Race to fish under quota

Why can a fishery with a strictly enforced annual catch limit still ruin both its fleet and its stock?

A regulator does the thing everyone asked for. It sets a total allowable catch based on the best stock assessment available, and it enforces it — landings are counted, the season closes the moment the number is reached, and not one tonne over comes ashore.

And the fishery still falls apart. Boats get bigger and more expensive while earning less. Fishing happens in weather that kills people. The whole year's catch lands in a few days and sells for a fraction of what it is worth. This is not a story about a limit being ignored. It is a story about a limit being obeyed, which is much more interesting, because it means the failure is in the design rather than in the enforcement.

Ask what the rule actually gives each skipper. It caps the fleet's catch. It says nothing about whose catch it is.

So consider a fish left in the water on Tuesday. If you leave it, does it wait for you? Only if nobody else can take it — and under a common limit, everybody else can. Your restraint does not bank the fish for October, it hands it to the boat beside you and brings the closure a day nearer. The rational move, for every skipper independently, is to catch as much as possible as early as possible. Note that this is not greed doing the work: a skipper who would happily fish slowly cannot afford to, because the payoff for patience has been removed by the rule's structure.

Now follow what that pressure does. Speed becomes the whole game, so the return on a faster hull, more gear, more crew and more freezer space is enormous — not because it catches more fish over the year, since the total is fixed, but because it captures a larger slice of a fixed total. This is capital stuffing: real money spent to redistribute a catch that does not grow. It is a pure waste, and every boat must spend it to stand still.

Then the season shortens, and shortens again, because a faster fleet reaches the same number sooner. Once it is measured in days, three further things follow. Boats sail in weather they would otherwise sit out, because the closure will not wait — fatalities in Alaska's derby-era halibut and crab fisheries were the notorious case. A year's landings arrive in a week, so the market cannot absorb fresh fish and nearly all of it is frozen, at the price the glut sets. And fishing at maximum speed means gear is set carelessly and sometimes lost, which keeps fishing on its own, and sorting the catch properly is a luxury nobody has time for, so discarding and high-grading rise.

Here is the part that touches the stock, and it is the part most often missed. The limit governs landings. Fish killed by lost gear, by discarding, by handling, are not landed and not counted. A derby maximises exactly those unrecorded removals. It also degrades the data the next limit is set from: catch per unit of effort, the cheap index of abundance, becomes meaningless when the fleet's effort is a sprint rather than a routine. So a perfectly enforced number can sit on top of a real removal that is larger and worse-measured every year.

What would fix it? Not a tighter limit — that shortens the derby. The fault is the undefined share, so define it: give each participant a secure, durable right to a percentage of the total. Then the fish left in the water on Tuesday is still yours in October, and racing costs you money instead of earning it. When Alaskan halibut moved to individual quotas in the mid-1990s, a season that had contracted to a couple of frantic openings stretched back across most of the year, and the fish went to market fresh. That is a recalled account of the case rather than a figure I will put a number on.

The lesson generalises past fishing: enforcing an aggregate limit on a resource without assigning individual shares does not prevent competition for the resource, it converts it into competition for speed. The rent that a well-managed fishery could earn gets spent on the contest for it. Economists call this rent dissipation, and it is the precise sense in which the fleet is ruined while the rule works.

Two honest qualifications. Catch shares are not a general solution, and it would be dishonest to write them up as one. They do nothing about a limit that is set too high, because they only divide whatever number the assessment produces. They concentrate ownership — quota tends to consolidate into fewer hands, and crew who were paid a share of the catch can end up paying to lease access to it. And the initial allocation is a one-time transfer of a public asset, usually to whoever happened to be fishing hardest during the derby years, which is an awkward reward. Some fisheries get much of the same benefit from cooperative or community management, without individual tradable shares.

The falsification test is unusually clean here, because the account blames the undefined share and nothing else. So hold the total limit, the fleet, the stock and the prices constant, and change only the property right. The account predicts season length increases sharply, spending on vessel speed and capacity falls, and the share of catch sold fresh rises. The refuting observation would be a fishery that assigned secure individual shares and kept racing anyway — or, from the other side, a sustained derby in a fishery where shares were already secure and enforceable. Either would mean the race is driven by something other than the missing share.

• How a total allowable catch is set in the first place, and why the assessment is the weaker link once the race is fixed.
• What community quotas and harvesting cooperatives achieve that individual tradable shares do not.

Every term the collection defines is gathered in the glossary.