(WASHINGTON – December 12, 2014) Fishermen from Bellingham, Washington to Morro Bay, California celebrated a rare, bipartisan legislative victory today, as the Revitalizing the Economy of Fisheries in the Pacific Act (“REFI Pacific Act”), passed in the U. S. Senate.
The Act lowers the interest rate on a 2003 federal loan that reduced the size of the West Coast groundfish trawl fleet. Payments on the federal loan are automatically deducted each time a vessel delivers its catch to a processing plant in Washington, Oregon or California. Whiting fishermen who deliver their catch to “motherships” also make automatic payments.
When the fleet’s size was reduced through the industry-sponsored voluntary buyback in 2003, the interest rate on payments was set at 6.97%, significantly higher than current rates. The REFI Pacific Act resets the interest on the loan to the Treasury rate and extends the loan term to 45 years
“It’s very encouraging to see a bill like this make it through Congress with support from both parties,” said Michelle Norvell, executive director of the Fort Bragg (CA) Groundfish Association. “It gives small-boat fishermen a bit of breathing room while we continue to seek solutions to high regulatory costs associated with the fishery. With passage of this legislation, fishermen are in a better position to stick with the fishery during rough periods, and weather the changes ahead.”
Total annual savings to the fleet of approximately 120 active vessels is estimated at over one million dollars per year. That figure could increase as the fishery stabilizes and fishermen see higher revenues.
Conservationists joined with fishermen in welcoming passage of the Act. “West Coast trawlers generally had a good year in 2014, with major sustainability announcements that recognize strong conservation practices employed by fishermen. The fleet is positioned for a turnaround, but operating costs do threaten the future of this fishery,” said Shems Jud, west coast regional director, oceans, EDF. “The REFI Pacific Act comes at the right time. Going into 2015 we are guardedly optimistic, and this bipartisan legislation is one reason for that.”
Chief sponsors of the Act were Rep. Jaime Herrera Buetler (R-WA) and Senator Maria Cantwell (D-WA). Additional House members who championed the legislation included Peter DeFazio (D-OR) and Jared Huffman (D-CA). These legislators, along with the Act’s several cosponsors, represent West Coast ports that depend on a vibrant commercial fishing industry.
“This was a good-government issue, as well as a business-cost issue.” said Heather Mann, of the Midwater Trawlers Cooperative. “When the loan was originally made, the government tacked on a risk premium, as if they are in business to make a profit for shareholders. But that’s not the role of government in a buyback. There is effectively zero risk when loan payments are deducted at the time of delivery.”
Exacerbating the buyback’s cost burden to fishermen, the National Marine Fisheries Service failed to implement a system for repaying the loan for more than 18 months after it was authorized. That resulted in over $4 million in additional interest costs to fishermen.
“This is like your bank lending you the money for a home, and then refusing to tell you where to mail your payments,” continued Mann. “So, with over $20 million in payments made, and still owing nearly as much as we borrowed initially, the bill’s sponsors understood how important this was to the future of our industry. Refinancing this debt under more favorable conditions is critical for the West Coast fleet.”
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