Frequently Asked Questions about Catch Shares



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Captain Tom Marvel

In the past several months, a lot of attention has been placed on the topic of  using individual fishing quotas (IFQs), or catch shares to rebuild or nation's fisheries. Like many other management decisions, catch shares have not gone without their "share" of controversy. You don't have to look too far in the newspapers,  trade journals, or online forums to see that many fishermen are not fans of this management approach. As with other controversial issues, there may not always clear-cut solutions, but, its important to refer to reliable, science-based information before making any decisions. I want to share with you an excellent resource from Louisiana Sea Grant that helps answer some frequently asked questions about catch shares. The following information can be found on their website at: http://www.lsu.edu/seagrantfish/faqs/catchshares.htm

What is catch share management?

Catch share management is an umbrella term which encompasses several programs including limited access privilege programs (LAPPs), individual fishing quotas (IFQs), and territorial use rights fisheries (TURFs). This type of management permits each catch share holder to harvest a percentage of the total allowable catch for a fishery.

Can catch share management function without limited entry?

Since a catch share is required for harvesting, catch share management does limit entry. However, most catch share programs allow transferability of catch shares through sales and/or leases, providing the opportunity for both entry into and exit from an industry.

What is driving the push for catch share management?

The Magnuson-Stevens Fishery Conservation and Management Reauthorization Act of 2006 (MSRA) mandates that annual catch limits be set to end overfishing for the following: all stocks subject to overfishing, by 2010; all other stocks, by 2011. In the National Marine Fisheries Service’s 2008 Status of U.S. Fisheries, 41 species are noted as being subject to overfishing. In the Gulf of Mexico, this included red snapper, greater amberjack, gag, gray triggerfish, and pink shrimp. Building upon fishery management plans that were implemented under previous administrations, the current administration is encouraging the use of catch share management in an effort to reach the mandates of the MSRA.

Is catch share management new? If not, where has catch share management already been used?

Some confusion exists over whether or not this is a new type of management. However, various forms of catch share management have been in place in the U.S. since 1990. As of 2009, 13 programs under the classification of catch share management are in place in U.S. commercial fisheries, and an additional four programs are to be implemented in 2010. Related programs have been used since the 1980s in other countries, including New Zealand, Australia, Iceland, and Canada.

Why are alternative management plans being sought?

In addition to addressing overfishing per the MSRA, Fishery Management Councils may have additional objectives that will improve a fishery. For instance, a Council might be faced with eliminating the “race to fish” or derby style fishing that can occur when only a total allowable catch (TAC) exists for a certain stock. In that situation, many fishermen harvest with the thought process of “Whatever I don’t catch, someone else will” until the TAC is reached. Such a harvesting strategy can result in increased bycatch, flooding the market with the product at a very specific time of the year, and willingness to harvest in dangerous conditions. By providing fishermen with a guaranteed portion of the TAC through use of catch shares, many of these consequences may be avoided, as observed in fisheries that have already adopted catch share management. As well, economic research has shown that fisheries with catch share management tend to be more profitable than when they were managed under other programs.

What is the difference between a total allowable catch (TAC) and a catch share? Or, what sets a TAC, and what sets a catch share?

Another source of confusion arises when differentiating between a TAC and a catch share. A TAC relies on biological stock data to determine the allowable catch or harvest, usually on an annual level. A catch share simply represents the proportion of a TAC that each catch share holder is permitted to harvest. For example, if a TAC for a species is set at 100 tons and an individual has a 2 percent catch share, that individual would be allowed to harvest two tons of that species.

Is catch share management designed to reduce a TAC?

No, catch share management pertains to the allocation of an existing TAC, which is based on existing stock assessment data. Generally speaking, catch share management should eventually lead to an increase in a TAC. As a fish stock improves, the TAC would increase, resulting in each catch share representing a greater portion of the total. This represents one of the novel aspects of catch share management, with regards to providing an incentive for a fish industry to not exceed its TAC. As a result, fishers directly benefit by adhering to fishery management and being good stewards of the resource. Referring to the example in the previous question, if the TAC increased from 100 tons to 200 tons, the individual with a 2 percent catch share would then be allowed to harvest four tons of that species. However, if a fish stock worsens, the TAC would decrease to reflect this, and so the amount available to harvest with a catch share would also decrease.

Some of the benefits of catch share management, as with other types of management, are directly associated with a cost or drawback. Therefore, we address both benefits and drawbacks together. One benefit of these programs is the rebuilding of fish stocks. This includes not only the targeted species but also bycatch species, as fishing tends to be more selective and efficient. However, a greater incentive for highgrading occurs when harvesters are no longer in the “race to fish.” Also, initial allocation has been based on historical catches in many instances. Anticipation of catch share management can prompt fishermen to increase harvest levels, so they would receive a higher proportion of the initial allocation. These increased harvest levels only exacerbate existing stock conditions. As mentioned, fishing tends to be more selective and efficient under catch share programs, and this potentially can result in increased revenues per boat and increased boat yields. Some of the increase in boat yields may be attributed to a decrease in the number of vessels operating in an industry. Nonetheless, excess fleet capacity is reduced, contributing to a more efficient industry. With catch share programs, seasonal restrictions are often reduced or removed, and this contributes to more stable and full-time employment (FTE). However, while FTE may increase as fishermen are able to harvest with longer seasons, industries often observe job losses in the part-time sector. In addition, with a longer harvesting season, the cost of enforcement may increase in response. Finally, the reduction or removal in seasonal restrictions combined with the assurance of the ability to fish with catch shares allows fishermen flexibility in when to harvest, so the need to fish in unsafe conditions is minimized. A final drawback to catch share management arises from confusion over catch shares as a property right. The draft NOAA Catch Share Policy sheds light on why catch shares are not truly a property right. “The granting of catch share privileges to an entity is not made in perpetuity. The MSA defines a LAP as a permit, issued for a period of not more than 10 years, which will be renewed if not revoked, limited, or modified.” (www.nmfs.noaa.gov/sfa/domes_fish/catchshare/docs/draft_noaa_cs_policy.pdf)

How are catch shares allocated?

Catch shares are often initially allocated based on historic catch levels, referred to as a “granting” of a share. An annual participation fee, such as a license fee, is typically still required. Another allocation method is auctioning the shares. Some programs have combined the two approaches.

Why do some programs allow trading of catch shares?

Trading of catch shares, either through sales or leases, allows for entry/exit in the industry and the potential for a more efficient outcome than the initial allocation provided. Trading in these programs is optional, so the decision to remain in an industry rests with the catch share holder. As catch share management evolved, concerns over consolidation of shares arose, and newer programs are usually designed with restrictions on the total percentage of shares that one entity can hold.

Will catch share management be required for the recreational industry?

Currently, catch share programs in the U.S. have only been implemented in the commercial industry. NOAA recognizes that catch share management is not a one-size-fits-all tool, but the eight Fishery Management Councils are encouraged to consider catch share management as an option. Catch share management is not being federally required for either the commercial or recreational sector.

Where can additional information on catch share management be found?

On NOAA’s Web site, information on current and proposed catch share programs is available. Also on the site, NOAA has posted a draft policy on catch share programs in December 2009, and individuals are able to comment on the policy through early April 2010. Follow this link: www.nmfs.noaa.gov/sfa/domes_fish/catchshare/index.htm These FAQs also appear in the Louisiana Sea Grant Forum -                                                http://sg-server.lsu.edu/forums/showthread.php?tid=8&pid=21#pid21. Registered forum members can leave questions and comments concerning topics.