, Gloucester, MA

June 29, 2010

Resistance on the waterfront

Catch shares proving to be very hard sell

By Richard Gaines
Staff Writer

For a decade, the leading advocate for a national catch share program for the fishing industry has been the Environmental Defense Fund, and the EDF's voice and face has been celebrated marine biologist Jane Lubchenco.

When President-elect Obama tapped Lubchenco to head the National Oceanic and Atmospheric Administration and take stewardship over the resources of the seas, she was in a position to take her own advice, and she did.

The advocate became the administrator, and an ardent, if lonely crusade began to re-engineer the nation's oldest industry.

Still largely unmodernized, pre-global in scale, the fishing industry has continued to operate under archaic principles of profit-sharing between captain and crew based on handshake contracts and a shared desire to make a living from the sea.

The fishing people saw little reason to change, as Lubchenco and her supporters in EDF have learned.

The effort to impose market principles befitting big business has left the Obama administration alienated from its political base around the working waterfronts and, except for EDF, from much of the environmental sector as well.

Catch shares have proved a very hard sell.

• • •

A seminal policy paper published after the election of President Obama, primarily sponsored by EDF and written by Lubchenco and a team of like-minded scientists, asserted that "catch shares, regardless of their form, have been proven to restore economic and environmental health to ocean fisheries."

The paper explained that catch shares transform wild resources that have traditionally been commonly owned into tradeable catching rights. The value of those shares, no matter what their size, increases as the value of the fishery increases, encouraging conservation.

An environmental nonprofit with an affinity for market-based solutions, EDF sees catch shares as a virtual panacea for the troubles of the fisheries.

"Catch shares prevent, and even reverse the collapse of the world's fisheries," wrote Lubchenco and her fellow authors, including EDF Chairman N.J. Nicholas Jr., the former president of Time Inc.

The proclaimed payoff for the commitment to catch shares was conveyed in the title on their paper, "Oceans of Abundance."

Even with Lubchenco at the head of NOAA, the EDF campaign has failed to sell catch shares to those they are supposed to benefit. Congressional hearings have been contentious and anti-catch share sentiment helped unify the commercial and recreational fishing sectors, powering the "United We Fish" rally in Washington, D.C., last February.

On catch shares, EDF, Lubchenco and the Obama administration are largely on their own.

Even other green activist groups, such as the Pew Environment Group, Ecotrust and Food & Water Watch, have expressed doubts about the catch share system, warning that it can destabilize coastal fishing cultures that have survived for centuries.

The Pew Environment Group, part of the influential, multi-billion dollar foundation, the Pew Charitable Trusts, organized a teleconference last November to challenge EDF and Lubchenco's catch share policy.

Pew urged the Obama administration to "go slow."

"Do not make catch shares the default management system," said Pew's director of fisheries policy, Lee Crock. "One size fits all is inappropriate and ignores local variability."

At the conference, Zeke Grader, representing a group of West Coast commercial fishing organizations, warned against allowing "free market ideologues to run the show."

Asked whom he meant, Grader said it was EDF.

• • •

Resistance to catch shares has focused on the threat of hyper-consolidation of the fishing industry as a few investors and well-heeled corporations displace small-boat owners, as big agribusiness has displaced family farms.

The Environmental Defense Fund itself has touted the opportunities of catch shares for investors.

David Festa, a former Clinton administration official who is now a West Coast vice president for EDF advised a group of investors at a conference last year that profits of as much as 400 percent could be expected from catch shares.

"It's not telecom money, but it's real money" was Festa's memorable quip. Lubchenco and Festa are longtime close colleagues and sometime op-ed co-authors.

Fishermen and their allies fear the impact of Wall Street.

At a congressional hearing on catch shares this spring, Congressman Peter DiFazio, D-Oregon, said, "The last thing I want is Goldman Sachs buying up all the shares of a fishery in three years, and (having) derivatives of fishery shares being sold on Wall Street."

• • •

Investment has modernized fisheries where catch shares have been imposed, but at a cost.

NOAA's own figures show that after 20 years as the nation's prototype catch-share fishery, the surf clam and ocean quahog fishery in the Mid-Atlantic States has seen its fleet shrink by 74 percent for surf clams and 40 percent for quahogs.

The halibut and sablefish fisheries in Alaska, converted to catch shares in 1995, also showed hyper-consolidation.

Halibut boats were reduced by 70 percent and sablefish boats by 66 percent.

The Bering Sea's crab fisheries, made famous as "The Deadliest Catch" reality adventure TV series, have seen the number of boats fishing for two crab species reduced by 71 percent and 59 percent since 2005, when the wild race for crabs was brought under control via catch share principles.

The red snapper fishery in the Gulf of Mexico, converted in 2007, has exhibited a relatively minor 14 percent consolidation.

The complicated — and in the eyes of some, unfair — rules used to determine the size of catch shares are another cause of concern.

In the New England groundfishery, the benchmark selected last year was catch history, which meant fishermen who had fished the hardest and longest were rewarded and those who contributed to the rebuilding effort by fishing less or for other kinds, such as squid, monkfish, skate and the like that were doing better, were penalized.

• • •

Al Cottone fishes out of Gloucester by himself in a 60-year-old wooden trawler. He reports having been given an allocation of 26,000 pounds of cod, for the first year of catch shares.

That's barely one-third the weight Cottone landed last season.

His undoing was the fact that he did not fish for some of the years used to determine quota. Others were undone by choosing to lease out days on their permits, which were voted to count for naught.

Still others were undone by bad record-keeping. NOAA has acknowledged a systemic failure to keep accurate records, in some cases dating back to 1996. The agency has promised to attempt to fix the problem by 2011.

Through it all, Lubchenco rejected pleas for more time to make better-engineered catch share systems, with provisions that protect community interests.

• • •

The concern over the changes threatened by catch shares is also for the way of life that the American fishing industry has sustained.

Today, in the pre-modernized ports of New England, the predominant scale of the fishing businesses is mom-and-pop.

The near universal labor management arrangement remains the archaic profit-sharing system.

As a rule, catch share fisheries devolve into a smaller number of players holding a larger share of the fishing capacity.

Fewer but better-paying jobs is the carrot that Lubchenco and EDF are offering in exchange.

Soon after taking office and challenging the federal regional council to complete work on its catch share program for the New England groundfish industry, Lubchenco's office said she believed a "significant fraction" of the boats needed to be removed.

Losses are expected to be catastrophic in Gloucester because of a reduction in the size of the catch its fleet must share, a development triggered by related requirements in the Magnuson-Stevens Act, which regulates the industry.

The act mandates that overfished stocks be restored to sustainability within a 10-year time frame — 2014 is the most common deadline year — and that hard catch limits be imposed on those stocks.

NOAA has interpreted the law to require it to ratchet down the allowable catch of most stocks of fish, even as the stocks recover rapidly after a decade of conservation.

Vito Giacalone, policy director of the Northeast Seafood Coalition, worries that small fishermen won't survive to see the day when fishing stocks are declared recovered and will be forced to sell their shares of the catch when they are worth little.

The result, he said, could be a "conversion to share-cropping," with fishermen who once owned their own businesses working for corporate masters who never go to sea.

Some experts have expressed similar concerns.

Julia Olson, an anthropologist with the NOAA Science Center at Woods Hole, published a paper last summer on the social impact of consolidation from catch shares, It found, among other things, "decreased quality of life, structural disadvantages to smaller vessels and firms, dependency and debt patronage, decreased community stability, and loss of cultural values."

One widely cited peer-reviewed study from 2009, by Evelyn Pinkerton and Danielle Edwards, "The elephant in the room: The hidden cost of leasing (catch shares)," warns that "independent owner-operators of fishing vessels or crew members will be led into economic dependence on absentee owners as quota shares increase in value and small investors are excluded."

In March during her first public appearance in Gloucester, Lubchenco was challenged by Mayor Carolyn Kirk on the expected downsizing of the fishing fleet.

"We're looking at losing 80 percent of the fleet," Kirk said. "We need you to appreciate that. (Catch shares) strike fear in the hearts of everybody in the city of Gloucester."

Lubchenco fudged a bit but did not back off. "I don't know what the right size of the fleet is," she answered.

Richard Gaines may be contacted at 978-283-7000 x3464 or