4 results

Demand Conditions and Dynamics in the Southern and Eastern Scalefish and Shark Fishery: Empirical Investigation

Project number: 2018-017
Project Status:
Completed
Budget expenditure: $146,216.00
Principal Investigator: Sean Pascoe
Organisation: CSIRO Oceans and Atmosphere Hobart
Project start/end date: 4 Nov 2018 - 29 Jun 2020
Contact:
FRDC

Need

The FRDC HDR has identified the lack of information on markets and price formation in Australian fisheries as a major research gap. The need for such analyses has also been discussed within the AFMA Economics working group, as such information was seen as essential in supporting fisheries management.

This project is an attempt to reduce this research gap. In doing so, the information produced will be of benefit to fisheries managers, fishers and the broader community as we move our fisheries closer to maximising net economic returns.

The focus of this study is on the markets relevant to the Southern and Eastern Scalefish and Shark Fishery (SESSF), which is the main supplier of fresh fish to the Sydney and Melbourne markets. To date, only very limited empirical research has been conducted for these fisheries in Australia [4-6], most of which is now fairly old and is unlikely to be valid for current market conditions. Since the early 2000s the seafood market in Australia has changed, for example, due to increasing seafood imports and increasing domestic aquaculture production. Hence, market dynamics for products supplied by domestic fisheries may have also altered.

This case study was identified by the FRDC HDR as of high importance due to the current challenges facing the fisher in terms of unfilled quotas. One potential contributing reason that quotas are not being taken is that to do so would result in lower prices; of potential benefit to consumers but not to producers. Instead, the lower catches may be supporting higher prices. The outcomes of this project can provide insights into the extent of to which the marker is contributing to quota undercatch.

The study will focus on the impact of changes in supply on the price received on the markets. While the potential response of fishers to these changes in price (including avoiding large catches) is also of relevance to fishery managers, this will require further bioeconomic modelling work that is beyond the scope of this study, but may be seen as a high priority for future research.

Objectives

1. Estimate the degree of integration between the different species and between the markets for fresh fish in Sydney and Melbourne
and
2. Estimate the short term and long term effects of changes in quantity supplied of key species in the Southern and Eastern Scalefish and Shark Fishery (SESSF) on the price received on the Sydney and Melbourne fish markets

Final report

ISBN: 978-1-925994-20-9
Authors: Sean Pascoe Peggy Schrobback Eriko Hoshino and Robert Curtotti
Final Report • 2021-02-01 • 5.37 MB
2018-017-DLD.pdf

Summary

This final report, a collaboration between economists from CSIRO, CQU and ABARES, is the first detailed analysis of the interrelationship between fish prices on the Sydney and Melbourne fish markets. In addition, the study derived empirical estimates of the own and cross-price flexibilities for the main species on the Sydney Fish Market.
Data for the Melbourne market were limited following the closure of the central market in 2010. Despite this, the results of the cointegration analysis indicate that the Sydney and Melbourne markets were highly integrated over the period of the available data. That is, prices for a given species on each market tended to move together. Hence, the two markets can effectively be considered a single market, at least for the key Southern and Eastern Scalefish and Shark Fishery species examined. Differences in prices on the markets can still exist due to differences in transport costs, but price variations beyond these transportation cost differences are temporary.
On the Sydney market, prices of most species were found to be not cointegrated (i.e., not substitutes), but some cointegration was observed. In particular, Blue-eye Trevalla was cointegrated with several species suggesting this may be a market leader or at least a highly influential species in the market. 
Imports were also found to be cointegrated with many of the species on the Sydney Fish Market, particularly imports of fresh fish. This indicates a strong substitution potential between imports and domestically caught fish, with increased import supply most likely having a negative impact on prices of Southern and Eastern Scalefish and Shark Fishery species.
From the results of the aggregated demand model, the increase in the quantity of imports has had a negative effect on the price of wild-caught species on the Sydney Fish Market over the last two decades, supporting the results of the cointegration analysis. Imports of fresh fish was found to have had a significant negative impact on the prices of species in the lower valued group in both the short and long term. While no short-term impact on high valued species was found, a small but significant negative impact was found in the long term. This suggests direct competition and potential for substitution between imports of fresh fish and the lower valued domestic fish species. In contrast, imports of frozen fish were found to complement lower valued species. That is, increased imports of frozen fish were related to increased prices for these lower valued species. No significant relationship between frozen fish and higher valued species was found. 
The increase in salmon production was also found to have had a negative impact of prices of both groups (high and low valued) on the Sydney Fish Market, more so that imports. 
At the species level, own-price flexibilities were generally found to be between -0.3 and -0.6, indicating that prices change less than proportionally with quantity landed (i.e., are relatively price inflexible). That is, a 10 per cent increase in quantity landed, for example, of each species would result in a 3 to 6 percent decrease in its own price. Cross-price flexibilities – the impact of landings of one species on the price of another – were also found to be small, mostly between 0 and -0.1. 

Project products

Brochure • 2021-02-01 • 2.89 MB
2018-017 - How demand analysis can help improve fisheries and aquaculture performance - SUMMARY BROCHURE.pdf

Summary

As it is currently applied in Australia, fisheries management is mainly focused on ensuring the sustainability of the resource while maximising the output from the fishery. This is largely achieved through setting total allowable catch (TAC) or equivalent effort restrictions to limit the quantity of landings from the fishery. In jurisdictions where economic outcomes are also important, more conservative catch and effort limits are generally set in recognition of the additional cost of harvesting the resource as stock size declines.
Conclusions: Changes in the quantity produced at the level of the industry can have an impact on the prices that producers receive. These price changes may extend beyond just one species in question, impacting also on potential substitute species. 
The critical measures of this change are the own and cross-price flexibilities. Own-price flexibilities define the percentage change in the price of a species due to a 1 per cent change in landings or production, while cross-price flexibilities represent the percentage change in a different species due to the production change of a given species.
Individually, own and cross-price flexibilities are generally small. In the case of key fish species, they are mostly between -0.5 and zero, indicating a less than proportional change in price with landings or production. However, this means that changes in revenues from, say, a TAC increase will result in a less than proportional change in revenue, and with cross-price impacts also, increasing TACs may result in negligible revenue improvements. Fisheries managers in particular need to be aware of these changes, as increasing a TAC does not necessarily mean better returns to the fishery. Conversely, higher returns may be earned at lower levels of catch due to the combination of higher prices and less cost in catching the fish.
While lower prices may be bad for producers, lower fish prices provide benefits to consumers. Hence, what is optimal for the fishery or aquaculture industry may not be optimal for the community overall. Including consumer benefits into economic analyses underlying TAC and other decisions that impact production is an area of further consideration by fisheries and aquaculture managers.

Development of a sustainable industry-based observation system for blue grenadier at the primary spawning sites

Project number: 2003-044
Project Status:
Completed
Budget expenditure: $434,670.00
Principal Investigator: Rudy Kloser
Organisation: CSIRO Oceans and Atmosphere Hobart
Project start/end date: 30 May 2003 - 30 Aug 2007
Contact:
FRDC

Need

This revised proposal focuses our original whole of ecosystem approach for blue grenadier biomass and its variability to be targeted on the development of the acoustic methodology. This refocusing has necessarily required the reduction of data collection and analysis in the environmental area. It is the considered view of the proponents (CSIRO Marine and Industry partners) that the environment variables should be explored in a more exploratory fashion within this proposal at a reduced cost. Specifically we address the refocusing and the need to explain how data collection and biomass estimation may evolve over the long term.

This project proposes to develop a cost-effective acoustic observation system that covers the primary canyon spawning locations in each of three years, and which can be implemented as an ongoing method (Kloser et al, 2001; report 99/111). In the development phase it will be necessary to carry out critical research to develop the acoustic methods to move from relative to absolute measures by understanding dominant species target strengths and identification of species. Outside the dominant canyon regions the ability to accurately identify blue grenadier is difficult due to lower density and association with other fishes of similar reflectance. Our ability to estimate biomass in this regions will be limited by species identification issues. Environment variability interpreted from acoustic recordings within and between seasons will be developed to provide ecosystem based information associated with biological, physical and oceanographic data. This research should assist to develop an understanding of the relationship between Blue Grenadier stock size their dynamics and the environmental variability leading to better management advise and MSC certification.

In the first year we plan to carry out an extensive survey using industry vessels to obtain a biomass estimate of the spawning blue grenadier. Industry vessel based acoustic surveys when planned and designed to minimise sampling error and biases should provide an index of abundance. These industry observations will be converted to an absolute assessment based on the fishes target strength, species composition and an estimate of fish turn-over on the spawning grounds. Critical research will be undertaken in this project to estimate target strength and species recognition of dominant species groups and reduce uncertainties identified in the acoustic method using information gained from a national facility research voyage in the second year. The target strength of the dominate fishes will be estimated by modelling the dominant fish species acoustic target strength as well as in-situ target strength and species composition measurements using a deep towed multi-frequency acoustic system and a targeted depth stratified biological net capture systems for identification. To model the acoustic scattering of blue grenadier it will be necessary to characterise the reflective components in the body of swimbladder, flesh, bone and lipids. This will be achieved by dissection, CAT scans and lipid extraction. Estimations of swimbladder size will be supplemented with measurements of fish buoyancy required at depth using a specialised pressure chamber. These measurements will enable a detailed scattering model to be developed and associated with in situ target strengths provide a conversion of the acoustic data to an absolute estimate of spawning biomass.

The industry and research vessel data collected at the canyon sites and on the upper slope need to be related to the larger-scale environment driving interannual variability. The high recruitment variability in this fishery is probably due to environmental factors and methods that can predict or indicate factors associated to recuitment variability are worth exploring. An earlier version of this proposal included developing low cost methods of measuring physical oceanographic, biological and biochemical metrics and comparing these to historical trends. The FRDC board and one reviewer were not supportive of this part of the proposal at this time. CSIRO Marine and Industry partners still consider that development of a balanced understanding of the biomass and the environment is worthwhile. During the project we will identify other environmental data that can be measured on an ongoing basis at low cost. In this proposal the field data collected will be related to available oceanographic information and form the basis of developing hypotheses on environmental connections. A separate proposal will follow to explore a more ecosystem based approach to the Blue Grenadier fishery management.

To advance low-cost, industry-based remote acoustic sensing methods in a strategic way requires scientific input. Once methodologies have been established and limitations identified, the stock assessment process can rely on industry acoustic data and the associated (optimized) physical and biological ground-truthing. Importantly, implementing industry-based observation systems will more formally integrate industry knowledge of fishery dynamics and variability within and between seasons into the stock assessment process. The ability to develop more integrated stakeholder based monitoring systems will provide greater ownership of the management process. In particular, the utility of industry acoustic data to provide a low-cost index of abundance for blue grenadier is an exciting prospect.

The success of this project will be determined by adoption of these results by management and industry and MSC certification. To ensure appropriate uptake of the research requires a close relationship between research providers and industry partners. To begin this relationships we have been working with the joint venture partners that hold 80% of the quota (Petuna Seafoods - Les Scott and Graham Patchel and Oceanfresh -Gerry Geen) in the industry and the associated vessels the Petuna Explorer, Ocean Dawn and Aoraki. Thus far we have trialed the acoustic monitoring method on all vessels that use the same Simrad ES60 38kHz acoustic equipment that is becoming an international standard. We successfully logged data from all the vessels during the previous winter and investigated capturing other biological and physical data with associated costs.

The industry joint venture partners have been very supportive in the pilot phase and in this proposal they will provide dedicated vessel time of two weeks in the first year as well as ongoing time for dedicated surveys in the second and third year. To ensure that the monitoring system is sustainable requires forward commitments by industry and researchers. Industry are committed to supporting the acoustic monitoring project and targeted environmental monitoring both in the short and if proved successful in the long term (see separate letter). During the project the best method of ensuring ongoing collection (at appropriate standards) and analysis of the data will be investigated under two main models. Firstly, that industry become the sole people responsible for data collection, analysis and reporting. Secondly, industry engage a suitable consultant (independent or government) to manage the continued data collection to agreed protocols and analysis of data. A necessary outcome of this research will be an appraisal of the most appropriate method to transfer the methodology. This objective will continue throughout the project and a close relationship with industry maintained through the co-principle investigator “Gerry Geen”.

Objectives

1. Develop and implement an industry-based acoustic monitoring system to provide an estimate of the absolute blue grenadier abundance and their dynamics at the primary spawning sites.
2. Develop the acoustic methodology to estimate target strength of the dominant species for absolute biomass assessment and investigate methods to determine species composition and reduce error.
3. Summarise the technical issues associated with the use of acoustic surveys to survey aggregated blue grenadier in the form of a how to guide and an estimation of error.
4. Evaluate the use of industry-based methods to monitor the ecological environment for sustainable fishing and sustainable ecosystems.
5. Evaluate the technology and best transfer of methodology for sustaining an industry-based optimised observation system its long-term use and incorporation into the management of the fishery.

Final report

ISBN: 9781921232602
Author: Rudy Kloser
Final Report • 2008-02-22
2003-044-DLD.pdf

Summary

Blue grenadier has the highest current TAC among SEF species and has two separate fisheries that target primarily either sub-adult fish year-round or mature adults in winter spawning aggregations. The sustainability of the fishery would be greatly enhanced with regular (sustained) monitoring of spawning stock size and an ability to predict annual recruitment strength. Monitoring the spawning stock size is problematic because data need to be taken for the duration of the spawning period which persists for several months. Sustained collection of the scientific information required to understand and predict the fishery biomass and dynamics in relation to the environment, particularly at this deep offshore location, would be very costly – in terms of both time and money if a dedicated scientific research vessel were to be used.  In this project we proposed to develop an acoustic method using fishing vessels suitably calibrated with appropriate protocols to survey blue grenadier schools and their prey throughout the spawning season.

This three year study has developed an industry-based acoustic observation system for blue grenadier at the primary spawning sites.

Modelling the population dynamics of high priority SEF species

Project number: 1997-115
Project Status:
Completed
Budget expenditure: $380,485.77
Principal Investigator: Robin Thomson
Organisation: CSIRO Oceans and Atmosphere Hobart
Project start/end date: 26 Jun 1997 - 30 Jul 2002
Contact:
FRDC

Need

The need for special research projects and individual stock assessments is detailed by the South East Fishery Assessment Group (SEFAG) and endorsed by SETMAC. The development of stock assessments for blue grenadier, and ling are high priority. Other species with high priority for quality stock assessment include blue warehou, redfish, blue-eye trevalla, and (following SETMAC 55) tiger flathead.

Blue grenadier is a species for which new data have become (or are becoming) available and for which there is a conflict between the relatively optimistic scientific advice (based primarily on an acoustic and an egg production estimate) and the more pessimistic view of several industry representatives. The stock assessment for this species will be accorded first priority. The other two species to be assessed wil be determined based on discussions with SETMAC, its research sub-committee and AFMA.

Objectives

1. Provide high quality population dynamics models and stock assessment advice for three SEF quota species for which there is immediate concern of stock status.
2. Work with industry and managers in developing population dynamics models in a manner that will improve the stock assessment in the SEF and its perception by industry.
3. Use the stock assessments to evaluate stock status against current management performance indicators and to provide advice on alternative performance indicators if necessary.
4. Evaluate the value (in terms of improved assessement) of future data collections and research studies for the assessed species.

Final report

ISBN: 1-876996-13-7
Author: Robin Thomson
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