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Thin Wholesale Markets and Direct Marketing in Renewable Resource Exploitation

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  • The ex-vessel supply chain for fisheries has been recognized as an important determinant of value generation. In recent years, as the retail demand for fresh seafood products has increased, many independent fishermen have bypassed thin, monopsonized, or otherwise inferior wholesale markets by engaging in implicit or explicit fixed-output contracts with consumers (e.g., restaurants, supermarkets, individuals). We investigate the implications of this type of market structure for various management scenarios with a simple model of resource stochasticity and fishing effort. We show that contracts are associated with risk when periodic stock is stochastic, leading to inefficiencies and excess effort in the short run when resource conditions are temporarily poor. However, the results suggest that bilateral production agreements between fishermen can absolve a significant proportion of these inefficiencies, with broader partnership schemes offering further gains. Fishing cooperatives – which are often designed to facilitate the joint marketing of fish products – are an obvious tool in alleviating the inefficiencies associated with small-scale, contract-driven marketing.
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  • Kennedy, S.J. & S. Scott. Thin Wholesale Markets and Direct Marketing in Renewable Resource Exploitation. Visible Possibilities: The Economics of Sustainable Fisheries, Aquaculture and Seafood Trade: Proceedings of the Sixteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, July 16-20, Dar es Salaam, Tanzania. Edited by Ann L. Shriver. International Institute of Fisheries Economics and Trade (IIFET), Corvallis, 2012.
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  • AQUAFISH, USAID, NEPAD Planning and Coordination Agency, Norad, The World Bank, Hyatt Regency Dar es Salaam, NAAFE, World Wildlife Fund, United Nations University Fisheries Training Programme, ICEIDA, JICA, JIFRS, The European Association of Fisheries Economists, International Seafood Sustainability Foundation
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