Optimal effort, fish farming, and marine reserve in fisheries management

In this paper, we develop a bioeconomic model to determine an optimal wild catch harvest and freshwater commercial aquaculture production in a lake that uses cages or floating rafts. Although off-bottom aquaculture activities have less impact on the environment compared to on-bottom aquaculture, it has negative externalities. It takes away the fishing area and hence creates pressure in the open-access fishing ground. It also changes the nutrient and ecological composition of the environment. We recommend the implementation of a reserved area to minimize the impact of fishing and aquaculture activities. The reserve also helps in improving the habitat and restocking the fish population which is declining rapidly. We determine the optimal sizes of the aquaculture and reserve and the optimal effort level that maximizes social welfare. We illustrate our findings using numerical simulations and perform an analysis of the optimal solutions with respect to biological and economic parameters involved in the model.