Have opportunities or barriers to entering the fishery changed?
Indicators: Access and Exclusion Effects
Prior to implementation of the Northeast Multispecies Sector Program, access to the groundfish fishery tightened in 1994 with implementation of a limited access program, and some fishermen left the fishery. Similarly, when the Northeast Multispecies Sector Program began in 2010, some additional fishermen may have chosen to leave the fishery. In the initial allocation of the catch share program, a majority of shares for several allocated stocks were concentrated among the top 25 quota holders. From 2010 to 2011, there was a substantial increase in the number and volume (live pounds) of between-sector transfers of Annual Catch Entitlement (ACE), suggesting that fishermen were increasingly using the quota market to better align their allocated portfolio with their expected catch. Since 2011, the number and volume of transfers have fluctuated but continue to exceed the 2010 values. Permit banks are being used to preserve fishing opportunities for fishermen who may otherwise be disproportionately affected by the consolidation of fishing effort that followed implementation of the Northeast Multispecies Sector Program.
This indicator shows the degree to which people seeking to fish have access to fishing quota and how evenly catch shares are distributed among the fleet.
Baseline: Before Catch Share Program
In response to stock declines and widespread overfishing, the government restricted access to the groundfish fishery in 1994 through a federal license limitation program (Management Framework). Access to the fishery under that program was determined by a combination of vessel characteristics, including length, horsepower, and gross tonnage. Each limited access Northeast multispecies permit has maximum upgradeable baselines for each of those characteristics. Permits must be renewed annually, and they are transferable subject to the baseline upgrade limits. A permit is normally registered for use with a particular vessel at the time the permit is issued, renewed, transferred, or replaced. In addition, a days-at-sea (DAS) system to limit fishing opportunities was phased in over several years (Management Framework). The DAS system limited the number of days each permit could fish for groundfish in a year. Amendment 13 (2004) implemented a DAS purchase and leasing program allowing vessel owners to consolidate DAS from two or more vessels onto one.
During Catch Share Program
After the Northeast Multispecies Sector Program started in 2010, the limited access Northeast multispecies permits and baseline upgrade limits remained in effect. However, the program allowed all owners of vessels issued a permit to opt out of the DAS system by voluntarily joining a sector. Each permitted vessel that joins a sector is allocated a potential sector contribution (PSC) based on its fishing history (Northeast Multispecies Sector Program). Persons who do not currently own a fishing vessel, but who retained the fishing and permit history of a vessel, are also allowed to participate in sectors, provided they have a Confirmation of Permit History.
In the initial allocation of the Northeast Multispecies Sector Program, the majority of PSC for nine allocated stocks was concentrated among the top 25 quota holders (see chart above: PSC Distribution). The most concentrated stock was Georges Bank winter flounder, for which three entities controlled 36 percent of the total PSC. The least concentrated were Gulf of Maine cod and Southern New England/Mid-Atlantic yellowtail flounder, for which the top three entities controlled 12 percent and 11 percent, respectively.
One possible reason for the uneven distribution of PSC is the initial allocation formula used when the Northeast Multispecies Sector Program began. PSC allocations were based on fishermen’s catch histories during the time period 1996-2006 (Northeast Multispecies Sector Program). Individuals who chose to purchase additional days-at-sea after they became transferable in 2004 increased their landings, which subsequently resulted in higher catch histories (and PSC allocations) during implementation of the Northeast Multispecies Sector Program; those who leased out days-at-sea lowered their catch histories and PSC allocations.
Monthly ACE Transfers
Annual catch entitlement (ACE) may be transferred between sectors, while PSC may be transferred only within sectors (Northeast Multispecies Sector Program). Although ACE is pooled within sectors by regulation, most sectors assign catch allowances to member vessels based on PSC allocations. The buying and selling of ACE between sectors occurs almost universally at the vessel or vessel-affiliation level. ACE transfers must be reported to NMFS, but PSC transfers do not.
While it took time for a market for ACE to develop once the Northeast Multispecies Sector Program was implemented, transfer activity was fairly steady after mid-August of 2010 (see chart above: Monthly ACE Transfers). In 2011, the number of between-sector ACE transactions was about 44 percent higher than the number in 2010. Meanwhile, the total number of pounds sold in the market for ACE was about 14 percent higher. The increases in the number and volume of quota transfers suggest that fishermen were increasingly using the quota market to better align their allocated PSC portfolio with their expected catch. Many transfers involved the trade of one stock for another, such as a trade of Gulf of Maine cod in exchange for Georges Bank cod. Since 2011, the number and volume of transfers have fluctuated but continue to exceed the 2010 values.
Annual ACE Transfers by Stock
The volume of ACE transfers for individual stocks has also varied, with most stocks showing a decrease in transfers in 2013 (see chart above: Annual ACE Transfers by Stock). The decreases are likely a response to lower annual catch limits (ACLs) across a number of key stocks (Northeast Multispecies Annual Catch Limits).
ACE Price as a Percentage of Ex-vessel Price
NMFS estimated transfer prices for the allocated stocks. For some stocks, such as Georges Bank haddock, prices for ACE were at or near zero. The ACLs for those stocks were relatively high, but it was difficult for fishermen to harvest them because of low allocations of co-occurring stocks (Groundfish Landings). ACE of species with low allocations, such as cod and yellowtail flounder, traded at prices that at times exceeded half of the species’ ex-vessel prices.
Transfer data suggest that larger vessels were more likely than smaller vessels to be able to afford to buy ACE for non-target or constraining (choke) stocks that allowed them to access target species. Landings and allocation data by vessel size category point to a broad shift of ACE from smaller to larger vessels (Groundfish Landings). The smallest vessel size category (less than 30 feet in length), most likely inactive skiffs, was a primary source of leased ACE. Additionally, permits with a Confirmation of Permit History were also a significant source of ACE. One indication of the broad shift of ACE from smaller to larger vessels is that while the largest vessel size category (more than 75 feet in length) was allocated 37 percent of all ACE in 2013, this size category caught 53 percent of total groundfish catch.
Permit banks are being used to preserve fishing opportunities for fishermen who may otherwise be disproportionately affected by the consolidation of fishing effort that followed implementation of the Northeast Multispecies Sector Program (Number of Active Vessels). For example, several New England states received grant awards from NMFS to establish banks of limited access Northeast multispecies permits. Permit banks have also been established by nonprofit organizations through grants, loans, and mitigation funding. By 2013, permit banks owned more than 95 limited access Northeast multispecies permits.
Each permit bank has a unique mission, but they generally exist to help provide fishing opportunities for specific segments of the industry (e.g., specific ports, gear types, vessel sizes), with a larger aim of providing stability for the industry and fishing communities. Typically, the ACE and/or DAS associated with a bank’s permits are offered at below-market-rate prices to fishermen who intend to actively fish for groundfish and meet other eligibility criteria established by the permit bank. For example, the Maine Groundfish Permit Bank requires that the recipient (buyer) of ACE be a member of a sector based in Maine, operate a vessel less than 45 feet in length, and reside in or operate their vessel from a community with no more than 30,000 residents. In contrast, The Nature Conservancy/Island Institute Community Permit Bank sells ACE to vessels of all sizes, gear types, and ports, with a focus on supporting collaborative research or gear configurations that are more selective than required.
Demarest, C. and A. Kitts. 2013. Trends in Groundfish Fishery Concentration, 2007-2013: Draft. Prepared for New England Fishery Management Council. Newburyport, MA.
Groundfish Plan Development Team. 2013. Groundfish permit banks. New England Fishery Management Council. Newburyport, MA.
Kitts, A. et al. 2011. 2010 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2010-April 2011), 2nd Edition. NMFS Northeast Fisheries Science Center Reference Document 11-19. Woods Hole, Massachusetts. Available online: http://www.nefsc.noaa.gov/publications/crd/
Mendelson, M. and J.Gribbon Joyce. 2011. New England Groundfish Crew Rapid Assessment Summary Report. NMFS Northeast Fisheries Science Center. Woods Hole, MA.
Murphy, T. et al. 2012. 2011 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2011-April 2012). NMFS Northeast Fisheries Science Center Reference Document 12-30. Woods Hole, Massachusetts. Available online: http://www.nefsc.noaa.gov/publications/crd/
Murphy, T. et al. 2013. 2012 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2012-April 2013). NMFS Northeast Fisheries Science Center Reference Document 14-01. Woods Hole, Massachusetts. Available online: http://www.nefsc.noaa.gov/publications/crd/
National Marine Fisheries Service and Maine Department of Marine Resources. 2010. Memorandum of Agreement between NOAA’s National Marine Fisheries Service, U.S. Department of Commerce and Maine Department of Marine Resources for the Administration of a Pilot Permit Bank Program.
New England Fishery Management Council. 2012. Amendment 18 Scoping Document. Newburyport, MA.
Updated: October 2015
© 2017 MRAG Americas, Inc. All Rights Reserved.