The sector approach is not a panacea. Many problems facing fisheries result from an excess of boats and fishermen relative to what current fish stocks can support. For some species to recover, catches must be further reduced. Although that will likely have neg- ative economic implications in the short run, there is a broad expectation that sectors will improve the industry’s overall performance and reduce the impetus to discard harvested fish to meet regulations (a wasteful process known as regulatory discarding). Sectors also could foster cooperation to deliver more consistent product year-round, reduce costs, and diminish negative environmental impacts.

Concerns do remain. Sectors will create new administrative costs (estimated at $60,000 to $150,000 per sector) and additional monitoring costs that the industry will have to fund. And although sectors can promote community-based fishing, consolidation could potentially lead to inequity and social tension. Income may be greater and more stable for some, while consolida- tion reduces employment overall.

Whether the industry can be maintained and strengthened depends on many factors, including banking support. Access to financing with reasonable terms is critical to enable smaller fishermen to purchase per- mits to expand their businesses and to let young fishermen enter the industry.

This Communities & Banking article is copyrighted by the Federal Reserve Bank of Boston.

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