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Has the financial viability of the fishery changed?

Indicators: Landings | Revenues

Key Findings

  • Since the mid- to late-1980s, there has been an almost steady decrease in groundfish landings because of increased fishing restrictions and poor stock recruitment due to overfishing and other factors.
  • The average annual landings of groundfish during the first five years of the Northeast Multispecies Sector Program were about 73 percent of the 20022009 average.
  • Under the catch share program, fishermen continue to harvest only a fraction of the annual allowable catches of many healthy stocks. Government and industry have taken steps to improve allocation utilization levels since the Northeast Multispecies Sector Program began.

Interactive Chart Story

Metrics

This indicator shows changes in groundfish landings, which affect the financial viability of fishing operations participating in the catch share fishery.

Analysis

Baseline: Before Catch Share Program

Starting in the mid- to late-1980s, there was an almost steady decrease in groundfish landings during the extended and project baseline years. Total groundfish landings during the five-year period from 2005 to 2009 were approximately 18 percent of the landings from the period between 1980 and 1984. The average annual landings from 2005 to 2009 of Atlantic cod, a species of historical importance in the fishery (History of Fishery), were around 13 percent of the annual landings from 1980 through 1984. The collapse of the Atlantic cod stocks in the Gulf of Maine (GOM) and Georges Bank (GB) shifted the fishery’s reliance onto other groundfish species, such as haddock and pollock. The percentage of the total groundfish catch represented by cod fell from 32 percent during the period from 1980 through 1984 down to 23 percent from 2005 through 2009. Reasons for the continued decline in groundfish landings include generally poor stock recruitment and increased restrictions on fishing. Throughout the baseline period from 2002 through 2009, the biomasses of six groundfish stocks in waters off New England were consistently in an overfished condition (Fishery Stock Status), resulting in ever-more-restrictive regulations. In turn, the supply of fresh, local groundfish became more unpredictable, causing local dealers and processors to seek a source that was more reliable, such as frozen imports.

Regulations designed to protect overfished species included a days-at-sea (DAS) program aimed at reducing fishing effort, increased mesh-size requirements, trip limits, and seasonal and year-round area closures (Management Framework). These regulations severely impeded the ability of fishermen to catch healthy groundfish stocks (Ratio of Catch to Quota). For example, management efforts and other factors led to a steady increase in the GB haddock stock biomass from the low levels during the early 1990’s (Fishery Stock Status). However, even though haddock trip limits were eliminated in 2004, fishermen caught just six percent (19.3 thousand mt) of the 322 thousand mt of GB haddock that NMFS determined could be sustainably harvested between 2006 and 2009. The inability of fishermen to catch the target TAC for haddock and other healthy stocks was likely due to management measures such as cod trip limits and other factors such as the seasonal availability of species, weather conditions, low market demand for some species, and changing ocean conditions that disrupted fish distribution patterns.

During the project baseline period, groundfish landings generally decreased for all vessel size categories. Most fishermen who operate small boats (less than 50-foot in length) typically do inshore, day trips only (Fishing Area by Vessel Size ), and the small boats based in ports adjacent to closed areas were especially disadvantaged because they could not fish safely beyond the closure boundaries. The Western Gulf of Maine Close Area was seasonally closed to groundfishing in 1994 to reduce fishing pressure on the GOM cod stock (Management Framework), and in 1998, the area was closed year round. In addition, rolling area closures (which cycle clockwise around the western Gulf of Maine from May to June) were established in 1998 to protect the areas of highest cod harvests. On the other hand, management measures such as trip limits and the DAS program that compelled fishermen to reduce their fishing range were more constraining for larger size vessels because of their greater production capacity. The result was that the percentage of the total groundfish landed by each size category showed no discernible trend during the project baseline period. Vessels 75-ft-and-over in length accounted for between 34 and 38 percent of total landings; vessels between 50-ft and 75-ft in length accounted for 34 to 42 percent; and vessels between 30-ft and 50-ft in length accounted for 21 to 29 percent. Groundfish landings by vessels in the smallest vessel size category (those less than 30 ft) were negligible.

During Catch Share Program

While trip limits, the days-at-sea (DAS) program and other management measures that restricted landings during the pre-catch share program period were lifted for sector vessels, other, often interrelated, factors led to a continuing decline in overall landings after implementation of the Northeast Multispecies Sector Program. The average annual landings of groundfish from 2010 through 2014 were approximately 73 percent of the average from 2002 to 2009. Goundfish landings by smaller vessels fell more substantially than larger vessels (Groundfish and Non-groundfish Catch by Vessel Size ). For the largest vessels, the amount of groundfish catch fluctuated but did not decline substantially. Landings and allocation data by vessel size category from 2010 through 2013 suggest a broad shift of annual catch entitlement (ACE) from smaller to larger vessels. On average, vessels 75 ft. or longer were allocated 37 percent of all ACE, but they caught 51 percent of the groundfish catch during that period. Those vessels, together with vessels in the 50-74 ft.-size category, were the primary net acquirers of ACE, while the smallest (<30 ft.) vessel size category, most likely inactive skiffs, was a primary source of ACE.

One reason for the decrease in landings was that the annual catch limits (ACLs) of many stocks have been lowered since the implementation of the Northeast Multispecies Sector Program (Annual Catch Limits). In 2008, for example, stock assessments suggested that the GOM cod stock appeared poised for recovery, but subsequent assessments using a new model and additional data found that the stock was still overfished. Between 2010 and 2017, the ACL for GOM cod was reduced by 94 percent (from 4,327 mt to 271 mt). Some fishermen received such little allocation that they harvested their entire quota in just a few days. The unprecedented cuts in the harvest limits of key stocks in the groundfish fishery led the U.S. Secretary of Commerce to declare a commercial fishery failure in the fishery for the 2013 fishing season (Cost of Fishery Management: Public).

During the first seven years of the Northeast Multispecies Sector Program the average ratio of catch to quota across groundfish stocks ranged from roughly 50 to 70 percent (Ratio of Catch to Quota). GB haddock accounted for a majority of the unrealized landings, with only about 15 percent (21 thousand mt) of the sector allocation being caught from 2010 through 2014. Assuming an average ex-vessel price of $1.46 per pound, an estimated $380 million worth of GB haddock that NMFS determined could be sustainably harvested was unutilized during the first five years of the catch share program. This foregone value exceeds the total revenue of the groundfish fishery during the 2010-2014 period (Financial Viability of the Fishery: Revenues). The reasons for the low percentage of quota caught are similar to those that restricted harvest in the pre-catch share program period. Two major reasons are discussed below in the context of the Northeast Multispecies Sector Program.

Decreases in ACLs for certain allocated stocks not only restricted the harvests of those stocks, they also constrained the harvest of stocks with high ACLs. In a fishery where populations share habitat and are often caught together, the stock with the lower ACL limits the harvest of the more abundant stock. GB haddock and GB cod provide an example of this interplay. In 2016, GB haddock, which was declared fully rebuilt in 2010, was assigned a ACL of over 51,000 metric tons, whereas GB cod, which is overfished, received an ACL of just 597 metric tons. Because haddock and cod may be caught together during the same trawl, sectors with haddock quota also have to hold yellowtail quota in order to account for the bycatch and assumed discards. Once a sector catches its entire ACE for a particular stock, it is required to cease all fishing operations in that stock area until it acquires additional ACE for that stock, which can be expensive or difficult to find (Access and Exclusion Effects and Cost of Fishery Management: Private). Any sector that exceeds its ACE in a given fishing year is subject to accountability measures such as a reduction in its ACE for the following year to account for the previous year’s overage (Northeast Multispecies Sector Program and Annual Catch Limits). To avoid these penalties fishermen in sectors limited by GB cod quota simply avoided catching GB haddock.

Decreases in allocation utilization have also been driven by market conditions. As noted above, there has been an overall decrease in both the trips and catch of sector vessels. As during the pre-catch share program period, an unstable supply of local groundfish leads dealers and processors to rely on imports of groundfish to meet their needs (Financial Viability of the Fishery: Revenues). This imported, flash-frozen product is less expensive and sometimes of higher and more consistent quality than fresh local groundfish, forcing local fishermen to sell their fish at discounted prices. The result is a self-reinforcing cycle: low prices from local dealers and processors make fishing for groundfish less profitable in comparison to other fisheries (Fishery Diversification) and result in fewer participants in the fishery, fewer trips per vessel, lower overall landings, and ultimately, low allocation utilization.

Attempts have been made to address the problem of underutilized stocks using the provision of the Northeast Multispecies Sector Program that allows NMFS to grant sectors regulatory exemptions that would provide sector vessels additional flexibility and improve their profitability (Northeast Multispecies Sector Program). In 2012, for example, NMFS approved an exemption allowing sector trawl vessels to harvest redfish using nets with codend mesh as small as 4.5 inches in order to enhance the opportunity to increase redfish harvest. Not all exemptions aimed at improving catches have been approved. For instance, in 2013, NMFS considered an exemption that would allow sector vessels access to portions of Closed Areas I and II in order to increase opportunities to harvest GB haddock. However, approval of the exemption was contingent on the willingness of sector vessels to carry industry-funded at-sea observers to record total catch from the areas. NMFS rejected the exemption, in part, because the fishing industry indicated that it would be unprofitable for it to participate in the exemption if it was required to pay for an observer on every trip into the areas.

Recent regulatory changes also have the potential to increase allocation utilization levels. Framework 48, effective on July 1, 2013, reduced the commercial minimum size for several groundfish species, including haddock, which was reduced from 18 to 16 inches. The reductions decrease regulatory discards, thereby increasing the amount of fish that can be retained and sold.

Some sectors have taken measures to increase allocation utilization levels. In one sector, for example, each member agrees to report to the sector manager areas of high bycatch of any sort, including undersized regulated species, areas of spawning fish, and/or any stock for which the sector is approaching its threshold. Upon receiving a “hotspot” report, the sector manager sends an alert to all member vessels to stay away from those particular areas. Based on a majority vote, members have also imposed temporary closed areas where there are concentrations of constraining species.

In addition, fishermen have experimented with various fishing gear designs that would maximize target stock catches, while minimizing catch of overfished stocks. In contrast to the DAS program, which stifled innovation because fishermen couldn’t risk losing a day of fishing trying new gear, the Northeast Multispecies Sector Program facilitates innovation by guaranteeing sectors their allocations. For example, alternative fishing gear such as automated jigging machines have been tested that can reduce bycatch of cod while targeting species such as pollock. Moreover, hook-caught pollock may be of higher quality and command a higher price. Fishermen and coastal communities have also undertaken a number of initiatives to increase the ex-vessel prices of groundfish by distinguishing locally-caught fish from imported fish and to create markets for underutilized species such as redfish and pollock (Financial Viability of the Fishery: Revenues).

Information Sources

Kitts, A. et al. 2011. 2010 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2010-April 2011). National Marine Fisheries Service, Northeast Fisheries Science Center Reference Document 11-19. Woods Hole, MA.

Future of Fish and N. Inamdar. 2014. Building a Sustainable Value Chain for New England Groundfish. Prepared for the New Venture Fund’s New England Finfish Finance Needs Assessment Project. Washington, D.C.

Labaree, J. 2012. Sector Management in New England’s Groundfish Fishery: Dramatic Change Spurs Innovation. Gulf of Maine Research Institute. Portland, ME.

Magnuson-Stevens Act Provisions; Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Final Rule to Allow Northeast Multispecies Sector Vessels Access to Year-Round Closed Areas, 79 Federal Register 22043 (April 21, 2014).

Murphy, T. et al. 2012. 2011 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2011-April 2012). National Marine Fisheries Service, Northeast Fisheries Science Center Reference Document 12-30. Woods Hole, MA.

Murphy, T. et al. 2014. 2012 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2012-April 2013). National Marine Fisheries Service, Northeast Fisheries Science Center Reference Document 14-01. Woods Hole, MA.

Murphy, T. et al. 2015. 2013 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2013-April 2014). National Marine Fisheries Service, Northeast Fisheries Science Center Reference Document 15-02. Woods Hole, MA.

National Marine Fisheries Service, Office of Science and Technology. 2017. Annual Commercial Landing Statistics. Available online: http://www.st.nmfs.noaa.gov/commercial-fisheries/commercial-landings/

New England Fishery Management Council. 2009. Final Amendment 16 to the Northeast Multispecies Fishery Management Plan Including a Final Supplemental Environmental Impact Statement and an Initial Regulatory Flexibility Analysis. Newburyport, MA.

New England Fishery Management Council. 2010. Fleet Diversity, Allocation, and Excessive Shares in the Northeast Multispecies Fishery. Newburyport, MA.

Updated: April 2018

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