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Australianfisherieseconomicindicatorsreport2014Financial and economic performance of the Eastern Tuna and Billfish Fishery AndreaBath,MaggieSkirtunandRichardGreen
Research by the Australian Bureau of Agricultural
and Resource Economics and Sciences
April 2016
ii
©CommonwealthofAustralia2016
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Cataloguingdata
Bath,A,Skirtun,M&Green,R2016,Australianfisherieseconomicindicatorsreport2014:financialandeconomicperformanceoftheEasternTunaandBillfishFishery,ABARES,Canberra,April.CCBY3.0.
ISSN2204‐9444ISBN978‐1‐74323‐284‐2ABARESproject43351
Internet
Australianfisherieseconomicindicatorsreport2014:financialandeconomicperformanceoftheEasternTunaandBillfishFisheryisavailableatagriculture.gov.au/abares/publications.
AustralianBureauofAgriculturalandResourceEconomicsandSciences(ABARES)
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TheAustralianGovernmentactingthroughtheDepartmentofAgricultureandWaterResources,representedbytheAustralianBureauofAgriculturalandResourceEconomicsandSciences,hasexercisedduecareandskillinpreparingandcompilingtheinformationanddatainthispublication.Notwithstanding,theDepartmentofAgricultureandWaterResources,ABARES,itsemployeesandadvisersdisclaimallliability,includingfornegligenceandforanyloss,damage,injury,expenseorcostincurredbyanypersonasaresultofaccessing,usingorrelyinguponinformationordatainthispublicationtothemaximumextentpermittedbylaw.
Acknowledgements
TheABARESfisheriessurveyprograminvolvesthecooperativeeffortofindustry,fisheriesmanagement,agenciesandABARESstaff.
Industry—ABARESsurveysarevoluntary,sothecooperationofEasternTunaandBillfishFisheryfishingoperatorsandtheiraccountantsinprovidingdataisessentialforthesuccessofthefisheriessurveys.Withoutthisassistancethesurveyswouldnotbepossible.
Managementagencies—theAustralianFisheriesManagementAuthority(AFMA)providedlogbookandaddressdata,aswellasfisherymanagementcostsandgeneralinformationaboutthesurveyedfisheries.CommentsbyAFMAonearlierdraftsarealsogratefullyacknowledged.
ABARESstaff—sampledesignandestimationwasundertakenwithassistancefromLindsayPenrose,BelindaBarnesandMarkChambers.PatriciaHobsbawnandRupertSummersonhelpedinprovidingthenecessarydataandmaps.RobertCurtotti,IlonaStobutzkiandPeterGoodayprovidedcomments.
TheDepartmentofAgricultureandWaterResourcesfundedthisreportthroughtheFisheriesResourcesResearchFundandABARES.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
iii
Contents
Summary 1
Keyresults 1
1 Introduction 4
2 Background 6
Descriptionofthefishery 6
Keyeconomictrends 7
Currentmanagementarrangements 7
DemographicprofileoffishersoperatingintheETBF 10
3 Financialandeconomicperformance 11
Financialperformance 11
Economicperformance 14
4 Otherkeyperformanceindicators 16
Productivity 16
Termsoftrade 17
Managementcosts 17
Entitlementvalues 19
Quotalatency 19
5 Performanceagainstmanagementobjectives 20
AppendixA:Surveydefinitions 21
Financialperformance 21
Neteconomicreturns 22
Survey‐basedestimationofneteconomicreturns 23
Neteconomicreturnsandeconomicperformance 24
AppendixB:Surveymethods 25
AppendixC:Non‐surveybasedestimationofneteconomicreturns 28
AppendixD:Productivityandtermsoftrademethodology 31
Productivitymeasurement 31
Termsoftrademeasurement 31
Data 31
References 34
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
iv
Tables
Table1Keyfinancialperformanceresults,EasternTunaandBillfishFishery 2
Table2Keyeconomicperformanceresults,EasternTunaandBillfishFishery 2
Table3Financialperformanceofboatsoperating,EasternTunaandBillfishFishery 12
Table4Fisherycashprofitandneteconomicreturns,EasternTunaandBillfishFishery 14
Table5EstimatedmarketpriceofindividualquotaSFRs,EasternTunaandBillfishFishery 19
TableC1Regressionmodelforaveragecashreceipts,EasternTunaandBillfishFishery 29
TableC2Regressionmodelforaverageoperatingcosts,EasternTunaandBillfishFishery 29
Figures
Figure1Landedcatchofkeyspecies,EasternTunaandBillfishFishery,1998–99to2013–14 8
Figure2Realgrossvalueofproduction,EasternTunaandBillfishFishery,1998–99to2013–14 8
Figure3Exchangerateandrealunitprice,EasternTunaandBillfishFishery,1998–99to2013–14 8
Figure4Realneteconomicreturns,EasternTunaandBillfishFishery,1998–99to2013–14 9
Figure5Numberofvesselsoperating,EasternTunaandBillfishFishery,1998–99to2013–14 9
Figure6Keymanagementchanges,1995–96to2013–14 9
Figure7Trendsinkeyfinancialperformancevariables,EasternTunaandBillfishFishery,2002–03to2012–13 13
Figure8Trendsineconomicreturns,EasternTunaandBillfishFishery,2002–03to2013–14 15
Figure9Productivityindexes,EasternTunaandBillfishFishery 16
Figure10Inputcostandoutputpriceindexes,EasternTunaandBillfishFishery 17
Figure11Totalmanagementcosts,EasternTunaandBillfishFishery 18
Figure12AveragemanagementcostperactivevesselandasashareofGVP,EasternTunaandBillfishFishery 18
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
v
Maps
Map1Relativefishingintensity,EasternTunaandBillfishFishery,2014 6
Boxes
Box1Economicindicatorsinfisheriesmanagement 5
BoxD1Fisherindex 32
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Summary ABARESsurveysofCommonwealthfisheriesprovideinsightsintothedriversoffisheryeconomicandfinancialperformanceandhowmanagementandpolicychangesinfluencethis.ThisreportprovidesinformationaboutthefinancialandeconomicperformanceoftheEasternTunaandBillfishFishery(ETBF).Survey‐basedresultsarepresentedfor2011–12and2012–13;preliminarynon‐surveybasedresultsarepresentedfor2013–14.
TheETBFisamultispeciesfisherythatoperatesinwatersfromCapeYorktotheVictoria–SouthAustraliaborder,encompassingwatersaroundTasmaniaandthehighseasofthePacificOcean.Manyofthespeciescaughtinthefisheryareinternationallyshared,withAustralia’sdomesticmanagementarrangementsconsistentwithAustralia’scommitmentstotheWesternandCentralPacificFisheriesCommission(WCPFC).ThemajorityofthecatchistakenalongtheQueenslandandNewSouthWalescoast.ThekeylandingportsforthefisheryareMooloolaba,Bermagui,Cairns,CoffsHarbour,SouthportandUlladulla.Thefisherypredominatelyusespelagiclonglinetotargettunaspecies(mainlyyellowfin,bigeyeandalbacoretuna),swordfishandstripedmarlin.Inthe2013–14financialyeartheETBFgeneratedagrossvalueofproductionof$31.2million,makingitthesecondhighestvaluedCommonwealthtunafisheryaftertheSouthernBluefinTunaFishery.
Neteconomicreturns(NER)isthekeyperformanceindicatorinthesereportsandismeasuredatthefisherylevel.Itmeasurestheeconomicreturnearntbythefisheryassumingallresourcesusedinfishingactivities,includingfamilylabouranduseofthefishingoperator’sboatcapital,andthecostofmanagingthefisheryarepaidfor.AccordingtotheFisheriesManagementAct1991,theAustralianFisheriesManagementAuthority(AFMA)isrequiredtopursuethemaximisationoftheneteconomicreturnstotheAustraliancommunitythroughmanagingCommonwealthfisheries(AFMA2014).InterpretationofNERtrendsandtheothereconomicindicatorspresentedinthisreportcanassistinassessingAFMA’sperformanceagainstthisobjective.
TheeconomicperformanceoftheETBFhasimprovedsubstantiallysincetheearly2000s.Fromnegativelevelsin2003–04,NERsteadilyincreasedtobecomeslightlypositivein2010–11,thefirsttimesince2000–01.Thispositivechangewasdrivenprimarilybyimprovedproductivityofthefleet,andreducedoperatingcosts.TheexitoflessefficientvesselsfromthefisheryfollowingtheimplementationoftheSecuringourFishingFuturestructuraladjustmentpackagebetween2005and2006,wouldassistinreducingcostsforremainingvesselsbutachangeincatchcompositiontowardhigherunitvaluespeciesalsoplayedaroleinimprovingreturns.NERremainedpositivefrom2011–12to2013–14butdeclinedin2012–13and2013–14tolevelsthatwereonlyslightlypositive.ThedecreaseinNERfrom2011–12to2012–13wasprimarilydrivenbyhigherfuelprices.
KeyresultsInthissurvey,thesurveypopulation—definedasvesselsthatrecordedmorethanonetonneofcatch—was47vesselsin2011–12and41vesselsin2012–13.Fromthispopulation,17vesselsweresurveyedfor2011–12and14vesselsfor2012–13,representing36percentofthepopulationin2011–12and34percentin2012–13.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Financialperformance ProfitabilityfortheaverageETBFoperatorwaspositivein2011–12and2012–13.Profit
atfullequity,aprofitindicatorthatassumesallassetsarefullyownedbyoperators,declinedfortheaverageboatinthefisherybetween2011–12and2012–13,from$139612to$86492(Table1).Therateofreturntofullequitydeclinedfortheaverageboatinthefisherybetween2011–12and2012–13,from9percentto7percent.
Thedeclineinprofitatfullequitywaslargelyaresultofhighertotalcashcosts,drivenbyincreasedspendingonfuel.
Table 1 Key financial performance results, Eastern Tuna and Billfish Fishery
Vessel‐levelaverage
Category Unit 2011–12 2012–13
Totalcashreceipts $ 1025752 1048354
Totalcashcosts $ 892325 970647
Boatcashincome $ 133428 77706
–lessdepreciation $ 33232 32269
Boatbusinessprofit $ 107568 45702
–plusinterest,leasing,rent $ 32044 40791
Profitfullequity $ 139612 86492
Rateofreturntofullequity % 9 7
Economicperformance Neteconomicreturns(includingmanagementcosts)forthefisheryfellfrom$2.9million
in2011–12to$0.2millionin2012–13(Table2).
Lowerneteconomicreturnsin2012–13weremainlyaresultofalargerdeclineinfishingincomerelativetofallingfishingcosts,reflectinglessvesselsoperatinginthefisheryin2012–13.
In2013–14thepreliminaryNERwereestimatedtofallfurtherto$0.1million.
Table 2 Key economic performance results, Eastern Tuna and Billfish Fishery
Totalfishery
Category Unit 2011–12 2012–13 2013–14p
Fishingincome $m 43.9 38.6 39.3
Operatingcosts $m 38.7 36.4 37.7
Fisherycashprofit $m 5.2 2.2 1.6
–lessownerandfamilylabour,opportunitycostofcapitalanddepreciation
–plusinterest,leasingandmanagementfees
Netreturn(excludingmanagementcosts) $m 4.6 1.9 1.6
Netreturn(includingmanagementcosts) $m 2.9 0.2 0.1
p Preliminary.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Otherindicators
Totalfactorproductivityanalysis(2002‐‐03to2012–13)showsincreasingproductivitybyanannualaverageof4percent.
Thetermsoftradeindex,anindicatormeasuringtheleveloffisheryoutputpricescomparedwithinputcostsfacedbyfishers,declinedovertheperiod2002‐‐03to2012–13,withtheindexfallingby21percent.ThishadamoderatingeffectonthelevelofNERearntfromthefisheryandincreasedtheemphasisonachievingproductivityimprovementsfromthefleet.
Realtotalmanagementcostsforthefisheryincreasedfrom1997–98to2003–04,peakingat$4.3millionin2003–04,thendeclinedto$1.5millionby2013–14.Thedeclineintotalmanagementcostsafter2003–04supportedthepositiverisingtrendinNERandresultedinmanagementcostsasashareofgrossvalueofproductiondeclining,from11percentin2005–06to5percentby2013–14.Realmanagementcostsperactivevesselinthefisheryalsodeclined,from$64051in2007–08to$38568by2013–14,withlowertotalmanagementcostsmorethanoffsettingthedeclineinthenumberofvesselsinthefishery.
Managementthroughtotalallowablecommercialcatch(TACC)limitsandindividualtransferablequotas(ITQs)commencedin2011.Landedcatchasaproportionoftotalallowablecatchvariedfromanaverageof30percentto79percentacrossthespeciescaughtinthefisheryoverthe2011to2014fishingseasons,indicatingasignificantlevelofquotalatencyforthefishery.Thehighdegreeofquotalatencysuggeststhatthefisherymaybeoperatingclosetoanopenaccesspoint,whichlowersthelikelihoodofmaximisingNERoverthelongterm.
Implicationsformanagement
RecenttrendsinthefisheryshowimprovementsinindicatorsofNER,financialperformance,productivityandmanagementcosts.Thissuggestsmovementtowardsthefishery’sobjectiveofmaximisingneteconomicreturnstotheAustraliancommunity.However,inthissurveyneteconomicreturnsareestimatedtohavedeclinedin2012–13and2013–14.Ifreturnsdeterioratefurther,managersmayneedtoconsideradjustmentstomanagementarrangementstoimproveeconomicperformanceofthefishery.
FromMarch2011outputcontrolswereintroducedforfivekeytargetspeciesintheformofTACCsandallocatedasITQstofishersthatwereoperatinginthefishery.Thishasprovidedfishersgreaterflexibilitytofishwithamoreefficientcombinationofinputs.Thetransferabilityoffishingrightshasalsoallowedquotatobeallocatedtomoreefficientoperators.However,thesuccessofoutputcontrolsdependsonsettinglevelsofTACCsthatmeetthemanagementobjective.Inthecontextofinternationallysharedstocks,settingTACCsatlevelsthatmaximiseNERiscomplicatedbyuncertaintyaroundthecatchofotherjurisdictions.Withinthiscontext,adjustmentstoTACCsettingsmayneedtobeconsideredbymanagersifeconomicperformanceofthefisherydeterioratesfurther.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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1 Introduction ABAREShasundertakenregularsurveysofkeyCommonwealthfisheriessincetheearly1990s.Theresultingdataareusedtoassessthefinancialperformanceofoperatorsinthefisheryandtheeconomicperformanceofthefisheryasawhole.Bothperformancemeasuresactasimportantindicatorsforfisherymanagers(Box1).Inthisreport,survey‐basedresultsarepresentedfor2011–12and2012–13;preliminarynon‐surveybasedresultsarepresentedfor2013–14.Toprovideamorecomprehensiveassessmentoffisherylevelperformance,ABARESexpandedtheformerAustralianFisheriesSurveysreportseriesin2013toincludearangeofeconomicindicatorsthatdrawondatacollectedfromthesurveys.
Adistinctionismadethroughoutthereportbetweenthetwoprimaryindicators:financialperformanceandeconomicperformance.Financialperformanceestimatesarecalculatedfortheaverageboatinafisheryandincludeallcashreceiptsandcashcoststhathavebeenearnedandincurredwithinthesurveyperiod.Theseestimatesreflecttheaverageboat’sprofitandlossstatementforallbusinessactivities,includingcaseswhereboatshaveoperatedinseveralfisheries.
Thekeyindicatorofeconomicperformancepresentedisneteconomicreturns(NER),whichisreportedatthefisherylevel.TheNERestimatesdifferfromfinancialperformanceestimatesbecausetheyrelateonlytothesurveyedfishery;resultsexcluderevenuesandcostsattributabletooperatinginotherfisheriesandincludeothereconomiccostssuchastheopportunitycostofcapitalandtheopportunitycostoflabour.FordefinitionsofthesecostsseeAppendixA.
Otherindicatorsalsoproviderelevantinformationonperformance.Vessel‐levelfinancialperformanceinformationprovidesacontextfordeterminingtrendsinthesurveyedfishery;forexample,positivefinancialprofitsattheboatlevelmayrevealhowoperatorscontinuetooperateinafisherythathasexperiencednegativeeconomicreturns.Theseestimatesarerelevanttoallindustryoperators,enablingthemtocomparetheirindividualperformancewiththatoftheaverageboat.Otherindicatorsincludedareproductivityindexes,termsoftradeanalysis,entitlementvalues,managementcostsandlatency.
TheestimateofNERindicatestheeconomicreturntosocietyassociatedwithharvestingthefisheryresource.AccordingtotheFisheriesManagementAct1991,theAustralianFisheriesManagementAuthority(AFMA)isrequiredtopursuethemaximisationofneteconomicreturnstotheAustraliancommunitythroughmanagingCommonwealthfisheries(AFMA2014).AlthoughestimatesofNERdonotrevealhowafisheryhasperformedrelativetomaximumpotentialNER(maximumeconomicyield)inagivenperiod,interpretationofNERtrendstogetherwithothereconomicindicatorscanassistinassessingAFMA’sperformanceagainstthisobjective.Forexample,aperiodofrisingNERthatisstronglylinkedtoproductivitygrowthimpliesthatMEYisbeingapproached.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Box 1 Economic indicators in fisheries management
InSeptember2007theAustralianGovernmentreleasedtheCommonwealthFisheriesHarvestStrategyPolicytoprovideguidelinesforsustainableandprofitablemanagementofCommonwealthfisheries.ThepolicyaimstomaintainkeycommercialstocksatecologicallysustainablelevelsandmaximiseeconomicreturnstotheAustraliancommunitybytargetingmaximumeconomicyield(MEY)(DAFF2007).ToassesstheperformanceofCommonwealthfisheriesagainsttheirMEYtargets,fisherypolicymakersfrequentlyrelyoneconomicindicatorsthatprovidethemwithinformationtoinformmanagementdecisionsandmonitorperformance.
Informingmanagementdecisionsagainsttheeconomicobjective
Thistypeofeconomicindicatorisforward‐lookingandcanadvisefisherymanagersonpolicysettingsnecessarytoachieveMEY.Bio‐economicmodelsprovideindicatorsthatservethispurpose;modelshavebeendevelopedfortheNorthernPrawnFishery(Kompas&Che2004)andtheSouthernandEasternScalefishandSharkFishery(Kompas&Che2008).Managementstrategyevaluationbasedapproachesthatincludeaneconomiccomponentcanalsoservethispurpose.
Monitoringmanagementperformanceagainsttheeconomicobjective
Thistypeofeconomicindicatorisretrospectiveandassessespreviouseconomicperformance.Itcanprovideinsightintotheimpactofpreviousmanagementdecisionsoneconomicperformance.Mostindicatorsexaminedinthisreportfallunderthiscategory.Thisincludesthesurvey‐basedestimationofNER,productivityindexes,entitlementvalues,managementcosts,latencyandtermsoftradeanalysis.
Totalfactorproductivityanalysisisaneconomictoolusedtoassesshowwellfishersuseinputstoproduceoutputsandhowtheirabilitytoconvertinputsintooutputsovertimehaschangedwithchangesinthefishery’soperatingenvironment.Productivityindexescaninformfisherymanagersabouttheeffectofmanagementarrangementsonaverageproductivitylevelsinthefishery.
Analysisoffishers'termsoftradeprovidesanindicationofdriversbehindchangesinprofitabilityorNER.Itusesanindexapproachtoexaminechangesinthepriceofinputsandoutputsforafisheryovertimeandrevealsinformationabouttheproductivityimprovementsrequiredtooffsetlongtermdeclinesinthetermsoftrade.
Incontrast,entitlementvalues(orquotavalues)signaltheexpectedvalueoffutureprofitstobeobtainedfromthefishery.Whencomparedovertime,entitlementvaluescanserveasageneralindicatorforhowwelltheresourcesinafisheryhavebeensustainedormanaged.Ifentitlementvaluesareincreasingovertime,thissuggestsresourcesarebeingmanagedeffectivelybecauseoperatinginthefisheryisdeemedtohavebecomemoreprofitable.
Measuresofmanagementcosts,inabsolutetermsandasaproportionofgrossvalueoffisheryproduction(GVP)andperactiveboat,alsoprovideinformationaboutthecost‐effectivenessoffisherymanagement—anotherkeyobjectivereferredtointheFisheriesManagementAct1991.
Latency,ortheproportionofuncaughtquota,canindicatelimitedeconomicincentivesforfisherstoparticipateinthefishery.Afisherywhereoperatorsarenotutilisingtheirrighttofish,isunlikelytobenearitsMEYtarget.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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2 Background
DescriptionofthefisheryTheEasternTunaandBillfishFishery(ETBF)islocatedalongtheeastandsouthcoastofAustralia,stretchingfromthetipofCapeYorktotheVictoria–SouthAustraliaborderandincludesthewatersaroundLordHoweIslandandNorfolkIsland.Thismultispeciesfisheryusespredominatelypelagiclonglinetotargetthreespeciesoftuna,yellowfin,bigeyeandalbacore,alongwithswordfishandstripedmarlin.Minorlinemethodisalsousedbutaccountsforonlyasmallportionofthefishery’scatch,effortandgrossvalueofproduction(GVP).
Map 1 Relative fishing intensity, Eastern Tuna and Billfish Fishery, 2014
Thefisheryoperatesyear‐roundacrosssomeinternationallysharedstocks.CommonwealthmanagementoftheETBFtakesintoaccountAustralia’sobligationstotheWesternandCentralPacificFisheriesCommission(WCPFC),aregionalfisheriesmanagementorganisationresponsibleformanaginginternationallysharedstocksoftunaandtuna‐likespeciesinthePacificOcean.ThekeyportsforthisfisheryareBermagui,Cairns,CoffsHarbour,Mooloolaba,SouthportandUlladulla(Larcombe&Bath2015).
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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KeyeconomictrendsIn2013–14theETBFwasthelargestCommonwealthtunafisherybyquantity,withatotallandedcatchof4682tonnes.Thisconsistedofmainlyyellowfintunaandswordfish.ThefisherygeneratedaGVPof$31.2million.YellowfintunaaccountedforthelargestshareofGVP(46percent,$14.4million),followedbyswordfish(23percent,$7.2million)andbigeyetuna(15percent,$4.7million).
Since1998–99theETBFlandedcatchhasbeenvariable,withpeaksin2001–02,2002–03and2006–07(Figure1).Overthepastdecadethecatchhasdeclinedtoaround5000tonnes.Incontrast,realGVPdeclinedatafasterrateafter2001–02toaround$30millionin2005–06andhassincedeclinedataslowerrate(Figure2).ThefallinrealGVPismainlyattributabletothedeclineinrealunitpricesreceivedforthemorevaluedspeciescaughtinthefisheryoverthisperiod(Figure3).Almost90percentofAustralia’stunaproductionisexportedtoJapan,sothefallinbeachpricesinthisperiodlargelyreflectstheappreciationintheexchangerateagainsttheJapaneseyen.Globalproductionofthefivekeyspeciescaughtinthefisheryincreasedrapidlyfrom1999–2000to2003–04(FAO2015),addingtopressureonprices. TheNERintheETBFwasnegativefrom2001–02to2009–10buthasbeenimprovingsince2003–04,largelyaresultofimprovedproductivity(Figure4).In2010–11thefisheryachievedpositiveNER,drivenprimarilybyreducedoperatingcosts.TheSecuringourFishingFuturestructuraladjustmentpackage(occurringbetween2005and2006)sawthelikelyexitoflessefficientvesselsfromthefishery,whichinturnassistedinreducingthecostoffishingfortheremainingvessels.Thenumberofvesselswasalreadydecliningfromapeakof146vesselsin1998–99;by2007–08only58vesselsremainedandin2013–14atotalof39vesselswereactive(Figure5).Inaddition,theshiftincatchcompositiontowardhighervaluedtunaspeciesfrom2006–07contributedtoincreasedfishingincomeandpositiveNER.ThemostrecentsurveyresultsshowthatNERimprovedin2011–12butdeclinedin2012–13,largelybecauseofhigherfuelpricesfacedbyoperators.
CurrentmanagementarrangementsInMarch2011thefisherymovedtoasystemoftotalallowablecommercialcatch(TACC)forkeytargetspecies,withindividualtransferablequotas(ITQs)entitlingholderstoashareoftheTACC.Quotaspeciesarealbacore,bigeyetuna,yellowfintuna,swordfishandstripedmarlin.Previously,thefisherywasmanagedthroughtransitionalarrangementswherebyatotalallowableeffortlimitwithtransferableeffortrightswasinplace(Figure6).ThesystemofTACCwithITQsmanagescatchinthefisherywhileallowingoperatorstochooseamoreefficientcombinationofinputstooperatetheirbusinessinthemostcost‐effectiveway.Thisallowsoperatorsgreaterflexibilityinadaptingtheirbusinesstoimproveprofitability.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Figure 1 Landed catch of key species, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14
Figure 2 Real gross value of production, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14
Figure 3 Exchange rate and real unit price, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14
0
1
2
3
4
5
6
7
8
9
1998–99 2001–02 2004–05 2007–08 2010–11 2013–14
Landed catch (kilotonnes)
Yellowfin Albacore
Bigeye Broadbill swordfish
Striped marlin Other
0
20
40
60
80
100
120
1998–99 2001–02 2004–05 2007–08 2010–11 2013–14
GVP (2013–14 A$ m
illion)
0
20
40
60
80
100
120
0
5
10
15
20
25
30
1998–99 2001–02 2004–05 2007–08 2010–11 2013–14
Yellowfin Bigeye
Broadbill swordfish ¥/$A (right axis)
$/kg ¥/$A
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Figure 4 Real net economic returns, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14
p Preliminary estimate. Note: Time series of financial and economic performance (NER) tables are available on the ABARES website.
Figure 5 Number of vessels operating, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14
Figure 6 Key management changes, 1995–96 to 2013–14
‐30
‐20
‐10
0
10
1998–99 2001–02 2004–05 2007–08 2010–11 2013–14p
NER
(2013–14 A$ million)
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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DemographicprofileoffishersoperatingintheETBFThemedianageofskipperssurveyedinthefisherywas43yearsin2012–13.Skippershadamedianof15yearsofexperienceintheETBFand20yearsoffishingexperience.Eightypercentofrespondents’highestlevelofeducationalattainmentwasyear10completion.Thehighestqualificationwasatrade/technicalapprenticeship.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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3 Financial and economic performance
FinancialperformanceThesurveypopulationforagivenyearisdefinedasvesselsthatrecordedmorethanonetonneofcatchintheETBF.Thesurveysamplerepresented36percentand34percentofthepopulationin2011–12and2012–13,respectively(Table3).DetailsofthesurveymethodareinAppendixB.
Someoperatorssurveyedoperatedinotherfisheriesduringthesurveyperiod.Theportionoftimetheseoperatorsspentinotherfisheriesvaried.Thereceiptsandcostsassociatedwithoperatinginthesefisheriesareincludedintheaveragevesselfinancialperformanceresults.
Between2011–12and2012–13financialperformanceofvesselsintheETBFdeclined(Table3andFigure7).Totalcostsincreased(by9percent)andtotalcashreceiptsincreasedbyacomparativelysmalleramount(2percent).Thisresultedinasubstantiallysmalleraverageboatcashincomeofin2012–13,comparedwith2011–12.
Crewcostsaccountedforthelargestshareofcashcostsat(28percent)in2011–12and,althoughincreasingby6percentin2012–13,didnotchangesignificantlyasaproportionoftotalcashcosts(27percent).Fuelcostswereanotherlargecontributortocashcostsmakingup13percentand15percentoftotalcashcostsin2011–12and2012–13,respectively.Fuelcostsincreasedby20percentin2012–13.
ProfitatfullequityfortheaverageETBFboatincreasedfrom2006–07to2010–11.Between2010–11and2011–12thistrendcontinued,withprofitatfullequityestimatedat$139612in2011–12(a$94103increasefrom2010–11).Thisdecreasedby38percentin2012–13.
Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery
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Table 3 Financial performance of boats operating, Eastern Tuna and Billfish Fishery
Vessel‐levelaverage
Revenue Unit 2011–12 2012–13
Value RSE Value RSE
Fishingreceipts $ 972701 (12) 984172 (12)
Non‐fishingreceiptsa $ 53052 (18) 64181 (19)
Totalcashreceipts $ 1025752 (12) 1048354 (12)
Costs
Administration $ 14824 (12) 17513 (14)
Crewcosts $ 246414 (11) 262274 (10)
Freightandmarketingexpenses $ 121615 (16) 114798 (15)
Fuel $ 117845 (8) 141568 (11)
Insurance $ 33192 (11) 40095 (8)
Interestpaid $ 5624 (35) 4595 (41)
Licencefeesandlevies $ 49249 (20) 46266 (17)
Packaging $ 69344 (28) 74730 (33)
Repairsandmaintenance $ 81682 (11) 97675 (14)
Othercostsb $ 152537 (12) 171134 (14)
Totalcashcosts $ 892325 (10) 970647 (9)
Boatcashincome $ 133428 (30) 77706 (62)
–lessdepreciationc $ 33232 (20) 32269 (18)
Boatbusinessprofit $ 107568 (33) 45702 (100)
–plusinterestleasingrent $ 32044 (22) 40791 (38)
Profitatfullequity $ 139612 (26) 86492 (50)
Capital(excludingquotaandlicences) $ 757451 (11) 668416 (11)
Capital(includingquotaandlicences) $ 1536879 (12) 1269097 (11)
Rateofreturntoboatcapitald % 18 – 13 –
Rateofreturntofullequitye % 9 – 7 –
Population no. 47 na 41 na
Sample no. 17 na 14 na
a Including rebates, charter hire, quota leasing revenue and other non‐fishing receipts. b Including quota lease payments. c Depreciation adjusted for profit or loss on capital items sold. d Excluding value of quota and licences. e Including value of quota and licences. na Not available. Note: Figures in parentheses are relative standard errors (RSEs). An RSE will be higher for estimates closer to zero. A guide to interpreting RSEs is included in Appendix A.
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Figure 7 Trends in key financial performance variables, Eastern Tuna and Billfish Fishery, 2002–03 to 2012–13
Note: Error bands are equal to two standard errors, approximating the 95 per cent confidence interval. Error bands are typically large for small sample sizes and wider for estimates closer to zero.
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EconomicperformanceNeteconomicreturn(NER)ofthefisheryisestimatedtohavedeclinedfrom$2.9millionin2011–12to$0.2millionin2012–13(Table4andFigure4).ThepreliminaryestimateofNERfor2013–14showsanestimateddeclineto$0.1million.ThedecreaseinNERfrom2011–12to2012–13wasprimarilydrivenbyafasterdeclineinfishingincome(reductionof12percent),thaninfishingcosts(reductionof6percent).Thereductioninfishingincomewasdrivenbyafallinbeachpricesbetween2011–12and2012–13.TheAustraliandollar’s10percentappreciationagainsttheJapaneseyencontributedmosttothefallinbeachprices(Figure3)becausealmost90percentofAustralia’stunaproductionisexportedtoJapan.
Between2002–03and2012–13fishingincomeandoperatingcostsdeclined(Figure8).Operatingcostsdecreasedatafasterratethanfishingincomeoverthisperiod,increasingtheoverallneteconomicreturnsofthefishery.
Table 4 Fishery cash profit and net economic returns, Eastern Tuna and Billfish Fishery
TotalfisheryA$million
Category 2011‒12 2012‒13 2013‒14p
Receipts Value RSE Value RSE Value
Fishingincome 43.9 (14) 38.6 (14) 39.3
Cashcosts
Operatingcosts 38.7 (12) 36.4 (12) 37.7
Fisherycashprofit 5.2 (35) 2.2 (78) 1.6
Less
–ownerandfamilylabour 1.8 (27) 1.7 (32) 1.5
–opportunitycostofcapital 1.0 (19) 0.7 (20) 0.4
–depreciation 1.4 (22) 1.2 (21) 1.0
plusinterest,leasingandmanagementfees 3.7 (18) 3.3 (20) 2.9
Netreturn(excludingmanagementcosts) 4.6 (36) 1.9 (91) 1.6
Managementcosts 1.7 na 1.7 na 1.5
Netreturn(includingmanagementcosts) 2.9 na 0.2 na 0.1
p Preliminary non‐survey based estimates (for estimation method, see Appendix C). na Not applicable. Note: Figures in parentheses are relative standard errors (RSEs). RSEs are not available for 2013–14 results because of estimation method used (Appendix C).
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Figure 8 Trends in economic returns, Eastern Tuna and Billfish Fishery, 2002–03 to 2013–14
p Preliminary estimate. Note: Error bands are equal to two standard errors, approximating the 95 per cent confidence interval. Standard errors are not calculated for returns or management costs, nor for forecasted values that use non‐survey methods. Error bands are typically large for small sample sizes and wider for estimates closer to zero.
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4 Other key performance indicators Othereconomicindicatorscanhelpinassessingtheeconomicperformanceofafisheryandinunderstandingthetrendsseen.Indicatorsdiscussedinthisreportincludetrendsineconomicproductivity,termsoftrade,managementcostsandentitlementvalues.
ProductivityTotalfactorproductivity(TFP)analysisshowstrendsinfishers’economicproductivity.TFPanalysisisusedtoexaminetheabilityoffisherstoconvertinputsintooutputsovertime.ResultsfromtheTFPanalysiscanprovideanunderstandingofthefactorsinafishers’operatingenvironmentaffectingproductivityandassistinevaluatingchangesinNERovertime.Suchfactorsmayincludechangesinmanagementsettingsthatregulatefishers’technologychoices,changingmarketconditionsandchangesinthemixofoutputsproduced.Marketconditionsincludevariationsininputcosts,importcompetitionandchangesinthevalueoftheAustraliandollar.
Changetoafishers’operatingenvironmentcanprovidefishersanincentivetopursuevessel‐levelproductivityimprovements.Forexample,tokeepthebusinessfinanciallyviableinresponsetoadversemarketconditions,suchasincreasinginputcostsorcompetition,fishersinvestinproductivityenhancingimprovements.Adversemarketconditionscanalsohelpdriveautonomousstructuraladjustmentintheindustry.Thiscanincludefishingrightsmovingtothemostprofitablefishersandtheleastefficientorleastprofitablevesselsexitingtheindustry,resultinginamoreproductivefleet.
TFPanalysiswasundertakenfortheETBFfrom2002–03to2012–13(methodsforcalculatingtheindexesareshowninAppendixD).Duringthisperiod,theproductivityindexfollowedanupwardtrendandincreasedbyanannualaverageof4percent(Figure9).
Figure 9 Productivity indexes, Eastern Tuna and Billfish Fishery
Apossibledriverofimprovementinproductivityinthefisheryfrom2002–03to2012–13isareductioninfleetsizeandtheexitoflessefficientvessels.Between2002–03and2012–13the
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numberofvesselsinthefisherydecreasedfrom138to41.Becausefewerandmoreproductivevesselsareleftinthefishery,theabilitytoconvertinputstooutputsislikelytohaveimproved,increasingtheproductivityindex.
ItistooearlytoassesswhethertheintroductionofoutputcontrolsinMarch2011intheformofTACCforfivekeytargetspecieshasledtoamarkedimprovementinproductivity.Outputcontrolsprovidemoreflexibilitytooperatorsthaninputcontrols,allowingtheflexibilitytooperatewithinputcombinationsthataremoreefficientandminimisingthelikelihoodofeffortcreep(Elliston&Cao2004).
Termsoftrade
ThetermsoftradetrendslookatthechangeininputpricesrelativetooutputcostsandcanindicatewhetherimprovementsinNERaredrivenbyproductivityincreasesorbyfavourabletermsoftradeconditions.Between2002–03and2011–12theinputcostindex(consistingoffuel,labourandrepaircosts)increasedby18percentbeforedecliningin2012–13withlowerfuelprices(Figure10).Theoutputpriceindexincludesthepriceofspeciescaughtbyvesselsinthefishery.Overtheperiod2002–03and2012–13theoutputpriceindexdeclinedby25percent.Asaresult,thetermsoftradeindexdeclinedby21percentoverthesameperiod,indicatingthatfisherswouldhaveexperiencedchallengingoperatingconditions.ThishashadamoderatingeffectonthelevelofNERearntfromthefisheryandincreasedtheemphasisonachievingproductivityimprovementsfromthefleet.Thetermsoftradeimprovedby15percentin2012–13,asinputpricesdeclinedatafasterratethanoutputprices,supportingNER.Theincreaseinthetermsoftradein2012–13wasnotsufficienttooffsetthenegativeeffectoflowerproductivityonNERinthatyear.
Figure 10 Input cost and output price indexes, Eastern Tuna and Billfish Fishery
ManagementcostsManagementcostsareincurredtoensurethefisherycontinuesoperating,makingthemcostsassociatedwithharvestingfishinthefishery.Totalmanagementcostsincreasedbetween1997–98and2003–04,peakingat$4.3million,thendeclinedto$1.5millionin2013–14(Figure11).Thedeclineafter2003–04hassupportedthepositiverisingtrendinNER.From2005–06to2013–14thedeclineintotalmanagementcostswasfasterthanthedeclineingrossvalueofproductionofthefishery.Thisledtoafallinmanagementcostsasashareofgrossvalueof
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production,from11percentin2005–06to5percentby2013–14.Thevolatilityintheleveloftotalmanagementcostsovertheperiod1997–98to2013–14likelyreflectschangesinboththesizeofthefisheryandmanagementarrangementsforthefisheryoverthatperiod.
Themanagementcostperactivevesselgenerallyincreasedfrom1997–98to2007–08(Figure12),peakingatapproximately$64051inrealterms.Highermanagementcostpervesselin2007–08islikelytobeanoutcomeofvesselsexitingtheindustry,leavingaconstantamountofmanagementcoststobesharedamongafewernumberofvessels.Managementcostpervesselhasgenerallydeclinedsince2007–08butdidincreasein2012–13.Themanagementcostpervesselisestimatedtohavedeclinedto$38568in2013–14.
Figure 11 Total management costs, Eastern Tuna and Billfish Fishery
Figure 12 Average management cost per active vessel and as a share of GVP, Eastern Tuna and Billfish Fishery
Note: Time series of financial and economic performance (NER) tables and other indicators are available on the ABARES website.
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Management cost as a percentage of GVP
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EntitlementvaluesOperatingintheETBFrequireslonglineorminorlineboatstatutoryfishingrights(orboatSFRs)andquotastatutoryfishingrights(quotaSFRs)foreachofthefivequotaspeciesundertheETBFmanagementplan.EntitlementvaluesareestimatedfromaskingfishersoperatingintheETBFthevaluetheyplaceonquotaSFRs.Thevaluesestimatedbyfishersareusuallysubjectiveandmaydifferfromoperatortooperator.ABARESstartedestimatingentitlementvaluesfromthe2011‐‐12ETBFsurvey.Table5showstheaveragemarketpriceofthefivequotaspeciesfor2011–12and2012–13.
Table 5 Estimated market price of individual quota SFRs, Eastern Tuna and Billfish Fishery
Species Averagemarketpriceofstatutoryfishingrights($perunit)
2011–12 2012–13
Albacore 1.5 2.1
Bigeyetuna 7.0 6.9
Stripedmarlin 5.9 6.2
Swordfish 7.0 6.8
Yellowfintuna 9.5 7.1
Entitlementvaluescanreflecttheexpectedprofitabilityinthefisherybutlittleinformationcanbedrawnfromthetwoyearsofdatacollectedtodate.Furthercollectionofentitlementdataovertimewillgivefurtherinsightintofishers’perceptionsofprofitabilityinthefishery.
QuotalatencyTheleveloflatencyintheETBF,measuredbytheproportionofTACCnotcaughtinthefishery,hasvariedacrossthekeyspeciessince2011(thefirstseasoninwhichaTACCwasinplace).Landedcatchforstripedmarlin,swordfishandyellowfintunahavebeenonaverage75percent,79percentand73percentofTACC,respectively,fromthe2011to2014fishingseasons.Thetworemainingkeyspecies,albacoreandbigeyetunahavehadrelativelysmallerproportionsofTACCcaught.Onaverage,from2011to2014,30percentofTACCforalbacoreand47percentofTACCforbigeyetunawerecaught.
Highlatencylevelscanindicatelimitedincentiveforfisherstooperateinthefisheryortargetparticularspecies.Thiscanbearesultofpoormarketconditionsrelativetoinputcosts,lowfishstockslevelsorotherunfavourablefishingconditionssuchasbadweather,ormoreprofitableoptionsforfishersinotherfisheries.TherelationshipbetweenchangesinquotalatencyandNERtrendsarelesscertainforinternationallysharedstockswheretheTACCsettingmaynotreflecttheachievementofaneconomictarget.Thismakesitdifficulttodrawconclusionsaboutthepossiblecausesoflatencyinthefisheryandhowitisaffectingoveralleconomicperformance.AstheTACCisnotbinding(ornotconstrained)thefisherycouldbeoperatinginconditionssimilartoopenaccess,allowingforinefficienciessuchasover‐capitalization.Inthelong‐run,NERisunlikelytobemaximisedwithnon‐bindingTACCs.
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5 Performance against management objectives
Harvestinginternationallysharedstockscomplicatesselectionofeconomic‐basedtargetsandassessmentofeconomicstatusagainstmaximumeconomicyield.Managementactionsdomesticallymaynotaffectstock‐widebiomass,especiallywhereAustraliancatchisarelativelysmallproportionoftotalcatchinthefishery.ObjectivesoftheETBFmanagementplanincludemaximisingtheneteconomicreturnstotheAustraliancommunityfrommanagementofthefishery,whilebeingconsistentwiththeprinciplesofecologicallysustainabledevelopment,andtomanagethefisheryefficientlyandcost‐effectivelyfortheCommonwealth.
TheCommonwealthFisheriesHarvestStrategyPolicy(HSP;DAFF2007)isnotprescribedforfisheriesmanagedunderinternationalagreements.AharveststrategyframeworkfortheETBFhasbeendevelopedinlinewiththeCommonwealthFisheriesHarvestStrategy(AFMA2011).Theharveststrategyframeworkhasbeenusedtosetthetotalallowablecommercialcatchforswordfishandstripedmarlinsince2011.TargetreferencecatchratesusedintheETBFharveststrategyforswordfishandstripedmarlinalignwithdefaultreferencepointsof48percentofunfishedbiomassforthetargetand20percentofunfishedbiomassforthelimit.Tunaspecies’TACCsarebasedonhistoricalcatchlevelsinthefishery(Larcombe&Bath2015).
TheNERinthefisheryhasbeenimprovingsince2003–04andturnedpositivein2010–11.ItisunclearwhethertheharveststrategytargetsareresponsibleforthisimprovementbecauseNERwasincreasingbeforetheirimplementationandmultiplefactorsinfluencethefishery’seconomicperformance.TheimprovementinNERoccurreddespitenegativeexternalpressuressuchasrisingfuelpricesandtheappreciationoftheAustraliandollar,suggestingthatproductivitygrowthhasplayedastrongroleinimprovingeconomicperformanceinthefishery.In2013–14thepreliminaryNERwereestimatedat$0.1millionusingnon‐surveybasedmethods.TheestimatedslightreductioninNERin2013–14ismostlydrivenbyhigheroperatingcosts,particularlyfuel,andarelativelysmallincreaseinfishingincome.Amongtheindicatorsanalysedistheproductivityindex,whichhasbeentrendingupwardsforthefishery.ThisimprovementinproductivityisconsistentwiththeupwardtrendinNERsince2003–04.
Totalmanagementcostsinthefisheryhavebeendecreasingsince2004–05.Managementcostspervesselremainedhighfrom2006–07to2007–08,withasimilarlevelofmanagementsharedamongfewervessels.Managementcostpervesselhasbeendeclininginthefisherysince2007–08andmanagementcostasapercentageofGVPhasdeclinedfromahighof11percentin2005–06to5percentin2013–14.
FromMarch2011outputcontrolswereintroducedforfivekeytargetspeciesintheformofTACCsandallocatedasITQstofishersthatwereoperatinginthefishery.Thishasprovidedfishersgreaterflexibilitytofishwithamoreefficientcombinationofinputs.Thetransferabilityoffishingrightshasalsoallowedquotatobeallocatedtomoreefficientoperators.However,thesuccessofoutputcontrolsdependsonsettinglevelsofTACCsthatmeetthemanagementobjective.InthecontextofinternationallysharedstocksthesettingofTACCsatlevelsthatmaximiseNERiscomplicatedbyuncertaintyaroundthecatchofotherjurisdictions.However,whenTACCsarepersistentlynon‐binding,thelikelihoodofmaximisingNERoverthelongtermislow.Ifreturnsdeterioratefurther,managersmayneedtoconsideradjustmentstoTACCsettingsinanefforttoimproveeconomicperformanceofthefishery.
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Appendix A: Survey definitions Thisappendixprovidesdefinitionsofkeyfinancialperformancevariables,neteconomicreturns(NER)andtheABARESmethodofcalculatingNER.UseofNERasanindicatorofeconomicperformanceisbrieflydiscussed.
FinancialperformanceABARESusedthesedefinitionsofkeyvariablesintheanalysisofvessel‐levelfinancialperformance.
Totalcashreceiptsrepresentreturnsfromsaleoffish,fromnon‐fishingactivities(includingcharteroperations)andfromothersources(insuranceclaimsandcompensation,quotaand/orendorsementsleasedout,governmentassistanceandanyotherrevenue)inthefinancialyear.
Formostoperators,thisinformationisreadilyavailablefromtheirownrecords.However,differentoperatorsrecordtheirfishingincomeindifferentways.Wherefisharesoldthroughacooperative,someoperatorsmayonlyrecordpaymentsreceivedfromthecooperative.Thesepaymentsmaybenetofcommissions,freightandotherpurchasesmadethroughthecooperative.
Inothercases,thecooperativeoragencypaysthecrewdirectlyforthecatch;theowner’sfinancialrecordsmightincludeonlytherevenuesreceivedafterthecrew’ssharehasbeendeducted.
Forthesereasons,operatorsareaskedtoprovideabreakdownofthetotalcatchoftheirboatandanestimateofthetotalvalueofthatcatch.Forconsistency,marketingchargesmayneedtobeaddedbackintofishingreceiptsforsomeboatstogiveagrossvalue.Wherethisisnecessary,thesesellingcostsarealsoaddedintothecostestimatestooffsetthenewrevenuefigure.Receiptsalsoincludeamountsreceivedinthesurveyyearforfishsoldinpreviousyears.
Totalcashcostsincludepaymentsmadeforbothpermanentandcasualhiredlabourandpaymentsformaterialsandservices(includingpaymentsoncapitalitemssubjecttoleasing,rent,interest,licencefeesandrepairsandmaintenance).Capitalandhouseholdexpendituresareexcluded.
Labourcostsareoftenthehighestcashcostinthefishingoperation.Labourcostsincludewagesandanestimatedvalueforowner/partner,familyandunpaidlabour.Labourcostscoverthecostoflabourinvolvedinboat‐relatedaspectsofthefishingbusiness,suchascreworonshoreadministrationcosts,butdonotcoverthecostofonshorelabourtoprocessfisheriesproducts.
Onmanyboats,thecostsoflabourarereflectedinwagespaidbyboatownersand/orintheshareofthecatchtheyearn.However,insomecases,suchaswhereowner–skippersareinvolvedorwherefamilymembersworkinthefishingoperation,paymentsmadecanbeloworevennil.Thiswillnotalwaysreflectthemarketvalueofthelabourprovided.Toallowforthispossibleunderestimation,allowner/partnerandfamilylabourcostsarebasedonestimatescollectedattheinterviewofwhatitwouldcosttoemploysomeoneelsetodothework.
Boatcashincomeisthedifferencebetweentotalcashreceiptsandtotalcashcosts.
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Depreciationcostsareestimatedusingthediminishingvaluemethodbasedonthecurrentreplacementcostandageofeachitem.TheratesappliedarethestandardratesallowedbytheCommissionerofTaxation.Foritemspurchasedorsoldduringthesurveyyear,depreciationisassessedasifthetransactionhadtakenplaceatthemidpointoftheyear.ThismethodofcalculatingdepreciationisalsousedinotherABARESindustrysurveys.
Boatbusinessprofitisboatcashincomelessdepreciationandaccountingforanyprofitorlossonthesaleofcapital.
Profitatfullequityisboatprofitplusrent,interestandleasepayments.
Capitalisthevalueplacedontheassetsemployedbytheowningbusinessofthesurveyedboat.Itincludesthevalueoftheboat,hull,engineandotheronboardequipment(includinggear).Estimatesarealsoreportedforthevalueofquotasandendorsementsheldbythesurveyedboat.Estimatesofthevalueofcapitalarebasedonthemarketvalueofcapitalandareusuallyobtainedatinterview.However,insomecasesquotaandendorsementvaluesareobtainedfromindustrysources.
Depreciatedreplacementvalueisthedepreciatedcapitalvaluebasedonthecurrentageandreplacementvaluesoftheboatandgear.Thevalueofquotaandendorsementsheldisnotincludedintheestimate.
Rateofreturntoboatcapitaliscalculatedasiftheproprietorsownedallfishingassets.Thisenablesfinancialperformanceofsampleboatstobecomparedregardlessofproprietors’equityinthebusiness.Rateofreturntoboatcapitaliscalculatedbyexpressingprofitatfullequityasapercentageoftotalcapital(excludingquotaandlicencevalue).
Rateofreturntofullequityiscalculatedbyexpressingprofitatfullequityasapercentageoftotalcapital(includingquotaandlicencevalue).
NeteconomicreturnsNeteconomicreturnsarethelong‐runprofitsfromafisheryafterallcostshavebeenmet,includingfuel,crewcosts,repairs,theopportunitycostoffamilyandownerlabour,fisherymanagementcosts,depreciationandtheopportunitycostofcapital.
Morespecifically,afishery’sneteconomicreturnsforagivenperiodcanbedefinedas:
Where:
NR = netreturns
R = totalcashreceiptsattributabletothefishery,excludingleasingincome
CC = totalcashcostsattributabletothefishery,includingrecoveredmanagementcosts
OWNFL= imputedcostofownerandfamilylabour
ILR = interestandquota/permitleasingcosts
OppK = opportunitycostofcapital
DEP = depreciation
recMC = recoveredmanagementcosts
NR=R–CC–OWNFL+ILR–OppK–DEP+recMC–totM
operatingcosts capitalcost managementcostscashreceipt
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totMC = totalmanagementcosts.
Notethatrecoveredmanagementcostsarethosemanagementcostspaidbyindustrythroughmanagementfeesandareincludedintotalcashcosts(CC).Thesecostsareremoved(asindicatedby‘+recMC’)topreventdoublecounting,giventhatthesecostsareacomponentoftotalmanagementcosts.Similarly,interestandquota/permitleasingcostsareremoved(indicatedby‘+ILR’)becausethesecostsatthefisherylevelrepresentrevenuesthathavebeenredistributedtoexternalinvestorsinthefishery.
Survey‐basedestimationofneteconomicreturns
FishsalereceiptsFishsalereceiptsareusuallytakenfromfishers’financialaccounts.Whereafisheroperatesinmorethanonefishery,theyareaskedtoindicatetheproportionoftotalfishsalesattributabletothefisherybeingsurveyed.Anyfreightormarketingcostsmustalsobededucted.Thisprovidesanestimateofnetfishingreceiptsthatincorporatesonlythe‘beachprice’receivedforthecatch;thatis,thepricereceivedforfishatitsfirstlandingpoint.
Incomereceivedfromleasingoutquotaandlicencesisnotincludedasincomeincalculatingneteconomicreturns.Thisitemrepresentsaredistributionofprofitsamonginvestorsinthefishery.Also,theamountafisherearnsfromleasingoutquotaandlicencesrelatestotheamountofprofitsthefisherygenerates.Therefore,includingleasingrevenuewouldresultindoublecounting.
OperatingcostsOperatingcostsincludeday‐to‐dayoperationalexpensesincurredtoharvestfishinthefishery.Cashcosts(CC)areacomponentofoperatingcoststhatincludesthosecostitemsthatareeasilyidentifiedinfishers’accounts,suchasfuel,repairsandgearreplacement.
Labourcostsareoftenspecifiedinfishers’accountsaswages.However,incalculatingnetreturns,anestimateoftheopportunitycostoflabourisneeded.Theopportunitycostoflabouristhewagethatcouldhavebeenearnedperformingasimilarroleelsewhere.Whereamarketwageispaid,itisassumedtorepresenttheopportunitycostoflabourandisincludedinthecashcostscomponentofoperatingcosts.
Theopportunitycostofownerandfamilylabourisnoteasilyidentifiableinfishers’accounts.Ownersandtheirfamiliesareofteninvolvedinoperatingaboat,eitherasskippersandcreworonshoreasaccountantsandshoremanagers.Whilesomewillbepaidmarketvaluefortheirlabour,somewillnotbepaidatallandotherspaidveryhighamounts(forexample,asdirectorfeesormanagerfees).Inthesecases,ABARESsurveyofficersasksurveyrespondentstoestimatethemarketvalueofownerandfamilylabour—thatis,theamountthatwouldneedtobepaidtoemployanon‐familymembertofulfilthesameposition.Thisamountisenteredasacomponentofoperatingcosts(OWNFL).
Quotaandlicenceleasingcostsandinterestexpensesareincludedincashcosts.However,thesecostsmustberemovedfromcalculationofnetreturnsforthesamereasontheyareexcludedfromincome.See‘Fishsalereceipts’forexplanation.
CapitalcostsTocalculatecapitalcosts,anestimateofthevalueofcapitalisneeded.ABARESsurveyofficersaskfisherstoprovideinformationforallcapitalitemsassociatedwiththefishingbusiness(includinghull,engine,onboardequipment,vehiclesandsheds).Informationcollectedforeach
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itemincludestheyearthecapitalitemwasmanufacturedandanestimateofwhatitwouldcosttoreplacethatitemwithanewequivalentitem.Byaccountingforpreviousdepreciationandinflation,thesedataareusedtoestimatethetotalvalueofcapitalinvestedinthefisheryforthesurveyyear.
Capitalcostsincludetheopportunitycostofcapital(OppK)anddepreciation(DEP).Theopportunitycostofcapitalisthereturnthatcouldhavebeenearnedifcapitalwasinvestedelsewhere,ratherthaninthefishery.Thiscostisnotidentifiableinfishers’accounts.Arealinterestratethatrepresentsthelong‐termaveragerateofreturnthatcouldbeearnedonaninvestmentelsewhereisappliedtothevalueofcapitalinthefishery.Forfisheriessurveys,ABARESusesarateof7percentperyear.
Depreciationexpenseisthecostofcapitalbecominglessvaluableovertimeasaresultofwearandtearandobsolescence.Depreciationexpenseisnotconsistentlyidentifiableinfishers’accounts,soABAREScalculatesannualdepreciationofboatsbasedonthecapitalinventorylistcollectedduringthesurveysandpredetermineddepreciationratesforeachcapitalitemtype.
ManagementcostsManagementcostsareincurredtoensurethefisherycontinuesoperatingandarecostsassociatedwithharvestingfishinthefishery.Managementcostscomprisetwocomponents:recoveredmanagementcostsandnon‐recoveredmanagementcosts.Recoveredmanagementcosts(recMC)arethoserecoveredfromfishersandappearintheaccountsoffishersaspaymentsofmanagementfeesorlevies.Non‐recoveredmanagementcostsarenotchargedtofishersbutinsteadarecoveredbythemanagingbodyorgovernment.Calculationofneteconomicreturnsrequiresdeductionoftotalmanagementcosts,whichisthesumofthesetwocomponents.
Totalcashcosts(CC)includesanestimateofrecoveredmanagementcostsbasedonmanagementlevyexpensescontainedinfishers’accounts.Thisestimateofrecoveredmanagementcostsisbasedonlyonasampleofthefishery,soitmaynotbeconsistentwiththeactualvalueofmanagementcostsrecoveredfromtheentirefishery.AFMAisabletoprovideanestimateoftotalmanagementcostsforeachfishery—thatis,thesumofbothrecoveredandnon‐recoveredmanagementcosts.Forthesereasons,recoveredmanagementcostsfromfishers’accountsareignored(asindicatedby+recMCinthenetreturnsequation).Totalmanagementcosts(totM)suppliedbyAFMAarethenusedtoestimateneteconomicreturns.
NeteconomicreturnsandeconomicperformanceFisherymanagers,policyanddecision‐makersrequireinformationonfisheries’performanceforachievingtheobjectiveofmaximisingneteconomicreturnsfromuseoffishstocks—anobjectivecommonlyreferredtoasMEY.IfafisheryisoperatingatMEY,effort,catchandstocksareatlevelswherethedifferencebetweendiscountedrevenuesandcosts,andthereforeprofits,aremaximised.Theterm‘discounted’meansthatthedifferenceinthevalueofadollarearnedtodayrelativetoadollarinthefutureisaccountedfor.AlthoughestimatesofNERdonotrevealhowafisheryisperformingrelativetoitsmaximumpotential,positivetrendsinNER,togetherwithotherindicators,suggestthattheMEYobjectiveisclosertobeingmet.
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Appendix B: Survey methods CollectingeconomicsurveydataABAREShasundertakeneconomicsurveysofselectedCommonwealthfisheriessincetheearly1980sandonaregularbasisforparticularfisheriessince1992.UnderthecurrentprogramABARESsurveysmajorCommonwealthfisherieseverytwoyears,ormorefrequentlywherethefisheryisundergoingmajorchangesandmonitoringisparticularlyimportant.Itaimstodevelopaconsistenttimeseriesofeconomicinformationforeachfishery.Suchinformation,inconjunctionwithscientificassessmentsofeachfishery,isvitalforassessingfisheries’economicperformance.
Surveyinformationismadepubliclyavailablesotheperformanceoffisheriesandtheeffectofmanagementpoliciescanbeassessedindependently.
SampledesignABARESsurveysaredesignedandsamplesselectedonthebasisofinformationprovidedbyAFMA.Thisinformationincludesdataonthevolumeofcatch,fishingeffortandboatcharacteristics.
Itisnotpossibletosurveyallboatsinafishery,soarepresentativesampleofboatsisselected.Wherepossible,boatsareclassifiedintosubgroupsbasedeitheronthefishingmethodused(longline,purseseineandtrawl)oronthesizeofoperations(small,mediumandlargeproducers).Aminimumnumberofrepresentativeboatsfromeachsubgrouparethentargetedforthesurvey.
Inpractice,thissampleisseldomfullyrealised.Non‐responseisrelativelyhighacrossfisherysurveys,reflectingthedifficultyincontactingsomeoperatorsandareluctanceofotherstoparticipate.Thismaybiastheresults—forexample,ifprofitabilityofrespondentsandnon‐respondentsdifferssignificantly.Sampledesignandweightingsystemshavebeendevelopedthatreducethenon‐responseeffect,butcareisstillneededwheninterpretingsurveyinformation.
BetweenFebruaryandAugust,anABARESofficervisitstheownerofeachboatselectedinthesample.Theofficerinterviewstheboatownertoobtainphysicalandfinancialdetailsofthefishingbusinessforthesurveyyears.Whennecessary,theskipperoftheboatisalsointerviewed.ABARESsubsequentlyobtainsfurtherinformationfromaccountants,sellingagentsandmarketingorganisationsonthesignedauthorityofsurveyrespondents.
ABARESreconcilestheinformationobtainedfromvarioussourcestoproducethemostaccuratedescriptionpossibleofthefinancialcharacteristicsofeachsampleboatinthesurvey.
SampleweightingEstimatesoffinancialandeconomicperformancepresentedinthisreportwerecalculatedbasedonweightedsurveydataofsampledvessels.ABAREScalculatesaweightforeachsampledvesselbasedonhowrepresentativethatvesselisinthepopulation.ThisreportusesaregressionmodelofGVPoncatchforeachvesselinthefleetpopulationtoestimatesampleweights.Theindividualestimatedweightsforsampledvesselsinthefleetpopulationarethenstandardisedsuchthattwoconditionsaremet,thesumofsampleweightsequalthepopulation,andtheweightedsumofthesamplecatchapproximatetotalcatchofthefleet.
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Thatis,
Σwi=PandΣwixi=X
where:
wiistheweightfortheithvessel
Pisthenumberofvesselsinthefleetpopulation
xiisthecatchfortheithvessel
Xisthetotalcatchforthefleetpopulation.
ReliabilityofestimatesABARESgenerallysurveysarelativelysmallnumberofboatsoutofthetotalnumberinaparticularfishery.Estimatesderivedfromtheseboatsarelikelytobedifferentfromthosethatwouldhavebeenobtainedifinformationhadbeencollectedfromacensusofallboats.Thenumberofboatsinthesample,thevariabilityofboatsinthepopulationand,mostimportantly,thedesignofthesurveyandtheestimationproceduresusedinfluencehowcloselythesurveyresultsrepresentthepopulation.
Measuresofsamplingvariationhavebeencalculatedtogiveaguidetothereliabilityofsurveyestimates.Thesemeasures,expressedaspercentagesofthesurveyestimatesandtermedrelativestandarderrors,aregivennexttoeachestimateinparentheses.Ingeneral,thesmallertherelativestandarderror,themorereliabletheestimate.
UseofrelativestandarderrorsRelativestandarderrorscanbeusedtocalculateconfidenceintervalsforthesurveyestimate.First,thestandarderroriscalculatedbymultiplyingtherelativestandarderrorbythesurveyestimateanddividingby100.Forexample,ifaveragetotalcashreceiptsareestimatedtobe$100000witharelativestandarderrorof6percent,thestandarderrorforthisestimateis$6000.
Thechancethatthecensusvalue(thevaluethatwouldhavebeenobtainedifallboatsinthetargetpopulationhadbeensurveyed)iswithinonestandarderrorofthesurveyestimateisroughlytwointhree.Thechancethatthecensusvalueiswithintwostandarderrorsofthesurveyestimatesisroughly19in20.Therefore,inthisexample,thechancethatthecensusvalueisbetween$94000and$106000istwointhreeandthechancethatthecensusvalueisbetween$88000and$112000is19in20.
ComparingestimatesWhencomparingestimatesacrossgroupsoryears,itisimportanttorecognisethatthedifferencesarealsosubjecttosamplingerror.Aconservativeestimateofthestandarderrorofthedifferencecanbeconstructedbyaddingthesquaresoftheestimatedstandarderrorsofthecomponentestimatesandthentakingthesquarerootoftheresult.
Forexample,supposetheestimatesoftotalcashreceiptswere$100000foroneyearand$125000forthepreviousyear—adifferenceof$25000—andtherelativestandarderrorisgivenas6percentforeachestimate.Thestandarderrorofthedifferencecanbeestimatedas:
0.06 ∗ $100000 0.06 ∗ $125000 $9605
Therelativestandarderrorofthedifferenceis:
$9605 $25000⁄ ∗ 100 38%
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Thepopulationofafisherymaychangefromoneyeartothenext.Ifthesepopulationchangesaresubstantial,differencesinestimatesmaybecausedmorebythechangesinpopulationthanbychangesinthevariablesthemselves.
Non‐samplingerrorsThevaluesobtainedinasurveymaybeaffectedbyerrorsotherthanthosedirectlyrelatedtothesamplingprocedure.Forexample,itmaynotbepossibletoobtaininformationfromcertainrespondents,respondentsmayprovideinaccurateinformationorrespondentsmaydifferfromnon‐respondentsforaparticularvariablebeingsurveyed.
ABARESsurveystaffaregenerallyexperiencedandundergorigorouspre‐surveytraining,aimedatminimisingnon‐samplingerrors.However,whendrawinginferencesfromestimatesderivedfromsamplesurveys,usersshouldbeawarethatbothsamplingandnon‐samplingerrorsoccur.
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Appendix C: Non‐survey based estimation of net economic returns ABAREShasdevelopedanon‐surveybasedmethodofestimatingneteconomicreturnsforfinancialyearswheresurveydataarenotyetavailable.Itallowsmoretimelyestimationandreportingofneteconomicreturnestimatestobetterinformindustryandgovernmentdecision‐making.Thismethodisintendedtocomplementdatacollectionandpublicationofresultsnormallyundertakenthroughthefisheriessurveys.
MethodThemethodusedtocalculatenon‐surveybasedestimatesofneteconomicreturnsforanon‐surveyyear(ayearforwhichnosurveydataareavailable)usesregressionestimatesforkeycomponentsofneteconomicreturns.Regressionapproachesusethemostrelevantvariablesforeachfishery,givenuniquefishingmethodsandothercharacteristics.Inallcases,eachcomponentisestimatedbasedonanassumedsampleofthepopulationandasetofcorrespondingassumedweights.Thisassumedsamplerepresentsthoseboatsthatareexpectedtobesampledinthenextsurvey.Keyvariablescorrelatingwithcashreceiptsandoperatingcostswereusedintheestimates.Results(seeTableC1andTableC2forfullregressionresults)showthatthesamevariableswereusedtoestimatebothcashreceiptsandoperatingcosts.
ReliabilityofestimatesEstimatesfromtheregressionanalysisaresubjecttouncertainties.First,relationshipsestimatedbetweensurveyedvaluesofreceiptsandcostsandothermorereadilyavailabledatarelyonthehistoricalsampleofboatssurveyed.Boatsthatareconsistentlynotincludedinasamplemaybeunder‐representedintheestimates.
Itisnotcertainthathistoricalrelationshipswillholdinthemostrecentyear.Operatingconditionsinthefisherymaychange,resultinginchangesinreceiptsandcostsnotforeseeableusingthismethod.
Estimatesshouldbeusedasanindicationofthelikelydirectionandmagnitudeofchangesinneteconomicreturns.Foreachreceiptandcostcategory,thecoefficientofdetermination(R2)givesanindicationoftheextenttowhichtheexplanatoryvariablescanexplainvariationinthedependentvariable.Lowercoefficientsofdeterminationsuggestagreaterlevelofuncertaintysurroundingtheestimates.
CashreceiptsCashreceiptsistheprimarycomponentofneteconomicreturncalculationsbecauseallothercostsaredeductedfromcashreceipts.Cashreceiptsrepresentsincomefromfishingoperationsinthesurveyedfishery.Fornon‐surveyyears,realGVPisagoodindicatorforcashreceiptsasitiscloselyrelatedtofishingincome.RealGVPwasestimatedusingaveragepricedataandcatchdata.VariablesincludedforeachfisheryarerealGVPandyearandvesselfactors(TableC1).
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Table C1 Regression model for average cash receipts, Eastern Tuna and Billfish Fishery
Variable Estimate Std.error t‐statistic Pr(>|t|)
Intercept 3.05e+04 5.64e+04 0.54 0.59
RealGVP 1.74e+00 7.87e‐02 22.13 0.00
Boatdummy –3.17e+05 1.33e+05 ‐2.38 0.02
Yeardummy(2014)
–2.42e+05 6.96e+04 ‐3.48 0.00
R2 0.90
Prob(F‐stat) 0.00
OperatingcostsKeydriversofoperatingcostsinanyfisheryarefuelandlabour.Therefore,accuratelycalculatingoperatingcostsforanon‐surveyyearrequiresselectingvariablesthatinfluencethesetwocomponents.Forlabour,sharepaymentsystemsimplyacloserelationshipbetweenfisheryGVPandlabourcosts.Incontrast,fuelcostiscollectedduringthebiennialsurveysABARESconductsforETBFforsampledvessels,whichcanthenbeweightedtogenerateestimatesforeachfisherysector.However,fuelcostdidnotappeartobestatisticallysignificantinestimatingtheoperatingcostfortheETBFin2013–14andinfactdeterioratedthemodel.PreliminaryestimatesofoperatingcostwerebasedonrealGVPandyearandvesselfactors(TableC2).
Table C2 Regression model for average operating costs, Eastern Tuna and Billfish Fishery
Variable Estimate Std.error t‐statistic Pr(>|t|)
Intercept 2.55e+05 4.50e+04 5.65 0.00
RealGVP 1.34e+00 6.28e‐02 21.27 0.00
Boatdummy –3.39e+05 1.06e+05 –3.19 0.00
Yeardummy(2014)
–2.19e+05 5.56e+04 –3.95 0.00
R2 0.89
Prob(F‐stat) 0.00
Cashreceiptsandoperatingcostregressionsweretestedformodelfitincludingresidualnormality,heteroskedasticity,multicollinearityandautocorrelation.Initiallyalargersetofvariableswereconsideredforallregressionsbutonlyvariablesthatwerestatisticallysignificantorimprovedmodelfitwerekeptinthefinalregression.
Interest,leasingandmanagementfeesInterestandleasingfeesrepresentaredistributionofprofitstoinvestorsinthefishery.Assuch,theyarenotcostsatthefisherylevel.Theyareestimatedbasedonhistoricalratiosandvalues.
ManagementfeesforthepurposeoftheestimationaretakenfromAFMA(recoveredandnon‐recovered)andincludeallcostsformanagingthefishery,notjustthoserecoveredfromindustry.Managementfeesarealsoestimatedbasedonhistoricalratiosandvalues.
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OpportunitycostofcapitalanddepreciationCapitalvalues,theopportunitycostofcapitalanddepreciationexpenseswereestimatedbasedonanimpliedcapitalrateof7percentandassumingadepreciationrateequaltothatinthemostrecentsurveyyearandacapitalupgraderate(anassumedcapitalinvestmentamount).
ManagementcostsTotalmanagementcosts(recoveredandnon‐recovered)for2013–14werebasedonAFMA’sbudgetedestimates.
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Appendix D: Productivity and terms of trade methodology
ProductivitymeasurementProductivityisdefinedasthequantityofoutputproducedwithagivenquantityofinputs.Forexample,apartialmeasureofproductivityforafishingvesselwouldbekilosofaparticularspeciesoffishproducedperhookused.Amorecompletemeasureofproductivitywouldbethetotalcatchperunitofallinputsused.Thisapproachispreferredasameasureofproductivityandisusuallyreferredtoastotalfactorproductivity.
Variousmethodshavebeendevelopedtoquantitativelyassesstotalfactorproductivitytrendsforindustriesandindividualenterpriseswithinindustries(seeCoellietal.2005fordiscussion).Afrequentapproachtomeasuringproductivitytrendsusesindexnumbertheory.InthisreportaFisherquantityindexisusedtomeasuretotalfactorproductivitytrendsforkeyCommonwealthfisheries(BoxD1).Fishery‐levelinput,outputandtotalfactorproductivityindexeswereestimatedforeachoftheCommonwealthfisheriesanalysedandforeachyearwheredatawereavailable.TheFisherquantityindexiswell‐suitedtohandlingtherangeofinputsandoutputsrecordedinABARESfisherieseconomicsurveydata.Forexample,ABARESfisherieseconomicsurveydatacontainmanyzeroentries,whicharewellhandledbytheFisherquantityindexapproach.
Aswithotherindexnumberapproachesthatmeasureproductivity,theFisherquantityindexenablesmeasurementofproductivitytrendswithmultipleinputsandoutputs.Thepricespaidforinputsandreceivedforoutputsareusedasweightstoderiveaggregationsofoutputsandinputs,whichareexpressedinindexform.OutputandinputindexesareestimatedusingbothLaspeyresandPaascheindexapproaches.AgeometricmeanoftheseindexesisderivedtodeterminetheFisheroutputandinputindexes.TotalfactorproductivityismeasuredastheratiooftheFisheroutputandFisherinputindexes.
TermsoftrademeasurementABARESconstructsatermsoftradeanalysisusingthesameprocessasisusedforTFP,exceptconstructingFisherpriceindexesratherthanFisherquantityindexes.Thepriceindexaccountsforthepricesoflabourandfuel—themajorcostcomponents—andthecostsofrepairingandmaintainingcapital.
DataDatausedforthistotalfactorproductivityanalysisaresourcedfromtheABARESAustralianfisheriessurveysdataset.ThesurveysdatasetcomprisesphysicalandfinancialsurveydataforasampleofvesselsoperatinginkeyCommonwealthfisheries.Theinputsincorporatedintheinputindexesforeachfisheryarelabour,fuel,repairsandcapital.Theoutputindexesforeachfisheryaredescribedintheresultssectionforeachindividualfishery.Populationestimatesarederivedusingsamplevesseldatafromthisdatabaseandarecalculatedforeachofthefisheriesanalysedinthisreport.Aweightiscalculatedforeachboatinthesample,torepresentitsimportanceinthetotalunobservedpopulation.Theweightisgenerallybasedonthevessel’scatchrepresentation.Weightedvessel‐levelinformationisusedtoderivefisherylevelinputandoutputindexes.
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Box D1 Fisher index
Usingpriceandquantitydataforasetofoutputs(andseparatelyforinputs),theLaspeyresquantityindexQ canbedefinedas:
N
ii
itiN
i ii
N
i itiLt q
qW
qp
qpQ
10
0
1 00
1 0
0
where
N
i ii
iii
qp
qpW
1 00
000
istheshareofithiteminthetotalvalueofoutputsorinputsinthebaseperiod(denotedby0).TheLaspeyresindexcomparesatotalquantityintimeperiod t toabaseperiod.
ThePaascheindex(PtQ 0 )isdefinedas:
1
0
1
1 0
10
it
iN
i itN
i iit
N
i ititPt q
qW
qp
qpQ
where
N
i itit
ititit
qp
qpW
1
istheshareofithiteminthetotalvalueofoutputsorinputsinthecurrentperiod(denotedbyt).LiketheLaspeyresindex,thePaascheindexcomparesatotalquantityintime t toabaseperiod 0 .
TheFisherindex(FtQ0 )isthegeometricmeanofLaspeyresandPaascheindexes,definedas:
Pt
Lt
Ft QQQ 000
TheTFPindexcanbecalculatedastheratiooftheFisheroutput(Q andinput Q )indexes:
TFP QQ
Thetermsoftradeindexisconstructedbythesamemeansasabove,exceptwitheveryinstanceofQreplacedbyPandeveryinstanceofPreplacedbyQ.
InputsandoutputsTotalinputsconsistofitemsthatcanbesplitintothreemajorgroups:
Capital—accountforallcapitalitemsassociatedwiththefishingbusiness.Theseincludetheboat,hull,engine,onboardequipment,vehiclesandsheds.Theestimateofcapitalisbasedonthedepreciatedreplacementvalue.FortheTFPanalysiscapitalinputsaredaysfished,weightedbytheopportunitycostofusingboatcapital.Forthetermsoftradeanalysisthepriceisthecostofmaintainingandrepairingboatcapitalfortheyear.
Fuelcosts—includethecostsofallfuel,oilandgrease.Thequantityvariableusedforallfuelistheaverageoffuelusedeflatedbythefuelpricepaid.
Labour—includesthenumberofcrewemployedinboat‐relatedaspectsofthefishingbusiness,suchascreworonshoreadministrationcosts,butdoesnotcoverthecostofonshorelabourinvolvedinprocessingfisheriesproducts.Itcoversowner/partner,familyandunpaidlabour.
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Outputsarethespeciescaughtbyvesselsineachfishery.IntheETBF,thesespeciesareprimarilyswordfish,yellowfintuna,stripedmarlin,bigeyetunaandalbacore.Thepricevariableisthepricereceivedforthespeciescaughtandthequantityvariableisthekilogramsofeachspeciescaughtbyindividualvessels.
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