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.
Communities
PROJECT NUMBER • 2017-010
PROJECT STATUS:
COMPLETED

A re-examination of underlying model assumptions and resulting abundance indices of the Fishery Independent Survey (FIS) in Australia’s SESSF

The model-based Fishery Independent Survey (FIS) for the Southern and Eastern Scalefish and Shark Fishery (SESSF) was developed in the lead up to the first survey in 2008 and is unique in a fisheries context in that it differs from a random stratified design, thereby allowing considerable...
ORGANISATION:
CSIRO Oceans and Atmosphere Hobart

Development of harvest strategies for selected SEF species

Project number: 2000-101
Project Status:
Completed
Budget expenditure: $128,294.00
Principal Investigator: Tony D. Smith
Organisation: CSIRO Oceans and Atmosphere Hobart
Project start/end date: 16 Oct 2000 - 15 Mar 2004
Contact:
FRDC

Need

Given AFMA’s need to satisfy its ESD objective, there is a need to consider uncertainty explicitly and identify performance indicators and harvest strategies that are as robust as possible to incorrect assumptions and misinformed interpretations of data. Use of these indicators and harvest strategies will improve the chances of achieving a reasonable balance between the conflicting objectives of long-term resource sustainability and the maximisation of economic gains.

The project also addresses to some extent two key research areas in subprogram (B) of the Wild Stock Program of the SCFA Research Committee: “Biological and socio-economic evaluation of alternative management scenarios for different species and categories of fishery to provide a framework for management planning” and “The evaluation and provision of harvest strategy models through comparison of management strategies using theory and case studies, establishing objective performance indicators for different jurisdictions and identifying options which are appropriate to the nature of the fishery”.

FRDC project 98/102 has already identified several areas where there is considerable uncertainty. However, that project has focussed on ‘generic’ data-poor species (although tailored to some extent to the actual situation for jackass morwong, pink ling, tiger flathead and spotted warehou, species that have been identified as ‘high' and 'medium' priority by SEFAG). Ideally, harvest strategy calculations should be tailored to particular species to achieve optimal outcomes. This project will evaluate harvest strategies for the four species that received initial focus in FRDC 98/102. FRDC 98/102 also focused on situations in which the fishery is based on a single gear-type only. However, it is increasingly being realised within SEFAG that even within the trawl sector there are sub-fleets, each of which differ substantially in terms of their selectivity. For example, for blue warehou, the trawl fleet off New South Wales has a selectivity pattern closer to that of the non-trawl fleet based at Lakes Entrance than that of the trawl fleet based in Portland.

One of AFMAs legislative objectives relates to providing cost-effective management. Increasingly industry is being expected to bear some of the costs associated with the monitoring on which stock assessments and hence TACs are based. There is therefore a need for an objective process for determining the trade-off between monitoring costs and the ability to which AFMAs management objectives are satisfied. The aim of this study is to examine this question within the scope of the trade-off between catch and risk.

Finally, there is a major need for stock assessment on more species in the SEF. However, although data for many species is poor, there are nevertheless fewer assessments than there could be due to a lack of software for conducting the increasingly complicated assessments demanded by stakeholders. FRDC 98/102 has developed software modules for implementing several commonly applied stock assessment methods (including “Integrated Analysis” – the basis for the current assessments for blue grenadier, school whiting, eastern gemfish, and blue warehou). If the detailed output from the software that implements these assessment methods could be available in an easily useable and visual form, this software could provide a better basis for conducting routine stock assessments.

Objectives

1. To extend the general SEF operating model for evaluating harvest strategies and performance indicators to deal with fisheries subject to exploitation using multiple gear-types / fleets.
2. To develop a user interface for the software used to conduct stock assessments and evaluate harvest strategies in the SEF, and to improve the presentation for non-experts (non-quantitative biologists, managers and industry) who may wish to use the software.
3. To parameterise the general operating model using the actual data for redfish, pink ling, tiger flathead, and spotted warehou and hence select robust assessment methods and harvest strategies for these species.
4. To evaluate the costs and benefits associated with different data acquisition strategies for these species (with particular reference to fishery-independent survey techniques).
5. To develop the modeling software in a manner which lends itself to tailoring (by CSIRO and other agencies) to suit other Commonwealth or State fisheries.

Final report

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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