Wednesday, April 1, 2009

Pacific Salmon Fishing Exit

In Prin. of Micro we usually think of entry and exit decisions to be driven by consumer demand, but here we have an example of a reduction is the supply of salmon resulting in Pacific salmon fisherman exiting the salmon industry - at least off the coast of Oregon. A big reason for the exit now is that the government has stopped allowing both commercial and recreational salmon fishing in an effort to allow salmon populations to rebound. Another reason is the overfishing of salmon in the previous decade - or longer.

In economic terms, the fishermen that are exiting are doing so because it is unprofitable to stay in business fishing for salmon. According to the article, about 150 out of 1200 boats licensed to fish salmon each year have caught more than $30,000 worth of salmon in the decade before 2006 when commercial salmon fishing was stopped of the Oregon coast. While US government subsidies have helped some fishermen - but not the salmon - the losses are to great for many Pacific salmon fishermen to stay in business.

In response, some Oregon salmon fishermen are heading to Alaska to fish, some are exiting altogether, and some are switching to other fish - such as prawns.

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