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Sep. 17, 2007
Dear Gulf Council,
Because the purpose of Fishermen's Advocacy Organization to ‘advocate for the interests of commercial fishermen’, we have closely examined the alternatives proposed in the recently released Amendment 29. FAO has taken a position to support the IFQ alternative and believe that IFQ is the only alternative that will accomplish the effort management goal of ‘rationalizing effort and reducing overcapacity’ on a voluntary basis.
The point of this letter is to explain why we support IFQ. The directors of FAO are very protective of the fishing rights of all fishermen and are wary of alternatives that that discriminate against small-scale operations, and that encourage derby fishing or allow for redistribution of historical market share. Furthermore, IFQ makes sense from an accountability standpoint, conservation standpoint, and the unique ability of IFQ to achieve the objectives of management. IFQ will allow the multi-species and small-scale producers to remain in the fishing business, under the same rules as those fishermen who target groupers exclusively.
Reading and understanding Amendment 29 is crucial for making an informed decision and we are encouraging all participants to become educated in the alternatives. Smaller scale fishermen need to realize that a properly developed and administered IFQ plan is the option that will allow their future participation in the fishery. The other alternatives either evict them outright, or set the stage to evict them eventually. Fishermen's Advocacy Organization strongly believes that IFQ is in the best interests of fishermen, both large-scale and small-scale.
Members of our organization should accept that quota cuts are on the horizon and that unless we take steps to equitably bear the weight of the cuts and increase the profit margins on the fish we are allowed to catch we can be assured of tough times indeed. We firmly believe that fishermen who have an annual quota and 12 months to catch that quota can maximize their profits and can make informed, long range financial decisions
Latent Permits, latent effort.
Latent permits are ones that are not often used and lack a substantial catch history. There is fear that these permits that have little or no history of catch will be used in the future to catch fish, thereby adding effort.
Latent effort is the potential effort associated with a permit that is not yet realized. Latent effort exists in every permit. Latent effort is feared because unrestrained additional effort is what causes closed seasons. The argument goes that if we revoke the permits with lower catch histories, we will remove the possibility for those folks to catch more fish in the future. The unspoken part of that argument is that “the remaining fishermen will be able to catch the fish that would have been caught by the fishermen who are evicted”, and therefore the problem is never fixed. It is simply perpetrated by fewer people. History proves that this method doesn’t work, yet those evicted are never reimbursed. A better plan (IFQ) manages the effort of every permit.
Latent permits are often removed by a process called “limited entry”.
Limited Entry
Fishermen’s Advocacy Organization does not support limited entry because limited entry revokes permits from fishermen. The basic premise of limited entry is to take out the smaller players so the larger players can fish longer. This will not achieve the objectives of Amendment 29. Limited entry does not solve derby behavior, nor remove derby incentives. We tried limited entry in the red snapper fishery years ago, it didn’t work. The vessels that remained simply added effort, and the quota closures quickly resumed.
Buyout
Buyouts have a history of squandering money, and not working. Buyouts are like limited entry. Where limited entry evicts fishermen involuntarily, buyouts pay fishermen to leave. The fishermen who remain have to pay back the loan. The big question is ‘what are you buying’? The answer is nebulous- “you are paying for people to leave, then the more effort you add, the more you benefit”. This is called a derby incentive. These buyouts generally promote derby behavior, and add incentives to exploit the latent effort that exists in every permit. The “Industry Buyout” was extremely unpopular for several reasons-
1) it was devised outside the council process, and as unpopular as the Council process may seem, it is designed to elicit the input of fishermen in a public forum. Because the buyout bypasses the council and instead goes directly through congress, the process of stakeholder input is more likely to be corrupted by insiders and individuals who are politically connected.
2) The Buyout plan was designed with limited entry as a crucial element. The first action of the buyout attempted to evict the small producers for the benefit of the larger producers.
3) The buyout used a weighted voting scheme to enact limited entry, essentially a bullying tactic to push out small producers.
4) The buyout never linked the landing history of a permit with the vessels that actually caught the history. Consequently, many permits were transferred prior to the referendum, in anticipation of some “free money”. The buyout included this huge loophole, allowing top producing boats to continue to fish as hard as ever (with different permits), while at the same time allowing clever owners to sell the landing history from the old permits(now transferred), pocketing hundreds of thousands of dollars.
Traditional buyouts will not rationalize effort, and will promote derby incentives in the grouper fishery. We would like to see the “Buyout” alternative in Amendment 29 classified as “considered, but rejected” in future drafts.
An accountable buyout plan could be developed, if it were conducted within the framework of IFQ management. But because IFQ lends itself to voluntary consolidation, buyouts become unnecessary, and excessively costly. The time to debate the merits of a buyback is after an effective IFQ system is established, not before.
Permit Endorsement
Endorsements will not remove derby incentives, nor will they rationalize effort.
Permit endorsements are basically a form of limited entry. Endorsements would not revoke a reef fish permit, but add an endorsement to an existing permit as a condition to land grouper. Like limited entry, fishermen will need to have a landing history in excess of some threshold in order to qualify. Be aware that this threshold will have to be set high enough, and eliminate enough competition, to be able to ensure that the larger producers will be able to fish year round. This will remove small-scale operators.
Gear endorsements are another type of permit endorsement. For example, a longline gear endorsement would allow only certain boats to use that gear. Bandit endorsements would restrict the use of bandit gear. Same applies with rod and reel. Gear endorsements would make some fishermen more equal than others, by enacting differing standards for different fishermen. Some fishermen will have privileges that others do not.
Longline endorsements, if allowed to happen, would command big dollars on the open market. Anyone paying these big bucks to buy an endorsement would have a huge incentive to add effort in order to pay for this large investment. These incentives are not rational. Since endorsements do not manage effort, they do not address the objectives of Amendment 29. This is reason enough to reject endorsements.
Days at Sea
The days at sea proposal is not popular among fishermen. It would limit the number of days fishermen are allowed to fish. “Days at sea” management uses “days” as a crude proxy for landings. This method, however, does not rationalize effort. In fact, the incentive to overcapitalize is accelerated because fishermen will adjust their operation to make the most of the limited days that they are allowed to fish. To combat this effect, fishery managers would be forced to reduce the number of days they allow fishermen to fish. This is not popular among fishermen in New England. Fishermen’s Advocacy Organization realizes it would not be popular in the South either.
IFQ- (also known as Limited Access Privilege Program),
IFQs are designed to decrease overcapitalization in a voluntary manner. Fishermen who choose to remain in the fishery may do so. Those who choose to exit will have the opportunity to sell their fishing privilege to other fishermen looking to expand. The total catch will continue to be limited by the commercial quota, as it is currently. Yet each fisherman will begin the season with guaranteed access to a defined quantity of fish, and may land them in the time frame he chooses, without having to race against fellow fishermen for the same fish. This dedicated share of the commercial quota is a known quantity that can be taken to the bank, quite literally. In addition, fishermen will have the flexibility to adjust this quantity either up or down according to their business plan. Some fishermen will cash out and others will buy in. Some will expand and some will contract their participation in the fishery. Many grouper fishermen will choose to trade some grouper shares for existing red snapper shares so they can keep what they are actually catching. This will reduce some of the waste that currently takes place in the reef fish complex.
Speaking of waste, IFQs will be the best means of allocating the under 20” red groupers should the size limit eventually be reduced. In the absence of IFQs, a reduction of the red grouper size limit would result in a derby of epic proportions, one that would rival the red snapper derby, (the derby IFQs recently solved). And we don’t want that kind of derby in the grouper fishery.
Conclusion
A properly developed and administered IFQ is the best alternative for satisfying the effort management goals of Amendment 29. Additionally, IFQ management will allow the continued participation of small operators who would otherwise be evicted from the grouper fishery (through limited entry, endorsements, buyouts, etc). For the reasons stated above, Fishermen's Advocacy Organization supports IFQ for the grouper fishery.
Sincerely,
Bill Tucker Steve Maisel
President Vice-President
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