Fishery Performance Indicators

Transcription

1 Fishery Performance Indicators With Test Cases: Alaska Salmon, New England Groundfish, and Guyana Fisheries James L. Anderson 1 & Christopher M. Anderson 2 Prepared by J.L. Anderson Associates Inc. Wakefield, RI Prepared for the International Coalition of Fisheries Associations (ICFA), McLean, VA March 10, Professor, Dept. of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, RI 2 Associate Professor, Dept. of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, RI

2 Fishery Performance Indicators With Test Cases: Alaska Salmon, New England Groundfish, and Guyana Fisheries James L. Anderson 3 & Christopher M. Anderson 4 Prepared by J.L. Anderson Associates Inc. Wakefield, RI Prepared for the International Coalition of Fisheries Associations (ICFA), McLean, VA This project was funded by ALLFISH (Alliance for Responsible Fisheries), a public-private partnership created by the seafood industry, the World Bank, the UN s Food and Agriculture Organization, and the Global Environment Facility Cover Photos: James L. Anderson March 10, Professor, Dept. of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, RI 4 Associate Professor, Dept. of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, RI

3 CONTENTS EXECUTIVE SUMMARY I. INTRODUCTION...3 II. FISHERY PERFORMANCE INDICATORS Outputs (Measuring Wealth)...21 III. FISHERY PERFORMANCE FACTORS Wealth Enabling Inputs...79 APPENDIX Test Cases: Alaska Salmon, New England Groundfish, and Guyana TABLES Table 1. FISHERY PERFORMANCE INDICATORS Outputs (Measuring Wealth)...7, 22 Table 2. FISHERY PERFORMANCE INDICATORS Inputs (Enabling Wealth Creation)...9, 80 1

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5 The Fishery Performance Indicators: Executive Summary Under the current management system, market forces can t and won t allow the Alaska salmon industry to achieve anything close to its full economic potential. Knapp 2002 INTRODUCTION Although biological sustainability is a necessary condition for sustainable income and wealth, it is not sufficient. While the MSC-certified Alaska salmon fishery described above is biologically well managed, state mandates for inefficient boats and gear and regulations that induce a race to fish -keep costs high, quality low and discourage investment in processing and marketing. This situation is common in fisheries around the world, as The Sunken Billions: The Economic Justification for Fisheries Reform estimates the annual worldwide economic loss to fisheries mismanagement to be around $US 50 billion (The World Bank, 2008). For fisheries to provide a strong economic foundation for the communities that depend on them, or to serve as catalysts for regional economic development, fisheries stakeholders, managers, researchers, NGOs and aid agencies must also be attentive to economic outcomes. The wealth-based Fishery Performance Indicators (FPIs) are a new set of indicators for evaluating and comparing the world s fisheries management systems. A wealth-based fishery management system is one that is ecologically sustainable, socially acceptable and generates sustainable resource rents or profits. The FPIs fall into two categories. The first category is indicators of outputs that identify and measure key factors that reflect success or failure in the creation of maximum potential wealth from fisheries. The second consists of input factors that enable or contribute to the process of developing wealth-creating fisheries. By integrating critical governance and economic dimensions, many of which are currently ignored, into broad-based assessment, the FPIs have the potential to transform aquatic resource management and policy, especially in developing economies. The FPIs are designed not only as a tool for identifying countries that are underperforming in wealth generation, but also as a framework for pinpointing what policies and interventions are likely to have greatest impact and for research that supports evidence-based policymaking. By analyzing relationships among the wealth creation and input measures, the FPI dataset can be used to understand the causes, correlations and paths toward successful industry development that can arise from investment in, and changes to, fishery policy and practice. With this information, a range of fishery-concerned audiences in furthering their individual goals will enhance the development of fishery-based wealth globally. These enterprises include: international aid agencies, fishing industry stakeholders and communities, fisheries management agencies, international seafood suppliers and retailers, investors and bankers, non-governmental organizations, and academics and researchers. VISION AND APPLICATION The FPIs are designed to assess the wealth generation success of management bodies, primarily at the country or regional management council level, and may include multiple 3

6 species, seeking to strike a balance between the scope of the management authority and the economic size of the evaluated fishery. At maturity, the FPIs will be a panel of indicator scores for over 100 countries and large fisheries, collected at regular intervals to monitor wealth creation within and across management systems. The individual measures are coded in levels (1 to 5) and are designed to be easy to collect and score across a wide range of fisheries. They rely on a basic set of data that should be available in all significant fisheries (e.g., volumes and prices) and expert assessment of qualitative indicator levels; it requires no primary data collection. Inputs and outputs are each grouped into broad categories that are broken into specific dimensions of wealth outputs or inputs, which are reflected in several specific measures. While such multidimensional measures lend themselves to aggregation and weighted ranking, the FPIs are envisioned to primarily support analysis linking wealth creation with specific inputs. Therefore, measure scores are to be provided on each key dimension and weighted equally to come up with component and overall scores. The resulting ranking will highlight particularly strong and weak performing fisheries and draw attention to commonalities and differences among their input scores. Individual users wishing to rank countries for other purposes, with different emphases on the components or key dimensions of components, can apply different weighting to each dimension. FISHERY PERFORMANCE INDICATORS: OUTPUTS (MEASURING WEALTH) We cannot measure wealth from fisheries completely or directly. While the market value of harvest can usually be identified, this is not a sufficient measure, as it does not capture the costs incurred to catch or process it; the distribution of those expenses across industry sectors in the community; the potential to generate additional wealth; or the ability to sustain those measures over time. Table 1 presents an overview of the 54 wealth output indicators, reflecting wealth accumulated, the wealth potential and the risk to wealth in three industry components: the resource and its exploitation (Ecologically Sustainable Fisheries), the harvest sector (Harvest Performance) and the processing and marketing sectors (Post-Harvest Performance). Wealth in each sector is broken into several key dimensions, each of which is a composite of two to six individual measures. In the event a specific measure is not available, not appropriate or poorly measured for a particular country or fishery, the other measures triangulate the level of the dimension. Key Measures of Wealth Generation While the grouping of indicators presented in Table 1 reflects the structure of the supply chain, the same set of indicators can also be categorized as direct measures of wealth generation and accumulation, measures of community acceptance, and measures that capture the extent to which potential wealth is being realized. Wealth accumulates within the harvest sector through vessel profits and the value of permits and other capital used to access the fishery. Vessel profits are paid in wages to harvesters, and are represented primarily in measures of Earnings Compared to National Average and Fishery Wages Compared to Non-Fishery Wages, which scale earnings by local standards for Owners, Permit Holders & Captains, and Crew. Wealth accumulation in capital, which 4

7 reflects the present discounted value of future profits, is represented by the Ratio of Asset Value to Gross Earnings and Asset Value to Historic High. Ex-Vessel Price versus Historic High and Total Revenue versus Historic High portray how well the fishery is achieving wealth generation, relative to historic benchmarks. Wealth also accumulates in the post-harvest sector, both to the owners of processing capital and the workers. Some economic gains from processing are paid in wages, captured primarily in measures of Earnings Compared to National Average and Worker Wages Compared to Non-Fishery Wages, which scale earnings by local standards for Processing Owners & Managers and Processing Workers. Regional Support Businesses reflects the levels of wealth accumulating to bait, gear, and marine shops in the region. Key Measures of Community Sustainability A fishery that is successfully generating wealth will be an important economic engine for its community. The community, in turn, will support the fishery and fishery stakeholders in sustaining the source of wealth through resources and effective management. Two groups of measures capture the extent to which the fishery contributes to its community. First, Social Standing of Owners, Permit Holders & Captains, Crew, Processing Owners & Managers, and Processing Workers captures the extent to which working in the fishery, and having fishery wealth, confers respect within the community. This reflects not only the relative level of income, but also the importance with which the community views the fishery as part of its economy or culture, and the extent to which participants have sufficient voice within the community to ensure resources and support for effective management that will sustain the fishery as a source of wealth. The Contestability & Legal Challenges indicator measures the effects of this support. Second, Proportion of Nonresident Employment of Owners, Permit Holders & Captains, Crew, and Processing Workers and Nonresident Ownership of Processing Capital capture the extent to which the wealth generated by the fishery goes into the community. If a substantial portion of the generated wealth does not stay in the community, the community may be less invested in the fishery and in providing the resources and processes necessary to ensure sustainable wealth generation. Key Measures of Wealth Potential A management system may not be realizing its maximum potential wealth for several reasons, and the FPIs include indicators to directly and indirectly capture these shortfalls. Management or harvesting practices could prevent landings levels from reaching their economic optimum. Landings Level captures this directly, and Percentage of Stocks Overfished and Non-Landings Mortality reflect whether there is or could be more volume available for landing. Excess Capacity reflects the extent to which harvesting costs are inefficiently high. A management system may also not be performing well in the post-harvest sector, which inhibits wealth creation. A direct measure of this shortfall is Wholesale Price Relative to Similar Products, which captures the extent to which other systems are yielding higher prices on wholesale markets. Final Market Wealth, International Trade, and Capacity to Export to the US & EU encapsulate how effectively the final product reaches markets that demand high quality, and pay higher prices for it. Yield of Processed Product represents how much more of landings could be sold, Product Improvement reflects how much value is created through 5

8 processing, and Capacity Utilization Rate reflects the extent to which processing capital costs are inefficiently high. The volatility measures reflect a risk-based impediment to achieving higher levels of wealth, and to the extent they can be controlled, the fishery may be able to increase wealth. FISHERY PERFORMANCE FACTORS: INPUTS (ENABLING WEALTH) Table 2 presents an overview of the 39 wealth input factors, which are thought to enable or support the creation of wealth in one or more of the industry components in which wealth outputs are tracked. Inputs fall into four input components: Macro Indicators, Property Rights and Responsibilities, Management Efficiency and Post-Harvest, each of which is broken into several key dimensions. Importantly, the structure of the FPIs does not presuppose whether, how or how much these inputs support wealth creation. The measures will be collected across a range of countries over a period of years, and the resulting data will be analyzed to determine the empirical causal or correlative relationships between these inputs and the different dimensions of wealth creation. Test Cases The Appendix contains three test cases: Alaska Salmon (five species), New England Groundfish (fifteen species), and Guyana Fisheries (more than twenty species). The cases provide valuable illustrations of the effectiveness of the indicators in characterizing wealthbased management systems for each fishery sector. Each case consists of a brief profile of the fishery s core characteristics followed by a summary of the Fishery Performance Indicators (measuring wealth) and the Fishery Performance Factors (wealth enabling inputs). The cases were chosen to demonstrate the potential value and versatility of the Indicators. All of the fisheries differ substantially in their management systems, market conditions, community characteristics, and infrastructure. The Fishery Performance Indicators show that Alaska Salmon fisheries are performing well in terms of fish stock health and the environment a necessary condition for sustainable wealth. However, the effectiveness/efficiency of harvest sector, harvest, and post-harvest assets are clearly underperforming and risk in the fishery is high. These conditions undermine the ability of the Alaska salmon fisheries to attain their wealth-generating potential. The Fishery Performance Indicators provide evidence that New England Groundfish fisheries are doing moderately well creating wealth in terms of market conditions, return for owners of the processing and distribution components, and the performance of the processing and support sector. However, in terms of fish stock health and environment and the effectiveness/efficiency of the harvesting sector, the performance is poor. The Fishery Performance Indicators clearly demonstrate that Guyana fisheries (based on primary data collected there in 1995) are not performing to an acceptable standard in the creation of wealth in any dimension. 6

9 Table 1. Fishery Performance Indicators Outputs (Measuring Wealth) The table below identifies 54 indicators of wealth creation. The full report provides a rationale, scoring rubric, and caveats for each measure. The last column in Table 1 classifies the dominant sustainability category the indicator is measuring: Ecological sustainability, economic sustainability, or community sustainability, all of which are necessary for sustainable wealth generation. COMPONENT DIMENSION MEASURE Ecologically Sustainable Fisheries Harvest Sector Performance Fish Stock Health & Environmental Performance Harvest Performance Asset Performance Risk Owners, Permit Holders & Captains Crew Proportion of Harvest with 3 rd Party Certification Fish Stock Sustainability Index (NMFS) Percentage of Stocks Overfished Non-landings Mortality Landings Level Excess Capacity Season Length Ratio of Asset Value to Gross Earnings Total Revenue versus Historic High Asset (Permit, Quota) Value versus Historic High Borrowing Rate Relative to Risk-free Rate Source of Capital Functionality of Harvest Capital Annual Total Revenue Volatility Annual Landings Volatility Intra-annual Landings Volatility Annual Price Volatility Intra-annual Price Volatility Spatial Price Volatility Contestability & Legal Challenges Earnings Compared to National Average Earnings Fishery Wages Compared to Non-fishery Wages Social Standing of Boat Owners and Permit Holders Proportion of Nonresident Employment Earnings Compared to National Average Earnings Fishery Wages Compared to Non-fishery Wages Social Standing of Crew Proportion of Nonresident Employment Crew Experience Age Structure of Harvesters DOMINANT SUSTAINABILTY CATEGORY Ecology Ecology Ecology Ecology Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Community Community Community Community Community Community Community Community Community Community Community 7

10 Table 1. Fishery Performance Indicators: Outputs (continued) Market Performance Processing & Support Industry Performance Ex-vessel Price versus Historic High Final Market Use International Trade Final Market Wealth Wholesale Price Relative to Similar Products Capacity of Firms to Export to the US & EU Ex-vessel to Wholesale Marketing Margins Yield of Processed Product Capacity Utilization Rate Product Improvement Regional Support Businesses Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Post Harvest Performance Time to Repair Borrowing Rate Relative to Risk-free Rate Economics Economics Asset Performance Processing Owners & Managers Processing Workers Source of Capital Age of Facilities Earnings Compared to National Average Earnings Manager Wages Compared to Non-fishery Wages Social Standing of Processing Managers Nonresident Ownership of Processing Capacity Earnings Compared to National Average Earnings Worker Wages Compared to Non-fishery Wages Social Standing of Processing Workers Proportion of Nonresident Employment Worker Experience Economics Economics Community Community Community Community Community Community Community Community Community 8

11 Table 2. Fishery Performance Indicators Inputs (Enabling Wealth Creation) Environmental Performance Index (EPI) Property Rights & Responsibility Management Post-harvest Macro Factors Access Harvest Collective Action Inputs Participation Markets & Market Institutions Infrastructure Governance Indicator Effectiveness Governance Indicator Voice & Accountability Index of Economic Freedom Gross Domestic Product (GDP) Per Capita Proportion of Harvest Managed Under Limited Access Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index Proportion of Harvest Managed with Rights-based Management Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index Participation in Harvester Organizations Harvester Organization Influence on Fishery Management & Access Harvester Organization Influence on Business & Marketing Management Expenditure to Value of Harvest Management Employees to Value of Harvest Management Employees per Permit Holder Research as a Proportion of Fisheries Management Budget Level of Subsidies Days in Stakeholder Meetings Industry Financial Support for Management Landings Pricing System Availability of Ex-vessel Price & Quantity Information Number of Buyers Degree of Vertical Integration Level of Tariffs Level of Non-tariff Barriers International Shipping Service Road Quality Index Technology Adoption Extension Service Reliability of Utilities/Electricity Access to Ice & Refrigeration 9

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13 I. INTRODUCTION OVERVIEW This report presents an innovative set of wealth-based Fishery Performance Indicators (FPIs) for evaluating and comparing the world s fisheries management systems. A wealth-based fishery management system is one that is ecologically sustainable, socially acceptable, and generates sustainable resource rents or profits. The FPIs fall into two categories. The first category is of indicators of outputs that identify and measure key factors that reflect success or failure in the creation of maximum potential wealth from fisheries. The second is of input factors, or enabling conditions, that contribute to the process of developing wealth-creating fisheries. The FPIs are designed not only as a tool for identifying countries that are underperforming in wealth generation, but also as a framework for pinpointing what policies and interventions are likely to have greatest impact, and for research that supports evidencebased policymaking. By analyzing relationships among the wealth creation and input measures, the FPIs dataset can be used to understand the causes, correlations and paths toward successful industry development that can arise from investment in, and changes to, fishery policy and practice. This will give stakeholders who are reliant on fisheries for their livelihood critical information to make a case for better fisheries management based on a broader set of criteria incorporating governance and economic factors, many of which are currently being ignored. MOTIVATION First and foremost, commercial fishing is a business. However, unlike traditional businesses, the fishery resources on which any wealth generation is based are typically "owned" by the state as part of the public trust. Therefore, more than with traditional private businesses, there is an imperative for the state to manage commercial fishery resources to yield a sustainable economic return and improve quality of life for its citizens. Despite this imperative, the wealth creation record for commercial fisheries around the world is abysmal. The January 3, 2009 feature article in The Economist sums it up, In most places fisheries policies have failed completely. (p. 13) The article traces these failures to management systems, concluding, All in all, the politicians charged with safeguarding the fisheries seem to be failing. In many cases, these failures are rooted in issues of overfishing, which have become the focus of high-profile efforts to improve fisheries outcomes, including scathing reports by governments, international organizations and NGOs aimed at better managing fish stocks. Although biological sustainability is a necessary condition for sustainable income and wealth, it is not sufficient. Therefore, for these organizations to achieve their goals of developing sustainable human communities that use fishery resources as pathways to economic development, additional factors must be considered. Globally, fishery management's record of creating sustainable wealth is even worse than its record of protecting sustainable harvests: economically sustainable fisheries must be biologically sustainable, but of the biologically sustainable fisheries, many are not creating sustainable economic benefits for their communities and stakeholders. A good example is the MSC-certified Alaska salmon fishery. Although it meets MSC certification standards, the fishery has struggled to be economically viable for decades. As Gunnar Knapp points out, 11

14 Under the current management system, market forces can t and won t allow the Alaska salmon industry to achieve anything close to its full economic potential. The state mandates the use of inefficient boats and gear, keeping costs far higher and quality far lower than would be possible. The current management system forces fishermen to race for fish, further adding to costs and lowering quality. The current management system discourages investment in processing and marketing (Knapp, 2002) While there is a sustainable supply of valuable product, management inhibits the industry's development and the creation of wealth. This situation is common in fisheries around the world, as The Sunken Billions: The Economic Justification for Fisheries Reform estimates the annual worldwide economic loss to fisheries mismanagement to be around $US 50 billion (The World Bank, 2008). For fisheries to provide a strong economic foundation for the communities that depend on them, or to serve as catalysts for regional economic development, fisheries stakeholders, managers, researchers, NGOs and aid agencies must also be attentive to economic outcomes. One obstacle to integrating measures of outcomes, such as wealth, is that they are often difficult to define or measure, and most fisheries management agencies, international organizations and many environmental organizations have expended considerable effort to clarify and promote their perspectives. However, without a clear, common definition of social or economic sustainability, management falls back on notionally simpler biological definitions of stock sustainability. VISION Rather than imposing a single notion of economic sustainability and wealth creation, the FPIs provide a broad range of measures, organized into a framework that provides components, and key dimensions within each component, of wealth creation and accumulation (outputs) and of factors that may enable wealth creation (inputs). This framework is envisioned primarily to support analysis linking wealth creation with specific inputs. Therefore, measure scores are to be provided on each key dimension and weighted equally to produce component and overall scores. The resulting ranking will highlight particularly strong and weak-performing fisheries, and draw attention to commonalities and differences among their input scores. Individual users with different priorities, notions of wealth or emphases on the dimensions of wealth, can apply different weighting to each dimension. At maturity, the FPIs will be a panel of indicator and factor scores for over 100 countries and large fisheries, collected at regular intervals to monitor wealth creation within and across management systems. It is also envisioned that these indicators will be adapted to be applied to codependent fishery-aquaculture and aquaculture management systems. The individual measures are coded in levels (1 to 5), and are designed to be easy to collect and score across a wide range of fisheries. They rely on a basic set of data that should be available in all significant fisheries (e.g., volumes and prices) and expert assessment of qualitative indicator levels; it requires no primary data collection. Inputs and outputs are each grouped into broad 12

15 categories that are broken into specific dimensions of wealth outputs or inputs, which are reflected in several specific measures. Because the FPIs project is designed to advise a range of audiences on developing effective management, it must focus on analyses that capture a wide range of management systems of economics importance in the next phase of development. The unit of analysis is intended to be the management system, which will often encompass many individual fisheries and sometimes be as large as a country's entire fishing industry. Key factors to consider in assessing the unit of analysis in a particular case is whether the management body is the same; whether the methods used in management are comparable; whether the fisheries are importantly heterogeneous on the FPIs; whether the fisheries together are economically or socially important on a regional scale; whether the fisheries are prosecuted by the same fleet; and whether the fisheries face similar opportunities for, and barriers to, generating wealth. BENEFITS The FPIs framework is designed not only as a tool for identifying countries that are underperforming in wealth generation, but also as a framework for pinpointing what policies and interventions are likely to have greatest impact, and for research that supports evidencebased policymaking. With this information, a range of fishery-concerned audiences who in furthering their individual goals will enhance the development of fishery-based wealth globally. International Aid Agencies The FPIs will assist aid agencies in identifying countries whose fisheries are not meeting their potential as a platform for supporting local economic development and the accumulation of wealth that improves standards of living and quality of life. Within those countries, it will help identify specific dimensions where improvement is needed, and whether monetary investment, human capital investment or institutional development is going to have greatest impact. In addition, over the course of a project, the FPIs are an accountability tool with which progress within a country can be tracked, and also compared to contemporaneous progress in other countries that did not receive the investment, or received different interventions. Fishing Industry Stakeholders and Communities Fishing harvesters and processors can use the FPIs to compare their performance ranking with similar fisheries around the world, to identify specific sources of foregone wealth in their own fisheries, and to establish predicates for improvement. It will catalyze improvement by providing data that allows stakeholders to separate anecdote from strong causal relationships, and galvanize consensus around the actions or types of action that are most likely to enhance wealth generation. Fisheries Management Agencies Like resource stakeholders, fishery managers can use the FPIs to benchmark their performance against similar fisheries and identify areas and methods for improvement. Within their agencies, local managers can argue for resources to support changes that data suggests will be effective and offer FPI improvements as metrics and accountability measures. 13

16 International Seafood Suppliers and Retailers Suppliers and retailers who engage in international seafood trade can draw on the FPIs to identify regions where not just ecology and management, but also the local industry are sustainable, assuring a supply stream that is reliable, high-quality and justifiable to consumers. The summaries of the FPIs will highlight well-performing regions and also generate demandside pressure on low-performing fisheries to improve, so as to minimize the threat of adverse publicity that may discourage multinationals from doing business. Investors and Bankers The FPIs provides a framework that investors and bankers can use to identify fisheries where there is a high potential for return and where the risk associated with improper management or dysfunctional communities is low. By analyzing individual dimensions or measures, they can identify opportunities to make a key investment that will catalyze growth and generate wealth for the community and for themselves, without government or aid agency intervention. Non-governmental Organizations Like stakeholders and managers, NGOs concerned with fisheries can draw upon the FPIs to identify regions in need of attention, and to single out the types of intervention most likely to achieve the desired outcomes. The FPIs could be integrated directly into their rankings schemes, and could provide data for their stakeholder outreach and political action materials and enhance the knowledge base of their supporting constituencies. Further, the FPIs could serve as a framework for monitoring resource-based wealth, and non-fishery NGOs could adapt it to similar purposes, leading to a spillover of outcome improvements into other resources. Academics and Researchers The FPIs will provide a rich panel of data that can be used to test hypotheses about the relationships among inputs and the different dimensions of wealth. By establishing a common baseline dataset on global communities, management and success, it will enhance researchers' understanding of fisheries around the world and support development of nuanced, empirically based models relating institutions and practices to outcomes. These models will incorporate measure interactions and intervention sequencing, supporting generalizable conclusions about causes of success and paths of industry development that support wealth generation. The FPIs framework can also be supplemented with other data for meta-analysis or deeper study. Historical data on FPI measures may be available in many regions, which may quickly yield an improved cross-sectional understanding of why particular management interventions have been effective. Supplemental data can also be collected within the FPIs framework for specific fisheries, instead of by region or country, to monitor smaller-scale changes in the industry. Additional indicators of sociological or ecological variables, perhaps requiring more thorough data collection, could also be merged for a subset of countries, allowing testing of additionally subtle hypotheses. COMPLEMENTING SUSTAINABILITY CERTIFICATION The FPIs are designed to complement many of the fishery-specific, science-intensive thirdparty certification programs spawned by concerns over biologically and socially sustainable fishing. For example, one of the leading programs to encourage and define sustainable fishing 14

17 is the Marine Stewardship Council (MSC) certification. This program is based on three principles: Principle 1: Sustainable fish stocks Fishing activity must be at a level which is sustainable for the fish population. Any certified fishery must operate so that fishing can continue indefinitely and is not overexploiting the resources. Principle 2: Minimizing environmental impact Fishing operations should be managed to maintain the structure, productivity, function and diversity of the ecosystem on which the fishery depends. Principle 3: Effective management The fishery must meet all local, national and international laws and must have a management system in place to respond to changing circumstances and maintain sustainability (Marine Stewardship Council, 2009). Currently, the MSC has certified over 40 individual fisheries; virtually all are in developed countries. Although this program and others are a positive force for change, two shortcomings have become apparent: 1) the emphasis is on biological and ecosystem indicators and regulatory compliance that does not address the essential issue of managing fisheries to create sustainable income and wealth, and 2) given the substantial cost of the certification process, the MSC certification program and others like it are inherently biased toward fisheries in rich nations. The FPIs address both of these shortcomings. First, while the FPIs incorporate biological measures, such as the sustainability of fisheries as certified by organizations such as the MSC, they also incorporate a broad range of additional economic and social measures that reflect wealth accumulation and community sustainability, and factors that enable wealth creation. Second, as a relatively low cost-per-evaluation, centrally funded data gathering, organization and analysis effort, FPI data will be collected for developed and developing countries alike. This will provide stakeholders, managers, international aid agencies and NGOs with benchmarking and process data for countries that cannot afford extensive studies of individual fisheries. Those countries can then benefit from, and contribute to, the FPIs knowledge base and the processes that are identified as leading to wealth creation. While the FPIs expand upon the sustainability certifications, they are not intended to supplant them. The FPIs assess management bodies and systems at a high level, not individual fisheries; in many cases, thorough review by certification agencies is still the best way to help and encourage individual fisheries to improve their resource management, or at least aspects of it. Eco-labels reflecting certification of individual fisheries will also provide environmentally sensitive consumers and retailers with a level of information about specific products not available in the FPIs. In contrast, the FPIs allow stakeholders and managers, and those who support them, to identify changes to policies and practices that affect the fisheries under their control. This is akin to graduates of university engineering, law and medical programs taking individual board or certification exams so employers know they are individually qualified, while whole universities are ranked and accredited to allow administrators to track overall performance and align with best practices. The board 15

18 certification rates of graduates are critical inputs to the accreditation process, and both measures thrive with different audiences. FISHERY PERFORMANCE INDICATORS: OUTPUTS (MEASURING WEALTH) We cannot measure wealth from fisheries completely or directly. While the market value of harvest can usually be identified, this is not a sufficient measure, as it does not capture the costs incurred to catch or process it; the distribution of those expenses across industry sectors in the community; the potential to generate additional wealth; or the ability to sustain those measures over time. Table 1 presents an overview of the 54 wealth output indicators. An essential feature for inclusion is that the indicators must be relevant; relatively easy to estimate, either quantitatively or qualitatively; and they must be comparable across regions and systems. For each indicator the rationale, proposed measure (scoring), caveats, alternative measures, expected availability and the degree of monotonicity are explained in the following section. Output indicators reflect wealth accumulated, wealth potential, and the risk to wealth in three industry components: the resource and its exploitation (Ecologically Sustainable Fisheries), the harvest sector (Harvest Sector Performance) and the processing and marketing sectors (Post-harvest Performance). Wealth in each component is broken into several key dimensions, each of which is a composite of two to six individual measures. In the event a specific measure is not available, not appropriate or poorly measured for a particular country or fishery, the other measures triangulate the level of the dimension. The Ecologically Sustainable Fisheries component is composed of Fish Stock Health & Environmental Sustainability indicators. This dimension captures the sustainable wealth associated with the stock in the water: is there a thriving resource that is, or has the potential to, serve as a basis for wealth creation, or is it badly depleted? The second captures how allowable mortality is used in the fishery. Is much of the fish landed and sold, or is it lost to overfishing, regulatory discard, or bad handling? The Harvest dimension also captures the efficiency of the harvesting industry and thus the ability to generate wealth from the landings. The Harvest Sector Performance component primarily captures where wealth is accumulating in the fishery and is composed of five dimensions. The Harvest Performance dimension captures essential aspects of efficiency in harvesting and thus the ability to generate wealth from the landings. The Asset Performance dimension tracks how well harvest capital owners are able to invest in the fishery and how much future wealth is capitalized into the value of their rights and equipment. The Risk dimension reflects sources of risk in the fisheries that may inhibit investment or prevent the development of high-value supply chains. The Owners, Permit Holders & Captains and Crew dimensions capture the wealth that goes to each group as income and the extent to which it supports the fishing communities. Since income data is not directly available in many fisheries, the measures are proxies of relative wages, social standing and whether the industry is able to attract a reliable, skilled worker base at each level. The Post-harvest Performance component measures whether the harvested product is processed and brought to market in a way that creates wealth. The Market Performance dimension captures the effects of handling and processing on the price received for the 16

19 product. The Processing & Support Industry Performance dimension captures processing efficiency and the extent to which the value of the product is being maximized. The remaining dimensions reflect wealth accumulation in the processing sector. The Asset Performance dimension captures the wealth accumulating to processing capital owners and the extent to which they can and do reinvest in the industry. The Processing Owners & Managers and Processing Workers dimensions capture the wealth that goes to each group as income and the extent to which it supports the fishing communities. Since income data is not directly available in many fisheries, the measures are proxies of relative wages, social standing and whether the industry is able to attract a reliable, skilled worker base at each level. Key Measures of Wealth Generation While the grouping of indicators presented in Table 1 reflects the structure of the supply chain, the same set of indicators can also be categorized as direct measures of wealth generation and accumulation, measures that give wealth importance in the community, and measures that capture the extent to which potential wealth is being realized. It is generally not possible to precisely measure wealth directly. By identifying basic (but imperfect) measures of wealth at different points in the supply chain, the FPIs provide an overall sense of whether the fisheries being evaluated are generating high or low levels of wealth. Wealth accumulates within the harvest sector through vessel profits and the value of permits and other capital used to access the fishery. Vessel profits are paid in wages to harvesters, and are represented primarily in measures of Earnings Compared to National Average and Fishery Wages Compared to Non-Fishery Wages, which scale earnings by local standards for Owners, Permit Holders & Captains, and Crew. Wealth accumulation in capital, which reflects the present discounted value of future profits, is represented by the Ratio of Asset Value to Gross Earnings and Asset Value to Historic High. Ex-Vessel Price versus Historic High and Total Revenue versus Historic High portray how well the fishery is achieving wealth generation relative to historic benchmarks. Wealth also accumulates in the post-harvest sector, both to the owners of processing capital and the workers. Some economic gains from processing are paid in wages, captured primarily in measures of Earnings Compared to National Average and Worker Wages Compared to Non-Fishery Wages, which scale earnings by local standards for Processing Owners & Managers and Processing Workers. Regional Support Businesses reflects the levels of wealth accumulating to bait, gear, and marine shops in the region. Key Measures of Community Sustainability A fishery that is successfully generating wealth will be an important economic engine for its community. The community, in turn, will support the fishery and fishery stakeholders in sustaining the source of wealth through resources and effective management. Two groups of measures capture the extent to which the fishery contributes to its community. First, Social Standing of Owners, Permit Holders & Captains, Crew, Processing Owners & Managers, and Processing Workers captures the extent to which working in the fishery, and having fishery wealth, confers respect within the community. This reflects not only the relative level of income, but also the importance with which the community views the fishery as part of its economy or culture, and the extent to which participants have sufficient voice within the community to ensure resources and support for effective management that will sustain the 17

20 fishery as a source of wealth. The Contestability & Legal Challenges indicator measures the effects of this support. Second, Proportion of Nonresident Employment of Owners, Permit Holders & Captains, Crew, and Processing Workers and Nonresident Ownership of Processing Capital capture the extent to which the wealth generated by the fishery goes into the community. If a substantial portion of the wealth that is generated does not stay in the community, the community may be less invested in the fishery, and in providing the resources and processes necessary to ensure sustainable wealth generation. Important for application to fisheries in transition, these measures are to be applied to people who self-identify as being in the described groups. Thus, if a management change causes a reduction in crew jobs, then employed crew may experience an increase in wealth and status, while unemployed crew experiences a decrease. As long as the unemployed crew continues to identify as crew, they would be included in the crew-related indicators, so there may be little change in overall status or wealth as a result from a management change that made some better off and others worse off. Only as the unemployed shift to other occupations and identify as in those occupations rather than as crew would the wealth and status measures for crew increase. Key Measures of Wealth Potential A management system may not be realizing its maximum potential wealth for several reasons, and the FPIs include indicators to directly and indirectly capture these shortfalls. Management or harvesting practices could prevent landings levels from reaching their economic optimum. Landings Level captures this directly, and Percentage of Stocks Overfished and Non-Landings Mortality reflect whether there is or could be more volume available for landing. Excess Capacity reflects the extent to which harvesting costs are inefficiently high. A management system may also not being performing well in the post-harvest sector, which inhibits wealth creation. A direct measure of this shortfall is Wholesale Price Relative to Similar Products, which captures the extent to which other systems are yielding higher prices on wholesale markets. Final Market Wealth, International Trade, and Capacity to Export to the US & EU encapsulate how effectively the final product reaches markets that demand high quality and pay higher prices for it. Yield of Processed Product represents how much more of the landings could be sold, Product Improvement reflects how much value is created through processing, and Capacity Utilization Rate reflects the extent to which processing capital costs are inefficiently high. The volatility measures reflect a risk-based impediment to achieving higher levels of wealth, and to the extent they can be controlled, the fishery may be able to increase wealth. FISHERY PERFORMANCE FACTORS: INPUTS ENABLING WEALTH CREATION Table 2 presents an overview of the 39 wealth input factors, which are thought to enable or support the creation of wealth in one or more of the industry components in which wealth outputs are tracked. Importantly, the structure of the FPIs does not presuppose whether, how or how much these inputs support wealth creation. The measures will be collected across a range of countries over a period of years, and the resulting data will be analyzed to determine 18

21 the empirical causal or correlative relationships between these inputs and the different dimensions of wealth creation. The Macro Factors component of wealth-enabling inputs reflects the institutional state of the country or region being evaluated. Environmental rankings capture the state of resources available. Political and social indicators measure labor freedom; freedom from corruption; economic and social autonomy; voice and accountability; and government inclusiveness and stability. These indicators reflect how much control individual citizens can exercise over social distributional decisions and resource management, and thus can influence allocations to create more wealth, and can interact freely in the market to develop wealth-generating products. The Property Rights & Responsibilities component reflects how much and what type of control individuals can exercise over the resource and how much opportunity they have to establish and protect wealth-generating policies regarding resource use. Many economists believe such rights to be critical to creating economically sustainable fisheries. The Access dimension captures the nature and strength of the resource users' rights to exclude others from using the resource. The Harvest dimension captures the nature and strength of the resource users' rights to harvest in a way they choose to maximize the wealth created. The Collective Action dimension reflects the extent to which resource users act as a group to manage the resource and support wealth-creating practices in place of rent dissipating ones. The Management component considers how well the management system works to gather information, both from science and stakeholders, and integrate it into policymaking. The Inputs dimension reflects the amount of fishery wealth that is expended simply managing the fishery. Many ecologists would consider greater management expenditure on research would improve the understanding of fish stocks and lead to better management and larger sustainable harvests, if not wealth. The Participation dimension measures the extent to which stakeholder views are taken into account in management or the amount of time stakeholders must spend influencing management. Many social scientists consider stakeholder participation critical to achieving management outcomes that reflect the knowledge and goals of stakeholders and their communities. The Post-harvest component considers the extent to which a region has the economic and physical infrastructure available to enable wealth creation. The Markets & Market Institutions dimension captures the opportunities to generate wealth through sales of the fishery products, through competitive ex-vessel pricing and through barriers to international high-value markets. Some consider access to high-value buyers through freely flowing competitive markets critical to receiving the best prices, but others consider access to these markets to be an avenue to exploitation. The Infrastructure dimension captures the state of the science and technology that may enable improvements in product quality or product development or allow access to higher value buyers. 19

22 Test Cases The Appendix contains three test cases: Alaska Salmon (five species), New England Groundfish (fifteen species), and Guyana Fisheries (more than twenty species). The cases provide valuable illustrations of the effectiveness of the indicators in characterizing wealthbased management systems for each fishery sector. Each case consists of a brief profile of the fishery s core characteristics followed by a summary of the Fishery Performance Indicators (measuring wealth) and the Fishery Performance Factors (wealth enabling inputs). The cases were chosen to demonstrate the potential value and versatility of the Indicators. All of the fisheries differ substantially in their management systems, market conditions, community characteristics, and infrastructure. The Fishery Performance Indicators show that Alaska Salmon fisheries are performing well in terms of fish stock health and the environment a necessary condition for sustainable wealth. However, the effectiveness/efficiency of harvest sector, harvest, and post-harvest assets are clearly underperforming and risk in the fishery is high. These conditions undermine the ability of the Alaska salmon fisheries to attain their wealth-generating potential. The Fishery Performance Indicators provide evidence that New England Groundfish fisheries are doing moderately well creating wealth in terms of market conditions, return for owners of the processing and distribution components, and the performance of the processing and support sector. However, in terms of fish stock health and environment and the effectiveness/efficiency of the harvesting sector, the performance is poor. The Fishery Performance Indicators clearly demonstrate that Guyana fisheries (based on primary data collected there in 1995) are not performing to an acceptable standard in the creation of wealth in any dimension. 20

23 II. FISHERY PERFORMANCE INDICATORS Outputs (Measuring Wealth) 21

24 II. FISHERY PERFORMANCE INDICATORS Outputs (Measuring Wealth) This section identifies 54 indicators of wealth creation (see Table 1). Each indicator (found in the third column in Table 1) is individually explained in the following pages. The last column in Table 1 classifies the dominant sustainability category the indicator is measuring: Ecological sustainability, economic sustainability, or community sustainability, all of which are necessary for sustainable wealth generation. Table 1. Fishery Performance Indicators Outputs (Measuring Wealth) COMPONENT DIMENSION MEASURE Ecologically Sustainable Fisheries Harvest Sector Performance Fish Stock Health & Environmental Performance Harvest Performance Asset Performance Risk Owners, Permit Holders & Captains Crew Proportion of Harvest with 3 rd Party Certification Fish Stock Sustainability Index (NMFS) Percentage of Stocks Overfished Non-landings Mortality Landings Level Excess Capacity Season Length Ratio of Asset Value to Gross Earnings Total Revenue versus Historic High Asset (Permit, Quota) Value versus Historic High Borrowing Rate Relative to Risk-free Rate Source of Capital Functionality of Harvest Capital Annual Total Revenue Volatility Annual Landings Volatility Intra-annual Landings Volatility Annual Price Volatility Intra-annual Price Volatility Spatial Price Volatility Contestability & Legal Challenges Earnings Compared to National Average Earnings Fishery Wages Compared to Non-fishery Wages Social Standing of Boat Owners and Permit Holders Proportion of Nonresident Employment Earnings Compared to National Average Earnings Fishery Wages Compared to Non-fishery Wages Social Standing of Crew Proportion of Nonresident Employment Crew Experience Age Structure of Harvesters DOMINANT SUSTAINABILTY CATEGORY Ecology Ecology Ecology Ecology Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Community Community Community Community Community Community Community Community Community Community Community 22

25 Table 1. Fishery Performance Indicators: Outputs (Measuring Wealth) (continued) Market Performance Processing & Support Industry Performance Ex-vessel Price versus Historic High Final Market Use International Trade Final Market Wealth Wholesale Price Relative to Similar Products Capacity of Firms to Export to the US & EU Ex-vessel to Wholesale Marketing Margins Yield of Processed Product Capacity Utilization Rate Product Improvement Regional Support Businesses Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Economics Post Harvest Performance Time to Repair Borrowing Rate Relative to Risk-free Rate Economics Economics Asset Performance Processing Owners & Managers Processing Workers Source of Capital Age of Facilities Earnings Compared to National Average Earnings Manager Wages Compared to Non-fishery Wages Social Standing of Processing Managers Nonresident Ownership of Processing Capacity Earnings Compared to National Average Earnings Worker Wages Compared to Non-fishery Wages Social Standing of Processing Workers Proportion of Nonresident Employment Worker Experience Economics Economics Community Community Community Community Community Community Community Community Community 23

26 ECOLOGICALLY SUSTAINABLE FISHERIES FISH STOCK HEALTH & ENVIRONMENTAL PERFORMANCE Proportion of Harvest with a Third Party Certification Fish stocks must be sustainable to generate sustainable returns and create wealth. Certification also may be essential for market access in developed countries. The proportion of harvest (quantity) harvested under one of the recognized third party programs that certify ecological sustainability, such as the Marine Stewardship Council (MSC) certification. Individual stocks are weighted by their proportion of landings value: % of landings are certified % % % 1 No landings have third party certification The third party programs are subject to change. There are new entrants and they may be biased toward rich nations due the cost of implementation. Data Available Yes Yes Yes 24

27 ECOLOGICALLY SUSTAINABLE FISHERIES FISH STOCK HEALTH & ENVIRONMENTAL PERFORMANCE Fish Stock Sustainability Index Fish stocks must be sustainable to generate sustainable returns and create wealth. The Fish Stock Sustainability Index. The FSSI is calculated by assigning a total score between 0 and 4 to each priority fish stock. Note: The number of priority stocks will differ between management systems (The Fish Stock Sustainability Index, 2009). For each of four components, each stock receives: 1) one point if the status of the stock is overfished or subject to overfishing; 2) two points if management measures are succeeding at preventing overfishing; 3) three points if the stock biomass is above the level defined as overfished for the stock; and 4) four points if the stock is rebuilt or is at its "optimal" level, within 80% of that required to achieve maximum sustainable yield. The FSSI is computed by summing the scores of the individual stocks. Points by quintile relative to the maximum possible score; with 5 points for highest quintile. The measures of overfishing and optimal level may not be available. Data Available Yes Possibly No 25

28 ECOLOGICALLY SUSTAINABLE FISHERIES FISH STOCK HEALTH & ENVIRONMENTAL PERFORMANCE Percentage of Stocks Overfished The percentage of stocks considered to be overfished reflects the extent to which overfishing has compromised the ability to generate wealth. Overfished stocks cannot be harvested at a level that maximizes wealth until they are recovered. Percentage of commercial stocks within the management authority s purview that are considered overfished, to be experiencing overfishing, or in generally unknown stock status (whether actively managed or not): 5 None overfished % of stocks overfished % overfished % overfished % overfished Unknown fisheries should be conservatively categorized. Data Available Yes Yes Some 26

29 ECOLOGICALLY SUSTAINABLE FISHERIES FISH STOCK HEALTH & ENVIRONMENTAL PERFORMANCE Non-landings Mortality Non-landings mortality is a direct measure of waste and potentially foregone wealth. This represents fish that possibly could have been sold, but were not. Ratio of estimated mortality of the assessed target species from illegal harvest, bycatch, illegal discards, regulatory (legal) discards and other non-landings waste to actual landings. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 Virtually none 4 Less than 5% % % 1 More than 20% May not exist for unregulated fisheries. How should recreational fisheries pursuing commercial stocks be considered? Data Available Yes Maybe Maybe 27

30 HARVEST SECTOR PERFORMANCE HARVEST PERFORMANCE Landings Level Harvests at the level of maximum economic yield (MEY) reflect management and/or harvest policies that reflect economic goals. This is primarily a measure of the extent to which the fishery is realizing its potential wealth over time, ensuring the future reproductive value remains in the water. Average annual harvest over the last three years. Note: in practice there are very few estimates of MEY, however where it has been calculated it is typically 5-10 percent less than maximum sustainable yield (MSY). Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 Harvest is less than MSY (stock is above MSY level) to increase profit 4 Harvest is approximately at MSY 3 Harvest reduced to promote recovery (stock is below MEY level) 2 Harvest is constraining stock recovery (stock is stable below MEY level) 1 Harvest is causing overfishing (stock is below MEY and declining) This measure does not take into account the harvest timing, which is also required to maximize value from the fishery. This measure emphasizes harvest, rather than mortality. For purposes of economic yield, harvest is appropriate as long as total mortality does not exceed MSY. Other measures capture the effects of mortality that are not associated with landing, or whether low scores on this measure are due to excessive fishing or an inadequate fishery development. Data Available Yes Some Some 28

31 HARVEST SECTOR PERFORMANCE HARVEST PERFORMANCE Excess Capacity Excess capacity in the fishing fleet reflects management that has either allowed the stock to decline so that a once-efficient harvesting operation scale is now too large, or that has induced a derby wherein harvesters have had to purchase inefficiently large vessels, or both. These inefficiently large vessels are more expensive to operate and maintain than necessary, reducing wealth in the harvesting sector. Estimated standardized vessels-days required to catch the maximum economic yield (MEY) compared to the number of standardized vessel-days available. Days are considered not to be restricted by trip limits. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 Within 5% of days required or 90-95% % or 75-90% % or 50-75% 1 More than 200%, or less than 50%, of days required Accurate measures of capacity are difficult to come by. Technical efficiency measures produce incredibly high estimates of capacity (given any observed behavior); they are also data and time intensive to develop. Further, many fisheries are managed by trip limits, which makes days of utilization (like is proposed for processing plants) a less accurate measure. Data Available Yes Maybe Maybe 29

32 HARVEST SECTOR PERFORMANCE HARVEST PERFORMANCE Season Length The length of the season reflects the extent to which management allows harvesters to determine when to harvest and how much. Choosing how and when to harvest allows harvesters to land when the prices are highest, or to spread the harvest over a long period of time to stabilize ex-vessel prices at high levels, and allow processors to time product flow to implement efficient methods. Ratio of number of days on which fishing occurs to the number of days the species is available in economically feasible quantities: 5 Virtually no regulatory closures % % % 1 Less than 10% When harvesters pursue multiple fisheries throughout the year, there may be periods when none of a species is landed, although available, because it is economically optimal to land another species during that time. In many cases, daily trip limits lengthen seasons by enforcing inefficiently small trips, so longer seasons may not be associated with improved wealth generation. Thus, this is related to a measure of capacity utilization. Data Available Yes Yes Yes Monotonic Maybe Maybe Maybe 30

33 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Ratio of Asset Value to Gross Earnings In addition to income, fishery wealth can also accumulate to the harvesters through the value of the assets that allow access and participation in the fishery. The price of the privilege or right to access a fishery in the form of a vessel, license, lease or quota, is a direct measure of the accumulation of wealth from the fishery to the harvest sector. The price of access should reflect the present discounted value of the stream of profits arising from accessing the fishery. This will include expectations for changes in management, harvest levels, prices and harvesting costs. Gross earnings is used to normalize the asset value to the levels of the fishery. Gross earnings are a proxy for net earnings because cost data is rarely available, and this normalization is standard in agricultural frameworks. For a fixed level of gross earnings, if the fishery's income is highly uncertain, or costs are excessive, then the ratio will be lower. Ratio of average price of access to the fishery over the last five years to the average annual landings value for a similarly scaled access right in the same period. Same business or same family sales are excluded, where they can be identified. The highest bin boundary was established by calculating the rate of return for large-scale farming operations in the United States, reflecting a stable industry where key inputs are controlled by the business owner: 5 10 or higher or below This measure reflects accumulation only in the harvesting sector. Access prices will be low if wealth accumulates in the processing sector. Data Available Yes Maybe No 31

34 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Total Revenue versus Historic High If the fishery is generating wealth, it is expected that the total revenue for the fishery is likely to increase to some sustainable maximum range. Fisheries with declining total revenue are likely to be in decline as a result of overfishing, poor marketing, and distribution. In contrast, a fishery managed for wealth creation should be harvested sustainably, and the sector is likely to orient toward market access and innovation. This should be observable in stable or increasing total revenue. The indicator is the ratio of total revenue to the average of the three highest total revenues in the past 10 years. 5 Above 95 percent 4 85 to 95 percent 3 70 to 85 percent 2 50 to 70 percent 1 Below 50 percent Using total revenue does not account for cost. Data Available Yes Yes Maybe Monotonic Not necessarily Not necessarily Not necessarily 32

35 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Asset (Permit, Quota, etc.) Value versus Historic High If the fishery is generating wealth, it is expected that the value of the permit, quota, or other right to the fishery is likely to increase to some sustainable maximum range. Fisheries with declining assets are likely to be in decline as a result of overfishing, poor marketing, distribution, or other constraints to innovation. In contrast, a fishery managed for wealth creation should be harvested sustainably; the sector is likely to orient toward improved marketing and innovation. The indicator is the ratio of asset to the average of the three highest asset values in the past 10 years. 5 Above 95 percent 4 85 to 95 percent 3 70 to 85 percent 2 50 to 70 percent 1 Below 50 percent Data Available Yes/Maybe Maybe No 33

36 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Borrowing Rate Relative to Risk-Free Rate The size of the premium the capital market demands to make loans in the fishery is a direct measure of financial risk in the industry. It is locally normalized to reflect the overall riskiness in the region and the opportunities available to local capital. Average ratio between the interest rate on loans made in the industry to risk-free rates over the last three years. Bin boundaries are based on the ratio of consumer loan rates for different types of rates to the regional 10-year risk-free rate (3.60% for US T-bill; example ratios below): 5 Less than 1.75; cf. 30-year conforming mortgage 4 Less than 2.5; cf. personal bank loan 3 Less than 4; cf. good credit card rates 2 Less than 7; cf. bad credit card rates 1 Greater than 7; usury In some fisheries, loans are secured by personal collateral (e.g., home loans) rather than business collateral. A harvester s willingness to collateralize his business with personal property should still reflect some measure of risk, but the necessity of doing so reveals that the capital market views the industry as riskier than the observed rate reflects. Are US treasury rates the correct measure of the risk-free rate for most or all countries? How should this measure be integrated with other measures in fisheries where there is no capital available? Difference rather than ratio. Data Available Yes Maybe Maybe 34

37 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Source of Capital Whether lending capital from a particular source is even available is a direct measure of how the capital market assesses risk in the fishery. If a certain type of lender or investor is not willing to make capital available in the fishery at any price, it reveals the fishery is much riskier than other available investments. This measure is less refined than the relative rate, but much easier to obtain. Points to be assigned based on the category of lenders or investors that is most typically used in the fishery. Points assigned as follows: 5 Unsecured business loans from banks Venture capital 4 Secured business loans from banks Public stock offering 3 Loans from banks secured by personal (not business) assets Government subsidized private lending Government-run loan programs International aid agencies 2 Microlending Family/community-based lending 1 Mafia No capital available See Borrowing Rate. Data Available Yes Yes Yes 35

38 HARVEST SECTOR PERFORMANCE ASSET PERFORMANCE Functionality of Harvest Capital The functionality of the vessels and other capital used in harvesting (e.g., weirs, traps, docks/marinas, and ice production) reflects wealth in several ways. First, it is a direct measure of wealth that has been accumulated from the fishery and reinvested in capital. Second, it is a measure of the potential wealth in the fishery, as newer facilities will be more efficient and less costly to operate. Third, if harvesters are willing to invest in new capital, it reflects their assessment that the fishery will be profitable into the future. Finally, if new facilities are funded by private loans, newer facilities reflect the capital markets assessment that the fishery is sufficiently low risk to warrant investment. Average age of the key durable harvesting capital unit (vessels, weirs): 5 Capital is new 4 Capital is older but well maintained, e.g., freshly painted 3 Capital is moderately well maintained 2 Maintenance is poor 1 Serious concerns about seaworthiness or safety throughout fishery In a fishing derby, investment in new facilities may reflect overcapitalization. Data Available Yes Yes Yes 36

39 HARVEST SECTOR PERFORMANCE RISK Annual Total Revenue Volatility Annual total revenue volatility is primarily a measure of the riskiness of the fishery. When future harvests are variable, it is difficult to make investment decisions and secure capital because future income streams are highly uncertain. High landings volatility also presents an obstacle to developing final product markets in nonspecialty fisheries, as large processors and exporters prefer to deal with products for which they can develop long-term contracts. Ratio of the standard deviation of the first differences of annual total revenue to the mean total revenue over the last 10 years. Bin boundaries should be established by quintile once data are collected on many fisheries. Pilot study boundaries were established by calculating the score for each country-fish category (finfish, shellfish, and crustaceans only) in FishStat (FAO), then determining the quintile values: or less or greater First differencing partially accounts for trends. A simple standard deviation measure does not account for trends, which could be up or down. Data Available Yes Yes Maybe 5 This approach uses more highly aggregated fisheries than are likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. 37

40 HARVEST SECTOR PERFORMANCE RISK Annual Landings Volatility Annual landings volatility is primarily a measure of the riskiness of the fishery. When future harvests are variable, it is difficult to make investment decisions and secure capital because future income streams are highly uncertain. High landings volatility also presents an obstacle to developing final product markets in nonspecialty fisheries, as large processors and exporters prefer to deal with products for which they can develop long-term contracts. Ratio of the standard deviation of the first differences of annual total landings sold to the mean landings over the last 10 years. Bin boundaries should be established by quintile once data are collected on many fisheries. Pilot study boundaries were established by calculating the score for each country-fish category (finfish, shellfish and crustaceans only) in FishStat (FAO), then determining the quintile values: or less or greater First differencing partially accounts for trends. A simple standard deviation measure does not account for trends, which could be up or down. For instance, a recovering fishery with increasing harvests would have higher volatility, and thus receive fewer points, although opportunities and wealth were growing. Data Available Yes Yes Yes? 6 This approach uses more highly aggregated fisheries than are likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. 38

41 HARVEST SECTOR PERFORMANCE RISK Intra-annual Landings Volatility High frequency (weekly or monthly, as available) landings volatility is primarily a measure of the potential for wealth generation in the fishery. High volatility may reflect a seasonality of the availability of the fish for harvest, or management that limits the harvest season directly, or induces a derby. Spikes in landings during certain parts of the year hinder wealth creation in several ways. First, concentrating landings in a short period spikes supply and often suppresses ex-vessel prices. Second, processing capacity must be established to handle the spikes, and if it is not applied to other fisheries, it will be underutilized and costly per unit processed. Third, spikes in processing volume often compromise the yield and quality of the processed product. Finally, intra-annual volatility can make it difficult for processors to make forward contracts for their products; thus they receive lower prices. Ratio of the standard deviation of the weekly/monthly total sold landings over the last three years to the mean landings. Observations of zero landings are included if there is biological availability. If the biological season is so short that there is not meaningful variation at a monthly level, this measure can be NA. 7 Bin boundaries should be established by quintile once data are collected on many fisheries. Absent monthly landings data on a range of fisheries, the pilot study uses the same bins as for Annual Landings Volatility: or less or greater This measure equally discounts fisheries that face natural limitations with those that have management flaws. The effects of landings spikes may be attenuated if product storage is easy or does not discount product value significantly. Data Available Yes Yes Maybe? 7 More precisely prescribing the circumstances under which this should be NA will be determined in the case studies. 39

42 HARVEST SECTOR PERFORMANCE RISK Annual Price Volatility Annual price volatility complements annual harvest volatility to capture the wealth generation potential in the fishery. When future revenues are variable, it is difficult to make investment decisions and secure capital because future income streams are highly uncertain. High price volatility may reflect obstacles to developing final product markets in non-specialty fisheries, as large processors and exporters prefer to deal with products for which they can develop long-term contracts. Ratio of the standard deviation of the first differences of annual ex-vessel price to the mean price over the last 10 years. Bin boundaries should be established by quintile once data are collected on many fisheries. Pilot study boundaries were established by calculating the score for each country-fish category (finfish, shellfish and crustaceans only) in FishStat (FAO), then determining the quintile values: or less or greater Data Available Yes a Probably a Maybe b a Price data may not be available for vertically integrated fisheries where price is not determined for transfers within a company. b Price will not be available for harvester-consumed product. 8 This approach uses more highly aggregated fisheries than are likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. 40

43 HARVEST SECTOR PERFORMANCE RISK Intra-annual Price Volatility Intra-annual price volatility complements intra-annual harvest volatility to capture the wealth generation potential in the fishery. Price changes arise from: 1) shifts in demand stemming from seasonal changes in tastes (e.g., traditional holiday fish dishes) or 2) changes in supply stemming from the seasonal availability of fish or management-induced periods of high effort. If price volatility is high, unconstrained harvesters could shift landings from a period of low price to a period of higher price and increase fishery rent. Periods of high landings at low prices are associated with fishing derbies and the problems associated with high intra-annual landings volatility. Ratio of the standard deviation of average monthly ex-vessel price over the last three years to the mean. Observations of zero landings are included if there is biological availability. If the biological season is so short that there is not meaningful variation at a monthly level, this measure can be NA. Bin boundaries should be established by quintile once data is collected on many fisheries. Absent monthly price data on a range of fisheries, the pilot study uses the same bins as for Annual Price Volatility: or less or greater Certain fisheries have particular markets into which they can sell small amounts of differentiated or premium product, which would also add to variance although the product was good for wealth; e.g., the Northeast US herring fishery can sell a small amount of premium product to Europe for human consumption, while the rest is sold as bait. This may increase the price volatility measure. Data Available Yes a Probably a Maybe b a Price data may not be available for vertically integrated fisheries where price is not determined for transfers within a company. b Price will not be available for harvester-consumed product. 9 This approach uses more highly aggregated fisheries than are likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. 41

44 HARVEST SECTOR PERFORMANCE RISK Spatial Price Volatility The extent to which ex-vessel price for the same product varies across different ports within the fishery reflects market integration and opportunities for arbitrage across space within the fishery. A market that is well integrated spatially will have similar prices at different ports, whereas isolated landings ports or ports that are differentially well connected to markets, and therefore posing greater financial risk, will have higher levels of spatial volatility. Ratio of the standard deviation across data collection regions 10 of average annual ex-vessel price to the mean. Measure should be averaged over last three years. Bin boundaries should be established by quintile once data is collected on many fisheries. Absent spatial price data on a range of fisheries, the pilot study uses the same bins as for Annual Price Volatility: or less or greater Data Available Yes a Probably a Maybe b a Price data may not be available for vertically integrated fisheries where price is not determined for transfers within a company. b Price will not be available for harvester-consumed product. 10 Data collection regions can either be fishery relevant or politically relevant. Defining this generally allows local standards to establish which is most important. 11 This approach uses more highly aggregated fisheries than are likely to be used in case studies. This probably results in lower variance, and thus biases our bins toward lower scores. 42

45 HARVEST SECTOR PERFORMANCE RISK Contestability and Legal Challenges Legal challenges, protests, and contentious public hearings reflect discontent with the management system. It is an indicator of a lack of social acceptance and a source of considerable risk. Subjective. 5 No significant legal challenges, civil actions, or protests regarding the fishery management system 4 Minor legal challenges slow implementation 3 Legal challenges, civil actions, or protests impede some management measures 2 Legal challenges, civil actions, or protests suspend major elements of the management system 1 Legal challenges, civil actions, or protests suspend or prohibit implementation of key management reforms and regulation Data Available Yes Yes Yes 43

46 HARVEST SECTOR PERFORMANCE OWNERS, PERMIT HOLDERS & CAPTAINS Earnings Compared to National Average Earnings This is a direct measure of fishery-produced wealth accumulating to owners of harvesting capital. Scaling earnings by national average earnings reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to national standards. Ratio of annual earnings from fishing per owner to the national average earnings. In many cases, the captain is an owner of a vessel or permit, but in other cases, captains are considered as crew. Bin boundaries can be established by percentile once a range of data is collected. For the pilot studies, the boundaries will be established by the following table: 5 More than 50% above the national average 4 Between 10 and 50% above national average 3 Within 10% of the national average 2 Between 50% and 90% of the national average 1 Less than half the national average This measure is earnings net of crew wages, which are captured in a separate measure. This is a tough measure in seasonal or part-time fisheries where most harvesters also have other jobs that provide some, or even primary, income. Social standing might be much easier to collect. Data Available Yes Some Some Monotonic No a No a No a a Monotonicity may break down if particularly high-wage industries dominate an economy. 44

47 HARVEST SECTOR PERFORMANCE OWNERS, PERMIT HOLDERS & CAPTAINS Fishery Wages Compared to Non-fishery Wages This is a direct measure of fishery-produced wealth accumulating to harvesters. Scaling wages by average local earnings reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. Here, the local standard is the local wage, rather than national income levels, which could pick up important rural/urban differences in heterogeneous countries. Ratio of captain's average daily wage to average daily wage in region/country. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 50% above the average 4 Between 10 and 50% above average 3 Within 10% of the average 2 Between 50% and 90% of the average 1 Less than half the average Earnings compared to the national average consider full year's income, but normalize by the national norm, which may not represent rural coastal areas in heterogeneous countries. Data Available Yes Yes No a a Not all fisheries may have an imputable wage. 45

48 HARVEST SECTOR PERFORMANCE OWNERS, PERMIT HOLDERS & CAPTAINS Social Standing of Boat Owners and Permit Holders This is a proxy for income associated with boat and permit ownership, which may be much easier to collect than actual income information. It also allows informal incorporation of parttime harvesting jobs into other careers. Social standing reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. 5 Among the most respected in the community, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4 Comparable to management and white collar jobs 3 Comparable to skilled labor jobs 2 Comparable to unskilled blue collar or service jobs 1 Among the least respected, such as slaves or indentured servants Data Available Yes Yes Yes 46

49 HARVEST SECTOR PERFORMANCE OWNERS, PERMIT HOLDERS & CAPTAINS Proportion of Nonresident Employment The ability of a country or region to improve itself using its resources depends on its ability to maintain local multipliers by keeping wealth within the region. A large portion of nonresident harvesters reflects that much of the harvesting wealth will be leaving the region, failing to boost the regional economy. In developing regions, it may also reflect an inability of local resource users to generate sufficient capital to harvest % local % local % local % local 1 Virtually no local harvesters Data Available Yes Yes Yes 47

50 HARVEST SECTOR PERFORMANCE CREW Earnings Compared to National Average Earnings This is a direct measure of fishery-produced wealth accumulating to crew. Scaling earnings by average national earnings reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. Ratio of annual earnings from fishing per owner to the national average earnings. In many cases, the captain is an owner of a vessel or permit, but in other cases, captains are considered as crew. Bin boundaries can be established by percentile once a range of data are collected. For the pilot studies, the boundaries will be established by the following table: 5 More than 10% above the average 4 Within 10% of the average 3 Between 60 and 90% of the average 2 Between 25 and 50% of the average 1 Less than 25% of the average This measure is earnings net of crew wages, which are captured in a separate measure. This is a tough measure in seasonal or part-time fisheries where most harvesters also have other jobs that provide some, or even primary, income. Social standing might be much easier to collect. Data Available Yes Some Some Monotonic No a No a No a a Monotonicity may break down if particularly high-wage industries dominate an economy. 48

51 HARVEST SECTOR PERFORMANCE CREW Fishery Wages Compared to Non-fishery Wages Crew wage is a direct measure of the fishery wealth that accumulates to crew. It is normalized by wages typical of the region to provide a relative standard of living afforded to crew, and also reflect whether the fishery is able to attract the most skilled workers. Ratio of crew s average daily wage to average daily wage in region/country. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 10% above the average 4 Within 10% of the average 3 Between 60 and 90% of the average 2 Between 25 and 50% of the average 1 Less than 25% of the average The normalized wage may not reflect comparable jobs in countries where high-pay, high-skill jobs are present. Data Available Yes Yes No a a Not all fisheries may have an imputable wage. 49

52 HARVEST SECTOR PERFORMANCE CREW Social Standing of Crew This is a proxy for income associated with crewing on fishing boats, which may be much easier to collect than actual wage information. It also allows informal incorporation of parttime harvesting jobs into other careers. Social standing reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. 5 Among the most respected in the community, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4 Comparable to management and white collar jobs 3 Comparable to skilled labor jobs 2 Comparable to unskilled blue collar or service jobs 1 Among the least respected, such as slaves or indentured servants Data Available Yes Yes Yes 50

53 HARVEST SECTOR PERFORMANCE CREW Proportion of Nonresident Employment The ability of a country or region to improve itself using its resources depends on its ability to maintain local multipliers by keeping wealth within the region. A large portion of nonresident harvesters reflects that much of the harvesting wealth will be leaving the region, failing to boost the regional economy. In developing regions, it may also reflect an inability of local resource users to generate sufficient capital to harvest % local % local % local % local 1 Virtually no local crew Data Available Yes Yes Yes 51

54 HARVEST SECTOR PERFORMANCE CREW Crew Experience The rate at which the crew force turns over in the fishery is an indirect measure of several key variables. First, it reflects wealth accumulation to crew because a crew member will only stay in the fishery if the wage is comparable to, or better than, other jobs he could obtain. Second, crew longevity often means they are resident in the community, and thus their earnings stay in the community and are spent locally, rather than being sent away by itinerant or immigrant crews. Third, experienced crew develop specialized knowledge and refined skills that make harvesting more efficient, so the fishery is better able to reach its wealth-generating potential. Finally, many crew will stay in the fishery if they believe the future to be worthwhile and that they will have the means to succeed to captain. Average years of experience of crew members. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 20 years (skilled career crew) years years years 1 0 full years of experience (mostly new crew each season) The average may not reflect the spread of experience levels, which may be more important in some fisheries, such as those that require only a small group of highly experienced deckhands to manage a large cadre of inexperienced crews. How should this measure be integrated with other measures in fisheries where there is no crew? See Crew Age Structure. Data Available Yes Yes Yes 52

55 HARVEST SECTOR PERFORMANCE CREW Age Structure of Harvesters A widely distributed age structure is an indirect measure of several key variables. Broadly, it reflects both that experienced older crew is willing to stay in the fishery, possibly as captains, but also that younger crew members are willing to enter and that job opportunities in the fishery are available. First, it reflects wealth accumulation to crew because an experienced crew member will only stay in the fishery, and a new crew member will only enter, if the wage is comparable to, or better than, other jobs he could obtain. Second, crew longevity often means the crew are resident in the community, and thus their earnings stay in the community and are spent locally, rather than being sent away by itinerant or immigrant crews. Third, experienced crew develop specialized knowledge and refined skills that make harvesting more efficient, so the fishery is better able to reach its wealth-generating potential. Finally, many crew will only enter (young) or stay in (older) the fishery if they believe the future to be worthwhile and that they will have the means to succeed to captain. Age range of both captains and their crews: 5 All working ages are well represented 4 Slightly skewed toward younger or older 3 Skewed toward younger or older 2 Almost entirely younger or older, but working age 1 Harvesters primarily younger or older than working age New fisheries may experience an influx of younger fishermen, leading to low age variance in an otherwise economically healthy fishery. Transition to quota systems may artificially concentrate the wealth with older crew members with historical access records, excluding younger members and lowering the value of the measure even in economically healthy fisheries. See Crew Experience. Data Available Yes Yes Yes 53

56 HARVEST SECTOR PERFORMANCE MARKET PERFORMANCE Ex-vessel Price versus Historic High If the fishery is generating wealth, it is expected that the orientation of the fishery will shift from competing for fishery resource access, to market access and development. This should be observable in stable or increasing ex-vessel prices. The indicator is the ratio of annual ex-vessel prices to the average of the three highest annual ex-vessel prices in the past 10 years. 5 Above 95 percent 4 85 to 95 percent 3 70 to 85 percent 2 50 to 70 percent 1 Below 50 percent Data Available Yes Yes Maybe Monotonic Not Necessarily Not Necessarily Not Necessarily 54

57 POST-HARVEST PERFORMANCE MARKET PERFORMANCE Final Market Use The use of the fishery product that is finally consumed reflects the extent to which the fishery, its processing and trade products are maximizing the potential value from the resource. 5 Premium human consumption (premium quality and products) 4 High-value human consumption 3 Moderate-value human consumption 2 Low-value human consumption 1 Fish meal/animal feed/bait or non-consumptive For multiproduct species, use the score that dominates value. Data Available Yes Yes Yes 55

58 POST-HARVEST PERFORMANCE MARKET PERFORMANCE International Trade Maximizing the wealth generation potential of a fishery requires delivering the product to the people who value it most. The level of exports reflects how well the fishery has maximized its wealth potential by accessing the market that is willing to pay the most for the product globally. Percentage of the fishery s value that is from fish exported for consumption: % export % export % export % export 1 Virtually no export Some product exports are for processing, which are then reimported. Data Available Yes Yes Yes 56

59 POST-HARVEST PERFORMANCE MARKET PERFORMANCE Final Market Wealth The income of the people who finally consume the fishery product reflects the extent to which the fishery, its processing, and trade products are maximizing the potential value from the resource. Products that are being sold in wealthier countries are competing favorably, reflecting high-quality, effective marketing, and are drawing wealth to the fishery. Average per capita GDP of the consumer of a fishery s final product (pounds weighted by GDP). (US CIA's rank of per capita GDP of all countries 5 Greater than 35,000USD 4 Greater than 25,000USD 3 Greater than 12,500USD 2 Greater than 5,000USD 1 Less than 5,000USD Some high GDP countries are not discriminating. A simpler measure could not weight by importing country s GDP, and look only at the percentage of exports that go to developed, industrialized or high-income countries. Data Available Yes Yes Yes 57

60 POST-HARVEST PERFORMANCE MARKET PERFORMANCE Wholesale Price Relative to Similar Products The extent to which a country s fishing industry is realizing its wealth generation potential is captured by comparing the price that country receives with the price for substantially similar products in other countries. Ratio of average price for fish weight in wholesale (primary) fish product from the base country, to a global average for similar species: 5 More than twice global average % global average 3 Within 20% of global average % of global average 1 Less than half global average Retail price would be ideal for this measure, but is likely impossible to get reliable price measure systematically tracked, especially for heavily processed products. A similar ratio of import prices for substantially similar species may be easier to obtain. Data Available Yes Maybe Maybe 58

61 POST-HARVEST PERFORMANCE MARKET PERFORMANCE Capacity of Firms to Export to the US and EU Companies with unreliable, low quality or unsecure supply chains may not be able to export to the US or EU without detention. The more freely a company can export to the US or EU, the broader the market. Access reflects the success of quality control systems and breadth of market. It is also a measure of the financial risk associated with international trade. Percentage of a country s fish exports that are approved for export to the US or EU: % approved % % % 1 Virtually none approved This measure is limited to the US and EU for tractability. However, it is biased toward countries targeting those markets. Clearly, export to destinations such as Japan or interregional trade is not captured here. Data Available Yes Yes Yes 59

62 POST-HARVEST PERFORMANCE MARKET PERFORMANCE Ex-vessel to Wholesale Marketing Margins The value added by processing and marketing at the wholesale level is a direct measure of wealth accumulation in the processing sector. When compared across products, it can also represent how well a fishery is realizing the maximum potential value from its landed fish. Ratio of ex-vessel price to wholesale price (adjusted for standard meat yield rates). To make the adjustment, divide the ex-vessel price by a standard processing yield, and divide by the wholesale price. Bin boundaries can be established by quintile once there is data on a range of fisheries. For the pilot studies, the following table can be used: 5 Less than or more Different products have different potential margins, so one fishery may be doing well by getting 10% value added, while another is doing poorly doubling its value. How to handle pricing of fish products when other ingredients are added (e.g., breading) in processing. Data Available Yes Yes Maybe 60

63 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Yield of Processed Product Processing yield is a measure of the potential value of the landed fish that is being realized as wealth. Yield will likely be higher in more efficient processing operations and those with a steady supply of landed product where there is time to take more care in processing and develop downline customers who will pay a premium for reliable forward contracts for premium products. They may also be able to turn processing byproducts (bones, blood) into revenue streams, increasing value per landed weight. Ratio of actual yield (pounds) to the maximum yield technically achievable. Bin boundaries can be established by quintile once there is data on a range of fisheries. For the pilot studies, the following table can be used: 5 At feasible frontier 4 Within 5% of the feasible frontier 3 Within 10% 2 Within 25% 1 Less than 75% of maximum yield Data Available Maybe Maybe Unlikely 61

64 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Capacity Utilization Rate In many fisheries, a hindrance to wealth accumulation is an excess of capital, even in processing. This may occur because the fishery was once larger than it is now and it is difficult to downsize plants, or because management or biology forces landings to be concentrated in a short period of time. Potential wealth is then consumed in maintaining a larger than necessary facility, or in tying up capital in a facility that is not used to full capacity. In fisheries where landings and processing are concentrated within a short season, this inefficiency may be compounded by using processing technology at a rate that does not support high yields when landings are occurring. Days open for processing each year. Such days would not normally include religious or civic holidays, or weekly rest days. Bin boundaries can be established by quintile once there is data on a range of fisheries. For the pilot studies, the following table can be used: 5 Virtually year-round % of days % 2 21%-50% 1 Less than 20% Many processing plants handle many types of fish throughout the year; thus it can be difficult to establish a maximum number of output pounds for a facility. Looking at the days individual lines are open to total possible line days, or employee days to possible days, might capture additional variation for large plants that operate at a fraction of capacity during some or all of the year. Data Available Yes Yes Yes 62

65 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Product Improvement One way processors can maximize the value of a product is to market it with improvements that make it more appealing to the consumer, who will then pay more for the product. Sale with a certification, value-enhancing branding or value-added processing can increase wholesale and retail prices, and thus the wealth brought to the fishery. Proportion of harvest meat weight going into certified, branded, or value added products: % of landings are enhanced % % % 1 No landings have enhancements Does the product have to carry a certification on it, or is it enough that it is certified? See Proportion of Harvest with Third Party Certification. Data Available Yes Yes Yes 63

66 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Regional Support Businesses The strength of the marine support sector is important to realizing the maximum potential wealth through efficient harvesting. Sales in the support sector are a direct measure of wealth accumulation in the support sector. However, they also reflect the ability of the fishery to access and adopt new technology to make harvesting more efficient and profitable, and the propensity for the fishery to do so, as sales to harvesters support these businesses. 5 All types of support are plentiful 4 Some types of support are capacity constrained or unavailable 3 Most types of support are capacity constrained or unavailable 2 Support limited to variable inputs 1 Industry support is not locally available Data Available Yes Yes Maybe? Monotonic No a No a No a a Some fisheries may not require much in the way of support, and thus appear to have low levels of support, when in fact it is not needed. 64

67 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Time to Repair The amount of time required to make a major repair, including especially that to acquire parts, reflects how well the fishery is connected to the infrastructure necessary to maintain capital. Because this connectedness arises when there is a market for capital maintenance services, this captures how well the fishery is adopting new, efficient technologies that maximize wealth generation. It is also a measure of riskiness of capital investment, as the ability to effectively maintain new capital is critical to extracting and preserving its value. Days required to make a major mechanical repair to a vessel (e.g., blown valve) that requires a replacement part, including wait time: 5 Less than a week 4 One week to one month 3 One month-less than a season 2 Full season 1 Major repair not possible Not all fisheries use similar engine technology. Data Available Yes Yes Yes 65

68 POST-HARVEST PERFORMANCE ASSET PERFORMANCE Borrowing Rate Relative to Risk-Free Rate The size of the premium the capital market demands to make loans in the processing sector is a direct measure of financial risk in the industry. It is locally normalized to reflect the overall riskiness in the region and the opportunities available to local capital. Average ratio between the interest rate on loans made in the industry to risk-free rates over the last three years. Bin boundaries are based on the ratio of consumer loan rates for different types of rates to the regional 10-year risk free rate (3.60% for US T-bill; example ratios below): 5 Less than 1.75; cf. 30-year conforming mortgage 4 Less than 2.5; cf. personal bank loan 3 Less than 4; cf. good credit card rates 2 Less than 7; cf. bad credit card rates 1 Greater than 7; usury Are US treasury rates the correct measure of the risk-free rate for most all countries? How should this measure be integrated with other measures in the processing sector where there is no capital available? Difference rather than ratio. Data Available Yes Maybe Maybe 66

69 POST-HARVEST PERFORMANCE ASSET PERFORMANCE Source of Capital Whether lending capital from a particular source is even available is a direct measure of how the capital market assesses risk in the fishery s processing sector. If a certain type of lender or investor is not willing to make capital available in the processing sector at any price, it reveals that it is much riskier than other available investments. This measure is less refined than relative rate, but much easier to obtain. Points to be assigned based on category of lenders or investors that is most typically used in the processing sector. Points assigned as follows: 5 Unsecured business loans from banks Venture capital 4 Secured business loans from banks Public stock offering 3 Loans from banks secured by personal (not business) assets Government subsidized private lending Government-run loan programs International aid agencies 2 Microlending Family/community-based lending 1 Mafia No capital available Data Available Yes Yes Yes 67

70 POST-HARVEST PERFORMANCE ASSET PERFORMANCE Age of Facilities The age of the facilities used in processing harvests, primarily processing plants and storage facilities, reflects several dimensions of fishery wealth. First, it is a direct measure of wealth that has been accumulated from the fishery and reinvested in capital. Second, it is a measure of the potential wealth in the fishery, as newer facilities will be more efficient and less costly to operate. Third, if processors are willing to invest in new capital, it reflects their assessment that the fishery will be profitable into the future. Finally, if new facilities are funded by private loans, newer facilities reflect the capital market s assessment that the fishery is sufficiently low risk to warrant investment. Average age of the key durable processing capital unit (plants, catcher-processor vessels) 5 Less than 7 years; 1 st quarter of expected life years; 2 nd quarter of expected life years; third quarter of expected life years; 4 th quarter of expected life 1 Greater than 25 years; exceeding expected life In a fishing derby, investment in new facilities may reflect overcapitalization and potential stranded capital in the processing sector. Data Available Yes Yes Yes 68

71 POST-HARVEST PERFORMANCE PROCESSING OWNERS & MANAGERS Earnings Compared to National Average Earnings This is a direct measure of fishery-produced wealth accumulating to processing owners and managers. Scaling earnings by average national earnings reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. Ratio of annual earnings from processing per owner to the national average earnings. In many cases, the captain is an owner of a vessel or permit, but in other cases, captains are considered as crew. Bin boundaries can be established by percentile once a range of data are collected. For the pilot studies, the boundaries will be established by the following table: 5 More than 50% above the national average 4 Between 10 and 50% above national average 3 Within 10% of the national average 2 Between 50 and 90% of the national average 1 Less than half the national average This measure is earnings net of crew wages, which are captured in a separate measure. This is a tough measure in seasonal or part-time fisheries where most harvesters also have other jobs that provide some, or even primary, income. Social standing might be much easier to collect. Data Available Yes Some Some Monotonic No a No a No a a Monotonicity may break down if particularly high-wage industries dominate an economy. 69

72 POST-HARVEST PERFORMANCE PROCESSING OWNERS & MANAGERS Manager Wages Compared to Non-fishery Wages The processing owner or manager wage is a direct measure of fishery wealth that accumulates to processing workers. It is normalized by wages typical of the region to provide an indicator of the relative standard of living afforded to managers, and also reflect whether the industry is able to attract the most skilled managers. Ratio of managers' average daily wage to average daily wage in region. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 50% above the average 4 Between 10 and 50% above average 3 Within 10% of the average 2 Between 50 and 90% of the average 1 Less than half the average The normalized wage may not reflect comparable jobs in countries where high-pay, high-skill jobs are present. Data Available Yes Yes Yes 70

73 POST-HARVEST PERFORMANCE PROCESSING OWNERS & MANAGERS Social Standing of Processing Managers This is a proxy for income associated with owning or running processing plants, which may be much easier to collect than actual wage information. Social standing reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. 5 Among the most respected in the community, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4 Comparable to management and white collar jobs 3 Comparable to skilled labor jobs 2 Comparable to unskilled blue collar or service jobs 1 Among the least respected, such as slaves or indentured servants Data Available Yes Yes Yes 71

74 POST-HARVEST PERFORMANCE PROCESSING & SUPPORT INDUSTRY PERFORMANCE Nonresident Ownership of Processing Capacity The ability of a country or region to improve itself using its resources depends on its ability to maintain local multipliers by keeping wealth within the region. A large portion of nonresident owned processing reflects that much of the processing wealth will be leaving the region, failing to boost the regional economy. In developing regions, it may also reflect an inability of local resource users to generate sufficient capital to process. Proportion of ex-vessel value processed by regionally owned processing capital: % local % local % local % local 1 Virtually no locally owned processing Data Available Yes Yes Yes 72

75 POST-HARVEST PERFORMANCE PROCESSING WORKERS Earnings Compared to National Average Earnings This is a direct measure of fishery-produced wealth accumulating to processing workers. Scaling earnings by average national earnings reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. Ratio of annual earnings from fishing per owner to the national average earnings. In many cases, the captain is an owner of a vessel or permit, but in other cases, captains are considered as crew. Bin boundaries can be established by percentile once a range of data is collected. For the pilot studies, the boundaries will be established by the following table: 5 More than 10% above the average 4 Within 10% of the average 3 Between 50 and 90% of the average 2 Between 25 and 50% of the average 1 Less than 25% of the average This is a tough measure in seasonal or part-time fisheries where most harvesters also have other jobs that provide some, or even primary, income. Social standing might be much easier to collect. Data Available Yes Some Some Monotonic No a No a No a a Monotonicity may break down if particularly high-wage industries dominate an economy. 73

76 POST-HARVEST PERFORMANCE PROCESSING WORKERS Worker Wages Compared to Non-fishery Wages The processing worker wage is a direct measure of fishery wealth that accumulates to processing workers. It is normalized by wages typical of the region to provide an indicator of the relative standard of living afforded to workers, and also reflect whether the fishery is able to attract the most skilled workers. Ratio of workers average daily wage to average daily wage in region. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 10% above the average 4 Within 10% of the average 3 Between 50 and 90% of the average 2 Between 25 and 50% of the average 1 Less than 25% of the average The normalized wage may not reflect comparable jobs in countries where high-pay, high-skill jobs are present. Data Available Yes Yes Yes 74

77 POST-HARVEST PERFORMANCE PROCESSING WORKERS Social Standing of Processing Workers This is a proxy for income associated with working in processing plants, which may be much easier to collect than actual wage information. Social standing reflects whether the fishery is able to attract the most talented workers in the community and is doing well at wealth generation relative to local standards. 5 Among the most respected in the community, comparable with civic and religious leaders and professionals, such as doctors and lawyers 4 Comparable to management and white collar jobs 3 Comparable to skilled labor jobs 2 Comparable to unskilled blue collar or service jobs 1 Among the least respected, such as slaves or indentured servants Data Available Yes Yes Yes 75

78 POST-HARVEST PERFORMANCE PROCESSING WORKERS Proportion of Nonresident Employment The ability of a country or region to improve itself using its resources depends on its ability to maintain local multipliers by keeping wealth within the region. A large portion of nonresident processing workers reflects that much of the processing wealth will be leaving the region, failing to boost the regional economy % local % local % local % local 1 Virtually no local processing crew Data Available Yes Yes Yes 76

79 POST-HARVEST PERFORMANCE PROCESSING WORKERS Worker Experience The rate at which workers turn over in the fishery is an indirect measure of several key variables. First, it reflects wealth accumulation to workers, because a worker will only stay in the fishery if the wage is comparable to, or better than, other jobs he could obtain. Second, worker longevity often means the workers are resident in the community, and thus their earnings stay in the community and are spent locally, rather than being sent away by itinerant or immigrant workers. Third, experienced workers develop specialized knowledge and refined skills that make processing more efficient, so the fishery is better able to reach its wealth-generating potential. Average years of experience of workers. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 20 years (skilled career workers) years years years 1 0 full years of experience (mostly new workers each season) Data Available Yes Yes Yes 77

80 78

81 III. FISHERY PERFORMANCE FACTORS WEALTH ENABLING INPUTS 79

82 III. FISHERY PERFORMANCE FACTORS Wealth Enabling Inputs This section identifies 39 wealth-enabling factors (see Table 2). Each factor (last column in Table 2) is individually explained in the following pages. Table 2. Fishery Performance Indicators Inputs (Enabling Wealth Creation) Environmental Performance Index (EPI) Property Rights & Responsibility Management Post-harvest Macro Factors Access Harvest Collective Action Inputs Participation Markets & Market Institutions Infrastructure Governance Indicator Effectiveness Governance Indicator Voice & Accountability Index of Economic Freedom Gross Domestic Product (GDP) Per Capita Proportion of Harvest Managed Under Limited Access Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index Proportion of Harvest Managed with Rights-based Management Transferability Index Security Index Durability Index Flexibility Index Exclusivity Index Participation in Harvester Organizations Harvester Organization Influence on Fishery Management & Access Harvester Organization Influence on Business & Marketing Management Expenditure to Value of Harvest Management Employees to Value of Harvest Management Employees per Permit Holder Research as a Proportion of Fisheries Management Budget Level of Subsidies Days in Stakeholder Meetings Industry Financial Support for Management Landings Pricing System Availability of Ex-vessel Price & Quantity Information Number of Buyers Degree of Vertical Integration Level of Tariffs Level of Non-tariff Barriers International Shipping Service Road Quality Index Technology Adoption Extension Service Reliability of Utilities/Electricity Access to Ice & Refrigeration 80

83 MACRO FACTORS Environmental Performance Index (EPI) Wealth creation is dependent on the general condition of the environment. An Environmental Performance Index (EPI) has been developed to evaluate: 1) environmental health and 2) ecosystem vitality (Esty et al. 2008). The EPI considers factors such as disease, water quality, air pollution, biodiversity, natural resources and climate change. The EPI ranges from 1-100: 5 EPI of Aggregation and weighting of the components of the EPI is controversial. Data for many of the components are not readily available. Data Available Yes Not Complete No 81

84 MACRO FACTORS Governance Indicator Effectiveness Good governance is an essential condition for sustainable fisheries and wealth creation. The World Bank has developed a Worldwide Governance Indicator which considers six dimensions: Voice & Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption (Kaufman, et al. 2008). The Governance Indicators (Kaufman, D., A. Kraay, and M. Mastruzzi, 2008) assign countries to ranks based on six dimensions. This measure is the average percentile ranking of the Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption indicators. Assign average percentile to a quintile and give points according to: 5 1 st quintile 4 2 nd 3 3 rd 2 4 th 1 5 th The measures used are perception based and there is considerable uncertainty with them. Data Available Yes but Not Complete Yes but Not Complete Yes but Not Complete 82

85 MACRO FACTORS Governance Indicator Voice & Accountability Good governance is an essential condition for sustainable fisheries and wealth creation. The World Bank has developed a Worldwide Governance Indicator which considers six dimensions: Voice & Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption (Kaufman, et al. 2008). The Governance Indicators (Kaufman, D., A. Kraay, and M. Mastruzzi, 2008) assign countries to ranks based on six dimensions. This measure is the average percentile ranking of the Voice and Accountability and Political Stability indicators. Assign average percentile to a quintile and give points according to: 5 1 st quintile 4 2 nd 3 3 rd 2 4 th 1 5 th The measures used are perception based and there is considerable uncertainty with them. Data Available Yes but Not Complete Yes but Not Complete Yes but Not Complete 83

86 MACRO FACTORS Index of Economic Freedom Wealth creation is dependent on the institutional setting and economic conditions in a given country. The Heritage Foundation/Wall Street Journal, Index of Economic Freedom (IEF) reflects the overall economic freedom of the nation within which the fishery sector operates (Miller and Holmes, 2009). The Index of Economic Freedom includes 10 broad institutional factors: Business freedom Trade freedom Fiscal freedom Government size Monetary freedom Investment freedom Financial freedom Property rights Freedom from corruption Labor freedom Construction of the index relies on several other studies for its data sources, including the World Bank s Doing Business Economist Intelligence Unit (The World Bank 2009a), the US Department of Commerce, the World Bank s World Development Indicators (The World Bank, 2009b), Eurostat, International Monetary Fund reports, Transparency International s, Corruption Perceptions Index (Transparency International, 2009) and several other documents. The 10 factors are equally weighted and the final composite index has a range from A detailed discussion of these factors and methodology is found in Miller and Holmes (2009). 5 IEF of Data Available Yes Yes Yes 84

87 MACRO FACTORS Gross Domestic Product (GDP) Per Capita Richer nations are more likely able to afford the institutions and technological factors that are necessary for wealth creation. Bin boundaries based on quintiles of the US CIA's rank of per capita GDP of all countries ( 5 Greater than 30,000USD 4 Greater than 12,400USD 3 Greater than 6,000USD 2 Greater than 2,500USD 1 Less than 2,500USD Data Available Yes Yes Yes 85

88 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Proportion of Harvest Managed Under Limited Access Limited-access fisheries are an essential step in eliminating the open-access common property problem of rent dissipation. The proportion of total harvest that is under limited-access fishing regulation: 5 Virtually all % % % 1 Virtually none Limited-access systems can be employed in many different ways with different levels of effectiveness. Are individual transferable quotas (ITQs) to be considered limited access? Data Available Yes Yes Yes 86

89 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Transferability Index Transferability is essential for a functioning market to allocate resources to their best use. If rights are not transferable, financing is undermined because the property may not be accepted as collateral. If the markets for the rights are not efficient, then the value of the right will not be transparent, and its price will not necessarily reflect the value. This will lead to misallocation of resources and inefficiencies, as well as undermine sustainability and wealth creation (Anderson, 2007, 2002). 5 Very Strong: Fully transferable through well-established, efficient market institutions 4 Strong: Fully transferable, but institutions are poor or illiquid 3 Moderate: Transferable, but with severe restrictions on who can hold, or how much 2 Weak: Transferable only under highly restricted and limited condition 1 Access rights not transferable Data Available Yes Yes Yes 87

90 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Security Index When property rights are insecure, regardless of whether the reason is crime, civil unrest, war, government instability or government s use of eminent domain, it causes owners to be more exploitive with resources. Uncertainty implicitly increases the discount rate. Financing is undermined (Anderson, 2007, 2002). Extent to which the government reduces or dilutes the access rights: 5 Very Strong: Access rights are completely respected and are not diluted (e.g., by issuing more access rights) by the government 4 Strong: Rights are mostly respected by the government; generally survive changes in government administration 3 Moderate: Rights are at risk of retraction or dilution with changes in administration 2 Weak: Rights are highly diluted or there is high political uncertainty 1 None: Access rights are not protected Data Available Yes Yes Yes 88

91 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Durability Index Short-duration property rights create more exploitive management. This implicitly increases the discount rate, thus undermining sustainability and wealth creation (Anderson, 2007, 2002). Duration of the property right: 5 Very Strong: > 10 years to perpetuity 4 Strong: 5 to 10 years 3 Moderate: 1 to 5 years 2 Weak: Seasonal 1 None: None/daily Data Available Yes Yes Yes 89

92 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Flexibility Index Under strong property rights all decisions regarding use, management and technology employed to extract value from the property are controlled by the owner. Fishing time, gear and handling practices are in the owner s control. Ability of right holders to be flexible in the timing and production technology employed: 5 Very Strong: All decisions on time of harvest, gear used and handling practices are in the owner s control 4 Strong: Minimal restrictions on time of harvest and technology 3 Moderate: Modest restrictions on time of harvest and technology 2 Weak: Significant restrictions on time of harvest and technology 1 Time of harvest, gear used and handling practices are not in the owner s control Data Available Yes Yes Yes 90

93 PROPERTY RIGHTS & RESPONSIBILITY ACCESS Exclusivity Index Under strong property rights all decisions and access to the property are controlled by the owner. With well-defined rights, externalities are internalized and net benefits are captured. Those that produce externalities that infringe on the property right are held responsible. If externalities are not internalized, costs are undervalued, market signals are biased, resources are misallocated and sustainability and wealth creation are undermined (Anderson, 2007, 2002). Ability of right holders to exclude those who do not have the right from affecting the resource or market: 5 Very Strong: All decisions and access to the property are controlled by the right s owner (rather than those without rights, competing resource users [like recreational or bycatch fisheries]). 4 Strong: Little intrusion on resource by those without rights 3 Moderate: Modest intrusion on resource by those without rights 2 Weak: Significant intrusion on resource by those without rights 1 None: Completely unrestricted open access, despite putative right Data Available Yes Yes Yes 91

94 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Proportion of Harvest Managed with Rights-based Management Rights-based management (beyond simple access), such as Individual/Community Quotas, Catch Shares or Territorial Use Rights (TURFs), induce economic incentives to allocate resources efficiently and generate wealth. The proportion of total harvest that is under rights-based fisheries management (e.g., Individual/Community Quotas, Catch Shares or Territorial Use Rights (TURFs)): 5 Virtually all % % % 1 Virtually none Rights-based systems can be employed in many different ways with different levels of effectiveness. Data Available Yes Yes Yes 92

95 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Transferability Index Transferability is essential for a functioning market to allocate resources to for their best use. If rights are not transferable, financing is undermined because the property may not be accepted as collateral. If the markets for the rights are not efficient, then the value of the right will not be transparent, and its price will not necessarily reflect the value. This will lead to misallocation of resources and inefficiencies, as well as undermine sustainability and wealth creation (Anderson, 2007, 2002). 5 Very Strong: Fully transferable through well-established, efficient market institutions 4 Strong: Fully transferable, but institutions are poor or illiquid 3 Moderate: Transferable, but with severe restrictions on who can hold, or how much 2 Weak: Transferable only under highly restricted and limited condition 1 Harvest rights not transferable Data Available Yes Yes Yes 93

96 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Security Index When property rights are insecure, regardless of whether the reason is crime, civil unrest, war, government instability or government s use of eminent domain, it causes owners to be more exploitive with resources. Uncertainty implicitly increases the discount rate. Financing is undermined (Anderson, 2007, 2002). Extent to which the government reduces or dilutes the access rights: 5 Very Strong: Access rights are completely respected and are not diluted (e.g., by scaling back landings amounts through TAC reduction) by the government 4 Strong: Rights are mostly respected by the government and generally survive changes in government administration 3 Moderate: Rights are at risk of retraction or dilution with changes in administration 2 Weak: Rights are highly diluted or there is high political uncertainty 1 None: Access rights are not protected Data Available Yes Yes Yes 94

97 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Durability Index Short-duration property rights create more exploitive management. This implicitly increases the discount rate, thus undermining sustainability and wealth creation (Anderson, 2007, 2002). Duration of the property right: 5 Very Strong: > 10 years to perpetuity 4 Strong: 5 to 10 years 3 Moderate: 1 to 5 years 2 Weak: Seasonal 1 None: None/daily Data Available Yes Yes Yes 95

98 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Flexibility Index Under strong property rights all decisions regarding use, management and technology employed to extract value from the property are controlled by the owner. Fishing time, gear and handling practices are in the owner s control. Ability of right holders to be flexible in the timing and production technology employed: 5 Very Strong: All decisions on time of harvest, gear used and handling practices are in the owner s control 4 Strong: Minimal restrictions on time of harvest and technology 3 Moderate: Modest restrictions on time of harvest and technology 2 Weak: Significant restrictions on time of harvest and technology 1 Time of harvest, gear used and handling practices are not in the owner s control Data Available Yes Yes Yes 96

99 PROPERTY RIGHTS & RESPONSIBILITY HARVEST Exclusivity Index Under strong property rights all decisions and access to the property are controlled by the owner. With well-defined rights, externalities are internalized and net benefits are captured. Those that produce externalities that infringe on the property right are held responsible. If externalities are not internalized, costs are undervalued, market signals are biased, resources are misallocated and sustainability and wealth creation are undermined (Anderson, 2007, 2002). Ability of right holders to exclude those who do not have the right from affecting the resource or market: 5 Very Strong: Government prevents harvest in excess of rights allocation 4 Strong: Government allows little harvest in excess of rights allocation 3 Moderate: There is modest harvest in excess of rights allocation 2 Weak: Harvest in excess of rights allocation significantly affects resource or markets 1 None: Completely unrestricted open access, despite putative right Data Available Yes Yes Yes 97

100 PROPERTY RIGHTS & RESPONSIBILITY COLLECTIVE ACTION Participation in Harvester Organizations The degree to which producers are organized into cooperatives or associations that can act collectively to influence distribution/sharing of resources and facilitate both buying and selling power, thereby creating wealth enhancement. Proportion of harvest where the primary harvesters are organized into associations: 5 Virtually all % %% % 1 Virtually none This may reduce competition and undermine innovation. It may be difficult to determine whether associations are focused on joint marketing or management collective action. Data Available Yes Yes Yes Monotonic Likely Likely Likely 98

101 PROPERTY RIGHTS & RESPONSIBILITY COLLECTIVE ACTION Harvester Organization Influence on Management & Access Harvesting organizations can influence management and access by directly managing access rights (e.g., cooperatives or community quota systems) or by taking political action to influence the access they and others have through the management authority. Such harvester participation may facilitate management that increases wealth accumulation to harvesters. Subjective measure of how much influence harvesting organizations have, either directly or through political collective action, on management and access to the fishery: 5 Harvesters effectively determine allocation of resources 4 Harvesters have significant influence in determining allocation 3 Harvesters are politically active, but not controlling 2 Social or informal monitoring participation and allocation 1 No active effort or capacity to influence management Data Available Yes Yes Yes 99

102 PROPERTY RIGHTS & RESPONSIBILITY COLLECTIVE ACTION Harvester Organization Influence on Business & Marketing Harvesting organizations can influence business and marketing by working to exert market power in either purchasing of inputs (e.g., marine services or insurance) or by collectively marketing products, reducing costs or increasing revenue, respectively. Such joint activity may increase wealth accumulation to harvesters. Subjective measure of how much influence harvesting organizations have, either directly or through political collective action, on management and access to the fishery: 5 Harvesting organizations cooperatively determine marketing and operational details 4 Extensive joint marketing 3 Large subgroups facilitating marketing; joint purchasing 2 Small subgroups cooperating in purchasing or operations 1 No active effort or capacity to influence business operations Data Available Yes Yes Yes 100

103 MANAGEMENT INPUTS Management Expenditure to Value of Harvest This is a measure of the cost of fisheries management in proportion to the value of fisheries. Efficiency in management is essential for wealth creation. This measure divides the number of fish stocks not subject to overfishing by the budget (million $) for fisheries management. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table, which are based on the benchmark of managed mutual funds (1-2% management costs): 5 Less than 2% 4 2-5% % % 1 More than 20% Measuring both stocks not overfished and budget expenditure for fisheries management are subject to considerable error. Data Available Yes Maybe No Monotonic Not Necessarily Not Necessarily Not Necessarily 101

104 MANAGEMENT INPUTS Management Employees to Value of Harvest This is an indicator of management efficiency. Efficient management is essential for wealth creation. Public sector fishery management employee FTEs devoted to managing the fishery divided by the ex-vessel value of the harvest. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than.35 per million Measurement of costs and fishery value are often inaccurate. Data Available Yes Maybe Possibly Monotonic Yes in the Long Run Yes in the Long Run Yes in the Long Run 102

105 MANAGEMENT INPUTS Management Employees per Permit Holder This is an indicator of management efficiency. Efficient management is essential for wealth creation. Fishery management FTE employees divided by the number of fishing units (in 100s) (vessels or permit holders). Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 4 or more per 100 permit holders The number of fishery management employees and fishermen is often uncertain and inaccurate. Some employees/fishermen are part time. The number of management employees may be low because the fishery is well managed and employees are not needed to improve management, reflecting well-managed fisheries, or because the government does not invest in management or enforcement of its regulations, which likely leads to rent appropriation and low levels of wealth generation. Data Available Yes Maybe Maybe Monotonic Probably in the Long Run Probably in the Long Run Probably in the Long Run 103

106 MANAGEMENT INPUTS Research as a Proportion of Fisheries Management Budget This is an indicator of the degree to which fishery management is based on science. It is also an indicator of the potential for innovation and support for entrepreneurs. Research expenditures divided by total fisheries management budget. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table (based on 18-22% in pharmaceuticals and 4% in general manufacturing): 5 Over 20% % % % 1 Virtually none The research budget may be obscured as a component of other expenditures. The nature and quality of the research is unclear. Data Available Yes Maybe Maybe 104

107 MANAGEMENT INPUTS Level of Subsidies Subsidies distort resource allocation and pricing. Lower subsidies are indicative of greater market efficiency. Subsidies include: preferential tax rates, input cost reductions, price supports, special borrowing rates, undervaluing resources (ex., leases), payments-in-kind and other related actions giving preference. Measure the annual value of all subsidies as a proportion of the value of the fishery: 5 Near zero (less than 2.5%) % % % 1 More than 20% It is difficult to measure the various direct and indirect subsidies. Furthermore, it is difficult to determine their impact on prices or costs. The focus is on the primary production level. Data Available Possibly Possibly Possibly Monotonic Generally Yes Generally Yes Generally Yes 105

108 MANAGEMENT PARTICIPATION Days in Stakeholder Meetings This measure is a proxy for the efficiency of the management process and stakeholder participation. Stakeholder participation injects stakeholders knowledge into management, and may increase legitimacy and compliance. However, it may also increase management costs and present opportunities for lobbying and rent seeking that increases the time required to implement management, or weakens implemented regulations to prevent wealth generation. Days in stakeholder meetings per year spent by an participant in the fishery who is active in management. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 More than 24 per year None It is unclear if the number of meetings is positive or negative. It is not possible to judge the relative productivity of the meetings. Data Available Yes Yes Maybe Monotonic Not Necessarily Not Necessarily Not Necessarily 106

109 MANAGEMENT PARTICIPATION Industry Financial Support for Management If the industry pays for the cost of management, it is likely that efficiency will be improved and the concomitant control over management exerted by the industry will lead to improved outcomes for harvesters, especially wealth generation. Proportion of the fishery management budget paid for by the fishing sector. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 Virtually all % % 2 1-5% 1 None When industry pays for management, important aspects may be ignored to cut cost. There may be a tendency toward corruption. When the taxpayers pay for management, there is the likelihood of inefficient, wasteful expenditure. Data Available Yes Yes Maybe Monotonic Not Necessarily Not Necessarily Not Necessarily 107

110 POST-HARVEST MARKETS & MARKET INSTITUTIONS Landings Pricing System Fair and efficient price discovery systems are essential for efficient resource use and wealth creation. Crucial to this is the ability of harvesters to move among ex-vessel buyers to those offering the best prices on a per-landing basis. Proportion of the harvest sold in a transparent daily competitive pricing mechanism, such as an auction or centralized ex-vessel to wholesale market: 5 Virtually all % % % 1 Virtually none Auctions or markets can be dominated by a few firms, biased or corrupt. Data Available Yes Yes Probably Monotonic Perhaps not for Forward Contracts Perhaps not for Forward Contracts Perhaps not for Forward Contracts 108

111 POST-HARVEST MARKETS & MARKET INSTITUTIONS Availability of Ex-vessel Price & Quantity Information Market transparency is essential for efficient resource use and wealth creation. Market transparency is characterized by readily available, accurate price and quantity information. 5 Complete, accurate price and quantity information available to market participants immediately 4 Reliable price and quantity information is available prior to the next market clearing 3 Price information is available but no timely quantity information 2 Price and quantity information are inaccurate, lagged or available to only a few 1 No information available Data Available Yes Yes Yes 109

112 POST-HARVEST MARKETS & MARKET INSTITUTIONS Number of Buyers This measure is an indicator of relative market power. If the market is dominated by a single (or very few) buyers or sellers, price will favor the side with greater market power. Typical number of buyers of ex-vessel product in a given market: 5 Highly competitive buyers competing buyers 2 A small number of coordinating buyers 1 There is one buyer There are usually more sellers than buyers at the primary level, but this may not always hold. The measure does not distinguish between fisheries with different absolute number of buyers. For example, fisheries with 100 sellers and 10 buyers and 1 seller and 10 buyers both have a 10:1 ratio, but might have much different market power levels. Data Available Yes Yes Yes Monotonic Yes if There are More Sellers than Buyers Yes if There are more Sellers than Buyers Yes if There are more Sellers than Buyers 110

113 POST-HARVEST MARKETS & MARKET INSTITUTIONS Degree of Vertical Integration Vertical integration facilitates the flow of information from the consumer to the harvest sector and tends to reduce transaction costs between market levels. Proportion of harvest where the primary harvester and primary processor/distributor are same firm. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table: 5 Virtually all % % % 1 Virtually none This may reduce competition and undermine innovation. Data Available Yes Maybe Maybe Monotonic Not Necessarily Not Necessarily Not Necessarily 111

114 POST-HARVEST MARKETS & MARKET INSTITUTIONS Level of Tariffs Lower tariffs broaden the market, improve price discovery, and increase the opportunity to create wealth. Based on quintile once data on an appropriate number of systems are collected. However, initially tariff rate on key seafood exports relative to international average for food commodities. Bin boundaries can be established by quintile once data is collected on many fisheries. For the pilot studies, the boundaries will be coarsely established by the following table (based on World Development Indicators 2005 Table 6.3, average 2003 tariff for food from low-income countries to OECD countries is 4.1%): 5 Virtually none 4 0.5%-2.5% % 2 5%-10% 1 Over 10% Data Available Yes Yes Yes 112

115 POST-HARVEST MARKETS & MARKET INSTITUTIONS Level of Non-tariff Barriers Lower non-tariff barriers broaden the market, improve price discovery, and increase the opportunity to create wealth. Nontariff barriers include: quantity restrictions (import quotas), regulatory restrictions, investment restrictions, customs restrictions and direct government intervention: 5 Are not used to limit international trade 4 Have very limited impact on international trade 3 Act to impede some international trade 2 Act to impede a majority of potential international trade 1 Act to effectively impede a significant amount of international trade Data Available Possibly, but Difficult to Measure Possibly, but Difficult to Measure Possibly, but Difficult to Measure 113

116 POST-HARVEST INFRASTRUCTURE International Shipping Service In order to have access to a broader market, competitively priced international shipping is essential. Average of the two measures below: 5 Ocean shipping services are readily available at lower than average rates 4 Ocean shipping services are readily available at average rates 3 Ocean shipping services are readily available at higher than average rates 2 Ocean shipping services are available but irregular 1 International shipping is not available at reasonable rates 5 Air shipping services are readily available at lower than average rates 4 Air shipping services are readily available at average rates 3 Air shipping services are readily available at higher than average rates 2 Air shipping services are available but irregular 1 International shipping is not available at reasonable rates Data Available Yes Yes Yes 114

117 POST-HARVEST INFRASTRUCTURE Road Quality Index The quality of roads is directly related to the ability of firms to distribute their products, minimize transportation cost and create wealth. Mile-weighted average road quality between the fishery s primary port and its major consumption center (or export shipping port for exported product). Score according to: 5 High-quality paved roads and extensive highways 4 Primarily paved two-lane roads and moderate highway 3 Primarily paved two-lane roads and minimal highway 2 Paved two-lane roads and well-graded gravel roads 1 Poorly maintained gravel or dirt roads It may be that wealth is not maximized by accessing the current primary market, but road quality prevents accessing the higher-value market. Data Available Yes Yes Yes 115

118 POST-HARVEST INFRASTRUCTURE Technology Adoption The availability of the latest communication, processing and production technology is important for firms to maintain global competitiveness and create wealth. 5 Cell phones/fish finders/computers/processing/production technology are readily available 4 Cell phones/fish finders, etc. are common, but some other technology is not always available 3 Cell phones/fish finders, etc. are common, but some other technology is difficult to obtain 2 Cell phones are common, but most other technology is prohibitive 1 Very little advanced technology is accessible for the industry Data Available Yes Yes Yes 116

119 POST-HARVEST INFRASTRUCTURE Extension Service Extension services are successful in many countries for transferring technology and information about best management practices, new technology, market conditions and regulatory changes. This information is often essential in a widely dispersed industry to help maximize returns and generate wealth. 5 Broad extension service with field offices and close linkage with research community 4 Extension service with moderate field coverage and adequate linkage with the research community 3 Extension service, but with weak links to the research community 2 Minimal, poorly supported extension service 1 No extension service Difficult to define and measure extension service. Data Available Yes Yes Yes 117

120 POST-HARVEST INFRASTRUCTURE Reliability of Utilities/Electricity Reliable utilities are essential for firms to function efficiently and generate wealth. 5 Electricity readily available with rare outages 4 Electricity readily available with less than six short outages per year 3 Electricity readily available with less than two outages per month 2 Electricity readily available with more than two outages per month 1 Electricity is not available except through generators Data Available Yes Yes Yes 118

121 POST-HARVEST INFRASTRUCTURE Access to Ice & Refrigeration Ice/refrigeration is essential for quality control and broadening the market. 5 Ice is readily available in various forms 4 Ice is readily available in various forms with occasional shortages 3 Ice is available in limited quantity/form (e.g., block only) 2 Ice is available in very limited quantity/form 1 Ice is unavailable Data Available Yes Yes Yes 119

122 REFERENCES Anderson, J.L Sustainable Aquaculture: What Does it Mean and How Do We Get There? Species & System Selection for Sustainable Aquaculture. PingSun Leung, Cheng- Sheng Lee, and Patricia J. O Bryen, eds., pp Ames, IA and Oxford, UK: Blackwell Publishing. Anderson, J.L Aquaculture and the Future: Why Economists Should Care. Marine Resource Economics 17(2): The Economist Grabbing it All. January 3-9: Esty, D.C., C. Kim, T. Srebotnjak, M.A. Levy, A. de Sherbinin, and V. Mara Environmental Performance Index. New Haven, CT: Yale Center for Environmental Law and Policy and New York, NY: Columbia University. Kaufman, D., A. Kraay, and M. Mastruzzi Governance Matter VII: Aggregate and Individual Governance Indicators Washington, DC: The World Bank. Knapp, G Challenges and Strategies for the Alaska Salmon Industries. ISER, University of Alaska, Anchorage. Marine Stewardship Council < Miller, T. and K. Holmes Index of Economic Freedom. The Heritage Foundation/Wall Street Journal and < The Fish Stock Sustainability Index < The World Bank. 2009a. Doing Business 2010: Reforming through Difficult Times. Palgrave Macmillan. The World Bank. 2009b. World Development Indicators < 5285~menuPK: ~pagePK: ~piPK: ~theSitePK:239419,00.html>. The World Bank The Sunken Billions: The Economic Justification for Fisheries Reform. Agriculture and Rural Development. Washington, DC. Transparency International Corruption Perceptions Index 2009 < 120

123 Appendix Test Cases: Alaska Salmon New England Groundfish Guyana Fisheries 121

124 INTRODUCTION This appendix contains three test cases: Alaska Salmon (five species), New England Groundfish (fifteen species), and Guyana Fisheries (more than twenty species). The cases provide valuable illustrations of the effectiveness of the indicators in characterizing wealthbased management systems for each fishery sector. Each case consists of a brief profile of the fishery s core characteristics followed by a summary of the Fishery Performance Indicators (measuring wealth) and the Fishery Performance Factors (wealth enabling inputs). The cases were chosen to demonstrate potential value and the versatility of the Indicators. All of the fisheries differ substantially in their management systems, market conditions, community characteristics, and infrastructure. As will become evident in the sections that follow: The Fishery Performance Indicators show that Alaska Salmon fisheries are performing well in terms of fish stock health and the environment a necessary condition for sustainable wealth. However, the effectiveness/efficiency of harvest sector, harvest, and post-harvest assets are clearly underperforming, and risk in the fishery is high. These conditions undermine the ability of the Alaska salmon fisheries to attain their wealth-generating potential. The Fishery Performance Indicators provide evidence that New England Groundfish fisheries are doing moderately well creating wealth in terms of market conditions, return for owners of the processing and distribution components, and the performance of the processing and support sector. However, in terms of fish stock health and environment and the effectiveness/efficiency of the harvesting sector, the performance is poor. The Fishery Performance Indicators clearly demonstrate that Guyana fisheries (based on primary data collected there in 1995) are not performing to an acceptable standard in the creation of wealth in any dimension. 122

125 Profile: Alaska Salmon Management Areas: Nine Southeast, Prince William Sound, Cook Inlet, Bristol Bay, Kodiak, Chignik, Alaska Peninsula, Kuskokwim, and Yukon. Species: Five (5) targeted species and hundreds of distinct stocks: pink (or humpy) salmon, chum (or dog) salmon, sockeye (or red) salmon, coho (or silver) salmon and Chinook (or king) salmon. Fishing Methods: Pink salmon are harvested primarily by purse seines. Chum salmon are harvested primarily by gillnet and purse seine fleets. Sockeye salmon are harvested primarily by gillnets, or in some cases, purse seine. Coho salmon are harvested by troll and net fisheries, and Chinook salmon are harvested commercially by troll and net fisheries Harvest Million Pounds (ADF&G, 2009) Ex-vessel Value Million US$ (ADF&G, 2009) Average Exvessel Price per Pound (ADF&G, 2009) Salmon from Hatcheries (%) Pink salmon $103.4 $ % Sockeye salmon $190.6 $ % Chum salmon $ 87.1 $ % Coho salmon 35.4 $ 45.2 $ % Chinook salmon 5.6 $25.6 $ % Total $452.0 $ % Source: White, 2009 < > Value: Alaska wholesale value was approx. US$1.03 billion (34% canned; 38% headed & gutted; 10% fillet, etc.; 18% roe by value) < Export value approximately US$770 million < The majority of Alaska salmon is exported. Alaska Salmon Management: The following is a summary of the basic structure of the Alaska fisheries management approach, as found on the Alaska Department of Fish & Game website. The direct quote is as follows: The Alaska State Constitution establishes, as state policy, the development and use of replenishable resources, in accordance with the principle of sustained yield, for the maximum benefit of the people of the state. In order to implement this policy for the fisheries resources of the state, the Alaska Legislature created the Alaska Board of Fisheries (BOF) and the Alaska Department of Fish and Game (ADF&G). The BOF was given the responsibility to establish regulations guiding the conservation and development of the state s fisheries resources, including the 123

126 distribution of benefits among subsistence, commercial, recreational, and personal uses. The ADF&G was given the responsibility to implement the BOF s regulations and management plans through the scientific management of the state s fisheries resources. Scientific and technical advice is also provided by the ADF&G to the BOF during its rule-making process. The separation of rule-making and in-season management responsibilities between these two entities is generally regarded as contributing to the success of Alaska s fisheries management system. The division s fishery management activities fall into two categories: in-season management and applied science. The division works closely with the Division of Sport Fisheries in the conduct of both management and research activities. For in-season management, the division deploys a cadre of fishery managers near the fisheries. These individuals have broad authority to open and close fisheries based on their professional judgment, the most current biological data from field projects, and fishery performance. Research biologists and other specialists conduct applied research in close cooperation with the fishery managers. The purpose of the division s research shop is to ensure that the management of Alaska s fisheries resources is conducted in accordance with the sustained yield principle and that managers have the technical support they need to ensure that fisheries are managed according to sound scientific principles and utilizing the best available biological data. < This is a limited entry fishery, and in 2008 there were 7,472 permit holders. Twenty-six (26) percent of the permits are held by non-residents, and 35 percent of the harvest earnings accrue to non-residents (CFEC, Permits and Permit Holders, 2009, Gear and vessel characteristics are determined by regulation. Permits are transferable with restrictions. The rights permit access to the fishery. They are not a harvest right, such as a quota or catch share. Alaska salmon harvest is also enhanced by 35 hatcheries (1 state, 3 federal and 31 private non-profit). Approximately one third of Alaska salmon originates from hatcheries < The limited entry program and hatcheries have contributed to the growth in salmon harvest illustrated below. 124

127 Source: < Certification: The Alaska salmon fishery is certified as sustainably managed by the Marine Stewardship Council. Overfishing: No stocks of Alaska salmon are considered overfished. 125

128 Fishery Performance Indicators: The graph below (based on data found in Table A.1) illustrates the average indicator scores for the Alaska salmon fishery management system. Alaska salmon receives high scores for fish stock and environmental performance. (Note: a score of 5 does not imply that there is no room for improvement; it simply means that all the indicators for the dimension were in the highest group). Alaska receives marginally acceptable scores for market performance and for owners of the processing and distribution component. However, all other indicators suggest there is room for substantial improvement. The performance of assets in the harvest and post-harvest sectors is weak, the harvest is inefficient, and risk is relatively high. Source: Table A.1. Note: Scores below 3.5 indicate that there is room for substantial improvement. 126

129 Fishery Performance Factors (Wealth Enabling Inputs): Formal analysis of the relative magnitude and functional relationship between the Fishery Performance Factors (wealth enabling inputs) and the Fishery Performance Indicators (wealth measures) will be the subject of additional study once more data are collected. However, from the graph below (based on data found in Table A.2), it is clear that Alaska receives high scores for Macro Factors (such as economic freedom, environmental performance, lack of corruption, good governance, and political stability) and has considerable fishery management inputs (expenditures and personnel). Access rights, markets institutions, infrastructure, and collective action receive mid-range scores. Harvest rights, such as individual or community quotas or catch shares, are not formally defined. Source: Table A

130 Profile: New England Groundfish Management Areas: There several areas in the Northwest Atlantic Region Georges Bank, Gulf of Maine, Cape Cod, and Southern New England/Mid-Atlantic. Species: Fifteen (15) targeted species: Atlantic cod, haddock, pollock, yellowtail flounder, witch flounder, windowpane flounder, American plaice, Atlantic halibut, redfish, ocean pout, wolffish, white hake, silver hake (whiting), red hake, and offshore hake. Fishing Methods: The majority of the Federal fishery (3-200 miles offshore) is pursued by foot trawlers towing large mesh nets (6 + inches). Vessels will make 3- to 7-day trips to the most fertile fishing grounds. Whiting, red hake, and offshore hake are managed separately, as a small mesh fishery. Smaller operators will use gillnets, hook gear, or traps Harvest Ex-vessel Value Average Ex-vessel Million Pounds Million US$ Price per Pound Atlantic cod 17.8 $26.9 $1.51 Haddock 13.8 $16.1 $1.17 Winter flounder 4.7 $8.8 $1.86 Pollock 15.5 $7.9 $0.51 Summer flounder 2.3 $7.1 $3.02 Yellowtail flounder 3.6 $5.3 $1.49 Other 19.2 $19.6 $1.02 Total 34.9 $91.7 $1.19 Source: < Source: Johnston, R. and J.G. Sutinen One Last Chance: The Economic Case for a New Approach to Fisheries Management in New England. Pew Environment Group, Washington, DC. 128