Quantity trumps quality in the first-hand market for fresh cod from the Norwegian coastal fleet. Photo: Frank Gregersen © Nofima

Project Year 2019

Quantity over quality

 Industrial economics  

The price does not correspond to the quality of fresh cod supplied by the Norwegian fisheries fleet. This can lead to waste.

The quality of the fish depends on the fishing methods and the size of the catch. Researchers at Nofima has shown that fish caught by jigging has the highest quality, followed by line-caught fish. Fish caught by Danish seine and lastly netcaught cod has been shown to have the lowest quality.

Nofima scientists Edgar Henriksen and Thomas Nyrud have recently conducted an analysis on whether this is reflected in the price the fishermen achieve. They were surprised by what they found.

Market failure

“Larger catch size is likely to give reduced quality, yet higher prices are achieved”, says Henriksen.

“This indicates that quantity trumps quality in the firsthand market for fresh cod”, says Nyrud.

The lack of correlation between price and quality is not how a free market is meant to function. The technical term for this is market failure.

The fact that quantity is rewarded higher than quality is most likely due to the way the intensive seasonal fisheries are carried out. The fleet captures up to 90 percent of the total cod quota during the traditional winter/spring fishing season in Northern Norway. The land-based industries are reluctant to refuse low-quality catches, fearing that they will miss out on the large quantities of fish that they rely on.

Reducing waste of values

The survey also investigates claims of underreporting.

“If it turns out that there is in fact a significant underreporting of volumes, it can help explain the apparently dysfunctional relationship between quality and price”, says Nyrud.

“A market that rewards high quality commodities will play an important part in curbing this waste of values”, concludes Henriksen.

He believes the findings provides insights into the factors leading to lower quality, giving a basis for discussing counterinitiatives with industry and authorities.

FINANCED BY:
FHF – Norwegian Seafood Research Fund.

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