Optimal Allocation of Anchovy Stocks as Baitfish for Tuna and as Food for Local Communities in Developing Coastal Countries

Bait tuna vessels in developing coastal countries often compete with artisanal fishers for small pelagic species such as anchovies. Owing to the capital-intensive nature of tuna fishing, the vessels are characteristically foreign owned; the catches are exported; and they pay access fees to the host country. By contrast, the artisanal canoes are owned by the nationals and the fish landed are consumed locally. In addition, fish aggregating devices (FADs), such as artificial lights used to catch the baitfish, destroy marine ecosystems. In this paper a bioeconomic model for fish resource allocation, which accounts for the ownership of the tuna fishing vessels and environmental opportunity costs owing to destructive fishing practices, has been developed. From the model, I have verified the extent to which suboptimal equilibrium solutions deviate from social optimal outcomes under different scenarios. Moreover, I have derived an expression for optimal (ad valorem) tax enough to maximize rents from the two stocks. The optimum solutions are characterized using data on tuna and anchovy fishing in Ghana.