Read the text below and answer questions 14-26.
Iceland's Cod Quota System
Cod has been central to Iceland's economy for centuries, and by the mid-twentieth century the fishery had become one of the country's most important industries. Open access to the fishing grounds, combined with increasingly efficient trawlers, meant that by the early 1980s catches were badly outpacing what the cod population could sustain. Marine biologists warned that without intervention, the stock faced a serious and possibly irreversible decline.
In response, the Icelandic government introduced a system of Individual Transferable Quotas, or ITQs, in 1984. Each year, a scientific committee estimates the Total Allowable Catch based on stock surveys, and this total is divided into individual quotas allocated to vessel owners according to their historical share of the catch. Crucially, these quotas are not fixed to a single vessel or owner: they can be bought, sold, or leased, allowing fishing rights to move toward those who can harvest them most efficiently.
The policy was controversial from the outset. Owners of large trawlers, who held substantial historical catch records, received correspondingly large quotas, while owners of small boats in coastal villages often received barely enough to remain viable. Many smaller operators argued the system rewarded existing scale rather than skill or need. Nonetheless, over the following fifteen years, the cod stock showed steady signs of recovery, and by the late 1990s catches had stabilised at a level well below the historic peak, but considerably more predictable than during the years of open competition.
That stability came at a social cost. As quotas were traded, they tended to concentrate in the hands of fewer, larger companies, often based in a handful of ports. Several small fishing communities that had depended on local boats for generations saw their quotas sold away entirely, leaving harbours empty and processing plants closed even as the national cod population recovered. Economists studying the policy have described it as a case where a resource was successfully rescued biologically while leaving unresolved questions about who should benefit from that recovery.
An international fisheries certification body reviewing the Icelandic cod fishery in the early 2000s initially hesitated over these social concerns, given that its usual focus was strictly environmental. After extended consultation, the reviewers concluded that the fishery met their sustainability criteria on biological grounds, while separately recommending that Iceland consider policy measures to support the coastal communities affected by quota consolidation. Since then, several other countries managing their own depleted fish stocks have studied the Icelandic system as a possible model, while debating how to avoid its social side effects.
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