The Catch 22 of New England Fisheries’ Catch Share Scheme

Declining fish stocks and industry consolidation threaten to price out small-scale fishermen

Given that commercial fishing is the most dangerous occupation in the United States, and very far from the most lucrative, it takes a special tenacity to stick with the profession. Doug Maxfield is one such fanatic. Born in Essex, MA, a town over from Gloucester, Maxfield began digging for clams and surf-casting for striped bass when he was 13, then put himself through college by crewing aboard commercial vessels. In 2000, he began work aboard a gillnetting boat, targeting groundfish –– species such as haddock, pollock, and especially cod –– in the Gulf of Maine, and his obsession with the ocean began to pay off.

fishing boatPhoto by Rebecca Schley
A lobster fishing boat in Maine. Fishermen unable to make a living catching groundfish are now scrambling to gear up for still-abundant species such as scallops, conch, and lobster.

“Man, I was gonna hit it big,” Maxfield recalls. “When I started, I saw myself in an industry where the average age of a captain was around 55 or 60, and I’m thinking, well, these guys are gonna start retiring.” He began saving money toward buying his own boat.

Maxfield, now 36, has his boat at last — but no groundfish to catch with it. Cod stocks in the Gulf of Maine have cratered. According to a 2011 assessment by the National Oceanic and Atmospheric Administration (NOAA), the Gulf contains only 26.5 million pounds of cod, less than 20 percent of federally mandated standards for rebuilding the depleted stock.

Where have the fish gone? Unsurprisingly, scientists, regulators, and fishermen all have their own hypotheses. Some claim that climate change has pushed the schools into deeper water; others say that predators like seals and dogfish have devoured the cod; still others claim that large boats have been hammering spawning aggregations and preventing the fish from breeding. Whatever the case, cod are few and far between in the once-fecund waters that lured Europeans to the New World. “There’s been an extreme contraction of the resource,” says Aaron Dority, director of the Downeast Groundfish Initiative, a project to rebuild Maine’s groundfish stocks. “You can’t find Gulf of Maine cod outside of a few select areas.”

Utter collapse wasn’t what regulators expected back in 2010, when the New England Fisheries Management Council implemented a catch shares system for the region’s groundfish industry. Catch shares are a form of fisheries management that turn public fish into private property, by splitting up a fishery’s scientifically determined “Total Allowable Catch” into exclusive slices of a pie. Each fisherman is granted a slice of the pie, and fishermen are allowed to buy, sell, or rent their slices (Read “Net Benefits,” the Journal’s earlier report on the system).

Catch shares have been credited with restoring fisheries from Alaska to New Zealand, and at their best they can be a boon to fishermen by promoting flexibility. If, say, one boat-owner is looking to scale up his operation while another has a herniated disk that’s keeping him off the water, catch shares allow the laid-up fisherman to rent or sell his share to the ambitious one. Today, 15 different US fisheries are governed by catch shares, and several more programs are in development. (While most catch share programs allot fishermen “Individual Transferable Quotas,” or ITQs, New England’s system organizes fishermen into cooperatives called sectors, which distribute shares among their members.)

Yet while catch share programs hold promise, they are not without problems. Foremost among these is determining how large a slice each fisherman should receive. Most catch share systems — New England’s included — use historical catch data to determine allocations, a method that some call “rewarding the pigs.” The fishermen most responsible for historic overfishing are grandfathered into the lion’s share of future fish. Meanwhile, younger fishermen without extensive catch histories receive comparatively tiny slices, and are forced to supplement their shares by leasing quota — often from “armchair fishermen” who keep getting paid to rent out their shares even after they’ve retired.

For those fishermen who weren’t fortunate enough to get their allotment for free, renting the right to fish can excise a huge chunk from their bottom lines. One study of British Columbia’s halibut fishery found that fishermen who were forced to lease large amounts of quota tended to be “less viable or marginally viable.” In New England, where the Total Allowable Catch was set at an extremely low level, the divide between the haves and the have-nots was especially stark. “If you’re fortunate enough to be granted sufficient initial allocation to fish, then you’re at a significant advantage relative to a fisherman who’s been granted a far lower initial allocation,” says Dority.

As these unlucky lessees quit fishing, and armchair fishermen discharge their quota to the highest bidder, access to fish often ends up concentrated in the hands of the fishermen with the most buying power. According to a NOAA review released in December 2012, that appears to be what has happened in New England’s groundfisheries since the inception of catch shares. In two years, the total number of vessels regularly catching groundfish dropped from 601 to 450, a loss of 25 percent of the fleet, and trips to sea taken by crewmen declined by 11 percent. Meanwhile, the number of boat owners with three or more vessels increased by a third, and over 85 percent of groundfish revenues piled up in the hands of just 20 percent of vessel owners. In all, there are now fewer fishermen in New England than when catch shares began, and the ones left standing are catching a larger share of the fish.

Yet while politicians from both ends of the political spectrum have fretted about the loss of employment — former Massachusetts Senator Scott Brown even called for the resignation of then-NOAA administrator Jane Lubchenco — consolidation in New England’s fisheries long predates the arrival of catch shares. “The reality is that high consolidation and fisherman-on-fisherman predation have been part of New England’s fisheries going back to the 1860’s,” says marine historian Matt McKenzie. “Its history resembles any highly capitalized industrial operation in America, from US Steel to Standard Oil to railroads.”

What’s more, some degree of attrition may be necessary for the fishery to survive. “Every catch shares program is put into place to address issues of overcapacity, situations where there’s too much fishing pressure,” says Kelly Denit, a fisheries management specialist at NOAA. Many of the grievances aimed at catch shares, she says, are born of frustration about the catch limits — or as Dority puts it, “You wouldn’t hear a lot of the fishermen complain about catch shares if the TAC was higher.”

Also, it can be difficult to distinguish fishermen who are forced out from ones who eagerly cash out their chips. “A vessel that fished a few days a year for groundfish might now decide to lease out their quota and go catch lobster instead,” says George Darcy, an administrator in NOAA’s Northeast office. “Is that consolidation? Not really.”

But according to Brett Tolley, a community organizer with the North Atlantic Marine Alliance (NAMA) and the descendent of four generations of fishermen, the problem isn’t just who’s departing the industry, but who can’t get in. “I go up and down New England talking to young people, and I hear the same story,” Tolley says. “They’ve been training all their lives to be the next generation of fishermen here in New England, but they can’t. The generation above them got their access to the fishery for free, but for people my age, it might cost upwards of half a million dollars just for the right to fish.”

Or at least it did — until the cod disappeared, effectively cratering the catch shares’ value. In 2011, New England’s fleet caught just 41 percent of its allotted groundfish; as more fishermen have realized that they can’t fill their quota, the price of buying and leasing shares has plummeted. “This year, the market for cod started at a dollar a pound but dropped steadily, to the point where I don’t think you’d pay more than about 25 cents for Gulf of Maine cod,” Paul Parker, director of the Cape Cod Fisheries Trust, told me in late 2012. The cod’s disappearance has temporarily put a stop to consolidation, he says. Right now not even the big boats are eager to acquire quota. “Watching this lease market is like watching the housing market in 2007.”

The result is that small fishermen, the operators of so-called “day-boats,” find themselves trapped in a vise. There is no cod for them to catch right now, and as a result their shares are nearly worthless. But if and when the fish return, fishermen risk falling victim to the same forces of price escalation and consolidation that have plagued other catch share fisheries.

What’s more, the depressed market has created ideal circumstances for deep-pocketed operators to snap up quota at bargain-basement prices, say some observers. “It might be 10 years from now, but somebody’s gonna own the whole fishing industry for short money,” predicts Plymouth-based fisherman Ron Borjeson.

Catch share systems elsewhere in the world have taken proactive steps to prevent such consolidation. In Alaska’s halibut fishery, for instance, no single boat owner can hold more than 1.5 percent of the total available quota. Still others set aside shares exclusively for new and small-scale fishermen. To Brett Tolley’s mind, guaranteeing these diverse interests a seat at the table is essential to maintaining robust coastal communities. “We know that smaller-scale fishermen provide more jobs, have a smaller footprint on the ocean, and provide a more local source of food,” he says. “Who fishes truly does matter.”

According to Maxfield, small-scale fishermen buttress a tightknit marine economy, an ecosystem of businesses inextricably linked to one another. “Every one of these guys who has to sell out has two crewmen, and those guys are out of a job,” he says. “And that’s not to mention the boat mechanic, the carpenter, the guy that sells fuel, the guy that sells ice, the guy that runs the boatyard.”

While no safeguards currently govern New England’s catch shares program, groups like NAMA are pushing for the council to adopt a suite of policies designed to protect small fishermen, including consolidation caps, quota set-asides, and restrictions that would prevent large offshore boats from intruding on inshore waters, an encroachment that many day-boat operators blame for the depleted stocks. The council has already discussed the policies, together called Amendment 18, several times. “I think Amendment 18 will likely go through in some fashion,” says NEFMC chair Rip Cunningham. Adds Kelly Denit of NOAA: “Catch share allocations are a privilege — they are not rights granted in perpetuity. We think the council should be looking at how the fishery has evolved.”

At present though, Amendment 18 is the least of the council’s worries. Last winter, the NEFMC voted to cut cod limits by 77 percent, a drastic ruling that has the industry reeling — never mind that cod have become so scarce that many fishermen can’t fill their quotas. Fishermen unable to make a living catching groundfish are now scrambling to gear up for still-abundant species such as scallops, conch, and lobster. The ones who can’t adjust have no choice but to cut bait.

“Every week I hear about another guy who spent his whole life fishing and is selling out,” says Maxfield, who plans to fish lobster and tuna in his new vessel. “We’re hemorrhaging, and someone needs to put their finger in the hole.”

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