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A Bioeconomic Analysis of Alaska's Sac-Roe Pacific Herring Fisheries

by Anthony J. Mieloch, Department of Economics

 An important component to fisheries management is the behavior of fishermen when they face changes in management policy, market conditions, and/or biological and environmental factors. Since research has shown that fish populations may be significantly impacted by oceanographic and environmental variables, market conditions and management policies may also be driven by these variables. Understanding how the markets for fish products are affected by the interplay between environmental variability and their biological outcomes provides policy makers with important information to set rational harvest and management goals. The goal of this research project was to evaluate the impact changing environmental variables had on management?s choice of harvest policy for the Togiak sac-roe herring (Clupea pallasi) fishery and how their choice affected the revenues fishermen received. Though environmental variables play an important role in determining herring biomass levels, the present research was not able to identify an appropriate relationship between climatic variables and biomass levels. However, given this setback the analysis continued without an explicit climatic variable included in the structural model, but instead used temper-ature as an implicit component in the stochastic part of the model.

The bioeconomic analysis of the Togiak sac-roe herring fishery consisted of a biological component and an economic component. These components were combined in a stochastic model to account for the inherent variability of the herring biomass and to include the variability imposed by the environment of the Bristol Bay region. A stochastic framework was chosen to allow for an explicit analysis of the trade-offs between the often conflicting objectives of economics and biology. For simplicity, management?s control variable was limited to its choice of exploitation rate and was allowed to increase at 1% intervals from 10% to 30%.

The simulations indicated that maximization of expected revenue occurred at an exploitation rate of 28% with expected revenues of $9.2 million. At this exploitation rate, the median biomass was 92,433 mt with a biomass failure frequency of nearly 6%. Alternatively, at low exploitation rates of 10% to 15%, the frequency of biomass failure was reduced to less than 1%. However, these low exploitation rates sharply reduced expected exvessel revenues; for example, at an exploitation rate of 10%, expected exvessel revenue was $7.3 million. Yet as the exploitation rate was increased to 15%, exvessel revenue became more sensitive and increased between 2% and 4% for each 1% increase in exploitation rate. Fortunately, the sensitivity in exvessel revenue was not surprising since the exvessel price was found to be insensitive to changes in the quantity harvested.

Exploitation rates between 15% and 23% exhibited the lowest levels of sensitivity for both expected revenues and the risk of biomass failure. For exploitation rates between 16% and 23%, expected exvessel revenues increased from $8.4 million to $8.9 million. The sensitivity of biomass failure frequency to exploitation rate also remained low, under 3%, for exploitation rates between 16% and 23%. Unfortunately, as the exploitation rate was increased from 24% to 27%, the frequency of biomass failure leaped above 3%.

Though the analysis was not constructed to identify an optimal exploitation rate, it does provide a range of exploitation rates which exhibited desirable trade-off characteristics between the economic and biological outcomes they generated. Herring are an important prey specie to other commercially important fisheries such as the Pacific salmon and pollock fisheries. Hence, the low median biomass, combined with the increased risk of collapse associated with a revenue maximization objective, meant it could not be seen as a desirable outcome. In addition, given the importance of the herring fishery to the coastal communities of Togiak Bay, an excessive reduction in revenue resulting from minimizing the frequency of biomass was not deemed economically or politically feasible.

These results suggested that a more appropriate exploitation rate may exist between these competing objectives. Given the trade-offs between biomass failure and economic expectations, long-term sustainability of the biological component requires managers to choose an exploitation rate that moderates the variability of the herring biomass. In addition, the increased frequency of biomass failure would likely impose added costs to the region through the reduction of harvests in other fisheries where herring is a prey specie. Bio- mass failures exceeded 3% for exploitation rates above 23% which indicated that these levels of exploitation rates may not be preferred. The economic outcomes for exploitation rates ranging from 16% to 23% were between $8.4 million and $8.9 million. Most important to fisheries managers is that over this range of exploitation rates revenues were less sensitive. This result suggests managers may have some flexibility when choosing exploitation rates. Therefore, due to the moderate risk of biomass failure and reduced sensitivity of revenues, the present research suggests exploitation rates ranging from 16% to 22% to be preferable.

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