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Commercial Fisheries News
Volume 32 Number 10
June 2005
Fleet strategies: Fuel prices, leasing, B-days
GLOUCESTER, MA – In the midst of 2004’s chaos under Amendment 13, the Northeast groundfish fleet had to learn how to fish in a new world where days-at-sea became a leasable commodity and staggering fuel bills hovered over every boat that left the dock.
According to John Pappalardo, manager of the Georges Bank Cod Hook Sector, the fuel problem, which hasn’t abated much, has made it extremely difficult for fishermen to make profitable trips.
“Next to fish prices, it’s become the most significant issue facing the industry right now,” he said.
In late May, fuel prices seemed to be settling around $1.80 after soaring to above $2 in many ports.
“Nobody anticipated that fuel was going to stay so high. It’s really hard on the crew,” said Maggie Raymond of Associated Fisheries of Maine.
The situation clearly affected fishing decisions.
“Fuel prices made a big difference in how we accessed haddock,” said Gloucester fisherman Vito Giacalone of the Northeast Seafood Coalition.
Since fishermen who entered the Eastern US/Canada Area were prohibited from fishing outside the area, many considered it too risky to make the trip at all.
“People didn’t want to waste all that fuel and then get stuck there,” said Giacalone.
According to Jackie Odell, executive director of the Northeast Seafood Coalition, fishermen also needed to have a sense that fish prices were going to hold up during the trip since fuel prices were so exorbitant.
“The cost of getting out there to the eastern area needs to be outweighed by the price people are getting for the fish,” she said.
Leasing
Another capital expense that many fishermen shouldered during 2004 was leasing days-at-sea.
At the beginning of the fishing year, the groundfish fleet had few opportunities to use B-days, so many people leased days quickly – and paid a lot of money for them – to ensure they had adequate days for the year ahead.
According to a new report compiled for the New England Fishery Management Council’s groundfish committee, fishermen leased over 6,000 days-at-sea during the 2004 fishing year, which accounted for about 14% of all allocated A-days.
The total value of leased days reached $2.5 million, with the price per day-at-sea running the gamut. The average was $364 but some traded for $1 or less and some hit close to $2,000. In all, the National Marine Fisheries Service conducted transactions between 173 lessors and 229 lessees, with 36 being intercompany leases.
Portland, Gloucester, and New Bedford accounted for 60% of all leased days. In general, days leased in New Bedford cost more than in Gloucester or Portland. The price per day “moderated as the year progressed,” some say reflecting the fleet’s increased ability to use B-days.
“When Amendment 13 was approved, leasing was the only thing that provided people with some flexibility. Then on Nov. 19, the B-regular program came on line,” said Odell. Many viewed B-days as “free” days they couldn’t use before.
Valuable program
Even if it was costly, most people, even early opponents, were grateful for the leasing program.
Hank Soule, general manager of the Portland Fish Exchange, said the program was a critical factor in the exchange’s ability to get through the last fishing year.
“If it weren’t for leasing, this organization would be in very serious trouble. It’s the one saving grace in Amendment 13. It let Maine boats stay in Maine,” he said.
Raymond agreed.
“It made a huge difference to overall morale for our members,” she said. “For those most dependent on the groundfish fishery, leasing bridged the economic viability gap.”
As for 2005, many fishermen intend to continue leasing days, but Raymond said, “The one thing I know for sure is that there’ll be a big change in the price. People know they paid too much at the beginning of the last fishing year, but everyone was panicky. There are only so many days available in your horsepower class.”
Keep it going?
The leasing program is scheduled to expire at the end of the 2005 fishing year, and according to Tom Nies, the New England council’s groundfish plan coordinator, the council will need to decide in Framework Adjustment 42 whether it wants to extend the program and/or modify it.
Few people seem ready to give it up.
“Right now, I think we need all the tools available for people to stay alive,” said Giacalone.
B-day usage
Another factor that will alter fishing behavior in 2005 is the increased number of options for using B-days either through special access programs or the Regular B-day Pilot Program.
Richie Canastra of the Whaling City Seafood Display Auction in New Bedford is sure the B-day program is an asset to the fleet.
“The B-days are really helping the fishermen,” he said. “It’s working. We’re fishing on healthy stocks.”
However, the regular B-day program, as a “pilot,” was only authorized for four quarters with 1,000 days available per quarter. Two quarters have passed already, and May 1 marked the start of the program’s third quarter. The final quarter ends in October, when the program expires. The New England council will need to decide what to do next.
“The whole idea was to show the benefits of the program, and we’re doing that,” said Giacalone, who initially came up with the B-day concept. “I think we’ll see a lot more people out there using B-days this year.”
One facet that has hindered the program is the extremely low trip limits associated with “groundfish stocks of concern.” Fishermen can go out on a B-day to target haddock, for instance, but have to “flip” to an A-day if they exceed 100 pounds per day of Gulf of Maine cod, Georges Bank cod, white hake, or a few other species. The daily limit on Cape Cod/Gulf of Maine and Southern New England/Mid-Atlantic yellowtail is 25 pounds.
Those limits are unrealistically low, according to Giacalone.
“We knew that 100 pounds per day was not going to work all the time,” he said. “Grey sole and white hake are caught a lot with the target (healthy) species on a B-regular day, so if we’re not fully utilizing the TACs for those stocks in the A-day program, we should increase the incidental catch TACs for the B-day program.”
That’s assuming the council isn’t ready to increase A-days, which is everyone’s top priority, he said.
Like Giacalone, Odell, too, is getting a clear signal that fishermen intend to use more B-days this year.
“Some people did spend a lot of money to lease days last year, but now they have more opportunities to figure out what’s going to work for their businesses. There’s more talk about using the B-day program this summer. I think it’s going to be very different this year in terms of what people will be deciding,” she said.
Janice M. Plante
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