Max Nielsen FOI, University of Copenhagen, Denmark Ola Flaaten University of Tromso, Norway

1. Socio-economic return in Nordic fisheries Paper presented at the 19th EAFE Conference, Malta, 6-8 July 2009 Max Nielsen FOI, University of Copenhagen, Denmark Ola Flaaten University of Tromso, Norway Staffan Waldo AgriFood Economics Centre, department of Economics, SLU, Sweden.

2. Outline • Purpose • Definitions • Model • Cases • The size of the socio-economic return • Current • Maximum • Conclusions

3. Purpose • Study made for the Nordic Council and presented for the Nordic fisheries Ministers at the Faroe Islands in 2006 • To focus on the Nordic fisheries in a socio-economic perspective • The purpose of fisheries management • Socio-economic return • Operational profit • Regional policies – populate remote areas and employment • Fleet structure – coastal fisheries • Focus on the socio-economic return

4. Definitions Socio-economic return of fisheries: A net-surplus which on a given time is left for the remuneration of capital and labour beyond what is achieved in other businesses. Calculation: Turnover – costs (excluding for labour and capital) – costs of labour in alternative use – costs of capital in alternative use Socio-economic return Maximum socio-economic return: The annual maximum remuneration which in the long run is left after payment of capital and labour beyond what is achieved in other businesses

5. Current and maximum socio-economic return

6. Current and maximum socio-economic return in multi-species fisheries • Biology: • Based on ICES ACFM advise – SSB and fishing mortality • MSY determined by assumption as the SSB which gives the largest possible sustained yield • Fishing mortality assumed sustainable and includes risk through recruitment -> shift curve up/down

7. Model Socio-economic return: Maximum socio-economic return: given DS1 = 225, 300 Economic model Biological model , for i = 1…n and for i = 1…n , where , for i=1…n

8. Cases • Individual transferable quotas in the Icelandic trawler fishery. • Individual non-transferable quotas in the Norwegian coastal fishery. • Days-at-sea regulation of pair-trawler fishery at the Faroe Islands. • Rations regulated pelagic fishery in Sweden. • Licence regulated mussel fishery in Denmark.

9. Cases

10. Size of the current socio-economic return

11. The maximum socio-economic return • Methods: • Bio-economic model • No. of days at sea determined • Assumptions: • Unchanged fleet structure and unchanged fishing pattern. • Fishing mortality today is in accordance with the precautio-nary principle. • The state of stocks for stocks without biological information follow the state of the stocks for which information is available. • The maximum capacity utilisation is 300/225 days.

12. The maximum socio-economic return • The socio-economic return can be over-estimated in Iceland, the Faroe Islands and Norway • The socio-economic return can be increased in all cases. • The relative low maximum socio-economic return in Norway reveal structural relations related to regional priorities

13. The maximum socio-economic return Fleet adjustment – reduction in no. of vessels: Reduction in no. of vessels on 50-77%

14. Conclusions • Fisheries have socio-economic potential • The size of the socio-economic return: • Positive of varying degree in 3 of 5 cases • Can increase in all cases • Improved fisheries management is the key – biologically and economically