The Future of New England Seafood

Fishing Banks: A new strategy for New England

“Fishing Banks” is an exclusive Talking Fish series that looks at the use of permit banks to support a diverse groundfish fleet while encouraging sustainable fishing and the continued rebuilding of fish stocks. This post is the second in the series. Read the previous post here.

As I discussed in my last post, the shift from “days-at-sea” management to the sector system, like any management shift anywhere in the world, created winners and losers in the New England groundfish fishery. Those who had fished hard for groundfish during the eleven-year qualifying period received larger quota allocations and thus more opportunities to fish and make money from groundfish than did those who hadn’t landed as much groundfish during that time period.  Many of this latter group developed new fishing opportunities in other fisheries during that time but hoped to get back to groundfishing in the future.

There are two fundamental ways to handle these inequities in this country. One is to trust the marketplace to sort it all out in the most “efficient” way possible. Anyone with a retirement account has learned a hard lesson in the last five years about how harsh these market corrections can be.

The other way to handle this is to employ forms of social engineering in conjunction with market tools – creating mechanisms that allow government and the private sector to correct these inequities in a way that is both more fair to a wider group of interests, more predictable than the open market, and cognizant of important social issues beyond economic efficiency.

A permit bank that holds fishing quota is such a mechanism. It allows entities such as groups of fishermen, states and even nonprofit organizations to purchase fishing permits on the open market and then lease the quota from these permits back to target fishermen, often at below-market prices.

This is exactly what some forward-thinking fishermen did in the years leading up to the implementation of sector management. Supporting the value of the shift to a hard quota system and sectors, but fearing the inevitable consequences of just allowing the marketplace to decide who got to survive in the fishery, innovative and entrepreneurial small boat owner/operators on Cape Cod worked to do what small business entities in other industries have been doing for centuries: joining together so they could compete in the market place with the larger operations and advance their social and economic interests.

Initially funded with investments from its fishermen and members, the Cape Cod Commercial Hook Fishermen’s Association launched a fishing permit bank for Cape Cod fishermen in 2005. Now largely financed with long term loans, the bank owns both scallop and groundfish quota. The quota is leased out to qualifying small-scale, independent fishermen on Cape Cod at roughly 50 percent of open market lease rates. It is a shot in the arm for smaller boats that are having trouble with the switch to catch shares. The purpose of the bank is to ensure the survival of this iconic local industry. This was a revolutionary concept and approach for small boat fishermen in New England.

Permit banks such as the one these fishermen formed can be designed for assisting in producing any number of social or economic outcomes: protecting a fishing port’s (in this case, Cape Cod’s) fishery in the future; transferring fishing history from the boats that had large quantities of landings in the qualifying period to boats that didn’t; or creating a tool that the New England states could invest in themselves to create “new entrant programs” for the rebounding groundfish fishery, thereby allowing the next generation of working fishermen to get a toehold in groundfishing without having to mortgage their family’s future.

Momentum for similar community investments is building in the region. In addition to the permit bank started by the Cape Cod fishermen, there are other permit banks operating and planned across the New England region. Permit banks in Gloucester, Boston and on the South Shore of Massachusetts, Stonington and Pt. Clyde, Maine, as well as in the state of Maine have created accessibility based on the social and economic (and conservation!) goals important to their respective communities.

In the next segment of this series, Talking Fish will go into more detail about how these permit banks are being and could be used to ensure that this remarkable public resource – our iconic fishery for the cod, haddock and flounder we love to eat – stays open to all.


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