Demand Conditions and Dynamics in the Southern and Eastern Scalefish and Shark Fishery: Empirical Investigation
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.
Final report
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.
A re-examination of underlying model assumptions and resulting abundance indices of the Fishery Independent Survey (FIS) in Australia’s SESSF
SESSF Monitoring and Assessment – Strategic Review
There is increased awareness of the need for ecosystem-based fisheries management, with increased public expectations for sustainable management of fished stocks. However, reduced catch levels and increasing costs have stimulated industry calls for reductions in management costs, or for more effective use of the existing cost-recovered funds. Budget limitations have already led to annual fishery independent surveys (FIS) carried out less frequently, reduced observer monitoring (ISMP) to fund other projects, alternation of FIS and ISMP from year to year, use of Crew Member Observers (CMOs) to collect on-board length frequencies, retaining species at lower tier assessments instead of Tier 1 assessments, ad-hoc implementation of more multiyear TACs combined with adhoc implementation of break-out rules, reduction of the frequency of Tier1 stock assessments, and the postponement of critical Tier 1 stock assessments. Whilst all of these approaches are feasible and practical responses, their combined influence on the effectiveness of the monitoring and assessment at achieving desired management objectives has not been tested or demonstrated.
Current budget restrictions on AFMA have resulted in a departure from scheduled monitoring and assessment work, with increasing ad-hoc decisions about which components of that work undertaken each year. There is growing concern by stakeholders that the present monitoring and assessment program is incapable of addressing these developments. SETFIA and other industry associations are particularly concerned that fishing concession levies funding current arrangements will become unaffordable.
Given AFMA's legislative objectives to ensure ecologically sustainable development, to maximise net economic returns and to ensure cost-effective fisheries management, AFMA has proposed this project to develop proposals for a structured and cost-effective research, monitoring and assessment program to respond to requirements and emerging issues in the SESSF over the next 5 years. It may be possible to extend this horizon should a fully quantitative project follow this proposal.
Final report
Research to underpin better understanding and management of western gemfish stocks in the Great Australian Bight
The CTS and GABTS operate in geographically separate areas and have different catch and effort histories. Analysed separately, both fisheries show substantially different levels of exploitation and depletion of gemfish. The recent quantitative assessment combines both sectors and provides a single RBC.
The rationale for combining both stocks is based on previous genetic research (Colgan and Paxton, 1997) suggesting there is a single unit stock for western gemfish, which is independent from eastern gemfish. However, their results may not accurately reflect extant population subdivision for gemfish in the Bass Strait area and westwards. Few locations were sampled in this area by the Colgan and Paxton study, sample sizes per location were low and the power of their genetic analysis was well below what can now be achieved with the latest technology.
The lack of accurate information on the biological stock structure of western gemfish is confounding assessment, management and allocation of the resource between fisheries.
A study incorporating more robust genetic data (larger sample sizes and two different genetic markers), is likely to provide a more definitive clarification of population structuring for this stock. These data can also clarify the boundary between western gemfish and overfished eastern gemfish. Analysis of gonad index and length frequency data are likely to improve our understanding of the timing and spatial extent of spawning for this species, and assist in defining spawning populations of gemfish. These results will directly inform management boundaries, stock assessment analyses, the setting of RBCs and TACs, the apportionment of catch and our understanding of the movement and spawning of this species.
Final report
Gemfish (Rexea solandri) is a benthopelagic snake mackerel of the Family Gempylidae. Gemfish is found on the continental shelf and slope in southern, southwestern and southeastern Australia and New Zealand. It is found at depths ranging from 100 to 800 metres, but commonly at 300 to 450 metres. Historically Gemfish formed part of a large trawl fishery off the east coast of Australia in the 1970s and 1980s. Catches peaked between 1978 and 1980 at around 5,000 tonnes per year, declining substantially after 1987. The east coast fishery remains in an overfished state with an unavoidable bycatch limit of 100 T. The most recent stock assessment estimated spawning biomass at 15 per cent of the 1968 level.
Fisheries for Gemfish have operated off western Tasmania, south western Victoria and south eastern South Australia as part of the Commonwealth Trawl Sector (CTS) of the Southern and Eastern Scalefish and Shark Fishery (SESSF) and in Great Australian Bight as part of the Great Australian Bight Trawl Sector (GABTS) of the SESSF. These fisheries are managed as a separate stock to the east coast and have a substantially different fishing history and level of exploitation. The most recent stock assessment of the western stock suggested biomass is at 74 per cent of virgin biomass levels.
Great Australian Bight Resources Assessment Group (GABRAG) had sufficient concerns regarding the population structure of the western stock and its impact on the stock assessment (whether western Gemfish constituted a single population and where the boundary between east and west arises) to reject the assessment.
Previous research found genetic subdivision between the eastern stock of Gemfish (eastern Australia including eastern and western Tasmania) and a western stock (South Australia, GAB and Western Australia). Mitochondrial DNA (mtDNA) data showed differences following the same pattern as previous data, but suggested a much stronger division between the two stocks. Both data sets suggested there were no genetic differences between eastern Australia and New Zealand. However, it was unclear whether these findings were confounded due to scientific design (i.e sample size).
This project was initiated through GABRAG to address these stock structure issues and was a collaboration between the Australian Bureau of Agricultural and Resource Economics and Sciences (Andy Moore) and the Molecular Fisheries Laboratory at the University of Queensland (Jenny Ovenden, Carlos Bustamante and Andy Moore). The expectation was that this study would confirm the distinction between the eastern and western stocks, particularly as the classes of genetic markers used for this study mirrored those used previously.
The objectives of this project were to:
1) Improve understanding of stock structure for Western Gemfish west of Bass Strait;
2) Improve understanding of spawning locations for western Gemfish west of Bass Strait; and
3) Provide the Australian Fisheries Management Authority with recommendations on stock structure and boundaries on the basis of this evidence.
Fish were sampled from the mid-western Great Australian Bight (GAB), from two locations off the southwestern Victorian coastline at Kangaroo Island, (KI) and Portland (Por), from one location in western Bass Strait (WBS) and from one location off the coast of western Tasmania (WT).
To provide genetic comparisons among these target populations, fish were also sampled from the east coast of Tasmania (ET), the eastern coast of New South Wales (NSW) as well as New Zealand (NZ).
Previous research had found large genetic differences between eastern and western populations. However there was large sample size variation between both locations and it was unclear if the genetic differences were the result of biological processes or a sampling artefact. Archived historical samples from this study were obtained from the Australian Museum to confirm the previous results and to test for temporal stability of genetic patterns.
This study confirmed that there are two distinct stocks of Gemfish in Australia, with western Bass Strait the boundary between both stocks. The level of differentiation between the stocks for all genetic markers was high. This, along with the largely fixed mitochondrial haplotype differences between populations indicated minimal gene flow between stocks. This level of genetic structuring for a migratory marine finfish species with planktonic larval dispersal and contiguous distribution is very rare. For fisheries management purposes Gemfish to the east and west of Bass Strait can be managed as separate management units.
Immigrant Gemfish were found in both east and west stocks. These immigrants were classified as hybrids as they had the nuclear DNA from one stock and the mitochondrial from the other. However, if full hybridisation is occurring the introgression of genetic material between stocks would lead to the breakdown of stock boundaries. The levels of genetic subdivision between stocks detected in this study indicates that this is not occurring.
The study also found evidence for a smaller genetic effective population sizes in eastern Gemfish than western Gemfish. The results are preliminary but warrant further investigation as they may provide insight into why the eastern Gemfish population is not recovering from its overfished state.
This research has delineated two stocks of Gemfish in Australia and defined the boundary between both stocks. These data are very useful for assigning data for the stock assessment and for changing the management boundary between both stocks.
The report recommends that both eastern and western Gemfish stocks be treated as separate management units and the management boundary between both stocks be moved to a more appropriate location to better reflect both genetically distinct populations. The report also recommends further investigating the small effective population size found for eastern Gemfish.
Development of robust methods to estimate acceptable levels of incidental catches of different commercial and byproduct species
Incidental catches of species whilst fishing includes the take of both quota and non-quota species. Generally these species are relatively data poor but the Harvest Strategy Policy still requires a determination of whether these species are at risk of overfishing.
In addition, bycatch TACs are set for seriously depleted species to allow for those catches taken when legitimately targeting associated species. The objective is to provide a mechanism that would prevent useless discarding while minimizing fishing mortality. However, current regulations do not prevent targeting the bycatch-only species given sufficient quota. This has been observed with School Sharks. It is currently unknown if taking the bycatch TACs for the species concerned will permit the required stock recovery. As a minimum, methods are needed for determining whether an observed level of bycatch and discarding, in any given fishery, is sustainable; these methods need to be able to be applied irrespective of the different life history characteristics of the wide array of bycatch species found across Commonwealth fisheries.
There is a need to explore the conditions under which severely depleted species may fail to recover. If it is the case that for some species even small incidental catches are sufficient to maintain a species in a depleted state then different management may be required. Management options include 1) status quo, 2) spatial and/or seasonal closures, 3) increased cooperation from Industry, 4) changing regulations about bycatch –only species, and 5) reducing the quotas for those species with which the depleted species make up a significant bycatch. The issue of incidental catches is present in all Australian fisheries; there is a need for general solutions that can be applied to a wide range of cases that minimize the impact on the fishery while minimizing the impact of the fishery on the bycatch-only species.