Economic Impact

The announcement that a major marine trade show will be coming to New Bedford this June brought good news not just for city officials but also for the owners of the city's new hotel.

Mayor Scott W. Lang announced recently that New Bedford will host the 42-year-old biennial event, Commercial Marine Expo, this June. The expo is relocating from Providence.

Expo exhibitors and attendees will be the first group to utilize the newly-constructed Fairfield Inn & Suites in New Bedford, the city said in a released statement. Currently under construction, the five story, 106-room Lafrance Hospitality hotel is expected to be complete by summer. It is the city's first hotel in 40 years.

"We were able to designate the Fairfield as our headquarters hotel because the hotel's owner, Richard Lafrance, was able to block a similar number of rooms in his properties in Fairhaven and Westport in the unlikely event that the hotel's opening is delayed," said CME Show Director Ted Hugger.

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Struggling groundfish interests have agreed to give the thriving scallop industry about 200,000 pounds of yellowtail flounder from its allocation for 2010 for future considerations.

It was a deal — consummated last week and based on trust the scallopers will compensate groundfish interests financially for their sacrifice — that will allow the scallopers to take advantage of a very large windfall, according to key industry involved in the secret business discussions that occurred in Gloucester and New Bedford.

But the arrangement — a trade of allocation for cash within the industry — is also being viewed as an example of how the catch share system, which commodifies the common wealth of the seas, can work. Advocates of the system argue that catch shares will help align capital and conservation interests.

Read the complete story at The Gloucester Daily Times.

These comments on Economist Dan Georgianna's review of the Council's economic analysis was posted by the New England Fisheries Management Council as part of the package of documents in preparation for the scallop reconsideration scheduled at the Council meeting in Portsmouth, NH.

Professor Georgianna has commented on the comments.

Read the council comments.

Read Professor Georgianna's response.

NEW BEDFORD — Bristol Community College will offer a four-course program to prepare people for jobs as At-Sea and Dockside Groundfish Catch Monitors.

“Right now, there is a need for more than 100 people locally to enter these jobs,” said Robert Rak, professor of engineering technology at Bristol Community College.

The college will hold a free information session on the program on Friday, Jan. 29, from 6 to 8 p.m. in Room 161 of the Bristol Community College New Bedford Campus, 188 Union St.

The session will discuss the program and the qualifications for it, which include a high school diploma and math proficiency. Monitor candidates cannot have any connection to commercial fishing.

Monitors work in ports and on domestic commercial fishing vessels, tracking the landings and discards of fish. It grows out of the New England Fishery Management Council’s Northeast Multispecies Fishery Management Plan.

 

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This "discussion" was posted by the New England Fisheries Management Council as part of the package of documents in preparation for the scallop reconsideration scheduled at the Council meeting in Portsmouth, NH. The council staff states that it is intended to clarify how different perspectives and methods used in outside analyses produced different results compared to the analyses in the FW21 document.
As the document references a Georgetown Economic Services study submitted to NMFS by the Fisheries Survival Fund, Saving Seafood requested a response from the economist who conducted the study.

Council Staff Discussion:

The discussion argues that the cost benefit analyses in the FW21 document considered both short and long-term economic impacts of the proposed action, including the impacts on costs, consumer benefits and net economic benefits for the nation, other published reports focused mostly on the short-term impacts for 2010 fishing year relative to the previous fishing year (2009). These short-term economic analyses do not accurately reflect the benefits and costs of the proposed action (F=0.20) or F=0.24 alternative for the following reasons:

1) The impacts on revenues were evaluated comparing projected revenues for 2010 to actual revenues from the previous years instead of to the projected revenues for no action. Different methods were applied in estimating the projected reduction in revenue relative to the previous years’ levels.

2) The impacts on fishing costs were not considered and as a result, the impacts on net revenues and profits were overestimated.

3) The impacts of the proposed action and the alternatives on scallop biomass, yield, revenues, consumer surplus, net economic benefits for the nation, regional impacts and impacts on communities beyond 2010 were not considered.

4) The impacts of exceeding the fishing mortality targets and removing an additional 8 million pounds of scallops in 2008 with an estimated F of 0.28 and 10 million pounds of scallops pounds in 2009 with an estimated F=0.30 compared to projections of catch and fishing mortality (F) from Framework 19 were not taken into account.

The discussion argues that short-term analyses completely ignore the impacts of landing 57 million pounds on revenues and on overall economic benefits in 2011 and beyond. They also overlook the impacts on regional revenues, incomes and employment of such scenario in the years following 2010. As a result, focusing on economic impacts only in 2010 or just for a three year period from 2010- 2012 (as was done in the Georgetown study submitted to NMFS by the Fisheries Survival Fund) fails to take into account the economic benefits from a risk averse action (i.e., F=0.20) compared to a F=0.24 option or compared to a option that would allocate 57 million pounds to the fishery in 2010.

Ariel Collis of Georgetown Economic Services replies:

1. The Georgetown Economic Services report does not "ignore the impacts of landing 57 million pounds on revenues and on overall economic benefits in 2011 and beyond." Rather, the Report examines the Council's projections and finds that NEFMC's economic benefit projections are not economically meaningful after 2012.

2. The Council's benefit calculations are not economically meaningful because they do not take into account the uncertainty associated with the assumptions that underlie the projections. This is especially true for the Council's projections for the years 2013-2016.

3. If a comparison of the economic benefits is made over the three year period from 2010 to 2012, then the NCLF24 option is more economically beneficial than the NCLF20 option.

 

Read the report here.

 

 

A UMass Dartmouth School of Marine Science & Technology analysis of Framework 21 conducted by Chancellor Professor of Economics Daniel Georgianna predicts 25% losses in annual revenue per full-time scallop vessel.  It also suggests that the recent history of higher than predicted landings may indicate reasons for increasing catch limits, not decreasing them.

A UMass Dartmouth School of Marine Science & Technology analysis conducted by Chancellor Professor of Economics Daniel Georgianna predicts substantial losses in annual revenue per full-time scallop vessels (about 25%) and substantial losses in total effects to the Northeast Region. 

The study notes that the losses in total effects were probably underestimated because they do not include losses from on-shore processing and retail sales.

In recent years, actual scallop landings have usually been higher than those predicted by the models used in the frameworks.  Higher than predicted landings would mitigate at least some of the losses expected by this short-term economic impact analysis relative to 2009 landings, but raise questions about the  biological model used in FW 21.

In 2008, more than ½ of landings per full-time vessels came from the closed areas. About the same results are expected in 2009. As closed area trips have fixed trip limits, the overages of landing were due to much higher than predicted landings per day in the open areas. This was caused by either larger biomass in the closed area than the model predicted or higher rates of processing on board.

Rather than evidence for reducing the catch limits, as stated by FW 21, the excess of actual over predicted landings may indicate reasons for increasing catch limits.

The study noted that the results from this short-term impact analysis are not directly comparable to the analysis of long-term effects done for FW 21, which showed modest improvements in revenues and producer and consumer surpluses from 2010 through 2023 compared with the higher management target fishing mortality of 0.24.

While OMB guidelines prescribe long-run economic analysis for fishery management plans, both short-run and long-run economic impact projections are useful for achieving the “optimum yield from each fishery for the United States fishing industry” (MSA, National Standards, p.58).

Short-term analysis is useful because FW 21 was intended to set catch limits for 2010 only, not future years. The history of scallop management indicates that frameworks change substantially every two years. The length of time over which to estimate benefits strongly affects the results.

Using the analysis from FW 21, Georgetown Economics shows that over a three-year period (2010 – 2012) the present value of benefits from the higher fishing mortality (F=0.24) surpasses the benefits from the fishing mortality chosen by the Council (F=0.20).

 

Read the complete study

 

Don Carter works on land, but makes his living off the sea.

Carter, 50, of the Erma section of Lower Township, is one of many people in southern New Jersey who found a niche catering to the fishing industry, starting as a welder and then expanding to all sorts of boat repairs. His Erma-based company, Northeast Industrial & Marine Equipment Supplies, also sells a variety of marine equipment, including winches, pumps, motors, propellers, hydraulic systems and other gear. It is one of several marine supply stores in the Port of Cape May, all supplying year-round jobs.

Carter also is an example of why nobody has a real figure on what the fishing industry is worth to New Jersey’s economy.

The sales value of the seafood has been pegged at about $1 billion per year as it moves from fishermen to retailers, wholesalers and consumers.

Read the complete story at The Press of Atlantic City.

People don’t come to the New Jersey shore just to eat fish. Many come to catch one — and that adds millions of dollars to the local economy.

New Jersey’s saltwater recreational fishing industry was worth $643.6 million in 2006, according to U.S. Fish and Wildlife Service data.

Jim Hutchinson, of the Galloway Township-based Recreational Fishing Alliance, says that earned the state a No. 5 ranking in the nation’s $45 billion-per-year saltwater sport-fishing business.

Anglers paid $140 million in federal and $100 million in state taxes in 2006.

In New Jersey, they landed 48 million pounds of fish in 2008, with 29.5 million pounds released and 18.5 million pounds taken home for dinner. Commercial fishermen harvested 162.4 million pounds during this period.

Read the complete story at The Press of Atlantic City.

Fishermen say that because of years of onerous regulations and the rising, six-figure cost of permits, fewer and fewer young people are becoming boat captains. That's left lots of old salts like Sava doing the grueling job out of both love and necessity.

And they worry about their own safety and the future of an industry that has been vital to New England's economy and its very character since colonial days.

"The door is slamming shut," Sava says.

The National Marine Fisheries Service does not keep statistics on fishermen's ages, but state figures back up the sea captains' observations. Since 2000, the median age of Massachusetts holders of commercial fishing permits — that is, boat owners and owner-captains — has climbed from 46 to nearly 51, according to the state Division of Marine Fisheries.

Read the complete story at ABC.

The federal government's next-generation fishery regulatory regimen for New England openly acknowledges that social and economic hardship starting with job losses will be among the first effects.

Only later does the document anticipate economic recovery and a brighter future — as in the classic stages of the medical cleansing with distasteful purgatives.

That's raising questions and concern among fishing industry leaders, and from lawmakers like Massachusetts Congressman Barney Frank, who wonder how the U.S. government can openly push a policy with negative economic impacts for fishing communities like Gloucester.

The New England Fishery Management Council has approved the so-called Amendment 16 catch-share regulatory system to take effect next May 1.

Read the complete story at The Gloucester Daily Times.