The effect of haul size on price in the demersal seine fishery in Norway and implications for management

Summary

The high catch efficiency of demersal seine nets has made them widely used in commercial fisheries globally. However, when fish density is high, these nets can result in very large catches, leading to poor fish welfare and quality and the loss of dead and injured fish if the net bursts. Animal welfare is a public good closely tied to product quality in fisheries. Therefore, it is anticipated that smaller hauls will be encouraged through price premiums for high-quality fish in the ex-vessel market. Market failures, including information asymmetry regarding fish welfare and quality and imperfect competition, impede quality-based pricing and diminish economic incentives for reducing haul sizes. With recent proposals to regulate haul sizes in this fishery, estimating the price premium for smaller hauls has become relevant for management. In the case of command-and-control measures, this will contribute to the cost-benefit analysis. Regulations aimed at correcting market failures can also be considered. Either intervention will only be implemented if the social cost of inadequate fish welfare exceeds the social benefit of large catches. In a study of the Norwegian cod fishery, a mixed-effect model is applied to data on haul sizes for Atlantic cod catches and prices while accounting for other factors that may influence prices, including seller and buyer heterogeneity. The findings reveal only a weak link between haul sizes and prices, suggesting the presence of market failures. The discussion covers social costs and benefits and outlines potential management implications.