Fishing Costs and Markets: Problems and Solutions
For years, people have used markets to trade, buy, or sell products. Markets have been known to be places where people would gather to trade. Sellers knew their clients because they were people that would regularly buy from them, and the buyers would meet their acquaintances at the market. Everyone was able to satisfy their buying habits because of the familiarity between everyone, like a small community of loyalty that promotes honesty when it comes to selling and buying. Ancient markets had a significant influence on how markets are today. In modern days, markets are more separated or categorized by-product; for example, there is cellphone markets, stock, houses, between others. However, one we will get into will be the fish market.
Primitive men used to collect their food from what nature could offer. They would hunt, find fruits, find fish in lakes, rivers and gather skills that, with time, will develop and be able to conserve the food for long periods. In later centuries, as the population increased and societies grew, commerce became important. Weekdays were chosen to open the markets where they would sell commodities or food that other people needed. As societies progressed, markets progressed too; fishers did not need to travel to markets to sell their fish; instead, they would trade with merchants, and the merchants would sell the products to the people. The fish market grew because it became popular to catch vast quantities of fish since no one owns the sea; it means to take everything you can, but taking everything means scarcer for breeding stocks. Any society meets the same problem of having a limited amount of resources, and this creates competition in the market. In this case, in the fish market, it creates competition between canning and fresh product because of the scarcity of a product; every society faces trade-offs. Then, how much should the fish cost? The price of fish equals the sum of the marginal cost of transport and selling and the marginal cost of catching the fish. “Marginal cost is the cost of producing one or more units of a good.”
The overconsumption and demand for fish and seafood is the main reason for the fishing market failure. It makes sense to buy a product when its price falls and buy less of a product when the price rises; being able to buy larger quantities when the price of a product falls refers to the law of demand, the income effect.
Moreover, it may also be related to the substitution effect, which is when people will substitute buying one good for another because of its price. Some people may replace the fish for chicken or canned tuna because their price is lower than fresh. Other things can influence this market and the demand for the product like the taste of the product, demographics, and future prices may also affect the willingness of consumers to buy the product. When the demand for fish falls, consumers may pay a lower price because it may affect the equilibrium price.
The government-imposed subsidies with the interest of keeping food prices down since fish are prevalent around the world. However, the fish market still has problems that may contribute to its failure. Pollution, any unwanted fish catch, may weaken the ecosystem; depleting resources are externalities, side effects of commercial activity that interfere with this market equilibrium. Regulations have been established to allow fishing in certain areas. However, it is expensive to enforce these laws, and these regulations have made companies go to other countries because there are fewer restrictions on shares. Fishers try to catch what is out there, any unwanted fish, rather than protect the stock for the future. There are shortages because the fish supply fails to meet demand. Many people from less developed countries depend on fisheries as a source of income. When the fish stock declines, fishers will enter the fishery until profits are met or driven to zero. If the stock does not change over time, the fishing market can be stable, and the catch can be the same as the net growth. Everything is like a chain and improving productivity on fisheries can better the food, increase income and improve lives.
Overall, the government has not tried to find a solution but made the situation worse, since people would rather fish in other countries, as mentioned before. Governments have made it more possible for fishers to go out there and scavenge what they find, rather than protect the fish stocks for the future. The government fails to follow on quotas on the amount of fish that can be caught per day to ensure that there’s no collapse of species or ecosystem. This markets failure is heavier on the government and producer side than the consumer, and the government is not committed to policing. So, in a sense the government solutions haven’t done enough as overfishing is only one cause for the decline of fish stocks. There’s also global warming and illegal fishing. The issue with global warming is that it affects the quality of sea life, and it encourages fish farms to provide common fish. The farmed fish have a lower price since they are considered a lesser good than natural fish. The real issue about fish farm is that they still fish to provide small fish to larger fish. Its like a cycle, and the government doesn’t intervene. And the ban to not catch certain fish just makes that fish more desirable. Fishers fail to realize that their actions can influence others.
In my opinion, the fishing market needs solutions from the government, policies or taxes to deal with some of the externalities; restoring the fishing stock can bring billions in revenue per year. The government could subsidize the fishing industry but also subsidize the fish farms, no fish zones need to be created where the ecosystem has suffered or where there is a chance of certain fish species to become extinct. Temporary ban on certain fish species, this would allow the fish population to increase naturally. Local fish should not be taxed within a country. Also, Industry standards could be changed; introducing time frames where fishing is allowed within the season would help the stock. For example, if a boat goes out to fish for a week then it may only fish on 5 of those 7 days, guaranteeing that the shares are met and not overreached. This would help to restore the stocks, and like mentioned before it could deliver millions on revenue.
Bibliography
- Almogadir, Almogadir, and alphaeconomics on December 3. “Overfishing (Market Failure).” Capital, August 9, 2013. https://friedmanseconomy.wordpress.com/2012/12/03/over-fishing-market-failure/.
- “Fish Market.” Wikipedia. Wikimedia Foundation, July 22, 2019. https://en.wikipedia.org/wiki/Fish_market.
- “History of Commercial Fishing.” Encyclopædia Britannica. Encyclopædia Britannica, inc. Accessed October 2, 2019. https://www.britannica.com/technology/commercial-fishing/History-of-commercial-fishing.
- “Why Fish?” The Importance of Fish | WorldFish Organization. Accessed October 2, 2019. https://www.worldfishcenter.org/why-fish.
