In 1995, the National Marine Fisheries Service - Alaska Region (NMFS-AK) implemented new Individual Fishing Quota (IFQ) programs in Alaska's halibut and sablefish fisheries. The programs had been developed by the North Pacific Fishery Management Council (NPFMC) and approved by the United States Secretary of Commerce.
The new IFQ programs represent a dramatic change from the open access fisheries for sablefish and halibut that existed prior to 1995. The programs continue to be controversial as many people have concerns about some of the potential changes that might occur. In 1995, the State of Alaska and the National Marine Fisheries Service formed an interagency study team to monitor and evaluate changes occurring under the new IFQ programs.
This study is one of several studies being undertaken to analyze different aspects of these new IFQ programs. The other studies are focused on documenting changes that are occurring under the new IFQ programs. This study focuses on an initial allocation issue which remains a source of controversy.1
The purpose of this report is to examine and analyze participation that occurred between the end of 1990, which was the last year of eligibility for persons who applied for quota shares (QS), and 1995, which was the year the IFQ programs went into effect. For the purposes of this report, the authors will sometimes refer to the years from 1991 through 1994 as "the gap years."2
The main portion of this document considers the subset of QS recipients and non- QS recipients who participated during the gap years. Some QS recipients did not participate during this time period. Appendix III provides additional information about the QS recipients who were not credited with participation from 1991 to 1994 in management areas where they received initial QS allocations.
Some persons criticize the new IFQ programs because none of their participation during the 1991 to 1994 time period counted toward an initial allocation of quota shares,3 which are the basic underlying use- privileges under the IFQ programs. Under the IFQ programs adopted by the NPFMC, "present participation" means ownership or lease of a vessel that made commercial halibut or sablefish landings during 1988, 1989, or 1990.
While the IFQ programs began in 1995, eligibility for the initial issuance of QS was restricted to persons who owned or leased a vessel(s) that made fixed gear landings of halibut or sablefish at any time during 1988, 1989, or 1990.4 These dates were adopted by the NPFMC after considerable public discussion and study and were approved by the Secretary of Commerce through the Federal rule-making process.
Persons who were eligible to apply for QS in these fisheries based on commercial harvests in 1988, 1989, or 1990 could then receive QS commensurate with their credited harvest over a longer time period. Initial allocations of QS for halibut in an IPHC regulatory area were based upon the applicant's highest five years of credited landings during the halibut QS base period of 1984 through 1990. Initial allocations of QS for sablefish in an IFQ regulatory area were based upon the applicant's highest five years of credited landings during the sablefish QS base period from 1985 through 1990.
Persons who participated at some time between 1991 and 1994 but who did not participate in 1988, 1989, or 1990 did not receive an initial allocation. Some of these persons argue that they were "leftout" of the initial allocation after they demonstrated dependence on the fishery over the 1991 through 1994 time period. Some have also complained that persons who "retired" from the fishery during these years received an initial allocation, while other persons who were fishing during the same time period were ineligible to apply.5
This report examines 1991 to 1994 fishing operations that participated in the halibut and sablefish fisheries. These fishing operations are defined as unique permit holder / vessel owner combinations that recorded a landing(s) in the 1991 to 1994 halibut or sablefish fisheries. The study defines a "leftout" fishing operation as one where neither the permit holder nor the vessel owner received an initial QS allocation in an area(s) where the operation recorded a landing(s) over the 1991 to 1994 period.
One objective of this study is to estimate the number of leftout halibut and sablefish fishing operations. Another objective is to enumerate and analyze the vessel owners and permit holders associated with leftout fishing operations.6
The report also provides summary data and statistics describing the distribution of vessel owners and permit holders associated with leftout fishing operations. It provides data on these persons by species and area, and gives their participation, catch, and earnings histories in the halibut and sablefish fisheries. The report also provides other summary data on the resident type, age, and earnings in other fisheries for permit holders of leftout fishing operations.
The report compares historical "turnover" rates of permit holders in these fisheries to turnover rates over the 1991-1994 time period. These data help quantify and put some perspective on the group of fishing operations that participated during the 1991 to 1994 time period but did not receive an initial allocation.
A second source of complaints about initial allocations under the new IFQ programs comes from persons who fished over the 1991-1994 time period and who received an initial allocation of QS, but who feel that their initial allocation of QS was "too little" because their 1991-1994 catch histories were not considered.7 Some of these persons argue that they became dependent upon the fishery in the four years prior to the program, but they did not get credit for these years in the initial allocation. Others claim that some persons who "retired" from the fishery during the 1991 to 1994 time period did relatively better in the initial allocation.
This report examines the 1991 to 1994 fishing activities of entities that received initial allocations and provides summary data and statistics on their harvest shares over the 1991-1994 time period relative to their initial distribution of quota shares. These data help quantify the number of persons who increased or decreased their harvesting share relative to their QS percentage for a species and area during the time period immediately preceding implementation. Estimates are also provided on the number of entities that received initial allocations for a species and area but who did not participate in the area's fishery over the 1991 to 1994 time period.
All restricted access programs need a qualification period, a "cutoff" date, and eligibility criteria to determine who will receive an initial allocation. Proponents of the dates adopted for the IFQ programs can argue that they were chosen after a long period of study and within an open public decision-making process. They can also stress the need for a cut-off date to reduce the anticipatory entry that often occurs by new vessels and fishermen when a new restricted access program is in the offing.
Persons who take the position that some portion of their 1991 to 1994 harvests should have been considered might argue that there was still considerable uncertainty after 1990 as to whether or not there actually would be an IFQ program. The NPFMC had been studying and discussing limited access for a decade but no program had materialized. Under these conditions, a person who wanted to enter or re-enter the fishery might decide to discount warnings of possible future exclusion from an initial allocation.
The purpose of this study is not to take sides in a debate or support a particular position. The purpose is to examine and analyze 1991 to 1994 halibut and sablefish participation. The study provides information on 1991 to 1994 fishing operations that did or did not receive initial QS allocations. This study should help clarify the nature and extent of the participation of different groups of entities in the halibut and sablefish fisheries during the 1991 to 1994 time period.
In 1995, NMFS-AK implemented new (IFQ) programs for the Alaska halibut fishery and the Bering Sea-Aleutian Island (BSAI) and Gulf of Alaska (GOA) sablefish fishery. The NPFMC had spent several years developing these programs. NMFS-AK developed the implementing rules and is the agency responsible for administering and managing the program. NMFS-AK started a new Restricted Access Management (RAM) Division to implement and administer the new IFQ programs.
The development of these programs took place over a long time period. The NPFMC began considering restricted access programs for halibut in the late 1970s. There was a study of an IFQ option for the halibut fishery in the early 1980s. These early efforts were thwarted when a 1983 moratorium recommended by the NPFMC was rejected by the Secretary of Commerce.
The "Americanization" of the groundfish fishery, including the rapid development of the sablefish fishery, shifted the NPFMC's attention to sablefish in the mid-1980s. Fishing season lengths were steadily declining and many of the same criticisms that had been raised in the halibut fishery about management, safety, conservation, and efficiency were being raised in the sablefish fishery.
By 1983 some fishermen were already asking for limited entry in the sablefish fishery. Suggestions for a moratorium or limited entry for sablefish longlining were heard in 1984 and 1985. At the May 1985 NPFMC meeting a motion, later withdrawn, was made to limit all sablefish vessels, regardless of gear type, in the Gulf of Alaska. At the December 1985 meeting the NPFMC adopted a September 26, 1985 cut-off date for the Gulf of Alaska sablefish fishery (published in the Federal Register on February 13, 1986).
In 1987, the NPFMC solicited the view of the industry about current sablefish management problems and limited entry alternatives. In December of 1988 the NPFMC concluded that the open access status quo was no longer acceptable for the fixed gear sablefish fishery and decided to explore restricted access options including IFQs. In early 1989, the NPFMC notified the public they were considering limited access programs for other fisheries besides sablefish, especially the halibut fishery.
During 1989, the NPFMC identified 10 conservation and management problems including allocation conflicts, gear conflict, deadloss from lost gear, bycatch loss, discard mortality, excess harvesting capacity, product wholesomeness, safety, economic stability in fisheries and fishing communities, and rural coastal community development of a small boat fleet. The NPFMC also developed a draft Environmental Impact Statement (EIS) that analyzed four alternative management regimes including continued open access (status quo), license limitation, IFQs, and annual fishing allotments.
In January 1990, the NPFMC decided to focus on IFQ alternatives. They studied IFQ options throughout 1990 and early 1991. In addition, in early 1991 they decided to consider similar IFQ alternatives for the halibut fishery. A draft EIS that analyzed halibut alternatives was made available to the public on August 2, 1991.
In September 1991, the NPFMC tentatively selected a preferred alternative for both fisheries and announced it would make a final decision at the NPFMC's December 1991 meeting. On December 8, 1991 the NPFMC approved the halibut and sablefish fixed gear IFQ program for review by the Secretary of Commerce.
In January 1992, the NPFMC requested additional analyses of the potential effects of their preferred alternative. NPFMC staff prepared a supplement to the draft EIS that was made available to the public on March 27, 1992. At their April 1992 meeting, the NPFMC reconfirmed its original decision to recommend the halibut and sablefish IFQ program to the Secretary of Commerce. On May 15, 1992, a 45 day public comment period on the draft EIS was announced.
NMFS officially received the NPFMC's IFQ recommendation in October, 1992. A notice of availability of the FMP amendment was published in November, 1992 in the Federal Register (57 FR 49676) and the proposed rule was published in December, 1992. On January 29, 1993 the Secretary approved the IFQ program in its entirety.
The NPFMC continued to review their IFQ program and to consider changes. During 1993, they considered several different options for "blocking" small amounts of QS and restricting the number of blocks that a person could hold in an area. The thrust of the block proposals was to add further constraints on the extent that QS could be consolidated, and to reserve QS that would only be attractive to a small part-time fleet. The final rule for the "Modified Block" amendment to the IFQ plan was published on October 7, 1994, and became effective on November 7, 1994 (59 FR 51135)
The NPFMC also amended the plan to include a formula for compensating persons who had their IFQ lowered by provisions that called for Community Development Quota (CDQ) allocations of halibut and sablefish QS to communities in Westward Alaska. The CDQ compensation formula was published on March 3, 1995, and became effective on April 3, 1995 (60 FR 11916)
I.C
ORGANIZATION OF THIS REPORT
This report is organized into five chapters. The chapters cover both the methodology used in the study and the results of the study.
Chapter II summarizes the underlying data sources and explains the methodology utilized in the report. The chapter includes considerable detail on the problems and work involved in matching State of Alaska data to the RAM initial allocation file so that entities receiving initial allocations could be identified on 1991 to 1994 catch records. The matching process required several assumptions and many steps to complete. The "matches" were not always perfect. Because of this, the data provided in the report should be considered as estimates.
The chapter also provides the definition of 1991 to 1994 "fishing operations." A fishing operation is defined as a unique permit holder / vessel owner combination that recorded a landing(s) over the 1991 to 1994 time period. These fishing operations are divided into two groups: those that received an initial allocation of QS for the species and area where they fished during 1991 to 1994, and those that did not receive an initial QS allocation for the species and area where they fished during the 1991 to 1994 time period.
Chapter III provides the results of the study for 1991 to 1994 participants in the halibut fishery. It includes an overview section which shows for each management area the relative portions of the 1991 to 1994 halibut harvest that were taken by fishing operations that received initial QS allocations, and the relative portion of the harvest that was taken by operations that did not receive an initial allocation.
This "halibut results" chapter includes a section that examines initial QS holders and compares their 1991 to 1994 halibut fishery performance with their relative share of the initial allocation of QS. These tables may be helpful in examining the issue raised by some initial QS holders who claim they received too little IFQ.
The chapter also provides a closer look at the permit holders and vessel owners of fishing operations that did not receive an initial QS allocation in an area(s) where the operation participated during the 1991 to 1994 time period. Data on these "leftout" vessel owners and permit holders are provided by management area, resident type, and year. The report includes data on average catch and the frequency of years fished over the entire 1991 to 1994 time period.
Chapter IV provides the results of the study for 1991 to 1994 participants in the sablefish fishery. The data presented are similar to Chapter III.
Chapter IV includes an overview section which shows the relative portions of the 1991 to 1994 harvest in each area that went to fishing operations that received initial allocations, and the portion of the harvest that went to operations that did not receive an initial allocation. The chapter also includes a section that examines initial QS holders and compares their 1991 to 1994 halibut fishery performance with their relative share of the initial allocation of QS.
This "sablefish results" chapter provides a closer look at the vessel owners and permit holders of fishing operations that did not receive an initial QS allocation in an area(s) where the operation fished during the 1991 to 1994 time period. Data on the "leftout" vessel owners and permit holders are provided by management area, resident type, and year. The report includes data on the average catch and frequency of years fished over the entire 1991 to 1994 time period. Data are also included on the age distribution of permit holders associated with these leftout fishing operations.
Appendices I and II provide detailed documentation on the methodology used to assign "leftout" fishing operations, and how resident status was assigned to permit holders and vessel owners.
Appendix III provides more detail on QS recipients who were not credited with 1991-1994 participation in a management area where they received an initial QS allocation. It provides tables where these non-participating QS recipients are counted in tables of frequency of years fished over the 1991 to 1994 time period. There are also tables which show how many of these "non-participating" entities actually fished in some other area(s) during the 1991-1994 time period. And finally, there are tables in Appendix III that show how one of the decision rules used in the methodology affected the counts of participating and non-participating entities.