Implications for Sustainability on the Malaysian Fishing Industry
Production of marine fisheries is a risky undertaking because of the degree of uncertainty involved in procuring catch. The potential catch of fishermen can be greatly affected by the inability to detect the movement of fisheries within the sea. More time is needed for effective fishing when fish population is depleting due to over-fishing thus leading to the waste of energy and efforts. The industry comprising the major fishing gears is analyzed using portfolio investment theory to find out what would be the best combination of vessel types that conforms to the minimum risk principle. Given the current fishing technology in Malaysia, efficient fishing methods like trawl nets are expected to catch more at the expense of less efficient smaller vessels like hook and lines. This paper intends to investigate how the share of catch changes between small and big vessels under various levels of return and risk scenarios. Initial findings reveal that at a low of production growth and risk the best combination supports the current domination of efficient gears. For a higher production growth and risk, inefficient gears prevailed that is consonant with the objective of achieving sustainable production. Seven portfolio investments are considered in this study including trawl nets, fish purse seines, anchovy purse seines, other seine nets, drift/gill nets, hooks and lines, and bag nets.
Keywords: Portfolio Analysis, Sustainability, Variance
Dr. Nik Hashim Nik Mustapha
Professor of Natural Resource Economics, Department of Economics, Faculty of Management and Economics, University of Malaysia Terengganu (UMT)