If you have some time, this is a great article about the fishing industry. Kudos to Aaron Pressman from BusinessWeekOnline.
Some 4,000 miles to the southeast, Maine fisherman Craig Pendleton, 46, is spending much of the summer sitting in a dark office over Norm's TV in Saco, a former mill town south of Portland, pondering the fishing industry's future. Since early May, his boat, the 54-foot Susan & Caitlyn, has been sitting at a dock collecting barnacles because of federal rules that limit Pendleton to only 48 days at sea. He likely won't go out again until October to trawl for cod and haddock in the Gulf of Maine.
This is a good look at problems and some possible solutions.
Here's an overview.
Only holders of permits known as "individual transferable quotas" are allowed to catch halibut in the Gulf of Alaska.....ITQs [give holders] the right to catch [predetermined amounts of] halibut. [Fishermen] can use those rights eight months of the year, sell them to others, bequeath them to heirs, or even elect to leave [the] halibut swimming in the sea. In effect, [fishermen] "own" those fish.
Now at first blush, that might seem preposterous. But then again, giving a fishermen a bigger stake should mean that he will be more invested in the long-term health of "his" fish.
...this controversial free-market system for parceling out individual property rights to fish in the sea may be the future for the troubled U.S. commercial fishing industry. Beset by overfishing and falling catches and battered by imports from Asia, Europe, and Latin America, the old way of American fishing no longer seems sustainable. The result: growing support for congressional action to enforce widespread use of individual transferable quotas, a radical move that could help restore U.S. fisheries to health and make them more competitive in a global marketplace.
Global competition is a big deal to the US fishing industry.
Better air transportation has allowed fish retailers to purchase fresh fish from almost anywhere on the planet. Darden Restaurants Inc., owner of the Red Lobster chain, buys fish in 30 countries. Boston-based Legal Sea Foods Inc. has served Dover sole from the North Sea, cod from Iceland, and haddock from Norway.
Aquaculture has massively increased the supply of the most popular foods from the deep, such as salmon and shrimp. Over 80% of the seafood eaten in the U.S. was imported in 2004 (the most recent numbers available), much of it from shrimp farms in Thailand, Vietnam, and China and salmon farms in Norway and Chile. In 2005, America's $8 billion fish-trade deficit was the largest among natural-resource products after oil and natural gas.
Here are some of the reasons ITQ's look promising.
Under the system of individual transferable quotas, Alaska's Miller (Dan Miller - captain of the Anna D) is allotted a 45,000-pound share of the overall halibut limit: 53 million pounds. So he can take his boat out virtually any time he wants, avoiding the mania and waste that fishing on designated days encourages. And the ITQs can be bought and sold as easily as old comic books on eBay. That encourages consolidation, improving catches for those who remain. The long-term rights also give fishermen an incentive to not to overfish.
The current system is rather counter-intuitive.
...the irony for freedom-loving fishermen is that the regulatory system most have so far chosen to stick with tries to limit their every move, dictating where and when they can fish and the size of boats, nets, and gear. The rules of commercial fishing, which vary by locale and species, are set by eight regional councils made up of industry, state, and federal regulators, scientists, and environmentalists. The rules are cumbersome and convoluted, and many fishermen exploit loopholes. "Communism isn't dead," says University of Rhode Island professor Jon Sutinen. "Central planning is still thriving in our fisheries management."
That isn't good news. Currently many fishing seasons are limited to a few days a year, and during that time it's a free-for-all. Never mind that a years worth of fishing is dumped into the laps of the processing plants at the same time. It's very inefficient and wasteful. Never mind the fact that reduces an economy to about 2 weeks a year. Who can support a family like that?
Individual fishermen have an incentive to fish as quickly as possible because under the rules in place in most coastal areas, an entire fishery is closed when the total catch quota is reached. "Everyone is trying to maximize their catch," says Harvard professor Robert Stavins, a pioneer in the design of economic solutions to similar problems in air- pollution control. "There's no private-property right."
So ITQ's are designed to give those private property rights. Still, there are concerns.
"You're giving away a public resource," says unconverted Kodiak fisherman Shawn Dochtermann. "If our forefathers were still around, people would be hanged at the gallows for this."
New England fishermen like (Maine fisherman Craig)Pendleton remain opposed, too, fearing the rapid consolidation that could occur if big companies like Tyson can buy up quotas. Corporate operators would downsize the fleets, obliterate the towns that rely on them, and turn owner-operator fishermen into employees with little say, he says.
That may not be just idle speculation. In March, Pendleton went to New Zealand and came back unimpressed. A handful of companies own more than 70% of the fishing rights. "It's a purely economic model with no social considerations," he says. "I don't see how it can work for New England fishing communities."
But there may be answers to these concerns.
But there are ways to address Pendleton's concerns. In Alaska, communities can buy ITQs and lease them to local fishermen, thus maintaining their culture.
It's an issue that's not going to go away. Serious consequences are already being seen.
And more and more, doubters like Russell Underwood, who chases red snapper out of Panama City, Fla., are starting to come around. Underwood felt he had no choice but to head out in choppy and debris-filled seas last October, just days after Hurricane Rita hit. With the red snapper fishery in the Gulf of Mexico open only 10 days a month in 2005, Underwood says "Whether it's a hurricane or your wife's anniversary," you had to go. His boat broke down, and he was rescued by workers from an oil rig.
So - much to my chagrin - it looks like this issue will dropped in the lap of politicians to solve.
Talk about counter-intuitive.
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