Network analysis of a rock lobster quota lease market

Individual Transferable Quota (ITQ) management systems are typically introduced to promote better capital utilisation by the fishing fleet and other efficiency gains. ITQ management was introduced in the Tasmanian rock lobster industry in 1998 and led to a range of economic, social and cultural changes including an increasing proportion of the catch taken by fishers dependent on quota leasing. Quota owners who lease out their entire quota increasingly dominated ownership of the fishery. Temporal changes in lease quota trade networks and network characteristics were analysed, which showed that the lease quota trade network has become more integrated and the influence of personal connections less important. Change in the network structure of the market indicated that a smaller number of quota owners have become increasingly dominant in this market although there was no evidence that this had an effect on quota lease prices. Processors also participated in the lease quota market and influenced interactions and dependencies. In other jurisdictions processor relationships have been found to affect lease quota price developments. However, disproportionate quota ownership by processors and market manipulation did not occur here. This was due to a successful input control where quota ownership by one legal entity was capped. Because market control cannot be gained through investment in quota, another logical way of gaining it would be for processors to operate as pseudo brokers and distribute lease quota for quota owners. Although processors in Tasmania operate as pseudo brokers, the absence of structural changes in the processor market indicated that this produced no change in market power or quota owner loyalties.