The $100 million federal fishing boat and permit buyback proposal by Sen. John Kerry and colleagues drew signs of support Friday as a desperation parachute for businesses pushed into insolvency by regulatory policies.
But fishermen and industry analysts at a City Hall meeting Friday also cautioned that the program could accelerate consolidation of the fleet. That would leave Gloucester, the region's top groundfishing port, beyond the point of diminishing returns, with insufficient traffic to support the infrastructure, an ice company, the brokers, fuelers, trucks and repair yards.
"We're very concerned about the working waterfront," said Valerie Nelson, speaking on behalf of the group called Citizens for Gloucester Harbor. She was part of some two dozen fishermen and activists who joined the City Hall session with the city's state lawmakers, Rep. Ann-Margaret Ferrante, and state Sen. Bruce Tarr.
Nelson expressed concern that the independent fishing industry would suffer the same fate as the family farm. The new catch share system, which distributes a total catch volume among participants in the industry, was written without any limits or controls on the accumulation and acquisition of quota, leaving open the door to investor-speculators.
"We all need to be cautious; terms (of a buyback) are not defined yet," said Jackie Odell, executive director of the Gloucester-based Northeast Seafood Coalition.
"This $100 million could be on a step on the way to disaster if people are desperate enough," said Tarr.
U.S. John Kerry's office has emphasized that the buyback proposal, introduced in the form of a letter to President Obama more than a week ago, was meant to be a starting, not ending point in crafting a relief package for New England's fishermen.
Vito Giacalone, the seafood coalition's chief analyst, said there is a potential trap in using such a large sum to buy out of the smaller players — single boat owners with little allocation on their permits. They abound within the groundfish fleet, and while no hard numbers were available, most informed observers said that is the model for the majority of the fleet.
The federal buyback proposed by Kerry and seven colleagues from New England and New York state would reduce the number of fishermen without affecting the gross allocation of fish, which, under Amendment 16 and the Magnuson-Stevens Act, is now set by the government and distributed as shares of different sizes to active participants in the fishery.
Using federal money to eliminate boats means that, with every buyout, the survivors would stand to receive ever larger relative allocations, and benefit from a shift of equity within the fishery without even having to purchase it on their own by the kind of transaction the catch-share system anticipates, Giacalone said.
Through the catch share system. the New England groundfishery, the first economic industry in the New World, is being run as a limited-access, government-set commodities market.
The Environmental Defense Fund, the lead advocate for the catch share system and the organization where National Oceanic and Atmospheric Administration head Jane Lubchenco honed her catch-share stand as board vice president, has advocated using market incentives to strengthen and modernize fisheries.
In that approach, Giacalone and others noted, the federal buyback fund could be used to fuel consolidation of allocation in an ever-smaller number of hands.
Giacalone noted that the buyback approach could be made to work to reinvigorate the industry if structured differently. He explained that many fishermen in recent years purchased additional days at sea permits when effort control was the business model used by the government to control effort.
When the New England Fishery Management Council last year adopted the catch share approach, it chose 10-year catch histories to determine the allocation or share that went to each fisherman. That made days-at-sea permits next to worthless.
Giacalone argued that compensating fishermen for the devaluation of their investment was justified as government compensation for the destruction of the value of the investment.
By offering to buy up the days-at-sea permits, the government would be recapitalizing the industry.
"Keep fishermen in the game, buy days-at-sea permits," Giacalone urged.
Lubchenco has conceded that her catch share plan will see a "significant fraction" of the fleet removed.
Industry analysts counter that, with the total allowable catch now set by regulators, the government has no legitimate interest in culling down the size of the fleet, and that at some point there could be so few boats the support businesses could collapse.
Consolidation into the hub ports of Gloucester and New Bedford from smaller ports is already underway. Landings statistics published this week indicate that the bigger ports are handling a larger percentage of the total catch.
Odell told the City Hall gathering Friday that the West Coast groundfishery, also in the midst of a catch share consolidation, is already showing the signs of hyper consolidation that worries fishermen and industry leaders in New England and the Middle Atlantic states.
Richard Gaines can be reached at 978-283-7000, x3446, or rgaines@gloucestertimes.com.
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