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The American Fisheries Act (AFA) of 1998 significantly altered the Bering Sea and Aleutian Islands pollock fishery by allowing the formation of harvesting and processing cooperatives and defining exclusive fishing rights. This paper uses data envelopment analysis and stochastic production frontier models to examine effects of the AFA on the fishing capacity, technical harvesting efficiency (TE), and capacity utilization (CU) of pollock catcher-processors. Results from multi-input, multi-output models indicate that fishing capacity fell by more than 30% and that harvesting TE and CU measures increased relative to past years. This work provides examples of how existing data, which is currently devoid of operator costs and provides only general indicators of earnings, may be used to analyze changes in elements of fleet and vessel performance in response to management actions. [ABSTRACT FROM AUTHOR]

The United States Congress recently passed a law that creates an alternative to individual transferable quota (ITQ) management. The American Fisheries Act promises the ability to rationalize one of the world's largest fisheries, the North Pacific pollock fishery, without the overt appearance of allocating permanent property rights to a public resource. The Act enabled pollock fishers to form cooperative bargaining units that are guaranteed a fixed share of the total allowable catch (TAC) providing they deliver to historic processors. This paper explores the evolution of that policy change and the innovative use of fishery cooperatives to advance voluntary decapitalization and rationalization that Congress intended to benefit both vessels and processors. Game theory offers insights into the likelihood of achieving congressional intent. It is argued that while the Act is Pareto improving, it may violate the legislative intent of win-win rationalization and may introduce a market failure while attempting to rid the fishery of the open-access externality. [ABSTRACT FROM AUTHOR]

The American Fisheries Act establishes procedures under which a group of vessels and a processing plant can form a coop, the main purpose of which is to establish a rights-based regulation program that will protect the interests of both parties. The core principles for coop formation are specified, and operating procedures which must be followed in order to obtain maximum efficiency gains are derived. How the efficiency gains are split among coop members by the choice of the ex-vessel price is demonstrated. In certain circumstances, a vessel and its harvest rights may switch coops. The effects of these shifts on efficiency are analyzed in a way that separates the effects of the vessel shift and of the transfer of production, and that specifies the conditions under which there will be net efficiency gains. Finally, it is demonstrated that the quasi-rents of all members of both coops are affected by a vessel switch. This provides a reference for understanding when a vessel will agree to a shift and the incentives for others to take action to support or oppose the shift. [ABSTRACT FROM AUTHOR]