SciELO - Scientific Electronic Library Online

 
vol.44 issue5Stocks and management units of Micropogonias furnieri (Desmarest, 1823) in southwestern AtlanticA new benthic macrofauna and sediments sampler for attaching to otter trawl nets: comparison with the Van Veen grab author indexsubject indexarticles search
Home Pagealphabetic serial listing  

Services on Demand

Journal

Article

Indicators

Related links

  • On index processCited by Google
  • Have no similar articlesSimilars in SciELO
  • On index processSimilars in Google

Share


Latin american journal of aquatic research

On-line version ISSN 0718-560X

Lat. Am. J. Aquat. Res. vol.44 no.5 Valparaíso Nov. 2016

http://dx.doi.org/10.3856/vol44-issue5-fulltext-19 

 

Research Article

 

A cost-benefit analysis of three gillnet fisheries in Santa Catarina, Brazil: contributing to fisheries management decisions

Análisis costo-beneficio de tres pesquerías de enmalle en Santa Catarina, Brasil: contribuyendo a las decisiones de manejo pesquero

 

Vanessa Mafra Pio1, Exequiel González-Poblete2, Paulo Ricardo Pezzuto1 & Roberto Wahrlich1

1 Grupo de Estudos Pesqueiros, Universidade do Vale do Itajaí, Itajaí, Santa Catarina, Brasil
2 Escuela de Ciencias del Mar, Pontificia Universidad Católica de Valparaíso, Valparaíso, Chile

Corresponding author: Vanessa Mafra Pio (vahmafra@hotmail.com)
Corresponding editor: Patricio M. Arana


ABSTRACT. This cost-benefit analysis of three industrial bottom gillnet fisheries that operated in SE/S Brazil during 2009, had a double purpose: to determine the economic and financial performance of the average gillnet vessel in the coastal whitemouth croaker (Micropogonias furnieri), the gulf hake (Urophycis mystacea) and monkfish (Lophius gastrophysus) fisheries and to determine the expected effects of applying fishing gear regulation (MPA/MMA N°12/2012) on the performance of the whitemouth croaker fishing fleet. Crucial to this cost-benefit analysis was to collect data through interviews to vessel owners on these fishing fleets cost structures and their fishing costs levels. Three economic and financial performance indicators were used to assess the condition of these fishing fleets: Net Present Value (NPV), Internal Rate of Return (IRR) and Profitability Index (PI). Results showed different costs levels between fishing fleets but, similar relative importance of cost components across fleets: with running costs being the highest, followed by vessel and labor costs in order of importance, except in the gulf hake fishing fleet. Results from the economic and financial performance assessment showed that these three fishing fleets were in a fragile economic and financial condition, all having IRRs lower that 20% and PIs of 1.7 or lower, too low for a high risk activity like fisheries. This problem been more acute in the whitemouth croaker fishing fleet with the lowest IRR (12.11%) and PI (1.2). Potential effects of applying the fishing regulation showed marginal improvements in the fragile condition of the whitemouth croaker fishing fleet.

Keywords: economic and financial analyses, cost structure, bottom gillnet fishery, fisheries management, southern Brazil.


RESUMEN. El análisis de costo-beneficio de las tres pesquerías industriales de enmalle de fondo que operaron en el SE/S Brasil durante 2009 tuvo un doble propósito: determinar el desempeño económico y financiero de una embarcación promedio que opera con enmalle en las pesquerías de corvina (Micropogonias furnieri), brótula (Urophycis mystacea) y rape (Lophius gastrophysus) y establecer los efectos que se pueden esperar al aplicar la regulación al arte de pesca (MPA/MMA N°12/2012) en el desempeño de la flota que pesca la corvina. Crucial para este análisis de costo-beneficio fue la recolección de información mediante entrevistas a dueños de embarcaciones sobre las estructuras y los niveles de costos en la pesca. Tres indicadores de desempeño económico y financiero fueron utilizados para evaluar la condición en que se encuentran estas flotas pesqueras: Valor Presente Neto (VPN), Tasa Interna de Retorno (TIR) e Índice de Rentabilidad (IR). Los resultados mostraron diferentes niveles de costos entre las flotas pesqueras. Sin embargo, presentan similar importancia relativa los componentes de costos entre flotas: los costos corrientes son los mayores, seguidos en orden de importancia por los costos de operación de la embarcación y del trabajo, excepto en la flota pesquera de brótula. Los resultados de la evaluación del desempeño económico y financiero mostraron que estas tres flotas estaban en condición económica y financiera frágil, teniendo TIRs menores de 20% e IRs de 1,7 o menores, lo que es muy bajo para actividades de alto riesgo como es la pesca. Este problema resultó más agudo en la flota pesquera de corvina, que mostraron los menores valores de TIR (12,11%) e IR (1,2). Los efectos potenciales de aplicar la regulación al arte de pesca mostraron mejoras marginales en la frágil condición de la flota pesquera de corvina.

Palabras clave: análisis económico y financiero, estructura de costos, pesquería de enmalle de fondo, manejo pesquero, sur de Brasil.


 

INTRODUCTION

Among the several industrial fishing fleets operating in the Southeast/South (SE/S) region of Brazil, the bottom gillnet fleet is one of the most important, either in terms of number of vessels as in annual landings. Gillnets have been used by artisanal fishing in the region for many years, while industrial gillnetting was only introduced in Southern Brazil in the late 1980s after the conversion of some bottom trawlers to gillnet vessels (Barcellos et al., 1991; Haimovici, 1997). The fishery developed focusing primarily on demersal fish as angel-shark (Squatina spp.), whitemouth croaker (Micropogonias furnieri) and Argentine croaker (Umbrina conosai), exploited over coastal areas and continental shelf fishing grounds (Pio et al., 2012). During the last decade, however, the fishery diversified its target species and expanded its effort to deeper waters in search for more profitable resources (Perez et al., 2003). In fact, after 2000, the monkfish (Lophius gastrophysus) started to be harvested along slope grounds by Spanish gillnet vessels chartered by Brazilian companies (Perez et al., 2002, 2003), using catch and processing technologies previously unknown by the national fleet (Perez et al., 2002; Wahrlich et al., 2004).

The State of Santa Catarina concentrates a significant part of the industrial fishing fleet operating in SE/S Brazil, including nearly 140 bottom gillnetters whose operational characteristics are not uniform (Pio et al., 2012, 2016). Part of the fleet operate on the continental shelf and can be divided in two different fleets, according to their respective target species (i.e., sciaenid fish like Argentine croaker and whitemouth croaker) and mesh sizes (i.e., 100 and 130 mm, respectively). The other two fleets exploit slope resources as the gulf hake (Urophysis mystacea) and monkfish using nets of 110 and 280 mm mesh size, respectively (Pio et al., 2012, 2016).

Even though these fishing fleets dynamics, their technology and by-catch components are relatively well documented (Perez & Wahrlich, 2005; Pio et al. 2012, 2016; Schroeder et al., 2014) there is scarce information on these fishing boats costs and their economic and financial performance. Possible reasons for these include the lack of regulations requiring fishermen to provide this kind of information not only in Brazil but, also in most countries of the world (Gasalla et al., 2010).

One of the challenges of fisheries science is the integrated analysis of human uses of the marine ecosystem as economic, social and political aspects, and not just the system components that directly affect fish production such as biological and fisheries aspects (Sainsbury & Sumaila, 2001; Dudley, 2008). Lucena & O'Brien (2005) add that economic studies in fisheries are scarce in the world and, as a consequence, management has focused only on biological and technological issues. In spite of the extent of the work done by Tietze et al. (2005) on the economic performance and fishing efficiency of marine capture fisheries, at a global scale, data on fishing costs and cost structure are poorly documented, and they vary according to the type of fishery, vessel and fishing gear employed (Lam et al., 2011). In such cases, i.e., parametrization models, economic parameters were based only on previous empirical approximations (Gasalla et al., 2010). When costs and revenues are known, a series of economic and social analysis can be performed, subsidizing valuable information for developing a more realistic fisheries management (Dreyfus-León & Manzo-Monroy, 1993; Lucena & O'Brien, 2005; Dudley, 2008; Lam et al, 2011).

Brazilian reality is not different and during past decades fisheries management has been dominated by biological considerations (Lucena & O'Brien, 2005; Branch et al., 2006) while economic, social and political aspects have been neglected, at least on an explicit manner. Management efforts in the bottom gillnet fishery began with the publication of the Normative Instruction (NI) MPA/MMA N°12/2012 (Brasil, 2012). Even though the main objective of this norm was to reduce incidental catches of small cetaceans, turtles and some elasmobranch species, it also defined a reduction of fishing effort by limiting the maximum extension of gillnets used in the whitemouth croaker fishery whose total length had reached 34 km by the 2000s (Pio et al, 2012). The NI defined different maximum net lengths according to the vessels' gross tonnage (GRT) and the area of operation. A gradual reduction in net length over the years was also determined. Even though some aspects of NI MPA/MMA N°12/2012 focuses in the whitemouth croaker fishery it is in fact, a general norm which applies to all gillnet vessels operating in the SE/S, with the exception of those licensed for monkfish, which are managed according to the NI MMA/SEAP-PR N°3/2009 (Brasil, 2009).

In this context and based on information collected in year 2009 on landings, fishing effort, costs and revenues for the whitemouth croaker, gulf hake and the monkfish gillnet fishing fleets of Santa Catarina, Brasil, this study had a twofold purpose: first to assess their economic and financial performance under the 2009 conditions and; second to assess the expected effects of applying NI MPA/MMA N°12/2012 on the economic and financial performance of the representative vessel in the whitemouth croaker gillnet fishery.

MATERIALS AND METHODS

Data

Crucial to the completion of this paper objective was to collect data through interviews to vessel owners on their fishing fleets cost structures, fishing costs levels and others.

Economic data of the bottom gillnet fishing fleet operating in year 2009 was obtained through interviews conducted with vessel owners from Itajaí and Navegantes harbors in Santa Catarina State (Fig. 1), between July and November 2010. Data on fleet landings was obtained from the Industrial Fishing Statistic Program of Santa Catarina, which is conducted by the University of Vale do Itajaí.

 

Figure 1. Location of the main fish landing ports of Itajaí and Navegantes,
Santa Catarina State, Brazil.

 

Fifteen fishing vessel owners were interviewed to provide physical, operational and economic information on 30 fishing vessels, 28 vessels targeting whitemouth croaker stocks on the continental shelf, 1 vessel targeting the gulf hake and 1 vessel targeting monkfish. Interviewed vessel owners targeting white-mouth croaker represented a 28% of the operating fishing fleet, the vessel owner targeting gulf hake represented 14% of the operating fleet and the vessel owner targeting monkfish was the only vessel operating in this fishery in 2009.

Physical and operational characteristics included: vessel length overall, GRT, haul capacity, main engine power, year of construction, fishing gear (length and mesh size), crew number and composition, and fishing effort (number of trips), among others (Tables 1 and 2). Economic data collected referred to acquisition or implementation costs, maintenance, fuel and other current costs, crew shares, production and income.

 

Table 1 . Main attributes of the whitemouth croaker fishing fleet of Santa Catarina, Brazil,
2009. Source: Pio (2011) and Pio et al. (2012).

 

Table 2. Main attributes of the gulf hake and monkfish fishing fleet of Santa Catarina, Brazil
2009. Source: Pio (2011) and
Pio et al. (2012).

 

Cost data was collected in Brazilian currency or Reals and then they were used and presented in US dollar (US$) base 2009 using an exchange rate of 1 US$ by 1.74 $ (Brazilian Reals).

Cost structures

Cost structures presented in this study were built following the methodology applied by Tietze et al. (2005) to study the economic and financial performance of fishing fleets around the world. This methodology was also applied by Cerda et al. (2014) to determine the cost structure and levels of industrial and artisanal fishing fleets and fish processing plants in Chile.

Figure 2 depicts the components of total fishing costs organized according to the categories used by Tietze et al. (2005), namely Operating costs (aggregated as Running costs, Vessel costs, and Labor costs) and Other costs.

 

Figure 2. General diagram of fishing costs disaggregation. Source:
Tietze et al. (2005).

 

Running costs refer to all expenditures directly related to the level of fishing effort. Vessel costs refer to maintenance costs related to the ship, including its equipment and the fishing gear, and to insurance costs. Labor costs includes all payments to crew considering the different categories according to each fishery. Labor cost were valued at their opportunity cost considering the potential income a Deck hand may earn in an alternative activity, such as housing construction, which was estimated to be a 1,000 B$/month. Income to other crew members were estimated based on the shares of the share system used in these fishing fleets (Table 3) and the base value for a Deck hand.

 

Table 3. Crew shares for three gillnet fisheries,
Santa Catarina, Brazil, 2009. Source: Pio (2011).

 

Investment costs were collected from the three gillnet fisheries under analysis and they are presented in Tables 4 and 5.

 

Table 4. Investment costs (thousand US$) in the whitemouth fishing fleet, Santa
Catarina, Brazil, 2009. Source: Pio (2011).

 

Table 5. Investment costs (thousand US$) in the gulf hake and monkfish fishing
fleets, Santa Catarina, Brazil, 2009. Source:
Pio (2011).

 

Data collected on fishing costs for the whitemouth croaker fishery are presented in Table 6, along with estimated averages for each cost item, considering a 95% confidence interval. Table 7 presents averages for the gulf hake and the monkfish fisheries in 2009.

 

Table 6. Fishing costs (FJS$ yr1) for the whitemouth croaker fishery, Santa Catarina,
Brazil, 2009. Source: Pio (2011).

 

Table 7. Fishing costs (US$ yr-1) for the gulf hake and monkfish fishery, Santa Catarina,
Brazil, 2009. Source: Pio (2011).

 

Depreciation costs (US$ yr-1) were estimated applying a linear depreciation method for the average representative vessel in each fishery, considering the main components of fishing vessel investment costs (fixed assets) and an estimate of their service life (Table 8).

 

Table 8. Depreciation costs for three gillnet fisheries in Santa Catarina, Brazil, 2009. Source:
Pio (2011). http://smallbusiness.chron.com/tax-issues-company-fishing-boats-80960.html,
http://www.sii.cl/pagina/valores/bienes/tabla_vida_enero.htm
,
http://www.windom.org/depreciationfishing.html
.

 

Economic and financial performance

The analysis of the economic and financial performance of the average representative vessel from each of the three gillnet fisheries considered was based on the traditional economic and financial analysis whose backbone is a cash-flow table summarizing in essence expenditures, revenues and profits over a time period (Mishan, 1978; Sapag & Sapag, 2008). Expenditures considered are investment costs, operational costs and other costs. The period to be considered is named the assessment horizon and it usually covers the lifespan of the project or business under analysis. Revenues are determined by the interaction between the level of production-sales (annual landings) and product market prices (ex-vessel prices) (Table 9). Other revenues obtained from selling assets at market price once either their service life is reached or the assessment horizon has been attained, are also considered. Business profit taxes, interest rates and discount rates are also used to build the cash-flow tables.

 

Table 9. Annual landings (kg yr-1) and ex-vessel
price (US$ kg-1) for three gillnet fisheries in Santa
Catarina, Brazil, 2009. Source: Pio (2011).

 

Three indicators of performance were used, namely the Net Present Value (NPV), Internal Rate of Return (IRR) and Profitability Index (PI). The assessment horizon considered in this study is of 20 years, corresponding to the service life of the vessel. The discount rate used is of 10% annual, it refers to the rate the Central Bank of Brazil charges to all commercial banks.

NPV is a scalar value expressed in US$ and it is calculated as the difference of the sum of all net cash flows obtained from the first period to the last period of the assessment horizon and the total investment cost realized in period zero or the present (Mishan, 1978; Sapag & Sapag, 2008).

IRR on an investment or project is the "annualized effective compounded return rate" or rate of return that makes the net present value of all cash flows (both positive and negative) from a particular investment equal to zero. It is also defined as the discount rate at which the present value of all future cash flow is equal to the initial investment or, in other words, the rate at which an investment breaks even (Mishan, 1978; Sapag & Sapag, 2008).

PI is also known as profit investment ratio (PIR) or as value investment ratio (VIR) and is the ratio of payoff to investment of a proposed project. It is calculated as the rate between discounted summation of all cash flows from the first to the last period of the project assessment and the amount of investment costs realized of the current or zero period. Thus, it is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment cost (Mishan, 1978; Sapag & Sapag, 2008).

Expected effects of the fishing gear regulation in the whitemouth croaker fishery

The above methodology of the analysis of the economic and financial performance of the average representative vessel was applied to estimate the expected effects of the regulation on fishing gear and the same three indicators were used NPV, IRR and PI. The regulation indicates a 46% reduction in fishing gear size from a 24 km gillnet (for more details see Pio et al., 2012) to a 13 km gillnet. Thus, its assumed that investment cost in fishing gear may be reduced in at least 40%.

This ex-ante analysis was based on three scenarios representing the situation before the enactment of the fishing gear regulation (Current scenario) and the expected situation from the application of the regulations, divided into an Optimistic scenario and a Conservative scenario. Each scenario considers an assessment horizon of 20 years, and an annual discount rate of 10% (Central Bank of Brazil).

The Optimistic scenario considers that the implementation of restriction in the length of the gillnet will imply on the one hand, a reduction in the investment costs of 40% in fishing gear. Changes on fishing gear maintenance were not expected as most probably the reduction in materials will be balanced by an increase in the number of net casts per fishing trip. This scenario also includes an estimated 30% reduction in annual harvest during the first year of the assessment horizon, with a 10% recovery in annual harvest until it reaches a maximum of 20% over current annual harvest levels during the seventh year of the assessment horizon. No changes in ex-vessel price are considered.

The Conservative scenario differs in that the maximum expected increase in landings is of 15% and that the expected recovery of annual harvests takes a longer time to occur. That is, it also considers a 30% reduction in annual harvest the first year, followed by a 10% increase in annual harvest reduction years 2 and 3, and a 5% recovery on annual harvest from year 4 on until reaching a 15% increase over current annual harvest levels from year 8 and onward.

RESULTS

Fishing costs and cost structure

Total fishing costs were the highest for the monkfish fishery with a total of approximately US$ 476,000 per year in 2009, followed in importance by the gulf hake fishery with approximately US$ 342,000 per year and the whitemouth croaker fishery with US$ 310,000 per year (Fig. 3). Figure 3 also depicts that Running costs were the most important item among these three fisheries, representing between 42% to 44% of the total costs. Vessel costs were the second most important cost component in the whitemouth croaker fishery (27%) and the monkfish fishery (29%). Labor costs were the second most important cost item in the gulf hake fishery (29%), but they ranked third for the whitemouth croaker and the monkfish fisheries, with a 20% and 22%, respectively. Other costs were the smallest costs ranging from 6% to 9%.

 

Figure 3. Total fishing costs (US$) and cost structure for three gillnet
fisheries of Santa Catarina, Brazil, 2009.

 

Figure 4 presents the components of Running costs for all three fisheries where monkfish fishery had the largest cost with US$ 210,000 per year, followed by gulf hake and whitemouth croaker with US$ 147,000 and US$ 129,000 per year, respectively. Fuel & lubricant was the most important expenditure representing between 52% to 57% of total running costs in 2009. Next item in importance were expenses on Personnel or crew supplies (other than food) and Food which in total ranges from 20% in the whitemouth croaker fishery to 28% in the gulf hake fishery. Ice & water were third in importance representing between 14% to 16% of the Running costs. Harbor services and Navigation & monitoring represented together between 6% to 8% of the running costs in 2009.

 

Figure 4. Running costs (US$ yr-1) and cost structure for three gillnet
fisheries of Santa Catarina, Brazil, 2009.

 

Labor costs are depicted in Figure 5 and the gulf hake fisheries incurred in higher expenditures followed by the monkfish and the whitemouth croaker fishery. Payment to officers like the skipper, the engineer (or motormen) and boatswain ranged from 45% to 51% of all crew payment. Payment to simple deck hands ranged from 18% to 32% of all labor costs depending on the number crew considered. All remaining payments were allotted to intermediate posts like Cook, Freezer men or Freeze helper.

 

Figure 5. Labor costs (US$ yr-1) and cost structure for three gillnet
fisheries of Santa Catarina, Brazil, 2009.

 

Vessel costs (Fig. 6) and the monkfish fishery incurred in the higher expenditure in this item with approximately US$ 140,000 per year in 2009, followed by the representative vessel of the Whitemouth croaker fishery and that of the gulf hake fishery with US$ 85,000 and US$ 67,000 per year, respectively.

 

Figure 6. Vessel costs (US$ yr-1) and cost structure for three gillnet
fisheries of Santa Catarina, Brazil, 2009.

 

Figure 7 presents the item Other costs, including fishing licenses, organizational fees and assets depreciation (Table 8). Again the monkfish and the gulf hake fisheries incurred in higher levels of expenditure with approximately US$ 30,000 to 31,000 per year, followed by the whitemouth croaker fishery with approximately US$ 26,000 spent in 2009. Licenses and organizational fees were marginal while, depreciation represented between 92% and 98% of this item.

 

Figure 7. Other costs (US$ yr-1) and cost structure for three gillnet
fisheries of Santa Catarina, Brazil, 2009.

 

Investment cost

Investment costs were separated into Vessel cost and Fishing gear cost (Tables 4 and 5). Investment on Vessel assets in the whitemouth croaker fishery was estimated to be an average of US$ 407,900 with a confidence interval (95%) of US$ 31,900 (Table 4).

The main component of this investment was "Hull, engines & others", representing an 86% of total vessel investment, followed by "Deck Equipment, hydraulics & lifesaving" with a 10.5% of the total and "Monitoring & Navigation" with a 4.6% of the total. In this same fishery investment on "Fishing gear" was estimated to be an average of US$ 96,300 with a confidence interval (95%) of US$ 9,100 (Table 4).

The main characteristics for this average vessel in the whitemouth croaker fishery were estimate as: 21 m of length overall, a main engine of 290 HP, a hull capacity of 60 ton, a GRT of 70 ton, 7 crew members, a gillnet of 429 bodies and 25 km long and a mesh size of approximately 130 mm (Table 1).

Investment on Vessel assets in the gulf hake and the monkfish fisheries were estimated to be an average of US$ 462,000 and US$ 445,000, respectively as of 2009 (Table 5). The main component of these investments were "Hull, engines & others", representing an 80% to 83% of total vessel investment, followed by "Deck equipment, hydraulics & lifesaving" with 11% to 12% of the total and "Monitoring & navigation" with 6% to 8% of the total.

Investment on "Fishing gear" was estimated to be an average of US$ 102,000 for the gulf hake fishery and of US$ 230,000 for the monkfish fishery in 2009 (Table 5). The main characteristics for these average vessels are presented in Table 2.

Economic and financial performance of the representative vessels

Figure 8 presents the level reached by the NPV, the IRR and the PI for the average vessel in the three fisheries studied under current conditions and Tables 10, 11 and 12 present the cash flow used to calculate these indicators. These indicators showed that all three average fishing vessels are generating profits over time. Please notice total vessel investment cost for white-mouth croaker average vessel is marginally higher in Tables 8 and 10, as it corresponds to the summation of the averages for the three investment components (i.e., "Hull, engines & others", "Deck equipment, hydraulics & lifesaving" and "Monitoring & navigation") and not the average of that summation for all vessels in the fleet (Table 4).

 

Figure 8. Indicators of economic and financial performance for the representative
vessel in three gillnet fisheries of Santa Catarina, Brazil, 2009.

 

Table 10. Cash-flow for the average vessel in the whitemouth croaker fishery of Santa
Catarina, Brazil, 2009.

 

Table 11. Cash-flow for the average vessel in the gulf hake fishery of Santa Catarina,
Brazil, 2009.

 

Table 12. Cash-flow for the average vessel in the monkfish fishery of Santa Catarina,
Brazil, 2009.

 

For a period of 20 years the average vessel in whitemouth croaker fishery generated the US$ 82,785, with an IRR of 12.1% annual and a PI of 1.2 US$ on each US$ invested in 20 years. In a similar time horizon, the average vessel in gulf hake fishery generated an NPV of US$ 176,641, an IRR of 14.1% and a PI of 1.3 US$ on each US$ invested (Table 11). In turn, the average vessel in the monkfish fishery generated an NPV of US$ 501,568, an IRR of 19.5% and a PI of 1.7 US$ on each US$ invested (Table 12).

Expected effects of the fishing gear regulation in the whitemouth croaker fishery

The above presented information on fishing vessel and gear investment costs, fishing costs, landings and revenues were used to analyze the expected effects of applying the regulation on fishing gear in the whitemouth croaker fishery. Figure 9 presents the effects on the economic and financial performance of the average vessel in the whitemouth croaker fishery of the regulation on the fishing gear according to the three scenarios considered, namely: Current conditions, Optimist and Conservative.

 

Figure 9. Indicators of economic and financial performance for the average
vessel in whitemouth croaker fishery under three management scenario.

 

As Figure 9 the expected effects on the average vessel from the Optimist scenario were to provide a 219% increase in NPV, a 23% increase in the IRR and a 34% increase in PI. Similarly, the expected effects from the Conservative scenario are also positive but lower levels of increase in the indicators used, thus, Figure 9 shows a lower increase of 60% in NPV, a marginal increase of 2% in IRR and small increase of 10% in PI.

DISCUSSION

With respect to the fishing costs structures results obtained for the average vessel in these three fisheries were similar to those obtained by Tietze et al. (2005) for gillnet fishing boats in Senegal and those obtained by Cerda et al. (2014) gillnet fishing boat in central south Chile, where the weight of fishing costs is on Running, labor and vessel costs. The relative lower weight estimated for these costs items when compared to those estimated by the above mentioned authors, arises from the fact that our costs structure includes Other costs but, theirs did not included such costs.

Results obtained for the gulf hake and monkfish fishery are comparable to those obtained by Tietze et al. (2005) for trawler fisheries in South Africa. The differences in the level of fishing costs observed between the whitemouth croaker, gulf hake and monkfish fishery lays on the existing differences on vessel, crew and fishing gear sizes. Other differences in costs, arises from the fact that no vessel pays for insurance in the gulf hake fishery and their vessel maintenance costs are the lowest of the three fisheries.

Vessel owners reported that the preferred fishing gear strategy is to replace sections rather than mend them. In average, vessels operating in the whitemouth croaker fishery replace a lower number of sections per fishing trip than those operating in the gulf hake and monkfish fishery. This may be due to the fact that the whitemouth croaker fishery is conducted on the continental shelf and the gulf hake and monkfish fisheries on the slope.

In general, fuel was determined to be the main cost component in all three fisheries under analysis. According to Sumaila et al. (2008) fuel is a substantial component in the cost of fisheries and the proportion varies with each type of fishing, ranging from 60% of the costs as in commercial fishing in Hong Kong. Results for this study showed that Fuel & lubricant ranged from 52% to 57% of the vessels' Running costs what is consistent with the 23% of the total operating costs reported for the bottom gillnet fishery of São Paulo State (Gasalla et al., 2010) and with previous estimations that fuel represents between 10 and 60% of the total cost of the fishing activity in Brazil (Haimovici et al., 2006).

When comparing the bottom gillnet fishing, which operates passively during the fishing operation, with an active fishing such as trawling, is evident that bottom gillnet vessels consumes less fuel and therefore have lower operating costs (Lam et al., 2011). In Norway, was reported that trawlers use four times as much fuel to catch one fish ton of fish when compared to local gillnet and line vessels (Smith, 2007).

In summary, fishing costs structure and cost levels obtained in this study showed to be consistent with partial information provided in studies for the Santa Catarina region or others like Alves et al. (2009), Gasalla et al. (2010), Pio et al. (2012), Wahrlich et al. (2004) and Piniella et al. (2007).

The determination of fishing cost structures and estimation of fishing costs levels are important information to determine in turn the economic and financial performance of the fishing vessels operating the fisheries and this in turn is an important information for fisheries management purposes (Gasalla et al., 2010).

Even though results on NPV, IRR and PI for the average vessel in the three fisheries analyzed showed positive levels, the profitability of the business is low having an IRR lower than 20% and a PI lower than 2, considering a 10% discount rate. The profitability index obtained indicated a return of 70 cents on the dollar for monkfish and of 30 and 20 cents on the dollar for gulf hake and whitemouth croaker fishing vessels which is low compared to US$ 5 or more on the dollar from salmon aquaculture (González et al., 2013). The average vessel takes almost 14 years to recover the capital investment in the whitemouth croaker fishery. In turn it would take approximately 8 and 12 years to recover the capital invested in the gulf hake and monkfish fisheries. According to these results, the whitemouth croaker and the gulf hake fisheries would specially be in a fragile condition.

Most common economic activities like bakeries, shoe stores, small markets have IRR that in average range from 15% to 20%, being activities with low levels of uncertainty and risks. High risk activities like fisheries, aquaculture, mining and others require higher and faster returns on investment, with IRR higher than 40% to 50% (Stutely, 2000).

Nonetheless, these results indicate that the fishery is still an economically viable activity, generating employment and income to fishermen.

Tietze et al. (2005) showed a number of fishing activities with low return on investment or even negative ones, so these results are not out of the common in the fishing activity around the world at the fleet level.

Important to bear in mind is that Sumaila et al. (2008) showed that in year 2000 Brazil allocated an average of 61 million dollars for the subsidy of diesel, and thus the average per gallon was US$0.11. Therefore, the actual operating costs of the three gillnet fisheries analyzed in this study were lower than what was here estimated. Nonetheless, this does not modify the fact that as a business these fisheries are currently in fragile condition. Furthermore, this type of subsidies will hurt the fishing activity in the long run as they artificially sustain higher levels of fishing effort and mortality than those actually supported by the fish stocks under the current market and economic conditions in Santa Catarina.

Another important element to bear in mind when analyzing the results previously presented is that labor costs were estimated at its opportunity costs, based on the potential incomes a deck hand may earn in the construction business, and was not based on the current prevailing share system. Consideration of the opportunity cost of labor was justified on the grounds that it allows to actually have reasonable estimates of the business profitability. This as when using the share system, crew incomes include not only the payment to actual work, but also includes part of the business profitability. The above is explained by the fact that shares are calculated as portions of a net revenue which is normally obtained from subtracting running costs from gross revenues. The number of portions used normally include the crew and their role, plus additional portions or shares for the capital and the vessel owner. Thus, this system tends to distribute business profitability between the crew and the capital owner (Cardoso et al., 2004; Cardoso & Freitas, 2006; Moreno et al., 2009; Cardoso & Haimovici, 2010; Gasalla et al., 2010, among others). Under a share system, the combination of the vessel and owner shares, would be used to pay for Vessel and Other costs items in Tietze's cost structure.

With respect to the analysis of results from the application of the regulation on fishing gear (Fig. 9) shows improvements in the economic and financial indicators for the whitemouth croaker fishery. In proportional terms the changes in NPV are significant with increases of approximately 220% and 60% for scenarios Optimist and Conservative, respectively, when compared to the current situation. The effects on the IRR and PI are less impressing though, with results that failed to revert the fragile economic and financial performance for the average vessel in the fishery.

The above may be explained by the fact even though the reduction on fishing gear investment cost is relevant with a 40% decrease, there are no expected reductions in fishing gear maintenance costs and the expected increase in landings due to fish stock recovery is expected to be of only 20% at most in scenario Optimist and 15% in scenario Conservative.

This as the gillnet fishing fleet is not the only fleet targeting the whitemouth croaker stock, which is also subject to fishing effort and mortality from the trawler fishery in Santa Catarina. Thus, even though the expected effects from the gear regulation are positive, they seem not to be sufficient by themselves to revert the current fragile situation of this fishing fleet and the whitemouth croaker fish stock supporting them.

Finally, the present study has shown how the information on investment costs, fishing costs and their costs structure, along with fishing effort and landings, ex-vessel prices and complementary information on exchange rates, discount rates and service lives is necessary to conduct assessments and analysis of the economic and financial performance of the fishing activity in Santa Catarina, Brazil, and the management instruments devised by the Brazilian fishing authorities.

In this context, this is a good starting point due to the previous void of economic information but, it is also important to recognize that the analysis presented here was not directly linked to the dynamics of the fish stocks, the fishing fleets and fish markets, and, it only presents a partial comparative static analysis. Dynamic bioeconomic modelling is the approach that needs to be considered for future analyses of these fishing activities and their interaction with both the dynamic of the fish resources and the fish product markets.

ACKNOWLEDGEMENTS

We are indebted to the vessel's owners or "armador" who kindly gave information and contributed to this work and the Syndicate of Owners and Fishery Industries of Itajaí (SINDIPI) by contact with the owners and the space given to the interviews. CAPES (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior, Ministry of Education, Brazil) funded this study (Edital Capes Ciências do Mar 09/2009, AUXPE 1141/2010 - IGEPESCA Project) and supported V.M.P. by a Ph.D. scholarship. P.R.P. coordinates IGEPESCA/ CAPES Project and is supported by a research grant from CNPq (Conselho Nacional de Desenvolvimento Científico e Tecnológico - Ministry of Science, Technology and Innovation - Brazil, Process 306904/2012-8).

 

REFERENCES

Alves, P.M.F., C.A. Arfelli & A.R.G. Tomás. 2009. Caracterização da pesca de emalhe do litoral do Estado de São Paulo, Brasil. Bol. Inst. Pesca, 35(1): 17-27.         [ Links ]

Barcellos, L.J.P., M.B. Peres, R. Wahrlich & M.B. Barison. 1991. Relatório sobre a otimização bioeconômica dos recursos pesqueiros marinhos do Rio Grande do Sul. FURG, Rio Grande, 78 pp.         [ Links ]

Branch, T.A., R. Hilborn, A. C.Haynie, G. Fay, J.G. Flynn, K.N. Marshall, J.K. Randall, J.M. Scheuerell, E.J. Ward & M. Young. 2006. Fleet dynamics and fishermen behavior: lessons for fisheries managers. Can. J. Fish. Aquat. Sci., 63: 1647-1668.         [ Links ]

Brasil. 2009a. Instrução Normativa Ministério do Meio Ambiente (MMA)/Secretaria Especial de Agricultura e Pesca (SEAP-PR). Law Nr 3.         [ Links ]

Brasil. 2012. Portaria Interministerial Ministério da Pesca e Aquicultura (MPA)/Ministério do Meio Ambiente (MMA). Law Nr 12.         [ Links ]

Cardoso, R.S. & C.E.C. Freitas. 2006. A composição dos custos de armação e a renda das expedições de pesca da frota pesqueira artesanal da região do Médio rio Madeira, Amazonas, Brasil. ACTA Amaz., 36(4): 519-524.         [ Links ]

Cardoso, R.S., V.S. Batista, C.H. Faria Júnior & W.R. Martins. 2004. Aspectos econômicos e operacionais das viagens da frota pesqueira de Manaus, Amazônia Central. Acta Amaz., 34(2): 301-307.         [ Links ]

Cardoso, L.G. & M. Haimovici. 2010. A pesca em Passo de Torres - SC. Anais III Congresso Brasileiro de Oceanografia.         [ Links ]

Cerda, R., M. Ahumada, E. González-Poblete & D. Quierolo. 2014. Modelo estructura de costos de la flota pesquera nacional y plantas de proceso. Pontificia Universidad Católica de Valparaíso, Estud. Doc. 01/2014.         [ Links ]

Dreyfus-León, M.J. & H.G. Marzo-Monroy. 1993. Control óptimo de un sistema bioeconômico. La pesquería del atún aleta amarilla (Thunnus albacares) en el Océano Pacifico Oriental. Cienc. Mar. 19(3): 353-369.         [ Links ]

Dudley, R.G. 2008. A basis for understanding fishery management dynamics. Syst. Dynam. Rev., 24(1): 1-29.         [ Links ]

Gasalla, M.A., A.R. Rodrigues, L.F.A. Duarte & U.R. Sumaila. 2010. A comparative multi-fleet analysis of sócio-economic indicators for fishery manage-ment in SE Brazil. Prog. Oceanogr., 87: 304-319.         [ Links ]

Gonzalez, P.E., C.F. Hurtado, L. Gace & A. Augsburger. 2013. Economic impacts of using copper alloy mesh in trout aquaculture: Chilean example. Aquacult. Econ. Manage., 17(1): 71-86.         [ Links ]

Haimovici, M. 1997. Recursos pesqueiros demersais da região sul. FEMAR, Rio de Janeiro, 80 pp.         [ Links ]

Haimovici, M., M. Vasconcellos, D.C. Kalikoski, P. Abdallah, J.P. Castello & D. Hellebrandt. 2006. Diagnóstico da pesca no litoral do Estado do Rio Grande do Sul. In: V.J. Isaac, A.S. Martins, M. Haimovici & J.M. Andriguetto (eds.). A pesca marinha e estuarina do Brasil no início do século XXI: recursos, tecnologias, aspectos socioeconômicos e institucionais. UFPA, Belém, pp. 157-180.         [ Links ]

Lam, V.W.Y., U.R. Sumaila, A. Dyck, D. Pauly & R. Watson. 2011. Construction and applications of a global cost of fishing database. ICES J. Mar. Sci., 68(9): 1996-2004.         [ Links ]

Lucena, F. & C.M. O'Brien. 2005. The consequences of different scenarios in the management of the gillnet and purse-seine fisheries targeting Pomatomus saltatrix and Cynoscion guatucupa in southern Brazil: a bio-economic approach. ICES J. Mar. Sci., 62: 201-213.         [ Links ]

Mishan E.J. 1978. Elements of cost-benefit analysis. George Allen and Undwin, Boston, 151 pp.         [ Links ]

Moreno, I.B., M. Tavares, D. Danilewicz, H. Ott & R. Machado. 2009. Descrição da pesca costeira de média escala no litoral norte do Rio Grande do Sul: comunidades pesqueiras de Imbé/Tramandaí e Passo de Torres/Torres. Bol. Inst. Pesca, 35(1): 129-140.         [ Links ]

Perez, J.A.A. & R. Wahrlich. 2005. A bycatch assessment of the gillnet monkfish Lophius gastrophysus fishery off southern Brazil. Fish. Res., 72: 81-95.         [ Links ]

Perez, J.A.A., R. Wahrlich, P.R. Pezzuto & F.R.A. Lopes. 2002. Estrutura e dinâmica da pescaria do peixe-sapo Lophius gastrophysus no sudeste e sul do Brasil. Bol. Inst. Pesca, 28(2): 205-231.         [ Links ]

Perez, J.A.A., R. Wahrlich, P.R. Pezzuto, P.R. Schwingel, F.R.A. Lopes & M. Rodrigues-Ribeiro, M. 2003. Deep-sea fishery off southern Brazil: recents trends of the Brazilian fishing industry. Northwest Atlantic Fish. Sci., 31: 1-18.         [ Links ]

Piniella, F., M.C. Soriguer, M.A. Fernández-Engo. 2007. Artisanal fishing in Andalusia: a statistical study of the fleet. Mar. Policy, 31: 573-581.         [ Links ]

Pio, V.M. 2011. A pesca industrial de emalhe de fundo em Santa Catarina - Brasil: dinâmica, tecnologia, economia e gestão. Master Thesis. Universidade do Vale do Itajaí, Itajaí, 117 pp.         [ Links ]

Pio, V.M., P.R. Pezzuto & R. Wahrlich. 2012. Aspectos tecnológicos das pescarias industriais com rede de emalhar de fundo no Estado de Santa Catarina, Brasil. Bol. Inst. Pesca, 38(1): 1-14.         [ Links ]

Pio, V.M., P.R. Pezzuto & R. Wahrlich. 2016. Only two fisheries? Characteristics of the industrial bottom gillnet fisheries in southeastern and southern Brazil and their implications for management. Lat. Am. J. Aquat. Res., 44(5): .882-897.         [ Links ]

Sainsbury, K. & U.R. Sumaila. 2001. Incorporating ecosystem objectives into management of sustai-nable marine fisheries including "best practice" reference points and use of marine protected areas. The Reyjavik Conference on Responsible Fisheries in Marine Ecosystems. FAO, Reykjavik, 343-360.         [ Links ]

Sapag, N. & R. Sapag. 2008. Preparación y evaluación de proyectos. McGrawHill, Bogotá, 445 pp.         [ Links ]

Schroeder, R., V.M. Pio, G.C. Bail, F.R.A. Lopes & R. Wahrlich. 2014. Análise espaço-temporal da composição da captura da pesca com emalhe de fundo no Sudeste/Sul do Brasil. Bol. Inst. Pesca, 40(3): 323-353.         [ Links ]

Smith, A. 2007. A study into the effect of energy costs in fisheries. FAO Fish. Circ., 1022.         [ Links ]

Sumaila, U.R., L. Teh, R. Watson, P. Tyedmers & D. Pauly. 2008. Fuel price increase, subsidies, overcapacity, and resource sustainability. ICES J. Mar. Sci., 65: 832-840.         [ Links ]

Stutely, R. 2000. Plan de negocios: la estrategia inteligente. Pearson Education, México D.F., 320 pp.         [ Links ]

Tietze, U., W. Thiele, R. Lach, B. Thomsen & D. Rihan. 2005. Economic performance and fishing efficiency of marine capture fisheries. FAO Fish. Tech. Pap., 482: 68 pp.         [ Links ]

Wahrlich, R., J.A.A. Perez & F.R.A. Lopes. 2004. Aspectos tecnológicos da pesca do peixe-sapo (Lophius gastrophysus) com rede de emalhar no sudeste e sul do Brasil. Bol. Inst. Pesca, 30(1): 87-98.         [ Links ]

 


Received: 29 July 2015;
Accepted: 10 October 2016

 

Creative Commons License All the contents of this journal, except where otherwise noted, is licensed under a Creative Commons Attribution License