76 IKFNSING ANO Mill Dl VhlOPMIN 1 It )l K ■» 



throughout nu>st ot the world wcic o(xn to unrestricted 

 numbers ot fishermen and tishmg enterpnses. Harvesting 

 was, and still is, based oi\ the "rule i>r capture": that is. 

 unlike other natural resources, tish in the sea arc not 

 assigned through property rights or licences to any partic- 

 ular users; each user competes directly with all the others 

 tor a share ot" the catch, .ind has no right to any particular 

 quantity until he has landed it. 



In these circumstances, temporary profits will stimulate 

 fishermen to expand their vessels' fishing capacity in 

 order to increase their catch, and will attract new 

 entrants into the fishery. So the fleet will expand even it it 

 is already capable of taking the entire harvest. Thus, as 

 we have seen repeatedly on the Pacific coast, an increase 

 in the price of fish will set of!" a wave of investment in 

 vessels and gear even when there are no more fish to 

 catch. The result is the excess fishing capacity we observe 

 in all of our major fisheries. 



Several effects of this phenonenon should be noted. 

 First, it threatens the sttx-ks because constraining over- 

 expanded fleets to the yield capabilities of the resources is 

 difficult. 



In an open-access, free-for-all fishery, com- 

 peting fishermen try to catch all the fish avail- 

 able to them, regardless of the consequences. 

 Unless they are checked, the usual conse- 

 quence is a collapse of the fishery. . . .' 

 Ironically, these pressures sometimes have the opposite 

 effect: they prevent full utilization of the available 

 catches because fisheries managers fear that an opening 

 of a small fishery will attract so much fishing power that 

 the stock will be decimated. 



Second, the redundant capacity raises the capital, 

 labour and ojTerating costs involved in fishing, and so 

 erodes the net returns the fishery could otherwise gen- 

 erate. The scope for carrying the extra costs of surplus 

 capacity is greatest in those fisheries that are capable of 

 yielding the highest returns. Thus we find the most con- 

 spicuous overcapacity in our most valuable fisheries — 

 salmon, roe-herring and halibut — and less in our mar- 

 ginal fisheries. So even the most valuable fisheries yield 

 low returns in the long run because the effort expended 

 tends to rise, and the costs inevitably increase to the 

 point where they are equal to, or absorbed in, the full 

 value of the harvests. 



Third, such fisheries are unstable. Any increase in the 

 available catch, or rise in the price of fish, or technologi- 

 cal development that lowers the cost of fishing effort, 

 induces fleet expansion; opposite changes force painful 

 contraction through financial failures. This has been the 

 dismal history of major fisheries on Canada's Atlantic as 

 well as Pacific coast, and indeed throughout the western 

 world. 



All of these efltcts - st(x:k depletion, poor economic 

 performance and instability - result from treating the 

 resource (the fish) as c(^mmon property until they arc 

 caught, and are normal whenever resources are treated 

 this way. It is "The Tragedy ol the Commons." 



The overexpanded fishing capacity is not the result of 

 irrational behaviour on the part of fishermen. When an 

 industry is profitable, the producers will usually expand 

 their productive capacity; and as long as there are no 

 senous barriers to new entrants to the industry, their 

 numbers will grow. But unlike most other indastries, such 

 expansion in fisheries takes place even when no addi- 

 tional production is possible. The harvest is simply 

 spread more thinly across the expanded fleet and the cost 

 of fishing is driven upwards. 



The technology of fishing becomes distorted as well. 

 Competing for larger shares of the catch, vesselowners 

 are driven to adopt questionable innovations to increase 

 the speed of their vessels, to increase hold capacity, to 

 reduce running time and to build vessels capable of 

 working further offshore in order to intercept fish before 

 others. These add to the cost of fishing and distort the 

 fleet's structure. 



The potential net returns (or "resource rent," in econo- 

 mists' jargon) in the major fisheries of the Pacific coast 

 are very high. For example, I have no doubt that our 

 catches of salmon and roe-herring could be taken with 

 fleets half their present size and at half the cost now 

 expended in fishing. If this were done, the value of the 

 landings could well exceed the costs of harvesting in 

 these fisheries by something in the order of $75 to $100 

 million annually. Currently, these potential returns are 

 not realized at all; they are dissipated in excessive costs 

 of fishing. 



So, in the interests of both resource conservation and 

 industrial performance, fisheries policy must reverse the 

 tendency of fleets to expand their fishing capacities 

 redundantly and reduce the accompanying waste in capi- 

 tal and labour. Indeed, protection and enhancement of 

 the natural resource can be of little benefit if the major 

 user, the commercial fishery, remains so inefficiently 

 organized. 



The conspicuous economic waste in overexpanded 

 fleets figures importantly in this report because my terms 

 of reference direct me to make recommendations toward 

 ensuring that the regulatory system will promote "eco- 

 nomic efficiency in the development of the commercial 

 fishing fleet." My recommendations in this part of my 

 report are therefore aimed at rationalizing the commer- 

 cial fishing fleets, reducing the excess capacity and associ- 

 ated excessive costs of fishing, and thereby allowing the 

 significant net returns that our resources are capable of 

 yielding to be realized. 



