Evaluation and Simulation of Fishing Capacity and Backward-Bending Supply of the Offshore Fishery in Taiwan

Research PaperIn 2002, the offshore and coastal fisheries only account for 19.9% and 7.3%, respectively, of the total landing value. Since 1978, the offshore harvests follows a downward trend, but the number of fishing vessels, the total vessel tonnage, and the total horsepower of vessels follow an steady increasing trend until 1992 when the overall restriction on the construction of fishing vessels was imposed. In order to maintain the sustainability of Taiwan’s offshore fisheries stocks and to avoid overfishing, the government has implemented a fisheries management policy which regulates harvests by suspending fishing licenses, restricting construction of fishing vessels, and buying back used vessels in order to reduce the offshore fleet size. The most recent measure, announced on Dec. 24, 1991, which is still in effect, restricts the construction of all fishing vessels, except for fish transport vessels over 2,000 tons. In addition, the government adopted two voluntary vessel buy back programs in order to reduce the fleet size in 1991-1995 and 2000-2004, respectively. This study tries to examine whether or not the current offshore fishing industry in Taiwan falls in a Pareto inferior situation with smaller output and higher price, such as shown in the upper part of the backward bending supply. By using annual offshore fisheries harvest and the total tonnage and horse power of fishing vessels for the period 1953 to 2002, this paper utilize the bioeconomic model present in Sun (1998) to simulate the backward bending supply curve under various fishing capacity. A suggestion will also be provided to show how to reduce the fishing effort to meet the goals of conservation and the viability of the fishing industry