Economic

Identifying mechanisms and data collection options to aid socio-economic analysis of the NT seafood industry

Project number: 2021-034

Project Status:

Completed

Budget expenditure: $99,000.00

Principal Investigator: Katherine Winchester

Organisation: Northern Territory Seafood Council (NTSC)

Project start/end date: 24 Feb 2022 - 27 Oct 2022

Contact:

FRDC

Need

This project seeks to position the NT seafood industry to have a clear understanding of suitable and cost effective, valued systems and processes for adoption. It is the critical first step required to aid a shift in the behaviour and culture from a government driven data collection process for legislative purposes, to a process that is trusted and valued by industry to deliver data insights beyond regulatory requirements. As a result, it will help position the NT wild harvest and aquaculture sectors with securing access, investment and development opportunities.

Current negotiations for access to Aboriginal-owned tidal waters have reached a critical point. A gap exists in understanding what level of industry adjustment might be required to ensure Indigenous investment in the industry is not unnecessarily impacted. Better understanding the full value of the NT seafood industry to the NT community could assist with all strategic decisions related to Blue Mud Bay negotiations, infrastructure investments – and help support investment in the industry going forward.

Without a plan to enhance the visibility of the wider socio-economic value and benefits of our industry, we will continue to face increasing pressure on our social licence to operate – which has the potential to impact all aspects of the local industry, including access, industry structure and increased fees. It will also limit our ability to identify the best opportunities for future growth and sustainability.

Further, there is limited availability of current financial and economic information for our individual NT wild harvest fisheries and sector specific aquaculture activities. Due to this lack of information there is little scope for economic analysis, hence limiting opportunities for providing advice to policy and decision makers.

Objectives

1. Consolidate a methodology for ongoing valuation reporting and capacity for impact assessment of the NT's seafood industry via application of the FRDC’s National Fisheries and Aquaculture Industry social and economic contributions study

2. In consultation with the relevant fishery sectors and the NT Government prepare a list of agreed economic indicators for annual reporting

3. Establish a set of protocols with NTG to provide, on an annual basis, the data already collected and held by NTG that will underpin the preparation of annual economic indicators

4. Develop a program/schedule for undertaking an economic survey of concession holders in NT commercial fisheries

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PROJECT NUMBER • 2024-037

PROJECT STATUS:

CURRENT

Western Rock Lobster Community and Industry Outreach Program

Commercial in confidence

ORGANISATION:

Western Rock Lobster Council Inc (WRLC)

PROJECT NUMBER • 2024-027

PROJECT STATUS:

CURRENT

Centro Workshop - Actions and management outcomes for Longspined Sea Urchin

1. 1. Collaboration to determine centro management activities that can be delivered in the short to mid-term.

ORGANISATION:

Victorian Fisheries Authority (VFA) Queenscliff

PROJECT NUMBER • 2024-012

PROJECT STATUS:

CURRENT

Capturing fisher ecological knowledge of climate change: a Southern and Eastern Scalefish and Shark Fishery case study

Commercial in confidence

ORGANISATION:

Fishwell Pty Ltd

Australia’s blue diamond

Published: 6 February 2022 Updated: 7 February 2022

Back to News

DATE 8 Feb 2022

FEEDBACK/STORY SUGGESTIONS FRDC +61 2 6122 2100 frdc@frdc.com.au

As the true value of estuaries and coastal wetlands is realised, Australia’s fishing sectors are in a prime position to benefit from the burgeoning blue carbon economy

By Melody Horrill and Catherine Norwood

Impacts of COVID19 on the Australian Seafood Industry: Extending the assessment to prepare for uncertain futures

Project number: 2021-042

Project Status:

Current

Budget expenditure: $179,564.00

Principal Investigator: Emily Ogier

Organisation: Institute for Marine and Antarctic Studies (IMAS) Hobart

Project start/end date: 20 Dec 2021 - 14 Mar 2024

Contact:

FRDC

Need

In March 2021 the FRDC published an initial rapid assessment - Impacts of COVID19 on the Australian Seafood Industry: January-June 2020 - of the direct and indirect effects of disruption to seafood production, supply chains and markets caused by the global COVID19 pandemic. That assessment covered the initial period of the shocks wrought by COVID19 and demonstrated the availability of data to support rapid assessment in such conditions.

However gaps remain to be addressed, including:
1. comprehensive coverage of production effects in fishing and aquaculture across all Australian jurisdictions,
2. coverage of impacts on recreational fishing activity and Indigenous commercial seafood activities;
3. assessment of emerging medium-term impacts (such as changes in Australian consumer purchasing behaviours, structural effects in labour markets and export-oriented sectors, effects of alterations in tourism patterns); and the interactions with non-CV-19 impacts (such as trade tensions affecting exports); and
4. the effectiveness of crisis responses.
Furthermore, the capacity to access data to support rapid assessment in times of systemic shock needs to be consolidated. Finally, insights from rapid assessments need to be harvested to provide Australia with a framework for assessment of systemic (i.e. large-scale, multi-level) risk to the Australian seafood community.

This project addresses these needs through a follow-up Impact assessment report which is more comprehensive, given data availability. The follow up report will include case studies of crisis responses by key government and industry decision makers, and the lessons learned for preparedness for future shocks. It will develop a Guideline for rapid assessment of economic and social effects in fisheries and aquaculture, which will contribute to FRDC's capacity for rapid appraisal and assessments. The guideline will include quality assurance steps to be applied to rapid assessments. Finally, the project proposes to draw insights from this more comprehensive assessment to identify what risk factors to assess, and how, in order to prepare for systemic shocks in future.

Objectives

1. Complete assessment of impact of COVID-19 on Australia's commercial, recreational and charter fisheries and aquaculture sectors for the period July 2020 to June 2021

2. Determine what were effective responses and interventions using selected case studies to inform preparedness for future shocks

3. Document all data streams and their source (organisation, private data, public domain data) - STOP / GO MILESTONE

4. Develop guidelines for data production, governance and use when rapid situational assessments are required.

5. Develop a framework for systematic risk assessment

6. Develop 'data architecture' for a portal to access live/near-real time data to support early detection and risk assessment of large-scale shocks (architecture to include: data sources, access and permissions

display

outputs)

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.

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