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
A novel method for obtaining age compositions from ancillary biological data and it’s potential for cost reductions in stock assessments
Age composition data provides the key information necessary to effectively manage fisheries. The proposal provides a mechanism where age composition data can be gained using length frequency data and age composition data from different years and sampling events, which has previously been impossible. The benefits will be a reduced need for production ageing, more timely age composition data and the ability to construct age composition data from historical length frequency data where no samples were collected for ageing.
Currently the Age-Length Key (ALK) is the most widely used numerical method for assessing the age composition in a large sample of length-frequency data. However, the application of ageing data in this approach is restricted to the original sample of length distribution (ageing data from the same year the length-frequency sample is taken). Due to this severe limitation, the ageing information must be regenerated for each new data sample. Using the Fredholm First Kind equations, previous years ageing data can be used to generate the underlying age composition from the current length-frequency data. Furthermore, the ageing data may be added to include many years, improving the robustness of the statistic which can then be used to decompose the underlying age distribution from the given length frequency.
As noted by a number of referees, the major problem with the current methods is variable recruitment. We have demonstrated that the technique is tolerant to the most extreme changes in age frequency (see accompanying text). These extreme changes in age frequency are greater than any changes that could occur naturally through recruitment. The issue of variable growth may affect the efficacy of the approach, but to our knowledge, has only been observed in two species. These are black bream and blue grenadier. It is proposed that the technique be demonstrated on blue grenadier in the first year.
The cost of collecting ageing data is high, with approximately $150,000 spent each year on ageing samples from commercially important species within the South East Fishery. Due to the cost, the number of species aged is not optimal and species are prioritised on a scientific and social-political basis. The cost-benefit of applying this approach is intuitively a large reduction in cost of ageing to industry and more timely information on the age structure of the population. A formal cost benefit analyses will need to be conducted on a species by species basis. This is a function of different cost structures for ageing different species, different numbers of samples that need to aged for each species. These different numbers of estimates that need to be made for each species is primarily due to longevity and stock structuring.
The age-structured data obtained from this project will benefit the South East Trawl Fishery, the Great Australian Bight Trawl Fishery and the Gillnet, Hook and Trap Fishery which are supported by The Integrated Scientific Monitoring Program (ISMP) and various other stock assessment programs that rely on age-structured data.
Further, age composition data will be able to be reconstructed historically from species where samples were not aged but length-frequency data were collected. This will enable age-structured population analysis where the lack of ageing data prevented these stock assessment techniques from being previously used. The net effect of this approach is to greatly improve the knowledge base from which species are managed. One of key advantages of this approach is, if successful, will at the very least compliment current methods and provide temporal and spatial coverage of age composition information which is currently cost prohibitive and only collected for a few, high value species.
The implication of a technique that can provide age-composition data free from the restriction of those associated with the ALK is more cost-effective resource management.
The proposal has been developed in two parts, the first component is a 'Proof of Concept Study' where the use of the Fredholm First Kind Equations to provide age compositions from length frequency data will be further examined. If this is not assessed as successful in a workshop environment, the project will be terminated at the end of the first year. The second and third year will examine a broad range of species.
Final report
Development of harvest strategies for selected SEF species
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.
Final report
Development of an artificial neural network for automated age estimation
Current age determination methods, even when aided by image analysis software still depend on interpretation by an experienced "reader". The process of ageing is also laborious, time consuming and hence, relatively expensive. For production ageing, where there is an ongoing requirement for age estimates, there is a problem of consistency of interpretation. At present, when readers change, there is a substantial training and verification period needed to ensure that the new reader is interpreting otolith structure in a consistent and correct manner. Automatic ageing would have the primary advantage of being a far more objective method than is possible with even the best training, reducing discrepancies both between readers and organisations. This factor will increase the precision of estimates and therefore provide greater confidence for the stock assessment process. Benefits associated with the development of this technique also include the reduced sample processing time which would increase the number of samples able to be processed and hence, reduce the cost.
The pilot project which has been completed has demonstrated the potential for artificial neural networks to objectively and consistently classify samples of some species. With refinements of the system, it should be applicable to any species for which production ageing is required.