An Economic Analysis of a Total Allowable Catch-Individual
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University of Nebraska - Lincoln DigitalCommons@University of Nebraska - Lincoln Dissertations and Theses in Agricultural Economics Agricultural Economics Department 8-2017 An Economic Analysis of a Total Allowable Catch- Individual Transferable Quota System in a Developing Country Heterogeneous Fishery: An Application to the Digha Fishery in West Bengal, India Nadeeka Weerasekara University of Nebraska-Lincoln, [email protected] Follow this and additional works at: http://digitalcommons.unl.edu/agecondiss Weerasekara, Nadeeka, "An Economic Analysis of a Total Allowable Catch-Individual Transferable Quota System in a Developing Country Heterogeneous Fishery: An Application to the Digha Fishery in West Bengal, India" (2017). Dissertations and Theses in Agricultural Economics. 38. http://digitalcommons.unl.edu/agecondiss/38 This Article is brought to you for free and open access by the Agricultural Economics Department at DigitalCommons@University of Nebraska - Lincoln. It has been accepted for inclusion in Dissertations and Theses in Agricultural Economics by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. AN ECONOMIC ANALYSIS OF A TOTAL ALLOWABLE CATCH- INDIVIDUAL TRANSFERABLE QUOTA SYSTEM IN A DEVELOPING COUNTRY HETEROGENEOUS FISHERY: AN APPLICATION TO THE DIGHA FISHERY IN WEST BENGAL, INDIA by Nadeeka Weerasekara A THESIS Presented to the Faculty of The Graduate College at the University of Nebraska In Partial Fulfillment of Requirements For the Degree of Master of Science Major: Agricultural Economics Under the Supervision of Professor Simanti Banerjee Lincoln, Nebraska August, 2017 AN ECONOMIC ANALYSIS OF A TOTAL ALLOWABLE CATCH- INDIVIDUAL TRANSFERABLE QUOTA SYSTEM IN A DEVELOPING COUNTRY HETEROGENEOUS FISHERY: AN APPLICATION TO THE DIGHA FISHERY IN WEST BENGAL, INDIA Nadeeka Weerasekara, M.S. University of Nebraska, 2017 Advisor: Simanti Banerjee This thesis contributes to the literature of economics of small-scale fishery communities and fishery management in developing nations. In the first section we review literature on state of the fishery resource and the livelihoods in the globe and performance of fishery management systems in developing and developed countries. Second section discusses the results of an empirical study on the economics of subsistence fishers in Digha-Shankarpur in Eastern India. Results of the empirical study shows by-catch by the trawlers leads to the depletion of target fish stock of the subsistence fishers. Underutilization of the capacity by the subsistence fishers due to the lack of fish stock leads to income losses and inequitable profit distributions among fishers. Ultimately, lack of fish stock generates competition among subsistence fishers. Given the identified economic conditions of fishers from the survey and the literature on ecological studies, we focus on policy measures which can tackle the dual problem of resource depletion and unsustainable competitive pressures on the small-scale fishers. To this end in the third section we present a general scenario analysis concerning the welfare of industry participants when there is a well-defined rights based fishery management policy in place. To support the policy design we extensively study the Digha industry setting and the status quo management of Digha fishery. Given the heterogeneity of fishers and the segmented markets in Digha fishery and the conflicts of interests among fisher groups, we consider two TAC policy designs to regulate two segmented markets namely, trawler boat fishers and subsistence fishers. According to the scenario analysis, two TACs for subsistence and trawler boat fishers with an ITQ system is a better fit to achieve the sustainability goals of the Digha fishery. Nevertheless, the effectiveness of the TAC policy on trawlers depends on the magnitude of by-catch reduction. Also, the policy implementation is critical due to the poverty conditions in the developing countries. However, this study makes a case for policy makers and researchers to carry out an informed cost benefit analysis in implementing a TAC-ITQ policy in a developing country fishery setting. iv ACKNOWLEDGEMENTS I would like to thank many individuals who supported me in many ways throughout this experience. First I would like to express my sincere gratitude to my advisor and committee chair for giving me immense support and guidance throughout the research process and graduate school. Working with her opened many doors for me to continue my research career and graduate studies by shaping me with new experiences and opportunities. Also without her financial support I would not be able to start my graduate studies. Thank you Dr. Simanti Banerjee for all the support. I am also grateful for my committee members, Dr. Zinnia Mukherjee and Dr. Emie Yiannaka. I appreciate the support Dr. Mukherjee provided with her expertise knowledge on fishery resources and from Dr. Yiannaka for her incredible support in providing her knowledge on welfare analysis. Special thanks go to the Institute of Agriculture and Natural Resources Global Engagement Office, University of Nebraska-Lincoln and the Simmons College President’s Fund for Faculty Excellence for providing funding for the project. Sincere gratitude to Dr. Joyashree Roy, Director, Global Change Program, Jadavpur University, West Bengal, India and Dr. Duke Ghosh, Partner and Main Researcher, Global Change Research, West Bengal, India for their research support. Also I would like to acknowledge the data collection team of Digha fishery for their immense support. Thank you to Prof. Udith Jayasinghe-Mudalige, who was my supervisor in undergraduate program and a professor from Wayamba University of Sri Lanka for providing recent fishery research findings in Sri Lanka. A special thank you to my family and friends for their love, support and encouragement throughout this process. Finally, thank you to the faculty, administration, staff, and students in the Agricultural Economics department who have shared in and shaped my experience in graduate school. v TABLE OF CONTENTS ACKNOWLEDGEMENTS ........................................................................................ iv LIST OF TABLES ......................................................................................................vii LIST OF FIGURES ...................................................................................................viii DEFINITION OF ABBREVIATIONS ……................................................................ix CHAPTER 1: INTRODUCTION .................................................................................1 1.1 Motivation ...............................................................................................................1 1.2 Objectives ................................................................................................................5 CHAPTER 2: BACKGROUND AND LITERATURE REVIEW ................................8 2.1 Fishery Management in Theory and in Practice ......................................................8 2.1.1 Basic models of fisheries ................................................................................8 2.1.2 Institutions and regulations to manage fishery industry …………….……..12 2.1.2.1 Co-management ……………………………………………………12 2.1.2.2 Property rights and fisheries management ……………………...…12 2.2 Literature Review….………………………………………………………….….15 2.2.1 Case studies on biological and economical issues related to fishery....…....15 2.2.2 Evaluating fishery management practices in developing nations……..…...17 2.2.3 Evaluating fishery management practices in developed nations…………...21 CHAPTER 3: DIGHA FISHERY …………………………………………………...26 3.1 Introduction ……………………………………………………………………...26 3.1.1 Prevailing fishery management system in India …………………………...26 3.1.2 Prevailing fishery management system in West Bengal …………………..26 3.2 Digha Fishery ……………………………………………………………………28 3.2.1 Study site …………………………………………………………………..28 3.2.2 Market channel ……………………………………………….……………29 vi 3.2.3 Primary data collection ……………………………………………………32 3.2.4 Data analysis ………………………………………………………………32 3.2.5 Conclusion …………………………………………………………………43 CHAPTER 4: ECONOMIC ANALYSIS OF A RIGHT BASED FISHERY MANAGEMENT POLICY IN A HETEROGENEOUS FISHERY SETTING ……45 4.1 Introduction ……………………………………………………………………...45 4.2 Economic Analysis of a Rights Based Fishery Management Policy ……………45 4.3 Theoretical Model………………………………………………………………..47 4.4 Results and Conclusion ………………………………………………………….58 4.5 Challenges of Implementing the Policies and Suggestions ……………………...59 REFERENCES ............................................................................................................60 APPENDIX A ……………………………………………………………………….65 APPENDIX B ……………………………………………………………………......66 vii LIST OF TABLES Table 3.1: Fishery Management Institutions in West Bengal and Their Functions….27 Table 3.2: Demographic Characters …………………………………………………33 Table 4.1: Industry Participants ……………………………………………………...48 viii LIST OF FIGURES Figure 1.1: World Fish Utilization and Supply ……………………………………….1 Figure 2.1: Relationship between the Fish Population (Stock) and Growth ………….8 Figure 2.2: Efficient Sustainable Yield for Fishery …………………………………..9 Figure 2.3: Open Access Fishery Outcome ……………………………………….…11 Figure 3.1: Map of West Bengal, India with Location of Digha Circled ……………29 Figure 3.2: Market Channel of Digha ……………………………………………….31 Figure 3.3: Number of Children Engage in Fishing …………………………………34 Figure 3.4: Likelihood of