Sharing the Fish Toward a National Policy on Individual Fishing Quotas (1999) / Chapter Skim
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H Potential Economic Costs and Benefits of Individual Fishing Quotas to the Nation
H Potential Economic Costs and Benefits of Individual Fishing Quotas to the Nation
Pages 366-408
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From page 366... ...
Further, although revenues generated from taxes or fees associated with an IFQ program may offset some of the monetary costs associated with administering these programs, they are not the principal benefits of an IFQ program. The real net benefits of an IFQ program consist of increases in revenues over costs, including management and enforcement costs.
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From page 367... ...
programs. The Alaskan halibut and sablefish IFQ programs have the best information available concerning variations in quota price, due in part to research conducted by the National Marine Fisheries Service (NMFS)
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From page 368... ...
Data on the number of transfers, the number of pounds transferred, and the sale price per transfer in the Alaskan halibut and sablefish IFQ program are maintained by the
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From page 369... ...
Several general trends can be inferred from the market price of quota share in the Alaskan halibut and Sablefish IFQ programs. As might be anticipated, the price of quota was lower during the first year of the program than in subsequent
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From page 371... ...
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From page 372... ...
372 o o o o ~Cal o o o o o o Go ~ ~Cal s~a~sue'1 Jo ~9qtUnN SS AM AM 1V SS o OM, a)
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From page 373... ...
373 o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o O ~ 00 ~ ~ L~ ~ CO CM ~ pe'e~sue'1 SpUnOd 1V ~M Cq AM ¢ a' 3S Ct a)
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From page 374... ...
and Sablefish Regulatory Area per Quarter in the Alaskan Halibut and Sablefish IFQ Programs 2nd Quarter (price/pound) Area (vessel class)
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From page 375... ...
and Sablefish Regulatory Area per Quarter in the Alaskan Halibut and Sablefish IFQ Programs 375 1st Quarter 2nd Quarter (price/pound) (price/pound)
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From page 376... ...
and Sablefish Regulatory Area per Quarter in the Alaskan Halibut and Sablefish IFQ Programs 1st Quarter (price/pound) Area (vessel class)
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From page 377... ...
Tables H.2-H.4 summarize the quarterly market values of quota traded in the Alaskan halibut and sablefish IFQ programs and provide an indication of the range of variation in market price since the inception of the program. It is important to note that capital gains taxes can be assessed on any sale of quota shares that results in a capital gain.
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From page 378... ...
Only a portion of sold quota shares is subject to capital gains taxes before 15 years, with the portion of the asset taxed increasing over time. An accurate determination of the potential revenue generated by capital gains tax in the Alaskan halibut and sablefish IFQ programs would require more accurate information on the price and amounts of quota traded than is available through existing sources of data.
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From page 379... ...
Potential Revenue from a 0.5% Registration and Transfer Fee~ The potential revenue generated from a 0.5% registration and transfer fee value will vary widely depending on the amount and value of quota traded. It is ~ This is based on the dollar value of quota registered or transferred, not pounds landed, as in the case of the 3% fee analyzed in the previous section.
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From page 380... ...
However, an analysis of the potential revenue generated from the 0.5% fee in the Alaskan halibut and sablefish IFQ programs is problematic for several reasons: 1. Historic transactions may not reflect future quota share prices or trade 2.
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From page 381... ...
, and NMFS enforcement for the Alaskan halibut and sablefish IFQ programs. It should be kept in mind that in some cases, enforcement personnel also provide services to non-IFQ fisheries so that the numbers presented in Table H.6 are maximum numbers.
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From page 382... ...
$87.2 RAM subtotal $79.6$1,066.5$1,542.0$1,208.8$1,172.2$1,338.1 NMFS Enforcement $3,052.0$2,600.0$2,600.0$2,600.0 Totals $79.6$1,066.5$4,594.0$3,808.8$3,772.2$3,938.1 NOTE: Enforcement costs are estimates from Northwest Fishery Science Center Enforcement Division. SOURCE: NMFS RAM Division, Northwest Fishery Science Center Enforcement Division.
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From page 383... ...
Both ship time and aircraft hours dedicated to enforcement operations in the halibut and sablefish fisheries have increased with the implementation of IFQ programs (Figures H.6-H.7~. However, in 1997, the overall time spent in fisheries enforcement operations in the Alaskan halibut and sablefish IFQ fisheries decreased from the 1995-1996 period, possibly as a result of improved enforcement techniques, shifting enforcement operations to other fisheries, or other unrelated events.
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From page 384... ...
hours dedicated to fisheries enforcement by Coast Guard District 17 in the Alaskan halibut and sablefish fisheries. SOURCE: USCG, 17th District.
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From page 385... ...
~ I ~ I ~ I ~ I 1993 1994 1995 Year 1996 1 997 FIGURE H.8 Number of boardings and fishery violations reported by Coast Guard District 17 in the Alaskan halibut and sablefish fisheries. SOURCE: USCG, 17th District.
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From page 386... ...
386 Cq ¢ a' ¢ ~ a' C a' o o = a' ~ O ° an an s~ ,~o.
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From page 387... ...
in the Alaskan halibut and sablefish IFQ programs (Sec.
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From page 388... ...
Further, it is likely that if IFQs were implemented for large fisheries with fewer vessels, a wellorganized biological data gathering system, limited enforcement costs, and high exvessel revenues (e.g., Alaskan pollock) , the capital gains taxes and exvessel fees assessed from these larger fisheries would be more than sufficient to cover additional administrative costs and could generate significant net tax revenue to the nation, as well as potentially improving the operational efficiency of these fisheries.
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From page 389... ...
(1996~; IPHC (1997~. number of individuals in the Alaskan halibut and sablefish IFQ fisheries noted that because of these changes, they were able to use less gear, lost less gear, and realized significant savings over pre-IFQ gear expenditures.
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From page 390... ...
As might be anticipated, some of the changes in the patterns of product delivery negatively affected the operations of processors. The committee heard testimony that some processors in the SCOQ and the Alaskan halibut and sablefish IFQ programs felt that the shift from large pulses of product to a more even product flow had disadvantaged some of their operations.
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From page 391... ...
Several vessel owners and crew members mentioned that the number of crew members had been reduced with the implementation of the halibut and sablefish IFQ programs. Although fewer crew members may improve the economic efficiency of the vessel operation, this may have significant adverse affects on the individual crew members.
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From page 392... ...
One factor that could be measured, which may provide some indication about the ability of fishery-dependent communities to respond to potential changes with the implementation of an IFQ program, is the distribution of quota in certain communities from the inception of the IFQ program to the present. Only the Alaskan halibut and sablefish IFQ fisheries have sufficient data regarding the purchase and transfer of quota in specific communities.
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From page 393... ...
4. IFQ pounds are displayed in 1997 equivalent pounds, using 1997 Quota Share Pools and TACs.
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From page 394... ...
394 TABLE H.9 Initial Allocation and Recent Holdings of Quota Share by Residents of Kodiak, Alaska in the Alaskan Halibut and Sablefish IFQ Programs APPENDIX H Halibut Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % ofPersons1997 IFQ % of Area IssuedPounds AreaHoldingPounds Area 2C 3124,079 0.24189,492 0.09 3A 3855,675,162 22.692955,458,522 21.86 3B 1801,673,027 18.531482,044,212 22.71 4A 62518,270 17.5956609,392 20.73 4B 26435,748 15.6420344,313 12.37 4C 868,658 11.84780,448 13.87 4D 1035,227 4.341163,185 7.78 4E 20 0.0020 0.00 Total 3888,430,170 3318,609,563 Sablefish Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % of Persons1997 IFQ % of Area IssuedPounds Area HoldingPounds Area SE 2246,271 0.58 1839,372 0.49 WY 30303,601 6.02 30299,897 5.95 CG 741,052,034 9.28 721,265,744 11.19 WG 2472,617 2.21 28222,498 6.78 AI 1223,945 1.51 1122,059 1.39 BS 1684,709 8.73 1898,791 10.18 Total 741,583,178 771,948,360 NOTES: See notes for Table H.8. SOURCES: CFEC, NMFS RAM Division.
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From page 395... ...
APPENDIX H TABLE H.10 Initial Allocation and Recent Holdings of Quota Share by Residents of Petersburg, Alaska in the Alaskan Halibut and Sablefish IFQ Programs 395 Halibut Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % ofPersons1997 IFQ % of Area IssuedPounds AreaHoldingPounds Area 2C 2551,854,685 18.412312,352,833 23.35 3A 661,188,194 4.75731,580,709 6.32 3B 9190,532 2.096186,809 2.07 4A 648,454 1.64550,286 1.71 4B 376,669 2.76286,236 3.10 4D 315,382 2.66214,889 2.57 4E 20 1.5820 1.58 Total 2663,373,916 2554,271,812 Sablefish Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % of Persons1997 IFQ % of Area IssuedPounds Area HoldingPounds Area SE 521,083,684 13.38 511,076,846 13.39 WY 31417,783 8.28 34482,460 9.60 CG 371,121,114 9.89 291,351,733 11.93 WG 8113,970 3.46 5100,195 3.04 AI 529,114 1.83 425,734 1.74 BS 484,158 8.67 465,401 6.74 Total 572,849,824 683,102,370 NOTES: See notes for Table H.~. SOURCES: CFEC, NMFS RAM Division.
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From page 396... ...
SOURCES: CFEC, NMFS RAM Division.
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From page 397... ...
APPENDIX H 397 TABLE H.12 Initial Allocation and Recent Holdings of Quota Share by Residents of Sitka, Alaska in the Alaskan Halibut and Sablefish IFQ Programs Halibut Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % ofPersons1997 IFQ % of Area IssuedPounds AreaHoldingPounds Area 3281,681,263 16.682751,737,254 17.21 130801,740 3.21115992,008 3.97 21254,369 2.8216243,353 2.70 16103,349 3.5110111,990 3.81 8114,685 4.12597,001 3.48 23,721 0.6423,721 0.64 26,861 0.8512,981 0.37 Total 3372,965,988 3033,188,308 Sablefish Quota Initially Issued Quota Holdings as of December 31, 1997 Persons1997 IFQ % ofPersons1997 IFQ % of Area IssuedPounds AreaHoldingPounds Area SE 1181,826,071 22.551042,044,985 25.44 WY 38316,597 6.2836410,737 8.15 CG 34711,411 6.2830733,224 6.48 WG 13198,916 6.0410189,701 5.78 AI 785,932 5.41886,335 5.44 BS 647,031 4.85648,541 5.00 Total 1203,185,958 1143,513,529 NOTES: See notes for Table H.~. SOURCES: CFEC, NMFS RAM Division.
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From page 398... ...
Additionally, it is difficult to determine the number of individuals who had been active in these fisheries prior to implementation of the IFQ programs who may have chosen to purchase quota if they were not allocated quota during the initial allocation process. CFEC has produced a number of studies analyzing the trends in participation in the Alaskan halibut and sablefish fisheries prior to implementation of the IFQ programs.
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From page 399... ...
pounds compares crew holdings to holdings for the entire city. SOURCES: CFEC, NMFS RAM Division
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From page 400... ...
400 APPENDIX H TABLE H.14 Quota Share Holdings for Crew Members with a Kodiak Designated City Address in the Alaskan Halibut and Sablefish IFQ Programs as of December 31, 1997 Area Number 1997 IFQ Crew IFQ Pounds as a Crew IFQ Pounds as a of Crew Pounds Percent of City Pounds Percent of Area Pounds Halibut 2C 1280 3.0 0.00 3A 37519,310 9.5 2.08 3B 28379,915 18.6 4.22 4A 12119,795 19.7 4.07 4B 547,433 13.8 1.70 4C 13,178 4.0 0.55 4D 317,694 28.0 2.18 Total 591,087,605 12.6 2.13 Sablefish AI 1137 0.6 0.01 CG 534,533 2.7 0.31 SE 116 0.0 0.00 WG 428,077 12.6 0.86 WY 417,054 5.7 0.34 Total 879,816 4.1 0.26 Grand Total 591,167,422 1.43 NOTES: See notes for Table H.13. SOURCES: CFEC, NMFS RAM Division.
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From page 401... ...
TABLE H.16 Quota Share Holdings for Crew Members with a Seward Designated City Address in the Alaskan Halibut and Sablefish IFQ Programs as of December 31, 1997 Area Number 1997 IFQ Crew IFQ Pounds as a Crew IFQ Pounds as a of Crew Pounds Percent of City Pounds Percent of Area Pounds Halibut 3A 8 31,701 7.8 0.13 3B 2 4,722 13.2 0.05 Total 8 36,423 7.9 0.07 Grand Total 8 36,423 4.1 0.04 NOTES: See notes for Table H.13. There were no crew sablefish IFQ held in the community of Seward.
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From page 402... ...
Trends in crew holdings of quota share with the implementation of the North Pacific Loan Program should be monitored by NMFS, CFEC, or the North Pacific Council to provide more data on crew investment and the efficacy of loan programs in increasing the share of quotas held by crew members and smaller quota holders. Based on the information on the distribution of quota, it appears that in all of these communities, vessel owners, and to a limited extent, crew members have made substantial investments to participate in the Alaskan halibut and sablefish IFQ fisheries.
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From page 403... ...
These data indicate that fewer vessel owners, and fewer participants overall, hold quota than at the implementation of the program. Based on testimony from other sources, it is likely that the reduction in quota shareholders represents a reduction in the number of individual fishing operations in these fisheries.
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From page 404... ...
404 a' ·_4 Cq o Cq ¢ so Jo be ·_4 a' _' be o be a' ·5 ~ Cal =\ a' be c' cq .= ,~ ~ Cq ¢ Em ¢ o ca · ~ 4= o .~ C)
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From page 405... ...
Undoubtedly, some members of the communities have benefited from the initial allocation of quota shares whereas others, including crew, have lost employment in the fishery as a result of fewer fishing operations or the consolidation of fishing operations. The committee received testimony from these communities that some vessel owners and crew members who had not received quota had "bought into" the fishery and felt that fishing under IFQ management was preferable to the previous derby fisheries.
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From page 406... ...
406 Cq o ¢ a' _' a' Cq a' o be Y a' a' ,= be cq Ct · _4 c' cq a' ~ Or, ~ VO Cal ~ ~ Ct a, ¢ ¢ EM ca so ca ¢ 4= ca o A o .0 o ~ ~ ~ ~ ~ ~ ~ Do Do ~ ~ o ~ ~ ~ o Do ~ ~ o oo ~ ~ ~ c~ ~ oo oo oo ~ ~ ~ 0 CM .
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From page 407... ...
However, the increasing quota share in four of the five communities reviewed indicates that the means for purchasing quota and participating in these fisheries exists and substantial investments are being made by some members of these communities. These data suggest that significant changes in the Alaskan halibut and sablefish IFQ programs could have profound economic effects on those members of the community that hold quota and participate in these fisheries, as well as on the overall economic stability of these communities.
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From page 408... ...
IFQ programs that could be analyzed in any depth are those for the Alaskan halibut and sablefish fisheries. The SCOQ and wreckfish IFQ programs collect very few of the data necessary for a thorough analysis of net economic benefits and costs.
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