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Economics Research Institute Study Paper




Utah State University Department of Economics

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Despite their apparent economic benefits to harvesters, Individual Fishing Quotas (IFQs) have only been adopted in three U.S. fisheries: Mid-Atlantic surf clam and ocean quahog; South Atlantic wreckfish; and North Pacific halibut and sablefish. During the 1996 reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act, Congress temporarily blocked implementation of additional IFQ programs in U.S. fisheries. In this paper, we argue that because of the emergence of an alternative, the cooperative, it is unlikely that new IFQs will be adopted in federally managed U.S. fisheries. From an economic perspective, cooperatives offer the advantage of eliminating production externalities that may remain under an IFQ program with relatively large owner classes. More significantly, development ofIFQ programs appear to be increasingly overwhelmed by the proliferation of both equity concerns and seemingly interminable rent-seeking behavior-both issues that can effectively block adoption of IFQs. Ironically (and paradoxically?), by reducing the scope of the equity issues acknowledged, the cooperative alternative narrows the pool of claimants and modifies the behavior of the remainder so as to make implementation more likely. A further irony exists in that IFQs are widely thought to be best designed at the local/regional level while part of the appeal of the cooperative model is that it appears to shortcut the often protracted nature of the local/regional political process by relying on direct Congressional intervention.