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The national moratorium on individual fishing quota systems (IFQs) is set to expire in September 2002. These programs could radically change the face of our fisheries and fishing communities. If Congress allows the six-year old ban to sunset, the question then becomes, will there be national standards set for these programs? Or will a free-for-all ensue, with each of the regional councils and the National Marine Fisheries Service left to determine who will get quota, who can own quota, how much quota any one entity can hold and under what circumstances quota may be bought and sold? These are the nasty little details that will make the difference in whether an IFQ system will serve fishermen or whether fishermen will become essentially serfs under such system.
Some fishermen’s groups across the nation are eagerly awaiting the end of the IFQ ban. IFQs, they contend, will help them “rationalize” their fisheries -- as well as make some of them a tidy sum through either a grant of a large amount of quota they believe will be coming their way because of their past production and/or a grant of a right that they can then cash in. The regional councils and NMFS are also clamoring for an end to the moratorium, hoping for an easy way to reduce the number of fishermen and/or vessels in a fishery and make their jobs much simpler by turning over much of the allocation of resources to the mythical “free market.”
Processors have long opposed most limited entry systems and IFQs because they reduce the number of fishermen available to buy product from (and, arguably, eliminating “scab” fishermen some processors feel they need to break organized efforts by fishermen to get better prices). They worry they will not be able to recoup their investment in processing plants if fishermen are free to, and can, sell to whoever they want to. However, many processors have now jumped on the IFQ bandwagon, but promoting quotas for themselves, regardless of if they ever owned or operated vessels engaged in the fishery.
At least one environmental group, Environmental Defense (ED), has also been promoting IFQs, contrary to positions held by most in the conservation community. ED has embraced free market theories for resolving a host of environmental issues from pollution credits for addressing air quality, to water markets for addressing Western water allocation and, now, IFQs as a means of managing fisheries. While PCFFA and some other fishing and conservation groups have criticized ED for “having forsaken the likes of Aldo Leopold and Rachel Carson to worship at the shrine of Milton Friedman and Ayn Rand,” the group has nevertheless managed to end up on nearly every Congressional witness list promoting their free market theories of environmentalism.
Not all in the fishing community are ready to embrace IFQs, however, at least not without some strong sideboards regarding their application. Groups such as the Cape Cod Commercial Hook Fishermen’s Association and PCFFA have been wary of IFQs, and are supporting the current moratorium. Questions such as which fisheries are appropriate for IFQs, who will approve an IFQ system, how and to whom will quotas be allocated, who can own quotas, how much quota may any one individual own, whether quotas can be freely sold and, if so, what will be the cost of entry to new fishermen, as well as the cost of administering and enforcing a system, are just some of the issues these fishing groups want addressed in national standards before they place their livelihoods and lives under such a system.
In June, some 35 fishermen’s organizations across the nation, along with a number of community groups, addressed their concerns in a letter to National Fisherman (scheduled for publication in August) calling for adoption by Congress of such national standards if the moratorium expires.
“We are extremely concerned about the potential impact of IFQs on our traditional fishing communities,” said the letter. “We are resigned to the political reality that the current federal moratorium on the use of these policies will likely be lifted, and some form of IFQs will be in place by the end of this year. However, we are adamant that there must be National Standards put in place that will protect the public's access, and result in clear positive alignment with the Magnuson-Stevens Act.”
Actually, part of the reason for the moratorium in the first place was to give NMFS time to draft national standards. But through six years of moratorium NMFS never got around to it, preferring instead to leave the design of each IFQ system solely to the regional management councils. The problem is that the councils are heavily dominated by special interests; depending on what region you’re in it may be recreational or charter boaters, processors or some particular sector of the commercial fleet.
The signatories to the letter, which included many from Alaska, as well as the Pacific Marine Conservation Council and PCFFA from the West Coast, are particularly adamant regarding adoption of a standard for whom could be assigned and own quota.
“Primary among these standards must be a ban on the notion of allocating quota shares to seafood processors. Processor shares would slam shut the doors of the fish market, making it impossible for entrepreneurs to get into the fish buying business. It would force fishermen to sell their catch only to whomever has the resources to buy the most processor shares. Free enterprise as we know it in the fish business would be over, victim to price fixing,” the letter went on to state.
The letter was prophetic. The day after it was signed, and months before the expiration of the IFQ moratorium, the sway the processors hold over at least on regional council became readily apparent. The groups’ concern that councils or NMFS would begin giving away the fishery to processors was realized. On Tuesday, June 11th, the North Pacific Fishery Management Council adopted an IFQ system for Bering Sea crab giving 90 percent of that fishery to processors. That council action, taken in anticipation of an expiration of the moratorium, or at the very least a Congressional exemption, left only the “scraps,” or 10 percent of the resource, to fishermen “to sell to whomever they wanted.” To participate in that fishery, crabbers will now have to operate under quotas given to the processors. Thus, if Congress does nothing and Commerce approves, Bering Sea crabbers would essentially become “ocean sharecroppers.”
Unfortunately, the likelihood of Congress doing nothing, or worse, approving standards allowing processor quotas, is very real. In the House Resources Committee bill to reauthorize the Magnuson-Stevens Fishery Conservation & Management Act, authored by Maryland Congressman Wayne Gilchrest and drafted by the Fisheries Subcommittee majority staff, is language for IFQ national standards. That’s good. What’s bad, however, is that the same language would also allow quotas to be allocated to processors, including those with no history whatsoever in fish harvesting. The Boston Globe, in a June 26th editorial about Gilchrest’s bill, takes the Fisheries Subcommittee Chairman to task, writing:
“Gilchrist would also lift the current ban on individual fishing quotas, an arrangement that allocates portions of the total harvest of a stock among commercial fishermen. He takes a responsible step by acknowledging the need for standards to promote conservation, advance economic viability of fishing communities, and protect smaller vessels. But he takes a giant step backward by extending the quota system to fish processors. To ensure a competitive market and fair prices, fishermen must be free to shop their products to the widest range of processors. Gilchrist's processor quotas risk transforming the ocean into one big company store.”
What is even more troubling than the influence the processors have had on the North Pacific Council, or the apparent influence processor lobbyists have with some members of Congress, is that a number of fishermen’s organizations are apparently going along with it. Indeed, they are being led by processor lobbyists in attacking the Magnuson-Stevens Act itself. That attack, of course, is aimed at the overfishing and habitat protection language in the MSFMCA.
Fishermen should certainly question why any fishermen would be promoting overfishing or habitat destruction that seems contrary to their own best interests. However, fishermen really need to have their heads examined if they are going to blindly follow the processor lobbyists lead in promoting language permitting processor quotas. Which side are you on boys?
It’s time fishermen started to pay attention to this debate. Environmentalists with their lawsuits have become the industry’s favorite whipping boy, a sentiment stirred up in part by NMFS and some regional fishery councils’ members and staff. But seeing red about some closure blamed on lawsuits should not blind fishermen to the fact that they may lose their fishery itself in a massive transfer to the very folks they are selling to. Fish under the conditions and price they give you or tie it up. That’s the way it will be unless somebody begins making noise.
Okay, some may ask, including any number of the plethora of fishery theorists and kibitzers that abound at council meetings, in academia and on Fishfolk, why shouldn’t processors get quota? Let’s review some basics. The difference is that fishermen get fish by catching them. Processors get fish by buying them. Restrictions and limitations on catch, including limited entry programs of which IFQs are a form, apply to the harvest of fish, not the purchase of them. No one is restricting who may buy fish, provided they are licensed.
Unless a processor owns his/her own vessels, they are not engaged in catching fish, only the buying, processing and selling of them. If they’re competitive they can buy the fish fishermen are catching. Nearly every fishing regulation, at least pertaining to harvest, including licensing and limited entry systems, applies only to fishermen -- those actually engaged in the catching of the fish. Processors get their fish by buying them. A processor is a middleman between the fisherman and the ultimate fish consumer; in the course of being a middleman one hopes some service is performed.
Giving the processor a quota creates a second type of middleman. Fish are a public resource and the grant to fish them is issued by the government representing the people. If processors are also given quotas they interject themselves between the government and the fishermen. Fishermen would then have to go to the processor to ask to fish for part or all of the quota given the processor by the government, not just under the government’s terms for conservation, but now under the processor’s terms for price and such other conditions as the processor, this middleman, may unilaterally decide to impose. The processor gets this quota, not based on any past catch history, but based on what they may have purchased in the past, or perhaps based on what they were willing to bid for the quota. If this seems inherently unfair and irrational, it is. But this is the way it could be.
California Congressman George Miller has proposed language for IFQ national standards that would prohibit processor quotas. That language, to either be incorporated in the Magnuson-Stevens reauthorization or in a separate IFQ-Vessel Buyback bill, is important for fishermen if they want to maintain at least a modicum of independence, providing for their families and protecting their communities. But that language is going nowhere if fishermen don’t speak out, including getting some control over rogue organizations blindly following the processors. The sides are being drawn. You’re either for processor quotas or you’re not, and your future is at stake.
In fairness it should be stated that not all processors are promoting processor quotas, and some have sided with fishermen’s organizations opposing them. The problem is that the processor lobby is pushing ahead and they’ve got some fishermen’s groups with them (or at least going along).
While certainly the most important issue right now for fishermen is who will get quota if IFQ systems are adopted, there are a number of other issues to be concerned with in the debate and development of national standards for IFQs in whatever legislation addresses this matter. Some of the key issues are:
Referendum: Who will make the final decision on whether an IFQ system will be established for a given fishery? Should it be a regional council? Should it be NMFS? Or should there be a referendum among those involved in the fishery to decide? Who will participate in such a referendum? And, finally, should there be two referendums: one to decide whether to proceed and one to adopt a final IFQ plan?
Who Gets Quota?: Will quota be allocated to fishermen, to processors, or to some combination of fishermen and processors? Will quota depend on how much an individual caught? Or will it be divided up evenly among the participants in a fishery? Or will it be put up for auction, giving it to the highest bidder regardless of past participation in a fishery or dependence thereon?
Who Participates in the Initial Allocation of Quota?: Will it just be those who have had the biggest landings (or purchases)? What will be the minimum number of years or pounds to qualify for participation?
Who Can Own Quota?: Will quota be limited to fishermen (captains, crew) working onboard a vessel in the fishery, such as the North Pacific sablefish and halibut program? Or can quota be held by shoreside owners of fishing vessels, processing companies or banks? Will conservation or sportfishing groups be allowed to own quota to reduce the amount of fish caught?
Transfer of Quota: Will quota shares be freely transferable, or will their rent or sale be limited to other fishermen? Will there be fees on the rent or sale of quota?
Caps on Amount of Quota Ownership: Should limits be placed on the amount of quota any one individual or entity can own or control? If so, what is a proper cap on ownership or control?
New Entry: Should systems be developed that provide for new fishing entrants -- crew or young vessel owners -- into an IFQ system? Should revolving loans funds be established to facilitate their purchase of shares, or should they be dependent upon banks or processors for the capital necessary to buy quota shares?
Duration of a Quota Program: Should quota systems be of an indefinite duration or should limits be placed on them (e.g., five years) to prevent their becoming private property? If they are for a limited duration, what type of review, what type of controls need to be implemented prior to any extension?
Administration and Enforcement Costs: Should the public underwrite (subsidize) the additional costs of administration and enforcement of an IFQ program, or should they be required to be paid for by the participants (quota holders)? Should auctions be used as a means of recovering these costs, or should other mechanisms be employed such as landing fees, or annual fees based on the amount of quota held by an individual or entity?
Rents or Royalties: Should rents or royalties be collected for the use of public fish resources, similar to those collected for trees from national forests or oil from public tidelands? Should rents or royalties from the fishery resource primarily be paid for by providing employment and economic benefit to the maximum number of people, or simply by collecting a large fee from a few highly profitable ventures? What method should be used to collect any rents or royalties -- auctions, landing fees or a mix?
The above are just some of the questions that have to be addressed in developing IFQ systems. These questions, which barely touch the surface of what any good lawyer would begin asking, are part of the reason national standards are needed. Many of these questions are simply too important to be left up to the whims and prejudices of regional councils or the machinations of NMFS. Depending on how they are answered this will determine whether an IFQ system will work to the benefit or to the detriment of working men and women in our commercial fishing fleet.
The most fundamental issue facing the fishing fleet right now, however, it whether quotas will be issued solely to fishermen or also to others, namely processors. If the answer is the latter then be prepared for fundamental changes in fishing and fishing communities, changes that almost certainly will be adverse to fishermen. The once proud independent fisherman could become the indentured servant of the 21st century. The lines are drawn. Which side are you on?
Pietro Parravano is current President of the Pacific Coast Federation of Fishermen’s Associations (PCFFA), the west coast’s largest organization of commercial fishing families, and a member of the Pew Oceans Commission. Zeke Grader is PCFFA’s Executive Director, and Glen Spain is PCFFA’s Northwest Regional Director. PCFFA can be reached at: Southwest Regional Office: PO Box 29370, SF, CA USA 94129-0370, (415)561-5080; Northwest Regional Office: PO Box 11170, Eugene, OR USA 97440-3370, (541)689-2000; or by email to: fish1ifr@aol.com. PCFFA’s web site is at: www.pcffa.org.