There’s something wrong with this picture

Atlantic cod stocks have failed to recover after decades of Council management (Photo Credit: Hans-Petter Fjeld)

What’s wrong with this picture? Earlier this month, at the same time the Patrick/Murray Administration was demanding $21 million federal dollars in economic fisheries damages, many of the best fishing businesses that have been catching cod, haddock, and other groundfish in Massachusetts and New England wrote a joint letter to their elected officials telling them that their political actions are putting their businesses at risk. And the politicians and the fishermen are both talking about the same management program.

Here’s what’s  wrong: too many of the Massachusetts elected officials are looking backward at fisheries to score political points and the people actually in the fishing business desperately want to look forward so they can get on with their lives.

For the last year, Governor Patrick charged his fishing agency with developing evidence to prove that Massachusetts fishermen are in fact in economic crisis because of the new catch share program that was implemented to restore health to groundfishing in New England. But now that the results of all that effort have surfaced, what’s evident is that there’s practically nothing there. His disaster claims could not be supported even by deliberate manipulation of the data his team developed.

Contrary to the local headlines and talking points from Massachusetts politicians rushing to align themselves with “the working man,” there is no evidence of a disaster in the Massachusetts groundfishing industry. In fact, the Massachusetts groundfish fleet netted $3 million more under the new program than the previous year, even though fuel costs soared some 30%.

The group of fishermen that the state analyzed most closely appear to have lost $405,000 year-to-year, which is not good news, but they left more than 1 million pounds of the fish they were allocated in the water, which doesn’t make any sense. If they leased those fishing rights, their losses would have been closer to $135,000. Loss of crew revenues in that group were real and troubling, on the order of $240,000.

There seems to be a phantom group of fishermen that Massachusetts politicians are trying to protect with this $21 million reparations claim. That request might not have been as significant when federal dollars were flowing more freely and the Massachusetts economy was strong. But the problem now is they are failing to understand and represent the very serious interests of the real fishermen who are out on the water. Therefore, they risk squandering whatever scarce federal fishery dollars still exist for their own political reasons.

This is not to say that the New England (not just Massachusetts) groundfishery is not still teetering on the cliffs of disaster. New science estimates for Gulf of Maine cod may suggest the potential for economic losses in the future that might be very high. Moreover, the federally-subsidized costs of monitoring groundfish catch in the future—which are critical to good fishery science—cannot yet be absorbed by the region’s small fishing operations.

Commerce Secretary Bryson will be coming to New England in December to learn about our fisheries. It would be a tragic loss to use his visit to propagate the fisherman-as-victim narrative. Massachusetts in particular has some of the nation’s superstars of catching, processing, distributing, marketing, and cooking fish like Atlantic cod . What Massachusetts politicians need to make Secretary Bryson see during his visit is that Massachusetts fisheries are looking up, not down; that they are a healthy and receptive place for public and private investments. They should show the Secretary that Massachusetts has some concrete ideas of how this iconic industry can be the launch pad for expanded economic activity by adding value, profit, and jobs to every pound of fish that is landed in this state. They need to show him that this state is faced forward, rather than backward.

That is the sort of political thinking and leadership that could raise all the boats.


10 Responses to There’s something wrong with this picture

  • daniel bubb says:

    peter, if you are speaking for 100 fishermen then fine, what about the little guy like me that went from 300,000 lbs of fish to 30,000 lbs. and cant even feed my family,,,,what the hell are you thinking,,,reel people and reel families got crushed from this . maybe not all but i sure as hell did.

  • marc agger says:

    Dear TalkingFIsh Editor :
    I strongly disagree with a statement by Mr. Shelly, which is pivotal to his argument that there is no fisheries disaster in Massachusetts. Governor Patrick and Senator Murray are simply being responsible and intelligent public officials in asking for federal emergency relief. Here is his statement which contains some miscomprehension of the situation: “Contrary to the local headlines and talking points from Massachusetts politicians rushing to align themselves with “the working man,” there is no evidence of a disaster in the Massachusetts groundfishing industry. In fact, the Massachusetts groundfish fleet netted $3 million more under the new program than the previous year, even though fuel costs soared some 30%.”
    Firstly if one looks at the world food prices in the last 3 years, there has been a 30% increase in all food categories, meat included. Here below is link to the UN FAO Food Price Index.
    This general surge in global food prices alone accounts for any increasing value of the NE Groundfish. NOAA and the environmental community have generally ascribed increasing revenues in the first year of catch shares (or sectors) as a positive result of the many benefits of catch shares. The UN FAO Price Index actually shows revenues decreased on an inflation-adjusted basis. Next, even though revenues may have increased $3 million under catch shares, these are NOT “net” revenues as Mr. Shelly states above. These are gross revenues. He omits the very clear fact that fishermen have to purchase quota to go fishing. So, even though a boat which is a net buyer of quota may generate revenues that are 40% higher, this same boat may have paid out a very large sum to purchase this quota, so that on a net basis the boat has the same or even less “net” revenue at the end of the day. Also, if fuel is higher and insurance continues its historic progressive rise and if docking fees continue to increase, these input factors also will subtract from “net” revenue. Therefore, even though “gross” revenue may increase, that may still mean that net revenue declines. Also, when one boat purchases quota, even though that boat may become more efficient and keep its workers employed for more weeks in a year, this same quota will now NOT be fished on the original boat and those crew-members will lose their jobs and the local fuel and ice and docking suppliers for the quota-selling boat will lose revenue. It therefore needs to be clearly stated that quota transfers often end up being a net “zero-sum game” or a “negative-sum game” from the point of view of the economic potential of the fish industry in total.
    Finally, and this may be anathema to those who like the world to be clean and orderly and logical and ethical, but winners of “give away” natural resource lotteries always like the lottery and its outcome. The winners in catch shares will for obvious reasons sing its praises. These boats were gifted substantial asset values. The government did not lease the boats their allocated quota, they were gifted their quota. The fair thing now to ask, which Patrick and Murray are now legitimately asking, is how does government assist the outright lottery losers, and even those winners who are teetering on the brink. Let’s be clear about winners and losers. Does anyone remember Bush v. Gore in 2000? Bush supporters loved the outcome and Gore supporters wrung their hands in frustration. This decision by the US Supreme Court could have gone precisely the other way, had one of the majority justices been otherwise disposed. And had it gone the other way, Bust supporters would have wrung their hands in anguish and Gore supporters would have jumped with glee. The happiness of the supporters of an outcome does not provide justification for the quality of the process.
    As for the obvious rebuttal to my proposition that this was a lottery, proponents of catch shares will mention that this was voted for by 15 of the 16 members of the NEFMC. However, NEFMC and NOAA specifically evaded the requirement for a referendum, so in fact the industry did NOT vote for catch shares, nor did they vote for sectors. To say that industry did vote for A #16 is a tortured view of history. Also, folks need to be reminded that catch history of the boat was used in determining allocation from A #16. Therefore, those who caught more fish during all the lean years of the aughts (2000’s) were rewarded with more allocation. Those who by design or misfortune did not fish hard during the aughts, and thereby preserved the fish stocks, were given minimal quota allocation. What an irony that the NOAA sponsored catch shares rewarded those who most intensely fished down the ground fish populations. This fact never bothered many in the fish industry (including myself), but we all wondered why the environmental community did not fight such a precedent of incentive inversion.

  • Armando Estudante says:

    Here is what is wrong: “Fishermen” under “Catch Shares” refers to corporations and individuals that own quota. A fleet owner that owns a yearly share of 30 million pounds of fish sends his fleet to work alongside a coastal real fisherman that has a share of 30 thousand pounds or even less, because he gave the stocks a break to help rebuilding. The fleet owner can afford to lease extra millions and millions of pounds of fish at any cost. He does not even have to pay for it. Rather, he charges his crews for quota at an arbitrary rate that reduces the crew share to less than 20% of the fish sales, as opposed to the before Catch Shares customary 40%. Working fishermen are charged rent to earn a living. Bernie Madoff would blush!
    With less active boats, employing fewer fishermen each, there are simply less active fishermen, working longer hours with more fatigue and making far less money.
    Catch Shares are making fishing in New England more dangerous, reducing employment, eliminating century’s old jobs, and destroying one of the human activity’s niches where free enterprise and professional excellence allowed hard working individuals to grow, prosper and share wealth. It is shocking that more of our politicians have not reacted swiftly to the privatization of an immense renewable public resource.
    The “phantom group of fishermen” in the article might refer to the boots on deck working fishermen and individual boat owners that are disappearing for lack of quota that is now “owned” by the new breed of “fishermen”: the fleet owners that participated in the crafting of Catch Shares, the biggest Public Resource heist in history.
    We are in agreement as to the futility of throwing tax dollars at the issue. What we need is restitution: Abolish Catch Shares, keep the boats in the hands of single boat owner operators, with Total Allowable Catches, Individual non transferable Quotas and Accountability Measures.

  • Peter Shelley says:

    Daniel Bubb’s, Marc Agger’s, and Armando Estudante’s comments above remind me to mention two things. First, I have a personally maddening tendency to talk past people because I mistakenly think I know where they are coming from. I suspect from these comments that I’m not alone. The second thing is the public, including CLF, is in the dark with respect to the truth as to the specific social or economic effects of management options; disclosure is prohibited by the fisheries law to protect fishing businesses. CLF can’t make our decisions based on stories from the dock, either, since we get a lot of them almost always conflicting.

    So we have to depend on the reports and documents that governments put out, which state conclusions like ”comprehensive information are currently missing on how total vessel costs, crew wages, the number of active crew members, and overall owner profits have changed from 2007-2010. Plans are underway to obtain these data….” As every fisherman knows, we know that these plans will probably come too late for many and should have been done a decade ago.
    The Massachusetts Report was the only report that estimated losses in crew wages on the 27 boats in Sector X and they were in fact significant and very troubling, which I have noted earlier. I called it a “phantom group of fishermen” because I can’t see them and I don’t know whether they are in trouble because they are bad businessmen, unlucky, or screwed by the Amendment 16 allocation. The Mass Report did not show a $21 million dollar disaster, not even close, otherwise we would have supported the request as we have in the past.

    CLF thinks of commercial fishermen first and foremost as businessmen, not tourist attractions. Fishing businesses at all levels, from Mr. Bubb’s to Mr. Rafael’s, have to be sized right and operated in a way that allows them to turn a profit and invest in their future. Some will make it and some won’t like every other business in this country. And the ocean’s fish cannot support everyone who wants to fish, which is what people have been attempting to do. Those are just facts as far as I’m concerned.
    But these comments are wrong to the degree that they suggest that CLF does not think there is a moral dimension to fisheries management because there clearly is: this is a public resource. I, and CLF, actually do care about the small operations like Mr. Bubb’s and the reported ongoing drops in crew pay over the years.

    I, for one, emphatically believe that Mr. Estudante is right on when he demands that people who care should look at some of the programs that have been developed in the sablefish/halibut fishery in the North Pacific, programs that keep a significant part of that fishery in local, small boat hands. We have been on the record in support in the past and we will publicly support those approaches to protect access for small-scale fishermen in Amendment 18 as well.

    The Amendment 16 sector program needs to be modified to support and maintain the traditional mix of boats and ports that have fishing access to our waters. It will be up to the state fishing directors on the Council to make sure that happens in Amendment 18 and I predict that it will be a losing cause if we don’t work together.

    Finally, Mr. Agger is wrong on the numbers. Fish prices did go up and regional fishermen were able to take maximum advantage of them, in part, by timing their catches. I think that is one of the reasons fish buyers have been so agitated about the sector program. But the revenues I mentioned for the Massachusetts– $3+ million–was a net revenue number to the owners. It didn’t include monitoring costs or the net effects of quota leasing, which is both a revenue and an expense item.

    But Mr. Estudante is wrong as a matter of law when he claims that fishermen in the new system own their quota. They don’t own their quota now any more than they owned their days-at-sea in the old program and no history is being accumulated under the new Amendment 16 program.

  • Thaddeus Bigelow says:

    I am struck that opponents of the cath share system ignore that, in fact, there are two management apprioaches in place in the New England groundfish fishery. Vessel owners have a choice between fishing under effort controls and fishing under the sector system. But very few boat owners choose to fish under the “cesspool” system precisley because the regulations needed to control catches are so onerous that they remove any possibility of operating profitably.

    In light of this experience, why would anyone expect that an effort control system would have been better than the sector system? Or is the argument really not about opposition to catch shares, but to specific design elements of the current system? If the latter, let’s focus in that.

  • marc agger says:

    It should be noted that fish buyers do not care terribly much at what level the marketplace sets fish prices. We have been accustomed to such huge fish price volatility for years. Prices can go up 200% over the course of a few months and can decrease 66% over several months as well. For us fish buyers, prices merely reflect supply and demand outcomes. Also they contain information. But, high prices per se are not anathema to fish buyers. The consumers who eat seafood at restaurants and fish markets are the ones that really are appalled by high prices. With the old DAS system, there was already an incentive and a reward for fishermen to time their catches. That has been happening for a very long time, for centuries in fact, because even prior to the DAS system boats would time their catches. Catch shares did not suddenly introduce as some disruptive technology the ability to time one’s catches. Again, I also repeat, food and meat prices globally and in the USA all increased by at least 30% during the first year of catch shares. Go look at the UN FAO Food Index. Frankly, and you may not be aware of this, global fishery prices have an enormous impact on USA fish prices, in fact such global prices have a very very high correlation with USA prices. Decreasing or increasing the annual ABC or DEF or ACL or TAC of any random species by 10% or 20% has a very small impact on it’s prices across a year. I warn folks against attributing cause and effect relationships when there are only a few data points. Yet, any attempt to link fishery prices to catch levels or managements systems is highly tenuous logic. Now, if you were just speaking of taking advantage of such already higher prices, the old DAS fishery management system already encouraged, allowed and took advantage of such an opportunity.
    By the way, if you like high prices for fishermen, do you also like high food costs for restaurants? Do you think the restaurant owners in Boston and New York prefer higher fish costs so that they can increase their menu prices for their clients? Do you think that the fish restaurants on the Boston Fish Pier are happy to see their fish costs increase? I think you should conduct a survey and see if higher fish prices paid to fisherman are universally desired. I myself am indifferent about fish prices. However, if fish prices go up too high, the restaurants will start to sell more pasta, beef, chicken and imported fish products that have been frozen and that are not packed under any kind of US regulatory supervision. It’s all very complicated and quite risky to predict outcomes from changes in fish regulatory policies.

  • Armando Estudante says:

    “Vessel owners have a choice between fishing under effort controls and fishing under the sector system”. That is called a Hobson’s choice.
    “They don’t own their quota now any more than they owned their days-at-sea”. The semantics are irrelevant Mr. Shelly. When Shares or DAS become tradable, the resource becomes separated, detached from the fishermen, from the families and from the community. It is the official invitation to control by alien capital. Of course “the ocean cannot support all the people that want to fish”. I’m in full agreement. It’s soooo crowded out there… I could do much better with owner operator boats only in the fisheries. Tradable shares skew the odds of survival from the competent fisherman to the smart investor. For the time being, tradable Catch Shares are allowing fleet operators to fleece their crews by charging them for quota and buying out disenfranchised owner operators that stayed off groundfish and ended up with small quota.
    What’s wrong with non tradable Catch Shares for fishermen only, Mr Shelley?

    • Peter Shelley says:

      I can’t tell whether you understand my perspective or we just disagree. Vessel owners and/or fishermen have to fish under effective controls. There are an almost unlimited number of management options being practiced around the world. I couldn’t say that any of them are inherently objectionable; they each have strengths and weaknesses. There is certainly nothing inherently wrong with a non-tradable catch share program, although it would defeat some of the benefits of a catch share approach. Amendment 16 may have been a Hobson’s choice for some or even many vessel owners but it wasn’t for CLF. We stopped supporting the days-at-sea approach for groundfish around 2005-06 when I saw where it was headed with respect to its impacts on coastal fishermen. In my opinion, DAS was a clumsy and blunt tool that disproportionately hurt small, day boats when the Council finally set DAS up to stay within its fishing limits. I guess we just disagree on that.

      CLF would be fine with an owner-operator rule, although it’s pretty rough on owners when they start to get older (or get injured) and these programs have had a lot of other consequences to think through . I also think that it may not be the optimum approach for offshore trip boats but that’s a policy choice that we are neutral on unless it artificially raises the price of fish to the consumer (not sure it would necessarily). Fishermen v. smart investors? I wouldn’t want to support a system that is designed in a way that the fisherman who was both a seasoned fisherman and a smart investor couldn’t make a profit if he/she followed the rules. Finally, you say that fleet operators are fleecing their crews and using the proceeds to buy up permits. That is no doubt happening with some fleet operators but not all. Some owners will always care about the well-being of their crews even if it cuts into their share. Frankly, I hope the former go out of business and the latter thrive.

  • muddog says:

    ” What Massachusetts politicians need to make Secretary Bryson see during his visit is that Massachusetts fisheries are looking up, not down; that they are a healthy and receptive place for public and private investments.”

    This is wrong. Debt equals slavery. Fishermen should not have to borrow money to pay rent.

    Who profits? The investor & banksters.

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