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profitability may encourage larger harvests by rewarding economies of scale. Poor 

 profitability and large investments in equipment that is idled for much of the year (as 

 a result of the rapid harvest of allowable catch by large numbers of fishers with a 

 high level of fishing power) lead the fishing industry to exert pressure on the 

 government to increase harvest levels above what are thought to be sustainable levels. 



Under open access, more fishing effort is often expended than is necessary to 

 harvest a given amount of fish (i.e., these fisheries are often overutilized). In any 

 fishery, there are two levels of fishing effort that yield the same catch. However, 

 individual fishers in an open access fishery have strong incentives to expand fishing 

 effort as long as it increases individual profitability, due to the race for fish; hence, 

 total effort is usually greater than the amount required to harvest a given amount of 

 fish. Total profits from the fishery are less than they could be, because the 

 expenditure of extra effort entails extra cost, and because catch per unit effort 

 decreases as the fish population decreases. 



Government subsidies and grants have encouraged the development of new 

 fisheries, some of which have crashed due to over-investment and lack of 

 understanding of stock population dynamics. Pressure for still more government aid 

 is triggered by the fluctuation of fish abundance in response to a complex array of 

 largely unpredictable variables. When population levels are relatively stable, harvest 

 rates tend to stabilize at levels that are often excessive. A run of good years and the 

 race for fish encourage additional investment in fishing equipment and processing 

 capacity. When fish populations decrease, the fishing industry often appeals to the 

 government to save jobs and income, and typically the government responds by 

 increasing the allowable catch (thus jeopardizing the fish population) or by providing 

 subsidies. Failure to inhibit investment during good years coupled with pressure not 

 to disinvest during poor years results in a heavily subsidized industry that overharvests 

 the resource or in the unproductive idlement of fishers and equipment after shorter 

 and shorter seasons. 



* Subsidies that increase fishing power should be discouraged so as to address 

 overcapitalization. 



Limiting access to fisheries without providing individual fishers with confidence 

 that they can harvest a fair share of the TAC without fear of losing part of it to 

 other fishers does not end the race for fish. Even if many inputs to fishing effort 

 (e.g., vessel horsepower, vessel size, gear, etc.) are restricted, incentives still exist for 

 increasing unrestricted components of effort. For example, if the number of vessels 

 is limited, vessel capacity might be increased, or if mesh size of nets is restricted, 

 deployment and hauling rates might be increased to offset the restriction. This "game" 

 of getting around input restrictions has subverted most attempts to limit inputs. 

 Historically, fishing effort has actually increased under limited entry with input controls 

 due to the persistence of the race for fish, the ingenuity of fishers in getting around 

 input restrictions, and the tendency of managers to grant excessive numbers of licenses 

 in response to enormous political and economic pressure. 



Individual Transferable Quotas 



Management based on a conservative cap on allowable harvest combined with 



8 



