It takes a revolutionay to see the light, reject state socialism, and see that the ownership of property is key for a free and prosperous society. It takes a particularly brave soul to introduce the idea in fisheries.
Individuals Owning Property Is Bad?
The idea seems preposterous. But, former Commissioner Maria Damanaki, did just that. While the reform of the Common Fisheries Policy, as put forward by the Commission was in the main backed, Member States, the fishing catching industry and most (although not all) NGOs banded together to generate the idea that modern property rights should not be used in fisheries.
By modern, I mean the idea that individuals can own and trade property with limited interference from the State. After the demise of communism in most of the world, the economic ideas of North Korea, that reject the idea that individuals should hold property rights, own farms and housing, have been soundly discarded. In any other area of economic life, people who wanted a return to the economic middle ages would be laughed out, but not in fishing.
What people do not realise is that fisheries is often one of the last vestiges of feudalism backed up by state protectionism. I am not talking about the flow of taxpayers money (which we call subsidies) that in any countries props an otherwise bankrupt industry. I am talking about two stranger realities.
First, the ownership of the quota in fisheries is often held by the government. The property right is held not by the individual, as one would with a company, farm or house, but with the State. In Ireland, the government hands the quota out each year at their discretion. In the UK, fishermen learned, after going to court, that it was the government, and not the fishermen, who owned the quota.
Second, all too often the details of who holds the quota is secret. The UK government and industry fought off a campaign by Greenpeace and others to have the details made public. It took the common sense of the former UK fishing Minister, Richard Benyon MP, to reveal the information.
Big Profits For Some
Fishing quotas are big business. The right to fish the sea is valuable. Leasing the stock brings returns often in excess of 10% or more. Those are returns that only some of the best hedge fund managers could secure.
Despite this less than clear form of ownership banks continue to loan money to fishermen based on the guarantees drawn from the quota. And, fishermen buy and sell quota in a less than public, but never the less profitable, market for quota.
There Is An Alternative
But, there is an alternative. In California, the US NGO The Nature Conservatory were allowed to buy the quota in Morro Bay, California. They were able to buy a lot of it. But what they did with it is remarkable. They leased the quota back to the local fleet. But, they placed conditions on what fishermen did when they went fishing.
The fishermen did not like this. Rich outsiders were coming in and telling them how to fish. This NGO would only lease quota to boats that used selective fishing gear and demanded that the vessels use CCTV to ensure that the rules were complied with.
I suspect the fishermen were angry as hell. Rich outsiders had turned up on their patch, bought up what they saw as their quota, and imposed rules upon them they did not want. But, with private property rights protected in the US, they didn’t have government to turn to as the government no longer owned the quota. It was now in the hands not of self-interested venture capitalists, but of philanthropists, who wanted to bypass the indolence of the regulator, politician and fishing lobbyist, and drag the industry into the 21st-century.
Unsurprisingly, it all worked. The industry prospered, the stock, in an and in all likelihood the value of the quota of style skyrocketed, and the idea of returning to the past would be laughed away.
Why Europe Should Follow
Philanthropists and venture capitalists should be able to do the same thing in Europe as they can in America. But, governments, all too often beholden to the interests of fishing industry trade associations, will stop this.
Even countries that have introduced ITQs, all too often introduce national ownership rules. Of course, whilst the idea of nationality requirements and residency rules are contrary to EU basic principles, it will not be easy to drag some of the industry into the 21st Century.
Interestingly, many fishermen realise this to be the best way forward. They want ITQs, they see the benefits, they know it works. And, it is clear that if governments allowed the progressive investment community to enter into the market, stocks in the North Sea, the Baltic, and other parts of Europe’s seas and oceans, could be bought, and preserved.
Time for Government To Step Out
The challenge is for government to remove itself from the equation.
The government’s track record on fisheries stock conservation is in most cases a poor one. As anyone who has witnessed the EU’s annual quota setting exercise, ministers seem more interesting in appeasing their industry by briefing their industry representatives, before, during, and after negotiations, and I’m sure there have been cases when governments signed in fishing industry representatives as part of the government delegation.
It was not surprise that the former Greek Revolutionary Communist, Maria Damanaki, took the opportunity to work with The Nature Conservancy when she left office. She has seen the future, and she knows it works.