by Katie Schleit
A new study, which came out this month, revealed that an increase in bluefin tuna landings doesn’t always mean more money in the pocket of fishermen. The study shows that when the global supply of tuna increases, it can actually mean less revenue, which is consistent with what happens with other global commodities.
The study, titled “More Landings for Higher Profit? Inverse Demand Analysis of the Bluefin Tuna Auction Price in Japan and Economic Incentives in Global Bluefin Tuna Fisheries Management” was led by Chin-Hwa Jenny Sun at the Gulf of Maine Research Institute, Fu-Sung Chiang at the National Taiwan Ocean University, and Dale Squires at the University of California, San Diego. The results suggest that stabilizing the bluefin catch can be profitable for most fishermen, and might be a less risky approach to tuna management in general. This is important for countries and fishermen to consider as they go to the negotiating table for Atlantic bluefin tuna quota again in November.
Tuna management and Canada
Due to the highly migratory nature of Atlantic bluefin tuna, the species is managed by many countries, including Canada. These tuna are managed as two stocks, a western stock that primarily spawns in the Gulf of Mexico and an eastern one, that spawns in the Mediterranean, with many eastern fish coming west to feed. The eastern stock is much larger than the west. Both stocks are managed by a body called the International Commission for the Conservation of Atlantic Tunas (ICCAT), a group of 51 member governments who fish tuna and tuna like-species. The quota for western Atlantic bluefin tuna, set by ICCAT, is shared by Canada, USA, Japan, Bermuda, St. Pierre and Miquelon, and Mexico.
What happens to revenue when global supply increases?
The study looks at the impacts of recent spikes in eastern Atlantic and Mediterranean bluefin tuna (eastern bluefin) catch on the price of Atlantic bluefin and its substitutes. Increases in global bluefin tuna landings in recent years have mostly been driven by increases in the total allowable catch for eastern bluefin tuna. The total allowable catch (TAC) increased by more than 75% between 2014 and 2017 (to 23,655 t). The western stock that Canada fishes on, by comparison, increased by 14% in 2015 to 2000 t and remained the same for 2016 and 2017. The study goes on to evaluate whether boosting the eastern quota even higher would benefit the fishing industry and who would stand to win (or lose) from supply increases.
Even though a portion of the study focused on the increase from the eastern bluefin TAC, the study evaluated the price implications of increases in global supply of Atlantic, Pacific, and Southern bluefin, and even fresh bigeye tuna, as they are often substitutes for Atlantic bluefin in the market. The authors then predicted how increases in the global supply of these products would impact Japanese auction prices, used as a proxy for global tuna prices in the study. Auction prices from Tsukiji, Japan’s largest fish market, were used as a proxy because global tuna prices, including in Canada are essentially set by the Japanese market.
Results and implications for western bluefin fishermen
The study found that the prices of all bluefin and fresh bigeye tuna decline as their aggregate supply increases, with all else being constant. The extent of the decline varies depending on the source or species of tuna. In particular, prices of fresh bluefin and bigeye decline more than supply increases proportionally, meaning that revenue for these fishermen would decline even if they were able to increase their landings, due to the disproportionate decrease in the price of the fish. The study suggests less dramatic price declines for frozen bluefin imported into Japan, but even in this case, those fishermen bringing frozen fish to the market are not guaranteed more revenue unless individual quotas (ITQs) are in place.
The western Atlantic bluefin tuna industry, including fishermen in Atlantic Canada, faced even more of a challenge in recent years. As the quota for the much larger eastern stock of Atlantic bluefin was increased substantially in 2016 and again in 2017, in response to a positive stock assessment in 2014, the western quota remained stable in order to allow this still depleted stock to rebound. Thus, while increased supply of eastern bluefin was driving the prices down, western bluefin fishermen were one of the sectors paying the price of such a quota increase. The price drops were so significant that even if the science had allowed for an increase in the western quota, the western bluefin fishermen would still be making less money.
So what should this tell us about setting future Atlantic bluefin tuna quotas?
The study suggests that an increase in western quota will not necessarily mean more revenue for Canadian fishermen, given that our prices are driven by global supply and thus strongly influenced by decisions for other stocks and species. Based on this study, a more prudent approach for both supporting additional growth of the western stock, and profitable fisheries for western fishermen, would be to stabilize bluefin quotas, and thus supply, in the Atlantic and Pacific. Luckily, ICCAT has embarked on a process to develop harvest strategies, which will allow bluefin fishermen to ensure that stability is a major priority in quota setting.
There are other reasons for Canada to be even more prudent, as it enters into Atlantic bluefin quota negotiations this year. Recent science has shown that the degree of mixing between the eastern and western stocks is increasing. Where the Gulf of Saint Lawrence was, until recently, assumed to be 100% western fish, scientists are now estimating that up to 59% of the fish in the Gulf are eastern bluefin. This means that the health of our fishery is closely tied to the health of the eastern stock, and that scientists, managers and industry alike must be careful not to over-interpret increased abundance in the western fishery as a sign of growth in the genetically-distinct western stock. Furthermore, while the new stock assessment suggested additional growth in the western stock through 2015, scientists are predicting that western stock abundance is likely to decline in future years. This primarily is because the strong year class of 2003 that scientists believe was driving the increase, will be fished out.
It is important for the health of the bluefin population that ICCAT and its members take a precautionary approach to fisheries management, however the economic incentives for increasing quota often take precedent over concerns for future stock health. This new study shows that economic benefits are hardly guaranteed with an increase in quota, and should give ICCAT members further reason to consider a more cautious approach when it comes to setting fishing limits.
Katie Schleit is the Senior Marine Campaign Coordinator at the Ecology Action Centre—she has been working on bluefin tuna management and conservation for several years, trying to improve management both nationally and internationally.