Who Pays to Steward the Commons?

Stewarding the Commons: Should fisherman pay the whole bill for fishery management?

Our friend Patrick Whittle, the New England AP reporter on all things sea and fishery, has a short piece on a lawsuit filed by New England fishermen headed to the Supreme Court. At issue is the cost of monitors on board fishing boats collecting data for fishery management. The issue highlights some serious questions about how we cover the cost of stewarding the commons and public resources.

The monitors are workers who collect data used to help develop government fishing regulations, and the government shifted the cost of paying for monitors to fishermen last year. A group of fisherman, led by David Goethel of New Hampshire, then sued the government over the change and lost in a federal district court and later in the federal appeals court in Boston.

Goethel isn’t giving up, and his attorney filed a petition with the Supreme Court earlier this month seeking a review of the case. Monitors can cost hundreds of dollars per day and are likely to put fishermen out of business, Goethel said.

“It’s driving people off the water,” Goethel said. “Fishermen are really angry. Every day I get calls from people on the water thanking me for keeping this up.”

The costs are significant and environmental groups seem, to me any way, pretty blithe about forcing the fishermen to shoulder the full cost of the program.

While fishermen have chafed at the new expense, which can add $700 per day to the cost of fishing, several conservation groups have defended monitoring. Lack of good data from monitoring jeopardizes the health of fish populations and ultimately harms fishermen, said Roger Fleming, an attorney with San Francisco-based Earthjustice.

“It’s perfectly reasonable for fishermen to pay for a portion if not all of the at-sea cost of monitoring,” Fleming said. “They are harvesting a public resource.”

That first sentence contains the non-sequitur at the heart of the problem. The program can be valuable and onerous to fisherman at the same time.

It would be logical to require businesses that extract resources from the commons to shoulder the cost of stewardship, when those businesses are high margin businesses and/or natural monopolies – say logging, mining, or drilling. Fishing however, like most food production, is a low margin / high utility endeavor.

We Need to Treat Low Margin and High Margin Businesses Differently in Stewarding the Commons

What do we mean by “low margin / high utility” ? The first part is easy. Fishing is a business with low profit margins . It’s highly competitive with many players, and tied to international trade. It’s easy to be undercut on price, especially by imports from regions with lower labor costs. 

But fish or any basic food stuff is very useful – one might say necessary – to consumers. This is in contrast with … say … the phone app market, which is a low margin / low utility endeavor. The phone app market is highly competitive market with many players. The product, however, isn’t super useful and certainly not necessary for consumers.

Low margin / high utility markets often call for extra care in policy formulation. If the market for phone apps isn’t functioning in a stable or honest way, it’s not that big a deal. If fisherman or farmers can’t get food to our tables and make a living doing so, that creates a public policy problem.

It’s perfectly legitimate to put the whole cost of stewarding the commons on a logging company that licenses public lands.  This approach bumps up against the realities of the fishing business when applied to fishery management. If the public wants to steward those commons, the public is going to need a way to pay for that stewardship. It simply too burdensome when it comes to licensing low margin / high utility business that make their way drawing from the commons to put food on our tables.

A modest fee might be reasonable to raise funds and create some skin in the game for fisherman in relation to fishery management. Fishermen benefit the most from avoiding the tragedy of the commons incentive structure inherent in any fishery afterall. However, the responsibility for stewardship of public resources ultimately lies with the public. If you are dealing with a low margin / high utility business rather than the deep pockets of large oil company or mining conglomerate, the cost of the program should be paid from general funds. Or by a sales tax on fish – all fish consumed locally, not just those caught locally.

For a sales tax to work, it has to all fish sold locally, otherwise the tax won’t be borne by consumers it will be passed back to the local fishermen in the form of lower sales. Just as New England fisherman selling into an international market can’t simply pass on higher costs to consumers, you can’t fund the program by taxing local fish because consumer will shift to imports.

In conversation, Patrick had this to add:

What much of the industry wants is electronic monitoring, which represents the possibility of better data, broader coverage, and no random dude taking up space on your boat with a clipboard. But surprisingly the technology isn’t really developed.