisheries usually have many more indicators than small fisheries This is partly because the potential net economic returns of larger fisheries justify substantial research programs that generate the data required to calculate the economic indicators Also management arrangements that tend to produce a large amount and a wide range of economic information (such as a system of individual transfershyable quotas) are more common for large fisheries In this report a small fishery is defined as having a gross value of production of less than $4 million

Information about each fisheryrsquos management is drawn from various sources including fishery management plans AFMA notices and announcements and letters to stakeholders Details about the biological status of a stock are based on BRS Fishery Status Report 2006 (Larcombe et al 2007)

Commonwealth fisheries Source Commonwealth of Australia (2005)

31

4 large fisheries

fisheries with a gross value of production greater than $4 million page

raquo eastern tuna and billfish fishery 32

raquo Heard Island and McDonald Island fishery 45

raquo northern prawn fishery 50

raquo southern bluefin tuna fishery 60

raquo southern and eastern scalefish and shark fishery 69

raquo Torres Strait fisheries 95

eastern tuna and billfish fishery at a glance eastern tuna and billfish fishery

primary effort control Input controls including limited entry and gear restrictions Transferable effort units will likely be introduced during 2008 Swordfish and albacore catches are controlled by TACs

economic performance Net economic returns are usually negative and latency is high Management for most species relies on input controls so the fishery is prone to effort creep

biological status bigeye tuna not overfished yellowfin tuna uncertain broadbill swordfish uncertain albacore tuna uncertain marlin uncertain

major home ports Mooloolaba Ulladulla Sydney Cairns and Eden

vessels operating 98 (2005-06)

2005-06 financial indicators gross value of production $287 million allocated management costs $28 million

32


overview The eastern tuna and billfish fishery extends from the tip of Cape York to the South AustraliandashVictoria border and includes waters around Lord Howe Island and some waters on the high seas (map 1) Offshore constitutional settlements have been made with adjacent states (except New South Wales) so that major tuna species are managed by the Commonwealth even inside the usual three nautical mile boundary Most fishing effort occurs within a few hundred kilometres of ports along the coast of New South Wales and southern Queensland AFMArsquos management of high seas fishing in the Western Pacific Ocean is influenced by Australiarsquos commitments to regional fishery management organisations (RFMOs) The fishery was classified as a lsquotarget fisheryrsquo for the purposes of the Securing our Fishing Future business exit assistshyance package (see chapter 1) A brief history of the fishery is given in timeline 1

timeline 1 eastern tuna and billfish fishery

event

1950s Japanese and domestic tuna fishing begins in waters that are now part of the Australian Fishing Zone (AFZ)

late 1970s United Nations Convention on the Law of the Sea establishes the AFZ Bilateral negotiations allow Japanese longliners to continue fishing in Australian waters

mid-1980s Markets in Japan for fresh tuna become available to Australian fishers as air freight costs fall Domestic fishing increases as a result

1985 Granting of new Commonwealth licences suspended 1986 First meeting of the fisheryrsquos Management Advisory Committee (MAC) 1990s Significant expansion of effort directed at yellowfin and bigeye particularly off northern Queensland early 1990s Fisheries Management Act 1991 comes into force Permits giving access to

specific areas are issued mid-1990s Revised Offshore Constitutional Settlements (OCS) with states (except NSW)

mean responsibility for tuna management now resides with Commonwealth 1997 Bilateral agreement lapses Japanese longliners no longer permitted to fish in AFZ late 1990s Expansion of the swordfish fishery off southern Queensland 2002 Draft management plan released for first round of public comment 2003 Draft management plan released for second round of public comment October 2005 Eastern Tuna and Billfish Management Plan 2005 comes into force but the

fishery is managed under transitional arrangements in the plan November 2005 Granting of statutory fishing rights (SFRs) under the new plan delayed following

the announcement of the Australian Governmentrsquos Structural Adjustment Package 2006 45 per cent of longline and 49 per cent of minor line permits purchased in the

fishing concession buyout Source AFMA (2004g)

33


Note All maps in this report produced using Geoscience Australia (2003) and Geoscience Australia (2006)

34


catch composition Several tuna and billfish species are caught in the fishery almost entirely by longline In 2005-06 approximately 1400 tonnes of yellowfin tuna and 1400 tonnes of broadbill swordfish were caught valued at $106 million and $81 million respectively (figures 13 and 14) Bigeye tuna albacore and striped marlin are also important species Note that catches of southern bluefin tuna wherever they are made relate to the southern bluefin tuna fishery

fig 13 volume of production fig 14 value of production eastern tuna and billfish fishery eastern tuna and billfish fishery

kt

2

4

6

8 other

albacore

bigeye tuna

broadbill swordfish yellowfin tuna

A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

trade The value and volume of the fisheryrsquos exports are difficult to determine because tuna products come from a variety of Australian fisheries and trade data do not distinguish according to fishery However estimates can be drawn from tuna export data after southern bluefin tuna exports have been removed Exports from the much smaller western tuna and billfish fishery are also included in these estishymates Broadbill swordfish (which is a major product of the eastern tuna and billfish fishery) did not have unique export codes prior to January 2007 Prior to that date exports of billfish appeared in generic lsquoother fishrsquo categories and are not reported here However import data sourced from Japanese customs and the United States indicate that Australia exported a total of around 800 tonnes of billfish to these two nations in 2005

35


Japan is the principal destination for Australian tuna taking almost 70 per cent of tuna exports (excluding southern bluefin tuna) by value in 2005-06 at around $165 million The United States New Zealand and American Samoa are also important markets taking 13 per cent 6 per cent and 5 per cent respectively Yellowfin tuna is the fisheryrsquos principal catch and also the fisheryrsquos most important tuna export at around $85 million in 2005-06

management arrangements

current management arrangements

The fishery is currently managed according to transitional arrangements provided for in the Eastern Tuna and Billfish Fishery Management Plan 2005 which came into force in October 2005 Under the transitional arrangements commercial fishing is managed predominantly by input controls that include limited entry zoning bycatch provisions and gear restrictions Also vessels fishing in the southern part of the fishery must hold quota of southern bluefin tuna at certain times of the year (generally June to November) and usually require some form of observer coverage during this time This is because effort in this fishery will inevitably result in catches of southern bluefin tuna Any catches of southern bluefin tuna fall under the Southern Bluefin Tuna Fishery Management Plan 1995 Given the relatively high price of southern bluefin tuna quota some operators may find it difficult to afford the quota necessary to fish in the

southern part of the eastern tuna and billfish fishery while the restrictions are in place

table 3 competitive trigger TACs Since 2006 catches of broadbill swordfish for broadbill swordfish 2007 have been managed using a competitive eastern tuna and billfish fisheryTAC as an interim measure until the impleshy

cumulative mentation of the new fishery management competitive plan The TAC increases through the fishing period trigger TAC season according to the schedule in table

tonnes 3 If at any time during the year the trigger 1 January ndash 30 June 840 is exceeded each fisher is restricted to 1 July ndash 30 September 1 050 landing ten swordfish per trip as bycatch 1 October ndash 30 October 1 190 until total catch is again below the relevant 1 November ndash 30 November 1 260 trigger level (Stone 2005) It is possible for 1 December ndash 31 December 1 400 fishers to apply for exemptions

36


A competitive TAC for albacore tuna was also implemented on 1 January 2007 as an interim measure while management options are considered A limit of 3200 tonnes of albacore can be caught in 2007 with restrictions on bycatch for permits that are not exempted to fish in the albacore area

The Eastern Tuna and Billfish Fishery Management Plan 2005 has a number of entries relating to economic efficiency (table 4)

table 4 Eastern Tuna and Billfish Fishery Management Plan 2005 ndash excerpts relating to economic efficiency

measures by which performance criteria objectives of the the objectives are to against which measures management plan are be attained include taken will be assessed are

to maximise economic efficiency gathering information about the that data about the in the exploitation of the economic efficiency of the fishery economic efficiency of the resources of the fishery and implementing long term fishery have been collected

management arrangements that and analysed to enable a pursue economic efficiency for periodic assessment of the fishery whether the data are

consistent with improvements in the economic efficiency of the fishery that any changes to the management of the fishery are assessed in relation to their likely effect on the economic efficiency of the fishery

future management arrangements

Once statutory fishing rights (SFRs) have been issued (currently scheduled for 2007) the new management plan allows AFMA to control effort in the fishery by restricting the number of hooks that can be set Each operator will be allocated individual transferable effort (ITE) units from a total allowable effort (TAE) for the fishery probably during early 2008 The management plan specifies how the past fishing activities of each operator determine how many ITE units they will be issued Effort units will be transferable both permanently and temporarily

37


The number of effort units expended when a longline set is made depends on the number of branchline clips used and the area of the fishery in which the vessel is operating

effort units expended = branchline clips times subarea factor

AFMA sets a subarea factor for various geographical divisions of the fishery These allow AFMA to control effort spatially and can reduce the likelihood of localised depletions It also allows fishers greater flexibility in where they apply their effort The AFMA Boardrsquos intention is to set the TAE at 78 million hooks initially which equates to approximately 95 million hooks once subarea factors are taken into account (AFMA 2006h)

The plan specifies two methods of monitoring the operatorrsquos effort The first is known as the clip nomination method This requires the operator to inform AFMA in writing of the number of branchline clips that will be used per longline operation Drum monishytoring equipment installed on the vessel will inform AFMA that a set has been shot and a corresponding number of hooks are deducted from the fisherrsquos allocation The second method is known as the clip monitoring method This requires the operator to install approved clip monitoring equipment that counts the number of hooks used in a fishing operation This amount is then deducted from the fisherrsquos allocation Under both methods it is the operatorrsquos responsibility to ensure that monitoring equipment

biological status eastern tuna and billfish fishery

species status notes

yellowfin tuna uncertain overfishing is occurring in the Western and Central Pacific Ocean (WCPO) fishery but the stock is not overfished

bigeye tuna not overfished overfishing is occurring in the Western and Central Pacific Ocean (WCPO) fishery but the stock is not overfished

broadbill swordfish uncertain there are strong indications of localised depletion in inshore

areas

albacore tuna uncertain not overfished in the South Pacific and there is no evidence of overfishing

marlin uncertain the stock is uncertain in both the eastern tuna and billfish and the western and central Pacific Ocean fishery

Source Larcombe et al (2007)

38


is working correctly Operators will also be required to fit their vessels with an automatic location communicator that sends information about the vesselrsquos position To date effort has been focused on developing the technology required for the clip nomination method It is acknowledged that the clip monitoring method would provide greater flexibility to industry but would come at a greater cost

The plan also makes provisions for a proportion of unused units in a given season to be transferred to the next Similarly an operator will be able to use a proportion more than their allocated effort units in a particular season by debiting their entitleshyment for the following year

Minorline SFRs (for fishing methods other than longline) will also be introduced defining the maximum number of lines that may be used at any one time in the fi shery

The allocation of SFRs in the fishery was due to commence in 2006 However AFMA identified the need for amendments to the plan including some that were required following the announcement of the Australian Governmentrsquos Securing our Fishing Future structural adjustment package in December 2005 For example provisions in the management plan do not prevent fishers who surrender their fishing permit under the buyback scheme from subsequently applying for and receiving SFRs (AFMA 2006h) The plan was amended in mid-2007 and it is likely to take a minimum of nine months for the new pan to be completed

AFMA has indicated that output controls will not be considered for the fishery until at least 2008 in order to allow enough time under the existing management plan for information to be collected about the cost effectiveness of ITQs (AFMA 2006h)

fi nancial performance ABARE regularly surveys operators in the eastern tuna and billfish fishery and reports the results in the Australian Fisheries Surveys Report Average per boat total cash receipts rose by around 19 per cent in 2004-05 to around $606 000 per boat (table 5) Total per boat cash costs were estimated to have risen slightly between 2003-04 and 2004-05 to an average of almost $577 000 per boat driven by average fuel expenditure which increased by around 24 per cent to just under $98 000 a boat Labour fuel and repairs and maintenance accounted for 53 per cent of total cash costs in 2004-05

39


As a result of proportionately higher receipts in 2004-05 average cash income in the fishery was estimated at around $29 000 per boat in 2004-05 compared with around ndash$28 000 per boat in 2003-04 Boat business profit and profit at full equity were also estimated to be significantly higher in 2004-05

table 5 average financial performance of vessels eastern tuna and billfish fishery

2003-04 2004-05 cash receipts seafood receipts $ 477 554 (8) 552 243 (9)

nonfishing receipts $ 30 721 (16) 53 482 (32)

total cash receipts $ 508 275 (8) 605 724 (8)

cash costs administration $ 15 827 (9) 14 530 (9)

crew costs $ 121 594 (9) 141 064 (8)

freight and marketing expenses $ 79 128 (11) 76 909 (13)

fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)

interest paid $ 24 374 (25) 21 707 (23) licence fees and levies $ 20 857 (25) 16 369 (13)

packaging $ 28 145 (15) 37 841 (17)

repairs and maintenance $ 65 536 (7) 66 174 (12)

other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)

boat cash income $ ndash28 423 (56) 28 586 (87)

less depreciation a $ 49 536 (17) 48 041 (11)

boat business profit $ ndash77 959 (22) ndash19 455 (127)

plus interest leasing and rent $ 35 221 (17) 32 058 (20)

profit at full equity $ ndash42 738 (35) 12 602 (184)

capital ndash excl quota and licences $ 741 076 (10) 734 041 (8)

ndash incl quota and licences $ 1 216 584 (12) 1 078 475 (9)

rate of return ndash to boat capital b ndash58 (36) 17 (183)

ndash to full equity c ndash35 (37) 12 (182)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences na Not applicable Note figures in parentheses are relative standard errors A guide to interpreting these is included in appendix A

40


economic performance ABARE has been conducting economic surveys of the eastern tuna and billfish fishery since the mid-1990s This allows for the calculation of net returns and studies currently underway at ABARE to calculate productivity indices and profit decompositions for the fishery There is currently no bioeconomic model for the fishery Estimates of the level of latency in permits are available for the fishery

level of latency

Many vessels have more than one permit attached to them This means that while information about the number of active vessels is obtainable it is hard to determine how many permits are fished against Still table 6 shows that as recently as 2002shy03 127 million hooks were set under the 220 issued permits By 2004-05 only 937 million hooks were set under the same number of licences Given the ability

table 6 vessels permits hooks and shots eastern tuna and billfish fishery

active vessels total permits a hooks shots no no million no

1986-87 62 03 760 1987-88 68 11 1 618 1988-89 94 11 2 099 1989-90 98 08 2 300 1990-91 101 16 2 864 1991-92 109 18 3 252 1992-93 91 19 2 975 1993-94 79 202 24 3 664 1994-95 98 227 34 4 509 1995-96 112 229 40 5 552 1996-97 123 217 53 7 645 1997-98 150 222 75 9 270 1998-99 156 220 99 10 762 1999-00 147 220 99 11 070 2000-01 136 220 101 11 529 2001-02 143 220 118 12 874 2002-03 140 220 127 13 535 2003-04 131 220 111 11 766 2004-05 113 220 94 9 869 a Total permits issued in calendar year ndash for example 202 permits relates to 1994 Source Lynch (2005)

41


of operators to vary the level of fishing effort applied to the fishery this suggests that effort may fluctuate depending on the net economic returns of the fishery and that net economic returns can be dissipated as they arise It is also important to note that the 2004-05 level of hooks used is below the TAE level anticipated for the new management plan

The introduction of ITE units will make the degree of latency in the fishery easier to assess Of course it is likely that fishers will find ways of increasing the productivity of each hook over time so AFMA will have to revise the target number of hooks regularly


The fall in the number of active vessels since 1999 (see table 6) coincides with a period of generally low or negative net economic returns Of the last eleven

surveyed years a positive net return was estimated on only 3 fig 15 net economic returns

eastern tuna and billfish fishery occasions The lowest estimate of

A$m 2005-06

20

ndash20

40

60

80 net economic returns

costs receipts ndash$186 million relates to the 2002shy

03 financial year The increase in revenue throughout the 1990s was almost always accompashynied by proportional increases in costs leaving the net return of the fishery largely unchanged (figure 15) Fishers targeting swordfish off Mooloolaba (Queensland) in the late 1990s led to modest net returns being generated but these had been dissipated by 2001-02 1994 1996 1998 2000 2002 2004

-95 -97 -99 -01 -03 -05 as interest in this species increased

implications of new management arrangements

The proposed management system of ITE units has the potential to constrain fishing effort to a greater degree than the current management arrangements of limited entry and zone restrictions However a major concern with input controls (such as ITE units) is that the fishery manager does not have direct control over the total catch in the fishery or the species composition of that catch Effectively the manager has to determine an implicit total catch and then determine the number of hooks required in the fishery to achieve that level of catch

42


Input control regimes provide fishers with an incentive to find new ways to fish within the rules Fishers use unrestricted inputs in place of restricted inputs to increase their fishing power in a process known as lsquoeffort creeprsquo While operators gain experience with new fishing gear and techniques and can improve catching capacity they have the incentive to use a combination of inputs that do not minimise costs for the levels of catch they are landing In this case vessel level efficiency is not being achieved

Where effort creep occurs it is likely that input controls will need to be tightened frequently to ensure that fishing mortality coincides with management targets As Rose (2002) explained changes to rules can be expensive as they genershyally make some gear worthless Also the process of researching designing and negotiating changes in management regimes can be costly for both fishers and managers In estimating the long run net economic returns to the fishery both sets of periodic costs mdash those of research and negotiation and those of reinvestment mdash should be set against any apparent net economic returns in the years between changes in management regime

Another potential problem associated with ITE units is that without additional controls they provide little management control of effort directed at any particular target species In a multispecies fishery where a degree of targeting of fishing effort is possible such as the eastern tuna and billfish fishery fishers will direct their effort at the species and locations that maximise profits A number of factors may lead to changes in targeting behaviour For example changes in the relative prices of target species changes in relative abundance (perhaps as a result of environshymental factors) and changes in catchability (perhaps as a result of a change in fishing technology) can be expected to affect the proportion of effort directed at each of the major species

A major challenge in implementing an ITE units based management regime that is efficient and sustainable in the eastern tuna and billfish fishery will be to provide an adequate degree of control over catches of target species The use of subarea factors that give different weightings to hooks set in different areas of the fishery gives managers better control over how effort is distributed spatially However setting subarea factors appropriately may be problematic

A system of individual transferable quotas (ITQs) and a total allowable catch would be likely to avoid the problems associated with effort creep and changes in targeting practices The incentives that ITQs might create to discard and difficulties in setting an optimal total allowable catch in a fishery targeting migratory stocks with unpredictable abundance have been recognised (Rose 2002) Localised

43


depletions are also common in the fisheryrsquos history and some form of area based ITQ system would likely be required However AFMA is currently commissioning research into the feasibility of implementing ITQs in each Commonwealth fishery including the eastern tuna and billfish fishery This research is a part of the Minisshyterial Direction announced in late 2005 where AFMA must implement output controls in the form of individual transferable quotas by 2010 unless there are significant impediments to their introduction in a particular fishery


One of the key prerequisites for achieving economic efficiency in a fishery is the existence of a control on effort or catch that restricts fishers from exploiting the resource beyond catch that sustains the maximum economic yield (MEY) Controls prevent effort from expanding to the open access point where no profits are made There is substantial evidence that the eastern tuna and billfish fishery has some of the economic characteristics of an unmanaged open access fishery despite it being a controlled fishery ABARErsquos estimates of net economic returns suggest that for many years the fishery has earned only very small or negative net economic returns Increases in revenue in the late 1990s coincided with similar increases in costs leaving profits mostly unchanged Low profits lead to a large proportion of the fisheryrsquos permits not being fished against

The new management plan introduces individual transferable effort units that allow AFMA to place an upper limit on the total number of hooks set The system also gives AFMA control over how effort is applied spatially by the use of subarea factors However it does not allow AFMA to control the catch composition in the same way that a TAC system does This is especially important in a fishery with overfished stocks or for which overfishing is occurring

ITE units promote effort creep in the same way as any other input control Innovative fishers will always look for new ways to circumvent restrictions on the number of hooks they can set by substituting inputs to increasing the effectiveness of each hook Innovashytion is welcomed in an ITQ managed fishery because the total harvest can then be made at a lower cost However in an ITE units managed fishery innovation means that fishers are probably able to take more fish than management initially intended

A system of ITE units is a move in the right direction It introduces transferable rights to the fishery (other than just trade in permits) and begins the difficult process of allocating individual rights and resolving fishersrsquo concerns about whether the distribution is equishytable However the true test will be whether the TAE will be set at a level that actually restricts effort If not then the TAE system is unlikely to improve economic efficiency

44


Heard Island and McDonald Island fishery

at a glance Heard Island and McDonald Island fishery

primary effort control Principally managed by TACs and ITQs but a restriction on vessel numbers also applies

economic performance Very low level of latent effort suggests positive net economic returns although high fishing costs may make returns variable

biological status Both Patagonian toothfish and mackerel icefish classified as not overfished

major home port Fremantle

major offloading ports Port Louis (Mauritius) Albany and Devonport


2005-06 economic indicator allocated management costs $103 million Gross value of production is confidential

Kerguelen Islands Heard and McDonald Islands

CCAMLR statistical subarea

map 2 Heard Island and MacDonald Island fishery

Fremantle

Albany

45


overview The Heard and McDonald Islands lie approximately 4000 kilometres south west of Perth within the area of the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) Fishing is prohibited in waters out to 13 nautical miles and in various marine reserves although four conservation zones exist in which fishing is currently permitted Australiarsquos exclusive economic zone around the islands to the north and west is limited by the proximity of the Kerguelen Islands through a treaty signed with France in 1982 (map 2) To the south the fishery ends at a CCAMLR boundary although the Australian exclusive economic zone (EEZ) continues Fishing in this small segment requires special authorisation from CCAMLR

fig 16 reported catch by species catch composition CCAMLR subdivision encompassing the Heard Island and McDonald Island fishery Publicly available catch data for the

CCAMLR subdivision that coincides with the Australian Fishing Zone (AFZ) around Heard and McDonald Islands gives catches of Patagonian toothfish and mackerel icefish as 2740 tonnes and 1850 tonnes respectively in 2004-05 (figure 16) This is more than a 55 per cent increase on the catch in 2003-04 mostly because the results of pre-season surveys motivated a relatively low TAC for mackerel icefish kt

1

2

3

4

5 other

mackerel icefish Patagonian toothfish

1998 2000 2002 2004 in 2003-04 (SouthMAC 2003) -99 -01 -03 -05 Catches are made using demersal

and midwater trawling and demersal longlining Use of pots is also being trialled under a scientific permit The value of production of the fishery is confidential



The fishery is managed according to the Heard Island and McDonald Island Fishery Management Plan 2002 and its various amendments The plan specifies a system of total allowable catches allocated as transferable quotas that have been issued in the form of 30 000 statutory fishing rights for each quota species

46


Catch limits in 2006-07 for target and bycatch species are given in table 7 AFMA must take into account both the views of industry and catch limits set by CCAMLR when setting the TAC The TAC can be caught by either trawl method or longline following an AFMA Direction in November 2005 (AFMA 2005d)

The TAC for mackerel icefish for 2006-07 was reduced to 42 tonnes This follows an agreement allowing industry to take the entire 2005-06 and 2006-07 CCAMLR recommended TAC in the first year The low 2006-07 TAC also allowed for a scientific survey to proceed (SouthMAC 2006)

The management plan also uses quota SFRs as an input control to limit the number of operators It does this by specifying that an operator must have a minimum quota holding of 255 per cent of the total before they can fish This restricts the number of operators to a maximum of three There are also lsquomove-onrsquo provisions that force operators to leave areas where juvenile icefish or bycatch species are aggregating rules for observer coverage a system of catch documentation and a requirement that all vessels be fitted with a tracking device (AFMA 2005c) Gear restrictions also apply Parts of the management plan relating to economic effishyciency appear in table 8

table 7 catch limits for the 2006-07 season Heard Island and McDonald Island fishery

target species bycatch species

patagonian mackerel skates macrourus unicorn grey rock each for toothfi sh icefi sh rays spp icefi sh cod other species

tonnes tonnes tonnes tonnes tonnes tonnes tonnes

2 427 42 120 360 150 80 Source AFMA (2006l)

table 8 Heard Island and McDonald Island Fishery Management Plan 2002 ndash excerpts relating to economic efficiency


to maximise economic implementing long term that the economic efficiency in the exploitation management arrangements that efficiency of the fishery is of the resources of the fishery pursue economic efficiency for assessed periodically using

the fishery economic data provided on request by statutory fishing right holders

47

50


biological status Heard Island and McDonald Island fishery


Patagonian toothfish not overfished catch limits are set to ensure spawning biomass remains above 50 per cent of its pre-exploitation median level although the stock has been declining

mackerel icefish not overfished catch limits are set to ensure spawning biomass remains above 75 per cent of its pre-exploitation median level


economic performance ABARE has not conducted economic surveys of the fishery and a bioeconomic model has not been constructed The only indicator available is the level of latency of quota

level of latency

Although catch data for the overlapping CCAMLR subdivision may not be identical to catch in the Commonwealth Heard Island and McDonald Islands fishery published CCAMLR catches (figure 16) are very close to the fisheryrsquos TACs In 2004-05 latency in Patagonian toothfish quota was 15 per cent and in the previous year was only 03 per cent (table 9) Latency in mackerel icefish was only 07 per cent in 2004-05 although it was much higher in 2003-04 The

table 9 latent effort Heard Island and McDonald Islands fishery

catch in proportion of CCAMLR subdivision TAC quota unfilled

tonnes tonnes

2003-04 Patagonian toothfish 2 863 2 873 03 mackerel icefish 78 292 733 total 2 941 3 165 71

2004-05 Patagonian toothfish 2 744 2 787 15 mackerel icefish 1 851 1 864 07 total 4 595 4 651 12

48


generally low level of latency of quota in the fishery implies that operatorsrsquo effort is being restricted to a point at or below the level of effort associated with open access mdash so net economic returns are probably positive

trade of entitlements

At the start of 2007 AFMArsquos public registers show that the fisheryrsquos 60 000 SFRs were owned by five entities Some do not have enough to operate using only their owned holdings because of the requirement that an operator hold at least 255 per cent of the total rights on issue before they can fish In March 2007 temporary leases had led to the 60 000 rights being held by four entities


While some ITQ managed fisheries have TACs set at levels that do not restrict fishers the Heard Island and McDonald Island fishery does not fall into this category The fisheryrsquos TACs are regularly filled which is a good sign that profits are positive (although fishing in the sub-Antarctic probably makes them variable) It is also an example of how ITQs can be used as a primary management control in conjunction with input controls aimed at protecting the environment The sensitive nature of sub-Antarctic environment makes this essential Total allowable catches are not set with reference to MEY However given the environmental constraints imposed on operators it is likely that catches have been set below the level associshyated with MEY Also the use of ITQs provides the best chance that profits will be maximised subject to these environmental constraints

49


northern prawn fishery

at a glance northern prawn fishery

primary effort control Input controls including seasonal and area closures and gear restrictions

economic performance Fishery regularly earns positive net economic returns because input controls effectively restrict effort Effort creep leads to regular tightening or changing of controlled inputs Fishery has adopted maximum economic yield as a harvest target

biological status banana prawn ndash not overfished tiger prawn ndash not overfished endeavour prawn ndash uncertain king prawn ndash uncertain

major home ports Fremantle Cairns Brisbane Darwin Geraldton and Townsville

vessels operating 83 as at September 2005

2005-06 economic indicators gross value of production $728 million allocated management costs $191 million

overview The northern prawn fishery is one of only a few Commonwealth fisheries that regushylarly earn positive net economic returns However there is evidence that the fishery is capable of even greater net economic returns

AFMA and its predecessors have managed the fishery with input controls since the fishery began in the mid-1960s However the adoption of new fishing techniques that take advantage of unrestricted inputs has forced management authorities to continually adjust restrictions on gear length and vessel size For this and other reasons industry and AFMA have recently adopted a harvest strategy of explicitly targeting MEY and are currently developing the transition to an ITQ system The northern prawn fishery was a target fishery of the Securing our Fishing Future busishyness exit assistance

The fishery extends from Cape York Peninsula in Queensland west to Cape Londonderry in Western Australia (map 3) although area closures and the inshore nature of prawn fishing mean roughly only a quarter of the fishery is fished

50


catch composition Nine commercial prawn species are targeted using the trawl method including white banana redlegged banana brown tiger grooved tiger blue endeavour and red endeavour While a high proportion of the catch is discarded some non-prawn species are retained such as squid bugs and scallops

Total landings in the fishery have fallen by 45 per cent since 2000-01 to 5400 tonnes in 2005-06 (figure 17) Banana prawns are the predominant catch although the tonnage caught of these species varies significantly from year to year The gross value of production in the fishery since 2000-01 has fallen by 61 per cent to $73 million in 2005-06 (figure 18) This is despite a rise of around $6 million between 2004-05 and 2005-06 The large drop in the gross value of production (GVP) over the period was driven largely by the appreciation of the Australian dollar which makes exports less competitive and competing imports more competitive

51


fig 17 volume of production fig 18 value of production northern prawn fishery northern prawn fishery

kt

2

4

6

8

other species endeavour prawn tiger prawn banana prawn

50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06

Fishing takes place in two distinct seasons the first targeting banana prawns and the second tiger prawns In 2006 the banana prawn season began in mid-April and closed in early June The tiger prawn season began on 1 August and closed in mid-November Opening and closing dates are shifted from year to year to take advantage of favourable prices and prawn abundance

trade It is not possible to derive the exports of the northern prawn fishery specifishycally from ABS trade data because fig 19 JapanndashAustralia exchange rate the data do not reveal the originating and prawn exports to Japan fishery However the predominant

prawn exports destination for Australian prawns is to JapanJapan In 2005-06 the value of prawn

80 150 exports to Japan was $60 million The Australian dollar has appreciated steadily against the Japanese yen 70 100 since 2000-01 (figure 19) Other things being equal this makes the yenA$

60 50price of Australian prawns less competshyitive in Japan This partly explains the

2005-06decline in the value of production from yenA$ A$m the northern prawn fishery over the 1997 1999 2001 2003 2005 period of 2000-01 to 2004-05 -98 -2000 -02 -04 -06

52


fig 20 destination of Australian prawn fig 21 source of Australian imports of exports 2005-06 prawn products 2005-06

Japan Thailand Spain Viet Nam China China

Hong Kong India

Greece Indonesia Viet Nam Malaysia

other other

A$m 20 40 60 kt 2 4 6 8 10

Spain and China are also very important markets for Australian prawns (figure 20) valued at $19 million and $12 million respectively

The major sources of Australian imports of prawn products in 2005-06 were Thailand Viet Nam and China (figure 21) The volume of prawns imported from China has been growing steadily mdash from 330 tonnes in 2000-01 to 6040 tonnes in 2005-06 From Viet Nam the volume of imports increased from 1350 tonnes to 7450 tonnes over the same period The price per kilogram of prawn imports has been falling in real terms since 2001-02

US market and turtle excluder devices

In 1987 the United States introduced regulations that forced its fishers to shorten their trawl time and use turtle excluder devices (TEDs) By 1996 the United States required that all nations wishing to export to its markets adopt TEDs if fishing takes place in waters likely to contain sea turtles This closed the US market to northern prawn fishers and it was not until July 2000 that fishers could regain access because they had become compliant The United States periodically reassesses Australian prawn fisheries for compliance



Management of the northern prawn fishery is guided by the Northern Prawn Fishery Management Plan 1995 and its various amendments The plan makes reference to economic efficiency in a number of sections (table 10)

53


table 10 Northern Prawn Fishery Management Plan 1995 ndash excerpts relating to economic efficiency


to maximise economic the status of economic efficiency in the northern efficiency of the northern prawn fishery prawn fishery

The fishery is managed with input controls such as gear and vessel restrictions limited entry area closures and seasonal closures Since 2000 the main management tool has been input controls in the form of restrictions on the length of net headrope and footrope allowed to be towed in the fishery Holders of lsquoclass Arsquo SFRs are allocated gear units specifying how much headrope and footrope can be used Operators are free to trade these gear units permanently or temporarily lsquoClass Brsquo SFRs are also issued for the fishery and serve a similar purpose to boat SFRs in other fisheries To operate commercially a fisher must associate at least 100 class A SFRs and a single class B SFR with his or her vessel

AFMA has recently approved the use of quad gear in the fishery with a 10 per cent penalty on the value of each class A SFR used in this configuration Future research on the effectiveness of quad gear is planned for 2007 if uptake is wideshyspread (AFMA 2006c)

The number of vessels recording catch in the table 11 number of vessels northern prawn fishery has fallen from 134 in northern prawn fishery1995-96 to 86 in 2005-06 (table 11)

no

A new target level of catch of maximum 1994-95 133 economic yield (MEY) to replace maximum 1995-96 134 sustainable yield (MSY) was accepted by 1996-97 128

1997-98 130 the AFMA Board in 2004 after being recomshy1998-99 133 mended by the Northern Prawn Fishery 1999-2000 130 Management Advisory Committee (NORMAC) 2000-01 118 (AFMA 2004b) This new objective implies that 2001-02 118

the fishery be managed so that effort catch and 2002-03 101 thus stock biomass are at levels that allow net 2003-04 98 economic returns to be maximised 2004-05 96

2005-06 86

54


fishing concession buyback

The northern prawn fishery was a target fishery in the Securing our Fishing Future adjustment package In total 43 class B SFRs and 18 365 gear SFRs were purchased from the fishery representing a 45 per cent and 34 per cent reduction of the pre-buyback number of permits respectively Given that latency is generally low in the fishery this will mean a significant reduction in effort in the fishery initially However an increase in efficiency of those remaining in the industry may peg back some of the effort reduction over time


NORMAC advises AFMA on management issues in the northern prawn fishery and reports that industry is aiming to have the fishery managed by ITQs (at least for some species) in the near future Significant events in the history of the fishery are shown in timeline 2

timeline 2 northern prawn fishery

event

1966 Two vessels operating 1970 200 vessels operating (Rose et al 2004) 1971 Seasonal closures for banana prawns introduced 1977 and 1980 Controls on boat replacement 1984 Adoption of A-units as measure of vessel size and power B-units introduced and

serve as a right to fish Mid 1980s Buyback scheme aims to reduce A-units to 70 000 by 1990 Plan is for an

initial voluntary buyback followed by a compulsory buyback which later falls through Voluntary buyback extended to B-units

1990 Buyback scheme refinanced in 1990 with amended target of 53 844 A-units by early 1993

1993 Through compulsory (15 per cent) and voluntary surrender target is met in April 1993 A-units and B-units rolled in class A and B statutory fishing rights Licence numbers reduced from 216 to 132 over 1990ndash1993 (NORMAC nd)

1995 New management plan and statutory fishing rights (SFRs) introduced to replace class A and B units (Caton et al 2004)

2000 Headrope length becomes input control (NORMAC nd) 2002 40 per cent effort reduction target met through a 25 per cent reduction in total

allowable headrope length and shortening of season (Caton et al 2004) 2004 MEY defined as target level of catch (Roberts 2004) 2005 25 per cent reduction in total allowable headrope length (Roberts 2004)

Second season lengthened 2006 45 per cent reduction in class B SFRs and 34 per cent reduction in gear SFRs

55


biological status northern prawn fishery

species status

white and red-legged banana prawns not overfished and not subject to overfishing brown and grooved tiger prawns not overfished and not subject to overfishing endeavour and king prawns uncertain Source Larcombe et al (2007)

table 12 financial performance of the fleet northern prawn fishery

2002-03 2003-04 cash receipts seafood receipts $ 1 080 847 (3) 891 328 (4)

nonfi shing receipts $ 45 240 (18) 50 500 (21)

total cash receipts $ 1 126 088 (3) 941 828 (4)


crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)

licence fees and levies $ 24 550 (4) 24 639 (4)

packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)


boat business profit $ 235 989 (13) 120 805 (25)


profit at full equity $ 273 947 (11) 164 814 (18)

capital ndash excl quota and licences $ 1 115 169 (7) 1 078 564 (8)

ndash incl quota and licences $ na 3 472 469 (5)

rate of return ndash to boat capital b 25 (14) 15 (21)

ndash to full equity c na 5 (18)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences Note Figures in parentheses are relative standard errors (RSE) A guide to interpreting these is provided in appendix A

56


fi nancial performance

ABARE regularly surveys the northern prawn fishery to collect key measures of the financial performance of the fleet for the Australian Fisheries Surveys Report Results for the financial years 2002-03 and 2003-04 are presented in table 12 Historically many vessels that operate in the northern prawn fishery also fish in the Queensland east coast otter trawl fishery and the Commonwealthrsquos Torres Strait prawn fishery Estimates of financial performance usually include some costs and revenues that are related to these other fisheries

Average per boat seafood receipts for the fishery fell by 18 per cent between 2002-03 and 2003-04 to $891 000 a boat largely as a result of unfavourable movements in the exchange rate Average total cash costs per boat also fell (by 8 per cent to an average of $797 000 a boat in 2003-04) This drop was predominately driven by falls in labour costs (which are related to the vesselrsquos revenue) and repairs and maintenance costs (17 per cent) Average per boat fuel expenditure increased by 4 per cent to around $200 000 per boat in 2003-04 Together labour fuel and repairs and maintenance accounted for 71 per cent of total cash costs in 2003-04

economic performance Of all Commonwealth fisheries the northern prawn fishery has the largest amount of information available thus allowing for calculation of the greatest number of economic performance indicators ABARE has been surveying the northern prawn fishery since the early 1990s allowing a time series of net economic returns to be calculated The survey data have also been used as an input to the construction of a bioeconomic model and various studies on the efficiency of the fleet Estimates of latent effort are readily available from AFMA data

level of latency

Generally latency in the fishery is table 13 active permits 30 March 2006 very low (table 13) At March 2006 northern prawn fishery almost 92 per cent of the class B

percentage statutory fishing rights on issue were permit type active total latent attached to a vessel Latency in gear

units was even lower at only 35 per class B SFRs 87 95 84 gear units 51 957 53 844 35cent

57


net economic returns net economic returns fig 22

The northern prawn fishery is the northern prawn fishery

most profitable of those surveyed by ABARE Net economic returns regushy 200 net economic returns

costs receipts

larly exceed $30 million in real terms and were as high as $69 million in 150

2000-01 However net economic returns then fell steadily to $9 million 100 in 2003-04 (figure 22) While net economic returns are very high Rose 50 et al (2004) suggested that some of the returns may have come at the cost A$m

2005-06

of future stocks It is important to note 1994 1997 2000 2003 that in recent years increased fuel -96 -96 -01 -04

prices and lower prawn prices have had a substantial impact reducing profits in the fishery

effi ciency indicators

A number of studies have examined the vessel level efficiency of the northern prawn fishery fleet often with the aim of estimating the impact of changes to controlled inputs Two ABARE studies cover the period during which A-units mdash a measure of vessel power and size mdash were the controlled input In both these studies (Kompas et al 2002 2004a) it was found that A-units contributed positively to technical efficiency while net size tended to lower efficiency Yet restrictions on A-units caused substitution of net size for A units Also technical efficiency was found to decrease over time as A-unit restrictions took effect and substitution increased Therefore one direct effect of restrictions on A-units was to increase the cost and decrease the efficiency of fishing At the same time estimates of total effective effort in the fishery show that the input control policy failed to induce the intended large cut in effort (Rose et al 2004)

optimal harvest levels

A bioeconomic model of the tiger prawn component of the northern prawn fishery has been developed The bioeconomic model is updated regularly to feed into NORMAC decisions The 2006 assessment which included updated fishing cost data as well as the 2006 tiger prawn biological assessment indicated that the

58


fisheryrsquos current economic yield is 74 per cent of its maximum potential economic yield Estimates of the optimal number of vessels are also provided by the model and the current optimal number of boats is estimated to be around 45


Relative to most other Commonwealth fisheries the economic performance of the northern prawn fishery is strong although profits in recent years have been lower owing to falling prawn prices and higher fishing costs

However improvements are possible in a number of areas First fishers in the northern prawn fishery are affected by regular adjustments to input controls Existing controls are either tightened or a new input control is implemented This is because fishers are continually trying to legally circumvent controls to increase their catch Managers are fighting an ongoing battle against the ingenuity of fishers Tightening or changing input controls makes some gear and knowledge redundant The negative effect this has on fleet productivity has been examined in various studies such as Kompas et al (2002)

The northern prawn fishery has been progressive in adopting maximum economic yield as a target harvest AFMA is moving the fishery toward individual transferable quotas Rose et al (2004) suggest that an output control is the best management tool to use in the fishery particularly for tiger prawns

59


southern bluefin tuna fishery

at a glance southern bluefin tuna fishery

primary effort control Principally managed using ITQs allocated from a global TAC set by the Commission for the Conservation of Southern Bluefin Tuna (CCSBT)

economic performance Allowable catch is filled each season and profits are positive although the status of the stock suggests some profits may have come at the expense of future catches

biological status Overfished

major home ports Purse seine Port Lincoln Long line Mooloolaba Sydney and Ulladulla

major offloading ports Catch from the purse seine sector transferred to farms off Port Lincoln Catch from the smaller longline sector unloaded at Sydney Ulladulla Nelson Bay and Mooloolaba

vessels operating 57 (2004) mdash most catch is made by 8 purse seine vessels

2005-06 economic indicators gross value of production Commonwealth fishery (all methods) $375 million

South Australian aquaculture $156 million allocated management costs $194 million

overview The Commonwealthrsquos southern bluefin tuna fishery is dominated by a purse seine sector that nets juvenile tuna in the Great Australian Bight and tows them to sea pens off Port Lincoln in South Australia for fattening Much smaller sectors operate off the southern parts of both New South Wales and Western Australia using longline pole and line and trolling methods Catches of southern bluefin tuna using these methods are often incidental to catches of swordfish yellowfin tuna and bigeye tuna in the eastern tuna and billfish fishery The southern bluefin tuna fishery is managed using a TAC set by AFMA The TAC must not exceed Australiarsquos national allocation from the international body that manages global southern bluefin tuna stocks mdash the Commisshysion for the Conservation of Southern Bluefin Tuna (CCSBT)

The fishery extends to almost all parts of the AFZ including the Heard and McDonald Islands and the Cocos (Keeling) and Christmas Islands (map 4) It also extends to areas of the high seas

60


Forty-nine commercial longline vessels recorded catch in the southern bluefin tuna fishery in 2004 An additional eight purse seine vessels operating for the Port Lincoln tuna farms recorded catch in the same year (Hobsbawn et al 2005)

catch composition Australiarsquos catch of southern bluefin tuna has been stable at around 5200 tonnes since 1998-99 because Australiarsquos TAC has been based on an unchanged allocation from the CCSBT Figure 23 shows that almost all southern bluefin tuna is used as an input to farms Estimating the value of the southern bluefin tuna fishery is difficult because the value of the live juvenile fish transferred to farms is not observable ABARE estimates the value of the fisheryrsquos production in financial years using the method outlined in box 3 (in chapter 1) In 2005-06 the value of

Ulladulla

Nelson Bay

Port Lincoln

map 4 southern bluefin tuna fishery

Mooloolaba

Cocos (Keeling) and Christmas Island

Heard and McDonald Islands

high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61


fig 23 volume of production fig 24 value of production southern bluefin tuna fishery southern bluefin tuna fishery

sold direct sold direct input to farm input to farm 5 80

4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

the fisheryrsquos production was $375 million (figure 24) This is significantly lower than the value in 2002-03 of $84 million and in earlier years because of recent exchange rate movements and competition from farmed northern bluefin tuna in the Mediterranean which has reduced the price of southern bluefin tuna on the Japanese market

trade Between 2002-03 and 2005-06 Australian exports of southern bluefin fig 25 value of southern bluefin tuna

exports by processing method tuna declined in value by 46 per cent (in real terms) to $156 million

frozen (figure 25) As noted earlier this 250 reflected reduced prices on the fresh or chilled

200key Japanese market caused by increased competition from the Medishy 150 terranean as well as the relatively high value of the Australian dollar 100 which reduced the competitiveness of the Australian exports 50

2005-06 A$mFurthermore there is a lag between

2002 2003 2004 2005harvest from the wild southern bluefin -03 -04 -05 -06

62


tuna fishery and the sale of the final product from farms Harvest from the wild fishery usually occurs between January and March while exports peak in the period July to September after fish have been fattened in farms Therefore care is required when comparing trends in the gross value of the wild fishery and the value of exports For example the large drop in the gross value of production of the wild fishery between 2002-03 and 2003-04 appears as a fall in export value in the following year (that is 2003-04 to 2004-05)



The Southern Bluefin Tuna Fishery Management Plan 1995 provides management direction for the southern bluefin tuna fishery The plan contains objectives measures and performance criteria relating to maximising economic efficiency (table 14)

Significant events in the history of the fishery are shown in timeline 3

table 14 Southern Bluefin Tuna Fishery Management Plan 1995 ndash excerpts relating to economic efficiency


in managing the SBT fishery in developing management that AFMA has developed and under this plan AFMA will arrangements for the SBT implemented within 12 months after pursue the objectives of fishery AFMA have regard the commencement of this clause a maximising economic to the need to pursue framework and criteria for the efficiency in the exploitation economic efficiency in the assessment of management of fisheries resources exploitation of the SBT arrangements to determine the extent

fishery resources to which they promote economic efficiency and has procedures in place for review of achievement of this objective every two years after inception and that the framework and criteria allow holders of statutory fishing rights for the SBT fishery to pursue practices consistent with maximising economic efficiency in the SBT fishery

63


The total allowable catch for the global southern bluefin tuna fishery is determined by the CCSBT The Commission is an intershynational body formed in 1994 through a formal agreement between Australia Japan and New Zealand to cooperatively manage southern bluefin tuna The Republic of Korea and the fishing entity of Taiwan are now also members and Indonesia the Philippines South Africa and the European Union are coopershyating nonmembers and observers The role of the CCSBT is to ensure the conservation and optimum utilisation of southern bluefin tuna stocks and provide an internationally recogshynised forum for discussions and negotiations on issues with the species (CCSBT 2006)

The CCSBT usually sets global TACs on an annual basis that are then allocated among

table 15 CCSBT annual catch allocations 2007 to 2009 southern bluefin tuna

allocation tonnes members Australia 5 265 Japan 3 000 Republic of Korea 1 140 Fishing Entity of Taiwan 1 140 New Zealand 420 Cooperating nonmembers and observers Indonesia 750 Philippines 45 South Africa 40 European Union 10 Source CCSBT (2007)

member countries and nonmembers countries and observers Following the release of a report by an independent international panel which suggests southern bluefin tuna catches may have been substantially underreported over the past ten to twenty years the CCSBT has reduced the annual TAC for the fishery by 3115 tonnes The annual allocations for 2007 to 2009 are given in table 15 Note that Japanrsquos annual allocashytion has been set until 2011

timeline 3 southern bluefin tuna fishery

event

1930s Commercial fishing for southern bluefin tuna begins off south east Australia 1950s Pole and live bait fishing begins 1970s Purse seining for southern bluefin tuna begins 1970s Partial fishery collapse off New South Wales pre-1979 Japanese vessels operate unregulated in what becomes the Australian fishing zone 1980s High catches of juveniles persist 1982 Australia catches 21 500 tonnes of southern bluefin tuna 1983 Total allowable catch introduced 21 000 tonnes caught 1990 Farming first trialled 1997 Japanese fishers excluded from fishing in the AFZ following ongoing disagreement

about management of southern bluefin tuna (Bromhead et al 2003)

64


Efforts by member nations to manage southern bluefin tuna are hampered

fig 26 reported catch of southern bluefin tuna by nation

by the fact that not all nations harvesting the stock are members of the CCSBT While Indonesia the Philippines South Africa and the European Union are all cooperating nonmembers or observers arrangeshyments with many other nations (including Spain and the United States) are not as far progressed

Since 2001 members and coopshyerating nonmembers have been 1954 1964 1974 1984 1994 2004

obligated to report trade in southern bluefin tuna through the Commisshysionrsquos Trade Information Scheme The scheme captures information about where how and when traded southern bluefin tuna are caught Overall reported catches are much lower now than they have been in the past (figure 26)


The CCSBT recently announced a 3115 tonne reduction in the annual TAC for the fishery This reduced TAC will apply until at least 2009 unless exceptional circumshystances emerge in relation to the stock in which case the TAC will be reviewed

biological status southern bluefin tuna fishery

kt

60

20

40

other Taiwan Japan Australia


southern bluefin overfished and overfishing The spawning stock is estimated to be at a low tuna occurring globally in 2005 fraction of its original biomass In 2006 a review

of the Japanese market sales of southern bluefin tuna confirmed significant levels of unreported catch over many years While the full impact of this new information on estimates of stock size and productivity remains uncertain it appears that the absolute size of the spawning stock could be more than double the level estimated by the 2005 assessment


65

Java


A number of legal challenges have been raised recently on the continued operation of the Commonwealth fishery and the export of its products To date these challenges have not been successful Southern bluefin tuna is classified as endangered in New South Wales and Victoria but not under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 A review of the species by the Threatened Species Scientific Committee concluded that the species is eligible for listing as endangered but also noted that doing so could be detrimental to the speciesrsquo survival because it could weaken Australiarsquos influence over the stockrsquos global management (DEH 2005)

Southern bluefin tuna comprise a single migratory stock in the temperate waters of the southern ocean A single spawning ground is located in the Indian Ocean

fig 27 movement of southern bluefin tuna around Australia and associated fishing effort

INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards

Limit of Australian Fishing Zone

Longlining

Main Australian fishing grounds for southern bluefin tuna

10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln

Pole and line and purse seining (for fish farms and fresh export)

110ordmE 120ordm 130ordm 140ordm 150ordm 160ordm

Source Campbell (2001)

66


between Christmas Island and the north west coast of Western Australia (figure 27) Unlike tropical tunas such as yellowfin and skipjack the species has a slow growth rate late age of maturity and is particularly vulnerable to overfishing

economic performance ABARE does not regularly survey the southern bluefin tuna fishery so estimates of net economic returns are not available Furthermore an up to date bioeconomic model has not been constructed for the fishery The only indicators of the economic performance of the fishery are estimates of latent effort and the value of quota

level of latency

AFMA usually sets the total allowable table 16 latent effort catch for the Commonwealth southern southern bluefin tuna fishery bluefin tuna fishery to coincide with Austral-

season catch TAC latencyiarsquos allocation from the CCSBT that has tonnes tonnes been 5 265 tonnes since 1989 The quota

1999-2000 5 257 5 265 02has been filled every year since 1999shy2000-01 5 248 5 265 032000 although overcatch in 2002-03 led 2001-02 5 271 5 265 00to some operators having their allocation 2002-03 5 399 a 5 265 00reduced in 2003-04 (Grosser 2003) 2003-04 5 254 5 145 a 00

(table 16) The very low level of latency of 2004-05 5 249 5 265 03 quota in the fishery implies that operatorsrsquo

a 2002-03 overcatch deducted from the 2003-04 TAC effort is being restricted to a point below the level of effort associated with open access

value of quota

The value a holder places on a unit of quota is related to the holderrsquos perception about the current and future profits of the fishery This makes quota values an imporshytant indicator of the profitability of a fishery For a seasonal lease in 2004-05 estimates of the price of southern bluefin tuna quota were over $10 a kilogram For a permanent transfer estimates are in excess of $100 a kilogram

High quota prices have ramifications for certain fishers in the eastern tuna and billfish fishery who have to hold a particular amount of southern bluefin tuna quota before they can leave port at some times of the year

67



The southern bluefin tuna fishery is a high value high profit fishery The fishery is managed by an ITQ system with a TAC of 5265 tonnes which is filled each season However fisheries scientists believe the stock is well below its 1980 biomass and that it is highly likely that current catches will lead to further declines in spawning biomass (CCSBT 2005) This raises the possibility that some proporshytion of profits over the past few decades may have been generated by fishing down the stock rather than harvesting at sustainable levels

ITQ management has proved effective in the fishery The introduction of ITQs in 1984 resulted in a substantial and rapid adjustment of the fleet Campbell et al (2000) concluded that in most cases smaller and possibly less efficient operashytors left the fishery within two years Campbell et al (2000) also concluded that ITQs facilitated increased profitability of the fleet created new opportunities and encouraged a change in fishing behaviour This included the targeting of larger fish for the Japanese sashimi market and value adding through farming of tuna

68


southern and eastern scalefish and shark fishery

at a glance southern and eastern scalefish and shark fishery

primary effort control All sectors have quota managed species although not all rights are issued as ITQs Input controls such as mesh size restrictions and area closures are also used

economic performance Quota for many species is unfilled even for overfished species Estimates of net economic returns for the Commonwealth trawl sector gillnet hook and trap sector and Great Australian Bight trawl sector are usually very low given the size of the fishery

biological status Eight species or species groups overfished ten stocks or species uncertain and ten stocks species or species groups not overfished

major home ports Commonwealth trawl sector Eden Lakes Entrance Portland and Ulladulla

Gillnet hook and trap sector Lakes Entrance Millicent San Remo and Adelaide

East coast deepwater trawl sector Hobart

major offloading ports Commonwealth trawl sector Eden Lakes Entrance Portland and (incl Victorian inshore trawl) Hobart Gillnet hook and trap sector Devonport Lakes Entrance Port Lincoln and San Remo

East coast deepwater trawl sector Brisbane Eden and Hobart

vessels operating Commonwealth trawl sector 96 (2004-05) Great Australian Bight trawl sector 12 Gillnet hook and trap sector 117 East coast deepwater trawl sector 2

2005-06 economic indicators gross value of production Commonwealth trawl (incl VIT ECDWT) a $44 million

Great Australian Bight trawl $155 million Gillnet hook and trap $215 million

allocated management costs $490 million a VIT and ECDWT refer to Victoria inshore trawl sector and east coast deepwater trawl sector respectively

69


overview The southern and eastern scalefish and shark (SESS) fishery was created in 2003 through the merger of four fisheries Each of the former fisheries remains as a sector of the new fishery They are

raquo Commonwealth trawl sector (previously the south east trawl fishery)

raquo Great Australian Bight trawl (GAB) sector

raquo east coast deepwater trawl (ECDWT) sector

raquo gillnet hook and trap (GHT) sector

Some sectors are divided again either to manage different methods more effecshytively or to incorporate state waters under Offshore Constitutional Settlements The Commonwealth trawl sector incorporates the Victorian coastal waters sector and the gillnet hook and trap sector comprises

raquo scalefish hook sector

raquo shark hook sector

raquo gillnet sector

raquo Tasmanian rock lobster sector

raquo South Australian coastal waters sector

raquo Tasmanian coastal waters sector

Fish trapping also takes place but this method is not defined as a separate sector

The fishery is managed according to the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 principally using output controls such as individual transferable quotas Despite being the Commonwealthrsquos most valuable fishery management is not optimal from an economic or biological point of view with many species being overfished and catches well below TACs The fishery was classified as a lsquotarget fisheryrsquo for the purposes of the Securing our Fishing Future business exit assistance package (see chapter 1) except for the Great Australian Bight trawl sector which does not have any overfished species

The fishery covers almost half of the AFZ from Sandy Cape in Queensland southshyward to Cape Leeuwin in Western Australia and includes waters around Tasmania (map 5) Each sector has a management area within the boundaries of the fishery

70


Commonwealth trawl and Great Australian Bight trawl sectors

The waters of the Commonwealth trawl sector start in the east near Sydney and then head south around Tasmania and west to Cape Jervis in South Australia (map 6) The Great Australian Bight sector begins where the Commonwealth trawl sector ends and continues westwards to Cape Leeuwin in Western Australia The east coast deepwater trawl sector starts at the northernmost boundary of the fishery and ends at the southern limit of the AFZ around Lord Howe Island


The scalefish hook sector of the gillnet hook and trap sector begins at the northernshymost part of the fishery and encompasses waters southward and westward to the South AustralianndashVictorian border (map 7) Beginning at the New South Walesndash Victoria border the scalefish hook sector coincides with the shark hook and gillnet sector The Tasmanian rock lobster fishery includes waters around Tasmania from the VictoriandashSouth Australian border to the VictoriandashNew South Wales border

71


72


catch composition The Commonwealth trawl sector is the largest of the sectors in the fishery in terms of both volume and value (figures 28 and 29) It accounts for 70ndash80 per cent of total landings in the fishery The gillnet hook and trap sector is the next largest in value terms although the share of landings in the Great Australian Bight trawl sector recently increased

The main species landed in the Commonwealth trawl sector are blue grenadier tiger flathead spotted warehou orange roughy and pink ling The principal fishing methods are demersal trawl midwater trawl and Danish seine Total catch for the Commonwealth trawl sector (including the VIT and ECOWT sectors) was over 20 100 tonnes in 2005-06

Deepwater flathead and bight redfish usually account for around half the landings in the Great Australian Bight trawl sector Catch in 2005-06 was just over 5400 tonnes

The gillnet hook and trap sectors were formed in 2003 when the southern shark fishery and south east nontrawl sectors formally merged Landings of school and gummy shark have consistently contributed 60ndash70 per cent of total landings However landings of school shark have fallen from around 2000 tonnes a year in the mid-1980s to around 300 tonnes a year since the late 1990s

Table 17 summarises the major species and methods of each sector

fig 28 volume of production by sector fig 29 value of production by sector southern and eastern scalefish and shark fishery southern and eastern scalefish and shark fishery

gillnet hook and trap gillnet hook and trap Great Australian Bight trawl Great Australian Bight trawl

40 Commonwealth trawl (inc VIT ECDWT) 120 Commonwealth trawl (inc VIT ECDWT)

100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73


table 17 methods target species and number of vessels by sector southern and eastern scalefish and shark fishery

main fishing vessels operating sector methods main species landed in 2004-05

Commonwealth trawl demersal trawl blue grenadier danish seine flathead

midwater trawl spotted (silver) warehou 96 orange roughy

Victorian inshore trawl demersal trawl school whiting flathead

Great Australian Bight trawl demersal trawl deepwater flathead 12 midwater trawl bight redfish

leatherjacket blue grenadier

east coast deepwater trawl demersal trawl 2 midwater trawl alfonsino

gillnet hook and trap sectors gillnet gummy shark 117 demersal longline ling dropline blue eye trevalla

fish traps saw sharks

trade It is not possible to derive the exports of the southern and eastern scalefish and shark fishery from ABS trade data because the data do not reveal the originating fishery In addition there are very few finfish species that are reported separately in the ABS data Most finfish are categorised into lsquoother fishrsquo groups



The fishery is managed principally by output controls under the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 Total allowable catches (TACs) are set for 34 species groups In most cases these are allocated to fishers as statutory fishing rights in the form of individual transferable quotas (ITQs)

74


To catch quota species a fisher must hold relevant quota and a boat SFR or fishing permit There are five types of boat SFR

raquo shark hook boat SFR

raquo gillnet boat SFR

raquo scalefish hook boat SFR

raquo trawl boat SFR

raquo Great Australian Bight trawl boat SFR

Each boat SFR authorises the use of a particular method in a particular area

AFMA has issued fishing permits (rather than boat SFRs) to manage state waters off the coasts of Victoria Tasmania and South Australia These coastal water permits authorise the use of a specific fishing method in the waters of the relevant state for species managed under Commonwealth TACs (for which the boat must also hold sufficient quota) Note however that Tasmania manages catches of blue warehou school whiting jackass morwong ocean perch silver trevally spotted warehou and tiger flathead inside three nautical miles

Off New South Wales north of Barrenjoey Head (just north of Sydney) out to approximately 80 nautical miles trawling is managed by New South Wales (see map 5) South of Barrenjoey Head AFMA manages trawling outside 3 nautical miles For other fishing methods New South Wales manages fishing out to 80 nautical miles along the length of its coast Quota stocks that span New South Wales and Commonwealth waters present management problems for AFMA because TACs do not apply to catch in New South Wales waters Reported catch from New South Wales fisheries in 2004-05 included over 2500 tonnes of fish that are managed by quota in the adjacent Commonwealth jurisdiction consisting mostly of school whiting silver trevally and tiger flathead Fishers with dual endorsements to New South Wales and Commonwealth waters must make a pre-departure report to AFMA and may only fish in one jurisdiction per trip

Fishers may catch nonquota species using a boat SFR but landings of quota species from Commonwealth waters must be covered by quota An exception to this applies to holders of a Great Australian Bight trawl permit who may fish for the following species without quota blue eye trevalla blue grenadier blue warehou flathead gemfish (eastern) gemfish (western) jackass morwong john dory pink ling mirror dory ocean perch species royal red prawn school whiting silver

75


trevally and spotted warehou A separate TAC is set for redfish caught in the Great Australian Bight Irrespective of the sector all fish must be unloaded to a holder of a Fish Receiver Permit Table 18 shows the TACs for the 2007 season which runs from 1 January 2007 until 30 April 2008

The fishery management plan allows AFMA to determine a percentage of a holderrsquos quota entitlements that can be transferred between seasons These allow fishers to catch more than their entitlement in one year by deducting it from their following yearrsquos entitlement Similarly a fisher can catch less than their entitlement in one season and carry a percentage over into the next year These are known as overcatch and undercatch respectively For the 2007 season almost all species have undercatch and overcatch provisions of 10 per cent (AFMA 2006k) Some economic issues associated with providing this facility are discussed later in the section

Industry funded management costs are recovered using a levy system with two tiers One tier is payable based on the type of boat SFR or fishing permit held In

table 18 total allowable catches 2007 season southern and eastern scalefish and shark fishery

species TAC species TAC tonnes tonnes

blue eye trevalla 785 royal red prawn 556 blue grenadier 4 113 school whiting 978 blue warehou ndash east and west 313 silver trevally 191 flathead 4 020 silver warehou 4 117 gemfish east 121 school shark 352 gemfish west 200 gummy shark 2 467 jackass morwong 1 171 elephantfish family 123 john dory 237 sawshark 410 pink ling 1 537 oreos ndash basket 190 mirror dory 788 ribaldo 257 ocean perch 585 smooth oreo ndash Cascade 93 orange roughy ndash east 27 smooth oreo ndash other 52 orange roughy ndash south 40 deepwater sharks ndash east 21 orange roughy ndash west 61 deepwater sharks ndash west 10 orange roughy ndash Cascade Plateau 483 alfonsino (ECDW) 576 orange roughy ndash GAB Esperance 52 deepwater flathead (GAB) 2 109 redfish 896 bight redfish (GAB) 3 338 Source AFMA (2006k)

76


2007 these levies ranged from $23492 (for an east coast deepwater permit) to $47 00625 (for a Great Australian Bight trawl boat SFR) The other tier relates to the number of quota SFRs held For example the levy per john dory quota SFR was $01024 in 2006-07

In addition to output controls some input controls are used including limited entry gear restrictions on mesh size and depth setting bycatch limits and area closures

Entries in the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 relating to economic efficiency appear in table 19

table 19 Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 ndash excerpts relating to economic efficiency

measures by which performance criteria objectives of the the objectives are against which measures management plan are to be attained include taken will be assessed are

to maximise economic implementing long term that economic efficiency of the efficiency in the exploitation management arrangements fishery is assessed periodically of scalefish and shark that pursue economic efficiency using economic data provided resources within the fishery for the fishery on request by fishing concession

holders to ensure the best use of the living resources of the fishery

Quotas were introduced for alfonsino in the east coast deepwater trawl sector in 2006 although they are issued as quota on fishing permits Orange roughy bight redfish and deepwater flathead have been allocated as SFRs in the Great Australian Bight trawl sector Provisional quota SFRs for various shark species were granted in mid-2007 Prior to these coming into effect shark species remain as ITQs on permits


The southern and eastern scalefish and shark fishery was a target fishery for the Securing our Fishing Future structural adjustment package Various permits and boat SFRs were purchased as well as some quota SFRs (table 20) Given the magnishytude of the reduction in permits the operating environment of the fishery is likely to be different in future

77


table 20 endorsements surrendered under concession buyback southern and eastern scalefish and shark fishery

concessions concessions in fishery purchased in

type of concession prior to buyback rounds 1 and 2 reduction no no

gillnet boat SFR 88 26 30 scalefish hook boat SFR 122 63 52 shark hook boat SFR 30 17 57 trawl boat SFR 118 59 50 trap permit auto longline permit 20 8 40 east coast deepwater permit 18 8 44 SA coastal waters permit 41 17 41 Tasmanian coastal waters permit 82 38 46 Victorian coastal waters permit 51 28 55 redfish quota SFR 586 720 112 822 19 john dory quota SFR 235 784 30 889 13 silver trevally quota SFR 538 740 74 912 14 jackass morwong quota SFR 1 480 633 114 872 8 royal red prawn quota SFR 485 394 103 296 21 Source Abetz (2006a)


AFMA has proposed changes to the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 that will change the names of quota species to reflect a new standard developed from research funded by the Fisheries Resources Research Fund (FRRF) (AFMA 2006d) This will affect smooth dory species in particular

From 1 June 2006 holders of gummy shark school shark elephantfish and deepshywater shark quota were able to transfer part of their quota entitlements Prior to 1 June 2006 holders of shark quota could only transfer their entire package The change follows the resolution of litigation ensuing from the initial allocation and allowed provisional quota statutory fishing rights to be issued in mid-2007

AFMA plans to reconcile a fisherrsquos catch against their quota entitlements quarterly in 2007 Fishers will have approximately one month to cover any catch in excess of their quota More frequent reconciliation should prevent fishers accruing large

78


quota deficits during the season only to find it difficult to cover their catch with quota at the end of the season Overcatch and undercatch provisions will not apply to intraseason reconciliations (AFMA 2006d)

A Ministerial Direction (MFFC 2005) in November 2005 asked AFMA to consider the costs and benefits of phasing out boat SFRs if they impede autonoshymous adjustment AFMA may also consider whether retaining boat SFRs but removing gear-specific rights is feasible If either of these changes are adopted quota SFRs would be issued for various zones to reflect the spatial distribution of each species Some mechanism would need to be in place to regulate catches of nonquota species (AFMA 2006j)

biological status

A brief summary for each quota species is provided in the table following This information is drawn from Larcombe et al (2007)

biological status southern and eastern scalefish and shark fishery


alfonsino uncertain Alfonsino are distributed throughout the worldrsquos tropical and temperate oceans however their distribution in Australian waters is not fully known

bight redfish not overfished not The stock structure of bight redfish is unknown The latest subject to overfishing stock assessment for bight redfish estimated an exploited

biomass of 29 763 tonnes The current biomass is estimated to be 94 per cent of unfished levels

deepwater not overfished The stock structure of deepwater flathead is unknown The fl athead uncertain whether exploitable biomass was estimated in 2006 to be 10 087

overfishing is occurring tonnes which is less than previously thought The stock assessment also indicated that the current biomass is at 50 per cent of the unfished level

blue-eye not overfished Blue-eye trevalla are found on the continental slope trevalla not subject to overfishing throughout the SESS fishery management area The 2006

but localised overfishing assessment indicated that fishing mortality was likely to be may be occuring less than natural mortality This suggests that the stock is not

overfished as a whole although concern remains about the potential for localised overfishing

continued

79




blue grenadier not overfished not Genetic studies suggest there is a single breeding population subject to overfishing at of blue grenadier in Australian waters which is distributed current catch levels from mid-New South Wales to southern Western Australia

Two distinct sectors in the fishery are assessed a year-round fishery on nonspawning grounds throughout the SESS fishery and a winter spawner fishery off western Tasmania The 2006 stock assessment estimated that the female spawning biomass was at 36 per cent of unfished biomass

blue warehou overfished unclear Although a stockndashstructure study has indicated that two stocks whether or not exist in Bass Strait a common TAC applies for both stocks overfishing is currently Overall the biomass of blue warehou is estimated to be occurring below 40 per cent of the unfished level

eastern school not overfished not Recent assessments assumed a single stock for this species in whiting subject to overfishing the SESS fishery While catches have been well below TACs for

several years the 2006 stock assessment indicated that fishing mortality was below natural mortality and therefore overfishing was not occurring

fl athead not overfished not Tiger flathead is assumed to be a single stock in the SESS subject to overfishing at fishery management area The 2006 stock assessment current catch levels estimated the current spawning biomass to be 42 per cent of

the prefished (1915) level and noted that catch levels over 3000 tonnes were not sustainable in the long term

gemfi sh ndash overfished and over- The eastern gemfish stock extends from Cape Morton in eastern stock fishing status uncertain southern Queensland to the western edge of Bass Strait

possible problem There has been no quantitative stock assessment with bycatch mortality since 2000 because of insufficient data

gemfi sh ndash overfished and The western gemfish stock extends from western Bass Strait western stock overfishing status across the Great Australian Bight to Geraldton in Western

uncertain Australia Unlike the eastern gemfish stock which spawns in winter the western stock spawns in summer Spawning aggregations are not targeted No formal stock assessment has been undertaken and it is not known whether current catches are sustainable or whether overfishing is occurring

continued

80


biological status southern and eastern scalefish and shark fishery continued


jackass overfished status A single common stock off south eastern Australia is assumed morwong uncertain stocks for management purposes The most recent stock assessment

not subject to in 2006 estimated that current biomass is between 15 per overfishing cent and 35 per cent of the unfished biomass although the

model outputs are highly sensitive to CPUE Recent catches and the lower 2007 TAC are not considered a threat to the stock so it is considered to not be subject to overfishing

john dory overfished status The Australian distribution of john dory extends from southern uncertain stocks not Queensland to the central west coast of Western Australia A subject to overfishing common stock is assumed for management purposes Little is

known of the biology and life history of the species A 2006 analysis indicated that fishing mortality was lower than natural mortality so the stock is considered to not be subject to overfishing It is uncertain whether the stock is overfished

mirror dory not overfished not The distribution of mirror dory extends from southern Western subject to overfishing at Australia to northern New South Wales A common stock is current catch levels assumed for management purposes Changes in the size

composition of annual catches suggest that recruitment is variable andor that stock size is influenced by environmental factors No formal quantitative stock assessment has been undertaken but standardised catch rates have been stable over the past six years and catch-curve analyses indicate fishing mortality is less than natural mortality

ocean perch overfished and Two distinct species exist in the SESSF management area an overfishing status inshore species (also known as coral cod) and an offshore uncertain species No quantitative stock assessments have been

undertaken for either species It is not known whether current catches are sustainable although catch rates for both species have declined over the past decade and there is a high level of discarding since much of the catch is below marketable size

orange roughy there are five zones The distribution of orange roughy extends from central New where quota South Wales southwards around Tasmania and across the management applies Great Australian Bight to southwest of Western Australia

They also occur on seamounts and ocean ridges off southern

continued

81




orange roughy Australia Despite considerable research the stock structure continued of orange roughy in the SESS fishery remains uncertain

Orange roughy form dense aggregations for spawning and feeding which makes them extremely vulnerable to overfishing As a long lived (100ndash150 years) and slow growing species with a late age of maturity low mortality and low fecundity if overfishing occurs recovery will be slow

ndash eastern zone overfished not The 2006 stock assessment indicated that the current subject to overfishing biomass is likely to be below 20 per cent of the unfished

level However a TAC of 25 tonnes for 2007 (bycatch only) and trawling closures mean that the stock is not subject to overfishing

ndash southern zone overfished not The assessment for this zone has not been updated since subject to overfishing 2000 Given the low TAC of 25 tonnes for 2007 (bycatch

only) and trawling closures the stock is considered to not be subject to overfishing

ndash western zone overfished not Assessments have been hampered by speculation over stock subject to overfishing structure and possible links with orange roughy populations in

the Great Australian Bight fishery Yet despite uncertainty about current stock status there is little doubt that the western zone is overfished However a TAC of 50 tonnes for 2007 (bycatch only) and trawling closures mean that the stock is not subject to overfishing

ndash Cascade not overfished not The Cascade Plateau stock is considerably larger and older Plateau subject to overfishing than orange roughy in the other management zones The

2006 stock assessment estimated the 2005 female spawning biomass to be between 62 and 82 per cent of the prefished (1989) population

ndash Esperance overfished and The stock structure is unknown No quantitative assessment of (GAB) overfishing status the stock has been made

uncertain

oreo dory overfished not Australian catches have been dominated by spiky oreo ndash other subject to overfishing which are a long lived and slow growing species There are

no biomass estimates but a marked reduction in recent landings and catch rates indicates spiky oreo to be overfished However these low catches and trawl closures mean that the stock is not subject to overfishing

continued

82




oreo dory ndash smooth

Cascade Plateau ndash overfished status uncertain but not subject to overfishing elsewhere ndash overfished

Age studies suggest that smooth oreos are a slow growing and long lived species There are no biomass estimates for Australian stocks but a marked reduction in recent landings and catch rates indicate the species to be overfished except on the Cascade Plateau where catch rates have remained

but not subject to overfishing

relatively stable Given the TACs have been set for bycatch purposes only and trawl closures have been implemented overfishing is thought not to be occurring

pink ling overfished and overfishing status uncertain

The distribution of pink ling spans from cental New South Wales to southern Western Australia A common stock is assumed for management purposes The most recent assessment is not robust enough to provide reliable abundance estimates However recent or continuing declines in catch rates are of concern A single TAC applied to the two stocks increases the risk that catches arewill not be appropriate for each stock

redfi sh overfished and overfishing status uncertain

Redfish commonly occur from northern New South Wales to eastern Bass Strait Tagging studies suggest there is a common redfish stock off New South Wales but growth studies suggest there may be some northndashsouth structuring Catch data suggest that the stock has cyclic fluctuations that are possibly related to the Southern Oscillation Index The 2006 assessment indicated that fishing mortality was 125ndash15 times the natural mortality indicating the stock is overfished It is unclear whether recent management changes will enable stocks to rebuild

ribaldo not overfished not subject to overfishing

Ribaldo are found on slope waters in the SESS fishery management area and are usually caught as bycatch Little is know of their life cycle and behaviour The 2006 assessment indicated that fishing mortality is much less than the estimated natural mortality so the stock is considered to not be overfished

royal red prawn

overfished and overfishing status uncertain

Reproductive studies suggest there is a common stock of royal red prawns along the entire New South Wales coast No formal stock assessments have been undertaken since 1994 and sustainable yield estimates are not available for the species

continued

83




sharks Sharks unlike fish typically give birth to small numbers of well developed young They are unlikely to exhibit large annual variations in recruitment levels but given their long lifespan and late onset of maturity they are more susceptible to overfishing

deepwater sharks

overfished in the upper slope unclear whether or not overfishing is

currently occurring Not overfished in the

It is uncertain whether overfishing is occurring but sharks tend to be susceptible to overfishing as they are commonly long lived often mature later and have relatively few young

midslope overfishing is unlikely to be occurring

school shark overfished and overfishing status uncertain

School shark move extensively throughout the waters of southern Australia and a single genetic stock is thought to exist within the fisheryrsquos management zone and Western Australian waters The 2001 stock assessment estimated that mature biomass was very low ranging between 9 and 14 per cent of prefished levels A 2006 update provided no evidence of an increase in abundance of school shark

gummy shark not overfished probably not subject to overfishing

Gummy shark are endemic to the temperate waters of the continental shelf and slope off southern Australia The most recent assessment suggests that pup production has been slowly declining since the 1980s although pup production is still above 40 per cent of prefished levels

sawshark and elephant fish

uncertain Catch information for the two sawshark species is not reported individually which complicates assessments for sawshark A 2004 assessment indicated that pup production was around 30 per cent of the unfished level A 2004 assessment for elephant fish indicated that pup production was around 20 per cent of the unfished level

silver trevally overfished overfishing status uncertain ndash limited evidence suggesting the stock is rebuilding

The distribution of silver trevally extends southwards from North West Cape in Western Australia around to northern Queensland A common stock is thought to exist in the SESS fishery management area Conclusions from the 2006 assessment model were highly uncertain However the stock is still considered overfished and it is unclear whether recent reductions to catches will enable the stock to rebuild

spotted warehou

not overfished and not subject to overfishing

Spotted warehou are an aggregating species that are found throughout the SESS fishery management area A recent stock-structure study indicated that a single stock exists east and west of Bass Strait The 2004 stock assessment indicated that the current biomass is about 60 per cent of the unfished biomass


84


fi nancial performance ABARE regularly conducts economic surveys of fishers in the gillnet hook and trap and Commonwealth trawl sectors for the Australian Fisheries Surveys Report These financial estimates reflect an average fisherrsquos accounting statements and do not take into account other economic costs such as the opportunity cost of capital and family labour


Average receipts and cash costs in the sector remained relatively stable over the period 2002-03 to 2004-05 (table 21) (Vieira et al 2007) Crew costs are usually the largest single cash cost followed by fuel and repairs and maintenance

table 21 fi nancial performance of vessels in the Commonwealth trawl sector southern and eastern scalefish and shark fishery

2002-03 2003-04 2004-05

seafood receipts $ 571 764 (14) 543 479 (11) 566 455 (18)

nonfishing receipts $ 48 848 (13) 60 796 (13) 62 018 (16)

total cash receipts $ 620 612 (14) 604 275 (11) 628 473 (17)

administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)

freight and marketing expenses $ 107 628 (15) 96 972 (12) 90 121 (16)

fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)

licence fees and levies $ 20 020 (23) 14 885 (13) 13 701 (13)

repairs and maintenance $ 67 048 (13) 67 448 (13) 72 133 (13)

other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)

less depreciation a $ 19 885 (15) 20 291 (21) 21 097 (14)

boat business profit $ ndash4 291 (608) 4 632 (468) ndash11 621 (134)

plus interest leasing and rent $ 33 150 (17) 48 027 (22) 60 832 (39)

profit at full equity $ 28 860 (94) 52 658 (46) 49 211 (71)

capital ndash excl quota and licences $ 351 505 (12) 376 337 (14) 325 565 (22)

ndash incl quota and licences $ 1 284 094 (12) 1 247 626 (11) 1 278 498 (14)

rate of return ndash to boat capital b 82 (93) 140 (47) 151 (55)

ndash to full equity c 22 (94) 42 (46) 38 (61)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences na Not applicable Note Figures in parentheses are relative standard errors A guide to interpreting these is included in appendix A

85



The results of ABARErsquos most recent survey of the gillnet hook and trap sector (Vieira et al 2007) show that average per boat cash receipts increased by almost 22 per cent to $343 700 a vessel in 2004 05 (table 22) However total cash costs per boat increased to an average of $314 300 a boat in 2004-05

table 22 fi nancial performance of vessels in the gillnet hook and trap sector southern and eastern scalefish and shark fishery

2003-04 2004-05

seafood receipts $ 272 097 (23) 317 015 (14)



administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)





capital ndash excl quota and licences $ 141 504 (28) 240 299 (27) ndash incl quota and licences $ 617 246 (33) 765 190 (19)


ndash to full equity c 114 (26) 90 (21)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences Note Figures in parentheses are relative standard errors A guide to interpreting these is included in appendix A

86


economic performance ABARE has been regularly conducting economic surveys of the Commonwealth trawl fishery since the mid-1990s and the gillnet hook and trap fishery since the late 1990s This allows the calculation of net economic returns and other economic performance indicators Survey data have been used as an input to the construction of a bioeconomic model and various studies of the efficiency of the fleet Estimates of latent effort in the form of unused quota are readily available from AFMA data

See Elliston et al (2004) for more details of the major economic issues in the fi shery

level of latency

Although the southern and eastern scalefish and shark fishery uses the governshymentrsquos preferred management arrangement there is significant latent effort in the fishery FERM (2004) reports that soon after their introduction TACs and catch for many species had increased by nearly 50 per cent While it is not expected that all quotas bind every season in a multi-species fishery no speciesrsquo quota was met in 2006 and only four species had 95 per cent or more of the availshyable quota used Overall almost a third of available TAC remained uncaught in 2006 Of more concern is that the TACs for many species that are classified as overfished or uncertain were not close to being filled (figure 30) For example in 2006 41 per cent of available redfish quota 27 per cent of silver trevally quota and 23 per cent of smooth oreo dory quota were caught Effort in the fishery will gravitate to the open access equilibrium when TACs are set too high (and hence are nonbinding)

Nonbinding TACs also affect the rate of autonomous adjustment in the fishery Autonomous adjustment is the process of effort gravitating to the most efficient operators One reason that it has not been observed on a large scale in the fishery is that controls on catch are rarely binding This makes the quota price for many species relatively low and unlikely to offset the transaction costs of trading Another hurdle to autonomous adjustment is that the market value of many vessels in the fishery is probably very low so operators have an incentive to continue fishing until their vessel is due for a major overhaul

87


fig 30 catch as a percentage of available TAC in the southern and eastern scalefish and shark fishery by species in 2006 a

pink ling orange roughy (Cascade Plateau)

blue grenadier gummy shark

flathead school shark

blue eye trevalla gemfish (eastern) gemfish (western)

deepwater shark (west) saw shark

ribaldo orange roughy (eastern)

bight redfish orange roughy (western)

jackass morwong smooth oreodory (cascade)

deepwater shark (east) mirror dory

blue warehou orange roughy (Albany amp Esperance)

elephantfish oreo

spotted warehou orange roughy (southern)

ocean perch john dory

deepwater flathead redfish

royal red prawn school whiting

silver trevally smooth oreodory

20 40 60 80 100

stock is overfished or overfishing is occurring status of stock is uncertain stock is not overfished and overfishing is not occurring

a Available TAC incorporates undercatch and overcatch provisions Source AFMA (2007) and Larcombe et al (2007)

88




Net economic returns in the Commonwealth trawl sector are very low given the size of the fishery The highest estimate for the past six years is $55 million (in 2005shy06 dollars) and in the most recent survey year they were as low as ndash$43 million (figure 31) (Vieira et al 2007) This is not surprising given the substantial amount of latent effort in the fishery


In relative terms the gillnet hook and trap sector is more profitable than the trawl sector of the fishery Over the period 1998-99 to 2002-03 estimates of net return have averaged $13 million in real terms (figure 32)

increasing effort

Fishing effort in the Commonwealth trawl sector measured in hours trawled has increased over time particularly since the introduction of ITQ management in 1992 (figure 33) Since ITQs were introduced in 1992 the number of hours trawled in the Commonwealth trawl sector has increased from 58 000 to 117 000 in 2004 However at the same time that fishing effort has been increasing the total value of the catch has declined As a result catch mdash measured in tonnes or value terms mdash per

fig 31 Commonwealth trawl sector fig 32 gillnet hook and trap sector southern and eastern scalefish and shark fishery southern and eastern scalefish and shark fishery

revenue revenue net economic returns costscosts net economic returns 2580

20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89


fig 33 number of hours trawled in the hour trawled has declined over Commonwealth trawl sector the period This result suggests that southern and eastern scalefish and shark fishery increasing effort in the fishery has

100

80

60

40

20

lsquo000 hours

been largely inefficient dissipating the net returns to the fishery If the underlying fish stock were larger it is likely that the same quantity of fish could be caught with fewer trawl hours

sleeper holdings and transacshytions costs

The price of a quota unit is a reflecshy1988 1992 1996 2000 2004 tion of the amount of current and

25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p

future profits that holders believe can be generated from it When profits are high quota prices are also high Given the very high levels of latent effort and very low net economic returns in the fishery the price of quota for many species is probably low Another indicator that suggests that this might be the case is the large amount of very small quota holdings in the southern and eastern scalefish and shark fishery Public registers show that 21 per cent of entities hold 85 per cent of the quota (figure 34) The remaining 207 entities held an average of only 18 tonnes each based on 2006 season TACs

Many of these small holdings are fig 34 cumulative sum of ITQ ownership used by the holder or traded during march 2006

the season However Connor et southern and eastern scalefish and shark fishery al (2001) identify many holdings that are neither fished against nor traded Over the period 1992mdash98 18 per cent of clientstock pairs showed no activity (table 23) It is unlikely that lack of participation is motivated by holders being uncomshyfortable with the quota system Connor et al (2001) show that as early as 1998 mdash only six seasons after quotas were introduced mdash 96 per cent of clients participated in

number of entities the quota market The more likely

90


table 23 sleeper holdings in the Commonwealth trawl sector southern and eastern scalefish and shark fishery

1992 1993 1994 1995 1996 1997 1998 number of client stock pairs 1 429 1 511 1 562 1 615 1 699 1 705 1 776 number of sleeper clientstock pairs 265 235 337 309 316 309 239 proportion of total 19 16 22 19 19 18 13 Source Connor et al (2001)

reason for sleeper holdings is that the price of quota for some species is lower than the costs of finding a buyer and completing a trade

Given the reduction in TACs in 2007 it is likely that quotas will be more binding in future In the long run this will increase the size of fish stocks with profits and quota prices likely to rise However until stocks recover profits are not likely to increase significantly In the meantime AFMA has attempted to reduce transaction costs by introducing a free bulletin board system called Quotaboard that allows holders to communicate with one another ABARE is working with AFMA to assess the effecshytiveness of the new system

undercatch and overcatch provisions

The management plan allows operators to catch more than their entitlement in one year by deducting it from the following year Similarly a proportion of unfilled quota from one season can generally be transferred to the next The level of over-catch and undercatch provisions varies from species to species

There are a few economic issues relating to the provision of this service First they can cause catches to differ significantly from the determined total allowable catch meaning managers cannot control the output of their fisheries Second these provishysions may impede the effective working of a tradable quota system by reducing the need for fishers to participate in it Third inventive fishers have devised ways to use the provisions to move more quota than perhaps is intended by the manageshyment plan A small operator with a relatively large proportion of their quota uncaught can transfer it to a larger operator at the end of the season When under-catch provisions are applied to the large operatorsrsquo holdings the small holderrsquos share is preserved because it represents a much smaller percentage of the large operatorrsquos total holdings The larger operator simply transfers the preserved quota back to the small operator at the start of the next season

91


A number of justifications are made for overcatch and undercatch provisions One is that they prevent AFMA having to prosecute fishers for small overcatches When catches are reconciled against quota only one or two times each season a case could possibly be made to allow fishers to have very small amounts of overcatch This justification will lose weight in 2007 when quota will be reconciled quarterly (AFMA 2006e) and new methods for prosecuting fishers are introduced Second it is argued that overcatch provisions allow fishers to take advantage of unexpected abundances This argument is not strong given that only four TACs had greater than 95 per cent of their TAC caught in 2006 Besides an in-season increase in allocashytions would also allow fishers to take advantage of unexpected abundance

bioeconomic models optimal harvest strategy

Kompas et al (2006) report preliminary results from a bioeconomic model (with uncertainty) for the Commonwealth trawl sector based on the 2004 fishing season They find that for each of the five stocks analysed mdash orange roughy (eastern zone) orange roughy (Cascade Plateau zone) spotted warehou ling (trawl) and flathead mdash the long run stock size is larger at the point of maximum economic yield (MEY) than at maximum sustainable yield (MSY) For example the stock of ling is 29 per cent larger at MEY than it would be at MSY (table 24) It is important to note that these results are based on the 2004-05 stock assessment If the stock assessment is updated the results would likely change A large stock is a key component of maximising net economic returns because a given level of harvest is cheaper to catch when the stock is thick It also shows that pursuing net economic returns is compatible with a secure fish stock

table 24 preliminary optimal harvest strategies based on 2004-05 stock assessment southern and eastern scalefish and shark fishery

stock at MEY catch in long run optimal initial 2007 species stock at MSY 2004 TAC a TAC TAC

tonnes tonnes tonnes tonnes

orange roughy (eastern) 115 600 703 520 25 orange roughy (Cascade Plateau) 147 1 600 995 665 400 spotted warehou 108 4 100 4 117 3 114 3227 ling (trawl only) 129 1 073 1 397 914 1 200

(total SESS) flathead 103 3 200 3 850 2 980 2 850 a Possible TAC when the stock has settled at its steady state Source Kompas et al (2006)

92


The bioeconomic model also provides estimates of steady state MEY harvests and optimal initial harvests to allow for stocks to rebuild while maximising long term profits In all cases the model indicates that TACs need to be reduced from 2004 catch levels to maximise net economic returns In some cases the necessary reducshytions in catch are large [almost 60 per cent for orange roughy (Cascade Plateau)] but for others the reductions are relatively small (only 7 per cent for flathead) The benefits of restricting catches now are realised in the future when for almost all species a TAC could be set that results in larger catches than were being made in 2004 For example implementing a TAC of 2980 tonnes now for flathead allows a TAC of 3850 tonnes to be set in the future when the stock has recovered to a long run equilibrium biomass Again it is important to note that these TACs are based on the 2004-05 stock assessment and if the stock assessment is updated the results would be likely to change


The southern and eastern scalefish and shark fishery is a complex multispecies and multigear fishery Stocks of many species span boundaries of Commonwealth and state jurisdictions or are active in both There are also a very large number of operators and management of the fishery has been hampered somewhat by litigation about how rights were initially allocated

Output controls have been part of the fisheryrsquos management since gemfish came under a TAC system in the late 1980s In the intervening eighteen years many of the fisheryrsquos stocks have become overfished and trawl hours have increased signifishycantly Estimates of net economic returns are generally very low given the gross value of production of the fishery

This does not reflect an inappropriateness of output controls to solve the open access problem in fisheries They have worked well in the southern bluefin tuna fishery and the Heard Island and McDonald Island fishery and have a number of advantages over input controls As is always the case the fundamental key to achieving profitable and sustainable outcomes for fisheries is restricting catch or effort An ITQ system has been adopted in the southern and eastern scalefish and shark fishery but TACs have generally not restricted catch While it is not expected that the TAC of every species is filled each season (or even in most seasons) in a multispecies fishery it is very common in the southern and eastern scalefish and shark fishery for the TAC of only one or two species to be filled

93


Essentially fishers are free to fish up to the point of open access equilibrium where no profits are earned and the stock is relatively lsquothinrsquo

While it appears that TACs have historically been set too high there is evidence that ITQs have led to cost savings in the fishery as quota has been transferred from less efficient operators to more efficient operators (Che et al 2002) Che et al (2002) demonstrated that cost savings of 18ndash21 cents a kilogram for every 1 per cent increase in the volume of quota traded in the south east fishery have been achieved

A TAC set too high can be dangerous for the long term sustainability of the fishery Increases in market prices or a decrease in fuel prices can induce fishers to apply extra effort Managers would be unable to prevent this in the short term because TACs are unlikely to be set appropriately with catches for many overfished species well below their TAC

However many of the TACs for the 2007 fishing season (1 January 2007 to 30 April 2008) have been reduced and have the potential to restrict catches of key species Also the Securing our Fishing Future structural adjustment package removed a significant number of boats from the fishery For these reasons the southern and eastern scalefish and shark fishery is likely to be more profitable in the future However over the next few years it is likely that revenues will be lower than they have been in the past because TACs are lower While fishing costs are likely to fall in the short term profits are not likely to be significantly higher until stocks rebuild and the cost per unit of catch falls significantly

94



at a glance Torres Strait fisheries

primary effort control Torres Strait prawn Input controls implemented as a limit on the number of fishing nights

Torres Strait rock lobster Input controls and catch limits

economic performance Recent reductions in the number of fishing nights available to prawn fishers are likely to lead to greater net economic returns in the long run

biological status Torres Strait prawn tiger prawn not overfished

endeavour prawn uncertain king prawn uncertain

Torres Strait rock lobster not overfished

major offloading ports Torres Strait prawn Cairns tropical rock lobster Thursday Island

vessels operating 54 Torres Strait prawn (2005-06) 21 tropical rock lobster (commercial nonindigenous)

2005-06 economic indicators gross value of production prawn fishery $132 million

rock lobster fishery $123 million reef line fishery $09 million spanish mackerel fishery $14 million

allocated management costs all fisheries $23 million

overview Commercial fishing activity in the Torres Strait Protected Zone is managed by the Protected Zone Joint Authority (PZJA) The PZJArsquos jurisdiction extends over waters between Australia and Papua New Guinea west to the Arafura Sea and east to the Coral Sea (map 8) There are ten fisheries managed by the PZJA of which the most valuable are the Torres Strait prawn fishery and the Torres Strait tropical rock lobster fishery Others include fisheries for Spanish mackerel barramundi pearl shell dugong and turtle finfish crab trochus and sea cucumber many of which are traditional rather than commercial fisheries Parts of the management and compliance responsibilities are contracted to AFMA and various Queensland fisheries agencies The Torres Strait Treaty of 1985 provides for resource sharing in the zone between Australia and Papua New Guinea

95


catch composition In 2005-06 the Torres Strait fisheries produced over 2200 tonnes of fisheries products valued at almost $29 million (figures 35 and 36) Landings in the prawn fishery contributed more than 60 per cent of the total volume and just less than 50 per cent of total value of the Torres Strait fisheries The tropical rock lobster fishery is also very important in 2005-06 it contributed 27 per cent of the total volume and 44 per cent of the total value of Torres Strait fisheries Both the reef line and Spanish mackerel fisheries are much smaller

Torres Strait prawn fishery

The two main species targeted in the prawn fishery are brown tiger prawns and blue endeavour prawns In 2005-06 landings consisted of 567 tonnes of brown tiger prawns and 694 tonnes of blue endeavour prawns (figure 37) Other prawn species were also caught as well as bugs scallop and squid to a total weight of 81 tonnes

96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt


volume of production Torres Strait fisheries

Torres Strait reef line fishery Torres Strait Spanish mackerel Torres Strait tropical rock lobster Torres Strait prawn

value of production Torres Strait fisheries

fig 36

40

50 Torres Strait reef line fishery Torres Strait Spanish mackerel

30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06

Torres Strait tropical rock lobster Torres Strait prawn

The real gross value of production of the Torres Strait prawn fishery in 2005-06 was $132 million (figure 38) This is less than 40 per cent of the corresponding value in 1998-99 of $347 million (all in 2005-06 dollars) Prices received in the fishery have fallen at least in part because of increased international competishytion (particularly with cheaper lower grade farmed substitutes from Asia) and the appreciation of the Australian dollar

fig 37

kt

volume of production by species Torres Strait prawn fishery

other endeavour prawn tiger prawn

1999 2001 2003 2005 -2000 -02 -04 -06

fig 38

other 30 endeavour prawn 25 tiger prawn

20

15

10

5 2005-06

$m

value of production by species Torres Strait prawn fishery

97

1999 2001 2003 2005 -2000 -02 -04 -06


The fishery operates between March and December and all trawl activity occurs at night Vessels operating in the fishery are able to remain at sea for lengthy periods by restocking using motherships and fuel barges located at various points in the Torres Strait Ninety per cent of operators also hold entitlements for Queenslandrsquos east coast trawl fishery so few vessels fish exclusively in the Torres Strait prawn fishery

Refer to the section on the northern prawn fishery for information about Australian exports and imports of prawn products

Torres Strait tropical rock lobster fishery

A steady four year increase in the volume of production in the tropical rock lobster fishery ended in 2005-06 when production fell 32 per cent to 597 tonnes (figure 39) However the volume of production was still above the average of the past eight years The majority of fishing takes place from March to August

The value of production in the tropical rock lobster fishery also fell in 2005-06 to $123 million in real terms (figure 40) Real prices fell consistently between 2001shy02 and 2004-05 mdash from $2980 a kilogram in 2001-02 to $1880 a kilogram in 2004-05 This coincided with an appreciation of the Australian dollar against the US dollar over the same period (see figure 4) In 2005-06 the real price increased to $2050 a kilogram

fig 39 volume of production fig 40 value of production Torres Strait tropical rock lobster fishery Torres Strait tropical rock lobster fishery

tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98





The prawn fishery is managed by the PZJA under the provisions of the Commonshywealth Torres Strait Fisheries Act 1984 The major management objectives for the Torres Strait prawn fishery are

raquo to control effort in the fishery and provide for catch sharing to occur with Papua New Guinea and

raquo to achieve a level of fishing effort that is consistent with conservation and optimum use of the Torres Strait prawn resource

Under the Torres Strait Treaty Papua New Guinea is entitled to 25 per cent of Australian fishery resources in the PZJArsquos jurisdiction and Australia is likewise entitled to 25 per cent of the resources in Papua New Guinean waters within the area of the PZJA However bilateral negotiations have led to Australia forfeiting its right to operate in Papua New Guinean waters in return for a reduction in Papua New Guinshyearsquos claim over effort in Australiarsquos waters The new arrangements entitle Papua New Guinea to operate seven prawn trawlers in 2006 Historically participation has been very low Four vessels operated in the fishery from August 1988 to April 1989 and five operated from August 2001 to October 2003 (Abetz 2006b)

Torres Strait Islander fishers were entitled to operate three vessels prior to 2005 but they no longer participate in the fishery following the permanent surrender of their interests in that year (PZJA 2005)

The fishery is principally managed using an allocation of nights In 2006 the total amount of effort allocated to all fishers was 9197 nights There are also restrictions on the number of nights that a fisher must hold before they can fish For 2006 the minimum number was revised from 50 nights to 34 nights because a mandated reduction in effort would have precluded some operators from fishing in 2006 Usually fishers may not upgrade to a larger vessel without incurring a 20 per cent reduction in their entitlement of nights However this restriction was waived in 2006 to promote restructuring of the fleet

99


Seasonal and area closures and gear restrictions on mesh sizes and headrope and footrope lengths are also used (Galeano et al 2006) Vessels must also use bycatch reduction devices turtle excluder devices (TEDs) and be fitted with a vessel monitoring system

Timeline 4 presents various changes to management since the fishery was estabshylished in 1985

In July 2005 the Australian Government announced a voluntary tender process for the surrender of fishing concessions in the fishery This process was conducted to reduce the Australian commercial sectorrsquos effort by 25 per cent an amount equivalent to Papua New Guinearsquos entitlement under the Torres Strait Treaty (DFAT 2005) The tender resulted in the surrender of 2333 allocated fishing days from the fishery and the removal of sixteen commercial licences

timeline 4 Torres Strait prawn fishery

event

1985 Torres Strait Treaty ratified Torres Strait prawn separated from the northern prawn and Queensland east coast otter trawl fishery About 500 vessels are issued a separate licence to fish in the TSP fishery

1987 Limited entry introduced to those with fishing history

1989 Freeze on licence transfers implemented

June 1992 Around 110 vessels licensed to operate

1993 Each vessel is allocated a number of fishing nights based on the maximum number of nights the operator had fished in the period 1988-99 to 1991-92 with concessions for breakdowns

1994 Nights became transferable in blocks of 10 days

Feb 1999 82 vessels operating in the fishery

2001 PZJA introduces a boat replacement policy Operators who upgrade their vessels incur a 20 per cent reduction in nights

Dec 2004 70 vessels operating

2005 Voluntary tender process announced Aims to reduce Australian effort by an amount equivalent to Papua New Guinearsquos share of the resource

2006 The number of fishing days is reduced to 9197 nights including Papua New Guinearsquos share New cap on nights still does not restrict effort

Source Taylor et al (2006)

100



Aims in the management of the tropical rock lobster fishery are

raquo to conserve the stock of tropical rock lobster

raquo to maximise the opportunities for traditional inhabitants of both Australia and PNG to participate by implementing policies that include managing the fishery for tropical rock lobster as a free dive and hookah (surface air supplied) fishery and

raquo to promote the dive fisheries for tropical rock lobster in Torres Strait and in the waters near Yule Island Papua New Guinea

The fisheryrsquos strong focus on Torres Strait Islander participation has led to a freeze on issuing permits to potential nonindigenous operators A boat replacement policy also applies to existing nonindigenous fishers The fishery is managed using input controls including limiting methods of collection by hand or with a handheld tool There are also minimum size restrictions and seasonal closures for commercial fishers Bag limits apply to traditional fishing



It is expected that the fishery will move to a unitised system in 2008 under a management plan with effort units to be allocated to licence holders as a proporshytion of a total number of units available in the fishery In the 2006-07 federal budget the Australian Government provided $10 million to fund scientific research over three years to assess the viability of alternative management strategies An additional $05 million was provided over two years to provide levy relief during a period of industry restructure associated with the introduction of new manageshyment arrangements and the surrender of sixteen licences in February 2006 as part of the Australian Government process to account for Papua New Guinearsquos Torres Strait Treaty entitlements (DAFF 2006)

Torres Strait rock lobster fishery

It is expected that a quota management system in the form of ITQs will be introduced under a management plan for the 2008 fishing season covering commercial catch of rock lobster Initial allocation of quota in the non-Islander commercial fishing sector will be made following a tender process that will be conducted to fund payments for

101


biological status Torres Strait fisheries

species status

tiger prawn not overfished and not subject to overfishing endeavour prawn uncertain king prawn uncertain tropical rock lobster not overfished and unclear if overfishing is occurring Source Larcombe et al (2007)

the surrender of non-Islander commercial fishing entitlements to account for Papua New Guinearsquos Torres Strait Treaty entitlements and to reallocate resources to the Islander (Community) fishing sector The initial aim for this process announced in November 2005 was a 5050 split between the Community and non-Islander fishing sectors (once Papua New Guinearsquos share in the fishery has been accounted for) however at the PZJA meeting (26 October 2006) it was decided that the implementation of the PZJA 5050 resource allocation decision for the rock lobster fishery would be deferred and as a first step the tender process be conducted to reduce non-Islander capacity in the rock lobster fishery to the limit of funds available

biological status

Taylor et al (2006) estimated the maximum sustainable yield of tiger prawns in the Torres Strait prawn fishery using two stock recruitment models mdash a delay differshyence Ricker model and a delay difference Beverton-Holt model The former gives a maximum sustainable yield of just over 600 tonnes and the latter closer to 700 tonnes (table 25)

table 25 estimates of maximum sustainable yield (MSY) of tiger prawns Torres Strait prawn fishery

stock recruitment model

delay difference delay difference Ricker Beverton-Holt

MSY for tiger prawns tonnes 606 676 confi dence interval a tonnes 436ndash722 523ndash899

nights to catch MSY no 8 245 9 197 confi dence interval a no 5 932ndash9 823 7 116ndash12 231 a Ninety per cent confidence interval Source Taylor et al (2006)

102




ABARE regularly surveys operators in the Torres Strait prawn fishery as part of the Australian Fisheries Surveys Report program Results of the most recent survey for this fishery are presented in table 26 (Galeano et al 2006) Some vessels that operate in the Torres Strait prawn fishery also operate in the Commonwealthrsquos northern prawn fishery and Queenslandrsquos east coast otter trawl fishery

table 26 financial performance of vessels Torres Strait prawn fishery

2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)






ndash incl quota and licences $ 458 924 (11) 1 514 438 (18)



a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences Note Figures in parentheses are relative standard errors Information on how to interpret these is included in appendix A

103


Average per vessel seafood receipts fell by around 9 per cent between 2002-03 and 2003-04 from $613 000 to just over $560 000 partly because of the large appreciation of the Australian dollar over the survey period However costs did not change significantly between the two years total cash costs fell by only 4 per cent to $527 000 in 2003-04 Together labour fuel and repairs and mainteshynance costs accounted for 75 per cent of total cash costs in 2003-04 Average labour costs (usually based on fishing revenue) fell by $20 000

economic performance ndash Torres Strait prawn fishery ABARE has been surveying the Torres Strait prawn fishery since the early 1990s which has allowed for the calculation of net returns Productivity analysis has recently been conducted Hanna et al (2006) and estimates of the level of latent effort are available Currently no economic performance indicators are available for the rock lobster fishery

latent effort

Inactive effort in the Torres Strait table 27 latent effort prawn fishery appears as unfished

nights Table 27 shows that total Torres Strait prawn fishery

effort was not restricted over the period 1993 to 2004 with levels of latency between 20 per cent

nights fished a

total nights allocated latency

and 72 per cent A significant cut in allowable effort for the 1999

1993 1994

8 525 9 244

30 250 30 250

72 69

season was not sufficient to make 1995 8 158 30 250 73 the limit binding for the total fishery 1996 8 453 30 250 72 A further substantial cut was made 1997 10 097 30 250 67 in 2006 1998 10 182 30 250 66

1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25

High levels of latent effort are a sign that profits in the fishery are too low to justify fishers using as much effort as they are entitled

2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58

to At the same time the existence a Nights fished from Taylor et al (2007) b 6867 of these nights of latent effort ensures that net allocated to Australian fishers

104


economic returns can be dissipated as soon as they arise ensuring that profits are not significantly positive in the long term Figure 41 shows that net returns in the Torres Strait prawn fishery are generally low In 2003shy04 net economic returns were only $100 000 This estimate is signifishycantly lower than the net economic return in 2000-01 of $64 million Note that net economic returns tend to follow the level of latency in the fishery low net returns are associshyated with high levels of latency and vice versa (table 27)

total factor productivity

fig 41 net economic returns Torres Strait prawn fishery revenue

A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04

Total factor productivity measures the change in fishing output resulting from changes in the inputs used Any change in output not accounted for by changes in inputs is assumed to be a productivity improvement (or loss) for the fishery Hanna et al (2006) measured movements in total factor productivity in the Torres Strait prawn fishery Key results included that

raquo productivity in the fishery had increased over time and fig 42 total factor productivity index

raquo for most years when inputs Torres Strait prawn fishery

decreased outputs decreased less implying that to maintain productivity and profitability in the fishery it is important to 15

minimise inputs using them in the most efficient combination possible 10

The complete total factor productivity index is presented in figure 42 On output useinput useaverage productivity for the fishery

1993 1995 1997 1999 2001 increased over the decade from -94 -96 -98 -2000 -02

105


1992-93 to 2001-02 Productivity increased between 1992-93 and 1996-97 before falling over the years 1997-98 to 1999-2000 It rose again in 2000-01 and fell in 2001-02 The peroid of higher productivity (1996-97) corresponds with the year of lowest real prices for the fishery This may suggest that the aim of fishers is to maintain at worst a steady level of income for their fishing operations or that use of inputs is rationalised in years of low prawn prices (Hanna et al 2006)


Significant changes were introduced to the Torres Strait prawn fishery in 2006 The number of fishing nights was reduced and the Australian Government carried out a voluntary tender process in early 2006 to fund operators willing to surrender their licences so that Australiarsquos resource sharing arrangements under the Torres Strait Treaty could be met

A reduction in the number of vessels operating and in the number of fishing nights available is likely to lead to a more sustainable and profitable fishery in the long run In the past achieving high net economic returns in the fishery has been hampered by latent effort

There are currently no economic performance indicators available for the tropical rock lobster fishery While the fishery is managed with input controls at present a move to ITQ based management is anticipated in 2008 The fishery appears suitable for management with ITQs The fishery is a single species fishery with reasonable information about fish stocks and fishing costs and revenues Issues surrounding highgrading and monitoring landings would need to be considered in a move to management based on ITQs

106

5 small fisheries

Fisheries with a gross value of production of less than $4 million page

raquo Bass Strait central zone scallop fishery 110

raquo Coral Sea fishery 117

raquo Macquarie Island toothfish fishery 121

raquo Norfolk Island fishery 125

raquo north west slope trawl fishery 128

raquo skipjack fishery 132

raquo small pelagic fishery 136

raquo southern squid jig fishery 140

raquo south Tasman Rise fishery 148

raquo western deepwater trawl fishery 151

raquo western tuna and billfish fishery 154

Eleven fisheries managed by the Commonwealth were worth less than $4 million in 2005-06 and eight were worth less than $2 million These fisheries pose interesting management challenges for AFMA because many arrangements suited to large fisheries may not be warranted in small fisheries If management options are not properly assessed before they are implemented management may not be consistent with AFMArsquos objectives of maximising net economic returns and pursuing cost effectiveness

One of the key difficulties that managers face is making decisions based on very little information Managers need to consider how much information various regimes require and whether or not the cost of collecting sufficient data is likely to outweigh the potential benefits Ongoing administrative and enforcement costs also differ between management arrangements Sometimes the possible net economic returns of a fishery will not justify the simplest form of management In these cases closing the fishery may be appropriate at least from an economic efficiency perspective

107


All fisheries are small at some stage in their development and estimating whether the future net economic returns of an exploratory fishery justify three or four yearsrsquo worth of management costs can be difficult However there are some general principles that can be used as a starting point in cases where the marginal benefits and costs are difficult to quantify

raquo In the New Directions report issued by the Commonwealth of Australia (1989) and in the Australian Government policy review (DAFF 2003) ITQs are advoshycated as the lsquopreferred management approach for Commonwealth fisheries resourcesrsquo Their practicality should be examined before other management controls are considered

raquo The fishery manager should implement a management regime that can deal with increased interest in the fishery Profitability and participation is affected by many variables including changes in world fish prices exchange rates and the development of new fishing technologies Changes to management arrangements in one fishery can also cause effort to be redirected to other fisheries While input controls might appear to be protecting a fish stock when only a handful of operators are fishing significant increases in participashytion can put a fish stock at risk of collapse A conservative TAC will ensure that effort cannot be increased in the fishery without the intervention of the management authority A conservative TAC can always be increased if the need arises

raquo Managers and industry should bear in mind that management costs are likely to be higher in a fishery that is fished heavily other things being equal Harvesting relatively large shares of the stock in each period may induce high research costs to ensure sustainability and the development of new restrictions to protect the environment generally

raquo If management costs seem not to be justified based on the net economic returns being generated and it is not possible to close a fishery then manageshyment should implement a regime that ensures stock sustainability and minimises the cost of management

An ITQ system can have significant fixed costs including compliance and enforceshyment costs (particularly as AFMA intends to make the discarding of quota species illegal in 2007) and administrative costs associated with issuing quota and keeping track of transfers as well as reconciling each fisherrsquos catch to their quota Input controls avoid the relatively high fixed costs of an ITQ system However they have costs of their own including having to update controls regularly to prevent

108


effort creep On the other hand if there is an input to the fishery that is hard to substitute for another then it may form the basis for an efficient input control

Of course the Commonwealthrsquos small fisheries already have management arrangements in place and for historical reasons many have very high levels of latent effort Perhaps the only way the AFMA can demonstrate that it is pursuing the goal of maximising net economic returns in these fisheries is to actively reduce latent effort This means setting TACs that restrict effort adopting effective input controls that limit effort or reducing the number of permits issued

For a more detailed discussion of the economic issues associated with managing small fisheries see Galeano et al (2005)

109


Bass Strait central zone scallop fishery

at a glance Bass Strait central zone scallop fishery

primary effort control Output controls mdash a total allowable catch allocated as individual transferable quotas (ITQ) through a system of statutory fishing rights The TAC for 2007 is 0 tonnes for all quota species Input controls mdash seasonal and area closures and minimum size limits Boat SFRs were previously required but these were terminated on 1 February 2007

economic performance The fishery is currently closed Previous estimates of net economic returns showed that net economic returns were likely to be very low Effort and catch limits have been set well above historical catch

levels

biological status overfished

major home ports Lakes Entrance Melbourne Bridport and Eden

major offloading ports Lakes Entrance Welshpool Port Fairy and Bridport

vessels operating 15 (2004)


overview The Bass Strait central zone scallop fishery is located in the Bass Strait between Tasmania and Victoria (map 9) Despite the large area of the fishery the majority of fishing takes place to the north east of Flinders Island Scallop fishing in waters off Tasmania and Victoria out to 20 nautical miles are managed by the relevant states under Offshore Constitutional Settlements Boat and quota statutory fishing rights have been issued under the Bass Strait Central Zone Scallop Fishery Management Plan 2002 However following the Ministerrsquos Direction to AFMA of December 2005 the fishery was closed in 2006 for three years except for research surveys Prior to the fisheryrsquos closure many operators fished in both state and Commonshywealth waters for scallops and also in other fisheries for lobster and squid

The fishery was classified as a lsquotarget fisheryrsquo for the purposes of the Securing our Fishing Future business exit assistance package (see chapter 1)

110


catch composition The fisheryrsquos single target species is commercial scallop although doughboy scallop is an important bycatch Both are harvested with a towed dredge Genershyally the fishery runs from May to December but recent amendments to the fisheryrsquos management plan allow season dates to be more flexible The fishery was closed for the 1999 season following a decline in catch of 84 per cent between 1997 and 1998 Annual surveys of the stock led to areas of the fishery being progresshysively reopened although it is now closed for at least three years ending 2008

A total of 171 tonnes of scallops were landed in the fishery in 2005-06 worth $191 000 in real terms (figures 43 and 44) In volume terms this was a decrease of 50 per cent on landings in the previous year and 95 per cent lower than the catch in 1997-98 Average annual catches over the ten years to 2005-06 were much lower than at the peak in the early 1980s For example around 4000 tonnes (meat weight) were harvested from the fishery in 1983 (McLoughlin 2006)

111


fig 43 volume of production fig 44 value of production Bass Strait central zone scallop fishery Bass Strait central zone scallop fishery whole weight

30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06



The fishery is managed under the Bass Strait Central Zone Scallop Fishery Management Plan 2002 which was amended in 2004 Entries relating to economic efficiency appear in table 28 When the fishery is reopened operators

table 28 Bass Strait Central Zone Scallop Fishery Management Plan ndash excerpts relating to economic efficiency


to maximise economic efficiency developing a series of bio- that data on the current and in the exploitation of the logical economic and other potential net economic returns resources of the fishery data that can be used to of the fishery have been collected to achieve the best use of assess the fishery and analysed to enable the living resources of the AFZ using the results of research bull a periodic assessment of

to ensure fishing is conducted whether the data are consistent in an economically efficient with improvements in the and ecologically sustainable economic efficiency of the way fishery and

bull modification of institutional arrangements to allow improvements in the economic efficiency of the fishery

112


will only have to hold quota SFRs to operate in the fishery Quota SFRs were issued for doughboy scallop and commercial scallop with each operator receiving 3500 units for each permit held Prior to the Securing our Fishing Future business exit assistance package there were 152 permit packages in the fishery Twenty-two of these were surrendered under the structural adjustment package

Size restrictions and area closures are also used as fishery management tools

biological status Bass Strait central zone scallop fishery

species status notes commercial (southern) scallops overfished there is no available evidence of stock recovery and

abundance of commercial sized Bass Strait central zone scallops remains low


fi nancial performance ABARE collected financial performance information from operators in the fishery for the financial years 1995-96 to 1998-99 Results of these surveys appear in ABARE (1998) and ABARE (2001)

When ABARE surveys operators the revenues and costs associated with all fisheries in which the boat operates are collected For example at the time of the last survey many operators fished in other Commonwealth managed fisheries as well as state managed lobster and scallop fisheries Therefore receipts and costs from the Bass Strait central zone scallop fishery are difficult to identify separately in table 29

Fifty-seven vessels operated in the fishery in 1997-98 and 42 in 1998-99 Average total cash receipts rose from $216 000 in 1997-98 to over $251 000 in 1998-99 (in 2005-06 dollars) mostly because of a fourfold increase in lobster receipts and also a significant increase in squid receipts (table 29) However despite total boat cash costs increasing by over $13 000 a boat in 1998-99 and the cost of vessel depreciation rising boat business profit improved from ndash$13 900 a boat in 1997-98 to ndash$1600 a boat in 1998-99

113


table 29 financial performance of operators in 2005-06 dollars Bass Strait central zone scallop fishery

1997-98 1998-99 cash receipts shark receipts $ 6 743 (83) 8 320 (62)

lobsters receipts $ 6 278 (80) 27 569 (41)

scallops receipts $ 143 299 (9) 146 215 (12)

squid receipts $ 23 653 (39) 40 422 (16)

other fishing receipts $ 25 854 (83) 21 931 (83)




bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)

freight and marketing $ 0 (0) 0 (0)

fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)

total boat cash costs $ 217 930 (13) 231 331 (12)






capital ndash excl quota and licence $ 427 771 (13) 458 179 (13)

ndash incl quota and licence $ na na 838 023 (11)

rate of return ndash to boat capital b $ ndash16 (107) 10 (205)

ndash to full equity c $ na na 05 (204)


114


economic performance ABARE has not conducted surveys of the fishery in recent years owing to the low level of activity in the fishery Consequently economic survey data are only available for 1997-98 and 1998-99 However estimates of latent effort are available for a longer period of time

level of latency

Latency in the fishery has usually been very high In 2003 only 29 per cent of a TAC of 5050 tonnes was caught And despite only fifteen vessels having operated in the fishery in 2004 over 150 boat SFRs were issued under the new manageshyment plan Prior to the fishery being closed in 1999 only 5 per cent of available bags were landed (table 30) High levels of latent effort suggest that profits in the fishery recently have been very low Many operators in the fishery hold endorseshyments to fish in nearby state fisheries and could easily redirect their effort if the market price of scallops or the costs of fishing change

Despite the high levels of latent effort ScallopMAC (2005) reported that 38 permanent quota transfers and 17 seasonal leases took place in the period

table 30 latent effort Bass Strait central zone scallop fishery

total active total allowable

vessels catch allowable catch catch latency no bags bags tonnes tonnes

1993 ndash 39 475 418 500 2 128 na 91 1994 ndash 149 588 441 750 8 063 na 66 1995 ndash 139 265 279 000 7 711 na 50 1996 81 99 276 271 250 5 642 na 63 1997 69 105 829 271 250 5 313 na 61 1998 38 14 915 271 250 848 na 95

1999 closed 2000 fishery reopened but major beds closed data are confidential 2001 major beds remain closed data are confidential 2002 major beds remain closed data are confidential

2003 36 22 354 1 453 5 050 71 na Not applicable Sources Scott et al (1999) Perdrau et al (2004)

115

2

4

6

8


JanuaryndashNovember 2005 Given the relatively low level of activity in the fishery in 2005 (see figure 43) some of this may be related to the Securing our Fishing Future business exit assistance package that was announced in November 2005 (see chapter 1)


ABARErsquos surveys of the fishery in the late 1990s made it possible to report estishymates of net economic returns (ABARE 2001) Figure 45 shows that costs were greater than revenue in both 1997-98 and 1998-99 leading to negative net

economic returns being generated

fig 45 the Bass Strait Central Zone management costs Scallop fishery In 2005-06 the fisheryrsquos allocated

2005-06 A$m

ndash2

management costs of approximately revenue costs $033 million were well above its net economic returns gross value of production Also taking

into account fishing costs manageshyment expenses for the fishery are therefore likely to be many times higher than profits particularly when the fisheryrsquos recent closures and high level of latent effort are taken into account

1997 1998 -98 -99 overall economic performance

In every open season since 1993 latency in the Bass Strait Central Zone scallop fishery has been greater than 50 per cent In 2003 only 29 per cent of the total allowable catch was caught despite stocks having been classified as overfished for four years The fishery is particularly susceptible to effort rising and falling quickly as abundance and market conditions change because many operators also hold endorsements to fish in state waters This means that significant capital and expertise already exists which can be switched quickly from state fisheries to the Commonwealth scallop fishery Very low net economic returns are the result

116


Coral Sea fishery

at a glance Coral Sea fishery

primary effort control combination of input controls and TACs

biological status uncertain

major home ports Bundaberg Hervey Bay Devonport and Cairns

major offloading ports Townsville Cairns Bundaberg Brisbane Hervey Bay and Urangan (Queensland)

boats operating 5 (2004)

2005-06 economic indicator allocated management costs $011 million Catch and gross value of production are confidential

overview The Coral Sea fishery is located in waters off Queensland from Cape York in the north and south to the northern end of Fraser Island (map 10) Fishing is prohibited within two National Nature Reserves one each around Coringa-Herald Reef and Lihou Reef

The fishery has five sectors

raquo demersal line sector

raquo demersal trawl sector

raquo sea cucumber hand collection sector

raquo aquarium sector

raquo lobster and trochus collection sector

Demersal finfish trapping has also recently been trialled in the fishery

catch composition Catch and gross value of production figures are confidential for the Coral Sea fishery Both demersal sectors catch a range of finfish species including emperors jobfish and rockcod Sea cucumber caught by hand in the fishery include white teatfish and prickly redfish The aquarium sector targets damselfish butterfly fish angelfish wrasse anemone fish surgeonfish blennies and gobies

117




The Coral Sea Fishery Statement of Management Arrangements specifies how effort in each of the fisheryrsquos sectors is controlled The sea cucumber hand collecshytion sector is managed using TACs with one set for each of five different sea cucumber species Both this sector and the lobster and trochus collection sector have lsquomove onrsquo provisions that force operators to move at least 15 nautical miles

118


when trigger catch limits are reached Management of two sectors the demersal line sector and the demersal trawl sector stipulates that fishers must operate in the fishery for at least a particular number of days each season Entry to both these sectors is limited by permits and each has a number of gear restrictions including the use of turtle excluder devices The aquarium sector has various net size restricshytions and a trigger that is activated when a particular number of days are fished per season All vessels except those in the aquarium sector are required to use a vessel monitoring system capable of reporting the vesselrsquos position

All commercial fishing regardless of the sector is prohibited around two national nature reserves at Coringa-Herald Reef and Lihou Reef Since February 2000 permits for the various sectors have been transferable (AFMA 2004c)

In 2004 eleven entities held eighteen permits comprising

raquo nine entitlements to the demersal line sector

raquo two entitlements to the demersal trawl sector

raquo two entitlements to the sea cucumber hand collection sector

raquo two entitlements to the aquarium sector

raquo three entitlements to the lobster and trochus collection sector (AFMA 2004c)

There is limited information on the status of fish species caught in the demersal sectors of the Coral Sea fishery Coral cods have proven to be stable in most areas although localised depletions have occurred in the Great Barrier Reef (Kailola et al 1993) Preliminary results from a stock assessment of sea cucumbers indicate that numbers of higher value species such as teatfishes and prickly redfish have declined with black teatfish now considered to be overfished Minimal inforshymation exists on the status of the species in the aquarium sector although some species are known to be endemic to the area (DEH 2004)

biological status Coral Sea fishery


overall status uncertain most species have not been assessed Source Larcombe et al (2007)

119


Many species in the Coral Sea fishery face a high risk of being overfished In particular the sedentary nature of sea cucumbers and their shallow water habitat make them vulnerable to overexploitation Stocks that have been classified as overfished have previously been shown to have difficulty recovering (Benzie et al 2003) Trochus are also highly vulnerable to overfishing because of their lifecycle characteristics and accessibility Once a highly valued and widely harvested species the decline in value of this species has caused the trochus market to collapse

economic performance No economic surveys of the fishery have been conducted Constructing indicators of the economic performance of the fishery is difficult Even a measure of the level of latent effort is difficult given the multisector nature of the fishery However given the low gross value of production of the fishery it is unlikely that large expenditures to manage the fishery could be justified

120


Macquarie Island toothfish fishery

at a glance Macquarie Island toothfish fishery

primary effort control principally output controls

economic performance the TAC for the main fishing ground is regularly filled usually by a single vessel net economic returns are likely to be positive but

variable

biological status not overfished

major home ports Fremantle

major offloading ports Albany



overview The Macquarie Island toothfish fishery is located approximately 1500 kilometres south east of Tasmania (map 11) The single operator mdash based in Fremantle Western Australia mdash targets Patagonian toothfish using demersal and midwater trawling AFMArsquos management of the fishery is bound by a number of environmental constraints because Macquarie Island lies in waters adjacent to the area of the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) Low stock levels caused the fisheryrsquos main fishing ground mdash the Aurora Trough mdash to be closed from July 1999 to July 2003

catch composition Patagonian toothfish is the only target species in the fishery The fishery was effecshytively closed to commercial fishing between 1999 and 2003 except for research purposes A TAC of 354 tonnes was implemented for the Aurora Trough in 2003shy04 60 tonnes for research in 2004-05 and 255 tonnes in 2005-06 While exact catch and gross value of production data are confidential in recent years the TAC for the Aurora Trough has practically been filled each year

121


The TAC for the fisheryrsquos other ground the Macquarie Ridge sector was set at 125 tonnes in 2005-06 compared with 148 tonnes in 2004-05 and 174 tonnes in 2003-04 Very limited fishing activity occurred in all those years and conseshyquently catch was minimal



The fishery is managed through a combination of input and output controls pending the implementation of the Macquarie Island Toothfish Fishery Management Plan 2006 Currently a TAC is based on the results of surveys and tagging programs and is usually split between the two regions mdash the Aurora Trough and the Macquarie Ridge The Sub Antarctic Fisheries Management Advisory Committee (SouthMAC) which provides advice to the AFMA board suggested that provision be made for the Macquarie Ridge TAC to increase automatically if catches indicate that fish are relashytively abundant The fisheryrsquos input controls are designed to reduce catches of juvenile fish and minimise damage to the environment They include various restrictions on gear

122


table 31 Macquarie Island Toothfish Fishery Management Plan 2006 ndash exerpts relating to economic efficiency


to manage the fishery efficiently implementing long term economic efficiency to be and cost effectively for the management arrangements assessed periodically using Commonwealth to that pursue economic economic data provided maximise economic efficiency efficiency for the fishery on request by statutory fishing in the exploitation of the right holders resources of the fishery that the management measures

implemented for the fishery allow the holders of statutory fishing rights to pursue practices consistent with maximising economic efficiency in the fishery

Management of the area is partially influenced by Australiarsquos membership to CCAMLR While the Macquarie Island fishery lies outside the CCAMLR manageshyment area the Commission asks all members to act responsibly in adjacent waters

The Macquarie Island Toothfish Fishery Management Plan 2006 contains a number of references to AFMArsquos economic efficiency objective (table 31)


Following the allocation of half the SFRs through a competitive tender process the remaining SFRs have been granted in the fishery These came into force on 1 July 2007 To operate in the fishery each operator must hold at least 255 per cent of the total allocation This limits the number of vessels to a maximum of three although only one is currently operating The management plan also has overcatch provisions that allow fishers to land more fish than their quota would otherwise entitle them to by drawing down their entitlement for the following year

biological status Macquarie Island toothfish fishery

species status Patagonian toothfish not overfished in Aurora Trough

not overfished in Macquarie Ridge Source Larcombe et al (2007)

123


The Aurora Trough and Macquarie Ridge sectors are assessed separately for toothfish abundance Annual TACs are set according to a decision rule that states that 10 per cent of the current estimate of available biomass could be taken as long as that estimate is greater than 655 per cent of the July 1995 biomass level

The Aurora Trough stock was closed to commercial fishing between 1999 and 2003 following a decline in biomass to a level below which the decision rule could be applied The stock was reopened to commercial harvesting in 2003-04 when assessments indicated that there had been a significant increase in abunshydance

economic performance ABARE has not surveyed the Macquarie Island fishery Estimates of latent effort are available for the fishery Between 2003-04 and 2005-06 the fisheryrsquos TACs for the Aurora Trough sector was practically filled This suggests that the TACs set for the Aurora Trough are limiting fishing effort to a point lower than the open access equilibrium Also the fact the SFRs are in the form of individual transferable quotas means that quota can flow to the most efficient operator allowing for fishing costs to be minimised and fishing revenue maximised subject to the TAC and any envishyronmental constraints

124


Norfolk Island fishery

at a glance Norfolk Island fishery

primary effort control inshore sector mdash voluntary catch limits in December and January offshore sector mdash proposals released in 2006 for a management plan and the general operation of an offshore demersal finfish fishery two trawl permits and five line permits will be made available


major home ports and unloading ports Norfolk Island

vessels operating approximately 100 vessels registered with Norfolk Island Fishing Club mostly for recreational fishing (2004)

2005-06 economic indicators gross value of production $0 (no fishing) allocated management costs $005 million

overview Norfolk Island is located approximately 1500 kilometres east of the Australian mainland and is an Australian External Territory There are two Norfolk Island fisheries an inshore fishery catching approximately 80ndash100 tonnes each year in the Norfolk Island lsquoboxrsquo of 67 nautical miles by 40 nautical miles and an offshore exploratory fishery that last targeted blue eye trevalla orange roughy and alfonshysino from 2001 to 2003 (map 12) Exploratory permits for deepwater trawling in the offshore fishery have lapsed after conditions relating to frequency and length of fishing operations were not met

Waters around Norfolk Island outside the lsquoboxrsquo are also fished by longline operashytors from the eastern tuna and billfish fishery Management of these operators comes under the Eastern Tuna and Billfish Fishery Management Plan 2005

Approximately 100 boats are registered with the Norfolk Island Fishing Club Vessels are limited to a length of approximately 8 metres and a weight of 2ndash3 tonnes because of onshore apparatus used to move them into and out of the water

125


catch composition Many finfish and some mollusc species are caught in the inshore fishery Catches have previously been estimated at 80ndash100 tonnes An exploratory fishing program conducted in the offshore fishery indicated that orange roughy and alfonsino were not abundant enough to justify trawling Just over 80 tonnes were caught during the program from 2001 to 2003 No fishing has occurred since



AFMA has issued an interim management policy relating to the inshore sector of the Norfolk Island fishery which remains in force while the Australian Government

126


biological status Norfolk Island fishery

species status comments

inshore fishery ndash reef species offshore species ndash deepwater species

uncertain

uncertain

catch rates of principal target species may have declined from historical levels


and the Administration of Norfolk Island discuss future management arrangements (AFMA 2004a) The policy states AFMArsquos intention not to issue any permits for commercial fishing inside the Norfolk Island box and also emphasises the imporshytance of improving the collection of data


In 2006 AFMA released a paper titled Proposed Approach Timetable and Key Elements of a Management Plan for the Norfolk Island Offshore Demersal Finfi sh Fishery (AFMA 2006g) The document proposes that a management plan be implemented that would cover a period of five years and reflect the explorashytory nature of the offshore fishery Transferable statutory fishing rights would be issued by competitive tender allowing two trawlers and five line vessels to operate

economic performance No indicators of the economic performance of either the inshore or offshore fishery are available However given the low catch and gross value of production of the fisheries large expenditures on fishery management would be difficult to justify

127


north west slope trawl fishery

at a glance north west slope trawl fishery

primary effort control input controls including limited entry gear restrictions and area restrictions


number of boats 6 (2005-06)


overview The north west slope trawl fishery is located off the north west coast of Western Australia (map 13) between the 200 metre depth contour and the outer AFZ boundary Commercial fishers are excluded from areas around the Rowley Shoals (west of Broome) and the Scott and Ashmore Reefs The fishery targets scampi and is fished regularly by operators transiting to northern Australiarsquos prawn fishshyeries The fishery has been managed by input controls since 1996

catch composition The north west slope fishery is the source of approximately 69 per cent of Australshyiarsquos scampi production and this species is the fisheryrsquos predominant catch in both volume and value terms mdash over 96 per cent of the 434 tonnes caught in the fishery in 2005-06 was scampi (figure 46) Prawns and squid are important bycatch

The value of the fisheryrsquos total catch in 2005-06 was $068 million (figure 47) Fishery products are sold on both domestic and export markets the latter including the United States Spain China and Japan (AFMA 2004d)

128


fig 46 volume of production fig 47 value of production north west slope deepwater trawl fishery north west slope deepwater trawl fishery

other other 100 scampi scampi

15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129




The Western Trawl Fisheries Statement of Management Arrangements (AFMA 2004h) guides AFMArsquos management of the north west slope trawl fishery and the adjacent western deepwater trawl fishery The Western Trawl Fisheries Manageshyment Advisory Committee (WestMAC) advises AFMA on management issues relating to both fisheries

The fishery is currently managed with input controls including limited entry Trawl gear is restricted to a codend mesh size of 50 mm to discourage targeting of demersal fish Vessels are also prohibited from trawling in the Rowley Shoals Scott Reef and Ashmore Reef Marine Protected Areas

The management of the north west slope fishery is likely to change in order to meet elements of the recent Ministerrsquos Direction (AFMA 2006i) WestMAC has indicated that research is needed to determine whether output controls can be introduced to the fishery (WestMAC 2006) WestMAC and AFMA are currently considering the development of a management plan that would cover both this fishery and the western deepwater trawl fishery

Seven permits are currently on issue however any number of vessels are allowed to operate on a single permit in the fishery provided they do not operate at the same time (Caton et al 2004)

biological status north west slope trawl fishery


scampi species uncertain catch rates have declined by about 20 per cent to be at historically low levels so careful monitoring is required


130


economic performance

management costs

In 2005-06 the fisheryrsquos management costs of $55 000 were almost 8 per cent of its gross value of production Although this percentage would be higher if measured against the fisheryrsquos likely profit it is still relatively low particularly when compared against other small fisheries


The vessels that operate in the north west slope trawl fishery tend to be northern prawn trawlers that fish opportunistically during closures in the northern prawn fishery Consequently the majority of the capital in these operations is attributshyable to the northern prawn fishery In this case the capital costs associated with operating in the north west slope fishery are likely to be quite low As a result the potential net returns from the fishery may be a significant proportion of gross value of production Even so given that the gross value of production of the north west slope fishery is not generally significantly higher than $1 million a year the potenshytial for significant net returns to accrue to operators in the fishery is low

The relationship between the northern prawn fishery and the north west slope fishery is an important consideration for management Given the reduction in the number of boats operating in the northern prawn fishery there is a chance that operators will significantly increase effort in the north west slope fishery This will need to be monitored closely to ensure the sustainability of the stock

131


skipjack fishery

at a glance skipjack fishery

primary effort control input controls

biological status not overfished in the AFZ not overfished in the Indian Ocean and Central and Western Pacific Ocean

number of vessels operating eastern skipjack ndash 3 (2005-06) western skipjack ndash 3

major home ports Eden and Port Lincoln

2005-06 economic indicators allocated management costs $013 million Catch and gross value of production data are confidential

overview Skipjack tuna fishing in the AFZ is divided into eastern and western fisheries The eastern fishery extends from Cape York in Queensland down the eastern coast of Australia to the VictoriandashSouth Australia border and includes waters around Tasmania Norfolk Island and Lord Howe Island (map 14)

The western fishery includes the remainder of the AFZ except for subantarctic waters and some waters off Cape York Peninsula (map 15)

Both fisheries are managed by permits issued on an annual basis Approximately 99 per cent of fish are caught by purse seine

catch composition Skipjack tuna is the major species landed in this fishery Catch in the fishery was as high as 5000 tonnes in the late 1990s but has since fallen and data are now confidential due to the small number of operators in the fishery

132


133




The skipjack fishery was created in July 2003 by removing management of purse seining from the eastern tuna and billfish fishery and the western tuna and billfish fishery Initial holders of purse seine entitlements were granted an equivalent transshyferable permit in the new fishery There are also restrictions on net size and various bycatch limits including for yellowfin and bigeye tuna marlin and sharks

Timeline 5 identifies some major events in the history of the fishery

timeline 5 skipjack fishery

year event

1975 AFMA introduces purse seine logbooks 1979 Australia enters into the South Pacific Forum Fisheries Agency Convention a

body focused on highly migratory species such as skipjack (AFMA 2004e) 1986 First meeting of the East Coast Management Advisory Committee The committee

provides advice on the management of tuna species including skipjack 1995 Establishment of Western Tuna and Billfish Management Advisory Committee 1995 Australia signs the United Nations Fish Stocks Agreement which comes into effect

in 2001 Member countries must use responsible management regimes to manage straddling stocks of highly migratory fish species including skipjack

(AFMA 2004e) 1996 Indian Ocean Tuna Commission (IOTC) is founded 1997 Japanese longlining in the AFZ ceased Up to this time small amounts of skipjack

had been taken by Japanese longliners (AFMA 2004e) 1999 Eden fish cannery closed 2001 AFMA announces its decision to manage skipjack as two separate fisheries 2002 The Skipjack Tuna Consultative Committee formed by AFMA in December 2003 The skipjack fishery is separated from the eastern tuna and billfish fishery and

the western tuna and billfish fishery Permit holders with purse seine entitlements are granted permits in the new fishery

2004 Australia becomes a member of the Convention for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean The convention aims to guarantee the sustainability and sound management of highly migratory fish stocks

Source AFMA (2005b)

134


biological status skipjack fishery

species status

skipjack tuna not overfished and not subject to overfishing in the western ndash Australian Fishing Zone and central Pacific Ocean (WCPO) or the Indian Ocean ndash western and central Pacific Ocean not considered to be occurring ndash Indian Ocean Source Larcombe et al (2007)

economic performance There are currently nineteen permits issued in the eastern fishery and thirteen in the western fishery These are held by eighteen operators seven of whom operate in both fisheries In practice only a small number of these permits are used (table 32) because low market prices lead to low profits

table 32 vessels reporting skipjack catch by purse seine method

skipjack fishery

eastern western no no

1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135


small pelagic fishery

at a glance small pelagic fishery

primary effort control input controls including limited entry and gear restrictions output controls including TACs quotas and catch triggers

biological status blue mackerel not overfished other species uncertain

major home ports Hobart

major offloading ports Triabunna



overview The small pelagic fishery is located in Australiarsquos southern waters between northern New South Wales and south west Western Australia (map 16) The fishery is divided into four zones from A to D with only zone A subject to substantial fishing activity although interest is growing in the other zones

catch composition Historically catch and gross value of production data have been confidential because of the small number of operators in the fishery However in 2005-06 thirshyteen vessels operated so catch and gross value of production are not confidential for that year In total around 9100 tonnes was landed in the fishery at a value of around $29 million The major species landed include redbait jack mackerel and blue mackerel Catches are made using midwater trawl and purse seine methods and are used predominantly in fishmeal production

136




The management arrangements for zone A are different from those for zones B C and D While the latter are managed solely by the Australian Government zone A is managed jointly by the Australian and Tasmanian Governments The Small Pelagic Research and Assessment Team (SPRAT) and the Small Pelagic Fishery Working Group (SPFWG) provide advice to the AFMA board on management issues in the fishery

Zone A is managed using TACs with a current TAC of 32 000 tonnes Of this 25 000 tonnes is allocated to fishers in the mackerel A sector and the remainder is a competitive quota in the mackerel B sector TACs are not close to being met A 3800 tonne trigger for the Tasmanian inshore sector and a 2000 tonne trigger for the Commonwealth trawl sector also apply (DPIEWET 2004)

137


Other management controls used in these zones include input controls such as limited entry and gear restrictions Growing interest in developing the fishery caused AFMA in 2004 to take measures in the interest of the fisheryrsquos sustainable development An investment warning was issued in July 2004 whereby only previous investment and catches would be accounted for in any future allocations of access rights in the fishery A policy was also introduced in September 2004 to freeze nominations of boats to permits in the three zones mostly because of fears of a possible rapid expansion of effort (SPFWG 2004) This has since been lifted following the release of the fisheriesrsquo Independent Allocation Advisory Panel report (see IAAPSPF 2005)

The Management Policy for the Commonwealth Small Pelagic Fishery outlines the management plans for zones B C and D In particular the policy offers recommenshydations on lsquotriggerrsquo catch levels for the zones When a specified trigger catch level is reached for a species the SPRAT must meet within thirty days to recommend the most appropriate policy response that AFMA should take (AFMA 2004F) The trigger limits which prompt a meeting of SPRAT are given in table 33

table 33 trigger limits for zones B C and D small pelagic fishery

trigger catch levels

zone B zone C zone D tonnes tonnes tonnes

blue mackerel yellowtail scad jack mackerels redbait

5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000

biological status small pelagic fishery


jack mackerel uncertain dramatic declines in historic catches of jack mackerel in zone A (eastern and southern Tasmania) are of concern

blue mackerel not overfished and not subject to overfishing

yellowtail scad uncertain

redbait uncertain Source Larcombe et al (2007)

138



A management plan is currently being drafted for the fishery The management plan will allow for the granting of SFRs in the form of ITQs It is anticipated that the management plan will be determined in 2008 and SFRs allocated soon after (M Brown AFMA personal communication May 2007)

economic performance Less than five of the 75 permit packages on issue were fished against in 2004 and in 2005-06 ony thirteen vessels reported catch Further TACs in zone A are set at levels far above current catch levels If demand for small pelagic species increased or alternative current supplies were restricted this high level of latency may result in increased fishing effort and the dissipation of any above average profi ts

While competitive TACs provide managers with an assured maximum level of catch they provide a strong incentive for fishers to compete to maximise their catch This promotes overcapitalisation as fishers attempt to increase their relative fishing power The proposed move to ITQs should address this issue

139


southern squid jig fishery

at a glance southern squid fishery

primary effort control limited entry annual fishing permits input controls in the form of jig-machine gear units

economic performance the most recent estimates of net economic returns show fishery profits are low fishery has very high levels of latent effort




overview The southern squid jig fishery extends from Sandy Cape on Fraser Island to the South Australia ndash Western Australia border (map 17) It includes a small area of oceanic waters off southern Queensland and all Commonwealth waters greater than 3 nautical miles from the territorial baselines of New South Wales Victoria Tasmania and South Australia A series of arrangements under the Offshore Constishytutional Settlement (OCS) have been negotiated with the southern states on the management of squid resources in inshore waters The fishery is managed using a total allowable effort system with a trigger catch limit

catch composition Most jigging occurs off Portland Queenscliff and Lakes Entrance in Victoria although some vessels also operate off southern New South Wales eastern Tasmania and south of Kangaroo Island Catches are generally taken between January and June with the highest catch levels occurring in March and April Trawl catches of squid in the management area of the fishery are also reported throughout the year but are most common during the autumn and winter months

Operators use very bright lights to illuminate the water around their vessels Squid gather in the shaded area under the vessel and dart into the light to take barbless

140


lures that are lsquojiggedrsquo up and down on either side of the vessel The line is hauled when the jigging machines register a change in the weight on the line

Arrow (or Gouldrsquos) squid is the principal target species in the fishery It is primarily caught by targeted squid jigging operations but is also taken as byproduct by demersal trawlers targeting finfish on shelf grounds in the Commonwealth trawl and Great Australian Bight trawl sectors of the southern and eastern scalefish and shark fishery Squid caught by the jigging method is generally considered to be of a higher quality and therefore yields a higher price

There is considerable seasonal variability in terms of both the quantity and value of production in the fishery Over the past ten years the total catch has varied between 300 and 2000 tonnes (figure 48) Catches are influenced by the abunshydance of squid and the performance of other Commonwealth and state fisheries The gross value of production has also varied over this period (figure 49) reflecting changes in both catch levels and the per unit price received by fishers for squid

Very low levels of bycatch are associated with squid jigging In the southern squid jig fishery other varieties of squid constitute less than 1 per cent of the total catch Those of commercial interest that are most likely to be caught are the inshore

141


fig 48 volume of production fig 49 value of production southern squid jig fishery southern squid jig fishery

1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

southern calamari the offshore red ocean squid and the Southern Ocean arrow squid Squid jigging permits for the southern squid jig fishery also allow operashytors to retain a maximum of 100 kilograms of any incidentally caught fish with the exception of blue eye trevalla blue warehou pink ling and garfish Small amounts of blue shark barracouta garfish mirror dory and octopus have been reported as bycatch but these species constitute less than 1 per cent of the total catch for the fishery Box 5 shows squid catch in other Commonwealth fisheries

trade Generally operators in the southern squid jig fishery service domestic fig 50 value of squid and cuttlefish markets where they compete with imports and exports

imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06

large volumes of imports the value of which is many times greater than the value of the fishery For 2005shy06 ABS trade data give the value of squid and cuttlefish imports as $523 million (figure 50) Principal sources are China New Zealand and Taiwan The value of Australian cuttlefish and squid exports is very low In 2005-06 $22 million worth of cuttlefish and squid was exported mostly to China Turkey Canada and New Zealand

142


box 5 catches of squid in other Commonwealth fisheries

Squid is also caught in other Commonwealth fisheries mostly

fig 51 volume of squid production inby trawl method and particularly Commonwealth fisheries in the southern fisheries In the

other Commonwealth trawl sector the Great Australian Bight annual catch of squid has ranged trawl sector 3between 350 and 900 tonnes Commonwealth trawl sector

over the last seven years while in the Great Australian Bight trawl sector the catch has averaged around 80 tonnes

There is growing interest in squid jigging from operators in South Australiarsquos Spencer Gulf fishery so the total production of squid may 1999 2001 2003 2005 rise in the future -2000 -02 -04 -06

2

1

kt

southern squid jig



The fishery is managed by AFMA with advice from the Southern Squid Jig Fishery Management Advisory Committee (SquidMAC) The Southern Squid Jig Fishery Research Advisory Group (SquidRAG) has also been established to provide advice to AFMA and SquidMAC on assessments relating to stock environmental and economic conditions A management plan was determined for the fishery in early 2005 and all gear SFRs were allocated by January 2006 In line with AFMArsquos legislated objectives the plan outlines objectives of maximising economic efficiency and ensuring the best use of the living resources of the fishery (table 34)

Management is based on input controls in the form of jig-machine gear units Before the start of each fishing year AFMA in consultation with SquidMAC and SquidRAG determines the total allowable effort (TAE) for the fishery for that season The number of standard squid jigging machines allocated to a gear SFR is then calculated by dividing the TAE for the fishery by the total number of gear SFRs in force at the start of the fishing year

143


biological status southern squid fishery

species status notes arrow squid uncertain in the catch history of foreign jig vessels suggests that the

western Bass Strait fishery could safely harvest more than the current probably not average annual landings if fishing effort was more overfished in other widely distributed across the management area

areas Source Larcombe et al (2007)

The fishery also has a trigger catch level of 4000 tonnes (more than twice the annual catch in any year since 1995-96) The trigger level is part of an apportionment policy that shares the squid resource in southern waters between the Great Australian Bight trawl sector the Commonwealth trawl sector and southern squid jig fishery Triggering the catch level results in a review of the stock and various other steps that could lead to a TAC being introduced across the fisheries In the squid jig fishery the TAC would be applied by setting an appropriate total allowable effort (AFMA 2005a)

The Southern Squid Jig Fishery Management Plan 2005 is also supported by a Bycatch Action Plan (BAP) which contains objectives strategies and actions relating to the management of bycatch in the fishery

table 34 Southern Squid Jig Fishery Management Plan ndash excerpts relating to economic efficiency


to maximise economic efficiency developing and implementing that data about the current and in the exploitation of the a system for collecting data potential net economic returns resources of the fishery that can be used to assess the of the fishery have been collected to ensure the best use of the economic efficiency of and analysed to enable living resources of the fishery the fishery bull assessment of whether the

data are consistent with improvements in the economic efficiency of the fishery

bull institutional arrangements to be modified if necessary to allow improvements in the economic efficiency of the fishery

144


fi nancial performance Vessels operating in the table 35 estimated financial performance of southern squid jig fishery were vessels average per boat southern squid jig fishery surveyed in 2000-01 as part

2000-01 of ABARErsquos ongoing series of Australian Fisheries Surveys cash receipts Reports The seasonal nature scallop receipts $ 20 860 (43)

squid receipts $ 120 600 (10) of the fishery means that many other fishing receipts $ 108 270 (40)squid jig fishers also operate in nonfishing receipts $ 43 450 (50)other fisheries often targeting

scallops sharks and finfish total cash receipts $ 293 260 (17)

In many cases this requires cash costs vessels to be re-equipped The administration $ 4 160 (20)

activities in these other fisheries crew costs $ 96 040 (10)

therefore have a major influ- food $ 5 290 (12)

fuel $ 29 800 (13) ence on the financial perform-insurance $ 10 260 (24) ance of the boats operating in licence fees and levies $ 14 060 (24) the southern squid jig fishery repairs and maintenance $ 45 680 (24)

other costs $ 22 120 (47) For the fleet as a whole

total cash costs $ 227 410 (13) average cash receipts were estimated to be $293 300 per boat cash income $ 65 850 (57)

boat in 2000-01 (table 35) less depreciation a $ 31 210 (23)

In the same year crew costs boat business profit $ 34 640 (107)

plus interest leasing and rent $ 1 350 (45)repairs and maintenance and profit at full equity $ 35 990 (103) fuel costs accounted for 75

per cent of total average cash capital ndash excl quota and licences $ 471 820 (17) costs which were equal to ndash incl quota and licences $ 1 135 180 (21) $227 400 a vessel rate of return ndash to boat capital b 76 (104)

ndash to full equity c 32 (90)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences Note Figures in parentheses are relative standard errors A guide to interpreting these is given in appendix A Source Galeano et al (2003)

145



ABARE conducted surveys in the southern squid jig fishery in the late 1990s and early 2000s but due to the limited activity in the fishery since then economic surveys have not recently been conducted Estimates of the level of latent effort are available for the fishery

level of latency

In recent years there has been a high level of latent effort in the southern squid jig fishery (table 36) In 2003-04 83 Commonwealth entitlements were issued

for the fishery but only 37 were table 36 latent effort nominated to boats Ultimately only

southern squid fishery fourteen boats were active in the fi shery that year

active entitlements entitlements latency The existence of latent effort in the

no no fishery is a reliable indicator that 1995 5 82 94 total effort is not being restricted 1996 42 82 49 and that the fishery is operating at 1997 41 82 50 close to the open access equilibshy1998 34 82 59 rium A high level of latent effort also 1999 38 82 54

prevents a fishery from recovering 2000 29 82 65 from low net economic returns as 2000-01 26 84 69

2001-02 11 84 87 any profit opportunities that arise 2002-03 16 83 81 will be quickly dissipated through 2003-04 14 83 83 the activation of latent permits


Net economic returns for the fishery were estimated for 1997-98 1998-99 and 2000-01 in Galeano et al (2003) The real net economic returns for all estimated years are negative (figure 52)

A number of factors have contributed to low participation numbers and investment in the fishery These include relatively high set up and running costs for squid jigging operations as well as consumer preferences for southern calamari The most signifishycant factors however have been the low market price received by fishers for squid and competition from low cost imports

146


The tendency for squid abundance fig 52 net economic returns levels to fluctuate from season to southern squid jig fishery

season also influences participashytion in the jig sector The short lived and fast growing nature of the target species allows for rapid stock regeneration often resulting in large seasonal variations in stock abundance In turn the lack of a reliable supply for the domestic market has limited the development of processing facilities Currently the

3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1

majority of boats that operate in the ndash2

fishery have no onboard refrigera- 1997 1998 1999 2000 -98 -99 -2000 -01

tion or processing equipment The catch is chilled onboard but must be returned to port each morning for processing or freezing Most of the vessels are also not equipped to operate in extreme weather conditions and heavy winds and swells in Bass Strait effectively halt activity in the fishery during the winter months

management costs

In 2005-06 the fisheryrsquos allocated management costs of $023 million were approximately equal to 26 per cent of its gross value of production After taking into account fishing costs a fisheryrsquos profits can be expected to equal 10ndash25 per cent of revenue Management costs for the fishery are therefore likely to be close to or possibly even greater than profits


Based on the measures available it is highly unlikely that net economic returns in the southern squid jig fishery are being maximised In recent seasons over 80 per cent of permits were left unused implying that fishers assess the fisheryrsquos profitshyability as poor This is verified by ABARErsquos most recent economic survey of the fishery (in 2000-01) which showed that economic costs (including various non-accounting costs) were significantly greater than fishing revenue

147

fi shery economic status raquo abare research report 0719

South Tasman Rise fi shery

at a glance South Tasman Rise fi shery

primary effort control output controls in the form of ITQs allocated from a TAC shared with New Zealand

biological status overfi shed

major home ports Hobart Portland and Adelaide

vessels operating lt5 (2005-06)

major offl oading ports Hobart and Eden

2005-06 economic indicator allocated management costs $005 million Catch and gross value of production are confi dential

overview The South Tasman Rise refers to an underwater ridge that extends south from Tasmania into the Southern Ocean straddling the Australian Fishing Zone and adjacent high seas (map 18) Stocks of orange roughy and oreo dory aggregate on the Rise Australia and New Zealand manage the fi shery jointly under a Memoshyrandum of Understanding (MOU)

map 18 south Tasman Rise sector of the catch composition southern remote zone

Although the fi shery targets orange roughy oreo dory makes up a signifi shy NSW

cant proportion of the catch Since EdenVICthe fi rst TAC of 2100 tonnes was set

in 1998-99 the fi sheryrsquos total catch has declined substantially The most likely reason for recent low catches is previous overfi shing caused by TAS

Hobart excessive fi shing effort by domestic vessels as well as additional fi shing effort posed by foreign vessels fi shing illegally in the area in 1999 (DAFF 2005)

148




A commercial fishery developed quickly on the South Tasman Rise in 1997 Large catches in a relatively small area motivated Australian and New Zealand to sign an MOU in 1998 despite debate about whether catches of orange roughy taken inside and outside the AFZ were from a common stock The MOU established TACs as the primary management arrangement A new agreement was signed in 2000 allocating 75 per cent of the TAC to Australia and 25 per cent to New Zealand Australiarsquos share of the TAC is not issued as quotas to fishers A formal limited entry policy was fig 53 TAC determination adopted in May 2002 which limits South Tasman rise fishery

the number of operators to fourteen (AFMA 2002) 2005

-06

The two nations agreed to a four year harvest strategy policy ending after 2006-07 which uses a rule based on catches to determine the TAC in the following year (figure 53) Increases in the TAC are triggered 2006

-07 if the stock is found to be abundant For the TAC to remain at 400 tonnes for 2006-07 over 500 tonnes must have been caught in 2005-06 This could only be achieved within the MOU if fish were caught at an average of two tonnes per shot because this would trigger an extra 500 tonnes of total allowable catch Catches have not been larger than 300 tonnes since 2001-02

biological status South Tasman Rise fishery

catch lt500 tonnes

TAC of 400 tonnes (+500 tonnes if

stock is abundant)

TAC of 400 tonnes

(+500 tonnes if stock is abundant)

TAC of 200 tonnes

catch ge500 tonnes


orange roughy overfished and it no biomass surveys have been conducted but is unclear if overfishing declining catch rates suggest that the fishery is

is occurring overfished Source Larcombe et al (2007)

149


economic performance Economic surveys of the fishery have not been conducted The only readily available economic performance indicator for the fishery is the level of latency in effort and this indicatror suggests that fishers are free to expand their effort if they choose Therefore it is unlikely that profits are significantly positive

While competitive TACs for the fishery provide managers with an assured maximum level of catch they provide a strong incentive for fishers to compete to maximise their catch This promotes overcapitalisation as fishers attempt to increase their relative fishing power

150


western deepwater trawl fishery

at a glance western deepwater fishery

primary effort control input controls under a Statement of Management Arrangements



2005-06 economic indicators gross value of production $09 million allocated management costs $005 million Catch and gross value of production are confidential for 2005-06

overview The western deepwater trawl fishery extends along most of the coast of Western Australia covering the area of the AFZ from a longitude of 114 degrees east in the north to approximately 115 degrees east in the south (map 19) The fishery is currently managed with input controls under a common management state-

map 19 western deepwater trawl fishery ment with the adjacent north west slope trawl fishery

Broome catch composition Both volume and value of production for the fishery have fallen considershyably in the three financial years to

WESTERN AUSTRALIA 2005-06 (figures 54 and 55) The 2005-06 volume and value data for the fishery are confidential owing to the small number of operators in the

Perth fishery Bugs have been the fisheryrsquos most important catch since 2001-02 The significant reduction in catch also Albany caused value of production to fall mdash to under $10 million in 2004-05

151


fig 54 volume of production fig 55 value of production western deepwater trawl fishery western deepwater trawl fishery

tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05


current management arrangements biological status

The Western Trawl Fisheries Statement western deepwater fishery

of Management Arrangements provides species status management direction for the fishery and the adjacent north west slope fishery AFMArsquos

various demersal fish species uncertain

board obtains advice for both fisheries from Source Larcombe et al (2007)

the Western Trawl Fisheries Management Advisory Committee (WestMAC) The fishery has been managed with input controls since 1998 and eleven permits are currently on issue Many operators hold permits for other fisheries in both state and Commonwealth waters


WestMAC recommends that a joint management plan for this fishery and the north west slope fishery be finalised soon The possibility that management of the fisheries could move to a system of individual transferable quotas has also been raised (WestMAC 2006)

economic performance Economic surveys of the fishery have not been conducted Given the low level of fishing effort and catch in 2005-06 and the estimated high level of latency of permits it is unlikely that profits in the fishery are significantly positive

152


western tuna and billfish fishery

at a glance western tuna and bill fish fishery

primary effort control currently managed using input controls moving to a system of total allowable commercial catches (TACC) with shares allocated as quota

economic performance effort and catch in the fishery have shrunk dramatically in recent years leaving large amounts of latent effort net economic returns are probably low

biological status bigeye tuna not overfished yellowfin tuna not overfished broadbill swordfish not overfished

major home ports Fremantle Geraldton Albany and Port Lincoln


2005-06 economic indicators gross value of production $27 million allocated management costs

T $070 million

overview The western tuna and billfish fishery extends from Queenslandrsquos Cape York Peninshysula west to the South Australia ndash Victoria border (map 20) It also includes waters around Christmas Island and the Cocos (Keeling) Islands and a high seas fishing zone Fishing activity is concentrated in waters along the western and southern coasts particularly between Geraldton and Bunbury in Western Australia Catch from the fishery is landed at Fremantle Geraldton and Albany in Western Australia and Port Lincoln in South Australia

The Minister for Fisheries and Conservation announced a finalised resource sharing arrangement for the western tuna and billfish fishery in October 2005 The arrangement proposes that some areas of the fishery (mostly out to the 200 metre isobath) be closed to commercial fishers

The tuna and billfish species targeted in the fishery are part of Indian Ocean migratory stocks These species are managed cooperatively with other countries through regional fishery bodies such as the Indian Ocean Tuna Commission Effort in the fishery has been declining steadily in recent years

153


fig 56 volume of production western tuna and billfish fishery

other + confidential 30 yellowfin tuna

bigeye tuna 25 broadbill swordfish

20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06

fig 57 value of production western tuna and billfish fishery

30

20

other + confidential yellowfin tuna bigeye tuna broadbill swordfish

10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154


catch composition Broadbill swordfish bigeye tuna and yellowfin tuna are the predominant catch in the fishery although significant amounts of blue shark albacore tuna and longtail tuna (also known as northern bluefin tuna) are also made Catches in the fishery have been falling steadily from a peak of 3330 tonnes in 2000-01 (figure 56) to around 480 tonnes in 2005-06 an 86 per cent fall The value of the fishery fell by just under 93 per cent from 2000-01 to $27 million in 2005-06 (figure 57)



The fishery is managed under transitional arrangements according to the Western Tuna and Billfish Fishery Management Plan 2005 AFMA granted provisional quota SFRs in May 2007 but the fishery currently is managed using a permits system in which separate permits are issued for the southern and western zones The management plan has an objective related to economic efficiency (table 37)


Under the new plan quota SFRs will distribute a total allowable commercial catch (TACC) for key species yellowfin tuna broadbill swordfish bigeye tuna and striped marlin for the 2007-08 season Other species particularly albacore may come

table 37 Western Tuna and Billfish Fishery Management Plan 2005 ndash excerpts relating to economic efficiency


to maximise economic efficiency none that the economic efficiency of in the exploitation of the the fishery is assessed resources of the fishery periodically using relevant

information that any changes to the management of the fishery are assessed in relation to their likely effect on the economic efficiency of the fishery

155


biological status western tuna and bill fish fishery


yellowfin tuna not overfished but probably only moderately fished in and adjacent overfishing occurring to the fishery overfishing occurring in the broader in the broader Indian Indian Ocean

Ocean

bigeye tuna not overfished but it there is considerable uncertainty in the is unclear whether assessment but fishing mortality is thought to overfishing is occurring be below the level that produces MSY

broadbill swordfish not overfished but should be monitored closely in the fishery for overfishing occurring localised depletion associated with an increase in the broader Indian in fishing effort

Ocean Source Larcombe et al (2007)

under quota management in the future Consultation with the fisheryrsquos MAC and scientific assessment group has identified possible initial TACC levels of 5000 tonnes for yellowfin tuna 2000 tonnes for bigeye tuna and 3000 tonnes for broadbill swordfish (WTBF 2004) These could be well above the catch levels of even the peak season of 2000-01 but are likely to be reviewed during the process of developing a harvest strategy policy for the fishery Given that Australia is a member of the Indian Ocean Tuna Commission (see box 6) TACC levels would

box 6 Indian Ocean Tuna Commission

The western tuna and billfish fishery adjoins larger tuna and billfish fisheries in Indonesiarsquos Exclusive Economic Zone and is contiguous also with other fisheries elsewhere in the Indian Ocean Australia is a member of the Indian Ocean Tuna Commission (IOTC) a multilateral organisation comprising eighteen member counshytries that provides a forum for managing tuna and billfish stocks in the Indian Ocean Domestic management arrangements reflect Australiarsquos obligations to the IOTC

The IOTC vessel registration for the Indian Ocean identifies almost 1800 individual tuna vessels greater than 24 metres flying flags from 33 different countries Addishytionally there are tens of thousands of small vessels operating within the exclusive economic zones of Indian Ocean coastal states

156


also need to be within any national allocations from the IOTC It is likely that TACCs will apply to catches in the area of the fishery and on the high seas

AFMA will conduct a trial of the system used to keep track of table 38 financial performance of catches in quota managed fisheries operators 2001-02 such as the southern and eastern western tuna and billfish fishery

scalefish and shark fishery Fishers in the western tuna and billfish fishery will complete catch disposal records from 1 June 2006 (AFMA 2006b)

AFMA has indicated that the use of boat SFRs in the fishery will be reviewed in line with the Ministerrsquos Direction of November 2005

fi nancial performance ABARE last surveyed the western tuna and billfish fishery as part of the Australian Fisheries Surveys Report program in 2003 Estimates of financial and economic performshyance could only be compiled for the financial year 2001-02 because of a low response rate (Galeano et al 2004) (table 38)

Total cash receipts were estimated to average around $902 000 per boat in 2001-02 Tuna and billfish receipts were estimated to account for around 95 per cent of total cash receipts with other finfish bycatch and nonfishing receipts such as the diesel fuel rebate and insurance claims accounting for the remainder

cash receipts tuna and billfish receipts $ 855 940 (13)

other fishing receipts $ 24 810 (22)

nonfishing receipts $ 21 740 (57)

total cash receipts $ 902 490 (13)

cash costs administration $ 19 320 (14)

bait $ 74 410 (13)

crew costs $ 229 880 (13)

freight and marketing $ 42 490 (12)

fuel $ 104 520 (14)

insurance $ 17 200 (14)

interest paid $ 44 780 (26)

leasing $ 17 480 (38)

licence fees and levies $ 16 760 (13)

repairs and maintenance $ 104 460 (11)

other costs $ 97 440 (11)

total cash costs $ 768 740 (8)

boat cash income $ 133 750 (50)

less depreciation a $ 83 690 (18)

boat business profit $ 50 070 (148)

plus interest leasing and rent $ 62 250 (26)

profit at full equity $ 112 320 (57)

capital (0)

ndash excl licences $ 1 366 560 (13)

ndash incl licences $ 2 104 340 (9)

rate of return ndash to boat capital b 82 (55)

ndash at full equity c 53 (55)

a Depreciation adjusted for profit or loss on capital items sold b Excluding value of quota and licences c Including value of quota and licences Figures in parentheses are relative standard errors A guide to interpreting these is given in appendix A Source Galeano et al (2003)

157


Average per boat total cash costs were estimated at around $769 000 in 2001-02 equivalent to around 85 per cent of total cash receipts Crew costs are estimated to have accounted for the largest proportion of total cash costs at around 30 per cent or $230 000 a boat in 2001-02 It is important to note that crew costs included the estimated cost of replacing owner operator and family labour with employees to do the same work The next largest cash cost was fuel estimated at an average of nearly $105 000 per boat in 2001-02 or 14 per cent of total cash costs Average repairs and maintenance costs in 2001-02 were estimated at over $104 000 per boat again around 14 per cent of cash costs

economic performance of the fishery ABARE has only once conducted an economic survey of the fishery Estimates of the level of latency of effort are also available for the fishery

latent effort

In 2004 there were 90 permits issued for the western tuna and billfish fishery Forty-six permits allowed access to both the southern and western zones of the fishery 38 permits allowed access to the southern zone and six allowed access to the western zone only (McLoughlin 2006) There is also one permit granting access to high seas only

The number of active permits is difficult to determine because one vessel could use multiple endorsements to fish Still in 2004 only thirteen vessels fished (table 39)

table 39 effort in the fishery western tuna and billfish fishery

number of number number of average hooks active vessels of sets hooks deployed per set

1998 23 1 070 1 041 634 974 1999 42 3 792 3 528 653 931 2000 51 5 428 5 574 515 1 027 2001 43 5 492 6 173 664 1 124 2002 45 5 080 5 912 194 1 164 2003 30 3 075 3 901 649 1 269 2004 13 1 214 1 462 799 1 205 Source Lynch (2004) and Andrew Townley (AFMA) (2006)

158


This suggests that there are large amounts of latent effort in the fishery

The introduction of SFRs to the fishery is likely to make it easier for fishers to rationshyalise their fishing operations Currently fishers can only trade entire permits rather than smaller shares of the fisheryrsquos effort


Very low net returns are expected given the high levels of latent effort ABARE surveys indicate that net economic returns in the fishery in 2001-02 were only $18 million in 2005-06 dollars (table 40) Given that roughly 45 vessels operated in the fishery in that year this is very low Low net returns have been partly caused by a significant increase in fishing power as the fishery grew in the late 1990s when many new large vessels entered the fishery In 2001- table 40 net economic returns 02 the total value of capital in the fishery 2001-02 (in 2005-06 dollars)was approximately $31 million western tuna and billfish fishery

$ overall economic performance revenue 32 344 (13)

operating costs 25 329 (9)Following a significant increase in catch value of capital 31 061 (23)in the years leading up to and including net economic returns 2000-01 the fishery has since been in (excl management) 1 768 (142) decline In hindsight the rapid expan- Note Figures in parentheses are relative standard errors sion drew larger amounts of capital into A guide to interpreting these is given in appendix A

Source Galeano et al (2004) the fishery than were justified ABARE estimated the financial and economic performance of fishers in 2001-02 a season close to the fisheryrsquos peak The results showed that net economic returns in the fishery were relatively low suggesting that costs had risen as quickly as revenues

The fishery is moving to a system of total allowable catches and it is vital that this process leads to catch levels being set at an appropriate level to prevent effort from increasing rapidly again

159

6 commercial fishing and regional communities

This chapter provides an indication of how heavily various communities rely on fishing based on employment by industry data from the 2001 Australian Bureau of Statistics Census (ABS 2002) ABARE estimates and AFMA fishing logbooks and catch disposal records In the following section home ports and unloading ports are identified for many Commonwealth fisheries Employment in fishing and processing in Australia and the proportion of the workforce employed in commershycial fishing in important ports for Commonwealth fisheries is then discussed

home ports and unloading ports of Commonwealth fi sheries AFMA logbook and catch disposal records give the unloading ports of many Commonwealth fisheries Fishers also nominate a home port for their vessel Table 41 presents a summary of the main home and unloading ports of various Commonshywealth fisheries based on AFMA data except where noted otherwise Ports are included if one or more vessels listed it as a home or unloading port

160


table 41 home and unloading ports for selected Commonwealth fisheries

Coral Sea east coast deep water

home ports unloading ports home ports unloading ports

Bundaberg Bundaberg Hobart Brisbane Cairns Townsville Eden Devonport Brisbane City Hobart

Cairns

gillnet hook and trap Heard Island and McDonald Island


Lakes Entrance Port Lincoln Fremantle Mauritius San Remo Lakes Entrance Albany Adelaide Devonport Devonport Millicent San Remo Robe Hobart Port Lincoln Port Fairy Hobart Welshpool Port Macdonnell Adelaide Port Fairy Robe 28 other ports 41 other ports

southern bluefin tuna Bass Strait central zone scallop


Mooloolaba Sydney Lakes Entrance Lakes Entrance Ulladulla Ulladulla Melbourne Welshpool Sydney Nelson Bay Bridport Port Fairy Forster Mooloolaba Eden Bridport Bermagui Forster Geelong Queenscliff Fremantle Eden Launceston Coffs Harbour Hobart Queenscliff (Vic) Nelson Bay Coffs Harbour Port Lincoln Wollongong 6 other ports 6 other ports

small pelagic South Tasman Rise


Hobart Triabunna Hobart Hobart Portland Eden Adelaide

continued

161


table 41 home and unloading ports for selected Commonwealth fisheries continued

eastern tuna and billfish western tuna and billfish


Mooloolaba na Port Lincoln Fremantle Ulladulla Fremantle Port Lincoln Sydney Geraldton Geraldton Cairns Lakes Entrance Albany Eden Bermagui Hobart Fremantle ForsterndashTuncurry 19 other ports

Macquarie Island Commonwealth trawl sector


Fremantle Albany Lakes Entrance Lakes Entrance Eden Eden Ulladulla Portland Portland Hobart Sydney Ulladulla Hobart Bermagui Bermagui Sydney Wollongong Triabunna Millicent Welshpool 12 other ports 16 other ports

Victorian inshore trawl northern prawn

home ports unloading ports home ports a unloading ports

Lakes Entrance Eden Fremantle na Eden Lakes Entrance Cairns Alberton Welshpool Brisbane San Remo Alberton Darwin

Geraldton Townsville 8 other ports

Torres Strait prawn

home ports unloading ports

Cairns a Northern prawn home port information from Brown et al (2002) na Not available

162


employment in commercial fishing seafood processing and seafood wholesaling ABS census data from 2001 (ABS 2002) show that commercial fishing directly employs nearly 11 900 people in Australia (table 42) out of a total Australian workforce of around 83 million This gives the commercial fishing industry a rank of 54th among other industries in terms of total employment A further 7750 people work in wholesaling and processing of fisheries products mostly in fish wholeshysaling

Several points should be noted about the ABS employment data First employment in commercial fishing covers not only Commonwealth fishing employment but also state fisheries and aquaculture Second employment data do not give a strong indication of where the incomes of those employed in commercial fishing are spent

It should also be noted that the Fisheries Research and Development Corporation (FRDC) has stated that lsquodata collected by the Australian Bureau of Statistics is not disaggregated in sufficient detail to be useful and tends to underrecord employees by allocating them to other industries such as transport and generalised processingrsquo (FRDC 2004) While it may be the case that those involved in transporting seafood are not strictly engaged in the commercial fishing industry some of the categories in table 42 are likely to overlap considerably

To provide additional information on employment ABARE has collected available data from its fishery surveys program and from the states and territories To obtain information on employment in the seafood processing sector ABARE carried out a survey of the sector in January 2005 Informashytion from all these sources is presented

table 42 ABS estimates of employment in the Australian fishing industry August 2001

no of people commercial fishing marine fishing 1 611 rock lobster fishing 1 459 prawn fishing 1 040 fi nfi sh fi shing 288 squid jigging 12 line fishing 91 aquaculture 4 221 commercial fishing undefined 3 152

total commercial fishing 11 874

wholesaling and processing fish wholesaling 5 540 seafood processing 2 213

total wholesaling and processing 7 753

total 19 627 in table 43 Note State employment totals can be found in ABARE (2007)

163


table 43 ABARE estimates of employment in Australian fishing industries 2006

total minimum

Crsquowlth NSW Vic Qld SA WA Tas NT employment commercial fishing wildcatch 2 035 na na 2 868 2 101 2 389 3 892 482 13 767 aquaculture na na 286 584 1 614 na 676 297 3 457

minimum employment 2 035 na 286 3 452 3 715 2 389 4 568 779 17 224

processing full time na 125 82 113 165 125 176 na 786 part time na 176 210 302 174 627 419 na 1 908

minimum employment na 301 292 415 339 752 595 na 2 694 total minimum employment 2 035 301 578 3 867 4 054 3 141 5 163 779 19 918 na Not available

Differences in definitions of employment between the states and sectors mean that the total number of employees cannot be estimated (see ABARE 2007 for more details) However estimates of the minimum number of employees can be derived ABARE estimates that employment in commercial fishing is over 17 000 people (compared with more than 11 800 people in table 42) Estimates of the workforce in the seafood processing industry across Australia are also different ABARE estishymates nearly 2700 people while the ABS Census estimates a total of 2213

employment in ports servicing Commonwealth fisheries The communities surrounding ports that service Commonwealth fisheries can be vulnerable to changes in the profitability of fishing caused by movements in fuel and fish prices among other factors Of the communities identified in table 41 some rely more heavily than others on commercial fishing and are therefore more vulnerable to these changes

Table 44 gives the proportion of the workforce in each town or city that is employed in commercial fishing according to the 2001 ABS Census (ABS 2002) Communities are presented in state or territory order and then in descending order of the proportion of the workforce engaged in commercial fishing It also shows which fisheries these ports service

164


table 44 employment in and Commonwealth fisheries serviced by important fishing locations

employment

proportion in commercial commercial location a fi shing other fi shing fi sheries serviced

New South Wales ForsterndashTuncurry 160 8 083 20 ETB fishery and SBT fishery Bermagui 184 10 085 18 CT sector ETB fishery and SBT

fishery Eden 184 10 085 18 CT sector and ETB fishery Nelson Bay 159 17 810 09 ETB fishery and SBT fishery Ulladulla 60 7 813 08 CT sector ETB fishery and SBT

fishery Coffs Harbour 52 18 352 03 ETB fishery and SBT fishery Wollongong 53 81 113 01 CT sector and ETB fishery Sydney 277 1 673 591 00 CT sector ETB fishery and SBT

fishery

Northern Territory Darwin 168 45 388 04 NP fishery

Queensland Mooloolaba 27 3 537 08 ETB fishery and SBT fishery Bundaberg 89 20 269 04 CS fishery and ETB fishery Cairns 162 47 722 03 ETB fishery and NP fishery Townsville 52 49 271 01 NP fishery Brisbane 94 496 643 00 ETB fishery and NP fishery

South Australia Port Lincoln 580 5 768 101 CT sector GAB trawl sector

GHT sector SBT fishery and WTB fishery

Robe 53 613 86 GHT sector Port Macdonnell 71 2 174 33 GHT sector Millicent 63 3 283 19 CT sector and GHT sector Adelaide 153 439 306 00 CT sector GABT sector and

GHT sector

Tasmania Triabunna 91 1 277 71 GHT sector Bridport 21 2 760 08 BSCZ scallop and GHT sector Hobart 373 77 180 05 CT sector ECDWT sector ETB

fishery GABT sector GHT sector and STR fishery

Devonport 21 9 568 02 GHT sector Launceston 51 38 167 01 BSCZ scallop

165



employment


Victoria Welshpool 30 2 000 15 GHT sector Portland 52 4 424 12 CT sector and GHT sector Lakes Entrance 97 9 098 11 BSCZ scallop CT sector GHT

sector and VIT sector Port Fairy 24 3 168 08 GHT sector Alberton 12 1 941 06 VIT sector San Remo 26 4 738 05 GHT sector Queenscliff 3 1 216 02 CT sector

Western Australia Geraldton 222 10 848 20 NP fishery and WTB fishery Albany 45 10 074 04 WTB fishery HIMI fishery MI

fishery Fremantle 292 91 231 03 ETB fishery HIMI fishery NP

fishery SBT fishery and WTB fishery

Australia 11 874 8 298 606 01

BSCZ scallop Bass Strait Central Zone scallop fishery CS fishery Coral Sea fishery CT sector Commonwealth trawl sector of the southern and eastern scalefish and shark fishery ECDWT sector east coast deepwater trawl sector of the southern and eastern scalefish and shark fishery ETB fishery eastern tuna and billfish fishery GABT sector Great Australian Bight trawl sector of the southern and eastern scalefish and shark fishery GHT sector gillnet hook and trap sector of the southern and eastern scalefish and shark fishery HIMI fishery Heard Island and McDonald Island fishery MI fishery Macquarie Island fishery NP fishery northern prawn fishery SBT fishery southern bluefin tuna fishery STR fishery south Tasman Rise fishery VIT sector Victoria inshore trawl sector of the Commonwealth trawl sector WTB fishery western tuna and billfish fishery a Some small ports have been aggregated to the nearest town

166


In figure 58 a series of charts show the top five ranked industries in terms of employment in each of the communities given in table 44 along with the level of employment and associated industry rank of commercial fishing if this industry lies outside the top five industries in the community

Of course there are likely to be other jobs in affiliated industries such as transport food processing mechanical services and retailing that are also affected by the profitability of commercial fishers This will be more or less the case in all commushynities so it does not detract from using commercial fishing as a simple proxy for reliance when comparing one community to another

Among the regional communities used as ports for Commonwealth fisheries Port Lincoln in South Australia relies most heavily on commercial fishing in terms of employment Over 10 per cent of the workforce is employed in the commercial fishing industry (table 44) It is the home port or unloading port for many vessels in various Commonwealth fisheries and is also where southern bluefin tuna is farmed Figure 58 shows that other major industries providing employment in Port Lincoln are education and personal and household goods retailing Robe in South Australia and Triabunna in Tasmania are also relatively reliant on commershycial fishing for employment Figure 58 shows that agriculture is also an important industry in terms of employment in both these communities

167


fig 58 employment by community

industry and rank Australia

business services education health services personal and household good retailing food retailing

commercial fishing total workforce in Australia = 8 298 606 0 200 400 600 800

lsquo000 employed persons

industry and rank Adelaide South Australia

commercial fishing

health services business services education personal and household good retailing food retailing

total workforce in Adelaide = 439 306 0 10 20 30 40 lsquo000 employed persons

industry and rank Albany Western Australia

commercial fishing

education personal and household good retailing

health services food retailing

business services

total workforce in Albany = 10 074 0 300 600 900 employed persons

industry and rank Alberton Victoria agriculture education health services food retailing personal and household good retailing commercial fishing

total workforce in Alberton = 1941 0 100 200 300 400 500 600 employed persons

168



industry and rank Bermagui New South Wales

accommodation cafes and restaurants food retailing agriculture health services education commercial fishing

0 400 600 800 1000 1200 total workforce in Bermagui = 10 085 200 employed persons

industry and rank Bridport Tasmania agriculture wood and paper products education road transport food beverages and tabacco

commercial fishing

0 200 300 400 500 600total workforce in Bridport = 2760 100 employed persons

industry and rank Brisbane Queensland

personal and household good retailing

government administration

fishing

business services education

health services

total workforce in Brisbane = 496 643 0 20 40 60 80 lsquo000 employed persons

industry and rank Bundaberg Queensland

commercial fishing

education health services personal and household good retailing food retailing agriculture

total workforce in Bundaberg = 20 269 0 500 1000 1500 2000 employed persons

169



industry and rank Cairns Queensland

accommodation cafes and restaurants personal and household good retailing business services education health services

commercial fishing

total workforce in Cairns = 47 722 0 1200 2000 3000 4000 employed persons

5000 6000

industry and rank

personal and household good retailing health services

accommodation cafes and restaurants

food retailing education

commercial fishing

total workforce in Coffs Harbour = 18 352

Coffs Harbour New South Wales

800 1200 1600 0 employed persons

400 2000

industry and rank

health services

business services

defence government administration

education

commercial fishing

total workforce in Darwin = 45 388

Darwin Northern Territory

20000 employed persons

1000 3000 4000

industry and rank personal and household good retailing

education food retailing

accommodation cafes and restaurants business services

commercial fishing

total workforce in Devonport = 9568

Devonport Tasmania


400200 800 1000

170



industry and rank Eden New South Wales

accommodation cafes and restaurants food retailing agriculture health services education

commercial fishing

total workforce in Eden = 10 085 400 600 800 1000 0 200 1200 employed persons

industry and rank ForsterndashTuncurry New South Wales accommodation cafes and restaurants personal and household good retailing

food retailing health services

education commercial fishing

total workforce in ForsterndashTuncurry = 8083 400 600 8000 200 1000 employed persons

industry and rank Freemantle Western Australia education

health services personal and household good retailing

food retailing business services

commercial fishing

total workforce in Freemantle = 91 231 4000 60000 2000 8000 employed persons

industry and rank Geelong Victoria health services


business services food retailing

commercial fishing

total workforce in Geelong = 60 739 3000 4000 50000 20001000 6000 employed persons

171



industry and rank Geraldton Western Australia

education health services personal and household good retailing food retailing business services

commercial fishing

total workforce in Geraldton = 10 848 0 200 400 600 800 1000 employed persons

industry and rank Hobart Tasmania

4000 6000 80000 2000

education business services

health services

government administration personal and household good retailing

commercial fishing

total workforce in Hobart = 77 180 employed persons

industry and rank Lakes Entrance Victoria

800600 1000 0 400200

food retailing

health services

education accommodation cafes and restaurants


commercial fishing

total workforce in Lakes Entrance = 9098 employed persons

industry and rank Launceston Tasmania health services education personal and household good retailing business services

commercial fishing food retailing

total workforce in Launceston = 38 167 0 1000 2000 3000 4000 employed persons

172



industry and rank Millicent South Australia

wood and paper products agriculture education health services food retailing

commercial fishing

total workforce in Millicent = 3283 0 100 200 300 400 500 600 700 800 employed persons

industry and rank Mooloolaba Queensland accommodation cafes and restaurants business services food retailing personal and household good retailing property services

commercial fishing

total workforce in Maloolaba = 3537 0 200 600 800 employed persons

400 1000

industry and rank


defence

accommodation cafes and restaurants food retailing

metal products

commercial fishing

total workforce in Nelson Bay = 17 810

Nelson Bay New South Wales

1600 1200 0 employed persons

800400 2000

industry and rank agriculture

accommodation cafes and restaurants food beverage and tobacco


commercial fishing

total workforce in Point Fairy = 3168

Point Fairy Victoria

600 8000 employed persons

400200 1000 1200

173



industry and rank Port Lincoln South Australia

commercial fishing

education personal and household good retailing health services food retailing

business services

total workforce in Port Lincoln = 5768 0 100 200 300 400 500 600 employed persons

industry and rank Port Macdonnell South Australia

600 8000 200 400

forestry and logging wood and paper products

agriculture


food beverages and tobacco

total workforce in Port Macdonnell = 2174 employed persons

industry and rank Portland Victoria

0


metal products

education health services

food retailing

commercial fishing

total workforce in Portland = 4424 600 750150 300 450 employed persons

industry and rank Queenscliff Victoria

personal and household good retailing commercial fishing

accommodation cafes and restaurants health services business services food retailing

total workforce in Queenscliff 1216 0 50 100 150 200 250 300 employed persons

174



industry and rank Robe South Australia

agriculture accommodation cafes and restaurants commercial fishing

food beverages and tobacco food retailing


total workforce in Robe = 613 0 50 100 150 200 employed persons

industry and rank San Remo Victoria

400 500 6000 100 200 300

health services education

agriculture

accommodation cafes and restaurants personal and household good retailing

commercial fishing

total workforce in San Remo = 4738 employed persons

industry and rank Sydney New South Wales

200150 2500 100 50


business services



commercial fishing

total workforce in Sydney = 1 673 591 lsquo000 employed persons

industry and rank Townsville Queensland


defence education health services business services

total workforce in Townsville = 49 271 0 1000 2000 3000 4000 5000 employed persons

175



industry and rank Triabunna Tasmania

accommodation cafes and restaurants agriculture commercial fishing


wood and paper products

total workforce in Triabunna = 1277 0 50 100 150 200 250 300 employed persons

industry and rank Ulladulla New South Wales

food retailing

education


personal and household good retailing business services

commercial fishing

total workforce in Ulladulla = 7813 0 200 400 600 800 employed persons

1000 1200

industry and rank Welshpool Victoria

600300 400 500 7000 200100

food retailing

agriculture

accommodation cafes and restaurants health services

education

commercial fishing

total workforce in Welshpool = 2000 employed persons

industry and rank Wollongong New South Wales


metal products education health services business services

total workforce in Wollongong = 81 113 0 2000 4000 6000 8000 employed persons

176

A appendix

estimating the economic performance of Commonwealthmanaged fisheries

ABARE fishery surveys As outlined in the Fisheries Management Act 1991 an objective of the Australian Fisheries Management Authority is to maximise the economic returns to the Australian community from the management of Australian fisheries As part of monishytoring the performance of AFMA against this management objective each year ABARE conducts economic surveys of selected Commonwealth fisheries The data obtained from these surveys are used to calculate performance indicators such as net returns which can then used to assess whether a fishery is being managed effi ciently

Net returns are defined as the long run profits from a fishery after all costs have been met These costs include fuel crew costs repairs depreciation the opportushynity cost of capital and the opportunity cost of family and owner labour Although net returns do not provide an indication of the potential returns available from a fishery in the long run a time series of net returns may indicate the direction in which returns in a fishery are heading For instance a fishery in which estimated net returns are regularly close to zero or negative is probably not being managed effectively A positive trend however may suggest that a fishery is approaching a point of maximum economic yield (MEY) mdash the level of effort at which the profits in a fishery are maximised

177


The net returns of a fishery can be calculated by summing the net returns of each boat in the fishery The net return of each boat can be defined as

NR = R ndash [OC + (d+r) K] ndash M

NR net returns

R total cash receipts attributable to the fishery excluding any receipts from leasing licences or quota

OC total operating cash costs less interest paid less expenditure on leasing licences or quota less licence fees and levies

K value of capital associated with vessel (depreciated replacement value)

d depreciation rate for vessel

r real interest rate

M costs of managing the fishery

Operating costs include day to day expenses such as fuel crew costs repairs administration gear etc The value of these expenses is usually obtained directly from fishersrsquo accounts

Note that both operating costs and receipts exclude any income or costs from leasing in or leasing out quota and licences These are excluded because the amount that fishers pay or accept for leasing quota and licences represents the expected future profits that can be generated from the quota or licence Therefore if leasing were included as revenue or costs double counting would occur and estimates of net returns would be incorrect

Depreciation takes into account the decline in the value of capital over time through wear and tear and obsolescence Depreciation expense is not consistently identifiable in fishersrsquo accounts so ABARE calculates the depreciation of boats based on a capital inventory list collected during the surveys

The opportunity cost of owner and family labour is estimated during interviews Often owners and their families are involved in the operation of a boat either as skippers and crew or onshore as account and shore managers While some will be paid the market value for their labour some will not be paid at all and others paid very high amounts through lsquodirectorrsquos feesrsquo or lsquomanagement feesrsquo ABARE

178


survey officers ask survey respondents what is the market value of each owner and family labour and this amount is then considered as a cost

The opportunity cost of capital is the return that would have been earned if the capital was invested elsewhere rather than invested in fishing capital

relative standard errors

ABARE surveys a fraction of the vessels in a fishery to estimate financial performshyance Estimates derived from these vessels are likely to be different from those that would have been obtained if information had been collected from a census of all vessels How closely the survey results represent the population is influenced by the number of vessels in the sample the variability of vessels in the population and most importantly the design of the survey and the estimation procedures used

To give a guide to the reliability of the survey estimates measures of sampling variation have been calculated These measures expressed as percentages of the survey estimates and termed lsquorelative standard errorsrsquo are given next to each estimate in parentheses In general the smaller the relative standard error the more reliable the estimate

use of relative standard errors

These relative standard errors can be used to calculate lsquoconfidence intervalsrsquo for the survey estimate First calculate the standard error by multiplying the relashytive standard error by the survey estimate and dividing by 100 For example if average total cash receipts are estimated to be $100 000 with a relative standard error of 6 per cent the standard error for this estimate is $6000

There is roughly a two in three chance that the lsquocensus valuersquo (the value that would have been obtained if all boats in the target population had been surveyed) is within one standard error of the survey estimate There is roughly a nineteen in twenty chance that the census value is within two standard errors of the survey estishymates Thus in this example there is approximately a two in three chance that the census value is between $94 000 and $106 000 and approximately a nineteen in twenty chance that the census value is between $88 000 and $112 000

179


comparing estimates

When comparing estimates across groups or years it is important to recognise that the differences are also subject to sampling error As a rule of thumb a conservashytive estimate of the standard error of the difference can be constructed by adding the squares of the estimated standard errors of the component estimates and then taking the square root of the result

For example suppose the estimates of total cash receipts were $100 000 in one year and $125 000 in the previous year mdash a difference of $25 000 mdash and the relative standard error is given as 6 per cent for each estimate The standard error of the difference can be estimated as

(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605

so the relative standard error of the difference is

($9605$25 000) x 100 = 38

It should be noted that there may be changes in the population of a fishery from one year to the next If these population changes are substantial differences in estimates may be caused more by the changes in population than by changes in the variables themselves

180

B appendix

abbreviations

ABARE Australian Bureau of Agricultural and Resource Economics

ABS Australian Bureau of Statistics

AFMA Australian Fisheries Management Authority

AFZ Australian Fishing Zone (see glossary)

BAP Bycatch Action Plan

BRS Bureau of Rural Sciences

CCAMLR Commission for the Conservation of Antarctic Marine Living Resources

CCSBT Commission for the Conservation of Southern Bluefin Tuna

CPUE catch per unit of effort

ECDWT east coast deepwater trawl

EEZ exclusive economic zone (see glossary)

FRDC Fisheries Research and Development Corporation

FRRF Fisheries Research and Resources Fund

GAB Great Australian Bight

GHT gillnet hook and trap

GVP gross value of production

IOTC Indian Ocean Tuna Commission

ITE individual transferable effort (see glossary)

ITQ individual transferable quota (see glossary)

MAC management advisory committee

MEY maximum economic yield (see glossary)

MOU Memorandum of Understanding

MSY maximum sustainable yield (see glossary)

NORMAC northern prawn fishery management advisory committee

OCS Offshore Constitutional Settlement

181


PZJA Protected Zone Joint Authority

RFMO regional fishery management organisation

SESS fishery southern and eastern scalefish and shark fishery

SouthMAC Sub Antarctic Fisheries Management Advisory Committee

SPFWG Small Pelagics Fishery Working Group

SPRAT Small Pelagics Research and Assessment Team

SquidMAC Southern Squid Jig Fishery Management Advisory Committee

SquidRAG Southern Squid Jig Fishery Research Assessment Group

TAC total allowable catch (see glossary)

TACC total allowable commercial catch (see glossary)

TAE total allowable effort (see glossary)

TED turtle excluder device

VIT Victorian inshore trawl

WCPO Western and Central Pacific Ocean

WestMAC Western Trawl Fisheries Management Advisory Committee

182


glossary

allocated Costs of managing a fishery that are directly related to that fishery management Excludes overheads such as licensing research enforcement costs and surveillance Allocated management costs have recoverable

(industry funded) and nonrecoverable (Australian Government funded) components

Australian The area of sea from the territorial coast out to 200 nautical miles Fishing Zone offshore This area also includes the water surrounding the offshore (AFZ) territories of the Cocos Christmas Norfolk Macquarie Heard and

McDonald Islands Foreign nations can not legally fish within these waters without permission from the Australian Government The AFZ and the EEZ differ in that while the AFZ relates only to the use or protection of fisheries the EEZ relates to all types of resources in the zone (eg fish oil gas minerals)

autonomous Structural adjustment is an ongoing process in all fisheries As adjustment technologies and prices change the characteristics of the fishing fleet

required to maximise the net value from the fishery will also change The primary role for government in structural adjustment is to establish a management regime that removes any incentives that lead to overshycapacity and that facilitates autonomous adjustment to occur in response to changing economic and biological conditions

beach price A price per unit of fish that excludes payments for freight marketing and processing as would be paid at the point of landing Usually expressed as the weight of the fish when whole

economic A fishery is economically efficient when fishery level efficiency and effi ciency vessel level efficiency are being achieved and management costs are as

low as they can be while still providing the necessary level of manageshyment Fishery level and vessel level efficiency mean that effort is being restricted to the point where the difference between fishing revenue and cost is greatest and fishers are applying that level of effort at least

cost

183


exclusive As established under the United Nations Convention on the Law of the economic Sea (1982) Australiarsquos exclusive economic zone (EEZ) extends 200 zone (EEZ) nautical miles from the baselines from which the breadth of the territorial

sea is measured Within this zone Australia has the exclusive rights to explore exploit conserve and manage all living and nonliving marine resources See also the Australian fishing zone (AFZ)

effort Effort is a measure of the resources used to harvest a fisheryrsquos stocks The measure of effort appropriate for a fishery depends on the methods used and the management arrangements Common measures include the number of vessels the number of hooks set and the number of fishing days or nights

effort creep Effort creep refers to the tendency for fishing effort to increase beyond the levels targeted by an input control It is caused by innovative fishers adapting their fishing techniques to legally circumvent controls often by using an unregulated input in place of a regulated input Effort creep compels managers to tighten controls regularly leading to some gear being made redundant

farmgate price See beach price

Fisheries One of two main pieces of legislation (along with the Fisheries Management Administration Act 1991) that details AFMArsquos responsibilities and Act 1991 powers

fishery level Occurs when total catch or effort is restricted to the level that efficiency maximises the net economic returns created by the fishery over time

accounting for the impact of current catches on future stocks catches and fishing costs

gross value of Gross value of production is found by multiplying the volume of production catch by the lsquobeach pricersquo per unit In the case of a multispecies (GVP) fishery the fisheryrsquos gross value of production is the sum of the gross

value of production of each species Gross value of production is not a good indicator of economic performance because it does not

consider costs

highgrading A type of discarding motivated by an output control system Depending on the costs of fishing and price differences between large and small fish of the same species fishers may have an incentive to discard small or relatively low-value catch so that it does not count against their quota They then hope to fill the quota with a higher value fish in the future

184


individual Shares of a total allowable catch that are allocated to individuals transferable as property rights They can be traded permanently or temporarily quota (ITQ)

individual Shares of a total allowable effort that are allocated to individuals transferable They can be traded permanently or temporarily Analogous to effort (ITE) individual transferable quotas in a fishery managed with a total unit allowable catch

input controls Input controls are regulatory measures that seek to restrict fishing effort by limiting the use of capital labour and materials used in fishing They may included licences seasonal closures and limits on gear and

boats

latent effort Latent effort exists where rights that could be used in a fishery are left idle Depending on how a fishery is managed latent effort might appear as unused boat SFRs gear SFRs quota SFRs permits or nights It is an important and very low cost indicator of fishersrsquo views about the profitability of a fishery High levels of latent effort suggest that low profits in the fishery do not justify fishing It is likely that fisheries in which latent effort exists are close to the open access equilibrium

Apart from being an indicator of efficiency latent effort can also be detrimental to the fish stock and to any chances the fishery may have of being profitable in the future For example a significant increase in the market price of a fisheryrsquos product is likely to entice inactive effort into the fishery If enough inactive effort is triggered the fish stock could be jeopardised At the very least profits are likely to be dissipated as soon as they arise

longline (pelagic)

Pelagic longlines are set near the surface of the water Longlines can be many kilometres long and carry thousands of hooks Baited hooks are attached to the longline by short lines called snoods that hang off the mainline Pelagic longlines are not anchored and are set to drift near the surface of the ocean with a radio beacon attached so that the vessel can track them to haul in the catch Pelagic longlines are usually used to catch large tuna and billfish species

maximum economic yield (MEY)

The level of harvest that results in the largest difference between total revenue and total costs in a period making allowance forthe impact of current catches on future profits

MEY is a lower level of harvest than MSY so the fish stock is lsquothickerrsquo It is also the level of harvest associated with the optimum amount of

185


inputs being directed to fishing At higher levels of harvest too much fuel labour and capital are being redirected from more profitable uses elsewhere in the economy MEY is influenced by the biology of the fish stock fish prices and fishing costs See Rose et al (2004) for a more detailed discussion

maximum The maximum sustainable yield (MSY) refers to the largest harvest sustainable of a stock that can be made sustainably each period Greater yield (MSY) or less fishing effort will reduce the yield from a fishery in the long run

Like MEY environmental variability and imperfect assessments of fishery stocks cause this to be a difficult point to estimate

minor line Minor lines are short lines and only have a small number of hooks maybe even just one They include handlines and the rods and reels of the types that are usually used by recreational fishermen Trolling is when lures or baits are dragged through the water by a slow moving boat Poling is another type of minor line fishing Poles with a bait or lure attached are trolled through the water and when a fish is hooked it is flicked into the boat rather than being reeled in

net economic A fisheryrsquos net economic return over a particular period is equal to returns fishing revenue less fishing costs Fishing costs include the usual

accounting costs of fuel labour and repairs and maintenance as well as various economic costs such as the opportunity costs of labour and capital These measure how much these resources would have been compensated had they been operating in the next best alternative

The concept of net economic return is very closely related to economic efficiency Only in an economically efficient fishery will net economic

returns be maximised

open access An open access fishery is one that lacks viable restrictions on either catch or access or both Such a fishery is liable to suffer the lsquotragedy of the commonsrsquo Under open access a fishery operates with a harvest and effort that results in total revenue equalling costs with no economic profits being generated The fishing effort employed at this point exceeds that which would achieve MEY

opportunity Opportunity cost refers to the compensation a resource forgoes by cost being employed in its present use and not in the next best alternative

For example the opportunity cost incurred by the skipper of a fishing vessel is the amount he or she would have received in some alternative occupation The opportunity cost of owning a fishing vessel might be the interest that could be earned if the vessel was sold and the capital

invested elsewhere

186


These costs are not usually reflected in a firmrsquos financial accounts but are very important costs nonetheless

output controls Output controls restrict the total volume of a particular species or species group that can be landed over a given time period In Commonwealth fisheries they take the form of total allowable

catches

overfi shed A stock is overfished when its biomass has fallen below a critical reference point

overfi shing Biologicalgrowth overfishing mdash occurs when too many small fish are taken and therefore too few grow to a size that provides the optimal yield from the fishery Recruitment overfishing mdash occurs when excessive fishing effort or catch reduces recruitment to the extent that the stock biomass falls below the predefined limit reference point (an indicator of the level of fishing mdash or stock size mdash used as a benchmark for assessment)

real terms real prices

Real prices are historical or future prices adjusted to reflect changes to the purchasing power of money (most commonly measured by the consumer price index) Such prices may also be expressed as being in real terms Commonly a year is indicated alongside a real price This indicates the reference year against which prices in other years are compared Prices quoted in real terms allow for meaningful comparison over time

seines Seine nets are usually long flat nets like a fence that are used to encircle a school of fish with the boat driving around the fish in a circle Purse seine and Danish seine nets are used in

Commonwealth fisheries

statutory fishing Defines access rights to a fishery An SFR can take many forms right (SFR) including the right to access a particular fishery or area of a

fishery the right to take a particular quantity of a particular type of fish or the right to use a particular type or quantity of fishing equip

ment

total allowable An upper limit on the amount of catch that can be applied in a fishery catch (TAC) Where resource sharing arrangements are in place between

commercial and recreational fishers the term total allowable commercial catch (TACC) will apply

187


total allowable see total allowable catch (TAC) commercial catch (TACC)

total allowable An upper limit on the amount of effort that can be applied in the effort (TAE) fi shery

tragedy of the Users of a shared resource expand their use of the resource commons past the point that would be optimal if there was a sole owner

because the cost of beyond-optimal use is distributed across all users See Hardin (1968)

trawls Trawling involves towing one or more trawl nets behind a boat or inbetween two boats either through the water column or along the oceanrsquos floor Trawl nets are usually shaped like a cone or funnel with a wide opening to catch fish or crustaceans and a narrow closed end called a codend Trawls can be made in water of various depths down to around 3000 metres and nets differ by their mesh size and the width of their opening among other

things

vessel level Vessel level efficiency requires that revenues be maximised and efficiency catching costs be minimised for a given quantity of catch The

choice of management regime will have a substantial bearing on whether vessel level efficiency is achieved as it largely defines the incentive structure that fishers operate within

188


references

ABARE 1998 Australian Fisheries Surveys Report 1998 Canberra

mdashmdash 2001 Australian Fisheries Surveys Report 2000 Canberra

mdashmdash 2007 Australian Fisheries Statistics 2006 ABARE Canberra May

Abetz E 2006a Commonwealth fisheries set for a more secure and profitable future results of Round 2 of the fishing concession buyback announced Media Release DAFF06153A Parliament House Canberra 22 December ( www mffcgovaureleases200606153ahtml)

mdashmdash 2006b Torres Strait prawn fishery arrangements for the 2006 season Media Release DAFF06008AJ Parliament House Canberra 28 February

ABS (Australian Bureau of Statistics) 2002 Working Population Profile 2001 Census Community Profile Series Canberra

AFMA (Australian Fisheries Management Authority) 2002 AFMA News vol 6 no 3 May

mdashmdash 2004a AFMA Interim Policy for Inshore Waters Surrounding Norfolk Island as decided at the 116th AFMA Board Meeting Canberra 25ndash26 November

mdashmdash 2004b AFMA Update A Newsletter from the Australian Fisheries Manageshyment Authority vol 1 no 10 Canberra 26 November

mdashmdash 2004c Coral Sea Fishery Statement of Management Arrangements 200405 (revised) Canberra June

mdashmdash 2004d Cost Recovery Impact Statement Canberra November

mdashmdash 2004e Draft Assessment Report Skipjack Tuna Fishery Canberra September

mdashmdash 2004h Western Trawl Fisheries Statement of Management Arrangements Canberra November

mdashmdash 2004f Future Management of the Small Pelagic Fishery (Zones BC and D) An AFMA Discussion Paper Canberra

mdashmdash 2004g Regulation Impact Statement for the Eastern Tuna and Billfish Fishery Management Plan Canberra October

mdashmdash 2005a AFMA Board policy on apportionment of a squid TAC between the southern squid jig fishery (SSJF) south east trawl fishery (SETF) and Great Australian Bight trawl fishery (GABTF) Canberra

189


mdashmdash 2005b Draft Assessment Report Skipjack Tuna Fishery Canberra April

mdashmdash 2005c Heard Island and McDonald Islands Fishery Conditions on Statutory Fishing Rights (SFRs) 200405 Season Canberra

mdashmdash 2005d Prohibition on the Use of Fishing Methods other than Trawling or Longlining Direction No HIMIFD 9 Canberra November

mdashmdash 2006a AFMA Catchwatch A Report from the Australian Fisheries Manageshyment Authority Canberra 18 January

mdashmdash 2006b AFMA Update A Newsletter from the Australian Fisheries Manageshyment Authority vol 3 no 8 Canberra 11 May

mdashmdash 2006c AFMA Update A Newsletter from the Australian Fisheries Manageshyment Authority vol 3 no 5 Canberra 16 March

mdashmdash 2006d AFMA Update A Newsletter from the Australian Fisheries Manageshyment Authority vol 3 no 8 Canberra 11 May

mdashmdash 2006e AFMA Update A Newsletter from the Australian Fisheries Manageshyment Authority vol 3 no 9 Canberra 25 May

mdashmdash 2006f Annual Report 05-06 Canberra

mdashmdash 2006g Proposed Approach Timetable and Key Elements of a Management Plan for the Norfolk Island Offshore Demersal Finfish Fishery Canberra

mdashmdash 2006h Response to Ministerial Direction ndash Eastern Tuna and Billfish Fishery Canberra February

mdashmdash 2006i Response to Ministerial Direction ndash Western Trawl Fisheries Canberra February

mdashmdash 2006j Response to Ministerial Direction ndash SESSF Canberra February

mdashmdash 2006k Southern and Eastern Scalefish and Shark Fishery ndash A Guide to the 2007 Management Arrangements Canberra December ( wwwafmagov aufi sheriessesssessmgtdocsguide_man_arr_2007pdf)

mdashmdash 2006l Heard Island and McDonald Islands Fishery total allowable catch determination ndash 20062007 season November (wwwafmagovaufisheries antarctichimipublicationsdocsmanage_determHIMI_tac_0607pdf)

mdashmdash 2007 Southern and Eastern Scalefish and Shark Fishery 2006 AFMA Catchwatch A Report from the Australian Fisheries Management Authority 18 January

Anderson LG 1977 The Economics of Fisheries Management Johns Hopkins University Press New York

190


Bass Strait Central Zone Scallop Management Advisory Committee (ScallopMAC) 2005 Chairrsquos summary of Meeting no 14 Melbourne 15ndash16 November

Benzie JA and Uthicke S 2003 Stock Size of Sea Cucumber Recruitment Patterns and Gene Flow in Black Teatfish and Recovery of Overfished Black Teatfish Stocks on the Great Barrier Reef Fisheries Research and Development Corporation Canberra

Bromhead D and Findlay J 2003 Tuna and Billfish Fisheries of the Eastern Australian Fishing Zone and Adjacent High Seas Working paper presented at the Sixteenth Meeting of the Standing Committee on Tuna and Billfish Mooloolaba 9ndash16 July

Brown D Galeano D Shafron W and Blias A 2002 Monitoring the Economic Impact of New Management Arrangements in the Northern Prawn Fishery ABARE Report to the Fisheries and Aquaculture Branch Department of Agriculshyture Fisheries and Forestry Canberra February

Campbell D 2001 Change in Fleet Capacity and Ownership of Harvesting Rights in the Australian Southern Bluefin Tuna Fishery Case Studies on the Effects of Transferable Fishing Rights on Fleet Capacity and Concentration of Quota Ownership Rome

Campbell D Brown D and Battaglene T 2000 lsquoIndividual transferable catch quotas Australian experience in the southern bluefin tuna fisheryrsquo Marine Policy vol 24 pp 109ndash117

Caton A and McLoughlin K (eds) 2004 Fishery Status Reports 2004 Status of Fish Stocks Managed by the Australian Government Bureau of Rural Sciences Canberra

CCSBT (Commission for the Conservation of Southern Bluefin Tuna) 2005 Report of the Tenth meeting of the Scientific Committee Canberra

mdashmdash 2006 Commission for the Conservation of Southern Bluefin Tuna Canberra (wwwccsbtorgindexhtml)

mdashmdash 2007 Management of SBT Canberra (wwwccsbtorgdocsmanagement html)

Che N and Kompas T 2002 Efficiency gains and cost reductions from ITQs a cost frontier for the Australian south east fishery Paper presented at the 2002 International Institute of Fisheries Economics and Trade Conference Wellington New Zealand 19ndash22 August

Commonwealth of Australia 1989 New Directions for Commonwealth Fishshyeries Management in the 1990s A Government Policy Statement Canberra December

191


Commonwealth of Australia 2005 Map of the Australian Fishing Zone Canberra May (wwwafmagovauinformationmapsafzhtm)

mdashmdash 2006 Energy Grants Credits Scheme Australian Taxation Office Canberra March

Connor R and Alden D 2001 lsquoIndicators of the effectiveness of quota markets the south east trawl fishery of Australiarsquo Marine and Freshwater Research vol 52 no 4 pp 387ndash97

DAFF (Department of Agriculture Fisheries and Forestry) 2003 Looking to the Future A Review of Commonwealth Fisheries Policy Canberra June

mdashmdash 2005 New Zealand ndash Australia Fisheries Cooperation Canberra (wwwdaff govau)

mdashmdash 2006 Torres Strait Fisheries Consultation on Proposed Legislative Amendshyments Canberra (wwwpzjagovauresourceslegislationhtm)

DEH (Department of the Environment and Heritage) 2004 Assessment of the Coral Sea Fishery Canberra

mdashmdash 2005 Advice to the Minister for the Environment and Heritage from the Threatshyened Species Scientific Committee (TSSC) on Amendments to the list of Threatshyened Species under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) Canberra

DFAT (Department of Foreign Affairs and Trade) 2005 Australian Government commits to Torres Strait prawn fishery Joint Media Release ndash Minister for Foreign Affairs Alexander Downer and Deputy Prime Minister Minister for Trade Mark Vaile Canberra 27 July

DPIEWET (Department of Primary Industries Water and Environment of Tasmania) 2004 Zone A Small Pelagic Fishery (ZASPF) Draft Policy Document Hobart March

Elliston L Newton P Galeano D Gooday P Kompas T and Newby J 2004 Economic Efficiency in the South East Trawl Fishery ABARE eReport 0421 Prepared for the Fisheries Resources Research Fund Canberra November

FERM (Fisheries Economics Research and Management Pty Ltd) 2004 ITQs Ageing Boats and the Price of Fish Profitability and Autonomous Adjustment in the South East Trawl Fishery Funded by the Fisheries Resources Research Fund Canberra

FRDC (Fisheries Research and Development Corporation) 2004 Annual Report 2003-04 Canberra

192


FUELtrac 2006 FUELtrac Pricing Report Toowong Queensland (wwwfueltrac comau)

Galeano D Gooday P Shafron W and Levantis C 2003 Australian Fisheries Surveys Report 2002 Economic Performance of Selected Fisheries in 1999shy2000 and 2000-01 ABARE Canberra May

Galeano D Langenkamp D Shafron W and Levantis C 2004 Australian Fisheries Surveys Report 2003 Economic Performance of Selected Fisheries in 2000-01 and 2001-02 ABARE Canberra February

Galeano D Love G and Gooday P 2005a Managing Small Fisheries An Economic Perspective ABARE Report Prepared for the Fisheries Resources Research Fund Canberra May

Galeano D Vieira S Shafron W and Newton P 2006 Australian Fisheries Surveys Report 2005 ABARE Report Prepared for the Fisheries Resources Research Fund Canberra August

Geoscience Australia 2003 Commonwealth Fisheries Geographic Information System Dataset Canberra July

mdashmdash 2006 Australian Maritime Boundaries Geographic Information System Dataset Canberra February

Gooday P and Galeano D 2003 Fisheries Management A Framework for Assessing Economic Performance ABARE eReport 037 Prepared for the Fishshyeries Resources Research Fund Canberra

Grosser S 2003 Tuna overcatch third time lucky ABC South Australia Country Hour Adelaide 21 May

Hanna D Hogan L and Tedesco L 2006 Torres Strait Prawn Fishery Performshyance Measures and Management Options ABARE eReport 064 Prepared for Fisheries Resources Research Fund Canberra April

Hardin G 1968 lsquoThe tragedy of the commonsrsquo Science vol 162 pp 1243ndash8

Hobsbawn PI Findlay JD Rowcliffe S and Bodsworth A 2005 Australiarsquos Annual Review of the Southern Bluefin Tuna Fishery Bureau of Rural Sciences Canberra

IAAPSPF (Independent Allocation Advisory Panel on the Small Pelagic Fishery) 2005 Written Report and Recommendations of the Independent Allocation Advisory Panel on the Small Pelagic Fishery October

Kailola PJ Williams MJ Stewart PC Reichelt RE McNee A and Grieve C 1993 Australian Fisheries Resources Bureau of Resource Sciences Canberra

193


Kompas T and Che N 2002 A Stochastic Production Frontier Analysis of the Australian Northern Prawn Fishery ABARE Report to the Fisheries Resources Research Fund Canberra

mdashmdash and mdashmdash 2004a A Bioeconomic Model of the Australian Northern Tiger Prawn Fishery Management Options Under Uncertainty ABARE Report to the Fisheries Resources Research Fund Canberra August

mdashmdash and mdashmdash 2006 A Stochastic Bioeconomic Model of a Multi-species and Multi-fleet fishery An Application to the South East Trawl Fishery ABARE Report to the Fisheries Resources Research Fund Canberra June

mdashmdash mdashmdash and Grafton Q 2004b lsquoTechnical efficiency effects of input controls evidence from Australiarsquos banana prawn fisheryrsquo Applied Economics vol 36 no 15 pp 1631ndash41

Larcombe J and McLoughlin K (eds) 2007 Status of Fish Stocks Managed by the Australian Government Fishery Status Reports 2006 Bureau of Rural Sciences Canberra

Lynch A 2004 Southern and Western Tuna and Billfish Fishery Data Summary 2003 Australian Fisheries Management Authority Canberra

mdashmdash 2005 Eastern Tuna and Billfish Fishery Data Summary 2004-2005 Canberra

McLoughlin K (ed) 2006 Fishery Status Reports 2005 Status of Fish Stocks Managed by the Australian Government Bureau of Rural Sciences Canberra

MFFC (Minister for Fisheries Forestry and Conservation) 2005 Securing our Fishing Future Media Release DAFF05248M Canberra 14 December

Perdrau M and Lynch A 2004 Bass Strait Central Zone Scallop Fishery Data Summary 2003 Australian Fisheries Management Authority Canberra June

PZJA (Protected Zone Joint Authority) 2005 Project Plan for Developing 2007 Management Arrangements November

Roberts L 2004 Letter to statutory fishing right holders and owners Australian Fisheries Management Authority Canberra 19 November

Rose R 2002 Efficiency of Individual Transferable Quotas in Fisheries Manageshyment ABARE Report Prepared for the Fisheries Resources Research Fund Canberra

Rose R and Kompas T 2004 Management Options for the Australian Northern Prawn Fishery An Economic Assessment ABARE eReport 0412 Prepared for the Fisheries Resources Research Fund Canberra August

194


Scott M Sharp A and OrsquoBrien V 1999 Bass Strait Central Zone Scallop Fishery Data Summary 1998 Australian Fisheries Management Authority Canberra

SouthMAC (Sub Antarctic Fisheries Management Advisory Committee) 2003 SouthMAC 19 minutes Hobart 20 November

mdashmdash 2006 Chairrsquos Summary ndash SouthMAC 24 Canberra 26 June

SPFWG (Small Pelagic Fishery Working Group) 2004 Canberra Meeting 5ndash15 October

Squires D Kirkley J and Tisdell CA 1995 lsquoIndividual transferable quotas as a fisheries management toolrsquo Reviews in Fisheries Science vol 3 no 2 pp 141ndash169

Stone T 2005 Letter to Eastern Tuna and Billfish Fishery Permit Holders mdash Management Arrangements for Swordfish Australian Fisheries Management Authority Canberra 23 November

Taylor S Turnbull C Marrington J and George M (eds) 2006 Torres Prawn Handbook 2006 Australian Fisheries Management Authority Canberra

mdashmdash (eds) 2007 Torres Prawn Handbook 2007 Australian Fisheries Management Authority Canberra

Townley A (AFMA) 2006 personal communication Canberra 9 June

Vieira S Wood R and Galeano D 2007 Australian Fisheries Survey Report 2006 ABARE Report for the Fisheries Resources Research Fund Canberra March

WestMAC (Western Trawl Fisheries Management Advisory Committee) 2006 MAC Chairrsquos Summary (WestMAC 12) Fremantle 7ndash8 March

WTBF (Western Tuna and Billfish Fishery) 2004 Chairrsquos Summary of Joint MAC and SAG Workshop Fremantle October 6ndash7

195

RESEARCH FUNDING ABARE relies on financial support from external organ isations to complete its research program As at the date of this publication the following organisations had provided financial support for ABARErsquos research program in 2006-07 and 2007-08 We gratefully acknowledge this assistance

Asia Pacific Economic Cooperation Secretariat Meat and Livestock Australia

Association of Southeast Asian Nations ndash secretariat Murray Darling Basin Commission

AusAid National Australia Bank

Australian Centre for Excellence in Risk Analysis NSW Sugar

Australian Centre for International Agricultural Rural Industries Research and Development Research Corporation

Australian Fisheries Management Authority University of Queensland

Australian Greenhouse Office Wheat Export Authority

Australian Government Department of the Environment and Water Resources

Australian Government Department of Industry Tourshyism and Resources

Australian Government Department of Prime Minister and Cabinet

Australian Government Department of Transport and Regional Services

CRC ndash Plant Biosecurity

CSIRO (Commonwealth Scientific and Industrial Research Organisation)

Dairy Australia

Department of Business Economic and Regional Development Northern Territory

Department of Primary Industries Victoria

Fisheries Research and Development Corporation

Fisheries Resources Research Fund

Forest and Wood Products Research and Development Corporation

Grains Research and Development Corporation

Grape and Wine Research and Development Corporation

Independent Pricing and Regulatory Tribunal

International Food Policy Research Institute

196

0707

copy Commonwealth of Australia 2007

This work is copyright The Copyright Act 1968 permits fair dealing for study research news reporting criticism or review Selected passages tables or diagrams may be reproduced for such purposes provided acknowledgment of the source is included Major extracts or the entire document may not be reproduced by any process without the written permission of the Executive Director ABARE

ISSN 1037-8286 ISBN 978-1-921448-02-7

Newton P Wood R Galeano D Vieira S and Perry R 2007 Fishery Economic Status Report ABARE Report 0719 Prepared for the Fisheries Resources Research Fund Canberra October

Australian Bureau of Agricultural and Resource Economics GPO Box 1563 Canberra 2601

Telephone +61 2 6272 2000 Facsimile +61 2 6272 2001 Internet wwwabareconomicscom

ABARE is a professionally independent government economic research agency

ABARE project 3160

ii


foreword




October 2007

iii


acknowledgments


iv


contents

overview 1

1 introduction 9




3 the fisheries 31





v





references 186

appendixes



vi













vii













scallop fishery 112

viii










ix












x

















xi










xii


overview





1






2













continued

3

indicatortools







bioeconomic models


na














4













continued

5



indicatortools







na na na na

na na na














continued

6



indicatortools



















continued

7






2001-02








8

1 introduction










9










10








11








12








$

$MEY

continued

thin stocks

revenue

costs

thick stocks


13








14










15




















16





fi shers
















17








18



indicators





latent effort



value of quota


continued

19




tools





bioeconomic models


20







21








$b 2005-06

05

10

15

20


aquaculture


22












northern prawn

other fisheries

$m 10 20 30 40 50 60 70


23





exchange rates











24













14 $489m 31

pearlsabalone

25







1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06





Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26



2500

1500

2000

80

60

70

prawns














22



27




Viet Nam

New Zealand

Thailand

other




200








28



fi shery




80

90

100

110

120

130

2005-06 cL




29






30

3 the fisheries




31

4 large fisheries















32




event










33



34




kt

2

4

6

8 other

albacore

bigeye tuna


A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06


35










36











37











areas




38








39








crew costs $ 121 594 (9) 141 064 (8)


fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)


packaging $ 28 145 (15) 37 841 (17)


other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)











40



level of latency





41








A$m 2005-06

20

ndash20

40

60







42







43








44














Fremantle

Albany

45





1

2

3

4

5 other







46









2 427 42 120 360 150 80 Source AFMA (2006l)





47

50








level of latency




tonnes tonnes



48







49













50




51



kt

2

4

6

8


50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06







52




Hong Kong India


other other

A$m 20 40 60 kt 2 4 6 8 10








53








no




2005-06 86

54







event










55



species status







crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)


packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)










56






level of latency




57





costs receipts



2005-06







58







59














60




Ulladulla

Nelson Bay

Port Lincoln


Mooloolaba



high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61




4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06








62











63








event



64










kt

60

20

40






65

Java





INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards


Longlining


10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln




66




level of latency






value of quota



67





68
















69

















70






71


72










100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73
















74












75








76












77










78




biological status












continued

79















continued

80















continued

81















uncertain



continued

82















royal red prawn



continued

83





deepwater sharks













spotted warehou




84






2002-03 2003-04 2004-05




administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)


fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)



other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)










85





2003-04 2004-05




administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)









86




level of latency



87













elephantfish oreo






20 40 60 80 100



88







increasing effort




20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89



100

80

60

40

20

lsquo000 hours




25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p





90









91










92







93






94
















95





96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt





fig 36

40


30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06



fig 37

kt



1999 2001 2003 2005 -2000 -02 -04 -06

fig 38


20

15

10

5 2005-06

$m


97

1999 2001 2003 2005 -2000 -02 -04 -06








tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98











99






event













100













101



species status



biological status







102






2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)










103




latent effort




nights fished a



1993 1994

8 525 9 244

30 250 30 250

72 69


1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25


2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58


104





A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04








105







106

5 small fisheries















107








108





109






levels








110




111



30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06









112











113






squid receipts $ 23 653 (39) 40 422 (16)





bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)


fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)












114



level of latency









115

2

4

6

8







2005-06 A$m

ndash2





116


Coral Sea fishery

















117





118














119




120






variable








121






122













123





124












125






126





uncertain

uncertain







127











128




15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129












130



management costs





131


skipjack fishery











132


133







year event









Source AFMA (2005b)

134



species status




skipjack fishery


1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135












136






137








5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000







138






139












140






141



1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06



imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06


142








2

1

kt

southern squid jig





143













144


















145




level of latency











146




3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1




management costs




147
















148






-06




catch lt500 tonnes


stock is abundant)

TAC of 400 tonnes


TAC of 200 tonnes

catch ge500 tonnes




149




150













151



tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05











152










T $070 million




153





20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06


30

20


10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154












155





Ocean








156













bait $ 74 410 (13)

crew costs $ 229 880 (13)


fuel $ 104 520 (14)

insurance $ 17 200 (14)


leasing $ 17 480 (38)










capital (0)






157




latent effort






158










159




160






Cairns










continued

161













Torres Strait prawn



162












163



total minimum








164



employment





fishery






GHT sector




165



employment







Australia 11 874 8 298 606 01


166





167








commercial fishing




commercial fishing



business services




168







commercial fishing





fishing


health services



commercial fishing



169





commercial fishing


5000 6000

industry and rank




commercial fishing




400 2000

industry and rank

health services

business services


education

commercial fishing




1000 3000 4000




commercial fishing


Devonport Tasmania


400200 800 1000

170





commercial fishing









commercial fishing





commercial fishing


171





commercial fishing



4000 6000 80000 2000


health services


commercial fishing



800600 1000 0 400200

food retailing

health services



commercial fishing





172





commercial fishing



commercial fishing


400 1000

industry and rank


defence


metal products

commercial fishing




800400 2000




commercial fishing




400200 1000 1200

173




commercial fishing


business services



600 8000 200 400


agriculture





0


metal products


food retailing

commercial fishing






174









400 500 6000 100 200 300


agriculture


commercial fishing



200150 2500 100 50


business services



commercial fishing






175









food retailing

education



commercial fishing


1000 1200


600300 400 500 7000 200100

food retailing

agriculture


education

commercial fishing






176

A appendix




177




NR net returns











178










179


comparing estimates



(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605


($9605$25 000) x 100 = 38


180

B appendix

abbreviations


























181

















182


glossary










cost

183












consider costs


184





boats



longline (pelagic)





185













invested elsewhere

186




catches









ment



187







things



188


references

















189



















190














191















192
















193
















194














195















Dairy Australia










196

0707


foreword




October 2007

iii


acknowledgments


iv


contents

overview 1

1 introduction 9




3 the fisheries 31





v





references 186

appendixes



vi













vii













scallop fishery 112

viii










ix












x

















xi










xii


overview





1






2













continued

3

indicatortools







bioeconomic models


na














4













continued

5



indicatortools







na na na na

na na na














continued

6



indicatortools



















continued

7






2001-02








8

1 introduction










9










10








11








12








$

$MEY

continued

thin stocks

revenue

costs

thick stocks


13








14










15




















16





fi shers
















17








18



indicators





latent effort



value of quota


continued

19




tools





bioeconomic models


20







21








$b 2005-06

05

10

15

20


aquaculture


22












northern prawn

other fisheries

$m 10 20 30 40 50 60 70


23





exchange rates











24













14 $489m 31

pearlsabalone

25







1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06





Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26



2500

1500

2000

80

60

70

prawns














22



27




Viet Nam

New Zealand

Thailand

other




200








28



fi shery




80

90

100

110

120

130

2005-06 cL




29






30

3 the fisheries




31

4 large fisheries















32




event










33



34




kt

2

4

6

8 other

albacore

bigeye tuna


A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06


35










36











37











areas




38








39








crew costs $ 121 594 (9) 141 064 (8)


fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)


packaging $ 28 145 (15) 37 841 (17)


other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)











40



level of latency





41








A$m 2005-06

20

ndash20

40

60







42







43








44














Fremantle

Albany

45





1

2

3

4

5 other







46









2 427 42 120 360 150 80 Source AFMA (2006l)





47

50








level of latency




tonnes tonnes



48







49













50




51



kt

2

4

6

8


50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06







52




Hong Kong India


other other

A$m 20 40 60 kt 2 4 6 8 10








53








no




2005-06 86

54







event










55



species status







crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)


packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)










56






level of latency




57





costs receipts



2005-06







58







59














60




Ulladulla

Nelson Bay

Port Lincoln


Mooloolaba



high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61




4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06








62











63








event



64










kt

60

20

40






65

Java





INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards


Longlining


10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln




66




level of latency






value of quota



67





68
















69

















70






71


72










100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73
















74












75








76












77










78




biological status












continued

79















continued

80















continued

81















uncertain



continued

82















royal red prawn



continued

83





deepwater sharks













spotted warehou




84






2002-03 2003-04 2004-05




administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)


fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)



other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)










85





2003-04 2004-05




administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)









86




level of latency



87













elephantfish oreo






20 40 60 80 100



88







increasing effort




20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89



100

80

60

40

20

lsquo000 hours




25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p





90









91










92







93






94
















95





96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt





fig 36

40


30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06



fig 37

kt



1999 2001 2003 2005 -2000 -02 -04 -06

fig 38


20

15

10

5 2005-06

$m


97

1999 2001 2003 2005 -2000 -02 -04 -06








tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98











99






event













100













101



species status



biological status







102






2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)










103




latent effort




nights fished a



1993 1994

8 525 9 244

30 250 30 250

72 69


1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25


2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58


104





A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04








105







106

5 small fisheries















107








108





109






levels








110




111



30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06









112











113






squid receipts $ 23 653 (39) 40 422 (16)





bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)


fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)












114



level of latency









115

2

4

6

8







2005-06 A$m

ndash2





116


Coral Sea fishery

















117





118














119




120






variable








121






122













123





124












125






126





uncertain

uncertain







127











128




15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129












130



management costs





131


skipjack fishery











132


133







year event









Source AFMA (2005b)

134



species status




skipjack fishery


1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135












136






137








5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000







138






139












140






141



1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06



imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06


142








2

1

kt

southern squid jig





143













144


















145




level of latency











146




3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1




management costs




147
















148






-06




catch lt500 tonnes


stock is abundant)

TAC of 400 tonnes


TAC of 200 tonnes

catch ge500 tonnes




149




150













151



tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05











152










T $070 million




153





20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06


30

20


10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154












155





Ocean








156













bait $ 74 410 (13)

crew costs $ 229 880 (13)


fuel $ 104 520 (14)

insurance $ 17 200 (14)


leasing $ 17 480 (38)










capital (0)






157




latent effort






158










159




160






Cairns










continued

161













Torres Strait prawn



162












163



total minimum








164



employment





fishery






GHT sector




165



employment







Australia 11 874 8 298 606 01


166





167








commercial fishing




commercial fishing



business services




168







commercial fishing





fishing


health services



commercial fishing



169





commercial fishing


5000 6000

industry and rank




commercial fishing




400 2000

industry and rank

health services

business services


education

commercial fishing




1000 3000 4000




commercial fishing


Devonport Tasmania


400200 800 1000

170





commercial fishing









commercial fishing





commercial fishing


171





commercial fishing



4000 6000 80000 2000


health services


commercial fishing



800600 1000 0 400200

food retailing

health services



commercial fishing





172





commercial fishing



commercial fishing


400 1000

industry and rank


defence


metal products

commercial fishing




800400 2000




commercial fishing




400200 1000 1200

173




commercial fishing


business services



600 8000 200 400


agriculture





0


metal products


food retailing

commercial fishing






174









400 500 6000 100 200 300


agriculture


commercial fishing



200150 2500 100 50


business services



commercial fishing






175









food retailing

education



commercial fishing


1000 1200


600300 400 500 7000 200100

food retailing

agriculture


education

commercial fishing






176

A appendix




177




NR net returns











178










179


comparing estimates



(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605


($9605$25 000) x 100 = 38


180

B appendix

abbreviations


























181

















182


glossary










cost

183












consider costs


184





boats



longline (pelagic)





185













invested elsewhere

186




catches









ment



187







things



188


references

















189



















190














191















192
















193
















194














195















Dairy Australia










196

0707


acknowledgments


iv


contents

overview 1

1 introduction 9




3 the fisheries 31





v





references 186

appendixes



vi













vii













scallop fishery 112

viii










ix












x

















xi










xii


overview





1






2













continued

3

indicatortools







bioeconomic models


na














4













continued

5



indicatortools







na na na na

na na na














continued

6



indicatortools



















continued

7






2001-02








8

1 introduction










9










10








11








12








$

$MEY

continued

thin stocks

revenue

costs

thick stocks


13








14










15




















16





fi shers
















17








18



indicators





latent effort



value of quota


continued

19




tools





bioeconomic models


20







21








$b 2005-06

05

10

15

20


aquaculture


22












northern prawn

other fisheries

$m 10 20 30 40 50 60 70


23





exchange rates











24













14 $489m 31

pearlsabalone

25







1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06





Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26



2500

1500

2000

80

60

70

prawns














22



27




Viet Nam

New Zealand

Thailand

other




200








28



fi shery




80

90

100

110

120

130

2005-06 cL




29






30

3 the fisheries




31

4 large fisheries















32




event










33



34




kt

2

4

6

8 other

albacore

bigeye tuna


A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06


35










36











37











areas




38








39








crew costs $ 121 594 (9) 141 064 (8)


fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)


packaging $ 28 145 (15) 37 841 (17)


other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)











40



level of latency





41








A$m 2005-06

20

ndash20

40

60







42







43








44














Fremantle

Albany

45





1

2

3

4

5 other







46









2 427 42 120 360 150 80 Source AFMA (2006l)





47

50








level of latency




tonnes tonnes



48







49













50




51



kt

2

4

6

8


50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06







52




Hong Kong India


other other

A$m 20 40 60 kt 2 4 6 8 10








53








no




2005-06 86

54







event










55



species status







crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)


packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)










56






level of latency




57





costs receipts



2005-06







58







59














60




Ulladulla

Nelson Bay

Port Lincoln


Mooloolaba



high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61




4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06








62











63








event



64










kt

60

20

40






65

Java





INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards


Longlining


10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln




66




level of latency






value of quota



67





68
















69

















70






71


72










100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73
















74












75








76












77










78




biological status












continued

79















continued

80















continued

81















uncertain



continued

82















royal red prawn



continued

83





deepwater sharks













spotted warehou




84






2002-03 2003-04 2004-05




administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)


fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)



other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)










85





2003-04 2004-05




administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)









86




level of latency



87













elephantfish oreo






20 40 60 80 100



88







increasing effort




20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89



100

80

60

40

20

lsquo000 hours




25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p





90









91










92







93






94
















95





96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt





fig 36

40


30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06



fig 37

kt



1999 2001 2003 2005 -2000 -02 -04 -06

fig 38


20

15

10

5 2005-06

$m


97

1999 2001 2003 2005 -2000 -02 -04 -06








tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98











99






event













100













101



species status



biological status







102






2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)










103




latent effort




nights fished a



1993 1994

8 525 9 244

30 250 30 250

72 69


1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25


2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58


104





A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04








105







106

5 small fisheries















107








108





109






levels








110




111



30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06









112











113






squid receipts $ 23 653 (39) 40 422 (16)





bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)


fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)












114



level of latency









115

2

4

6

8







2005-06 A$m

ndash2





116


Coral Sea fishery

















117





118














119




120






variable








121






122













123





124












125






126





uncertain

uncertain







127











128




15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129












130



management costs





131


skipjack fishery











132


133







year event









Source AFMA (2005b)

134



species status




skipjack fishery


1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135












136






137








5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000







138






139












140






141



1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06



imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06


142








2

1

kt

southern squid jig





143













144


















145




level of latency











146




3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1




management costs




147
















148






-06




catch lt500 tonnes


stock is abundant)

TAC of 400 tonnes


TAC of 200 tonnes

catch ge500 tonnes




149




150













151



tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05











152










T $070 million




153





20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06


30

20


10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154












155





Ocean








156













bait $ 74 410 (13)

crew costs $ 229 880 (13)


fuel $ 104 520 (14)

insurance $ 17 200 (14)


leasing $ 17 480 (38)










capital (0)






157




latent effort






158










159




160






Cairns










continued

161













Torres Strait prawn



162












163



total minimum








164



employment





fishery






GHT sector




165



employment







Australia 11 874 8 298 606 01


166





167








commercial fishing




commercial fishing



business services




168







commercial fishing





fishing


health services



commercial fishing



169





commercial fishing


5000 6000

industry and rank




commercial fishing




400 2000

industry and rank

health services

business services


education

commercial fishing




1000 3000 4000




commercial fishing


Devonport Tasmania


400200 800 1000

170





commercial fishing









commercial fishing





commercial fishing


171





commercial fishing



4000 6000 80000 2000


health services


commercial fishing



800600 1000 0 400200

food retailing

health services



commercial fishing





172





commercial fishing



commercial fishing


400 1000

industry and rank


defence


metal products

commercial fishing




800400 2000




commercial fishing




400200 1000 1200

173




commercial fishing


business services



600 8000 200 400


agriculture





0


metal products


food retailing

commercial fishing






174









400 500 6000 100 200 300


agriculture


commercial fishing



200150 2500 100 50


business services



commercial fishing






175









food retailing

education



commercial fishing


1000 1200


600300 400 500 7000 200100

food retailing

agriculture


education

commercial fishing






176

A appendix




177




NR net returns











178










179


comparing estimates



(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605


($9605$25 000) x 100 = 38


180

B appendix

abbreviations


























181

















182


glossary










cost

183












consider costs


184





boats



longline (pelagic)





185













invested elsewhere

186




catches









ment



187







things



188


references

















189



















190














191















192
















193
















194














195















Dairy Australia










196

0707


contents

overview 1

1 introduction 9




3 the fisheries 31





v





references 186

appendixes



vi













vii













scallop fishery 112

viii










ix












x

















xi










xii


overview





1






2













continued

3

indicatortools







bioeconomic models


na














4













continued

5



indicatortools







na na na na

na na na














continued

6



indicatortools



















continued

7






2001-02








8

1 introduction










9










10








11








12








$

$MEY

continued

thin stocks

revenue

costs

thick stocks


13








14










15




















16





fi shers
















17








18



indicators





latent effort



value of quota


continued

19




tools





bioeconomic models


20







21








$b 2005-06

05

10

15

20


aquaculture


22












northern prawn

other fisheries

$m 10 20 30 40 50 60 70


23





exchange rates











24













14 $489m 31

pearlsabalone

25







1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06





Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26



2500

1500

2000

80

60

70

prawns














22



27




Viet Nam

New Zealand

Thailand

other




200








28



fi shery




80

90

100

110

120

130

2005-06 cL




29






30

3 the fisheries




31

4 large fisheries















32




event










33



34




kt

2

4

6

8 other

albacore

bigeye tuna


A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06


35










36











37











areas




38








39








crew costs $ 121 594 (9) 141 064 (8)


fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)


packaging $ 28 145 (15) 37 841 (17)


other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)











40



level of latency





41








A$m 2005-06

20

ndash20

40

60







42







43








44














Fremantle

Albany

45





1

2

3

4

5 other







46









2 427 42 120 360 150 80 Source AFMA (2006l)





47

50








level of latency




tonnes tonnes



48







49













50




51



kt

2

4

6

8


50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06







52




Hong Kong India


other other

A$m 20 40 60 kt 2 4 6 8 10








53








no




2005-06 86

54







event










55



species status







crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)


packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)










56






level of latency




57





costs receipts



2005-06







58







59














60




Ulladulla

Nelson Bay

Port Lincoln


Mooloolaba



high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61




4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06








62











63








event



64










kt

60

20

40






65

Java





INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards


Longlining


10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln




66




level of latency






value of quota



67





68
















69

















70






71


72










100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73
















74












75








76












77










78




biological status












continued

79















continued

80















continued

81















uncertain



continued

82















royal red prawn



continued

83





deepwater sharks













spotted warehou




84






2002-03 2003-04 2004-05




administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)


fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)



other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)










85





2003-04 2004-05




administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)









86




level of latency



87













elephantfish oreo






20 40 60 80 100



88







increasing effort




20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89



100

80

60

40

20

lsquo000 hours




25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p





90









91










92







93






94
















95





96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt





fig 36

40


30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06



fig 37

kt



1999 2001 2003 2005 -2000 -02 -04 -06

fig 38


20

15

10

5 2005-06

$m


97

1999 2001 2003 2005 -2000 -02 -04 -06








tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98











99






event













100













101



species status



biological status







102






2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)










103




latent effort




nights fished a



1993 1994

8 525 9 244

30 250 30 250

72 69


1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25


2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58


104





A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04








105







106

5 small fisheries















107








108





109






levels








110




111



30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06









112











113






squid receipts $ 23 653 (39) 40 422 (16)





bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)


fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)












114



level of latency









115

2

4

6

8







2005-06 A$m

ndash2





116


Coral Sea fishery

















117





118














119




120






variable








121






122













123





124












125






126





uncertain

uncertain







127











128




15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129












130



management costs





131


skipjack fishery











132


133







year event









Source AFMA (2005b)

134



species status




skipjack fishery


1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135












136






137








5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000







138






139












140






141



1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06



imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06


142








2

1

kt

southern squid jig





143













144


















145




level of latency











146




3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1




management costs




147
















148






-06




catch lt500 tonnes


stock is abundant)

TAC of 400 tonnes


TAC of 200 tonnes

catch ge500 tonnes




149




150













151



tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05











152










T $070 million




153





20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06


30

20


10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154












155





Ocean








156













bait $ 74 410 (13)

crew costs $ 229 880 (13)


fuel $ 104 520 (14)

insurance $ 17 200 (14)


leasing $ 17 480 (38)










capital (0)






157




latent effort






158










159




160






Cairns










continued

161













Torres Strait prawn



162












163



total minimum








164



employment





fishery






GHT sector




165



employment







Australia 11 874 8 298 606 01


166





167








commercial fishing




commercial fishing



business services




168







commercial fishing





fishing


health services



commercial fishing



169





commercial fishing


5000 6000

industry and rank




commercial fishing




400 2000

industry and rank

health services

business services


education

commercial fishing




1000 3000 4000




commercial fishing


Devonport Tasmania


400200 800 1000

170





commercial fishing









commercial fishing





commercial fishing


171





commercial fishing



4000 6000 80000 2000


health services


commercial fishing



800600 1000 0 400200

food retailing

health services



commercial fishing





172





commercial fishing



commercial fishing


400 1000

industry and rank


defence


metal products

commercial fishing




800400 2000




commercial fishing




400200 1000 1200

173




commercial fishing


business services



600 8000 200 400


agriculture





0


metal products


food retailing

commercial fishing






174









400 500 6000 100 200 300


agriculture


commercial fishing



200150 2500 100 50


business services



commercial fishing






175









food retailing

education



commercial fishing


1000 1200


600300 400 500 7000 200100

food retailing

agriculture


education

commercial fishing






176

A appendix




177




NR net returns











178










179


comparing estimates



(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605


($9605$25 000) x 100 = 38


180

B appendix

abbreviations


























181

















182


glossary










cost

183












consider costs


184





boats



longline (pelagic)





185













invested elsewhere

186




catches









ment



187







things



188


references

















189



















190














191















192
















193
















194














195















Dairy Australia










196

0707





references 186

appendixes



vi













vii













scallop fishery 112

viii










ix












x

















xi










xii


overview





1






2













continued

3

indicatortools







bioeconomic models


na














4













continued

5



indicatortools







na na na na

na na na














continued

6



indicatortools



















continued

7






2001-02








8

1 introduction










9










10








11








12








$

$MEY

continued

thin stocks

revenue

costs

thick stocks


13








14










15




















16





fi shers
















17








18



indicators





latent effort



value of quota


continued

19




tools





bioeconomic models


20







21








$b 2005-06

05

10

15

20


aquaculture


22












northern prawn

other fisheries

$m 10 20 30 40 50 60 70


23





exchange rates











24













14 $489m 31

pearlsabalone

25







1997 -98

1999 -2000

2001 -02

2003 -04

2005 -06





Japan

A$b 2005-06

10

05

edible

nonedible

80

60

20

40

A$kg 2005-06


yellowfin tuna

abalone

prawns

rock lobster

600

800

400

200

A$m

United States

Hong Kong China

China

1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06 -99 -2000 -02 -04 -06

26



2500

1500

2000

80

60

70

prawns














22



27




Viet Nam

New Zealand

Thailand

other




200








28



fi shery




80

90

100

110

120

130

2005-06 cL




29






30

3 the fisheries




31

4 large fisheries















32




event










33



34




kt

2

4

6

8 other

albacore

bigeye tuna


A$m 2005-06

20

40

60

80 other

albacore

bigeye tuna


1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06


35










36











37











areas




38








39








crew costs $ 121 594 (9) 141 064 (8)


fuel $ 79 099 (9) 97 741 (10)

insurance $ 25 256 (12) 20 652 (11)


packaging $ 28 145 (15) 37 841 (17)


other costs $ 76 882 (9) 84 153 (10)

total cash costs $ 536 698 (6) 577 138 (8)











40



level of latency





41








A$m 2005-06

20

ndash20

40

60







42







43








44














Fremantle

Albany

45





1

2

3

4

5 other







46









2 427 42 120 360 150 80 Source AFMA (2006l)





47

50








level of latency




tonnes tonnes



48







49













50




51



kt

2

4

6

8


50

100

150


A$m 2005-06

1995 1997 1999 2001 2003 2005 1995 1997 1999 2001 2003 2005 -96 -98 -2000 -02 -04 -06 -96 -98 -2000 -02 -04 -06







52




Hong Kong India


other other

A$m 20 40 60 kt 2 4 6 8 10








53








no




2005-06 86

54







event










55



species status







crew costs $ 264 744 (3) 220 836 (4)


fuel $ 192 010 (3) 200 209 (2)

insurance $ 37 627 (8) 35 241 (7)

interest paid $ 17 245 (23) 19 305 (24)


packaging $ 16 604 (7) 18 611 (7)


other costs $ 63 806 (12) 61 280 (12)

total cash costs $ 863 727 (3) 796 762 (3)

boat cash income $ 262 360 (12) 145 066 (20)










56






level of latency




57





costs receipts



2005-06







58







59














60




Ulladulla

Nelson Bay

Port Lincoln


Mooloolaba



high seas zone

Macquarie Island

Lord Howe Island

Norfolk Island

61




4 60

3 40

2

201 2005-06 A$mkt

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06








62











63








event



64










kt

60

20

40






65

Java





INDONESIA

Young fish move

away from spawning

grounds

Some young

fish may move

westwards


Longlining


10ordmS

20ordm

30ordm

40ordm

New South Wales

Queensland

South Australia

Victoria

Tasmania

Spawning grounds

Western Australia

Northern Territory

Port Lincoln




66




level of latency






value of quota



67





68
















69

















70






71


72










100 30

80

20 60

40 10

20

2005-06 kt A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

73
















74












75








76












77










78




biological status












continued

79















continued

80















continued

81















uncertain



continued

82















royal red prawn



continued

83





deepwater sharks













spotted warehou




84






2002-03 2003-04 2004-05




administration $ 13 764 (15) 12 714 (11) 11 996 (14)

crew costs $ 183 956 (13) 170 216 (10) 183 774 (17)


fuel $ 115 407 (11) 120 513 (11) 140 832 (14)

insurance $ 17 598 (14) 19 625 (15) 18 036 (16)

interest paid $ 14 697 (23) 13 396 (25) 11 422 (26)



other costs $ 64 900 (20) 63 581 (18) 76 982 (32)

total cash costs $ 605 018 (11) 579 352 (9) 618 997 (16)

boat cash income $ 15 594 (163) 24 923 (84) 9 476 (174)










85





2003-04 2004-05




administration $ 6 501 (27) 9 014 (16)

bait $ 3 802 (63) 8 393 (44)

crew costs $ 97 372 (25) 120 021 (14)


fuel $ 20 795 (22) 30 329 (16)

insurance $ 8 759 (32) 12 557 (18)

interest paid $ 9 820 (53) 15 810 (41)

leasing $ 31 802 (41) 39 790 (34)



other costs $ 17 194 (18) 19 888 (7)

total cash costs $ 243 008 (24) 314 310 (13)

boat cash income $ 38 889 (29) 29 355 (37)









86




level of latency



87













elephantfish oreo






20 40 60 80 100



88







increasing effort




20 60

15 40

10

20 5

2005-06 2005-06A$m A$m

ndash20 ndash5

1996 1998 2000 2002 2004 1998 2000 2002 2004 -97 -99 -01 -03 -05 -99 -01 -03 -05

89



100

80

60

40

20

lsquo000 hours




25

50

75

0 50 250200100 150

cum

ulat

ive o

wne

rshi

p





90









91










92







93






94
















95





96

20

15

10

05

25

30

35

20

15

10

05

fig 35

kt





fig 36

40


30

20

10

1999 -2000

2001 -02

2003 -04

2005 -06

$m 2005-06

1999 -2000

2001 -02

2003 -04

2005 -06



fig 37

kt



1999 2001 2003 2005 -2000 -02 -04 -06

fig 38


20

15

10

5 2005-06

$m


97

1999 2001 2003 2005 -2000 -02 -04 -06








tonnes

800

600

400

200

15

10

5

2005-06 A$m

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06

98











99






event













100













101



species status



biological status







102






2002-03 2003-04




administration $ 13 663 (23) 14 880 (24)

labour costs $ 178 033 (5) 158 316 (7)


fuel $ 170 496 (5) 169 092 (4)

insurance $ 17 712 (7) 19 156 (5)

interest paid $ 17 739 (24) 24 517 (21)


packaging $ 10 642 (15) 10 891 (21)


other costs $ 32 408 (12) 30 349 (17)

total cash costs $ 547 793 (5) 527 155 (5)

boat cash income $ 107 765 (36) 95 397 (46)










103




latent effort




nights fished a



1993 1994

8 525 9 244

30 250 30 250

72 69


1999 10 904 13 570 20 2000 9 979 13 570 26

net return 2001 10 158 13 570 25


2002 2003 2004 2005 2006

9 641 9 000 7 041 5 966 3 863

13 532 13 486 13 454 13 042

9 197 b

29 33 48 54 58


104





A$m 2005-06

10

20

30


costs

1994 1997 2000 2003 -96 -96 -01 -04








105







106

5 small fisheries















107








108





109






levels








110




111



30

20

10

kt A$m 2005-06

15

10

5

1996 -97

1999 -2000

2002 -03

2005 -06

1996 -97

1999 -2000

2002 -03

2005 -06









112











113






squid receipts $ 23 653 (39) 40 422 (16)





bait $ 0 (0) 422 (86)

crew costs $ 91 440 (11) 105 892 (12)

food $ 5 548 (17) 4 545 (13)


fuel $ 25 892 (13) 23 074 (11)

insurance $ 8 316 (20) 20 130 (35)

interest paid $ 5 309 (37) 2 943 (30)



other costs $ 25 187 (61) 19 572 (44)












114



level of latency









115

2

4

6

8







2005-06 A$m

ndash2





116


Coral Sea fishery

















117





118














119




120






variable








121






122













123





124












125






126





uncertain

uncertain







127











128




15

tonnes

80

60

40

20

10

05

2005-06 A$m

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 -02 -03 -04 -05 -06 -02 -03 -04 -05 -06

129












130



management costs





131


skipjack fishery











132


133







year event









Source AFMA (2005b)

134



species status




skipjack fishery


1997 4 1 1998 4 3 1999 7 1 2000 7 4 2001 4 4 2002 2 4 Source AFMA ( 2004e)

135












136






137








5 000 100

4 000 1 000

3 500 100

2 500 1 000

3 500 100

2 500 1 000







138






139












140






141



1500

1000

500

tonnes

30

25

20

15

10

05

A$m 2005-06

1999 2001 2003 2005 1999 2001 2003 2005 -2000 -02 -04 -06 -2000 -02 -04 -06



imports exports

40

30

20

10

50

2005-06 A$m

1997 1999 2001 2003 2005 -98 -2000 -02 -04 -06


142








2

1

kt

southern squid jig





143













144


















145




level of latency











146




3 costs revenue

net economic

2 returns

1

2005-06 A$m

ndash1




management costs




147
















148






-06




catch lt500 tonnes


stock is abundant)

TAC of 400 tonnes


TAC of 200 tonnes

catch ge500 tonnes




149




150













151



tonnes

200

250

150

100

50

other bugs

20

25

15

10

05

other bugs

A$m 2005-06

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 -01 -02 -03 -04 -05 -01 -02 -03 -04 -05











152










T $070 million




153





20

15

10

05

kt 1999 2001 2003 2005 -2000 -02 -04 -06


30

20


10

A$m 2005-06

1999 2001 2003 2005 -2000 -02 -04 -06

154












155





Ocean








156













bait $ 74 410 (13)

crew costs $ 229 880 (13)


fuel $ 104 520 (14)

insurance $ 17 200 (14)


leasing $ 17 480 (38)










capital (0)






157




latent effort






158










159




160






Cairns










continued

161













Torres Strait prawn



162












163



total minimum








164



employment





fishery






GHT sector




165



employment







Australia 11 874 8 298 606 01


166





167








commercial fishing




commercial fishing



business services




168







commercial fishing





fishing


health services



commercial fishing



169





commercial fishing


5000 6000

industry and rank




commercial fishing




400 2000

industry and rank

health services

business services


education

commercial fishing




1000 3000 4000




commercial fishing


Devonport Tasmania


400200 800 1000

170





commercial fishing









commercial fishing





commercial fishing


171





commercial fishing



4000 6000 80000 2000


health services


commercial fishing



800600 1000 0 400200

food retailing

health services



commercial fishing





172





commercial fishing



commercial fishing


400 1000

industry and rank


defence


metal products

commercial fishing




800400 2000




commercial fishing




400200 1000 1200

173




commercial fishing


business services



600 8000 200 400


agriculture





0


metal products


food retailing

commercial fishing






174









400 500 6000 100 200 300


agriculture


commercial fishing



200150 2500 100 50


business services



commercial fishing






175









food retailing

education



commercial fishing


1000 1200


600300 400 500 7000 200100

food retailing

agriculture


education

commercial fishing






176

A appendix




177




NR net returns











178










179


comparing estimates



(0 06 x $100 000 2

+ ( 125 000 2) 0 06 x $ ) = $ 9605


($9605$25 000) x 100 = 38


180

B appendix

abbreviations


























181

















182


glossary










cost

183












consider costs


184





boats



longline (pelagic)





185













invested elsewhere

186




catches









ment



187







things



188


references

















189



















190














191















192
















193
















194














195















Dairy Australia










196

0707

fishery economic status report

Documents