1. Slide 1 Max Nielsen FOI, University of Copenhagen, Denmark Ola Flaaten University of Tromso, Norway Staffan Waldo AgriFood Economics Centre, department of Economics, SLU, Sweden. Paper presented at the 19th EAFE Conference, Malta, 6-8 July 2009 Socio-economic return in Nordic fisheries

2. Slide 2 Purpose Definitions Model Cases The size of the socio-economic return Current Maximum Conclusions Outline

3. Slide 3 Purpose  Study made for the Nordic Council and presented for the Nordic fisheries Ministers at the Faroe Islands in 2006  To focus on the Nordic fisheries in a socio-economic perspective  The purpose of fisheries management Socio-economic return Operational profit Regional policies – populate remote areas and employment Fleet structure – coastal fisheries Focus on the socio-economic return

4. Slide 4 Definitions Socio-economic return of fisheries: A net-surplus which on a given time is left for the remuneration of capital and labour beyond what is achieved in other businesses. Calculation: Turnover – costs (excluding for labour and capital) – costs of labour in alternative use – costs of capital in alternative use Socio-economic return Maximum socio-economic return: The annual maximum remuneration which in the long run is left after payment of capital and labour beyond what is achieved in other businesses

5. Slide 5 Current and maximum socio-economic return

6. Slide 6 Current and maximum socio-economic return in multi-species fisheries Biology: Based on ICES ACFM advise – SSB and fishing mortality MSY determined by assumption as the SSB which gives the largest possible sustained yield Fishing mortality assumed sustainable and includes risk through recruitment -> shift curve up/down

7. Slide 7 Model Socio-economic return: Maximum socio-economic return: given DS 1 = 225, 300 Economic model Biological model, for i = 1…n and for i = 1…n, where, for i=1…n

8. Slide 8 Cases  Individual transferable quotas in the Icelandic trawler fishery.  Individual non-transferable quotas in the Norwegian coastal fishery.  Days-at-sea regulation of pair-trawler fishery at the Faroe Islands.  Rations regulated pelagic fishery in Sweden.  Licence regulated mussel fishery in Denmark.

9. Slide 9 Cases IcelandNorwayFaroe Islands SwedenDenmark Employment2.1001.87032234475 No. of boats761.145295763 Insurance value (avr. Mio. DKK)350,312192 No. of days-at-sea (average)267171244203 Share of total landing value (%)42933464 Landing value 2001-03 (mio. DKK)2.543793302387133 Species Cod Redfish Cod Haddock Saithe Cod Herring Sprat Blue mussel

10. Slide 10 Size of the current socio-economic return IcelandNorwayFaroe Islands SwedenDenmark Million. DKK765-176841280 Share of catch value30%-22%28%3%60%

11. Slide 11 The maximum socio-economic return Methods:  Bio-economic model  No. of days at sea determined Assumptions: 1.Unchanged fleet structure and unchanged fishing pattern. 2.Fishing mortality today is in accordance with the precautio- nary principle. 3.The state of stocks for stocks without biological information follow the state of the stocks for which information is available. 4.The maximum capacity utilisation is 300/225 days.

12. Slide 12 The maximum socio-economic return  The socio-economic return can be over-estimated in Iceland, the Faroe Islands and Norway  The socio-economic return can be increased in all cases.  The relative low maximum socio-economic return in Norway reveal structural relations related to regional priorities IcelandNorwayFaroe Islands SwedenDenmark Increase (mio. DKK)7683435819819 Maximum socio-economic return (mio. DKK)1.53316714221099 Share of catch value60%21%47%53%74%

13. Slide 13 The maximum socio-economic return Fleet adjustment – reduction in no. of vessels: Reduction in no. of vessels on 50-77% IcelandNorwayFaroe Islands SwedenDenmark In 2003761.145295766 Reduction – stock and boats-46-677-12-35-18 Reduction – 300/225 days-at-sea per boat-3-201-3-7-15 Total reduction-49-878-15-42-33 Adjusted fleet27267141533

14. Slide 14 Conclusions Fisheries have socio-economic potential The size of the socio-economic return:  Positive of varying degree in 3 of 5 cases  Can increase in all cases  Improved fisheries management is the key – biologically and economically