mize net economic return or economic rent. 



If we are going to accept MSY as the basis 

 for managing a fishery, what economic ob- 

 jectives should we try to build into a new 

 fishery management program? As I mention- 

 ed earlier, the first objective would be to 

 seek the optimum amount of effort to harvest 

 the MSY, or at least a reduction in effort, 

 as a means of improving the catch and re- 

 turn per unit of effort in the fishery. In ad- 

 dition to this, we should also seek to build 

 into the management program some means of 

 insuring continued efficiency through time. 

 This means that over time the management 

 program must allocate the fishing right to 

 those economic resources that are most ef- 

 ficient in fishing. Thirdly, the program must 

 stimulate the development and adoption of 

 technological advancements in fishing. How 

 can these objectives be attained in fishery 

 management? 



The system I foresee consists of a com- 

 mercial fishing license issued either by the 

 Federal government or by joint agreement of 

 the Federal government and the individual 

 States concerned. Each license issued would 

 represent a specific amount of fishing effort. 

 Initially, the number of licenses and fishing 

 effort would have to accommodate all vessels 

 and crews that have historically been employ- 

 ed in the fishery. However, as vessels were 

 retired from use, licenses would be cancelled 

 until normal attrition reduced the amount of 

 effort to the desired level. When the number 

 of licenses have been reduced to the optimum 

 number, a market for the licenses would be 

 allowed to develop. Licenses could be sold or 

 leased. Thus, the more efficient manager of 

 a fishing enterprise would be given the op- 

 portunity to lease or buy fishing rights from 

 the less efficient operator. The total number 

 of licenses could be adjusted over time as 

 productivity of fish stocks and technology 

 merited. In this manner, the management 

 program would work toward allocating the 

 limited fishing rights to those fishing firms 

 that were most efficient. Moreover, it would 

 now be advantageous to the fishing firm to 



seek means of improving its efficiency and to 

 adopt new technology that improved efficiency. 

 Limitations could be placed on the number of 

 licenses that any one company could own or 

 control as a means of preventing someone 

 from developing a monopoly over the fishery. 



A licensing scheme of this nature would 

 generate a certain amount of economic rent 

 in the fisheiy. This economic rent could either 

 be taxed away in the form of the license fee 

 or could be allowed to accrue to the resources 

 employed in the fishery. If the rent is taxed 

 away, it should be used for administration of 

 the management program and for research 

 on and development of the resource itself. If 

 the rent is allowed, either in total or in part, 

 to accrue to the resources employed in the 

 fishery, it would in turn be redistributed in 

 the economy through taxes, and would ulti- 

 mately be built into the cost of production 

 through the cost of fishing licenses. In either 

 case, this should not be a serious deterrent 

 to initiating a licensing system. 



One of the most difficult problems to cope 

 with in the licensing system will be the adop- 

 tion of the effort base for the licenses. Licenses 

 could be based on vessels, tonnage of fish, or 

 an index of fishing effort. Vessels would be 

 the least adequate base for issuing fishing 

 licenses because of the variation in fishing 

 ability from vessel to vessel. It would certainly 

 seem technically possible to develop an index 

 of fishing effort and to define licenses in units 

 of fishing effort. Ideally the units of fishing 

 effort would be the link between the economic 

 aspects of harvesting and the biological model 

 used in assessing stock and yield chai'acter- 

 istics. 



The steps toward a more rational system of 

 managing fisheries will no doubt be a system 

 of compromises. Perhaps the way to facilitate 

 these compromises with the least loss of time 

 and effort will be to include the commercial 

 fishing industry in the actual development 

 of the specifics of new management programs. 

 The situation is sufficiently urgent that this 

 should be given the highest priority in our 

 "new look" toward the oceans. 



11 



