Trends in the Cod Market - Admission/Application Essay Example

Trends in the cod market What was the approximate worldwide catch of cod, in metric tons, in 1968 and in 2008? In 1968, the catch was 3 million metric tons, while the catch of cod in 2008 was estimated as 1.1 million metric tons (Waters), (Seafood Market Bulletin). 2. What was the approximate market (wholesale) price of cod block, in 1968 and in 2008? In 1968, the price of cod was $ 21 cents, while in 2008 the price was $1.51 (Whitaker) 3. supply and demand diagram for cod block From the illustration, it is apparent that the demand for the codfishes has risen over the years because of some factors. From 1968, the there is an increase the metric tons of fish that are demanded although the supply is fixed. With this analysis, it is evident that because there is an increase in the demand for fish and no notable increases in the fish population, the demand exceeds the supply of the codfish and this may prove disastrous to the fish population. Consequentially, it may lead to a decrease in the fish population, which leads to an increased demand and higher prices that may lead to the depletion of the codfish. 4. Factors that have shifted the demand curve upwards Shortages in the population of the cod This has contributed to the high demand of the fishes in the world (Waters). In this light, biological explanations of the phenomenon indicate that the prey of the codfish population reduced because of overfishing and lack of better resource management. Further, overfishing has devastating effects which if not controlled could even lead to depletion in the supply of certain resources. With the misconceptions on the inexhaustibility of resources, the cod fishery effects increased and therefore led to the decreased population of the fish. With fewer resources therefore, the law of demand states that the demand is bound to increase by critical levels. In addition, the prisoner’s dilemma principle may have also led to overfishing in most of the seas. This economics concept tries to explain the decisions that would make an individual predict a rival’s move and act in an approach that will maximize the pay-offs. In this light therefore, many cod fishermen have turned to overfishing, because this is what they think other fishermen are also doing before the stocks run out. With this aspect in mind, they will take more than the required share even if an agreement is placed to control the amount of fish they are supposed to take. This has led to the decline in the cod population and therefore raised their demand. Future expectations Expectations of depletion in the population of cod have also led to increases in the demand and subsequent overfishing. With the decreasing population of cod, many fishermen expect that in the near future the cod will not be in existence. This expectation has increased their attempts to get better catches and improve their customer’s high levels of demand. The role of tastes and preferences On the other hand, favorable tastes and preference towards the codfish have also led to the increase in the demand of cod. In this perspective therefore, the fish steak in most countries including Europe have preferred to use the cod fish in most of their cuisine, as the customers continually enjoy the cod (Seafood Market Bulletin). This has made the demand for the codfish to rise steadily, more than the quantities that are available for supply. This has led to higher levels of demand by the customers. 5. Based on the data provided, the catch in 1960 was very low and therefore the demand was very high (Whitaker). This implies that the demand curve shifted upwards and outwards form the previous year. On the other hand, the 1968 compared to 1967 catch was very high. With this large population, it is evident that the demand levels were lower and therefore the demand curve shifted down wards. From the data, the effects on demand are profound in consideration of the years between 1960 and 1971. Between these years, the catch of cod increased gradually up to 1968, and then decreased by the year 1971. With this trend, it is evident that there was a reduction in demand levels steadily due to the abundance of the codfish, and the demand later increased after 1968 when the levels of the available cod stated decreasing. This implies that an increase in the availability of a commodity reduces its demand, while scarcity of the same commodity increases its demand. 6. In 1968: 2057.1/3896.5= 0.5279 The catch from newfound land fell to nearly zero in 1960 7. The cod production did not have efficient levels of production. In this light, if a single firm owned the rights to the fishing grounds, it would have been possible to reverse the problem because granting of such rights would make the overseeing firm cautious on the use of the sea for fishing. Further, the idea of extending exclusive property rights to a single firm would reduce the negative tendencies because granting of the property rights would sideline those who are involved in overfishing in the sea. This would lead to a better allocation of the sea resource, which is a public good, and the payment for the rights would be the compensation to the society for the fishing. Using this principle, economic theories suggest that the negative effects of the overfishing would be controlled. The market failure highlighted is the public goods problem. 8. The Canadian government banned fishing of cod in 1993 (Waters). The Canadian government did not take enough measures to regulate fishing activities. From the decline in the catch recorded form 1968, it is evident that very little was done to control the fishing practices in the sea, implying that unscrupulous people may have taken advantage and used methods that do not support the breeding ability of the cod fishes. From the fact that there is a positive change after the regulation, it is evident that the previous periods did not have proper regulation of fishing activities. Politics is a major influence over the decisions that are made by most governments. In light of this fact, many politicians may have had stakes in the fishing industry and therefore act as impediments to any regulations seeking to control the fishing trends in the country. Further, the politics surrounding the phenomenon may have led to subjectivity in the analysis of the matter, leading to the implementation of weak resolutions that are out of touch with reality. Finally, Canada may have refused to implement good strategies in controlling its fishing to protect its foreign policies with its trading partners to whom they export fish. All these political factors may have undermined good government decisions on the matter. 9. The cod feed on forage fishes (Waters). Although the increase in the number of the prey increases the predator population, overfishing of cod has reversed the trend. In this perspective, the reduction of the cod population allowed its prey to thrive. With the huge population of the forage fishes dominating the seas, it was evident that the food chain was disrupted and this led to situations where the forage fishes’ population increased and ate the eggs of the cod which reduced their population. However, when the population is undisturbed, an increase in the supply of the prey would increase the population of the cod. 10. The ban was very effective because there was a boost in the cod population in the following decade, and this would make the population be restored (Millennium Ecosystems Assessment). The reason behind the slow thrive of the cod population is given in the article as the subsequent feeding of the eggs of the cod by the forage fishes. This aspect slowed the recovery rate of the cod in its ecosystem. The information in the article does not give conclusive decisions that indicate this as the reason for the low recovery rate. Using this explanation, it would be plausible to foresee a future that would lead to the demise of the cod. However, its increase in population may indicate that the destruction of the eggs may not have led to the slow increase in population, but there may have been unregulated fishing activities that took place in the waters leading to the slow growth in population. 11. The markets are relatively stable, but the continued increase in the demand of cod would lead to an increase in their prices (The Fish Site). With this effect therefore, the cod may be in affordable to many people who will be forced to take the available species of other fishes. To this extent therefore, the events in the cod market, notably the increased demand and prices will lead to an increase in demand of other fish species that serve the same purpose in terms of dietary value as the cod. This may lead to the increases in the prices of the other species in the market in the stated period 1968-2008. 12. The aquaculture helps to address the problem of public goods, which has caused the market failure. From the fact that the sea fishing is non-rival and non-excludable, it brings allocation problems to the government. In light of the aquaculture, the two concepts are eliminated and effective allocation is attained in the market. Aquaculture is effective in controlling the problem because the owner of the facility is accountable for the growth and continued sustainability of the fish. Aquaculture will affect prices in the market will reduce the prices of their own species and other species in the sea. This is since a boost in the supply of the commodity reduces the price of the commodity as well as its substitutes in the market. Thus, aquaculture may be used to solve the problems of prices and demand in the cod market. Works Cited The Fish Site. "US Groundfish Market Report - The Fish Site." N.p., 12 Apr. 2010. Web. 23 Apr. 2014. . Millennium Ecosystems Assessment. "Collapse of Atlantic cod stocks (East Cost of Newfoundland)." Millennium Ecosystems Assessment, 1992. Web. Seafood Market Bulletin. "Seafood Market Bulletin." N.p., Nov. 2011. Web. 24 Apr. 2014. . Waters, H. "Collapsed cod fishery shows signs of life | Culturing Science, Scientific American Blog Network." N.p., 1 Aug. 2011. Web. 23 Apr. 2014. . Whitaker, D R. "Why the Cod Shortage? What are the Alternatives?" Fishery Products Research and Inspection Division, 1967. Web. Read More