MODELING THE BIOECONOMICS IMPACTS OF CO- MANAGEMENT IN CHILEAN ARTISANAL FISHERIES MAURO ARIAS ROJAS EVA IGLESIAS MARTINEZ

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1 MODELING THE BIOECONOMICS IMPACTS OF CO- MANAGEMENT IN CHILEAN ARTISANAL FISHERIES MAURO ARIAS ROJAS EVA IGLESIAS MARTINEZ Deparmen of Agriculural Economics and Social Sciences. Agriculural Engineer School of Tecnical Universiy of Madrid Tel: Paper prepared for presenaion a he 107 h EAAE Seminar "Modeling of Agriculural and Rural Developmen Policies". Sevilla, Spain, January 29 h -February 1 s, 2008 Copyrigh 2007 by [Mauro Arias Rojas and Eva Iglesias Marínez]. All righs reserved. Readers may make verbaim copies of his documen for non-commercial purposes by any means, provided ha his copyrigh noice appears on all such copies.

2 Absrac The failure of he cenralized managemen sysem and he inense over-exploiaion of benhonic resources along he Chilean coas moivaed he design and implemenaion of an innovaive comanagemen policy in Alhough is posiive effecs have already been recognized a biological and organizaional level, doubs have been posed wih regards o is economic susainabiliy. In his paper, we presen a bio-economic evaluaion a naional level for one of he mos imporan and valuable benhonic resources, he Loco ecosysem. A dynamic simulaion model is developed in order o compare and evaluae he effeciveness of he radiional cenralized managemen and he comanagemen sysem recenly implemened in Chile. The resuls show ha he amoun of capures and effor devoed during he cenralized managemen period were significanly underesimaed due o he exisence of illegal capures. On he oher side, he resuls reveal ha, afer a fearful beginning, he values for revenues, capure and sock were larger han hose ha would have been obained in case he former cenralized sysem had persised. Keywords: naural resource modeling; marine policy; co-managemen policy; arisanal fisheries managemen; Terriorial Use Righ Fisheries 1. Inroducion Ten million people in Lain America depend direcly from fishing (Agüero, 1992), being 95% arisanal fisheries (FAO, 1993). Neverheless, up o 75% of he marine resources wih commercial value are exploied or over-exploied, leaving only 25% of he resources sub-exploied (FAO, 2004). One of he main cornersones in he curren policy agenda is o avoid marine resources exincion and o guaranee he susainabiliy of arisanal fishery communiies. In recen, decades, he old cenralized managemen policies are giving way o new decenralized managemen policies, as is he case wih he recen managemen benhonic resources policy in Chile. The Loco (Concholepas concholepas) is he main benhonic resource exploied by he arisanal fishermen in Chile. Since i is a highly demanded produc wih high marke prices, i has been subjec o inense over-exploiaion.

3 The loco regulaion has been hisorically based on a cenralized managemen sysem. This sysem urned ou o be ineffecive and consanly mocked by is users 1 (Soz, 1997). Therefore, several years ago, he Adminisraion adoped an innovaive co-managemen sysem where small-scale fisheries and local auhoriies share responsibiliies over managemen, assessmen and enforcemen of benhonic fishery policy. Alhough, he evaluaion of he new sysem appeared o have posiive impacs in he managemen of arisanal fisheries, some doubs have been posed wih regards o is economic susainabiliy (SUBPESCA, 2004 and Monoya, 2006) In his paper, we presen a bioeconomic evaluaion a naional level for one of he mos imporan and valuable benhonic resources, he Loco ecosysem. A dynamic simulaion model is developed in order o compare and evaluae he effeciveness of he radiional cenralized managemen and he comanagemen sysem recenly implemened in Chile. 2. Background 2.1. The evoluion of fisheries policy Afer he II World War, he sea was seen as a poenial source of proeins ha should be exploied (Sanchirico y Wilen, 2002). Neverheless, i was soon realized ha unlimied and unconrolled access o marine resources was no efficien from a social poin of view. As a consequence, he resource would be prone o exhausion (Gordon, 1954; Schaefer 1954; Hardin, 1968; Osrom, e al, 1994; Conrad, 1995). The open access sysem ogeher wih increasing demand and echnological progress resuled in inefficien fishing overcapaciy and dramaic over-exploiaion of marine resource. In his conex, cenralized managemen sysems were adoped and evolved hrough differen policy sraegies. Firs seps worked owards he implemenaion of open access regulaed sysem, where boh resource exracion quaniy and ars of fishing were regulaed. This sraegy gave way o resriced access regulaed sysem, where he number of fishermen was also limied. Despie he posiive evoluion of cenralized policy, low susainabiliy of hese managemen sysems was ofen repored (Sanchirico y Wilen, 2002). 1 Be a sysem ha does no permi he conrol of he access o he resource, managemen cenralized sysem fisheries behavior is like han free access managemen sysems fisheries bahavior (Conrad, 1995).

4 In las decades, a marke approach has been promoed in fisheries policy and managemen.. Legal frameworks based on markeable fisheries propery righs have reached a noable developmen in some counries (Ahmed e al, 1992; Dubbink y Vile, 1995). Neverheless, he implemenaion of his approach is limied in developing counries where arisanal fisheries accoun for a large share of oal harves. Fears ha marke could displace arisanal fisheries and rigger he survival of local communiies has been ofen repored (FAO, 1996; Casilla, 1996; Parma, e al., 2001 y McGoodwin, 2002). Opposie o radiional cenralized policy or more recen marke approaches, an alernaive soluion has been proposed based on self-organized resource governance sysems also known as comanagemen sysem (Schlager y Osrom, 1992). Under his approach, sakeholders share responsibiliies in resource managemen and communiy paricipaion is considered essenial o achieve he success of he measure, (Osrom, 1990; Bromley, 1992; Pomeroy y Berkes, 1997; Sick, 2002). User paricipaion encourages susainabiliy and helps o reconcile boh he privae economics benefis and he resource conservaion for is children and communiy (Sick, 2002 y FAO, 1996) Co-Managemen in Chile In order o avoid boh resource exhausion and illegal exracion, he Chilean governmen ried o implemen differen managemen sraegies such as parial and oal closures, oal allowed cach (TAC) and individual quoas (IQs) (Keene, e al., 2002). However, lile success and lack of enforcemen has been repored (Soz, 1997). The implemenaion erriorial use righ fisheries sysem (TURF) in Chile consiues a compleely novel resource allocaion model in a counry wih no prior experiences in co-managemen sysems. Therefore, he Chilean experience has been presened as one of he mos imporan and ambiious iniiaives in arisanal fisheries (Villena and Chavez, 2004). The TURF sysem has delimied coasal areas where fishery communiies paricipae and ake responsibiliies in he managemen of benhonic resources (SUBPESCA, 2000). The only way for one communiy o become par of he TURF is o develop a benhonic resource assessmen in he requesed area. Once a susainable exploiaion plan is presened, he communiy can reques he adminisraion an exclusive exploiaion permi on he fishing area. Several sudies have already repored a posiive evaluaion of his sysem, mainly in wha concerns biological aspecs. Imporan improvemens, boh in size and biomass of he resource, have been appreciaed in TURF areas (Casilla and Fernández, 1998; Pizarro e al. 2001, 2002 y 2004;

5 Universidad Caólica del Nore, ; and Monoya, 2006). However, ohers sudies have posed subsanial doubs and even indicae negaive resuls in he economic aspec (Soo, 2002; SUBPESCA, 2004; Universidad Caólica del Nore, ; and Chavéz and Zúñiga e al. 2005). 3. Mehodology 3.1. Model selecion Alhough he posiive effecs of he AMERB sysem have been recognized and confirmed a biological and organizaional level, hardly one has managed o quanify is benefis from an economic poin of view (SUBPESCA, ). In he presen sudy, a bioeconomic evaluaion of his recen co-managemen fishery sysem is developed a naional level. Informaion has been gahered in he welve Chilean regions ha represen more han four housand kilomeers of coas along which 400 housand persons depend upon arisanal fisheries o live (FUNASUPO, 1997). A presen, more han 500 handling areas are acually operaing and he same number is already in he way o be approved. A bioeconomic model is developed in order o simulae he evoluion of he ecosysem should he radiional cenralized policy sill be in place. I is assumed ha he radiional cenralized managemen sysem based on closures and quoas exered an inoperaive monioring and enforcemen, acually operaing as a de faco free access sysem. The resuls of he model allow us o evaluae and compare he effeciveness of he radiional cenralized managemen sysems and he co-managemen sysem recenly implemened in Chile. This sysem may be simulaed by a dynamic model in discree ime given by equaions (1)-(3) where X is he sae variable ha represens he biomass or exising ons of loco in period, and E is he conrol variable ha represens he effor or diving hours devoed o cach he resource during he same period. () X = X + f ( X ) h( X, E ) ( ) E = E g( X, E ) () 3 X X 0; E = E0 ( 4) 0 = for = 0 X and E 0

6 X E f(x ) Where: : loco biomass in period, measured in ones. : effor unis during period, measured in diving hours. : Loco growh funcion h(x,e ) : Cach funcion. Represena la moralidad causada por la acividad pesquera. g(x,e ) : Normalized benefis in fisheries aciviies. The sae equaion in (1) represens he dynamic behavior of he resource and predics he evoluion of he sock hrough ime. Thus, he quaniy of resource in he following period are deermined aking ino accoun he resource sock available in he previous period plus he sock growh funcion. Since he resource is exposed o he fishing aciviy, he individuals capured by he fishermen, given by h(x,e ), are hen deduced. I is assumed ha biological populaion growh follows a logisic funcional form as illusraed in equaion (5), where r > 0 refers o he inrinsic rae of populaion growh and k > 0 is kown as he carrying capaciy of he sysem. The logisic growh funcion has been widely used in fisheries evaluaion sudies (Seijo e al., 1997) X () = 5 f ( X ) rx 1 k Loco resource capure wihin a given period is assumed o depend on available sock and effor according o a Cobb Douglas funcion as in (6) which enables o es decreasing, consan or increasing reurns o scale. β γ ( 6 ) h ( X ) = αx E Equaion (2) represens fisherman behavior in a free access siuaion, assuming inoperaive monioring and enforcemen of cenralized regulaion. Following a similar approach o Smih (1969) and Bjørndal and Conrad (1987), his equaion saes ha changes in effor devoed o he loco capure depend on he benefi obained in he previous period, g(x,e ). This is, an increase in ne benefis will ranslae in greaer effor devoed o capure wihin he nex period. Normalized benefi g(x,e ) is defined in (7) as he raio beween ne income and he effor cos, where p is he marke price of he resource and c is he opporuniy cos of effor: ( 7 ) g( X, E ) = pαx β E ce γ ce In general, i is assumed ha he exra effor is produced by he enry of new agens, raher han by changes in effor of exising agens (Anderson, 1986). In he same way, i is assumed ha changes in effor ake place as an immediae response o changes in he benefis (Gordon, 1954).

7 3.2. Esimaion of model parameers and coefficiens Few works have aemped o characerize he biological parameers of he loco populaion. One of hese is González e al. (2005), who deermined he value of he inrinsic rae of growh, r. On he oher hand and aking ino accoun esimaions carried ou by Soz and Pérez (1992) and González e al. (2005), he carrying capaciy was calculaed a naional level. A muliple linearized regression analyses on cross-secion daa was carried ou in order o esimae he unknown parameers in equaion (6). Since here were no ime series available, informaion was gahered a naional and regional level on loco capures, sock and effor for he 1996 period (Ecofish, 1998; IFOP, 1994, 1996, 1999 y 2003). The regression resuls are repored below: () 8 lny ln 0, ,492 ln X + 0,718ln E = R 2 = 0,942 and n=12 (-5,927) (3,996) (2,257) The model was fied by he usual leas squares procedure. Numbers in parenheses denoe -saisics and show ha each regression coefficien is saisically significan. The coefficiens show he correc sign and reveal increasing reurn o scale. The model R 2 of 0,942 is relaively high and here was no evidence of auo-correlaion. Finally, personal inerviews were carried ou o characerize arisanal fisheries and gaher informaion on exracion and effor coss. Daa on resource price was obained hrough official fiseheries saisics (IFOP). Table1: Biological parameer value Parameer Descripion Value Source p Price per resource uni (U$ per on) 3.358,08 Ecofish, 1998; IFOP, 1994, 1996, 1999 y 2003 c Cos per diving effor uni (U$ per 50,24 Personal inerviews diving hours) r Rae of Populaion Growh 0,0068 González e al. (2005) k Carrying Capaciy (resource on) Soz and Pérez (1992) and González e al. (2005),

8 Table 2: Coefficien Value Coefficien Descripion Value Source α Independen Coefficien 0,0057 Own elaboraion β Dependen Coefficien of X 0,492 Own elaboraion γ Dependen Coefficien of E 0,718 Own elaboraion 4. Discussion of resuls The dynamic model simulaes fishermen behaviour and he evoluion of he loco ecosysem under he radiional cenralized managemen policy. As explained before, i is assumed ha policy enforcemen is ineffecive and, hus, fishermen operae under a de faco free access siuaion. Model resuls are analyzed and compared wih repored official daa for wo differen periods: he firs period beween 1996 and 1997 corresponds o closure and quoa sysems under he radiional cenralized approach, while in he second period from year 2000 on, a TURF or co-managemen approach progressively replaced he old policy. Model resuls obained for he firs period are illusraed in able 1 and a comparison of official and model cach values is ploed in figure 2. The whie area in figure 2 shows ha according o official daa annual caches amoun o around 2000 ons per year. However, cach levels obained hrough he simulaion model, depiced in he grey area, were significanly larger han he official cach daa hrough he whole period This significan difference may confirm ha oal fishing cach is underesimaed and gives a picure of he poenial imporance of illegal fishing aciviies, as has been repored by several auhors (Keene, e al., 2002 ; Soz, 1997). The IFOP (1999) recognizes ha acual caches and effor could be higher han repored official values, due o illegal fishing aciviies. Monoya (2006) esimaes ha illegal fishing may represen more han 50% of allowed caches in 1996.

9 Caches (on) Year Official Simulaion Figure 2: Comparison beween he official caches values and free access simulaion caches values obained during cenralized managemen period. However and according o simulaion values, i has o be noed ha cach raes deceleraes from 1998 on. Simulaion resuls in Table 1 show ha in he beginning of he period, arisanal fisheries profi rises as cach level increases. However, as fishermen increase heir cach over he naural populaion growh level, a lower resource biomass can be expeced. Smaller resource biomass forces hem o increase he effor and ime devoed o loco search and cach. As a consequence increasing cos, diminishing ne income and lower incenives for illegal fishing may explain he deceleraion of he cach rae. Table 3: Sock, effor and profi under open access simulaion values beween 1996 and Variable Year Caches (on) Sock (on) Effor (hrs) Profi (US$) Source: Own elaboraion 1. Corresponds o official values (X 0, ). Values deermined hrough field work by Ecofish (1998) and IFOP (1999). 2. Corresponds o 150% of official values (Y 0, y E 0 ). Values deermined hrough field work by Ecofish (1998) e IFOP (1999). In 1999, he resource sock reaches an hisorical minimum and he adminisraion decided o implemen a oal closure a naional level. Afer ha, he Adminisraion decides a drasic change in

10 he policy model due o he ineffeciveness of cenralized sysem and sars he implemenaion of he co-managemen sysem. Model resuls obained for he second period are illusraed in able 2 and a comparison of official and model cach values is ploed in figure 3. Official daa in his period correspond o he implemenaion of he co-managemen sysem. During his ime a biological recovery of he resource has been observed (Pizarro, e al., 2002 y 2004; Chávez y Soo, 2002). Thus, i is assumed quoas have been respeced and ha illegal fishing does no occur so ofen. A presen, he resource can only be exraced in hose areas explicily requesed by he fishermen. During he firs years of operaion he TURF areas did no surpass he hundred bu soon reached almos 400. Tha explains he increasing rend in official cach values for his period, as i may be appreciaed in he figure 3. Caches (on) Year Simulaion Official Figure 2: Comparison beween he official caches values and free access simulaion caches values obained during co-managemen period. Model resuls in able 2 illusrae wha would have occurred if he radiional sysem would have no been replaced and allow o evaluae he poenial gains of he co-managemen approach. Under his hypoheical scenario, profi urns negaive due o severe resource depleion. Finally, he resuls forecas he resource exincion if he open access sysem had persised. Decreasing profis would cause progressive exi and abandonmen of fishery aciviy and he collapse of he sysem.

11 Table 4: Sock, effor and profi open access simulaion values beween 2000 and Variable Year Caches (on) ** Sock (on) ** Effor (hrs) Profi (US$) Source: Own elaboraion ** : Resource exincion. Neverheless, i has o be noed from figure 3 ha he iniial implemenaion of he co-managemen approach ranslaed ino lower caches, and lower profis, han hose aained under he hypoheical persisence of he ineffecive cenralized policy. This iniial cos may jusify he subsanial doubs ha have been posed on he economic gains of he new approach. However, our resuls also reveal ha his iniial cos is largely compensaed hrough a longer erm economic susainabiliy. 5. Conclusions The replacemen of he closure and quoa sysem under a radiional cenralized policy and he implemenaion of a co-managemen approach is regarded as one of he mos imporan and ambiious iniiaives in arisanal fisheries. A key elemen in his recen policy approach is ha small-scale fisheries and local auhoriies share responsibiliies over managemen, assessmen and enforcemen of benhonic fishery policy. Alhough he posiive effecs of his sysem have already been recognized and confirmed a biological and organizaional level, subsanial doubs have been risen wih regard o is economic susainabiliy. A dynamic simulaion model is developed in order o compare and evaluae he effeciveness of he radiional cenralized managemen and he co-managemen sysem recenly implemened in Chile. The resuls show ha he amoun of capures and effor devoed during he cenralized managemen period were significanly underesimaed due o he exisence of illegal capures. This same behaviour would probably have coninued if he ineffecive radiional policy had persised and illegal fisheries would have leaded he resource o exincion.

12 On he oher side, he resuls reveal ha, afer a fearful beginning, he values for revenues, capure and sock were larger han hose ha would have been obained in case he former cenralized sysem had persised. In summary, even if he new co-managemen sysem has implied a cos in is iniial phase, i has avoided he resource collapse in he shor erm, and guaranees larger biological and economic gains in he long erm. Reference 1. Agnello, R.J. and Anderson, L.G. (1983). Producion Responses for Muli-Species Fisheries. Can. Fish. Aqua. Sci. 38: Agüero, M. (1992). Conribuciones para el Esudio de la Pesca Aresanal en América Laina. Edior ICLARM Conf. Proce. 35. Pp113. Amserdan, Holanda. 3. Ahmed, M; Capisrano, A.D. and Hossain, M. (1992). Redirecing Benefis o Genuine Fishers: Bangladesh`s New Fisheries Managemen Policy. Naga, he ICLARM Quaerly. 15(4). Pp Anderson, L.G. (1986). The Economics of Fisheries Managemen. Revised and enlarged ediion. The John Hopkins Universiy Press, Balimore. 5. Bjørndal, T., and Conrad J.M. (1987). Capial dynamics in he Norh Sea herring Fishery. Marine Research Economics. 4: Bromley, D.W. (1992). The Commons Propery, and Common-propery Regimes. In Making he Commons Work: Theory, Pracice, and Policy. Ed. D.W. Bromley. Insiue for Conemporary Sudies, San Francisco. 7. Casilla, J.C. (1996). La Fuura Red Chilena de Parques y Reservas Marinas y los Concepos de Conservación, Preservación y Manejo en la Legislación Nacional. Revisa Chilena de Hisoria Naural 69: Casilla, J.C. and Fernández, M. (1998). Small-Scale Benhic Fisheries in Chile: on Comanagemen and Susainable Use of Benhic Inverebraes. Ecological Applicaions 8 (Supplemen): S124-S Clark, Colin W. (1990). Mahemaical bioeconomics. The opimal managemen of renewable resources (2 nd ed). John Wiley and Sons, New York, 386 pp. 10. Conrad, J.M. (1995). Bioeconomic Models of he Fishery. The Handbook of Enviromenal Economics. Chap. 18. Ediado por Daniel Bromley, Blackwell Publishers.

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