Fisheries Dollars and Sense

——– Forwarded Message ——–
Subject: Fisheries Dollars and Sense
Date: Thu, 22 Jun 2017 17:06:24 -0400 (EDT)
From: Coastal Conservation Association Georgia <hbrown@ccaga.org>
Reply-To: hbrown@ccaga.org
To: cunningham.rick@gmail.com

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Fisheries Economic Pictures Comes into Focus
Recreational fisheries generate far more economic activity with less impact on marine resources. So why are we still treated as an after-thought by NOAA Fisheries?

NMFS released Fisheries Economics of the United States (FEUS) this week with much fanfare (http://www.st.nmfs.noaa.gov/economics/publications/feus/fisheries_economics_2015/index). Thanks to CCA’s and the rest of the industry’s dogged attention to the optics of these types of press releases, NMFS did not try once again to paint the commercial industry as larger than the recreational industry in its announcement. That only makes sense because the commercial industry has a smaller economic footprint no matter how you slice it.
According to FEUS, in 2015, the fisheries economy in the US generated $200 billion in total economic activity. Of that number, $13.9 billion was created by the commercial sector; $38.0 billion from the supply chain all the way to the consumer for those fish caught by US commercial harvesters; $92.3 billion in seafood imports and $63.4 billion from recreational fishing. That’s $63.4 billion recreational vs. $13.9 billion for the commercial harvesting sector, or if you want to be generous, $51.9 billion including the activity all the way through to the restaurants and big box stores like Wal-Mart.
Even in the face of increasingly harsh regulations forcing recreational fishing effort down nation-wide, spending by recreational anglers has stayed strong, even increasing. 2015 was up almost $3 billion dollars over 2014, mainly due to a revised durable good expenditure survey that showed recreational anglers are, on average, spending more per person on durable goods like boats and rods and reels. It is likely that trip expenditure estimates will go up even farther for 2016 as a new trip expenditure survey has recently concluded. The final estimates from that survey are not out yet and therefore weren’t used in this publication. Those trip expenditure estimates should likewise be higher than the last time they were collected in 2011, driving the estimate of our economic importance even higher for 2016.
Meanwhile commercial fishing is shrinking, with revenue dropping more than $300 million from 2014 to 2015 and total economic activity dropping by nearly $10 billion dollars during the same time frame. If the recreational sector produces nearly $12 billion a year more than the entire seafood supply chain from the commercial harvester to the consumer, and nearly $50 billion more than the commercial sector, the inevitable question is, why does NOAA Fisheries spend the bulk of its time, effort and energy on management of the commercial harvesting sector? Why, in mixed-use fisheries that have both commercial and recreational participation, does it fail to recognize the larger footprint of the recreational sector?
This insistence on commercial-centric management in the Lower 48 is propping up relatively tiny, boutique commercial fisheries at the expense of an industry that produces far more economic activity with a much lighter footprint on fish stocks and the environment.
The story gets even more depressing when you net out strictly commercial fisheries in which recreational anglers do not participate – things like shrimp, Pollock and Alaskan king crab. Very conservatively, more than 60 percent of commercial landings come from fisheries an angler wouldn’t even think of participating in. Applying that percentage to the estimates above, the part of the commercial harvesting sector that competes against our fisheries generates less than $5.3 billion in total economic activity. If you include the entire supply chain right to the restaurant plate or the supermarket cart, those fisheries generate less than $20 billion in economic activity. That’s more than three times less than what recreational fishing generates in those same fisheries.
Given how our industry is treated in the management process, that is a shocking revelation, but it certainly isn’t new. The federal government has routinely ignored even its own economic reports that show recreational fishing generates drastically more economic activity with a lighter impact on the environment and on marine resources.
As a nation, we are missing a tremendous economic opportunity when the agency charged with managing the nation’s fisheries operates in such a one-sided and completely illogical manner.

By Brad Gentner
President
Gentner Consulting Group LLC

Coastal Conservation Association Georgia
2807 A Roger Lacey Drive
Savannah GA, 31404
(912) 927-0280
www.ccaga.org

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It’s Time to Rethink “Catch Shares”

Gentner: It’s time to rethink ‘catch shares’

Catch shares in marine fisheries is a concept unfamiliar to most people, and it is probably completely alien to most hunters and anglers in this country. It is a system of wildlife management that bestows some percentage of a public marine resource, like red snapper in the Gulf of Mexico, to private businesses for free, to use and sell for their own profit. It was thought that by giving away ownership rights to individuals, the fishery would consolidate and ultimately become easier to manage. While the same number of fish would be caught, the benefits of funneling access to the resource through fewer entities was thought to remove some of the uncertainty in the industry and thus would be worth the price of privatizing a public resource for free.

While catch shares are still the darling of some fisheries economists, there is a growing backlash against this management tool worldwide for a variety of reasons. At the heart of these complaints is fleet and wealth consolidation, extraction of public wealth for private profit, and failure to capitalize share-cost into production costs.

Within the past two years, two small-scale fisheries organizations, the World Forum of Fisher Peoples and the World Forum of Fish Harvesters and Fish Workers came out in opposition to a large World Bank investment initiative centered around rights-based management. These small-scale fisherfolk organizations oppose “ocean grabbing” because it destroys communities and consolidates the fleet and the fishery wealth in too few hands. In addition to these grassroots resistance efforts, there have been several scholarly articles published that state that the only real guaranteed output from catch shares is capacity reduction through consolidation. And while reducing capacity is the key to reducing overfishing, it is not a sufficient condition to improving biological outcomes. In other words, there is no guarantee that stock will be conserved, but a definite guarantee that the industry will shrink, generally damaging coastal communities.

Beyond the consolidation problem, as we’ve seen in the Gulf red snapper commercial sector, these systems create “quota barons” who pay their harvesters laborer wages in order to increase their profits or lease out their quota to other fishermen or new entrants. First-generation quota holders paid nothing for the public resource, and this failure to capitalize the share value as a cost in the production of fish by quota holders is actually distorting quota markets and changing incentives. When the quota is given away to the first generation of fishers at the inception of a catch share, the subsequent generations of fishermen essentially become fishery sharecroppers forever.

Here in the energy capital of the world, it is especially difficult to believe an agency of the federal government gives public resources away for free to private businesses, but that is exactly what NOAA Fisheries is doing, and all while under the auspices of the U.S. Department of Commerce. Unlike the auction system that governs just about every other public resource – oil and gas, timber, airwaves – all of the resource “rents,” or profits, that should belong to the American public from our shared marine fisheries and should be generating wealth for years to come get stripped out by a small number of people who forever lock those values up in private bank accounts.

To address this issue, catch-share systems in American fisheries should be reconsidered from the top down. At the very least, these rights should be of limited duration and should be auctioned off regularly. Judging from the backlash coming from other parts of the world and in our own country, it would be entirely appropriate to question whether strong individual rights given away for free have any place in the management of our public resources.

Gentner is president of Gentner Consulting Group and worked eight years as a senior research economist for the National Marine Fisheries Service.