CEEPA Discussion Paper Series ISBN 0-9584508-1-1
Discussion Paper ISBN 0-9584508-2-X March 2002
NATURAL RESOURCE ACCOUNTING AND SOUTH
AFRICAN FISHERIES: A BIO-ECONOMIC ASSESSMENT OF THE WEST COAST DEEP-SEA HAKE FISHERY WITH REFERENCE TO THE OPTIMAL UTILISATION AND MANAGEMENT OF THE
RESOURCE
Trevor Hutton Fisheries Centre, University of British Columbia, Vancouver, Canada
and U.R. Sumaila
Chr. Michelsen Institute, Fantoft, Bergen, Norway
University of Pretoria
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This study was carried under a research grant from The Resource Accounting Network for Eastern and Southern Africa (RANESA). RANESA is a non-profit network that aims to support capacity building and awareness in environmental economics and policy in Africa through research, training, networking and public education and awareness activities. The network is funded by the Swedish International Development Agency (SIDA) and coordinated jointly by CEEPA at the University of Pretoria and the Beijer International Institute of Ecological Economics in Stockholm. For more information about RANESA visit the networks website at: www.ceepa.co.za
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Table of Contents Summary.. iii List of Tables.. iv List of Figures ... vi Acknowledgements.... vi 1. INTRODUCTION...... 1 1.1 Natural resource accounting and South African
fisheries...... 1 1.2 Aim of Study.. 4 2. BACKGROUND: THE MANAGEMENT OF CAPE HAKES 5 2.1 Management of the fishery... 6 2.1 The long-line versus trawl debate ... 8 3. METHODS.. 11 3.1 Age-structured models and yield simulation .. 11 3.1a Life-history data utilized.. 13 3.1b Estimation of parameters.. 14 3.1c The regression approach.. 19 3.2 The bio-economic model. 20 3.2a Calculating the NPV... 20 3.2b A brief review of the literature. 21 3.2c Economic data utilized. 22
4. PREDICTING GAME THEORETIC OUTCOMES 29 4.1 Using non-cooperative game theory.. 29 5. RESULTS. 32 5.1 Physical flow accounts: the biological model results 32 5.2 Bio-economic simulations of the west coast hake stock 36 6. DISCUSSION... 39 6.1 Trawling versus longlining... 39 6.2 Non-cooperative versus cooperative management 40 7. REFERENCES. 42
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SUMMARY
The cooperative versus non-cooperative management of the South African west
coast hake stock is explored using game theoretic modelling in conjunction with an
age-structured model. The age-structured model is used to produce a physical flow
account for input into national resource accounts. Between 1989 and 1998, the
average catch of hake on the west coast was 92000 tons, most of which was
harvested by the demersal trawl sector. The physical flow account indicates that the
conservative re-building management strategy pursued for the fishery over the
same time period mentioned above, has resulted in a 29% increase in the demersal
trawl catch over the last decade.
We simulated the effects of alternative quota restrictions on two fishing
sectors (the established demersal trawl fleet and the new longline sector) that
compete for the rights to fish the stock. The results from the bio-economic analysis
(which forms a basis for a monetary flow account as we calculate the Net Present
Value of the stock) indicate that the greatest rent can be obtained by allocating a
share of the total allowable catch (TAC) to longliners. This share that achieves the
greatest benefits approximates the current TAC allocations to each sector under the
present conservative management policy implemented by the management
authority, assuming one takes into account the uncertainties inherit in a
computational exercise like ours. This outcome implies that the current management
initiatives by the government are such that they meet the objectives of the new
Marine Living Resources Act. That is, the need to achieve optimal utilisation of
resources is being adequately implemented.
The results of the game theoretic analysis provide an indication of why the
current introduction of longlining may affect the government-industry cooperative
management arrangements. A difference of R50 million will accrue to longliners
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over the next thirty years if they engage in non-cooperative rather than cooperative
strategies. The latter occurs under the assumption that the trawl sector reduces
effort under a cooperative strategy. The results indicate that management policies,
which ignore economic realities, could fail. However, a cooperative strategy is still a
viable option for the trawl sector, because a difference of R1357 million can be
obtained over the same time period if the trawl sector engages in cooperative
behaviour.
These results are based on the assumption that benefits accrue to the quota holders
under security of tenure allowing them to consider the long-term sustainability of
the resource. Some form of security of tenure is still uncertain under the
governments re-structuring program, although a number of new policies are now in
place to help implement longer term rights. These policy initiatives should create a
positive environment for all the stakeholders such that they can consider the long-
term sustainable utilisation of the resource. Otherwise, rent will be forgone if the
rules governing participation (i.e., rights) and the allocation of benefits for shared
stocks are not well defined and constrained.
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LIST OF TABLES
Table 1 The catches and economic value of the commercial fisheries in
1994 ... 2
Table 2 Estimates for MSY, BMSY and B(1997)/K and K (the pre-exploited
biomass) . . 33
Table 3 The physical flow account (all values in 000 tons) for the west
coast Cape hake stocks over a ten year period (1989-
1998)........ 35
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LIST OF FIGURES
Figure 1 The distribution of Merluccius capensis and M. paradoxus off the coast
of South Africa and Namibia. .... 6
Figure 2 The total catch from 1917 to 1997 in ICSEAF division 1.6 . 7
Figure 3 The hake CPUE from 1955 to 1997 in ICSEAF division 1.6 .... 10
Figure 4 Selectivity versus age relationship for the trawl .... 16
Figure 5 A typical fit of the Beverton-Holt stock recruitment relationship to the
observed data .. 19
Figure 6 The relationship between unit cost and production (tonnes landed) for a
fishing firm harvesting hake with longliners in 1999 .. 24
Figure 7 The relationship between cost and trawl fishing effort based on the
assumption that it costs on average R30000 for a std boat day of trawl
fishing effort in 2000 .25
Figure 8 The relationship between total cost and fishing effort for the trawl
Fleet . 28
Figure 9 The theoretical outcomes of a two player model. . 31
Figure 10 The fitted age-structured model predicted catch-per-unit effort to the
CPUE data . 32
Figure 11 The sustainable yield versus fishing mortality for the trawl fleet under the
current effort levels being exerted by the longline fleet. ... 34
Figure 12 The relationship between total benefit (NPV - Rands millions), and benefit
to the trawl sector and longline sector and the proportion of the quota
allocated to the longline sector ... 37
Figure 13 Benefits to the trawl sector and longline sector under different scenarios
of non-cooperative and cooperative strategies for the West Coast Deep-
Sea Hake fishery .... 38
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ACKNOWLEDGEMENTS
Prof Rashid Hassan, Prof A Leiman and Dr G-M Lange are all acknowledged for
their support and valuable advice. Dr Rob Tilney and Dr Rob Leslie (Marine and
Coastal Management, Department of Environmental Affairs and Tourism) are both
acknowledged for providing data on the Cape hake resource. The Resource
Accounting Network for Eastern and Southern Africa (RANESA), the Swedish
International Development Agency (SIDA) and the Beijer Institute (Sweden) are all
gratefully acknowledged for providing funding for this project.
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1. INTRODUCTION
1.1 Natural resource accounting and South African fisheries
The new Marine Living Resources Act (1998) has sustainable fisheries management as its
first objective. Policy reforms are also underway to re-structure the industry in order to
address the inequities of the past. The Act focuses on maximum utilization of marine
resources for the benefit of all South Africans while also increasing foreign earnings. The
development costs of this policy still have to be assessed along with both economic and
social benefits. The construction of a set of Natural Resource Accounts (NRA) would
represent a necessary step towards assessing whether the current resource utilization is
sustainable under the new policy initiatives in South Africa.
South Africas coastline is over 3 000km long and the nation has an Exclusive Economic
Zone (EEZ) of approximately 1 million km2 which contains a variety of fish species. The
fishing industry is complex in terms of fishing sectors, processing capability, markets,
capital investment, equipment and infrastructure. South Africa is a medium-sized fishing
nation on global standards, l
