australian fisheries economic indicators report...

Australianfisherieseconomicindicatorsreport2014Financial and economic performance of the Eastern Tuna and Billfish Fishery AndreaBath,MaggieSkirtunandRichardGreen

Research by the Australian Bureau of Agricultural

and Resource Economics and Sciences

April 2016

ii

©CommonwealthofAustralia2016

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Cataloguingdata

Bath,A,Skirtun,M&Green,R2016,Australianfisherieseconomicindicatorsreport2014:financialandeconomicperformanceoftheEasternTunaandBillfishFishery,ABARES,Canberra,April.CCBY3.0.

ISSN2204‐9444ISBN978‐1‐74323‐284‐2ABARESproject43351

Internet

Australianfisherieseconomicindicatorsreport2014:financialandeconomicperformanceoftheEasternTunaandBillfishFisheryisavailableatagriculture.gov.au/abares/publications.

AustralianBureauofAgriculturalandResourceEconomicsandSciences(ABARES)

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TheAustralianGovernmentactingthroughtheDepartmentofAgricultureandWaterResources,representedbytheAustralianBureauofAgriculturalandResourceEconomicsandSciences,hasexercisedduecareandskillinpreparingandcompilingtheinformationanddatainthispublication.Notwithstanding,theDepartmentofAgricultureandWaterResources,ABARES,itsemployeesandadvisersdisclaimallliability,includingfornegligenceandforanyloss,damage,injury,expenseorcostincurredbyanypersonasaresultofaccessing,usingorrelyinguponinformationordatainthispublicationtothemaximumextentpermittedbylaw.

Acknowledgements

TheABARESfisheriessurveyprograminvolvesthecooperativeeffortofindustry,fisheriesmanagement,agenciesandABARESstaff.

Industry—ABARESsurveysarevoluntary,sothecooperationofEasternTunaandBillfishFisheryfishingoperatorsandtheiraccountantsinprovidingdataisessentialforthesuccessofthefisheriessurveys.Withoutthisassistancethesurveyswouldnotbepossible.

Managementagencies—theAustralianFisheriesManagementAuthority(AFMA)providedlogbookandaddressdata,aswellasfisherymanagementcostsandgeneralinformationaboutthesurveyedfisheries.CommentsbyAFMAonearlierdraftsarealsogratefullyacknowledged.

ABARESstaff—sampledesignandestimationwasundertakenwithassistancefromLindsayPenrose,BelindaBarnesandMarkChambers.PatriciaHobsbawnandRupertSummersonhelpedinprovidingthenecessarydataandmaps.RobertCurtotti,IlonaStobutzkiandPeterGoodayprovidedcomments.

TheDepartmentofAgricultureandWaterResourcesfundedthisreportthroughtheFisheriesResourcesResearchFundandABARES.

Australianfisherieseconomicindicatorsreport2014:EasternTunaandBillfishFishery

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Contents

Summary 1

Keyresults 1

1 Introduction 4

2 Background 6

Descriptionofthefishery 6

Keyeconomictrends 7

Currentmanagementarrangements 7

DemographicprofileoffishersoperatingintheETBF 10

3 Financialandeconomicperformance 11

Financialperformance 11

Economicperformance 14

4 Otherkeyperformanceindicators 16

Productivity 16

Termsoftrade 17

Managementcosts 17

Entitlementvalues 19

Quotalatency 19

5 Performanceagainstmanagementobjectives 20

AppendixA:Surveydefinitions 21

Financialperformance 21

Neteconomicreturns 22

Survey‐basedestimationofneteconomicreturns 23

Neteconomicreturnsandeconomicperformance 24

AppendixB:Surveymethods 25

AppendixC:Non‐surveybasedestimationofneteconomicreturns 28

AppendixD:Productivityandtermsoftrademethodology 31

Productivitymeasurement 31

Termsoftrademeasurement 31

Data 31

References 34


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Tables

Table1Keyfinancialperformanceresults,EasternTunaandBillfishFishery 2

Table2Keyeconomicperformanceresults,EasternTunaandBillfishFishery 2

Table3Financialperformanceofboatsoperating,EasternTunaandBillfishFishery 12

Table4Fisherycashprofitandneteconomicreturns,EasternTunaandBillfishFishery 14

Table5EstimatedmarketpriceofindividualquotaSFRs,EasternTunaandBillfishFishery 19

TableC1Regressionmodelforaveragecashreceipts,EasternTunaandBillfishFishery 29

TableC2Regressionmodelforaverageoperatingcosts,EasternTunaandBillfishFishery 29

Figures

Figure1Landedcatchofkeyspecies,EasternTunaandBillfishFishery,1998–99to2013–14 8

Figure2Realgrossvalueofproduction,EasternTunaandBillfishFishery,1998–99to2013–14 8

Figure3Exchangerateandrealunitprice,EasternTunaandBillfishFishery,1998–99to2013–14 8

Figure4Realneteconomicreturns,EasternTunaandBillfishFishery,1998–99to2013–14 9

Figure5Numberofvesselsoperating,EasternTunaandBillfishFishery,1998–99to2013–14 9

Figure6Keymanagementchanges,1995–96to2013–14 9

Figure7Trendsinkeyfinancialperformancevariables,EasternTunaandBillfishFishery,2002–03to2012–13 13

Figure8Trendsineconomicreturns,EasternTunaandBillfishFishery,2002–03to2013–14 15

Figure9Productivityindexes,EasternTunaandBillfishFishery 16

Figure10Inputcostandoutputpriceindexes,EasternTunaandBillfishFishery 17

Figure11Totalmanagementcosts,EasternTunaandBillfishFishery 18

Figure12AveragemanagementcostperactivevesselandasashareofGVP,EasternTunaandBillfishFishery 18


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Maps

Map1Relativefishingintensity,EasternTunaandBillfishFishery,2014 6

Boxes

Box1Economicindicatorsinfisheriesmanagement 5

BoxD1Fisherindex 32


1

Summary ABARESsurveysofCommonwealthfisheriesprovideinsightsintothedriversoffisheryeconomicandfinancialperformanceandhowmanagementandpolicychangesinfluencethis.ThisreportprovidesinformationaboutthefinancialandeconomicperformanceoftheEasternTunaandBillfishFishery(ETBF).Survey‐basedresultsarepresentedfor2011–12and2012–13;preliminarynon‐surveybasedresultsarepresentedfor2013–14.

TheETBFisamultispeciesfisherythatoperatesinwatersfromCapeYorktotheVictoria–SouthAustraliaborder,encompassingwatersaroundTasmaniaandthehighseasofthePacificOcean.Manyofthespeciescaughtinthefisheryareinternationallyshared,withAustralia’sdomesticmanagementarrangementsconsistentwithAustralia’scommitmentstotheWesternandCentralPacificFisheriesCommission(WCPFC).ThemajorityofthecatchistakenalongtheQueenslandandNewSouthWalescoast.ThekeylandingportsforthefisheryareMooloolaba,Bermagui,Cairns,CoffsHarbour,SouthportandUlladulla.Thefisherypredominatelyusespelagiclonglinetotargettunaspecies(mainlyyellowfin,bigeyeandalbacoretuna),swordfishandstripedmarlin.Inthe2013–14financialyeartheETBFgeneratedagrossvalueofproductionof$31.2million,makingitthesecondhighestvaluedCommonwealthtunafisheryaftertheSouthernBluefinTunaFishery.

Neteconomicreturns(NER)isthekeyperformanceindicatorinthesereportsandismeasuredatthefisherylevel.Itmeasurestheeconomicreturnearntbythefisheryassumingallresourcesusedinfishingactivities,includingfamilylabouranduseofthefishingoperator’sboatcapital,andthecostofmanagingthefisheryarepaidfor.AccordingtotheFisheriesManagementAct1991,theAustralianFisheriesManagementAuthority(AFMA)isrequiredtopursuethemaximisationoftheneteconomicreturnstotheAustraliancommunitythroughmanagingCommonwealthfisheries(AFMA2014).InterpretationofNERtrendsandtheothereconomicindicatorspresentedinthisreportcanassistinassessingAFMA’sperformanceagainstthisobjective.

TheeconomicperformanceoftheETBFhasimprovedsubstantiallysincetheearly2000s.Fromnegativelevelsin2003–04,NERsteadilyincreasedtobecomeslightlypositivein2010–11,thefirsttimesince2000–01.Thispositivechangewasdrivenprimarilybyimprovedproductivityofthefleet,andreducedoperatingcosts.TheexitoflessefficientvesselsfromthefisheryfollowingtheimplementationoftheSecuringourFishingFuturestructuraladjustmentpackagebetween2005and2006,wouldassistinreducingcostsforremainingvesselsbutachangeincatchcompositiontowardhigherunitvaluespeciesalsoplayedaroleinimprovingreturns.NERremainedpositivefrom2011–12to2013–14butdeclinedin2012–13and2013–14tolevelsthatwereonlyslightlypositive.ThedecreaseinNERfrom2011–12to2012–13wasprimarilydrivenbyhigherfuelprices.

KeyresultsInthissurvey,thesurveypopulation—definedasvesselsthatrecordedmorethanonetonneofcatch—was47vesselsin2011–12and41vesselsin2012–13.Fromthispopulation,17vesselsweresurveyedfor2011–12and14vesselsfor2012–13,representing36percentofthepopulationin2011–12and34percentin2012–13.


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Financialperformance ProfitabilityfortheaverageETBFoperatorwaspositivein2011–12and2012–13.Profit

atfullequity,aprofitindicatorthatassumesallassetsarefullyownedbyoperators,declinedfortheaverageboatinthefisherybetween2011–12and2012–13,from$139612to$86492(Table1).Therateofreturntofullequitydeclinedfortheaverageboatinthefisherybetween2011–12and2012–13,from9percentto7percent.

Thedeclineinprofitatfullequitywaslargelyaresultofhighertotalcashcosts,drivenbyincreasedspendingonfuel.

Table 1 Key financial performance results, Eastern Tuna and Billfish Fishery

Vessel‐levelaverage

Category Unit 2011–12 2012–13

Totalcashreceipts $ 1025752 1048354

Totalcashcosts $ 892325 970647

Boatcashincome $ 133428 77706

–lessdepreciation $ 33232 32269

Boatbusinessprofit $ 107568 45702

–plusinterest,leasing,rent $ 32044 40791

Profitfullequity $ 139612 86492

Rateofreturntofullequity % 9 7

Economicperformance Neteconomicreturns(includingmanagementcosts)forthefisheryfellfrom$2.9million

in2011–12to$0.2millionin2012–13(Table2).

Lowerneteconomicreturnsin2012–13weremainlyaresultofalargerdeclineinfishingincomerelativetofallingfishingcosts,reflectinglessvesselsoperatinginthefisheryin2012–13.

In2013–14thepreliminaryNERwereestimatedtofallfurtherto$0.1million.

Table 2 Key economic performance results, Eastern Tuna and Billfish Fishery

Totalfishery

Category Unit 2011–12 2012–13 2013–14p

Fishingincome $m 43.9 38.6 39.3

Operatingcosts $m 38.7 36.4 37.7

Fisherycashprofit $m 5.2 2.2 1.6

–lessownerandfamilylabour,opportunitycostofcapitalanddepreciation

–plusinterest,leasingandmanagementfees

Netreturn(excludingmanagementcosts) $m 4.6 1.9 1.6

Netreturn(includingmanagementcosts) $m 2.9 0.2 0.1

p Preliminary.


3

Otherindicators

Totalfactorproductivityanalysis(2002‐‐03to2012–13)showsincreasingproductivitybyanannualaverageof4percent.

Thetermsoftradeindex,anindicatormeasuringtheleveloffisheryoutputpricescomparedwithinputcostsfacedbyfishers,declinedovertheperiod2002‐‐03to2012–13,withtheindexfallingby21percent.ThishadamoderatingeffectonthelevelofNERearntfromthefisheryandincreasedtheemphasisonachievingproductivityimprovementsfromthefleet.

Realtotalmanagementcostsforthefisheryincreasedfrom1997–98to2003–04,peakingat$4.3millionin2003–04,thendeclinedto$1.5millionby2013–14.Thedeclineintotalmanagementcostsafter2003–04supportedthepositiverisingtrendinNERandresultedinmanagementcostsasashareofgrossvalueofproductiondeclining,from11percentin2005–06to5percentby2013–14.Realmanagementcostsperactivevesselinthefisheryalsodeclined,from$64051in2007–08to$38568by2013–14,withlowertotalmanagementcostsmorethanoffsettingthedeclineinthenumberofvesselsinthefishery.

Managementthroughtotalallowablecommercialcatch(TACC)limitsandindividualtransferablequotas(ITQs)commencedin2011.Landedcatchasaproportionoftotalallowablecatchvariedfromanaverageof30percentto79percentacrossthespeciescaughtinthefisheryoverthe2011to2014fishingseasons,indicatingasignificantlevelofquotalatencyforthefishery.Thehighdegreeofquotalatencysuggeststhatthefisherymaybeoperatingclosetoanopenaccesspoint,whichlowersthelikelihoodofmaximisingNERoverthelongterm.

Implicationsformanagement

RecenttrendsinthefisheryshowimprovementsinindicatorsofNER,financialperformance,productivityandmanagementcosts.Thissuggestsmovementtowardsthefishery’sobjectiveofmaximisingneteconomicreturnstotheAustraliancommunity.However,inthissurveyneteconomicreturnsareestimatedtohavedeclinedin2012–13and2013–14.Ifreturnsdeterioratefurther,managersmayneedtoconsideradjustmentstomanagementarrangementstoimproveeconomicperformanceofthefishery.

FromMarch2011outputcontrolswereintroducedforfivekeytargetspeciesintheformofTACCsandallocatedasITQstofishersthatwereoperatinginthefishery.Thishasprovidedfishersgreaterflexibilitytofishwithamoreefficientcombinationofinputs.Thetransferabilityoffishingrightshasalsoallowedquotatobeallocatedtomoreefficientoperators.However,thesuccessofoutputcontrolsdependsonsettinglevelsofTACCsthatmeetthemanagementobjective.Inthecontextofinternationallysharedstocks,settingTACCsatlevelsthatmaximiseNERiscomplicatedbyuncertaintyaroundthecatchofotherjurisdictions.Withinthiscontext,adjustmentstoTACCsettingsmayneedtobeconsideredbymanagersifeconomicperformanceofthefisherydeterioratesfurther.


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1 Introduction ABAREShasundertakenregularsurveysofkeyCommonwealthfisheriessincetheearly1990s.Theresultingdataareusedtoassessthefinancialperformanceofoperatorsinthefisheryandtheeconomicperformanceofthefisheryasawhole.Bothperformancemeasuresactasimportantindicatorsforfisherymanagers(Box1).Inthisreport,survey‐basedresultsarepresentedfor2011–12and2012–13;preliminarynon‐surveybasedresultsarepresentedfor2013–14.Toprovideamorecomprehensiveassessmentoffisherylevelperformance,ABARESexpandedtheformerAustralianFisheriesSurveysreportseriesin2013toincludearangeofeconomicindicatorsthatdrawondatacollectedfromthesurveys.

Adistinctionismadethroughoutthereportbetweenthetwoprimaryindicators:financialperformanceandeconomicperformance.Financialperformanceestimatesarecalculatedfortheaverageboatinafisheryandincludeallcashreceiptsandcashcoststhathavebeenearnedandincurredwithinthesurveyperiod.Theseestimatesreflecttheaverageboat’sprofitandlossstatementforallbusinessactivities,includingcaseswhereboatshaveoperatedinseveralfisheries.

Thekeyindicatorofeconomicperformancepresentedisneteconomicreturns(NER),whichisreportedatthefisherylevel.TheNERestimatesdifferfromfinancialperformanceestimatesbecausetheyrelateonlytothesurveyedfishery;resultsexcluderevenuesandcostsattributabletooperatinginotherfisheriesandincludeothereconomiccostssuchastheopportunitycostofcapitalandtheopportunitycostoflabour.FordefinitionsofthesecostsseeAppendixA.

Otherindicatorsalsoproviderelevantinformationonperformance.Vessel‐levelfinancialperformanceinformationprovidesacontextfordeterminingtrendsinthesurveyedfishery;forexample,positivefinancialprofitsattheboatlevelmayrevealhowoperatorscontinuetooperateinafisherythathasexperiencednegativeeconomicreturns.Theseestimatesarerelevanttoallindustryoperators,enablingthemtocomparetheirindividualperformancewiththatoftheaverageboat.Otherindicatorsincludedareproductivityindexes,termsoftradeanalysis,entitlementvalues,managementcostsandlatency.

TheestimateofNERindicatestheeconomicreturntosocietyassociatedwithharvestingthefisheryresource.AccordingtotheFisheriesManagementAct1991,theAustralianFisheriesManagementAuthority(AFMA)isrequiredtopursuethemaximisationofneteconomicreturnstotheAustraliancommunitythroughmanagingCommonwealthfisheries(AFMA2014).AlthoughestimatesofNERdonotrevealhowafisheryhasperformedrelativetomaximumpotentialNER(maximumeconomicyield)inagivenperiod,interpretationofNERtrendstogetherwithothereconomicindicatorscanassistinassessingAFMA’sperformanceagainstthisobjective.Forexample,aperiodofrisingNERthatisstronglylinkedtoproductivitygrowthimpliesthatMEYisbeingapproached.


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Box 1 Economic indicators in fisheries management

InSeptember2007theAustralianGovernmentreleasedtheCommonwealthFisheriesHarvestStrategyPolicytoprovideguidelinesforsustainableandprofitablemanagementofCommonwealthfisheries.ThepolicyaimstomaintainkeycommercialstocksatecologicallysustainablelevelsandmaximiseeconomicreturnstotheAustraliancommunitybytargetingmaximumeconomicyield(MEY)(DAFF2007).ToassesstheperformanceofCommonwealthfisheriesagainsttheirMEYtargets,fisherypolicymakersfrequentlyrelyoneconomicindicatorsthatprovidethemwithinformationtoinformmanagementdecisionsandmonitorperformance.

Informingmanagementdecisionsagainsttheeconomicobjective

Thistypeofeconomicindicatorisforward‐lookingandcanadvisefisherymanagersonpolicysettingsnecessarytoachieveMEY.Bio‐economicmodelsprovideindicatorsthatservethispurpose;modelshavebeendevelopedfortheNorthernPrawnFishery(Kompas&Che2004)andtheSouthernandEasternScalefishandSharkFishery(Kompas&Che2008).Managementstrategyevaluationbasedapproachesthatincludeaneconomiccomponentcanalsoservethispurpose.

Monitoringmanagementperformanceagainsttheeconomicobjective

Thistypeofeconomicindicatorisretrospectiveandassessespreviouseconomicperformance.Itcanprovideinsightintotheimpactofpreviousmanagementdecisionsoneconomicperformance.Mostindicatorsexaminedinthisreportfallunderthiscategory.Thisincludesthesurvey‐basedestimationofNER,productivityindexes,entitlementvalues,managementcosts,latencyandtermsoftradeanalysis.

Totalfactorproductivityanalysisisaneconomictoolusedtoassesshowwellfishersuseinputstoproduceoutputsandhowtheirabilitytoconvertinputsintooutputsovertimehaschangedwithchangesinthefishery’soperatingenvironment.Productivityindexescaninformfisherymanagersabouttheeffectofmanagementarrangementsonaverageproductivitylevelsinthefishery.

Analysisoffishers'termsoftradeprovidesanindicationofdriversbehindchangesinprofitabilityorNER.Itusesanindexapproachtoexaminechangesinthepriceofinputsandoutputsforafisheryovertimeandrevealsinformationabouttheproductivityimprovementsrequiredtooffsetlongtermdeclinesinthetermsoftrade.

Incontrast,entitlementvalues(orquotavalues)signaltheexpectedvalueoffutureprofitstobeobtainedfromthefishery.Whencomparedovertime,entitlementvaluescanserveasageneralindicatorforhowwelltheresourcesinafisheryhavebeensustainedormanaged.Ifentitlementvaluesareincreasingovertime,thissuggestsresourcesarebeingmanagedeffectivelybecauseoperatinginthefisheryisdeemedtohavebecomemoreprofitable.

Measuresofmanagementcosts,inabsolutetermsandasaproportionofgrossvalueoffisheryproduction(GVP)andperactiveboat,alsoprovideinformationaboutthecost‐effectivenessoffisherymanagement—anotherkeyobjectivereferredtointheFisheriesManagementAct1991.

Latency,ortheproportionofuncaughtquota,canindicatelimitedeconomicincentivesforfisherstoparticipateinthefishery.Afisherywhereoperatorsarenotutilisingtheirrighttofish,isunlikelytobenearitsMEYtarget.


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2 Background

DescriptionofthefisheryTheEasternTunaandBillfishFishery(ETBF)islocatedalongtheeastandsouthcoastofAustralia,stretchingfromthetipofCapeYorktotheVictoria–SouthAustraliaborderandincludesthewatersaroundLordHoweIslandandNorfolkIsland.Thismultispeciesfisheryusespredominatelypelagiclonglinetotargetthreespeciesoftuna,yellowfin,bigeyeandalbacore,alongwithswordfishandstripedmarlin.Minorlinemethodisalsousedbutaccountsforonlyasmallportionofthefishery’scatch,effortandgrossvalueofproduction(GVP).

Map 1 Relative fishing intensity, Eastern Tuna and Billfish Fishery, 2014

Thefisheryoperatesyear‐roundacrosssomeinternationallysharedstocks.CommonwealthmanagementoftheETBFtakesintoaccountAustralia’sobligationstotheWesternandCentralPacificFisheriesCommission(WCPFC),aregionalfisheriesmanagementorganisationresponsibleformanaginginternationallysharedstocksoftunaandtuna‐likespeciesinthePacificOcean.ThekeyportsforthisfisheryareBermagui,Cairns,CoffsHarbour,Mooloolaba,SouthportandUlladulla(Larcombe&Bath2015).


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KeyeconomictrendsIn2013–14theETBFwasthelargestCommonwealthtunafisherybyquantity,withatotallandedcatchof4682tonnes.Thisconsistedofmainlyyellowfintunaandswordfish.ThefisherygeneratedaGVPof$31.2million.YellowfintunaaccountedforthelargestshareofGVP(46percent,$14.4million),followedbyswordfish(23percent,$7.2million)andbigeyetuna(15percent,$4.7million).

Since1998–99theETBFlandedcatchhasbeenvariable,withpeaksin2001–02,2002–03and2006–07(Figure1).Overthepastdecadethecatchhasdeclinedtoaround5000tonnes.Incontrast,realGVPdeclinedatafasterrateafter2001–02toaround$30millionin2005–06andhassincedeclinedataslowerrate(Figure2).ThefallinrealGVPismainlyattributabletothedeclineinrealunitpricesreceivedforthemorevaluedspeciescaughtinthefisheryoverthisperiod(Figure3).Almost90percentofAustralia’stunaproductionisexportedtoJapan,sothefallinbeachpricesinthisperiodlargelyreflectstheappreciationintheexchangerateagainsttheJapaneseyen.Globalproductionofthefivekeyspeciescaughtinthefisheryincreasedrapidlyfrom1999–2000to2003–04(FAO2015),addingtopressureonprices. TheNERintheETBFwasnegativefrom2001–02to2009–10buthasbeenimprovingsince2003–04,largelyaresultofimprovedproductivity(Figure4).In2010–11thefisheryachievedpositiveNER,drivenprimarilybyreducedoperatingcosts.TheSecuringourFishingFuturestructuraladjustmentpackage(occurringbetween2005and2006)sawthelikelyexitoflessefficientvesselsfromthefishery,whichinturnassistedinreducingthecostoffishingfortheremainingvessels.Thenumberofvesselswasalreadydecliningfromapeakof146vesselsin1998–99;by2007–08only58vesselsremainedandin2013–14atotalof39vesselswereactive(Figure5).Inaddition,theshiftincatchcompositiontowardhighervaluedtunaspeciesfrom2006–07contributedtoincreasedfishingincomeandpositiveNER.ThemostrecentsurveyresultsshowthatNERimprovedin2011–12butdeclinedin2012–13,largelybecauseofhigherfuelpricesfacedbyoperators.

CurrentmanagementarrangementsInMarch2011thefisherymovedtoasystemoftotalallowablecommercialcatch(TACC)forkeytargetspecies,withindividualtransferablequotas(ITQs)entitlingholderstoashareoftheTACC.Quotaspeciesarealbacore,bigeyetuna,yellowfintuna,swordfishandstripedmarlin.Previously,thefisherywasmanagedthroughtransitionalarrangementswherebyatotalallowableeffortlimitwithtransferableeffortrightswasinplace(Figure6).ThesystemofTACCwithITQsmanagescatchinthefisherywhileallowingoperatorstochooseamoreefficientcombinationofinputstooperatetheirbusinessinthemostcost‐effectiveway.Thisallowsoperatorsgreaterflexibilityinadaptingtheirbusinesstoimproveprofitability.


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Figure 1 Landed catch of key species, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14

Figure 2 Real gross value of production, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14

Figure 3 Exchange rate and real unit price, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14

0

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2

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4

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6

7

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9

1998–99 2001–02 2004–05 2007–08 2010–11 2013–14

Landed catch (kilotonnes)

Yellowfin Albacore

Bigeye Broadbill swordfish

Striped marlin Other

0

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120

1998–99 2001–02 2004–05 2007–08 2010–11 2013–14

GVP (2013–14 A$ m

illion)

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1998–99 2001–02 2004–05 2007–08 2010–11 2013–14

Yellowfin Bigeye

Broadbill swordfish ¥/$A (right axis)

$/kg ¥/$A


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Figure 4 Real net economic returns, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14

p Preliminary estimate. Note: Time series of financial and economic performance (NER) tables are available on the ABARES website.

Figure 5 Number of vessels operating, Eastern Tuna and Billfish Fishery, 1998–99 to 2013–14

Figure 6 Key management changes, 1995–96 to 2013–14

‐30

‐20

‐10

0

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1998–99 2001–02 2004–05 2007–08 2010–11 2013–14p

NER

(2013–14 A$ million)


10

DemographicprofileoffishersoperatingintheETBFThemedianageofskipperssurveyedinthefisherywas43yearsin2012–13.Skippershadamedianof15yearsofexperienceintheETBFand20yearsoffishingexperience.Eightypercentofrespondents’highestlevelofeducationalattainmentwasyear10completion.Thehighestqualificationwasatrade/technicalapprenticeship.


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3 Financial and economic performance

FinancialperformanceThesurveypopulationforagivenyearisdefinedasvesselsthatrecordedmorethanonetonneofcatchintheETBF.Thesurveysamplerepresented36percentand34percentofthepopulationin2011–12and2012–13,respectively(Table3).DetailsofthesurveymethodareinAppendixB.

Someoperatorssurveyedoperatedinotherfisheriesduringthesurveyperiod.Theportionoftimetheseoperatorsspentinotherfisheriesvaried.Thereceiptsandcostsassociatedwithoperatinginthesefisheriesareincludedintheaveragevesselfinancialperformanceresults.

Between2011–12and2012–13financialperformanceofvesselsintheETBFdeclined(Table3andFigure7).Totalcostsincreased(by9percent)andtotalcashreceiptsincreasedbyacomparativelysmalleramount(2percent).Thisresultedinasubstantiallysmalleraverageboatcashincomeofin2012–13,comparedwith2011–12.

Crewcostsaccountedforthelargestshareofcashcostsat(28percent)in2011–12and,althoughincreasingby6percentin2012–13,didnotchangesignificantlyasaproportionoftotalcashcosts(27percent).Fuelcostswereanotherlargecontributortocashcostsmakingup13percentand15percentoftotalcashcostsin2011–12and2012–13,respectively.Fuelcostsincreasedby20percentin2012–13.

ProfitatfullequityfortheaverageETBFboatincreasedfrom2006–07to2010–11.Between2010–11and2011–12thistrendcontinued,withprofitatfullequityestimatedat$139612in2011–12(a$94103increasefrom2010–11).Thisdecreasedby38percentin2012–13.


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Table 3 Financial performance of boats operating, Eastern Tuna and Billfish Fishery

Vessel‐levelaverage

Revenue Unit 2011–12 2012–13

Value RSE Value RSE

Fishingreceipts $ 972701 (12) 984172 (12)

Non‐fishingreceiptsa $ 53052 (18) 64181 (19)

Totalcashreceipts $ 1025752 (12) 1048354 (12)

Costs

Administration $ 14824 (12) 17513 (14)

Crewcosts $ 246414 (11) 262274 (10)

Freightandmarketingexpenses $ 121615 (16) 114798 (15)

Fuel $ 117845 (8) 141568 (11)

Insurance $ 33192 (11) 40095 (8)

Interestpaid $ 5624 (35) 4595 (41)

Licencefeesandlevies $ 49249 (20) 46266 (17)

Packaging $ 69344 (28) 74730 (33)

Repairsandmaintenance $ 81682 (11) 97675 (14)

Othercostsb $ 152537 (12) 171134 (14)

Totalcashcosts $ 892325 (10) 970647 (9)

Boatcashincome $ 133428 (30) 77706 (62)

–lessdepreciationc $ 33232 (20) 32269 (18)

Boatbusinessprofit $ 107568 (33) 45702 (100)

–plusinterestleasingrent $ 32044 (22) 40791 (38)

Profitatfullequity $ 139612 (26) 86492 (50)

Capital(excludingquotaandlicences) $ 757451 (11) 668416 (11)

Capital(includingquotaandlicences) $ 1536879 (12) 1269097 (11)

Rateofreturntoboatcapitald % 18 – 13 –

Rateofreturntofullequitye % 9 – 7 –

Population no. 47 na 41 na

Sample no. 17 na 14 na

a Including rebates, charter hire, quota leasing revenue and other non‐fishing receipts. b Including quota lease payments. c Depreciation adjusted for profit or loss on capital items sold. d Excluding value of quota and licences. e Including value of quota and licences. na Not available. Note: Figures in parentheses are relative standard errors (RSEs). An RSE will be higher for estimates closer to zero. A guide to interpreting RSEs is included in Appendix A.


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Figure 7 Trends in key financial performance variables, Eastern Tuna and Billfish Fishery, 2002–03 to 2012–13

Note: Error bands are equal to two standard errors, approximating the 95 per cent confidence interval. Error bands are typically large for small sample sizes and wider for estimates closer to zero.


14

EconomicperformanceNeteconomicreturn(NER)ofthefisheryisestimatedtohavedeclinedfrom$2.9millionin2011–12to$0.2millionin2012–13(Table4andFigure4).ThepreliminaryestimateofNERfor2013–14showsanestimateddeclineto$0.1million.ThedecreaseinNERfrom2011–12to2012–13wasprimarilydrivenbyafasterdeclineinfishingincome(reductionof12percent),thaninfishingcosts(reductionof6percent).Thereductioninfishingincomewasdrivenbyafallinbeachpricesbetween2011–12and2012–13.TheAustraliandollar’s10percentappreciationagainsttheJapaneseyencontributedmosttothefallinbeachprices(Figure3)becausealmost90percentofAustralia’stunaproductionisexportedtoJapan.

Between2002–03and2012–13fishingincomeandoperatingcostsdeclined(Figure8).Operatingcostsdecreasedatafasterratethanfishingincomeoverthisperiod,increasingtheoverallneteconomicreturnsofthefishery.

Table 4 Fishery cash profit and net economic returns, Eastern Tuna and Billfish Fishery

TotalfisheryA$million

Category 2011‒12 2012‒13 2013‒14p

Receipts Value RSE Value RSE Value

Fishingincome 43.9 (14) 38.6 (14) 39.3

Cashcosts

Operatingcosts 38.7 (12) 36.4 (12) 37.7

Fisherycashprofit 5.2 (35) 2.2 (78) 1.6

Less

–ownerandfamilylabour 1.8 (27) 1.7 (32) 1.5

–opportunitycostofcapital 1.0 (19) 0.7 (20) 0.4

–depreciation 1.4 (22) 1.2 (21) 1.0

plusinterest,leasingandmanagementfees 3.7 (18) 3.3 (20) 2.9

Netreturn(excludingmanagementcosts) 4.6 (36) 1.9 (91) 1.6

Managementcosts 1.7 na 1.7 na 1.5

Netreturn(includingmanagementcosts) 2.9 na 0.2 na 0.1

p Preliminary non‐survey based estimates (for estimation method, see Appendix C). na Not applicable. Note: Figures in parentheses are relative standard errors (RSEs). RSEs are not available for 2013–14 results because of estimation method used (Appendix C).


15

Figure 8 Trends in economic returns, Eastern Tuna and Billfish Fishery, 2002–03 to 2013–14

p Preliminary estimate. Note: Error bands are equal to two standard errors, approximating the 95 per cent confidence interval. Standard errors are not calculated for returns or management costs, nor for forecasted values that use non‐survey methods. Error bands are typically large for small sample sizes and wider for estimates closer to zero.


16

4 Other key performance indicators Othereconomicindicatorscanhelpinassessingtheeconomicperformanceofafisheryandinunderstandingthetrendsseen.Indicatorsdiscussedinthisreportincludetrendsineconomicproductivity,termsoftrade,managementcostsandentitlementvalues.

ProductivityTotalfactorproductivity(TFP)analysisshowstrendsinfishers’economicproductivity.TFPanalysisisusedtoexaminetheabilityoffisherstoconvertinputsintooutputsovertime.ResultsfromtheTFPanalysiscanprovideanunderstandingofthefactorsinafishers’operatingenvironmentaffectingproductivityandassistinevaluatingchangesinNERovertime.Suchfactorsmayincludechangesinmanagementsettingsthatregulatefishers’technologychoices,changingmarketconditionsandchangesinthemixofoutputsproduced.Marketconditionsincludevariationsininputcosts,importcompetitionandchangesinthevalueoftheAustraliandollar.

Changetoafishers’operatingenvironmentcanprovidefishersanincentivetopursuevessel‐levelproductivityimprovements.Forexample,tokeepthebusinessfinanciallyviableinresponsetoadversemarketconditions,suchasincreasinginputcostsorcompetition,fishersinvestinproductivityenhancingimprovements.Adversemarketconditionscanalsohelpdriveautonomousstructuraladjustmentintheindustry.Thiscanincludefishingrightsmovingtothemostprofitablefishersandtheleastefficientorleastprofitablevesselsexitingtheindustry,resultinginamoreproductivefleet.

TFPanalysiswasundertakenfortheETBFfrom2002–03to2012–13(methodsforcalculatingtheindexesareshowninAppendixD).Duringthisperiod,theproductivityindexfollowedanupwardtrendandincreasedbyanannualaverageof4percent(Figure9).

Figure 9 Productivity indexes, Eastern Tuna and Billfish Fishery

Apossibledriverofimprovementinproductivityinthefisheryfrom2002–03to2012–13isareductioninfleetsizeandtheexitoflessefficientvessels.Between2002–03and2012–13the

0.0

0.5

1.0

1.5

2.0

2002–03 2004–05 2006–07 2008–09 2010–11 2012–13

Input index

Output index

Productivity index

Index 2002‐03=1


17

numberofvesselsinthefisherydecreasedfrom138to41.Becausefewerandmoreproductivevesselsareleftinthefishery,theabilitytoconvertinputstooutputsislikelytohaveimproved,increasingtheproductivityindex.

ItistooearlytoassesswhethertheintroductionofoutputcontrolsinMarch2011intheformofTACCforfivekeytargetspecieshasledtoamarkedimprovementinproductivity.Outputcontrolsprovidemoreflexibilitytooperatorsthaninputcontrols,allowingtheflexibilitytooperatewithinputcombinationsthataremoreefficientandminimisingthelikelihoodofeffortcreep(Elliston&Cao2004).

Termsoftrade

ThetermsoftradetrendslookatthechangeininputpricesrelativetooutputcostsandcanindicatewhetherimprovementsinNERaredrivenbyproductivityincreasesorbyfavourabletermsoftradeconditions.Between2002–03and2011–12theinputcostindex(consistingoffuel,labourandrepaircosts)increasedby18percentbeforedecliningin2012–13withlowerfuelprices(Figure10).Theoutputpriceindexincludesthepriceofspeciescaughtbyvesselsinthefishery.Overtheperiod2002–03and2012–13theoutputpriceindexdeclinedby25percent.Asaresult,thetermsoftradeindexdeclinedby21percentoverthesameperiod,indicatingthatfisherswouldhaveexperiencedchallengingoperatingconditions.ThishashadamoderatingeffectonthelevelofNERearntfromthefisheryandincreasedtheemphasisonachievingproductivityimprovementsfromthefleet.Thetermsoftradeimprovedby15percentin2012–13,asinputpricesdeclinedatafasterratethanoutputprices,supportingNER.Theincreaseinthetermsoftradein2012–13wasnotsufficienttooffsetthenegativeeffectoflowerproductivityonNERinthatyear.

Figure 10 Input cost and output price indexes, Eastern Tuna and Billfish Fishery

ManagementcostsManagementcostsareincurredtoensurethefisherycontinuesoperating,makingthemcostsassociatedwithharvestingfishinthefishery.Totalmanagementcostsincreasedbetween1997–98and2003–04,peakingat$4.3million,thendeclinedto$1.5millionin2013–14(Figure11).Thedeclineafter2003–04hassupportedthepositiverisingtrendinNER.From2005–06to2013–14thedeclineintotalmanagementcostswasfasterthanthedeclineingrossvalueofproductionofthefishery.Thisledtoafallinmanagementcostsasashareofgrossvalueof


18

production,from11percentin2005–06to5percentby2013–14.Thevolatilityintheleveloftotalmanagementcostsovertheperiod1997–98to2013–14likelyreflectschangesinboththesizeofthefisheryandmanagementarrangementsforthefisheryoverthatperiod.

Themanagementcostperactivevesselgenerallyincreasedfrom1997–98to2007–08(Figure12),peakingatapproximately$64051inrealterms.Highermanagementcostpervesselin2007–08islikelytobeanoutcomeofvesselsexitingtheindustry,leavingaconstantamountofmanagementcoststobesharedamongafewernumberofvessels.Managementcostpervesselhasgenerallydeclinedsince2007–08butdidincreasein2012–13.Themanagementcostpervesselisestimatedtohavedeclinedto$38568in2013–14.

Figure 11 Total management costs, Eastern Tuna and Billfish Fishery

Figure 12 Average management cost per active vessel and as a share of GVP, Eastern Tuna and Billfish Fishery

Note: Time series of financial and economic performance (NER) tables and other indicators are available on the ABARES website.

‐

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1997–98 2001–02 2005–06 2009–10 2013–14

Total m

anagement cost 2013‐14 $m

0

1

2

3

4

5

6

7

8

9

10

11

12

0

10

20

30

40

50

60

70

1997–98 2001–02 2005–06 2009–10 2013–14

Management cost as a percentage

of GVP

Management cost per active

boat $'000

Management cost per active boat 2013‐14 $'000

Management cost as a percentage of GVP


19

EntitlementvaluesOperatingintheETBFrequireslonglineorminorlineboatstatutoryfishingrights(orboatSFRs)andquotastatutoryfishingrights(quotaSFRs)foreachofthefivequotaspeciesundertheETBFmanagementplan.EntitlementvaluesareestimatedfromaskingfishersoperatingintheETBFthevaluetheyplaceonquotaSFRs.Thevaluesestimatedbyfishersareusuallysubjectiveandmaydifferfromoperatortooperator.ABARESstartedestimatingentitlementvaluesfromthe2011‐‐12ETBFsurvey.Table5showstheaveragemarketpriceofthefivequotaspeciesfor2011–12and2012–13.

Table 5 Estimated market price of individual quota SFRs, Eastern Tuna and Billfish Fishery

Species Averagemarketpriceofstatutoryfishingrights($perunit)

2011–12 2012–13

Albacore 1.5 2.1

Bigeyetuna 7.0 6.9

Stripedmarlin 5.9 6.2

Swordfish 7.0 6.8

Yellowfintuna 9.5 7.1

Entitlementvaluescanreflecttheexpectedprofitabilityinthefisherybutlittleinformationcanbedrawnfromthetwoyearsofdatacollectedtodate.Furthercollectionofentitlementdataovertimewillgivefurtherinsightintofishers’perceptionsofprofitabilityinthefishery.

QuotalatencyTheleveloflatencyintheETBF,measuredbytheproportionofTACCnotcaughtinthefishery,hasvariedacrossthekeyspeciessince2011(thefirstseasoninwhichaTACCwasinplace).Landedcatchforstripedmarlin,swordfishandyellowfintunahavebeenonaverage75percent,79percentand73percentofTACC,respectively,fromthe2011to2014fishingseasons.Thetworemainingkeyspecies,albacoreandbigeyetunahavehadrelativelysmallerproportionsofTACCcaught.Onaverage,from2011to2014,30percentofTACCforalbacoreand47percentofTACCforbigeyetunawerecaught.

Highlatencylevelscanindicatelimitedincentiveforfisherstooperateinthefisheryortargetparticularspecies.Thiscanbearesultofpoormarketconditionsrelativetoinputcosts,lowfishstockslevelsorotherunfavourablefishingconditionssuchasbadweather,ormoreprofitableoptionsforfishersinotherfisheries.TherelationshipbetweenchangesinquotalatencyandNERtrendsarelesscertainforinternationallysharedstockswheretheTACCsettingmaynotreflecttheachievementofaneconomictarget.Thismakesitdifficulttodrawconclusionsaboutthepossiblecausesoflatencyinthefisheryandhowitisaffectingoveralleconomicperformance.AstheTACCisnotbinding(ornotconstrained)thefisherycouldbeoperatinginconditionssimilartoopenaccess,allowingforinefficienciessuchasover‐capitalization.Inthelong‐run,NERisunlikelytobemaximisedwithnon‐bindingTACCs.


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5 Performance against management objectives

Harvestinginternationallysharedstockscomplicatesselectionofeconomic‐basedtargetsandassessmentofeconomicstatusagainstmaximumeconomicyield.Managementactionsdomesticallymaynotaffectstock‐widebiomass,especiallywhereAustraliancatchisarelativelysmallproportionoftotalcatchinthefishery.ObjectivesoftheETBFmanagementplanincludemaximisingtheneteconomicreturnstotheAustraliancommunityfrommanagementofthefishery,whilebeingconsistentwiththeprinciplesofecologicallysustainabledevelopment,andtomanagethefisheryefficientlyandcost‐effectivelyfortheCommonwealth.

TheCommonwealthFisheriesHarvestStrategyPolicy(HSP;DAFF2007)isnotprescribedforfisheriesmanagedunderinternationalagreements.AharveststrategyframeworkfortheETBFhasbeendevelopedinlinewiththeCommonwealthFisheriesHarvestStrategy(AFMA2011).Theharveststrategyframeworkhasbeenusedtosetthetotalallowablecommercialcatchforswordfishandstripedmarlinsince2011.TargetreferencecatchratesusedintheETBFharveststrategyforswordfishandstripedmarlinalignwithdefaultreferencepointsof48percentofunfishedbiomassforthetargetand20percentofunfishedbiomassforthelimit.Tunaspecies’TACCsarebasedonhistoricalcatchlevelsinthefishery(Larcombe&Bath2015).

TheNERinthefisheryhasbeenimprovingsince2003–04andturnedpositivein2010–11.ItisunclearwhethertheharveststrategytargetsareresponsibleforthisimprovementbecauseNERwasincreasingbeforetheirimplementationandmultiplefactorsinfluencethefishery’seconomicperformance.TheimprovementinNERoccurreddespitenegativeexternalpressuressuchasrisingfuelpricesandtheappreciationoftheAustraliandollar,suggestingthatproductivitygrowthhasplayedastrongroleinimprovingeconomicperformanceinthefishery.In2013–14thepreliminaryNERwereestimatedat$0.1millionusingnon‐surveybasedmethods.TheestimatedslightreductioninNERin2013–14ismostlydrivenbyhigheroperatingcosts,particularlyfuel,andarelativelysmallincreaseinfishingincome.Amongtheindicatorsanalysedistheproductivityindex,whichhasbeentrendingupwardsforthefishery.ThisimprovementinproductivityisconsistentwiththeupwardtrendinNERsince2003–04.

Totalmanagementcostsinthefisheryhavebeendecreasingsince2004–05.Managementcostspervesselremainedhighfrom2006–07to2007–08,withasimilarlevelofmanagementsharedamongfewervessels.Managementcostpervesselhasbeendeclininginthefisherysince2007–08andmanagementcostasapercentageofGVPhasdeclinedfromahighof11percentin2005–06to5percentin2013–14.

FromMarch2011outputcontrolswereintroducedforfivekeytargetspeciesintheformofTACCsandallocatedasITQstofishersthatwereoperatinginthefishery.Thishasprovidedfishersgreaterflexibilitytofishwithamoreefficientcombinationofinputs.Thetransferabilityoffishingrightshasalsoallowedquotatobeallocatedtomoreefficientoperators.However,thesuccessofoutputcontrolsdependsonsettinglevelsofTACCsthatmeetthemanagementobjective.InthecontextofinternationallysharedstocksthesettingofTACCsatlevelsthatmaximiseNERiscomplicatedbyuncertaintyaroundthecatchofotherjurisdictions.However,whenTACCsarepersistentlynon‐binding,thelikelihoodofmaximisingNERoverthelongtermislow.Ifreturnsdeterioratefurther,managersmayneedtoconsideradjustmentstoTACCsettingsinanefforttoimproveeconomicperformanceofthefishery.


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Appendix A: Survey definitions Thisappendixprovidesdefinitionsofkeyfinancialperformancevariables,neteconomicreturns(NER)andtheABARESmethodofcalculatingNER.UseofNERasanindicatorofeconomicperformanceisbrieflydiscussed.

FinancialperformanceABARESusedthesedefinitionsofkeyvariablesintheanalysisofvessel‐levelfinancialperformance.

Totalcashreceiptsrepresentreturnsfromsaleoffish,fromnon‐fishingactivities(includingcharteroperations)andfromothersources(insuranceclaimsandcompensation,quotaand/orendorsementsleasedout,governmentassistanceandanyotherrevenue)inthefinancialyear.

Formostoperators,thisinformationisreadilyavailablefromtheirownrecords.However,differentoperatorsrecordtheirfishingincomeindifferentways.Wherefisharesoldthroughacooperative,someoperatorsmayonlyrecordpaymentsreceivedfromthecooperative.Thesepaymentsmaybenetofcommissions,freightandotherpurchasesmadethroughthecooperative.

Inothercases,thecooperativeoragencypaysthecrewdirectlyforthecatch;theowner’sfinancialrecordsmightincludeonlytherevenuesreceivedafterthecrew’ssharehasbeendeducted.

Forthesereasons,operatorsareaskedtoprovideabreakdownofthetotalcatchoftheirboatandanestimateofthetotalvalueofthatcatch.Forconsistency,marketingchargesmayneedtobeaddedbackintofishingreceiptsforsomeboatstogiveagrossvalue.Wherethisisnecessary,thesesellingcostsarealsoaddedintothecostestimatestooffsetthenewrevenuefigure.Receiptsalsoincludeamountsreceivedinthesurveyyearforfishsoldinpreviousyears.

Totalcashcostsincludepaymentsmadeforbothpermanentandcasualhiredlabourandpaymentsformaterialsandservices(includingpaymentsoncapitalitemssubjecttoleasing,rent,interest,licencefeesandrepairsandmaintenance).Capitalandhouseholdexpendituresareexcluded.

Labourcostsareoftenthehighestcashcostinthefishingoperation.Labourcostsincludewagesandanestimatedvalueforowner/partner,familyandunpaidlabour.Labourcostscoverthecostoflabourinvolvedinboat‐relatedaspectsofthefishingbusiness,suchascreworonshoreadministrationcosts,butdonotcoverthecostofonshorelabourtoprocessfisheriesproducts.

Onmanyboats,thecostsoflabourarereflectedinwagespaidbyboatownersand/orintheshareofthecatchtheyearn.However,insomecases,suchaswhereowner–skippersareinvolvedorwherefamilymembersworkinthefishingoperation,paymentsmadecanbeloworevennil.Thiswillnotalwaysreflectthemarketvalueofthelabourprovided.Toallowforthispossibleunderestimation,allowner/partnerandfamilylabourcostsarebasedonestimatescollectedattheinterviewofwhatitwouldcosttoemploysomeoneelsetodothework.

Boatcashincomeisthedifferencebetweentotalcashreceiptsandtotalcashcosts.


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Depreciationcostsareestimatedusingthediminishingvaluemethodbasedonthecurrentreplacementcostandageofeachitem.TheratesappliedarethestandardratesallowedbytheCommissionerofTaxation.Foritemspurchasedorsoldduringthesurveyyear,depreciationisassessedasifthetransactionhadtakenplaceatthemidpointoftheyear.ThismethodofcalculatingdepreciationisalsousedinotherABARESindustrysurveys.

Boatbusinessprofitisboatcashincomelessdepreciationandaccountingforanyprofitorlossonthesaleofcapital.

Profitatfullequityisboatprofitplusrent,interestandleasepayments.

Capitalisthevalueplacedontheassetsemployedbytheowningbusinessofthesurveyedboat.Itincludesthevalueoftheboat,hull,engineandotheronboardequipment(includinggear).Estimatesarealsoreportedforthevalueofquotasandendorsementsheldbythesurveyedboat.Estimatesofthevalueofcapitalarebasedonthemarketvalueofcapitalandareusuallyobtainedatinterview.However,insomecasesquotaandendorsementvaluesareobtainedfromindustrysources.

Depreciatedreplacementvalueisthedepreciatedcapitalvaluebasedonthecurrentageandreplacementvaluesoftheboatandgear.Thevalueofquotaandendorsementsheldisnotincludedintheestimate.

Rateofreturntoboatcapitaliscalculatedasiftheproprietorsownedallfishingassets.Thisenablesfinancialperformanceofsampleboatstobecomparedregardlessofproprietors’equityinthebusiness.Rateofreturntoboatcapitaliscalculatedbyexpressingprofitatfullequityasapercentageoftotalcapital(excludingquotaandlicencevalue).

Rateofreturntofullequityiscalculatedbyexpressingprofitatfullequityasapercentageoftotalcapital(includingquotaandlicencevalue).

NeteconomicreturnsNeteconomicreturnsarethelong‐runprofitsfromafisheryafterallcostshavebeenmet,includingfuel,crewcosts,repairs,theopportunitycostoffamilyandownerlabour,fisherymanagementcosts,depreciationandtheopportunitycostofcapital.

Morespecifically,afishery’sneteconomicreturnsforagivenperiodcanbedefinedas:

Where:

NR = netreturns

R = totalcashreceiptsattributabletothefishery,excludingleasingincome

CC = totalcashcostsattributabletothefishery,includingrecoveredmanagementcosts

OWNFL= imputedcostofownerandfamilylabour

ILR = interestandquota/permitleasingcosts

OppK = opportunitycostofcapital

DEP = depreciation

recMC = recoveredmanagementcosts

NR=R–CC–OWNFL+ILR–OppK–DEP+recMC–totM

operatingcosts capitalcost managementcostscashreceipt


23

totMC = totalmanagementcosts.

Notethatrecoveredmanagementcostsarethosemanagementcostspaidbyindustrythroughmanagementfeesandareincludedintotalcashcosts(CC).Thesecostsareremoved(asindicatedby‘+recMC’)topreventdoublecounting,giventhatthesecostsareacomponentoftotalmanagementcosts.Similarly,interestandquota/permitleasingcostsareremoved(indicatedby‘+ILR’)becausethesecostsatthefisherylevelrepresentrevenuesthathavebeenredistributedtoexternalinvestorsinthefishery.

Survey‐basedestimationofneteconomicreturns

FishsalereceiptsFishsalereceiptsareusuallytakenfromfishers’financialaccounts.Whereafisheroperatesinmorethanonefishery,theyareaskedtoindicatetheproportionoftotalfishsalesattributabletothefisherybeingsurveyed.Anyfreightormarketingcostsmustalsobededucted.Thisprovidesanestimateofnetfishingreceiptsthatincorporatesonlythe‘beachprice’receivedforthecatch;thatis,thepricereceivedforfishatitsfirstlandingpoint.

Incomereceivedfromleasingoutquotaandlicencesisnotincludedasincomeincalculatingneteconomicreturns.Thisitemrepresentsaredistributionofprofitsamonginvestorsinthefishery.Also,theamountafisherearnsfromleasingoutquotaandlicencesrelatestotheamountofprofitsthefisherygenerates.Therefore,includingleasingrevenuewouldresultindoublecounting.

OperatingcostsOperatingcostsincludeday‐to‐dayoperationalexpensesincurredtoharvestfishinthefishery.Cashcosts(CC)areacomponentofoperatingcoststhatincludesthosecostitemsthatareeasilyidentifiedinfishers’accounts,suchasfuel,repairsandgearreplacement.

Labourcostsareoftenspecifiedinfishers’accountsaswages.However,incalculatingnetreturns,anestimateoftheopportunitycostoflabourisneeded.Theopportunitycostoflabouristhewagethatcouldhavebeenearnedperformingasimilarroleelsewhere.Whereamarketwageispaid,itisassumedtorepresenttheopportunitycostoflabourandisincludedinthecashcostscomponentofoperatingcosts.

Theopportunitycostofownerandfamilylabourisnoteasilyidentifiableinfishers’accounts.Ownersandtheirfamiliesareofteninvolvedinoperatingaboat,eitherasskippersandcreworonshoreasaccountantsandshoremanagers.Whilesomewillbepaidmarketvaluefortheirlabour,somewillnotbepaidatallandotherspaidveryhighamounts(forexample,asdirectorfeesormanagerfees).Inthesecases,ABARESsurveyofficersasksurveyrespondentstoestimatethemarketvalueofownerandfamilylabour—thatis,theamountthatwouldneedtobepaidtoemployanon‐familymembertofulfilthesameposition.Thisamountisenteredasacomponentofoperatingcosts(OWNFL).

Quotaandlicenceleasingcostsandinterestexpensesareincludedincashcosts.However,thesecostsmustberemovedfromcalculationofnetreturnsforthesamereasontheyareexcludedfromincome.See‘Fishsalereceipts’forexplanation.

CapitalcostsTocalculatecapitalcosts,anestimateofthevalueofcapitalisneeded.ABARESsurveyofficersaskfisherstoprovideinformationforallcapitalitemsassociatedwiththefishingbusiness(includinghull,engine,onboardequipment,vehiclesandsheds).Informationcollectedforeach


24

itemincludestheyearthecapitalitemwasmanufacturedandanestimateofwhatitwouldcosttoreplacethatitemwithanewequivalentitem.Byaccountingforpreviousdepreciationandinflation,thesedataareusedtoestimatethetotalvalueofcapitalinvestedinthefisheryforthesurveyyear.

Capitalcostsincludetheopportunitycostofcapital(OppK)anddepreciation(DEP).Theopportunitycostofcapitalisthereturnthatcouldhavebeenearnedifcapitalwasinvestedelsewhere,ratherthaninthefishery.Thiscostisnotidentifiableinfishers’accounts.Arealinterestratethatrepresentsthelong‐termaveragerateofreturnthatcouldbeearnedonaninvestmentelsewhereisappliedtothevalueofcapitalinthefishery.Forfisheriessurveys,ABARESusesarateof7percentperyear.

Depreciationexpenseisthecostofcapitalbecominglessvaluableovertimeasaresultofwearandtearandobsolescence.Depreciationexpenseisnotconsistentlyidentifiableinfishers’accounts,soABAREScalculatesannualdepreciationofboatsbasedonthecapitalinventorylistcollectedduringthesurveysandpredetermineddepreciationratesforeachcapitalitemtype.

ManagementcostsManagementcostsareincurredtoensurethefisherycontinuesoperatingandarecostsassociatedwithharvestingfishinthefishery.Managementcostscomprisetwocomponents:recoveredmanagementcostsandnon‐recoveredmanagementcosts.Recoveredmanagementcosts(recMC)arethoserecoveredfromfishersandappearintheaccountsoffishersaspaymentsofmanagementfeesorlevies.Non‐recoveredmanagementcostsarenotchargedtofishersbutinsteadarecoveredbythemanagingbodyorgovernment.Calculationofneteconomicreturnsrequiresdeductionoftotalmanagementcosts,whichisthesumofthesetwocomponents.

Totalcashcosts(CC)includesanestimateofrecoveredmanagementcostsbasedonmanagementlevyexpensescontainedinfishers’accounts.Thisestimateofrecoveredmanagementcostsisbasedonlyonasampleofthefishery,soitmaynotbeconsistentwiththeactualvalueofmanagementcostsrecoveredfromtheentirefishery.AFMAisabletoprovideanestimateoftotalmanagementcostsforeachfishery—thatis,thesumofbothrecoveredandnon‐recoveredmanagementcosts.Forthesereasons,recoveredmanagementcostsfromfishers’accountsareignored(asindicatedby+recMCinthenetreturnsequation).Totalmanagementcosts(totM)suppliedbyAFMAarethenusedtoestimateneteconomicreturns.

NeteconomicreturnsandeconomicperformanceFisherymanagers,policyanddecision‐makersrequireinformationonfisheries’performanceforachievingtheobjectiveofmaximisingneteconomicreturnsfromuseoffishstocks—anobjectivecommonlyreferredtoasMEY.IfafisheryisoperatingatMEY,effort,catchandstocksareatlevelswherethedifferencebetweendiscountedrevenuesandcosts,andthereforeprofits,aremaximised.Theterm‘discounted’meansthatthedifferenceinthevalueofadollarearnedtodayrelativetoadollarinthefutureisaccountedfor.AlthoughestimatesofNERdonotrevealhowafisheryisperformingrelativetoitsmaximumpotential,positivetrendsinNER,togetherwithotherindicators,suggestthattheMEYobjectiveisclosertobeingmet.


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Appendix B: Survey methods CollectingeconomicsurveydataABAREShasundertakeneconomicsurveysofselectedCommonwealthfisheriessincetheearly1980sandonaregularbasisforparticularfisheriessince1992.UnderthecurrentprogramABARESsurveysmajorCommonwealthfisherieseverytwoyears,ormorefrequentlywherethefisheryisundergoingmajorchangesandmonitoringisparticularlyimportant.Itaimstodevelopaconsistenttimeseriesofeconomicinformationforeachfishery.Suchinformation,inconjunctionwithscientificassessmentsofeachfishery,isvitalforassessingfisheries’economicperformance.

Surveyinformationismadepubliclyavailablesotheperformanceoffisheriesandtheeffectofmanagementpoliciescanbeassessedindependently.

SampledesignABARESsurveysaredesignedandsamplesselectedonthebasisofinformationprovidedbyAFMA.Thisinformationincludesdataonthevolumeofcatch,fishingeffortandboatcharacteristics.

Itisnotpossibletosurveyallboatsinafishery,soarepresentativesampleofboatsisselected.Wherepossible,boatsareclassifiedintosubgroupsbasedeitheronthefishingmethodused(longline,purseseineandtrawl)oronthesizeofoperations(small,mediumandlargeproducers).Aminimumnumberofrepresentativeboatsfromeachsubgrouparethentargetedforthesurvey.

Inpractice,thissampleisseldomfullyrealised.Non‐responseisrelativelyhighacrossfisherysurveys,reflectingthedifficultyincontactingsomeoperatorsandareluctanceofotherstoparticipate.Thismaybiastheresults—forexample,ifprofitabilityofrespondentsandnon‐respondentsdifferssignificantly.Sampledesignandweightingsystemshavebeendevelopedthatreducethenon‐responseeffect,butcareisstillneededwheninterpretingsurveyinformation.

BetweenFebruaryandAugust,anABARESofficervisitstheownerofeachboatselectedinthesample.Theofficerinterviewstheboatownertoobtainphysicalandfinancialdetailsofthefishingbusinessforthesurveyyears.Whennecessary,theskipperoftheboatisalsointerviewed.ABARESsubsequentlyobtainsfurtherinformationfromaccountants,sellingagentsandmarketingorganisationsonthesignedauthorityofsurveyrespondents.

ABARESreconcilestheinformationobtainedfromvarioussourcestoproducethemostaccuratedescriptionpossibleofthefinancialcharacteristicsofeachsampleboatinthesurvey.

SampleweightingEstimatesoffinancialandeconomicperformancepresentedinthisreportwerecalculatedbasedonweightedsurveydataofsampledvessels.ABAREScalculatesaweightforeachsampledvesselbasedonhowrepresentativethatvesselisinthepopulation.ThisreportusesaregressionmodelofGVPoncatchforeachvesselinthefleetpopulationtoestimatesampleweights.Theindividualestimatedweightsforsampledvesselsinthefleetpopulationarethenstandardisedsuchthattwoconditionsaremet,thesumofsampleweightsequalthepopulation,andtheweightedsumofthesamplecatchapproximatetotalcatchofthefleet.


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Thatis,

Σwi=PandΣwixi=X

where:

wiistheweightfortheithvessel

Pisthenumberofvesselsinthefleetpopulation

xiisthecatchfortheithvessel

Xisthetotalcatchforthefleetpopulation.

ReliabilityofestimatesABARESgenerallysurveysarelativelysmallnumberofboatsoutofthetotalnumberinaparticularfishery.Estimatesderivedfromtheseboatsarelikelytobedifferentfromthosethatwouldhavebeenobtainedifinformationhadbeencollectedfromacensusofallboats.Thenumberofboatsinthesample,thevariabilityofboatsinthepopulationand,mostimportantly,thedesignofthesurveyandtheestimationproceduresusedinfluencehowcloselythesurveyresultsrepresentthepopulation.

Measuresofsamplingvariationhavebeencalculatedtogiveaguidetothereliabilityofsurveyestimates.Thesemeasures,expressedaspercentagesofthesurveyestimatesandtermedrelativestandarderrors,aregivennexttoeachestimateinparentheses.Ingeneral,thesmallertherelativestandarderror,themorereliabletheestimate.

UseofrelativestandarderrorsRelativestandarderrorscanbeusedtocalculateconfidenceintervalsforthesurveyestimate.First,thestandarderroriscalculatedbymultiplyingtherelativestandarderrorbythesurveyestimateanddividingby100.Forexample,ifaveragetotalcashreceiptsareestimatedtobe$100000witharelativestandarderrorof6percent,thestandarderrorforthisestimateis$6000.

Thechancethatthecensusvalue(thevaluethatwouldhavebeenobtainedifallboatsinthetargetpopulationhadbeensurveyed)iswithinonestandarderrorofthesurveyestimateisroughlytwointhree.Thechancethatthecensusvalueiswithintwostandarderrorsofthesurveyestimatesisroughly19in20.Therefore,inthisexample,thechancethatthecensusvalueisbetween$94000and$106000istwointhreeandthechancethatthecensusvalueisbetween$88000and$112000is19in20.

ComparingestimatesWhencomparingestimatesacrossgroupsoryears,itisimportanttorecognisethatthedifferencesarealsosubjecttosamplingerror.Aconservativeestimateofthestandarderrorofthedifferencecanbeconstructedbyaddingthesquaresoftheestimatedstandarderrorsofthecomponentestimatesandthentakingthesquarerootoftheresult.

Forexample,supposetheestimatesoftotalcashreceiptswere$100000foroneyearand$125000forthepreviousyear—adifferenceof$25000—andtherelativestandarderrorisgivenas6percentforeachestimate.Thestandarderrorofthedifferencecanbeestimatedas:

0.06 ∗ $100000 0.06 ∗ $125000 $9605

Therelativestandarderrorofthedifferenceis:

$9605 $25000⁄ ∗ 100 38%


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Thepopulationofafisherymaychangefromoneyeartothenext.Ifthesepopulationchangesaresubstantial,differencesinestimatesmaybecausedmorebythechangesinpopulationthanbychangesinthevariablesthemselves.

Non‐samplingerrorsThevaluesobtainedinasurveymaybeaffectedbyerrorsotherthanthosedirectlyrelatedtothesamplingprocedure.Forexample,itmaynotbepossibletoobtaininformationfromcertainrespondents,respondentsmayprovideinaccurateinformationorrespondentsmaydifferfromnon‐respondentsforaparticularvariablebeingsurveyed.

ABARESsurveystaffaregenerallyexperiencedandundergorigorouspre‐surveytraining,aimedatminimisingnon‐samplingerrors.However,whendrawinginferencesfromestimatesderivedfromsamplesurveys,usersshouldbeawarethatbothsamplingandnon‐samplingerrorsoccur.


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Appendix C: Non‐survey based estimation of net economic returns ABAREShasdevelopedanon‐surveybasedmethodofestimatingneteconomicreturnsforfinancialyearswheresurveydataarenotyetavailable.Itallowsmoretimelyestimationandreportingofneteconomicreturnestimatestobetterinformindustryandgovernmentdecision‐making.Thismethodisintendedtocomplementdatacollectionandpublicationofresultsnormallyundertakenthroughthefisheriessurveys.

MethodThemethodusedtocalculatenon‐surveybasedestimatesofneteconomicreturnsforanon‐surveyyear(ayearforwhichnosurveydataareavailable)usesregressionestimatesforkeycomponentsofneteconomicreturns.Regressionapproachesusethemostrelevantvariablesforeachfishery,givenuniquefishingmethodsandothercharacteristics.Inallcases,eachcomponentisestimatedbasedonanassumedsampleofthepopulationandasetofcorrespondingassumedweights.Thisassumedsamplerepresentsthoseboatsthatareexpectedtobesampledinthenextsurvey.Keyvariablescorrelatingwithcashreceiptsandoperatingcostswereusedintheestimates.Results(seeTableC1andTableC2forfullregressionresults)showthatthesamevariableswereusedtoestimatebothcashreceiptsandoperatingcosts.

ReliabilityofestimatesEstimatesfromtheregressionanalysisaresubjecttouncertainties.First,relationshipsestimatedbetweensurveyedvaluesofreceiptsandcostsandothermorereadilyavailabledatarelyonthehistoricalsampleofboatssurveyed.Boatsthatareconsistentlynotincludedinasamplemaybeunder‐representedintheestimates.

Itisnotcertainthathistoricalrelationshipswillholdinthemostrecentyear.Operatingconditionsinthefisherymaychange,resultinginchangesinreceiptsandcostsnotforeseeableusingthismethod.

Estimatesshouldbeusedasanindicationofthelikelydirectionandmagnitudeofchangesinneteconomicreturns.Foreachreceiptandcostcategory,thecoefficientofdetermination(R2)givesanindicationoftheextenttowhichtheexplanatoryvariablescanexplainvariationinthedependentvariable.Lowercoefficientsofdeterminationsuggestagreaterlevelofuncertaintysurroundingtheestimates.

CashreceiptsCashreceiptsistheprimarycomponentofneteconomicreturncalculationsbecauseallothercostsaredeductedfromcashreceipts.Cashreceiptsrepresentsincomefromfishingoperationsinthesurveyedfishery.Fornon‐surveyyears,realGVPisagoodindicatorforcashreceiptsasitiscloselyrelatedtofishingincome.RealGVPwasestimatedusingaveragepricedataandcatchdata.VariablesincludedforeachfisheryarerealGVPandyearandvesselfactors(TableC1).


29

Table C1 Regression model for average cash receipts, Eastern Tuna and Billfish Fishery

Variable Estimate Std.error t‐statistic Pr(>|t|)

Intercept 3.05e+04 5.64e+04 0.54 0.59

RealGVP 1.74e+00 7.87e‐02 22.13 0.00

Boatdummy –3.17e+05 1.33e+05 ‐2.38 0.02

Yeardummy(2014)

–2.42e+05 6.96e+04 ‐3.48 0.00

R2 0.90

Prob(F‐stat) 0.00

OperatingcostsKeydriversofoperatingcostsinanyfisheryarefuelandlabour.Therefore,accuratelycalculatingoperatingcostsforanon‐surveyyearrequiresselectingvariablesthatinfluencethesetwocomponents.Forlabour,sharepaymentsystemsimplyacloserelationshipbetweenfisheryGVPandlabourcosts.Incontrast,fuelcostiscollectedduringthebiennialsurveysABARESconductsforETBFforsampledvessels,whichcanthenbeweightedtogenerateestimatesforeachfisherysector.However,fuelcostdidnotappeartobestatisticallysignificantinestimatingtheoperatingcostfortheETBFin2013–14andinfactdeterioratedthemodel.PreliminaryestimatesofoperatingcostwerebasedonrealGVPandyearandvesselfactors(TableC2).

Table C2 Regression model for average operating costs, Eastern Tuna and Billfish Fishery

Variable Estimate Std.error t‐statistic Pr(>|t|)

Intercept 2.55e+05 4.50e+04 5.65 0.00

RealGVP 1.34e+00 6.28e‐02 21.27 0.00

Boatdummy –3.39e+05 1.06e+05 –3.19 0.00

Yeardummy(2014)

–2.19e+05 5.56e+04 –3.95 0.00

R2 0.89

Prob(F‐stat) 0.00

Cashreceiptsandoperatingcostregressionsweretestedformodelfitincludingresidualnormality,heteroskedasticity,multicollinearityandautocorrelation.Initiallyalargersetofvariableswereconsideredforallregressionsbutonlyvariablesthatwerestatisticallysignificantorimprovedmodelfitwerekeptinthefinalregression.

Interest,leasingandmanagementfeesInterestandleasingfeesrepresentaredistributionofprofitstoinvestorsinthefishery.Assuch,theyarenotcostsatthefisherylevel.Theyareestimatedbasedonhistoricalratiosandvalues.

ManagementfeesforthepurposeoftheestimationaretakenfromAFMA(recoveredandnon‐recovered)andincludeallcostsformanagingthefishery,notjustthoserecoveredfromindustry.Managementfeesarealsoestimatedbasedonhistoricalratiosandvalues.


30

OpportunitycostofcapitalanddepreciationCapitalvalues,theopportunitycostofcapitalanddepreciationexpenseswereestimatedbasedonanimpliedcapitalrateof7percentandassumingadepreciationrateequaltothatinthemostrecentsurveyyearandacapitalupgraderate(anassumedcapitalinvestmentamount).

ManagementcostsTotalmanagementcosts(recoveredandnon‐recovered)for2013–14werebasedonAFMA’sbudgetedestimates.


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Appendix D: Productivity and terms of trade methodology

ProductivitymeasurementProductivityisdefinedasthequantityofoutputproducedwithagivenquantityofinputs.Forexample,apartialmeasureofproductivityforafishingvesselwouldbekilosofaparticularspeciesoffishproducedperhookused.Amorecompletemeasureofproductivitywouldbethetotalcatchperunitofallinputsused.Thisapproachispreferredasameasureofproductivityandisusuallyreferredtoastotalfactorproductivity.

Variousmethodshavebeendevelopedtoquantitativelyassesstotalfactorproductivitytrendsforindustriesandindividualenterpriseswithinindustries(seeCoellietal.2005fordiscussion).Afrequentapproachtomeasuringproductivitytrendsusesindexnumbertheory.InthisreportaFisherquantityindexisusedtomeasuretotalfactorproductivitytrendsforkeyCommonwealthfisheries(BoxD1).Fishery‐levelinput,outputandtotalfactorproductivityindexeswereestimatedforeachoftheCommonwealthfisheriesanalysedandforeachyearwheredatawereavailable.TheFisherquantityindexiswell‐suitedtohandlingtherangeofinputsandoutputsrecordedinABARESfisherieseconomicsurveydata.Forexample,ABARESfisherieseconomicsurveydatacontainmanyzeroentries,whicharewellhandledbytheFisherquantityindexapproach.

Aswithotherindexnumberapproachesthatmeasureproductivity,theFisherquantityindexenablesmeasurementofproductivitytrendswithmultipleinputsandoutputs.Thepricespaidforinputsandreceivedforoutputsareusedasweightstoderiveaggregationsofoutputsandinputs,whichareexpressedinindexform.OutputandinputindexesareestimatedusingbothLaspeyresandPaascheindexapproaches.AgeometricmeanoftheseindexesisderivedtodeterminetheFisheroutputandinputindexes.TotalfactorproductivityismeasuredastheratiooftheFisheroutputandFisherinputindexes.

TermsoftrademeasurementABARESconstructsatermsoftradeanalysisusingthesameprocessasisusedforTFP,exceptconstructingFisherpriceindexesratherthanFisherquantityindexes.Thepriceindexaccountsforthepricesoflabourandfuel—themajorcostcomponents—andthecostsofrepairingandmaintainingcapital.

DataDatausedforthistotalfactorproductivityanalysisaresourcedfromtheABARESAustralianfisheriessurveysdataset.ThesurveysdatasetcomprisesphysicalandfinancialsurveydataforasampleofvesselsoperatinginkeyCommonwealthfisheries.Theinputsincorporatedintheinputindexesforeachfisheryarelabour,fuel,repairsandcapital.Theoutputindexesforeachfisheryaredescribedintheresultssectionforeachindividualfishery.Populationestimatesarederivedusingsamplevesseldatafromthisdatabaseandarecalculatedforeachofthefisheriesanalysedinthisreport.Aweightiscalculatedforeachboatinthesample,torepresentitsimportanceinthetotalunobservedpopulation.Theweightisgenerallybasedonthevessel’scatchrepresentation.Weightedvessel‐levelinformationisusedtoderivefisherylevelinputandoutputindexes.


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Box D1 Fisher index

Usingpriceandquantitydataforasetofoutputs(andseparatelyforinputs),theLaspeyresquantityindexQ canbedefinedas:

N

ii

itiN

i ii

N

i itiLt q

qW

qp

qpQ

10

0

1 00

1 0

0

where

N

i ii

iii

qp

qpW

1 00

000

istheshareofithiteminthetotalvalueofoutputsorinputsinthebaseperiod(denotedby0).TheLaspeyresindexcomparesatotalquantityintimeperiod t toabaseperiod.

ThePaascheindex(PtQ 0 )isdefinedas:

1

0

1

1 0

10

it

iN

i itN

i iit

N

i ititPt q

qW

qp

qpQ

where

N

i itit

ititit

qp

qpW

1

istheshareofithiteminthetotalvalueofoutputsorinputsinthecurrentperiod(denotedbyt).LiketheLaspeyresindex,thePaascheindexcomparesatotalquantityintime t toabaseperiod 0 .

TheFisherindex(FtQ0 )isthegeometricmeanofLaspeyresandPaascheindexes,definedas:

Pt

Lt

Ft QQQ 000

TheTFPindexcanbecalculatedastheratiooftheFisheroutput(Q andinput Q )indexes:

TFP QQ

Thetermsoftradeindexisconstructedbythesamemeansasabove,exceptwitheveryinstanceofQreplacedbyPandeveryinstanceofPreplacedbyQ.

InputsandoutputsTotalinputsconsistofitemsthatcanbesplitintothreemajorgroups:

Capital—accountforallcapitalitemsassociatedwiththefishingbusiness.Theseincludetheboat,hull,engine,onboardequipment,vehiclesandsheds.Theestimateofcapitalisbasedonthedepreciatedreplacementvalue.FortheTFPanalysiscapitalinputsaredaysfished,weightedbytheopportunitycostofusingboatcapital.Forthetermsoftradeanalysisthepriceisthecostofmaintainingandrepairingboatcapitalfortheyear.

Fuelcosts—includethecostsofallfuel,oilandgrease.Thequantityvariableusedforallfuelistheaverageoffuelusedeflatedbythefuelpricepaid.

Labour—includesthenumberofcrewemployedinboat‐relatedaspectsofthefishingbusiness,suchascreworonshoreadministrationcosts,butdoesnotcoverthecostofonshorelabourinvolvedinprocessingfisheriesproducts.Itcoversowner/partner,familyandunpaidlabour.


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Outputsarethespeciescaughtbyvesselsineachfishery.IntheETBF,thesespeciesareprimarilyswordfish,yellowfintuna,stripedmarlin,bigeyetunaandalbacore.Thepricevariableisthepricereceivedforthespeciescaughtandthequantityvariableisthekilogramsofeachspeciescaughtbyindividualvessels.


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References AFMA2011,ETBFHarvestStrategySimplified,AustralianFisheriesManagementAuthority,Canberra,availableatafma.gov.au/sustainability‐environment/harvest‐strategies.

——2014,Objectives,functionsandpowers,AustralianFisheriesManagementAuthority,Canberra,availableatafma.gov.au/about/objectives‐functions‐powers.

Coelli,TJ,Rao,DSP,O’Donnell,CJ&Battese,GE2005,Anintroductiontoefficiencyandproductivityanalysis,2ndedn,Springer,NewYork.

DAFF2007,CommonwealthFisheriesHarvestStrategy:policyandguidelines,DepartmentofAgriculture,FisheriesandForestry,Canberra.

Elliston,L&Cao,L2004,ManagingeffortcreepinAustralianfisheries:aneconomicperspective,AustralianBureauofAgriculturalandResourceEconomicseReport0.45,preparedfortheFisheriesResourcesResearchFund,Canberra.

FAO2015,GlobalProductionStatistics1950–2013,electronicdataset,FisheriesGlobalInformationSystem,FoodandAgricultureOrganizationoftheUnitedNations,Rome.

Kompas,T&Che,TN2004,AbioeconomicmodeloftheAustralianNorthernPrawnFishery:managementoptionsunderuncertainty,AustralianBureauofAgriculturalandResourceEconomics,Canberra.

——2008,MaximumeconomicyieldintheSouthernandEasternScalefishandSharkFishery,ABAREreporttotheFisheriesResourcesResearchFund,Canberra.

Larcombe,J&Bath,A2015,‘EasternTunaandBillfishFishery’inPatterson,H,Georgeson,L,Stobutzki,I&Curtotti,R(eds),Fisherystatusreports2015,AustralianBureauofAgriculturalandResourceEconomicsandSciences,Canberra.

Vieira,S,Perks,C,Mazur,K,Curtotti,R&Li,M2010ImpactofthestructuraladjustmentpackageontheprofitabilityofCommonwealthfisheries,ABAREresearchreport10.01,AustralianBureauofAgriculturalandResourceEconomics,Canberra.

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