SEAFOOD.COM NEWS by John Sackton – Nov. 10, 2009 [News Analysis] – In two recent conference calls, and in the release of a white paper on catch share programs, the Pew Environmental group has created consternation among Bering Sea crabbers.
The Alaska crab rationalization program was identified in the white paper as one of the key examples of an existing IFQ program that created more problems than it solved. Then in the conference calls, panelists used the example of the crab program to make their points.
The only problem was that Pew never talked to anyone directly involved with the Bering sea crab fishery, and worse, never consulted the copious documentation about the program available from the North Pacific Management Council and other sources.
During the question period on one of the conference calls, when asked about the source of information on the crab program, Lee Crocket, Director, Federal Fisheries Policy at The Pew Charitable Trusts, said the description of the crab program was written by staff based on literature, including newspaper articles, and that they did not interview anyone involved with the program. He said the purpose was to look at issues raised in the program, and in the view of Pew, the discussion has been one sided. ‘A lot of positive aspects were getting play, but cautionary notes were not’, said Crockett.
Unfortunately, for a paper designed to influence national debate over fisheries policy, it is simply not acceptable to base claims on heresay.
The mischaracterizations prompted a number of letters to Pew from those involved in the crab industry.
For example, Arni Thomson, executive director of the Alaska crab coalition, said ‘Why does the PEW summary fail to address the historical rationale for the development of the crab program as stated by the North Pacific Council problem statement, June 10, 2002, that being, to address resource conservation, utilization and management problems; bycatch and its associated mortalities; excess harvesting and processing capacity, as well as low economic returns; lack of economic stability for harvesters, processors and coastal communities; and high levels of occupational loss of life and injury?
The program has been remarkably successful in meeting every one of these goals. It has gone through a formal 18 month and 3 year review by the council, although neither document was cited by Pew, in which many of the criticisms of the program were addressed, and in some cases remedied either though council action, or cooperative actions by industry.
Some of the examples cited by Thomson and others addressed the major issues: consolidation of the fleet, economic impact on communities, loss of jobs, processor control over harvester incomes, lower crew payments, loss of fishing opportunities in Alaska, high grading and bycatch issues, and excessive leasing of quota.
Here is a brief rundown of facts documented by the Council, academic research, and direct surveys of the industry:
Consolidation: The goal of the program was to address the fact that a fleet of 289 boats that harvested hundreds of millions of pounds of crab in 1997 and 1998 was totally unsuited for harvesting 20 to 30 million pounds of crab under drastic stock reductions. Seasons had dwindled to as little as 4 days, with a race for fish, dangerous conditions, and loss of life. The goal of the program was to allow the fleet of active boats to shrink to the size compatible with efficiently harvesting the resource. The shocking thing about the crab program was that this happened overnight, in the space of a single year, rather than over two or three years as the council expected.
Pew claims the reductions resulted in 1200 job losses, and a 75% drop in income for local businesses in Kodiak.
The facts, as stated by NPFMC staff economist Mark Fina, were that the jobs lost were distinctly part-time, and the average fleet-wide crew income per vessel in the 2004-2005 fisheries combined was about $25,000, for the most dangerous job of any fishery in the United States. Dr. Fina’s analysis also shows that the average combined income for crewmen during the first two years under the crab program, despite high lease rates in the king crab fishery, increased 70%, to an average of $43,489 per man, and the average daily income increased from $536 per day to $681 per day in the king crab fishery, and income has remained stable in the snow crab fishery near $400 per day.
Further, what happened to the vessels that left the crab fishery. A analysis presented to the NPFMC in February 2009 showed that numerous BSAI crab vessels are diversified. Many vessels continued to work as salmon tenders and employ crew. The analysis showed a total of only 18 inactive vessels, of which 4 of those vessels were Alaskan-based and 14 were Washington-based, and these sidelined vessels represented a total of 108 jobs lost, 24 to Alaska and 84 to Washington State.
Economic impact on Communities:
Regarding the claims of losses in Kodiak made by Pew, The $1 to $1.6 million dollars lost income for local businesses is incorrect. It was not lost business income, but Gunnar Knapp’s estimate of lost income to Kodiak-based crewmen who reportedly lost their part-time crab jobs in the Bristol Bay red king crab fishery. He estimates 104 Kodiak-based crewmen lost their jobs due to rationalization, and using Dr. Fina’s average pre rationalization income for the 2004 season of $9,244, based on the Economic Data Reports (EDRs), the most recent information, the lost income estimate would be $961,300.
Of greater significance to the Pew Report, Gunnar Knapp’s conclusions about the Kodiak economy after rationalization directly contradict the claims made by Pew. For example, Knapp found that crab related businesses increased their sales 14 percent during the fourth quarter of 2005 (first rationalized king crab fishery) and 10 percent in the first quarter of 2006 (first rationalized snow crab fishery). Further, as a group, he found no dramatic decline in sales as a result of rationalization and the majority has experienced growth in sales. There was no clear evidence of any major economic effect from rationalization (Knapp, Kodiak analysis, pages 44-49).
Also mentioned by Steve Minor in a letter to Pew was that the crab rationalization program was the first in the nation to specifically protect ‘crab dependent communities’ by instituting landing restrictions and rights of first refusal of communities to purchase certain types of quota. Hardly an example of a program that neglected the needs of local communities. Further, materials submitted to the Council show an increase in Alaskan ownership both of IFQ and processor quota in the crab program. Far from displacing Alaskan ownership, the program has increased it.
Regarding the fear that processors would depress harvester incomes, a number of harvesters pointed out that they have maintained their historic share of revenues, as the program intended, and many see harvester income at record high levels in the crab fishery.
The white paper also cited environmental effects, such as high grading. In fact, this did occur during the first year of the program. But in the second year, industry and processors and NMFS worked together to implement a 100% retention program, by adjusting pricing practices and having IFQ holders agree to the retention. After a year of monitoring, NMFS declared the retention program a success, and reversed all crab mortality estimates based on high grading, with the result that the TAC’s increased. Further, the crab TAC is now caught with fewer pots, meaning less damage to surrounding bottom, and fewer bycatch issues. This is hardly an example of environmental degradation by rapacious quota holders. The real story is a tremendous improvement in cooperation and trust between NMFS and the industry working towards the same conservation goals.
Finally the White paper discussed leasing practices, and the degree to which quota holders may no longer be active in the fishery saying ‘Absentee ownership is also a problem, and some quota holders lease their shares at rates substantially higher than the actual value .’
Jim Stone, a Bering Sea crab fishermen who was on one of the conference calls, said ‘Who is the arbiter that determines the ‘actual value’ if not the lessor and the lessee. Also what is an absentee owner? Is he the owner who ties up a boat while we are experiencing these continued historically very low quotas, mixed with low worldwide fish prices, with the intent to return when quotas & price improve? The naturally wide variations in the crab bio-mass are exactly why we need a rationalized system that allows IFQ leasing. As quotas go down leasing will increase and as quotas go up leasing will decrease. What a great tool to keep our vessels and businesses in shape so that we can maintain safe and reliable boats to fish on no matter the size of the year to year crab quotas.’
The crabbers would welcome analysis of their program by PEW that is actually based on the facts established by the council, public documents, and information from those who actually participate in the fishery.
Indeed, in other areas, Pew goes out of its way to support the rights of those involved in an issue to be heard and tell their stories.
Arni Thomson said ‘In closing, I hope that PEW will consider the facts Your important organization has an obligation to address issues in a fair way.’
In a national debate conducted by a major organization such as Pew, who is listened to by Congress and the Administration, it is critical that they uphold standards of integrity and truthfulness when presenting their analysis, and in respect to their understanding of the Bering Sea Crab program, both the white paper and the conference calls appeared to represent a gross failure of responsibility.
[disclosure: John Sackton has been selected to contribute the non-binding price arbitration formulas for the Bering Sea crab fishery by both harvesters and processors since the program’s inception in 2005.]
John Sackton, Editor And Publisher
Seafood.com News 1-781-861-1441
Email comments to jsackton@seafood.com