Catch Shares, Stakeholder Values, and Management Objectives:
a Comment by Michael Melnychuk
The recent article by Ben Raines highlights several important issues for fisheries management under catch shares. While the article does an excellent job illustrating some of the adverse social consequences, it utterly fails to highlight benefits that have been seen in fisheries around the world. This comment is intended to provide a more balanced view of catch shares.
Individual quota systems, or ‘catch shares’, are a form of fisheries management in which an annual fleet-wide quota for a species is divided among holders of individual quota units. They are used most often in industrial commercial fisheries, but may occasionally be used in small-scale commercial or recreational fisheries as well. Quota unit holders may be boat owners, operators, crew members, harvesting cooperatives, fish processing companies, corporations, or investors. There are various approaches for dividing the fleet-wide quota, but most systems consider the quantities of fish caught by individual captains or boats in years leading up to implementing the catch share system. Fleet-wide quota caps typically change from one year to the next depending on the estimated abundance of a fish stock, but the percentages of this total quota going to individual quota holders are usually constant over years unless quota units are sold from one holder to another.
Catch shares have received much attention in U.S. fisheries over the past decade, as several management systems have recently transitioned to implementing catch shares, and as the longer-term effects of those that transitioned earlier have become more apparent. There are several proponents as well as several critics these programs. A recent newspaper article described a variety of socioeconomic drawbacks in the Gulf of Mexico red snapper catch share system which has operated for nearly a decade.
Whether catch shares are seen as advantageous or disadvantageous depends to a large degree on the personal values of the onlooker as well as on the specific objectives used to manage fishing fleets. Different stakeholders have different values; even within a stakeholder group catch shares can be seen as beneficial by some individuals and detrimental by others, as seen in the above article. Fisheries management objectives are also diverse, encompassing the status of targeted fish stocks status, the ecosystems in which they live, profitability of the industry, and human well-being. Sometimes objectives align with one another, but other times they conflict. For example, economic efficiency of fishing fleets is desirable from some perspectives, but undesirable from others because this often implies fewer jobs in the fleet.
Several recent studies (listed below) have evaluated impacts of catch share management on the status of target stocks and ecosystems. For fish stocks, the key to avoiding overfishing is usually to establish and enforce fleet-wide catch or effort limits. Catch shares may further aid in reducing the variability in annual catches or exploitation rates, but it is the total pressure exerted on the stock (as well as the environment) that affects abundance over time, regardless of whether that catch is taken under competitive open access, competitive limited entry, or (non-competitive) catch share sectors. For ecosystems, there are some indications that catch share systems are advantageous – less by-catch, and less ghost fishing which arises from gear loss – because they remove the race to fish that is typical of competitive fisheries.
Many other studies have considered economic or social impacts of catch share management. In general, total profits across the fleet and safety measures often improve after catch shares are implemented, but the total number of jobs in the fleet often decreases. While fleet-wide profits may increase, the benefit is not always equitable; in some cases crew income increases, but in other cases the incomes of hired captains and crew members decrease after a transition to catch shares. Concern has been raised about a variety of socioeconomic problems that have arisen in some catch share programs. The Gulf of Mexico red snapper article identifies some of these. However, these problems are not inevitable outcomes of catch shares; there is a wide range of options for how catch share systems can be designed in order to achieve a desirable balance between stock status, ecosystem, economic, and social objectives. Let us consider certain socioeconomic problems that commonly arise and also some possible solutions:
- Some quota owners do not fish themselves, but instead hire a captain and crew for their boat, or lease their quota units to boat captains who fish for the allocated quantity. These quota owners may be investors that purchased quota (‘Sea Lords’), or may have previously fished but no longer do (‘armchair fishermen’). This may be viewed as problematic because of the income they derive from a public resource without expending current effort, or because fostering stewardship of the resource is not to be expected if those who fish do not have a long-term stake in it. Some catch share systems prevent this practice from occurring by requiring that quota owners are on-board during all or at least some fishing trips.
- When catch share systems are first implemented, small fractions of the total quota are typically allocated a large number of quota holders, but if catch share units can be sold then consolidation of quota units often occurs. This may be viewed as problematic because of the inequitability that arises, with either the most successful fishermen outcompeting and buying out other fishermen, or as external investors buy quota from several fishermen and amass a large number of quota units. Some catch share systems prevent this by imposing concentration limits on the number of quota units that any one owner may hold, whether that owner is an individual, a cooperative, or a company.
- When catch shares are implemented, quota units are typically allocated among participants in the fishery in years leading up to implementation, and the proportion allocated to each quota holder is typically considered a permanent share, if not in law then in practice. This is often viewed as problematic for two reasons. First, this represents a free and permanent gifting of monetary value derived from a public resource; quota holders could stop fishing and still derive income by leasing their quota. Second, if all quota units are allocated at the time of catch share implementation, this may pose a barrier for new entrants if the price to purchase quota units is prohibitive. One possible solution may address both of these problems. The quota unit proportions allocated initially to each holder do not have to be permanent percentages, they can be slightly reduced each year and transferred to an available pool. The quota units in the available pool can then be auctioned off, either to new entrants or to existing quota holders who wish to maintain or increase their proportional allocation. The money generated from such auctions can be directly used for costs involved with research, management, and enforcement of the fishery.
These examples are only some of the problems that have been identified about catch share management. But like the above examples, catch share systems can be designed to alleviate such problems. Like any other fisheries management tool, catch shares are not a panacea, but if they are well-designed they do have the potential to contribute to meeting widespread management objectives and stakeholder values.
List of studies on catch share management
Essington, TE. 2010. Ecological indicators display reduced variation in North American catch share fisheries. Proceedings of the National Academy of Sciences of the United States of America 107: 754-759.
Essington TE, Melnychuk MC, Branch TA, Heppell S, Jensen OP, Link JS, Martell SJD, Parma AM, Pope JG, and Smith ADM. 2012. Catch shares, fisheries, and ecological stewardship: a comparative analysis of resource responses to a rights-based policy instrument. Conservation Letters 5: 186-195.
Melnychuk MC, Essington TE, Branch TA, Heppell S, Jensen OP, Link JS, Martell SJD, Parma AM, Pope JG, and Smith ADM. 2012. Can catch share fisheries better track management targets? Fish and Fisheries 13: 267-290.
Melnychuk MC, Essington TE, Branch TA, Heppell S, Jensen OP, Link JS, Martell SJD, Parma AM, and Smith ADM. 2016. Which design elements of individual quota fisheries help to achieve management objectives? Fish and Fisheries 17: 126-142.