What are Catch Shares?
Under traditional fishery management approaches, such as limits on the number of days at sea, anyone who wants to participate in the fishery can fish until the annual catch limit is reached. This can lead to a competitive environment, with fishermen racing each other to catch as many fish as they can before the annual catch limit is reached and the fishery is closed for the season. This approach has often resulted in more boats and gear in the water than is either biologically or economically necessary to catch the available harvest. This type of management system often results in shorter fishing seasons, unsafe fishing practices, and high levels of bycatch. Another serious drawback to this system is that too many fish may be brought to market at once, depressing the price of fish for fishermen.
Catch shares are a proven fishery management tool that allows flexibility and accountability in fisheries worldwide. In appropriate circumstances, catch share programs can play an essential role in meeting our national goal of rebuilding and sustaining our fishery resources. In catch share programs, a portion of the catch for a species is allocated to individual fishermen or groups. Each holder of a catch share must stop fishing when his/her specific share of the quota is reached. Catch share programs allow fishermen to plan their fishing effort around the weather, markets, or other business considerations. This also allows other fishery dependent businesses to plan more effectively. Because fishermen are allotted a share of the quota, they gain an economic incentive to catch their allocation at the least cost. In addition, reduced pressure to “race for the fish” gives fishermen the freedom to experiment with new methods to reduce bycatch such as gear changes.
All fishery management programs, including catch shares, should identify specific measureable goals for management. In fisheries that have been subject to open access, it is likely that some degree of overcapacity exists, which contributes to poor economic performance. Therefore, capacity reduction is common to the goals of catch share programs. For non catch-share fisheries that have overcapacity, fishermen that leave the fishery do so without compensation. Under catch shares, as the overcapacity of the fleet diminishes over time (i.e., consolidation of the fleet to economically efficient levels), those that decide to exit the fishery receive compensation via the sale price of their shares.
While catch shares have been a successful tool in many instances, it is important to note that catch shares are not appropriate for every fishery, and the potential negative impacts should be kept in mind when considering, designing, implementing, and evaluating catch shares. Catch shares can result in some consolidation of the harvesting sector because some fishermen holding shares choose to sell their privileges to someone else. While they are compensated for leaving the fishery, others, like fishing crews, are impacted by their decisions. For example, in the Bering Sea crab fishery, many part-time crew jobs were converted into full-time jobs. There have also been other concerns expressed about how catch share programs might affect current jobs in the fishery, new entrants to the fishery or fishing communities.
With the development of any new catch share program, there is a great deal of design flexibility to allow fisheries to support the type of fleet the regional fishery management council (council) has identified through its goals and objectives. Options can include diverse fleets of small and large vessels, owner-operated fleets, set aside shares for specific sectors, and opportunities for new entrants to the fishery.
NOAA recommends that councils pay particular attention to the following critical design issues.
- Set Specific Goals: Identifying specific management goals for each catch share program is critical. Examples include eliminating overcapacity; ending a race for fish; reducing bycatch; or creating social and economic stability for fishermen and communities. The more specific the goals, the better a catch share program can be designed to attain them.
- Articulate Duration: Councils should explicitly define the duration of their catch share program to reinforce the fact they are temporary privileges, not property granted in perpetuity.
- Define Transferability: Councils need to work directly with stakeholders to choose whether, when, and to whom to allow transfers of catch shares. This is a balance between promoting maximum flexibility for fishermen’s business decision making and controlling the rate and scale of change in a fishery to address harvesting, processing, and community sustainability goals.
- Determine Eligibility and Initial Allocation: Councils should consider a broad range of participation criteria to ensure the most fair and equitable quota share distribution for a given circumstance. Councils should include consideration of stewardship, economic, and social criteria. If fishermen feel their quota share was calculated using inaccurate data, the council should outline procedures for submitting new information. Allocations should be revisited on a regular basis.
- Articulate Accumulation Limits: Councils should implement an accumulation limit or cap on the amount of quota share a business entity can own. This is one method for limiting the amount of consolidation that can occur in a fishery.
- Consider New Entrants: Councils need to evaluate catch share designs that enable small businesses to participate and allow new generations of fishermen in the fishery. In addition to set-asides, initial allocation, and transfer criteria, loan programs and permit banks can help ensure continued fishery access in traditional ports.
- Help Communities: Thoughtful catch share design can help promote sustainable fishing communities. The programs can be designed to facilitate job stability in communities and preserve wharfs, processing facilities, fuel and ice suppliers, and other coastal businesses essential to a working waterfront.
- Acknowledge Distinctions Among Sectors: Councils allocate the annual catch limit among sectors in all fisheries, regardless of whether a catch share is used to further distribute the allocation among eligible participants in a sector. Councils should evaluate the effects of catch shares on all sectors associated with a fishery.
- Accountability: Any well designed fishery management system should be informed by data that managers and stakeholders have confidence in using for making decisions. Catch share programs often require expanded data collection, monitoring, and observer programs that can be funded by the government or industry.
- Cost Recovery: Under the MSA, as reauthorized in 2007, new Limited Access Privilege Programs (LAPPs) require a cost recovery fee to help NOAA Fisheries cover the incremental cost of the program. This fee cannot exceed 3 percent of the ex-vessel value in the fishery covered by the program.
- Consider Royalties: Since catch shares grant fishermen privileges to a public resource, councils should consider using auctions to distribute quota share as described in MSA section 303A, (d).
- Review Progress: Councils should periodically review all catch share and other fisheries programs to gauge whether they are meeting their goals and objectives. A program should not be expected to be perfect at the outset, and councils should plan to make adjustments over time.