The last remaining sardine packing plant in the United States is closing. The plant closing will force the 130 plant workers to find employment elsewhere.
The plant’s owner, Bumble Bee Foods, blames the closure on drastically lower limits on the amount of herring that regional fishermen are allowed to catch. The New England Fishery Management Council (an intergovernmental entity controlled by both state and federal government) slashed the quota in half from the 180,000 metric tons allowed in 2004 to today’s 90,000.
Consumer demand for sardines is insufficient for the price increases needed to offset the increased costs imposed by the government’s stringent quota.
Meanwhile, the government is busy creating havoc in the dairy industry. While sardine canning industry was destroyed by government intervention and regulation, the dairy industry is coping with soviet style price fixing. Dairy farmers across the nation are bemoaning the prices set by the government and demanding even greater subsidies and interventions.
Various price floors set by the government, such as the Dairy Price Support Program, have been distorting U.S. dairy markets for decades. The situation was made far worse by the Milk Income Loss Contract (MILC) which pays farmers nationwide every month in which milk prices in Boston fall below the minimum price. Even the White House has noted the failure of these programs. These interventions, and most of the “reforms” being proposed, will soon put the milk industry in the same condition as the sardine industry. Unfortunately, when the disaster reaches its peak, politicians will likely be all too happy to buy votes with another massive bailout rather than truly solving the problem by getting the government out of the milk business.
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Not to mention how bad most farmers are at hedging. I know the local dairy co-op leader and he told me that he pleaded with all the dairy farmers in the area to lock in long term contracts at $20/100lb. Then he heavily lobbied them to lock in at the break even price (its either 14 0r 16)…now the price is at 13…it was as low as 8 and 9. None of the farmers took his advice and contracted. Man they could have made a killing all this time.You have a good point in the article but it appears your disaster will be avoided this year as milk price look to be on the rise. For some reason they correlate with oil prices well. Farmers always complain, but after going out and pulling on cow tits twice a day know your loosing money for a year they will be happy to go out and do it know they will break even. If we could just get them to speculate it would solve these stupid swings.Oh well My ag econ teacher (micro) always said…”the best cure for low prices is low prices”The better question is though is this the future trend? Oil and milk bubbles occurring with greater frequencies?
Even when the government admits a policy is a failure, you STILL can’t get them to pull the plug on it. Sheesh! The milk supports are especially galling. If they were really concerned about the poor and the children, they would want the price of milk to go down. Imagine if milk cost less than soda pop, for example. Not to mention all the milk products, as well.
Not saying government intervention didn’t happen here but I get the impression, from the article, that decrease in consumer demand was the bigger play here in shutting down the factory, in addition to companies overseas just doing it better. The author of this blog could have probably picked a much better case to write about then this one, in my opinion.
Your vocabulary betrays yet another sorry result of government meddling. Some time ago the government redefined “sardines” to include ‘herring’ fish so that fish canners could label herrings as sardines. Tbe fish are quite different. Real sardines, coming from the coast of Portugal and other places, taste great.
As much as the NMFS has /does engage in government interventionism (and the distortions therin), what it does is provide a mechanism for overcoming the prisoner’s dilemma associated with commercial fishing, establish private property rights to a portion of the biomass, and enforce those rights.
These quotas are not arbitrarily set to frustrate industry; they are set at reasonable levels so that the biomass is not rendered extinct! Much of this management, especially in the Atlantic cod and herring fisheries, came far too little, too late; it is not government distortions that led to the collapse of these fisheries, but too long a delay in government marking out property rights and enforcing those rights. In these cases, the solutions were enacted after the fishery was already ruined.
The track record of the NMFS’s management of the BSAI (Bering Sea / Aleutian Islands) is more than excellent; it is arguably the most well managed fishery in the world. This is a victory of private property, not of government intervention.
And how do the fishers come to own that portion of the biomass? Did they choose to homestead only that percentage? Entered a contract with other fishermen in the area to “split” the fish?
Ultimately the quota isn’t an “enforcement of property,” it’s nothing but an arbitrary regulation on how much fishers are allowed to own and extract from the oceans. To say otherwise implies that all the fish are owned by the state in the first place, and the state is being so kind as to let the fishers have some.
I agree that the dairy price fixing is indefensible, but the complaints about fishing quotas seem naive. If government quotas are bad, put a link to an alternative solution in the article. Simply allowing everyone to proceed in unrestrained fishing will lead to severe population decline…as it has over the past century.
No it won’t. When fish populations go down from intensive fishing, the price will go up, and they will switch to an alternative fish (the population of the overfished fish will then go back up). This seems to be what McDonald’s does with the filet-o-fish, for example (http://en.wikipedia.org/wiki/Filet_o_fish).
Now that you’ve linked me to a wikipedia article on a McDonald’s fish sandwich….I’m convinced.
Oh wait…..
It is quite possible to fish a population to a level where recovery is basically impossible, and even if recovery begins, people will start fishing as soon as there is any sizable population, leaving the fishery permanently low.
http://news.sciencemag.org/sciencenow/2008/11/25-01.html
The best thing is to make sure that the population never gets too low to recover, and that requires some sort of regulation (be it privately done or by the government). If all the fish in the ocean were owned by one company, they would fish far less than we currently do, because they would have a vested interest in keeping the population high enough for fish to be easily caught in large quantities, instead of wasting many resources to get reduced yields. But, since the ocean is basically a commons, everyone is going to try to catch the most fish they can, because any fish they don’t catch will be caught by someone else.
This is all totally obvious, and I think at least most people on here will admit that this is a tragedy of the commons. I’m just suggesting that posting an article on the government’s failed attempt to solve a problem should actually present a solution instead of just whining about it. Ofcourse, the government often tries to solve problems which don’t need to be solved, but I think it’s pretty clear that over-fishing is a real issue.
And overfishing occurs because the ocean isn’t really owned by anyone (wonder why…). If fishers were only allowed to fish on water that they owned or otherwise had permission to fish on, there would be far more incentive to do things to keep populations up.
No informed libertarian will deny that tragedies of the commons exist. However, it is important to remember they are caused by a lack of defined property rights. What is needed is less Government involvement, not more.
No one owns the ocean and its contents, as Seattle points out, and thus, over-fishing in certain regions occurs. What are there 1.3 billion cows on earth (which are useful AND owned), but you have to go to zoos to see other animals? I read the sciencemag article, and this only convinces that no one really knows what the ocean populations of fish are. They talk about using great “models” to estimate fish populations, and then, as usual, talk about doom and gloom, and that there is no way for a recovery.
The best examples are the McDonald’s example – just because something is on wikipedia doesn’t immediately disqualify it! McDonalds has a great incentive to purchase cheaper fish that are suitable alternatives.
Sorry, I didn’t mean it was bad because it was on wikipedia (it’s not like there’s any reason to doubt McDonald’s uses different fish in their patties), but it’s a very far stretch to claim that the expense from catching rarer fish is enough to allow their populations to recover. This might prevent the fish from going extinct, but the population isn’t likely to get back to a reasonable level, and there are far reaching ecosystem effects from keeping important fish populations at extremely low levels. Predators of the fish people eat also have the risk of going extinct if their prey is reduced by 90%.The whole irony here is that if everyone fished less, way less equipment would be used, and less days would have to be spent during the fishing season (and a high yield could still be caught). I can’t stress this enough…but it’s good for everyone if there’s a thriving population of fish, rather than one that is constantly on the bordering between viable and unviable.This is some of the logic behind having a government quota, and that’s why there would need to be a similar effort in the private sector if we are going to eliminate these quotas.You are right that it’s very hard to accurately model a fish population, and that’s actually one of the main difficulties in trying to completely privatize fishing. It’s hard to take ownership when the actually quantity is unknown.
The whole solution to this is let people, or groups of people, own defined regions of bodies of water. If they choose “poorly”, and purchase a section that doesn’t have fish there, then they could practice aquaculture and farm fish there. There is actually more and more of this going on.The “ecosystem” effects have the problem that one person, or group, is assigning a value that then everyone is forced to follow. The dynamics of natural ecosystems are so complex that population disruptions will only be temporary and will eventually be corrected in some way, so to “freeze” in time what is happening now (by talking about ecosystem effects) disrupts this natural, self-correcting process – kind of reminds me of money and currency issues, and the Fed, does it not?
And the “action” to be taken is to allow sections of oceans and lakes to be owned privately. The fish are the responsibility of the owner of whatever property they happen to be swimming around in.
“The dynamics of natural ecosystems are so complex that population disruptions will only be temporary and will eventually be corrected in some way”
Ecosystems are self-correcting if pressures aren’t too great, but it’s very easy to overfish a population. Try reading some ecology literature, or just random articles on the current state of fish populations in the world. I’ve never actually heard someone make the argument that these ecosystems will correct themselves, and it definitely isn’t supported by the facts. Atlantic cod fisheries have completely collapsed from overfishing; there was no mechanism to “self-correct” this. It would have been better for industry, consumers, and environmentalists if there was some sort of management to keep the declining fisheries economically viable.
I hate to pull a utilitarian argument, but if no-government intervention in fisheries makes everyone worse off, then it’s exceedingly irresponsible to encourage it just for the sake of adhering to a philosophy. Without government intervention, there must be a sophisticated way to privatize fisheries.
Simply privatizing plots of ocean is tricky, because fish are highly mobile, and if I choose to farm fish in one region, it will likely have effects on my neighbor’s property. I think it could be a start, but there would have to be many complex agreements by different private fishing organizations. I think it could be a good though though, for example: some environmental groups would want to buy up fish breeding grounds, which would actually benefit the organizations who engage in fishing, because protected breeding grounds would be lead to a faster replenishing supply of fish. Ofcourse, this is just speculation, and I’m still looking for actual proposals on the subject.
I appreciate what you are saying, and you sound like you know a lot about this (probably more than I do), but I have to think that most or all of the data on fish populations is wildly inaccurate – just by the nature of the area of study. The oceans are so vast, and sampling is so difficult (even with all of the fishing vessles, scientific research, etc.), that I think any of the numbers and estimates should be viewed very carefully. I have been involved with research somewhat similar to this, sampling microbial populations and making estimates. The numbers really are prone to wide variation, and I would guess marine population estimates are the same.
But, getting back maybe to the most important issue, if certain fish species are economically important, they will not disappear. Take all of the examples of farm animals, crops, etc. When they are economically important (and unfortunately, all too often, subsidized and influenced by outside governments), they are abundant.
In terms of owning property in the ocean, it could be very similar to owning land. When you buy a house, you have already done background work (inspections, brought your friend who knows a lot about homes with you to look at things, negotiated a price and sale conditions, etc.). Before buying part of an ocean, you could take samples and conduct chemical tests on it, survey animal populations there (using as much historical data as possible), talk about insurance (some of which is not developed yet because you can’t buy this type of property), etc. It is really the same thing in a lot of respects. The property owner would then have all the incentive in the world to keep up his property (just like other types of ownership).
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