4
Alternative Conservation and Management Measures

Effectiveness of Fishery Management Measures

The purpose of fisheries management is to control the exploitation of fish populations so that the fisheries they support remain biologically productive, economically valuable, and socially equitable. Maintenance of productive fish populations and associated ecosystems must take into account the variability of ecosystems and to be successful may require caution in setting total allowable catches (TACs). Economic value of fisheries may require creating systems that are economically stable over time and may require minimizing unemployment. Systems to address these goals will fail unless they are administratively feasible and politically acceptable.

A number of biological characteristics of fish stocks impact the effectiveness of management measures: the stock's geographic range, the migration patterns of its members, the usual life span of individuals, the fecundity and spawning potential of the population, the annual variability in recruitment and population size, interactions with other species, and the species' role in the ecosystem.

National Standard 3 specifies that each individual stock should be managed as a unit throughout its geographic range. If individual fishing quotas (IFQs) and other fishery management measures do not encompass the complete stock, they are unlikely to be effective, with the unmanaged portion of the stock becoming overexploited, thereby forcing increased conservation measures in the managed portion of the fishery. This situation is most likely to occur when stocks range across state-federal boundaries, across boundaries between nations, or into the high seas. Close coordination and complementary management systems across jurisdictional boundaries are particularly important.



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--> 4 Alternative Conservation and Management Measures Effectiveness of Fishery Management Measures The purpose of fisheries management is to control the exploitation of fish populations so that the fisheries they support remain biologically productive, economically valuable, and socially equitable. Maintenance of productive fish populations and associated ecosystems must take into account the variability of ecosystems and to be successful may require caution in setting total allowable catches (TACs). Economic value of fisheries may require creating systems that are economically stable over time and may require minimizing unemployment. Systems to address these goals will fail unless they are administratively feasible and politically acceptable. A number of biological characteristics of fish stocks impact the effectiveness of management measures: the stock's geographic range, the migration patterns of its members, the usual life span of individuals, the fecundity and spawning potential of the population, the annual variability in recruitment and population size, interactions with other species, and the species' role in the ecosystem. National Standard 3 specifies that each individual stock should be managed as a unit throughout its geographic range. If individual fishing quotas (IFQs) and other fishery management measures do not encompass the complete stock, they are unlikely to be effective, with the unmanaged portion of the stock becoming overexploited, thereby forcing increased conservation measures in the managed portion of the fishery. This situation is most likely to occur when stocks range across state-federal boundaries, across boundaries between nations, or into the high seas. Close coordination and complementary management systems across jurisdictional boundaries are particularly important.

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--> Many fish stocks undergo predictable migrations on a seasonal or longer time scale, either for feeding or reproduction, or in response to changing environmental conditions or physiological needs. Such stocks can become stratified so that younger and older animals are geographically separated and the fishery may become stratified, with different groups of fishermen harvesting different segments of the stock. If this occurs, a major obstacle to effective fishery management may be resolving the allocation of harvest (and bycatch) among the geographically separated fishermen. In the case of species that migrate across national boundaries (e.g., Atlantic and Pacific salmon, Pacific whiting, and tuna and billfish species), catch allocation conflicts can become especially difficult to resolve, as vividly illustrated by the difficulties surrounding breakdown of the Pacific Salmon Treaty. Most fish stocks in temperate seas breed seasonally and exhibit high variability in their annual production of offspring. In some stocks, the largest year classes are as much as several hundred times larger than the smallest year classes (Myers et al., 1995). This large variability in recruitment leads to great uncertainty in determining appropriate TACs, which generally are based on the notion of a well-measured, functional relationship between the size of a parent stock and its subsequent production of offspring. Because recruitment is often highly variable and seemingly independent of parental stock size, it is extremely difficult to determine how much of the stock to leave behind (i.e., how to set the TAC). Interannual variability in the growth rates of individuals is another source of uncertainty for some fish stocks. In regions of the Gulf of Alaska in 1980, for example, 12-year-old Pacific halibut were twice the weight of halibut of the same age in 1996 (IPHC, 1997). However, the presence of uncertainty and variability is not adequate grounds for rejecting TAC-based management because TACs can be designed to reflect variability and risk. Most marine animals are strongly affected by their environment; the influence of the varying biophysical environment on stock size and the condition of individual animals has long concerned fishery scientists. Small (almost unmeasurable) changes in growth and mortality rates during early life that are attributable to environmental variability can lead to significant changes in annual recruitment and persistent impacts on stock size (e.g., Hofmann and Powell, 1998). Although some recent studies of fish population dynamics emphasize "surprises," discontinuities, and uncertainties (e.g., Botkin, 1990; Ludwig et al., 1993; Wilson et al., 1994), the continuing dominant approach of applied fish population dynamics and bioeconomics that emphasizes deterministic, single-species linear relationships and equilibrium conditions may not account for the realities of many fisheries. One very difficult fishery management situation, which is sometimes described as the "mixed-stock fishery" (Ricker, 1958; Paulik et al., 1967) or "mixed-species fishery" problem (Clark, 1985a), arises when biologically productive (fast-growing and fecund) and unproductive (slow-growing, late-maturing, slowly

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--> reproducing) fish stocks occur on the same fishing grounds and are caught by the same fishing gear. When TACs are based on the more productive stock, the less productive stocks can become seriously depleted or even driven to commercial extinction while the more productive stocks continue to support good harvests. Too many individuals of the less productive species may be taken, reducing the number of fish available to spawn in subsequent years. For example, one rare species of skate in the Irish Sea apparently was harvested to extinction even though it was only caught incidentally (Brander, 1988). To protect the less productive stock, it is necessary to forgo harvesting most of the greater productivity of the more productive stock unless some fishing technique can be developed that allows fishermen to selectively harvest fish from the more productive stock while avoiding fish from the less productive stock. Many salmon fisheries in the Pacific Northwest are managed to protect weak or endangered stocks, with the result that significant harvests of more abundant stocks of hatchery fish must be forgone. Such characteristics of fish stocks present numerous challenges for designing management systems, especially systems based on setting TACs, such as an IFQ program. Ease in measuring a fish stock, its spatial and temporal distribution, its age-class structure, and the types and numbers of other fish species inhabiting the fishing grounds are among the more prominent characteristics that affect management systems. Because of such complicating factors, it is not unusual for disputes to emerge among fishery scientists and fishermen over the abundance and robustness of fish stocks, even when scientists are highly confident in their stock assessments. In part, this occurs because fishery scientists and fishermen pay attention to and experience different types of information. Fishery scientists base their models on large-scale characteristics of entire fish stocks, such as fish population recruitment, mortality, and population size over the species' entire range. Fishermen pay attention to small-scale characteristics of fish populations and select fishing areas to maximize catch or net revenue per unit effort. In contrast, fishery scientists base their stock assessments on random samples acquired over the population range. Consequently, each group may develop a very different view of the dynamics of fish stocks. These different viewpoints complicate management by increasing the difficulty of building consensus on problems and solutions and gaining support from fishermen for various management practices, such as setting TACs. Fishery management under the Magnuson-Stevens Act must be consistent with the National Standards for Fishery Conservation and Management (Sec. 301, Title III, 16 U.S.C. 1851; see Appendix D). These ten standards apply to prevention of overfishing, use of scientific information, equity of allocation, prevention of excessive share, efficiency of utilization, minimization of bycatch, cost-effectiveness of regulations, safety at sea, and importance of fishery resources to coastal communities. As the general guidelines for all U.S. fishery

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--> management, the effects of management measures, including IFQs, must be evaluated against these standards. A number of different management measures address the intent of the national standard guidelines and are discussed in this chapter. Most fisheries, including those with IFQ programs, are managed using a combination of such measures. The degree to which any given measure or combination of measures leads to outcomes that achieve the national standards depends on the interaction between the measures and the biologic, economic, and social attributes of the fishery being managed. Different measures vary in their ability to address the different national standards, and the effectiveness of each management measure depends on the specific management context. Some combinations of measures in some contexts might achieve the same goals as IFQs. For purposes of discussion, fishery management measures are divided into four general types: input controls, output controls, fees and taxes, and technical measures. This discussion follows the general structure of a recent report of the Organization for Economic Cooperation and Development (OECD, 1997) that provides an in-depth review of the performance of various management measures used by OECD member nations. In addition, this chapter discusses alternative management processes based on shared authority between governments and users. Input Controls Input controls are the oldest type of fishery management tool. Designed to limit either the number of people fishing or the efficiency of fishing, input controls are the type of measure adopted when a fishery is first managed. Input controls include restrictions on gear, vessels, area fished, time fished, or numbers of people fishing. They apply to both commercial and sport fisheries, and may be applied to an entire fishery or to segments of it. Input controls are considered to be an indirect means of limiting the exploitation of fish stocks because they do not directly control the amount of catch (Sissenwine and Kirkley, 1982). Input controls generally lead to inefficient outcomes. They clearly lead to more variable yield than output controls. Fishermen may be able to substitute unrestricted inputs for restricted inputs, thereby maintaining catch levels above those anticipated under the restricted input. Most inputs in most production processes are unrestricted most of the time. For example, there are no legal limits on the numbers of "skates" of longline gear, hook spacing, type of bait, composition of longlines, engine size, or number of crew members that can be used in the halibut and sablefish longline fisheries. Gear Restrictions Gear restrictions limit the type, amount, or use of particular fishing gear. Regulations on the type of gear include minimum mesh size for trawl codends to

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--> allow escape of small fish, excluder devices to minimize bycatch of protected species, specification of trap design and material, limits on the spacing of hooks on longline gear, and minimum mesh size for trawls or gillnets. Regulations on the amount of gear include limits on the numbers of traps, the number of longlines in a set, the length and width of a gillnet, and the size of trawl openings. Limits on the use of gear include the definition of legal gear for specific fisheries, such as longline gear in the North Pacific halibut fishery, and the prohibition of particular uses of gear, such as trawl gear in the Maine lobster fishery. Sport fisheries are also subject to gear regulations such as limits on the type of hooks or prohibitions against using barbed hooks or live bait. Gear regulations are widely used in fishery management, often in conjunction with other measures such as time and area closures and license requirements. They often reflect traditional practices in a fishery. Although gear restrictions may be effective in achieving certain limited conservation goals such as decreased mortality of fish returned to the sea or protection of endangered species, they alone are inadequate to control overall exploitation or achieve larger stock protection goals (Rettig, 1991; OECD, 1997). In fisheries that are managed with weak direct controls on exploitation, gear regulations are typically made progressively restrictive over time in an attempt to counter the effects of increasing numbers of participants or intensified fishing. The restrictions decrease the efficiency of fishing, leading fishermen to try to substitute other inputs to make up for constraints on gear. Gear restrictions can, however, be relatively simple to design and enforce (Sissenwine and Kirkley, 1982). If the gear is sufficiently specialized, gear limitations may be effective at controlling effort (e.g., the Florida spiny lobster fishing trap certificates; see Appendix G) (see Hermann et al., 1998 and Greenberg and Hermann, 1994, for discussions of the efficiency and equity effects of pot limits in the Alaskan king and Tanner crab fisheries). Gear restrictions usually do not prevent the race for fish because they do nothing to control the other dimensions of fishing effort, such as vessel size, engine power, or number of crew members. To the extent that substitution of inputs can occur, the race for fish simply switches to a new dimension (Anderson, 1977). Vessel Restrictions Vessel restrictions place limits on the type, size, or power of vessels used in a particular fishery. Typical restrictions include limits on vessel design, length, or engine horsepower. Vessel restrictions are frequently used in conjunction with licensing requirements, gear restrictions, and other management measures that attempt to control the amount of fishing. Like gear restrictions, vessel restrictions are an indirect and limited means of controlling fishing and can produce unintended consequences as participants enhance those inputs that are not controlled. For example, limits on the number of vessels allowed in the Bristol Bay sockeye salmon fishery led to the replacement of small, slow vessels with larger,

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--> faster vessels (Muse and Schelle, 1989). Subsequent restrictions on vessel length led to increases in vessel width and engine horsepower. Both outcomes hindered the goal of limiting the growth of fishing power.1 In combination with gear regulations, however, vessel restrictions can be somewhat effective in impeding capital stuffing2 when there is limited ability to substitute unconstrained inputs for constrained inputs (ICES, 1996, 1997; OECD, 1997). Licenses Licenses and license endorsements may be used to certify fishermen or vessels, without limitation on the numbers issued, or they may be used as a management measure to limit the number and types of vessels or fishermen that can participate in the fishery. License limitations are intended to limit fishing capacity and effort, but their effect on either is indirect. Limited licenses are used both in federal fisheries, such as the Hawaiian lobster and Pacific groundfish fisheries, and in state fisheries, such as the California sea urchin and Oregon pink shrimp fisheries. Licenses and endorsement limits can also be linked to vessel and gear requirements. In some fisheries, limited licenses are tradable. When licenses are limited and tradable, the value of the license typically varies over time, reflecting changes in expected earnings from the fishery. For example, the price of Alaskan salmon limited entry permits has declined as farmed salmon production volume has increased. Similarly, there was a temporary decline in the value of Prince William Sound, Alaska, salmon limited entry permits that can be attributed to the 1989 Exxon Valdez oil spill. (Note, however, that the value of Kenai Peninsula salmon permits averaged $287,222 in 1996.) When licenses are attached to fishing vessels, such vessels typically acquire a value greater than their value as production equipment. Fleet capacity can be controlled only partially through license limitation. If licenses do not stipulate a maximum vessel size or other limits on fishing power or capacity, the capacity of the fleet can drift upwards as small vessels are replaced with larger ones. The problem arises because size is only one dimension of fishing power. Also, attempts to control size can lead to adaptations that are inefficient or unseaworthy. To the extent that fishing power can be controlled successfully by license stipulations, such requirements might be impediments to 1   Fishing power measures the ability of a fishing vessel (and its gear and crew) to catch fish, relative to some standard vessel, given that both vessels are fishing under identical conditions (e.g., simultaneously on the same fishing ground). 2   Investing in gear, technology, engines, processing lines, and other capital components of a fishing operation in order to maximize the ability of a vessel or processing facility to harvest or process fish. These investments are made so that the vessel or processing facility can harvest and process fish as rapidly as possible under a derby fishery or in a race for fish.

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--> technological progress, because new and better vessel designs would not be compatible with the licensed design. Controlling the fleet capacity by licenses does not encourage economic efficiency to the same extent as controlling fleet capacity indirectly by IFQs. When IFQs would be difficult to monitor or enforce, however, license limitation could be a viable alternative. Nevertheless, license limitation alone is, at best, a short-term approach with short-term benefits. In the long run, the performance of a license limitation program depends on its use in combination with other management measures. Individual Effort Quotas Individual effort quotas limit the number of units of effort that a given vessel, license holder, or fisherman can use. In such systems, each participant is allocated a certain number of effort units, such as the number of traps (see Appendix G for a description of the Florida spiny lobster trap certificate program) or days at sea. In the United States, effort quotas have their broadest application in pot fisheries for crustaceans, although they are also used for Atlantic groundfish and scallops through fleet-wide “days-at-sea" limitations (OECD, 1997). The initial allocation of individual effort quotas can be determined by a variety of mechanisms, including historic catch levels or vessel size. Effort control measures are frequently combined with gear restrictions, license limitations, and vessel configuration limits. The conservation effects of individual effort quotas require limits on entry and are strengthened when combined with a TAC (OECD, 1997). Tradable effort quotas are similar to IFQs, except that as input controls they are only indirectly associated with output. As indirect controls on output, they will be effective in controlling total catch only if there are no other inputs (time, space, gear, behavior) that can reasonably be substituted for the restricted input and if the link between inputs and catch is predictable and relatively stable. In some fisheries, effort units may be traded among license holders or vessels. If effort quotas are transferable, some efficiencies will be realized as quota shares are fished by fewer vessels. However, effort quotas will not eliminate the incentive to invest in gear innovations to increase catch rates in the race for fish. Evidence collected in OECD member countries supports the expectation of capital stuffing with individual effort quotas and associated increases in operating costs. In addition, individual effort quotas are in many cases difficult and costly to enforce, particularly when strong incentives for compliance are absent (ICES, 1996, 1997; OECD, 1997). Time limits are one form of effort quota. Time limits seek to reduce the harvest of a given species, or group of species, in an area by reducing the amount of time available for harvesting or by controlling the particular time period over which the species can be caught. The total amount of fishing time allowed at a

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--> specific location is often controlled through the specification of a fishing season. Seasonal closures are temporary in nature and are often used in conjunction with area and gear restrictions. Seasonal restrictions have been used extensively throughout the United States and internationally (Rettig, 1991). A single season may be used, or multiple season openings may be set to spread out landings over time. Seasons can vary in length from months to several minutes as in the case of the fishery for herring roe in the North Pacific region (Hourston, 1980). The typical result of time limits is that the length of the season declines over time as fishing effort increases, so without other management measures, time closures lead to a less efficient and more costly race for fish. The use of seasons or time-area closures generally is not effective in meeting either efficiency or conservation goals (OECD, 1997), although time limits can help processors regulate the flow of product more efficiently, as was the case in the surf clam/ocean quahog (SCOQ) fishery management regime prior to IFQs (Appendix G). Time limit measures may also specifically limit the number of days at sea. In the SCOQ fisheries prior to IFQs (in 1990), each vessel was allocated a number of hours per week or quarter that it was allowed to fish. In the New England and Mid-Atlantic groundfish and scallop fisheries, time limits are now being imposed through limits on days at sea per vessel (NEFMC, 1996). Time limits are an attempt to control the effect of excess fishing capacity indirectly. They are only indirect controls because, like other input control measures that limit one dimension of fishing effort, they create incentives to develop other dimensions of effort, such as the fishing power of gear and vessels. Time and season controls can be useful, however, to protect spawning stocks, encourage harvesting at times of peak value, and reduce the effects of localized depletion on forage opportunities for marine mammals and seabirds. However, time limits do nothing to prevent overcapitalization; rather, they encourage it. Output Controls Output controls are management techniques that directly limit catch and hence a significant component of fishing mortality (which also includes mortality from bycatch, ghost fishing, and habitat degradation due to fishing). Output controls can be used to set catch limits for an entire fleet or fishery, such as a total allowable catch. They can also be used to set catch limits for specific vessels (trip limits, individual vessel quotas), owners, or operators (individual fishing quotas), so that the sum of the catch limits for individuals or vessels equals the TAC for the entire fishery. Output controls are commonly used in recreational fisheries, taking the form of bag and possession limits that constrain an individual's daily or annual catch. Output controls rely on the ability to monitor total catch. This can be achieved by either (1) measuring total landed catch with reliable landings records, port-sampling data, and some estimates of discarded or unreported catch; or

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--> (2) measuring the actual total catch with at-sea observer coverage or verifiable logbook data. Total Allowable Catch Total allowable catch is a management measure that limits the total output from a fishery by setting the maximum weight or number of fish that can be harvested. TAC-based management requires that landings be monitored and that fishing operations stop when the TAC for the fishery is met. A TAC is based on stock assessments and other indicators of biological productivity, usually derived from both fishery-dependent (catch) and fishery independent (biological survey) data (see NRC, 1998a). Data collected from fishermen, processors, or dockside sampling can be combined with at-sea observations and independent fishery survey cruises to provide information about the total biomass, age distribution, and number of fish harvested. Typically, the TAC is determined on an annual basis, but then partitioned across seasons. To the extent that a TAC is well estimated and enforced, it can control total fishing mortality on a stock (e.g., Pacific halibut). However, experience shows that management by a TAC alone is insufficient to eliminate the race for fish and incentives for capital stuffing. In the long run, without other management controls, management under a TAC leads to dissipation of all fishery rents (Rettig, 1991; OECD, 1997). The relationship between recruitment and stock size, which is a key part of TAC calculations, is usually difficult to measure reliably because recruitment is often highly variable and, for some species, seemingly independent of parental stock size. Hence, it is extremely difficult to guarantee that conservation objectives will be satisfied by a given numerical TAC or by an IFQ program based on such a TAC. However, stochastiscity and uncertainty about the relationship between recruitment and stock size does not preclude the development of a TAC; it may be possible to develop a risk-compensated TAC based on precautionary principles. The risk of overfishing is greater with no TAC than with a precautionary TAC. Recent National Research Council (NRC) studies have stressed the need to address stochasticity in the development of TAC recommendations (NRC, 1998a,b). Trip Limits and Bag Limits Trip limits and bag limits are measures that pace landings by limiting the amount of harvest of a species in a given trip. Trip limits are applied in commercial fisheries when there is interest in spacing out the landings over time or a desire to specify maximum landings sizes, and they are usually accompanied by a limit on the frequency of landings. For example, many Pacific groundfish species are restricted in terms of pounds landed per week or month (PFMC, 1993). The Pacific groundfish trip limit system was adopted for the purpose of

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--> maintaining year-round fisheries and provision of fish to markets. Trip limits were an important management tool in the pre-IFQ fishery, in which they were used to minimize TAC overruns during end-of-season mop-up fishing. Trip limits are usually set to allocate the timing of landings throughout a season when capacity exceeds the TAC. Fleet efficiency declines as vessels make low-capacity trips. Fishing up to the limit during each trip also means that more fish are caught than can be landed, and discards result (Sampson, 1994). Trip limits also heighten the incentive to highgrade catches. As trip limits get more restrictive, the percentage of catch that is discarded increases (Alverson et al., 1994). If trip limits are uniform across the fishery, they may have negative distributional consequences for large vessels, similar to the effect of pot limits on the distribution of benefits described for Alaskan king and Tanner crab fisheries (Greenberg and Hermann, 1994). A bag limit, used in many recreational fisheries, is similar to a trip limit. Bag limits restrict the number of fish that can be retained in a given day. Bag limits are used in most marine recreational fisheries, including red snapper in the Gulf of Mexico, striped bass in the Mid-Atlantic region, and black rockfish in Oregon and Washington. Trip and bag limits often are combined with license or endorsement requirements, time and area restrictions, and vessel restrictions. Individual Vessel Quotas Individual vessel quotas (IVQs) are used in a number of fisheries worldwide, including some Canadian and Norwegian fisheries. IVQs are similar to IFQs, except that they divide the TAC among vessels registered in a fishery, rather than among individuals (Boxes 4.1 and 4.2). BOX 4.1 Individual Vessel Quotas In Norway The Norwegian share of the TAC for each fish stock (shared with the European Union or Russia) is partitioned among different vessel groups. For the largest vessels (trawlers, purse seiners) there are individual vessel quotas. For other vessels, there are group quotas and maximum vessel quotas: that is, no vessel can take more than its allotted maximum quota. The maximum quotas are based on vessel size categories, with all vessels in the same size category receiving the same maximum quota. Neither these nor the IVQs are transferable. Individual quota allocations are nevertheless indirectly transferable for the longer term through buying and scrapping a licensed vessel and "stacking" its quota on another vessel.

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--> Vessels fishing under a group quota are regulated by stopping the fishery when the group quota has been taken. In fisheries regulated by maximum vessel quotas, it is easier to ensure that the catch stays below the TAC. The derby effect becomes increasingly forceful, however, when the quota allocations are decreased. In 1990 and 1991, when the TAC for Arcto-Norwegian cod was extremely small, most of the coastal vessels fishing this stock were put under an IVQ regime. The allocation of annual quotas in the purse seine fishery is regressive; that is, the largest vessels get a proportionally smaller quota than the small vessels. The philosophy behind this is equalization of incomes; there are economies of scale in the purse seine fleet, and larger vessels would obtain a proportionally higher catch value than smaller vessels if all could be used to their full capacity. The formula is determined by the Ministry of Fisheries after consultation with the industry. BOX 4.2 Individual Vessel Quotas in Canadian Pacific Coast Fisheries Individual quota programs for the commercial fisheries of western Canada include one established in 1990 for the longline and pot fishery for sablefish; another established in 1991 for the longline fishery for Pacific halibut; and a third established in 1996 for the trawl fishery for groundfish. These IVQ programs are coupled with a variety of additional fishery management measures including limited entry, vessel size limits, gear restrictions, time and area closures, and marine reserves. Prior to IVQ implementation these fisheries used limited entry and were considered to be overcapitalized. Improvement in economic efficiency of the fishing fleet was one of the key reasons for adopting IVQs, from both the industry and the government perspective, and the programs resulted in major reductions in the size of the fleets and the numbers of crew members. The government and industry in western Canada adopted IVQ programs after having considerable experience with other fishery management tools. The committee heard testimony that the limited entry programs in Pacific Canada had not been effective at limiting fishing effort; instead, the value of the license may have added economic incentives for license holders to fish even more intensely. In some fisheries, trip limits were used to slow down the legal catch but they did not stop the race for fish. Trip limits continued to decrease from one year to the next and resulted in considerable discarding, highgrading, and misreporting. A system of individual transferable effort quotas, which limited the number of fishing days, also failed to stop the race for fish. Instead, it resulted in significant overruns of TACs (>20%), which in turn led to shorter and shorter time allotments in subsequent years.

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--> Community Fishing Quotas Building on the concept of community development quotas, community fishing quotas (CFQs) could also be used to direct the flow of economic and social benefits from a fishery to coastal communities. “Community" can be defined at different scales, leading to community fishing quotas specified at a community, regional, or state level (Chapter 1). CFQs may have a variety of objectives and a range of designs beyond the development of fishery infrastructure. New Zealand's individual transferable quota (ITQ) program contains two examples of community quotas. One example is the quota owned by the Local Authority Trading Enterprise (LATE) at the Chatham Islands, an isolated group of islands about 400 miles east of New Zealand. The LATE owns, on behalf of the geographic community, about 1,200 metric tons of quota for inshore species that it leases only to residents of the Chatham Islands. The other example is one of a quota held by a community of interest and cultural identity. The Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 effectively transferred ownership of almost 40% of the New Zealand ITQ to the Maori people. A large proportion of this quota is held by the Treaty of Waitangi Fisheries Commission. Pending resolution of permanent allocation issues among the tribes, the commission leases ITQs to local iwi (tribes) on an annual basis. The iwi may fish the quota themselves, lease it, or get fishermen to use it on their behalf. Community quotas have also appeared recently in the Scotia-Fundy region of Atlantic Canada, in the context of resistance to adoption of ITQs on the part of small-scale fishermen and coastal communities. The first case, in 1995, involved an agreement to allocate part of the TAC for a particular area to a geographic community (Sambro, Nova Scotia), which could decide how to allocate it, rather than to require ITQs, which are otherwise used widely in the area (Apostle et al., 1998). Subsequent grassroots efforts and a series of demonstrations and occupations of government offices expanded the principle of community-based management to the "fixed-gear" sector of the commercial industry in the Bay of Fundy region (Kearney et al., 1998). Two "community management boards" were formed in 1996. The Canadian Department of Fisheries and Oceans allocates quotas to these boards for three groundfish species, based on their collective catch history. In consultation with their members, each board develops a management plan through a process that is designed to involve all license holders and to be based on consensus and, in one case, consultation with an advisory committee representing community, environmental, and professional interests. The boards have no formal legislative capacity to enforce their management plans; instead, they use contract law, requiring fishermen to sign a contract that they will follow the management plan and accept designated penalties for violation. Fishermen who decline may participate in a government-run management regime. These boards have also become the basis for fishermen's participation in

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--> fishery research and an overarching council for the bay as a whole (Kearney et al., 1998). Another way to implement CFQs would be to modify existing legislation and practice to allow communities and other organizations, such as cooperatives and community development associations, to enter into the markets for IFQs where these have been established. At present, this is not possible in the North Pacific region because of a strong distinction between IFQs and CDQs. This distinction is maintained in many rules, including a rule of the North Pacific Fishery Management Council requiring that the holders of IFQs be on board the vessels, and a congressional restriction of CDQs to the Bering Sea. Also, the halibut and sablefish IFQ programs require quota share purchasers to be fishermen. Voluntary Cooperatives An effort to allocate fishing quotas voluntarily among a group of catcher-processor vessels in the Pacific Northwest has shown preliminary signs of success (Box 4.4). In addition, measures recently adopted under Senate Bill 1221 include statutory authority for catcher-processors, shore-based processors, and motherships to form similar cooperatives in the Bering Sea-Aleutian Island pollock fishery. Moreover, the bill included financial inducements that are only available if such cooperatives are formed. This type of cooperative arrangement based on private contract negotiations to sub-allocate quota shares within a group of fishermen with reliance on civil litigation to enforce the agreement is similar to California's adjudicated groundwater basins, as described in Chapter 2. Fees and Taxes Fees and taxes have been used extensively in some common-pool resource settings to control the production of disamenities (e.g., visual and chemical pollution) or to slow the depletion and utilization of natural resources. Economic theory suggests that appropriately designed fees and taxes can lead to socially optimal levels of resource utilization. However, the level of knowledge required to design optimal taxes or fees is difficult to achieve. Consequently, attempts to control resource use through taxation have met with limited success. With few exceptions, the application of fees and taxes in fisheries has been primarily intended as a source of revenue to offset administrative and enforcement costs and to fund product marketing activities. Fees Fees are used in many IFQ fisheries to support fishery management, for example, in the North Pacific halibut and sablefish fisheries (being developed) and in the New Zealand and Canadian IFQ fisheries. Fees also have been applied

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--> BOX 4.4 The Pacific Whiting Cooperative Pacific whiting is used primarily for the production of surimi, a protein paste used for various products in Japan and for artificial crabmeat sold in the United States. Surimi from Pacific whiting accounts for about 4% of worldwide surimi production. Thirty-four percent of the 1997-2001 Pacific whiting quota has been allocated to catcher-processor vessels. In April 1997, the four companies holding limited entry permits in the catcher-processor sector agreed to allocate among themselves the portion of the harvest designated for their sector. The principal objectives of their agreement were to eliminate a fishing derby within the sector and to reduce bycatch of other species. They formed a cooperative for this purpose and requested that the U.S. Department of Justice approve their proposal in order to avoid possible antitrust prosecution. The Department of Justice approved the agreement, noting that it did not appear to have any "incremental anticompetitive effort in the regulated output setting" and could have a procompetitive effect to the extent that it allowed for more efficient processing that increases the output of processed Pacific whiting or reduces the inadvertent catching of other fish whose preservation is a matter of regulatory concern. The cooperative subsequently announced that implementation of the agreement in the remaining portion of the 1997 fishery had apparently resulted in nearly 20% improvement in yield and significant reductions in bycatch. The whiting cooperative has at least two characteristics that may have been essential to its success: It allocated a known quota that had been specified to the cooperative group (at-sea processing vessels). It consisted of a small number of homogeneous participants. Note, however, that this agreement was not harmless. There is anecdotal evidence that freed-up capacity has been diverted from the whiting fishery and spilled over into other fully capitalized fisheries (e.g.. the yellowfin sole and rock sole fisheries in the Bering Sea), exacerbating existing excess capacity and reducing the catch for historic participants in these fisheries. Of course, this negative side effect could be caused by any limited entry system. Note: This information is based on a letter from Joel I. Klein (Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice) to Joseph M. Sullivan, dated May 20, 1997. to non-IFQ fisheries. The level of fees can be based on a variety of criteria, including vessel and gear configuration, catch, or past participation in the fishery. Fees are commonly used in fishery management in conjunction with fishing licenses. Fees are generally used in support of the management infrastructure, not as a means of controlling exploitation or increasing efficiency. Targeted fees

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--> are sometimes self-assessed by industry to support research or capacity reduction programs, as in the recent proposal by the West Coast trawl sector to finance a permit buyback system (PFMC, 1998). However, in order for a general fishery fee system to limit capacity or control exploitation, fees would have to be sufficiently high to make fishery operations unprofitable for some classes of fishermen or vessels, a politically unrealistic strategy. Taxes Taxes, much like fees, can be used to recover the costs of managing a fishery or to generate income for a region, state, or nation. Taxes can be assessed on inputs, raw product, or value-added product. In addition to generating revenues, each of these forms of taxation can be expected to affect the choice of inputs and the demand for products. The extent to which the tax burden is borne by harvesters or processors, or passed on to product purchasers depends on the elasticities3 of supply and demand in relation to price. Most fishery taxes are currently assessed on the landed value of the fish. They are seldom applied directly as a fishery management tool, although they have the potential to be used in this way because they have the effect of increasing the cost of landing fish (Rettig, 1991). Taxes generally are not effective instruments for controlling the amount of fishing itself, unless they are used in conjunction with other management measures, or are sufficiently high to be an economic barrier to participation. Taxes also tend to lack general political support, but they are likely to be more politically acceptable when the funds are directed toward improving fishery conditions (Rettig, 1991). Taxes might be a particularly useful tool for encouraging bycatch avoidance. Different types of taxes will be discussed in the next chapter. Fluctuations of fish stocks, fish prices, and TACs are major obstacles to relying solely on taxes and fees as direct management measures because of uncertain short-term reactions of fishermen to changes in taxes. Taxes and fees do, however, offer potential for capturing some fishery rents. Technical Measures Technical management measures are those that affect how inputs to the fishery-gear, vessels, or effort-relate to outputs (OECD, 1997). These include limits on fish size and sex and limits on areas fished. 3   Elasticity is a measure of the degree to which supply or demand are sensitive to changes in price. When small changes in price lead to large changes in the quantity demanded, demand is said to be elastic. Conversely, when large changes in price lead to small changes in the quantity demanded, demand is said to be inelastic.

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--> Fish Size and Sex Limitations Management measures based on fish size or sex attempt to maintain stocks by enhancing their reproductive and growth potential. This type of regulation protects individual fish if they have not yet matured to spawning size or if they are important to reproduction, and it allows fish to be caught at a larger size. Sex and size restrictions are used extensively in crustacean fisheries, such as the West Coast Dungeness and Alaskan snow, Tanner, and king crab fisheries, in which only males with a minimum carapace length can be retained, or the New England lobster fishery, in which only males and non-egg-bearing females above a minimum carapace length may be retained. Minimum fish sizes are frequently used in conjunction with gear restrictions, for example, the minimum size of sablefish combined with a minimum trawl mesh size in the Pacific groundfish trawl fishery. However, minimum fish size rules apply to the retention, not the capture, of undersized fish. Some mortality of undersized fish will result from the process of catching and discarding. Means of protecting small fish vary from country to country; some make landings of undersized fish illegal so the fish must be thrown overboard at sea, whereas in other countries, all fish—including undersized ones—must be landed (called full retention). If captured fish can survive upon release, which is primarily true for crustaceans, mollusks, finfish without closed swim bladders caught in pot or trap fisheries, and some hook-and-line fisheries, requiring immediate release is the most common practice. Release of undersized fish has no conservation benefits in gillnet or trawl fisheries and may have limited benefit in other fisheries because the undersized fish are likely to be dead when returned to the sea. Enforcement of size and sex regulations may be costly. In addition, regulating for size and sex of fish, while appropriate for biological productivity goals, does nothing to alleviate the race for fish (OECD, 1997). Area Restrictions Area restrictions limit the geographic region within which fishing is permitted. Area closures are usually temporary—expressed as time-area closures—and are focused on specific types of gear or vessels to prevent harvest during spawning, provide nursery areas for juveniles, or protect species during other vulnerable life history stages. Area restrictions are often applied to geographic regions that have particular conservation needs related to spawning, feeding, or preservation of other ecological services. Area restrictions are also used to allow juveniles to grow to a full, more valuable, size. For example, fishing in the Shelikof Strait area for Gulf of Alaska pollock is prohibited during the spawning season, and trawl gear is kept out of crab or lobster grounds during molting season. In fact, Bristol Bay and large areas above the Alaska Peninsula are permanently closed to trawling to reduce bycatch mor-

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--> tality of crabs. Area closures have also been used to avoid interactions between fishing operations and marine mammals (e.g., 10- and 20-nautical-mile buffers around Steller sea lion rookeries and haulouts in the Gulf of Alaska and the Bering Sea). In New England, closed areas have been used to protect critical habitat of the northern right whale. Area restrictions also can be used to reduce conflicts between interest groups by setting aside some areas for single gear types or by dividing fishing areas between commercial and recreational fisheries. Area closures or regional segmentation of TACs can have distributional consequences (e.g., Criddle, 1996). Area restrictions are complementary to IFQs and can be used in IFQ-managed fisheries. For example, residents of Sitka, Alaska, hold more than 1.7 million shares of halibut quota and have proposed a "local area management plan" for halibut fishing. The plan, adopted by the North Pacific Fishery Management Council (NPFMC) in February 1998, would close most of Sitka Sound to larger commercial vessels and charter boats during the months of June, July, and August. Area closures are frequently used in conjunction with gear and vessel restrictions and are relatively easy to enforce. Enforcement of closed areas tends to be more cost-effective when areas are closed to all fisheries than when they allow some fishing (Rettig, 1991). Some areas are permanently closed to fishing, such as marine reserves and harvest refuges.4 Set-asides are developed when areas have ecological importance for fish spawning and feeding, as biological communities, or for the preservation of marine biological diversity. Marine reserves may be designed to allow restricted fishing in certain portions of the reserve and banning fishing in other sections. Parts of Georges Bank off the New England coast are closed permanently year-round to protect areas thought to be critical to the spawning and feeding of several groundfish and shellfish species. Australia has established 11 marine protected areas, including the Great Australian Bight in 1997, which won the support of tuna vessel owners and the South Australia Fishing Industry Council. New Zealand has created a number of "no-take" zones and other protected areas under its Marine Reserves Act. Another function of marine reserves is to serve as a source of replenishment for the stock outside the reserve. The extent to which reserves can be effective in providing these conservation services depends on the size and productivity of the reserve, migration habits and life history patterns of fish and shellfish, and ocean circulation patterns around the reserve (Roberts, 1997b). It also depends on how the reserve is designed, whether it displaces fishing activities from the reserve into greater concentrations outside the reserve, and whether other limits on fishing are in place. Without other restrictions on effort, if marine reserves displace 4   The NRC has another study underway to assess our scientific knowledge of marine protected areas as tools for fisheries management and protecting marine biological diversity.

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--> fishing or increase the profitability of fishing outside the reserve, the resulting intensity of fishing could increase to the point of nullifying biological or economic gains from the reserve. Although there is evidence that closed areas contribute to general conservation and the protection of biodiversity, they may not be sufficient to meet fishery conservation goals when used alone (OECD, 1997). There are many unanswered questions about the design, implementation, and effectiveness of marine reserves in achieving broad-scale conservation goals. Use Rights in Fishing Territorial use rights in fishing (TURFs) assign exclusive use rights over a fishery area to an individual or group (Christy, 1982). They are a special case of area restrictions and are analogous to grazing rights. In many cases, traditional territorial use rights are applied in less industrialized and smaller-scale coastal fisheries where management has been based on restricting participation to a localized population in a limited geographical area. The use of TURFs is most suitable for species that are relatively immobile or predictable in location, such as mollusks and crustaceans. Because participants in Bering Sea king and Tanner crab superexclusive5 area registration fisheries are precluded from participating in other (more lucrative) crab fisheries, few large vessel operators choose to participate, effectively reserving the superexclusive registration fisheries for local, small vessel fleets. Consequently, superexclusive area registration amounts to a form of common property TURF (Hermann et al., 1998). TURFs may be used in conjunction with fishing gear such as fish-aggregating devices, pound nets, or other entrapment and enclosure devices (Christy, 1996). The establishment of regional lobster zones in the State of Maine shares elements of a TURF, with specific management zones established in geographical regions based on the distribution and historic participation of fishermen (Acheson and Steneck, 1997; Wilson, 1997). These mechanisms can be used to provide continued access for traditional uses of a specific area. Stock-use rights in fishing (SURFs) are similar in concept, establishing exclusive use rights to a fish stock or combination of stocks (Townsend, 1995). TURFs or SURFs may be held by individuals, cooperatives, corporations, communities, or other organizations (Christy, 1996). The conservation effect of this type of management depends critically on the migration rate of the fish, the number of people with a right of access to an area, and their beliefs about what 5   Superexclusive area registration is a management tool used by the Alaska Department of Fish and Game for some (small) Bering Sea crab fisheries. Participation is open to any vessel, provided that the vessel agrees not to participate in any other crab fishery. Because this tool is applied to crab fisheries with low guideline harvest levels and because participation in the fishery precludes participation in any other Bering Sea crab fisheries, few vessels choose to participate. Most of the vessels that do choose to participate are small and local to the fishery.

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--> must be done to sustain fisheries. For most fish stocks, the TURF would have to cover an extensive area to provide an effective control of an entire stock, or fishing for a particular stock would have to be prohibited outside the territory. TURFs could be useful, however, to minimize spatial conflict among fishermen, for example, those who use different kinds of fishing gear. Fishing areas requiring or prohibiting certain gear types are used in some regions. Exclusive harvest rights to fisheries in geographically distinct regions have been used in many areas to eliminate the open-access problem. Alternative Management Processes Co-management processes and their more specific forms are a useful element of the discussion of IFQs and their alternatives because they represent collective approaches to decisionmaking that bring together users, regulators, and other stakeholders (Wilen, 1985). As such, they offer the potential to address social and equity goals in the context of IFQ management. Co-management Co-management is joint management between resource users and government. It is characterized by two important properties: the sharing of decisionmaking power and a focus on the management process. It is a process, rather than a tool, of management and thus can be used with a variety of management tools. Co-management encompasses different degrees of power sharing between stakeholders and government, from formal power sharing (Jentoft, 1989; Pinkerton, 1989) to "active consultation" (Hanna, 1995; Jentoft and McCay, 1995). The co-management process defines stakeholders and incorporates them, through various forms of representation, into the fishery management process (Costanza et al., 1998). In this sense, the council process under the MSFCMA is a limited form of co-management in which resource users participate in allocation decisions and are appraised of resource conservation and stewardship actions pursuant to the public trust in the fishery resources. Fisheries managed through traditional techniques such as TACs and licenses could involve participants in co-management, as could fisheries managed using IFQs (Box 4.5). When co-management succeeds, it confers a legitimacy on regulations that may increase compliance and reduce monitoring and enforcement costs (Jentoft, 1989; Sen and Nielsen, 1996). However, co-management is often a costly process that requires good relational skills among participants (Hanna, 1997) and is vulnerable to stakeholder fragmentation and incomplete representation. Also, like other management processes, it is vulnerable to sabotage by special interests (Hanna, 1994). Co-management processes have potential for administration of an IFQ program after it is in place (Box 4.6).

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--> BOX 4.5 ITQs in the Scotia-Fundy Small Dragger Fleet of Canada The ITQ management regime for the Scotia-Fundy small dragger fishery is a case in which ITQs might not seem feasible but have turned out to be. This case also highlights the importance of a user-supported, major investment in monitoring and of cooperation between government and industry in decisionmaking (McCay et al., 1995; Apostle et al., 1997). The fishery extends along the coast of Nova Scotia, Canada, from the Cabot Strait off Cape Breton to the Bay of Fundy, extending to the border with U.S. waters in the south at a line that bisects Georges Bank. Historically, cod (Gadus morhua), haddock (Melanogrammus aeglefinus ), pollock (Pollachius virens), and flounder (e.g., Pleuronectes ferrugineus) have been the most valued species. The Canadian Department of Fisheries and Oceans (DFO) uses total allowable catches for individual species, which are allocated according to gear type, vessel size, and management area. Vessels range from 30-foot gillnetters to 100-foot catcher-processor vessels. DFO created individual quotas (IQs) in 1991 for the small draggers, most between 40 and 65 feet and using otter trawls. The story is a familiar one of overcapacity creating management difficulties. After Canada established its 200-nautical-mile exclusive economic zone in 1977, this inshore small dragger fleet grew dramatically in fishing power, stimulated by government loans and grants and rising prices for fish. By 1989, its capacity was four times that required to harvest the resource at a conservative level (F0.1: Burke et al., 1994). Many measures were used to control capacity but none was successful, and the annual management plans became increasingly complex and contentious as this fleet demanded more fish. When negotiations over quota allocations broke down in 1989 and the fishery was closed in midyear, a task force recommended using ITQs as a way to reduce capacity, although some features of the small dragger fleet would not be considered appropriate for an ITQ program. There were 455 licensed vessels, which landed at more than 75 ports and had access to hundreds of others. It was a multispecies and multistock fishery, and other fleets also had shares of the TACs in these stocks as well. The small dragger fleet was known to be uncooperative, independent, and not interested in ITQs. Nonetheless, within a year and a half, the ITQ program was in place. Among the factors making this possible were determination on the part of DFO, backed by political commitment; increased awareness of how serious the overcapacity problem was when the fishery had to be closed down midyear (Burke et al., 1994); and DFO's use of an industry-government committee for planning and co-managing the system (McCay et al., 1995; Apostle et al., 1997). Also important to its political acceptability were design features intended to preserve the owner-operator, community-oriented nature of the fishery-for example, requirements that holders of ITQs be bona fide, active fishermen; limits on how much of the overall quota could be held by any one person; and limits on transferability. Because Canada had earlier negative experiences with ITQ programs in this region, unusually careful attention was given at the start to monitoring and enforcement issues, as well as the administrative penalty system. Consequently, when it

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--> began in 1991, with the 327 license holders who elected to participate, a new third-party dockside monitoring program (DMP) was in place, with local weighmasters and centralized operation centers and with the understanding that this would become self-funding over time. The fishing industry was directly involved in setting up and evaluating the DMP. The goal was 100% monitoring of landings. By 1993, the DMP was fully funded by industry, and there was consensus that landings data collection had improved, although problems with at-sea discards, highgrading, and misreporting remained (Angel et al., 1994). Evaluations of the small dragger ITQ management regime are complicated by drastic declines in TACs because of badly depleted groundfish stocks. Both ITQs and resource declines have resulted in concentration of landings to fewer vessels, ports, and fish buyers (Burke et al., 1994; O'Boyle et al.. 1994). Price changes suggest improved fish quality in the ITQ fleet. There is some evidence of reduced administrative costs (Burke et al., 1994). Community studies show greater social stratification due to these changes (McCay et al.. 1998). Despite rules against processor ownership of quota and vessels, major processors quickly gained indirect control by financing quota and vessel acquisition. Rules against permanent transfer were quickly removed, enabling a faster pace of consolidation than originally intended. ITQ landings also have shifted within the region, benefiting some communities at the expense of others. The design features intended to help maintain the owner-operated, community-oriented nature of the fishery have not been able to prevail against market-based incentives for accumulation and concentration (McCay et al.. 1998). BOX 4.6 Fisheries Co-management In The Netherlands In 1993, a co-management scheme was introduced in The Netherlands under which groups of fishermen manage their ITQs. The purpose of establishing co-management was to improve cooperation with the industry and lower the cost of management by making the industry more responsible for its actions. Membership in the management groups is voluntary, but both incentives and disincentives were applied when constructing them. Group members were promised a greater freedom of transferability, and all fishermen were threatened collectively with the loss of a certain portion of the licenses every year if the group formation did not succeed, so that those who wanted to continue their operations as before would have to buy back a part of their license. The critical success rate was set at 75% of the vessels joining a group, which was attained. Each group has the responsibility of managing the ITQs of its members, by setting a limit on the number of days at sea to ensure that the catch stays within the total of the group members' quotas. It is also the responsibility of the manager of the group to ensure that its members do not exceed their total quota allocation. The ITQs are still owned individually, however.

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--> A specific form of co-management with potential application for certain types of fisheries is “contractual co-management." The Alaska CDQ program has been viewed as having the potential of evolving into "contractual shared governance" (Townsend and Pooley, 1995). Contractual co-management, also termed "corporate management" (Townsend, 1997), is based on shared ownership between government and a fishing community or group. A set of rights and obligations is delegated by the government for a specified period to a local fisheries management organization. The government plays a major role in determining the terms of the contract, but during the contractual period the participating organization acts as a "sole owner," taking responsibility for management. Under this arrangement the pool of potential shareholders is larger than those fishing, which distributes the benefits of fishery participation to a wider group of stakeholders (Rieser, 1997b). Used in conjunction with an IFQ program, this arrangement has the potential to address some of the distributional consequences of initial allocations. Alternatively, it may be designed to keep fishing quotas in the ownership of groups rather than individuals.