Scallop deal seen as sign of catch-share trade

Struggling groundfish interests have agreed to give the thriving scallop industry about 200,000 pounds of yellowtail flounder from its allocation for 2010 for future considerations.

It was a deal — consummated last week and based on trust the scallopers will compensate groundfish interests financially for their sacrifice — that will allow the scallopers to take advantage of a very large windfall, according to key industry involved in the secret business discussions that occurred in Gloucester and New Bedford.

But the arrangement — a trade of allocation for cash within the industry — is also being viewed as an example of how the catch share system, which commodifies the common wealth of the seas, can work. Advocates of the system argue that catch shares will help align capital and conservation interests.

"I have pledged to both parties that we will discuss and work together," said Richie Canastra, co-owner of the Whaling City Seafood Display Auction in New Bedford, and a leading power in the New England fishing industry.

Canastra has encouraged the twin capitals of the Ocean Nation — Gloucester and New Bedford — to hold together in struggles with the National Marine Fisheries Service. And he has pushed cooperation from his operation in New Bedford and via his support and involvement in the Northeast Seafood Coalition organized in Gloucester.

Vito Giacalone, the Gloucester-based coalition's business director, was the negotiator for the groundfishing interests, while a number of figures, including a representative of the Fishermen's Survival Fund — the leading scallop industry group, negotiated on behalf of the scallopers' interests.

Because the yellowtail is so much more valuable to the scallopers as bycatch, Giacalone called the deal a "no-brainer."

He said he was confident the scallopers will be true to the spirit of the trade and complete the transaction.

No dollar figure was agreed to, Giacalone said.

The negotiated deal cleared a key political obstacle and opened the door for the New England Fishery Management Council to dramatically reverse itself and boost the scallop quota for the coming year by enough to represent $40 million in boat revenue.

The highly charged reconsideration vote by the council is expected to produce more than $150 million for scallopers and portside businesses from Maine to the Carolinas. The loss to the groundfishing boats will be about $200,000.

Yellowtail, a prized flatfish that tends to concentrate in scallop beds, and is an unavoidable bycatch pulled up in scalloping dredges or trawls, so the scallop boats needed the yellowtail allocation to take advantage of the increased allocation.

Without the trade, how to allocate yellowtail was considered a sticking point in the reconsideration of the earlier scallop allocation at just under 42 million pounds. The agreement was communicated to the council before it took up the question of reversing a November decision and giving the scallop industry a new allocation that represent an increase of some 14 percent.

The council's Science and Statistical Committee had said the stocks could sustain the higher catch.

In the push for reconsideration, the industry mobilized an unprecedented campaign of political pressure that included public discussion of calling for the ouster of the council president, John Pappalardo, and a private sitdown for Pappalardo in the office of Gov. Deval Patrick. Cries of foul over the initial, lower limit had also come from Congressman Barney Frank, New Bedford Mayor Scott Lang and others.

In the end, Pappalardo decided to allow his council to rethink its November decision to impose the tighter catch allocation on the industry.

Scallops, studies show, are neither overfished or subject to overfishing, and are the nation's No. 1 cash fish product, and the prize that has made New Bedford the nation's No. 1 cash fishing port.

Groundfishing, which is centered here in Gloucester, has had a significantly tougher time of it lately, struggling while the stocks of the Gulf of Maine recover.

The willingness of the groundfishing interests to let go of yellowtail to the scallopers was a newfound sign of cooperation between typically competing interests — Gloucester and New Bedford's. It was also an early example of how catch shares, a controversial industry model advanced by the Obama administration, can facilitate trading of allocation to find its highest value.

Aligning capital and conservation interests is the catch share mantra of the Environmental Defense Fund, which has been pushing catch shares for many years and now has an alumna — its former vice chairwoman, Jane Lubchenco — ensconced as head of the National Oceanic and Atmospheric Administration.

Lubchenco came to office preaching the gospel of catch shares as a conservation tool and a means of creating stronger fishing economy. Yet the dynamics of the system — based on commodity futures trade principles, as the yellowtail/scallop negotiations exemplify — also tend to encourage the accumulation of capacity in a few large hands and deep pockets while winnowing out the weaker participants.

Negotiations on the yellowtail deal occurred in the weeks and hours leading up to the council meeting.

No final deal was set by the time the meeting began Wednesday morning, but with "good faith" trust in the scallopers, Gloucester's Giacalone — negotiating for the roughly 300 members of the 13 groundfishing sectors or business cooperatives organized to fish in a new catch share system starting in May — told the council his side had agreed to surrender the yellowtail.

"Across the fishery," said Giacalone, "yellowtail as bycatch is much more valuable than as catch. You get $40 million worth of scallops for the same yellowtail that is worth a $1 a pound (for 200,000 pounds) caught by groundfishing boats."

Richard Gaines can be reached at 978-283-7000, x3464, or via e-mail at rgaines@gloucestertimes.com.

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