Mayor's Ocean Fisheries Council Convenes to tell the Real Story on Recently-Implemented Federal Fishing Regulations
Who: This meeting is open to the public and the media.
When December 9, 2010 at 2:00pm
Where: Waterfront Grille, 36 Homers Wharf, New Bedford, MA 02740
Contact: Stephanie Poyant, 508-979-1410
Out of town media and industry members are invited to listen in:
Dial-in Number: (712) 432-1690 Participant Access Code: 1079860#
NEW BEDFORD, Mass. – Dec. 9, 2010 – The facts are staggering, the groundfish fleet in New England has been cut in half in just 5 short months. Since catch-shares were implemented in New England in May, 253 boats out of a fleet of 500 are just sitting at the dock. This equates to 3 to 5 jobs per idle vessel, putting as many as 759 to 1,265 people out of work almost overnight.
This is compounded by a transfer of wealth and consolidation of revenue. 55 of the 247 boats fishing are now realizing 61% of the revenue. The remaining 192 vessels account for only 39% of total revenue.
Under the direction of Administrator Jane Lubchenco, it has become the official policy of the National Oceanic and Atmospheric Administration to encourage the implementation of catch shares.
The impacts are severe to fishing communities with families suffering from immeasurable harm. Day by day, there is another job lost, another foreclosure, another household distraught.
On November 5, 2010, Massachusetts Governor Deval Patrick submitted a report to Secretary Gary Locke providing the scientific statistical data requisite to increasing fishing allocations, information requested by the Secretary as a means for the US Department of Commerce to enact emergency powers that would allow for such increases. This report, prepared by the Division of Marine Fisheries and the University of Dartmouth, indicates that an additional 14,500 metric tons of ground fish (such as flounder and cod) can safely be brought to market.
Congressman Barney Frank has been instrumental in focusing Administration attention on these issues and in pressuring Secretary Locke to respond to the Governor's request.
The increases requested by the Governor could help stabilize the economic collapse of the fishing industry. But to date, the agency has been silent. There is no sense of urgency and the complacency continues to cripple the ground fish industry.
Fishing communities will not accept this silence and demand to be heard.
At 2PM on December 9, 2010, as part of the New Bedford Mayor's Ocean Fisheries Council meeting, the human element will become the focus. Fishermen greatly affected by the regulations will tell their stories and explain the devastation first hand. Economic impacts will be presented and a call to the Secretary for action will be made.
Mayor Lang emphasized the need for action, "These regulations are having a dramatic adverse impact on fishing families and communities in New England and along the East Coast. NOAA is acting as if they are dealing with proofing mathematical equations, not a human crisis. It is time for the Secretary to act and ensure we do not lose the necessary support infrastructure, and that we preserve fishing families, fishing culture and heritage in our communities."
The Mayor has also called for an investigation of the regulatory process by the Inspector General's Office as a result of the consistent lack of regulatory transparency and the recently published scathing report on the law enforcement branch of NOAA.
Background documents will be disseminated to the media including biographies on testifying fishermen, details of the Governor's report, and economic impact analysis.
New Bedford is the most valuable fishing port in the nation, measured in terms of value of catch landed.
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BACKGROUND DOCUMENTS
BIOGRAPHIES OF FISHERMEN SCHEDULED TO SPEAK
Antonia Pereira
Antonia Pereira has been a fisherman for the past 36 years. He moved to America from the mainland of Portugal at the age of 16 years old. Perusing the American dream he worked as a deckhand, mate and then captain of a dragger for five years and then purchase the F/V Blue Sea's II. He fished with that vessel for twenty five years, and earned a good enough living to send his two children to college. Today his vessel is tied up at the New Bedford docks, unable to fish because of the small allocation that he received under the new catch share system. Last year, he was able to make a good living catching skate wings (250,000.00 lbs) but the new Amendment 3 Skate Wing Plan only allows him 500 lbs per trip. A good example of the absurdity in the new regulations is the one species on which he was given a large allocation. Based on his history, he was allocated a large amount of haddock under the new system, however the regulations implemented concurrently with the new system have steep penalties for overfishing an allocation. To catch haddock while avoiding all other species requires a special separator trawl. A seperator trawl requires high horsepower. Mr. Pereira's vessel doesn't have the necessary horsepower so he is no longer able to catch haddock.
Tony was forced to sell his quota to a large horsepower vessel leaving his crew members, Fernando Floha, Manuel Mattos and Laorinho Baltacer unemployed, and his American dream tied to the docks in New Bedford.
Jim Keding
Jim Keding is a fisherman from Plymouth who purchased a fishing vessel several years ago after requesting and receiving from NOAA a letter outlining the vessel's catch history. When NOAA allocated quotas for this year, they based fishermen's shares on vessel catch history. Mr. Keding has been fishing for 27 years. Last year Mr. Keding caught 73,000 lbs. of fish, and this year he was allocated 15,000 lbs. When Mr. Keding complained that his allocation did not reflect the history on his boat as outlined in the letter he was sent by NOAA, he Keding was advised that a previous owner of his vessel had sold the boat but kept his history, so the catch history described in their earlier letter – on which he based his purchase decision – was accurate but not valid for the purposes of allocation. As a result, Mr. Keding's allocation for the current fishing year was set so low that he cannot earn a living. Mr. Keding raised his dilemma to National Marine Fisheries Chief Eric Schwaab at the Standard-Times forum on November 9th. Administrator Schwaab promised to look into the matter, but so far his efforts have resulted in only another letter from NOAA explaining in greater depth why their letter outlining the boat's history was simultaneously accurate but not relevant. Senator John Kerry's office is currently working with Mr. Keding in an effort to redress his situation.
Carlos Rafael
Carlos Rafael, nicknamed "The Codfather" for his stature in the New Bedford fishing industry, is originally from Corvo Island, Portugal. He immigrated to the United States in March 1968 and worked in textile mills for a decade, until starting his first business, Portuguese American Seafood, in 1978. The company struggled and soon closed. But Rafael began again, opening Carlos Seafood in March 1980. The company was so successful that by the end of the same year, Rafael was able to purchase his first boat. He built up the business over the years, combining long hours and business know-how. Today, he is the largest vessel owner in New Bedford,. Carlos Seafood supplies many wholesalers, has 316 employees and a fleet of 40 boats and 45 commercial fishing permits, Rafael believes he has achieved his American dream. Unfortunately, the new catch share program has forced him to downsize to eleven fishing vessels. He had to lay off 80 fisherman and borrow $1.2 million dollars in order to purchase quota from other fishermen to keep just eleven of his forty vessels fishing this year.
ECONOMIC JUSTIFICATIONS FOR EMERGENCY ACTIONS
These points are taken from a report prepared by the Massachusetts Division of Marine Fisheries and the University of Massachusetts at Dartmouth and submitted to Commerce Secretary Gary Locke by Massachusetts Governor Deval Patrick on November 9, 2010.
This report demonstrates that the transition to catch shares (sector management) under Amendment 16 to the Northeast Multispecies Fishery Management Plan caused unforeseen shifts in the distribution of quota (and income) resulting in $21 million in direct economic losses and forgone yield of $19 million for the Massachusetts groundfish fishery.
Catch share management programs, when designed correctly (catch share systems as with any market based system require significant institutional support for information, transparency, secondary markets, and in the case of highly regulated resource use, monitoring the effects on participants), may help to prevent overfishing, eliminate the race to fish, reduce overcapacity and bycatch, and improve economic efficiency. However, catch share programs may also result in the consolidation of fishing effort, reduce community involvement in local fishing, decrease access by small-scale fishermen to local fishery resources, and create barriers to entry into the fishery by increasing the demand for capital to participate.
While the National Oceanic and Atmospheric Administration's review of landings and revenue data available for the first five months (May-September) of the 2010 fishing year shows potential economic health in the ground fishery as a whole, aggregating the data masks significant economic impacts that are happening to individual fishermen or classes of permit holders at the local levels. In addition, revenue alone, is not a sufficient indicator of economic performance as it does not include costs.
The SAFIS data show that total revenue from all species remained roughly constant from 2005 to 2009 at about $40 million for the first five months (May through September) of each fishing year. Adjusting for inflation using the CPI-U, total revenue fell by about 15% over this period.
During the first five months of the 2010 fishing year more than half of the fleet (253 vessels) had not fished at all, collecting zero fishing revenue from landings of any finfish.
In addition to an increase in the number of inactive vessels, the number of vessels that earned more than $300,000 for this period in 2010 increased from 21 vessels to 41 vessels. These forty-one vessels account for roughly 55% of the total revenues. Stated in different terms, the share of total revenues earned by the top 10% of vessels increased from 57% of the total in 2009 to 64% of the total in 2010. Conversely, the share of total revenues earned by the bottom 75% of vessels decreased from 20% in 2009 to 12% in 2010. This is indicative of consolidation.
The relatively narrow distribution of ACE that resulted from the allocation, based only on catch history (1996-2006), has caused a substantial number of fishermen who were active in the fishery in 2009 to become insolvent. This is due to the fact that their 2010 allocations are well below their 2009 catches and to varying degrees,. It appears that for many vessels the reduced allocation is below a level that would allow them to break-even.
For the intended economic efficiencies and profitability of catch shares to be realized as forecasted in Amendment 16, a high level of quota movement would need to occur from those who were allocated below a break-even point to those who were close to or above the break-even point. For this to happen there would have to be an extraordinary level of liquidity within the fishery. A large number of previously active participants would have to be capable of freezing or liquidating their fishing operations and leasing their quota to someone else. What was not adequately studied (if at all) was the capability of the fishery to do this. The result is a non-functioning market for trading and leasing quota.
Previously (2009) active fishermen are paralyzed by the lack of quota available for lease because it is not easy to liquidate a vessel and all the associated financial obligations related to a small fishing business. It is not financially feasible for these small businessmen to simply lease their quota to cover expenses let alone earn a living.
The market crafted by government regulation has failed to develop as predicted by Amendment 16 to the economic detriment of the industry.
Only individuals who have secured enough of the initial allocation are able to rationalize the high lease costs by cost averaging, yet they are working at unsafe margins due to a market that is financially incapable of leasing for less. Such market conditions may reduce industry participation to levels too low to maintain current dimensions of fishing communities and infrastructure.
The current ACLs pose substantial economic costs and losses to fishing communities (NEFMC 2009, NOAA 2010)