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Abstract:
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"While the Icelandic fisheries have been managed by individual transferable quotas (ITQs) for almost a decade and the fisheries sector seems to be performing well in economical terms, there is still no consensus about quota issue. Lately, the difficult situation of fisheries communities short of quota has been in the centre of the debate.
"In 1991-95, the main controversies were caused by the unexpected effects of quota leasing arrangements, especially the upon the income of fishing crews involved in contract fishing. Since 1995, measures have been taken to limit contract fishing, with considerable success. However, the loss of flexibility allowed by contract fishing, may have had negative implications for some communities, and also strengthened the incentives for mergers within the industry. Concentration of quota shares with fewer and bigger companies has lately been accelerating. Along with a general liberalisation of the economic policy in Iceland, there seems to be an ongoing ideological shift within the industry, leaving behind the idea that fisheries and fish processing should be locally embedded in fisheries communities. Many fisheries companies have joined the Icelandic stock-market, and ownership is in many cases not linked to any particular community. Direct transfers of quota shares have become less common, small quota owners are now more likely to 'merge' with bigger companies and receive company shares in exchange for their quota shares. The vulnerability of fishing communities, especially small communities with poor employment alternatives, has become more visible, as there have been several cases of communities left with practically no quota as local quota owners have left or sold out their quota shares. Communities without quota are left without many options for coping with the situation. Contract fishing is no longer an option, and the alternative strategy for re-entering the fisheries by 'small boats' who have been able to operate outside the ITQ-system, has become more difficult. Communities in trouble are asking for solidarity from the government, but any intervention involving redistribution of quotas is difficult in a system where quotas have acquired a status of private property.
"Should the closedown of whole communities, leaving the residents unemployed and with worthless houses be treated as an 'externality' of the ITQ-system, a part of the price to be paid for efficiency in the fisheries? And who should be responsible for paying this price? Such questions are once again bringing forth a debate about resource rentals or cost recovery payments from the industry. The industry itself has been strictly negative about resource rentals, while certain forms of cost recovery, following the example from New Zealand, might be more acceptable as a part of a 'consensus package' aimed at further consolidation of the ITQ-system. The principle of cost recovery, including the costs of research and fisheries management, might further consolidate the power of quota owners as a group, if they become major sponsors of research institutes and management institutions."
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