The Fishing Market Mazin Al Zadjali 2 THE FISHING MARKET The Fishing Market Part 1 The fishing market has been poorly managed over the years resulting in overfishing and destruction of the coral reefs that support marine life. Today, fishermen compete with each other against the race to reach the annual share, a practice that has led to too many fish including the young ones being caught increasing the waste and preventing sustainability in the future. According to Economist (2012), the greed among the anglers to overfish has resulted in an increase in the level of injury and death among anglers who ventures into deep waters that are not safe. With the current pace of overfishing, economists predict that all commercial fishery will have failed by 2050 unless a proper mechanism is set into place that regulates the fishing levels and avoids destruction of marine life. According to Economist (2012), there are ways of preventing the collapse of commercial fishery such as implementing catch shares and individual transferable quotas that limit the number of fishing each fisherman can do annually to allow the marine life to regenerate itself increasing the amount of fish in ocean waters. In addition, having catch shares will reduce the competition among fisherman and reduce the dangerous practices performed by anglers resulting in increased level of injuries and deaths. The paper will analyze the fishing market by evaluating the opportunity cost of catch shares, the marginal analysis in decision making and the supply and demand of the fish. In addition, the paper will analyze the marginal benefits and cost of implementing catch shares and other ways of reducing fish wastage. 3 THE FISHING MARKET The fishing market operates differently when it is accessed as a public good compared to when it is accessed as a private good. The setting of catch share creates competition among the angler, as it becomes a race towards reaching the quota. As on open accessed good, the fishing market is at risk of failure and destruction of marine life for the future commercial fishery. The increase in competition leads to a rise in levels of angler injuries and deaths and reduces the fishing season to only 3-4 days, which have negative economic outcomes. The fish managers set a limit for each angler and ensures no fishermen exceeds his quota leading to overfishing or exploitation of the common resources. After the scientific calculation of the number of fish that can be caught, each fisherman is given a percentage of the total which is their quota and is allowed to catch whenever they want to avoid the competition for racing to fish (Environmental Defense Fund, 2018). The high number of fish caught due to high competition leads to the supply of fish skyrocket while the demand for fish is still low in the market. According to Environmental Defense Fund (2018), the article argues that the increase in the supply of fish increase the prices which lead to a decrease in demand since customers cannot afford the high prices of fish in the market. The surplus of fish in the market leads to wastage and the high cost of mismanagement that leads to loss of revenue. The demand and supply of fish does not respond to changes in prices since the market is not operating at efficiency level. The marginal cost of overfishing is high management cost to the society due to loss of revenues and wastage that hinders sustainability for future commercial fishery. 4 THE FISHING MARKET References 1 Economist, (2012). "How to Stop Fishermen Fishing." Accessed September 28, 2018. https://www.economist.com/node/21548240/print. Environmental Defense Fund. n.d. (2018). "How Catch Shares Work." Accessed September 28, 2018. https://www.edf.org/oceans/how-catch-shares-work-promising-solution. 5 THE FISHING MARKET Part 2 The negative influences of overfishing and racing to fishing is increasing in the cost of mismanagement, which leads to lost economic output. The anglers look at the current opportunity costs and decide to forego future revenues and receive the current benefits of fishing which causes supply to go up and prices to shot. The fishermen argue that, if they do not race to fish and take advantage of the booming fish markets, other people will catch the fish and collect all the assets and benefit instead (Economist, 2012). The lack of privatization of fishing areas and making the waters private goods leads to exhaustion, misuse since anglers argue that they are natural resources, and do not take good care of it. The depletion of the marine environment by overfishing and failing to maintain the catch share will lead to failure of the fish market in the future. Market Failure Market failure is a condition where the allocation of goods and services in a free market economy is not efficiently leading to other people getting supernormal profits while others net losses. The main causes of market failure in the fish market are the race for fishing creating competition, overfishing leading to depletion of common goods, and failing to take good care of the marine environment to ensure the commercial fishery is sustainable (Leschin-Hoar, 2016). In this case, the indivisibility of the marine environment leads to market failure since it is difficult to share the cost of maintenance and repairing the damage cost by overfishing leading to failure and net social loss to the government and the community in general In addition, common property resources are another major cause of market failure in the fishing market. The ocean and fishing areas are common resources and are not privatized leading 6 THE FISHING MARKET to misuse and depletion of natural resources without placing blame on specific people. The anglers know that overfishing is harmful in the long run but they choose to forego future benefits and take current benefits at the cost of wasteful exploitation and harming the marine environment. The lake and oceans are common property rights for all fishermen and failure to observe the catch share policy lead to overfishing and loss of revenue, wastage and a cost to the society. The fisherman who catches more fish and exceeds his quota imposes a negative externality to other anglers and the lake is exploited (Leschin-Hoar, 2016). Government intervention in the fish market aims to correct the market failure by implementing the catch shares and individual transferable quotas. First, the scientist has come with a method of calculating how many fish can be caught while still maintain sustainability. The implementation of catch shares extends the fishing season from 3 days to 8 months stabilizing the market and avoiding marketing failure and the distortion of market forces of demand and supply. In addition, this reduces the levels of fishermen injuries and deaths from 70% and 15% yearly. The supply and demand of fish are stabilized due to the longer fishing season, the marginal cost is less restricted, and fishermen have the liberty to control prices in the market. The government intervention through the catch share helps increase the sustainability of marine life to extend the commercial fishery in the future while conserving the environment. In conclusion, the fishing market has for a long time operated as an open-access good, which is susceptible to exploitation and depletion leading to the collapse of the fishery market and destruction of marine life. Privatizing the fish market through the catch shares and individual quotas, the market is regulated and stabilized to avoid market failure, loss of sustainability and collapse of the industry. 7 THE FISHING MARKET Market failure Graph 8 THE FISHING MARKET References 2 Leschin-Hoar, C. (2016). "Study: Program To Protect Fish Is Saving Fishermen's Lives, Too." NPR.Accessed September 28, 2018. https://www.npr.org/sections/thesalt/2016/02/16/466612148/study-program-to-protectfish-is-saving-fishermens-lives-too. Economist, (2008). "A Rising Tide." Accessed September 28, 2018.
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