The State Of Global Fish Market
The global fish market is important to examine as fish are in the midst of the world’s greatest traded food products and in turn fish in addition to fish products contribute extensively to the world trade system. According to statistics, around 38 percent of all fish, whether they are captured from the open waters or brought up in aquaculture, are traded. However, around the world many fish stocks have declined significantly, and fisheries are not thriving but rather crashing. According to a documentary titled “Cod is Dead”, it has been recorded that in the last 50 years, we have doubled the amount of fish that we have consumed but the oceans cannot maintain the high level of demand.
As the global fishing market continues to diminish, the industry faces calamity through multiple aspects - this is seen through corrupt magnates, suspicious imports, and controversial regulations. Therefore, fisherman have many causes to act. As it is evident that numerous fisheries are spiraling in the direction of destruction, it can be attributed to the diminished fish stocks. The stocks for large fish have been observed to have been decreased by up to 90 percent and when stocks are overfished they bring an insufficient catch. More specifically, the cost of mismanagement in terms of economic output is enormous, coming out to around $50 billion a year.
The documentary titled “Cod is Dead” portrayed some of the problems that American fisherman confront. This program displays a focus on the domestic seafood market, and the industry environment along with the regulatory environment that continually makes it harder for fisherman to maintain their way of life and make a living. Many of the costs involved in the fishing market or any market are palpable and quantified since they entail an exchange of money for goods and services.
The study of economics examines the choices that rational individuals have to make. A fundamental aspect of being a rational decision maker is to evaluate opportunity costs. Opportunity costs are the value of the next best alternative that must be given up engaging in an activity. For those in the fishing market, the opportunity cost could vary. For boat holders, the opportunity cost of fishing is the wages that they could await to receive in a different business activity. For crew workers, opportunity cost is the earnings that they could anticipate obtaining in a distinct occupation. Opportunity costs should be contemplated due to the concept that all resources are scarce. Thus, this involves the use of marginal analysis which involves comparing marginal benefits and marginal costs. Marginal benefits are assessed to be the additional benefits for a consumer from purchasing one more unit of a good or service. Marginal costs are the change in a firm’s total cost from producing one more unit of a good or service. Action should then be taken if the marginal benefit outweighs the marginal cost. Catch shares have been applied as a controlling approach that allocates a set share of fish or a fishing area, to individual fisherman, communities or fishery associations.
The Total Allowable Catch (TAC) can be seen as a “catch limit” that distinctly designates each fisherman's access to resources and are responsible for staying within their limits. Therefore, fisherman also have the choice to buy or sell their shares which can improve economic efficiency. This is seen fisherman obtaining supply of fish to meet market demands, which means a higher price for their catch, and overall an increase in the fisheries profitability (Environmental Defense Fund). There is also the privatization of commercial fisheries through Individual Transferable Quotas (ITQs) but they constitute of a small portion of fisheries. Fish can be examined as a normal good because consumers tend to increase how much money is spent at the cost of other substitutes as their income grows. This causes the demand to increase in addition to moving prices upwards creating a positive income elasticity of demand.
According to the International Rice Commission Newsletter, the total fish supply typically comes from four general sources: production from aquaculture, commercial fisheries, municipal fisheries, and imports that could be for food use, non-food use and re-exports. They also state that majority of the total demand for fish is distributed for domestic consumption, then by export and non-food use.
