The Pacific Weathervane Scallop (Patinopecten Caurinus) Is One of Several Scallop Species

The Alaskan Weathervane Scallop Fishery Management History and Cooperative Agreement

SMS 551 Togue Brawn, Kevin Scheirer May 8, 2002 Abstract:

Economists espouse the value of property rights in fisheries management. Their critics assert that property rights do not generate adequate conservation incentives, especially for species indirectly affected by harvesting such as bycatch. The Alaskan Weathervane Scallop

Cooperative provides an interesting example in which security of harvest rights were instrumental in generating incentives to reduce bycatch. The Alaskan Weathervane Scallop fishery has traditionally experienced problematic levels of crab by-catch. The Alaska

Department of Fish and Game manages the weathervane scallop fishery by dividing the entire harvest range into nine areas. Two types of annual quotas (Guideline Harvest Levels, or

GHL’s) are assigned for each area – one for scallops and one for Tanner crabs (bycatch). The directed fishery for scallops must cease once either of these quotas is reached. The fishery was traditionally prosecuted under an open-access “Olympic” mode, with harvesters rushing to take as large a share of the scallop quota as possible before the fishery was closed. Season length was short, and crab limits were often reached, resulting in area closures before the entire scallop GHL was harvested.

In 2000, vessel owners were given the right to manage the fishery (subject to the approval of the ADF&G). A group of these owners began to do so, and negotiated a cooperative agreement that divided rights to the resource amongst all permit holders. The security of these rights allowed them to generate innovative incentives resulting in a substantial reduction of by-catch and an expanded fishing season.

2 Introduction:

The Alaskan Weathervane Scallop Fishery operated as an “Olympic fishery” from its inception in the 1980’s until 2000. The fishery was divided into several areas, each of which was monitored by the Alaska Department of Fish and Game. Areas were assigned yearly quotas of both the directed species and of several crab species, and were closed once either of these quotas was reached. Season length was short, and harvesting was often inefficient. In areas in which crab bycatch was common, the fishery was often closed (due to attainment of the crab bycatch quota) before the entire scallop quota had been harvested.

In 2000, the nine vessel owners were issued permits to fish for scallops in federal waters under a federal license limitation plan. Six of these owners were able to negotiate a cooperative agreement to rationalize the fishery. As part of this agreement, scallop and crab

GHL’s in each area were divided among harvesters. Each cooperative member received an individual allotment of this quota.

A portion of crab and GHL was also left unassigned to cover what the 3 non-coop vessels were expected to catch. A unique aspect of this cooperative contract is that each management area was assigned one of three designations: “scallop-only”, “crab-only”, or “dual priority”.

In a scallop-only area, members of the coop were allowed to fish until they had caught their individual scallop quota. In a mixed area, amember would have to stop fishing once either its scallop or crab quota had been reached. In a crab-only area, a member’s scallop landings were limited by only two factors: their individual crab quota and the entire cooperative’s scallop GHL. A vessel could potentially fish until the entire cooperative’s scallop allocation had been reached, provided they kept from catching their individual allotment of crab bycatch.

3 This system created a unique incentive to reduce crab by-catch. Results from 2000-

2002 show that each area’s season has been significantly lengthened, and that crab by-catch has been significantly reduced in both mixed and crab-only areas.

Theoretical Background:

Gordon (1954) explained that an open-access fishery provides no rents. Newcomers will enter a fishery as long as rents can be realized. Increasing numbers of fishermen will increase the competition to catch available fish. This competition will increase the costs of harvesting. The process will not stop until total revenues are equal to total costs.

Scott (1955) proposed sole ownership as a solution to the open access problem.

However, (western) fishing tradition presents both cultural and legal obstacles to sole ownership of a fishery. Economists have therefore produced the concepts of limited entry and individual transferable quotas.

Limited entry and ITQ’s do not always solve the inefficiency problem. Harvesters are able to dissipate potential rents through rent-seeking behavior. Alternatives to government regulation are attractive, but often the transactions costs involved in private bargaining are too high. Any agreement will produce losers and gainers. The potential losers will spend time and money to prevent the agreement from being enacted. The bargaining and/or legislative process can go on indefinitely with no meaningful results. According to Townsend

(unpublished), most of the world’s fisheries operate inefficiently due to government failure and rent seeking by harvesters.

4 Limited entry and ITQ systems create use rights. These rights create an ability to bargain that is absent in an open access fishery. In open-access fisheries, bargaining is difficult to impossible. Rights to the resource are unclear, and any time a deal is struck, a new player can enter the game and force a new bargain. Because rights are uncertain, each fisherman’s incentive is to harvest as much as possible as quickly as possible. When use rights are established, bargaining can take place. Rights to fish can be traded, and a more efficient allocation of rights can be established. When ITQ’s are created and bargaining is unrestricted, a workable solution to the open access problem can result.

This solution has been applied in “producer cooperatives.” The precedent for these cooperatives is seen in the Pacific whiting fishery (Townsend, unpub). Four catcher- processors participated in an Olympic fishery up until the mid-season of 1997. At this point a membership agreement, which allocated shares of quota, came into effect. The result was a reduction in capacity, lower bycatch, higher recovery rate, and higher quality product in successive seasons. The membership agreement was made possible by the allocation of a fixed share of the total catch by the Pacific Fishery Management Council.

The Bering Sea pollock fishery provides another example of private bargaining buttressed by fisheries management. The American Fisheries Act of 1998 authorized producer cooperatives for the three sectors of the pollock fishery. The AFA created an agreement that dramatically reduced offshore capacity and quota allocation. This decrease in capacity resulted from a buyout of nine offshore vessels financed by the inshore fleet.

Bargaining between the catcher/processor cooperative and the catcher cooperative produced a significant reduction in the capacity of both sectors by 2000. Harvest rates slowed, product

5 recovery increased, and higher quality product was marketed. Operating season increased and total quota decreased from 1998 to 1999.

Many Alaskan fisheries are plagued by a bycatch problem. Non-targeted species can be caught as a by-product of the directed fishery. In some fisheries a quota is assigned for the bycatch as well as the target species. If the bycatch quota is reached, the fishery is closed regardless of the harvest level of the directed fishery. In fisheries with directed species quotas and by-catch limits, both quotas must be taken into account when private bargaining occurs.

If the bycatch question is not addressed, the fishery risks closure before the targeted species quota is reached, and inefficiency persists.

The Weathervane Scallop:

The Pacific weathervane scallop (Patinopecten caurinus) is one of several scallop species found in the eastern North Pacific Ocean. Its distribution ranges from Point Reyes,

California, to the Pribilof Islands of Alaska. The highest known densities in Alaska have been found in the Bering Sea, off Kodiak Island, and along the eastern gulf coast from Cape

Spencer to Cape St. Elias (North Pacific Fishery Management Council, February 2000).

Weathervane scallops become sexually mature at age 3 or 4 and are commercially harvestable at age 6 to 8. Spawning times vary with latitude and depth. Alaskan weathervane scallops spawn between May and July depending on their location. Eggs and spermatozoa are released into the water column. Fertilized eggs settle to the bottom where they hatch after approximately one month. The larvae rise into the water column and drift with currents. After approximately one month, the larvae settle to the bottom. Within four to eight weeks after settling, they take on the adult form. Growth is very rapid in the first few years. Weathervane

6 scallops experience only limited growth beyond age 10. They are long-lived; individuals may live 28 years or more (North Pacific Fishery Management Council, February 2000).

Weathervane scallops are found on sand, gravel, and rock bottoms from the intertidal zone to 200 meters. The greatest abundance occurs between 40-130 meters. The majority of fishing effort occurs between 73 and 110 meters. Fisheries occur in discrete areas of concentration. Survey data confirms that although weathervane scallops are distributed all along the coast of Alaska, commercial quantities are found only in the areas currently exploited (North Pacific Fishery Management Council, February 2000). In areas where scallop surveys have been conducted (Cook Inlet and Prince William Sound), scallops were very concentrated in beds, and nearly absent in adjacent areas (North Pacific Fishery

Management Council, February 2000). The longevity and low mortality rate of the species suggest they may be susceptible to local and general over-fishing (National Marine Fisheries

Service, North Pacific Fisheries Management Council, Alaska Department of Fish & Game,

July 1996).

Fishery and Management History:

Note: much of the information in the following section came from both personal communication with and written documents of Jeff Barnhart of the Alaska Department of Fish and Game.

Government research and private exploratory vessels began to evaluate the commercial potential of the Alaskan weathervane scallop in the early 1950s. When Georges

Bank scallop catches declined in the late 1960’s, interest in the Alaskan resource grew. The commercial fishery began in 1967 when two vessels began harvesting scallops east of Kodiak

7 Island. In 1968, 19 vessels harvested almost 2 million pounds of shucked meats. From 1967 to 1973, virgin scallop beds throughout the state were identified and exploited. Harvests began to decline in 1974 to 1980. A smaller, more stable fishery took place throughout the

1980s. The fishery experienced a second influx of east coast vessels in 1990, when the character of the fleet began to change. Vessels converted from icing to on-board freezing capabilities. Short trips with many deliveries each season were replaced by long trips with few deliveries. By 1996, all vessels fishing for Alaskan weathervane scallops were converted to catcher-processors. The average number of deliveries went from 133 (1990-1994) to 21

(1996-1999).

Before 1990, about two-thirds of the scallop harvest was taken off Kodiak Island and one-third from the Yakutat area. Harvests from other areas made only minor contributions to overall landings. New exploitation in the Bering Sea led to increased harvests in the1990s.

Currently, the fishery occurs almost entirely in federal waters, but some fishing occurs in state waters off Yakutat, Dutch Harbor, and Kodiak (Figure 1; pg.11, Kruse et al, 1999).

The North Pacific Fishery Management Council did not exercise its management authority over the Alaskan weathervane scallop resource until the early 1990’s. Until that time, they believed state management was sufficient and federal duplication unwarranted.

The state plan had no harvest restrictions, and was open 10 months of the year.

By 1992, management agencies became concerned with what they believed was excessive fishing capacity in the fishery. At the January 1993 Council meeting, information was presented that indicated a dramatic change in age composition, with resulting decreases in landings. Small scallops were an increasing percentage of the catch. Fishermen had begun to abandon historical fishing areas to search for new areas to maintain catch levels. These

8 events were particularly troubling due to scallops’ high susceptibility to local depletion and boom/bust cycles worldwide (Department of Commerce Federal Register 50 CFR Part 679).

The ADF&G believed the maximum sustainable yield for scallops had potentially been exceeded. They responded with an interim fishery management plan, which has not changed significantly since 1995. Dredge size is limited to a maximum of 15 feet, and only 2 dredges can be used at any one time. In the Kamishak District of Cook Inlet, only one dredge with a 6-foot maximum width is allowed. Dredges must have rings with a 4” minimum inside diameter. To reduce incentives to harvest small scallops, crew size on scallop vessels is limited to 12 persons and all scallops must be manually shucked. Dredging is prohibited in areas designated as crab habitat protection areas. All vessels must carry an on-board observer

(100% coverage) to monitor biological and effort data.

The Council believed a vessel moratorium was essential to stabilize the size and capacity of the fleet. The state did not have the authority under the Magnuson-Stevenson Act to restrict access in federal waters, and existing state statutes precluded a state vessel moratorium. Federal action was necessary to implement any sort of limited entry plan.

The need to limit access was the primary motivation for the Council to begin consideration of federal management of the scallop fishery. At its January 1993 meeting, it announced to the industry that a vessel moratorium was being considered and that any new participants in the fishery after January 20, 1993 might not be eligible for a license. As anticipated, effort in the fishery increased. 32 permits representing 21 vessels were issued in

1993. 15 of these vessels had made landings by the end of the year.

Even without additional vessels entering the fishery, the fleet was overcapitalized. In

1992, 7 vessels harvested 1.8 million pounds for an average of 257,142 pounds per vessel.

9 The 1993 quota was set at 890,000 pounds for areas with specified guideline harvest levels

(GHL) – about one half of 1992 landings. Efficient harvesting of the quota could have been done by only three to four vessels. Landings estimates for areas without GHLs totaled

524,000 pounds, which could have been harvested by another two vessels. 15 vessels took part in the 1993 fishery. Too much capital was invested relative to the size of the resource.

The trend continued in 1994, with 16 vessels harvesting 1.2 million pounds of scallops.

(National Marine Fisheries Service, 1995.)

In 1994, the Council began to exercise its authority over the Alaskan scallop resource.

They adopted a draft Fisheries Management Plan that established a vessel moratorium and left other management decisions to the state. Management was left to the state under the assumption that all vessels fishing in federal waters off Alaska would also be registered with the state. The Council recognized that vessels not registered with the state could potentially fish in federal waters. However, at the time, all vessels fishing for scallops in Federal waters were registered in Alaska, and no information was available to indicate that vessels would not continue to register with the state (Federal Register Vol. 65, No. 78, April 21, 2000).

While the proposed FMP was being developed into a permanent plan, a problem surfaced. A vessel without a state registration began fishing for scallops in federal waters.

These waters had previously been closed to scallop fishing because the Guideline Harvest

Level of 50,000 pounds of shucked meats had been reached. The state was unable to stop the uncontrolled fishing despite the closure because the vessel was not registered with the state, and was therefore not subject to their authority. The U.S. Coast Guard boarded the vessel and found 54,000 pounds of shucked meats on board. This amount, combined with legal landings,

10 meant the state’s GHL for the Prince William Sound Registration Area was exceeded by over

100 percent.

In February of 1995, the Council requested that NMFS implement an emergency rule to close federal waters to scallop fishing. NMFS approved the request and closed federal waters off Alaska to fishing for scallops on February 23. The Council recognized the inadequacies of their first draft, and did not submit it for review by NMFS. However, unless a new plan were approved and established, unregulated fishing could commence at the emergency closure’s August expiration date. The Council’s solution was to draft a second

FMP. The only management measure implemented under this FMP was an interim one-year closure of federal waters off Alaska to scallop fishing. This FMP allowed the Council more time to develop a federal scallop management program.

Management measures have come in the form of amendments to the original plan.

The first of these amendments was approved by NMFS on July 10, 1996. Amendment 1 established a joint state-federal management regime under which NMFS implemented federal scallop regulations that duplicated most state scallop regulations, including definition of registration areas and districts, seasons, closed areas, gear restrictions, efficiency limits, crab bycatch limits, scallop catch limits, in-season adjustments, and observer coverage requirements. The joint management regime was designed as a temporary measure to prevent unregulated fishing in federal waters until changes in the Magnuson-Stevens Act would enable to Council to delegate management of the fishery to the state. Federal waters were re- opened in August of 1996.

Amendment 2 was passed on April 11, 1997. It established a temporary moratorium on the entry of new vessels into the scallop fishery in federal waters off Alaska. To qualify

11 for a permit to fish, a vessel must have made a legal landing of scallops in 1991, 1992, or

1993, or during at least 4 years from 1980 through 1990. 18 vessel owners qualified for moratorium permits. The moratorium was to remain in effect until June 30, 2000, or until replaced by a permanent limited entry system.

Amendment 3 was passed on July 17, 1998. It delegated all management authority except limited access to the state. Joint management proved cumbersome. Every management action, including openings, closures, etc., had to be coordinated so that state and federal actions were simultaneously effective. State management was constrained in its ability to respond quickly to management needs because all actions needed to be coordinated with federal authorities. The system was put into place only because the Magnuson-Stevens

Act did not at the time allow state management of federal waters. The Sustainable Fisheries

Act of 1996 amended section 306 of the Magnuson-Stevens Act to allow Fisheries

Management Councils the authority to delegate management to the state. As a result,

Amendment 3 was passed on July 17, 1998, which delegated all management authority except limited access to the state.

In 1996, scallop industry members proposed an LLP to limit access to the fishery.

They believed they would suffer economic hardship if latent capacity were activated. The

Council developed six alternatives and two options for the LLP. These alternatives ranged from no action, which would result in open access to the scallop fishery, to programs that would issue between nine and 18 licenses. The Council preferred a program was that would issue nine licenses.

Amendment 4 was approved on June 8, 2000. It established a license limitation program to replace the federal moratorium. Vessel owners who held a federal or state

12 moratorium permit in February of 1999 were eligible to apply for a license if they made legal landings of scallops between January 1, 1996 and October 9, 1998. 9 vessel owners met the criteria and were issued licenses.

Amendments 5 and 6 were responses to requirements in the revised Magnuson-

Stevens Act. Amendment 5 described and identified essential fish habitat for the scallop fishery, and included provisions to minimize adverse effects on this habitat caused by fishing.

Amendment 6 provided the tools to prevent over-fishing and to achieve the optimum yield defined in the Magnuson-Stevens Act revision.

13 Current Management and the Cooperative Agreement:

The Alaska Department of Fish and Game (ADF&G) divides the scallop fishery into 9 management areas and sets a guideline harvest level for each. This GHL is an amount of shucked scallop meats equal to the estimated optimum sustained yield for each area. In addition, ADF&G limits the incidental catch of crab in each area to a specific number of crabs. This bycatch limit is intended to limit scallop fishing’s impact on crab stocks.

The fishing season opens July 1 and extends until February 15 if GHLs are not attained or if not otherwise closed by emergency order. Vessels must carry onboard observers who detail information on catch per unit effort, area and depth fished, location, scallop meat weight recovery, and catch composition. Data is also collected on crab and halibut bycatch, retained scallop catch, and discarded scallop catch. Observers also report scallop harvest, number of tows, area fished, and crab bycatch to ADF&G at least three times each week during the season. This data is incorporated into ADF&G’s in-season management decisions.

The region is closed to fishing if either the scallop GHL or the bycatch limit is reached. The fishery can also be closed if the catch per unit of effort declines to a level that suggests the resource is being depleted beyond sustainable levels.

The quotas set by the ADF&G have the unintended consequence of creating an

“Olympic” competition mode. In each area, fisherman rush to harvest as much of the scallop allocation as possible before the quota is reached and the fishery closed. In this situation, vessel owners will not slow their harvest rates in an effort to minimize crab bycatch. They will also not experiment with crab avoidance techniques during the fishing season because by doing so, they would risk losing harvesting opportunities to their competitors (other vessels).

As a result, the overall scallop GHL has been historically under-harvested by approximately

14 30%. Crab bycatch has typically exceeded the amount that is likely to be achievable under rational management.

In June of 2000, a group of scallop vessel owners formed a cooperative with the goal of reducing inefficiency in the fishery. Although nine permits were issued under the Federal

LLP, only six of these permit holders elected to join the cooperative (of the three non- participants, one individual took part in the negotiation of the agreement but declined to sign, one declined in writing, and one did not respond to the request to negotiate (Kandianis, personal communication). The six vessels that did take part felt they represented enough of the harvesting power (two of the non-participants had a minimal harvest capacity) to effect an impact and significantly reduce the inefficiencies of the fishery. By allocating scallop catch and crab bycatch among themselves, they could increase the quantity of scallops harvested and eliminate the derby fishery. By determining their share of the quota in advance, vessel owners are able to make more rational decisions about their fishing methods. The incentive to compete with other fishermen is reduced.

Scallop GHLs and crab bycatch limits are determined each year by the ADF&G.

Under the cooperative agreement, vessels are assigned a predetermined percentage of these figures. If a member receives n percent of the scallop GHL for an area, they will also receive n percent of the crab limit for that area.

Tanner and king crabs are more prevalent in some areas than in others. Where crabs are abundant, the bycatch limits are more likely to be reached, resulting in closure of the fishery. In these areas, harvesters have a strong incentive to decrease their take of crabs.

Doing so allows them to harvest a greater percentage of the scallop GHL before the fishery is

15 closed. In other areas, the crab bycatch limit is rarely reached, and there is little if any incentive to decrease crab bycatch.

The cooperative agreement contract accounts for these differences by “managing by species”. Each area is designated as “scallop-only”, “dual priority”, or “crab-only”. In

“scallop only” areas, each member’s fishing activity is governed by its scallop allocation for the area. For example, if a vessel is assigned 20,000 pounds of scallops for that area, they stop fishing once that harvest is achieved. In “dual priority” areas, each member’s activity is governed by its scallop allocation and crab allocation. If a vessel is allocated 20,000 pounds of scallops and 1000 crabs in a “dual priority” area, they must stop fishing once either of these limits is reached. In “crab only” areas, each member’s activity is governed solely by their crab bycatch allocation. If a member is allocated 1000 crabs, they can continue to fish for scallops until they capture 1000 crabs or until the entire GHL for the area is reached.

The “crab-only” areas create a strong incentive to reduce crab bycatch. One vessel is potentially capable of harvesting the entire GHL for the area if they are able to do so without reaching their crab bycatch limit. Under these circumstances, it is possible that the directed scallop fishing for an area would be closed before all members had a chance to begin fishing within it. However, to create an incentive to develop techniques to reduce bycatch and thereby promote maximum scallop harvest, each member has acknowledged and consented to this result. This creates the exact opposite of an Olympic fishery: the desire to harvest a greater percentage of the scallop resource actually fosters, rather than hinders, harvesting efficiency.

16 Theoretical Expectations and Discussion:

Prior to the cooperative agreement, each fisherman faced a powerful incentive to harvest scallops as quickly as possible. The GHL for scallops in each area was certain, and represented the maximum possible harvest of all fishermen combined. Each fisherman’s realized percentage of this quota was uncertain. The best way to increase one’s share of the

GHL was to fish quickly so as to harvest as many scallops as possible before the fishery was closed. In areas with assigned bycatch limits, this method of fishing will likely to hasten the fishery’s closure. Fishermen are focused on fishing quickly rather than efficiently, and crab bycatch is likely to be high. As a result, the crab bycatch limit will likely be reached and the fishery closed before the scallop GHL is reached. The difference between the upper limit of the scallop GHL and actual scallop landings represents a loss to society as well as to the individual fishermen.

This situation is a classic example of a collective action dilemma. Each fisherman makes a rational decision to increase his own benefit, and by doing so decreases the benefit to society. Fish could be caught more efficiently and with less crab bycatch. However, it would not be rational for any individual to change his way of fishing unless he could be sure that all others would do the same. If a fisherman changes his methods in a way that slows his harvesting, he will take less of the overall quota unless all others do the same.

The cooperative agreement serves to bring individual and collective incentives into alignment. Each harvester’s percentage of the resource is assured (subject to crab-only area incentives), which allows him to focus on catching this percentage more efficiently. We would therefore expect to see the following results:

17  In “scallop-only” areas, we would expect the season to last longer. With the “race to

fish” incentive removed, harvesters should make more rational decisions concerning

when to fish. We would expect them to extend the fishery over a longer period of

time. However, the fishery takes place on catcher/processor vessels that freeze the

catch at sea. We would therefore not expect to see as dramatic a change in season

length as in a fishery that could take advantage of the price increases available to a

prolonged fresh-fish market.

 In “dual priority” areas, we would expect to see an extension of the season (for the

reason listed above) and a reduction in bycatch. Harvesters will want to ensure they

are able to harvest their full share of the scallop quota. Members must stop fishing in

an area once either their scallop or crab allocation is reached. They therefore face an

incentive to reduce their bycatch to a level that will not prevent them from attaining

their full scallop allocation.

 In “crab-only” areas, we would expect to see a significant reduction in crab bycatch.

Harvesters in these areas are potentially able to harvest the cooperative’s entire scallop

allocation. The only limits to their scallop harvest are the total GHL for scallops and

their own bycatch rate. They therefore face a strong incentive to reduce bycatch.

Data Analysis of Scallop Fishery Characteristics

The cooperative went into effect for the 2000/01 fishing season (Sullivan, unpub).

Observer data for the 1999/00, 2000/2201 and 2001/02 fishing seasons were analyzed to determine if the cooperative agreement had any of the anticipated effects. Data were grouped by area per the format of the data received from ADF&G (Tables 2, 5). This

18 grouping allowed us to examine the cooperative’s relative impact on different area types

(scallop-only, crab-only, dual priority), and also served to protect the confidential nature of vessel landings (ADF&G data, 1999 - 2001).

Scallop GHL’s and crab bycatch limits change each year based on the ADF&G annual stock assessment for each area. As a result, when analyzing annual landings, it is relevant to examine the percentage of the GHL or bycatch limit attained in addition to the actual pounds of scallops or number of crabs landed. For instance, the total number of crabs caught in the

Northeast district increased from 13,612 in 2000/02 to 22,951 in 2001/02. However, the bycatch limit increased to an even greater extent: from 81,000 to 425,000 crabs (Table 2,

Figure 3). This shows that although the number of crabs caught increased, the percentage of the bycatch limit harvested actually decreased.

Tanner crab bycatch data for dual priority and crab only areas (Shelikof, Northeast,

Area M, Dutch Harbor, Bering Sea) showed that the total number of crabs decreased from

1999/00 to 2001/02 (Table 1, Figure 2). The decrease was partially due to the closure in 2000 and 2001 of Dutch Harbor and of Area M in 2001 (Table 2, Figure 3). The mean bycatch increased in 2001/02 because of the increased bycatch in Shelikof and Northeast (Table 2).

Although the actual bycatch in these areas increased, it did so concurrently with a substantial increase in the bycatch limit. (Bycatch limit increased from 42,500 crabs in 1999/00 to 59,000 crabs in 2001/02. The limit in the Northeast increased from 66,500 crabs in 1999/00 to

425,000 crabs in 2001/02 (Table 2)). Importantly, the total proportion of the bycatch limit caught decreased from 99/00 to 2001/02 (Table 3). In “dual priority” areas, harvesters’ incentive is to keep their crab landings below their individual quota in order to harvest their entire individual allotment of scallops. Any effort to further decrease their bycatch would not

19 result in individual gain, as doing so would not increase their potential scallop harvest. This theoretical expectation is borne out by the data analysis of “dual priority” areas. In “crab- only” areas, there is a great incentive to reduce bycatch as much as possible, as doing so increases their potential scallop harvest. This expectation is also borne out by the data. In the

Bering Sea area, which is the only “crab-only” area that remained open throughout the time period analyzed, bycatch (Tanner opilio and bairdi) decreased steadily. The fact that it did so despite fluctuations in the bycatch limits (Table 2, Figure 4) is particularly telling.

Scallop landings showed interesting results for the dual priority and crab only areas.

The total GHL for scallops decreased from 1999/00 to 2001/02 due to area closures and a

GHL decrease in the Bering Sea. Although total scallop landings decreased due to this GHL reduction, both mean landings and percent of GHL harvested increased steadily from 1999/00 to 2001/02 (Table 6). The increase in percent of GHL harvested was due partly to the closure of Dutch Harbor and Area M, which had low catch levels relative to GHL in 1999/00 (Table

5, Figure 6). In addition, the Bering Sea GHL reduction further increased the percent of GHL attained (Table 5, Figure 7).

Season length data were obtained for all areas (Yakutat, Prince William Sound,

Kodiak, Alaskan Peninsula, Dutch Harbor, Bering Sea) for 1998/99 to 2001/02 (Barnhart, personal comm.). Dramatic increases in both mean days open per area and total days open were seen from 1999/00 to 2000/01 (Table 7). This increase continued into the 2001/02 season.

20 Discussion:

As discussed in the “Theoretical Expectations” section, the development of individual quotas for scallop and crab in “dual priority” areas was expected to increase harvest efficiency. Scallop landings (as a percentage of GHL) should theoretically be maximized, and crab-bycatch reduced. Similar efficiency incentives were also present in “crab-only” areas, which would experience an even greater incentive to reduce bycatch. This expectation was borne out: total Tanner crab bycatch did decrease by more than one hundred thousand crabs from 1999 to 2000, and remained stable in 2001 (Table 1; Figure 2). Overall percentage of the bycatch limit landed decreased steadily (Table 3). Although bycatch increased in both

Shelikof and the Northeast (both dual priority), it still stayed well below the bycatch limit, in keeping with the theoretical expectations (Table 2; Figure 3).

The Bering Sea presents an interesting example of just how effective the cooperative agreement’s “crab-only” incentive can be. The Bering Sea has historically been troubled by closures due to attainment of crab bycatch limits. The Tanner opilio limits have recently been increased due to an upsurge in the Tanner crab stock (Bowers, personal comm.; ADF&G,

2001). However, despite the increase in the opilio bycatch limit, actual bycatch (both bairdi and opilio) decreased from 1999 to 2001 (Table 2). Opilio crabs showed the most significant reduction in bycatch of the two tanner crab species (Table 2; Figure 4). It should be noted that

Dutch Harbor (crab only) was closed in 2000 and 2001, and Area M (dual priority) in the

Alaska Peninsula was closed in 2001, both due to declining stocks (ADF&G, unpub data)

(Table 2; Figure 6).

21 As mentioned in the results, the total GHL for scallops decreased from 1999/00 to

2001/02. This was due to area closures and a decrease in GHLs in the Bering Sea and Area

M. Scallop harvest levels in the Kodiak areas fluctuated slightly, but the Bering Sea, Area M, and Dutch Harbor showed more dramatic change in the three years (Table 5; Figures 6, 7).

The Bering Sea is the most dramatic example of the effectiveness of the cooperative agreement’s incentives. It is the only “crab-only” area that was open consistently both prior to and post management. In the 1994/95 fishery eight vessels harvested 505,439 pounds of shucked meats. From that season up until enactment of the cooperative agreement, scallop landings were restrained below those levels by crab bycatch limits. Harvests averaged

127,000 pounds prior to the 2000 season. The 2000 season was the first season since 1994 in which the scallop harvest reached the upper end of the GHL without being restrained by crab bycatch limits (Table 5; Figures 6, 7).

Season length increased significantly in all areas that remained open (Table 7). Even with two areas closed in 2001, the number of days that the fishery was open totaled 1,142, as opposed to 519 in 1999. In Yakutat areas D and District 16, the 2000/01 and 2001/02 seasons lasted for the entire length (July 1 to February 15). These results show the elimination of the

“Olympic” fishery. Fishermen have the freedom to allocate their effort more efficiently over a longer period of time.

In summary, scallop landing and crab bycatch data from 1999 to 2001 provide evidence that the cooperative agreement increased harvesting efficiency while concurrently reducing bycatch.. The hypothesis of increased scallop landings, decreased bycatch, and increased season length was accepted. Scallop landings increased in relation to guideline harvest limits, total crab bycatch declined, crab bycatch decreased in relation to limits, and

22 season length increased dramatically. We would expect that these trends would hold over time.

Acknowledgements

This paper could not have been completed without the diligent tutelage of Professor

Ralph Townsend of the University of Maine, a large volume of documentation from

Jeffrey Barnhart and Forrest Bowers of the Alaska Department of Fish and Game, and

personal communication from Teressa Kandianis of Kodiak Fish Company.

23 Literature Cited

Barnhart, Jeffrey P. 2002. Personal communication and unpublished data. 1997. “Weathervane Scallop Fishery in the Westward Region. A Report to the Alaska Board of Fisheries.” Kodiak: Alaska Department of Fish and Game, Commercial Fisheries Management and Development Division. Gordon, H. Scott. 1954. “The Economic Theory of a Common-Property Resource.” Journal of Political Economy 62: 124-142 Griffin, K., Kruse, G., Lind, K., Low, L-L, and D. Witherell. 1997. “Stock Assessment and Fishery Evaluation Report for the Scallop Fisheries off Alaska.” North Pacific Fishery Management Council document. Kandianis, Teressa, (Kodiak Fish Company) 2003, personal communication. Kruse, Gordon 1994. “Fishery Management Plan For Commercial Scallop Fisheries in Alaska.” Juneau, Alaska: Draft Special Publication No. 5 Alaska Department of Fish and Game Commercial Fisheries Management and Development Division. Kruse, Gordon, Barnhart, Jeffrey P., Rosenkranz, Gregg E., Funk, Fritz C., and Douglas Pengilly. 1999. “History and Development of the Scallop Fishery in Alaska.” Potential Effects of Fishing on Scallops conference, 10-12 June, 1999, Kodiak, Alaska. NMFS. 1995. “Fishery Management Plan for the Scallop Fishery off Alaska.” Environmental Assessment/Regulatory Impact Review/Final Regulatory Flexibility Analysis for the Fishery Management Plan for the Scallop Fishery off Alaska. North Pacific Fishery Management Council. 2000. “Environmental Assessment/Regulatory Impact Review: Initial Regulatory Flexibility Analysis for Amendment 4 to the Fishery Management Plan for the Scallop Fishery off Alaska to establish a License Limitation Program.” 1996. “Environmental Assessment/Regulatory Impact Review: Final Regulatory Flexibility Analysis of Amendments 1 and 2 to the Fishery Management Plan for the Scallop Fishery off Alaska.” Scott, Anthony. 1955. The Fishery: The Objective of Sole Ownership. The Journal of Political Economy 63: 116-124. Sullivan, Joseph. Unpub. “Confidential Membership Agreement Cooperative for the Scallop Fishery off Alaska.” Shirley, Susan M. and Gordon H. Kruse, 1995. “Development of the Fishery for Weathervane Scallops, Patinopectin caurinus in Alaska.” Journal of Shellfish Research 14: 71-78. Townsend, Ralph. Unpub. “Producer Organizations and Agreements in Fisheries: Integrating Regulation and Coasian Bargaining.” 39pp. U.S. Department of Commerce. 2000. “April 21, 2000: Federal Register 50 CFR Part 679 Fisheries of the Exclusive Economic Zone off Alaska; License Limitation Program for the Scallop Fishery.”

24 1999. “Amendment 2 to the Fishery Management Plan for the Scallop Fishery off Alaska.” 1999. “Environmental Assessment for Amendment 6 to the Fishery Management Plan for the Scallop Fishery off Alaska.” 1998. “Environmental Assessment of Amendment 3 to the Fishery Management Plan for the Scallop Fishery off Alaska.”

25 List of Figures

Figure 1: Alaskan Scallop Fishing Grounds (pg. 11, Kruse, et al, 1999)

Figure 2: Dual Priority and Crab only Areas: Tanner Crab By-Catch vs. By-catch Limits, 1999/00 -2001/02

Figure 3: Dual Priority and Crab only Areas: Tanner Crab Bycatch by Area, 1999/00 - 2001/02

Figure 4: Bering Sea “Crab Only” Area: Tanner opilio and bairdi Bycatch and Limits, 1999/00 – 2001/02

Figure 5: Dual Priority and Crab only Areas:Scallop Landings and Scallop GHL 1999/00- 2001/02

Figure 6: Dual Priority and Crab only Areas: Scallop Landings by Area, 1999/00 – 2001/02

Figure 7: Bering Sea “Crab Only” Area: Scallop Landings and Limits, 1999/00 – 2001/02

26 27 Table 1: Crab By-catch Statistics in Dual Priority and Crab only Areas, 1999 -2001

YEAR 1999/00 2000/01 2001/02 Total (Number of crabs) 307,137 189,178 181,585 Mean (Number of crabs) 51,190 37,836 45,396 Bycatch Limit (Number of crabs) 560,200 387,500 849,000 Percent of Limit (bycatch/limit x 100%) 54.83% 48.82% 21.39%

Table 2: Tanner Crab Bycatch and Limits by Area per Fishing Season in Dual and Crab-only Areas: 1999- 2001 1999/00 1999/00 2000/01 2000/01 2001/02 2001/02 Fishing Area Catch Limit Catch Limit Catch Limit Shelikof (dual) 38,893 42,500 13,805 49,000 28,835 59,000 Northeast (dual) 13,886 66,500 13,612 81,000 22,951 425,000 Area M (dual) 28,160 75,500 2,545 42,500 0 0 Dutch Harbor (crab) 4,274 10,700 0 0 0 0 Bering Sea bairdi 62,268 65,000 53,614 65,000 48,050 65,000 (crab) Bering Sea opilio 159,656 300,000 105,602 150,000 81,749 300,000 (crab) Total 307,137 560,200 189,178 387,500 181,585 849,000

Table 3: Percent of Tanner Crab Bycatch Limit Caught by Area per Fishing Season: 1999-2001 Fishing Area 1999/00 % of Limit 2000/01 % of Limit 2001/02 % of Limit Shelikof (dual) 91.51% 28.17% 48.87% Northeast (dual) 20.88% 16.80% 5.40% Area M (dual) 37.30% 5.99% 0.00% Dutch Harbor (crab) 39.94% 0.00% 0.00% Bering Sea bairdi (crab) 95.80% 82.48% 73.92% Bering Sea opilio (crab) 53.22% 70.40% 27.25% Total 54.83% 48.82% 21.39% Table 4: Scallop Landing Statistics in Dual Priority and Crab only Areas 1999-2001

YEAR 1999/00 2000/01 2001/02 Total (shucked lbs) 512,011 473,232 400,539 Mean (shucked lbs) 102,402 118,308 133,513 GHL (shucked lbs) 965,000 493,000 460,000 Percent of GHL 58.43% 81.49% 90.19%

Table 5: Scallop Landings and GHL by Area per Fishing Season in Dual and Crab-only Areas: 1999-2001 1999/00 1999/00 2000/01 2000/01 2001/02 2001/02 Fishing Area Catch GHL Catch GHL Catch GHL Shelikof (dual) 187,963 180,000 180,087 180,000 179,198 180,000 Northeast (dual) 77,119 75,000 79,965 80,000 80,470 80,000 Area M (dual) 75,535 200,000 7,660 33,000 0 0 Dutch Harbor (crab) 6,465 110,000 0 0 0 0 Bering Sea (crab) 164,929 400,000 205,520 200,000 140,871 200,000 Total 512,011 965,000 473,232 493,000 400,539 460,000

Table 6: Percent of Scallop GHL Landed by Area per Fishing Season: 1999-2001 Fishing Area 1999/00 % of GHL 2000/01 % of GHL 2001/02 % of GHL Shelikof (dual) 104.42% 100.05% 99.55% Northeast (dual) 102.83% 99.96% 100.59% Area M (dual) 37.77% 23.21% 0.00% Dutch Harbor (crab) 5.88% 0.00% 0.00% Bering Sea (crab) 41.23% 102.76% 70.44% Total 53.06% 95.99% 87.07%

Table 7: Season Length in Days by Area for 1998 - 2001 Area Open 98-01 1998/99 1999/00 2000/01 2001/02 Yakutat D 1-Jul 3 60 224 224 District 16 1-Jul 3 86 224 224 PWS 1-Jul 3 3 31 220 Shelikof 1-Jul 50 65 91 157 Northeast 1-Jul 91 68 85 197 AK P. Area M 1-Jul 78 88 224 0 Dutch Harbor 1-Jul 224 90 0 0 Bering Sea 1-Jul 63 59 52 120 Mean Days Open 64 65 116 143 Total Days Open 515 519 931 1142

29 Figure 1: Alaskan Scallop Fishing Grounds (pg. 11, Kruse, et al, 1999)

Crab Bycatch and Limits 1999-2001

900 ) s

d 800 n a s

u 700 o h t (

600 s b a r 500 Crab Bycatch C

e 400 Bycatch Limit n n a T

300 f o

r 200 e b m

u 100 N 0 1999 2000 2001

Figure 2: Dual Priority and Crab only Areas: Tanner Crab By-Catch vs. By-Catch Limits, 1999/00 -2001/02

30 Crab Bycatch 1999-2001

175 ) s d n 150 a s u o

h 125 t ( s b a 100 1999 r C

2000 r e n 75 2001 n a T f 50 o r e b 25 m u N 0 Shelikof Northeast Area M Dutch Bering Bering Harbor opilio bairdi

Figure 3: Dual Priority and Crab only Areas: Tanner Crab Bycatch by Area, 1999/00 - 2001/02

Crab Bycatch and Limits for Bering Sea Area 1999-2001

s 300 d

n 275 a s

u 250 o h

t 225 (

b 200 Opilio Bycatch a r 175 Opilio Limit C

e 150 Bairdi Bycatch n

a Bairdi Limit T

f 100 o

r 75 e b 50 m u

N 25 0 1999 2000 2001

Figure 4: Bering Sea “Crab Only” Area: Tanner opilio and bairdi Bycatch and Limits, 1999/00 – 2001/02

31 Scallop Landings and GHL 1999-2001

) 1,000 s b l

900 f o

s 800 d n a 700 s u o 600 Scallop Landings h t (

s 500 Scallop GHL t a e 400 M

d 300 e k c

u 200 h

S 100 0 1999 2000 2001 Figure 5: Dual Priority and Crab only Areas: Scallop Landings and Scallop GHL 1999/00-2001/02

Scallop Landings 1999-2001

) 200 s b l

n 150 a s

u 1999

o 125 h t

( 2000

t 100 2001 a e

k 50 c u h

0 Shelikof Northeas t Area M Dutch Harbor Bering Sea

Figure 6: Dual Priority and Crab only Areas: Scallop Landings by Area, 1999/00 – 2001/02

32 Scallop Landings and GHL for Bering Sea Area 1999-2001

500 ) s b l f 400 o s d n a s

u 300 o Scallop Landings h t (

s Scallop GHL t a 200 e M d e k c 100 u h S

0 1999 2000 2001

Figure 7: Bering Sea “Crab Only” Area: Scallop Landings and Limits, 1999/00 – 2001/02