Economics of the Massachusetts fisheries

Economic Aspects of Massachusetts Groundfisheries

The definitive cause of the current economic "disaster" in New England is the treatment of the ocean's finite fisheries as a public good; Alex Hardin explains this problem in the land mark article, "Tragedy of the Commons." A public good fulfills "two specific properties: (1) nondiminishability, which means that one person's use of the good does not diminish the amount of it available for others; and (2) nonexcludability, which means that it is either impossible or prohibitively costly to exclude people who do not pay from using the good" (Frank, 1994). The oceans' resources do not fulfill either of these two properties. Since the ocean is treated as a public good, the only barriers to entry into the fishing industry are the cost of a boat and the opportunity costs of fishermen's time. Once a boat is acquired, it is economically beneficial to fish the oceans as fast as possible, in order to make as much revenue as possible. As the fisheries are depleted, this problem is magnified as fishermen are forced to compete with other fishermen for the dwindling fish stock. This "tragedy of the commons" ultimately affects the Massachusetts ground fisheries to a greater extent than many other regions' fisheries. The government inadvertently allowed the entrance of too many fishermen into the fishing industry by decreasing entrance costs through subsidies after the implementation of the Magnuson Fishery Conservation Act of 1976.

The Magnuson Fishery Conservation Act of 1976, which extended the United States territorial limit to 200 miles off of the coast, was implemented in order to redistribute income and fish catch of off-shore fisheries to American fishermen, away from foreigner fishermen. At the time, foreign fishing vessels accounted for 71 percent of the total catch. The Magnuson Act also "officially gave the federal government the authority to manage fisheries" and created the National Marine Fisheries Service to manage and ensure the sustainment of fish stocks (U.S. Magnuson Fishing Act webpage). However, until recently, keeping foreign vessels out of the limit, or Exclusive Economic Zone (EEZ), was the only goal in the Magnuson Act that was met.

After foreigners were prohibited access to the EEZ, the government subsidized domestic fishermen through low interest loans and other governmental policies. From 1976 to the late 70's, the number of fishing vessels "soared from 825 to 1423" (Russell, 1996). At the same time, quotas and other regulations were dropped, allowing the annual catch to rise to all time highs, encouraging more entry. But this "expansion", which was caused by the "tragedy of the commons," over-subsidization by the government, and the subsequent misrepresentation of fish prices, was short-lived.

Catches are falling dramatically: "A Georges Bank haddock fishery that yielded as much as 50,000 metric tons annually during the 1960's saw catches plummet to 880 metric tons by 1993. During the same period, numbers of available cod and yellowtail flounder also fell by more than 80 percent, and in the Gulf of Maine the haddock were declared commercially extinct last year" (Russell, 1996), (See biological aspects of Massachusetts groundfisheries). In Massachusetts, there are "fewer than 150 in a commercial fleet that 15 years ago numbered more than 450" (Rimer, 1994). The overfishing, and consequently, the decrease in reproduction of fish is costing the fishing industry an estimated 137 million pounds of groundfish a year, which is worth $350 million in gross income. (Nickerson, 1994) (See sociological aspects of Gloucester, Massachusetts)

The 1991 lawsuit filed by the Conservation Law Foundation and the Massachusetts Audobon Society against the federal government, along with the decline in fishing stocks and fishermen, spurred increases in regulations. The Magnuson Act ultimately failed in sustaining fisheries because the New England Fishery Management Council and seven independent regional bodies, who were in charge of "developing and enforcing fishery management plans across the United States" are "dominated by fishermen or fishing industry members who have tended to vote the short-term interests of the industry over the long-term good of the marine resource upon which the industry depends" (Nickerson, 1994). The most recent regulations, including those imposed by Amendment Seven, "cut the number of days at sea from 139 in 1996 to 89 in 1997, --Increase the minimum catch size for cod and haddock from 19 inches to 20 inches this year, and to 21 inches in 1997. --Closes Cape Cod Bay and a section of the South Shore coastal waters to all groundfishing during spawning season in March,"(Niiler, 1996) among other consequential regulations.

Many biologists estimate that it could take as long as 15 years for fish stocks to fully recover. The future for small-scale New England fishermen looks bleak; more regulation means less fishing, less catch, and therefore, less revenue. Small-scale fishermen, who already live on a minimal profit margin, have been, and will continue to be forced out of the industry, while corporate fishermen, or factory trawlers, who have taken advantage of economies of scale will be able to absorb increasing costs and decreasing catches.

Fishermen argue that it is the government's responsibility to either deregulate fisheries or directly subsidize them before and after they are forced out of the industry. Nickerson asserts that the fishermen "were set up for a fall by government incentives to increase the size and capacity of their vessels. There has never been any incentive for them to cut back the fishing effort or otherwise conserve the resource--quite the opposite" (Nickerson, 1994). On the other hand, the government put regulation in the hands of the New England Fishery Management Council and the regional bodies, who, acting on short-run self-interests, overfished the groundfisheries well beyond their maximum sustainable yield. The New England Fishery Managemet Council "has admitted the problem of overfishing since the early 1980's but has left off dealing with it. . . If a lot of fishermen are going to go down, and some surely are, the real reason is flagrant neglect of long-term environmental interests in favor of short-run commercial gains" (Nickerson, 1994).

The question of who is more responsible is no longer relevant; the government must weigh the importance of small fishing towns, such as Gloucester, Massachusetts. Gloucester, and hundreds of other fishing villages in New England, will be forced out of existence if the government fails to support them. Clinton has made emergency funds available following the "Declaration of Fishery Disasters", but this funding hasn't offset the losses attributed to the increasing regulations and diminishing fish stocks. The New England buy back program, instituted earlier this year, had only $2 million in funding, which is enough to buy back just 10 boats. Ultimately, the government must decide if it can once again subsidize the fishing industry; right now the subsidy is not for the creation of a fishing industry as it was in the late 70's, but rather for the survival of one.

An Economic Overview of fisheries management

Back to the Tragedy of the Coastal Commons