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1 Introduction

1.1 The Purpose of This Study

In 1995, the National Marine Fisheries Service - Alaska Region (NMFS-AK) implemented a new Individual Fishing Quota (IFQ) program in Alaska's halibut and sablefish fisheries. The program had been developed by the North Pacific Fishery Management Council (Council) and approved by the United States Secretary of Commerce.

The new IFQ program represents a dramatic change from the open access fisheries that preceded it. The growth in fishing effort under open access had resulted in large declines in the length of the fishing seasons.

The congestion on the fishing grounds during the relatively short openings also led to gear conflicts, gear loss, and wastage. The fact that the harvest occurred during short periods of time caused short-term market gluts and forced frozen product to be held and marketed over long periods of time. These factors resulted in lower ex-vessel prices for fishermen.

The Council hoped that the sablefish IFQ program would spread out the season, allow fishermen to harvest their individual quotas at times opportune to them, and lead to improved ex-vessel prices and economic profits. They also hoped that the IFQ program would reduce safety problems, congestion on the grounds, gear loss, and wastage of resources.

Through the first two years of the program the season has been spread out, ex-vessel prices have been higher, congestion on the grounds has been reduced, and there is evidence that the program has served the other Council objectives. However, the IFQ program remains controversial.

Many people continue to have concerns about long-term potential changes that might occur under the program. This is particularly true in Alaska where there are many coastal communities that depend heavily on commercial fishing. The transfer of IFQ use-privileges to persons outside a local area or a radical change in harvest and delivery patterns under the program might have deleterious impacts on some communities. Some persons are also concerned about the potential to disrupt traditional patterns of social relationships.

Because of this, many parties have an interest in closely monitoring the changes that are occurring under the IFQ program. In 1995, the State of Alaska and the National Marine Fisheries Service formed an interagency study team to evaluate changes occurring under the new IFQ program during 1995. Several studies were initiated and completed through this process.

The NMFS Restricted Access Management Division (NMFS-RAM) administers the IFQ programs and is committed to continuing this monitoring effort. The main purpose of this study is to use data collected and maintained by NMFS-RAM to document, analyze, and report on changes that occurred during the first two years of the new sablefish IFQ program.

The report includes data and information that should help in the evaluation of how different program features are working. A brief description of the sablefish fishery and the IFQ program can be found below. An overview of the main topics covered in this report can be found in Chapter 2.

1.2 The Sablefish Fishery

Sablefish are demersal, living in waters on or near the bottom. Adults are typically found in waters from 400 to 1,000 meters on the continental slope and in or near underwater canyons and gullies. Sablefish are subject to directed fisheries by hook-and-line, longlines, pots, and trawls. Allocations of sablefish total allowable catch (TAC) among gear groups have been made since the eighties. Sablefish has also been taken as by-catch, particularly in trawl fisheries. There is little or no recreational fishery for sablefish. Sablefish from the directed fishery typically are landed in Alaska or processed offshore by floating processors or catcher processors.1

The responsibility for the management of the sablefish fisheries in the waters off of Alaska rests with the NPFMC and the U.S. Secretary of Commerce. Actual management is carried out by NMFS-AK.

The Alaska Department of Fish and Game (ADF&G) manages sablefish within waters under the jurisdiction of the State of Alaska under regulations and guidelines established by the Alaska Board of Fisheries. Some significant sablefish fisheries within state waters have been placed under limited entry programs by the Alaska Commercial Fisheries Entry Commission (CFEC). Other sablefish fisheries occurring in state waters remain open access although IFQ permit holders who participate in these open access state fisheries must record their landings under the sablefish IFQ program and any harvest is subtracted against their IFQ.

Figure 1. Map of Sablefish IFQ Management Areas

1.3 Background on the Sablefish IFQ Program

In December 1991, the Council recommended an Individual Fishing Quota (IFQ) Program for management of the "fixed gear" sablefish and halibut fisheries off of Alaska. "Fixed gear" was defined to include all hook and line fishing gears (longlines, jigs, hand lines, and troll gear). The development of the program took place over a long time period. The Council's IFQ plan for sablefish was approved as a regulatory amendment by the Secretary of Commerce in early 1993.

Quota shares (QS) are the basic use-privileges that were established under the program. QS were issued to qualified applicants who owned or leased a vessel that made legal fixed gear landings of sablefish at any time during 1988, 1989, and 1990. The regular QS units issued to a person in a management area were equal to the person's qualifying pounds for that area from the person's best five years of landings over the six year period from 1985 to 1990.2

The QS that were issued are specific to one of six sablefish management areas and one of three vessel classes. The management areas are Southeast, West Yakutat, Central Gulf, Western Gulf, Bering Sea, and Aleutians Islands. The three vessel classes include a freezer- processor vessel class and two catcher vessel classes. The two catcher vessel classes are "60 feet or less," and "greater than 60 feet."

In the Bering Sea and Aleutian Islands areas, 20% of the fixed gear total allowable catch (TAC) was allocated to Community Development Quotas (CDQ's) for groups of communities in western Alaska.3 The Council compensated QS holders in these CDQ areas for the reductions in TAC due to CDQ's by issuing them additional "CDQ compensation QS" in the four non-CDQ areas. The Southeast, West Yakutat, Central Gulf, and Western Gulf areas are the four non-CDQ areas. The CDQ compensation QS increased the total QS pool in these areas.

Each year, the amount of QS in the QS pool as of January 31 and the TAC allocated to the sablefish IFQ fishery are used to determine the basic QS/IFQ ratio that will be used in each management area for the year.4 These data for 1995 and 1996 are shown in Table 1.

Note that the sablefish TAC's devoted to IFQ's fell in all areas in 1996 relative to 1995. In contrast, the QS pool was larger at the beginning of 1996 than it was in 1995 in all areas as new initial allocations exceeded administrative revocations. The net result of these factors was a higher QS to IFQ ratio in 1996 relative to 1995 in all areas. This meant that a QS unit resulted in fewer pounds of IFQ in all areas in 1996.

A person's IFQ for an area in a given year is determined by multiplying the person's fraction of the total QS units outstanding in the area by the total allowable catch (TAC) allocated to the area's IFQ fishery for the year. Adjustments for the person's underages and/or overages from the previous year are then made to determine the person's final IFQ for the year.

The QS that were issued are permanently transferable and leasable albeit with many restrictions that are discussed in the report. The Council wanted to achieve some of the benefits associated with IFQ management but was concerned that the program not lead to radical changes that would be deleterious to communities dependent upon the fishery. As a result, the Council adopted several complex rules in an effort to constrain the changes that could occur under the program.

These rules include limits on who may buy QS, limits on the amount of QS that may be held by any one person, constraints on the amount of QS that may be fished from any one boat, and restrictions placing some QS holdings into "blocks" that can only be transferred on an "all or nothing basis."

These rules represent an effort by the Council to achieve economic efficiency gains under the program while preserving some of the traditional character of the fishery and the diversity of the fishing operations. These rules are outlined in more detail in Chapter 2 and are discussed in subsequent chapters of this report.

Table 1-1. 1995 and 1996 Quota Share Pools and IFQ TAC's by Sablefish Management Area