Sharing the Fish Toward a National Policy on Individual Fishing Quotas (1999) / Chapter Skim
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6 Findings and Recommendations
6 Findings and Recommendations
Pages 192-224
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From page 192... ...
IFQs can be used in a preventive manner with stocks that are not overfished or to remedy existing overfishing, overcapitalization,~ and incentives to fish under dangerous conditions. In general, the committee believes that IFQ programs will be more successful when the following conditions exist: · The total allowable catch (TAC)
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From page 193... ...
Because of the long-term impacts and potential irreversibility of IFQ programs, it is important that sufficient data are available to assess and allow the mitigation of, insofar as possible, the potential social and economic impacts of IFQs on individuals and communities. · The likelihood for spillover2 of fishing activities into other fisheries is recognized and provision is made to minimize its negative effects.
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From page 194... ...
Furthermore, the existing federally managed IFQ programs (Mid-Atlantic surf clams/ocean quahogs, Southeast Atlantic wreckfish, and North Pacific halibut and sablefish) should be allowed to proceed under the stewardship of their respective councils, again with the committee's recommendations in mind.
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From page 195... ...
Because the division of management authority between legislative and executive branches of government varies among states, state fishery officials who are members of the regional councils may or may not have the authority to ensure that compatible state measures are adopted to complement a federal IFQ program for transboundary stocks. Recommendations: Regional councils should at their earliest opportunity officially inform affected state fishery agencies that they are considering adoption of an IFQ program for fisheries that occur in both federal and state waters.
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From page 196... ...
However, the act allows the regional councils and the Secretary of Commerce to delegate management under certain situations, and the councils were authorized (before the Sustainable Fisheries Act's moratorium) to create IFQ programs that may be received or held by associations or units of local government.
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From page 197... ...
This could be accomplished by requiring that limited entry programs proposed in FMPs document the likelihood of the possible outcomes and alternatives to achieve plan objectives (e.g., through a "limited access assessment"~. Congress should recognize that the design of an IFQ or other limited entry program in relation to concentration limits, transferability, distribution of quota shares, and other design questions will depend on the objectives of a specific plan, underscoring the importance of providing flexibility to the regional councils.
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From page 198... ...
IFQ programs should include a commitment to monitor both short- and longterm impacts and to include in the program the political, financial, and administrative ability to make changes as required to meet original objectives. At a minimum, the regional councils and the Secretary of Commerce should ensure that a preliminary study of the relevant socioeconomic aspects of a fishery being considered for IFQs be done prior to the design of the management program, that alternative limited access management programs be considered, and that a monitoring and evaluation program be part of the initial design (Sec.
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From page 199... ...
If the initial allocation of IFQs is based primarily on catch history, modification of the original control date will reward speculative entrants to the disadvantage of earlier participants. The committee heard testimony that this has been a widespread problem affecting the halibut and sablefish IFQ programs, the proposed Pacific sablefish program, and the surf clam/ocean quahog program.
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From page 200... ...
Findings: IFQ programs will achieve greater benefits if the interests they create are stable enough to encourage long-term investments, to be useful as loan collateral, and to engender in quota holders a sense of long-term stake in the resource. To the contrary, the moratorium on new IFQ program development and proposals to amend existing IFQ programs (e.g., to allocate increases in the TAC among a new set of stakeholders)
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From page 201... ...
Recommendation: Regional councils should be authorized to decide on a case-by-case basis whether to limit the duration of IFQ programs through the inclusion of sunset provisions. A blanket national policy of sunset provi sions should not be adopted.
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From page 202... ...
Initial Allocation General Considerations Findings: Initial allocation of quota share is the most controversial aspect of the implementation phase of IFQ programs. Controversy focuses on who should be eligible for initial allocations and the criteria that should be used to allocate shares.
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From page 203... ...
Recommendations: The committee recommends that the councils consider a wide range of initial allocation criteria and allocation mechanisms in designing IFQ programs. Councils could avoid some of the allocation difficulties encountered in the past by more broadly considering (1)
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From page 204... ...
Skippers and Crew Allocations Findings: In the existing IFQ programs, non-owning captains, mates, and deckhands have not been allocated quota shares in the initial allocation. Testimony and documents provided to the committee indicate that this is due partly to alleged difficulties in obtaining information on the historical participation of non-owners in the fisheries and partly to the philosophical position that those who have put their capital at risk are the proper recipients of quota share.
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From page 205... ...
The committee also recommends that councils designing IFQ programs evaluate the block system and loan program in the North Pacific region for possible applicability elsewhere. Processor Allocations Findings: In the existing IFQ programs, processors were not awarded shares in the initial allocation unless they also were vessel owners during the control period.
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From page 206... ...
Where an IFQ program already exists, councils should be permitted to authorize communities to purchase, hold, manage, and sell IFQs. These communities could use their quota shares for community development purposes, as a resource for preserving access for local fishermen, or for reallocation to member fishermen by a variety of means, including loans.
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From page 207... ...
Recommendations: Regional councils should avoid taking for granted the option of "gifting" quota shares to the present participants in a fishery, just as they should avoid taking for granted that vessel owners should be the only recipients and historical participation the only measure of what each deserves. Councils should consider using auctions, lotteries, or a combination of mechanisms to allocate initial shares of quota.
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From page 208... ...
Recommendations: The decision whether quota shares should be transferable, one of the most critical elements in the design of an IFQ program, should be left up to the regional councils or other regional or local groups because it depends entirely on the specific goals and objectives of the management regime. If economic efficiency and rapid downsizing are the primary goals of an IFQ program, transferability should be as free as possible.
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From page 209... ...
A lack of accumulation limits may unduly strengthen the market power of some quota holders and adversely affect wages and working conditions of labor in the fishing industry, particularly in isolated communities with limited employment alternatives. The desirable speed and level of concentration of quota shares will depend on technology, culture, and other characteristics of a particular fishery.
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From page 210... ...
New individuals normally enter an IFQ-managed fishery through transfer of quota shares, and measures to facilitate new entry could defeat the purposes of IFQs if such measures either expand the quota share pool or hinder the consolidation of quota share and associated economic efficiency. In existing IFQ programs, some quota shareholders or potential entrants are disadvantaged with respect to the financial capital market if they lack collateral or credit history or if they did not receive an initial allocation of quota share.
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From page 211... ...
fisheries; limits on the extent of foreign ownership would have major implications for the potential effects of introducing IFQ programs in these fisheries. The exact level and nature of foreign ownership and the degree to which the income generated by foreign interests is transferred outside the United States are uncertain.
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From page 212... ...
Although IBQ programs have not yet been developed by regional fishery management councils, they may be a useful tool for controlling the magnitude of bycatch and through individual accountability, encouraging fishermen to avoid bycatch. Thus, they could serve as complements to an IFQ program or be used in conjunction with other management systems.
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From page 213... ...
~. Windfall Gains Finding: Because it has been the practice in existing IFQ programs to award the initial allocation without charging the recipient for the use of public resources through royalties or taxes, concerns have been raised that this allocation provides a substantial competitive advantage for the initial recipients.
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From page 214... ...
Other mechanisms, such as auctions, assessing an annual fee on quota share, or other taxes, would also reduce windfall gains to the initial recipients. Cost Recovery Finding: The implementation of an IFQ program introduces exclusive privileges to harvest a portion of a public resource.
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From page 215... ...
Such dedicated funds could support fisheries research; could finance retraining of fishermen displaced by IFQ programs and support other forms of education, health care, and infrastructure in these communities; or could be allocated by direct cash transfers to inhabitants of affected communities. The exact legal and administrative form of dedicated fishing rent funds, should they be established, must be left for the political process to decide.
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From page 216... ...
Recommendations: Councils should design IFQ programs in such a way as to enhance enforcement. The committee recommends that the regional councils and the Secretary of Commerce consider the following three principles for effective monitoring and enforcement in designing IFQ programs.
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From page 217... ...
Assessing the effects of proposed limited entry programs requires information on the range of fishing activities, and other activities in which they are embedded, especially for communities in which fishing is important. Such information makes it possible to estimate the probable effects of different proposals for implementing IFQs or other limited access programs, in much the same way that systems analysis enables assessing the effects of proposed changes in manufacturing procedures and the way an industry is organized (Goodenough, 1963; Lieber, 1994~.
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From page 218... ...
. The Secretary of Commerce should require the regional councils to plan research to allow for systematic evaluation of the effects of proposed IFQ programs and alternatives on the way of life of fishing communities and the way fishing activities are conducted.
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From page 219... ...
Concerns about the equity of the initial allocation of quota shares is a major obstacle to the implementation of any IFQ program. It is important that the initial allocation process be transparent and perceived to be fair; this requires adequate data.
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From page 220... ...
provide recommendations to the proposing council if deficiencies or concerns about the proposed IFQ program are noted. Such an external review process could be useful to stakeholders only if it avoids unduly burdening or slowing the decisionmaking processes of the existing fishery management system.
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From page 221... ...
In examining the evolution of IFQ programs nationally from surf clams/ocean quahogs to the proposed red snapper IFQ program in the Gulf of Mexico region and the sablefish IFQ program in the Pacific region, newer programs have been designed to avoid past difficulties. It appears that design features related to accumulation limits, transferability, leasing, quota shares for crew members, and other aspects have been modified based on observations of the effects of previous programs.
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From page 222... ...
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)
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From page 223... ...
Evaluation should be focused on whether the IFQ program is meeting the biologic, economic, and social objectives of the program and the MagnusonStevens Act. Some committee members believe that the evolution of an IFQ program to feature broader participation and cooperative management should be one of the key objectives of the program's initial design.
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From page 224... ...
However, it is possible that defining all potential participants in the program first by limiting speculative entrants, and then gaining stakeholder support by developing criteria for measuring allocation for an IFQ program after this moratorium, could result in an improved transition. This mechanism would provide an opportunity for participants to improve their catch history, decrease bycatch rates, or make other adjustments in fishing practices to make them more likely to qualify for some, or a greater quantity of, the initial allocation.
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