by
Les Clark
Senior Economist
Forum Fisheries Agency
1. INTRODUCTION
1.1 Aim of the Report
This report was compiled for the purpose of the April 1983 meeting of the Expert Consultation on Conditions of Access to the Fish Resources of the Exclusive Economic Zone, a consultation organized by FAO in preparation for the World Conference on Fisheries Management and Development. The report analyses the types and levels of benefits being derived from foreign fishing access by States participating in the South Pacific Forum Fisheries Agency (FFA).
1.2 Background
That Agency was set up by the South Pacific Forum States in recognition of their common interest in the utilization of marine resources in the South Pacific region. Through the activities of the Agency, these States have steadily pursued a course of regional cooperation and coordination in respect of fisheries policies.
The member States of FFA are: Australia, Cook Islands, Fiji, Kiribati, the Federated States of Micronesia, Nauru, New Zealand, Niue, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu and Western Samoa. Palau and the Marshall Islands also participate in the affairs of FFA as observer States.
The Agency currently is involved in the preparation, negotiation and implementation of arrangements for access to the fish resources of the fisheries or exclusive economic zones of the participating States. The fisheries or exclusive economic zones of these States cover the major area of the southern western and central Pacific. The only areas in the region involved in access arrangements which are not covered by FFA are those of the French Pacific territories - New Caledonia, Wallis and Futuna, and French Polynesia.
2. FOREIGN FISHING OPERATIONS IN THE FFA REGION
2.1 Introduction
With the exception of New Zealand and Australia, the FFA States have made arrangements for foreign fishing access almost solely to the resources of skipjack, tuna and related species. These resources have traditionally been fished by Japanese, Korean and Taiwanese longline fishermen, and by Japanese pole and line fishermen. More recently, there has developed a rapidly expanding purse seine fishery involving Japanese, Korean, Taiwanese and USA fishing interests.
2.2 Japanese Sashimi Longline Fishery
The South Pacific region is a major fishing ground for the Japanese longline fleets. These include some 1,500 vessels of the nearby and distant water fleets ranging in size from 20 gross registered tons to over 300 gross registered tons. An unknown number of smaller vessels also fish in Micronesian waters.
These vessels target for deeper swimming tunas and billfish for the Japanese sashimi (raw fish) market. Typically, the three most valuable species of tunas (southern bluefin, bigeye and yellowfin) make up around 85 percent of the volume of the catch of the sashimi longline vessels in the fishery zones of FFA States.
The catches of the sashimi longline vessels are for the most part deeply frozen (to around -55°C) are handled with great care and are marketed as a relatively high quality product for the Japanese consumer market.
Some Korean vessels also participate in this fishery, catching tuna and billfish for the Japanese sashimi market with the support of several large Japanese trading houses.
Since, around 1974, the number of vessels in the fleet and their aggregate catches have remained fairly stable.
More recently, however, the returns of Japanese longlining operations have reduced for reasons variously attributed to high fuel costs, consumer resistance to higher tuna prices, an apparently emerging long-term shift in Japanese diet preferences away from foods such as sashimi and the impact of the new 200-mile fisheries zone regimes. In response, the Japanese fishing associations have recently implemented a well publicized cut of 20 percent in the capacity of the distant water longline fleet and a programme of research into improved vessel design and fishing techniques aimed at improving efficiency in operations and restoring profitable market conditions.
2.3 Korea/Taiwan Longline Canning Fishery
Through the 1950s, Japanese tuna longliners fished for canning material from foreign bases in the region, notably from Pago Pago. As freezing technology improved, however, the sashimi market provided increasingly attractive returns and the Japanese longline fleet transferred to the sashimi fishery. As the Japanese longline fleet withdrew from the fishery for canning material, it was progressively replaced by the developing Korean and Taiwanese fleets.
Today, the numbers of Korean and Taiwanese vessels operating in the South Pacific are themselves declining sharply as albacore prices fall and fuel and wage costs rise.
2.4 Japanese Purse Seine Fishery
The Japanese single purse seine fleet (comprising vessels of around 500 gross tons) expanded from 11 vessels reporting a catch of 24,000 tons in 1972 to 32 vessels reporting a catch of 85-90,000 tons for 1982. In 1983, the first full year of operation of the expanded fleet, the catch is likely to exceed 110,000 tons. In addition there have been seven 116 gross ton group seiners which fish with their own carriers and have been licensed to fish seasonally in southern waters for skipjack.
The Japanese purse seine fleet reports taking slightly less than half of its catch in the waters of the fishery zones of FFA States. The composition of its catch in FFA States' waters is approximately 70 percent skipjack/30 percent yellowfin. After the profitable period of expansion, returns to this fleet appear to have fallen recently. An increase in trip lengths as catch rates have fallen and falling skipjack prices have been only partially compensated for by a higher proportion of the more valued yellowfin in purse seine catches than was anticipated.
Purse seine skipjack is used by the katsuobushi (smoked-dried fish) manufacturers, the canning industry for export or exported frozen to the world canning market (mainly to the USA). Much of the purse seine yellowfin catch is exported for canning, especially to Europe.
The size of the Japanese purse seine fleet is for now effectively limited to the present number of 32 single purse seine vessels by Japanese Government regulation.
2.5 United States Purse Seine Fishery
The activity of the United States purse seine fleet in the region has been expanding rapidly. These vessels deliver skipjack and yellowfin for canning to Pago Pago or San Diego. There is currently a significant transshipping operation through Guam. Typically, these vessels have a carrying capacity of around 1,200 tons of fish. The major fishing grounds in the region have been in the area between the Federated States of Micronesia and Papua New Guinea. More recently, there has been more interest in fishing in the eastern part of the region. That trend is likely to be strengthened with the participation of Kiribati in a joint agreement with Palau and the Federated States of Micronesia providing for access for the vessels of the American Tuna-boat Association to the fisheries or EEZs of those three States.
In the last three years the fleet has expanded from less than 20 US purse seine vessels operating during 1981, to around 25 vessels operating in the region during 1982, and over 40 vessels may operate in the region during 1983.
2.6 Other Purse Seine Fleets
With the decline of the Korean and Taiwanese longline fleets, those governments have encouraged the Korean and Taiwanese fishing industries to invest in purse seine fishing. Currently, up to ten of these vessels are known to be operating in the region, most of them landing their catch for transshipping through Guam. In addition, there has been sporadic interest in tuna purse seine fishing in the region from USSR, Philippines and Indonesian fishing interests.
2.7 Japanese Pole and Line Fishery
In the early 1970s, with demand for tuna canning material booming, the Japanese Fishery Agency apparently adopted a policy of encouraging longline owners to convert to pole and line fishing, and to develop the Southern Pacific skipjack and Northern Pacific albacore fisheries. In response, the catches of the Japanese distant and nearby water pole and line fleets expanded rapidly, reaching over 400,000 tons during 1974. Since then fuel cost increases, competition from purse seiners, fluctuating albacore catches and sluggish market conditions have reduced returns to the Japanese pole and line fleet. By 1 August 1982, there were only 184 distant water pole and line vessels licensed by the Japanese Fishery Agency, compared with 306 vessels licensed in 1976. In fact, it is understood that many of these licensed vessels may now be moored, and that the size of the fleet operating during 1983 may be significantly less than the 184 licences issued.
During 1981, these vessels are reported as having caught over 40,000 tons of fish, almost all skipjack, in the fisheries or EEZ zones of FFA States.
3. COASTAL STATE BENEFITS FROM ACCESS
3.1 Types of Benefits
The range of benefits available to coastal States making arrangements for access for foreign fleets to fish in their fishery or EEZs can usefully be classified in terms of serving three main purposes:
- Direct financial benefits: Largely fees received (measured either in terms of gross receipts or net of expenditures required for all or part of the functions of EEZ management) but for the purpose of this discussion also including the grants of goods and services regularly negotiated with foreign fishing interests, such as those from Japan, as part of access fee payments.- Fishery development assistance: Including the provision of scientific data, access to markets for fisheries products, technical assistance, direct investment, fisheries aid.
- General development assistance: Mostly including access to markets for products other than fisheries products and general development aid.
3.2 Access Aims of Pacific Island States
The mix of benefits sought by FFA States largely reflects the sort of pattern which is developing in other regions. Those States with the greater opportunities to mobilize resources for the development of their domestic industry have placed relatively greater importance on directing the benefits from foreign fishing access towards the development of their own domestic fishing industries - seeking data, market access, technology transfer, and often investment through joint ventures. Those States for whom the constraints of the lack of capital and skills are more severe, have more generally sought to maximise direct financial benefits, with development assistance often taking a secondary role.
For most Pacific Island States, the abundance of the resources of skipjack, tuna and related species far outstrips the fishing capacity that many of these States are likely to develop in anything but the very long term. For instance, there are only two vessels owned by Pacific Island States operating in the sashimi longline fishery, which is by far the highest value output fishery in the region. There is only one regional longliner currently operating in the albacore fishery.
Much greater resources have been directed toward participating in the surface fisheries, but even there it is apparent that the abundance of the skipjack and surface tuna resources is probably generally sufficient to sustain both the current level of foreign fishing and current expansion plans of domestic surface fishing efforts (although there is a developing concern about the increasing expense of exploitation of surface yellowfin by foreign purse seiners).
Most Pacific Island States then contemplate a fairly long-term relationship with foreign fishermen, and from this perception can probably be traced a great deal of the relatively greater effort committed by FFA region States towards developing an acceptable long-term regime for controlling foreign fishing efforts and for extracting the maximum direct benefits from that activity.
3.3 Direct Financial Benefits Received
The levels and distribution fees and related financial benefits received by FFA States for foreign fishing access are described more fully in Section 6.
In summary, aggregate access fee receipts (including goods and services components) by FFA States for access to resources of tuna and related species are estimated to have exceeded US$ 15 million for 1982.
3.4 Fishery Development Gains
The extent of fishery development gains accruing to coastal States in the region from the arrangements made for foreign fishing access following the extension of this marine resources jurisdiction is generally difficult to measure.
The scale of fishery development projects sponsored by foreign fishing States has certainly increased since the institution of extended jurisdictions. The projects cover a wide range of fishery activity. They have included assistance for fishery administration, fish marketing, small-scale fishery development and industrial fishery development.
There are no clear measures of the values of many of these projects, though some have been clearly worthwhile. It is rather easier, however, to make a general observation about the extent of gains flowing from access for industrial tuna fishery development. Success in the pursuit of industrial tuna fishery development has proved elusive.
It is probably true that until now, at least, Pacific Island States have generally not been able to generate or capitalize on the opportunity for industrial fishery development which the extension of their sovereignty over their 200-mile fisheries or EEZs might have appeared to promise. The three major industrial fishery developments now operating in the region were generally planned and implemented in the period before the extended jurisdictions became a reality, though it is likely that the extension of jurisdiction protected and provided expanded development opportunities for these existing operations.
In other cases, vessels and technical assistance for industrial tuna fishery development have flowed from development assistance which is at least indirectly related to access. The fisheries involved include longlining for albacore, sashimi longlining and pole and line fishing. However, none of the operations thus established show clear signs of developing into a viable expanding operation at this time.
3.5 Wider Development Gains
The scale of wider development gains accruing from access arrangements is also very difficult to measure, since there is very little wider development aid activity directly tied to fisheries access. In part, at least, that traces to the rejection of the regional States of a tie between aid and access. Again, the pursuit of such wider developmental gains as access to markets for non-fisheries products has been more aggressively pursued by the more developed States in the region such as New Zealand.
The generation of economic benefits from contact with foreign fishing vessels provides a special case of potential developmental gains from foreign access. Again the more developed States have been more readily able to benefit from port calls, bunkering, etc., than less developed States, though significant gains in this area have accrued to several Pacific Island States.
Attracting foreign operators to transship, thus securing potential gains in employment, export, duty and foreign exchange has also proved relatively difficult. Increasing fuel costs have certainly encouraged greater interest in transshipping operation by foreign operators, but as yet there have been relatively few instances in which it has been more profitable to transship from a point closer to the fishing grounds, than to incur the additional handling, storage and transport costs involved in transhipping back to home ports.
4. FEE STRUCTURES
4.1 Types of Fee Structures
There are three regularly recognized bases for access fees, as:
- Lump sum payments for access for fleets
- Taxes on effort
- Taxes or royalties on catch
Various combinations of these types of access fees are also common within particular access arrangements. In practice, access negotiations under the three systems generally focus on some measure of the average value of catches per vessel taken in the zones. The major difference lies in how close the relationship is between the fee and the current catch estimates. Lump sum fees are typically negotiated in relation to the historic catches of the fleet operating in the zone. Taxes on effort are typically based on the most current estimates of the performance and unit values of the catch of average vessels of different classes, in the fleet while taxes or royalties on catch can be directly attached to actual catches.
4.2 Lump Sum Fees
Lump sum fees are still the dominant form of fee payments for access for tuna vessels to the marine resources of FFA States. The provisions relating to lump sum fees are fairly straightforward. Typically, an annual fee is agreed, in some cases with a component paid in goods and services rather than cash. The cash fee is forwarded as one or two payments. The fee may be agreed as providing for some maximum number of vessels to be fishing at one time, licensed during the year, or licensed at any one time. In some cases vessels are individually licensed, and in others they are not.
It is generally the case that lump sum fee values can be less directly tied to specific formulae than per vessel or per trip fee values. In particular, the lump sum agreements themselves do not state any specific formulae, though in some cases the agreements do indicate the lump sum fee to have been based on a declared percentage of a prescribed value of the expected catch. In some cases, however, some of the analytical factors may be set down by the parties in documents outside the agreement documents.
No direct information is usually available on the levels of payment of individual vessels contributing to lump sum payments or on the methods by which these contributions are collected by the respective fishing associations or government agencies.
4.3 Per Trip Fees
Per trip fee systems were introduced by Papua New Guinea and Solomon Islands in 1979, in response to dissatisfaction from Japanese fishing interests with the lump sum systems which those countries had been operating.
The negotiation of per trip fee systems typically involves a more detailed analysis of the average catches of vessels in the fleet by class of vessel.
As an example, the current Papua New Guinea's agreement with Japan provides for a relatively small annual per vessel payments based on the lengths of the vessels and size of the crew, and a per trip fee generally calculated as:
Catch/trip
× operation ratio (proportion of fishing days per trip spent in Papua New Guinea fisheries zones)× duration ratio (ratio of licence duration to total duration of fishing trips)
× fee rate (5% f.o.b. levy)
× f.o.b. price in kina (calculated as Yaizu average price by species less agreed freight and handling charges)
Separate fees are set by type of vessels (longline, pole and line, purse seine) and by size of vessel. The trip fees provide a licence for a set time in the zone which may vary by type and size of vessel, and licences for extended periods are available at an additional cost.
4.4 Per Vessel Fees
Per vessel fee systems involving an annual payment by each vessel for fishing in a particular zone have generally found little favour amongst licensing States in the FFA region. States have generally preferred either the administrative simplicity of lump sum agreements, or the flexibility and the apparently potentially greater earning power of per trip systems. The only significant per vessel type systems which have operated recently are those provided for by the agreements between the American Tunaboat Association (ATA) and States of the region, and those for access to the New Zealand southern bluefin and albacore/yellowfin fishery (although the limited period for which the New Zealand southern bluefin licences are issued effectively makes them a per trip licence system).
Per vessel fees may simply be set as a single fee covering all vessels applying for access to the fishery, such as the NZ$ 5,000/vessel fee currently set for access to the New Zealand albacore/ yellowfin fishery; or vary by vessels with a particular vessel characteristic such as the length of the vessel or some measure of the tonnage of the vessel. The agreements with the ATA are based on a fee per net registered ton of individual vessels.
4.5 Taxes or Royalties on Catches
Taxes or royalties on catches are most easily implemented where fisheries are subject to quota systems. In that case, the size of the fee can readily be calculated in advance, and extracted at any point during the period of the fishing process. Such a system necessarily requires close monitoring and control of catches, since a tax based directly on catch clearly provides an incentive to under-report catch.
Outside of New Zealand and Australia, there are no tuna or related species fisheries in the FFA region which are subject as yet to effective quotas. This, and the lack of resources available for the monitoring and control of catches have meant that no Pacific Island States have been interested at this stage in implementing royalty fee systems.
5. COMPARISON OF LUMP SUM, PER VESSEL AND PER TRIP FEE SYSTEMS
5.1 Introduction
In a recent exercise, the effectiveness of the different fee systems discussed above for FFA States were compared in terms of:
- Fee receipts
- Administration resources required
- Enforcement
- Control of the fishery
The conclusions of that exercise are summarized below.
5.2 Fee Receipts
The relative ability of the different fee systems to secure higher fees can be looked at in two ways.
Theoretically, a per trip system should in the longer term give the opportunity to extract higher fees, since:
- The flexibility of a per trip system gives the fisherman greatest opportunity to adjust his fishing patterns to the apparent abundance of fish as it changes during the year, and may thus increase the value of catches and the base for levying access fees.- The fisherman is more sure when paying per trip fees shortly before he enters a zone that he will fish there, than if he buys options to fish at some period in advance. There should be some increase in fees associated with this reduction in risk.
- The coastal State can more finely adjust fee structures to the apparent capacity of different classes of vessel to pay when it is charging vessels directly and for each trip.
In practice, it may be difficult or impossible for coastal States to extract the apparently greater benefit available because of:
- enforcement problems; or- lack of knowledge - the representatives of the foreign fishing operations may indeed be better placed to understand relative capacity to pay; and to adjusting payments for different vessel classes, etc.; or
- weak negotiating stances.
In addition, there may be some financial loss from having per trip fees flow in through the year compared with receiving a lump sum up front. Assuming the per trip fees are evenly distributed through the year (while a lump sum would be received at the beginning of the year) and a 10 percent interest rate, the average loss from a per trip fee system would be around 5 percent of the value of fees.
Indeed a review of experience in two countries which had shifted from lump sum to per trip system showed that in both cases fees received dropped after the introduction of per trip systems. Fee receipts by these two States have now recovered to beyond the levels of the lump sum agreements earlier received, although in 1981 they appeared to be still less than they would be if they had increased at the rate of the other lump sum agreements in the region.
Alternatively, the practical value of per trip and lump sum systems can be looked at in terms of the fee rates which they currently extract. Again, a comparison of the values of fees received as a proportion of the values of reported catches by States with per trip and lump sum systems showed returns from per trip systems to be consistently lower than returns from lump sum systems.
The value of a straight per vessel system in generating fees seems to depend critically on the diversity of fishing patterns among the vessels licensed in each zone. If fishing patters are fairly common among the vessels in terms of trips per year and proportion of catch per trip taken in the zone, and if the fishery is not subject to substantial annual overall shifts (the southern bluefin fishery is perhaps an example) then a per vessel fee system becomes closer to a per trip system with the attendant advantages and disadvantages.
The more diverse the fishing patterns, and the more subject to fluctuations is the fishery, the closer is the straight per vessel fee system to a lump sum system. In fact, in those circumstances a straight per vessel system may generate lower fees than either lump sum or per trip - deterring casual or uncertain fishermen through fees set to represent the average or fairly intensive fisherman in the zone, without the power of the lump sum system to encourage the associations to get at least some casual or uncertain fishers to contribute.
Uncertainty of Receipts
The fees to be received from lump sum agreements are known in advance. Where fees are a significant proportion of total government revenue or of the revenue of a single government agency, that may be an important factor-providing a surer base for forward planning.
Per vessel and more particularly per trip fees expose the recipient coastal State to the risk of changes in fees receipts from those projected. Fees may be higher or lower than expected.
5.3 Administration Resources Required
The administration of a per trip fee system generally requires greater administration resources arising from:
- A greater flow of communications between the licensing State and the vessels and associations. This can be expected to require more staff and cause higher postage and telecommunication costs.- The greater effort which is generally considered to be required to monitor individual vessel movements and catches under per trip systems
- The greater amount of analysis which may arise from the increase in the number and detail of factors to be covered in negotiations (such as trips per year, vessel capacities, fishing days by vessel class, etc.)
However, the application of this conclusion that a per trip system costs more to administer can vary widely for particular zones. Some States adopt a more analytical approach than others, whether they have lump sum or per trip systems. Other States have different degrees of monitoring independent of the type of agreement. Australia, for example, monitors individual Japanese vessel activity very closely under its lump sum agreement.
A recent study of the actual outlays by several States in the region for the administration (excluding enforcement) of foreign fishing agreements concluded that, if the States which currently operate lump sum systems for large fleets switched to per trip systems, they would require significantly greater administration resources. The study also recognized the administrative economies which might flow from a centralized, licensing authority and centralized receipt and analysis of catch/position reports and logsheets.
5.4 Enforcement
It should be apparent that in the long term the issue of compliance with agreements is substantially independent of fee system. If there is a likelihood of substantial under-reporting or illegal fishing, then having an effective enforcement capability is likely to improve compliance and having no enforcement capability will encourage evasion, whatever fee system is operating.
The compliance/enforcement effects of different fee systems are then a matter of degree and principally arise from:
- Compliance control exerted through associations. To the extent that associations are responsible for payment of fees, the burden of collecting fees from those fishing falls on the association.- Pressure from other association members - the 'if you fish without contributing to the lump sum, I have to pay more' effect.
- Ease of enforcement. It takes more effort to advise enforcement authorities of vessels currently permitted to fish when that list changes from week to week as vessel trip licences are taken out or expire, than when there is a set group of vessels licensed for the whole year.
These effects may well be real, but equally they may only be significant in the short term. If fishermen are predisposed to poach in zones where they observe enforcement to be ineffective, they can be expected over time and to some degree to express their unwillingness to pay for access to those zones to their negotiators. In that case, their unwillingness to pay is likely to be seen as reducing the fee paid and not coming out of the pockets of other fishermen. This would reduce the compliance effects of lump sum systems over time. Such effects are likely to be systematic, in that those who fish the zone intensively or have larger, more expensive operations at stake, may be more willing to accept the fee payment.
5.5 Control
In that lump sum agreements have often involved less direct regulation of individual vessels by the coastal State they have often consequently appeared to give less control over the fleet then have the per trip type systems.
Again, the effectiveness of fleet control should largely be independent of fee system. With a per trip system it is necessary to monitor movements more closely, but equally a close monitoring regime can be instituted under a lump sum system. Vessels can still be licensed individually and can be required to meet as equally stringent reporting or other requirements under lump sum system as under per vessel or per trip systems.
5.6 Individual Zone Comparison
Fisheries administrations switching to per trip fee systems can expect a drop in fees in the short term, but are likely to have the potential of earning more in the long term, depending on their ability to extract it. That ability is probably most closely related to their enforcement capability. Administration costs will rise significantly, and there may be more illegal fishing, if only in the short term.
As might be expected, FFA States generally seem to have adopted the system which suits them best. Papua New Guinea and Solomon Islands have found it effective to employ per trip systems for licensing the small, relatively homogeneous fleets of Japanese vessels which fish in the relatively compact areas of their zones within the limits of their enforcement capability.
In New Zealand and Australia, each with fairly well-developed enforcement and administrative controls, there seems to be relatively little difference. Australia has opted for the convenience of a single payment and the policy of selling the option to access while New Zealand appears to have sought to maximize gross financial returns.
The Micronesian States (Palau, Federated States of Micronesia and the Marshall Islands), Kiribati, Tuvalu and the Cook Islands clearly recognize lump sum systems as serving them best because they are dealing with larger fleets and more diverse fishing patterns. They also lack the more efficient communication systems (such as telex), are relatively short of skilled administrative staff, and have relatively large zones to regulate with relatively little enforcement capability at this time.
6. FEE RECEIPTS
6.1 Aggregate Fees
During 1981, FFA States are estimated to have received over US$ 13.5 million fees for access to resources of tuna and related species. Features of the composition of these aggregate fee receipts are:
- By fee type: 60% of the fees were received from lump sum type agreements. The balance was received from per vessel or per trip type agreements.- By country of origin: 90% of the fees were paid for fishing access for Japanese fishermen.
- By fishing methods: It is estimated that over 70% of these aggregate fee receipts were made for access for longline fishing vessels (assuming that the lump sum receipts are roughly distributed to fishing methods by the relative values of catches made under the lump sum agreements).
For 1982, aggregate fee receipts by FFA States for access to resources of tuna and related species are estimated to have exceeded US$ 15 million.
6.2 Catch Valuation
In general, the relative values of fees generated by different fisheries can be measured in terms of the values of fees received in relation to the values of the catches taken. Valuing the catch taken requires two measures:
- The size and composition of the volume of the catch
- The unit values of the categories of fish making up the catch
Currently, there are three sets of catch data generated by vessels fishing in the fisheries or EEZs of the FFA States. These are:
- Daily logsheet information submitted for periods spent within the zone of FFA States. A uniform logsheet is used by all participating States. Almost all the logsheets are now analysed by the South Pacific Commission.- Regular current catch on board and position information reported by vessels entering or existing the zones of FFA States and at regular intervals while fishing within those zones. This requirement for regular current reporting of catch and position is one of the harmonized access conditions agreed between FFA States. That requirement is currently largely implemented in the various foreign fishing agreements which apply throughout the region. The information is now sent to the various countries involved by the fishing vessel or its owner or the fishing association of which it is a member. In future, it is likely that these data will be increasing relayed to FFA and analysed there.
- Logsheet data submitted to the fishing agencies of their home countries by foreign fishing vessels. From these data the Japanese and Taiwanese Government fisheries agencies publish the estimated aggregate catches by their fleets by month and by area of fishing ground.
While there are always difficulties with regard to the validity of logsheet data submitted by fishermen, the availability of these three data sets provides a reasonably rigorous basis for the estimation of the size and composition of catch volumes.
Obtaining reasonable and fair estimates of the unit values of the various classes of fish taken can involve some rather more difficult issues. There are two structurally different markets through which the skipjack, tuna and related species taken from the region are sold.
Prices for fish sold to large scale canners are usually set under comprehensive price agreements covering all sales from the fleets to the canners (though the disrupted market conditions recently have caused some breakdown in these price setting arrangements). In general, these prevailing price structures are fairly well known and can be used, with a degree of caution, to provide reasonable estimates of the landed values of catches taken by those fleets delivering fish for canning.
Estimating the unit values of fish sold through more complex marketing procedures, such as generally prevail in Japan, can provide greater difficulties. There, the market evaluation of skipjack and tunas, particularly for the sashimi market, is highly discriminatory. Prices of fish of the same species vary widely, depending on the consumer and wholesaler evaluation of the quality of the flesh. The evaluation of the quality of the fish is related to factors including the fishing ground of its origin, the temperature of the waters from which it was taken, the size of the fish, season at which it was taken, the manner in which it has been handled and the quality of the freezing equipment from the vessel which delivered it.
The most readily available information of the landed value of tunas and related species in Japan is the published estimates of the average monthly market values by species of fish from the major landing ports in Japan. In the past, data on sales at Yaizu, a major skipjack and tuna port, have been most widely used to estimate the unit values of fish taken under foreign fishing access agreements by Japanese skipjack and tuna boats. There are three particular problems with the use of Yaizu data in this way:
- Until recently, data from Yaizu measured average prices by species but not by method of capture. This was particularly significant for deriving estimates of the value of longline yellowfin, which contributes by far the greater part of the value of longline catches in the FFA region. The expansion in landings by the Japanese purse seine fleet has largely been concentrated on Yaizu, so that for 1982 it seems likely that some two-thirds of the yellowfin landed at Yaizu will have been delivered from purse seine vessels. Since the value of yellowfin for canning material is substantially less than the value of yellowfin for the sashimi market (the average price for yellowfin for canning is around 300 yen per kilo, while the average price for yellowfin for sashimi use is closer to 700 yen per kilo), the average Yaizu yellowfin price is heavily weighted downwards by the value of deliveries from purse seine vessels. More recently, there have been data available from Yaizu giving prices for longline and purse seine yellowfin separately and for pole and line and purse seine skipjack separately.- The prices at Yaizu seem for some species at least to differ systematically from the prices paid at such other major ports as Misake and Shimizu.
- Average price data may not reasonably reflect the value of fish from specific fishing grounds. In particular, the market evaluation of fish from the South Pacific region may generally be lower than average.
It is hoped to study these various factors, with a view to making a reasonable and fair estimate of the relationship between the value of fish taken from FFA States zones and the published average Yaizu price data. For now, however, the average Yaizu data by method of capture seems to provide the best available general measure of the values of fish by species and by method, and is being used in FFA analyses. It is recognized that, if anything, this may over-estimate slightly the estimated value of catches.
In the process of negotiating access fees, there has also been regular discussion about the relative merit of valuing fish on the basis of the estimated value f.o.b. at fishing grounds compared with the average market value at the point of landing. Current practice varies, but landed market values are now generally more widely used.
6.3 Fee Rates
From the discussions over time about the appropriate base for deciding on rates of fees for access for foreign fishing vessels to the resources of skipjack, tuna and related species in the fisheries or EEZs of FFA States, three major principles have been variously put forward:
- The capacity to pay off the existing fleet- The economic rent which might potentially be available from the fishery
- The relative returns which might be generated by a national fishing effort, noting in particular the rates of export duty on frozen fish which range in the region from 4 to 10 percent.
In practice, foreign fishing interests have generally accepted fee rates in the region of 3.5 to 4 percent, while the coastal States in the region have collectively resolved to set fee rates up to 5 percent of the landed market value of the catch.
A study of actual fee receipts for the calendar year 1981 of FFA States showed actual fee rates of return ranging from around 2.2 percent to over 5 percent of landed market value, assuming known price structure for cannery - bound product and average Yaizu prices by species by method for Japanese market product.
The relatively low levels of these fee rates can be traced to:
- The lack of any real scarcity value to the licences purchased - apart from the southern bluefin fishery operated in New Zealand and Australia, there are almost no effective quotas or limits on catch or effort associated with existing licensing arrangements.- The small number of buyers for licences, with the foreign fishing interests generally strongly organized into a few buying agencies, often under strong government influence.
- The relative large number of sellers of licences, which has in the past provided scope for foreign fishing interests to choose from a number of licence sellers, and even at times to play sellers off against each other.
- The currently relatively unprofitable nature of distant water fishing operations.
- The relative weakness of surveillance and enforcement efforts available to ensure compliance with agreements.
At most, fee rates can be expected to rise gradually over time. The rates of any increases in the shorter term are likely to depend most on the extent to which changing market conditions or regulatory measures increase the economic rents available from the fleets.
7. THE PROSPECT FOR JOINT FEE SYSTEMS
7.1 Introduction
While the FFA States have committed a substantial part of their immediate attention to aligning their individual national access arrangements, they have also recognized the institution of joint fee systems covering several zones as a longer term option.
7.2 The Joint Agreements with the American Tunaboat Association
With their particular interest to see regional arrangements, it has already proved possible to successfully operate a joint fee system for access for the vessels of the American Tunaboat Association.
By a joint access arrangement, these vessels were licensed to fish in the zones of the Micronesian States (Palau, the Federated States of Micronesia and Marshall Islands) through 1981 and 1982 under a system involving a single licence fee for access to those three zones. More recently, there have been negotiations towards renewing this agreement with an arrangement which would provide access for ATA boats to the zones of Palau, the Federated States of Micronesia and Kiribati. The new agreement would also provide scope for the accession of other States to the agreement. Drawing fairly heavily on the experience of the States involved in the negotiation, implementation and administration of the Micronesia/ATA Agreement, a Working Group in the region recently reviewed the likely benefits to be gained from joint licensing systems and identified likely constraints to their implementation. The conclusions of that Group are broadly summarized below.
7.3 Potential Benefits from Joint Licensing Systems
Potential benefits from the introduction of joint licensing systems might include the following:
- Economic gains could be expected from moving to a regional licensing scheme, since bargaining positions would be strengthened, competition between States for foreign fishing effort would be reduced, the likelihood of fee evasion would be lessened, and the greater flexibility of movement provided to fishermen should allow higher catch values. The distribution of gains would depend on the formula used to distribute fee receipts.- Improved compliance control would be expected since the coverage of the wider zone could be more comprehensive.
- Reduced administration costs were expected from reducing requirements for individual nation licences to a single regional licence and having a more effective, centralized, administrative office.
- The development of new or under-utilized fishing grounds was possible if the ability to fish more freely increased the attractiveness of the zones to distant water fishing interests.
- Incentives to false reporting were reduced under a system in which a fisherman paid a single fee to fish over a wide area, since there was no direct economic benefit to fishermen from misreporting areas of catch.
- Increased control over the fisheries within the area was a strong benefit of a more regional approach - vessels could be more comprehensively monitored and information could probably be more easily obtained on activity in high seas areas.
7.4 Constraints to the Development of Joint Licensing Systems
There are several identifiable constraints to the development of joint licensing systems which need to be overcome for such a scheme to be introduced:
- Firstly, a joint fee level and structure needs to be agreed. There is still a difference in practice and opinion on the relative merit of different types of fee system among FFA States, although States are moving closer together on their approaches to fee levels and structures. Complexities in fee structures can arise if particular States wish to, say, limit the number of vessels of a particular gear type operating in their zones.- Agreement on a revenue sharing system would be a problem, especially if there were a chance that some countries might get less revenue from a regional agreement or that some countries might receive no revenue. A range of options on revenue sharing formulae exists, varying principally on the extent to which revenue is allocated by current catch data or by some other basis (such as size of zone) designed to provide some compensation to States which had contributed access to their zone to the scheme, but had not attracted foreign fishing in that period. The initial Micronesia/ATA Agreement provided for fees to be distributed wholly according to catch, but any new agreement is likely to have a minor proportion of fees distributed equally among licensing States, with the balance distributed according to catch.
- The administration of agreements is a potential constraint which could effectively be overcome, using existing regional agencies. However, the administration difficulties should not be under-estimated, a point confirmed by experience with the Micronesia/ATA Agreement.
- Information gaps are likely to be a constraint on decision-making. States would want to have better knowledge of the likely outcome of a regional agreement than was currently available before committing themselves. Three major areas of uncertainty were: (i) the extent of jointness of their fisheries; (ii) trends in fishing patterns and catch rates across the region, which would effect expected returns; and (iii) the negotiating data base, including data on markets and the economic structure of the distant water fishing activities, which was required to ensure effective negotiating at a regional level.
- The region identified for coverage by a single regional scheme was more likely to depend on States' collective and individual perceptions of who could benefit from participation, rather than on biological aspects of the fishery.
- Existing legislative requirements in the various participating countries might not be consistent with a more regional approach. Legislative changes can be made, but they take time, and are dependent on prior political commitment.
- Governments might perceive any joint approach to involve unacceptable limitations on their sovereign rights to control and develop their own resources.
- There could be some loss of benefits from bilateral relationships if there were, for instance, a special advantageous relationship between a coastal State and a distant water fleet or State. Regional licensing could dilute any such coastal State-distant water fleet relationship and reduce the benefits which could be derived under a national scheme.
- Participation in a regional scheme would cause difficulties for States which had not been able to agree on the delimitation of boundaries of fisheries zones, especially where there was disagreement over boundaries between adjoining States within the proposed licensing region.
- There are invariably delays in the distribution of fees as it is necessary to wait for catch reports to come to hand before fees can be distributed.
