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Editorial
Commercial Fisheries News
Volume 33 Number 12
August 2006
Buyout talk triggers groundfish reality check
Groundfish fishermen who attended the 10 meetings held in late June and July to discuss an industry-funded buyout proposal came face to face with some harsh realities about the future of their fishery.
The contraction of the fleet, which has been underway for years, isn’t over yet. Some boats will make it. Some won’t. The shakeout will happen. The only real question is: How will it occur?
The buyout proposal presented by the Multispecies Capacity Reduction Steering Committee was never billed as a finished product. Rather, it was the best strawman this diverse group of industry representatives could come up with.
The steering committee held the port meetings to let other fishermen have a crack at it, ask hard questions, make suggestions, and offer alternatives. About 170 people took up the steering committee’s challenge. Based on summaries of those meetings, here are a few of the issues they raised.
Latency. Framework 42 tells us that 30,052 days-at-sea were fished in 2004 out of 44,492 allocated, leaving 32% of days unused. With unused and used days-at-sea carrying equal weight in the reverse bid process, how much active effort can a buyout really capture? One suggestion was to lobby Congress to fund a buyout of unused days and only then proceed with an industry-funded buyout.
Permits. The strawman contained several options for what fishermen with accepted bids would have to give up – groundfish permits only, all state and federal permits, or one or the other depending on groundfish history. Some asked if they’d still be able to fish for bluefin tuna, northern shrimp, and/or in the general category scallop fishery. Others worried that anything short of the surrender of all permits would lead to destructive redirection of effort into other fisheries like squid and whiting.
Payback. The groundfish fishermen remaining after a buyout would shoulder the burden of repaying a $100 million debt through a 3% “tax” on groundfish trips. Theoretically, increased revenues from rebounding stocks should make that no big deal. But in these hard times, 3% can mean the difference between profit and failure, and some see nothing ahead but revenue declines for at least the next few years. This left some arguing that only fishermen who don’t submit bids be allowed to participate in the final vote on whether the buyout proceeds.
Fishermen also urged: Coordinating the industry buyout effort with the New England council’s upcoming capacity reduction amendment; addressing capital gains and capital construction fund issues; and giving younger newcomers to the industry a grace period before having to pay the loan repayment tax.
Steering committee members were meeting on July 27 to review the comments and decide whether to continue this process. If they opt to go forward, they will select a permit surrender option, revise the proposal to reflect fishermen’s input, and send out a strawman ballot on the refined proposal sometime in August. The results of that vote will determine whether the committee begins work with Congress to come up with a final proposal for fishermen’s consideration next year.
Regardless of the outcome, the process to date has prompted many people to think seriously about where the groundfish fishery is headed and what role they want to play in it. This has been a hard reality check for many people. But the way we see it, it’s better to know what’s coming and consider the possibilities than to be taken by surprise.
Check for results of the July 27 meeting at <www.nebuyout.org>.
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