resource rent. Alternatively, public support for quota programs may be undermined when only a small percentage of the rent is extracted for public purposes.
In all but the most extraordinary circumstances (Iceland, for example), taxes on fishing rents would be a nearly insignificant source of revenue for the national government, and even for state or provincial governments (except perhaps Alaska). However, such tax revenues are a significant source of income for local governments in Alaska and elsewhere.
Any fishery can be managed to produce some resource rent (see Chapter 1 for an explanation of rent), although most fisheries in the United States are not managed with this objective. The size of this rent depends on a number of factors, some of which are not influenced by fishing firms or the industry, such as the price of fish (in most cases determined in competitive markets), technology, and the cost of labor and other inputs. Other factors that influence rents, such as modes of organization internal to the firm and cost-cutting measures, are controlled by the firm.
The existence of rent is a consequence of an efficiently managed fishery and a naturally limited resource; instead of using too many vessels, employing too many people, or using too much gear and fuel, the redundant factors of production have been diverted to other purposes, where they create additional value in the production of other goods and services.
Three rather different rationales are usually suggested for public sharing in the rent from a resource. These principles are not necessarily mutually exclusive; they can be applied simultaneously and to different degrees.
1. The public resources principle—Under this principle, the public is entitled to a share of the rent because the resources being exploited are owned by the public. This principle suggests returning to the public some of the value that is rightfully theirs.
2. The cost recovery principle—Under this principle, the government is entitled to reclaim the costs of creating and administering fishery management programs because the beneficiaries of government programs should bear the associated costs. Cost recovery programs can seek to cover some or all of the (1) administrative costs, (2) monitoring and enforcement costs, and (3) research and stock assessment costs.
In practice, cost recovery is becoming increasingly common. This principle is allowed to a limited extent by the Magnuson-Stevens Act in the form of fees levied to cover management and enforcement costs (Sec. 304[d]). It is also currently used in air pollution control to fund the administrative cost associated with the permit system (Title V of the Clean Air Act). New Zealand and Canada currently apply the cost recovery principle in their fisheries.