fleet size has reached its minimum level).
According to these projections, the average rate of return in the fishery for 2002 is projected to have been approximately -33%, slightly better than initial projections, and the difference between the rates of return in the small vessel sector and large vessel sector also narrowed to a small degree (-27% and -36%, respectively). Economic losses are forecast to continue throughout the fishery on average until 2012, ceteris paribus. As would be expected, these losses cause vessels to continue exiting from the fishery during this time. The size of the large vessel sector and level of associated fishing activity decline continuously, in terms of FTEVs and nominal effort, through 2012 and are expected to have decreased by 39% and 34%, respectively, relative to 2002 levels. However, only the large vessel sector reaches an equilibrium by 2012. Although the number of FTEVs and nominal effort are expected to decrease in the small vessel sector by approximately 29% by 2012, the small vessel sector continues to decrease in size and effort throughout the entire twenty-year simulation. The logic behind this differential result between the large and small vessel sectors is fairly straightforward. Specifically, as large vessels, which predominately operate in offshore waters, exit the fishery, their departure leads to an improvement in the economic performance of the large vessels that remain in the fishery, primarily as a result of increases in CPUE in offshore waters. However, given the migration pattern of shrimp from inshore to offshore waters, the departure of large vessels does not generally increase CPUE in inshore waters where the smaller vessels tend to operate. Conversely, the departure of small vessels improves the economic performance of both small and large vessels by removing competition in inshore waters and by allowing more shrimp to escape into offshore waters (i.e., CPUE should increase in both inshore and offshore waters). Although the economic performance of large vessels is expected to improve more quickly than that of small vessels, ceteris paribus, it must be emphasized that, under current conditions, economic recovery even in the large vessel sector is not expected for several years.
It is important to note that these projections assumed that external factors such as imports, fuel prices, and other costs remain unchanged from their 2002 status. That is, recent information regarding increases in fuel prices, insurance premiums, and imports, and further declines in shrimp prices during 2003 were not incorporated into the model and analysis since final data are not yet available. Since these changes would be expected to further erode the harvesting sector’s economic performance, the projections of economic losses, decreases in fleet size and effort, and the period of time before the large vessel sector stabilizes are likely underestimated. Thus, unless other factors change in a manner that would contravene these adverse impacts, these projections should be considered conservative. Such contravening factors would include those which could be reasonably expected to increase prices. Such factors could include improvements in product quality and successful marketing programs that promote domestic, wild food shrimp, both of which would be expected to increase its demand. Tariffs and other import restrictions (e.g. more stringent standards on the presence of antibiotics in farmed shrimp) could also lead to price increases.
Another major factor in the analysis of future participation in the shrimp fishery both inshore and offshore, is the impacts of Hurricanes Katrina and Rita in 2005. It has been documented that numerous small and large vessels were destroyed from Bayou LaBatre, Alabama to Sabine, Texas, and large portions of the infrastructure that supports these vessels (docks, ice houses, dealers, etc.) were also destroyed. At present it is impossible to determine how many or which kinds (large or small) of vessels will be participating in the shrimp fishery in the next few years.