Econometric Modelling of the World Tradein Groundfish

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series E: Applied SCiences - Vol. 201

Econometric Modelling of the World Trade in Groundfish edited by

William E. Schrank and

NoelRoy Department of Economics, Memorial University of Newfoundland, 8t. John's, Newfoundland, Canada

Springer Science+Business Media, B.V.

Proceedings of the NATO Advanced Research Workshop on Econometric Modelling of the World Trade in Groundfish St. John's, Newfoundland, Canada 14-18 August 1989

L1brary of Congress Cataloglng-in-Publicatlon Data

Econometric modelllng of the world trade In groundflsh I edited by WIllIam E. Schrank and NoeI Roy.

p. cm. -- <NATO ASI serles. Serles E, Applled sclences ; voI. 201)

·Publlshed In cooperat Ion wlth the NATO SClentific Affairs Dlvls ion.·

Inc 1 udes 1 ndex. ISBN 978-94-0lO-5393-8 ISBN 978-94-011-3160-5 (eBook) DOI lO.lO07/978-94-011-3160-5 1. Fish trade--Econometrlc models--Congresses. I. Schrank,

William E., 1940- II. Roy, NoeI. III. North Atlantic Treaty Organizatlon. SClentlflc Affalrs D,v,s,on. IV. Ser les: NATO ASI Serles. Serles E. Aoolled SClences : no. 201. HD9450.5.E27 1991 382' .43753--dc20 91-17458

ISBN 978-94-010-5393-8

Printed on acid-free paper

AII Rights Reserved © 1991 Springer Science+Business Media Dordrecht Originally published by Kluwer Academic Publishers in 1991 Softcover reprint of the hardcover 1 st edition 1991

CIP

No part of the material protecled by this copyright notice may be reproduced or utilized in any form or by any means, electronic or mechanical, including photo­copying, recording or by any information storage and retrieval system, without written permission from the copyright owner.

TABLE OF CONTENTS

Preface

List of Participants

ix

xi

1. W.E. Schrank and RL. Mazany"The Econometric Modelling of the World TrademGroundfish: Imroduaion" 1

2. N. Roy and D.F. Strong"Imroductory Remarks" 7

PART I Demand Analysis

3. N. Roy, E. Tsoa, and W.E. Schrank"What Do Statistical Demand Curves :>how!:A Mome Carlo Study of the Effects of SingleEquation Estimation of Groundfish Demand Funaions" . . . . . . . . . . . . . . . . . . . . . 13

4. W.E. Schrank and N. Roy"Can the Literature ofMarket DelineationHelp Define Groundfish Markets?" 47

5. E. Tsoa, N. Roy and W.E. Schrank"Alternative Approaches to the EconometricEstimation ofDemand Funaions" 55

PART II Supply Analysis

6. I. Arnarson and RS. Johnston"Modelling Groundfish Supply: A LinearProgramming Approach with Application to Newfoundland" 73

7. RL. Mazany and E. Tsoa"Modelling Supply: The Application ofa Multi-OutputMulti-Input Model to the Atlantic Canada Groundfishery" 83

vi

8. T. Felixson"Modelling Cod Supply: An Econometric Approachwith Application to Iceland and Canada" 95

9. N. Roy and J.M. Gates"Supply Modelling: A Synthesis" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 107

PART III Institutional Factors in Trade Modelling

10. R.S. Johnston, I. Arnarson, and J. Zieziula"Extended Fishery Jurisdiction and the Internationalizationof Groundfish Markets and Market Channels" . . . . . . . . . . . . . . . . . . . . . . . . . .. 125

11. J.M. Gates and N. Roy"Methods of Incorporating Institutional andEconomic Infonnation in an Economic Model" 139

PART IV An Overview of Supply/Demand Modelling

12. D. J. Brooks"Modelling Natural Resource Commodity Supply,Demand and Trade: Experiences with Forest Products" 149

PART V Institutional Structure: Countries of North America

13. N. Cachero"Market Structure: The US-Eastern Canadian Cod Trade" 161

14. SA. Conover"Overview of the Alaska Groundfish Industry" 167

15. M. Geirsson and T. Trondsen"Frozen Cod Products in the US Market" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 189

16. D. Georgianna, 1. Dirlam, and S.D.H. Wang"Recent Developments in the Northeast US Fishing Industry" . . . . . . . . . . . . . . . . 211

17. S.S. Hanna"The Supply of Pacific us Groundfish:Harvesting, Processing, Marketing and Regulation" 225

18. K. Sullivan"Canadian Joint Venture Arrangements with the Soviet Union" 241

vii

PART VI Institutional Structure: Countries of Latin America

19. RJo Cerda and E. Anderson"Overviewof the Chilean Groundfish Industry:Landing, Processing and Marketing" .... 0 ••••••• 0 0 •••••• 0 •••••••• 0 0 •• 255

20. C.G. Murillo-Martinez"Central American and Caribbean Fisheries: An Overviewof Current Activity, Trends and Import Demand" . 0 •••••••••••••••••••••• 285

PART VII Institutional Structure: Countries of Europe

21. P. Andersen and T.W. Jensen"The Danish Groundfish Industry" 0 ••••••••••••• 0 0 • • • • • • • • • 305

22. E. Duzgunes and H. Karacam"A General Review of Institutional Factors andMarketing Channels in the Fisheries of Turkey" '" 0 0 ••••••••••• 0 •••••••• 329

23. T. Felixson"The Icelandic Groundfish Industry and Trade: An Overview" 0 0 •••••••••• 0 • 347

24. R. Hannesson"The Norwegian Supply of Groundfish with Emphasison the Supply of Frozen Fillets to the United States" . 0 0 0 0 ••• 0 ••••••••• 0 0 0 0 355

25. E. Oakeshott"UK Groundfish Markets: An Overview" 0 ••• 0 •••••••• 0 0 0 0 •••• 363

26. R. O'Connor"Institutional Factors and Marketing Channelsthat Affect the Fishing Industry in Ireland" ... 0 ••• 0 ••• 0 •••• 0 ••••••• 0 •••• 371

27. W. Smit"The Flatfish Industry in the Netherlands:Supply, Processing and Marketing" 0 ••••• 0 •• 0 •••••••• 0 0 ••• 0 0 •• 0 • 0 0 •••• 385

PART VIII Institutional Structure: Countries of Asia and Australasia

28. C.E. Atkinson"Japanese Markets for Groundfish" 0 •••••• 0 •••••••••••••••••• 395

29. CoCo Chen"Production, Consumption, International Trade andMarketing Channels: Groundfish in Taiwan, Republic of China" 0 •••• 0 0 •• 0 0 • 435

viii

30. S.K. Shin"An Overview of the Korean Fishery:Production and Trade of Groundfish" 477

31. P.R. Roberts"New Zealand Fishery: Background.Management Issues. and Groundfish Data" 487

PART IX Conclusions

32. D.G. Cross"A Summary Review ofFisheries Data and Their Shoncomings" . . . . . . . . . . . . 509

33. W.E. Schrank"Data Problems and a Proposalfor a World Fisheries Data Centre" 517

34. G. Pontecorvo"Concluding Remarks" 521

References .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529

Index 547

PREFACE

This conference brought together an international group of fisheries economists fromacademia, business, government, and inter-governmental agencies, to consider a coordinatedproject to build an econometric model of the world trade in groundfish. A number of theconference participants had just spent up to six weeks at Memorial University ofNewfoundland working and preparing papers on the project. This volume presents thepapers that these scholars produced, plus additional papers prepared by other conferenceparticipants. In addition, various lectures and discussions which were transcribed from tapesmade of the proceedings are included.The introductory essay explains the genesis of the conference, describes the approach

taken to modelling the groundfish trade, very briefly summarizes the technical papers, anddescribes future plans. The project is continuing as planned, and a second conference washeld in St. John's in August 1990.The conference was a NATO Advanced Research Workshop and we wish to thank the

Scientific Affairs Division of NATO for their financial support. Additional financial supportwas received from the Canadian Centre for Fisheries Innovation in St. John's, theDepartment of Fisheries and Oceans of the Government of Canada, the Department ofFisheries of the Government of Newfoundland and Labrador, Memorial University ofNewfoundland and Air Nova; we acknowledge with appreciation their help.We also wish to thank Dr. D.F. Strong, Vice-President (Academic) of Memorial

University who offered crucial support at critical stages leading up to the conference andMs Ann Shriver of the International Institute for Fisheries Economics and Trade forpreparing the transcripts. We join Drs. Mazany and Tsoa in thanking Ms Blanca Skoda andMr. Paul Parsons for their excellent research assistance on our papers. Special thanks aredue to Ms Elaine Pitcher of Memorial University who cheerfully and diligently prepared thetypescript for publication under difficult circumstances, and to the staff of the fisheriesresearch group of the Department of Economics at Memorial University, Ms Skoda, MsSherry Green, and Mr. Parsons, who bore the burden of making the conference runsmoothly. They succeeded admirably.

IX

BackRow:AndersenP.,GeorgiannaD.,AbgrallJ-F.,DirlamJ.,GatesJ.,RoyN.,ArnarsonI.,CerdaR.,BrooksD.,TsoaE.,WangS.

MiddleRow:JohnstonR.,AndersonR.,CacheroN.,OakeshottE.,ValssonB.,Hanna

S.,SkodaB.,RobertsP.,SchmidtC-c.,Salapare

S.,

Conover

S.,PontecorvoG.,SchrankW.,ParsonsP.

FrontRow:TrondsenT.,MazanyL.,ChenC-c.,Cruz

S.,PalssonH.,CollinsJ.,ShinS-K.,Murilloc.,FelixsonT.,SmitW.,Atkinsonc.,

O'ConnorR.

PARTICIPANTS: Econometric Modelling of the World Trade in Groundflsh: Summer ModellingInstitute, June-August 1989; and NATO Advanced Research workshop, August 14­18, 1989, S1. John's, Newfoundland, Canada

Summer Modelling Institute

Mr. Ingolfur AmarsonAssistant Professor of EconomicsUniversity of TromsoDramsveien 201Postboks 3083, GulengN-9001 Tromso, Norway

Mr. Tryggvi FelixsonEconomistCentral Bank of IcelandReykjavik, Iceland

Dr. John GatesProfessor of Resource EconomicsUniversity of Rhode IslandLippitt HallKingston, Rhode Island, United States02881

Dr. Richard S. JohnstonProfessor of Agricultural and ResourceEconomicsOregon State UniversityBallard Extension Hall 216Corvallis, Oregon, United States97331-1641

Dr. Leigh MazanyAssistant Professor of EconomicsDalhousie UniversityHalifax, Nova Scotia, CanadaB3H 315

Mr. Evelyn OakeshottFisheries EconomistDepartment of Agricultural and Fisheries forScotlandPentland House, 47 Robb's LaneEdinburgh, ScotlandEH141TW

Dr. Noel RoyProfessor of EconomicsMemorial University of NewfoundlandSt. John's, Newfoundland, CanadaA1C 5S7

Dr. William E. SchrankProfessor of EconomicsMemorial University of NewfoundlandS1. John's, Newfoundland, CanadaA1C 5S7

Dr. Eugene TsoaProfessor of EconomicsMemorial University of NewfoundlandS1. John's, Newfoundland, CanadaA1C 5S7

NATO Advanced Research Workshop

Mr. Jean-Francois AbgrallUniversit6 du Qu6bec ~ Rimouski300 Avenue de UrsulinesRimouski, Qu6bec, Canada

XI

Mr. Peder AndersenDanish Ministry of FisheriesStormgade 2DK-1470 Copenhagen, Denmark

xii

*Mr. Eduardo AndersonSchool of Marine SciencesCatholic University of ValparaisoP.O. Box 4059, Valparaiso, Chile

Mr. Clinton AtkinsonFisheries Consultant and Advisor8000 Crest Drive NortheastSeattle, Washington, United States981115

Dr. David BrooksResearch ForesterUS Forest Service3200 SW Jefferson WayCorvallis, Oregon, United States97331

Mr. Nilo CacheroVice-PresidentCanadian Association of Fish Exporters(CAFE)77 Metcalfe StreetOttawa, Ontario, CanadaKIT 51.6

Dr. Rene CerdaProfessor of Fisheries EconomicsFacultad de Recursos NaturalesUniversidad Catolica de ValparaisoAvenida Brasil 2950CasiIIa 4059Valparaiso, Chile

Dr. Chin-Chun ChenEconomistCouncil of Agriculture, Republic of ChinaExecutive Yuan37 Nanhai RoadTaipei, Taiwan10728

Mr. John CollinsActing Chief, Economic Analysis DivisionDepartment of Fisheries and OceansSt. John's, Newfoundland, Canada

Ms Shawneen ConoverResearch AssociateUniversity of Alaska AnchorageSuite 120,4201 Tudor Centre DriveAnchorage, Alaska, United States99508

*Mr. David CrossAdministratorStatistical Office of the EuropeanCommunitiesAgricultural Product and FisheryStatisticsBatiment Jean MonnetB.P.1907L2920 Luxembourg (Grand Duchy)

Dr. Salviano CruzPlaneamento RegionalSeminarios de Planeamento de EmpresusRevista de Pesquisas Economico-SociaisEstudos Economico-SociaisR. Duque de Palmela, 27-4/E1200 Lisbon, Portugal

Dr. Joel DirlamProfessor of Economics (Emeritus)330 Biscuit City RoadKingston, Rhode Island, United States02881

Mr. Michael DoyleEconomist. Planning Services DivisionDepartment of Fisheries51. John's, Newfoundland. CanadaAlB 4J6

*Dr. Ertug DuzgunesAssistant ProfessorHead of Section: Fish Culture andHydrobiologyKTU Higher School of Marine Science andTechnology61080 Trabzon, Turkey

*Mr. Magni GeirssonNorwegian College of Fisheries ScienceUniversity of TromsoDramsveien 201Postboks 3083, GulengN-9001 Tromso, Norway

Dr. Dan GeorgiannaProfessor of EconomicsSoutheastern Massacuhusetts UniversityNorth Dartmouth,Massachusetts, United States02747

Dr. Susan HannaAssistant Professor of Agricultural andResource EconomicsOregon State UniversityBallard Extension Hall 216Corvallis, Oregon, United States97331-3601

*Dr. Rognvaldur HannessonProfessor, Institute of Fisheries EconomicsNorwegian School of Economics andBusiness AdministrationHelleveien 30N-5035 Bergen-Sandviken, Norway

*Mr. Torben Wind JensenThe Danish Ministry of FisheriesStormgade 21470 Kobenhavn K., Denmark

*Dr. Hikmet KaracamKTU Higher School of Marine Sciences andTechnology61080 Trabzon, Turkey

Mr. Carlos Murillo (Permanent Residence:Costa Rica)Graduate Student of Agricultural andResource EconomicsOregon State UniversityBallard Extension Hall 216Corvallis, Oregon, United States97331-1641

xiii

Dr. Robert O'ConnorConsultantThe Economic and Social Research Institute4 Burlington RoadDublin 4, Ireland

Mr. Halldor PalssonAnalyst, Economic and Statistic DivisionDepartment of Fisheries and OceansOttawa, Ontario, CanadaKlAOE6

Dr. Giulio PontecorvoGraduate School of BusinessColumbia University601 Uris HallNew York, New York, United States10027

Mr. Paul RobertsResearch officer, EconomicsNew Zealand Fishing Industry Board74 Cambridge TCEPrivate Bag, Manners StreetWellington, New Zealand

Mr. Sennen SalapareInternational Trade SpecialistNational Marine Fisheries Service1335 East-West HighwaySilver Spring, Maryland, United States20910

Mr. Carl-Christian SchmidtPrincipal Administrator, OECD2 Rue Andre-PascalParis, France75775

Mr. Soung-Kook Shin (PermanentResidence: South Korea)Graduate Student of Agricultural andResource EconomicsOregon State UniversityBallard Extension Hall 216Corvallis, Oregon, United States97331-1641

xiv

Mr. Wilhelm SmitHead of Fisheries Economics DepartmentAgricultural Economics Research InstituteConradkade 175 2517 CLPostbus 29703 2502 LSThe Hague, Netherlands

Mr. Karl SullivanWestern Co-ordinatorsP.O. Box 66, Station CSt. John's, Newfoundland, CanadaA1C 5H5

Dr. Trobjorn TrondsenAssociate Professor of MarketingUniversity of TromsoDramsveien 201Postboks 3083, GulengN-9001 Tromso, Norway

Mr. Benedikt ValssonEconomistNational Economic InstituteReykjavik, Iceland

Dr. Stanley WangBranch Chief, National Marine FisheriesServiceUnited States Department of CommerceOne Blackburn DriveGloucester, Massachusetts, United States01930

NOTE: Asterisks indicate individuals who contributed to the Proceedings but did not attend theworkshop.