Dynamics of Physical Capital in Artisanal Fisheries and Policy Implications

The dynamics of physical capital stock and net investment in artisanal fisheries of Al-Seeb, a coastal fishing town of Muscat Governorate, were examined covering the period 2004-2013. Data was gathered from two sources namely the Ministry of Agriculture and Fisheries and field survey. A hedonic regression model was used to examine the influence of boat characteristics on the boat acquisition prices and then to derive the growth rate of physical capital stock. Boat characteristics comprising of ‘age’, ‘horsepower (hp)’ and ‘length (vl)’ were found to be statistically significant at the 5% level and carry sign consistent with the economic theory of depreciation and cost respectively. While inter-annual fluctuation of net investment was observed, a positive trend in cumulative investment with an average growth rate of 7.63% was experienced in the fishery during 2004-2013. A crude assessment of the operating costs and the gross revenue of surveyed boat- owners in 2015 showed that on average monthly economic profit of 571±169 SD OMR was received by individual boat-owner, which complements the positive trend in cumulative investment. These findings have important management and policy implications in relation to the effective management of harvesting capacity as well as attract investment in the fishery. Finally, some limitations of the study are discussed along with the indication of potential future research.