Thursday, March 8, 2007

A proposed solution to the Halibut Charter Gross Harvest Level (GHL) issue

DRAFT by Ed Rasmuson
March 6, 2007

A proposed solution to the Halibut Charter Gross Harvest Level (GHL) issue

Many of us on the Council, as well as in the audience, have sat through endless testimony concerning the allocation of the halibut resources between the commercial fishermen and the charter halibut industry. Many different suggestions and scenarios have been put forward, but in my opinion, they just nibble around the basic problem which is a realistic allocation of this finite resource.

A brief history leading up to this problem is in order. In 1993, Individual Fish Quotas (IFQs) were given to the existing halibut fishermen. Between 1995 and 1999, a GHL for the growing charter fishermen was proposed and adopted. Since then, the charter fleet has pierced this GHL in both Southeast (Area 2C) and South Central (Area 3A). This has led to a very contentious allocation fight between both users of this resource.

We have to come to a final solution to this situation right away as it is only going to get worse with time.

In the next 10 to 15 years, almost all IFQs will have been bought by second generation fishermen which will greatly exacerbate the problem because every commercial fisherman will have a vested financial interest in their IFQ.

Therefore, I propose the following approach which certainly can be modified. I have no pride of authorship.

First, make the existing GHL reflective of the current halibut harvests. The existing GHL was set on 125% of the 1995-1999 average harvest. However, that level does not reflect either current halibut abundance or current CB usage by sport participants. Updating the CB GHL to reflect the 2001-2005 harvest would be 1.9 M lbs in Area 2C and 4.1 M lbs in Area 3A. This better reflects the current abundance and catch.

Additionally, consider setting the allocation as a formula – 125% of the average harvest of 2001-2005, translated to percentage (17% 2C and 15% 3A). This is another option.

Second, link the charter boat GHL to the halibut CEY. This would float the CB GHL with abundance, similar to the commercial fishery, and establish separate accountability for each sector. The question here – is it better to have the allocation as a fixed poundage allocation or floating with halibut abundance? I prefer the latter.

Third, consider establishing a mechanism to increase the allocation above the baseline set under step 1 to reflect future guided angler/tourist demand.

March 6, 2007
Page two

a) Option for CB operators to fund the purchase of commercial halibut QS (willing buyer/willing seller) and permanently add an annual equivalent (in IFQ pounds) to the CB allocation. For example, using a low interest loan to add QS equivalent to 200,000 pounds to the Area 3A allocation, and QS equivalent to 300,000 pounds to the Area 2C CB allocation, with CB operators retiring the debt. Either a commercial bank or the State of Alaska would loan $10M to purchase the needed quota share (0.5 million pounds at $20 a pound). The loan would be repaid from a “tax” on halibut pounds landed by the charter industry. The tax rate and payback period would be determined based on the duration of the loan. For example, a rate of 25 cents per pound would generate nearly $1.5 million annually from the CB catch. The note for this loan would be issued and held by the State of Alaska. The “taxes” would be collected by the State and used to repay the loan. The “tax” could be increased or decreased depending how much commercial QS is needed to generate surplus funds to buy additional quota when needed. This would allow for a compensated reallocation between the commercial and CB sectors.

b) Fund repayment of the loan (described above) used to purchase commercial
halibut QS through a $10/halibut angler as a tag on their fishing license. The increased quota would be released into the general CB allocation pool. There are 250,000 to 300,000 halibut fishers annually. A $10 marine sport fish/halibut tag would generate between $2.5 to $3.0 M/year.

A regulatory change would be needed to allow the purchase and holding of halibut QS and make it available to the charter sector. For the Council, an amendment to halibut regulations would be needed to allow for entity, other than a “qualified person” to purchase, hold and fish QS. Additionally, state legislation would be required to set up a state entity to collect and pay back the loan through the tax program.

The unused CB GHL QS pool could be sold to Commercial C and D size vessels for entry level access. If the QS is to remain within the CB GHL pool, a lease would be allowed if it was projected that the full amount of CB quota would not be used in a year. This would assure that halibut does not go unused and is available to the consumer. If the amount of QS had grown too large through purchases for the CB fleet to use, the excess would be sold to entry level fishers who are qualified to hold commercial halibut IFQ. This QS would be limited to C/D vessel size category.

What I am attempting to do is keep it simple. We basically need to drain the swamp, i.e. raise the GHL, through the purchase of commercial IFQ before we can address other problems such as area-wide depletion, new charter boat entrants, etc.

March 6, 2007
Page three

This proposed solution coupled with a moratorium for charter boat entrants would go a long way toward solving this contentious issue. This approach, obviously, would require a willing “seller” i.e. commercial fishermen, and a willing “buyer” the state of Alaska. If
we make the existing GHL reflective of the current harvests, then the amount of IFQs that need to be purchased would be a lot less.

As a long time Alaskan, we need to put this behind us. We need to immediately start the steps to a lasting solution to the problem before it gets even larger than it currently is. Finally, we on the NPFMC have a lot of other issues to contend with. We cannot spend an inordinate amount of time on this issue or we will be sadly neglecting other pressing issues that could have a very dynamic effect on our fishing industry.


Flatfish said...

"First, make the existing GHL reflective of the current halibut harvests. Additionally, consider setting the allocation as a formula – 125% of the average harvest of 2001-2005, translated to percentage (17% 2C and 15% 3A). This coupled with a moratorium for charter boat entrants would go a long way toward solving this contentious issue".

These aspects of the Rasmuson plan I agree with the rest is BS.

Anonymous said...

Maybe 100%,125% will not fly now.

mark said...

"A brief history leading up to this problem..." would not be complete without a Rasmus "mea culpa".
Every commercial fisher already has a vested interest in their I.F.Q..
Fixed poundage allocation would be better than floating as we are likely to soon see a downturn in what the biologists (and Richard Frost) feel the abundance to be. Even if I am wrong, if we are about to experience an unprecedented surge in stocks, if we have even one year that the estimate is down - how do they draw rein on the inflated charter fleet?
I cannot emphasize enough how impalatable it would be to have my customers pay for Greg Sutter's right to fish. Like the very existance of the A.C.A., it would be a persistant reminder of how we got screwed by the feigning ideologues.
The part of his plan that I agree with is "drain the swamp"! (have we spent 16 hours yet?)

Halibuthead said...

His last paragraph really makes me sick. Down playing the importance of this issue. Rassmussen is the one who proposed rescinding the IFQ originally. He and his cohorts are largely responsible for drawing this thing out. Now he is toting how we need to get it done?????

I have a proposal for Rassmussen. Since he is the one that has allowed all the "speculators/problem area" to remain in the industry, therebye causing a major loss in life time earnings for long time operators, how about getting out his fat check book and making it right!

Rassmussen has never cared about our industry. His focus is Bob Penny and their back door politictal agenda.

mark said...

Can we call them the new backdoor boys?

Dave said...

Fisheries Managment Plan, is the only way to fix this mess. Start out with a 50 percent split. Then we'll talk IFQ. Talk from a position of power not weakness. I'm tired of the scraps most people are willing to take. Go to for the real scoop.

mark said...

So, Not only were you willing to sacrifice what I have done for a lifetime so that you could enjoy your newfound fishing hobby, you are willing to throw your other neighbors, the commercial fishers, under the bus to build your Shangri-la. And you had the effrontery to call me greedy for wanting I.F.Q.. Every time I try and extend an olive branch for the sake of our long history, you say something that makes me wonder who the hell you are! Remember, you were making more money than I ever made in my life a few years ago and you quit to fish, knowing full well that we had a moratorium and an G.H.L., to come and complicate and probably eventually end my way of life. Greg Sutter and the Bondiolis - I understand. They didn't know me. They were not friends I took fishing, had in my house. They just came, like we once did, to get their piece of the Last Frontier and this is where they ended up. You, Scott, Peter, Don - you hurt a little more...Also, is Bruce Warner with his lawyer your mentor? The real scoop - Is that a joke?! Fisheries Management Plans are for fish that weren't covered by other plans, such as halibut. Shit in one hand and dream with a $5,000 lawyer in the other and tell us which one fills up faster...I.F.Q., Dave. Let's salvage what is left.

David said...

I think you got the wrong Dave
I don't support what Bruce is selling, or a 50/50 split.
My ph# is still 235-6958
David B. Greiner

mark said...

First, I owe Dave Greiner an apology. I am truly sorry and I should have called you before opening my mouth (thank God I've never done that before)
To the next point; Are more new charters shoehorned into this nearshore depleted area really more important to any of us than our friends and neighbors we've come close with over the years? Do we want to buy or, worse, TAKE a way of life from the people of the region so that Greg Sutter and his like will not have to swallow their pride? Do I have to put a name on each of your neighbors and their children for you to understand who you are talking of sacrificing so that we charters can have more fish that we won't be able to catch anyway? This place is going to be a dry hump in ten years if we keep hogpiling new boats in. Do you really believe that Rasmuson, Penny, Murphy, or Warner know more about this than guys like Mike Swan and Sean Martin? You guys that have been fishing this just a few years think that the stocks are healthy - "Look at me! I got two over a (estimated) hundred!" I'm gonna let you in on a little secret. In 1993, The Northern Lights had 2,170 halibut averaging 95 Lbs. by tape measure(ask Travis - he filleted them). You guys are talking on cell phones, secret radios, scramblers, using codes, etc. Do you think that there is anything that I can learn from you besides what your weather is? I fished that spot, on that stage of the tide, in that weather, at that moonphase, at that time of the year, BEFORE YOU DID. I KNOW what halibut are there. The answer is... less than there used to be. Tony doesn't care one bit that your damned secret spot is Cow Rock or the KE buoy. Scott doesn't (or shouldn't) care that you burned 200 "beat" his catch by ten pounds. My point is that you can talk all you want about how many fish there are and how you are the best there is at catching them. Congratulations. Recently, a guy (probably a school teacher) that has been in the business for three years commented that business is good - "My booking are up!" What's his f'ing point? After a few more years of teaching will he discover that in three years business can pretty much only be "up"? The first year he carried his cousin and a few people from new B&Bs that didn't know any better.Shall we have him transfered to the math department? Now ask someone who knows, "how are things compared to ten, fifteen, twenty-five years ago." And then tell me that the answer is to take more fish from our neighbors that commercial fish, or to institute a slot limit, or force our clients to buy halibut stamps. You see the deep creek boats piling into Homer lately? Where are we going to pile? Sure, we can do more overnighters to get to fishing almost as good as we had here twenty years ago. We can run efficient boats that can go further on less fuel - need I remind you that this translates to "buy a smaller boat" or "pack more people on"? We have far fewer fish and they are smaller than they used to be. Did you see the period? P-E-R-I-O-D. Are you going to let Greg Sutter turn this into a sixty day season with twice as many boats as we have now in the name of "public access"? Are you going to enable Warner and the band of boats he books to lead you down the management plan dead end? Forget what happened in the past. Forget who's toes you might step on (I've been there, too!) Just help us get this thing done as quickly as we can with a unified voice. You might find that you'll like being on the same team as the guys who've been there and that this can be a pretty neat industry if we work together.(I'm wearing out these keys)I.F.Q., Fellows