Economics Report: Barramundi Stock Sustainability in Tinaroo Dam, QLD

This economics report examines the sustainable management of barramundi stock in Tinaroo Dam, Queensland. It begins with a general background on overfishing and the importance of the barramundi, a native Australian fish. The report then delves into the economic background of the barramundi stock in Tinaroo Dam, discussing the challenges of overexploitation and the need for regulation. An economic model is presented, including the determination of an optimal harvest rate and the use of policy instruments such as transferable quotas. The analysis covers the cost-effectiveness of the policy, underlying assumptions, equitable distribution, and the impact on innovation, administration, and enforcement. The report also addresses political and moral issues affecting the policy. The conclusion emphasizes the importance of sustainable fish stock management and highlights the complexities of implementing effective policies. The report references relevant books and online resources to support its findings.

Economics

Table of Contents
1. General Background....................................................................................................................1
2. Economic background of sustainable barramundi stock in Tinaroo Dam Qld............................1
3. Economic Model..........................................................................................................................2
3.1 Optimal harvest rate...............................................................................................................2
3.2 Policy instrument...................................................................................................................2
4. Analysis........................................................................................................................................3
4.1 Cost effectiveness of policy...................................................................................................3
4.2 Assumption underlying model and policy instrument...........................................................3
4.3 Equitable policy (distributional effect)..................................................................................3
4.4 and 4.5 Policy impact on innovation, effort to administer, monitor and enforce, with its
side-effects...................................................................................................................................3
4.6 Political and moral issues affecting the policy......................................................................4
5. Conclusion...................................................................................................................................4
REFERENCES................................................................................................................................5

1. General Background
Overfishing is considered as the most drastic problem today, where exploitation of fishes
results in declining their population. To conduct a study on this vast project, a research is done
on Tinaroo Dam, where economic evaluation is done its barramundi stock – a native fish of
Australia. The main purpose behind this study is maximise the utility of harvesting the fishes for
longer period of time, with cost efficiency by optimising the economic model. For this purpose,
cost effectiveness of policy, its distributional effect, including the political and moral issues that
impact the same is analysed briefly, for optimal harvesting.
2. Economic background of sustainable barramundi stock in Tinaroo Dam
Qld
Economic research based on fisheries or overfishing is widely applied on biomass approach
for describing population of fish over time. It refers to a major concerning problem today, where
catching fishes from sea at higher rates, results in depleting its stocks to recover. In context with
Tinaroo Dam, it is known for big barramundi and stocked mainly with barramundi as well as
sooty grunter, by Tableland Fish Stocking Society Inc. It is located on Atherton Tableland in
north of Yungaburra. With no vessel restrictions on dam, it is popular for fishing with a range of
water-sports. Through statistical report, it has been estimated that near about 18,54,550
barramundis from SIPS permit sales were stocked, with a total of 380,272 ones in Tinaroo Dam.
So, it indicates that over exploitation of fishing which causes difficulties in regulating its re-
population. Along with this, it also causes a number of potential threats like increasing pollution,
because fishes and other aquatic species are the finite resources in oceans that helps in balancing
the ecology. This would can break havoc as well as destroy marine ecology, environment and
disrupt food chain also. Due to continuous capturing of fishes at faster rate than their
reproduction, it reduces harvesting of targeted fishes.
Declining in population of the productive fish, results in reducing their stock as well, which
may completely diminish species of them in upcoming years. Similarly, it also has socio-
economic effects, because millions of people are relied on fishing for livelihood of them. In
addition to this, due to unsustainable fishing practices and no restrictions on the same at Tinaroo
Dam, no productive fishes will be left into this dam. Under such conditions, fisheries and
fisherman may bound to stop their business.
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3. Economic Model
3.1 Optimal harvest rate
Wild-capture barramundi in Queensland forms basis of recreational, important commercial
and customary indigenous fisheries. For stock status assessment, through data of Tinaroo dam
about stocking, it has evaluated that harvesting 54550 out of 380272 each year, so harvest rate is
near about 14% which needs to be added to the lake, for maintaining growth rate of this resource.
The cost of Barramundi in Queensland in 2018 is near about $40.00 price per kg, which
has crashed up by 40% as last year, due to oversupply at marketplace (Barramundi fishermen
'going broke with freezers full of fish' as industry nears collapse, 2018). While currently, it is
available at $39.00, so price doesn’t change much. Economic models of this fishery i.e.
barramundi farming within Australia have calculated break-even cost for 50 tonnes per year as
which are farmed to be AUD 9.25/kg or USD 6.90/kg. While break-even cost for small sample
like 200 tonnes per year farm within Australia at USD 5.1 or AUD 6.90. Larger farms however,
farm more than 1000 tonnes per year, who are able to take benefits of economies of scale as well
as production costs around USD 4.50–5.25/kg (AUD 6–7/kg). While as per case of Thailand, its
barramundi farms in can produce fish stock at USD 1.90/kg. Therefore, through economic
modelling of the Australian barramundi farms, it has evident that profitability of fisheries was
particularly price sensitive, with a reduction of AUD 1.00 or USD 0.75. It would result in a
decrease of 80% in equivalent annual return. In order to obtain optimal use of limited resources,
law of equi-marginal return or principle of the least cost combination can be used, which plays
an important role in production theory. This principle states that comparing the factor price with
productivity or growth rate, makes it possible to select the optimum combination of desired
resources. Therefore, in context with present problem, optimal harvest rate of barramundi can be
determined by applying the same principle.
To calculate optimal harvest rate, assume that a total stock of 54,500 will be extracted from
the total population of 380,272 with a growth rate of 14%, then –
Growth rate = 14%, MEC = 20
Price of Fish Per unit = $39.00
Cost of 50 tonnes of fish per year = $9.25 per kg
Profit1 = 14 x Q0
Earn interest r on cost –
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Growth rate goes to = (1 + 20%) x 14 x Q0 = 16.8 x Q0
Profit1 = $39.00
Unit price = $9.25 MEC = 14 x Q0
Profit = 14 x Q1
16.8 x Q0 = 14 x Q1
1.2 x Q0 = Q1
50 = Q0 + Q1
50 = Q0 + 1.2 x Q0
Q0 = 44.64
and, Q1 = 53.57
3.2 Policy instrument
In order to sustain fisheries stock and overcome from the threat of overfishing, Australian
Government has run Commonwealth Fisheries Harvest Strategy Policy and Guidelines, with aim
to manage fish species. Along with this, transferable quota policies have also made to achieve
sustainable fisheries, by limiting the fishing efforts (Quota managed fisheries. 2020). Quota-
managed fisheries define amount of fish that can be caught maximum within a year, where a
quota unit (% of total allowable commercial catch, TACC) is based on fixed percentage of fish.
In this regard, each commercial fisher within Australia is allocated the number of shares that can
be sold, bought or leased.
4. Analysis
4.1 Cost effectiveness of policy
Quota management especially Individual Transferable Quota Management result in
economic, biological and financial impact in Australia, that are broadly consistent with its
property rights. Along with this, operational aspects for establishing the effective quota
monitoring system as well as implementing the entire compliance program, is easier than other
policies.
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4.2 Assumption underlying model and policy instrument
Assumptions lying under the notions of quotas and TACs as principal tools of
management. It also includes unconstrained exit or entry of boats, which results in decline of
economic rents that are being earned in fishery. Along with this, to reach towards stable
structure, the fleet within aggregate quotas simulate within ten years. Due to this, New South
Wales fleet have become uneconomic due to decline in abundance of fish and only South and
Western Australian fleets shows the sustainable result.
4.3 Equitable policy (distributional effect)
Stocks of fishes is considered as common pool of resources, therefore, it is being managed
properly by giving exclusive assess rights to fisherman as Individual Transferable Quota. As
New Zealand was the first nation who introduces ITQs for fishing management and reducing
overfishing activities. Therefore, to manage equity issues, government has managed the access to
resource, by providing access rights to national fisherman for certain stocks such as tradable
fishing rights.
4.4 and 4.5 Policy impact on innovation, effort to administer, monitor and enforce, with its side-
effects
Quota management in multispecies of fisheries create problems rather than management
more, in terms of setting quotas for individual species, that are captured concurrently. So, in
many areas, this has led to arise issues because quotas setting for multi-species fishers has
ignored reality of harvesting process, which seems often impractical also. For example – Within
fisheries of European union, it has resulted in common practices in fishers of the illegal landings.
This would have led to create impractical arrangements in quota management, especially when
complexities regarding with multispecies situation have been considered. In nations, where a
tradition of operating within a co-management arrangement among fishing industry and
government, such operational and compliance difficulties, however, can be easily resolved. In
New Zealand, for an instance, a no. of demersal fish species has individual quotas, even though
their fishery is essential. So, while setting quotas for Barramundi and multi-species fisheries, the
fishery’s operational aspects must be known first in detail. Along with this, quota rules must be
formulated as well as implemented for controlling and monitoring the switching of fishing
operations by targeting one species or another within same.
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4.6 Political and moral issues affecting the policy
Way to assess the issues of fair distribution and equity, while introducing Individual
Transferrable Quotas, is considered as the main problem that affect this policy for fisheries or
fishing management. Restricting the dams for minimum catching of fishes raises issues of inter-
and intra-generational fairness. It also creates social problems while distributing access rights to
fisherman for fish stock.
5. Conclusion
It has been concluded from this entire report managing the fish stocks sustainably, is the one
of the main issues for Australian Government. To manage and handle this issue, however, a
number of steps have been taken yet, but issuing fairness while implementing the policies also
arise various problems as well.
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REFERENCES
Books and Journals
Altman, J., Bek, H.J. and Arthur, B.W., 2018. Indigenous participation in commercial fisheries
in Torres Strait: A preliminary discussion. Canberra, ACT: Centre for Aboriginal
Economic Policy Research (CAEPR), The Australian National University.
Chaklader, M.R., Nahar, A., Hanif, M.A. and Siddik, M.A., 2019. Intraspecific morphometric
diversity of barramundi (Lates calcarifer Bloch, 1790) in the waters of southern
Bangladesh. Journal of Oceanology and Limnology, 37(4), pp.1393-1402.
Hubbard, J., 2018. The Global Repercussions of the 1947 Symposium on Fish Populations in
Toronto: Scientific Networks and the Over-fishing Question. Scientia Canadensis:
Canadian Journal of the History of Science, Technology and Medicine/Scientia
Canadensis: revue canadienne d'histoire des sciences, des techniques et de la
médecine, 40(1), pp.76-97.
Lucas, J.S., Southgate, P.C. and Tucker, C.S. eds., 2019. Aquaculture: farming aquatic animals
and plants. John Wiley & Sons.
Online
Barramundi fishermen 'going broke with freezers full of fish' as industry nears collapse. 2018.
[Online] Available Through: <https://www.abc.net.au/news/2018-05-17/barramundi-
industry-collapses-in-nt-fishermen-going-broke/9770022>.
Quota managed fisheries. 2020. [Online] Available Through:
<https://www.daf.qld.gov.au/business-priorities/fisheries/sustainable/sustainable-
fisheries-strategy/quota-managed-fisheries>.
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