The role of government and industry in resolving assignment problems in fisheries with individual transferable quotas

Fisheries managers often face the challenge of addressing multiple, conflicting objectives. Historically, the focus has been on biological objectives but there has been an increasing appreciation of the importance of economic and social objectives. A desire to address economic objectives has partly driven the increasing use of individual transferable quotas (ITQs). However, ITQs are insufficient to achieve the economic objectives as a suite of other decisions and regulations affect outcomes. Assignment problems are common in ITQ fisheries and can reduce economic yield. They occur through misallocation of fishing effort, particularly when there is spatial and temporal heterogeneity in the stock, leading to inefficient timing of supply and overexploitation and congestion in parts of the fishing grounds. Clubs in the form of fishing cooperatives have the capacity to resolve these problems through coordinating the fishing effort of their members. The likelihood of a single fishing cooperative forming and uniting to resolve assignment problems however, may be diminished under ITQ management due to the increasing heterogeneity in business structures, incentives and motivations among fishers generated by market-based mechanisms. This heterogeneity can also have ramifications for fishers trying to reach an agreed industry position that can be presented to government when negotiating on management changes that deal with assignment problems. In this situation, the absence of an agreed industry position should not act as an impediment to government in prioritising, articulating and taking the lead in implementing measures that reduce assignment problems and concurrently meet their overarching economic objectives.