Abstract ▼ AI-Helper

Fish stocks are one of the most important resources in terms of main source of supplying protein for humans. Publics focused on catching fish and ignored need of conservation for sustainability of fisheries resources. Overexploitation have resulted in environmental destruction, stock depletion and e...

Fish stocks are one of the most important resources in terms of main source of supplying protein for humans. Publics focused on catching fish and ignored need of conservation for sustainability of fisheries resources. Overexploitation have resulted in environmental destruction, stock depletion and economic losses in all around the world. These issues also apply to marine capture fishery in the sense that marine capture has been worsened in Korea. To solve the problems, a major concern of regulators is how to give incentives for fishermen not to overexploit fish, but management fish stocks well. Nowadays, special attentions are paid to right-based management. Right-based management can create incentives to change participant’s behaviors by setting some bundle of property rights for sustainability of fishing activity which differ from command and control fisheries management. Prior to examining property rights and ITQs(Individual Transferable Quotas) that belongs to right-based management, this paper begins by providing background information on the tragedy of commons and external diseconomy under open access fishery to show the need of fishery management. Next, property right can be classified by regime or types. Also, property right can be diverse according to the combinations of characteristic of right. In fisheries sector, especially, ITQs that authorize fishermen to catch certain amount(portion) of fish and allow trading their quotas are a sort of harvest right(the use right). ITQs have been proven to significantly reduce overcapitalized fishing effort and increase incentives for owners to invest in stewardship of the fishery resource. The time for studying ITQs might be right because TAC regime in Korea has been adopted, and more fisheries have been brought under the regime as overfishing is being curtailed under TAC system. This paper focus primarily on estimating economic optimum under two simulation models in where fishermen can trade their quotas and simulating how ITQs may implicitly affect economic efficiency in Red Snow Crab Trab fishery prior to its actual implementation of ITQs. The first static economic model estimates potential net profits in ITQs with calculated harvest functions and compares net profits earned from different fisheries management; status quo fisheries management, open access and ITQs. Simulation is applied to a sample of Red Snow Crab Pot Society in Kyeong Buk Province in Korea. This approach estimates derived supply functions for quotas to simulate the expected equilibrium market price for quotas and potential quasi-rents. This model indicates that potential profits will be greater from quota trade than status quo policy. The results of two empirical estimations in this paper will show that ITQs are a powerful management tool in the aspect of increasing fisherman's potential net profits. ITQs are not a panacea to all the fisheries that have faced problems. However, it is clear to see that ITQs are able to improve sustainability of fishery in a domestic level considered of ITQs operating countries. Particularly in Korean fisheries, it is necessary to look for a new way of managing fisheries, ITQs, to address above-mentioned problems such as overfishing, overcapacity and the rent dissipation due to stock depletion in the process of establishment of future fishery management policy.