As in many other regions of the world, fisheries in Europe are generally considered to be overexploited, largely as a consequence of excessive levels of fishing capacity. This has manifested itself in terms of depleted stocks of key species and poor economic performance of the industry. In this paper, the level of excess capacity in the Scottish fleet is examined using a variant of the data envelopment analysis (DEA) approach that takes into account the additional costs of increasing fishing effort to achieve "full utilisation." Given the estimate of full capacity production of each vessel, the fleet size and structure that is sufficient to take the current catch level is derived using an industry restructuring model. The economic benefits to the industry and employment impacts of achieving this capacity reduction are estimated.
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