The number of Korean fishing vessels operating in distant water longline fisheries has been decreasing over the years due to the difficulties surrounding the fishing environment. The purpose of this study is to identify the cause of and provide a solution to this phenomenon.
The model used for the stock assessment of bigeye tuna?a target species of the longline fisheries in WCPFC waters?was a Bayesian state-space surplus model, which has its strength in accounting for both observation and process errors, and the obtained results were compared to those of a Multifan-CL model used by WCPFC.
This study also made an estimation of a Cobb-Douglas form of production function with output variable productivity of bigeye tuna fisheries and input variables the number of crew, vessel tonnage, number of hooks, and biomass of bigeye tuna, with further attempt to conduct returns to scale analysis. Biomass estimates produced from the Bayesian state-space surplus model were used in this process.
In the business analysis perspective, a sensitivity analysis was conducted of the changes in bigeye tuna quota and in the number of crew. Specifically, the study focused on conducting a break-even analysis under the current management status to provide an estimate of the minimum quota and fish price to be guaranteed.
The analyzed results are as follows:
Firstly, the result of the bigeye tuna stock assessment using the Bayesian state-space surplus model suggests an MSY of 157,100 tonnes, which is similar to 158,551 tonnes endorsed by WCPFC. The analysis of the effectiveness of TAC and fishing effort management, conducted based on the stock assessment, demonstrates that the status quo of the bigeye quota and fishing effort will have positive impact on the restoration of the bigeye tuna resources.
Secondly, the result of the estimated production function indicates that number of hooks, vessel tonnage, and biomass of bigeye tuna, with the exception of the number of crew, have positive impact on the productivity of bigeye tuna fisheries. The use of a dummy variable showed that joining WCPFC has led to a 0.085% decrease of bigeye tuna catch. And as the analysis estimated increased returns to scale, it may be necessary to establish a strategy to receive bigeye tuna quota from other countries.
Thirdly, the business analysis of Korean longline fisheries in WCPFC waters has produced a profit margin ratio = 18.6%, NPV = KRW 214.1 billion, and IRR = 40.7%, indicating the fishery has investment potential. According to the break-even analysis result, the minimum quota and fish price Korea needs to secure are 8,828 tonnes and KRW 6,332/kg. Considering the sensitivity analysis result which notes the uncertainties in bigeye tuna price and expenses which fluctuate due to external factors, an effective means to achieve management improvement would be to reduce the number of crew.