SHRINKING THE FLEET continued from home page

 

A buyout program would reduce the size of the fishing fleet and provide a larger share of fish for remaining fishermen, Hawkins said.

The type of buyout program under consideration, she said, involves setting up a loan program for fishermen who wish to remain in the fishery to buy the permits of fishermen who want to get out.

 A number of steps would be involved to get a buyout program up and running, she said. The industry would present a business plan to NEFMC for how fish will be allocated after the number of vessels is reduced. The plan must prevent replacement of the removed boats. And it must include a plan for the repayment of loans taken by the fishermen who buy the permits. Two-thirds of permit holders must approve the buyout program, she said.

The buyout funding request must be made to Congress by the National Marine Fisheries Service. NMFS cannot request funding unless asked to do so by NEFMC or a state’s governor.

The request must include a fleet-reduction amendment to the groundfish management plan, and public hearings will be required.

Several buyouts have occurred in New England in the recent past. In 1996, NMFS set up a pilot buyout of groundfish vessels; the program was expanded in 1998. The program removed 79 boats from the New England groundfish fleet, at a cost of $23 million. There was a permit buyout in 2001 to reduce latent effort.

“Latent effort” refers to the existence of permits that are valid but not being used. The program removed 245 permits for $9.6 million; the permits were removed mostly from the fleet’s smaller boats; the boats themselves were not surrendered.

Together, the program removed about 20 percent of fishing capacity from the groundfishery. Both programs resulted from special Congressional legislation that produced the funds. Other buyouts across the nation have occurred, including a disaster assistance program for the lobster fleet around Long Island Sound when lobster stocks there began a decade-long die-off in the late 1990s that reduced the number of lobstermen from hundreds to a few dozen today.

Another buyout proposal was developed by key members of the groundfish industry from different states in 2005 and 2006, for implementation through special legislation.

According to Maggie Raymond, director of the South Berwick-based Associated Fisheries of Maine, the group sent a preliminary referendum to permit-holders but didn’t get back a huge response. Those who did respond favored a buyout. After that, Raymond said, ASF began to draft legislation and met in Washington, D.C., with staff from Maine’s Congressional delegation.

However, the group wasn’t able to get enough support, she said, but, the group has remained in the contact with Congressional staffers, in anticipation of the drastic consolidation expected in the fleet.

At this point, Raymond said, the group estimates that a buyout would require a loan of up to $100 million, which the industry as a whole would pay back through a fee on landings from trips made on the days-at-sea system.

A buyout has become more crucial than ever to the survival of the industry, Raymond said, now that most of the groundfish resource has been allocated to the sector management system and it’s clear there is not enough allocation for all permit-holders.

“Yes, it will be a burden to pay back the loan, but it will give people the opportunity to get out,” Raymond said. And the percentage of allocation for those who remain in the fishery will increase, she said.

“We think it makes sense,” Raymond said. “Unfortunately, we can’t get enough support around the region to make it go forward. But we’re not going to give up.”

Raymond said the buyout program will only be carried out if it will reduce the fleet at least 25 percent and not more than 50 percent. The $100 million figure is a cap, and the total sum could be less, depending on the bids received for eligible boats. The actual loan amount would not be finalized until all bids are submitted and NMFS has determined how much fishing capacity would be removed. Fishing capacity would be measured by a combination of permitted fishery access, vessel length and horsepower, and catch history.

Fishermen who sell their permits would have a choice for the disposition of their vessels: they might be restricted to non-fishing uses, or the vessels might be scrapped.

Raymond said that 20 percent of the permits would remain with their communities in “permit banks” and would be available to fishermen when the resource recovers. The concept of permit banks is considered key for giving Maine a future in the groundfish industry. A permit bank is a community-based repository of fishing rights that is created to secure future fishing opportunities for struggling local fleets.

Although a buyout program is projected to increase revenue and is expected to be useful to fishermen to the south, said Midcoast Fishermen’s Association director Glenn Libby, it doesn’t do any good for Down East Maine, where depleted stocks have kept small-boat fishermen from fishing.

For Maine fishermen who have had to drop out, Libby said, the primary concern is to help them to get back in after the stocks are rebuilt. The permit banking process is expected to help Maine fishermen get back in the game, said Department of Marine Resource deputy commissioner for external affairs Terry Stockwell. Stockwell said the NEFMC expects the fleet will consolidate by perhaps 50 percent.

“There’s a bucketload of work that’s got to happen,” Stockwell said. Michael Conathan, from U.S. Senator Olympia Snowe’s office, said the staff is looking for a package that will be beneficial for Maine’s large and small boats and that will help restore the fishery for fishing communities along the coast.

Coastal states – Maine, Massachusetts, New Hampshire, Rhode Island, and south to the mid-Atlantic – will need to come together as a coalition to push the buyout proposal in D.C., Conathan said, particularly given the nation’s current financial climate and the administration’s recommendation to freeze non-discretionary spending.

“It’s a heavy lift right now” even though the industry would pay back the loan, Conathan said.

“We’re looking to develop something that makes sense for the state of Maine and for the industry as a whole,” Conathan said.

NEFMC’s Nies said there are other alternatives for reducing the fleet besides a buyout. Nies wanted to know what advantages a buyout would have over the natural settling out that would occur as a result of market forces over the next couple of years – in other words, more profitable operations would buy out less-profitable operations anyway.

Raymond said the market system is unlikely to work in this case. She said it’s increasingly difficult for fishermen, even those with profitable operations, to get enough money together to buy the permits of fishermen who want to sell. “Nobody has enough allocation,” she said.

A buyout program would level the playing field, she said: Anybody who can’t afford to stay in the fishery can get out if they get a reasonable bid.

“This is a complete work in progress and open to suggestion,” said Conathan.