quota shares. In the IFQ programs reviewed, information concerning the trends in the price of quota shares appears to be lacking.

Recommendation: Existing and future IFQ programs should provide an annual report describing trends in the fishery and the effects of the IFQ program on important management variables. Where possible, it would be worthwhile to examine how these variables have changed since implementation of the program. Factors in an annual review could include the number of quota shareholders, the distribution of quota shareholders among various sectors or vessel classes, changes in the number of vessels, changes in the number of crew members and their holdings of quota shares, and the trends in the price of quota shares over time. This report should be available to IFQ managers in other regions, as well as participants in the fishery and the general public, through the World Wide Web and other venues.

Changes to Existing Programs

Finding: Holders of quota shares in existing IFQ programs have often made major investments in purchasing IFQs and adjusting their business capital and practices to the IFQ program. For example, the committee received testimony from some Alaskan fishermen who received little or no initial allocation, subsequently invested in quota shares, and are concerned that their investments will be eroded by changes in the program that diminish the value of their quota share (e.g., increasing the quota share pool). Fishermen told the committee that they believe lending institutions will be less willing to make loans for purchases of IFQs if the programs are unpredictable.

Recommendation: Councils should proceed cautiously in changing existing programs, even to conform to the recommendations of this report. In spite of initial windfall gains (or even in the absence of them), many individuals have made subsequent investments in quota shares. Changes should be designed to maintain the positive benefits of IFQs that result from their stability and predictability. One means to accomplish gradual change is through use of an Australian "drop-through" system (described in Box 5.2), with different conditions and requirements for each level.

Every IFQ program should establish at the outset a process for the review and evaluation of the program and a mechanism for timely, nondisruptive, equitable consideration of program changes. The Magnuson-Stevens Act requires such procedures for review and revisions (Sec. 303[d][5][A]). The North Pacific Fishery Management Council, for example, has set up an annual management cycle for considering proposals for adjusting the IFQ programs for sablefish and halibut. Proposals are solicited in the summer, and the council decides in December of each year which proposed changes warrant further consideration. Recom-

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