Sissenwine and Mace: ITQ management in New Zealand 



157 



General issues 



Many potential problems of ITQ management are prob- 

 lems associated with TAG management in general. In 

 some cases they are exacerbated by individual quotas. 

 Table 5 compares the problems and benefits associated 

 with input controls (e.g., effort limits, closed areas or 

 seasons), TACs, and ITQs. TAG management requires 

 more frequent and timely stock assessments than 

 management by most input controls (Sissenwine and 

 Kirkley 1982). The problem is particularly severe for 

 short-lived species (Gopes 1986). The problem of pro- 

 viding stock assessments for ITQ management is about 

 the same as that for TAG management. Gatch statistics 

 are one component of stock assessments. The need for 

 catch statistics is generally greater for TAG manage- 

 ment than for management by input controls. The need 

 is even greater for ITQs because statistics on individual 

 quota holders are the basis of management. Both TAG 

 and ITQ management encourages "data fouling" or 

 misreporting (Gopes 1986), although the incentive is 

 greater for ITQs. Similarly, enforcement is generally 

 more of a problem for TAG management (although this 

 is not universally true) because the catch has to be ac- 

 curately enumerated. For ITQs, it must be accurately 

 enumerated for individual quota owners, some of whom 

 may have developed successful methods for circum- 

 venting the system. The bycatch problem is more dif- 

 ficult for TAG management than for input controls. For 

 ITQs, the bycatch problem is even more difficult 

 because individual quota owners must adjust their port- 

 folios to match their multispecies catch rates. 



In terms of the conservation benefits, input controls, 

 TAGs, and ITQs are all potentially effective (Sissen- 



wine and Kirkley 1982). ITQs may have a potential ad- 

 vantage over TAG management because, with owner- 

 ship, there should be greater incentive for the industry 

 to cooperate. But limited-entry licensing (a form of in- 

 put control) also conveys privileges that may encourage 

 industry cooperation. In terms of economic benefits, 

 ITQs are superior in theory. Both input controls and 

 TAG management eventually allow dissipation of 

 resource rent. For both forms of management, there 

 is an incentive for fishermen to increase their cost of 

 fishing, in order to gain a larger share of the resource, 

 until the rent is dissipated. In practice, the actual 

 economic benefits of input controls, TAGs, and ITQs 

 are probably fishery-specific. 



Learning from 



New Zealand's experience 



There is much to be learned from New Zealand's ex- 

 perience with ITQ management. New Zealand took a 

 systems approach. Gomprehensive new legislation was 

 introduced. Enforcement needs, penalty schedules, 

 reporting and recordkeeping requirements (including 

 wholesalers and retailers), a quota trading system, a 

 process for appealing initial allocations, a buyback 

 scheme for "rationalization" of some fisheries, mech- 

 anisms for controling bycatch, the principle of resource 

 rentals, and public and fishery industry education were 

 all considered. New Zealand made some mistakes, but 

 it would have probably made more if its approach had 

 been piecemeal. 



The authors are of the opinion that one mistake made 

 by New Zealand fisheries managers was to establish 

 ITQs in fixed amounts, valid in perpetuity. This method 

 was used because it was thought that ITQs in fixed 

 amounts would create a more certain environment for 

 industry; they would provide a mechanism for govern- 

 ment revenue-raising, since government believed TAGs 

 were conservative and future quota sales were likely; 

 and the trading price for fixed amounts of quota would 

 be the most effective method to obtain information to 

 set resource rentals (Glark et. al. 1988). 



Apparently, the government did not recognize how 

 uncertain TAGs might be (due, for example, to errors 

 in stock assessments) or how often TAGs might need 

 to be adjusted (due, for example, to the inherent 

 variability in the size of fish stocks) by entering the 

 market to buy and sell quota, since the revolving fund 

 (or some other method) was not established. It is also 

 possible government did not expect the price of quota 

 to be so high as to make it prohibitively expensive for 

 the government to buy it to reduce quotas. In fact, the 

 sales price of quota may not have been economically 

 rational, in which case government would not want 



