| INTERVIEW
TRANSCRIPT - Michael Weber
After the second world war there was such a drive on to expand fishing that fleets expanded even more rapidly than catches. They would double, and then double again and for a long time they were encouraged by increasing catches, but even after the catches started falling off, they kept going. And I compare it, somewhat, to the arms race where we’ve overbuilt and we have all these vessels and the big problem now is what do we do. An New England d it’s really kind of a disarmament for the fish. And we’re going to have as tough a time figuring out what to do with all these vessels. And it continues to happen. It happens fishery by fishery. It’s what one person called the pathology of commercial fisheries. They develop in a certain way and people see they can make a little bit of money and you start seeing boats filled.
The long term trends in demand for seafood have really lead to fish being moved from developing countries to developed countries. If you look at many of the fisheries that are in real trouble now you’ll find very often that the markets are in developed countries. And there are any number of examples of that. If you are eating, looking at shrimp, most of the shrimp is not being consumed where it is grown or it’s being caught, it is being consumed in Japan, it’s being consumed in the United States, or it’s being consumed in Western Europe. And those same countries come up time and time again. There’s been a net shift of protein from the developing world to the developed world.
I think there is one key reason for there being an increased demand and that is marketing. If you look at government programs, or private programs over the last five decades, there have been millions and millions of dollars spent that have tried to encourage the consumption of seafood. And generally, people forget about this. They think demand just grows in and of itself and people just decide to eat seafood. But this is a result of marketing. We eat what we are told to eat. And, that’s exactly what’s been going on. There’s no mystery why the demand is going up where it’s going.
Let me give you one example. The consumption of shrimp has gone up several times over in the United States. And that’s not because people have just decided to eat more shrimp. It’s because shrimp was being marketed very, very heavily. If you look at salmon consumption in the United States, what’s happened is there has been such a dramatic increase in farmed salmon, they’ve had to find some way of selling this stuff. So, they aren’t just sitting there waiting for people to buy salmon, they are out there marketing it any way that they can. And it is one of the most overlooked aspects of fisheries is that the aspect of marketing. And no one talks about controlling the marketing. We always talk about controlling the fishermen, but we never talk about controlling the marketing.
Japan is the number one importer, net importer, of seafood. The United States is number two. And, after that, Western Europe is another major importer. But the United States and Japan are really the top net importers. We’ve been a net importer of seafood since the early 1960’s. And it continues to grow. We run a trade deficit in fish, if you will, of four to five billion dollars a year.
One thing that happens is that price can go up for any number of reasons. And really, price is what attracts additional investment into fisheries. If you just take the example, for instance, of bluefin tuna in the Atlantic, what has attracted so much fishing effort in the Western Atlantic, is the high price that’s paid in Japan for bluefin tuna. And that is partly due to demand, but that is also partly due to there being very limited supplies. So one of the things that happens in fisheries that makes economics work against conservation is that as fish become scarcer, the price goes up. As the price goes up, more people are attracted into catching those fish. And in the case of bluefin tuna, a fisherman may go out in a 25 foot boat, and have a chance of landing a thirty thousand dollar fish. And I compare it very much to gambling. You don’t have to make a lot of money every day or every week if you know two or three times during the year, you are going to be able to go out there and get a ten, twenty thousand dollar fish. It is one of the problems of working on fisheries issues is there is a lot of blaming that goes on. But if you look at just the economic side of it, fishermen are responding, rationally, to an incentive to go out catch fish. The higher the price, who wouldn’t go out and catch fish. And I often compare it to the kind of behavior where an individual decision may be rational, but the outcome for society is irrational, to what happens when people are on a freeway and they see an accident off to the left, and each person rationally says, ‘I think I’ll look at that’ and then before you know it, you have a traffic jam. There is a lot of rational behavior that goes on. Similarly, consumers have to look at their own behaviors. And I think people are increasingly looking at what they are consuming and starting to tie, for instance, their consumption of shrimp to what may be happening in mangroves in Indonesia. But that’s very new. Because generally speaking, we don’t think about where our food comes from. So there is that level of responsibility among consumers. And then, each other interest group has it’s own special interest. A government agency certainly can have an interest in conservation, and often times people do. But government agencies also have a certain amount of interest in continuing to grow, and just like any kind of business. To me, some of the silent partners in fisheries are the processors and marketers. And they have a profound influence on what we eat.
I think one of the misconceptions is that fishermen are bad people and they are intentionally driving stocks down. But they are behaving in a perfectly rational fashion as any of us would behave in another situation. I really don’t look at it as fishermen being bad people. They are behaving in a way that the economics system encourages them to behave. Having said that, though, they do have a responsibility for responding to an incentive and not thinking whether or not they should be responding in the way that they are. And that is the other part of the equation: That we have a responsibility for our actions and just saying well, "the economy made me do it," just won’t cut it.
In most fisheries, anyone who wants to can come and start fishing. And as a result of that, when someone finds a new fishery, they start making money quickly. And people find out about that. And because it’s open, people just keep pouring into the fishery. And as a result, people pour in until there are far more people out there fishing than really the fishery can support. And it’s really that simple. It’s just that everybody has access.
Over fishing happens in a very common pattern. Fisheries develop in a very common pattern. There’s really nothing mysterious about it. It’s not as if we don’t know what’s going to happen in a fishery. In an open access fishery, once people start making money — the people who are first there start making money — that attracts more and more people. And as more and more people come in, the catches continue going up until they start leveling off. And everybody’s individual catches start getting smaller and smaller. What happens is if I’m going to make as much money as I possibly can in a fishery, that means I have to catch the fish before anybody else does. And if I am going to do that with all these people coming in, I have to go get stronger nets. I have to get a more powerful engine. I have to get technology. And so I start investing in this so I can get the edge against the other fishermen. By the time I do that, my mortgage payments are going up because of this expensive equipment, and the catches continue to go down. And so what happens, there is, set up, what is called the race for the fish. And the whole idea is that I have to compete against that person, that other fisherman, in order to catch the fish before he does. And there is no value to leaving the fish in the water. Because if I leave fish in the water so I can catch it later on when it’s larger, or after it’s had a chance to reproduce, I have no assurance that I am going to catch that fish. Somebody else may catch that fish. So people are caught. They really just are caught into having to go out and behave very rationally and fish as hard as they can. invest, invest, invest. And it’s generally only after we’ve gotten to the point where the catches start falling off, that people start saying, " we should really try to behave ourselves." And that’s when what we know as fisheries management comes in and people start trying to set rules down. By that time, the fishery very often is in decline and it’s getting harder and harder for people to make a living. And the worst situation to have, is a situation where a group people are struggling to make a living and then to try to talk to them about setting something aside for the future. It’s just almost impossible. So the dynamic — it’s pathological. And I’m not using that term to say that people are sick in mind or whatever, it’s just the way that open access works.
I worked in the national Marine Fishery Service for Bill Fox when he was the director. I remember that very often the staff would come in and present a set of regulations to try and control a fishery to avoid overfishing. And one of the first questions that Bill would ask would be, "how are they going to get around this?" Because you know as soon as this is out on the street, they are going to be thinking about how they can factor this into their fishing. One of my favorite examples of how, once again, people respond rationally to restrictions, to efforts to make them more inefficient, is in the surf clam fishery on the east coast where they limited the number of boats. But what happened after that? Fishermen went out and cut their boats in half and added new sections in the middle of their boats to make them larger. And that is just an extreme example of how people respond quite rationally to restrictions. And so, one of the problems that traditional fishery management always faces is, it’s playing a game of catch up. All the time. And from an economic point of view is engaged in the rational behavior of making people less efficient. And think of it in terms of a consumer. A consumer is having to pay a higher price because we are having to make fishermen more inefficient. So, from a consumer’s point of view, it really doesn’t make any sense.
Absolutely. When the fishery in New England started being restricted again in the 1990’s, the idea of buyouts was brought up. And, at the time, everyone treated this almost as a completely new idea, but I went back and did research and found that there had been very similar programs several times in the New England groundfish fishery since the 1950’s. And they start off with good intentions, but then they become part of a political effort to placate a group of constituents. And they become beset by having to meet many different agendas. They’re almost always under-funded. And, so, most of them have failed to really meet the target. From the point of view of a taxpayer, you have to raise the question of why am I putting money in a fishery, to help people remain in the fishery, or as it has happened in New England, or in other buyouts, someone may take that buy out money and go and buy another vessel and go and get into another fishery. And, so, the system is very leaky. And once you start looking at what the collateral affects are, you find out that you really aren’t reducing the amount of effort out there. And about the only way you can do it is sink the vessels. That’s why we’ll get into things like closed access. But, the other thing about buy outs, is that buy outs happen where you have a powerful congressional delegation. In New England there’ s been a buy out and that’s because there’s a powerful congressional delegation. There’s been something of a buy out in the Pacific Northwest in salmon and similarly you have a fairly influential congressional delegation. In Alaska, you had an enormous buy out of factory trawlers, because you have an extraordinarily powerful congressional delegation. So what’s happening in the Gulf of Mexico, what’s happening on the California coast. There’s been very little in the southeast, off of South Carolina, Georgia and Florida. There’s really been very little buy out there. And it’s not because there isn’t a need, it’s because there isn’t the political juice. And so, to me, it’s rational once again, from that point of view of that group of people. But it’s kind of open access for funding. And the folks with the most power get in there and they get the funding. And there’s really very little accountability. I think we’re really at another one of those historic moments in history where we can look back and be able to say whether or not we choked. And we didn’t do what we really needed to do. And I’m afraid that’s the way things are going. But you are absolutely right. This is a pattern that repeats itself and repeats itself. And, once again, the efforts are very well intentioned. I’m not taking that away from anyone. But they don’t work.
One of the perverse aspects of economics, is that there is an incentive for fishermen to catch the very last fish. And that happens because as the fish becomes scarcer, the price goes up. So, even if it costs me more to go and try and find the last fish, I’m getting paid more. And if you go and look at any number of fisheries and you plot the landings against the price, you’ll very, very often see the price line go like this, and the landings line go like that. And basically, the revenues that are coming in to fishermen, are right in the middle. And so, there’s no signal there to say, to make it more and more difficult for someone to catch the fish. There’s always that incentive to go out and catch Atlantic bluefin tuna. And because of their biology, it’s very difficult to drive fish to biological extinction, but it is quite possible to drive them to commercial extinction. And if we’re talking about fisheries as being not just fish, but people engaged in fishing and the communities that depend on that, then we have to realize that we have to back off, well before we get to commercial extinction, because it’s not just enough to maintain just enough fish to continue fishing. The challenge is to keep a right balance between the number of people that are fishing and the number of fish that are out there. That is the big challenge, but unfortunately, in this instance, economics sends a perverse incentive to keep fishing because that last fish is going to be even more valuable than the fish before.
Technological innovations have been one of the great uncontrolled factors as well in fisheries. And if you look at the changes in fishing gear in the New England ground fish fishery, going back to the turn of the century: from line trawls, long lines of hooks, to otter trawls, nets, to the use of diesel engines, then gasoline engines, then the conversion to steel hulls, then larger and larger vessels. Technology has made a profound difference in the ability of people to go out and catch fish. And I would say there is just about no place for fish to hide now. And it really is just staggering the ability of people to go out and fish and basically do it in a predictable fashion. But equally, there are other parts of technology that have influenced fisheries. When I talk about technology, I’m not just thinking about what technology our fishermen are using, I’m looking at processing and delivery. And all of that. It’s just made a profound effect. And you can see, often times people talk about the serial depletion of species. There is also a serial development of technology that drives what people are fishing for. And that has had a greatly underestimated effect on fisheries.
The gold standard for fisheries management and for goals in fisheries is maximum sustainable yield. And, one of the problems with maximum sustainable yield is we that always emphasize maximum. And so, if you look at maximum sustainable yield, generally, people try to say the maximum sustainable yield this year is so. When it’s a matter of fact it’s going to be different from year to year to year. So you’re really talking about averages. And what often happens is that, maximum sustainable yield is overestimated. That means we are always taking more than the fish population is really getting us. And if we keep doing that year after year after year, which is what is exactly has happened, then we start driving the fish population down, and to me, you’ve hit on one of the really pernicious aspects of the whole way we view fisheries and we have since, I would say, the second World War, is that the highest and best use of fish populations is to take as much as we can possibly take out of them. And, the result of that is that we try and get everything out of them that we possibly can for commercial fisheries and everything we can for recreational fisheries, and everything that we can for various markets and gears and it all adds up to more than is actually out there and so to me, the big fallacy is that we should be aiming at the maximum because inevitably we tip over what the maximum is. If you look at, or talk to someone like Sydney Holt who is one of the founders of maximum sustainable yield, he will now talk to you about almost nothing except its limitations. It looks very good in the textbook and it’s very good for helping students understand the basics of populations. But you would never drive a car based on MSY as a design. It’s just not very rigorous.
Part of the reason that there is more profit in taking fewer fish and over the long term. One reason is that, the fewer fish that you are taking out, the smaller the supply. And so that’s going to maintain the price at a level such that you can be making the same amount of money on less fish than if you flood the market and drive the price down. And that’s usually what happens. We flood the market, the price goes down, so people have to keep fishing harder and harder. And you can look at any number of fisheries where the price has gone up for a variety of reasons that are well managed fisheries. And fishermen are making a better living, simply by catching fewer fish. One of the most interesting management regimes I am aware of is in Hawaii and that is for the ground fish fishery in Hawaii. And what the people who were involved in developing that management plan decided is that they didn’t want maximum sustainable yield. They wanted what they called, I believe, sufficiency. They wanted to make enough money so that they could support their families. To me that was a revolutionary approach to fisheries. You would never hear an economist say that’s the right thing to do. but here were people saying our interest is in the long term. We don’t need to be rich people, we just want to be comfortable. So, I don’t know what’s happened to that fishery, but to me it was an example of how different, or how extreme our normal model is, which is to get everything that we can out of it. But the reason that people don’t catch less, is, once again, the race for the fish. Because I can’t leave the fish in the water because somebody may catch it and it won’t be there for me to catch tomorrow. So, it’s really back to that pathology again that prevents us from, basically fishermen, from having a comfortable living.
Fleets in Europe would not be nearly the size that they are without government subsidies. The same is true of the fleets in Japan, the fleets in China. They are inconceivable without government subsidies.
One of the best examples of how subsidies allow fisheries to improve their technology and increase their catching power is in the Alaska ground fish fishery where in the United States fleet in the 1980’s there were millions and millions of dollars invested in that fishery — a lot of it of government funds. Until recently, we had seventy very large factory trawlers — far more than were actually needed to catch all the fish. That would not have happened without government subsidy programs that were well intentioned, but like so much else in fisheries, we overshot.
Generally, governments don’t coordinate their fisheries management programs with their fisheries development programs. Indeed, in the National Marine Fisheries Service, there was almost no coordination until the 1990’s. So on the one hand, the managers would be trying to keep the lid on the size of the fleet, and on the other hand, there would be loan guarantees being met allowing people to build additional vessels.
One example of a subsidy that allows someone to continue fishing long after it would otherwise be profitable is fuel. Many countries subsidize the fuel costs for fishing. And as long as I can cut my fuel cost maybe by 25%, I will go and fish another day or another couple of hours. And that happens in the United States, it happens all over the world. If I can reduce my costs by whatever means, if that means by the government giving me money, it means that I can continue fishing longer.
On land, if someone is going to go into a national forest and cut a tree, they have to pay a stumpage fee. But if someone wants to go out and catch fish, there is really no cost associated for that particular fish. And if a fisherman goes out and catches it, they immediately possess it — for free. And if I try to go on that fisherman’s vessel and walk off with that fish, I’ll be arrested because all of a sudden he owns that fish. And so, that’s for free. Society, at that point, has gotten absolutely nothing.
In a very general way, I would say that fleets are two to three times the size that they need to be. And they may be many times larger than they need to be in one fishery and much less so in another.
A quota system is fine as long as you can enforce it and you can prevent other problems that arise when you try to enforce a quota system. One of the things that often happens with a quota system if a skipper is rushing to catch as much as possible before the quota is met is the fishermen will start tossing over fish that are less valuable than the fish that he is catching at that point — something called "high-grading." So that is one of the problems that occurs when people are in a rush to try to beat the quota. An extreme example of the irrationality that quotas can produce occurred for many years in the halibut fishery in Alaska where there would be two twenty four hour seasons and about the time that the season was going to open, a couple of thousand vessels would line up. And the shot would go off and they would go out and try and catch as much as they can in a twenty four hour period. And there were deaths as a result of that. There was lost fishing gear that continued catching fish and what we as consumers got was a lot of frozen halibut because the processors couldn’t handle it. So, quotas like that, in an open access fishery often times create more problems than they solve.
If you look at landings of fish over the last thirty or forty years around the world, you’ll see that the waters of the Atlantic were fished out first. And they were fished out both by vessels from Europe and North America, but also vessels from Japan, Taiwan, Korea. The vessels then started moving into the Pacific Ocean and started fishing very, very heavily in the Pacific Ocean, bringing more and more pressure to bear. And there are still too many vessels. There are far too many vessels to catch what’s available in the Pacific. So you’re starting to see various fleets — like Japan and Spain and other fleets, moving into the Indian Ocean. And so the pattern that we see globally is a pattern that happens in individual fisheries as well, or in areas off of individual countries. The pressure from distant water fleets really isn’t relaxing. At all. And the Spanish, for instance, are continuing to build vessels. And, the European Union refuses to prevent them from exporting their problems around the world. Which is exactly what’s happening now.
What happens when a country joins an international organization to manage fisheries is that the vessels that fly their flag have to obey the rules of that organization. What often happens though, is that a country may join a particular organization but then its vessel owners will stop flying the flag of that country and go and register in another country that is not a member of that organization. So it’s just a way of getting around having to play by the rules. And it’s a very prevalent problem. It’s so prevalent that the United Nations actually convened a series of meetings to develop a treaty to prevent the movement of vessels to flags of convenience. The treaty was negotiated. It’s been signed by many countries, but still countries are flying the flags of convenience because they simply want to get around the rules.
The fleets in the European Union have had a very serious impact on artisenal fleets and fisheries in West Africa, for instance and really have had a devastating impact there. There have been problems that have been caused by distant water fleets. Shrimp trawlers, for instance, in Indonesian waters — going in and "hoovering" up fisheries that are artisenal and small scale fishermen there depended upon. So you see less of that now, because people are watching more. But it’s still the case that it persists and sometimes the governments of countries whose artisenal fishermen are going to suffer are the very ones who sell those fishermen out because economically speaking, it makes more sense for them to get the hard currency from a European Union country that they can then use to improve the lot of their population generally and the sacrifice that they make of small scale fishermen is marginal in that kind of very cold economic view of things. So, there’ s a certain amount of economic calculation or rationale to it, but the impacts can be devastating.
One important tool for improving the management of fisheries are Individual Transferable Quotas. They are simply a tool. They can’t be used in every fishery. They shouldn’t be used in every fishery. But they are a tool that can make a real difference in some fisheries. And the controversy over individual transferable quotas has been going for decades and it seems to get hotter and hotter and hotter. And most of it is theoretical. And I know all the theories. I’ve read the theories. I’ve read the pros and the cons. But what I was interested in finding out, is how have they actually performed. And if you look at the three Individual Transferable Quotas in the United States, there hasn’t been massive consolidation by large corporations. That’s not happened at all. In the case of the halibut fishery, what has happened is you no longer have a race for the fish that puts a thousand boats or more on the water at the same time to try and take the fish in twenty four hours. As a consumer it means that, in California, I can get fresh halibut, which I couldn’t get before, and fishermen are getting paid more for the fish that they catch, because that fish is fresh. It’s no longer being frozen. I really don’t care whether stewardship is being generated. Some places there is, maybe some places there isn’t. The important thing is to look at the fisheries and you can see, that say for instance in the surf clam fishery, the number of vessels, in that fishery has decreased. The number of vessels have decreased in the halibut sable fish fishery as well. The fishermen who are remaining are making a better living. To me, I’m wondering what’s wrong with this picture. What can be so wrong about fishermen making a decent living? And many of the criticisms that have been leveled at Individual Transferable Quotas need to be addressed. And they can be addressed in the design of Individual Transferable Quotas. The other really important aspect of this is that on the one hand many people say the most important problem we have is too many vessels. We just have too many vessels out there. So, my question is, how are we going to finance getting those vessels out? There isn’t enough money, there isn’t’ enough political, will and not enough money in the treasury to buy all those vessels out that we need to buy. And I have to question whether or not tax payers should be doing that across the board. To me, ITQ’s provide a way for self financing reduction of a fleet in a fishery so that the fishermen who remain are in better shape. And to me, that is, apart from conservation, a perfectly laudable goal.
In a fishery that is open access, there are generally far more vessels than necessary to take the amount of fish out there and as a result of that, everyone is operating at a very marginal level, financially. In an ITQ fishery, what I can do is I am given a share of the quota. Some percentage share. If I want to get out of the fishery, I can sell that share. So I can leave the fishery. And that’s exactly what happens. People sell their shares off, the rent their shares, they lease their shares. And the fishermen who are in the fishery who weren’t catching very much because they were having to race against everyone else, can actually buy more share or rent more share and that will make them economically sounder. And so, inevitably what happens is that the fleet reduces. One of the arguments that is made against ITQ’s is that there is a reduction in employment as a result of that. Crew members lose jobs and so on and so forth. And it’s true. There are far fewer fishermen crew members in the halibut sable fish fishery, but all of those crew members fished two days a year before the ITQ program came into effect. Right now fishermen and crew members have a steadier job working in that fishery. It isn’t just two days a year. It’s maybe ninety or more days a year. So, there is a dramatic change but inevitably it means that the fleet is reduced. And the fleet does it by itself. It isn’t the hand of government coming in and saying we’re going to buy you out. There is going to be consolidation. That just goes logically with the reduction in the number of vessels. But you can also have a consolidation because people go out of business. And that’s really the course we’re on. Fleets are going to get reduced. There’s no doubt about that. And we can do it ugly, and we can basically let people get gradually strangled out of fisheries. Or we can try and make it somewhat rational and humane so that people who have invested a lot in a fishery in their lifetime can get something out of it if they want to leave. Right now in an open access fishery, there’s now way for them to do it. The only option is failure.
For the amount of fish we have out in the water globally right now, we probably have two to three times as many vessels as we need. And up until the 1960’s, the limit on the amount of catch was the number of boats that we have. Now the limit on catch is the number of fish.
The controversy over ITQ’s generally is very, very theoretical. And my question always is, "An ITQ in which fishery, and what kind of ITQ?" That, to me, is the critical question because ITQ’s need to be designed with the particular fishery, the composition of the kind of fleet that you would like to have, the social values that you want to maintain. Those are perfectly legitimate considerations to put into the design of ITQ’s, so to me it’s not good enough to talk about ITQ’s, it’s to talk about what kind of ITQ in which fishery. And, I think in all of the ITQ programs in the United States, and certainly in the ITQ programs in halibut and sable fish, there are caps on the amount of shares that any one person or corporation can own. And that is a perfectly legitimate thing for an ITQ program to include. And I would say that most people would agree with that. most people believe where there are small fleets, we want to maintain those small fleets. I would say, in addition to that, that a small fleet is going to be able to persist much longer if they are making good money. And they’re not going to make good money in an open access fishery. So there is an element of strength that can be gained by small fleets from ITQ’s, but it takes a matter of thinking of it that way, and planning it that way for it to happen. It’s not going to happen because someone’s going to do it for you. You’ve got to get in there and make sure it happens.
I think we’re now at a point where there could be dramatic change for the better, but it’s going to require an awful lot more work. And the groundwork for that was really laid in the early 1990’s with the emergence of the conservation community in the fisheries issues because there’s finally someone in there who’s sticking up for the fish. That is a voice that has not been heard before. And, so that causes me hope. There are plenty of situations and problems that can cause me to get kind of discouraged at times, but there’s enough going on that is really encouraging on the other hand. The thing that concerns me most, in the United States is the continued moratorium on Individual Transferable Quotas. And to me, this is really a strategic error. This is not a tactical error. It is a strategic error and we are going to pay dearly for it.
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Michael
Weber is a freelance writer in Redondo Beach, California and
author co-author of The Wealth of Nations and Fish, Markets,
and Fishermen: The Economics of Overfishing.
In your book you talk about how quickly the world’s fishing
fleet has grown — could you characterize how that has happened?