Community-based Sectors for the New England Groundfish Fishery

opportunities for consolidation of the industry that could reinforce the trend of consolidating
landings in larger ports at the expense of smaller fishing communities. Additionally sectors make
it possible to move fishing privileges from smaller boats to larger boats which was not possible
with DAS leasing. On the other hand, sectors may also mitigate some of the disadvantages faced
by smaller, less mobile boats and even create some potential advantages (e.g. development of
high value markets for dayboat fish).
Sectors offer an opportunity for communities that value their access to the groundfish fishery to
actively maintain it through a partnership with community fishermen. Fishermen will require
organizational and technical assistance to set up and operate a sector. Community assistance may
be critical to sector development and also the key to retaining an active groundfish fleet in the
face of incentives and opportunities to move fishing operations or ACE allocations to larger ports.
Sectors also offer the possibly of establishing some community ownership of fishing rights and
potentially ongoing access to future entrants through creation of a permit bank partially or fully
owned by a community entity. By purchasing permits and associated catch history, a community
entity could own a share of a sector’s catch allocation and make it available to sector members as
an incentive to retain vessels in the community. Such a permit bank might also provide a means
for communities to provide ongoing access to new fishery entrants, perhaps through an
apprenticeship program. The economic feasibility analysis of permit banks presented in this
report suggests that a permit bank could be a profitable enough investment to finance permit
acquisition with a commercial loan and still provide substantial surplus benefits. However,
uncertainty about the security of the fishery access right associated with the permit and the ability
of the permit bank to utilize that right may make it difficult for communities or groups of
fishermen to find funding to acquire permits due to the risk. Establishment of a fixed baseline for
sector allocations will increase the level of security for such an investment, but the possible
transition of the fishery to sector or other forms of management still creates considerable risk and
uncertainty. A loan guarantee program might be needed to help lenders manage the risk
associated with loans for permit banks. Alternatively, a mechanism for direct government loans to
community permit banks could be created.
Direct involvement by communities in sectors requires a more active role in the fishery than most
communities have taken to date. While many communities have created or administered
programs to assist fishermen, the concept of direct involvement in marine fisheries management
and particularly of ownership of fishing rights is likely to meet resistance from community
leaders as well as fishermen. Some fishermen express philosophical objections to community
entities owning fishing rights, and communities generally do not have the experience or the
mandate from tax payers to take an active role, never mind equity position, in marine fisheries.
However, community involvement in management of shellfish fisheries in tidal areas is not
uncommon in New England states and does provide some precedent.
Notwithstanding the lack of active participation of communities in establishing groundfish
sectors, several groundfish sectors are likely to be de-facto community-based. The two Cape Cod
sectors, which may be reformed as new sectors with new allocations, have been communitybased
from the start and have been exploring the development of a permit bank. The Port Clyde
sector is community-based, and some of the sectors proposed by the Northeast Seafood Coalition
may also be geographically defined community-based sectors. A non-profit entity in Gloucester
has been created to administer several million dollars from a settlement process for establishment
of an offshore LNG terminal. This money was set aside to provide additional access to Gloucester
fishermen in the form of leased DAS, but could also fund the establishment of a permit bank to be
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