Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

This paper evaluates industry-wide economic incentives arising from changes in product prices in an industry exploiting a common renewable resource under public regulation that sets total sustainable conservation targets. Changes in prices alter economic incentives through impacts upon revenues, profits, conservation, and nonmarket public benefits. Economic incentives in industries exploiting common resources have been examined along many margins, but not at the overall industry level from changes in market prices arising from public regulation. We analyse the impact upon economic incentives from changes in overall sustainable output level and market price through a study of a tuna fishery to estimate ex-vessel price and scale flexibilities for imported skipjack and yellowfin in Thailand's cannery market. The unitary scale flexibility, estimated from the General Synthetic Inverse Demand Systems (GSIDS), indicates no loss in revenues and even potential profit increases resulting from lower harvest levels that could arise from lower sustainable catch limits. However, for this to work, three of the inter-governmental tuna Regional Fisheries Management Organization (tRFMOs), that manage majority of the yellowfin and skipjack tuna in Pacific and India Oceans, would have to coordinate their conservation measures on catch limit of both species together.