Examination of Witness (Questions 47-59)
Mr Aaron Hatcher
12 MARCH 2008
Q47 Chairman:Thank you very much indeed
for coming along and talking to us and helping us with our inquiry.
We are still in the relatively early stages of our inquiry into
the reform of the Common Fisheries Policy, and so (let me put
this as kindly as I can to my fellow members of the Committee)
you should not assume too much knowledge.
Mr Hatcher: Okay.
Q48 Chairman: We are trying to get
to grips with what the key issues are in terms of fisheries management
and how that can then feed through to possible reform of the Common
Fisheries Policy. A couple of formal things. This is a formal
evidence-taking session, and so there will be a transcript taken.
We will send you that and you will have the opportunity to correct
any slips or dangers there, and it is being webcast. We have never
actually found anybody who has listened to the webcast, but there
is just the possibility that somebody might. The normal procedure
is to invite you, if you can, or if you think it is valuable,
to give an overview of the main issues, if you want to, and then
to go into a question and answer session. I understand that you
have seen copies of the brief and the type of questions we are
going to ask.
Mr Hatcher: Yes.
Q49 Chairman: Would you like to say
anything by way of introduction?
Mr Hatcher: I think it is probably best just
to go straight into questions and answers. I will, obviously,
briefly introduce myself. My name is Aaron Hatcher; I am a Research
Fellow in the Economics Department at the University of Portsmouth.
I have been interested in fisheries management for some years
now and I am a member of the European Union Scientific, Technical
and Economic Committee for Fisheries.
Chairman: I am going to ask the Earl of Arran
to come in with, I suppose, the quick Yorker!
Earl of Arran: It is a very erudite and closely
worded paper you have put before us. I find it really terribly
difficult to understand. Can you explain simply what you are trying
to get at, firstly. Are the suggestions that you make actually
working anywhere at the moment? I am not quite sure where we are
on all your extremely interesting ideas and which governments
across the world have actually paid attention and are putting
them into effect, but, first of all, very simply, what are you
trying to get at?
Q50 Chairman: In other words what
is the big challenge and how do you get there?
Mr Hatcher: The challenge for fisheries management
in general?
Q51 Chairman: Yes.
Mr Hatcher: I suppose managing fisheries has
two objectives. The first one is perhaps an obvious one, which
is to limit the scale of exploitation of fish stocks in such a
way that we do get a yield of fish but that this yield is sustainable
into the future, which implies that we do not reduce fish stocks
down to levels which are not going to give a yield. From an economic
perspective, the other objective of managing fisheries is to avoid
economic waste, which is to try and get as much economic value
as we can from fish stocks without wasting resources in the process
of catching fish. Economic waste can be a result of no management,
but it can also be a result of bad management or inappropriate
management.
Q52 Earl of Arran: Are the economic
ideas that are contained in your paper actually working?
Mr Hatcher: I am sorry; I do not know which
paper you are referring to.
Q53 Chairman: Our internal specialist
adviser, Mr Dillon, has produced a briefing for us which I think
draws upon certain contributions that you have made from time
to time.
Mr Hatcher: Are you referring to the report
that we prepared for Defra?
Q54 Chairman: Yes.
Mr Hatcher: Which was primarily concerned with
quota management. Broadly, economists tend to favour quota management
over effort management and tend to favour as much flexibility
and tradeability in quotas as possible in order that fisheries
are as economically efficient as possible. The most well-known
form of the economic approach to quota management is what are
referred as to ITQ systems (individual transferable quota systems),
which are used with apparent great success in a number of countries,
including Australia, New Zealand, Canada, Iceland, the Netherlands
and a few other countries as well.
Q55 Earl of Arran: So your recommended
solutions are working in some parts of the world?
Mr Hatcher: It seems so, yes.
Q56 Chairman: So why did we not adopt
them? Why have they not been universally picked up?
Mr Hatcher: One would have to say that ITQ systems
are not appropriate for every case, for various reasons. I think
there is often political resistance to the idea of being able
to trade in access to a natural resource in the same way that
somebody people object to the idea of trading rights to emit pollution,
for example. There is no economic argument against having tradeability
in quotas—the economic arguments are all in favour rather
than against—so I think resistance, where it occurs, is
often political.
Q57 Viscount Brookeborough: Is not
the success of virtually any of these quota systems -at least
in the paper we have got from New Zealand—the enforcement?
Mr Hatcher: Enforcement is a big problem for,
and a key to, success in any fisheries management system. If you
try to apply regulations and you cannot enforce them, then clearly
they are not going to work. The other key to a successful ITQ
system is that trade is easy, that quota is readily divisible
and readily tradable. I think one of the problems we have in this
country is that quota can be traded but it is rather difficult
and costly and cumbersome to do so. What is interesting in this
country is that the quota management system was never set up as
a tradeable quota system, but the fishermen, if you like, have
voted with their feet, or their wallets, and tradeability has
developed despite the design of the system, rather than as a consequence.
Q58 Chairman: You said you preferred
quota management to effort management.
Mr Hatcher: I would observe that economists
in general would prefer to control output rather than try to control
inputs, which is what we mean by effort management.
Q59 Chairman: Why?
Mr Hatcher: Because it gives the maximum amount
of operational flexibility to the industry. At the end of the
day, we are always trying to restrict output. It is catches that
impact upon the fish stock, and so, whatever measures we try to
put in place, the ultimate aim is to have some leverage, some
control, over what has been taken out of the fish stock, and it
is generally preferable to try to do that directly rather than
indirectly. If we try to do it indirectly by placing controls
on engine power, the size of nets, days at sea, the size of vessels,
et cetera, et cetera, we have to try and second-guess the relationship
between those different types of input and catches, which is very
difficult to do, and it imposes a lot of unwelcome regulation
on the industry. Even if we can estimate the relationships between
inputs and catches, these are likely to change over time, particularly
with technological advances, and so we are continually having
to try and revise these guesses of what is actually going on.
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