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Cost of Fishery Management to Private Industry

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Cost of Fishery Management to Private Industry Northeast Groundfish Interim Findings: Economic Indicators Version: February 2014 Cost of Fishery Management to Private Industry This indicator measures the amount of money spent by the fishing industry to comply with catch share program regulations (Cost of Fishery Management to Private Industry: Introduction). Together with Cost of Fishery Management to the Public, this indicator answers the question of whether the cost of fishery management has changed, compared to the period before the catch share program. This page is available online: http://catchshareindicators.org/indicators/northeast/industry-management-costs/ Overview Prior to the Northeast Multispecies Sector Program, the primary management cost to the industry was the implementation of measures for fishery monitoring. This included reporting requirements and vessel monitoring systems. Observer coverage was required for 8 percent of fishing trips, but those costs were covered by NMFS. To date, the costs of catch monitoring under the Northeast Multispecies Sector Program have been primarily funded by NMFS, as was the case prior to program implementation. However, those costs will be transferred to industry in phases. The Northeast Multispecies Sector Program has also imposed new reporting and record-keeping requirements. Northeast multispecies permit holders who join a sector must cover the costs associated with the administration and management of the sector, which may include the cost of ensuring their sector has sufficient allocation for all stocks in the areas they fish. Baseline Period During the baseline period, the costs of catch monitoring were funded largely by NMFS (Cost of Fishery Management to the Public). In particular, NMFS supported the activities of the Northeast Fishery Observer Program (NEFOP). At-sea observer coverage under the program was approximately 8 percent of fishing trips. During the baseline years, reporting and vessel monitoring system (VMS) requirements also added to the compliance costs related to catch monitoring. A vessel fishing under a limited entry Northeast multispecies permit was required to submit a vessel trip report each month. Since 2004, groundfish days-at-sea (DAS) vessels that opted to fish under a groundfish DAS in the U.S./Canada Management Area have been required to fish with a VMS. The cost of purchasing and installing a VMS, along with the associated operational Northeast: Private Cost of Fishery Management February 2014 1 costs, is estimated at $3,600 per vessel. Since 2004, daily electronic reporting of fish purchases has also been required for all federally permitted dealers. Additional compliance costs were associated with gear requirements specified for the groundfish fishery. Those requirements compelled some fishermen to change their fishing practices or to replace or modify existing fishing gear. For example, minimum mesh sizes were initially adopted through interim rules in 2001 and 2002, and made permanent via Amendment 13 (2004). Framework 42 (2007) further modified the mesh regulations in the Southern New England and Mid-Atlantic Regulated Mesh Areas to reduce discards of yellowtail flounder. Catch Share Program The Northeast Multispecies Sector Program created two new components of the NMFS monitoring program for the groundfish fishery—at-sea monitors (ASM) and dockside monitors (DSM). NMFS made an initial determination that to reliably estimate discards and harvests in the groundfish fishery, at-sea coverage on sector vessels would need to approach 38 percent—30 percent through the ASM program and 8 percent with NEFOP observers. In 2010 and 2011, the target coverage level remained at 38 percent. However in 2012, NMFS decreased the target coverage level to 25 percent—17 percent from ASM program and 8 percent with NEFOP observers (Data Quality: Observer Coverage). This coverage reflects the level that NMFS can fund. NMFS concluded that the sector program is not a limited access privilege program (LAPP) (Northeast Multispecies Sector Program). Consequently, the LAPP provision of the MSA—which requires a cost recovery program be implemented for the costs of management, data collection and analysis, and enforcement activities—does not apply to the Northeast Multispecies Sector Program. In developing Amendment 16, however, the New England Fishery Management Council (NEFMC) anticipated that NEFOP might not have sufficient resources to effectively monitor sector catch. For that reason, Amendment 16 specified that starting in 2012 sectors would design, implement and pay for at-sea monitors, unless the agency was able to provide the funding. From 2010 through 2012, the ASM program was funded by NMFS. In addition, NMFS pledged to continue paying the costs of at-sea monitors through 2013 to the extent that federal funds are available, as it was felt that these costs would be too much of an economic burden on fishermen given the reduced catch limits proposed in 2013. The costs and majority of management of dockside monitoring were scheduled to be transferred to the sectors in 2011. The Northeast Multispecies Sector Program initially specified that dockside monitors would need to be present at 50 percent of all deliveries and offloads of sector harvests in 2010, and 20 percent in subsequent years. In 2010, NMFS provided $1.2 million to the sectors to cover a portion of the dockside monitoring expenses (Cost of Fishery Management to the Public). These funds flowed through the Gulf of Maine Research Institute as federal grants, which were intended to reimburse sectors for some of the expenses. Through Framework 45 (2011), NEFMC suspended the DSM program until 2013 and required dockside monitoring only to the extent that NMFS could fund it. In September 2011, NMFS terminated funding for dockside monitoring for the rest of the 2011 fishing year and for the entire 2012 fishing year. The agency made the determination that dockside intercepts by enforcement personnel were Northeast: Private Cost of Fishery Management February 2014 2 sufficient in the effort to monitor sector landings. Reprioritizing financial support for dockside monitoring was an effort to alleviate general sector operating costs. Northeast multispecies permit holders who join a sector must cover the costs associated with the administration and management of the sector, such as the payment of the sector manager’s salary. These costs are paid by sector members through annual membership dues and/or a surcharge on all landed pounds of groundfish or annual catch entitlement (ACE) sold to another sector. Typically, membership dues are borne solely by the permit holder, while the surcharges are shared by the crew. NMFS helped sectors with startup costs through a grants program administered by the Gulf of Maine Research Institute. Awards of approximately $15,000 were made to each sector for needs such as hiring sector managers, setting up offices, purchasing equipment, and establishing systems and procedures to facilitate the exchange of data between NMFS and the sectors. The Northeast Multispecies Sector Program revised the vessel trip report submission frequency from monthly to weekly for all vessels issued a limited access groundfish permit. In addition, a VMS catch report is required on every trip if fishing in multiple stock areas. Each sector must submit weekly and yearly catch reports to NMFS that include detailed landings and discards for all species by all vessels in the sector. In addition, each sector must annually report other types of information, including ACE transfers with other sectors and any redistribution of potential sector contribution (PSC) among sector members. A potential additional operating cost that a fisherman who has joined a sector may incur is the cost of ensuring their sector has sufficient PSC and ACE for all stocks in the areas they fish. Once a sector’s ACE for a specific stock is reached, all vessels participating in that sector are prohibited from fishing in that specific stock area until such time that the sector obtains additional ACE from another sector (Northeast Multispecies Sector Program). Sector members may be held jointly liable for fishing violations such as ACE overages, discarding of legal-sized fish, and misreporting of landings and discards. Data Gaps and Limitations Detailed data on fishery management costs incurred by the fishing industry are currently unavailable. However, the NMFS Northeast Fisheries Science Center is currently collecting data through the Annual Cost Survey. Information Sources Kitts, A. et al. 2011. 2010 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2010-April 2011), 2nd Edition. NMFS Northeast Fisheries Science Center Reference Document 11-19. Woods Hole, Massachusetts. Murphy, T. et al. 2012. 2011 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery, (May 2011-April 2012). NMFS Northeast Fisheries Science Center Reference Document 12-30. Woods Hole, Massachusetts. Northeast: Private Cost of Fishery Management February 2014 3 .
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