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
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
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.
Thursday, March 8, 2007
DRAFT by Ed Rasmuson