- Investigates the causes of economic imbalances.
- Explores and develops market-based solutions.
The project evaluates and disseminates the potential benefits of applying rights-based fishing to economically and environmentally troubled marine fisheries in the Gulf of Mexico. It also provides planning support for their application. Project efforts are directed at correcting current economic imbalances by applying market-based approaches. This is a collaborative effort involving the Property and Environment Research Center (PERC), Reason Public Policy Institute, and Environmental Defense (ED).
Note: Total project approved is $60,000 with $25,000 paid in Feb, 2007 to project partner Environmental Defense.
Pam Baker of Environmental Defense examining Red Snapper Catch. In March 2006 fishermen voted overwhelmingly in favor of Individual Fishing Quotas. Early results are promising.
Average Annual Dockside Price for Red Snapper in Florida, 1997-2007. The "real" price is adjusted for inflation.
Commercial and recreational marine fisheries in the Gulf of Mexico face a number of challenges. On the commercial side, fisheries such as the shrimp fishery and the multi-species reef fish fishery in the Gulf are plagued by economic and environmental problems. Red snapper, the highest valued species in the reef fish complex, has been declared overfished by the National Marine Fisheries Service since the late 1980s. Two species of grouper in the complex are so severely overfished that they have been declared off limits to commercial fishing. The shrimp fishery is suffering from fleet overcapacity, rising operating costs, and falling shrimp prices. Fishermen must find ways to reduce bycatch of other species while remaining economically viable. On the recreational side, charterboat operators and other recreational service providers in the Gulf complain that shrinking seasons and smaller bag limits are hurting their businesses.
This project is designed to meet such problems head-on by broadening the use of rights based approaches in the Gulf. To do this, the project carries out seminars and workshops and produces educational booklets; evaluates the financial prospects of transitioning to a catch share program in the Texas Bay shrimp fishery; estimates the economic benefits of adopting IFQs in the multi-species grouper fishery; provides technical support to a IFQ design plan for the grouper fishery; and develops options for applying rights-based fishing to marine recreational fisheries. All of these areas have been addressed to the fullest extent possible.
This final report lists all the accomplishments under the project. They are detailed below in each phase of the project:
Initial phase - Thanks to earlier efforts by coalition partner ED, the red snapper IFQ program has been up and running since 1 January 2007. After one year under IFQs, economic benefits include a higher dockside price for snapper fishermen (see chart) and a reported 50 percent reduction in fishing costs in the first season. On the environmental side, managers report that total landings will meet or be slightly under the total allowable catch set by managers. In addition, scientists estimate snapper discards at sea have been cut by 50 percent or more. As an initial step in expanding the use of IFQs to other Gulf reef fish, coalition partners Don Leal of PERC and Pam Baker of ED participated in the Gulf of Mexico Fishery Management Council Ad Hoc Grouper IFQ Advisory Panel January 9-10, 2007, to discuss results of the red snapper IFQ enforcement and cost recovery programs. The panel also reviewed grouper landings data from 1999 through 2004 to determine eligibility requirements for a fisher-referendum on grouper IFQs and a formula for initial IFQ allocation to grouper fishermen. In addition, Don Leal, Pam Baker, and Dr. Vishwanie Maharaj of ED identified data requirements for modeling and estimating potential benefits of IFQs in the grouper fishery. Quinn Weninger, associate professor of economics, Iowa State University, was contacted to develop the model and carry out the analysis.
Mid-term phase – Leaders in the grouper fishing community were taken on a field trip to British Columbia in May by Dr. Maharaj to observe the day-to-day operations of the multi-species groundfish fishery under IFQs. A number of Gulf fishermen commented that seeing how IFQs are used in the BC fishery gave them more confidence in applying them to their fishery. The grouper design panel completed a design plan for grouper IFQs and presented it to the Gulf of Mexico Regional Fisheries Council in December 2007. In early 2008, the Council selected IFQs as the “preferred alternative” for the multi-species grouper fishery in the Gulf. Leaders in the grouper fishing community are hopeful that IFQs will be in place for the 2009 season. In support of applying rights-based fishing to Gulf recreational fisheries, coalition partners Pam Baker and Don Leal co-directed a political economy forum in Big Sky, Montana, entitled, “Emerging Approaches for Managing Marine Recreational Fisheries.” The forum featured internationally recognized fishery experts presenting papers on the potential use of rights-based fishing in marine recreational fisheries. The papers will be published as a volume by Lexington Books in late 2008. Coalition partner Richie Ahuja of ED reviewed various proposals for a financial assessment of investing in IFQs in the Texas Bay shrimp fishery. In addition, the partners held a fourth educational seminar in Washington DC for policy makers and government fishery managers on how to improve fishery management beyond implementation of IFQs. Another notable mid-term accomplishment was in articulating to the US ecological community the impacts of rights-based fishing on the marine environment. With technical support provided by Don Leal and Pam Baker, PERC researcher David Griffith recently published a journal article describing the ecological implications of IFQs and harvest cooperatives in marine fisheries. The article, published in Frontiers in Ecology and the Environment, is attached to this report.
Final Phase - A finance model was developed by Richie Ahuja and consultant Boris Cooper to determine whether it is worthwhile to invest in transitioning to catch shares in the Texas Bay shrimp fishery at the current time. As a test case, the model was used to estimate the financial returns from the Alaska halibut fishery under IFQs (one type of catch share program) from 1995 to 2000. Under IFQs, the fishery produced returns that were higher than stock market and private equity returns over the same period. A similar analysis was carried out for the Texas Bay shrimp fishery using two scenarios of possible changes due to transitioning to catch shares. The conclusion was that catch shares remain the best option to manage the fishery but the returns from any investment in the fishery to support transition to catch shares would be very low to negative under current terms. These terms include extremely high fuel costs and depressed shrimp prices due to the dramatic rise in shrimp imports in recent years. Coalition partners continue to engage with fishery managers and shrimp fishermen to explore conditions that would help ease the transition to IFQs or another form of catch shares in the fishery.
Under the grant, a study by economist Quinn Weninger estimated the economic benefits of adopting IFQs in the grouper fishery. The analysis predicts that an IFQ-based fleet will be comprised of fewer, more cost-efficient boats than under the current controlled access management program. Results indicate that in the year of the data used in the study, 1993, the smaller more productive fleet could harvest the allowable catch at a cost savings of $2.92 to $7.07 million, 12 to 30 percent less than under controlled access management. Recent tightening of regulations in the grouper fishery suggests that the benefits of IFQs could be even larger in the current day fishery. A copy of the results and rationale is included as an attachment.
A booklet based on the Washington DC seminar entitled Beyond IFQs in Marine Fisheries was recently published by the partners (see front cover) and is available for download at www.ifqsforfisheries.org. Coalition partners Don Leal of PERC and Vishwanie Maharaj of ED attended a meeting of the Ad Hoc grouper IFQ design panel in January 2008 to discuss the completed design plan for grouper IFQs. A panel meeting is scheduled for April 2008 to discuss the steps needed to implement IFQs as the Council’s preferred alternative in the grouper fishery.
At the state level, partners Leal and Maharaj presented several right-based options to the Florida Fish and Game Commission for integrating commercial and recreational fisheries for spiny lobsters, stone crabs, and scallops in state waters. A copy of the options paper is under the attachments above.
This project develops strategies, conducts economic analyses, and provides planning support for the application of market-based management alternatives in troubled commercial and recreational fisheries in the Gulf of Mexico. These areas of support were applied in the use of IFQs and other market-based, catch share strategies in the commercial multi-species grouper fishery, the commercial shrimp fishery, and the recreational spiny lobster and stone crab fisheries.
Conventional fisheries management systems in the US and abroad have not only failed to eliminate overfishing, they have created enormous economic wastes. Fisheries in the Gulf of Mexico such as the shrimp and commercial reef fish fishery are critical to healthy coastal economies in the Gulf, but they are also classic illustrations of economic wastes. Economists estimate that one-half of the current 500 to 600 grouper vessels is all that is needed to efficiently harvest the total allowable catch set each year. Fleet overcapacity not only raises fishing costs unnecessarily, it results in greater negative environmental impacts, such as higher bycatch. Solving economic and environmental problems in the grouper, shrimp, and other Gulf fisheries will serve as a demonstration that market-based approaches can work to improve economic performance in coastal fisheries in the rest of the US.
Results of this project are being disseminated through educational booklets by the coalition partners, op-eds in Gulf newspapers, and peer-reviewed journal articles like the grouper study by economist Quinn Weninger. They are also being posted on our website www.ifqsforfisheries.org.
Project Link www.ifqsforfisheries.org
(Check sent: 11/29/2006)
(Check sent: 2/21/2007)