Community-based Sectors for the New England Groundfish Fishery

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Under current sector regulations, sectors can not buy, sell or trade ACE with other sectors. They must constrain their catch of all species for which they have sector allocations to those annual allocations. If more sectors are authorized, substantial gains in profitability for sectors may be realized by allowing sectors to trade ACE. There are some communities, such as some in Downeast Maine, that had traditionally had some involvement in the groundfish fishery, but no longer have any fishermen with permits with “A” DAS and catch history. Sectors in conjunction with permit banks could provide an opportunity for permit owners and communities without “A” DAS and catch history to reenter the groundfish fishery. Individuals that hold groundfish permits with only “C” DAS could enter a sector without purchasing a new permit and could have access to that sector’s allocation. A sector could be created with a permit bank to acquire catch history for this purpose. In sum, although there has not been an explicit program to facilitate development of communitybased sectors, the opportunity exists to do so and a number of them are likely to evolve in the coming years. These community-based sectors can serve dual goals of improving the profitability and safety of groundfish fishermen and also allowing communities to retain or regain their involvement in the groundfish fishery. However, there a number of barriers that are impeding development of community-based sectors and fuller utilization of sector management in general. Listed below are a number of recommendations that may facilitate more effective use of sectors by fishermen and communities. These include actions that could be taken by NMFS independently, regulatory reforms that may be included by the Council in Amendment 16, and creation of new financing program that would require federal legislation: Recommendations 1. To facilitate individual permit holders’ evaluation of their decision of whether to join a sector, NMFS should compile the catch histories by fish stock of all permitted groundfish vessels and inform all current permit owners of the process of acquiring their catch history and the specific forms and signatures required for release of their catch history to them and to a sector organizer and or sector manager. 2. The NEFMC should authorize a streamlined process for sector approval that does not require a Council framework action and reduces the burden of documentation and regulatory analysis that must be done by sector organizers. 3. The NEFMC should allow sectors to trade some proportion of their ACE allocations with other sectors within the fishing year to facilitate catch balancing and greater utilization of ACE portfolios. 4. The NEFMC should fix the allocation baseline for determining individual permit holders’ contributions to sector allocations and decide how overall sector allocations are adjusted with movement of individuals in, out and between sectors. Future catch privileges associated with individual permits, whether in the context of sectors or other management systems, should be unaffected by how catch privileges are utilized within sectors. 5. The NEFMC should explicitly authorize community-based sectors to form permit banks that can hold permits and contribute catch history to the sector. This recommendation is not meant to imply that multiple permits from a single vessel could be split. 6. Congress should create financial resources for development of community permit banks through a loan guarantee program or a direct loan program modeled on the industry funded buyback structure. 6
1.0 Introduction The groundfish fishery in New England has been going through a sustained period of regulatory and economic change since the mid 1990s. These changes have led to substantial reorganization and consolidation of the industry that have and continue to change the character and geographic distribution of the industry. Concerns have been raised by fishermen and community leaders in some ports that landings will eventually be consolidated in a few large ports and that smaller ports and communities that have traditionally been involved in the fishery will no longer have a place in the fishery. Industry and community leaders in Maine are concerned that a trend in migration of fishing operations toward Massachusetts will leave Maine with few participants in the fishery and insufficient groundfish landings to support the Portland Fish Exchange. The Northeast Multispecies Fishery Management Plan (FMP) contains provisions that allow groups of permit holders to form self organized harvest cooperatives called “sectors”. Sectors can be granted a share of the total allowable catch of regulated groundfish species based on the catch histories of the members of the sector. Sectors may receive exemptions from many of the regulations currently used to limit catch in the fishery in return for a binding agreement to keep sector catches within specified limits. While they were not designed specifically for this purpose, 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. This report presents a feasibility study 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. It identifies benefits, costs and constraints (organizational, financial and regulatory) to development of community-based sectors. The utility and feasibility of a permit bank that would enhance the viability of a community-based sector is also analyzed. 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 Southwestern Maine and another for a small community in Midcoast Maine. However, many of the conclusions regarding the utility and feasibility of community-based groundfish sectors are applicable to the entire New England region. 2.0 Background on the Groundfish Fishery and Sectors Following the depletion of a number of key groundfish stocks in the late 1980s, the Conservation Law Foundation successfully sued the Department of Commerce and forced implementation of a rebuilding plan that implemented a limited access management program based on individual vessel allocations of days at sea (DAS). The series of Amendments and frameworks to the Northeast Multispecies (groundfish) Fishery Management Plan (FMP) contains FMP, together with three vessel and permit buybacks, eventually led to reductions in landings and revenues and some consolidation of the limited access fleet. However, a sustained reduction in landings did not occur until after 2001. 7
Page 1 and 2: Community-based Sectors for the New
Page 3 and 4: Table of Contents Executive Summary
Page 5 and 6: Community leaders in Portland and P
Page 7: of community-based permit banks. Th
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
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Page 55 and 56: References Alexander, Yvette 2006.M
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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
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Gloucester Fixed Gear Sector Peter
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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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