Rights Based Fishing: Use Rights versus Property Rights to Fish

Abstract

The basic economic problem of commercial fisheries can be seen as the absence of property rights to the fish stocks. There are, however, both practical and principal obstacles to applying that solution. Instead, the preferable arrangement appears to be stock control by public agencies, combined with exclusive use rights granted, leased or sold to the fishing industry in order to achieve economic efficiency. Incentives to establish such rights can be found both in government circles and in the industry. Both have a vital role to play; plans to establish use rights such as ITQs have run aground on more than one occasion because of opposition from the industry. Use rights can be seen as a tool for government agencies to achieve economic efficiency in the industry. If desired, these gains can be distributed over a wider public through user fees of some kind. There are few examples, however, of substantial user fees, and the industry has been successful in getting such schemes abolished when they have been put into effect. The experience of Russia and, in particular, Estonia is discussed. The absence of user fees can be explained by the need to obtain support for use right schemes from the industry, and the windfall gains from gratis use rights are vehicles for this. Norway and Iceland are two countries which have put in place use rights, but they have done so in different ways. Iceland has an ITQ system while Norway has fishing concessions combined with individual vessel quotas. Some success appears to have been achieved in both countries with these systems.