Fishing Capacity in Europe: Special Issue Introduction

Over the last two decades, management of fishing capacity has been a central focus of the Common Fishery Policy (CFP) of the European Union (EU). At the global level, the capacity issue was given high priority on the political agenda by the Food and Agriculture Organization of the United Nations (FAO) in the late 1990s. A series of studies and meetings aimed at defining and measuring capacity ended with the formation of an International Plan of Action. The issue of overcapacity has its roots in the well-known market failure in fisheries, where too many firms enter the fisheries using excessive inputs, resulting in excess capacity. With overcapacity in the sector, the profit margin of the firms is usually very small, which may make it even more difficult for politicians to address the problems effectively, often leading to new problems. The hands of the industry and the authorities are, in many cases, tied since short-term measures taken by two parties dominate. In the fisheries economics literature, Munro and Scott (1985) divided these fisheries problems into two classes: class I, where the lack of regulation results in dissipation of rent; and class II, where authorities set a total allowable catch (TAC), but at the same time fail to prevent the race for fish that leads to rent dissipation. However, Warming (1911) discovered this nearly 100 years ago (see Andersen (1983) for an English version of the article). Therefore, with a failed fishery policy, traditional regulation is supplemented with measures aimed at limiting and controlling the development of capacity. Understanding the measurement and definitions of capacity are necessary conditions for designing an effective capacity management plan. When defining capacity, concepts such as capacity output and capacity base are central. Capacity output is the maximum potential harvest that a fully utilized fishing fleet can produce given the fish stock and the present state of technology; capacity base is the level of fixed inputs. Capacity utilization then is the actual production divided by the capacity output. The CFP does not recognize these distinctions, because it focuses on Multi Annual Guidance Programmes, where reductions in the fleet are determined based on two fishing inputs, namely nominal gross tonnage (GT) of the vessel and engine kilowatt power (kW). The reduction goals are based on long-term assessment of the fish stocks leading to target fishing mortalities for different stocks. These target fishing mortalities are then transformed to reductions in the size of different fleets using linear relationships. Hence, the CFP does not consider capacity output and capacity utilization of the fleets; thus the reduction in capacity base is not (necessarily) targeted towards the fleet segments with