Disentangling Two Decades of Inefficiency and Dynamics in German Brown Shrimp Fishery

The fishery targeting brown shrimp is one of the most valuable fisheries in the EU and the single most valuable coastal fishery in Germany. However, the strong dependence on few wholesalers, fleet aging, supply chain bottlenecks, the reduction of fishing grounds, escalating fuel prices, and other factors threaten the long-term economic perspective. We estimated German brown shrimp fishers' production function and technical efficiency based on a dataset containing all active ships between 2002 and 2021. We employed a panel stochastic frontier analysis to account for the unobserved heterogeneity within the fishing fleet. The dataset contains 3,997 observations. Results showed that aging reduced production possibilities and that the fishery operated under increasing returns to scale. The average efficiency was 83%. Several determinants of inefficiency explained the found heterogeneity. Among them were vessel technical characteristics, participation in producer organizations, and ownership by the skipper.