Individual transferable quotas are one means used in fisheries to limit the magnitude of the harvest to sustainable levels. After setting a total allowable catch that is compatible with preserving the population, individual harvesting quotas are parceled out to individual fishers such that the sum of the individual quotas equals the total allowable catch.
Fishers must surrender sufficient quota to cover their harvest. When harvests are not legitimized by sufficient quota, sanctions are imposed. Initial quota allocations are typically based at least in part on past fishing experience.
In addition to simply using their quota to justify harvest, quota recipients also have the option of buying more or selling any excess to others.
Advantages of successful transferable quota systems include the prevention of overfishing, preserving the stock of fish, and raising both the value of the fishery and the profits derived from it.
Not all applications of this approach have been successful, however. Success requires effective monitoring and enforcement, and in fisheries this is sometimes a significant challenge.