Abstract.- On l October 1986, 

 New Zealand introduced Individual 

 Transferrable Quota (ITQ) manage- 

 ment for most of its fisheries. ITQ 

 management was implemented to 

 address overfishing, overcapitaliza- 

 tion, and excess government regula- 

 tion. Quotas were based on catch 

 histories, with a quota "buyback" 

 (costing $42.4 million NZ) and pro- 

 rated cuts to achieve total allowable 

 catch (TAG) levels indicated by pre- 

 liminary stock assessments. Fixed 

 amounts of quota (defined by weight) 

 were issued in perpetuity. Annual 

 stock assessments are conducted. 

 Government stated that it would buy 

 or sell quota at market-determined 

 prices in order to adjust TACs. On 

 1 April 1990, ITQs were redefined as 

 proportions of annual TACs (known 

 as "proportional ITQs"). Govern- 

 ment extracts resource rent. 



To date, there is little evidence of 

 improvement in the condition of the 

 fisheries resources. It is difficult to 

 determine the economic effects of 

 ITQ management; however, econom- 

 ic conditions have worsened due to 

 factors which are unrelated to ITQ 

 management. Revenues to govern- 

 ment from the ITQ system have ex- 

 ceeded total costs, but there would 

 have been a deficit if government 

 had purchased quota to reduce TACs 

 to the levels indicated by stock as- 

 sessments. Government regulation 

 has not been reduced. 



Although there is general support 

 for ITQ management in New Zea- 

 land, many problems have been en- 

 countered: quota overruns resulting 

 from bycatch; inadequate stock as- 

 sessment capability; disagreement 

 over the level of resource rentals; 

 and failure of government to enter 

 the marketplace to reduce TACs 

 when necessary. 



ITQs in Mew Zealand: The era 

 of fixed quota in perpetuity 



Michael P. Sissenwine 



Headquarters, National Marine Fisheries Service, NOAA, Silver Spring, Maryland 20910 



Pamela M. Mace 



P,0 Box 7357, Silver Spring, Maryland 20907 



The idea of managing fisheries by In- 

 dividual Transferable Quotas (ITQs) 

 is not new. Christy (1973) suggested 

 the method, and Maloney and Pearce 

 (1979) provided the economic ration- 

 ale for it. Until recently, there were 

 only a few applications of ITQ man- 

 agement (e.g., southern bluefin tuna, 

 Geen and Nayar 1988; Lake Erie 

 freshwater fisheries, Muse and 

 Schelle 1989). One application that 

 has received considerable attention is 

 the ITQ management of fisheries in 

 New Zealand. Two reasons for this 

 attention are that (1) New Zealand is 

 applying ITQ management on a more 

 comprehensive national scale than 

 ever before, and (2) New Zealand 

 officials have done a good job of de- 

 scribing their ITQ system to the rest 

 of the world (e.g., Clark et al. 1988, 

 Crothers 1988). New Zealand's early 

 experience with ITQ management 

 is of interest to the United States 

 because ITQ management is being 

 planned or discussed for several fish- 

 eries (e.g., Pacific sablefish and hali- 

 but, South Atlantic wreckfish, and 

 East Bering Sea groundfish). It has 

 recently been implemented for Mid- 

 Atlantic surf clams and ocean qua- 

 hogs. This paper reviews the poten- 

 tial benefits and problems of New 

 Zealand's ITQ management system 

 based on firsthand observations of 

 the authors. 1 The main body of the 



paper was completed in mid-1990. A 

 postscript has been added to reflect 

 more recent events through 1991. 



Before describing the fisheries man- 

 agement situation in New Zealand, 

 the authors want to caution that by 

 pointing out problems, they are not 

 condemning the ITQ system. Despite 

 problems, there seems to be a gen- 

 eral acceptance that ITQs are the 

 way New Zealand fisheries will be 

 managed. There is no widespread 

 sentiment, either within government 

 or the industry, to repeal ITQs. A 

 regional poll conducted shortly after 

 implementation of the ITQ system 

 (Dewees 1989) found that the major- 

 ity of the fishing industry favored it. 

 It would be interesting to repeat the 

 poll nationwide now. The authors are 

 of the opinion that the industry would 

 not want to return to the fisheries 

 management situation (or lack there- 

 of) that preceded ITQs. 



New Zealand 

 fisheries setting 



Fisheries have always been impor- 

 tant to New Zealand. Legend has it 

 that a Maori (the native people of 

 New Zealand) pulled up the North 

 Island of New Zealand from the sea 

 on a hook-and-line while fishing. 

 Fishing was so important that the 



Manuscript accepted 16 December 1991. 

 Fishery Bulletin, U.S. 90:147-160 (1992). 



' The authors of this paper were fortunate to 

 have the opportunity to observe ITQ manage- 

 ment in New Zealand firsthand. The first 

 author made six trips to New Zealand dur- 

 ing the first three and a half years of ITQ 

 management, including approximately seven 



months employed by the New Zealand Fish- 

 eries Research Centre. The second author 

 was employed by the New Zealand Fisheries 

 Research Centre from August 1986 until May 

 1989. Both authors maintain contact with the 

 fisheries management situation in New Zea- 

 land through their previous affiliations. 



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