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
Pilot Risk Assessment for Sourcing Seafood (RASS) of Selected Australian Species
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
Incorporating the effects of marine spatial closures in risk assessments and fisheries stock assessments
With the creation of large marine spatial closures, such as the system of fisheries related closures and MPAs that have been implemented in the South East, complications to the current established framework for fisheries management and risk assessment are introduced.
Management advice for targeted commercial fish stocks is generally based on the results of quantitative or semi-quantitative stock assessment methods. These assessments usually treat the impacted species as unit entities where the complete stock is vulnerable to the fishery, and this is generally acceptable for most species, as the majority of the stock is available to the fishery. Explicit representation of spatial structure is the exception in most target species stock assessments. For non-target species, assessed within an Ecological Risk Assessment framework, an examination of catches in comparison to life-history characteristics, or the species susceptibility and productivity can also give an indication of likely impact. While the spatial overlap of the stock with the fishery is considered in some ERA methods (eg PSA, SAFE), implications for management are not explicit.
Marine spatial closures complicate assessments by changing the relative abundance within and outside closures. They may also alter the location where sampling occurs. In addition to changes to assessments, a key question is how the rules that determine catch levels, including formal harvest strategies, should be modified to account for closures, taking into consideration the characteristics of the closure, the species’ biology and varying levels of monitoring. This project will consider these impacts for all forms of marine closed areas.
Final report
Supporting sustainable fishery development in the GAB with interpreted multi-scale seabed maps based on fishing industry knowledge and scientific survey data
The valuable offshore trawl (GABBTF) and non-trawl (GHATF) components of the SESSF fishery are expanding in the GAB, but there are no maps of this large area (~500 miles wide) at scales relevant to fishery use and management. Interpreted maps are needed to underpin sustainable development, particularly because they are relevant to developing area closures. These form a key part of AFMA’s strategic management planning for the fishery - including implementing the recommendations of recently completed Ecological Risk Assessments. The relevant scales when evaluating options for spatial management are: fishing grounds (areas with characteristic patterns of bottom types, fish communities and use), features (including submarine canyons and large rocky banks) and terrains - sediments, rocky bottom and broken bottom that make them up.
Maps alone will not usefully inform management decisions. There is also a need to interpret the structure and functions of their component parts, e.g. individual fishing grounds or certain habitat types. This enables stakeholders to understand their role for fishery production, their value to the fishery, and their natural values – including for threatened species and unique habitats. A wide range of data and knowledge can be collated from industry and scientific surveys. The proposed project will provide the mechanism needed to acquire, collate and map the information, then evaluate and summarise it for management purposes while preserving the confidential nature of industry data.
The project is based on a model used successfully in a previous study. The methodology – including data security measures - and infrastructure (spatial database, portable camera system) is largely in place. This project will build on lessons learned from the previous project (see Risk Analysis).