Development of the Pacific Groundfish Trawl IFQ Market Marine Resource Economics

In-season transferability of quota plays an important role in multispecies individual fishing quota (IFQ) systems since fishermen often need to acquire quota to balance incidental catch. The optimal utilization of quotas is thus dependent on development of an efficient quota market, but markets in multispecies IFQ fisheries develop slowly and may fail to perform efficiently even after several years. In 2011 an IFQ system was implemented for the Pacific groundfish trawl fishery in the US. After four years, the quota market does not appear to be yielding efficient prices for many species or distributing quota efficiently. I explore the structure and performance of the QP market and discuss the impediments to market efficiency. Drawing from theory and experience in other multispecies IFQ systems, I discuss other quota distribution and catch-balancing mechanisms that can supplement and perhaps improve inefficient markets and enable higher quota utilization rates.