A fisheries management model that identifies the economic optimal management of fisheries under the influence of nutrients is presented. The model starts from the idea that growth in fish biomass increases with increasing availability of nutrients owing to higher food availability up to a peak, after which growth falls due to eutrophication.
The model is applied to Swedish and Danish cod fisheries in the Western Baltic Sea and identifies the welfare contribution of the fisheries, measured as the sum of resource rent and producer surplus. In 2010, the welfare contribution was -28% of the landing value. Maximizing the model with respect to effort alone and additionally over nitrogen concentration increases the contribution to 11% of the landing value in 2010. The analysis shows that the welfare effect of reducing fishing effort through management reforms is large, but that the effect of incorporating nitrogen in fisheries policy is small.