Maximizing profits and conserving stocks in the Australian Northern Prawn Fishery

The Australian Northern Prawn fishery (NPF) is one of the few that has adopted a dynamic version of a ‘maximum economic yield’ (MEY) target, and, on this basis, the fishery is undergoing a process of substantial stock rebuilding. This paper details the bioeconomic model that is used to provide scientific management advice for the NPF, in terms of the amount of allowable total (and tradable) gear length in the fishery, both in terms of the MEY target and the path to MEY. It combines the stock assessment process for two species of tiger prawns (brown and grooved tiger prawns) with a specification for discounted economic profits, where the harvest function in the profit equation is stock dependent. Results for the NPF show a substantial ‘stock effect’, indicating the importance of conserving fish stocks for profitability. MEY thus occurs at a stock size that is larger than that at which maximum sustainable yield is achieved, leading to a ‘win-win’ situation for both the industry (added profitability) and the environment (larger fish stocks and lower impacts on the rest of the ecosystem). Sensitivity results emphasize this effect by showing that the MEY target is much more sensitive to changes in the price of prawns and the cost of fuel, and far less so to the rate of discount.