During the 1970s and 1980s, it became clear that catches from New Zealand's inshore fisheries were, in many stocks, exceeding sustainable levels and the economics of fishing were in decline. Global fisheries management practices offered little in terms of answers. The New Zealand Seafood Industry and the New Zealand Government decided to introduce a bold new and comprehensive management strategy through allocation of transferable quota using sustainable catch limits based on the best scientific assessments.

The Quota management System (QMS), defines catching rights that are allocated to fishermen, subject to the Total Allowable Commercial Catch TACC, in order to provide incentives for the conservation of fish stocks and the economically efficient harvest of sustainable yields. This approach had been tried in a less comprehensive manner by both Iceland and Australia, but New Zealand was the first country in the world to develop it as an all-embracing system across all major commercial fisheries.

Before the Revolution

Historically, fisheries management measures revolved around controls on fishing effort (i.e. input controls). Effort controls act to encourage operators to maximise their catches at the expense of quality and to expand fishing capacity and costs within the rules. They also act as an incentive for over-capacity (too many boats) as each fisherman competes to maximise their share of the overall catch. Effort controls combined with a catch limit on the whole fishery may result in "olympic" fishing where the returns are diminished (or exhausted) because of the incentives to increase investment in catching capacity and not to add value to seafood products.

The Revolution

The revolutionary aspect of the QMS is that quota is allocated to fishermen in perpetuity, and can be freely bought, sold or leased. The right to harvest fish commercially now belongs to quota owners (not to the public at large). This right is not a right to the complete stock. The right is only to the annual sustainable yield of the stock, for example, owners of orange roughy quota have the combined right to harvest less than 5% of the total orange roughy stock.

Quota or ITQs are the right to catch a set share of the TACC, but are annually expressed in tonnes of fish of a particular species for a particular Fisheries Management Area. If the TACC is increased or decreased in a given year, the ITQ tonnage for that species increases or decreases accordingly. Annual fees are levied per tonne of quota to cover the costs of management and scientific research. ITQ can be bought, sold or leased and the Annual Catching Entitlements ACE can be traded.