Rights-Based Management

NFCC Invites Discussion on Rights-Based Management

NFCC has begun collecting and sharing videos regarding rights-based management in various fisheries, and will soon produce some of our own (see our Vimeo channel). We invite submissions of fair-minded videos and commentary on this subject from interested parties. Please avoid inflammatory content, but if you have a serious critique, NFCC wants to hear it. What are the pros and cons of quotas? What are the problems and challenges? What advantages has your fishery experienced as a result of rights-based management?

The following are links to related articles and editorials:

Cooperative management facilitates salmon bycatch reduction

July 12, 2011

Today, the Bering Sea pollock industry took action to reduce chum salmon bycatch. Through the use of the Inter-cooperative Salmon Agreement, the pollock fishery has agreed to allow SeaState to close an additional 1,000 square nautical miles of fishing grounds to reduce encounters with chum salmon, bringing the total area allowed for closure to 5,000 square nautical miles. This is an area larger than the state of Connecticut, and twenty times larger than the Prudhoe Bay oil fields.

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Catch Share program turns by-catch into new source of sustainable seafood.

July 8, 2011

Last week, the northern rockfish fishery opened up in the Bering Sea and Aleutian Islands. While rockfish is targeted out in Southeast Alaska, this small fishery operates differently and it’s under a somewhat new management style.

It’s only recently that northern rockfish have been treated as anything other than straight-up bycatch. Before the Amendment 80 fleet was established, catcher-processors had a set limit of how much rockfish they could take incidentally while harvesting Pacific Ocean perch or Atka mackerel.

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Keep halibut catch sharing facts in mind

September 19th, 2011

The recent debate over the halibut catch sharing plan (CSP) has been plagued with misinformation. Unfortunately, a recent Daily News editorial (“Halibut? Go for two,” Sept. 18) repeats some of that misinformation.

The statement that the Southcentral (Area 3A) charter businesses were cut 30 percent by the limited entry program (LEP) misrepresents the issue. Charter operators called for limited entry because the industry was overcapitalized and charter fishing had depleted accessible areas of halibut.

In response, the North Pacific Fishery Management Council started working on the LEP in 2006 and cautioned the industry that new entrants after 2005 would likely not qualify for a permit. Nevertheless, the announcement was followed by a speculative increase in charter vessels and then a decline that coincides with the national economic recession.

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Voices from the Waterfront: Meet commercial fisherman Rob Seitz

Meet Rob Seitz, a commercial fisherman who fishes for dungeness crabs and groundfish in the waters off Astoria, Oregon and Ilwaco, Washington. Seitz hopes to work on a fishing vessel in the new West Coast Trawl Individual Fishing Quota program – a catch share program – that began January 11, 2011. Catch share programs dedicate a secure share of the catch to individual fishermen or groups of fishermen. The fishermen can then determine when the weather, markets and individual business concerns are most favorable for catching their specific allotment.

Seitz recently spoke to NOAA about how fishing has changed in the 25 years he’s been a commercial fisherman and his hopes for the future.

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Video: Managing Risks Associated with Constraining Species and Modifying Fishing Behavior

This video features one of the most substantive sessions of the Santa Rosa workshop, and one that fishermen were talking about a lot afterwards.

Penelists included Bob Dooley (President, United Catcher Boats, Owner/Operator F/V Pacific Prince); Merrick Burden (Environmental Defense Fund, Oceans Program); David Jincks (Midwater Trawlers Cooperative); Joe Bersch (Executive VP, Phoenix Processor Limited Partnership); Joe Sullivan (Partner, Mundt MacGregor LLP); Brian Mose (BC fisherman); and Rob Seitz (Captain, F/V George Allen).

 

 

 

Thousands of Coastal Fishermen to Rally in DC on March 21

In another historic show of solidarity, US recreational and commercial fishermen will gather at Upper Senate Park in Washington DC on March 21, 2012 starting at noon in an organized demonstration supporting sensible reform of the Magnuson Stevens Fisheries Conservation and Management Act.

This is a follow-up to a rally in February of 2010 that brought some 5,000 recreational, commercial and party/charter vessel owners, fishermen and people in fisheries dependent businesses from all over the country to Washington. Twenty plus Members of the Senate and House of Representatives spoke regarding efforts to reform Magnuson.

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Bering Crab Quotas Prove Their Worth

Safer, fairer, and saner than expected, “crab rationalization” rewards value creators, aiding one crabber’s fuel-efficiency venture.

 

By Brad Warren

 

This is a story I never expected to write. It’s about a Bering Sea crabber whose ingenious startup venture got an unlooked-for boost from the quota system he and I (like many others) once viewed with deep suspicion. It’s also about the fishermen and processors who transformed their industry from a wasteful scramble for crab into a highly functional business that aligns their interests in efficient production. The result is not flawless, but it is a far, far better fishery than it could otherwise be.

 

After a rainy summer packing salmon around Petersburg, Alaska, the crew of Erling Skaar’s Marco-built crabber North American delivered their final load and gratefully turned the bow southeast. Cruising home to Seattle, Erling and his crew proudly showed several visitors that the 110-foot vessel, driven by a muscular 1,100 horsepower Caterpillar main, was making 10 to 13 knots while burning well under 20 gallons per hour for nearly the entire 75-80 hour trip.

 

Throughout the summer, the North American burned about 20-25% less diesel than similar-sized vessels hauling salmon nearby. Seine skippers who climbed aboard got a glimpse of technology that can make even a Bering Sea crabber work something like a Prius. That fuel efficiency helps Erling compete for charters when the boat isn’t crabbing. It may soon do much more.

 

For seven years, Erling has poured his retirement savings and much of the boat’s annual earnings into engineering and assembling the fuel-efficiency improvements that his new venture, Gentech Global, is now bringing to market. The North American has become a floating showcase for the technology. The main elements add up to a patiently honed form of common sense: a super-efficient, computer-controlled shaft-generator, plus a FloScan fuel meter that allows the crew to track fuel use. Together, these tools permit optimal engine loading and exploitation of the “sweet spot” in RPM that squeezes maximum value from each gallon of diesel.

 

The North American saves thousands of dollars in fuel on each trip between Alaska and Seattle. Now distributors around the world are lining upto represent Gentech in major marine markets, and some commercial vessel owners and fleet managers are .Characteristically, Erling had humbler aspirations in when he hatched the technical concept that grew into this enterprise: he just wanted to pull stable 60-cycle power from a shaft drive despite varying engine speeds.

 

Erling’s venture reflects not only a personal mission, but an evolving culture of efficiency that is gaining traction worldwide in fishing and commercial marine operations. High fuel prices are an obvious spur. But the trend also gathers force as fishing fleets embrace individual quota management systems. Those schemes generally enable vessel owners and processors to make their operations more cost-effective, safer, and better tuned to markets than they could be under old-style “race-for-fish” regimes.

 

Erling has funded his ambitious startup—at a cost exceeding $1 million for engineering, testing, and business development so far—mainly through stubborn thrift. But to his surprise, the complex system of individual fishing and processing quotas hatched by the Bering Sea crab industry in 2005 has eased the burden ofthat outlay.

 

Erling’s chief engineer Henry Pagh, who has helped run numerous sea trials to test and refine the Gentech system, described this advantage during the run back to Seattle: “Once we got quotas, it became much easier to plan and invest, because we knew what the boat could earn. For the first time, we knew what we could catch, and we pretty much knew the price because it’s based on a formula for dividing the wholesale value. So Erling could plan how much of the boat’s income to put into maintenance and how much he could put into Gentech.”

 

 

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Initially, Erling was no fan of the new quota regime. “You could say we were pretty skeptical when it started,” he recalls now. After the North Pacific Fishery Management Council approved the quota plan, Erling explored legal options to block the new scheme. He worried that it would erode fishermen’s bargaining power because it assigned a handful of processing companies the rights to buy 90% of the catch from most boats.  I volunteered to help him write up his arguments for a lawyer to evaluate the case. The lawyer’s advice: drop it.

 

During the early 2000s, while the Bering Sea crab industry wrangled over how to restructure itself to survive on smaller harvests, I wrote a string of editorials for this magazine arguing against the creation of processor quotas.  I respected the processors’ right to press for inclusion in the benefits of any new quota system, but I figured that handing them a lock on most of the catch would tilt the bargaining table against fishermen.  I also reckoned the new system’s elaborate “checks and balances”—designed to protect not just fishermen but processors, crew, and communities — might inadvertently become shackles. I doubted whether crabbers could expect the big gains in price, market access, and safety that fishermen reaped from quota systems in fisheries like halibut and blackcod.

 

Sometimes it’s good to be wrong. A detailed report on the “crab rationalization” program’s first five years went to North Pacific Fishery Management Council this fall, together with a review of the crab fleet’s safety performance prepared by the Coast Guard and the National Institute of Occupational Safety and Health (NIOSH). Together, these documents provide an independent assessment of how crab fishermen, processors, and fishing communities have fared under the new system. The reports lay a lot of worries to rest.

 

Are fishermen getting shafted on prices? No. Crabbers now receive a slightly larger slice of the wholesale pie than they did before rationalization. True, crews are getting thinner slices of vessel revenues, but thanks to consolidation their paychecks have increased.

 

The fleet has downsized sharply, shrinking to about a third its former number, and some communities have seen their role in the crab industry dwindle. But these losses probably were inevitable in a time of reduced catches. Rationalization didn’t cause them. When the resource declined, no management plan on earth could keep every deckhand working and every port awash with crab money.

 

Did the new arbitration and management system burden fishermen with heavy costs?No. For arbitration, crabbers have paid no more than a penny a pound since the program began, and nothing at all in some years because the fee generated a surplus in earlier years. Cost recovery fees for fishery management and enforcement, capped at 3%, also run a surplus, so they were dropped to just over 1% two years ago, and waived completely last year.

 

The industry’s safety record has improved dramatically.  Most of the credit goes to mandatory Coast Guard vessel safety checks. But ditching the derby-style “race for fish” has certainly helped. In the fishery that inspired the “Deadliest Catch” television series, no one has died due to a vessel catastrophe since the quota system took effect. Fishermen are no longer charging out into lethal storms just to avoid losing catch to their rivals.

 

Instead of rewarding the most reckless competitors, the new system of fishing cooperatives binds fishermen together with each other and with processors in mutual quest to maximize earnings from a limited resource. They schedule deliveries and seasons to contain operating costs and to reach markets ahead of competing fisheries—not to cork each other. Through the cooperatives and the price formula established under the new regime, participating fishermen and processors share in the upside from these efforts.  They manage crab production like colleagues working together in a business, not like gladiators in a coliseum.

 

The system isn’t perfect. Processors grumble that the price formula saddles them with an unfair share of price risk, while the rewards go to fishermen. Crew complain they are getting squeezed by some quota owners. Both groups have a point.  But now that the incentives in the fishery mostly reward the creation of value, there is a better chance of reaching a fair deal for all. Meanwhile, the same incentives will help innovators like Erling Skaar provide vessel operators with tools to keep more of their money instead of burning it up in diesel fuel.

 

“Insurance” for Bycatch Article

“Insurance” for bycatch

Pooling risk eases fear of disaster tows

By Brock Bernstein

 

When Dave Smith, skipper of the Lisa Melinda out of Newport, OR heads out to fish for whiting, he worries about whether he’ll be going back out the next day. Bycatch caps for four species of rockfish are so tight that a single bad tow can put a boat in the shoreside whiting sector out of commission for the rest of the season. “I have one pound of yelloweye bycatch quota and that’s not even the head of a fish that can weigh 15 pounds,” says Smith. “And I’m not alone—there are a whole bunch of us who have only one or two pounds.”

 

Welcome to “zero tolerance” management. Fishermen in the shoreside sector have been shut down early in the season when one or two bad tows put them over the bycatch cap for any of four overfished species. But further offshore, fishermen delivering to motherships this year found a way to dodge rockfish bycatch and lessen the chance of a draconian shutdown. How? They embraced a series of sharp-edged rules imposed by their own cooperative.

 

The rules ban fishing for whiting in nine areas identified as “hot spots” for rockfish and require several other practices, such as short test tows, to minimize bycatch. What’s more, fishermen authorized Sea State, an independent contractor that tracks bycatch in real time, to instantaneously close additional areas when required to avoid bycatch hot spots that might emerge during fishing. Violate the coop rules, and you can face fines, legal action to collect damages, restraining orders, prohibitions against fishing, or other actions the board deems appropriate to enforce the coop’s bycatch agreement.

 

What’s going on here? This seems like a lot of freedom for skippers to give up. But the risks of getting “hit by lightning” by a single bad tow are high enough that, as Dave Fraser, the coop manager for the whiting mothership sector says, “It’s better to be in a game where risks are being actively managed than out on your own.”

 

The rules of this new game were established by several amendments to the groundfish fishery management plan, culminating in Amendment 21 in August 2010. This amendment assigned catch shares to participants in the mothership sector based on catch histories of permits within the sector and allowed them to form coops, at one stroke creating the incentives and the regulatory framework for a sector coop to manage both whiting and bycatch quotas. Boats could then either join a coop or remain independent and participate in a derby-style fishery. None of the permit holders were willing to go it alone, so all 37 joined a single cooperative.

 

As Dave Fraser puts it, the key to the coop’s success is its attempt “to design a cooperative program that provides for individual accountability without giving individual ownership of the constraining bycatch species – the four allocated overfished rockfish species.”  The result works a bit like insurance. The coop pools the entire bycatch quota associated with each permit’s catch history while crafting rules that hold skippers and owners individually accountable for their bycatch performance. Participants retain ownership of their whiting quota but not of their bycatch quota and the bycatch agreement all coop members sign includes a mix of collective risk sharing and individual accountability that is triggered when specific thresholds are crossed.

 

This seems to be working. The season opened May 15 and by late September the participants were still happy with the results. “We are way ahead of the game in terms of bycatch rate,”said Bob Dooley, one of the mothership skippers. And at least one skipper in the fishery would have been out of business early in the season without the coop’s risk pool to cover his bycatch.

 

But it’s taking some time to figure out how best to apply the coop’s system of requirements, incentives, and sanctions. The season is divided into four periods.Permit holders must declare (at least 15 days before each period opens) how much of their quota allocation they want to put into that period. The coop then puts an equivalent percentage of the bycatch quota for the four overfished rockfish species into a risk pool for that period.

 

Things get interesting once bycatch starts to occur. If the boats can catch the entire whiting quota for a period without hitting a bycatch cap, then everyone is home free, regardless of how much bycatch any individual has. But there may be times when the fishery has to shut down when it reaches one of the limiting rockfish caps. When that happens, any individual with more than 125% of their prorated allocation of that rockfish species may be done for the year.

 

Here’s where it starts to get complicated and the planning becomes challenging. If a boat hits 125% of its prorated bycatch share in period 1, and hasn’t declared its intended catch for subsequent periods, then it is done for the year. It can lease its remaining whiting quota for the year but can’t continue fishing itself. However, if a boat reaches the 125% limit for period 1, but has already declared an intended catch for other periods, then it can fish in those later periods, but will have to leave on the table any whiting quota that remained uncaught in period 1 when the fishery was shut down.

 

The closures, bycatch rules, and authority to sanction violations seem to have created a system of balanced incentives that is allowing boats to catch their whiting quota while avoiding bycatch problems and fostering individual responsibility. This is complemented by a willingness to share information among skippers. For example, Bob Dooley has collected a set of bycatch avoidance tips from the most experienced skippers and has encouraged skippers to “consult your fellow fishermen” to learn more about best practices and the risks of particular fishing areas. Joe Sullivan, a Seattle lawyer who has participated in the design of several catch share and coop programs, says the key is “rewarding the skippers involved for modifying their view of the world from information hoarding to a more collective, information sharing view.”

 

The shoreside whiting fleet has no comparable “insurance” from pooled bycatch quota.Instead fishermen own their individual bycatch quotas. Even though about 60% of the inshore whiting quota had been caught by late September and, overall, rockfish bycatch remained below that 60% mark, several boats had been forced to quit fishing because they reached their individual bycatch caps.In principle, tradeable permits allow unlucky fishermen to buy their way back into bycatch compliance. But in reality, those with excess bycatch quota remaining were reluctant to put it on the market.

 

This appears to reflect a structural disadvantage of individual—as opposed to cooperative—ownership of quota. As Dave Fraser describes it, “everyone is concerned about lightning hitting them” and is reluctant to trade bycatch quota until they have caught their target quota for the year. As a result, the shoreside sector may end up using its bycatch quota less efficiently than the mothership sector. This realization has prompted shoreside fishermen to begin considering creating their own risk pool. “We’re doing this because there is safety in numbers,” says Dave Smith, the skipper from the shoreside fleet.

 

The coop and its risk pool have eased some of the risk facing vessels in the whiting mothership sector. But the rules and the need to fish as carefully as possible have increased the stress involved. It’s a far cry from Bob Dooley’s recollection of what fishing was like a few decades ago. Still, in a world where one pound of yelloweye can shut him down for the year, he and the other skippers in this sector wouldn’t have it any other way.