Economic benefits of FAD set limits throughout the supply chain / by Francisco Blaha

the economic benefits for FAD sonar buoys makers are undisputed

the economic benefits for FAD sonar buoys makers are undisputed

In my quest keep learning more about FADs, I came across this very interesting new paper that tackles the issue from the economist perspectives, and is authored by 3 colleagues  I have came across the Pacific from time to time.

Fisheries economists are an interesting and very diverse tribe in the fisheries world, and in particular among consultants. Over the years most of the ones I have meet, have opened my eyes to new ways to see some aspects of fisheries work from angles I didn't see before (and I love when that happens), while with others I wonder if they actually understand anything about fisheries. Yet I’m sure these latest ones, see me as an arrogant brut that does not know anything of economics!

But from being a fisherman I know that “everything has advantages and disadvantages” and any measure is a compromise, furthermore people will by nature “rig any game” based of either beneficial (as seen from the interested party) incentives or disincentives. And is in the quantification and qualification of those areas where I have learned the most from the good fisheries economists.   

The paper’s abstract sets the scene quite clearly.  

Fish aggregating devices (FADs) have over recent decades, become an integral tool in commercial tuna fisheries due to their increased efficiency over free school catches. Technological development has further aided in their increased usage and reliance by many fleets. The negative consequences of FADs include higher rates of non- target species such as juvenile bigeye and yellowfin tunas. Management of this negative consequence has to date been undertaken by spatial and/or temporal closures to fishing. These closures can result in an economic burden to fishermen via reduced catch rates, coastal states trying to sell access rights to fishing grounds at the same rate with no closure in place, and canneries through variability in supply and subsequent volatility in market prices. This paper examines the economic benefits of replacing closures with FAD set limits which place a hard limit on the total number of FAD sets that can be made in any given period. The analysis indicates that economic gains can be achieved at all levels of the supply chain from the fishing vessel through to the consumer.

As always, please read the original, I just quote here the discussion and conclusions, and at the end I put my 5 cents, on an area that I never seen involved as a variable on most economic papers I read.


Outside of a direct quota system, set limits represent arguably the best option for managing the catch of small and juvenile tunas and other species in the purse seine fishery. This is essentially due to the effective capping of effort, restricting the potential for effort shift. FAD set limits therefore represent a more precise management approach than closures in terms of achieving management objectives such as restricting the impacts on small and juvenile bigeye and yellowfin tuna.

However, more precise management typically also requires more management resources to effectively implement. While there may be reluctance to implement such additional resources, the economic benefits across all stakeholders may well justify the additional expense within RFMOs.

One of the greatest challenges with FAD management is that the negative impacts from FAD usage on juvenile bigeye and other associated species are not felt within the purse seine fleets that utilise FADs.

Consequently, a seasonal closure on FADs reduces profits for purse seiners, but most of the benefit of such a measure goes to other fleets that target the more valuable adult bigeye and yellowfin. The incidental catch of these tunas in the purse seine fishery utilising FADs has led to a more rapid reduction in stock size and a decrease in maximum sustainable yield. The purse seine fleets that rely most heavily on FADs generally target skipjack, as opposed to bigeye and yellowfin, and therefore do not feel the negative impacts of decreasing yields. Calls by the longline industry, dominated by developed distant water fleets, for a reduction in FADs, have been met with significant resistance from fleets and coastal states that rely on FADs for skipjack catch. While closure periods clearly represent a burden to purse seine fisheries, moving to the higher precision management of set limits represents a lesser degree of economic burden.

The implementation of FAD set limits with scarcity values will likely raise the political minefield of allocations. This becomes more complex due to the spatial variations in FAD usage across RFMO areas due to both fish behaviour and fleet preference.

However, some RFMOs already use allocation systems within both catch and effort contexts and thus these systems could also be modified to produce an agreed FAD set allocation.

FAD set limits have economic benefits over closures across almost all stakeholders in the supply chain. From allowing flexibility to operators of purse seine vessels through to potentially less volatile market conditions and the opportunity for increased economic returns to coastal states. FAD set limits also result in economic benefits for the longline sector through providing a more effective cap on the purse seine impacts to bigeye and yellowfin stocks. Indeed, when assessing the potential impacts of various FAD closure options, stock assessment models incorrectly assume that the closures operate as effective FAD set limits such that a 1-month closure represents an annual reduction in FAD sets by 1/12th. This has resulted in less realistic projections since the shifting of effort to outside the closures are not accounted for. Moving to a FAD set limit will therefore likely also bring a higher level of confidence to stock status projections.

Economic benefits of FAD set limits extend from the flexibility afforded the fishing company to be able to pick and choose when to set on FADs, a decrease in reluctance to purchase fishing access days and an increase in the stability of the market price. Assigning a number to FAD sets places a hard limit on that specific type of fishing effort and thus assigns a value to the permit to set on a FAD. This scarcity value may then potentially be traded amongst fleets or vessels or amongst coastal states, creating another market mechanism for income generation. This in turn creates economic incentives for some fishing vessels to avoid FADs. In areas such as the WCPO, set allocations could also be bundled with access agreements such the PNA's VDS. This however could have a disproportionate effect on the VDS if the rents from trade don't go back to the fishing fleet. The added value from the tradeable FAD set limits could be offset against the value of the access fee. Further economic modelling will be required to better understand those trade-offs.

A hard limit on FAD sets may also drive increased efficiency within the purse seine industry. With increasing use of technology in FAD fishing, most FADs are now equipped with GPS beacons, making the FADs easy to find, while echosounders provide the ability to estimate fish biomass underneath the FAD. The implementation of a limit in the number of FAD sets will introduce a scarcity value and incentivise vessels to make the most of each set, only travelling to and setting on FADs with a decent size school of fish underneath.


Closure periods to limit the adverse impacts of FAD fishing represents an imprecise management measure that while simple to implement, can be easily circumvented via effort shift outside the closures.

Moving to the more precise management measure of FAD set limits has both economical and biological benefits and with FAD technology rapidly developing, the implementation of precision management is no longer beyond realistic feasibility.


My 5 cents: one of the issues I don't see reflected normally is that whatever decision is taken there is a associated cost of compliance… our team in the Marshalls spends a lot of effort trying to assess if sets during FAD closure are not associated to FADs… yet I wonder how they expect us to be dealing with controlling a maximum number of FADs for each vessel, when we don’t have the capacity to associate independently FADs to one vessel, even less to shared ones by syndicate, company or just masters that are friends. There are ways to associate a register a FAD signal to a vessel and use VMS to link proximity… but we still depend of the FAD owner to actually register the FAD… if they don’t how we know?. One could try to “force” the providers to register all FAD the sell to FFA or PNA, yet good luck with that.

To rely on Observers to do FAD compliance work is a minefield that exposes them to even further pressure. These “compliance options” costs should be part of the equation too.

A further option I would like to see analysed is the pros and cons of a full closure of the fishery as the they do on other RFMOs (3 months). Lots of vessels do voluntarily “tie up” during FAD closure at the WCPFO as they don’t make money from FAD free fishing only, others burn their subsidies during this time (I was told Chinese vessels that are part of a MSC certification get 20% increase in fuel subsidies) or work at a loss just to be there, because the competitors are.

And here is a perverse incentive, because the FADs still out there, is just you cannot use them... so you been over 3 weeks out and only have 1/3 of your boat full... your income (captain and crew are on catch shares) depends on bringing more fish, and you can see that one of the FADs is full of fish... the temptation is really high to either try to bribe the observer or cheat by  playing with different ways to make a FAD set look “FAD free” (maybe a topic for another post 😉)

So there is a opportunity to make FAD closure a “Fishery closure” without much fuss... And yes while there are to be associated costs in terms of “revenue” loss for states during that closure (i.e. port usage and fees to a point, since many of these vessels still need ports for refit, maintenance, services to vessels, etc) but are also chances to used that “breathing time” to re-focus work, do upgrades, do training, meetings, …

I believe that people think that vessels (and institutions) can work “maintenance less”, but I don't think this is necessarily good (or economically efficient), so… while closures do have costs, there can be “non tangible” gains associated to them that normally I don't see usually quantified and/or qualified.


As I said before, I’m always surprised by the quality of my readers! and here is just and example of this: A colleague I admire a lot, yet wishes to remain anonymous as he does not want his opinions to be linked to the institution he works for, raised two great points on a mail after reading this post, I quote them here:

  • Avoiding night setting (i.e. starting a set before the sun is up when it is difficult for the observer to see what is going on, and when it is unlikely that a free school has been spotted) helps the observer, but this has never had any traction at WCPFC. 

  • The main point of restricting the number of FAD sets is to restrict the relatively high catch of non-target species and small tuna. And the catch composition of FAD and free-school sets is sufficiently different that SPC can pretty accurately work out which sets are free-school and FAD sets just by looking at the proportion of different species in the catch from each set. We now have 100% observer coverage and observers sampling each set. Which suggests to me that we might be able to stop restricting the use of FADs entirely, and just limit the catch and landing of more than a certain amount of non-target and small fish – which is the ultimate aim of the FAD restriction anyway – and leave it up to skippers to decide how many FAD sets they want to make. It would be up to them to decide how much risk of going over their limit of FAD associated species they wanted to take, by adjusting their ratio of FAD sets to free-school sets. (This is quite possibly a silly idea – others may already have ruled it out for reasons I haven’t thought of yet)

I personally think that this two contributions are gold, in particularly as we advance on issues of data integration and real time data access.