Slide 1

Max NielsenFOI, University of Copenhagen, Denmark

Ola FlaatenUniversity of Tromso, Norway

Staffan WaldoAgriFood Economics Centre, department of Economics, SLU, Sweden.

Paper presented at the 19th EAFE Conference, Malta, 6-8 July 2009

Socio-economic return in Nordic fisheries

Slide 2

• Purpose

• Definitions

• Model

• Cases

• The size of the socio-economic return• Current• Maximum

• Conclusions

Outline

Slide 3

Purpose

Study made for the Nordic Council and presented for the Nordic fisheries Ministers at the Faroe Islands in 2006

To focus on the Nordic fisheries in a socio-economic perspective

The purpose of fisheries management• Socio-economic return• Operational profit• Regional policies – populate remote areas and employment• Fleet structure – coastal fisheries

Focus on the socio-economic return

Slide 4

Definitions

Socio-economic return of fisheries:

A net-surplus which on a given time is left for the remuneration of capital and labour beyond what is achieved in other businesses.

Calculation:Turnover – costs (excluding for labour and capital)– costs of labour in alternative use– costs of capital in alternative useSocio-economic return

Maximum socio-economic return:

The annual maximum remuneration which in the long run is left after payment of capital and labour beyond what is achieved in other businesses

Slide 5

00

T , C

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Current and maximum socio-economic return

Slide 6

00

T

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Stock A

Stock B

Stock C

ao

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Current and maximum socio-economic return in multi-species fisheries

Biology:• Based on ICES ACFM advise – SSB and fishing mortality• MSY determined by assumption as the SSB which gives the

largest possible sustained yield • Fishing mortality assumed sustainable and includes risk

through recruitment -> shift curve up/down

Slide 7

Model

Socio-economic return:

Maximum socio-economic return: given DS1 = 225, 300

Economic model Biological model

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Slide 8

Cases

Individual transferable quotas in the Icelandic trawler fishery. Individual non-transferable quotas in the Norwegian coastal fishery. Days-at-sea regulation of pair-trawler fishery at the Faroe Islands. Rations regulated pelagic fishery in Sweden. Licence regulated mussel fishery in Denmark.

Slide 9

Cases Iceland Norway Faroe

IslandsSweden Denmark

Employment 2.100 1.870 322 344 75No. of boats 76 1.145 29 57 63Insurance value (avr. Mio. DKK) 35 0,3 12 19 2No. of days-at-sea (average) 267 171 244 203 203Share of total landing value (%) 42 9 33 46 4Landing value 2001-03 (mio. DKK) 2.543 793 302 387 133Species Cod

RedfishCodHaddock

SaitheCod

Herring Sprat

Blue mussel

Slide 10

Size of the current socio-economic return

Iceland Norway FaroeIslands

Sweden Denmark

Million. DKK 765 -176 84 12 80Share of catch value 30% -22% 28% 3% 60%

Slide 11

The maximum socio-economic return

Methods: Bio-economic model No. of days at sea determined

Assumptions:1. Unchanged fleet structure and unchanged fishing pattern. 2. Fishing mortality today is in accordance with the precautio-

nary principle. 3. The state of stocks for stocks without biological information

follow the state of the stocks for which information is available.

4. The maximum capacity utilisation is 300/225 days.

Slide 12

The maximum socio-economic return

The socio-economic return can be over-estimated in Iceland, the Faroe Islands and Norway The socio-economic return can be increased in all cases. The relative low maximum socio-economic return in Norway reveal structural relations related to regional priorities

Iceland Norway FaroeIslands

Sweden Denmark

Increase (mio. DKK) 768 343 58 198 19Maximum socio-economic return (mio. DKK) 1.533 167 142 210 99Share of catch value 60% 21% 47% 53% 74%

Slide 13

The maximum socio-economic return

Fleet adjustment – reduction in no. of vessels:

Reduction in no. of vessels on 50-77%

Iceland Norway FaroeIslands

Sweden Denmark

In 2003 76 1.145 29 57 66Reduction – stock and boats -46 -677 -12 -35 -18Reduction – 300/225 days-at-sea per boat -3 -201 -3 -7 -15Total reduction -49 -878 -15 -42 -33Adjusted fleet 27 267 14 15 33

Slide 14

Conclusions

Fisheries have socio-economic potential

The size of the socio-economic return:

Positive of varying degree in 3 of 5 cases Can increase in all casesImproved fisheries management is the key – biologically and economically