Re: Seafood News November 10, 2009 news analysis "Pew causes consternation in crab industry with uninformed national criticism of rationalization program" John Sackton’s November 10, 2009 news analysis of the Pew Environment Group’s white paper entitled Design Matters Making Catch Shares Work raises a number of issues to which we would like to respond.
First, it is important to note that the paper was not designed to provide a detailed analysis of catch shares programs in general. Rather, it is to point out that these programs are not a formulaic panacea for what ails U.S. fisheries. If designed properly, they have the potential to help address many of these problems. However, if sufficient care is not taken to minimize the negative economic impacts of these programs, then the unintended consequences of catch shares may be detrimental to many fishermen and their communities.
Our general impression of the debate on catch shares at the national level is that the discussion often focuses on the economic benefits that have accrued to the fishermen and fishing communities that are able to participate. In our opinion, however, inadequate consideration has been given to the economic downsides of these programs for those who have been left out. The fact that some fishermen are doing better financially after a number of years in a catch shares program does not lessen the pain that others face from losing their jobs in the initial years of these programs, or the lost opportunities that high quota costs can create in fishing communities over the long-term. As we noted in our paper, proper design and implementation is critical to minimize and mitigate negative short and long-term economic impacts.
Second, Mr. Sackton and others he cites take issue with our Bering Sea and Aleutian Islands crab rationalization case study because it does not point out the positive outcomes from the program. We take exception to Mr. Sackton’s characterization that the paper is based on ‘hearsay’ or that we concluded that the catch shares program approach ‘created more problems than it solved.’ The environmental and economic consequences that we discuss in the paper are real and derived from a number of government, academic, and reputable media reports. We’ve also concluded explicitly in the report that ‘if properly designed, catch share programs can lead to substantial gains in fisheries by reducing capacity, increasing economic efficiency and ensuring sustainable catches.’
Nonetheless, we have reviewed our paper carefully, comparing the Alaskan crab fishery case study with the other three case studies that are included, and agree that more attention should be given to this program’s positive outcomes, as was done with the other case studies and throughout the report. Since the paper has only been released in electronic form, we will make revisions to reflect these outcomes.
Third, Mr. Sackton wrote in his news analysis that ‘Pew claims that the reductions resulted in 1200 job losses, and a 75% drop in income for local businesses in Kodiak.’ Mr. Sackton then goes on to discuss why he believes that crew income did not decline to the level we reported, the affects of losing part-time jobs were offset by increased income for those left in the fishery, and that business income in Kodiak did not decline. Here Mr. Sackton’s reaction to the paper is at least partially a result of an unintended editing error described below.
The 1,200 job loss figure comes from Knapp and Lowe (2007) on page 12, paragraph 3, where the authors estimate that 757 jobs were lost in the Bristol Bay Red King Crab Fishery and 457 jobs in the Bering Sea Snow Crab Fishery. The 75 percent reduction in income for local businesses comes from a statement by Mayor Henry Mack of the town of King Cove, AK in a 2006 article in the Alaska Journal of Commerce. The statement that earnings in Kodiak declined between $1 million and $1.6 million refers to fishermen’s earnings and was derived from Knapp (2006) page 42.
Unfortunately, during editing a sentence that states that local business income declined 75 percent in King Cove, Alaska was combined with a sentence stating that there was a loss of fishermen earnings in Kodiak, and the King Cove reference along with its citation were deleted. The resulting editing error gave the impression that business income declined in Kodiak by 75 percent. This is not the case, and the sentence will be revised to read:
‘Other estimates of the economic impact were seen in small Alaskan fishing communities, such as in King Cove where there was a 75 percent reduction in income for local businesses, and in Kodiak, Alaska, where fishermen’s earnings declined between $1 million and $1.6 million following rationalization.’
Mr. Sackton also takes issue with the $1 million to $1.6 million range of lost fishermen’s earnings that we reported from Knapp (2006), by contrasting it with a lower figure ($961,300) that Mr. Sackton attributes to an internal study conducted by a North Pacific Fishery Management Council staff economist. Although the differential is only $39,000 between the two studies, we will obtain the council study and note the different sets of figures with citations, if appropriate.
Fourth, Mr. Sackton discusses assertions by Steve Minor that the crab rationalization program was designed ‘to specifically protect ‘crab dependent communities’.’ Which communities are defined as ‘crab dependent’ largely determines whether or not they receive protection under the program. We recognize that some crab dependent communities like St. Paul have benefited under this program. But others such as King Cove have not fared nearly as well according to the Knapp and Lowe (2007) research.
Additionally, the landing restrictions that Mr. Sackton discusses force fishermen to deliver their crab to a specific processor. While this may benefit the communities where the processor is located, it can create problems for crab fishermen from other communities. For example, crab fishermen in the Bering Sea who must deliver their catch to St. Paul Island have lost money when harbor ice blocked access to the port and crews were forced to wait to unload and sell their catch because they could not go to other processors in other ports.
Fifth, while Mr. Sackton agrees that high grading did occur in the crab fishery, he points to subsequent program changes that have minimized this problem. We welcome these modifications and look forward to investigating them further in the hope that we can include this as an example of a successful program modification in the revised paper.
Finally, Mr. Sackton reports on statements made by Jim Stone regarding quota leasing and absentee ownership. Mr. Stone argues that allowing the market to set the value of leased quota shares is the best way to set the price. While that may be an appropriate practice among businesses with access to capital, it does not necessarily apply to those people who lack such access, including new and generally younger entrants into the fishery, or rural residents who lack sufficient resources to lease quota. The point here is that just because a catch share program is financially beneficial to some fishermen doesn’t mean it is beneficial to all. We should strive to make these programs as fair as possible for as many fishermen as possible.
In closing, we appreciate Mr. Sackton’s comments on the Bering Sea and Aleutian Islands Crab Rationalization case study in our paper. As discussed above, we will revise this section of the paper in an effort to both clarify the information presented and provide a more nuanced discussion of both the positive and negative aspects of this particular program.
Lee Crockett
Director
Federal Fisheries Policy
Pew Environment Group