PIFSC Economists Assess Downward Trend in American Samoa Longline Fishery

Participants in the American Samoa longline fishery have reported extensive operational challenges in recent years, and the staff of the PIFSC Socioeconomics and Planning Group (SPG) has responded to requests by the Western Pacific Fishery Management Council to examine the problems. SPG economist Minling Pan recently completed an assessment of trends in fleet-wide net revenue for the period 2006 to 2013 and used a comparison of cost-earnings data for 2001 and 2009 to provide context for understanding the downturn in the fishery in 2013.

Last year, Pan and University of Hawaii colleague Shawn Arita calculated that American Samoa-based longline operators generated an average revenue of $448,817 per vessel during 2009. The average profit margin was a mere $6,379 - a 96 percent decrease from the early 2000s when PIFSC researchers Joe O'Malley and Samuel Pooley calculated average net returns of over $177,000 per vessel. Among the 23 active owner-operators surveyed in 2009, 48 percent reported net losses. When vessel depreciation is considered, the vast majority of participants were operating in the red that year. Rising fuel costs and relatively low catch rates (CPUE) for albacore - the principal target species - are thought to be closely associated with poor fleet-wide economic performance.

Figure 1. Revenue and cost per set in the American Samoa longline fishery, 2006-2013.
Figure 1. Revenue and cost per set in the American Samoa longline fishery, 2006-2013.

Low CPUE and rising trip costs continued to challenge the American Samoa longline fleet through 2013. Pan's analysis indicates that if CPUE for albacore is lower than 14.3 fish per 1000 hooks, and if the market price for albacore is held at $1.00 per pound (as it was during much of the 2000s), the profit margin for the average vessel will be negative - as was the case for certain owner-operators in 2009. During 2013, albacore CPUE declined to 11.9 fish per 1000 hooks, resulting in even greater fleet-wide losses than were noted five years earlier.

The continuous data collection program used to monitor fleet-wide economic performance since 2006 also indicates persistent economic challenges for the American Samoa fishery. As shown in Fig. 1, operating costs have increased substantially since the mid-2000s, reaching their peak in 2013. Although a number of owner-operators generated net gains during 2012, the costs of fishing exceeded landings-generated revenue by a significant margin in 2013, and by the end of that year much of the fleet was inactive and 18 owners had posted "For Sale" signs on their vessels.

Figure 2. Net revenue per set in the American Samoa longline fishery, 2006-2013.
Figure 2. Net revenue per set in the American Samoa longline fishery, 2006-2013.

Fig. 2 further illustrates the poor economic performance of the fleet in recent years. During the period 2006 to 2013, net revenue per set fluctuated year to year but trended downward, becoming negative in 2013. Net revenues during 2011 and 2012 were $244 and $713 per set, respectively - much lower than in 2009 when the figure was $1,307 per set. Net revenues bottomed out at -$372 per set in 2013.

In conclusion, SPG's analysis indicates that participants in the American Samoa longline fishery earned scant profits during 2009 and that the situation had worsened considerably by 2013, with widespread negative returns on fishing effort. The analysis reveals that lack of profitability is linked in large part to diminishing CPUE and low market prices for albacore. Near-term recovery of the fishery will necessitate increases in catch and prices paid for albacore, and an easing of costs associated with commercial fishing.