Assessing the Economic Value of the 2012 Victorian Recreational Southern Bluefin Tuna Fishery in Portland

May 2013

Contents

• Glossary and Acronyms
• 1 Introduction
  • 1.1 Background
  • 1.2 Aim of the study
  • 1.3 Approach
  • 1.4 Outline of the report
• 2 Methodology
  • 2.1 Introduction
  • 2.2 Choice of valuation technique
  • 2.3 Survey design
  • 2.4 Sample selection and response rate
• 3 Survey results
  • 3.1 Profile of recreational SBT anglers
  • 3.2 Expenditure: observed total travel costs
  • 3.3 Willingness to pay measures
  • 3.4 Charter boat operators
  • 3.5 Limitations of the survey estimates and sensitivity testing
• 4 Direct value of the recreational SBT fishery in Portland
  • 4.1 Introduction
  • 4.2 Consumer surplus per angler fishing day
  • 4.3 Value of the 2012 recreational SBT fishery
  • 4.4 Value of the 2011 recreational SBT fishery
• 5 Conclusions
• References
• Appendix A : Recent studies on recreational fishing in Victoria
• Appendix B : Questionnaire to recreational anglers
• Appendix C : Questionnaire to charter boat operators
• Appendix D : Trailer count
• Appendix E : Summary of responses to the survey of recreational anglers
• Appendix F : Summary of responses to the survey of charter boat operators
• Appendix G : Calculation of the consumer surplus
• Appendix H : Recreational fishing licences sold in Portland

Executive Summary

The Southern Bluefin Tuna (SBT) fishery in Portland provides a range of commercial and recreational economic benefits. Yet, the competing interests over those economic benefits pose several management challenges. In particular, SBT has recently been listed as conservation dependent and is currently subject to a commercial catch limit across Australian waters of 4,528 tonnes per annum (AFMA, 2012), and supports a sizeable commercial fishery. The economic value of the recreational fishery is less readily observed but nonetheless significant.

Deloitte Access Economics was engaged by the Department of Environment and Primary Industries (DEPI) to assess the economic value of the recreational SBT fishery to the Portland Region. The study aims to provide the Victorian Government with a better understanding of the economic benefits of the recreational SBT fishery and a sound evidence base to inform future planning, infrastructure and investment decisions by fishing business and the Glenelg Shire Council.

Approach

A travel cost approach, supplemented by contingent valuation, was used to assess the direct value of the recreational SBT fishery in Portland. Surveys were designed to collect information from recreational anglers and charter boat operators. Interviews were conducted in four blocks of five days each across May and the first half of June 2012, throughout the middle of the annual SBT season.

Profile of recreational SBT anglers

A total of 497 individual anglers and 20 charter boat operators were surveyed. Key findings from the survey included:

• Around two thirds of the surveyed anglers (330) were anglers on private boats, while the remaining third (167) were anglers on charter boat trips.
• Only 26 (5%) of the anglers surveyed were from Portland, while 95% of the anglers travelled to Portland from another postcode area, in the vast majority of cases for the sole purpose of fishing (94%).
• Most anglers had travelled by car from outside of South West Victoria to experience SBT fishing off Portland. The average distance travelled to arrive at Portland was just over 300 km, evidence that SBT is the basis of a high profile and valuable fishery that anglers are willing to travel large distances to enjoy. Those using charter boats had travelled, on average, further to Portland than those using private boats (Melbourne is 365 km from Portland).
• During their visit to Portland, anglers undertook an average of two boat trips.
• On average, three SBT fish per daily trip is the catch (or catch expectation) reported by each angler on the day of the survey, of which 1.6 were released and 1.4 were kept. There was little difference in the per-angler catch rate between charter and private boat anglers.

Expenditure and willingness to pay

The average expenditure per angler fishing day was $381, with anglers on charter boats spending more than anglers on private boats ($508 compared with $317 per angler fishing day). Attributable costs were of four broad types, as shown in the following table.

The cost structure of each fishing trip was very different between those on charter boats and those on private boats. Many of the individual costs borne by private boat anglers did not exist for charter boat anglers, who instead paid an average fee to the charter boat operator of $264 per day. The average expenditure of $381 per angler fishing day represents the average revealed valuation of the fishing experience from the anglers.

Recreational anglers will place additional value on their recreational experience that is beyond what they have to currently pay to access the fishery. Two approaches have been used to estimate this additional 'consumer surplus', namely estimates based on 'willingness-to-pay' and econometric estimates of the demand curve based on the travel cost methodology.

The survey results provided data that allowed willingness-to-pay values to be calculated on two bases. In particular, anglers were asked how much they would be willing to pay for fishing in Portland in excess of their travel costs, as well as how much further they would be prepared to travel for the experience. In each case, the mean value was around $73 per angler fishing day.

The standard approach based on deriving the consumer surplus from an estimated demand curve using the distribution of travel costs across anglers yielded estimates of the consumer surplus varying between $46 and $162 per angler fishing day. A consumer surplus mean value of $81.42 per angler fishing day was obtained after undertaking a range of sensitivity tests in the travel cost methodology.

The total observed expenditure associated with the 2012 SBT season in Portland is on average $381 per angler fishing day. However, total willingness to pay, consisting of the travel cost expenditure and additional stated willingness to pay, adds to a total value per angler fishing day of about $454. This represents the average valuation of the experience per angler fishing day, of which $73 represents surplus value.

Annual value of the recreational SBT fishery

Having arrived at expenditure and consumer surplus value per angler fishing day on the basis of 497 survey responses, extrapolation was required to arrive at total annual values for the recreational SBT fishery.

Using a combination of the responses to the survey of recreational anglers, whole-of-year activity estimates provided by charter boat operators, DPI's 'Counting the catch' data and trailer count data, it was estimated that there were between 14,797 and 19,889 angler fishing days in 2012.

Based on $381 in observed expenditure per angler fishing day, this provides an estimate for the industry value of the 2012 recreational SBT fishery in Portland of between $5.64 million and $7.58 million – depending on the extrapolation method used. After accounting for the anglers' additional willingness to pay based on the survey's willingness to pay responses, the industry estimate could increase by $73 per angler fishing day (or depending on the extrapolation method between $1.08 million and $1.45 million in total) to between $6.72 million and $9.03 million in 2012.

Based on $381 in observed expenditure per angler fishing day, the recreational expenditure on a per-fish basis is $272 for each SBT caught and kept. Assuming a likely weight per fish of between 10kg and 20kg¹, the recreational value is between $14 and $27 per kg. When including additional willingness to pay of $73 per angler fishing day, the recreational value is between $17 and $32 per kg. Compared to around $25 to $30 per kg for commercial SBT catch², the recreational SBT fishing experience provides a comparable value on a per-fish kept basis. Of course, catch and release fishing means that each fish can be a non-consumptive resource, with a recreational value that is not limited to once-only catch like it is with commercial fishing.³

These figures confirm the significant economic contribution made by recreational fishers in the SBT fishery in Portland. This contribution should be considered in setting the overall and relative sustainable catch limits for the commercial and recreational SBT fishery.

Footnotes

¹ The DPI (2012) Counting the Catch study found that mean weights ranged from a little over 9kg to over 18kg.

² Conservative estimate following SARDI (2012) and OBPR (2012): in 2002/2003, SBT farms based in the Port Lincoln area produced around 9,000 tonnes of tuna valued at over $255.6 million - equivalent to $28.4 per kg, while in the 2009-10 season, the total SBT aquaculture production output value (i.e. market value) was $102.2 million (for 4,015 tonnes of SBT) – equivalent to $24.9 per kg. This represents the price per kg of weight of grow-out production (rather than wild catch).

³ There is a level of fish mortality as a result of catch and release and survival rates of SBT are not known.