Course:ECON371/UBCO2009WT1/GROUP2/Article1
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Group 2
Article 1: Chum Salmon Fishery Suspended in Northern Yukon
http://www.cbc.ca/canada/british-columbia/story/2009/09/21/yukon-chum-salmon.html
Summary
The Federal Department of Fisheries & Oceans has temporarily suspended the Chum Salmon fisheries for ALL people in the Yukon Porcupine River area, First Nations included. Low numbers of fish led to these restrictions and a government official has stated that it may be related to a problem in the marine environments and ocean. These restrictions are becoming a common occurrence that residents are starting to expect.
Introduction (What's going on)
External research by our group and inference from the article indicates that a portion of the problem being experienced on the Porcupine River is connected to the chosen topic for group 2, overfishing in the Pacific and area. This is likely the cause of the low salmon run, which is also stated indirectly by a government official in the article. This is an excellent opportunity to analyze the situation in terms of Environmental Economics, as it is a great example of the problems experienced with Open Access resources.
After looking at the problems with Open Access resources, the government's attempts to solve the associated problems can be looked at, as without intervention and education people will continue to fish at unsustainable rates. Closing the salmon fishery on the Porcupine River is only one of the techniques the government is attempting to use.
Fisheries as an Open Access Resource (Why it's a problem)
Fishery stocks are an Open Access resource. They are accessible to anyone with the proper equipment and determining ownership on individual fish is not feasible. All the involved parties are not effectively in communication at all times and can not coordinate activities. In addition to the private costs of catching fish such as boats and labor, there are also External costs. These costs include depletion of fish stocks and ecosystem damage due to fishing techniques.
The only costs that are quantifiable and require payment up front are the private costs. The External costs are not quantifiable or easily observable. The effects of these costs are far reaching and long term. Overfishing in the ocean and habitat damage can effect the salmon run on Porcupine River thousands of kilometers away.
Like other Open Access Resources, fishery stocks are being overused and not managed in a sustainable way. This is because producers (fishermen, first nations) produce (catch) at a rate that is in equilibrium only to the recognizable private costs. The social costs (decreased future stocks, reduced catches for all parties) are not easily assigned a dollar value cost and therefore are easy to overlook/ignore. If people were able to see and had to pay the true social cost (External Cost + Private Cost) then they would produce at a much lower rate. This higher cost curve would intersect the demand curve at a lower quantity for Q* than is currently recognized.
Government Regulation (What's being done to fix it)
In Canada the Department of Fisheries and Oceans (the DFO) monitors and manages fisheries. The DFO uses stock recruitment curves and spawner data from previous years to calculate how many fish should be caught. Stock recruitment curves are more often including depensatory dynamics (when fish do NOT recover from very low populations) which has led to the DFO closing fisheries more often. Previously fishing was regulated less carefully, as the DFO assumed that if overfishing occured then issuing fewer fishing permits in the next year would allow the fish to return. Overfishing is now more carefully regulated in order to keep fish stocks above the critical population so that fish will continue to recover from fishing.
There are four main management strategies that governments can use to control fisheries:
a) taxation on input with vessel licensing b) taxation on output and restriction on fishing techniques c) control and limited entry into fishing areas d) catch quota
In this article the DFO is using option a, where they are granting no licenses to commercial fisheries. This is a case where the DFO has decided the cost curve is so high that it begins at a point higher than the demand curve (when output is zero). This is why the fishery has been closed. Chum salmon are harvested all along the BC coast, and as such the national supply of chum salmon will be only slightly diminished by the closing of this fishery; however, the supply in the northern Yukon region will obviously be greatly diminished. Nationally the price may increase slightly due to this slight decrease in supply, and locally the price will increase greatly as the supply of salmon will be only those that are shipped in.
(Nan's Thoughts)
The economics activity makes impact on nature resources. For example, Salmon is a kind of food resources, normally is renewable; however, Salmon will die out over time according to people’s over fishing. And it is becoming non-renewable resources; it has much effect on biological chain and makes people suffer from loss and damage. The human race will be threatened with extinction of food resources. So the environment policy decision is coming out, like the news: The federal Department of Fisheries and Oceans imposed a two-week moratorium on chum salmon fishing on the Porcupine River.The policy is designed to prevent over fishing of fishery. If there is not the policy to control particular environmental problems, anyone is free to fish because it is also an open-access resource. As a result, the problem arises and the salmon run will be weaker until extinction.
Nature resources have a great deal to say about the placement of the supply schedule. When this two-week moratorium on chum salmon fishing is imposed, less salmon is available on the market. Therefore, the supply of salmon will reduce. A decrease in supply will lead to an increase in equilibrium price and a decrease in equilibrium quantity. The customers who are willing to buy salmon must pay more than before. Finally, few people can afford the price of Salmon, maybe the number of fisheries will become less. We hope the salmon run can be normal later on.
Prof's Comments
Open access is certainly the main problem causing overfishing. I think that the action described in the article more closely corresponds to policy (c) than policy (a). A moratorium is about the most severe form of access control going. Except for fines, there really is no monetary incentive leading people to reduce their fishing effort. The trick with your theme is going to be finding different ways of dealing with the open access problem. They do exist!