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The Icelandic
ITQ System |
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When the ITQ system was first implemented
in 1984, each fishing vessel over 10 tons was allotted a fixed proportion
(aflahlutdeild) of future total allowable catches of cod and five
other demersal fish species. Catch-quotas (aflamark) for each species,
measured in tons, were allotted annually on the basis of this permanent
ITQ-share. Thus, while a vessel's annual ITQ allotment would vary
in size with the total allowable catch, its permanent ITQ-share
remained constant. Moreover, a new licensing scheme stipulated that
new vessels could only be introduced to the fisheries given that
one or more existing vessels of equivalent size were eliminated
in return. |
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This arrangement did not go uncontested,
for there were heated debates about what to allocate and to whom.
The issues involved illustrate the conflict between the assumptions
and rationalities of the discourse of different groups of 'producers'.
Boat-owners argued for 'catch-quotas', to be allocated to their
boats, claiming that they alone are entitled to the rents produced
by the ITQ system. The traditional usufruct rights of boat owners,
they argued, should be transferred into permanent 'ownership' of
the fishing stocks in the form of a fixed share of the catch, a
transferable quota. For them, the ITQ system was only a logical
extension of the cod wars; a 'rational' use of resources could only
be expected as long as the ones who used them were dependent upon
them as owners. Some fishermen, on the other hand, advocated an
'effort-quota', to be allocated to skippers or crews. In fishing,
they argued, value was created through the application of their
expertise and labour power and not that of the equipment, the boat
and the fishing gear. Under a system of effort-quotas successful
skippers would be rewarded for their exceptional contribution to
the economy by an extra catch. Fishermen often insisted that as
the 'real' producers of wealth they were entitled to quotas. As
one skipper put it: |
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who has more rights concerning quota-payments . . ., the man
who hires crew-men, the one who finds the fish and brings the
catch ashore, or the boy who inherits the boat of his father
but has never been at sea?
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The allocation of quotas to skippers
on the basis of their 'fishiness', some skippers argued, would be
economical in the long run; costs and effort might be significantly
reduced by making fishing the privilege of the most efficient skippers. |
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The authorities partly conceded to
such criticism when revising the regulatory framework of the ITQ
system, and in 1985 it was decided that henceforth all vessels with
fishing licences would be permitted to choose between the ITQ system
and the effort-quota system. It turned out that quite a few were
willing to bet on the effort-quota and the skipper. However, in
1988 the effort-quota system was made a significantly less attractive
option, and it was finally abolished in 1990. The ITQ system has
been revised several times. |
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Table 1 shows some important moments
in the history of the ITQ system. One of the major changes relate
to the transferability of ITQs. In order to achieve maximum efficiency,
many economists assume, fishing rights must emulate private property
rights to the fullest extent possible (14,15,16,17).
In effect, this requires them to be incorporated into the market
system, where they need to be quantifiable, fully divisible and
independently tradable rights, held by individuals and companies
on a long-term basis. ITQ systems are generally thought to be a
particularly suitable means of achieving these ends. To begin with,
however, the Icelandic ITQ system only partly conformed to the ideals
of commoditization set out by resource economists. While ITQ shares
could be leased relatively freely, they could only be bought or
sold en masse along with the fishing vessel to which they were originally
allotted; that is, they were not fully divisible or independently
tradable. Moreover, the ITQ system had not been permanently instated.
Quotas did not, therefore, constitute true private property rights
(18,19,20).
Nevertheless, the system introduced to the Icelandic fisheries in
1984 was an individual transferable quota (ITQ) system, albeit one
which set restrictions on transferability. Eventually, in 1990,
several radical alterations were made to the existing ITQ system.
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The rationale for the new laws was
a complex one, incorporating, among other things, a marked shift
in emphasis from the exclusively ecological objective of maximum
sustainable yield (MSY) to the economic goal of maximum economic
yield (MEY).18 Firstly, the effort-quota system was abolished, and
all the vessels previously fishing under that system were incorporated
into the ITQ system proper. Secondly, the system was further extended
by allocating ITQ shares to approximately 900 smaller vessels (6-10
tons) that had been fishing under fleet-quota restrictions. As a
result, the number of ITQ-holders increased by 156% (from 451 in
1990 to 1155 in 1991). Thirdly, the ITQ system was extended to include
the fisheries of five new species: herring, capelin, shrimp, lobster
and scallop. Finally, and arguably most significantly, the ITQ system
was extended indefinitely into the distant future and ITQs became
fully divisible and independently transferable, making ITQs more
akin to permanent property rights. These changes, in effect, marked
the full institution of the ITQ system in the demersal fisheries,
culminating the process of enclosure and privatization initiated
in 1984. |
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The following analysis, based on
descriptive statistics, focuses on changes in the actual distribution
of fishing rights from the onset of ITQ management in 1984. One
event in the history of the ITQ system makes temporal distributional
comparisons of ITQs particularly problematic: that is, the inclusion
in 1991 of approximately 900 small boats (6-10 tons). While it is
of great interest to examine the fate of the small-scale ITQ-holders
that were incorporated into the system in 1991, their addition precludes
a meaningful comparison with distributions before this time. The
solution we propose to this problem is to tackle these issues in
two separate analyses. On the one hand, we examine and compare the
distributions of ITQs before and after 1991, excluding all 6-10
ton boats in the latter period, and thereby making comparison with
the earlier period more valid. On the other hand, we provide an
exclusive analysis of the latter period, including all boats with
ITQs. This will enable us to observe to a greater extent the impact
of the 1990 fisheries management legislation on the operators of
smaller vessels with ITQs. Our analysis is restricted to the demersal
fish species (cod, haddock, redfish, saithe, Greenland halibut,
and plaice) that were originally subjected to ITQ management in
1984. These six species are of great economic significance to Icelanders,
with cod being by far the single most important. In order to present
our results in the clearest manner possible, a single measure is
used to represent ITQ holdings in these six species. This is the
so-called 'cod equivalent' (þorskígildi), a measure
that is based on the relative market values of the different species;
essentially, it is a means for converting the value of fish species
into the 'currency' of cod. |
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