Community-based Sectors for the New England Groundfish Fishery

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Executive Summary The Northeast Multispecies Fishery Management Plan contains provisions that allow groups of permit holders to form self-organized “sectors” that are allocated a share of the total allowable catch of the groundfish species they target. Sector management offers a number of potential advantages to fishermen over the current management system which is based on a complex set of regulations that dictate when, where and how much fishermen can fish. Sectors offer fishermen the opportunity to: increase efficiency by increasing flexibility of when and where to fish; manage fishing operations to meet social as well economic objectives of the sector; concentrate on increasing quality and value of fish caught without concern for lost fishing time; make targeting and location decisions without concern for lost fishing time; avoid having to return to port or discard fish because a trip limit is reached for one species; and transfer (share, trade or consolidate) catch privileges among sector members to reduce fishing costs. Sector provisions offer fishing communities a means to address concerns that reduction and consolidation of groundfish operations threaten the viability of their current groundfish industry. A community-based sector could provide the means for a community and its fishermen to retain or regain access to the groundfish fishery and to ensure that the community benefits from this access. To date there have only been two sectors approved by the NEFMC despite the potential advantages they offer. Development of sectors has been constrained by a lack of understanding or the potential advantages of sectors, the difficulty and cost of forming a sector, and the lack of technical and financial resources available to potential sector organizers. Despite these constraints, a large number of sector proposals were submitted to the Council in May of 2007. These sectors have the potential to include vessels with catch history representing the majority of groundfish catch in the Multispecies fishery. This report presents a study of the feasibility of community-based groundfish sectors. The purpose is to determine the objectives of community-based sectors, how they can be organized and implemented, how they can be financed, and whether they are likely to be financially viable. The concept of a permit bank as a means to enhance the viability of a community-based sector is also evaluated. The analysis presented here is based largely on two case studies of prospective community-based groundfish sectors, one for a potentially larger community sector in Portland, Maine and another for a smaller sector based in Port Clyde, Maine. However, many of the conclusions regarding the utility and feasibility of community-based groundfish sectors are applicable to the broader New England region. The primary interest of the Port Clyde and Portland fishermen in developing a community-based sector is to improve their profitability and economic viability. However, they also expressed the belief that sectors could improve safety. Some potential sector members envision using the sector to operationalize fishing practices that will minimize bycatch of juvenile or spawning fish through gear modifications, fleet communication, voluntary closures, or other management measures. 2
Community leaders in Portland and Port Clyde are supportive of sectors as a means to ensure the economic viability of their local fishermen and related businesses. However, while they are willing to provide some organizational assistance and possibly assistance in acquiring financing, they appear unwilling to spend taxpayer dollars to support a community-based sector. This could differ in other communities. Port Clyde Case Study The Port Clyde case study is based on a potential sector that includes 17 permits for mobile gear vessels between 36 and 56 feet in length. These 17 permits represent nearly all of the groundfish vessels fishing out of Port Clyde and the majority of active groundfish vessels in the Mid-coast region of Maine. A strawman operational structure was developed through consultation with the Mid-coast Fishermen’s Association. Under this strawman, the sector would receive allocations of all regulated groundfish species its members regularly encounter. Because the rules for allocation to sectors were in flux at the time this research was being undertaken, the analysis of the economic feasibility of the sector is done using allocations representing catch history for two periods: (1) from May 1, 2001 through April 30, 2006, and (2) from May 1, 1996 to April 30, 2002. The Port Clyde sector would restrict its operations to the Gulf of Maine. It would be exempt from DAS limits, trip limits, and seasonal closures but its vessels would continue to be subject to the same restrictions on year-round closed areas and gear as other multispecies vessels. The Sector envisions assigning each permit-holder in the sector a specific percentage of the overall allocation of each of the species-stocks for which the sector receives an allocation. Sector members would be free to utilize these allocations on their vessels or transfer them to other vessels within the sector upon notification and approval by the sector manager. The expected annual gain in gross revenues under sector management is estimated by subtracting the projected annual revenues without sectors management from projected revenues under sector management. The annual gain in net revenues for the sector is calculated by subtracting from the increase in annual gross revenue, the variable operating costs, the ongoing costs of sector management, and loan payments to repay sector establishment costs. The analysis suggests that sector management can provide substantial gains in net revenues to sector vessels and that these gains far outweigh the costs of establishing and operating a sector. In the first year, the sector is projected to increase net revenues by $605 thousand with the FY01-05 allocation and by $505 thousand with the FY96-01 allocation. The projected gains for the sector are based on the ability of the sector to more effectively and efficiently utilize their share of the overall target TACs by targeting effort on stocks for which total industry catches have been well below TACs and by landing fish they are now forced to discard because of trim limits. The ability to do this would be a consequence of exemptions from DAS restrictions, rolling closures and trip limits. The sector may achieve additional gains beyond what is calculated here through consolidation of harvesting on the most efficient sector vessels and through higher prices if they are able to improve quality or make direct marketing arrangements. Portland Case Study Analyses are done on two hypothetical Portland sectors. Portland Sector A includes all groundfish vessels with more than 50% of their groundfish revenues in fishing year 2005 from landings in Portland, a total of 76 vessels. Portland Sector B is a subset of Portland Sector A and includes 50 groundfish vessels with more than 90% of their groundfish revenues in fishing year 2005 coming from landings in Portland. A strawman operational structure for the sectors was developed and 3
Page 1 and 2: Community-based Sectors for the New
Page 3: Table of Contents Executive Summary
Page 7 and 8: of community-based permit banks. Th
Page 9 and 10: 1.0 Introduction The groundfish fis
Page 11 and 12: Although Amendment 13 effectively e
Page 13 and 14: somewhat vague on how the allocatio
Page 15 and 16: 2.2 Experience with Existing Sector
Page 17 and 18: me to explore the idea further and
Page 19 and 20: period is that which was used to de
Page 21 and 22: shown above in Table 2. Revenue pro
Page 23 and 24: Table 3a: Port Clyde Sector Revenue
Page 25 and 26: ecruitment and could be either high
Page 27 and 28: increased. They also have caught a
Page 29 and 30: 3.2.1 Strawman Sector Structure and
Page 31 and 32: Table 8: Portland Sectors A and B V
Page 33 and 34: discussed earlier these price proje
Page 35 and 36: Table 9b: Portland Sector A Revenue
Page 37 and 38: Table 9d: Portland Sector B Revenue
Page 39 and 40: Table 10b: Portland Sector A Revenu
Page 41 and 42: Table 11b: Portland Sector B Specie
Page 43 and 44: vessels would be leased to sector v
Page 45 and 46: is ostensibly to reduce excess capa
Page 47 and 48: Table 15: Projected Total Revenue,
Page 49 and 50: later. However, rolling baselines c
Page 51 and 52: 4.4 Communities without Catch Histo
Page 53 and 54: opportunities for consolidation of
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References Alexander, Yvette 2006.M
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Appendix A: Landings and revenue pr
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Appendix B: Groundfish Price Model
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Appendix C: Sector Proposals Submit
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Port Clyde Community Sector Glen Li
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Full Retention All fish caught 1. e
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Reasons for Existence: 1. end overf
Page 69 and 70:
Gloucester Fixed Gear Sector Peter
Page 71 and 72:
New Bedford Channel Trawl Sector Ri
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Point Judith / Southern New England
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Pier 6 Initiative Michael Walsh Req
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Community-based Sectors for the New England Groundfish Fishery

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