Title: Bioeconomic analysis: A case study of the industrial pelagic fisheries in Cape Verde

This paper develops a bioeconomic model to identify optimal management of the pelagic fisheries, applied to the industrial pelagic fisheries of Cape Verde. The result of the analysis of the period 2003 to 2012 show very high fluctuation in the net benefits of the fishery. The net benefits were mostly negative due to excessive fishing effort which results in high cost, while the total revenue remains weak. The current (2012) fishery reference situation indicates a slightly excessive fishing effort. Hence, the fisheries exist at a stage that requires care in terms of management with bioeconomic criteria at levels very close the biological equilibrium (BE). Despite this, it is known that adequate fishery management is necessary to achieve sustainable fishing, so this current state represents an opportunity for management. By analysing this scenario, we emphasise biological and economic outcomes. To achieve maximum sustainable profits, around 111,602 thousand CVE annually equal to 22% of the total revenue, the fishing effort must be reduced from 6,264 to 3,752 days at sea in a long-run sustainable option. However, it must only reduce from 6,264 to 5,042 days at sea to achieve the maximum sustainable profits around 32,827 thousand CVE annually, equal to 6% of the total revenue, in a short-run sustainable option. The fundamental problem of economic inefficiency in fisheries, the called common property problem, may be seen to be caused by inadequate property rights in the underlying natural resources. Due to this lack of property rights, trades in the natural resources cannot occur. As a result, markets cannot form and, consequently, there are no market forces to guide behaviour to the common good. All potential economic rents from the fishing activity are fritted away by investment in excessive fishing capital and fishing effort. Moreover, this economic waste is generally accompanied by an unjustifiable reduction in and, sometimes, even decimation of the biological capital, the fish stocks. However, the analysis shows that the main source of improvement of the fishery management in this case of study is linked to the implementation of the ITQs to the harvest sector, to correct this management failure, and reduce the fishing efforts and rebuild the fish stock. ITQs have been introduced in numerous fisheries around the world, apparently generally, even consistently with good economic results.