The following is an opinion piece written by CSF board member Dick Grachek some time ago but time has not altered his view:
The problem with catch shares is not in their “design”. The problem with catch shares is in their existence.
Except for a few “winners” perhaps, it’s a problem for all concerned that this flawed and destructive privatization scheme was even considered, no less established as a management approach.
Catch Shares management has proven to be A Bad Idea: Catch Shares have done nothing to help the fish. Catch Shares have done nothing to help the fishermen and the fishing communities. Catch Shares have done nothing to help the fish consuming public. Catch shares were not put to the referendum vote as statutorily mandated by the MSA. Catch Share Sectors were not “voluntarily” joined by the majority of the fishermen—the common pool was not a viable “option”. The NOAA/NMFS Individual Transferable Quota initial allocation data base was admittedly flawed and inaccurate. Catch Shares had been “ramrodded” through the council process without due deliberation or adequate planning.
Finally catch Shares or ITQ’s are just a tool like any of the others that have been tried; but this one, as it fails, jeopardizes the entire independent small-boat fishery, their shoreside support businesses, and their iconic and much touted communities which could be lost permanently.
Fleet “consolidation” through ITQ’s and the consequent collapse of shore side support facilities, possible factory ship cartels, (legal under the American Fisheries Act 1998), and the transfer of fishing “rights” into the “wrong” corporate hands, are some of the irreversible consequences of this plan. And, as is occurring wherever they have been instituted worldwide, catch shares or Individual Transferable Quotas ultimately spell the end for the independent fisherman and their communities and their shoreside support businesses.
This system leads to over-capitalization in the fishery—clearly not as money flows to the vessels and fishermen—but as it rattles around among the private equity investors and the arm chair captain “sealords” or quota barons. This increases the price of buying the right to catch a pound of fish, until eventually this now inflated over-capitalized right to catch a fish, prices the under-capitalized family fishermen right out of their own fish catching businesses. The “sealords” stay at home and lease quota or collect “rent” while the working fishermen become share-croppers on their own boats.
But don’t take my word for it, there were warnings about this scheme from several established scientific sources before catch shares were imposed:
Dr. Julia Olson (July 1, 2009), “Social Impact Assessment Literature Review: Leasing and Permit Stacking”, New England Fisheries Science Center, Woods Hole, MA writes,
“the primary social impacts that have been documented in empirical cases involving consolidation (explained in greater detail below) range from employment loss, decreased income, decreased quality of life, changing relations of production, structural disadvantages to smaller vessels and firms, dependency and debt patronage, concentration of capital and market power, inequitable gains, regulatory stickiness reduced stewardship, decreased community stability, loss of cultural values, and so on.” (Underlines and parentheses are Olson’s)
Dr. Olson concludes that same introductory paragraph with,
“Thus the question of capacity reduction is ultimately not simply an issue of economic efficiency, but a question of what values to promote and what the future of the fishery and its fishing communities should look like.”
And as far as the “design improvement” or “caps” on ownership of quota goes: Julia Olson again:
“Fisheries that begin with limitations on transferability can quickly lobby to remove them given market pressures as in Canada, Iceland, and Tasmania” (Olson)
Catch shares clearly invite the disastrous effects of private equity market capitalization and ownership of vital resources and services. It’s more of the flawed Milton Friedman “market-capitalize, own, and profitize everything” economics that is responsible for so much of the economic mayhem in the world today.
The fisheries can be successfully managed. With integrity, common sense, and clarity of purpose it can be done. Everyone involved knows that successful effective management is absolutely necessary for survival—but it is also evident that micro-management is impossible.
The “problems” in the complicated North East Multi-Species Fishery have more to do with the huge and detached autonomous bureaucracy we’ve built and its unwieldiness, confusion, and ineptitude, than with a scarcity of fish or uncooperative rogue fishermen. The destructive NGO fostered catch shares or Individual Transferable Quota scheme, embraced by NOAA/NMFS and the regional council, as it was, is an example of how such unwieldy management has failed, and is actually causing most of the problems it is trying to solve.
Actually a fleet of many diverse privately owned small boats is an essential part of the “eco-system”—an essential part that catch shares management destroys through consolidation. A diverse, small boat, family owned and financed fleet has built-in sustainability or inherent restraints and limits. These family fishing operations are restricted by weather and range and limited funding, by market prices, fuel and repair costs; they naturally spend down time (periods of days/weeks not-fishing) because of these factors. And due to the narrow financial margins and weather safety issues, they can only fish for the stocks that are plentiful and within reach of their ports. It is not financially viable for them to fish on depleted stocks or fish through weather that would be normal procedure for a large catcher-processor ship. Such ships and their “vertically integrated businesses” are a result of “fisheries consolidation”. A stated goal of NOAA Fisheries’ Director, Jane Lubchenco when imposing catch shares was consolidation. Catch shares would cure “fleet over-capacity” through consolidation.
The much more intelligent “economy of scale” of many small diverse independent fishing operations, coupled with intelligent management, could secure the health of the resource and the fishery.
Such a fleet of many small “inefficient” boats will sustain the fish, preserve jobs, provide a vital healthy source of fresh food daily, and keep the traditional coastal fishing communities thriving.
Catch shares, on the other hand, are hostile to the sustainability and resiliency of traditional coastal fishing.