profiteering" by absentee owners. The economic efficiency gained by the introduction of IFQs may be lost due to such strikes. It is important to differentiate between leasing to absentee owners and other fishermen. Although both have the same general economic effects, leasing to absentee owners (those "sitting on the beach" in fishermen's jargon) is much less acceptable in the fishing community than leasing to other active fishermen.
Absentee ownership can develop when the transfer of quotas is unrestricted. Rather than selling their quotas, quota shareholders may choose to lease them and gain unearned income on their quota wealth. This may tear at the social fabric in fishing communities, where absentee ownership is often seen as unfair. Fisheries that traditionally have been owner operated may be altered by the ability to lease quota shares, and relationships in a community can become more sharply divided between the "owners" of the resource and the "tenant" fishermen. In some cases, the crew members aboard leased vessels pay for the cost of the lease, effectively reducing both their average share and their overall income. One way to deal with absentee ownership is to require active participation of the quota holders in fishing—for example through “owner-on-board" provisions—or to impose geographical restrictions on transferability. However, this is not an economically efficient instrument in fisheries that are subject to economies of scale and scope; in these industries, economic efficiency is increased when large, vertically integrated firms, rather than individuals, hold the fishing quotas. Moreover, such provisions can work against attempts to meet social goals through community-based control of IFQs (or CDQs).
Leasing is often seen as a way for quota shareholders to fine-tune their operation to meet short-term needs arising from fluctuations in local, regional, and national markets and to deal with bycatch problems. Additionally, leasing can allow individuals to learn how an IFQ program and market works before they buy into or sell out of the program (perhaps prematurely). For example, the British Columbia halibut IVQ program allowed leasing, but not sales, of quota shares during the first two years of the program, to provide such learning time. Thus, in the beginning, the lessors are likely to be firms or individuals actively engaged in the industry, using their own IFQs for fishing. In time, however, IFQ holders may come to discern that profits might be made through leasing IFQs on a larger scale.
With increasing concentration of quotas, new and more formalized modes of leasing may emerge. In such transactions, the supplier of the IFQs is likely to be a large vertically integrated firm and the recipient a small-scale harvester. In time, this situation may create a new kind of social structure with permanent divisions among those who live from leasing quota shares and those who rent them and do the fishing. A similar social arrangement characterized the salmon, herring, and halibut fisheries of the Pacific Northwest, British Columbia, and Alaska from the mid-1800s through the early 1900s (Bay-Hansen, 1991; Newell, 1993). In the case of Alaska, the desire to eliminate this feudal structure was a