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Individual Transferrable Quotas: New Zealand’s Experience. New Zealand Fisheries Waters. Large EEZ (4.4 million km 2 ) 70% below 1,000 m Medium productivity Commercial Fisheries Non-commercial Fisheries. Reform Context (early 1980s). Classic fisheries issues Inshore stocks overfished

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Individual transferrable quotas new zealand s experience

Individual Transferrable Quotas: New Zealand’s Experience


New zealand fisheries waters
New Zealand Fisheries Waters

  • Large EEZ (4.4 million km2)

  • 70% below 1,000 m

  • Medium productivity

  • Commercial Fisheries

  • Non-commercial Fisheries


Reform context early 1980s
Reform Context (early 1980s)

  • Classic fisheries issues

    • Inshore stocks overfished

    • Commercial fisheries over-capitalised

    • Unprofitable, uncompetitive, rent dissipation

    • Declining recreational fishing

    • Risk of extending problems to newly developing deepwater fisheries


New zealand s response
New Zealand’s Response

  • Objectives of the Quota Management System

    • Primarily economic drivers

    • Restore profitability to inshore fisheries

    • Avoid over-capitalisation in new deep-water fisheries

    • Limit catches to MSY

    • QMS in place since 1986, after 25+ years experience everyone has adjusted


Quota management system qms
Quota Management System (QMS)

  • Several refinements have been made since 1986 but the basic tenets remain:

    • Setting catch limits

    • No discarding QMS species

    • Individual Transferable Quotas (ITQs)

    • Markets determine allocation of commercial effort

    • Monitoring and enforcement


New zealand s itqs
New Zealand's ITQs

  • Species and area specific

  • Perpetual and transferable

  • Generate ACE (annual catch entitlement)

  • Some ownership restrictions

    • Maximum holdings (aggregation limits) 10-45% of TACC

    • No foreign ownership

  • Ongoing allocation only via ITQ and ACE trading


  • Cost recovery subsidies
    Cost Recovery/Subsidies

    • NZ originally considered resource rentals based on the decision to allocate quota without tender process

    • Now use cost recovery mechanism to charge quota holders selected government costs (e.g. observers, fisheries research, administration)

    • No subsidies in QMS system; quota owners pay c. 30-35% of government costs


    Outcomes
    Outcomes

    • Reflect two primary policy objectives of QMS

      • Resource sustainability delivered

      • Economic performance improved






    Challenges unique to qms
    Challenges unique to QMS

    • Designing systems to administer and audit QMS

    • Required refinements to suit local conditions and policy requirements

    • Social impacts anticipated and managed

      • Social dislocation in small coastal fishing communities

      • Growth in large vertically-integrated fishing ports



    General conclusions
    General conclusions experience?

    • QMS objectives focused on economic efficiency

      • NZ’s ITQ design choices reflect this objective

      • If you have other management objectives,

        … the design of your rights based management regime would be different


    General conclusions1
    General conclusions experience?

    • NZ’s policy design features allowed for controlled industry restructuring

      • Building legitimacy and collaboration is key to success

      • Quota allocation on catch history basis

      • Strongly specified ITQ (perpetual, tradable and enshrined in law)

      • Provides certainty/security for investment

      • Quota ownership limits


    Other key considerations
    Other key considerations experience?

    • Avoid disadvantaging competing sectors

    • Design policy to encourage collective responsibility

    • Do not overlook importance of integrated planning


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