Processor Quotas Threaten Individual Fishing Quotas

Forcing crab fisheries to sell is bad policy

In politics, good and bad policies too often get rolled into one. Such is the case with Alaska crab fisheries. Alaska Sen. Ted Stevens is backing individual fishing quotas for crabbers – a good policy – but forcing them to sell most of their catch to a small group of established processors – a bad policy.

This will hurt not only Alaska and West Coast crabbers who ply the waters of Alaska but other fishermen as well. All along the West Coast, fishermen who go after bottom fish such as Dover sole and sablefish are in desperate need of IFQs to bring back their fisheries – but not at the daunting price of a very limited market to sell their fish. Yet this is what the powerful senator is offering crabbers – and it could set a chilling precedent.

Stevens has offered his deal to crabbers as a rider to the omnibus appropriations bill that Congress must approve by Jan. 31. It comes when Alaska’s crab fisheries and many other fisheries are in dire straits. Traditional approaches to managing U.S. fisheries – shortened seasons, restrictions on vessels and gear, and closed areas – have not stopped the buildup of excess capacity and overfishing in at least a third of commercially fished stocks in U.S. waters. And they often result in a dangerous race for fish, as Alaska crabbers can attest.

IFQs stop the race for fish by assigning individual fishermen specific shares of the total allowable catch set each season by managers. With IFQs each fisherman knows his or her allotted catch, so there is no need to race other fishermen for a share. In addition, managers can extend seasons beyond the four- to six-day openings common in Alaska crab fisheries since they know that the overall catch is capped by limits on individual catches.

An illustration of the effectiveness of IFQs is Alaska’s halibut fishery. In the early 1990s, halibut fishermen were limited to fishing during just three 24-hour fishing openings a year. Not only did profits fall and most of the catch have to be frozen, but halibut fishermen had to fish in bad weather, resulting in loss of life. When IFQs were adopted in 1995, fishery managers extended the season to 245 days. Fishing became more profitable and safer.

Indeed, studies of fisheries in New Zealand, Iceland, Australia and Canada show that those with IFQs register higher profits, better stock management, less bycatch, improved safety and greater cooperation with government officials than traditional regulatory regimes.

Unfortunately, only four federal fisheries in the United States use IFQs today. The last time the Magnuson-Stevens Act (the nation’s over-arching fishery legislation) was reauthorized, a temporary moratorium was imposed on new IFQs. The moratorium has expired, but politics have prevented more IFQs.

This situation is especially unfortunate for Alaska crab fishermen, who participate in one of the world’s most dangerous fisheries. Short seasons increase the danger by limiting options for fishermen in deciding when to fish. But IFQs will allow managers to extend seasons so crab fishermen can fish during safer weather.

For Stevens, there is another issue – how to compensate processors who invested in plant capacity to meet the needs of short fishing seasons. If IFQs are implemented and seasons extended, some processors will have lots of excess capacity (like extra freezer space) and less control over prices because fishermen will be able to choose when to fish. The rider would allow crab fishermen to have IFQs, but they will have to deliver 90 percent of their catch to a handful of processors.

This rider has drawn protests. The Justice Department argues that it is anti-competitive and would not stand up to antitrust law. And Sens. John McCain, R-Ariz., and Olympia Snowe, R-Maine, have criticized Stevens for attaching a precedent-setting policy issue to an appropriations bill.

Surely, better options – like a stranded capital buyout program or simply including processors in the allocation of IFQs – exist for compensating processors who were steered by flawed government policy to invest in redundant capacity. Let’s save IFQs.

Donald R. Leal is a senior associate of the Property and Environment Research Center

Michael De Alessi is director of natural resource policy at Reason Foundation