would go bankrupt and this would improve the 

 situation for those remaining. Since most of the 

 debt is to the public sector, it would mean the 

 government would have to write off some bad or 

 uncollectible claims. 



(2) Spokesmen for Sociedad National de 

 Pesqueria (a trade organization for the fishmeal 

 producers) are extremely concerned about excess 

 capacity and have indicated a willingness to 

 bail out the government through a program 

 where the government buys up the high-cost 

 plants and assesses the cost on the remainder 

 of the firms over 2-3 years by a fee per ton of 

 meal produced. Whatever methods are used 

 for eliminating the excess capacity, they will be 

 beneficial for the industry as a whole and reduce 

 the pressure on the government to increase the 

 overall catch quota. 



(3) In addition to eliminating the insolvent, 

 high cost, or marginal producers, a further 

 reduction in the licensed processing capacity 

 will be needed. Capacity should be reduced to 

 a level just sufficient to process the catch over 

 an extended fishing season. Currently the 

 licensed capacity of a plant is for tons of fish per 

 hour, and only rarely does a factory produce at 

 full capacity. To encourage fleet reduction, the 

 license should be issued to companies rather 

 than on a factory basis and as previously 

 mentioned, should be a percentage of the overall 

 catch quota. A quota might be either on input 

 of fish or output of meal. The latter is easier 

 to control since the meal is exported through a 

 government monopoly. A quota on input, how- 

 ever, would give a strong incentive to increase 

 the yield (output per ton of fish) and improve- 

 ment in this respect is badly needed. Quotas 

 could be based on the company's current share 

 of the market, or be put up for auction. 



Quotas or licenses to operate might be trans- 

 ferable or nontransferable. A transferable quota 

 could put large and small companies (one-plant 

 operators and multiplant operators) on a more 

 equal competitive basis. The author can see 

 little advantage in a nontransferable quota 

 except for the fact that it might prevent con- 

 solidation of the industry into too few hands. 



CONCLUSIONS 



To manage the anchoveta industry solely 

 through regulation of the processing phase 

 would very likely put the independent vessel 

 owners at a serious disadvantage. To prevent 

 this, a management program for the Peruvian 

 anchoveta industry should include both regula- 

 tions at the catching and the processing level. 

 Of the various alternatives available for manage- 

 ment of the Peruvian anchoveta industry, the 

 author would be in favor of relying on a fairly 

 high scrap and rebuild ratio to reduce the fleet. 

 Lifting of the moratorium on debt collection, 

 combined with transferable licenses for factories, 

 so market forces could be effective, might be 

 sufficient to reduce processing capacity to the 

 desired level. 



LITERATURE CITED 



BOEREMA, L. K., and A. HOLMSEN. 1970. Some 

 Economic Aspects of Management of Fleet Size in the 

 Peimvian Anchoveta Industry. Unpublished manuscript. 



HOLMSEN. A. 1970a. Cost Structure in the Peruvian 

 .■\nchoveta Industry. Unpublished manuscript. 



HOLMSEN. A. 1970b. Factors Affecting the Potential 

 Productivity of the Peruvian .Anchoveta Fleet. Lln- 

 published manuscript. 



Ill 



