Technological progress and capacity estimations

- Management implications for the Danish cod trawl fishery

Erik Lindebo, SJFI

Copenhagen, Denmark

• Capacity management

• Baltic cod fishery• Baltic cod fleet• Investment & tech. progress

• Analysis: Dataset• Analysis: Technological progress• Analysis: DEA capacity estimates

• Limitations • Management implications

• MAGPs 1983 to present• 1990’s – Danish fleet reduced by over ¼ (GT, kW)• Strict policy and limited fleet renewal• 2000-01 expansion allowed under current MAGP targets 23% (GT) and 26% (kW) 19% (GT) and 29% (kW) for trawl segment

Capacity management

• Tech. progress allows: Increase production level given effort or Maintain production level whilst reducing effort

• International estimates of 2-3% per annum

• Paper partly based on EU study (UK, France, Holland and DK) “The impact of technological progress on fishing effort”

• Danish cod trawl fishery in the Baltic Sea

Impact of technological progress

Baltic Sea

Sweden

Norway

Finland

Denmark

Germany Poland

Russia

Bornholm

Lithuania

Latvia

Estonia

• Cod fishery is the most valuable in Denmark • Fine balance between human and environmental factors• Winter months – high season• Eastern and Western cod stocks• ICES recommends reduction in fishing mortality• 1980-90’s has seen a boom-and-bust period• Problems expect to intensify due to stock problems in North Sea

Baltic cod fishery

Volume/value of cod landings, 1987-99

05.000

10.00015.00020.00025.00030.00035.00040.00045.000

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Volu

me

(to

nn

es)

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

Val

ue

(100

0 D

KK

)

Volume of cod landings Value of cod landings

• Trawling vessels dominate• Mobile fleet with variable strategies• Influx of larger vessels from North Sea during boom period• Later years – smaller, flexible vessels have dominated• Managed by quota rations, mesh sizes, closed seasons etc.

Baltic cod fleet

• Tightening of capacity-enhancing project investments• Renovations, electronics, fish handling, engines, safety equip.• Limited incentives since cod decline in 1992-93

• Qualitatively analysed through industry interviews and literature

Investments & tech. progress

Progress of cod trawling fleet, 1987-99

------------------------ Perceived impact ------------------------

Innovations/issues

Change 1987-99 Increased

landings Cost

reduction Product Quality Safety

Hull - size/shape, layout, construction Limited - + - ++

Engine - power, configuration, aux. engines, propeller Yes ++ ++ - -

Fishing gear - trawl size/construction, lines/warps, drums, winches/haulers Yes ++ ++ + +

Electronics - fish finder, net sensor, autopilot/GPS/radar, communication, computer Yes + ++ - ++

Processing & storage - gutting/filleting, chilling/ storing Limited - + ++ +

Markets Limited - - + -

Quota regulations Yes - - - -

Note: (++) significant positive impact, (+) positive impact, (-) no impact or negative impact

• 23 trawlers actively fishing Baltic cod (sub-fleet)• February, 1987-99• Made specific to enable the use of cod stock (SSB) information• Directorate of Fisheries data variables such as:

Landing data (cod/other), days at sea, landing declarations, GT, kW, length, age, insurance value, homeport, fishing gear, SSB (two stocks), tech. progress dummy

Analysis: Dataset

• Undertaken by Jim Kirkley and Cathy Morrison • Standard economic analytical procedure (technical change)

• Sub-fleet production was –3% per annum• Sub-fleet CPUE declined over the period• Insurance value is representative of progress • Vessels varied in extent of contribution to overall tech. progress • Sub-fleet tech. progress of 1.8% per annum

Analysis: Technological progress

-2

0

2

4

6

8

10

19

87

-88

19

88

-89

19

89

-90

19

90

-91

19

91

-92

19

92

-93

19

93

-94

19

94

-95

19

95

-96

19

96

-97

19

97

-98

19

98

-99

Ye

ar

to Y

ea

r/M

ea

n

0

5

10

15

20

25

Cu

mu

lati

ve

Year to Year Mean 87-93 Mean 94-99 Cumulative

Technological change for trawling sub-fleet, 1987-99

• Mathematical linear programming technique, estimating the relative efficiency of vessels• Potential capacity output given inputs• Capacity utilisation (CU)……see Table 5 on page 17

• Vessel CU range 0.52-0.92 (1987-99 average) • Sub-fleet CU 0.73 (1987-99 average)• CU scores are worse in later years

• Bornholm have fewer problems with capacity• Vessels with lowest CU show greater tech. progress

Analysis: DEA capacity estimates

• Results for 23 vessels cannot be aggregated to fleet level • No annual data to take account of flexible fishing strategies and objectives of investments• No distinction between cod and other fish landings • Impact of management regulations (quota rations) will determine investment incentives and capacity utilisation

• DEA analysis Revenue-based approach Larger vessel sample with annual data

• Tentative results due to vessel-specific and seasonal data

Limitations

• Vessels with high tech. progress have low CU increased potential has not been realised due to restricted quota rations• Better CU for Bornholm vessels

• Technological progress – not uniform over time and driven by fisher incentives (stock status)

• Capacity problems in analysed fleet • Fishing industry acknowledges that there is overcapacity possible capacity expansion under MAGPs (trawl segment)?

Question validity and objectives of MAGP targets

Management implications

Grazie