# Presentation: 080342

## US Caribbean Trap Fishery Cost and Earnings Study 

- Jim Waters and Juan Agar

## Partners

- Thomas Murray (Virginia Institute Marine Science)
- Manoj Shivlani (University of Miami)
- Manuel Valdes Pizzini (University of Puerto Rico)
- Daniel Suman (University of Miami)
- Jim Kirkley (Virginia Institute Marine Science)
- Ivan Mateo and Michelle Sharer (University of Puerto Rico)

## Discussion Outline

- Describe goal and rational of study
- Methods
- Preliminary Results
- Discuss future efforts

## The goal of the present study is to characterize the economic and social conditions of fish trap fleet that operates in Puerto Rico and the U.S. Virgin Islands. 

## Rationale for Study

-  Potential physical damage to habitat
-  Over-harvesting of reef-fish resources
-  Regulatory interest in alternative management strategies

**Notes:**
In the past years, federal, state and local management agencies have come under increasing pressure to regulate the fish trap fishery. Environmental groups have expressed concern because the haphazard placement and hauling of traps has been documented to damage coral heads, soft corals and sponges. 

In addition to physically damaging the hard corals and gorgonians, traps target various overexploited reef fish species, which further threaten the health and stability of coral reef habitats. 

Reef-fish species are particularly vulnerable to harvesting pressure because of their life history characteristics, which include sedentary behavior, slow growth, and delayed reproduction. Valuable species such as Nassau grouper (Epinephelus striatus) and goliath grouper (Epinephelus itajara) continue to be overexploited despite a harvesting moratorium in federal waters since 1990 and 1993, respectively.

Last, interest in effort reduction.

## Trap Fishery

- Puerto Rico
- 22% of total landings
- 24% of total value (Snapper and spiny lobster alone account for over 60% of revenue)
- US Virgin Islands
- 37% of the Territory’s total landings and its total value (Spiny lobster and triggerfish alone account for 48% of revenues).

## 	The collection of timely socio-economicdata is important because helps to

- Establish socio-economic baselines,
- Meet regulatory requirements, and
- Develop models to investigate the consequences of management proposals.

## Methods

## In person, voluntary surveys

Stratified Sample design (by area and trap allotment) ~ 100 surveys

 Sampling universe
Puerto Rico ~ Fisher Census (324)
 US Virgin Islands ~ Fisher Licenses (97)

- Stratified Sample design (by area and trap allotment) ~ 100 surveys
-  Sampling universe
- Puerto Rico ~ Fisher Census (324)
-  US Virgin Islands ~ Fisher Licenses (97)

- Survey design

## Survey Development and Data Collection

-  Survey development:  SEFSC and Murray & Assoc.
-  Data collection: Murray & Assoc.

## Survey Instrument

## The questionnaire collected data on

	Demographic (age, education, dependents)
	Fishing practices (usage, soak time, catch mix)
	Revenue and cost (variable and fixed)
	Capital investment (vessel, traps) 
	Capacity utilization
	Regulatory contingent behavior (trap limitation)
  Spatial deployment of effort 

- 	Demographic (age, education, dependents)
- 	Fishing practices (usage, soak time, catch mix)
- 	Revenue and cost (variable and fixed)
- 	Capital investment (vessel, traps)
- 	Capacity utilization
- 	Regulatory contingent behavior (trap limitation)
-   Spatial deployment of effort

## Sampling design

## Slide 14

| Area | Tier
(No. Traps) | Population | Target
Surveys | Actual
Surveys | Attempted Contacts |
| --- | --- | --- | --- | --- | --- |
| Puerto
Rico | 1-40 | 258 | 30 | 30 | 57 |
|  | 41-100 | 53 | 20 | 22 | 31 |
|  | 101+ | 13 | 10 | 8 | 13 |
| St. Thomas &
St. John | 1-50 | 19 | 8 | 5 | 19 |
|  | 51-150 | 20 | 7 | 10 | 17 |
|  | 151+ | 13 | 5 | 5 | 9 |
| St. Croix | 1-19 | 31 | 13 | 13 | 30 |
|  | 20+ | 14 | 7 | 7 | 12 |

## Slide 15

| Region |  No.
Attempted
Contacts  | No.
non-responses
(%) | Un-reachable
(%) | Refused
to
partake
(%) | No
longer
qualified
(%) | Other
(%) |
| --- | --- | --- | --- | --- | --- | --- |
| Puerto Rico | 101 | 41
(41 %) | 25
(25%) | 4
(4%) | 9
(9%) | 3
(3%)  |
| St. Thomas
& 
St. John | 45 | 26
(56 %)  | 13
(29%) | 7
(16%) | 3
(7%) | 3
(7%)
 |
| St. Croix | 42 | 22
(52 %) | 14
(33%) | 7
(17%) | 0
(0%) |  1
(2%) |
| Total | 188 | 88
(47 %)
 | 52
(28%) | 18
(10%) | 12
(6%) |  6
(4%)
 |

## Preliminary findings

## Capital Investment

| Variable | Puerto Rico | St. Thomas & St. John | St. Croix |
| --- | --- | --- | --- |
| Vessel age
(years) | 20.8
(0.5) | 18.1
(1.6) | 15.6
(1.8) |
| Vessel length
(ft) | 16.4
(1.4) | 28.4
(1.3) | 21.2
(0.9) |
| Vessel value
($) | 8,973.9
(1,058.3) | 59,692
(8,245.1) | 21,994
(4,633.4) |
| Loan on vessel and gear
($) | 378.7
(131.2) | 0
(0) | 2,222
(1,042.3)  |

*Preliminary results*

## Demographics

| Variable | Puerto Rico | St. Thomas & 
St. John | St. Croix |
| --- | --- | --- | --- |
| Age
(years) |   50.8       
 (2.3) | 47.2
(2.0) | 57.4
(2.5) |
| Fishing
experience
(years) | 30.1
(2.3) | 25.6
(1.9)
 | 28.9
(2.5)
 |
| Schooling
(years) | 9.7         
(0.5) | 10.3
(0.5) | 8.8
(0.6) |
| Number of
fish traps | 38.6
(2.3 ) | 92.1
(7.7) | 27.0
(3.5) |

*Preliminary results*

## Puerto Rico demographics

| Variable | PR Tier 1
(1-40 Traps) | PR Tier 2
(41-100 Traps) | PR Tier 3
(101+ Traps)  |
| --- | --- | --- | --- |
| Age
(years) |   50.3
 (2.8) |  52.4
(2.2) |  54.8
(1.6) |
| Fishing
experience
(years) |  29.8
(2.8) |  30.5
(2.3)
 |   31.3 
(2.5)
 |
| Schooling
(years) | 9.7
(0.7) |   9.5
(0.5) | 8.8
(1.0) |
| Number of
fish traps |  24.7
(2.4) |   63.6        
(5.0) |  212.3
(21.7) |

*Preliminary results*

## St. Thomas and St. John demographics

| Variable | STSJ Tier 1
(1-50 Traps) | STSJ Tier 2
(51-150 Traps) | STSJ Tier 3
(151+Traps)  |
| --- | --- | --- | --- |
| Age
(years) | 50.4         
 (4.9) | 49.2
(1.9) | 43.2
(3.4) |
| Fishing
experience
(years) | 20.0
(4.1) | 29.0
(2.0 )
 | 25.8
(4.0)
 |
| Schooling
(years) | 9.3 
(1.4) | 10.6
(0.5) | 10.8
(0.9) |
| Number of
fish traps | 33.0
(6.3 ) | 107.3
(8.1) | 161.0
(5.0) |

*Preliminary results*

## St. Croix demographics

| Variable | STX Tier 1
(1-19 Traps) | STX Tier 2
(20+ Traps) |
| --- | --- | --- |
| Age
(years) |   55.1 
(3.5) | 62.6
(2.5) |
| Fishing
experience
(years) |  24.6
(3.6) | 38.3
(1.5)
 |
| Schooling
(years) |  8.1 
(0.7) |  10. 7
(1.1) |
| Number of
fish traps |  20.2
(3.6 ) |  42.1
(8.2) |

*Preliminary results*

## Fishing dependence

| Variable | Puerto Rico | St. Thomas & 
St. John | St. Croix |
| --- | --- | --- | --- |
| Household income from commercial fishing (%) | 68.7
(4.5) | 76.0
(6.8) | 83.4
(4.5) |
| Fishing income from traps 
(%)  |  59.4
(4.5) | 58.0
(4.6) | 74.9
(5.8) |
| Number of dependents |   3.3
(0.2) | 2.8
(0.3) | 3.4
(0.3) |
| Family use of catch (%) |  2.9
(0.6) | 3.7
(1.2) | 2.5
(0.4) |

*Preliminary results*

## Puerto Rico fishing dependence

| Variable | PR Tier 1
(1-40 Traps) | PR Tier 2
(41-100 Traps) | PR Tier 3
(101+ Traps)  |
| --- | --- | --- | --- |
| Household income from commercial fishing (%) | 64.0
(5.7) | 88.9
(3.4) | 78.1
(5.5) |
| Fishing income from traps 
(%)  | 56.1
(5.5) | 69.3
(4.2) | 84.4
(5.5) |
| Number of dependents | 3.3
(0.3) |  3.3
(0.3) | 2.9
(0.4) |
| Family use of catch (%) |   2.8 
(0.8) |  2.9
(0.5) | 4.7
(1.6) |

*Preliminary results*

## St. Thomas and St. John fishing dependence

| Variable | STSJ Tier 1
(1-50 Traps) | STSJ Tier 2
(51-150 Traps) | STSJ Tier 3
(151+Traps)  |
| --- | --- | --- | --- |
| Household income from commercial fishing (%) | 49.0
(18.0) | 85.5
(4.7) | 93.0 
(4.5) |
| Fishing income from traps 
(%)  | 50.8
(16.5) | 61.0       
(7.0) | 73.0 
(9.9) |
| Number of dependents | 2.8
(0.6) | 2.6 
(0.3) | 3.2
(0.4) |
| Family use of catch (%) | 7.6
(3.0) | 1.6 
(0.4) | 1.0        
(0.3) |

*Preliminary results*

## St. Croix fishing dependence

| Variable | STX Tier 1
(1-19 Traps) | STX Tier 2
(20+ Traps) |
| --- | --- | --- |
| Household income from commercial fishing (%) | 84.2 
(5.6) |  81.4
(7.7) |
| Fishing income 
from traps (%)  | 61.8
(8.8) |   99.3
(0.5) |
| Number of dependents | 3.5
(0.3) |  3.1 
(0.6) |
| Family use of catch (%) | 2.2    
(0.5 ) | 3.1        
(0.6) |

*Preliminary results*

## Revenue from trap fishing

| Variable | Puerto Rico | St. Thomas & St. John | St. Croix |
| --- | --- | --- | --- |
| Revenue
($/fisher) |  16,266  
 (1,580.3) |  39,446   
(5,150.5) |  33,317   (5,898.8) |
| Catch
(lbs/fisher) |  5,116.4    
(394.8) |  9,870.5
(1,249.3 ) |  8,374.2 (1,368.7)   |

*Preliminary results*

## Puerto Rico revenue

| Variable | PR Tier 1
(1-40 Traps) | PR Tier 2
(41-100 Traps) | PR Tier 3
(101+ Traps)  |
| --- | --- | --- | --- |
| Revenue
($/fisher) |  11,716   (1,914.6) |  28,607   
(2,431.1) |  54,940   (6,810.3) |
| Catch
(lbs/fisher) |  3,677.7   
(460.4) |  9,377.3 
(830.4) |  15,371   (1553.0) |

*Preliminary results*

## St. Thomas and St. John revenue

| Variable | STSJ Tier 1
(1-50 Traps) | STSJ Tier 2
(51-150 Traps) | STSJ Tier 3
(151+Traps)  |
| --- | --- | --- | --- |
| Revenue
($/fisher) |  27,640
(5,242.5) |  43,224   
(9,535.0) |  49,467         (11,823) |
| Catch
(lbs/fisher) |  7,432.0    (1,478.9) |  10,469   
(2428.8) |  12,150   (2,577.8) |

*Preliminary results*

## St. Croix revenue

| Variable | STX Tier 1
(1-19 Traps) | STX Tier 2
(20+ Traps) |
| --- | --- | --- |
| Revenue
($/fisher) |  24,340   (6,130.3) |  50,136         (12,466) |
| Catch
(lbs/fisher) |  6,320.9   (1,328.7) |  12,221   
(3,045.0) |

*Preliminary results*

## Variable Costs

| Variable | Puerto Rico | St. Thomas & 
St. John | St. Croix |
| --- | --- | --- | --- |
| Fuel 
($/trip) | 11.8
(1.6) | 56.2
(3.7) | 20.5
(3.0) |
| Oil
($/trip) | 2.4
(0.2) | 4.0
(0.5) | 3.4
(0.5) |
| Bait
($/trip) | 3.1
(0.9) | 22.1
(4.1) | 10.1
(3.0) |
| Ice
($/trip) | 1.7
(0.4) | 7.1
(1.5) | 3.7
(0.6) |

*Preliminary results*

## Puerto Rico variable costs

| Variable | PR Tier 1
(1-40 Traps) | PR Tier 2
(41-100 Traps) | PR Tier 3
(101+ Traps)  |
| --- | --- | --- | --- |
| Fuel 
($/trip) |  11.1      
 (2.2) | 13.02     
(2.2) | 16.1        
(3.4) |
| Oil
($/trip) |  2.5     
(0.3) |  2.3      
(0.4) |  1.8         
(0.3) |
| Bait
($/trip) |  2.5       
(1.1) |  6.1       
(2.3) |  10.0       
(6.2) |
| Ice
($/trip) |  1.8       
(0.5) |  1.3       
(0.4) |  2.8      
(0.8) |

*Preliminary results*

## St. Thomas and St. John variable costs

| Variable | STSJ Tier 1
(1-50 Traps) | STSJ Tier 2
(51-150 Traps) | STSJ Tier 3
(151+Traps)  |
| --- | --- | --- | --- |
| Fuel 
($/trip) |  61.0       
(7.4) |  56.8       
(4.2) |  49.8       
(7.0) |
| Oil
($/trip) |  4.0        
(1.1) |  4.2     
(0.7) |  3.8      
(0.6) |
| Bait
($/trip) |  15.4        
(5.2) |  16.7       
(4.8) |  36.7      
(10.8) |
| Ice
($/trip) |  6.6        
(3.2) |  8.1     
(2.1) |  6.6        
(2.4) |

*Preliminary results*

## St. Croix variable costs

| Variable | STX Tier 1
(1-19 Traps) | STX Tier 2
(20+ Traps) |
| --- | --- | --- |
| Fuel 
($/trip) |  15.4       
(1.8) |  31.9      
(8.7) |
| Oil
($/trip) |  2.5      
(0.4) |  5.6      
(1.5) |
| Bait
($/trip) |  3.7    
(1.2) |  24.3      
(9.2) |
| Ice
($/trip) |  3.8      
(0.7) |  3.4     
(1.1) |

*Preliminary results*

## Fixed Costs

| Variable | Puerto Rico | St. Thomas & 
St. John | St. Croix |
| --- | --- | --- | --- |
| Loan payments
($/year) |  149.1
(54.2) |  1,569.3
(733.6) | 0
(0) |
| Maintenance and repair of vessel
($/year) |  879.8
(130.1) |  5,068.4      
(864.6) |  2,139.3   
  (531.8)  |
| Maintenance and repair of traps
($/year) |  1,303.0
(496.0) | 1,416.7      
(273.7) |  1,189.1    
 (278.2) |

## Next Steps....

- Statistical characterization of the US Caribbean trap fishery,
- Develop economic models that examine regulatory actions, and
- Outreach component ~ Council presentations, pamphlets and website materials.

**Revenue per additional**
**trap**

**C**** with trap limits**

**C**** wo trap limits**

**Effort (no. traps)**

**$**

**E****1**

**E****2**

- Economic impact of limiting the number of traps

**Notes:**
A second objective of this talk is discuss the imposition of a trap reduction, we interested in learning what the economic cost of such a policy will be.

Before doing this is useful to understand how

## Pricing of trap certificates

- 

- $

- $

- $

- Q2

- Q1

- QMkt= Q1+Q2

- No. Traps

- No.** **Traps

- No. traps

**+**

**=**

- Trap Quota

- Pmkt

- Fleet

- Boat A

- Boat B

## Firm’s response to trap  certificate market prices

- $

- Number of Traps

- Q*****

- Q**I**

-  ΔQ=Sell

- Pind

- Pmkt

## Firm’s response to trap certificate market prices

- Q*

- Q**I**

- $

- Number of Traps

-  ΔQ=Buy

- Pmkt

- Pind

## Past Work

## Model Assumptions

- Fisherman’s objective is to maximize economic benefits from the fishery,
- Fishing vessel is a multiproduct (multispecies) firm, and
- Vessel produces seven goods: lobsters, DW snappers, SW snappers, groupers, grunts, boxfishes, and other species group.

## Profit Function

- where * **π** * are profits*,** **P**i* is the price of species *i*, *E* is effort, *D**k **, M**l** *and *L**m** *are area, month and year dummies.

## Leontief Production Function

- where *Q**i* is the catch of species *i,** **P**i* is the price of species *i*, *E* is fishing effort, and *X**i* is the year dummy, and. *D**k *is the area dummy.

## Slide 44

|  | Lobsters
 | SW
 Snappers
 | DW Snappers | Grunts | Boxfishes |
| --- | --- | --- | --- | --- | --- |
| Lobsters
 |  1.84*   
 (0.38) | -0.46*    
(0.18) |  -1.66* 
 (0.29) |  0.06   
(0.20) |  0.20*   
(0.04)  |
| SW
Snappers |  -0.57*    
(0.22) |  0.111  
 (0.18) |  0.93*   
 (0.17) |  0.07
  (0.07) |  -0.18*  
 (0.03) |
| DW Snappers
 |  -6.75*  
  (1.17) |  3.04*    
(0.57) |  4.33*   
(1.23) |  -0.90*    
(0.21) |  -1.23*  
 (0.14) |
|  Grunts
 |  3.08  
 (10.32) |  2.96    
(2.77) |  -11.26*    (2.63) |  4.46  
(12.91) |  0.39*  
(0.13) |
| Boxfishes |  3.36*    
(0.72) |  0.74    
 (0.69) |  -2.78*    
(0.65) |  0.96*   
 (0.33) |  1.23* 
  (0.17)
 |

**Notes:**
Two things to note here:
One the diagonal expresses own price elasticity that is when the price of that species of lobster goes up 1%,
Then the catch of lobster goes up by 0.31%.

We see that all but grunts have positive own price elasticities. What does it mean a negative own price elasticity?
Note that the estimate from grunts is not statistically significant from zero, meaning that the harvest of grunts 
Does not respond to prices.

This could imply to two things. One that the technology is insensitive to grunts meaning that fishermen can target grunts. Alternative, we could say that fishermen can target grunts but they catch them to guarantee a certain income level from them. The actual explanation would come from fishermen.

The off-diagonal entries explain the cross prices elasticities: either positive (complements) or negative (substitutes).
Suppose that because of the increased tourism, the price of lobster goes up. Then we would expect that the catch of lobster and other species to go up, while the catches of grunts and snapper to go down. Again notice that grunts are not sensitive to the price of lobster but DW snapper is. Interestingly, when the price of snapper goes up the catch of lobster goes down, but by a different percentage.

## Effort Elasticities

|  | Lobsters
 | SW Snappers
 | DW Snappers | Grunts | Boxfishes |
| --- | --- | --- | --- | --- | --- |
| Effort

 |  1.62*   (0.21) |  1.67*    (0.14) |  5.70*    (1.23) |  1.91  (1.61) |  1.58*    (0.26) |

## Keep Trap Fishing?

**Yes**

**No**

**Keep Commercial fishing?**

**Quit fishing**

**No**

**Fish without traps**

**Yes**

- What type of work will you seek?
- _______________
- _______________
- Do you expect to earn more or less than you earn before the trap reduction?
- _____more%
- ______less %

- What other gear(s) would you use?
- _________________
- How many trips per year would you take with
- Gear a:______
- Gear b:______
- Gear c:______
- By how much do you think your **annual  net **revenues from fishing  will change?
- _______%

**How will the reduction affect your per trap usage in terms of soak time, number of trips, and areas placed?**

- By how much do you think your **annual  net **revenues from trap fishing  will change following the trap reduction?
**_______%**
- Will target different species/areas (Y/N)
- ____________________ species
- ____________________ areas
- Will you try to offset catch/revenue losses by using other gears? (Y/N)
- If yes which gears.
- Gear a:______  # trips/year________
- Gear b:______ # trips/year________

**Not change usage of the allowed traps**

- How will you accomplish this?
- Go from ____ to _____ # trips/year
- Go from ____ to _____ soak time (days)
- By how much do you think your **annual  net **revenues from trap fishing  will change following the trap reduction?
**_______%**
- Will target different species/areas (Y/N)
- ____________________ species
- ____________________ areas
- Will you try to offset catch/revenue losses by using other gears? (Y/N)
- If yes which gears.
- Gear a:______  # trips/year________
- Gear b:______ # trips/year________

- How will you accomplish this?
- Go from ____ to _____ # trips/year
- Go from ____ to _____ soak time (days)
- By how much do you think your **annual  net **revenues from trap fishing  will change following the trap reduction?
**_______%**
- Will target different species/areas (Y/N)
- ____________________ species
- ____________________ areas
- Will you try to offset catch/revenue losses by using other gears? (Y/N)
- If yes which gears.
- Gear a:______  # trips/year________
- Gear b:______ # trips/year________

**Increase usage of the allowed traps  **

**Decrease usage of the allowed traps**

**Q29: If you were required to reduce your number of traps by __%  (may use fraction instead) how would you most likely react? Please circle path and answer follow up questions. **

**Increase**

**Decrease**

**No Change**

## Stratified Sampling Design

- Puerto Rico
- Tier 1: 1-40 traps
- Tier 2: 41-100 traps
- Tier 3: 101+traps

- St. Thomas/St. John
- Tier 1: 1-50 traps
- Tier 2: 51-51 traps
- Tier 3: 151+ traps
- St. Croix
- Tier 1: 1-19 traps
- Tier 2: 21+traps

## Sampling effort

|  | Puerto Rico | St. Thomas/St. John | St. Croix |
| --- | --- | --- | --- |
| Tier 1:
Target (Actual) Sample size  | 30 
(30) | 8
(5) | 13
(13) |
| Tier 2:
Target (Actual) Sample size | 20
(22) | 7
(10) | 7
(7) |
| Tier 3:
Target (Actual) Sample size | 10
(8) | 5
(5) | N/A
(N/A) |

## Capital Investment

| Variable | PR Tier 1
(1-40 Traps) | PR Tier 2
(41-100 Traps) | PR Tier 3
(101+ Traps)  |
| --- | --- | --- | --- |
| Vessel age
(years) |  15.9       
(1.7) |  18.6     
(2.05) |  15.2       (1.6) |
| Vessel length
(ft) |  19.8       
(0.6) |  24.3      
(0.74) |  |
| Vessel value
($) |  5,689.6     (1,096.2) |  18,809   
(2,336.9)  |  |
| Loan on vessel and gear
($) |  83.3     
(78.3) |  1,590.2     (649.4) |  |