New participants will be able to get catch shares

Commercial fishing in America is a heritage, passed down from parents to children, from generation to generation in our fishing communities and catch shares support that heritage.

Catch shares not only ensure there is fish available to catch for future generations, but in addition, they can, and should, be designed with an eye to access for future generations. In fact, many catch share fisheries have already done just that and the next generation is beginning to build viable fishing businesses.

More and more catch shares include provisions like share holdbacks or redistribution requirements. At the same time, fishermen looking to enter the fishery have more and more chances for financial assistance.

Good design makes catch shares accessible to new members

All fisheries require some upfront cost to participate. Traditionally-managed fisheries generally require a permit, gear and a vessel. Catch share fisheries generally require shares, gear and a vessel. So the key difference is the cost of a permit versus the cost of shares. Shares do usually cost more than a permit in non-catch-share fisheries, but that's because they are more also valuable – the fish stocks are healthier, access is more secure and fishermen are able to create more profitable businesses under catch shares.

That does raise important concerns that catch share fisheries will be prohibitively expensive for new participants to gain access to.¹ But good design can help provide an effective path for new fishermen to become privilege holders. Options in use today include:

• Share Holdbacks: During the initial allocation of catch shares, a reserve number of shares could be held back from distribution for the purposes of making them available at a later date for new entrants. For example, 80% of the available shares or catch limit could be initially distributed as shares, with 20% held in reserve to be distributed later. Another approach would be to hold back a portion of the shares for leases only, which would be cheaper on an annual basis – and could even lead to lease-to-own provisions.
• Leasing: Many catch share programs allow leasing of shares on an annual basis. Leasing costs less than purchasing shares and is a lower-cost way for participants to start building a fishing business. By leasing shares, new participants have the ability to go fishing without having to make a large investment into the outright purchase of shares.
• Financial Assistance: Similar to homes or cars, shares are being treated more and more as a bankable asset that can be borrowed against. Some lending institutions offer loans to new entrants using purchased shares as collateral. At the same time, there are more opportunities like those offered by the California Fisheries Fund, which invests in fisheries working to become sustainable.
• Cooperatives and Community-based Catch Shares: Catch shares can be allocated to a group of fishermen and/or a community. Then, each group can develop their own approach for accommodating new entrants, including some of the ideas outlined above. The Cape Cod Fisheries Trust does just this, buying groundfish and scallop permits and leasing them to qualifying Cape Cod fishermen.²

These options are happening now. For example, the Pacific Groundfish Trawl Individual Fishing Quota Program, approved by the Pacific Fisheries Management Council in 2008 and scheduled for implementation in 2011, includes an Adaptive Management Program, which retains up to 10% of the shares to promote public trust purposes, including assisting skippers and crew in acquiring shares.³ New England is considering sectors, or a group-based approach, for the groundfish fishery and these sectors can determine how to accommodate new participants in the future.

There may be other approaches to consider as well. Some options on the table include redistribution of shares revoked for illegal activities or a periodic redistribution of a small percentage of all participants’ shares. The key is to identify an approach that will both facilitate the future of fishing, and ensure fairness to existing shareholder.

Bottom line

Deliberate design to ensure longevity of fishing heritage through catch share fisheries is essential. There are a number of approaches to consider and a plan for accommodating new participants should be included from the beginning.