By Richard Gaines
***This is a corrected version of this story. In the initial version, The Nature Conservancy was misidentified.
As the groundfishery approaches its partial transformation to a catch share economic system based on hard catch limits, permit banks are forming to buy and broker rights to the shares of the harvest.
These shares' value are largely determined by the size of the total catch limits — issues that remain heatedly debated by industry interests and the New England Fishery Management Council.
Far ahead of the curve is Gloucester, which has the region's bank of unmatched capitalization, nearly $13 million, while a Cape Cod group is gaining ground and has set a goal of $10 million in permits.
In Maine, the state itself is in the process of forming a permit bank, while a small organization, the Penobscot East Resource Center is also organizing a permit bank in concert with the non-governmental organization, the Nature Conservancy.
Meanwhile, the Cape Cod Fisheries Trust, the permit bank for the Cape Cod Commercial Hook Fishermen's Association, last month received a $500,000 grant from the Walton Foundation, the philanthropy of Wal-Mart.
But the trust, headed by Paul Parker, still has a long way to go to match the permit capital in the bank here created by Vito Giacalone, the industry innovator and co-founder of the Northeast Seafood Coalition.
The Gloucester Fishing Community Preservation Fund, obtained its capital in a lump sum as mitigation for the decision by the state to site a liquefied natural gas terminal on a rich fishing and lobstering site on the horizon as seen from the harbor, and is unrelated functionally from the coalition.
By its charter, the fund may do business only with local fishing interests.
The prototype permit bank has been lauded as essential for providing additional days at sea to fishermen seeking to remain active after their days at sea were halved and halved again by the National Marine Fishery Service in recent years to achieve rebuilding targets in the Magnuson Act.
The Cape Cod Fishery Trust has set a goal of $10 million in permits by 2011 from loans, contributions and foundation grants, like the one from the Walton Foundation. The 2008 annual report was that $2.3 million had been raised.
The newest effort at creating a permit bank involves a joint effort of the federal government and the state of Maine.
The National Marine Fisheries Service has announced its intention to create a novel form of a bank in its draft of Amendment 16.
That next phase of governance for the groundfishery, which will split the industry between voluntary cooperatives known as sectors that will fish under catch shares — the catching rights that will be bought, sold, borrowed and traded among the groups — and the rest of the fishermen who chose to remain on their own fishing under more stringent rules of effort control and days at sea.
The idea of creating a bank for the fishermen in Maine came from the state.
"We are still negotiating with NMFS on the memorandum of understanding and hope to have it signed before the end of the month," said Terry Stockwell, director of external affairs for the Maine Department of Marine Resources.
The state has $1 million from a previous appropriation from NMFS, and according to government sources, intends to use that sum to begin buying permits.
Sources said the impetus for the Maine initiative was the increasing tendency of Maine boats to skip down to Gloucester to unload and sell their catches rather than keep them in Maine ports.
"I am in hopes of receiving the funds by this spring, buy the appropriate permits and be able to offer some economic relief to the boats this upcoming fishing year," said Stockwell.
"We are aware of the permit bank provision, it is a provision we'll look at closely," said Paul Diodati, Massachusetts director of marine fisheries. "We plan to give it full consideration and find out if or how it may benefit the Commonwealth. We plan to publicly comment on it by Jan. 20.
"Are we driving price up? No," said Parker of the Cape Cod Fishery Trust. He said the aggregate market of (groundfish permits is approximately $200 million, too much in his view to be inflated by the combined purchasing power of the existing and potential banks for the region.
He estimated that prices have been increased by about 20 percent since 2002, a trend Parker attributed to the fierce devaluation of permits via the continued cutting of the face value for days at sea. As they were reduced, demand for permits was artificially created.
Parker said he views the current market as "somewhat frozen," owing to a "disconnect between the asset in days at sea and quota in catch or catch shares, which remains still somewhat in flux.
The beginning of business in the split industry — catch share/sectors and common pool boats — is scheduled for May 1.
Richard Gaines can be reached at 978-283-700, x3446, or via e-mail at rgaines@gloucestertimes.com.
