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This report contains estimates of the financial and economic performance of two key Commonwealth fisheries: the northern prawn fishery and the Torres Strait prawn fishery. It contains new survey based estimates for both fisheries for the 2006-07 and 2007-08 financial years, calculated using survey data collected from operators in 2009. It also contains non-survey based preliminary estimates of economic performance for both fisheries in 2008-09. These preliminary estimates were calculated using 2008-09 catch, effort and fish price data in combination with historical survey data and results.
A distinction is made throughout the report between financial performance and economic performance. Financial performance estimates are calculated for the average boat in a fishery and include all cash receipts and cash costs (including the value of any unpaid labour) that have been earned and incurred in the surveyed fishery and any other fisheries the vessel operated in. As such, these estimates largely reflect the average boat’s accounts based profit and loss statement for all fishing activities.
The indicator of economic performance presented in the report is net economic returns (NER) which are reported at the fishery level. The main distinction between this and financial performance estimates is that estimates of NER relate only to the surveyed fishery and include non-cash economic costs such as depreciation, the opportunity cost of capital and the opportunity cost of labour. Definitions of these costs are provided in appendix B.
Although both indicators provide slightly different information, both are important. Financial performance information can provide some context to observed trends in a surveyed fishery. For example, positive financial profits at the boat level may reveal how operators continue to operate in a fishery that has experienced economic losses. These estimates are also more relevant to the needs of industry operators, who can compare their performance with that of the average vessel.
Economic performance is most relevant to the needs of fishery managers and policy-makers. First, NER relates only to the specific fishery being managed. Moreover, by taking into account all cash receipts, cash costs and economic costs, NER indicates the economic return to society associated with harvesting that fishery resource.
For this reason, NER is the key economic performance indicator referred to in the Fisheries Management Act 1991. According to the Act, the Australian Fisheries Management Authority (AFMA) is required to maximise NER to the Australian community from the management of Australian fisheries. Although survey estimates of NER don’t reveal how a fishery has performed relative to potential NER (maximum economic yield) in a given period, interpretation of NER trends and drivers can assist in assessing AFMA’s performance against the latter objective. Such interpretation is also discussed in appendix B.
ABARE has been undertaking surveys of Commonwealth fisheries since the early 1980s and on a regular basis for key Commonwealth fisheries since 1992. The data that have been collected through these surveys allow the construction of a number of other economic indicators and tools that allow better assessment of AFMA’s performance against its economic objective. These include productivity indexes, profit decompositions, efficiency analysis and bioeconomic models that can provide information about the maximum economic yield for a fishery. A list of earlier fisheries surveys reports is presented at the end of this report.
A summary of results for the northern prawn fishery and the Torres Strait prawn fishery is presented below.
• From 2000-01 to 2004-05, receipts fell more rapidly than costs. As a result, net returns decreased every year, to a minimum of -$14.5 million. Since then, economic performance has been improving and, in 2007-08, net economic returns were $8.1 million.
• Non-survey based estimates of net economic returns show that returns to the fishery (including management costs) are estimated to have increased by 36 per cent to $11 million in 2008-09.