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Published by Ly Sophea
resource economics
resource economics

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Published by: Ly Sophea on Feb 13, 2013
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EMDV8078-Weekly Assignment

EMDV8078: Introduction to Environmental and Resource Economics

Weekly assignment: Tutorial 9/week 10 (Semester 1, 2012)

Assignment questions: Q1: Is the efficient level of fish catch effort above or below that which gives the maximum sustainable yield?
According to fish biology, the fish stock with increasing growth rate (r>0) will continue to increase until it reach maximum growth rate (or maximum sustainable yield) and eventually reaches stock carrying capacity where growth rate equal zero at natural equilibrium point. Then, in the absence of outside influence, the natural equilibrium process remains stable and eventually restore the population growth back (in case stock decrease). However, due to some external forces that distort the natural stability and cause the stock below the stock size called the “minimum viable population”, the species will become extinct due to negative growth rate.
C /Reve ost nue or b enifit $ Tocal Cost MB 0 =

MB =S of TC MC lop =

Total Net benefit

Total revenue/B enifit



F ishingE ffort

When the catching equalizes the maximum sustainable yield where all MB from the catch is exhausted until zero to reach the maximum catch amount at Em where beyond that point will cause less yield due to decline fish growth. Illustrated in static model graph( assuming that fish price and MC of catching effort is constant, catch per unit of effort is proportional to the size of the stock), Em (Maximum Sustainable Yield) is not ‘efficient’ because it does not maximise NET benefit. At point Ee (Economic Efficiency level of effort) where MC= MB, the total net benefit (Net (benefit = Total Benefit – Total Cost) ) is at its maximum, also the amount of catch is less than at point Em due to less level of effort. Increasing effort beyond Ee means more effort yields lower extra benefit than the extra costs (MB<MC) and conversely below Ee, MB > MC, which encourage fisherman to increase more effort. Efficient level of fish catch effort is better or above the efficiency at Maximum


where NB2 < NB1. Efficiency implies not only that the catch must be at the efficient level. TC2 C /Revenue or benifit ost $ TC1 NB2 NB1 Total revenue/Benifit Ee F ishingEffort In this graph. the fisherman will increase the labours. Technology innovation will be a another problem of overharvesting since it can reduce the effort and cost of fishing. Fishing tradable quota where quotas held by all fishermen should be equal to the efficient catch for the fishery is more flexible measure to control the fishing activities since the government and buy and sell quota on market.U5123854 EMDV8078-Weekly Assignment sustainable yield because it provide better net benefit with less catching effort. the government may impose restriction on size the trawlers in an attempt to increase the cost of fishing effort and reducing the amount of fishing. therefore increasing Total cost and shrinking net benefit. market demand and price will be the other factors for fishing decision in the real world. This policy is not efficient and will not reduce overfishing problem because with smaller draggers. fishermen need to increase cost at TC2. To cope with this unsustainable fishing and declining stock. This policy makes income of fisherman suffers and will not reduce amount of catch. to get the same amount of catch at Ee. Other policies provide betters efficiency. but also it must be extracted at the lowest possible cost However. Q2: Would you advocate restrictions on the size of trawlers being used in an off-shore fishery? Why? Trawlers/draggers are kind of commercial fishing method that potentially overexploits the fish stock. 2 . Promotion of aquaculture is also profitable solution to reduce over-fishing problem. numbers of boats and machines to catch the same amount of price. Fishing Tax provides a better solution even it still increase the fishing cost which is transferred to Tax revenue for the society. thereby offsetting the restriction imposed by the regulation.

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