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Commercial Fisheries News
Volume 36 Number 1
September 2008
GMRI lobster survey maps industry economics
Although hit hard by rising fuel costs and falling market prices in 2008, New England’s lobstermen enjoyed record catches in recent years. However, even at the height of the good times, a study by the Gulf of Maine Research Institute (GMRI) points to a number of risk factors that could make it difficult for the region to weather a down-turn in the resource.
The report, entitled “Taking the Pulse of the Lobster Industry: A Socioeconomic Survey of the New England Lobster Fishermen,” provides the first comprehensive look at the region’s lobster fishermen and the families who depend on the fishery.
GMRI’s Laura Taylor Singer and Dan Holland undertook this baseline socioeconomic survey of the lobster industry in 2006 out of a concern that too little was known about the diversity and stability of lobster fishing families in New England to adequately assess the impact of future management decisions.
With funding from the National Marine Fisheries Service, they hired Market Decisions LLC, a firm with 30 years of experience in market research, to conduct a telephone survey of a random sampling of 1,158 lobstermen in Maine, New Hampshire, Massachusetts, and Rhode Island.
This survey collected baseline demographic data on the lobster fleet, and then went on to gather more detailed information about each respondent’s business and family situation.
The surveyors asked questions about fishing effort, amounts landed in 2005, costs associated with the lobster business (bait, fuel, insurance), and financing of the business. They also asked about other job skills and fishing permits these lobstermen had and collected information regarding health insurance coverage, household income, and financial planning for their children’s education and retirement.
Although some of the resulting findings may not come as a surprise to many, this baseline data on the socioeconomic health of the lobster fishery provides critical insights into the true economic contribution of the lobster fishery to New England families.
Modest income
While some lobster license holders are making substantial revenues from lobstering, on average the net incomes of lobstermen in 2005, after accounting for operating expenses, were not high.
Even lobstermen who fished during more than two quarters in 2005, saw net revenues under $36,000. Recent increases in fuel prices have almost certainly further reduced net returns since 2005.
New England lobster fishing families, particularly those in northern New England, are dependent on the health of the lobster fishery for the majority of their household income.
While many lobstering households do supplement their income from lobstering, 44% have no other active wage earner. Lobstermen in Downeast Maine are particularly dependent due to the scarcity of other comparable occupations.
Insurance, retirement
Lobstermen lag behind others in the region in terms of the percentage of them who have health insurance coverage. Almost 25% of active lobstermen have no family insurance, compared to 15.7% of the general US population and 10.6% of New England families.
Only 51% of Maine lobstermen have any plan for retirement, as compared to lobstermen in Rhode Island with 70%. However, Maine lobstermen are on par with other self-employed individuals in the US when comparing retirement planning.
Almost four in five active lobstermen surveyed made an investment in their business during the 2005 calendar year. Common investments included new traps (65%), other new gear (24%), and ropes and buoys (22%). Of those who made investments, roughly one fifth to one half by area did so to comply with state or federal regulations.
Financing, investment
One area of concern is that over half of active lobstermen use personal or family savings as a method to finance their lobster businesses, and about one in five use personal or family credit cards.
Despite such a large proportion of lobstering families using personal means to finance their business, almost three-quarters of active lobstermen feel there are adequate sources of financing for their lobster business.
Although lobster landings have been at record highs during the past decade, only 9% of active lobstermen invested profits from lobstering in another business in 2005. Among those who invested profits from their lobstering business, 39% invested in another fishing related business and 17% invested in real estate or other property.
Caveat
It is important to note that GMRI’s survey was based on the 2005 fishing year – a year of high landings and relative low costs. As a result, these findings should be considered in the context of: recent cost increases for fuel and bait; mandated gear changes such as sinking line; and downward landings trends.
All of these factors may negatively impact lobstermen’s financial positions and the ability for New England fishing families to weather the potential tough economic times ahead.
As one way to assist the lobster community, GMRI will be hosting a series of pilot workshops for lobstermen in early 2009 on the fundamentals of financial and business planning.
Thank you
This project was the result of many individuals who shared their ideas, provided sound advice, and guided the efforts of the Gulf of Maine Research Institute. We want to extend our deepest gratitude to the lobster fishing community of New England.
Members of the steering committee who represented the interests of the lobster community were thoughtful and supportive in their engagement with this project. Indeed, without the openness of the lobster fishing community to share their information, this project would not have been possible. Thank you.
The full report is available online at <http://gmri.org/community/seastate/gmri_lobster_report_lores.pdf>.
Laura Taylor Singer
Laura Taylor Singer is the Gulf of Maine Research Institute’s (GMRI) chief convening officer for community programs.
She joined GMRI in 2001 to manage the institute’s collaborative fisheries research program. Prior to that, she was a special assistant to the commissioner of the Maine Department of Marine Resources, where she worked on the lobster zone management council process and initiatives to encourage industry participation and stewardship in fisheries management. She also has worked with the Maine Legislature on fisheries policy issues.
Singer may be reached by phone at (207) 228-1637 or by e-mail at <lsinger@gmri.org>.
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