What is at risk due to informality? Economic reasons to transition to secure tenure and active co-management of the jumbo flying squid artisanal fishery in Peru

The Peruvian artisanal squid fleet accounts for more than 45% of the worldwide landings of the jumbo flying squid (JFS) fishery, the largest invertebrate fishery worldwide. Nevertheless, most vessels involved in the fishery lack secure tenure rights and operate within the informal economy. Interviews and a survey directed to shipowners allowed identification of three economic regimes under which the fleet operates and estimation of annual operating costs, revenues, and added value. Our results show that the fishery has high economic importance in Peru, accounting annually for 9–15% of the total Peruvian fisheries sector's GDP. Even during 2020, highly impacted by the COVID-19, the fishery was profitable and maintained economic accounts not substantially below of previous years. Furthermore, public data on landings and off-vessel and export prices were used to model the impact of supply on price elasticity for fishers and exporters in Peru and Chile. Data showed steep declines in off-vessel prices with increasing supply for Peruvian fishers. Conversely, Peruvian exporters and Chilean fishers and exporters mostly retained stable prices at nearly all supply levels. The paper suggests that the informal status of the Peruvian JFS fishing activity, which lacks co-management mechanisms, is amongst the co-factors explaining the different price elasticity suffered by the Peruvian fishers. In view of the results, we suggest that speeding up the granting of secure tenure rights to the acting operative artisanal fleet and prompt development of co-management arrangements has the potential to bring environmental and economic gains for fishers.