Monday, March 14, 2011

The more things change...

There is a decent chance that some things will change in the coming year for fisheries management. At the very least we know that there will be some turnover in the NEFMC (New England Fisheries Mnagement Council) as several positions on the council including Chairman John Popallardo's hit their term limits. We also know that the lawsuit filed by the citites of Gloucester and New Bedford and joined by the Commonwealth of Massachusetts against the federal government and the Cape Cod Hook Fishermen's Association will be heard this week.

Both of these things could shake up the current state of management...or they could just be more of the same.

Commercial fishing is one of the most heavily regulated industries in America. And, in my opinion one of the best examples of bad management leading to bad outcomes. One can make the case that the overfishing that is the crux of the problem for fishers and regulators is the direct result of management decisions to encourage fishing after the introduction of the EEZ. Low cost loans were given to fishermen to encourage them to replace the international factory boat fleet that was decimating our local waters. So they bought bigger better boats and caught all the fish.

Are we bound for a repeat? Current regulations have created an essentially unregulated commodities market for fish quota. In effect, an investor could come in and buy up all of the rights to fish. In fact this may be happening already. Since there is no regulation, it is impossible to know. Its a bit ironic given that fishermen face a web of regulations on a day to day basis in order to go fishing. Here is one firsthand account of what fishermen face. (There is some spicy language in that blog, so fair warning.)

There is an alternative, and there is a growing chorus from fishermen up and down the coast that the fundamental composition of the fleet is at stake. I've heard from fishermen from Maine to New York who were given such low allocations of fish that they cannot make a living. Leasing quota is possible, but also means that you make very little to no money.

For example, the current price for Cod quota is around $1.50 per pound. The ex-vessel prices for cod (the price fishermen get at the dock for their catch) varies between $2-$3. So fishermen who lease quota receive roughly half of what they do if they fish un-leased quota.

Meanwhile, the lessor of quota gets $1.50 a pound to do nothing, and benefits from a quota constrained market that has kept fish and quota prices high. The only vessels that can actually make money on leased quota are the larger vessels as their leasing costs are a smaller portion of their overall costs. In effect, yet another perverse regulatory incentive that favors the large vessels and the well capitalized at the expense of the smaller vessels.

There is a place for large vessels, but there should also be a place for the smaller vessels as well. Are we seeing the last of the dayboat fleet? Could be...unless something changes...

3 comments:

  1. Doesnt your program buy off the large vessels? Dont the small vessels bring in mostly cod? yet you delivered pollock all week, what boats did these come from? were they day fresh or week old? you mentioned the cost of cod, but we got pollock how much is it to lease pollock?

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  2. Very good questions, and thanks for posting.

    CAFC buys primarily from "smaller" vessels. The question of vessel size is not one of absolutes but rather balance. I hope I've made it clear that there is a place for large and smaller vessels in a diverse fleet. It does not make sense for small vessels to have to fish far out to sea, nor does it make sense for large vessels to be fishing the inshore grounds. Ideally there is an appropriate blend of vessel size, and gear type. The concern expressed in the post is the current trend of the small vessels exiting the fishery. This trend has broad ecological and economic consequences. The best way to understand this is to compare the current situation in fisheries to the broad disappearance of family farms over the last couple decades.

    There is quite a bit more to this question than I can cover right now, some of which has been talked about in previous posts, but if there is interest, I can spend more time on it for next weeks blog.

    As to your other questions:
    Dont the small vessels bring in mostly cod?
    No, small vessels bring in all species of groundfish. I dont have the vessel name for the pollack in front of me at the moment, but I'll post that as soon as I do get it.

    CAFC fish is almost always day boat fish, or in the case that day boat fish is not available, we purchase "top of the catch/last haul fish" which is basically the last fish caught on a multi-day trip. You will never get week old fish from CAFC, and only very rarely will you get fish that is not 24 hours or less from the ocean.

    How much is it to lease pollock? Again an excellent question. If you asked me this last summer the answer might have been $2 or more per pound. Now pollack quota is worth very little. The reason illuminates once again the perverse impact of regulations on the eco-system.

    When the initial allocation of quota were handed out last May, the pollack quota was very low. So low that many fishermen considered it a "choke stock". Under the new sector system, once a permit holder reaches/exceeds his quota for any single species he must stop fishing entirely.

    Fishermen cried foul that the pollack assessment was too low, was not supported by good science and would force an early end to fishing. But in the meantime, pollack quota was valued very highly. Then in late summer, NOAA "found" 600% more pollack. (And the details of this story also illuminate some of the more suspect aspects of fisheries "science". How did they all of a sudden find so many more fish in the data? The answer is they didn't, they just reinterpreted the data.) So all of a sudden everyone had plenty of pollack and the value of the quota plummeted.

    Just for comparisons sake, the latest auction prices in Gloucester for cod were $2.40-$2.88/lb while pollack was $.89-1.12/lb. Cod, for better or worse is often used as a sort of market proxy when talking about groundfish prices because it tends to be one of the higher priced and therefore prized by fishermen, and it gives a good snapshot of the market.

    I hope that answers some of your questions. There is certainly a lot more to the story than can be told in one blog post at a time, and your questions are really good ones. I encourage you to look through some of the older posts as some of these subjects have been tackled before, but I am always willing to take on a subject if it is of interest to the readers.

    Thanks,
    Sean

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  3. The vessels that brought in the pollack last week:

    Mon=Captain Dominic
    Tue=Theresa Marie IV
    Wed=Jennifer and Emily
    Thu=Jennifer and Emily
    Fri=Ang. Micelle

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