Abstract

Early in 2002, members of two Producer Organisations (POs), the North Sea Fishermen’s
Organisation in Britain, and the Dutch Cooperative Producentenorganisatie Oost Nederland,
realised that their quotas of plaice and sole were insufficient to last until the end of the quota
period. Vessels have in the order of 70-80% of their needs for sole but only 50-60% plaice.
In response they voluntarily tied up their vessels periodically early in the year. This was
repeated in 2004 and 2005.
The objective of this study, which was part-funded by the European Commission Directorate-
General for Fisheries and undertaken by the two POs and a firm of economists, was to
identify whether the expected improved price stability for plaice and sole on the Urk auction
market where most of the fish is sold, was achieved, and to estimate the amount of the
improvement in revenues and cost-savings for the fleet.
Inverse demand functions were calculated for lemon sole, dover sole, and plaice and the
results suggest that revenue is maximised by spreading supplies evenly across any given time
period. This was confirmed by simulations of the estimated model which were run to predict
what would have been the revenue in the period that the tie up scheme was in force against an
alternative scenario of the scheme not being in force. The aggregate gains in earnings are
calculated to have been up to 18%.
From a sample of vessels' costs and earnings accounts statistical evidence emerged that the
profitability was higher in the years when the tie-up scheme was in place, though no
significant change in revenue and crew share was found. While individually the evidence of
the econometrics and statistical tests is not conclusive (and that of the statistical tests need not
be attributable to the tie-up scheme), combined, the two pieces of evidence do suggest that the
tie-up scheme did result in the intended higher revenues and profits, and a more stable market.