down might be a reasonable approximation. ^ 

 Forty-seven percent of the cost of harvesting 

 was found to be fixed and not related to the 

 number of fishing days, nor the size of catch. 

 Thirty-five percent of the cost was apportioned 

 to the size of the catch, of which 34% was the 

 crew share and social benefits. The remaining 

 18% was related to the number of days the 

 vessels were out fishing, catch or no catch. 



For a fishmeal factory the cost of fish is a 

 variable expense and this item alone amounted 

 to 59% of total cost. The variable cost of pro- 

 ducing meal and oil amounted to 75% of total 

 costs and the fixed cost 25% . Excluding the cost 

 of the fish, the variable costs were 39% and the 

 fixed costs 61% (Holmsen, 1970a). 



What the current overcapacity in industry is 

 depends on what kind of management program 

 one has in mind — whether one recommends a 

 1- or 2-month peladilla veda, whether one sticks 

 to the 5-day week rather than a 7-day week, etc. 

 Based on various alternatives from a 7-day 

 week and no veda to a 5-day week and a 2-month 

 peladilla veda, the fleet reduction necessary 

 was found to range from 38% to 14% (Boerema 

 and Holmsen, 1970). By using the coefficients 

 above, this would lead to savings ranging from 

 about $20 million annually in the first case to 

 about $6 million in the latter case. The savings 

 in the processing phase would also be significant. 

 An FAO management panel, which met in Peru 

 in June 1970, concluded that the technical 

 capacity of the factories could be reduced nearly 

 50% under year-round fishing, and that total 

 savings to industry from reduction of fleet size 

 and number of plants could perhaps run as high 

 as $50 million. No value can presently be put 

 on the lessened risk of overfishing and depletion 

 of the stock. 



ALTERNATIVE CONTROLS 



A fisheries management program should have 

 a double goal: 1) to protect the resource from 

 overexploitation, and 2) to prevent overinvest- 

 ment and economic wastes in harvesting and 

 processing. To achieve these goals in the 



^ The percentages are median obsei-vations based 



upon representative vessel size (140- to 220-ton 



capacity) and plants with technical capacity of 60-90 

 tons per hour. 



anchoveta fishery, restrictions can be put on the 

 fleet or on the factories or on both. Some 

 programs might achieve the desired result 

 rather fast, while others might take more time. 

 Alternative programs related to the catching 

 phase will first be discussed. 



Restrictions on Fleet Size 



(1) A reduction in the size of the fleet to the 

 desired level can be achieved by an embargo on 

 new construction. Despite the fact that a number 

 of vessels, which otherwise would have been 

 scrapped, would be repaired and remain in the 

 fishery, a fair number of vessels would disappear 

 from the fishery each year and the season for 

 those remaining would become longer. Argu- 

 ments against such a proposal would be that 

 older, smaller vessels in the fishery, which are 

 the highest cost producing units, would get an 

 additional "lease on life" and the fleet would 

 stagnate technically. 



(2) Another possibility with immediate effect 

 would be for the government to buy up the scrap 

 part of the fleet (the high cost producer), and 

 assess the cost on the remainder of the industry, 

 preferably through a fee per ton of meal produced. 

 A large number of such vessels would have to 

 be bought since each contributes very little to 

 the total catch. The industry would be better 

 off, however, since the marginal cost of the 

 remaining vessels would be far below the average 

 cost of the vessels removed from the fishery. 

 Such a program would have no long run effect, 

 however, if restrictions on new construction 

 were not implemented at the same time. 



A scrapping ratio would have to be intro- 

 duced limiting the annual output of productive 

 capacity to the amount of productive capacity 

 leaving the fleet during the year. Such a pro- 

 gram, which has some support in Peru, still 

 leaves a difficult question unanswered. Which 

 vessels should the government buy and scrap 

 and what would the prices be? Two 6-year old 

 150-ton vessels are not necessarily worth the 

 same price. Appraisal and judgment are called 

 for, which could easily result in kickbacks in a 

 country where civil service salaries are low and 

 where bribery has not been unfamiliar in 

 doing business. 



109 



