Analyzing the economic structure and productivity in the fisheries sector of the Central-Eastern Mediterranean area

Abstract

A lack of knowledge of the socio-economic characteristics of commercial fisheries has long characterised fisheries management with the main focus being placed on the biotic components while setting aside the human component. This knowledge deficit has also been caused by inadequate understanding in fisheries science of the labour component related to fishing activity and in the ability to properly estimate it. This lack of understanding has been one of the main barriers in the establishment of sustainable fisheries management.Labour is at the heart of the socio-economic component of fisheries with labour costs representing the main cost component in fishing activities. Around the world, and throughout history, the crew-share has been the most used system to calculate remuneration in fisheries, allowing the crew to capture a proportion of the rent. However, this system has not always been well considered in the data collection process, with remuneration being typically collected as a single value, often from the vessel’s or company’s financial statements. This method of collecting data has likely led to imprecise estimations of the labour component. Aside from remuneration, the study considered the main indicators related to labour, including measures of productivity and the interplay between these indicators. In the standard theory, increases in productivity have been viewed as positive outcomes. However, in this study, a trend was identified where employment in the sector was found to decrease as the national GDP increased. The sector compensated for the reduced labour pool by increasing productivity and, in reality, labour productivity was generally most affected by factors external to the fishing sector and more related to the macroeconomic conditions of the country.The main objective of this dissertation is an improved understanding of the labour component of fisheries and the related indicators providing insight into the remuneration of fisheries labour; improving the methodology for the collection of socio-economic data; introducing an unconventional methodology for the calculation of remuneration; and investigating the interplay between efficiency and other labour-related indicators.The earlier literature on labour considered it to be a cost, like in case of classical bio-economic models which did not consider remuneration beyond the value reported in the ledgers. An improved quality of data on labour in fisheries provides an insight into the remuneration-related contribution to fishers’ livelihoods and sheds light on the remuneration systems in fisheries around the world and the, to-date, dominance of the crew-share system. The labour-related indicators were examined in the context of the Mediterranean region with a particular focus placed on Italy, Greece, Egypt and Lebanon. These countries had macroeconomic conditions covering the full range of income levels, but all conducted their fisheries in the Mediterranean Sea with similar fishery management systems and even some shared stocks. These countries were selected because they all have socio-economic data collection programmes with comparable methodologies and this yielded data with a high degree of consistency and comparability. Moreover, the author was directly involved in the data collection in these countries. Remuneration, under the crew-share system, can also be used as an indicator of the contribution to fishers’ livelihoods and as an indicator of the overall economic performance of the fishery, not only as a mere input cost. A paradigm links the factors that impact labour productivity. The higher the income level, the lower the attractiveness of the sector and thus employment on board, which results in higher labour productivity performance once the fleet is able to increase mechanization. A negative correlation was identified between labour productivity and remuneration and labour productivity was more closely related to the macro-economic conditions of the country. Concerning labour productivity, the findings of the dissertation suggested that: (i) the contribution to livelihoods is not well captured by the labour productivity indicator; (ii) variations in its performance appear to be the result of adaptations within fisheries to outside macroeconomic factors; (iii) the crew-share system makes labor costs a fixed share of the gross profits and the total amount of labor costs is fixed so, the number of crew members has a limited impact on profits. This, to a large extent, shifts the influence in the determination of labor productivity to the employment factor; and (iv) labor productivity should not be used as a stand-alone indicator, but should rather be considered in combination with other indicators.The contribution of this dissertation emphasizes that fisheries management cannot be successfully conducted without well considering the human component of the activity while offering an improved understanding of labour-related indicators along with the tools to improve data quality.