Individual Transferrable Quotas: New Zealand’s Experience
New Zealand Fisheries Waters• Large EEZ (4.4
million km2)• 70% below 1,000 m• Medium productivity• Commercial Fisheries• Non-commercial
Fisheries
Reform Context (early 1980s)• Classic fisheries issues
– Inshore stocks overfished– Commercial fisheries over-capitalised– Unprofitable, uncompetitive, rent dissipation– Declining recreational fishing– Risk of extending problems to newly developing deepwater
fisheries
New Zealand’s Response• Objectives of the Quota Management
System– Primarily economic drivers– Restore profitability to inshore fisheries– Avoid over-capitalisation in new deep-water fisheries– Limit catches to MSY– QMS in place since 1986, after 25+ years experience
everyone has adjusted
Quota Management System (QMS)
• Several refinements have been made since 1986 but the basic tenets remain:– Setting catch limits– No discarding QMS species– Individual Transferable Quotas (ITQs)– Markets determine allocation of commercial effort– Monitoring and enforcement
New Zealand's ITQs• Species and area specific• Perpetual and transferable • Generate ACE (annual catch entitlement)• Some ownership restrictions
• Maximum holdings (aggregation limits) 10-45% of TACC• No foreign ownership
• Ongoing allocation only via ITQ and ACE trading
Cost Recovery/Subsidies• NZ originally considered resource rentals
based on the decision to allocate quota without tender process
• Now use cost recovery mechanism to charge quota holders selected government costs (e.g. observers, fisheries research, administration)
• No subsidies in QMS system; quota owners pay c. 30-35% of government costs
Outcomes• Reflect two primary
policy objectives of QMS– Resource
sustainability delivered
– Economic performance improved
Fleet rationalisation
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
500
1000
1500
2000
2500
3000
Registered fishing vessels
Quota rationalisation
198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020110
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Combined total quota owners for 16 selected inshore species
Export value/volume
Benefits/Gains
Challenges unique to QMS• Designing systems to administer and audit QMS
• Required refinements to suit local conditions and policy requirements
• Social impacts anticipated and managed– Social dislocation in small coastal fishing
communities
– Growth in large vertically-integrated fishing ports
What general conclusions can be drawn from the NZ experience?
General conclusions• QMS objectives focused on economic
efficiency
– NZ’s ITQ design choices reflect this objective– If you have other management objectives,
… the design of your rights based management regime would be different
General conclusions• NZ’s policy design features allowed for
controlled industry restructuring– Building legitimacy and collaboration is key to success– Quota allocation on catch history basis– Strongly specified ITQ (perpetual, tradable and enshrined in
law)– Provides certainty/security for investment– Quota ownership limits
Other key considerations• Avoid disadvantaging competing sectors• Design policy to encourage collective
responsibility• Do not overlook importance of integrated
planning