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On High Seas? - Australia's Fishing Industry
Georgina McGill
Science, Technology, Environment and Resources Group
Size of Industry
Fishing is a major primary industry, with a gross value of production (GVP)
in 1994-95 of $1744 million, mostly comprising high-value species such as
rock lobster, prawns, abalone and scallops. Production volume is relatively
small by world standards: Australia was ranked fifty-fourth in 1992-3 with
218339 tonnes.(1) About 70 percent of the industry revenue is derived from
exports ($1367 million in 1994-95). Our major markets are Japan (41% by
value), Hong Kong (20%) and Taiwan (15%).(2)
Figure 1. Source: ABARE statistics
Strong growth in the value of seafood exports over recent years has
been due to two major factors: exchange rates and growth in the value
of live and other high quality fresh seafood.(3) The value of live, fresh
or chilled rock lobster grew from $159 million in 1992-93 to $246 million
by 1994-95, despite a decline in total production from 13600 to 12389
tonnes.(4) Similarly, the value of whole fresh or chilled tuna nearly
doubled, from $4 million (for 613t) in 1992-93 to $19.6 million (1599t)
in 1994-95. According to one view, potential for further growth in the
'live, fresh' trade exists, but is dependent on Australia maintaining
and developing its reputation as a 'clean' producer.(5) The Australian
dollar has been weak relative to the Japanese yen, making our exports
more attractive in that market. However, it is expected that strengthening
of the Australian dollar in the short term, in addition to relatively
weak demand and high availability on the Japanese market, will reduce
returns for producers in 1995-96.(6)
Australia also imports a significant volume of fish products, mainly
in the form of canned fish, frozen fillets and prawns (either fresh, chilled
or frozen). The value of imports in 1994-95 was almost $666 million.(7)
The value of imports has risen by 25 percent since 1992-93 ($529 million).
Future directions
While the value of catch has increased, production tonnage has been
declining over the last few years (see Figure 2, below. See also Research
Note No. 57, How Many Fish in the Sea?).(8) How much of the reduced
production is due to decline in fish stocks or other factors is unknown.
Part of the decline is due to quotas introduced in some of the Commonwealth
fisheries to reduce fishing to sustainable levels: twenty-two of the around
one hundred commercially fished species (in all fisheries) are considered
to be in the category 'heavily to fully exploited' and nine are 'overexploited'.(9)
Although some fisheries have been identified as 'underexploited' there
is little expectation that there will be much increase in the total landed
catch.(10) This means that the industry must continue to focus on improving
the marketing, handling, processing and packaging of products for higher
returns.
Figure 2. Source: ABARE statistics
Key issues
At the present time the fishing industry is facing the major challenge
of maintaining or increasing profitability when there is little likelihood
of increase in production tonnage and possibly a decline. Restructuring
to reduce excess capacity and overcapitalisation is one option. Overcapitalisation
and the concomitant overcapacity is a feature of the fishing industry
generally. Global attention is currently being focussed on the question
of how to restructure.
Initially a result of open access (unrestricted entry) and then of fisheries
management measures aimed solely at conservation of fish stocks, fleet
overcapacity has forced fisheries managers to consider tools aimed at
the twin objectives of stock conservation and maximising economic efficiency.(11)
Conservation measures in isolation, such as limited entry to a fishery
and restricted seasons, can encourage economic inefficiency by providing
an incentive for investment in boats and equipment for competitive advantage,
which then lay idle for long periods after season closure or which have
capacity in excess of that required for sustainable fishing.
One tool which has been increasingly used in fisheries management to
conserve stocks and encourage economic efficiency is the 'individual transferable
quota', or ITQ.
Individual transferable quotas
The ITQ is allocated to a licensee as either a portion of the total
allowable catch (TAC) or as a set number of tonnes. Rational capital expenditure
on boats and equipment in accordance with income expectations is encouraged
in this way. Necessary to effective quota management, however, is the
determination of the correct quota limit, which requires considerable
knowledge.
Limitations of ITQs
Smooth adjustment of fleet capacity is dependent on efficient, unrestricted
markets. Since overcapacity is a feature of nearly all fisheries there
is hardly a market for underutilised equipment. In addition, the small
number of quota-managed fisheries implies a fledgling or non-existent
market for quotas, so that even if they are transferable they are not
necessarily able to be sold by the 'less efficient' fishermen. Limited
alternative employment opportunities for those wishing to leave the industry
compounds the problem.
Unresolved issues concerned with the ITQ remain-such as its applicability
in a multi-species fishery, i.e., what should be done about 'bycatches'
(species caught other than the targeted species); 'highgrading' (throwing
back lower value species, often dead); and the high costs of monitoring,
surveillance and research (vital for effective TACs). Enforcement is also
an issue, when species with quota restrictions in a Commonwealth fishery
can be caught in State waters where no quota restriction applies.
Fisheries management
The Commonwealth and the States have shared responsibility for management
of our fisheries resources since federation. The cumbersome effect of
multiple licences and laws in a fishery has led to the introduction of
Offshore Constitutional Settlement arrangements (OCS) between the
States and the Commonwealth, where a single jurisdiction, either State
or Commonwealth, applies to a fishery. OCS arrangements for some fisheries
have currently been negotiated between the Commonwealth and Western Australia,
the Northern Territory and Queensland; have not yet been finalised with
South Australia, Victoria and Tasmania; and have been delayed with New
South Wales.
Foreign fishing vessels
Australia has an international obligation under the United Nations Convention
on the Law of the Sea (UNCLOS), which was ratified in 1982, to allow foreign
vessels to harvest resources not taken by domestic fishermen. The fishing
capacity of domestic fleets and the possible impacts of foreign fishing
on local industries are considered before any foreign access agreements
are approved. Management and access fees for the right to fish in Australian
waters are charged.
Figure 3. Source: ABARE statistics.
Endnotes
- FAO, The State of World Fisheries and Aquaculture, Rome 1995,
p.52.
- ABARE, Australian Fisheries Statistics 1995, p.31, derived
from Table 22, in 1994-95. Not including live exports.
- Battaglene, T., Standen, R. and Smith, P., "Fisheries Outlook"
in Outlook '96, Canberra 1996, p.208
- ABARE, op.cit., Table 18, p.25.
- Battaglene, T., et. al., ibid. p.208.
- Battaglene, T., et al., ibid, p.209.
- ABARE, ibid. p.37.
- ABARE, ibid. pp.8-10. In 1992-93 production was 245,777 tonnes;
in 1994-95 production was 218,273 tonnes.
- Kailola, P., et al., Australian Fisheries Resources, Canberra
1993, pp 404-7.
- Kailola, P., et al., ibid, p.2.
- For fuller explanation see DPIE, New Directions for Commonwealth
Fisheries Management in the 1990s A Government Policy Statement
December 1989, AGPS Canberra 1989 pp.16-26
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