Kate Bonzon Responds to the Pew Catch Share Report

Kate Bonzon, EDF Director of Design Advisory ServicesI was hoping the Pew Environment Group’s new report, Design Matters: Making Catch Shares Work would provide some good information about how to design catch shares, but instead I found it over-simplistic,  somewhat confusing and lacking any new insight into catch shares and effective design.  Just about everyone agrees that catch shares can and should be designed for the unique needs of fisheries and the communities that depend on them. 

EDF has been working on catch share design for years, and recently released a 100+ page draft of a Catch Shares Design Manual that outlines a roadmap for designing catch shares based on experience from around the world.  (After an open peer review is done, we’ll finalize the manual.)  I agree with the title of Pew’s report.  Design of catch shares does matter.  It matters a lot. 

The overall feeling I left with was that Pew is comparing catch shares to an ideal world that doesn’t exist rather than to the reality of current management.  The report identified many issues that traditional management hasn’t solved, and makes the case that catch shares should solve all of those problems. 

The good news is that catch shares generally do make progress on those problems—and as they are adjusted over time they get even better.  These include setting an accurate, science-based cap, establishing an appropriate monitoring and enforcement program, managing multiple species, reducing bycatch and habitat destruction, and compensating fishermen who are caught in a system that has led to over-capitalization.

Pew is right that these are tough problems for fisheries, but they neglect to mention that catch shares are better at achieving positive outcomes than nearly any other management approach currently in use.  For example, Pew says:

“In some fisheries, improvements were more likely the result of hard TAC limits than an IFQ system.” 

What they failed to mention is that not only are catch share fisheries more likely to have a hard catch limit, but fishermen are also far more likely to stay within the identified catch limits.  And, the science behind those catch limits is also dramatically better than it was before catch shares were implemented.  In short, catch shares lead to more accurate science-based catch limits and fishermen who come in below catch limits, 5% on average

What amazes me is that under catch shares fishermen have not only stuck to their catch limits, but for the first time they have lobbied for tighter limits to allow fisheries to recover faster.  Compare this to traditionally managed fisheries where setting a catch limit is often controversial, cutting it is even more so, and the limits are often exceeded.

The report also highlights the need for effective monitoring and enforcement.  I agree that this is a key component to ensure the health of our fish stocks.  But this is true for ALL fisheries, not just catch shares.  Catch shares offer the opportunity to instill greater accountability into the fishery, and in fact, this is a vital component of most programs.  Catch shares are the only approach that holds fishermen individually accountable to stay within catch limits.  Fishermen get flexibility on when and how to fish—and they meet their targets.

Pew also notes the high cost of administering some catch share fisheries, highlighting this as a concern.  Much of this price tag is due to monitoring and enforcement, which is something that should be there regardless of whether a fishery is under a catch share. 

Because catch share fisheries are more profitable than traditionally-managed fisheries, they are uniquely able to pay the costs of management.  Whereas most fisheries management costs are currently covered by taxpayers, catch share fisheries can and do pay more of the costs.  Research shows that per boat revenues increased by 80% after catch shares were implemented. And as they get more profitable, fishermen’s costs go down.  I doubt that most traditionally managed fisheries could support the same level of monitoring as catch share fisheries. 

Jobs are another common theme in the report.  When the nation first started exploiting our fish resources in the 60s, 70s and 80s, fishing jobs were plentiful and often lucrative.  However, as fish stocks declined, regulations tightened and other industries started competing for waterfronts.  Add to that an influx of imported fish and the result is a steep decline in fishing jobs.  Unfortunately, if overfishing continues and stocks remain dangerously low, jobs will only continue to decline. 

Catch shares do cause fishing jobs to change, and when you look at the number of active permits, there is nearly always a decline. But that is not the complete story.  Not only do numbers of jobs change, but the quality of jobs also changes.  Part-time, seasonal jobs generally give way to more stable, more profitable, safer, full-time jobs.  And there is anecdotal information that people who stay in the fishery make better wages too. Up to 100% better in the Alaskan crab fisheries and 44% better in the British Columbia fishery (GSGislason 2008). 

I don’t minimize the impact of losing a part-time job, but I also acknowledge that the people that remain have much better jobs.  And what is hard to evaluate is what would have happened to jobs without a catch share.  Unfortunately, increasing regulations to prevent overfishing and rebuild stocks are also likely to negatively impact jobs, just as happened over the past few decades.

Over-capitalization and concentration is another issue.  On the one hand, Pew says that catch shares are effective at reducing overcapitalization and on the other says that catch shares can cause excessive consolidation.  So, what is the right number of boats for any fishery?  That should be decided by each fishery based on what it is going to take to keep those fishermen in business.  What is beneficial about catch shares though, is that those who choose to leave the fishery can generally do so with compensation.

Recreational fishermen are mentioned in several places in the report.  To me the key point is that catch shares for the commercial fleet are good for recreational fishermen—as the commercial side meets their targets it will make the resource healthy for everyone.  I agree with Pew that catch shares can work for charter boats.  It’s a tough problem though in figuring out how to improve the rules of the game for millions of recreational fishermen so that they can have better access to the oceans. 

The current approach of short seasons and closures might work—but they are hard on recreational fishermen and the businesses that depend on them.  I hope that the government comes up with some ways that allow recreational fishermen to get longer seasons and still meet conservation goals.  The answer might not be catch shares, but I am optimistic that there is an answer out there.

I liked the report’s approach of using case studies.  However, there is some important information left out that I would like to explain.

  • The report said the red snapper stock is currently overfished and overfishing is occurring.  What they failed to mention is that the problem is not coming from commercial over-fishing.  In the first two years of the catch share program for the commercial sector, reported landings have been below quotas, whereas during the 17 years of managing with a TAC and input controls, the commercial quota was exceeded nine times.  On the other hand, the management for the recreational sector is not working yet.  While most recreational fishermen undoubtedly follow the rules, the recreational catch is still way over its quota, perhaps by as much as 13.5% in 2008.
  • Pew also said there was significant consolidation in the Surf Clam/Ocean Quahog fishery.  If you look at the number of vessels in the fishery, that is true.  However, when you look at the more accurate number of owners in the fishery, you see there was only an 11% decrease in the number of owners from implementation in 1990 to 1999.  This reflects that fact that prior to the IFQ, owners had the incentive to invest in more and more boats and gear to get around constraining regulations and after the IFQ, they were able to get rid of excess capacity.  And when you consider that these are dredge vessels that have significant impact on bottom habitats, reducing vessels is a conservation benefit.
  • The authors also discuss the Bering Sea Aleutian Island Crab Rationalization and the controversial Individual Processing Quota (IPQs).  Interestingly, the IPQs were implemented largely to protect community interests.  I agree that IPQs should be closely studied for whether they actually achieve that goal, but it just goes to show that good design does matter.  Furthermore, Pew highlights that there was an estimated loss of 1,200 jobs from 2004-2006.  However, they fail to mention that the same report also says “the loss in crab fishing jobs was approximately offset by the increase in days worked per job.  Thus the effect of crab rationalization was that a much smaller number of people worked at jobs which lasted a much longer period of time, and did about the same total amount of work in about the same total number of days.”  (Knapp and Lowe, 2007).   Not only did the crew who stayed in the fishery have more stable jobs, but their incomes also increased, about 100% in the red crab king fishery compared to pre-catch share levels and 60% in the snow crab fishery

In terms of the environmental performance of catch shares, the results are clear.  Catch shares outperform all other management systems.  Over the years, we have learned to deal with some of the early environmental concerns– such as allocating percentage shares, rather than pounds and figuring out how best to deal with multi-species fisheries– but experience has shown that these have been mostly ironed out.  In fact, Pew highlights how well the British Columbia Groundfish IVQ manages multiple stocks with varying abundance. 

What the authors speak about most frequently is the social impact of catch shares.  How do communities fare and what about jobs?  These are critically important issues.  The bottom line is that without fish, there will be no fishing communities or fishing jobs.  Catch shares are the best approach to ensuring robust, healthy fish stocks. 

So then the question becomes, how to design catch shares to meet community needs.  As Pew points out, design matters.  Design is a series of choices that need to be made for different fisheries and different goals.  The choice of how to allow leasing is a great example.  Leasing occurs because it is hard to imagine how to run an effective system without mechanisms for flexibility.  The thing you get with catch share design is dials to control the degree of flexibility.

Fisheries that want to preserve the historical structure of the fleet and promote specific communities, like the Alaska Halibut and Sablefish fisheries, limit leasing based on geography, historical participation, and active engagement in the fishery, with largely beneficial results.  However, a fishery that wants to encourage lots of flexibility and the ability to increase economic value, such as the New Zealand system, allows more leasing and minimize trading constraints. 

The hard part about design is determining how all the choices will add up and what effects, both positive and negative, they will have.  But the answer is not to discount catch shares, but rather to think critically about how best to design a comprehensive system to achieve each fishery’s unique goals.  And of course, these choices should be reviewed over time to ensure they are meeting the goals of the fishery.

Well-designed catch shares offer hope for fishermen, fishing communities and for the health of the ocean.  Scientists are finding that catch shares make fisheries stable over time, and are more effective at rebuilding fish stocks—which helps fishermen and the oceans.  I agree with the Pew report that catch shares can and should be designed to promote a variety of community goals by engaging fishermen in picking the right designs, but I am left looking for practical answers to these tough questions.

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5 Comments

  1. fishingguy
    Posted November 3, 2009 at 3:02 pm | Permalink

    Ms. Bonzon makes quite a few very good points. One message that comes across is that a catch shares system should be designed carefully and slowly and locally for the conditions of each individual fishery. This issue is what plagues the current Pew/NOAA solution for New England commercial fisheries. It was a shotgun arrangement, and lacks thorough research and sensitivity to the local conditions on the ground, and on the water in New England. Hopefully, NOAA administrators will read Ms. Bonzon's blog.

  2. Posted November 4, 2009 at 10:10 am | Permalink

    There is universal agreement that we want fish and fishing jobs to come back as quickly as possible. We agree with the Portland Press Herald editorial on Monday: sectors give fishermen the best shot right now to stay solvent under historically low catch limits.

    What's needed for sectors is not a delay, but a means for making many, small improvements to optimize them over time. The Alaskan crab fishery passed 14 consensus amendments over four years to fine tune their system. That is currently unimaginable to us, having worked for over three years on one amendment to implement groundfish sectors.

  3. Rodney Duck
    Posted November 4, 2009 at 4:23 pm | Permalink

    I love the part where it mentions recreational fisheries will not be impacted or even such "sharing" plans might be helpful.

    I guess you haven't heard of the deconstruction of the recreational charter fleet at the hands of the IFQ program in Alaska and the North Pacific Fisheries Management Council.

    A major failure of the system is that is it heavily stacked in favor of the seafood industry at least on the NPFMC, where you have a have a commercial conflict of interest to be a non-government appointee. Almost all processors or harvesters doing all the catch "sharing" plans.

    Look at the new catch "sharing" plan the NPFMC is brewing up for the recreational sector in Alaska – it will cut the charter fleet in half in SE Alaska, all so that the "sharing" can be one-sided.

    Beware, whoever is at the controls in making the "sharing" plan will leave everyone else out in the cold with scraps.

    Funny, though, when viewed by an economic prism, in the coastal waters of America more than 95% of the overall harvest is for the seafood industry, yet it produces only 75% of the total jobs and income.

    The recreational sector accounts for less than 5% of the total harvests yet generates 25% of the total jobs and income.

    Now I am not an economic wizard, but if one was truly interested in the overall economic health of the country and maximizing jobs and income from a natural resource, I guess I would look at the sector that generates close to an eight to one economic return on the natural resource that is utilized vs. an industry that is less than one to one.

    Of course, maybe hedge fund investors haven't figured out how they can extract money from the recreational fishing sector, so let that sector be thrown under the hedge fund bus when we construct the "sharing" plans.

    You will hear talk about how catch "sharing" plans are a "privilege" – well in Alaska it is the "privileged" who got the IFQ's for free at the start of the program, and now the very sustainability of the overall program is thrown into question because it turns out the purchasing the "shares" by the next generation makes it unaffordable to get into the industry.

    Watch out for catch "sharing" plans that prime the initial pump with a free lunch (initial folks don't have to put in any money for there "privileged" shares).

    The kicker is that there is more "bye-bye" catch by the overall seafood industry in Alaska than is harvested by the recreational sector – yet who is getting it in the pants when it comes to sharing – your average recreational angler.

    Go figure – is it irony or what – the GREEN movement.

    Sorry to say – at this point your focus is a joke. Too bad it isn't funny.

  4. displaced
    Posted November 4, 2009 at 9:40 pm | Permalink

    I'm one of the displaced fishermen from both ALASKA'S Groundfish
    IFQ'S AND THE cRAB RATIONALIZATION.For starters Rodney duck is right
    on the money about the North Pacific Fisheries Management Council.
    It is nothing but lobbyist's for the Processors and large vessel
    owner groups,political affairs officers for the same and very wealthy
    stock holder reps that have more conflicts of interest than a siene
    net has holes.just google NPFMC conflicts of interst and see how
    many hits you get.Many were paid advisors to the canneries that received
    hundreds of millions in profits from the rationalization approval.
    The only information they want anyone to hear is the positive,and the
    little guy's are gone.(pushed out and swallowed up by the big fish)
    The IFQ system is driven by greed.The people that profited from
    Alaska's IFQ's will try to tell you it's a safer industry,just turn on
    the TV show Deadliest Catch and see if it looks safe to you,they're
    still working 40,50 plus hour day's bad weather injuries,it's just now
    the pressure is'nt about when the season closes it's when the cannery
    wants the crab.All the IFQ and buy back programs did was legally wipe
    out the compition and give the wealth to the big players'
    Less than 10% of longliner crews fishing before IFQ'S still have jobs
    the traditional boat share of 30% is now 60% plus just for the permit share
    and the skippers are taking boat shares and adding Auto-baiters and
    keeping a share for them.Unless your a wealthy fishermans son or your parents
    give you your IFQ'S the average person or hand connot afford to buy
    enough quota to support his family.
    when the IFQ'S were implimented in Alaska NMFS traveled the state and
    held local town meetings and told us not to worry, that crews would be taken
    care of.NMFS told fishermen that they had money set aside for a
    "DISPLACED FISHERMENS FUND" the purpose of these monies was to reeducate
    and small bussiness loans for the displaced crews.I don't know
    where it is and neither does NMFS but I want some of those taken
    benefits.Get used to the term "DISPLACED FISHERMEN" it goes hand in hand
    with IFQ'S AND CATCH SHARES
    The reason you don't hear more negative about Alaska's IFQ Programs
    is everyone got fired and left the industry they have no voice.

  5. pewenvironment
    Posted November 11, 2009 at 1:43 pm | Permalink

    Pew Responds to Environmental Defense Fund Comments on its Catch Shares Report:

    From Lee Crockett, Director, Federal Fisheries Policy, Pew Environment Group

    I am responding to Kate Bonzon’s November 3 critical assessment of the Pew Environment Group’s recent report, Design Matters: Making Catch Shares Work (www.endoverfishing.org). The first thing I’d like to note is that we produced this report to stimulate a broader discussion of catch shares programs. While we have acknowledged the positive aspects of these programs in a variety of fora, in our view, much of the public discussion on catch shares has been overly one-sided, focusing intensively on their positive characteristics, without giving sufficient attention to their downsides. Catch share programs have been around for more than two decades, and we can learn much from what has worked and what has not by looking at their track record. If the nation’s marine fishery managers are going to consider instituting these programs on a much broader scale, it is important that they do so with a very sober, clear-eyed understanding of all of the management implications. As Edmund Burke said more than two centuries ago, "Those who don't know history are destined to repeat it."

    Ms. Bonzon expresses disappointment that the Pew report does not provide new insights on catch shares and effective design. The purpose of the paper, however, was not to design a model catch share program, but rather to argue that any future design of these programs be well informed and guided by the prior experience of catch share regimes, both positive and negative. Based on that history, documented primarily by government and academic sources in the report, we suggest several overarching design principles that should guide the design, implementation and modification of catch shares programs going forward:

    1. Science-based catch limits;
    2. Robust monitoring;
    3. Identification of explicit conservation, social and economic goals;
    4. Permits issued for no more than 10 years;
    5. Adequate enforcement; and
    6. Fair and equitable allocation of quota shares.

    As we document in our report, catch shares programs have been a mixed bag. Some have worked fairly well while others have had negative impacts on fishermen and their communities. In our view, these six design principles have broad application across the country. To go further and mandate a particular type of management system nationally ignores regional variability and the particular circumstances of each fishery. What may work in Alaska may not work in Florida. Moreover, as we’ve pointed out in our report, catch shares programs can create negative socio-economic impacts. In order to minimize such impacts wherever possible and to ensure that those impacts are fairly distributed across a fishery, the decision to move to a catch shares system in a particular fishery, and the design of such a system, should include input from the affected local fishing communities.

    One of the most profound socio-economic impacts of catch shares programs is job loss. Reducing the number of fishing vessels and fishermen is usually one of the goals of a catch shares program in order to match fishing capacity with the number of fish that can sustainably be removed from the ocean. However, how those reductions are distributed across a fishery has implications for fishing communities and ongoing management. Unfortunately, most past catch shares programs have awarded quota shares based on how many fish a specific permit holder caught in the past. This may reward the largest fishermen at the expense of smaller, often family fishermen. Clearly, there are significant economic benefits for those fortunate enough to get enough quota to maintain a viable business, but what about those who don’t? Does anyone think that the success of those left in the fishery somehow assuages the problems of those left out? The simple fact is that catch shares programs create winners and losers. As we discussed in our paper, this fact must be addressed in the design and implementation of these programs.

    The first and most important recommendation in our report is that catch shares must be based on science-based catch limits. This recommendation responds to claims by many catch share proponents that catch shares are better at achieving positive outcomes than catch limits or hard quotas. A catch shares program must have a catch limit in order to give managers the ability to accurately allocate quota among fishing entities. To ensure sustainability, a catch limit must be set so that overfishing does not occur and depleted fish populations can rebuild. If this limit is set too high, overfishing will occur or rebuilding will be delayed, regardless of whether it is associated with a catch shares program or not. Moreover, while all catch shares programs need catch limits, such limits can be associated with other fishery management tools such as time and length of fishing seasons, size and bag limits, etc. In her blog posting, Ms. Bonzon states “Pew is right that these are tough problems for fisheries, but they neglect to mention that catch shares are better at achieving positive outcomes than nearly any other management approach currently in use.” We do not necessarily agree with this point of view. While Ms. Bonzon does not provide a reference to support this statement she may be referring to a study published in Science (September 19, 2008) as evidence that catch shares programs enhance fisheries sustainability. While this study produced interesting results, two responses published in Science on January 16, 2009 paint a more nuanced picture by raising concerns about the impact catch shares can have on the larger ecosystem through bycatch of non-target ocean wildlife, habitat damage, increased targeting of species that are not in the catch share program and illegal fishing by fishermen who do not receive quota. The authors of both letters argue for a more comprehensive and diverse set of solutions to our ocean fisheries problems. We could not agree more.

    Obviously we were heartened when Ms. Bonzon wrote that most people agree that catch shares should be designed for the unique needs of fisheries and the communities that depend on them. However, there are several instances where we disagree with the EDF criticism of the case studies contained in our report. One example of this is a statement by Ms. Bonzon that “catch shares for the commercial fleet are good for recreational fishermen.” As Dick Brame from the Coastal Conservation Association pointed out during a press briefing we hosted on November 3, recreational fishermen are very concerned that commercial catch shares programs will lock in the allocation of fish in a fishery between commercial and recreational fishermen. Once this occurs, Mr. Brame is concerned that the only way recreational fishermen could expand their share of the fish in a fishery would be for the government or the fishermen to buy quota from the commercial fishermen. Even if there were willing commercial fishermen sellers, where would the money come from? Plus, how equitable is it for recreational fishermen to have to buy quota that was given to commercial fishermen for free? These fundamental questions must be addressed when developing a catch shares program in a mixed fishery.

    Second, Ms. Bonzon takes issue with our description of the Gulf red snapper fishery and the recently adopted red snapper catch shares program, indicating that we failed to note the success of the catch share program in restraining commercial catch. This is not correct. We noted in the report that the Gulf of Mexico Fishery Management Council developed a catch share program in the commercial fishery to help address certain problems, and then went on to indicate that the program had achieved the successes that EDF says we missed. Below is the relevant quote from our report:

    “Since implementation, after a further reduction of the quota in 2008, the price paid to fishermen has increased 17 percent, while average landings, number of trips and days at sea have declined. Coupled with the reduction in minimum size, the ratio of landed to discarded fish has improved threefold to fourfold, reducing overall mortality by lowering the amount of discarded fish. Between 1996 and 2003, the red snapper fleet concentrated its fishing effort in an average of just 77 days to catch its quota. In the past two years, however, that same effort has been spread across an entire year. The IFQ program also provides a better system of accounting for fishing activity. In the past two years, annual landings have been just shy of the allowed commercial quota—a sharp improvement over the previous 17 years, when the quota was exceeded nine times.”

    Third, EDF’s statement that the decrease of 11 percent in vessel owners in the surf clam/ocean quahog catch shares fishery is a “more accurate” reflection of consolidation paints an incomplete picture of the economic impacts that consolidation has inflicted on that fishery. We stated that the number of vessels in that fishery declined from 128 to 59 in two years, figures derived from a report written by the General Accountability Office (the investigative arm of Congress). A vessel decline of more than 50 percent in the fishery indicates that a number of owners owned multiple vessels, but it also suggests that there were significant job losses amongst the crew of those vessels that could no longer participate in the fishery.

    In conclusion, we strongly believe that in order to maximize the benefits of catch share programs, while minimizing their negative impacts, attention needs to be paid equally to both when deciding whether they should be implemented in our nation’s fisheries. In the end, we both agree that “design matters.”