November 27, 2012 — The Pacific Fishery Management Council concluded that the Individual Fishing Quota (IFQ) Program must be created even if flawed because catch share programs are now the only politically correct approach to even well-managed fisheries. To that conclusion we say poppycock.
The following was submitted to Saving Seafood by Burt Parker and Chris Peterson of Pacific Dawn LLC, Dennis Rydman of Ocean Gold Seafoods, Joe Hamm who operates the CHELLISA, and Pierre Marchand of Jesse’s Ilwaco Fish Company. The writers are from Washington state.
As long-time fishing and processing participants in the Pacific whiting fishery on the West Coast, we won a federal lawsuit challenging the initial allocation of Individual Fishing Quotas (IFQ) in the Pacific Groundfish IFQ Program approved by the National Oceanic and Atmospheric Administration (NOAA) in 2010. Fearing a dismantling of the entire IFQ Program, even though Pacific whiting is only one of the 90 or so groundfish species covered by the Program, the supporters of catch share reorganization of our nation’s fisheries, in particular zealous environmental groups with close ties to the leadership of NOAA, have responded to our lawsuit with open hostility and spin doctoring about the merits of our complaints. The Federal Court ordered NOAA to reconsider the IFQ allocation only in the Pacific whiting fishery shoreside and mothership sectors and that process is still underway.
In our lawsuit, we pointed out several inconvenient truths about the way in which the Pacific whiting fishing and processing IFQs were initially distributed. The first inconvenient truth is that the allocation was purely political and was made primarily to gain support of those who wanted to retire from the fishery holding IFQ to lease or sell to active participants. Thus, the IFQ allocation approved by NOAA, illegally according to the Federal Judge, did not go to the most dependent fishing and processing operations based on their recent history and actual participation in the fishery. Instead, the allocation was based on history years that ended almost a decade ago (2003 for harvesters; 2004 for processors). Moreover, between 21 and 39 permit holders were given IFQ who have not made any landings at all in the fishery for over seven years or more (as of 2010). We are aware of no other IFQ programs in which such ancient history is used and no present participation requirement applies. In addition, the Pacific whiting fishery, after 2004, changed dramatically from a surimi fishery to one primarily for block and head/gut products operating more off Washington State than Oregon. As a result, those of us still heavily active in catching, processing and marketing Pacific whiting around the world had to lease IFQ from these non-participants (who also have far less recent history) in order to harvest and process anything near our recent historical levels in 2011 and into the future.
The second inconvenient truth is that the Pacific whiting fishery, after being listed as overfished in 2002-2004, had by 2010 become the model of good management, earning the right to use the Marine Stewardship Council sustainability logo. The coast-wise Pacific whiting harvest quotas have never been exceeded since 2001. And it does not appear that this fishery, separately managed from other Pacific Groundfish, has been overcapitalized for some time. But Pacific whiting was lumped into the overall Pacific Groundfish IFQ Program, with little attention to its quite different biological condition or business structure in 2010.
The third inconvenient truth is that studies of earlier IFQ Programs, in particular the British Columbia halibut fishery, have concluded that IFQ Programs that do not consider the cost of leasing going forward have shown very little improvement in efficiency. E. Pinkerton and D. Edwards, writing in the journal MARINE POLICY (Vol. 33 at 707-713; 2009), concluded that the hoped for economic efficiencies do not result when active participants have to pay large leasing costs to quota owners. This very problem was noted in the Environmental Defense Fund’s Catch Share Design Manual, but that organization remains ideologically committed to creating catch share programs, even if they are flawed. The authors of the MARINE POLICY article concluded that assumptions about the economic efficiency of catch share programs, “as well as other assumptions underpinning the indiscriminate promotion of [IFQs], do not apply in the British Columbia halibut fishery.” They called these hidden costs of leasing IFQs ”the elephant in the room.” This elephant is now rearing its ugly head in the Pacific whiting fishery because of the poorly conceived initial allocation of IFQ approved by NOAA in 2010.
The Pacific Fishery Management Council just recently took a head-in-the-sand approach to the court-ordered reconsideration of the initial IFQ allocation by voting not to change the allocation methodology, hoping that padding and distorting the record will cover up the flaws we have pointed out. One Council member went so far as to admit that sticking with the original deal was essential because without it there would not have been any IFQ Program for Pacific Groundfish. Or, put another way, the Council concluded that IFQ Program must be created even if flawed because catch share programs are now the only politically correct approach to even well-managed fisheries. To that conclusion we say poppycock. Let’s get it right at the outset or we will all be having the same regrets as those in the British Columbia halibut fishery about the inefficiencies of their IFQ program.
The issue of reconsideration of the Pacific Whiting IFQ initial allocation is now up to NOAA, which must report to the Federal Court in April. We are deeply concerned that the agency will simply go with the flow and not have the courage to alter the allocation to make it reflect the current conditions in the fishery, to reward those with the greatest history (and the greatest dependency) with higher amounts of IFQ, and to create a requirement of present participation (one landing between 2003 and 2010) as a condition for receiving any IFQ. We believe the Magnuson-Stevens Act requires these alterations to the original IFQ allocation formula. The IFQ allocation should also respect the needs of the small fishing communities and businesses we represent.
We are joined in this letter by Joe Hamm who operates the CHELLISA and Pierre Marchand of Jesse’s Ilwaco Fish Company of Ilwaco, Washington.
Burt Parker and Chris Peterson, Pacific Dawn LLC of Seattle, Washington
Dennis Rydman, Ocean Gold Seafoods, Inc. of Westport, Washington