Impacts of Vessel Capacity Reduction Programmes on Efficiency in Fisheries: the Case of Australia’s Multispecies Northern Prawn Fishery

Capacity reduction programmes, in the form of buybacks or decommissioning, have had relatively widespread application in fisheries in the US, Europe and Australia. A common criticism of such programmes is that they remove the least efficient vessels first, resulting in an increase in average efficie...

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Bibliographic Details
Published in:Journal of agricultural economics 2012-06, Vol.63 (2), p.425-443
Main Authors: Pascoe, Sean, Coglan, Louisa, Punt, Andre E., Dichmont, Catherine M.
Format: Article
Language:English
Subjects:
Agricultural economics
Australia
Australian northern prawn fishery
buyback programmes
D24
Economic models
Europe
Fisheries
fisheries management
Fishery economics
fishing boats
Fishing vessels
multi-output distance function
production functions
Q22
shrimp
Technical efficiency
U.S.A
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Summary:Capacity reduction programmes, in the form of buybacks or decommissioning, have had relatively widespread application in fisheries in the US, Europe and Australia. A common criticism of such programmes is that they remove the least efficient vessels first, resulting in an increase in average efficiency of the remaining fleet, which tends to increase the effective fishing power of the remaining fleet. In this paper, the effects of a buyback programme on average technical efficiency in Australia’s Northern Prawn Fishery are examined using a multi‐output production function approach with an explicit inefficiency model. As expected, the results indicate that average efficiency of the remaining vessels was generally greater than that of the removed vessels. Further, there was some evidence of an increase in average scale efficiency in the fleet as the remaining vessels were closer, on average, to the optimal scale. Key factors affecting technical efficiency included company structure and the number of vessels fishing. In regard to fleet size, our model suggests positive externalities associated with more boats fishing at any point in time (due to information sharing and reduced search costs), but also negative externalities due to crowding, with the latter effect dominating the former. Hence, the buyback resulted in a net increase in the individual efficiency of the remaining vessels due to reduced crowding, as well as raising average efficiency through removal of less efficient vessels.
ISSN:0021-857X
1477-9552
DOI:10.1111/j.1477-9552.2011.00333.x