ITQs: A Road of No Return

Rights Based Management and Small Scale Fisheries in the EU: 

Human Rights Versus Property Rights

This paper sets out the LIFE position on Individual Transferable Quotas (ITQs). The Common Fisheries Policy (CFP) leaves open the possibility for EU Member States (MS) to establish systems of transferable fishing rights, and implementing the discard ban has rekindled the debate about introducing such rights. ITQs have caused no end of controversy in the EU small-scale and coastal fisheries (SSCF) sector and it is essential that we confront and examine this approach to allocating fishing rights1 , given the risk that they may make a comeback in the EU. ITQs are often put in place with the stated purpose of reducing overcapacity and improving economic efficiency, but the failure to consider equity along with other human rights aspects (civil and political, social, economic and cultural) of fishing communities has meant that ITQs have disadvantaged SSCF and prejudiced their ability to enjoy their human rights.

In this context, and given the extensive locally significant economic, cultural, social and environmental benefits delivered by the SSCF, it is vital to critically analyse any EU or Member State proposal for introducing ITQs against both intended and unintended harmful consequences that may result regarding SSCF, and to ensure that provisions that mitigate against such harmful consequences are included in any initiative.

Comment on; Update - So how’s that “catch shares” revolution working out for groundfish?

Here's another excellent article from Nils Stope from the other side of the Atlantic - where, as regular readers will know - State interference (for want of a better term) in the USA's groundfish fishing industry often mirrors our own whitefish and demersal scene in the North Sea and beyond and as such we can profit and learn form their experience as they are ahead of us in some ways. It's not a great story either - huge and inflexible plans brought in to manage fisheries every bit as diverse and varied in terms of socioeconomic diversity as in the UK have led to, well not much really - and one sobering thought that has only recently occurred to me - they have it easy! How come? Well for starters the fish are subject to a single nation fishing for them - The US of A - whereas the waters around the UK are fished not by just the UK but shared with all the EU member countries entitled to fish in these waters too - complicated? - you bet Nils!

Read on:

Alternating with original FishNet USA articles I will be going back to pieces I’ve written (for FishNet and other outlets) over the past 19 years – isn’t it amazing how fast time goes when you’re having fun? - to see how accurate I was in identifying industry trends and predicting what their impacts were going to be. Rather than redistributing the original articles I’ll link to them on the web and try to keep these updates to two pages or under. The original for this update from March, 2014 is at http://www.aifrb.org/fishosophy/____________________
Most of you probably remember when newly appointed NOAA head Jane Lubchenco went to New England and announced that she was going to save our nation’s oldest fishery. But if it didn’t make a lasting impact on you, quoting from the Environmental Defense blog, EDFish by Tesia Love on April 8, 2009, “Sally McGee, Emilie Litsinger and I got to witness something pretty wonderful today.  Jane Lubchenco came to the New England Fishery Management Council meeting to announce the immediate release of $16 million to the groundfish fishery to help move the fishery to ‘sector” catch share management by providing funding for cooperative research to help fishermen get through a tough fishing year with very strict limits on fishing effort.”  She went on to quote Dr. Lubchenco “we need a rapid transition to sectors and catch shares. Catch shares are a powerful tool to getting to sustainable fisheries and profitability.  I challenge you to deliver on this in Amendment 16, to include measures to end overfishing.  I will commit the resources to my staff to do their part to ensure Amendment 16 is passed in June. We are shining a light on your efforts and we will track your progress.  There is too much at stake to allow delay and self-interest to prevent sectors and ultimately catch shares from being implemented.”
I’m sure that you were there with the rest of us, heaving a huge sigh of relief with visions of Dr. Lubchenco on her shiny steed,  first riding to the rescue of the New England fishery, and then on to all of the rest of our struggling fisheries. “Hyo Silver! Away!”
So how did she do? A couple of years back NOAA/NMFS released the 2012 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery (May 2012 – April 2013). It’s available athttp://www.nefsc.noaa.gov/publications/crd/crd1401/. The report included a table - available at http://www.nefsc.noaa.gov/publications/crd/crd1401/tables.pdf - included a table titled Summary of major trends (May through April, includes all vessels with a valid limited access multispecies permit) for the fishing years 2009 to 2012. The table only takes up a single page, is pretty easily understood and is well worth your consideration in its entirety but I’ll take the liberty of synopsizing what I think are the major points it illustrates. In each of the four years the groundfish revenues, landed weight, number of active vessels that took a groundfish trip, the total number of groundfish trips, and the total crew days on groundfish trips decreased. The non-groundfish revenues and landed weight increased. The days absent on a non-groundfish trip increased slightly then decreased.
And then we come to 2013 (it seems that according to NOAA/NMFS, 2014 hasn’t gotten here yet). Had the myriad benefits of Dr. Lubchenco’s and her ENGO/foundation cronies’ Catch Share Revolution finally arrived? Apparently, not quite yet. According to the 2013 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery (May 2013 – April 2014), just about everything that was falling in FY 2009 to 2012 continued to fall in FY 2014. I won’t go over any of the details, but the corresponding Table 1 for that year is available at http://www.nefsc.noaa.gov/read/socialsci/pdf/groundfish_report_fy2013.pdf.
Oh well, I guess she deserves a few points for trying – and we shouldn’t forget that before she could really focus on fixing groundfish she was distracted by having to dump a couple of millions of gallons of Corexit into the Gulf of Mexico.
Thirteen species are included in the New England Fishery Management Council’s multi-species fishery management plan, the “groundfish” FMP. Four of those species support no or minimal directed fisheries. The landings of those that support a significant commercial fishery are in the table below (from the NOAA/NMFS commercial landings database). Looking at these data, it’s impossible to suggest that after years of intensive management this management regime is anything that could be considered a success – unless your idea of success is putting a whole bunch of people out of work. In fact only the most charitable among us could term it anything other than disaster – and it’s a disaster that has been in the making since long before Dr. Lubchenco so fatuously announced that she was going to fix it.
(I’ll add here that catch share management is not a cure-all for all that’s wrong with fishery management nor is it the reason for management failures – though at the time Dr. Lubchenco and her “team” apparently believed it was. It is nothing more than an option for dividing the catch among users. As such it can have profound socioeconomic impacts on participants in the fishery and on fishing communities that depend on it, but not on the fishery resources themselves.)  

Species	Year	Metric Tons	Value	Species	Year	Metric Tons	Value
Atlantic	2009	8946	$25,223,364	Haddock	2009	5,818	$13,655,842
Cod	2010	8039	$28,142,681		2010	9,811	$21,715,488
	2011	7981	$32,596,942		2011	5,709	$16,316,219
	2012	4766	$22,200,043		2012	1,959	$7,833,001
	2013	2261	$10,455,352		2013	1,869	$6,002,480
Plaice	2009	1395	$3,886,809		2009	1,696	$3,556,719
	2010	1413	$4,498,591	Hake	2010	1,807	$4,116,221
	2011	1387	$4,274,757		2011	2,907	$5,849,790
	2012	1480	$5,048,688		2012	2,772	$6,933,743
	2013	1318	$4,688,995		2013	2,238	$6,484,444
Winter	2009	2209	$8,094,381	Pollock	2009	7,492	$10,010,039
Flounder	2010	1587	$6,959,547		2010	5,158	$9,529,022
	2011	2124	$8,002,376		2011	7,193	$12,292,573
	2012	2395	$10,331,500		2012	6,743	$13,185,509
	2013	2746	$9,899,924		2013	5,058	$11,395,943
Yellowtail	2009	1605	$4,759,536	Acadian	2009	1,440	$1,572,292
Flounder	2010	1318	$4,193,981	Redfish	2010	1,646	$1,959,681
	2011	1827	$4,762,969		2011	2,014	$2,754,692
	2012	1808	$5,396,502		2012	4,035	$5,891,429
	2013	1278	$4,199,927		2013	3,577	$4,337,163
Witch	2009	949	$4,036,115
Flounder	2010	759	$3,773,526
	2011	870	$3,955,053
	2012	1037	$4,247,528
	2013	686	$3,735,330

How might it be fixed? In the original FishNet article I quoted a couple of paragraphs from a National Academy of Sciences study Evaluating the Effectiveness of Fish Stock Rebuilding Plans in the United States (available at http://www.nap.edu/catalog/18488/evaluating-the-effectiveness-of-fish-stock-rebuilding-plans-in-the-united-states). 
I can’t think of anything more valuable than repeating those words here. On page 178 of the report the authors concluded “the tradeoff between flexibility and prescriptiveness within the current legal framework and MFSCMA (Magnuson-Stevens Fishery Conservation and Management Act) guidelines for rebuilding underlies many of the issues discussed in this chapter. The present approach may not be flexible or adaptive enough in the face of complex ecosystem and fishery dynamics when data and knowledge are limiting. The high degree of prescriptiveness (and concomitant low flexibility) may create incompatibilities between single species rebuilding plans and EBFM (Ecosystem Based Fisheries Management). Fixed rules for rebuilding times can result in inefficiencies and discontinuities of harvest-control rules, put unrealistic demands on models and data for stock assessment and forecasting, cause reduction in yield, especially in mixed-stock situations, and de-emphasize socio-economic factors in the formulation of rebuilding plans. The current approach specifies success of individual rebuilding plans in biological terms. It does not address evaluation of the success in socio-economic terms and at broader regional and national scales, and also does not ensure effective flow of information (communication) across regions.”

In other words, the fishery managers need more informed flexibility to adequately manage our fisheries. It has been the goal of the fishing industry’s friends in Congress to provide this necessary flexibility (with adequate safeguards, of course). Conversely it has been the goal of a handful of foundations and the ENGOs they support and a smaller handful of so-called fishermen’s organizations to prevent this, and it seems that they have been willing to resort to just about any tactics to do it. As they have been successful in their efforts the fishing industry has continued to lose infrastructure that will never be replaced and markets that will be next to impossible to recover – and the percentage of imported seafood that we consume will continue to increase in spite of the fact that our fisheries are among the richest in the world.

Nils has an excellent website that can be viewed here:

Slipper Skippers! - Mystery cartels who control price of British-caught fish.

Here's an article published February 14th in the Times by David Sanderson. The story of how quotas, which were once allocated to individual fishermen are now traded on a global market worth millions - but very often no longer owned by individual fishermen is another story of intervention gone wrong - perhaps there was never a better example of the law of unintended consequences! 


Read on........

The Government allocates quotas, but loses track of them as they are sold to 'barons' interested only in profit!

The price of fish is being inflated by private organisations that have been given free access to quotas worth billions of pounds and are on the brink of securing permanent control of Britain's fishing rights. 

The Government has admitted that Britain's 23 privately run Fish Producer Organisations (FPOs), to whom it hands 94 per cent of the country's annual quota, manipulate the market to boost their profits. Fish prices increased by 11.4 per cent in the year to June 2011, twice the increase in meat prices, according to the Office for National Statistics. But despite concerns that the opaque yet highly lucrative market is now being controlled by "quota barons", including investment funds, the Government has resisted calls to publish a register of ownership. It concedes that it does not know who owns and profits from Britain's quota allocation because of "invisible" transfers within FPOs: many members lease out their allowance at huge profit. The Government also admits that the quota rights — originally attached to vessels fishing in British waters in the late 20th century — may end up permanently in the hands of the FPOs, who it says now have a "legitimate expectation" of ownership. 

Critics have described it as a "privatisation of the seas" without any benefit to the Exchequer.In 2010 the value of the 606,000 tonnes of fish landed by British vessels was £719 million; the leasing of a one-tonne quota of cod can fetch up to £2,500. Anne McIntosh, the Conservative MP who is chairman of the Environment, Food and Rural Affairs Select Committee, said it was astonishing that the Government did not know who owned the quotas it handed out. She called for the Government to publish a register, adding that it was not in the country's interests for fishing rights to be owned by non-fishermen. 

Peter Aldous, the MP for Waveney, which includes the fishing port of Lowestoft, described it as a scandal. He said that reform of the system would be difficult because of the "powerful vested interests that will resist change". 

The current system of quota allocation has also resulted in fishermen with boats of less than 10m (33ft) being denied access to the seas. They comprise 85 per cent of the UK fleet yet receive only 4 per cent of the annual quota as they are usually excluded from FPOs. If the owners of smaller boats want a share of the quota, they usually have to rent it from FPOs, but many said they could not afford the price demanded. Even if they could, FPOs are not offering shares to them. The small boat owners claim that the system forces them to discard tonnes of fish. 

Jerry Percy, the chairman of the New Under Ten Fishermen's Association, said that the Government had allowed the "family silver" to be taken away from working fishermen. "Nobody except the Producer Organisations know what's going on," he said. "It could be hedge funds, big international companies or even football clubs that are holding the quota and making money." Thomas Appleby, a law lecturer at the University of the West of England who has been trying to discover who owns Britain's quota, said a small group of wealthy people were renting out "public property" for profit. He said the Marine Management Organisation, the quango administering fishing, rejected his latest request for information but said that although the Government did "retain ownership of fish quotas ... the industry has an established legitimate expectation for access". "They now view it as theirs," Mr Appleby said. "But the Exchequer is losing out because usually when you privatise assets the public is compensated." He added: "Because we have FPOs trading among themselves and forming cartels, there's an element that they are controlling geographic areas. 

There could be abuse of a dominant position, which would be bad news for the consumer." Richard Benyon, the Environment Minister, acknowledged to the select committee that FPOs would restrict supply of quota to the under-10m sector.In a statement his department said that it would keep quota back for commercial reasons, including "to increase the prices obtained by their members for the quota they do land". Jim Portus, chairman of the UK Association of Fish Producer Organisations, defended the system. He said the organisations were not "secret", adding that the FPOs had been pushing Defra to publish a register. He said that any flaws in the system were because of "ministerial inefficiency". 

A spokesman for the Department for Environment, Food and Rural Affairs said it was "seeking a publicly available register of quota allocations". 'Slipper skippers' reel in the net profits.

The Marine Management Organisation, a government quango, administers the scheme but admits that many transactions within and between the fish producer organisations are invisible to it. This has led to speculation that investment companies and even football clubs now own FQAs, which they lease out for profit. Currently, some 96 per cent of the British allowable catch goes to the 23 FPOs. (One of these is the Cornish Fish Producers Organisation who manage the quotas for the majority of Newlyn and other Cornish vessels)

The remainder is distributed by the Marine Management Organisation, for free, to the small-ship fleet. In 2010, Britain had 6,477 registered fishing vessels — a reduction of 16 per cent from 2001. More than 5,000 of these were in the under-10m fleet. In the same year these vessels landed 606,000 tonnes of sea fish (including shellfish, which are not subject to quotas), valued at £719 million. The price of leasing fixed quota allocations varies depending on the fish stock, the time of year and the section of British coastal waters it has been allocated to.

In response, French fishing consultant Yan Giron gives his view from across the Channel - he is keen to point out that he is making an observation on the findings as they are of real relevance to the place the French operators find themselves - that is from the artisan fishermen's perspective

I am not involved in day-to-day UK fish system, but here are some views given from the other side of the Channel (how we see the FQA system and its consequences) After having read again this hot issue, hot for Britain and hot for whole EU because FQAs are ITQs of TFCs, and that is what EC want for everybody: - truly, the role of FQA in discarding is real for me and minimized in public debate regarding this issue. I am glad to see that written in fair words. And this makes us read differently Commission wish to implement both an overall ITQs system AND an overall discard ban. Otherwise, they cannot promote ITQs in multi-specific fisheries.

I wrote a tribune in Le Marin, our professional newspaper month ago. - Problem of FQA is not new, and ITQs too. I think there is a huge gap between neo-liberal economy principles and reality. ITQs promoter think that they let rule the fishing activity through the market forces. But, it means they have to follow economical rules, and one major is fair competition and no underneath constraints. BUT, they are in fact 2 markets working with close links and under constraints: the quota market and the landed fish market. And underneath constraints are strong: constraints to fish, access to fisheries, KW and GTU management, even composition of catches in mixed fisheries and implementation or not of a ban on discards.

Last point is huge too : you can’t catch your most valuable fish if you don’t have also low valuable fish quota. And you may pay the highest prices for these low value fish quota, especially if you absolutely need them to catch the good price fish, and if they are scarce. - Impact of speculation is thus huge. They wrote : price of cod quota :up to £/kg 2.5. It is a quota given to a species, not to the size of fish. Prices of landed cod range between £/kg2 to 4, depending on size of fish. Now consider all the value taken from your catches, I have dock rumours which said fish quota leasing accounts now around 50% of the fish value or catching expenses…. And you have to take out fuel expenses, etc.

Without a ban discard, you have no choice: you have to high grade / discard. With a ban discard, and with no improve of selectivity, you are economically dead. 

(He goes on to raise some further questions following the logical conclusion of the current line of thinking)

Is this what Europe want ?Artificially increase the catching expenditures ? without an economical return for the fishing boats ? How do you want to self finance modernisation and day-to-day profitability? Windsail your fishing boat (he's having a go Yan! ed) and recruit low cost manpower ? We may find cheap Libyan and Egyptian manpower. I have nothing against foreign crew, but we also have employment to safeguard.