R05/0790 - Rights transfers and the effectiveness of … · Rights transfers and the effectiveness of ... s s m larly d str buted n other f sher es. In the Bass ... Rights transfers

ABARE report to AFMA

Rights transfers and the effectiveness of AFMA’s Quotaboard website

R05/0790 l 16/5/2009

�

© Commonwealth of Austral�a 2009

Th�s work �s copyr�ght. The Copyright Act 1968 perm�ts fa�r deal�ng for study, research, news report�ng, cr�t�c�sm or rev�ew. Selected passages, tables or d�agrams may be reproduced for such purposes prov�ded acknowledgment of the source �s �ncluded. Major extracts or the ent�re document may not be reproduced by any process w�thout the wr�tten perm�ss�on of the Execut�ve D�rector, ABARE.

ISSN 1447-8358

To, H, V�e�ra, S, and Wood, R 2009, Rights transfers and the effectiveness of AFMA’s Quotaboard website, ABARE report to the Austral�an F�sher�es Management Author�ty, Canberra, June.

Australian Bureau of Agricultural and Resource Economics Postal address GPO Box 1563 Canberra ACT 2601 Austral�a Location 7B London C�rcu�t Canberra ACT 2601 Switchboard +61 2 6272 2000 Facsimile +61 2 6272 2001

ABARE �s a profess�onally �ndependent government econom�c research agency.

ABARE project 3113

AcknowledgementsAFMA staff prov�ded support to ABARE �n comp�l�ng stat�st�cs about the Quotaboard webs�te and concess�on trades �nformat�on for th�s report. In part�cular, the authors would l�ke to thank Dav�d Galeano.

��

ContentsSummary 1

1 Quota ownersh�p and �mped�ments to trade 2

2 Quotaboard usage 3

3 H�stor�cal quota trade data 8

Quota trade across all f�sher�es 8Quota trade by vendor and purchaser 9

4 Conclus�on 12

Append�x

A Background 13

References 15

Tables 1 Average sale and lease pr�ces from Quotaboard post�ngs 6

2 Volume of quota leased as a share of TAC for SESS f�shery spec�es 9

F�guresa Cumulat�ve d�str�but�on of quota ownersh�p 2

b Number of posts to Quotaboard by month 3

c Number of posts to Quotaboard by advert�sement type 3

d Number of posts referr�ng to SESS spec�es as ‘for lease’ 4

e Number of posts referr�ng to SESS quota spec�es as ‘for sale’ 5

f Number of posts referr�ng to var�ous SESS concess�ons and boat SFRs as ‘for sale’ or ‘for lease’ 5

g Number of posts of non SESS f�shery concess�ons or quota 7

h K�lotonnes of quota traded across all f�sher�es, permanent and leased to June 30 2008 8

� D�str�but�on of permanent transfers by vendors 10

j D�str�but�on of permanent transfers by purchaser 10

k D�str�but�on of leases by vendor 11

l D�str�but�on of leases by purchaser 11

1

Summary

AFMA’s Quotaboard webs�te was launched �n September 2005 as a tool for br�ng�ng buyers and sellers of Commonwealth f�sher�es concess�ons together at low cost. The Quotaboard webs�te �s now �n �ts th�rd year of operat�on and nearly 400 posts have been made s�nce �ts �ntroduct�on. The f�rst two years of operat�on saw around 80 posts �n each year w�th the rema�nder �n the t�me s�nce then. The major�ty of posts relate to the southern and eastern scalef�sh and shark (SESS) f�shery. Posts have also been made for concess�ons �n a range of other f�sher�es �nclud�ng the eastern tuna and b�llf�sh f�shery (ETBF), the southern squ�d j�g f�shery, the Coral Sea f�shery, the southern bluef�n tuna (SBT) f�shery and the Bass Stra�t central zone scallop (BSCZS) f�shery. Posts offer�ng ‘for sale’, ‘for lease’, ‘wanted to lease’ and ‘wanted to buy’ have all been made. Offers to swap have also been made.

Transact�on costs are an obstacle to f�sh�ng r�ghts mov�ng from �neff�c�ent operators to the most eff�c�ent. Wh�le �neff�c�ent operators reta�n f�sh�ng r�ghts, f�shery eff�c�ency can be �mproved. Trade allows for f�sh�ng r�ghts to sh�ft to the most eff�c�ent operators to ach�eve th�s �mprovement. AFMA’s publ�c reg�sters show that 53 per cent of all ent�t�es �n the SESS f�shery have hold�ngs of less than 10 tonnes. These hold�ngs are relat�vely small. Ownersh�p �s s�m�larly d�str�buted �n some other Commonwealth f�sher�es. Quotaboard g�ves holders of small hold�ngs an opportun�ty to transfer the�r r�ghts at low cost.

S�nce the �ntroduct�on of the Quotaboard webs�te, there have been pos�t�ve s�gns �ts object�ves are be�ng met. The f�nd�ngs �nclude:

• a s�gn�f�cant �ncrease �n webs�te usage• a steady �ncrease �n the number of advert�sements, wh�ch peaked �n May 2008• an �ncrease �n the volume of concess�ons traded s�nce the webs�te was launched• the h�ghest recorded level of permanent transfer trade be�ng reached �n May 2008.

Th�s report �s the th�rd and f�nal report �n a ser�es wh�ch has presented f�nd�ngs on both webs�te usage and trade �n f�sh�ng concess�ons.

1

2

One of the strengths of a tradable concess�on system �s that ent�tlements can be purchased by the most eff�c�ent operators. However, any �mped�ments to trade may prevent th�s eff�c�ent outcome. AFMA �s l�kely to be �nterested �n allev�at�ng obstacles to quota trade wh�ch relate to s�tuat�ons where a buyer and a seller have a ‘co�nc�dence of wants’ but f�nd �t too costly to locate each other and f�nal�se a trade. Quotaboard �s one way to allev�ate such �mped�ments. The benef�ts of quota trade and a br�ef descr�pt�on of the Quotaboard webs�te are prov�ded �n append�x A.

There �s some ev�dence that transact�on costs may be caus�ng some holders to reta�n small hold�ngs. For example, AFMA’s publ�c reg�sters show that there are a large number of holders �n some f�sher�es who hold very small amounts of quota. In the southern and eastern scalef�sh and shark f�shery (SESS), sl�ghtly more than 7 per cent of ent�t�es hold 60 per cent of the f�shery’s total quota hold�ngs (figure a). Conversely, 53 per cent of the populat�on of quota holders each hold less than 10 tonnes of quota. Ownersh�p �s s�m�larly d�str�buted �n other f�sher�es. In the Bass Stra�t central zone scallop (BSCZS) f�shery, 25 per cent of reg�stered ent�t�es together hold 51 per cent of the f�shery’s quota ent�tlements �n volume terms. In the southern bluef�n tuna (SBT) f�shery, 9 per cent of reg�stered ent�t�es together hold 50 per cent of the f�shery’s quota ent�tlements �n volume terms.

Quota ownership and impediments to trade

Cumulative distribution of quota ownership as at 3 May 2008

a

25

50

75

%

100

SESSSBTBSCZS

0 25 50 75 100entities (%)

cum

ulat

ive

quot

a di

strib

utio

n

Note: SESS refers to southern and eastern scalef�sh and shark f�shery quota, SBT refers to southern bluef�n tuna quota and BSCZS refers to Bass Stra�t central zone scallop quota.

3

Th�s sect�on reports stat�st�cs relat�ng to the number and character�st�cs of posts to the Quotaboard webs�te. Such stat�st�cs prov�de an �nd�cat�on of webs�te usage and how the webs�te may be ass�st�ng �n the trade of f�sh�ng r�ghts. It should be noted that trades wh�ch have resulted from advert�sements on Quotaboard cannot be �dent�f�ed. All data analysed here covers the per�od from webs�te launch to 30 June 2008.

A total of 399 advert�sements were posted at an average rate of 11.7 advert�sements a month. The h�ghest number of post�ngs �n a s�ngle month occurred �n May 2008 when 49 advert�sements were posted. The large number of post�ngs �n May co�nc�ded w�th the start of the 2008 SESS f�sh�ng season. The start of a new season usually sees f�shers seek�ng to acqu�re the�r des�red quota for the season. The lowest number of post�ngs �n a s�ngle month was three and occurred dur�ng the 2006 SESS f�sh�ng season �n both May and August 2006 (figure b).

Advert�sement post�ngs on the Quotaboard webs�te have �ncreased over t�me. Th�s could be an �nd�cat�on that the webs�te �s meet�ng �ts object�ve of br�ng�ng buyers and sellers together and reduc�ng the costs of trade.

The major�ty of post�ngs have been ‘for lease’ advert�sements (154 post�ngs) and ‘for sale’ advert�sements (134 post�ngs). ‘Wanted for lease’ post�ngs were also common, totall�ng 74 (figure c).

Posts relating to the SESS fisheryAdvert�sements for ent�tlements �n the SESS f�shery dom�nate post�ngs to the webs�te. Almost all spec�es managed by quota �n the SESS f�shery have been referred to. Of these, gummy shark, saw shark and school shark are most commonly referred to �n ‘for lease’ posts (figure d).

Number of posts to Quotaboard monthly, b

10

30

20

40

0

50

Dec June Dec June Dec June

200720062005 2008

website launch to September 2008

Number of posts to Quotaboard, by advertisement typecwebsite launch to 30 June 2008

154

134

37

74

for lease for sale wantedto buy

wantedto lease

Quotaboard usage2

Rights transfers and the effectiveness of AFMA’s Quotaboard website abare.gov.au report to cl�ent

4

Over the same per�od, gummy shark, blue eye trevalla and school shark quota were ment�oned most often �n ‘for sale’ advert�sements (figure e).

There have been 74 ‘wanted for lease’ post�ngs on the webs�te. Of these, there were 90 ment�ons of SESS f�shery quota spec�es (one advert�sement post�ng may conta�n more than one ment�on of a quota or concess�on type). Quota for gummy shark was advert�sed as ‘wanted to lease’ 22 t�mes and school shark 18 t�mes, suggest�ng quota for these spec�es are h�ghly sought after. The next h�ghest advert�sed ‘wanted to lease’ post�ngs were for blue eye trevalla (12 posts) and flathead (11 posts). W�th�n the ‘wanted to lease’ advert�sements there were three posts request�ng swaps of quota.

There were 37 ‘wanted to buy’ post�ngs w�th�n wh�ch there were 27 ment�ons of SESS quota spec�es, �nclud�ng 10 ment�ons of school shark, s�x each of gummy shark and blue eye trevalla and three of p�nk l�ng.

There were 61 posts relat�ng to the sale or lease of non-quota SESS f�shery statutory f�sh�ng r�ghts (SFRs) or f�sh�ng concess�ons (figure f ). Posts for g�llnet concess�ons were most common – 13 ‘for sale’ and seven ‘for lease’ posts were made. State coastal water perm�ts for scalef�sh hook and g�llnet methods rece�ved e�ght posts each wh�le four posts were rece�ved for Commonwealth trawl concess�ons. There were also seven ‘for sale’ and two ‘for lease’ posts relat�ng to unspec�f�ed SESS concess�ons.

Number of posts referring to SESS species as ‘for lease’d website launch to 30 June 2008

Orange roughy - southOrange roughy - east

Unspeci�edOrange roughy - west

Royal red prawnBlue grenadier

Deepwater sharkOreo dory - smooth

Gem�sh - western stockOreo dory - other

Gem�sh - eastern stockFlathead

Spotted warehouEastern school whiting

Mirror doryPink ling

Jackass morwongRed�sh eastern

John doryRibaldo

Ocean perchSilver trevally

Blue warehouElephant �sh

Blue eye trevallaSchool shark

Saw sharkGummy shark

0 10 20

number of posts

30 40 50

5


Table 1 shows the average ‘for sale’ and ‘for lease’ ask�ng pr�ces for some SESS quota spec�es, based on pr�ces spec�f�ed �n Quotaboard posts. Gummy shark had the h�ghest average lease ask�ng pr�ce at $2.70 a k�logram, w�th school shark record�ng the second h�ghest at $2.44 a k�logram. Many spec�es traded at cons�derably lower pr�ces. For example, m�rror dory, s�lver trevally, spotted warehou, ocean perch, redf�sh and school wh�t�ng were

Number of posts referring to SESS quota species as ‘for sale’e website launch to 30 June 2008

0 105 15

number of posts

20 25 30

Unspeci�edAlfonsino

RibaldoDeepwater shark - east

Orange roughy - cascadeGem�sh - western stockGem�sh - eastern stock

Red�shMirror dory

John doryEastern school whiting

Jackass morwongSilver trevally

Pink lingOcean perch

Blue warehouRoyal red prawn

OreosFlathead

Elephant �shSaw shark

School sharkBlue eye trevalla

Gummy shark

Number of posts referring to various SESS concessions and boat SFRs as ‘for sale’ or ‘for lease’ website launch to 30 June 2008 f

0 5 10 15 20 25number of posts

Gillnet boat SFR

SESSF SFR (unspeci�ed)

Gillnet permit (various coastal waters)

Scale�sh hook permit (various coastal waters)

Scale�sh hook SFR

Commonwealth trawl SFR

East coast deep water trawl SFR

High seas non-trawl SFR

GHT unspeci�ed

leasesale


6

advert�sed at $0.30 a k�logram or less. Table 1 also reveals that ‘for lease’ ask�ng pr�ces were read�ly posted �n advert�sements, wh�le ‘for sale’ ask�ng pr�ces were stated less often. Th�s was because many ‘for sale’ advert�sements offered the sale of quota w�th�n f�sh�ng concess�on packages, for wh�ch a s�ngle ask�ng pr�ce would be quoted for the ent�re package. In other cases, �t was l�kely that an ask�ng pr�ce was not stated so as to leave the sale pr�ce open to negot�at�on.

Posts relating to other fisheriesThere were 60 posts advert�s�ng concess�ons or SFRs for f�sher�es other than the SESS f�shery (figure g). Commonwealth squ�d and the eastern tuna and b�llf�sh f�shery (ETBF) concess�ons accounted for the major�ty, w�th 23 posts and 18 posts, respect�vely. There were also three ‘for sale’ and two ‘for lease’ posts offer�ng Coral Sea perm�ts. Posts are not restr�cted to Commonwealth f�sher�es, w�th s�x state concess�ons advert�sed for sale on the webs�te. State concess�ons from New South Wales and Tasman�a were the most common w�th two posts of each.

1 Average sale and lease prices from Quotaboard postings webs�te launch to 30 June 2008

species average price ($/kg) For lease For saleBlue eye trevalla 2.24 28.58Blue warehou 0.35 naDeepwater shark – west 0.50 naElephant f�sh 0.40 10.00Flathead 0.40 12.00Gummy shark 2.70 35.27Jackass morwong 0.30 naL�ng 1.33 naM�rror dory 0.30 naOcean perch 0.21 naOrange roughy – cascade 2.00 naRedf�sh 0.16 naSaw shark 0.84 9.50School shark 2.44 37.00School wh�t�ng 0.21 naS�lver trevally 0.30 naSpotted warehou 0.10 na

na Not ava�lable.

7


Number of posts of non-SESS �shery concessions or quotag website launch to 30 June 2008

0 1510 205

number of posts

25

State permit (various)ETBF permit

Southern squid jig SFR

leasesale

Coral Sea permit

SBT quota

South Tasman Rise permit

BSCZS SFR

Small Pelagics Midwater trawl permit

8

Quota trade across all fisheriesThere �s cons�derable monthly var�at�on �n the trade of quota SFRs across all f�sher�es (figure h). The volume of quota sold each month �s much lower than the volume wh�ch �s seasonally leased, although an �ncrease �n the sale of quota �n a g�ven per�od usually corresponds w�th h�gh levels of seasonal leas�ng.

The average monthly trade of quota (transfers and leases) over the per�od October 2001 to August 2008 was 3020 tonnes. Th�s �s below the monthly average of 3100 tonnes from webs�te launch to July 2006. It may be the case that trade decreases once concess�ons have moved to the most eff�c�ent operators. Trade reached a peak �n June 2003 at 11 400 tonnes. Th�s was because of h�gh volumes of quota be�ng traded both permanently and seasonally for blue grenad�er �n the SESS f�shery, and Patagon�an toothf�sh and mackerel �cef�sh �n the Heard Island and McDonald Islands (HIMI) f�shery.

Trade �n quota for the SESS f�shery �s large. The spec�es wh�ch have dom�nated lease and trade �n the SESS s�nce October 2001 �nclude blue grenad�er, flathead, spotted warehou and orange roughy. These spec�es have also dom�nated trade

of permanent transfers �n the SESS f�shery. May 2008 saw the h�ghest recorded number of permanent transfers, of more than 3400 tonnes. Th�s co�nc�ded w�th the start of the 2008 SESS f�sh�ng season and �nd�cates that operators were secur�ng quota concess�ons for the new season.

The volume of seasonally leased quota can exceed the total allowable catch (TAC) for some spec�es �n any g�ven season. Th�s means that each un�t of quota changes hands more than once on average �n a season. In the 2007 f�sh�ng season, the volume of quota leased �n the SESS f�shery exceeded the annual TAC for only three spec�es groups (table 2).

Historical quota trade data

Quota traded across all �sheries permanent and leased to June 30 2008h

leasetransfer

200620052004200320022001 2007

‘000tonnes

2

4

6

8

10

12

Dec Dec Dec Dec Dec Dec Dec

3

9


2 Volume of quota leased as a share of TAC for SESS fishery species 2007 fish�ng season

species volume of lease trade 2007 season TAC (agreed) volume leased as a % of TAC kg kg %

S�lver trevally 210 954 191 000 110%Gemf�sh – east 124 647 121 000 103%Blue grenad�er 4 115 845 4 113 000 100%Gummy shark 2 204 869 2 467 000 89%P�nk l�ng 1 360 402 1 537 000 89%Elephant f�sh 102 509 123 000 83%Blue warehou 253 253 313 000 81%Saw shark 326 373 410 000 80%Flathead 3 191 598 4 020 000 79%School shark 271 972 352 000 77%M�rror dory 598 622 788 000 76%Gemf�sh – west 147 129 200 000 74%School wh�t�ng 658 948 978 000 67%Blue eye trevalla 522 417 785 000 67%Jackass morwong 726 620 1 171 000 62%Spotted warehou 2 421 034 4 117 000 59%Royal red prawn 313 131 556 000 56%Orange roughy – east 14 879 27 000 55%John Dory 126 356 237 000 53%Oreo 96 973 190 000 51%Redf�sh 453 339 896 000 51%Orange roughy – west 29 162 61 000 48%Orange roughy – cascade 230 583 483 000 48%Smooth dory – Cascade Plateau 42 962 93 000 46%Deepwater shark – west 4 573 10 000 46%Deepwater shark – east 9 168 21 000 44%Orange roughy – southern 16 909 40 000 42%Ocean perch 240 524 585 000 41%R�baldo cod 94 403 257 000 37%Smooth dory 17 417 52 000 33%Orange roughy – Albany & Esperance 10 400 52 000 20%B�ght redf�sh 60 511 3 338 000 2%Deepwater flathead 3 390 2 109 000 <1%

Note: The 2007 f�sh�ng season was from 1 January 2007 to 30 Apr�l 2008.


10

Quota trade by vendor and purchaser

Permanent transfersAround 90 per cent of the volume (�n k�lograms) of permanent quota transfers �n the SESS f�shery was attr�butable to 20 per cent of the vendor populat�on dur�ng the 2007-08 f�nanc�al year (figure �). In the SBT f�shery, around 20 per cent of vendor ent�t�es accounted for more than 70 per cent of the volume of permanent transfers. Both the BSCZS and HIMI f�sher�es exh�b�ted a relat�vely even d�str�but�on, compared w�th the SESS and SBT f�sher�es. In the BSCZS and HIMI f�sher�es, around 60 per cent of vendor ent�t�es accounted for nearly 90 per cent of permanent transfers, although �t should be noted that there were only three permanent transfers of BSCZS f�shery quota and two of HIMI f�shery quota.

By purchaser, the results were s�m�lar w�th the except�on of the BSCZS f�shery wh�ch was more evenly d�str�buted. F�fty per cent of the purchaser ent�t�es accounted for around 60 per cent of the volume of permanent transfers �n the BSCZS (figure j).

LeasesIn the 2007-08 f�nanc�al year �n the SESS f�shery, around 20 per cent of vendor ent�t�es accounted for more than 70 per cent of the volume (�n k�lograms) of leases (figure k). In the SBT f�shery, 20 per cent of vendor ent�t�es accounted for more than 90 per cent of the volume of leases over the same per�od. The relat�vely even d�str�but�on of leases �n the HIMI f�shery was

Note: Calculated on k�lograms transferred. Calculat�ons for the BSCZS f�shery used the 2005 TAC because the f�shery has had a zero TAC s�nce 2006.

Distribution of permanent transfersby vendor 2007-08 �nancial yeari

Cum

ulat

ive

% o

f tra

de

0 10 20 30 40 50 60 70 80 90 1000

10

2030

405060

7080

90100

Cumulative % of vendors

BSCZSHIMISBTSESS

Distribution of permanent transfersby purchaser 2007-08 �nancial yearj

Cumulative % of purchasers

Cum

ulat

ive

% o

f tra

de

BSCZSHIMISBTSESS

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Note: Calculated on k�lograms transferred. Calculat�ons for the BSCZS f�shery used the 2005 TAC because the f�shery has had a zero TAC s�nce 2006.

11


Distribution of leases by vendor2007-08 �nancial yeark

Cum

ulat

ive

% o

f tra

de

010

2030

405060

7080

90100

0 10 20 30 40 50 60 70 80 90 100

HIMISBTSESS

Cumulative % of vendors

Distribution of leases by purchaser2007-08 �nancial yearl

Cum

ulat

ive

% o

f tra

de

HIMISBTSESS

010

2030

405060

7080

90100

0 10 20 30 40 50 60 70 80 90 100Cumulative % of purchasers

Note: Calculated on k�lograms leased. Note: Calculated on k�lograms leased.

the result of there be�ng only two lease trades of quota �n that f�shery. A zero TAC �n the BSCZS f�shery meant that no quota leas�ng occurred for th�s f�shery.

By purchaser, the d�str�but�on of quota lease trade �n the SESS f�shery was relat�vely more evenly d�str�buted w�th 30 per cent of purchasers account�ng for nearly 90 per cent of the volume of leases (figure l). The SBT f�shery was less evenly d�str�buted w�th 15 per cent of purchasers account�ng for 90 per cent of the volume of leases. There was a s�ngle lease purchaser �n the HIMI f�shery.

12

The Quotaboard webs�te prov�des �nd�v�duals look�ng to buy, sell, or lease f�sh�ng concess�ons w�th a low cost means of supply�ng and f�nd�ng out �nformat�on about transfers. In do�ng so, the webs�te can potent�ally reduce the transact�on costs assoc�ated w�th trade �n f�shery concess�ons, thereby promot�ng �ncreased trade.

As a general rule, an �ncrease �n f�sh�ng concess�on trade represents a movement of r�ghts to ent�t�es who expect to generate a greater econom�c return from f�sh�ng aga�nst those r�ghts. As a result, trade �n f�sh�ng r�ghts has pos�t�ve consequences for the econom�c prof�tab�l�ty of f�sher�es. Th�s �s part�cularly the case for Commonwealth f�sher�es follow�ng the Austral�an Government’s Securing Our Fishing Future structural adjustment package wh�ch concluded �n December 2006.

Th�s report �s the th�rd and f�nal report �n a ser�es wh�ch has presented f�nd�ngs on both Quotaboard webs�te usage and the trade �n f�sh�ng. The ev�dence presented �n th�s report suggests that the Quotaboard webs�te has had a pos�t�ve effect on trade �n f�shery concess�ons.

In �ts f�rst 11 months of operat�on to July 2006, the Quotaboard webs�te rece�ved 82 advert�sements posted on �ts webs�te at an average rate of 7.5 advert�sements a month. By March 2007, the number of advert�sements had �ncreased to 167 at an average rate of 8.8 a month. Th�s current report shows the number of advert�sements posted to the webs�te has �ncreased to 399 by the end of June 2008, w�th the average number of posts per month r�s�ng s�gn�f�cantly to an average of 11.7 a month.

The number of advert�sements posted to the webs�te �s an �nd�cat�on of �ts �ncreas�ng use and market part�c�pants’ awareness of �ts ava�lab�l�ty. However the webs�te �s relat�vely new and awareness and use of the webs�te may cont�nue to �ncrease.

The amount of quota trad�ng �s another �nd�cator of Quotaboard’s success �n ass�st�ng trade �n concess�ons. The amount of trade (permanent trade �n part�cular) could be expected to decl�ne after f�sh�ng r�ghts have moved toward the most eff�c�ent f�shers. However, �t has been shown that s�gn�f�cant trade �n f�sh�ng concess�ons st�ll cont�nues. Th�s �s l�kely to be because of the recently �mplemented structural adjustment package and recent reduct�ons �n TACs. Therefore, the Quotaboard webs�te st�ll has a role to play �n fac�l�tat�ng concess�on trade. The webs�te w�ll also cont�nue to be �mportant �n fac�l�tat�ng future trade �n f�sh�ng concess�ons as the character�st�cs of f�sher�es and econom�c cond�t�ons change over t�me.

4 Conclusion

13

Aappendix

13

QuotaboardIn September 2005, AFMA launched a free onl�ne bullet�n board serv�ce called Quotaboard (AFMA 2005). The Quotaboard webs�te can be v�ewed at www.quotaboard.afma.gov.au. The system allows those look�ng to sell, buy and lease concess�ons to post advert�sements g�v�ng deta�ls about the transfer �n wh�ch they are �nterested. Subscr�bers (who reg�ster for free) are not�f�ed by ema�l of new post�ngs. Part�es can make contact e�ther by us�ng deta�ls posted �n the advert�sement �tself, or by a pr�vate ema�l system managed by the Quotaboard webs�te. Offer�ng concess�on holders a low cost and easy to use onl�ne fac�l�ty for commun�cat�ng should reduce transact�on costs, �ncrease the rate at wh�ch effort and catch grav�tates to least cost operators and �mprove net econom�c returns.

Trade: benefits and impedimentsAFMA’s management of Commonwealth f�sher�es resources �n Austral�a’s f�sh�ng zone �s gu�ded by the Fisheries Management Act 1991 and the Fisheries Administration Act 1991. Both p�eces of leg�slat�on conta�n object�ves wh�ch requ�re AFMA to pursue max�mum net econom�c returns to the Austral�an commun�ty from the management of Austral�an f�sher�es.

Trade �s strongly related to th�s object�ve because �t can help ensure that harvest�ng takes place at least cost. That �s, a tradable concess�ons system allows concess�ons to move to the most eff�c�ent operators, mean�ng that econom�c returns are max�m�sed.

The benefits of tradeWhere property r�ghts ex�st over a resource, barga�n�ng among property r�ght owners w�ll lead to resources be�ng allocated to the�r most product�ve use (Coase 1960). Eff�c�ent operators value the resource more h�ghly than �neff�c�ent operators because the prof�ts they can make from �t are h�gher. Ineff�c�ent operators f�nd that they are better off sell�ng the�r concess�on than ut�l�s�ng �t themselves.

In the context of f�sher�es, �f trade �n quota and other concess�ons �s perm�tted then r�ghts can flow to the least-cost operators. Any g�ven harvest can be made at a lower total cost, lead�ng to greater net econom�c returns.

Cost sav�ngs result�ng from trade to move concess�ons to more eff�c�ent operators were explored by Kompas and Che (2003). They found that the �ntroduct�on of �nd�v�dual transferrable quotas to the trawl sector of the SESS f�shery resulted �n cost sav�ngs of between 1.8 and 2.1 cents a k�logram for every 1 per cent �ncrease �n the volume of quota traded.

Background


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Impediments to tradeWh�le many Commonwealth f�sher�es already have a system of transferable r�ghts, there are var�ous factors wh�ch may prevent the market from work�ng as smoothly as �t could. These �nclude:

• Indivisibility of rights – the nature of some concess�ons �s that f�shers cannot break the�r ent�tlements �nto smaller parts to lease or sell parts they do not need.

• Restrictions on trade – somet�mes AFMA �s compelled to restr�ct trade, part�cularly wh�le legal �ssues are resolved.

• Transactions costs – these relate to the costs of f�nd�ng a buyer or seller w�th whom to transact. These costs �nclude brok�ng and opportun�ty costs.

The �ntroduct�on of statutory f�sh�ng r�ghts (SFRs) to many f�sher�es has made r�ghts more secure and many f�shers can now ta�lor the�r hold�ngs to su�t the�r operat�ons. However, there may be a problem w�th part�es who would trade �f they could f�nd each other (rather than part�es who f�nd each other but cannot agree on a pr�ce). Therefore, there may be a role for AFMA to reduce transact�ons costs �n the pursu�t of max�m�s�ng net econom�c returns.

AFMA’s Quotaboard webs�te fulf�ls th�s role by prov�d�ng a low cost and eas�ly access�ble means to f�nd, buy and sell quota. By reduc�ng the transact�on costs of f�nd�ng other part�c�pants �n the quota market, the Quotaboard webs�te should �mprove the way quota markets operate. Consequently, quota should move more freely to the most eff�c�ent operators �n quota managed f�sher�es, lead�ng to max�m�sed econom�c returns.

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References

AFMA (Austral�an F�sher�es Management Author�ty) 2005, ‘Trawl�ng the net just got eas�er’, AFMA med�a release, 8 September.

Coase, R 1960, ‘The problem of soc�al cost’, Journal of Law and Economics, vol 3, pp 1–44, October.

Kompas, T and Che, N 2003, Efficiency gains and cost reductions from individual transferable quotas: A stochastic cost frontier for the south east fishery, ABARE report to the F�sher�es Resources Research Fund, February.

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ReseaRch funding ABARE rel�es on financ�al support from external organ�sat�ons to complete �ts research program. As at the date of th�s publ�cat�on, the follow�ng organ�sat�ons had prov�ded financ�al support for ABARE’s research program �n 2007-08 and �n 2008-09. We gratefully acknowledge th�s ass�stance.

AusA�d

Austral�an F�sher�es Management Author�ty

Austral�an Government Department of Cl�mate Change

Austral�an Government Department of the Env�-ronment, Water , Her�tage and the Arts

Austral�an Government Department of Resources, Energy and Tour�sm

CRC Plant B�osecur�ty

CSIRO (Commonwealth Sc�ent�fic and Industr�al Research Organ�sat�on)

Da�ry Austral�a

Department of Pr�mary Industr�es, V�ctor�a

DN Harr�s and Assoc�ates

European comm�ss�on

F�sher�es Research and Development Corporat�on

F�sher�es Resources Research Fund

Forest and Wood Products Austral�a

Gra�ns Research and Development Corporat�on

Grape and W�ne Research and Development Corporat�on

Hort�culture Austral�a

Internat�onal Food Pol�cy Research Inst�tute

Land and Water Austral�a

Meat and L�vestock Austral�a

Nat�onal Austral�a Bank

OECD

Rural Industr�es Research and Development Corporat�on

The Treasury

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02.09

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