Catch Share allocation schemes

POTENTIAL BENEFITS OF A CATCH SHARE ALLOCATION SCHEME

Replaces the reliance on effort controls such as Days at Sea, Trip limits and Area closures which are designed inefficiencies.

Allows the use of direct output controls which generally can increase efficiencies by catching more fish with less effort units.

Provides opportunities for fishermen to consolidate their effort in the catch share fishery to a shorter time period allowing more time to focus on other fisheries.

POTENTIAL ADVANTAGES CONTINUED: May provide better control for

fishermen to meter their catches to fish price trends

Presents a theoretical opportunity to "right size" the capacity of the fleet to the available resource

Removes many of the pressures contributing to derby fishing mentality.

DISADVANTAGES OF THESE ALLOCATION SCHEMES

Creates an additional cost to the actual fishing effort through lease extraction

Instantly produces a market for accumulating shares for the sole purpose of lease extraction/ dividends

Combined effects of speculators and the urgency for fishermen to secure sufficient shares to survive inflates the permit values.

DISADVANTAGES CONTINUED:

The complexity of a multi-species fishery compounds and exaggerates the problems that plague all catch share schemes

Creates a tendency to consolidate beyond what is necessary or anticipated

LIMITED ACCESS PRIVILEGE PROGRAMS “Federal permit, issued as part of a

limited access system under 303A to harvest a quantity of fish expressed by a unit or units representing a portion of the total allowable catch of the fishery that may be received or held for exclusive use by a person.”

EXAMPLES OF LAPP’S

Individual Fishing Quotas systems (IFQ) Individual Transferrable Quota system

(ITQ) Regional Fishing Associations that

receive LAPP type allocation quotas (RFA)

A Community or other recognized group that is allocated a portion of the total allowable catch

NMFS EXPLANATION WHY SECTOR ALLOCATION SYSTEM IN NEW ENGLAND IS NOT A LAPP.

UNDERSTANDING THE FISHERY PRE-LAPP

State of the fishery resources prior to program design

Historical distribution of fishery resource utilization

Allocation Currency of the existing program

Perceived privileges associated with existing currency

Investment in the existing currency

EVALUATIONS AND ANALYSIS

To what level of granularity should socio-economic analysis be focused? Fleet, vessel size classes, gears, ports, individual fishing operations?

Implications to Net Fishing revenues Implications to the Fishing Permits market Demographics of the participants in the

fishery, age, financial status, individuals, corporations, fleet owners, etc.

THE INITIAL ALLOCATIONTHE MOST CRITICAL ISSUE

Proposed Allocation Currencies to be considered for the LAPP

Allocation Baselines Other applicable statutes such as

Achieving Optimum Yield Distribution of future growth of the

fishery resources Duration

THE NEW ENGLAND EXPERIENCEA FIRST HAND PERSPECTIVE

An ITQ system was implemented without formal LAPP review.

An ITQ system was implemented without conducting a referendum.

The initial allocation was not adequately vetted due to the blurring effect of dealing with a controversial management scheme(sectors) simultaneous to the allocation baselines discussions.

THE NEW ENGLAND EXPERIENCE, CONTINUED:

The vast majority of permit holders either did not believe the amendment 16 would survive political pressures to halt it or they did not understand that Sector Allocation was really creating a shadow ITQ for them that would ultimately become the only currency of access to the fishery.

Framework 44 and the common pool reversal.

OBSERVATIONS / RECOMMENDATIONS The management councils may not be well

suited for determining allocations of LAPP’s. Perhaps MSA should be modified to consider

a national body specifically assembled for the purpose of making final determinations for initial allocation decisions.

The LAPP and Referendum provisions of the MSA should be tightened and clarified to prevent future subversions.