Catch Shares (LAPPs): A Promising Solution

A new way to revive fisheries and fishing communities

In the 1970s, starting in Australia, New Zealand and Iceland, a new approach to managing fisheries began to take hold.

Known as "catch shares" or Limited Access Privilege Programs (LAPPs), this type of system dedicates a secure share of fish to an individual fisherman, community or fishery association. Each year before the season begins, fishermen know how much fish they are allowed to take of the fishery's Total Allowable Catch (TAC).

Fishermen are usually allowed to buy and sell shares in order to maximize their profit. This helps drive the fishery to an efficient level and rewards innovative fishermen who can lower costs and deliver a quality product that will fetch a good price on the market.

LAPPs foster better fishing practices, higher prices and less waste

With a secure share of the catch, fishermen no longer need to race: incentives change from spurring fishermen to capture the most fish they can, to spurring them to maximize the value of their share instead. As the fishery becomes more efficient, fewer boats and gear are needed and seasons lengthen.

With a slower pace of fishing, fishermen can more effectively plan their fishing, delivering fish when the market demands, staying ashore when conditions are unsafe and avoiding bycatch. With catches controlled, regulators are able to relax many of constraints on fisheries.

Like stockholders, fishermen want their shares to go up, so they protect their fishery

Evidence shows that catch shares overcome the "tragedy of the commons" by providing a clear economic rationale for conserving resources. In much the same way shareholders in a company want the business to excel so their shares gain value, fishermen in catch share systems need the fishery to remain sustainable. 

In addition, landing unmarketable species, such as bycatch, or spending the time to deploy excess gear can be costly. Under catch shares, fishermen have the incentive to avoid any additional costs. One 'stick' in this carrot-and-stick approach is that if fishermen exceed their share of the catch, they have to buy additional quota on the market. If no quota is available, stiff penalties often ensue.

Designed for safety and profit, catch shares also led to environmental gains

Early catch share programs focused on improving safety and economic performance. They weren't designed with environmental benefits in mind and included no specific environmental restrictions. Yet environmental gains came about anyway.

Reducing costs, avoiding penalties and engaging in conservation simply made good business sense. In addition, catch shares provided more secure, full-time jobs, eliminated overcapitalization and alleviated the substantial stress and instability of short "derby" fishing seasons. 

Catch share programs are not a silver bullet

Catch share have not been without challenges. Any fundamental change to the way a business operates is bound to meet with some resistance, particularly among those who gain the most from the conventional approach.

Some are concerned that catch shares privatize public fisheries resources. Difficult questions about resource allocation, trading rules and transition assistance arise, as well as appropriately monitoring catch share programs. In the United States in particular, finding ways to understand and address these challenges has been muddled by insufficient scientific data and a reliance on anecdotal information. Our report brings scientific clarity to these issues.

Good design and implementation are key to redressing thorny issues

Different fisheries can have varying goals.  For example, one fishery may want to maximize economic efficiency while another may want to preserve the current owner-operator fleet structure. Catch shares can be designed to optimize these various goals.

A number of rules and provisions, from type of catch share system, to allocation and trading rules, have been commonly used by fisheries. Innovation could breed many more. Decision-makers should customize catch share design to fit the needs and goals of their individual fishery, recognizing that trade-offs do exist.

Posted: 25-Jul-2007; Updated: 25-Jul-2007