Kahawai FAP

Kahawai Final Advice Paper

Ministry of Fisheries

29 June 2004

Allocation

Introduction

178. The Act requires that, when setting a TACC, you must have regard to the TAC for that stock and you must allow for recreational and customary Mäori fishing interests and other mortality to the stock caused by fishing. The Act does not provide any explicit criteria to guide determination of the allowances provided to each fishing sector. The nature of your discretion is broad. Subject to the constraints of the scope of the Act, you are able to take into account such factors you consider to be relevant to your decision and determine the weight you consider to be appropriate to be placed on such factors.
179. MFish set out a list of factors in the Statutory Considerations and Policy Guidelines section of the IPP that it considers being relevant to your decision. In addition, MFish identified judicial decisions that consider the issue of allocation of the TAC. In particular, case law has identified that:

1. you need to consider competing demands for a stock;
2. you do not need to provide for the needs of any particular sector when specifying an allowance;
3. you are able to vary the ratio between commercial and recreational interests; and
4. where commercial landings are reduced for sustainability reasons, reasonable steps should be taken to avoid the reduction being rendered futile through increased fishing by non-commercial stakeholders.

180. In general, the Act provides no legal recognition of landings taken by a sector prior to introduction to the QMS. Your discretion to determine allocation of the TAC is not fettered by catch histories of any sector.
181. In the instance of kahawai there are competing demands for the resource. MFish now recommends a reduction in current utilisation of kahawai. In the IPP, MFish set out two fundamental policy approaches for addressing competing demands. Both approaches are consistent with the Act. The two approaches are:

1. A claim-based allocation describes a situation where allocations are made on the basis of a consideration of the legitimacy of claims to the resource. Generally these claims are based on some form of present or historical association with the resource, giving rise to expectations on the part of fishers (or classes of fishers) with respect to on-going future involvement; and
2. A utility-based allocation describes a situation where allocations are based on the utility (or quantum of well being) that would flow from a particular allocation. This method tends to favour allocations to those who value the resource most (downplaying the importance of past associations with the resource). As such it tends to have a focus on the present rather than the past.

182. Information available at the time suggested that current combined levels of utilisation were within the more conservative of the best available MCY estimates. Accordingly the IPP suggested there was no scarcity in the fishery and therefore no clear-cut requirement to consider reallocating the fishery between sector groups on the basis of utility value or any other consideration. However, that is no longer considered to be the case and if you accept the need for a reduction in the current level of utilisation to achieve levels of kahawai stocks that are sustainable in the long term you will need to consider the implication of making allocations when there are competing demands for the available resource.
183. MFish has a policy preference in this circumstance for a claims based allocation and recommends that reductions in recreational and commercial utilisation occur in equal proportions. As matter of policy MFish does not recommend a reduction in the allowance proposed for customary Maori fishing but notes that this allowance is based on an estimate of current customary use that is contested in industry submission.

Utility value of the kahawai fishery

MFish initial position

184. The IPP discussed estimating utility value for the kahawai fishery at paragraphs 126-130. It noted that there is a great deal of uncertainty with information used to assess utility value, particularly for the recreational sector where non-market valuation techniques are used. However, recreational estimates of value provided by the South Australian Centre for Economic Studies (SACES) [9] and a proxy valuation for kahawai to the commercial sector are available.

Stakeholder submissions

185. Sanford submits that its purse seine fleet operates year-round, fishing a multi-species catch plan of which kahawai contributes from 10-15% by value. These vessels generate annual sales of which $2.5 million is attributable to kahawai. It submits that a reduction in catch would render one or more of its five domestic purse seine vessels unviable. Sanford lists 104 jobs associated with its purse seining operations.
186. Sanford notes that kahawai presents a development opportunity for the seafood industry as greater value markets are being developed. Exports are increasing overseas, particularly in the Middle East and the opening of the Auckland Fish Market this year will result in further increases in domestic sales. The Sanford submission includes a table suggesting a progressively increasing trend in kahawai sales value per kilogram from $1.08 in 2001-02 to $1.30 in 2002-03.
187. Sanford submits that commercial fishing contributes valuable employment and foreign exchange earnings to the economy, as well as providing safe, healthy seafood for the majority of the New Zealand population who do not fish for sport.
188. SeaFIC and TOKM contest the non-market valuation study used to derive estimates of recreational value (SACES). Both submit that the survey is flawed and has attracted academic criticism in the past.
189. The RFC notes that the SACES project found that kahawai have a greater value as a recreational fish than as a commercial fish and that kahawai is second only to snapper in terms of overall recreational value. It submits that these results reinforce the value and importance placed on kahawai by the RFC and to the recreational sector.
190. Non-Commercial Fishers notes that while the commercial value is $1 700-$5 100 per tonne (an estimated provided in the IPP) it submits that the value of most purse seine caught fish would be at the lower end of this range. A body of supporting submissions oppose the commercial use of a fishery highly valued by recreational fishers.
     

MFish response

191. While noting the economic importance of kahawai to Sanford and the factors raised regarding the potential for greater value markets for kahawai MFish still considers that the present commercial valuation for kahawai remains within the range of values considered in the IPP.
192. MFish notes the criticism raised in submission regarding the SACES survey but considers that much of this has been addressed in the past. Despite the uncertainty in non-market valuation (acknowledged in the IPP) MFish notes that there is considerable disparity between estimates of commercial and non-commercial value (refer IPP paras 126-130).