Pros and Cons of the Fishing Market

The pros and cons of the fishing market can be established by looking at decision-making factors, resources, and markets within the industry itself. While analyzing the pros and cons of the fishing market, we can allow ourselves to look at the bigger picture, as well as the lasting effects on the environment/people’s livelihood that arise from our actions. The fishing market is essentially a marketplace for catching/selling fish products. Fishermen and women spend their days on ships collecting mass amounts of fish to sell for people across the globe to buy and eat. Although from the outside, it seems like an efficient market system, there are many problems with the fishing market. Many believe that “overfishing” is one of the biggest problems. There won’t always be enough fish in the sea to meet the needs of human consumption. The amount we can supply, and the demand of fish will always be changing- one can increase, while the other decreases and vice versa. Resources may not always be as prevalent as they are at the moment- we must think of scarcity of resources as well as a scarcity of the product itself. The fishing industry is responsible for many peoples’ livelihood and source of income, so if anyone is directly affected by a crash in the market, it would be them.

It is important to establish the benefits and costs of the fishing industry. In the article “A Rising Tide”, the author states that there is a prediction that “by 2048, all the world’s commercial fisheries would have collapsed”. (The Economist) Overfishing is a very big cost of the fishing market. Overfishing can cause a shortage of fish in our oceans. Having a shortage of fish to sell and trade could cause a decrease in certain populations of fish (which could eventually lead to extinction), irreversible changes to the ocean ecosystems, which leads to irreversible changes to our environment. If no changes are ever made to the fishing industry, the demand for fish would surpass the supply, causing a shortage of fish in the long run. Some fishermen and women could lose their jobs if we get to a point where the supply does not equal the demand. There will be no need for them at that point. Scarcity of fish is something I don’t think many people in the fishing industry keep in mind. There is never an infinite amount of fish in the sea. We must look at the resources we have and determine if the supply is equal to the demand to keep the market at an equilibrium.

In addition to marine life being negatively affected, another con of the fishing industry is the effect it has on the fishermen. Researchers found that many of the working conditions of fishermen, such as “fishing in stormy weather, or heading out to sea in a boat with too much heavy fishing gear” can be extremely unsafe, putting many of the resources at risk. (NPR) If the demand for fish is higher, the people who supply the fish (fishermen) will be working much harder to meet that demand. It is something to consider when we research the pros and cons of the fishing industry. The documentary Cod is Dead dives into many points of view of the fishing industry. It discusses how the limits put on fishing can negatively affect the fishermen, who rely on this as their main source of income. If less fish are being caught, but the suppliers are all still there, a surplus of workers are present with no job to do. Fishermen are a resource to the fishing industry, so we must think of their benefit. If there are too many, or too little fishermen, the equilibrium would be set off. This brings up the concept of marginal analysis in decision making in this industry. In order to maximize profit, we must consider the marginal costs/benefits of hiring more fishermen because the demand for fish is so high, or firing thousands of people because eventually the demand will outweigh the supply.

Additional resources of the fishing industry are the ships and boats, the employees, the equipment, the fish themselves- all of these contribute to the catching and selling of fish in the United States. Although all of these are necessary for an efficient market, resources are not always easily accessible. If you don’t have an adequate amount of resources to obtain your goal, the goal will not be reached- or at least not in a timely manner. The economic goal in the fishing industry should be to maximize profit. This can only be done when the industry is in equilibrium- when the supply of fish is meeting the demand of fish. If the supply or demand are greater than the other, shortages, surpluses, and scarcity will occur. These are not things you want in any industry- let alone an industry that is responsible for feeding billions of people every day.

Market failures occur when a market is insufficient in one way or another. One of the biggest, most up and coming solutions to the problems in the fishing market are catch shares. Catch shares can be defined as “a management strategy that dedicates a secure share of fish to individual fishermen, cooperatives, or fishing communities for their exclusive use.” (NOAA) Catch shares are used for many reasons in the fishing industry. They are used to prevent overfishing, ensure fisheries are remaining sustainable, reduce bycatch, and maximize fishermen’s overall safety. (NOAA) Catch shares are important because scientists can determine how healthy a place where fish are used for commercial use is and determine how much fishing can be done there safely. A limit is placed on how many fish can be caught in that area to maintain a healthy population.

This is extremely important to prevent certain species of fish from going extinct, which could have a chain reaction of events to our ocean’s ecosystems. Each fisherman is given a quota (limit) on how many fish they can catch. No matter what the market is, quotas are extremely important to provide necessary restrictions. Catch shares help reverse the failures of the fish market by preventing a surplus or shortage from occurring, which are caused by overfishing. Regulations from the government are necessary in this situation because balance is required to reach an equilibrium in the system. Without catch shares, some fishermen could be overworked. Catch shares ensure that everyone is allotted a certain amount of catch so it allows equal labor amongst fishermen, which is important to prevent overworking. On the contrary, catch shares can have a negative affect on fishermen because they can decrease the amount of work they are allotted to do, which could decrease their pay rate and salary.

I think it is important to consider positive and negative externalities in the fishing market when looking at market failures and fixes. Positive externalities are positive outcomes that affect that outside of the market itself, and negative externalities are the opposite- negative outcomes that affect those not directly involved in the market. Some negative externalities would come from countries that are not apart of the EU (European Union) who do not consider quotas of any kind and continue overfishing. “Therefore, the overfishing is an example of a 'tragedy of the commons’, as commonly owned resources lack the protection from property rights and are susceptible to over-exploitation.” (IB Economics)

Tragedy of the commons is a term used to describe a situation in a shared-resource system (the ocean in the fishing industry) where individual users acting self-sufficiently according to their own self-interest behave contrary to the common good of all users (catch shares) by depleting that resource through their action. (Wikipedia) Other countries overfishing or not following the rules of catch shares and quotas can throw off the equilibrium for the rest of the market. I think the regions that follow catch shares and quotas should have some sort of positive reinforcement or compensation to encourage other regions to do the same. Catch shares encourage all the things that are necessary to fish without causing too much irreversible damage to the fish population. When talking about positive and negative externalities, it is important to think about who exactly is apart of the fishing market; the fishermen, fishery managers, consumers of fish, captains, etc. How are they being affected by overfishing?

As mentioned earlier, there are some regions that do not adhere to the rules of catch shares because they are not in an area where they are implemented. But in some cases, fishermen who are well aware of catch shares in their area still choose to overfish out of their quotas. “Fishermen generally understand the risks of overfishing. Yet still they flout quotas, where they exist. That is often because they take a short-term view of the asset—they would rather cash in now and invest the money in something else. And it is invariably compounded by a commons-despoiling feeling that if they don't plunder, others will.” (The Economist) I believe this is an interesting point because it touches back to negative externalities. The fishermen who do not follow quotas don’t really see anything wrong with it initially because they are not the ones affected directly by overfishing. They are doing what they need to do to make money. But what they don’t realize is the long term, negative affects that come from not following quotas (which were made for a reason) and how it affects people outside of the fishing market. The biggest picture here is how overfishing negatively impacts our oceans, which over time, negatively impact our entire ecosystem. I think catch shares are a great way to implement limitations and prevent irreversible damage to our planet.

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