Marine Fisheries Review 1991: Vol 53 Iss 2

37 Pages·1991·10.6 MB·English

, Marine Fisheries
ow ™,% ,
™“
aé J/REVEW
*
% 1991
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ro) Stares of National Oceanic and Atmospheric Administration * National Marine Fisheries Service
Sebastes
Marine Fisheries
On the cover, top to
bottom: Yelloweye rock-
fish, Sebastes ruberrimus;
splitnose rockfish, S. diplo-
proa; and rosethorn rockfish,
S. helvomaculatus. Photos by and
courtesy of Donald E. Kramer, Uni-
versity of Alaska, Anchorage, Alaska.
53(2), 1991
Articles
Simulated Economic Impact of TED Joy Clark, Wade Griffin,
Regulations on Selected Vessels in the Texas Shrimp Fishery Jerry Clark, and James Richardson
The By-catch From the Artisanal
Shrimp Trawl Fishery, Gulf of Paria, Trinidad Vishwanie Maharaj and Conrad Recksiek 9
Construction and Operation of a Two-place Diver’s Sled Ian K. Workman and John W. Watson 16
Maturity and Fecundity in the
Rockfishes, Sebastes spp., a Review Lewis Haldorson and Milton Love 25
U.S. DEPARTMENT OF The Marine Fisheries Review (ISSN 0090-1830) the Director of the Office of Management and
is published quarterly by the Scientific Publica- Budget.
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Simulated Economic Impact of TED Regulations
on Selected Vessels in the Texas Shrimp Fishery
JOY CLARK, WADE GRIFFIN, JERRY CLARK, and JAMES RICHARDSON
Introduction of a Turtle Excluder Device (TED) it was called a Turtle Excluder Device
which, when placed in the shrimp trawl, (TED) (Watson et al., 1985).
Shrimp fishermen trawling in the Gulf prevents turtle mortality. However, the Allseaturtles are listed as endangered
of Mexico and the south Atlantic inadver- shrimp industry has been concerned or threatened by the Endangered Species
tently capture and kill sea turtles which about the possible impact of the TED Act. Under this Act it is illegal to import,
are classified as endangered species. Re- upon vessel shrimp catch. export, take, possess, sell, or transport
cent Federal legislation requires the use This analysis was designed to address endangered species without a permit
this issue by evaluating the impact of the unless these activities are specifically
Joy Clark is with the Economics Department, TED regulations upon the economic allowed by regulation (USDC, 1978;
Auburn University at Montgomery, Montgomery, viability of representative shrimp vessels Yaffee, 1982). Five species of sea turtles
AL 36193-0401. Wade Griffin and James Richard-
son are with the Agricultural Economics Depart- in the Texas shrimp fishery. are caught in shrimp trawls in the waters
ment, Texas A&M University, College Station, TX This analysis, however, does not ex- of the southeast United States. They are
77843. Jerry Clark was with Texas Parks and
Wildlife and Fisheries, P.O. Box 98000, Baton plicitly consider the interactive aspects of the loggerhead, Caretta caretta; Kemp’s
Rouge, LA 70898-9000. Views or opinions ex- the shrimp fishery, both among the ves- ridley ,Le pidochelys kempi; green, Che-
pressed or implied are those of the authors and do sels and between the vessel catch and lonia mydas; leatherback, Dermochelys
not necessarily reflect the position of the National
Marine Fisheries Service, NOAA. remaining shrimp stock. An implicit coriacea; and hawksbill, Eretmochelys
assumption of this analysis is that the in- imbricata (Dean and Steinbach, 1981;
dividual vessel’s fishing behavior would Anonymous'). In 1978, when the green
not change as a result of the TED regula- and loggerhead sea turtles were listed
ABSTRACT—Shrimp fishermen trawling in tions, in response to either increases or under the Endangered Species Act (the
the Gulf of Mexico and south Atlantic in- decreases in catch per tow. Rather, this other three species were listed in earlier
advertently capture and kill sea turtles which analysis is based on the resultant impact rulemakings), the problem of incidental
are classified as endangered species. Recent on the catch of the representative vessel take of these species in the shrimp fishery
legislation requires the use of a Turtle Ex-
in the Texas shrimp fishery given all the was addressed in a Final Environmental
cluder Device (TED) which, when in place in
the shrimp trawl, reduces sea turtle mortal- interactive effects. That is, after all other Impact Statement (USDC, 1978). Atthat
ity. The impact ofthe TED on shrimp produc- considerations, if the vessel catch has time, methods to reduce the incidental
tion is not known. This intermediate analysis changed, what is the impact on the eco- take were not available.
of the TED regulations using an annual firm
nomic viability of the vessel? Finally, this In 1983, NMFS began a formal pro-
level simulation model indicated that the
average Texas shrimp vessel hada low prob- is an intermediate analysis of the impact gram toencourage voluntary adoption of
ability of being an economic success before of the TED regulations. Future analysis TED’s by the shrimp industry. Through
regulations were enacted. An assumption that should be directed at examining the inter- the voluntary program, TED’s were con-
the TED regulations resulted in decreased active effects within the fishery. structed under contract and distributed to
production aggravated this condition and the
shrimpers who agreed touse them. Modi-
change in Ending Net Worth and Net Present
History
Value of Ending Net Worth before and after fication and evaluation of the TED con-
a TED was placed in the net was significant In 1981 the National Marine Fisheries tinued, resulting ina smaller, lighter, col-
at the 5 percent level. Service (NMFS), as the result of an ongo- lapsible NMFS TED, as well as other
However, the difference in the Internal Rate
ing research and development program, non-NMFS TED’s. Despite numerous
of Return for the TED and non-TED simula-
tions was not significant unless the TED introduced a shrimping gear design extension programs, publicity and train-
caused a substantial change in catch. This aimed at reducing the capture of sea
analysis did not allow for interactions between turtles. This device would be sewn into ‘Anonymous. 1983. Environmental assessment of
the fishermen in the shrimp industry, an ashrimp trawl (Fig. 1) and was designed a program to reduce the incidental take of sea turtles
assumption which could significantly alter the to provide a way for sea turtles to exit the by the commercial shrimp fleet in the southeast
impact of TED use on the catch and earnings United State. U.S. Dep. Commer., NOAA, NMFS
of the individual shrimp vessel. trawl. Because of its proposed function, Southeast Reg. Off., St. Petersburg, Fla., 20 p.
53(2), 1991
Fla., prior to 1988 (Table 1) identified
four TED’s which satisfactorily excluded
turtles from commercial shrimp nets: 1)
The standard 30-inch opening and 25-
inch opening NMFS TED’s, 2) the
“*Georgia’’ TED, 3) the ‘‘Cameron’’
TED, and4) the ‘‘Matagorda Bay’’ TED.
Inthe time period subsequent to 1988, ad-
ditional devices have been approved but
arq ae they are not considered as part of this
\\ 4
analysis.
The NMFS and Cameron TED’s are
three-dimensional, implying that a sec-
tion of the net must be removed to install
the device. The NMFS devices are rec-
tangular in shape whereas the Cameron
TED iscircular (Fig. 2). The Georgia and
Figure 1.—Position of the TED in the shrimp trawl. Matagorda TED’s are two-dimensional
and are sewn directly into the net. The
Georgia TED has a long oval shape with
parallel bars creating a barrier across the
ing activities, the voluntary program was the TED March though November, and surface of the device. The Matagorda
not effective (Anonymous?). As of late Atlantic vessels from May through Aug- TED is rectangular and also has parallel
1986, less than 3 percent of the shrimp ust. Inshore regulations have similar bars which function as a barrier to entry
fleet had used or continued to use a TED seasonal requirements but all shrimp intothecodend of the trawl (Fig. 3). The
(Oravetz?). trawls must either use a TED or limit tow positioning of the opening in the trawl,
Specific regulations concerning use of time to 90 minutes. which allows turtles and other large
TED’s were developed in 1986 during organisms to escape, varies by TED. The
Turtle Excluder Devices
mediation between members of the south- NMFS and the Matagorda devices have
eastern U.S. shrimp industry and inter- Testing conducted off Cape Canaveral, top openings. The Georgia TED has a
ested members of the environmental
community. Proposed regulations were
published in the March 1987 Federal
Register and final regulations were pub-
lished in the July 1987 Federal Register. Table 1.—S Dey voif ces.te Ssti ng cond Texd t footnotes 4, 5, 6,bi li8ti,es and o1f0f .o ur Turtle Excluder
As summarized by the National Marine
Turtles Shrimp
Fisheries Service (Anonymous%), as of 1 No. caught (no.) catch (Ib.) By-catch (Ib.)
May 1989 in offshore waters, use of the Test and of
type of TED tows Control TED Control TED Control TED
TED was to be required of all vessels
measuring 25 feet or longer. For vessels CapNeM FCSa naTvEeDr al tests’ 10 14 26.00 24.00 7,488 4,164
of less than 25 feet in length, the option Cameron TED 10 21 26.75 26.50 4,551 3,026
of towing 90 minutes was available. GMeaotraggioar dTaE DT ED 1100 1167 3113..7755 2197..5205 57,,727715 44,,031142
There are seasonal requirements by re-
North Carolina Sea Grant
gion, with Canaveral and southwest NMFS TED with
Florida vessels required to pull the TED 45° grid angle 8 6967 291 158°
NMFS TED with
year-round, Gulf vessels required to pull 37° gridangle 10 1,393 1,513 73.10
St. Simon’s Island
NMFS TED 18 158.00 175.38
2 Anonymous. 1986. Report from the turtle excluder Georgia TED 18 159.88 156.88
Matagorda TED 18 143.25 194.75
device workshop. U.S. Dep. Commer., NOAA, Cameron TED 18 175.88 200.75
NMFS, Southeast Fish. Cent. , Pascagoula, Miss.,
Texas testing*
3Chuck Oravetz, National Marine Fisheries Ser- Std. NMFS TED 49 3,073 3,127 =1 86.8
vice, NOAA, Southeast Regional Office, St. Peters- Mini NMFS TED 5 170 249 0
burg, Fla. Presentation at TED meetings in Georgia Jumper 14 753 793 29.6
Pascagoula, Miss., Oct. 1986.
‘Data recorded for 7 tows w/TED, while 10 tows were recorded for control.
*Anonymous. 1989. Summary of TED/tow time ?Measured as number of shrimp rather than pounds of shrimp caught.
regulation. U.S. Dep. Commer., NOAA, NMFS Measured in kg.
Southeast Reg. Off., St. Petersburg, Fla. 1 p. “By-catch measured in bushels.
Marine Fisheries Review
bottom opening and the Cameron TED
can be used with either a bottom or top
opening.
Meanwhile, TED development and
use has also been proceeding in other na-
tions. In July 1986, following a publicity
and coordination trip in March, a work-
shop and vessel demonstration was held
in Mazatlan, Mex. In Indonesia, over
1,000 TED’s are inuse inthe western area
on joint-venture Japanese vessels. Indo-
nesia has sent fishing gear experts for
training at the NMFS Harvesting Sys- Cameron TED
tems Division, Mississippi Laboratories
(USDC, 1985).
Georgia TED
Tests for Shrimp Exclusion
A
NMFS Tests gi¢
As early as September 1983, NMFS
was testing its new TED to determine the
impact on shrimp catch and by-catch
reduction. These tests were directed at
evaluating the TED design modifications
to improve finfish by-catch reduction
rates. The TED used in these experiments
was the original solid NMFS TED
(Anonymous). YU VY
NMFS continued testing and improv-
ing the TED, and additional tests were
made in 1984. From July through Sep- NMFS TED Matagorda TED
tember, the FRV Jeanie conducted tests
off Florida, Alabama, and Mississippi.
Initially, tests were directed at perfor- Figure 2.—General schematic of Figure 3.—General schematic of the
mance of several different designs of the Cameron TED (circular) and NMFS Georgia TED (circular) and Mata-
NMFS TED. These included: Fiberglass TED (rectangular). gorda TED (rectangular).
frame and PVC joints, steel-frame col-
lapsible, aluminum frame, and minia-
ture-frame TED. PVC joints of the alum-
North Carolina Test shrimp catch was measure in numbers of
inum-frame TED’s were found to be too
individual shrimp. Large quantities of
weak to withstand normal shrimping
The University of North Carolina Sea shrimp were not encountered, possibly
operations.
Grant program was also involved in test- due to the half-hour tow limitation. This
Other cruises were made to compare
ing shrimp and finfish retention rates of made it difficult to measure the impact on
shrimp retention rates of various TED’s
the various TED’s. In April and May shrimp catch.
vs. a control net without a TED. These
1986, twocruises were made aboard the InJuly 1986, under the auspices of the
cruises were done both day and night and
Carolina Coast (Table 1) (Anonymous’). University of North Carolina Sea Grant
incorporated different types of finfish
Ofthe two NMFS TED’s tested, the one Program, tests were conducted on the
deflectors (Hummer wire, typAe asnd H
with the 37° grid angle appeared to be ‘‘Georgia Jumper’’ (Anonymous®). A
and solid bar, type D) (Anonymous‘).
more effective at eliminating by-catch total of 24 tows were made by the Caro-
with nooverall loss of shrimp. Although lina Coast. Nineteen tows were com-
sAnonymous. 1983. Cruise Report for FRS by-catch was measured in kilograms, pared with a standard net and 5 tows were
OREGON II Cruise 137 - 9/6/83 - 9/21/83. Dep.
Commer., NOAA, NMFS Southeast Fish. Cent.,
Pascagoula, Miss., 4 p. 7Anonymous. 1986. Cruise Report for CARO- SAnonymous. 1986. Cruise Report for CARO-
Anonymous. 1984. Cruise reports for FRV LINA COAST Cruises: TED Testing - April 28-30, LINA COAST Cruise: TED Testing - July 14-18,
JEANIE. U.S. Dep. Commer., NOAA, NMFS 1986. Univ. N.C. Sea Grant, N.C. Mar. Resour. 1986. Univ. N.C. Sea Grant, N.C. Mar. Resour.
Southeast Fish. Cent., Pascagoula, Miss., 4 p. Cent., Atlantic Beach, N.C., 2 p. Cent., Atlantic Beach, N.C., 2 p.
53 (2), 1991
compared with the NMFS TED. Several Texas shrimp production (Graham!”). Tests off St. Simon’s Island, Ga., were
adjustments were made to the TED be- Many of the tows done in Texas were the only ones to use all four certified
fore it was operating properly. When all faulty, for one reason or another, and TED’s. The Georgia Jumper had a 1.9
19 tows were considered, the TED ex- thus, rigorous statistical analyses have percent production gain, whereas the
perienced an 18 percent shrimp loss, not been carried out (Table 1). The results other three TED’s showed losses (NMFS
however, for the 15 tows when the TED of this testing were useful in indicating the a 9.9 percent loss, Cameron a 12.4 per-
was operating properly there was only a learning process which must occur when cent loss, and Matagorda a 26.4 percent
9 percent shrimp loss. The tested TED a TED is introduced into the trawl. loss). However, only 18 tows were made
was very effective in reducing horseshoe with each TED.
crab, cannonball jellyfish, stingray, and TED Impacts The final series of tests, off the Texas
tunicate catches, with an overall by-catch coast, are reported here. Again, the vari-
When reviewing testing that has been
reduction of 24 percent (21 percent for the ety of vessels used and variation in equip-
completed on various TED’s, a wide
15towsabove). Forthe 5 tows against the ment, as well as change in location, made
range of results is apparent. Tests have
NMFS TED there was an overall 9 per- accurate interpretation of this data dif-
been conducted in different areas off the
cent shrimp loss with 40 percent less by- ficult. In addition, a report by Byrne, et.
eastern and southern U.S. coasts using
catch (Anonymous’). al.'4 argues that the experimental design
different types of vessels and different
ofthe TED testing does not allow specific
TED’s. The approach to testing is consis-
Georgia Test shrimp retention rates to be identified.
tent, i.e., simultaneous drags with acon-
The Marine Extension Service of the trol net and a TED net, but the gear and
Georgia Sea Grant College Program con- nets vary across all experiments. As a Economic Impact of TED’s
ducted tests off Georgia on the four result, itis not surprising to find that TED
TED’s tested at the Cape Canaveral chan- capabilities varied with the experiments. Method of Analysis
nel: Georgia Jumper, Cameron TED, Cape Canaveral testing certified four The intent of this analysis was to ex-
Matagorda TED, and NMFS Collapsible TED’s as possessing the capability of amine the impact of TED regulations on
TED without funnel. The purpose of ‘*kicking out”’ sea turtles from the trawl. the earning capacity of a single repre-
these tests was to determine shrimp ex- Further testing conducted by the NMFS sentative vessel. The method of analysis
clusion rates of TED’s (Anonymous!®). determined finfish reduction capability of is to simulate conditions that are repre-
A total of 72 double-rig trawls were the TED and helped in refinement of the sentative of a vessel in the Texas’ Gulf
conducted with 9 port and 9 starboard TED. Finfish reduction rates as high as shrimp fishery, using the firm-level
tows conducted with each of the four dif- 80 percent were recorded during the day simulation model FLEETSIM, under the
ferent TED’s (Table 1). Sampling was although night reduction rates were proposed TED regulations (Clark et
conducted 3-4 miles east of the south por- lower. There was no significant reduc- al'5), FLEETSIM is a firm level, recur-
tion of St. Simon’s Island, Ga. , in 30 feet tion in shrimp catch during these tests sive, simulation model which simulates
of water. The Georgia Jumper hada 1.9 (Anonymous!3). the annual production, costs, and income
percent gain compared with a standard Testing by the University of North aspects ofa fleet, by vessel, over a multi-
trawl without a TED. The NMFS TED Carolina Sea Grant program resulted in year planning horizon.
hada9.9 percent loss, the Cameron TED extreme values for average shrimp loss FLEETSIM is capable of simulating a
a 12.4 percent loss, and the Matagorda (58 percent) over all tests. The TED was hypothetical fleet for 1-10 years. The
TED a 26.4 percent loss (Anonymous!!). mounted in the net at a45° angle; subse- model recursively simulates a typical
quent North Carolina testing showed this fleet by using the ending financial posi-
Texas Test to be an inappropriate angle. In addition, tion for year one as the beginning position
Tests with the four TED’s presently the results were for experiments where for the second year, and so on. FLEET-
certified for use were conducted in Texas the total number of shrimp encountered SIM does not include an overall objective
waters using both bay and Gulf vessels to were small, and this makes any analysis function to be optimize, but rather ana-
determine the impact of TED devices on suspect. Further testing with a37° angle lyzes the outcome of a given set of input
for TED installation gave a shrimp in- data and assumptions for a typical fleet.
crease of 8.6 percent, and more shrimp Accounting equations and identities con-
*Anonymous. 1986. Cruise Report for CARO- were consistently encountered during
LINA COAST Cruises: TED Testing - April 28-30,
1986. Univ. N.C. Sea Grant, N.C. Mar. Resour. these experiments. '4R, Byrne, W. Griffin, and J. Clark. 1987. Four
Cent., Atlantic Beach, N.C., 2 p. TED’s analysis of variance. Nat. Resour. Work.
‘Anonymous. 1987. Preliminary results from Pap. Ser. Nat. Resour. Workgroup, Dep. Agric.
shrimp retention studies on four different turtle ex- "G. Graham. 1986. Summary of TED cruise re- Econ., Tex. A&M Univ., Coll. Sta., 15 p.
cluder devices off the Georgia Coast. Univ. Ga. Sea ports #1 - #10 and individual cruise accountings. '5J._L. Clark, J. W. Richardson, and C. J. Nixon.
Grant, Mar. Ext. Serv., Brunswick, 15 p. Tex. Agric. Ext. Serv., Tex. A&M Univ., Coll. 1987. Description of FLEETSIM: A general firm
"Anonymous. 1987. Preliminary results from Sta., Tex., 11 p. level policy simulation model fora shrimp fleet. Nat.
shrimp retention studies on four different turtle ex- '3Anonymous. 1984. Cruise reports for FRV Resour. Work. Pap. Ser. Nat. Resour. Workgroup,
cluder devices off the Georgia Coast. Univ. Ga. Sea JEANIE. U.S. Dep. Commer., NOAA, NMFS Dep. Agric. Econ., Tex. A&M Univ., Coll. Sta.,
Grant, Mar. Ext. Serv., Brunswick, 15 p. Southeast Fish. Cent., Pascagoula, Miss., 4 p. 50 p.
Marine Fisheries Review
stitute most of the computational com- changes in number and size of vessels for historical data in much the same manner
ponents of the model. the period 1969-86. Vessel size and con- as those for landings and prices.
struction varied considerably from 20- to
Procedure 30-foot wood up to 90-foot steel ones. Assumptions
Three separate simulations were con- Some firms had vessels that were 20-30 The impact of the TED on the produc-
ducted in an effort to analyze the impact years old, while others culled vessels tion capability of the vessel is potential-
of the TED regulations. These three after 10 years. ly manyfold. It is expected that initially
models were: 1) Historical, 2) Baseline, Baseline and TED simulation analyses there will be a negative impact while the
and 3) TED Simulations. were stochastic, as opposed to determin- fisherman learns how to use the device.
The first FLEETSIM analysis exam- istic. In Baseline and TED policy anal- This ‘learning period’’ will vary by ves-
ined the historical situation in the Gulf in- yses, pounds landed by the vessel were sel and captain and, therefore, a measure-
dustry from 1978 to 1986. No analysis is stochastically set about a mean value, ment of its impact is difficult.
included for bay vessels on the assump- based on a 5 year (1982-86) average of Contributing to this measurement
tion that bay shrimpers will take advan- fishery landings. Prices were similarly problem is the range of difficulty of use
tage of the 90-minute tow time exception set but included an adjustment based on across various TED devices. The Geor-
and will not be required to use TED’s. changes in the Consumer Price Index. No gia Jumper and Matagorda TED’s are
This analysis was deterministic and was attempt was made to account for any price relatively simple devices, whereas the
conducted to obtain a starting financial changes which might occur if the use of NMFS and Cameron TED’s are bulky
position for the baseline simulation. The a TED leads to a decline in total produc- and more difficult to work with. Many
program was run using actual values for tion of shrimp, Gulfwide. Price would vessel captains already employ some type
changes in inflation, interest rates, land- likely increase if production declined, ofexcluder device (‘‘jellyball shooters’’)
ings and prices, and production costs for especially for large shrimp which are the during certain portions of the year. This
a representative vessel. In addition, the mainstay of the Gulf shrimp fleet ana- experience should make efficient use of
model began with a new vessel in 1978 lyzed here. a TED more likely. In this analysis,
and was run without considering income Inaneffort to make stochastic variables because of the inability to establish a
tax. Therefore, all values generated rep- a function of actual relationships in the in- reasonable estimate of the ‘‘learning
resent a before-tax situation. dustry, an analysis of historical price and period’’ impact of adopting a TED, no
The second FLEETSIM analysis in- landing trends for Gulf shrimp vessels impact is included.
volved the development of a baseline was conducted. To generate random Another point is the widespread per-
simulation model for the fishery. The first landings and prices, it was necessary to ception that some of the TED’ sa re bulky
year of analysis for this model was 1987. provide cumulative deviations around and, therefore, unsafe to handle and may
The purpose of the baseline model was to mean values for these variables. This was have an effect on insurance rates. Con-
predict what would occur in the industry accomplished by regressing average an- versely, there may be positive benefits
without TED regulations. The result of nual landings and prices against time and associated with the use of a TED. Im-
the baseline simulations was later used to taking resulting deviations and dividing proved fishing efficiency and fewer safe-
determine the impact of the TED regula- them by the value for mean landings ty problems which arise from heavy by-
tions. The third step, following the devel- and prices. An additional explanation of catch, may result in favorable changes in
opment of the baseline simulation model this procedure can be found in the insurance rates. No analysis is incor-
and estimates of future costs and returns FLEETSIM user manual. porated in this study because of an inabil-
for the representative vessel, was to Values for future interest rates and in- ity to establish a specific impact of the
build effects of TED regulations into the flations rates, associated with prices and TED on insurance rates.
model. production costs, were obtained from For similar reasons, issues dealing
COMGEM!"’, a macroeconomic simula- with possible improved shrimping effi-
Data tion model developed by Penson, ciency associated with use of the TED are
Production and budget information for Hughes, and Romain. The “‘best’’ pre- not dealt with in this analysis. This im-
Gulf shrimpers was obtained from inter- dictions available were annual predic- proved efficiency centers around possi-
views conducted with members of the tions of inflation rates approximating ble higher percentage of shrimp in the
Texas Gulf shrimp industry (Anony- 4 percent for 1987 through 1990 and, catch when a TED is used, resulting in
mous!®), This information included past thereafter a constant of 4 percent. The longer tow times, improved shrimp qual-
production, costs and returns, and cumulative deviations of these macro- ity, and reduced sorting time.
exogenous variables, i.e., interest rates A final issue is that research to date has
and fuel prices, were generated based on been limited to tow-by-tow comparisons
'6Anonymous. 1987. Regulatory impact review and
for one vessel and do not represent the
regulatory flexibility analysis for regulations which
require the use of turtle excluder devices by situation when all vessels will pull a TED.
shrimpers to conserve sea turtles. U.S. Dep. Com- '7Mention of trade names or commercial firms does For example, if an area of ocean bottom
mer., NOAA, NMFS Southeast Reg. Off., St. not imply endorsement by the National Marine
Petersburg, Fla., 25 p. Fisheries Service, NOAA. contains, at any one time, a fixed amount
53(2), 1991
of shrimp, several passes through the area periments where more than a few shrimp aside for the purchase of a TED 2 years
might catch a fixed proportion of avail- are encountered and technical difficulties in the future.
able shrimp. If each net is catching less are absent. Therefore, four scenarios are
Method of Evaluation
shrimp on the first pass (because of the reported in this research: Nochange, a 5
TED), subsequent passes will be associ- percent decrease, a 10 percent decrease, Variables used in evaluating the impact
ated with larger remaining population and a 5 percent increase in shrimp pro- of TED regulations on the representative
level because less shrimp were taken on duction associated with the use ofa TED. vessel were ending net worth in year 10,
the previous tow. Thus, although catch This range encompasses the mean reten- internal rate of return of the analysis,
per unit of effort might be reduced for a tion of the most efficient TED’s. present value of ending net worth, equity-
given tow because of the TED, the catch to-asset ratio and the probability net pres-
per unit of effort would not decrease as TED Costs ent value will be greater than zero. Net
much as suggested by the sample data worth was determined by subtracting
Atthe time of this study there were five
because more population remains for the total liabilities from total assets. Ending
certified TED’s: the NMFS, Georgia
next tow. The argument is perhaps best net worth reflected owner’s equity in the
Jumper, Cameron, Matagorda, and a
seen in reverse. Some of the research in- vessel and in other personal property at
“*soft’’ TED. This paper was essentially
dicates that the use of a TED increases the end of the planning horizon. The
complete before the soft TED was cer-
shrimp catch, yet it is not sensible to internal rate of return is often referred to
believe that the total shrimp catch Gulf- tified, and therefore, no economic anal- as ‘‘marginal efficiency of capital.’’ By
ysis of this particular device is included.
wide could increase annually by 5 percent definition, internal rate of return is the
Highest estimates of acquisition costs
if TED’s are employed. The impact of discount rate that equates present value
were for the NMFS TED, with quotes
TED’s on the industry cannot be extrap- of benefits with the present value of costs.
between $375 and $475, whereas price
olated from an isolated vessel pulling a An investment is selected as long as
estimates for the Georgia and the
TED, which has been the research to internal rate of return exceeds cost of
Cameron TED’s ranged between $150
date. capital.
and $250 (Clark and Griffin!*). For pur-
The studies that have been conducted The present value technique puts the
poses of this analysis, each TED is as-
to date do not focus on the above issues net worth at the end of the planning
sumed to cost $300 (a number between
and, therefore, data are limited. Although horizon in real dollars. The equity-to-
the lesser cost TED’s and the NMFS
these issues are recognized as being im- asset ratio is one measure of solvency. A
TED).
portant, they are not considered in this one-to-one ratio means a vessel/boat
Total cost of using a TED varied de-
analysis. owner did not have any debt. A ratio less
pending on type of vessel and type of
It was assumed that the vessel was pur- than one-to-one would indicate a business
TED. Inthe Gulfitis possible to see both
chased new at the beginning of the histor- had not paid off all debt owed on assets
double-trawl and twin-trawl rigs, indi-
ical simulation (1978). The vessel was of (Osburn and Schneeberger, 1978).
cating between three and six TED’s could
steel construction and 73 feet in length. Another issue when examining eco-
be required for a Gulf vessel. These num-
In purchasing the vessel, it was assumed nomic viability of the vessel is the prob-
bers include a spare TED for each two
that 50 percent of the purchase price was ability that net present value of a stream
TED’s used. The expected life of the
paid down and the rest of the purchase of income during the period of analysis
TED is assumed to be 2 years.
price was financed over a 10 year period was greater than zero. The discount rate
The model was run for a double-trawl
at 9 percent per annum. used for calculating net present value was
rig which required an investment in three
Toexamine the impact of the TED reg- set at 7 percent. It was not unreasonable
TED’s at a cost of $300 per TED. This
ulations, assumptions had to be made to expect this rate of return on alternative
resulted in a total purchase cost for the
about the impact of the TED on produc- investments outside the fleet. These five
Gulf vessel of $900 or an annual cost of
tion capabilities of the vessels and cost of variables are obtained from stochastic
$450.
various TED devices. These assumptions simulations for the baseline and four TED
An additional annual maintenance cost
were based on production impact analysis scenarios.
of $50 was assumed, resulting in an an-
presented earlier as well as cost informa-
nual TED cost of $500. An accounting
tion obtained for the four TED devices. Discussion of Simulation Results
technique, whichentered the TED cost on
Considerable differences exist in the
studies that have been conducted about the cost side of the model and reduced ini- Deterministic Simulation 1978-1986
tial cash by one-half the purchase price of
the impact of the TED on shrimp produc- A representative Gulf vessel was simu-
the TED, forced the model to put cash
tion. It is assumed that shrimpers will use lated for 9 years. An outstanding balance
those TED’s that are most effective at re- on the vessel of $120,000 was financed
taining shrimp. The mean shrimp reten- '8J_ L. Clark and W. L. Griffin. 1987. Update of during 10 years at a rate of 9 percent per
tion, however, has generally ranged from costs and returns for seven Texas shrimp vessels. annum. Beginning cash reserve was set
a small increase to about a 10 percent Nat. Resour. Work. Pap. Ser. Nat. Resour. Work- at $26,000 and resulting beginning net
group, Dep. Agric. Econ., Tex. A&M Univ., Coll.
decrease when using a TED in those ex- Sta., 2 p. worth (market value) was $117,692.
Marine Fisheries Review
Table 2.—Annual production costs Table 3.—Coof oumtputp varaiablers ait thes endo of an 10-y ear period d TED policy simula-
for a representative Gulf shrimp tions for the Gulf of Mexico.
vessel (73 feet, steel hull).
Percent impact PV of
Cost on shrimp Ending Internal rate ending Equity/ Probability
(season Simulation production net worth of return net worth assets NPV>0O
Item total)
Baseline $896,801 0.0372 $455,888 0.945 0.78
Ice $ 3,106 Scenario 1 886,062 0.0361 450,429 0.945 0.78
Fuel 23,271 Scenario 2 781,577 0.0231 397,314 0.936 0.74
Repair and replacement 12,746 Scenario 3 680,316 0.0091 345,838 0.929 0.58
Other 14,063 Scenario 4 998,247 0.0500 507,458 0.960 0.82
Packing $0.09/Ib.
Dock rental 663
Insurance 7,738
line simulation was $898,801 (Table 3). plished by a statistical comparison of the
Although the value for average internal means. The hypothesis tested was
These starting values are required by the rate of return is low (3.72 percent), the
model, but will not affect the comparative use of a representative vessel in the sim-
Ho: p! —p = 0,
analysis of using a TED. ulation model contributed to this low val-
Annual values for those costs which ue. The practice by many Gulf shrimpers with an alternative hypothesis of
varied with level of production are pre- of spreading the cost of running a vessel
sented in Table 2. In addition to these across many different operations, allows H,: p'—p? #0.
costs, dock space was set at an annual the vessel to be run less efficiently and still
rental of $663. Fixed costs, those which remain solvent; hence, alow internal rate The test statistic used
are set at the beginning ofthe year anddo of return for the vessel. Many vessel op-
not vary during the period under con- erators, however, are very efficient and ms (x; —X2) — (ul—p?)
sideration, included only vessel insur- generated much higher rates of return.
2 4
ance at $7,738. Other costs, such as Average present value of ending net S| S :
depreciation and interest, were calculated worth was $455,888 and average equity ny nN
by FLEETSIM. to asset ratio was 0.945, indicating the
By simulating the model for the nine operator had a low debt level. The base- which is an approximation of the Student
year period, 1978-86, the ending finan- line simulation model had a 78 percent t statistic, and can be used when sample
cial position for the vessel was obtained. chance of generating a net present value sizes are sufficiently large (DeGroot,
The vessel ends the 9 years with $122,469 greater than zero (with a discount rate of 1975). The sample sizes, n, and np, are
in cash on hand and vessel assets worth 7 percent). equal to 50. This test statistic allows
$211,692, giving total asset value of determination of significant differences
$334,161. The only liability associated Simulation with TED from the baseline results but does not
with the vessel was an intermediate-term Four different simulations were run to allow any comparisons to be made across
debt of $17,155. Net present value for 9 examine impacts of TED regulations on all simulations. Since the primary pur-
years was $54,739. Internal rate of return atypical Gulf vessel. Again, 50 iterations pose of this analysis was to determine if
was 8 percent. of each simulation allowed average use of the TED resulted in a change in the
values for the statistics of interest to economic well-being of the vessel, it was
Baseline Simulation be generated. These different scenarios felt this test statistic would be sufficient.
The baseline simulation was set up to were run assuming no impact on shrimp The computed z-values for the various
simulate what would occur to the Gulf catch (Scenario 1), a5 percent decrease economic indicators are presented in
vessel during 1987-97. This was accom- in catch (Scenario 2), a 10 percent de- Table 4. Each row examines the com-
plished without considering the impact of crease in catch (Scenario 3), and finally puted z-value for a TED scenario against
TED regulations and results were later a5 percent increase in catch (Scenario4). the baseline scenario. Those test statistics
used to compare against those analyses These results were as expected in that all which were significant at the 95 percent
where the TED policy was simulated. economic indicators declined for nega- level are marked as footnote 2. It is ap-
The baseline simulation was run for 50 tive impacts on shrimp production and in- parent that all of the TED Scenarios
different iterations which allowed aver- creased for the positive impact on shrimp where there is a change in the level of
age values to be generated for the statis- production (Table 3). catch will cause a significant change in
tics of interest. The next step in the analysis of the both Ending Net Worthin Year 10as well
The vessel, purchased in 1978 had a simulation results was to determine if the as Present Value of Ending Net Worth.
market value in 1987 of $211,692 anda decrease or increase in the economic in- This is important because it indicates that
replacement value was $400,000. Aver- dicators was a significant change from the even the discounted Net Worth is signif-
age ending net worth in year 10 for base- baseline simulation. This was accom- icantly different. However, Internal Rate
53(2), 1991
of Return (IRR) is not significantly dif- Table 4.—Caiculated z foroutput dindetermining if TED scenario
values are significantly different from baseline values.
ferent from the baseline until Scenario 3.
In Scenario 2, where the impact on the Percent impact Ending Internal PV of
on shrimp net rate of ending Equity/
shrimp catch is a loss of 5 percent, the Simulation production worth return net worth assets
calculated z-value is significant at the 80 Scenario 1 0 1.517' 0.100 0.48 0.01
percent level. There is no significant dif- Scenario 2 -5 19.4337 1.365' 6.1467 0.281
Scenario 3 -10 18.289" 2.797" 12.1687 0.774
ference in the values for the Equity/Asset Scenario 4 +5 - 15.155" -1.18 - 4.792" 0.645
ratio between the baseline and any of the
‘Indicates difference is significant at the 20 percent level.
TED scenarios. Indicates difference is significant at the 5 percent level.
What this suggests is that the impact of
the TED is significant ifthe vessel owner
is primarily interested in vessel earnings.
However, if alternative enterprises are to Scenario 3 (10 percent decline in catch) bined effect leads to shrimp loss to all
be considered then there is no appreciable were Ending Net Worth in Year 10, IRR, vessels, then further statistically valid
difference in the rate of return associated and Present Value of Ending Net Worth side-by-side tests of aT ED or TED’s on
with the decision to operate a shrimp boat all significantly different from the Base- shrimp retention need to be done. The
or an alternative enterprise until the im- line Scenario at a 5 percent level. Re- other issues of shrimp quality , safety and
pact upon the shrimp catch is very large. search to date, however, indicates that deck handling procedures could possibly
It is also notable that the impact upon there are TED’s, specifically the Georgia be included in these further tests. How-
shrimp catch and therefore earnings, TED, which have experimental results ever, ifthere is no significant shrimp loss
does not result in significant increases in consistently better than a 10 percent toall vessels when considering the above
debt levels in the TED scenarios. Because shrimp loss. In fact, the Georgia TED (or combined effects, then further expensive
of the way the FLEETSIM model gener- Georgia Jumper) has increased shrimp side-by-side retention tests of TED’s is
ates Probability of Net Present Value retention in all experiments reported not warranted.
greater than Zero, it was not possible to here. If there is no effect upon shrimp
use the above test to determine significant landings as a result of pulling the TED,
Acknowledgment
differences from the Baseline scenario. the only economic effect will be the cost
of purchasing and maintaining the TED. The authors gratefully acknowledge
Summary, Discussion, These costs will have only a very minor the assistance of the National Marine
and Conclusion impact on the shrimp industry. Fisheries Service, financial assistance
This analysis is an intermediate anal- It is important to note that no research award # NA86WC-8-06129 (MARFIN).
ysis of the impact of the TED regulations. has been undertaken on other impacts a
It does not explicitly consider the interac- TED may have on shrimping operations. Literature Cited
tive aspects of the shrimp fishery both For example, in addition to the impact
Dean, R., and D. W. Steinbach. 1981. Endangered
among vessels and between vessel catch which by-catch reduction may have on marine turtles of the Gulfcoast. Tex. Agric. Ext.
and the remaining shrimp stock. This shrimp catch, the TED may also impact Serv., Tech. Rep. L-1867, 5 p.
DeGroot, M. 1975. Probability and statistics.
analysis is based on the resultant impact quality, onboard safety, and onboard Addison-Wesley Press, Reading, Mass., ch. 8.
on the catch of a representative vessel in handling of gear and shrimp fleet catches Osburn, D. D., and K. C. Schneeberger. 1978.
the Texas shrimp fishery given all inter- when all vessels are pulling a TED. None Modern agriculture management. Reston Publ.
Co., Inc., Reston, Va., p. 81-113.
active effects. of these potentially significant impacts Penson, J.P. Jr., D. W. Hughes, and R. F. J.
Four scenarios were analyzed for the have been studied here or elsewhere. Romain. 1984. An overview of COMGEM: A
effect of the TED on shrimp production. Asdiscussed, noconclusive statements Tmeaxc.r oAegcroinc.o mEixcp .m oSdtae.l, eDmepph.a soifz Aignrgi ca.g rEiccounlt.u rIen.-
These were, no change, a 5 percent de- could be made about the impact of the form. Rep., DIR 84-1, DP-12, 25 p.
crease, a 10 percent decrease and a 5 TED upon shrimp retention using the ex- USDC. 1978. Final Environmental Impact State-
ment on Listing and Protecting the Green Sea Tur-
percent increase. The results were as ex- isting data. A first step in the analysis of tle, Loggerhead Sea Turtle, and Pacific Ridley
pected in that all economic indicators the impact of TED regulations on the Sea Turtle Under the Endangered Species Act of
declined for negative impacts on shrimp shrimp industry should be to analyze the 1973. U.S. Dep. Commer. ,N OAA, Natl. Mar.
Fish. Serv., St. Petersburg, FLa., 25 p.
production and increased for the positive combined effects of shrimp gain or loss _____ . 1985. Annual report FY85 - trawling
impact on shrimp production. A statis- by an individual vessel with biomass efficiency device project. U.S. Dep. Commer.,
NOAA, Natl. Mar. Fish. Serv., Southest Reg.
tical analysis of the economic indicators changes when all vessels in the industry
Off., St. Petersburg, Fla., 10 p.
pointed out that in Scenario 2 and4, both use a TED and the individual vessel im- Watson, J. W., J. F. Mitchell, and A. K. Shah.
of which represented a 5 percent impact pacts from reduced by-catch. These com- 1985. Trawling Efficiency Device, a new con-
cept for selective shrimp trawling gear. U.S. Dep.
upon shrimp catch, Ending Net Worth bined effects entail looking at the impacts, Commer., NOAA, Natl. Mar. Fish. Serv.,
and Present Value of Ending Net Worth in the limit, of shrimp gain or loss when Southeast Fish. Cent., Pascagoula, Miss.
were significantly different from the tows are successively applied to a fixed Yaffee, S. L. 1982. Prohibitive policy: Implement-
ing the Federal Endangered Species Act. MIT
baseline at a 5 percent level. Only in biomass of shrimp over time. Ifthe com- Press, Cambridge, Mass.
Marine Fisheries Review