Rent Loss in the Western and Central Pacific Tuna Fisheries

1
Rent Loss in the Western and Central Pacific Tuna
Fisheries

• Presented by
• Tom Kompas
• Crawford School of Economics and Government
• Australian National University
• Email tom.kompas_at_anu.edu.au
• Co-authors
• R. Quentin Grafton
• Australian National University
• Nhu Che
• Australian Bureau of Agricultural Resource
  Economics

2
Western Central Pacific Tuna

• Four key species (skipjack, yellowfin, bigeye and
  albacore) and multiple fleets.
• One of worlds biggest fisheries 2.2 million
  metric tonnes harvest/year with gross value of
  production of some US 3 billion.
• Evidence of biological overfishing of bigeye.
• Evidence that fishery is being mismanaged with
  clear economic overfishing of bigeye and
  yellowfin tuna.

3
Harvests 1960-2006
4
Rent Drain Gain

• Current targets MSY (BAS? bigeye?)
• Preferred target MEY
• Advantages of MEY
• Maximum profits regardless of prices and costs.
• Conservationist stocks larger than stocks at
  MSY.
• Drawback of MEY
• Reduce current harvest to build stocks to MEY
• A problem for the WCPO fishery? (Price
  elasticity.)
• MEY solutions are obtained through a finite
  difference algorithm, using parallel processing
  software allowing for a nonlinear stock effect.

5
Data Parameter Sources

• Secretariat of the Pacific Community (SPC), 2007
  (Database).
• Bertignac, Campbell, Hampton and Hand, 2000.
• Reid et all 2003a and b.
• Hampton, Langley, Harley, Kleiber, Takeuchi and
  M. Ichinokawa, 2005 .
• Reid, Bertignac and Hampton 2006.

6
Dynamic BMEY WCP bigeye tuna
7
Dynamic BMEY WCP yellowfin tuna
8
Net Present Value BMEY and BAU
9
Results (1)

• Results indicate that effort at BMEY target in
  purse seine, frozen longline and fresh longline
  fleets would be 46, 55 and 60 of 2006 effort
  levels (and slightly less in transition).
• BMEY would increase profits in the fishery
  relative to BAU by roughly 45 per cent a year, or
  an average of 108 million/year.

10
Results (2)

• BMEY would generate a net present value of 5.4
  billion (50 years at 5 discount rate) at least
  3.4 billion more than Business as Usual.
• Dynamic BMEY coupled with appropriate
  instruments/incentives enforceable harvest
  limits will generate a much greater economic
  surplus and sustainable tuna fisheries in WCPO.